in october, at least we're going to hear a lot of people say that >> yeah. >> tom, thank you. >> it was great to be here with you guys. >> good to have you in with us this morning we'll get a final check on the markets. still up, bitcoin over 21,000. we're not at 500 we're up about 400. we'll -- some of us will be here tomorrow. make sure you join us. "squawk on the street" is next. i'm not. good tuesday morning welcome to "squawk on the street." i'm david faber with jim cramer. carl has the morning off let's give you a look at futures as we get ready to start trading, first trading day of the week it's tuesday got to keep remembering that tuesday. here's our road map. it does start with the probability of a recession. goldman sachs is raising the odds of one. one big question, have stocks already priced that in prices at the pump continuing to

surge as the president eyes a temporary halt in the federal gas tax. and kellogg says we're going to split into three independent companies. the old shrink to grow "playboy." -- playbook. we'll give you details. >>everyone is fed up with this market >> can i start with this we'll begin with the markets poised for a strong open after the worst week for the s&p in more than two years. say whatever you want. >> we've lost $2 trillion. in market cap. >> yes. >> it's starting to dawn on some of these strategists maybe it's time to cut the s&p target to 3,000. the most bullish one now, by default, is mike wilson because he -- >> mike wilson has gotten it all right -- >> fire and ice coalition nishgsen, how he's going to win the south and north. what i find amazing, david, is there's suddenly the realization we're in a bear market and things are quite bad in the meantime you and i know

almost every stock has been clocked, except for say exxon. >> that's more or less true. >> right >> there's a look at what dow has done i don't care about the dow i think they do this to antagonize us. >> we should do the russell. >> thank you. >> because that -- the s&p is good >> yeah. >> or the nasdaq i'm just saying that destruction is so palpable, but people are just beginning to recognize, we have to cut our price targets. let's cut our price -- let's downgrade adobe. morgan stanley did that. do you know how many more we have to have there's so many buy to hold downgrades >> getting rid of your ceo is that how you bottom? >> did you listen to the last conference call on doccusign >> it was a jailbreak. one of those like dan, why are -- i shouldn't laugh people lost their job.

dan, why are you losing all these sales people what's the story >> i like these -- i like our charts, jim, because we've been doing this, showing the way up to we only show the way down. we have to show the full climbing of the mountain and then descending of the mountain. >> okay. >> oh, my. >> now can we show the climb there we go. >> that insight, before people mourn that dan is leaving. >> yeah. >> there was rebellion of the ranks. dan was very defensive >> there's the fallout. >> now is the time if you're going get rid of him, wait until it comes all the way down. >> there's no k to it. >> more like the adirondack. maybe the catskills. >> the switch back right there okay but david, let's go over this. doccusign. >> tell me. >> that was a unique pandemic. >> yes. >> right a la peloton. >> is it dan's fault

if you were a salesperson and perhaps you had stock option, well, you would want to leave. but it was very clear that there was -- >> no. >> there was a groundswell against dan internally which was found out by the -- >> and by the way, if you were really smart and you said i'm completely over valued and everybody is getting crazy and tried to sell yourself, all your shareholders would be like how could you consider selling yourself at a period like this. >> i do think that when we see companies that need to be on the prowl to buy someone, doccusign is a great company and now you're -- >> now, right. i'm saying if you were smart, you might have tried to sell it off at 240. >> should zoom have sold i don't know. >> i don't know who would have bought it. >> i don't know either >> the multiples were way to high for any company, not that they aren't real. >> would you buy doccusign would you buy zoom >> now >> there is a thesis. >> i think there might be. >> i think the thesis is this, they've come down and still have a lot of cash. why can't they reinvent themselves

>> they still have businesses. it's not as though their business -- >> i agree with you. i think they are all shocked these guys are all shocked like zoom, it's time for zoom to make a move. david, they made that move, and it failed. remember >> yes. >> so it's almost like, we did that, that failed. doccusign needs to merge with someone. i don't know someone who is involved with the process. >> right. >> avery denison i don't know. >> right >> you know. you're the m&a guy. >> i am or i have been. >> maybe they should buy the plant based kellogg. >> serving the m&a guy even though no longer doing it as much. >> you had the kellogg i'm sorry. >> that was -- that was -- >> that was so low >> you are -- people don't know, man. you bring a gun to a knife fight. >> no. i would shoot myself if you're saying that. >> no. >> i was going to promote your exxon. >> we're going to do that. >> i felt i would --

>> we're going to start playing real parts of the documentary because we're ready to roll tomorrow night before we do that, take a listen to dan springer from june 10th. >> this is what i want peemds to listen to. how did we get that? we are so good. >> told "tech check. >> i don't think we've ever had a phenomenon where we became drunken sailors and weren't spending the firm's resources well i think we probably got to place with our customers where we allowed them to sort of aggressively purchase, you know, ahead of their demand, as they saw the possibility of the promise of digital transformation, perhaps we could have sort of slowed that a little bit to even it out. >> maggie wilderotter taking over as the interim ceo. she had been chair or is chair of that company's board. she's a long-time ceo at any number of different companies through the years. we know her well at cnbc. >> good luck patrick, jp securities said f i may, i'll do one for each of

you. dan, why are so many of the reps quitting i mean, typically don't get that unless it's so obvious that things are just falling apart. >> but jim, you got to a larger point, which is, the stock is down 77% in the last year. >> right they spent like drunken sailors. >> not just names that benefitted enormously from the pandemic. >> they had it all. >> it's so many other -- high multiple tech companies that have suffered significant declines in their stock prices, which gets to this larger question, what's the business? what's the earnings power of that business, particularly potentially heading into a recession? what should we pay for it? >> dan, adobe is moving into that a lot of companies are moving into that business zoom has got problems. teams and web x. i don't know what to pay for them, unless you wanted to make a better suite you could make a suite of products i had dan on multiple times and dan put together an amazing business we all switched to doccusign we haven't switched back to

having big meetings, but it's hard to figure out why some company doesn't come in and buy doccusign now as part of a suite. >> who would that be >> well, you know, like marc benioff only buys companies with growth salesforce ceo you would have to find someone who needs to be able to say, you know what, there's great synergy, we'll fire all the sales people and put that in and so, therefore, you'll have to find someone tough enough to fire 80% of the people. it's an interesting idea. >> it is >> not -- you have to be like scrooge. maybe scrooge mcduck. >> all right. >> more powerful figures at work >> scrooge the duck? >> scrooge mcduck. >> um, i don't know where to go with that so i'm going to move on. >> i would. >> thank you for the advice there. i appreciate it. can we talk about, i don't know, you want to talk about bitcoin you want to talk about crypto you?

