there are rising a mega deal in the works merck in talks to buy biotech company seagen for $40 billion it is thursday, july 7th, 2022 and "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc live at nasdaq market site in times square i'm me lissa lee with joe kerne. becky and andrew are off today it looks like we are on track for a three-day winning streak get the party hats out we are looking at eight points at the open. nasdaq at 34 the 10-year treasury yield

is rising slightly from yesterday. the real news here is the 2-year treasury moved above 3%. that inversion is deeper in the red. >> we had three. friday, tuesday, wednesday >> friday, tuesday, wednesday. the close above three. >> we haven't done it? we have to do it today >> we did. >> we're on a three-day. >> yeah. >> i want to talk about that go ahead i want to talk about the stuff the fed said go ahead. >> it shows up here. 2-year treasury is moving sharply and the 10-year treasury lower, the worry is recession is still a real possibility >> the minutes that cause them to say yeah, yeah. we got to keep going 7 75 that was june 14th and 15th. you don't think the world has

changed since june 14th and 15th >> i think things have changed i think the fed's resolve to keep the foot on the pedal >> stuck on transitory >> they want to be sure. expectations >> transitory. then they get religion now -- >> they would rather err >> they stay with takes too long >> they sound like to err on the side of hiking. >> no, this is what changed since june 14th. >> take a look at oil prices joe is egging me on to do so >> no. you said that yesterday. i'll let you do whatever you want it's my show go ahead. >> it is your show, joe. i'm a guest. >> you have your show.

13 years, counselor. "fast money" for 13 years. >> proud of it >> i would not claim to own "fast money. >> that's true >> good. >> i don't claim to own any. >> go ahead. >> this is your show currencies joe says we should do currencies >> british pound >> british pound we have news from the uk that's what we are watching this morning. >> parity on the euro. >> virtually >> europe is closer to the issue than the uk is -- putin and energy problems and germany. they are closer than we are. we can hopefully be insulated from a lot of the -- that is -- europe will catch a cold or the flu and maybe the uk gets half

of it and hopefully we get sniffles over here >> i hope. >> that's the hope here is the breaking news from uk. prime minister boris johnson is set to resign. cnbc's steve sedgwick is joining us live from london. steve, you are a gossipy guy is it really just the covid parties? there has to be more dissatisfaction. we would not have anyone left. gavin newsom would be gone nancy pelosi if it was covid hypocrisy, we he co would have no government officials left here. >> reporter: you are right a nail in the coffin, joe. you are saying this is you show boris johnson was the driving force in brexit and ended theresa may's reign in 2019.

definitely the issues over integrity at the center of the concerns regarding boris johnson and the fact in recent days it has emerged he appointed someone for whom theres were sexual misconduct allegations in 2019 he still reheappointed this mani government and sent out his mps and parliaments and government members to say he didn't know about the allegations. joe, within the last 48 hours, a trickle of resignations. one from the treasury secretary and the health secretary as well in short succesuccession the government with 120 government ministers as well, have lost half its members in the last 48 hours. member after member of the government has written letters to the prime minister saying we

cannot work under you anymore. we believe your integrity is questionable and we need a fresh start. is it just about lockdown parties? absolutely not that was the first straw on the camel's back which led to the torrent of people to resign. remember since the report into the lockdown parties in covid that you mentioned and since then, a couple of elections where the conservative party which had a huge majority under boris johnson in 2019 lost badly. they lost one in the north of england. another one in the southwest of england. both of these were rock solid conservative seats a lot of the conservative members of parliament, which there are a lot under boris johnson, are very concerned the tide has turned politically for boris johnson and the british public no longer back him and the public no longer trust boris johnson and many of his mps say

he got a lot of the big issues you out there right as well and they are worried about another general election boris johnson was very quick on the back scenes in getting that out there. he got the party behind him and country behind him on his vision of a post brexit future which is still panning out. he was quick to support ukraine in the re-arming of the russian invasion of crimea in 2014 he got the big issues right. we expect to see that with the resignation speech which would happen in the next couple hours. the party doesn't trust him anymore. the government doesn't trust him anymore. he lost secretaries of state and ministers and some of the statements were absolutely damning. quick point on what happens next boris johnson, we understand, wants to stay as a caretaker prime minister

caretaker leader of the conservative party while working out successor. such is the fever of the environment here i have never seen it like this in covering politics he may not get that opportunity. a lot of the mps say no, we want you to go now. in which case, someone else has to step in as interim leader of the conservative party melissa and joe, back to you >> the economy the energy policy. none of that factors into this i have seen criticism from his own party on his being too green and missing the ball on being able to -- not as bad, obviously as europe or germany, but have you seen that criticism? >> reporter: yeah, absolutely. look at this how about this for how amazing things have happened so quickly here the chancellor and our treasury secretary and our janet yellen

resigned partly because he and boris johnson had different visions over integrity different visions of the economy and spending of taxation and tax rates and how much spending and on some of the big issues. at loggerheads this is number 10. the most famous door on the planet different visions of the economy. this is fascinating. 48 hours ago, a new chancellor and secretary. he is supposed to unveil a new economic policy with boris johnson on monday together a vision he accepted the job on the idea that he and boris get along and share the vision of spending and lower taxation what happens today the man put in position in less than 48 hours and says boris johnson, you have to go. he published the most damning letter on boris johnson. that is how fever things are

here the man who came in 48 hours ago to direct uk economic policy with the prime minister to work in cohesion with him and they saw diffivergence within 48 hous that is how boris johnson lost integrity and policy >> i'll miss that hair someone who thinks about things like that. any given day it would be a whole new situation. i love that. someone that didn't care it really didn't i guess that's his trademark, steve. thank you, steve sedgwick. we'll talk about this. we might have -- you know who might be coming on later >> who, joe? do tell. >> i think you will

interview. am i allowed to say it nigel ferage >> that will be fiery. >> i'll take a break just words just words >> there you are nigel farage merck is close to a deal to buy sea gen for $40 billion. talks first reported last month. stocks are higher since the news surfaced this morning. shares of gamestop jumping declaring a 4 for 1 stock split. it will begin on july 22nd that stock is up 9% this morning. coming up, new insight in what the fed might have up its sleeve next. steve liesman will join us to

talk about the out dated fmoc minutes. as we head to break, check out the biggest s&p winners and losers stay tuned you are watching "squawk box" on cnbc >> announcer: this cnbc program is sponsored by td ameritrade. where smart investors get smarter.

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box. futures as you see with the dow not quite to triple digits up over 90 points pre-market. s&p indicated up 8 cryptocurrency bitcoin was $20,500. what is it $2 $20,526. a small pull for the stock market pull with the latest fed minutes. steve has the latest >> all is not doom and gloom with the fed policy. before i get to that, the doom and gloom for investors near term inflation fight is job one and the fed will accept slower growth the minutes suggest a hike of 50 or 75 basis points later this month. a little of that is risk asset

fat fatigue. after the fed hits neutral or beyond, the committee would be well positioned to consider the economic developments. there is no guarantee the fed may have to raise rates to punishing levels and some chance they may not if you look at peter williams wrote yesterday. the silver lining for risk assets said the committee under scored that the policy gets to the vicinity of neutral and it is more data dependent if you think inflation is going sky high, all of this is wishful thinking if you think inflation comes down and the economy cools quickly, maybe the fed has less work to do that is what the fed is pricing in during the june meeting, the fed up to 3.70 by year end now 3.36 it was marked for 4.10 in 2023

joe, that is now priced at 3.40. the fed would stop above neutral. the hope is it stops because inflation is under control it is a positive outlook, but you have to squint to see it of the we will talk with raphael bostic tomorrow. melissa. >> when you pair that with michigan and even some data out of the conference board that there should be concern that is happening. the fed will actually have to keep pushing on the hikes. >> here is the good news, melissa. the good news is that inflation expectations look to be very tied to gas prices if you get gas prices down, which i know that is a big if in this world today with supply and

refining problems. inflation expectations can come down it is a real conundrum for the fed which has to target an expectation that is based on a commodity which has little control over >> maybe those were hawkish comments at the last minute. that's where i got what i said the other day. about how much expectations have come down. just the murphy's law that they will be, you know, not tight enough initially and then one thing they get tight and they stay tight that is the way human nature is. stay at the party too long oil is below 100 the ten-year is not continuing to 3.5

how many basis points drop in what you were talking about since june 14th? >> about 70 or 80 for the terminal rate. the peak rate. joe, guys in the back, put up the two-line chart again the take away, joe, the fed has an appointment with 3.5% on the budget that is the middle that's the end of the year the fed will get there the market is plus or minus 30 or 40 basis points the question is where they will go joe, we're getting into that zone where the market six months or eight months down the road, the market can price in. >> steve, we got that number tomorrow in the history of you following all this, do these isolated layoff incidents we hear from tech and we have been hearing a lot. they got ramped up for whatever

