the market before we hand it over to our friends on "squawk on the street" and the dow is down about 147 points, and we will see the 10-year at 6.8. becky, see you tomorrow, and make sure that everybody else sees us as well. "squawk on the street" begins right now. good wednesday morning, everybody. welcome the o "squawk on the street." i'm david faber, and jim and i like to call this hump day, and you will see that we are looking for a open, and we are looking for another open with target and lowe's, and out with a open and

though the stocks are moving in a different open. carl has the morning off today, and so we will talk about the new one, and how about elon musk with the new manipulation buying manchester united saying it was a long rung joke. okay. let's start with the retail. and now, starting with ltarget cutting the bottom, and lowe's at the higher end of the projected range, and i like to use the hand with higher end.

yesterday, walmart, and you and sarah speaking about it. >> yes. >> and sarah talking about the flannel shirts. >> flannels. >> and the quick take of target, and brian said get rid of it, and i don't care what the price is. >> yes, and when you tour the store, this is what you will see. a lot of areas where they have good back to school, and home stuff, but it was taken up by grills and tvs and that was dumped which is why they bottom line was so bad, but the top line was preserved and the fact that the stock was up big yesterday means that today has to give back some. >> up there with sympathy with walmart. >> and stock could go low, because short term, i don't like it. >> take a note of that >> and the target did what it had to do, and don't forget that walmart has excess inventory,

and everybody is raving about walmart today, and i noticed that mr. rainy, the cfo was on, and he is bull bullish, and he u is -- he is new. >> and it is a short term decision, and he did what was necessary. >> look, the stores had to have as much current inventory for the associates to be able to sell. they weren't selling a lot of stuff, because it is wrong. it got in late. >> and cornell says that, consider the alternative, we could have held on the excessive inventory and tried to silt over multiple quarters or years and while it tried to help the near impact, it would have been held on. >> and while they got the stuff

from near east asia, they could have disposed of it quickly, and by the way, they didn't dribble over time. >> and jim, where did it go out of curiosity, because maybe i am wanting to be in market for it. >> ollie's army. they have some bargains on clorox things. >> i am not the market for clorox things. grills outdoor things. >> traeger cook. and go to ollie's, because they have every grill in the world, and you will not believe what they have. it is so right time. i have an ollie's is so great. >> we will go together >> i went to ollie's and i got tarps, and seven of them for the price of one. >> not the old asset program. >> you see, when you go to ollie's, you never know what you will get, and you have to see

what is hurting. you like the yankee candles? they can march on them at night and not only grant, but representative cheney there losing overnight. and lowe's, is do it yourself. and the do it yourself person, and they don't have as many professionals, but professionals at home depot, and the margin is at 222 at 66:03, and this would not surprise me if the stock was down, and people would say s i like home depot more, and this

was out, so i think that you can only go so far. t this is the market plagued by the two-year today and by what you and i will spend a whole lot of time talking about. >> the meme stocks. >> yes. >> and we will get to the two-year as well hitting since june and not as high as it is right now. and staying with lowe's for one more moment, and we have a quote from ellison who i know that you a fan of, and the results from the first half are disproportionately impacted by the miss that was by the pro growth by the ninth quarter, and the home improvement market, and also, the incremental bonus of 55 million. >> this is interest, because if you are the fed, and you are listening or reading these, and i have to presume they have somebody reading these, you are

still realizing that it is hard to keep it, and that is hard to keep people, because it is endemic, and that is a lot more work by the fed. >> and we were hoping to get the wages higher over time, and we have sat here for years talking about a inconsistent wage growth. >> yes, but it went the other side, and now you and i knowhe e with inflation. and we can't find the people who retired in covid, and they laid off a lot of people, and they have not come back to work. so if you are target, you have to pay more than used to, and give college degrees. and lowe's has to give -- >> well, they are not a university, but they would give financial aid. >> they are not a university. >> they are not giving college

degrees. >> i spoke to trump degrees. and i gave people like a summa tie. >> you are a suma -- >> that is oprah. >> and so what we are seeing is that wage inflation is not letting up, and this is not what jay powell wants. a lot of people yesterday -- and you were away, but yesterday was the ultimate bandwagon day, and people were coming on the network saying this is an interesting time, and they were shameless charlatans and so now it is time to realize that a lot of people were capitulated yesterday, and they came back in, and this is clarion call that the june 14 to 16 rally over >> let's talk markets and introduce that as well, because we got the earnings missing target, and some data missing

retails, and that may be weighing this morning on what is a five-day dow winning streak, and the s&p 500 is three consecutive days of gain, and that jay powell report will be released today. and that is why short term, you not positive. >> well, it can't be, and too many people coming in the last couple of days saying that this could be the begin of something big, and i want to say, the something big is june 14 to 16, and now that you are on the bandwagon, it takes a pause, and this is typical, but so i will tell you that it is part and parcel of the lunacy of bed bath and paralyzing of the management of sue goef. they are in some bunker and maybe the union store which is the first store in morris avenue, and they are in the bunker. union avenue, in the bunker.

>> the short term call that you are making. >> i am making a short term call, and what is the matter of that, because this is a show. >> you have some level. >> that is what i do. and funny you ask. >> no kidding. >> i am using the gamestop phenomena, and one of the biggest blows here with a decline of 10 to 12%, and thanks to jim stowto that rhymes with photo, and it is beginning of the decline of june -- >> you are comparing the meme stocks with the blowoff. >> it is rhyming with the minute stock manipulation which was recognizeded by vlad tenov. >> this is empirical data.

