something that might interrupt the plans. in 2023, they are forecasting the collective wisdom of the bond market is forecasting it will be some rate cuts to come the two year note yield dipping back below 3%. not that long ago. tells you that that is, for the moment, the message. that's going to do it now for "sid "squawk on the street. "tech check" starts now. good thursday morning. welcome to "tech check." nasdaq down more than 2% in morning. one of those companies will join us as consumer confidence falls and ad spend slow, we'll sit down with the ceo of bumble that stock out performing the s&p to start the year. the first half comes to close today. s&p is on pace for the worst start since 1970

nasdaq seen the worth quarter since '08. how should investors be positioned this morning we'll get another wall street firm cutting targets for a big range of tech names. j and p lowi eri ing for alphab twitter. we're starting the see certain companies whether it's in e-commerce, retail, et cetera. we have been talk about omni channel and i don't think every company is take company but every company is using a lot of tech this is going foto filter throu to a lot of areas potentially. does it filter through to tech

as well. maybe this is one series of calls suggesting something >> this is what a will the of folks at wall street have wanted to see, these cuts they said that was an executed drop we are seeing it at the thick of earning season expectations are becoming more in line is a lot of this weakness baked in as we finish off this half. on that note, we have been talking about potential weakness in the digital advertising market i like that note because they highlighted a defensive pick in this space double verified. it has about a $3.6 billion market cap it focuses on brand safety and this is name that could benefit from netflix and disney shift to an ad base model, jon. >> i'm also watching the press of bitcoin as a proxy for risk assets right now right around 19,000, carl i remember when it was hovering around 30,000 and a lot of

people thought if it goes below 30,000, i'm buying then 20,000. now it's bethlow there. >> well, 30,600 is about where micro strategy cost basis is averaging. a will the of these companies continue to double down with more purchases we're about to close out another month in the red welcome. good to see you. the last few times we talked, talking about the amount of risk options exposure, retail investors had. to what extent has that changed.

has the risk profile of the market shifted >> it's changed big tile >> i was talking to an individual investor who said he cashed out some of his tech stocks and turned to i bonds, inflation protected bonds. that tells you everything you need know about the risk profile of many investors. this has been a really, really pivotal moment for tech. this decade long dominance for this really important group in the market has all but come to an end many investors are expecting that to continue the rest of the year >> where do we go from here as far as the expectations you're hearing from people in the second half of the year? lot of talk. questions about whether expectations or earnings need to come in.

based on where you see retail investors and others positioned risk wise, to just what you're hearing, what do you think even after these big declines with the tech sector having its worst year since 2002, many pos investors are positioned for the big decline to continue. p at the same time, we have seen fund flows from growth funds a lot of people are positioning for this regime shift we have seen in first half of the year to continue to play out in the second half of the year.

>> maybe a pause in september. how much is spring loaded under some of these tech name, do you think? >> i think that's a good point i think that's one of the biggest of contributing to the decline in tech and one of the biggest factors that will impact hold up it plays out the rest of the year investors i've been speaking soy s -- say maybe it means the worst of the declines are behind us. for a lot of last year, we saw investors position for the return to the pre-pandemic market environment with low treasury yields, higher tech stocks and that's been turned on its head this year as you pointed out, i think the

path of the ten year will impact how people position on that front. >> you've had some great pieces. the retail investor and the amount of leverage in the system that they are specifically holding, what do you see now any metrics that give you an indication of what they are looking for? maybe growth to i bonds as well. >> i think that's an important shift. data did show there's been a shift from that single stock activity that you and i discusdiscuss ed over the past year. people are turning more to index options instead of single stock. more to energy stocks instead of the tech stocks. i think there's a passionate chance of growth investors that are low to let go of that trade. a will the of those have reseedsed. >> yeah. got to lick some wounds. it's been a rough first half for

those willing to take risks. gunja gunjan, thank you. >> thank you let's take a closer look at the first half of the year for tech so far. our investors in the danger zone. the dials are different and the plane doesn't go as fast. >> hi, good morning. i think we think of the elephant in the room being the capital cycle that's playing out in tech broadly and i think one of your other guests as well as a friend of the show has talked about that in the context of his call on data centers. the real sort of issue is the fact that over the last years,

