the highway trust fund can both be done take you live to washington with more and fed chair, jay powell headed to the capitol hill grill. he'll defend the fed's biggest rate hike in 30 years to a senate committee it's wednesday, june 22, 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 -- or at least i am i'm becky quick along with brian sullivan, joe and andrew are off today. brian it's good to see you this morning. thanks for being here. >> sure. my pleasure. let's look at the u.s. equity futures as brian mentioned you are seeing a big give back from yesterday's gains.

the dow futures down by about 389 points s&p off by 58, the nasdaq down by 203 points. this comes just a day after the best day of the month for stocks yesterday the dow was up by 641 points the s&p and nasdaq were up by about 2.5%, but the relief we were feeling on the tuesday that felt like a monday, giving back some today we'll continue to watch but look at the treasury market you see the 10 year yielding right at 1.2% we'll see what happens with the 30 year at 2.89% right now crypto prices coming back down this morning right now bitcoin is down by about 3%, back to 20,429 but still well above the low it hit over the weekend when it fell below 18,000 crude oil prices coming down today, not sure why on this. some concerns out there about what's happening if we're headed

for a recession or not but wti is down by a whopping 5% down to $103.93. brian there's news out there this morning it's counter intuitive to the news we're seeing in the energy market right now, though. >> yeah. get to that in a minute. i think becky, i'm not michael santo lee but i can play one on television yesterday seemed like the classic bear market bounce, every indicator was indicating oversold headed into the weekend and suddenly stocks, crypto, every asset class bounced big time yesterday and look where we are right now, the biggest rallies, i'll remind the audience, the biggest rallies always come in bear markets. they happen. you can go up 10, 20% even in a longer term trend down market. breaking news for the biden administration in the last hour, aimed at hopefully easing some of the pain at the gas pump,

amon javers joining us now with more >> good morning to you president biden is going to propose that congress end the gas tax through the course of the summer, resuming it in september so the busy summer driving months will have no gas tax according to the biden plan. we know the president is going to call for congress to suspend the federal gas and diesel taxes for three months, that is until september. he's going to request that states suspend gas taxes or find similar relief he's asking industry to put what he calls record profits to work and not to absorb any benefit they get from any gas tax holiday. he's also calling on retailers to lower their prices. it's an 18.4 cent per gallon on gas. 24 cent per gallon on diesel so that's a hefty tax coming off under the plan the president is calling for no effect here on the highway trust fund and the white house officials yesterday said they

think they can do that because remember there's been this enormous surplus of tax revenue coming into the government, they can repurpose that revenue and put it back into the highway tax fund, of course, the gas taxes go into the highway fund which benefits infrastructure projects around the country without that they worry they have potholes to fill. the president here is calling for congress to do something he's not doing it himself. he doesn't have the power to do it himself taxation, that's a power of congress so we'll see whether he has the votes on capitol hill to do that some skepticism has been expressed on capitol hill about this republicans don't necessarily want to bail the president out of a political problem there's democrats, progressives who might not like it as well. so we'll see if there's a coalition on capitol hill to do what the president is going to call for we'll see him later this afternoon talking about it on television guys. back to you. >> let's do the month on this

eamon javers you wipe out the gas tax it saves the average driver $9 a month. the irony here is that for years you had many in politics, mostly on the left but some on the right as well, suggesting we need to raise the national gas tax because it has not been raised since i think 1993. you back out inflation that puts it at a real rate of probably 10 to 11 cents a gallon, not 18 adjusted for inflation so it's always been the political third rail, has it not, don't raise the gas tax, now talking about suspending it, that money for the trust fund has to come from somewhere it won't help with consumer pain but right now it's more about the optics politically we're doing something. >> sure.

yeah, look progressives will say they want gastaxes to be higher because they want people to get off of gasoline and onto more sustainable fuels. so one of the objectives there is to push the taxes as high as they can in order to persuade consumers the end of the gas vehicle is here, time to switch to electric and other things we'll see how that plays out on capitol hill it could be embarrassing for the president if he does not have the votes for this it might give him the ability to point the finger of blame somewhere else, which presidents like to do the other interesting thing, the timing going into september, there's a midterm election in november the president is talking about here raising the tax effectively in september just ahead of the election that might not be popular either so there's potential for political blowback for biden but they're thinking it's better to be seen as doing something

rather than nothing. >> becky, don't just stand there, do something, i mean, listen the president also yesterday, i think you saw going after somebody you know and i know, mike werth the ceo of chevron, putting out a letter saying we're raising production. the president calling him names almost it was an attack on the chevron ceo. >> it was very trumpian. >> to eamon's point if the progressive left said we cannot support this because you're encouraging the consumption of more gasoline. >> to mike werth's point he put out a thoughtful level saying we have increased production, in 2021 they had their highest volume of oil and gas in their 143-year history in the first quarter of 2022 u.s. production was up by about 109,000 barrels per day. so some serious raising on that.

also the refinery input was up to 915,000 barrels a day they're up on refining and talking about increasing capital expenditure for the year so the industry is doing what the president is calling for them to do, which is putting the money back to work at least in the case of chevron they are putting cap x into this, increasing production, refinery but you're talking about a global problem, five refineries shutdown there's issues that go around this and it came from lots of policies that have not been helpful to the oil and gas industry so to brush it off it's not a serious look what the issues are. there's very few things you can do but brushing off the industry and not engaging with them to find ways you could be helpful i think is ridiculous. >> calling somebody names personally calling them

sensitive is a little bit probably counter productive. chevron, whatever you think to them, is at least sticking their head up, saying this is our math, here's what we're doing. we're trying to engage do they want the administration to do stuff that benefits chevron? of course they do. that's what all corporations do. the president has said, on record, we need to end fossil fuels, also suggesting that executives needed to end up in jail i think at the same time yesterday, becky, i don't know if you saw this, when president biden was saying i'm calling on the oil and gas industry to refine more gas and oil, which by the way, the refinery run rates are 94%, not quite 100 but close but end it with also transition to a cleaner future i want the beef -- i'm going to tell the beef industry we're going to be entirely chicken in america in a decade.

i want the beef industry to produce more beef now with the eye we're going to be all chicken. it seems difficult to square the two. but what do we know? >> even worse than that, because you're asking them to put in billions of dollars to increase their production in the short term but not be able to get back any of their investment over the long term if this is the way we're headed there are thoughtful ways to do this, maybe do both at the same time to try to bring on the transition away from fossil fuels while you're doing it but it's tricky, sensitive and requires all the players buying in and sitting down together i don't know if either of you know the answer but the strategic petroleum reserve, the president has set up the release of the strategic petroleum reserve. is there a point we run out of the reserves or it runs too low to continue to do that and does it coincide with

september when this other gas tax would go off too >> no, we should be okay yeah, i was just -- i'll let eamon chime in too but the numbers, don't fact check me on this, we'll end with over 500 million barrels in the spr even after the 160 million barrel a day sale >> my sense is that -- my sense is and i don't have the numbers at my finger tips we are not in danger of running out in the str strategic reserve. that's another thing presidents tap from time to time. presidents like to be seen as taking action they can't be sitting on their hands when consumers are feeling pain so this gas tax holiday, the spr, presidents do these things even though they don't have direct control over gas prices at the pump they get the blame when it goes up, political benefit when it goes down and try to seem like they're in charge when

things are bad for consumers and voters out there that's what's playing out. there's politics in this, and short term politics in this because we have the midterm election coming up in the fall, democrats don't want to be on the back end of this >> i love what becky just did with the questions i know it's early, can i put on my alex trebek hat, rip alex trebek the great one, eamon and becky, riddle me this. do you know when the last american refinery that processed more than 100 million barrels -- excuse me, 100,000 barrels a day, when was the last large american refinery built? >> 1977. >> what year >> 1977 or 6. >> you nailed it >> wow, becky. i'm glad you jumped on that. i was waiting quietly. >> 12 minutes into the show and i'm finished >> no no >> you had the spr numbers at your finger tips i didn't have

that. >> 1977, i was six years old, becky wasn't born yet, eamon was 12 that's a long time ago >> it is >> i was not 12, but fair enough. >> part of the issue is like the permitting that goes around it, it's expensive to do it, a hassle to do it, nobody wants to do these things, as a result we have lost, i believe, about 5% of our refining capabilities in the united states just over the course of the past year. that's an issue. that's why when wti prices come down you don't see gasoline prices come down nearly as much. even when you have wti prices not seen in the past you are seeing high refinery prices and high prices at the pump, that's what consumers feel. >> back in 2018, i don't know if you remember, i was standing in a field next to the philadelphia airport where a refinery caught fire it was the oldest refinery in

america. almost got to a point where 300,000 people had to be evacuated because some of the chemicals came out of that refining is a disgusting, dirty, dangerous business, every couple years something catches fire and blows up i understand why people don't want to build them, they're dangerous in many ways, remember i was standing in front of the philadelphia refinery saying it's not that big but critical for the northeast. it's shutdown, dismantled, lincoln financial field you could see it disassembled there off to your left it was small, guys, but that was the marginal difference on certain types of gasoline and jet fuels and other fuels for the northeast. that's why we're getting whacked more than others in the northeast in many ways that's what happened when it's so tight all right. we got a lot more to do.

eamon javers thank you very much coming up we have a lot more to do on the markets. the stock futures are down big looking to give back most all of tuesday's gains, dow futures down 356, nasdaq down as well. we'll talk about strategy for you after the break. and later on talking to dennis tajer from the american airlines pilot union about surging ticket prices, cancellation and solutions. do we need to rethink the 65-year-old retirement age maybe bring more pilots back we have a lot more to do, you're watching squawk. back after a short break dave doesn't need a posh virtual receptionist, because he cloned himself.

