people watching streaming services over cable for the first time. shakeup at two companies we will tell you the changes at home depot and starbucks it is friday, august 19th, 2022. "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc live from the nasdaq market site in times square. i'm melissa lee with andrew ross sorkin becky and joe are off. equity futures indicated for a lower open this comes as the major indices close higher yesterday for the month to date, dow and s&p 500 are up 3.5%. nasdaq up 4.6% treasury yields are tame

2.9% is where we stood at last check. let's see now? 2.92%. crypto prices. this is one reason we see pressure on the futures. a mysterious drop in the bitcoin market during the european trading session in the morning bitcoin down 7% right now. 2 $21,726. check out ethereum the star since june 19th up 90% the ethereum blockchain scheduled for an upgrade in september to make it faster and more energy efficient. andrew >> by the way, melissa, the possibility of ethereum is the merge should be a big upgrade. it is possible something could go wrong in the merger there is some risk associated with it. i'm surprised when you talk to

folks in the space and they talk about the risk, but they say look over here i don't know >> i think it is the move you look away before it fully happens. well w we'll see how it trades. this is wild i need to hear what you think. an update on what has been the saga of the week of bed, bath & beyond the company that you know we talk about with great fondness the company. or the stores. we like to go to the stores. a new filing released yesterday showing ryan cohen exited position in the retailer the filing showing he dumped the stock on tuesday and wednesday with the price between $18 and $20 a share. the stock down 40% in extended trading after the drop of 20% during yesterday's regular

session. now trading below monday's closing price of $16 per share before the mania began we talked about this, melissa, yesterday with becky all of the folks who thought he had diamond hands and paper hands and filed intent to do it and people strecreamed at us. don't @ me, people he was selling his shares. what else was he going to do i don't know what you think about this there is questions about the idea of potential manipulation and whatnot. yes, he bought the options back in march the disclosure of the options were not made until now. he knew that would be the case, i would imagine, and then took advantage of it. how do you think about that? >> as i understand the story, andrew, the disclosure of options was made months ago. >> yes

months ago >> it is not new information the position was -- >> correct >> -- the position restated in the filing this week and people took the options stake as new or extra bullish which drove the stock higher i am no lawyer don't quote me on this it doesn't seem that ryan cohen did anything wrong, per se >> no. the question is whether it was such misinformation out there. it was it was shocking to see the news reporting picked it up that way as well as if it was new in many cases. then he sold into it i'm not saying he should have. i'm saying people were questioning the situation and how such bad information becomes real so quickly. >> i think this is really sort of an anillustration of how vir trading has become

how stocks can be whipsawed. this is one of the poster children of the meme stock trades why not trade off this information that goes viral on reddit boards and mainstream media picks up we pick it up because we see the stock moves based on what is going on and we report the stock has moved higher because of people latching on the optioning position as a new position and that is misinterpreted as us saying the options position is a new position it feeds on it self. >> the secondary position and jim cramer and i talked about it yesterday as well. this idea that at some level, he has three board -- he's not on the board himself, but he does that position inside information. i don't know if this is a window you can sell into or whatnot obviously those who followed mr.

cohen down this road are frustrated and upset this morning. the question is does that change the dynamic in his ability to bring the whatever pied piper and talents to other companies and have folks follow him down do they follow him again >> we saw game stock shares trade lower yesterday. maybe it throws into question his commitment to being a diamond hands for some of the stocks the situation is very different. he is actually the chairman of gamestop it's a different position than being an activist in bed, bath & beyond the story changed greatly from bed, bath & beyond to today. from the ceo to the former ceo and what happened under him. the debt load has sky rocketed

they, by the way, hired kirkland to deal with the debt load the story is very specific >> you should be getting out if you are him -- he is doing everything he should be do >> good for you, ryan cohen. >> i don't be begrudge him at al retail investors have been following all this and pushing the stocks to prices that make no sense that are irrational and don't seem to understand or want to listen. it is frustrating. i know that sounds internalistic about it >> there is a league of people who made money on this >> that's true. >> there are both sides of it. a lot of people have gotten hurt

and a lot of people have made money. let's talk about another company. i need another coffee this morning. starbucks chief operating officer john culver is leaving the company after two decades. it will eliminate the coo role he will step down in october and become an advisor. starbucks saying the reports will be managed by howard schultz. schultz is planning the investor day scheduled for september 13th mark the calendar. shares of starbucks are flat since howard schultz returned. now up more than 15% since july 1st. home depot named ted decker as chair of the board. he replaces craig menear home depot announced a new $15 billion share buyback program.

those announcements come days after the retailer second quarter results showed strong performance as companies deal with high inflation. let's get a check of the overseas markets with joumanna bercetche from london. good morning, joumanna >> plea lis melissa, we have th stoxx 600 down 1%. you can see all of the indices trading in the red ftse 100 in the red. better uk retail sales in july the focus is on germany. you see the dax down .75%. wholesale producer price numbers coming in at 37% year on year. that is a major concern for german industry. one of the reasons why investors are so focused on the growth sdw outlook and talk of rehe cerece. we are seeing major moves in

fixed income the 10-year bund is at eight basis points higher. at the reason i'm picking on that is when the spread between the two widens out, it is a number for investors getting concerned about credit in the eurozone we are watching the difference with the two closely i want to draw attention to the downward move here with the pound broken through 1.20. .60% weaker. euro is very close to breaking through parity we were here six weeks ago we did not break through this time around, analysts are saying we could break through. we could go as low as 90 cents to the dollar. euro is one to watch on back of the german wholesale prices. back to you. thank you, joumanna. the big tech ref covery.

we will look at the stock and if now is the right time to buy that's next. later this hour, tax debate. the corporate minimum tax that president biden signed into law this week. you are watching "squawk box" on cnbc 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? ♪♪ the thing that's different about a vrbo vacation home.

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new this morning, morgan stanley slashing the price of

meta they are citing a shift which is harder to monetize the platform's unique reach and meta could scale faster than expected let's talk more about meta it has had a challenge since the selloff in june. meta is the only stock that is still down from three months ago. investors are wondering if now is the right time to buy joining us now is paul meeks and dan flax good to see you both paul, i'll start off with you. what is wrong with meta? every stock got a bid from june lows except this one does it have an existential moment with metaverse? nobody has the grips on the game plan and the inability to monetize if it will compete against the likes of tiktok. >> excellent question.

the deal is the legacy digital advertising business is under pressure this business is going to be just based on the peculiarness of it will be under pressure more than google i'm of the believe it will not be out of the recession quickly. with that said, the company is going through a metamorphisis what is the company's position it may not be the dominant player as it was one time in its legacy social media business there is wrenching changes if you believe wall street analysts, earnings per share will decline by 40%. the stock is trading 18 times earnings even given the fact it is still

the weakest among the faangs, i don't know it is the opportunity to bargain hunt. >> dan s , is there anything ine call option on something that could speak? you don't need that picture to materialize for the multiple >> i think the metaverse is an option it is not embedded in the price. the company is in transition my focus is in growth. instagram is healthy and facebook is mature facebook needs to do more to appeal to the teens and 20s and they need to shift we see success with tiktok we are looking for whether this company can shift the business and become even more relevant to

users and advertisers to grow. our preference in the space is on google where we like the durability of search youtube has growth prospects and there is opportunity in the google cloud platform. >> dan, the lack luster is the decline in core business and challenges the main business faces opposed to the gamble and spend on the part of the business that may never materialize? >> the challenge the stock faces is driven by the tougher growth outlook and the inability to generate the same levels of free cash flow given how much they have to invest to pivot the company. mark zuckerberg and leadership team have a very strong track record given the shift in the industry, they have to invest even more. in terms of the metaverse opportunity, we have to see how

they do. part of it, i think, will reflect a new business model you need different strengths if you want to sell devices over services that is something we are watching closely. >> we should rel-rate the stock or has it gone through the re-rate with the decline of 50% so far this year >> because it has a high multiple, what i need to see first is after we get through the trough in the business, and part of it is the macro issue, what is the growth rate on the other side right now, analysts are expecting a 9% to 10% comeback share in the outy year. that is dicey and speculative. tell me what the growth rate is on the other side and then

perhaps i can put some pen to paper and do re-rating math. right now, the problem is it is under pressure because we just don't know >> the 9% to 10% growth in the out year, the out year being '23, paul? >> that is correct if you believe analysts, it could drop 40% we will probably not have a year-to-year quarterly gain in earnings per share until three to four quarters from now. >> how do you think about the stock, dan paul said he doesn't have enough information to figure out what multiple it should have. how do you think about it? i know you say you prefer google what point do you think it could be attractive or are there too many warts on this to look at right now? >> my issue is seeing the initiatives around commerce to

help accelerate growth the issue for stock is showing signs of reigniting the tomorrow line if they can do that, the stock market will reward the company the biggest single thing now and there is a recession which all companies are facing is the innovation engine and ensuring the men and women inside facebook or meta, they are attracting developers in the challenging period that will matter more. if it manifests in better growth over the next 18 months, the stock has the potential to move higher from current levels it will take time. >> paul and dan, thank you so much i appreciate it. >> thank you >> thank you coming up on the other side of the break, we have more for you. a round of big news in the media se sector a big move for july streaming

services and big service contract for the big ten conference fr as we head to break, you don't want to miss the battle for the consumer with courtney reagan that is tonight at 6:00 p.m. eastern time we're right back after this.

