>> you owe me a shirt. remember? i have problems? a year and a half ago you saw it in the gym. i still haven't gotten it. >> i will get you the shirt. we have to talk about this next time. i can't remember. i have some spanks. >> we are conveniently out of time. >> make sure to join us tomorrow. squawk on the street is coming up right now. good monday morning. welcome to squawk on the street. free market is green. what a week heading our way. a fed meeting, half of s&p market cap reporting, gdp, and a lot more. we begin with a downturn, at the white house downplaying

recession fears ahead of the key economic data this week. plus, earnings take center stage. nearly 1/3 of the s&p and 40% of the the dow center report. and as the chinese property market is about to go bust, goldman setting earnings. we will start with the market action. stock still on pace for the best month of the year, although everyone is talking about the fed event. >> i think it is the same thing that has been happening. until we know what, whatever it is, people get too nervous and there tends to be selling. i don't blame them. what do you buy on this? the amount of exposure the people have to the dollar. really very limited group of stocks you can buy without dollar risk. so you have that, the fed may be saying, you know what? we will do three quarters, and we don't know if we will wait until september. that would be devastating.

and then we have, what i recall, the fear. the companies i expect to meet let's say, met have. i fear a major earnings cut forecast. that means those situations, with the exception of micron, which is an outlier, the stocks go down. a lot of conventional wisdom. what i really want to say is, i went over the earnings last week, the market expression quarter to quarter is worth talking about. the consumer is spending so much more than they did three covid. it is tough to believe that the consumer can be part of this downgrade. >> you dedicate the chance to talk about the sephardic and although we also missed the chance to talk about snap. >> there were 13 downgrades on friday, another couple.

what is interesting about snap , i think there is a desire to conflate it with alphabet and meta. alphabet has allowed direct ads . snap, we have discovered, and the analysts didn't, i still think they are wrong, the audience is bad, and the our allies, return on investment, is horrible. that is what they keep missing. these analysts was not run a business. because of your ratty business, you would not place any ads with snap. >> morgan stanley today double downgrade. target of a. businesses less developed, more branded, and more experimental dependent than we previously thought. >> how did everybody not realize this? if they had any company and talked to advertisers, you would understand that the

advertisers really pull back. remember, i think the hidden decline is crypto ads. crypto is this disease with robin hood. remember, they got all this money, and then -- i think crypto is the achilles' heel of a lot of companies. not just the actual bitcoin, but the advertising dollars they had, and they used them badly. what we're going to find out is that the real stupid advertisers were on snap and ran out of money. >> disney, wells, the idea that ads are going into a recession. >> that was a reset piece. they did say that it has fallen off the stock a wagon. a very negative piece within the context of a buy.

i have been trying to figure out how much disney plus benefits from having r movies and whether that is just grasping for straws. >> like deadpool. >> maybe someone watches that 100 times. i continue to think that disney is an incredibly undervalued company, undervalued stock. there is this idea that they are out of snuff. i feel like i am an outlier. >> wells is pretty confident that espn+ eventually goes to fall all a card. >> i don't know. if you can take a bundle, it's great. there are a lot of, they are 55 million people who play fantas . you need espn+ to do that. it is impossible to do it without espn+. they should stop putting all

the stuff on twitter. he is one of the guys who you can't draft without him. they really understand, whoever -- i don't know who is really crushing it at espn, but i never put my lineup without espn. >> what i'm hearing overall, weather is ads or the fed, you don't have real urgency to buy this week. >> no. here is what i say, oil has come back down. i think you can buy those. there is healthcare that is working. healthcare that is domestic, without dollar exposure, i like that. otherwise, no urgency because when futures are up, come on.

they were down nicely in the early morning, i was kind of happy, then they were flat, and then they creeped out. that all these jokers come in. stuff keeps getting hit like nvidia. they don't report for a while, but is somehow linked with. people disregard this thing. it has a great industrial component. all people care about is that it has a crypto component. i think that is a major mistake of nvidia.

>> barclays today, the semi rally is a head fake, correction just beginning. with a large cut to earnings over the next 12 to 18 months. not just there, but memory numbers coming down 50. >> memory is very weak. they downgrade lam research. now, if you think the chips have passed, that is an annuity. you build a building, that doesn't cost much. then you start it with lam research machines. you can't make g ram without it. if you know the chip act will fail. >> you think it will fail? >> i think it is a major mistake. i don't know how close president biden is really following it. >> i saw this quote from todd young, a senator, say that we are awfully close to landing the plan. we might get passage tomorrow. >> they have to phone the

runway. the problem is republicans hate to give the democrats a win . it is bipartisan. if this fails, it would be a major blow for biden. >> the secretary making the rounds. >> she is on tv constantly. i think that is good. they are saying, if you want us to spend, the government has to spend. the others are just vocal about that, but they agree. the governor of ohio is not pushing it enough. it has got to pass, or else this gentleman from barclays

will be very right. >> we are talking about espn+. breaking news from the nfl this morning. they are launching their own streaming service today. nfl plus allows fans to watch live in local primetime games on mobile tablet devices beginning at $4.99 a month. first game available will be the hall of fame game, trying to get fans to subscribe with all the features built around. >> there are a lot of themes. it is not the holy grail. there are a lot of games that are missing. it will not help you with fantasy. remember, fantasy is the driver. disney knows that. it is very limited in scope. i not go crazy about it. >> the time says that apple is being considered a final contender for sunday ticket. >> go crazy for that. that would be amazing. of course, i am like, please get it, because this would be fabulous. apple baseball, but you get this thing, it is very big. that is the only way to watch

the fourth quarter. the fourth quarter is the answer to fantasy. we do fantasy for mad money where the winner has to, you know, winner take all. we are not unusual in how they have office pool fantasy. you need to take this apple. millions and millions of people. i want apple to break out with lifetime value. i intend to push hard this week. tim cook is probably really sick of me pushing hard. >> the time says he has made it a priority. yes! they know how important this is. bob did the nfl deal. he did the sunday night deal with comcast. >> that of going back a ways. >> that was bob kraft . he is

integral. this is really vital. >> after the app itself, roger goodell, made broader comments about how the league is trying to grow. >> i clearly believe we will be moving to a streaming service. i think that is best for the consumers at this stage. we have so much interest right now. so much innovation around that and how we can change the way people watch football. we will probably have some decision by the fall. >> so $40 a year, you would not subscribe? >> i don't know if i need that. if i get the app, if apple is all in, i am fine. >> really? some of the library programs? >> the directtv app, if that is the case, i don't need anything at all. that is the holy grail. >> that says a lot given the ways in which they are trying to expand. >> apple has got to do it.

