learned about the lineal cable and streaming business it is friday, august 5th, 2022 and "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 we have a big friday, joe. this is going to be something. a lot of news as well. let's show everybody u.s. equities for a moment before we get to a lot of that news and including the jobs numbers which may move this later. dow up 45 points and s&p up marginally the dow closed the highest level since may 4th for the week

nasdaq is up 2.5% the dow is lower by .30% look at treasury yields. 10-year treasury which has been moving around a lot lately now close to 2.7%. 2.69%. crude prices which we have been watching valiantly we are looking at wti crude at $88.85, joe. >> lower than forecasts had them it was 380 developing story in washington key democratic swing vote senator krysten sinema signing off on the reconciliation bill which includes hundreds of billions of spending in energy and climate change initiatives support requires one major change to the revenue side of the bill ylan mui joins us from washington good morning

>> reporter: good morning, joe democrats struck a deal with krysten sinema it could cement the 50 votes needed to pass the new tax and spending bill. sinema got democrats to drop any changes to carried interest in exchange for support instead two sources tell me depo democrats plan to many pose a 1% excise tax to make up the lost revenue. the carried interest would raise $14 billion. the joint committee on taxation projected a previous version of the buyback tax would have raised $124 billion over a decade nbc reports that the new 15% corporate minimum tax would allow companies to take advantage of accelerated depre depre depreciation senate majority leader chuck schumer said he believed every democrat would support the compromise last night, president biden threw his support behind the proposal as well he said, quote, this is another

critical step toward reducing inflation and cost of living for america's families the president urged the senate to pass the bill the senate will reconvene on saturday to vote on the bill that process is expected to take all weekend so final passage, assuming it happens, is not expected until monday. back to you. >> they will get in under the wire when does recess start, ylan >> recess was supposed to start yesterday. they will stay in session through the weekend and after the senate votes on this, assuming it passes, the house has to come out of recess. they already left washington to send it to the president's desk. >> ylan, i want to talk to andrew about this. ylan, thank you. >> we have to talk, joe. we have to talk. >> the carried interest. i have watched you over the

years when we have these guys on that benefit from this inn variably, they have gotten so rich, they all become vir virtuous the one area where the truth comes out and where they just never change their colors and you've poicnted it out. i'll not mention names you know who they are. you will hit them square in the face with the logic of this and you've never gotten a single one of the virtue signaling lefty type guys to say okay. i support you taking this away when push comes to shove and it is their money and tax situation, they never agree with you. they always come up with something like, well, we've got the greatest economy in the world here why should we tweak anything

here or there? i don't know if anything will go wrong. it is so good. what we do with companies where they need to be and private equity needs to come in. without this, on the margin, it might not be as easy to do all of them and you know who i'm talking about. we don't need to mention names i've watched you. >> it's fine >> do you remember you mentioned some >> i remember every -- >> one guy redid the washington monument >> i know where you are going with this. >> i don't want to go there. it is really weird who got to krysten sinema? who got to her >> that's what i want to know. i recognize -- >> donors. her campaign coffers benefit >> it makes no sense this bill, i think, is probably a good bill. i think, i don't know.

i understand why she would want to vote in favor of the bill the overall bill what i don't understand is she is based in arizona. in arizona this carried interest on her constituents is like zilch practically nothing. senator schumer in new york is more impacted in terms of constituents given the private equity and real estate and everybody else for the life of me, i cannot understand this. i don't get it i wonder does she get it does she understand? oftentimes i will say so many private equity -- i like to think she is smart a lot of the private equity folks do the jujitsu type of thing where it has no impact on

whatsoever because it has to do with the pay to the private equity executive not the limited partner who is putting up the money >> the other day, you asked bill ackman about it. he gave the pat answer for why it is something that -- >> no, i think bill ackman is against it >> he is i thought he said it helps -- okay i take it back. >> ackman is against it. dimon. >> those guys. >> they are in the business. those are their clients. you think they would be incentivized to carry their water. they are carrying less water than sinema is carrying for them the whole thing makes no sense whatsoever unless somebody is bought off or has some -- i can't -- i don't know what to

think. >> somebody else said the other day if they are willing to and it didn't make sense it sounds like he is talking about his own skin if we take a risk, long-term risk, we should be -- >> totally >> how about this? would you prefer, do you like they are making it up? i would rather get rid of the carried interest and not do the buyback. you know where i stand with the buyb buyback. if that is the way the company wants the balance sheet to look a certain way. outstanding. issue more >> joe, you and i are in more agreement. i have a stronger view as you know on carried interest which i think is one of the most disgusting, gross, terrible loopholes. obvious glaring. it is just there for everybody to see and she has now shown her colors and who she is to decide. that's the one thing that has to come out of the bill

that's the thing >> i know. >> i don't understand it i sit here and just marvel at what's happening >> i love manchin and sinema now they are both dead to me sort of. kidding. i'm kidding a little bit to a lot of people, that is the way it was i don't know about joe manchin's future in west virginia at this point in a state where joe biden has a 17% approval people have to do what they got to do. >> what is she doing >> why do you think i asked you? i like when these guys come on and twist into pretzels explaining they raise money. they embrace every woke -- everything that needs to be done to get inn voivited to all of t

parties in manhattan when it comes to carried interest they are like whoa they already have billions. >> what does sinema -- what do they have so sinema? honestly >> if we could find a way for you. if we could do the airline bailout issue with the carried interest, you might explode. your entire head if we put those two things together those are your two -- right? >> i'm baffled this morning. >> how did we go ten minutes on this we can do that with our eyes closed >> give me three hours let's go >> right. >> we have lot to talk about we have jobs numbers we will talk about twitter i spent last night -- i know some people read books i spend how much time reading that 150-page twitter filing there is a lot to talk about today. this may sound like a friday in

the summer this is like a big friday. >> i've arrived. someone retweeted one of my videos where i was talking about this bill. you know a guy with 6 million followers has a show on fox at 9:00. you know what happened to my twitter feed after sean hannity retweeted my tweet a lot of people follow him that don't like him very much and now they don't like me >> oh, boy >> andrew r. sorkin. @andrewrsorkin. >> don't at me at me this morning coming up, wall street bankers are bracing for smaller bonuses and job cuts that's next. private equity keeps the tax benefit. we are counting down to the jobs report at 8:30 a.m. eastern time we will have predictions all morning. you are watching the one and

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devices in and out of the home. i mean, can i have a bite? only from xfinity. nah. unbeatable internet. made to do anything so you can do anything. welcome back to "squawk box" this morning wall street bankers are bracing for smaller bonuses and job cuts credit suisse weighing layoffs in the coming years and some

could see bonuses shrink by 50%. we have banking reporters with us what do we have in store lydia? >> it's a very different time in a very different conversation than six months ago. we are seeing the power shift away from the employees who previously were able to call the shots and demand perks and free car rides and free food and shifting to the employer as we see a lot of belt tig tightening across the board. some millennials and gen z saying they are not motivated anymore and threatening to quit. this is the first time they experienced a down turn on wall street many younger bankers only experienced good times with a

bonus would man bonanza. if they quit in the environment, they are not likely to get another job on wall street 5% or 10% across the board that recruiters say is coming down the pike they used to be able to get a job easily in tech now tech is laying people off. i think there is an element of shot among senior bankers seeing the whiney kids now kind of facing the music and getting religion it is a tough industry there is a deal breaker headline this morning that encapsulates the bonus this year is keeping your job >> the bonus this year hugh, this will play into the idea of get back into the office folks, right >> it is the case, andrew, that if you suspect the business equity capitalmarkets or ipo business you are looking at the volumes obviously since the last time we

spoke about the topic. what is the new news july data from sifma, the industry trade group, that all banks have to feed volumes into. it is a good snapshot. ipo business is down 95% year to date which looks awful if you drill down into the july figures, it is actually worse. they are down. it is among the slowest months during the pandemic. you had a business that has decelerated that is basically as slow as it has ever been you are looking at that. say you are part of the business and at morgan stanley or goldman sachs or one of the folks who fall out of the bulls. you are saying i haven't done anything i'm not doing anything there is no business to do what do i do i'll be in the office. my presence will be seen i'll be making, you know, myself seen at the office so people are reminded of my existence

you know, i think the issue is come labor day, people will come back from the hamptons early september and say what is the state of my business if it as slow as it is now, they have to come up with lists of people they can do without >> lydia, how much of this impacts the younger generation how much is actually going to hit people across the board at the top level? >> high performers are always rewarded on wall street. this will shift from everyone gets a piece of the pie now to the high performers going to be especially compensated a very much eat what you kill environment. i want to add to what hugh is saying you look at the first people laid off, again, hearing from recruiters, it will be at least 5% to 10% across the board they will target people in divisions that arenot bringing in revenue and people who aren't showing up literally or

figuratively one of the things we hear at jpmorgan chase especially is all an of the companies are paying billions for real estate jamie dimon is telling the division heads, if your people are not in desks five days a week, we will take those seats away from the division and reallocating them to other divisions. that is going to be a big piece of the conversation that now if you are not in your seat, it very well may be taken away from you. >> hugh, before we go, there is a sense that unemployment in the country is remarkably low. 3.6% by design, we are trying to slow the economy. the result is going to be situations like this the hope, of course, is enough need for new employees that actually people were laid off or things like that to take place, they would find and land in the right place themselves do you think that is not the case this goes to what lydia was saying at the top.

