in andrew ross sorkin along with joe kernen. becky is off today >> just the boys we have looks and -- to some ex extent >> i can't have all of my aspen mountainous paraphernalia on >> we can put a green screen behind you that might have been a green screen >> it was real it wasn't memorex. >> where is it >> the gift. always a gift. >> when your parents go away >> i know. a gift in the makeup room. it is awaiting you. >> no kidding? >> yeah. i think of you >> that's really nice. i'm nervous. >> you should be. >> is it ticking >> take a look at u.s. equities

at this hour ahead of the three-day holiday weekend. a mixed picture. we'll call it the s&p unch and the nasdaq off ten points. this coming after the brutal first half of the year dow falling 15% and the s&p falling 20%. nasdaq is the big loser down 30% year to date take a look at treasury yields we set up this morning as well we're under 3% on the 10-year treasury 2.981. >> that's a big move from almost 3.5. >> yup. >> not a great thing, probably growth concerns. >> right. >> the markets were ugly earlier today. as we got closer to 6:00 aa.m. - it is positive

i don't know what we will see by the end of the session my point was i wonder what we're going to say at the end of the year versus the midpoint it's not a good start. worst in 50 years. >> meaning >> 52 years. will we say this is the worst near since 1970? >> a tough year. >> terrible first half >> we may take back some of this if we see a switch in inflationary fears it may be a better story i want that. >> we will talk about it we'll talk about kohl's in a second let's talk about this. >> fascinating piece >> i did not know paul samuelson is larry's uncle. >> referring to the op-ed. >> a couple of hardcore

suppliers. it touches on something we talked a lot about inflation is bad, but it seems strange to try to cause higher unemployment and slower growth it is a bad tool to use. you wish you didn't have to do that that is part of the doctrine from really famous people like nobel laureate paul samuelson, larry's uncle. the book from my intro economic course it is what everybody used. he actually said one time in 1980 that five to ten years of austerity in which the unemployment rate rises to 8% or 9% average and real output inches upward at 1% or 2% might accomplish a gradual taming of inflation. we tried to do that. can you imagine sacrificing five or ten years of austerity? the point of this piece and judy shelton made that point.

you don't try to make producing goods with a bottleneck. you don't raise rates to make it harder to produce those goods? anyone who wants to expand or start a business or anyone who wants to expand a business we're raising the cost of doing that with raising interest rates. a lot of circles would not like it we get back to tax cuts and produ productivity lowering capital gains rates all of those cause growth, which eventually, might tame inflation without austerity. is that possible >> two pieces to this. paul krugman on the other side of this would say why not run the economy? >> he comes at it from a different angle. >> what is the problem with inflation? to some degree the issue is is inflation a problem? is it a problem or regressionary

tax on everybody and everything? stability is the story and what the fed is trying to accomplish at this point, if you think they are behind the ball, which they are, is the right answer if you think that these gentlemen or krugman -- >> he comes at it from the point of not cutting taxes, but funding taxes for more government spending. growth has to come in the private sector not in the government sector >> the issue is and are trying h we want growth to be less, not more this is a fill philosophical. >> it is not that philosophical. to raise unemployment. >> no question >> to lessen demand. that seems perverse. >> if you decide the long term you created a bigger problem

>> do you see merit to the notion that private sector growth could be better than trying to just tamp down all growth >> i would suggest -- >> the supply side sdp >> i suggest -- >> trickle down. >> my bigger worry for everyone going to the pump and fill up the car and buy food, if those costs go up and wages don't, which they won't, any growth will hurt this story i'm not -- it's a very strange thing to say i don't want growth moments arguing for growth is not necessarily a better outcome for most folks at the barbecue >> you hear the songs and what was going in 1970? >> i missed that by seven years. >> you'll get this you made a bid for the glove

you wanted the glove "abc." jackson 5. he hadn't done the moon walk in 1970 the beatles broke up in 1970 >> you saw the picture >> i saw the tweet. >> "staying alive. i looked like the bee gees nixon invaded cambodia hunter biden was born. there is the picture that we're talking about. circa 1970 you wonder if i'm not an environ environmentalist i'm hugging a tree do you remember andy gibb? >> i do. >> that's where they got that haircut. let's see if i can do that pose.

>> we have to get you a tree now. >> you were born >> '77 i missed this whole period >> i was like partying hard in boulder in '76 >> i bet you were. getting to kohl's. sources say kohl's is terminating talks with franchise group. owner of the vitamin shop. business comes as sales decline and including in the move, the stock down 50% over the last three months last week, sources told cnbc that franchise group was considering lowering the bid as outlook for the retail sector dimmed ftx is nearing a deal to buy blockfi for pennies on the dollar the terms sheet is expected to be signed today. one source says ftx could pay

$25 million. 99% below the last private valuation. another said the price could be closer to $50 million. both declined to comment on the cnbc report. a programming note don't miss a special edition of crypto night in america. hosted by frank holland. >> crypto night in america used to be exciting now it is a roller coaster ride. >> although it has been -- what are bored apes worth >> you can get a bored ape for under $100,000 >> that makes me think we're not done >> i'll get you that information in a second. >> that hasn't come all the way down >> cheapest bored ape.

>> i want one of the best ones >> priced low to high right now. >> a dentist or orthodontist >> for about 97 grand. >> one of the crappy ones? sd >> the eyes popping out. occupation a blind fold on. that is cool with a tuxedo that seems representative of this particular moment of the investors. i might have to pick that up after the show a couple angelic bored ape with a halo a cowboy is available. >> i told you what i would buy i would buy the big o with legs getting a rebound. or a couple of ali with joe frf frasier. the cool look on his face.

i'd pay for that maybe kirk gibson. maybe pay for that from the home run. >> how much? >> i think it might be worth what it's going for. you got to work with me some more on that maybe a bored ape orth rthodontt >> what you are buying with the bored ape not the image. you are buying a membership to a club maybe it is a club you don't want to be a member of that's a different story >> the bored ape club? >> the bored ape yacht club. a digital yacht. >> it doesn't exist. >> the metaverse >> you love making me look old i don't want to be part of that club coming up, we'll talk

strategy for the second half of the year and potential investment opportunities. as we head to break, here is a live look at laguardia terminal a as we kickoff a huge weekend for holiday travel more on that throughout the morning. if you know dprgummies for s work, let me know. >> announcer: this cnbc program is sponsored by truist securities take the world by cloud. accenture let there be change. did you know your health has more to do with your zip code than your genetic code? that doesn't seem fair. we agree. but where you live determines access to doctors, green spaces and fresh food. that's why we grow our own. smart. we don't think it's right that some people are healthier than others just because of where they live.

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first half of the year is in the books. it's the worst for stocks since 1970 gas was 36 cents a gallon. the new york knicks were the nba champs and the top grossing movie was "love story" because love means never having to say you're sorry. featuring a young ryan o'neal and ali mcgraw and we have stan stovall you were a glimmer you might have just been around at that point, sam your dad, did he tell you about it >> thank you for assuming i'm as

young. no, 1970 i like that picture of you it was a while ago is that tree still alive >> that was a background one of the lame '70s background. you can't believe how thick that tie was. it was almost like a bib did your dad ever tell you about 1970 or '71 or '72 >> pop started in the business at ef hutton in 1953 he didn't stop investing until a few years before he passed he was around. obviously, he reminded the kids of how times were tough in the '70s with higher inflation what is interesting, joe, 1970, the first top ten, eight of

those since world war ii, eight were election years. what we are experiencing this year is 80% of the worst ten since world war ii >> weird that sounds like a coincidence maybe it is related. do you think by the end of the year we're making similar comparisons, sam what is the outlook for the second half? just as bad? flat could we bounce? >> i think we have a tale of two quarters the third quarter is likely to see a continuation of the market decline. looking at the worst ten since world war ii first half per perfo performances we ended up declining 2% or so in the third quarter the pattern continued. most times we actually saw a nice improvement in 80% of the observations with a gain in the fourth quarter of 4.4%

so, actually, you know, what you are showing is data going back to 1929. looking at data that i think is more relevant back to world war ii, yeah, it shows continued softness in q3 as what typically happens following midterms, we see a bump in the fourth quarter and carries into the first half of next year. >> we keep talking about how long this inflation spell is likely to last transitory was a bad word. should have been retired it's lasted longer than people thought. i'm still not convinced it becomes a secular wage price spiral that it ends up with stock prices like 1974 or years after that are you convinced that we need

something really radical to deal with what's out of the bag already to get it back in the bag? do we really need austere, draconian measuresmonetary >> joe, history warns us that the fed waited too long to battle inflation when you look back in time, anytime we had a year on year percent change of cpi, we had a bear market and recession. the pbear markets lasted longer and deeper bear lasted 15 months with a 35% decline. that is still a bear market we get back from in 14 months and we actually establish a new bull market three months later. i think we could end the year at

4,200 if we bottom at 3,500 in q3 this year remember that bull markets see a surge of 40% for the s&p 12 months after bear market bottoms. >> all right sam, we'll check back. it is a tough time to be in your business, i guess. have you made any purchases in the last month yes, i have. you know, you always try to look for good opportunities based on the fact i remember the 1970s. i focus on great income opportunities. i'm thinking more like a landlord than trader saying give me those companies that pay a nice annual rent that have a good track record of paying rents and don't mind having rent increase that is what i'm looking for. >> okay, sam thanks. >> thank you, joe. >> we got the sum total of your knowledge and bob's knowledge.

