2022 "squawk box" begins right now. ♪ good morning and welcome to "squawk box" here on cnbc. we're live at the nasdaq market site in times square i'm melissa lee along with andrew ross sorkin joe and becky are off today. let's take a look at the market due out later. s&p looking up 11.5, dow up by 73, nasdaq higher at 45. this after nasdaq lost more than a percent yesterday. take a look at treasury yields and where we stand there the 10-year note is at 2.777%, so fairly stable ahead of cpi at 8:30 andrew. >> thanks, melissa

let's talk corporate news because this is a biggy. elon muffing now officially selling $7.92 million tesla shares worth almost $6.9 billion, those sales taking place between last friday and just yesterday this is according to a series of s.e.c. filings published last night. investors might remember earlier this year musk had nor more tesla sales planned. on twitter last night, musk responded to some tesla fans and asked if he is done selling shares in the ev maker this is what he said he said, yes, in the hopefully unlikely event that twitter forces this deal to close and some equity partners don't come through, it's important to avoid an emergency sale of tesla stock. musk also said he would buy some of his tesla shares back if he doesn't have to go through with

the twitter acquisition. melissa, what do you think first he says he's not going to do it. now he's being, frankly, prudent, in that he's clearly suggesting he may have to close the deal even if he doesn't want to and doesn't have all the financial backing. >> i think a lot changed since the last tweet this legal battle over the court date set in october, that changes a whole lot of things for musk the timing is interesting and worth noting as well this is after the june lows, since the june lows. tesla shares are up 35%. remember he had a super bad feeling about the economy. so the timing is very interesting as well. >> well, you know, it's interesting because he said he's super -- he has a super bad feeling about the economy, but he's also said he thinks inflation is coming down as he's talked about the commodity prices and input costs related

to tesla itself. i'm never sure exactly where he stands but the other component to me that was so interesting about this decision to sell the shares, it's also a recognition, i think, that just because some of the financial backers in the deal for twitter with him, if they were to leave, that underitself, that won't allow him to necessarily step back from the deal. >> right a recognition he might be forced to go through with the acqui acquisition. i think for twitter shareholders, that is certainly hopeful and heartening twitter shares, by the way, also a nice run since june lows as we've seen with many, many of these tech stocks. in the comment section on twitter when he said, yes, he would buy back shares jourks to wonder when twitter shares take a dip, will elon musk be back in, and is that a put in tesla

shares >> i don't know. is that going to hold things together if things go farther down >> i think it's a -- i think it could be a sign of confidence. >> no question. >> he still owns 15% of the company. so for him to step in and buy even more, you know -- >> what i couldn't tell is i'll step in and buy more if the twitter deal doesn't go through. >> that was open-ended, i think. i think it was pretty open-ended. >> okay. >> read what you will out of that let's get back to the broader markets now. investors are waiting for the big number of the week and the cpi report and what it says about it steve liesman joins me now with more everybody's watching, steve. >> yeah, it's a big number the headline inflation outlook expected to improve for a the first time in a year

it's forecast to keep rising and that's the measure that matters most to the federal reserve. here are the numbers we're looking for. just 0.2 on the cpi. one of lowest we've had in a year it had been up that should decline the year-over-year rate. look at the core rate continuin at a robust gain you have 6.1% from 5.9%. economists at citigroup writing, we would not expect the fed to be particularly comforted that inflationary measures are flowing. service sector and housing inflation, they're driving the core, and factors inside of both suggest they're not ready to plateau. housing costs, that's a third of the index. you can see on this chart, they didn't start to rise is that the skpt on the second line that's the cpi there housing costs did not start to rise until several months after

inflation had already taken off. still below 2.5% from a year ago when the core was up 4.5% in the past several months. housing inflation continues to increase even though core inflation has leveled off. it could take several months for easing of home prices to show up, and the tight job market continues to boost wage gains. those wage gains could show up in inflation measures because they're going to try to protect their profit market. no relief expected in the core, and that makes little relieve from the fed and their rate hikes. >> just for the record, steve, what do the fed funds say about a september 75 basis points and when rate cuts might kick in in in 2023? the last i checked the rate cut idea in 2023 was pushed out later and later in the year. >> that is accurate as the peak

is furtherer into the year that kind of makes sense i'll read it to you. i didn't prepare a list for you. i have a peaks rate coming in march of 2023. you're right it had been down a week or soing a, it had been down as low as 330 or 340. we still have a 319 built in for the end of 2023. so those cuts are still there. and the last i looked, it was about a 68% problemn't of basis rate hike in september. >> hey, steve. i have a housing question for you. we often talk about mortgage prices, but the truth is that most americans are renting these days and the expectations among most economists is you're going to see rents continue to go

through the roof does that end up in these numbers? >> right so, andrew, i don't like to argue so much on television, although, sometimes i do -- >> we can do it. >> okay. but i think more americans are homeowners than they are renters. i could have that wrong. are you right about that i'd be interested to know. i throughout were more home openers >> i always thought no more than 40%, 50% of the country owned a home so i thought we were looking at half the country living off of rents. the other piece, by the way, 90% of the mortgages are already set in stone, right? >> that's right. that's right >> according to pew, to insert myself in a conversation i'm not a part of, in 2019, 36% were

renters. >> that's what i thought, one-third, two-thirds, or 60/40. that's my understanding. >> anyway. >> anyway, it's way more complicated than all that the way we measure housing prices in the index, andrew, is roy we call owner's equivalent rent we do that in order to remove the asset price of the house from the index and put in the cost of living in the home, and that cost of living in the home is determined by what it costs to rent that home. in other words, the equivalent of renting it. what's been happening as you know, is rents have been going up pretty substantially. i've heard -- you must have heard these stories because all people in new york city really talk about are rental prices, but these surges, double-digit rental rates have been pretty remarkable that surge moves along or ends up in the index, and it takes time for it to show up in the

index. that's why we have this delayed effect in rent it's really interesting. you are also correct in pointing out most americans, especially ones who own their home and have long-term mortgages do not experience that inflation on a month-to-month or even year-to-year basis. >> that was the only point i was trying to make i think you do have renters across the country that, to me, is where the true cash crunch comes. >> yeah. i always defer housing questions to diana olick there's a way you look at the arbitrage of prices. if the mortgage rate goes up do, the prices come down i was a real estate reporter in my earlier days, and i did

report through two housing crashes. really interesting, andrew, when i look from the macro point of view the inflation story of housing. it's really a supply question. we've had ten years of underbuilding in housing in this country, so i don't see a whole lot of serious relief coming from the housing market. you may have some decline over time, but not a big decline. >> okay. steve liesman, thank you sir teaching an econ and housing class, right. coming up, when we return, coinbase down sharply. this after the exchange posted more than abillion dollar quarterly loss we'll talk about all of it plus, as we head to the base, check out this morning's premarket winners and losers stay tuned we're you're watching "squawk box" on cnbc this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep,

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workforce and downgrade its office space. and take a look at roblox as they're getting hit hard, missing the mark among the other key metric, roblox reported 52.2 million average, about a million short of what analysts had been expecting, melissa. >> how much do you pay for a sweetgreen salad, honest question >> too much. too much. >> can you imagine >> i would say 14 bucks? 15 bucks >> i think you're lowballing. >> i'll tell you what's worse. if you do it on uber eats or a different platform and have it delivered. >> you're paying even more. >> i don't want to tell you. i paid 30 bucks for a salad. it upset me. i'm a cheapskate i can't do it. >> you wonder why they're cutting their inflationary

environment. coinbase say sales fell more than 60% as they fled the crypto markets. joining us now, stephanie link, key investment strategist at% h hightower. this was supposed to be the proxy for the crypto market, but it was the only game in town for a long time. i'm wondering what you think of coin here with the steep decline and whether there's more pain to come. >> yeah. i mean -- good morning i'm not surprised we had an earnings and a revenue miss, right, because look at what crypto did in the corner you know, the market cap fell 60%. so but it was kind of disappointing across the board in terms of lower transactions that had to do with knicks because it was more institutional versus retail. the only bright spot is the average fees were up sequ

sequentially, so that's a good thing. people are worried about changes in general i think that's just -- that's going to come event yuli, but for the time being, that's the only bright spot that i saw within the quarter. >> the next shoe to drop is probably fewer fees. the issue with coinbase is it's still transaction revenue focused. that's really the core of the business and the mix it's more -- i mean overall it's more retail-driven, in terms of the kind of trader that's exactly who's pulling out of the market right now. >> and you can't really value the stock right now. if you're missing earnings and revenue and numbers are coming down, it's really hard even though the stock is down 65% to date. the interesting think is it's rallied 40% from the lows. i'm not surprised to seeit dow after 10% down yesterday. >> sure.

let's move on and talk about twitter, steph elon musk selling tesla shares it gives hope to shareholders for what you see for this potential deal. >> twitter is not trading on any kind of fundamentals at this point, and even if elon musk does get this company, he has a long way to go that's going to take a very long time it's hard to value it because you don't know what the model is going to look like even six to 12 months from now. >> in terms of disney, we're expecting that after the bell today, steph, and there's a lot going on in terms of theme park parks. they're very busy right now.

maybe trips are being down now, postponed trips are being done now. there's not a normal going on for disney and, of course, there's the streaming business. >> yeah. and the reason the stock trades at 28 times forward estimates is because of streaming, and if streaming is coming down and subs are challenged, chen, i mean, it's -- what do you want to value the stock at? i think the stocks are interesting. the parks have reopened. we know that tv advertising is coming down. we know there's a ton of competition in streaming, and i just feel like maybe the 11 million sub number this we're probably going to get tonight is okay, but thatry going to be able to do the 230 million subs? across the board you've had disappointments in every streaming company so far, so i don't expect really anything great from disney.

there's too many question marks on how they'll get the subscribers. >> it's a million in order to hit it each year in order to get to the forecast, which seems like a staggering number. >> if they get it, that's fierngs but at what cost that's the problem that's the problem with the mod. that's 20 times forward. >> yeah. steph, great to speak with you have a great day st stephanie link. >> thank you you too. we have a lot more coming up on "squawk." a judge ruling on the battle between live golf and pga. why the business of sports is taking note and keeping their eyes on this one.

first, though, as we head to a break, check out oil price this morning wti crude, you can buy it by the barrel it will cost you $89.64. it's come wn ado little bit. stay tuned you're watching "squawk box" right here on cnbc space. the boundary of human achievement.

