tv Worldwide Exchange CNBC August 8, 2022 5:00am-6:00am EDT
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china extending the military war games through monday as tensions with taiwan show no signs of easing a live report from the region coming up. plus warren buffett's berkshire hathaway not immune to the economy as souring sales is not enough to help the bottom line. later on, elon musk looks to take on twitter ceoagrawal outside the courtroom with the challenge. it is monday, august 8th, 2022 you are watching "worldwide exchange" here on cnbc good morning i'm dominic chu in for brian sullivan let's kickoff monday with the equities pointing to a positive open s&p off the third winning week in a row and the index is now
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equal distant with the 52-week high and 52-week low 14% from each level to be exact. dow jones industrial average is implied higher by 57 points off the session highs. nasdaq up by 55. modest gains at least to start the day indicated right now. better than the broader market small caps continue to shine with the russell 2000 with a 2% gain last week and capping off the first three-week winning streak of 2022 you can see the russell small cap up .75 in friday's session checking on the bond market side yields obviously very much a big part of the discussion now given the blowout jobs report on friday, the benchmark 10-year treasury is below 2.8% right now. the 2-year treasury is 3.02%
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we will keep an eye on that inversion. the short-term rates higher than the long-term rates. the oil market with crude prices off the worst week since april wti crude, $88.25. still below $90 mark ice brent crude off 80 cents $94.12 in cryptocurrency. bitcoin above $24,161. equal for ethereum $1,775 let's check on the global picture for markets with joumanna bercetche in the london newsroom good morning >> good morning, dom european markets are building on from the positive start. stoxx 600 up .50%.
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coming on from a weaker week last week. the index ended down .60%. almost fully recouperating the losses ftse 100 is brushing off the gloomy outlook raised by the bank of england when they hiked interest rates cac 40 is up .55%. dax in germany is up .35%. the german regulator may warned that consumers may have to cut back 20% this winter this is the picture for the most part all of the sectors are trading in positive territory. tech stocks up 1.2%. real estate up 1.2% as well. on the down side, banks down a fraction at .20%
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italian banks coming under pressure today after moody's revised the outlook to negative for the country. that is a picture overall. generally a more positive start to the week, dom >> joumanna bercetche live in london thank you very much. to the top stories and senate democrats in a weekend long vote-o-rama narrowly passing the climate and tax package which could be a victory ahead of the midt-term elec elections. chris pollone has the latest from washington. chris, what can you tell us about what this means and what was done and the drama that preceded it? >> reporter: dom, this is remarkable two weeks ago this was all but dead and trying to pass climate change legislation for years and prescription drug reform, democrats got it done. at the capitol, cheers for senators after they passed a
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cornerstone of the president biden agenda $ $700 billion climate and health care bill glch >> are you surprised >> reporter: after an all night session, the vote was 50/50 with all republicans opposed. vice president harris stepped in to hand democrats the trvictory. >> the vice president roads in the votes in the affirmative >> reporter: the bill directs $400 billion to fight climate change allows medicare to negotiate prices on drugs and raises the corporate tax on businesses making more than $1 billion a year to 15%. in a statement, president biden said this would make it work for working families. >> this is historic. no way to characterize anything.
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>> reporter: the inflation reduction act will have little impact on inflation. with an eye to the midterms, republicans predict doom. >> democrats passed the bill on the floor today. this inflation crisis is going to get worse >> reporter: with victory in hand, the democrats headed into the month-long break energized by the successes house speaker nancy pelosi said that chamber will return from its recess on friday to vote on this bill. it is likely to pass and go to president biden for his signature. dom. >> chris, many americans on medicare, you mentioned that, will appreciate the new $35 cap on insulin prescriptions other parts of the legislation here there was a chance that cap would apply to everyone who needs insulin. what exactly happened to that part of that discussion with the bill in legislation? >> reporter: senate republicans were able to strip that out because of parliamentary rules
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in the senate. it did have to get to 60 votes seven republicans did vote with all 50 democrats and independents to keep the $35 cap for everyone in the bill they fell three votes shy. >> chris pollone live in washington thank you very much. let's get to the other top stories. silvana henao is here with those. good morning >> dom, good morning fed reserve governor supports the rate hikes and thinks they should consider more 75 poifnt increases. bowman says similarly sized increases should be on the table until inflation comes down in a lasting way.