>> i am talking about the meme stock itself, and bed bath up 33% again today. >> you buy the out calls, and this is what has been planned for a long time, and you can't hedge, the people who sold the calls, and you can't hedge, so they are part of the panic, including 48% people who are moronically short, because if you recognize that everybody else was short, you are part of the gang tackle, and these guys were caught offsides, and they are flagrant and it is another 15 yards. >> so you are going to continue more so. >> well, look, they have to break. bed bath, they have the break, because it is the pattern, but unfortunately every time they do it, the average post meme pullback on the nasdaq is 12.2, so after they have broken bed bath, unless they don't have after money sale, which they can

do, that is because they have bad legal advice, and i will give them better, you will have a 12% decline, and be aware of that, and the increase started in this market when the two-year stopped going higher and look at the two-year. it is very bad. >> it is. all right. >> and look at what is right there in front of your eyes, and the gary ginsler, the chief right there. >> he is at home in front of the fireplace. go back to the office. >> and the guy that is the chief honcho for the government, i think that he was in the basement with the freezer. >> deez, okay. everybody is allowed to work in the freezer in august. really a new twist courtesy of the bed bath. >> come on, take it to 30, you

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well, we mentioned it a number of times the meme stock madness is back in full force at least when it comes to bed bath beyond shares and they are looking to be up yet again as much as 30%, and retail investors seem to be snapping up the stock in reaction to what

they say is a bet that was made by gamestop chairman and remember him ryan cohen, and the stock up as much as 70% yesterday after a filing showed that the filing of the venture co-op ventures that expired in january2023 and bed, bath & beyond soars adds much as 70% as meme traders talk up ryan cohen's call options purchase. it was the same thing. nothing new. >> right. >> he did not buy any new options. the only difference is that his overall reporting position was raised from 9.8% to 11.8% in terms of the percentage of the ownership perhaps because think were including some of the options as part of the overall economics and i don't have it clear. but going back to the filing

from february, and you will see 9.45 and 954,000 shares and then the information is right there on the same options. same ones. he's got right, the 1.125 million at 60, and then another 44,500 at a 45, and then another 500,000 at 80 all that expired january 20th, and not that it matters, because the stock is going to do what it is going to do, and it is a meme stock, and not new purchases is the point. >> but what is so brilliant about the purchases, done at a time when the stock was spiking, and not big, but spiking, and you are talking about 20 back then. >> right, these were done back in a long time ago. >> and the people who sell these calls tend to be poorly, and

really very poorly capitalized entities, and they can't hedge, because they can't pay a huge amount of money a strike above now, but they are the ones who are going to be broken, and they have no cause by the way. there is no legal right to say s hey, listen, there was a squeeze. they didn't have to sell the calls. david, what is important -- >> by the way, purchased on the 20th of february and the 1st of march all of these calls. >> and the people who wrote this right now are shaking, because if the -- >> by the way, ryan cohen has made a fortune. he has to be trading in nothing. >> he has made it almost in triple, but what is mattering here, david, can they break the people who are is short and break the people who sold the call. >> does ryan cohen plan this stuff, and rely on the memes, and he has not made -- and he got into bed bath, and the company is not doing well. gamestop is not doing well.

>> and the balance sheet is in question, and whether they can get the credit for this holiday season is in question, and there is about 950 stores, and all of the stores are close to targets. >> what is likely that the stock goes up or the company is bankrupt >> if the company were not so ill advised or would take my advice which is better than they are getting -- >> not gamestop, but bed and bath. >> issue 20 million shares right now, and go get quickly, quickly get approval, shareholder approval. >> they won't do it, and you know that. >> but they have to. >> and you said the same thing with gamestop, and they didn't do it. >> but after the money sale. >> they did it eventually. >> and bed bath can do it with the money sale. >> they won't do it though. >> and it is at least a sign to the vendors that you can send us holiday stuff, and we will pay. >> but you might as well take advantage of it. >> why not the stock is completely

overvalued on the basis of earnings, and they have put a huge amount of stock back quickly, and they are going to get lawyers who say, listen, we are scared that you can't do anything, and they would rather sink the ship than run aground. >> they are going to be crushed on the shortside. >> and the people who are shorted have shorted a lot of the stocks. >> and they did it with gamestop, because they shorted amc because they didn't no e if they would survive, and creative ceo. >> and it was a j.cpenney story, and they brought in the guy who didn't do well, and then the disastrous bond raise that broke. but a bed bath right now could do a convert, and whole number of things to do, and the reason why is because they are unsophisticated and poorly run, and they frankly don't know what

they are doing unless if they watch this show, and they can save themselves and get a short squeeze. let's do it. who are they afraid of >> kill the music and you just ignore it. >> their mommies i was always afraid of my mommy when i beat somebody up. >> you should have been. >> and when i got beat up. >> and we will have jis m'mad dash given how long we have gone over. we start to trade in nine minutes, and we will have more "squawk on the street" right after this your shipping manager left to “find themself.” leaving you lost. you need to hire. i need indeed.

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the only way inflation can continue come down is to stop the consumer -- watch or listen live on the cnbc app. all right. let's get to the mad dash before we have opening bell. the subject is one of the few

stories that i venture into occas occasionally. >> tjx. there was commentary on the analysts who said it is not going to be a good quarter and be careful. by their own admission they did not do the numbers they wanted and comp out the sales numbers, and david, the best for last, a lot of the merchandise goes to ollies and this is hard goods, the soft goods, the flannels to walmart, and the if this is coming down, you have an interesting opportunity, because they are the beneficiary of clearance. >> there is one next door, and goi in there to pick up nice shirts very cheap. >> that store has good security, and a lot of places don't. and by the way, when you go to target, you don't need somebody to get a razor blade. you know how you have to wait five minutes at walgreen's to get something, and cvs, it is a

shorter time. i have done a test. >> i was in home goods. >> they have done good numbers. so my daughter is at a flea market, and she sees a clock and thinks it is a good value, but it is at home goods for cheaper. and the best guy in the world is here from pioneer. how do you like that >> i like it a lot. >> we will talk to him tonight. and david, i missed you yesterday, because yesterday was the day when bed bath, and they really went into overdrive in what is a cruel and manipulative ways, and nobody is paying attention. >> i am. >> and how about the agency. >> and this, tjx is a good company. >> and look at the market, and people forget how big this company is. >> and manipulation, and unlike every other company, they said we didn't do as well.

honest people. >> take a quick break, and we will be right back. >> honest. the playoffs, and you to win the playoffs, and you to win your way for

