it's july 20, 2022 "squawk box" begins right now. good morning, everybody. welcome to "squawk box" here on cnbc we're live from the nasdaq market site at times square. i'm becky quick along with joe kernen and andrew ross sorkin. you're going to see right now some green arrows. these are modest advances, but we'll take it after a day like we saw yesterday the nasdaq up by 43 points of course, this came after a day where the dow was up 750 points. and, by the way, it was the smallest of the leaders. it was up by 2.4%. the leader was up by 2.75, and the nasdaq up by 3.1%. we take a look lately how far we

are off the record highs dow is off by 13.9%. the s&p by 18.3% and the nasdaq, 27.8%. but here's something we haven't done in a while. that's take a look at how far we've bounced back from the lows the dow is now up 6% more than the low set a month ago. s&p is up 7.4%, and the nasdaq is up by 10% this is a very quick move. the ross 2,000 is up there were only five stocks in the s&p 500 that were down two were reported. the earnings are reporting the huge rise in the dow >> nothing happened on friday either

minus 200 from monday. one person points out, the s&p 500 has never lost ground over the following year when advancing volume was 87% or more of total volume for two out of three days i mean, that was weird. >> that was bad. >> yeah. friday and yesterday, those were big moves. >> big moves, but on a volume basis, do you think it's enough? >> here's the thing. >> in the midst of -- >> i can argue both sides. number one, we've been wondering whether you need a capitulation low, whether the vix needs to go there. you never understood the business. >> it was too high at one point or corrected too far. >> a lot of stocks are like that when stocks do bottom, a lot of times we're like, wow, what was i thinking when i saw those down there, why didn't i do something because

all of a sudden it leaves you behind this is only a thousand points, but when an empty train leaves the station, it never goes back and picks up the people that didn't have the intestinal fortitude to buy when things are really bad but then again here's my other side in long-term bull markets, the breaks are really scary and fast, did you ever notice that they go down 1200 points in a secular bear, are the rallies really exciting and sharp? maybe katie stockton can answer that for us today. >> is it a secular bear? >> is it a secular bear where you shouldn't chase things like these. >> she's in the secular bearcat foir. >> she says don't chase bitcoin. if she says don't chase bitcoin, i bet you she says don't chase the s&p. fundamentals do play into this

if we really are in the soup in terms of inflation, it's a lot more ingrained than we think, i think by october you would have lows >> you had 9.4% inflation. they're dealing with the same pressures we are this is a global issue the big question is whether they've seen -- >> let's enjoy friday and tuesday while we can. meantime, i'll tell you who's enjoying it. netflix is enjoying their earnings report. it's strange it's mixed. the streaming company losing 976,000 subscribers in the second quarter that was far less than the two-million. it signaled its plans to do that, but now putting a little bit more timing around its ambitions there. meantime earnings of $3.20 per

share. revenue falling short, though, and netflix warned that the strengthening dollars impact on the revenue, which makes up 60% of it top line there are two component parts. there's the value of the stock, how well you think the business is holding up, it's better the question is were they throwing the kitchen sink at it last quarter or did they not know, and then the other piece is just how fast they're going to continue to grow or not grow in the future and what kind of multiple you want to put on that what i will say is this. i don't think this changes the dynamic at all in terms of the trepidation that has entered the market around the streaming business broadly, meaning i don't think anybody in hollywood breathes a sigh of relief and says, oh, my goodness, let's spend $130 million on a film nobody's watching.

i think there's a new reality. >> it reminds me of the cable model just in the sense there's two ways you do streaming. remember cable, you had sub fees, people that paid for that, and then you make money from advertising. netflix has been a sub fee story. they didn't need advertising they needed people to pay every month to get it. as greenfield pointed out, you need people to watch you don't need new subscribers every month. you need those who watch to watch for a long period of time. >> it changes the programming you have and it changes -- we talked about it a couple of weeks ago -- the possibility where you have to renegotiate with the licenses that you have. >> it's a different thing. >> it will cost more. >> isn't it nice to have both? that's why cable is so good, subs and advertising. >> that's why it's nice to

window movies. it's nice to take your movie, bring it to the theater, capture it here. >> the new payday is starting to look like that, she's going to talk about how this is changing the calculus of how this looks >> the old school is you take it to the theater or netflix and take it and sell it to somebody else. >> look at tom benjamin button, tom rogers, he's de-age 20d years. that's incredible. that's awesome that's amazing wow. you know the one thing that it has in common with both of those? content. you can watch and people say, i've got to get that streaming service. so you're back to content.

i can't get those "yellowstone" prequels how do i get those is it paramount? >> you can sign up. >> can i do it online? >> yes you can do it on your tv, on your smart tv. >> i don't think my smart tv is that smart my phone doesn't -- wait a minute. >> yes, it does. >> do you need content for both? >> you need content. i don't know that you need different types of content, but netflix had a strategy that they thought they would go niche on certain things and broad on certain things, they could capture groups of people once you're in the numbers game, you're in the numbers game. >> i have to update on "the old

man. i love jeff bridges. >> if i said, tell me, old man. >> i would, but if you saw the way this old man kicks ass, you might not say that to me i tell you, he is a badass a former cia guy. a delaware judge granted twitter's request to fast-track the case, compelling elon musk to complete his purchase of twitter. he agreed with twitter's claim that it could be harmed by its unturnty >> their writing is on the wall here. >> right. >> can we just say -- >> she said, none of these spots is not going to matter this is not something that matters with the contract, so that tells you which way she's going to rule. >> so now the question is if

you're twitter's board and take $5 millions will and sell it to him -- i don't think you -- if he thinks he's right, he may run through it and appeal everything before he does anything else. >> before we go to break, just one thing -- >> i'm wearing pants. >> good. the one thing about jeff bridges. >> you like him because he's a dude. >> he's an anti-dude he's a dude but the most badass, o over 70. seven nominations. some people call him the most fabulous actor i want you to tune in. >> i'm going the start to tune in >> hulu. >> hulu, right >> it's on hulu it is on hulu.

there are some ads i don't mind it shows me how much longer i have to pay in. >> do you pay the remium >> this has ads. i don't -- >> step it up, my friend when we come back, we're going to talk a little bit more about what's been happening with the markets. take a look at the stock futures right now, again, after that huge, huge day yesterday you're continuing to see some greenery rows. they're barely green, but they're there. 750 points beganed for the dow or the. game the dow futures up by 23, nasdaq up by 35 later transportation secretary pete beat judge will be joining us we'll talk about gas prices and other things

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traders who have been looking for bright spots in the market found some yesterday as the markets rose sharply joining us to talk about what's driving stock is stephanie link. good morning we were trying to figure out why markets were up yesterday. the journal has a story about how it's all about earnings, but

a lot of reports were down if you're thinking about some of those big dow components like ibm or j&j because of what's happening with stronger dollar what do you think happened yesterday? what are you watching? i think stephanie's having trouble hearing. we're going to try to get that fixed very quickly 493 of those stocks did close higher -- i'm sorry, 491 nine of them were lower. those that were lower were stocks like johnson & johnson and ibm that have been struggling with that dollar. stephanie link joins us again. stephanie, when you see what happened, what do you think was the real catalyst between the higher numbers that we saw in the markets? >> yeah, good morning. so i think that we were really oversold it got really negative, and at the end of the day, earnings are kind of okay, they're not the

disaster, minus the currency issues, right? so far we've seen pretty decent results from the banks we'd like to see net interest income, margins, capital levels, and they all came in better than expected we had a good number from pepsi last week, an organic growth number they have pricing power. they said the consumer was hanging in there united health care we talked about this last friday it was just a real amazing quarter with regard to membership growth and the growth/loss ratios being better than expected. becky, i know the stocks were down, and that was because of the numbers and the guidance from j&j, but if you look at constant currency, the numbers were pretty good on both you had 12% growth on j&j and ibm, 18% counseling growth and

19% infrastructure growth. so i think you have to kind of look through the currency stuff, but even if you do that, i think the numbers were pretty okay >> what about netflix out after the bell with numbers that had been better than anticipated they lost millions of subscribers instead of 2 million subscribers. is that a story you like >> yeah, no. so they lost less subscribers as you mentioned. operating came in lower than planned. then they got 380 basis points lower over the next quarter on a sequential basis, so to me, i think there's still a lot of unanswered questions from this company, right and there's so much competition, and they have to spend so much for the content. the entire industry has to spend so much. so while i understand why the

stock rallied, it was down, i still think there are a lot of questions especially about their model that's now starting to roll out, which is, by the way, going to take a very long time. >> some stock use have been buying, though, include occidental you're following along with berkshire hathaway >> i don't know why this doesn't get more attention he keeps buying every single day, so he is really close to the 20% threshold. i don't know what his plans are, but he's the smartest investor on the planet, and i think it makes a lot of sense to pay attention to it. stock trades about five times earnings, 2.2 times ebitda, and they do have some very good assets i like the darko acquisition they made. there's synergies there. i'm overweight energy and more overweight because this has been a recent purchase for me. >> we're going to talk later how gas prices at the pump have come

down recently. we've got pete buttigieg to come on and talk about that, but a lot of people are vetting i the prices are going to continue through the rest of the year it sounds like you're one of those with your heavy focus on energy. >> i think is supply side of the equation is still very, very tight. i don't believe we're going to see a global recession we're going to see a global slowdown, but i still believe the demand picture will be solid. the think thing about the energy sector, the companies have changed their philosophy they're not drilling the drill as prices get higher they're actually taking the cash flow they're creating and returning it to shareholders in terms of buybacks and dividends. i can't tell you how many companies out there, especially in the e & p sector have announced special dividends and a couple of special dividends. i think that's the strategy, and as a result, the supply side of the equation will remain pretty

tight. >> hey, stephanie, real quick. i know you're buying starbucks too. is that a bad buyback on shut's return >> yeah, i absolutely think it is the fact they cut the $20 million buyback and now they're going to put that money into the company, into stores, into products, into people, i believe that's going to reap rewards by the way, they have a september analyst day, and i think that's going to be a nice catalyst for shares. >> stephanie, always good to see you. we'll talk to you soon. >> thanks. have a good day. coming up, chipotle closing a store that has petitioned for a union vote details next we'll show you later this hour we're going to talk technicals with stocks and crypto with katie stockton "squawk box" will be right back. >> announcer: squawk picks is