i am on the phone begging apple. it has to happen. >> other news on apple. some discussion of maybe a for the discount on some china products. >> did you see that? how about the iphone maker story? 25% of china is still locked down, and here you have government asking the 100 biggest companies like foxconn and apple -- and apple fitness. a new collection to improve your rolling speed. not what i am looking for. that is a niche business.

i don't like that. >> it is one of the big names is me. amazon, microsoft, google, meta, gm and ford. >> i continue to believe that they can get the warranties down for ford, they will talk about how they are battery has a longer life than gm. there were good videos this weekend about that. jim farley is coming in hot. he really wants to be able to say commodities are down, stick with the 600,000 ev for next year, that is the run rate at the end of the year. really make the case the warranties might not be as horrible. travel trust owns it. i am betting on farley. and i am putting money on apple. >> we would get to that, along with some of the other news with elon musk over the weekend. futures continue to look pretty good. more squawk on the street in a minute. your a system? so you tap ibm to un-silo your data. and start crunching a year's worth of transactions against thousands of compliance controls with the help of ai.

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this is not an economy in recession, but we are in a period of transition in which growth is slowing. that is necessary and appropriate. we need to be growing at a steady and sustainable pace. there is a slowdown, and businesses can see that, and that is appropriate given that people now have jobs, and we

have a strong labor market. but you don't see any of the signs now. a recession is a broad-based contraction that affects many sectors of the economy. we just don't have that. >> that is the treasury secretary on meet the press over the weekend talking about the possibility of recession. others would say jobless claims at an eight month high and argue otherwise. >> i think this will be an inventory glut recession. a lot of companies double orders. just way too much inventory throughout the system. numbers will be cut. consumers will benefit. i always wish that these people, it is pointed out there's more money for the consumers than ever. jobless claims are up, but they may be more regional than we think. i think many parts of the country are still very strong. not this part, real estate is

falling over. >> this reminds me of weber grill this morning coming will open down almost 90%. the ceo is out. the makeup of workforce. suspending the dividend. this is a kinchen sphincter. >> i interviewed them when i became public.. they can to the ceo. a fantastic ceo. but the grow business is in permanent decline. you can put together a basket of them, meanwhile, good luck. meanwhile, clorox is doing good. i just cannot believe how this business fell apart with a summer i thought was going to be a gross summer. but that turned out to be something you did during covid. >> although, you look at some

of the names, consumer names, the got defendant midday, boston beer, bed, bath. >> boston beer was horrendous. they're talking about sparkling water and alcohol business is bad. it is great! molson beer had a fantastic quarter. by the way, of the jack and coke remains my favorite. quincy has cool factor. he has cool factor. he may be one of the few ceos you want to knock back a couple with. >> we will countdown to the opening bell on this monday. as reset, a very busy five

sessions this week. the final trading week of ju. ly we will be back in a moment. >>

time countdown to the opening bell. you are watching some airlines today. >> ryan air is very interesting. this is really important. italy, austria, poland, portugal, and ireland all huge in terms of traffic. but several times they said they need boeing planes. they kind of hinted that boeing better be ready to give them to

them or else. i don't know what or else is because airbus is sold through. but they were not as complementary about billing as you would like to hear. >> there may be a strike this week. >> i do not like the comments. they said we love boeing, but the better given to us. one of the things that o'leary said, it would be inexplicable if boeing didn't deliver the plains. inexplicable. so for instance, the snap quarter. inexplicable. my new word for the week. inexplicable. >> american cutting flights as well for a buffer. we will talk more about the summer operational challenges in the airline business. we will get the opening bell in just over five minutes. don't go anywhere.>>

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goldman sachs slashing its earnings outlook for the china stock index to zero growth for the year, citing a worsening slump in the chinese property market. we have been paying closer attention to the property bust over there. >> what happens if i have a $44 billion fund to bailout the investors? that call will be wrong, i think, if china starts the $44 billion fund and ejects the stimulus. they don't need that right now. trying to is too weak to let this happen. i think they will do something bold. >> meantime, morgan stanley names jd a catalyst idea. revenue growth guidance could be the next shareprice catalyst. they see it accelerating from june. we will see. >> my problem with that is,

every time they draw in, someone realizes, wait a second, they are way too exposed. they will call it a ceo. i don't think that is a great thing, to get that call. but the fight the knock on the door. i don't know. you can do jd, but you have to sell it. that is all trading. every call in china has to be a trade. we don't know what will happen with that machine. as long as they continue to try to fight a version of covid that still spread like wildfire, i think it is a mistake. it just takes one person to take down a major factory. >> some say that going over the nike filings, inventory in china has come in, about 16%. north america a little bit less. >> then i worry about the apple discount. i was with a major apparel company. those numbers a pretty good. i don't know how that is

possible, but it is true. >> let's get to the opening bell . [ cheering and applause >> betting on a china economic rebound. i don't want to go against the government here. i don't want to go against the chinese government in terms of what they can do with developers . it is too easy for them to write a check. they could put this problem behind the. a lot of people consider it the biggest black hole in the investing your diverse, but their confusing democracy with the chinese government. they can print what they have to print and do what they have to do. the more you fret over actual

defaults as opposed to buying stocks, the more you are going to be on the wrong side of the trade. >> interesting. speaking of some of these calls, one thing being written about today is the split between, say morgan stanley, who says don't expect a dovish turned, whereas j.p. morgan argues that the market will get in front of that. >> i come back and just say, this is a unique opportunity for the fed. there is no -- they have the ability to say wait. i actually talk to jay. my wife says, i talked to this guy, stop it. immediately i talked to a ceo about the idea that you know, we do our work. how is it going? you do your job. my job says that he will do

what is good for the stock market. as opposed to joe biden, who sets out to say he is good for the stock market. that is inconceivable. how is he good? >> when you say jerome powell will be market friendly, are you arguing he will not wait until inflation is dead and buried? >> i think it will stay the course, but he will say, we see some signs of markets peeking. it is hard to imagine not. the housing market seems to be peaking. a big lead in retail. there is no doubt. when i look at what is going on internationally, if you have a business that does a lot of business in europe, your business is down, you're not hiring. >> your bill mcdermott interview.

