feel like to most people in the bottom part of the economy that the inflation is killing me, and most, my assets are falling off, but things are pretty good as far as the income level, but it is not feeling recessionary, but inflationary. >> jan, good to see you, and we are out of time this morning and that is going to do it for us right now, and join us tomorrow. right now, it is time for "squawk on the street. good tuesday morning and welcome to "squawk on the street." i'm carl quintanilla with jim cramer, and we are coming to you on words that shopify is down, and now walmart profit is sending shares lower, and drag the other retailers with it.

and 3m is the latest to spin off the health care business into a separately traded company, and gm is falling shorter of estimates failing to ship nearly 100,000 vehicles due to parts shortages. let's get right to walmart sinking after cutting the current quarter in the news release, and doug mcmillan says that the increasing numbers of food and fuel inflation are affecting how customers spend, and while we've made good progress, in apparel in walmart u.s. is requiring more markdown dollars. we're going to anticipating more pressure. >> i would say that the high point of good manager, and carl,

i will say this, and i know that jan kniffen was critical of what i said, but i don't know if they have lost control of the situation, but it is true they have a low income customer, but not that low that it is a given. no one is criticizing them for being perhaps executing poorly. so i am. i am from a retail background and my parents are both retailers, and when i see this, it makes me wonder, do they have control over what is really going on. they have good, and they can watch our show, and now it is absolutely true if capri and tapestry have better numbers, they will say, we will, too, but they will see how much money is spent on grocery and they are the country's largest grocer, and how much is spent on gasoline, and i think that they were incorrect in the inventory control. now, when you are getting to

nicky, who is a great manager, he would say it is unforgivable that they were wrong. >> but they were wrong, and target was wrong -- >> well, second quarter, and maybe brian quinn nell comes ou to say they were wrong, and how about gap, and doesn't that read through walmart. and walmart was terrible performance and they can say our customer is similar to gap. and now, pbh did okay, and levy did okay, but i question exactly how well their execution is s and no one wants to say that, because it is walmart, and theday it is sam's club, and i think that when costco reports, you are going to see that rich gal galante, the cfo does not allow this, and i use that verb very, very rarely. he will not allow this to happen. >> what is the other path other than to say that we still have

this leftover inventory from earlier in the year? >> okay. i am looking at aollie's bargai store, and they are offering many of the things that we are talking about. they are offering the same thing that is the p&g stuff, too, and they can look at the past stuff, and not make a determination that maybe this is the wrong stuff to own i just don't buy it. they have a fabulous grocery business, fantastic grocery business, but you can look at whether things are selling, and you can do it. they have every sort of technology to tell them. i mean, when my dad worked at gimbel's, i feel like he knew more about trousers than these guys and that was the 1950s, and this is not forgivable, and they will say, jim, it is across the

board. it is not across the board. it is not. there are clear places that have figured it out, and you clear the inventory, and judge it ahead. >> and there are some places that amazon -- >> okay. third party, and so that is not them at all, and they have amazon web service, and 45 that is on the line. and you will sign, and ms morgan stanley says a potential warning, and i think that amazon web services is going to carry this, and do i want to buy amazon -- >> and aws is clear, but the point is that their own credit card data for the lowest cohort, online spend is down six for q2. >> i am not denying it, but i want to be clear. walmart did not suddenly wake up, and say, we have a lower cohort. they did not do that and sam's did not suddenly wake up, and say, wow, look at our

base business, and it is turning out to be that the people are not as wealthy as costco. and go over it, and go to parse the comments of american express and he said that the money is being spent on travel and not hard goods, but being spent on travel, being spent on travel, and couldn't you call steve squirey and say, what is that? i did. i spoke to him, and look, do i have more going for me than they do >> well, if you are going to blame this at the feet of walmart, then you better hope that the rest of the retailers don't miss, because matt boss at jpm thinks that half of his universe could miss. >> the mall is all bad. i am not say 234ing that the mas not going to miss, and every single store, but i am going to say, isn't walmart better than everybody? can't they see this?

don't they have the data to say that we have too much hard goods and now too much apparel and now, david cornell can come out, and say s i think that they are better than this, and i am making a judgment that these companies who claim they have all of this intelligence and all of the things that we talk about, and they have the tremendous all of the different sort of sales forces and they have the great data, and i'm just saying that walmart has the best data, and they should -- >> you are holding them to a higher standard. >> that what i am doing. i am saying that i have always adored walmart and thought they were great, because they always seemed to be able to manage these issue s but this is two quarters in a row that they haven't. will i hit cornell if he screws up why no but all i am saying, yes, if you are a mall retailer, you are stuck, you don't know what to do. you have no raise on debt. it is a bad french there.

>> raison. >> yes. >> and did that fall apart when mark lurie left and did the wonder truck. and wonderful technology, and how many times did they say, we have the best technology well, why didn't you see this, and look, we will get albertson's today, and is that revelatory no. i am holding them to a higher standard. >> and what about the obviously, the follow-on commentary is the pressure on the package goods and they are pushing back to say we are not paying that anymore. >> and so far, people are not doing that, and it is funny that you mentioned that, and i was talking to mary barra, and at gm, and said why not push back at the steel companies, and i think that walmart is going to do nthat and say we try to do ou best, but walmart is the biggest buyer of everything, and why haven't they done it already

they are late. they are late. how about we say that. they are late. like why should we give them a pass. they have better data than we do, and what did they wake up, and say, boy, they are not just buying the hard goods, and they are not buying the apparel, and get rid of it. i know that brian cornell was aware of the problems in inventory, and told me that he is going to dump it, and if he comes tout night, and tonight, walmart is going to say, jim, you were too hard on us, and i will say, that i hold walmart to a higher standard. and people are going say -- well, i go to walmart and i'm not an outlier, because 200 million people go to walmart, and i am saying they are a great company, and shouldn't we -- well, look at mcdonald's. they are a great company. if they screwed up, i would be like, wow. chris, the ceo, i think that walmart, i am beginning to get more concerned.