>> 2 for 1. coming up, when we return, we talk about facebook's parent meta it is scaling back the hiring plan details from the all-hands meeting. hear what mark zuckerberg has to say about what he thinks is going to happen to the economy as we head to break, look at the biggest losers in the s&p 500 in the first half of the year netflix at the bottom of the hour we dig in that when we come back these are the bonds worth investing in. for over 50 years, pimco has reinvented fixed income to create opportunities for investors in every market environment. so, no matter what happens you can build the bonds that mean the most to you. pimco, a global leader in active fixed income.

facebook parent meta platforms cut plans to hire engineers by 30% this year according to ceo mark zuckerberg

during the all-hands meeting yesterday. zuckerberg called the downturn the worst he's seen in recent history. in all, meta reducing hiring target for engineers in 2022 to 6,500 from the previous 10,000 in addition, the company is turning up the heat on existing staff unable to meet more aggressive goals zuckerberg telling employees realistically, there are a bunch of people at the company who shouldn't be here. you know who you are another manager adding we are in serious times here and the headwinds are fierce it is amazing can you imagine hiring 10,000 engineers? what do they do? it runs itself what more do you need to do? meta. >> i assume a lot of this is

programming around building al goinalgo rhythms. >> so meta the perfectly straight face. >> yes. >> you are telling me i want to hang out with other bored apes at the yacht club sailing around on a fake boat and buying fake clothes to wear at my fake bored apes yacht club? >> i'm not making a play for the bored ape yacht club i suggest that the kids and generation that is maybe one behind me in the future when they are living for an hour or two -- it is like a game -- and they want to spend time with each other digitally instead of living on a text chain which is how they live now.

20 people texting with each other. they go and hang out in a digital membership club and the entrance to the membership club to be a member is buy some kind of nft or piece of something that says i'm a member of the thing. >> okay. it's a little closer to something. when are you explaining it, did you think what am i saying >> i think my kids are 11 years old. their class will be on a text chain. they will all message each other. the digital manifestation of that in a more advanced universe. >> for younger people. okay. >> maybe older people. >> we are never going home to get on one of these things for an hour after work. >> less likely >> hang out? >> what about the alumni association at m.i.t.? instead of going to reunion, you

digitally all go to a reunion? you would be a member. m.i.t. would issue an alumni certificate of graduation. >> m.i.t. function of any kind >> they would not let me in. i'm not -- i'm not trying. >> maybe you talk about elon musk for a second we haven't talked about elon musk for a minute, they say. quiet on the elon musk front "the wall street journal" pointed out he hasn't tweeted in nine days. a tweet vacation of sorts. his first break like this in nearly five years. followed a period where he was especially active on the platform he agreed to buy this platform twitter shares are below $54.20 deal price sitting at $37.47 this morning

speculation why elon musk is not tweeting maybe he has actually gone on vac vacation maybe he hurt his thumb and can't type. >> he can take a cool vacation i'm sure >> he also famously prides himself and likes to tell people he never takes vacation. i haven't taken a vacation in a decade i don't know >> he recently looked a bit glum on an interview. he didn't seem to have quite the swagger. a tough time >> tough time for everybody. coming up, we we talk aboute tough times. take aways from the president biden's trip to europe look at the nasdaq 100 winners and losers from the first half of the year we're back after this.

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good morning welcome back to "squawk box" live from the nasdaq market site in times square. checking the futures which are now red again. off the worst levels of the session. that's the best thing you can say. rough session yesterday. didn't get totally out of hand a tough week and it was a tough june and tough first six months of the year. >> yes, it has let's get to kayla tausche in madrid this morning with the take aways from president biden's european trip. kayla, good morning. >> reporter: good morning, andrew president biden has been hailing the historic nature of this week's summit that saw western leaders share a renewed vision and playns for nato expansion. he has been looking at the

position of increasing at moment he has faced questions from domestic stability leaders said they would back ukraine for the long haul and the efforts against russia for as long as it takes. president biden was asked how long exactly is that and how long should american voters be paying a premium for this. here is how he responded >> as long as it takes russia cannot defeat ukraine and move beyond ukraine. this is a critical, critical position for the world >> reporter: well the war in ukraine was a galvanizing issue for voters, but 85% in a poll said they believe the country was headed in the wrong direction. one reporter asked mr. biden if he believed that was the case. he said world leaders here in europe meeting this week had not shared that view he acknowledged that inflation

is high. he said the one area where he believes the country is moving backwards is the supreme court's overturning of roe v. wade he then went on to propose rule changes in the senate to codify abortion rights. here is where that happened. >> i believe we have to codify roe v. wade in the law and the way to do that is to make sure that the congress votes to do that if the filibuster gets in the way, like voting rights, we provide an exception for this with the required exception for the filibuster for the action to deal with it >> reporter: pressure from progressives to propose that has reached a fever pitch recently it simply is not realistic there are not 50 democrat votes to do that now even if two more democrat seats were procured in the november elections, there is still a likelihood that republicans would flip the house and abortion rights legislation

would not go anywhere there. it is something the party has been asking mr. biden for and something he will continue talking about today. andrew and joe >> okay. kayla tausche in madrid. thanks for all that great reporting from there all week. we appreciate it. when we come back, we dig into yesterday's supreme court ruling that could have a major impact on the energy seector we break that down next. we talk to dr. scott gottlieb about the summer travel season and the omicron variant remember, you can watch us anytime on the cnbc app. ♪ ♪ imagine a community where millions share ideas and trade stocks, crypto and beyond. to the moon? in other words...

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welcome back to "squawk box. supreme court decision curtails the executive branch power to address climate change joining us is the energy aspect founder and researcher i know there are so many energy companies trying to understand the implications how do you see this? >> look, this is not going to impact oil at all. not even gas to that extent. for us, the main thing is because the biden administration is going to overhaul the

regulation yes, it is an important headline, but doesn't change near-term markets whatsoever >> what does it do so many companies, large and small, around the country, have, of course, made pledges around 2050 and carbon emissions and the like how do you think that changes, if it does at all, as a result of this? >> well, i don't think the company level should change anything what it will do, of course, and it just adds that additional layer uncertainty. the market has been grappling with it for some time. that is why the investment overall in the energy space is dwindling. we don't have the clarity with the net zero targets around regulation and whether the government intervention and what levels the government intervenes and if we get it overturned like

you see now. i do think especially right here and right now with such high energy prices across the board that companies should be wanting to invest more decisions like this is yet another instance why the uncertainty with regulation is keeping them from investing. >> amrita, this is like coal fired plants, i think, in large part i wonder whether this narrow decision effects the rest of the oil and gas group. i don't think that's the point i think the point is the s.e.c. climate rules, if they were to institute them, are now called into question. i don't think they can do it now. and the treasury funding wherever you want to look. any agency involved in the regulatory landscape for carbon

dioxide. they want acongress involved. the supreme court anyway >> otherwise you just go back to how do you make investment decisions which by the way could be 10 or 20 year returns if you notice in a few years, it could be overruled you are right. >> amrita, one of the hot topics among investors is the prospect the s.e.c. is going and this goes to joe's point requiring all sort of disclosures. that may not be regulations, per se, in the guise of what a company can or cannot do it could require them to make disclosures around climate do you believe those disclosure efforts, if the s.e.c. pursues and they have been pursuing that, that it would be something that -- i'm sure someone would see to take them to task apparent go to court over it from your reading of the ruling, do you think the s.e.c. has the

authority to do that >> well, i think yes, it could do it. i think the market is headed that way anyway. let's talk about u.s. shale producers. they are already because of internal metrics around what the company wants to achieve they are disclosing more and more emissions targets and what their goals are. i'm not sure that is necessarily going to be at odds with even a directive. i don't think that is the concern here it is much more whether some of the rulings can stick and then get overruled and what investment climate setting up fn the situation with a broader energy crunch going on. >> it seems the chance of some kind of cap on trade energy and carbon tax is off the table?

>> yes >> amrita, we appreciate you being with us. we wish you a happy fourth of july weekend a lot of people will pay a lot for gas this weekend good story thanks >> you as well she's gone it's a cruel business. that guy with the switch director coming up, we dig into the biggest loser in the s&p 500 in the first half we also have details, sorkin, on what the second half of 1970 -- what the market did back then. it was up. that's coming next as we head to break, here is a look at other big tech stock losers year to date.

♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq

welcome back to "squawk box. the worst stock in the first half netflix. it lost more than 2$227 billion in market cap. equal to the kdomestic total for the last 23 years. join we appreciate you being with us rich, i'll start with you. the question of the morning and year for folks who invested in netflix or folks thinking i should be invested in netflix. would you at this prices >> we had multiple crises of

confidence of netflix over the years, andrew. you have been reporting on many. this is nothing new. people have given up on streaming or thought the business would not scale to the levels it thought. it is early. think about what people are talking about this summer. what is dominating dominating a summer long as we kick off summer it's been stranger things. stranger things has been, you know, it was number one for four weeks in a row not just season four of "stranger things." all four seasons were the top. the advertising's going to help grow revenue a bit password sharing's going to help expectations are too low for 2023, but the real driver of what's going to make netflix work begin is the content has to be better than it was over the prior six to nine months where

it was definitely slower >> what is the appropriate, i mean, in your mind, fair value, at $174 right now, $175, what is fair value for this company, and how much of it is an earnings story versus a multiple stories? what kind of multiple, you say you see upside, how do you see that expanding if it really does >> it comes down what do you think, do you believe that streaming is going to top out at 300 million, four, five, or 600 million? that very much determines how you think about the valuation of this company we think the number is north of 600 million long term. is it going to take a little longer to get there than we originally thought it will. there's no doubt that the pandemic and multiple other factors. we never thought peacock would lose $2.5 billion this year. the pandemic has altered the

