suffered the worst day since june 16th. that is the low that we're all talking about. whether it needs to be challenged and broken. we'll see. a developing story. mooelon musk wandsts jack dy to turnover documents. and now opec wants to cut ou output it's tuesday, august 23rd and "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc i'm andrew ross sorkin along with joe kernen. becky's off today. nice to see you, sir we have a lot to talk about because boy was yesterday a wild

ride i saw you, mr. kernen, on "fast money. >> i needed to close that day. i'm back two weeks off. rested i might as well do it. they asked me. i'll do it again tonight >> full day's worth of work. >> it is draining. i like those guys and gals on the show >> fun to see how it starts in the morning and ends at the end of the day we started in the red, but we ended in the red let's show everybody >> helima croft. it started with helima croft sitting at the nasdaq and ended with helima croft with helima 12 hours later. both of us pulling in full days. >> let's show the audience where we stand three and a half hours before the market is set to open. we might get a give back here. we will see dow up right now s&p up 12 points

nasdaq up 42 points. treasury yields, 10-year treasury now sitting at just about 3.018, joe >> we will talk a lot today about fed pivots fed puts fed this fed that core do we use core that gets us a couple of points of breathing room. andrew, if we are down here at 3, let's talk about the 10-year treasury inflation at 3, 8? that's bad we need the 8 down we need the other things up. meet in the middle if we do core, core is 4 or 5. if we get that down -- there is glimmer of hope. not in europe. not with natural gas that scares me the fed at jackson hole this

week they have gotten hawkish that came home to roost. i don't know what we're thinking >> i don't think they changed. they were always hawkish and the market, the professional optimists that is the market decided for two months i'm looking the other way. >> we saw inflation moderating we did see that. we saw commodities rolling over. okay maybe the fed eventually it is not transitory they won't use that word maybe it is not systemic the next three years maybe it is supply chain combination of things. putin price hike as the administration likes to call it. maybe some of the things and maybe we don't need -- hopefully we don't need fed funds terminal rate where the cpi is. we would never get there we could, but it would be ugly then you got guys like larry

summers who -- it's funny. republicans only talk about larry summers when he agrees with some criticism of the administration >> that's true. >> even he is saying the fed can't relax or take its eye off the ball for a while until we get this genie back in the bottle here is the agenda retailers in focus quarterly results from macy's and nordstrom and dick's we get july home sales and august pmi and august richmond fed survey i could have picked that up on saturday driving right by i could have stopped by. >> lots to do on 95. i-95 >> i could have picked that up people are mad i said that about teslas i'm not saying there's not charging stations. i'm saying i didn't see teslas.

>> this is referring to the comment yesterday. you were on a long drive on i-95 >> because in contrast to where i live in northern new jersey, it feels like 50% tesla. honestly i cannot look at the car coming toward me without noticing it's a tesla. there were a few i'm telling you, like less than -- not even close to 1% of cars on the road how many evs on the road the anomaly in the suburbs around there, there are not a lot of people on long haul >> by mentioning tesla, you actually are nicely opening for me to get to elon musk this morning. developments not in tesla, but elon musk-land and tesla is funding for better or worse, the

acquisition of tigerwitter for m in many ways musk is asking jack dorsey for documents to call off his bid. musk is looking for information related to number of spam accounts on the platform in april, jack dorsey tweeted, in principle, i don't believe anyone should own or run twitter. it wants to be a public good solving for the problem being a company, elon is the singular solution i trust i trust the mission to extend the light of consciousness and now lots of questions about exactly what documents at some point jack dorsey may or may not have shared with elon or others or maybe not shared with elon since he would have them, but whether they are in his possession and what conversations they may have had

about spam bots. clearly jack dorsey encouraged him to buy the company it is a my friend and my enemy and my frienmy people asking about what documents are coming from that >> i guess i remember that quote from april these ceos talking to one another. this is the new type of ceo that i have to get used to. what was that? elon is a singular >> the light of consciousness, joe. >> mission to extend the light of consciousness that's not in a lot of job descriptions when you go in for an interview for ceo is it? do you know how to do that we should do that. >> i have it on my resume. i don't know about you >> is that like dying in the darkness >> oh, it's too early.

it's 6:07. >> extend the light of consciousness, you are illuminating the surrounding area and the democracy might not die. >> you always have a way to bring it back. >> just commending "the washington post" for all they do. in other news, zoom shares under pressure video conferencing company missing revenues he estimates in the latest quarter also cutting the quarter and full year outlook. zoom cfo saying they are having difficulty attracting paying subs subscribers. enterprise save sales are stron. she will join us at 8:30 a.m. eastern. that's the good thing,andrew i talk about who is on "squawk box" last night. promotions i mentioned on that groundbreaking morning show that

runs between -- long running morning how. kelly will be on at 8:30 a.m. on "squawk box. we are watching the shares of palo alto. beating the top and bottom lines. also offered up the guidance and announced 3 for 1 stock split. we saw a 9% gain i know that he was on with cramer he is on the west coast, is that his excuse for never coming on our show he messaged me i don't only hit golf balls out of the park is what he said. i can also hit -- he did >> it's early in the morning for him on the west coast. i have some sympathy for him it is about 3:09 right about now a.m. >> money never sleeps. >> hope nfully he is watching. >> what time was gecco on the beach? he said money never sleeps he was up. you got to be up

up with the sun. money never sleeps coming up, what the brokerage and greed is good. brokerage stocks are telling us about the health of the retail investor right now as we head to break, check out the biggest pre-market winners and losers stay tuned you are watching "squawk box" on cnbc >> announcer: this cnbc program is sponsored by truist securities experience, expertise, execution. wi app cloud services orchestrated by cdw. with greater accessibility and control, you'll be able to accelerate innovation, bring the flexibility of the cloud to your environment, and reduce your infrastructure footprint to contain costs so you can be prepared for whatever is headed your way.

welcome back to "squawk box. we continue to track swings in meme stocks. amc closed down 40% yesterday. that is not the whole story. the value of the newly traded ape shares, the preferred shares offset some of the losses from any shareholders the ape units traded yesterday after distributed as a dividend. joe, you saw the number of halts along the way. adam aron said if you add the price of the ape share and add the price of the amc share together, you basically get where we were on friday.

actually lower than where we were on friday the benefit of the ape share is the potential to be able to issue more of them and raise more money for the company >> right you know, that gets you within a range of what the stock is worth. as we know, meme stocks -- >> whatever it is worth. >> meme stocks are worth between 10 and 700 it gives you a better idea, right? >> how do get there? >> apply fundamentals to where they trade futures are indicated up 57 points which is a rebound from an ugly session. i don't like black cords these are super charging excuse me. joining us now -- do they work have you ever had, andrew, the cord says it is wet and will not charge the phone because it is wet and the phone says i cannot charge >> no. >> i've never seen that before it tells you here.

i like the white super charger >> you want a white charger? >> i had these in the car. >> i'm handing it to you throug the screen >> extending my life. >> we he can get that charged up for you. >> i just think the super chargers -- oh, this doesn't work, mac. >> you have a big guest coming up it is not our kate rooney. >> i was telling somebody that catherine rooney we have rich ripetto rich, you will talk retail investors. you won't talk meme stocks if i talk about retailers today, can we do it we can't talk about apparel?

how come you won't talk about meme stocks if you are in retail investing? >> joe, we can talk whatever you want to talk about >> you sure? it doesn't say that. it says you are not here to talk about that i don't want to ruffle any feathers, rich >> i'm happy i'm not an expert on all these different -- i'm focused on watching retail activity, but not the specific stocks. joe, we'll talk whatever you want to talk about >> it's got to be something on your radar catherine, we were talking earlier about what i think you are saying the market for about a month and a half thought there's going to be a pivot or implied fed put. then orchestrate a soft landing. they are very aware of the first hippocratic oath will. that is do no harm that may have been misguided

logic as we saw yesterday. >> i think it is misguided logic. my suspicion, joe, we are in a bear market rally. it was wishful thinking and the market trying to bend the fed to its own will and expecting this trend put is still in existence. there probably is some support from the fed if the market were to collapse. the fed would probably scale back the velocity of the maturities which are going to double next month. the market doesn't seem to care about that, but i do i think that going to $60 billion in roll offs on the mortgage back front will make a difference and market doesn't seem to care i do believe the fed needs to paint a stark picture and i really like what the bank of england did. i'm not saying we are in five consecutive quarters of

contr contraction. it is refreshing to hear a central bank say this is the reality of the situation and get to 2% inflation, we are going to see the unemployment go higher and recessionary forces. >> we really screwed up. after '08, we never normalized. after the pandemic, we did the same we put the punch bowl out like drunken sailors. >> it is a possiblitive thing tt back to 2%, we need to get 4.9%. that's what has to happen. what i'm telling investors, joe, is position for a real recession. recession where you see unemployment go from record lows at 3.5% more to above 4% probably 4.5% by 2023. >> rich, when we were and i'm not talking about individual

meme stocks because i understand exactly what you are saying. when it was happening and all this interest and stimulus checks from the pandemic and everyone playing these things. everyone said okay it looks like it could be behavior that long-term is not great for the stock market a lot of other people saying we are bringing everybody in. it's great retail a lot of action. robinhood. look at the action that dried up, didn't it was it a good thing for the industry >> well, joe, i think what we're seeing this time is the meme stock activity and we won't talk about the individual stocks, but the overall activity now is much more concentrated in select number of stocks than the first quarter of 2021. then also the difference is a lot more trading of these index

options. s&p 500 index option to me, it is telling me we lost a lot of people over the last year and a half in the market vehi correction there are some that made it through and trading index options rather than the meme stocks themselves. >> if we were at an 8 or 9 for retail perspective, where are we now? a 4? i look at the ipo market and the piece in the journal today and it's dead. there's nothing. companies are sitting around there's no way they can come public they are biding their time >> a good analogy, joe if it was a 9 or 10 in last

quarter, my guess would be around a 6 that has been the uptick with the market rebounding it's fragile joe, i talked to a couple of brokers. they are telling me customers fomo fear of missing out. missing out on the rally that's what drove a lot of activity you know, there is the buy the dip mentality with the market rebound. we had a dip yesterday it's not like it was a year and a half ago it has been a rebound. >> you are seeing interest in the overall averages and betting on s&p or are people long or short? i guess obviously they are doing both where is the majority of the action at this point are we at a new low or going to a new low? >> the retail investors are focused on going long.