>> interesting. >> remember, they have had some times where they have had not great management. and they adjust. they are going to need to adjust >> well, this open down eight is going to be, and if it is -- >> it should be lower than that. >> it is down lower than 9.0, and bigger gap lower than black monday going back a way. >> geez, there are a lot of stocks that didn't trade that day. and it is like unfortunate that i traded that day, but that is my age, but what happens is that there were no bids to go down. and look, walmart was down much lower than this, and maybe someone is going to make a concerted case that this is the chance. i am not making that case. >> not yet >> no, that system of the retailers who are doing very well. and again, i am not saying they did poorly and everyone else did well, but i am saying that they are better and they did poorly, because they are going to scream

at me, and they are going to be saying, jim, target did not do well, and this guy, and that guy, well, they are not belichick. these guys are belichick, and they are supposed to be belichick and they are not the giants. >> current belichick. >> well, brady. and how about this, they are tomlin, and they are always in the playoffs. well, there are franchises in the nfl that are great franchises and we expect a lot. from green bay, we expect a lot, and we do expect a lot from the patriots. i do. i mean, i just say, the chiefs. i expect the chiefs to do better, and these are all walmart, and i expected walmart to be a division team. a top division team, and they are not delivering and they may call me and say, that everybody is not delivering. i don't care about everybody. this is walmart, and they have the best intel and more

information and why didn't they pivot? >> this is the bull whip of the day -- >> and release at the end of the day, hey, you know, katy bar the door. i mean, i want to know what kind of intelligence they are going to have to fix this problem. >> well, they did say constructive things about back to school, and we have all morning to talk about it of course. >> i wish they had not said that, because once again if they screw it up, and we are spending too much time on walmart, and listen to, this mr. mcmillan, i am not saying that everybody else is going to screw it up, too, but i am saying that you are the best and you need to be held to a higher standard, mr. mcmillan, and you need to be held to a higher standard, and he can come out to say, i don't need to be, because i am not that good. >> we will be watching gm here. >> and he can come out to say, well, we are a lousy team, and

why are you holding us to the same standards of good teams, we are the giants. all right. we are the giants. >> okay. over the phil lebeau. >> general motors is under a little bit of pressure earning 1.20 a share, and if you want to blame in miss, blame it on the three cs -- china, chips and supply chain, being under pressure, and the chip supply, and they warnd about this three weeks ago, and the supply chain issue that have been hitting all of the automakers over there, and if there is any good news in the q2 report of gm, it is coming on the side of revenue. revenue is bert tter than expecd well ahead of what the street was expected, and the average transaction price, guys, near a record high of $50,499 and yes, they are seeing plenty of demand, and not enough to say they are worried yet about the

consumer, and here is cfo paul jacobson talking to us on squawk box. >> everything that we are seeing is indicating that the demand for the veeck sls very, very strong despite increased production, and the inventory levels are stag down, and lot of demand that is unmet over the last couple of years as we have gone through covid and the chip issues. >> did you take a share of the shares of general motors, one more news item that the company has locked in the supplies for evs, and in other words, the components and the supplies and the raw materials needed to build ev batteries and all that goes into the electric vehicle through 2025, and we heard this from ford a few days ago and now we are hearing it from general motors, and that is critical, because the next couple of years, you will see a huge ramp up of productions in the next couple of years from general motors when it is coming to electric vehicles and we have

raw materials locked in to meet the target, and the target at this point is to sell 1 million evs in north america in 2025. guys, b s guys, back to you. >> phil, that is a terrific report, and the battery comment is great, and i do want to drill down that the demand is fabulous. if they can raise the rates, and there, and if the fed raises the rates another three basis point, and this is another $300 more a month, but weren't you impressed by the sheer demand for trucks >> it is out there, jim, and not slowing down, but what is interesting is that we are sea seeing weakness in the auto industry where you are seeing the delinquencies and defaults starting to increase, and you are seeing the pullback, but the average transaction prices topping $50,000 and i remember when the average was 36,000 or

37,000, and it has skyrocketed over the last couple of year, and the consumer has said, bring it. i am willing to, and they may not be crazy about paying over $50,000, but they are buying and the consumer is not slowing down. i will be curious if we see that start to stabilize in second half of this year, because you are seeing incredibly high prices and not just for general motors, but all automakers. >> that is fascinating, phil. thank you. and now, incrementally on the supply side, jim. >> well, the remaining problem with the semiconductors is twofold. they have to get the chips out fast, and this is foolish, and terrible, and china, and a lot of chips, and we are finding ourselves more dependent on china than we thought, and it is a wake-up call, and it should be a wake-up call for congress, and

we have to wean ourselves off of them. >> and you saw the journal piece that they make a move on the straits or something like that. >> and this is why the united states, and if you are listening to raytheon, and it is like greg haze w hayes is out there saying, listen, we have to win this war, and that is why raytheon has such good orders and backlog, and no doubt among the business people that i talk to, and i keep hearing same thing, jake sullivan is a defeatist. and jake sullivan is a defeatist, and more scared of the russians, and i am starting to not like this. are you scared of the russians how about when they go for it. >> and the games he is playing with the nat gas, and they are high. >> go buy some sweaters. >> and a ton of earning movers

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if wall street starts to think that we are in for a recession, you have to pull in the horns a little bit, and pull in the high yielders who can make the yield, so watch or listen live on the cnbc app. mcdonald's is topping the earn earnings earnings, and the street was looking for 7.5, and it is a big international story. >> yes, it is, the stock was down, and i sat here and i said, don't they know this is mcdonald's, and it is god, and again this is what i am saying about some of the companies like walmart. they have tremendous systems, and execute perfectly, and i

mean, there is some global comps, and inflation in there, but they are well run. remember, they were a little bit more hit or miss for a while. >> sure. >> this is all hit. it makes me want to say, you know what, they know how to run their business. they are good. i just applaud them, and they have really made it so that the consistent growth which is consistently underestimated by wall street, and they don't believe they can pull it off. i love this number. >> domestic on the 37 stack, and, jim on the call, they said they are push through the pricing, and the consumers are tolerating it well, and seeing some tradedown from the lower court. >> look. we are two countries. i mean, the lower court got a lot of money, and the child credit and a lot of money from the government, and now back to normal, and back to the tough times. obviously, jay powell is reacting to everything that we see.

now, it is going to be interesting to see this, because he is taking into the fact that he, does he saythat is gasoline we don't know, because he does not control gasoline, and you could make the argument that jay powell is winning here, and that is making so it they didn't go to buy apparel at walmart, and i would say that what is happening is that the lower, lower-middle here is strapped because of the gasoline up, but there are jobs open, and this is the anomaly here. there are so many jobs open here, and that people would have mobility, and 45 million people changed jobs here, and they would have the mobility to go to a job that pays more. >> and we will find out, because we are the the two-year below, and 10-year below, and that means that jay is going to take the rates to 3.50, and even there, m there, mary barr says it is going to be fine. and lulu is going to be cut, and

lulu is the sacred player. >>e wwill get the opening bell in under five minutes.

