klein. as we've put it so far, one of the better performers and one of the better quarters for the financials this far along in the reporting season that will do it for us on "squawk on the street. tech check starts now. good monday morning, welcome to tech check, i'm carl with john and julia deirdre has the morning off. markets are rallying a bit, although we're off session highs. the nasdaq's trying to make it three up days in a row the stocks have not hit new lows in about a month have we found a bottom we'll talk about that. plus, could another poor earnings report make netflix a target for m&a we'll break down the streaming landscape and then with a vote on the $52 billion chips act coming this week, we'll talk to the ceo of global foundries and the ceo of lockheed martin, what that bill could mean for your chip stocks. >> stocks rallying to start the week as the banks give the

entire market a boost. despite some economic headwinds and investor caution, it's been a slow grind higher for weeks, mike santoli tracking this bear market from the njse is this bear going into early hibernation? >> or maybe it's just resting up, john that's pretty much looks the same either way. but it is notable that we have not necessarily plumbed new lows for about a month and the market has acted as if people came in somewhat underinvested and here's the breakdown of some of the bigger growth in tech bellwethers since that point, one month ago. you see apple, 50% move in apple is obviously going to do a whole lot of work in terms of supporting the overall indexes it's been having its defensive and quality characteristics of the stock shine through. it seems to be the lesson here nasdaq 100, up about half as much, so the ndx outside of apple, as you can imagine, has been that much less impressive this is the equal weighted tech sector, so again, somewhat more

muted gains here, lumpy in terms of where the gain have been coming from. the semiconductor index, allegals up 6% it's not been on the same cadence so i think you have to say, keep these rallies on a relatively short leash, take note of some relative outperformance that's occurring as they go along, we'll see how they survive the kind of tech reporting season as it gets under way. >> mike, inflation still high, the war in ukraine still going on, but consumers are still spending what's the market been reacting to over the past few weeks has anything fundamentally shifted or changed that has changed sentiment? >> i wouldn't say in the hear and now a whole lot has changed. look, there has been an uptick in the weekly unemployment claims it shows you that the labor market is absolutely decelerating you're starting to see, you know, even the kind of log jams in shipping clear and inventories build up, so there's

some signs that the economy has come off the boil, but in terms of the big picture, it's been mostly about the anticipation. anticipation what the fed's going to have to do to restrain inflation and therefore how the economy might be able to withstand that or not. that's been most of the story. it's a global story as well, and you've seen the dollar raise higher, so financial conditions have tightened and shown more concern than the real economy has so far, which is reassuring but that's also always the way it goes before the economy starts to struggle >> so, mike, looking at this next round of earnings, we have a bunch of companies reporting this week and next what are the factors you're watching more closely for indicators of what's going to happen with the broader market >> you know, honestly, it's really much more about what's priced in. that's the whole story is what's priced in and what are these companies, in terms of tech, willing to project ahead i think there's this overlay of concern that some big tech companies have been frustrated with the level of productivity within the companies for some

time and now that we have this general story of a slowdown and a retrenchment, whether it's in start-ups or the general economy, if they're going to take that opportunity -- we, of course, have talked about jobs -- hiring slowdowns and job cuts, so what are they going to be projecting ahead? are they really going to be playing defense for the rest of the year that might color the reaction to the stocks as they report, as opposed to just the numbers as they're delivered. >> mike, appreciate that, helping us keep stock of the week just as it's getting started here let's focus on some software names this morning our next guest says he has seen an increase in private deal activity, but it's hard for folks to lean in when we keep seeing these high inflation prints and the potential for more hikes joining us this morning, jeff richards it is great to have you. we lead in like that because about a month ago, you said we're in inning two or three of the valuation reset in vc-backed tech companies what inning today? when you say this uptick in deal activity, what specifically are we talking about