they put these s&p 500 index options and you can buy one for a day now. they have gone long. these are basically at record levels of volume with retail driving. the market, i think, we have troubled waters to get through retail is getting, you know, trying to get positioned to catch that rebound that's what the brokers have been telling me. >> kathryn, your gut tells you about the 3,600 level on the s&p? june 16th. is that -- do we approach that do we go through it? do we not approach it? i know strategists don't like to talk about numbers do you think we need to make a better low >> retail positioning will being

going to a new low and the fed pivot will be disappointed the fed is taking that 2% inflation target seriously so i think the retail investors will be disappointed he is also going to find headwinds with the collapse in the housing market and rise in unemployment if we get that, consumer sentiment on the real economy front also suffers we have to remember, for me, joe, it is about the label or market rising double digits that to me is the recipe for disaster we are going to see unemployment rise economic activity slow and the markets start to price in lower earnings growth going into the future >> kathryn, thanks i'm always very careful here

bulltick that's a minefield mess up two letters and all over the general news >> don't do it >> also, rich, thanks. rich repetto of piper sandler. i know it's early. a lot more coming up this morning. thank you, joe we'll talk about filling up your gas tank and heating your home why consumers could be in for trouble come fall. we'll talk energy prices when "squawk box" comes right back. a points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done.

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welcome back to "squawk box. higher energy prices in focus in europe and here at home. oil prices are rising and some comments from the saudi energy minister made to our brian sullivan in a phone conversation yesterday. we'll talk about it. the saudi minister raising eyebrows talking about possible market manipulation brian on the other end of the call is here with more brian. >> yeah, andrew. thank you very much. a wide ranging conversation with bin salman talking about the oil markets. he made a number of points i'll start with this because i think this is the main take away this is my read, guys, more than a direct comment from bin salman which is it is very likely that opec and opec plus could possibly tighten the oil market, maybe

reduction in the output increase at september 5th meeting or possibly before that i say that because prince osama bin laden salman was adamant on the phone that he sees market manipulation going with the paper market, the contract we show viewers on tv and the actual price of physically delivered oil. remember, the saudis have been raising their selling price to asia almost every month, but the price of the crude oil contract has been coming down now $91 and change a wide ranging contract. oil is up now about 2% to $92. there was an implication that there is the possibility and i'm trying to control my words properly because i don't want to put words in his mouth the possibility of market

manipulation given what he called the thinness of the market the lack of liquidity and lack of participants in the paper market created the big spreads premium costs have gone up if you are an airline or a company that wants to hedge, hedging costs have gotten expensive. i found out more about the manipulation comments. if you are manipulating the oil market, it takes a massive trading house, some of the biggest in the world, and/or government, in a get an opec pr cut on september 5th maybe. it was clear from bin salman that they were frustrated by the thinness and ill liquidity in the oil market >> brian, that's what i was going to ask you the extent of implication of form of manipulation honestly, who could do it?

you honestly have to have a country do it, maybe, or multiple banks to decide they were all going in together to do it by the way, we have seen this movie before somebody said to me, libor was manipulated years ago. i don't know if i would have believed them. >> we found out it was. >> and it is open for this stuff. yeah >> i want to be clear. prince abdulaziz did not say the market was being manipulated i asked him directly, do you believe the market is being manipulated. he said quote i don't know, but it's possible. >> we really don't like it when somebody besides us manipulates it isn't opec a cartel? i'm shocked market manipulation going on here.

please please >> opec and opec plus are 40% of global production. yes, i understand certainly, joe, your comment about it and you are talking about manipulation we're 40% of the market and we're deciding on output levels. >> they can do more. brian, the president went and asked nicely what did they do 100,000 barrels a day? you don't think it benefits them it is $90? weren't they getting $40 a couple years ago they love this i don't know i'm not going to bash the saudis they get enough. i don't know it seems rich, doesn't it? >> yeah. they are getting rich. the whole gulf is. the article this morning about qatar, the country, kbuying so much gold because they are deciding what to do with the excess capital they are making near record profits. we were also negative briefly.

i'm not defending any position there is a lot of making up going on joe, when you bet on your bengals and for years, they lost money and now they're good and you are on a roll. you will keep pressing that bet because you want to make up from previous losses. >> right i did pick them the other day. i didn't take the points they lost by 4 >> don't bet pre-market, joe preseason. oh, my god i said pre-market instead of preseason. i've been doing this too long. >> anybody who bets on pre-he s preseason. it's there $5 thanks, brian. china heading for a political reshuffle this fall and global investors are watching live report from beijing that is next as we head to break, here is a look at s&p 500 winners and losers

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china is heading for a political reshuffle for this fall joining us is eunice yoon with what investors need to know. tell us, eunice. intrigui intriguing >> reporter: joe, describing taiwan as a country routinely gets businesses into trouble here it seems the scope of sensitivity is expanding and now affecting more businesses. for example, the u.s. listed chinese discount retailer which promotes itself as a japanese style retailer like a muji or uniqlo an polpologized by takin wrong path by hiring the

japanese designer. it is redesigning the stores korean businesses are changing signs. they have been mandated by the authorities there to now minimize the korean alphabet on the signs and prominently place chinese characters american movies, which have been a long time favorite of chinese censors, are also getting a warning from top level chinese communist party official who said that hollywood now needs to show more respect for chinese culture, customs and sensib sensibility. univers universal's "minions" got here with another ending. the thieves ride off together.

in the chinese version, one is in prison for 20 years and the other goes back to his family and realizes the best accomplishment is he raised three kids the moral of the story is the police always win or in the chinese context, the police state always wins. joe. >> wow not surprising, but still when you hear it, it is like wow. that's a different mindset >> reporter: a lot of changes. >> for a lot of things, eunice, it seemed like business and trade relations were a little bit immune frommaybe all of th cultural pressure you see. one thing that we should distinguish is i don't think anyone really wants to being negative or prejorative of the chinese people

for the ccc not criticized for things that are blatantly off the pale i guess we went off the air there. the difference with the ccp and china and what we think of as china. >> reporter: yeah. what i think we are seeing is that the definition of what is acceptable is the communist party's definition of what is chinese. that is not only culturculturalu also in business one thing you see clamped on with taiwan. it sis a different definition that is not deemed acceptable by beijing. >> a corollary here and i can't really -- i hope we never have one here, i guess, is another corollary of what that would be

like i'm sure haters will come up with something we do over here normally i like to think it is not that way thanks, eunice great story. see you. okay for more on the china economy and impact on the global markets, the former obama defense department appointee and now long managing director and cnbc director. good morning to you. you just heard that report and others we're all trying to figure out the state of the chinese economy and i think more importantly, trying to figure out whatever problems they may be having may come our way >> andrew, good morning. this is a heck of a summer for xi jinping'seconomic problems which continue to mount. we have seen all sorts of things they continued to try.

two rate cuts and purpose bonds sent to get infrastructure going. that hasn't worked i think, largely, andrew, this is a story about most people in china believing that pandemic control still supersedes economic growth and development. until the government sends a clear sign about what they're prepared to do to ease some of the pandemic pressure, i think we will continue to see a sluggish economy i'm not optimistic that what we've seen in terms of monetary policy will do the trick i think credit is plenty cheap sentiment and demand is sluggish i'm not optimistic that we're going to see anything change politically or economically before we get to the 20th party congress i think a lot of people are wai waiting. >> is this an issue of timing? are you of the view after the

party congress that all of a sudden, you know, president xi says okay, i'm changing tact is that the conventional wisdom? >> i would not say that is the conventional wisdom. there are structure problems that xi created with the policy proposals he pushed. i think things will become clearer. let me be clear. i think things will become clearer after the party congress i'm not sure they will get better after the parties congress >> do you think the policy makes him more popular or less popular? if he were to lift the covid restrictions now, would that increase popularity or diminish popularity >> i think it will help a lot of businesses and a lot of chinese people who suffered under zero covid. i think popularity is one of those things that we have to be concerned about that xi does

not. yes, i assume it increases his popularity popularity does not equal popular for xi regardless of how popular he is in china >> before we go. speculation. post party congress. call it christmas at this point. what are the other things he may or may not do when it comes to businesses both chinese and otherwise? are there things in the offing >> i think what we're likely to see, andrew, is more of xi trying to regain control of chinese markets and push china as a place to attract. that's been lagging in a way that has hurt china and i think xi wants to signal they're open for business i'm not sure given the report from eunice yoon that people will accept that or buy that

you will see more of an effort to say we're open for business >> thank you so very much. i look forward to talking to you soon >> thank you, andrew. when we come back on the other side of the break. media stocks are in focus. and zoom reporting slower t steckelberg. she will zoom in to us in the 8:00 hour. stay tuned

coming up, warner bros. discovery posting big nushmbers for the hbo bet. this is the latest battle in the streaming wars. get the latest on "squawk box" in the podcast. squawk pod on your favorite podcast app. ust be three hours long. we'll be right back.