>> sure. >> whether that's going to have any impact on the broader market >> it falls to 17,000. >> circumstances >> saturday. falls to 17,000. you would say wait a second, that's pretty manuel you wake up, it's back to 23,000 david, i know that this is a volatile security -- i don't know if it's a security. >> it's not a security it's currency. >> you can put 10% down and get it. >> yes. >> but david, it is beginning to feel kind of like a joke that you and i aren't in on. how could something fall to 17,000 on a saturday, bounce back, like several people come in and just decide it's thinly traded, let's take it back and then block gets $250,000 commitment -- >> 250 million. >> yes. >> they had to send me back to 250,000. i'm sorry. but i just feel -- i look at these things and say let's say,

david, that -- let's stick with exxon metaphor. >> okay. >> say exxon fell to 79 over the weekend and came back to 84, okay, did it really trade at 79? >> i don't know. i know the answer is, doesn't matter. >> no. >> i've been working on metaverse and read a piece that it's nfts and that's not tree it's not about nfts. nfts came up, they were like the spinoff of tulips. now they're not people who still believe in bitcoin that they can come on, they get angry about tulips. >> there are a lot of people that believe longer term digital currencies and nfts, the underlying technology, will absolutely be of great use and already is to a certain extent. >> use blockchain to make it so that -- >> tokenizing many things. >> blockchain have the stock

settle the same day. do that. you wouldn't have margin calls wait they are. i think there's a lot -- we're looking at these things too uncreatively. >> what does that mean >> i mean, if you want -- if i were to call dame jamie di-- jae dimon he wouldn't take my call. >> jamie won't take your call either >> used to i lost that -- >> i lost it too >> let's say, look, i want to trade this bitcoin. >> yeah. >> why don't we do this. trade stocks or an etf because they're doing, you know, this etf that's going in against bitcoin. trade stocks and we'll give you next -- we'll do next day or same day, because of blockchain. isn't that what you want you want activity. >> that's a good use case. there are a lot of people that believe nfts, tokenization, for lack of a better term, is going to -- without a doubt going to be very widespread

>> but then "the new york times" this weekend acknowledges that tether is the weak link. >> anything of value you're not going to securityize but create a market. >> what's your point >> i don't have a point. >> better than nothing. >> a show about nothing. >> i think we have to stay critical because something that goes from 23 to 17,000, to then comes back to 23, i question whether that's -- >> there are a lot of -- >> whether that makes any sense. >> a lot of key levels in there. all about levels. >> if you go -- on me, i'm done today. >> i'm doing "seinfeld." levels coming up, president biden considering a gasoline tax holiday as we get closer, of course, to a lot of travel that will take place on the 4th of july. >> because of the dock. >> biden tradeded the dock speaks of energy, we will bring you highlights from our documentary, incredible team -- >> i had nothing to do with it. >> you lad nothing to do with

it. >> my amazing producers, editors, cameramen, had a lot to do with it 8:00 p.m. tomorrow the futures, get srttaed with trading in 17 minutes. we are looking for a higher open more "squawk on the street" straight ahead. this cnbc program is sponsored by pimco. to adapt in the changing world, you could hire a professor of theoretical mathematics. we all know this equation, right? he'd crunched numbers day and night. that's it. to maximize profitability. morning. i have quarterly numbers that are beautiful. and forecast revenue from every corner of your organization. is that important? or you could use workday. the finance hr and planning system that helps cfos make better decisions faster. for a solve problems like a genius world. workday. for a changing world.

gasoline prices continue to be, of course, the focus president biden saying he's considering a national gas tax holiday in an effort to lower

prices at the pump of course tends tens of millions of americans expected to hit the road it's 18.4 cents, would require congressional action unclear whether he's going to do it, but you need congress to approve it. >> david, i have to tell you, that -- appro po of your documentary, you know that secretary granholm is going to sit down with the big refining and oil companies, hoping to come up with some sort of compromise my prediction is no chance whatsoever. that even though the oil companies are nef acknowledged for what they've done, which is become much more green you knowe refining level that's causing the problem. >> your buddy rusty brazil wrote a note about that, nice enough to send that to me, talk about

meeting in the middle. the president did send a letter to the oil companies about refining. >> yes. >> but the billions that are needed to build refining capacity and you're doing it with the idea of expected return over 10, 12 -- >> you can't that's why lion dell is trying to sell a refinery. >> 10 or 15 years from now we'll not sell gasoline. >> we'll be electric you can't tell these companies please go flat out, but we're also going to wipe you out. >> right. >> there's an inconsistency. >> what do you do if the market is moving that way does the government have to provide the bridge the government have to subsidize? >> i think it does >> the government does not want to subsidize companies that are making more money than god. >> well, i mean, exxon 23 billion last year, who knows what the number will be this year a lot more than 23 billion. >> if you want to make them pump more, you have to have more pipe, so it gets -- and you have

to have people willing to put a refinery in their backyard i would prefer not. >> i know. exxon is pumping more. it's a good way to transition -- >> they're the only one adding >> the permian, i watched it and saw how many wells they will be adding in guiana, but all of this taking place in the backdrop of what we were discussing every day not that long ago before gas prices became the story how much are you going to reduce your carbon footprint, are your shareholders willing to pay for that snooimts no they want the dividend. >> listen to an excerpt from the documentary. >> exxon is one of the biggest refiners and chemical weacompan. >> they will it's one of the largest chemical companies in the world and refiners >> do we have a clip >> we do it's interesting because this is the bigger issue, not about gas

prices today, but about are you making the necessary investments to reduce your carbon footprint and position the company properly for the future that we all know is coming, regardless how far fast we think it is, we'll start off with a big back and forth between myself and jeff, who is a member of exxon's board. take a listen. >> what would change the conversation that you're having with those shareholders? >> goes under water, palm beach is gone. i'm not -- i'm serious these guys need to be punched in the face these are money guys that, you know, they have -- >> all right you're not making me feel optimistic. >> no. >> you have to find the angle of attack that gives you an advantage that allows you to generate a return while meeting these other objectives. that's been the journey we've been on. that's been the work i've done for five years here in reshaping the organization because i recognize i got to do both y

i don't have the luxury of picking this or that >> interesting, right. >> sure didn't get into this to do what he's doing i think that's important to recognize. that he went in as an oil purse. right. now he's a person who is trying to figure out how to make it so that the environment is balanced, and -- >> darren woods is an engineer give them a problem and they will try to figure out how to solve it in the logical sequence. >> this man seems a lot less, wooden, candily, than the man between the two little trees or potted plants and answers our questions. i think this darren woods is much more personable and therefore less rigid. >> yeah. you're going to hear a lot from mr. woods during the documentary tomorrow night at 8:00 as we really do get into a lot of questions and his answers about what they're doing obviously we have the critics -- >> why did they let you do this? >> because they are making an effort to be more transparent.