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chipotle is closing a store in maine it had been leading the efforts to unionize. the store was the first chipotle store to file a petition asking to hold a union election chipotle said the issue was due to staffing issues and not related to union issues. it had been closed since june 17th it faced excessive absences, lack of access to existing staff and was having a hard time finding managers for the store they called it union busting 101

and the closing was intended to send a signal to other stores. >> in other news, the group has formed a second union before microsoft is expected to close its nearly $69 billion application of the activision blizzard they believe that a direct relationship between the company and its employees is the most productive one. china sneeze authorities are preparing to impose a fine on the ride-hailing company didi. it would bring an end to a year-long investigation to the cybersecurity practices. the report said after the penalty was unveiled, china's government plans to ease restrictions from banning didi to add new users it could also kick start a new share listing in hong kong the probe announced back in july 2021 days after the company's

listing. shareholders voted in may to delist from the nyse. coming up, a lot more on "squawk. we're going to take you to germany where they hope to restart the flow of gas tomorrow brian sullivan has that story. and as we head to the break, a look at yesterday's s&p 500's winners and losers >> announcer: executive edge is sponsored by at&t business at&t is fast, reliable, and secure oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic i labra-dore you

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good morning and welcome to "squawk box" right here on cnbc. we're live at the nasdaq market site in times square take a look at the futures we've had a bit of a nice run. dow looks like it will open higher the s&p 500 up by five points. earlier this morning vladimir putin said russia would fulfill its commitment to supply natural gas to europe. sounds like an optimistic

headline, but there's still a lot of questions around what happens tomorrow with the nord stream pipeline that goes from russia to germany. brian sullivan is in germany supposedly looks like a green screen to me. he's there with that story and why it matters to europe and the world. we wouldn't say it if you weren't. think about how much money we would save if you just did a green screen. >> reporter: i can tell you i'm not in a green screen. when you see me sweating here at the schmees cast, it's 17. we'll tell you why tomorrow matters so much. tomorrow is the day the nord stream 1 pipeline from russia to germany is hopefully expected to resume its flow of natural gas it's shut down for nine days ten days of maintenance would be tomorrow putin making some contradictory

comments overnight in iran saying he wants to fulfill the contract but maybe the pipeline still has some problems. he's basically keeping germany and europe on the edge and worrying them about natural gas flows. if the nord stream pipeline does not turn back on tomorrow or is delayed for some time, what is likely to happen >> europe or germany in particular will enter stage three of their emergency plan. they're in stage two now what does that mean? well, the emergency plan means they immediately begin to ratchet back industry and ration gas. in other words, the german government is going to go company by company, industry by industry like this steel mill and say you have to close, you can stay open. we need to save gas for hospitals and heating homes into winter this is truly a choice, perhaps, down the road between business,

heating, and eating. we interviewed a secretary recently he's selling natural gas, u.s. natural gas to europe. but here's how he laid it out. listen >> the decisions are going to be between keeping the lights on or heat on, one or the other. we will not have enough gas to do both. that's a real challenge for policy makers, but a heart breaking situation for consumers as well. >> reporter: you look at the markets. there was pressure a little bit of gas did flow through the nord stream. here's what wall street is saying deutsche bank, expect the rationing of gas leading to a german gdp slump between 5% and 6% next year ubs, market selloff 20% or more. bnp pair bass and others

the jpmorgan chase, it would be bigger than the first wave of covid. i want that to sink in, joe. jpmorgan chase, if we get no gas, it could be a bigger credit event than the lockdowns and pandemic it's not fearmongering it's a real story and all plays out in the next 24 to 48 hours >> hey, brian. one question on this i know we're going to look at this day by day. but putin has made comments suggesting that, look, this could be a situation that next week you could see a drop 206% of flow because they're talking about taking down another one of these big generators that they need there's a big issue coming up next week. this could play out in bits and pieces over the coming weeks, and i wonder how the market would react to that. >> by the way, happy birthday, becky. >> happy birthday to you, too, bud. >> belated.

>> thank you very much. >> it was yesterday. becky's was two days ago important point, i want to make this as clear and shiny as the polished chrome on some of the schmees cast artwork they do artwork too. this is not a binary event it's not a flow bad, flow good it's about how much flow to your point, becky, it was at 40% capability coming into this maintenance shutdown it could turn back tomorrow, to your point, at 20%, 30%. that is unlikely to be enough to get german gas storage where it needs to be. they're at 65% right now they want minimum of 80. they prefer 90% of storage by november 1st so that 43 million homes in germany, half of which are heated with natural gas, half of those homes will have heat in the winter the primary concern is hospitals, nursing homes, and

heating homes in the winter. by the way, there's been a heatwave across germany and europe they're using a lot of air-conditioning, which is drawing down their current supplies it's not just on, good, off, bad. if it's on, how much will it do to ease energy concerns. look at these people i'm here sweating. they work here it's hot these guys are tough 330 employees. their jobs are at risk this is a human story. not just some wonky energy story halfway around the world. >> modern economies need a lot of energy. it's quite a quandary that we find ourselves in, brian you know, the strength of the dollar that we've seen and forecast for manufacturing activity in germany, this isn't new. this is something that has cast

appal on global markets for a while. they're in dire straits. i don't know how it's going to work itself out. we'll see. how about the first trade deficit germany's had since 1970 because they're importing so much stuff that's so expensive to try to keep the economy running. already, sully, thank you. coming up, we're going to talk to the ceo of the spin-off of galaxien, smith, klein, and later we'll lkta meantime futures have turned lower. "squawk box" is coming back right after this

welcome back to "squawk box. this morning galaxy oh spin klein's spin-off created the largest stand alone consumer health business today. they own brands like advil, senn sew dine, and centrum. they start traiting on the ftsc this week, the ftse there. joining us to talk about it is the ceo of haleon, which two days in, they're trading lower, we should mention, by more than 6% good morning to you. >> good morning, andrew, good to

be here. >> let's talk about what is it is, how investors should think about it, and then we'll talk more broadly about the broader economy you're seeing. in terms of this spin-off and how you think investors should value it, what you do think is a fair comp right now in. >> first, andrew, i would say haleon was the creation of two of the biggest transactions in the sector in the last seven years. first it was a joint venture with novartis and then pfizer. it was focused on consumer health with category-leading positions. we're number one in over-the-counter medicines, respiratory health, pain relief, and digestive health number one in vitamins, minerals, and supplements, and you mentioned some of the brands absolutely great brands. as far as trading goes, we're in the early days as you said, day three on the

london stock exchange. hard to react to any stock price at this point. we would expect some volatility in the early days. >> when you think about branded drugs like this and the sorkin family is a customer i think everyone at this table is a customer of one of your products long term in terms of holding onto margin, what do you think the prospect is of being able to do that and add volume >> we feel really good about the structure of this business because we're in health and health is really important to consumers, and brands really matter in the health base this is a strong gross margin business we have 63% gross margins. 22. % operating margin from 2021 what we've committe eted to 202n is 4% to 6% sales growth

with that growth, that gives us the ability to invest in innovation and advertising and promotion to really drive the fundamental growth of the business. >> how much of it is a marketing piece? you have to protect the brands now. that would become, i assume, priority number one. what does that look like over time >> we spend about 21% of our sales in advertising and promotion, and we invest ahead of that, to drive growth continuing with investing and innovation is a key part of the business model. >> what do you see more broadly in terms of the consumer you're selling and branding your products, but what i started this conversation on in terms of a mission, i wonder if we're going into any kind of a recession or tougher market for

the consumer, whether they start to look at generics and what you do about that. >> yeah. so overall, you know, if you look over the last 20 years of this business, so recession in 2008 and 2009, this business is pretty resilient and these categories are pretty resilient. what you're seeing is strong consumer loyalty, people continuing buy the product like everyone else, we're seeing inflation in our input costs, but actually we're less exposed. less than 10% of our overall sales is in commodity, commodity-related costs. as a result, we can be really thoughtful about the pricing we take and continue to make sure we don't get ahead of the consumer in that and we're very conscious of the fact it's an unprecedented time. >> what are you seeing, though, specifically from the consumer are there certain types of

products feeling more pressure than any others? >> we haven't seen it trade down private label is a very u.s. dynamic, canada, australia a lot of business in other markets, it's a pharmacy-driven market where private label isn't as much of a dynamic so far we've seen the brands hold up very strong is. >> finally, you mentioned the last thing i was going to say about private label and what happens in the west -- in some of these western countries like the u.s. and what not. europe is the west as well do you think over time there will be more private label >> well, the reality is the business, the otc business, over-the-counter business is really only sold in pharmacies in mainland europe, and it's been that way for a long time. we don't see that change any time in the foreseeable feature.

of course, our health business is sold mass market all over the world. it doesn't tend to have a private label element to it. >> nice to see you looking forward to your progress coming up, dow futures have turned lower in the last 15 minutes or so. we're going the talk technical at&till in wbrg their numbers tomorrow and at 8:00 there will be annan interview with ceo john stankey. we'll be right back. >> announcer: "squawk box" sponsored by truist. securities, execution. an approaching car, a puddle, and knew there was going to be a situation. ♪ ♪ ms. hogan's class? yeah, it's atlantis. nice. i don't think they had camels in atlantis.

