dollars in climate and energy spending. it is thursday, july 28, 2022, squawkbox. good morning, welcome to squawkbox here on cnbc. we are live from times square. let's take a look at the u.s. equity futures at this hour. joe was mentioning the huge jump we saw yesterday. dow futures are off by about 40 points, s&p off by 13. the nasdaq down by about 96 points. but this comes after a huge rally yesterday following the fed rate hike.

the dow closed higher by 436 points. that was a gain of 1 1/3%. the s&p was up by 2%. the nasdaq was the big winner. stocks there up by more than 4 , and that broke a three-day losing streak by the nasdaq with its best performance since april 2020. of course all of this came as it looked like the fed was taking a slightly more dovish stance. we will see what comes and talk about that more in just a moment. you should see the reaction in the treasury market, where treasury yields have been weaker than we have seen for quite some time. 10 year right now is trading below 2.8% i guess on the expectation that may be the fed will continue to raise rates quite as rapidly. two-year is trading at 7.9 percent, so it is just below 3% as well. >> let's talk about that. facebook's parent company meta said they are expecting a drop in revenue following a surprisingly weak forecast for the current quarter that follows a drop off in demand

for digital ads. ceo mark zuckerberg addressing the advertising demand issue. >> we seem to have entered an economic downturn that will have a broad impact on the digital advertising business. it is always hard to predict how deep or how long the site cycles will be, but i would say the situation seems worse than it did a quarter ago. >> zuckerberg says the company will reduce headcount over the next year as it tightens its belt for the economic slowdown. some of these issues are still facebook-centric, given their own challenges. >> privacy makes it tougher for them to get through. i think we look at this maybe more as a proxy of what they anticipate from small business, though. if they are getting hit a little harder, too. >> on the advertising side, i think some of the total numbers in terms of people on the site, all of that has diminished the

challenge. >> i am going to wait for the next one. i skipped facebook -- i do every three. i did not do my space, by the way. we are going to see our friend dennis neil from the wall street journal. that is what we have been saying. stop panicking about the u.s. economy. watch the jobs. anti-inflationary pressures building and the decline in oil prices, so even if it is two quarters, if we find out that it is two negative quarters, maybe we should add a little thing to the recession definition that it has got to be 5% to call something a

recession. so okay. we got two negative quarters, but maybe they are one off, two off. but -- >> crazy circumstances coming out of the pandemic, but -- >> manchin had been saying that i'm not going to be part of any -- adding any additional fuel to the fire. i just added, what happened to our $58 million deal? it is 280 million now? and now the thing that manchin mentioned that will cause some republicans not to want to do in the house, this one just ended up at $739 billion for this new deal, plus the $280 billion for the chips bill comes out to 1019. is that a t? manchin stopped the 2345 that was initially -- >> manchin hasn't checked in with kyrsten sinema yet.

i don't think anybody has checked her pulse in a while, because they didn't think would be a possibility. this deal was kept so quiet that i don't think they checked with sinema, because her office hasn't said anything yet. >> when you talk about manchin, i used to think, wow, what a rock. all the pressure that he is under. remember the other side of the take, we have been negotiating with him in good faith. and he pulled the rug out from under us, and he betrayed us! now the tables are turned! what happened? you said you wouldn't do this! what happened? what happened? how much pressure is he under, not just from the left, but just from the mainstream. >> i would give him the benefit of the doubt that he would look

at a deal and say that this is best for his constituency. >> west virginia, a climate deal? >> yeah. there has got to be something in it for west virginia. the mac let's wait for the details. is there anything waiting in the market that made jay powell say, wow, this is different and i like it lexi >> joe, there was a lot of head- shaking in the press conference and afterwards about what did he say that we missed that caused the market to rally? the fed expectation is raising rights 75, and while the market heard this dovish fed chair, they were more skeptical. markets seemed to latch onto the statement that fed rates were at neutral, and the fed could slow the rate increase at

some point. >> today's increase is the second 75 basis increase in as many meetings. well another large increase could be appropriate at our next meeting, that is a decision based on the data we get between now and then. we will continue to make our decisions meeting by meeting and communicate our thinking as clearly as possible. >> like i said, a lot of fed observers are scratching their head about the market reaction. some find powell's remarks downright hawkish. powell said the economy may have to run below potential to bring inflation down, and that would mean we have to run in restrictive territory. we worry that some of the markets might be seeing the pivot they want to see from one phase of policy to another that is naturally more data

-dependent. now powell reiterated the meeting forecast for 2022 for the fed as the best way to know where the fed is going, but the market you can see has that priced in at 280 for the year. so there is one famous observer who said that's the rub right there. the fed chair raising rates to 380? if the fed thinks this market has this wrong, we might hear some hawkish talk in the weeks ahead by fed officials to reach that expectation. so this might be one of the things where the market knows the fed better than the fed knows itself. >> what are we going to see today, steve? what do you think? >> yesterday after that data, joe, i hinted at this. i didn't have the information in front of me, but the major data points that came out yesterday put a little breathing room into the gdp number this morning. so you had guys like morgan

stanley ray 0.9 to 1%, jpmorgan went up 0.7%. a bunch of those went slightly above one. so we won't get that negative quarter according to these forecast and according to the consensus forecast. so we don't have to have that debate. >> all that spending would be wasted? all the spinning, i thought they knew! >> for the record, atlanta fed is still negative. they went up by half a point to -1.2. so that could still be right and we could still have to have that debate as to whether or not we are in a recession. i continue to contend that that is not the case. >> what about my idea? it has to be two consecutive quarters, and unemployment has to be above 5% for it to be called a recession. >> i wouldn't put a number on it, joe.

i would -- i like the direction of what you are talking about, and the magnitude. it has to move in a meaningful way. i think that is a good metric to throw on there. >> okay, thanks, steve. for more on the fed decision, let's bring in roger ferguson who is a distinguished fellow at the council on foreign relations. he is the former ceo of tiaa and a cnbc contributor. roger, you not only follow this for a living, you used to do this for a living. sitting in the fed making these decisions. what did you think about their tone yesterday? was there a reason for the market to take off the way it did? >> i wouldn't go with a much more dovish fed. let's start with what did happen. they did come in with 75 basis points as expected. there was no defense, which i think is important, because it does indicate that there wasn't 18 1% that people were worried about. but i think that what happened in the press briefing was the statement from chair powell suggested that 75 might be

appropriate, and i think that sounded to people as though 50 may be more likely than 75. to be fair, i think they missed the bigger picture, which is a strong statement around a 2% inflation target needing to see convincing evidence, and my previous statement reiterated that the path towards a soft landing was now potentially getting narrower. i think the market may be hearing what they wanted to hear, perhaps leaning a bit more dovish than the chairman and the committee itself. >> what you think about data dependence? as steve mentioned, we have decent numbers that have come in very recently. numbers that were better than expected, and that could help on the gdp picture as well. >> i think there are separate issues. one is to debate whether we are in a recession. i saw chairman powell handle that jointly and carefully by saying that with a strong labor

market, even if the gdp read that we did later today is slightly negative, the broader question on data dependence, i think he always adds to that and the evolving outlook, because we know that the data coming in is by definition historic, and the have to think through the positioning of their interest rates, which have a long and variable lag versus outlook. i think the market didn't hear that either. >> let's talk about the real economy and what we are hearing from the ceos about earnings calls. you are a former ceo yourself. you hear walmart talking about how its customers are feeling the pinch from inflation, and they are not buying as many discretionary items. you hear from at&t saying that they have customers who are paying their cell phone bills a couple of days later, which by the way, when you continue to

know how important a cell phone is today, that is striking. then you have somebody like mark zuckerberg from facebook saying that the advertising economy is definitely seeing a slowdown, and they are going to have to adjust. all of those real-world data points that are kind of up-to- the-minute, what does that tell you? >> i think it tells me exactly where you are leading us, which is that in fact the economy is softening. we heard -- we sought in the statement from the fed that there opening words changed to reflect that recent data had showed some softening. it does show that the toll of inflation on households is noticeable. individuals are struggling to make ends meet. the macro data shows the same thing. that is that in real terms, adjusted for inflation, we still see that retail sales are negative. we see in comes negative. so all of this is pointing in the same direction, which is that inflation is taking a toll on the economy.

things are slowing, yet we still have a very, very tight labor market, and inflation itself is not really come down. so that is the conundrum that the fed is dealing with right now. >> what are the one or two most important data points that the fed will be watching over the next couple of months? >> one obviously is inflation itself. what i found interesting was the power talked about both headline inflation and core inflation, so they are not going to let go of what individuals deal with, including energy and food. they are going to be looking at inflation expectations, which come out for both market indicators and also a university of michigan survey has had a big impact on them. they are also very focused on this question of job creation versus job openings. when you listen to what powell had to say, part of what he is hoping for is that the job opening numbers start to move down, allowing for a softer landing without a dramatic increase in unemployment. so they look at all those incoming data, and i think they

will also continue as everyone else does to listen to some of the anecdotal information. because you heard some of that yesterday as well. >> roger, thank you. good to see you. >> thank you. coming up, two big stories out of washington. the senate deal where joe manchin reached a deal with chuck schumer to revive president biden's policy priorities. details after the break. you are watching squawkbox on cnbc.

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news out of washington. senator joe manchin has agreed to back a package aimed at lowering carbon emissions and curbing healthcare cost, while raising corporate taxes. it is a revival of the reconciliation package that breathes new life into president biden's policy priorities. according to the senators, the deal would raise roughly $739 billion, much of that coming from a 15% corporate tax minimum. closing the tax loophole on carried interest, and enhanced tax enforcement efforts at the irs. of that revenue, about $369 billion would be spent on climate change and energy programs, including tax credits for buying electric vehicles. $64 billion would go towards extending healthcare subsidies for three years for some affordable care act users, and the rest of the new revenue, about $300 billion would go towards reducing the deficit. republicans are very likely to oppose this bill if it comes to a vote, so nearly every democrat in congress would have

to back it. make that every democrat in congress. solar stocks popping on this announcement though. solar up at 9 1/2%. some of the gains at some power. solar edge tech up by 5%. by the way, sinema has said in the past that she doesn't want to close the loophole for carried interest. >> by the way, there is one component of this that i hope everybody knows. they will fund the irs so that they collect taxes finally in this country. >> there is a lot of revenue that comes in. >> i don't know if you saw the number. $124 billion will be collected under the new system. this is money that is already due!