there may not be when the music stops, there may not be a chair for everybody. do you think there are other places they will go or is there a shutdown across wall street and tech that there is nowhere to go? >> right the playbook is i'll go to a fintech or hedge fund or go to the buy side i'll go to asset manager those are probably all places that are harder to get to. coinbase for instance. you have to distinguish between junior bankers in demand at a lot of places because they are not compensated that well. if you are a 45-year-old or partner at goldman and make $5 million or $10 million a year. your skill set to be useful as a cfo or treasurer somewhere head of business development really, are the places going to hire you and hire at the same c comp

all of your options no matter where you are on the spectrum will be diminished given where we are in the cycle. people sitting at the desks want to survive until they see the businesses coming back in the fourth quarter if there is a glimmer of hope in the fourth quarter or first quarter that businesses want to keep head count and be primed and ready when the business returns. >> lydia and hugh, thank you both for the news. i'm sorry for those people who are hearing this news and may be impacted we will talk more about it soon. joe, hold on to your chair >> lydia, thank you. you could have combined the tha thank hugh >> right new reaction from visa and maste

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pay for advertising on any sites like pornhub or mind geek sites. it suspended sites that contained user generated content in acceptance on the sites has not been reinstated. mastercard taking action within ten minutes of visa. mastercard saying the facts from the court ruling made us aware of advertising revenue outside of our view that appears to provide pornhub with indirect funding. this forces our decision on december 2020 to terminate the use of our products on that site this action following that ruling on friday by the district judge denying visa's motion to be removed from the site pressure and including on this program, from investor bill ackman who has been vocal on this topic

i think it is nice to see al kelly is doing what was the right anything this case i should say that al kelly's statement says they plan to defend the case vigorously they do not believe they are in the wrong. they are taking the additional steps now. all right. coming up, we talked about it a lot. what's today friday when was that? this week? >> one of the things that is interesting now that visa is accepting and mastercard is accepting that advertising supports something that may be illegal is a problem this gets to the question of how these financial services companies and what their responsibilities are when it comes to different merchants and what merchants do. this can run the gamut of different illegal activities and what policing they need to do on their own. >> this is egregious and we are talking about something that when you hear about it,

obviously. you want visa to police any place that sells a fake coach bag? >> i think there's questions about who you are doing business with, right? know your customer law in place. >> how many people do they have? they will not all 20 billion places what if the pizza place is owned by the mob i shouldn't say pizza. the chinese restaurant i'm not trying to stigmatize where it comes from. there is stuff everywhere that -- i don't know there's a whole underground economy, andrew, that visa and mastercard can't possibly police it there are laws against it. >> laws against it >> it should be illegal stuff. you suggested doing it for stuff that is not even illegal >> no, i'll give you the equal

there are stores in america, unfortunately, gun stores in america that are responsible and have been flagged and fined and in certain cases arrearrests. certain stores where illegal activity repeat ed events of illegal activity >> summed up in the slippery slope. you said you weren'ti going to o with the slippery slope. you weren't going to go the slippery slope where everything needs to be -- here we are don't slip down the slope on a friday don't. >> my question is what do you think the responsibility of the companies should be? that's all i'm asking. >> if you want to call the police on a place that is doing something, do it if we have any police left after one side gets done defending it. coming up, tesla and the odds of recession in the u.s

phil lebeau has the comments after yesterday's shareholder meeting. as we go to break, here are the s&p 500 winners and losers an . >> announcer: executive edge is sponsored by at&t business at&t 5g is fast, reliable and secure , i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic i labra-dore you round of a-paws at&t 5g is fast, reliable and secure for your business.

good morning welcome back to "squawk box" here on cnbc look at the futures. dow up 41 points s&p off about 1.5. nasdaq islooking to open down 20 points. we will get the jobs data later. meantime, i want to talk about this fallout from the house speaker pelosi's controversial visit to taiwan china announcing cancelling meetings with u.s. and china defense officials and suspending cooperation on anti-drug efforts and climate change china would impose sanctions on pelosi and her immediate family. we will try to get more details

as we get them it is coming over as we're speaking right now a lot going on there and the provocation appears to have been real >> it is bizarre it's live fire isn't it odd just firing off. it is not hitting anything, right? it's live fire i won't know how to run a country. it is obvious i wouldn't know how. they are firing a bunch of live stuff in the straits you can see it happening there's smoke. you are saying we may aim at you eventually is that the point? >> to provoke. i think the larger issue is there are real issues we have in the united states where we actually do have to cooperate with china whether we want to or not and whether it is on drugs

and for pharmaceutical issues >> basebketball. >> are issues we have to talk about. >> congressional has been going over for a long time get over it. nothing happened if they're going to do it -- >> their position is ridiculous and makes no sense to me that's not the issue i think the question is we talk about virtue signaling was this trip one big virtue signal >> to apiece dictators i'm on television every day asking ceos if they should do business in china. >> we will never stop doing business in china or saudi arabia we all need to relax

>> okay. which is it? >> i go all over the place. new comments from elon musk at the shareholder meeting yesterday. phil lebeau has more you have to be flexible, phil. >> you do have to be flexible. i'll leave you to discuss geopolitical situations. i want to focus on tesla if you were watching the meeting last night and a tesla investor, there was plenty to be optimistic about highlights from what elon musk talked about over 45 minutes after they got through with the business of tesla and what the annual meetings are about and they are planning to name a new factory site by the end of the year cyber truck production tooling in the next couple months production by the middle of next year total sales in ten years, think about it, elon musk says they will hit 100 million vehicles. that is what he says is

possible as for the economy here is what musk says about the possibility of recession. >> we will have a recession, i think it will be relatively mild recession. sort of -- i'm guessing here this is total speculation. i would guess it's, you know, wild recession for 18 months or something like that. it would be my best guess right now. >> take a look at shares of tesla. a couple of notes from the meeting. elon musk said he has no intentions of leaving tesla at this point in terms of tesla's succession plan down the road, he did not get into specifics here is what he had to say >> we do have a very talented team here. i think -- i think tesla would continue to do very well even if i was kidnapped by aillaliens or went back to my home planet,

maybe. >> that was just for you, joe. anytime you can bring alien discussion into the annual meeting, you have to love it look at shares of tesla versus the s&p. elon says share buyback is possible at some point he has to make sure shares are in the right spot. this would be significant they have one at some point in the future guys, back to you. >> okay. >> phil said do do >> ha! yeah go back to your geopolitical discussions. >> we solve a lot of problems. we talk about a lot of problems. we don't solve a lot of them we do try to present, you know, what people are talking about, i think. the world is and the days are

getting shorter. did you notice that, guys? what happened? we were heading into june 20th everything great days getting longer. i look outside and it's dark already. the world keeps on turning >> it's getting dark >> i hope it doesn't stop. coming up when we return, i'm telling you, a big news day. shares of warner bros. discovery. shares are plunging down little over 10% after the first combined earnings call a round-up of what we learned next. don't miss the interview with lyft cero john zimmer. squawk is coming right back.

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welcome back to "squawk box. warner bros. discovery with $3.42 billion loss since the $43 billion merger of the companies.

for more, let's bring in cynthia li littleton and tom rogers i want to thank you for joining us cynthia, you know, i listened to the call i think a lot of people listened to the call last night the stock now down 10% much of the news was to be expected, but the forecast and pulling that forecast back is what tripped up the market here. >> we learned a lot yesterday about the state of warner bros. discovery and the state of the macro pay tv environment both are really influx it was an epic earnings call you have to give it to them. they took a lot of investor questions. i think the biggest take away, of course, they changed the forecast the biggest take away was we

heard from david zazslav is the executives trying to transition businesses and we heard it loud and clear as david has a way of being plain spoken and they shifting back away from warner bros. and hbo like other outlets have taken 90-degree shifts in business models. it is meant foregone revenue and kept inventory on the shelf at a level television has never seen in the streaming era we heard david, there was virtue signaling going on there david was telling wall street what it wants to hear. we are not winning the spending wars he said we are going to go back. he indicated they will go back to business practices and

selection content overseas and bringing in the third-party checks they have been missing an a lot of those over the last two years or so as everybody made the pivot to streaming we heard that there's limitations to that and david now they really got under the hood of warner bros. and hbo, they were surprised by what they saw. it was very interesting and i think it was interesting that they didn't try to hide their criticism of the previous management and decisions that were made. it was a really interesting call >> tom, how do you assess or handicap the prospects of success when you look at the deal at this point i think a lot of people are raising questions ultimately about that you've known david for a long time we've known david on the program for a long time. he obviously has had remarkable success over the years often times taking a very bad

hand and playing it really well. >> well, he's got a very tough hand no doubt about it. conditions have really changed since david struck this deal the macro environment has changed. the streaming environment has changed. clearly what he thought at&t had done and what it turns out at&t had done sounded very different. and i think what the combined company now has going for it is quite a bit. it has david and not at&t. at&t probably never should have owned or managed this company. david has a track record that i think brings something special to the table yes, he's got a ton of debt, but it is fixed it is not going to explode on them in some way in the inflationary environment they have the biggest amount of

content budget of any traditional company next to disney they have a lot of content spend to deal with although he clearly sent the signals they are not planning to win the war. in stterms of streaming value, they have the broadest streaming bundle with discovery plus and hbo max together they will have top notch en entertainment and they will have reality programming of discovery. they will have sports. they will have news. you know, disney has not consolidated hulu and paramount has not consolidated showtime. they have a lot going for them i think people are under estimating and unleashing hbo. hbo has always been a hard service to subscribe to. you have to pay for $100 bundle to be able to get the pay service. it was a lot that was in front

of you to be able to do it to be able to directly get hbo and now broader hbo, not to mention the fact, it has more emmys. the quality as joe said the other day, surpassed everybody else in television they have a lot to work with their. on the bundle, which is obviously the cable/satellite bundle, which will face decline, do they have enough channels coupled with sports and news so leverage can increase affiliate fees at a faster pace than decline based on cord cutting. if they do that, they can hold on to the lineal cash flow to weave down the debt. >> cynthia, there has about an issue with shelving "bat girl" and the spending and the like. questions of the deals in the future

what is the feeling in hollywood? i ask because when he first, you know, when david first bought warner media, he spent a lot of time visiting with lots of people and trying to -- i think create goodwill. i wonder what the current feeling is now >> i think the honeymoon in hollywood ended on tuesday with the news they would shelf the movie "bat girl. yesterday on the call, they didn't try to hide it. they very much addressed it. they indicated the movie they just did not feel measured up to what they wanted to put out. even direct to streaming release. they where critical behind the economics. this was a big swing for a streaming movie. the creative community is very disturbed by this. this is seen as a black and

white issue to them. this is telling people that spent a year of their life making a movie and this is not good enough. we would take a tax break. this was not good. that is not good for warner bros. discovery. >> andrew, if i say, this andrei bet this wasn't a close call, this must have been one really terrible movie for them to make this decision. he may be getting a little pushback on this, but my guess was, this wasn't close at all. this must have been just god-awful. >> cynthia, tom, always good to get your perspective, especially when news hits like this have a great weekend coming up, retail stock trading on the rise again. a flurry of trading drove a little-known fintech stock up 21,000%, with its market value recent toppingha tt of coca-cola, costco and

