spending money and taxing. as long as we stay focused on inflation i am very optimistic. >> have we seen the peak? >> if we don't screw it up. if we don't spend too much money and print too much money. >> great to see you, brian sullivan. our thanks to tom farley. have a great weekend and make sure to join us next week. squawk on the street is up next . good friday morning. i am david faber with leslie picker and mike santilli. we are here for this nice friday off. let's give you a look at futures as we get started on the last day of trading of the week. we are set up yet again this week for a higher open, but we shall see. let's get to our road map this morning. it does start with sustaining sales. reports indicating apple asking suppliers to build as many of its iphones this year as last,

despite projections for the overall smart phone market. plus, five u.s. listed chinese companies are looking to delist from the new york stock exchange. we've got the details. is coming. adam aron tweeting the date that his equity against trading will be here. that's the latest. >> that is pretty funny. let's start with the markets. what has been up to now a very positive august four stocks. great to have leslie and mr. santoli here to help out that conversation. as we head into the end of this week, what is foremost in mind for you? >> the market. gaining a little bit of comfort that the things we were most afraid of a few months ago or even a month and a half ago look a little bit less like this. the jobs number, the inflation numbers, coming in the past couple of weeks, have made me feel better about the stag in inflation. that is as simple as it gets. people were in opposition for a

pretty rapid rally because the way you get rapid rally is people aren't positioned for it. that is basically the sum total. the interesting thing is, up more than 15%. yesterday we peeked above that level. that would be regaining half of all the losses from the january to june decline. we kind of backed off from that level. the question is short-term. maybe the market is stretched. maybe we have already gotten the peak inflation priced into a fair degree. it doesn't seem as if there is something that will knock it off course very soon because you have to have a challenge to that idea that we are on the downslope of inflation. a six month window. the market looks ahead for six months. basically the market is saying the feds are done in six months. it may not be true, but it will take something to knock that story line off course. the stocks are moving, so the market is getting more comfortable that a soft lining

and remote possibility will be a slightly less remote possibility. >> is that what you think is pressed into the market right now? this idea that a soft landing appears more possible than it did before. not necessarily that fed pivot everyone is talking about, but this idea that a soft landing, given what we saw with inflation data, and the backdrop is still quite strong, despite somewhat softer numbers yesterday. it seems more in the realm of possibility. >> yes. i think there has been a little bit of reassurance on both those fronts. we should probably define this. if you look at the implied pricing of where the feds fund rate goes into next year, you would say, the pivot needs will tighten a bit more. above 3%. maybe 3 1/2. and then quickly start cutting rates. that is the kind of pivot that no official will ever say is going to be the case. it builds up rate hikes and then takes them away. the pivot is also slowing down, going 50 basis points in september and then back on a course of quarter-point increases from there. and then wait and see. jay powell said we are neutral.

so if that is the case, then the other side of it, the soft landing, says the economy may be stronger and is starting to withstand whatever the feds have left to do. so it is not two fully independent stories. it is all of those together. america seems not to be under a tremendous amount of stress despite the inflationary situation. >> it is worth reminding people, we have a csi price index that was not up month to month. that was a surprise as the market rallied sharply. yesterday, after a ppi that was down a half percent, we did sustain the gains that we showed early on. >> exactly. that was partly about very short-term, getting a little bit stressed. we have a lot of buying and a short amount of time. during the day yesterday, as we got above that level, we had an excitable open above that level it was like more than half the gains are in the books. from total losses.

oil prices bounced. not big. they are nowhere near their highs. it was just one of those things of, you have to keep it in your peripheral vision because this stock market, if you look at the course of the year, has not performed well. it happened in two distinct phases this year, and the market didn't like it. so it doesn't mean it's some kind of magic trigger for selling stocks, but it shows you there is a kind of sensitivity for what that is going to mean, especially for the big growth stocks in the index is. so that is mainly what is going on. >> i was watching disney of course, yesterday, as well, which is a strong performer but started to come down as the day went along, ending up at just less than 5%. but because of certain parts of the report, you could say it is not quite as strong and better than had been anticipated. in india or those high-quality subs, no domestic sub growth. relying on a price increase. they will say we will absolutely stick. we will see if that stock

maintains that game today. even yesterday, even more b parker, which was up sharply. they said we have seen the economic backdrop becomes significantly more challenging. warby parker. other than had been anticipated, but said we are taking a more conservative view into the rest of 2022. a few days back you had yeti, and they sell out of those high- end coolers. maybe just not that big a market for a $500 cooler. they said, we saw a softening in the quarter and the amazon marketplace. commentary hasn't been bad but some hasn't been that good. >> i agree. it has not been that good. those are some interesting examples because they were companies that were kind of niche, huge addressable market, they don't have some of it yet. relatively untested companies. fresh ipos. they got excitable at the highs when they came public and in the kind of settled back in

deep losses. that has been the pattern. there has been a rebuild and a lot of those blasted out stocks. 80% down category of stocks. the goldman sachs most heavily has been 30% in a month and then it really backs down. there is only so much that you -- >> you have a lot of hedge funds as well that have taken their next way down that are actually short gross and they are getting hurt again. >> yes. >> they are getting hurt again. they have names like upstart coin base, which it's short and we saw the squeezing and nameless like that. >> in the journal, looking at just the recovery over the last few weeks in certain names, they mentioned rypien, palatine, game stop. they quote gary schilling, saying that the stocks never quite reached their puke point of capitulation.

they rallied before they were able to reach that. with the sustainability of this rally, i wonder if you give any credence to that. >> it is in the eye of the beholder, to some degree. if you are short something with a company that you think doesn't deserve to be public or to have its valuation, you probably never think it's low enough. i do think it is fair to say that, broadly speaking, we got pretty washed out in june. i am not saying that the lower quality hyper growth stocks necessarily had the full reckoning. i remember back in '01 and '02, how many stocks were trading below their net cash? a lot. it was like hundreds. i am not sure we are there yet, but there are a bunch. i feel like the market, make sure you're not very comfortable writing this for very long. >> maybe not puke. just indigestion. we have to get more on the markets as well. we are joined by management chief strategist, and ceo and cio, omar aguilar.

