it is 5:00 a.m. at cnbc global headquarters. here is your "five@5." breaking news overnight. the fbi searching the mar-a-lago residence looking for classified documents taken from the white house. we have a live report from washington coming up. china extending military drills around taiwan indefinitely as taiwan pre-he pairs for live fire exercises today. on wall street, demand

destruction getting real the stocks paying the price today. plus, $52 billion for the chips act. plus $430 billion for the inflation reduction act. why d.c. could actually be fanning the flames of informainflation instead of snuffing them out jimmy pethokoukis has more and retail traders new bets on old names it is tuesday, august 9th, 2022. you are watching "worldwide exchan exc exchange." good morning i'm dominic chu in for brian sullivan let's look at the session from yesterday. the third straight losing session. dow implied higher by 67 points.

nasdaq higher by 20. a lot of the tech stocks very much a wait-and-see happening with nvidia yesterday. the 10-year treasury and 2-year treasury is now inverted 2-year treasury is 3.22% the 10-year treasury yield is below 2.79%. we are keeping an eye on that. all rates across the curve are higher in the oil market, crude off the highest since august 3rd $90 a barrel wti is down to 9$89.34 in crypto. bitcoin showing signs of down

side movement after the surge from the last couple weeks bitcoin below the $24,000 mark similar percentage move for ethereum 1, $1, $1, $1,771 let's get a check of the issues in europe with julianna tatelbaum. good morning, julianna >> dom, good morning not a lot going on in terms of market action. it seems investors are somewhat in the wait-and-see mode with the inflation report due tomorrow we have a flat start to trade for the french market. cac 40 down .10% ftse 100 is down many on holiday in europe. that august low is having impact on trade this morning.

we have more earnings rolling in one of the better performers is trading at the top of the stoxx 600. encouraging sign for the travel industry iwg trading at the bottom this morning after reporting a loss for the first half from the sector, this is how things are shaking out this morning. insurance trading well this morning up 0.8%. banks on the down side as i mentioned, dom, back to you. let's get a check of the corporate stories with courtney reagan >> thank you warren buffett adding to the

stake for occidental it paid $91 million between august 4th and august 8th. this brings the stake to over 20% or 188.4 million shares with $11 billion. at this level, berkshire could record adding billions of profit to the bottom line and alibaba petitions to convert the shares to secondary status the effective date of the switch is expected by the end of the year alibaba says the move will allow to expand access to china and other investors. shares of bed, bath & beyond popping after the 30% move yesterday. the highest volume day ever going back to the 1992 ipo dom, no apparent news pushing the stock higher, but reddit

traders are jumping back in. 45% of the firm's float is shorted. it is also gamestop and amc which is getting the new love. the meme traders are back at it, do dom. >> a cycle they come in and out you never know >> it is wild. on some of those days when bed, bath & beyond is up, it is really up. for no news. >> i remember doing the market check yesterday with gains and thinking it is happening all over again. >> it started friday yesterday was a big day. >> courtney reagan, thank you. to the breaking news and developments around what is characterized as an unprecedented investigation. the fbi executing a search warrant at the florida home at

mar-a-lago outside of palm beach. all over documents taken from the white house. we have susan mcginnis with more >> reporter: dom, good morning this never before seen search of the former president private residence is over classified information that donald trump took from the white house and delivered to mar-a-lago when he left office. the fbi on monday executing a search warrant on mar-a-lago. >> this could only happen if a judge found probable cause that evidence of a crime would be found there. >> can we get your reaction? >> reporter: trump not in florida during the search, ignoring questions in a statement, he says him home was under siege, raided and occupied by a large group of fbi agents

a source familiar said the search was tied to classified information trump took to mar-a-lago when he left the white house. >> clearly enter in as do questions about motive in retaining secret documents >> reporter: in february, the national archives retrieved boxes that trump removed asking if his handling violated federal law. >> no family has taken more arrows in the back than the trump family >> reporter: supporters lining up to depend him >> what were you doing what were you looking for? why not ask him? >> reporter: in florida, protesters gathered. reaction strong on both sides. >> it is disturbing. the man did nothing in office. i think they are on a witch hunt >> he will go down and it will be a great day >> reporter: trump calling it