you've seen a significant inflow of capital that's come in even into private companies the last sort of decade we have seen approximately 200 billion dollar for year of venture capital funding. that's been up to 600 billion dollar it's just now diverting to something like 200 or 250 billion dollar i think that's a good and healthy thing that is taking place. that's true of many, many other parts of the tech space too including in software, including in the internet space, including in big tech where you've seen the capital intensity of these companies that have been so called or historically known for being capital like businesses grow as the capital looks to january return and sometimes those returns are going to be lower than what they would have provision for or assumed, that will lead to recap blibration. we think it's healthy pu not

quite a bubble people think about history doesn't repeat itself. we think history does rhyme. it's not quite bubble of 1999, 2000 types they are going through an old fashioned version of having thrown too much capital on the back of extrapolating certain trends that might be slower to play out. when i think about our play book, i think you're right -- you talked about doubling down i think if life in the form of pete mitchell, facing this predicament where he's been flying f-18s for a decade doing sort of cart wheels and loops and dog fights and coming out

like heroes excement now they are ambushed and what they have to do is go and find an f-14, dust it off, really jump start it and sort of fly back to safety what that sort of implies for us is that there is a equipment out there. there are things to do in this space. it may not just be in the same sort of dashboard of the dials or going to look different in f-14 it's going to be a slower plane. the amount of gs it can put on will be lower. when we look at sort of opportunity, we like the industrial committee there's companies like analog devices which have been very careful about expanding capacity i realize there's a recession call out there and people are generally nervous about semis. we're not that nerve because

semis have been really battle tested it's going to be quite a good place to be on the other side of a severe recession >> i just wonder, maybe too land the plane but are they able to do loop. can they still i knonnovate for long term? is this a safe flight? >> that's a good point and a nuanced point. i'm not prreferring to legacy tech i'm thinking about companies that are a bit more geared sicklically. i'm talking about companies like t-mobile and faster growing company like crowd strike. innovation will be quite

important. that's going to be tested by the understanding of management teams to not be delusional about the environment they're operating in let's talk about the high growth software companies let's show us what you're made of in the sense we have not seen much by way of interesting capital allocation come out of them it might be a nice place to be but they are not future proofing their business models. >> bottom line, are the laws of physics in effect again because it seems for several years like the old rules of how to value stocks didn't apply.

it sounds like part of what you're saying is you don't have to see far into future to win. you can look at some tried and true names, some tried and true metrics and place some pretty good bet >> that's right. they are the low cost operators in the space 15 to 20% lower price points than their peers with a coverage that is 200 million pops already covered on a 5g network relative to the incumbent we think they're in a great place to play offense.

you might be dealing with as it relates to return on capital that's been deployed into areas like data centers. >> certainly holding its own against the broader market this year with the 15% gain thanks good to see you. turning now to crypto. another asset that's had a really rough quarter and have bit coin trading below 19,000 this morning another blow to the industry the sec rejecting grayscale proposal to turn its bitcoin fund into an etf >> the latest bad news for the industry

the sec citing potential for market manipulation and lack of proper investor protection grayscale punching back filing a lawsuit against the sec claiming the agency is inconsistent and acting arbitrarily and capriciously violating its own rules. a lot of blame fall on sec chair gary gensler he's been talking for months about the need for more regulation some calling this a missed opportunity. they criticized the strategy of regulating for one off decisions and lawsuits others tell me the sec ruling was expected. the crypto hedge fund three

arrows is rliquidated and r reinfrastructuring jpmorgan bringing bit of optimism saying the worst may be over strategist say failures shouldn't be surprised atdeclin. the current deleveraging cycle may not be very protracted all of this hitting the crypto related stocks coin base really bearing the br brunt of it. shares are down this month back to you. we talked yesterday about jim chenos the realize company that house all that equipment, that networking two companies he cites are in focus. we have the ceo of digital realty coming up the response to chenos

responding to us on twitter saying can't wait. some dlr numbers 2016 versus 2021, ebit margin 23.2 coming down vacancy rate, 11 to 16 this is serious deterioration over the past veeafi yrs we'll have the company's take on all of that in a moment. "tech check" is back real soon machin