trajectory of netflix. but in the wrong term, there will be several winners, and netflix is one of them. >> cynthia, you've been doing remarkable reporting on netflix, how things are shifting, changing and maybe how they're not changing >> this company has been a thrill ride to cover ever since it arrived in certainly the last ten years as it set about just reorganizing the landscape i think what rick said is absolutely true. for the broader entertainment industry, the question of oh, my goodness, is netflix plateauing at something that's a lot lower than 12 billionish global subscribers. that makes the terms of that business very different. one thing from the creative community's point of rue that will be very interesting to see when they have their earnings is, were they being overly conservative with that warning of the q2 loss that could be as

high as 2 million. was that over, you know, was that a classic case of managing expectations so they can beat that in a couple of weeks? i think that's something that the creative community is very, just like investors, is very interested to see how much does that, did that warning indicate a plateau. >> is your sense, by the way -- is your sense that all of these other companies which were chasing the netflix, sort of fever dream, that they're going, that they're stopping that chase in or that they've shift thad chase? and does that, then, create more opportunity for netflix in certain ways >> it's interesting, you know, figuring out where the content, where the rights are is very much being a three-dimensional chess. i think that, i really think that they have some work to do as rich said, on the content side with the creative community, and i think they have some work to do, some of what

made netflix so revolutionary may be in this, in a more competitive streaming environment, may actually be holding them back. so what we do know is internally, there is a lot of soul searching, a lot of very intense conversations about where the future, where netflix is going >> rich, on our screen right now, i don't know if can you see it we have walt disney on the list, warner bros. if could you own one, what would you own right now? >> if you look at the trajectory of netflix, this is still the dominant player. it's not a question, andrew, when you look out over the next few years, remember, netflix is still almost 30% of time spent streaming on connected tvs is netflix. disney, for all of the success and fanfare, disney plus is like 4% add in hulu, you're 15%.

netflix is the dominant player in the way that tv is shifting has crisis of confidence absolutely has there been more competition? sure i want to follow up on your question, andrew, because i think it's the right one in a weaker economic environment where inflation is having its impact rates are going higher, definitely the consume iris weakening and advertising economically is slowing, you're going to see more cord cutting, weaker advertising, and it's going to be very hard for us to believe that all of theis companies that have been plowing into streaming, taking all of their good cash flow as they've been growing and burning it in streaming, it's hard to imagine they're keeping up that pace in streaming when their core is suffering. i think it's a benefit to those focussed on streaming and don't have those legacy pains that i think the industry is going to go through that's a very big topic to watch for, and potential catalyst, not in q2, but as you move through

the year in netflix. >> cynthia, we've got to run but play the chessboard, the merger chessboard. we have this conversation a year or two from now. this administration will not allow any deals, but maybe i'll call new 2026. who's together, who's not. >> for sure. i think the, one of the biggest things that also investors are going to want to hear about is, the idea of a lot of people in hollywood and television are talking about this, the idea of bolting on an ad sales division, like this move into an add tier is going to require so much investment from engineering to human labor that they need to pull this off, it, that's really going to be, you know, could be, it's the kind of thing, too, you don't just bolton an ad sales division, but perhaps that might spur some m&a as you said. >> i don't think paramount will be a stand alone company,

andrew >> paramount's not a stand alone? >> in 2026, no way >> have a great three-day weekend. i don't know if you guys have a movie to watch do you have a recommendation for us, streaming or theater >> i can't believe you're not watching "stranger things part two. >> i just wint down the rabbit hole of "severance." >> rich, "the old man. lebowski unchanged, man. >> you should watch, "severance "s is a really good show on apple tv muss. >> i don't know about "stranger things", dude, how many times do strange things like that happen, know what i mean >> joe, i thought you liked "stranger things." >> no, i don't i like the old man, jeff brinls. the travel crunch. we'll look at key airports and highways as americans travel for the holiday weekend.

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be joining 42 million others who are doing the same thing a live update on how high gas prices are impacting weekend plans, straight ahead. plus the ceo of price line talks air travel chaos and how the travel industry is handling the summer surge in customers as the second hour of "squawk box" begins right now good morning, and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square, i'm joe kernen along with andrew ross sorkin becky is off today the futures are worst today than they were since we've been on. they were down a hundred when i woik up. not a great start on a friday. interesteds are, they not as low

as 296 on the ten-year you can see now, 295 growth worries, recession worries as the fed has gotten more aggressive. some would say too late. and need to be aggressive. oil, still around 110. i see mostly four, four handles on regular cash for most of the time i don't know if you filled up recently, or, sorkin, but it's 4.09, 4.95 it looks like it's just the slightest bit of moderation. and check out crypto on this, on this canada day. canada day what canada day i love canada. i love canadians and kristine is going to be on in a second. and she reminded me that today's canada day >> i didn't know >> anyway. >> july 4th.

>> you're undercutting, you do it right before july 4th >> this is how i'm coming on yeah, 1867 >> let me just say one thing, paul hickey, he spoke the second half of 1970 >> i want to know what happens >> 27.6% gain. >> in the dow? >> i think the s&p >> s&p >> but if it was down 20, 26.7 does not get you back. >> true. [ talking simultaneous ] >> we're saying we're talking about 1970 a lot >> in the meantime, we're going to talk markets. we're also going to talk about canada day, because kristina is here to join us with that. she's in the house in person >> in person >> nice to see you

>> i'm actuallygoing to start out with some good news. the first half of the year is over we talked about the s&p 500 had its worst performance in 60 year i think joe, maybe starting the second half with futures in the red citi putting out a note today that they don't think, quote, high recession likelihood is priced into equities just yet. utilities the only sector in the green, as investors rotate into defensive names like hess and devin energy fed ex-2% lower, on a downgrade, despite the ceo thinks the company's full-year guidance is a little too optimistic. hence why you're seeing a little bit of a downward trend. but we are just around the corner and they are lowering price targets for all banks, and a

buildup in credit losses but we're left on a positive tone, saying the second half of the year will turn easier. lastly, we got a big downgrade for chip maker micron, causing shares to drop right now i was on the earnings call last night. major points, china lockdowns did hit them back. demand is dropping for pcs, and customer inventory levels may reset in the second half of the year there you have it. happy canada day >> so are you, we want to talk markets, but will you till us about canada day >> three territories joined together in 1867 to form canada. we are still part of the commonwealth, much to be debated on that. >> today is the day. >> today is the day. it has nothing to do with the fact that july 4th is a few days later. >> since 1867. >> and we have not been talking about that enough. >> avenue year >> every year.

>> it just shows, we need to get out more >> we're going to wish ah happy canada day, kristina as well as a happy july 4th doubleheader for you >> hey, i get to celebrate twice. tonight and monday i'll be back next hour >> you're coming back. that's good. we should be off today >> we should >> we're off on monday >> yeah, well, we should be off for canada day >> oh, yes >> is there any holiday that you would say we shouldn't be off for in is there anything too, no, that's a big one investors are no doubt happy to be putting the first half of the year behind them, but it appears that they're beginning the second half at least so far this morning could be not much different than the first karen kavanaugh, chief investment officer at carolinas wealth management, part of

ameriprize any help for a 1970 second half? 26.7%. do you think we could do better and get some of the losses back the remainder of this year, karen? >> i think we can do better. it has been a miserable first half of the year, but let's take a look at earnings, it's always about earnings the estimations may be a little bit too rosy, and we're expecting that to come down. if they can continue to grow their earnings, then i think that can give the, i think the market will get their sea legs back a little bit and we can have a better second half of the year >> we are at this point underestimating or overestimating how far the fed has to go to accomplish what it wants to do? >> i think probably underestimating, because the parts of the inflation that are persistent, labor, housing

costs, those aren't going away look, also a lot of people don't realize that china is just coming back online, and there's going to be a surge in demand for commodities. so i think the fed has a ways to go, and they've pretty much said hey, we're just concentrating on inflation, and we're not even thinking about employment. so we are going to see unemployment move up so i don't think that, the fed is going to really change market sentiment. if we do see a strong earnings session in the second quarter that could shift the tide a little bit and investors could say well, you know, things are bad and the data seems to be getting worse, but we expect that we know the fed is out there to tamp down aggregate demand but if earnings can continue it move forward, that can really be a comfort to investors in that maybe the whole world isn't ending and there is some hope. so i think the second quarter could be better. >> and you are not pessimistic about what companies are going to be reporting and saying over the next three weeks?

>> i am. i think that the earnings estimates right now are a little bit suspect. i'm looking at it with a jaded eye. i think we are going to see some pullback but remember the first quarter, we got earnings about 8%, 9%, and they came out at 11% so there could be some tricks up their sleeve some of these companies know how to navigate in these kind of environments, and those are the companies you want to own. that's what investors should be looking for. and there will be some of those. we know in two weeks we'll start to get the data, and right now we're in a little bit of a data vacuum, we're waiting for earnings so we're really focussed on the fed. and i think it had be a welcome change to be looking at companies, company earnings and boots on the ground, what's really going on in the rile economy rather than what the fed is doing or thinking about doing. >> just real quickly, we got to go 296, 295 on the ten-year when the fed starts, you know, makes its next moves, are we

headed right back town 3.5 or is the ten-year really telling us something about the prospect for economic growth could we stay below 3 fien the fed continues to raise >> i don't think so. i think the bias is still to the upside, but then we will get to that point if rate tick back i think we should end the y, investors are not so sure about the economic growth, and so we'll probably stay in this range of 3 to 3.5 for the rest of the year. >> very food karen kavanaugh. which carolinas, where are you right now? >> south carolina, the real carolina >> those are fighting words. very courage on my mind a lot. i like them both >> okay, good, good. meantime, retailer kohl's

are out with a statement saying it's in the best interest of shareholders to execute a strategic plan on a stand alone basis. sources had told cnbc late yesterday that kohl's had ended takeover talks and that there are specific obstacles to concluding a deal it has cut current quarter outlook. among the actions kohl's plans to take, it will move ahead with an accelerated shares purchase program and plans to open smaller stores over the next four years we'll see whether another takeover bid is in the offing. this is one of those, i don't know if we have a longer stock chart to look at a company that's had a tough, tough, tough, tough time. meantime, new hires are increasingly looking at workplace values in job

searches sharon epperson has that story and this weekend expected to be the second busiest for travel since 2000, since 2000 what you should expect if you're hitting the road or the skies over the next several days, it is all just ahead. "squawk box" coming right back

mom: how was school? dad: wow!

