>> 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,

quote, an ineffective inflation cure has the bar been lowered for big tech kat and kathy woods coin flip the world we heard most last night was relief >> these are all better than feared, btf. i think when you look at azure, very big, up front, the number rsz extraordinary for azure and that's what we cared about we knew windows was going to be weaker, consumer weaker. enterprise fantastic i liked the quarter very much. there will be some issues for depreciation maybe some will say it made the quarter look better. i think they've added enough equipment that's not true. amy hood caused the stock to jump, cfo, as the quarter went on, spike up when amy hood

spoke. i always tell people please wait till amy speaks. known amy for 35 years getting long in the tooth. they're spend muing money on gol cloud. i like the fact that google is so not snap that the people who thought it was snap really have to rethink their game plan or maybe their careers because the idea that somehow a fourth rate internet power like snap could be even discussed in the same sentence as apple is unfortunate. >> although some argue alphabet has a moat around some of those privacy changes that are better than meta's. >> first party, meta has not been able to crack yet, reporting this problem of how to get around apple reporting i think they will, but it's not done yet the strength in meta, i think,

can still come from insta ads. but many of the companies, what do they do they spend money on digital but money tends to go towards amazon and google it will be interesting to see what amazon says, by the way a lot of people are concerned that amazon has lost its edge, and i know that's not tonight. i really don't want to say anything tonight because there's so much going on >> yep >> but i think amazon could be similar to what we see and apple could be similar to what we see. what these are -- we've come down enough, and if we hear anything that's better than fear, we bounce. if it comes out it's come down and is worse like snap, a buy on it, it can still get crushed when i looked at alphabet, there's was nothing i liked about it, everything was bad, but the sum total was good. >> yeah. the operating margin missed, the headline miss, and then also the

discussion of what this whole reset has done to the corporate mind-set this is what was said last night. take a listen. >> it's a good time to shop on our focus. i find moments like these clarifying it's a chance to digest and make sure we are working on the right things as a company. taking a long-term view. making sure we're investing in deep technology and computer science and gives a chance for everything we are doing with a critical lens and reallocate these sources to our most critical priorities. >> by the way, $15 billion buybacks in the kwoquarter is n up sequentially. >> it's the sum total of our fears completely dashed. in other words, you're seeing companies pull away.

a alphabet is pulling a way. microsoft is pulling away in terms of azure it's doing incredibly well i'm surprised they're willing to put so much money towards google cloud, but they think they have a good hands search is amazing. what i'm upset about is people keep talking about advertising being down i have said from the beginning the advertising dollars will go to the winners i remember when the "philadelphia inquirer" got the largest bulletin we are seeing the same thing happen right now the most effective roi is alphabet advertising it is very interesting to me, by the way, i don't understand why alphabet doesn't tell that story better maybe that's a story that you don't want to hear if you're a senator from illinois, say, or senator from minnesota there's a lot of people in the senate who are very worried that what's happening is alphabet is steering people toward the right

places at the same time, if you're an advertiser and you're a customer, don't you want to be steered? >> if you have intent, right >> we mentioned senator warren, so i have the senator on my mind the senator seemed to be uniquely focused on these companies as is the ftc. the justice department is more focused on spirit. i would to tell people who are advising on jetblue, you're making a lot of money for nothing and it's really shameless. because your deal will not go through. it won't go through. >> you've been critical of the deal for a while >> just pay me pay me $5. i'll give you much better advice i know more than you and better contacts than you. done >> we'll talk some airlines. we'll watch boeing today out with some results before the bell pretty good cash flow numbers. let's get to phil lebeau with

dave calhoun hey, phil. >> hey, carl dave, miss on the top and bottom line but carl referenced the cash flow numbers, better than expected you talk about this being a quarter you move towards stability. give me some perspective on the quarter as you look at it. >> as you know and as we've talked over the quarters, operating cash flow has been our focus. we went to the capital markets we asked for a big number. they gave it to us and our objective so make sure we get our balance sheet exactly where it should be so, yes, we're positive. we view it as a bit of a turning point with respect to the cash flow generation, and it is a big deal to us and, yes, stability is the word of the day for us. in a world where supply chain constraints grab you every other week or month, you have to build a production system, engineering system that prizes stability and ultimately it serves our customers. >> let's talk about 737 max and

in particular michael o' leary they had their earnings earlier this week and he pretty much came at you guys gun blazing saying what's going on with the max? in particular, they have a number they expect delivered, i think 200, and he said, quoting, "if there's any delay in delivering 21 of those 200 boeing aircraft, we think that will be inexplicable and unacceptable." the implication is you guys have intimated to them you may not be able to deliver the full complement of airplanes they're expecting. >> yeah. first of all, we're not in a fight. he's right and we need to build a predictable delivery system. and right now it's not nailing it so our objective is to get to stability where each and every delivery is perfectly predictable. in the supply chain world we're living in right now, that is difficult. we're not going to be in a fight with michael michael is right the good news is it's reflection of the demand he sees.

>> no delivery with the cadence? >> there is an issue with respect to predicting it perfectly and if you miss by a week with michael, you're off. that's what we have to live up to >> dave, jim has a question for you. >> dave, first, congratulations. obviously i think you had a big sea change after the air show. obviously your planes are very much in demand the president will be speaking to president xi. it looks like that your competitor is not airbus but actually the country of france with macron directly getting orders from countries and making a big appeal in china. what would you say if you were adviser to president biden about talking to xi to get those orders so that they don't all go to france? >> well, look, jim, it's the perfect question we are in the midst of geopolitical tensions without a doubt. we congratulated the french when

they did do their deal we hope that we can get a constructive discussion going between our country and china with respect to trade. and the free trade we've enjoyed, we've always had a view that our trade with china is free and fair. and we've stood by our customers in china and will continue to do so so, yeah, i agree with you, and i hope and will encourage our administration to do business with china with respect to aviation and boeing. >> dave, i'm very impressed with free cash flow, very impressed with what i think will be a very good cash number by the end of the year people have always been worried that a big offering is in the midst. with momentum you have, the possibility that the faa will make some approvals will be very exciting it looks like you have clear sailing at least for the next four quarters. is that fair >> it's definitely in contrast to the last four quarters, a fair same. i will never consider a quarter