>> i would rather see them do that. >> i just like to say up front that i pay all my taxes. all of them. >> right, and if you desire you are going to hire a lot more of these guys, it would be a waste of time. >> we don't have any deductions anymore! >> it is hard for people who are w-2 learners to cheat. >> it is not a problem. >> there is a major push looking -- i just wonder, do we have to pass this before we find out what's in it? what's in it that got mentioned -- >> you want to know what changed. >> i think we need to pass it to find out what's in it. everybody else has heard of that. we need to pass it -- pelosi

said we need to pass it to find out what's in it, because maybe there is something in there for manchin that is not for sinema . the pressure on her would be immense. i can understand manchin. if he is a democrat, and he is, he and he says i don't want to do anything with climate change, i don't want to do anything with prescription costs, how does he walk into that office and called himself a democrat if he doesn't do some of these things? if he wants to do what he used to do, just change parties. you can still get elected in west virginia. but i guess if he is a democrat he has to act like one occasionally. in other news in washington, the chips bill

which aims to help the u.s. compete with china in the production of semiconductors. the bill now has passed, and lawmakers hope to cap it before the august recess. that's not the real number, though. the real number is $280 billion. and the usual. people on the right are saying if it is such a profitable industry, why does it need subsidies? it's nice and bipartisan. no, on the right, they say there are too many strings attached. the right did say that, but on the left there isn't going to be enough, and we don't want any buybacks, any dividend increases, or anything that could -- that's what i really don't understand -- people that maybe work there. >> that lays out what the rest of the money is for. $39 billion for semiconductor

manufacturing research. >> what if it goes to $1 trillion in spending when trying to cut demand? >> it will be interesting. when we come back, two pandemic plays moving in opposite directions this morning. we are going to take in the numbers from etsy and squawkbox next. and a programming note, don't miss the cnbc special tomorrow night. it is called the tech trade, and it includes an exclusive interview with investor kathy woods. that is coming up tomorrow night at 10:00 p.m. eastern.

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two pandemic stocks moving in opposite directions. the first is teledoc . the stock has now plunged 78% in the last year, however etsy shares are jumping this morning. the e-commerce company beat estimates with revenue growth of 10% in the quarter. the company cfo attributes the growth to an increase in marketplace transaction fees, in addition to the company brand portfolio. the company president is going to be talking to us about what that announcement means in just a moment as we had to a break. a look at yesterday's s&p 500 a look at yesterday's s&p 500 winners and losers our third bark-ery..

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good morning, and welcome back to squawkbox in times square. checking futures after yesterday's big advances, they are marginally low. we are waiting for the gdp number later this morning. down 38 on the dow. big day in the nasdaq in years in fact, meta might be an issue there. and then the s&p, down 11 . breaking news for you. jetblue will acquire spirit airlines in a just-announced deal that follows yesterday's vote. the spirit shareholders rejected the previously

proposed merger with frontier airlines. jetblue will pay $53.30 per share in cash. that is the same as the prior proposal. some of the headlines on this, they are saying that $33.50, including a prepayment that is payable upon spirit stockholders' approval of the transactions, and a ticking fee of $.10 a month that starts in january 2023 with a diluted equity value and an adjusted enterprise value of $7.6 billion. this is breaking news. we are going to keep digging through this. we also have a programming note for you. at 7:30 will bring you an exclusive interview with the ceos of both jetblue and spirit air. we will see if this will be approved by regulators. >> what makes it interesting for shareholders, finally, was this idea that we are basically

paying you irrespective of what happens here, and you are going to get a decent amount of money for your risk, which is a little bit different from where we were. in the meantime, let's talk about stx, because stx is launching a stock trade. anyone in the u.s. can trade stock in addition to crypto on the platform. we have an exclusive interview with brett harrison. brett, you are now getting this business in a much bigger way. let's talk about what your platform does, and frankly to the extent that we can discuss it, how is it different than what others are doing? >> absolutely. so there has been a clear trend for brokers getting into the crypto business. traditional brokerages like -- robin hood opposite the most recent one in the last decade, but the ability also announcing that they are going to add bitcoin to retirement accounts, and brokers as well working on adding bitcoin to their services. so we are moving in the opposite direction now.

we have -- the biggest difference for us is that we are trying to use a model that doesn't rely on payment for order, which is a controversial practice that has resulted in much of the retail liquidity moving off of public exchanges to private wholesalers, and we think that is resulting in worse market quality for all participants over time. we are trying to reverse the trends as much as we can. >> so the other piece is the component, which you don't have it. the question is, you don't have it, but you are not using that as the method to get paid, then how are you getting paid? >> right now it is free for all users. starting in a month it is going to continue to be free for all purchases under one share. one thing we learned from private data is that the amounts of flow result from fractional share buys, ones that are underneath one share. high-priced stocks are one share, but from there we are

going to be charging a commission on each trade, which is like going back to how things were in the old days. for us, we think that is going to result in a much more transparent and fair and honest pricing while we continue to route these orders to public exchanges, rather than having to rely on private dealers and individual wholesalers, where shares are being filled off of the exchange. >> what is the commission rate? >> we will be charging five basis points per trade, but then we are going to have two basis points here as well. so what is going to be a pretty small fee, especially compared to the crypto side. but our users especially on the crypto side are used to this very simple and honest and fair idea of just charging a flat percentage of the trade value, rather than having to think about whether the quality is deteriorating and people are truly getting honest pricing. >> can you do that profitably, or is it effectively the crypto

side subsidizing the trading on the stock side? >> it would be probable on its own, but it is not going to be as high-margin as our crypto side. the value side that has been bringing value to the platform is the idea that we can bring more customers to our entire product. to have one holistic investing product for crypto and for stocks, with of course crypto being the main business that we have gotten into. that is really the area for higher margin when it comes to fees. >> last time we talked, there was a lot of speculation i believe around your founders decision to buy steak and robin hood, which you compete against, then speculation that you would buy the entire company. you shot that down. speak to what's going on there. >> yeah, sure. it is true that this platform absolutely does compete directly with robin hood, and in particular with the robin hood model, which does rely on wholesalers for all of its flow, it doesn't charge fees in the way that we do.

what it means is that we are going to build out this platform regardless of what happens in the future with robinhood, and we are sticking with that. we have our own platform. we made a big acquisition of our clearing for, embed, so we will see where that heads in the future based on the success of the business. >> when you say we got to see where that heads in the future, what do you mean by that? do you still think there is a chance that the company would want to buy the entirety of robinhood? >> it is not something we are in active discussions about now, but we have to see where both the market heads in terms of the stock price of robinhood, but also how much we want to continue to deepen this business and think about customer acquisition. we are looking at a number of different targets across the landscape from brokerages, crypto firms, at a time where private and public equity prices are down, there might be

opportunities for consolidation. recently we discussed possible negotiation with different exchange about consolidation on the international side. so these are things we are looking at all the time and evaluating multiple kinds of deals. robin hood is just one of them. >> let me ask you separately about what is going on right now with u.s. regulators and coinbase, another of your competitors, about effectively selling what they believe are securities that were never really registered as securities. coinbase has actually been much stricter about what they have on their platforms. what do you think that portends for you? >> ftx u.s. has been even stricter about our lifting. we have 25 or so total tokens on our platform, an order of magnitude less than all of our competitors. it is exactly because of this issue of not knowing exactly whether the ftc is going to deem some of these tokens as

unregistered securities to therefore offer to investors. to make sure something is secure, you have to run your own analysis on the token, but it could be that the regulator says here is how we treat this token, and it is an unregistered security, so we are going to bring enforcement action. this is also why we have been diverting a lot of our business efforts into other things besides just tokens, for example getting into stocks and getting into futures and options through our application for margin. so it is going to be very interesting to see where this ends up now. obviously a lot of discussion about regulation by enforcement, priority over what kind of assets you can list, and hopefully there will be some kind of priority making its way through congress over the next six, 12, 18 months.

>> finally, brett, crypto has been quite correlated with the stock market, and for a very long time people said it would be an uncorrelated asset. do you see a time where it becomes uncorrelated, or do you think that it is an uncorrelated asset, and that's what it is? >> yeah, i would say three things. one, larger institutional capital starts to come into crypto, and i think that would start to create more idiosyncratic movements in regards to crypto, and number two, as the investor baits get more informed about what makes either better than solana, there will always be properties. we consider risk assets that will be on people's portfolios and balance sheets, and people are looking to sell things in a

downturn. they are going to sell all things in their portfolio together. somehow the correlation is always going to be there. >> great. we appreciate you being with us. we look forward again to talking to you soon. coming up we have a big lineup still ahead, including the ceos of jetblue and spirit air on the deal move that was just announced. plus top executives from honeywell, southwest airlines on earnings. that's going on next. we will be right back.