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some stocks to watch this morning, first up shares of la-z-boy, reporting record quarterly sales, results coming in above estimates, shares up about 7.8% watching shares of toyota, it's cutting july global production plan by 50,000 vehicles citing the ongoing semiconductor supply shortages. they expect to produce 800,000 vehicles next month. brian? the market set to give back much of yesterday's gain, futures right now are down siz sizably. seeing dow futures off about 350 points nasdaq not down 2% but not far-off that maybe not give back all the gains yesterday but certainly a lot. joining us now to talk about the longer term strategy is megan

hornman. yesterday felt so good, didn't it, a tuesday off a long weekend, huge gains, everything was up, classic bear market rally bounce, feels like down 30% on the nasdaq from all-time highs what are you advising your clients to do right now and how much more pain do you see happening in the stock markets >> what you had mentioned this earlier in the show, bear markets they're very ugly trying to find the bottom you get a lot of big downturns and then a lot of big days like we saw yesterday as well you have to be patient what we're advising clients to look at over history, if you look at the long term, when you see a 20% decline in the s&p 500, if you can be patient and ride out that volatility, if you enter when we drop 20%, a year later, returns are in the double digits and up 70% of the time,

3, 5, 10 years later, up 90 or 100% of the time with strong returns. so you have to be patient, look at your long term objectives >> i'm going to butcher the stat, megan, forgive me, but there was some stat, you'll know the basic direction i'm going in, which is the reason you stay invested is that if you took out like the best 50 single days in the market over the last 50 years, your returns long term would something be cut in half in other words, you never know when that 4 and 5% up day is coming if you try to time it, you get frustrated, scared, you panic, sell, probably miss those days and as tough as it is watching this thing ride its way down, the sneaky big days, kind of like yesterday, will ultimately help your longer-term returns. >> absolutely. you've got it right there. the point is, in bear markets is you got to look at the long term and you also have to have some

dry powder on the sidelines to take advantage of opportunities. and there will be opportunities. right now we're in a position where there's a lot of price discovery going on, uncertainty about the economic situation, earning situation, but there will be opportunity as we get to the peak pessimism in select areas of the market, sectors that have good fundamentals. the one thing we learned about this bear market is the end of free money, it's over. the free money regime we had over the past decade is over it's back to looking at fundamentals of companies, good cash flow, low debt. margins that can withstand this economic uncertainty as well >> i think part of the hard part megan, i said it last year and at a conference in march, which is one of the biggest risks to this market is if you're under the age of 45 or something, or 50 even, you've never managed money in an environment like this we haven't seen a real

aggressive rate rising environment since 1994, 1995, and we didn't even have the inflation then so there's not a lot of historical models, the bulk of wall street fund managers have in their playbook. this is a new thing, a 30-year new phenomenon. >> absolutely. you have to go back to the '70s and '80s and look at that time period to try to get an idea of what we may see going forward. what we know is that if you look at those parts of the market, those big megatech growth companies that enjoy these decades-long, this free money, that's going to be a very challenging environment to be invested in right now. not to say there's not going to be opportunity in these when we do see that peak pessimism reached but right now i think there's more down side for that. >> more down side. probably the long, hot and cold, i guess, summer.

megan thanks for coming on, appreciate it as always. take care. >> thank you. still to come this morning we have this month's edition of sector nomics. one of the hardest hit parts of the market we'll talk technology stocks next up 2.5% yesterday but it's been a rough year, down 30% almost year-to-date a programming note for you tune in to mad money tonight for jim's interview with meta platform ceo mark zuckerberg in the metaverse. that'somg nit 60 m. eastern time. in' the squeeze. we're having to get creative. find a new way. but birthdays still happen. fridays still call for s'mores. you have to make magic, and you're figuring out how to do that. what you don't have to figure out is where to shop. because while you're getting creative, walmart is doing what we always do. keeping prices low for you every day. so you can save money and live better. ♪

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welcome back to "squawk box," everybody. right now it's time for this month's sector nomics. dominic chu joins us for more on that what sector are we digging into today, dom >> the most important sector out there, arguably. technology, the biggest sector in the s&p 500, the one that has

faced the most head winds in downward pressure. the saying, so goes tech so goes the market because tech is such a big part of it. the white line is technology, the orange line is the s&p 500 in terms of etfs they track closely but the drag on the white line is moving everything else along with it. that's the predominant trade weave been focused on for a long time driving what that trade is as well. according to the data team at y charts, they looked at the year-to-date declines or at least the record high declines through last week's lows on a closing basis, over 1100 points the s&p has lost from a sector perspective, no surprise technology was the biggest drag so the 1100 plus point drop, 350 of that was just technology alone overall communications services, which has many of the big internet

names, 212 point detraction. and consumer discretionary, 209 points those count for the bulk of losses, something to pay attention to as for the individual names, the ones that have been the biggest detractors, apple itself dragged about 83 points off the s&p's decline, microsoft about 73 points, nvidia about 37 points and adobe about 10 so it's technology driving the move keep an eye on tech. if you want to call it that, the most important sector certainly the most heavily weighted. it's a key sector to watch, becky. back to you. >> we saw the bounce yesterday and now there's this discussion about whether the pe ratios have come down far enough they've come down significantly but also went up significantly during covid. >> there's an argument right now, to your point, becky. it's an excellent one. what traders have investors have been jockeying around for a

while and debating. you are seeing the lowest valuations for technology in a sector overall in the s&p 500 that we've seen since kind of the emergence of the pandemic lows in march. for the s&p overall, driven in large part by technology you are paying less money in stock price today for next year's anticipated earnings than you have going back to around april of 2020. that is now stoking the discussion about whether or not the valuations to your point have come in enough. the point being made by the more bearish folks on the streets from a valuation perspective you have never seen those valuation compressions in a time of this inflation, where rates have to rise to counter this inflationary pressure. there's a debate right now about whether or not the models can even, from a precedence standpoint, account for the valuation compression we've seen because we haven't seen this unprecedented central bank

unwind of monetary policy as well as the inflationary picture we're facing so a big debate about whether the valuations are fair at this point. >> dom, thank you. we'll check in with you in a little bit we'll bring you a read on the consumer from target's ceo and the toll the high prices are taking on confidence. let's look at yesterday's s&p 500 winners and losers

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good morning and welcome back to "squawk box. hope you're having a great start to your wednesday, wherever you may be the markets certainly are not. stock futures indicating we'll give back much if not all of what we gained on tuesday, dow futures are down 351 points. nasdaq, they're down the most at

about 1.75%. we are seeing the price of crude oil drop about 5%, probably because the monthly oil contracts are rolling over so there might be some sort of technical selling that is being done on that no fundamental reason why the price of oil should be down about 4.5%, probably likely the contract roll. we'll find out we had news this morning that might actually increase demand for gasoline and that is president biden is going to push congress to temporarily lift the federal gas tax of 18.4 cents. that move will likely face an uphill battle in congress, republicans widely oppose the idea, democrats as well. they have accused the biden administration of trying to undermine the energy industry we'll talk about it with jeffrey currie in the 8:00 hour. in march of this year, becky, nancy pelosi, effectively said the federal gas tax holiday, which was floated by other

democrats was dead on arrival and it was basically show biz -- that was her word and won't benefit the consumer, barack obama called it a gimmick in 2008 so prominent democrats, including the current speaker of the house, has thrown cold water on it. the president set to announce it at 2:00 p.m. eastern but the democrats aren't on board. >> at least some democrats pelosi might get on board when the president is asking her to do this but jason furman the economist who worked previously in the white house, said this is an issue where if you hand this out it's not necessarily going to the consumer's bottom lines he thinks the oil companies could pocket some of it and likely get some progressive democrats who jump on that saying we're not going to do something that doesn't benefit consumers all that much, if at all and could potentially help the oil companies more you could see a coalition building up between republicans in congress along with the

progressive democrats. that's question, will this pass at all i understand eamon javers point they have to look like they're doing something when you have an issue that affects every consumer and voter, i don't know how effective any of this is going to be. >> what about the states the majority of states have a higher gas tax than the federal government, california is 50 or 60 cents california sitting on a budget surplus of $100 billion, gavin newsom's father worked for getty oil. that's an oil family in many ways, the governor of california going back a couple of decades here, they probably understand the oil markets better than we think. maybe there's some federal float or some kind of rebate rather than a tax holiday like a check gavin newsom in california floated. although if you're a tesla

driver, do you get a check if there's a rebate do i get a $400 check if i'm driving a rivian or bolt >> good questions. it's complicated stuff by the way, there are rainy day funds that hopefully we save for a rainy day if a recession comes. we are going to talk about this more later in the program in the meantime i spoke with target's ceo and chairman at the new york economic club yesterday. we talked about the perfect storm impacting businesses like retailers. >> i don't know if we've been in an environment where we've cycled through a pandemic, we have a war in europe, we have 40-year high inflation rates we have fuel prices none of us have ever seen before. i think one of the mistakes we all make is we use this generalized term consumer. we know there is no average consumer in the u.s. and it's going to affect