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welcome back to "squawk box. time for today's executive edge. the justice department is preparing to sue google. the suit would be a come min nation of years of building the case before the suit sun veiled the feds are continuing to speak with publishers to refresh facts and gain additional details for

the complaint. andrew. >> we've got to talk about this, melissa. i want to know what you think. this is a big story in the world of sports but a big story, i would argue, in a world of business a judge denied a claim by players. they i ledge the top u.s. golf league violated laws but pin issuing them for joining the rival organization what do you think of this? >> the judge's ruling was made in part on the notion that the con trct or agreement with the other circuit basically compensated for what they were leashing behind in the pga it was fine to say you're excluded from this tour. i can see the logic in that. >> i can see the logic the other question, though, is do you think on a larger anti-trust basis, that these

players are going to have a fighting chance, or do you think that ultimately what the judges said in this particular case is going to be the precedent? by the way, if this becomes the precedent, every other commissioner of every other league can breathe a huge sigh of relief, because this is a major win for pga and a major loss for liv. >> i never thought about it that way. i wouldn't be surprised if this gets appealed or litigated at another point in time. >> it's a years-long battle i'm sure. >> joo coming up a tax fight. why there's a huge battling sparking on wall street. before we head to break, take a look at yesterday's winners and losers

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good morning and welcome back to "squawk box" live at the market in times square nasdaq is looking to be higher by about 39. taking a look at treasury yields, we're holding steady on the 10-year. we stand at 78 the 2 ye-year at 3.255%. musk sells $6.9 billion worth of tesla stochlkt investors may remember musk said he had no further tesla sales planned, but he's locked in a twitter battle on twitter last night he

responded to question asking if he was done selling shares he said, yes he said in the unfortunate likelihood that the deal has to close and in vesters don't come through, it's important to avoid an emergency sale of tesla stock. meantime, washington news, republican lawmakers are pushing back, fuming that senate democrats included another $08 billion in irs funding as part of the, quote, inflation reduction act. chuck marr is the vice president of federal tax policy at the center for budget and tax priorities good morning to both of you. joe, i'm going to start with you. the real ruck us at this point i how many americans are going to be audited and whether we should consider that a benefit or a

problem. >> thanks for having me. the bottom line with this is 87,000 new federal tax agents mean that a lot of middle-class americans and business owners are going to be subject to scrutiny and we know this. those with adjusted gross income under $50,000 suffer a disproportion at share of these audits and if you look at c corps, they receive a disproportion at share of these audits. one in four of the new audits will fit the sole proprietor in of us who have been small business owners, we know the audit costs can be $20,000 easily, and that's true even if you've been paying your taxes. that's why we view this threat as severe for middle-class taxpayers and small business owners in particular. >> joe, i don't think anybody --

i think we'll all agree -- small business owners or especially people who can't afford to go through an audit as long as they're paying their taxes the conundrum is we have two proschs, people at the high end who don't pay their taxes, and we know that and there's oefd that and that's one of the reasons you're going to see the irs bring in more money. part of this is to get the money actually due the country the other thing is s-corps as you know, there are a lot of shenanigans. a lot of people are playing games. >> we know this is going to be a shakedown of the middle class. they're going to see a shakedown by about $2,000 on year. that's insult to injury. >> why are we calling it a shakedown? i don't understand why we use this terminology why would it be a shakedown if people haven't paid taxes that they owe >> it's a shakedown because even

those who have paid their taxes are going to have to live up to the tension, the stress of facing an audit. and if you're a small business owner, the type of industries this lever yslevies on you, the can't afford it. to think we're going to quadle -- quadruple the size, this is an insult to american families >> chuck marr, what do you think of this? >> we need to focus on three thinks i think you've got to think about what is the state of the irs today, whau does this bill do, and what are republicans saying about it. the state of the irs, the irs has been gutted, okay, gutted. you had the gingrich wave in the

'90s and the wave since 2010 the irs budget cut by a fifth. they don't answer the phone. the computer systems are held together by duct tape. the audits there, the sophisticated audits that audits high income people has been cut by 40% the number is the same it was in 1954 the economy today is seven times the size it was in 1954 and a whole lot more complex the republicans have decimated the irs. this is to rebuild the irs, rebuild the computer systems >> respond to what joe said. there are americans watching right now. they're worried about getting

audited. they're saying if i get audited, i can't afford the audit let me just pay my taxes >> exactly let me respond so the bill, right, right now, the audit rate on millionaires has dropped 70%. this bill is intended to reverse that trajectory, okay? so you have -- first of all -- >> not all -- >> that's what the law saws. let's think about middle-class people, right? think about a welder, think about a nurse, right, think about even an engineer, what do those people have? they get a salary, maybe they have some interest, maybe they have a brokerage account, right? they've got a w-form the irs has all that information.

now, think about now -- i think it would be good for people to go google people. accounts offshore, partnerships. this is who think oar going after, wealthy people hiding money overseas, also giving the irs a chance to go toe to toe with big companies now, we need to talk about what republicans are thinking >> joe -- >> you gave him a lot of time. >> chuck, hang on for a second i understand joe, you can respond and we'll let chuck respond. >> well, look, this is a big mistake. the law suggests it's only going to target those making 400,000 or more, that's simply not true. it says no such thing. we know that in the past these

audits have disproportionately targeted those earning less than $50,000 in reported adjusted gross income we know our budget office has said it's going to attack small proprietorships. that's why they've estimated it's going go a real tax hike for those earning under $75,000 a year those earning between 50,000 and $75,000 a year will see a tax hike under $50,000, the average person will see $1,100 in uncreased taxes. >> you have an opportunity to respond. you have about 30 seconds to respond. >> he's making stuff up. the thing republicans are saying, they're using very

dangerous rhetoric army, right? prior arrest agents. 87,000 that numb were is so wrong, right? that includes computer programmers, people. they're going after you. they're trying to scare people this is dangerous reckless this is targeted at high income people who cheat on their tacks. republicans are so desperate because they know the public will support them, so they're trying to say, oh , they're goin after people who fill out w-2 forms. >> chuck, joel, we have to leave the conversation there i know it's a long one we'll continue it. i promise to have you both back to discuss it more. china has announced its military is completing various tachcs could this end the day-long war games? we'll talk about that. you don't want to miss our

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. welcome back u.s. equity futures up, poised

to open higher, but a whole lot could change in two hours' time once we adjust the cpi report. the nasdaq up 33 points. bank stocks, let's take a look at them. we've seen quite a run in technology overall since june lows, but we're seeing a positive open for some of these bank stocks. andrew. >> we've got a developing geopolitical story, the war games are far from over. i want to go to eunice yoon who joins us live. eunice. >> reporter: thank you, andrew the tasks around taiwan have been successfully completed but they're going to conduct regular controls taiwan has not yet confirmed a chinese withdrawal however, this

apparent with draw has an unwasherring review. they released a white paper, the first in two decades, saying to blame them, they're warning against u.s. interference and the paper reiterates its right to use of force for china to reclaim taiwan fox foxconn, the apple supplier, said in an earnings call, put in a pretty good defense for its attempt to invest $800 million the chair said in the call, quote, they misunderstood they no longer have the a

capabilities foxconn's investment is under security review in taiwan, and a lot of the talk has been that security officials are very concerned that this investment could pave the way for foxconn to fund the chip ambition or get in the way of taiwan's relationship with the u.s., which as you guys know has been pushing its own c.h.i.p.s. act so foxconn's chairman says it has a plan b if this investment does not go through. however, he didn't elucidate what it was going to be. >> what is it like on the ground when it comes to the military and the show of power? we've always from this side of the world looked at it as an effort to project power domestically rather than internationally. is that wrong? >> we definitely see that show of force here.