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welcome back. honeywell just out with quarterly numbers. the company beating estimates

by 710 on adjusted profits of $2.10 a share, also raising its for your forecast. the company ceo now joins us in the next hour. >> a lot of different things happening. second quarter orders were up 12 percent, their backlog also up 12%. they are raising their segment margin and their adjusted earnings per share guidance for the year, and i think that will be important, too, the segment margin, because we have been watching so closely for any company that still thinks inflation is going to cut into their margins. we should also see that a new officer is going to be stepping into this role. he is somebody who was already the ceo of honeywell performance materials and technologies. he has been appointed to this new role, and under this all the presidents of the honeywell strategic groups will report to

kapoor in this role. >> right. we look forward to that interview. in the meantime, mark earned 17 points above consensus forecast. it gained from keytruda, the groundbreaking cancer treatment drug. and southwest airlines joins us now with their numbers. phil, we hope you got this right. >> we think we got them right! this is a bead on the top and bottom numbers, joe. for the second quarter, the company earning a profit of $1.30 a share. that is better than analyst expectations. on the revenue side, just a little bit better than expectations at $6.73 billion. southwest q2 revenue, record orderly revenue. so let's keep that in perspective. we are hearing with southwest,

that the cost per seat mile for the third quarter, this is what people are going to be focused on. 12 to 15%, generally in line with what we are hearing from other airlines as well. q2 fuel is 3.36 dollars per gallon, in line with guidance that the company had given previously. 2022 fuel costs, that is going to be up $.20 compared to what the company previously expected. it is adding short-haul flights, primarily focused at the business market in the second half of this year, and it is also on target for adding 10,000 inquiries not this year, but they are going to be slowing down hiring in the second half of this year. one other note. the company is not going to be receiving as many of its 737-max as expected. the company says it will receive fewer this year from

boeing. we talked about boeing not delivering all the maxes that we talked about. there will be fewer planes at southwest this year. they are also dropping the requirement for flight credits to be used by a certain date. those expiration dates are going away. you don't want to miss our exclusive interview with southwest ceo bob jordan. that is coming up at 8:10 this morning. lots to talk about with bob on a quarter where they beat top and bottom line. we will get his perspective on the second half of the year. guys, send it back to you. >> what about the jetblue spirit deal? they kept putting it off. was that the writing on the wall sooner or later, big bad jetblue was going to prevail? >> i think the main question is the one that you guys asked. how does ted christie square this deal with his previous comments, and he had a lot of them, many of them on our air,

where he said this deal with jetblue dead in the water with regulators. how does he square those comments with this deal now? obviously -- >> you are a shareholder -- >> you are getting paid in advance while you are waiting, but that is the question everyone asks. >> all right, chuck emma we will see you at 7:30. pfizer just added $2.04 a share, and that also topped estimates. pfizer released its for your forecast. coming up, tech stocks surging after the fed intest te. re the nasdaq had its best day since april 2020. we dig into that big move right we dig into that big move right after the break.

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welcome back to "squawk box," markets saw a broad-based rally yesterday afternoon. the nasdaq closing 4% higher boosted by microsoft good morning to you, jared we've had this sort of surge in the market, and also our earnings have been mixed >> a lot of it comes down to what has been priced into shares microsoft and google were great examples not great results, but significantly better than feared if you were to tell me we were in the middle of a recession and google was growing, despite all the headwinds that we're talking about, despite the headwinds of

the u.s. dollar, generally speaking, these have been pretty okay so certainly think pretty positive results meta more mixed last night, but a lot comes down to what's been baked already into these stocks. >> part of this is a multiples story. what do you think is a tfair multiple to put on these stocks given where the economy is >> it's a tale of two cities for the calendar of 2022 the first half was all about multiple compression, the second half is how negative are these rer revisions going to be. you look at dominant share with respect to search, and it's trading at ten times ebita i'm not going to opine on what the right multiple is. there's a lot of factors to think about. i think the interest rates are

significant. and that we're inverted, it's really important for tech which is supportive of a supported market rally especially for software stocks >> how do you feel about what we heard from mark zuckerberg last night when it comes to digital advertising and his concerns, versus what you're hearing from alphabet and they're concerned. i don't want to suggest that they're not concerned. but it really did feel like two different economic situations taking place and i don't know if what you think is happening at meta is idiosyncratic or is directly about what's happening at meta >> there are headwinds happening at meta. alphabet grew revenues by 13% year on year meta registered its first revenue decline. they're both impacted by foreign exchange but what meta is facing is

really significant competition, especially from tiktok and they're facing issues with respect to changes that apple has instituted from a platform change perspective none of that is real ly being impacted from a google standpoint but a lot of headwinds that meta is facing. >> becky and where i talking about the issue of small businesses, how much you look at meta and say is this representative of a sort of larger economic headwind or do you say not really >> i'm more in the latter camp let's not make things that are incredible right now google certain will alluded to pushouts everyone's impacted, but i certain certainly think meta's not going to be a great proxy for the state of the economy meta's pricing was down 14% year on year for the quarter.

from >> great to see you. we really appreciate your perspective this morning >> thank you so much still to come, a huge lineup ahead, the ceos of jetblue and spirit air joining us. and we'll be talking to the ceos of honeywell and southwest airlines, and u.s. psintrede of kraft heinz. "squawk box" will be right back. . i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire okay season 6! aw... this'll take forev—or not. do i just focus on when things don't work, and not appreciate when they do? i love it when work actually works! i just booked this parking spot... this desk... and this conference room! i am filing status reports on an app that i made! i'm not even a coder! and it works!...

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good morning stocks jumping after the fed's second consecutive super sized rate hike. on today's agenda, our first look at gdp in the second quarter. deal in the sky. spirit airlines calling off its merger with frontier airlines and accepting jet blue's offer the ceost had join us plus the president of kraft heinz. the second ohour of "squawk box" begins right now

good morning, and welcome back to "squawk box" right here on cnbc. we're live at the nasdaq market site in times square i i i'm andrew ross sorkin with becky quick and joe kernen the dow is off by about 45 points the s&p 500 this morning off a little over 11 points we also have a whole bunch of earnings that are hitting. >> let's start with earnings from our parent company comcast. adjust the profit coming in at $1.01 a share. a lot of other things people consider, ebita, which was up

10% to $9.8 billion. it dposz oes suggest they have pricing power. when you look at the total broadband customers, total broadband customers were flat in the quarter. the pace of net additions slowed in the second quarter. during the pandemic there was the pull forward where they added 3 million customers during that time. it looks like they're still working through some of that broadband connectivity was slower b slower because of a slow down in housing moves. reversal of pandemic patterns and increased competition. you see a lot more fiber out there from the likes of t-mobile, at&t and other offerings from t-mobile and others they see these as temporary headwinds and like the strength of their business going forward. they say rpu continues to grow

net adds, a $10 billion division they say lots of room for run away growth. ebita up 20% theme parks continue to break records. i think orlando in particular. the orlando universal park did very well. studio's revenue was up to $3 billion. that had "jurassic world" dominion in that peacock's subscribers were relatively flat at 13 million. they did anticipate adding more in this quarter. this came after the super bowl and olympics real le ly helped things >> during the pandemic, all people cared about was the incredible broadband growth and the stock ran up to $62 a share. so now it's dropped.

it was below 40 for a while. now broadband is flat, and people immediately say, oh, my god, look, broadband is flat but the theme parks are hitting the cover. video customer losses minus 521,000 compared to minus 399,000. so keep adding up 521,000 every quarter, and it starts turning into millions, and you see why peacock is important but people do look at video customer losses, but comcast every quarter says we're not chasing unprofitable -- >> subscribers >> subscribers >> the fundamental question is, is there going to be a moment at which shareholders and investors look at comcast and aren't just looking at that number and tart loo start looking at march ggin and

other things it's like when people looked at apple, and it was phone, phone, phone, phone, phone, and then they started looking at other things. >> it's still funny about attitude oh, my god, you have so much dependence on cable. you got to get into streaming. and then so everybody gets into streaming. now everybody's in streaming, wait, nobody's making any money in streaming you got to get out of streaming and back to the bundle >> are you suggesting that the st street is fickle >> the street is fickle. >> cash is still king. and what did yo you do with it >> gaming?

i'm never cutting my cord. i'm i i'm never telling you right now, i'm never going on the internet to watch something and have to find it. i want to thknow when it's on every week, "60 minutes", whatever it is from >> is the market giving it a r premium? >> i want to mention sky they had adjusted ebita up 54.1%. >> when we say, i traderead, its like our best ever like the biden administration, we're having the best ever under our administration there's a lot of things that depend on how you say it

>> in the mane eantime, we want get to dom chu with a look at the premarket movers >> let's kick things off this the big cap pharma industry. just a little over 20,000 shares of premarket volume. estimates helped along by covid treatments a choppier trade developing there. next up, you have merck. just down fractionally about .1%. keytruda, billions of dollars of sales there. and we'll end on honeywell,

starting to peckick up a little bit. it boosted its sales strengthen being its aerospace operations relatively unchanged i'll send things back over to you. >> all right, dom, thank you. yesterday the markets were very encouraged after fed chair j. powell down-played the possibility of a recession >> i do not think the zuu.s. is currently in a recession and the reason is there are too many areas of the economy that are performing too well. this is a very strong labor market it doesn't make sense that the economy would be in a recession with this kind of thing happening. >> our next guest says the market already priced in a mild recession. let's bring in head of the investment strategy group at goldman sachs and goldman's

chief investment officer it's good to see you just distracted as i listened to that, because if we want to eve eventually impact demand, j. powell to say wow, things are really strong in the labor market by saying that it almost sounds like things are so strong we got a lot more work to do. i think he's saying it in a way to allay our fears about an imminent recession, but if that's the only tool the fed has to try bring down inflation and saying it's going to be real re tough to cause a recession, just means he's got to go further there's a lot of pluses and minuses and nuances. how do you see that comment? >> when we look at the market and the 1.5% rally yesterday we like to remind our clients that it was not just driven by

the fed and chairman powell's statements if you think about the rally, it started in mid june. so the trough of the current rally was in mid june. so we've had about six woeeks o price appreciation so from our perspective, there was just so much negative sentiment priced in the market that when we look at surveys, when you look at investor positioning, their pessimism, the small amount of risk that anybody was taking actually worse than what we saw during lehman and the financial crisis. what you have is downdraft and this time it was high to low 24%. after about six months to 12 months you end up with a market generally being higher on average, higher by about 12%.

and if inflation has peaked as is our base case, typically the market rallies after that. in the last cpi, if they were the peak, chances are the market is going to be about 10% to 12% higher so our recommendation to our clients is to focus on the big picture and stay invested at this time with tactical tilts here and there for example in the energy sector. >> makes a lot of sense. and you're not in the majority right now. we have a lot of people on looking for new lows again and again and again, and we brought up the june 16th low, which is where we saw it. we did not see the capitulation or the vix soaring, the 38 or 39 that a lot of people are looking for. and many, many, many people are ng hanging their hat on that, that we haven't made a prominent bottom they think this is an

intermediate rally in a long-term bear that's going to take us to new lows. to you think we've seen the lows? >> if we continuaely look at downdrafts, looking at all recession since world war ii, when we think about a down 24%, is there a chance the market goes down another 5% from the lows, let's say 10% from current levels for sure, there's probability. we also have to recognize at that there is probability that's not insignificant of a recession. not necessarily just because of the move by the fed, but because of the incredible tightening of financial conditions our team in goldman sachs' economic research group have a financial conditions index it looks at the equity markets, the incredible strength of the dollar it looks at changes in fed funds but also changes for example in the ten-year and in the spread

the of the corporate market. financial conditions tightened by 3%. that is roughly, very approximately equal to the fed tightening by 3%, and that slows down edigdp in the future by 3%. without the shock from the russian invasion of ukraine growth was going to be around 4. one would say okay, maybe g.o.a.tgrowth will be around 1, 1% but the reality is as chairman powell said, the underlying conditions are quite strong. there are pockets of weakernweaknesses and pockets of strength. it's not a geffeiven that we're going to have a recession.

