we'll tell you why the stock is higher. ouster at credit suisse the ceo is out after taking the job. today is july 27th, 2022 next week is august. "squawk box" begins right now. ♪ good morning, everybody. welcome to "squawk box" here on cnbc we're live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. let's take a look at the u.s. equity futures right now things are looking better than they were yesterday at the close. right now the dow futures are up by 150 points, s&p up by 37 points and the nasdaq by 182

points walmart slashed its forecast and raised big issues about the health of the consumer the s&p was down by more than 1% the nasdaq down by 1.9%. as i mentioned, that's the third negative session for the nasdaq. treasury yields which have been coming under this pressure, look like they're at the same levels it's still at 2.79%, less than 3% we have the fed meeting coming up today expectations is for the interest rates to get hiked by 75 basis points gasoline prices continue to tick lower. according to aaa, the national average fell to $4.30. if you're looking at crude oil price this morning, that's part of the energy story. they're up just slightly, $95.12 the big story is natural gas it's down just a little bit this

morning. 8.972 per million btus yesterday we saw prices skyrocket get, everything with russia cutting off the nord stream pipeline. you saw natural gas at its highest level since 2008 it's on pace for the best month ever, and we will continue to update you on this story as well. >> let's talk about shares of alphabet they're rising $1.21 per share, missed estimates of 1.28. that's down 52% from the a year ago. you have youtube's ad revenue, cloud revenue, and traffic acquisition revenue ad revenue growth slowing but it beat expectations

the stock jumped after the report because investors had been bracing the cfo telling cnbc the currency is off, and that's a story seen by many companies, and she said the strong dollar would hit next quarter's results eve harder. >> last week's stock chart tells the story on all of this all of the stocks got hit so hard after snap and twitter. thank god. you already traded off. >> i think everybody thought -- everyone is snap and everyone is twitter. you can also see a massive slowdown in the business, and that is somewhat suggest active, and pea say, are we in a recession, what's going on here? they're a pretty good barometer of what's going on in the universe if you think of all the small

businesses that theis or don't theis, this is it. >> if you can get microsoft and alphabet to act like that after the much feared results that we've all been talking about in tech, and then you've got the markets, what, absorbing wa walmart's shocking news and writing it off to the low end of things and you get 220 points yesterday. very mild. and the vix is 24. yesterday it got up to, i don't know, 25 and change. never really -- that was a day where it looked like it could get worse, but it didn't. >> maybe the bad news is being priced in. >> 39.20 on the s&p. it is amazing, isn't it? you can't find anyone who doesn't say we're not recording the new lows it's almost impossible if it does happen, that's another 10% or more down to 3500 this's going to be painful

it will be bloody. the vix is going to go high sneer microsoft, we'll talk about them in a second they're forecasting -- same forecast as before it depends the market is projecting out to what you think the market's going to look like 18 months from now definitely in the next six months, i don't think it's going to get any better. >> i don't know that they traded to those levels. >> on the trading side. >> the journal has our story on all these, you know, unilever, coca-cola, mcdonald's -- >> big multi-nationals >> -- pepsi, they're still raising prices >> did you see what mcdonald's is doing too they're looking to areas they think they need to add to their value menu for people who are cash strapped. raiseing prices is there, but a

the same time -- >> when does the medium to upper medium consumer say, whoa, i'm staying at home? >> if you listen to visa, not happening. i thought that was fascinating >> we have katie stockton coming on we'll talk to her. and jyjudy shelton coming on i'm still not convinced the is a monetary phenomena i still think the t-word might come back and be quasi rate. >> transient >> no, transitory. >> sure. at some point we can look back >> do you think the fed right now needs to have a plan to go up like above the rate of inflation until they stop? i think that's too -- yesterday

who was saying it? ackman, i think was saying it. look, they've got to get a plan and don't waver from it. we've got to put the stake in the heart of this and stop it right now. >> i think if the fed felt comfortable holding it -- >> that's stopping it. that puts us back in the '70s. that's what people are worried about. i'm going to ask her are you sure you need this cast-in-stone plan to go up 4 our 5 points >> we'll see. >> it seems like it makes sense. >> that makes me a -- >> i can't believe you're saying that. >> i know. i said i don't care if you don't call gdp a recession i kind of see that i mean people are going crazy that they haed the audacity to say that, but this economy is the definitely different than in the forecast because of the

forecast i'm getting soft. >> you're taking the tact of common sense it makes sense. >> suddenly taking the tact. do you have something in your throat >> i have. >> this is the first time i've heard it. >> no. i've had it for two weeks -- three weeks, since before i came back. >> that's the problem. there are other thing use can catch that aren't that great either short of monkeypox. >> i don't mean just now taking the tact of common sense. >> that's sort of what you've said. >> no, that's not what i said. >> we've been together so long, some of me is rubbing off. >> why should you be giving yourself a hard time >> i feel guilty i want to be more reactionary if at all possible. microsoft shares are higher. earnings of 2.23 dollars a share. missed estimates of $2.289

first time in six years they missed posted its slowest revenue growth since 2020. on the conference call there was a boasting or mention of the liuiulu kra ttive -- did i said boasting >> it said boasting. >> boasting would be a good first word. >> meantime, overnight, there's a job available for both of you if you want it it's been available for a while now. credit suisse announcing its ceo thomas gotstein stepping down.

poor bank performance and mounting issues. you may remember his predecessor resigned amid the spying scandal. the bank has now aimed a new ceo. he previously ran the asset management gig >> is it based here? >> in europe or davos. you could ski. >> no. i like it here i like it in america. >> yeah? >> yeah. >> oh. >> how many ways can be-- there are thousands of new losers this morning. after no winning -- >> which make answer opportunity to be a winner even big sneer that's right >> think about it like that? >> i don't think of it as i

round down nobody wins. >> glass half full, my friend. >> the jackpot of $830 million is expected to grow above $1 billion for friday night's drawing. >> i will admit i bought a ticket for last week when it was 400. >> did you fw . >> yeah, because i thought it was fun. >> you make fun of me for betting on baseball. >> i spent $2. >> i do to. >> you spend it again and again. i'm a one-time loser. >> yesterday i had it made -- >> that dream is worth way more than a buck. think about it like that. >> i don't want to be a scumbag billionaire. le i don't want society pointing at me as a total drag. >> you can give it all away. >> even if you do give it all away, they don't get cut any slack.

i'll take my chances. >> if i wish, i'll give you each some, i promise. >> really? >> yes. >> oh, i know what i was going to say natural gas, $9, a million btus? >> see, if you break it down per -- >> that sounds like a pretty good deal. what else can you buy a million of for $9? >> how much does a barrel of coke cost or a barrel of water cost >> a lot more. somebody was tweeting that per gallon, in the senate they have either 12-ounce cans or 16-ounce cans of soda if you buy the 16-ounce can, you're actually paying more. it's something like $19 a gallon if you buy the 12-ounce can, it's 11 or $12 people will drive way far out of their way to save a couple cents

cheaper on gas, but -- >> in general, we think $4 gas is excessive coca-cola, much more. >> but you don't need as much. >> coffee. >> maybe that bety gallon. when we come back, the energy prices worsen. russia's gazprom plans further cuts to exports. brian sullivan joins us. he has that story next. as we head to break, check out the move yesterday in the retailers after walmart's slashed its e forecast that was off levels we've seen target off by 3%, best buy off "s%. quawk box" will be right back. >> announcer: this cnbc program is sponsored by true wift securities you need to hire.

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europe's energy crisis is getting worse. brian sullivan joins us right now with the latest news on russian gas exports to the continent, all of this coming as prices continue to soar or prices soaring because all of this, we probably should say, brian. but this is getting ugly, and the days are counting down until we start getting colder weather. >> yeah, it's lugly and getting worse, becky i wish i had better news to report vladimir putin continues to play games with germany's energy supply the flow expecting to once again be cut back. they came down a couple of hours ago, a couple percentage points. gazprom has said it may cut the total flows by half. if so, that would be down to just 20% of total capacity, down from the already reduced rate of 40%, which, of course, is where they restarted it last thursday.

now, the russian monopoly is blaming a pipeline engine, a turbine, for any cutback germany is effectively saying it's -- i'll summarize -- a lie. this cutback is surging spot gnarl gas prices up in europe again, guys. it's now 217 perfect contract. it's priced in euros per megawatt hour. if you do the conversion, that is the same as $60 u.s. per natural gas contract we're paying 9.10% for the same contract they're paying 60. we're paying 9 and change. think about. that i'm going to put it another way, natural gas prices right now on the stock market at one level are roughly equivalent to