on state tv as well as all the papers, it's wall to wall how strong beijing is. there's been a lot of discussion about the need to normalize these drills and then, of course, a lot of the cartoons or political commentary has been against the united states and in particular speaker pelosi saying the u.s. and noother country should interfere or change the relationship taiwan very much sees taiwan is a part of china and reunification is inevitable. >> eunice yoon, thank you. coming up, shares of disney down 30% the next result, qrtlyuaer

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wall street awaits disney's third quarter results out later today. it is down 30% this year despite gains gains in this past month guys, welcome. jason, i'll start off with you it does seem that a lot of business valuation is built on the motion of the streaming business, and that's exactly where the concern is can disney actually deliver on the very ambitious forecast it has for its streaming business when it comes to subscribers? >> it's funny that you say that. i think there's nothing in

disney's valuation that is tethered to the streaming business today >> oh, really m. really >> no, the street just lost confidence in the streaming mim business we're in this ironic situation now where, you know, paradoxically, disney sharehold shareholders should be rooting for netflix. the value will ultimately cause the buy side to go back to doing some of the parts on disney. >> if disney came out tonight and said we're not going to make 230 million to 260 million

subscribers and set that lower, that wouldn't affect the value much >> tactically the stock could go down but if you look at the move, $100 in the equity value, that, some investor will be disappointed if they walked back their sub targets, but the big picture is the street isn't convinced that streaming video is a real business >> cynthia, would you agree with that that it's not being viewed as a streaming streaming company? >> we have heard nothing but streaming, streaming, streaming from disney the last five year i think in the beggar bigger pii

to talk about the total addressable market question. a few years ago people were talking the target could be a billion consumers worldwide. that's a big number that set a lot of hollywood on a chase to build these streaming platforms. if that real global number is realistically, if that real global number is realistically somewhere more at 250 million, perhaps 300 million, that's a very different business and people have to recalibrate investors are going to want to hear from bob chapek, what trends are they seeing, disney has a lot of benefit, they have pockets in so many places. they can feel what's going on. and i think the laser focus will be on streaming and a lot of

interest on how the domestic, domestic north american sales for disney, disney plus are going. there will be a lot of focus there. i think those are going to be the real hard-core things that chapek has to answer in a couple hours. >> the core of streaming and what propels the streaming story, cynthia is the shalate o content. what is there in the pipe that is going to get people excited to go to the theaters or sign up as subscribers >> it's very much like disney has had this gravity-defying run of successful marvel movies at the box office they're on a really strong run with disney plus on content that is very sticky, very buzzy with the fams

it's going to go back to the fundamentals how much in an environment where you are not selling your content in downstream windows as hollywood has for decades, this is a very big experiment in really, really keeping everything in house. how strong is that ecosystem if you have no third party, very few third party checks coming in for your very expensive content? >> we've got to leave it there thank you so much. and s andrew >> fascinating to see what disney posts later today when we come back, details on elon musk selling shares of tesla. and we're going to talk crypto mike novogratz on that winter and whether it will ever thaw. but first as we head to a

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good morning stocks coming off mostly lower session as it sinks back into bear territory a new fund making its debut today, backing oil companies in a world where cleaner practices are pushed and iac is home to more than 150 digital products used around the world. we'll hear from the ceo and much more as the second hour of "squawk box" begins right now. good morning, and welcome back to "squawk box" right here on cnbc. i'm andrew ross sorkin along with melissa lee joe and becky are off today. the dow up about 75 points,

looking at the nasdaq up about 30 points. we were looking at the ten-year potato note we'll show you oil as we think about where wti crude stands right now. if you buy it by the barrel, it will cost you 89.32. and we'll have a conversation in just a little bit with moike novogratz about crypto we have bitcoin standing at $23,000. it had been up to $24,000. and novogratz, as i just mentioned, will be with us a little bit later to talk about the landscape about when and if this winter will thaw. i'm not sure he's as optimistic as some of the great bitcoin bulls would like >> he's more tactical in terms of his portfolio we'll see.

we'll cementsee. there's a lot of shakeout in who's been exposed to terra and luna let's get to dom chiu with a loo at the morning's movers. >> we'll start off with shares of twitter which are higher. incremental gains right now in the market place receipt now after a disclosure that tesla ceo and founder elon musk has sold roughly $6.9 billion worth of tesla stock he did acknowledge on social media that a lot of this was due to this notion that if in his words in the unlikely event he loses his court battle with twitter over the takeover of that company, he doesn't want to have to force sales of tesla down the line. shares are up, still above the agree-upon price but you see some gains with musk

selling his shares watch those twitter shares tesla is up since its may lows maybe a good time to sell some of those shares if you are trying to hedge that out also watching what's happening with the chip stocks after a massive two-day selloff. nvidia shares are about stable right now, as are micron, qualcomm, advantaged micro and the semi-conductor etf right now traders are at least showing some signs of stability from those stocks. and one other praise lace to was roku this has been a rollercoaster of a stock. but it's on a decided downturn post pandemic. the streaming video device maker is now down this morning due in

part to analyst whose downgrade the stock to an equivalent of a sell rating. they say it's a $62 stock, which is roughly 20% down side from where it closed yesterday. they think the increasing competitive pressures in streaming devices and investments will weigh on profits. their estimates are below consensus. they feel there's 20% down side. i'll send things back over to you. >> this stock has really got none love. >> you guess could you call it a little bit of a bounce here but on a low basis >> back to the chips, it's interesting to think about how these companies warned and end markets. it seems end markets are more concerning for the consumer.

maybe with the exception of intel which had trouble with data center. >> it was video games when it comes to nvidia. also weakness in some of the pc markets. if you're talking about those markets, they are tough comps over the last couple years as people got driven more towards home devices, towards working at home during the pandemic and whatnot, but i'm not sure how much of that weakness m cin consumer is an absolute weakness in consumer or a return to two or three years ago to a trend line that was in place before the pandemic drove everybody to stream more on their devices or buy more laptops these things have been so beaten up over the course of the last several weeks. it remains to be seen what happens with these guys.

but video games are a part of that weakness story. >> thanks. see you later. meantime, we are just getting the latest read and mortgage demand. diana, good morning. >> good morning, andrew. you know, rate volatility was, extremely unusually high last week, and that could be due a rare surge in refinance demand they've been falling steadily since the start of the year when rates began rising they were still 82% off from a year ago according to the mortgage banking association's weekly average, the 30-year fixed rose from 5.43% to 5.47%. doesn't sound like a lot but here's what happened on a daily basis. the average jumped 45 basis points at the start of the week, then fell 41 basis points, then jumped back up by 36% thank to

the huge jobs report they normally don't make such huge swings. they haven't moved at all now, but that had likely change as we get the cp "i-ri report down 19% from a year ago, and it's all about affordability, which is not great right now in connection to the overall economy and a drop of home prices which has yet to come >> diana yolic thank you. coming up, the impact of the chips act on the silicon valley. congressman ro khanna joins us but before we head to break, let's get a check on the markets. right now indicatehierd gh cpi due at 8:30 eastern time "squawk box" will be right back.

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that helps protect you at home and on the go. you feel so safe, it's as if... i don't know... evander holyfield has your back. i wouldn't click on that. hey, thanks! we got a muffin for ed! all right! you don't need those calories. can we at least split it? nope. advanced security that helps protect your 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 president biden signing the chips act yesterday and the inflation reduction act set for a house vote likely this friday. joining us with more on the inflation reduction act and the chips act, representative ro khanna who was at the white house for the chips signing. i don't know if we should talk chips or the inflation reduction

act. there is so much debate and commotion about so many various pieces of it i want to go to flainflation fo moment if i could. there is question over whether this is going to end inflation or reduce inflation. i know some people who say i don't even care, i'm for the climate piece of it or for the irs piece of it. >> over the long run i think it will have a deflationary impact. but if you're making things in the united states, if we're going to be making solar panels, more energy independence, that means it is going to have less inflation. >> from you a believer by the way, to bring it become to the chips act that the chips act is inflationary >> no. andrew, we've been shipping

semi-conductors from china at $15,000 a container. that's what's causing the inflation. i mean, our cars can't have the semi-conductor chips if we're bringing production back to the united states, manufacturing back to the united states, in the long run, that's going to help lower price. >> except for the fact that we typically charge more for our labor and therefore there are higher costs this is going to sound like blasphemy, but i've heard people say maybe we should have built these in mexico. >> look at what the cost has been as you know, the shipping cost has gone up from $4,000 to $14,000. making semi-conductor chips is a very, very complex process, and china is building 30 of these beds taiwan's building 19 with this, we're only going to build 12 we figured out the mass

production in america. that's how we became a great super power. we invented the semi-conductor chip and somehow we thought mass production didn't matter, that was a costly mistake we're fixing that now. >> when you think about the irs, and i don't know if you saw. we did a segment in the last hour about the irs there's a lot of commotion, a lot of talking points around the fact that 87,000 emplo employees, 87,000 people had be working at the irs and what that means for your chance of getting audited or for individuals who can't afford it. what do you tell them? >>i tell them like everyone. pay your taxes this is not designed for tax, you know, clever schemes, this is going after people who just aren't honestly paying their

