the competitive dynamic outfit of faculty duplicity luke seems like it has slowed over the last 8 to 12 weeks. it will be interesting to see whether that position and netflix for a better q3. >> we are able to squeeze you in. we have moved come on as well. good to have you on. this will be an interesting report tonight. will be watching that. maybe take a pause from the old man. been watching that? >> no, i need to. >> make sure you join us tomorrow. squawk on the street. squawk on the street is next. a tuesday morning, welcome to squawk on the street. live at the new york stock exchange, looking for a gain at the open even as ibm and lockheed will open lower. gas prices helping sentiment a bit and now falling for 34 consecutive days. our roadmap begins with the

market set for a positive open. gas prices falling is a soft landing in the cards. $44 billion standoff heads to court today in a virtual hearing. twitter is seeking to expedite a trial against elon musk for his decision to try to terminate that transaction. and economic morning, apple reportedly repairing to slow hiring during the course of tech companies that are putting a lid on new -- let's begin with the markets looking to rebound after yesterday's decline. there was a bloomberg headline describing the stock market as deserted. meaning volume and liquidity still owed. they are winding up with these weird swings. >> yesterday was a good example. the story drifted out about apple and how they are holding hiring. i said is this going to happen every day? will it be advanced micro? some company will be slumber j. it just doesn't matter.

some company i'm not going to hire. we get the sudden well, there may be a slowdown. i am so sick of the while it may be a slowdown. it is obviously a slowdown. what you are seeing are some companies taking the action that we would all favor. why should meta-10,000 more engineers than it needs? why? >> it shouldn't but is it reflective of their preparing for more difficult times. is not going to be a part of the guidance that we get when reports or when apple reports? i was looking at apple yesterday. i said everybody is hiding in apple. if that bricks, the market breaks. the concern is this is a forerunner of apple saying you know what, things are slowing for our business. that would not be good. >> if we think that everything is set with growth, we might as

well say every company is like -- it's not, these companies are dependent on people buying things. they are dependent on advertising. and maybe for the longest time, their cycles were just secular, not real cycles, but just this way. we are hearing wait, these companies are hostage to j powell. they are big gdp plays as well as secular gainers. i just don't think that we should start holding them to the standard that everything they do can't be stopped by the feds. the feds stopping everything. they can sell stuff. someone has to buy. >> it was a theme running through goldmans quarter. they talked about renewing the practice of calling employees at your end. david solomon talked to jim last night about the overarching impact of inflation. take a listen.

>> i think what i was trying to say is there is inflation everywhere and as i talked to ceos that have global supply chains, they are not seeing it level lafayette. i think we will see tighter monetary conditions to control that but i will not project that trajectory. we are trying to be nimble to support our clients as they navigate would will be a period of tighter financial conditions to tame inflation. >> i am hopeful at all times when i approached ceos. i can tell you that my hopeful personality has led to quick contradictions about the notion that supply chain is fixed. we speak to j&j was speak to cfo, what does he say? he says look jim, no, not yet. we hope. there are still supply chain issues that as greg taste said

yesterday in a remarkable interview saying please raise rates. we cannot get the job done unless you raise rates. i am thinking why records he said he can't get enough engineers. he needs the economy to slow down. we all know grade taste as well? he did not give oh everything will be fine. he said we are not fine. our industry is not fine, we can't find the industry. >> that is a weird way to attack the issue i think. please raise rates of the economy will slow so i can hire more people. i am not hearing that from a lot of other businesses. okay. >> i like it because i think there is a mismatch of engineers. did you hear what some of the saying about how it is harder to get a job here than it is to get into stanford or anything? making the point that maybe there is a shift carl if you are a smart kid just so you

know what, maybe that gauntlet that i have to go through with google and facebook is it worth it. me the seven interviews that facebook only to be told sorry -- now. i have a friend, i told you that i was backing the goods he went to bed of the shopping bag bag or in the hamptons. i asked for his resume and after two weeks turned him down. that is where we are going. >> jim, whether it's chips or engineers it's the dollar as well. it is a quarter last night and j&j today trimming which is interesting. i wonder if you think the market looks through that. >> that is a great question. they didn't look through for ibm. there is a moment of controversy it is not a great conference call. we are not resenting countries, give us a break. there were no brakes given on that call. i found that call i am going to

use the term unruly. unruly. everybody had an issue for a different adjective to destroy to describe calls. >> i think that arvin -- >> it was. it is one of the strongest performers of the year. but, arvin christian was saying look, we are going to have great growth and cash flow. people said it's the lower end of your cash flow projection. and then people start saying what happened to all of those great divisions that you are doing that was exciting and fast-growing? i am going tonight, what about weather? do you ever look at the weather thing? how does it fit into the overall strategy? that was supposed to be with? watching. don't come here i don't need you. >> they own weather.com. look at this david. and this very moment it says it

is sunny. >> actually i checked oxford in england and it is 100. >>, oxford mississippi? >> richman 81. >> 100 degrees. they don't have air conditioning. >> do i need ibm to choose the weather channel? >> what did you just say that was an obvious question? the answer is now. not i don't know. >> i think the twitter court is going to be interesting. we will talk about that soon. >> chapter has covid and she didn't stop it. >> it is remote. we will talk about that in a minute. can i come back to the market, though, given all of the different things you have mentioned this morning?