00 300 and $350 per barrel of oil utility costs are up and i want you to consider that is with some russian gas still flowing. what if gas gets cut off in flow what if putin decides to turn off the tap? the imf did a report it was worky and long. here's what they found the macro uk economy taking a hit. hungary would get hit the worst, italy the second, germany up there as well. remember, the total european econom trillion, the same as china. europe accounts for 10% or more of company sales we're talking about this not just because it's a potential european disaster for europe, becky. let's not forget, there's also an impact to u.s. markets here

by the way, the euro is collapsing it was a hedge fund that made a bet that the euro would fall 80 cents against a strong dollar. sounds nice. if you're selling goods around the world, that kind of a strong dollar is not necessarily what you want to have a lot of angles to this story. it's a big deal. >> brian, it's clear and much appreciated. what i don't understand is why the markets are taking it in such stride at this point. this is a really bad potential situation, and while we can look at the earnings and say, yeah, things are pretty great for the second quarter that just ended, we don't know what the future's going to bring, but hopefully -- the high stakes games that putin

is playing at this point, i'm not sure why people aren't more concerned about this, at least when it comes to the stockmarket? >> i'm not either. listen, you could make the gult this could be a net positive for parts of the american economy. i'm not trying to make a positive out of europe's pain, but if you look at liquefied natural gas, becky, lng to the rescue, this is a current shift for europe rush's building a second pipeline to china. it looks like they're turning their attention to india china they're going further east you know, maybe it won't turn out as bad as some people think. >> that's the only thing i can think of. >> i am a huge -- >> the sales impact is not as

bad as some people think we're down 20% we'll try to find upside, joe. i don't want to be negative. if the feds got two mandates, dollar stability and employment, and you've got a really strong dollar, why doesn't that free them to at least consider the other mandate? that's the silver lining if we've got a silver -- for inflation, inflation is a declining dollar with declining purchasing power, so i can definitely see a silver lining, although, if multi-nationals get hurt and they contract, the stockmarket could get hurt larry kudlow called it king dollar you'd you'd much rather have that. >> every treasury secretary says that, even when they're lying, which is when their lips are

moving, but every skraec treasury says we want a stronger dollar don't you think that eases the fed a little bit >> tell that to all the companies. >> all the multi nationals let them eat cake. coming up, chinese property sales, they're set for a worse plunge we're going to bridge you the details of that next right now as we head to break, take look at the premarket winners and losers in the s&p 500.

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welcome back to "squawk box. property sales are set to plunge this year by more than they did during the 2008 financial crisis, this is according to new estimates that say national property sales will likely drop by about 30% unofficial tally shows a rapid increase in chinese home buyers refusing to pay their mortgages. that's putting pressure on developers who typically sell homes before completion to generate cash flow as a result, the ratings company warning that it could spread to healthy situations another thing you can add to your list of worries and whether you think they're a contagion, more broadly. we also have an update following our interview with 3m ceo mike rowe mitt the legal team suing over

earplugs issued a statement. here's what they say 3m's bankruptcy move is further proof they value their profits and stock price more than the well being of veterans who fought and serving our country the trust to resolve ear plug litigation claims is woefully underfunded and not the efficient and equitable resolution. >> it's based on expert an all circumstance highly respected third-party claims estimator the billion trust, we believe, will be adequate to address with the narrow subsidiary. we also stand behind it and will support with whatever funds are required to resolve the mat never the end. >> again, this is a case for the courts on whether they'll be allowed to put that subsidiary into chapter 11 bankruptcy and

whether they'll have to fund more than a billion. >> it's fed day. we're counting down the fed's decision at 2:00 p.m. eastern. we're going to tell you what to expect as we head to break here's a look ahead at the winners and losers >> announcer: executive edge is sponsored by at&t business at&t 5g is fast, reliable, and secure , i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic i labra-dore you round of a-paws at&t 5g is fast,

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good morning and welcome back to squuks we're live from the nasdaq market site right here at times square on cnbc take a look at the futures we're in the green, at least for now. the dow up 111 points, the nasdaq up 160, the s&p up 30 points on better than expected news i think we should put it into context in terms of what we heard last night all of this is going to come into focus today when we hear from the federal reserve after 2:00 p.m. >> let's talk more about that. the fed concludes its two-day meeting and will announce its latest interest rate decision. joining us now, mike katopolis

and gunjin you say some interesting things about sentiment, and that is that just the notion of a recession, you hear that from almost everyone, almost a foregone conclusion. could that be a positive because it's priced into expectations, or do people act on their pessimistic viewpoint and is itself-fulfilling and he head lower. >> it seems to me whenever anyone expects something if it's in the market, we've seen the worst. >> that's right. recession, recession, recession, that's something everyone can't stop talking about people are like, it's priced in. it's a matter of how soon and how bad it's going to be

the fascinating thing is it's actually triggered kind of a reversal in the market in july, what you've seen is the tech stocks, growth stocks outperform because people are saying, hey, i think this there's going to be a recession that could be a more accommodative fed policy we're seeing that in yields and expectations, where people are expecting the fed to decrease rates next year after peaking the rates this year. >> we're going to talk about mike about that in a second, but gunjan, one other thing i notice that your point was is that after the 75 basis points, there's a notion that maybe the fed doesn't stop, but maybe the heavy lifting is done at that point. i guess that's because maybe the demand has already been -- the demand slowdown they're looking for is already going to happen. >> that's right. people are pricing this incredibly sharp u-turn in

interest rates, and there's a lot that can go wrong, right, with that thesis inflation may not come down as quickly as people still think it will come down that means the fed can't lower interest rates, right? it's based on a lot of ifs and it's pretty remarkable lower interest rates next year. >> that's the problem with the fed's tool, right? all right. we did it. we caused a recession. unfortunately inflation is right where it was i mean that's like -- think about that that's why it's so difficult that would be the worst outcome. mike, you point out that previous inversions of the yield curve maybe were false flags, false signals, but this one you need to pay attention to in terms of forecasting a recession. >> yeah. that's right when you look back to late march, early april, it was a completely different environment. yields across the curve were

going up typically when yields are going up across the curve, meaning longer dated yields are going up, too, that's not a sign of expectations for low growth. those long end yields declining is expectation for lower growth. that makes a ton of sechbls look at isn new orders. they're in new territory on a month over month-basis, they're negative on a year-over-year basis, they're 1% today you know, it's a totally different environment than just a few years ago. the inversion of a curve is something you shouldn't ignore when you have these long yields. lending is going to contract listen, that's the whole point of what the fed's going to be

doing. i don't think this is all that atypical this is a very atypical cycle and we expect to play to the best. >> so you after -- i don't know if you've been excited about fixed income you're excited now about opportunities in the next couple of years in fixed income. >> i am, i am. i think you can get real total return in fixed income for the first time in over a year. longer dated treasuries can certainly offer a really good return you know, listen, the 20-year treasury currently trades at where we were, that's a 15% to 20% return i'd be hard-pressed to find where you're going to get a 15% to 20% return in a low bid fsa facet. that's just the math if if you go back to where you were on december 31st.

it presents a tremendous opportunity. corporate credit is likely to widen further in the last six months of this year. you're going to have another great opportunity once that winding happens to be able to sh shift. i think the next 12 to 18 months are going to be really good months. >> now you've got me excited wow. right now you say you switched the credit risk. you think there's going to be an opportunity in the next year and a half to go the other way. >> 100%. i think they's one thing fixed income investors are going to have a hard time figuring out. they invest in bonds that are not all that liquid, and, quite frankly, the entire bond market, including treasuries, isn't that liquid they're going to have a hard time between interest rate risks

and credit risks as inflation takes off coming out of this next slowdown. yeah, i think that today you want to be an interest rate risk, you want to be long duration you want to own longer term treasuries and longer duration assets in the fixed income side. and then certainly in the next 12 months or so, maybe sooner, when it blows out, it will be an incredible opportunity there. >> gunjan n the past, financial interests are synchronized usually you don't want just a collapsing bond market it does not say good things about equity does all that say maybe eck question thees don't do as badly if bonds rally >> i think those two are related. what we've seen in july is people going back to this trade that worked for much of the past decade and even during the 2020 coviddown turn, right? being long treasuriesing, being

long tech stocks jpmorgan told us this week, hey, growth is poised for a short-term rebound you're seeing people go back, but it's unclear if the next few years look like the past ten years. >> gunjan, thank you good to have you on. c conto contopoulos, is he a bernie guy? >> we don't talk politics. >> i try not to. >> he's not really -- >> huge, huge bernie -- he sends stuff to me, when i make him mad, which is frequently he hasn't done that in a while anyway, it's the rich bernstein, not the sam bernstein. thank you to you both. >> thank you. when we come back, chipotle shares are slightly higher we're going to tell you what the

company said about inflation next. later we'll talk with economist judy shelton and her take on the fed and why she thinks they'll soon need help on the flioinatn fight. a reminder you can watch us anytime on the cnbc app. we'll be right back.

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this morning after the company reported that sales missed estimates, but they did say the price hikes helped boost profits during the quarter on the conference call, ceo brian niccol said the price may scare away lower income consumer. >> the lower income consumer has pulled back from their purchase frequency. fortunately for chipotle, that's not the majority of our customers. the majority are the higher income household consumer. >> they would raise the price again in august to reflect the hikes in products. that shows you the difference between those who have pricing power and those who don't. disney's hughley facing ckshrom censorship we've got that story after the break.