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elon musk puts up a twitter post that he is now calling a joke might not be funny to the fcc, if they ever get back to the office. after starts out with a reference to politics, musk went on the tweet also, i'm buying manchester united, you're welcome. hours later he took it back saying that no, this is only a joke on twitter, and i'm not buying any sports teams, and adding that manu was his favorite team, and shares of manu were up as much as 17% of the news of the tweet. and you can see that still maintaining a more than 7% gain as we head into the day's trading. i don't know, what is he doing >> well, look -- >> i ask that question all of the time with him and his use of twitter. >> and the government has not

determined how to handle what looks like manipulation. david, do you remember the phony bid for hudson, and now they have intent, and they argue that he had no intent. >> it is musk. you know. the opening bell, and you can see them both here at the big board, and pioneer natural resources celebrating the 25th listing anniversary, and ceo scott sheffield will talk to jim. no surprise there later today. >> he always says, look, my yield, and the dividend, he wants it to have the highest yield on the s&p 500, and he has been success with that, and he is a great man. vi known him forever, and this a remarkable thing that he was the

leader in growth, and now he is the leader in cons serving capitol, and better numbers than almost every other oil company in carbon capturing, and we will talk about greenhouse gas, met methane. >> you are >> yes. i think it is important. >> they have the best plan >> yes, they do. >> and the other day when we were talking about devin, not so much. >> scott does it two ways, and thank you, rusty brazil, and he does not buy properties that generate a lot, and also, he has big plans to capture the carbon. and now, david, when you are drilling offshore, you have no methane, because that is the way it is. so more danger, and they tried to stop it, and the cleanest drilling is offshore, and that is not them, they are permian. >> you do generate methane when you are off shore, and i know that from my time there with --

>> well, they try hard not to. >> well, they try hard not to everywhere, but they try harder. >> david, did you know that nuclear, and a lot of companies are saying that nuclear is going to be making a comeback, and electric powers. >> well, it is ten years before we build anything, isn't it? >> well, when you are reading "midnight at chernobyl" you will get a second thought. and it is much better, and g.e., and -- >> i thought that it was better part of it. >> you see, germans decided not the decommission the last move. >> you think that is a good move >> yes. >> and you have any upcoming thoughts of the energy >> well, brian sullivan pressed us on that, and you would think that the weaker nations in europe would ask you crane to capitulate. >> well, that is not going to happen. they can ask all they want. but it is not going to be the case. they are hitting a different

level here with the ukraine attacks and crimea and now the russian response, and bombing ports. it is not going well. >> and now, the partisan, if they had not been armed by us. >> that takes us to oil. >> and scott sheffield has been adamant and we will talk a lot about this. >> please. >> if we had more pipe which is supposed to be part of the bill, and manchin had it, and we were supposed to add on to the bill, and get more to europe without hurting our price which is now at nine, and i will ask mr. sheffield about that, but the president is very anti >> and we have two of the biggest exporters. >> and we have the most other than qatar. >> and so what are you talking about, because we need more pipes -- >> you mean permian because of the natural gas that they have to get to where all of the lng

terminals are. >> but now more of the lgn terminals are full up, and you need more trains. >> well, you have the build them. >> that going to take a real long time, and this is baby thing, and then you get into it, and it is going to take years. >> long-arm term, and listening to -- >> wa ishat is that called th telurian. >> yes. and now, they have not been able to get pipe out of west virginia, but that is going to affect everybody, but if you want to keep the price of natural gas down in this country, and export to europe, you need more trains, and by the way, sempra is very good at this, and people don't understand them, but they are the fastest, and growing

utility. >> and by the way, they are what >> that is an interesting stock for people at home, and the best growth utility and incredibly well run, and i would buy it, and in the bullpen to buy for my chattel trust, and i have not pulled the trigger, and my bad. where do you want to go? >> markets for a minute, and the nasdaq is back down, and -- >> why is amazon down when they put up the chart >> what? >> they put in an amazing charge at amazon to bring in 500 or $600 million to help with the transport, and so what that tells is that the market wants to go lower and not higher. >> the only big name on the screen is apple. but it is up again, jim. only down 2.3% for the year, and basically call it. >> well, apple has been -- >> call it flat. >> and there was a recommendation to buy, an cross

recommended it. >> kroft >> credit squeeze. >> and what i like about it. when it is on the conference call, and shannon always asks very good questions. >> the analyst at credit suisse? >> yes. and i say this is teddy huberty is no longer the analyst, and i this they shannon who i do not know personality may be the new heck. so apple with the big run. this is a bandwagon stock. and one that says, ooh, i have to get in the market, and let me go to work here. now, david, there was a moment

andrew ross sorkin was being cut off about hearing aids, and they are the most expensive part of health care that is not covered, and the president has a bill that is waiting to be signed, and keep track of that. >> i am starting to lose mine everyday. >> and all of my friends are. >> and the ambiant sound, and back in the control room, they are telling me to get track of that. >> and the biggest seller of hearing aids is costco. and there is insurance for, you know, completely, and i have fortunately the means to pay for them, and costco is going to have the best hearing aids. >> and so i have costco flat,

and walmart flat, and tjx is down. >> tj is not down enough considering they had negative things to say about themselves, but that is an opportunity. target took the medicine. so you can't fault brian cornell on the bottom line being down, but the stock was up seven, and lowe's, because i prefer the professional to do-it-yourselfer. but by the way, the star of this whole period is ted decker. >> you talked about tjx, and we have to recalibrate, and tjx and target have the same market cap. >> your friend berman, and i have never heard anybody talk about tjx, and they are such a good retailer. >> and why is that >> carol meyer who never talks and eddie herman never talks, and they are the ultimate under

the radar outfit, and they do a great job. and home goods is so good. it is. and now, target is taking on home goods directly. >> yes. >> a lot of what they put in to replace some of the merchandise that they have offloaded because of how wrong they were, they have replaced it with home goods. so they are gunning for t.j., but they are gunning for bed bath, because, remember, again, the overlap is astounding, the parabolic move with bed bath, and historically, we had a big decline after tillway went parabolic. >> and beyond meat. and there is the move in bed bath, and stunning, because when they got rid of the ceo, and it was one of the worst moves. >> in my experience, there is that you can count on one hand in the 30 years i have and idzed