welcome back to "squawk box" this morning warner bros. discovery reporting nearly 10 unmillion viewers watched the premiere of "house of the dragon. a sunday night launch, repre represents 30% to 40% of the viewers. you can extrapolate how many will be watching the series. everybody watches on a sunday night. i'm dating myself with the water

cooler thing, people probably do it over slack or something but that's what you can get if can you get it >> we can't retire that term yet, andrew, water cooler. >> does anybody have a water cooler anymore, though in. >> they're around at gyms and stuff. the delivery guys come a lot of them are, i think they're actually hooked toup to the water line now, it's a little different not too many of the big bubblers anymore. it costs money how much money for this "game of thrones" thing, and then in a slowdown, how many streaming services so that shiny little object that seems so easy to work. >> let's say you're spending $15 million to $20 million an

episode. if can you collect 10 million eyeballs live, and that's only 10% of the audience, you can make money doing into. >> is that 5 million people you're talking about or 10 million people >> what are you talking about? >> you said 10 million eyeballs. are you saying eyeballs are one person >> oh. >> when you say 10 million >> it's early in the morning, joe. i'm on the first cup of coffee here >> so you meant 10 million viewers, just to be clear. >> 10 million viewers, 20 million eyeballs >> you cover all kinds of tech can we talk about media and streaming and just overall, i guess the point i was making, if you weren't going to get into streaming, you weren't going to be a new media company and then everybody got into it, and then you realized, wow, it's

really expensive to develop great things, and people want it to be really good for them to pay every month. what's the state of the industry right now? who are the winners that you see? >> good morning, joe, andrew thank you guys for having me again. let me recalibrate the conversation i cover everything internet, general media, which doesn't really include the streaming guys, but tangentially covering alphabet and youtube, et cetera. we have an opinion there our view at a high level is, you know, 10, 15 years ago, netflix was the only game in town. now there's an abundance of streaming and inventory. the part i care mostly about is the advertising side of things where now you have, two to three years ago, even honestly, as early as last year you had a shortage of connected tv or

programmatic inventory from these streaming service, and advertisers loved that kind of inventory. and the good news is, now we're going to get a ton of it so siadvertising platforms, lik youtube to a certain degree. the trade desk will truly benefit from the inventory it performs well for advertiser and is good for users because it's relevant. i'll try to stop there, because i don't have a real opinion on netflix and hbo and the others >> right disney, which seems to still be pretty good at keeping, and getting, new eyeballs. so since you have to make decisions on a daily basis about tech in general, we had a nice rebound of tech. i don't know, the nasdaq way off its lows and we know why it went down, because interest rates are going

up, and there's inflation. and now we know why it might be going down again last week and yesterday because interest rates are going up again how do you see the prospects for stock prices? not just the, how the industry fares, but where these things are valued right now give and rising interest rate environment it seems like it's a little bit treacherous. >> it is treacherous and listen we're down about 32%, 33% year-to-date on our internet index. we were down as much 41%, 42% ju july 15th. i'm not here to call trough, but it seems like we dropped a little around the middle of last month and rallied, to your point. seems like it's risk-off right now. my group tends to be high data, tends to be highly volatile. so yesterday was one of the

worst days we've seen in months. so the way we're positioning ourselves is that in this treacherous environment we really need to focus on companies which even last quarter, which was the worst earnings quarter in five years, we had half a dozen companies that had dramatically outperformed it's alphabet, trade desk, doordash and uber. those are five relatively -- >> got those in. the music's playing. we'll have you back. coming up, quarterly results from macy's. other stocks on the move throughout history i've observed markets shaped by the intentional and unforeseeable. for investors who can navigate this landscape, leveraging gold, a strategic and sustainable asset... the path is gilded with the potential for rich returns.

good morning the market showing some green as the bulls try to pick up the pieces following the worst day since june zoom getting crushed, palo alto surging. we'll run down the stocks to watch and a big win for warner bros. discovery. "house of the dragon" pulling in 10 million viewers the second hour of "squawk box" begins right now

good morning, and welcome back to "squawk box" here on cnbc, live from the nasdaq market site in times square. becky's off today. u.s. equity futures trying to make a stand, rebound a little bit. 4 42 points. the nasdaq over 2.5% it's up marginally this morning. the ten-year is up 3%. it's either going above or below that level, i'll make that prediction and check out crude and natural gas. crude on the possibility of an opec cut just some murmurings in the market and natural gas given

what's happening in europe, that's a big, big number that we're seeing almost $10 now. and winter's coming. andrew, with the "game of thrones" reference, and keel' swe'll see how europe handles that. >> winter's coming to the market, too? winter came to the crypto. >> morgan stanley's mike wilson will join us at 8:00 a.m. eastern time, and his notion back then, and we'll get to talk about it, his notion was that depending on whether the economy does enter a recession totally dictates where the s&p should be and he wasn't making a call on whether we would or wouldn't, and now we've got the whole back-to-back quarter discussion and all the discussion, are we in one are we not yesterday the polls, did you see the polls yesterday?

a lot of americans think we are in a recession, which is weird that can be self-fulfilling. given the jobs numbers, you seem like you might hold off on making that declaration that we're in a recession >> well, you remember there were a lot of people making that declaration just a month, month and a half ago virtually every day they were making at that declaration >> because of the back to back quarters, but then you got the jobs number. jobs numbers are backwards looking. you never know >> and that was what the white house was saying against the backdrop of those numbers, it became theis interesting, almost a political debate let's get a look at the morning's premarket movers, frank? >> i'm loving the "game of thrones" references. we're going to start off with amc entertainment. up 10% in the early trade.

amc itself up more than 2% both of these stocks up in the premarket. yesterday they both shed double the volume of apple. we also want to look at bed bath and beyond short interest currently at 38%. that continues to be a catalyst for the so-called reddit stocks. other names like gamestop not seeing a move. pl pl ploelt networks surging, bti has raised its price target to 720 this morning morgan stanley actually forecasting this cyber security company will see its market cap double or just about double to 100 million in the next two year the ceo said the supply chain issues are the head winds.

shares of palo alto up more than 8.5% now we've got to move on to zoom very different story, double digits down. the company citing the strengthening of the dollar as a major head wind. the dollar did rise almost 3% one bright spot in the report, zoom phone offering. share down also 50%. more than 50% year-to-date andrew and joe back over to you >> hey, thank you for that meantime we should give ah quick programming note we've got zoom cfo, kelly secondleberg who will join us at 8:30 >> thank, andrew, and these are, courtney waits for these months, the staggered months you know it's coming everybody else is finished, courtney, but now it's the beginning of all the retailers,

so you get all excited, right? >> you're right. very exciting. we get to be in a lane all our own. now let's focus on retail. macy's is reporting here, earnings of $1 per share, better than the 85 cents analysts had expected $5.6 billion consensus was for a little under $5.5 billion. guidance for the full year, more or less taken sharply to account for consumer uncertainty macy's is now looking for their adjusted earnings to be in a range of 4 to 420. estimates are at 451 now with second quarter comparable sales, those fell 1.6% but that's actually better than estimates had predicted the numbers to come in digital sales decreasing 5% year over year. up 37% if you compare it to the

second quarter of 2019 online sales making up about 30% of net sales for macy's. gross margins for the quarter down a little. 38.9% from 40.6 last year. largely macy's driven by the pandemic-related categories, seasonal goods and private brands some hit from higher fuel costs associated with delivery as well we spoke with jeff ganet briefly. inventory levels in the industry are as high as they are in our discretionary categories we just expect promotions to be with us through the fall season as the overall retail environment works through all of that he says that's in line withhis retailer's expectation, and we're chasing demand in other categories the holiday inventory will be 55% new. that's the highest level in many

years. he also said there's new evidence of trade down yet in his business, though transactions generally, they're down, and pandemic-fueled categories like sleepwear are down, but luggage and bueauty ar up >> i want to go to omarosa good ann anastasia what are you expecting >> one thing i'm expecting them not to do, threality is that thr is data that the committee needs to see one thing i think he may try to

do is reset the expectation and tone in the markets about the fact that we're going to have rate cuts in 2023. that's what the markets are pricing in and he might pull back against that i think it is way too premature to talk about rate cuts, and the goal is to get us into restrictive territory and really to stay there for a period of time if there is one thing that i think he may push back on in terms of market pricing, i suspect it's the rate hikes priced in. >> are you buying into the market meaning equities ahead of whatever this announcement is, or whatever he's going to say? or do you want to be on the sidelines to wait to hear what he has to say first? what do you think the outcome is going to be in regards to the way the market reacts. >> there are of momoves that wi happen preemptively before that. if we do see a pull back before

the weekend i think there will be an advantage to the investors. it's interesting that we got just shy of the level, and that was rejected and we now have the pull back. the closer we get to 3800, i'm not saying we're going to get there this week, but the closer we get to that level the more attractive stocks become, and i want to be a buyer in that space. i think the markets are jittery after the 17% rally that we had. i think we're in a profit-taking mode so that does unravel a little bit before the feds, and i would be stepping in to buy some things the stocks that you want to buy are in the technology space, the software space and some of the higher growth stocks the economy's slowing, and we'll problem probably be muddling through