taxes. and there is almost a trillion dollars because of that. that's not me, that's larry summers. a lot of revenue we're not collecting because people aren't being honest about it. most people, our teachers, firefighters, you have a w-2, you're honest about your taxes if people are honest about their taxes, this won't be an issue. >> while we have you on the naigs reduction act, you have ever had any conversations with ker kyrsten sinema i think there was a lot of head scratching over this issue of carried interest and why she decided for whatever reason that this was the, i don't want to say the hill to die on, but she was going to make a fight. do you know why she did that >> i had a lot of conversations with senator manchin i'm proud of them. i have not had conversations with senator sinema. here's what my speculation would be i hear the arguments all the time in silicon valley

we need this as an investment, incentive, why, ro, are you for it, getting rid of the carried interest loophole. and i tell them, come on, you're going to make investment decisions because you went a thousand times return on google or facebook. it's just, there are a lot of people in private equity and venture capital who really believe in this. and she probably heard from a lot of them. some of us said no to them and she for whatever reason bought their argument >> last piece, i just want to go back if i could on the chip acts if you look at big tech, do you think they're really on board in terms of what, what the, what the chips act is actually going to do? and i'm mott just talking about the intels, which are clearly on board, but everybody else. >> micron announce thad d that e

going to be making a $40 billion investment over the years. the same with solar. the inflation reduction act has $40 million in solar we don't do the cell production here if you do the wafer production here, and china isn't going to buy your wafers, we can't make the supply chain work. we've gone from an $80 billion trade deficit with china to a $350 billion trade deficit we have to rebalance production. this is not a magic bill this is a down payment, a 10% down payment but at least we're saying manufacturing matters. we're going to try to bring some of these supply chains back home >> congressman i wanted to ask you about corporate support. i wanted to ask you about whether or not you've spoken to the likes of an alphabet or

apple, specifically on the 1% tax on buybacks. they are large purchasers of their own shares they are in your district or around it. and i'm wondering if that will impact their plans $1 trillion in stock buybacks were done this year. so this could really, a 1% tax law may seem like not much it could really, you know, make companies think twice. >> i haven't spoken to them on this issue, but i've spoken to them all the time on other issues, and the fact, frankly, that i haven't heard from them on this issue suggests to me that they're pinefine with it i don't think it's something that's going to consequently hurt and when they're upset about something i hear from them as i did hear from people in venture capital and others about the carried interest loophole. >> congressman, it's always great to see you we appreciate your perspective on all of this and look forward

to seeing you again very soon. >> thank you, andrew >> thanks. coming up, a new fund backing u.s. energy companies amid a time when esg funds have pushed for cleaner practices vivek ramaswamy joins us to talk about the new fund and we're counting down to the new number of the morning. the cpi numbers due out at 8:3067 time now for today's aflac trivia question. how much is amazon paying for urdia right to the nfl for thsday night football? the answer when cnbc "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?

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ch now the answer to today's aflac trivia question. how much is amazon paying for the media rights to the nfl for thursday night football? the answer, $1 billion per year. it's the first time a streaming service will carry a full package of games exclusively >> welcome back to "squawk box" this morning shares of sweet green plunging this morning

the salad company topping estimates but revenue fell short and the company is cuttingity full-year outlook and announced plans to lay off 5% of its workforce and downgrade its office space the justice department is reportedly preparing to sue google as soon as next month the suit would be the culmination of years of work by the department to build the case that the alphabet business unit has a maum. >> don't miss our exclusive interview with the ceo of iac to talk about the strength of the consumer and so much more. stay tuned you're watching "squawk box" right here on cnbc

good morning welcome back to "squawk box. check out futures ahead of cpi

data out in just a few hours' time last friday, canopy growth tanked but we are seeing guains and check out the price of crude. we are looking at under 90 bucks a barrel 88.90 is the level there while brent is at 94.5 >> strive asset management launching its fund exchange under the ticker, drll joining us is vivek ramaswamy. good morning to you. >> morning >> there's a lot going on here and there's a lot of talk about wokeness and esg and whether esg is real and how esg should be

measured, and you have a very provocative view about all of it >> look, i think it's actually pretty simple. over the last decade, what we've seen is large asset managers have mandated u.s. energy companies to produce less oil and natural gas. what that's led to is a generational energy crisis, a massive supply of demand and balance in the united states and around the world for fossil fuels. the good news is, u.s. energy companies can actually capture that opportunity but can only do that if they are liberated from these esg mandates and constraints. that's what we're bringing to the table with strive. we're listing this new drll on the new york stock exchange today. but what we are bringing the mandate to frack for more oil and gas. to be more successful over the long run without regard to social, political agendas.

and if they do it, i think it's an opportunity to see a u.s. renaissance of u.s. energy am i thenergy, to trade as they have for the last 30 year, closer to parity with the u.s. tech sector, closer to parity with the s&p 500, and i think that's an opportunity to not only unleash the potential of u.s. energy stocks but more importantly to shore up american energy security in the process as well. >> let me ask you this there's a lot of questions about fossil fuels, the need for fossil fuels right now and i think there's no question that in this particular moment, and i think we've learned from a national security perspective, from an economic perspective, that the transition is going to take a long time so there's no question that these energy companies are going to be important. one of the reasons there's been a discount, though, on many of these energy companies is that 10, 15, 20 years from now, it's

unclear what the other side of this looks like. a lot of them are investing in clean tech do youly the think they should investing in clean tech? >> they should invest where they have a competitive advantage and hud should not be wasting money where they don't have advantage. in hydrogen they have competitive advantages they're build they're building pipelines exxon in the '80s invested in i.t. >> you look at the steps that chevron is take organize the steps that others are taking even around wind and solar, and there are many you think they should not be in those businesses >> that's true for wind and

solar general limit carbon recapture and hydrogen, those conversations we ought to be having if they have inherent advantages you talk about the energy transition, let's talk about what that transition looks like. less than 3.5% market share. and we only picked off the lowest hanging fruit there is a debate today on whether or not there is a future for fossil fuels after 2030. i think the answer to that question is clear as day fossil fuels will be here to stay for a long time to come and what the esg consensus has done is to cause investors to value these companies vlasic theas if there is no value after 2030 >> i think this is where larry fix h f fink has been, you have to take

into consideration the social move maybe it's political if you have pension funds around the world, especially in europe, who are continuing down this path, by default, by default, that means that there's less investment money going into these same companies which means this multiple would be lower than it otherwise would be >> the question isn't where the funds are flowing. the question is where the funds should be knowing. there are equal number of pension funds that aren't on the east coast of the united states. this should be a discussion. as an economic matter, you brought up blackrock why was it in chevron's best interest as a company for black rock, state street and vanguard to vote in fave of scope three reduction targets at chevron where an oil and gas company is

asked to take responsibility not just for its own emissions but downstream uses of its own products why should the amazon truck bringing food to your house be responsible for these emission i think that has made these companies less successful. it's made them trade at lower multiples, made them systematically underinvest i spoke to the largest or one of the largest conferences. u.s. energy conferences of u.s. executives yesterday and i will tell you first hand, they are hungry for this message. they are waiting for a new shareholder mandate. >> i'm sure. you are their hero, i'm sure because here you are, effectively saying -- i don't want to put words in your mouth. you're an energy company, don't

worry about climate change and the question, i don't flow know if i'm putting words in your mouth. the other piece is we now have the blue state-red state war taking place over this very issue in terms of how pension funds in those states are using and almost weaponizing and i'm sure you'd say the blue states have weaponized it we're watching the red states weaponize it how can this be good for anybody? >> i don't think the divisiveness in capital markets is good for anybody. we should leave that division to be worked out through the political debate let's sort it out through the political process. but whatwe've seen over the last ten year is i agree but, the weaponization of capital to say that we're going to settle that question through force, through economic force, capital

force with a small group of asset managers dictating how an entire industry behaves. i think that has created an opportunity where energy stocks today trade at a discount to the market energy stocks have trailed u.s. tech you want to know a funny fact, over the last four years since june of 2018 throughout end of this last month, u.s. energy earnings outpaced those of tech companies, but stock price underperformed why is that? these large managers are as ascribing a lower value. that can change. >> what do you make of -- yes, i agree with you there are blue states and countries, by the way in europe that you may argue, i don't know if we're going to use the word weaponization, but have weaponized this issue. there was an article in the "new york times" about how pension funds in red states have been working together effectively to try to push back on this,

telling different financial services firms you can't do business or issue municipal bonds perhaps in our state or other things if in fact you are not going to finance particular industries for particular reasons many reasons. do you think that's the right answer >> there are three things on the menu one is progressive agendas, particularly the anti-production agenda one solution is to offer a right wing push instaidead. that is not my view or strive's view our position is we need to bring neutrality back to the boardroom where companies are not responsible and we don't want companies to be responsible for staking out political or social positions. they should do what they do best, deliver their services and products if it's oil, natural gas or coal, do it and do it

unapologetically those are questions in which avenue every citizen has an equal stake and equal voice where some one in a corner office in manhattan should not decide the way everyone behaves >> in terms of where you see the opportunity and the discount embedded in energy stocks because of that political process which is sort of dictating the shape of the industry, it seems like the only way to gain or realize that discount is for that process to break. >> exactly, so -- >> seems like a tall order at this point what's the catalyst for that to break? >> we hope one of the catalysts, bluntly, is bringing this post esg mandate to the sector. over the same period that investors gave technology stocks a lot of credit in their so-called terminal value after

2030, those same investors gave no credit to oil and gas profits after 2030, saying they're going to disappear as part of the so-called energy transition. i think we are in the middle of the great reversal where over the next decade, they could possibly important like tech companies did in the last energy profits are very much on the table. i think we're part of the cat hess coming up, michael novogratz. meantime, check out shares of coinbase after they posted a nearly billion dollar quarterly loss and then joey levin injos us to talk digital ad spending "squawk box" will be right back. .

