comp component. it is problems with the cloud. and tesla begins trading with the 3 for 1 split our special guest is ron barron. "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm rebecca quick along with joe kernen and andrew ross sorkin. let's look at the u.s. equities at this hour joe mentioned we are higher. it has been volatile right now, dow futures up 85 points s&p futures up 18. nasdaq up 68

this comes after an up day for the markets yesterday. breaking a three-day losing streak for the s&p and dow we have been watching treasury yields they have been higher this week. earlier this week touches 3.1% for the 10-year treasury it is below that at 3$3.08. we await to hear what the fed has to say from jackson hole you will hear that today the 2-year treasury at 3.4%. invest or focus remains at the top of the agenda for the fed. bostic saying the central bank has a way to go to raise interest rates this year he warns it is too soon to say the inflation surge peaked steve liesman will join us live from jackson hole this morning with his interview with esther george at 7:30 eastern time. as you see, a long list of big names speaking

jay powell at 10:00 a.m. tomorrow >> whoa. becky, let's talk corporate news shares of salesforce under pressure the latest results topping estimates, but full-year forecast pointing to weaker economic cycles. the ceo spoke to jim cramer on "mad money" last night. >> everyone is trying to assess what's going on and how do they position themselves for the new economy. it's a new day for many companies. i think when you look out at all of the businesses, yes, they are all doing digital transformation this is everybody's priority every digital transformation is still beginning and ending with the customer >> shares of salesforce this year are down now. it has been a wild ride. another example of one of the big tech companies that was up

and has come down as multiples have come down as worries about the economy continue. another big tech mover to watch. snowflake. shares up sharply right now. the software company reported been than expected revenues. the ceo says the consumption model shows after signing a contract is proving to be an advantage. joe. >> we need to keep in mind that is a big point move in salesforce that is coming off the dow. >> the dow is up 100. >> that is part of it. i have to keep telling myself. we talked about it earlier shocked you with am gen. >> united health >> still getting used to goldman sachs. walgreens boots? are you sure >> i'm sure. >> that's is not in the dow. not yet. it will begin trading on a split adjusted the ev maker told investors the

move would provide more flexibility for employees that are managing their equity. tesla split shares 5 for 1 in august of 2020 elon musk's company is the biggest big cap name making a move amazon and alphabet made that same move in recent months. >> i didn't think about that before the idea you need to do it so employees can manage their flexibility. if they are givinen a lot of stock, you don't want to sell all of it. you want to sell smaller portions of it i guess it makes sense >> you can sell fractionally you can. >> it is not prohibitively expensive like it used to be i don't know people do want to buy 100 shares that's why it makes it easier for retail people. this next one looks likes it split. it didn't.

other corporate news bed, bath & beyond holding talks with asset manager sixth street for $400 million shares of the meme stock as you see are double digits at least at this point this morning amazon is shutting down the telehealth service called amazon care it launched it in 2019 as a pilot program for employees. it lets business customers doctor visits from home. it offers services nationwide. amazon says the service was not meeting the needs of customers stocks traded higher on the news including teladoc and hims and hers and amwell. this is another giant that tried to get in and manage health care

costs. before this, there was the partnership with amazon and berkshire and jpmorgan chase that didn't work either. any of the companies trying to get their arms around a tapeworm that eats through the economy with the incredible growth in terms of inflation nobody has been able to manage >> fascinating we all thought that amazon would be the one to crack the code on this and given the prime membership and large scale they have and they would be the ones to be doing telehealth and other health care services they are still in the hunt for a number of acquisitions in the health care space. they are not giving up on the space, but telehealth space. after the pandemic, we thought that would be the future. >> that was the story this week. >> made a purchase >> it's early. 6:06 can i -- i was -- i was stimulated this morning.

i know that's probably tmi. >> oh, my goodness i'm getting coffee here. >> by this article i think we should assign it. it just got me thinking. nobody knows how interest rates affect inflation it is by the guy at the hoover institute. it made me think how much we do know about the relationship between interest rates and inflation. there is a new thesis that the economy unlike what the fed thinks, the fed assumes it is unstable it actually is fairly stable and self correcting. over time, i don't know how much cr credence to put in this. in the volcker days, it would eventually returned to more equilibrium if we hadn't gone to

