streaming guidance is raising red flags. and spending to taxes. new data on what americans think about what is going on in washington it is thursday, august 11th. "squawk box" begins right now. good morning welcome to "suebquawk box" heren cnbc i'm melissa lee along with andrew ross sorkin becky and joe are off today. s&p is looking to add up to 12 right now. nasdaq higher by 32. dow up by 124. a lot of focus on the nasdaq the rally yesterday lifted the index off the june low

new bull market? who knows. treasury yields. 10-year treasury is 2.77 we will watch the reaction to the producer price index economists are calling for .20% increase in inflation and rise of .4% as for currencies, we saw on the back of the cpi, the dollar falloff significantly on the back of it we are seeing continued declines in the dollar against the euro as for oil oil is below no, $92.92 on wti. brent is below $98. precious medimmemedals gold is down and in crypto, we talked about

ethereum ethereum up 3.5% today that is seeing a rally from its lows >> risk on as they say let's talk about the corporate story and see if there is risk on disney beating the top and bottom line. disney plus subscribers rising in the quarter and topping expectation. if you combine disney plus and espn plus and hulu, disney has 220 million subscribers. it gets it close to where netflix is and having said that, there are issues with the value of each customer specifically in india where the value of the customer is lower. we will talk about this in a minute other headlines from disney last night. a new bundle price with ad

supported version of disney plus which starts on december 8th it will be available for $7.99 a month. the price of disney plus without ads will rise 38% to $10.99. a $3 per month increase. one red flag disney lowering the 2022 forecast it expects the service to be profitable by next year. you can catch bob chapek on "tech check" today at 11:00 a.m. melissa. >> interesting, andrew, to see the ad supported model when the ad market is softening the timing is unfortunate in terms of the land grab for ads on the platforms >> i think there are two issues. how do you grow subs people will stop getting sub crazy.

people are going after subs is strictly that ad program and that number. maybe the lesson is as david says, we need to get paid. the price is how do you get paid for all of this? >> right >> i'm not sure. i'm not sure what the right answer is in terms of this is the consumer, by the way, stronger these days in terms of the subscriber or the advertiser i think they are attached at the hip. >> chapek, yesterday, said he believe there is is a lot of pricing room is the term he used of not seeing as much turn with the pricing increase there is a tradeoff, of course he sees there is more power to the disney brand and value proposition to extract price increase. >> you think where they are compared to netflix. i'm paying $20 a month for

netflix. >> $20 a month is netflix? really that's what i'm paying >> i'm at 20 one of the higher ones because we stream a couple of things from different devices >> it's getting up there that's for sure. much more on disney later on in the show. let's get a check of the overseas markets with joumanna bercetche live from london >> good morning, melissa global markets taking cue from wall street. risk on tone prevailing for the most pafrt shanghai composite up 1.6% points car sales up year over year. hong kong is up 2.4% taking the cue from wall street with the performance in tech stocks yesterday nikkei is the exception. down a fraction. in europe, a bit of a mixed picture. you see actually a lot of the

indices trading under the flat line ftse 100 in uk is down .30%. gas trading at the bottom of the index. heavy selling day for pharmaceutical names gsk and halion coming under pressure over potential litigation over a heartburn drug cac 40 in france is down .10%. similar in germany siemens have taken a charge on the energy business. that is one of the under performers and the likes of selling pressure that is the picture for european markets. more mixed than what we had in wall street yesterday. >> okay. joumanna, thank you. let's talk about other stocks to watch this morning look at sonos. sales under pressure the company breaking even in the

quarter. analysts looking for a profit. revenue below forecast cutting the full year forecast in the face of economic challenges sonos' cfo plans to leave at the end of the year. bumble trading lower the dating service is cutting ad revenue forecast after rivals tinder and match with baidu which is popular in western europe that has been hit by the war in ukraine and separately, the travel sector as well. shares of vacasa raising outlook amid a surge in demand the company with a surprise quarterly profit travel stocks down year to date. they he ave seen a big pick up

last month airbnb up 20%. marriott up 17%. intercontinental up 16%. melissa, we have to travel >> i have to travel. you have been traveling, right >> i have done some traveling. >> good for you. >> airbnb with a gain in yesterday's session. coming up, if there was ever any doubt about yesterday's rally, rally shows how closely investors are watching inflation data we get you ready for the producer price index next. before we head to break, look at the biggest pre-market winners and losers stay tuned you are watching "squawk box" on cnbc

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welcome back to "squawk box. futures indicating a positive open looking to extend the rally from yesterday's session with the softer than expected cpi data. joining us is joanne freeney. great to have you with us. j joanne, there is talk the nasdaq is in a bull market because we're 20% off the low. what do you think of the

astronomical rise? you look at the etf and it was up 7%. do you buy into the bounce >> good morning, melissa nasdaq and tech stocks tailed off severely last november they built in the higher interest rate outlook and recession risk you know, we are seeing recovery from that. some of the meme stocks are back you know, we get retail investors chasing after the ones that sold off the hardest. that doesn't surprise me some investors recognize within that space there are some really good secular growth companies that simply got too cheap. whether amd or amazon or a broad comm for example it is good growth that you recognize stocks are cheaper than before and have multiyear growth mahead of them.

it is frothy in spaces. >> csheri, i wonder your view? a lot of the rise we have seen in the nasdaq is built upon a 10-year treasury which is below 2.8% for some time now >> thank you for having me you know, i think what is interesting about the nasdaq is i would agree with that in the short-term that the nasdaq is in a cyclical correction within the secular bull market. we are in one of the most powerful industrial revolutions of our time that got interrupted by a pandemic and amplified by it how we work in the economy. and technology will continue to lead the way that said and within a cyclical correction, you want to be

selective going forward. themes are in tact the fed will continue to hike rates. you know what is amazing, we are ten rate hikes in. we seem to be hitting peak inflation. 90% of s&p companies reported. 75% beaten or met expectation. we still have $2.5 trillion to go there are a few worries left that has to do with the fed overshooting or go into recession. obviously, geopolitical. you have to decide which camp you are in invest in what is working or continue to hold cash and fret about what you are worried about. >> which camp? >> investing camp. i'm always forward thinking of how to structure portfolios. the economic data and the strategists are good to say the climate we're investing in and

we need to move forward as investors and people sitting on cash are guaranteeing an inflation adjusted loss. it takes a lot to be in the market it is a volatile market. the anecdote is investing and being in the right themes and hel hedging portfolios and risk. >> i don't want to say treacherous, but tricky. joanne, when you think if we are already thinking the chances of the soft landing increased i'm not saying they are 100% they increased with the softer than expected cpi yesterday. we haven't seen the full effect of the fed recent 150 basis point hike once that hit, the byproduct of that should be higher unemployment and lower asset prices what environment are we in at this moment? when you look forward, doesn't

it get more treacherous? >> you know, melissa, putting on my economy hat for a moment. it is clear the fed actions take a long time to play through the economy. there is still a lot of uncertainty with the supply chain and other shocks that hit the economy. how quickly that inflation number will come down. clearly the recent print was a positive for that. you know, whether or not we actually get more unemployment and how high it goes is un uncertain. it is hard to tell for investors, you now, i agre if you are a long-term investor, you want to be in the stock market there are ways to build in resiliency to the portfolio look for income oriented positions. if rates go up more than expected it will do well if we get recession. i think it is important to have a portfolio that is inclusive of

growth names that have the cloud-oriented data center which we know will grow even if recession and also to have positions that offer some income whether it is the bank stocks or whether it is the real estate companies. that will give resilience to the portfolio or mcdonald's which will do well in any cyclical environment. i think it is important for investors not to get complacent about where the economy might go there are more rate hikes ahead. the fed is unlikely to back off just because inflation starts to go down, which they expect it to do they will need to see a lot of data before they reverse course. investors need to recognize that and make sure to add some positions in the portfolio for resiliency or look at things that have gotten cheap whether it is small midcap names. we have a strategy dedicated to that or international diversification to the portfolio. we have opportunities for that

as well. it is important, i think, to have a very diversified portfolio and build in resiliency because it is uncertain. a lot of debate going on how much unemployment will need to rise as the fed gets inflation situation under control. >> ladies, thank you j joanne and sherry, thank you. coming up, good news for drivers at the pump. we have details about that next. plus, get the best of "squawk box" in the daily podcast. you can listen to it anytime it is so much more than the squa ywkou know. check it out we're coming right back.