>> yeah, i don't know if you will walk it back. there are jobs wanted in the service industry, particularly the restaurant industry, but for the most part, i think he is winning. does he want to make it so the consumer doesn't travel? make it so rates are so high that you're worried about your credit card? the next thing to fall, a piece today says, financing for cars will be too expensive. and that is a. housing, cars, it is going his way. we don't have food down you. the more ask about food, the more i sense there is a little too much coziness among companies that produce food. the companies that consume food are not able to get any price breaks whatsoever. i think he has a unique chassis it, we're going three quarters, and then we're going to win. >> when you see the 10 year.

>> he can dump bond and make the tenure go whatever way. i don't think there is a reason for him to say, you know what? we're going to do -- this is what scares people, were going to do three quarters, and what if we have to have an emergency meeting, we will. if he says that, the market goes down big. >> kind of like when your teacher says, i am going to step out into the hall, but i could come back at any moment. >> that is bad. that eliminates spitballs . it is terrible. it eliminates lamb books. that probably dates me from the days of shirley temple movies. it is in his hands to be able to say, we are vigilant, and we're going to stay vigilant, which i like. stay vigilant three quarters, come back in september, and that it is off to the races, provided we don't have earnings disappoints is. that is why i like alphabet.

capable hands. she can say, the kind of advertising that there is weakness, that is not our kind of advertising. were not trapped by apple . it is first party versus third party. snap is not a great company. there were people, by the way, in my twitter , they were saying i loved snap because they found a tape 17 years ago before it was public. my wife demanded i stay away from twitter. she said, if you're going to get hit for what you did with snap, you hated snap. >> i remember that. >> they were mad at me. they said it was personal. i said it was business. >> dear broader., do you think this quarter, is the

microsized and google guidance and meta guidance going to reflect some of the hunkering down memos we got about freezing hiring ? >> i have spoken everyone about freezing hiring. here's what they say, should we be aggressive? going into a recession, what you would say is, what a bunch of idiots. what you should be saying is, be judicious. obviously, people have been saying that the media is making it sound like we are stooges. all we are doing is saying, you know what? we can't hire into a recession. wait and see. summer saying the slowdown in hiring is coming from the engineer class. i just think we have to take that seriously. there is a glut of people who decide that they are going to get a job at google. there are people at meta ,

people are going, job hopping, and they are not being placed at all. that is because they are not needed. these guys recognize there is an advertising downturn. the slowdown is real. if you're in the advertising portion, why should they be hiring? mark zuckerberg is being asked to hire into a market where, if he weighs three more months, he can get more competent people. i think that is smart. >> acted responsibly. does that extend to capex? i noticed that tesla is upping their capex view . >> they are smart. they know they still don't have to advertise.

for doesn't have to advertise for ev vehicles. i don't know why they advertise for anything. jim farley has to state that. he has to come out and stay, we need to produce a lot more cars because we have that much demand. he needs to say it, he is a competitive racer, if he mentions the word tesla, not in a salacious way, because that isn't his style, that moves forward . he is got to do it. >> invoke the tesla name. >> that and flatbed ford with gm stopping to take a look at him. >> meeting, we are coming for you, elon musk. elon musk, or at least the journal made some news over the wicked, regarding what the journal says, people are familiar with an affair. >> i have something to say about that . it is called, no comment. >> musca did respond with his own denial.

we were friends and were at a party together. nothing romantic. it is a host of distractions. nvidia is down. >> i am more focused on nvidia. >> very good. wwe, vince mcmahon, exiting, retiring. >> they have subscription businesses. the numbers are amazing. i think that will have a buyer. ufc, whenever you try to get information, you do get a sense that anything fighting will

win. people want to watch people beat the heck out of each other. >> that is nothing new. >> that is bread and circus. i should do that. i should write that down. bread and circus. >> speaking of getting salt, moffat outperforming. they say the 20% discount makes no sense if this goes through. >> to they have a direct line to the justice department antitrust division? i don't think they do. but i do think something can be worked out. >> we will talk to michael nathanson later today. microsoft will report. >> microsoft announced that dollars stuff. i wish everybody had done that. you can't do it today.

right now, i think people will wait. the dollar weakness, which is well telegraphed, the dollar is costing companies. this research is really great. a company that has a lot of exposure, otis, to the point where i think that is an up-and- down business. to what do you mean? >> up and down. there aren't a lot of companies on the list with big exposure. otis is trying to. i do think your, if you have europe, that is what phil mcdermott was speaking about with service now.

that is why i mentioned ryan air. obviously, the consumer is not shut down. phillips had a week number. >> a nine year low. >> that didn't bode well for ge. ge has got wind and healthcare and mri and backorders. a lot of these come back to boeing. >> it is leading the the dow lower today. i don't know if you think it is about the machinists in st. louis. >> that and ryanair saying it would be inexplicable. that means they won't deliver the plains. o'leary plays hardball. he is also incredibly funny. i wish he would come in.

we have to get him on with the eight second delay. >> interesting guy. part of the ledger diaspora. reinvented the way in which a ceo is allowed to behave. john ledger is ms. he was not lawyer that. i asked him how he could speak so freely. and he said, how can all the other guys lying? good answer. >> amazon down to 160. >> why? >> on the notion that consumer spending slows. >> we have already said over and over again the retail part of the business is not strong. nobody talks about how amazon

services is accelerated. i have never felt more confident about web services. i am betting people understand that retail is weaker. they did over hire and made a major mistake, but i think they owned up to it. >> obviously, one medical, healthcare. >> that seems interesting. they have been doing stuff locally. they put their warehouses were nobody lives. one of the standout companies. >> shop if i, piper today, investments likely to get share gains. >> that would be interesting.