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tails, dogs, we're going to look at bitcoin to start with. bitcoin prices this morning, you can see back to 23.5 joining us now, managing partner i know they're correlated. i'm more interested in the s&p today, katie so we had that move on friday. a little pullback monday but then another surprise move yesterday. looking at the s&p at where it is right now we're way off the highs of -- what do you call the high on the s&p, about 4800 or so >> 4818 i think was the absolute high >> june 16th, low was, what do you, what do you call the actual low on the s&p 36 and change >> it's about that

it's obviously important to be an important strong level and managed to hold in that area for some time now. and finally, we have seen a little momentum behind the market and that began last week, and we have a lot of names challenging their 50-day averages, it goes for the triple qs it goes for bitcoin. so they've now come into resistance on their charts it create as bit of a proving ground for the market at current levels we did see yesterday, uber bought conditions return i think this is a real proving ground >> a proving ground. >> mm-hm >> i was thinking about that you give us probabilities, and some of your prbobabilities are based on thing that happen in the fundamentals world which are

also probabilities, recession, inflation, is it ingrained so all these things that you're trying to figure out technically are probabilities. my question is when you see, it's only 1500 points, i guess, or 1300 between friday and tuesday. could that be just a really sharp bear market rally? is that, do the probabilities fave that? >> they do they've often lasted no more than a few days. the assumption should be at this time it's no different but if you look at past bear market cycles we've seen massive relief rallies and we want to help our clients identify those and leverage them so now we're trying to understand whether this is one of those we're talking 20% plus in some cases. so we want to know if this rally will manifest itself and become

that kind of major relief rally. and early indications are that it's not so we have that, intermediate is still to the down side behind the s&p 500, behind bitcoin, and we don't have intermittent improvement. we don't see any change in the indicators to suggest otherwise. so we're making the assumption that this rally will fail or fade, not too far from current levels i think the market is challenged in that volatility is oversold, if you look at the vix very oversold and that curse at a time when the mega caps are quite overbought and i think that creates a really challenging environment for the market however, there are some metrics that we are watching to try to decide if this is something more and we look at those momentum

gauges, oversaold gauges there's not enough to suggest that we have some kind of lasting relief rally here. >> interesting so you don't expect the june 16th lows to hold. where would the s&p need to go, and what would you need to see for volume and advance decline and everything else for you to say, wow, that this is more than a relief rally in fact, we may have put in the lows you would have to say it's different this time, because we didn't see the capitulation or the vix at levels that have been characteristically associated with a long-term low and is and it's never different this time is there a 10% probability that we've seen the lows? a 30% probability that we've seen the lows? >> you know, if you're talking about an intermediate term low,

i'd se i'd say we're closer to that upper level -- i say it because of the longer term levels not showing any improvement. we do expect this bear market cycle to resolve in a basing phase, and one could argue that in june perhaps we have some kind of basing price action, and yet when i see a day like yesterday, if anything it gives me more pause because we had such extremes. the ratio from advancers to decliners and up-to-down volume, we're so high that it's not sustainable type of move typically. it's not the kind of action we tend to see at lows. as you can sense, the market sentiment isn't as bear oiish ai typically would be in the low. and you can see that in the vix. >> there is some negative sentiment and hopelessness, and

pee people not opening up their mail because of what it says about their 401(k)s. i mentioned earlier someone gave us a statistic for the metrics you were telling us about. >> people don't get mail anymore. they look at their apps. >> i still look at my paper stuff. va in this case, they're looking at that really strong, skewed advanced decline in volume as a positive it just made you think it's unsustainable. so that's weird that people can look at the same thing, technicians, and come up with different forecasts. i guess that's the way it works. >> we're looking at it more from a contrarien perspective indeed. when we see these kinds of extremes they usually mark counter trend conditions

that's why we're respectful of them things get a little ahead of themselves even though i agree that some of the metrics do show bearish sentiment. i got a lot of calls from people wanting to get back into the high-growth names of the market. they're eager to try to take advantage of some kind of counter trend move and that to me shows that there's still risk appetite out there, and can you see it with bitcoin back above its 50-day moving average there is some kind of risk appetite again, it's not that kind of despair that we would expect after this bear market cycle >> the train's coming back to the station, and we'll all have time to get on, i guess. >> patient >> i was hoping for more positive news. it is what it is katie stockton thanks for updating us >> of course >> good news is you haven't missed the train >> you know me, i always miss

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good morning futures are pointing to a modestly lower open following yesterday's rally that lifted the dow, the s&p 500 and nasdaq to nearly six-week highs we'll find out what you need to watch in today's session netflix shares are jumping after they lost fewer than expected subscribers we're going to dig through the numbers. and the bipartisan bill to provide billions in subsidies and tax credits to the chips industry is next the second hour of "squawk box" begins right now

good morning, and welcome back to "squawk box" right here on cnbc. we're live at the nasdaq market site in times square i'm andrew ross sorkin with becky quick and joe kernen we've moved quite a bit over the last couple days, but we had some greens on the screen turn red. the sentiment may have changed a little bit nasdaq down about two. looks like the s&p 500 may be off about six. what's happened the last, you know, 20 minutes katie stockton came on >> no, it was down before she came on. but 750 out of nowhere yesterday for no good reason >> nordstrom >> it's the same facts people looking at it differently day by day more people woke up this morning i guess. >> meanwhile, treasury yields, looking at the ten-year note, sitting at 2.974

the inversion there, you can see it on the screen, the two-year note let's show you oil, wti if you want to buy it as we always say by the barrel, you can do that for $102.85 right now. crypto has moved higher. i think we should see about 23,000 when it comes to bitcoin, maybe close to 24,000, making a bit of a move there this morning. >> let's get to dom chu with a look at today's premarket movers >> joe, becky, andrew, one of the reasons you may be seeing that slower momentum not just in our markets but in europe as well, because cash trading is going on there let me show you a chart of what's happening right now with the german dax what you're seeing is that same move lower just around that 6:30 a.m. eastern time hour. some of that move may be attributed or is being attributed to some of those headlines coming out of europe right now. we kind of already knew teuropen

lawmakers were asking to ration gas. now they're going to skecask eu members for a proposal to cut usage by 15% going into the ws winter time. that create as concern of a slow down in the economy overall. maybe one of the reasons you saw a decently solid day for the dax at one point dipping negative. some of the headlines may be driving that move and spilling over into our u.s. futures here, something to keep an eye on there. on the asian side of things, we're going to look at premarket trade in casino stocks las vegas sands is up 2% wynn resorts up, and melco, this

is coming on news that macau will look to reopen saturday we are getting word from a press conference that macaw isu is log to get things going. on th on the earnings front, the company formerly known as anthem has been re-branded to el advance health despite the fact that el advance comes out with bet are than expected profits and revenues and raises their full-year profit forecast they were helped by amongst other things, higher premiums that people are paying and growth and enrollment in medicaid programs. down about a half a percent. >> ah-ha thanks, dom chu. we'll see you later. in the meantime, weekly

mortgage applications just being released, and they look pretty ugly diana olic's been digging through those numbers. diana, what happened >> well, becky, take a look. how about the lowest level of mortgage demand in 22 year you heard it the pain in the mortgage market is only getting worse thanks to inflation and consumer concern many acatiopplications drop 7%. buyers still contending with high prices even as the supply of homes is better rates did move higher last week. the average on the 30-year fixed for mortgages with conforming loan balances increased to 5.2%. demand for refinances which are highly rate sensitive found

another 4% for the week. they were 80% lower than the same week a year ago mortgage rates haven't changed much this week but that could change due to the increasing bond market and the upcoming fed meeting. >> what is the word on the street, just in terms of this cooling off, mortgage demand slowing down there's still shortages had terms of supply. how does theiris play out if you strip out some of the refy >> it's much less competition. there's still underlying teemd don't forget the demographics are still into housing what we do expect to see and what we're hearing from realtors on the street is sellers need to come back to earth you know, they have to bring their prices back to normal levels they need to stop thinking they're going to get ten, 15, 20

offers, all cash, no contingencies. it's going to be a much less competitive market there is more supply coming on the market it's a little, but it's not enough and of course yesterday we saw housing starts, the homebuilders are not going to help much, they are worried about less demand in their showrooms. the they're lowering starts. it hadwill put a cushion under prices but when you don't have the competition, you can't have the price prices this high coming up, we'll talk about the ipo landscape and so much more before we head to a break. let's get a check on the markets. we are in the red, dow off about 50 points, nasdaq would open down about four points, all that y anmachge and has been changing all morning. we're coming right back after this

all right, welcome back, everybody. nasdaq reporting quarterly reports just moments ago, came in with $2.07 a share beating the estimate by 16 cents joining us is nasdaq's ceo adena

friedman it's great to you have here. >> it's so great to have all of you here together. it's really perfect. >> second of all, strong numbers, better than expected results. we're watching tech stocks down 27% for the year-to-date so what's happening? where did you see the strength when there's so much weakness in the market >> i think our results really show a testament to all of the investments we've made over the last five years to diversify the business when you think about our markets, we really kind of founded on three key principles. and as we've grown and expanded, what we do to provide services and software solutions to the industry, we provide the technology that powers 130 other markets, and we really focus on modernizing that technology, bringing it to the cloud, the digitization of markets. we focus on bringing corporates

and investors together and tools to allow them to communicate successfully all of those services really delivered strong results so we had 6% top line growth i think that really shows the long-term trends that we're investing in and the demand we're getting from our clients >> and those are things that companies are not cutting their budgets on >> a lot of the services that we offer are mission critical if you're in e change, having market credibility is critical to your business if are you a bank and you need to manage crime, we have technology that does that. investors really need to know thousand how to allocate their assets and all of those services are what we provide to the industry, on ton top of the foundation. >> i didn't realize you started

as an intern and you have seen this, you have seen this play out with tech crashes before you have seen ipos kind of dry up and go away how would you compare with what we're dealing with now to maybe what wesaw in 2001 >> i did start at nasdaq 29 years ago, believe it or not so i have seen a lot of different market environments. i think every single one has been a little different. the difference here, we're starting with a really, really active job market -- bless you >> oh, no. >> we have a really strong job market i think that consumers came into this period of time with strong savings, and we've got kind of different dynamics driving the markets today than they were, let's say 12 years ago or 20 years ago. right now we have to focus on the fact that you've got to manage down inflation. and that's going to drive interest rates up.