going forward as sort of free pass but, yeah, things look a lot better for us, a little more predictable raon a lot of fronts we have cert activity going on with our airplanes we're confident about that the faa relationship has been constructive these are all things that are favorable for us in thinking about our move forward so, yeah, i think it's a fairly good representation of what we see. >> talking about relationships, you have the machinists in st. louis, you've got three plants down there in the st. louis area where you are -- it's your defense business and they have said we're going on strike monday can you avert a strike because right now they're asking for hefty increases in both compensation as well as retirement benefits. >> yeah. i don't know the answer to that. this is a reflection of the macro world we're in high inflation numbers they read about every single day in their newspapers they do have high expectations and we feel like we have made a

very strong offer. certainly with respect to any historical context but even in a high inflationary environment. so we're disappointed in the vote without a doubt we will continue to work with them to get to resolution, and we will prepare for any disruptions that ultimately come about. >> what are those contingency plans? >> contingency plans are to minimize disruptions with our federal government customer, make certain they are aware of each and every delivery as we look forward >> but they could be delayed, obviously. >> oh, for sure. no question they can and would be so our job is to manage that risk financially, this is not the biggest exposure in the world, but any riff we have with our employees i view as a significant thing and we have to get ahead of it. >> you mentioned the faa and the 787 dreamliner how close are we, do you believe? i know you don't want to give a date how close to saying you're good to go with inspections and resume deliveries? and then how quickly do you

increase your production >> dangerous ground for me to suggest a date, but i do believe relative to our history here and all the good work done by our customers, our employees, and the faa, we're on the verge. and i feel strongly about that so our job is to get this to the finish line, start delivering, and then, because of demand and because we see is a fairly robust market, even for wide bodies going forward, we'll increase that rate as quickly as we can, but stability always number one >> i think jim has one more question for you jim, go ahead. >> i never really got to ask you, you moved from seattle to chicago. you move todd washington i've never really understood the move to washington i say that because i know you want to be as close to manufacturing as possible, but that doesn't do it so please give me a concise view about why it's worth making that move >> so, jim, the bigger story inside the headquarters

activities at boeing started in january of 2020 when we took all of the operating leaders we had in our head quarter offices in chicago and we moved them directly back to the action, get close to your work that was our philosophy. our engineering leader went to the engineers, our manufacturing leader went to the plants. we moved all that operating thins out, and now we're talk about myself and my cfo and maybe my chief h.r. person, and our job is to be in the road, on the road as often as we can. if you look at my travel schedule, you know that's what we do. so, we made a big move to decentralize and get operators close to their work. and, yes, we have a footprint in chicago honestly that was too big for what was left, and this was sort of a rationalization of that footprint and being in d.c. for me is actually pretty beneficial because when i'm here i get to visit with my customer at the pentagon, i get to visit with regulators when i need to, i get

to visit with congressional offices when i need to it's a fairly productive station for me the bigger story is that press out to the work, that happened quite a while ago. >> dave, you've got the coming out of farmborough with the huge order with delta for the 737 max 10, 100 of them, and other orders as well it was a successful show but there are a lot of people who look at the order backlog between you and airbus, and airbus has substantially more orders than you do how do you close that gap? >> we don't need to close that gap. let me just describe we're in a supply-constrained industry and will be as far as i can see for years, not months. if that's true, our job is to deliver against our backlog and continue to build that backlog, and that is what's going on. for me to measure my backlog against their backlog isn't really the world's most

productive exercise. my job is to make sure i have a big enough backlog to continue to increase my rate, stay stable in production, and satisfy our customers every step of the way. what we saw at the air show were boeing products. very proud of that product line. a 777-x, certified in '25, you saw it fly and it was magnificent. the dash 10 certified at the end of the year, you saw it fly and it was magnificent when we stand next to our products, we look pretty good. and that's why it was a big show for us and important, and we got an order book -- yeah, we have a big order book but importantly it covered every one of those airplanes. >> dave calhoun, ceo of boeing speaking of the order book, it tops 4,200 planes as they are now building 31 maxes per month. that is the production rate. that's what they were targeting. they are there now dave, thanks for joining us today. >> appreciate it. >> good to be here in d.c. back to you. >> great stuff as always, phil more broadly, jim, travel, if you look at visa and hilton this morning, is going to ratify the

fact that at least the hotel etfs are having their best month ever >> right and you have to listen to al kelly. visa is just extraordinary and the number she's talking about, they are 130% volume increase over 2019, strong recovery, these numbers are as of last night, commercial transactions going up, cross border incredible, discretionary spending strengthened. these are all things that maybe jay powell doesn't want to hear, but the fax that visa is down is mystifying to me restaurants high end, up 160% to 180% most importantly, people are traveling like they've never before if president biden wants to make a deal with china, here's what i would suggest. i'd say drop the tariffs in return for buying as many planes as you promised macron, 300, and, by the way, they're union jobs, mr. president, which is what mr. president seems to care more about than anything else.

>> he and she are expected to speak before the week is up. >> let's make a deal i just gave him everything i'm storied of advising. still to come, another big earnings mover this hour, don't miss the ceo of t-mobile stock is up nearly 20% for the year >> smoke >> as they raise their subguidance for the second time this year. we'll get to texan and cmg and spot and a lot more.

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premarket gains holding in there as we are on fed wooch t watch this afternoon we're awash in corporate results. macros as well, durables came in, second best number of the year, and wholesale inventories, that is going to have big implications for the gdp number tomorrow unowtohepe"mad dash" and cotdn t oning bell in a moment wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq bubbles bubbles bubbles

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much better than feared. texas instruments had a terrific number they're not an eloquent company. they tell it as it is. the stock is going do break down because they had not only unbelievable automobile business, revenue above the midpoint guidance, extraordinary, but they said they can shift they can take these machines and switch it to auto, which is just music to jim farleigh's ear. ford reports this evening and also to mary barra so i just see -- there's no sense in selling this stock. the semis have been pulled down endlessly. it's been a horrendous group texas strimts will distinguish itself as being sharply better than expected. they keep buying back stock. it's well run but it doesn't ever brag, but they should have this quarter. >> guiding ahead after nxp and after the chiefs/bills probably going to go. >> nxpi was fantastic for auto

people were gloomy i would rather been in qualcomm than not, which is why my trust is in it don't forget google, great for marvell, great for amd and great for the most hated stock i've ever seen, nvidia. >> the opening bell after the break.