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crypto currency is rebounding bitcoin up more than 20% since its june lows. joining us now in an exclusive

interview is galaxy digital ceo mike novogratz, not only a trader of crypto but a macro trader that's how you made your name, your bones in another lifetime i have to ask you about how you are thinking about cpi and the fed's path for rate hike >> all eyes are on cpi this morning. eight sevens expected. if we get a nine handle people are going to roll into a rate hike come september. september's six weeks away because it's late september. a lot can happen, but that will lock in the mind-set of the fed being behind the curve, and if we get a low eight handle people are going to think, ah, and there will be a relief rally so it's a little bit of a coin flip because picking these numbers is difficult. we know one thing, because the owners, you're not going to have a collapsing number, and i think

the market's more nervous about a high number than a low number. >> how do you think about, you know, if we don't have a collapsing number and it's sort of a slow grind lower but still stubbornly and persistently high, mike, how do you think about that even aside from what the markets are pricing in, in terms of rate hikes, what are you thinking of and the impact on the economy? >> j. powell has been pretty clear that they've done a lot. they're going to do another hike in september monetary policy has lagged raising rates from 0 to 3.25 or 3.5 or wherever they end up, he'll pause a little bit to see their impact he was pretty specific about that last night. the market was pricing him pausing and immediately cutting. and i think that might be

pollyannaish >> you sound like you think a soft land soming is possible. >> i'm skeptical in my intuition, we had one of the greatest monetary bubbles. it feels like it would almost be too easy to get out of it with a soft landing and a 20% pullback in the s&p we're missing in a lot of ways why the retail is so strong. when nominal gdp is still high, there's still money in people's pockets. i think the fed is going to literally have to over time hurt the labor market there's a lag in the labor market there's still "help wanted" signs all over until they get taken down, we'll pause and see if the market rolls over we certainly see signs the economy's slowing down, but,

again, when nominal gdp was as high as it was it makes things tricky >> we mentioned at the top that were you a macro trader, and i suspect that your portfolio has other positions aside from crypto so i'm wondering in terms of the equity, the commodity side, the rate side of the portfolio that you have, how are you positioned there. >> yeah, listen. the most fascinating thing is the trends is steepening you go back 30 year, only one time in the '70s did it get through that so i think at one point that's going to flinch, and i think that will be the big inflection point. i find it more challenging to trade right now. my bias is short equities. keep running into that wall of money. and actually retail again. you know, as long as the paychecks keep flowing and we have nominal gdp growth as high

as it is, it's hard to knock the equity market down and so i've been short, short and wrong equities you know, in fixed income, i sell it when there are rallies on crypto, we're still on a lot of crypto. >> you think we've seen the worst of crypto? some say we're going to look back and see that crypto had the worst quarter ever in its history. >> i certainly hope the second quarter was the worst quarter we've ever had it certainly was a bad one it's still down 50% on the year. so go figure we had a force d leveraging that happened because of a lot of imprudent credit policies at lots of places that i think exacerbated how bad the move would be and that worst is over there is no more forced leverage that's going to happen so now the market hits in

equilibrium and we have a big, big deal coming inn ethereum. blackrock announced they're going to put crypto on aladdin it didn't get nearly enough press. it's connecting in almost aever institutional pool of money for the act tbility to buy crypto it's not going away. so i think bitcoin remains a pretty good asset. >> what do you make of what seems to me, and i don't know if we lay the charts over each other, baut an almost direct correlation to meme stocks with

crypto and bitcoin >> one of the things that has surprised me is the monster resilience of retail and i think what people missed on that was this idea of nominal gdp, right retail, you know, they get knocked down, but they get back up again you're not going to keep them down and you see people in those stocks again, but you see retail continue to come back in crypto. and not just in the best of the crypto names i thought okay, we're going to see this big differentiation in ethereum and bitcoin and some of the names that don't have as much technology going for it but, you know, retail's strong period >> and that only changed when unemployment is ticking higher >> i think when people have less money in their pockets, a lot less, and that's when they lose their jobs >> in terms of crypto, mike, i got to ask you about coinbase.

we haven't even seen the notion of decompression play out if it's going to play out and i think maybe that's the next chapter in the crypto e exchange book. do you like this >> coinbase has 100 million users. to have done that in ten years is kind of miraculous, right they built one of the larger retail businesses built in america in a long, long time you compare it to fidelity you add 100 years to build their 30 million accounts. that's an asset that i don't think should be discounted they have a cost problem if you look at their numbers, their revenue was down some, but their costs are really high. so i would assume brian and his board are pretty focussed on getting costs under control. and so i'm not as pessimistic couns coinbases a the numbers might

have been. >> last question, what is the highest conviction crypto trade you have on right now? >> right now it's ethereum it's moved a lot but their mis merge is a big del it takes the mining that used to sell and lock it is it up in long-term contracts. i think you'll see it really shift. that was the enthusiasm that this merge finally happening is going to continue to draw money into ethereum. >> always great to get your thoughts thank you. mike novogratz >> thanks so much. coming up on the other side of this inflation data that could move the markets in a very big way. we have an expert panel ready to break down the data and tell you what it means for your money but up next we're going to talk digital ad spending and

quarterly results with the ceo of iac they own more than 150 digital products and brands used by people all over the world. we'll have that conversation in just a little bit. and a reminder, when you are on the go or even right now, you get the best of "squawk box" in our daily racuted pod. it is the show and so much more. we're coming right back after this

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well come back to "squawk box. we want to get to julia boorstin who swoins joins us with a special guest. >> we're joined by joey levin. joey, thanks for talking to us ahead of your earnings call coming up in the next hour >> hey, julia, good morning. j i . >> i want to start off with, it seems like you're seeing a disconnect between the consumer

and business spending. what are you seeing? >> that's right. the advertisers pulled back. corporate spend pulled back pretty quick le, really in june. but we're still seeing the consumer spend q we can see that at mgm. we're publishing a lot of content and users are tran-sac transacting. they're willing to spend on experiences and on thing but the advertisers seem to have pulled back a little bit and corporations also we see in our business where they're hiring, you know, hiring has pulled back a little bit and that happened pretty quickly, and we think ahead of any reduction benefit is over. >> i'm going to ask more about advertising in a bit but i want to return to this question about the consumer and how the impact of inflation and

so much macro economic uncertainty is playing out are you seeing it play out in terms of anji and how people are thinking about investing in this homes? is that a different kind of category with the pull back in housing market? >> that one is really hard to tell there was so much spend on people's homes a year ago today. it was a peak there. people spending time in their homes. the spend on the homes was enormous so that has come back. it's not clear that that's come back because people have less money to spend it seems hike like that's come because people are spending money on other things ms in the publishing business we can see interest in things like finance and home has come down, where interest in other things has gone up, like travel and we can see that spend in travel so we think that's more of a shift. the other thing that happens in

our angi business, as consumers spend less on their homes or doing less work on their homes, the service categories from more eager to find jobs on our platform, so spend on professionals goes up to counter balance that >> interesting so more supply on the people offering to work side. shifting over to the digital ad business you did see a decline in dotdash meredith in that business. and i know as meaningful peaiec 17% of your revenue. lay out how you're trying to transform that magazine business >> overall ad rates we think are down somewhere in the neighborhood of 5% to 10%. there are still plenty of people advertising. it's just where they're

advertising is different auto makers not advertising so much given the supply constraints there. travel folks advertising again it's a pretty wide mix what's happening, though, at dotdash meredith specifically is we took on an older print publisher. and they had a tremendous collection of brands, better homes and gardens, food and wine, and these brands now, we've moved to digital first that means we've moved them onto the dotdash platform or in the process of moving them onto the dotdash platform and what we expect to happen in that is that traffic will grow over time. and we've done that a few times over other properties. and early signs on that are very encouraging on what we think is possible there >> well, joey, i wish we could

continue this conversation longer i have so much more to ask we've got to get you back to talk about theis expected doj lawsuit against google we are out of time this morning. >> love to do that coming up, south carolina senator tim scott joins us to talk inflation, the chips act and more plus, we are just a little over half an hour away from the july cpi report l ing you instant reaction from our panel when it hits. this is cnbc because you've got the next generation in global secure networking from comcast business. with fully integrated security solutions all in one place. so you're covered. on-premise and in the cloud. you can run things the way you want - your team, ours or a mix of both. with the nation's largest ip converged network. from the most innovative company. bring on today with comcast business. powering possibilities.