>> if they were the evil empire they would never let you in. >> i think that's a good point i'll let you say that. i won't. >> from the beginning it shocked me given the fact that i thought they were somewhat embarrassed by the proxy i thought the last thing they would do is have you in. these are new people mike worth would have you in from chevron they want you to see how much progress they're making versus how they're being penalized by -- well how the government feels that they're bad actors. >> well that goes back to the larger question of whether they are seen as a trusted partner. something else that we get into in the documentary. you have to get ready for your mad dash that's coming up next count you down to the opening bell as well, less than 9 minutes away we are looking for a higher open stay with us on "squawk on the street."

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the opening bell is brought to you by nuveen a leader in income, alternatives and responsible investing. all right. let's do a mad dash. then we'll have an opening bell in three minutes you love talking housing in the mad dash. >> yes this is really at the crux of what we're dealing with. lennar, a great home builder, stuart miller will be on at 10:00, reports unbelievable numbers. orders up big and they see backlog up 16 and beat the numbers. huge number beat now, david, they also say, while our second quarter results demonstrate strength and excellent performance throughout the quarter, pretty good, the weight of a rapid doubling of interest rates over six months, together with accelerated price appreciation, began to drive buyers in many markets to pause

and reconsider now, if you're jay powell you're saying, okay, box checked. i got that industry to slow down now we will see price depreciation as we no longer get multiple bidders he needs to see rents down this is an example of what jay powell wanted. so he doesn't want to destroy lennar he just wants it to slow down and i thought this was significant on the comps call and -- >> he will be joining us later on. >> when he has a slow down he talks about it the stock, this is where you have the tough time, the stock is totally reflective of the slowdown is it really -- tomorrow guys have to downgrade. if you look at this they'll downgrade or cut the price target from 100 to 72. >> i've been listening, you talked about toll and the same mad dash in the previous ones and seem to like it, you're kind

of questioning how much further down it can go. >> both of these are not supposed to bottom here. the textbook says they can't bottom until everybody goes to hold or sell, but i thought it was interesting, there are no -- >> not until rates start going up they're not connected to just, you know -- >> i mean -- >> larger question, can the market bottom. >> how far are we in the rate cycle? are we closer to the end than we think? look, i'm trying to figure out, first of all, i come in, the markets are big. there's no reason for that. >> they can go up sometimes. >> no, but there's no reason usually like a reason. i'm looking at toll saying, does it really go to 25 where you would think that that's where people want it. the fact it's a $5 billion company, it should be 70, bought back a huge amount of stock, got a great business, and they have higher rates you get price appreciation but not horrible their homes are $900,000 and 30% cash buyers.

there's so much money around, david, that there has to be some serious losses taken by somebody >> yeah. >> all right pause here and get an opening bell in three, two, one. [ applause ] >> take a look. we're going to have more green on the board here at the big board, bristow, provides oil and gas transportation pretty sure i was on one of their helicopters. >> you were not on one for your -- i was on one of their helicopters when we went to the rig in the north atlantic. they are celebrating their merger with era group. at the nasdaq, pennant, a provider of home health and senior living services >> that was -- >> you said -- >> you kind of indicated you're almost surprised we're having this kind of rally there is no reason >> i want people to be careful because there tends not to be any reason for this rally. >> how about the reason being we

went down so much in the last -- last week? >> so what goes down, must go up >> i'm saying there are a lot of people saying why is it up there's nothing in particular other than the fact that we had the worst week last week, so you can let it run maybe you already have to reposition i think you let it run i just don't think it -- i would like the reason to be apparent eventually. >> right >> it's hard to come up with a reason >> i'm not going to make up one. >> no? >> no. >> okay. >> we saw some m&a activity. mondelez bought cliff. >> that's a great little -- $2.9 billion. >> paid a lot. a lot of people feel it was very high. >> i love the story he could have sold it, the guy that came up with this, for $100 million to quaker oats, and instead stuck with it. >> he labored. >> $2.9 billion. that gets them in the game against kind bars. >> well, yeah. paid a lot of money.

>> mondelez. >> dirk van der put. i like very much he paid a lot of money >> paid a large number for that. >> 46 times revenues that's very expensive. >> that is quite a multiple to pay 3.6 years worth of revenues for -- >> 9%. i don't think that's that good a deal. >> he's got to have it. >> he had to have it. >> must have >> i think that he's a very good ceo. >> look at that. he's done quite a good job. >> he has. >> personable. >> when i introduce him to my wife -- >> got to have cliff. >> introduced him to my wife and my wife said wow doesn't act like a ceo i said he's a person >> ceos are people too most of them are overpaid people most well overpaid, but they are people. >> there's a lot of people -- >> by the way they're just like you and me and have no idea what they're doing most of the time after 35 years of studying business that's what i can tel you. they just -- they make a good guess and like we're going this way. >> i mean, mondelez overpaid and

the stock is up. does that mean mondelez didn't overpay? >> can we move on to kellogg it's a good segue to kellogg. >> i think that's fantastic. snacking is snacking >> you tried to work in tony the tiger. remember the two of them, one in the tank and one on the box. >> yes tiger in the tank. >> you will do anything to work in the dock. >> i did not have anything to do with the dock. kellogg separating into three companies. ceo joined us on cnbc earlier. >> thought it was good do we have any tape? >> on "squawk box. >> let me give you numbers before we get to listening to him explain it snacking, global snacking, revenues $11.4 billion, estimated ebitda, $2 billion pringles, cheeseits, pop-starts. >> that's great to plan. >> rice crispy treats, nutri grain. lots of good stuff very good for you. >> pringles was -- noodles,

eggos. north american cereal its own company. about 250 million in ebitda. not really growing very quickly. then they will have a plant-based company as well. plantco. doesn't have an ebitda, but it's got a decent amount of revenue morningstar farms. >> people that are saying -- >> plant-based foods >> will that be an acquirer or can that be acquired how long >> yep. >> because people want plant based. >> yes. >> and that may bulk up a plant based company. >> it may very well. >> and -- >> that company -- >> the timing now, i mean, i don't know. >> because they're fed up. they had a good quarter. >> yeah. >> the stock was up 5% for the year like many managers they're fed up with a bear market and taking matters into their own hands >> listen to the ceo explain again, why now is the right time for this split. >> right now it's i think the

opportune time to do this. we are coming from a position of real strength and great momentum we have completely turned the business around from a top line and a bottom line perspective and we see the next step in unlocking our full potential and unleashing three new companies. >> all right they're unleashing three new companies. it's going to tata while them to be unleashed 18 months. >> that's when -- >> i mean we've got j&j. ge we can still sit here a year from now talking about these things they take forever. >> why is that explain to people why they take so long? >> you've got to set up capital structures for all of them you need shareholder votes, regulatory reviews a lot of different things. regulatory being the least of it really the capital structure, the management it takes a long time >> management, by the way, took that strike and got a good contract from the workers in 2021 >> right. >> david, here's what i don't

get. why would you ever want a plant based company that's almost like spac like. >> small and losing money >> right so what's the -- it's like i want the good part of kellogg, the part that -- >> you're going to have a certain -- a certain segment that that appeals to your esg-focused funds perhaps will find that as a name they can invest with. claim a little green. >> i remember we're all -- >> by the way, it is in a growing market. >> but, you know, this is part of the esg craze people are des straight to find pure esg kellogg is creating it. i think if you're pepsico you might say you know what, this bulks up my esg and makes me put -- maybe puts me in a higher part of the pantheon of esg. >> yep. >> goldman is under fire for what is esg and scope one, scope two. they're -- we should be staying on the story.

