point. bank of england expected to hike interest rates jobless claims number. that data from here at home. speaking of jobs, walmart laying off corporate employees. just a week after it slashed its forecast plus the skism in the golf world. liv golfers suing the pga tour big names over the suspensions details straight ahead it is thursday, august 4th, 2022 "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc i'm andrew ross sorkin along with joe kernen. becky is off today take a look, joe quite a week

u.s. equities. the dow would open up 32 points higher s&p up five points nasdaq up 24 points. also showing you treasury yields the other piece of the story these days you are looking at 10-year treasury at 2.730. inversion with 5-year continues with the 2-year treasury joe. >> nasdaq yesterday. 318 points remember the day before it was down and speaker pelosi was in taiwan and she left. the sun came up and that seemed to be all it took yesterday. that's 2.6%. now the nasdaq is at 12,668. i'm worried that you might be come back. pick me up i'm here i'm here let me on. let me on the bus.

maybe not. i was on "fast money" last night and adami at the lows on june 15th, said this is close to the low. rally at 4,100 and it will come back down. we're only halfway >> is that the case? katie stockton's view is it is falling apart. >> i have been on twice in the last three weeks everybody. all of them. new lows we had jeffrey's tech guy who said it is broadening out. the move is now to where we doubt we see new lows in the nasdaq i don't know it makes it a good discussion. it's august. we can talk about it we have time to talk about a lot of things today. i don't know if you want to look at "usa today.

we'll have time. walmart. do you remember -- do you like the movie "wall street." you remember gekko's speech. more than 200 vice presidents sitting behind me. i have no idea what any of them do at teldar paper i think they just send paper back and forth to each other walmart is laying off corporate employees. a week after the profit outlook. pulling back on discretionary spending they declined to say how many from which divisions walmart is still hiring in the parts of the business that are growing. including supply chain, ecommerce, health and wellness and ad sales that is no way in comment on our middle managers at nbc or cnbc i think every one of those is

essential that we've got, andrew i know you agree with me whole heartedly on that. >> as you know, i think layoffs across the board whenever you have them, because they affect people, are hard whether you think they are paper pushers ar not. >> this is true. you know, that's the knock on private equity they come in and cut costs you know what they say, you would rather have 50% of a work force at a vibrant, successful, profitable company that has your favorite thing sustainability it has sustainability. >> creative destruction. >> than keep 100% on and declare chapter 11 and the whole thing goes away. >> that is true. by the way -- >> somewhere in between.

>> i think most managers today will tell you the pandemic taught them, in fact, they probably had too many people meaning they could do more or the same with less that was one of the things. >> look how it worked? those people that may not have their old whatever it was, can get more money to go toi something else with that dynamic you talked about, they can switch jobs and make more money in the growing industry instead of the a antiquated one i would say in europe with the anti-trust mentality is about maintaining jobs, not the best prices for consumers, you know, they won't allow a merger. they won't allow for economies of scale and overlap and look what happens their gdp is 50% usually below ours in this great, great country

>> that's a longer debate. other news to get to this morning. >> it's a great country? i'll debate you any time on that, buster >> no, no. a great country. i think some of the anti-trust laws around jobs and whether jobs should be taken into consideration or anything. i think there are larger questions which goes to the inequality that's what i said >> that's in your blood. that's a sorkin gene >> yes we love the conversation of anti-trust >> you got relatives in that business >> yes retired today. he didn't retire just today. meanwhile, robinhood's ceo saying the brokerage is not looking to be acquired he was asked about being bought by another firm. he said i think we're in a great

position as a stand-alone company. i love us as a stand-alone company. he did say robinhood is on the look for acquisitions of its own. the company reported $6 billion of cash on the balance sheet at the end of the quarter robinhood revealing it has been under investigation by the s.e.c. the company said in the filing, the agency has been looking into the compliance of short selling rules since last year. gamestop robinhood saga that has everybody's focus and this firm has not gone away. we continue to talk about payment order flow and future of the company. eli lilly beginning commercial sales of the covid antibody drug for health care providers this month previously, lilly sold doses of the drug for use in the u.s. with contracts through the federal government the company said that the government is set to exhaust the

supply of treatment the week of august 22nd. the company is set to report this hour. ceo david ricks is set to join us at 7:10 eastern. phil mick elson and bryson dechambeau >> i love this story i don't know where i land on the issue. >> liv golf series filing a lawsuit to challenge the decisions by the pga over the temporary restraining order to allow them to play in the pga tour fedex cup playoff it threatens lifetime bans on players who participate in liv golf and sponsors and agents the pga tour commissioner jay monahan said the players are now

saudi golf league employees. they walked away from the tour and they want an back in we will talk more about this story with the anti-trust attorney in the 8:00 hour. didn't the doj signal that maybe they have some empathy for these guys for the liv guys? they are looking at the pga tour, right? >> here is the thing funny he used the word employees of liv i'm not sure that's the case the issue is whether they are independent contractors, effectively, or they actually are employees. if you are an employee of one company, that company has every right to say you can't also do x, y, or z or work for somebody else the choice of that employer, which in case, the pga is arguing they are the employer. however, my understanding is,

folks and you know this, the players on the pga tour are not paid as employees of the pga that makes it difficult from the anti-trust perspective to prevent them from using another service. similar, by the way, put in a different context, but uber driver is actually very much allowed to drive also for lyft if uber said you cannot drive for lyft, that would create a problem. >> i was thinking about it from the overall -- i don't know -- the discussion we had about relationships with the saudis and their sovereign fund i know greg norman has been speaking out lately saying the hypocrisy and everything else.

>> about tiger woods and everything else. >> all of the ressponsored that business in saudi or in china. phil has gotten a lot of grief he has gotten some support from fans others have booed him and talked about 9/11 and things like that. he had to answer a lot of those questions. this is taking it right back to people offensively this is not hiding and not wanting to talk about it they will sue for the rights to play on the pga tour and keep our $200 million from the saudis tiger, did you see what he was offered? >> $700 million or $800 million and turned it down he has morals. >> what about his legacy greatest golfer. if he hadn't had those things happen, he would have beaten

jack's record with major championships won. he has legacy issues to think about. i can see why. how many boats can you water ski behind, andrew >> we talk about it all the time. >> tiger is probably a billionaire without any money from the saudis. >> that's why i turned down all of the contracts, joe. you know, at some point -- it's just money just money. >> there is a number for you at the liv business channel isn't there? is there come on. all right. we got more coming up on "squawk box. we'll have this conversation more than once look at the s&p 500 up 8 points. joe said the train has left the station. we'll talk strategy after the break. later, transportation

secretary pete buttigieg will icin us about the latest gas pres you don't want to miss that. you are watching "squawk box" here on cnbc

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only from us... xfinity. welcome back to "squawk box. we have an earnings alert. cigna just reporting we have bertha coombs with more on the news. >> andrew, cigna continue in the line of the report with results ahead of expectation and raising

outlook. $6.22 per share comparing to a $5.48 estimate that we saw and adjusted revenues of $45.4 billion. that supis up 5.5% over last ye. $1 billion more than expectation. they are boosting outlook to $178 billion in revenue and earnings of $22.90 per share cigna health care saw revenue topping 4% year over year. it was driven by premium increases. pricing better this year commercial membership growth was up 6.5% year over year to 16.5 million. cigna saw lower medical cost

ratio. these recent waves of covid hospitalizations evernorth revenues were up 7% from last year $3 billion over last year. despite lower home delivery volumes. the company talked about continuing to invest and expand on the services side during investor day last month, the ceo said the company is open to an acquisition. he was asked about that on the call after cvs said they were looking to make a deal by year end. andrew >> thank you, bertha coombs. we will take a check on the markets right now. the founding partner is joining us and sylvia jablonski is

joining us sylvia, i don't know if you were listening at the top of the show we keep asking has the train left the station or is the train leaving the station or returning later this fall in terms of where the market is? >> good morning, andrew. a great question what we are seeing is a bit of a tug-of-war in the market on the one hand, you have excitement earnings of 50% of names reported now and they look pretty good. it looks like companies have been resilient we had 275 bi-75 bip hikes. we have prices coming down prices and lumber. that bodes well that perhaps inflation has peaked and the fed can slowdown and take in the data the other side of the

tug-of-war, that might not have been the message jay powell is looking at june data wages are rising and employment is still strong. it will be hard for him to achieve price objectives there it is a bit of risk. in the short-term, we have range volatility the train goes back and forth. we could test lower levels than now. i don't think we'll get back to the june levels. particularly in tech it is volatility and sit on your hands and pick your spots. longer term, if you are an investor who looks for longer term, prices are set and there is a good opportunity to add to the portfolio here >> steve, you take issue with that do you agree >> i agree with that i focus in on the technology sector and i think what we're seeing is a tale of three

cities anything online ad supported going through volume a volatili. what is the first thing cut? it will be marketing spend that effects ad supported tech companies. in q-4 and q-1 are seeing a resurgence the market knows the buyers of the cloud hosted products and tools are mission critical tools to grow business no one wants the pain of ripping out mission critical and cloud services that is not something you do at this stage you are trying to keep operations running you probably have done a rif, reduction of force, and more auto automation the third i was referring to is the ecommerce and marketplace go list particulars area that

amazon, uber and doordash and etsy sit in. what we are seeing is a mixed bag there. i think there are three stories within tech right now. >> that last story how do you measure them up uber in one place. amazon in another. etsy in another. how do you try to define that? >> i was an early adviser since the founding of the company. there was a time when in the first three years with uber doing well and growing fast, a lot of investors and team talked about uber being the next amazon focused on transportation and low logistics. half the audience said yes and half laughed the last few years has been tough for uber what happened in the last quarter is that uber has shown

cash flow positive it got 122 million active customers worldwide. it has 5 million drivers one marketplace that is larger in terms of scale which is amazon with 300 million active customers. i think uber has shown core services like ride sharing, delivery, you know, the economy is getting back to work. it is going back to school i think there is a real opportunity with uber and doordash of the world to step up with amazon, the retail spending that is happening with consumers, that is the tease in the economy. inflation is kicking everyone's butt >> that's fascinating to think uber may have reached velocity steve and siysylvia, thank you.