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numerous surveys show that job satisfaction increase when employers look out for more employees' values. >> reporter: in his recent job search, tyrese thomas focussed on salary and benefits, but only at companies that shared his values >> innovation, impact, equity, things at that are incredibly important to my. >> reporter: thomas was an intern at a tech company in the summer of 2021 in the midst of blm protests and raging pandemic >> it was important for them to show their alliances with these organizations and individuals working for them so it was supe important to find an organization that aligns with my values. >> reporter: workers are split

on whether they want business leaders to speak out more on social and environmental issues, including constitutional and productive rights. research finds that addition these issues can influence a company's ability to attract and retape talent. paul wolf advises on workplace strategy and development in you know, they're not always going to agree with you, but you want a company that's going to listen people want to feel seen and heard, even though the company may not completely agree with them all the time. >> reporter: a recent survey finds more than half of u.s. employees say they would be willing to take a pay cut to work at a company with values they agree with. 56% wouldn't consider a job at a company that has values think disagree with. >> there is more of a social lens put on companies on what they're doing and what they stand for. >> reporter: thomas just started his first full-time job at an e-commerce company he's hoping his generation can

change the way business gets done >> find and pressure organizations to kind of live up to, you know, these expectations you can have significant results for ourselves, our careers, our pyres and really the future to come >> reporter: hr experts say firms most likely to succeed are ones that set clear goals that align with the values of the company and its employees, joy >> it seems like it's kind of a workers' market right now, sharon there are times in the past where you'd be glad to have a job. period and you don't have the luxury of thinking about these other things so i'm wondering, you know the fed keeps raising, the fed tries to raise unemployment. i don't know whether everybody's going to be able to be quite so picky about the place that they would actually join. this is a luxury, i think, of a strong employment market >> well, i think for some

generations it feels like a luxury, because that was not the way things were done you were just happy to have a job with great benefits and great salary, but now people are being very in where they want to work o it is important to share what their mission is and be willing to have a dialog about a diversity of opinions, not believe in group think, but really want to hear from all of the employees and what they're thinking without the fear of retaliation or anything happening to them if they do speak their mind >> research, what's most important? which values are most important? i guess i'm going to withdraw my application at the asbestos plant, probably i. >> it's all about well-being, you know, and you're talking about, you know, worker safety's also very important. but well-being is actually outranks wages in many of the

surveys we're seeing that's very interesting, because it's important for people to know that the company care how they're doing as a whole person in addition to paying them fairly, and of courseworker safety and as we're looking at some of these political issues, whether it's constitutional rights, reproductive rights, that is not as important to people to hear their employers speaking out about that necessarily they want to be safe, make sure their well-being is taken care of, but as far as speaking out about political issues that's not a high-ranked thing. but if it's something they disagree with, they're not going to look at your company anyway >> online gambling, should you file good about -- >> if you work at draftkings for example? >> exactly or think of some other -- i don't know that's what i was starting to think about. we all know what the virtuous he

places are what about the ones where you go, wow, i feel horrible about myself af day. >> diversity of opinion. coming up on the other side of the break, the ceo of price line is going to talk about the fourth of july booking expectations, the surge of travel and inflation check out the futures right now. we are in the rid. dow looking like it would open down about 86 points s&p off about 12.5 points. squawk back after this time now for today's aflac trivia question. who said this inspirational quote? rule number one. never lose money rule number two, don't forget rule number e.on the answer when cnbc's "squawk box" continues the aflac pre-pain show. aflac! paul is about to suffer a shelf-inflicted injury. luckily, aflac will 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!

now the answer to today's aflac trivia question. who said this inspirational quote in rule number one, never lose money rule number two, don't forget rule number one. the answer warren buffett still to come this morning, the ceo of price line's going to join us to talk travel this busy holiday weekend as prices and

bookings surge, muss, dr. scott gottlieb on the spread of omicron as covid cases rise. stay tuned you're watching "squawk box," and this is cnbc

welcome back to "squawk box. american airlines has offered pilots more than 17% it comes less than a week after united airlines reach add deal for a4% wage american's pilot union is reviewing the offer. and we'll speak to the spokesman in just a bit. >> do you know what they make? somewhere between25,000 and $162,000 per year. and it has to do with regional versus national. has to do with how long you've been there, all those different things

you know this guy coming up here >> the greatest. >> the former cnbc-er. he hit the pilg time >> you know how he ends every segment? reporting for nbc news and then you know. >> and then you know why he's been so successful >> because you mentored him. >> in addition to that didn't you go to the university of colorado, aren't we both buffalos? americans are gearing up for a busy holiday weekend. nbc's tom costello joins us with more i don't want to digress, this is important stuff, but i would talk about, ucla, usc, you believe that you remember when we were big eight at, and then they went, so we went the wrong way. we went out to the place that's dying now. >> they went to the pac-10

i don't get that and now i know where's my breaking news music by the way i should have some kind of stinger music, right to give me some oomph to this report i want to hear it. >> there we go >> thank you >> got the logo. you just got the animation >> all right good, thank you very much. listen, bottom line, this is a pocket book issue. everybody cares about because everybody's trying to get time away, right? so good news if you are traveling. doesn't matter if you are on the roads and the skies, blue skies along much of the country. that's going to help we've already got 200 flight cancellations on top of 450 or so yesterday but the vast majority of people, despite $5 a gallon gas more or less, they are in fact hitting the roads. for americans celebrating the fourth away from home from the highways to the skyways, the great escape is well under way and for some families, this

independence day may also celebrate a freedom of sorts from covid, with the youngest kids now eligible for vaccines nearly 48 million people are traveling over this holiday, a record 42 million by car despite record high gas prices for the fourth of july weekend >> gas prices are insane >> reporter: but even as drivers pay a national average of $4.86 a gallon for regular, for many families planning to take a trip this summer, going by car may still be the most affordable option for a vehicle getting an average of 25 miles per gallon, a round trip to the grand canyon just over $120. charlotte to the outer banks, $140 kansas city to denver, just over $200 but factor in meals and hotels, and it all adds up >> getting there and staying

there, it makes more sense to stay close >> reporter: the flying public is also paying more. >> for fourth of july weekend, travelers paid an average of about $440 up 45%, compared to what they would have paid in 2019 >> reporter: and not just on airfare. >> the cost to rent a car this year is 70% more this year than it was in 2019 rental car prices are bonkers. >> reporter: on thursday, delta pilots in the midst of a labor contract dispute picketed several airports nationwide saying they're overworked, as airlines, some of which have trimmed back summer schedules, face an ongoing pilot shortage the wildcard this weekend and beyond the weather. >> i think it's southeastern u.s. >> reporter: all of it creating a rocky travel season through the fourth and the summer. >> it's going to get worse as the weekend comes on, i'm sure

>> reporter: the delta pilots are not striking they're informationally picketing right now. those are off-duty pilots picketing, because they want a better contract and they're tired of the ot. one last note here, this is the day that american and delta and united are trimming their schedules going forward for the rest of the summer, trying to right size their schedules with what they have in terms of pilot availability people would argue it's a little late, but that's what their hope is for the rest of the summer. guys, back to you. >> there is competition among private, i guess, companies as well, that, is, do we, are we going to see net jets and wheels up and all these other, do they pay more or, you know, are there reasons why you could be in a bidding war with those companies for pilots >> reporter: listen. every pilot right now is in high demand, were it's a private, smaller company or the big

airline. every single airline ceo has come on your air, come on nbc's air and said we don't have enough pilots. they messed up they all admit they messed up. they simply sold a schedule to all of us and yet they never had the pilots to fill the schedule. and they blamed fact that they had early retirements. >> okay, you knew that you knew that a year ago that you had early retirements, and they had people who went on leave, and yet while they were on leave, apparently, they were not maintaining their certification, so they could jump right back into the cockpit. so this is, there are many reasons why this is happening, but you can imagine there are going to be some congressional hearings with ceos answering tough questions here >> hey, tom, a lot of airlines as you know have been pointing the finger back at the faa saying that they don't have enough, that they have a staffing problem fair complaint not? >> reporter: yeah, there is some truth to that. the air traffic control problem, staffing problems, have really

been in florida. for the most part the rest of the country i'm told, they haven't had huge staffing issues listen, every company, every agency occasionry has sick cases, people are out because of covid. but the bottom line is, the atc has been surging now, more controllers in florida we have 156% increase in passenger volume in florida over 2019 156% so all the airlines are trying to accommodate that, and faa trying to accommodate that, and they've got more military ops off the coast. spacex flights there are many, many reasons for this, but i think that's a small nugget to the problem. the biggest problem is the staffing with the airlines >> okay. >> tom's got to do the signoff though >> okay. >> can you do it for us, tom >> reporter: the what? what do you want me to do? >> tom costello, nbc news.

you know, the full >> the full monte, but just the full signoff >> reporter: i'm not going to do the full monte on tv tom costello, nbc news, washington >> whoa! >> there you go. >> we got a pro on the air there. we do. >> that was so natural >> reporter: have a great weekend. >> three-day if it was canada day, we'd have four, but we're cheaping out on that higher airfares and hotel costs are not slowing down the summer travel surge let's welcome price line ceo brett keller thanks for joining us. and in the past, you would almost say that when people want to take a vacation it's kind of been elastic always through ups and downs of the economy it's important i would think that it's even more important at this point given that we've all been cooped up for a couple of years so it seems like you could even have even higher prices wouldn't cut down on people's plans