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a frenzy of activity this week pushed one hong kong fintech stock to briefly become one of the ten most valuable companies in the world joining us now, j.j. kenehan i always point out that having a few shares change hands at a certain level, and then multiplying the outstanding shea shares by that level and pretending this company was ever worth that market cap, it's not. it gets out of hand where a few things change hand, but the market level was never relative of coca-cola but it is a representation of the fervor that happen ted that

day. not saying i'm go beiing to mis this, but it was a little dull before that. >> don't get caught up in the frenzy and it's actually okay in this realm. and that is if you're going into something, let's face it this was a lottery ticket. ly a i had a yjoke that there we two lottery tickets this week, one like the one in my home state of illinois. what people really have to do is keep it in the right perspective if they're going to go in and play these you know, is it fun, maybe yes. is it really healthy probably not overall, but, again, i just think that people need to realize when they're

going in, you're taking a little bit of a gamble. and i think, you know, sometimes people have this mind set where they're like, whatever i do, if it's in the market, it must be investing. this is not actually investing this is taking a shot. there's a big difference in your mental approach and hopefully a big difference in the amount of money you're going to outpiece with some of this. >> we did see a lot of this dry up do you think it's coming back? do we want to get back to the mien stock, nft frenzy, for lack after better word, that we saw a year and a half ago? that's not good for the markets either we want a comfortable middle between the two extremes >> you know what i want, joe people to have interest in the market overall as people allocate capital in

the right way. what we did see over the last couple years is people taking an interest, many of them for he very first time in their investments overall. that's healthy, that's good, particularly younger people. if this is the type of activity to bring younger people to the market so they can participate in their 401(k)s, that does i guess, ends justify the means, maybe. but things like this that get people interested, i'm 100% behind it, if it brings people to the market but in a realistic point of view. we'd all like to see these types of returns that we were invested in, but let's face it. it just doesn't happen and people need to get educated in how the market actually works so you can make some wealth over the long term as well as occasionally have these types of activities happen in the market overall. when these things do happen, we

do start to get a little more participation. >> thanks, j.j talk about the knicks next time. coming up, we are just about 90 mutines away from the july jobs report. we will bring you predictions receipt after the break. and start crunching a year's worth of transactions ceipt after the break.ageipt af. now you're making smarter decisions faster. operating costs are lower. and everyone from your auditors to your bankers feels like a million bucks. let's create smarter ways of putting your data to work. ibm. let's create

good morning it is jobs friday, and futures are a little changed ahead of today's big number we have an exclusive interview with one of the biggest fund managers on wall street about what investors hud hud should be

doing with their money we're going to brakeeak down the quarter, plus democrats securing a breakthrough with senator kyrsten sinema with the inflation reduction act. as the second hour of "squawk box" begins right now. good morning wel welcome back to "squawk box. u.s. equity future this is hour are marginally higher after what has been a pretty solid week we've had our ups and downs a

little bit but in keeping with the very solid july action that we saw, and it's been, was a backdrop of treasuries, the ten-year sort of moderating it was 2699 when i checked earlier. oil's come down below 90 on wti, yeah, 88, 88.37. and we haven't had a lot of action you'd think we've had more with so background of the news on crypto, but crypto has stayed above 23,000 did you see michael saylor >> yes, i did. what do you make of that >> i don't know what it says >> and when you do it with permanent capital, the losses can also be permanent.

it's not like you have a fund where you can put some money to work all they basically have is the cash flow from the micro strategy software business to keep investing into bitcoin. you'd want to dollar average down at this point, i would think, but i don't think anyone's telling them, take your money and put it into bitcoin at this point >> you remember when tom lee said it was going back to 20,000 we laughed at that it at one po. a lot of people were in early. at 23, how can you completely lose your ass? where did you get in >> he started getting in i believe, they started making their investments under 10,000 or in the 10,000 range >> but then they got a lot more. dollar cost averaging up >> yep you prefer to do it on the down. meantime, let's talk about this story, i'm still shaking my head, joe. arizona senator kyrsten sinema

announcing late last night she will vote in favor of the inflation reduction act. good morning >> good morning, andrew. you're right, arizona senator kyrsten sinema is throwing her support behind the new tax and spending plan with key changes in mind. he convinced democrats to drop carry some of the bill and the 1% tax on stock buyback. sinema plans to keep working on reforms with mark warner, a former venture canpitalist himself. the deal would allow some companies to carve out accelerated depreciation from

that new 15% corporate minimum tax. in a tweet jay timmons remains concerned. he's glad that accelerated depreciation was removed but remains skeptical of the final text the president has urged the senate to pass this bill as soon as possible. lawmakers will reconvene saturday to begin vote egg on t the bill final passage if it happens is not expected until monday. >> you probably heard the conversation we had in the 6:00 hour, about here's kyrsten sinema i don't think the constituency base in arizona is huge in the equity land, not nearly the way for example somebody in new york might, where you have someone like senator schumer who effectively has made the decision to throw his own

constituents own, because he thinks and knows that there is a loophole here that is just wide open, and everybody knows it so what do you think is driving her decision around carried interest, this new news that she's going to be talking to warner about dealing with carried interest what's happening here? >> yeah, so it's really unclear why this is such a priority, why carried interest is such a priority for sinema, something she's talked about for a long time there's not a lot of hedge fund managers that live in arizona. but one of the frustrations among democrats is that her position sort of across the economic policy spectrum has not always been completely consistent she was the one who didn't want to see the corporate tax rate increase for example but she does seem to be on board with this new stock buyback tax. so that's one thing democrats have been wary of and one thing that has made these negotiations so difficult

one thing di do think is important, though, is that democrats have had many different policy proposals that they can piece together in order to try to make this deal work. we've talked over and over again about all of the sort of spaghetti they've thrown against the wall with the millionaire's tax, the wealth tax, the stock buyback tax they've tried to get passed in various forms through the year this comes to fruition they're able to remove the carried interest piece and throw something in there and hopefully for democrats get a deal so i think having all those different puzzle pieces in the mix is going to help them get this across. >> there are first theorists out there. there's view among some that actually, sinema is quote-unquote, taking one for the team, that somehow actually schumer and others really actually want to keep carried interest going and that somehow that she's somehow going to put it on herself to benefit somehow

all of them. is that even possible? or is that crazy >> i mean, i think that what we've seen from sinema is that she marches to her own drum. i don't know that she's been, i have no reporting to suggest that she has been pressured to take one for the team, as you said schumer has been very clear that they put carried interest in because it was something that is that right manchin wanted. that was something that allowed them to seal the deal with manchin initially. i do have some reporting that suggests that democrats were able to sort of run the numbers on the stock buyback tax, decide that it was not going to be inflationary, manchin was okay with that. sinema has been an iconoclast throughout this process. i would be surprised if this was some secret effort for her to keep this going for democrats all along. >> ylan mui from washington.

we all think this bill has been misnamed nonetheless, joe >> i like, it's cynical of you, andrew, i've seen that stuff, too, but it's really tasty that a wink and a nod from chuck. you know no one's going to eaccuse you o it because you don't have any constituents >> i don't buy it, but i know there are people who seem to think these thing, but, you know >> can you take politics below, can you actually think less of it than it actually is i don't think it's possible to think worse of what actually goes on. so the lowest common dee nom naeter is somewhere that you always need to go to get to the truth. >> i know, but i don't know what the truth is, and you're getting into like alex jones world >> no.

god, not that. you about i don't put anything past them. that's all i'm saying. on either side it's jobs friday, we're less than 90 minutes away from the number of the month. steve liesman joins us after a sleepless night that happens on the first thursday of every month. >> yeah, always on the edge of my seat and the edge of my bed all night, on this jobs report wall street expecting slower payroll growth, we have a series of headwinds and tail winds hitting this jobs market st sharp increases in inflation here are the number wes we're looking for 258,000 the unemployment rate remains

unchanged. average hourly earnings up a modest .3% pandemic is unwinding some hiring that's out there that industries overhired you industrial a pandemic rebound going on a host of industries remain below this march 2020 or pre-pandemic levels. nursing care off by a quarter million, local education still down by 300,000. leisure and hospitality off by 1.3 million. a lot of hiring. some industries surged during the pandemic like internet retailing or trucking. they could have too many workers. the overall payroll level remains below the pre-pandemic level even while economic activity exceed it is. we could see hiring strength

almost despite what happens in the economy as employers struggle to get back to where they were. and hang on to the workers that it took them so long to hire >> steve, want to thank you for that we will keep our eyes on the prize at 8:30. when we come back, the white house declaring the monkeypox outbreak a public health emergency. we're going to speak to dr. scott gottlieb about that. before we head to break, a quick check of the markets, dow up about 13 points, s&p off about 5 points we're coming right back. you're watching cnbc