>> yes. >> because eventually either we're going to find that esg is going to be regulated by the government or they want visibility, or it's -- >> i think it's a little both. >> you do? >> yeah. i think it's real in some ways and also think it's a marketing opportunity for these funds and nonsense both. >> wow okay >> having watched it trying to really understand what's going on. >> do you think that the really bad -- >> that doesn't help. >> krispy kreme merging with snack. >> why not. >> if you start your day with prescri pringles, cheese-its, pop-tarts you're in good shape. >> we had a lot of cheese balls this weekend. >> a lot of cheese balls >> we thought it was good for us. >> remember when kraft split up, the kraft part hasn't done that well but the mondelez part has done well. they were all together, one company. >> best split up was philip

morris >> right when it owned kraft. >> it owned kraft. >> david, tell me that when you were poor like i was growing up, you got the little slices and your mom didn't buy the ones that had plastic in between them, those were too expensive, as she, by the way, watered down the welchs and talked about the welch family as being somehow bad -- >> listen i told you many times what i grew up on it. >> tang. >> it was astronauts. >> for me hawaiian punch convince it stunted my growth. >> tang was incredible you could taste it >> can we move to twitter. what's day without mentioning twitter. >> i did -- >> jetblue. >> how about the phony airline acquisition. >> stay with twitter oh, my god getting you to focus. >> he's just -- this is the warm and friendly -- >> he had this interview that he did, i'm just looking for the transcript here. of course i'm not finding it he did an interview that is elon

musk, of course, and talked about twitter, talked about the deal but sort of talked about things he's concerned about, and he lumped in not just the worry about the fake accounts and the bots, but the financing as sort of areas of concern. >> equity bucket. >> why can i never find what i need why? >> i don't know. >> because i stuck it in my twitter file here it is. take a listen because he does talk about things that are still awaiting resolution. >> there are still a few unresolved matters you probably read about the question as to whether the number of fake and spam users on the system is less than 5% as per claims, which i think is probably not most people's experience on -- when using twitter. so we're still awaiting resolution on that matter. that is a very significant

matter. so we're awaiting resolution on that. and then, of course, there is the question of will the debt portion of the round come together and then will the shareholders vote in favor i think those are the three things that stand in the -- you know, that need to be resolved before the transaction can be complete. >> will the debt portion of the deal come together the way he threw that in there, because as i've pointed out, this is his one true out if morgan stanley is the lead there and by the way there are many banks participating, somehow staying, no, we're not funding, then he only has to pay his billion dollar reverse termination fee and he's out otherwise he has specific performance on his equity. if the debt is there as you would expect it should be, even in markets where financing has become a little more difficult, they're going to end up in court. twitter obviously just waiting to see they filed their proxy

we don't have a date yet on the shareholder vote >> david the stock -- >> and a price cut -- >> the stock reflects the deal is not going to happen. >> right. >> correct >> yes >> and yet -- >> not at that price. >> he was sure last week when he addressed the company, and he clearly wants to run the company. he doesn't want to have to buy the company. >> or pay $54.20 that's for sure you know, maybe if you're twitter board -- >> he does want the company very much. >> you have a great case 100% never is so maybe you take a price cut. i don't know. >> he has a battle claim. >> he does. >> he's -- believe me, he knows. somehow you think he's like sort of takeover stuff, he knows what had he's doing the way he threw that in there is indicative of that. >> are brokerage firms that hungry for fees they're willing to risk this one >> risk what >> the collateral is the stock, right? >> no. on the debt financing it's the cash flow of the acquired company. >> but - >> there's no margin loan

anymore. >> that much cash flow >> there's enough to support $13 billion in debt. it's not an enormous amount of debt given the cash flow. >> that's good we'll see. want to talk jetblue nobody takes them seriously. that may be a little bit more. >> there's a thing called the justice department they may not be that active on other things -- >> they have a divestiture commitment now and say we offer a remedy package that contemplates the divestiture of all spirit assets located in new york and boston and as a result of the transaction, jetblue won't increase its presence in the airports covered by the northeast alliance is that going to be enough to make spirit say we're going to go with you? >> i think jonathan cantor who runs the antitrust department for justice has been itching to try to stop a noncompetitive deal and this would be the one he can say we're going to review this, and you can take a little

while. >> yeah. one person put -- said to me who followed it closely it's a glimmer of hope. >> glimmer i like that a glimmer of hope. sums it up. >> it does put pressure on spirit which is going to review both sides here, the frontier deal and the jetblue deal. the glimmer of hope. the first time we've said anything positive. >> look, they can go down to the justice department and say look, what do we do? that's different i think that that is jonathan cantor will say nothing you can do or say listen, you have to get out -- no florida, it has to be a tremendous florida competition. you have to find someone that can't be a straw man to buy jetblue's or spirit's larger routes you have to give the florida routes to delta. that's what he's going to have to do to get the deal done there is a semiconductor -- >> tell me -- >> based on absolutely nothing. >> like our show

what names are you thinking of when you say real semiconductor rally? >> nvidia is having a nice rally. still down 43% for the year. when i met with lisa su two weeks ago and she -- raise numbers, i thought that that might help the stock, but it hasn't helped the stock at all and yet today, it's kind of like people realize, wait a second, maybe there's something going on there. i had cristiano on, i know you know cristiano. >> i do. qualcomm. >> he's going to bake the numbers and people cut the numbers today. he is confident -- this stock is up three it sells at 9 times earnings qualcomm is considered to be a handset company. >> going to sell like in a recession. >> what's it going to sell like if china opens up. it's recession versus open up. if it opens up qualcomm goes to 50 recession i think the stock dose down 10. that's a good risk/reward.