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b berkshire aghathaway shares jumped to $9.2 billion however, berkshire is not immune to the equity market volatility posting a $53 billion loss on investment during the same quarter. other highlights from the report, berkshire reported $1 billion of shares in the second quarter down from the $3.2 billion it bought in the same quarter a year ago the cash flow held at $106 billion. more than 2/3 of americans think the u.s. economy is getting worse. highest measure since 2008 according to a new abc news ipsos poll americans views of the president's handles of the recovery remains negative. and virtually unchanged from the same poll in early june with only 37% of americans approving the job he is doing. the rating on inflation is worse. 29% say they approve
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dom. thank you very much. see you later on now to your money as we he kick off the new week of stock trading. yektsz pointing to a modest opening here investors moving attention to key inflation data consumer price information on wednesday as they await signals from the inflation cooling down. we get properducer prices as wel joining me now is ben emons. ben, i wonder if the inflation narrative from the market perspective and anecdotal one from the gas station to the grocery store show signs of easing up? i am paying for cheaper gas than i did a few weeks ago. the narrative on inflation could be here for a while. is anything going to change this week with the inflation data
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>> good morning, dom friday was particularly much stronger than expected with the numbers. that will keep the inflation narrative out there. we can look forward to the cpi data to cool off and the impact the fed has with the strengthening of the dollar. that should show up tomorrow that is the first step as the second let in, the fed is determined to bring interest rates up further perhaps at 75 basis point tightening the inflation will start to shift because the more the rates go up and more inverted the yield curve becomes, the more the market will take confidence the inflation will cool off in the number of months we will see the first sign of the cpi data tomorrow. granted, we have a strong labor market with pressure. >> ben, did the bond market get
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it right, so to speak? there was in my back of the envelope quick view a .2% spike in 10-year treasury and on the heels of the report coming outs. is it fair to say the market expects the fed to see more? >> it does, dom. at the fmoc meeting, the fed would pivot to a slower pace of tightening as the fed speakers came out and payroll data came out, that expectation is re-priced we brought it back up to close to .75%. that is likely the fed will move to 75 in september and likely stay that way. i don't think much will change between the meeting that takes place in jackson hole. it is unlikely the fed will
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announce something there this is why the 10-year treasury shows no signs of stabilizing. it is hanging near 80. it is important for the stock market if that is the case, there is more room for the stock market to appreciation. >> stable rates are important. ben emons, thank you very much i appreciate it. when we come back on the show, china keeping up the pressure on staiwan following te visit by house speaker nancy pelosi the latest in the tense situation and what my next guest says could make it worse worse for investors. and elon musk looking to take his gripe with twitter from the boardroom to the debate hall throwing down the gauntlet for ceo agrawal. and more trouble for masa son and his softbank vision. we are back after this commercial break
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the drill is the warning to the people making trouble, perhaps the united states, they didn't say that, and pun p ishment for those in taiwan who favor independence the drills around taiwan added more drills in the area between china and the korean peninsula they are having the exercises in the south of the yellow sea until august 16th and bohai sea until august 8th from today for a month. the drills are meant to show china has the ability to block p foreign intervention taiwan official says the exercises are a simulation of an an attack of the main island. they are holding fresh drills on tuesday and thursday the u.s. said they have tried to reach out to the chinese side, but rejecting their calls.