reason tech has its own issues. we have seen a lot of companies saying we're not hiring. meta not hiring engineers. does that translate into weakness on the jobs friday or just too much? isolated layoffs you don't see that >> joe, the first thing i learned with the economics beat 0 y 30 years ago, anecdote is not everything microsoft announces layoffs. they want me to do a story of layoffs throughout the nation. you want to step back and say what is going on there have been marquee layoffs. i'm reporting tomorrow morning the high frequency data showing high job growth at small businesses which have had a good month. you know, that conundrum where how do you have a recession when you add 250,000 jobs how do you have a recession when

the pmi is at 55 >> what should we hope for >> hope for jobs you want people working. >> that keeps the fed on track >> i never get caught up in that, joe. i never get caught up in the bad news is good news. i always want people working and making more. >> 250 tomorrow? >> 250 is not a crazy number it's a good number >> that would be a good number that would be taken positive >> i think it would be taken positively if you have 300 or 400, watch the wage number and participation rate by the way, because our kids get hired at this time of year, the wage numbers can be lower. that might be a good sign. even for seasonal reasons. >> great thanks, steve. coming up, why some american airlines pilots are getting triple pay for trips

plus, a new development in the billionaire space race we'll have both stories when "squawk box" comes back. wh f ye i snack food maker? and you had to wrestle a massively complex supply chain to satisfy cravings from tokyo to toledo? so you partner with ibm consulting to bring together data and workflows so that every driver and merchandiser can serve up jalapeño, sesame, and chocolate-covered goodness with real-time, data-driven precision. let's create supply chains that have an appetite for performance. ibm. let's create.

good morning welcome back to "squawk box. it's time for the executive edge american airlines will give pilots triple pay to work flights that were mistakenly dropped due to a computer glitch this weekend the pilot union said the error allowed pilots to drop future trips from the schedule. that left more than 12,000 flights in july without a

captain or first officer or both you are not flying without a captain or first officer you need two pilot >> you are not moving the plane. >> american said it was adding most of the trips back and the issue would not impact operations or passengers flights. the union said reinstating the flights violated the contract. meanwhile, united airline and faa in a war of words. the aviation system will remain the challenged this summer and beyond argue that the faa needs more air traffic control staff. the faa is pushing back. it responded saying there were no faa staffing related delays at all on july 3rd or july 4th united was responsible for a quarter of the 1,100 flights of the airlines canceled on those two days depending on where we are, i can either have a lot of empathy for

trying to run an airline or a lot of anger when a flight gets canceled and you look outside and the weather is fine and the destination weather is fine. they blame it on weather there we all have these plans that seem really -- they are important with family. when you do that and you are scrambling and say we can get you there tomorrow morning >> tomorrow morning doesn't get me to the wedding. >> exactly can you imagine trying to have 50,000 takeoffs and landings in the country every day and we expect it to run smoothly? how would you like to deal with the public you see twitter. would you like to deal with the public as a flight attendant or ticket agent or any -- some people are nice. >> for the most part, 80% on angry. >> nice. >> no, angry they go up to the ticketing agent and you want something and

they cannot give it to you that's hard. >> a service business where it is difficult to provide any luggage. luggage getting lost and newark airport god knows what goes on there >> let's move on >> okay. am i getting you depressed >> you are calling out people. >> newark is well known to be the worst, right i love new jersey. >> i know. news in the billionaire space race virgin air with a contract to boeing for a mothership aircraft it carries the rockets up to 50,000 feet to launch. right now, virgin has two spacecraft in the fleet with the ability to launch 38 toomimes a year delta is working on a spacecraft to fly twice a week.

for that to happen, more motherships will be needed. coming up, futures are trading higher as the bulls look to extend the s&p three-day winning streak we talk catalysts next as we head to break, we have the s&p winners and losers you are watching "squawk box" here on cnbc >> announcer: executive edge is sponsored by at&t business at&t 5g is fast, reliable and secure every ip - including the iphone 13 pro with 5g. that's the one with the amazing camera? yep! every business deserves it... like one's that re-opened! hi, we have an appointment. and every new business that just opened! like aromatherapy rugs! i'll take one in blue please! it's not complicated. at&t is giving new and existing business customers our best deals on every iphone.

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good morning welcome back to "squawk box" live from the nasdaq market site in times square. looking at the futures triple digits on the dow up over 100. s&p -- this would be another positive session for the s&p it has been a while since we had a string of actual gains we are following breaking news out of the uk. bourngris johnson set to

announce resignresignation. set to step down as the k conservative leader but will stay on until the fall the move coming as he faces a growing wave of resignation in recent days. actually, maybe british pound hasn't been as weak as the euro. the euro is what we have been focusing on, obviously, at 1.02 which is -- you can go to europe and almost one for one >> on travelocity. trying to plot the uk adventure. >> you get the hotel bill and say it's not so bad. hideous transfer rate. >> we'll see it's early >> joining us now is the strategist at federated.

li linda, great to have you with us of the. >> good morning. >> did your outlook change with the minutes? >> not at all. jay powell was clear as he will be aggressive to get inflation under control. anything would change that we need to brace that more people need to suggest another 75 point increase and another 50 basis points still fairly aggressive. that doesn't change anybody in t outlook. >> linda, i wonder if you think we are in a recession. i want to get your take on how you interpret the pull back on yields and reversal in the commodity prices that we have

seen lower are things improving for a soft landing or are we pricing recession and the commodities reflect the notion of less demand >> we are dealing with a lot of cross currents that is why we are neutral at federated hermes things are going okay. we have concerns going forward i realize the yield curve is fairly flat. the economy is still very strong what we are noticing is they are coming off a strong number so you are seeing a lower number, but still strong elevated still still a lot of money in consumer balance sheet. very strong balance sheets on corporations even if we are bracing for the second quarter earnings report and expecting probably some nastiness and broadly in terms of outlook, the economy is still quite strong which means the fed

will still feel emboldened to continue to raise rates. therefore, in a recession right now, that means a technical recession. job market is too strong too many people out there for twice as many job openings as people to fill them. we don't expect recession any time soon. it's going to break either way that is difficult to navigate the market >> risk to the down side as we head into earnings season? you think companies are guiding lower? you think estimates have to come down do you think they priced that all in >> it is interesting wall st wall street analysts have revisions up over 76%. over the next 12 months as well. how can that be when we widely expect a lot of corporations to say they're margins are getting

squeezed and they have to reduce earnings expectations. that should be reflected more and more in stocks and hasn't done so so far again in the comment of saying we're neutral now and if you are looking for some place to invest and feel it is washed out, you can't find that now. we are expecting that in the market down to 3,400 and then pockets of value in which to invest even if we're heading toward recession. >> you do like energy still. linda, great to speak with you thank you. >> thank you coming up, new numbers on how many americans want to drive an ev. and galaxy digital's michael novogratz on why he is bullish on cryptocurrency. stay tuned you are watching "squawk box" on cnbc

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go to investor.gov today to learn about compound interest and other valuable investment information. before you invest, investor.gov. welcome back to "squawk b box. equities futures across the

board. s&p is up 11 points. nasdaq looking to be up 36 points right now. making headlines more than a quarter of americans say they won't buy an electric vehicle. a survey by consumer reports finds price, range and access to charging stations are the barriers are the issues in buying an electric vehicle look at the big ev makers. this is all evolving you can't expect to have charging stations everywhere immediately. you would hope time comes down i try to get in and out of the gas station as quickly as i can. half hour is a lot i don't think it takes quite that >> to charge i don't have a car >> you don't have a car much less an ev car >> exactly if i had a car >> you would get an ev you can't -- for city driving,

it is pretty good. for local. >> areyou are not making long trips. garage with a charging station >> there are cool teslas the interior a screen and that's it and a steering wheel they're cool >> yeah. >> i have certain concerns >> anxiety >> yeah. it is not -- obviously, we have the 1% problems. not everyone can afford an ev. it is difficult. >> you could afford two? >> i could probably afford one if i wanted. i admit that >> f-150 lightning did you say ford >> i said i could afford >> i thought you said you wanted a ford. >> maybe >> the porsche >> yeah. if i could let's talk apple extreme. bloomberg reports they are

working on a smart watch with a more shatter resistant screen and a bigger battery letting athletes track workouts for a longer period. it is expected to be revealed later this year. it is revealed alongside new iphones. coming up, merck in talks to buy seagen for $40 billion we will talk to scott gottlieb with that and more i know a little bit about antibody drug congegants. we are following breaking news from the uk boris johnson set to announce his resignation as prime minister he's expected to speak outside of 10 downing and we'll bring you that live.