>> china could open up and we could have a recession >> no. >> no? >> china is integral to our economies growing. >> if china opens up, the chances of us having a recession are lessened >> absolutely. i think that there's whole industries -- like the auto industry, still tremendous demand for autos but they can't make a lot of cars. >> interesting story in the journal on gm versus ford wen it comes to electric vehicles the different route yours friend mr. farley and mary barra have taken. >> i'm friend with mary barra too, so i resent that. >> you're a farley friend too. >> i talk to mary. she's fantastic. my wife test drove the hummer and it was fantastic >> the electric hummer >> a hummer suv coming out she intends to get in the fall. >> isn't the hummer an suv >> there's a big one and small

one. she felt it hard to park she said it turned everybody's heads and she felt like a queen. >> any of this put pressure on tesla over the longer term or not really >> i mean like -- >> so dominant -- >> jim has to get up to 500,000. pretty quickly scales up to 500,000 i don't think that tesla will sell as many in this country he's pick-up, though we're still waiting the tesla pick-up. >> apparently will light up your house. what i see on twitter. >> everybody using this, power all sorts of other stuff. >> the hottest truck in the world. they're all sold out you want a maverick, which is a truck i have, 44 miles to the gallon three days supply of mavericks now there is a warranty issue, that gm has not had. gm has had multiple lines of electric and ford is going for narrow line and a lot -- that's the issue, david gm's big 11 worth of trucks --

of cars better than ford which is really focused. i don't mean the foe cus, i mea focused. >> i think i'm renting one of those in the uk. that's going to be great. >> when are you going to the uk? >> next week. >> why am i the only person here no matter what >> i don't know. >> why am i the furniture? >> i don't know. >> i'm a convertible >> why >> i don't know. >> castro convertble >> my first murphy bed was a castro. >> i'm sure our viewers are fascinated by that. >> david come on, give me a break what time is your doc on >> 8:00 tomorrow >> you ought to come on the show tonight. >> i will. >> will you really you'll come on "mad money" tonight? >> i will come on "mad money" tonight. >> will you bring clips? >> i will bring clips. >> okay. >> and snacks. maybe pop-tarts, cheese-its. >> i'm going to do kellogg tonight. i have to.

like you, separate the toxic from the nontoxic and everybody is happy. >> everybody noseknows frosted flakes are good for you. >> there's a big picture of me on your show. >> my god. okay >> look at that. >> did i tell you my wife doesn't like cheese balls or baconators and wanted to make that clear david. >> you're setting up for another john oliver segment on whcheese balls. >> reminder you can still get in on the cnbc investing club with jim. sign up, find out more cnbc.com/join the club or point your phone at the qr code on the screen and go right there. before we head to break a quick update on the bond market. we hit 3.5 last week close on the 10-year we have backed off a bit at 3.283 on the 10-year yield

two-year at 3.190. we'll be right back.

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i would like to think you were going to do exxon for doone. >> there was a fantastic piece, investing to growth, credit suisse, refining will be the up side, the cash flow here is hoo amongous if that's the case, why don't they do what we like, which is to become the leader in carbon capture, or are they >> they're amongst the leaders, but if there's a price on carbon that's higher than it currently is, in terms of getting paid for it, they may do that, but you do wonder when they have that much money coming in, could they be

bolder that's an important question. >> if i am the president or secretary granholm, listen, you make way too much money, the american people are angry. >> but coming at them? apple makes an enormous amount of money that's not right >> oil was at a negative price and they lost fortunes, so they are in tune with capitalism. and when they win big, if you tax them, then what would happen, david, they'll say the hell with it, we can do this in other countries. what do you have on mad tonight? >> david faber, it's a documentary, and then richard cramer faber and cramer >> it's faber and cramer >> that kramer is spelled with a

"k." >> the stocks have a major his they've got a lot of debt, five times earnings, so at 11 -- as there are many stories where stocks have been cut in half they have to be looked at. they're just so far down i urge people to stay open-minded. >> i'll see you later. >> coming to the hood? >> you damn right i am keep it right here hybrid work is here. it's there. it's everywhere. but for someone to be able to work from here, there has to be someone here making sure everything is safe. secure. consistent. so log in from here. or here. assured that someone is here ready to fix anything. anytime. anywhere. even here. that's because nobody... and i mean nobody... makes hybrid work, work better.

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okay. but it'sahhh! human... wa-hoo! ha ha! no! no ha ha! ♪ good tuesday, welcome to another hour of "squawk on the street." i'm david faber with mike san santoli. carl has the morning off, and morgan is on maternity leave a quick look at the markets, you can see we're getting housing data, and we'll get to diana olick. >> good morning, david existing home sales in may dropped 3.4% to a adjusted rate of 5.41 million units.

that's the slowest since june of 2020 though april's numbers were revised slightly lower now, these are closings, so based on contracts signed in march and april, and the 30-year mortgage rate went from 4% to 5.5%, now it's over 6% inventory is rising slightly, 1.61 million homes for sale, an increase of 12.6% for april. tight supply is keeping prices higher for now the median price of an existing home sold in may was an increase of 14.8% year over year, the first time we've seen a 4 handle on that as well. it's a new record. sales of homes priced below $250,000 were down 27% year over year

rising rates are hitting the builders as well noting a pause from buyers' release. we'll talk to stuart miller in just a few minutes, mike >> certainly looking forward to that thank you. here are three movers we are watching, starting with dock usoon, the ceo has agreed to step aside immediately docusign, the stock is down more than 70% over the last 12 m

months. you sigh spirit is up there 7% turning to the broader market, the s&p 500 up about 2.4% in the early going. we were down about 11% over the past two weeks, so a pretty strong bounce, but one that was due cfra analyst sam tom, and an andrew sliven. we seem to be primed for a bit of relief, but to put it in context, in terms of the scale of the damage and what it might tell us where we are in this life cycle of this bear phase. >> good morning, mike. we're basically down 24%, which is really a minor bear market, but at this point in time we have actually seen no -- none of the 148 sub-industries in the

s&p 1500 that are above the ten-week moving average. only 7% on their trailing 40-week moving average are positive so right now it does say you probably want to start nibbling, though the bottom is probably not in place. >> andrew, how does it all sound to you we can talk in terms of price or value. price has reset in a dramatic way, and very broad in terms of the damage, in terms of how oversold things appear, but what does the risk/reward look like to you as a buyer of stocks? >> yeah, i completely with what jim cramer said just before the top of the hour.

you have a lot of stocks down 50% and you have to step back and say, where is the opportunity? where has sentiment swung so negatively that the rate of change could actually be positive one of things i would point out is that the university of michigan consumer sentiment is at a 40-year low so to me, not because of oil prices and so forth, but could the rate of change -- i think that's the case, so i think it's early. it's early for the market overall, but you have to start looking for stocks, where the valuation can provide support, and really beaten down that's not the market, but it is the tipping stock. >> i want to compliment you, by the way, your fund is down a lot

less than the broader market, so clearly you saw risks earlier and took action. it sounds like you're getting more constructive, but give me the overall market sense do you think the broader market, the s&p has more down side from here >> i think the market has a valuation problem. at 1times forward earnings, with earnings vulnerable, i think that's expensive, so i expect the market weakness continues, even though we might get a down here near term, about you in terms of positioning, it's way too late to buy energy or defensive stocks. those are late cycle, so i think you have to start to anticipate that early cycles could be bottoming in the near future i think, you know, that's the se setup. i think for a portfolio manager like myself, begin to anybody on

some of the stocks that are down a lot. >> begin to nibble when do you sort of do even more than that? is it going to taked fed being very near the end when we get to the terminal rate? >> i think there's two things. the confidence rate, or inflation really starts to come down i don't think a recession or no recession really matters historically the market starts to do better when inflation starts to come down. that allowing justification for the fed for pivot. at that juncture, i would get more aggressive in reducing the low-risk stocks that have led to us hang in there we bought them last year, it worked they have done well on a relative basis, and you want to begin tots more aggressive in the types of stocks you own.