retail, one hand when you get to that number, they make it. >> and they said that citing the new buyings. they are not considering that, and only amc. >> well, they will stay the main street bets. >> they were citing the new buying from ryan cohen, and it is not new buying, and the options he put on early february and march, but the stock, it does not matter, and to your point, they should figure out any way to sell the new stock. >> and david, put yourself in the head of the short seller being squeezed here. he is obviously calling at this point, and maybe calling the limited partners or her limited partners, and saying, look, i got hurt badly, and okay, where are you, and well, i am still short, and they are told, listen, i want my money back, redemption, and which they won't get until the end of the month, but that is causing the people

who are shorted to cover. and then it is a self-fulfilling win for the people doing the manipulation. >> yep. i am looking at uber and lyft are down sharply, and i don't think that there is any news, but lyft is down 4.3%. wait, let me see. >> interesting. >> and uber is obviously well off of the lows and a strong quarter. you had dara on with you. >> yes, and he was terrific when he said that they moved the goalpost which he needed to pivot to cash flow, and instead of the willy-nilly revenues and that got the stockton run to go up. david, let me ask you about teleco for a second. that yield is on the outside. >> verizon has always had a significant yield for years,an the dividend obviously in the shareholder population cares about that.

>> the yield is the cause of what i would not say that scott sheffield is the pioneer, but the scotts are to decline and increase the dividends, but could this be t-mobile, and mike seibert here, and would you not switch to t-mobile if the networks were the same >> don't forget, yeah, don't forget that the nsbo that they had would help charter. >> that is interesting. >> and they are using their own network, and anybody who is watching any sports, and charter adds incessantly like we do in

new york, where spectrum is the product. >> they are off of the spectrum. >> and competing with verizon very well, and using their own network to do it. and now, as well, t-mobile is competing with charter and comcast as well as disconnecting with broadband and using a fixed wireless product where it can be used by going to t-mobile, they will ask not just your address but where exactly you live to where close you live to one of the towers and where there is enough fixed capacity to service you. >> and this is going to hurt at&t, too. >> well, they are in the midst of a fiber build, and in compete with charter and comcast. >> nightmare. >> not if you are a consumer. >> great.

>> that is why jay powell should be listening. >> and certainly, the wireless is important. >> and the cpi is right up there with others, and i don't know if he is monitoring it, but everybody has a cell phone. and so to warner brothers discovery, and so far not a strong stock. >> and the warner brothers discovery is not good. >> and how about at this point, there is nothing for investors who want to be positive on the name to be hanging their hat on. and don't forget, it is a highly levered company, and the cash flow is not what it is going to be originally, because of the assets it acquired so to speak when it merged with warner from at&t are not producing at the level they anticipated or needed to be reworked or shutdown in some fashion. so that has the investors concerned, because so many much of the cap growth is coming from

the old business which is the cable business and people cutting the cord. >> people know that these are huge companies that are very, and they were, i don't want to be, but older people relied on them for dividends. >> at&t you are talking about and verizon. >> yes. and while we are at it, throw in the mix again, why aim short term on the negative, and the company that i like that has been on fire and reported a great number, and the stock is down bad, and that is worrying me tremendously, and the banks are down. >> and bob, you want to chime in here on the banks or anything market-related take it away >> te important thing here is that we are getting the reminders from the u.k. that inflation is serious downside risk to the market. maybe this is the day that we get a pause, david. we have tried the last two days to sell in the middle of the

morning, and it has not worked. we will see if it works today. the sector, and the stuff that hassed the biggest move up is down. we talked about cathie woods arc have had a good month, and sit down. and the russell 2000 is also another sector great month, and down 1.5. and retail of the s&p 500 is down. and the concerns of the inventory are not that bad. target reaffirmed the reduced forecast, and even though it had a disappointment in the second quarter is down. and lowe's talked about the optimism of the do it yourself trends, and talking about the full-end of the year range up. and the consensus is 92 to 96, and so this is hardly a disaster, and better than i would have thought. over in europe, it is weakness not surprising with the 10%

inflation number, but here, you will see the terrific run over last month, and looking at the global markets, it is choppy, and we have had a rally in the third quarter b but it is uneven. the s&p 500 is up 13%, and the stocks are up 8%, and this is understandable given the invasion of ukraine. and in china, you can see the one percent there reflecting the lockdown. but you can see the rally is very, very uneven and choppy global move to the upside. so if you can remember, guys, taking a look, at how wrong the consensus is s. seven weeks ago, and everybody was talk about august and september, the s&p 500 would see a new low, and that is the consensus seven or eight weeks ago and we are at 4300 and the s&p 500 has moved 1,000 points above where

everybody thought that it would be six to eight weeks ago, and showing you how bad the prognostication can be in this market. the bulls are pricing the perfection in, and the economy is going to be strong enough to avoid recession, and the earnings is going to be avoiding inflation, and that is a tall order. market rally or not, but plenty of people think that it is very tough to get this perfect scenario in the next few months, and the news like what happened in the u.k. is nice reminder that there are significant ritzks to the downside, and this goldilocks scenario is going to be a tough one to uphold. >> thank you, bob pisani. we will look at the gold market before we break. and looking at the two-year is the key here. and 3.48, and we have not seen that since june. >> june 16th.