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a milestone in tv land viewers spent more time in july watching streaming content than cable tv it is the first month that streaming has overtaken cable. 34% of tv viewing while cable tv attracted 34.4%.

andrew >> what do you think of that i shouldn't say what do you think. of course this was going to happen this was bound to happen >> we knew it. let's that about other media news big ten conference striking a massive deal i don't know if you saw this, melissa, a seven year contract with fox and nbc worth $7.5 billion the richest ever for the college conference ucla and adding southern california as members to expand the region to add one of the nation's top media markets big ten football and basketball games spread among the media partners and services with the southeast conference that deal exclusive with disney. we will talk more about that story and what it means to sports and streaming with our

guru george pyne i don't know $7.5 billion awfu all of the athletes who wanted sponsorship deals and more access to all this, i think, had they not done that and then you see a price tag like this, i think a lot of players say this is ridiculous. >> how can we get a piece? they can get a piece and the conferences are smart. you mentioned the conference changes the geographical desire ability by adding certain teams. they are holding all of the cards. streaming platforms and linear

tv they need sports sports and news. that's a big draw for streaming platforms. >> completely up other media news a lot of journalists following this news and the world of media and what is happening in media news brian stelter has been the face of cnn he is leaving the company following the cancellation of the show "reliable sources." the first programming move by the chairman chris licht who took over in may a lot of folks looking at what is happening there melissa. coming up, the fed strikes back officials are pushing back against the market's dovish take steve liesman has the story heaa look at the s&p 500s winners and losers

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good morning welcome back to "squawk box" on cnbc look at the futures on friday morning. opening down 205 points for dow. nasdaq down 120 points melissa. senior economic reporter steve liesman is here with that fed speech it is drawing a hawkish theme. >> melissa, officials don't want investors to think the fed is thinking about cutting rates next year. st. louis and minneapolis and kansas city fed leaders spoke yesterday to strike back against the dovish outlook jim bullard says this is premature and he is leaning to

the 75 point hike. mary daly said rates won't go down after they go up. and neel kashkari said the fed may need to do more. he is saying he wants to hike rates. and george says july inflation was encouraging, but not time for a victory map. and looking at fed with the ow average forecast to rise to 3.80 that is a significant difference in the amount or in the direction with the fed hiking and cutting rapidly. fed officials seem intent on the likely outcome for the fed to ho hike and hold. much depends if inflation comes down to convince officials it is

lasting and convincing we will have a chance to talk about this stuff next week we'll have several officials on thursday from jackson hole of course, it was made official yesterday. we knew this fed chair jay powell will speak at 10:00 a.m. mountain time. i guess 10:00 a.m. eastern time and 8:00 a.m. mountain time. melissa. >> he has to say the likelihood of hiking is low next year it is straight forward for him to do the jaw boning in the direct manner, steve what i think is interesting in terms of where the market stands with the fed is they see eye to eye where rates are going to be for this year. where the disparity is is where they see the economy and impact of the rate hikes on the economy this year. i think the market is in line with higher recessionary

possibility. that is why they see cuts next year >> i want to push back on that a little bit it is the comment from kashkari that i suggest you take note of. what kashkari is saying is i don't know if we can avoid recession which is sort of him saying i'm not sure we are going to avoid recession the deal is this the market, you are right in saying, the market thinks the fed will turn tail what kashkari is saying it will not turn tail if it remains high another down the road step as to the difference and where it may be one other issue which kashkari raises to me everybody is so convinced we're in a recession i think the data so far has not backed that up it is really a potential

recession down the road that maybe the market is taking its eye off here i don't think we have the full effects of what the fed is trying to do to the economy. >> that's what the market is saying the market is saying we are seeing the labor market strong here wage gains are holding in. we need to see that peel off the impact of that is going to be deep. that's why the markets are saying down the road we see the fed cutting that impact which we have not fully seen will hit the economy and hit it hard. i think -- >> i want to look up something that somebody sent me. the post did not tell me i could make this public we will see what the person's name is. they are a well known investment person out there they wrote and said don't believe the fed. they don't realize they have to

pause and pivot. i think, melissa, that is what is behind you are saying there the plbelief that the fed doesn know >> market doubt about the fed credibility. let's put it that way. >> right not near term, which is okay >> right >> the fed has been successful in pulling forward the trouble is it gets away from them if they don't keep the rhetoric up and find a way to convince, they loosen financial conditions and loosen the thread and trying to create splalack in the econo. >> thank you, steve liesman. >> thank you, melissa. we have a tax break. we will dig into the corporate minimum tax that president biden signed into law as part of the inflation reduction act. plus, new york ridership still below levels we will talk about return to work with the transit system with the ceo of the mta. you can watch us live any time

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welcome back to "squawk box. futures are trading at session lows nasdaq down 140 points at the

open for the week, we are looking flat this is an interesting session to watch andrew. the corporate tax is interesting with the companies making over $1 billion a year to reduce the deficit over the next ten. business groups are pushing back saying the tax hike will reduce economic growth and make america poorer joining us is seth hanalon i haven't talked to you in a long time. grover norquist. he is on the phone with us grover, i'll start with you. is there any chance this is a good thing i know all taxes are bad in your mind, but at some level, there are people cheating the system and you care about accountability >> you are talking about the book tax or the irs. we can do that that is not a good idea.

the book tax which we have been down that road before for individuals and businesses it didn't do very well you say some people don't like taxes during slow economic growth two quarters of slow growth. joe manchin said it and obama and schumer said in 2008, said you don't raise taxes period in a recessionary period. the poll on cnbc found 776% said we are in a recession or about to be in one now is a stupid time to put taxes in and hand it to the government for political purposes if you look at what is being spent on, you know, great deal of money spent to have people walk down the streets to see if there are enough trees in the

city google can tell you for free with satellites. >> glovrover, i don't want to sk for you. seth, you are on the other side of the debate? >> this is such a narrow tax ensuring the small group of corporations makeover $1 billion of profits a year and paying less than 15% gets them up to the 15%. nothing in the bill taxes individuals under $400,000 or any households or small businesses all the corporate minimum tax will do is ensure they cannot use avoidance techniques to drive down the tax bill below 15%. it is an increase of corporate tax revenue over the next decade of less than 5%. i think at the same time, common sense.

paying for critical investment in renewable energy. >> seth, can i take grover's side for one second? companies will shift around r & d. >> this will not impact corporate decision makesing at all. the corporate tax is overstated how much the corporate tax impacts corporate decision making i don't think you will see any, if the at all, shift in corporate behavior from the tax. now you have huge investment in american manufacturing and infrastructure and renewable energy that will create a real boom in my mind. >> grover? >> keep in mind that the government itself says this tax specifically hits manufacturing

higher than every other industry telling them they will whack the manufacturing industry, but subsidize politically favored industries other countries in argentina have done this before and it has not gone well. 1909, they had the corporate income tax at 1% and ten years later it was at 12%. it has been as high as 58% a tax gets put in at a low level means that is trickle down taxation you start with big companies only big companies, you say? this is perhaps insurdexed for inflation? no anytime the future congress wants, they can change the rules to hit more companies as they find they need the money the idea that taxing businesses on things that are not taxable income at present because

congress decided they weren't, keep in mind it can raise taxes. you don't need a vote from congress -- >> grover, the issue is that segment is its own segment this is a value of democracy and at some level there is a sense that you have some companies that a are moving things around and otherwise. the american public says there is something wrong here. isn't it just better that everybody pays something here? >> first of all, nothing says it hits only people making money overseas this is for all companies. all large companies and over time, with inflation, more and