>> thank you >> joe, it sounds like sylvia says i can still get on the train. >> i was thinking, andrew, i'm not saying it will return. i'm hoping it will return. we've been spoiled by ever rising stock prices since we've been here. we don't know what it is like. do you remember in '69, the dow hit 1,000. didn't hit it again until 1982 there are periods like that. if we are in an inflationary period and the fed will have trouble dealing with it. we may hit lows in 2023. we may be in a sickening secular bear that we all just wish, you know, would end. >> and go away >> i'm not saying we're done i hope the opposite. i hope this is a new bull like tom lee and others are saying.

coming up, a new report the future of streaming services at the newly combined warner bros. discovery. zazlov continue iing to cut coss that's next. and business forecasts when you need it. i think it was fine how it was. (air tool sound) to help you stay ahead of the curve... or you could use workday. the finance, hr and planning system that helps cfos make better decisions faster. on the other hand, we had a great fourth quarter. for a accelerate your decision-making world. workday. for a changing world.

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includes two past producing mines, and over 135 million ounces of silver equivalent. dolly varden. welcome back to "squawk box" this morning warner bros. will combine hbo max with discovery they have one classic movies platform it reports later this morning. we will keep our eyes on all of this this piece is not unexpected there has been an expectation they would combine we have seen hints from david zaslov before. >> still something to wrap your

head around. >> you knew it was coming. the point of the merger was to create a super app he talked about he didn't like the silo businesses. he wants to put it all together. >> it seems so different hbo max is still the creme de la creme of content they don't throw it up against the wall and hope for a couple of things that stick they are known for quality i don't know i can't imagine -- i love david, but do it yourself home stuff ornate i don't watch a lot of discovery plus, do you >> i admit, i don't. the question will be i think about how they work the brands together or not and how separate they feel on the app i feel it is possible. that's my expectation. >> there may be some overlap in

support positions? >> if you are on disney plus, that is an overarching brand and you can drill into pixar and drill into nat geo which is a different brand than you think of as disney >> the rationalization of operations between those two >> that's definitely coming. i think separately the question is how can consumers interact with the brands. meantime, when we come back, battleground arizona where efforts are focused to advance or kill democrats new mpmicorose bill we have details on all of it when we come back. >> announcer: executive edge is sponsored by at&t business at&t 5g is fast, reliable and secure li welcome ur third bark-er. oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected

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good morning welcome back to "squawk box. eco checking the futures getting back after the one-day respite of good market action

since july 1st we have made some advances after the terrible first half of the year nasdaq continues strong up 2.6%. now to politics. battle to kill the democrats new reconciliation bill is not only be fought in washington, but on the ground in arizona. ylan mui has more. good morning >> reporter: good morning, joe that's right the frontline in the fight has moved to arizona that, of course, is the home state of senator krysten sinema who remains undecided on the bill even though democrats are hoping to vote this week. business groups are blitzing the air with ads from the national association of manufacturers a six-digital tv buy that went out this week and the goal is to convince the 15% corporate minimum rate is a bad idea she called it common sense months ago the u.s. chamber of commerce is

running this ad in the arizona republic today it attacks the minimum tax and changes to carried interest in the bill it claims the provision allowing medicare to negotiate precip prescription drugs would hurt research and development there are signs the pressure campaign may break through one source says sinema is interested in changes to the minimum tax. others report she is pushing back against carried interest. a long-held position with issues unresolved, arizona is bracing to work through the weekend. back to you. >> thank you, ylan let's get to the next guest. the senate democrats tax climate and drug bill, the so-called inflation reduction act, would reduce federal budget deficit by $102 billion in the next decade

an the propose the is the inflation reduction act. for more, bring in david walker. former u.s. comptroller. it is good to see you, david. >> thank you good to be back, joe. >> rob portman is a republican, obviously. he is not running for re-election. he has been around a long time office of omb director i think he might have some relevant things to say i don't know if you saw his op-ed piece today. it is kind of simple for the case he makes against the bill that is that manufacturers would be shouldering a lot of this at 50% which would hit manufacturers. once that happens, you can connect the dots to workers at those places and consumers that buy whatever the manufacturers are making it doesn't look like an

inflation reduction act. there are, i think, unintended consequences, that would not be good have you done analysis >> i have done so. this is false advertising on the scale i have never seen before whoever named the bill inflation reduction act should be ashamed. it does not reduce inflation the wharton model shows it increases prices after 2024 and doesn't reduce prices until 2027 there is no question we will have to have comprehensive tax reform we have to reprioritize spending and reduce we have to reform the mandatory spending programs. we have to do it this is not the time we have inflationary pressure and slow or negative economic growth bipartisan agreement over years suggest this is not the time to raise taxes, but ultimately we

have to. this is pure politics. >> there are some things, though, that republicans talked about in the past, david can you cherry pick things >> i do think there are positive provisions in the bill they are controversial i have long been for giving the government the ability to negotiate prescription drug prices the argument against that is it undercuts innovation and r & d we are bearing too much for prescription drugs something has to change. the other thing is not lawing advertising of prescription drugs which fuels demand we are the only industrialized nation that allows advertising prescription drugs for that reason it increases demand and prices carried interest there needs to be a change in carried interest it shouldn't be taxed at capital

gains rate it should be ordinary income rates. that will not have a significant impact on the economic growth or inflation. there are positive elements. don't get me wrong this is all politics because they spent trillions of dollars enabled by the federal reserve holding down interest rates artificially low trillions of dollars of debt joe, the only way we restore fiscal that built is through a cons constitutional amendment i'm working hard along with others for that. >> instead of the balanced budget, stabilize the percentage of the gdp that galls me, too the ads. not because i hate the jingles they use i don't know what the drug is for. the purple pill. they never tell me what it is

for, but i want it i don't want the side effects. there are 3,000 side effects they list. are they advertising to doctors? is that who the target group is? do consumers tell doctors they want it? why not spend that money on r&d instead of extended release versions that the patent protection goes out a few more years? >> right on, joe they are targeting consumers to drive consumer demand to put pressure on physicians to prescribe things the patient wants. when you stay and listen to the ad and hear the potential co complications that come from the drug, why do you want the drug joe, house resolution 101 sponsored by jodi arrington and house bill 19. those are the two bills designed

to increase transparency and accountability and force the congress to discharge the constitutional abilities to hold fiscal responsibility. this is unprecedented. this is historic it needs to happen because the future of our country and families are at stake. >> i was hitting around about used the run the peter peterson foundation whatever you are doing, stop it. it is a counter-factual. one ad i like, david that is the couple out on the mountain top and each in separate bathtubs. the next shot they are gone. they have gone somewhere you know what i'm saying that's the one i like. >> they go into the same tub >> they may have they went somewhere.

david, thanks. you know that one, sorkin? you have seen that one what is it not the blue pill. that other one the one you can take and lasts all day, i think >> i don't know about that >> what do you mean you don't know why would you know you need the pill that does the opposite coming up, china taking action in the response to the visit from pelosi going to taiwan. and don't miss our interview with pete buttigieg coming up in the next hour. you don't want to miss it. >> announcer: currency check is sponsored by interactive brokers. the professionals gateway to the world's markets.

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chinese government controls any number of media outlets to push its point of view to the world. that can never happen here eamon javers is here with details of the secret effort to amplify the message from beijing. eamon javers he joins us now. what's going on, eamon >> reporter: joe, this research out this morning the research says according to mandian, chinese control the fake social media sites and fake internet news sites that are pumping out the chinese government message they say it faked the words of

the united states senator. 72 sites that the company suggested of being inauthentic and phony characters on twitter who comment on the sites all of this going out to the world in 11 languages. this week, the fake sites turn attention to the pelosi visit to taiwan urging the american speaker of the house stay away from the island nation that china regards as territory m m mandiant says they are trying to take this down the goal here in this chinese effort is to use these fake third party sites to do the things the chinese government can't go with the propaganda ordinance. take a listen. >> essentially trying to create a vision of reality that reflects the benefits of them. what is great about this is the tools don't have fingerprints all over them.