good morning to both of you. john, let me start with you. given that we are largely through earnings season, just give me your take on what you have seen both of the numbers and the commentary and what it means for the market. >> yeah. david, i have to say that the earnings, of course, came in better than expected. overall, you can nitpick it and say, if you take out oil, it is a negative read on earnings, but really, the negative read on earnings comes from financials, from the communication services sector, as well as it comes from one more of the logistics. consumer discretionary, which is down, honestly. even ted came in with this, which is positive. basically flat with a positive

bias. you have got good results. essentially, 74% on the upside, at least as of yesterday. >> so what does it mean, when you look at 2023, with so many strategists. what are the earnings going to be? therefore, rv adequately priced on the market at this point? >> yeah. i have got to say that i think that we are adequately priced at this point. it doesn't mean that we can't feel some volatility if we can get some kind of catalyst coming across the news kink that justifies the photo by investors. overall, i have to say this would suggest to us that there is resilience even within a tough reopening of the economy. with putin's encouragement in russia, and china's zero tolerance and supply-chain that

is rupturing, so to speak. business can really handle it, and the consumer can, but that should be good for earnings and revenue growth across all the sectors. so far. >> omar, leslie picker here. i am curious if you agree with that and whether you agree with the gains that we have seen in stocks are more of a fundamental rally than perhaps the macro things we have been talking about with regards to potential for less aggressive set policy and potential for slowing inflation and things of that nature. >> yes. thank you and good morning. a couple of things. one jock, starting with the macro question and talking about the things out there, these markets seem to be fueled significantly by the expectations that the fed will change as far as that they will be a pivot and that will be at

some point less aggressive. that seems to be a little premature in many cases. a lot of bargain-hunting. there is a lot of short covering that is happening in the market. the volumes that we have seen, especially even this week, are much, much lighter. very common in august. overall, we will see the shape of the market rally seems to be a lot driven by lack of fear, as opposed to a fundamental conviction that this is a rally that will stick. with things about earnings, and i agree with the fact that we saw robust earnings this season and saw a significant amount of corporate america. we also have to take into consideration, a lot of these earnings numbers, where is the pricing power that was submitted to consumers? in a way, the inflation picture that we saw over the last 12 months was translated into earnings growth that was bloated by those inflation numbers. so that pricing power seems to be reflected in the area for

this quarter. >> john, the earning survey did come through, as you mentioned. we have seen more or less routine declines in the third and fourth quarter numbers. nothing two dramatic. i guess the question is what we are paying for the earnings outlook right now, many have pointed out as we have gotten this rally that it is back up towards 18 times toward earnings. a lot of that is still very large. growth stocks inflating it. you think we are getting ourselves in a position where we rally into a point where the forward returns are not going to be that attractive? >> well, i think we are not there yet. let me put it that way. we will have to see the way earnings come out before we get into that third quarter reporting season. based on the jobs number shown this last week with the cbi and the epi shown particularly this week, this may overall work

pretty good for earnings. when we look at the q3 earnings and fourth quarter. i would say the fact that analysts caught their expectations going into the end- of-the-year actually offers opportunity to recognize what we believe is the fundamentals are indeed getting better, as challenges remain on the landscape. >> opportunity as well as potentially some volatility. omar, i know you are urging clients to rebalance. rebalance in what way? what types of waiting would you advise? >> well, it is clear we are entering the last phase and beginning the last phase of the economic cycle. that period we should expect more volatility. we should expect deceleration of economic growth. we should expect deceleration of earnings. in the process of interest rate hikes as we see financial conditions. this is a good opportunity for clients to use rebalancing mechanisms to be disciplined

about these. i am trying to just have strategies where you still need to have some defensive components going into this part of the market, but you're also preparing for the next part when the market is ahead. so a good connection of cyclical growth and high quality, which is probably what we emphasize, as well as getting some defensive oppositions. this will probably be a good strategy coming into the next part of the second half of the year. >> gentlemen, thanks to you both. good weekend to you both. when we return, apple is said to be expressing confidence about iphone sales in a downturn. in the next hour, and exclusive with richmond fed president tom barkin. let's take a look at futures as we head to the break. 172 points higher. more squawk on the street

ahead. k and reward. so you can enjoy more of...this. this is the planning effect. welcome to your world. your why. what drives you? what do you want to leave behind? what do you want to give back? what do you want to be remembered for? that's your why. it's your purpose, and we will work with you every step of the way to achieve it. at pnc private bank, we'll help you take care of the how. so tell us - what's your why? ♪♪

it appears apple expects to sustain iphone ales amid global electronics downturn. according to bluebird, the company is asking suppliers to make as many of its next generation iphones this year s it did in 2021. apple reportedly expects to assemble 220 million iphones in total for 2022, similar to last year, counting on demand from customers. so kind of study from the

expected demand side. it mirrors the way the stocks behave, you would argue. within a percent of its all- time high. it just seems as if this idea that they have got to smooth that upgrade cycle, there is kind of an open stall devices for them to pump the services through that. it is kind of a don't over think it kind of investment peace, and who knows if it will go more than 5%. it doesn't seem to be selling much. it is kind of fascinating how investors have gotten that message. it is also back up 7% in the stp so it is really kind of back to that point of carrying more weight than ever did before. pretty historic. not that many stocks are too much higher. >> it also sets apple apart when there has been this overall concern about slowing smart phone sales globally.

here they are saying, actually, we expect a pretty flat growth here over a year compared to 2021. the iphone represents, it is still their flagship product and represents half of their revenue. a very important piece of apples pie. >> is the exposure to china supply chain, all that stuff, that seems not to matter for apple the way it has for just about everyone else. >> also, revealing their financials, this is a closely held company. they said that revenue fell 5.9% in the first half of the year compared to a year earlier. that is largely do to western restrictions hampering their ability to get what they need and some of their files. so it goes back to the supply chain dynamic between our region and their region, as well. >> yeah. if you have seen the stock over the past three years or so, it looks like -- >> not bad. it has been incredible for them. >> absolutely. >> the largest position for

berkshire, as well. right? >> most viable. the logic of, if we don't sell, apple buys back the stock from everyone else. it has been working in favor for a while. >> apple, a far better performer than snp in my point. as we start trading today, only 5.1% for the year. coming up, amazon, also bouncing back, over the last three months. we will look at whether there is still time to get in onhe t rebound.

[music - cover of blondie's “dreaming”] [music playing] ♪ dreaming. ♪ ♪ dreaming is free. ♪

opening bell, just a few minutes from now. we are set up for a higher open. we are up about 7 1/2 so far on the s&p. we will see how the y dafares, as we go back into this. >> when the closing bell rings, we ring over time. scott wagner, with tough analysis

this morning, this is after the electric vehicle maker widened its losses after 2022. it did have production guidance of 22,000 vehicles for the year. we also should point out that the inflation reduction act is very close to being signed. but rivian, not necessarily a beneficiary because it's vehicles are priced largely above $80,000 and a $7500 tax credit is only going to apply to vehicles below that price point. not sure how that is going to impact it. another name, lucid. earlier in the week was up a bit on it, and then people started to realize, wait. most of their vehicles are well above 80,000 bucks.