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welcome back to "squawk box. u.s. futures looking higher. dow at 130 at the open look at the yield curve with the 10-year treasury rising slightly. still below 3% right now the 2-year treasury is 3.20. let's get to scott -- scott is here? he is ready to go audio wise and everything else. merck is close to a deal to buy seagen for $40 billion

dr. scott gottlieb is joining us he serves on the board of pfizer you might have been a practicing physician and head of the fda, but you are interested in science. i'm interested in science as well i don't want to lose everyone. it is a cool company in terms of they harnessed a way which we didn't think they use antibody drug and you take something on the surface of the tumor cell and you hook up the chemo to that and it goes inside the cancer cell and kills the cancer cell which considering what chemo does to normal cells they target something that actually works >> a broad pipeline as well. you know, antibody media with

toxicity other companies have technology. gilead has technology in the area with the acquisition a while ago. seattle genetics is a big player they are in collaboration. compe already in collaborations. they co-promote a drug that was developed. merck has rights due to a deal in 2020. another targets liv 1. these companies have worked together i think the big question right now is how does the ftc look at this this is the first major deal of its kind under this new ftc. when are they going to force the two companies to divest, to make

this deal get done that's what people will be looking at >> hard to understand that to apply ftc constraints to cancer and life-saving treatments that companies are trying to work -- you see what i mean there seems that there would be a reason would you want as much innovation as possible i guess you don't want pricing power, which that's one of the complaints for these technologies you see a $100,000 a year treatment, but you say, well, merck has keytruda and that's going to go off patent so they want to have a pipeline in these technologies, and it makes sense for merck. why would that be a bad thing if the well-heeled merck was able to build out all these things they were doing? >> three years ago, this deal

would have gotten done i think the strategy under the new ftc is shoot first, aim later, and they don't seem to be afraid to lose in court. they seem to be challenging things and seeing what sticks. there is some overlap between the two pipelines. seattle genetics has drugs in the pipeline that target melanoma, various intestinal cancers. there's probably overlap between the two companies in terms of therapeutic choice also in melanoma, there are drugs in development merck has a broad pipeline in that area as well. i think there will be areas of therapeutic overlap. a lot of those drugs are used in different indications, different settings of care different sequences. so it's not direct competition, but that doesn't seem to be how

ftc's scrutinizing some of these deals. this is the first big deal, i think, of this kind in this space in the biopharma space it's going to be telling to see how they look at this. the two companies have a collaboration already, where merck has u.s. rights to one of the bigger drugs in that ploefl. >> therapeutic overlap sounds good, but the concern is that it could be anti-competitive because consumers would have less choice for drugs and they'd have too much pricing power. what about the ceo, it's an interim ceo. there were issues with a founder and ceo, wasn't it he had to step down for personal reasons. did that make seattle, c-gen vulnerable >> that seems to be when the company, you know, this sort of

deal kind of surfaced. news of this deal surfaced a couple months after the news that the ceo was stepping down maybe several months after the news that the ceo was stepping down for personal reasons. it does seem to have potentially put this company in play, a force to transaction how that factors into it, i'm not sure >> what about, can we just talk monkeypox for a second scott, is that, are we going to be talking about monkeypox in six months >> yeah, i think unfortunately, we are there's more than 500 cases have been reported in the u.s. in more than 30 cities right now. this does seem to be more widespread than we were expecting. lab corps's going to of double the amount of testing they're doing to around 10,000 there was a study out in antwerp

where people came in with complaints and they had four cases that were previously not identified as monkeypox. one was identified as herpes and it would suggest it's more broadly found in the community right now than what has been picked up. it has probably broken up and been infused enough in community spread that it's hard to snuff out. it won't be largely epidemic like covid, but it's eventually going to break out into other settings we already saw a child in france get infected the government's distributing the stocks of vaccine they have. they don't have a lot of stocks of vaccine there's very heavy demand in certain parts of the country, like new york, san francisco

there are certain states that don't seem to have drawn down any of the supply, like florida for example. eventually, the government's got to reallocate those doses. if there's states that don't want to deploy vaccine for whatever reason, there's states and cities that do want to deploy the vaccine so they'll have to reallocate. >> it seems right now it's std would it be a different mode of mutation >> it spreads through very close contact and droplet transmission obviously, sexual contact is very conducive to the spread of something like this when you have skin to skin. but eventually, it will spread to other modes of transmission >> just any close contact could eventually cause spread. >> and surfaces.

blankets yeah >> we used to think covid, i can remember wiping down all my groceries for six months, and i don't know if i needed to do that at the time >> i don't think you'll need to do that. >> monkeypox on my food. all right, thank you, dr. scott gottlieb do you enjoy talking about genetics and mergers that's good for a change >> i think we said covid once. >> yeah, i did well, they're throwing away vaccines now, which is like, go figure anyway, thank you. more out of the ukhe wn we come right back. stay tuned advisor will work witu on a comprehensive wealth plan across your full financial picture. a plan with tax-smart investing strategies designed to help you keep more of what you earn. this is the planning effect.

good morning futures pointing to a higher open breaking news out of uk. prime minister boris johnson set to resign today. plus the president's message to the american people is the administration doing enough to tamp down prices the second hour of squaux begins

right now. good morning, and welcome bang to squaux here on cnbc, live from the nasdaq market site i'm joe kernen with melissa lee. becky and andrew are off all week >> long week >> you said it i told you yesterday, were you only halfway through you're exhausted already >> i'm kind of tired, but i'm happy to be here and it's an exciting day >> and we're happy to have you but you will be here on tv until 6:00 people need to do the math that's long. and tv's not easy. you know, you got to watch what you say. some people, anyway. u.s. equity futures are up 116 points, nasdaq up 46 and the s&p indicated up about

11 points. multiple reports say boris johnson is going to resign as prime minister of the uk it came after he faced multiple resignations and calls to step down we will have more in the next hour with nigel farage there's things on the surface, just under the surface and way under the surface. can you summarize exactly what transpired over the last couple months that resulted in this, steve? >> reporter: yeah. seems like ancient history good morning to you and melissa as well. the past couple days have been extraordinary. let me update you on the absolute latest. we understand boris johnson could be making his resignation speech literally in the next 25, 30 minutes i've been talking to

a couple major news organizations and they are getting the steer that it is 12:30 london time that we will get the announcement you mentioned nigel farage if there are two people who epitomize what happened in 2016 in the united kingdom, it is boris johnson and nigel farage and it was that momentum that carried boris johnson all the way to the top post three years after that brexit vote when he took over, of course from thera may who was a remainor, originally, campaigned on remaining. boris johnson weighed it up in two different letter, became the figure head of the brexit. it will be interesting, because i think there's been a bit of divide between nigel farage's vision of what a post-brexit

britain we would have and the agreement under boris johnson when he finally got an exit deal with the eu as well. in the last couple months, if we can get to that, it's been quite meteoric a civil serviant was tasked was reporting. and rebels thought boris johnson was there for the taking when he lost two absolutely key elections in areas where the conservatives in 2019 had won really, really strongly, including in the north of england where they traditionally hadn't won a lot of seats. they breached what was called the red wall of labor.

and boiris johnson is the man wo was credited and beating the corbinite threat so, having lost the support of many mps in the confidence vote, having lost two important elections, that set in motion a lot of concerns about boris johnson. questions about his judgment, questions about allowing a former minister into a post and that led to a lot of mps losing their support. we think we're going to get the announcement in exactly 25 minutes' time. >> some dissatisfaction with farage, vis-a-vis prime minister johnson on the adoption of the green agenda like wholeheartedly.

and i think that may have been part, steve, one last thing to point out, he won't be, when he does finally resign, he won't be handing the keys over to 10 downing to anyone, because there are no keys. did you know that? you can't be in. you have to be let in. that's why you can't storm the door and get in. >> reporter: well, it's looking pretty heavy security. i've been in there, interviewing theresa may. it used to be mrs. thatcher's former study he wants the caretaker, prime minister, we understand, the process of electing a successor is a two-fold process. it goes to the mps who whittle it down to two candidates. the process could take many, many months as well. it could and very quick process,

but it could also be an elongated process. he wants to be a caretaker prime minister, but there are some who are disenchanted that he actually may not get that wish to be a caretaker prime minister that could be another battleground between him and his party over coming days and weeks. yes, h be a caretaker prime minister, but it may be that an interim may well have to be the interim prime minister. the party has lost a lot of heart with boris johnson over the last six to seven days >> all right, steve, thanks so much tune in at 8:00. it will be interesting meanwhile, let's get to dom chu with what's moving >> activity now with regard to at least merger news possibly that's happening right now the big deal is in health care and biotechnology specifically that's deal chatter escalating between c-gen and america.