good morning 30 minutes, and yes, we are counting this down this hour we have new consumer fla inflation taydata, and we waitig for markets to make a move meanwhile, elon musk unloading millions of shares of tesla for billions of dollars. he says he's done selling. do we brieelieve him is the question we're going to ask senator tim

scott why the de-inflation bill will hike taxes. the second hour of "squawk box" begins right now good morning, and welcome "squawk box" here on cnbc. we're live from the nasdaq market site in times square. i'm melissa lee with andrew ross sorkin becky and joe are off today. we are setting up so far higher, but a lot can change as for treasury yields, we've seen a little bit of a climb higher by a couple basis points. ten-year note now at 2797. and the two-year note at 327 let's get back to the broader markets as we countdown to the critical cpi data.

a lot's going to change, mike, in a half hour >> wo >> you would think the market has told itself into a neutral spot, hesitating over the last several days right below levels that seem to define whether this was just another bear market bounce everyone's been focussed on the early june highs we came up against them, didn't quite get there. i also point out the level we were at before the first federate hike. a this is why i think the market is kind of got its weight on both feet here in case it can pivot one way or the other, even though today's inflation number's probably not going to be the clenching argument about whether inflation's headed away soon a lot of conversation about the way the curve in the treasury yields are inverted.

twos to tens, three months getting very flat. here as how it happened. we often look at it as one line of the curve not too par fromfar from the hia couple months ago. since early june, german ten year is down like 1.8 to .9. people worry about a slowdown. and the market says either the hard way or the easy way, rate hikes are likely to be reversed within this window that the two-year rate covers, whether it's because inflation has been tap tamed or we do get a recession this is a cutesy consumer versus the gas prices type of chart here and you see the dollar tree has nosed ab

nosed above over the last one year what's happening bee low the surface. jobs are great, as just a little bit of permission to hike more aggressively >> the ten-year yield, trying to decipher what that's telling us. the decline in ten-year has allowed a lot of this market rally off the june lows to happen at the same time, it could forecast recession concerning ahead, which obviously is not good for the stock market. >> i think there's no doubt that at least it embeds some higher probability we get pa recession within the next couple years but i don't think of the bond market as being some kind of collective parlor game of guessing gdp

it's mo it's not about guessing gdp. it's telling thyou that one wayo the other, we're not going to be in super high inflation or the fed's going to be in cut mode within the next year to year muss >> mike,ithin the next year to muss >> thin the next year to year m. >> mike, thanks. >> a lot went wrong this spring for coinbase it was profitable a year ago during the bull market revenue is still very of tied to crypto trading activity was down about 64%. from a year ago, it lowered guidance for users and warned of

slower trading rovolumes to com. coinbase executives say they still plan to spend to grow and compete. i sat down with cfo alisha haas. she says they're focussed on areas behind trading while trying to build more credibility on wall street >> i think we gain trust with investors. this is the first public sector that some have been through. we've been through four. so we need to earn their trust so they can see we are making the right long-term bets but we are looking for through-the-cycle investors, and we are not a quarter to quarter company. >> haas says it's keeping institutional money on the sidelines and casting a shadow on the company as well as the broader perception of crypto

>> did you get a sense from her, she's not making a call on what's going to happen to crypto broadly. if you believe the mike novogratz view of the world, it doesn't seem like it's going to be a rocket ship anytime soon. do you think they have the same view >> i asked her about that, because their revenue is so tied to crypto markets. it's a volatile business, but it's really hard to forecast she said some of the micro factors within crypto, she said it needs to be a little more useful for things like payments. nfts have to be ticking up there are things to be done in order for things to turn around and build enthusiasm but for they're saying q3 is going to be just as slow as this quarter. they're not forecasting any kind

of rebound anytime soon. >> kate rooney, great to see you. great reporting. coming up, the inflation reduction act. we'll ask tim scott why he claims the bill will raise taxes on generations of americans. we're standing by for the new cpi numbers omfr the government. stay tuned, "squawk box" will be right back businesses have to find new ways to compete in order to thrive in an ever-changing market. the right relationship with a bank

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welcome back to "squawk box" this morning the house of representatives expected to take up the inflation reduction act later this week after the vice president broke a 50-50 tie in the senate our next guest voted no on the measure and say it is will spend money we don't have on things americans don't need joining us to talk about it, tim scott of south carolina. a new book is out, called "america", a redemption story. and we want to thank you for joining us this morning. >> thank you >> tell us your ration ale for saying no to this bill >> it's pretty easy.

an inflation reduction act that doesn't reduce inflation, should tell you it's very curious what's in the bill when you're going to spend $80 billion of the money raised for the irs, which will make the irs bigger than four major departments in the government, that's probably bad news for the average american, according to the congressional budget office. 90% will come from those making under $200,000 the tax credits go to people making $300,000 plus people making under $200,000 will be paying for tax credits for those making over $300,000 that's the wrong direction for any piece of legislation you look at the tax increases. as a small business owner in a past life, so to speak when your taxes go up, those are head winds for wages tincreasing for your employees

and benefits as well >> the inflation reduction act, the proof will be in the pudding if the name comes out to be right. but i would ask, there are things in this bill that would help some of your constituents medicare recipients with prescription drug coverage that would, that would be deflationary and would be a help to your own constituents, no >> there's no doubt that when you cap expenses in some place you're going to increase expenses somewhere else because the $100 billion that it will cap out at is going to be paid for by a loss of research and development for our pharmaceutical companies, which means you'll have to wait longer for new drugs to come to the market there's no doubt that for the person receiving the benefit, it's good news the question s what's the price of that good news? and we don't

have that discussion very often and certainly haven't had that discussion so far. one of the thing i write about in my book is understanding those living in poverty and what they face. when we have that conversation holistically, i think we're in bet better shape when we just ask for something up front and not understand the long-term cost on the back end, sometimes we make wong deci wrong decisions. >> you have talked about the importance of law and order and enforcing law and order. and the reason i raise it in this context is in the world of taxes in america, there has not been a lot of enforcement going on across the board. i mean, i think no matter how you look at it empirically, the irs has been gutted. the chances of getting audited today are very slim, and as a result, we have a lot of people clearly cheating the system who

should be paying in. rather than raising taxes we arguably should be finding a way to enpourforce it, why are you against that >> i'm not against at the presepr it, you about i want to ask your viewers, do you want the irs coming and searching through your files if you want the irs coming to focus on small business owners, 90% generated by the new agents will be focussed on people making $200,000 or less. let's not pretend this is something that it's not. what president biden and the democrats said this bill would do is focus on millionaires and billionaires that is patently false, according to the non-partisan, congressional budget office. it's one of the reasons why, if you read through my book, i talk about the necessity of fairness.

this bill will be negatively received and negative impacts on the poorest americans, middle income americans, the job creators in our country will see headwinds that they do not have today, and that's already in an economy with 9% inflation and only a 5% wage growth, which means you have less money in your pocket because of the government >> look. i think we all want fairness the question is if there's some people that are cheating the system, how would you otherwise enforce it is the issue the amount of money that's being given to the irs? would you, would you give the irs any new money? >> actually, when we were in the majority, we did give the irs more money without any question. so the question is not whether or not the irs needs more money. the question is whether they need 600% more money the answer is no anyone who suggests that the irs needs an $80 billion increase to be able to do their jobs, they're just living in an alter mat universe

it's not something i would ever support. we need a government that is responsive to the needs of the citizenry, mott onot one that as the american people with more regulatories placed on small businesses it's one of the thing i find reprehensible to finding the revenue generation necessary to pass the climate part of their bill the flaipgs part of the bill was caused by more spending, and now they're going to spend more. that's ridiculous. >> tas it relates to fairness, and it is a major point in your book, how do you feel about carried interest it was one thing taken out at the last minute at the behest of senator sinema >> i am not sure how it's

written, i'd have to go back and reread that portion of the bill since it was taken out i have no idea what they were trying to accomplish other than eliminating it, and that's what senator sinema did >> what's the message that you're trying to get the public to understand about the way you think about this country. >> i think the truth of the matter is that america is the answer, not the problem. one of the things that happens so often in current society, andrew is that we tell one part of the ledger, if you're on the red side, you say this if you're on the blue side, you say that my approach to writing the book was to bring all of us together. realizing that there's been tremendous progress and there's still progress that needs to be made i created opportunity zones, because as a kid that grew up m some in something like a toounts zone

i wanted more in our neighborhoods. i talk about lacking access to the american dream as a kid and what that does to your soul. so i try my very best to tell my story and america's story about how we've had pain and opportunities. failure and tsuccess. this is the greatest nation on ea earth. it's our responsibility to make it greater and i thell that story in my book >> when people say they look at this country and they say we are in trouble that they look at where we're going relative to china, and they think we're in trouble. they think about our democracy, and they think that is under threat they look at the gerrymandering that goes on in this country, they hock at look at all these n don't have the hope and optimism that you do. what would you tell them