>> it's not a mosaic on the things that really matter. >> the market is impossible. >> that's not valuable. >> that is reflected in the fund manager survey. cash levels highest since 01 equity allocation lewis since lehman. heart mixes full investment capitulation suggests rally in the coming weeks. >> that same simple is fantastic. opus talked about liquidity. where is the liquidity? liquidity comes back if there is some reason for it to be there. >> nobody is running risks, so to speak. you are talking on the institutional side. >> are the russians going to turn the gas back on? are we still going to have the great unsubscribe? you just go through this. >> we always do, we always do have issues. >> why don't we accept that and

say okay >> they ended up doing things. >> the inflation versus supply chain versus china on and off versus the russians. it is a puzzle. >> you don't just throw your hands up and say carl, i don't really understand i am going to go do nothing. >> know what your argument as well don't worry about it and buy it. it is more sophisticated and rigorous than that. i actually resent that. >> you do? that's kind of what i heard you say but apple, though. it is okay if they think slow. >> the whole market went down because somebody said that apple is not going to be that much hiring not. >> the semiconductors turned around. >> i still think the high performance computing the data center is strong. when i read to say amazon canceled a lease and kalamazoo orphans i'm supposed to immediately short amazon?

the hedge fund people, they are desperate. i just suggested that they go on trafficking and try to figure out the home run derby.? i is good. >> a right is 21. >> i can't really imagine being that big and strong and talented. >> just talking about something -- >> that has been tight when i am doing things. >> i give you a little bit extraneous stuff. let's bring me right back. >> i am glad to recognize that. >> national jazz averages dropping below 450 a gallon the first time a couple months. gas but he tells us 35 states that at least one station 399 or less and sub for average in south carolina texas might be joined by other states today. >> it definitely reached a

demand destruction. we got demand destruction calls yesterday. got to the point where people just that all right, i am not going to do that access mild. however i would point outthat facilities are pumping more, the russians are pumping more. if we had d hear from the white house, he would say the independents are pumping more. we are pumping from everywhere. this is the refining margins being crushed. the refiners at all point i did say that valero has the best quarter of any company. the refining margins are a disaster. that is a bad looking chart. >> we have to downgrade a pioneer today. although piper -- proxy. >> you must just keep hitting the wrong key. he has got like moxie.

>> he is almost 20% of it. >> there is no stopping him now. that downgrade which i regarded as heresy. my trust owns it. scott shuffled men's it, it is the number one dividend yield in the s&p and i'm supposed to toss it out. >> they are talking about taxes and some other non-core issues, i guess. >> i think that these research departments say look you have to cut one of them. you can't just ride around with eulogy and pioneer. give us one. okay we will sacrifice pioneer but throw pioneer. that is the main volcano we call that, that was the main and the volcano downgrade. underperformed to one of the greatest managers. scott show feel just saying i am going to destroy that guy.

>> which fires he destroying? the analyst? that is a waste of his time. he has bigger things to worry about. competitive guide. and ace's short series he wants. >> when we come back we will talk to twitter as david promised facing off with him on desk in court today for the first time. will talk about what this hearing me tell us about the trajectory of the timing of the secas. we are trying to keep green arrows going to the open. squawk of the streets are back in a moment.

twitter and is almost will be heading to court today virtually. it is the first hearing. this is on a motion to expedite the actual trial that would be undertaken as twitter has sued mask saying you can't claim a breach for the $44 billion acquisition he will hold you to it. we don't know when that kicks off. have to kick off 11 a.m. eastern with his hearing in front of chancellor. mccormick, it is going to be remote. we might get a decision very quickly as soon as today is terms of when the actual trial

will take place. musk says hey, we need time. we need time to spend investigating our claims and our belief that there are a lot more on the platform than twitter says. we get to the legal ramifications in terms of if they were able to prove something like that. twitter responds and says hey, you know what, right now you are just trying to you are hurting our business. by the way the core issue is contractually irrelevant sideshow that mosque wants to use the disparage twitter among this litigation. 's proposed schedule calculated to complicated too. it is up to the judge's discretion entirely. october 24th is on the merger times out. it gets extended automatically. it is not a real date that she has to be concerned about think likely that she will go to the

next trial. as to whether musk and has team can somehow prove not just fraud but proved twitter knew it, withheld it, it's material, and therefore would cause a material adverse effect on its business. having to have been then. they have to go through a lot of different things. it all begins with whether there even entitled to the information under the merger agreement. >> coming have that conversation from always know

when he wanted to sue somebody. they dissuade you from that because it may be more difficult. >> they talk about how i may put down 200,000 and made a quick 2000. david, a couple things that i need to know, if the cfo had six meetings with them and offered them everything that was available and there is no way that he could possibly be lying, what does what does the 10th of mccormick, what does she say to that? does that just dismiss? >> yeah. the question will still be where she orders specific performance if the preponderance of evidence is twitter obeyed the merger agreement and must reached it. >> the deco pack you mentioned yesterday. and i guess the company that was bought by kohlberg, that

was her that was a question of whether the financing could withdraw and she said no. in many ways he returned has of the actions of the sponsor. as a said yesterday, these things change over time. right now that financing looks very solid and doesn't seem to be a concern. the question is going to be when we get the child, which we should know by today and whether or not musk was able to prove these things. he was entitled to the information and didn't get it. twitter knew it and hit it and it's material. is just lies. >> there are very few people who study twitter like i have. >> really? >> yeah. >> in your spare time you do that? i know you never sleep.'s what was the conclusion of your study? >> my conclusion is a chance for mccormick is going to tell

yvonne mosque to go to hell. >> i'm still not sure what that actually means. >> it gets it means get out of my court you joker because you are buying this company. and while you're at it, i want a tesla. for wasting my time. >> tesla is still incorporated in delaware. >> go to hell. >> by the way, while you are at it, put a shirt on. >> she is not going to say i am so sick of you, she is going to say unless the whole team lied, which they didn't, go to hell. >> i feel like we are done with the story, now. >> what, if you go to hell? >> we will see what we could at 11:00 a.m. eastern time. cramers matt dash coming up, and the opening bell. don't go away.