>> i think in the nasdaq at 16,000, it's like, wow, that would be tough to buy at 16,000. i wish it was cheaper. then it gets down to 10,500, 10,700, now suddenly we're at 12,000, and yesterday you saw that rush to buy the nasdaq. does the train come back and say, okay, i know, now you wish you had bought at 10,600 >> the bus does sometimes. from s >> sometimes the bus does. >> if you loved it at 16,000, why wouldn't you love it at 10,000, if you are a wrlong-ter investor i don't noecht thank you, though that's more of a sentiment indicator. you have a bunch of actually underlying analysis, which i don't have time for. anyway, thank you.

i'm kidding. very good to talk about, i'm not going to squeeze the charmin in this case. good to have you on. coming up, the ceo of honeywell on the company's latest inflation quarter and what he's seeing in the economy. and ralater, the first read of second quarter gdp the dow off about 41 points. we're coming right back. portings has everything you need to gear up so you can show up. with the widest selection from the hottest brands. like nike, jordan, hoka, the north face, and more. the looks you want. the backpacks you need. all under one roof. when you're running short on time, one-hour pick-up is always an option. and, with our best price guarantee, if you find a lower price, we'll match it. with looks this good, it's never been easier to sport your style.

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made to do anything so you can do anything. honeywell beating estimates by 7 cents with adjusted quarterly profit of $2.10 a share. also raising its full-year forecast joining us is honeywell's chairman and ceo and thanks for being here this morning. it looks like the numbers beat on every met wreck i can see it's pretty counter to what we've heard about the coming recession and a slow down. what are you seeing? >> well, good to be with you, becky. obviously, we're very pleased with our q2 numbers. like you said, we beat on every dimension. and our market exposure is really very favorable.

we talk about our top two businesses being aerospace and energy we see very favorable trends our orders were up 12% our backlog is up 12%. so a lot of these headwinds that others are seeing of us being a little bit more long-cycle oriented we're actually seeing a pretty strong environment, and there's a lot of debate out there about whether or not we have a recession coming in my view, we look at a couple of our top markets, namely, aerospace, technology, building space technologies all of these saw really robust growth in q2, and i suspect it will continue. >> how much of what you're seeing is just because of this huge surge in travel demand after a shutdown in travel during the pandemic? >> obviously some of that is attributed to it but if we look at the oem manufacturing rates, they're all

trying to go up, whether it's business aviation or transport the air miles are up we're nowhere near where we were in international travel yet, and we don't expect that to fully recover until 2024 we're going to be in the 2019 levels for narrow bodies next year, and wide bodies in 2024. although we've had some trend this is air travel, we think there's still more ahead and obviously, as i anticipated, private aviation's been a big winner, too. that's been up substantially, both on the air miles flown as well as the build rates and order rates for some of our customers. >> one of the big questions has been theis issue of inflation an how much that's going to eat into people's profits. you're raising your earnings per share but segment margins, meaning you think you can handle higher costs coming in

or maybe you think inflation's slowing down >> inflation's been something that's been tough to deal with for a while. we have to remember, management teams have not had to deal with inflation at this level for probably, you know, 30, 40 yea really, it's a new playbook. so we've been trying to adjust our costs, our pricing base. i think we're doing a relatively good job of that our commercial excellence programs mix is favorable. so we're really trying to manage all the levers we can to continue to grow the top line and grow the bottom rhline at t same time, which frankly hasn't been easy in this environment, because we're trying to understand where the inflation is, where it's coming from i would point out that one of the key transformations for honeywell the last three to five years has been our digital savviness, particularly in terms of how we operate the company,

and right now i can tell you exactly what the inflation is for one of any one of our 37 business units, and that level of precision and data availability was really helping us run the business much better. that's really what's been the big enabler in terms of running the business and understanding what we're facing. >> what unit is facing the highest inflation number, and what is it >> yeah, we're seeing things anywhere from 8% to 15%, i would say some of that base chemicals. some of the aluminum that we're seeing ethylene has been high so probably pmt is one of our bigger industries, but they've done a really nice job in trying to mitigate best they can. i'm not ready to say inflation is flatten yet i really need to see more time to see what happens. we're anticipating more inflation the second half. and we're just going to have to

tay stay ahead of it >> how do you stay ahead of it in do you cut costs? raise prices? >> you have to use all those things number one is you have to stay cost conscious obviously, you have to get price where you can. you have to manage your mix. that's something else we're doing this terms of availability and drive the products that have higher margin profile. we're also doing a lot of redesigns, particularly with the semi-conductor challenges that we've seen we're doing a lot of redesigns, some of our most popular product offerings as well. so the operating environment's been quite challenging but never the less, i'm really proud of all honeywell employees in terms of how well they've managed through it >> that's interesting. supply chain problems means you can't get chips. are the problems getting better? >> i would say they're slightly getting better

sort of, it's not that all chips are unavailable. it's that some chips are unavailable. and what we're really trying to manage is to work with our suppliers to figure out what chips are actually available, which ones are not and what wore're doing is, is redesigning our offerings. it's not a catch-all they're all available,they're all unavailable. this is part of the complexity that we've been managing, i think, relatively well in trying to serve our customers well at the same time. >> i have seen a lot of the big multi-nationals complain about the strong dollar and talk about how that's going to hurt their earnings, talk about what it would have been without the trar str dollar strength. i don't see that once here

is that not a sflob. >> it's a problem. but kind of at honeywell, we take great pride in being able to operate in all environments we perfect excuse to lower our numbers based on fx, we didn't do that. our raise is actually much greater, because we're actually overcoming the impact of fx. it is a substantial head wind to the tune of 14 cents on a year-over-year basis >> also, you're naming the president and chief operating officer, is that signaling that he will be your successor? >> no, it is not one of the things that i want to just convey, and i think as we talked about, the operating environment is very, very challenging. it's been incredibly challenging for the last two and a half years, between supply challenges, inflation, labor shortage, dealing with covid

issues, and frankly, i've, when we take a great pride in how we operate the business at honeywell. that is something that we want to be known for and hopefully, i don't know, but i've thoitsed t that i've spent so much time in the operational issues that frankly i probably have missed on doing some of the other things that a ceo should do, which is, you know, business development, spending more time with customers people development, strategy, some of these other things and this will provide me the bandwidth to do some of these other things it will give me a little more bandwidth. and he's done a terrific job he's run two out of the four of our spgs, he's done a terrific job in running our performance materials and technologies business unit. and i think he's well served to

do this job extraordinarily well >> darius, thank you. we appreciate it >> thank you, great to see you, becky. >> you too coming up, the ceos of both spirit and jetblue on the big announcement just a short time ago. two airlines merging and then what better way to gauge food inflation than with the u.s. president of kraft heinz. that interview is coming up straight ahead we're coming right back. time now for today's aflac trivia question. what three states have the most kraft breweries? the answer when cnbc's "squawk box" continues the aflac pre-pain show. aflac! paul is about to suffer a shelf-inflicted injury. luckily, aflac will help cover his unexpected medical bills. aflac! maybe you could use the money to buy a step stool. i have a step stool. so why are you climbing a shelf? the stool's on top of the shelf, isn't it paul...