20% interest rate. >> now the fed should slow down? >> no, it plays in the notion at best it is a blunt instrument. at worst, it might not be as effective as the fed thinks. >> what about all of the calls for the fed to raise rates and being too easy >> i know. >> inflating things. >> i see when the fed keeps rates slow, it allows our policymakers to think money's free and they go crazy >> that's -- we had this debate for decades. since 2008, we have been talking about this exact conversation. >> right >> now you are on the other side >> if you pyou print. we see it in zimbabwe with helicopter money we know if you devalue currency and print too much >> low rates is one thing.

printing money is the other. is that the lesson we take >> wouldn't it be perfect if we didn't print that much >> that is the argument for the fed to rein in liquidity and bring down the balance sheet they have two tools. the balance sheet and the other is interest rates. the balance sheet, we still don't know what happened we have inflated it beyond any level than we have seen before >> i guess i decide i don't want to start anything, andrew. i think i just decided that i wish the fed -- the rest of us didn't have to pay for bad policies now we will kill the economy because we have done all of these stupid things because spending too much money. the tax cuts i hear that. it's not just this administration, but we really kicked it into a new level especially with the student loan yet. minimum $500 billion

we just did chips and inflation reduction. supposedly if you believe the inflation reduction would have cut the deficit by $300 billion. this wipes that out and adds another $300 billion on the national debt. >> jay was supposed to be on the show i asked for him to be on the show. >> i retweeted him i said when you lose jason. >> he used to be the head of the council of economic advisers under president obama, and friend of the show and been on frequently he did a long thread on twitter yesterday bringing out his problems with paying off student loans. they are not honest how they are assessing this that it is a situation -- forget the moral hazard impact that it puts in. he has lots of problems with doing this, but also with how

they plaexplaining it and using different terms and restart the payment ans and when they are d. we were having him on, but it was a scheduling snafu we will have him on tomorrow, hopefully, to talk about this. >> andrew, talking about bailouts and the notion that we bailout companies. we don't bail out people that borrow money for something worthy i'm not sure that holds true if it was systemic in 2008, it wasn't because you were trying to put in a moral hazard you had to hold your nose. it is not good then and not good now. not did in either case >> i think it is probably not good in either case. i think we all actually, all three of us, maybe not fun for cable, agree about this. i think we are all in the same side of the student loan piece

of this. the only thing i would say and as i watched president biden yesterday, he made a comment about someone asking him if he thinks this is fair. what about all of the people who spent this money and did all the right things he turned around and said what about all of these billionaires who run companies who have other tax policies i thought, that's a ridiculous thin thing to say ridiculous in that is not the retort we should be looking at with the tax policy for each case i understood at the same time -- i think for somebody like them, he is thinking of the cosmic sense of justice our tax system is so backwards and given so many benefits to companies or people along the way and you see it in the last two or three years during covid. by the way, you saw the story of the celebrities who took all

that ppp money there has been so many different benefits that have been handed to different people for different reasons and i'm not saying this is the right reason or the wrong reason, but i do think that we probably do have to think about it in the larger -- it's very hard all of us -- i don't want to say micro. we look at the merits of the policy and say does this make sense or does this make sense? >> i'm much more cynical he cannot say no to the progressive wing of his party. he cannot say no to them >> it doesn't fix any of the underlining problems with the higher education system. >> november's coming it's justbefore winter. >> i get all of it, but i also think -- >> joe biden is not thinking of cosmic sense of fairness he is telselling it that way. they represent the progressive

wing of the party. i don't know who is running this show. >> a sense of fairness or justice or who knows what. i think there are people in the country and they look and say we have incentivized and privileged certain people over other people maybe people who tried to go to college and had a tough time, maybe they deserve it. i get that. >> what about the people who couldn't go to college because they couldn't afford it? >> plumbers and fedex guys are paying for harvard graduate degrees. >> we created the industrialized po policies we used the tax code to express what we think is our democracy that's why this is always a big issue. >> i agree i think you are right. we are all on the same page. we are all flommoxed by this

>> we're way over. we're going to come back in just a moment. we'll talk about what investors want to hear from jay powell and other policymakers in jackson hole as we head to break, look at the market's winners and losers. stay tuned you are watching "squawk box" on cnbc >> announcer: this cnbc program is sponsored by truist wealth. where meaningful relationships matter most.