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welcome back to "squawk box. twitter and elon musk set to appear in court in october over his termination to buy the company, but twitter is now proceeding as if the deal is still on the company's scheduled a shareholder vote on the deal for itself september 13th meeting. it's recommended the shareholders vote in favor of the actquiacquisition. it's fair to say some of this is technical. this is so when they go to court, they can say, we tried to close the deal, you're supposed to close the deal, you're not closing the deal. also pharma is settling

thousands of lawsuits in tits alleged role over the opioid crisis native american tribes they still have to sign off on this deal not enough governments signed on for it to take effect. it will offer no admission to wrongdoing. >> dope sick 2 how do you do a dope sick 2? do it from the teva perspective. i don't know the details, but how else do you do it? i don't know if michael keaton's available. >> i don't know if there's a second season. >> why you just heard -- >> i heard. >> you'd settle for $4 billion if there's not enough info or enough evidence to have the --

>> well, do you settle for $4.25 billion with an admission of no wrongdoing that could be the other sequel. >> no one would settle for $4 billion out of admission or denial of guilt. $4 billion that sort of guilt streaming service hulu is in hot water with democratic organizations who are accusing it of censorship after it rejected ads on abortion and guns sarah fisher tells us she can break some news. what's happening in. >> prior to today, hulu could only accept ads for candidates but moving forward, hulu will accept issue adds. it brings hulu to parity with the same policies that disney uses to govern its cable get works as well as espn plus the reason they're making this change they say, they told me is

because they've owned hulu, most of it now for a few years. i think what's happened in the last few days has made them realize that they need to move quickly on making these changes and communicating them, but it's a big change for hulu, andrew. if you think about t it, the political ads have moved so quickly into streaming >> before we get to eric, sarah, what about the possibility they say you know what, let's just get out of the political advertising business in how much is that business worth to them >> well, we can probably just figure out the math. so to date, $2.9 billion had been spent on the midterms i think you're going to see somewhere between 7 $7 billion d $8 billion about a fifth of that is going to go to ctv

hulu is one of the top players you're actually vying for a bucket of cash it could be upwards of $2 billion. it's a pretty significant amount of money and then the other thing is, andrew, why wouldn't you want to stay in it i know there have been some platforms, tiktok, twitter, that have gotten out completely, but if espn plus is in the political ad scheme. if disney accept it is for its other cable networks, what's the big risk for adding it to hunhulu they won't be accepting political ads for espn plus yet. but they do plan on evaluating interest policies over time. this is not new to disney trying to figure out how you manage political ads. i don't see why they think it's too risky to stay in >> good business or bad business to be in the political advertising arena? or what do you make of, if it's

a flip-flop or how we're going to describe what's happened here >> sarah may know more about this than i to but but my understanding is that there's perhaps going to be some editing in words they're going to allow people to use in my view, it's a calculated risk one of the things companies have learned, there is some danger in listening to a small cohort of advisers on madison avenue who have trouble understanding that there's a country in between they're going to have to be very, very careful about how deeply they wade into this, based on these advisors as well as a msmall cohort on twitter. there is a whole country of people who don't share these views. and who do you want as an adversary in the left or the

right? and it depends on the stance you take on particular issues. >> sayre what's the difference between advertising on hulu and advertising on some of the cable networks there's a bit of a difference in experience it's unclear whether we're talking about advertising running on hulu live which is much more akin to cable television, and the opportunity for the insertions into that experience versus what you're seeing on hulu, the classic service that we know in terms, and the pre-role and that experience >> my understanding is it's the same the ditcfference in how you get the service is internet, over the air. the same restrictions that would apply to local broadcasts do not apply to hulu. so the reason that you would be

innocen inincentivized to work with hulu, you can target ads better. if you're going to put an ad on cable, you can only target by age and gender if you are going to put an ad through streaming on hulu, you can target to suburban moms, viewers with pets. the third bucket is there's completely different roles for broadcasts, and disney owns the broadcast network abc as well as abc's local affiliates the way that broadcast rules are structured is that you didn't deny anything unless there's obscenities. they have a very strict guideline of things that they can't and can accept for example, they're not going to accept an ad that has font that's so tiny that the reader couldn't see it. that's typically the kinds of

edits they're coming back to clients with i used to sell political ads i'm telling you, it's not as nefarious as we don't like the way you're describing this to be they're going to be more technical. >> going back to what you said i used to think what you're saying, that madison avenue, wilshire boulevard and a mall cohort of twitterati to not speak. i'm not so sure anymore. i used to say every election, that's the only time we really get to poll actual america and americans. we'll have one in november, another one in 2024. arthur brooks always said the country is still center, maybe a little center right. i don't know that that's true. what are you saying in. >> what i'm saying is that progressives fight better with the media and do better at influencing media companies. >> what, what? >> i know it's shocking to you

where conservatives fight better is politically what you saw happening with disney is the response was not cultural, it was political because this is where republicans tend to have their authority. and so you have to look at where do you want your enemies to be i don't brelieve go woke go broke. for every company takes a woke position and blows itself up there are a dozen that don't take that position and do just fine >> eric and sara, we want to thank you. our parent company own as minority stake in hulu "squawk box" will be right back.

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fgood morning earnings season rolling on microsoft, google and or tech fap names in focus and the central bank set to hike rates again. we'll tell what you to expect from j. powell and company the second hour of "squawk box" f begins right now

welcome back to "squawk box" right here on cnbc i'm andrew ross sorkin along with becky quick and joe kernen. we have green on the screen. l looks like we're going to open higher on the back of some better than expected earnings. nasdaq up about 180 points we're also going to hear from the federal reserve later today and that may move it around in all sorts of ways. we're going to get the five-year, 2.58 and oil this morning, you can buy a barrel of oil crude, $95.95. we'll

we'll we'll show you where bitcoin stands microsoft missed estimates microsoft saw its slowest earnings growth if n two years. economic uncertainty is affecting advertisers. we're going to have much more on these names with rich greenfield in the next half hour. shares of chipotle are higher this morning the restaurant owner reported better than expected earnings. many traders have penciled in a 75-point basis hike this afternoon which may or may not

be enough for the markets. let's talk about this. expectations for a 75-point basis hike, is that something that will satisfy the markets? not take them by surprise in what are you expecting >> well, we haven't gotten the r r leak from the wall street journal this time around i think it's appropriate actually one thing that chair powell fe needs to manage is a likely growing rift among the fed i think 75 basis points is likely what they'll agree upon and where they hwill go.

we've seen from earnings, companies like at&t, weber and snap look at slowing consumers in the united states, which is the big pillar upholding growth here chipotle, you mention ed earlier again about how can we continue to raise prices in the context of a potentially slowing economy. that is the dynamic that every company and in fact the fed is dealing with in the committee itself there are some who want to emphasize one versus the other >> if you really think about it, what you're hearing from the lower end of people who are earning money is that they are tapped inflation is catching them, especially if you're a seniorive will senior living on a fixed income.

if you're the fed you have to think what we have to do is stop inflation. >> there are no good answers here the reality is the fed was far behind the curve and isstuck to their version for far it too long the aircraft carrier they're trying to pull a soft landing on is in very rough seas and recession is a more likely probability. ultimately, the fed has a track record of continuing to raise until there really is a clear slow down, and i expect that to occur, although after this meeting at a slower pace f >> let's talk about earnings again. alphabet and microsoft alphabet didn't get hit as hard by the advertising slow down as snap and twitter had earlier in the week does that tell you the market has priced in a lot of this, or

now th do you think this is a temporary offset >> the idea that we're mott going to have a choppier market when really bellwether names, you might call them the utilities of tech report misses, it's going to be tougher the market also discounted a tough quarter. microsoft, it's been a long time since i've seen a miss from microsoft. the idea that these names can sustainably rally before we get the last or the worst of the earnings news i think is going to be a tough sell >> where do you see opportunities? what do you like? >> actually, we're looking at some financials, not just in the united states but elsewhere, names like nm group in europe.

those names we brieelieve are w reserved and fixed income we see a lot of opportunity among cream of the crop corporates. you're seeing yields well over double what they were a year ago. and in the environment where inflation will eventually slow, those are name weiss we think w add to portfolios for years to come >> are you talking treasuries or corporate? >> all of the above. the ten-year at 280 is going to make anyone's quarter or a year or anything is a little bit of a tough sell add on that treasuries here can actually provide ballast what you're seeing in the last couple months is treasuries are

able to provide what they used to provide, which is some balance if a portfolio and some small level of income, but ultimately the opportunities are in things like amount a.d.s. and corporates >> what do you stay away from at this point, jason >> i've been doing for a little while and it reminds me of 2001. it assumes that the top peak price has provided any information to you i think investors shouldn't be sucked into things that have gone down 70%, 80% on the idea that they can't go down any further. that's a place that can you see real pain. >> thank you for your time today. >> it's a pleasure you're going to have to pay more to get into the meta verse.

plus quarterly results coming from dow component boeing. before we about go to break get check on the markets "squawk box" will be right back. carl, say hi to nina, our schwab financial consultant. hm... i know how difficult these calls can be. not with schwab. nina made it easier to set up our financial plan. we can check in on it anytime. it changes when our goals change. planning can't be that easy. actually, it can be, carl. look forward to planning with schwab. schwab! ♪♪