welcome back we got good news gas prices fallen for 60 straight days. the average is back below $4 a gallon could the price drops be short lived? brian sullivan is with us to talk about everything going on around oil and energy. brian, what do you think >> let's be sunnyside up sorkin and sullivan glass half full sunnyside of the street and sunshine and lollipops and rainbows $3.99 a gallon nationwide. first time since march that's good news for people. gasoline is incredibly regressive tax you pay the same, andrew, i pay the same a lot of people with lower

incomes pay the same california, of course, the outliar, special blends and taxes. in the south and midwest, price of gasoline is below $4. yay. now to the stuff you may not want to hear which is this the price of oil has kind of sneakily gone up, guys, by $4 a barrel in just the last couple days throw the board up it is back up -- look at that. up again over 92. this morning, international energy agency raised their oil demand estimates by 380,000 barrels a day to 2.0 million barrels a day. because power plants in europe are switching from natural gas to oil this seems hard to believe in 2022 we are going from gas back to oil. it is like coal and oil continue to see the huge surges

it is not a headline from 1922, guys, it is 2022 price of oil up $4 a barrel in the last couple days >> brian, we're trying to be sunny side up. trying to do the sunnyside up game glass half full. stay glass half full with prices increasing on that side of the equation, what is the expectation for the fall >> the bull case is a lot easier to make than the bear pace, andrew i'll tell you why. you have a lot of things going on number one, 160 million barrel release from the spr that's over. it has to be refilled. you've got travel demand assuming the consumer doesn't crash. it could come offline. you have been flying i have been flying every two days at the airport. they are mobbed. as long as consumer demand

doesn't fall off european sanctions fall off december 5th as well that is the oil going higher case oil going lower case is if we are entering recessionary or slowdown period. there was driving data gasoline demand data that cratered the oil market last week that data went back to where it was pre-crater yesterday when the data came out. it was one week where it showed gas demand may be falling, but the new data shows it is not look new jersey turnpike or wherever, a lot of people driving and a lot of people flying every plane is packed. >> it sounds to me a bull case in the temporary term. i never bought extra gasoline. do you keep gasoline at home

i'm starting to think i should go out at pick some up at $3.99. >> i do keep gasoline at home. it is not because i'm storing or hoarding gasoline, andrew. i have machines that are gas powered. by the way, i look forward to transition to electric because they are loud and they sound like leaf blowers. should you go fill up today, if your car is low, i would how about this melissa and andrew, if you want to bet $1 or coffee or lunch in person again i bet oil is back above $100 a barrel by labor day. >> that's a good bet >> i'm not taking the other side >> i don't want to take the other side i'll buy a lottery ticket as a hedge. how about that in brian's name. >> if yyou win, it stays lower.

i get to be the bad guy. >> i'll take it. >> all right >> brian, good to see you. >> brian the heel here on the show thanks coming up, from strong theme park results to streaming bundle plans. we dive into disney with the analysts as we head to break, the s&p 500 winners and losers >> announcer: executive edge is sponsored by at&t business at&t 5g is fast, reliable and secure ly! welc to our t bark-ery. oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic

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good morning welcome back to "squawk box" live from the nasdaq site in time squares the s&p is looking to be higher by 10.5. dow looking to open 124. nasdaq in a bull market. 20% off the recent lows. nasdaq looking at 20 points here at 9:30 a.m. eastern time with

the producer price index the 2-year treasury at 3.175 we'll take a quick break on the other side, we'll talk disney, andrew >> we'll talk lots of disney given the earnings report and so much more. figure out when you look at the disney streaming numbers and how you think about those relative to netflix and everybody else. when we come back, we will talk that and the cnbc investigation. cryptocurrency inn flew espeinn flew especialliers got paid and the best of the "squawk box" with the favorite podcast listen anytime we are back after this in a moment

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welcome back to "squawk box. score enough followers is a major money opportunity for influencers in the crypto space. we have seen it.

the cnbc investigation finds some online personalities get paid thousands some say the influencers are promoting frauds the amateur investors who pour savings into the venture is paying the price eamon javers has more. >> reporter: digital currency. >> ever a time to pay attention to the altcoin market is now >> the met th to the altcoin market is now >> the met tversemetaverse >> reporter: hyped on youtube. >> passive income. >> reporter: promoting the ventures dubbed crypto inn ff inn flew especialliers are racking up views. >> i'm officially a partner. >> reporter: our investigation found some of the promotions have left investors financially devastated some influencers cash in >> welcome >> reporter: ben armstrong is

the most watched crypto in innfluencer online. >> do you take responsibility for losses when they see a recommendation by you and go out and buy and it craters >> of course i do. i feel i hate it when we talk about stuff that didn't do well. bitcoin was 50/50 at that point. >> with 5.2 million subscribers and followers on twitter which is allowed him to earn more than $30,000 for a single youtube endorsement. >> i could easily makeover 100 k a month. >> reporter: that money encouraged others to swarm the market this spring, anonymous blockchain posted a list on twitter naming 44 youtube personalities and prices for paid promotions. we reached out to the

influencers to verify. some said the prices were inflat inflated some made a minimum of $1,000 for each promotional video unlike armstrong, some don't disclose they are getting paid to plug. >> not disclosing, that is a sure fire way to get in big trouble. >> reporter: joe rotunda of the texas state securities board says has seen paid promotions that are not disclosed, but pushed fraudulent ventures >> scams and frauds. there are more out there >> reporter: he and i a team of regulators filed against metaverse casinos by selling unregistered securities. the order says one inn flew especiallier said they he were paid through the youtube channel. one said another innone broughtn

>> we saw the promotion on youtube. we saw they publish at a rapid pace >> because it is so early, you have no idea what is real. >> that's right. >> when there is money to be made >> reporter: taylor was the product lead of meta mask and she is aware of the youtube personalities. >> i urge anyone, if they consider legit, to not form the faux partnerships. any pay for influence. pay for followers. >> reporter: that's a realization armstrong came to when he stopped producing content in january. >> it is a burden offme. i don't have to worry about these people i can say what i want to say it is a way to build your business you have to do it in an honest

way. >> reporter: armstrong says because he felt quguilty for promoting the coin that crashed, he used that money to refund viewers who invested in the project. the market cap is down 40% year to date and in a bear market and armstrong says the less i promoters will ghost people. flozen wasn't paid to promote the metaverse, but deleted the video after we started asking questions. the dream show did not respond to our request for comment guys, back to you. >> eamon, it is fascinating. question for you that i'm trying to understand. does this stuff actually work? >> reporter: yeah.

that's what ben armstrong said when i talked to him we went to atlanta we saw in the video he his set that he has. he has a youtube production facility in atlanta where he produces videos on this topic and other stuff as well. he says it does work largely because a lot of the coin promoters don't have any place to go. there are not a lot of palaces o advertise individual offerings they go to youtube the followers out there, he has 1.5 million followers, they look to the figures as respected guides to the world. they are taking the money and taking it under the table. >> my final question is there is an issue around the s.e.c. if this is disclosed as advertising. is there any criminality criminal fraud on the crypto and promoting it what is the liability? >> that's a really good

question i don't know the answer to that, andrew you have to imagine the people on youtube themselves are disconnected from whatever the fraud is they might not know that the thing is a fraud they might get a check in the mail and say talk about this it's great they go out and do it and there's a question if there is willful blindness. th th there. all of that is the regulatory question people are sorting out. >> eamon javers with the report this morning i appreciate it. thanks melissa. disney pos posted a better expected quarter last month with the earnings call. subscribers rising to 152 million users. joining us is analyst at boa jessica, great to have you they lowered the forecast at

chapek gave last year. from here on out, what do you see for disney they clear the biggest cloud and you are positive on the stock? you raised the price objective >> we raised to $144 we are so relieved it cleared the deck nobody believed the prior sub guidance of 230 to 260 million by fiscal year end 2024. it was made at the time they made the ipo indian cricket rights that was in that guidance. such low subs. financially they are not that significant. it was just a relief that there's a core disney sub guidance out there of 135 to $165 million by year end and up to $80 million in indian sub it reset a number that really isn't that meaningful. >> does it clear the bear market

that the growth is coming from the lower quality hot subs the average monthly revenue sub is $1.20 and u.s. and canada is 6.27 >> it really 70 cents. that was just an extraordinary quarter and expensive quarter. they had to pay for the ipo. it does reset the bar. the sub growth at disney plus was 6 million they don't hit the full content stride until the end of next year the sub growth is strong maybe more importantly they raised prices almost 40% in doecember, they heintroduce subscription service with a 30%

increase they raise prices for hulu and espn plus. there is a path to profitability. the sub numbers were great before all of this >> do you think there is more, you know, room for price revisions as chapek mentioned on the conference call? how do you think of the price increases at the time the consumer is feeling pinched from inflation? >> it's a great point. disney came out of the gate in 2019 like they were under priced they are lower than any other company. they really do have a very wide range of content they release movies, but as the movies roll through the theater, they roll the service and in addition, they are expanding despite the marvel and lucas and pixar and disney

they announced a bts movie, the k-pop band they are expanding so you get a lot for a still lower price than competitors. >> jessica, thanks for your thoughts i appreciate it. we have a programming note you don't want to miss the interview with bob chapek at 11:30 a.m. eastern time. andrew. thanks, melissa. coming up, president biden speaking after the cpi report saying the country had zero inflation last month and frank luntz calls that victory lap ridiculous and insult to the american people. he will join us when "squawk box" comes back to talk all about it opportunity is using data to create a competitive advantage. ♪ ♪ it's raising capital that helps companies change the world.