welcome back to "squawk box. we are watching futures this morning. so far, we are in the green. we have seen movement and volatility after we heard from big tech companies last night with dwiisappointing outlooks. for the week, the markets are in the red with the losses on money. joining us now is karen cavanaugh. karen, a lot of people trying to figure this out. we have concerning things from the fed. do you think we have sign the ma seen the market lows this year >> i hope so that will give us confidence i'll be more confident going

into the end of the year i know economically things are slowing down we know that we know the fed will continue to raise interest rates and pulling a pivot is premature we will continue to see interest rate hikes overall, the july earnings season gives investors confidence even though things are slowing down, things are not really that bad. if we can see more rate increases and peak inflation and good inflation numbers without employment numbers falling apart, that will give investors more confidence. i don't think we're out of the woods with volatility. in september, that is the coolest month. october is no princess if we could get earnings and the next rate hike and see good news in earnings, then we do see the lows in mid-june >> i hear what you are saying with the slowdowns

we know that that doesn't stop harsh reaction when the company gives a profit warning or sales warning we saw it with salesforce last night. that got hit hard. we saw it with retailers if you think back to macy's or nordstrom this week. if they are talking about a relatively more modest outlook in terms of sales or something they get punished hard salesforce is down 6.5%. >> they are. there is that nervousness. we haven't had cpi read over 2.5% in 25 years we don't know how long and how hard the fed will have to move in order to get inflation under control. that is really an unknown journey. investors will be sensitive to any kind off negative guidance we are in the world of unknown for now. we have to expect increased

volatility i think if we do get inflation under control and it seems we are at peak inflation, but that is not to say we are not going to still see inflation that's another thing that is worrying investors can companies maintain profit margins in the high inflation environment? there are a lot of worries we will see investors punishing companies for negative guidance. maybe not reporting companies as much as they should either because of the nervousness of the volatility in the unknown with the interest rate hikes. >> karyn, thank you. good to see you. >> thank you coming up, why warner bros. discovery is punting on the release dates for two sequels. neither one will affect my life in the slightest bit you are tcngsqwkoxonwahi "ua b" cnbc . but, at upwork, we found her.

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warner bros. discovery delaying release dates as the company continues to cut costs the sequel to "aquaman" delayed. she was in that. >> johnny depp >> yes set to hit the screen in march fans have to wait for christmas day 2023 "shazam" and of jim nabors life

st story? no release date pushed from this december sorkin, you are a hollywood movie expert person. what does this mean exactly? do the movies stink or are they bad like the one they canceled does it save money to wait for the release date do they tweak it is it not a good time to release it is it a better time? >> i don't know. i think these are timing issues. or against other movies or thinking there is an opening with seasonality this is unlike -- the other film like "bat girl" was an accounting issue >> they got a tax benefit. >> they are taking lots of other

programming off hbo max. that is about residuals. not having to pay residuals. at the same time, declutter the service given there is so much clutter. this is a different thing. looking at the calendar and looking at the marketing budgets and seeing what you can do that's what i think. y i don't know >> did you see the original "a "aquaman." >> yes >> i like the big guy from "game of thrones." >> aqua man. do you know the bad guy? >> no, i didn't see it. >> he looks like craig >> craig >> our craig. >> no way! >> he does >> craig could not look like a bad guy. >> he doesn't look like a bad guy. the guy who looks like the bad guy looks like craig >> what about "shazam" movie >> a kid gets in trouble

shazam it reminded me of "xanadu" with olivia newton-john >> poor olivia my jim nabors joke gomer pyle he always said shazam. >> over my head. >> sergeant carter >> that's why i said that. >> i know shazam as an app it tells you the song. we have more coming up we know a picture is worth a thousand words how much is a word worth and word smith we talk about wanting workers back in the office this fall as we head to break, look at yesterday's s&p 500 winners and losers

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now to a topic that everybody seems to be talking about. the return to office push. ceos call back employees after labor day. our next guest has advice for executives on how to better communicate in terms of words to stake holders with a list of words to use and perhaps lose. joining us is political strategist frank lunz. this is happening all over the country right now. a number of big business leaders wanting to get employees back. to those who desperately want their people in the office, what are you telling them to say? >> start with the focus on employees, not yourself. it is not your experience. it is not what you did over the summer it is what they think and feel and what they want you told us and we heard you that's the opening statement there are three or four key

components number one, workers want better flexibility. number two, they want better choices. notice i say better and not more it is not cquantity, not qualit. they deserve it. ceos need to understand this it is one of the reasons why so many businesses cannot hire the people they want individuals now have two or three or four job options or choices. they will go where they feel quality of life is and not standard of living is best >> frank, i talked to a ceo a couple of months ago she said ceos will have to earn the commute of the worker. what do you think of that idea it does put the onus on the business in a way that it didn't before