i think it is in a unique position. i think small and medium-size businesses are still doing very well. the shop small american express initiative is still paying dividends. i think shopify has a chance to say positive things in a negative environment. >> not a great day for some of the software names, relatively speaking. we got strength and energy this morning. but the the dow is back in the green. >> a flat opening. oil up, dollar down a little bit. take a look at the sectors. they are going for commodities again. this may have to do with the china news. metals and mining are leading the s&p. energy up with oil up as well. consumer staples last. tech is on the flat side. you see the names. these are the leaders of the s&p. all materials. all up about 2%. if you're trying to figure out

what the consumer is doing by looking at travel stocks, forget about it. it is head spinning. these stocks were down two weeks ago, they went way up, and now they are back down again. a complete round-trip on all these names. the airlines as well as the cruise lines. as for the earnings season, where 20% of the way through. i think it is fair, not great. not as many companies are beating and not beating by as much as they used to. remember last year, we were beating by 10 percentage points. we are not doing that anymore. this is three or four percentage points. this is closer to the historic from 10 years ago. we're okay, but not amazing. in terms of what is happening this week, we all know will be about microsoft and apple earnings. i get different opinions

depending on who i call, which version of james powell will show up. the firebreathing inflation slayer, or someone who will talk softer. we don't know. here is the conundrum for the bulls. they desperately need him to undercut the case for a major recession. but he can't do that. he doesn't have the data. we don't know the size of the slowdown. all they can hope for is that it will be a minor recession. but we don't really know. now they are saying, okay, maybe we will know by august 25, jackson hole. maybe we will have better data by that. now they're hanging their hat on jackson hole. a lot of hoping. that is the problem with buying these growth stocks prematurely. the one we had the last two weeks kind of fell down on friday with the tech stocks. apple and microsoft will be the key. a lot of people are trying to say, we know things will be slow, things will be problematic with china.

the street is well aware of weakness this quarter. there it is. that old game. book over here. don't look at what is in front of us, look for the shining future in the third and fourth quarters. we will see. jim brought up a good point about philips. not the same as apple, but somewhat similar global distribution. they did not have a good number. they lowered their full-year guidance, even though they insisted that they have good demand for products. this is healthcare and lighting. but they were very dramatically impacted by the covid lockdown. and of course, the issues with the supply chain disruptions. immediately, the bears were messaging, this is part of the problem. this is what will happen with a lot of companies. and may happen with apple as well.

it is a tough call right now on what will happen with apple. >> a quick reminder, you can always get in on the cnbc investing club with jim. you can always use the qr code on your screen. take a look at bonds as we go to break. a huge week with gdp on thursday. we get durables at some point, claims, incoming spending. maybe in 18.inversion. we will be right back. lily! welcome to our third bark-ery. oh, i can tell business is going through the “woof”.

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let's get to jim and stock trading. >> when i say i like healthcare as one of the companies, i have to come up with the stock name. this is the one to buy. he is talking about nca. they seem to be out of the woods from covid and they have a lot of room to run. i was a fan and in the territory it was hard to figure out what happened. they are out of the woods and we think they are hot. >> how about tonight? >> i have pro lodges. i have the president of the new york stock exchange. and, i have maybe the most outspoken ceo, now that john leger has retired.

basically, he was getting the business. the guy is one of those guys --his company sells at two times earnings. obviously, people feel that maybe, the earnings will be there next year. now, i just said that. >> that sounds like a spicy one. mad money at 6:00 p.m. eastern time. now, we are waiting for the announcement on wednesday. don't go anywhere. to adapt in the changing world, you could hire a professor of theoretical mathematics. we all know this equation, right? he'd crunched numbers day and night. that's it. to maximize profitability. morning. i have quarterly numbers that are beautiful.

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good monday morning and welcome to another hour. we are live on the new york stock exchange.

we are bracing for the next few days, in which we will get a fed meeting and 170 5s and p companies are reporting. the market is holding in there and the dow is up 111. >> we are watching newmont mining, lower this morning after profit fell 41% year over year due to a drop in gold prices. there were also higher expenses during the quarter and newmont traded lower on that. lam research down about 2.3% after barclays downgraded it. we are not buyers of the recent down and they think they are in for a substantial reset. this is around the stock currently trades at 4.53. snap fell on friday after 13 firms downgraded last week. two more to follow, today, including morgan stanley with

an eight dollar price target shares currently around $10 per share. down about 80% this year. >> meantime, we will start what is going to be a massive week for earnings, data and the fed. we have more on the data and this recession debate in the outlook for the fed. hi steve. >> good morning, carl. it is a big week on recession watch and that is about everyone, now. data that could give us an idea as if we are in a recession or if we are going to get pushed into one. new home sales are expected to show a decline tomorrow. wednesday, durable goods are expected to decline. and, you have the fed meeting on thursday and the all- important gdp report and wondering if it could be negative. the consensus is a small positive right now. income spending and the employment cost index are all coming on friday. it all comes with the white

house in a paper arguing that we are not in recession. john took to the airwaves yesterday on meat press. >> this is not an economy that is in recession. we are in a period of transition where growth is slowing. a recession is a broad based contraction that affects many sectors of the economy. we just don't have that. >> the white house's council for economic advisers said, key factors used to determine whether we are in a recession, and they know they continue to grow even when adjusted for. if it is a recession now or soon, fed policy could potentially change. the expected 75 point basis point could be the last big one in the fed could go back to 25's

or 50s. the question is whether, and how much they rely on economic contraction to bring inflation out of the economy, or if he feels he needs to continue to plow ahead. carl? >> steve, i have a first question first. leslie here. the fed has this dual mandate and the recession isn't part of it, although it is the second derivative. therefore, isn't it expected given the mandate they would focus more on inflation, regardless of whether or not we are currently in a recession, or what it means for that? >> it becomes a matter of whether or not paul begins to rely upon an actual retraction of the economy to do some of the work for him. if the economy is going to continue to grow, it could mean the fed has to do a bit more here. if the economy is going to contract, that could help bring some of the excesses out of the economy.