>> re >> well, that's true, at least from what we've seen it's going to be an extremely busy fourth of july weekend, and i think that sets up a very busy summer whether you're flying or driving. we've seen the numbers flight prices up 29% year-over-year hotel prices up, you know, in similar fashions, close to 20% year-over-year so consumers are swallowing those, eating those prices and they're determined to travel people want to be entertained this fourth of july. it's evident by the cities they're traveling to they're looking for music shows, fireworks, you head to las vegas, new orleans, new york all the big markets where would you expect people to travel in a healthy economy. >> it's not across the board maybe it's across the board for travel, but there are other pockets in the economy that don't look like they're holding up quite as well is that fair to say? and we do have the fed voflted

now. and we do have, you know, we're seeing weakness in bond yields, strength in the price, the ten-year's below 3% again. which seems to indicate concerns about growth but you don't think that that's going to move over to the travel side of things >> well, listen. it's a healthy travel economy at the moment, right? and there's a lot of signals in the market telling consumers that they need to pull back, but clearly right now at least travel is being prioritized throughout the summer, and we'll have to see what happens as we move out of summer and how consumers react once they have their summer vacations but for now, clearly experiences are at the top of their list, and as can you see, we're looking at june occupancy levels from market data, you know, hotels are almost 71% full and that's a significant gain over last year, and we're reaching close to 2019 levels. obviously, the airlines have had to pull back on supply so there's fewer planes in the

sky. yet they're parking people in, up to 88% load factors so 88%, that is a very full flight schedule, which means there's a lot of bumps and movements that impact consumers as they travel through theis holiday periods. but, you know, consumers are going to have to obviously address these high prices, and there are an um in of things historically consumers have done to dial with this. they will do things like trade down when it comes to the quality of the hotel they'll stay in. they'll invest less in theantainment but still take the trip with their families consumers make adjustments in the way that they travel >> where is it now is it a ritz-carlton, four seasons, st. regis market? or is it a, my personal favorite is a red roof inn or days inn or something? it's strong across the board >> it's strong across the board. but what we have seen in the

higher star categories, these are conscious choices that the hotels are making. for example if you're a five-star hotel, you're intentionally not filling up your hotel to maximum capacity you want to provide the best service possible with the staff that can you actually bring on board. what they have done is reduce occupancy at the highest star but are charging significantly higher prices for people to stay in those properties. hotels are taking different strategies when you look at the two, two and a half, these are the hampton inns, extended stay properties those are maxing out people are relying heavily on those types of properties to take their vacations, especially road trips, where they're looking for properties along the highways that can accommodate them as they move in between destinations >> it's the same phenomenon that you see in restaurants where you can't get a table. then you finally get one, and there's tables all over the place because they can only have

enough staff to give good service to three quarters of the restaurant >> exactly you describe the same thing in the hotel. they can't book all the rooms, because then they wouldn't give five-star service? >> exactly that is exactly right. they want to provide the best service possible so they intentionally limit capacity for those properties. >> wow >> when is that going to loosen up, brett? >> well, you'd think by now, in terms of where unemployment is we'd be reaching a point where we can provide the kind of service across the industry that's needed. but as you know, it doesn't matter what the role is right now. there's compression in the industry and we can't get the service we need, and i was on a flight one week ago and sat at the jet bridge for an hour, waiting for an equipment operator to show up to push the plane back that was all we were waiting for. and i think that's indicative of what's happening in the industry today. so people are frustrated with that, as long as you understand moving into this that there's going to be a lot of bumps along the way.

we still rely heavily on the airlines to get us where we want to go. and there are sites like price line that can help consumers stay >> how do you handicap the potential for more regulation among the airline industry, maybe the hotel industry, but particularly the airlines, given the kind of cancellations you're seeing, the delays, the frustration that consumers have, whether you think that we might, you know, move towards some of the, they, if they delay you, they give you vouchers, they cancel you, they payyou out. it changes the entire sort of mind-set in dynamic with which how airlines in europe work relative to the u.s. i'm not saying it's a better model but suggesting that i think there's a conversation that's already started in d.c. about that at the same time that we're seeing the jetblue, frontier, spirit air transaction and whether something like that will get approved in this

environment. >> you know, we're obviously looking at this in a lens right now through one of the most challenging times in airline history. and the airlines didn't assume a year and a half ago that they would be at this type of volumes just a year and a half into, you know, post covid so i think we need to allow the summer to play out, and i think you'll sigh that things will start to improve as we move through the busiest demand periods here, and there's just more time for the airlines to get the systems back in place. it's also the tsa. it is the rest of the travel ecosystem that supports the airline to hip drive a healthier travel experience. and, you know, certainly regulation could come through, but in the end, regulation may hamper the consumer's experience in terms of having access to the number of flights that we benefit from here in the u.s >> okay. brett, thank you appreciate it very much. enjoy the three-day weekend.

meantime, when we come back on the other side of this, dr. scott gottlieb's going to be with us and talk about the latest surge in covid and pushing drugmakers for vaccines in the fall. we'll check out the winners and losers in the s&p 500.

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ftx nearing a deal to buy block five for pennies on the dollar, according to multiple sources who say the term sheet is expected to be signed as early as today ftx could pay a 99% discount, below block five's last private valuation. others say the price could be close to $50 million both companies declining to comment on that cnbc report. you don't want to miss this tonight. there is going to be a special edition of kryptonite in america. it starts at 6:00 p.m. tonight they'll walk you through what has gone on in crypto this pass year and the winter, the crypto winter and maybe whether a summer is upon us or not check it out this evening. when we come back, "ua bsqwkox" returning with the one and only

dr. scott gottlieb we'll talk covid and so be other. hey lily, i need a new wireless plan for my business,

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the former fda commissioner and serves on the boards of pfizer and illumina. it's great to see you.

we are seeing an increase in covid. what do you tell families to do, not to do. you have so many who've had it and who haven't had it it's hard to figure out how to think about it >> well, look, the risk has definitely come down this terms of prevalence being all around the country. especially for people who have been recently boosted. a lot of people have had this omicron infection as well. they're recently recovered and going to have a high degree of protection cases of b.4 and 5 are spreading light right now in populations that have been vaccinated. that includes southwest, san diego and the pacific northwest. those are the places we've seen the highest incidents of b.4 and b.5. they're spreading in people who already have preexisting immunity and they seem to be able to pierce the immunity

required for b-1 but people with a recently-recovered b.2, they have better protection against b.5. in the northeast, cases are going up if you look at new york, new jersey, connecticut over the last 14 days, cases are up 5% to 10%, and prevalence is largely low in the northeast, mid atlantic places that had big b.2 waves. >> for folks who've had it in the past couple months, how much time do you think they really have there's a view if you've had it, two or three months, four months, really, do you a lot of people don't know which variant they had >> yeah, look, it depends on which variant you have if you've recently recovered from an omicron infection you can have a reasonable degree of confidence you have several months immunity. people for example who were

infected with delta seem to have a more durable immunity than people infected with omicron people with the b.1 variant, people infected early on, they seem to be less-well-protected against about the p 4-b.5, which is the variant now spreading in parts of the country and people believe will become epidemic by the fall, that evolved from b.2. >> let's talk about the vaccine come fall. what we all swants a vaccine that would protect us effectively against infection if possible the vaccine, as far as i understand is based on b.1-b.2, not b.4-b.5. what kind of protection do you think people will have >> they will be reformulated, the direction does appear to be that they want the manufacturers to reformulate a new vaccine

based on bp 4, even though they prepped the vaccine based on the old ancestral strain and a combination of b.1 on the presumption that that is going to protect better against b.4-b.5 heading into the fall. we need to ask the question whether we're too late with these reformulated b.4-based vangss to get ahead of the late summer in the south and early fall in the res of the country the old vaccine does provide some protection against b.4 based on our assumptions, not as got. probably the, hopefully the b.4 vaccine will be superior and if you're a 57-year-old and it's august and you're six or seven months out from your last booster, what do you do? wait until october, november i think they need to provide guidance to that individual.

because you don't want that individual heading into a wave of infection this fall without any opportunity to get boosted ahead of a big wave of infection. >> the conundrum is going to be which booster do you take and do you wait for the newer booster which you're suggesting is going to take a little more time to manufacture. >> that's right. if we would have gone with the bivalent vaccine we would have been able to get people boosted. now if we're going to wait for a b.4 vaccine it may be more protective for b.4, but in some parts of the country, b.4 will have already swept through those regions. we're trying to balance a careful balancing where you want the most effective vaccine to people, recency matters, even with the old vaccine, based on b.1 would afford a higher degree of protection. people will have to wait now >> realistically, when do you believe it will be available

you're saying october-november, when is that going to be divvied up by age group again how do you think that works? >> the manufacturers have said they can have a vaccine available by early october, late october. so assuming that you have a vaccine available by early october, even if it's authorized quickly and distributed, we know that vaccines don't make their way into the supply chain on day one. not everyone can go and get vangted on day one rolling out that vangs campaign, that's going to evolve over the month of object and november my concern is that b.4 had have swept through many parts of the country right now. parts of the south it will have swept through. a lot of people will have to face this b.4 wave without the benefit of that vangs. by delaying it, yes, we probably will acquire a vaccine that is more effective but it won't be in time for many parts of the country. >> how protective will it be, do

you think? >> certainly more protective than the existing vaccine. it's not going to restore 90% of infection. we're leaning on evidence in test tubes there's more evidence it's going to be more effective than the b.1 vangs but not restore the original protection against the original strain. >> we got to get bang to 90, scott. we got to work on it meantime, we got -- have a great weekend. coming up, retailers kohl's saying it's in the best interest of shareholders to execute its own plan kohl's had ended takeover talks with vitamin shop parent franchise group. kohl's now says deteriorating financial and retail conditions presented significant obstacles to an acceptable deal in its current quarter outlook.