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we have talked about gasoline and the energy security crisis in europe. we will get further into j&j. netflix tonight, there is boeing news. lockheed, disney, the opening bell is coming up in 5 minutes.

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the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. >> well, here we are, the new york stock exchange. it is dazzling. i love it. let me tell you point blank, we are not changing anything around here. >> that was done last night during that monies first episode.

>> we have so many great people. there wasn't a soul i talked to. they didn't say well, it was a well. all right, that being said, let's get >> reporter: darshan. i want to talk about the ceo of lockheed martin. is a solid citizen. when i see a number, which we expected, expected 26 and 2155 i freaked out. the fact is there are some timing issues and supply chain issues. i asked you a question. we are and a proxy war against the russians. lockheed martin should not be missing out on missiles and fire control. i would think if you were trying to defend ukraine he would be ordering all the missiles you can. you didn't detective from what they told --

>> i think of lockheed martin is a natural, we saw them on face the nation. you do need is longer-range missiles because you're putting your own people at risk. i am not giving up on lockheed martin. it's to. >> let's get to the opening bell this morning. the big board volunteers of america the greater new york working to end homelessness in greater new york by 2050. is marketplace celebrating its listings. selectors the end front and center of a and carl i will tell you it was impenetrable. they wanted it to make it sound like everything was good. i think there are a lot of us who are tired of saying well,

you know what, we don't really understand. >> maybe. be of a today, despite the relatively disappointing quarter, we viewed a larger turnaround. that is revenue growth and free cash flow improvement to progress. they turn it a little bit 155. >> i think i am more concerned with how the analyst. i wanted growth. the analyst were supposed to growth. they got growth and now they run cash flow. what's next to give them cash flow. mixes cervical existing like ibm's greater. ibm is one of the few tech stocks that is held up to this period. i struggled to say what are been christian can do to please them. the analyst and ibm seem to have more power than they do

and almost any other stock. i am not clear why but they sure do. >> we are 11% and turning season if you look at market. we have only got seven big one so far on monday post earnings they are outperforming the market by 200 base hit. >> is a very big surprise. the banks have incredibly low multiples. the second should be very good. there are still dividend increases coming. one of the things we all know about banks is every time the fed raises rates, it is a check to them. >> bank of america yesterday saying income could rise by as much as $100 million-$1 billion. >> from doing what? >> being a bank. >> is not adequately reflected in the stock prices? >> no. that is what i am saying. >> you had to slow down and

some capital market sector. certainly ipos. it is not a trickle but it is slowed. >> i question whether it is going to pick up even the fact that we haven't tested the mettle of the assistant attorney general. i would say that goldman sentiment of the trusted client did pay off. they had very good wealth management. morgan stanley had very good wealth management. these stocks are not expensive. the one that i am continually perplexed by is how great jane frazier is going to be doing. and the book value is 10. when they untangled mexico, i think you are going to see a simpler situation where people will say you know what, i like -- i think james did a very good job. that was a very good quarter. she is on finding a lot of things that haven't done that well.

i went to the city. they said sorry, we have nothing to do with you. i need you to help me. they said no, there is nothing we can do. >> what the advantage of that? what is the advantage of having a great bank that you can't bank with if you have a city account? i thought that was just ridiculous. >> well, generally the stocks, now we have heard from the big ones as jim pointed out, the regional banks are yet to come. they have performed pretty well, other than j.p. morgan day one. >> there was a hurricane on j.p. morgan side of the street. >> is going to win right through them. >> it was more of a tornado. or those thunderstorms. >> i don't know what to say. their quarter was flabbergasting the not great. it wasn't terrible.

it just wasn't great. the quarter i found rather incredible but let's point out that trading drove, you know they wanted it to be everything else that trading. trading was amazing. i thought they would say wait a second, same old goldman. it wasn't. you are onto something else. >> i am on to other things. what have you got? >> helping to leave the dow. boeing is up 10% for the month. we got the delta orders yesterday at farnborough today. two things, nearing the order for the dream minor and then 777 partner 66 next jet. that is 1 billion right there. >> i did get tired of waiting for the okay. i sold some attire but sold some badly for my travel trust because i was tired of being haggard by my partner.

>> affected by who? >> my partner. >> only. >> yeah. i knew you were not focused on anything i was saying. >> i kind of hurt it at the end there. >> it's true because even though it's not a public company we have been focused in part on these the plunge and valuations for private. >> doing alarms? >> i'm doing until card. >> we did it a week or two ago. was at 45? and then tiger and sequoia are in an was it six? so instacart by the way back in march this was cnbc.com slashed its own valuation by 40% to 24 billion and now a bloomberg story in the last 24 hours says that investor capital group cut

its own valuation on instacart for to 14.7. what about a company that may have been valued as high as $39 billion. >> they were all value to high, right? >> not that long ago. the question is many of these hedge funds, where are they marking things? are they marking them? are they leveraging it all? these continue to be questions we have to grapple with to some extent to understand where pressures may live. it is worth doing. these were enormous companies that were expected to become public. instacart certainly we have heard about. the one that stands alone, though, is bike dance was still powers on even with tiktok doing some things. it is the members i've heard in terms of the free cash flow of the company are enormous. i have not confirmed them.