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time for cramer's mad dash as we count down to the opening bell. >> it is a tough letter at shopify. shopify made a mistake. they felt that somewhat like amazon that there would be a permanent blip up in ecommerce and they were wrong. now i like their humility, and they come out to say, hey, we totally screwed up, and they do layoff people, but it is interesting to see that when they have in the email or the mail to people, everyone, they show you that things have reverted to where they were. so you have the line that is up, and then a spike, and now it is back to where it would have been had the trend line kept even, but they did not think that the trend line was up, and that is very, very important, and a big miss, and a very big miss. and a tough thing for a company

who does a good job. >> yes. 10% layoffs across all units, and we will talk about it more after the bell here, and let's get the opening bell here on cnbc, and opening up is the 10-year anniversary here with lehigh anniversary partnership. >> dwre, it was a beautiful quarter, and the execution was perfect, and it was a marvelous team, and i have known them since i was at goldman since 1972, and cheer all you want, guys, because you are champs. >> speaking of steel, a whirlpool last night was a beat, and they cut the guide, jim, and the revenue is down six and prior up two to three, but the stocks are behaving okay. >> and i was doing some work on whirlpool, and if you are

combining the cash flow they have with the cash that they have, and you are going to get the company for free if they sell europe for $5 billion which is what i think they can do. and these guys can sell russia to turkey which is extraordinary, and so i think they are doing a very good job in a tough area. they did not, and they are not complaining about raw costs, and they accept it. u.s. is weaker than i thought, but there is without a doubt a sense to me that company is in control, and more in control of the destiny than i have ever seen them. and by the way, over the years in the '80s they were criticizing and criticized about the latin america exposure, and bingo, latin america saved them, and a good quarter relative to what i had when i had them on and i would not sell them, because there is no antilatin

exposure, because why wouldn't i buy them right now. >> and weber which we talked about yesterday, and the couple of downgrades with bofa and -- >> well, weber has some debt, and 1.8 market cap. and weber's venture was private equity and they cut it to get the deal done, and of course, they fired the ceo, and you do not need, and one thing that is great for weber is that i think that last forever and you don't have to buy another one next year, and to put them out there not alone, but traeger is performing poorly, and weber had everything go wrong, and in the end, they deserted us, and now the problem is how they pull out of the tailspin, and i have no answer for that. >> bofa said that the number of households with grills is 80%,

and 40% replaced them within the last three years. >> amazon is stabilizing them, and this is good. but thinking of weber, and you are thinking of the period when everybody, and all of the periods rushed to market, and they took advantage of the market, and i am not saying that weber shouldn't have done it, but they took advantage of the market, and they crushed people. when you are looking at what the stocks have done, it is murder. i mean, symbol cook, and that is the is traeger, and that is funny. sit down 75%, and what they did was to take, and they took your money, and put the grill on hot. >> money burning furnace, except when it is done by tesla, it smells good. i mean, i just cannot, and the weber -- and these guys, did they ever take advantage of the fact that it was better to grill outside than to get covid inside. >> and you are sort of pointing again to shopify memo that says, look, we made a bet that the

migration to online was going to last 5 or 10 years' i business would migrate, and did not pay off, but at the time they felt that, they had no choice but to expand. >> that is what they will tell you with jasse and these other guys, is that he realized it quickly, and then he took radical action, and he had radical acceptance that he was wrong, and he moved. and amazon has been a terrible stock, i admit, but so is alphabet, and so there is a real pattern here if your company reached a billion or trillion dollars, and they will shave a billion off in a nanosecond, but looking at the companies public last year, it does not matter. i mean, look, pick on the companies. how about a company called figs. that is down a quick 66%. i remember that i brought those clothes home, and my stepson put them on, and he said, i look like a doctor, and he took them

off. there's it. and remember aubers, and well, they hurt my feet. so that is down. and now, this morning, there is a downgrade of real reel. and this is real good, but it is does not matter, because sit down 80%. oh, no, that is -- no, that can't be, and this is another company, real reel, that is evolved, revolved. real reel is awful. and revolve is down 55%, and that is good. >> but the point is that the w whipsaw effect of covid and the spending pattern, and as we get back here, jim, we will see down in current market down 21, and colliding with the good action in 3m and gm today, jim. >> well, they cordoned off the

combat arms in the way that j&j tried to do with talc, and then microman selling health care, and i'm not sure i approve that, because health care is fantastic, but they had the day in the sun, but if they can get the combat arms under control, then the stock deserves to be higher, and talking about groundwater, but when you are talking to g.e. and larry culp, you are buying everything else, including health care and power and ri newable, and larry culp would make the case that energy security is not one of the most important issues in the world with russia and ukraine, and he has an important story to tell. and jpmorgan is not buying it, but it is the way, and the well-well. >> and deuces is well below consensus. >> yes, but larry is augmenting

the hand. he was dealt like a 3-6-7-10-jack. he has been able to get, and he has two pair. and he is going to take it to three of a kind. he is, and because the spinoff is good. >> they are trendingtowards th low end. >> no doubt about it. they are not a high single digit grower, but they are going to be able to do the spinoff, and it is investment grade, and the stock is down 25%. what's the matter? what's the matter? >> i am looking at u.p.s. as well. >> well, u.p.s. is complicated. >> andt love th-- and a lot of iterations of the guides today, jim. and saying that we are still seeing what we saw before. >> and u.p.s., and domestic was down, and the packaging, and look the revenues with up per piece, and i am not going to jump all over carol tomey, and

look the praise of coca-cola, and it is only up 0.7, and that is a mistake, because that is a beautiful quarter, and probably one of the best quarters i have seen. >> organic is up 16, and double the street. >> and that guy, james quincy, he is fabulous, and he is not talking about the ancillaries that he is developing, chico and the water. >> and the growth. >> but it is one-third of the growth is happening to be some of the newer things that we are talking about and whether it is the ranch water, and we have not seen the jack and coke. but i think that if they have head winds, and the ratio is well in hand, and 10.5 billion free cash flow. i think that he is putting money in growth areas, and he has done a remarkable job and reenergized the company, and i want to