different economic groups very differently. if you're a lower income consumer right now, and you're filling up your tank once or twice a week to get to work and then trying to feed your family when many food and beverage items have gone up by 15 or 20%, you're looking at a different environment. i don't think we've seen this before >> joining us right now to talk about the impact of inflation and recession fears on consumer confidence is dana peterson, also jan niffen. dana, why don't we start with you. this idea of how consumers are feeling at this point because all the confidence indicators we've seen show that people are feeling the pinch of inflation when it comes to gas prices and food in particular. >> indeed, our own measures of consumer confidence suggest at least in the present situation that they're okay given the fact their working wages are rising but looking to the future,

consumers see trouble ahead. they're very concerned about inflation, expectation measures for inflation is at all time highs. consumers are saying they're pulling back on discretionary spending, also buying cheaper products and buying less gas and also in the face of rising interest rates, they're pulling back or at least waiting in terms of buying the big ticket items like homes and cars that require financing. >> target's ceo brian cornell yesterday talking about how when they look at gas prices and shipping prices, freight and shipping costs, they don't expect, at least at target or anywhere else he has spoken to those prices will normalize, not any time this year, not any time in 2023 either they're baking this in, assuming this is going to be an inflationary pressure that comes for the next year and a half what does that mean for the retailers in general >> it's very tough if you're a retailer you have to predict that and

what the customer is going to do and she turned on a dime in the first quarter. and decided she was going to spend on experiences and stuff you wear, like cosmetics, jewelry, shoes and apparel and that was a problem because the goods coming into the stores weren't the goods. they were the hordable goods all things she was buying back during the pandemic so we had to discount those out but she's still paying top dollar for the things she really wants. so if you're selling better, higher priced, higher end goods, all those people, macy's nordstrom's that sector of the world, dillards, she's still paying for those saying i will pay whatever i have to because i see them scarce. the lower end is doing what you talked about the lower end said i'm pinched on gas, willing to trade down on groceries because that's an option i have, and i will pull

back on some of the other things if you're that level of consumer that is macy's and above, you're still feeling pretty healthy despite the crash in the market and we'll have to have more asset devaluation for that consumer to feel bad current things, yes, i'm worried in the future. but current actions are, i'm still spending >> jen, brian cornell seems to think things are moving along and they have steep discounts for stuff they have too much supply on, big discounts, 20, 30, 40% and it looks like the consumer is responding to that cornell said he's still stocking up on inventory for things like back to school, the holiday season but doing it with caution. and caution may be the big word for all of these retailers quick to move whenever possible and quick to pull back and not order as much stuff if they feel like things are slowing down what does that mean for the holiday season

is it going to be a tighter holiday season when the retailers are going to move so cautiously >> it puts me in the same place, if i were brian or running walmart, i would be tight on what i'm doing because i wound up with too much inventory, i want to clear it this quarter and be in that position again. my consumer is not as high end as the other ones i just named so i'm more worried about that consumer, but i'm also concerned about being able to stay with how fast it all happens. if you happen to be in the category, macy's dillards, et cetera, you're going to have a good holiday because that's where the consumer is. we'll continue to see that be true, that's true for back to school and through holiday sure, selling general merchandise, you have to be cautious and make sure your mix is right i'm optimistic on the upper end. i think we'll see good numbers out of levis, nike, lulu, boot

barn, i mentioned you before but that's because that's where the consumer is and she got there fast and staying there through 2023. >> this plan from the president, the idea to get congress to get rid of the gas tax, at least temporarily through september. would that help? does that boost consumer confidence or not? >> i'm not sure it would it's potentially a very small amount of dollars or change that would be taken off the gas bill. i think there are big concerns among the consumers in terms of whether or not there's a recession. our expectation gauge for consumer confidence has fallen below 80 anything below 80 means consumers think there's a recession around the corner. we just changed our forecast but we expect a mild, brief recession starting at the end of this year and into next year >> you think it's happening right now? >> we don't think the economy is in recession right now yes, we did have the negative to

the first quarter but it was all inventory and trade. some of the trade dynamics were a function of omicron. right now we think consumers are spending we'll see growth probably of around 2% in the second quarter, a little bit of a bounce back but inventories are still going to be a drag simply because of the dynamics of what's going on with the stock piling around the world. >> thank you both. good to see you. >> thank you. >> thank you. all right. we have a lot more to do here on "squawk box. coming up, a shakeup at amazon two of the company's senior executives are leaving details coming up. plus fed chair jay powell testifying in front of the senate banking committee later this morning we'll speak with a member of that committee, senator bill haggerty of tennessee about what he plans to ask chairman powell. we'll be right back, dow futures down 377 stick around the lower your drag coefficient, the more efficient you become.

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welcome back for the executive edge, amazon's top executives leading warehouses and transportation are leaving the company. amazon said alicia baller davis and david boseman decided to explore new opportunities outside of amazon. they were two of the company's two top black executives at the end of last year just 5% of the top leaders were black.

baller davis was a contender for the top job at the consumer business, it was given to john felton yesterday when we come back, red flags in in the housing market. the impact of rising mortgage rates on this sector right after th is hey businesses! you all deserve something epic! so we're giving every business, our best deals on every iphone - including the iphone 13 pro with 5g. that's the one with the amazing camera? yep! every business deserves it... like one's that re-opened! hi, we have an appointment. and every new business that just opened! like aromatherapy rugs! i'll take one in blue please! it's not complicated. at&t is giving new and existing business customers our best deals on every iphone. ♪ ♪

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♪ vo: music can help you express how you're feeling. when you can't find the language, find the lyrics. it's natural that there'd be a little sticker shock, a little bit of a pause, and there'll be some reconciliation. at the end of the day, we have a housing shortage across the country. we'll continue to build homes and adjust price as need be. >> that was lennar's representative speaking yesterday. so where is real estate going

from now joining us is danielle hale. mortgage rates have more than doubled this year, depending on your credit profile, et cetera so people are calling for imcontinent demise of housing. >> our estimates suggest that the cost of buying the median home for sale is up $820, or 65% fromr from a year ago. that is sticker shock. but homeowners are well qualified. >> you know, justin, there's about 85 million millennials, 10 million more than the boomers, some of them are creeping under

40-year-old, dare i say. they want a home they want to get out of brooklyn they want a yard for their kids, but for danielle's point, it's got and lot more expensive can housing remain strong even if prices don't come down? or do prices have to come down nobody buys a house based on the price. they buy it based on the monthly payment. >> there are plenty of reasons to see that there's strength in the housing market despite rising mortgage rates, although existing home sales have come down, year on year, that's still going to be one of the strongest housing markets over the last 15 year, and mortgage rates are still expected to rise and even if we expect that number to come down from there, you're still looking at one of the strongest housing markets. so i still think there's opportunity that remains in the

market >> one more to you, justin the company that you cover, the anywhere real estates, the compasses, the red fins, i mean, they're telling kind of a horror story, at least the stocks are. so something seems disconnected. >> yes, there's a disconnect referring to the high home sale prices, you know, $407,000 represents a significant increase and that's acting as an offset to the slowing existing home sales which we're talking gross transaction value. the question really remains, can home sale prices remain high, and, you know, inventories are still low, and days on market kicked down from 17 to 16. so there is still strong demand, and back of the envelope math would suggest that if home

prices kind of level set where they are and don't grow anymore, which would and far-fetched scenario, existing home sales could fall to 5.2, 5.1, and you're still looking at one of the strongest growth measures ever there's opportunity if can you find companies that are going to gain share there of. >> i do wonder realtors want the house to transact i'll ask you this, danielle. do buyers have any more bargaining power, six months ago it was like no open house, no contingency. don't negotiate. you better come in, just blindly buy the house. do potential buyers watching or listening to the show right now have anymore bargaining power? and we've got to remember, a lot of buyers, believe it or not,

are all cash they don't care about mortgage rates. >> that's a good thing so we're not siegeeing the metrc slow down. we are seeing prices rise. we seeing more homes available for sale, you would expect that to translate to more time on market we just haven't seen it yet. the one measure that is a little buyer friendly right now is increasing shared sellers are offering price cuts on their homes. they are reducing the price from what they originally asked for, but even that number is far below what we saw from a typical number before the pandemic you may still find the bargain, but the market is still competitive. if you have a tight timeline, go in with a strong offer if can you miss out on a couple offers, negotiate. >> just offer to buy it all in

dogecoin thank you very much. appreciate it, becky? >> how many dogecoin would that house cost when we come back, president biden pushing congress for a federal gas tax holiday. we have the details right after this break plus the ceo of roku will join us live. that stock is down 60% but it's gaining slight momentum after announcing a new partnership with walmart "squawk box" will be right back. such a visionary. game plan... you go. no, you go! and call audibles... double our investment in omaha! omaha! omaha! omaha! or you could use workday. omaha. the finance, hr and planning system used by over half of the fortune 500. for a be-agile-like-an-mvp world. workday. for a changing world.