more another way to deal with that issue is what you brought up if you think that is a significant problem. you are talking about the government stepping in and say we can take your money that investors put in this will, any tax like this, will reduce the value of the company. you are taking income out of the company and giving it to the government 58% of american -- >> i don't want to pick on amazon, if you go down the street, they use the roads half have turned the sidewalks into, you know, temporary pop-up warehouses it the they should pay for that >> we all use the roads. in theory, we have a gas tax which builds roads if it is true it gets diverted by the politicians too other things yes. don't divert it by gasoline taxes. the idea -- try to sell the roads 12 times

they do that we have a road and gas tax let's not put this in. it is for money to subsidize industries that do not function in the real world. a politicized section of the economy they hope to create. if you look at it, it is one handout to political organizations in big cities with very little restraint on what they do. go look at the trees and tell us what they look like and hundreds of millions and billions invested in handouts >> grover, we have to jump seth, we have to jump. we have to have both of you come back to continue the conversation grover, i need to talk to you about senator sinema and carried interest at some point we will do that in a little bit. melissa, over to you we will take a break coming up, nat gas prices in the u.s. up 30% in stju the last tw

months we whill talk about the impact f higher energy costs next

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. earnings out this morning from heavy equipment maker, deere. they earned $6.16 per share. it was also hit by higher costs and cut its full-year earnings forecast also this morning, the latest results from footlocker, the retailer earned an adjusted $1.10 a share. same-store sales did fall by 10.3%, smaller than the drop that analysts had been expecting. the company also announcing ulta

ceo mary dillon will be taking over as ceo september 1st. joining us to talk about whether the natural gas prices rise will continue is our guest. thank you for be being with us >> thank you, melissa. >> we're ten weeks away from winter heating season, how are we shaping up at this point? >> it's going to be a tough winter we saw crude tumble into the $94 zone, but prices are still relatively high. this pose as huge challenge to all governments in the west. already we're seeing some kind of action being taken by some european states. germany announced that they'll be reducing taxes on natural gas. we're expecting the trend to continue across europe to ease the pain of consumers and help them get through the winter.

>> i mean, easing the pain is great, but we're talking about a huge difference. if we think things are bad in the united states, gas prices are seven times what they are in the u.s. in europe and so how much higher can that gas prices go in europe during the depths of winter >> it could go much higher than current levels, that's for sure, melissa, because it's gas compared to oil is not something that you have management or any kind of control over we see the sanctions against russia and we're expecting more sanctions to be implemented by december this is the point where we're going to see a lot more pressure on nat gas prices and also on oil prices in general. so the more pressure, geopolitical tension there is, the continuation there is in the war situation, i don't expect

the situation to ease at all >> i mean, hot weather now is making it tough. i know the german government has already told its citizens and factories and so on that, you know, one btu saved today is one you can have in the winter time when it's really cold outside. is this the kind of situation, i mean, where the only real destruction in demand or come down is basically a curtailment of industrial output >> sure. but we're not seeing that yet, melissa. i mean, even when, i mean, there are fears of recession that are going on at the moment, but we're not seeing any impact on demand demand is continuing bear in mind we're coming out of the post-covid area, brief, time, and it's very difficult for people to be curtailing demand, especially in seasonalities like winter. i don't, even if the industrial sector drops, i don't expect nat

gas prices to be impacted that much this winter that's why i'm saying this winter is going to be tough for the west in general. >> in terms of the price differential between the u.s. and europe, that remains, amina, even in the depths of winter >> yes, yeah, yeah that's for sure. >> great to have you with us, thank thanks for your thoughts, appreciate it. >> thank you coming up, we have two big hours ahead. millions of student loan borrowers are in limbo waiting to see if payments resume after the long pandemic pause. we'll dig into that story and so much more as "squawk box" rolls on

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wait. i got to sell the house! don't wait, just sell directly to opendoor. easy as pie. piece of cake. whichever. when life's doors open, we'll handle the house. good morning futures dropping the rollercoaster week for bed bath and beyond shares rolls on. as ryan cohen abandons his stake in the retailer. we'll talk about the $7 billion

media media rights deal and the players involved as the second hour of "squawk box" begins right now. >> good morning, and welcome to "squawk box," right here on cnbc i'm andrew ross sorkin along with melissa lee joe and becky are off today. it is friday, and u.s. equity futures at this hour are unfortunately in the red to end the week we'll see. right now we're looking at the dow down about 265 points, nasdaq off by 142 and s&p hooking like that would open down about 41 points treasury yields receipight now,f you look at the ten-year note, it's moved up. we're about 2.939. and when you look at energy these days rs , let's show you e board. and a bit of a mystery overnight

as to why this move is taking place, but if you look at crypto, bitcoin is off 7.5%, down to about $21,607. melissa, we should talk about why that may be. there's a lot of different speculation out there about what may be happening let's talk about some of the earnings coming out. deere coming out despite better than expected sales, we're looking at earnings, $6.16 per share, compared to $6.69. the company was able to raise prices but also hit by higher costs and cutting its full-year earnings outlook the stock down also the latest results from footlocker, the athletic foot wear and apparel retailer. same-store sales falling but that was smaller than

14.6that analysts predicted. former ulta ceo mary dillon will be taking over as ceo soeptember 1st. i've known her for quite some time i've always been long mary dillon did some extraordinary things when she was at ulta it was a bit of a rollercoaster, that stock itself, but when you think about the transition of being a bricks and mortar store to digital, when she got that's correc there online sales were about 4% when she left, they were about 30 nike has been the driving force behind that company, 70% of their sales are from nike. they want to get that down they don't want any single brand

more than 60%, which is probably too much anyway. nike itself getting more and more digital, trying to sell direct to consumer, trying to bypass the footlockers of the world. she's going to have a job in store when she gets there in september. >> she was a rock star at ulta >> totally >> for every quarter that nike report as steadfast increase, that's a loss for footlocker, always the way investors have perceived that and so when you think about the department store space for instance, and is there, you know, many people will lament the death of department store. what is the reason for a department store to exist? what is the reason for a footlocker to exist? a store that sells other brands when you can buy the brands directly these days. that's the conundrum that footlocker faces that's a tall order, but people

love their sneakers. >> the issue is that nike's doing such a great job of taking the best sneakers and some of the dliifferent collaborations, and all the stuff that gets people super excited and keeping that on the app, they're not sharing that with footlocker so that's when it gets complicated. that's something she's going to have to grapple with >> absolutely. a few other stocks to watch, morgan stanley is slashing the firm remains overweighed on the stock. and the possibility that meta could scale and monetizereal

es john culver isleaving starbucks. we will be hearing about all the big changes. if you've been watching, they've been climbing recently since july 1st m . home depot's ceo decker on replacement. second quarter results showing a strong performance, even as customers grapple with high inflation. and then there's the fed, folks.

let's talk about it fed officials putting on a united attack. but it is how high and how fast they raise jim bullard saying given the strength of the economy he is leaning toward supporting a third straight 75-basis point interest hike. meantime, mary daley saying hiking by 75 or 50 would be quote reasonable but that the exact pace would depend on employment and inflation data, coming ahead of the conference in jackson hole, wyoming and we learned from steve liesman that jerome powell will be speaking. joining us with ideas on where investors can hide, chief investment officer of new wedge

wealth >> i'm wondering what your take is on the declines we're seeing premarket. >> we're thinking that this rally would stall in the near term, because we've seen what we're calling a dangerous convergence that supported the rally coming out of the june yields, things like oil topping, and federate hike expect taatios topping. we've seen the dollar climb again. and what that raises the question is how durable this rally can be because as we see things like the federat rate hike expectati, it does make the valuation multiples look rather questionable we're at 19 times right now, which is really more consistent with a fed that is easing versus a fed that is tightening we do expect to see some

near-term volatility >> where will we see the most sf pressure i'm thinking about the runs that we've seen in not only the quality stocks but the big tech stocks >> that's exactly where we're likely to see the most weakness. that's where we had the strength on the back of the accommodative fed. but valuations there are even more stretched you look at the growth part of the market trading at 26 times earnings, above where we traded in a pre-pandemic high that's very ex-pen pensive. as we've seen the real yields start to climb and growth stock

remain resilient that's where we could see divergence close >> i believe utilities are higher than both their 200 and 50 50-day moving averages is this a viable defensive position >> that's what's so peculiar about this rally usually coming out of market lows you see the most cyclical risk-on leave the market higher. but yewutilities have been one f the strongest sectors in the market they are expensive, but clearly there is an appetite for defensiveness. our preference is to go into health care instead because it is a more reasonable valuation compared to the utilities and the staples. >> sounds like you think there are not many places to hide at

this point, not to say that investors should hide or that the notion of hiding is even a correct one. but you say health care sort of, we think health care is going, the valuations are better. >> yeah, you know, i think that the other place to hide and really take advantage of weakness is in the quality stocks they've lagged significantly coming out of the june lows. beta has been the leader coming out of the rally lower quality parts of the market and you've seen high quality left behind many if we have another bout of weakness we buy quality not outperform at every part of the market cycle we buy quality so we don't have to sell those names the next time we go into a downtournament tdownturn if we see weakness in lower

prices we're certainly buyers of that >> cameron dawson, thank you coming up, the total amount of student loan debt relief provided by the biden administration is closing in on $32 billion, that includes $13 billion for defrauded borrowers. we're going to dig into the student loan forgiveness plan and implication it may have economically the semi-conductor company is be meeting expectations before we head to break, take a look at futures this morning we are in the red this friday morning. "squawk box" coming right back after this power e*trade's award-winning trading app makes trading easier. with its customizable options chain, easy-to-use tools, and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are.