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later today, the fed will conclude its two-day meeting and announce its latest interest rate decision. many expecting the fourth rate increase in about five months. of course we'll have a pause of meetings until we get to september. >> well, the bulls have to hope there is a pause and that fed chairman powell does not feel things have gotten so out of hand that he actually says, look, we can't wait, we're going to -- there's nothing that says they can't just -- you know what, we're going to make a decision even during august.

look, they used to convene the supreme court in nantucket in the summer they certainly can convene the federal reserve in august. >> actually people say what would be good questions. one is where is the bar for an intermeeting meeting as well as what's the line between shifting from a high cycle to cut cycle yes. we have many items in the producer basket that have come down i know almost every single one has come down. i was recently mocked in the "f.t." for saying inflation peaked, and i'd like to say i'll take them any day of the week. they can throw their salmon paper and i'll throw mine. the raw costs have peaked but not the service and i'm sure jay powell is saying american express and visa are doing this well, maybe we have to slow more [ applause ] >> if you've seen lumber today, $550 on pace for the worst year

in the history of my life. >> people should think about that not only that but the mortgage applications are back to where they were in 2000. we have, if you think about it, a lot more people than we've had in the year 2000 so, yes, lumber down, aluminum down, obviously, you know -- [ bell ] i keep coming back to look out, the raw costs are coming down, housing is clearly peaked, when housing peaks, it rolls over very fast. will the texas instruments of the world come to help the auto companies when the financing reaches 7% i don't know the raw costs have peaked. ask sherwin-williams they still have some raw cost problems not everything has peaked. tio2 that makes things whiter, it never seems to work but i do think that, you know, where we are is you do the

three quarters and then you wait, because if things are really peaking -- and i'm looking at mortgage appli applications -- i say wait a second, look at what happened with walmart, the largest retailer, which was horrendous, and look what's happening with housing, then you have to figure out what to co-to do with travel, entertainment, and leisure, because there's such a gulf between the affluent people spending like mad, lbmh -- >> because the warnings from walmart and target and bed bath and even adidas sort of collides with what, say, lvmh said yesterday. >> obviously their numbers weren't as good as the previous quarter but lv mesmh, there isn anything in that portfolio you can afford if you're an average person

hygiene took off during the pandemic and has been staying strong i'm looking for things that the affluent people and the nonaffluent people are doing, and there's not a lot of -- put it this way, if you're the fed chief, i think you have to be thinking i'm hurting the working person, and somehow i'm not hurting the affluent the affluent are still spending. they're creating a big problem when it comes to job hop, when it comes to spend. so maybe we're not done. i think all of us would agree that inflation is running way too high >> sure. >> but there is a moment we have to say let's push and wait maybe we wait for the summer, see if the ppi keeps coming down or see if the "financial times" is right, the ppi keeps going up >> we'll see cruise lines, hotels leading chipotle on that winner's list, comps up 10.1 and they guide to

mid, high single digits. >> right one of the things that's very encouraging about chipotle is talking about these average unit volumes, 5 million, 6 million. they have great input. the ceo talking about how things could cook brian nicholls is a great leader it is clear when you pay people well, get them out of the jobs people to don't want like making the chips, and you have chipotle crushing it, there's room for a lot chipotles. he said there's lines everywhere lines in philadelphia. philadelphia, what, philadelphia nothing going on in philadelphia i thought it was an excellent conference call except for the idea that sales will go down a little lower but for the same store. but i thought it was important that, again, better than feared, better than feared >> yep >> which then gets you to think that i know people will come cup

with a conclusion that maybe the great franchises' stocks have come down too much but the mediocre franchises can keep going down when we look at what's going on with the nasdaq, we don't see a lot of new companies coming public, but more importantly, when you think of the companies that came public from last year, they're just a disaster. i don't know how they're going to raise any more money. i mean, what do you do there's an f-25, remember, the company that -- >> of course we talked with them on the floor. >> they canned the ceo they canned him. the numbers were horrendous there. i just find that there's a lot of -- webber i mean, webber is very much what i'm most worried about, which is large debt, slowdown, people still in it. >> high penetration. >> high penetration versus some of the companies that were terrific this morning. i think when you go and listen to microsoft and you listen to

what azure is doing, you realize they have the better mouse trap. it's clear to me that the world is dividing among walmart.com, target.com versus amazon, fedex aligned with doing great logistics work with wall mart and target versus amazon's logistics, the world is coming down to just a couple of companies. >> you're talking about are the established entrenched giants crushing the upstarts that were raising capital like crazy many is. >> yes exactly. now, it is interesting to think that shop gify, which i have on tonight -- >> cathie wood just bought shares >> sold coinbase that was smart we were waiting, wait a second, she bought shopify and it's down, but it looks like the chart of what happened with the pandemic

the stock has been very much in keeping. some people telling me, listen, jim, it should never have been where it was, and i agree with that when i speak to farleigh tonight, they didn't whip out the small and medium-sized business cohort. they didn't. it's still thriving. i think a lot of people are really caught here, really caught, carl, because there's so much that is good. remember, al kelly -- visa represents a lot of the company, american express jim, they only represent the wealthy. no, the middle class and the wealthy. job not done because of that i guess. >> your point about the covid pull forward, the big head fake, the normalization, whether it's shopify -- spotify as well the guidance sort of mixed and they rer' dusing hiring by 20 v 25% in the back half >> spotify added millions of

users, 5 million, ads still doing okay >> this is it. >> this is how i looked at it. shopify brought down by netflix. google brought down by snap. well, you know, snap, can we just -- stab a fork in it. netflix is obviously kind of for the moment wavered, and netflix brought down disney. now everyone is cutting numbers. by charitable trust owns disney. i hate mickey and minnie i throw darts at them every night. isn't that one cheap what does its take to make that franchise cheap if travel is so strong >> i mean, evercorps cuts it, but they cut live nation, fox, warner to 25 from 40 >> yeah. i think that warner's balance sheet is awful no one -- no one put the wood to

paramount today? >> i think they include -- >> i wanted to be sure there was nothing positive about paramount. it's important even though they had a great schedule, it's important every single day some companies are not getting any breaks paypal >> we haven't talked about elliott yet. >> look, i have no idea what elliott wants to do. >> the journal doesn't know the size of the stake. >> no. when i look at it, here are some things they could think about. tremendous customer base, 400 million consumers, but the spending has been out of control. they don't really -- they're still looking for a cfo. the free cash flow yield is extraordinary here they have braintree, an amazing division, venmo, which has not been monetized the cost structure is way too high so there's a lot of work that could be done there. i owned paypal for a long time