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is is is is now the answer to today's aflac trivia question. what three states have the most kraft breweries is the answer, california, new york and pennsylvania still to come, the exclusive interview with the two ceos of jetblue and spirit airlines. plus, the number that will move the markets today, the first read on second quarter gdp

it is going to be released at 8:30 a.m. eastern time all eyes will be on that number. here are the futures ahead of it take a look at where we stand. dow off about 38 points, nasdaq off about 76 points. keep an eye on squawk for the latest market news we're coming right back.

welcome back to "squawk box. big deal this morning, jet blue plans to acquire spirit airlines it follows yesterday's vote which had spirit airlines reject the deal with frontier airlines. phil lebeau with an exclusive interview this morning >> thank you, let's bring in robin hayes, the ceo of jetblue along with ted christie, the ceo of spirit. just hours after you guys, look, we knew this was likely going to happen you announced it within the last hour what's changed this deal is largely what you guys had talked about or had considered for the last several weeks weeks. why the agreement now? >> good morning, phil, thanks for having us on exciting day today to talk about our merger agreement with jetblue. it's going to create a very

powerful national competitor we also have a lot of value for our shareholders, and a great thing for the team a lot of transpiring, a lot of twist and turns over the last couple months, but we're excited about where we landed today. >> what was the biggest twist and turn in the last two weeks, let's say, that made this come together >> hi, phil, great to see you. i think the financial terms of our deal have been the same for a while. i think what was very important to the spirit team was making sure that they had the ability in the next year or two as we go through regulatory approval to run the business successfully. we're still going to compete in the meantime it's important that we compote in the meantime. really, i wouldn't describe it as twist and turns i describe it really as working through some of the details that spirit would need to allow them to continue to run the successful business. >> ted, let me put you on the spot here.

we've interviewed you many time, and i'm looking at three that my producer has pulled up over the last three months where you point blank say any merger with jetblue ain't going to happen. regulators are going to shut it down why go through with this if the regulators are likely to shoot it down? >> a lot has been said over the last few months, obviously with our stakeholders in mind we've been listening to the folks at jetblue, and they have a lot of good thoughts on their plans for that and we've been learning as well. i'm going to let robin jump in as well to give views on their approach from a regulatory perspective. >> thanks, phil. look, thoughno one has been more passionate about competition in the u.s. than me, i've been making speeches about it for years. we've always known that this

transaction would face a significant a regulatory scrutiny but when we look at what the issue is in the u.s., the issue is that four large airline vs abairlines hav 80% of the market. what we can do is empower this new larger jetblue that can g bring great fares and great service together and make sure we're more competitive we can bring our products and low fares to more destinations than if we just growing on our own. >> i'm surprised and a bit confused you said words have been said. lots of words have been said you called jetblue cynical, chil childish were those negotiating tactics

genuine feelings >> we always had our stakeholders in mind over the last number of month, and we had a merger agreement we were actively soliciting on behalf of that merger agreement. but now we're where we are today. we have a very exciting transaction on behalf of our shareholders and team men,mbers. a lot of reason to be excited >> but does that mean that everything that you said before wasn't strue have they been behaving childish do you believe that the competition issues that you raised are still the case? >> sorry, i cut out. it's obviously not they've been very forthright in moving ahead here. we've create d a re exvery exci

transaction for our group. we were interested in the interests of our stakeholders then, and now we're doing the exact same thing, ready to press ahead, get this deal done and create a lot of value. >> but ted, not to belabor this, but what andrew and a lot of people are wondering about, look, you talked to us on june 28 your exact words about jetblue were, their strategy would be to remov remove seats from our airplanes, which is a capacity constraint, which is a no-no are they going to remove seats? are the fundamentals different in this agreement now than what we've heard about in the past? >> well, there have been, like i said, we've learned a lot over the last few month, and they've made improvements in making sure that our team is going to be in a good position that is correct our shareholders are going to

deliver a lot of value robin's at best to describe what jet blue's strategy will be going forward. they have an agrgressive strateg to get this deal done. it's good for our group and excited about that this is, some of the narrative is that this is going to create a big national competitor to the big four it tilstill is a very top-heaviy atop-heavy industry, and this is our chance to do this >> we've reached a consensual agreement. we're both excited about it, and, you know, we're focussed on getting this doeal done we're focussed on bringing more airplanes in, offering lower fares and more product in more

geographies than jetblue or spirit could do alone and really creating what i think could be one of the biggest things in the last decade or so in helping the industry in the u.s. remain competitive, and that is the important part for that. it's not about low fares or great service, it's about both and this is what the new jetblue will bring, and we're extremely excited to work with all the spirit team members on making that happen. >> quickly, robin, will you be divesting some of the routes that you indicated would you be willing to give up to get theis across the line with regulators? >> yes you've covered airline mergers for a long time. you know what we offered really was unique and the reguregulatoy

review process is already under way. >> robin hayes, the ceo of jet blue who by the way will be leading the airline if it is approved along with ted christie will be with the company at least through 2023 and minto 202 as they work through this process to complete the fifth largest airline in the united states i'm sure we'll be talking more as you work your way through this process andrew, i'll send it back to you guys tho thousand becomes the fun part. >> thank you yesterday, senators approved the chips act. which includes $24 billion in incentives is it a wasteful hand out? for that we go to jon fortt to weigh in what do you think

>> dress it up however you want. how long are we going to keep falling for the corporate welfare approach the u.s. share of chip manufacturing has fallen to 12% today. the u.s. and its allies can't afford to blindly rely on supply from's yeah. the economic slow down we're experiencing is changing the map on how much chip manufacturing capacity the world needs when sales of pcs and cell phones are cooling. and samsung and intel have already committed tomanuf to manufacturing more chips in the u.s. intel warned unless this deal went through it would make more

chips in germany versus ohio remember when they told us the real danger in covid was not enough stimulus? >> it wasn't that long ago that both parties agreed that supporting american manufacturing would be a good thing. why not chips? >> on the other hand, this chips act funding should be twice as big. this isn't corporate welfare this is securing the next american century when it comes to the military, the economy and education. think about it this way. because of what's happening in ukraine right now, we understand the benefits of american energy independence we see how our european allies have relied on russia, which doesn't share or alur value us. countries with advanced chip manufacturing will have advantages and there's economic rationale,

t it's estimated that it will add more than 140 billion to the economy over six years so why believe a chip lobbying group? look at south korea's investment in samsung and taiwan's investment in tsmc look at silicon valley the big reason silicon valley is because of world war ii and after. they don't spring from a head of a free market but from targeted choice like this chips act >> isn't there a real risk of an oversupply we keep hearing about that possibility already, and we've seen boom-bust cycles before >> that is true, andrew, but not necessarily oversupply in advanced nodes there is a risk that this chips act won't get through the house

now with manchin's surprise, right, on this bigger package. >> were hy do you say that >> because the republicans supported it in the senate thinking this wasn't going to happen, that manchin, it was like a flea-flicker move they thought he was going right and he went left we'll see if the democrats can muster all the votes the republicans in the house are saying oh, maybe we won't support this now >> can you help with this in. this >> i'll try. >> there's a lot of, i don't know if it's pork. but there's a lot of stuff that's not chips do you fknow what's in there >> i do not know what's in there. i know there's less of that in there than there was before, which is why it was able to get this far but this latest bit of kind of pre-august 8th movement in

washington suddenly putting this in danger. yesterday it looked like it was going to lap bhappen but today we'll see. >> sort of hard to know what's what >> what's in there is >> yeah. thanks, jon. printing money >> we can print. >> eventually. >> we need chips >> we do we need them here in the united states, i don't know what the rest of those numbers are, though honeywel honeywell beating estimates by $2.10 a share and ragsising its full-year forecast merck ending $1.87 a share in the second quarter

17 cents above the forecast. howeve however, it did give lower guidance the stock is off by only 7 cents. pfizer earning $2.04 a share, compared to a consensus of 1.78. pfizer raising its full-year forecast southwest airlines beating estimates by 11 cents with adjusted quarterly earnings of $11.30 a share down by about s6% sout southwest air trading at 38.37 comcast, revenue beating the consensus estimate, but it was a concern about broadband, no new additions quarter over quarter there were additions year-over-year, and assuming that's why the stock is off by

about 6% the market's also awaiting today's big number, gdp data that will be released in less than an hour right now the future's off inightly, down by about 42 pots the nasdaq down by 85. and "squawk box" will be right back

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estimates. food giant saying revenue increased despite selling fewer items. they lifted prices to deal with inflationary pressure. prices for cereal, meats and dairy all increased by 10% from last year. here's what squlj. powell had ty yesterday. >> they're suffering from high inflation. they're going to the grocery store and finding that, you know, in many cases their paycheck doesn't cover the food they are an accustomed to buying we're seeing real declines in food consumption it's very concerning it's very unfortunate, and that's why we're really committed to bringing down inflation. one of the reasons >> spoke to me there, carlos decline in food consumption. i'm working on that every day. i try. carlos abrams, north american president of kraft heinz it's good to have you on

do you have an overall number of price increases, with pepsi we finally finally got hugh johnson to contend it was 12% what's the overall number? i know you did a lot with rationalization and getting rid of inefficiencies and to try to deal with the higher input costs, but just in terms of passing it along to consumers. it wasn't 12%. was it above, below? what was it? >> it's great to be with you hopefully you will continue enjoying our products as we go forward. first of all, inflation going on, whether it's transportation, labor, critical supply ingredients that we have overall, we say the 12% is about the right range in terms of what we're seeing in terms of pricing. but important thing is that we're not passing all of that on to consumers we're looking to drive more

efficiency to make sure that the things that ultimately consumers are seeing is less than they would have expected. we're trying to do everything we can inside our house so we don't pass those costs to consumers. and secondly, as we go into store, how do we make sure we offer consumers the best value possible we're doing a couple things first is making sure that when they go in they see great quality products at prices they can afford and for that, let me give ah example. it is how do we make grilled cheese night for the family for $1 per grilled cheese. how do you feed a family of four lunches for a whole week for $20. those type of messages where they can use kraft singles, kraft mayo to provide solutions that are still this an affordable kind of budget for them >> carlos, the other thing that we finally settled on was in addition to maybe some price

increases, maybe there's a few more, maybe little bit less of the product, few more, fewer slices of cheese, whatever, however you would do it. has that been part of kraft hi heinz' strategy? >> for us it's in two areas. one, how do we optimize our actual formula so we can bring in different ingredients that in many times will be cheaper, whether you substitute sunflower oil for other oils because of the conflict in ukraine. that allows us to be more flexible how to adapt our prices by changing the formulation and still be able to drive the quality that we have that's a better way for us to think about it the other way we do it is how do we customize our products to the particular consumers in different points in selling. if you think about the fact that certain type of consumers are going to see a better value by

going larger size. so us offering kraft mac and cheese in a five-pack, so how do we have a lunchable for a dollar, that allows consumers to have different ways to access our products at different price points those two of our main strategies weise as we think about how to offer better solutions for consumers >> when you sit around talking with all of your colleague, how long do you think we're going to be in this position? because the fed is dealing with it, we're all dealing with it. transitory, rwe retired that word, but we're mindful that some of this is supply chain bottlenecks, the war in ukraine. there are extenuating factors, are you planning for dollar strength for years into the future what's the prognosis that you

guys come up with? >> listen, i'm not going to play senior economist on tv here, but the forces we are seeing, we are seeing dependent on the actions the fed takes, but there's also an asymmetric effect in the supply chain where some ingredients are more expensive than others. in some kwies acases we are see recovery in commodities. t in others they are going the wrong way. for us, control the things we can control. we have shown that we can deliver nine quarters of growth in a row we can adapt to a situation and continue to offer consumers choices in order to stay with our brand. that's our focus, really not trying to predict so much as it is be beining ready for the cha in the months to come. >> carlos, thanks.