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. as the administration announced they would cancel another $4 billion of student debt, another 40 million don't know whether or not student loan payments will be resuming at the end of the month joining us is heidi heitkamp, now a founding board member of one country project.

and former governor of new hampshire is also here with us senato senat senator, what do you think should happen here >> you think about how it has driven inequality, i think it's absolutely the place where people need to take a look at equalizing student debt. now, is there, i think, political will or even, even political consensus that it all needs to be forgiven? i think that would be a huge mistake. but the step that he took to take on the for-profit campuses that have preyed on veterans was the right effort going forward i wish think would look at interest rate buy downs, taking a look at those retroactively so people could pay down their student debt much

faster >> senator gregg, is there any consensus on this issue? >> i don't know. it's a matter of equity, i guess. you have to look at the people who've paid their debt back. you see people who are being forgiven, and they say who's going to pay that back i guess i'll have to pay that back, too. you have $1.6 trillion of student loans. as you mentioned, 40 million people involved in that. and i don't know of a better investment you can make as a person, especially a young person, than to go to college. your return on investment is usually extremely important. the proposal for a $10,000 debt reduction for everybody under a certain income level, $150,000 of income, would be most of the

people who get the debt by the way, is pretty outrageous. it's a tremendous cost to the american taxpayer to pay for people who really have gotten a pretty good deal by going to college and got much better airing capacity. one other thing, college tuition has escalated faster than any other item in our economy besides hospital care. 160% increase. and that's a function of these massive loan programs and allows colleges not to be accountable they simply take the money and spend it and don't have accountability so i think you have to put accountability on the college side to keep the cost down i have no problem with heidi's idea that the people who were scammed should get relief. but for most american whose went to college and got a great degree and are going to make a lot of money, it's hard to say that the people on main street should participate in paying for

their cost >> is there a way -- he's right. there's a lot of people who've already paid out, and is there a way to means test it or focus just on those who've had unfair experien experience and then there's a debate about what an unfair experience is >> think about our veterans who were told they would get college tuition paid and now they hear they didn't really need to go serve. or teachers whose student debt would be forgiven. parents who sacrificed vacations now feel like a total wipeout of student debt is not a fair thing to have happen but i think that if you look at the interest rates prior to a couple years ago when angus king lid th led the effort, interest rates were way to high

i think if you look at adjusting interest rates, apply that backwards, people should pay their student debt i agree with the governor, but we shouldn't be preying on those s same students by charging 6%, 7% when the government's doing it at less than 1 apply it retroactively this is an idea that i've advanced for many year i think it's a way to explain to people how to equalize student debt but do it in a fairway. >> i think that may be true, but. >> go ahead. in what's going on here with the $10,000 elimination of debt or everybody under $150,000, it's crass political politics it's an attempt to buy votes, that simple. there's no reason to do that for most people. they can pay it back and for those people who can't pay it back you can do a work out schedule

but what you have here is a political agenda it's driving policy, tan and ito good policy. >> re . >> why aren't we having the debate about how to tamp down the cost of education. >> that's what i meant >> i know, but the interesting component is people say we're going to have that conversation, but we don't we talk about the contex of health care all the time you've pushed back on some of the price controlsand other things that the government should do, how should we look at education, health care and trying to bring these costs down >> you've got to put, andrew, you got to put accountability in the way. it's not by having a direct student loan program where basically, there's no concern about what happens to the money. we used to have a program that was on the banking system. >> i agree with you. >> that made sense, because you had underwriting systems that

made sense >> every time we raise the pell grant or student loan grant tuitions go up it's absurd. we tried to address that, never able to get to it because of resistance from the educational community. but there should be some sort of base where when you increase these programs, colleges can't use that increase to jump their tuitions >> well, when people -- >> senator heitkamp in. >> i honestly believe there is a way to do this, and it is to basically use the student loan program to say, look, we not going to subsidize fancy wellness center, all the things you're doing to recruit students to make this a country club and not an educational institution we own some of that responsibility in the federal government for driving up those costs by simply handing out a branc branch blank check to higher education. it also is an equity issue if you come from wealthy

parents, you get your education paid for, then you're ready to buy a house right off the bat. lower income students who go into this less educated probably because their parents didn't go to college, about how the student loan program operates, they end up putting themselves in debt and shorting their future during those years when they should be saving for retirement and buying a home and so this is a really important equity issue moving forward. if you're concerned about equity in america, you've got to be concerned about student debt >> yeah, but there's equity on both sides of this argument. how about the people who paid back their loans and now find the person next door is not going to have to pay back their loan i >> i agree, but there's a way to equalize this and do it in the receipt right way. and that's not across the board

forgiveness. this is not popular politically. >> north dakota's a rational state. >> we have to leave the conversation debate there. i wish you a happy weekend and look forward to talking to you again both very soon coming up, bed bath and beyond is down big again after ryan cohen's rc venture sells its entire stake in the company. former sec chair jay clayton will join us to discuss. time now for today's aflac trivia question. what is the state bird of new york the answer when cnbc "squawk box" continues aflac! paul is about to suffer a shelf-inflicted injury. luckily, aflac will help cover his unexpected medical bills. aflac! maybe you could use the money to buy a step stool.

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now the answer to today's aflac trivia question. what is the state bird of new york the answer the eastern blue bird. the bird also serves as the state bird for missouri. welcome back to "squawk box. let's take a check on bitcoin.

we saw that sudden drop early, early this morning it's a risk-off sentiment we're seeing in the futures. bitcoin is down. bitcoin-related equities are also falling sharply premarket take a look at the leaks of a marathon digital, riot blockchain all of them showing in some cases double digit decline >> we'll talk to former sec chair jay clayton. don't miss our interview with one of the ceo of one of the largest mtas

i think we're kind of in the wild west these days that is something where i would expect someone from the sec enforcement to pick up the phone and say what the heck are you doing in they should make inquiries, they should call ryan in, ask his counsel, what do you

sthi think is going on here and get things going i don't have subpoena power, but if i did, i would use it right now. >> that was jim cramer yesterday talking about ryan cohen's stake in bed bath and beyond he's now cashed out of his entire position. let's bring in jay clayton, former sec chairman and cnbc contributor. great to have you with us. the idea he's hitting on the head is that ryan was an analyst on the stock should the sec investigate is this should there be questions about what information he might have had access to or privy to in >> nice to see you on a friday there are twiend kind of two issues here. one is what i would say is the extreme upside volatility, the meme stocks that we talk about for, and sort of the risk that

introduces into the market place, including what worries me is for retail investors. some are winning, some are losing, but by and large, it's difficult in times like this and the second issue, the one that you raised, and the one that jim was talking about yesterday is, when you have an activist invest iror, and the activist investor is going to exit the stock have they done so at a time when they have public information there's the question about the fairness of the exiting of the stock position and look, jim is right we have very good rules. there's there's room for improvement but people to know that the rules that we have are being

followed and whether this rises to a subpoena, like jim talked about or not, that is where the good women and men of the sec decide. but people need to know that they're watching, and if there's a question about whether somebody exited a large position in a stock, you know, with material non-public information or not is a question they're asking >> do you think there's more importance for the eksec to folo up on this particular case because ryan cohen is basically a meme stock lord so to speak. there are legion whose got into bed bath and beyond solely because the chairman of game stock got in too >> anytime you have situations like this in a regulated industry, you're going to have the people who are the cops on the beat, as we say, look into this i'm sure that they'll look into it how they lookinto it, that's going to be up to them

but i'm sure they will look at this both around the trading and around whether there was market activity with material non-public information or whether, look, activists are very good at this. they understand the rules. activists are an extremely important part of our market place. they do drive value. the rest of us who are index investors, we ride along on that value, and they generally, at least in my experience, more than generally, almost always are very careful p tabout these issues >> do you think the sec has a great responsibility, maybe it's not a new responsibility, but given the rise in reddit forums and the like to be in the education business i ask that because you go on these boards, and there are some people saying so many thing, a lot of which doesn't make sense.