>> the tax credits don't help. on the other side, we saw the earnings for rivian which inflation impacted the bottom line, as well. because it impacted the freight costs that it took to ship their products. they are pursuing rail instead, which has longer delivery times, which is already an issue for this company. as well as parts across the ev spectrum as well. much more expensive and his current inflationary environment. they are kind of not getting the inflation reduction act benefit and are feeling the pain from inflation itself. >> right. some noise about the how good the performance was in terms of new orders booked in the quarter. it was incrementally an improvement, but not necessarily blockbuster. what is interesting to me is how the stock is valued relative to its production levels right now. if you dial back to when tesla had a $30 billion, first got to a $30 billion valuation, they

were producing three to four times as many vehicles. you now see that tesla has proven that the model can work. obviously, the capitalization of rivian is strong. no real questions about that, with the backing they have. remember, tesla was always hand to mouth with capital. so it shows you that rivian has been given a fair amount of credit for how big that branch can become and how many vehicles they are on course to sell. >> and also reflect overall the speculative nature of the market. not that long ago, people don't remember this company came public and sort to more than a 100 billion dollar market value. far in excess of ford or gm, second only to tesla for some 3rd of time and then came crashing down. >> if you look at, since it came public, the chart crashed and now it really does look

like it is sort of creating some kind of a base in the stock. as the story has stabilized. >> they provide that more. they are not spending over that amount. that was really -- several billion dollars a year. >> everybody loves the opening bell. a lot more has changed. do you hear them chanting? -- nonprofit organization. yes. >> just because we mentioned it a few times over the last couple of days, with the s&p 500, the halfway point.

once it gets back to exactly half, it is 4231. the people who studied the patterns in the past would say it has to close about that level to not sound an all clear, but to rank this rally as something that seems like it is greater than previous bear market rallies. like you have never really seen a market regain 50% of a closing basis and then go back to new lows. now, if we just go back to the june lows, it is still a pretty tough check from here. a 14% drop. not to say that it is smooth sailing if we go up, but a lot of people are trying to get some reassurance out of that to the extent that this particular cycle is going to conform to other ones. as i keep wanting out, in 2020, the number of times we said, this is the first time the market ever did. it is the fastest the market ever regained the 30% decline. it was the fastest it doubled off of the low after a flash

bear market. all of which is to say, you take the information and say that tells you that the probability seems to be no guarantees. >> it seems to be increasingly difficult in this current environment. >> it seems like it. in terms of her sessions and all of those sayings are useful, but you just never know when the exceptions are going to pop up. >> i know plenty of veteran money managers who are not convinced of this rally. they simply believe in the fall, we will start to see falling earnings, particularly for some of those higher growth areas. and take it from there in terms of the software/technology side. they do not want to own it. >> i still think it is fair to say that if that was the low in june, just above 3600, you would have kind of gotten off relatively easy, just in terms of how much valuation is compressed. you didn't really give up that much of the previous gauge. he went back about 15, 16

months. without a doubt. the three, five, and 10 year returns of the s&p right now are like 13%. it's not like the market owes people that much over a multiyear period. so all of which is to say, you talk less about people not feeling like you have got that real complete washout at the lowest. that is why you have a good point there. one of the most foolish things some people are talking about is if we did enter technically into recession in the early part of this year, and it is kind of a brief one, an academic one. that is the most bullish case because the market often has touched the bottom. at the moment people say, it was a recession. and then it is not like you are waiting. because otherwise you are stuck in the late cycle environment and the feds are still timing and it seems like an odd mix of factors that is hard to get clear of. >> a key driver of the recent rally has been the s&p info

index with its juno. now it is training at 23 times ford, price-to-earnings multiple. that is compared to 18 times for the broader index. so a five times gap there, which is just surprising given we saw such pain in that area. and yet, you look at that and on a fundamental basis, earnings in the sector weren't amazing. they were fine. and then you hear layoffs every day. at different tech companies that continued to kind of percolate. so i see why people are a bit concerned about the valuation side of things, as well as the stability of where we are and where we could be going, despite the fact that some data seems to be getting a little better. >> yeah. >> we want to hit a couple of movers this morning. starting with aluminum, which is down over 10%. it is not an insignificant

company. 35+ a billion-dollar market for the start of trading this morning, down by 10% as we see. second quarter results did not meet our expectations. there are challenges in a complex macroeconomic environment, which more than offset the growth we continue to see in sequencing runs on our platform. that is the key focus of the company. dna sequencing. fiscal 2022 now, the company expects to consolidate revenue growth to four to 5%. as you see, not being met with a lot of enthusiasm. at this point by investors, given that morning and that less-expensive number for the second quarter. >> 60% off the high. it really did have a great one, and you know it has a little bit of a different flavor. the business itself has had, finally, a pretty good revival in the area. this is a story that is setting

itself apart from that trend. >> another stock this morning is the new york times, which is down about 2 1/2%. that comes off of big gains it saw yesterday with the value act which is taken this in the company pushing for changes. this is an interesting new trend, david, for your structure. >> yeah. >> activists are not dissuaded. you have elliott in pinterest. now you have value act in the new york times. i am told there are others on the horizon, and given the dynamics of the market and the leverage basis that people feel like, hey. i can still make change without that threat of a proxy fight on the horizon. >> it is a fairly effective one oftentimes. getting yourself over the goal line, so to speak, with what you are after.

they do have leverage in terms of their own opinions and in the marketplace of what they can do. we will see, what are they asking for, leslie, that value act? at least it wasn't completely clear beyond what you would expect. >> it was kind of a wash of things. exactly. do better. we think this is an attractive valuation play. they did say they would be interested in pursuing an awards seat at the company. it goes back to the idea -- >> it appears roughly at 70%. it is tied up in the trust. let's call it a 70%. >> the majority. >> yes. you are not going to get past anything like a one. >> and discussing changes to management, changes to board composition, changes to business strategy. there was a letter that got sent out to investors looking at just the potential, how lucrative a bundle would be for the times. they have all of these subscription products that they have invested in recently. crosswords, more athletic

hooking. they have a very nice recipe section. but kind of bundling those together. and having people subscribe, i think part of their basis as well. >> it seems like we have some helpful strategic thoughts and maybe they will take them, as opposed to a hostile, this company is being mismanaged. >> which is close to what we see with elliott and pinterest and paypal as well. we have some for you guys. let's put out a statement and they are taking our feedback and we are giving them feedback and all things are bright and dandy. i have actually heard, despite the fact that at least for the first half of the year, this changed in july. the first half of the year, activism was a very, very lossmaking strategy. it was pleading for their lps. so some of the smaller activists

are licking their wounds on the sidelines as they try to replenish the coffers and figure out what to do next. other more established firms like the elliotts of the world are doing things like this, where they are seeking long-term bets but not necessarily rattling the cages just yet. >> yeah. i can't remember the last one with elliott. i have been more focused on buyouts. we can make some more for that sometime back. i always wonder what elliott's performance has been like. i am not quite sure. at&t, has not gone well for them all. that was a large position for that firm. it is an interesting point. there is still going to be activism. there is no doubt. sometimes, for example, fedex is something i could be covering, and they get free board seats. no fight. no nothing. >> these are really big firms. that, too, has changed in the last five or 10 years or so.