>> sam, when you were talking about none of the sub-industry groups are above their ten-day average, just a lot of rare extremes we are seeing here. it makes me think back to how many times in the rally off the march 2020 lows we were say never before seen, right we had never really seen a 35% drop recovered that quickly. we never saw the s&p double off a low. and what it means is, even though we're down a lot, we're not that far back in time. we're not even back, what, 18 months or something? does any of that seem relevant in terms of trying to fashion the outlook? >> well, i think it does probably most important for me is we have yet to see a capitulation i monitor a rolling 15-day average of the intraday high/low percent changes. typically bear markets are well

above two standard deviations from the mean. right now we're not even at that level. to me what it indicates is we still have some more down side to go, and weneed to have a real panic session to put that percentage above that two standard deviation level, and then as andrew was saying, i would actually be looking for the worst performers, because the worst fourth second ore end up advancing 56% in the following 12 months versus the market's 45, and it beat the market about 82% of the time form. >> yeah, i guess that seems fob the diagnosis that the favor has to spike before it breaks. sam and andrew, thanks very much. >> thank you. as we always do, we're keeping an eye on shares of tesla, lose i had and rivian are also up sharply. but this morning at tesla, elon

musk laid out the plans to cut jobs in the company. our phil lebeau has the latest. >> this is a confirmation of what they tweeted about a week ago, saying there were be job cuts at tesla. he was speaking in doha earlier today, and here's how he says it will roll out in terms of the cuts at tesla. these are salaried cuts, now hourly orkforce, but the salaried staff he said they will be reducing it by 10% there's so many who are the hourly workers here's musk earlier today explaining the rationale behind these cutbacks >> we expect to grow our hourly workforce, but we grew very fast on the salaried side, and a little too fast in some areas.

so it requires a reduction in salaried workforce wore about two thirds hourly, one third salary >> this is going to be looked at as a prudent move. running all the way through last year, remember we will be getting their q2 delivery numbers shortly after the monday of course, we saw the shutdown of the factory in shanghai as they had covid restrictions in that country, so the volume there will be restricted that's the q did up 2 numbers will be down, or the expectation is they will be down compared to q1 they do expect to grow total workforce over the next year they're ramping up in texas as

well as in berlin. this is a company that still had a growth mode, those on the white collar side, he believes the prudent thing to do is trim staffing for now he was also asked about the lawsuit filed in california by a couple former tesla employees saying that it violated the state laws when it comes to mass firings, mass layoffs and there should have been more notification time. musk was asked about that. not overly concerned his belief is whenever you have anything involving tesla, it will get outside attention that was his response when asked about that lawsuit in california. >> yeah, it was an interesting interview overall. phil, i don't know if you know this, but how much did they increase do you know how much staffing has gone up in this group?

>> i don't have a total number they have about 100,000 employees worldwide, so that the means between 3,000, 3500, in terms of the white-collar staff that will be cut back. they have been growing aggressively not just in terms of vehicle design, but they have so many software engineers i mean tesla really is a software company as they have grown, it's only signal that perhaps every once in a while you get a little too aggressive when the you have the issues you're facing in terms of costs, in terms of production, you trim it a bit it's not the end of the world. i wouldn't be surprised if things head back at some point in the future. >> yeah, that's a great point. phil, thank you, phil lebeau, with tesla shares up over 8%

the supreme court is in the final weeks of its terms the justice have 16 remaining cases to be decided by the first week in july we had two opinions, but neither were the cases that people are focused on the dispute concerns mississippi law that bans abortion after 15 weeks, and a decision could pote potential change the roe versus wade we will be monitoring every decision of the supreme court until the end of the term, and will bring you special coverage as warranted. as we head to a quick break, here's a road map for -- with the chairman of lennar plus chaos continues in the

crypto market, bitcoin bouncing back this morning? >> kellogg's plans to split into three separate companies "squawk on the street" will be right back

ask

homebuilder lennar out with an earnings beat however, the company is saying it's beginning to feel the impact of higher interest rates and rapidly appreciating home

prices our diana olick is back with us. >> hey, mike, i'm joined by stuart miller, chairman of lennar congratulations on a strong q3 i want to get to q3 now, you wrote in the release, buyers are pausing and reconsidering. do you expect the pause to be anything like the last housing crash we saw over a decade ago >> good mornings, diana. i hate to step over q2, but that's behind us what is hatching with q3 is only natural. the home buyers are buying a monthly payment. that derives from the price of the home and the interest rate applied. as interest rates go up, it becomes more difficult to afford

the monthly payment so we're going to see some adjustments, reing. as customers process what has been an extremely sharp rise in interest rates, it's almost doubled in six months. as they process that, it's natural that there will be a little sticker shock, a bit of a pause and there will be some reconciliation at the end of the day, we have a housing shortage across the country. we're going to continue to build homes and will adjust price as need be. >> you said you are focused on affordability, cancellations and buyer traffic. have you started to see more cancellations? and the average price on the home is up 17% and you're guiding for higher prices as well are you able to reduce prices, given your costs

>> the answer is yes, the price will flex. and we use a dynamic pricing model to make sure we're closely tuned into conditions, and we adjust the pricing down. it's not securely a function of generating margin, so prices will flex. we are very focused on affordability, making sure every home we have built meets the needs of the country yes, we're still able to produce a healthy margin, even as prices, wages, costs rise, we're able to manage that balance. >> how do you think you as well as other welding will adjust we saw the number of homes under construction last week up 25% year over year

is there any concern for the next few months? >> no, i think if you look at the numbers of homes proud in the past decade, they trail the average over the past 50 years by a sizable margin. we'll have to adjust pricing to make sure the interest rate offset is reflected in the pricing. some prices might come down a bit in order to accommodate affordability, but america needs homes, we need workforce housing and we'll continue to fill that void i think volumes will remain stable, so it would be a bit bumpy, but i still think we're going to answer the call, america needs new homes. >> if you did give some guidance, but what are the investors to expect over the

coming months, given that guidance, as you said, is only guessing >> guidance is more like guessing, in that the short term, we'll have to adjust as the market adjusts remember that chairman powell has said he's committed to getting inflation under control. that means that we're going to see a fairly aggressive fed move forward and make the adjustments that are necessary against that backdrop, to try to figure out exactly how the homebuyer is going to react, and there's more guessing because we don't know what the government is actually going to do to win the war against inflation. at that plays out, i think the short-term numbers broadband a little less certain, but as we look over the horizon, the longer-term number, the longer-term volume will be consistent. >> lennar had an investment in