>> i would tell the average person who feels hopeless to read my book one of the reasons i'm optimistic, growing up during the carter years i experienced really high inflation. 30% unemployment for african-american teenagers at that point in time i understand what that hopelessness feels like. i lived through it, and i want to show you a way out of it. and i would tell the american people, the three most important issues that they face. bad economy, high inflation and high gas prices. we can do something about those issues and part of the conversation i have in the book is how we can be hopeful even in the midst of challenges. the beauty of america is that we are resilient. we became resilient, because we overcame the obstacles in our way and we turned those obstacles into opportunities >> senate aror tim scott, we ve

much appreciate you joining us we look forward to talking to you begin very, very soon. coming up on the other side of the break elon musk saying he's done selling tesla shares plus july cpi inflation. the big number of the morning. we are now just a few minutes away from that hitting the tape. we will haveurye o es on that and the market stay tuned you're watching squawk on cnbc

coming up, breaking economic data, july cpi is next and our guests are ready to tie secr dissect the latest read on inflation.

welcome back to "squawk box. we are standing by for july cpi data in just about two minutes time let's bring in our expert panel. and our very own steve liesman and rick santelli. what are we looking for in >> some relief in the headline, but not in the one that matters, which is the core price. it's supposed to go up, and what's driving that is services and housing. housing eventually, services still has price increases to process from wage gains. >> jason, i think you called it

inertiale inflation and maybe it's poised to go i hhigher my worry is that the parts that are hard to get rid of are the ones that have been rising >> you are seeing futures creep a little higher. i'm wondering how you are positioned for this and what you anticipate >> we've seen over the last couple readings that they can go very much against what market's expecting. going mo going into this, we have a lot of momentum. doesn't mean i'm mutual for the next six or seven months for now, i think it's mutual >> what is good news in your

view is this a no news is good news, bad news is bad news >> no, i think good news is good news we look at the year over year, but the fed looks at the month over month number. that would be .2 on the headline and .5 on the core we could see some of the month over month numbers come down that is correct would be a positive >> rick santelli, what do you have >> on the headline, expected up .2 of 1% for our consumer price index, unchanged double goose eggs, zero. and last month, up for the highest level since 2005 if we look at ex-food and energy, and less than the half of one percent anticipated, the

high watermark here, folks, go all the way back to april of 2021 when it was up .9 of 1%. year-over-year, up 8.5 this is the one i was a bit nervous about in the rear view mirror it was up 9.1, the highest since 1981 8.5 brings us back to levels we haven't seen since just april this year. and ex-food and energy, up 5.9, expected to be up 6.1. it equals our last look. high watermark was in march, the highest since 1982 if we look at what's going with interest rates, this he are falling, falling, falling, and for a change, we have a bull steepening going on.

bull steepening, meaning prices are rising, and that's pushing short rates down almost twice as fast as long rates but all rates are going down we're down almost 16 basis points in a two-year we're down about ten basis points in a ten-year and it underscore the fed, by its very nature of ill forecasting success is reactionary. the market's not, and the market continues to do what it's now done for weeks and weeks, and that is long rates are moving down it believes that transient ultimately will be the correct word the problem was the time frame melissa lee, back to you >> what a run down in a nutshell, cooler than expected across the board versus consensus estimates which tending to lead credence to the notion that the fed could pause? we're seeing futures rise very sharply. rick had mentioned the decline, the sharp decline we're seeing

in twos and tens we're seeing a sharp surge in the futures. the nasdaq looking at 320, s&p up by 72.5, and the dow up more than 400 points. what's your reaction >> we did get the pomp and service that i was concerned about. the proxy for housing costs rose actually more than expected. up 0.7%. services less energy up 0.7% that's a big part of the index and they're rising fairly quickly. there's a little falloff in the energy prices. i think the market is right. this means quick reaction. i'm not sure the fed can do 50 on the back of this. they still might do 75 but it could suggest some attenuated rate increases. jason furman has an interesting piece with which i somewhat disagree and it's going to be also important for the federal

reserve. it's a bit of a wonk eye wonky conversation >> the next fed meeting is a while away >> good point. >> there are things that can happen between now and then. but for now it looks like things are cooling. maybe the fed can sort of take its foot off the gas so to speak. >> yeah, look, this is a much better report than i expected. i'm seeing a headline number of 0.0 is exciting. there's more reductions in gasoline that we're going to see when we eventually get the august cpi-2. some of the things like owners equivalent rent and rent, they

did tick down a tenth. both of them, i thought that was good news. goods prices were still up those could easeily be flat or start falling at some point. i never try to take in too much from one month's data. for the last three months, the core cpi is still running at an annual rate of 6.8%. this could easily be the false dawn we saw in september 2021, but for now, you know, i'll take it as a tick in the good direction. >> for now, victoria, could this be an extension in. >> it might mean that. but i'm curious to see how the markets play this out for the rest of the day. obviously we see this knee jerk resax reaction

year-over year-over-year, it did not come down for core cpi. and the fed has talked about wanting to see that month over month and year-over-year come down i really don't think the fed's going to look at this and say okay, great, we can take our foot off the gas and slow down here, i don't think they're ready to make that decision yet. as you mentioned, there is a lot of data left of about the next meeting. the next cpi number i think is going to be even more important. it's going to tell us, are we going to start establishing a trend, even though two months doesn't make a trend are we going to start establishing that, or is this more of a one-off, and we're going to stay right around where we are it's that sticky component of inflation that follows wages that follows rent that is so important here and i don't see that changing. so i'll be curious to see how this actually plays out over the course of the day. >> viktoria, real quick hely, to

the extent that the fed needs to see several months of stable or declining inflation, at least maybe we can start counting now if this continues. >> i think you're right, steve this could be the start of it. this could be the peak inflation. i'm not sure we get a straight downhill ski moment here but maybe we start to level off, and that means maybe 50 basis points instead of 75, but i certainly don't see this turning into a fed pivot at this point maybe it just means they don't go quite as fast >> let's play this out then. if this is peak, but we see it remain sticky and maybe flat, stephanie, how do you view that in for the consumer, what we know that the fed has said is unemployment will tick higher. consumer also start losing their jobs outer that. they will be faced with inflation. how do you process that scenario >> well, that's why i always look at the year-over-year number from a consumer point of

view inflation is everywhere. i don't care if it's 5.9, 5.1, 6.5. it doesn't matter. it's still high. and wages are up 5.2%. everyone talked about rents. that's up, right and unit labor costs were up 8.1% the core pce is 4.8% oo even if we're at peak we need more months for the core to come down but at the same time the consumer still feels pinched. as of now people can get a job they can get a job and make more money. >> packaged bread prices up 15% year on year frozen pizza is up 18% year on year >> the woman at our local chinese food restaurant who i talked to yesterday said she used to pay $50 for 250 of the white boxes that the rice came

in, $69 now. >> wow >> and tuna was $16 for the sushi. now it was $10 for the sushi, now it is $16. >> it is here. it's everywhere. i'm wondering if this print changes your view of inflation, of the challenges that consumers face, the challenges that corporations face. we've seen already it play out in second quarter earnings as well as modest revenue growth and deteriorating margins. >> no, i don't think it changes the picture. it clearly is a good number. and if you were to get a series of those prints from the federal reserve it means they can potentially slow down that pace of hiking. this is the breadth of inflation at the moment is very, very significant. wherever you look, there will be strains on household budgets, and certainly for corporates,

given that wage grote is significantly high, it means that they are going to be under pressure as well the picture is still one of weakening growth if the fed is going to continue with those rates it is still a very difficult environment ahead of us. >> i'd like to hear rick's thought on that. >> rick? >> what? well, my view is pretty easy i've listened to the markets versus the stral central bank. the fed is locked into this political game where they have to be a certain way regarding inflation. they're never going to let you know that they breathe a sigh of relief behind closed doors it doesn't work that way but in the end, i definitely think that there's very little doubt that inflation has peaked. but i also think there's very little doubt that the average middle class worker is going to

have a tough time. and believe me, jobs are going to get so much tighter all the anecdotal evidence is pointing that way, and that anecdotal evidence will become a hard reality over the next three or four jobs friday. using inflation as the reason, it's fine with me. but in the end, it's still going to come down to the same issue that government policies and spending are going to come back and haunt us and the things that the government is pushing like evs are not going to help in prime time and that's going to make all the energy uses much, much more expensive. >> i'm seeing the fed probabilities of a 50 or 75 flipping now >> i guarantee fed futures are rallying

>> rallying means that the price is going up. the yield is coming down just so everybody understands. i'll tell you what i saw, and i always like to have you back me up i had a 67%, 68% probability of that basis point going into this, i now flipped, a 62% chance of a 50 when i look at the high-watermark, it was 360 other i see 340. 20, 30 basis points have come off of that. an easier fed is essentially what the market's pricing. >> and hence the rally that we are seeing right now dow futures are up 443. nasdaq up 335. would you an agree with the fed funds market is that the path you think the fed should take? do you think the markets are right? >> they'll have more data before it, but if i had to decide

today, i think i'd till want to go with 75 basis points. the data we got after the last meeting showed compensation costs were growing a lot productivity is very noisy, but that shows firms have yet to fully pass through the prices, the wage increases that we've seen the last jobs print says that the labor market is not really at risk from a higher fed funds rate, so i would tend to be at 75 if i were sitting over there but i'd also be keeping an open mind and looking at the next two jobs and inflation prints, and by the way i think it's healthy that all these different options are on the take for ble for thet meeting. it's a very fluid economy and a little bit complicated for all of us, but the fed needs to be fluid with it. >> without having a massive productivity wonk discussion here >> this guy, he's trying to.