t merck. merck might be paying over $200 a share for c-gen. c-ge c-gen is important it has products already in existence that treat cancer. seagen shares, this was rough lay $105 stock you can see some of the deal chatter saying a possible $200 plus deal. watch sea gen shares if it comes to fruition, possibly a big deal in terms of cancer treatments. also watching computer chip stocks because samsung overnight reported results a little more

optimistic that is helping to lift some of these chip makers across the world, especially in asia but here in the u.s. as well applied materials, lam research. nvidia, advanced micro watch that and then the o g og, gamestop, nearly at 120 buck s a share. take that 128, make it roughly $32 a share after the 21st of july gamestop shares, remember at the height, it was a $400 plus stock. let's talk markets, joining

us, president of kmar global strategies we've seen say we've seen the highs for the year what's the backdrop to get to 3.5 to 3.75? >> we are going to continue to see very high inflation rates. july 13th we are having the cpi come out for the month of june and the last time was a h40-yea high we can match it or even be above it when we get the next month, the month of june. we are also having uncertainty on the global side with respect to energy. we do not know what russia will do in terms of response if we were to put a ceiling on the price of oil in europe and union

countries they may cut the oil back keep in mind, if you have a global supply of 100 million barrels a day, there are three major producers, russia, united states and saudi arabia each with approximately 10 million barrels a day. five of them is cut back, it is going to cause oil prices to shoot up that, in turn, will push inflation up rents i think are still going to be a factor in the united states, and wages are going to keep increasing. these factors which i think will contribute to high inflation rate, and i, you saw what happened to the ten-year today we hit an interday high. and i think after next week, inflation rate you will see even higher ten-year yield. >> what happens to the two-year

kbr yield? do we still see an inverted yield curve? and does that signal anything to you? >> it signals a lot. one, i expect the two-year yield to keep going up but then two-year and ten-year typically do a catchup with each other ahead of a recession that's what we saw in 2006-2007. so far, by my calculation, we have had four inversions since the beginning of april and this one yesterday and today seems to be persistent and when the ten-year rises sharply, you're probably again going to come out of inversion you're going to see a positive yield curve. then there will be fear about the fed tightening too much. then the two-year rises. that's how recession gets born the fed doesn't have an alternative, melissa they have to keep going with tightening, because they made a serious mistake in not assessing

inflation correctly last year. there is no way to make up for it they simply have to keep tightening, even if it leads to recession because otherwise inflation is not going to come d down coming up, the ceo of master works. that's next. but before we head to break, le let's get a check markets. squaux will be right back. we'rs 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

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when you start with care, you get a different kind of bank. despite a market downturn and looming recession fears, the art market is soaring. this past may it broke records with an andy warhol silk-screen taking the highest price ever paid tor a 20th century artwork at auction and the highest price ever for an american artist, 195 million. now we look at how some are hedging their portfolios with art. they

they, when you tell me about nfts and i see what they go for, i'm willing to accept anything but buying fractional shares of anything, you can't hang a fractional share of anything >> we've never been proponents of nfts. >> i wasn't speaking about them negatively there are a couple i would own if could own the proprietary rights >> the good news is they're 90% off now. >> i can get them cheap. art has stood the test of time it is in the eye of the beholder, but my point is, initially you bought art because you like to hang it on your wall and you can appreciate the beauty or skill that's manifested in the work is this more of, of trying to

make some money as art goes up in value? >> master works is strirkctly i investment pieces. we have 460 people in the platform today if you look at contemporary art prices this year compared to almost every other asset class they continue to outperform. i think at this point it's pretty clear that art deserves some allocation as part of a portfolio. today the only way to really do that is with masterworks >> do you remember at times in the past the asset that had appreciated the most in any given year was like chinese ceramic pottery. i'm willing to believe anything. how do you manage the side i still think, how do they know it's worth $50 million

how do they know >> the interesting thing about the art market which is unique to the asset class is that you've had art traded for hundreds of years at public auction. sotheby's, one of the largest auction markets is over 200 years old. we have data going back tfor centuries. artists like rothko appreciate so we think that is an interesting investment case and people should think about it as part of an alternative asset class in general >> it is odd, though, to some extent, you look at some of the great masters, and what those pieces are worth is the marilyn monroe, do you understand how a contemporary artist who just died a couple

years ago, the inherent value of a, i'm a big sutine fan. i can't imagine that the inherent value of that versus five silk-screens by an artist that was around in the 20th century, i don't, i don't see how you can value those things consistently >> it's really supply and demand those warhol paintings, there are different versions of them that have sold for $200 million or more historically there's a track record of that particular type of object. you can see those paintings appreciate we think it's an interesting investment from that perspective, and when you look at the volatility in the art market, most of the returns in contemporary art are somewhat

prin predictable. h we do think the predictability of returns is -- >> as we move forward in time, crazier and crazier things can be considered art. do you, are those in any of your portfolios? like a, i saw a bed that was not made with an ashtray next to it, and it was sort of on exhibit how do you know? >> i think a lot of conceptual art, they're fascinating, but we focus on brand name artists that have been around for a long time >> i would have asked about returns. 11% so far this year, 14.3% net

annualized over what time period? >> 11% this year, historically, it's been up about 20% on an annualized basis in terms of gross r gross returns. it has come down a little bit. but it's still impressive. >> and that period went through a recession before >> yeah, that period goes back through prior financial crises >> good to have you on >> thanks. coming up, following the breaking news out of the uk. boris johnson set to announce his resignation as prime minister in minutes. we'll bring that to you live as we head to break, a quick check on cruise stocks norwegian falling almost 10% right now the stocks are up fractionally "squawk box" will be right back. time now for today's aflac

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now the answer to today's aflac trivia question. sony's compact cassette player known as the walkman made its debut in what year the answer 1979 still to come. kevin o'leary and john hope bryant will join us to talk inflation and whether or not a recession is inevitable. but up next, grubhub is going prime. and jon fortt had join us. >> stay tuned.

jon fortt . amazon, as you've probably heard, is adding grub hub to its prime service and has an option to take up to a 15% stake in that company can amazon make grub hub a delivery winner? >> no, this boost from amazon isn't going to make a lasting

difference grubhub's problem isn't a lack of exposure but a flawed strategy during the pandemic when ordering in using stimulus money became the norm, it dropped, even as doordash rose. on the customer side, grubhub concentrated on growth investment in cities instead of suburbs, where it desperately needs to grow now. on the restaurant side, grubhub doesn't have enough of the chain restaurants that so many suburban customers want. the amazon prime partnership might encourage customers to try grub hub, but if they try it and the wait times are too long, they'll turn right off just as fast adding grubhub to prime is just ing to put pressure on a failed strategy. it's not going to make grubhub a

winner >> it puts them in a better position than they would be in if they hadn't done it >> well, joe, on the other hand, with amazon's help, grubhub's got a pretty good chance yes, the company has major strategic problems, but the ill-advised lunch promotion in may, 200,000 new diners -- >> i'm not going to take the rap for cutting you off, i apologize, but we have boris johnson speaking now >> the timetable will be announced next week. and i've of today appointed a cabinet to serve until a new leader is in place i would like to say to the millions who voted for us in 2019, many voting conservative for the first time, thank you for that mandate, the biggest conservative majority since

1987 the biggest share of a vote since 1979 the reason i have fought so hard in the last few days to continue to deliver that mandate in person was not just because i wanted to do so but because i felt it was my job, my duty, my obligation to you to continue to do what we promised in 2019. and of course, i'm immensely proud of the achievements of this government from getting brexit done, to settling our relations with the continent for over a half a century, reclaiming the power for this country to make its own laws in parliament, getting us all through the pandemic, delivering the fastest vaccine rollout in europe, the fastest exit from lockdown and in the last few months, league the west in standing up to putin's aggression in ukraine. let me saynow to the people of ukraine that i know that we in

the uk will continue to back your fight for freedom for as long as it takes and at the same time, in this country, we've been pushing for a vast program of infrastructure and skills and technology, the biggest in a century, because if i have one insight into human beings, it is the genius and talent and imagination evenly distributed throughout the population but opportunity is not and that's why we must keep leveling up. keep unleashing the potential of every part of the united king do and if we can do that in this country, we will be the most prosperous in europe and in the last few days i've tried to persuade my colleagues that it would be eccentric to change governments when we're delivering so much and when we have such a vast mandate and when we're actually only a handful of points nibehind in t

polls. the economic scene is so difficult domestically and internationally. and i regret not to have been successful in those arguments, and of course it's painful not to be able to see through so many ideas and projects myself but, as we've seen at westminster, the herd instinct is powerful. when the herd moves, it moves. and my friends in politics, no one is remotely indispensable. and our darwinian system will produce another leader equally capable of taking this country forward in tough times, not just helping families to get through it but changing and improving the way we do things, cutting bur burdens on families and businesses and for the new leader, i say,

whoever she or he may be, i will give you seas much support as i can of the and to you, the british public, i know there will be many people who are relieved and perhaps quite a few who will also be disappointed, and i want you to know how sad i am to be giving up the best job in the world but them's the breaks. i want to thank carrie and our children, all the members of my family who've had to put up with so much for so long. i want to thank the peer and its british civil service for all the support you have given our police, emergency services and of course our fantastic nhs who at critical moments helped to exte extend my own neither office as well as our armed services and agencies that have served around the world.