>> yeah, it's a great question i just think folks were in retrenchment mode in q2, and in q1, we had so many shocks to the system we had the market turning downward, multiples turning downward, rates going up, and of course, we had the war with russia attacking ukraine so q2 was a moment for investors to take stock and figure out where to hide. we're seeing more deal activity now. we've seen the private companies reset their valuation expectations a little bit. some notable ones that you guys have covered with things like klanra and instacart it means that folks are warming up to a new reality. and i think we'll see more activity in q3 heading into q4 we also, as you guys have highlighted, we still have strong fundamentals on the earnings front maybe there's a shoe to drop, but we're not seeing that in the portfolio. we're still seeing healthy performance in our portfolio companies, which was not something we saw in prior downturns like '08, '09, where it was pretty systemic down turn across the portfolio >> do you expect that to get

reflected in public results and if so, what is the lead time on something like that? >> well, the public market, as you know, is so -- it's such a reflection ofsentiment, right? largely driven by hedge funds and retail investors who move the market i think it's been hard for those folks to pile in as well, so maybe we start to see some of those folks. we have record amounts of cash sitting on the sidelines, not only with hedge funds, corporations, obviously companies like apple have done an amazing job with buybacks but your average public company is sitting on a huge war chest, not the mention the hundreds of companies which went public last year so it's hard not to be optimistic heading into next year we look a lot at the small business sector. one of the companies i'm involved in called home base, did a survey of s&bs recently. 92% of smbs said they plan to hire this year that's a pretty healthy number given everything that's gone on, and should bode well for names like ring central, square,

toast, some of those companies that sell technology to smbs >> as you look at those companies and the cash they have, and the fact their stocks are way county, how much of the m&a that you're predicting is going to be those public companies making acquisitions versus deals among the private companies as they reckon with down rounds? >> well, we're also starting to see private equity creep in, right? we saw the zendesk deal. we saw toma bravo. i think we'll see more of that smart investors taking advantage of a down market and multiples today for software are below -- the last seven-year average for saas is about 7x next 12-month revenue. we may see that private equity activity and then as you mentioned, public companies trying to buy smaller private companies but we have to -- the valuation mismatch has to work itself through. it's sort of a pig in a python of deal activity that we've been working through. >> in some ways, it still feels early to me in the cycle there are a lot of start-ups that haven't had to raise

capital and really get a valuation reset, and though there's been pain for investors who are holding growth stocks, it hasn't been long. it's been more of a sharp, swift kick, versus something sitting on your chest. so, how confident are you that next year -- because next year's not that far away -- is really the time to be optimistic >> well, john, it's a great question, and the private market takes a long time to reset compared to the public market. the public market gets reset every day. private market valuations don't generally get reset until a company raises a new round of financing so we are working through that having said that, one of the reasons you'll see more deal activity is investors were able to buy low when others were fearful, if folks can walk in and invest in a great software company at ten times next year's revenue that they might have paid 20 for a year ago, those are going to start to look very attractive we've also had record amounts of lp flowing in, which still needs to get invested.

and then, yeah, just listen to the last two segments with the pf chang's ceo talking about how technology is changing their business we had boom supersonic we've got companies like bowery farming that are reinventing the food category. you mentioned boom earlier you know, we've got companies like odeko and home base and slice and bright wheel that are reinventing the small business economy. it's hard not to be optimistic heading into the next few years. obviously, doing that in the midst of a global war, with russia and ukraine, and also a historic rate hike that's causing some real challenges >> yeah, lots more optimism from people who still have capital, right? that they can deploy, for sure and what about that capital deployment what should investors at home make of horowitz and others putting more into already public companies versus not

is that a signal of value in the public markets >> it's a great question we, and others, have done that we've invested in some really strong public companies that we believe in we know the teams, we know their track record of execution. we know the future looks bright for the company, so you've seen ggv, sequoia and others doing that that trend may continue. the other thing, let's remember, it's a great time to be a founder. we had 4.4 million new business applications in 2020, which was a decade-long record and 50% higher than the average for the prior ten years. so, you've got a whole wave of new businesses being launched in categories where there wasn't a ton of entrepreneurial activity. we're just -- i mentioned a few of those smb tech companies earlier but i think one of the things that is going to come out of this covid pandemic is we are going to look around and say, wow, our entire labor situation in the u.s. changed and we built a whole new economy of small businesses that frankly right now, other than labor and goods costs, are thriving.