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saving you up to $500 a year. and it's only available to comcast business internet customers. so boost your bottom line by switching today. comcast business. powering possibilities. welcome back to "squawk box. getting into the meta verse is going to cost you a bit more meta raising the price of its quest to virtual augmented

headset. you're going to have to pay close to $500 for the 256 g gigabyte model a lot of folks waiting to cement meantime, meta will report quarterly results after the bell they expect to earn $2.59 per ha share. some looking at this as the first turn of negative revenue we'll see. meaning they'll make less this quarter than previous quarters k >> so lower revenue from lower revenue. >> negative growth

from th >> that's the word i was looking for, negative growth >> twitter and e-ron musk are set to appear in court in october. what do we know about miami twitter is proceeding as if the deal is still on what do we know? >> we know nothing he says it's not true. we say the wall treat journal is standing by the tor story >> wall street journal, are they going to write some crap so you've moved on only i'm still focussed. okay >> i wasn't bringing it up

>> i know. maybe you should we try to have viewers watch, not, not watch fro >> so what do you think you love water cooler stuff. >> who do you believe? >> i brelieve him >> i thought the tryst was miami. >> yes, but she also had a birthday party in new york city. he seemed to fly in for. >> seen her a couple of times in six months bri fwl i don't know. i want to brief him. b believe him

but the journal has standards. >> he's all over the place, like johnny appleseed >> we got to go to break immediately. i don't know what's going none this anymore, joe. >> come on, savannah coming up. a check on the housing and mortgage market and another sock stock to watch paypal lament management has built the stake in the company the intentions are not known what are they up to is t they cut their profit outlook in april. payment volume could take a hit. and the war in the ukraine "squawk box" coming right back >> a lot of trees in kentucky. a lot of them. time now for today's aflac

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what year did google change ilgts name to alphabet the answer, 2015 the latest read on the housing and mortgage market released a horizonshort time ago let's get to diana olic. the rates have gone up >> and mortgage demand, they dropped off a little bit last week, but mortgage demand dropped again, even though rates dropped a tiny bit you take a look at this. rates came down. the average rate on the 30-year fixed decreased to 5.74% from 5.82%. that's loans with 20%. still, applications to buy a home fell 1% for the week but were 18% lower than the same week a year ago. more supply is coming onto the market, but prices and rates and high inflation is all weakening

consumer demand and confidence applications to refinance a home loan fell another 4% they were 83% lower than a the same week a year ago most borrowers have already refinanced to far lower rates than even exist today. anyone watching mortgage rates is tuning in to the fed today while mortgage rates don't follow the fed fund rates they loosely follow the ten-year treasury yield they will respond to any direction from the fed chair on monetary policy, and then of course the state of the economy. >> then we've got today. don't get too settled in what we're thinking >> never >> never but i just wonder if it's starting to bite the higher rates. then what do we expect for housing? so we're in an upward trend? >> yeah. >> go ahead. >> we're seeing it already in the homebuilder reportings

we had taylor morrison report. they're showing almost double the cancellation rates big drops in net new orders. it's really hitting the builders especially hard. i think on the existing home market you still have this very high demand of low supply. that's going to keep prices higher, but it's really the builders where we're watching. the stocks have already been hit, but we're really starting to see it in the actual number of sales and the cancellation rate on these builders doubling. >> okay, that's, part of the -- >> yeah, we have this national housing problem, where there's not enough to keep up with demand, and then the builders aren't building. people complain about it, but if you have your cancellation rate jumping you understand why they're slowing down >> all right, thanks, diana. all right, let's take a look at some stocks on the move this morning. first up, hilton worldwide

shares are rallying after they reported better than expected earnings and travel demand continues to rebound if you look at the shares, they're up by 4.8% shares of garmin are sliding this the premarket though, after garmin reported better than expected profit but said that sales were below what the street was expecting. primarily because of underperformance in its fitness device segment >> still to come, we're going to dig through some of the big tech earnings plus, katie stockton's going to join us on what she's seeing in the technicals and the charts and how markets are set up for the second half of the year. stay tunes "squawk box" coming right back after this i'm here with these low handicap golfers to put the maxfli tour balls to the test. ♪ ♪ nice shot. and it sat down nicely, huh? how did it feel compared to the ball you play?

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welcome back to "squawk box. shares of alphabet are rising, posting earnings of $1.21. missing on youtube ad revenue.

overall, ad revenue's growth slowed to 12%, but that did beat street expectations. and then there's microsoft shares are also higher despite its first earnings miss in several years. the company posted its, well, i hunt shouldn't say but. here's why i think the markets have moved the way they have the conference calls, boasting at least talking about scoring lucrative contracts for azure, icloud -- icloud's apple joining us rich, what do you make of these earnings, my

friend in. friend >> it shows what we're expecting. clearly the economy is slowing e-co e-com is slowing that's impacting a lot of the online companies seeing youtube slow down we've seen youtube slow from 25% growth now down to sub 5% growth you know, obviously spotify, we saw snapchat basically say no growth i don't fknow what meta's going to report. we are definitely seeing a slow down it hasn't impacted tv in a traditional tv way, but the big sign is thursday night when roku reports and what's happening in the tv ad market that's the bridge between digital and linear, and i think everyone is expecting a slowdown, a meaningful slowdown. >> do you look at these

valuations and say this makes sense? do you want to own these do you think there's a lot more to go? >> it's hard not to expect things to get worse given where we are and the number. when you hear companies like google freezing hiring and spotify this morning slowing, i mean, everyone is worried, not because of where we are right now, bus i think that lack of visibility has really changed people's perspective, and they're starting to cut projects that are not critical. snapchat talked about that last week, cutting non-core projects. one took a writeoff on their device to make it easier to navigate spotify in the car. this is the challenge that the entire sector is so dependent on advertising and, you know, many cases subscriber growth, and both of those things are more challenging in a tougher economy. there's just no way around it.

i don't know how deep and dark a recession we're going to be in, but i think that's the challenge. of all the companies that have reported so far, the one that has stood out is spotify >> if you're only going to own one or two of these, what would you own at these prices in. prices >> i would own spotify it is the most interesting name. this thing has been obliterated, and had is the stock, they have very little competition. they dominate the category, advertising organically grew 17%. yes, it's a low base, but they are growing faster than peers. the problem that a lot of these other companies that you're seeing with youtube, obviously snapchat, tiktok is a major problem. we'll see what meta says later tonight, but tiktok seems to be

a very large problem in an ad market that's not growing. you've got tiktok taking big share, and it's where advertisers want to be and it's just a problem for all of these companies, and i don't see a way around it until the overall ad market is reinrig rated. and to your point i don't know when that is >> do you like microsoft when is this act vision deal going to take place? how do you think that changes the dynamic? they have this new partnership with netflix in the offing there's been speculation, do you think there's a day that microsoft would buy netflix? >> you think about the pieces -- >> can you hold that thought, rich >> apologies for asking the question we're going to press pause we have earnings that are coming across >> we've been planning to get going right when it hits let's get to phil lebeau with the numbers. >> this is a miss on the top and bottom line intefrom boeing, a

of 37 cents a share. that is more than what the street was expecting at a rloss of 14 cents a share. why the miss from boeing in the company says a couple things volumes in general on the defense side of the business lower than expected and two charges in the defense business, one for the mq-25 unmanned refueler and the star liner, those total $240 million there are some positives within this quarter for boeing, the first quarter without an abnormal production charge for the 737 max, operating cash flow, positive $81 million. the street was expecting negative operating cash flow the company has increased 737 max production up to 31 per month. but, when you talk to dave calhoun, and we'll be talking to him in a little bit. the supply chain remains

challenging. that's one of the issues facing the company in the second half of the year. the backlog by the way, 372 billion, including over 342 aircraft, coming up on "squawk on the street" we'll be talk being with the ceo of boeing about these results, this is a miss on the top and bottom line for boeing with a loss of 37 cents per share compared to the expectation of 14 cents per share. >> i'll say there's some positives in there stock's up now 4%. when i hear boeing -- >> the cash flow numbers, joe. they're better than expected >> things take so long anyway. you know, some companies, if there's a three-month delay, it's the end of the world. how long does it take to build one of those unbelievable machines, phil did they mention that there's no problem? >> well, the issue, joe, becomes

the tier two and tier three suppliers, a lot of them are struggling with manpower, skilled labor, a real issue within manufacturing and the second issue is not, the chain is not consistent. and that means either it's raw materials or it's components it's not consistent. anywhere in the manufacturing complex right now. and especially boeing is noticing that, especially when they deal with their suppliers they're still able to build 31 maxes per month, but there may be some months where it's a little more than 31, or a little fewer than 31. overall they're going to net out at 31 per month for the remainder of the year. when i've brought it up to people, hey, do you think you can increase production? not right now. that's just not the way the supply chain is. maybe that changes it is a tenuous supply chain