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i want to say a number zero today, we received news our economy had zero percent inflation in the month of july zero percent here's what that means the price of somewant to say a number. zero. received news that our economy had 0% inflation in the month of july. 0%. this is what that means. while the price of somethings goes up, went up last month, the price of of the things went down, by the same amount. the result is zero inflation last month. people are still hurting. but zero inflation last month. >> that was president biden weighing in at the white house of that yesterday. more on this inflation and related ministration's response, i want to bring in

frank luntz. >> it is orwellian and worse. the kind of job that i do as a language guy, as someone who tries to find the words and phrases to connect to the american people, but as a pollster, i know how much it plays into our belief that we cannot trust our elected officials and we cannot trust officials. been pulling this issue of the american people think it is harder now to make it and get by. more than 70% of americans have trouble making ends meet. one out of four literally have trouble paying the bills the end of the week or the end of the month because of inflation and for joe biden to attempt to define what that means is one the things that they should be angriest about. >> i do these presentations and

discussions and i am a proud contributor to cnbc. i seek the truth. when the american people understand, we have the numbers there, what it really is, right now, to put people on a plane, to have them attempt to put kids back to school and the know how expensive it is. the inflation rate is zero, saying that it's going to be one of those issues that we remember the biden administration playing games with the english language. >> so here's the question. there is an argument to be made that when there is good news, a president is supposed to tell you about the good news. i think arguably, this was good news. it is hard to say it wasn't good news. at least temporarily. we do not know what will come this fall or in 2023, but in an environment where it often feels like there is not a lot of good news, should the president not go out and say there is good news?

i think it's a little different than saying mission accomplished many years ago. >> then the inflation rate is zero? andrew, no you don't believe that. >> i'm not arguing that. what i am questioning is, is it the language that he used? is it that he should not have any victory lap whatsoever? how would you do it? if you are him? >> i would say that he has every right to say that it has not gotten worse. this month over last month. but to say that the inflation rate is zero is the height of hypocrisy and a president has a responsibility to tell the american people the truth. is it a success that after months and months and months of inflation getting worse that it did not get worse this month? that is acceptable. but to claim that the inflation rate is zero, to claim that orange we are not in a recession, is simply wrong and

-- >> i agree with you on the inflation. saying the inflation rate is zero, obviously, is inaccurate unto itself. the question about whether we are in a recession, though, is a more competent and one these days and i'm not necessarily taking sides, i'm suggesting, from a technical perspective, two quarters of negative gdp, you often times say that it is a recession. this is not your father's recession when you look at where labor is and employment is and it looks like a very different picture. a little bit more complicated? or do you think not fair. >> that is fair and it is more complicated. the difference, used to be that we focused as much on employment but, we have a very good employment record right now, but you still have people falling behind, who have good jobs, great careers, and they have less money to spend now and they had before, even though the got raises because of inflation.

and the fact is inflation hits every individual in every community in every corner of the country. it doesn't matter if you are middle-class, working-class, wealthy, poor. it is a tax on everyone. and when everyone is feeling the pain, and it is significant, for example, fuel prices. it is not what it was 30 days ago or 60 days ago. it is still unaffordable for so many americans. and you see that. >> i'm not disagreeing with you but let me ask you this and maybe the market is wrong and you know that's the difference between the economy and the stock market, there are two very different things. but something has happened over the past couple of weeks, as you have seen as the stock market has improved on the expectation, again, whether it

is right or wrong is subject to questions and we will not know for quite some time, but there is a view that things actually are getting better and then the question is, to the extent that the view is correct, should the president be taking advantage of that, talk it up, et cetera? >> remember, i am a pollster. my job is to report the american people. you have a lot of business leaders who watch this show. the american public is trapped right now. the american public is frustrated right now and one of the reasons why the economy is where it is. they simply cannot afford the items that they wish to spend on. they're still not filling up their tanks every time they go to the gas station because they cannot afford a full tank. they're not buying the food that they want because they cannot afford it. they cannot travel where they wanted their putting kids on planes and that is one of the most expensive increases. they're not buying cars that they want because inflation is so high. if that is not the definition in the end, it is how the public sees it, not just the people who watch the show.

>> you know that i hate disagreeing with you but what i don't understand is that if you spend time at the airport or time on the streets of the city these days, people are buying. the consumers seem almost strangely very strong these days. much stronger than i think in some ways you might be intimating, oddly enough. >> but the not buying what they want to buy. they are buying what they can afford to buy. are they still buying? yes. are they buying what they want? no. that is why they're angry and that is why it is the direction, the country so heading in the wrong direction and that is why they believe we are in a recession. it is the american people. >> frank luntz, always one to help us understand what's going on acrs those country. we look forward to talking to you again soon. with two big hours ahead. the top numbers, including disney. you are watching squawk box

right here on cnbc.

good morning. futures a higher following the cpi inspired rally which had the nasdaq 20% of the midyear

low. the producer price index comes out. we will see what goes to the market. the new pricing structure for disney+. at the house getting ready to pass the inflation reduction act. we will talk about the buyback tax and the plan to beef up the irs. the second hour of "squawk box" begins right now. good morning. welcome back to "squawk box" here on cnbc. it is nice to see you again, melissa, hanging out for the three hour journey. lived two more hours ahead.

there's a lot going on this morning. we're looking at the green screen there. the dow up 125 points. the s&p 500 is looking to open about 10 points higher. we want to get over to dominic chu this morning. >> it is higher. disney is a contributor factor to it. take a look at the disney trade, it will probably be the biggest factor in what is happening with the dow jones industrial average this morning. the disney shares are up $8.82 per share. we are talking 60 points of the hundred 20 points in the opening bell and that is just disney after the numbers come in better than expected for profits and revenues and better than expected for a subscribers. they will introduce a new free structure and raise the price for the ad free models as well so in an interesting move here,

maybe seeing some pricing power from the media giant. disney is a really big bellwether for that business. they went off about a third of the value. but you can see the off the bottom so far so maybe some disney is getting some help with the earnings report last night. speaking of earnings, we have one from another kind of entertainment property, the much smaller. that is six flags. we are seeing a bit of a pickup in premarket volume. six flags comes out with profits and revenue that both miss analytics expectations due to a 22% drop in the number of people attending the parks in the previous quarter versus the same time last year. but, may be a bit of a silver lining, the people that went there spent a lot more money than they have in the past per capita. six flags is up about 15% that

we will stick on the consumer spending theme. some of the biggest gains that we saw yesterday in the big market rally were in those consumer numbers. the consumer names, because of the softer than expected inflation data on the cpi. on the business level inflation side, we are seeing a little bit of stability for carnival. best buy is up one third of 1%. southwest air and expedia. names to watch. bigger movers tied to the inflation data. we will see if the ppi data provides any kind of a catalyst for some of these names today. >> we saw some interesting moves in terms of reversal. a huge declines in yesterday's session. coin base, basically recouped all of the losses from the prior day. same with norwegian cruise lines. it was interesting to see how quickly people were willing to erase the bad news, so to speak. >> i think but it speaks to is just what has been overriding

in terms of the macro narrative. the big picture narrative in the market and that has been the inflation story. the economic story about what is going on because it has been arguably one of the biggest drivers. it wasn't directly inflation impacting consumer wallets and where they could spend or where they could not spend, but what it did was force interest rates at one point lower and with the interest rates lower and maybe more chapter. obviously a lot of fed heads out there and policymakers have been trying to dampen the speculation that rates are due for a move lower anytime in the future, at least in the coming year, but when you see interest rates starting to tick lower ndc signs perhaps that there is a peak inflationary story there. maybe the valuations could get a boost. if it wasn't directly tied to

consumers and being able to spend more, it may have been something with regard to interest rates and valuations. there is a mini perfect storm developing if, by the way, if this is a trend. right now it is only one data point. let's check the market reaction to the cpi data. the decline in july is unlikely to deter the fed from rate hikes. were joined now for more. we just talking about the fed heads saying, don't be too excited here. >> raining on the parade. what you have is fed officials yesterday, they did not quite share the market and enthusiasm for the better-than-expected inflation numbers, while welcoming the improvement, they said, this is not a game change as far as they are concerned. they said it doesn't change my rate. he expects 3.9% rate in 2022. the chicago fed president similarly nonplussed. those presidents leaning against the market pricing.