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stop strayeding, what do you got? >> i was trying to download the rakutan i don't have it downloaded, but it's vibr. apparently all three are terrific in terms of ganging up on the shorts. if people want to go there, there's a community there you can go nuts on, that apparently the s.e.c. knows nothing about and never will, as well as the management of bed bath doesn't watch us instead they watch their inventory, which does nothing, and same-story sales

i do not have subpoena power if i did, i would find out who is on vibr, but i don't, so we'll just leave it at that. >> maybe we'll get gensler >> he has subpoena power >> what do you got tonight >> i have pioneer, in their 25th year. >> scott sheffield. >> and then dr. steve paul everyone always claim they have something for schizophrenia. i've spent a lot of time -- host of the american brain foundation gala, and i would love to know what he has. >> the american brain foundation or the american migraine foundation >> yes i'm on both. we're tackling alzheimer's, some of the worst versions. we do great work, and, you know, you don't ever want these

things, but we just have to keep trying to raise money. i'm very proud of both institutions. >> as you should be. >> i'll see you later on mad. >> thank you. we have more on retail for you. keep it here

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good wednesday morning, welcome to another hour of "squawk on the street. i'm here with leslie picker. carl and morgan are both off this morning a rougher morning than we have seen of late with the broad averages all down. business inventories out just moments ago. rick san telle has that for us it's a june number, so a bit on the assetened side expecting 1.4, and it delivered exactly that, up 1.4%. in the rear-view mirror, 1.4, our last look gets upgraded to 1.6. this makes the ninth month in a row of double-digit growth in

business inventories depleted kniffin tore need to be replenished, and that would kid in when we get the final revision leslie, back to you. >> thank you very much, rick we are 30 minutes into the trading session. not including the retailers. taketwo falling after being downgraded by deutsche bank. they take it to a hold from buy at what they see as a balanced risk/reward. price target is still 160 implies a 17% up side. shares down about 2% right now best gas up in early trading, following that investor carl icahn raised his stake to 8.7% finally krispy kreme

tumbling after missing saying inflation pressures could be easing. however, having seen in recent weeks, the shares down 11.5%, though it may make some of our viewers want to get a doughnut this morning. >> who wouldn't? >> help them out a bit >> i always remember that company was public, then went bankrupt, then came back again >> thank you for reminding my. got all those breakfast assets at the same time all right. let's talk a bit more about retail, but not doughnuts. target shares are falling, lowe's slightly in the green courtney has a roundup for all of those, maybe tjx as well, which for some reason we don't seem to focus on. >> i know. i know i think gym has salient points neither of them have had strong

quarters as the competitors, walmart and home depot, a we saw yesterday. as it warned it was slashing prices, it still fell well shy of twice lower expectations. comp rath rabl sales slightly shore. operating margins just 1.2%, those tart expected arch 6% for the rest of the year i spoke with target's chive financial officer, they wanted to take action and take care of it now, which came at a cost, as expected he also said we accomplished what we wanted to with inventory. the value of the current niche tore is $15.3 billion, slightly ahead of the value, but he told me it's not a different mix of inve inventory, like food, beverage, essentials, and less of the discretionary products that frankly aren't

target also brought in inventory early. still, compared to the second quarter of 2019, inventory is up $6 billion half of that, or $3 billion is from inflation and the cost of the goods. elsewhere lowe's profit beat the street, but its revenue disappointed the home improvement retailer did predict full-year results seasonal spring items did disappointed, and lowe's do it yourself customers, which make up about three quarters of the total shopping days, they weren't as strong as the pro customer, which makes up nearly half of its business lowe's ceo isn't dissuaded by recent housing data. he's optimistic for home improvement for the rest of the year, which might be what's holding up the shares today, david and leslie >> though i promised people, that we would talk some tjx as well

>> yeah, they did. it is actually a fascinating company in general i think what jim had to say in the last hour was interesting. we don't know a ton about the inner workings, because frankly the executives stay more on the quiet side with the press. we don't know the full details i find it interesting that the comp sales were fairly depressed, which was worse than the street had expected. in general, it does a really good job they had this treasure hunt proposition. they really succeeded in the age when so many of you have moved to e-commerce, and the treasur hunt still reigns supreme.

not necessarily the stuff we didn't want, but the stuff that came in late where frankly just missed seasons or missed the opportunities, that the retailers are choosing to off-load once that gets fully through the system, they should benefit, but i find this company fascinating in a lot of respects. >> definitely a treasure to be hunted, using your words, courtney thank you so much. >> thanks. for more, let's bring in oliver chaanine, and liz suzuki. oliver, let's start with you you have a buy rating $190 price target here. you think -- you were thinking that after today's numbers, do you believe it was the right move from management -- it was prudent of them to take this pretty steep hit now versus spread out some of the eps over time >> leslie, that's true the name of the game in retail

is to take markdowns quickly and with agility they're decisive in doing this it was exceptionally painful to the gross margin on these markdown actions, but that position targets much better for the second half, we're generally seeing a stable consumer with spending power however, the consumer is being very discriminating. the consumer loves these stretch hunts with value being a key focus area certainly categories are performing better, food and beverage, essentials you know we like ulta. beauty is performing well. we like target's valuation we have outperform ratings on both of these stocks. >> yeah. speaking kind of those discounts and treasure hunting, what does it do for target's brands, as consumers get used to the steep discounts they have seen, will they expect them in the future

or are consumers pretty malleable, going back to what they're used to? >> well, leslie, the bottom line for the back half is really retail thinking hard about opening price point and offering exceptional values what is great about target, expect more, pay less, this brand ethos, is merchandising and private label. it has a lot of phenomenal private-label brands, and they're about a third of the business they can offer sharp prices to customers. the other thing that's happening is people are looking for joy again, reuniting with families, going out. they have a lot of partnerships with lego, marvel and others it's traditionally a great destination for events and holidays the consumer is doing that as well that's something to watch. again, taking all these inventory actions early is prudent in terms of cleaning up this inventory quickly target still had traffic, so

people are coming to the store they had unit growth as well margins were a problem >> liz, i want to come to you now on lowe's. give me your take on the quarter itself and what your expectations are obviously we've heard from home depot very recently. >> i think there's a couple key takeaways for this quarter really from both home depot and lowe's, the quarter demonstrated the resill gens of the home improvement category we see continued strength overall, especially compared to 2019 levels. the other thing this quarter demonstrated more specific to lowe's was the resilience of the margin improvement story lowe's was able to deliver market expansion, even amid lower sales volumes year over year

that's the key part of their investment story for a long time ever since marvin ellison started this turnaround, it's been a big part of that focus, showing even in a flat sales environment that they can deliver operating margin improvement was an important part of this quarter. >> and you're not concerned at all they did lower, at least a little bit of where they expect sales to come? >> i think what matters more, is they raised the guidance for eps, right at the end of the day, it's about shareholders returns eps is continues to grow, right? profitability is actually improving. they're building value to shareholders by buying back stock, and they're raising their dividend over time this is a really strong total shareholder return story i think for investors, that