but it's at least starting with a core economic strength and so really, can we really manage through that in a way that lands ourselves in a place where we bring inflation down to a normalized rate with maybe more normalized interest rates than we've seen in a long time what is normal back in the '90s, normal was 5%. we have to recognize that interest rates will drift up inflation will drift down, and the matter is how will the economy fare in the process. >> what we are seeing is a tech pull back in particular. we're putting hiring freezes on because we see where the business is headed that just is something that we're going to have to weather through. how will that impact, i guess the nasdaq in particular in terms of new companies being willing to bring to market but also overall with the economy. >> i think that there's actually a little bit of a difference in b-to-b software companies, we haven't seen significant change in buying behavior

certainly at nasdaq we haven't seen significant change in behaviors. when i talk to ceos in that space they haven't really seen a considerable change of behavior. i think it's really in the consumer tech where you've seen differences. there are certain tech companies doing quite well other tech companies have be more challenges and consumer tech companies in general. consumer spending is changing as they are managing an inflationary environment i think so far we haven't seen significant changes in buying behaviors. i think when i talk to other liquidity software companies they haven't evither. >> at some point you have to pro prognosticate where the market is you're telling your team what? the jamie dimon view of a cautious view of what the fall or maybe next year looks like? >> yes >> and then we had katie stockton tell us maybe, i don't

know if this is a dead-cat bounce or. >> dead rock >> dead rock >> dead rock, dead rock. >> a bit of a fake out we've seen a little bit of strength what is that, how to you see this >> the way i look at that time, we're going into this next period of time with our eyes wide open. we are listening to our customers to understand what is driving demand and what are their needs, making sure we manage our company >> you have to make some prognostication. >> sometimes you have drifts between market behaviors and core economic behavior so we really focus our business on what is the core economic behavior, and what are the drivers of that economic behavior from our clients. the markets are going to do what they're going to do, because they're trying to predict the future it's very difficult to predict the future we just talked about that. when you're an investor and you're trying to invest in a company, your job is to predict

the profits of that company. with rising interest rates, you don't know where that's going to be, and bringing inflationary pressures. the funds are sitting on the sidelines, and the markets therefore are subjected to just the news of the day, and the news is having an outsized effect on market behaviors our job is to navigate through that, to look at the long-term trends that are going to drive our industry and manage our business to the long term. and we're going to continue to make focussed investments to do that, but we also have to make sure we're not ignoring the environment we're in so we're being very eyes wide open >> for example ipos as a barometer of confidence in the market place, when you sit with your ipo team, do you say, guys, we're out of business until spring '23 or maybe there's a lot of action in the fall of '22. >> we don't try to predict which

quarter. number one we manage the relationships with those companies as they're thinking to tap the public markets sometimes years ahead of time. we manage those relationships. we then, when they're ready to make a commitment, they make the choice we've had an 88% win rate in companies becoming public this year we want to make sure we're doing that we have 240 companies on cloud to go public when are investors ready to put their capital to work there. that's a higher risk activity than investing in a company that's already public. they need to have some ability to predict the future, which is what -- >> you need some ability to predict the future to hire the caterers to do the events. that's what i'm trying to get at i'm trying to get at -- >> you have to have such a long pipeline >> we have a long pipeline we talk to the companies we know as they're kind of moving their dates and trying to understand what they're trying to do. and they tend to move quarter by

quarter. so we're standing ready. we continue to actually meet new companies. bring. >> what are you telling the caterers >> the bakery indicator has not been positive. >> we've had 71 companies come public this year that you ipo or spac combination >> i think they're down 54%. >> absolutely last year was an incredible year, but i also would say we have 9% more companies listed on nasdaq than we had a year ago. so we have more services to sell to them in terms of our i.r. and government solutions we have more clients to manage in terms of managing their investors. so our job is kind of multi-faceted. the caterers are definitely one part of what we do >> that may be the new indicator. >> the issuers is what we really care about >> the numbers show that with a beat 207 on an adjusted basis versus the 191 the street was

expecting. thanks for being with us great to see you >> great to be here, thank you >> years since we've been all together >> i know, this is incredible. >> i thought we were going to be open by easter remember that? >> i do remember that. i remember >> thanks. coming up -- >> tried not to remember >> a developing story out of europe on the gas market there and we're not talking about, you know, indigestion or at the pump we're talking about natural gas. plus, a netflix reporting quarterly subscriber losses, but it wasn't as bad as the company originally forecast. we're going to talk about the results with debbie stabenow apparently no, that was up too early. and later, the senate moving forward with the chips act oh, that's what that's b senator debbie stabenow. "squawk box" will be right back. time now for today's aflac trivia question.

who is the all-time leader in major league baseball all-star game appearances the answer when cnbc's "squawk box" continues the aflac pre-pain show. aflac! paul is about to suffer a shelf-inflicted injury. luckily, aflac will help cover his unexpected medical bills. aflac! maybe you could use the money to buy a step stool. i have a step stool. so why are you climbing a shelf? the stool's on top of the shelf, isn't it paul... (shelf crashing) yeah... ♪ ♪ aflac!

now the answer to today's

aflac trivia question. who is the all-time leader in major league baseball all-star game appearances the answer, henry aaron, with 25 consecutive games. interesting. neat last night. did you see any of it? the beginning? jackie robinson, denzel came out. it was really cool it was really cool the comments about hank aaron, he's so cool the european commission is calling on member states to cut gas use by 15% over the coming months to ensure that any full russian cut-off of natural gas supply to the bloc will not fundamentally disrupt industry next winter. we're joined from germany where we're following this developing story which is pretty important, brian and having effects globally on the market

>> reporter: yeah. and i'm outside now make a point about global markets with these things behind me this is breaking news, and it is impacting markets. dow futures turning lower about 30 minutes ago and the president of the european union coming out and impose a imposing a new rule to ask member states to cut their energy use by 15%. that's not new we talked about it this morning on worldwide exchange. what's moved the markets is that she is officially proposing this as opposed to reports, we have actual news. here's the key part to me, guys. we'll get to the sound bite in just a second. under this new proposal, it wouldn't just be voluntary what she also said is that this rule would give what they call an action alert, so that states could force companies, like this where we are in langenfeld,

germany to force companies to cut energy use first off, let's get the sound directly from the head of the european union >> overall, the floe of russian gas is now less than one third to what it used to be for example at the same time last year russia is blackmailing us. russia is using energy as a weapon and therefore, in any event, whether it's partial, major cut-off of russian gas or total cut-off of russian gas, europe needs to be ready. >> reporter: okay, so put the pieces together, guys. if we see cuts of 15%, 15% is a huge amount of energy. companies like this, thousands, tens of thousands of others around germany and europe, may be forced to scale back or shut off. how does that impact global markets? well, this is a steel company.

they use a lot of compressed air. linde, a company based in the uk what about this? that's $100 billion french company. you see the trickle effects, guys sort of the knock-on chain cut the gas, companies like this, thousands of them scale back, shut down, order liis, corporate earn beings get hit, markets go down, and we saw the futures go down as soon as von der leyen officially proposed that can you imagine if the u.s. government said we need to you cut your energy use by 15%, by the way in one of the worst heat waves? >> that's a heat wave. talk about the winter. there are some ramifications of what you're talking about. we all take a lot for granted in, at least in the more developed countries, brian that should not be, i honestly think

some people think electricity comes right out of the wall. that if you plug your electric car into the wall the electricity comes right out. no idea where it's from. >> yeah, joe, i'm going to say something. listen, i'm pro-renewables germany's been a leader in wind and solar, and i don't woant to make it this versus that, you need all the energy you can. but this is the sort of stuff that that drives people nuts they understand we realize if nuclear and wind need to be used how are you supposed to build out any extra capacity for solar and wind out of, to your point, joe, kind of thin air. here's the part. they're just starting to use oil

to replace natural gas for certain things here in germany coal plants are coming back online, and there's a growing cho chorus that the three reamainin nuclear plants due to be shut down, that they be brought back online or not turned off now they're running out of trained people on these plants you see the issue? this is what's happening real time in europe >> when greens come face-to-face with things like this it can be very disconcerting there's certainly not enough wind or sun to keep people cool or hot when they need to be. or warm when they need to be we're in a pickle. we're doing well over here i worry about europe, no doubt and of course there would be effects everywhere, based on

what happens in europe we're connected. >> we saw supply chain issues before >> thanks, brian important stuff. still to tomorrow. grab your popcorn. we are going to dig into netflix' better than expectedexpected earnings and we're going to talk to pete buigg. mh more, stay tuned you're watching "squawk box," and this is cnbc esg is responsible investing.