for my trust i lost trust in dan, but i think -- dan shulman, but i think that the franchise has tremendous value, which is what i saw and i totally understand why the stock would be up this much if not more because there's a lot of room for elliott to really push. >> industrial names, otis and waste management at one-month highs. >> waste management was sensational. the stock has been just paused the initial read on otis was so negative but judy marks has done a remarkable job this is otis worldwide without any help from china whatsoever fantastic numbers in europe. service revenues extraordinary the margin of service revenues china, they still inspect. i mean, it isn't like they say we have to cut back on safety. they don't do that as a matter of fact, xi is addicted to safety, which is one of the reasons why he wants zero covid. but i thought that otis did a remarkable job they're returning a lot of

capital. judy marks should be celebrated because construction has been good and she's getting her fair share. as new corp. said yesterday, construction is good in this country. i keep caveating saying construction is good, spending is good, inflation is good, we have to slow this monster down this monster is doing very well. >> yeah. otis as you pointed out, new equipment orders up 16 >> incredible. >> a lot of people use waste management as an economic bellwether >> i think that's right. >> more trash, creating more output >> i think jim fish has done a remarkable job remember, they are a construction-oriented company. when you're building housing projects, that's their best business their worst business is refuse collection of course they do a lot of that. jim has been instrumental in trying to get his trucks to be -- less diesel. he's known for perhaps having the single best golf tournament

at the same time as the super bowl i think jim is remarkable. a lot of analysts continue to doubt him and that's a mistake 28 times earnings people think is too much. i don't think so they are doing a terrific job. >> kraft is going to tb one of the big laggards today they do beat they raise the guide on organic sales, 12 points price, volume down 2 some say that's pretty good. >> i am addicted to companies that have volume and price that are -- i want organic growth organic growth not shown here. if you just do it all by prices, at certain point people say you know what, those cheese slices that mom bought for me, i remember when mom said once, let's not buy the ones that have cell cellophane pops didn't do well this month it's gone up enough. they don't deserve its they don't they have not done -- they're simply not doing as badly.

that's not a reason to buy a stock. they're not as bad as they used to be. imagine if i told you, david faber, he's not as bad as i v he used to be, and i say that because he's not here and i miss him very much. that would be like saying awful and faber is great, heinz bad. >> we're going to watch a lot of the cpg companies. >> amkimberly-clark, another prc target downgrade sherwin-williams enterprise is good if you're in microsoft, you don't feel any reassurance afbt consumer as a matter of fact, the consumer has slowed down dramatically enterprise very good >> we'll talk to mike sieger with timo in a little bit. do you think they at all echo what we heard from verizon nt last week in terms of overdue bill concerns -- >> my friend, he's no longer the ceo, always called them dumb and

dumber but would never identify which tee sat&t, which is veriz dumb and dumber. we don't need to worry t-mobile is crushing them. it must be -- listen to me, you have to do better. you're killing people. >> they definitely got someone on the prowl we'll talk to steven later on along with an exclusive with senator elizabeth warren calling rate hikes an ineffective inflation cure back and forth with larry summers the last few days. before the break, look at the bond report as we await the fed decision and press conference later this afternoon you have the 10-year and the 2-year continue to invert with levels we haven't seen since '07, the dotcom bust

got some gains here on the s&p, about 1%. meantime, as we said, don't miss the ceo of t-mobile, live at post 9 breaking down the company's latest earnings. what a winner it's been so far this year. almost 20% gains so far. we're back in a couple minutes new projects means new project managers. you need to hire. i need indeed. indeed you do. when you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria. visit indeed.com/hire and get started today.

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shares of t-mobile gaining this morning after reporting second quarter results, the company raising its outlook oute board, reiterating the commitment to not raising rates on customer plans. joining us on cnbc first this morning, we have the ceo a pleasure to have you back at post 9. >> appreciate it. >> how is it happening, evening as we're hearing these other cautionary signals. >> last year was our biggest year ever. we just guided to 6 to 6.3, our best year ever overall, q1 and q, biggest ever in our history you know, this quarter we delivered 380,000 new accounts that's the highest quarter ever

in our history you guys have been following us for a long time. we've had big quarters in the past >> your competitors, at&t and verizon, they raised prices big, citing inflation it looks like you're keeping prices steady? >> i think they might be using inflation as an excuse, for a decade as the un-carrier, we had a choice of between being a carrier like them or being the un-carrier not only did we not raise rates by the tune -- we introduced price lock, and not only didn't we, but we won't that's what the un-carrier does. we think that's not just great for consumers, but great for our business for a decade wove pursued that strategy, and we have outgrown everybody as a result. that's the strategy we're pursuing. >> are you not facing the same cost pressures >> we have cost pressures like anyone we see it in labor, we see bad

get returning to normative levels those are things to watch, but we also have long-term arrangements, long-term contracts for equipment, for networking for back haul, including multiyear contracts that locked in pre-inflationary pressure cpi rate. so fixed debt structure, so we have some insulation that other companies in other sectors don't have >> i want to know, at&t they were doing movie for a while, i get that -- directv, i guess that didn't work, but they did have people not paying their bills on time. how bad was it for you how long does they take in how many days did they wait? >> remember, t-mobile has always worked with a public that has variable economics >> tell me, at&t said they couldn't pay on time

how many peopleant pay on time for you? >> it's always been the case a decent amount don't. we work with in the meantime and recover that. >> how about a spike >> re reported bad debt elevated to pre-pandemic levels, but that's an area we're comfortable with, we guided ebitda up in the same report. we know how to manage customer relationships. you're saying you didn't have a problem. >> we didn't. >> did you ever get into movies? >> you are pure playmobil internet company in an era where all intent have left their linear forms, and the internet is going mobile. being the nation's leading pure play mobile internet company is a place to be. you can see it in our record growth how about churn? i mean, verizon has always been the king of churn.

we were below verizon for the first time ever, and that includes sprint. that's the blended number we told people years ago we would per sue the worst to first the best value right now businesses and consumers are concerned. there's a flight to value that's beginning to happen. it does forecast that we expect to continue to gain net ads at a record pace in the second half so, yeah, we'll be spending into the success, because our value proposition resonates with consumers now.