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so boost your bottom line by switching today. comcast business. powering possibilities. biden administration has declared the monkeypox outbreak a national health emergency, sounding the alarm over the growing number of cases across the u.s. joining us now, dr. scott gottlieb, former fda commissioner and cnbc contributor. he serves on the board of pfizer and illumina it sounds bad, it is bad, but do we need to temper our pessimism because we've just been through something that obviously, with covid, was that a whole different situation? that we saw than what we're seeing now we need to be aware of this, but i don't think we're going to shut down schools anytime soon,

are we >> that's certainly true this represents a whole different level of risk. this is more akin to what we faced with zika where you have the potential for a slow-moving infection that becomes endemic, a fact of life, and you get a new infection that you have to worry about, but it's a low-level infection. this is not a raging epidemic like covid, this starts to get a foothold in the united states if it hasn't already. it's spreading right now as sexually-transmitted disease, but it's not a sexually-transmitted disease, so it's going to spread outside those networks and going forward, when doctors see patients presenting with unusual cases of what they presume to be shingles or her piece, they're now going to have to test for monkeypox as well. it isn't going to spread rapidly and widely it didn't need to be that way if we had acted aggressively early.

we could have potentially snuffed this out >> so a pathogen that there's been no, the mortality is what, zero or is it -- what is it >> yeah, look, in west africa where this has predominantly pred spread previously, the mortality was 3% to 4% right now we haven't seen any deaths we have seen hospitalizations as a consequence of people getting sick with the virus but we haven't seen any deaths. hopefully it remains that way. but this is still a pathogen that an immunocompromised individual and a young child, in a pregnant woman, can be dangerous. so this represents a certain amount of risk it's certainly not on the order of what we see from other viruses and certainly not similar to its close cousin, smallpox, but it's still risky

to people who are vulnerable to it >> well, close cousin of smallpox, sort of leads me to the next question. and the chances that some type of evolution of this thing into either something more infectious or more virulent is there enough spread right now to where there's an incubation of enough of these that, enough virus where that could actually happen >> yeah, look, we've seen it already evolve like i said, it has evolved in a direction of becoming less virulent than what was in west africa it's a dna virus, so it's more stable certainly than the viruses like covid or influenza, but it does have the capability to evolve in certain directions. right now it has evolved to being less serious it could evolve backward to being a more serious infection so far the cases we've seen, a lot of them, have been milder.

and that's why it's difficult to diagnose these, because people aren't presenting with the s disseminated rash. i know a number of physicians who diagnosed people with shingles who didn't have any risk factors for monkeypox they didn't resolve with conventional treatment for soster, and then they represented, got tested and had monkeypox. i think that's partly why we've seen cases go up rapidly, because a lot of those were backlog, couldn't get tested, or people who are getting tested because doctors are starting to suspect that infection i think the growth rate will tar start to slow in the u.s >> i want to shift to president biden's rebound case after

taking paxlovid. you've always said it's a very small and tiny number of folks it's more anecdotal than rear, andreal, and here we have the president sufficient suffering the same fate. some doctors have said you need to take a longer course. >> i've never said it's more anecdotal than real, there are some that seem to rebound more quickly. also people who are untreated as well it appears to be about 5%. asheesh jah also confirmed that, based on the rear view evidence of pfizer and regulators and other public health officials. it could be a little higher than that it could be lower. if it's extremely high, i don't

think the data supports that in terms of whether there should be a longer course of therapy, that's certainly something being looked at now, whether certain individuals should have a longer course of therapy, whether or not vaccinated individuals, i do brief believe that a lot of people being started on paxlovid right now are people who are diagnosed very early and before they start to mount their own immune reaction their bodies really haven't started to produce anti-bodies that's not how the drug was studied. the drug was studied with people who had a response if are you going to start the drug must earlier in the course of the virus, you are going to have have that decision made by the regulators based on data

submitted from the manufacturer. >> do we know if the president took a longer course than the traditional standard course? >> look, they've been pretty candid about how they've been addressing his illness they say he took a five-day course i have no reason to believe that's not the case. i think the white house has been unusually trance psparent in how they've addressed his case >> you think it was just a single five-day course >> once he re-manifested the illness, since he wasn't very symptomatic, they didn't start him on the second course that's my understanding of what they said. i think they've been very clear about how they've approached it. i believe what's coming out of the white house. >> doctor, we've got to run. there the other question, the people that have rebounded, are they contagious or not he was staying away from others out of abundance of caution, but

there does seem to be a debate about that what do you think? >> i think if you're testing positive on an antigen test, you're contagious, maybe less contagious than you probably would have been, because you have some inate response >> when we come back, shares of warner bros. discovery, they are sharply down lower and revenue expectations were missed we're going to speckak to rich greenfield and what ceo david zaslav said about the future of streaming. we are going to get the jobs report at 8:30 nasdaq off 25 point. all of it may change, though, in

the next hour. back after this. time now for today's aflac trivia question. in 1981, amc was the first theater chain to offer what amenity to its venues? the answer when cnbc's "squawk box" continues the aflac pre-pain show. aflac! paul is about to suffer a shelf-inflicted injury. luckily, aflac will help cover his unexpected medical bills. aflac! maybe you could use the money to buy a step stool. i have a step stool. so why are you climbing a shelf? the stool's on top of the shelf, isn't it paul... (shelf crashing) yeah... ♪ ♪ aflac!

. now the answer to today's aflac trivia question. in 1981, amc was the first theater chain to offer what amenities to its venues? the answer, chairs with cup holders. fallout this morning from house speaker pelosi's controversial visit to taiwan. china announcing counter measures, including canceling meetings between u.s. and chinese officials and canceling cooperation on fentanyl, and climate and illegal immigration. so i don't know how much that changes anything china also said it would impose sanctions on speaker pelosi and

her immediate family we will have a live report from beijing in the next hour what the hell does that mean, andrew paul pelosi can't visit beijing? he's probably not headed over there anyway he's got his own issues. >> i don't flowknow what it meas hard to know what any of it means. clearly there is a relationship issue, but we are going to have to cooperate on some thing >> you know what i'm saying, the fentanyl thing we've asked them. they're fentanyl kings over there in parts of china. they've done nothing for that. >> and some of the other stuff, we have to maintain some kind of relationship >> are they aiding us with climate change they're laughing at us of the as we go green they're building -- i don't know >> more to come on that, and more to come on jobs, that jobs number coming up at 8:30 in the meantime we have an exclusive interview that you do

not want to miss with howard marks coming up next plus, lyft president john zimmer on the travel ma adendnd much more stay tuned, you're watching squawk on cnbc ♪ ♪

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welcome back to "squawk box. anc n amc networks missing expectations joe? >> warner bros., discovery, reported a $3.42 billion loss for the second quarter of a the market closed on thursday. the debut report for the media conglomerate since the $43 billion merger, ceo david zaslav announcing on the company's earnings call that they're exploring the free ad-supported service. let's welcome rich greenfield. thank thanks for joining us.

is your view on streaming, how has it evolved over the last six months? we're all sort of nodding when we hear what zaslav might do we all knew this was coming, but the world changes quickly as far as technology. >> i think in this case, a little bit of this is sort of like that movie "apollo 13." houston, we have a problem and if you're zaslav, you're looking at at&t and you yare lie oh, my god, i can't believe i bought in these conditions warner bros. discovery is blaming the at&t projections as unreliable, not to mention the overall macro economic environment. so what they're effectively doing, joe, is scrambling to figure out, cash flow has come in well below expectations, they've got a lot of debt. they're trying to find a way to generate dollars, maybe like a

pluto or tubi tv, they're looking at a licensing deal with amazon and going back into amazon channels, that's something we talked about why they left nine months ago. they're just looking at how do they find dollars any way possible right now because they're coming in with a $2 billion shortfall in 2023 ebita, versus what they thought back in february so i think that's driving a lot of the changes that you heard about last night >> so what should i worry more about, if i was let's say a media executive or shareholder in a media company should i worry more about cord cutting or the bottomless pit that is streaming to try to make money? >> joe, that's actually a great question they sort of go hand in glove. you think about the challenges right now.

the big mac roelw element, the amount of money that gets paid from cable operators, you've seen a steady increase in those overall revenues from subscribers whether it's satellite, cable, youtube tv, that's driven growth you're seeing those subscription revenues to all of these cable networks start to decline. you saw it at paramount yesterday, warner bros. discovery. so you're seeing the cash cow, the reliable cash cow starting to get squeezed in sort of intersecular decline you're looking at the weakness in stock prices, wdb down double digits you're seeing real fear about this cable network business entering secular decline, but on top of that, you've been investing aggressively in streaming and you're not making money. your core cash cow is in decline and you're losing bills of dollars in streaming, and that's

the huge challenge all of these companies are facing right now and i think the question that wall street's going to start asking is can the level of investment be sustained. and i think what you heard from warner bros. discovery is we're taking a step back on hbo max. it's no longer going to be the complete focus of the company. and we're going to do more like paramount does and moving decisively away from the disney-netflix-amazon-apple strategy >> did it hasten the realization that not everyone is going to get that bill every month for every single streaming service you almost had to go to an advertising-base model >> in some ways, this is all bob iger's fault, and i mean that in the nicest way of

when you look at disney, they made it look easy. 100 million subs after a year, and everyone started chasing streaming. a lot of these companies probably never should have been in streaming, that shouldn't have been their complete focus of the company but when disney stock went up in the pandemic even despite a collapse of earnings, everyone started following on the streaming bandwagon. now the question is, oh, my god, our core business is not so good anymore, and we're plowing billions, and we don't really have a path to make money, and i think everyone's starting to reevaluate their strategy, and i think you're going to see some companies start too sca scale b ambitions. they're not launching as many markets. i don't think i've ever seen a new management team come into an asset and completely change the strategy that's what you heard last night at warner bros. discovery. this is a true 180 from what was happening under jason kylar.