>> look, i know what you wrote yesterday. first half productivity as having been down a negative. look at how much gdp each worker in this economy is producing, and we are producing more gdp with our workforce being equal to where it was in march 2020 than we did back then. there's more gdp per worker. that tells me workers are more productive than they were, and that's outside of the noise of the last two quarters of gdp and productivity data. >> oh, no. workers are producing more today than they were two and a half years ago. and the pace of the increase has been a little bit lower than usual. the more important thing is unit labor costs, how much you pay your workers, minus the productivity growth that you don't need to pass through to prices that has actually been running

higher than price growth and that says we may not have seen, yet, the full price pass through of the very large wage increases we've seen that's one of the things i'm worried about for inflation. i think the wage numbers are a more reliable guide, but, again, today is good news everything today is on the good side of the ledger it's just one of many data points >> we've been tracking sectors faang stocks showing strength. if you had to place your bets here, how will we close? we're priced in for a rally on this notion that the fed could do 50 instead of 75 in september. how do you think we close the day in how do you think the market message change, maybe, as we digest? >> i think as you digest the data, the market's going to rally further. this is a positive number.

people are going to go away with this saying look the country is strong i think reality starts to set in within a month or two when actually the decline in inflation is very, very slow but certainly for today, this is good news. >> same question to you. >> i'm looking at the dollar, and the dollar's coming down, which is a good thing. one of the themes this earnings season is that currency has really hurt the multi-national companies. so the extent that the dollar continues to fall, that's good news but in terms of the market rallying today, okay, if we're going to do 50 versus 75, that's fine but it's still 50. they're still tightening and they still want to be over neutral by the end of this year. we need to not be too euphoric about the number and focus on stocks, fundamentals and where companies can deliver. >> but the issue, stephanie is

the pricing in of a soft landing or not i'm with you and victoria and jason, which is don't take it too far, but if you're placing probabilities on a soft landing, you have to say that they're a little bit higher this morning i don't know that they're past the 50% mark i think larry summers would be laughing at us and thinking how dumb we to even entertain that idea because he sees the funds rate going to 5%. >> priced a little higher. >> fair enough, i'm going to leave it nebulous like that. i'm just saying, it's got to be a little bit higher. the idea that maybe we get out of this without a major recession, without a 4% or 5% funds rate >> i was saying after last week, we got a lot of good data in terms of jobs and new orders in the isms i was saying it last week. i felt a little bit better about a softer landing but the inflation picture. non-farm pay rolls and the new orders numbers for ism, that's a

leading indicator, right and the prices paid intdex fell there was a lot of good last week i don't think we're seeing a lot of recession between now and the end of the year. 2023, there's a lot more risk in my mind, of a recession. >> rick? >> yeah, i'll tell you what. there's some things i disagree with here. first of all on the dollar listen, we're all investors to some extent if you have 401(k)s. i get it multi-nationals are important, but i'd rather like the strong dollar for us, for the consumer, within the borders of the u.s. at a time when everything's getting more expensive it's a great gift that the dollar's allowing us to purchase some of these imports with a strong dollar and obviously hurting those outside the country, so be it. and what's going to happen with interest rates and jobs, once again, remember, the fed is

reactionary. and by time, everybody on this panel agrees that the market was right a month ago, the horse is going to be out of the barn for investment opportunities >> rick is 100% right about the dollar by the way. as a country with a major trade deficit, we are by definition, beneficiaries of a strong dollar it's a place where there's tremendous dissonance between the earnings of the major s&p companies. it's bad for the companies, but it has to be, by definition, good for the country to have a strong dollar. >> again, we are seeing, we are priced in right now in terms of the futures for a rally across the board, and perhaps in one salient, look at arc it is higher by 3%, and amc holdings is up by about 5% that just shows you. thanks to our panel. thanks to you all, a great

discussion andrew >> thanks. let's get down to our pal at the new york stock exchange. jim cramer joins us now. what do you think of this number has the train left the station >> look, good is good. j. powell so far is doing a great thing. a lot of the numbers have come down energy's come down the price at the pump' pump, travel has come down, what more do we need? i listened to some people on the panel, and they make it sound like the number was actually a bad number we obviously have peak inflation. i think oil has gone lower since. the auto numbers have gotten worse. there's a glut pretty much everywhere in the system, which is causing price cuts. so i don't know, this is probably my fourth attempt by the fed to get things under control. this may be the best one i think jay powell is doing a really good job. >> what do you think, though, jay powell sees this numbers, and does what next month >> he still raises, because he

wants to be sure he wins he does 50, not 75 >> you think it's 50, you don't think it's 75. if he does 75, what happens? >> well, then people think he knows something we don't and things must be much worse, and i don't think he does. there's no reason to do 75 these were gigantic rate hikes. >> i love larry, you know. can we move on from him? i think what matters here is these are the numbers that jay powell wanted. he's widely ridiculed by people in the media and fund managers, and i find it repulsive. >> how much of this is a function of we're actually having the markets work in the context of supply, that's what's bringing down some of the inflation -- >> we haven't seen anything yet in terms of decline. it's going to get much worse. >> then the question is, does it flatten out? >> no.

i mean, remember housing is so%, it's about to really roll over used cars are about to roll over tell that to hertz everything that goes into a house is going to roll over. the big box retailers will roll over what do people want? there isn't anything now that's strong don't they read the research there's no companies doing better than we thought none name me one company where you actually raise numbers certainly nothing on the board that you're showing right now. if they're more granular, they would know no company is doing well right now we'll talk more about it tomorrow >> i've known jay for a long time he's not anything but a lightweight. >> i'm not saying that >> how did -- check. mate >> jim cramer never one to hold back we'll see you in a couple

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most stocks, dom, are moving on the data. >> let's hone in on three parts of the market that have been of interest inflation easing a bit more than expected means that maybe consumers get more money in their pockets to spend on other things one of the things you're seeing is a little more movement to the up side in terms of consumer oriented stocks. caesars entertainment, booking holdings, all up between 2 1/2 and 4%, and etsy and tapestry showing some life as well. also, as interest rates have fallen on the heels of that softer than expected inflation data, that is helping some of the growth oriented stocks, especially ones that have been beaten up. tesla is up more than 4.5% meta platforms, netflix, those names are all up between 2.5% and 4%

one of the places to watch is the chip stocks. we noted earlier they had fallen precipitously. now they're all catching a bit, for nvidia up 3.5% all among the chip names getting a bit of a bid we'll keep an eye on those, the interest rate story will be interesting, just because we don't know whether or not it's going to stick it went from 2.8%, by the way, right before the number to about 2.67 on the lows right after the number came out. we'll keep an eye on that. >> dom, thank you for that we should also say a new filing out that elon musk sold close to 8 million shares of tesla stock over the past week on twitter. when asked if he was done selling, musk replied yes, in the hopefully unlikely event that twitter force this is deal to close and some equity partners don't come through, it's important to avoid an emergency sale of tesla stock. joining us to talk about that is

gene muenster. on this number we just heard, i'm curious what you think does it make sense >> it does make sense. i think back as a tech investor, the last six months have had many sleepless nights. the reason is about twice a month there's been high anxiety points around the cpi number and around the fed this was obviously a step in the right direction, but the other piece on my mind, over the next month, we basically have a coast is clear for these high multiple stocks, assuming nothing happens with china i think that is a marked difference we've been heavily in cash here, and we'll probably be putting money to work in the weeks ahead. >> gene, real quick on musk. it looks like this isa better chance that either twitter gets a deal, renegotiates a deal,

that maybe musk has gotten religion he actually has to do this deal. what do you think this is? >> i think the odds this happen is now above 50% before i would have put it at about 10%. just stick to what we really know a lot of this is guessing. what we really know, number one, elon doesn't want to buy twitter. he's referred to being forced to buying it. and second, ultimately he is preparing for that outcome so i think that that is telling. i think this is negative in the near term for tesla. i'm surprised to see the stock doing what it's doing today. ultimately it's not about the twitter deal ultimately i think this is more about tesla delivery numbers, but to put it in a nutshell, the probably of this happens goes up elon doesn't want this deal to happen. >> you're looking at twitter stoic up a little other 3.5% gene, great to see you this morning. thank you for joining us

a quick final check on the markets. we're in the green across the board. things have moved up materially. dow up about 411 points, nasdaq up about 300 points. melissa, thanks so much for hanging out this morning. >> see you tomorrow. >> see you tomorrow. make sure you join us all tomorrow "squawk on the street" begins right now. ♪ good wednesday morning, welcome to "squawk on the street." i'm david faber. he is jim cramer we are live from the new york stock exchange carl has the morning off let's give you a look at futures. they changed a bit since we got the cpi number they're up even more let's get to our road map. it starts with the slight easing in inflation as you saw, as a result, futures are surging. plus we're going to talk a bit about elon