i used to love kraft macaroni and cheese it's off my list now if i ever get really skinny, i might go back to it. afterwards but not permanently. >> it's good >> it is awful good. >> come back us to come on. >> i like the spirals. i like the little spirals. >> i like the thin when we come back, our exclusive interview with southwest ceo bob jordan talk to home abim about what hes seeing and then we've got the second quarter gdp data stay tuned you're watching "squawk box," and this is cnbc 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

hf good morning we are 30 minutes away from key economic data, one day after the fedex fed executed another big hike. and another slough of corporate earnings from some of america's biggest companies. we'll get you up to speed with the results and stock action 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 u.s. equity futures are in a wait and siee mode, would you think based on what we're expecting in about a half hour, the first look at second quarter, gdp we'll have a second look at the second quarter >> this is the big deal, this is the one that people -- >> it is so it's the first time we're going to have any idea about the second quarter, as liesman pointed out, we have seen a little bit of a move higher, and it's not a give than it's going

to be a negative and then all the hoopla and controversy over the change of the definition of when you do have a recession, that would all be moot. but we can save it for next time >> put it in the can >> put it m in the can treasury yields. that argues that maybe we're already seeing some effects, that's a point and a half in two meetings for the fed you don't see that historically very often >> by the way, they didn't say they're not raising next time. they said it's data dependent. let's get you caught up on some of the stories that investors are going to be talking about. a new chapter in an airline saga we've been following closely spirit finally agreeing to be acquired by jetblue. spirit abandoned the previous

merger deal with frontier after shareholders rejected it the ceos of spirit and jetblue joined us last hour on "squawk box. >> >> the best thing we can do is to empower this new, larger jetblue that can bring low fares and great service together and make sure that the industry becomes more competitive >> we have a very exciting transaction on behalf of our shareholders and our team members. going to deliver a lot of value, create a big national competitor so a lot of reason to be excited. >> yet blue up by 1.3% spirit up by 4%. frontier shares are lower this morning, down by 2.4%. the big question is whether regul regulators will allow this deal

to go through. honeywell out with its second quarter report, raising its sales outlook and some of its other outlooks, too, thanks this part to strength in its aerospace operations here's the ceo with his take on all of this just a short time ago. >> there's a lot of debate out there about whether or not we have a recession coming. but in my view, as we look at a couple of our top market, namely, aerospace, energy, building technologies, all of these we've shown very robust growth in q2, and i expect that to continue independent of the economic revision. >> honeywell is up by about 1.4% and ftxus launching stock trading for all users. that stock has been in beta mode since may. as of yesterday, anyone in the united states can trade stocks in addition to crypto on the

platform harrison joined us on the show and drew comparisons between his business and those of other brokers. >> the biggest difference for us is that we're trying to use a model that doesn't rely on payment for flow we think that's ultimately resulting in worse market quality for all participants over a longer time and we're trying to reverse that >> starting in a month, they will charge a commission for each stock trade, excluding trades fractional shares meanwhile, i want to get to dom chu who's looking at some of the morning's biggest top mover, and there are a bunch of them. >> becky mentioned honeywell we'll start with the positive, the good news so to speak. shares of harley-davidson moving higher, about 20,000 shares of premarket volume the motorcycle maker is posting

better than expected profits and did reaffirm its full-year forecast despite a two-week production shutdown in maidy, de to a supply-related issue. then there's the negative side of thing, including a big slump and a big one in shares of toolmaker stanley black & decker down roughly 14%. profits and revenues missed the mark and they cut its guidance they saw softening demand that accelerated in the second half of the last quarter but does expect things to normalize, but on balance shedding half its value, down another 13% in trading so far premarket and we're going to end on the big driver of tech and related industries today, that's meta platforms down around 4.5% roughly 900 shares of volume

the quarterly revenues did decline for the first time ever as digital advertisers slowed down some of their spending. it continues the trend in some of these advertising-related industries in media and online about maybe potentially slowing down those advertising >> shedding. >> shedding. >> shed. >> shedding. >> shedding. >> i will say shed next time >> no, no. it's just, we both looked at each other >> least you know we're listening. >> yes you guys are always listening. i can never fault you for that >> dom, thank you. we'll see you a little later the federal reserve announcing its second consecutive rate hike in as many months in an effort to rein in decades-high

inflation. >> it is a decision that will depend on the data we will get between now and then we will continue to make our decisions meeting by meeting and communicate our thinking as clearly as possible. >> for more on what the second super sized rate hike could mean for the economy and the markets, we are joined by former dallas fed president richard fisher and serves on the board of tenet health care and warner bros. discovery, and liz young richard, why don't we start with you. the immediate take from a lot of people listening to this, at least a lot of market players listening to this is that this was a much more dovish fed is that what you heard >> no, but i never go by what the market reacts to immediately. it's a medium that got excited because wasn't as bad as it might have heard and there's confidence in the

second quarter numbers coming forward. the chairman of the fed already knew that number so i'm assuming that's why his comments were positive about the economy. and the one thing i would note, becky, they're getting away from providing specific guidance for the next meeting i believe that was a mistake the previous press conference he had in the then meeting saying we're going to have another 75 basis points what i heard was basically getting away from specific guidance, nonetheless, indicating they're going to continue this process, and i think it's going to continue for a while, dampen the economy. but there is optimism they can pull this off without creating a serious recession. and that's what i heard from the meeting. it was kind of blah, and that's the way it should be, going back to the way things used to be before when non-specific

guidance is given during the press conference >> why is that a bad thing, richard? i thought that was refreshing. if we're going to be data dependent, don't advertise, it's a good thing that it's data dependent. i can't tell what you we're going to do in six to eight weeks' time. >> first, we're going to see what comes out of jackson hole at the end of august that's where they convene, that's where they made that horrible decision model and enacted it on what i call "horse has left the barn" approach to inflation. that's dead and buried but we'll see what comes out of jackson hole in august, and that will be the next market impactful meeting that they have >> hey, liz, the market, especially if were you looking at some of the nasdaq stocks reacted as if this was a huge chance m sin stance. is that your take on it? is that the right market reaction is this. >> i think yesterday's market

reaction was overdone on the positive side. we got a little bit excited. and i won't be surprised if we give some of that back what i heard from the fed is that they are expecting this cycle to cause some below-trend growth and cooling in the labor market i don't think the skreegdp numb going to be negative, but fien it is, it doesn't change the trajectory i did not hear dovish. i did not hear pivot all i heard from jerome powell was that this was an unusually large hike and there's a possibility we'll have a smaller hike in september and going through the rest of the year, but it's still hiking. as long as they're still going to fight inflation we're in good shape for the second half of the

year, but it didn't mean that they're going to stop hiking or turn dovish. >> you've been saying for a while that you wanted to wait until the end of july before you looked at getting back in to see where things settled out we're at the end of the month. what do you think now? >> we are. and i still want to get past this week, but the reason i said that is i wanted to get through a decent amount of earnings season, wanted to get throughout fed meeting and the gdp print. i think we'll see volatility in the market today because of the gdp print. once we get that behind us, i think august might be a good time to again start thinking about buying those opportunities. if you get an opportunity in a dip and re-enter the market in place that you've been out because you want to be in it for any bounce that occurs for the rest of the year and i think the harkmarket wille satisfied with the data that comes in i would expect inflation to start cooling. i would expect the economic data to begin cooling, which would

send the signal that this is working at least initially none of this absolves us from going into a dooeeper recession later on if we don't fix the inflation problem. >> i guess the question is how much later on? >> if you look what the yield curve tells you, the yield curve inverted for this length of time there's a possibility of recession in six to 18 months, but you go back to the old adage, the market has predicted five of the last recessions. in 2023, it's problemly it's pre bigger risk. >> richard, you're the economist. first of all, do you think we're he headed into recession and do you think inflation has peaked >> first, liz needs to be federal reserve chairman i think you summarized things

well the key thing here, becky, as liz referred to is volatility. i expect that to continue. it's been ferocious. it's been even more volatile than we've seen in different equity indicators, and that just is a signal to me of significant uncertainty as to where things are going. >> hey, richard, a little bit of a curveball, news coming out from punch bowl that says that house dems propose ban on stock trading and that they plan to make that proposal early next month. i'd love your thoughts on that, given the conversations we've had over the years about the fed and fed members trading or now no longer trading. how you feel about members of congress trading >> or their spouses. >> or their spouses, given nancy pelosi and her husband's trading. >> paul pelosi i worry a little bit with regard

to the fed, which is what i care about, you need have people, liz is a good example, with market backgrounds who understand how markets operate. i'm worry ied that they're going to take a way any sense of market sensibility but with regard to the house and senate, clearly people have taken advantage of inside information forever. i'm not against their tapping that down. and i'm sorry to see that paul pelosi and nancy pelosi and others are, appear, it's all appearance right now we don't know the facts, to have taken advantage of inside information. so something needs to be done. but let's be careful with the fed. you need people, rob capman was of great assistance to the committee and the chair.

he understood markets. i'm a little bit worried about this >> richard, liz, thank you both. we'll talk to you soon >> oh, man if you were a conspiracy theorist, a really bad one, a really bad one, nancy's going over to taiwan to check out her investments, and biden doesn't want her to go, because it's going to mess up hunter's investments in mainland china. >> that's not a conspiracy that's joe kernen's inside joke on the brain coming up, our first look at the second quarter gdp and first, the ceo of southwest airlines, stay tuned we'll be right back.