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good morning news out today, president biden will call on congress to enact a gas tax holiday as washington looks to cool gas prices we've got what investors need to watch, straight ahead. and yesterday's market rebound set to fizzle out a little bit this morning. futures point to a lower open. we'll get you up to speed on what's moving as the second hour of "squawk box" begins right now. all right, good morning and welcome, welcome back to "squawk box" here on cnbc, leive from te

nasdaq market site in times square, i am brian sullivan, i am not at the market site. joe and andrew are both off, probably toasting with a mai tai in their hand. somewhere they're skipping doubt beach together joe's driving the corvette andrew's got his hands out of the sunroof. what is that >> "beaches" remember bette midler >> is that a pat conroy novel? "prince of tides." so early i'm trying to imagine the best case scenario with joe and andrew right now they're somewhere off doing whatever they're doing i'm here, i'm anchoring the show, becky. nasdaq futures down just under 2%, indicated to maybe give back maybe not all of what we gained

yesterday but certainly tuesday looking like what a lot of people said it was, which is a bear market rally. looks like we're going to go back down today. hard to say. >> nice work, brian, thank you for that >> you're welcome. breaking news out of washington president biden calls on congress to suspend the national gas tax. not clear how long he would pause, how long a pause he would favor, but most people are saying between now and september. average gasoline prices are still hovering around $5 a gallon wti prices have come off pretty significantly. wti, down by 4.5%, back to $104.53 a barrel, and that is a significant decline from where we've been probably not tied in to this, because this news is something that would be inflationary if you take off the demand for higher prices, more people are likely to drive over the summer.

there is some concern on capitol hill that the move would drain the highway trust fund the president said last year's infrastructure bill can fill that gap on funding. something like $10 billion would need to be put in if this were a gas tax enacted between now and september for this can you see rbob down. there are questions whether this would even pass in congress. republicans are not going to support it they've been pretty vocal about it democrats in the recent past have been very vocal about it with nancy pelosi saying as recently as march, that this something hollywood. there are some that are worried that this will not help the consumer but would just help the oil companies whether they would support it >> republicans probably aren't going to support anything biden

proposes anyway just out of sheer political. but it's not a lot of money, i think for families that are struggling, gas is a great equalizer. it doesn't matter if you're jeff bezos or working minimum wage, you're probably going to pay the same amount for gasoline they're the most aggressive form of tax or inflation. even democrats, barack obama has said in the past it was a gimmick in 2008. nancy pelosi on march 3 131st called it showbiz. >> we have to pay for that to

return it. >> i don't want to read between the lines, but that to me doesn't sound like a lot of support from the house speaker about what the sprezpresident is going to propose >> gas prices have gone up, sitting around $5 a gacllon the president is not only calling for a drop of the federal gas tax of 18.4 cents. but if it's only for three months, and only until september

it means you would be raising taxes again just about the time you're looking toward midterm elections. >> i'll do my best john ford impression on the other hand. the oil and gas companies, despite the fact that there's this chevron versus biden. biden called the ceo of chevron, what did he call him "sensitive" yesterday snoiis oil companies are not at record profits right now. highest ever quarterly profits came in 2011 or 2012 when president biden was then vice president joseph r. biden. the administration says things like record margins. if you're going to talk about record spreads in refining margins, but as far as record profits, that is not the case.

there are not record profits yet. they may get there the oil and gas companies had some of their best year in 2011 and 2012 under then vice president biden and now, yes, they are making a lot of money, not record amounts, but they are making a lot of money now. in some ways you could argue there hudshould be a little mor love between the two groups. >> chevron's were up but they pointed out their refinery is up significantly in this quarter their production of oil and gas is up significantly. last year was a record for the volumes of gas and oil that they produced and they're also talking about how capex, their capital expenditures are up pretty significantly, too, up 50% this year over last year of up more than 50%, actually, to more than

$18 billion. so they are doing their part to make sure they're doing more that's what higher prices bring. we'll see what happens with the rest of this >> i think what you're going to see, becky -- i know we've got to go -- but i think what you're going to see is more people pulling a harold ham private companies don't have to re reveal how much they're making i think you'lly see a lot more f these public companies go private. >> the stocks are down 3% or more but joining us is stephanie link, chief investment strategist at hightower and a cnbc contributor what do you think of this move in imove i don't know if this move in particular, the gas tax will

have much impact on these oil stocks >> i don't think it's going have much impact at all it's a proposal. it's temporary, very much like the strategic petroleum reserve release. tan and it seems like a three-month situation. this tax i for road construction so there's another issue they have to deal with. and refine risries areright nowt 90% capacity we're not building any more refineries there's a lot of hurdles here. most importantly is the energy sector it's changed, right? their strategy has changed m they're more focussed on esg and shareholder-investor returns yesterday they just increased

their payout ratio to 75% of free cash flow going to shareholders from 50% and they increased the dividend again so these companies have a mind-set of shearhair holder ren it's kind of a volatile situation. people are wondering about demand destruction and the fed and all these other things so in my mind, i think you want to stay patient on this sector and look for opportunities, because you are going to see positive earnings revisions and more hshareholder returns. >> even if this announcement doesn't have any impact on these companies, what about the rhetoric in the president focussing on chevron's net worth yesterday. you've had a lot of back and forth and commentary about how there should be a wind fall profits tax. does that have an impact sn

especially in a week when a lot of these oil company heads are going to be heading to washington to meet with the president. is there any rhetorical risk >> i think it's noise. that's not ever good for any sector so i think it's simply noise i think these stocks are trading at very reasonable valuations. and oh, by the way, like for example. chevron, they have been increasing production, right if you look at their permian aspects, they expect permian to grow 10% this year it's not like they're not doing anything the enp companies are a little different. they're not changing their production they're not changing what they've been doing in terms of growing, the production m, theyr

staying flat it's not in their dna at this point in time, give than the last three to four years they've had this new story to tell skbr >> i want to jump in just crossing moments ago, chesapeake company doubling its stock buyback program from 1 billion to $2 billion. is this at a free cash flow, right, which could be outside of operating expenses so this doesn't necessarily have to mean the companies aren't going to drill or spend more for capital spending, does it? >> no. >> they have more money than they can use to spend. they can't grow fast enough. they've got to do something with the excess cash. this doesn't necessarily mean they're saying forget it, we're not going to drill more, does it >> no, not at all. that's ye

that's why i mentioned chevron and permian growing. the enp companies are minting money. the entiret industry is minting money. before the war, oil was at $80 a barrel because of all these things, because of all these changes that are happening from the energy companies and their strategy so they hare printing money and are trying to return it to shareholders which is the right thing to do. you sure are going to see better earnings from the energy companies. >> stephanie, thank you. >> always love your insight. thank you, appreciate it all right, there you go. chesapeake and diamondback on

the tape let's get more with dom chu and some of the other market movers. dom, what's moving in. >> yesterday during that massive rally you spent time with stephanie link they were among the biggest gainers in the s&p 500 during yesterday's rally. some of these names are also keeping, we're keeping a close eye on them, because they were among the s&p 500's biggest gainers yesterday. we're still talking about that roll volatility narrative the single biggest gainer in the s&p 500 in yesterday's session, you put united health on the health care side of things, just about fractionally higher right now in trading so far today and blackrock and borg-warner. these are some of the biggest earners outside of oil and gas

also watching that technology trade as becky mentioned during the last hour of squawk. applied, they were some of the biggest tech-associated type names yesterday's session. and we're seeing more declines so the semi-conductors will be a key focus there as well. watch what's happening with some other parts of the market. that's mega cap technology i mentioned tesla before, also nvidia check out what's happening with apple and microsoft. alphabet's down about 2% amazon and meta platforms down as well. some of the bigger gainers, brian, i'll send it back to you. coming up, the ceo of roku, live, from the biggest advertising conference of the year anthony wood will join us after

the break. before we go, though, let's get a check on the macro markets dom gave you aoo lk at some of the movers nasdaq off 1.5%. we're back right after this. i may be close to retirement, but i'm as busy as ever. and thanks to voya, i'm confident about my future. voya provides guidance for the right investments. they make me feel like i've got it all under control. [crowd cheers] voya. be confident to and through retirement. this is ashley. she's a posh virtual receptionist. she'll make sure you never miss a call or an opportunity to grow your business. you can't be in two places at once, let posh answer.