>> exactly correct that the public expects the ceo to deserve my employment deserve my effort. it is a very different world today than it was before covid make no mistake, this is the way it is across the board in washington state or florida, doesn't matter if you are working cloass, middle class. middle management or new trainee. workers now, employees now, by the way, they should not be called corporations or be called businesses these are job creators if you are a corporation, it is about profitability. if you are a job creator, it is about what do you and the people you serve. and one other point, it involves all four communities your customers, the community that you serve and dead last is about shareholders the most effective successful

ceos will be focused -- by the way, it also isn't about how much money you give. it is about what you do for your people to make their lives meaningfully and measurably better. >> frank, this is a moment in time and i know executives who think that and in a tight labor market, you know, the onus is now on the employer in a way that maybe it wasn't i think there are some folks hoping if things loosen up, maybe the onus won't be. that is one piece. the other piece is, you know, it is not just the words. what do you have to provide? you are saying it is not about money. a lot of folks don't want to sit on a train or in a car for an hour a day you can give me free food, but that doesn't help. dry cleaning for a while what is the onus on the employer

beyond the words >> i know you got the slide up which has the words. the slide i hope you put up is the difference with capitalism and economic freedom this is my warning i'm screaming out the warning. right now, you've got people in washington who are damning and criticizing and attempting to undermine the principles of capitalism if you keep representing and keep talking about capitalism, you are talking about wall street you are talking about ceos and millionaires and billionaires. economic freedom that's main street that's all of us that's the employee. not just the employer. the public now believes that they are in control and they want that control. they will not give it up take a look at the union efforts that are happening against amazon and against starbucks there has been an actitiy

health care and what you get in health is salary that is why the businesses which keep taking back health care benefits are having trouble with the work force this is an inflection point. we are going through a rethink about everything we do and the language has to be rethought as well with the ceos if they want to keep their jobs >> frank, do you think it is possible for a balance between these two sides? the management and labor, if you will starbucks and amazon are examples of this you know, howard schultz said it is hard to embrace the idea of the union. he is not sure the union is in the best interest and thinking about the company and potentially the shareholders

how do you get there is there a way >> listen, here is my advice seek and i quote the responsible approach to business and to labor and quality of life issues second, common sense it simply is irresponsible to increase wages by 30% when you can only increase prices by 5% one last point because we're talking about language in reality, more people are suffering today because of inflation than benefitting from the rise in wages. 72% of americans, incomes are not keeping up with prices they are genuinely suffering almost 1 of 4 have trouble paying bills monthly because of rising prices. the language simply sets the tone in the end, the policies have to follow >> frank luntz, great to see you and get your perspective on how to use language during these

trying times. when we come back on the other side of the break, newsmaker of the morning billionaire investor ron baron with the big stake in tesla and we get the stock split we will talk to him and so much more as we head to break, check out the dollar this morning. stay tuned this is "squawk" on cnbc. >> announcer: currency check is sponsored by interactive brokers. the professionals gateway to the world's markets.

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welcome back to "squawk box. china has been dealing with power cuts amid a serious drought. now ev charging stations are offline. eunice yoon has the story from beijing. eunice, this is similar to what we hard in europe. it has its own brand >> reporter: yeah, that's right. the main charging problems are in the two largest cities in china's southwest. chendu and shendu. these populations have a combination of 46 million people this is where the general power issues are the most severe ev makers tesla and nio which all operate their own charging stations indicated to users that their stations are suspended or operating, but on restricted basis. nio has been urging its users to

share home chargers for a month until september 20th there are other charging operators and state grid trying to push people to charge at off hours. this means overnight and they are offering steep discounts to people to do that. generally, what is happening, drivers have been complaining saying they are searching for an open charging station or charging in the middle of the night. that is taking them several hours. the problems though are generally limited to that region here in beijing, for example, charging stations are operating normal limit in the southwest, they will continue to see power problems for some time because the province is extending rationing

until saturday they will make the cuts indefinitely that will have an impact on the industry honda carmaker is keeping the plant shut until it gets further notice from the government andrew >> thank you very much for that report from beijing this morning. when we come back, more on "squawk box. stocks that investors should look for to play higher energy prices in the next hour, don't miss the live conversation with billionaire investor ron baron we will talk about the tesla shareholder and elon musk and so much more. stay tuned you are watching "squawk box" on cnbc

