you can see green now. i don't know whether dollar weakness weak weakness helped but not much >> ecb, economic numbers >> call sophia and find out what she thinks. >> join us tomorrow. positive today a little mini rally here "squawk on the street" is next good thursday morning. welcome to "squawk on the street." i'm david faber. they always tell me over there that's jim cramer. carl is not here he's got the morning off well deserved. let's look at futures. one half an hour from now to the opening bell what we heard from the ecb seemed to be the turning point >> absolutely. you nailed that one nine ways from sunday. >> 50 basis points in terms of

an increase. it will be a heck of a show here we're just getting going >> i think the teledoc is down big because of the acquisition of amazon. >> i want to talk about that i want to start with our "roadmap" because that starts with tesla an analyst is agreeing with you on "squawk box." >> i love that >> biggest drop in operating costs since 2019 what elon musk calls embarrassing >> the greatest call that was a brilliant call. >> inflation headwinds in the global economy we'll discuss european's central banks did hike rates, the first time in 11 years. jim has mentioned the fall in teledoc's stock price. we'll talk about why amazon's $4 billion health care plays, all cash deal, not large, but the implications perhaps larger although frankly we've seen

amazon conceivably moving a lot of things they don't actually move into. >> two directors of health at one point fighting with each other. i'm glad that's over they didn't fight in the war room. >> they didn't disrupt anything. let's get to tesla because the stock the up in the premarket, this on better-than-expected second-quarter earnings. revenues did come in light of at least what the analysts who follow the company had been thinking and profit margins shrunk. this, of course, because of higher costs they've had a lot of supply chain challenges here's what elon musk said about pricing on last night's earnings call >> they're frankly at embarrassing levels, but we've also had a lot of supply chain interruption shock and crazy inflation. so i'm hopeful, not a promise, but hopeful at some point we can reduce prices a little bit.

>> interesting he's talking about reducing prices at some point. >> who did that? >> reduced prices? i don't know >> henry ford. >> henry ford. maybe because he became more efficient making automobiles >> said, listen, a working person should have a car >> right >> but i thought this was a tour de force conference call >> you did >> yes, because he talked about what's driving prices up but austin is ready to ramp. making cars in the capital of bmw. he was fun, lots of answers, but the main through is there is such a level of demand that once again he's not able to sell. by the way, supply chain problems lessening that was good. that was something that larry fink said last night, the

largest asset manager. this was not a fresh call other than when we kind of told tony what the heck are you talking about demand but i liked this call. i always like elon musk, but the only thing, the black mark, was the weirdo crypto thing. >> yes >> people turned on crypto >> saold a lot of bitcoin becaue they needed the cash >> how about this? i heard someone say this morning, you know, the crypto universe is okay because he was able to sell crypto. that's great the banking system is sound because you can take money out of your bank what are they talking about? the crypto maniacs, they've reached new levels of what i regard as being manchurian -- the manchurian crypto. >> really. >> yes manchurian crypto. it's the finest, most wonderful coin

i am souring because the idea that an edifice is not destroyed by musk's sell is not an edifice i want to be in. >> bitcoin is down >> it could be -- >> significant sale ls of tesla. he did at least raise the idea they could increase their holdings in the future they could go back to buying some bitcoin back to the tesla quarter itself, though, and to the key variable, demand there's no sense that demand has waned, correct >> just the opposite >> even with higher prices and the prospect of a slowdown in economic activity and/or a consumer that may be under more strain. >> we know the lithium market is cornered i think the mexican government has -- >> lithium -- the lithium market is somehow cornered? >> well, the price of making it -- for the second time he alludes to the fact that they're making -- the company is making refined lithium are making way

too much money, and if anyone is listening who knows how to make lithium cheaper, they should do it >> likes to urge entrepreneurs to enter lithium refining. >> isn't that great? >> refining is harder than the mining >> isn't that great he does that a lot of people saw this last night from blackrock, the idea of funding people who are doing just that is so brilliant. >> need a lot of lithium for those batteries. >> i know. >> it's not just -- five years ago it was just tesla. now so many different companies. you saw the numbers in europe i'm sure in terms of recent sales of electric vehicles versus overall approaching, what, 20% i remember >> because that continent is in disarray, though i mean, when draghi gets the boot -- >> we're changing out to a political one. >> you knew that when you became my partner

>> i embrace it and i love it and our viewers put up with it but sometimes -- >> thank you the two things that were incredible that year, then the collapse of the second largest company. they had a supply problem, now a demand problem this is what i call double ordered. there is a lot of their product. >> good point. we should talk about europe as well because they did raise rates 50 basis points. >> he raises it obviously the same time there's supply. >> you know where the 50 basis points got them too, right >> zero. look, i just think that the fact they raise it could make it so the euro at least isn't going to -- >> yeah. take a look at the euro and the dollar the dollar's strength has been something we've talked a bit about. >> that window to book >> negative impact on the balance sheets or on the sales of numbers of some international

companies. >> well, the biggest negative on a lot of the drug companies, people felt that it was -- i'm sticking with the dollar i'm not going virginia woolff on you. >> thank you >> or faulkner, right? >> yes or joyce >> "the sound and the fury" had no periods wrote the whole thing in one sentence a lot of the companies that are international have really been clubbed here ibm is very international. have we seen a decline in that stock? >> yes after earnings, it got hit very hard >> a lot of that is the dollar >> it had been one of the bitter performers this year given that it was up. >> people want tech, david it's back. i have faang fences right here. >> all the analysts coming out and -- >> yeah, listen, don't worry, amazon time to buy the last cut the last cut is the deepest. what is this stuff alphabet, still a port no the

storm. now we have this sailor thing. snap, better stories to tell i'm not buying that at all and meta preview could be better than feared. >> i want to get to all of that. >> people still want tech. that's the driver. >> you want to believe -- >> wow, you're good. >> they want to believe. does tesla get lumped in in a weird way to tech? >> tesla is jeannie ahn mall unto itself. it's a cathy wood -- she's had a couple of bad days -- no that's a young person's say love affair >> right >> and, david, i want to point out larry fink told me young people will do crypto, but if they invested long term and you can vote your position, your attitude for instance, say you wanted climate risk, only 25% of people

do this, you're worried about climate change, you check a box and they will vote against things that harm the climate i think young people have to start seriously thinking about not just tesla, not just game stop, not just amc, but about investing long term in funds where they could actually vote their view that's what people should be doing. >> that's a path to take >> i need them to diversify away from tesla >> the through vote for the funds. >> yeah. and i think ford is cheaper than tesla, and i think we have to stop the obsession with netflix because i think that disney is much cheaper so, all these things are playing out in a way that make me think there is a rationale developing in the market. some of the cheaper stocks are starting to go up, david qualcomm, 11 times earnings. look at the breakout in that and the rationality happening in