kohl's ceo michelle gross will be joining us in the next hour plus hayman capital's kyle bs es will give his take on the markets, china and much more "squawk box" coming right back [ growling ] [ screaming ] [ growling ] shh. nice and quiet. hey! look! it's your mom! hot dog? [ growling ]

good morning. >> welcome to the third quarter. futures pointing lower as the stocks started out the year with their worse performance in half a century. breaking news, kohl's officially ending talks to sell itself and cutting its outlook as consumers pull back on spending in just moments, we'll speak live with the company's ceo. and americans are getting ready to travel this holiday weekend in record numbers despite stratospheric gas price. we'll talk about when we might see some relief. final hour of "squawk box" begins right now good morning and welcome to "squawk box" right here on cnbc. we're live at the nasdaq market site becky is off today ahead of the

three-day weekend. u.s. equity futures at this hour, we do have red on the screen moved around all morning 22 points down on the s&p 500. naz deng off close to 100 points, dow now down about 150 points we should also show you treasury yields, though, if you're looking at mortgage rates, the like and everything else, ten-year is now a 2.939 jump >> and foong parent meta warning employees to expect a tough second half of the year as the economy wobbles. and the company deals with challenges to its own advertising business reuters reports that ceo mark zuckerberg told employees in a weekly q&a that the company has cut its engineering hiring mans this year by at least 30% and said meta's going to leave some positions unfilled and the quote that we talked about earlier that really stuck out from this, when zuckerberg

said about employees, realistically, there are probably a bunch of people at the company. >> i've been thinking about this line >> who shouldn'ten here. yeah what did welch, remember the late great jack welch used to say, if you're in the bottom 10%, we're going to find you, and we're going to find a new bottom 10%, because you're going to be gone it seems harsh, i guess. but, you know, it's not a non-profit organization. >> there's a whole bock about jack welch and this critique, but the flip stied of that, people say oh, that's terrible the truth is, if you're hiring somebody, think about this if you're hiring people, constantly hiring people, do you think you're 100% right about who you've hired >> no. >> never >> never >> never

if you're batting better than 60%, 70%, you're probably doing pretty well. which means 20 to 30% of the people are the wrong fit for the hiring you're doing. >> schlangers. >> no, if you say i'm going to take the bottom 10% by default >> right >> you know, i don't want to say, i just, i'm pushing back a little bit on the 10% thing. i know that seems so harsh and draconian, but at the same time, people have to recognize the truth about what happens on the hiring end >> my view is that zuckerberg is like now looking at what he said about the metaverse and saying, what was i thinking? i'm going to need 30% less, because this is like, i'm going back to facebook i'm going back to social media, because this is like a fool's errand i know you don't think that necessarily. >> no, by the way, it's not

clear to me that mark zuckerberg and facebook are going to be the winners of the metaverse either, hard to know meantime, let's talk about shares of micron, because they're falling, despite a big beat on their earnings before. can we get shares of micron up on the screen? because they had that bottom line beat on the third quarter, the ceo warping the demand environment for the industry has now weakened in response, it's taking drastic action to try to moderate the supply, growth for fiscal 2023 and slashing guidance. seeing revenue about $7.2 billion versus estimates of $9 billion >> let's talk about this other big news story of the morning. kohl's abandoning talks to sell itself to franchise group saying it's in the best interest of shareholders to execute on a strategy ink plan on a stand alone basis. they're moving ahead with an accelerated share repurchase program and a plan to open

smaller stores in the next four years. joining us, good morning to both of you >> good plorpg everyone. >> who wants to take it first, the chair or the ceo >> how about i'll take it first on process as we release in our ak, after an extremely exhausting months, we had inclusivity with frg. the ex-exclusivity expired we gave frg a couple more days to try to work through that period, ultimately, both the price offered and the in our judgment and the judgment of our add visors, the board voted to

terminate the process and continue on a strategy ink plan. >> so michelle, i don't know if you want to add to it, but i understand what you're trying to do here. the question i think for some shareholders is going to be, you know, what is the upside from here, doing it as a stand alone company. >> yeah, you bet i'm happy to jump in well, first, what i'd just call out is we all know that we are in a very uncertain and unusual time there's a lot of pressure on the consumer the retail sector is feeling that we have to remember that this is a moment in time and kohl's has been through tough environments before. we have a very strong balance sheet. great cash flow. we will navigate their time and we're certainly doing that as we sit here today through a real big value player in amplifying that message, but that doesn't

at all change our conviction in the long term strategy of this company. now we are pivoting ourselves to really stand for the active and casual lifestyle and in the center of that transformation is our partnership with sephora we are soon to now be opening, we'll be at 600 doors here in the next couple weeks. we've opened that in a very rapid pace 850 by next year and these stores are doing really well. sephora's doing great. we see that as at least a $2 billion opportunity. we're seeing new customers come in we're seeing a halo effect in those stores those stores are outperforming the other. so all of that is ahead of us. you might remember we had a couple hundred stores, you know, over the course of the last few months so we're ramping, and we're really excited about what that means. so, again, we will navigate the short term, but this is about long term, and those signs are really positive. >> hey, peter, process question.

you're looking at the stock down about 18% this morning on the back of this news, is there any argument to be made that there should have been a deal and it should have been done very quickly? >> yeah. >> is that even possible >> again, i'd reference you to our ak where we've gone out of our way to detail at length all of the steps that were taken from january on. i think the shorter answer to your question is a reasonable person will conclude after that that the board exhausted every possible outlet. we got to a period of exclusivity. it's a two-pronged approach as to why we've ended the process we've both felt that the price offered was too low and we also believed that that trance action could close the complexity the papers that we received with that trance action led us to brief certain think this environment that we were trying to catch a snowball going down a hill so understand that you cannen

second guessed all along the way. in the end, i think when somebody reads the ak you'd be left with no other conclusion that we've done everything at every point in time to maximize value for the shareholders >> for the shareholders looking around saying this is at 29 bucks, how are we going to get it to 60 bucks, what are you tilling them >> we believe strongly in the plafrn $630 was never a plan on the table. we did not receive an offer for the company at $60 to be clear, when we entered the exclusivity, that was not a deal that was ever offered to the board of kohl's. >> michelle, from an operational tanned point, one of the things you're announcing today is this small-store format tell us how that changes the dynamic and what the costs of putting that together will be. >> great questions so as we look ahead, as i said, we have great conviction that we will grow their business over

time a lot of that is going to happen within the existing stores we have and the investments we're making there sephora, and it's not just sephora. we're also making other changes around the store to deliver a better customer experience we partner with some of the most iconic brands in the world, nike, levi we just brought in tommy hill figure ir. of course sephora. and we've been testing new small irformats. there are still places across the country that node a kohl's smaller, in different kind of neighborhoods. we're deploying a lot of localization we'll have one of our newer stores in tacoma, washington which will be all the things you love about kohl's but more modernized and highly localized. we tested this it has a really nice return and gives us the confidence that over the next four or five year we can open a hundred of these stores that will contribute to the growth that we see in this

sephora into our existing base >> how concerned are you that some activists are going to arrive on your door and say we got to come up with a different plan if you owned the stock five years ago, it's base lit same price as it is today >> in may this board was overwhelmingly voted to proceed with executing on the strategic plan and exhausting all other alternatives so we live in a world where at this particular time we have a board that's been endorsed by the vast majority of our shareholders certainly, it's always possible. we've engaged with our shareholders on a very significant basis over the two year we've had activism. we are always interested in hearing from our shareholders, activist or not. >> and finally, michelle take us inside what you're seeing from the consumer you do have your finger on the pulse of what i think we're seeing and a number of your competitors have also talked about the challenges that we're

seeing in the economy. what are you sighing >> yeah, we're seeing that as well clearly there has been a shift over the last few months, with additional pressure and uncertainty with the consumer. we're seeing that in retail. we're seeing that in many business, and we're seeing it in kohl's and really the responsibility for us is to make sure that we can be relevant and adjust based on how consumers arive willing their lives. look at what they're paying for gas. kind of within those pressures, yes, there's still an opportunity to come to kohl's and buy apparel and home goods, else one of the things that et ises us apart is our really distinguished brand portfolio. people want to buy the iconic pair of levis jeans or nike or some skin care from sephora, but yet they might trade-off and buy one of our private brands in sonoma, fantastic brand,

actually positive comp last quarter, jumping beans, great kids brand, kids grow. families still need to buy clothes for their kids during a recession. so we've got both of those offerings, and we're making sure we're elevating the value message. we rolled out an updated loyalty program giving more kohl's cash to our customers they love kohl's cash especially during their time of year, while we expect it will be tough during their period of time, we will update our plans to make sure we can be the destination for our customers and new customers during their trick eye time for customers >> okay. michelle and peter, want to thank you for joining us, especially on this tay when you've had this big headline, we look forward to following your progress, wish you lots of luck and hope you guys have a great july 4th weekend >> thanks very much. >> you too coming up, ms. s of americans, trillions even maybe not. getting ready to drive and fly this holiday weekend we're going to bring you a live

report from one of the nation's busiest areas. then a union spoingsman for 15,000 pilots helps us understand why airlines are can selling so many flights and when that might start to change and loosen up. here's a live look at lagarde yeah's airport stay tuned you're watching "squawk box" on cnn benjamin