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welcome back to "squawk box. netflix shares are jumping the streaming company lost 970,000 subscribers in the second quarter, far less than the 2 million it had expected. it also said plans to unveil a lower cost ad-supported tier of service in 2023. now giving more of a timeline around it. and earnings of $20.30 revenue, we should say fell short. netflix warned of the strength in dollar's impact on the international revenue which makes up 60% of its top line joining us, former nbc cable

president and cynthia littleton's here variety's coed t-editor in chief tom, i'm going to start with you. your take on these earnings. both concerning the value of netflix but also how you think it's going to change or not the conversation in hollywood, which seems to be whipsawed by what's happening in the streaming world and the costs associated with it >> well, good morning, andrew. i don't really think this was a defining quarter if you're a bull on netflix you have support here. if you are a bear on netflix you have support here. so goes for the rest of the streaming arguments. my view is that the focus on netflix and its sub numbers is misplaced. this service, for where streaming now is in the world, has plenty of subscribers.

when you put what it has by way of paying households with non-paying households, it's got over 100 million households. more than any other cable channel ever hit at the high point of cable it's got plenty of distribution. when you think of what it has by way of 220 million worldwide, another 100 million not paying, the number of people per home that are watching, you're probably close to a billion people around this planet who has access and distribution to netflix. it doesn't have a sub issue. it has a monetarization issue. i've been a real supporter of the netflix thesis and thinking they're in a league of their own. what i don't understand is how these guys ever let one third of their audience become non-paying i just don't understand how such a well-managed company could let that happen. and now they have the issue of trying to figure out between advertising and password sharing fixes, how they're going to deal with that.

but that's their overwhelming issue. how do you monetize what is an amazing distribution case, whether they gain a million and a quarter, lose a million and a quarter, it really doesn't go to the value. >> but on the valuation issue, do you then look at this price $213 now and say streaming by, given the prospect of maonetizin more of these users? >> i think it is a buy here. and the reason is their engagement numbers still outpace everybody. they are 30% of all streaming viewing. disney and hbo are about 5%. they had 32 original series crack the neilson top ten lists over the course of the quarter, weekly top ten list. they had 827 original episodes to amazon number two at about 200. so they are, they're putting up numbers, and as they said in

their earnings release they hit an all-time high of 8% of all total television viewing in the united states they are engaging well beyond what anybody else is engagement is what drives price, is what keeps churn low, and ultimately what can translate into advertising and on those kind of metrics, there's a lot of value to be driven here that isn't being recognized yet, but that password, that password sharing issue i just don't understand. >> hey, cynthia, pulse of hollywood. there was a sort of situation, let's say, when the last quarter, where, you know, everybody said uh, finally, it's not working for them, and it's going to change the entire dynamic in how hollywood spends money on streaming, what types of products they make, what types of shows are going to be

ved have invested in or not >> there was huge sigh of relief that the numbers were not as bad as they could have been. there was a huge sigh of relief. but there's still a question of have they basically plateaued in terms of subscriber growth and their projection for the coming quarter, which is a blip in time. it was about 1 million but it is still growth so on the one hand, yes, there was, schadenfreude it does happen to them but there's still long term. netflix is the pace car right now for the content business and long term there are questions, and there were questions spurred by the executive commentary yesterday about where they're spending their money, where they're going to allocate a lot of money for growth on content. netflix, you know, came in a couple years ago came in, really started spending, drove up prices for

everybody. and now there is a question of like, if they plateaued, what does this mean, and oh, by the way, it looks like the economy's going into recession so there's a lot of nervousness and a lot of watching, but certainly yesterday's news could have been a lot worse. >> in terms of your analysis of netflix, and i love the phrase "as the pace car." what do you think that portends for everybody else in the business when you look at paramount plus, or you look at what you think's going to happen with warner media and hbo max, when you think about disney and hulu. do you think that can you extrapolate out? >> saw some, were surprising, hbo max had a surprising amount of growth, even paramount plus showed some flux e earnings has become the sub

number, at least for the intermediate term. are you growing, are people coming to your content, as audiences shift off of the traditional platforms that these media companies that have been the engine of their earnings, investors clearly want to see, do you have traction in this new world. i think that, and, again, netflix, if netflix is the pace car, then this should be probably a good, if not spectacular quarter for the other larger players but we'll see. >> tom, you agree with that? i love this pace car analogy, but do you agree that it's demonstrating the pace for everybody else as well >> yes, but for different reasons. i think everybody's lost sight of the sub issues and what we learned from the cable world espn and the weather channel had the same number of subscribers, okay and the valuations were massively different. why? because of engagement. because of time spent. their pricing as a result were

drastically different. the number of subscribers somebis being focussed on well beyond what it should be in terms of getting to the essence of value. where they are the pace car is understanding that they have to drive programming in a way that continues to drive the kind of engagement and the kind of overall viewing percentage they're getting, which puts them well ahead today of any other television service this the united states by far in terms of the amount of time people spend watching now they're introducing advertising off the back of that, which is going to help make up some of this valuation gap. very interesting to note that as microsoft was chosen as the one to lead their advertising initiative, microsoft just said hey, we're out of tieadvertisinn television people haven't pointed to the

irony of that, but what it points to is the advertising coming netflix' way is coming right out of the height of the legacy television guide, and so they're coming forward with advertising just at a time that the weakening of the leg sigh g guys is going to be very pronounced >> our pace cars of the morning on great analysis of hollywood and media businesses we look forward to seeing you again soon thanks when we come back, senator debbie stabenow on the chips act. plus, check out the gains. you witare seeing a little giveback the nasdaq down by 10. "squawk box" will be right back.

coming up, the senate is one step closer to passing the chips act. we'll speak to senator debbie stabenow next. and in the next hour, transportation secretary pete buttigieg is going to join us to talk gas prices, the supply chain and much more. and as we head to break, a look at the winners, the s&p and the dow. "squawk box" will be right back.

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with a qualifying bundle. welcome back to "squawk box. that bipartisan bill to provide billions in subsidies and tax credits to the semi-conductor industry is one step closer to being approved by the senate >> good morning, andrucew, the

senate is on track to provide tens of billions of dollars of incentives to the chip industry. democrats and republicans banded together on a vote to move forward with the chips act the tally was 64-34 with 16 republicans in favor it was framed as a test of gop support, not just for chips but other related provisions >> it bodes very well that we can get this bill done with a large vote and get it done as quickly as we can. so i hope we'll move forward, because this bill is so important for jobs and the future of the american economy >> now immediately after the vote, schumer released what lawmakers have started revealing as chips plus. it authorizes more money for the national science foundation and technology hubs at the department of commerce and focuses on s.t.e.m. education, but republicans in the house are not so enthusiastic.

they're worry thaied that this l is not tough enough on china and the cost it could be up to $250 billion and they have an unlikely ally in this fight. vermont senator bernie sanders he was the lone democrat to vote against the bill last night. and he said washington shouldn't be helping companies that are raking in profits and paying their executives exorbitant compensation packages. that's over to you >> all right, politics creates a lot of strange bedfellows. for more on the senate's vote on the semi-conductor bill, let's bring in debbie stabenow, a member of the finance committee. sometimes you find agreement, senator. can youesque explain how that w to people? >> good morning. it's wonderful to be with you. when you have far right and far left agreeing to something, that means common sense is in the

middle very much about common sense in terms of looking at a global economy and what is happening around the world and, you know, it hit us right in the face because of the pandemic but we've seen the amount of semi-conductor chips made in america go from 37% in the '90s down to 12%. we've created this just-in-time economy dependent on more than half of our chips coming from one company in taiwan, and that didn't work so well when the economy was shut down. so in my state, there are automobiles that can't get made or half made sitting on a parking lot somewhere and can't move forward all the appliances that need chips not counting the national security interests moving forward as it relates to 5g and beyond in communications so this is common sense in my mind it's a partnership between the public and private sector to bring the jobs home, lower the

costs and strengthen national security >> sometimes if both sides have certain concerns, though, maybe you need to look at both we are talking about very profitable companies here. and a lot of times it, that's probably what senator sanders would say, and you could use this money, maybe across the board for a lot of different uses, but it's been pointed out you could do certain research and development for all u.s. companies till 2025, tax breaks for that rather than just the chips. and then on the right side, people would say this is more about the government picking winners and losers and deciding who's, what, you know, what we want to invest in, that historically, the government hasn't been good at. and it's been very inefficient at >> well, first i would say that particularly in the energy for

instance our country picked winners and losers 100 years ago with robust oil and gas subsidies instead of focussing on what henry ford was trying to do a hundred years ago, which is create a battery-powered vehicle. we went with oil and gas we created, we picked a winner, and they won so our tax policies do incentivize various parts of the economy, based on what is viewed as the right thing in terms of america and the economy and so on and we can debate those things, but what we know is this, right now our companies in america are competing with countries, not, in china right now we have them fully government funded, creating these technologies, owning the semi-conductor chips market at a time when it's not only in every part of our economy from cell phones to automobiles, but it's

about national security. and if they own the advanced technology and national security and will not share that with us, we are in deep trouble and so -- >> we're sell ahead at least in that they make a lot of the commodity chips. but is the elephant in the room that maybe someday taiwan is not taiwan anymore, and it becomes china, and obviously, they, we need taiwan semi-conductor in the back of maybe a lot of senators' minds, is that a possibility? that that plays into the national defense >> well, you raise a good question is that a possibility? it's a possibility in the future. i mean, we have to look strategically down the road in this highly-technological world that we are in to make sure that america does flott come not com,

whether that's on national security or in jobs. we need to make things in america. we need to build things, create thing. sfwlun >> one of the related questions. asml, based in the netherlands, it has a monopoly we think of the netherlands as our friend right now do you think the government should be doing something, i mean they have patents, so i don't know what you're going to do about it, but do you think that's something that needs to be fixed >> we need to create a level playing field and invest in american ingenuity that's not a throw-away line we are the ones who have created so much of this technology in fact that china steals over and

over again i can tell you. the reality is we need to invest in the support for r&d, the incentives to do their here. how do we make sure that those jobs are coming home to america? and i will say also, the european union watched what we did in the senate on chips and decided that they'd better compete with us. they've passed their own chips bill that is almost word for word our bill and are going to move ahead, whether we do or not. so we're in a global competition right now. and we immediate to support american business, american interests. >> senator stabenow, thanks for coming on the show this morning. appreciate it. when we come back, transportation secretary pete buttigieg will join us ttao lk energy price, inflation and more stay tuned, "squawk box" will be right back