and for rate cuts next are. that's not what they are saying. there has to be some job owning in these comments. they want to keep the financial conditions tight which will bring down inflation but there is a caution about just how fast inflation is going to come down. goldman sachs economist pushed ahead. he noted that the auto inventory will be depressed and the be large. they say there is still a powerful force of will keep inflation firm and the fed hawkish. and this makes the equity market reality wrong. stocks can be down enough to justify taking an option on the fed but it will be several months of improving inflation data needed before fed officials themselves will take that gamble and ease up on the

rhetoric, on the rate hikes and the brakes. >> on to ask you about ppi and how it is calculated. >> lessons go to commercial. don't worry about it. >> in terms of what we have seen come down, we have seen a sharp fall off in terms of the price of rentals and used cars there are super certain components that have come down, that might have led the overall court to come down and when you strip out some of these items like airfares and hotels, the trend is higher, as i understand it. >> there are a lot of components. >> it is mixed. there is out of cleveland that will take anything unusual at

the top and at the bottom. this is how we got here. huge increases in car prices and huge increases in airfare. hamas interested in some of the prices are coming down because commodity prices do. put that to the side. what were the prices i came down because consumers got sticker shock? i said no more. >> can we know that? >> look in airfare. they been up 30% at the peak year on year rate. they are now down two months in a row. hotel prices are down. have we reached a point with the used car prices were, i cannot do anymore here. we need to move on. the six flags, it is crazy. six flags is going to say this down. is out because of gas prices and people making more decisions? and when then i read what disney is saying and it is crazy. >> fewer visitors but they're spending more. >> and they are making the bottom line on that kind of stuff so, to me, i'm not ready to give up the ghost yet on the

consumer. i think if we can get this sustained gas price decline out there, i think frank luntz is wrong. people can turn their opinions on the economy pretty quickly. >> and they buy things. other things. that makes the fed's job harder. >> that is another discussion. >> coming up come the impact of the inflation reduction act and the inflation reduction act and the tax on businesses.! we we are joined to talk about the plan and why taxing buybacks is a bad idea. before we go to break, let's check on the markets. "squawk box" will be right "squawk box" will be right back. ers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic round of a-paws at&t 5g is fast, reliable and secure for your business. ♪ ♪

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welcome back to "squawk box" this morning. mark cuban on the inflation reduction act, he's as well buybacks are one of the worst things to do, taxing them is detrimental to business. good morning to. i should also say that if i were to continue on with the tweets, it is little unclear what mark cuban really thinks and said maybe it should be 2%.

>> it's good to be with you. i think it is bad policy by the federal government to tax stock buybacks because i think it hurts ordinary investors and preempts the board fiduciary responsibility to measure growth in the use of capital to grow the ompany and from time to time, to take the advantage in a very effective way for shareholders, to buy the stock back significantly below their own calculated intrinsic value. this is smart finance to do that and this is the government mandating essentially that it not be done by placing an excise tax on it and i think it is just wrong for the government to do that. but this is a bernie sanders idea that has found its way into the biden agenda and also into the s.e.c.'s agenda as they try to make it more difficult to do stock buybacks as well. >> congressman i want to dig in on buybacks but it is worth putting context around this.

this became a replacement, if you will, to raise revenue for the fact that there was a provision that would have closed what we all have talked about on the show many times as the carried interest loophole. what do you have been in favor of closing that? >> i would not have been because i do think, under the right circumstances, that carried interest, if it is done properly, should receive capital gains like treatment but i hear you and i think you asked the right question. you've gone from a potential democratic idea to raise revenue from the proponents and institutional shareholders related to private equity transactions and instead imposed a tax on labor union pension plans and 401(k) participants. everyone who invests in the market, who has a board of directors alert to ways to improve the long-term return without damaging growth when there are stock prices are out of line with where it should b

. >> let me ask you this as a policy question. i think there is a fair argument to be made that over the years, if you were going to look at the buybacks broadly, they have been an overused tool that has been in some cases used to goose compensation. they've been used in context to boost stock prices and has not worked. there's a lot of wasted money over the years if you looked at the total use case of them. the question, therefore, is is there anything from a policy perspective that should be done to try to limit them at all? >> again, you ask a good question but i go back to warren buffett's maxim about stock buybacks. you can buy dollars for $.80, isn't that in the fiduciary interest of all shareholders in a good decision by the board. which is not to say that

management should not be warned that if they imprudently buy stock back, paying too much of a price, they destroy the growth prospects for the country and they ought to be punished by the analysts and the owners and the broad shareholder base. >> congressman, i don't disagree with you but i think the issues that we have effectively incentivized buybacks and effectively diss incentivized giving dividends of the shares to investors, for example.'s right now dividend is disincentive on a relative basis to a buyback. i don't know if you think they're comparable at all. >> companies, we have authorized buybacks more broadly since about 1982 and the return to shareholders over that time between dividends and cash buybacks is basically staying in the same range. companies have to decide within their industry and within the shareholder competitive

environment what is better. growing long-term dividends or occasionally using stock buybacks when the stock price indicates that it should be used. it's not a routine thing. unless the company is perpetually undervalued to that intrinsic value. i think that despite the tax disadvantage of dividends that long-term dividend performance is something that is valued by shareholders and by income investors and therefore, they both are very good capital return mechanisms for shareholders and shareholders benefit, small and large. >> i think investors have seen through buybacks. with you on many points, congressman but we were talking to a congressman yesterday who represents silicon valley and asked if the major constituents, the corporations in and around his district would like apple. the biggest purchasers of for their own shares have

complained to him about this proposed 1% tax and he says he's not heard anything. this does not prohibit companies from buying back shares. it just makes it a little less -- a little bit more grittier to buy back shares. so what is the real issue here? at the end of the day, companies can still do that and if there is true value in buying back their shares, paying 1% tax should not really make that much of a difference. >> you raise a good point. you're talking about one of the richest and most profitable companies in the world but two comments, if you look at academic studies done back in 2019 after record year of stock buybacks in 2018, they do not find in the difference between companies that had compensation plans tied to performance or not, but it really was not measurably different, not materially different in the

stock buyback plan. but just because you can tax something doesn't make it good economic policy. if apple says, we don't care, it is a bit of grit, as you say, in the gears, a lot of grit in the gears damages capital formation and i don't think the allocation decision is the government's. and they are in the rulemaking proposal and the tax trying to send a macro government signal from the federal government that these are bad and hurt shareholders and i don't think the evidence supports it. >> >> when mark because it sounds like you are in favor of continued of a carried interest treatment. why are you in favor of it? i understand the rationale for a capital gains tax. i know there's a debate of there should be a capital gains tax and if we should incentivize capital. but were tied by individuals who are not contribute their

own capital. we are taxing effectively their fees and their income at capital income rates couple, at capital gains rates. and a way that for anyone else, for all of labor around the country, for this one particular industry should be incentivize differently, why? >> my view is, if someone was going to reform the without throwing the baby with the bathwater, but this is a large capital investment and we have over 15,000 businesses that are privately out there employing millions of people, i think would be very disruptive to that part of our system. >> i understand that. we should talk more about it. i would say that yes, we should

keep the risk capital of the system. so, the risk is not at the expense of the individuals who are managing that money. it is the pension money and everybody else's money that is actually at risk and that is why there is a debate over this issue. we appreciate you being in here this morning. business reporting announcing a new pricing structure in an effort to make the streaming business profitable. and as we head to break, all three companies with the biggest gainers in the s&p 500 yesterday. stay tuned, "squawk box" will stay tuned, "squawk box" will be right back. (shelf falling) 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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still to come this morning,

passing netflix in subscribers for the first time ever. >> we will talk about that. the futures ahead of the number, this might change soon, but the dow is opening up about 140 points higher. the nasdaq is up 26 points. "squawk box" is coming right back after this. i'm here with these low handicap golfers to put the maxfli tour balls to the test. ♪ ♪ nice shot. and it sat down nicely, huh? how did it feel compared to the ball you play? i like the feel right off the face. now let's go to the bunker.