cars and housing could go down more. the question is, what is the forecast of the fed? we know they think it is a possibility to have a recession. and, if we are in a recession, how much does the fed rely on it? i think with the fed won't do is begin to cut. not until inflation is clearly out of the system. leslie, i can tell you we have our fed survey tomorrow and one of the participants wrote in saying, they are concerned about a 1970s reboot where the feds raised rates and had good inflation numbers and came back and then, we had a resurgent inflation problem. there is a concern about a double-barreled inflation shot here. >> that is why we are going to watch your questioning in the press conference closely this week, steve. see you later. let's bring in stephen whiting and jimmy chang. it is great to see you both.

stephen, i am curious whether or not you think this debate about whether a double or hawkish pivot this week in tone is material. do you think it will be that conclusive? >> i don't think the federal reserve is ready yet, at this point to put it scarred down at all, about inflation. it is unfortunate what i think you just heard from steve. the economy has already reached a fairly close to stall speed. it is carrying a heavy burden of inflation that has slowed the economy down. and, the feds tightening is actually going to impact the economy most. this is what happens after you have had a federal reserve that eased during a boom year in 2021 and is in part delivering inflation this year. it really comes down to any change in view from the fed that they are going to look

forward and they will see the underpinnings of inflation come down some. that would eventually allow them, i think a slightly more protective stance on the economy. i don't think they are ready for that just yet. >> that is interesting. jimmy, i wonder from your standpoint if you think the market tries to get way ahead of what eventually will come. they say we have reached a point where we think we can relax for a bit and see what the data brings us. if that is true, how do you think stocks can perform in the back half of the year? >> i still think that pivot point probably won't come for another couple meetings. keep in mind inflation has been accelerating month to month over the last two months. so, given that backdrop there is no way the fed can back down right now. we need to see more deceleration for the feds to start to pivot. i do think that will be received well, initially.

by that time, again we are probably well into the middle of the recession. so, we do need to pivot first and that doesn't mean the market bottom in the markets. >> stephen, how much weight should we place on the fact that gas prices have come down so significantly without any evidence inflation has peaked. and you recently reduced your overweight end commodities. >> it is certainly going to be helpful at the margin for consumers who have just lost a great deal of income support. we have had consumers across the economy this year face this inflation without the income subsidy they had during the boom year just past. so, now that they have suffered through that and are getting past that, it is going to help a little bit. there can be some broadening in inflation. it is unfortunate that the federal reserve is looking at,

most importantly services inflation that hasn't had a chance to fully rise. it is an official member of the index of lighting economic indicators. if you look at services inflation or services, this is the sort of thing where it is a lagging indicator and will continue to rise in the federal reserve is driving forward looking policy, focusing to a good extent on those lagging indicators. so, that is the reason, as you just heard for the federal reserve to take a little bit longer and wait for conditions to change. unfortunately, again the weight of tighter policy is accumulative. it will include quantitative tightening, perhaps into the coming year and that will mean a weaker economy. we do think, again the good news out of that will be lower inflation in the year to come. but, it will take time. >> jimmy, i wonder how you are

processing the mixed clues we are getting from the macro and from corporate's. on the one hand, you have the bmi stephen mentioned last week, pretty week. at&t are talking about bills that are overdue. on the other hand, the likes of axp, travel and banks continue to talk about consumer strength at the household level. >> there is a clear bifurcation between high income consumers and the low income consumers. you may look at the news from amex versus at&t and bill collection issues. that is showing up. i do think as the trend continues to slow down, corporations and small businesses will become more active in their hiring and spending plans. a recession is more likely than not unavoidable, at this point. >> that is the kind of collar we are going to be listening for, especially from some of the leader names that will report this week. stephen and jimmy, thanks. we will talk soon. i appreciate it.

as we head to a quick break, here is a look at the road map for the last hour. we will look at gaming stocks. there is more pain ahead for the digital ad space. we will discuss those calls. what is ahead for gas prices? the sunoco chairman is with us this hour. swap on the street is just getting started. nt match instany delivers quality candidates matching your job description. visit indeed.com/hire

welcome back.

macau casinos have reopened but nobody is throwing a party to celebrate. a party would be tough to pull off, given the strict covid protocols still in place. social distancing, masks, staff capped at 50% at giving given time. the casinos probably don't even need that many workers because travel restrictions and quarantines are still in place. local residents are facing mandatory daily testing. given all of this, you might not be surprised that july gaming growth in july is expected to be 1% of those in july 2019, before the pandemic. that is according to a note published by gaming analysts. macau was the biggest gambling destination in the world, six to seven times bigger than las vegas.

now, las vegas is the powerhouse, at least in terms of gaming revenue, setting record after record in the pandemic rebound. they are floating loans to the chinese subsidiaries to keep operations up and running. the ceos of those companies told me that keeping all of the staff employed, in spite of the cost is important. in macau, it is the price of doing business. there concessions are the licenses that permit them to operate and they have been extended two years and. they are all in renewal processes. they are optimistic the destination will rebound, but it is a question of when. these casinos are relying right now on other properties in the u.s. for mgm and when. >> yes, a rebound from previous levels. to have a long way to go.