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almost a million people ditched the service in q2, but the stock is up, and we will tell you y and gas ticking down again we've passed through the 4.50 to the mark is a three-handled nationwide average coming up next we will ask transportation secretary pete buttigieg he's going to be with us live in the final hour of "squawk box" as we begin right now. good morning, and welcome to "squawk box" here on cnbc, live from the nasdaq market site in times square, i'm joe kernen, along with becky quick and andrew ross sorkin u.s. equity futures are in the red after a big session yesterday, down 63 points now as you can see. and the nasdaq getting back a little, s&p, a big day

yesterday. the russell 2,000 coming off its best day since january a quick look at treasury yields. we haven't talked much about treasuries recently, that hasn't been the main driver. been a bounce, for reasons unbeknownst at this point, definitively although the story that brian's bringing us out of germany may account for some of the weakness today. let's get you caught up on some of the stories investors will be talking about today. inflation and consumer concerns pushing mortgage demands for the lowest level since 2000. that is according to the mortgage bankers association applications last week for a mortgage to buy a home dropping 7% they were 19% lower than the same week a year ago chinese authorities could hit deidi global with a fine of more than a billion dollars, but

it may bring an end to a year-long cyber security review that has severely constrained the company's business the journal also says the fine would clear a way to do a listing of didi shares in hong kong and check out macau gaming stocks they're rising after a reuters report saying the territory would reopen casinos saturday amid a drop in covid infections. melco is the biggest gainer. and let's get back to the markets themselves with daily averages having the best day in a month. mike santoli joins us with more. hope springs eternal, but katie stockton kind of brought us back to earth earlier today >> yeah. one day doesn't flip the trend for sure so i do think there's still a burden of proof. but yesterday, not only was it the best index perform nnance i about a month.

it was the broadest under the surface in some measure since the 2020 rally off the covid low. there was something pfor bears o think about. it suggests people are positioned too negatively, especially in the indeces. and you had a burst higher it's a small step. hesitating, some of that news out of europe probably part of it take a look at the dollar. it has come off the highs, down three days in a row coming into today, bouncing today. so it does show you that there's just general hesitation in all these moves. u.s. dollar index has been part of that financial conditions tightening that we've seen for a very long time and, again, that did come in just a little bit. i also was going to try to see, netflix versus paypal.

two-year chart, they look the same they had this kind of massive growth stock multiples everyone loved them up here, because you couldn't pay too high a price to have the leading player in the absolutely fast-growing digital world, whether it's payments or streaming. both of 2011 crashed a similar amount but both of them have market multiples. their valuations have been compressed both of them have down earnings this year, supposed to get back to 2021 levels in 2023 we'll see how the market deals with these busted growth stories going on from here, joe. >> fascinating that they're both in the same place. their financials are totally different. >> yeah. >> totally different >> just shows you, can you group risk trades together sometimes and what happens when you de-risk, it all seems, i guess it kind of makes sense what was i going to ask, sentiment, mike. we've talked about how despondent and hopeless a lot of people feel about the market right now, yet we haven't seen

that confirmed with the vix and other sentiment indicators i have trouble deciding what sentiment is right now is there complacency or bullishness around >> i think it's fatigue. people aren't negative, because they want to buy protection for big down side in the next 30 days it is grinding decline people have generally given up on the upside story. i think the big piece of the sentiment story that doesn't conform to the everybody hates the market point of view has been fund flows and retail investor equity allocations which have remained somewhat more elevated. that's sort of the last piece of it hedge funds, super negative. i think the other part of it, i don't think there's a magic level of vix we have to get to we in the high 30s or mid-30s at the market highs in june i do think you're right in the

sense that there hasn't been any kind of desperate exit where people think there's immediate danger that they have to get out of way of. maybe that's a piece we need you don't always >> interesting mike, thank you for that by the way, to the extent you're looking, netflix is at 18 times pe you're looking at paypal at 25 times pe i don't know which you think is a, does that mean netflix is a value on a relative basis? >> either one of them sound exorbitant in price. >> not anymore let's talk a little more netflix. from the west coast, netflix shares jumping on second quarter results that weren't as bad as fear julia joins us good morning to you, julia >> netflix reporting a bit of a mixed bag. revenue fell a bit short but the stocks soared on the company losing 970,000 subscribers, but it's now up

about 6%, but it soared because that was less than half the 2 million subscriber loss anticipated. that fact overshadowing the fact that the company's q3 guidance was far less than wall street had expected >> definitely the end of linear tv over the next five, ten years, so very bullish on streaming. and then our core drivers are just continuing to improve and then of course we'll talk later in the call about monetization and how that's improving. so tough in some ways losing a million and calling it success but really we're set up very well for the next year >> company is optimistic about the potential for its ad-supported service in the works to launch early next year saying that they aim to ultimately deliver something better for advertisers and consumers than linear tv, also saying that they're on track to secure the additional content

rights ha they need to launch the service. >> today the vast majority of what people watch on netflix, we can include in the ad-supported tier today so there's some things that don't that we're in conversatio with the studios on. but if we launched it today we would have a good experience >> netflix said they'd pick microsoft to be their partner in launching ads because the two companies want to work together to create a new type of ads ecosystem as they said they also said they'd look for other opportunities in their partnership with microsoft, but they did not answer the question of whether they plan to partner on games as well andrew >> julia, in terms of the sort of larger business model, bingeing and the like. there's been lots of conversation could you create churn by stretching things up i know they've split up things

like "stranger things" into two pieces per season to try to do that marginally. could you start to window product, even going into the movie theaters or selling stuff off platform, do you think any of that is in the cards? >> absolutely. the fact that stranger things season was so successful and they did drop it in two different chunks, i think speaks to the fact that they really are recognizing that people are bingeing through content so quickly that it does not benefit the company if they drop an entire season at once, and they really have to stagger things to make sure people aren't signing u up, bingeing an entire season and dropping the service the following month. it really all comes down to the question, andrew of how do you make sure that the people who are watching netflix are paying for it and paying for it consistently and that's why monetizing people who are password sharing is part of it and so is the ad-supported

m model. >> do you think in terms of content, does this change the dynamic, does netflix tamp down on spending and therefore does everybody tamp down on spending? >> they said they're spending $17 billion on content this year, which is no small number, but pretty much in line with what people have been talking about. what's interesting is they did do layoffs they took a $70 million charge for severance costs, but it seems like those layoffs were tied to more tangential things how should you spend money on content? is it better to make a series? or is it better to spend a lot of money on a big-budget movie like "the gray man", which is launching this week. so i think they're trying to

figure out the balance between the series and the movies and which ones attract subscribers and what types of content keep subscribers around for the long term >> and finally, since you talk to so many in hollywood, i don't know if you heard tom rogers and cyn cynthia littleton, that netflix is the pace car. how much can youes extrapolate out? >> netflix is a pace car, but the one thing about netflix is that it's been in this game for so much longer than all the other players. disney plus is still finishing its global rollout so there's still so much opportunity for some of theis other newer players to continue their expansion. because they're so big, there's this fear that they are saturated whereas the younger players have more room to grow but i think people were

relieved, and i talked to a lot of people who were surprised they did expect the second quarter numbers to be worse than they ended up being. >> fair enough julia boorstin on the west coast this morning, thanks for waking up so early. the question is, how long can the slide in gas prices last we'll ask transportation secretary pete buttigieg for hostage. next, though, even if elon musk can gethimself out of this dea for twitter, he may have a different issue. too much cash. oh, to have such problems. after a break, robert frank will tell us about their pis problem we might all like to have. as we go to break, check out shares of baker hughes missing on the top and bottom line for the second quarter, the company cited obmsprle the stock is down by 5.75% stay tuned "squawk box" will be right back.