they have a lot of money to deploy, so it can't all be a proxy fight. >> it often isn't. they are obviously very happy to have it not be and to get what they want. they also have been very much focused on the leverage by outside where they have been very active. this week, they got a deal done where they windacre, the 27% holder, i am not clear on what else they offered to make that deal happen. i recall, i think on monday or tuesday. and then the centric steel as well, which figures into the financing side because the banks there made a promise on that deal that meant that they are looking at significant losses as they syndicated, but given rates and what they have fallen to perhaps the losses will be as bad as people thought. that is important financing, given the size of that. one of the largest we have seen in quite some time. >> i mean, somewhat related to that, the market for corporate

credit has actually firmed up nicely in here. it seems like it got right to the point. if you look at things like that, almost that we have to start worrying now. recessionary. exactly. it is really racing back. it has been this huge rush. bank of america talking about big inflows into corporate debt funds. so people have basically tried to lock in. again, it reflects the idea that if we are not going into a recession, with a high nominal growth economy, actually interest ratios look pretty good. you left a little bit of yield on the table and people grabbed it. let's see if that stokes anymore activity. i don't necessarily think that people are running to finance the riskiest deals, but it shows you that it's out there. it certainly is. >> i did want to mention something specific to the building we are in.

five chinese u.s. listed companies seeking to delist from the nyse. this has been a story we have been following for some time, given pressure from the chinese government. separate filings to the hong kong exchange, china life insurance, china petroleum chemical aluminum core, so they would apply for voluntary delisting of their adss from the new york stock exchange. this has a generally negative effect across the board for china. these shares are down about 1.3%, with some pressure earlier in the week, perhaps mistakenly when we heard that the bank had reduced its stake. the banks already accounted for that, so the selling had already taken place, potentially, is my understanding. it is not as though there had to be further selling, if they did officially take the steak down in 2014 in alibaba.

on this news. >> the companies that have elected to do this have kind of stayed back to the former state owned companies. china officially has somewhat downplayed the move afterward, saying that there is no impact on firms. in other words, it doesn't seem as if it is part of any further orchestrated crusade. they are trying to say it's not a big deal here, for what's that worth. >> i don't know if it's normal to delist, but it definitely speaks to the fragmentation of the capital markets in this environment, which wasn't the case a few years ago. also, there was an ipo, a new listing in hong kong. china tors duty three core, which raised $2 billion. they had shelled that deal due to market conditions and were

initially eyeing as much as $10 billion from the offering. this will still likely be the largest listing in hong kong this year, implying a $57 billion market cap. the company, which operates less than 200 stores, mainly in airports, cruise ships, downtown areas, they do the duty-free stuff. if you want to pick up a bottle of vodka on your flight back, that is where you would do it. >> that is what you pick up on your way back from china. member that stuff. >> long fight. >> of course. one of the biggest deals of all time. only days later we found out they had run file with chinese regulators. they are still running for the idea. good news is it is up 52 and 37. >> yeah. i'm not sure if there is a market cap. >> it is still $14 billion. >> it shows how big of a splash that was meant to make at the

idea. absolutely. i just want to give an idea of how the market has rushed back into the most cyclical types. united rentals is always on this and obviously construction, but also just in general. it is about one third of a percent today, but it is up 40+ percent since late june, and has just gone vertical. a lot of stocks that look like that that sort of went right into the abyss and bounced very hard, and now it is like, here is the challenge to figure out if something has really changed or if we just had a violent shakeout. people are pointing out that there has been a firm bid in industrial speaking. transport. if that is just kind of saying, the economy is going to muddle through, or the acceleration, remains to be seen. >> at. what a move. there it is. 32%. still to come, we will have an exclusive interview with richmond fed resident, thomas barkin.

before we had to break, let's give you a look at the bond market this morning. the bond report. we will take a look at how things are faring. we talked about how this has been favorable to some banks, making commitments previously in the higher or far lower yield environment then we raced higher. as you can see, we are still two years over on 10, 3194 to 2848. we will be right back.

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amazon rebounding a bit. over the last three months, up over 30%, recouping some of the company's losses since the beginning of the year. is now the time to jump back in? our next guest saying the worst is firmly behind the e-commerce

giant. that implies a 30% upside from here what do you think would be the key drivers to say now is the time to buy amazon >> good morning, leslie. much of it was the presentation of comparables as you enter into 2023, you'll have merchandise value on the retail business accelerating, the revenue in aggregate, aws in 2023 should exceed $100 billion in revenue, and maybe most importantly the margins are in the process, and on a calendar basis should improve from 3% in 2022 to over 5% in '23 that tends to be the best time to own amazon shares where margins are rising i think it has a good 30% to 40%

up side over the next 12 months. >> does that require a pretty accommodative macro backdrop for that to take palace, or is it idiosyncratic regardless of what happens with rates and other factors here >> it would require a relatively normal macroeconomic backdrop. amazon would not be immune to material deterioration in economic trends, but from a base case standpoint, with neutral economic conditions, i think you can make those expectations that i described. you have a stock that's not depressed, because it's being priced off the most recent comps. as that reverses, you get the continuation of the rally that's already begun. >> scott, to what degree of this

process trying to over-rationalize the pros, the over-hiring, there was a sense that almost they were bearing the burden of a lot of logistical costs that were going up, and then investing indiscriminately on top of that. is that a process we'll live with for a while >> well, it could, but we're also coming out of that. i would make the argument, you know, that counter to your -- i think the current consensus view, that amazon didn't do anything wrong during the pandemic s oil prices increase, the cost of labor has increased, costs increases outside of their control. the things inside the company's control was managing to a peak that no one could have imagined when or at what level it would be, that they're now coming off of, it's the natural evolution of post-pandemic business.

amazon, interestingly, during the pandemic, the head count double to 1.6, they've come 100,000 off that peak, but even more impressive, the fulfillment center footprint, the company added more fulfillment center space during the pandemic than it had during the 25-year existence believe that so there's normalization coming out, and we're seeing it now, but ultimately as they grow into that, it contributes to market expansion. >> all right well, scott, thank you very much for joining us have a flienice weekend >> thank you. robert frank is in miami robert >> reporter: they're calling it the citadel effect, causing a boost in prices in both the residential and office market. we're going to look at the

mansions, apartment buildings and office towers that citadel and ken griffin are buying and building here in miami, right after the break.