welcome back to "squawk box. energy was the best-performing s&p sector yesterday, driven by the recent rise in commodity prices joi joining us, tortoise plortfolio

ma managers why does an article like that get written? there's always a two-sided market, but i've seen people say we're headed down into the 70s you think we're at 100 or above throughout all of next year even >> yeah, good morning, joe i think what people are missing this time are two things first of all, supply of oil has always been plentiful. every time the prices went higher, oil production went higher opec production went higher and price quickly fell we're in a different environment now. in the u.s., as you know, as we've talked about multiple

times, limited investment in the capital investment in the u.s. has restricted u.s. oil and gas production as well typica typically, it's been a concern about oversupply, now it's about undersupply. if demand continues to rise, we'll probably see higher prices if you think about it, one additional point the second largest consumer of oil, china will probably have zero demand growth where is that supply going to come from that's what's going to continue to produce and push oil prices higher. >> when saudi prince salman talked earlier this week, what's he talking about this week, cash market versus futures market, what is that indicating?

that the price is being manipulated to stay too low? what was his point >> what the saudis and opec sees is much more the physical market they see the demand. and they see global demand for oil. what i interpreted from his comments was simply that he is seeing and opec is seeing pretty substantial demand increases potentially coming from global market and that's likely china, that's likely india and other areas around the world but i think his point was, was more if we're going to add iranian barrels back, that's a different issue, but if we're going to aid iranian oils back by removing iranian sanctions, potentially, then would be oversupply, and saudi arabia would need to make an adjustment downward to make sure that the global market remains stable

going forward. >> people would say you know what, soybean meal is controlling the complex. soybean oil, what's leading right now? and the reason i ask is another piece that got my attention today that putin's gas threat is a bluff. it's too important for the russian economy, the revenue from natural gas, these are idle threats, and maybe that made me think maybe this notion that we have that europe is just going to have a horrific winter, you know, a humanitarian problem, even possibly, or very high price force natural gas. is that a given, and would that move in natural gas, would that lead the entire complex higher, would that put oil at $150 a barrel does it have any influence >> that's a good observation

natural gas has elevated itself in the global commodity complex. and as you know, natural gas, oil, coal, and in some ways, they are substitutes for each other, so all three together can influence prices in general, inventories for all those commodities are lower, which is pushing prices higher, but natural gas is the most significant. as most people know, natural gas in europe is 7.5 or 8 times higher than it is in the u.s in europe, trying to build natural gas inventories right now to prepare for what could be a pretty harsh winter, where there is a scenario where europe could run out of gas the most significant driver right now is the fact that all commodities, including coal, oil and natural gas have abnormally

low inventory levels, and that's what's driving prices higher >> and we've got jackson hole. you wonder why we focus on this, and so head's up, they're going to decide on all these monetary moves, and it may totally depend on oil supplies on whether they can conquer inflation. we need to talk about it, but i don't know how it plays out. eventually, we'll need to talk to you begin we need the tortoise viewpoint of thing, long term. >> slow and steady >> yeah. we do have a big hour of newsmakers on the way. famed billionaire investor, ron baron will join us live. we'll hear from esther george from jackson hole and pga tour commissioner, jay monahan on the g ans bichgeto take on liv golf.

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good morning futures are higher as the fed starts to speak from jackson hole investors looking for any clues. salesforce, nvidia, all on the move and tesla kicks in as well and we'll talk tesla with ron baron and find out what he's

been buying this summer. the second hour of "squawk box" begins right now good morning and welcome back to sk"squawk b" right here on cnbc i'm andrew ross sorkin along with becky quick and joe kernen. things are moving around, and well, we'll talk about salesforce but right now in the dow dow's higher nasdaq up about 90. we'll show you the ten-year note as everyone await what is j. powell will say at 10:00 a.m. tomorrow from jackson hole the ten-year sitting at 3.098.