the cruise lines now suddenly, carnival at 20 in april and now doing an offer >> a billion dollars >> i say you go with the good balance sheets, good growers, and if the dollar does get even a hair stronger, you have multinational companies that would be terrific. >> look at carnival. it is getting hit on news of that offering. we've talked about how they've expanded their balance sheets as well on the debt side. >> right >> through the pandemic, obviously. the airlines as well >> a mixed performance >> some of them, we can take a look, the airlines seeing some pressure in the premarket as well you n you nighted, it was a risk, warned about the impact of higher fuel costs there and an economic slowdown. >> but people are reacting to the fact they haven't been on a united plane that wasn't completely filled. >> right >> i think these are all -- the travel and leisure names, a lot

of people feel they have peaked, david. american express is about to report. >> we had this, i think. "squawk box" i believe did speak to american's ceo. >> yeah. >> and american by the way, its earnings and revenues were essentially in line. youp saw the airlines are going to be low they are morning take a listen to what he had to say. >> we had a solid memorial day, 4th of july kicked back where we wanted to. we're running a decent operation in july. looking forward, the adjustments we've made to our schedule will give confidence to our team members and also our customers >> he's still somewhat optimistic >> i don't blame him there was a little note today about jack-in-the-box, a restaurant chain. >> thank you >> peaked in the month of march meaning that the gloom set in beginning in april that could make sense in that you might have booked your airline tickets early and maybe

that's a tailoff or a cruise ship but we've seen no diminution in traffic at disney or universal >> it's a very nuanced picture of the consumer right now. you had john on "squawk box" and i spoke to the ceo of at&t on the phone. not black and white is what he says delinquencies are ticking up at at&t from prepandemic levels >> they take your phone. >> longer to collect receivables. but maybe at the low end there's more pressure. but at the same time, as you point out, still seeing some strength from -- >> right then you have senator warren, the pharmaceuticals raking in over $292 in the pandemic, overseeing skyrocketing company profits. well, i'm not as angry at them as senator warren, but once again, capitalism under attack many different places at a time when the country has gotten

gloomier job claims spiking for the last three weeks. housing cancellations are way up i don't like a lot of these things, but i do like what i see from the actual companies we've all given up on, the five and six time earnings. >> we mentioned that amazon deal we'll get back to that as well with that new acquisition they announced this morning a look at futures, 16 minutes before we start trading on this rkto ehae.traight from the new we are right back. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done. i'm okay.

amazon is ramping up its push into health care. it announced this morning it has agreed to acquire one medical, 18 bucks a share, all cash you can see that is having a very positive impact on shares of one medical up over 66% but still trading below. you never know with amazon when it comes to antitrust and how they'll be viewed even though they have no real presence at all. so perhaps there's some caution. all-cash deal, most likely closes fairly quickly. more to the point, jim, and we'll bring in our guest for more on this in a second but health care is high on the list of things that need reinvention. one medical say they're human centered, technology powered, u.s. primary care organizatione

across the country with digital help and virtual care. >> virtual care. >> interesting because a lot is in person and teledoc shares are down you pointed that out in response to this. but amazon, we thought they were going to disrupt the pharmacy benefit managers >> they did not. >> we thought they might disrupt the insurers and the drug distributors. >> they did not. >> remember the deal we talked about, haven't heard a thing even whole foods >> supermarkets. >> even whole foods. what have they done? >> supermarkets. web services is the engine there. but this is you know what, the beginning of jassy's direction >> maybe >> i would tell you, this is a company that lisa gill, jpmorgan top analyst, has championed. i think there are many people who feel still that getting a doctor's appointment is a bad experience

>> right. >> and i think that amazon, when people come in, think they can do a better job. >> maybe they'll help to transform that primary care experience bertha, do you have any perspective on this to help us understand going through the various areas you know well where we thought amazon might try to disrupt things. >> when it comes to health care, they were using all of the parts separately last december, there was a company that would build up amazon prime to head up amazon health care. they could perhaps, you could envision them prying to bring it all together because they've tried to market amazon care, their virtual service which they use for their own employees. pill pack hasn't found traction with that either i remember talking with some amazon health care executives saying why aren't you bundling those together now when you put in in-person care buying one medical, which

had been shopping itself around like so many of these companies, they came public back in january 2020, ahead of the pandemic, it did fabulously well. and like a lot of these health tech firms they've seen their valuations just crater over the last year and just not really gain enough traction so this will give amazon a physical and virtual infrastructure there have been some reports that cvs had approached one medical as it tries to build out its in-person care at its pharmacies this is where everyone in health care is looking. you want to be able to have both those capabilities you want a front door, somewhere where someone can go and actually see someone in person when they need to, have a reliable primary care relationship with those doctors, not just an urgent care thing where you go once and you meet a stranger and don't really know who you are and what your history is

so this is the first indication under linsey maybe they're trying to bring it together. amazon has partnered with crossover health when it comes to clinics this is another -- this is a privately held company and they have done clinks for amazon in places like texas and arizona where they have large ful fulfillment centers to try to treat their workers and their families as well it's interesting they're actually buying one medical even as they have partnered and been a big investor in crossover health it shows you maybe they're trying to put it all together and move more deliberately >> yeah. bertha, thank you for that perspective. it is interesting. the ceo of one medical will remain ceo

remember when warren buffett and amazon got together and they were going to reinvent health care and gave up health care is something that's outrageously wrong in this country, we all know i hope amazon gives this a real shot there are many competitors of teladoc. that was a big cathie wood name. she's been terrible. >> okay. >> now, cvs is down a lot op walgreens has not made its move yet. one of the hidden things that people don't know is pilferage >> shrinkage that's why everything is under lock and key at cvs. >> it's easier to order from amazon and have it come to your house than it is to get someone at one of these drugstores to open -- you ever try to buy a razor blade? >> i can't buy ice cream behind lock and key. >> here's the strategy they let you steal one thing, but if you steal more than one

thing they nail you. the fact that this is actually true is shocking you can steal one item you know what margins at these places are, how thin they are? >> i know. look at that >> there was a diversion in front of me at target where a guy was demanding -- >> i know. >> diversion so there could be a jailbreak of people stealing things >> left a mark >> i said to the clerk, i'm going to pay for this. and the clerk was puzzled. >> think about your "mad dash. that's what we have coming up as we count you down to an opening bell that's less than seven minutes from now more "squawk on the street" straight ahead

all right. let's get to a "mad dash." we have about3:30 before the opening bell >> i had the privilege of having a chat with tim cook, number-one ceo in the world and initially i pushed them