>> we have the cfo of ryanair on yesterday. he and the ceo of ryanair have made pretty harsh comments in terms of demanding ha that theye the planes they ordered before christmas. he says there needs to be a change in management from seattle. is this just talk from someone trying to jockey themselves to the stop? >> they are unafraid of basically putting their finger in the chest of boeing and saying "we expect this." and they have come out as they did with you, and michael o'leary has said over the last couple days, look, we expect them to deliver the number of maxes that they indicated they will deliver, and he also intimated that perhaps it might be an issue on boeing's end and says that's inexplicable and unacceptable that's part of the relationship

between boeing and ryanair, and it's been that way for the last couple of years, we'll talk to them about that. >> we'll try get back to rich greenfield if we can are you still with us? >> i am. >> i apologize for having to interrupt this question. i was interrupting your answer about what you think the future of microsoft looks like given the activision piece and netflix. maybe microsoft ends up owning it >> well, just think about this microsoft was nowhere in connected tv talk about kcannes, no one was talking microsoft. now microsoft has exclusive control over the next coveted inventory in the connected tv world. you're not going to go to roku for it you're going to go to microsoft. so microsoft all of a sudden

leaps, all the data signs and all the ai underlying microsoft, they can apply that to advertising at netflix, so they've become a major player in the tv ad space, which becomes very important to the future of net fligs. t now all of a sudden they're connected more closely with x box and activision i don't think's crazy to think about longer term, could microsoft and netflix be a fit absolutely there's nothing wrong with that concept over time. many years have to pass in between. microsoft is going to be a massive ad player. for years we've been talking about amazon now tiktok, now you're going to talk about microsoft over the next few years as the new

company to watch in the ad market >> totally we're in 100% agreement there. separately, we'll hear from meta rater today. what do you think we'll hear a lot of people upset with what's happening on instagram. >> look, you've got so many things going on. you're basically chasing tiktok. this whole campaign is because facebook knows the future of facebook is not traditional feed on instagram 's it's not photos they basically need to pivot the entire company people still prefer tiktok it is crushing it. engagement is well over an hour per day per user tiktok is growing at an incredible rate and taking share. i'm more worried about what's happening in the ad space.

if you've had tiktok growing at 2x maybe they're not going 3x because of the ad market if tiktok is growing that fast, meaning billions of dollars of incremental revenue. you've got to believe a chunk of that is coming out of youtube and meta as well that's going to be the thing to watch in a slowing ad market, what's happening there >> is there any part of you that looks at $163 a share right now and says you know what actually, given how much that's come down, that's a value >> it's a cheap stock. the question is it comes down to usage. if the engagement of meta is falling. if time spent is dropping and shifting to tiktok then 163 is cheap. that's the major thick ng invess

should be looking at >> we talk about twitter every day and e-lon musk >> 54.20 is what elon musk is paying >> you think the judge is going to say congratulations, mr. musk, you're the proud owner of twitter? >> i do. >> what is the unaffected price of twitter today >> meaning no merger >> no merger if it just went away, and if a judge had to actually determine, look, we're not going to sell it to you, you don't want it, they don't want to sell it to you anymore. the whole thing is a bad idea, but you're going to pay the difference between what you agreed to pay and the unaffected price, what if would otherwise be worth today, you would pay what >> let's just say $20 to $25 given where the market is today so you're probably paying. >> half. >> correct so if you're going to pay half

as a penalty, you might as well buy the whole thing. it doesn't make any sense. >> fair enough >> that's an arbitrage play. >> i think the judge is going to say, you signed the contract your excuse for bots is not part of the contract. you're making this up. you have to close at 54.20 >> if you were twitter's board, what is a reasonable discount that would you take for certainty at this point? >> i would take 10% and call it a day. >> 10%, but more than that, you think you wouldn't take it >> read the actual merger agreement and show me where the word "bots" is shown do a word search and find me the word >> we're in violent agreement. i think this deal is about as solid as they come i just think if you get tied nun court for many, many years, which i think is what's possible here, there is going to be a time value of money thing. >> but they have a fiduciary

responsibility to the shareholders to say why didn't you take it. >> if you have to wait three years to get the money and the whole company is potentially destroyed in the process, and i think unfortunately, that's what elon musk is gambling on here to get the price down i don't think 10% is enough for him either >> he wanted a trial in february, and the trial is now in mid october so he seems to be losing piece by piece here. we'll we'll see, but i don't think this is a multi-year case. >> we'll see, thanks rich. when we come back, what the charts are telling us about names like microsoft, meta and amazon we'll talk technicals with katie stockton right now as we head to a break, let's take a look at the premarket winners and losers in the s&p 500.

c chipotle up 9% stick around been meaning to ask you, carl. does your firm offer personalized index investing? hmm? so i can remove a stock that doesn't align with my goals. i'm a broker, not a barista. what about managing gains and losses to be more tax efficient? not a wizard either. looks like schwab personalized indexing can. schwaaab! learn more about personalized indexing at schwab today.

welcome back to "squawk box," everybody. let's take a look at the futures this morning the dow indicated up by about 145 points s&p up by 33, the nasdaq up by

173. this comes despite alphabet, microsoft and boeing missing estimates. and gasoline prices continue to tick lower. the national average fell to $4.30. down 17 cents from a week ago. crude $96 now. we have not talked about this the entire show we're watching shares of coin base cathie woods dropping it for the first time this year and ark sold shares yesterday.

ark was the third biggest shareholder of coin base as of the end of june. you're looking at that stock now trading at 55.27, and it's just clear, i think, that you're going to see more and more investigations that if they're not into coin base itself in and around coin base and in and around these companies, crypto companies. >> the question is, were they allowing investors to sell to other securities, and as a result, would they have to go ahead. >> and are there going to be fines, how big would the fines be what happens lots of questions. >> i don't have any, but if i did have some that i bought at3

wouldn't you love it at 55 >> alice in wind wonderland, my friend my question is, at $11 billion, $12 billion, which is what the market cap is today, if you're a big financial player out there, wouldn't you want to call mr. armstrong and say you know what? you actually have an interesting business, we want to be in the crypto business longer term, i'll pay you double. pay you $20 billion. >> nice. >> right would you take that >> i would unless you listen to bill gates and charlie. >> we will listen to katie stockton, because she has been

so right katie stockton's going to join us to talk technicals and charts, what she's seeing on the earnings front and what may happen soon. and judy shelton will be our special guest. we will talk about today's fed decision in their attempt to tamp down inflation. e ev one to hold back. you don't want to miss this conversation "squawk box" rolling on after this

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earnings joining us now with more on the setups around these earnings is katie stockton katie, we usually talk more macro, obviously, but unless something's changed thi in your outlook, it's episodic so i expect people to be up to date in what you're telling us i want to talk tech and the reaction that we're seeing so far. i mean, obviously, snap is one thing, but if you back that out and look at some of these major tech player, they're not going down given the results and the forecast that they just posted what does that tell you. >> right, so you're referring to microsoft and their reactions being positive this morning. i think if you look at their chart, they're really range bound. they're in consolidation phases. and this morning, feds do not take them out of those consolidation phases

it's better than the alternative, and it's always important to watch around earnings, but none are be being broken in any direction as of yet. and all eyes are really rightfully on apple. and apple is pretty overbought coming into its earnings report. as a technician we don't have any visibility into what that earnings report will look like it's come into earnings pretty hot. and as of yesterday with the decline being two days in duration, we saw deterioration and with meta in response to the snap earnings, i think that's a morn t important thing to mate note of. what we we've seen doesn't giveu

a whole lot of confidence. >> can we maybe broaden out to discuss a little what's the ten-year look like now, considering it's fed day, and you could explain gold and the dollar both to me, and give me an outlook for both >> i think it's really neutral situation for all of the above here in the near term. or in the coming weeks and we say that based on the proximity of levels for ten-year treasury yields, there is some support, roughly 272 below that about 259 there is some support not too far below current levels and we've seen a significant loss of upside momentum within their long-term uptrend. but it's usually right to assume that that will resume on the backside of a consolidation phase which serves to absorb overbought conditions. we're expecting somewhat of the

same from the dollar, looking at the dollar index, the very decisive long upturn there some consolidation within that framework. we're seeing that more as a cause to refresh the uptrend as opposed to the start of a big reversal gold has been out of favor as you know, negative momentum, and you saw it this week, exacerbating the move on the gold miners down side. we think it's very overdown. and gold is 16.75 per ounce. we looking for the bleed to stop and i think will take some time for them to find their footing and put up a good advance. >> for the s&p, we're still new lows a lot of people were expecting that, and you've note td maybe that could take bitcoin down into the teens again and maybe

lower. if it turns out that's not going to happen for argument sake, when would you know in what would you need to see to say that's not in the cards? >> i think we'll see an intermediate term low in the coming weeks i think it will happen after a downdraft from current levels with volatility likely to pick up, looking at the vix as measure of that, and yet that we think will become a trading opportunity for those that are willing to take counter trend positions which are higher risk by their nature, but we wouldn't be convinced that's the end of this bear market cycle that would require not just improvement in our indicators but also time. these bear market cycles tend to end not in a dramatic v-bottom fashion with major selling climax, but a basing phase where you see accumulation

you see die vergences. so there's not one event that would suggest that seveverythini in the clear if you will but maybe a series of events >> it might not be a 38, 39 vix. the sound of a flush being, blod on the street low. is that for an intermiediate bounce or even for a long-term ban bounce in. >> it's more characteristic of a corrective trend think about the covid low. it was a bull market correction. i think we can all agree that this is something different than that the indicators look unfortunately as bad as they did in 2008. it's not to say that we have to see that kind of prolonged down move but usually bear market cycles are longer in duration than wha

we've already seen so we're assuming that have an intermediate term that could be significant sometime in q4 that we'll see the downtrend resume and that perhaps takes news 2023, and that's where we feel like woe have better probabilities of seeing this bear market cycle end. >> very clear. thanks, katie. >> of course coming up, it is fed day, we're going to get you up to date on everything you need to know ahead of the rate decision. what's going to happen later today as we head to a quick break though, take a look at futures this morning all of this may shift and change throughout the day when we hear from the fed right now it looks like the tou would open up higher, nasdaq up about 175 points the s&p up about 33 points