good friday morning. welcome to another hour of "squawk on the street. i'm david faber with leslie picker and mike santoli. we're live at post 9 carl has the morning off morgan brennan is on maternity leave. on a week when we come into is the s&p up for about the first four days of trading we are getting breaking economic data we'll go to rick san telei for that. >> we're getting our august preliminary university of michigan sentiment it's important to say preliminary. these things can change in a couple weeks 55.1 is the headline, stronger than expected, sequentially following a final read of 51.5 do remember, in june at 50.0, the lowest read ever since recordkeeping. if we look at what's going on in current conditions, 55.5, it's a

disappointment and sequentially it's lower than 58.1 55.5, well -- 53.8 in june was the all-time record low, so at least it's above that. if we look at expectations, 54.9, better than expectations, and blows away 47.3 in the rear-view mirror 47.3, the last look was the lowest level since 1980, so a nice improvement on the one-year inflation, 5.0, 5.0, that fools 5.2 high water mark there was in march, and that was 5.4, the miest since '81. five to ten-year inflation outlook, 3.0, higher than we were looking for, higher than 2.9 in the rear view mirrors, and one tenth lower than both june and january when it was 3.1. those were the highest levels

since about 2011 definitely some improvement. five to ten-year getting more sticky that's interesting to thin that respondents are juicing up some of the more distant expectations for inflation. leslie, back to you. >> those distant expectations are still above the fed's 2% target as well rick, thank you so much. we are 30 minutes into the trading session. three being movers we're watching illumina tumble, saying a challenging environment is offsetting growth. "new york times" up big after activist investor revealed a 6.7% stake the value after purchase, more than 11 million shares reportedly wants the news organization to push further into subscriber-only bundles and finally, lennar getting a downgrade from neutral to

outperform they say there are no near-term catalysts for a significant move higher from here those shares down about half a percentage point right now data showing further slowing in inflation, so will the fed stick with the hawkish hikes joining us in a cnbc exclusive is richmond fed it chair, tom barkin good to see you. >> thanks for having me. naturally cpi, ppi index, university of michigan sentiment, it follows the fed survey in a similar direction. how does it filter into your view of whether the fed is on course to get inflation back to target, what it means for policy in the near term >> well, wednesday's day, the ppi data was all very welcome. we're happy to see inflation start to move down i would like to see a period of

sustained inflation under control. until we do that, i think we'll have to continue to move rates into restrictive territory >> a period of sustained declines in inflation. so multiple months how do we know when we're there? >> well, you'd lied to see inflation running at our target, which is 2%. i would like to see it running there for some time. >> you say we need shorter-term rates into restrictive territory. do you agree that at the moment we're in the zone of neutral i suppose, how do you think the economy is set up to absorb that movement into restrictive territory? >> you know there's a wide range of estimates of neutral. a lot of times you learn about it when you're doing it, but i think there's still more to come to get into restrictive territory. the economy seems to be weathering it well

there are obviously sectors that are more impacted than others, but if you look at the jobs report, the other data we've been getting, it still seems like the economy is in a fundamentally sound place. >> tom, that's -- my question there, this idea that if the labor market is so strong, if there is such tight supply in the labor market, does that present a floor, and present a challenge to the fed's ability to get to that 2% level in controlling inflation, even though wages haven't kept up with the pace of inflation, it's still a very, very strong labor market right now. >> i guess i just start with inflation. a tight labor market doesn't have to cause inflation. we certainly had a tight label market in 2018 and 2019. it's driven by commodity and supply issues, and it's being driven by demand as we move rates and try to normalize demand, hopefully

we'll get help from those two lanes as well. >> tom, we've seen in recent weeks, obviously the equities have rallied credit spreads have come in, absolute yield levels are also moderating off their highs in other words, in fact, some measures in recent weeks, it's been a pretty extreme loosening of those financial conditions. does that itself influence fed policy in other words, do you feel as if thats counter-productive to the fed's effort to restrain inflation from here? >> well, i think we are trying to influence financial conditions and what we do. the metric i look at is real rates. i want to see real rates across the curve, sustained in positive territory. that has two pieces to it. one is obviously the rates the second is the inflation expectation. those things i think have to move together. i think we're on the bring in moving real rates.

we need to sustain it there and we need to follow through on some of the expectations that are out there in terms of rate path, in order to keep it there. you have to look at the market in the context of inflation expectations. >> speaking of inflation expectations, mr. barkin, you talk about three lanes demand being a key one in terms of flattening. are you seeing signs to your satisfaction that that's already beginning, in terms of the demand curve >> demand is particularly softening, especially if the sell to lower-income consumers, which are continually stressed or if you sell products that are beneficiaries of the covid boom. if you talk to people in furnishings, appliances, housing, if you talk to e-commerce providers, all of them benefited from the covid boom, and those businesses are definitely coming back to normal on the other hand, if you talk to people who provide higher-end

services, if you're still looking for a hotel room or flight this fall, i think those sellingments are still very robust. president barkin, just before we started chatting, we did get the university of michigan data, the inflation expectations -- well, actually the overall consumer sentiment was a beat it seemed there was an improvement. right away the bond market spooneded, shorter-term yields did climb, we know it's been deeply inverted for a while. is that in itself a signal that concerns you is it a clear read on what we ought to expect, which is continued policy rate going up, but not for very long over the ten-year span of a ten-year note >> well, first of all, on the sentiment numbers, i just say consumers really dislike inflation. one message i get loud and clear as i wander around my district, we don't like inflation, it's

exhausting, it's unfair and creates uncertainty, and they're very pleased we're doing something about it that response will get reacted to by the market i get i'm influenced by a good friend who did a bunch of work in the '70s. the number one lesson from marvin's work is you don't raise rates and lower rates, and ray and lower rates every time the economy bounces around what you try to do is try to get inflation down on a sustained basis, and then you have the freedom to loosen. i start with getting inflation down on a sustained basis, then we can talk about what we do with ra rates. >> is a sustained basis like, you'll know it when you see it >> if you can get to our target for a number of months, i think that's what we'd like to see. >> a number of months. in therms of a recession, you have written a recession could happen in this process, but if

one does, we need to keep it in perspective. what does that mean? >> nobody every cancels the business cycle we'll have up turns, downturns not every recession is like the one we remember from '08 and '09, which had a number of knock-on issues from the financial sector there's been a lot of recessions in our lives that have been relatively modest in their impact, and not every one has to be severe. >> would you urge your colleagues you are your peers to be more aggressive at september, pursuinging a 75-basis point hike, which is still six percentage points-plus, from where we are right now >> we have a lot of time before september. so i'm going to keep my eyes on -- we've got one, maybe two jobs reports, another cpi

report, so i'm going to keep my eyes on that dodd and make up my mind as we get closer to the meeting. >> gefiven the tightening that's already happened, how much allowance do you give to the reality that takes a while to affect activity, and therefore you can get to the point where you're waiting for the economy to respond without necessarily having to do much more in the near term on rates >> well, one thing i'm asking myself is whether the transmission model has actually gotten faster with the pervasiveness of information in this economy if you look at what happened to mortgage rates, for example, back in december, when we first started talking about tapering, you could see the impact happening a lot quicker than maybe those days where we didn't even announce or rate moves. so i'm interested in whether the transmission cycle might be a bit quicker, and i'm watching, as i said, the real-time data to