an i-buyers open door? do you see that having more tra traffic? >> we are invested in open door. i think that's an excellent participant in a market just like this. i think what you're going to see is open door and other i-buyers fill the void to actually take place. yes, it will continue to buy homes. i think it will use a dynamic price model to make sure as it buys, it sells, and it rotates its inventory, i don't think you'll see big buildups. i think you'll continue to see it find stability. >> chairman miller, thank you so much >> nice to be here diana, thank you

as we head to a break, check out shares of palantir, saying that investors are undervaluing growth palantir down more than 50% like so many once-hot software stocks, up 8% this morning we'll be right back. what if you could change your surroundings with the touch of a finger? now you can. biometric id... inside the innovative, new c-class. if you wake up thinking about the market and want to make the right moves fast... get decision tech from fidelity. [ cellphone vibrates ] you'll get proactive alerts for market events

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♪♪ oh hey, don't forget about the tense music too. would you say tense? i'd say suspenseful. aren't they the same thing? can we move on guys, please? alexa, turn on the subtitles. and dim the lights. ok, dimming the lights.

energy sector is rebounding in today's trade, this after falling more than 17% just last week the xle has been a great performer this year. you can see up 36-plus percent c for the year against, despite a tougher month, exxon also an upgrade from credit suisse this morning. it's not outperform, saying exxon's investments in attractive projects, many of which i have seen, because of course we do have a documentary tomorrow night 8:00 right here on cnbc. don't miss it. exxon mobil at the crossroads.

you can stream it eventually >> it will live on >> exactly. >> you didn't misit forever. after the break, we'll talk bitcoin trying to rebound, and check out the market, just about at the highs today, the s&p 500 up about 2.5%. the nasdaq downperforming, up 3% apple itself ualst%.p mo 4 we're back in two. this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech.

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merrick garland making a surprise visit to ukraine, meeting with the prosecutor

general, to discuss u.s. and international efforts to help identify, apprehend and prosecutor those individuals involved in war crimes and other atrocities in ukraine. the january 6th committee returns later this afternoon, and will focus on -- the committee is planning to details the ways form er -- you hearing is set to begin in about 2 1/2 hours from now american airlines will be cancelling flights in september, claiming a lack of pilots. service to those cities will end september 7th. american airlines says it's reaching out to customers scheduled to fly to and from those cities after that day.

we're having quite a rally, but there's been a lot of. >> this makes sense to have this a lot of readings said they were watched out the what might be a more interesting question longer term is actual value being serviced, or are we just paying back to some of the overshoot be got to the upside. as they were completed and, of course, everybody says what about earnings estimates, yes, probably, but that's probably

why the valuations are down. >> it's 13 times earnings, small copse 600. >> to andrew slimmen looking back at periods where rates were moving up. >> that process is more of a work in progress

almost when you have that fame outs so i think there's pockets of the market that have had that pain, but overall, s&p 500, possibly not in terms of the nasdaq performing quite well, as you see. let's turn to bitcoin, but a buildup in cryptoleverage may still be weighing on the asset class. really catching up, and pouring some fuse a recent price declines

the amount of interest-bearing cryptoprojects we've seen triple in the past couple years or so we dipping into -- with very little disclosure on the back end. someone cared it to the subprime mortgage crisis, and who -- analysts are call it a total value watch, they also call it tvl to track deposits. that market has lost about 124

billion worst the supply of usdc pegged to the price of the. >> while tether, which is -- 13 billion worth of redepositions mike >> kate, thank you very much >> let's bring in william quigley. he joins us here on set. great to have you. we've had severe, severe corrections, but none this severe when we had this much leverage >> so this seems like the test here >> what's your read on that?

and make the. >> i don't see there's any it is they're like the senior la to torrie. >> they came after tether, some of those not backed. >> some of them backed by the issuer that created problems what you'd see is a lot more scrutiny around the mem

information. >> you're saying it's still just heavily trade d how do you account for the flows away from it >> tether is so ingrained in the rest of crypto, half of all trading pairs settle against tether as you see a decline in crypto overall, useal -- >> the biggest one of the bench. >> so that sends a very positive

message. even i was surprised at the amount of leverage in the system it was darn difficult to figure it out we all knew, with in a much leverage, when it does under wind, typically it does unwind quickly. when they are letting people borrow their crypto, they're going to be more concerned about what are you doing with it that was a question i kept asking if we're giving you crypto as class rule, what are you doing with the collateral? it looks like -- >> so more connections, perhaps? it sounds reminisce independent of the securitization that took place in '07-'08. >> with one gigantic difference. the housing bubble was fueled by taxpayer-funded deposits and taxpayer-backed organizations

buys those loans in this case the crypto leverage is other people with crypto lending it out it is a closed symptom, which is why, when you see a trillion evap evap evaporate, you don't see it spread so it's very different >> big picture on the way up. >> this is a control on that what's going on live, what is being build? >> primarily how fast you can

invite >> you can use that in the areas of nft and gaming, it's about a $200 billion revenue per business they look toe very well position when august marched reality being so there's a lot more that blockchain can contribute. >> but it seems not necessarily to translate into any particular right or wrong price for the coins. >> it's always hard to pay that right?

whether there's alternatives, so crypto, i think will always be quite volatile in that reason. >> >> thank you, guys. >> we're going to talk about kellogg's plans to split into kellogg's plans to split into three. ♪ with my hectic life, >> yeah, tesla, we're back after this mom, can i go play video games? sure! ...after homework. thankfully, voya provides comprehensive solutions, and shows me how to get the most out of my workplace benefits. what's the wi-fi password again? here... you... go. cool, thanks. no problem. voya helps me feel like i got it all under control. because i do. oh, she is good. voya. well planned. well invested. well protected.