as you mentioned earlier, consumers are getting out, spending money, walking out and going to restaurants, enjoying time out with their families that is a really strong indicator for a segment of our economy that's 40% of u.s. gdp is smbs. >> yeah, it's going to be interesting to see, jeff, you know, what growth strategies look like when the leash is a little shorter than it's been, say, the last two, three, five, ten years. but that's something to talk about in the years to come, because you're right, it's not like business creation just goes to zero jeff richards, good to see you again. thanks, man. >> thanks, all and after the break, could another bad quarter make netflix an acquisition target? we'll discuss. tech check is just getting started.

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made to do anything so you can do anything. take a look at some nasdaq 100 winners today. airbnb is going to lead you but watch nvidia 165 and change unbelievably, nvidia has not been above the 50-day going back to april and it's awfully close this morning as we are get a little bit of a tail wind for

tech >> pelosi's buying it, apparently let's get a gut check on disney. hulu outranking the flagship service, disney plus, and each of the last six quarters, according to the "wall street journal," a sign of longer term upside for the platform and a complicating factor in deciding what to do about cnbc parent comcast's stake in hulu. hulu offering more entertainment for adults to reach a broader market with disney plus seeing growth flattening out. share price falling nearly 40% this year. brutal year for streamers. you can see shares this morning, disney up about 1.5%, little bit more than that >> netflix kicks off media earnings when it reports tomorrow afternoon and its results will be very closely watched. not only could netflix's subscriber trends indicate what to expect for other streamers but if the stock plummets

further, it's down 67% year to date, it could be seen as an acquisition target as analysts raise concerns about the whole sector key bank out with a note this morning saying it's seeing signs streaming may not be recession proof, lowering its netflix and roku estimates so, the question is, which companies could look to buy the likes of netflix or roku if their stocks continue to plummet? microsoft could build on its newly inked ad partnership with netflix. apple has a growing interest in media, though it's constrained by regulatory scrutiny and comcast and nbc universal, cnbc's parent company, could look for more scale to build on its streaming ad strength. there are other companies that could feel pressure to merge as both advertisers and consumers pull back. warner brothers discovery, which is reckoning with its heavy debt load and paramount, if

controlling shareholder sherry red stone decides that her stock won't reach the heights it hit last year, so interesting, guys. john, curious what you think of some of these tech giants, if they could, from a regulatory standpoint, would take the opportunity to snap up some of these media assets as the stocks continue to decline? >> i don't know, julia i mean, netflix, even here, its market cap is over $87 billion you have to spend at least $100 billion to get it that would be so huge. roku, whole different issue, around $13 billion that's a lot more digestible but still, in this market, carl, seems to me like a lot of money. >> yeah, and as for netflix, of course, earnings tomorrow night. i did notice this morning, julia, that bespoke says down 9 of the last 10 earnings days, going back to 2020 it's been a difficult run for netflix to react well when they do print we'll see what happens tomorrow.

as we go to break, we do want to take a look at "mad money," the new home here at the new york stock exchange, premiering tonight at 6:00 p.m. eastern time goldman's david solomon is going to be on with jim, and what a day to have it given some of the comments goldman has made about the consumer, inflation, global economy and more tech check will be right back. (vo) get verizon business unlimited from the network businesses rely on. like manny. event planning with our best plan ever. (manny) yeah, that's what i do. (vo) with 5g ultra wideband in many more cities, you get up to 10 times the speed at no extra cost. get verizon business unlimited from the network businesses rely on.

we just hit on netflix and other media earnings worries we'll see how hard the consumer has been hit and how much business outlooks will suffer. our next guest says that as growth slows, staying on top of competition is the name of the game for companies like netflix and the same goes for snap and tesla. joining us now, bmo wealth

management chief investment strategist thank you so much for joining us today. before we dig into specific names, give us your overall outlook on which parts of the tech sector have the most opportunity right now. >> thanks for having me. i think we really want to stick with what's done well. there are going to be -- there's going to be pressure on budgets. there's going to be curtailments in terms of where dollars are spent, so i think we want to look at the sectors where it's going to be top of the stack where companies are going to spend money and that's probably in areas such as enterprise software, artificial intelligence, cybersecurity, those areas that are really critical to the business and to efficiency so, i think that's area where there's -- an area where there's opportunity but also opportunities in other areas of the market where you have really stable companies and very strong ecosystems so, you really want to stick with what's worked, what's outperformed, i think that's going to be a theme as we get into a scenario where there's potential for margin pressure.