>> what would happen if mark zuckerberg just went off the rails. reels is doing very well. no one listens to me. i don't want it to be one of those situations where there is so much money spent on meta- verse. i bought my class. i can be in the meta-verse with you looking bus talking with you and frankly there is an actual me trashing. do you have me trashing mark to burke that is the best moment. >> the one you have is you try to high-five him and to keep getting him in the head. when you're doing the high-five, this is what it's like, let's do high-five with my eyes closed. >> okay. i don't think the directors taught that. >> you have to manipulate this

thing of which mark was much better at it than i was. then i tried to shoot basketballs and i mostly shot them into the stands because it just wasn't good. as you get proficient, this is my favorite, i set in zen garden and was just able to relax and just seem like i was in the presence. you know how you are supposed be in the present, i was present. >> in the meta-verse which is a fake place. >> i was there. >> i'm sure it's going to be huge. i have no doubt.'s >> i will be there. >> it's going to be great, carl. >> we will find out more when snap reports later in the week. i don't know if you noticed dizziness upfronts 9 billion best ever. and netflix tonight which by

the way last quarter down 35, prior quarter down 22 on earnings. so implied volatility down 14. this morning it is pretty conservative. >> i just think the stock is low. it used to be in the 20s. >> once you -- and 50 billion -- >> i remember that well. >> people are fighting to keep it anywhere near that. reset the possible, that news about disney i am lowing my price on that on that good news. that is what people seem to do. how about the insider has this article about how much -- there was nothing new. >> i agree it was long gone. he has nothing to do with his --

love them or hate them. whatever it may be. >> why would you hate them? his decisions are the one that will reflect in terms of decisions. >> where you there for that day? jim pitched the idea. the new theme park in new mexico. >> the quarter goes from colorado to texas is the fastest growing in the country. i don't want to put it in texas because with that we have this problem with desantis. >> understood. >> there are lands of enchantment available between 330,000 acres right with the highway. >> this is what you should be spending your time doing. what about water? >> absolutely fine on water. i have to tell you this could be the beginning of a discussion . it is not just about disney plus, i think. bob knows theme parks.

>> i would tell you if netflix disappoints again today, disney stock will go down again tomorrow. >> even if they do pick up the big contract and raise the price of espn+, it doesn't matter. for the if you are a gambler or you play fantasy, you have to have schaffner. i thought that the deal know, the whole bundle is better. >> lewis showing more strength. those are growing platforms and dizziness bundle. >> one of the things is that often said, i talked to brian, my stage manager. i will say hey, are you watching so and so? and then i say what is that on? what is that on paramount? >> nobody knows what anything is on. nobody knows. by the way a lot of people don't even know how many streaming services they have a lot of people in an environment like this are turning fruit.

they will tune in for stranger things and they will unsubscribe. i call it the great unsubscribe. when they have five or six, they will absolutely pick and choose. >> if everyone goes and looks at the cable bill i think you will find they are paying for streaming a lot more than they thought. if apple plus gets the directv rights the nfl i think they can charge $10. i was a doubter early. >> they had no library but they have a lot of very strong content right now. >> watch the mike today, morgan stanley. >> people disregard that is saying rising high. >> but is a fourth high on cinemark the stock is not reflecting the return of the movie guards. >> i think that everything that is good for them is good for amc. you know, you have that dual class of investors. there is the class of investors

that is interested in every single start in the class invested is only interested in amc and game stop. >> i notice you have been using that term. what does that mean? >> they only know two stocks in her mood she was a guest. >> he did something really positive. he hauled it out. did you read the interview? it was positive. >> that has not been viewed as a positive. he is in allocator. >> that was strange. >> hissing sorry, i have to is fun to find. nobody can do that like anthony. >> use on over gratz saying big coin can be i guess go to 500 k but in five years. >> a lot of the people there on

some of this rather extraordinary other coins like does coin. that was an interesting thing. >> he did it at the right time. it went up a lot. >> because those people are incapable of investing losing big coin and adam aaron and can stop i am no longer considering them investors. i am urging them to josh kings at enough vandal these are all really good for the amount of skill that they have and they should get the heck out of our markets. because they do not represent what i regard as capitalism. they are gamblers. they are hoping for 00. a gambler, he was better than that. and he just want to 00 which is very hard to get. so that is it. stalkers i am done with them,

they can complain. >> they are not one of us. >> they are people who don't care about making money. they just care about beating up on people. that is not acceptable. >> you think capitalism can just go and beat up on someone? >> know. i don't. >> i hate the sure owners that own disney. i am going to crush them. i'm going to get 50,000 investors to crush bob jpeg. david said he liked eiger over jpeg. >> i did not say that. >> we know what he is working now but we won't get into it. >> i know what your game is, it is not going to work. >> all dow stock screen except ibm. let's get to bob pisani. >> 11 scepters up in the s&p. this is a nice start because it is a broad rally. we have almost an 80% upside. all 11 scepters up.

they are picking on the growth of your parts because this is a bull narrative emerging about the fourth quarter. semis are strong, communication services, this is the growth of your market banks. what is lacking? some of the more with the consumer-oriented healthcare for example consumer staples lacking although still on the upside. who have had three fairly good days for most of the travel names. so, some of the crews shot, cruise ships, the airlines doing a little bit better. still some hope there on travel continuing appear. the importance there is big tech today. even apple is of of the upside. the big names all up about 2%. apple is flat here on the day. it's been a pretty good considering what happened yesterday. for yesterday, maybe they are selling a hiring story. remind everyone where the revenue comes from apple. only a third of avenue apple's revenues are in the united states.