praise james quincey, and mcdonald's, and so i am not a negative guy, and i have guys -- hey, if you want a hand that is being augmented, look at raytheon. they ran into the quarter, and this is what is bad. when you are looking at the book to bill of raytheon, 1.35, and that got so many, their backlog is insane. some people say that the sales will miss forever, but the only thing they don't like is that the u.s. government is not spending enough money to buy military for ukraine, and i think that we have to stay on it, and you can say, jim, you are pro ukraine. well, yes. >> but your point is good, organic is softening with the demand. >> and well, looking at the collins, that was a great buy, and i think that -- you know, i am so impressed with greg hayes,

and he has done some remarkable thing, and what he has done, and the biggest problem is twofold, supply chain and finding the engineers. and he has job, and listen to you people laid off by the west coast company, 5,000 engineers and he has big operation to go to cal-tech or stanford or harvey mudd. >> and facebook headquarters and -- >> and the mark zuckerberg is not that happy. >> and there is a great piece in the verge this morning about the metaa metaand when mark said that some people don't deserve to be here, and it is who hired them >> it is like when starbucks hired the union organizer in buffalo, and you know what, shocking. they organized a union. i don't think that metais going to make the number, and low double digit and i am not trying

to flip everything, but i think that mark zuckerberg is going to solve the metaverse, and i like being there, because the rest of my life is okay, and i do my work and go to the metaverse, and as long as i can dodge my real life, i am okay. >> just keep coming back for the show. >>ly be in metaverse like you wouldn't believe, and find out things, and look, meta does not deserve to go down, and if they overhire, and give me the one with zuckerberg and not that one, because i am jacked in the zuckerberg one, and look, reels is going to shock people, and they are taking shares is. and snap, the pathetic snap, that was tiktok. >> yes. and even yesterday, the nathanson downgrade, and we don't like to downgrade on the heels of a terrible quarter, but in this one, you have to rethink of how we think of the model. >> that is big time.

evan should downgrade himself, and he should come out saying that he is going to downgrade. >> and jim, this double downgrade over at goldman and wolf is going to roku to underperform, and talking about the scale is in trouble, and the monetization is in trouble. >> and roku is shopify, and they were great for at home. paramount with what tom cruise is going to make more than paramount's quarter, and people are going to be saying, when is paramount going to be sold that is insult to injury with that downgrade, and ad dollars are down, and to think that google is going to -- it is easy to say that everything is bad, and i went through a whole group of companies going quite well. >> well, paramount, and roku is not that they are bad necessarily, but there are better and more avod alternatives which make it hard to grow. >> it is true, and i look -- i feel that when i look at what

bob balkich is doing, and why were so many retailers so optimistic, and why did they say that the second quarter would be good what made them think -- where are the walmart mer chmerchandi? what was mcmilllon doing, the ceos, and others who have screwed up certainly, but i question the acumen of these people, and you see, it is our job, and look, i am not just a -- i am not some superman, and i have screwed up so many times that it is ridiculous, and that is going to be on youtube until the end of time, but it is optimists versus pessimists, and

that is right, and it is when you are looking at the receipts that you are getting. but i don't see with everyone knowing, and did everyone think that inflation was under control at walmart >> the problem is how confident were you that you would see better leaf? >> i was not confident. >> and we have been talking about the apparel inventory, and downgrades of gap in february. >> i have a lot of gap clothe, and i went to the banana republic, and by the way, i paid the guy next to me, and the guy next to me did not pay. i thought that was interesting that guys who have expensive clothing, and they don't pay. i watched target and gap, and i sit outside and it is fun. i like to count how many people don't pay. what kind of country. i mean, nobody talks about it. none of them is willing to say the truth which is that you steal, and then you put it on

amazon. amazon is a fence. i mean, fence like the movie. >> it is clothes, jim, and drugstores and why starbucks is closing the stores and physical retail has issues. >> and we decided to not prosecute those people heavily, and there is economic reasons why you have this stuff, but when i went to ross store while they were taking a couple of people at a time to monitor the stealing, and what kinds of numbers are they having, and these retailers, and you can't ask a clerk, a terrific 65-year-old woman to stop some guy who is stealing. and yet, that is what these people are doing, and by the way, all of the ceos off of the desk, that is what they are talking about. come on. aaron, like, sitting over there with the bad bunions, and hey, people are stealing things, and like off of the desk they say we

don't know what to do, and they have a bill in congress so that you cannot fence things if you fence things you go to jail, but if you have 80 people raiding a mall, they are fencing it. they are going to amazon after, and you can look at the name brand hardware stuff made by a home depot or lowe's, and you can see it is on amazon, but these are house brands, but they are not sold by lowe's or home depot, but they are fences, and we have a modern day fencing operation, and nobody seems to care. >> i think that people are watching it, and jim, to your broader point, it is walmart, nike, and home depot that are all of the top dow laggards at the moment, down 137. >> they are all hurt by gasoline. it went up a lot. >> it is down 60 cent from the highs, but up $1.30 on the year. >> and petroleum reserves was meant for defense. >> and now to the morning from

the day, bob >> yes, and it is down of course with walmart, and the weakest is x rt which is the biggest, and energy, and oil, folks is creeping back up, and $98, and happening last couple of days, and metals and mining, and the tech modestly to the downside ahead of the major earnings from apple and microsoft, and taking a look at where we are in retail. there is no surprise that walmart is down, and no surprise that kohl's and macy's is down, and i am surprised about nordstrom, and it is down, and there is concern about the high end is impacted by inflation, and they are all down, and no matter the consumer that you are talking about. it is not helping that internet sales are down, and shopify is laying off 10% of the workforce and ecommerce is slowing down, and not only shopify, but etsi

and chewy, and i love the industrial companies, the 3ms of the company, and they are working all over the world, and coke was a big revenue growth, and the guidance versus the prior, and mcdonald's is up on the guidance, and those were good numbers, too, and 3m beat did lower the full-year guidance, and people are not bothered by that terribly much, and overall, they good. but if you are looking at the commentary, it is all over the place. i like to look at the color, and what the ceos are saying, and 3m, we see strong demand across many of the end market, and this is the good news. and mary barra, and there is concerns about the economic news, and she was concerned about managing costs and supply issues, and mcdonald's planning for a wide range of scenarios

and that means they are not certain about the economic outlook, so you can get wide ranges of outcomes in the second half of the year, but as for walmart, the surprise here, and remember in may with target, an walmart dropped 15% in may when target made the announcement of the inventories, and the surprise here is not about inflation, but about the magnitude of the impact. that is what is surprising people, and this is why sit down so much, and it is much bigger than people had planned for, but we have seen comments about the consumer slowing down. and remember that seagate last wednesday or thursday, and they said that consumer demand is down more than we anticipated, and impacting discretionary spending, and seagate said the same thing as target and walmart. and carl, where are we uncertainty on the economic outlook, and the k-shaped economy out there, and the high-end consumer is strong overall, and the key story here

is still more beats than misses out there, and the earning apocalypse that we were concerned about a month ago, carl, it has not materialized in the market, and back to you. >> thank you, bob pisani, and take a look at the bond report, and the fed is meeting today, and we presser tomorrow for the time being, the curve is best low three it might imply a target of two we'll be right back.