>> reporter: now one example of how aggressive the effort is at one point, the chinese effort posted fake letters reportedly written by marco rubio to push back on the chinese government rubio told cnbc it is nois no surprise the chinese would try that it is important to expose the networks guys, the question with this is how effective is this fake prop g propaganda network they are not as proproficient. the chinese are working hard to catch up with the other nations. back over to you. >> social media. in all of its glory. we have seen similar things. not the concerted effort masters of propaganda. i guess, i'll get a message from

eunice we're off the air again masters of propaganda. >> yeah. absolutely >> it goes all the way back. >> social media. people believe it. >> right >> social media is huge. orwell could not have imagined twitter. a vast leveraging mechanism for propaganda or mean tweets or tweet about the weekend. it puts power in the hands of everybody. in this case, the chinese government is saying we could n before they are taking advantage. >> thank you, eamon javers the @joesquawk character >> that guy on twitter >> yeah. >> with the blue check mark? that guy >> i forgot about that

>> i've seen that guy on twitter before he says some pretty -- >> i blocked you >> he says pretty provocative things, that guy i don't know him >> yeah, like you don't. ar sorkin. when we come back, andrew r. sorkin don't at me. we will talk about the cryptocurrency regulatory bill in congress and implications to the market and look at eli lilly shares falling. o viig into the numbers with the cedad ricks. that will happen in the next hour

welcome back to "squawk box" this morning, following a rough start to the month of august for bo bitcoin, a new bill about crypto you're starting to see more efforts to regulate this that could and very good thing for some maybe less of a good thing for others where do you stand >> listen, i think we're very excited at the blockchain association that we have bipartisan bicameral members of congress that are willing and want to tackle these issues. i think the bill was introduced this week by senator stabenow and boozeman the fact that we have this level of senator thinking about this

is incredibly encouraging. there's been a long-time debate over whether the ftc or cftc should be the regularittor. we have two that come out and say that the cftc is the place too go . >> i want to get into the weeds in a second, but i want to get at this debate between the ft cftc+ ftc. i'm thinking about solana and other things that might be described as tokens and how

ethereum can be described. but why are you convinced the cftc is the place for all of this >> the cftc already has authority over fraud and manipulation so they do have their feet in the water here and they're also have jurisdiction over futures. so we've had a lot of discussions with the cftc. we think that they're very used to large, wreckelectronic markes it seems to be the best home for the crypto space it's not that we couldn't do it at the ftc, it just seems like the cftc is the better fit >> and i hope you can come back so we can get into the weeds about what you don't like about the bill but to the extent this bill were

to be passed sha, how do you thk it changes the dynamic >> i think 2023 is the year we can get things done. i think there are two big areas and secondary issues as well but the two big areas are stable coin regulation, we need to figure that out and a spot regulator. this is too big of a market not to be regulated. we want to be a constructive partner in that. if you do those two things, it will give comnsumers more confidence and put in a solid foundation for the u.s. to be the leader in the crypto space for years to come. >> kristin, we appreciate you being with us this morning we hope to talk to you about all this and more as it continues in washington >> great, thanks, andrew a big lineup ahead, with ceo

of eli lilly, maria cantwell and buttigieg. it takes a village to support society and businesses have a responsibility to support that village. ♪ ♪ i am peter akwaboah, chief operating officer for technology, operations and firm resilience. when you think about diversity,

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good morning futures fighting for fresh momentum as the recession debate heats up we're going to get you caught up on what's moving markets this morning. and eli lilly reporting results a few minutes ago. the ceo of the drugmaker will be joining us in minutes. and we'll talk to pete buttigieg as the second hour of "squawk box" begins right now. good morning and welcome back to "squawk box" here on cnbc, live from the nasdaq market site in times square i'm joe kernen with andrew ross sorkin, becky is off today

we had a pull back yesterday after a pretty good start to the week july was a pretty good month, given what happened in the first half of the year treasuries were all the way down at like 255 on monday. the fed started talking. and they've gained back 20, 25 basis points in the blink of an eye. and we're still above 270 now on the ten-year take a look at oil at this point. andrew, some interesting news out of people that follow gasoline demand. do you know that gasoline demand is now below where it was in 2020 so the prices have finally >> yep >> they've come down, but they're high enough to where people are actually driving less than -- >> that's demand, right, this is the demand problem >> the demand is now down to the point where they should continue to fall, but they're falling, i'm not sure they're falling for

the right reasons. they're falling because it's too expensive for people to drive very far, and i know that you have tried to talk you out of driving 50, 60, 70 miles to save a nickel a gallon. have you done the math it doesn't really add up when you do that, where do you go you go out to eastern pennsylvania how far do you actually go >> to find the cheapest gas? >> yeah. >> across the bridge to your home state of new jersey is where i find the cheapest gas. and i got to pay the toll on the george washington bridge, and then it's undone whatever savings i had. >> that's your favorite, when you go south from there, you love that little stretch of road there, don't you, with all the toxic waste dumps and factories and all that >> oh, when i have to do this, yeah i know about that part >> there you go again, endearing yourself it's the garden state.

>> endearing myself to the great garden state >> it's a funny-smelling garden, isn't it in. >> it depends where. there are some very beautiful parts of the garden state. >> go ahead. i do >> you just got to get on the beach of jersey shore. hang out on the jersey shore with snooki. >> with snooki i need some ink. >> we're going to talk about the fed. fed officials pushing back yesterday on the market pricing for rate cuts, but traders sticking to their guns at least so far, that the central bank will reverse course in 2023. who is here to talk about the fed? the one and only senior economics reporter, steve liesman is here to talk about what he thinks is going right and why it matters for the market steve? >> hey, good morning, andrew few issues are more important for the outlook in equities than

who has this right right here on "squawk box," st. louis fed president jim bullard was telling us yesterday he expects the fed to be higher for longer presidents' daily from san francisco and from minneapolis >> some are expecting us to cut interest rates next year i don't want to say it's impossible, but the more likely scenario is that we would continue raising >> okay. so here's conflict in numbers. both markets and fed projections are in line for this year with the fund rates seen rising to end the year at 340. but next year markets have cut priced in. the gap, 80 basis points 380 for the fed, 303 for the market obviously the economy and inflation are going to determine

who's got this right a full-blown recession that brings inflation down sharply could bring about those cuts since the fed began publish being its rate outlook in 2015 it overestimated rates it ended the year at 0.24. but the past three years it's had a better track record when it promised to keep rates near zero during the pandemic this time it's different nobody really cared back then that inflation came in below the 2% target. people care an awful lot now that it's above that target. the fed could end up on the high side either way, investors need to mind the gap >> steve, we have, first of all, thank you for that we have breaking news out of europe maybe you want to respond to it. the bank of england raising its key interest rate by half a

point. want to get your reaction to that >> so this was expected. it's largest rate hike by the bank of england since 1995 and has now joined the 50-basis-point club. and i think the key here is they're getting pressure, the bank of england, the governor's getting pressure domestically. one of the candidates, one of the potential new prime ministers has been criticizing the bank of england and its failure to deliver the inflation on target. the other issue, if you look and see what's happening to the pound here, my guess is it was priced in, but that's really been the big story the pound, i sighee it's actual it's a little weaker against the dollar the pound had been as high as 140 but has come down as the federal reserve has raised interest rates and other banks have been left behind. this is a critical issue in europe, england and other places where these central banks need

to keep up with the fed in order to keep their currency, the currency values. >> steve liesman, thank you. appreciate it. joe? conoco phillips is reporting, and as you might imagine, above expectations. put some color on this $91, the yearly high is $124, not back to that yet, 391 a share. the consensus estimate was $3.80, it also announced a $5 billion increase in the amount of capital it plans to return to shareholder this is year it's got some production, normal, ordinary dividend of 46 cents. just looking to see, you know, that's a lot of money getting back to shareholders of the

makes you wind howonder how the divvying up the remaining money. eli little eylly reporting time ago it's down about 4% after a lowering guidance. and andrew, it's interesting, because some of their drugs are already capped that's why they missed so david rick, the ceo, is going to join us and will have interesting comments about capping drug prices. let's get a check on the market before we go to break. they're in the green "sawbo wl rhtac quk x"ilbeig bk. your record label is taking off. but so is your sound engineer. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire (dad) we have to tell everyone that we just switched to verizon's new matching your job description. welcome unlimited plan, for just $30. (daughter) i've already told everyone! (cool guy) $30...that's awesome. (mom) it's their best unlimited price ever.