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we are getting an update out of the supreme court for that, eamon avers. >> five decisions from the court this morning the court did not, however, hand down a ruling on dobbs versus jackson women's health that could be the case that strikes down abortion rights that have been in place in this country since 1973 with roe versus wade. they decided a medicare benefits case, a case on armed robbery, a

workers' comp case, a case involving funding in maine for students to attend private school, and a case involving inmates ease access to evidence. there's no indication of when the abortion decision might be coming that's just the way the supreme court works. >> thank you, eamon. kellogg shares are rising, as announcing plan to separate boo three companies. sara eisen has more. >> it's interesting that they're only up 3%, up as much as nine premark. the news is the company is breaking up. it's nothing going to become three public companies the main one will be comprised mostly as snacks, think cheeses, eggo waffles, steve callahan telling me earlier this morning, this is where the company will

be with the growth. >> it's over an $11 billion business that will be the global snacking companies if you think about triples, it's a worldwide brand, but cheez-it, pop tarts, but we have tinkered with, and they have done extremely well the expansion opportunities or great. the ability to focus on just those brands and mostly the snacking space is a tremendous opportunity and our developing markets become bigger as a proportion of the sales. so it's a very growthy company. >> wall street really never gave kellogg credit for brands like pringles because of nonexistent or growing cereal brands and

then there's a third company created here that's a pure play plant-based food company, a lot smaller, including morningstar farms. it could be a potential acquisition target hid quarters of the global operation mofl from michigan to chicago. i'm told no one will have to relocate, and there'sno anticipated layoffs. the ceo did tell me that kellogg still runs deep. it's a very long history here with the founder, w.k. kellogg who created corn flans, there's still a possibility they'll use the kellogg name in one of the three companies. this will all unfold over the next 18 months. >> 18 months is a long time.

me huge splitoffs take years, and then what about takeover possibilities? why not try to sell the whole company? >> i think the rationale -- i asked him about it, they're unlocking value by creating independent companies here, special it's part of the rethinking -- but on the other two, having them run independently, having people grow unindependently, which is in spec heart decline for the last 10 to 15 years. will make it a stronger company, he said that will be a high hurdle, but no question wall street jumped there, and thinking about strategic possibilities here, right? how long have we been talking about food deals >> kellogg as a whole is $23 billion, right

. >> acquisition targets could also inspire other food companies to act more aggressive to to unlock values. some of the this is conglom rats have multiple they do somethin this post has snacking and also cereal i think there are a lot of opportunities, and the food stocks, even though they had a pretty good year because they're staples and they have high dividends, are relatively cheap. part of the thinking here has to be on the snacking business. >> mondelez gets a 20 times multiple >> just to be clear, rice crispy snacks are going to be in a different company relative to rice krispies. >> correct, that's the distinction. >> anyone you don't have on these days >> with the consumer companies, i cover those closely. >> you do a great job. >> i don't have a documentary, though >> no, and you're not going to

you're not going to. preventing that. >> thank you so supportive. >> lay my body across the road coming up at the top of the hour, "tech check" coming to you live from cannes evan spiegel talking social media, digital advertiser, a lot more stay with us

as interest rates go up, it becomes a little bit more difficult for people to afford that down payment or afford that monthly payment. and so we're going to see some adjustments, rebalancing between price and interest rate. and as customers process what has been an extremely sharp rise in interest rates, it's almost doubled in six months. as they process that, it's natural that there would be a little sticker shock, a little bit of a pause, and there will be some reconciliation

>> that was stewart miller he joined us earlier this hour on "squawk on the street." the housing market, of course, and cooling, after a very hot pandemic fueled stretch. joining us to discuss, red fin ceo glen, always good to have you. give me your take on what you heard from mr. miller? you agree with him >> he nailed it. i agree with him 100%. interest rates have increased at an unprecedented rate and that's causing buyers to pull back. >> simple as that. how long does this continue, glenn? >> well, there are some profound demographic shifts that are in favor of the housing market. millennials have come of home buying age people can work anywhere so at some point, i expect people to continue to buy homes. obviously, they're still doing that now, but i thing it will come back to a higher rate it just might take a while it might take six months it might take 18 months.

nobody can guess where the economy is go, and consumer sentiment is at an all-time low. >> yeah, you recently unfortunately had to lay off some employees as well, i think 8% of your employees 6% if you include the people of bay equity are you right sized as a company given the opportunity set in front of you >> we are. we are i feel this deep responsibility for the fact that we had too many people coming into this home buying season we had been hiring at a berserk rate in 2020 and 2021 just to keep pace with the housing market, and then everything went soft very quickly. and we found ourselves idle in many departments so we're at the right size now i wish we had handled it better earlier. that's on me >> glenn, you mentioned the fact that there has to be adjustments in this market mortgage rates have gone up so quickly that it's probably

frozen and felt like it's locked a lot of potential sellers in the market, but you still have the demand you mentioned the demographic wave the late '70s, people point out, was a very good market in a sense for housing because the demographics, but prices had to be the way that the market cleared. afford nlt has to come back. how quickly can that happen at this point from the levels they're now sitting at >> well, it hasn't been cataclysmic. there's a huge change when you go from 20 offers on one house to five offers to one offer. but all you need is one. and what we're seeing is that about 1 in 4 homes are now being discounted that indicates that some properties aren't getting a single offer whatsoever. even though demand is down about 15%, our offer win rate is significantly up because almost every offer we write ends up winning. so we're telling buyers that if you have been frustrated over the spring, you come back into the housing market it just depends on whether they can afford it.

the median payment for a median home has increased 50% because that's the product of interest rates and home price increases, and both have shopped through the roof it's really just a question of how much dry powder the consumer has, especially after their 401(k) has been waxed. >> yeah. you know, you were talking about the pain of having to lay off employees and right sizing your company. what about the pain of watching a stock decline 85% over the last year? how is that impacting morale at the company? stock-based comp i'm curious how you're dealing with what obviously has been a dramatic decrease in the value of the company in. >> i'm sure it's had a profound impact i know that people get blue when the stock price goes down because they think that's a referendum on the company, and at some level, it is, but you just have to remember markets in the short term are popularity contests and in the long term are weighing machines.

they are the sum of our long-term profits. so we can't pay attention to what's happening to the stock every single day i think because we're a mission-driven company, the ups and downs are a little easier to take if you're always just about the money and not about putting consumers first when they try to buy or sell a home, you just feel bereft when your stock price is down. but the reason i have been here for 16 years is because i really believe in what red fin is doing, and i think many of the other folks at redfin feel the same way so our attrition has been lower than almost any other real estate brokerage in fact, i think it's been the lowest we hope to hold on to our people better than anyone else. we'll see. >> well, glenn, wealways appreciate your time and your candor thank you. >> thank you thanks for having me >> you're welcome. >> about 30 seconds before we hand it over mike, what are you going to be watching as the day moves along given the significant rally we have so far? >> you want to see it can

sustain beyond what we have here, not just today but over a couple days. we're up about 100 s&p points. we were down 220 last week you're not quite half back i think 4,000 on the s&p 500 is the minimum for saying whether this is more than a bounce >> all right, we will see. that does it for us right here on "squawk on the street." time to send it over to "tech check. >> well, happy tuesday welcome to "tech check." i'm jon fortt with deirdre bozza. carl has the morning off strong dollar, weak guidance, how macro headwinds are affecting tech ahead of chair powell's testimony tomorrow. >> plus, what's oversold and what's a falling knife we'll consider where investors look for opportunity as the nasdaq bounces 3.3% at this hour, and speaking of stocks that have come way off their highs, the ceo of snap, evan spiegel, joins us in just a few minutes live from cannes what