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china said it would cut off military exchanges with the u.s. and defended that decision saying the u.s. bears serious consequences a state media statement says they are threatening sanction aan sanctions on lithuaniabecause lithuanian delegation arrived in taiwan on friday >> china says the new extensions for drills are meant to in one way punish those who want n independence there has to be an impact. is there an impact from the drills on businesses in taiwan or businesses in the region? >> reporter: absolutely. in fact, a lot of the airlines as well ass shippers were worrd about the exercises. it looks as air traffic is starting to resume
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this is despite the fact the exercises had been extended. also cargo shippers have now tentatively started to go back toward the area around taiwan. however, there is another impact of the uncertainty around taiwan and that is for business here in china because there have been more and more reports of chinese customs really going after companies that what they consider mislabel taiwan for shipment for example, the media has been reporting that, of course, what is approved is not to call taiwan a country that is, of course, the worst thing. beijing approved china takiwan, but does not want to see taiwan on its own we are seeing the labeling of business around the roots around taiwan or here in the mainland
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and on taiwan itself >> eunice yoon with the latest on the ground in china thank you very much, eunice. joining me now for what it means for investors is oliver weman's head of risk is daniel tannebaum. he is a former treasury official daniel, good morning you heard eunice's report. this is the world's second biggest economy, second to the united states. how much of an issue or worried should we be with u.s. versus taiwan >> we have seen the challenges with the u.s. anti-d taiwan fore last few years you can to the forget the bluster with the trump administration and issues that came about there i do think what we have seen for the most part in china's response to the events of the
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last week are in line with some of the measured responses that they have taken to some of the threats previously it does seem like the u.s. is certainly holding back and letting china essentially blow off steam as a result of speaker pelosi's visit last we'ek there are a number of newer sanctions the u.s. imposed that could further ratchet up tensions again these include bans on imports over issues of forced labor. this is important to note in a time where we are watching the continued invasion of ukraine from russia. china is not russia as what could happen in the next step. >> it is not russia which is probably a good thing. china is a more formidable economic force than russia is. there's got to be at least a hint of caution that investors have to approach this with
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because we know that between china and taiwan, they control the technology supply chain specifically as well as others the business impact is going to be big what exactly are you it telling clients about how they should navigate this given tensions and supply chain issues that are strained >> we have already seen a move toward supply chain resiliency for clients to look for alternative sources. the semiconductor space with volume of production made there is a difficult challenge to replace. in the interim, we are seeing companies preemptively developing exit plans for t'aipei much like they did for ukraine. i do think some of those may be preemptive as the concern might be they can still have threats beyond action from a china
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standpoint let's remember china and the u.s. are the largest trading partners of the other. china has recognized there is limited benefit to them from continued escalation much like they stayed off the sidelines of the russia and ukraine for the last few months from antagonizing the west and humanity there is a lot to watch what is happening. taiwan is one of many issues included with de-listed for chinese companies in the u.s. and additional import bans to escalate things further in the u.s. this is not enough to spook investors in isolation >> daniel tannenbaum thank you very much. still on deck for the show forget hard landing. forget soft landing. why our next guest is preparing her portfolio for a moderate landing. and the stock pick she is adding
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on the back of the views we are back after this break >> announcer: today's big number 71%. that was the increase of average spending on grocery products at discount stores from october '21 through june according to inmarket spending on those items at grocery stores declined 5% as con ssumers look for ways to cu costs to offset inflation. you worked hard to save for my future. so now... i want to thank you. i started investing with vanguard to help take care of you, like you took care of me. te quiero, mamá. only at vanguard you're more than just an investor you're an owner. helping you take care of the ones you love. that's the value of ownership.