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and it's never too late to join them. get unlimited data with 5g included for just $30 a line per month when you get 4 lines. switch to xfinity mobile today. eli lilly out with earnings a few minutes ago, missing estimates and cutting its full-year forecast david, it's good to have you on, thanks for joining us. >> great to be here. >> the forecast cut to 709 to 805. you had been at 815 to 830. >> and i think the street was actually above that. one thing be being pointed out is insulin capped. the other thing that people talk

about is competition for one of your cancer drugs. you've already got some pricing pressure and you're pointing out competition. do we need to do anything at this point to, is that the problem where the inflation in this country's coming from prescription drug prices? do we need to cap those? do we need new legislation >> not from eli lilly. our pricing in the last quarter in the u.s. was down 8% as you're pointing out. i think prescription drugs are one of the slowest parts of the cpi. it was a bit messy in the print. our newest products, which is really how you value drug companies grew 20%, and we have five more launches in the next year and a half. but we had a number of one-time events the cancer drug. we invent new and useful things, and after a time they become

really cheap and that's what it's doing, the first-line lung cancer standard of care along with keytruda from merck. the sec changed its rules about how we treat the cost of acquisition to include them in non-gap and gap accounting and we had a big one in the quarter of $440 million buyout of a new cancer drug, and we put that through the income statement. so it looks like earnings are suppressed when in reality in the past we didn't do that we incl we include td that in the forwa guide. i interpret it as more strength in the business than downside. >> what do we call it, the manchi manchin-schumer law, t

the inflation reduction act. do you think it's a bad idea for lower prices to be negotiated? most people think that's probably fair game in a market system >> we do oppose the bill first, i have to say, lilly's been for changes there's a part for seniors called part d that we would support if it was a free-standing item caps some out of pocket and does some other things to smooths out costs. but the issue is the government getting involved in cost setting. what they do is after nine years on the market for a small molecule, 13 for a biologic, the government tells you the price. the alternative is to withdraw

from government formularies or accept a 95% excise tax on sales. that's just effecting a new price. we would assume that that nine years for small molecule, 13 for biologics becomes like a patent expiry we have a few drugs that will be caught nup ina, that. mostly, what's damaging is it will cause investors to steer investment away from certain kinds of drugs in particular small molecules and mostly for cancer and specialized diseases who will lose? more biotech and patients who rely on those. >> we had a discussion with the former controller of the currency, david walker, and he has an issue with all the

advertising of prescription drugs. he says it's marketed to consumers. consumers, you know, then ask their doctors for it it's got to cost a lot of money. i see night after night, depending on what station you have on, there's a lot of different advertising that you get a lot of drugmakers get jingles. they take old songs that were bad to start with, and they change the words, yoe sem pick and oh, oh, oh, it's magic, it's horrible why not spend that money on r&d? >> hey, joe, so your question kind of cut out on my end. but if i got the gist of it, the question about r ar&d versus marketing. that's a trope the whole industry spends about $6 billion on advertising. we could cut advertising to

zero, i think people would be less aware of treatment options for them certainly we can change how advertising happens in the industry, we could have a long conversation about that. but this industry invests enormously and eli lilly spent $7 billion, $8 billion alone consider what happens outside of the industry, which is about $30 billion. we just wouldn't have new drugs if it weren't for the private sector funding their development. so i think that that's really not good information we could have a conversation about improving advertising and marketing, but i don't think this is about rerouting dollars to r&d we do a good job of balancing those two things, and probably we should leave the private sector alone in both those regards. >> has your strategy changed at all given the last two years what we've been through with covid and the pandemic do you think of moderna, no one

ever heard of it oh, he's not hearing i need to ask you, sorkin. if you were running eli lilly, would you change your corporate strategy based on the prospects for something like that happening again in did you see moderna's revenue a quarter? >> i did >> it was like $4 billion. they weren't even on the map of about covid. therapeutics are great >> the question that i want to hear and maybe we'll get david back today or if we don't get him back today we'll get him back in the future is the other part of mr. walker's point, which is not so much the money is diverted. >> he's back so go ahead and address -- >> i can ask it to david i know it's a longer conversation than advertising, but what of the things walker was talking about i think was not just the money being diverted from r&d to advertising which may and trope and may not

be accurate in terms of how to think about that, but more broadly that advertising is allowed in the united states and oftentimes not allowed in other countries and what the advertising component of it has done is raise the cost of drugs for americans, given the additional demand that the advertising has created, rather than it just being prescribed by doctors. >> i see well, i think what it actually does is speed up adoption of new therapies. i think we do see a difference there, to be fair. but andrew, the biggest factor in utilization is how the drug access and reimbursement system works. the government often regulates those in other economies the problem is they often make the decisions in ways that aren't focussed on allowing patients to access new therapies but balancing a budget in a given year for a government. we have a much more de-central

iced de-centralizeded system. but the u.s. is about in the middle of the pack i don't think advertising is causing us to spend more on drugs as a percent of health care probably it speeds up the adoption of newer drugs. i'd say that's a good thing. >> i think it predates you, david, but cialis is actually a lilly drug, isn't it in. >> it is, and it's now generic >> that's the one i liked. people in the bathtub separate out on a mountain top? where is that place? i want to go to a place that has outdoor tubs on a mountain then both tubs are empty, know what i'm saying? >> i get it. >> it's a good ad. >> that one i like all right. so are you going to focus on future vaccines or therapeutics

for the plague or monkeypox? did that change your notion of how to steer eli lilly, the last two years? crazy. >> you know, we added, we the leader in covid anti-bodies and still are. we have the last one standing against the omicron variant, and we did that because we're good at making those. clearly our industry stood up in a great way during the pandemic and a great reminder of the way we create. >> and science allows us to be very nimble. >> really incredible vaccines >> appreciate it i know i don't care what you think about drug companies they saved our collective took uses >> booking holdings, financial resulting beating expectation.

one ceo saying it's not done yet. and pete buttigieg will talk about the steps the white house is taking to try to ease the pain at the pump "squawk box" coming right back time now for today's aflac trivia question. what is ohio's number one industry the answer when cnbc's "squawk box" continues e aflac pre-pain . 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... (shelf crashing) yeah... ♪ ♪ aflac!

p now the answer to today's aflac trivia question. what is ohio's number one industry the answer, agriculture. nearly one in seven jobs in the state come from agriculture and food production. usda data shows there are more than 75,000 farms throughout the state. welcome back to "squawk box. paramount global just out with numbers. the media company beeating estimates by three cents it stopped the boost of a movie that i loved, "top gun"

maverick are we responsible for this? >> i'm thinking i might even see it again and go to galfons, one of his places. >> i mmax. >> it was so good. i think tom cruise is like the coolest. >> the man >> he jumped like 20 times out of an airplane to get one scene. >> it's remarkable i don't know if we can show paramount's stock. i don't want to be wrong about this, but even though they were beeg beating, it looked like it was down 4% on that news, while it's positive insofar as it's better than expected we have seen a lot of the big media companies really get pushed down over the last couple weeks. >> i don't know if you were, you know, had plans, whether you already got tickets, but "bat girl", you're not going to, it's not happening.

>> right, that's one of david zazlov's latest decisions. and nobody will ever see that film it will go into the vault. >> it had j.k. simmons in it, it had some big stars >> michael keaton is in it but what's so interesting to me -- >> he could never be batman or anything like that >> the reason, the reason that they did it, or the reason they killed the program, partially, is a very interesting accounting decision apparently, which is up until mid august they could actually write it down so they're trying to look for costs to take out. and in addition to not having to spend another $80 million plus to finish and market the film. i don't think anyone's seen anything like that in hollywood for a long time. >> where's zazlov?

we need to have him on and tack about some of this stuff glenn foegele. and pete buttigieg will join us to talk s icgapres and more. you're watching the one and only "squawk box," and this, yes, is cnbc in three seconds, pam will decide... i'm moving closer to the grandkids! wait. i got to sell the house! don't wait, just sell directly to opendoor. easy as pie. piece of cake. whichever.

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house speaker nancy pelosi made a troval controversial viss week to taiwan was the trip good for business jon fortt is here to weigh in. >> it was good for business, and the timing was important let me acknowledge what made it controversial. taiwan is a prosperous nation that china views as a break-away province that it has every right to take back and the u.s. position since 1972 has been to stick our fingers in our ears and say la, la, la. but a lot has changed in 50 year china's become a super power taiwan's become an essential global supplier of computer

chips, and the policy of engaging china in the global economy has not weakened the communist party's grip upon power. the opposite has happened. it has emboldened china to squash democracy in hong kong. the u.s. has helped stave off russian aggression right now, and it would be a bad time to wrestle china, too that's why it's a good time for pelosi to remind china that we have our eye on the ball it makes it less likely that they will disrupt business in asia >> it ratcheted up tensions no doubt at a time when business don't need another point of uncertainty. we're still dealing with ukraine. >> true. joe. on the other hand, this was bad for business, this trip. i believe it was the great philosopher quincey jones who said don't let your mouth write

a check that your body can't cash that's what speaker pelosi has done the u.s. is in no position to engage militarily with china europe's in no position. and at a time when we need unity and stability in a high-stakes second half of the year, this is opening up a rift between the legislative and executive branches what it has done is make china an integral part of the global supply chain, given that the war in ukraine has already disrupted food markets do you really want to give china a reason to further hamper trade with so many economies on the brink of recession we don't and part of the chips act was to give us access if china hampers our access to taiwan it's too soon for pelosi to act like it offers business any

protection from harsh consequences, joe. >> just a lot of things to consider, jon. who knows. is this a legacy issue for her the people, her biggest critic said it was an ego thing >> oh, joe, there's no egos in politics >> this is sort of, if she's in sort of the waning days of her reign, is it really a reign? of her being speaker maybe there is something to that we do like, at times, to stand up for what we think of as morally right, but then again, there's so many times when we look the other way, jon, and it makes you wonder where you pick your times to say everybody's got to be like us. and then some people would say we're not that great either, some of our critics. >> some people are always saying that, both outside and inside. it is, i think, highlighting the one-china policy and how, i

mean, certainly, it's long in the tooth, right we have some pretty strong feelings about taiwan as a trade partner, don't we? >> yeah, we do and it's a very awkward, strange history. it goes back to like the 17th century in terms of when you, you know, wasn't really part of china in the last couple hundred year not really it it's foremoza and japan. the chinese think of it as a break-away territory all right, jon, good to have you on both sides i don't know which way i'm on either i think i know where andrew is >> always think you know where andrew is. >> both sides of the hand. both sides of the hand okay coming up on the other side of this break online travel booking holdings reaching a pandemic recovery

milestone in their latest quarter, but glenn fogel says the travel recovery isn't over yet. he'll join us to discuss the quarter and his outlook. futures. >> take a look at where we are nasdaq up about 39 points. we're back after this.