try to get as much inside as i can. >> we've soon an impact on job openings thmt has been an active debate as to whether in fact you can affect the tightness of the labor market essentially by having it loosen in that way, without necessarily raising unemployment very much do you think that that's kind of a plausible thing to expect at this point >> i think, to the extent the economy softens, that will weaken job openings. to the sense that it softens, that would increase unemployment, too. we'll see how much demand has to soften to get inflation until control, but i think they both move. >> in terms of the fed's balance sheet, the runoff is set to start in greater degree in coming months, do you anticipate, as we thought it

might be last name, a relatively benign process that happens in the background, discuss really affect things in the real economy, or is that part of the tightening effort we're going to have to deal with. >> i think if you believe that buying assets helps stimulate the economy during a downturn, which i do, then you have to believe that shrinking the balance sheet has some tightening effect. so i'm symmetric in that i've been pleased with the impact so far. i think the impact is consistent with what we're doing on the rate side, so i don't have any problem normalizing rates, and trying to normalize the balance sheet at the same time. >> president barkin, the independent flation reduction act is expected to be passed by the house today. there are different schools of thoughts some believe it's stimulative to the economy. others believe it help bring down inflation i'm curious if you looked at

this at all, and what it does to your goal of bringing down inflation. >> i won't comment on legislation, but i will say there are times that fiscal stimulus pushes things forward what we have to do at the fed is take whatever the situation is on the fiscal side as a given and make monetary policy against that we stay in our lane. you take the economy as a given and make monetary policy against that, and we'll see what impact this does or doesn't have. >> we will president barkin, we really appreciate your perspective to today. thank you very much. >> thanks for the time. we have a road map for the rest of the hour rivian started down this morning, of course losses are still mounting we'll have more on that company and the overall ev industry. bitcoin up more than 20%

the cofounder of tether is with us on how you may want to play the space. citadel's kegrfin n ifgoing on a billion dollar shopping spree. the details are up next.

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welcome back to "squawk on the street." take a look at the spdr it can sector xlk, down 14% on the year, underperforming the s&p,

but rebounding since mid june. two of the names leading that rebound, two of the biggest companies in the world, some would say a huge part of the market, amazon and apple investors once again turning back to these names as safe havens, while volatility continues. david? still to come, we will be live in miami. robert frank has a preview of what's coming up, and he's on a boat. >> reporter: this is star island, home to many of miami's rich and famous, including diddy, a-rod and gloriaest ban ken griffin, however, is the new king he bought this houseb hind me and probably plans to tear it down we'll tell you why, and what else he's buying and building here in south florida. nope.

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rivian shares, after starting lower, are up about 3.5% the ev maker did meet

expectations, but trimmed its outlook. our next guest maintaining a buy rating and price target at 46 bucks, arguing arrive jan has the potential to become a large ev player. emanuel, good to have you. why are you positive on rivian >> i think in the near term, it's very much about operational execution, and their ability to ramp up production they've had tremendous issues since the ipo. now there's signs that things are getting much better. so if they can get this underway, i think there's extremely strong demands for their product, their order book keeps building up. there is a strong partnership with amazon for the last-mile delivery the demand is there, now they have to provide the supply they have the potential for becoming one of the leading ev players down the like.

>> the inflation act will be signed, soon, but it has to be under $80,000 for it to be included is that a threat to rivian >> you're exactly right. you know, the first product, which is the r-1, the luxury pickups and suvs, you know, basically the price points would not qualify. commercial businesses that would buy the pickup truck, they could still get the credit i think the real opportunity for rivian from the act is really on the advance that they're building for amazon, and then down the line for other customers. they could get the $7500 on those, and then on some of the more heavy-duty ones, the provision in the bill is for up to $40,000 in tax credits. this is something that can make the economics so attractive that

just about every last-mile for every commercial company would want to buy electric, essentially boosting that tremendous need. i think in the near term, the consumer angle is probably too expensive. down the line they'll have a cheaper model, but in the meantime it's released on the commercial vehicle side. i think this could be really attractive incentive. >> it's going to be all about deliveries, i guess, right negative free cash flow of $6.7 billion. obviously they won't be anywhere in the green for a few years you're comfortable with that, and that they had the necessary capital to get them through? >> so, it's interesting, because the company because it's been putting focus on preserving capital. it's a big shift from the strategy so at the same time yesterday think eye nounced the ebitda losses would be higher because

of inflation, they also cut back on the cap ex. they're committing not to raise any more cash until 2025, when they will be launching the next factory, as well as the cheaper models in our model, we're still seeing down the line they need to raise more capital if they show strong traction, i think investors may be willing to give it to them it's not any time soon there's no question that capital enhances the business, and in rivian shows traction with it, more investors will be on board. one of the key issues was the inflationary pressures with regard to freight, with regard to the uponent parts what does that do to their able to be competitive with regard to pricing? >> yeah, i think this question

has two parts to it. there was some supply-chain disruptions, the inability to actually produce at the targeted cadence. this seems to be getting better. essentially they're implies a fairly major acceleration in production in the second half, which means they feel they will get the parts, they have a good line in this it seems to be heading in the right direction, and we're hearing that from other auto makers as well most other ev makers raised prices, because demand is so strong rivian, obviously, as a result of the backup earlier in the year, is struck with their existing pricing there's not a wheel lot of what they can do. in the near term, maybe through next year, they're optimizing capital spending, trying to reduce the cash burn, but i think that every single reservation that's come through

since june is essentially at a new price, this is more than $90,000 per vehicle. this is something that would enable them to improve profitability. the answer is not much they can do in the near term, as in down the line you could see a large inflection point in profitability, once they go through the initial vehicles and move to the more recent reservations, which have been priced at much higher levels. >> emanuel, part of the implied bull case in tesla, and the reason it's above $850 billion in market cap is the headstart the company had. it's never been demand-constrained, really they have plants around the world. the capacity has grown to immediate the demand they therefore seem to have scale in purchasing, and the scarce resources that in fact go into batteries and all the rest of it. is that an insurmountable advantage? is there enough room in this

market ultimately for rivian to really ramp up to a significant scale that's going to justify where rivian's market cap is already? >> yeah, there's no question that this is a considerable competitive advantage. tesla is one of our favorite stocks in this broader automotive group we think their ability to secure supply, this goes all the close to full vertical integration, securing all the minerals and components that need to go, to be involved in the chain as possible, has already and will continue to be a considerable competitive advantage. rivian starts certainly later, but extremely well capitalized with the essentially partners and auto books ought to be inspiring, hay, look, we already have reservations from a amazon, this is safe, secure, wouldn't you want to be a part of it? sfwlz reservations for the r1