and our inde-fatiguable people and of the fantastic detectives, the one group who never leave. above all, i want to thank you, the british public, for the immense privilege that you have given me and i want you to know that from now on, until the new prime minister is in place, your interests will be served and the government of the country will be carried on. being prime minister is an education in itself. i've traveled to every part of the united kingdom, and in addition to the beauty of our natural world, i find so many

people possessed of such bo boundless originality and t willing to tackle problems in new ways even if things seem dark now, our future together is golden. thank you all very much. thank you. >> there you have it he will stay on as caretaker as prime minister as is his man at this point he was, i wouldn't say bowed he more or hessless said when te herd moves, there's really nothing more can you do about it he said he got the vaccine quickly, got out of lockdown quir quickly. i'm not going to be able to continue because i'm unsuccessful in pushing back against what he implied at maybe

what weren't justified tactics we know what it's about. it's about the parties at do downing. >> the case also that he was trying to make was this was not a time to change government because of all the issues that the uk is facing, whether it be inflation and the war in ukraine. >> economic turbulence >> exactly johnson said he would remain the caretaker prime minister until a new leader is elected. the timetable will be set next week and i guess the question is what will happen? will there be an attempt for a no-confidence vote to remove him immediately in there's still a lot to learn about what will unfold for the british people. in the meantime, we did see the british pound hit a high >> kevin will be on in a debate and may have some comments here. the left never liked him over there, kevin

but he kind of lost the right, too, with his total embrace of the green agenda, which came home to roost like it did in germany and like it did here as well who's left who's left when you don't have the left or the right? you don't have anyone. you don't even have the middle >> he's actually been a very successful prime minister. let me explain something about the prime minister system. i ran in 2016 in canada to see if i could do what he did. i was unsuccessful, but i learned something about prime minister and what he doesn't have he is supported by his caucus. his real job or her job. canada had a female prime minister once, is to get consensus and support from the caucus every single day. you're negotiating with these ministers that you appointed for finance or agriculture

and they have to work with you every day. the finance, if you lose their support, they can go around the caucus and basically drag you down they can fire you. and that's what happened here last night he's lost support of his caucus, the very same people that he brought into power turned on him and ate him alive. and that's what happens in the p british parliamentary system you're trying to keep all these cats herded that are basically working for you. you gave them their jobs, they're filling your mandate, and there come as time when they don't like you anymore and think whack you. it's a tar wdarwinian system

he did a holot of good work they got tired of him and took him out last night >> that's apparently so. kevin, stick with us we're going to talk a little bit more about this, but we're going to talk about our own issues closer to home here. we want to bring in john hope bryant to talk inflation and more operation hope founder and ceo i want to ask you, it's good to see you. i want to ask you -- >> good to see you >> philosophically, in a market system, where the way that we do things here in terms of private companies try to earn a profit for shareholders it's been popular recently to talk about companies not taking advantage of market conditions and earning outside profits. and it's not just the oil companie

companies which are doing well there's a supply issue prices globally go up. if they produce oil, and suddenly it's $110 a barrel, obviously their profits are going to go up pfizer happened to be in a position during the pandemic to provide vaccines to people their profits soared should they just take profit margins down to just a certain level, like the biden administration keeps suggesting? let's say 5% is fair we all got to pitch in is that what these companies should be doing? >> well, look, i'm a capitalist. i believe in the premarket system i believe companies deserve to make a profit, they have to make a profit even if you want to spend it like a capitalist make sure to

ga -- alcohol in balance, too much of it can get you drunk. i think after world war ii and during world war ii, there were individuals who were successful who were asked to lean in with the government and we came out stronger as a result of that i think we're at war right now we're at war with, unfortunately, a bit of a cultural war, cultural civil war which we're going to get through. we have nations that want to be us outside of this country they're at war with us, and they're united we're not. we're arguing with each other over silly stuff does that mean companies should lose money no, it does not. what each company could do, this is america, is up to them. but i do believe this is a time

for us to realize we are better together that all of us are needed to put our shoulder against the wheel right now to make sure we get through and we upgrade our software of the country. and come out stronger on the other side i know that was a longer, philosophical answer so yes, i do believe we should lean in. >> i'm going to let kevin answer that because it's not just profits, kevin. it's, for share holders, you're supposed to maximize profits you hope that the market takes care of setting prices through competition so that google or an apple, apple makes these great phones they make these outsized profits

because they're good at what they do. i can't imagine they're saying we're doing too well for our shareholders, be a 5% company. does it make sense >> i love to talk about the social good and how there's a broader mission than making money. at the end of the day, that makes everyone feel warm and fuzzy, but it's nowhere near real we're very divided company attempting to contort capitalism has never worked, and it's not going to work this time either it can maybe be debated every day, but the fact is, corporations have been very successful the american economy is still the number one on earth and the envy of the entire world it can take the stress as well bottom line is company service their customers.

their employees, and their shareholders that's it. that's what they do. if you want more you go to government and ask government for policy, and the midterms, only 90 days away, actually, we will decide on a proxy, whether this policy, by this administration is being supported by the people or not i have my own opinion. i think it's going to be a brutal midterm every incumbent loses seats. this is going to be a force of nature that will happen, i believe. and it will hoeshow you that we bent our attempt to change capitalism too far, and it's going to be straightened out at the midterm. and that is how america work it's a good thing. >> joe, just knock it off. i love you, kevin. by the way, happy birthday week

e week it's just not true the business round table, the biggest companies in the world, not just in america, said that the future companies is not just financial profit this, go check it out for yourself this is before the pandemic. they broadened the perspective of what shareholder value is and company success is that's been going on for a while and has been done by hard-nosed capitalists. where did society turn in the civil rights movement? it was the private sector that integrated the lunch counters in the south. it was the private sector reframing capitalism what happened after george floyd? $52 billion from the private sector that wasn't on their balance sheet, that wasn't their mission, but they did the right thing. it's been good for them. it's been good for america we have the biggest, most

profitable companies in the world, and they will continue to be >> back to the inflation argument if all these companies have rising costs that are out of their control, whether it's because the fed printed too much money or maybe during the pandemic we spent too much money or putin or whatever you want to blame it on, when costs go up, the biden administration is blaming these companies for raising prices to cover the cost increases. and pretending that that's what's causing the inflation and they should hold the line with shareholders or stock market everything is not going to work when you blame corporations for inflation that they can't control control. do you think it's companies' fault that inflation is so high? and they should be expected to cure it? >> that is wrong

i'm not blaming anybody here this is manufactured inflation, first of all it was manufactured by a once m a 125-year-old health pandemic the interest rates were at rock bottom the prices unfortunately went way up we had to simulate the economy you had a supply chain interrupted. so yes, prices are going up for the companies, they're going to have to increase their profits accordingly. that is, i think, common sense >> i'm sorry i asked you that question in a downpour we're going to wrap and get the heck out of there. we got to run. i understand where you're coming from on this john, go thank you both let's do it again under drier conditions it rains >> coming up, we're going to talk oil prices, energy prices

we're still under a hundred bucks a barrel, .9% of a gain on brent. prime minister boris johnson resigning. "squawk box" will be right back. and customers all on different systems. you need to pull it together. so you call in ibm and red hat to create an open hybrid cloud platform. now data is available anywhere, securely. and your digital transformation is helping find new ways to unlock energy around the world.