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. bumble advertising for a portion of its revenue as consumer confidence slows, what is the advent for the stock. >> thank you whitney for joining us from aspen ideas festival we'll get to those macro economic questions in moment first i want to start off with your comments on the supreme court reversal of roe v wade tell us why it was so important not just to you but bumble, as a business to speak out in criticism of that decision >> yeah, it's a devastating turn of events. i founded this business in 2014 ultimately to put women in control of their relationships you can imagine that this just

gives us every opportunity to reenergize that mission and to be motivated at levels we've nef been motivated at before we're going to do our best for women to fight to have control over their decisions and control oaf their relationships and we are going to continue this fight on a global level. >> do you think that this change that the supreme court has come down with will change the dating industry, change the way your users behave >> you know, it will be really interesting the see consumer behavior shift and trends. i do know just listening to our internal team and the feedback from a lot of ourmembers, wome are more motivated now than ever to stand up for themselves and to take a stand and be really commanding in what they are looking for in love and relationships and say i will not be in the passenger seat anymore. this just gives us all the more momentum to keep pushing with women being in control and our product and to really carry this

on a global level. >> you've lobbied for legislation to make cyber flashing illegal a lot of companies don't want to be as public about different issues why is this important to bumble? >> this is core and authentic to the dna of the business. when i started this business it was out of the belief that the internet was rooted in toxicity and not encouraging better, healthier behavior everything we have done from day one has been to engineer kinder, less toxic behavior to driver yel healthier relationships. we have to stand up to what we believe is right we have to say no to what should not be allowed op our product. this is not just for the mission. this truly drives good business and really proud of what we have achieve today and where we can go from now.

>> wli know there's a lot of conversation right now about economic uncertainty, about consumer responses to inflation. what are you seeing both in terms of impact to advertising and also consumer behavior right now when it comes to both the subscription and just general activity >> julia, as state d on our pro previous earnings call rngs we believe that love and the connection to meet people is just a foundation need we have not seen any real impact and we will continue to monitor this and iterate as needed >> what is interesting is we talk about which industries are recession proof.

the movie industry has opinion recession proof and questions about we enter a recession how this could be different. do you think the dating business will be recession proof in terms of being something that people will be willing to spend money on sd >> if you think about the dating wallet, it's very expensive to go out into the real world, to buy drinks, get dressed, get a ride somewhere this is an expensive quest to find love, to find connection. the fact you can from the comfort of your home, on your phone, at a fraction of the price get access to hundreds, if not more, people you cobe extremely compatible with in seconds, minutes if you look at the time saved, the money saved, this is a really interesting opportunity for people as they start to make tough decisions about where they spend their leisurely ly money this is an opportunity to say i'm going to skip the $100 of

dr drink on a saturday night and find someone i have something in common with and do it using the power of these products that we serve with bumble inc. >> you have tender and a woman in charge and she's talked about focusing on the female consumer which has been your focus. you have new start-ups there's one called lolly that is taking the tik tok approach to digital dating how do you see the landscape as being a threat now >> i'm proud to see more women in leadership positions in this space. that's fantastic we have been focussed on this for seven plus years now this is so core and foundational to who we are. women -- focusing on women has to be authentic. it can't be an after thought and something you just plug in to try and afrttract more customer. we have always focused on engineering a product that

serves women, protects women and does things in way that women want because of that, we have seen the momentum we have on a global scale. we continue to be very proud of our our focus on women i think that's great i've been flp this industry for now a decade i've seen more start-ups come and go than i can count. you have to have a double sided marketplace. a great product can only exist in the customers come. to create network effect is incredibly difficult that's why you have seen only a couple players remain in this space. i'm excited to see innovation. we stay very committed to being an innovative company but always putting women in the driver seat and control of their experience. we are excited for everything ahead. >> well, whitney, we understand you are in a quiet period but we hope you will learn more about how you're managing some of these macro economic challenges. we hope you'll come back to talk

about it thanks for joining us. >> thanks. julia, our thanks to you markets close to session highs here s&p loss cut by more than half let's get a news update. >> here is what's happening at this hour. the supreme court ruling that president biden can shut down the remain in mexico policy. the trump era policy requiring people seeking asylum to wait in mexico while claims were decided. the biden administration acted properly to seek the program which biden did immediately after taking office. inflation remained at high levels in may. core personal assumption expen expenditures, pricing rises 4% in may that's a slightly smaller rise than previous months walgreens shares down about 4% this morning despite an earnings

feet online sales jumping in tus and retail sales bouncing back in the third quarter. demand for covid vaccines dropping weighing on pharmacy. drugs for chain reiterating its forecast for the full year back to you. after the break, revealing the new short data center reits like digital realty. we will get the ceo's response on the other side of this break. stay with us

investor jim chanos is

targeting reits. >> there's more to the cloud than just public cloud there's some traditional players that will be caught flat footed but others that will be in demand as customers need more than public cloud services and if you bet on the wrong ones you could be left short. >> chanos has been watching today and tweeted to us we're not shorting the cloud reare short the legacy, obsolete brick and mortar boxes with declining cash flows and insane valuations >> it's important the watch us >> you're shorting the legacy infrastructure players but i think your argument was there's a will the of other companies that are still even public an private. >> chanos responding i have the sound on but would stress the financial realty versus jon's narrative. at lower rates is fnegative 27%