there's potential for earnings misses you really want to stick with what's strong and stable >> yeah, certainly a lot of potential for things going wrong with so much pressure on the consumer right now tell us this common theme. tell us about this common theme you see for netflix, tesla, and snap why is competition a rising concern for all three of those companies? >> competition is heating up and it's going to show up in areas where companies for a few years have enjoyed less competition or the environment of a very strong economy and high liquidity i just lifted all boats. but right now, when we're getting a bit of a pullback in terms of liquidity, a slowdown in the economy and that competition's really going to heat up so that's going to be consistent theme for netflix, for snap, for tesla as well, for is that matter there's just a lot of companies that are coming into the same space and really coming in with a strong offering. and it's not clear that the growth that these companies have enjoyed in previous -- in

previous quarters or previous years for some of them is going to be sustainable in this area of much more intense competition. >> yeah, it seems to me, netflix has been spending a lot on content to build a member base internationally and the stock has been trading a lot on sub numbers for years now, and i just wonder, can that continue, that intense spending with the idea that subs are the most important thing, growth is the most important thing, while losing money or, you know, at least in those markets >> yeah, that's a -- that's a tough calculation, because in a lot of those less developed markets, the cost of netflix is nothing like the cost per -- in terms of the budget spend for a household that it is in the u.s. it's actually a much more significant cost so spending that money and looking for subs in areas where, you know, the growth might

actually be limited and the profitability might be limited, that's a challenging scenario. but still, for now, i think the markets are going to focus on subscribers. it was such a big issue, of course, and i think there's a big range of possible outcomes for the subscriber base for netflix in terms of how much deterioration subscribers they actually see and how far that goes into the future so i think that's going to be the near-term focus but if we think of the long-term, that is the big question of how much profitability they can get out of these markets, not just the subscriber base. >> you know, it's interesting, both netflix and snap are examples where the last earnings guidance, there was a lot of dislocation between what the market expected and what they gave us. and i wonder if you think names like that, snap especially this week, are going to look to make sure that does not get repeated, and that's going to result in more cautious commentary >> well, we'll see i mean, there's a reality of the business on the ground so, i think it will be cautious commentary, and they don't want

to be overly optimistic, but the reality is, there's a lot of competition in these spaces. there's probably going to be some constraints on ad spend and budgets for consumers. so, you know, how that all plays out and what type of margin pressure, potentially, these companies are under, is really going to be a big focus, so the companies want to be cautious, but the outlook itself is going to be determined by what's going on with the competition, the macroenvironment >> and explain to us your perspective on microsoft, because you are lowering your june quarter and fiscal '23 revenue assumptions but you still have an outperform on the stock. what's the picture there >> microsoft, like a lot of companies, is going to have -- tech companies, especially, is going to have foreign exchange headwinds. this quarter, maybe for the foreseeable future so it's going to be interesting how much the market actually focuses on this versus how much it's going to look past the foreign exchange headwinds and

think about the constant currency revenue so that's going to be a common theme for technology, which gets so much of its revenue from international sources. that's certainly true for microsoft. the business is strong and stable, and very good spaces and definitely a dominant name, one of those big heavy hitters is that is a core holding in portfolios, but in terms of how much the market's willing to look past the current headwinds, including what's what's happening in europe and internationally and those uncertainties, it's still a question mark, even though the underlying business fundamentals look strong. >> it seems like just to take it back out to the big picture, that so many of your stock calls here are about the ability of these companies to pass along the higher costs that they're inevitably going to be reckoning with in coming quarters. >> that's right. we expect a lot of dispersion in this area. it's going to be very telling, which companies are able to pass on costs to their own customers