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welcome back let's get a check of the other top headlines. phillip mena is in new york with the latest >> good morning, dom a cease-fire with israel and palestinian militants is holding this morning 44 people were killed in gaza and hundreds more injured. fighting broke out friday when missiles were launched over the attack. president biden is leaving covid isolation after two weeks. he is heading to eastern kentucky with first lady dr. jill biden to tour the damage from the deadly floods the bidens will join governor andy beshear and his wife. they increased federal funding to ensure the government willfully cover debris removal. if you are up at this hour, you would love the idea to get
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paid to take a nap that is what casper the mattress company is doing a job listing is offering part-time hours and pay for people to sleep in the stores and unexpected settings in the world. dress code is pajamas. applicants must be willing to be featured in social media >> i will not saying anything. it seems like a good side gig. >> i'll say it i'll pay for a good nap right now. i have a 6 month old at home >> thank you, phillip. ahead on the show, tamp ing down the recession talk. what indeed.com thinks about the jobs report and what it means for the market and fed's next move. by the way, if you haven't done so, follow our podcast. if you miss "worldwide exchange" check us out on apple or spotify
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will it move the needle on president biden's approval rating and berkshire not immune to the market rout what warren buffett is telling investors. it is monday, august 8th, 2022 you are watching "worldwide exchange" here on cnbc welcome back i'm dominic chu in for brian sullivan it is 5:32 a.m. eastern time here is how markets and your money are looking right now. futures indicating a modestly higher open. 5 576 higher for the dawes and s up 9% and nasdaq up 46 treasury yields with a big run up 10-year treasury a hair below
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2.8% benchmark 2-year treasury is 3.20%. that inversion is still in play. long-term rates below short-term once oil prices moving to the down side this morning. u.s. benchmark wti $88.45. 56 cents to the down side. similar percentage loss for world benchmark ice brent crude at $94.30. nat gas below at $9.01 we have the latest headlines with silvana henao. celsius is pulling its motion to hire the cfo back to $92,000 a month. he technical remains an employee of the company this decision comes days after cnbc reported on the request by celsius to list the help as a
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consultant during the bankruptcy process. two employers in indiana employing 10,000 people in the state and it worries it hurts the drugmaker's ability to attract diverse scientific engineering talent from around the world and plan for more growth outside the home state. the manufacturing employs 10,000 people in indiana. and elon musk is challenging the ceo of twitter to a public debate about fake accounts and s spam in a tweet on saturday, musk said the challenge was the culmination of the series of tweets that started before 1:00 a.m. saturday morning when musk
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was interacting with a fan over lawsuit suit over the terminated bid to take twitter private. >> silvana henao, thank you. to washington, d.c. where senate democrats passed the inflation reduction act in a very narrow vote along party lines. no surprise there. ylan mui has details there good morning, ylan >> reporter: good morning, dom democrats claiming victory this weekend after finally getting their health care and climate package through the senate the vote was 50/50 every democrat in favor. every republican against vice president harris broke the tie. afterwards, chuck schumer told reporters he believes this bill will payoff at the polls >> democrats getting things done that matter to them. mainstream things that average folks. this is not an esoteric list this is things people always cared about. >> reporter: keeping the caucus unified was trick yiy all the w
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to the end krysten sinema along with several democrats supported a last-minute carve out of the 15% minimum tax. that would be paid for by extending the cap on the state and local tax reductions a poison pill for some democrats. the democrats kept it for private equity and voted to pay for it by extending loss invitations for two years rather than by s.a.l.t. the house will come back into session on friday to pass the bill and it will go to the president's desk dom, biden acknowledged this bill required many compromises, but he said important things always do. back to you. >> ylan, are there any final road blocks before this deal can hit president biden's desk could this move the needle on the president's approval numbers? we know how bad they've been and how bad they've been for a while
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now. >> reporter: this bill looks like it is on a glide path to becoming law progressives in the house have not made much noise. democrats are hoping to hammer home this message they can deliver legislative achievements, not just the inflation reduction act, but the chips bill and gun reform and nato and stuff around ukraine and russia they are hoping this message can win them over voters for the midterms in it november and certainly if president biden's approval ratings improve as we see this bill getting passed and gas prices starting to fall, that can have a trickle down effect on the senate and house races in the fall. >> all right midterms are key ylan mui, thank you very much. plenty of hand wringing this year if the economy is headed for recession and inflation at
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40-year highs and consumers pulling back on spending you find hard signs of a down turn in the labor market employers are hiring in droves over the past three months where they added an average of 437,000 jobs per month let's talk more about what some of the conflicting trends are like in the market and economy with ann elizabeth konkel at indeed that is one of the biggest job sites out there. ann elizabeth, where is the disconnect why are we seeing the job market as resilient as it is given all of the near negative comments in the economy right now? >> friday's jobs report was strong i think it goes back to consumer spending the american consumer continues to spend and that is allowing dollars to flow into businesses
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and in turn, those businesses are hiring we saw in july, the u.s. economy added over 500,000 jobs. it is important that employer demand for workers remains strong this is good news for workers, too. with the unemployment rate at the 50-year low, it puts them in a good position to find employment as well as capitalize on nominal wage. >> the wage gains, i think many would agree were probably some of the jarring stats with regard to the jobs report that we saw on friday. if this is the situation that we can see wages continue to grow the way they are, and if the inflation narrative later this week with cpi and ppi data levels off, does it feel like the jobs requirement can keep the positive momentum if people are making more and inflation in the next year or two >> i think that is the big question we are waiting for come wednesday with the cpi report.