consumer product there's a lot of cash on the balance sheet. that sort of makes it an ideal candidate to build a good relationship on the supply side. there's no question in my mind that tesla is several years ahead, and this is going to be a fairly meaningful competitive advantage. >> emanuel, thank you. >> thanks for having me. time now for a news update courtney reagan has that for us. >> here is your cnbc news update former president donald trump is deniesing a "the washington post" report that fbi agents looked for agents relating to nuclear documents, and he says his lawyers won't oppose the move from the doj. actress anne heche is no longer expected to survive her injuries a spokesperson revealed he suffered a serious brain injury. she's being kept on life support

to determine if any of her organs are viable for donation the cdc is once again relaxes covid-19 guidelines. the health agency is no longer requires people to stay six feet away from others it's also lifting the requirement to quarantine if a person comes in close contact with someone who is infected this comes an estimated 95% of americans older than 16 have required some level of covid immunity back to you. coming up, after the break, much more from our interview with richmond fed president tom barkin as investors weigh what's ahead for rates. and s&p for its fourth positive week in a row. that would be the longest win streak since november of 2022. and it got back half of e arthbe market losses at this level. we'll be right back.

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all right. let's turn to china, shall we? they said they would delist from the new york stock exchange, this over heightened economic and politicalchallenges with the united states, of course it's been going on for some time, regulatory changes, pressure from the chinese government, to some extent much of it started with didi, and then quickly changed, of course, with a significant crackdown on various regulatory structures within china. this has pressured chinese names across the board to a certain extent there was a time when you couldn't come into this building at a time when a chinese company

was going public. >> china has shown some unwillingness to allow its companies to be globally capitalized, national champion-type companies, that they would rather have control than foreign capital, to some extents. >> the case for the dual listings is the unique nature of the capital markets here in the united states. it's got a deeper history, there's nor diversity in terms of the times of investors, so that was always the reason why i heard from bankers and people who work at the vary your exchanges why foreign companies would even choose a listing here or dual listing. >> this does go back, though, as well to the s.e.c. wanting to be able to have effective audits of these chinese companies, and

some sort of agreement being reached with the chinese in terms of allowing that to happen, and could result anyway in many of these companies being delisted as a result of not allowing for those audits that the s.e.c. has asked for all right. let's move on. tom barkin joined us not that long ago right here on mosquitoes squos here's what he had to say about the state of inflation, and, of course, possible rate hikes ahead. >> we're happy to be inflation move down, and i would like to see a period of sustained inflation under control. until we do that, i think we'll have to continue to move rates into restrictive technology. we would look tyke 2%, and running at our target for some time. >> obviously we got some headlines as well on the reduction of the balance sheets

that we got to towards the end of the interview. >> not flinching, really, not straying from the framework they have laid out. we need to see it in the data and multiple months in a row, it has to be sustained. vice chair brainard said this a couple months ago. it's been the party line at least the bond market seats a potential pivot ahead. they don't want to really give a lot of credence to that or endorsement, because it doesn't serve the purpose. as he said, we want to tighten financial conditions i think there's some thought out there that, oh, if you get core pce running kind of in the ballpark, maybe they'll say wait and see. maybe, but not a lot of evidence there of a willingness to concede that. >> it really is also 2% target,

and we want to be aggressive the fed should continue on this path of rate hikes it's interesting, that took the one month of good news in july inflation numbers on both thursday and wednesday and said, okay, maybe we can start to see some sort of, you know, whether it's a slowdown in these rate hikes, whether it's a reversal to a rate cut -- i don't think that's necessarily the case. it took that to be good news it helped to provide a key driver >> there is a case that says, if you go out six months, and the inflation numbers are coming in up against the super-hot readings we've had this year, i mean, there is -- we thought this was going to be the story for the first time, and it just doesn't have the statistical mean reversion, gas prices are off their highs, and you get more help from the economy itself

they want the target, as you say, david, he thinking it has a tightening effect, it moves in step about what we're doing on rates, whereas other folks say it's kinds of in the background, and the last x amount of trillions builds up didn't stimulate the economy or liquefy the markets that much. we'll see. that would be the test, because, of course, it also really matters that the give is issuing more debt. >> david asked about overall demand destruction, which they are seeing evidence of as well ken griffin buying up more than a billion of florida real estate robert frank will have an inside look at the properties, but let's get to a sneak peek of what to expect robert, you are inching ever closer to the house as we continue to see your teases.

>>. >> reporter: leslie, this house is ken griffin's latest purchase right here on star island. he's likely to tear it down. we're going to look inside the real estate empire here of ken griffin and what it means for sthn ora.ued wealth migration toouerflid rcharge your audit system? so you tap ibm to un-silo your data. and start crunching a year's worth of transactions against thousands of compliance controls with the help of ai. now you're making smarter decisions faster. operating costs are lower. and everyone from your auditors to your bankers feels like a million bucks. let's create smarter ways of putting your data to work. ibm. let's create

bitcoin is seeing some losses today, but up 20% over the past month also, watching ether up 80%. joining us to late out the outlook for the space is william tether what do you pin on some of the recent rebounds? what are the key drivers >> i think what we have seen, as wall street recovers, bitcoin and crypto overall recovers. keep in mind that all tokens are tightly correlated to bitcoin, so wherever bitcoin goes, the

other tokens tend to go, and usually by some multiple bitcoin goes up 30%, ether may go up 60%. >> i know there's big news in the crypto world, and expected to be less energy-intensive as well is this where you see growth going forward? >> maybe with the exception of bitcoin, all popular chains will be not using the traditional miners that bitcoin uses, where they compete with each other and generate a lot of computing power. ethereum is the most used blockchain from a developer standpoint, because it has smart contacts and whatnot, in five

years, i think all chains will be virtually by proof of stake. >> we've seen the failures in some, and i think a rockening -- people are trying to figure out the legitimate uses, and what's going to come after it. >> right >> how does it play from here on out, do you think? >> i would say one thing first i don't think there's been any issues with de-fi, true decen decentralized, it was c-fi mass crating as de-fi, so celsius, blockfi, things like luna that were used by both of those to generate returns but i think most of the major applications and protocols did quite well, even with

substantial volatility >> bring it to, i guess, more of a practical level to make that distinction. what are the types of activities that you felt 1/4 not really de-fi and reamly have not fared well. >> if you think of decentralized finance as mostly about using on-chain assets and doing everything on chain, using smart contacts, so not a lot of human intervention, and it being fully transparent. you can see if something was hypothecating the collateral i gave that smart contact to get a loan with c-fi, it's like a bank, just owned by individuals. they took that collateral as deposits, and never revealed what they did with it. what they did is put it into risky applications i don't think they fully understood the risks they were taking with customers' money