♪♪ take the world by cloud. accenture let there be change. good morning. >> welcome to the heart of earnings season. new numbers from boeing. and we're still digesting numbers from alphabet. and it's fed day investors expecting a 75-point

basis hike but could officials go a full 100? and judy shelton is going to join us for a deep dive into all of it. the final hour of "squawk box" begins right now good morning, and welcome to "squawk box" here on cnbc, live from the nasdaq market site in times square i'm joe kernen along with becky quick and andrew ross sorkin july's been mostly higher in terms of the averages. three trading days left in july. the dow and s&p are on pace for the best month since last december the nasdaq's up around 5% for july could see its first positive month in four and best month since last october i don't know if any of us

thought 27 was in the cards at least this soon. >> i didn't. >> 27 is crazy, a little unexpected, but maybe not with the fed already having moved into tightening mode >> treasury yield. >> 27. >> maybe it's frozen >> 28. >> maybe they at any didn't wano bring it up. crypto currency as we were just talking with katie stockton. considering we have the fed decision and we've got the, you know, earnings of boeing and microsoft and alphabet, lot of input and the results of that input is people putting some money to work in different asset classes. really across the board, except for gold, which is up a little, but just referencing that as well >> as joe mentioned, it is another busy morning for

corporate earnings boeing reporting a larger than expected quarterly loss and revenue miss two potential reasons, boeing posted positive operating cash flow, and it did not see any charges relate to the 737 max jet production we will dig deeper into these numbers and talk about the challenges this company is facing stock is up by about 2%. later, dave calhoun will be joining us for an interview you don't want to miss and spotify reporting a larger than expected quarterly loss the company saw a 14% jump in paying subscribers for its premium service translating into a gain of 6% for the stock another gainer is hotel giant hilton the company beat on the top and bottom line estimates for the

second quarter and raised its full-year forecast as travel continues to rebound from the depths of the pandemic that stock up by about 7.5%. the fed's latest policy meeting wraps up today central bankers widely expected to execute another interest rate hike of 75 basis points is what's expected. steve liesman joins us now i know these are the days that get you all excited, steve and then we're going to hear about, you know, see what happens with all the analysis surrounding. >> yeah. >> what we hear. >> be still my rate-hiking heart here, joe. the fed is going to hike by 75 basis points today, that's the consensus. and fed chair j. powell is going to face questions about the outlook at the press conference that he's probably not ready or able to answer at this point hows to policy react to potential recession?

and does the market have 2023 rate cuts right? the futures market, priced for 75 today and another full percentage point by year end but after peaking at 340 in january, fairly aggressive rate cuts are built in that would bring it to 3% he faces what i call the ackman quandary he said the more the market believes that the fed will reverse course, the less effective the rates will be in moderation and the more the fed will have to raise rates can you see how that easing is happening in the real world. you guys were just talking about it lack look at the ten-year. it's come down 281, 70 basis points of easing in the economy. a sign that investors believe

the receinflation will abate the lack of any kind of framework for current policy means the fed is in a meeting-to-meeting, data-to data regime. so he's probably going to have to tap dance >> a lot of people are saying there are issues other than bill ackman but that's assuming that future interest rate hikes are what we need that it would work on inflation. so just saying that we may not do it. if i knew for sure that they were going up 500 basis points, i don't know if i would say okay that is

okay, that will cure inflation i don't know that that's the remedy i wouldn't want to be set in stone. i'd still want to be data dependent. i've been arguing that the no stop and go from the '70s might not be, you know, might not be that smart this time around. maybe it is. >> yeah, we had one of our respondents to the cnbc survey respond to that. in the '70s, inflation rate came down, the federal reserve eased again and inflation came roaring back understanding the dynamic is really important here. i think that what the fed, i keep talking to people, what long-term framework would you put in place, and they don't really have a good solution. so the idea that meeting to meeting, data point to data point is probably the best way to go, the problem the fed's always going to be behind here are you going to have lagging inflation data you make policy. there really isn't a way to do

that unless you say, look, here's my forecast, here's my best guess, i'm going to make policy on it the trouble is the reason why powell may be reluctant do that, he was so burned with that transitory idea. the past is really haunting him right now. >> i don't think you've ever been a die-hard proponent of m 2 or too many dollars chasing too few goods. there's energy-related issue, supply-related issues, pandemic-related issue, back-to-work-related issue none of those have anything to do with just printing too much money. if we don't have -- maybe we do. maybe we've built it up since the financial crisis maybe we have stayed way too long for way too long and it's built into the system, then i don't know what you do but maybe not. maybe there's more extenuating factors this time than in the

'70s >> i feel like i've made some progress to have you guys talking about m2 so much >> when i was a stockbroker, every friday, that's what we waited for if the nationals are town, worried about an asteroid hitting the earth, but then they rallied after m2 >> the problem with that m2 is it doesn't work. but the broader issue that you're talking about is kind of important, which is whatever, you could have this idea whatever the reason for higher oil prices that the fed needs to reduce the amount of money in the economy to not finance or fund or otherwise monetaryize that increase in oil prices, and that really comes to the question of how permanent or temporary the price is i saw you had the gas prices down 17 cents into the $4.20

area is that right and so -- go ahead, joe. >> unless you want to not necessarily raise everyone's costs across the board including oil producer, and you want to hopefully generate more supply. >> what about in the housing market, right? where hunyou had a terrible eff on housing, and there is widespread agreement that the problem in the country is the lack of housing. so here you are raising the price of something that you need more supply. >> that's the whole problem of trying to address everything through demand >> i've got another story i want to do later this week. i can give ah littlyou a littlef it we asked people if the federal government should be involved. there's a good discussion to be had about the extent to which the federal government could be doing more to help on inflation.

>> calm down . >> it's huge big. >> your blood pressure's probably racing. big day. let's get back to the markets and the big earnings joining us, a cnbc contributor good morning to you. i don't know if it's a tale of two cities you want to talk microsoft, beauing? s some looks good, some looks bad, what are you thinking about? >> let's start with boeing that number obviously the headline miss and bottom line miss as well we don't really care about that. we care about cash flow. free cash flow was negative 180 million, but the expectations were 900 million negative. so this was much better than expected and better than expected that they didn't have to take another charge for the

787 max or 737 or the regular airline. that, all of it is very positive in kind of making progress, if you will so the backlog of 372 billion is huge 4200 planes. this is on its way, it's still down this year, quite a bit the last couple year, but i think it can be bought. i think the next catalyst is going to get the 787 back into production and then delivered, and then the 737 max certified for china. so that's boeing you want to go to google you want to go to microsoft? >> let's do it the thing that i can't figure out, though, are we now in a situation with all of these stocks, and you're seeing them do, many of them do a lot better is it just because the expectations were so bad is that the issue? >> well, yeah, i mean, look, i mean, alphabet is down 27% microsoft's down 25%

boeing's down 20%. beau something a turnaround story. they need to make progress and have no charges and have good cash flow. alphabet actually, i thought the numbers were pretty good and then when you go through all the details, actually, the ebita is higher by 4% this year and 3% next year. i get why the stock is up. there are still a lot of uncertainties, the global macro, tough comparisons and travel surge is 10% travel is 10% of paid surge. and so we have to keep an eye on that but guess what the ad revenue number was 5% better than expected better than feared so yeah, it is a sigh of relief. are we in the all clear? i don't think so >> can you explain theiis to me we saw the visa numbers. it would suggest the consumer's holding up just fine

i don't see how that could be the case if you look at the walmart numbers and the advertisers about spending money to advertise >> the consumer has changed what they're buying, right? >> that's true >> we've gone from goods to services, right? think about this google travel was fine let's look at what hilton just said they just beat, and wyndham resorts also beat and raised people are going out and doing things do you think it's sustainable? that's the biggest question. >> what do you think >> i do think they will. there's a lot of pent-up demand. i don't think the consumer is in such dire straits. i think there are pockets of the consumer, the low end, that are seeing a real challenging time i think the high end is doing okay i think walmart and target just messed up quite frankly. they didn't see the trend going from goods to services, right? brian cornell said, they're not

buying apparel, but they're buying suntan lotion and luggage. so they have so much inventory on the goods side of things. and they'll get through it. and by the way, it's really great that they'll mark down things for the consumer, and the consumer will buy things at a lower price. >> as a value investor, we have meta coming up this afternoon, and meta stock has, i don't want to say collapsed, but practically. do you look at that and say this is kind of a value play, i like it or to you say oh, my goodness, it's a falling knife >> well >> well t i, it is sort of a fan knife. they're buying back their stock. but it's all going to come back to engagement, and we'll have to see time hours spent, and there's a lot of competition we know but isn't that already factored into the valuation

that's the way i view it >> but you would own it? or you wouldn't pre-earnings this afternoon. >> i do own it >> you own it. >> i do own it it's been painful. d i do own it. i'm long-time believe. they have whatsapp there's a lot of places they can grow they've got to get out of this pinch in a competitive environment. >> thanks. coming up we are counting down to the federal reserve's interest rate decision it comes at 2:00 p.m. eastern time it will be the big moment of the day. but m in just a little bit we wl speak with judy shelton about the main questions officials are wrestling with you do not want to miss the exclusive interview with the ceo of honeywell stay tuned you're watching squawk rht he ocn ren bcig