politically motivated. democrats don't want me to run for president. as for trump's aspirations, now depends on the outcome of the search one person close to the former president says if he wasn't running before, dominic, he is now. >> so house leader kevin mccarthy had a tweet in your package. he issued a threat of sorts to attorney general merrick garland. this is becoming a lightning rod of an issue here especially for those in the house of representatives what exactly is going on there >> reporter: that's right. issuing a veiled threat. promise payback for initiating the search telling the attorney general the pollicization has reached a weaponized level he is saying preserve your documents and clear your calendar if the republicans take back the house in november, there will be

investigations into the department of justice. >> susan, thank you very much. to another developing story. china will extend the military drills are around taiwan for an unspecified amount of time this as taiwan has its own drills there we have eunice yoon with more. >> reporter: dom, thank you. taiwan accusing china of using pelosi's visit for a practice for invasion the prime minister said his government believes upsetting the status quo and the taiwan strait they were practicing blockades and logistics coordination the drills near taiwan are

coupled with the pla's exercises from yesterday where they practiced anti-submarine and at tactic its and exercises off the korean peninsula near japan. taiwan's foreign minister is not to be intimidated. they carried out a previously scheduled drill which was a simulation of attack they will carry out more drills this week. dom. >> eunice, you mentioned about the business impacts and ripple effects here during your report yesterday. how much of this is going to at least maybe influence po policymakers on the taiwan side of things with regard to what they will do or is taiwan very steady with regard to its message about how it wants to treat the response to the

chinese drills in the strait of taiwan >> reporter: the policymakers are watching what is happening and thinking about air traffic as well ast marine traffic. we saw the exercises first announced. however, the air traffic as well as marine traffic is coming back island officials in charge of the economy say they don't see a major impact on the economy because the two countries are so closely linked in fact, for all the important stuff such as chips and china needs taiwan as much as taiwan needs china. >> eunice yoon live. thank you very much. when we come back on the show, demand destruction is getting real as investors digest comments from a half dozen ceos

on the conference calls. and top green sectors stand to benefit from the new laws diana olick has more on that story. later on, too little, too laid for one vaccine maker its shares falling by more than a third from the pre-market trade. we will reveal that chart coming up weave ha busy morning ahead when "worldwide exchange" returns after this and buying your starter home. or whatever this is. but the things that last a lifetime like happiness, love and confidence... you can't buy those. but you can invest in them. we believe that your investments should work harder for the future you imagine. and that's where our strategic investing approach can help. t. rowe price. invest with confidence.

welcome back to "worldwide exchange." demand destruction and consumer spending shifts getting a bit more real this morning amid rough guidance from a dozen companies out with earnings yesterday. now just take a look at names like take-two interactive. weak fiscal guidance allbirds cutting outlook smiledirect cutting sales target by $100 million. same story at car guru and 3d systems. take-two ceo is says his issue is not recession proof or recession resistant. allbirds says this is

anticipation and external headwinds with consumer spending will persist in the back half of the year and smiledirect club quote, challenges to consumer spending exaccelerated faster and shift spending toward services have resulted in lower overall expected demand for the balance of the year. some very cautious comments on the consumer when the consumer drives more than 2/3 of the economy. joining me now is matt maley good morning, good mmatt i can't go through all of the quotes that is the theme developing about whether the comparisons over the last couple of years with covid and government handouts and stimulus payments and everything else that bolstered consumer balance sheets will be tough to replicate. does it give you pause if the

market has sustainable moment to the upside >> definitely, dom one thing i worry about is the market has a nice bounce oversold the bounce has lasted for over two months now the main reason behind that is people think the fed will pivot and that's great you can't have your cake and eat it too if demand destruction is severe, it will hurt consumers then earnings will have to come down and they haven't come down in the second quarter. you think they could seriously come down in the second half if that happens, it will be tough for the market to hold up. you can't have both. you will have major demand destruction in a situation where a lot of the inflation is supply induced. that gives you the recession that could be a little tougher

for the market to handle >> matt, strategy is your game this is why you get paid this is your job is the stuff i reeled off anecdotal in your mind or have you seen enough evidence that you feel this is is thematic? the consumer need more strength before you can say okay before going forward? >> we have seen these comments from ceos, but we see it in the data the credit card debt hitting all-time high. revolving debt hitting all-time high over $1 trillion the consumer is keeping up by borrowing. they can only do that for so long so, this is the kind of thing that shows the consumer is starting to get stressed you have the unleashing of