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welcome back to "squawk box". disney reporting numbers last night. surging 26%. then announced a strong civil subscriber growth. for more on this we want to bring in tom rogers and a cnbc contributor. and eau claire atkinson. the chief media correspondent. good morning to both of you. you look at these numbers and by some estimates are good but the subscriber numbers up against netflix and say in three years, they got pretty close. >> we have to cut through the spend a little bit and do some

media math. they beat expectations and the parks are on fire, but in all my years of working in media, i've never seen this calculation before. it be like if they end up cnbc, see msnbc, and bravo, and oxygen as a we have five and a million cable subs. i'm not sure it is really a number that means anything. i think the tale of it, if you're going to make that comparison of disney to netflix, disney in the last 12 months has $-2.8 billion coming out of streaming and netflix has positive six plane dollars in the last 12 months coming out of streaming. so, we have to look behind the numbers. disney has done a wonderful job of being able to weld the

street. but the real sub number you want to focus on here, and we need to focus on this, because it is a race between linear decline versus streaming growth and who is going to in that race? and they said that they will break even over the next three years and and streaming will break even. and are probably going to lose 12 to 15 million or more cable satellite subs. it brings with them $5 million to six plane dollars in combined subscriber fees. so as they are raking even come there losing the ground on that and the question is, what is the balance? and none of the streamers have really done that calculation.

show us what the deterioration and the margin on the deteriorating revenue is, versus the growth on the streaming so we could really get a sense, are you creating more value? are you just treading water, or are you going to be losing ground relative to the traditional media's? that is the real math. >> take us inside the soap opera that is disney. there's a lot about the things that have happened over the last year, specifically around the two bob's. but temporarily, at least for now, bob chapek has a lot of support and the number seem to support. >> it feels like he is through the woods. feels like the street likes what he is doing. he came from the parks division and the parks division to ditch incredibly well yesterday and it feels like he is he has the numbers across that a good. it's a good time to be a consumer of content right now because it is extremely cheap. having said that come the big

surprise on the call was the extent to which there pushing up advertising and launching advertising and pushing up prices. again, that seems extremely bullish to me in a point in time where consumers are belt- tightening, it feels like the calculation is perhaps based on what they are seeing in the parks that they are continuing to spend despite big price hikes there and the calculation is this is the lesson that gets cut from the budget and people will still spend on entertainment. >> i'm going to make it hard for you. if you could only own one of these stocks. will give you the choices. you could own disney, you could own the parent company of nbc, comcast, you could own netflix, or let's throw in warner media discovery. four different stocks here, we will take apple off the list for the purposes of this game. a year from now, which stock

would you be happiest owning? >> i would have to say netflix, because it is the one that is not dealing with linear decline and as i said, that is really the issue. netflix is free of that. can we talk about advertising for one second? everybody in all these streaming calls have talked about this. hulu today is the leader in terms of the streaming service providing an ad tear. but for the third quarter, the advertising revenue has declined and the leader in streaming advertising, but to their advertising per subscriber has declined. something is wrong there. this is before we are getting hit with the advertising recessions and all of the decline the people are talking about for advertising that could result.

that is not a great sign for everybody else entering and the competition for streaming ad dollars that will take place. they mention in the press release. they did not go into it in detail. that is something that really needs to be probed here. >> to think it is a mistake for everybody to now -- i do want to say doubled down, some cases for the first time, to really push the subscriber, or rather an advertising driven subscriber group? is that a strategy that you thinks makes sense? >> yes. i think giving consumers twice at a lower price makes sense. i think thatit re-creates some of the worst aspects of the traditional television viewing experience but if viewers are willing to tolerate it and pay less, that is fine. the question i'm raising is all this competition of new streaming inventory that's going to come forward and the one guy who is out there as a leader today with the service,

hulu, we have to get behind that and the other thing that did not get discussed much is disney+ still has an engagement issue. netflix gets 30% of connected tv engagement. disney+ about 5%. it is great, i think from a pricing point of view that they are taking up the price, but you cannot take out price without taking up engagement and not expect some meaningful churn. so i think they really have to focus on the engagement issue. may be the q4 release that will begin to significantly change that. they have a long way to go. >> in terms of raising the price of trying to get additional engagement how much of that will be additional spending that is needed for programming? i think there is less programming on that service relative to netflix are some of the others. >> i think that is precisely the point. they said that the content at $1 billion. they would need to spend on espn+. there will be huge hikes in sports rights.

he said on the call that he will not do any sports deals. i hear what he said on the advertising front, but i think there is a huge pent-up demand for disney+. you can never advertise on disney's traditional channel. advertisers are very excited to be able to advertise with some of the big disney+ movies that were in the theaters and i think there will be a lot of demand for disney+ ads here when it launches in december. hbo max is already there. netflix is coming. this takes us back to the linear traditional model where you are paying subscription costs and you're also watching ads as well. >> we went have to leave the conversation there. we appreciate it. at 11:00 this morning, we do not want to miss this, an exclusive interview with

disney's ceo. coming up, logistic stocks. we are taking a cleros look at this the other side of the break.

welcome back to "squawk box". supply chain disruptions start to ease. we have more on that this morning. good morning. a huge jump from the better- than-expected cpi numbers yesterday. you can see the spike on the chart. outperforming the nasdaq for the week. trucking stocks boom since the start of the third quarter despite concerns about a shift from goods to services. many things you might not have heard of rallying in q3, including the company that bought the ups freight business. there up 30%. they say more retailers and other customers are moving the business to the contract market with longer-term deals and away from the on-demand spot market

for free. in 2022, there were concerns about a great recession because the spot rates were falling and honestly, they are and remain more than double pre-pandemic rates. also, fuel surcharges are contributing to revenue. they charge customers a surcharge for fuel based on retail prices, even though they pay wholesale. they nearly doubled to $6.55 per package of the data shows that freight demand is increasing so far this year. e-commerce seeing the biggest year on year increase in july. pacing even january that is boosted by returns and continuing the holiday spending and there's another holiday season coming up just around the corner. we are seeing stock moves right now that you showed us. what does the accu's

acquisition of the freight company say about that? >> it's a really great question. atlas air went up 60% since it was announced that apollo would acquire them at a 35% premium over the closing price when the news came out and that shows that it is being seen as undervalued by companies like apollo and even by the freight companies themselves. there has been a series of m and a. in the industry, there is a belief that the assets are undervalued and there is room for the transports to grow. >> we appreciate it. thank you for the report. >> we have a look at what investors should be focused on with the numbers cross with all of the talk about the inflation

reduction act and the tax credits there, it is worth noting that it will be interesting to hear what they say about the rush to lock in the $7500 tax credits in the days leading up to the potential passage of this new act. >> they sent out a letter to the reservation holder so basically said, you want $7500? lock it in. it doesn't mean you have to pay every thing right now because we will not have the vehicles ready for a while but you could lock in the tax credit. go back to when they reported the july, the early july, the report of the q2 deliveries. look what the stock has done since then. they said the production numbers were better than what people were expecting that is when you started to see the tide turned in terms of sentiment. you hearing more people say, i think they're getting it together in terms of growing the production rate and that will be the focus today. when they report the q2 results, i should not say to forget about the top line and the bottom line but that is not what the street will be focused on. it will be what the company says about achieving the

production target of 25,000 vehicles this year. if they can hit that or they say, we can do better than that, then the stock will move higher. the supply chain issues appear to be on the way of being corrected, whether or not they give color there, i am sure that we will get something there. and any increase in reservations. he realizes that the key is to get stability in terms of the supply chain and the production and yes, the $7500 ev tax credit that is in place right now, it still applies for the r 1 t. the new ira incentive only goes up to vehicles $80,000 and below for suvs so she take a look at the shares, the thing

to focus on is what do they say about production? will they hit the $25,000 target? what are they say about the supply chain and there will be questions about whether or not if somebody does not lock in the current incentive, do they think it is going to hurt reservations? those be the three questions of people are focused on. >> it's interesting because the argument had always been that these companies have been benefiting from the ev tax credit for so long. what happens with that goes away and they do have that benefit in the early stages of development and for it to be taken away at this early stage, you have to wonder whether or not it is going to be able to actually lock in those orders. >> this will be a good test case. if if it does not impact the reservation list, that means we've reached the inflection point for ev's essential. there might be enough people in the country this is i see what the trend is going and i want

to be part of the future. it's more than i want to spend but i will do it anyhow even if i don't get the $7500 credit. this is a good litmus test in terms of the incentives. >> thank you. we are watching shares of three drugmakers this morning. they are falling sharply for the second day. analysts say it is possible that the case could result in billions of dollars in liability however the spinoff has not issued a statement saying it is not a party to any u.s. litigation regarding zantac. at the heart of it, impurities in zantac, a compound that causes cancer, and the plaintiffs are saying that there were impurities in this zantac product and if stored at room temperature, they could actually get worse and of course impurities cause cancers of the exposure to cancer could

be greater. the stocks not just fall yesterday, but they were down sharply leading up to this litigation. day that i believe is august 22nd. this is worth watching. >> yes it is. when we returned we will speak to the former s.e.c. chair to talk about the plan to end the irs. and etf and so much more. that nterview is coming up k.ght after the brea check out the futures ahead of the morning. dow is down 170 points. "squawk box" is coming right "squawk box" is coming right back. finding the perfect project manager, loper, or whomever you may need... tends to fall right into place.