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you have nucor tonight >> yeah.

the stock's down so much, but look, we cannot just say, well, i guess that's the consumers these are companies, well, i guess that's the players these are coaches. >> jim, we'll see you at 6:00. in the meantime, dow down 126 on this tuesday. we'll be right back. don't go anywhere. (ted) after talking and texting for years, we got married... for the family plan. (jane) and then we really expanded our family... for the wireless savings. (ted) it seemed like the responsible thing to do. (jane) and then, just yesterday, my sister told me about visible. (sister) yeah, get unlimited data for as low as $25 a month. no family needed.

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welcome back we're live at hq cme, with breaking news, the richmond fed index for the month of july expected minus 14, comes out much better, actually at zero. zero, believe it or not, is the highest level going back to april when we had our last positive number. consumer confidence, a july read, 95.7 that is the weakest level since

february of last year. if we look at the present situation, 141.3, that is down from 147.1, and expectations, what lies ahead is 65.3 sequentially following 66.4. new home sales for the month of june expected to be around 650,000, seasonally adjusted annualized units comes in definitely on the light side, 590,000. in the rear-view mirror, a big revision downward to 642,000 590,000 now is the lightest level since april of last year for more color on exactly what's going on in housing, of course we turn to diana olick diana. >> well, rick, we have to remember the numbers are based on signed contracts in june, people out shopping when mortgage rates crossed 6% on the

30-year fixed. really this should come at no surprise we're hearing it across the board from builders they're seeing lighter demand prices still up 7.4%, but 9.3-month supply, up from a seven-month supply this big jump is because of they have a growing number of completed homes that have not yet sold we got reported earnings from pulte this morning, and the cancellation rate doubled. saying the use of incentives is taking a couple steps back incentives were mostly tied to the mortgage, but this is expanding to include discount on options and lot premiums the case-shiller is

backward-looking, but did show the second straight month of reductions that is cooling in the price decelerations. you're seeing it across the board in housing again, no surprise, but it is a largee than expected drop. that will hit the builders, no question, today, carl. thank you, diana good morning for the second hour of "squawk on the street." the macro data as you heard was a miss walmart is weighing on sentiment, the dow is down 124 on the first big wave of corporate results today. general motors is falling after missing earnings estimate. the company says it was unable to ship close to 100,000 vehicles due to the parts shortages. stock down 3.4%.

3m is higher after beating across the street in q2. it said it will spin off the healthcare business. finally, walmart plunging after cutting the outlook for the current quarter and full year, last night saying higher food and fuel costs are causing consumers to spend more on necessities. that shift in spending forcing walmart to cut prices to reduce excess inventory the stock is down almost 9%. there's obviously a ripple effect on the rest of retail xrt on pace for its worst day since june is this a warning that the consumer hayes turned and the recession is coming, or something specific to walmart? if you look at some of the basics trades, albertson's, kimberly-clark, coca-cola, they were ought fun

were all fine >> any retailer where credit card data would suggest you're down in the mid single digits for the quarter. >> two things are happening, which makes it not as straightforward as norm at sort of recession or pullback it's the low end versus the high end. it's the categories here spending on, more on the general, less on the more specific apparel will feel it, and also people are spending on travel and leisure, not spending as much, say, on the stay-at-home trade. because of this funky covid, pent-up demand thing, it's not as straightforward. >> not toens some the fact if you don't go to the office as much, you don't need as many

clothes. michael baker joins us this morning. thanks for joining us. he i guess the question would be, were you surprised >> thank, carl i'll have to admit both. in some ways, the target told us six weeks ago i thought walmart would hold up better, given the higher percent of foot and basic merchandise in their mix it's that part of the mix that's nondiscretionary >> so keeping the buy, explain does it reflect a conviction shun this inventory can be worked off >> sure, it's going to take longer than we expected. now it's in the third quarter, and the guidance suggests that

the estimate will go down about 70 cents 20 cents of that is in the second quarter 50 cents is in the back half, probably predominantly in the third quarter, given that the inventory reduction needs to occur. the reason for the buy rating are twofold, i would say one, the sales are pretty good, mostly the food-based business and nondiscretionary market, but we think that will help longer term secondly, the stock down, estimates are down, it's been derisked a bit here. their third quarter and fourth quarter, remember, sales were better in the second quarter they didn't assume any sales improvement in the back half they kept the sales where they were and cut the margins so we certainly don't want to call it conservative, but we think they've taken their

medicine and don't think another cut is coming. >> what does it mean for other retailers? is it sell everything where exposure to the lowend consumer, or with exposure to apparel, general merchandise? right now a lot of this is consumer names are down progressive sharply. >> yeah. sara, you said said in the segment before, is this a walmart situation or overall consumer i think a bit of both. clearly the consumer will spend a little less, but walmart and target clearly made too big of a bet on some discretionary product, so it's a bit of a company-specific bet that didn't work out what it means for the rest of retail, i would be worried for anyone who has high inventories in discretionary areas so ones that might hold up a bit better, we think ulta, for example, don't think there's a lot of exposure.

auto parts, maybe not as much markdown pressure there. the clubs, they're among the highest percent of food in their mix, so we think that could hold up as well >> it's a good point the fact that you said they overshot on inventories, jim crime other has brought up the execution issue here a number of times. how did they get it so wrong in terms of estimating where the consumer is going? they know more about the consumer than just about anyone. >> yeah, that's a good question. i think this management team has a long a good track record, but they did get over their skis coming out of the pandemic the retail sales were at record levels in 2020 that report was beaten in 2022 i think walmart's team just made a mistake thinking it would

continue not at the same rate, but not decelerate as much to be fair, while i think a lot of people expect inflation is maybe a about i her than expected, and some of that was a as a result of maybe what's happening in europe, and -- >> yeah, there's some fed officials that can tell you about that, being surprised about world events and how michael, we appreciate the help this morning good to see you. >> sure. you too. thank you. not helping sentiment today, the imf releasing an update to the world economic outlook it was a significant cut to the forecast the group now expect global growth of 3.2%, a drop from the april estimate, also a sharp drop from last year. joining us first on cnbc is the imf chief economist, author of the report, great to see you again. welcome back thank you for having me.