joe, contested brought up this important question, which is when will this rebound take place, considering their are still covid restrictions in place. there is nothing from stopping macau from shutting down again. >> you are right. it has been another disaster in macau in terms of the gaming revenue performance. travel ability and mobility has been weak since the start of the year. the forecast revenue is difficult right now because they are close to zero right now. where investors heads are with respect to macau is that this year is a wash and next year, as covid cases improve, that should open up some travel restrictions into travel enhancing policy. that will allow a lot more

people to travel. it is not just a revenue problem right now, but an expense problem because you are basically forced to pay these employees. in the meantime, they are suffering significant loss. in the case of las vegas sands and most of the macau operators based in the u.s., they have liquidity positions where they can extend life lines, so to speak to get to the other side. in terms of the timing of it, it is hard. our best guess is that sometime by the middle of next year's we will get back to half of the revenue. >> yes, those lifelines are important. the question is, how long will they last? what is the indication that even next year, things will get better? no one has said the policy will change after three years of a pandemic. there is nothing that is changing with the variants, that we won't continue to see outbreaks. >> there is no guarantee. the only thing that one can do right now is to look at the

profiles, both macau and their parent. how long do they have if we are in a zero revenue environment? right now, that liquidity profile shows a year and a half of getting through a zero revenue environment. there are no guarantees that macau will recover in a certain time frame or to a certain revenue threshold. the cause of those reasons, we have not been recommending macau equities, with the exception of las vegas sands where that is more of that singapore operating momentum, which is only four months into an open towards the market for internationally sourced operations. we are single about singapore. are we excited about macau right now, no. it is impossible. >> although, given that, joe what is the mind-set among the operators with regard to cap ex

and any kind of gross investment down the road? is it a huge opportunity for when things reopen, whenever that is? or, are they not going to touch a hot stone twice? >> carl, there are a couple of things. the message coming from the company's as they are going through this process is that longer-term, they want to invest more. they have generated extremely attractive returns on business capital in the past. i think that is giving them the framework that it is still a relatively underpenetrated market. longer-term, i think they are excited about it. in the near term, they are concerned. i think they're trying to be optimistic to their employees and constituents. the near term is tough. but, macau longer-term has a large want to move people. if

you look at every game in the market coming out of the pandemic is that visitation has rebounded when people can travel and access certain gaming market from another geography, whether it is by air or car or some other transportation. >> joe, i want to ask you about though spending habits. you have analyzed credit card data in u.s. markets, what is your take about discretionary spending in light of inflation? has it had a demonstrable effect on spending behavior in the casinos? >> that is a great question and one we get multiple times a day from our investor clients. historically, there has not been a huge correlation between u.s. gaming spend in relation to higher gas prices. the correlation has been very low. of course, every cycle is different. what we are seeing a little bit in the credit card data in june

and what we are hearing anecdotally is that the month of june and a lot of regional drive to gaming market saw a little bit of incremental softening. virtually, at the lower end. i think what we get confirmation of that as we head into earnings seasons tomorrow night. i think we will hear that from others. right now, and i think contested mentioned it earlier, the convention business looks bright. that is something that is in the process of coming back. the issue is, airfares are very expensive. corporate travel right now, doesn't seem to be taking a downturn. but, that is something to pay attention to for next year. i do think between credit card data, our channel checks and

the data we have seen so far in june, you are seeing a little bit of softening at the lower end. why is that? it is inflation, it is gas prices, and consumer spend is weakening. that does have an influence in how some of these gamers spend. aiming right now in the u.s. is more sure than it has ever been. they all have consumer gaming within a two and half hour drive. >> yes, clearly las vegas is a distinction relative to those market in the current environment. thank you very much, jo. >> have a good day. looking for some other opportunities in china, morgan stanley names j.d.com catalyst i.d.. head to cnbc.com/pro for more information. the dow is chopping up and down. we are back in a moment.

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the problem in the chain right now is that the inland distribution side, trucking and warehouses do not have the capacity to move the containers off our intermodal terminal fluidly. we are being fairly deliberate

and careful not to overwhelm the inland terminal because that is armageddon for the railroad. that inns up in a really bad place. that is meaning 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 and are taking that product off the ramp, we are not going to keep shoving it at the ramps because that inns up damaging everybody. >> that was ceo lance on air last week talking about ongoing challenges in the supply-chain. the stock is faring just better than the s&p to start the year. unc is the second largest holding. the sector lowered by nearly 20% this year. some analysts believe for the slowdown could be coming as consumers will back on spending and shipping demand slows over fears of a recession. a drop off in freight rates may be a good sign but inflation could have a big impact on the

bottom line for shippers and truckers. isn't it remarkable how much we have learned about supply chains in the last two years? >> it really is. and how quickly things can normalize and the impacts on the various parts of the supply- chain. and how that trickles down to consumers and how much you pay for your packages to be delivered. after the break, down crates for snap and much more about at an ad slowdown means for both social stock and streaming. we are back in two. this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done.

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cruz, the man convicted of killing 17 people and injuring 17 others at the school in parkland, florida enters its second day, today. he has pleaded guilty to his crimes. forgotten codefendant of the central park five who was charged with of a jogger in new york city is expected to have a conviction overturned. manhattan district attorney will move to vacate lopez's guilty plea and dismissed his indictment on robbery. lopez was arrested when he was 15. he struck a deal with prosecutors before his trial in order to avoid a more serious rate charge. instead, pleading guilty to robbery of a male jogger. the alleged assassin depends former prime minister, abe will be determined later as they evaluate his mental condition.

they will determine whether to formally pressed charges and sent him to trial for murder. he was arrested in ely after he shot abe from behind the former leader was making a campaign speech. back to you, leslie and paul. >> there is an increasing slowdown across platforms for advertising. u.s. advertising could decline by 20% in 22 if the economy enters a recession. joining us is michael. great to have you back. it is hard. we are getting readouts from the likes of snap and some of the ad firms themselves that haven't been nearly as dire with their warnings. what do you think the truth is? >> hello paul, good morning. it is a good indicator. the problem with this is due to the client competition you have. you have big clients that are not cutting as quickly as some of the smaller companies that are the backbone of snaps advertising base, like cryptocurrency, sports gamblin

, direct consumer. they are all cutting aggressively, but some of the bigger companies are not cutting yet. we are in this weird place where early warning is happening in digital but is not yet happening in ad agencies yet. we think it probably will. >> i love your line, if it is raining in brooklyn, isn't it going to rain eventually, i guess in queens? how does that lead you to your call on paramount and snap, for example? >> to be fair, that is a line from one of our oldest clients. i was giving him credit. on friday, our team downgraded paramount. what we are seeing real time white now is weakness in cable network television. and, avon which is pluto, roku and others. we are seeing weakness in the short term markets. do we think you will see this in television? we already know the weakness in digital. we have twitter and snap and facebook and google and they

will be disappointing, as well. we think tv is now on the cusp and that is why we downgraded paramount because we think in the next couple quarters you will see it. we think, these companies are all pivoting to consumer models, so they need advertising to hold up and the investment needs to move to digital for the correct consumer. if digital breaks down, that will be hard to make the pivot with the same kind of strength we once could. >> so michael, if i'm reading this correctly, then perhaps we are seeing greater prioritization in how companies are allocating their advertising dollars. can you help take that down for us? where is the priority usually lie, especially in the face of recession? what gets cuts first and what is usually the last two or is a more stable source of ad revenue for these businesses? >>