probably matters more than where the values shake out over the year >> we've seen them report the last few days. any kind of read-through on just the overall inventory challenges that have taken place? anything you can share about the broader retail picture that we've seen so far? >> yeah, leslie thematically, we still like the high end. we're seeing prices being raised at luxury players. also, consumers are getting out and buying beauty. we view beauty as recession-resistant. we have a barbell approach, where they like the high ends and low ends and exception focus on value walmart will not be undersol at -- so thinking about great value stocks, and leslie, nevin dorseys are higher, based on our

cowen research, they're higher, so lots of promotions will happen some of these will be planned. some of these will be markdowns that are more than expected. the other thing that's happening is freight that's something to watch. the consumer is certainly bifurcated positives, in terms of the consumers are low unemployment at 3.5%, and there's money on the sidelines. however, the consumer is becoming more discriminating the negative points are inflation, gas, energy and others consumers are trading down they're trading down into private brands, and middle and upper consumers are also trading into walmart so we're seeing many cross-currents, which keeps it quite interesting, agile, fun. >> absolutely. always glad you are on top of it thank you, oliver and liz, for

that roundup. >> great being here. >> thank you as we head to a quick break, a look at our road man, including the look at the housing market mortgage demands have hit a 20-year low. plus bed bath & beyond surging once again why retail investors are pouring into the name. citi says there's a 50% chance of recession. we'll have that call and what we may learn from the fed minutes this afternoon "squk t seeawonhetrt", well, we're just getting started

last week mortgage demand falling to the lowest level in 22 years diana, it's been a week. >> and it's just another data point in the string of them that we're getting, that the housing market is in its own recession mortgage demand fell to the lowest level, as you said, in it 2 years, matches a low in july, when rates were even slightly higher drop in homebuyer demand adding to the refinance woes. down 18% from a years ago, this as the average rate on the 30-year fixed dropped to 5.45% it's still way up from a year ago when it was around 3%.

that, in addition to inflation, still high home prices, general concern about the economy are all keeping home buyers on the sidelines. with rates remaining high, there's precious few that with den fit from a reify those are down 82% from a year ago. rates started this week flat, but we are seeing bond yields rice this morning. mortgage rates -- now, tomorrow wee get the latest count of existing home sales. those are closed sales, so that would reflect the big surgeon in june that could be kind of ugly, guys. >> diana, thank you. for more on the overall cooling down century 21, corcoran and coldwell banker, and its ceo ron

schneider joins us just characterize the housing market for me. i assume you heard diana's report right now do you concur? what are you seeing? >> thanks, david, for having me. we're seeing about a 20% decline in housing units in june and july, in terms of new contracts being signed the mortgage pressure she cited is absolutely occurring. what we haven't yet seen is prices dropping, compared to a year ago list prices are getting cut, but in part i think because there's a lot of demand still for housing demographically, not enough supply. we haven't seen prices go down, but there's clearly been a unit drove and a mortgage drop that has been a headwind to the housing market we were happy to still, as a company, print a couple million in operating ebitda, which does make us stand out from a lot of

competitors, but there's clearly headwinds that we are all confronting. you know, just your expectations when it comes to pricing, which has been holding up. would history dictate that price is the next thing to go? >> i they are we're in a different spot we've been pretty public that we are expecting a 10% to 20% drop in transactions here in the second half of the year. i think that's going to happen for sure i'm not sure prices will drop. unlike 15 years ago when we overbuilt on home, based on different estimates we have about 2 to 3 million less homes than we have need for. you can see rent prices going up as there's more household formation, and i think we may be in an environment where prices hang in like they have been over the last three, four months just because we don't have enough

homes. there's really not a state in the union where we're prices go down of course, we're not rooting for it, but it is something that may be different, giving the summer/demand balance in housing. >> you were asked, how domain tain your long-term goals while also adjusting so i'll ask it again your answer was, you haven't pulled investments and things in the future, because you still think this is where the industrial is going, but give me a sense to what that actually means. >> yeah. so, look, as i said, we delivered a couple hundred million in operating ebitda, and have a bunch of cash on hand so, you know, even in a tough housing market, our company is architected to deliver pretty good financials.

we don't wait for a tough market to try to improve our company. we've had 70-plus million cost reduction programs we told the world we would take $300 million out, because we know we have to reinvent this business, make it a better consumer experience. while it is a cyclical business, we have to be aggressive with the downturns. we have a track record of trying to be ahead, and we're excited to keep doing that >> ryan, i'm curious, your point on inventory and when it could normalize. you look at the report that diana just gave, and all the data this week, the headlines about us being in a housing rece recession. you would very eventually inventory would catch up.

now, it was 13 days or 12 days a year ago, but 16 days is a pretty quick time for houses to be moving. whatever inventory is out there is going to be turned over faster than historically it would. so, you know, we're seeing it build a little bit, but the -- it's not running back to where it's historically been, which is partly why i think the prices may be holding up a little stronger than you would expect in, you know, what is pretty easy to label a housing recession, when units are down like 20%. >> are there certain demographic

drivers that you think are keeping the market going, whether it's mill lennian, gen-z, whether it's the fact that rent prices are still high. what do you think is driving this >> you hit a real strong list. your list is we're -- i'm pretty bullish on the housing market over the course of a decade. the five largest individual birth years in the millennial are all about to turn 35, and kind of be in the prime home-buying year we have a tough macro are the high rates, but the demographic demand should actually be quite strong you're seeing it show up in rent price increases, existing home price not dropping like we've been talking about i think the median term has a strong demand to it.

obviously the mortgage stuff that diana reported on is an absolute headwind at the moment. >> ryan, we appreciate you taking time with us to give us your of the market thank you. >> thanks for having me, david. credit suite calls apple a sweet spot how much up side they think there is, back in a moment tes, whose resumes on indeed match your job criteria. visit indeed.com/hire and get started today.