you talk about churn basically normalizing what we saw happening? >> it's hard to tell it's a different world now during covid we sauce an increased focus on broadband now it's obvious that the mobile market is equally as important that long-term trend was probably distorted now in broadband, we may see weakness at just the time that t mobile is showing up to take share. that will put us, perhaps higher than everyone else combined. >> the fed meets today >> i was very concerned that that would be something that's right 2349 consumer's wheelhouse you're keeping prices steady, so obviously if you're paying more for verizon, like i have then

prices are going to stay steady. everybody has a phone. >> one of things that's interesting is if the feds continue to raise rates a milestone we achieved last week is for the first time in our history, we achieved corporate family investment grade ratings between two of the three rating agencies i hope to receive the other. >> what series do you have coming up? >> you are ruthless. >> i am. he didn't cut his dividend. >> we were the first to offer netflix to free for everyone we didn't get into the media

business we went right to the big guys and said will you be or long-term partner? we've been partners for many years. >> okay, who is petey? [ laughter ] >> pretty bird, pretty bird. >> mike, thank you so much jim, we'll see you tonight >> that's it i didn't get to the benchmark downgrade, upgrade of shall limber jay. >> we'll go to the next show i'm trying tots it better. we'll see you tonight. >> i've been a any movie, mexican wireless. > 'rba ia nute hearted music) - "best thing i've ever done." that's what freddie told me. - a person like me needed to get a reverse mortgage to change my life. it was the best thing i've ever done. - really? - yes, without doubt! - [tom selleck] joanne said just about the same thing.

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good wednesday morning, welcome to a second hour of "squawk on the street. i'm carl quintanilla with sara eisen. dade faber and morgan brennan are off today. we have a 2% gains on the nasdaq as the guidance from some of the megacap tech names, with a 1% gain

, coming up with an interview of senator elizabeth warren first, though, we're getting pending home sales for that, we turn to diana olick. hey, diana. >> sales dropping much wider than expected, 8.6% in june compared to may. the street was looking for a 1% drop sales were down 20% year over year these numbers are based on contracts. on you shopping in june when the rate on the 30-year mortgage jumped briefly over 6% we also say a big drop in those, now it was widespread across the nation, but the biggest in the west, those are regions hottest in the first years the higher these rose prices are up about 40%, now with higher interest

rates the realtors are now predicting that sales will be down by 13% for all of 2022. >> more declines for housing thank you, diana we're about 30 minutes into the trading session. here are three big movers. spotify getting a boost despite a revenue miss the stock is up almost 14% the move in visa, a bit more mut muted visa has held up broader than the general market. it benefits from the rising travel trends. there's teva pharmaceuticals that company has reached a settlement over the alleged role in the opioid crisis the stock is now positive on the

year, up 21% today let's start with the two big tech names, missing both on the tom and bottom lines microsoft reporting the slowest earnings growth in about two years. alphabet hit by an overall slowdown in ad sales, but missing by a narrower margin joining us is morgan stanley morganwise, and evan kessler gentlemen, good more, thanks to both of you for being here keith, i'll start with on you microsoft. it seems like the double-digit growth in the forecast is what turned the stock around. what is happening with the underlying momentum for close and enterprise spending? >> thank you for having me if you look at microsoft's q4 they aren't strong where it mattered this is the longer-term

commitments. that gives microsoft a lot of credibility for double-digit growth that's what they're buying into. microsoft will be able to sustain that commercial side of their business better than expected, and buttressing that, the cfo and management team are supporting operating margins they're taking the moves necessary to trim op-ex. >> my question, keith, with that positive spin, are there ramifications for others that

you cover, i'm looking at your coverage, or is microsoft u unique >> i think there are some read-throughs. the fact that large enterprises were willing to make this commitment i think is good for other focused names like a salesforce or snowflake or a service now, who also are servicing the large enterprises, trying to enact digital, but let's not fool ourselves there were weaker spots. small business was an area of concern for them the currency headwinds were steeper than anticipated that will impact a lot of vendors as well. >> i do think it's a positive signal on the durability spend >> i wonder if you can explain the accounting changes, the

depreciation changes and impact on operating income, and whether or not that is some kind of tool that they're employing to give them some cover? >> we didn't get that question too much from investors. on the overall results, we're pretty solid, which i think was better than feared the one point of weakness was youtube. we were looking closer to 9% growth, soa bit of a mixed bag there. despite some concerns, as well as travel. cloud held up pretty well. so still seeing nice on the cloud side they did continue to hire pretty 'gressively, though it did cite they will slow hiring going forward. if you look at google on a value it's 16 times on a core google

business we think that's pretty attractive >> what we do think youtube is being impacted in terms of the apple privacy efforts. youtube han impacted by that as well so looking for modest growth in youtube going forward. going the search is still the main driver of the google business >> they did manage to hire a lot. what sort of read did you get from microsoft on spending, hiring, what are you getting across your coverage right now >> i think the accounting question was probably more so on the microsoft side of the equation microsoft did extend the useful life of their equipment and data centers. that helps on the gross margin side of the equation

to your question on op-ex, they're holding back on hiring that's going to take down op-ex growth, particularly into the back ends. there's a lot of new employees, a lot of new investment that was made in the first half 6 this calendar year. that's going to impact op-ex growth in the first half of their fiscal year, the first two quarters, but in the back half you'll see it come down a lot. that helps support the overall operating margins. the accounting change helps. that's a definite at this time boost on overall gross margins, but the company was explicit even without that accounting change, because of the more aggressive stance, you're still -- you would still see flat operating margins for the year, you would still see double-digit operating growth.

in terms of how that applies to the broader group, there's a lot of companies out there that have the ability to be more aggressive on op-ex controls, and protect that margin and free cash flow. i would point to salesforce and servicenow, but in terms of software,,000 a lot of high-growth name where you're trading on momentum, and with those vendors, it's going to be harder to create that balance. that profitability is really not there in their income statements today. keith weiss, and aaron, thank you both for joining us this morning. >> thank you for having us. the boost for the outlook, perhaps that were currently in recession, steve liesman shoos details. >> yeah forecasters this morning raising -- i said raising their

gdp outlook further away from zero here's the data. durable goods the estimate was down, but it came in positive. and retail inventories also better than expected, up 2%. all of this leading economists to raise their forecast or suggest there's upside risk. the consensus is for a scant 0.3% print with more than a handful of negatively estimates. if it is negative, that many are using as a benchmark, but jpmorgan, i just got a note moments ago, they boosted their second quarter forecast to 1.4 steve stanley from pierpoint, he raised his, saying in a note, anything that lowers the odds of a negative print tomorrow is important psychologically.

to put this in context, trading inventory led to the negative number in the first quarter. so it was to be expected it was to be expected there would be a rebound in this quarter, but the durables numbers suggest businesses continue to invest and that's a positive. >> steve, thanks for that. definitely seeing some of the revisions higher today as we go to break, a look at the road map for the rest of the hour, including boeing why the ceo says the company may feel supply constraints for years to come. and we'll get a check on the consumer when we're joined by the ceos of both chipotle and mongo mondoleze. and senator elizabeth warren will join us

don't go away.