the bostic is warning, too soon to say the inflation surge has peaked steve liesman will be joining us live from jackson hole this morning starting with his conversation with esther george at 7:30 eastern time, joe. >> let's get to frank holland wcolin. many of these are season reports. the quarter ended in june, frank. it ended in june they can't get this done in july what if this was like april 15th who are these people the august 20th they're doing this >> i assume you understand the fiscal calendar. some of these companies' quarters ended in july i'm assuming this is some type of schtick >> don't assume anything with

me >> ah requaman >> you see the big dip right here after earnings really impacting the stock right here earnings for the courquarter. they had warned of a further drop in sales as games continued to drag, but it will be partially offset by its data center and auto businesses a trio of software earnings yesterday leading to moves today. let's start off with salesforce. falling about 6% this morning. second quarter results beat forecasts, but the company's third quarter and full-year estimates softer speaking of jim cramer last night, mark benioff said it's a result of deals taking longer to

close. the software company beat revenue forecasts. snowflake says it has more than 6800 customers feeding into the growth story that this stock trades on. and bo box shares down. the full-year guidance was well below estimates. i spoke with the ceo he said customer demand remains strong but the company's results were impacted by currency and the stronger dollar. back over to you >> meantime, want to talk about peloton. they reported a larger than expected loss that fell well below forecasts. it also gave much weaker than expected current quarter guidance peloton expects the market to

remain challenging for the foreseeable future the stock is lower this morning, but it was up more than 20% yesterday on news of the new partnership with amazon. stock off about 9% right about now. and of course the big issue is subscriptions, subscriptions, subscriptions. the hardware, the razor blade model, i think, becky. >> razors don't make you money the stick doesn't make you the money, the blade does. we've got a big line hup th hour we're going to find out where ron baron put his money to work. then breaking news from jackson hole steve liesman's interview with esther george, and the big changes to take on liv golf. "squawk box" will be right back. help make trading feel effortless and its customizable scans with social sentiment

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welcome back to "squawk box," everybody. ron baron is the chairman and ceo of baron capital that has nearly $42 billion in assets under management ron, we've been talking an awful

lot about where the market stands right now, where things are headed and i just wanted to point out you did make a call on june 17th that you said this was a once in a generation buying opportunity. if we can take a look at the chart of the s&p since that moment, it bottomed on june 16th you were right, stocks have come up significantly since then. just wondering what you're thinking at this point was that the bottom? >> i was saying that this was an opportunity that started then and continues now. by the way, i know lori ann told me i should regard every moment i speak as worth a dollar or million dollars or whatever. i don't want to waste anytime. and then i was asked what are you going to say, and he's the president of your organization

and i promised i wouldn't tell becky anything so here i am the market was going down significantly for eight or nine months when we spoke on june 17th at that time, virtually everyone you had on was saying negative thing, and the concern was universal about inflation and higher interest rates and oil prices, and i wanted to point out that every time everyone tries to predict macro, they're almost always wrong. going back to greenspan in 1996, when he said it was irrational exuberance and then the stock market doubled in the next four or five years. then predicting oil prices this summer he said oil price, and he's an investment banker about oil, and oil prices were 120. he said it would be 150 by summer, and now they're 90 and commodity prices, everyone's

worried about them everything across the board is down 30% or 40%. since the economy's slower, inventories are being restocked. hiring freezes are taking place, so the economy's definitely slower it's easy to get out of inflation, it's hard torer to g out of de-naflation. i can't tell you this was the bottom who knows. but the bottom line is that these are all really attractive prices, really attractive time, and we've been buying then, buying since and buying, you know, continuously so i was going to get to a few companies. tesla, spacex, the lululemon of health care. >> can i just, just continuing

that for just one second, i asked becky if i could just add to that, because we do talk about it a lot i don't mknow if you saw how may people were calling for new lows all along, from june 16 all the way along saying we're going below 3600 what do you think of the notion that we had a really good bounce much more than people thought, back up to 4200 or whatever you had said now it's being questioned again, and it almost makes me think, instead of that being a bull, a fake rally, a bull in an overall bear, i think now this might be a quick bear fakeout to are pe

people questioning i don't think we see 3600 again. >> you know, i started business in 1970. and 1982 began baron capital and at the time we had a small number of assets under management the dow jones was 800, and people were really upset about the market being, you know, inflation, finterest rates, that's when i started baron capital, 1982. but if you go back to world war i. 1918 q we had the spanish flu there was inflation, and we ended a war, and then the stock market, and then you had the roar roaring '20s 1949, the marshall mplan and the

stock market tripled following the vietnam war, high inflation, high interest rates and everything is short term elon musk says the people most likely to be successful are the people who have long termism, the people who think about long term, not now and are optimistic and then he says what you need are people who have infinite time margins, not today, not tomorrow, people are planting tr trees not necessarily because they're going to sit under them but other people will enjoy them avenu every single time there's been a panic, a war, a covid, you