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welcome back to "squawk box. i'm diana olick. mortgage rates not only surged to the highest level since 2008

but made the biggest jump last week it rose 8% applications were, however, 10% lower than the same week one year ago. this is the average rate for the week jumped 33 basis points to 5.98%. other indicators have it over 6% it started the year at 3%. there's more supply on the market now up 17% from a year ago buyers are also stretching to afford what's listed by opting for adjustable rate loans. for the last several years it's been a 3% share because rates were so low.

appli applications fell. the number of borrower ws who c benefit from a refy now is pretty limited julia boorstin joins us with a very special interview >> reporter: i'm joined now by anthony wood, the ceo of roku. thanks so much for talking to us here at cannes, and i want to t start off with your big picture on advertising growth. how much is it going to be hampered in. >> our ad business has been growing like gang busters. for us, generally, all tell vision is going to be streamed

most tv advertising dollars, i think it's about 18%, even though about half of viewing now on streaming in the ad business, the big factor is how fast are those ad dollars going to move from traditional tv to streaming. and with the economy, it's causing marketers to think harder about how they spend their money. treat stream s streaming is a very efficient way to pend their money. >> what does netflix' business supported by ads mean to you in. you? >> most of television is ad supported. but ads are always a big part of the funding mechanism.

ads are great for consumers because they bring down the cost of streaming >> but specifically, are gug to be partnering with netflix have you had anydiscussions with them. >> we're here talking about advertising, because obviously we have a big ad business. in terms of netflix, obviously, i can't comment on rumors. we've had a great relationship we're great partnership with a lot of other streaming content companies, whether it's disney or hu hulu. our business is bringing together content and viewers and providing tools for all of them to find each other >> disney working to launch lower costs, disney plus with ads, is that going to put more competition to your free roku

channel in channel? or will they have to market more >> we're the number one streaming company. a big part of our platform is tools for marketers and content owners we have a large data platform. there's lots of ways we can help our partners the biggest impedestrianment are the dollars still in tv. people are used to spending dollars that way half of all viewing is now streaming. 18% of all ad dollars are in streaming, the rest is in linear anything that makes advertising more main tstream is good for te industry >> i'd be remiss if i didn't mention that roku shares were

down 78% over the year your message to investors. >> lots of growth. the way i think about it, don't short-term cycles allow us to lose sight of the big picture, which is the whole world is moving to streaming. there's a lot of growth ahead of us that's what we're focussed on, maintaining our position as the leader in streaming and growing around the world >> we're unfortunately out of time we have so much more to talk about, and we hope you will come back very soon back over to you >> and we can stream on the cnbc app. coming up, the downturn in the economy and rising interest rates impacting college savings.

sharon epperson will join us after the break and what's happening with all these 5.9 plans. time for today's aflac trivia question. according to forbes, who is the according to forbes, who is the richest woman inout to suffer >> tra ill help cover his unexpected medical bills. aflac! maybe you could use the money to buy a step stool. i have a step stool. so why are you climbing a shelf? the stool's on top of the shelf, isn't it paul... (shelf crashing) yeah... ♪ ♪ aflac!

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. now the answer to today's aflac trivia question. according to forbes, who is the richest woman in america the answer, alice walton, the daughter of sam walton has a net worth of $67.9 billion well, you know, if you have a savings plan, you know how the market volatility has eaten into your savings at this point could you could be looking at much lower balances are there alternatives you might want to consider sharon epperson joins us with the answer to some of those very important questions. >> parents may be stunned by

dl college savings collide. the average balance is now about $21,000, according to iss market tlec intelligence age-based portfolios have also lost significant value and they're designed to shift to more conservative assets from stocks to bonds as college approaches >> right now there's really no place to hide, and that means not ooeven in bonds. we looked at long-term bonds, and they're down 20% short-term bonds are down as well >> but series i savings bonds could be an alternative. you can buy up to $10,000 a year although you can't cash them in for 12 months, some financial advisers say i-bonds are a great option >> because it's making so much interest, and it's guaranteed by the federal government, that is

one of our best investments right now. >> still, some families may end up borrowing for tuition or borrowing more loans can be added at any time, minus any other financial aid received parents may be in for another shock. the rate on plus loans will jump from almost 6.3% to 7.5% on july 1st. and then that rate sfis dpfixed the life of the loan >> you can buy an additional $5,000 of paper bonds if you have additional money you'd be getting back from the federal government th that is a great bargain. >> and if you qualify by income,

becky, that interest, when you use it for higher education, you don't have to pay taxes on it. you could potentially get a tax break, too, using it for higher education. >> excellent tips. can you go to cnbc.com still to come, j. powell talking to a committee we'll be talking to a member of that committee, senator bill haggerty right now as we head to break, let's get a quick check ever the market red arrows across the board. the dow of down 3 hu00 and the nasdaq down by 153 after oss as up by 270 at yesterday' cle. stay tuned you're watching "squawk box," you're watching "squawk box," and this skrn become

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you don't want to miss the premiere of a new documentary on cnbc tonight, called "exxonmobil at the crossroads.

it's going to cover whether they're ready for the transition david, you really got on the road for this. got out there and did some exploration. what did you find? from >> yeah, becky, it's a company you though well, and a company i did not know well. exxonmobil has largely been a closed company, right up from john d. rockefeller to rex tillerson. we were very lucky to get an opportunity to get inside exxonmobil w and we hope people will join us at 8:00 p.m. for the side and t scope of this company. the very surprising win for engine one

a small hedge fund that went after four board seats and took away three, this only a few months after exxon had already given two seats to another investor in d.e. shaw. the index funds that have the esg patina went with engine one during the course of this documentary, in sitting down with jeffery oven, of not from the engine one slate, i did ask him whether or not there had been change as a result of the change on the board. >> the fact that exxon is net zero, comfortable, that's one year change. that's fascinating, right in. >> roughly one year ago you ros that proxy fight

what if anything did you learn in terms of transparency, the way you communicate with h shareholders >> i think you've touched on two important ones from all these challenges, it's important that we're responding. why did we get the votes against us we've become much more trance parent >> and becky, i like to think that we're the beneficiary of that, of course, you know the company quite well that is correct cwell, that they would have allowed us to go where we did >> this is every consumer's concern at this point. what's happening with the energy companies, what happens when it costs me $120 to fill up my kwar

gasoline in doughha, they are looking ath global oil supply being very tight for the next three to five years. high energy prices no quick transition to get off of fossil fuels, and probably not a whole rolot of relief at e pump at least for the foreseeable future >> there's no button you can push to turn on production as you well know and brian knows. and refining capacity is a huge issue. this back and forth putting a focus on what we've lost in ref refining capacity and what we're unlikely to get back when you build them you have to build them with the focus of the return you're going to get back

over many, many years. at some point, there's going to be a lot less gasoline sold in the world because so many people are going to be using electric cars that goes into the thinking of building a new refinery. >> we haven't seen a new refinery built since 1977 in this country and there are a whole lot of incentives for someone to build one right now. of course there's whole "not in my back yard." >> make sure you tune in tonight, folks, the premiere of "exxonmobil at the crossroads. david's got pieces he will be running through the day as well. "squawk box" will be right back.

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fed chairman j. powell showing up for testimony in the that the banking committee joining us is nattesenator bill haggerty what would be your first question to j. powell in. >> i think chairman powell is facing a very difficult set of circumstances right now. he's got to thread the needle. i was asking chair powell more than a year ago to again the process of unwinding the balance

sheets i want to know how that's going, thousa now that they've finally gotten&gotten around to doing it a year later. i'm interested to hear the tools that he's going to use and how he's going to deploy them and the physical challenges by this administration, particularly on the war on oil and gas >> was the fed in was it congress, was it joe manchin's plan some of the stimulus was just not needed >> i think joe manchin is correct. the stimulus came, the most recent in march of 2021, cape at came a

a time when the economy was already heating up it was like throwing fuel on the fire the deeper thing is the policies that the biden administration has put in place that have essentially waged war on the gas and oil economy. it's had a re devastating impact on inflation here america. because every bit of it has to be transported you think of what happens with diesel fuel. everybody in my home state of tennessee has to drive to work everybody's looking at the pain at the pump, whether it's the tourism industry people have to fly in with much more expensive jet fuel or drive. it's extraordinarily painful right now. >> let's be fair, senator, that this is not a u.s. phenomenon. it's 10 dollars gallon in parts of europe. japan, it is a global phenomenon i know we want to focus back on the states, but i want to be

fair in the broader perspective. but with that said, a federal gas tax holiday, it was estimated it could save $16, not per tank in total $16, the suspension of the gas tax holiday. is there any magic button that the president can push to fix t this >> to be fair, we were energy independent. we were at a point where we were exporting. this is a political gimmick. even barack obama described a play likes that a political gimmick designed for the midterm elections. it's not going to have a long-testimony impact.

>> nancy pelosi, you might have heard her, the house speaker called it showbiz. and basically implied to your point it was a political stunt w what can we do in do we just have to eat it? >> the smaller refineries, retroactive penalties were imposed on those small refineries changing the bliending rules we need to send a strong message that the biden administration's not going to attack any profit they're going to deny a return on that investment we need to get back to the clear

and strong message that oil and gas production is going to be supported. i'm not against alternate energy we have a lot of innovations taking place here, but we should not be killing oil and gas in the meantime >> we're going to need avenue devery drop, sun ray that we can get. when we come back, overscheduling and underdelivering. flight cancellations have piled up because of staffing shortage, including pilots we'll talk about how we got here and what can be done to fix this problem. make sure to tune into mad money tonight. jim cramer has a huge guest. he's going to be sitting down with mark zuckerberg in the metaverse.