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switch to xfinity mobile today. as the inflation reduction act moves to the households, we have provisions of nearly $80 billion in irs funding. 25.6 billion for enforcement. we are looking at with the agency may target for audit. good to see you. >> nice to see you. >> it sounds like there is not much about this act that you like. what is the most troubling part of this act in your view? >> look, you raised some expansions for the intro. whether it's troubling or not,

i think the space around it is troubling. folks on one hand, the expansion of the iris program, we don't have anything to worry about unless you were cheating on your taxes. on the other side, this is different for enforcement. it's really going to hit people. they are honest, outstanding citizens. neither one of those poll surveys is correct. you have to have compliance with the other security laws. you have an array of different cases. let's try to use simple math. say we have 100 cases, 60 of them are absolutely slamdunk. 20 of them is at the margin. this is all around the regulation. people are going into fake news, or they think it's an

egregious problem. 20 of them, you open the case. you realize that this person was fairly compliant. we need to fix that. if you're going to take that 100 cases in 2020, and expanded to 200, you're going to get that if everything is linear. you're trying to go to those who are truly misbehaving. you open more cases where people who have done nothing wrong. there's merit on both sides. the question that we should be asking ourselves, is by trading more false positives, it's the return on that. is it worth it? that's the goal that we were making. >> not only the absolute number of false positives increase, but the rate of false positives go down. maybe not the number of cases,

is it still too present? if that's the case, what's the problem? >> you expanded the actual number. you are bothering more people. you want costing yourself more people. 2% of 100 is 2%. you have two extra people. you ask the question. as we add more money and enforcement, is that linear? is it administered in an effective way? is it an ineffective way? that's where the people of the irs have to do a very good job for how it goes. >> what do you think of the buyback tax? >> i'm going to go on record for this. i have had real issues with tax documents like that. a few of them. it's a tax on shareholders.

this incident, the tax is going to be right there. in this country, the free flow is one of the great advantages. we are able to have a different capitol building meeting area. a different place in the world to raise it. i'm always worried about anything that is all there earlier. it also cuts against another policy that we establish. this was in the last decade and a half. they have a different sedative compensation. they manage the employees and the shareholders. what do you do when you take the stock? you buy the stock back grade you are diluting the returns to shareholders. you are buying the stock back. this puts the public shareholders in a bad position. les, is this the thin end?

1%, people say is not a big deal. is there going to be more here? is there another 5%? let me know this. it may have a perverse effect. i think the best thing to do for the shareholders, is to go through for them. it's more than 5%. i might even accelerated. we need to think about all of this. >> we literally have one minute left. i have to ask you for the ets around single stock wanting this week. i'm wondering if that should be the target of the fcc at this point. is this a good idea to leverage that's against foreign and individual companies? >> i actually like these. leverage bets have single

equity securities. this is the more they look like options. we all know that we understand the payouts and the options. you have to have a fairly system skated style in the market. we are referencing different payouts. we are trying to leverage bps. the fcc should look at a way to leverage this. >> good to see you. >> good to see you. coming up on the other side of this, we have a take on market inflation, and so much more. ppi data is out that the weight: 30 this morning. a different reaction and analysis as soon as it hits. stay tuned, you're watching squad fax. this is cnbc

teachers looking to gain from the averages when the opening bell rings. at 90 minutes away. we are coming off of a saturday, where stocks have left the deal w 10% untied. likely catalyst, inflation data. the price index comes your way this hour. we have a panel standing by to let you know what it means with

polio. relief at the pump. nationwide gas prices, down more than a dollar per gallon from the all-time high two months ago. is it time to pull up? is there a final time i had? final squawk box, begins right now. good morning. welcome to squawk box here on nbc. rainy times square. joe and becky are off today. we have an hour ahead. inflation data, coming up in a half hours time. right now, equity looks to extend the rally from yesterday's session. deal w, adding 160 points. nasdaq, up 60%. it's been more than 20% above

its low. and able market, maybe? there have been 27% rallies in the market. 274.5%. andrew cracks >> thanks, melissa. it has finally happened. aaa saying the price for a gallon of gas, falling below four dollars. this is from one month ago, five dollars per gallon in june. because of those highs, it contributed to gasoline alliance. we had presses look at us when things are more expensive. you are trying to fill up. california has the most expensive gas in the country, $5.40 per gallon. pretty close to each other. $4.22 a gallon.

$4.38 across the bridge in new york. of course you have an easy pass. george washington ticket price will cost you. earnings news, and a good check on consumer spending, take a look at six flags. plummeting in the premarket. the revenue is falling well below the annual forecast. it's being resulted by a 22% drop in attendance. it's in the past. interesting that we are looking at that versus what we are seeing from the parks at disney. >> they are buying more turkey legs or mouse ears. whatever. i don't know if you have gone recently. >> i did. i was there in may.

unfortunately, i'm a cheapskate. we spent a lot. >> all right. let's get over to the cheapskate, taking a look at today's other premarket move. >> i'm cheap on some things. i can be in a splurge status for others. no trade-off to disney. we have consumer spending pictures in six flags. it's interesting here. a smaller cap company. it's not going to get a big boost in the premarket regular session. it's a higher and furniture. the company is called our house. shares are up 22% right now. it puts market value above $1 million if it holds in the opening bell.

companies like grayson allen, restoration hardware, that the condo level we are talking about. very high in furniture. those shares are 22%. it comes out with profits and revenues that top expectations. with the surge. they have a metric with the four year outlook with the different sales to revenues and profits. everything else has been up. that's the reason why those are higher. it's higher for the consumer in regards to this. one of the few companies that the supply chain improvement helped over the past quarter. it's a little bit more there. we don't talk about it too often. we have different supply chains and everything else. european drugmakers, they recently have consumer health divisions.

it had been lower for quite some time. this was a once popular heartburn medication. they have some of the generic derivatives on there. these companies are being accused of marketing and shooting products that may have cancer-causing components to them. they actually issued a statement, saying they are not a part of the litigations going on right now. you see pretty big on some of the healthcare concerns. this is in regards to the litigation around the drugs. watch for those particular names. one other thing to keep an eye on, some of the other technology for a consumer discretionary type of thing, they did really well in west yesterday's session. it's among the stocks that were up anywhere between 2% to 5%.

we have lower interest rates that help boost evaluation talks. i will send things back over to you. let's talk about disney. we have been talking about it all morning. entertainment giant, better than the bottom results. a bunch of streaming news in the market. the stock is up. >> we have the park division for the increase in spending. >> we lost them. >> i don't know if we can get her back. can we grab her? no? i think we can't for now.

it has been interesting to watch. we also mentioned that we have a big interview coming up this morning. this is going to be back in just a little bit. we are going to be looking forward to that at 11:30 a.m. eastern time. >> the revision is lower for the described forecast. there is some doubt around that, andrew. the forecast has removed it. we stepped out in the forecast that had investors read through it. there's nothing in the premium basically for the streaming service. you have to wonder how much it should there be now that they not only increase price, but they also want the subscriber supported here? >> interesting to see. tom rogers in the past hour,

started to poke holes in a lot of this. >> they have not been a disney fan, that's for sure. coming up, we go inside the market's overreaction for the government's latest inflation data. we are joining them to talk to bpi. what we should expect when it hits at the bottom of the hour. 0.2% last month. you are watching squawk box, on cnbc.

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welcome back to squawk box. teachers pay right now, at a high frustration point. few minutes away from july inflation data. this was cooler than expected yesterday. they gained more than 500 points. it's no less than 10% below the all-time high. they question whether the fed will slow the pace of the rate of the hype. on the ground, senior adviser. president of queens college cambridge, good morning to you. what do you think you are? are they going to slow down? >> it's not. the fed has to consolidate the game. headlining inflation is right there. it's not ready. it's about the early days. we are going to go hiking.

the fed is going to welcome it. it's a significant matter. >> when you say not slow down, you have 75 basis points? that seems to be the big debate. >> we already have 275. they have a couple of really good data reports. the drop report, and of course inflation. it suggests through them, they continue to do what they are doing. the underlying strength of the economy, it's still significant. >> if you think about where we are right now, we have seen how fast the market has come back. some people think the train has left the station. is going to return to the station?