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whether your small business is starting or growing, you need comcast business. technology solutions that put you ahead. get a great offer on internet and security, now with more speed and more bandwidth. plus find out how to get up to a $650 prepaid card with a qualifying bundle. checking oil price this morning, still just below 100 bucks a barrel

but we seeing gains across the board. prices have been sliding in recent weeks as central banks battle inflation joining us is head of goldman sachs energy research. i'm wondering, do we need to not have a recession to get to 140, or is there a scenario where things are so tight supply wise in terms of what russia does in terms of retaliation for bans and taxes and et cetera that we could go to 140 with a recession. >> key is the timing even if a recession happens six months from now, three month mrs.months from now, the issue is inventory. demand is still robust we're seeing supply disruptions

elsewhere. 140 is our base case commodities need to solve for today's mismatched supply and demand again, what we need is less demand growth before the actual recession happens. remember '08 during the first six months of the recession oil rallied by 40% because you were still drawing inventory. >> i think that's a good point to think about we're seeing energy spot prices, equities are looking to the future could we see a scenario where we hit 140 and go to the other end of the spectrum. what's the bear case in your view >> what's important is to understand the setup we are starting from record low levels of inventories. we roughly five years into an investment cycle the question is how big is your demand shock, right? if it's employed for 2020 type collapse in activities, yes, oil prices

can fall sharper, but if we have less imbalances in the system in terms of leverage or financial risk, the down side is more moderate i think $85 brent would be our forecast under a global gdp outside of china falling to 0% u.s. producers are focussed on shareholders we would like to see a slow down in share growth as well. commodity prices as we're learning this week are quite volatile this is an environment where we need a decade of investment ahead. we're not at the end of the -- >> we've got some sort of interference going on. $85 is an interesting level, damian that is approximately the price

of oil before russia invaded ukraine. even with a recession, that is the lowest you think oil will go, we'll return to pre-ukraine va invasion levels? >> the world is tighter than we thought even before ukraine. supply is to the upside. we've seen supply disruptions elsewhere. the second component is what i alluded to before. this is a multi-year investment cycle. think of it if we do get a slow down in demand, when it comes back, we have the same problem as we do today we need investment in energy unless we have a significant demand shock you never actually have the $20, $30 what we had.

>> thank you coming up, iac, ceo, mous, a lot of consonants. >> vowels. >> yeah, i want to buy a vowel >> iac ceo joey levin. m&a opportunities. mike november grats talks the crypto crash stay tuned, "squawk box" will be right back

break news this morning, british prime minister boirs johnson resigns. >> i want you to know how sad i am to be giving up the best job in the world but them's the breaks. >> we'll bring you the market and currency reaction. here in the u.s., they're reporting gains. and making sense of the summer's

crypt crypto meltdown. mike novogratz joins us. final hour of "squawk box" begins right now. good morning, welcome to "squawk box" here on cnbc. i'm melissa lee along with joe kernen be becky and andrew have the morning off. the nad sdaq looks to be highery 67 points and a move higher in the ten-year yield 2.922. european markets, we're seeing them here.

boris johnson's resignation with the ftse higher. the euro is moving higher. away from parity, but we're still close there. >> and for a deeper look at what's driving the market state side, let's let to mike santoli at the new york stock exchange it's an abundance of good cheer in the market for the last couple days. are you surprised? i don't know how to act. >> it's a good cheer or maybe a little bit of resilience i agree there's a way to build a reasonably constructive case we're up 5% from the recent lows we've had days where it's closed well off the lows, five sessions in a row trading above levels that were on the down side six weeks ago the other piece of it, clearly this is a down trend, we're not

far from maybe having a shot at breaking it. it closed yesterday right on a 20-day average, which is very short-term gauge of the field position it's the first hurdle to get over before you say there's anything more. take a look at the impact of what we're seeing on the gasoline market. valero, the big refiner, riding those very wide refining spreads and dollar general, very sensitive to gasoline prices, gas accelerates, dollar general goes down. you see this spike to a high and another plunge there not closing the gap in any near way, and nothing saying this is going to continue. it seems like it's a little short term there are pockets of the market using it to feed off of for at

least a little bit of short-term relief credit marks remain on watch you see spreads in junk bonds widen out to some degree this is the way to stru view it. yields have stopped going up, alt although yesterday they did pop a little bit it's had a couple little spills here relative to treasuries. all asset markets seem to be clenching up ahead of what could be something worse than just a slow down. >> we've been talking to liesman about out world has changed. >> there's no doubt that that is

true gdp now is above 0 for the second quarter it's now minus 2%. you see 20% drop in oil. you've seen the market take out some anticipated feder rate hik, we're willing to take a recession on if we have to take on inflation the data have softened up a little bit since then. the thing we're observing is also influencing the result. i agree with you that there's not a huge amount of relevance to what they said about the economy three weeks ago, but the markets are based on what the fed kind of did after that meeting. i don't know how to necessarily untangle that. >> let's get back to the big political news britain's prime minister boris joc johnson says he will resign.

>> no one is remotely indispensable. and our brilliant and darwinian system will produce another leader, equally committed to taking this country forward through tough times. >> joining us, nigel farage. good to speak with you again. >> good morning. it has been a very dramatic morning in london. >> he says he will remain as prime minister until a contest is held. what do you think should happen next >> i think that's tenable. 59 ministers, some of them very senior, 59 people part of the operators of this government have resigned over the course of the last three days. it is a stunning number. we can't even run the country without these people and most of them in their resignation letters called for a return to decency, to honesty

and truthfulness in public life. the implication of course being very clear that boris johnson had lied, boris johnson had not told the truth and there fofore longer fit to serve in office. if he wasn't fit to serve when they wrote these letters, how is he fit to serve for what could be a ten-week period he was quite dignified, on a human e human level, you have to feel sorry for someone who's been through this mess. it would have been better if he had appointed a deputy and said hey, you become the interim leader, and i will give it all to the removal i'm afraid, i feel that what he said in that speech is a recipe for more conflict to come within the conservative party

>> how do you think about how the conservative party thinks about the potential successor? you have made the criticism that boris johnson was elected as a conservative but really governed as a liberal and was hardly the conservative that he purported to be in 2019 when he had that landslide win. as the conservative party regroups, who do you think they put forward? someone in reaction to boris johnson's what you call liberalism some more conservative person? wh what's the fallout here? >> what confuses americans is he backed brexit. whether he really believed it, we'l we'll never know we've seen taxes go up, the size of the state massively increase, immigration reach record levels and a near obsession with net zero which has seen the shedding of manufacturing jobs and not even producing energy, which we

have an abundance of in our country. for all of those reasons, the conservative movement needs to take a good, cold, hard look at itself and pick somebody that can lead in the referendum if they get somebody that goes back to basic principles of what conser conse conservative, when we left the european union it was to stop being dominated by central london attitudes to our life and country and trade. people thought with brexit that a new policy and country was coming what they saw under johnson was the same group of overprivileged, entitled people who most have never had a proper job in their lives, the elite

running the country. i want someone that will be able to reach out and engage ordinary voters if they don't do that they will sa suffer a catastrophic loss at the next general election which has to be held before the end of 2024 >> i think both of our respective countries, depending on which side of the aisle you're on, there will be pifingr pointing about the lack of decency and lying. when you were describing boris johnson earlier and how he shouldn't be staying on, i think you pointed to dishonesty or dignity or ethics or all the things you seem to overlook in your support of president trump. so it makes me think that that's not really why you wanted boris johnson out.

i think it has to do with the green, the embrace of all the green ideals, raising taxes. justifiable things that a conservative might say he disappointed on. isn't that more strue >> from my personal perspective, i'm deeply disappointed in the direction he took us in. while brexit's been done it's not been done properly there's a lot more work to do. the country collectively, they can accept leaders that make mistake. what they can't accept are leaders that make mistakes, get into trouble and try to lie their way out. it is that issue above all that has led to this catastrophic loss of trust. >> your outrage seems a little selective. >> no, no. >> both sides accuse the other side in both countries of lying, covering up, making mistakes and not admitting to them. and that just sounds political

to me. >> i promise you, this has happened i mean, four days ago, discontent with johnson amongst conservative voters was running at 30% the last snapshot we got last night was 54%. discontent has doubled in the space of a couple days, and it was this sex scandal, this senior conservative groping others in a club and the question was did he know about his history. he denied it it later turned out he was briefed on it more than once and it was that lack of credibility. >> i guess we didn't understand the downing street, over here they are do what i say, not what i do gavin newsom's at a restaurant,

not wearing a mask, now he's in montana. it's all the hypocrisy to us u, if the guy did a great job with ukraine, rolled out the vaccine really well, all these things seem like, and you heard the prime minister talk about all those successes and saying he wishes he could follow through on those to see that happen from -- i'm not saying that you want someone that's hypocritical in terms of covid, that's not what anyone wants, but tra dhat didn't seemo be the real reason that conservatives pulled the rug out from under him >> there are no doubts that he had historic achievements. this is about his personality, his character. >> you could be describing someone else trump! go ahead >> people can have their own judgments, but i put this to you.