endlessly to break out services because i said services are going to be key to get a multiple not unlike a consumer product. >> kwwhat was this chat >> i do it before the conference >> every time when they report >> every time. i've become a broken record and they know that in the last, say, eight, saying we need to stream out the lifetime value of a subscriber because with the high quality means there's no churn so when someone takes a phone, they don't miss, so if you have a billion phones or 2 billion, we can if i can figure out the stream nothing about the plus being so good well, this morning morgan stanley steals my joel kwhoel idea, the path to over $3 trillion of market cap is cheaper than a cup of coffee, talking about the lifetime value of the discounted cash flow. i have said this so many times that perhaps they've heard me -- >> you've said it so many times because you don't think it's being effectively refliected in the stock price. >> yes because when you get this, first

of all, no defaults. you see that you pay >> but also everything apple does with all their services is only designed to make you buy another one of these, right? >> i use apple pay constantly. i don't use anything else. i've gotten rid of everything but apple pay. i back up my photos. i watch apple plus tv more than i watch netflix. and i find myself -- if you took this away from me versus anything else except for maybe my wife and kids -- yeah -- i think that what you would find is that this is it and the source of news is fantastic. eddie cue, who may be one of the greatest and funniest guys, has made his mark. i watch every apple plus show. what i'm saying is that you can now figure out what an apple -- a guy who -- a gal, a woman who buys this is worth x.

>> maybe $508. the morgan stanley note you were referencing with the $3 trillion market cap idea. by the way, it was near there before -- >> one thing they didn't do that i did is figured out how much that is. >> how much are they worth >> that's what i keep asking >> do we have it in there? >> i keep asking >> do they ask somebody? >> they don't, which is why this is deeply flawed and not as good like ford should have talked about 600,000 cars, what was tesla worth when they did? jim farley finally did that. but it would explain if apple has a shortfall -- >> look at a the moves on apple. >> i don't like that ahead of the quarter but a number of reports have said things are better you know, i say own apple, don't trade it did you tee see the ubs evidence lab piece on advertising

>> no. [ applause ] let's get in the opening bells because we are going to -- we'll get them in three, two, one. there we go. [ inaudible ] getting them to zero essentially. first time they've raised in 11 year, connecting young adults with top companies over at the nasdaq, blackrock celebrating new model portfolios >> maybe we have some sound of my interview with larry fink last night he is someone who has -- >> you know who we do have sound from is john stankey let's work our way to at&t the consumer we were talking about it in

regards to the demand for tesla, talked about it in a number of different areas. at&t, the stock of which is down almost 8%, in terms of free cash flow, it was less than expected. it reduced its free cash flow estimates for the year from what had been $16 billion to $14 billion. it expects to deliver roughly $10 billion in free cash flow in the second half of 2022. the reasons that at least the cfo cited to me when i spoke to him at 7:45 this morning were working capital issues, jim. >> geez. >> higher device payments. they said that's a high-class problem because they've been selling a lot of iphones they said things -- >> a mismatch. >> -- on sereceivables. they said delinquencies are

picking up from prepandemic levels there is no doubt the performance on the quarter in terms of sub-s was quite good. over 800,000 subs. but the market is reacting to what you've always said which is important which is how much cash are you generating. >> that's what mike angelakis -- >> board member of exxonmobil. >> and they got a nice recommendation mike once told me in a talk i gave, i summed up what i got from the company, and he said i look at free cash flow and i look for profitable growth and that was it. >> that was it >> i had just been a gas bag talking about all these things i love him, okay one thing that at&t failed today is -- >> cash flow >> -- mike's view of -- >> that has to be why the stock is down. >> yes

>> it had been one of the better performers out there it was up as much as 10% yesterday. it is now with this fall back to almost flat for the year obviously, we are now past -- >> watching too. >> warner brothers, discovery. i'm got going to go to zas warner brothers discovery has not performed well either. the broader economy, john stankey was a guest on "squawk box" this morning. here's what he had to say on the consumer >> there's clearly some dynamics going on in the economy where we have customers that are stretching out their payments a bit. we expect that they're going to continue to pay their bills, but they're taking longer to do it that's not atypical in an economic cycle, and we're starting to see maybe the bottom end of the subscriber base making some decisions between, you know, am i paying this bill this month or that bill this month given the pressures they're seeing at home

>> it's interesting. there is a bit of a slowdown, but there's this question of the consumer he said the lower end but not the middle, certainly not the high you're seeing companies react very quickly with their decision to cut operating expenses, not capital expenditures >> not capital i think that the oddity here is that we have more than full employment and people are already stretching their bills and probably therefore doing it for autos too. >> no doubt inflation is having a significant impact not just here but around the world. we saw that 8% inflation number out of europe, 9.4% in the uk. >> enterprise doing better. >> it's a worldwide problem. >> all the cruise ships have to raise capital like carnival. i mean, there are many crosscurrents here, but the one thing i point out, david, is a lot of companies that have fantastic businesses like

danaher, travel trust, just killing it we have a fabulous business of great growth, of which there are many it's been a terrific time. >> another person on "squawk box" this morning, yes, we use their interviews, jon gray, the president of blackstone. >> he told a great story >> my friend john who breaks my heart every time by going on that show, stock is down about 5% blackstone also has a pretty broad-ranging view of the economy given all the portfolio companies they're seeing the p&ls on. this is what he had to say when asked about what are they saying when it comes to this idea of a slowdown >> we're seeing some slowdowns on the ground in shipping volumes in our ports, seeing it in online advertising, we're seeing it in furniture, we're seeing a range of areas where there's a deceleration >> yeah. >> he mentioned advertising. obviously that often times is a decision that companies will

make because it's easy to say, you know what, let's hold off for the third quarter or the fourth quarter right now >> his housing story was still pretty positive. >> yes >> and his broad portfolio working out quite well i felt that we could easily seize the negative there, but the positives i think overrode the negatives. >> you did >> yes >> i mentioned their b-read products a great deal, the blackstone reet taking as much as $3 billion a month. now it's flat. in fact, a report yesterday said incoming versus outgoing, they're not taking in any money. that's an interesting data point. >> very. >> yonjon was not asked about it there but a research report yesterday estimated on this analyst's estimates that redemptions are equaling inflows at the b-read. what did you take away last night from blackrock and larry

fink in terms of the economy or anything else? >> a level of optimism that supply chain problems are easing, that inflation, while not transitory, is going to be defeated by the fed. we have to give it some time that the areas of the economy that are overheated will have individual issues. he's most concerned about f famine, food shortage, food security this is a very practical man, and that should be -- we know that's been the single biggest source of revolution in the history of our world >> yes >> he's concerned about that he brought up the notion of fertilizer being too expensive there is a ferts lieser cycle. stock sells four times earnings. >> haven't there been issues because of ukraine, certain things that come out of there in the making of -- >> very much also a natural gas component but he's an optimist, and he also -- we really went over a

lot about climate change and how i think people are not understanding when -- he's focused on climate change. obviously, he's a believer in climate change >> very few people now are not. >> but he's focused on the idea of the business risk of it people have to recognize it's one of those important risks in the same way we should be thinking about the consumer being equal. it's that elevated for him. >> listen to larry fink from last night's "mad money" speaking broadly about the economy. >> we see inflation will be fixed over time. we're seeing commodity prices crashing from -- >> nobody talks about that and the supply chain is better >> getting better right now. so, the federal reserve the tightening and that is going to -- the federal reserve's tool is to tighten and if you tighten, they limit demand is there a risk of a recession sure >> we're not in one yet. >> even if we are, it will be quite mild >> that's huge