>> i think we got an idea, that decision that zaslav made so quickly, but he got a good look at the future, the ghost of future past or whatever the hell it is. he got a look at it, and it was now, and pulling that plug after all that money and just, that was, what's chris wallace doing right now? has he got some really good, i mean, that telegraphed what zaslav was going to do and i think it's kind of amazing, and i guess i commend him on, on cutting his losses, but it was jarring to the whole industry i think that was the watershed event. >> the funny thing is, the company that's crushing it right now is sony. they're making money hand over fist, because they're only an arms dealer. they're not trying to be netflix. they're not trying to be hulu

and disney plus. they're literally just a licenser to this streaming landscape and it has proven incredibly valuable to be an arms dealer, to only be a content arms dealer. you've seen companies like wwe go from having a direct consumer service, and you look at how they've shifted now. now their content's on peacock you've seen companies make pretty dramatic changes. and i think you're going to see a lot more of that and joe, to your point, i think the challenging economic environment overlayed with the maturity of the businesses might overshadow things that might have happened eventually but will happen over the next 12 months because the economic environment is so painful right now. >> what's old becomes new. so the future looks like me watching tv, having time at a

commercial break to go to the bathroom or go get a soda or snacks or something, get back in time we're back to where we were. it's going to be advertiser-based we're never going to get rid of advertising completely it's back to the future, rich. >> the only thing i'd sty that on say to that, the winner, netflix and youtube represent over 50% of tv time spent and you look at the com score numbers, those are the two services that are dominating, one being premium content and the other being user-generated content. that's sort of the problem right now. it's not just you watching traditional television like you just mentioned there are new entrants like youtube taking big chunks of time tiktok tv, that is coming.

they're coming hard, and it's going to take share from everybody. >> we'll see not from me. all right. >> we'll revisit that quote in a year >> i'm not going to be on there. i'm still not on facebook. not gone na do it, not gonna do it come together. coming up, you neamay not bo tiktok, joe, but you got to make sure the audience is on you. coming up, an exclusive interview with oak tree capital co-chair, howard marks is going to be our special guest. "squawk box" coming right back after this

tesla holding its annual shareholder meeting last night let's get to phil lebeau with the highlights >> plenty of interesting news nuggets from elon musk last night. nothing earth-shattering that we hadn't expected to hear about the company. but some updates about what the product portfolio looks like

let's start with the model y, which has been a huge seller for the company as its sales continue to grow rapidly worldwide. musk says he expect it is to be the number one vehicle in world sales next year, and within ten year, the company will be over 100 million in total sales as for the cyber truck, they are putting in the tooling in the next several months. the production will start mid next year. in terms of the economy overall, he also believes the u.s. is headed toward a mild recession here's musk talking about inflation right now. >> most of our commodities, most ever the things that go into a tesla -- not all but more than half -- the prices are trending down in six months, six months from now this could change, obviously, but the trend is down, which suggests that we are past peak inflation. >> he also talked about twitter. yes, he did bring up twitter,

and as you take a look at shares of tesla versus twitter, elon musk says he understands the twitter product and that he understands what twitter needs in order to make it bert here's musk's comments regarding twitter from last night. >> i think in the case of twitter, since i use it a lot, shoot myself in the foot a lot but, you know, i think it's, i do understand the product quite well, so i think i've got a good sense of where, where to point the engineering team at twitter to make it radically better. >> one other note from the meeting last night, guys, three for one stock split was approved and a share buy 3 back is likeli the future >> in the history of the world,

has anyone ever said no, don't split my stock you know >> no. >> we still vote on that sorkin >> i don't, i don't have, i don't have somebody saying no to that >> i don't know that it's ever happened yeah, get rid of my carried interest has anyone ever said that? >> probably not. >> speaking of which >> we'll talk to howard marks about that in just a moment. when we come back on the other side of this, we don't have an opportunity to talk to him enough howard marks, oak tree capital co-founder, that interview coming up right after this and later, lyft shares getting a lift, co-founder john zimmer will be with us to talk about rising riders, drivers and rides, and check out shares of draft kings. they're higher this morning after a narrower than expected revee. ua cesig back.

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at xfinity, we're constantly innovating. and we're working 24/7 to connect you to more of what you love. we're bringing you the nation's largest gig speed network. available to more homes than anyone else. and with xfi complete, get 10x faster upload speeds. tech upgrades for your changing wifi needs. and advanced security at home and on the go to block millions of threats. only from us... xfinity. welcome back to "squawk box. our next guest stresses the importance of standing apart from the investing crowd, and joining us right now in an exclusive interview to discuss his latest memo, it's titled "i beg to differ" is howard marks co-chairman at oak tree. we're trying to make sense of

what has been a crazy market which seems to and very difficult economy to project where we're headed you've always had a contrarian view about everything. what are you thinking about right now in terms of where we actually are >> well, my main contrariran vie is unlike so many others, i don't know where we're going it's hard to know what the economy's going to do, what the fed will do, what recession that will bring on. and, you know, when there's nothing clever to do, just don't try to be clever i think we're in normal territory in terms of risk and opportunities. and oak tree is operating in its normal fashion neither exceedingly aggressive or exceedingly defensive >> so when you say you don't know what to do, what are you supposed to do when you don't know what to do? >> i think you do what you

normally do, which is you buy things that appear attractive in terms of a return that more than compensates for the risk that's what we always do, and sometimes we get much more aggressive, and sometimes we get much more defensive. and this is neither of those times. >> one of your more contrarian views has been to get bullish at least individually on certain stocks in china, given how unloved that part of the world has been what do you make of what's happ happening right now between china and taiwan we were talking about this news just in the last 24 hours around nancy pelosi's trip. there are obviously so many stocks on lists to get delisted. do they still look like good deals to you now >> well, we operate in china mainly through the credit markets, so i don't have opinions on individual stocks, but, you know, i made my career based on things other people

wouldn't do. today china is described as uninvestable 45 years ago, high-yield bonds were described as uninvestable i think the bargains at any moment are best found on the uninvestable pile. although that's different, andrew, from saying that everything on that pile is what you should buy but i think that a great place to look for bargains is on the pile of things other people won't touch, because they by definition, their prices embody no optimism. >> i'm thinking right now, spacs, a completely unloved category would you start to look through that pile? >> if i were a stock investor, i probably would, yes. >> one of the other big topics that we've been focussed on just again in the last 24 hour, big

headline, kyrsten sinema as you probably saw, seems to be pushing ahead with the inflation reduction act, but as part of that, removing this provision which would have closed what a lot of people describe as a loophole around carried interest what do you think of that? >> i think that carried interest, for the benefit of the audience, means paying long-term capital gains rate taxes on the profits that money managers enjoy from operating funds my personal belief is that carried interest, that capital gains is what you get when you invest your money and make a profit over the long term. i don't think it's, it's what you get when you invest other people's money over the long term, so i'm not one who bangs

the table that the money we make for making profits for our investors is a capital gain. >> and what do many of your peers say about that >> many of our peers want to protect the tax advantage aspect of carried interest. and so they have no trouble defining what they do as long-term capital gain >> howard, we're going to get the jobs report number in a little over a half hour from now. and there's really a sense that, you know, we could be headed into a recession, maybe from a technical perspective we are, but maybe we really aren't, because you look at where we are in the employment or unemployment picture, and unemployment is so low in this country, what do you think about that >> andrew, i don't think much of what's in a name as shakespeare would say today is the same, whether you

call it a recession or you call it not a recession all i know is, it's not bad. it's not great and it's not bad and it's a decent business climate. that's the important thing for our companies. the outlook for our companies is the same today, if they call it a recession or if they don't call it a recession. and, you know, i always was brought up to think that two negative quarters of gdp growth in a row is a recession. today i'm told it's not a recession, that it's a pervasive weakness in the business climate. i'm okay with that but, you know, all i know is that it is a decent, but not fabulous climate for business. >> howard, i don't -- >> sorry >> in this case, i don't beg to differ with you. that is the name of your memo. we're up against a hard break. i want to thank you for joining us i want to encourage the audience to read howard's memo and frankly to read all of howard's memos, plural, because there is

so much wisdom in all of them. howard we appreciate you being with us. thank you. >> thank you, andrew, thank you. >> coming up, the jobs report out just over a half ahour away. we w we'll bring you the information as soon as it drop "squawk box" is coming back. s. "squawk box" is coming back. hou. we'll bring you the information as soon as it drops. "squawk box" is coming back.