it should be no surprise given what's going on in europe and the covid lockdowns in china there may be some kind of stalling and sales. this is been widely anticipated. the minute this happened late last night, we've had people pointing out these facts. we had a big thing last night, the street is well aware of weaknesses quarter. we believe it's looking past due numbers to september and december quarters with all eyes of the iphone 14 production demand-side. apple is continuing to focus on a robust production pipeline and services ramp into 2023. don't look at this, folks. don't look at q2 and q3, q4 and 2023. that is where the bull narrative is right now. the bulls are arguing for a fourth quarter rally. that is when you see people picking on the sectors. people argument is this, the macro data will improve. payrolls will hold up, sales will hold our. rate hikes on out front and loaded and the cuts are going

to in 2023. that is part of the core argument for why you should consider a turnaround in the fourth quarter. earnings estimates are already lower for key sectors in the market. it is energy that is higher. you can see some of the numbers going on. 2022 we are up 10%. these have been sticky numbers. have not changed much. it is much reason because energy is up. banks, consumer discretionary and communication services have been dramatically lower. and technology is fairly steady over all. the important thing here is okay for the fourth quarter according to the bulls. finally, just noting, please monthly bank of america fund surveys are starting to look like a monthly suicide note because pessimism levels are through the roof. these are short-term sentiment indicators. 79% expect profits to deteriorate.

's there is the big debate. and they are reflecting that anxiety. there are some amazing charts. thanks. as we go to break, speaking of r survey no longer expect higher bond yields. we'll be right back. ♪ i may be close to retirement, but i'm as busy as ever. careful now. - thanks. -you got it. and thanks to voya, i'm confident about my future. -oh dad, the twins are now... -vegan.

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take a look at some dow gainers. there's dow at the top of the list nike follows boeing, intel and axp helping to lead for the second day in a row. their earnings are on friday we have just about every name in the green now. dow is up 235.

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not nearly enough considering the amazing quarter, and we have to talk about arvind and ibm there are many concerned that they may not have been able to turn it around. down 7%, that will take you back to may. if you were to quiz my partner right now about what stocks -- we'll see -- who do i have on tonight? >> luckily we don't have time, david, but i know you would know. >> of course i would know. i know everything. >> twitter and i will never tell, jim, don't worry, about all the things i known can. we'll see you at 6:00ic jim.

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good tuesday morning welcome to another hour of "squawk on the street. pretty good open here, all sectors red dow is up real ly. we will tell you why that stock is down, in just a moment. halliburton also beating estimates. hear more from jeff miller tonight on "mad money" at 6:00 p.m. finally, j&j beading forecasts we heard something similar from ibm.

as leslie said, second quarter records continue to roll out, netflix on deck tonight. joining us on that david harrow, thanks for the time today. >> good morning. >> a lot about washout sentiment. does that set us up for somebody positive in the near term, or not? >> i'm not so concerned about the near term, but certainly in the medium and long term what has hat is that negativity has transferred into lower valu valuations. >> as you know, i do international.

these are hurting u.s. companies, but they will help foreign companies you have a lot of things happening from those with a good time horizon, given the valuation opportunities. >> are you focused at all whether or not energy security takes a hard pivot at least italy, checzechoslovakn and hundghungary >> most of the companies are starting to take steps to broading energy production, by retiring coal plans, as you

kn know. >> yes, there is a problem with natural gas, energy says they're all said for this year you're no changing anything? >> they could come to an -- if -- to power their economy that doesn't concern you or are you making changes proactively? >> we have to look at where a company generates profits and cash flow streams most of thus

european companies have broad spec spectrums. >> these companies, though based in europe, their share prices have been hit because of these fears, despite the fact they do have production and sales elsewhere. and some of these markets, there will be issues, possibly but you can't wave a won't and sayers their entire business will go to zero, because they've having problem in the country in which they're domiciled. >> david, it's leslie picker here there's some speculation the ecb could go for a 250 base point hike

we've seeing a mixed picture here in regard to the financials, as far as the benefits and drawbacks what are you expecting and is that changing the cal calculus >> we look at what are normal earnings, normal interest rates. do we do imply and assume there will be some degree of lift i expect they will there are still negative rates in many places this is going to come to an end. not only will that help their interest rate suppress, but don't forget a lots of reserves are earning zero or negative rates.

all right we're starting to see some benefits from the more medium and long-term rates combined with some of the energy issue we spoke about earlier, would that be a negative, though >> i think inflation and energy will have a larger back than higher interest rates only because the level is so low they could clearly go above negative, or 1 1/2 before they materially impact it. the other thing is, keep in mind, in europe the consumers are not as leverered as the

anglocountries, we'll call it. italy very high savings rate, very few mortgages, a lot less consumer borrowing i'm not as concerned about the impact on the consumer now just getting into the 1% to 2% interest rate range. the big worry, of course, is the inflation and do we need demand destruction. what we should be looking at is reply creation you can do demand destruction, but how about this how about shifting the supply curve to the right and having more output at lower prices?

i think if european countries and the u.s. start thinking this way, this will be less of a problem. it's clearly a problem today >> a couple questions on auto. i did notice that passenger car registration in the eu down 15 in june, the second worse -- actually the worse june since '96. when do you think that consumer mindset shifts this is a very good question it brings up a very interesting dicot mick, because car sales are down not because of the demand, but because of supply, so because of the bottlenecks, and the chips in particular, car companies have not been able to keep up with demand. the demand for especially the

premium sector, which we're invested in, the demand for these vehicles is still well above the company's able to supply them. they've been responding, of course, by cutting back on incentives, moving their portfolio toward higher margin products despite the volumes that have been dropping, we actually see profits goings up. as a result, the car manufacturers, oems, have still been able to print good margins usee that reverse a bit, but on the other hand you'll have more operational gearing. this is one of the great opportunities, incidentally.

and yield around 7 march or 8% in a situation where they could produce enough cars to satisfy demand really good stuff, david. >> thank you for the invite. shares of ibm are sliding this morning, this after the strong dollar, which we were just talking about weighed on results. kristina partsinevelos has a breakdown for us >> despite the top and bottom line beat, ibm is facing decelerating, and that is pushing them lower today it was helped by infrastructure and a launch of the new main frame any then software sales are also decelerating.