>> in terms of stuff you would be buying, what would that be? >>, so >> so, again, i think the thematic trade might be back i would point to clean energy. the reason widely why the high-growth trade is back is because we've seen a huge reset in multiples again, i would point to software the software multiples are back to pre-pandemic levels, and you just saw some of the software companies report, the tech digital trend is still very much there. global i.t. spending is likely to trough at 3%, but it's forecast to accelerate to 6% next year. anything in tech in terms of software is an interesting buying opportunity, but the other thing i would point to is clean energy clean energy rallies massively, as we, as investors were kind of shocked and jolted by theis

inflation reduction act being passed even though it has rallied a lot, i would say it's not extensive when you adjust it for the growth expectation if the s&p is going to grow 11% in the next couple year, clean energy is going to double that from a pe to growth ratio it's cheaper than the s&p that would be one space in addition to tech i would be looks as well. >> anastasia, always good to see you. looking forward to he saseeing u again very, very soon. >> coming up in the next hour we will talk to mike wilson and check out the shares of smucker, the company just outreporting results moments ago. we'll talk to the ceo about food prices the supply chain, impact on

consumers. they've got pretty interesting with input costs, margins, they did raise guidance before we head to break we get a check on the markets the gains are kind of dissipating. only ten points now on the dow rebound. "squawk box" will be right back. - common percy! - yeah let's go! on a trip. book with priceline. you save more, so you can “woooo” more. - wooo. - wooo. wooooo!!!!! woohooooo!!!! w-o-o-o-o-o... yeah, feel the savings. priceline. every trip is a big deal. real-time ticket upgrade!

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earnings this morning, better than expected. joining us, mark smucker, thanks for joining us good to see you again. you do point out, and i want you to sort of expound on this you are seeing consume are behavior shift due to inflation with some cutting back on discretionary purchases, but at-home food purchases, which is what you're involved in is still strong >> first, thank you for having me, it's great to be here. and, you know, our goal is always to grow our entire business, which we had a brate quagreat quarter. we are in very resilient categories we tend to offer across the spectrum products for all consumers. although we have seen some

elasticities we are seeing our brands perform well, we're investing in our brands, and we continue to focus there. >> i was sort of amused that one of your biggest growth categories, 17% comp sales, pet foods. so people, you know, cut back on the family, but not, not on their beloved pets milk bone sales up 27% are these price increases, mark, that are giving you those numbers? or how much of it is unit sales and how much of it is you're able to raise prices on this meow mix up 25%. >> right joe, we've been able to pass along somepricing across all o our categories, but it is both we're seeing growth. in fact, milk bone is the number one brand in snacks. meow mix is a number one brand in cat food. and both of those brands provide value to the consumer,

performing very well, and they're both outpacing the growth of their respect teive segments >> are people consuming coffee differently now? is some of the bloom coming off the rose for going out for a starbucks brew instead of staying home $4, $5 for a latte ises expensie >> that happened during the pandemic over 70% of cups consumed these days are actually consumed at home we've seen great performance across the entire value spectrum from folger's, duncan and cafe b bustello and our brands continue to

outpace the segment there. great performance there. >> overall, what were you able, can you give me a number on your average price increase for the quarter across all your brands >> you know, it varies across categories there have been some that have been double digit for sure coffee has seen more pricing than other categories. yet, when we do that, we're very prudent. we want to make sure that we're passing along what is only justified as well astin t contio take costs out of our own supply chain so we're not overly impacting the consumer >> when you give guidance, what is your guidance for food inflation? labor, too, everything else. the whole picture. what do you think? >> joe, we've experienced a lot of inflation thus far. and so we have reflected that

through our pricing actions. we're still in an inflationary environment. it's hard to say whether or not we've plateaued. for the foreseeable future we see prices being relatively stable, but, again, there are just so many unknowns out there with all of the geopolitical environment, and we're just taking a cautious approach and if we need to move again, either up or down, we will do that >> you got anything exciting for me just innovation wise i mean, you know, not, it could be pet foods, too. i got three dogs so, or for me, peanut butter love peanut butter like some kind of, i don't know, any kind of innovation? what are you working on? >> well, we've had a ton of innovation on milk bone, a ton of peoremium biscuits. but we always like to talk about uncrustables this quarter was 32% growth.

we're building a new plant in alabama, adding to a plant outside of denver, so keeping up with demand oni uncrustables? >> what are those? >> the frozen peanut butter sandwiches >> it's hard to mess up peanut butter and jelly >> it's an american staple >> it is mark, thanks any relation, mark just kidding good to have you on this morning, and we like having you every quarter if possible. it's relevant to everything we talk about on "squawk box. we can find something in smucker. >> thanks. really appreciate you having me. >> i need some pbj right now but first, legal battle with twitter is heating up.

the subpoena for the co-founder of the social media k company. and an explosive report. check out shares of tesla, rebounding a little bit. squawk coming right back after this

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welcome back to "squawk box. we have some new developments coming up right here on the twitter versus elon musk saga. musk is asking jack dorsey, the former ceo for documents related to the number of spam accounts on the platform. twitter, we should also mention the other story that's just arrived, joe i don't know if you saw it in the "washington post." >> yeah, twitter's being accused. >> that, to me -- >> twitter's being accused of deceiving the board of regulators this is a whistle-blower talking. a complaint from the former security chief, obtained bit

"washby the "washington post," and they violated a settlement. they say they prioritized user growth over fighting spam, and for its part, twitter says it was riddled with inaccuracy and that he was fired for poor performance and leadership when a worm turns, is that 180 degrees we look for? to you see anything turning here, andrew, in what his view has been that he doesn't have a land to stand on >> it's still a very, very difficult road it could be the jolt that changes the dynamic, only because you filing with the sec

and do you use that to persuade a judge that they have to look at this stuff. up until now i thought the judge wouldn't even entertain the concept of looking granularly at the data >> he accepted as-is, that's what you said again and again and again. he knew there may have been some issues and he said okay, whatever they are, i'm going to do it anyway does it rise to the level of where there was material, you know, disinformation could there be enough for him to say, look, that was just beyond the pale from what i sknew >> i don't know. i'm sure someone will say okay, here's some more evidence. obviously twitter saying this is a rogue ex-employee who's upset, they're dismissing it, but does a judge dismiss it

not sure we'll talk about it in just a little bit we'll talk about hbo's "house of the dragon." where do the streaming wars go next stay tuned, u'yore watching "squawk box," and this is cnbc (vo) the fully electric audi e-tron family is here. 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. how will your business adapt to change? you could hire an office full of peyton mannings. what's up, peyton? good morning, peyton. hold for peyton. they'd huddle.... welcome to the peytonverse. such a visionary.

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welcome back to "squawk box," dick's sporting goods' results out just moments ago, courtney reagan has the number >> for the second quarter, dick's sporting goods coming in at $3.68, that's better than the street's estimates by about ten cents. comparable sales are down by a little more than 5% but also better than expected which was down 7% and on top of 52% growth the year prior the retailer is raising its full-year earnings forecast of $10 to $12 to 11.70. i spoke with dick's sporting

good's executive chairman, ed stack, and he says the business has seen substantial improvement throughout the quarter and the company is pretty enthusiastic, adding we're pretty conservative we have to be pretty confident in our business going forward. he says the retailer doesn't see the consumer trading down either and opening price point, it's still doing very well. that oftenes explains that dick doesn't travel with the highs and lows of the economy. if your child needs new cleats because they're a bigger size this year, they're going to buy them there's virtually nothing we do the same now that we did five years ago. we think that is further evident that by the second quarter we made as much, our earnings are roughly the same as they were in all of 2019. andrew back over to you >> okay. courtney reagan, thank you for bringing us that news.