in fact higher than expected, supply chain challenges, something we talked to ceo dave calhoun about in the

last half hour it will be supply constrained for as far as i can see, so years, not month if that's true, our job is to deliver against the backlog, so for me, to try to measure my backlog isn't really the world's most productive exercise boeing did have positive operating catch flow, and rbc calls it encouraging citi, incipient signs of recovery cramer called it an inflection point. still to come, we'll talk to the ceo of chipotle. the company say price hikes have driven profit growths. after the break, we're joined by

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looking ahead to fed decision, senator warren penning an op-said that aggressive rate hikes are largely ineffective and a fed-manufactured recession is worse than inflation. diving into all of that, maybe some crypto, joining us exclusively is senator warren. great to have you. >> thank you good to be with you. >> they say don't fight the fed, but you seemed interesting in fighting the notion that rate hikes can offset inflation why? >> i'm very concerned we know that some of the causes of inflation are -- supply chain problems, covid outbreaks that continue around the world, vladimir putin invading the ukraine, monopolies or near monopolies engaging in price gouging, and increases in the

interest rate won't fix any of those. jerome powell has actually admitted that in testimony before congress, and yet he continues to drive forward with what so far having historically fast, aggressive, high interest rate increases if it's not going to help bring down a lot of the prices in our economy, what it can do is actually pitch this economy into a recession. so, i think that that's something the fed should consider and i think they should mott rate this aggressive attack >> you're right that the chairman has said that rates really can't affect supply, but they can affect demand, and wacker demand ostensibly lowers price. there seems to be some iota of effectiveness in that. >> sure, but what we're really

talking about is the fed is trying to sharply raise rates so that businesses will contract, so that they will either cut hours for employees or lay employees off. that means a lot of pain imposed on people. look, think about it this way, with the interest rate increases. if they can't address a whole lot of the reasons that we have this inflation, but they can force a lot of people into layoffs and no income coming in, look at the brutal situation that puts people in. we continue to have high prices, but also have high unemployment at the same time that is not the position that we want to be in. i think the problem we've got here is the fed has only one tool in its toolbox -- raising interest rates so it's using that tool very aggressively, whether that's the medicine that fixes this problem

or not we need to attack inflation on multiple fronts, and i want to give president biden full credit for doing that it's for trying to reduce oil prices it's for working hard to get the supply chains unkinked it's for trying to get covid under control, and it's for pushing back against the monopolies and price gouging so i think the problem is we need to have responses that are calibrated to the problem, and we need to be very careful about saying the solution is to put more people out of work. >> but, senator warren, with all due respect, it is starting to work crude oil prices are starting to lower. commodities, 20%-plus off their highs, because people are worried about demand destruction. >> i'm sorry, whoa you think that's because of the fed raising rates?

i think the reason we are watching oil supplies come down are for other reasons. we have seen that the president has tried to increase supply we've tried to get more supply in, but the real point is it's not that interest rates can't have some effect they certainly can, but you need to match all of the causes of inflation with how the different actors use the different tools if the fed thinki thinks it can using interest rates -- jerome powell has already said that's not the case in fact, he specifically said it in the case of oil, that raising interest rates would not bring down the price of oil. that's my concern. he's undergoing -- >> but recession does bring down the price of oil. >> he has said it won't. he is saying -- >> but he can't control what

putin is doing. >> that's exactly right. he cannot. he also cannot control supply chain kinks. he also cannot control covid outbreaks. he also cannot control price gouging by companies with market dominance. my only point is, before he engages in yet another round of historic rate increases that we think of this as an all of the above approach jerome powell can't fix everything, but if he uses his one tool very aggressively, he runs the risk of having the fed push our economy into a recession. i think that's a risk we should not take. >> you keep mentioning one tool. there has been some nascent discussion about whether or not congress would eventually limit their q seismt powers, their balance sheet powers are you on board with that is that widely shared on

banking? >> i think we're having a lot of conversations about what the fed has been doing over the past several years, in terms of qe. what i'm concerned about right now is what jerome powell is pushing, to use his one tool it's like, he keeping saying, we've got a patient with a broken leg, let's give them more antibiotics, and it's a mismatch inflation right now has a lot of causes, and jerome powell alone can't fix those causes, not all of them, but he certainly can tip the economy into a recession. i think that's a problem. >> i don't disagree with you on that, and you're right. >> good. >> but inflation is also a scary thing. it's the self-fulfilling prophecy. >> sure it is. >> we have 9.1% inflation numbers, that's hurting the lower-income folks the most, which could lead to more

entrenched inflation, and some might argue that's more dangerous than the jobs market, which is zooming we have 3.6% unemployment. we have element a record amount of job openings, so he's got room there on the job front. >> you can't make that argument in both directions at the same time larry summers has said we can deal with the inflation problem by one year of 10% unemployment, but you want to talk about how painful inflation is let's talk about how painful 10% unemployment is to the people who are unemployed that's the whole point the fed has a dual mandate. >> they want a soft landing. i know it's difficult. >> well, it's difficult. you say that from the comfort of your job we're looking at people who could be unemployed. that's what he's looking for here he's trying to get enough

contraction in the economy that employers will either cut back on hours, which cuts paychecks pretty dramatically, or will actually increase the unemployment rate. that's what larry summers is compa cheer leading for. my point is that's brutal for the people who have to live through that to have to live through that when we have other causes of inflation that needs to be attacked, other causes of inflation that will not be affected by the historic rate increases, i think that's the wrong economic decision. >> it's funny, you know, powell really is almost lie a rorschach, right there are others who argue he bent over backwards to give employment the runway to get maximized, and some argue say that cost him one of inflation he can't win between that that side and yours. >> i want to see an economy that works for everyone

not just an economy that works for those at the top yes, i'm deeply suspicious when a lot of folks at the top say, hey, it would be fine to drive up unemployment for everyone else before the fed takes more steps in that direction, i'd like to see us taking a more holistic approach to what is causing this inflation and collecting additional data on the direction that it's now going. >> some people are worried, senator warren, when you come out and you criticize the fed like this -- i know you've been critical of chair powell before -- that you're politicizing the fed it's really the one place in washington that has sort of stayed away from the political fray why not just go? private, or in your committees and make your case known why are you so public about it