>> we were just having a discussion about walmart, and the signal we're getting there, how much of the lowered outlook and the clouds you see on the hi horizon are due to the fact of consumers. >> we're seeing three major factors, one is inflation. inflation works in two ways. it's a rolling purchasing power, hitting the pocketbook, and also going to lead to further tightening by central banks around the world secondly, china has not been doing well, so we have a significant revision for china, the euro area has hit in particularly by the elevated gas prices and impact of the war if you put together u.s., china and euro area, slowing down the

three largest economies in the world, the global outlook is revised downward. >> gloomy i think is the world you used in this record. a big markdown in the u.s., 1.4% lower than you expected a few months ago do you see a recession coming in the next year? >> no, we don't have a recession in the u.s., projecting about 2.3% growth in 2022 and slow down to about 1% in 2023 its a significant slowdown here on the back of, as you pointed out, lower consumption, tighter monetary policy, and also a decline in consumer confidence going forward. that also has an impact, but this is not a recession, but it brings us closer, actually, q4 growth in 2023, we're estimating only about 0.6%. when you're at 0.6%, it only takes a bit of bad news to sort of knock you off there

it's a narrowing path to avoid a recession in the u.s there's this huge debate now, and the white house has been telling us it's hard to actually have a recession when there's a 3.6% unemployment rate do you define it as two negative quarters of growth or what >> that's a technical way to define a recession, two consecutive quarters of negative growth it is correct to point out in the current environment, where you have an unemployment rate of 3.6%, and a very tight job market, it's hard to sort of look at this and sort of line it up with historical recessions we've had in the past, so recessions, that's usually defined, bull certainly beyond the definition, when the economy is slowing down going from 2.3% to 1% next year, that's going to be felt.

>> do you think the fed is making a mistake hiking so hard into a sharp slowdown? growth here? should they stop >> our projection right now is inflation around 7.7% this year and coming down after that if you're in an environment with inflation, that's been persistent and broadening, several things don't really have a choice our advice is bringing back price stability, might not be entirely possible to avoid a recession, but it's absolutely necessary to bring back price stability going forward. that's the bedrock for macroeconomic stability going forward. >> so you agree with their approach i wanted to ask you about china as well. they have these rolling shutdowns on the zero covid tolerance policy how do you think this plays out?

>> it's been taking a toll certainly we have a significant downward revision for china, projecting 3.3% for this year. just to put things in perspective, this is the lowest growth rate pretty much since 1976, outside of the pandemic, for china. so this is a significant slowdown you're right, it's on the back of basically two things, the lockdowns, there was also a slowdown in the real estate sector weighing down on the economic activity in china going forward, in a context where you have more virulent strains of the virus, it certainly makes it more difficult to have a zero policy. you know, at the same time the economy is adapting, they're having smaller and smaller effect, but they will still take a bite out of the chinese growth going forward.

>> and then europe, what happens to europe's economy? >> well, this is something we were concerned about we ran both our baseline estimates and also a alternative scenario including a full shutdown of russian gas to europe our estimates there, in this alternative scenario, that would knock off another 1.9 percentage point for output by the end of 2023 very sizable the gas shutdown itself, the alternative scenario has a number of layers, but that would have been knocked down about 3.7 percentage points. the european economies are very vulnerable at this point to a full shutdown of russian gas. >> we're all feeling the strong dollars in different ways. how problem matt do you think its for the global economy at this points? >> it's certainly have a number

of impacts it's increasing inflation in many countries around the world. why? because a lot of goods are invoiced in u.s. dollars if you're a brazilian importer, if the dollar is strong, those are going to be expensive. that will feed into inflation in brazil or anywhere else around the world. then there's also the fact that when the dallas is strong, a number of companies and corporations have debts in dollars. that makes servicing the debts more difficult that's adding to the financial strength the strength of the dollars is certainly adding to the pressures that the rest of the world, especially emerging markets, is fays. >> pierre, thank you solve for joining us >> thank you fresh off that news of a downagreed carl

>> let's take a look at our road map. plus a deep dive on the consumers. what to make of that warning in walmart. and highlights from our conversation with james quincy. how you might want to play alphabet and microsoft before the earnings "squawk t see ijuonhetrt"s st getting started. don't go anywhere.

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coca-cola earnings coming in better than expected revenue driven by both volume and pricing, both looking strong it derives 12% to 13%, the but for-ex now that's -- i did speaker this morning with james quincy. he points to very strong underlying fundamentalses but says foreign exchang has largely offset the extra business he's seeing he says i hope it's for-ex, which is actually what we just heard from the imf of course, i asked him about the consumer as well he said when it comes to the u.s. and europe, he is seeing,

consumers, quote, putting the brakes on spending and trading down, but in leisure and travel, consumer is boom ing the lopsidd spending picture he said is a weird reopening trend of the the question is what happens when summer ends? quincy said it's wages and services coke has been raising prices, and will continue to do so at or close to the inflation rate. like pepsi, coke is seeing growth right now, and also in a defensive place. they've been popular stocks, and the market at this point whether it continues, well, coke is given investors something to be excited about.