there's a lot of mart smart peoo those boards as well but it seems as if something is amiss, something is wrong with the system >> should the sec be in the education business of course, is the sec in the education business y yes, there are many people at the sec whose job it is to put out information for the retail investor to understand how the market operates. and when the market is departing significantly from fundamentals, whether that's speculation from a short squeeze or the like, you are getting into trading you are getting into speculation. and at the extreme, you're get not geting into gambling people should understand that. and there's not a lot we're going to do about that people in this country are allowed to make choices like

that do i think they're wise choices? no d do the people at the sec think they're wise choices? no, but they let people make them. they should always be looking at information that comes into the market place, around these short squeezes, we can do better on our disclosure of aggregate short positions. it would, i believe, reduce the speculation about whether a short squeeze is on or not i also think we can revisit some of our forums. you guys did a terrific job of cleaning up confusion on whether the activists were getting long on stock or not. but our forms, forms that people file, can they be ease your to decipher those are the types of things that the sec should continuously be being looking at. >> should the forms be filed more in real time?

we live in a time when certain forms are filed electronically and others that are not. he had till end of close until business today to disclose that he exited the sale yesterday or the day, yeah, yesterday and so should that be more real time or, i mean, should the sec be more committed to moving these sorts of ti disclosures online? >> the sec should be looking at how information gets put into the market place, and the question of whether we have paper filings or electronic filings should have been long-sighted we should have electronic filing makes for ease of access and the like but the issue of time something more difficult we do need activist investors in our market place they do need time to build stakes it's not, we know it's not appropriate for people to have

to disclose every trade in real time otherwise your trading tranls get followed look, we need people to be able to build stakes. exiting on the other side they need to be able to exit without people following now we should always be looking at those things more to the point on market integrity around activists is the material non-public information that jim cramer raised when we started at the top of this. >> a lot of questions here, jay. and i'm sure we talk about much more with you in the future. jay clayton, appreciate your thoughts >> thanks a lot, melissa >> okay. coming up, we're going to talk about it pot stocks are flying high as of late you get it taking a look at some of the names in the sector and how the buzz around cannabis reform has investors craving more gains and then the big ten striking a record media rights

deal, george pooin will be with us to discuss what it means for the conference involved and the contenders don't forget to get the best of "squawk box" on your favorite podcast app. stay tuned back after this. with models that fit any lifestyle. and innovative ways to make your e-tron your own. through elegant design and progressive technology. all the exhilaration, none of the compromise. the audi e-tron family. progress that moves you.

welcome back to "squawk box. wayfair announcing it will lay off approximately 870 employees. the decision part of the previously-announced plan to manage operating expenses and realign investment priorities. melissa, you use wayfair >> i have in the past. >> there's so much stuff on wayfair, it's unbelievable >> it's almost overwhelming the choices you have for a white sh shelf. too many >> decisions, decisions.

>> we are looking at the pot sector >> rallying on high hopes for reform happening sometime this year, and we are seeing the most meaningful push for cannabis rye form at the federal level ever the senate hearing last month and now this month canopy, higher canadian names seeing the biggest boost because they list on the major exchanges tort reform doesn't necessarily mean legalization. there's a 60% chance that the safe banking act will pass this year the bill effectively provides a pathway for banks to do business with cannabis companies legally. cannabis is federally illegal. it would reduce the capital. the biggest hurdle right now,

social justice provisions that senator cory booker is increasingly vocal about they include social justice measures and economic incentives for those impacted by the war on drugs, and that generally means people of color. cowen said it must satisfy democrats without turning away gop support. if booker gets more aggressive, we don't see how a savefe act passage would get through the senate they're also seeing a big spike in trading volume. >> the stocks always seem to trade with the political winds hopes run high that there's going to be the safe act or some form of it and they get dashed how is pricing doing in this inflationary environment what are the fundamentals of these businesses the sector overall, while they've seen a lifeline in the

past wykeeek, two weeks, three week, a year, they're down more than 40% >> one of the secrets about cannabis business, yes, people are buying more cannabis, but the pricing for lyegal cannabis is higher. i spoke to an analyst a few days ago. she estimates the market's about 25 billion the black market's about $50 billion and the pricing's better, and guess what, they'll just drop it off at your house in a lot of places it's really hard for the legal marketers to compete consumer packaged goods with cannabis also have a much higher margin you look at cannabis drinks, about a nickel to a dime goes into the drink but they can retail for about $5. coming up next, we're going

to talk about this one, the big ten making a very big deal big news with a seven-year media transaction to bring in $7 billion to one of the most powerful athletic conferences. we'll dig into the deal and the media media players after the break and what it all means. we are in the red looking to open off we talk all about that when we return

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americans spent more time in july watching streaming content than watching cable tv, according to nielsen, it's the first month that streaming has overtaken cable. streaming services captured 34.8% while cable captured 34.6%. we're going to discuss college sports, joining us is george pyne. this is a massive deal worth basically a billion dollars a year they changed the game by spreading this out among many networks i'm curious how this changes the sports rights. is this a seismic change that never goes back, toothpaste is out of the tube situation in >> a couple thing, one, it's a

massive deal for a college conference, right, significantly more than the national hockey league on its own, almost two times that of the national hockey league. when you aggregate, it's often par with the nba, in college, six different people selling a fragmented set of rights what it means is college sports' content is enormously valuable the big ten is a big winner here, why? they're going to get the clout of viacom in a way that's never been applied to college sports before it's definitely a game changer for the big ten and member schools. >> so, george, how much pressure is this going to put on the ncaa to pay the players is this we've

bplayers? we've been having this debate for so long. s to does this put more light on the conversation >> i think it's pretty clear that eventually, in the next five to ten year, the players will have to share in the gate revenue in the media revenue i think it's only a matter of time and the question will be, will this be led by the courts or the industry or does a regulatory function take hold here right now you have this multi-billion industry affecting people all over the country, kind of because of the fragmented nature, kind of floating out in the atmosphere and the nil was led by the court. i just hope that the courts don't lead the way here on the future structure of college athletics.

>> who who is going to lead the way? can you imagine a day where the ncaa basically says for the last 50 years we've been arguing this point but we've decide to change our minds? >> when i look at the ncaa, it's an institution with three divisions. i think it's an antiquate the model. really, there's a small set of schools, probably 65 or so, that have certain sets of issues that are quite different than 300 schools. it's really hard if the ncaa just represents its members. and it's important for the members to come together and have a shared vision that's that's why you take the nil, it wasn't led by the universities or conferences >> what does this mean, to the degree it matter, what does it mean for the smaller schools part of the ncaa what does it mean for the non-revenue sports at those

schools? >> it's a big issue, andrew. what people have to come to grips with, football, olympic sport. if you pay the players, what happens to the funding of those olympic sports what happens to title ix it's going to disrupt the entire ecosystem within college athletics, that's why this is better led from within the industry or by the super league or by the government somebody has to come in and take control and organize this for the good of the game and the student athlete. >> if it's not the government, who's going to do it, you mentioned the super league, government got involved, right >> correct i think at some point, where are you going right now? is it outcome led by the courts, further consolidation. you saw gavin newsom speak about

why isare they going into the b ten. it would be better by the industry, and the middle of the road would be the government >> there's an article in the l.a. times saying that the regents board in california think they might have authority over whether ucla joins or not >> what does that mean to all the other schools in california? there's much more to this than hey, i can get a few more dollars for a football contract. but of course, ucla doesn't want to be left out there has to be somebody to take the lead and see the whole view for the entire industry. >> let me make it complicated for you, george. all the folks in the media businesses, what is the role of media companies, to the degree

you think there is a role in this very debate >> i think the media companies are doing what's best for their shareholders, so they're trying to balance the interest of their shareholders with the people they're aligned with so if i'm a media company aligned with one network i'm not as concerned about the other conferences. when you have a fragmented industry, big stakeholders have a bigger role than perhaps they would in a consolidated industry that's why consolidated leadership would be best here for the industry >> you think there's an anti-trust case to be maidde by the way around ncaa? >> if you look at what the judge wrote, a 9-0 ruling saying that essentially the way that college sports are organized is illegal. i think there's an anti-trust case coming in the coming years. >> coming there, in the game of golf, a lot going on here,

george and you're in the middle of it we appreciate you being with us. >> my pleasure, great twobo be t you. coming up, talking about getting ridership back to pre-pandemic levels. take a look at crypto. bitcoin at a three-week low, down 8%. and take a look at the futures, risk-off here as well. the dow would lose about 257 points right now "squawk box" will be right back. power e*trade's award-winning trading app makes trading easier. with its customizable options chain, easy-to-use tools, and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are.