>> that's somewhat optimistic. i'm picking that up as well to a certain extent from people who have broad visibility into a lot of businesses. i talked to one. let's call him an uber banker saying i see ooh slowdown but not a recession. the low-end to consumer is hurt. companies' ability to adjust quickly and cut operating expenses and signs of improvement already. companies are moving fast. >> we have to get rid of this narrative ha when an alphabet decides to slow hiring, that somehow that's bad i mean, that's pruprudent. companies are saying, listen, we read the papers, it can happen we're seeing a men from boys -- we shouldn't use that -- but catholic churches versus new corp new corp. when you think about it, a lot of their grades to of

plain vanilla still not doing well but the proprietary steel. you don't have a serious recession and have new corp. stock to up $6 >> the highlight of the morning as we started off here, the at&t numbers out, because it's also pressuring verizon and t-mobile. t-mobile shares, i think we can puts all three up or down, almost 5%. >> i still like t-mobile >> at&t has been down as much as over 10% in the session. again, this not on the subscriber metrics, which seem to be fairly strong from at&t, but the concern perhaps about delinquencies, strength of the consumer and/or the lack of the free cash flow generation at at&t it's bleeding over into the -- >> you notice oil is down again. >> horizon >> verizon is really breaking down here. i don't know if they have the horses to deliver the quarter. >> verizon

>> yeah. i don't know what do you think? >> i don't know. >> are you going to interview hans >> i haven't in quite some time. he finds other places. i'd love to have him back on the show always welcome >> eddie stankey played for the brooklyn dodgers, the braves, giants, st. louis cardinals, rs philadelphia, near me, it's eddie stankey you want to bet on here >> not john. >> amazing player. people forget. >> tesla shares are continuing to fall, down 26% for the year, but the market value of the company is once again above $800 billion. >> incredible. >> and coming off what you termed to be a very good quarter and a great conference call. >> i think sometimes when you listen to him, he has a command of what people want in -- think about it he understands what they want in europe, in china, he will not produce the hiccup until it's

absolutely perfect in the meantime, here 's jim farley committing to 600,000, working with a very good battery company. people just say -- they yawn at it because they have ice, internal combustion engines. people say as long as you have ice, we're staying away. that's a bleeding asset. people don't think that farley can make the transition from being -- and no one has correctly, but the one thing i would say, you can't -- they're sold through -- the ford product is very popular. >> yeah. mixed picture in broader markets right now, jim the s&p down a bit we came off the lows in the premarket as a result of the move by the -- >> fine, fine. >> the nasdaq building on what was some strength -- >> i think the nasdaq leadership and the bank leadership are both good i need to see a turnaround in

more than just the semis >> right >> i don't like the apple run because i just don't think that -- i do like -- obviously i mentioned i like the discounted cash flow model. but i think that alphabet is the key stock here >> key to this mark is alphabet? >> yes, because they have an advertising model that is second to none. people really understand their return on investment on a google ad is probably the highest of anything >> yes >> if they get -- so of course the senate is investigating them for that if that stock in the face of all these, be careful of the ad model companies does well and snap does not get crushed tonight, i think you'll see a return to the izing stocks that's what i want to watch. of course we're watching oil just roll over again seems to be repelled at the $100 level every time as if it's a castle and the moat is too

great. >> i want to come back to a name we used to mention with some frequency. thermal fisher first of all, when you talk about them, you have to put up the 10- or 20-year chart because of long-term value creation. >> up 6% >> i'm not seeing news. >> why it's up no, no danaher is leading this market >> okay. there's thermo fisher. >> on the coattails of danaher mark is doing an amazing job a lot of people feel this is the ge business going. >> there's danaher >> it took the g.e. business past health care and doing well. a lot of people felt they would get clobbered because of chinese weakness it did not happen and thermo fisher and danaher are life science companies that make the tools. a lot of people thought -- there

are a not a lot of biotech companies coming public and they need danaher's tools abbott, everyone has turned on >> positive perception of danaher's earnings is -- >> that is one oflargest visions of my trust. they seek no recognition >> never i don't even know how many there are. do you >> i don't know. to casper we've talked to. the first to come on and say listen, we'll be able to test and beat using the equipment of pcr machines on this one of the things i'm a little upset about senator warren's comments, but american business did more to stop this covid plague than any -- and it's

danaher, unfortunately whole logic going down of late, but pfizer how do you criticize pfizer here for what they did? >> i don't know. >> still hoping that the chinese -- >> i know you are. >> jim fiderling, the ceo of dow, on "mad" tonight, he is saying that china is letting up. but have you heard about the tanks and banks narrative? >> i haven't >> there are video about tanks being in front of banks and the government in places saying your checking account, yeswe're turn that into an investment account. do i have to go faster >> i'm wrapping you because i have to get to bob >> what is this? >> i can't get you to stop talking otherwise. bob, help me out here. look at that pink tie. beautiful. >> i'll sit and listen to you and jim all day long, guys futures went up when the ecb

rates, the dollar went up and 2350u churs went up but that's reversed since we opened energy and health care are weighing on the market, unitedhealth weighing it down. take a look at the growthier parts of the market holding up better we're getting a little renaissance in some of these growth stocks. semiconductors still up. consumer discretionary tech was up earlier on it's flatish now and it keeps getting clobbered picking on the growth sectors, look at the travel in the yikes category carnival closed at 11.0 9 and announced that $1 billion stock sale that's a significant dissolution. people wonder if this is a slowdown in the industry they're taking it hard in other parts of the business. probably pay off some debt in 2023, but it sends a signal for the big rally we had in the

travel stocks. the inflation worry has been replaced as the number-one issue by the demand question what side of the demand issue are you on here? horton came out yesterday and sold home building stocks, 30% down on the year but the man in charge, in june we began to see a moderation in housing demand as mortgage interest rates increased and substantially inflationary pressures remained elevated. he thinks this will persist for some time. d.r. horton down another 2% today but down 28% for the year. the market has already priced in a lot of this overall. what you see here, if you just take a look at where the markets are going here, we keep waiting for an earnings apocalypse that hasn't happened it's been a month, the market was freaked out about an imminent drop in earnings and it hasn't happened. so today this is what matters. q3, q4 we're still 10% growth today july 1st it was 11%. all right. it's down but not dramatically