>> look, this is how we have a public debate about any issue. the fed certainly has its cheerleaders right now as i said, larry summers is out there making headlines saying -- >> he was right on inflation he's a former treasury secretary. a slot of people think he's actually got his eye on the ball here with this debate. >> some people think he's right. i'd like to make the counter-argument i think 23 we're having a national debate, we need to make the argument on both sides why would you be opposed to that >> i'm not i'm wondering be fed independence, and how that can be a slippery slope. >> if we're having a robust open public national debate -- >> i'm just saying -- >> i'm not trying to call and exercise any quiet influence behind the scenes. what i'm trying to do is talk with the american people about the kinds of things that are happening in our economy part of what i want to do is

encourage the biden administration, which i think has definitely moved in this direction, and point out that every dollar that we spend on trying to get covid under control around the globe is also about inflation fighting that every time we're working on trying to untangle supply chains, that's also about inflation fighting everything we're trying to do to get supplies straightened out, even after vladimir putin has invaded ukraine is also about inflation fighting everything that the ftc, the department of justice is trying to do to break up these companies that have market dominance and are engaging in price gouging is also inflation fighting i want to see a lot more of that, and i think we should have a very robust national conversation about that, and where the fed's actions fit

within that broader effort to bring inflation under control. it seems to me that's the right thing to do in an open democracy, having that debate. do you not agree >> i think we do speaking of conversations, the chairman's been known for being proactive, in reaching out to the hill, lots of appointments with congress people and senators is any of what you're saying reflected in the conversations you've had with him? >> i'm not going to talk about private conversations. i don't do that. i've said what i've had said publicly, it's out there for anybody to see, out there for anybody to criticize if you all think it shouldn't be happening, you can all just end this interview >> let's not do that before we let you go, the chips act. we got the cloture vote. is it clear sailing from here? >> i think it will be, and i'm

glad you identify the importance of the chips act i said for a long time that we need industrial policy in the united states. we need to strengthen or domestic supply chains and get more manufacturing, more jobs in this country, but do remember, there's another half to this bill that is the science part this is something i've worked on for the whole time i've been in washington, that we're actually going to almost double the investment in the national science foundation that's an investment in basic research that's an investment in america's future it's an investment in our people it's an investment in our economy. it is an investment in our defense. it is an investment in who we are and the nation we can build for generations going forward. so i like to say it's a chips

and science bill that i think we're going to get through >> how do we make sure, senator warren, the money goes to the right places, it's not just a government handout to corporations, that the companies are accountable for building chips and protecting our national security, which is what it's really about? >> boy, you sing my song on this i have argued for stronger guardrails that are in the statute right now. also, a lot of this is going to be on the department of commerce that will actually be responsible for the chips portion much the money going out and for setting down the guidelines look, this money as gina raimondo said on monday, is not there so that these corporation corporations can take it and then do stock buybacks so they can increase their dividends to shareholders this about putting money into r&d,s? about putting money into these

facilities right here in the united states, and the department of commerce, gina raimondo will be the person who is going to be responsible for doling out that money for those who not only make the commitment to do that with the money, but also follow through on it. obviously on the science money, we have a long, long history of the national science foundation doing peer-reviewed research, making sure that money is getting out to our -- i always like to think, to our most promising opportunities, but also just a real long-shot opportunities, opportunities that we don't know what they will ultimately yield. this is about investing in basic science. eye very excited they'll have the resources to do this. >> do you think that we are going to be talking about production independence on

leading-edge chips in the next three to five years. >> that is the promise that is what the companies are telling us they can do, and what our folks who look at this say is certainly within our range, or to say it another way, if we don't make this investment, we can pretty much guarantee we won't be having that conference in three to five years that is -- that is the investment that congress is signing on for here, that we will be able to say in three to five years, we really are there. we have produced the jobs here in the united states, we have a strong supply chain, and we're making it happen, cutting edge back in the united states. just to bring it back to inflation for a moment, isn't this a signal, senator warren, of how the federal government can do its part, and yes, we

want chips made here, but it's going to take years. it's a limit to what the government can do on the inflation fight, and i think it only reinforces the argument it's going to be on the fed, whether they can address certain things like a chip shortage or not. that can certainly lower inflation in the near term this is an acute problem right now. that is my point. >> we have an acute problem, but understand being unemployed is also an acute problem. i just want to make sure we get some balance in this public discussion >> fair. >> that's why we have you, senator. really appreciate the time we got a lot of work done there, thank you very much, senator elizabeth warren. >> you bet. coming up, more on microsoft and alphabet the s&p up 14% as the comps are

up double digits the dow is up 146. "squawk on the street" continues in a moment. so you tap ibm to un-silo your data. and start crunching a year's worth of transactions against thousands of compliance controls with the help of ai. now you're making smarter decisions faster. operating costs are lower. and everyone from your auditors to your bankers feels like a million bucks. let's create smarter ways of putting your data to work. ibm. let's create

let's turn back to alphabet and microsoft today. a big impact on the nasdaq, which is up 2% we're joined by other own deirdre bosa with more >> a sense of relief this morning, certainly evident in their stock movements, relief that make -- results from both alphabet and microsoft, they did -- there was no meltdown revenue growth still in the double digits. the markets, they'll take it more importantly, perhaps, they were optimistic. they were still there, strong dollars, lower pc sales. resilience and alphabet. they were able to deliver despite the headwinds, certainly

proving more revisilient. microsoft signed a report number of azure cloud contracts they also forecast 40%-plus cloud growth in the fourth quarter. beyond the better themed, both companies did express uncertainly about the macro, and take google's youtube, just 3%, down significant ly. dee -- for more, make sure you join us. no shortage a topic today. we'll turn to chipotle results

it's up 14%. indicate rogers joins us now with chipotle's ceo brian niccol thank you so much, sara. good to see you, brian >> good to see you. >> while that's not chipotle's -- i'm wondering when you think it will trickle over to higher earners and when they start to pull back on dining out. >> obviously everything has seen the lower income and fortunately for us, i think we benefit for some tradedown opportunities with a higher-income consumer when we look back at what happened 2008, 2009, we weathered that fairly well, because he stayed focused on executing our business really that was the point of our call yesterday what it makes is when we provide

great culinary, ingredients and then deliver it with tremendous speed and convenience. we stay focus on what we can control. >> there's another price hike planned in august of about 4%. where do you see the company ending the year? how are you balancing the continued hikes. >> i think one of the things that's is important, on you value proposition, you know, we have talked about this before. , given that we're dealing with. we have had shares that we plan -- and hopefully, you know, going forward, we hopefully won't have to do that our value proposition is strong.