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flights to three cities. and the pilots association represents 15,000 professional pilots dennis, we've talked in the past about some of the issues, but it seem that things have continued to get worse what what's the problem >> it's a failure to plan. i was on this program during the pandemic the rinvestment was made biy th u.s. government, the american taxpay taxpayer are to payroll support. and their backlog in training is epic here's the real problem. they're trying to fly airplanes without the pilots available they are pilot pushing, and they are narrowing the march qgin of

safety it' it's re serious issue. >> you have to have so much down time >> the length of my day was already built at about 12 hours tlaechlt that left me a hour. they just did not have a plan. now we see them trying to cut corners in training. guatemala city, which is a high-terrain, difficult airport, they used to have a trained

instructor go on our first flight now they're saying look at this ipad course and ail byou'll be d to go. i think boeing learned that's not the way to train pilots. >> we understand what the industry went through, basically shut down for a year my question is this. why did the airlines keep booking flights then that they're not sure they can fill i understand, the pilot's too tired, don't get on the plane. what people are pissed off about, i'm sorry, angry about, they're buying tickets why did the airlines sell this flight when they're not sure they can get staff that's just weird. >> that's not weird. it's just wrong. we're equally as angered this is not the way to run a business they looked at the demand and decided here's where the money is, let's go get it, and they never had a plan to fulfill

that they left it on our plate. the u.s. government, that books travel for our military member the and federal employees has said do not book american airlines because of the cancellation rate and the inability to rebook your flights. that's stunning. the federal government is saying don't book on american airlines. they sold tickets that they knew they were not going to be able to fulfill this summer today we have 82 of the 84 nights flights that have cancel rded ae all because they could not connect the pilot to the airplane that's selling something you don't have >> what have the airline executives said in response to this what are the potential solutions they have floated? besides let's skimp on your training >> they've told us they've got a plan, and we get to these

events in the month of june, american has impacted over 600,000 passengers with over 5,000 flights canceled and this is not just mother nature it's their inability to recover, because they cannot connect the pilot to the airplane. they have underutilization failure to train the pilot after billions of dollars were invested in them this has got to stop this is the second summer of watching this happen and nothing happens except the same results the words have changed the results are the same >> do we need to rethink, dennis, the 65-year-old age limit? the leaders of our nation are in their mid to late 70s. why do we have this 65-year-old pilot retirement thing i know a lot of 66-year-olds that can outrun me >> you're not running when you're sitting on the flight deck the european faa has recommended

mo ch no change to that. so we have real concerns over cognitive abilities as well as the fact that a pilot in the u.s. would only be allowed to fly domestically in the u.s. the a extra training at a time when the training is very tight, to retrain pilots to come down to a 737, the one i fly and fly only domestically is not a solution scott kirby seems to be getting it done, said on your program with phil lebeau that they're against that change. their age 64 pilots, 36% of them are not able to fly because of stringent medical requirements these ideas about lowering the experience level as well of pilots, the public pitched that. t they are not coming in as good

ideas. nobody mentioned this during the pandemic or prior. so you fail to plan. you misuse the money and here we are, second summer in a row. >> how concerned do american flyers need to be about their safety >> they need to be concerned, because i'm on tv as a representative for our union saying there's a problem here. but they can exhale because we're going to be that gatekeeper of safety i don't fly the airplane unless i'm fit to fly the airplane's ready to go but the fact that you're pushing us and pushing us, hathis is no safety culture the faa should look at this. they ought to come in and look at them trying to fly more airplanes than they can actually fly and building these schedules to an inhumane level and ultimately letting down our passengers and squaun considering our investors' money. it's got to stop >> those pretty strong words we are reaching out right now to american airlines for comment on these comments, but we

appreciate your time today dennis tasier from the airline pilots union "squawk box" will be right back after a quick break. (vo) while you may not be closing on a business deal while taking your mother and daughter on a once-in-a-lifetime adventure — your life is just as unique. your raymond james financial advisor gets to know you, your dreams, and the way you care for those you love. so you can live your life.

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feels like one step forward, two steps back, and we are back

to the selling futures pointing to another market drop. apparently, the rebound was only for a day. meantime, oil prices are also down likely a contract rollover the r reason and president biden calls for a suspension of the federal gas tax. and one of wall street's biggest banks give a recession even odds. and the coca-cola board member who has her finger on the pulse. "squawk box" begins right now. good morning, everybody. welcome back to "squawk box" here on cnbc, live from the nasdaq market site in times square i'm becky quick along with brian sullivan joe and andrew are both off

today. we've been watching the futures this hour. dow futures are off by 363 points remember the dow was up by more than 600 points yesterday. s&p futures are down by 51, the nasdaq down by 175 treasury market, yields are looking pretty tame. this is the one market that has continued to watch the yields drop at least. ten-year, 3.209% crypto currencies are also a little lower this morning. this comes after some rebound bouncing off the lows seen over the weekend. on the weekend, bitcoin fell below 18,000 and new this morning, president biden calls on congress to sem

pr temporarily suspend the gas tax. >> the biden plan is to suspend the gas tax through the summer it applies to the gas tax and tax on diesel fuel for three months so up until september. the sum mer driving season he's also going to suggest that states provide similar ways to provide relief for consumers and for industry to put profits to work the white house says these guys are making a lot of money and they should not swallow the profits. he's calling on retailers to promptly lower their prices. it's a 18.4 cent tax that's a hefty cost there for long haul truck drivers and other whose use diesel calls for no effect on the

highway fund because of the massive tax revenues coming in, in effect a surplus, they can shift some of that money around and not impact the highway tax fund because the gas tax money goes into the highway fund, providing all sorts of infrastructure spending if you put that on holiday over the summer, the big question is, how are you going to fill all those potholes the biden administration says we can move some money around and make that work politically, that sets up an interesting question, which is does the president have the votes to get done in congress. he's calling on people to do this because he doesn't have the power to do this himself he's calling on industry to do other things he can't do any of those things himself. so he's going to need votes on capitol hill not at all clear that he's going have those we expect him to make his pitch to capitol hill and see what they do with it there. >> you're right. it's something he can't do

himself. but generally, you would put feelers out, find out if you have the votes before you make a stance like this, unless you think by doing this you're going to put additional pressure on other congressional members to go ahead and vote with you, because it's something the public might hiklike to hear >> or if you calculate that it's pressure on members by the president coming out and saying he want it is, that puts pressure on some biden loyalists, fewer and fewer of those as the president's term goes along becauseas his popula goes down. his historically, presidents get the blame. if this fails on capitol hill, he can say look, i told congress to do it and so much the better for biden

who can say it's the republicans' fault >> which is kind of sad, because it should just be an exercise in supply and demand. it shouldn't take milton friedman to figure it out. chuck schumer stood in front of a gas station a couple years ago and blamed trump for the high prices of gas. this political brlamesmanship goes both ways this april scenarios were run on how much consumers would save on the suspension of the federal gas tax. in a variety of different snaer y yoes, they came up to $16. i doesn'n't mean a tank. i mean in total. that's it.

>> if you're the president, you have to do something, right? this is real pain for consumers. we're in the summer driving season people are noticing these prices it's up there on signs everywhere you drive so the president is in a position where politically he has to take action there's not a whole lot of action for him to take this is one of the levers he can pull on to demonstrate that he feels the pain and he's doing something. what else is there for a president to do? >> thank you, we'll be talking about this later in the hour and whether or not this is going to be effective. we'll do that with jeff currie let's get to dominick chu. he is taking a look at some of this morning's biggest premarket movers i'm not creskin, but i've been

called that. >> there are some earnings reports that are providing some of those positive cat lealysts the premarket trade. winnebago shares are up. this is after the rv maker reported quarterly revenues that topped estimates they soared to a record high, and winnebago was able to offset some of the input costs through price increases which in turn needs to improve its profit margins. investors seem to like the story even though it's lost 30% over the last year. this is korn ferry just a little over 2,000 shares of premarket volume. it reported quarterly profits that beat estimates. korn ferry was helped by a 30%

jump in their fee income all that on balance. even though it's down 23% over the last year, it's still up 2% in the premarket some of these stocks down along side the rest of the market, airbnb, 3% down side, roughly 30,000 sheares of volume they think the post-pandemic surge in travel that we're all witnessing right now is priced into the stock even though it's lost a third of its value over the last year. and here's a bonus look at a small cap stock that's been on rollercoaster recent lly cosmetics maker revlon is up after it filed for bankruptcy protection last week as you might suspect, a lot of it is leading to buying and selling that stock as investors

look to unwoind long or short posi position at the lows, it was 1.08 already 8 million shares traded. i'll send it back to you >> be careful out there, folks dom chu, thank you futures are pointing to an open day slide after yesterday's rally. the s&p 500 is now tracking for its worst first half of the year since 1970 that could be a rbi. joining us is chief u.s. equities strategist. how about that, jonathan worst first half of the year since 1970 one year before i was born i guess if we want to be optimistic, and why not, it's early. the more we go down, is it more

likely we're closer to a bottom in. >> you know, probably. but the really big story this year is the earnings outlook which nobody's talking about is up between 7.5% and 8% and what you've had is this massive correction in stock multiples from something like 21.5 to 15.5, making stocks much more reasonable in value and even within the market, we started the year where this was a group of ridiculously expensive companies with high sales growth that were more speculative, and it's the speculative names. listen, everything's been down but the more speculative stuff is down most and that's really good news, because it means the likelihood of a 1999-style blowup is probably much less >> you know, okay, so let's say, bill dudley, writing an op ed that a recession is inevitable

his words in an op ed piece. let's say we agree with dudley the economy will go into a recession in the next year, year and a half does that mean google or apple should lose a third of their revenue? could it be wiped out by a third because of an economic slowdown in. >> i think bill dudley in writing that misses the very important part, which is whchlt if you think that we have a recession that's going to happen in the next nine to 12 months, it's really simple i don't think we're going to have a recession in the next six to 12 months are we going have a recession? yes. will the fed in raising interest rates and this inflation problem ultimately be the cat lesalyst

behind that recession? almost definitely. i think the market's attractively valued. if you look at the worse position, it's before recession. you're almost obligated to buy stocks, especially if the earnings are holding up. these are analysts, they're not rolling over they're not going down they continue to drift higher, and everybody talks about, well, are they going, look, they might. but we're not seeing signs do i agree with bill dudley in 100% there's a recession in our future the question is when, bill if can you tell me when, i can tell you what to do with stocks. >> there you go. good debate, jonathan. we'll continue it another day on

another channel. still to come this morning, how far would a pause in the federal gas tax go toward ease americans' pain at the pump. plus, a special market interview with mel lagomasino. we'll ask her about the con consumer, inflation and how changing demand could affect some of the biggest companies. you're watching jaux "squawk box" "squawk box" "squawk box" ♪ ♪ ♪ ♪