if anything, i think the transparency of de-fi has really awakened people to the fact that this is probably the right direction, and c-fit lending applications will have a harder time going forward. >> how do you distinguish tether from what you just described there? >> well, of course, tether is a stablecoin it's securitized or collateralized against deposits in a bank. that was always controversial for people how do we know that that mine is actually in the bank at this point, after eight years of very, very gps opeood operat and when you consider tether has a lot of confidence, it's the most traded stablecoin in fact, half of all trading pairs settle against tether. a lot of market volatility, that

gives people confidence. >> but there's still regulatory attention there, still ongoing investigation, a bunch of rumors swirl around twitter on the internet, with regard to where they're at any update >> i don't have any particular insight into that. i will say with congress's consideration of the stablecoin trust act, which basically specifies stablecoins are not securities, can be used for payments, and they'll either be regulated by the office of control of currency or a state-level money transmitter license, i think that's wonderful. with what pat toomey is doing, what loomis is doing, gillibrand are doing, trying to give guys like us some road map into the regulatory and tax implications of crypto, i think it's quite positive, maybe by the end of this year, we'll have stablecoin act actually passed. >> we'll look forward tothat

thank you so much, william, for joining us. >> thank you. looking for opportunities in the chip sector? bank of america says to buy global foundries, adding the stock to the u.s. one list for more head to cnbc.com/pro. the stock is up 10% this morning, and down less than 2% for the year we're back in a moment you could end up with this... unexpected out-of-pocket costs. so if you're on medicare, or soon to be, consider this. an aarp medicare supplement insurance plan from unitedhealthcare. medicare alone doesn't pay for everything. and what it doesn't pay for, like deductibles and copays, could add up to thousands of dollars. medicare supplement plans help by paying some of what medicare doesn't... and making your out-of-pocket costs a lot more predictable. call unitedhealthcare now and ask for your free decision guide.

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all right, miss the return of meme stock madness. we did see that a bit this week. bed, bath & beyond a good example. here is another stock that is up, what, 80% this month alone adam aaron tweeting a likeness of himself as an avatar character. highlighting his company's plan to issue a dividend to all common shareholders in the form of preferred shares. that preferred equity set to begin trading august 26th -- 22nd, excuse me, at the nyse the ticker will be, of course, ape. all right. quite a likeness there. >> so, in theory, i guess down the road if you have this preferred share out there, you might be able to use it to raise

actual capital for the company >> that's his justification. >> remember, they're at the limit of common shares they can issue and we'll get a vote to approve a higher ceiling -- >> he said in a shareholder letter on thursday that given the flexibility that apes will give us, we'll be able to raise money if we need to or so choose, which immensely lessens any survival risk as we continue to work our way through this pandemic to recovery and transformation just a perfect case study of exactly what can happen if you find yourself the subject of a -- this meme stock mania and the ability to -- the financial flexibility it can afford you. >> you can capitalize emotion when -- >> adam has been the most successful at that >> and he says talk about survival risk, $5.5 billion of debt on the company, something in that order. the current trading yields anywhere from 13, 19%. so clearly some risk

>> absolutely. coming up on "techcheck," u.s. growth stocks recording the largest weekly inflows since december 2021. they'll have some stocks to target and toast surging on results, the ceo is coming up next hour that stock is up 12% right now "techcheck" starts at 11:00 a.m. don't go away.

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we have teased all hour, kevin griffin is buying some miami real estate. let's get over to mr. 305, robert frank, about to make an amphibious assault on the property itself. he's in miami. robert >> we're staying a little more clear this time around this is, though, the latest real estate purchase by ken griffin, part of what local brokers are calling the citadel effect citadel's move for a headquarters from illinois to miami causing a boost in prices on the residential and the office market. the company just bought a 2 1/2 acre parcel for $333 million that is more than 20 times what the buyer paid for it back in 2000 the company also paying less than just under $300 million for a temporary office building while they build that new headquarters

brokers say that lots of other companies are calling them now after this citadel announcement to follow citadel's lead >> these are big companies, these are smart companies. and when people read about, you know, like a company like citadel coming down here and opening up an office, they realize these are smart guys, they must have done the due diligence, it becomes the herd mentality. >> very smart guys and very wealthy guys this house that ken griffin just bought here on star island is 16,000 square feet it is about two acres and it is likely that ken will tear it down because he's actually bought four properties here on star island that will become his new home just about an 18 minute commute to their new headquarters over on brickell. guys >> amazing the demand that it may be creating. as for griffin himself, he still owns an enormous amount of real

estate other places too, doesn't he, robert >> yeah, so he's still got the most expensive home in chicago he's got the most expensive home in new york. and america, with that $240 million apartment, just off central park south, he just bought that calvin klein place in the hamptons in 2020 and he's got all these properties here and he is building the most expensive home in america in palm beach, that will be 25 acres, that will be larger than mar-a-lago with a 44,000 square foot home he's building in palm beach for what he says is for his mom. >> robert, whenever you hear hedge fund manager or anyone else of that ilk moving to florida, you think taxes immediately. is there any kind of benefit to citadel, to griffin himself moving the empire down to florida other than just really nice weather as it appears you're enjoying today? >> well, i think it is the nice weather.

it has got to be the taxes for somebody like him who makes over a billion dollars a year in income setting aside carried interest issues but what ken has said over and over, and he told "the chicago tribune" this week, what he loves about south florida miami is the optimism here he said you don't have to talk about crime every day when you're at dinner with people, he said people are really talking about the future, about growing their business, and he said you just don't get that in illinois or in new york so, yes, it is probably a lot about the money and the cost in doing business here. and the fact that a lot of very skilled workers now want to live in south florida, but he says it is also about the environment which he thinks could also help grow the business faster than if they stayed in illinois or continued expanding in new york. >> yeah. going to build a bigger seawall behind you, robert speaking about the future? >> probably. now that we're here, he's probably going to build a barrier so we can't come out here as much once he builds the new house. >> i was talking about the possibility of rising sea levels overall and what that will mean,

but fascinating to watch still rocking out there. i think you should take a shot at it. go for it, robert. get on the land. give us a close-up view of what he's going to knock down great reporting, robert. thank you. robert frank from miami. that's going to do it for us on "squawk on the street. thanks to mike and leslie as well that will do it for us have a happy weekend, everybody. "techcheck" starts now good friday morning. welcome to "techcheck. i'm deirdre bojesen in san francisco with julia boorstin in l.a. and editor in chief at the verge nela patel we're closing out the week with a look at the tech rally amazon, apple comes back within inches of its all time high. more on the rest of this morning's big movers, posh mark, shares plunging. toast is surging don't miss toast's ceo chris comparato later this hour. we'll look at china tech as well