another round of pent-up demand in spring and summer you can't keep borrowing as we move to the school year, people will pull in their horns more that is what the ceos are concerned about. >> what is interesting is the consumers were pulling in the horns and circling the wagons is because of the inflation narrative. we have seen fuel prices come down over the course of the last three or four weeks. does that put more money in consumer pockets if so, what parts of the market benefit? >> the thing is, yes, it has come down a bit. people talk about peak inflation. if that inflation comes down, it will still stabilize or level off or plateau at a higher level than the 2% level that everybody is hoping for. you have to question how that helps the consumer you look at the crb index.

it is down 15% it is still down 40% from the pre-pandemic levels. it is still very high. i think it will have a problem i think you want to look at areas that are going to benefit from the higher ninflation. because of the issue just like opec embargo in the 1970s which is driven by supply, the inability to produce enough energy and the sanctions on russia which don't look like they will go away any time soon, this is one area where people can get back into and rally nicely as we move to the second half of the year >> matt, before we let you go, are we in or not in a recession? >> firstly, i think we are in a recession. early stages of one. it will get worse. i guess it will be hard to achieve a mild recession i think we will get a run of the

mill one that brings up problems for where the stock market is trading. >> matt maley. thank you. still on deck for the show, $52 billion chips act and another $433 billion for climate change and health care and more. so the real impact of d.c.'s rgg flio spree could have on suininatn. we'll have that coming up. keep it right here

welcome back to "worldwide exch exchange." time for the big money movers. first up, hims & hers. health and wellness products online a second quarter loss in line with estimates revenues beat forecast as the company added 100,000 new subscribers. hims & hers is raising guidance. that is leading to a 3.5% gain stock number two is good rx. shares soaring more than 50% after the company which lets people compare drug prices better than expected second quarter results. a previously contained issue with a grocery store has been addressed. it addresses discount prices from drugs from pharmacy ma

managers who are good rx customers. and stock three is a stock we talked about during the pandemic novavax. shares sliding in a big way after the vaccinemaker reported a second quarter loss of more than 500 mil$500 million the company is slashes annual guidance in half as it doesn't expect more sales of the covid-19 shot in the u.s. this year amid softer demand and global supply glut get out and travel stocks are surging thanks to huge pent-up demand will inflation stop that demand for travel in its tracks we have jefferies analyst david katz coming up next.

wanna help kids get their homework done? well, an internet connection's a good start. but kids also need computers. and sometimes the hardest thing about homework is finding a place to do it. so why not hook community centers up with wifi? for kids like us, and all the amazing things we're gonna learn. through projectup, comcast is committing $1 billion so millions more students can continue to get the tools they need to build a future of unlimited possibilities.

call it unprecedented. as federal agents execute a search warrant at former president trump's mar-a-lago estate d details ahead. spending spree kicking in high gear today as the president gets ready to sign the $52 billion chips act into law with some $430 billion in more spending waiting in the wings, what could all this mean for the inflation story? maybe not what lawmakers would have you believe. and snap struggles getting

real the company prepares to cut costs by shrinking work force. layoffs. it is tuesday, august 9th, 2022. you are watching "worldwide exchange" here on cnbc welcome back i'm dominic chu in for brian sullivan it is just about 5:30 a.m. outside new york city. here is how markets and your money are looking. we are going to see modest gains at opening bell if the futures move stay where think they are s&p 500 up 4 points and dow is up 60 points yields are moving and moving to the upside pretty much across every part of the yield curve. 2-year treasury at 3.23% 10-year treasury is 2.79%.