good morning stocks set to drop at the open as investor sentiment sours on the final day of the week. and bitcoin falling below 22,000, to a more than three-week low plus investment of a whole different kind big money in parking vehicle this is weekend. we're going to head to the world famous pebble beach car auction as the final hour of "squawk box" begins right now.

kgood morning we're live from the nasdaq market site in times square, i'm melissa lee along with andrew ross sorkin, becky and joe are off. >> becky and joe are off you said becky and andrew. sometimes i act like i'm off i know i'm on. >> never you're always on y you're the top of your game always i'm sorry. >> not always on >> andrew was so on my brain that i had to say it twice how's that >> i got it. i got it >> anyway, it's happy friday for us but equity futures will be off

treasury yields, the ten -year t 2.9% bitcoin is basically at a three-week low, maybe even lower than a three-week low at this point. 21,455 and crypto-related names, equities, specifically marathon digital, they're all down sharply across the board their morning. take a look. we've got breaking news. general motors, the auto maker has reinstated its quarterly dividend and will pay 9 cents a share as of september. it had suspended it in april of 2020 as the pandemic was taking hold gm also increased the share authorized for purchases we're seeing that stock react,

up by a little more than 3% right now, andrew. >> wow, look at that we have other big headlines to bring you. we've been talking about this saga all morning, maybe all wyke b bed bath and beyond shares are plunging based on ryan cohen selling his entire stake paper hands. yesterday the company tdisclose it was working on strengthen being its balance sheet. that stock off 42% right now d

deere shares lower. footlocker, 21% up former ulta head will be the new ceo happening effective september 1st. she's got quite the job ahead of her as they try to diversefy away from nike, which has represented about p70% of sales they're trying to get that number as nike tries to sell more dtc, direct to consumer that's something she did successfully at ulta we'll see. >> joining us, chief investment strategist, jim, thanks for joining us we have a big week next week, jackson hole powell speaking on friday. what are we pricing in, in terms of the fed >> good morning, melissa, thanks for having me. i really think the catalyst under this market rally is that the market is picking up, that there's already a new easing

cycle that's started and the premarket is already done tightening. bond yields interestfrom two ye0 years have rolled over fiscal juice is starting to expand again not only with the past policy and the package but just because the economy slows automatic spending goes up so you're getting a lot of liquidity cycle. the fed, it's been behind the curve the whole way. the bond yields have led yields in the tightening cycle up and i think the bonds are now leading the easing cycle down again. so, you know, we're, certainly the market will pay attention to the fed, there's no doubt about that, but look, you know, fed has continued to talk very

hawkish. and the markets continue to climb through this period and really bond yields have stayed pretty tough around this 3% area, whether inflation's hot or cold, whether the fed's hawkish or dovish. i think it's saying that we're into a new easing cycle and as an investor, do you want to miss that >> i thought that up until that last sentence, jim, you sounded like you're skeptical of the latest run we saw from june lol lows, is that the right characterization >> no. if we're into a new easing cycle, i don't want to miss that inflation's also coming down, melissa, and as it comes down, real liquidity growth is going to improve even if nominal -- >> i'm sorry to interrupt you. but the slope of inflation going down isn't going to be the slope

of inflation going up. it is possible that we've seen peak, but inflation remains stubbornly high. s does that mean that the fed will declare victory and ease? >> certain hly all the premarket is easing. the fed is the only character that hasn't yet. there's plenty of reason to expect inflation's going to keep going down, melissa. the biggest thing is that past policies have been incredibly contra

contractionary fiscal growth was 18% of gdp in march to 2021 down ab4% the lagged impact of that, and there is about a one-year lag from policy tightening to when it really impacts the economy. we're in that cycle now. but yet, when you look at what's already occurred in the past, that flag is going to continue to put down ward force on economic growth and inflation well into next spring. the fed can stop now, because there's already policy tightening that's going to continue to push inflation lower. one other point, if i go back and look at major inflation peaks. let's say any peak above 5%, almost every one of those is a v top. you just can't find a rounded major inflation peak they all come down pretty fast, about as fast as they go up. and i think this one, so far, looks pretty similar >> jim, great to speak with you, thank you. >> thanks. now let's turn to a different topic.

that is the return to office as a growing number of workers prepare to come back next month. new york city transit might see a welcome boost in ridership lately, only 60% of pre-pandemic levels joining us from grand central station, chair and kroichlt of tof the mta if we had this conversation a month from now, what do you think the number will look like in. >> i think we are headed in the right direction. the mta has been coming back slowly since omicron began but i'm starting to hear about the business community really starting to get people accustomed to three days a week and maybe four days a week rather than the one and two. now the mta is not totally dependent on white collar workers. we've had people riding right

through the pandemic and three quarters of our riders are not white collar worker whose can do hybrid work so when kids go back to school and normal business returns, i think we're going to see a move after labor day. >> you've seen the numbers you've seen the quotes there is a lot of concern about security in new york city. policing, on subways, on buses and other places david solomon, the ceo of goldman sachs said look, this is a problem for our workers. and you're hearing it more and more whether it's true or not or whether the perception is worse than the actual situation, i think we can have that debate. but the question is, what do you think you need from mayor eric adams? what do you think you need from the city in how important is that perception? >> you're right, you know, we need our subways to be safe, but we also need them to feel safe and mayor eric adams, we are blessed to have a mayor who's passionate about this issue, who

is an ex-transit cop who really is interested in subway safety and who rides the system very regularly. so i talk to mayor adams, and what he's doing is responding to our request to put cops on platforms, and we're starting to see cops on the trains as well that's what makes riders feel safe they're telling us that again and again to the mta in our surveys. i think we're hided eaded in the right direction. >> there's a lot of homeless folks on the subways, a lot of folks that seem to be mentally disturbed. everybody moves to one other side of the train. how do you solve that? >> andrew, that's a really good point. there's a relatively small number of people who have mental health issues that are in the public space and have a disproportionate impact on what it files lieels like to be in te

public space if they're behaving erratically, it's alarming to the public. they are getting those folks into supportive treatment and housing, but it's not going to happen overnight you are seeing professionals at the end of the subway line meeting those folks and trying to get them out of the public space and into treatment that is going to make a huge difference, you're absolutely right. >> let's talk about the economics of your own business or your business unit if you will we're looking at $2.5 billion of deficit by some estimates, i think maybe by your own estimates. how do you get out of that hole? >> well, what we're not going to do, listen, in new york, as i always say, transit is an essential service like police, fire and sanitation, i say it's like air and water for new york city we cannot survive at our denisiy

without really effective transit. what doesn't make sense is to slash service and dramatically increase rates i have started a discussion with leaders in albany about a new model of transit funding there's no reason new york should be the only place in the united states where we rely on the fare box for 50% of our operating budget this is a pro-transit mayor and governor and legislature it's time to reimagine the funding model. that's going to start happening in january in albany >> as a new york city resident and new yorker i want to try an idea on you. what do you think would happen if for one month, and you could start in september, the mta said, you know what? all subways, all buses are free. if you did that, how much more, how many more people would get on those subways and buses what kind of attraction would

you actually, would you be able to sort of judgmp start the whoe game it would resolve some of the safety issues because you'd have a lot more people riding the trains >> you run a business show if you ask some of your ceos if they'd start giving away their product for nothing they'd look at you like you're crazy but it's not a crazy idea. making it affordable is something we do want to do but what we have been doing is doing all these new discounts to try to bring riders back, especially our suburban commuters. swrie we have a new hybrid fare. we want to use pricing to bring people back. whether we can go all the way to zero, i think i have to have a backup plan. but it's an interesting idea and

the core concept of getting people back is right on. >> cost is not a deterrent for a lot of riders, i think it's a perception of crime. do you agree with that in at this at i used to be a typical subway rider. i'd be home in ten, 15 minutes flat i have not taken a subway since before the pandemic, because of the fear of crime, particularly as an asian-american woman and i'm just wondering how you spike to a rider, former rider like me. i feel like there are plenty of mes out there. it's not about the cost. it's not about covid anymore it's purely about personal safety >> well, number one, melissa, we want you back, and i will personally take you on your inaugural subway ride, but as you said, it's by far the easiest and fastest way to get around i also think it's safe if you look at the numbers, the

probability of being a victim of crime on the subways actually is, you know, we are still the safest big city in america i see your graphic is telling another story, but the bottom line is it's a safe place. it needs to feel safe as well. that's why we love that mayor adams is putting a lot more nypd police especially on the trains as well as elsewhere in the subway system. >> we want to thank you for joining us this. >> mo. we morning we are rooting for you >> thank you, thank you, melissa. coming up, a potential spinoff. we have the details next but first as we head to break, check out the leaders and laggers.