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if we see an inflation print that is cooling, that is good news to have cooler inflation and strong labor market. if we see inflation continue to be hot as well as very hot labor market, that makes the fed's job very difficult and in that case, i would say we probably are going to expect more steep rate hikes ahead. >> one of the other things that catches my attention -- i work in news -- and often times over the course of the last several weeks now, we have seen headlines of companies announcing layoffs or hiring freezes or outright rescinding job offers already granted that is not showing up in the jobs data from the government side of things from the labor department is it really a worry right now the layoff situation >> so, there have been plenty of anecdotes about layoffs circulating. it looks like in agaggregate,
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layoffs are low. if a worker experiences a layoff, they can transition to another job quickly. this jobs report showed there is more churn happening in the labor market right now the flow from employment to unemployment ticked up a little bit. also the job rate for unemployment workers went up as well the idea they are able to transition to a new job quickly. a lot of the layoff anecdotes have been from the tech sector we saw in friday's report that information, the information industry also added jobs it is clear, particularly tech is not going off a cliff maybe a bit of a slowdown there. in aggregate, we are not seeing that layoff damage show up in the data. >> ann elizabeth, before we let you go, there is a debate in the business and wall street side of
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things and certainly in the main street side of things with regard to whether or not america is in a recession. in your opinion? >> we are not in a recession the labor market is incredibly strong and for the jobs report to show we added over 500,000 jobs, it is not possible to have that strong of a labor market and be in a recession. >> ann elizabeth konkel, thank you very much. >> thanks. coming up on the show, this morning's big money movers and cvs health expanding in-home health services. and as we head to break, some other headlines. the california dmv accusing tesla of deceptive practices and full self driving options. in the worst case, it could lose
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its licenses to operate as a manufacturer and dealer in the golden state baidu won approval for ride hailing services in two chinese cities the first chinese company to obtain such permits and regulatory approval. a quick check on futures as we head to break right now, the dow implied higher by 57 points. sd uby 9 naaqp 45 points. stay tuned you are watching "worldwide exchange" here on cnbc
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welcome back to "worldwide exchange." time for the big movney movers three stocks to watch. softbank is posting a $23 billion loss in the second quarter as the value of investment in vision sank. softbank sold stake in uber and opendoor softbank shares with the loss and up in tokyo trading. stock two is berkshire the company reporting a $44 billion loss in the second quarter as its stock holdings also tumbled in value. berkshire did generate more than $9 billion in operating as gains from insurance and railroads offset losses at geico the company slowed purchases of
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stocks it still has around $105 billion in cash to deploy. finally, cvs health. the journal reports it will make a bid for signify health it is including a possible sale. initial offers were due this week signify up 18% pre-market. on deck for the show, inflation data is front and center this week we get you ready for the cpi and ppi report. if you haven't done so, follow our podcast if you miss "worldwide exchange" check us out on spotify or apple or your podcast app of choice. "worldwide exchange" in audio format we'll be right back.
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excha exchange." we have a very busy week ahead here is what you should watch for. earnings today and aig and t2. on tuesday, coinbase and wynn and capri. wednesday, disney and fox. then thursday is siemens and rivian we have the consumer prices on thursday and fed speeches from minneapolis fed president kashkari then jobless claims and ppi business level reports on thursday to finish off the week, if that wasn't enough, consumer sentiment on friday. a lot of potential catalysts on the calendar on macro and micro picture to drive the market. futures indicating what could be a modestly higher open here the dow is implied higher by 55 points you can see here the s&p up 9.