>> we think of it as a funnel. the top of the funnel is live news, live television and cnbc news. where, you can reach your audience in scale. that holds up pretty well. we are saying if you have a live sports or live news business you will not be as effective. the bottom of the funnel, google search, amazon shopping, where there is an intention to do something and you are not trying to figure out what you're going to do on your website. well, we know you will search for a new set of golf clubs. everything between the top of the funnel and the bottom of the funnel is at risk. so, our view is that we know there will be challenges in youtube. have been buying fox because that is essentially a play on sports news. there is going to be weakness from the top to the bottom and that is where snap is being

played at. i think cable networks will be weak and new sources of advertising dollars. >> what is your sense about the theatrical window right now? in terms of movies, paramount did have top gun. are exhibitors going to be immune to some of these pressures? >> yes, it is funny. i have been seeing this has been a good place to hide out because the product is coming back. the challenge they have is, over the long-term many of the studios have moved their product to direct streaming models. so, you don't have the same level of supply coming into the marketplace. you have named some really strong field this year, but you don't have the every week release schedule of hits because there is more product moving into direct consumer. longer-term, we think we will never get back to the peak of 2019. although, people are hiding out in the theater space, we think

longer-term this will be less supply. but, it is a place to hide out. movie theaters are counter recessionary. people cancel trips for a destination, but they always go to the theater. in the short term, it is a good place to hide out when things are being cut in the advertising world. >> i never thought about movie theater space being counter recessionary. speaking of the broader macro, we will see a lot of multinationals report earnings this week contending with stronger dollar, more complicated supply chains. we were talking about last block. are these necessary issues for smaller businesses? are they holding up in terms of advertising spend relative to multinationals and some of the larger profitless companies? how does that impact certain stocks that may get more revenue from those smaller businesses? >> we have seen weakness in

digital advertising. it is small and medium enterprises. they may not have the pricing power here. they may not have the supply chains in place. another thing hitting the digital names are the smaller enterprises that are struggling. again, if you want to hide out with ad agencies, which are probably the biggest companies, they seem to do a better job holding onto revenue. but, to answer question counterintuitively, the risk for digital names is the small to medium enterprises. the other risk to digital is they collect half of the revenues outside of the u.s. we all know the dollar has been so strong, but there is a massive headwind on currency. so, for once in a generation, the digital names are not holding up as well as they probably should because of what we just talked about. >> that is fascinating.

you are so right to bring it back to the dollar. we will hear more about that as we work our way through the week. michael, great stuff. thanks to see you. s wnorer the break, a gallon of gado me than $.30 over the last two weeks. more on where prices are headed after here. stay with us. i was having relationship issues with my old bank. next to no interest, the fees it was just take, take, take. so i broke up with bad banking and moved to sofi checking and savings. now i get higher interest, pay no account fees,

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digging into the state of the consumer. the average cost of gas has dropped $.55 per gallon in the last month. all of this and our next guest is the supply chain is loosening up. joining us is ray washburn. welcome back. it is great to have you. >> thank you. i am glad to be back. >> on gas prices, it is fairly interesting, down for several weeks now in a row. there has been some data suggesting there have been,

relative to other summers some degree of demand destruction. would you go along with that? >> yes. we have seen things settle down the last 60 days, or so. sunoco sells about 8 billion gallons of gasoline per year and people's summer plans have already been planned out. we do see travel patterns steady out, so far this year. >> are you one of those who argues it is a nice relief, but watch out because typically, seasonality might come back and bite you with a renewed price hike in the fall? >> look, we supply gasoline to gas stations and we have to rely on the crude price that is coming through and that comes back to what production is like. there has been a new refinery built since the 1970s in the united states. what we end up distributing, that comes to the midstream is totally determined on the production on the other side. so, sunoco makes about $.10 or

$.11 per gallon on gas. we want higher demand and that comes from lower gas prices. we are just a towing charge between refineries and the end gas station user. >> ray, you have a very hello stick holistic image of the consumer. despite rising kosice costs for food, are you seeing any kind of demand destruction based on those numbers? have consumer behavior changed at all? do you feel like you have room to raise prices even more? >> we have raised prices about 10% in the last year. do we have room to do more? we have to spend a lot of time in technology on the supply side to try to squeeze pricing out or the cost out of our production. if you look at labor costs, things like a dishwasher has

gone from $13 per hour to $18 per hour. you can't reverse that back. so, we have to spend our time on how to make our kitchens more efficient. you ask about demand. our customer counts are strong, they slipped a little bit this summer. we have seen prices stabilize in the last 60 days, but our biggest cost are things like avocados. with this trade were we are about to go into with mexico over energy, that gets thrown in the bucket with all kinds of trade. that is been a huge issue for us. cooking oils are all up. the heat wave has been difficult for us. our energy cost is up over 65% in our restaurants. so, sales are up because we are up 10%, but we watch more customer count than we do gross sale raising. we are about flat this year, compared to 2020. i went on your show first in the march of 2020. labor is there, but the whole

thing has risen up the rising tide of cost across the board. it is hammering us. so, we have to be more efficient in scheduling and things like that. >> i remember those days. we literally, did not know how we were going to work our way out of that puzzle. that said, if you look at it chart of corn or wheat in the last couple of months, the stability you are talking about seems evident. it sounds like with all the offset pricing doesn't get easier to calculate in q3 or q4. >> but, labor cost is different. what you raise salaries, you can't take them back. we have to make costs up through other parts. when you have canola oil going from $.62 to $1.23, which every restaurant has to use cooking oil, how do you get those prices down? that is caught up in the entire ukrainian situation because a

lot of that comes out of those areas. we are closely watching our cost us. we haven't seen customer counts go down. we serve 8 to 10 million people per year. customer counts are kind of flat. more people are traveling and are away. we are optimistic about the fall, that if we can maintain our pricing and labor cost, then it is really working through the logistics of the back of the house with the kitchens. >> so, to put a fine point on that, do you believe we are at or near peak inflation based on the raw data you are looking at? >> the raw data we are seeing in the restaurants in the last 60 days is that pricing has stabilized. we still have issues with chicken and beef. avocado pricing, and everywhere in the united states has guacamole, so it has been a huge issue for us. everything is pretty much stabilized in the last 60 days.