they hiked up prices to mitigate those costs, but given the average two-year length of consulting contracts and the fact that 50% of ibm's workforce isn't consulted expect the company to get hi by higher wages. it also lowered the 2022 free cash flow guidance one, a $100 million charge, even though it was a highly profit at business were $9 hundred million, that currency hit will continue to be felt in the coming morning, warn on last night's earnings call, that most of that was still ahead of us in the second half. guys

>> thanks for that, kristina. as we go to break, a look at the room map for the rest of the hour why one analyst sis july is a make or break for the crypto. and buffett's big oil bet. >> and finally musk and twitter headed to course in less tan an hour we'll break down the latest and what comes next. the big show ahead of us

bitcoin holding above the pivotal 20k level. our next guest is bullish, saying july will be critical for crypto, and contagion risk will decline in the next three to four weeks joining us is analyst john tedaro what is it about the next three to four weeks that gives you kempt we could see some of these contagion risk decline there's been so much noise in cryo right now help us cut through that. >> there certainly has been. what you have seen is a lot of lenders who had significant trouble over the last few weeks, stemming in pardon from the large hedge fund, issues that were going on, and that rippled to a lot of borrowers. you saw it impact several. what you see now, appeared this is why i think the next three to four weeks will be critical,

you're seeing some capital allocators step up and provide capitals to those entities and shores up some of those balance sheets likely over the next three to four weeks, the largest entities, we'll see if the ftx, the finances, ecgs of the worrell will step up and stop some of that contagion risk. likely some of the small players might still be impacted. some of them might go under. so they didn't

>> what level is it that we can kind of stop some of this bleeding from taking play? >> i think to an extent as they go up that makes these a little bit stronger, a bit better but also a lot of their services are -- coin base has an exchange, so that is keep to a lot of these companies to get to work i don't know the precise level we have certainly seen a rally over the last few days my concern is that it may be a bit of a relief rally. i would say, on the positive side of things, to skew bullish, we saw a lot of negative sentiment in the space that typically indicates that you're getting close to a

bottom we've seen leverage come out of the system as well so that's also a kind of positive indicator that maybe some of these names could start to work more, but in terms of a precise level, which i think is a key indicator. i don't necessarily have one >> when ftx the other day said they thought the majority of the deleverages had occurred, you don't think that was wishful thinking >> no, i think a lot of the deleverages -- you're always going to have some leverage system as big as crypto is now

but a lot of that has come out so i would echo a similar sentiment. we will see. john, thank you very much for joining us. >> thanks for having me on all right. let's move on to the etf spotlight. we're focusing on the energy spdr you see it there, more than 28% for the year occidental petroleum is the third largest holding. berkshire hathaway, adding another 2 million shares that gives the -- a 19.4% stake in oxy it has more than doubled this year, making it the best performer on the s&p 500 by a

large margin last week, leslie, when the banks were recording for so long and moving into energy >> the size of his stake is roughly what they expect for this year. so clearly he is making a big bet on energy. given the current environment. interesting that over the past few months, it's just continued to dabble in the shares. >> climbing higher and higher. >> yeah, it is -- i mean, obviously berkshire has a lot of cash, it's always been a question, what is the next big deal no idea if they want to own that company in particular. i've heard nothing, but it does raise the question, at least

to yow point there's a clear rotation clearly playing what is into the overall economy. today abouts the exception, though some of they comments from halliburton. and, of course, the ongoing risk of supply, makes you think that buffett longer term is toward the supply constraint. >> certainly would be, concern the makes proxy for in a exposure don't forget they still own an awful lot of apple at berkshire.

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twitter and elon musk will face off in court. they're not actually going to be in court, because it's a remote hearing. so that they can get musk, at least what theft to make good on what they say as a contract for him to buy the company for roughly $44 billion in cash. were they not to have all of the problems, this could still close very quickly all of the approvals are done. >> there's no antitrust here, right. >> you just need a shareholder vote

you and that has the risk of damaging the -- i think you've got on the one hand the lenders sitting on significant losses that's another key tenet. >> i think the financing is very solid.

>> the 13 billion, as you day. if it wasn't about going down -- it might have been gone quite well as far as syndication you have so much equity. >> not he can decide whatever she wants in a month or not until later in the year. the agreement expire the 24th, but gets automatically extended, so that's not really a concern so we'll have to wait and see. somehow he has to -- that would have affected the company to a

material adverse effect. if you can do all of that, maybe he can get a judge to assign it, but, of course, that's for a later date then there's the ultimate outcome. what are the behavioral remedies >> specific performance is what a lot of people think. which would means mr. musk has to buy the company or face some very significant penalty if he were to ignore that. that is the bull take. not even that long >> and i've spoken to that camp, and that's where. >> guys, we have session highs

>> hey, seema. >> here's your cnbc news update. president joe biden will sign an executive order to expand the administration's tools to deter h hostage taking to bring nationals home would authorize the addition of financial sanctions and visa bans on people involved in hostage taking. the house will vote to protect same-sex amarriages. it has sparked concerns that other rights play be jeopardy while the respect for marriage act is expected to pass the house, it is almost certain to stall in the senate, to where most republicans would likely block it. and we'll talk weather britain shattering the record for highest temperature ever

registered a reading of 104.4 degrees fahrenheit at heathrow broke the record of 107 hit in 2019. the whole continent of europe has been dealing with wildfires and hundreds of heat-related deaths carl, back to you. >> seema, thank you very much. when we come back, our housing market is finally start to go cool off more on the data we got this morning. and why one ceo says it's becoming a better market for buyers, when we return this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done.