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nasdaq up 40 points. if you look at the mega cap technology and related trade. apple and microsoft over the last month we are seeing real out performance in shares of apple could that be the place a lot of people decided to buy the dip as things moved to the down side given valuation concerns and interest rates microsoft up 6%. alphabet lagging over the course of the last year to date period. apple, microsoft and alphabet. keep an eye on apple also 10-year treasury yields in the discussion valuations going higher over the last year. 2.8% we are still just on the little bit of the down trend from the highs we saw 3.5% over the course of the last couple months with interest rates seemingly for now on the decline, could that at least put more wind in
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the sails for the market or are we heading higher because of the inflation narrative? let's bring in tiffany mcghee. the cnbc contributor tiffany, i wa wonder if the interest rate story is enough for you to feel comfortable investing in the market and valuations at a fair level or still need to pull back even more >> so, good morning, dom good to see you. i always feel comfortable investing in the market. i'm a long-term investor we always have to be comfortable. i think the bigger thing is how do you navigate a market like this of course, we were talking about the jobs report that was released last week i think it is a challenging issue. questions that have come up is is this the bottom or
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recession? i'll answer no just like your last guest how do you navigate that think about two things what are we interested in buying in what do you have conviction around when it comes to the large stocks, for us staples like microsoft and apple. we will always own those at our firm we have a long-term conviction it is whether or not we can get a better price we have been adding all year long in terms of portfolio positioning, we are doing a couple of things we are overweight equity and we are adding growth as well. >> if you are selectively adding growth, what types of growth are you looking for? is it straight up in technology? is it in the mega cap names you talked about are you trying to find out performance in the growth names and other parts of the market and small and midcap space
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where are you looking right now? what is on the shopping list >> a few things. in the discussion of whether the fed is going to have a soft landing or maybe more of a cushion landing? we don't know. to play both sides, think of cyclicals and defensive heres. in terms of adding growth, we always like to invest in long names. the fact that in 2020, new business applications hit an all-time high. in 2021, we broke that record. we are seeing this shift in terms of people starting new businesses the side hustle is real. companies like square space and hub spot really meet those customers who are starting new businesses where they are and help engage with customers and help them to really meet customers where they are and be successful
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we are seeing those companies doing well >> driving the consumer trade and get people more involved in the purchase decision and the company is engaged in that that's great we also mention this idea of the hard landing we have been trying to figure out if the federal reserve can engineer a soft landing. a decent side slow down in the yes w economy without a full-blown recession. given what the fed issing doing right now and where the economy is right now and what we have done politically in washington with the inflation reduction act. on balance, does that mean america is headed for a hard or soft landing >> so my best guess is we are seeing where in the middle i know that is not what you want to hear. first, when you think about it, the fed does not have a great track record of soft landings.
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they have to calibrate enough to bring down inflation without throwing the economy into a full recession. that's really not easy remember, they have the dual mandate. maximum unemployment and price stability. when you look at inflation readings, those are lagging indicators powell said they will not shift policy until they see sustained inflation come down. he is going by the inflation re readings there are more current indicators we see commodity prices come down and shipping costing come down will the fed pause rate hikes and shift thinking and pause rate hikes if they see the indicators continue to come down >> complex and a hnarrative.
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good morning goals remain in charge stocks pointing to a higher open as the s&p looks to continue the three-week win streak. breaking news from d.c democrats pass the climate health and spending deal we will head to the nation's capitol for more. and return to in-person work is your boss calling you back to the office what if you don't want to go
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we assemble the panel of experts help you have the tough conversation with your management it's monday, august 8th. "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc i'm brian sullivan along with andrew ross sorkin who will join us shortly joe and becky, i don't know where they are thanks for joining us. stock market may have another good start to the week in a nice rally for the equity markets we are seeing stock futures up 67 points. they are higher nonetheless. s&p coming into the week on a nice win streak. three weeks. will we make it four we will find out it has been a good run
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