and maintain their profit margins. profit margins are quite high on a historical basis, and they're actually projected to go higher in the coming quarters, so it's a precarious situation with profit margins and not all companies are going to be able to pass on the costs they're facing, and i think we're going to see a lot of dispersion, and that's going to be an ongoing theme throughout this quarter and the next couple quarters to see which companies can maintain those profit margins, versus ones that have less pricing power. >> we are going to be watching those earnings very carefully, yung-yu. the ceo of airbus is with us live from the air show busy day in aviation with that order from delta for boeing, boeing highest since may or so and keep your eye on twitter and tesla. twitter and elon musk will have their first court hearing tomorrow in delaware meantime, tesla's back to 750. stay with us

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welcome back to "tech check," i'm carl with john and julia. the nasdaq and tech are outperforming today at the top of the index, airbnb, nvidia, netflix, tesla, all ripping higher, up more than 4%. in a moment, we'll hear from the ceos of both lockheed and global foundries, surrounding the chips act as we take stock of the political realities there.

first, though, a news update >> here's what's happening at this hour. another sign of a cooling housing market this morning. the july sentiment index from the national association of home builders plunged 12 points from a month ago to 55. that's well below expectations and marks the seventh straight monthly decline. the drop in sentiment comes as inflation and higher interest rates slow the pace of home sales. boeing shares, though, are rallying today, after the company announced a 100-jet order from delta airlines. boeing also said it is very close to resuming deliveries of its 787 dreamliner aircraft after a nearly two-year delay due to production and safety issues gsk, the company formerly known as glaxosmithkline has familiar products like advil

pain reliever and sensodyne toothpaste back to you, john. thank you. time now for a gut check on holdings jpmorgan, upgrading to overweight before the company posts results next month, saying the company is well positioned for travel resuming across southeast asia bullish on the mobility business with the potential of consolidation in the deliveries industry but they're lowering their price target to 3 bucks, adding they see potential for increased competition in the region the stock right now, up almost she. still under 3 bucks, $2.79 "t ech check" will be right back. do you have a life insurance policy you no longer need? now you can sell your policy - even a term policy - for an immediate

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welcome back let's get to phil, who joins us with the airbus ceo. phil >> john, thank you very much the ceo of airbus. interesting show here today, because we see great optimism about the demand that is out there, but an undercurrent of concern about the ability to ramp up production you guys are ramping up production you see this firsthand what do you think? >> well, the situation is challenging. we have difficulties toward supply chain, ramping up at the speed we would need. we are no longer limited by demand we are clearly limited by supply we tried 15 months ago in may 2021 to give a strong indication to our supply chain that it was time to prepare for ramp-up, and in spite of this clear

direction, we see that it's difficult today. it's difficult because of raw materials, it's difficult because of the price of energy, the scarcity of resources, human resources, that's probably the biggest issue. >> and that's the question how long does this shortage of labor last is it a 12-month problem, at least? is it a two-year problem what do you think? >> actually, we don't really know that's the basic reality we have to face. we think it will take at least one year to ease and to -- >> at least a year >> at least a year but there's still quite a lot of uncertainty around us. the geopolitical environment is quite complex and changing so, we can't rule out that this would be longer. it could be also a bit shorter because we don't understand exactly why it's so bad at the moment, and the potential to get better is still quite strong so, 12 months is a sort of average, and it's actually not very likely to get better in the short-term >> this is one of those shows where it's unusual because you haven't announced a major order,

major commercial airplane order. but you just had this order for 298 planes with chinese airlines what's your sense of that market it's so critical to the global aviation -- commercial aviation market what's your sense of where it is right now and its ability to snap back? >> yeah, so, china was the first one to enter into covid, beginning of 2020, and the situation today is different from the rest of the world, actually that's the place of the world where we see the slowest recovery when it comes to going out of covid still, china has rolled out its 15th five-year plan objectives, and it calls for an almost doubling of the traffic of the aviation traffic in this period of time, so they need our planes they've been taking delivery of planes over covid, 20% for us, 20% of our deliveries in 2020, in 2021, were to china, so they need to help manage their