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the housing data showing signs of cooling off diana olick has the numbers. >> carl, housing starts? june were weaker than expected, down 2% from may, down 6% from a year ago

multifamily activity was stronger, but single family, which is what we're watching, down about 8% for the metropolitan, off close to 16% year over year single-family permits, which are an indication of future construction also down 8% for the month, down about 11% from a year ago builders clearly reacting in part to the spike we saw in mortgage rates in june the 30-year fix started the month an 5.3%. shot up over 6%, then stayed in the higher fives builder stocks still in the green, but lagging the broader market, saying yesterday when we got the historic drop, likely because the stocks are so beaten down already the survey showed big drops in buyer traffic, current and future sales expectations. investors may be waiting for the builders earnings coming up. in that sentiment report, 13% of

builders said they were dropping prices, not just to get buyers in, but slow rising cancellations. just one more note, weaker affordable and concern over inflation are hurting deplanned for new homes, which are generally pricier than their existing counterparts, but the supply of total homes spoke sale is still well below demand. >> i was going to ask what this does for supplies would that be steeper, or is that being held up, by we are seeing such supply, with demand outstripping it >> when we say 13%, that's 13% of builders said they were drove their prices, now dropping 13% it's going to take more to bring the prices down but yes, we're seeing a lot of spritz in the new market, and that, of course,

has to do with the higher prices so you my get more people in, but we're seeing an over seven-month supply in new homes, where you're seeing a two-month supply, and existing does make up most of the market. >> diana, thank you. our next guests says while inventory is beginning to pile up, it's becoming a more balanced market for buyers >> we're always glad to have glen with us from redfin should this be seen as a positive >> well, at least for home buyers it is in america we worry about the price of gas and bread and everything except prices when home prices go down, it's calamity, but this would let more people own homes. i think a return to normalcy,

with three to six months of housing supply is actually a good thing >> are we back to that normalcy, or are we getting close? >> we are, but it's just such a wild ride to get there you have 15% to 25% of the homes under contract being canceled in the past month 62% of boise homes have dropped their price. more than half have done do in salt lake city and in denver so i don't think it's going to be a smooth landing of the it's going to be a very bumpy landing. >> >> yeah, you meed three very previously hot markets where it's been substantial. is that your expectation in other markets, you know, to be expected across the board, and we're looking at some of these incredibly hot places are suddenly cooling off, but ending a far higher level than even a year ago >> absolutely. the markets that were the

hottest have the furthest to fall if you look at austin, texas, i think the compound annual price growth rate is negative 42%, that's extrapolating from just one month, so it giving you a wild number. i don't expect home prices to fall that much, but it's a doozy to see that much loss in one month. a good place to put your money, this is a real bumpy ride. mostly we see that kind of volatility in the stock market, even in the bond market, but not in the housing market. some of that is attributed to the fact that investors have b been, now we're up to one this five, and that activity is falling fast we've seen seen a faster rate of decline since redfin has been tracking it. >> i want to ask you about your

business you announced layoffs, about an 8% cut, knowing you didn't have enough work for agents and staff. do you think the size of your employee base is right now >> yes. >> are you considering further downsizing >> no, we made a cut baited on the market, and sin thin the market performed as we expected. it got a bit better coming out of fourth of july holiday. some home buyers are responding, and we sell home and faster and for more money >> some point out if consumer balance sheets come under pressure and use their excess savings, there's several trillion in untapped home equity under what degree does that come

under risk if values in fact decline. >> i think we have a wide cushion there. in 2008 people had negative amortizing where they would immediately default. and we saw foreclosures tick up. here we haven't seen that, but has been affecting markets in placing like san francisco so many people aren't just using savings, they're using their stock portfolio to finance the down payment and especially in growth stocks, where people were using their equity to finance a home just makes it really heart to get that down payment. even though they waived their inspection, contingency, they still decide i can't go through

with the purchase, even if i use 20, 30, $50,000. >> glen, promise me you didn't use your own equity to do something like that, because i mean -- >> redfin tends to trade with the housing market so we want to do better. >> it does i asked this question before, because you're very straightforward. what's morale like at the company? your stock soared, like so many others, i think this was close to $100, now it's an $10 >> yeah. >> how does that make people feel is morale pretty good? >> i wouldn't wish that kind of volatility on my worst enemy you get your hopes up. i hope the company is sustained by a sense of mission. redfin has been through ups and

downs, but you can be sustained through a hard time. it's been a little rough, but we're going to make it. >> and we always appreciate you being willing to join us, talk openly about the market, and about your own stock as well thank you. >> thanks for having me. have a great day. >> you too a quick programming note an all-start lineup tonight on "mad money", kicking off at 6:00 p.m. eastern time we're back in a couple minutes

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♪ ♪ you can see there the dow up 450 points this morning. the biggest dollar impact coming from goldman sachs, which

reported yesterday, still getting a big boost today. welcome back earnings season kicking off, but it's already over for those six big wall street banks. over the three days, they reported each one traded either flat or higher and are continues that ascent higher today, all outperforming the s&p 500. not bad considering their earnings plummeted during q2, subtracting a combined $14 billion from last year's quarterly results. some of it is due to the banks setting aside more money for loan losses. revenue plummeted, goldman sachs to 61% at jpmorgan additionally the market volatility brought down active management, on the positive side, though, that same volatility was a boon to trading and the higher rates that spurred it helped boosted -- bank the america's ceo brian