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the nord stream 1 pipeline by half of already-lowered totals that would take them to 20% total capacity, down from the 40% gazprom has been letting through since just last week they are blaming a turbine for the production but germany is calling it a lie take a look at where the dutch natural gas contract is. you can see that it has spiked sharply, up another 5% this morning. 5.2% after jumping in recent weeks. that is equal to $60 per u.s. natural gas contract in the united states we've been paying high aer rates, too. there you have it, we paid more than we have since 2008. but there you have it. coming up, insight and perhaps the biggest earnings report and a preview of some of

tonight's key results, like ford then economist, judy shelton will join us ahead of this afternoon's big interest rate decision most of the street expecting the fed to hike rates by another 75 basis points "squawk box" will be right back.

earnings in the planes,

trains and automobiles segment today. boeing was out a horizoshort tio ford is due out after the bell phil lebeau joins us >> you never like to say, well, don't pay attention to the top and bottom line miss or the fact that there are some things within the quarter at that are not the best, especially when you have a couple of charges if the defense side of the business but the reason the stock is higher is because of the cash flow numbers they had positive operating cash flow i think the treastreet was expeg negative 3 million it was negative 181 million in free cash flow the street was expecting negative 900 million so well below what the street was expecting. you see the commercial volumes are increasing lots to talk about with dave

calhoun. that is an exclusive coming up in about 45 minutes on "squawk on the street. we'll talk about the quarter, the supply chain challenges, when's happening in the defense business you have the workers saying they're going on strike monday lots to talk about with phil calhoun. >> phil, i didn't know about that is c that, the potential strike coming up on monday. add that, what are they going to do >> it depends on whether or not the machinists hold out and this becomes a long strike that drags on then it can inflict real damage. it's too early to know at this point. they're this negotiations. they could avert this. there may not be a strike on monday if there is one, they've gone through this before. it's just a matter of how long

will it last if there is one >> let's pivot to ford second quarter results are due out. what should we be on the lookout for? >> obviously, people are going to be roolooking at the top and bottom line. the revenue is going to be up about 42%, or at least that's the expectation. don't be surprised if they exceed expectations. the thing people are going to be focussed on, what's happening with the f-150 lightning moist most of the vehicles are gasoline-powered vehicles, but the future is all about electric they have bet on the f-150 lightning, ramping up ev volumes. are they still on target to hit what they expect to have by the end of next year, which is production at a run rate of

600,000 vehicles and 2 million vehicles by 2026 these are ambitious targets, and that's going to be the focus when they report their numbers after the bell >> phil, thanks. we'll see you a little later when we come back, we have breaking economic data a new read on durable goods. stay tuned, are you watching "squawk box," and this is cnbc live from the nasdaq market site in times square.

welcome back to "squawk box" right here on cnbc it is time for some new durable goods data rick santelli is standing by in chicago. take it away >> yes, actually, we have durable goods, some trade numbers. the june advance trade, we don't cover it all the time, because it's an advance number, but at 98.2 billion, of course with a minus sign t, it is well off its mark of $125 billion deficit on retail, it's a june number, wholesale inventories up 1.9

that's about .4 better than expected both these sequentially are gains with respect to the rear view mirror. and finally, on the june preliminary read on durable goods, expecting down .4, it's up 1.9 that's better than expected. so some very good news there and of course the rest of the data sets that are embedded in this haven't quite shown up yet. i do see capital orders, the shipments, non-defense aircraft up double expectations, up .7. up .5 on one of my favorites non-defense ex-air, and that really has been trending quite well, especially on a year over year basis, a proxy for capital spending and on the durable goods order, strip out transportation and it drops

dramatically to up only .3 .3 is still better than expectations but it shows the big effects of transportation with expect to boosting the headline durable goods number. we see interest rates were actually lower, the two-year note now is just a smidge in negative price territory with a slightly higher yield, and that really has been the dynamic, becky, the inverted yield curve. whether it's twos to tens. and of course the big issue today is going to be that press conference, and i know you have dr. judy shelton on in a little bit. she's been all over paying interest on reserves, and of course just generally servicing the debt all of those are going to get quite costly, and i think that's a very interesting area to pay attention to as we get ready to watch the federal reserve hike interest rates at 2:00 eastern

becky, back to you >> big day, rick, back to you. steve liesman joins us now he has more on this. looking at these numbers, what does it tell you about the picture of the economy right now? pretty good one. >> it's hard to think that business is really freaked out at the moment for the outlook for the economy when new orders for durable goods are up by 1.9%, and hats off to my colleague and associate in chicago, by zeroing in on that business investment proxy. new orders pour for capital goo ex-aircraft. these are not inflation-adjusted numbers. it's probably about flat when you factor in inflation on that number but they're not giving it up here, becky, and that's an important aspect to what may or may not be happening in the economy. the first quarter gdp number, despite being negative because of vincinventories and trade wa

positive with shipments up, let me get that shipments number, probably a negative number when you factor in inflation of 0.3%, but they're not giving it up and yesterday we had a surprise in the richmond fed index. i remember an economist argued to me that it does better tracking the national economy than the philly fed does that was a surprise to me. so we have cross currents in the economy. this concern about the recession, but also an industry that's trying to catch up from where it was from the pandemic so these two forces are playing off each other it seems the forces of computers are interesting up give and what microsoft said you can't just count the economy down right here. there are negative forces out there. there's a slowdown happening, but there's also catchup and the rebound from the pandemic

happening at the same time in her latest op ed, jude ejudey shelton writes that the fed may soon need the treasury's help. judy joins us this morning she's a senior fellow. she's the author of "money meltdown." and i actually, rick brought it up we just talked about it. i was going to talk in more general terms about what's happening today, but it's out of the bag. let's, it's a little bit arcane. it is interesting, because as rates go up the fed is going to have to pay more on the interest rate that it pays out. they've had money up to this point. that's soon going to go away, and they're actually going to pay banks up, really higher than

market rate so that they don't lend money to other people not only does it hurt the supply side of money getting out to where it's needed, but congress may have to or i'm sorry, the treasury may have to step in and cover the bill for the fed to do this for foreign banks as well >> that's correct. and i think it's important for the american people to understand how the fed actually operates that's why in that op ed piece in the journal, i'm encouraging the financial journalists who will pose questions to chairman powell, to ask specifically about these mechanics. i have long been against paying interest on reserves these are cash accounts that banks keep at the fed. they are sterile accounts. they are invested in nothing they are doing nothing to support productive economic activity and now we're talking about by

the end of the year paying up to 3.5% interest on these risk-free accounts and then you add to that the rehold market. and they also are paying in that case banks and money mutual funds at our central banks and i think americans would be interested to know that the $190 billion that we are at 3.25 at the end of this year that the fed would be paying to banks and money market funds, i would say that the amount going to foreign-owned banks would exceed 30%. and at this point, the fed earning less than that on its portfolio, the treasury will have to cover the gap, prlus ths

remittance scheme that the fed has long engaged in. they give 90% of their earnings back that gets exhausted as these interest rates go up the way the mechanics of the federal reserve operate. >> and the ecb pays zero interest on deposits >> yes f >> it's one trillion now. >> and they keep a huge firstage of their assets in cash for that reason 41%. they keep it in cash in the united states because their own banks pay, it's a negative rate for the european central bank until last week. now it's zero. and the bank of japan pay as negative .1% so of course they're happy to get paid much higher rates in

the united nathigher rates in the united states. i think they highlight problems with the fed but i think it needs it's way off course it's not delivering stable prices it's not supporting productive economic activity. the target inflation rate should be zero, not 2%. and markets should play a fundamentally more important role in determining interest rates. supply and demand worked in a free market economy to give you the best rate. the market-determined rate i think our central bank should not be paying interest on reserves, and of course, ago i said, that's what my piece is about. >> i know a financial journalist that could post that question to j. powell. i don't thouknow if he's listeng right now.