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musk's request for a february court date but even if musk wins this case he could end up with a new problem, and that would be too much cash. robert frank joins us right now to explain this is going to be tricky tell me why having too much cash is a bad thing >> well, if elon musk is forced to buy twitter, he's going to have to come up with $33 billion in equity. if he's allowed to walk away, he could leave with up to $8 billion in cash. and that is because he sold $8.5 billion of tesla shares back in april. he also has about $2 billion in cash from last year's sales. both those sales by the way, very well-timed, coming just before big drops in that tesla stock. if, however, he loses this case and he has to buy twitter, he could have to sell up to 12% of his tesla stake or maybe sell some spacex. if he wins and his penalty is only $1 billion to $2 billion, he would have over $8 billion in

new liquidity. what will he do with all that money? well, he could invest more in spacex they're out there raising money right now. he could buy tesla shares. that actually would be very profitable, since he sold that at an average price of 883 that stock now trading of course at around 736. or, he could save it, pabecausee has another big tax bill coming due in 2028. options from his 2018 pay package, those expire in 2028, so he could owe over $27 billion, based on today's tesla price in the future. so, again, what's he going to do with all this liquidity for the next six years he's got to figure that out, becky? >> i still don't understand why this is a problem. >> well, it's not a problem. it's just a big question, because, you know, he sold that stock so quickly, you know,

right after the deal was announced, but before he needed to raise it, and so, you know, there's some conspiracy theorists that say all this was a shacharade, he just wanted to sell this stock at a high price and therefore he has a ton of cash, what's he going to do with it all $8 billion is a lot of liquidity for a guy even who has 220 >> we know he can do whatever he wants. you saw some of those pictures from mykonos >> his own yacht >> little did i know, ari, is that what this job's keeping people cool with a hose? you've never hosed me down and i'd pay him a lot. >> i don't know. when you have that much money, you know what you do you go back and do what you love, and that's tesla and spacex and everything, which is kind of cool know what i mean because he said i'm not going to be here long i'm headed back.

that's kind of cool. it's not the money for elon, i don't think. >> or for us >> no, it's the money for us no, it's not, no, no we love it when we come back, secretary of transportation, pete buttigieg he's going to join us live on this month's fall and gas prices and what drivers should expect and don't miss tomorrow, john stankey will be live stay tuned we'll be right back.

all right, welcome back, everybody. gas prices across the country have steadily dropped for the last month, and the white house says that this is a hopeful sign that inflation is cooling. joining us right now is transportation secretary pete buttigieg. thanks for being with us today >> good to be with you >> there are white house representati representatives taking a victory lap saying prices are down at the pump i just wonder how concerned you should be taking a victory lap most say we will see higher prices even throughout end of the year and beyond. if prices go back up, do you then have to take blame for

higher prices if you take a victory lap now? >> no one out here's saying mission accomplished we want to make sure that it's understood that the measures the president has taken to reduce the price of oil have had an effect we all know no administration directly controls the price of oil. but there have been a number of measures we think are helping. we've seen gas get back below $4 in most states that's encouraging i have noticed the price of oil is falling more quickly than the price of gas which we continue to have questions about. but at the end of the day, this is an encouraging sign amid a number of encourage beining sign if we recognize that we have a lot of challenges from shockwaves that continue to reverberate out from the colossal effect of the pandemic to destabilizing events like the unprovoked war against russia.

still something with profound economic and strategic implications >> one of the issues that the administration has said is helping things is the release of oil from the strategic petroleum reserve. at what point do we run out of that oil, at what point does it need to be replenished >> obviously, that gets built up over time when you have the opposite conditions, when you don't see the kind of pressures on supply and the pressures on prices that we're living through right now. that's exactly why we have it. and i have a lot of regard for the decision making that went into setting the level, which was unprecedented and how large the release was, but still allowing the u.s. to maintain a strategic position and reserves that are going to be needed for other situations obviously, a lot goes into the decision about when to buyback into it. the bottom line is the president saw a moment where action was going to be helpful, took that

action and it's one of the things that contributed to oil prices moving in a better direction since that choice. >> i have a philosophical question about how we approach things in terms of dealing with, with emissions and dealing with trying to, trying to cut down on the use of fossil fuels and how we deal with what europe might be facing. what i mean by that is there are real possibilities that people might not have air conditioning during a heat wave, or in the winter that they may not have enough energy to heat their, to heat this homes at this point. now the mitigation factors that we're employing to try to cut down on emissions, those really aren't going to cut co 2 emissions to probably 2030 and while we're dealing with these, we've got india building coal plants, china building coal

plants hand over fist and emitting and not really helping our efforts whatsoever whether wind and solar won't power the homes in europe, how do we not use hydrocarbons to make sure that near term these people aren't either freezing or dying from the heat? it seems like a real quandary at this point to try to do these, the near-term, try to do these things when near term we need po power. we need energy how do declare a climate crisis in the middle of an actual weather crisis >> obvious thly those things ar closely related. it's 100 degrees in england today. we've seen things that are basically all but statistically impossible but this is what a transition looks like you can't flip a switch. you can't do it overnight.

and you mentioned europe one of the things i saw during a visit to the netherlands recently is even how in that extremely green-forward country, you see windmills, a lot of clean energy infrastructure, you also see miles and miles of petroleum-related infrastructure, because that's part of their energy mix, part of their economy and will be for some time. nobody thinks that you can make this change overnight, but also there's a clear understanding that when it comes to the climate, we're running out of time the science is unambiguous in terms of the level of threat, in terms of the lives and livelihoods that america and the world stand to lose if we don't accelerate our action, and i don't think we should be following the lead of india and china. countries like india and china should be challenged to follow the lead of the united states. >> the reality has set in, mr. secretary. the realities may set in in europe and we may see the down

side, for example, fort president declares a climate emergency, executive order, we are going to stop drilling oil and gas drilling in the outer continental shelf. we will do all sorts of things to limit the production of hydrocarbons at this time, with the idea that by 2030 everybody's going to be with us? you think we're going to be able to change the weather or the climate between now and 2030 >> we changed the climate between 2010 and now and not in a good way. so yes, we can and must act to make sure that we reverse the worst effects of climate change. look, some of it's upon us right now. this is not a question of whether it's going to happen or not going to happen. >> they're going to keep rising until 2030 no matter what. >> it's a matter of how many lives and livelihoods will be -- >> die from the heat freeze or die from the heat with

something that may or may not happen by 2030 >> they're dying from the heat because of a climate-related extreme -- >> 2030. in the meantime, they need energy to cool their homes and to heat their homes in the meantime >> right, and as you know, the other thing that's striking is i've noticed some naysayers in the u.s. speaking as if the only power sources that exist are solar, wind and hydrocarbon. obviously in europe they have a mix that relies partly on nuclear. we have more options that are being developed in the u.s. as well as being smarter and more efficient with the energy that we have. energy efficiency has often been described as the fifth fuel. and in the transportation side of things, finding less-carbon-intensive ways to move our vehicles. electric vehicles, we're fighting to make evs cheaper and getting charging stations across the country. i've never known the united states to be a country that looks around the world and says

what's lowest common denominator, let's do that, or we don't have control over every single piece of it, so let's sit back, accept the status quo and let some other country lead. that's not what america does i think you will see the president's insistence in league the world instead of matching some other country that isn't doing a good job >> let me ask you about news of the morning. as a cabinet member and a representative of the administration, i would like to hear your thoughts on this the eur the european union has a plan to reduce usage by 15% through march of next year that is a huge undertaking it's going to mean, we understand why they're doing it, when you have putin threatening to cut the supply of natural gas coming through, but that is going to mean a lot of different things for the comply there, the

supply chain here. all of these things are interrelated how do we help them when we have that port for moving that lick wh whichfied gas that's been shut down temporarily because of an accident there >> i do think that this is another moment that calls us to think about the relationship between the symptom and the cause. it's been true for western countries, certainly for the u.s., also for european countries that the more reliant on hydrocarbons we've been the more dependent we've been or vulnerable we've been to the choices and actions of dictators and aggressors abroad. obviously, europe is very intertwined in terms of its energy sector and its macro economic outlook with what's going on with russia they've taken remarkable, and i would say admirable stance, given how much they have to lose against the russian federation's addition, and thousannow they'rg

measures to protect their economies, and having stepped up and recognized some economic pain was going to come withstanding for democracy and freedom. what they're doing does speak not only to our interests and alliances but shared values. and certainly i'm doing everything i can to work with my eu in eu in europe even counterparts >> it's this constant battle we're fighting, worried about home and helping allies overseas >> i'm not here to make news on energy policy. the soonerque be focussed on domestic, clean energy production as leading the way in the u.s. energy mix the less we

are confronted with some of the most confounding questions of geopolitical risks that come with the 20th century economy. i'm still astonished that some folks, and i felt this, i was testifying in congress yesterday. some folks seem to really struggle to let go of the status quo. if someone wants to raise the reasons why it's hard, those are absolutely challenges we should be taking on and working through, but if it's done as an excuse to do nothing, all we're doing is sign up for more of these investivexing questions t our alliances and values against each other year after year after year i don't want that to be dominating our public discussions in the middle of this century the way it is at the beginning of the century. >> i know you said if president biden runs again you would support him, if he doesn't, would you consider running >> i'm completely focussed on my

day job. we've got a major announcement, at least one, every week we just did another round of airport grants our, close to a couple other announcements that are programs that in any normal time would themselves be pretty much defining for the entire career of the transportation secretary. so that's what i'm focussed on that's my world, and that's keeping me busy. >> secretary buttigieg, thank you for your time today, sir >> thank you good to be with you. up next, what hatched to the retail investor as market volatility stretched from the spring to the summer we're going to ask thomas pet peterffy th this is cnbc. your shortlist of quality candidates, whose resumes on indeed match your job criteria. visit indeed.com/hire and get started today.