they're not slashing the numbers. q4, still at 10% it was 10.6% on july 1st you get my point modest declines but no earnings apocalypse because the bulls are regaining control of the narrative, which is the fed is front end loading all the rate hikes. there will be rate cuts in 2023 and any recession might be mild. that's the new buzzword, a mild recession. larry fink mentioned that yesterday. as a result of growth stories, look how the growth sectors on the s&p have been reacting since we bottomed on july -- excuse me, on june 16th ark is having a mini renaissance. kacathie wood is killing it in e last month consumer discretionary, technology, communication services are killing it. these are all the growth sectors of the s&p 500 that have come roaring back at the same time, energy and health care is forget about it land so that's an issue i think, david, the key is the macro people still have very

skeptical about this no earnings apocalypse is story here bofa has been cynical, stocks cheaper but not cheap, not pricing in a recession, they should, and david, they have 3,600 on the s&p 500 for a year-end target, down 10%. they think earnings will be down 10% think earnings will be dow 10% in 2023. >> bob always does a great job of wrapping it up. >> it is interesting there's this camp which really does -- is disturbed by the term "mild." if it's mild, then those people who dumped on jay powell, they'll have to eat a lot of crow the audubon society will be upset about that we'll take a quick look how treasuries are faring this morning. the ecb raising rates. the yield, the ten-year, 2.993, and the two-year obviously well

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to minus six. >> four negative months in a row. the last time we did that was end of 2015, beginning of 2016 all the data has crumby this morning. leading economic indicators and philly fed, which was the lowest level in 26 months that's why interest rates are lower across the board david faber, back to you >> okay. thank you, rick santelli good thursday morning, everybody. welcome to another hour of "squawk on the street" i am david faber. that is sara eisen carl has the morning off and morgan is on maternal leave. we are up across the board. >> despite some of the negative data out there that rick just mentioned, we're 30 minutes into the trading session. here are three big movers. carnival getting crushed, announcing a $1 billion common

stock offering, saying it will use the proceeds for general corporate purposes the stock is down 12%. we've seen a nice rally in the last few weeks evaporating today. profits and revenue, as they sales rose faster than costs, i should say, the company also announcing a share repurchase program. s.a.p. sinking lower, trimming the profit outlook later today we have an exclusive interview with christian klein on "closing bell," david one of the biggest software makers with the ecb moving and there's questions whether europe is heading into a hard landing sooner because of the this energy crisis. we should turn to tesla. stock of the day moving higher

after topping q2 estimates weighs in on some of the issues. let's listen. >> i think inflation will decline toward the end of this year, we are certainly seeing prices of commodities trending l lower, you know, mainly economic prognostication sol short of there. >> joining us is jeffrey osborn. he has a hold rating on tesla. jeff, why is the stock up, is my first question, given the numbers were okay, and now the 2022 targets look harder to reach? >> thanks for having me on, sara they definitely bead the quarter that was nice to see a bit of a low quality into

beat i think the eps headline is why it's up today. we were looking for more and they were very bullish certainly a lot of q&a was on that, but ramping factories, as well as reaffirmation, is the rationale. >> i get why it's good for the bulls to hear that 50% growth. isn't china the key to the story and very unpredictable here with the covid lockdown >> absolutely. a couple keys to the story in our mind china is the big one, and you sat the big sequential decline from q1 to q2, but also they have two new factories ramping up, both in texas as well as in berlin which will really drive down costs, hopefully in the coming

years. >> you called it a low quality eps number i'm curious as to why. >> a couple reasons r&d was down the tax rate was much lower. then you also had the very bizarre move on bitcoin. so for that. it ended up coming in just over $is 00 million was really from just the change in mind. inch die mand is very strong, but quite frankly, you're going

to be waiting multiple quarters with the blazer coming out this week, very strong demand, ford, et cetera. certainly intensifying, and the secularship that's playing out our fear with tesla is they have raised prices so much and the the portfolio, the y and the 3 in particular, you are getting long in the tooth. unfortunately for next year, it all relies on the cybertruck, which is already several years late. >> on that price issue, the average selling prices were up nicely that has been helpful for companies in this inflationary environment, but elon on the call said the prices of the cars were getting into embarrassingly high levels and he would like to lower that do you take him at his word? >> look, a big piece of this strength, the quarter was from

higher prices, so there's a strong case to be made that q3 and q4 will also have strong pricing trends i think key for the margins to be maintained and to drive to the sweet spot of demand is a $45,000 price point, they needs to get this new battery right. the biggest cost is this battery that seems to be having some teething pain and growth is the challenge. we appreciate you being here thank you. we're keeping an eye on the airlines many are under significant pressure phil lebeau has more for you. >> a couple airlines report a profitable quarter for the first time without payroll support, record quarterly revenue you know what the investor says?

who cares. we're not crazy about the setup for the airlines, in part because they have brought down their capacity due to the issues they've had with cancellations and delays take a look at american's capacity much like its competitors, it brought down capacity in june, following the issues in memorial day. they also had some weather delays, but they were down 8.5%. the guidance for the third quarter is a reduction of 8% to 10% for the full year, all of this compared to 2019, down 7.5 to 9.5%. here is the ceo on the long trail ahead of them in terms of bringing back capacity. >> we have some time to work there through. look, we're coming back from a global pandemic. there's so much to do. i feel really confident about the steps we are making. i know we'll get back on track. >> reporter: here is the other issue, especially those with flights -- transatlantic flights. it's a mess in europe.

heath rho in particular is an absolute disaster. i'm told they have about 14,000 job openings there that's one factor behind the delays we talked to scott kirby, and he expressed the frustration they have, because they believe a lot of this is due to the airports in europe. >> we're cutting capacity for the balance of the year. we're essentially going to keep flying the same amount we are today, which is less than we intended to, but not grow the airline until we can see evidence the whole system can support it. >> taking a look at shares of united, american and delta keep in mind while they may have issues there are also some crew challenges that they're facing people who have been bumped from flights, because the crews are just not there the bottom line is it's going to make people think twice for the airlines they do not want to see that

business fall off. for now they still have enough of it going across the atlantic, but you have to wonder how many people see these lines and rethin their a plans we have the ceo of alaska airlines record q2 revenue. we'll talk to ben during "the exchange." >> thank you, phil lebeau. amazon is acquiring 1medical it's an $1 a share all-cash deal it's had a positive impact on the stock right around the $10 level prior to unveiling this significant preium to that stock price, sara. what is more interesting u. because obviously the size of it is not, the idea of another foray by amazon into the healthcare system and whether this time they will disrupt something. the quote from neil lindsey, the svp of what they call health

services, we think this is on the high list of experiences that need reinvention. we thought maybe with the insurers -- drug distributors, they bought pill pack, we haven't seen a lot of progress they're running the business, so there's questions on whether they're focused on primary care experience, and southeast there's the amazon effect with teladoc shares they do do digital service says, but it's concierge medicine. they pay a free for the year and then have free access to tests, doctors, that sort of thing, but to your point, they tried with whole foods, to, to disrupt the grocery business so always interesting to see the amazon ripple effect, and teladoc is offer the lows.