>> i'm thinking back to the time when that away from home business went to zero. >> some operating margin compression, they are spending money and obviously the dollars is just a huge headwind. >> they did the body armour deal, the strong dollar, and the commodity price, but they maintained their earnings guidance, which i think was strong for investors, and the fact that because it's 50% of the business, that away from home is really working, despite some of the softness they've seen in grocery and business, it's balances out, occupancy levels are very high. >> we're having to get used to different ranges of organic growth >> yeah, the beverage business is holding up well

you can see that in the nielsen data. >> and very similar world, get a check on mcdonald's today. shares are reporting higher, global comps up 9.7. higher prices did help boost sales in the u.s., where we got about 3.7. we'll dive into the results and talk u.p.s., in a moment ♪♪ ♪♪ ♪♪ ♪♪

welcome back let's look at the industrial select spdr. shipping rates did help to offset a decline in packages shipped, which are down nearly 5% the company is raising its targets for buybacks we'll keep an eye on u.p.s., the transports and a lot more. dow in a tight range, down at the moment

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good morning here is your cnbc news update. the drug trial of brittney griner, focusing on testimony, cannabis is regard as an legitimate medicinal use she acknowledged she was carrying vape canisters containing cannabis oil when she was arrested, though claimed she had no criminal intent and they ended up in her luggage because of hasty packing temperatures in portland, oregon, potentially topping 100 degrees. the expected high temps, which are uncommon for cities such as

portland and seattle, have prompted local officials to urge residents to stay safe and take precautions. the $90 mil790 million soar $810 million the drawing will take place tonight at 11:00 p.m. eastern. >> seema mody, back to walmart, a story of the morning, the biggest drag on the down right now, the company lowers earnings outlike. we're seeing a pretty big ripple effect, courtney, we've got to look at the xrt again, down 3.5% or so. it's been 8 1/2 years since walmart, we know it's it's a dow component, so really sending concerns there all

consumer-facing -- sales are trending stronger than anticipated, but the profit that's generated as a result is lower. why? walmart is selling more of the lower-margin goods, and having to discount going like apparel just very plainly putting it that food inflation is up double digits, higher than it was at the end of the first quarter a key point is that walmart has about 55% of its sales from grocery. only about 20% of target's sales mix is food. apparel is a more significant percentage of sales for targets than for walmart you know, they warned earlier, a number of ammists, including goldman sachs, wells fargo, mkm partners, oppenheimer, they're not surprised about the profit warnings coming from walmart they liked the increased share

in grocery and not deterred longer term for shares deutsche bank and morgan stanley are carb on the major venter calling out gen mills and clorox the concern, of course is lower sales as consumers potentially trade down to private label options. sim yen siegle today is saying that cutting guidance might be a stock's clearing event, allowing investor to say build up positions rather than fear down, especially for nordstrom, victoria's secret, urban outfitter and more we're seeing markets at least stabilize somewhat, maybe before today, so lvmh and prada are

among those names reporting today. it will be very interesting to see what they have to say for the consumer around the world. >> is anyone else marking down apparel and general merchandise at this point? i know target is one, anybody else you have heard or are concerned about? >> we know that gap inc. and their brands are having to mark down a lot they more or less said we have the wrong inventory at the wrong time it tends to excuse more character anyway questioner his, though, sara, we heard there was strength in things like dresses and suiting from some of the department stores and some of the overt players, as people were going back to events, weddings, traveling, work. so it's going to be interesting to see if that has changed at this midpoint in the quarter. >> courtney remarkable

we'll see how much of it is ratified that's our courtney reagan on the biggest story of the day fomc meeting kicks off today ahead of that meeting, steve liesman joins us with results from the latest fed survey good morning, steve. >> one bright spot in this otherwise bleak survey that calls for more fed hike, the potential that stock market has this level more or less priced in asked about the level of stock valid ways are 30 respondent on average see the market as reasonably priced here they say either -- but 32% say they're about right. 16% even think thesis somewhat or extremely low now, usually our survey respondents almost always think

the market is overpriced see that 72% is in the middle, that's about where they are. that 27% seems to indicate a buying opportunity the end of 2022 now is 39/89, and for the end of 2023, that's marked down from 4490. still a 10% increase from current levels, and i notice a lot would -- first, you have a mild recession, and second, the fed cutting rates next year into 2024 that's right, cutting. 350 by the end of this year, and

then they start going down 313 for december 2023, some continue to recommend avoiding risk assets that has some validity in a world where, hey, walmart just surprised you, and this morning, the imf downgraded the world outlook. how the fed responds to a slowing economy, those are big unknowns, krafrl. >> as we're talking about that, steve, bill ackman suggests that the expectations of those cuts so soon is undermining the power and the guidance in the, and as a result he thinking tomorrow will sound hawkish. >> the fed wants to bring forward the rate hikes, but doesn't want to bring too much

forward. when i look at the futures market, carl, they're even more aggressive they have a peak of 330 in january, and then it starts to come down from all the way from below 3%. carl, there's an interesting debate about the next couple months there's a big and important debate about what happens nest year, and how the fed would respond if we got elevated numbers and lousy growth numbers. >> steve liesman, thank you. on that debate, let's bring in paul mccully. good to see you again. i do wonder how you think they're going to guide september, given the fact there's a yawning gap. >> i think this meeting is going to be an inflection point in the

narrative for the forward guidance, so far this year, the fed has stressed at the time to, quote, expeditiously get to neutral. i think this meeting will represent success in that endeavor they will get to 2 1/2, which is their published neutral number, and i think going forward, they will communicate they're moving into a major probing into restricting. i don't think they'll give us clear guidance on september. they will clearly say they're going to restricting, they already have told us that, but i think they will be light, if you will, on the precise guidance. >> do you think the mar is too sanguine, regarding the timing of would-bess cuts >> i think it may be

at the same time, i think that the marketplace is going to continuously change its narrative with incoming data so i think there's a fair amount of volatility in way-out expectations, but bottom line, yeah, i think the marketplace has swung over the last month or six weeks from too bearish, maybe to a bit too bullish on this fed funds futures rate, they're a bit more hyper in their mood than the real world >> it gets to the question, what is at pain threshold for the fed? there's got to be one, and certainly it's going to be higher than it has been, what would we have to see on unemployment, on growth, on consumer spending, do you think for the fed to really take a pause?