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southwest airlines reporting second quarter results above analyst expectations but issuing mixed guidance and a prediction of continued rising costs. the phil lebeau show continues now, joins with us a special guest. hey, phil. >> hey, joe, bring in bob jordan, ceo of southwest you beat on the top and bottom

line interesting quarter. you say it comes down to execution which you brieelieve where the difference is. >> first i want to say welcome to our place in dallas and home the best mechanic in the industry ly t i had to say that first we had a record operating performance, and coming off what we've experienced the first quarter or a year ago, it's an incredible recovery, and it is all thank to the people of southwest airlines we saw a, following omicron, a huge surge in demand after march, and that followed all through summer, and demand for air travel was very strong, and

i think we're experiencing that, plus we have a terrific product, southwest airlines >> when you look at what happened this may and june, and you were not hit as hard as some of your competitors in terms of cancellation and delays, but at the end of the day, the american flyer was saying, look, i'm not happy with this flight experience, the long line, the delays, the uncertainty that is out there. you've made the decision that those flight credits that we often get if we have a canceled flight, you're not going to have an expiration date on that, right? >> we've gotten better every si single month in 2022 our cancel rate since april has been sub 1%. that means 99% of our customers are getting to their destinations as planned, which is wonderful no, would h we have a big annou

today, flight credits will never expire no change fee. i'm really proud of this new benefit for our customers. a learning during covid is that customers really wan flexibility. and like credits that they ever never expire >> your pilots are saying we're overworked we have fatigue. there needs to be a change in how flights are scheduled. when you hear that, you have to understand that some people are listening to that and saying i'm not crazy to hear my pilot saying i'm overworked. what do you think? >> first, we've got the best pilots in the industry and we've been in negotiations for a while. negotiations are a process as a company, we want a contract we want to pay our pilots really, really well, but it's a process, and sometimes that can take a while if you look at things like

quality of life for a pilot, the number one thing that improves that is the operation being stable and settling down if you look at last summer, we had a lot of disruptions, and you compare that to the last two or three month, our operation is much more stable low cancellation rates means that our pilots are going to get home as planned, they're going to have fewer reroutes so our scheduling has been much, much better, but thouno, we wan contract, but negotiations are a process. >> we have spirit and jet blue consolidating today. if this goes through, you basically will have five airlines controlling well over 80%, 85% of the market or close to that. is the era of consol daidation,i know we always say this is the end of it. >> first, we don't comment on mergers and acquisitions, because it's just speculation.

southwest has had m&as before. we acquired morris we're going to compete either way. we compete very vigorously we have the best network we have the best people, we have a single aircraft type we have a terrific network so we're going to compete no matter who that's against. >> let's talk about booking post labor day. still see strong demand? and is the rising inflation and the high costs that are out there for the consumer, is that starting to eat away at people saying hey, maybe i won't book a flight >> demand, as we talked about earlier, it really surged in march coming off omicron and the summer, especially june, was really a peak. but you look forward, the demand for the rest of the summer, post labor day is actually really, really good. there are potential storm clouds on the horizon business and consumer sentiment is down. there's a potential recession. rising fuel prices

so you do have a lot of things that can result in a change to those trends, but so far our bookings through the rest of the summer and post labor day are very strong. boeing like everybody else, they're experiencing supply chain issues just like all of us rather than the 114. we'll be planning for 66 we're not changing our order book, which means we still plan to take all of the aircraft. so those delays will slip into 2023 could slip into 2024, but we'll have all the deliveries. >> bob jordan, on a day whether they when they meet on the top and bottom line second quarter gdp it's coming up next. don't go anywhere. we are back in just minutes with the big number of the day.

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welcome back to "squawk box. we're seconds away from the critical first read on second quarter gee diddp take a look at futures we are in the red right now. we have the s&p off about 12 points let's show you the ten-year note before we hit that number. i know rick santelli is sanding by in chicago. we're at 2.785

let's go to rick in chicago ahead of those numbers 20 seconds do you want to make a guess at what we're going to see? >> i think it will be up around .6, and i think the inventory numbers really saved the day yesterday, and i know that we often talk about what the real definition of recession, obviously, it isn't back to back negative gdp quarters, that's only in the eyes of the investors that are trading markets. that's all that counts in my opinion! but here we go i see jobless claims at 256,000, that's up 5,000. oh, my gosh. not only was i wrong, down .9 of 1% on first look at second quarter gdp. down .9 of 1%. okay i know there's an organization that decides whether we're in a recession or not, but investors are not going to wait. two back to back negative quarter, it's not good call it whatever you want. consumption up 1%.

that's a bit light sequentially, that follows 1.8 you look at the price index, also not very good news. 8.7% 8.7% on the price index. that will still comp back to 1981 because in 1981, our comp goes all the way up to 11%. if we look at personal consumption expenditure kwarlter over quarter, exactly as expected up 4.4%. the high watermark there was 6.1. that was all the way back in june of 2021 of course that was the second quarter. that was the highest since '83 and if we consider all these numbers in totality, we definitely want to pay attention to what's going on interest rate, because they dropping very quickly. initial claims as i said before, 256,000, the revision has come in revision moves up ten grand from

251 to 261,000 last week, which makes this a lower number by 5,000. on continuing claim, 1,359,000 the best level, of course, was back in may, 1,306,000 this number was better than expected but is not new post covid lows as a matter of fact we're way past post covid. that 1,306,000 was the lowest since 1969 we continue to see the deterioration in stock and i know there's going to be a huge debate in what this gdp numbers mean i got blindsided by the inventory numbers yesterday. >> rick, thank you stay where you are we want to bring in our panel.

steve, i want to get your immediate reaction to this and really the larger debate are we now a recession, my friend >> i'm not going say we're in a recession in part because of, i wouldn't count it from the first quarter, i might begin counting it in the second quarter if you want to do the two quarters of negative growth thing which is this common definition that's out there. i have a problem given how strong the job market was and maybe still is hun you had an interesting wash. i want to get these numbers correct fin front of me here. you had inventories take off almost 2%. the inventory number yesterday caused a lot of folks to raise their forecast for today so unclear to me if that inventory number was or how it was brought into gdp meanwhile, trade reversed itself trade had taken off 3% in the

first quarter. it brought back 1.43 and here's the balance number which rick was talking about a lot of people talk about it. the number which the white house has clinged too and emphasized which was up 3% in the first quarter, zero right here right on the edge of that. the idea of what happened in the domestic economy was zero. there's no doubt to me, andrew, that the economy has slowed trt first quarter. you had a pretty good first quarter number, now the second quarter definitely shows slowing. i wouldn't call it a recession i'm going to wait for other people who look at the three components of that is it prolonged, is it pronounced, is it pervasive. not seeing those three things. >> okay, mohammad, try to put together what we're just seeing now in immediate terms with what we heard from j. powell yesterday and what you think he now may or may not do as we look

forward to the fall. >> thank you, andrew this t in terms of what we're seeing in the data, this is an economy that's weakening at a much faster rate than most people expected that's the bottom line whether we're in recession or not is not as interesting as the fact that we are weakening really fast. in terms of what does it mean. well, there was two fomc messages yesterday, a scripted message, which was that inflation is much too high, that the economy is weakening, but don't worry about it, because the labor market is incredibly tight and we've got to continue tightening, but then there was that unscripted comment that we are at neutral so depending on which fomc message you look at you get very different conclusions from t today's data

yes, inflation's going to come down at a headline level but not fast enough given how fast the economy's weakening, and that's going to put the fed in the same dlemma it's been in for the last few months >> dana, what do you think >> well, i think that certainly when you look at the details, it's really mixed. inventories continue to be a drag, they will continue to be a drag going forward but you did see residential investment come off really strongly because of the fed's interest rate hikes and also very elevated prices when you look at consumer spending, i think some of that is the shift from mainly buying goods to services. services, gdp was up more than 4% annualized, meanwhile goods was down it was negative. so i think that's part of that shift. but still in all, we do think that the economy's slowing very aggressively we have priced in a recession. we originally put in for the fourth quarter of this year. maybe it's starting sooner, and

that's a result of the fed raising rates and people are pulling back because inflation is so high >> can i ask a very quick question dana, maybe you know this, i feel like i should know this it's worth pointing out, government spending, well, federal government spending took off, i hope i'm reading this right, 3 percentage points, no t was down 3%. the contribution there was quite a bit. dana, this was expected, if i'm not mistaken if you took off .2 total, we expected government spending to roll off how long does that last? >> well, certainly we're expecting a drag from government thei this year because you don't have those big fiscal outlays, but we were looking to see hopefully that some of the infrastructure spending would come through. if it doesn't, we're going to see even worse gdp prints going

forward. >> we're all really lucky, because we're going to be spending over a trillion dollars soon the inflation reduction act just in the nick of time before the election of course and the chip welfare program at 280, should it get up there, that's over a trillion dollars >> how do you feel about the chip program, rick >> well, you know, corporate welfare on steroids, that's how i feel about it. and the thing, at one point, when we build back better, you change the name, re-jigger it a little bit and everybody's all happy. the market's going to respond. >> gdp suffered because the government didn't spend, huoora, they're going to hire more people at the irs. mohammad, if we're worried about inflation with the last trillion dollar package, do you think the name is justified, inflation reduction act and yes, the

chairman yesterday was super, super, super dovish. i can't figure out why, but the bond plmarket should get a tropy it's right look at the gdp numbers, it's implied a rally for all the wrong reasons. >> i think it it, the market has left behind and that's why you're getting bonds behaving in the traditional way which happened earlier this year in terms of the chips act, we could have a huge debate is it a demand or is it a supply. if you look at that time as a demand influence, you worry about it if you think about it as a supply influence you welcome it. that debate's not going to be resolved anytime soon. >> are we turning into china, mohammad >> on this particular one, rick, and you and i can have a long

debate on this particular one >> so we can pick and choose where we have industrial policy. >> the way we've always done, rick i don't necessarily back this chip thing, rick, but i have to say, there's a pretty compelling argument that was shown to us in really bold relief during the pandemic, when we lose chip this chips in our economy, and then the concern that if taiwan were cut off, we would have a problem in our defense and industry >> doing theiis is not going to change anyof that. >> . >> if you have a better way to secure the chip supply >> you should go through the world trade organization and make sure countries like china don't cheat. >> get to the panel. i want to ask mohammad and dana this question, and you, too, steve. so stagflation, do we know for

sure whether we have either part of that? do we know whether we have the stag because we don't believe we're in a recession and do we know whether we have the flation, because we don't mow whether it's systemic. do we have either side of that when we say stagflation, liesman? >> we have the stag for sure >> it's not a recession. >> i don't think it's a recession yet, joe i think what happened is the market kind of fed on itself, this issue of are we going, maybe we're in a recession now and i just don't think, to my mind, what's going on in the economy right now, i think, i think there's a real risk of a recession. i just don't think this is it. >> more than inflation or less is this and with what rick said, maybe now we're -- >> both, joe >> juicing that back up with a trillion dollars that's crazy >> i think we can have both.