>> we had incredible rallies. this was all by technical evaluation. the later stage of the rally, was a less worrisome fundamental. that was your thing. that has more legs to it. it pretty much wasn't coming. as much as i and others likely celebrated the headline station, core inflation still worries them. it went up. inflation has a very broad base. you're really getting the crisis coming down. that is what resulted in the zero inflation month. they have 3.5 within the headline. the underlying driver of inflation, remains strong.

the numbers are going to have important aspects. >> what did you think about what president joe biden said yesterday? zero inflation month. we talked about it earlier. a lot of people say that it's disingenuous. they should be doing a victory lap. >> from the data, it was a 0% inflation month. when you say that to people, they have two problems. they have massive dispersion that month. it was energy and gas that really drove down the inflation rate. other things went up. this was part of the 1%. i understand on one hand it is correct to say 0% inflation is

month to month. or are they thinking about? we are still feeling the pain. we have different actions. >> you have a different idea. it you see stocks start to move. is a different metric like this. we have a different evening. we find it for conditioning. you are getting it. that's the dilemma. you went ahead of the fed on the inflation call. this is all here behind. it's going to go ahead of the fed on the inflations under control. we have one speed after the other.

>> thank you, andrew. like we mentioned at the top of the hour, they are falling sharply for a second day. it they are worried about litigation surrounding the harbor dedication, which was drawn for the market in 2020. analysts say that this could case resulted in billions of dollars in liability. joining us on the squawk box newsline, we have a contributor, dr. scott, having all of these drug companies read scott, great to have you with us. with certain levels, the key to this year, the plaintiffs have to prove that they have cancer because of this. how big of a field do you think this litigation is?

>> ongoing issue for a few months now. this is the general batter between now and 2019. it relates to a specific impurity. this belongs to a general class. many instances have us finding the substances and drugs. we have the byproduct refinery process. this is found commonly in food. we adjust all the time in small amounts. we have an exposure of high- level increases for the background list. we don't want it to be found in drugs. we tried to reformulate the medicine to get it out of the drug. that's what the agency has been doing over the last couple of years. we look for the medicine. we find ways to change the medicine for wavy actions. it has been taken out. they are finding it.

she we have different things to relate to. some of the drugs become heated, or they are taken in combination with food. this is the pfizer drug. they have generic medicines. we have a broader term. in terms of your risk position, it's hard to demonstrate. in many cases, as such trace levels, we are exposed to these substances in the substances. we have the absolute risk for the phase. 1000 people are taking the drug that we were looking at the

time. this is over the time period that we are in the drug list for. we would have one additional case. a very small risk. we have different particular cancers. >> you made the point off-line. you have more of these impurities that cause cancer, from being eaten with a hotdog. something i found interesting, these are byproducts of the manufacturing process. you find them sometimes in an array of medications. we have different intakes for these drugs. individually in your heart medicine, you may have these impurities. on a cumulative basis, your

levels increase your chance of cancer. >> you shouldn't be there. >> we have medicines for specific therapies. we want to get additional substances. company should work for these trace elements. we have different ways to get them out. anyone is on a medication where they have a concern. you have the doctor, trying to have a physician to find an alternative. we have prolonged exposure. that's the bottom line. there are ways to formulate medicine. you can get these out. this is about how the medicine is manufactured. they have specific solvents that they used. we faced the challenge right

now. that's what they were protecting and call times had them at different levels. we are far more sophisticated than what we were figuring out. we have a bottom-line point. this is extremely low usually. no one should stop singing medicine. it's a different position. >> thanks for phoning them. we have some breaking economic data on the other side of the day. we have timeless consumer prices today. on the way. 7:42 from now. squawk box, coming right back

coming up, new inflation prices have them ready to sst diecthe number for the market reactions. 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!

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welcome back to squawk box on cnbc. producer price inflation, it's here. let's bring in the panel. we have policy perspectives. we have acting chair of the white house counsel, these

economic advisers are with donald trump now. we have a different institution in october. edward jones, as well as rick, a little bit over a minute to go. she >> it's insane how the world has changed. it's ridiculous. this is a little bit better here. >> the annual rate down to the very low 10.5%, which i say this with a lot of sarcasm, you're still having lots of consumer side opinions. it's a profit margin gap. we have different profits. experts are looking at productivity.

>> i think we were looking at the consumer number. we received a lot of misses on energy prices. what are producers paying? what are they going to be charging consumers down the road? this is based on the cost. the cost of inflation, the question is, are we getting that under control? >> we will be higher than 79. time for july ppi. we have to go to give the headline. >> initial jobless claims, 262,000. it's the highest level going all the way back to november of last year. if we look at continuing claims, 1,428,000, they are close to the estimates. it's higher of course in the rearview mirror. 16,000, the best level.

they go back to late 16. 1 million, and this also included 306,000 of other copies. final month demand is down. this is half of 1%. but like yesterday's goose egg, it actually means we are lowering a little bit. yesterday, it was lateral. the high watermark year was 1.6%. in march, we came down a little bit. food and energy, it's up .2 points. energy and trade, also of 210 read expectations for the high watermark, back in 2021. they are up 1%. look at the year-over-year numbers. these are the big ones. headlines, 9.8%. definitely less than the 10.5% we were looking at.

high watermark, 11.6% in march of this year. food and energy year-over-year, 7.6. that one is close to expectations. sequentially following a .2%. high watermark is 9.6 and that was in 2022. dpi, food trade, they are up 5.8%. sequentially following 6.4%. high watermark, 7.6 in march of 2022. we don't need to be rocket scientist to see that inflation is coming down. the issue is that we ought to be adult about this. president joe biden, saying we had zero inflation was a little bit rich. inflation is coming down. a year ago, you thought they were astronomically high. the reason the market makes it so much, it's a forward-looking mechanism. trying to find inflation. the equity market had been gone so far for the worst-case scenario. just because the markets like

this number, doesn't mean the viewers are going to like this number. we want to have more minus signs in the future. we will have good news wherever we can. interest rates continue to drop. right now, they have come back just a little bit on the long end. short maturities continue to be under pressure. that really has big ramifications for what the market is pricing in on. what they said ultimately is going to do at the next meeting. back to you. >> thank you. much of the market reactions from what we saw yesterday, it was part of the bpi number. in a nutshell, bpi is softer than expected. across-the-board, lower than expected. we built is of going into the numbers. what is your case on this number? >> similar to cpi, this number is still elevated. is below expectations.

the trend is the friend here. markets will appreciate this one step forward in the right direction for inflation. yesterday and today, bpi benefited just like they did from the lower commodity price across the board. producers are benefiting from a little bit better supply chain pressure. we are seeing that cross several metrics as well. the market can't be fought. the momentum is here for the near term. they are very watched. the labor market has a little bit of a different side. we had some opening demands coming up grade we may not be going through it this year, we have volatility. it could be the opportunity to position yourself for 2023. >> this is a good number. i want you to explain why it's not just the final demand number. we get more information about the pipeline of pricing that

comes. think about it. we get information on wheat, flour, and baked goods. three different stages. when i look at the data or the timeline, essentially, there is more inflation coming. bigger, negative numbers. we have intermediate demands in processing that loads well. it's hard to know. it's going to be the industry by industry. profitability is part of it. producer prices are coming down faster than consumer prices are falling. they are not falling. they were flat. there's a possibility including productivity. it happens with wages. profitability may be able to return. profit margins may be stable, and even higher if you have the bottom dropping out of this. it's going to maintain itself. >> for the consumers, they are paying high prices. they are not going to come down.

this is up 12%. it's not coming down. courtney cost less. >> they are not sure. if a company can defend its price increase, it will. the market will be allowed to maintain a higher price. maybe even for tomorrow or monday. it's a rollback. they are agitated over this idea. should we get back to the old price level? it's a different game. you get back to the old wages. you have to revert all of this. >> if you have to go down, the whole ball of wax has to go down. his two it's not selective reduction. tyler, what do you make of this number? >> reassuring number. we will take good news when we can get it. this is the easy part of this inflation read a lot of the transit factors that have been

driving inflation, the headline numbers are higher over the past year. this is things like energy and certain transportation services. maybe even chips in used cars. you have the core measures on the consumer side. they're looking like five to 8%. on the producer side, looking at services, is going to be the hard part of inflation. we haven't seen the pain yet. they have risen almost continuously since march 19th. similarly, continuing claims. i do worry there's going to be more slack in the economy before we get those core measures down. >> the easy work is done. hard work is still ahead. we still haven't felt the full impact of any of those rates

just yet. >> we have not felt the full impact. one of my biggest fears remains that it's overpriced. we don't have enough patience to wait for the actions. the big decreases come from energy prices. we want to see them come down as energy crisis actions. i don't want to see prices start to come down. deflation can be very destabilizing for an economy. right now, we need to be clear. we change the path. we are not trying to reverse the path. i think we are seeing decreasing numbers right now. we are clearly on the right track read for we want to see, is low, slow, and study prices

going forward. i don't know if we are thinking about what the fed is trying to do. in the past year, they are trying to grow everybody back. >> he took it down to the daily. got a pastrami sandwich, and gave them a nickel when we had a quarter. that's not what we want? >> we want to keep the pass in the past. we have adjusted. we have been past this point of inflation. we are here after months of negative prices. what do you want to do with the company? what do you want to hear from the consumers? it's very destabilizing. you want to wait and bring it through further. we are trying to look at different landings. people don't need to lose their jobs to get inflation under

control. >> what pieces of inflation data tell us your opinion? >> we have a different discussion that was encouraging to read with the cpi report yesterday, we saw a real mess for the price is happening. we saw a lot of travel related prices falling read what that tells us, consumers are starting to become more price- sensitive. one of the things that facilitated inflation during the pandemic, consumers could only spend their money on a narrow set of items. they became very price insensitive read allowing full passive actions. now, consumers have a full fleet of consumption processes. they were responding to prices going up a lot. they fly less. they have different trade-offs.