still inverted in a very big way. we will keep an eye on that. oil prices the demand is a big focus. will consumers buy if the economy is softening wti is at $89.60 ice brent crude is 1% down side. nat gas is $7.69 now to the top stories courtney reagan is back with those. >> good morning, dom google is up and running after a brief globaloutage late yesterday. outage tracking web site reported more than 30,000 users in the u.s. indicated problems with the site. others experienced problems in japan, canada and australia. and snap is in the early

stages of planning cuts. the scope of the cuts are unclear. snapchat has more than 6,000 workers and it is calling this a challenging business condition others announced job cuts and plans to slow hiring. and groupon cut 15% of the work force it plans to focus on mission critical activities. sofi is under fire this morning after softbank is selling its stake in the company. shares are down 3.5% dom, back to you >> courtney, thank you back to the breaking news. former president trump said fbi agents raided his mar-a-lago estate yesterday in florida and accessed his personal safe the search warrant was part of the investigation into the former president's removal of classified official presidential

records from the white house to his florida residence. trump was not at home during the time of the raid as he spends time in bedminster golf club in new jersey in the summer the search is an unprecedented federal law enforcement focus on president trump after months of questions of attorney general merrick garland was pursuing investigation into the the former president a huge developing story overnight. president biden will sign hr-4346 known as the chips act and science act into law today the $52 billion bill is aimed at boosting semiconductor manufacturing and research here in the united states it is part of the $280 billion package aimed at nfunding privat sector research. the bill comes ahead of the likely house passage of the $433 billion inflation reduction act

to tackle climate change and prescription drug costs and corporate tax reform despite the two billing claiming to help lower inflation pressures, they account for $500 trillion in spending joining me now is jimmy pethokoukis. policy analyst at the american institute and cnbc contributor jimmy, there is a debate, you can call it that they did debate it in congress if it is anti-inflationary or deflationary we have seen a recent precedent of massive amounts of government spending it happened during 2020 and 2021and 2022 you can argue that drove prices higher with the fed and taxpayer spending what is your thought here? is this going to lower

inflation? >> what is interesting, let's take the bill which is supposed to lower inflation the inflation reduction act. over ten years, the amount of fiscal tightening is super modest the impact on drug prices, that doesn't begin until 2026 if inflation begins to fall any time soon over the next month, it is not going to be because of the bill. an a lot of voters might say, wow. they passed this inflation reduction bill and inflation is falling. i guess the two are related. i'm sure the biden administration would like them to think that. this is a climb spending bill just like the chips bill you mentioned earlier. that is really an r&d. that is not what we're talking

about. >> jimmy, a lot of business school classes and general economic classes in college and whatnot will talk about the idea of life sticcycle costs. spend more now so you spend less going are forward in the future. is there a case to be made that when it comes to things like inflation reduction act that by spending the money you do now on things like renewable energy and health care, you make the investment now so you don't have to pay as much down the line >> listen, inflation is -- fighting inflation is a monetary policy role. i think the case you are making is also the case the biden administration is making and economists is that these bills and the infrastructure bill will increase the productive capacity of the economy that is anti-inflationary.

what is inflation? too much money chasing few too goods. if you produce more goods and more efficiently, over the long term, you created a more inflation resilient economy. particularly with the infrastructure bill and r&d. that is a legitimate case. >> if you take a look at the way things have shaken out the last couple years, we have seen tax an payer money spent in a direct way to boost the economy it was literally checks sent out or money showing up in people's account. if that taxpayer money was spent in the way it was and you could argue it led to some of the inflation we are seeing right now, could we be ready to see more of that kind of inflation given the money ear marked?

>> i think there is a really great difference with the spending with the american rescue plan. you can find a lot of economists say it caused a few points of the current inflation spike. if that money had been spent more on r&d and spent on reducing deficits, we would be in better position today. we want to think a lot more about how we can make the economy more productive. remember, who is going to be doing the r&d who is work in the chip factories? a lot of talented immigrants we better focus on getting them here or the bills won't work so well >> jimmy, before we let you go, we talked before you came on about the developing news

overnight with president trump and house raided in mar-a-lago can you take us through whether or not this changes the republican narrative going into the midterms and whether this provides or takes away from the fuel that donald trump has to make another run at the presidency >> i can tell you right now in d.c., no one is talking about green tax credits. they are talking about this fbi investigation. let me say this. there is still a piece of this inflation bill that still needs to be done that permitting bill to ease up on the environmental regulations so we can build more infrastructure and clean energy. that's going to require republican help. one concern is that as republicans are not going to be willing to help with that bill because this fbi raid is going to consume washington. to the extent it gets republicans juiced up about election to come out more, i think it really throws the