meantime, sunday night's premiere of the "game of thrones" franchise "house of the dragon", hbo's parent up a little over 1% always great to see you, rich, want to start with this news to try to understand how important it is you think it is for hbo max long term and is this the creation of the next version of the "game of thrones"? a lot of people thought this this new streaming media universe it would be very hard to recreate that kind of water cooler sunday night moment where so much of the country gets together to watch the same thing. >> the focus as hbo now is really changing strategy before, they were chasing netflix. they were chasing disney, chasing netflix. the profitability of h

abhbo went from 2.9 to 5 million. that is not the strategy anymore. under david zaslav and the new team that's come in from discovery that runs warner bros. discovery, this is a focus on a profitable streaming service that is just one part of the company. i think "game of thrones" are the prequel, house of the dragon, this is very much sort of what their bread and butter is this is what they love creating, really quality programming and i think you're going to see them focus on fewer numbers. they're not going to be as broad as they were of about. they're killing some of the reality programming. they're really starting to focus hbo on what you and i, andrew, think of as hbo. >> let me ask you about that

part of the strategy is also effectively merging the hbo max experience in that subscription with the discovery plus experience, which has a lot of that reality, and so many of those other programs so in some ways it also feels that they are targeting the netflixs of the world. >> it's just a level of aggression when you think about what they were doing before, the only place you would see content, if you would go on right now, if anyone watching this turns on amazon prime right now, they're going to see the lord of the rings trilogy, actually, which is a warner bros. piece of content available on prime video. that would not have happened underthe prior management team they were very focused on keeping content exclusive. this was the only place, much like you would see at netflix or disney, focussing on keeping all of their content in house. now you're seeing a hybrid strategy of we'll license. we'll a make money any way we

can as well as trying to build a streaming service, but it's not our sole focus, and i think the sole focus is a really important distinction. the entire company is no longer focussed around hbo max. they're really focussed on driving profitability. >> i want to pivot the conversation to a completely different topic, which is twitter this morning if you would indulge me we were just talking about it in the last segment, because there's this explosive new story, this is both out of the "washington post" and cnn as well, that there is a whistle-blower that's now emerged. the whistle-blower has gone to the fcc and argued that twitter has been reckless, i think that was the word used in one of the headlines, with how they've treated hacking and pam. dspam does this change the dynamic at all?

allowing musk to walk based on the concept that the bots on the platform are more than previously disclosed in >> first off, i haven't read the whistle-blower's entire complaint to know what is in there. but i will say two things that i think are important tfor the viewers. the acquisition agreement of twitter never talks about bots itself or the percentage of bots itself it basically says it is relying often twitter's publicly-filed fcc filings for its view of bots or view of users so if you raidead the paragraphn all of twitter's filings, it's important to read exactly what it says. our estimation of false or spam accounts may not accurately result the actual number of accounts and the actual number of false or spam accounts could be higher than we estimate

so twitter's saying this is the number we estimate, meaning less than 5%. but it may be higher, because our math may be wrong. that appears to cover, you know, unless there is an intentional coverup by twitter >> you and i are in full agreement. number this very moment i would say it would cover it across the board. what it would not cover is if in fact some numbers were being hidden or something else was happening in a nefarious and not just negligent way we haven't seen the actual whistle-blower complaint, but to the extent that there is one out thayer there, do you think it changes the dynamic of the case? i thought a judge would look at it and say i'm not going down the rabbit hole to do the math

because you, mr. musk, signed up to buy it. does it present the possibility for more discovery and change the dynamic of the case? the stock of twitter down today about 3.5%, just on this news. so i may not be the only person at least raising these questions. i imagine others are, too. >> andrew, first of all, it's certainly reasonable to be more concerned today than you were yesterday. i think anyone would look at this and be concerned. i think you would, though, have to believe that twitter's senior executives, from jack dorsey, they've all been knowingly filing false sec documents for years. that's essentially what you'd have to believe, that all of these sec documents, that they're knowingly reporting the wrong numbers in order to get advertisers, you know, essentially to spend against numbers that are knowingly

false. it seems a little hard to fathom obviously, nothing is impossible, but it does seem hard to fathom it seems that the way that you treat bots or count bots is a pretty vague and open to interpretation so even that may be covered by what we see here even what i'm reading about the whistle-blower, that there were multiple ways that twitter was looking at the bot count or user account, which is sort of when you look at this, it talks about the difficulties in figuring this out, and that's why they gave themselves this sort of, well, we could be wrong clause, which, again, no one's ever really focussed on this clause to invest in twitter before, but that is probably the most important sentence of the entire case >> what do you make of the subpoena of jack dorsey? i mean that was the other piece of news that came out yesterday. and i think a lot of people were

trying to figure out what exactly, what kind of information he would have that mr. musk believes he has that would be beneficial to their case >> unknown whether it relates to this whistle-blower or not, you know, i can't, i don't know. you know the reality is, musk agreed to pay 54.to,20, and it seems like shortly there after, it seems that he's had buyer remorse from shortly after he signed his signature to this agreement. >> what do you think the unaffected price of twitter would be today if there was no bid on the table >> i mean, it's hard to know, because so much of the, so much of this whole story line has, you know, raised questions with brands and advertisers, you know, it has created so much internal volatility employee

wise so it's hard to know exactly if this had never happened what would have happened to twitter, but i have to say, if elon could freely walk tomorrow, with no penalty, you have to believe given where names like meta and snapchat are trading, you'd be hard pressed to believe that the stock would be north of $20 a share. >> wow and then final question for you. and this goes to the case itself, and i know you've been studying and talking to folks about what may or may not happen, given all the issues to the underlying business of twitter, employees leaving, instability, brapsd and advertisers, i think there's consternation about what the future is and how much they should be buying from twitter right now, we're going to see a trial that's going to happen quickly, but how quickly do you think a judge will make a decision and rule in this case historically, judges in delaware

have moved fast, but by some standards, moving fast can be one month, two months, three months are we talking about days? weeks? could she indicate what her ruling is and then effectively file it months later how do you think this could play out time wise? >> you know, we listen to the, when they went to delaware a few weeks ago, we listened to the hearing. and she was pretty clear, you know, the twitter team was asking for a very quick trial. musk was obviously asking for how much complicated this was and how long it was and the judge smafcked the musk team and said i understand this stuff i can catch on really quick. she understood the importance of time is of the essence this is not about counting bots. this was about figuring out the actual number of bots, this could take months or years

i think this is much more simplistic this is about contract language and what is the contract that musk signed say. and i that i makes it a much faster determination for the judge. she doesn't have to go into, well, the bots were 7% or 8% or 10% or only 4% that's not what she has to do. she has to determine whether the contract allows for that question to even matter. >> rich greenfield, always helpful. very good to talk to you about all of these issue, especially breaking news like this this morning. thanks >> thank you coming up, morgan stanley's mike wilson going to join us at the top of the hour. great timing after yesterday's tumble and just before the fed's jackson hole economic symposium. that's his senior high school picture we're still running there. really popular guy back in the day. still so much to cover with him.

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welcome back to "squawk box. futures up right now, up 31

points on rebound from the dow from yesterday's big decline the nasdaq indicated up about 25025 and the s&p up retail season isn't over yet dick's and macy's reported and then zoom sheares getting hit, kelly steckelberg will join us, probably on a zoom interview. "squawk box" coming right back no wayyyy. no waaayyy! no way! [phone ringing] hm. no way! no way! priceline. every trip is a big deal.

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it was a big week for retailers. m macy's and dick sporting goods both beating forecasts joining us, like so many things, it's kind of a conundrum, an enigma, trying to figure out what the state of the consumer i hear they're trading down. we might be in a recession, and yet you point out how resilient the consumer is. >> right, when we look at the numbers, the numbers are at record highs and not only are they high compared to last year, accounting, even if you account for inflation, they're much, much higher than pre-pandemic

levels which actually makes overall retail at its highest level ever in our recorded history. now at the same time, we're seeing some of these retailers like macy's, like dick's, experiencing flatness or in some cases down trends in overall numbers. and i think that that's just hone honestly a reflection of the competitiveness of retail, a lot of these companies had issues going into the pandemic. so i think what you're seeing is a little bit of shaking out of those trends you had a lot of new competitors coming in that people hadn't even seen of about, and when you look at the micro stories that is correct is wh, that is what observing. >> i think i could do okay at certain companies. there's no way i could -- you need to be a great ceo to run a retail operation, don't you?

so they're above 2019, that's saying something but half these guys and gals were in the wrong stuff, they stayed in the party too long with the pandemic, we've heard about mark downs continuing, that they've got to get rid of stuff. if you were really good at what you do are there people can you point to that were much better than their peers >> well, there were companies that were able to lean into extended assortments, they were able to put a lot more of the inventory on suppliers companies like amazon, where a significant portion of their sales, for instance, are happening in market places a lot of these traditional retailers that have physical stores, they are, they were much more vulnerable to the supply chain issues so in the beginning of the pandemic, even through last year, there were issues with getting merchandise. then they got the merchandise, and then there was too much merchandise. because it didn't come in at the

right time and they didn't account for the fact that spending habits were changing and consumer preferences were changing so you're absolutely right they got stuck with this graduate of inv glut of inventory that they have to cycle through. hopefully they will have sierkled through it, it's not inventory that's sitting on their books for years. i've seen retailers do that as well but yes, these absolutely big issues, and there is no question that i agree, i wouldn't want to be a retail ceo either it's a tough job >> if you're good, and there have been some good ones, and you see how much in demand they are. and how about back to school has a new meaning. it might actually mean back to school have we had a back to school recently, and you expect as a result that should be good, shouldn't it >> yeah, there are a couple things to remember about back to

school a huge portion of back to school is actually back to college. most students are finally back to college so that absolutely will be driving some resilience and some good numbers, hopefully for the back to school retailers there's another element that is interesting, and a little bit counter to all of this inflation and recessionary, you know, kind of mind-set, and that is related to electronics so a huge part of back to school is people buying computers or printers or, you know, laptops, month phones, whatever electronics they need, and all of those categories have actually experienced deflation in the last year so you're probably seeing the same number of units or more being purchased. probably actually at some of the highest numbers that we've seen in a while but the revenues may be softer, because the price points are lower than they were last year >> okay. all right, i'm going to end it

there. it rhymes, but it's never the same so we have some things that are similar but new factors to consider you have to be good, too, just like the ceo to even cover this industry >> it's a crazy world, but i love it. so can't complain. >> we want to live in interesting times. we've got that going for us. all right, thank you >> thank you okay coming up on the other side of the break. we've got a pick hour ahead. the bears are not quite done with the market yet, and morgan stanley's chief u.s. equity strategist, mike wilson is going to join us in the next hour. don't go anywhere, we're coming right back with our flea and tick meds. it's not peanut butter. i know, i know. but every time the box comes, we get the peanut butter. yes, because mom takes the meds out of the box and puts them in the peanut butter. sounds like we're getting peanut butter. yes, but that is the chewy pharmacy box. ♪ the peanut butter box is here. ♪ ♪ the peanut butter box is here ♪ alright, i'm out.