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. welcome back to "squawk box" this morning take a look at futures on this friday morning we're a little over an hour from the market opening, but it's going to open down dow off about 240 point, the s&p 500 off by about 40 points and the nasdaq down about 142 points let's also talk a little energy right now. we showed the oil boards wti crude now 89.10. >> a potential spinoff could create a separately traded company from the msg sphere. that's off by 4.5% wayfair is cutting about 870 jobs, roughly 5% of its global workforce. the company says it is in the process of making substantial reductions in third party labor

costs. that's down 7.7% home depot announce aing a new billion buy-back couple analyst calls of note that we should be mentioning this morning morgan stanley slash being its price target for meta platforms, citing a shift toward reelz. the firm remains overweight on the stock and citing the platform's unique reach and the possibility that meta could scale and monetize reelz faster. you can read more about these calls on cnbc pro.

hp down a little over 3.5% a lot more coming up on squawk after the break. warner bros. discovery fighting to find its footing from big changes at cnn to a big, big bet on house of dragons on hbo we'll talk with axios reporter, sarah fisher, after this

h welcome back to "squawk box. futures right now pointing to a lower open nasdaq down by 155 crypto's also risk-off bitcoin falling to a new three-week low, down by 8.5% ether is down by about 9.5% right now. andrew meantime, shares of warner bros. discovery under pressure coming amid turmoil at cnn they've canceled one of the longest-running programs but the company is hoping for success with "house of dragon", premieres on sunday night. lots going on at warn er media o warner bros. discovery folks trying to understand what's happening at cnn, what's

happening at hbo and beyond. give us the big picture and maybe take us down granularly about what you think the big conversation is right now. >> yeah, the big picture is that when these two companies combined, there's a ton of debt, over $50 billion worth of debt so the leadership trying to streamline operation and combine hbo max and discovery plus to save on costs, and at the same time it wants to pivot the company's strategy to being much more profitable. what does that mean? it means they're going to be selective about the movies they put in theater, they want them to be high performers. they're going to streamline operations that go into their streaming service, and it means that they're going to have to make a lot of cuts they're starting to do layoffs they're coming for their advertising department had is all part of david saz

love's plan to bring it to a profitable business. >> the departure of brian stelter, what do you think that means? >> they've been pretty out there about their plans to make cnn a lot less polarizing and a lot less hyperpolitical. my guess is that the direction of leadership saw the show as being something that was maybe a little bit more, you know, partisan than they hoped it would be "reliable sources" is an institution. it launched in 1993. by cutting that show, they're making a big statement that says we're not afraid to make big changes to this network, if it

means it's going to push it in the direction that we want as you know, john malone, a shareholder in the company has not been shy about saying he wants cnn really to return to the center. >> let me ask you about that center one of the things they've argued is that they are re's going to e higher ad dollars if they're perceived to be incenter, does that make sense to you >> absolutely. you want to sell to both sides of the aisle it's not just political ads but corporate branding ads a lot of them are going to feel more comfortable being toward the center cnn is a pretty profitable network. the executives have said, according to sources to axios, that they're willing to lose a little bit of money in order to shift it to the center, because they think ultimately one day

they'll make more once they get there. >> let's talk hbo. there is this prequel to "game of thrones." a lot riding on that comes out on sunday. how important is that in terms of the future of hbo, hbo max and whatever becomes this hbo max discovery plus super app >> it is a pivotal moment for the company. and the reason is "game of thrones" was one of the last points of sort of programs that we could all watch at the same time and now they have an opportunity to create that sort of cultural moment again and if they can do it right, andrew, it's not going to just mean great ratings for hbo but a lot of engagement. they can broaden the franchise, sell merchandise but they are mpicking a great time to do it. "better call saul" just ended.

there haven't been a lot of big thing coming out on streaming. i think this is going to be a huge, huge deal for the company for their third quarter. in how do you handy icap, now we're going up against amazon, they spent a fortune on their own program. if we have this conversation at the end of both of those series, what do we think is going to be the ratings winner >> oh, i definitely think the "game of thrones" prequel will be the winner. you have so much momentum around this particular franchise. so many people are looking forward to this for years, and i also think that the last season was a disappointment for a lot of viewers people want to come this weekend and see, is this going to make up for what we lost in the last season, and based on what i'm hearing, i think it might. >> sarah, it's always good to see you. for helping us break down what's going on in the media universe >> thank you coming up, the rise of esg,

the good, the bad and ugly for companies and investors. but before we go to break, look at the winners and losers. you're watching "squawk box" on cnbc

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welcome back to "squawk box" right here on cnbc want to get you up to speed on the markets. red on the screen, dow off about 260 points, s&p 500 off about 41, nasdaq off about 154 points right now. we'll see where that goes. take a look at the ten-year note as well the right now you're looking at the ten-year sitting at about 2.9 and finally, let's take a look at the oil boards. you're looking at wti crude if you want to buy it by the barrel, $88.91 and melissa, the mystery's still on for me. i don't know what's happened here overnight we're showing you currencies here but can we flip that board and get us a little bit of crypto? right now we have bitcoin moving down in a pretty big way down now close to 9%, actually

moved down farther as the program has progressed what to you think's going on >> i have no idea. it was a sudden drop really, really early on in the session. it was down 7% in short order. it does, what we're seeing right now f we di now, if we didn't, the drop itself, i don't know how to interpret that >> hard to though. hard to know i'm trying to get you an answer. i'm working on it. new this morning, chinese-canadian billionaire has been sentenced to 13 years in prison and his company fined $8 billion. he pleaded guilty to bribery and other crimes that had jeopardized the company's financial security he disappeared into chinese custody. his relationships reached into top tiers of the chinese

communist party elite. john culver is leaving starbucks and become an executive advisor until he leaves the company at the end of the year many things will be managed by howard schultz the investor day is scheduled for september 13 shares are basically flat but are climbing since july. in tech news, shares of implied materials are higher they beat estimates on the top and bottom line. guidance for the current quarter came in ahead of expectations. and ken griffin's citadel has borrowed $600 million. the firm told lenders it plans to use the money in part for

additional trading capital it comes after citadel reported it took in $4.2 billion. meantime, let's talk about the rise of esg investing. it's led to the companies using better practices but should chinese companies be excluded from esg funds? joining us is vivek ramaswamy. i know you think we should be focussing more on some of those issues, but at the same time, we've gone back and for the on this there are some benefits to thinking about these esg issues, no in >> well, look, i think the topic of the day, you brought it up, is watching what's happening with these chinese companies,

now delisting from the chinese stock exchange the question is how you apply th these esg sdatandards in the wet without applying them to the chinese. why did they apply to delist they don't want to have the same transparency and accounting and government standards applied to u.s. companies as well it's interesting to look into why it is that the same asit management firms and financial institutions that impose esg on u.s. firms do not apply it to china. the answer is it's in their financial interest to do so. while it makes for good strategy in the united states, in china, if you applied those same constraints to those companies the ccp would tell you to leave

and shut the door on the way out. what we're really sighieeing is asset management firms doing what's in their best interest, allowing them to maximize revenue the most esg for me and china for three hypocrisy. >> there has been, they're going to be delisted, but there was a discount to the stock price meaning that esg companies have gotten a premium whether they deserve the premium or not we can debate but when you look at how they assess them, they're not assessing them on any esg metric because there isn't esg going on over here. >> there's other factors at play the biggest evangelists,

embedded in the presupposition is that laws are going to change ten, 20, 30 years from now to adopt emission standards to firms that don't meet that standard today, that's embedded. yet the irony, most u.s. investors don't know that when they're buying alibaba or tencent, they don't own the company. they own a cayman shell company. and the institutions that are pushing you esg are talking about china's bright future without at all putting a fixer finge on the china risk. >> are you trying to just say, look, they should be calling out china and they're not, and that's what you're upset about