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all right, welcome back to "squawk box," everybody. futures right now are solidly in the red. nasdaq futures off 1.6%, becky so it looks like again it is going to be tech stocks that bear the brunt of the selling, one day after we felt so good on tuesday. everything rallied well, here we are on wednesday different day, different market. >> like the weather, if you don't like the direction, just wait in a new note, the bank sees a 50% chance of recession thanks

to softening in consumer demand, this happens as the central banks ramp up the fight against inflation and raise rates. citi sites a fall in consumer shipping in china. earlier this week, fellow bank goldman sachs upped its recession prediction to 30% from 15 u.s. trade damian williams said facebook has in the past violated the fatir housing act meantime, meta, along with microsoft and other tech jgiants forming a group to work on metaverse best practices, they

include gaming companies and chip makers, but noticeably, it does not include apple speaking of meta, i remind you to tune into mad money jim does an interview with ceo mark zuckerberg, and i believe it's in the metaverse. like i think they do the interview like "ready player one" style in the metaverse or the suker verse, whatever you want to call it. really kuhl. >> the big question, what will they be wearing? >> goggles and what else buy now/pay later has come to airline tickets is this a fad thanks to skyrocke skyrocketing prices or a long-testimony friend. phil lebeau will break it down when "squawk box" returns. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire

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they need to be concerned, because i'm on tv as a representative for our union saying there's a problem here but they can exhale, because we are going to be that gatekeeper of safety. i don't fly the airplane unless i'm fit to fly and the airplane's ready to go >> that was captain dennis tasier, a pilot for american airlines and spokesman for the pilots union phil lebeau joins us with more about that, the concerns, how

worried people should be what we've been seeing with cancellations and also a new trend in airfare purchases these were pretty tough words from dennis tasier, and you're right. they're in the middle of negotiation. but there are a lot of kearns oconcerns out there. southwest, delta, american, all had somewhere between 30 and 35% of their flights canceled this weekend. >> it's industry wide, becky and when you listen to dennis tajer, the overall issue, there's a shortage of pilots, and that lack of pilots means that there's not enough people who can train the pilots who are moving up. you strip out about 11,000, 12,000 pilots who took early

buyouts during the pandemic. that means everybody else has to move up the system, which means they have to be certified, trained, whether it means moving into a new aircraft or part of their regular training and there's just not that ability. that didn't happen during the pandemic that is industrywide that is not just american airlines that is happening aveverywhere whether it nasa n's in new york florida, you have no slack in the system at all. all of those are contributing to the issues out there for the airline industry it's not just american that's not saying dennis tajer doesn't have good points, it is saying there are issues industrywide let's be clear about that. >> one other great question that brian asked, though, how can they continue to sell tickets on flights that they clear are not equipped to staff? it happened last summer,

happening this summer. if you're somebody flying this summer, you probably have pretty good keconcerns about whether yu flight is going to take off at all or on time >> they have stripped-down from earlier this year. we compared where they were, this summer schedule compared to where it was set in january is down 17% so the airlines know that they have a problem in terms of staffing and making sure they have the right crews in the right place to complete these flights. the problem is they haven't brought it down fast enough. and the question becomes, what do we see for the fourth of july, what do we see for labor day. and whether the fed gets more involved maybe there has to be other solutions. there's a number of options that

are out there for the d.o.t. but you can imagine they're watching pretty closely. >> we've been pretty tough on the airlines today, deservedly so but is it only them? i don't fly as much as you, but i've been at newark airport where there are lines that used to be open that are now closed there are shortages of air traffic controllers, which is terrifying >> he's absolutely right he's not whispering anything that nobody knows. they don't have as many air traffic controllers as they would like to have there are people who said i'm done, i'm retiring, or i'm quitting i'm not doing this job anymore or that staffing is just not to the level they would like it to be and that comes home to roost in high-traffic areas like florida where the airlines have scheduled a lot more flights

than they have before the pandemic, which is understandable, more people are going down there another area where the congestion and number of flights, they need -- >> stop selling the darn tickets. don't sell the freakin' tickets! >> brian, areyou are 100% right but are you acting like they can snap their fingers they are gaming out the system as to how they think the staffing will be three, five, six months from now. they have to sell the tickets, otherwise they're leaving revenue on the table i'm not defending the airlines this is being poorly handled in terms of scheduling right now and staffing and it's industrywide. it is not pspecific to any one carrier. >> it's not just the airline industry it's so many industries, where

the consumer's headed next, what the consumer wants it's like nothing we've ever lived through. we should point out that what you are seeing right now are some different trends in airline purchases, in airline ticket purchases. what's been going on >> let me quickly talk about this i think this is an interesting trend. we all know how expensive airline tickets have become. i thit average fare according to hopper, $390 the average cheapest fare is $201 domestically, according to, excuse me, aaa, and that's an increase of 14% compared to last year now we're starting to see buy now-pay later options becoming p more popular uplift financing, which works with the arirlines, in terms of

when you buy your ticket, you can get the option to spread out the payments it's becoming much more affordable here's chief commercial operator >> when i look at where we're going, there's, this has become for airlines in particular, not a nice to have but a need to have, right? this is how people increasingly want to pay. and they're showing it in how they're actually booking >> as you take a look at the airline stocks, keep in mind that when you have the average airfare right now at $390. let's say you're going with your wife somewhere you're getting fees tacked on. the $3,000, $9,000 range now you have people saying if i'm spending $15,000 to take the

family on a trip, i'm going to spread those payments out over several months it's an understandable option. >> i will gladly pay you tuesday for a hamburger today. >> i'll pay you tuesday becky, for a hamburger as long as you promise me there's going to be a hamburger, and the airlines right now are not serving up the hamburger. >> i think there is the risk of a backlash a lot of industries are going through this if you get worried about it, you're going to change your travel, the next teime around yu may pick a place you can drive to, you may say forget it. we're going to do things a little differently this is a confidence issue that if you don't have the confidence, people won't book, and they're going to catch up. >> i drove to michigan on thursday anything under nine hours,

whatever, i'm driving it forget about it. >> i've always felt that way >> i like driving anyway goldman sachs' jeff currie will join us next. stick around

all right, welcome and welcome back to "squawk box" right here hon cnbc. nasdaq futures down nearly 2%. pretty much going to give back everything we gained yesterday on that nice pop but of course yesterday was yesterday. may not turn out to mean very much since the bear market began in january the s&p 500 has risen more than 2% on ten other occasions. only to give up that gain and trade lower. a reminder that even in bad long are term takes, becomy, we can get big single day moves that's one to grow on. >> let's get back to our top story of the morning

president biden will call on congress to temporarily suspend the 18.4 cents a gallon federal gas tax. biden also wants states to pause their own gas taxes. joining us is jeff currie. is this a good idea? what will it mean for gas prices longer term? >> it's not the best idea. it's bullish energy prices, because it's reducing the price to the consumer and the law of demand says they're going to consume more if you take down the price. but, you know, i'm kind of surprised that, you know, the market is selling off as much as it is. but when you look at gasoline prices, and what's happening to the products, the cracks are at an all-time high this morning. i think that distinction is important. because when you look at energy prices all together, crude has not been a good proxy for what energy's doing

year-to-date, commodities are up 47%. so while everything else in your portfolio's down, a balanced portfolio's down 14%, commodities are the best place to hide. one other point i want to emphasize. the only thing on your screen that is up year-to-date are carb carbon-based commodities the only thing separating the hydrocarbon is oxygen. just think about that. >> excellent point jeff, talk me through this, though why is wti down by 5.5% today that's a pretty significant move i don't think it's related to the gas tax. is this kearnconcerns about a

recession? >> i would chalk it up to two things one is obviously recession fears hitting every single asset class out there, but also i think the other point, too is let's look at what refining margins are doing today. they're going to all-time high that's why the spread is getting to such levels crude is not a good proxy for what the rest of the energy complex is doing so when we think about if it disconnects, which it's driven by technicals. it becomes kind of like an internal transfer price. you're seeing right now today on that 50-day moving average, we went from last week to one moving average to the next moving average, which i think, you know, is an indication, it's not really being driven by fundamentals but by other factors. fundamentally, what's happening, it's reflecting what's really

going on. >> it appeals to becky, today's the first day of the new monthly futures contract i wonder if this is some technical positioning because the contract fired last night and maybe it is rolling over we've seen moves like this of about. we've looked at data about russian oil flows, and i'd like to know what goldman thinks, because we're going to do a segment tomorrow russian oil prediction and sea born exports are at prewar levels the sanctions may have cut off russian oil interest the united stat from the united states and part ofeur europe, bt india is buying as much as it can. >> you just had a refinery blow up, bombed in russia