this is a good value, so we find ourselves to be in restaurants, i would love to hear about those. and ordering on digital and what the mix will be as we head into the back half of the year. we're focused on drive thr throughput and execution you might have seen this in our release, it's really accelerating as a result, we have a lot of employees that have joined us that haven't experienced the in-restaurant lines and servicing customers at the speed we are capable of, so we're investing big time

we rolled out a new labor -- our employees between that digital business and the front line business our digit at business continues to be 40% of the business. it's a multibillion dollar business we really do believe we have the ability -- that digital business and front line business very effectively because of the employees we have in the restaurant, and to help them be effective in the jobs. >> a lot of products have been on the digital products. how much are you factors in inflation into the -- if you want to keep them on the menu long term? >> that's something we evaluate all the time you know, currently we're doing pollo assado, and we finished testing a garlic steak, which is fabulous that will probably come on the menu shortly we focus on how do we give great

culinary, and then obviously it's got to be delish. that's what we continue to stay focused on the fact we're still president to deliver. >> i now you mentioned yesterday are you concerned about the labor push that started at chipotle >> look, we are always focused on investing in our people in about two or three years, you can run a team of 35-plus people, six-figure salaries,

surrounded with terrific benefits really powerful impact for your family i'm proud of how we handle our culture. if you want to work at chipotle, i think you'll find it's a great place to be. >> thank you, brian, for joining us. >> thanks for having me, kate. still to come, more on the consumer when we're joined by the ceo of mondelez. check out coinbase that's after the stock plunged, remember following reports of an s.e.c. probe stocks are still up double digits this month. we'll be right back.

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with dom chu. >> if you check out what's happening, markets mix friday a second perspective, although we're at session highs for the s&p 500. with the rallies in the tech heavyweights, communication service a big focus here westbound the technology specifically, paypal shares moving higher right now as activist investor elliott management reportedly takes a stake in the company that's according to a report from dow jones it's worth noting from paypal, since its all-time high, it's tluning a roughly $360 billion

to just under $100 billion today. a sharp move lower we'll see whether there's any catalyst higher for paypal shares in the fin tech industry. carl, i'll send it over to you folks at the new york stock exchange in the meantime, coming up on "techcheck" we'll look ahead to meta. one company says the company's rocket ship days may be behind it that begins in about ten minutes. meanwhile, nasdaseion q ss high about 2.25% don't go away.

take a look at shares of mond leez, shares under pressure despite beating estimates and raising revenue forecast on higher prices and steady demand. joining us for cnbc exclusive is mondelez ceo, dirk vander put. welcome. >> thanks. good to be here. >> you're seeing strong growth across the portfolio and doubling your sales forecast for the year what is driving that >> well, we see a consumer that is still very resilient as relates to biscuits and

chocolate around the world in developed markets, despite all the talk about recession and inflation, our categories are holding up quite nicely. we see 8% growth and the emerging market particularly strong at 22% growth this quarter. so while the consumer is clearly concerned, it is not yet showing that in its buying behavior and consumption behavior combined with investment in our brands and good innovation, that is reallycausing this good trend that we're seeing at the moment >> in the u.s., it does look like pricing was the story in terms of the revenue growth. volumes were a little lower. are you starting to see consumers push back? >> in the u.s., yes, that's one of the markets where volumes are flattish, shall we call it we do have at the moment a

squeeze on our supply chain. so those volumes would have been slightly better if our supply chain was working as it normally does still labor situation, still have transportation shortages and so on. so we can't service our clients in the way we want but there is a little bit of a reaction, i would say, not in a major degree, but, yes, you can see the lower social class consumer struggle pulling back a little bit from consumes in the u.s. >> in a typical recession, dirk, what we'd see, consumers pull back from the brands like yours and go into private label. is there evidence of that happening? is that something you're bracing for? >> no, no. i think you can typically see t that, as you said -- for instance f you take our top ten markets around the world, we see private label gaining share in two of the top ten markets, so nothing to really talk about if you think about the two categories that are very important for us, chocolate

private label is very small. biscuits, there is some private label, depends on where you are in the world, but not playing a major role at the moment emerging markets has barely any private label, so we do not see that what we do see is in certain markets, consumers are looking for good prices on their favorite brands like oreo, and they are switching stores. that can happen. we do not see the private label go up at the moment. >> what about on the pricing side and on commodities. you mentioned on the call that the commodity inflation was starting to ease, but that you don't expect inflation to come down any time soon what do you mean >> so a number of factors here first of all, the commodities are not the only factor of inflation. there is going to be labor and wage inflation there's still transportation inflation that is going on

another factor for us as a company is that we hedge we are protected for this year, weave locked in our prices for commodities. for next year, the prices where we are hedged today are higher they're coming down, but still will be higher than where we are today. that's the second factor i would mention here that's what makes us say inflation next year for us will still be higher. >> what about the dollar that strong dollar really hurts a company like yours that got, what, 80% of your revenues overseas is it going to get worse >> it's 75% overseas i hope it doesn't get worse. the euro is in parity with the dollar i hope it does stay there. we do believe in the rest of the world we will floebl this situation, but for next year we hope things will ease and you will see the opposite effect for us where that 75% of overseas

starts to help the results of the company. >> if it reverses. finally, dirk, is the takeaway -- this week we heard from coca-cola and mcdonald's and you and kraft heinz, all good numbers, showing strong growth that people have to prioritize eating and snacking in this inflationary environment. they're doing that at the expense of other discretionary things is that how you would sum up the consumer right now >> yes consumer is very aware of what's going on, is losing confidence at the moment they do not reflect that in their grocery shopping, the basket remains the same they're confronted with higher prices and they offset that by maybe not going to the big ticket items, new tv or a new washer/dryer they're also buying less clothes. we still not travel at the same level. eating out is affected those are the different areas where they aresaving money at

the moment. >> really good to get a snapshot from you dirk van de put, thank you >> thank you later today on closing bell, fed claire jay powell and former national economic council director gary cohn joins us. that does it for us on squ"squa on the street" i'll send it to "techcheck" which starts now >> i'm carl quintanilla with jon fortt and deirdre bosa today the fed tries to stop a three-day losing streak. microsoft and alphabet the key gainers here a look at those numbers and whether they're really something to celebrate also, speaking of low expectations, meta facing down its first revenue decline ever and then more on tech's biggest moves today outside the mega caps, spotify, subscription games, shopify's weak outlook. that's all