welcome back take a look at the tech spder etf. it's trading just better than the s&p. what a reversal. apple a big driver, and analysts assumed coverage of apple on tuesday over credit suite's rating on the stock to outperform from neutral, with a price target of $201 per share, implies about 16% up side from yesterday's close. >> well, after the break, citi once against calls for a 50%

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ahead of the debut flight in less than two weeks. the capsule will fly for a couple weeks before heading down for a splashdown in the pacific. david, back over to you. well, this morning citi reiterated the call for a 50% chance of a global recession, saying although its base case has the economy narrowly affording a recession, risks are skewed to the down side. minutes from the july fomc meeting will be released today, 2:00 p.m. is the time. steve liesman is in washington, and has more for us on what we can expect and what it may signal for the fed's next move. >> there's a widespread opinion that the minutes will be hawkish, leaning against the market view there was some kind

of pivot at the last meeting citi in a different note writing that the minutes should confirm that powell's comments were foreshadowing a dovish pivot rather, the fed remains committed to tightening financial conditions, meaning they minutes bear hawkish risk stocks have kept on rallying even after federal official have insisted the market was wrong to price in cuts next year. not only does the market have to risk, but i'm wondering is this the u.s. is headed as the uk there's also u.s. retail sales that came in lower than expected the results, anyway, somewhat higher for fed rate hikes, that puts the market closer in line, this time next year. the question is how much

confidence does the equity market have in its own forecast. a forecast that is underpinned this powerful rally off the bottom, bus which federal officials have leaned against. a 50% chance of a probability of recession, it sounds like they want it both ways on that, don't they >> they do how does that figure into what you hear overall in the market these days >> first of all, i feel like if you're going to say it's a probability with a downside risk, you ought to raise your probability, right i think that's the -- you can't really sort of use the rhetoric to have it both ways it is in line with what haim area, 50%, 55% was i this is the last cnbc survey this goes back and forth with

recession fear on the one hand, high inflation on the other. wife a bell of progress, but it's pretty clear that the fed wants several months to know it's coming down there's the old story of arthur burns, who did raise rates, but let up too quickly and inflation came back. so there's a lot to do to figure out, how high does inflation go? i think that's what's going to determine the outcome. you get, it light pretty good. >> thank you for pointing that out. i did agree that the market did initially read it as muted, but there were positive points in there as well. >> yeah. the fed and the markets, lets bring in megan shoe and andrew sluman.

meg, the markets are pricing in a much lower -- bank of america saying the recent rallies priors in -- do you think the market is overestimating or underestimating the risks right now? >> leslie, i think it does matter which market you are looking at i think the equity market is starting to increasingly price in that soft landing and discount the chance of a recession, either this year or in to2023 the bond market, you're looking at a deeply inverted yield curve. we know what that means. it just takes time to play out i think equity investors may be less patient, but i think the market might be getting a little ahead of itself. it's still a possibility, it's

still something we actually think can happen, but there's a lot of wood to chop on inflation as we go into the end of the year >> andrew, do you agree with that do you think there's anything the fed can say in today's minutes that would move the market either way? or is it at this point backward-looking >> i think the market will be fine with inflation coming down. as long as inflation is coming down, that will be good enough for the equity support but in terms of your recession, though, recession, what i would point out in the first half of this year when we had a very bad pullback, energy and defensives, which are late-cycle stocks, they led consumer discretionary, which are early cycle stocks, was the worst decliner since the end of the second quarter, the worst performing sectors are energy and the

defenses, and the best late cycle -- and best performing stocks are consumer discretionary, early-cycle stocks so i think the market is telling you it's less likely a recession is out there so the question is, do you think you're smarter than the market or do you take your cues from the market >> i think the market is sending a powerful message. >> last week we were up on both those reports, andrew, but, you know, a week does not make for a market prognostication what are you seeing toward the end of the year, given the scenario you just laid out >> i think the market's going to end up where it started, not a great year for equities versus the start, because you have a battle the battle is the fed, raising

rates, calling p/e recession i still go back, this remind me of 2011, it was two years coming out of prerecession. earnings didn't collapse as much as the bears believed. i think that's the balance i thought the rally would come more in the fourth quarter it's come sooner than i thought, but i city you're looking at a market that still has a pretty good up side i just think there's a lot of bears, too much on the sidelines. people that have missed out on the rally. and now they have fomo >> i'm sure that's the case. any chance, andrew we're just a little early in expecting earnings to collapse

or do you think coming out of the earnings season that you're confident we're going to sort of maintain >> david, it's all about expectations, right? we went into earnings with really bad expectations, so they weren't that bad i think that the big story for the second half, this margin erosion story, i don't think it's going to happen, because when i talked to companies, they tell me we're pushing through price increases, but some of their costs are coming down. so i think -- you won't see margin erosion, but expansion, or at least it won't be as bad as expected. >> meghan, i want to ask about something that has more to do with sentiment, the return of the meme stock barometer, if we want to call it that we've been discussing names like amc, there was the hong kong digital media company that

surged from its ipo obviously, and over the last few days bed bath & beyond has been back in focus. what does that tell you with where we might be with regard to the state of this recent rally >> the resurgence of a meme stock, and more broadly speaking low quality, more highly leveraged, smaller names across the market cap that tells us we should be a little skeptical here anybody who is focusing on quality in a slower-growth environment, they are at rink. they may hold up, but they are at risk. going forward, i they are we're going to have to see some of that come off the boil the market is certainly behaving in my view like the fed is

return to go zero interest rates. that is not at all the case. financial conditions will continue to tighten. the fed will make sure of that they need that core inflation to come down, so i think this is too much too fast in terms of the lower quality segment. >> what about short interest, meghan how much attention should we be paying to that they're saying that it has been rising, so i'm curious if that is a directional bet that they think the market has come out over their skis or they need to product their down side, given how much the market has risk in recent weeks >> we certainly have sign a big

move in short covering what that tells me is you had a lot of short interest, and some of what we're seeing in the momentum is a bit of a squeeze on that, and getting some players back into the market, but if you look at bank of america, we're still looking at high catch balancing for fund managers, so that could provides near-term support, or just speaks to where we are, where you'll have to be patient. i think we have more road to go, and investors are going to have to be patient. so we're neutral to equities participating in the market, but not chasing this rally. >> yeah, it seemed like there's certainly indecisiveness amid market participants, as it relates to cash, short interest, all of that. thank you for your perspective amid these uncertain times tenth. >> thank you

all right. after the break, we're going to hear froabout the slowdown in gaming, though outperforming the market this year, despite pressures. we're back after this. and you had to wrestle a massively complex supply chain to satisfy cravings from tokyo to toledo? so you partner with ibm consulting to bring together data and workflows so that every driver and merchandiser can serve up jalapeño, sesame, and chocolate-covered goodness with real-time, data-driven precision. let's create supply chains that have an appetite for performance. ibm. let's create.