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morning, the bulls fighting to regain momentum, but it is a tough run. futures well off their highs of the session. and zoom shares getting hit hard the video conferencing company offering weak guidance we'll talk to the zoom cfo first. and a former twitter executive is blowing the whistle on the company, could end up the case with musk, or not. we'll discuss as the final hour of "squawk box" begins right now.

good morning, and welcome back to "squawk box" here on cnbc we're a live from the nasdaq market site in times square. i'm joe kernen with andrew ross sorkin becky off today, back tomorrow, i think in >> i think so. >> u.s. equity futures at this hour up 40 points now, 39 and change, 44 it's going to change, i might as well move on on the dow, up and nasdaq up the futures, 3.015% as you can see. let's talk about some of the big headlines.

jd.com saw a 9 t.2 increase. and p pinduodupinduoduo higher >> as we just saw, the futures are just trying to find a little bit of, i don't know, buying interest today after yesterday's big move down. 2.5% in the nasdaq stocks had been enjoying a nice run up since the june lows on june 16th, when we were about p 3600 joining us now, mike wilson from

morgan stanley when were you on a couple, maybe last appearance or before then, one of your main concerns was recession risk and we've had some data points since then, and i don't, we don't need to engage in a semantic argument about what constitutes a recession, back-to-back quarters, but you say if there were, could be a full-blown recession, that 3,000 was even possible as the worst case scenario on the s&p are we likely headed to a recession? and, as a result, is 3,000 still a possibility on the s&p >> yeah, good morning, joe i do think that a recession is still, you know, a 50/50 shot. we're not in the 80% camp like some others, but definitely the risk is elevated i think the main point over the last couple months has been that earnings are going to be at risk either way it's just magnitude of that

risk and as we noted 35, 3600, sort of priced in that risk of an earnings recession without an economic one so it's a, you know, it's a 5% to 7% decline in forward earnings estimates as opposed to something more severe like is 15%, 20% if there's recession with layoffs and a fervent affair the risk-reward in either outcome is poor. the last time i was on this particular program, we suggested, you know, there could be a rally we never thought we'd bet to 4300 to be honest, 4,000 was in the cards. that would be a typical range. the markets are doing a really good job of testing everyone, but i still believe we're in the midst of a bear market i don't think you can say the coast is clear, just like you can't say a risk of recession is a foregone conclusion.

we're just in that unknown area. >> if you were just purely looking at earnings, with a rising interest rate environment, and that's what threw us for a loop that's week and this week, because, any type of fed pivot, looks like we may have been overly optimistic, but in a rising interest rate environment, don't you have to worry about multiple contraction on the earnings that you just said are not stellar so then you have to apply a lower multiple i can see how could you get to below 3500 based on that >> that's exactly right. now at this point, the price is wrong, too at least in june, the price was right at 15.5 times. that was always our target this year for pe. that's right in like with our forecast at the beginning of the year, but all of that pe tee

grad degradation, that's before we've seen the earnings revisions we think need to come but the price is just not correct, given the environment that we're in, and the earnings are still too high that's how we look at risk-reward. when we make recommendations, we're always thinking about the context, what's my upside and what's my downside a lot of folks say the market was up, i'm right. or the market's down, i was right. you have to understand how much risk you are assuming to do that at 4200 the risk is absolutely more skewed to the down side >> in your business, it has a lot to do with that. you could be wrong about the ultimate direction or duration,but you could be right in terms of risk we ward could you say yeah, okay, i missed that, but i still think i

was correct in terms of how the potential, which nobody knows, and if it's a 40-60, 50-50, you might want to stay defensive if you were to miss the first 10% mike, do youive g ever go on a feeling as opposed to fundamentals on june 15, that was pretty negative and we didn't have a strategist on who said we'd seen the lows and that continued through the entire six weeks no one was willing to say weha seen the lows. i think it's due for a bounce. but do you ever just go on gut feelings everybody's just too negative, it doesn't matter what my fundamentals are >> oh, absolutely. but remember, we're acting as fiduciaries, that's our job. you can't stray too far from that, right? so in other words, valuation is

always yours self-governing. we pointed out that it's bearish, and the risk was scud skewed we still weren't getting paid to take that risk we have $4 trillion of assets. we can't flip it around that quickly. absolutely, i think about the technicals i think about the sentiment positioning all the time on that note, let's just talk about that for a second. right now i would say, you know, a huge, you know, part of the market has skewed more constructivelily a lot of people are saying we're not taking out thelows all we've done this year is taken a more defensive position

in our portfolios. the portfolios are up 2% this year, year-to-date so we've done our job. we've served our clients well in that that regard. we aren't always going to get it right. >> you talk to your economists, i'm sure you have your own ideas. did the fed overdo it to the extent that we are in for some really tough love do you think and there's no way around it that they're going to have to stay tighter for longer than any of us would probably like and maybe take the economy slow at even more than many of us would like the soft landing seems elusive or could be elusive at this point. >> yeah, i mean once again, joe, even in the absence of a recession, the slow down that we're feeling feels like a hard landing. okay, when you go from 14% nominal gdp growth to something like 5, that's a hard landing, and it will have an in negativ

impact on earning. the fed has admit theted their mistake. and they're tightening i don't think we can fault them. i think people are getting a little too optimistic that think can shift it around. they're hiking they're not loosening, and they're going to continue to do that until they get the result that they want on inflation and hopefully they can orchestrate a modest recession or a slow down that isn't a recession and layoffs don't have to go too high that's their goal, but they know they have to slow it because inflation got out of the bag >> what's the duration of all this, mike how long is a bear typically last direction's hard enough, sorry to ask you you're giving me directions, now i want to ask you for duration is this over next year >> yeah, i think it is

nobody knows, obviously. these things are all different time and price if you look over time, the median is 18 months or a recession, or i'm sorry, bear market that includes a recession. that would take knew next year you also have to define when cand did the pair did the bear market start? some say january i would say a year ago my base case right now, this is faster than anything we've seen in our careers you and i are about the same age. about 30 years plus. the finishing move will be fast as well. so i'm hopeful that it can all be kind of finished by close to midterms, maybe sometime in the fourth quarter i think that's a good time frame to think about, but we can't be

that arrogant. so at this point, you know, we're not adding risk. that's for sure. we're probably curtailing some risk and trying to manage it through the next two quarters. >> all right, mike, thanks you're in your early 50s, late 40s? >> oh, i'm 34, come on >> i'm on shatner time if he's 91. >> he's still doing the amazing race he's not really like 91, he's like 71. i don't think age has anything to do with anything. >> i'm with you on that. >> that's my story, and i'm sticking to it we do got to get a new picture of you i always say that's your high school picture that is cheating >> you are saying i look younger now. >> i think you look better,

cooler, more distinguished and wisened. thank you. >> thanks, joe. >> speaking of young, let's get to my co-anchor who honestly is really young by wise >> and getting older every day coming up, the nasdaq closing 22% omtsfr i 52-week high we're going to talk tech stocks when squawk returns right after this (vo) at viking, we are proud to have been named the world's number one for both rivers and oceans by travel and leisure, as well as condé nast traveler. but it is now time for us to work even harder, searching for meaningful experiences and new adventures for you to embark upon. they say when you reach the top, there's only one way to go. we say, that way is onwards.