moynihan said on "closing bell" yesterday that the macro will continue to be a factor for all things market. >> the reality is the fed has to slow down inflation and take it. they are going to take it on they've got to keep going until the inflation breaks why the market will be on tinder hooks every day. >> i spoke with david conrad, who said the third quarter will be more challenging for the banks, though rates are expected to ramp up, but they could level off after that so now, the big question mark -- and you heard this from the c-suite during the conference calls as well. the big questioning marked centered around early 2023, what happens with inflation what happens with rates? are we in a recession? are we in a soft landing all those questions seem we'll

get some clarity by q1 >> i think there was some hope heading into this, in terms of the commentary from a jamie dimon or a moynihan, for more clarity on what is coming, but we didn't getting it. >> we got clarity on where we are, and they talk in very general terms, but very unkernel what will happen as a result >> exactly everything says the consumer is in good shame. jamie dimon i think said business credit is the best he's ever seen now. but then they say, caveat, all these different factors that could play into this, and we really don't know where it's going to go. as a result most of them are in terms of deployment of capital, in terms of buybacks given this uncertainly

>> obviously the percentage of household income that goes to debt service is historically low, though gasoline consumption the last four weeks is down. journal had a piece yesterday about americans who are cutting back on food, which is a very different thing to do. >> yeah. yeah talking about the discrepancy between, a lot of banks are looking at top-down numbers as well they say, yes, people are spending more money on food and gas, but also on luxury items, but when you look at different income levels, look below the hood, it does appear the lower-income americans are cutting back much more than the broader statistics would suggest. >> yeah, something to watch, even as john waldron is say the fed is moving aggressively and impressed with the combatting of inflation. elon musk and twitter will

face off in court in just about ten minutes. we'll bring it to you live, when we start "techcheck" at thtoe p of the hour. don't go away. snee if you have this... and you get this... you could end up with this... unexpected out-of-pocket costs. so if you're on medicare, or soon to be, consider this. an aarp medicare supplement insurance plan from unitedhealthcare. medicare alone doesn't pay for everything. and what it doesn't pay for, like deductibles and copays, could add up to thousands of dollars. medicare supplement plans help by paying some of what medicare doesn't... and making your out-of-pocket costs a lot more predictable.

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welcome back to "squawk on the street." i'm dominic chu. near the highs of the session, almost a 2% gain and it's a 3,900 level for the s&p 500. so some interesting developments there. every sector is in positive territory right now. all green, as you can see behind me here. that material sector is a particular outperformer on the day alongside other economically sensitive sectors like industrials, financials, and technology within that materials sector overall, there's a mix of names that are leading the charge will including some of the engineered and specialty materials and products makers, like dow and sellenes as well and the chemical makers and fertilizer makers like mosaic. all of those names very much in the green today. those names in the sector overall, by the way, are still negative over the course of the past month, as we continue to see some volatility in areas of the commodities markets that

many of these companies are exposed to, either selling for raw materials, or having to buy them to make their products. materials, a key part of that sector but still one to keep an eye on for that economic narrative that's happening, recession or not, that sort of thing. so leslie, keep an eye on those. i'll send things back to you over at the new york stock exchange >> small, but mighty, dom. we already talked about the best performer on the s&p this year, oxy petroleum and berkshire hathaway's big buy but the biggest laggard on the s&p this year is netflix don't miss what to expect from results this afternoon, next stay with us

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we're just a few hours away from the results from netflix after the bell today the biggest percentage loser in the s&p in the first half of the year, and in its last report, netflix suffered its first quarterly loss in subscribers in more than a decade and warned that it expects to lose 2 million global subscribers in the second quarter. as one of the priciest streaming service netflix faces tough economic conditions, amid a potentially slowing consumer and

rampant inflation. along with tough competition, its rival streaming platforms gain traction. so i guess the key question here, david is, how sticky is netflix's consumer base? how willing are they to stick with it? they are testing out new methods for, you know, preventing people from sharing with different households, charging a discounted rate for that testing that out in latin america, which would help them, you know, at least boost their subscriber numbers in theory >> yeah, conceivably, as well, on the call, after we get the results, we're also going to get some more information on their ad-supported efforts, which we've been hearing about through various reports. microsoft obviously signed up as a partner in terms of delivering the ads. they've got to go through licensing agreements with many of their content providers because right now they're licensed to do streaming video on demand, but not add supported video on demand. that requires redoing some contracts. but they are making those efforts. so it will be conceivably a

significant one. it will be yet another ad platform out there and then, of course, there's a question as to what that's going to mean to other media companies that rely on ads will it take away from a certain extent of a pie that won't be growing, necessarily and then, leslie, there's the bigger question as to whether this will ever truly become a free cash flow generating business of significant size and not just for netflix, but for so many of the others that have been pouring money into content and are not yet anywhere near a break-even. whether it's disney, which tells us its direct to consumer will be profitable or at least break-even by 2024 whether it's paramount bob back was on last week, talking about next year being the biggest year of their spend. or whether it's the leader, still, which is netflix. or whether we're in a period of the great unsubscribe, as people call it, where you'll simply see churning and you never approach the profitability of the cable ecosystem, of which i was a part, of which cnbc was a part,

and which i could argue, we've all benefitted from. >> so maybe the potential is additional m&a, bulking up the return of the bundle for streaming. >> to a certain extent >> get a little bigger, share resources. >> but as those talk about netflix's takeover candidate, antitrust, would make that very difficult for any would-be acquirers. david solomon, tomorrow, "squawk on the street," that'll do it for us right here. "tech check" starts right now. that doesn't look right at all to me. that can't be right. >> time will tell. good tuesday morning welcome to "tech check." deirdre bosen has the morning off. a few minutes from now, a battle takes off between twitter and elon musk. >> twitter and elon musk lawyers are right now facing off in virtual court for the very first time as the two sides make their arguments about how soon the case should take place before this is a