>> got blown up. >> that the products are, you know, the product prices is where the shortage is. what's going on? just as you point out, harkes we're having a big down day in wti. we just went to the all-time biggest cracks it is much more of a production story. the administration is aware of this which is why it is targeting the products as opposed to the crude you listen to opec this is an oil refining and product problem as opposed to a crude oil problem. >> let me ask you. refining, how much are we down in terms of our refining capacity in the united states, and why is that? what are the reasons >> you know, down about 1.2 million barrels per day.

globally, if you go back a month ago, we were close are to four globally some of that's due to temporary maintenance that can be brought back on. the reason we're still bullish on crude oil, the u.s. was retired for many different reasons. one of the biggest reasons was around environmental policy. companies, to be able to say hey, i'm not involved in petroleum anymore. i'm purely a chemical company or something like that can shutter a refinery and boost their multiple by no longer being involved in rpetroleum products it goes back to my poichblt what's only thing on your screen up year-to-date. it is carbon-based things. the real scarcity is in carbon-based items that's what's up whether it's carb hohydrates lie food or hydrocarbons

>> chevron's ceo got in a back and forth, michael wirth, with the biden administration, and he laid out some pretty thoughtful points just to say look, at chevron, we are increasing our production and gave pretty significant numbers that showed that we're increasing capital expenditures to about $18 billion this year. that's what would you expect to see, that industry will chase these higher prices. how long before things like that will actually start to help out in terms of oil prices or gasoline prices >> this is a global problem, not a local problem. and chevron is a microcosm in a bigger cog let's look at the european companies, bp, shell they have wind fall profit taxes

and a bunch of other regulatory and policy imposed on them making it very difficult for them to do the same thing that chevron's doing. i applaud chevron. i think they're making great strides as well as the u.s. companies. but let's think about that what makes commodities really different from any other asset class? they are truly global in nature. that's part of the reason i'm sitting here in london these global markets >> so it's hurting to have a windfall profits tax in london and maybe that's a cautionary tale for u.s. regulators, too? >> yes, it doesn't stimulate investment it does the opposite they're hitting them with wind fall profit tax but then taking those revenues from those profit taxes and giving them as subsidies, you know, to the consumers. that's what biden is doing with the tax cut, is creating a

subsidy on the consumer. what are the consumers going to do they're going to consume and buy more and in europe they don't have the ability to increase the production when we think about the price of gasoline, it's set globally around the world so the actions of another country can offset positive actions in another one >> jeff, thank you it's always good to see you, and we appreciate your time today. >> thank you for having me don't miss david faber's exclusive look inside exxonmobil david explores if the company is ready for the energy transition. "exxonmobil at the crossroads" tonight at 8:00 p.m. right here on cnbc. when we come back, we'll get jim cramer's first take on the trading day ahead.

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welcome back let's get right downtown to the new york stock exchange. jim cramer's joining us. and we want to talk about the markets, but all i want to talk about is this mark zuckerberg interview, did you do the interview in the metaverse, like

"ready player one" style >> "ready player one." well, yeah i mean, we spent a lot of time together in metaverse. it was pretty cool by the way, he made me jacked in the metaverse. i never looked as good as i did in the metaverse, but we kind of had a conversation which is what conversations are like, except we were in the backdrop of a beautiful zen garden and david attenborough and generally, we talked about having a very commercial experience, but also a whimsical experience it was whimsical it was not hard core but tonight we'll get to how the company's doing.

but it was just a huge a fun i did not want it to end i asked that it go on longer mark had other things to do. not surprisingly ly nothing to do other than being in the metaverse, and i loved it i didn't want to leave i know that shoddy set that i have, versus the incredible places i visited in the metaverse. >> well, you can probably do whatever you want to do. i want them to make it a little bit like less nintendo-ish and more to my point, "ready player one. is it going to get there, it will look like you and i look right now, except we're going to be avatars of ourselves. i'm going to have an awesome mullet and wear a tank top if i could do that, i think cnbc's ratings would soar. >> he had a very nice shirt on i would like to, tom brown, i

don't wear that stuff, it's not right for me but i do think we can wear what we want. we can be who we want in the metaverse. c i could be mozart in the is clea i didn't do the metaverse right. the stock could be wrong i had the greatest time. i did not want to go it was 8:30 at night what else you doing? go to the metaverse. >> i could see a world, jim, where 30% of society is just almost permanently online. that's how they live to your to pint i'd like to hear your macro market view as well. but why do you think facebook/meta is not getting the investor love? if this metaverse is as cool as you say it is, the stock isn't reflecting it. >> that is really what i'm there for. i'm not there to be able to create an art gallery or go to a

medieval castle. i'm there to judge the commercial aspects, and they are so blow-away it makes the stock seem lilliputian versus what's going to happen here this stock is reacting to some nonsense near term over the next ten years i think we'll spend -- talking about how my sister and i watch like to watch net eflet politics togethr we'll talk and have some popcorn. it's a way to be with my family, a way to be able to relax, a great place to do work, great place to learn and travel. and i think when you came home, instead of having a scotch, just go to the metaverse. >> or a scotch in the metaverse. >> i said come on, mark. come on, man what are you doing he says i have other things to do other than play in the metaverse. i don't know

sometimes it's good not to be yourself >> i agree i remind myself that every day jim, thank you we want to remind you all about the cnbc investing club. sign up at cnbc d cnbc.comnvticl/iesngub ♪ ♪ connecting to opportunity is just part of the hustle. ♪ ♪ opportunity is using data to create a competitive advantage.

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

>> she serves on two of the biggest companies in the world every day we talk about the challenges these consumer-facing companies have been facing the last 12 years or so. does the consumer want to traefrl, stay home, buy more, go to restaurants, shop more from the grocery store? you have a front-row seat through all of this and i wonder how quickly these changes are coming and how boards are able to react to that what are you seeing? >> i think the consumer wants

all of the above, all the things you mentioned. i think the key is to be consumer centric and really be keyed into what they want and have the flexibility and the agility to change your business model, change your offering, and deliver, you know, what the consumer is looking for. i think one of the places we real huh see that is what happened with streaming media, right. obviously, during the pandemic it was hugeliful, but it's not going to go away it will be here to stay. at the same time, people are going to the movies. i think the question is how do you really stay in touch with where the consumer is going and how do you really change your offering to be able to deliver that to the consumer in the way he wants it or she wants it? >> agility and being flexibility are two things that have really been stretched, especially with supply chain issues for any company that has to do this on the fly. and there have to be big questions that are being asked in boardrooms about how much do

we spend to chase the consumer we want to be there. we don't want to miss any sales or revenue opportunities, but we don't want to spend too much to build out and then have the consumer move on to the next trend. how do you weigh those two issues >> i think you have to be very disciplined in terms of what you do i think you have to have flexibility. i think a lot of what we'll see with supply chains is going to have to do with reliability and flexibility. it's going to be a major hange i think over the short term it's going to increase the costs for companies. >> we spoke with brian cornell, the ceo of target, yesterday, in new york, and he talked about how some of these higher prices, higher energy and freight costs, they don't anticipate at least a target those prices dropping anytime in the next year and a half they see it going through 2023 is that how you see things too >> i do think it's going to take

a while for prices to come down and for -- and the reinvention of supply chains and so margins are going to to be affected and we're going to have to be very innovative to try to keep our margins. i think with most companies it e's a two-way situation. one is you'll have to see how much pricing power you have and at the same time you'll have to innovate to try to figure out how to make sure that you keep your margins healthy. >> as an investor, where do you see opportunities in a landscape that has been really littered with disappointments and hardships and higher costs, lower margins? how do you look around other places that you think, okay, now is a good time to start buying here or there? >> well, i think that the fame of the game is going to be about productivity and i think technology is what drivesproductivity

so i'm a huge optimist and believe in the u.s. economy and believe in the creativity and competence of the manager of great american companies and i think technology, whether it's cloud, artificial intelligence, whether it's clean energy, the health scare space, i mean, when you look, becky, at the amount of investment that's going on by u.s. technology companies in different innovative solutions to problems, i think that's where it's going to come from. by the way, i think that the private markets are going to be more interesting than the public markets. so i think for investors the ability to invest in the private markets with great managers who are really looking at all these technologies that are going to help productivity and fix some of the problems that we have today, i think that's where the major opportunity lies

>> thank you for being with us today. it's really a unique opportunity, and we appreciate it we hope you come back and spend a little more time with us. >> thank you, becky. thanks for having me on. >> brian, i thank you, too, for jumping in today it's been great having you here. see you tomorrow morning >> my pleasure >> it's time for "squawk on the street." >> special night ahead, "exxonmobil at the crossroads premieres at 8:00 eastern. good tuesday morning i'll david faber with jim cramer carl has the morning off let's look at futures this mor morning. we have a reversal from yesterday's action europe has been weak, the dax down almost as much as 2%. you can see we are poised for a lower open