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only from xfinity. unbeatable internet made to do anything so you can do anything. welcome back to "squawk box" this morning the tech wreck, it continues and yesterday's selloff, the tech-heavy nasdaq dropping 2.5%. joining us, the cleo capital managing direct her. we've been trying to make sense of where weher we've been trying to make sense of wher we've been trying to make sense of where wer we've been trying to make sense of whor we've been trying to make sense of where we are. i don't even know where you put the meme stocks. >> don't buy meme stocks if you are, try to get out don't leverage meme stocks

some of it is investing 101 that people have left behind in pursuit of, i don't know if it's a mix of their board but it's not working for anyone not named ryan cohen right now overall, you know, the tech stocks, the nasdaq, they're just not doing well with the fed. it doesn't want inflation. and people keep trying to hope that the spock talking on the side of powell means they're going to escape. and the reality is the fed has taken the speak softly and carry a big stick to rate hikes. and we have to learn to live with it until inflation is at least under the 6% mark, not even to mention the 2% target that the fed has >> so your expectation is that friday, 10:00 a.m. eastern time when we hear from j. powell, it is not going to be good, and the market, if it hasn't come to its senses already is really going to come to its senses then

do you think that's already baked in at thispoint? or not >> i don't think it's already baked in, but i think people woke up on monday morning and said oh, no, there is likely going to be a call friday that we don't like about what that means for september. and i think people have started selling off against that i think we're going to see a lot of that continue this week and it also doesn't help that it is, there's likely to be a rate hike because the retail sales have remained strong, and we're heading into shopping season, right? back to school, holiday, so we might not see that weakness in retail sales that suggests the consumer has had enough and lets inflation go down until the new year when buying slows down. so for tech retailers like amazon and apple, they're going to need a lot of people in stores and warehouses to meet that demand of that retail buying behavior. so don't expect them to find ko

c cost savings in seasonal label it's just that i don't think that the tech stocks are going to do what we want >> when you said people woke up on monday and said to themselves, ooh, maybe the fed is going to be a little bit harsher than i thought what made them do that and what made them optimistic prior, when i do think if you look at the economists out there who have been talking about this quite publicly, virtually all of them have thought that 75 basis points is where the fed is going to be going. >> i mean, bull market, bear market rallies, i think, are a little bit of kind of, you know, rearranging deck chairs on the titanic, right you want to think that things are better than they are so i think there was that. and the reality is, if you're a trader and your job is to make money and you have a position that did bounce up during that

rally, and you're able to lock in those gains now, you're happy, right you're about as happy as if it was continuing, but you're happy. so i think a lot of people treated that rally like a mini spring break from reality, but now we're back, and there are a lot of indicators that it's going to look better in the near future it's to the just jackson hole and the meeting on friday that is a risk to nasdaq stock prices china is a story that not enoug people are paying attention to they're upset about u.s. visits to taiwan. taiwan is a place that creates a lot of chips for companies like apple. and companies like apple sell a lot of product to china. and the macro issues outside of the election issues, there is a very, very large conflict

between china, taiwan and the u.s. and tech stocks are square in the middle of that so i think it's really important to take a moment right now and look around and say, yikes, there are a lot of lights that are flashing things could get very bad very quickly. you know, how do i lock in my gains or protect from down side, not how do i go 3,000% >> well, sara, you just said it. spring break is over really, summer break is over a lot of kids are going back to school and reality is, perhaps, setting in i know my kids are >> thank you, sara, nice to see you. coming up on the other side, we will hear from coinbase ceo brian armstrong. follow squawk pod, and listen anytime. we're coming right back.

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welcome back to "squawk box. haven't talked much about crypto this is morning. we are seeing a little bit of a rebound after yesterday. quite weak you know, this person at voltech. we did have another kathryn rooney on this morning but she sat down with brian

armstrong late yesterday and joins us now with the highlights there's room for two, i think. >> i get her inbound linked in messages so we have to kent >> i it talk to brian armstrong. at the told me while taking the crypto company public a year and a half ago was the right move, running a crypto company during a downturn can be a little painful. shares are down 70%. part of the bear case has been around fears about the trading themes the main revenue source getting squeezed he says yes, that compression will happen eventually, but retail traders are still willing to pay for convenience and security >> i do think there's going to be margins eventually. everything we're building others will eventually build it and it will become more commoditized.

we're realizing that trading fees is not going to be that thing, it's still going to be a major part of our business ten years from now, even 20 years from now, but i'd like to get to a place where it's more subscription and services. >> it's still a lot of the early bases, including coinbase's nft business armstrong called it a mistake that the company may have been too u.s. sen tcentric. but cutting costs. they've laid off about 18% of the workforce earlier this year. and armstrong didn't rule out deeper job cut down the road but did say that was pleasant to be a one-time event it's rolling out in the 11:00 a.m. hour on tech check coming up >> did you bring up the merge, the ether merge? >> i did bring up the merge,

joe. one of the interesting things is they have this business called staking that basically you earn revenue by putting up your ethereum as collateral and one of the things for coin boy coinbase is regulators want to come in. armstrong saying i have to comply with the law. so he has sort of been in a battle with a lot of people in the ethereum area, launch new products and be on the forefront. but he said the staking business may be one of the subscription businesses long term, they'll see a very long bet there >> i need to go back to school i think. we've seen the surge and then the purge, four or five purges but now the merge, everybody's talking about the merge. what is it, stake?

>> yeah. >> less energy >> more energy efficient, faster way to do things allegedly. this thing has been pushed back multiple times i think there is skepticism. and you've seen ethereum way out perform bitcoin. so it could be a by the rumor situation. we'll see if it's really as great as they're talking about this is happening in september >> we don't coordinate what we talk about you were so ready for that >> i'm ready with the cross talk it could be golf it's not football season yet >> that's a great asset to have. if you're on tv, it's nice to be able to talk i know all about that. anyway, thank you, kate rooney, not kate rooney vera just different kate, >> regular kate. a twitter whistle-blower alleging negligent cyber

security policies. we'll bring you the details right after the break. turboxfled with a 360 degree hinge disguised in the design. for maximum comfort, flexibility, and performance that stands the test of time. now, strength meets style. invest in the best, turboflex. find your retailer at turboflexeyewear.com

welcome back to "squawk box" this morning we have a developing story in the works here

a former twitter executive blowing the whistle on the company. we're joined with the latest details. ayman? >> enormous implications it is twitter's former chief of security, he's known by the hack name "mudge. the contents of the whistle-blower complaint were confirmed by his legal team. in that written whistle-blower complaint, he describes twitter as a chaotic, rudderless company, beset by infighting unable to present its 238 million daily users including government agencies and public figures. the complaint alleges that twitter violated terms of a settlement the key problem appears to be that too many employees inside

twitter, thousands of them, had access that was not tracked well to this core company software. and it leads to tdisgruntled employees using it for their own access executives stood to make bonuses for themselves of as much as $10 million tied to increases in daily users. now mudge was hired at twitter by jack dorsey in late 2020 and was fired in january of this year and in a statement to cnbc this morning, a twitter spokesperson said mr. zatko was fired for ineffec

ineffective leadership his opportunistic timing appear designed to capture attention and inflict harm on twitter and its shareholders in a separate interview this morning, his legal team says he has not had direct contact with elon musk who of course is in a heated battle with getter over the twitter ove the takeover >> so much is in the context of musk's ability or not to get out of the deal with twitter and in fact the numbers around spam and bots were accurate or at least the percentage estimate and twitter when they made those estimates said they could be wrong. so we have to real le uly under

that language. how much of the immiallegationse whistle-blower is saying that they didn't have their act right. it may raise some of the bigger discovery issues in the case where the judge may say okay we need to look at the spam numbers in a different way >> he's alleging not just negligence but that the company lied to the government here in terms of what its policies were and how safe the systems were. he's saying inside the company he tried to fix a number of issues and wasn't able to get anywhere because the company was focussed on growth and not on security and not on reducing the spam activity that you see on twitter. this is a bombshell allegation moving the stock this morning but throughout the day we'll wait for elon musk to tweet which you imagine is pretty much

inevitable here. the whistle-blower's legal team telling cnn this morning he did not have any can' contact with n musk but you would imagine that he would pounce on this, even if he hadn't been involved in it so far. >> ayman, let me add to the story. literally five minutes ago i received an e-mail with a statement from the lawyer for elon musk. this is from quinn homoemmanuel saying we already have issued a subpoena for mr. zatko we want to thank you for your reporting this morning >> wow to be continued. now back to the markets. the futures are flat the futures are flat ten years at about 3% right now.

risk santelli joins us from the cme in chicago just to shoot the bull i think we're allowed to say that, just to shoot the bull do we use a core number for inflation? cpi, ppi give me a numberque u we can ust so i know what the fed has to work with and where you really think they're going to continue tightening until they get there. where are we now, and where will they stop? >> you know, i can't answer any of those questions the fed likes to look at personal consumption >> and what is that. >> it is a number derived using numbers from the gdp and the durable goods, and basically, it gives us a notion of how prices are affecting the ultimate consumer in a consumption driven

economy. we have core personal consumption expenditures the latter is running around 4.4% the headline number, the actual gdp price index is running about 8.7% there's a lot of different numbers to look at i personally like to look at a few producer price numbers of but 2010 to 2013 they made major changes and included trade it's tough to get the history often cpi. you know, pick your poison the fed always seems to, in the past, try to create numbers that would paint inflation in a lower type framework versus higher. and i don't see anything wrong with that. they get to pick the calculations which have changed over time. but i think if we really want to

holiday th hold the issue here, jackson hole friday. it's pretty easy to find a four-decade-high number somewhere in that array that we always pay attention to. we also pay attention to things like prices paid and various other calculations like the purchasing managers surveys, and i think those figure in. but ultimately, it's going to be talk tough are you surprised, joe, that you came back from vaca to see the lead in to jackson hole, the main fed event of the year and this time around maybe one of the central banking events of the decade and the dollar at 20-year highs, the injueuro at 20-year lows after jackson hole there's going to be disappointment they're not going to be able to see the rates we saw yesterday

and today post that meeting. there's no doubt in anybody's mind except for the fed that we have in certain ways probably crossed over on peak inflation not necessarily in energy. and energy is going to be what really sets the bar for all the future agony we're going to be suffering over price pressures just think about how the august time frame is going to affect natural gas in germany all of these issues are going to come to a head and these central ban skers bete keep an open mind. all of that can change all of their inflation-fighting plans that they're going to discuss friday and saturday. >> if they were so weak-kneed through the financial crisis and the pandemic, and they got into this mess, why do we all of a sudden think they're going to be tough when they've shown no

proclivity >> no, why doq we think they're going to do it correctly and i'm not trying to pick on them >> but they probably will prif wwill pivot too soon which we'll be happy about initially, but we'll have to come back and finish it off. >> on this one, i don't think they'll pivot too soon they'll hold on much too long just like they held on and allowed the government to spend way too much money coming up, zoom shares are under pressure following cautious guidance from the company. ceo kelly steckelberg will join us, first on cnbc. that's coming up next.