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a near record of americans are expected to travel this weekend for the july 4th holiday. nbc's ron allen joins us along the way. how are you, ron it's good to see you this morning. >> good morning, yeah. well, the good news out there is that there's no big morning rush hour here in new york. that's good. you can sigh the turnpike behind my things are buzzing along this is sort of the quietest part of the day. the worst time to travel on the roads is noon to 9:00. yesterday was also a pretty busy travel day on the road so things are kind of spread out which may help and that's a result of course of the fact that still a lot of people aren't going to their offices that much. so a lot of people working from

home so we may not have that traditional old-fashioned rush as we used to back in the old days but yeah, they're still expected to be a record number of people on the roads, even think gas prices are still at astronomical levels here. it's about $4.97 a gallon. if i said 4.70, that might be a rush the national average is about 4.84, i think. that's down a penny or so overnight and 15 cents over the past couple wiengs, so that's all good, but people are desperate to get out, and they're going to drive in record numbers. another reason for that is because there's chaos at the airports, as i heard you referring to a little earlier. united, dill at that, others are still can seceling flights so as the old saying goes, pack your patience, take your time, get where you're going to go safely, and we'll see how it

goes but, again, people are back out there trying to enjoy what's going to be a record travel weekend over the long july 4th holiday. be safe. it's going to cost you a lot but you'll get there and have a good time. so we'll see how it goes here at the moment, things are pretty quiet but, begin, it's the quiet before the storm back to you guys >> they tell me i can't talk go quakers good to have you on, ron allen meantime, our next gist has an inside view of how airlines are handling the crowds. welcome the captain, he speaks for the allied pilots union. we should mention that a new video viewed by cnn benjamin, american ceo said the carrier has now offered its pilots a 17% raise under the new contract want to talk about that and more with the captain good morning to you.

>> good morning, good to be with you. >> we want to talk about cancellations and everything, but we to want to talk about costs. i'm all for people getting paid more, but you guys have done an extraordinary job for your pilots that is going to get passed on to consumers by my math, you tell me if this is wrong a narrow body captain at the top of the scale is now going to earn about $340,000. that woulden $45,000 more than they did last year a wide body captain at the top of the scale is going to earn about $425,000 a year that would be a $64,000 increase. annually >> yeah, well mr. isom has provided an offer. we don't have an agreement what we're all fighting for is to have a more reliable airline and one that actually lives up to our passengers' deep investment in tickets to get them from a to b i just got back from flying this week, clear skies. it was an unmitigated mess

these passengers, 100,000 passengers this week at american airlines american in one tay had 44% of the cancellations. of the over 700 cancellations, 90% of them was because management couldn't connect the pilot to the airplane. this is a failure of the operation. it's got to stop it's got to get fixed. and i'm telling you, it comes from scheduling practices. they're pushing us right to the edge pilots are being pushed off. today's off, therefore causing fatigue. flights get canceled this solution runs deeper. mr. isom told us what he thinks. now it's time for him to listen to us. >> so what are you suggesting the problem is because very to say that a captain making $425,000 to most americans does not seem like the problem. >> you're focussed on the money. we're focussed on our passengers right now. and the problem is that they've sold tickets that they don't have the ability to fly. and mr. isom said in a quarterly call, we're perfectly staffed

for the summer he was wrong or they mismeasured everything bottom line is they're not getting it done. the answer is in the operation this is the sdeng summer we're focussed on getting these airlines rely bring and safely to their destination and right now not only are we fighting clear sky failures. we're fighting the weather, but we've got management not giving us the tools to get the job done >> are you trying to get more money for your people or just more people? it sounds like you need more people right now and i don't flow if that is a money story ultimately >> the story is they're underutilizing the pilots they have they failed to train us, keep us current coming out of the pandemic, and we're in the second summer of this. it's a failure to plan, a shortage of planning that's what we're foengsed on. the only way our company can return to profitability and be reliable is through us working with us. that is the answer

that is not happening now. and we have this stunning fourth of july -- >> this is the part i don't understand why isn't it happening and at the same time, clearly you're asking for more money nobody's going to have a problem with you asking for more money, but at the same time, as we're looking through some of these numbers it seems to me based on what you're saying, you need a lot more pilots to be hired. is that right? is that the problem? >> it's the chicken or the egg management has built to schedule and sold tickets for an operation they can't sustain and everyone's saying i don't have enough pilots to do it. you have enough pilots, you aren't utilizing us, and you've built a schedule that's not tenable. >> explain this, and i apologize if i misunderstand this. on one side you're saying you're used too much, that there's fatigue and a problem that the pilots are being overused. then you just told me that they're being underused. which is it? >> here's the problem. when you push us to that edge,

we have the faa-man taited maximums, we time out, or in the case of making a fatigue call, we're required to be fit for duty duty, that's a strong word we're not able to fly if we're not safe to fly. when management schedules us to that point, the schedule falls apart. they have pressurized this schedule and there are cracks in it >> isn't the answer we need more pilots then? >> i'll go with that, yeah bring them on. but mr. isom has said we're food on the main line here's irony they said they're short on pilots on the regional side, the smaller jets, the actual bodies. the worst cancellation performance is on the main line. they are not effectively scheduling us and utilizing what they to -- >> we got to go. would you, do you think the d.c., washington should be regulating the airlines in a different way to help passengers, frankly, so that these types of cancellations and delays don't happen and it

creates an economic incentive for the airlines not to overbook >> hey, when you don't perform, ssh's going to come in and help you do that. what the answer is, we're going to find out. hopefully washington's very interested and we're committed to getting this back on track again. >> dennis, we thank you. we do thank all the pilots, because boy do we need you right now. >> thank you coming up on the other side of this break we're going to tell you what chinese president xi just said then kyle bass is going to join us live as we head to a break. a few more market stats. take a look at commodities natural vlasic turning in its worst month in three year, copper more than a decade. cotton its worst since '95 wti crude oil had its ninth straight posite ivquarter, the longest streak ever. stay tuned you're watching squawk on cnn benjamin

we've got a little more than an hour to the opening bell on wall street. but there's some action in different names, not just the overall markets, and we are joined to look at some of the top three market movers. are any of them up, kristina >> i do have one, and we'll get to that. shares of taiwan semi-conductor down 4% in premarket on news that major customers are

reducing their chip orders for the rest of the year it could be what prompted the foundry to cut its revenue outlook for 2022 and shares of micron, after demand weakness. bank of america says recovery is unlikely this year and here's that positive news, shares of the largest south korean online market place are moving higher, 1.5%. they say a sales slow down is already priced in and the company is on a clear path to profitability. and goldman sachs also thinks investors are not pricing in a severe recession according to them, it's time to say hello to tara and good-bye to tina. investors are choosing to put their cash on the sidelines. we have gold futures trending down about 1% last i check and heading for their third trait weekly loss and the digital

gold, bitcoin is up today but 9% down on the week after posting its worst month on record. i had one bit of good news for you there, joe >> i have good news, you are a lot of really unbelievably famous people are from canada. including you. >> well, all canadians point out famous canadians in you know what's confusing to me ryan gosling and ryan reynolds >> they were on a show called "breaker high", that i used to watch when i was younger >> shatner the coolest, mike myers, keanu reeves >> yes, i don't think he was born in canada, but he grew up in toronto >> jim carrey. drake. whoa the beebs? >> justin bieber let's keep going i'm from montreal for those who want to know seth rogen >> seth rogen.

>> west coast. >> michael buble neil young oh, my god rockin', keep on rockin' in the free world a heart of gold. coming up, hayman capital's kyle bass is going to join us on the first half of this year which was a wild ride. plus the thoughts on president xi making his first trip out of mainland china in years to hong kong where he says everything is awesome. some might beg to differ

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duckduckgo is a free all in one privacy app with a built in search engine, web browser, one click data clearing and more stop companies like google from watching you, by downloading the app today. duckduckgo: privacy, simplified. welcome bang to "squawk box" on cnbc. the futures continue to trade lower, but better than some of the numbers we saw earlier if you're long we're down 48 points now on the dow. nasdaq 37, s&p off about 7 investors have been sounding the alarm that the s&p is down more than 0% to start the year. here's some solace according to advisor investments.

some of the times are around the financial crisis which you can imagine. but on average, it works out to once every, roughly five years, if you just do the math. meantime, president xi of china making his first trip outside the country's mainland since the pandemic began want to get to eunice yu good morning to you or good afternoon to you >> reporter: thanks, andrew. it was a very significant trip president xi jinping took a special train across the border into hong kong to take part in the 25th anniversary celebrations of hong kong's return to china. he swore in the new chief executive, john lee, a hard-liner who oversaw the crackdown of protesters in 2019 and also addressed concerns of the business community both inside and outside of the city he said that beijing was committed to supporting hong kong's role as an international

hub, expanding linkages with the world and promoting markets and development. at the same time, though, he repeated positions toward hong kong that have gotten the business community or at least many of the people in the business community concerned in the first place. the need to restore order from chaos, he said, that power needs to be firmly in the hands of patriots that hong kong's semi-autonomous, one-country-two-systems governing style is a success under beijing's comprehensive jurisdiction that is read as code that beijing will continue to impose its will onto the city with new regulations, such as a 2-year-old national security law. since then, activists have been swept up, journalists detained, the opposition neutered. even the school textbooks, at least some of them, are making the assertion that hong kong was not a british colony now this as well as the covid

rules have had a big impact on the business community and hong kong's role as a global city people, businesses have been voting with their feet in the first quarter, 140,000 residents left that's 2% of the population. and 44% of the members were considering an exit. hong kong ipos are also down their year there's no consensus of how this is all going to play out but as can you imagine, joe, this really raises a big question about hong kong's competitiveness in the region. >> i would talk to you about it, eunice, but i want you to have a great weekend, but just, listen, we're going to talk to kyle bass, but listening to some of those praises and just, i don't know when you hear about there's no reason to change such a good system, and we need to, you know, the overall jurisdiction must be held by patriots who are going to do the right thing for