midterms up for grabs. i'll add that ron desantis has moved ahead of trump on the betting markets for 2024 the political ramifications are early, but it is volatile. >> volatile situation for sure jimmy pethokoukis, thank you very much. we appreciate it talk to you soon. >> thanks, dom. let's stay on the washington theme and talk about under the radar publicly traded companies that could see a benefit from the inflation reduction act. we have seen solar stocks get a bump since manchin signalled support for the act. diana olick is here with what other companies could benefit. good morning, diana. >> reporter: good morning, dom the obvious winners in the climate space are solar and wind and electric vehicles. many others are benefitting. something as mundane as hvac

systems. air conditioning and heating johnson controls and carrier and honeywell. tax credit to homeowners benefits those makers of heat pumps. agriculture is a carbon offender it benefits from $20 billion in aeg subsidies. they capture through the tax credit a major name in the space is green plains it makes ethanol, but shifted to focus on cleaner technologies for agriculture and potentially cleaner fuel >> clean fuel production tax credit that we'rie talking abou could change the industry from the farm through what we do and revalue the asset base overall to do so many more things that others can't do in refining assets >> reporter: in addition,

venture capital firms like fifth wall which closed a climate fund for real estate could see a boost to the start ups that it backs. clean cement and steel production and hydrogen and carbon capture it could also see the value of the companies it backs rise. bill gates wrote on friday, these incentives would also provide the private sector with the confidence to invest for the long term. that is important. dom. >> diana, in the trading that we have seen over the last few days with regard to the bill, inflation reduction act, coming to the president's desk in the coming days and weeks, it was solar that did a lot one thing that caught my eye is the traditional utility companies with renewable operations is this a situation where this

kind of money, the money we're talking about is enough to move the needle for the biggest utility companies in the world >> i think it is they are all talking about clean energy now the largest i hnvestment we hav seen for the climate innovations. that goes across the energy sector we go straight to solar or wind when this happens because those are the obvious plays. this is really a wide swath of all kinds of energy and agriculture. the small start ups that have all kind of innovations to reduce greenhouse gas emissions. they get a piece of this through the tax credits. >> diana olick with the latest thank you very much. we appreciate it. coming up on the show. if you have been to an airport this summer or tried to book a hotel room, you know the travel industry is booming and really booming. with recession fears looming, will this trend be short lived

as we head to break, check out futures. pointing to modest gains at opening bell s&p 500 by 4 and nasdaq up by one. stay tuned u are watching "worldwide exchange" here on cnbc

welcome back to "worldwide exchange." after two years where most people didn't go anywhere, certainly not on vacation, we

have been packing up airports and snapping up hotel rooms and booking vacation homes at break-neck paces no matter the cost with rising prices and fuel prices on the rise and recession worries looming, will demand to get out and travel drop off? let's get to david katz who covers the lodging companies david, i don't think there's been a time in the past where we have spoken where we haven't talked about casino stocks specifically i want to shelf that for the time being and talk about over coverage specifically with lodging areas. do you feel as though he we are still going to have to pay as consumers the massive prices for hotel rooms in the coming weeks and months >> when you present the question that way, the answer is yes.

what we are seeing are the cost of hotels, particularly in more than half or 3/4 of the major markets of the united states at higher room rates than 2019 before covid began the fact is they are not going down any time soon the reason for that is an element of travel which is just getting started again. that is corporate travel like yours and mine group travel and conventions i see you are showing shots of las vegas which is the premier group destination. many urban markets like new york and chicago are just starting to get their corporate customers back and group customers back. so that mid week demand, that group demand compresses everything for us leisure travelers, it is not going down any time soon. >> there are specific parts of that i know you don't cover the airlines specifically.

we talked about the woes that people have had with airports and travel and costs and staffing shortages there are any particular hotel companies that you cover that would stand to benefit more versus the others on a relative basis? >> yeah. a good question, dominic you know, the larger players are hilton and marriott, in our coverage, the largest. marriott is the largest by far they have a group component. in marriott's case, 20% of the room nights are group oriented most of which are corporately driven in hilton's case, it is a similar amount we look back at both companies, more than half room nights total are corporately driven rather than leisure driven that element of the business and let me be specific, sme market, has recovered in demand.

larger corporate clients are reactivating travel now. when you put those two group and corporate together for the larger companies like hilton and marriott, our call has been their earnings and demand and profile is accelerating. there is one other i would throw in there we cover the real estate companies. host hotels. owns a lot of the larger big box group hotels that the brands will manage for them they are a beneficiary here as well. >> david katz, thank you very much see you soon. coming up on the show. our next guest says she is getting her shopping list together and there are well known tech names that long-term investors shouldon csider. those names coming up. we'll be right back. 's boun from the first-ever triple action sleep supplement.

to daily digestive support. to more wellness solutions every day. get more with nature's bounty.