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good morning it's jobs friday, and we are in the homestretch. 30 minutes to the data now fed officials and investors watching this one alike. very closely and china responds to this week's visit to taiwan from nancy pelosi and warner bros., discovery tanking, but lyft getting lifted and we'll speak with the president of the ride hailing giant as the final hour of "squawk box" begins right now.

p good morning and welcome to "squawk box" right here on cnbc. i'm andrew ross sorkin along with joe kernen. becky is off today it is jobs friday. we'll show you equities ahead of that right now we're looking at green across the screen. this wasn't the case before. dow up about 70.s, nasdaq up, we'll call that about a point. take a look at treasury yields you're looking at the ten-year note at 2.697, joe and elon musk is predicting that we've passed the inflation peak saying prices on many of the components that go into teslas are trending down mr. musk made the comments at tesla's shareholder meeting last night where investors also cleared the way for a three-for-one stock split. on the broader economy, elon musk says he foresees a slow

down >> we will have a recession. i think it will and relatively mild recession sort of -- i'm just guessing here this is total speculation. but i would guess it's a, you know, mild recession for 18 months or something like that. would be my best guess right now. >> musk also gave an update on tesla's gigafactories, saying there was more work to be done in berlin and austin, texas. he said event i ually he wants build up to a dozen of the giant-sized tesla plants andrew meanwhile we want to get to the broader markets. cnbc's senior markets commentator, mike santoli joins us from the new york stock exchange good morning >> yeah, the stock market's kind of pulled itself in sort of a neutral spot or maybe a pivot point as it often does ahead of

a big widely expected number almost flat yesterday. here's s&p 500 year-to-date. it's it's just below those early june highs. about half a percent from that early june high. a lot of folks also looking at a possible red or green signal that might come if we go a little bit higher, t2% higher. that would recoup all the losses from the january low usually a decent sign that you can respect that market low. but we're not there yet. clearly going to be waiting for the jobs number, perhaps if it's too hot maybe it means financial conditions tightening again. if it's really weak you have recession fears. you want somewhere around the consensus. take a look at what's happened since stock market low in mid june you have the s&p 500 with this nice gain. it's up about 14% from the interday lows, maybe 13%

then you have ten-year note and crude oil declining precipitously. what got us down to the lows what was spooking the market was that the fed was on this hawkish spiral, feeling like inflation was going to be a problem for a while. you've seen that ease up a little bit that explains where we are, even though the fed keeps talking about how they need to remain vigilant out there one little bit of a sour note is the way the banks have traded relative to the overall market naturally, the compression in yields is a pressure point and that the customer has some fatigue. oil coming off has supported things, apple really taking flight, andrew >> we were talking streaming all morning, we had rich greenfield on the program warner bros. discovery down 11% right now. how much do you think that's

going to impact the rest of that space today in. >> you know, it seems like it's getting walled off they've been a weak point for a while right now. what's interesting or maybe amenabl amenable depending on how you look at it, if you look at the communications sector it's basically meta and alphabet and a lot of tag-in companies in terms of the overall market. that's why it doesn't seem to be a bigger issue, but certainly the idea of potential accelerated decline or secular decline, combined with what looked like really cheap stocks. i have to say optically, if you look at the earnings, all of them look relatively expensive it creates a back-and-forth debate we got some other news just crossing the wires to tell you b amazon is acquiring i-robot for

$61 a share in cash. 21% premium over yesterday colin angle will continue to run the company. i-robot has halted at the moment and we're showing the move when it resumes trading are you in the irobot business, joe? >> no, small company checking it out. i don't know, and it definitely is halted. >> a roomba. you know what a roomba is, right? >> yeah, i've seen it. >> vacuum cleaner, robotic vacuum cleaner it goes around your house. >> some people enjoy vacuum cleaning, andrew >> are you suggesting you're one of them? >> i know people who enjoy it. >> you know what i do enjoy? when the carpet goes back. you know when you can move the carpet each way and see the lines? like on a baseball field >> it's all part of it

i have two german shepherds. it's very satisfying, although you need an industrial-strength vacuum cleaner, i'm not kidding. you really do. the carpet's almost a different -- can be -- if it's not maintained getting to eunice now. china responding to house speak e speaker pelosi's visit to taiwan with punitive measures stomping their feet. >> those punitive measures are being directed at the united states now so just moments ago china announced that it's cutting off talks with the u.s. in various areas. so these are high-level phone calls in the military, exchanges in defense and maritime affairs, cross-board crime, drug trafficking and even discussions on climate change. speaker pelosi herself is being

shut out by the chinese. the foreign ministry said that she and her immediate family are going to be sanctioned, although no specifics on what that actually means taiwan and its companies continue to face the fallout of pelosi's visit the chinese state media say the have sent in over 100 war planes and 200 ships to the area and they had fired off multiple missiles the japanese have said that some of those missiles actually flew over the main island of taiwan and landed in japanese waters. both of those are firsts, and both were condemned by the japanese prime minister. now taiwan companies also continue to face trouble here on the mainland in fact, apple reportedly is urging its suppliers here to make sure that they look over any labelling that could suggest that taiwan is not part of china. and this is because the taiwan media are reporting that some of

these components makers have been hassled by chinese customs over these shipment labels tagatron made a statement that its shipments and productions are business as usual, guys? >> thanks, eunice. how does this finally end? in your view do you think time heals all wounds or >> well, i sure hope so. and i was thinking that if i want to think positively, that, you know, these military exercises have been timed after pelosi's visit so on thursday and i'm also, a lot of the trouble that's created for businesses at this point are directed at taiwan companies or at least, but kind of not in big areas, so no big chip makers or nothing like that. an area that's not really going to be, you know, so detrimental

to taiwan's economy. also until today we hadn't seen any punitive measures directed at the u.s., but these are just discussions right now, so not any major moves at this point. so some of that might still be symbolic so those are kind of like the optimistic spin. and then you have to think about president xi's dealing with an economy that's slowing down. doesn't necessarily need the headache of having, oh, yeah, on top of this slowing economy and people kind of pushing back on zero covid, let's throw a u.s.-china war in the mix. >> right >> and he has this, for himself he has to face this political reshuffle for the end of the year so a lot of question marks already. maybe he doesn't want to throw in another one that's me putting a positive spin on it hoping that i'm going to be right. >> we wonder whether it does distract, if he has the populace on his side in a nationalist, nationalistic way, maybe he uses

it to his advantage for as long as it continues to work for him with all the other, the covid problems, real estate, the economy being slower than people think. all right, eunice, thank you a lot of things to think about in terms of what's really going on shares of warner bros. discovery, we just talked about it, plummeting after the company reported its first full set of results after the merger, and julia joins us now good morning >> good morning to you, joe. david zaslav warning about, quote, additional, unexpected challenges that have and will continue to require our focus and attention. also saying they are adjusting down their guidance accordingly. now with the company's streaming division losing $1.5 billion in the quarter, warner bros. discovery saying that 2022 will be what they call a transition year announcing that the combined

company, the combined streamer, discovery plus and hbo max will start to roll out next summer in the u.s. and that in addition to having an add ad free version they're saying they ended with 92.1 million subscriber, and they say that's up 1.7 million from the prior quarter and that they say that they do expect to hit 130 million global streaming subs by 2025 with the streaming business expected to break even by 2024 and to generate a billion dollars in ebita the following year zaslav talked about the challenges of the macro environment and how he's going to be focussed on profitability. they've already cut a billion dollars in costs and are looking to cut at least another two

billion. he talked about the power of the combined company's brand he referenced the high-profile decision to shelf the $90 million "bat girl" movie saying they've taken aggressive steps to cost correct. so andrew, quite a cautious tone there from zaslav. >> fascinating julia boorstin on the west coast this morning, thank you. when we come back, a lot more on squawk ahead the data and analysis at the bottom of the hour, but next, lyft president john zimmer will join us after his company reported record earnings for the second quarter

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congratulations on the news. there's a lot of folks waiting for this moment e. >> yeah, it feels great to have a strong quarter the team did phenomenal as you mentioned. in the preview, we hit our adjusted ebita and all around made some tough decisions that have paid off. >> can we talk about those tough decisions? because i think what's happened over the last 12 months has been a transformation in the market place and how you and your spet t competitors have had to talk about growth and pull some of that profit forward, but how much you do that at the expense of growth. >> yeah, no. i think this quarter we made some really smart decisions overall and didn't have a huge tradeoff in growth here. so, you know, rides are at an all-time covid high. riders added 2 million and our all-time covid high. so overall feel great about the

decisions we made. what dwe did do is slowed hiring dramatically >> how concerned are you about pricing going into the fall on the strength of the consumer >> if you normalize for the gas surcharge which we added for drivers, 55 creents, prices actually came down we're able to have less of the dynamic pricing, what we call prime time, and so we're actually seeing improvements on pricing and service levels >> and in terms, of though, the strength of the consumer, are you seeing any shifts in terms of those of us who consider ourselves cheapskates for example who are arbitraging taking a yellow cab in a place like new york relative to

jumping in a lyft. >> we're coming off such a low from the pandemic and seeing increased demand, it's hard to say. could it be faster probably and we would love that but we are seeing good, strong demand come back and the return of drivers to the platform in better and better numbers is making the service levels and pricing much more reasonable >> in terms of actually getting more drivers on the service, how much of it is bringing former drivers onto the service versus new drivers onto the service >> it's both and we're seeing numbers tick up the last quarter the majority of our drivers came in organically, meaning not from promotional or marketing activities we're we're seeing our driver engagement spend come down >> how important is the auto industry to you and the cost of actually getting a car

a new car or a used car? >> it matters. we have a service for drivers called express drive we bring vehicles to them. obviously, there have been shortages of vehicles. is one thing that impacts us but overall costs within the auto industry impact us probably more on insurance, and then obviously, for if drivers don't have a vehicle that qualifies then there's less potential drivers that can come to the platform >> we've long talked about the competition between uber and lyft, but interestingly, we've talked about the competition for drivers between both of you and the idea that actually many drivers use both services but increasingly both of you have used different incentive systems and others to try to stay on your platform rather than switch in the middle of the day or at a particular moment. how do you see that dynamic changing over time in >> one thing i can say about drivers, they're, as i said,

they're record numbers, and $37 an hour that drivers can earn on the platform right now, which is phenomenal if you think about the type of driver can you turn on whenever you want and have this type of flexibility and earnings, there's not much like it i think what happened in covid is a lot more people prioritized flexibility. and soy t i think the pool of drivers grew pretty materially between the two services, we all have our different ways. we have our rewards program for our loyal drivers. we're continuing to give those drivers more and more transparency we feel quite good about the position we're in with drivers >> i don't know if can you speak to this, but there was a lawsuit filed in the state of california it was fascinating to me, against this space that you're in, effectively arguing that an appoin anti-trust violation it's another attempt to make

these contracted drivers effectively become full-time employees but arguing on an anti-trust basis that because you control the pricing that drivers can actually chooarge, n they can't decide, you know, what i'm going to charge five bucks less for this drive, that that creates undue power >> i can just talk about the flexibility drivers have to accept whatever drives they want and flexibility to turn on and off work literally at the tap of a button and get their is great income proud to live in california, obviously haven't always agreed with policy makers here. and we're going to fight for what we brieelieve in, which is independence for drivers and great benefits >> i'll see you very, very soon.