>> remember that joint venture between jpmorgan and warren buffett, called haven, and then unceremoniously disbanded. >> there was a try i think the premium is interesting on the deal, what, 80% premium for this kind of market bullish >> yeah. i mean, you do see it, particularly in the smaller deals when there's a strategic imperative from the buyer. don't notify much about the background at this point about a $3.9 billion deal. >> too small for you >> it is. >> peanuts. >> it is here's a look at our road map, including a first on cnbc interview with the philip morris international ceo, and maybe the crackdown with juul, which has nothing to do with cigarettes. the euro is all over the

place, gave up some gains. and we'll speak to union pacific on how they're obmsgating prices and core th e dow is down now 220.

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the european bank racing interest rates for the first time since 2011. steve liesman has more on this historic move. steve? >> yeah, good morning, david

european central bank surprising markets with a bigger than expected rate hike, taking a page from the fed price hike in june it hiked by 50 basis points while the market expected 25 ecb president christine lagarde says the first time in 11 years is part of a series of rate rises that should bring policy at least to a neutral assistants stance. >> further normalization of interest rates will be appropriate. the front loading of the exit from negative interest rates allows us to make a transition to a meeting-by-meeting approach to our interest rates decisions. our future policy rate path will continue to be data dependent, and will help us deliver on our 2% inflation target over the medium term. >> the ecb also announced the

transmission protection instrument which could use to lower interest or spreads between countries within the euro area. french, italian and greek government bonds trade above germany. italy, for example, 245 bon, wider than before the announce misdemeanor. as lagarde indicated, it could be more stringent than the market expect theed market has sold off with the europo probably on that sara >> the u.s. market does not like to see that euro weaken lately, because it's a stronger dollar and bigger headwind for earnings my question is, what happens to the commit here?

they're very vulnerable, i feel like she's even in a bigger pickle than fed chair powell. >> it's much worse over there. this whole ukraine impact, the impact of the war in ukraine makes it much more difficult for lagarde to negotiate this. plus she has the interest rate differentials that are real issues over there. for example, you have where the italian is trading above 350, 340, right in that zone, while germany is in the ones so that's a big issue. i wonder, sara, you would know better than i would, but rising interest rates is probably the least of europe's problems right now, and ultimately ecb may have to go much further, but a recession could solve the ecpb' problem, and it may be severe over there.

>> a harder landing. even though it helps with exports, it's not great with investment, not great overall. steve liesman, thank you. let's stay with the markets and bring in lisa shallot. now you have the second largest bank in the world surprising with more interest rate hikes. who does it all mean for nah markets? >> obviously tighter financial conditions, and higher costs to catch to ultimately lower demand i do think these are at consistent with the growing drumbeat of the recession, the coming narrative that some parts of the market have begun to price. i guess, from where we're sitting, a lot of the stocks in the s&p 500, however, have not fully priced that reality.

i think the recent bear market rally we have seen in our humble bon may be a bit premature, given how the outlook for growth continues to look pressured forward. >> so that's pretty bearish, you're not buying this rally we have seen lately there are people, lisa that say if inflation has really turned and there's plenty of evidence in the commodities market, then that does alleviate some of the pressure on the fed ultimately and they won't have to go as hard, and maybe we can prevent a hard landing that's the bull case >> it sounds like you're not buying it, though. >> i'm not saying there isn't still a probability that that scenario could play out. i think it's extraordinarily premature. if we do the arithmetic, if we have, you know, zero percent on headline cpi for the next eight

months, it stocked could be at 5% the reason that level is so critical is wages in the united states are currently growing at roughly 5% year over year. so even just to neutralize the headwinds of inflation to the average consumer is going to take, you know, a while, and i think this idea that just because inflation peaks, that we get a fed peak, or fed peak policy, i think is wishful thinking we're still a long way away between the level of inflation and the level of fed funds rates. >> so what are you telling your clients to do if you're not convinced that we've seen the bottom in stocks what type of sector exposure what should they be doing when we see really weeks like this one? >> so we're encouraging folks who have long capital gains,

take some profits, harvest with some losses that they may have endured this year, so a lot of tax loss harvesting here along soy, you know, offsetting gains, and really repositioning defensively for what we think could be another 5% to 10% to 15% drawdown before the end of the year as earnings estimates come down. proceeds from stocks, we are putting into investment-grade bonds, where we do think a good part of the rate path of the fed is priced. and where, you know, the risk is just more balanced than it is for stocks right now >> lisa shalett, thank you very much >> thank you as we head to break, watch dr horton, homebuilder stopping

revenue estimates. the company did have you the full-year guidance as well, something that investors have been expecting on the spike we have seen. we're continues to move soh,ut down about 250 on the dow.

the white house is saying president biden has tested positive for docovid-19 he's experiencing very mild system and has started taking if the treatment. >> the press secretary saying the president is fully vaccinated, he's been twice boosted. he's experiencing what they say are very mild symptoms the white house is also saying, consistent with cdc guidelines, he will isolate at the white house and continue to carry out all his duties fully during that time he's been in contact with the members of the white house staff by phone and will participate in

meetings via phone and zoom from the white house. he will be isolating, but he will be able to continue in his role he won't need to turn over any duties, it appears, to the vice president at this point. of course, this is a significant difference from the last time a president of the united states tested positive. we all remember donald trump testing positive for covid, and at that point having to go to walter reed medical facility now with these vaccines, the president of the united states, even at a relatively advanced age, can test positive for covid and able to telecommute. we'll moon tore this and see how it develops. of course, biden is up there in terms of his ages the statement from the white house is suggesting that biden will be able to continue with his duties, even at he isolates.

back over to you guys. >> sometimes you take it too early before you have any symptoms, can you get it again, because your body doesn't build up immunity, but i'm sure the president's doctors are well aware of that. make sure he got off the statens. >> but that's the key, right we have these tools now. we have the vaccine and the drugs. pa paxlovid is given to elderly people to keep them out of the hospital the rebound effect is real, only 20%, 30% of cases i know have had that. >> it's something to be aware of

as well. the ticker is the xlc, it's down more than 25% year to date you take communication and talk meta and alphabet, and lumping in is down sharply today after earnings, despite a beat on both of top and bottom line pre-cash flow is what free cash flow estimates were cut from the year to now $14 billion. people are taking longer to pay the bills, and the incentive set -- perhaps a high-class problem, because they were selling more phones.