♪ ♪ ♪ ♪ ♪ ♪ when tired, achy feet make your whole body want to stop, it's dr. scholl's time. our insoles are designed with unique massaging gel waves, for all-day comfort and energy. find your relief in store or online. it's time for the biggest sale of the year, on the sleep number 360 smart bed. it senses your movements and automatically adjusts to keep you both comfortable. find your relief our smart sleepers get 28 minutes more restful sleep per night. all smart beds are on sale. save 50% on the sleep number 360 limited edition smart bed. only for a limited time.

welcome back to "worldwide exchange." let's get a check of markets as wall street waits for data tomorrow modest gains at opening bell joining me now is sylvia jablonski. she is the expert on many things sylvia, thematically, should people still invest in the market >> good morning, dom great to see you i think it is a great time to get into the market and start thinking about the thematically investing. whether etf or single stock names have been beat up because growth got hit worse than anything with the issues of inflation and fed hikes and things like that those names suffer the worst i think what we have seen lately and it is coming out of tech earnings there has been the resilience in the companies that are higher quality with the

strong balance sheets and proven they can absorb inflation. i talk about the names and themes, a lot of them are actually big tech names and big semiconductor names like amd and nvidia part of the themes or trends of the future like 5g and computers and edge and cloud it is great time to scoop them up for long-term investors. >> what is on the shopping list for you? specifically you mentioned the mega cap technology names. we have seen communication services companies really take it on the chin the last couple weeks for online advertising we saw nvidia pre-warning yesterday that drove a lot of the tech sector down could there be more down side for technologies is now the time to want to get in >> i think it depends on your

outlook in the short term. it is risky to get in for short-term returns for long-term traders, microsoft and amazon and google of the world. investing in cloud computing and they have ecommerce and they have all of these things to advertise when the economy recovers and we get past the rate hikes they have strong operating margins and balance sheets they can survive this. for the long term, they have been brought down and i'm continuing to scoop those up i have been doing it all along dollar cost averagiaveraging. nvidia had a terrible outlook on gaming, but if you think about the future and think deflationary tech and awutomate

factories. when i see nvidia fall 8%, it can fall more, but i can't time that i think i plan to hold this stock for three-to-five years and i would like to participate in the 5g trend. i'm comfortable buying them and holding them short term, you can get risk if you are looking for a play and might not have that play out for you. long term, they are good solid names. $20 million cash on the balance street that's a strong company. >> before we let you go, what is your least favorite part of the market right now >> my least favorite part of the market is the hyper growth the work from home trades that i think are over you know, i'm not looking for peloton. i'm not necessarily looking to jump into the subscriber media companies out there like the

netflix and names along those lines. these will take a while before they play out. >> sylvia jablonski, thank you that does it for us on "worldwide exchange. dow implied higher nasdaq slipped into the red. that's does it for us here "squawk box" has coverage coming up next. see you tomorrow any questions, chris? all good, thanks maura! there you go, one new inhaler! nice did you get my refill too? maybe healthier is auto refills and delivery made easy. you're a lifesaver. have a nice day.

good morning can stocks continue the run or is a summer swoon on the way what about the return of the meme stocks? breaking news from florida fbi searching former president trump's home the fallout ahead.

and the semiconductor bill signed into law today. we speak to the ceo of global foundries. this is all happening on tuesday, august 9th. "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc i'm kayla tausche along with brian sullivan joe, becky and andrew are off. the inmates are running the asylum great to be back in new york city look at where u.s. equities are this hour. dow opening up 55. the nasdaq slipped into the red. opening down 10 points a quiet day in the markets today from the headline perspective.