ebit growth worth it >> they will have to understand what's beneath the roof of those old facilities make sure they don't get caught on the wrong side of the future. joining us now to respond that data center short is the chief executive shs perhaps most impacted by that call, digital realty ceo bill, it's great to have you with us. let me give you the floor. what is jim chanos getting wrong here >> well, i think jim maybe isn't aware that demand is never been stronger in our space. we've had record bookings the last two quarters. our fourth quarter bookings were

167 million. that's up over 30% from the prior four quarters. we're releasing that space to some of our most sophisticated customers at extremely high rates. he calls -- >> i believe. >> go ahead. i'm sorry. >> you finish your thought >> i was going to say, the providers as our competitors but we view them as our partners and view us as part ners we enable their growth around the world. >> i think his argument increase your return on incremental capital deployed >> we are increasing our rental rates right now. we have been pushing rates since

the first of the year. we have been pushing rates this year and will continue to push rates. our escalators are now being indexed to cpi we're hedged against inflation when you think about data center reits versus other reits our cash flows are basically product of long term leases with high grade credits that are indexed to inflation and residualties will be further protected by the current inflationary environment >> bill, i'm curious about how much of the advantage that you

have now in location, in pricing is durable and to what extent you can expand your total adjustable market. arguably this is a valuation you'll have to grow into and i would expect that these hyper scalers are going to continue to make the case to their customers you can do more with us in the facilities that we actually own. you can do less hybrids. whether they will be successful or not is an open question if you have larger total adjustable market, if you able -- you're able to build lower cost, i imagine that could give you leverage you do that? >> we're expanding around the world. we're expanding into africa, new markets in europe. then even in existing markets and northern virginia, for example, the largest market in the u.s. we're now building on our western lands campus which will give us the ability to build up to one and a half gig

watts of new capacity. we have demand there from several of the largest csps in the world who in the past one in particular build their own now they are talking about leasing several fully improved data centers from us there >> okay. how should i vnvestors understa your capital investment cycle. it's only going to work out longer term. charge higher rates. >> we have a business where we lease to the provider and these are the larger boxes that are connected on our campuses. then we lease to the enterprise customers at high prices those in the cloud service providers. in the case of the longer term lease net assets, yields on

those have been in the high single digits. we have a -- we have several permanent partner capitals, including our digital core reading which is based in singapore. we're contributing stabilize assets into that partnership at roughly a 4% cap if you think about it, development yield in the high single digits contributing four, that's more than two affect offense value when that goes in. that allows us to recycle capital and we've been selling our older noncore assets the portfolio has changed quite a bit. we have a for more network portfolio that is more enterprise focused

>> would you argue we're in the process now of topping out on pricing power? >> absolutely not. what pricing is driven in part by inflation and higher input costs that developers are pricing. it's also a function of supply and demand and individual markets. what we have seen in many markets around the world is that supplies definitely tightening while demand is accelerating which has given us tremendous pricing power around the world >> bill, i come back to this question of capital investment and how you compete with those hyper scalers that are generating huge amount offense cash flow. they are sitting on huge cash piles and as jon said earlier, they are developing the technology it has the customers may want can you give us an idea of how much you're going to need to spend over the coming years in relation to your out look for

rental rates >> our capital program is millions of dollars. think about what their returns are on the capital on their core business which i would argue is probably north of 30, maybe more than 50. think about what returns are mr. the real estate sector if i'm sitting at cfo of a large cloud service provider and thinking about capital allocation, why would i invest capital in real estate in data centers and hard assets whn i can invest it in my core business and earn a much higher return >> right i guess with interest rates rising, that changes the calculus on capital investment as well. if i'm understanding you correctly, you are arguing that because your current portfolio data center wise is more network dense, more enterprise focus, the comps that jim chanos is returning about, return on invested capital, vacancy rates isn't apples to apples because

your current portfolio is positioned better and you believe you're going to be able to reduce those vacancy rates in these newer facilities because of that and your pipeline confirms it? am i understanding that correctly in. >> that's right. it's been incredibly strong. if you think about the s sophisticated investors who have taken companies prooiivate, the are also taking the opposite side >> it's great to have you with us thanks for coming onto discuss this bill stien >> thank you you're welcome thanks for having me coming up, we'll get a deep