could we broaden the discussion, something that i've been grappling with there's a lot of fear that we could have some type of replay of the stop and start monetary policy of the '70s where it looks like inflation is coming down so we stop only to, i guess, light a fire under it anew, and then have to again raise rates. >> exactly >> but is it, is it the same this time around is this inflation we have now deeply ingrained is it from the policy being too easy all the way back to the financial crisis, or is there something to be said with energy issues with putin, the reopening of the economy, pandemic hangover effects that we have. so that maybe with the dollar so strong, do we really need to worry about that other mandate at this point? if it looks like we have to hurt demand as much as we have in the

past and that, i guess i'm arguing for a stop and start policy based on data. >> and i think that the stop and start policies that are fostered by the way central banks operate is extremely harmful to productive economic activity we know how much uncertainty make makes it difficult for entrepreneurs or any forward company to make plans, tand it's this stable money that services economies in the most productive way. what we're seeing now, of course there are supply issues. and what putin is doing with energy is clearly having an impact, and the cost of grain is clearly affected by the war against ukraine. now money supply is supposed to adjust people would switch out of other goods, paying too much for

energy than they might have to curtail their demand in other areas. but overall, the central bank is supposed to keep a stable level of prices. and that's where i think they are failing. but the fiscal part of it, too, the payments that are made by our congress and administration where you provide empty purchasing power, not backed up by an increase in output, that's why you have demand-supply issues that's a huge factor in this inflation. so overall, we just need to have fundamental reforms. we shouldn't pay people not to work and we shouldn't pay banks not to lend. that's bad fiscal policy and bad m monetary policy. >> i started reading this op ed and i thought it might be judy's she was pointing out that

hurting demand as the main tool to try to cut down on frinflati is an infective way. you want to do it with less regulation se the similarity was it's an unwieldy tool that's counter productive to what we're trying to do in the first place when we raise rate it's harder for businesses and entrepreneurs to do what they want to do >> well, i definitely think that higher interest rates are a higher cost of business, which inevitably gets passed on to consumers, and it's mistake to discourage productive lending to those who would hire people, which would help relieve the demand pressure. i'm definitely someone who

favors a supply-side solution, and it's not just about monetary policy, unlike elizabeth warren. i would argue for a lower regulatory burden on business. i think that's costing economic a lot. and i would lower taxes, because i think you'll get more productive economic activity if there are, if there's less taxes. >> well, i can't -- >> and so -- >> i can't produce the 10:00 squawk on the street, but i might dhcut that sound bite rig there and play it. senator elizabeth warren will be on "squawk on the street" this morning. and i might pose some of those same questions to the senator. andrew coming up, jim cramer's at tt take on the earnings and whhe fed may or may not do you're watching squawk on cnbc

welcome back to squawk want to get back to the new york stock exchange where our good friend jim cramer joins us now lots to discuss. big day. we heard from boeing already today. i'm curious what you think of those results. the tstock seemed to move highe. and then meta, which a lot of folks will be watching very closely, jim >> i invollove the boeing number they're going to have good cash by the year end. i'm not worried about the union issue in st. louis i think that will be okay. the orders for all the aircraft are all pretty amazing

i don't want to say they're back, because obviously, they have faa problems, but the faa problems with the 737 could be resolved very, very soon and the only hold that is missing is china but obviously, china is the hold for everybody. it's a really good quarter they really pulled it off. from so from the beginning of the day to the end of the day, do you want to earn meta in. >> my travel trust has a little bit of position. all the ditfferent stuff about how he is trying to cull the herd so to speak, you wouldn't do that unless you're very worried about certain divisions. he did raise the price of quest pretty significantly i don't know, you might be able to get a shopify situation, where shopify's just so down that even though they reported horrible numbers it could go higher but the long knives are out for meta, and i wish it were coming

in at 150. the long knives were out even one minute before microsoft on the threat work. that's always unfortunate. >> by the way -- >> i don't want to bet against mark >> we had rich greenfield on before he likes spotify you like spotify >> spotify numbers are great the only problem, you're getting a much better company for the same price pre-c pre-cash flow numbers are the same, they had much better numbers than anybody thought maybe they have less competition than people realize. i think that's the, the big change here is that maybe spotify is now alone they are paying a lot, maybe too much, for talent, which is why, remember, they're not making any money, but boy, they're signing up i don't know whether people are willing to give them that credit because they're still in a position where they're not make ago ton

makeing a ton of money got to give them that credit >> to close this out steve liesman doesn't need any help, but if could you feed him one question this afternoon to ask j. powell, what would it be? >> what are you going to do that already the less fortunate and the working person are badly but not the affluent by these moves? >> jim cramer, we will see you in just a couple minutes >> thank you >> check out his investing club by heangvethcn.cdi or e bcom $30. just (daughter) i've already told everyone! (cool guy) $30...that's awesome. (mom) it's their best unlimited price ever. (woman) for $30 a line, i'm switching now. (vo) the network you want. the price you love. only from verizon. medium latte, half-caff, no foam. quite the personalized order. i know what i like. i've been meaning to ask you, carl. does your firm offer personalized index investing? hmm? so i can remove a stock that doesn't align with my goals. i'm a broker, not a barista. what about managing gains and losses to be more tax efficient?

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meta shares at this hour, take a quick look, the social media giant set to post earnings after the bell meta shares this hour, meta shares this hour -- i guess we're not going to show you. julie will have to tell you. oh, there we go. second time today. joins us now with a preview. hey, julia >> well, joe, meta is expected to report its first-ever decline in revenue this is after a last quarter meta reported facebook's first ever overall decline in users. so investors that are bracing for meta to suffer from all the issues that have hurt the other

platforms, macroeconomic pressures, challenges navigating apple's system changes and growing competition from tiktok. alphabet reporting yesterday that youtube's ad revenue decelerated to 5%, short of estimates, while last week snap and twitter fell short of both top and bottom line estimates. for met that, whose stock is down about 50% year to date, analysts are expecting a 0.4% decline in revenue to just under $30 billion, while earnings per share are projected to decline by 28% but 70% of analysts have a buy or overweight rating on the stock. bank of america says the ad recession may have already started and they expect a better 2023, projecting the company will be optimistic in its earnings on monetizing reels, improving ad targeting, and slowing down their spend on building the metaverse but it's worth noting that mark

zuckerberg told employees at the end of june that this is, quote, one of the worst downturns we've seen in recent history, and remember that instagram just rolled out changes to compete more directly with tiktok. both of those things speak to growing challenges that the company faces. becky? >> julia, thank you. let's focus more on big tech's big week of earnings to do that, we're joined by dan flax, newberger bergman's senior research analyst why don't we start with the numbers we got last night. both microsoft and alphabet coming out with numbers that were weaker than expected but maybe not worse than the kwhis per numbers out there. they weren't terrible, so the stocks are up today. does that surprise you at all? >> good morning, becky it doesn't surprise me given how much negativity there was in the run-up to earnings what we saw last night with google is the durability of search is extraordinary, even of course what is a very difficult environment that all of the

companies are facing you couple that with a cloud business for google that's in its relatively early stages, and we think there's a lot to like, you know, in terms of the investment over the next one to two years. then if we look at microsoft, they, too, have demonstrated very strong execution, while not immune to the macro challenges, their cloud business, azure performed very, very well. and so we're looking very carefully at the near-term data, but from an investment standpoint, we are excited by the opportunities we see here for those companies that can innovate, execute on their product roadmaps and ultimately grow over the next one to two years. >> dan, one of the big questions has been capex spending, will people continue to spend on this does this clear that question up or does it just kick the can down the road? >> i think it will be a mixed environment in the near term i think for all companies, for example, all of the customers of microsoft or the google cloud, those organizations need to

invest, they need to transform their businesses, and these digital platforms we'll see from amazon web services tomorrow night, these platforms are foundational to the future for all companies across industries that want to compete they do need to invest so capex, while certainly lumpy, it is really key to creating value for customers and ultimately shareholders of the respective companies >> but i think the question has been did we pull forward a lot of spending because people were doing so much work from home, companies were trying to make sure their services were bolstered -- did that pull forward or did it not? it certainly doesn't seem like it to this point >> there are certainly pockets, becky, in terms of when everyone was working at home, they had to buy more pcs and peripherals to make their home offices work effectively. i think theenterprise environment, this transformation of companies, that is very, very early. remember, many of them had to

respond quickly, and so now as the leadership of those companies, the men and women across their technology and business organizations work out what this new environment is like in many respects, even with the difficult economy, they're just getting going so we certainly expect lumpiness. there are of course difficult compares to your point in terms of is there a pull forward, but as we look out into next year and more importantly into '24 and '25, we see very, very interesting opportunities at current levels >> do you buy apple ahead of its earnings release >> i do. we are certainly in a seasonally slower period and there are concerns about china what we're focused on is really this ability to unveil new products later this year and really execute across iphone, across wearables, across services, and so there are certainly near-term compares that are difficult of course the macro economy. but we've seen terrific

innovation from the company throughout the pandemic, and what stands out in my view is that their ecosystem, the developers around the world, the millions of people who are writing applications, that really remains vibrant and robust, and there's a really key part of the story for apple. and so we like the shares. we are buyers today. >> dan, thank you. >> thank you we've got a news alert to tell you about spirit airlines is going to proceed with a vote today on its sale to frontier airlines, this after pushing it back multiple times. shareholders are expected to reject the deal. then reports say spirit will continue talks to sell itself to jet jetblue. those discussions are said to be progressing well we'll see where that lands and ultimately what regulators think of whatever transaction ultimately transpires if one transpires at all. let's take a final check on the markets right now ahead of the open, about a half an hour before the open. we're looking at green, 163 points higher on the dow, s&p 500 up about 36 points, nasdaq

up about 189 points. >> cheap air fares in the fall did you see that $239 average? >> some cheaper but i'm trying to look at others. anyway, we'll be watching the markets all day long, 2:00 p.m. the fed, and then we have meta after the market and everything else we'll talk about it tomorrow join us then "squawk on the street" begins right now. good wednesday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer live at post 9 of the new york stock exchange. david faber has the morning off. futures are solid on this fed day thanks in part to some decent guidance not just from google and microsoft but texan, hilton, waste management, visa we'll get to all of it durables with a nice beat as well the ceos of boeing, t-mobile, chipotle, mondelez, plus an exclusive with senator elizabeth warren calling rate hikes,