welcome back to "squawk box. we are in peak travel season here in august but airline troubles, soaring prices and investor recession concerns may be softening growth in the travel industry joining us is a member of the ceo council, glenn fogel they posted second quarter results but missing the street's expectation. we are in what people thought was going to be a yolo summer. i don't know if you think the yolo summer continues into the yolo fall. >> thanks for having me, andrew. i'll tell you, we are very pleased with what we saw for our second quarter, what we' n announced last night we look at the number, i am very pleased with where things are and certainly the sign that it

is so crowded at the airports is actually a good thing for business, unfortunate for travelers. >> and so, what is your sense of the rest of the year what is your sense of what '23 could look like? obviously, investors are trying to project out not just what happened but where this all goes we've been talking about the price of fuel and gasoline of course is your sense that the pent-up demand piece is still there, so there's going to be continuation of this? does it slow what's your thought? >> obviously, very hard to predict the future as we all know we look at our forward bookings and see for the current quarter, third quarter, we expect to have record revenue and this is our seasonally biggest revenue quarter, and we look out further, fourth quarter. you know, what we have on our bookings right now compare to 2019 at this time, and we are up 15% in gross bookings. all be it that is use ing a euro

basis. there's a currency impact that's going to bring it down about ten percentage points with the exchange but one thing is the booking window, how far in advance people are booking, it's shorter than it was in 2019. so we have less visibility we're not sure what's going to happen and the points you just made fuel, up a lot people spending more money on filling up their cars. people concerned about inflation in general these factors certainly could impact but the long run, people are going to continue traveling and will travel more and more otver the long run >> we've talked to a lot of retailers, and i know retail is a totally different business, but you're seeing the move down, meaning people are getting a lot more price sensitive are you seeing the same thing? >> no, actually, we really haven't. we add that are people going for a lower-star hotel for example

didn't see that. are we seeing people spending instead of seven days, sink six day, reducing the length of stay i've seen ups and downs. and people start pulling back, et cetera. for me, what we do here is build a better product in the long run we will do better and we know the industry will grow in the long run. >> you've heard the complaints about the airlines, and just how difficult it is at the airport and increasingly what seems like higher prices to get on a plane. do you see that persisting >> well, you know, obviously, the complaints are legitimate. look, if your flight is canceled, i've had flights canceled it's unfortunate, a sad thing. you have to rearrange things it's been hard to bring people back to work in the air industry as quickly as demand has come up and they're trying the best they

can to make it as comfortable as responsible. but it happens i understand that. but when you have a shortage on supply and people want to travel, it's supply and demand we will reach a new equilibrium. people will have less concerns about having problems, and we will eventually see prices coming to a more reasonable level. >> what do you make of this jetblue merger good for the business? bad for the business good for competition bad for competition? >> look, before i joined price line i was an investment banker and my clients were airlines so i dealt with a lot of m&a in the airline industry overall, air travel, i know people don't feel it today, but overall, overall air travel has significantly improved i'm an old guy now

i remember traveling when it was a rare thing to do most people didn't travel by jet across the continent or across the ocean. now so many people can do it and certainly, the idea of bringing companies together, make things better for the consumer and i'm looking forward to the results. >> glenn, we got to run, but should we be buying insurance on all these trips? at the end, when i get down on the website and i've bought everything, and it asks me for the insurance, do i accept or decline? and a lot of airlines now do free cancellation. >> it's an individual choice we do off, i think it's a great thing in terms of feeling safe that if anything goes wrong you're covered i believe in buying it myself. but everybody gets to make their own decision >> you know me, i'm a cheapskate, i don't want to have to give you the extra margin >> yeah, i know.

>> joe >> you get those calls where people pay for your funeral? you get those? it's like life insurance, it's tough to get benefit, it's a tough sell for me. you got to do it, obviously. now i get calls to pay for my funeral expenses i'm hike, do i have to die for this and they go, yeah. that usually shuts them up never mind is that a big sale point for you? your funeral will be covered great, thanks for calling. coming up, transportation secretary pete buttigieg on the recent drop in oil prices and what the white house is doing. and then phil mickelson and other golfers filing an anti-trust suit to challenge their suspensions by the pga tour some of the manufacplaintiffs ae seeking a temporary restraining

order that would allow them to play in the fedex cup next week. and we'll talk about the suit and the battle between liv and the pga, "squawk box" coming right back

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from the company that powers more businesses than anyone else. call and start saving today. comcast business. powering possibilities. gas prices across the country have steadily drop now for 50 days. and the white house say this is

is a hopeful sign that things are cooling. joining us is transportation secretary pete buttigieg good to have you on. >> good to be on >> i've told you my wife's name, penelope >> good name penelope ran the kingdom >> you don't call joe joe though your twins >> he goes by gus. when he's old enough to decide, maybe he'll favor a different nickname >> is there a birthday coming up >> yeah, we're within days of the ftwins' first birthday. >> penelope rose, what a beautiful name you can still call him joe occasionally >> in your honor, i'll do it >> don't curse him with my honor. you know what i want to ask you first? every time i see a poll for who, if president biden doesn't run

for reelection, you're like at the top of the, you're, sometimes you poll better, i dare say, than the vice president. what do you make of that and how do you feel about that and what should we think about that and don't just dodge it. just tell me whether that's something that might happen. >> i've got a day job i've got way too much on my hands right now. >> that's the same answer that everybody -- >> it's the right answer, joe. you look at the responsibilities that this department has, the job that the president of the united states has asked me to do and we've got 46 new programs from this law alone hitting this department alone there's no time to get caught up in washington parlor games we haven't even gotten to the midterms i'm looking forward to supporting the president's reelection, that is as much a i can say about these things in an

official capacity. we have an administration that already has a lot to be proud of we're pushing hard to make sure we have a lot to be proud of >> i haven't asked you a question yet you're so good at getting on point. let me start with this the average price of gas, and you tell me whether this is good it has dropped but the four-week average of gas line consumption, the best gauge is now a million barrels lower than it was in the summer of 2020, so the $4, even though it's come down, it's at the point where people are driving less than, even during the pandemic when there weren't a lot of people going out. so the inflation is still biting people mr. secretary >> no question the inflation is still biting people. that's why it remains the president's top economic priority i will say there's a lot of layers to that figure of

consumption going counsel. p down. one is that more people are comfortable using transit. there's no question that we want to continue to see gas prices come down and be more affordable for americans, and we want to see prices in general get under control. the steps that have been taken have a real impact on that we're going to keep pushing. >> the, we've talked about the fed a lot. and it's an unwieldy tool to try to conquer inflation, and that is by trying to lessen demand in a lot of different areas this isn't the greatest way to do things it would be better to increase supply, a lot of people say. let's get back to what i always, i don't know if badger's the right word, but i always ask you whether we're doing everything we can on the supply side for production, and we know that people want to move to

renewa renewables you've made that point. some would say that germany and europe have rushed it. would you say that you're envious of the energy mix that germany has right now in terms of hydrocarbons versus renewables or do you admit we need ten years of maximum production of hydrocarbons as a bridge to the future >> will,ell, look, germany's gog to do what's best for germany, the u.s. will do what's best for the u.s. what we're seeing in terms of keeping up with the red-hot demand that has been the case in this economy under this president and what we need to do candidly in order to actually deliver on this infrastructure bill, it is going to test the productive capacity of this country and this economy. in a good way. from raw materials to workforce. and we're investing a ton in workforce, including on the programs that my department's

working on, and in energy. we got to make sure we're ready. and we also have to make sure that we drive that transition to domestic, clean energy i don't think anyone's under illusions that that can be d ea easleyyly or overnight it helps pave the way for that zero carbon energy production, including, by the way, realistic choices around nuclear, which is maybe not zero worry, but it is zero carbon, and is part of the story, which is why it's part of what is supported with the tax and credit structure that's built into the inflation reduction act. yes, we have to pay attention to the supply we respect the independence of the fed, a big difference between this administration and the last but also realize that the fed's got their job, fiscal policy and it has to be there to

support a strong, resilient, robust economy and when i say supply side, i mean it in a way that's a little different than the way the term was thrown around in the reagan years. but there's no doubt that we have to be looking at the production capacity of our country. >> i want to ask about the subsidies that now come back into play for evs. in certain cases it will help the likes of tesla which would have been out of business or not have had those subsidies, but also hybrid vehicles, it looks like will have those subsidies, and there's some thought that that may crowd out or may not incentivize the move to full evs as quickly and what do you think of that critique >> i think some of the details are under discussion right now but what's important is that we get to zero emissions as quickly as we can. and that, too, is not automatically a switch i think there are a lot of

consumers, including me, by the way, who have turned to a plug-in hybrid vehicle that is for all intents and purposes a zero-emission vehicle most of the time when you're around the city but use gas when you're out on the road. a lot of the more affordable options have been of that type still, the long-term goal lass tohas to be to get to full, zero emission we also need to make lsure that our oems have the chance to gear up and produce for that. sh these vehicles are increasingly popular. we've reached the 5% mark, which doesn't sound like a lot there are a lot of different ways to get there.