>> that stock is down 9.5% as we head to break, i think it's the biggest moves. >> and it's impacting -- crude oil is down 11 day, down 8% since the start of the month, which is fueling hope that the worst of inflation is behind us, below $96 a barrel. we're back in two minutes. this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done. i'm okay.

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welcome back ahead of the break we heard the breaking news that president biden has tested positive for covid. here's what else is happening at this hour. the january 6th committee is scheduled to wrap up its whirlwind series of hearings for the summer tonight

during primetime, they will focus on how former president trump spent his time on january 6th, 2021. they say footage will prothat trump willfully refused to defend the capitol there's a meeting discuss whether monkeypox is to be declared a global emergency. experts elsewhere say the mild version of monkeypox in europe, north america and beyond makes an emergency declaration unnecessary, even if the virus cannot be stopped. 216 million people in the u.s. are under heat alerts today. across the northeast and new england, it will last the next five days, but expected to break on tuesday new york city may face the longest heat wave in a decade.

the last time the city saw seven straight days over 90 was 2013 probably a lot of penal are going into the office just for the air conditioning. >> i'm watching a video of dogs taking a bath. >> dog days. >> we all need water. russia resuming gas into europe brian sullivan is live from germany, with the latest brian? >> reporter: yeah, it feels like the capital of things, right you have the energy crisis, you have the ecb, which is head quartered about a block to my right here, so maybe this is the center of the economy. let's talk about what happened today. there is good news let's try to be optimistic it's a beautiful day here. last night we are standing on the edge of what some were calling the energy cliff, where that nord stream 1 pipeline

would be turned back on. if not, immediate gas rationing, and probably immediate talk of the recession. the tap was turned back on however, that level is only at 40% of its capacity. 40% of where we were about 12 days ago prior to when it was shut down completely here's the thing to remember that is not 40% natural gas covering germany's needs the nord stream 1, the biggest, but one of only three carries gas. the tore two are shut down and have been shut down for a while. one, because it comes through ukraine, and because russia has a dispute with poland. it is flowing again, but that flow rate is only 40%. the bottom line is this, guys -- this is not going to meet

germany's needs. in fact the biggest utility had to tap storage at a time when they're trying to build storage. the european commission said they may need to go to a gas rationing plan, voluntarily at first, with a proposal to make it mandatory if need be. 15% doesn't sound like a lot, but the collective europeanian is about the same as several states combined. can you imagine asking those six states to ration, david, 15% of their energy energy, as you know, is the economy in many ways europe's energy crisis, needless to say, a little less severe, but by far, far from being over. >> yeah. that does put it in perspective, the idea of those cuts being asked of places we live, brian

what is the expectation in terms of how people will take it over there, and about they're going to -- i guess they may not have much of a choice >> reporter: they don't have a choice even if they have a choice, i can't see them doing it, david we have talked to people about it the steel mill we were at yesterday about two hours north of here, they said, how is this going to work? is the government going to say you can stay open, you can't stay open. you can stay heave, but you have to noic off 15% of your business how does that work people in the street saying, how do you ration down energy in an economy of, what, 80 million people just an anecdote you guys were talking about air conditioning as you came into

break because of the u.s. heat wave air conditioning is far less used here, but i can assure you this week, air conditioning this week i'm not sure it was used at all. try to find a bag of ice my hotel room must be 85 degrees. i'm not complaining. everybody has it a lot worse, but you look at these things that are already starting to happen, that quality of life aspect, guys, gasoline, $7.50 a gallon look guard thinking there won't be a recession who am i to differ it just seems really difficult to not at least consider the possibility. >> well, the ecb has a survey out itself saying a 10% gas rationing shock would reduce gdp by 7%. they're just not putting that into the base case right now, even as you're reporting, though, it seems increasingly probable. >> reporter: yeah.

spain is -- this morning -- it's going to be every country for itself, guys that's a problem >> brian, always great to see you, always great reporting. brian sullivan in frankfurt. still to come, don't miss of ceo of philip morris international, talking about the latest earnings, and of course the crackdown on the juul cigarette. first, though, a check on the markets. sara has told you. wealth is breaking ground on your biggest project yet. worth is giving the people who build it a solid foundation. wealth is shutting down the office for mike's retirement party. worth is giving the employee who spent half his life with you, the party of a lifetime. ♪ ♪ wealth is watching your business grow. worth is watching your employees grow with it. ♪ ♪

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philip morris beat estimates and raised its its guidance, also citing strength in the smoke-free ico-system. it's always good to have you here

4.2% revenue growth. share gains in marlboro, give up a better sense what else? was there stronger pricing as well >> it was good pricing, more percent on the strong volume growth, very much the smoke-free products, but also helped by the good performance of a combustible. it's a pretty good quarter, especially if you take into considerations we're operating in extremely tough conditions, right? with inflation, the geopolitics, et cetera. so very pleased with the results of the quarter. >> you mentioned supply chain as well i know there was an impact there, obviously due in part to the war in ukraine where do things stand in terms of the costs that that is accruing to you? are things getting any better on the supply chain >> not really. you have, you know, the impact of energy prices going for the transportation you have energy prices, and some

input materials, so, i mean, with that inflation, i'm afraid it's going to stay robust for a while, you know, unless -- they will start under winding, but as long as we have some sort of ability and which direction that the situation evolves, we can start adjusting. we've had some productivity plans in place, which were activated last year, so somehow mitigating, not fully, but to some extent, the impact of inflation and pressure but obviously this year we had to revise the downward margin expansion. our focus is really on the growth, as long as we grow the smoke-free products and better deals with the acsession, more than 1.1 million users on a global basis, that's very important for us

extreme but, you know t. as a result of the inflation or pressure, and one of they believe they're going to fade out over a period of time. >> yeah, of course, everybody is struggling with how long that will be. we're looking at user growth you talk about a predominantly smoke-free business by 2025, so the numbers we're looking at, will that take you there in terms of meeting your goal >> despite the headwinds, we are making significant progress. we already operation with big markets in the global network of you're operations, significantly above 50% scumming from smoke free a year ago we had just ten t every quarter we are making prog progress