welcome back to "squawk on the street." chinese social media and gaming giant tencent pottsed it's first-ever quarterly revenue decline. there's an overall slowdown of the chinese economy. our eunice yoon is live in beijing. >> reporter: they missed on both revenues as well as profits, exactly because of what you said that is, that their advertising numbers just weren't good.

that's because of the lockdowns as well as the weak economy scared a lot of businesses by creating all of that uncertainty. the other big revenue is the gaming industry. that revenue, it just really wasn't there the company said because of the beijing holding back on some of their title approvals, and because of beijing limits the playing time more broadly for minors here, that affected their business overseas, the company said that it faced what it described as a post-pandemic digestion period in other words, people weren't really playing as many games, because they were going out. on the earnings call tonight, founder tony maz said the company will continue to focus on their cost/control strategy, this after the company said they cut their workforce by about 5% in the second quarter from the

previous quarter the company is also dismissed a report that they plan to sell off $24 billion stake in food delivery, calling that report not accurate in order to raise cash, the company said it's focusing its eyes on growth in a couple new areas. one is on a tiktok-style live feed that's part of the social media app we chat. they see a lot of potential there for advertising revenue. also, in fintech and their business services, which essentially inclusive cloud. he said that was negatively affected because of the economy, but they believe as the economy continues to pick up, those areas will pick up for them. they say they believe they will

see a return to growth in the coming quarters. leslie >> eunice, an interesting snapshot of what is going on in the chinese economy. thank you. up next on "techcheck," with a look at the small spac market. that's important, because it was about two years ago where we saw the big surge, so five years is more normal from a historical standpoint "squawk on the street" is back after this

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welcome back to "squawk on the street." i'm dominic chu. stocks are mostly lower today with nearly every sector in the s&p 500. utilities narrowly holding on to some gains leaders include cms, also con ed, duke electric. those moves could signal that more defensive tilt towards trading as investors look towards that sector which maybe outperforming during periods of volatility we've seen that throughout the

course of 2022 with utilities and consumer staples the best performing sectors behind energy keep an eye on the sensitive ones and the defensive one, david. i'll send things back down to you folks at the stock exchange. >> thank you, dom. gaming stocks have had a rough year a few weeks back, the industry is not recession proof this morning deutsche down grades take two due in part to what it says is a weakening macro backdrop our christina avenue soef va has details. >> every year for the past seven years until now. lock downs are a thing of the past, incongratulations running rampant while the global economy is weakening it's knost just about take-two, microsoft all feeling the pain you've got even tech hardware

companies like logitech that have had the cut their full-year outlook because of this slowdown. >> i think there's a natural trough happening in gaming right now. i don't believe it will snap all the way back to where we were a year ago in a month or two i think as we head into fall, i think the game market will get a little more solid. >> it's all about perspective. logitech expanded by 84% last year that's a pretty high bar to match. it also sits on over $1 billion in net cash, a cushion for a possible prolonged economic slowdown >> we've really had an amazing period with incomes up, employment up, everything up, up, up i'm sure we are. i think we are technically in a recession now. it doesn't exactly feel like the recessions of the 80s. >> gaming was once considered recession-proof. there's still debate about that. it's an industry that is massive, a market larger than the movie and music industries

combined the gamal year end will be ahead of prepandemic performance with growth returning next year can investors wait it out? >> wow, i had no idea it was bigger than movie and music business combined. that is massive. kristina, thank you. bet, bath and beyond surging once again we'll look at what's driving that stock move, up 24% right now. don't go away. hey mom, can i go play video games? sure! ...after homework. thankfully, voya provides comprehensive solutions, and shows me how to get the most out of my workplace benefits. what's the wi-fi password again? here... you... go. cool, thanks. no problem. voya helps me feel like i got it all under control. because i do. oh, she is good. voya. well planned. well invested. well protected.

. shares of bed bath & beyond surging again we mentioned yesterday. retail investors snapping up shares once again today, 23% i was perusing the chats just before the show and saw catch phrase bed rks, bath & bullish >> i think it's interesting here, they have been pointing to what they called purchases by mr. cohen of options they weren't new purchases his stake increased from 9.8% to

11.8%. the options are the same ones we saw that he purchased back in february and march, february 28th and march 1st, 60, 75 and even 80. no real change not that it necessarily matters, leslie. >> there were also down grades that took place in recent days i think that had a big part to play here with game stop one of the key triggers was a short call i think it was andrew left at the time who said he was sure gamestop would have this twitter and why he'd short gamestop. that rallied everyone saying no, no, don't listen to short sellers. i think there's a little bit of that with the street saying downgrade to underperform and everybody on reddit saying buy, buy, buy. >> perplexing. the fundamentals for best buy

are horrible they're horrible >> trying to raise more money in the bond market. >> yeah, if they can do it. >> one stock to keep an eye on, cisco reports results. chuck robbins here tomorrow morning, 9:00 a.m. eastern that does it for us on "squawk on the street. "techcheck" starts now good wednesday morning welcome to "techcheck. i'm deirdre bosa live from san francisco along with andrew ross sorkin on the east coast carl and jon have the morning off today. the nasdaq is lower today. the major underperformer but up 20% off its june lows as bank of america says it' seeing some of the biggest in-flows into tech seema mody joins us. >> -- led by tech which saw over