we're trying not to dictate every single step of this transition, knowing that ultimately it's up to industry and very, very different companies, from the teslas of the world to the big three in detroit, all doing this in different ways but all helping lead the way toward a made-in-america ev revolution >> all right, always up against a hard break whenever we have you. but it was good to have you on, mr. secretary. so penelope and gus, same birthday, weird, isn't it? what is it, september, what? >> august, august 11 coming right up. >> i thought it was september. august 11. what a coincidence that's really cool make it is convenient, oh, they're twins, i get it. i got it when i'm kidding around, i need to say it, because i will end up on like a ron burgundy website, i swear to god they'll put me on there like i don't understand things. good to you have on, happy

birthday what sign, by the way? what's august 11th >> i don't know. i'll be in trouble when i get home >> leo leo! >> lieon hearted when we come back, phil mickelson and other golfers file a lawsuit against the pga tour we'll talk to an anti-trust attorney about that case, and later, washington senator maria cantwell on the chips t, tache future of the inflation reduction act and much, much more squauk coming back for the big hour ahead

another busy day? of course it is. you're a cio in 2022. but you're covered. with security that protects your company everywhere, on-premise... in the cloud... and right here too. comcast business. powering possibilities. good morning futures trading water ahead of the opening bell, but it's been a big week thus far, after an s&p and nasdaq are now positive for the week, and the dow is close. another slate of corporate earnings hitting the take. we're hitting the numbers from eli lilly and alibaba, and liv golfers go to war with the pga tour nearly a dozen players suing

their home we'll see if they have a case. the final hour of "squawk box" begins right now good morning, and welcome back to "squawk box" right here on cnbc, i'm andrew ross sorkin with joe kernen, becky is off today. dow up by about 20 points, the s&p up a little over two points. nasdaq up about 15 points. take a look at treasury yields as well. that's a number we've spent a lot of time focussed on over the last weeks and months. the ten-year note. we want to et gget you caught un

some of the big names reporting. eli lilly cut its full-year forecast ceo dave ricks told us that lilly's fundamentals are healthy. >> it was an unusual quarter and a bit messy in the print, but the underlying business is super strong we've got five more launches in the next year and a half actually, we're at revenue, holding, despite the head wind of 700 million i would interpret the strength than down. >> alibaba shares are jumping. despite flat revenue growth for the first time ever due to covid lockdowns in china wore b worries about that listing in

the u.s. shake shack getting burned revenue was light. and the company said june sales were below its expectations, joe. let's get back to the broader markets, coming off a big mid-week rally on wall street, cnbc's senior markets commentator, mike santoli joins us people in general feel better when a nuclear yoblivion is averted. that's part of what we saw yesterday. >> that's party of it there was a surprising clenching up of the markets as speaker pelosi was out in taiwan but nothing really changed from the overall picture, which is a little bit of relaxation take a look at the two-year chart of the s&p we're up 14% why? the scene was set, because here when we were at 3600 and change, the talk was, well, we got to

get down to 3400 there was definitely a bearish consensus. a lot of that has been burned one this rally i have the two-year chart up here, the june highs are right there. but go back to the spring of 2021, last year. the market really went sideways before that push higher into later last year. there's just a lot of traffic in this area. so there might be significance tactically if you do jump above 7580 the nasdaq 100 is a similar story but an amplified version of it. you had deeper decline, about 30% high-to-low. this is a one-year chart of the nasdaq 100 up 20% now off the interday low. it's still facing what people would say is this test right there. still declining since november obviously, apple up almost 4% yesterday. there's a lot of a grab for some of those biggest stocks that did get blasted. now some of the more, most

hard-hit stocks, which were the bubbly stuff, back in the early part of 2021, you have a very similar-looking chart, whether it is fintech, the fintech etf, the ar arc innovation. i think the lesson here is a lot of stuff was heavily shorted and left for dead. can you have some more lift. and credit markets are confirming what we're seeing in terms of equity strike, this idea of a soft landing looks plausible for the moment we've obviously got job numbers, six or seven week, though, until the next fed meeting, which is relevant, giving the market a chance to breathe a bit. >> i woke up to a piece, mike, why the u.s. stock rally is starting to look more like a new bull than a bear bounce. and they're quoting some guys

from ned riley no, i'm sorry. ned davis. >> you said ned riley >> he's another guy. this is ned davis. the advance is broadening out. there still could be a problem and still get the new lows, but at this point it's getting broader, and that could be positive >> yes, a lot of the triggers that you did see in turns of these breath signals, 80% of all stocks getting to a 20-day high, just an aggressive push. we'll show you a real bit of depend rushing back into the market not every one of them gets checked off. not every one of them lines up perfectly, but it has won back part of the benefit of the doubt among folks who look at those types of things. as you say, it doesn't mean it's up and away from here, but it does seem to build in a little bit of a cushion to suggest that maybe that june low is of some

significance >> mike, you see the real feel today? it's going to be >> yeah. >> 103 you got a pool >> i real le felt some of that on the way in. >> you got a pond? pond or pool pond would be good for you, i think. >> yeah, probably so >> got that going for you. all right, 104 thank you, mike santoli. >> yeah. meantime, china holding military exercises in the waters near taiwan hours after house speaker nancy pelosi wrapped up that high-profile visit to island take it straight to beijing where eunice yoon's with us. >> thank, andrew, the large-scale exercises being described by experts as an unprecedented war game the air and naval drills are taking place in six zones surrounding taiwan, the closest ever to the island with one ten miles from the island's southern

coast. and for the first time they will include an area at least of island that is deemed sensitive. the pla is using tactics unseen in a quarter century, such as firing ballistic missiles in the waters near taiwan taiwan officials say they are on high alert these drill are taking place within their territorial waters, and that they have had to chase away what they suspect to be chinese drones at one of t theislets that they control. and there are an unprecedented number of cyber attacks and on infrastructure at the railway station and businesses which include 7-eleven so right now, unclear exactly how long this is going to take place. the choices are supposed to end on sunday. but their chinese state media have been suggesting that these

intensive drills could become much more normalized the state media had said that these drills could be a new beginning for the taiwan strait. now there isn't, there's still a cost, though, for beijing, because of all these military, all this military action the g-7 issued a statement criticizing china and china today said it was break ing off scheduled meeting on the sidelines with japan that shows that the situation right now in the taiwan strait is already having international implications >> okay. eunice yoon, thank you for that report from beijing this morning. we'll keep our eyes on all of this coming up, we ask one of the chip bill's biggest congressiona congressional boosters why she thinks the measure is critical

plus more drama at the intersection of golf and business some of the sport's top players are playing for saudi arabia, the tour, that is. and they'rsue ing the pga tour stay tuned you're watching "squawk box" on cnbc (dad) we have to tell everyone that we just switched to verizon's new welcome unlimited plan, for just $30. (daughter) i've already told everyone! (cool guy) $30...that's awesome. (mom) it's their best unlimited price ever. (woman) for $30 a line, i'm switching now. (vo) the network you want. the price you love. only from verizon.

welcome back to "squawk box" this morning got some disappointing news for super hero fans.

warner bros. scrapping plans for the bat girl film. it didn't test well with some audiences. and the decision to not release bat girl reflects our strategic shift as it relates to the dc universe and hbo max they just reported earnings. and you're looking at that stock now about off 3%. want to get to julia boorstin with a look ahead at warner bros. discovery earnings which we're going to hear about tonight. >> good morning. let's start off with paramount's better than expected 19% revenue growth the stock down this morning. it's now down about 3%, as we've seen with some media companies

it is the streaming numbers that are moving the stock taking a look at the company's total direct-to-consumer describer base of 64 million, that is a million and a half short of analyst expectations. the company lost more than expected on the direct-to-customer division. paramount plus grew a hair less than expected. and pluto tv service had fewer active user than it anticipated. it had nearly 70 million compared to the 73 million that the street forecast. the ceo saying in q2 we grew total company revenue by 19% and took market share in streaming and blast tv, in box office and upfront dollars all while increasing our penetration of the most important growth market in media streaming.

the earnings call will come up in about 15 minutes, and we'll see if some of these less-fast-than-expected trends are reflected in warner discovery. that report this is afternoon. we do expect to hear from ceo david zaslav about his plans about how he's going to be combining discovery plus and hbo max and maybe he'll talk about some of those cost-cutting decisions like shelving "bat girl" as well the andrew, joe? >> the "bat girl" situation, we've heard reports that it relates to an accounting piece, not just the additional money they'd have to spend on the film or the quality of the film but because they bought the company and it was made before hand, if they don't release it they can actually take it as a writedown, is that right? >> i would point out that david

zaslav has to cut about $3 billion in costs and there could be multiple reasons to shelf a movie like this yes, they've $90 million they could spend another $200 million to market. he might be angering a lot of people in the creative community. i was hearing a lot about their yesterday in the hollywood world about how frustrated they would be to have a big piece of content never see the light of day. >> i heard all about it. my son is a film junkey and twitter was exploding. they're real i will, really unhappy. and hbo max, some rumors about what happened there as well for content, right, julia? >> well, there have been a lot of rumors flying around about

hbo max, but i would just say -- and i'm not going to repeat the rumors, but i would say david zaslav understands the importance of hbo and hbo max. how they end up combining that with discovery and how much they charge for the bundle, we're waiting to hear on that. but i think they very much understand the value of the brand and the premium content that they're so known for in these shows, whether it's succession or a spinoff of "game of thrones." that's going to be launching in a couple weeks big budget but high-profile content that could get new people to sign up for this kind of service or get existing subscribers to stick around. >> i don't know. you say content and you had some fifth sequel of some dc comic soup that's not, what about "whiplash" what about movies like that?