know, economic uncertainty, the government steps in and devalues their currency they want to protect their citizenry, they want to get reelected, of course it's planned to make the debt worth less relative to the economy apartmennd the economy o faster the growth companies are our hedge against inflation. we're just investing in companies growing more than the economy. the economy gross 6% or 7% a year inflation, go back, look up on google go back as far as you can, and everything over my lifetime, 4%

or 5% a year not 2% the government will tell you it's 2%, but it's 4% or 5% everything doubles in price every 14 or 15 year. your house, your tuition, >> tuition doesn't matter anymore. i just don't want 1969 to 1982 there are periods, i started at merrill in '91 if you started in 1969 you might have been out of business in 1982 after 1974. >> if you go back to the time of jesus christ from 0. >> don't go back that far. >> from 0 to 1500 the economy doubled and the number of people doubled. think about this i'm at the south side of the temple walls, a money changer

and i try to raise money and go to becky and say rebecca, i think you should let me manage money for you and i can double your money >> i'm a woman 2,000 years ago, i had no money >> then you had the industrial revolution in 1800 and the last 50 year the growth is accelerating. it's going to accelerate further because you have the digitation. i am excited for my children my grandchildren >> that's fantastic. let's talk about the stocks you see now. you started on that road and we took you down a different path what are your favorite stocks you've been seeing in this

arenarcot arena. >> got to keep buying. two of the largest investments i've made in the past couple months are spacex where we added another $100 million and figs which you haven't heard much about, but you will soon it's the lululemon of health care and we invested about $100 million there. but i've invested across the board in travel. i love travel. it's been deferred for three years. nobody's traveled, and now the business is really taking off, and we're investing in hyatt, in vail, red rock red rock, they have, in las vegas, they didn't like to have casinos next to hospitals, next to schools, next to communities. and so they rewrote the legislation. and when they rewrote the legislation, the guy who owns all of the casino land that can be built in las vegas, other than on the strips in the strip you build a casino,

$3 billion, $4 billion, $5 billion, if you make a return you're very lucky. they're building in the community, $750 million for the people who fwwork in those casinos. that's where they go for movies and beer investing in park lots, so stripes in the parking lot instead of expensive rooms their investment return about $750 million they make 20% return and they got exclusivity, the only land. i like that. i like vail, which is taking data and making it better, you know, so they can attract people there, and they have these resorts that feed to them. hyatt, hyatt, they came to visit us, about, i don't know, a couple weeks ago and i love this guy, and he was explaining how upset he was that analysts are valuing his company at 11 times for the hotels that

he owns. he's selling these hotels because he's turning into a fee business and taking back management contracts the stock market is telling everyone it's worth 11 times they're selling them at 17 time, selling, getting cash for them and taking out management contracts the then he's got this other business, which is managing hotels. it's half price, and they keep buying stock, and i tell him i'm really busy right now. i can't give hem ideim ideas i love tesla we' been investing in tesla, made about $600 billion or $700 billion. i am so excited. next ten year, i think that tesla is going to be the largest company in the world and in the ten years after that,

i think it will be challenged by spacex, which could become a large company. i was telling you -- >> obviously another elon musk company, spacex. >> spacex, yes so we own about 1% of spacex we've got $1.2 billion invested. we've been investing three, four, five years i think we're going to make eight times the next ten year, eight or ten times and i think that the following ten years this can be a monster company. this is the internet for the entire world you saw what happened in ukraine, where zelenskyy called up elon musk and said hey, elon, i don't know what he calls him, elon or mr. musk we can't communicate with our troops can you help us. and in 48 hours, they have these satellites going around the earth right now, 4,000 there will be 4,000 this year.

on the way to 40,000 or 35,000 within ten years and this is the internet for the world. and that is one, one area, but then they have something tfor telecom companies. they've made it so you can reuse rockets over and over and over again. so before him, there was no reusable rockets they were using the same technology they have been since 1960s. now you can reuse these rockets. these two young women, under 40s from lululemon, they visited spacex a couple days ago and were telling me it is the coolest place they have ever seen in their life the coolest place they've ever seen in their life this is the internet for the entire world i'm really, sighted about that >> let me ask you about elon musk and how much he's been in the news lately, because you

have been one of his biggest boosters and long-time believer, long-time investor in his companies. you're also somebody who has agreed to do some financing, if that twitter deal goes through with elon musk i think you have $100 million that you have on the line that you'd be with financing for that are you in fave of the deal going through? are you wishing that you weren't somebody who was investing $100 million at this point? >> well, he made us $7 million so far and on a $380 million investment and when he explained why he thought that this was attractive, he was going on circumstances that he was led to believe, you know, he believes is now inaccurate facts. so i went to law school. and i went to law school, i see andrew making opinions about this all the time. i hear hedge funds all the time. but i went to law school and the first, i went on a