>> it's hard to know, sara, but it's my hunch that it will be from the employment side as opposed to the consumption side of things. they still want to see a sturdy job market so i think the job market will proposal be the decisive variable when think say enough is enough. obviously the marketplace is romancing what will happen on the other side i think the labor market will give us that enough is enough signal, and also to the fed, not so much the aggregate demand data the mandate is specified in terms of the labor market. >> so that raises the question, paul, about how fast the labor market turns here. we have seen jobless claims that shot up to the highest since

november we're monitoring the company announcement today it's shopify how quickly dodds the job market changing and what happens to that rate? >> the job market is clearly slowing down, particularly at the edges, where we saw the most speculation. when you look at the high-flying tech stocks, they were basic live living on speculative money, expanding their payrolls, and obviously they're reversing all of that now. i think some of that is feeding into the initial claims data i think when we look at the labor market, real worries will come through it when we see something more broad spread with respect to hiring declines, and also layoffs so far, i haven't seen the labor market cry uncle if anything, it's barely whispering >> we're going to find out more,

of course, on thursday, on claims and gdp, and we'll kick this around tomorrow morning as well thanks. >> my pleasure. after the break, in the market for a new home? we have more on what this morning's data means for you it's getting ugly out there in housing. also, pulte is out with results. ingenuity... in motion. it listens, learns, adapts and anticipates your every need. with intelligence... that feels anything but artificial. the eqs from mercedes-benz. it's the car electric has been waiting for.

both signaling the slowdown, this plus record high inflation, here to discuss, one of the largest home builders ugh do you bower with tri pointe. a lot of commentary suggests the picture really turned in the last 30 to 60 days, does that

sort of mirror what you're seeing >> definitely spot on. as we reported or second quarter results last week, really we saw -- it made sense interest rates went from 3 period of time to almost 6%. the headlines has really changed the sentiment of the buyer as we moved through the quarter, it elongated the cycle, but put a pause to the buyer mentally from a psychological standpoint. we definitely felt that. it's interesting, carl in the short term, they're definitely a driver, but in long term, i think your previous guest talked about this the long of-term drivers are housing and -- i think there's a

long way to go to see an even anything point therei think there will be some price discovery as we match things up. a lot of headlines and thoughts that the consumer has to go through. what's happening on pricing? >> yes, we have a $3 billion backlog. what we have done and what many of the builders have done is spent more incentive dollars to protect that backlog orgarner new sales with ordering commitments. we reported or average

incentives went from 1.5%, to 3% to 4%. to get them to a payment that they can afford. >> are you seeing any discrepancies among geography, among groups and the type of house where some categories are holding up better than others? >> no, as we reported last week, we saw a stronger market on the east coast and charlotte we saw some extremity in our move-up markets in arizona, but generally the consumer always like mid-june, we saw a pullback that, that pause -- i kidded our salespeople the other week they had gone from order takers to financial therapists

so, you know, i've been doing this for over 30 years this is a very normal part of the process. the question is how long does this process of unsettling interest rates really goes on. >> for sure. of course, the longer-term stry underhoused and how we get supply to normalize over the long term for those who want to buy a first home, for example, doug, we'll talk more about it next time. good to see you. >> thanks, carl, thanks, sarah >> thank you after the break, what to expect from alphabet and microsoft as those two names get ready to report tonight dow down about 85. stay with us op or a new loca tion without the right people in place. i couldn't keep up until i found ziprecruiter. ziprecruiter helps us get out there quickly and get us qualified candidates quickly. they sent us applicants that matched what i was looking for. i've hired for every role, entry-level technicians, service advisors, store managers. ziprecruiter helps me find all the right people,

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in order for small businesses to thrive, they need to be smart. efficient. agile. and that's never been more important than it is right now.

so for a limited time, comcast business is introducing small business savings. call now to get powerful internet for just 39 dollars a month. with no contract. and a money back guarantee. all on the largest, fastest reliable network. from the company that powers more businesses than anyone else. call and start saving today. comcast business. powering possibilities. even with all the news this morning we still have alphabet and microsoft tonight. deirdre bosa has more on what investors might expect >> those two names account for 10% of the s&p, 17% of the nasdaq 100 so what they report and more importantly how they guide,tha will have big implications for the broader market their core businesses, they are looking vulnerable as we've been talking about falling pc demand to low single digit growth alphabet shares have been lower

over the past two days after snap exposed a digital ad market getting hit hard by the slowdown, all well telegraphed less certain, however, their cloud businesses investors could see them offset other weaknesses elsewhere or decelerating cloud growth could give investors yet another reason to sell there have been signs of lower demand from smaller players like snowflake but microsoft google, amazon the hyper scalers, unexpected weakness or strength, that will tell us a lot about the state of enterprise spending and have much, much broader implications guidance as usual from both those two will be key. microsoft preemptively lowered it for q4 citing foreign exchange that was early june. what else changed since then alphabet does not provide guidance but as always we'll listen carefully and they often drop hints about how they are looking at the economy and demand, carl for sure we'll talk a lot more about that on "techcheck." >> you got it, dee see you on "techcheck. a lot more as well on walmart's

warning and what that mean force names like amazon plus, shopify and the latest company to announce layoffs, details as shop is back to 30 "skr "squawk on the street" returns in a moment. your record label is taking off. but so is your sound engineer. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description.

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stocks are lower but ge is an earnings winner both both top and bottom lines seema mody caught up with larry culp this morning and has highlights >> sara, an upbeat quarter for general electric driven by aviation where sales rebounded by 27% versus the 12% gain it saw in the first quarter i did ask larry culp, is this sustainable amid a softening backdrown and he said he's not seeing any signs of a slowdown i pushed on future orders. again, he said we're not seeing that softness materialize. travel is rebounding, higher traffic at its shops, demand for repair, new orders from delta and qatar airlines and said the supply chain issues have not gone away along with the china lockdowns that accounted for 500 basis points to top line growth.

where he was less confident was renewables where they're facing a lot of changes culp says he's waiting for inflation to subside clarity around support from the white house, subsidies have not been passed and holding ge's business back and contributing to a weaker guide for the second half of the year much more of a conservative posture that opportunity to grow its wind energy business approximately $400 million operating profit drain in the second quarter, sara >> it's interesting that the demand is not the problem. they had a good quarter but clearly, are you hearing that from any other industrials what are you hearing as far as end demand and whether they're seeing a turn in the economy >> you're right. demand remains strong, 27% for sales aviation re renewable too. renewable targets and yet if the companies that separate from the space are not given the tools to succeed and turn a profit then

they're not sure they are going to be able to deliver on that front, sara. >> got it. ge up about 7% still been a tough year for that stock. seema, thank you. coming up, 3:00 p.m. on "closing bell" an interview with geoff martha, part of the meeting with president biden and he'll join us with a push for funding. that does it for "squawk on the street." "techcheck" starts now good tuesday morning, welcome to "techcheck. i'm carl quintanilla with deirdre bosa and jon fortt cutting forecasts on weakening demand, what that means for consumer focus names like microsoft and apple. plus, is the cloud recessionproof a check in on the enterprise side of things ahead of results from google and amazon this hour and then finally, ever trade crypto on coinbase according to the s.e.c. you may have broken the law. that story coming up later as well, jon. >> we'll