backlog and this is what they have done. >> let me ask you about an interview we did this morning. you guys are in a dispute, they're taking you to court on the a-350. they say that the issue is with the composite skin or the skin of the aircraft, the paint and some of the other issues is a safety issue i mean, he was flatout saying, it's a safety issue. he's calling the a-350 unsafe. when you hear that, what do you think? >> we just clearly disagree with this statement we see no safety concern it's obviously something we've been looking at very carefully and it's been the case as well with the authorities, the aviation authorities, so saying that there is a safety concern so strongly must come with some more substance, because it's very safe. extremely safe and i don't like to have someone saying there is a safety concern without bringing the substance and the evidence we've been working very hard, and there's no safety concern on that very topic.

>> you know him and you know how he can make flamboyant statements in the eyes of many people do you think he's just trying to grab the attention before the court case >> i don't know. there is a court case ongoing, and we have to -- it's been the initiative of qatar airways so we have to respond and take it very seriously >> still on track for getting the a-320 production up to 75 a month by '25, i believe? '26? >> we are working flat out all the supply chain is mobilized to ramp up, and yes, we'll go to rate 75 around 2025. that's an important objective to serve the market >> guillaume fouray, here at the air show back to you. >> thanks, phil. now, outside of tech today, it's the banks driving the market, pulling back off session highs but still higher goldman with a big beat, bank of america more of a mixed quarter. on the data front, home builder sentiment plunging as buyers

pull back. see bank of america pretty much flag, goldman-sachs up nearly 3% "tech check" will be right back. (vo) get verizon business unlimited from the network businesses rely on. like manny. event planning with our best plan ever. (manny) yeah, that's what i do.

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welcome back, the slow-moving chips act funding causing frustration among major chip makers in the u.s., especially as other countries are ramping up investments in the industry global foundries now joining forces with st micro, to build a new factory in france with the

help of eu subsidies without the support of the u.s. government, what's ahead for domestic chip production here to discuss, global foundry ceo thomas caulfield g great to have you back what's the difference between what you see happening in europe and in the u.s.? >> well, first, thanks for having me, and i think that's different is that a sense of urgency to actually start, you know, getting capital deployed to go do this, and what's ahead of us this coming week, i think it will be a major movement for the chips bill >> what do you make of these rumblings that some others in the chip industry, who don't actually manufacture the chips they design, might balk at the terms in the chips act that benefit manufacturers? what are your feelings about that >> no, i think there's broad support across the industry about getting better balancing in manufacturing in the u.s.

again, 50% of the demand for the semiconductor industry comes from u.s. companies. everybody knows we need to get this done. there will always be a certain amount of noise, making sure that the guardrails put in these bills don't derail things, but i haven't heard of anybody not being supportive of this >> thomas, i'm so stuck on these statistics that the american chip making capacity has fallen so dramatically from the 1990s just looking, big picture, obviously, there's debate about whether this current plan is -- this chips act is exactly the right thing to solve this problem. do you think that this is going to be enough to ever get the u.s. back to the same capacity, percentage of the total that it was, you know, a couple decades ago? >> well, look, i think, first, we've lost some time here. it's been two years in the making now, going forward, we're starting with $52 billion, chips

bill, $37 billion of that will be dedicated to manufacturing. and i think when you see the economic activity you create for bringing manufacturing jobs, you'll want to continue to make investments. and if you think of the leverage, $52 billion of economic support from the government will be matched by three times that amount, 30% or two times that amount, so really is $150 billion that will be looking to be added to create capacity in the u.s. >> so, thomas, but as you look at your joint venture in france, i know citi is a little concerned that it will be a drag on margins how do you respond to that critique, and what's your outlook on these kinds of joint ventures outside of the u.s. and the potential those offer? >> i say just the opposite we would never do any deal that's not accretive to our business, and the fact that we're partnering with sp is because going to a new facility creates a lot of capital