hong kong, all those kind, all that, that language, it, i just hear it, and i just think, communist rhetoric that over the years, this is what i said, i don't want to talk to you about it because we'll be blacked out before we know it. thank you, eunice. let's talk more about hong kong, china's zero covid policy, joining us now, kyle bass, at hayman capital management. beijing promised hong kong 50 year of self-governance and a path to universal suffrage back in 1997. we're now at the halfway point, and anyone that looks realistically at what's happened, you've seen freedoms eviscerated already in hong kongs and we're not even halfway through the handover, kyle you know what i'm saying about how you read this and it reminds you of orwell or the former soviet union you hear the way xi phrases

things, and it's like almost 180 degrees from what he's saying. you assume the opposite, and you'll be much closer to the truth. >> it's really interesting, joe. the historical precedents for autocratic leaders rewriting history books, as we all know, the number one image that comes to mind is hitler, and when you get to the scenario where today we live in a post-truth world. and what the chinese communist party spends a lot of much and effort on is their propaganda and trying to wint hearts and the minds of the world by saying one thing and doing another. there's an interesting historical idity for this day, the day that they handed hong kong back to the chinese was july 1st, 1997 do you know what happened on july 2nd,997 that was the day the thai bot broke the peg and the day the asian financial crisis began and the reason being is the

world didn't believe in china's ability to goability to govern g kong and you had country after country having currency crisis as you remember, russia defaulted in 1998. and it looks like as we know russia just defaulted again. when you look at what's going on, and they're trying to revive hong kong as a quote business hub or regional hub, they have absolutely destroyed it. and remember the agreement that the chinese signed back in, or, you know, went into, in 1997, that had 50 years on it, but not only did they promise, as you just said, joe, they actually signed and ratified a treaty, an agreement and filed it with the u.n. so you look at what the chinese do, right? they sign agreements, then they simply abrogate them and that's what's going on here. when the kids of hong kong go

back to school this fall they actually have new history books as eunice just said. in the new history books, china was never a british colony they erased it out of the history. and they note violent terrorist acts enraged and enlarged by foreign influence. that's what it says in these new history books. it's a distaupe kwan failed state now run by an enforcer >> yeah. that's kind of what i was getting to, and there's times when i think if i had to try to run a country, like the population the size of china, it's not an easy thing to do, and i'm not giving cover to xi, but he says what hong kong people desire most are better lives, better apartments, more business startup opportunities, better education does he, in his heart of hearts think that the communist system can deliver that

more effectively than capitalism i mean, is he well-intentioned or is it all about power and staying in power >> i mine, they definitely believe that they have a better system than capitalism and that even though it's never worked in the his drift world. they're going to, they had continue pushing forward you know, i think it's important also to look back at hee's speech to the poe hit bureau in the middle of last year about the same time putin was giving his speech about what he was going to do in ukraine you remember even back in 2014, putin's speech, he said exactly what he was about to execute in crimea and xi said that his life's mission is to quote, rejuvenation of the great chinese race, which means the reaction which significance of hong kong and more importantly the unification of what he refers to as the taiwanese separatists.

so xi has spent his entire life on being able to bring back taiwan into china's fold soy think that what they did to hong kong is a horrible yeomen for what's about to happen in taiwan >> and there's some important dates coming up. i'm just wondering what this means for the west and for the united states. i mean, in terms of trade and just in terms of our security, because it's staring us right in the face that taiwan is going to be an issue. i don't know when. what do you expect in. >> yeah, every day that goes by, the u.s. and the west is in a better position than it was the day before, because i think, joe, we realize what our strategic deficiencies are somehow, some way we have allowed 95% of the active pharmaceutical ingredients in all u.s. antibiotics to be made in wuhan you can't make that up we need to reshore our

pharmaceuticals. if you remember, we started talking about putting together a presidential inquiry commission on the origins of the covid virus. and within two hours of the announcement of that commission, china had a press conference and said they'll withhold antibiotics if we grin that kwair. so we killed it. we have a number of things we need to do we need to onshore, reshore our chip manufacturing, but these things take years. they take four or five years to build these waver fabsweigh fer fabs, xi's strategic moment is now, not later nobody knows how quickly wars can start, and as we know looking through history, they just happen. they happen very quickly after the conditions for those wars build over time think about how this friction between china and the west has been boiling for the last, really the last two or three

years. we've come to a boil so joe, i'm not enthusiastic about investing in china, and i worry about all of our institutions that have hundreds of millions of dollars invested there and what will happen to their money. >> let's stay in that region and talk.yen i can't imagine the yen would rye act very well to a, what you were just describing either for taiwan but what's happened so far and what are the prospects >> yeah, japan has reached the endpoint think have 250% sovereign debt to gdp the boj owns over half of those bonds, the boj owns 85% of the listed etfs in japan and they have an effective, very effective yield curve control mechanism out to their ten-year point. they buy every single bond along the curve so that their rates won't move higher. even though global inflation is moving high-single low digits.

every bond they buy, if they engage in holding their rates still, even though global inflation takes off, every bond they buy means there's new yen in the system. those yen get sold to buy dollar assets because dollar rates are so much higher japan can't control rates or their currency so they let their currency flap in the wind. so they've decided to hold rates still and go after the bond market and let their currency kind of flap in the wind >> all right, kyle, wanted to get through the, didn't say domestically about what's happening. we'll do that next time. but i think it was important just to remind everyone when you hear those things and know just,

there's reality, and then there's what you hear from president xi as you said, post-truth world. kyle bass. >> thank you coming up, a lot more as we get close to the open here we're going to talk markets as we get close to a kickoff of the second half of the year. and a programming note you don't want to miss a special edition of kryptonite in america at 6:00 p.m. eastern time right here on cnbc as we enter the summer, will it be a crypto mmsuer after what has been thus far a crypto winter "squawk box" coming right back

a new month and some new numbers from the big auto maker. phil lebeau joins us now gm has haltednew month and new s from the automakers. >> we're supposed to get the sales and production numbers. typically we don't seat stock haedthere should be news. we'll talk about that in a little bit. let's talk about the industry and what we can expect for the june numbers and q2 numbers. bottom line is this. we're not seeing the level of production necessary to meet the demand. when you look at the numbers

for june, most believe it will be down 15% to 17%. there's a little bit of erosion but there's far more demand than the availability of vehicles. that's why we see the typical price topping $44,800. toyota and honda. we'll got numbers for them for the month of june. for toyota and honda, look at the hybrid sales numbers. they're seeing high demand. that's a market that's red-hot. general motors is halted anding news. we'll get the q2 delivery sales numbers if you will. the question is, what are you

seeing in terms of electric vehicle production and sales. we saw hum are production slow. analysts said we need a better indication of when this kay dense will improve. take a look at shares at tesla. the q2, i don't think we'll get them today. it's likely we'll get them tomorrow. it's down to a range of 250,000 vehicles. remember, china shutting down production because of covid protocols over there. that will limit the number of vehicles. 310 is what they delivered in the first quarter. they will be closer to 250. finally, we'll see what happens when this comes to market

shares. john murphy out with a note saying he thinks it will be down to 11% by 2025. >> are we going to see you hanging out at o'hare with a microphone? >> not today. today we're focused on the autos. >> planes, trains and automobiles wings and wheels. ck in the day, it used to be bankruptcy court. >> thanks. coming up, what to watch when the opening bell opens. you're watching squawk box on nbc. ♪ ♪

>> a little more than a half an hour. joining us with more and what to expect, anastasia. good morning to both of you. anastasia, what do you think. we had a heck of a first half.

is there a chance we can get back to flat. >> i don't know if we can get back it flat but to 4200. we have to retest some loads. the reason i say that, if you do the multiple math, if you do thenning map, those evaluations will have to come down. if we are headed into not a full on recession but kind of a soft landing, that would have to be 6 or 7 percentage points. so i think we need to get there. >> anastasia. we're going to always. we have some breaking news. phil, you have that gm news. with's happening. >> we do. what they have done is released their q2 delivery numbers. that's not what causes the

stock to be halted. they are reaffirming their guidance but there will be an adjustment when it comes to the second court when this comes delivery. they will not be delivering 95,000 vehicles that are built but are waiting for components. the significance is when an automaker builds a vehicle it is not sold until it's delivered to a dolorship. essentially you're talking about 95,000 vehicles in sales in revenue that will not be realized until the rest of the year. general motors expects to deliver those vehicles by the end of the year. that's the reason why the stock is halted. we heard about this before. you build the vehicle but can't deliver it because you don't have all the chips. that's what's happening to general motors. >> i will go to joanna.

the bad news, is what phil is describing, a delay in terms of being able to ship the vehicles. what do you think that mons for the proud are market? >> this is consistent with the semiconductors we've been hearing off the last year and a half. so i think it's a positive. what you're seeing as a signal for the broad are market is some of the constraints will be resolved as the year goes by. the auto industry has gotten pummeled. we see continued consumer demand. for the broader market, i don't think there's much of a signal. there's still such a backlog of demand for that. folks are overreacting about

lower consumer spending. some are in the middle income or higher. >> apologies for the breaking news from gm. i want to wish both of you a terrific 4th of july. we are in the red, 63 points down on the dow. joe, hope you have a ball. >> margarita night. >> it's crypto night and margarita night. join us on tuesday. "squawk on the street" begins right now. good friday. welcome to "squawk on the street." kicking off q3, kind of how we left q2, futures are red. the two-year yield down 60