julia? >> by the way, movies, it's ""top gun" maverick is the reason it's performing so well "top gun" maverick has been in theaters for months now and has been doing well, but it's not a one-size-fits-all model anymore. and we'll see what all these companies say about how long they're going to be keeping films in theaters. >> they had 40 year to make a good sequel. that's what it takes not 40 but good things take time. phil mickelson and ten other pro golfers playing on the saudi arabia-backed liv tour are file ago suit against the pga tour claiming that the pga is trying to choke off the talent to liv joining us to talk about whether they have a case is an

anti-trust attorney and partner with seyfarth shaw i was surprised that it almost looked like the pga tour might have a problem with our regulators >> bra >> great to be here. i'm a big fan of the show. i think things are going to move fast late last night a judge was assigned to the case and an order was set for a hearing on a tro. claims for relief by three of the plaintiffs that they want the tour to be enjoined to allow them to play in the fedex cup on friday it's not an apples to apples situation, but in july, a similar claim was made before the scottish open and a uk court allowed

al allowed those three golfers to play in the scottish open. this suit will probably take 13 to 16 month, but we will get a ruling very unique defense available to the pga tour here in terms of what anti-trust lawyers call what is the market or what is the injury in this case, liv arguably, is not even a typical entrant into the market because it has unlimited bank funds. it can do whatever it wants. arguably, it's using the liv tour for sports washing, for a media platform and then, if you have an unlimited bank account to sign up these players, and then players claim they're damaged

when the typical juror is worried about filling their car for a $5 tank a kass when they hear someone made $100 million or $200 million from liv, there's some worry that claim may fall on deaf ears. >> you make all sorts of fascinating points about the background and the morals and the this and that, but in the end, don't you think a judge is going to look at this on the merits of it being an anti-trust case and saying okay, are these people employees of pea ga, of v what kind of controls can a league have over contracted employees, and what kind of monopolistic practice, can they control an entire industry and i'm not here to defend liv

at all i'm just looking at the anti-trust merits, not all the other noise, which, by the way, makes a lot of sense to me but i think a judge looks at this very narrowly >> i agree all the points that you raised are what a federal district court judge would have to examine in terms of the elements of a federal anti-trust claim. >> where do you come out on that >> i think at the end of the day, the pga tour, its defenses probably are going to prevail. it's going to be a long road to hoe. there's going to be a lot of discovery, a lot of things most of these cases are typically proved by expert testimony. so you're going to have a battle of experts >> explain this. we were talking about uber and lyft earlier this morning. both of those use contract employees. they've made a point of not making those people actual technical employees. that's one of the reasons uber can't tell a driver that you

can't drive for lyft >> in an appnti-trust, the fact that someone's not an employee is very different from a uber when you're talking about wages for an employee or independent contractor here it's a little different where you're talking about the market for services, be that person an employee of some tour, an independent contractor who has options to play in various places so the expert witnesses are going to focus on defining the market, just what that is. going to focus on the pga's internal rules and whether or not it has any anti-trust injury to these particular players. and then the options these players have in terms of the market for their services. so it will be a complex inquiry made by the judge. it will take time, so this will play out in the litigation

probably in the next 18 to 36 months >> thanks. good to have you back. we love having people back who say they watch the show and they love it. that's, maybe you need that, because it earns you a return trip, absolutely thank you. >> thank you have a good one. coming up, what should businesses expect from the chips and science act that's awaiting president biden's signature? commerce committee chair is that right maria cantwell's going to join us on that. stay opportunity you're watching "squawk box. so many bubbles! as an expedia member you earn points on your travels, and that's on top of your airline miles. so you can go and see... or taste or do absolutely nothing with all those bubbles. without ever wondering if you're getting the most out of your trip. because you are.

coming up, breaking economic data new jobless claim numbers and a trade da iuptes all coming up next as "squawk box" rolls on. we're back after this.

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welcome back to "squawk box. rick santelli here at cme with breaking news, trade balance for the month of june breeches the 80 billion level that's smaller than expected even though it's still quite huge it's the first time we're under

80 billion on the trade deficit since the end of last year when it was 78.8. that's good news indeed and last month revised a bit from 85.5 billion initial jobless claims, 260,000, spot on with expectations. at least for the moment. it's up 4,000. how does 260,000 compare well, mid july we had 26, that is very important to monitor. and on continuing claim, it leaped higher. 1,419,000. we have not been under 1.4 million since mid april. this is now the highest level going back to the first week in april, 1.47 million.

these aren't horribly high numbers based on history, but at this particular moment in history, when tomorrow's big jobs report and literally, if you look at what the feds say regarding the market's wrong, every jobs number is super important, because it really could underscore that many may be underestimating how quickly the economy's slowing versus those who think that the numbers are still holding up pretty well it's all a case of whether you you're looking at the here and now or trying to surmise exactly what the u.s. economy's going to look like at some point doubt road interest rates are moving again. 2.75 continued to be a significant level. many large institutions happen to be the wrong way in the market >> do you believe those demand numbers for gasoline

a million barrels below the four-week neither 2020, in the middle of the pandemic we thought they were going to go crazy, drive all over the place, it's too expensive to drive, still. >> it really is. you look towards europe and you read what they were talking about. the markets are very prescient in many regards. i continue to say everything is fungible in the world, whether it's quantitative easing, quantitative tightening or recessionary issue, because if europe or asia continue to deteriorate. if they're right that things are going to escalate, it certainly is going to help the u.s. economy. >> let's get to steve liesman who joins us now with more do you, i mean, the claims, you can't really judge, you can't judge an employment number, the next one, based on claims, can you?

when does that actually have an effect, steve? >> no, joe, you got that right there's a bit of a gap here. because the idea into we're currently in the week of whatever would be the last week of july, the jobs number comes from the midweek, midweek of the month, the 15th or the 12th, whatever date that ends up being. so it's a little bit later but it's undeniable, joe, there has been some softening in the job market you hear some of the announcements that are out there. probably too late to affect this jobs report, it is interesting to think about the friday number as maybe the last really good number of some of the softening. but i want to know, i don't know if rick is still around, but we have a really interesting development going on here, where on both sides of atlantic, both central banks are talking about this idea that we are raising rates and markets keep not believing them there's this ongoing credibility

issue. two messages from the bank of england this morning one is that we're going to be fighting inflation, no holds barred, 50 basis points rate hike and the other is that we're going to have a recession. look what happened to the pound. the pound weakened after this 50-basis-point rate hike the two-year note in england rallied. the yield became lower after that same sort of thing, opposite happened here in the u.s yields went up, but markets did not hear the fed saying that the market is wrong about cuts next year so there's a credibility issue, i think, on this inflation-fighting story where the markets believe that once central banks get into a recession problem, there's going to be rate cuts, and the central bankers say no, we are hell bent on reducing inflation. >> steve, who do you think's right? who do you think's right we know the fed had it wrong

and when i said they had it wrong everybody thought i was craz crazy, okay? but i think they may have it wrong again. and they need to talk tough. they believe the market has it right. they're nervous about recession. i am sure they're pegged to the fact that they have to be big-time inflation fighters. they can't vary from that script but what do you really think >> here's what i think i think betting that the fed forecast is wrong is a pretty good bet and there's a really good track record of the fed, but let me just put one asterisk on that. nobody cared if they weren't hitting the 2% inflation target, well, a few people did, but the body politic didn't. the fed getting it wrong with the upside on inflation has different consequences and risks for the institution. so in that regard, i guess i

hate to say this, it could be different this time. the fed may have more credibility, cojones, whatever you want to call it. the risk of getting it wrong is much higher. >> rick, steve, thank you. good to have you guys going back and forth like that. we need more of that, andrew, like us. >> yep, exactly. the chips and sciences act is awaiting president biden's signature and passage in congress our next guest held three briefings to make sure they understood the semi-conductor shortage and tells us what led to republicans getting on board. good morning to you, we appreciate you being with us let's talk about this bill >> good morning. >> there's been lots of

controversy, a bipartisan agreement in the end to move forward. but on both sides of the extremes of the republican and democratic parties, there were folks who said why are we subsidizing this industry i and so i'll start there. >> well, we just had this conversation on your show about where is the economy of the future and, as a business person, former business person, i can tell you, when times are uncertain, you basically think about what is your core investment and what do we need to do moving forward one thing is very clear. the united states needed to invest in chips and science so that our advanced manufacturing was competitive in the global economy. so we're sending that bill to the president's desk e a and he'll be signing it on tuesday. so now we're asking for the training of a workforce so we have be the manufacturer of advanced chips and you know how important that is to new products and services

and national security. >> what are we going to do to hold companies that get these subsidies to account and i ask, because we've seen. there's a laundry list of companies that have gotten subsidies from taxpayers over the years. f foxcon being one and solyndra being another. >> woe already know that the investment we're making now within five years will be paid back and doubled but we have a commerce secretary who has the ability in this legislation to claw back funds from these companies when you think about chip manufacturing and fabrication, it costs about $20 billion to build one of these facilities, and so we have shrunk from 36% of the market down to 12, and if we do nothing, we'll continue to shrink to the point where the united states is just not a