intensity and higher costs and being able to leverage the economies of scale at existing facility with sd micro, and running our unique recipes and process on tools that we will own and operate in that fab, we'll be able to leverage the economies of scale and be perfectly fine to have the kind of costs that we need to produce our products and have the differentiation to create those products >> thomas, it's not the same business, exactly, but last week's announcement that panasonic is going to build this battery facility in kansas had a lot of people wondering whether or not the political invitation in the united states for production and capital now has a tailwind, where you got global giants starting to think seriously about expanding here do you think that's true >> i think part of this is more about, you know, we spent the better part of two decades swinging the pendulum to full globalization, and now you're seeing the pendulum come back a little bit it will always overshoot from the ideal point. it will probably go a little

toor to regionalization. i think that's what you're seeing too much of supply chain security, sovereign security, economic security depending on having manufacturing and technology, you know, predominantly semiconductors but battery technology for the electrification of cars. i think what you're really seeing is getting some of that localization that we've lost over the last few decades back into the country >> thomas, why is this so hard i've been critical of certain kinds of subsidies, you know, that are trying to lure plants with kind of squishy numbers of jobs you know, huge tax breaks. even amazon's process on hq2, but chip manufacturing and the ecosystem that that draws seems to me pretty straightforward i mean, it takes quite an ecosystem to build these things up it takes, you know, specialization, people who are highly educated, there are benefits to higher ed all across why is this so hard for the u.s. government to do, do you think

>> look, i think there's broad bipartisan support for funding what's called chips and then the fabs act, which is credits to semiconductor manufacturing tools. the problem has been, all along, that other things are being folded into the bill that are more polarizing. and so, you know, i spoke with senator schumer last week, as i have, and secretary raimondo, and i was urging them, this is the time to cut all the other extraneous things from these bills, let them stand up on their own. let's get chips, fabs, as stand alones and let's leverage the fact that we have broad bipartisan support to get them through. that's what's going to happen tomorrow senator consuschumer is bringint bill to the u.s. senate floor. >> so much attention on what happens tomorrow but how do you address these concerns that this could disproportionately benefit the likes of intel do you really think that everyone's going to benefit

equally from this, or how does that play out? >> i think there's some industrial dimensions to this. we don't want to create unintended consequences of changing the competitive landscape. and that will have to be thought out as money is distributed. but i could talk about gf since we are a for a host of customers, we don't have a product, so we're not in any kind of conflict or competition with our customers, and so pure play foundry is probably the straightest way to get funding for manufacturing capacity and not create any second effects on competitiveness. >> finally, thomas, you know, a little more of a squishy question, but how are business leaders right now absorbing the idea that they somehow need to make capital allocation decisions based on their patriotism, right? their corporate citizenship, based on the country in which their headquarters what do you think when people say you've got to do this as a good american or something

>> well, as a company and as an industry, we need a more balanced supply chain around the world. we operate in singapore, the united states, and the european union. in fact, we're the largest pure play foundry in all of europe, and so we will invest in our global footprint, we're putting it on where they need it whether it's funded or not, gf will continue to build out its footprint in the u.s. at our new york site. the difference will be the rate, the pace at which we go, and the scale at which we will do it. >> all right thomas, thank you. ceo of global foundries. >> thanks for having me. >> our ylan mui spoke with the ceo of lockheed a few moments ago and has those comments good morning. >> reporter: good morning, carl, i spoke exclusively with lockheed's ceo about a potential for the vote on the chip's act in congress this week. that money has become a political football, and the message to washington was clear,

enough with the delays >> we're a long cycle industry, and the sooner we start the investment in the -- for example, the microprocessor supply chain and other supply chains that we need to make stronger the better, and the more we delay the longer the delay will be in us having effectiveness. >> the biden administration has been hammering home the national security risks of the chip shortage there are about 250 microchips in a single javelin missile including about 50 in the control unit alone the ch 53 k helicopter has more than 2,200 chips >> we can maintain current production, but if we look down the road and say, you know, there's a disruption where china, for example, would withhold some of that microchip supply chain that they control or if there's some kind of issue in taiwan's ability to keep producing down the road, we're going to have a fragile situation that's going to be fairly significant, not just for the defense and aerospace