it could be that we're a bit more old-fashioned in the uk maybe we hold our public figures to a higher standard how about that as a thought? >> well, when you come over here, you don't hold to those standards. you want president trump to run and win again? do you want the former president to run and win again you'd back him, wouldn't you. >> hey, i think on the policy issues, he's absolutely bang on. i think he's got the right instincts on things. he may make big claim, but he's been right about so much of what he's said. i haven't found the former president to be a liar that's quite a big difference. >> that's father enough for you to say who do you think, what, how would you, what would you want borisionson tojohnson to do rig now, he's out of there immediately? >> no. that's the problem 59 people resigned, okay

in those letters, they said decency. i think it would have been cleaner, more honorable and better if he'd appointed his deputy and said you hang onto this you run this as interim prime minister, i'm going today. he hasn't said that, and i think there will be more conflict within the conservative party over the next few days, i really do >> they want me to wrap, but i did want you to go off on -- and you mentioned some things that former president trump was right about, how about when he said you got to be kidding to germany, that you're going to sign on to the russian, you know, the pipeline, and our entire future, we're going to

cede to vladimir putin and talk about being right about something, what't's happening in germanrighw. >> so he wasn't only right about that when he said it publicly at the united nations but the german delegation openly laughed and mocked him for saying it. yesterday in hamburg, in a tenment block, they have introduced hot water rationing they can only have hot water for one hour a day, and the big german daily tabloid's headline was it wasn't even as bad as this in 1945 after we'd lost the second world war green lunacy it's a huge mistake and trump called it. he got it absolutely bang on >> maybe you're headed there now after prime minister johnson's zero, net zero and no embrace of the entire green lobby

that's where he lost you, nigel, right? >> probably, probably, yes >> i know you so well. nigel nigel farage >> coming up, we're live from sun valley, idaho with an exclusive interview, iac ceo "squawk box" coming right back

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when we come back, media and advertising coming out of the pandemic at allen and company's big sun valley conference, julia boor stin is there what have you got on tap for us. >> rain stopped. and coming up, we have ain't view with joey levin we're going to be talking about the health of the consumer, health of advertising and atwh's next in the competition with the tech giants coming up after the break.

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the biggest names in tech and media converging for allen and company's gathering in sun valley, idaho. julia joins us next. >> thanks so much. i'm joined by joey levin thanks for talking to us this morning. i know a big topic of conversation in sun valley is the state of the economy are we going into a recession, where are we going to be seeing the impact of that recession this various pieces. and you have exposure to so many different parts of the economy the consumer, advertising. let's start with the consumer. what are you seeing right now in terms of spending on things like

angie's list, renting cars >> the consumer is definitely still spending right now and that's a good thing. you ask me my short-term outlook, it's probably negative. it seems there are more head winds than tail winds, but i'm always a long-term optimist. i think long term will be fine right now what we see every day is they have not stopped yet but there are signs and concerns that that could be happening >> what are those signs? we were just talking before they came to us about mgm this has been a big bet of yours, no pun intended, but how do you think consumers fare when it comes to gambling or gaming >> gaming has done well through recession periods, historically. it's hard to read data, because some of the worst periods in the

past have had other issues in 2008 there was tremendous overbuilding and increases in supply but generally, if you look at the regional properties, they stayed at 97% or something of their peak over time i think that should hold in okay i think it's hard to know some of the things that were impacting the business, have impacted the business over the last few year, like stimulus and the volume of stimulus is unique and how did that impact a business and whethern that stuff comes o what does it look like in >> what's your strategy going to be when it comes to gaming business going forward, making more bets there? >> we love the category. we love mgm. it's something we still see huge opportunity ahead for. >> in terms of the advertising market, i see acquired meredith, merged it with dot dash. what is happening right now with advertising?

are you seeing a pullback? and what's your outlook? >> i do think advertisers are going to start to pull back. when you talk to everybody, this shift from growth to profitability, one of the places that people go to find profitability really quickly is short-term marketing we saw that in 2020 when everyone shut off their,m marketing completely there's good news for our platform most of our ads are performance. so when you're, in particular on the digital side so when you're looking at where you want to allocate budget and where you want to prioritize budget, it's where things you know, when you spend that dollar that dollar comes right back those things usually stay, survive longer than some of the more speculative things. >> tracks ting those dollars ha

g gotten harder. you've talked in the past about the digital due only how's that competition right now? >> the great news for dot dash is we don't need personally identifiable information or the tracking capabilities to have our ads perform. we're writing about content that's relative to basically an endemic advertiser in all context. if we're writing about mountains or mountain hiking, there are people selling products there like mountain gear or whatever it might be. so that, we don't need to make a more distant connection like how old is that person or how much money does that person make to make the advertising work. the platforms are, they still have enormous power. their regulations seem to be heading in the right direction,

particular particularly in europe there's still a lot of power concentrated in very few hands, and that's probably not good for the country. >> reporter: we know there is going to be a lot of conversation about that regulatory landscape so we'll let you get back down to the conference. thanks so much for talking to us today. >> thank you, julia. coming up, bakreing economic data new jobless claim figures are next "squawk box" will be right back. (vo) while you may not be closing on a business deal while taking your mother and daughter on a once-in-a-lifetime adventure — your life is just as unique. your raymond james financial advisor gets to know you, your dreams, and the way you care for those you love. so you can live your life. that's life well planned.

welcome back to "squawk box. rick santelli here live on the cme hq, our latest read on continuing claims and trade balance. trade balance for may comes in at 87.1 billion, the smallest trade balance of the year. february's was the largest, going back to 1992 recordkeeping. it was slightly over 107 billion. on initial claims, 235,000 235,000. that's down 4,000 from what is still an unrevised 231,000 last week and on continuing claims, 1,300,

075,00 if we look towards interest rates, well, even though continuing claims moved a bit higher, rates are still hovering very much where they settled yesterday, 3% on a two-year. and the ten-year note yield is slowly creeping back hovering now at 2.95. the dollar index has been one of the big stories, as it's been continually making fresh 20-year highs. joe, back to you >> thanks, rick. steve liesman joins us with more >> we don't, the testinumber is coming down. we just don't know if part of the decline is because of the shutdown in china, whether it resumes or hits a higher level once china fully opens up. jobless claims remain relatively under control, up 235,000, but

not signaling that caution alert at 250 or near 300 the challenge to the job cuts showed some increase, but nothing outside of the regular expectations joe? >> steve, i want you to take care of yourself tonight, okay i mean, don't, i don't know. don't eat any oysters. we m an issue with oysters you got to be here tomorrow. big day tomorrow >> jobs, all kinds of things going on tomorrow. big day. >> so just be careful. look both ways when you cross the street coming up, how long will crypto investors be waiting for winter to turn into spring want to ask galaxy digital's

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amazon is adding grubhub to its prime service and has an option to take up to a 15% stake in the company can amazon make grubhub a winner jon fortt is here to weigh in. >> no. the boost from amazon isn't going to make a lasting difference grubhub's problem isn't a lack of exposure, which amazon prime could fix.

during the pandemic when ordering in using stimulus money became the norm, grubhub and everyone else looked great, but after q1, it dropped by a percent even as doordash's gross order volume rose. grub hub concentrated growth investment in cities instead of suburbs, where it desperately needs to grow. on the driver side, it needs subcontractors there are no shortcuts to solve the problems the amazon prime partnership might encourage customers to try grub hubs, but if they try it and the restaurants aren't available or the wait times are too long they'll turn right off. it will just put pressure on a failed strategy and won't make grubhub a winner >> doesn't it put them in a

better position? >> well, melissa, on the other hand, with amazon's help, grubhub's got a pretty good chance yes, the conditimpany has major strategy problems. 200,000 new diners downed laoed t some might download to take advantage of the new benefit the amazon of doesn't have to burn grubhub cash. they can generate demand where it has the right supply and start a flywheel it's by no means a guarantee, but there's no better big tech ally in food delivery than amazon remember, the economy is shifting capitalism isn't cheap anymore

uber eats and doordash can't afford to spend money to drive demand like they did years ago consumers are looking to save money. if grubhub focuses on driver recruitment they can make it a real winner. >> why doesn't amazon just buy grubhub? >> hey, it could be a money pit. at least it gives grubhub a chance to show what it's got it might be a long shot. >> jon, thanks coming up, jim cramer's first take on the trading day ahead. plus we're going to talk crypto ayth galaxy's mike novogratz st tuned you're watching "squawk box" on cnbc leaving you lost. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire

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every search you make, every click you take, every move you make, every step you take, i'll be watching you. the internet doesn't have to be 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. all right. time to check in with our friend jim cramer he's got some new digs, some new sets, a new attitude new attitude what's going on, jim >> more positive attitude. a lot of guys getting really negative it's getting late in the game to be negative. a lot of guys say a big

inventory correction and the semis coming a lot of people talking about how the mall's bad, it's been bad. there's a lot of wisdom that i'm not buying into at all >> we certainly, and i don't know, jim. both of us kind of have been saying, wow, is it really as bad as everyone's saying why does the market seem like a beach ball it bends but doesn't really break. and now those minutes, wasn't it a different world a month ago, jim, for the feds? >> hey, they've won on a lot of, look in corn, copper this is, people seem to be oblivious. there's been a hetotal collapseo almost every single bit of the commodities. look at corn i thought we supposed to be in a shortage of corn

look at the stock of john deere. people worried about commodities should look at deere china does a gigantic stimulus package and you want to buy caterpillar. look at that so i think a lot of people are worried about stuff that's already happened, joe. >> trying to think if a, if in terms of duration, a selloff can accomplish enough taking out all the fluff in the market, if it's long without ever being, you know, seeing a crescendo that results in the vix at 40 can we look back someday and say, all right, that was a bottom that did not have a vix spike above 35 could that happen? >> i think you're right. i mean, look, how many stocks can we put up right now that show, that are down 50%, almost

every smh is down 50%. you have a huge number of companies that don't money they're down 60%, 70%. what, they have to be down 110%? honestly, you can't even look at some of these stocks because they're down so much and now people are telling us, the really time to get worried about the semi conductors? we had sanjay on earlier this week and said it was going to be a short inventory correction and morgan stanley comes out and says look out below, semis samsung's numbers were muc better than expected i'm tired of people saying now is the time to get concerned, joe. now? >> for me, i was also looking at how strident the fed was on the minutes, okay. we get it now. we've got religion it's almost the same thing they

were saying when it was transitory when they were a little late to the game. now i'm wondering if, we know now, now i wonder if they're on the wrong side in that way >> look, check steel out look at cleveland. they're worried about the increase in the price of steel cleveland cliffs has been cut in half the majority of the stocks that i follow have been cut in half that's 32 going down to 15 one quyear's 26. it's not a terrible company. but everything had a big spike in november. they had a big spike earlier this year. look at the decline in oil the decline in oil, oil's been in the bear market for two weeks, and that's long enough. >> this is what the bear market bounce that katie stockton described happening over the summer until we get the ultimate

lows, maybe this is what you hear which al hlows for that bounce and maybe we go into the soup again >> that political stuff, let's say the congress goes republican >> yeah. >> is that necessarily a negative or positive >> you're asking me? >> i think a lot of people would say -- well, no, i'm saying for the stock market it's a positive >> yeah, always. >> how do you know we're going to have a big decline if the house goes republican. if anyone thinks biden's good for the stock market they can see me or fly. he's terrible. they come back and say jim, do you understand how good we >> preacher meet choir thanks, jim. we will see new just a few minutes. and we want to remind you about the cnbc investing club. you can sign up.

find out more at cnbc.com/investing club or point your phone at the code i've tried this, and honest to god works. it's like a menu during covid. i didn't like doing that >> it's the same technology. >> no kidding. >> qr code, amazing. >> so we never run out >> of codes? >> yeah. >> no. >> the very last one was done. >> it's a nft now. crypto, mid june since we last saw our last guest. peter thiel-backed vald paused operation, let's welcome mike novogratz, i want to see how he looks, whether he looks wan. are you losing weight? are you eating are you drinking excessively >> we're in our new offices. and you can see it's pretty spartan here >> it is what just off the top of your

head, do you think we're near a low at this point? because 40 wasn't, 30 wasn't i've heard it could go support wise to 13,000 do you think we get 13 on bitcoin in. >> i don't this is kind of a tale as old as time when the water went out, the tide went out. what we saw was lots and lots of excessive leverage at centralized crypto companies, ironically, not online companies, guys like celsius, three arrows, blockfi. we've seen a lot of these file or put up gates, you know, basically declare bankruptcy and you're having this massive deleveraging, i think most of that deleveraging is out of system we're engaged in a lot of conversations around people that

neede needed capital the new capital will be asset sales. could we go lower? of course we could the problem of course is for you to go much higher you need the narrative to re-pick up and in my instinct is it's going to be choppy sideways until either the fed flinches or the damage is healed people get equilibrium. >> you worry about when things like this happen it's systemic problems and it kind of spreads. it is kind of -- do you know sbf? he has initials. i'm jrk. >> you are >> it's jerk sam is everywhere. got his hand in everything white knight stepping in here and there you know him is this a good thing

>> i do know him listen he is aggressive, smart. been smart to keep the cost of running the business very low. offshore automatted he is making it appears making the play to consolidate a bigger retail franchise from a stake in robinhood to going in for blockfi. how do you touch the retail customer listen what's different about crypto and normal markets is they're not a lendor of last resort. right? the fed came in. crypto doesn't have the fed and we have a fed hikingnot cutting. so that 30 to 20,000 really was this deleveraging or 30 to 18,000 is deleveraging of a system far too leveraged shame on lots of the players for

running what's irresponsible asset liability mismatch customer deposits in overnight and lending them. >> okay. cornelius vanderbilt 1873 no government bailout jpmorgan 1907. these are centralized institutions i thought this is decentralized. i don't do we want one guy involved and that's the appeal is that it's decentralized. >> you absolutely don't in the long run right? what you saw through this process was the decentralized lending platforms like compound they function the way their supposed to. transparency it was the centralized look at celsius, for example no one knew how much leverage

they had i think when all is said and done there will be accusations and prosecutions for fraud there will be gross misconduct in some of these companies when you look at the amount of both leverage and interlending that went on. so that's why crypto originally -- the original reason for crypto is more transparency and ironically had centralized organizations on top of all the crypto. that's where most of the problems showed up. >> and centralized risk with the projects that the players were involved in. you were a big backer of luna. do you still have that tattoo or getting rid of that thing on the arm? >> it is a good reminder you are not always right. >> the point being that so many of the players that you talk

about with too much leverage were all in on this particular stable coin, this alal go rhythmic going >> what we saw and i think what hopefully doesn't repeat itself next cycle is a horrific rate down in risk management. listen there are hundreds of tokens some win and some lose and to have huge concentrations of loans or it was just greed. right? people got into the ust with 18%. you don't get 18% for no risk. and that stable coin ended up not working. losing your shirt is unreasonable it's the same thing with loans

to three arrows capital. reasonably thought they were a reasonable counter party betting the farm is not reasonable. >> drawing the argument out, isn't there inherent risk in a single player in the crypto industry regardless of whether it's sam - >> or gary gensler >> a concentrated presence across the industry. the risk being that he makes a bad investment. >> crypto is close to a trillion dollar industry and the total holdings is a fraction of that he is an important player in this moment rltive to the crypto space he is not that big >> okay. >> let's go to the aforementioned you know all the people. did you work with gensler?

>> i did in hong kong at goldman sachs. i did. >> incestuous. at the journal the bitcoin land grab what's happening what's the rationale about a spot etf when you have seen etp sponsors working well? journal seems to say if it is not under him it won't happen. >> i know gary i taught his class once at mit he's a smart guy i had hope that he would be positive for crypto. i think he's been very cautious and worried and i guess the sell-off only emboldens him. it is frustrating. listen i don't want to over comment we are in the s.e.c. right now it is a long and grueling process trying to get through.

very different than the jay clayton administration he's not been the prince of crypto as everyone was hoping for. he doesn't understand it. >> then that's -- what are you saying why then if he understands it what's the rationale. >> you're the political analyst. i'm the going through to the s.e.c. right now. >> i try to stick -- i get that a lot. don't talk about politics when you are talking about business news okay don't talk about the government, the fed, congress, build back better how do you possibly talk about anything without looking at when's happening behind the scenes >> listen. i think i was clear. i'm frustrated as can be with the pace of new regulation and clarity from the s.e.c.

we have been on record it's anti-innovation we're opening a bahamas office because it is complicated to get stuff done here. we have been asking for clarity. the bill that senator gill brand put through is good. i think the industry would have gotten behindmost of that. didn't go anywhere of course. >> what happens if worst-case scenario and might be not the worst but what happens to -- i don't know take your pick of all the other -- the whole universe of crypto related firms at 13,000 and i don't know where ethereum and everything would be. >> the industry is not built for a 10,000 bitcoin or 20,000

you will see layoffs and job cuts and people rationalize the business plan. crypto is going nowhere. people got in crypto because they saw a breakdown of trust amongst governments, society in general. trust is going one direction it is a bear market in trust the primary reason why they love the decentralized idea is because they looked up and saw lead octagenarian leaders making terrible decisions we have biden and trump, right i don't think the impetus started the crypto revolution but gaining steam. >> you don't know pete davidson, do you he knows a guy that can get rid of -- he's gotten like dating someone and getting the name there with the kids and then

moves on taken off for that will you keep it, honestly >> beautiful piece of art from the guys in brooklyn awesome. >> all right thank you. thank you for playing along and for coming on. i know it's difficult talk bitcoin if you have a crypto firm thank you. you are back again tomorrow. >> "squawk on the street" is up next. >> swan song ♪ good thursday morning. welcome to "squawk on the street." l lye at post 9. commodities and yields bounce. numbers cut by the street today in retail, software and the banks. our road map begins with stocks eyeing that four-day rally the british