i don't know if i will see you, but in the back of a lyft. joe? >> are we still going to do tl this, sorkin, this jobs thing? >> we're going to do it. >> sneaking up on it 8:30 expectations, 258,000 jobs write that down. the futures right now have been ticked up a little 90 points on the dow and nasdaq and s&p basically unchanged. up a little. stay tuned you're watching "squawk box" live from times square is the planning effect. this is how it feels to know you have a wealth plan that covers everything that's important to you. this is what it's like to have a dedicated fidelity advisor looking at your full financial picture. making sure you have the right balance of risk and reward. and helping you plan for future generations.

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coming up, the number of the morning. the july jobs report our panel of experts standing by to weigh in on what it means for the fe td,he economy and the markets. don't go anywhere. we're coming right back in just a moment

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welcome back we are just about 90 seconds away from the government's job report let's bring in our panel

we have a chief economist from robinson stevens and our own steve liesman and rick santelli. is that, steve, we said 258. is that about where you are? or rick, where are you >> 200,000 >> i could be a little bit stronger >> a little stronger, steve. >> sarah >> i'm at 200,000, and also a little high on average hourly earnings at .4% >> only one left, janette. >> i'm sticking with the consensus, because who knows 258. >> sarah, we, you do the back-to-back quarters for the invr word >> i think it's technical but not a textbook recession what we need to get to is a real drop in unemployment >> that was my fault and janette, five seconds?

yes or no. >> not until employment caves. nope not yet. >> okay. ahead of these numbers, we've got about 80 points on the dow we're up nine or so on the nasdaq the s&p up five and change oil's under 90, and the ten-year is right around 2.7% let's get to the number. rick >> yes, and here we are. waiting for the big july jobs numbers, and it is a whopper 528,000. basically doubled expectations and 528,000's the best number since february when we were over 700,000. revisions to the last two months are 28,000 now let's go through it, shall we if we look at the unemployment rate, it's 3.5 it breaks the streak of four 3.6s in a row.

at least until we see if the last month was revised or not. and month over month average earn being, a pop of 1%. that is definitely juicy we haven't been up half a percent since march, october of '21 when it was up .6 cents. 34.6 on average hours worked and of course 34.6, you want to pay close attention here we're well off the pace of 34.9 much earlier and in '21 and labor force participation rate moving the wrong way. 62.1 62.1 that is the lightest since 61.9 in december of last year that's not good. and the under, under employment rate remains at 6.7. that's a post-covid low. that's very, very goodnes news

in all and interest rates looked at this and moved up higher, seven or eight basis points in a ten-year, and .20 in a two-year. and keep in mind that a two-year note last friday settled at 289. that is a big movement on a weekly basis, whereas a ten-year last friday settled at 265 so even though both maturities are up, you can see the short maturities are up much more dramatically that job number is terrific. i was way off on that one, as many in the panel were it's very difficult to say we're in a recession with that many jobs, but really that is the story to discuss, and as we look all around the u.s., no matter where you aim your eyes, europe, asia, many of the problems, whether they're energy related or inflation and price related, supply related, they seem to be improving in certain pockets, like in commodities, but in the energy space, not so much.

joe and the gang, back to you. >> all right, rick, thanks let's get to our jobs panel for instant reaction steve? i got to go to you a pretty amazing number. >> yeah, i'm not surprised by their this number, and like i said before, this is some recession we're having we added 8,000 or 9,000 jobs in the last few months. we're near 3 million jobs added this year amid two negative quarters of growth that everybody wants to call a recession. first of all, you had the big leisure and hospitality number i'm not really surprised by their. wt this the rebound trying to get back to where we were before the pandemic, and the difficulty finding labor is overwhelming the fear of the slowdown

and so you had that big increase in leisure and hospitality of 96,000 they're still going to be short 1.2 million jobs but very quickly, i want to talk about the fed on this. on the one hand, you're going to say powell ain't going to like this, because this is not the economy slowing down on the other hand you could come from this point of view, which is powell has said for a very long time that the u.s. job market and u.s. economy can withstand the higher rates without much damage to the job market because of the need to get back where we were before the pandemic so that suggests that maybe's right on that score, that we can raise interest rates here and not have a big increase in the unemployment rate. >> janette, i'm glad you said no recession beforehand i don't flowknow what we'd be talking about now. but that's a good number, 528. it's crazy that the market goes down on something like that. but that's the way of the world.

>> we've been in this weird month where badness is goodness for news for the market. i get it i think the way the fed will look at this, one way to look at this which is not commonly said is this means that the economy can sustain where the fed wants to go. and the fed wants to go up the fed wants to get to a terminal rate of 3.5 are they going to look at this and say sure no problem >> sara, i've said in the past, if we've got no stag, and inflation's rolling over, then i don't, i'm not saying it's clear sailing, but some of the most dire predictions, if we do see some, you know, some of the supply chain-related issues subside eventually, it's nice have a pretty strong job market in your back pocket. i know j. powell has to worry about that and wage pressure,

but do we really want horrible job numbers? is that really what we want so the fed can take its foot off the gas? >> i mean, this is good for the fed to see the strong job market, but it's a recipe for them to keep raising interest rates. the other issue is the high wage inflation. the fed has stated that they're going to continue to battle down recession ev inflation even at the risk of a recession. all of these, you know, as long as employment numbers stay strong that's good, but we do need to keep worrying about employment lagging later in the cycle as well as the consumer dipping into their savings in order to spend all of these are facttors t fac

we need to worry about going forward. >> i wonder what you think about recession now. i recall very much the day those gdp numbers hit and you came on air and reported them and folks showed that videotape over and over and over again as if we were going into a death spiral don't these jobs numbers say maybe this isn't your father's recession? >> well, i would make two comments i would redo my gdp hit exactly the same we had two negative quarters investors look at it a certain way. everybody on this panel can play politics if you want i'm a market guy two quarters back to back, everybody i know who invests, they immediately go to a certain point in their mind. you can play games with definitions and words. i think the reason we have good jobs numbers are many of the

policies are shooting ourselves in the foot, whether it's our feet or asia's feet, we've had bad policies during covid, post covid, spent too much, estimate lated too much with regard to energy, look what's going upon in the netherlands with all the tractors putting milk farmers out of business. no i think when you shut down the economy and reopen it, you could have a job-full-type recession i think there's a good chance we're going to dip more and growth is going to slow more, and i think ignoring what's going on all around us with regard to growth, weaponizing energy, china's going to weaponize everything that has to do with evs, yes, i will stick by what i said call it anything you want, i stay with jobs being plentiful, the path we're taking is fraught with curves and lack of growth >> janette, people say that jobs are a lagging indicator. it only lags for so long people that are waiting for the

jobs market to catch up with the recession, how long do we give that do things fall off a cliff >> i'm in the camp that this is, you know, this is weird, any way you look at it i would have expected, i would not have been surprised to see a lower number than this i'm also really not surprised to see this number in some respects i mean, earlier in the week we got the numbers that showed that there were fewer jobs unfilled well, okay we guess we know that it's not that those jobs disappeared. they got filled. so in that sense, it makes sense. i'm not disagreeing with what rick is saying about all these things that we still have to focus on, and that's why i've had a problem with people saying oh, well, we got a little bit of bad news and now we can stop worrying about stuff because everything will be just fine and the fed won't have to tighten and inflation is going to go

down i just don't think it's that easy but i do think this is the one point that i want to pull out that rick said that i completely agree with their is all about march 2020. everything we're seeing here is still the march 2020 story this is what happens when you shut the economy down and open it like this i think sometime next year we get the new story. when we've gone all through this in the meantime, the fed's going to raise >> sara, how much would you tack on to the terminal rate just based on today for the fed >> i think we can get another 100 basis point in rate hikes and expect more rate hikes in 2023, because these inflation numbers are becoming persistent. the question is what happens going forward. that's what the market's trying to figure out. i think we do get some recession. the question is how deep is it when you have market valuations

trading at historical averages and all these with consistent interest rate hikes, what happens to the employment numbers going forward. i see a lot more volatility and like lit market having more downside risk from here than upside >> thanks to our jobs panel. saira, jeanette. >> we breached the level on payroll. if took us all of that time to get it back. and ostensibly, there's a whole lot more people out there, which is why the participation rate is lower. labor supply remains a puzzle out there as we go forward >> okay. >> completely agree. completely agree

big short term, medium term and long-term puzzle >> great, want to thank you all. and says here we're going to see you all again in a few minutes, is that true let's continue this conversation with two more guests austan goolsbee, a professor at the university of chicago's booth school of business, and tyler goodspeed, an adjunct scholar at the cato institute and a hoover institution fellow. austan, in the old days, i always thought that were you on the low end of how many jobs we going to add did this surprise you today? >> it totally surprised me this is a jaw-dropping number. there has never been a time when we got the unemployment rate down this low, where we're adding 500,000 jobs. i thought that, given all the rate increases, that we would probably have a disappointment or a miss.

you are never going to hear me criticize a jobs number where we got a half million jobs. i would highlight there are two areas of not weakness but danger the first is, if you've got gdp shrinking when you're adding jobs at this kind of rate, it has to mean that productivity's going down and if productivity's going down, what that's going to imply for wages is not great and so you, you probably are going to see a continuation of this kind of negative real wage growth but the second thing is it is fundamentally not stable there are not enough people to keep adding 500,000 jobs a month. so on a pretty rapid order, it has to stop. we have to reach what is a de facto full employment, and then the numbers are not going to be as big and so people can't be surprised when that happens.