by the way, i don't know what mohammad heard yesterday, but i did not hear the dovish chairman that everybody else heard. >> dana, is it stagflation, dana >> we do think this is a stagflationry environment. and i define it as very low growth and high inflation. and that's certainly what we're seeing in the gdp data and inflation data >> that's the worst. >> can you clarify one thing for me in me what is it exactly that you want the congress to do and the fed to do? this is going exactly as planned. >> i want congress to legislate. i don't want congress to legislate debt i would like them to legislate a better set of landscape rules so companies that are in various businesses like chips can grow in a better environment. i don't think giving them money like this is the way to go, especially when you go into debt and i also think that spending a

trillion dollars is not going to lower inflation! they're going to subsidize an electric industry that's not ready for prime time spending that money is actually going to make everything go up that's related to energy in any possible way >> andry,rick, what do you wanto you want j. powell to continue to raise interest rates in. >> i want j. powell to be data dependent, have very little guidance because it's been very useless and he should pay a lot more attention to the market place and a lot less attention to politics. >> what do you think he's telling us >> i think the market is telling us that inflation is not going to be the type of problem it is today. there's going to be sticky areas, but most likely, when the market says that an ease is coming at some point in 2023, i think he paid attention. i think that's why he was acting a lot different yesterday than he was in the june 14, 15th

press conference >> rick might have moved into the transitory category. >> i'm feeling transitory. i want to bring that word back, no >> just redefine it in terms of five years >> like we did with recession? like we redefined recession? >> at this point, steve, i'll just ask you, if we're going to say that the nber has to weigh in on this and they have to come up with these three metrics that you've mentioned, is it ever going to be possible that we're in a recession while it's happening? or is this just a backward-looking thing >> no, i'm not saying wait for the nber, i'm saying use the nber's own criteria for figuring out for yourself i learned the three ps about recession, and i don't see that right now. and you can go home and you can play economist at home and decide whether or not we're in a recession at a 3.6 unemployment

rate where we added 370,000 some jobs >> isn't jobs the last to go i'm all about jobs, jobs, jobs >> if you go back and look at how the nber goes back and dates when the recession begins, the unemployment rate and jobs almost always weaken around the time of the beginning of the recession. they find it at the contemporaneous. all i'm saying, i just want to be clear is the first quarter to me was a bit of a red herring in the sense of a negative number created by trade and inventories. and i'm saying if you're going to start dating the two quarter thing, i would start with this quarter where there was real weakness in stuff that matters in the consumer and in business. i don't know if dana agrees with me i'm giving the first quarter a mulligan as you say and let's

look at the second quarter as the beginning. >> dana? >> i would also give the first quarter a mulligan for the reasons that he's mentioned. the second quarter does give me pause in terms of the weakness that we're seeing. but the third quarter, we don't know what that's going to look like most likely it's also going to be soft. thei this is a stagflationry environment. looking back on theis you may sy the u.s. started in a recession in the middle of the year. >> are we back in a position where every job number matters every inflationary number? and if the fed is forced to choose between those two, what does it sdploos. >> i think we back this that world where every number matters. what's the fedgoing to sdchoose

i don't think the fed can take its eye off the ball right now in terms of taking inflation down, otherwise it's going to be a double whammy very difficult to get out of. >> did you hear powell yesterday shut the door on my question he just didn't answer it at all. >> yeah, not just yours, other questions, too >> we all got shut out on that one. >> okay, we got to leave the conversation there i don't want to shut anybody out, but we have to shut this down for now thank you all for your perspectives on this big number. >> small number. >> small number, depending on how you want to think about it >> when we come back, jim cramer's first takone the new gdp data "squawk box" will be right back.

down to the new york stock exchange, jim cramer joining us now. i was making a point, do we have the stag or the flation. we don't have the stag because the first quarter is a mulligan and we don't have the other because it's rolling over or could. maybe it's not stagflation and maybe we won't get it. but it feels stagflationy. >> in stagflation, you have people who are kind of crushed across the board there's no apple and people who are middle class and know people who are lower class that aren't hurt i don't see this at all. it's a really easy thing to say. it's a political thing,

stagflation. it's a political thing i'm not a political guy. i see markets reacting well with this, and they react well because it's what jay powell wants, which means maybe there's no hikes as high as three-quarters, maybe once in a while. i deal with what the stocks do because this other stuff is just about whether the democrats are going to take house or not that's really the subtext and it's not where i go. i think this confirms exactly what jay powell said yesterday and that's what the market is saying i don't want to try to get ahead of the market because that's political. i'm sorry i take it like political but that's the way i listened to that debate. >> jim, for somebody -- and i think i was trained at maryland in 1981, i think, and you're a geezer like me so we've seen a lot of stuff but you know how the market, when you're unable to buy it when you should because you're still so scared and then all of a sudden it moves away from you

and you're like what the hell? why didn't i have the fortitude to do it the nasdaq -- >> exactly >> the nasdaq at 10,000 or 10,500, wherever it is, is it going to give us that chance again? >> everyone said it was the end of the world, the greatest time to buy you could have bought 30-year treasuries or stocks a lot of the people i'm listening to, they're terrific people but i think that you have to buy when it's really bad and you think that it's really bad and it's never going to end and that you're going to get a paul volcker situation. the consumers are very liquid. the consumer is not spending as much, but this is an inventory glut it's not an enterprise glut. it's an inventory glut that's actually going to play in jay powell's favor no one was positive that i just heard. i think that's absurd.

the market was down very badly this is exactly what you want if you're a bull. you want the fed to stick by its idea that you won't see any more three-quarters i don't know joe, sometimes good things happen and the market was up huge yesterday. it should be down big today. the last two times it was down very big >> i don't know. >> it's not happening. >> the nasdaq never just says, all right, back it up here, a lot of people didn't get in. back it up >> if you want to be positive, okay, then you and i are the only two that are positive but we'll do better than the people who are negative >> if we'll live forever, anyway thanks, jim. see yoin cplmiteu aoue nus. angs to your financial plan. bill, mary? hey... it's our former broker carl. 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.

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welcome back to "squawk box. the new dadata, a second straig quarterly decline in gld gd, but the futures were moving up at one point, right around the flat line after a big gain yesterday. anastasia amoroso, i-capital chief investment strategist, markets looking for a way to react to this? what's the take-away from that number, in your view >> i think it's actually the -- exactly the number and the details of the number that the fed wanted to see. they're trying to engineer a slowdown in the good sector of the economy and the inventory sector of the economy and the

structures sector of the economy, and that's exactly where we saw the pullback in this gdp report. one thing that fed chair powell said yesterday, they want to bring down demand in certain sectors while supply catches up. so that's exactly what this gdp number shows now, if you look through the other details of it, if you extrapolate inventories, consumption is up. that's exactly the fed sees to bringing down inflation but at the same time achieving some sort of softish landing. i think that's what the markets are recognizing here that's why you're not seeing a whole lot of movement the futures. i suspect as we move past this report we'll focus on the fact that the fed is now going from this emergency state of rate increases to something a little bit more normal, and that something a little more normal should be positive for stocks in the second half of the year. >> so, a soft landing could be

orchestrated and then as you say on the other side some of this inflation you see as -- can i use the t-word if it's not wage/price spiral it's in some things that might sort of self-correct in the next year or so, some of the goods that you were talking about? so, that does seem positive. i guess the point i was making maybe we don't really have the stag and maybe we don't really have the flatoin maybe we don't have either and getting concerned about a return to the '70s that isn't in the cards. >> it would be nice to make that conclusion, but i don't think we can completely call this all transitory i think this correction in the good sector will play out, but it's not going to bring inflation down to 2% you can't quickly solve the wage issue. you can't quickly solve the

shelter issue. that's what worries me we can't create more housing, so the fact we're pulling back on structures may not be good for inflation, but i still think there is a chance to bring the core inflation down as well, because one thing the fed said yesterday, there is a lot of financial condition tightening that has already occurred and the future impact of that on the economy is still in the pipeline so the fact that they're pausing, the fact that they're close to neutral, they'll get a little more restrictive i think it just gives the economy time to absorb this rate of increase. let's just see how it shakes out. i do actually think they're starting to strike the right balance between doing what they have to do but not doing so much as to tip the economy over the fact that fed chair pow sell so focused on achieving this soft landing, i think that's actually a positive development for markets. >> anastasia, we'll end it there. it feels like a friday thanks, we'll see you.

because of the big number, like usually employment number, in this case it was a gdp number. >> it was a big number >> it was so small it was negative >> a goldilocks number >> no stag and no flation. join us tomorrow, which is friday, i'm told "squawk on the street" is next good thursday 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. it is official two quarters of negative gdp growth as the q2 print is down 0.9. futures bounced briefly on that news as the 2-year yield got crushed, lowest in almost two months on a big day for corporate results. that takes us to our roadmap this morning a second straight quarterly decline in gdp we'll get reaction fro