competitive place to make this huge technology advancement. so the notion that we have to be competitive on an international basis. there was just no choice now we have to make sure that these provisions where we're generating some incentive to make this manufacturing move really encapsulate here in the united states, that we will be watching and the language that says you can't develop other places you can't do stock buy 3 back fe a period of time, this is what will make this successful. >> what do you make of the rumblings that some of these chip companies will be asking for more, not just from the federal government but maybe from states and others >> well, it is an interesting dilemma, given where korea and taiwan and other places have been, and now europe in incenting this sector. we need millions of jobs in this area when you think about the

ancillary products like the electronics industry or the grid itself but the science part of this bill gives ample investment through the national science foundation for that workhorse training and skilling to happen. what we're looking for is partners on the ground universities, states, organizations, business organizations who want to train and skill those to do chip fabrication as fast as possible. >> when people think about industrial policy, one of the questions that comes up is if in fact the companies that are on our screen are wildly successful, and we have to hope that they are wildly successful, there is going to be a moment potentially, and i'm curious about what would you think, if we go back and look at the value creation that's been created at those companies for their shareholders, whether taxpayers are supposed to look at that and

say that's great, that's what we wanted all along or we should have had a piece of that >> well, i just was asked by the economists the other ida,day, w did i think would make this successful and i still think whether the united states will be leading in the design of chip fabrication in the future. it's getting trickier to add the complexity and reduce the power cost to all the things that we are trying to do just look at automobiles and ai. you have to have censors all over the place you have to interpret that so can you have driverless cars look at qualcomm and what they're doing with 5g. so the information age is going to continue to unfold, and the united states has to lead in the next generation chips that are going to allow those advancements to take place if we do that, the rest of that,

we will see many, many, many job growth numbers and right now we're seeing these companies, you'll be having them on your show, that will be announcing e announcing expansions in the next month >> there are other industries i imagine will start knocking on your door saying, you know what? what about us? we're clearly important to national security issues in our country. >> it's true, and if you want me to come back and have a big, big discussion about their, is i heard what you said about the airlines we are further ahead than europe and everybody else because we put something in mace in a short period of time did i want to do it just that way? no but all of us got together here and made a decision, and it is paying dividends for the united

states and the growth we're seeing in the economy and the rebound. so that was a smart policy in this particular example, yes, our hand is being forced by the fact that, let's just say for example intel or others did not make the right r&d investment decisions and fell behind and all of a sudden korea and taiwan put their foot on the gas and basically all of a sudden we look up and we're way behind as it relates to manufacturing. so we had to make a decision but what i think americans woke up to in the supply chain crisis when they couldn't get appliances, when they couldn't get a car, when inflation right now is being driven by the fact that people can't even get a used car then i think americans are like, no, no, no this is as essential as wheat. we want to make an investment. we want it made here in the united states, and we want to be the leaders in the next generation of technology i think the response from americans, they're getting excited. they like competition. they like to be in the fight and this bill is giving them the

tools to do so >> senator cantwell, we appreciate you joining us. appreciate you being such an astute watcher of squawk, given that you know about our views about airlines and we hope to have you back on a larger conversation about all of it. >> i'm serious it's an important discussion i don't really believe that this is an industrial policy. this is about a smart investment so i'm so glad the president's going to be signing it on tuesday. >> we look forward to seeing you again. thank you. >> senator, do you love us equally, andrew and -- do you have a preference? >> yes, yes. >> you love us equally >> i like the back and forth >> do you in. >> i like the back and forth, yeah >> you really don't, it's not 51-49, it's exactly 50-50 for the love >> well, some days, some days, you know, one of you scores better than the other, but, you know, on, you're a good team you're the odd couple, okay? you're like, you make it work every day with the

juxtaposition. >> i can stand jack inclklugmani think. i don't know if you're okay with tony randal. thank you for watching into' that's what politicians know thousand do. 50-50. you were hoping she would say andrew is. i know you were. i got some on my side. wait until we have ted cruz back on amgen is buying chemocentryx the acquisition will add the comp company's vasculitis it has three drugs in early-stage trials to treat inflammatory diseases and is developing a cancer drug that was nice, though. i like to hear that. coming up, jim -- not the

amgen, senator cantwell. ken ng up, jim cramer's first ta othe trading day ahead. you're watching squaurks on cnn becomes become

got some news this morning blackrock has now officially partnered with coinbase. customers of coinbase and blackrock's investment platform aladdin will have access to

reporting capabilities and integration coming after the company said it would explore ways to offer digital assets to its clients. an interesting move there. meanwhile, coinbase has not moved higher on that news. meanwhile, we want to get down jim cramer join us right now i don't know if i have a view about that, if that gives you any -- are you excited about that do you think coinbase now will have more value? >> yes, absolutely, because some people feel coinbase is actually an exchange, not a company it looks like the senate wants it to be regulated by the cftc, which is much more pro coinbase, it makes sense that larry finkel wants to deal with them. it is amazing whether coinbase is doing the right thing or not. they have 200 different coins they list. a lot of the coins are very suspect. even robinhood wouldn't take a

lot of them. but institution wants crypto, a place to go is coinbase. >> what do you think about eli-lily this morning? >> i think eli-lily, there's a lot of misinformation out there about it obviously it had dollar problems, but the few things that matter to me their drug is off to a fast start, the weight-loss drug, and it looks like the fda wants to accelerate their alzheimer's drug if it does work, it will be the biggest drug in history. i felt that the numbers were really good. we sold some stock for my charitable trust we'll talk about that today with our club meeting at 12:00. the reason why the stock is there is because of the work with alzheimer's the work i do with the american brain foundation tells me this is good. >> paramount global this morning with its earnings. some folks worried about just the slowdown in the number of new subscribers to extreme service. then we'll be hearing from

warner brothers discovery this afternoon, and there's lots to talk about there between the cancellation of "batgirl," what seems like a report that hbo max and discovery plus will finally become one app what do you make of it >> i think we're all tired of watching things at home. we don't mind going out. i was surprised paramount's down even more because i think it's a well-known story they did beat the number it's a very hated stock and has been a hated group there's nothing to do. watch amc. it goes up pretty much every day off of paramount so there's a winner, but it looks like adam aaron, not bob >> and we own discovery or warner brothers discovery into the print? >> i like companies that have a decent balance sheet and they don't. sorry. >> jim cramer. >> it matters more than, you know, going out there in sun

valley balance sheet one, sun valley zero >> we'll talk to you againnd e jeust a minute "squawk on the street" is back after this

a little more than half an hour to the opening bell on wall street, the s&p and nasdaq both on pace for their longest weekly winning streak in four months. let's bring in jim pawlson, chief investment strategist. it's been a while. have we seen the lows in the nasdaq or not? >> that's my guess, joe. i like -- i really like this rally. we've had -- this is the fourth major rally in this bear market, and the other three of course failed but i watch -- i monitor an offensive portfolio and defensive portfolio regularly and look at the relative performance, and what i'm seeing in this one so far is the offensive portfolio at every rally beats the defensive, of course, but this one now has beat defense for a longer than any other bear market rally

we've had and almost twice as long, and it's beat it by almost twice as much. so, to me, this one feels and looks a little different, look as little more sustainable and stronger, and also the offensive portfolio of course goes up in every bear market rally, but in the past three, the defensive portfolio also went up this one, you're seeing the offense go up and defense has actually gone down so i kind of think, you know, sentiment has been really bad for a while, joe, so i think the selling has dissipated long ago. the nervous nellys are gone. but the problem has been lack of buying but given how this rally feels with offense really dominating, i think we're seeing investors turning to offense, turning to buying and dumping defensive positions. i think its looks more sustainable, but we'll see >> there's a lot of people i

don't listen to. in fact, no, i listen to them because i know they're almost always wrong you're not one of them >> i hope i'm not on that list >> you're not one of them. why do we not need a capitulation low why do we not need a vix that typically has signaled absolute people just give uing up on the market can that happen over a longer stretch of time that people become so despondent that we made a real low? what gets me is i've seen it in the past and i've been doing this a long time, and when you don't buy when you have a chance because you're so scared, which happened again, because everybody said new lows, when it goes up this much you're wishing you could go back, and it usually doesn't go back to where you can do that. >> well, i think one of the things that's very different about this postpandemic market

and really since the '08 crisis is the vix, joe, has been permanently elevated i look back at this all the way to 1950, and we've had the highest median vix in this bull market, well, and the last bull market that we had by a wide margin than any previous bull markets. in other words, what i'm saying is i think fear has been perpetually elevated throughout this postpandemic bull you see it in conference measures on main street and on wall and in the vix that normally trades 25 to 30 something all the time we used to get back to, you know, 10 to 12 vixs. we just haven't done that. so i think the perpetually higher vix creates a different situation where maybe you don't have to blow the vix out to 40 or something >> yeah. trying to figure it out, jim then we have to talk funds but

we'll do that soon whether we're in a period where we don't get inflation under control, and that would get me worried. we'll do that next time. thanks, jim. >> thanks for having me. >> andrew, 50/50 i like myself more than you. >> i know you do but maybe we should just go to washington would that work? >> good idea let's not. i get a rash down there. make sure you join us tomorrow "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. bulls are going to try to hold on to wednesday's rally and see if they can push above the june highs around 4,180 yields are down as jobless come in 260 k ahead of that jobs number tomorrow. our roadmap begins with the country's largest employer, walmart,