industry but really for all industries in our free world economy. this is important to get going quickly because we can't afford really to be this fragile in the future. >> he said the goal is to get innovation cranked up again here in the u.s., and he's pushing congress on the substantive need for action democrats have said they want to start voting on the bill as soon as tomorrow. a key republican senator, john cornyn now says he supports moving forward, but guys, we're still waiting to see that final text back over to you >> ylon, indeed, so speaking of the chips act, i was hoping for your expertise, your take on something that thomas was just saying it seems like in congress there are these things that are so controversial that nothing gets done people don't agree so they argue and nothing gets passed. then there are the things that are so agreed upon that nothing gets done because the bill that includes that thing gets larded down with a bunch of other stuff that they disagree on. what determines which things get to thread the needle and sail

through because people agree with them, and there's so much political peril that they dakota want to log them down with other stuff, and why not the chip act? >> i think the original problem here is that folks felt the chip act had so much potential, could carry so much weight that they could hook a lot of o'different things onto it, things that had to do with tariffs, trade provisions, reviews of outbound investments, things that were extremely controversial. they sort of ran out of time to negotiate all of those different factors, and if they wanted to get the chips act moving, they had to unhook all of those different provisions off the engine of chips skcht and now it seems like there's an agreement, not just the construction of fabs but the equipment that goes into it, all the tooling equipment that goes into a fabrication facility, that is only piece that can move because they want to move with urgency. if they had another year to haggle this out, maybe they could come to some sort of

solution clearly they've already been debating this for two years. what we're hearing from the business community is that need to just fish or cut bait and move forward >> certainly a long time in coming, thanks so much and as we head to break, want to get a check on snap. snapchat calling and messaging coming to the web, no longer just a mobile app. rolling out snapchat plus in english speaking countries that stock is up nearly 4% we're back in a moment new projects means new project managers. you need to hire. i need indeed. indeed you do. when you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria. visit indeed.com/hire and get started today. space. the boundary of human achievement. the new frontier. ♪♪ eh. ♪♪

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a new call on tesla today from deutsche bank identifying a short-term buying opportunity ahead of earnings wednesday they say. analysts arguing if musk could beat low margin expectations saying the company's done a good job of controlling costs, raising prices and they're expecting management to reiterate full year delivery numbers. bar clay is out with a preview predicting a beat but, quote, see greater focus on free cash flow given ceo elon musk's comments last month that berlin and austin are gigantic money furnaces right now hmm, well, tough to keep your money around gigantic money furnaces, especially true in

this market, guys. >> yeah, that quote is going to stand the test of time meanwhile, one more thing, tech giants are making changes to their office space the shift in working trend thanks to the pandemic causing meta and amazon to pull back on planned office expansion in new york city. amazon also hitting the pause button on construction of six new buildings in tennessee in washington, the company looking to redesign those spaces to make them more appealing to hybrid workers, julia i did see i think it was mizzou hoe this morning saying downside risk for reits because for a while big tech buying land, office space in manhattan was seen as the contrary trend and clearly now it might not be going that way. >> it might not be going that way, and certainly ripple effects there. you have to look at how these different sectors are so different in terms of expectations of where their employees are going to be and what that means for their office space. in the financial services sector, they expect employees to be in the office the tech sector is really trying to hold onto and attract new

employees by offering them that flexibility, john. >> yeah, i think the tide might be turning, though on this younger workers, a lot of them do want to come into the office. i know a lot of mayors want the workers in the office, carl. we'll see what kind of incentives pop up. >> yeah, and restaurant owners who operate a lunch crowd. we've been hovering just up 200 points, let's get to the judge in the half. >> carl, thanks so much, welcome everybody to the halftime report, i'm scott wapner, front and center this hour, the great debate over the rally whether stocks can keep moving higher. we'll debate that, of course, with the investment committee today. joining me for the hour, bryn talkington, steve weiss, and right here on set joe terranova, check the market, see where the trade looks, looks good on this monday 31,481, we're trying to get to 31-5 here. we've got the s&p 500 just a touch below 3,900 right now, nasdaq's good for near 1.5%, 301 the yield on the