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welcome back to "squawk box" this morning shares of zoom are under pressure once again after the company missed expectations on revenue and offered weak

guidance first on cnbc is cfo kelly steckelberg. thank you for being with us. let's talk about this quarter but let's talk about your expectations and what you think growth looks like at this point. because i think there had been outsized expectation among investors and among the company. >> we're really excited about the progress we're seeing in the enterprise segment of our business which grew 27% year over year. we did talk about, though, impact from fx and macro economic environment it's mainly focussed on the online portion of our business, the part of our business that grew dramatically over the last two and a half years, and it's now dropped down to under 50% of our revenue but is really being challenged by what's going on in europe and we did see impact there, which is reflected in the results of q2 as well as the

outlook for the year but we're really excited about the prospects of our enterprise business and focussed on initiatives to drive growth there as well as the online segment of the business. >> how much of this is simply a pull forward situation meaning that, you know, there's only so much market out thayere. you have a lot of it how much of it is a competitive issue, where you are looking at others who are doing this and people are moving there. how are you looking at this? >> in the enterprise segment, we are really excited, making this transition from a meetings application to a platform. we saw strength in the phone, we crossed over the 4 million seat mark for zoom phone during augm august we have new products including zoom contact center making great progress we saw exciting deals there with great names as well as fleet sizes, and we have zoom i.t. for

sale we're just making this transition, and during this creative time experiencing challenges by the macro and the war in europe, which really had a strong impact on what's happening in our online segment of the business. >> how are you thinking at this point about acquisitions? obviously, there was a point at which you look the aed at five . but i'm curious as you try to look for more growth >> we've done a few acquisitions what they're bringing is conversational a.i. into our contact center product and we're really looking for opportunities to continue to build out the functionality, especially in our existing products if you think about contact center for example it's a really great opportunity where we've built the really core of that application, but there are all kinds of pieces that would make sense to add on.

and acquisitions are a great way to do that it's a great way to ak sell rate talent and acquisition >> does that mean you're looking for smaller bolt-on or larger, and i, you know, five nine might have been one of them, transformational potential many. potential. >> what we've seen work for us are the smaller where we get great talent we love that we have a natively-built platform. eric talked about this yesterday on our call, and we want to make sure that we maintain that that every time our customers come to our platform they see the same zoom look and feel and it all works seamlessly together and one way to extend that and accelerate that is through the smaller acquisitions which

continue to add functionality but don't disrupt or take away from the seamless architecture that we have >> you've hired a lot of people over the last couple year, some who have stock that i imagine has to be under water. what kind of conversations are you having with them the ability to attract new talent how big an issue is that >> so we are continuing to hire and are thrilled that we have over 8,000 zoom employees today. culture is really at the forefront of what we think about every single day and, as we've seen some of the opportunities to continue to help our employees build their value in zoom, we've continued to give up top brands to them. and continued to focus on opportunities for development, having career discussions with them, making sure that they see the potential to continue to grow with zoom as we continue to

build out our platform strategy. >> okay, but are you making top up grants, that's interesting. thank you for coming on, we appreciate you when the news is good, bad or otherwise >> thank f >> thanks for having me. when we come back we'll talk to jim cramer live at the new york stock ex-cheick

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welcome back to "squawk box. let's get down to the new york stock exchange jim cramer joins us now. jim, you got jackson hole, you got the meme stock hangover, whatever you want to call it, the put it all together and the dow is unable to hold on to any rebound. >> no, it can't. the hedge funds want this market down they're selling the market we know every time there's been a big meme flare-up, the nasdaq is down 12%. so there's a little more to go the meme hangover is a serious issue. there's been seven of them, six of them, minus 12%, i would be very careful jackson hole, everybody is

worried it will put us in the negative we're in a cyclically down period i have to tell you it is really, really scary to me how powerful these memesters are in terms of hijacking the narrative. >> they're very active >> they're also vociferous and at times i think they're almost violent. we need to calm them down. they are just -- it's their lies it's all they have and it's really interesting, this is the stock market it should be like, all they have is for the mets or for the dodgers or for the braves or for houston. no, it's amc and the failed bed bath bed bath after cohen blew out of bed bath, they still think something's going to happen? >> exactly rick said that no matter what happens in jackson hole, you

think maybe we'll get it out he said that people are going to be disappointed no matter what i don't know how they -- it's a tough job. it's a -- threading the needle on what markets want to hear >> look, september is a tough month. disappointing no matter what how about if the market is down every day going into it, are they still going to be disappointed i'm not buying into that rap >> as you pointed out last week, when oil went down, we were happy for inflation, now it goes up and we're not happy there's not a recession. you can't win. >> natural gas at $10 is bad except for a few long natural gas stocks we have to stop thinking that every day is different and just accept the fact that we're in a tightening mode and when is the tipping going to end all this stuff, joe, you and i have seen the tightening mode, guessing when it's going to be the last tightening. there's always someone who comes on tv and says it's pushing on a string then another guy comes on and

says, we have to overly tighten. these are people trying to stake a claim so when it happens they can say, hey, look, i said that. i'm not going to play that game. it's going to be more tightenings and we'll see what happens. i'm not trying to stake out some claim so i can come on air and say i got that right that thing's been played out too many times >> our next guest might want to play we'll get to him >> i'll watch. he'll be famous after if he makes the big call we'll be down 3,000 dow points, and then if we go down 3,000 dow points, i'm a hero i'm not going to play that game. >> do you think the fed can assuage our concerns in jackson hole, sri? >> i have serious doubts, joe. i think you said it best in your conversation with rick a few minutes ago. since 2008, they have let us

down in terms of economic policy, monetary creation. why do we have to believe the fed today? and to go one more step beyond what you said to rick. this chairman has had a 4.5 year record of not sticking to his forecast he switched abruptly, december 2018 when the markets krcratered as jim said, if the meme stocks crater, despite a tough message on friday, they're going to switch if you have a credit event take place when you have a large institutional failure as a result of the stock market correcting and interest rates increasing sharply even as quantitative tightening takes place, all of those will get reversed so nothing is for sure with this chairman and with this fed so i remain deeply pessimistic about the economic management.

and since he has 3 1/2 years to go as chairman, we don't have an exit >> i was -- i can look at it either near term, the market seems to want to pivot, they almost would like the fed not to follow through on all the tough talk so i was thinking, why would they follow through when they've shown no -- you know, they really haven't done that since 2008, regardless of who is the fed chairperson. so they haven't -- so why do we believe it now but that might be the wrong long term thing to hope for, that they pivot too quickly maybe we really do want them to put -- drive a stake into the heart of inflation, which i don't know how many more 75-basis-point increases you think that would take, sri >> you are correct, joe, in the sense that they have to put a stake on inflation and because of the fact they

called it wrong throughout 2021, the job is harder. you cannot make it easier by pivoting right now look at one other factor the two to ten-year yield curve has remained at 50 basis points at its worst and the ten-year gone up. it will be less inverted if there is a fed pivot, you once again rally in bonds and then make the subsequent work worse. the question is do they tighten right now and stay disciplined, which i doubt very much, or do they just do back in the jig-jag fashion and make it worse? and that's a story from the 1970s. and general powell is following

the playbook of arthur burns and g. william miller in the 1970s rather than the person he keeps calling his hero, paul volcker, who would never do what we are seeing happen with powell. >> i like jay powell, i don't envy him so you think that -- i've been trying to figure out whether they are going to remember the '70s, and therefore try to avoid that, or whether they'll fall into the same trap you're saying they're going to fall into the same stop and start trap that volcker's predecessors did >> i'm saying -- exactly they'll fall into the same trap. i'm not saying it just as a guess. i am basing it on the record that we have as chairman we have, again, one full term of powell as chairman, and then another last six months. so that's what you hear. you have seen so many pivots during this period >> all right we'll have to end it there, sri.

it's not the end, just a pause until we see you again >> thank you, look forward to it >> it will be after jackson hole, so we'll have a lot to talk about thank you, sri andrew >> we do have a big week it's all coming to a head this friday right now the dow looks like it will open down about 22 points, s&p 500 off a little over a point, two points we'll call it, nasdaq four points joe, see you tomorrow, my friend "squawk on the street" begins right now. good tuesday morning, welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber futures are tentative still with ten-year, some double digit moves in palo alto and zoom today. stocks are coming off the worst

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