if that can maintain itself and if consumer demand stays pretty much where it is, i don't see a resurgence of demand. as long as it stays flat, we will be in good shake. >> today, i think it is silly, but a lot of the debate is regarding the recession and if we are in one or not. there is no well-defined efficient definition of inflation. >> people are trading down a little bit. they are trading down from a $22 entri■ to an $18 entrie. or, instead of getting a meal they might just get an appetizer. there is a more cautious area. the other thing is, alcohol sales have stayed up. people are trading out of a margarita, they are just trading down from a fajita plate to a not show plate. we are seeing the trade down pricewise per person, but a lot

of that is the recession talk. how much money does someone have in their pocket? we have to maintain pricing. people are going to play $35 for an enchilada dinner. we are price-sensitive. if we raise it up to $35, they will not come. they are looking for entertainment and they are looking to go out and have an evening out. for that, the alcohol part of the equation is interesting. they don't want to give up that part. the other interesting thing is people are trading out of beer and into more of the spirit side as we shift. >> that is interesting. your radar on energy and consumer is something we are always grateful for. we appreciate your time, as always. >> thank you. >> great to have him. coming up, five of the biggest companies in the world report this week. alphabet, microsoft, meta-, amazon, and apple.

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the street i'm dominic chu. stocks are mixed and hovering around the flat line for the s&p 500 as a very busy week of earnings gets under way. now, the financial sector is one of the top performers so far today, svb financial leading the way higher, that stock is trying to recover at least a little bit after plunging 17% in friday's trade following a miss on its earnings like i mentioned, there are a number of big themes to watch for in the financials and the broader market overall this week including the big fed decision coming on wednesday and key gdp data coming up on thursday economic data, the fed very much in focus for those financials. leslie, i will send it back downtown to you folks at the new york stock exchange. >> very much in focus indeed, dom, especially after a pretty strong week for financials last week we will see what this week entails. i want to turn to the chip sector, a senate vote on the chips act which would subsidize domestic semi-conductor manufacturing and research is expected this week

elsewhere nxp reporting after the bell, a big focus on the company's exposure to the auto sector kristina partsinevelos has more on what investors are to look for. >> nxp semi-conductors are the first chip maker to report but analysts and investors are bracing themselves for more muted results because supply is coming back on line, demand is slowly starting to wane. analysts have been bearish on companies with exposure to pc and gaming markets like amd, intel, nvidia. intel down 17% in the past three months nxp stands out from the rest considering it generates 50% of its revenue from the auto end market, a market that has experienced no doubt over a year and a half of strong results and supply chain issues. but volvo's ceo told cnbc europe that, quote, semiconductors are back in full supply for us, which could be a further sign that the auto chip shortage is starting to ease piper sandler comment that had

although ev sales should remain strong the problem is nxp is underexposed and said, quote, it is best to step away from nxpi at this time they also point to a slowdown in order rates as well. however, nxpi's exposure to to ev should grow fox cohn known for assembling apple products said they are partnering to develop ev platforms. there are two major issues i want to look out for in this report, first one is an issue for a lot of semiconductors, a risk of inventory correction and the second issue that still remains in play, china covid lockdowns across the board so analysts at stiefel say sentiment is bearish on semis. we're expecting $3.37 for earnings per share in revenue

should fall in time. near term, not necessarily in the five to eight-month range, though back hover to you, carl. >> a lot of unanswered questions when it comes to semis as we go to break we want to get a check on the airlines. united downgraded today over at susquehanna. operating head winds will likely get worse before getting better. ryan air is higher dow is hanging on to a slight gain up 72

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harvard lobbying congress to lower its tax bill robert frank has that story. not too surprising lots of lobbying to lower tax bills these days what's going on here >> well, leslie, these college endowments have gotten to be financial giants growing 35% last year, now totaling over $800 billion the question for congress right now is whether they should be taxed. harvard whose endowment is now over $50 billion is stepping up its lobbying efforts against the endowment tax. that is a 1.4% tax on endowment income that was passed in 2017

it only applies to endowments of more than $500,000 per student so somewhere between 50 and 100 schools currently pay this tax according to inside higher ed a harvard official recently emailed other schools and allies telling them to contact their democratic members of congress harvard called the tax a, quote, politically motivated, damaging tax on charitable resources to a family center policy making college more affordable. they want the tax eliminated or lowered for schools that give a substantial part of their income in financial aid to low income students critics and many republicans say the richest colleges are simply hoarding tax-free cash and they should pay their fair share. harvard paid about $38 million in endowment taxes in 2019, stanford paying over $40 until now, changes to the tax were included in build back better, universities now pushing for its inclusion in some reconciliation

bill we will see whether there is much sympathy on the far left for these very wealthy endowments >> yeah, it's an interesting political dynamic there considering this was changed in 2017 so keep us posted. i know you will follow it. that will do it for "squawk on the street. "techcheck" starts right now >> good monday morning, welcome to tech neck i'm carl quintanilla with jon fortt and deirdre bosa today a make or break week ahead for he can nolg as key names like microsoft, apple, google, meta and amazon all report results. we will talk about the key risks to watch out for and that's on top of results from nearly a third of the s&p as bofa warns stay out of the in networking names we will discuss that finally don't miss an exclusive with the ceo of klarna this hour the company's valuation plunged 85% or almost $39 billion. >> carl,