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welcome back to "squawk box" right here on cnbc we've been watching the futures this morning and the picture has gratdually gotten worse over the course of time dow futures down triple digits by about 111 points. we started up about 40, maybe 50

points the nasdaq is off by 23. interactive brokersmis missg top and bottom lines joining us, the founder and chairman on a scale of one to ten with what you've seen in your long and productive life, thomas, how does theis market malaise in investor sentiment, how does it rank one is really bad and ten is pretty good. where are we right now >> around maybe four but, you know, it wasn't so bad. our adjusted net revenues were the second highest we ever had

so similarly, 453 million only exceeded one time before we missed the forecast, analyst forecast because of higher expenses which are due to our continuing to build up our global infrastructure for software. so we continue to actively grow and train our workforce. and in view of the large inflation numbers, it's necessary to give out special mid-year compensation increase so, our profit margin is the highest in the industry. so we would use the opportunity

to aggressively build up >> but the state of the retail investor right now, i guess, you're obviously managing through these times, interactive brokers is, but historically, the state of the retail investor right now is, does it, is it indicative of the beginnings of a low in investor sentiment and maybe a turn in the markets? or do you think we've got, in your view, obviously, someone with a lot of experience, do we have a long way to go before we get close to a real bottom >> i don't think we have a very long way to go i think we'll hit the bottom later on theis year. and it's going to be relatively smooth sailing from there on it all depends on how we cope with inflation >> okay. while we have you here, you've made comments in the past about your life and hungary and the

soviet, the former soviet union. we've got news today thomas that's actually affecting the europe peen markets in terms of natural gas and putin's moves with nord stream are you surprise td that europe has gotten itself into this position do you have any suggestions in how though navigate through it and how serious is this going to get do you think >> i think it's extremely serious. and we've gotten into this situation because of globalization. my view is that inflation is going to last a long time. and that is because one of the reasons for that is the globalization has to be reversed and we have over the last several decades we have made, we have taken advantage of globalization in the sense of having reduced the prices of

goods and services because we able to source it always from the most effective, cheapist places and that's not going to happen in the future. so yeah. it's going to be a big problem and, you know, the other thing is the considerations that you will have to add that expensive work arounds for production and many companies for many years to come and finally, we have higher interest rates on the u.s. debt which will increase deficit spending and the debt, and we will have to live with it forever, i think >> do you think that germany or the europe peens were lulled

into a complacency in terms of dealing with putin and russia? do you have a way out of this energy crisis, which could really get serious on the continent? >> well, you know, let's face it, if you look at this from a historical point of view, we only had air conditioning for the last 50 years or so. i mean, you know, the fact is that we live at a much, much higher standard of living than we have for most of our lives. and i think there will be some reversal of that that's basically what the esg forecasts are telling us, right? you're just using too many resources and we have to tighten our belts and live a little bit more modestly. >> all right, thomas, thank you. we will have you on again soon and update us, good to get an update quarterly on how your

business is, but managing through things and maybe your bottom is close. someday, hope springs eternal. thanks >> thank you coming up, what to watch when tesla results hit the tape. thxt we're going to check in wi jim cramer and get his thoughts on the trading day ahead. "squawk box" will be right back. (vo) is three hundred and ninety-one thousand four hundred and thirty-four square feet... enough space for your ambition? loopnet. the most popular place to find a space.

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and check in with jim cramer jim, there are so many things i've been waiting to talk to you about today. yesterday's rally. today's pull back, a little bit of one and what's happening with natural gas. where do you want to start >> let's talk about yesterday's rally. i think was the rally, there's some short squeeze but recognition that earnings had been pretty darn good. we were up early on, and then we had that story from brian about natural gas used as a weapon i think it's a quick give-up when you have your leader being a company that actually lost fewer subs than you thought, that's kind of a sub-par leader. so i think it's just a little bit of a profit taking year, and that's all >> the bigger issue with natural gas being used as a weapon by putin to try to break up the unity in europe in terms of the push-back they've been giving

him, this is kind of startling, when you sigh the ec actually put out something that they want all their member states to be able to have a plan for cutting their usage of natural gas by 15% from august all the way through the spring of next year. that's hard to get your head around >> they made their bed, they got to lie in it they closed coal they closed nuke they want to rely on 27% of the country's sunny. i mean i think germany really screwed this up and that we've all been dealing with the fact that germany was the one that could be most afflicted, particularly because they have all theis chemical companies and steel companies, somebody has to lose i think we overly focus on europe, though we do want to see the euro go higher, but that's really the only thing i care about for now >> just in terms of international earnings and companies. >> that's it >> what else are you watching today? >> i think we've got a kind of a

s stayis it's been ages we haven't seen them lead in so long i think it shocks people they've been levitating. i like that. >> yeah. it's okay,so, who are you going talking to ining to on "mad mon tonight? you have a great lineup. >> larry fink. they're involved in the export of natural gas to europe >> ah. >> how much can we export to them and how much do we need here i'm deeply involved in that because you're absolutely right, we can't have natural gas get off the grid in europe or germany. the thing i want to emphasize is we're doing better than everybody else, and that is my main theme >> the way i keep coming at this, though, is we want to help our allies, we want to make sure we can send as much natural gas there to keep that coalition together and you nighted

but when we do, it means that natural gas prices here go up. >> exactly >> we don't have a huge amount of -- a deep well of sympathy in terms of being able to say, yes, we want to help you but we're willing to pay higher prices for that as soon as we saw gas prices at the bump go up, a lot of that disappeared. people said we don't want to pay the price. >> exactly we want to help them without hurting ourselves. >> we'll be watching tonight that will be a great interview larry fink too we'll see you in a few minutes don't miss that exclusive interview with larry fink tonight on "mad money" at 6:00 p.m. eastern time from the nyse. "squawk box" will rhtacbeig bk.

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tesla reports earnings tonight. phil lebeau, what can we expect? >> well, i think the most interesting question is will elon be on the conference and what will he say i don't think he'll say anything

regarding twitter, but the focus for wall street will be the numbers we get tonight some of these we know because of the delivery numbers that came out a couple weeks ago but auto gross margins is the number-one statistic or number in the earnings wall street will be looking at. do they hit 30% again? the gigafactories. and china production we know it had ramped back up following the covid shutdowns in shanghai what's the outlook in terms of production in terms of delivery, we got those numbers a couple weeks ago and they were down in the 23k as expected for the first half, 559,000 vehicles, but the projection from wall street is still they hit close to 1.4 million deliveries this year there will be an increase in deliveries at least in the expectation in the second half this year. a lot of people will be wondering what does elon musk have to say at the analyst call that starts at :30 p.m.?

he won't talk about twitter. he will make comments about tesla. whether or not they're market-moving comments, they've been muted in the last couple quarters the expectation from analysts is low. finally, looking at shares of tesla, yes, it has moved up a little bit within the last week. we see this often when tesla reports its numbers. the stock picks up a little bit before the numbers are released. tesla's market share in the u.s. standing at 71%. numbers come after the bell, then we have a conference call at 5:30. >> phil, thanks. joining us to talk earnings and markets with a little more than a half hour to go before the opening bell on wall street is liz young, held of investment strategy at sofi friday and tuesday, those are bear market rallies or the beginning of something more positive, liz, in your view? >> unfortunately, these were more technical rallies,

especially yesterday look at some of the stats, right? we had the russell 2000, the s&p, and the nasdaq move back above their 50-day moving average. we had a healthier advance decline ratio since april 2020, and don't underestimate the power of that bofa fund manager survey that showed people were still more risk off than 2008. i think a lot of investors use that as a contrarian buy signal. unfortunately, i don't know it's necessarily over yet i still think we need to wait through the end of july. i've been saying that for a while. because there's so much data to come next week more than 30% of the s&p reporting. we have gdp. we have a big fed meeting. i want to get past that and see how the market digests it before jumping back in. >> it's already mid-july, so we only need a couple weeks before you tell us what's going to happen, liz?

we hear october. we may hit the lows in september or october do you think it's really important the next month >> i think the next ten days is really important i think we need to get past the fed meeting where they do one more big hike, and it gives them clearance so far that we've had this falloff in energy prices, commodity prices, and there hasn't been spuper surprisingly strong housing data. that gives them clearance to move 75 instead of 100 i also think there's still is that big gdp number looming large in the distance. the market might expect it to be negative that doesn't mean if it comes out negative the market will celebrate it i think we need to digest some of that. the names we'll hear from earnings season next week, consumer names, tech names, industrials, terms, we'll hear about some of the good sensitive sectors that might have been squeezed on inflation, and the market will have to digest if

that guidance is poor. >> the report -- the quarter that's ended and then also try and give a forecast. i guess they'll both be important. but historically, how do you view the ability of management right now? why should it be -- is it better than what you have or what i have they might be waiting for same things you're waiting for. >> well, look, the visibility into their own companies is certainly better than what i have or what you have, but they're also operating in a certain sector, right, and dealing with forces that are specific to their company or their sector i think that's why we need to wait for a few more of these reports to come out and get to more than that 50% of the s&p has reported phase, because then we can draw broad judgments. we can't do that right now. >> we don't have enough data right now. it's too early >> don't extrapolate right. >> which sectors will you be

most interested in hearing from? we only have ten seconds >> consumer discretionary and health care, and i liked the financial stuff that happened last week and the beginning of this week. >> very good liz young, thank you is that new? is that a special? >> it is not new but it is a mary duffy special >> with the hair, all the color, it's nice. excellent. thought i old say that compliment join us tomorrow "squawk on the street" is next good wednesday morning welcome. to tr"squawk on the street. i'm carl quintanilla with jim cramer and david faber coming up, all three indices near highs the eu proposes gas rationing for its members. we get tesla tonight our roadmap begins with, q