in orabout? or you' are upset -- there is a double standard. there are people who have they have lots of different views but feel like they can't say something aloud in china some people say that they're actually doing the right thing in terms of thinking about their shareholders and capitalism and all that i'm trying to figure which side you're really on >> i think investors should be able to see through the hypocrisy to make the decision for themselves to say there's a conflict of interest when you use shareholder client capital in the u.s. to tell chevron or exxon to drop oil production, but on the other side of the world, for companies invested in china, you saw a project that chevron dropped in the sichuan

province they don't say a peep, blackrock does, even as its own shares of petro china as petro china picks up the same projects that exxon is dropping. to be crystal clear, it's a conflict of interest that leads to a fiduciary problem as a vocal shareholder, you can't advocate in the west that these companies need to drop production projects while other funds that you manage own chinese companies that are actually buying up those same projects and petro china just reported great financial results that attributes to, wait for it, greater oil production investments that they made it's the conflict of interest and fiduciary breach >> there's another issue at play there is a hypocrisy to those

who call out, look, there are those who will call out human rights issues or other issues in the united states. they won't call them out in other places i won't disagree with you that that's utterly hypocritical, no question but the question i would raise with you is for example in the united states we have a lot of pink pension funds and consumers who are starting to vote with their feet, and they're not making those decision this is china they're making them in europe and the u.s. and whether you believe that that is an investment opportunity, if you wanted to be in clean tech for example, or not. there's something else going on here >> yeah, the thing going on, you're right if you want with your own money advance your on valwn values, i free country, it's your prerogative. >> if that's actually a trend, and we can debate whether that's a trend.

and if that is rieal, by defaul, if you are a u.s. pension fund, you probably should be at least acknowledging that's happening and say, maybe that shouldn't affect my decision because there will be less individuals to invest in those businesses >> what we've actually done is taken trillions of dollars of other people's money who don't want that agenda advanced and use it nonetheless to use voting power and share advocacy power to tie the hands of u.s. companies. calipers in new york may say we want to make a full commitment >> do you -- >> -- disagree with that is the part of the point. what we're seeing today is the use of other people's money in the united states, including for states that aren't on the coast. including every day citizens across the country to advance values that most of those

citizens don't agree with. >> if you're right, if you're right, if you're right, why is there so much criticism, criticism, of blackrock and say the street and the likes from all of the environmentalists who say that they're hypocrites. they write these letters saying, you know what? you energy companies should be doing a lot better, but when it comes to voting they're criticized on the other side as well, don't you think? >> i think thinkey are criticiz, they're trying to put the toothpaste back in the tube. there's no god-given right for any firm to manage $10 trillion when there are diverse interests that need to be represented. when you try to be everything to everyone you're nothing to anyone >> now we're talking about size and scale. >> we're not just talking size and scale, andrew. we're talking about representing client interests who have

adverse underlying interests i think is impossible for a share manager who is a vocal advocate to be an advocate for both at the same time. i question whether you can be a good vocal to the state of california and texas it's not as big as that argument it is an argument that if you are so big that are you representing diverse client interests, you can't do that by rippi representing the plaintiff and the defense at the same time >> in a wireird, strange way yo r represent what might be describe desc described as big oil, big

energy do you think you'll be on the right side of history? when people go back and look you up, they'll say this guy is doing the receipight thing for s >> i wouldn't be doing it if i didn't think i was doing the right thing. i'm also a proponent of nuclear energy the mystery to me is that the biggest proponents are those of nuclear energy we need to shift the dialog back to what constitutes human flourishing. it's the opportunity for north american companies and value creation in a society. at the end of the day, what these esg critics have done to the united states is contributed to a massive imbalance you look ati vanguard funds, the

exclude nuclear energy by rule if you want to ask me standing for human prosperity that fossil fuels have delivered and nuclear energy, you're darn right that i do believe that's on the right side of history, and i'm saddened by the fact that more people who agree with me behind closed doors are afraid to say that in the open but the more who say that in the open -- >> we agree on one thing, and we won't do it behind closed doors. i very much think we should be having a big conversation about nuclear energy in this country i'm assumehamed that we don't tk about it we'll have you back on always enjoy the debate. melissa? coming up, an investment of a whole different kind stocks, bonds and cryptos. big money being parked in vehicles this weekend. robert frank joins us from the

world famous pebble beach car auction. morning, robert. >> reporter: good morning. this is the super bowl of car collecting more than $400 million of cars coming up for sale we'll show you the most expensive rides and whether inflation may be overheating in the classic car market, coming up after the break

the annual pebble beach car auction is happening in california this weekend. that's where we find our robert frank.

hey, robert. >> reporter: good morning, melissa. more than 85,000 collectors pouring into the monterey basin, more than $400 million worth of cars expected to come up for auction, blowing past the 2016 sales record international buyers are back in pebble beach this year for the first time since 2019, and they could continue this raging bull market that we've seen for classic car demand and prices over the past couple of years. if you look at the number of cars offered this weekend for $1 million or more, there are 142 of them, that's an all-time record >> we are hearing almost across the board of stories of great demand, lots and lots of potential bidders on almost every single lot, which is pretty cool. also it's a new generation coming in. >> reporter: now, the star of

the weekend is a 1955 racing ferrari an r.m. sotheby's, expected to sell for 25 to $30 million. gooding has a 1937 bugatti, expected to sell for 10 to $12 million. guys, my favorite, sean connery's personal astin martin db5 like the one driven by 007, expected at about $1.5 million we're here at mecum. their big sales started yesterday, going on tonight, including this mclaren, a 2022, so it's brand-new but already a collectible, estimated at 2.6 to $2.7 million guys, the roof is not included >> well, then i'm just not going to bid on that one, robert >> reporter: or just don't drive it in the rain >> that's true too coming up, new bull or old

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hour to the opening bell futures point to a negative open dow is looking to open lower by 200 points right now joining us now, do you think the june low marks a bull market what is the context, what do we need to see in terms of the inflation picture in order for this bull market to be a bull market >> look, we had a very significant bear market earlier this year, first half of the year, basically. i think it did make a low on june 16th when we fell to 3,666, which was, by the way, 3,000 points higher than the previous bear market slow, at least on an intraday basis i think clearly what we need to see is for continuing moderation in inflation the jury is still out on whether inflation actually peaked early in june or so. i think most investors were hopeful that that was the case

that's one of the reasons we've had this bull run. but clearly inflation has to continue to moderate and the fed in that context should deliver one more rate hike in september and then pause to see where we are. >> so you're a believer in a pivot, you're in the pivot camp, ed >> well, i don't think the fed is going to be lower rates next year i think the fed will raise them to around 3% and then probably keep them there. i think we're going back to a much more normal environment i don't think we're going to back to zero interest rates. and i don't think we're going to get back to 2% inflation rate anytime soon so i think the fed is going to have to keep interest rates relatively high. and i'm in sort of the slow growth rather than terrible recession outlook. >> how does what's going on in europe, i'm curious, ed, effect, if at all, your view of what goes on here in the united states if we're looking at seven times

what we're paying in the united states, and we're paying high prices, it's only going to get worse in the wintertime. they're facing real recessionary fears. does that include your view? >> absolutely, i've been thinking there's a much greater likelihood of a recession in europe and china than there is in the united states and that's obviously going to have an impact on us in terms of bringing the economy down through weaker exports however, the guood news in thei most fortune is that that's likely to bring down inflation on a global basis, which helps us quite a bit >> it sounds like your view is that the market is treading water until the end of the year and we go higher next year >> you know, it's very hard to

play corrections it's also hard to play bear markets in the sense that you have to be smart enough to know to get out at the top and to get in right at the bottom and i think there's a lot of fomo out there, people who wish they had gotten in prior to june 16th and had gotten out after that earnings i think are going to go flat i don't think they're going to go down. in a slow-go economy, they're going to go flat put that all together and you have a market that probably goes sideways for a while before moving on to new highs next year >> ed, always great to speak with you, ed yardeni of yardeni research which still have half an hour to go, the s&p 500 off about 36 points, nasdaq off

about 142 points right about now. still trying to make sense of crypto here, melissa i don't really have an answer for you. but right now we're looking at bitcoin down about $21,540 >> maybe it's just risk off across the board, across assets today. we'll see. >> we'll see thank you, melissa, for hanging out. >> pleasure. >> hope to see you next week have a great weekend, everybody, hope you join us on monday "squawk on the street" begins right now. good friday morning, welcome to "squawk on the street." i'm carl quinn an -- la with mike santoli and dave faber. investors consider whether this bear market rally has run its course for now dollar is headed for the best weekly rally since june. bed bath shares plunging after it was confirmed investor ryan