>> i know you're in europe, not exposed in the u.s., but i'm curious what you make of the recent fda rules they're tightening up on your sector, wanting companies to slash the level of nicotine to non-addictive or less addictive levels does it make the u.s. market less appealing i know you've been looking to do acquisitions particularly. >> no, the u.s. market is attractive to us, the reason behind our recently announced plans to establish a more significant presence we look at the u.s. market in terms of pmi, this is a very attractive market. the fda is the regulators. let me remind you our product is the only inhaleable product which passed a high bar of the fda authorization. so we a clarity in temples of

the product authorizations we hope to resume the distribution of the products in the first half -- and the u.s. is an opportunity. >> yeah, it was pulled over patent issues in november 2021 finally, this swedish match deal you need 0% of shareholders under swedish law, in order to close the deal elliott is in there. there may be enough resistance that you won't be able to do so. >> it's an attractive on which remind you, the price which was 106 swedish krona is about 50% over the price before we announced it

and i believe it will be closed by the end of the year, with the shareholders' acceptance, but we have recommendations, making progress with the regulators, and very good -- obvious ly s. e won't be strategy enabled for the pmi for the presence in the u.s. and some other international markets. i field confident we will successfully conclude the transaction. >> we appreciate it. thank you. >> thank you let's get off to dom chu >> for you look at what's happening, we drifting lower the energy sector is the worst performer, maybe no shot there, given the volatility weft seen s

that, games like valero, halliburton some of the biggest laggards those declines come as oil prices pull back with west texas intermediate slipping further from that $100 per barrel market also that higher than expected increase in u.s. gas line inventories earlier on this week for the supply side of things. we'll watch if that imbalance kind of playing out over the next few days ago well sara, i'll send things back over to you after the break, we're talk to the ceo of union pacific don't go anywhere.

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shares of union pacific, you see it there, down a bit, less than 1%. this despite what was an earnings beat, citing benefits and price hikes, despite, of course, those supply chain challenges, labor shortages, and inflation. joining us now for first on cnbc is union pacific ceo lance

fritz. i mentioned a number of the pressures, we talked to you about a lot of them. looked like a good quarter we get a nice macro view from you as well. let's start with inflation i'm just curious as to what you anticipated in terms of volumes, how it is impacted things that you're seeing on the network right now. >> yeah, david, first, thanks for hosting me this morning. in terms of inflation, coming into the quarter, certainly we did not see a continued spike like it did through the quarter. what the big readout number, cpi was something like 9% plus most recently and we're seeing that in the behavior of consumers,but we'r not yet seeing it in terms of the volumes that come to us. so consumers are telling us that they're concerned, they have anxiety, but their spending behavior, it is not yet showing through in the supply chain demand to us >> okay. and what are your expectations like, every ceo out there, and

everyone, we're trying to figure out what will slow, how much it will slow, what the consumer looks like, what is your take? >> i think, david, we're somewhat insulated from what the broader economy might do because of some macro impacts that we see. one is we have a robust business development engine bringing business on to the railroad, with customers like night swift, who onboarded their domestic intermodal product on the western half of the u.s. to us at the beginning of the year we're also seeing some of our markets like grain, grain products, or coal be impacted by larger kind of global issues in the case of grain, it is about the disruption from the ukraine conflict, and also strong crops in the united states, and in the case of coal, it is about very high natural gas prices. we're also seeing in some of our commodities, like industrial, chemicals, plastics, metals and

minerals strength because of facilities or business winds that we have been getting last year in the early part of this year and then you've got in the automotive sector, pent-up demand caused by supply chain disruption with semiconductors, so even as a recession hits, right now the oems are not producing enough to satisfy demand so maybe demand drops and matches oem production so we'll see right now, david, our best guess is second half is still a growth environment for the railroad, even as recession fears rise. >> do you see declines in the premium and bulk business segments, what is that what does that --what is comprised of the segments and what does it tell us about where things are >> yeah, in the bulk world, that's things like grain, grain products, ethanol fits in there, fertilizers, things like soda

ash, those are markets that remain strong. and into the second half of the year premium is automotive, automotive parts, domestic intermodal, international intermodal in the second quarter, automotive grew strong, 11%, both on parts and finished vehicles domestic intermodal grew, international intermodal did not, and that's really a clear indication of continued supply chain disruption in that particular supply chain. >> question for you, lance, on the union issue, that you have been dealing with for a few years, we got some news this week that president biden has to intervene before the deadline is appointing a special administrator to look at it. what are your expectations and what is the problem here why can't you and the unions come to an agreement, it is not just you, your competitors as well >> yeah, it is a great question.

so every five years or so we get into a national bargaining round, where the railroads collect under the -- what is called the mccc and the unions collect and then we negotiate. it tends to be a slow process. it is defined by railway labor act and unique to railroads and airlines and what's happening right now is about 2 1/2 years into this process, which has been slower than normal, we have had to get the president to put together a presidential emergency board and that's three arbitrators that will listen to both the unions and their case and the railroads and what we propose and then they will come up with what they think is a reasonable compromise and what they think is a deal structure that should work and then the unions and the railroads have an opportunity for 30 days to negotiate from that, and get a deal i think that will occur.

if we don't, at the end of the 30-day period, there could be lockouts or strikes, i don't think that occurs, because if that were threatened, congress can step in, and in essence impose the peb's recommendation. i think we're in the last couple of few months of the process and our employees deserve it, right? they have gone 2 1/2, nearly 3 years without a raise and it is time for us to get a deal. >> yeah. finally, lance, brief time we have left, just back to supply chain, you mentioned it, you talked about it a bit on the call, or it was discussed in terms of the focus on not just the world's ports, but inland terminals, including places like chicago. why is that important and are you -- are things moving okay, or do we need to be improved >> yeah, so, the whole supply chain that you are talking about starts at factories in asia, gets on a ship and container, hits the ports in long beach and l.a., and then it either gets out by truck or rail into an

inland port or an inland terminal for distribution. the problem in the chain right now is the inland distribution side, trucking and warehouses do not have the capacity to move the containers off our intermodal terminals fluidly so we're starting to stack containers for customers on our intermodal ramp. that's not good. and what we're doing is we're being very deliberate and careful not to overwhelm the inland terminal, because that's armageddon for the railroad. that ends up in a really bad place. that is meaning that there are some international boxes that are starting to accumulate at the ports, but until we get the fluidity on the inland ramps, from trucks and the cargo owners taking that product off the ramp, we're not just going to keep shoving it at those ramps because that ends up damaging everybody. >> got it. lance, always appreciate you taking time with us, thank you

>> thank you >> lance fritz, union pacific. sarah, we'll have to pay attention to the markets in the last hours of trading today. >> dollar just turned weaker and things are improving in the markets, they follow it. industrials are positive and so are materials and so is real estate off the lows and the nasdaq is positive. >> it is, as it has been in recent sessions as well. that will do it for us on "squawk on the street. "techcheck" starts now happy thursday welcome to "techcheck. today amazon buying into the doctor's visit amazon bidding $4 billion for one medical as it pushes further into healthcare. shares are on pace for the best month since the pandemic and later, we're talking tesla stocks up despite the declining margins as the company dumps most of its bitcoin holdings the ceo of binance, exclusive this hour coming up. we'll kick off today's feed with amazon's big bet on healthcare this morning. the company announcing plans to acquire one