it's also the key ingredient. they are going away from extremely type policies. somewhere down the road. that price sensitivity, we are looking at the fusion index. that's the best number in many months. to me, that's the encouraging part of the report. we are starting to see normal behavior from consumers. that's essential. >> nine minutes to discussion. somebody brings up the word of it. the contest is going down the road. we finally mentioned this. could we with this number actually start talking about it? >> it's in a rounded sort of way. >> a different process is right here. we need to get to that 3.5% range.

>> you have guys going through yesterday. this is about 4.4%. i'm not surprised. there are still sectors that are below 2022. some are above it. it was trying to be there. >> the job must go away. >> i get the point. >> what you make of those claims? >> looking at these in

particular, this is what they are currently going to. they benefited from the pandemic. they have higher plans that are starting to lay off what they heard from financial services. they're doing the same thing for the critical space as well. we have a different direction of travel from 3.5%. this is probably coming into it right now. it's more likely. keep in mind, they're trying to go through it. the inflation is actually coming down. we have one great thing that we need to see. we were going through it as

well. we had a picture of all of this right here. >> we had it incredibly low. we had the economy. this was the worst we have seen since the great depression to a really strong economy. we still have a lot of adjustments out there. the initial claim number is starting to get a little bit worried. right now, we are going to see a little bit of an adjustment. we are trying to help expand the economy. >> a lot of happy talk on this panel here. a very smart guy in chicago. what's the deal? are you trying to have a happy

talk? >> i will tell you what, here's how i look at it. we have a huge index for the price going up and down. let's go from confusion to confusion. everybody loves thursdays in chicago. >> how much per month? >> is not going down at all. this is the biggest debate on the internet. >> [ inaudible ] >> big turn tomorrow guys.

coming out, we're going to talk about kramer, and his first take. we will be joined to tell us what we are looking at with polio. you can get the best of squawk box, all curated. we are trying to listen right after this

welcome back to squawk box. we continue to watch disney. 10% higher from the back of the entertainment. better than expected for the top and bottom result third quarter, a bunch of streaming news. this is as a supported tear. we get straight down from the new york document chain. we are sitting. we had some throwdown's. we had harsh words going around. seems like some shade was right here. we were looking at this on twitter this morning. >> the acquisition of fox, it's still lingering. teams are into the free pass business. you really need to see consistent cash flow return.

we are getting away from the notion. we are looking at whether india has low prices. we are conscious of all of these prices. they weren't able to write down see how what really hurt this company. >> well, i'm trying to say, are you arguing against the fox acquisition? is that what you're saying, do you think that was a mistake >> i'm saying it's one of the worst acquisitions i've ever seen not a mistake. what you're seeing, you know, they just got had. it's okay. >> let me ask you a question, though >> and just -- >> if you think about that, though, then you'd have -- you wouldn't have the control of hulu i don't know how much value you think that is within the sort of dynamic at play here and you wouldn't have all of that content, which may also get merged into a disney plus longer

term, no >> it's possible, but when you pay too much for something and it impacts your balance sheet at this bid, then you get lost in the weeds of pricings disney plus instead of just celebrating the fact that the company came through covid very well. incorporate it was an ill-advised acquisition. they paid too much i do believe they would like to take the charge but they can't because it's too integrated. i understand about hulu. they have to pay to the other part of hulu to the parent company of our network i think it would hurt their balance sheet. so what i want to do is get away from the notion that chapek has done a bad job which seems to be the perception of a lot of people and accept that he's got a really bad hand that he's trying to hold in. >> when you think about -- >> what i think is - >> i'm a little on the fearless side >> i don't know if you tom

rogers earlier, i asked him if he could own, netflix, disney, this network comcast, or the fourth -- we're missing there -- he said -- oh, warner discovery, he said he would own netflix can't even catch a breath before he said it what about you >> i've been to netflix theme parks. they're empty and there's very few things that they offer >> fair enough >> right i mean -- easy to get into the magic networks kingdom but, you know, i actually want to get back to the notion that disney san entertainment company in its theme parks, instead of this incredible diversion, we worry about espn subs. now, we worry about disney plus. i think you have to focus on what's better than disney, netflix, and realize that disney is actually iconic maybe that happens at 11:30 today, i'm going to stop by, but that doesn't mean i like

acquisition. >> jim, i'll be there planning this out are you guying stocks today? we're in the green >> yeah, we're up yesterday. i like your panel saying can we get two good numbers before we go crazy i like the market, had a really nice move yesterday. but no desire to pay up here >> jim cramer, we'll see you in a couple minutes, "squawk" returns just after this. the thing that's different about a vrbo vacation home. you always have the whole place to yourself. just you and your people. ♪ ♪

♪ welcome back to "squawk. news from mcdonald's this morning, the fast food chain planning on reopening its restaurants in kyiv and western ukraine in the coming months the company will begin working with suppliers to get production and products to those locations. melissa. >> and, it's interesting to watch mcdonald's we had wendy's come out and they had disappointed numbers you're really seeing the impact more broadly of the consumer and how it's, inflation on the consumer and how it's impacting the wendy's customer versus the mcdonald's customer so we're watching this very closely meantime, andrew, we do want go to mark cuban. >> on the phone. >> yes, who joins us on the phone.

and mark, you tweeted about the i.r.a., and specifically, the stocks on buyback, you said this is a terrible idea, first of all. you said why not make it 2%, what's your general point here >> i'm all for buybacks, right i think people misunderstand buybacks and people think they're a better tax option than dividends and that's no longer a case if somebody holds a stock prior to 60 days prior to the ex dividend date, it's long term gains. and if you happen to be a shareholder below a significant income level, 75,000 for single household, then it's tax-free. so the tax advantage for buyback advantage doesn't apply to most shareholders i think dividends are a better way of putting money in your shareholders' pockets, particularly, the shareholders

that commit to you >> mark, you made sort of a joke on twitter of raising it to 2%, i was a little confused trying to understand was that a joke or not? >> no, no, when i said it was the best of the worst. no one is a fan of more taxes, i think a tax on buybacks is a good idea. you guys misunderstood what my point was. i don't have a problem with buybacks at all. in fact, i think it's a good idea >> so, you think it is maybe i'm misunderstand this, you think it is a good idea to have the tax on the buyback. >> yes, yes. >> question i would ask you, do you prefer that over the loophole >> totally different yes, that's a non sequitur they're not mutually exclusive i'm not an expert on carried tax

law. companies in particular have to make decisions between tax buybacks -- share buybacks, rather, and dividends. and a lot of companies seem to believe that the old notion that share buybacks were more tax advantage for shareholders that is just not the case any longer and the reality is for share buybacks, you reward the people who are leaving and selling your stock. >> right >> instead of rewarding the people who are keeping your stock. >> what do you make of the argument that now a lot of companies might try do buybacks from the end of the year, to capture that without the tax and it may change the way executives are compensated in so far as, executives may try to take more cash, in part because they been buy back the stocks to push the stock but dilution >> i think it's great with less equity. >> but that's the whole skin in the game thing, don't want

people want skin in the game >> yeah, what's more skin in the game than cash coming from your balance sheet? >> well, the stock aligns you with the shareholder >> no. >> the buybacks would make that argument >> yeah, the problem is it's really easy to financial engineer with stock buybacks, right? there's just so many games you can play and it just creates a whole different set of problems. i think the fundamental issue is do you want to reward your shareholders for staying via dividends? and now given the tax consequences it's for many the worst case, if it's a long-term shareholder, their worst case is a long term capital gains. their worst case is zero tax, wouldn't you want more team who are typically not shareholders to come in and own the shares of your stocks. so if there's somebody out there making $50,000 a year, now you can say to them, look, we're going 0 to start paying

dividend