dive on apple's china exposure and the potential impact of the stock down about 2% today and a fairly rough take. we are well off session lows

the poernl hit on the stock, what products could be impacted most steve. >> yeah, jon, apple warning in april that this quarter could see 4 to 8 billion hit to sales due to the china covid lockdowns. let's talk about how bad was it. we can read some of the tea leaves from analysts coming out throughout the quarter fist up is iphone ship time. they did not slip. you could walk into an apple store and buy an iphone. that's a sign apple prioritizes its most profitable products moving productions to other regions that weren't in shutdowns. morgan stanley knocked down reports that the iphone 14 is delayed. it appears to be on track. ubs analysts say iphone sales were up 13% in china for the month of may as lockdown

loosened in the country. it's a different story for the mac. it's affecting the newest mac backs. no specific launch date was given which some people saw as a sign of supply chain problems and the new mc mac book, people noted they put a slower hard drive in there meanwhile, services, less positive in china. analysts seeing slowing growth in the china app store sales this is a similar theme we have seen throughout the pandemic as people get out in the world. there's betting less on apps and gaming estimating just 3% app store growth there in may versus 11% a year ago we'll get the final results from apple itself on july 28th when the report the june quarter earnings back to you guys >> steve, thanks for that. we'll talk more about what the quarter may bring in the weeks to come. still to come, snap looking

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[music - cover of blondie's “dreaming”] introducing elevance health. [music playing] ♪ dreaming. ♪ ♪ dreaming is free. ♪ time for a gut check on big names in the streaming space morgan stanley reiterating overweight on disney, saying content is undervalued at the current share price. similar for warners brothers benchmarks initiates, saying they're well positioned in the

streaming market bearish on netflix, saying limited visibility into the subscriber growth. that stock coming out of a brutal first half. down 70% on the year more tech check after this don't go anywhere. so is your so. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire ♪ ♪ how's he still playin'? aspercreme arthritis. full prescription-strength. reduces inflammation. don't touch my piano. kick pain in the aspercreme.

you may remember last month snap ceo warned the company would miss on revenue and earnings for the quarter yesterday announced subscription plan to diversify income streams. julia boorstin has more on the strategy >> carl, this is snap's first subscription service, calling it snapchat plus, just announced it yesterday. for 3.99 a month, subscribers will get access to features on snapchat when being tested before they're widely available. subscribers still see ads would get access to the likes of an ability to pin one of your friends to the top of chat history as a bff and ability to see who rewatched a story you posted snap shares down 80% in the past year and 75% of analysts have a buy rating on the stock. 23% have a hold and remaining 2% have a sell. this move to diverse by revenue

streams away from advertising comes as the company invests in augmented reality designed to drive e-commerce through the platform this feature seems focused on passionate core fans of snap service. there could be more opportunities down the line. >> everything is plus now. tech check plus. all right. great. thanks >> espn plus. >> exactly, yeah back in just a moment. i had no idea it was that easy to diversify my portfolio! ♪♪ go to investor.gov today to learn about diversification and other valuable investment information. before you invest, investor.gov. this is evolving from gym to global media company. this is connecting your people and content in one place. this is the system you built to transform your business.

this is how. airtable.

final word on data centers tweeting moments ago facts are stubborn things. demand is strong, and i would expect the ceo to stay with that story. yet numbers are all going the

wrong way over 1, 5, and 10 years. this is a low return business that's getting worse, trading at an insane evaluation as hot as data, ai, localization are going forward, is this one of the areas investors might continue to value higher than others don't know >> it is all around valuation. i think he should come on, talk to us himself, instead of sub tweet. someone tells me this short is nothing new. if you bet on this, in the past, you would be on the wrong side see if anything is different this time around >> it is different inflation-led recession narrative that makes it a unique narrative. this is where you would turn to if you saw this economic macro backdrop a lot of selling pressure from europe now that their first half

is in the books, will we see relief cut our losses in half ten year back below three. atlanta fed sees negative growth in q2 cl would technically mean recession. we have to see what happens. we look forward to getting second half of the year under way. let's get to frank holland and the half >> welcome to halftime report. i am in for scott wapner stocks plunging. the s&p on track for the worst first half since 1970. yes, the nixon presidency. where are stocks going the second half, what do investors do from here we discuss with the investment committee. bryn talkington, jason snipe, josh brown, jon najarian, co-founder of market rebellion.com. major averages bounce off lows dow down almost 250. on pace fo