>> tyler, since this is all after the once-in-a-century pandemic, should we just figure out, you know, what to expect and whatever happens we just, i mean, it seems like it's new territory. we're in an odd sort of environment, are we not? >> we are in an odd environment. and i would say part of the oddity of that environment is this bifurcation between what's going on in the goods market and what's going on in the services sector it looks like 85% of the jobs gained last month were in the services sector. what's interesting is we saw in 2021 demand for goods, real demand for goods rose substantially above pre-pandemic trend. it rose to a peak of about 11% above pre-pandemic trend that's been coming down and is now about 3% above trend demand for services plummeted in 2020, and we still haven't quite gotten back to pre-pandemic trends i think this is part of a goods

sector going back to normal and then probably into recessionary territory eventually, and the services sector is continuing to recover. and that's part of the reason i think as austan noted, we've seen productivity decline really substantially, in part also because whether real wages are declining by as much as they have over the past year, and they're down about 6% below pre-pandemic trend if you use the real employment cost index, that's going to incentivize a bit of labor hoarding. >> market is a little interesting, austan. is it as simple as the fed has more work to do? if we really are seeing some commodities roll over and some supply chain issues eventually are not going to be as bad as they were -- >> right, it should help >> that's what i would think >> yeah, in a way, we got to see all the, what's bad about

negative supply shocks if what we're going to get is the unwinding of negative supply shocks, positive supply shock, that's wonderful we're going to be able to potentially reduce inflation without wrecking the economy, without having recession i think it is as simple, your first statement, i think it is as simple as the market looks and says ah-oh, the fed's going to raise more because the jobs number was so big. >> think about it, though, what if we really did see inflation moderate to some extent and had really, but we're adding too many jobs. the fed's like, yeah, yeah, i see inflation's coming down, but we got to kill these jobs, this is just way too many jobs. that makes no sense. >> that doesn't make sense >> but that's, what that's what we're seeing maybe tie lyler, there's someth to that, in that when the job

market's that strong eventually you're going to get people asking for more money on the service side the inflation's going to roll over on the commodity side but you're going to see it on the service sector side with people asking for more money or switching jobs or whatever when it's this tight. >> right so joe, i mean, this is something i've talked about before, that at the end of the day, services are five times as important as goods in the calculation of cpi so even a 5% decline in goods price inflation is going to be completely offset by just a 1% increase in services price inflation. and i think the problem is that, you know, the longer this wage price persistence persists, the deeper it becomes embedded in expectations certainly if we look at consumer-based measures of expectations we are sort of seeing an increasingly entrenched expectation of higher

inflation certainly over a 12-month time span >> tyler, there's one group that says we've had too much stimulus, too many dollars for too few goods, exacerbated by the reopening, and we shouldn't have been, you know, spending as much money, flooding the system with so much money is this a time to, do you think democrats and the president have that in mind when we're trying to spend another whatever it is? if you add the chips and the -- i can barely say it with a straight face, but the inflation reduction act. if you add those together, it's another trillion dollars does that just make the fed's job harder >> you know, i think in the near term on net, it does, because if you look at the timed distribution of the spending and receipts, there are a lot of initial outlays on what are effectively subsidies, and a lot of the receipts sort of start to come in later. so i think in some of the

near-term years, it's sort of a small, modest net inflationary impact it's disinflationary in the outyears the problem is what i would call a flow stock flow problem. the spending, the flow comes first, then you may get the stock of productive investment in green energy technology and a flow of services from that but the flow of spending comes first unfortunately. >> austan, i was going to give you that question to start instead of tyler, but do you think it's a bad idea to be doing more now we could have had the bernie plan at $5 trillion. there's some actual hydrocarbon development in the $700 billion, and it's into the $5 trillion. so i'm ready to say okay, i'm note going to kill myself over that >> we're not going to be as mad about that as the previous the previous bills, the cares act under trump, the rescue plan

under biden, they were kind of naked spending they weren't paid for. there weren't tax increases to cover that they just went straight to the deficit. this feels like a totally different kettle of fish, if you were because it's more than paid for. i mean, over the life of it, i >> i don't -- >> okay. i don't know what happened there. that was like a brain freeze. did you see that? i am worried. we will make sure, what do you think? should he make sure austin is okay? >> i think that austan is okay, but he is thinking really hard about what he wants to say. >> it better be good. it is crazy. isn't it? andrew, i don't know. if the feds say, whoa. hold on here. these are too many jobs. we need to act.

that is weird rationale. >> that has been the reverse nature of this whole thing. we are trying to put our foot on the neck of the economy. that is the whole point. you are trying to send jobs the wrong way. >> because of inflation. but if it rolls over -- >> right. this is the question. let's get his sense of what he sees in these job numbers and how he is maybe going to be thinking about all of this. what do you think? >> look. i think you have a month. i don't think you have to do anything in this particular zone in the month of august. i said in my game plan at the end of the week that if these numbers come into hot we are in trouble, even though i don't know if that would be the case. so we are. we are getting back a lot of the gains that we just had because it means that, obviously, when they come back, if it stays hot, they will do

another three quarters. that is not what we thought. this market is going to turn 50. this number is extraordinary. we are a growth country and the rest of the world is not. i agree with you, andrew. shouldn't we take our hats off to be the growth country of the world right now? we need more people and we don't have them. >> but that is the question. is there a way to land softly at this point? and when you think about this -- >> yes. >> we are actually the supply. this is actually getting better. >> yeah. as much as i thought that the twitter post was really good against him, i thought he was spot on. i thought, he is just so smart. what he said is true. the commodities rollover, and then the people, we slow down. i think there is more layoffs

in the last few weeks than i have seen in a long time. i had logistics on last night with the large trucking companies and they had 44,000 applicants for jobs. that is the highest they have had in a long time. the checkers are coming back, out of the woodwork. so andrew, i think there is something to be said for the country being very strong. the numbers show this. >> we have to jump, but just 30 seconds. warner bros. discovered. >> i like companies who make money, who even thought higher and have coverage. you know, charm her share only gets you so far. and best per share. charm and best per share. >> you know, warren buffett at maxim, which is praised by name, criticized by category. kramer, holding your tongue. >> you are gd.oo you are good. enjoy the show the whole mornings. >> we are back after this.

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recapping this hours unemployment report. the department is seeing 528,000 jobs were added in july with the unemployment rate edging down at 3.5%. to talk about the market, we are bringing saira malik back into the conversation. 25, this is jason furman, just out. nice to see these jobs added, but it is scary to see the size

of the adjustment we may have come in. not the sweet spot. what do you think? >> markets are already increasing, the odds of the 75 base for september. with these rate hikes coming, the issue is around instruction. what this means for the consumer, just take a look at earnings. if the u.s. is growing stronger than the rest of the world that will lead to a stronger dollar which is another headwind for earnings. you see that today with companies where they are growing revenues very strongly but margins are being hit and therefore they are missing. we see these numbers actually increase here today, so that is one of the risks. another risk for the consumer is rates continue to go up. just because of strong employment numbers, it is likely not enough for the consumer and earnings start to crack. >> therefore, what do you do in this market? >> i think it is challenging. i think it is challenging. we have had a range on equities

for about 3600 to 4200. i think the market got overly optimistic. they thought it was last week. we don't think they did. i think the fed continues to raise interest rates and we have the market above evaluations. that is a risk with more downsides than upsides. a lot of uncertainty going forward. we are not out until you see that persistent increase and hope that the economy holds up. you can get there but you are not there right now. odds are great for a recession going forward as of these upcoming rate hikes. >> you think there is no way that the fed says, you know what? maybe elon musk is right on one man, jobs on the other end. it's okay. >> it is pretty clear that their goal is to battle inflation. the inflation number is fairly strong with the cpi. maybe we will get good news there, but inflation remains high. hopefully the economy remains strong, but there may be a recession because the goal here

is to battle inflation. yet we still see inflation as an issue, particularly wage inflation. and those labor numbers are not picking up. we want to see that in order to ease supply and lower those numbers. >> okay. saira, i want to thank you for joining us this morning. a pj you very much. we are going to talk to our good friend, joe. joe, take a look at the final markets for me if you could. >> i will do that for you. no problem. 210 on the dow. we will see if that holds up throughout the entire session. i am hearing some things from some smart people, andrew, about the point that both of our esteemed economists were talking about. that is that the productivity is at risk here. if you are adding that many jobs, and that can hurt corporate profits. there is a reason for the stock market, for that, the end to what might be just a near-term rally. maybe there are reasons

ingrained in this weird economy that mean that the market is not going to like this because the feds are not going to go much further. who knows? >> who knows? >> i want to be happy about the jobs number. >> what a big week of news. >> what? >> what a big week of news. >> a big week of news. what was your favorite story? the visa one? make sure you join us. >> so many. i can't even. >> i like schumer work, schumer working through cinema to get the deal to get the interest on. make sure you join us next week. squawk on the streets. good friday morning. welcome to squawk on the street. i am here with jim crame