scholarship, worked in a patent office in the daytime. and the first night i'm in class, i took a contracts class with monroe friedman, and he hands out this book, big, thick contracts book, says read these cases and come back and we'll discuss them 100 people in the classroom. we go back the next day, and he says what do you think happened here, and everybody raises their hand, and he says no this is what happened. and he says this is what happened he asks the final and fewer hands still go up and he raises his hand, and then he says, no, this is what happened, the opposite so what my conclusion was, after watching this, and going to law school for three and a half years, i dropped out and i have one semester to go. i ran out of money and came to new york and, but, the conclusion i had, after going to law school was that there is no law

just the best lawyers always win. and every case, doesn't matter what you look at, every case is a tossup so i don't know who's going to win or not win f if he wins, there may be some settlement or if he's forced to buy it he would make it better than it was. but it's certainly not as valuable as he thought it was i would assume, but i have no, i have no inside knowledge, no insight as far as what, whether it's going to go through or whether it won't go through. but i'm happy to support him in almost everything he does. >> ron, it's andrew, and you're right. we have lots of opinions about this we debate it virtually every day. i wanted to know from you, on two fronts, it goes to the

qu questions becky was asking do you feel defrauded as an investor by twit center. >>. >> i am not commenting on twitter. i look at tesla, and everyone talks about competition and tesla, aren't they going to be, my wife said to me, ron, everybody's going have electric cars of course they're going to have electric cars. there wouldn't be any electric cars if not for elon musk, none. what he's doing that other people can't possibly do is that he's making his, he's investing thousand in a plant that makes a million cars a year, about $7 billion. avenu every time he's putting up one of these plants it's costing $7 billion. the gross profit per car is about $15,000. the basic, right now, selling something for 15, cost him 35. this is the most profitable company in the entire world.

avenue time he invests $7 billion, he -- >> you've made an extraordinary amount of money with elon, and maybe that of itself is a reason to support him in any circumstance, having said that, i believe it's $100 million of your investors' money. and we're looking at a situation where if he's forced to buy it, i think people believe, i don't know if you believe this or not, but the unaffected price of twitter today is probably half of what he paid. maybe that changes and maybe he's able to improve it, but how as an investor do you think about that >> if you lockok at tesla when started to buy it eight years ago, it was not anywhere near the price we paid if it wasn't going to grow in the future. period it was not worth a fraction of what we paid and the reason we bought it is we thought unlike most that it

would have this tremendous opportunity, and as a result of that, we thought it would be a different company in the future than it was at that moment i'm sure that's the case with twitter. who knows how it's going to be if elon musk ran it, it would be a ditfferent company. if it is what it is right now, who knows what it's going to be if he doesn't go through it hasn't been very well managed. that's for lusure as can you tell from a whistle-blower let me make one point about tesla. $15,000. $15 billion a year every time he makes a $7 million investment. they're saying, listen, we can't rely on, we made a terrible mistake in oil and we rely on other people to provide us with this energy.

let's not make the same mistake with chips, let's not make the same mistake with batteries. our guy happens to be a prime beneficiary of that. so far he made 20 times, i think he makes three or four or five times in the next ten years. in this bill that just passed, everyone is going to make $3500, $4,000 a car we're making $15,000 a car you could add another $3,000, $4,000 a car just because we're making batteries here. in addition to that, they do casting. my wife says mercedes is going to have. of course they are i drove a mercedes car last night.

i hated it an electric mercedes the battery's in the wrong place, the center of gravity isn't right. >> hey, ron. i am so sorry, they are talking us out we always want more with you we will he s see you again very soon ron baron, we always appreciate your time and look forward to he sa seeing you soon. >> wear pink it's a great color for you >> i will. thank you. nice backdrop by the way >> jackson hole symposium kicks off. >> hey, joe, good morning.

we interviewed kansas city fed presidents president esther george. i started off the interview asking her, how much further does the fed have to go? >> i think when we look at the economy today, steve, we still see imbalances imbalances between demand and supply and that's putting high inflation in play. so we still have high inflation. we saw some easing in the july numbers, but i think it remains broad based. there's more work to be done >> some of your colleagues have said they see sort of terminal rate of 375 to 4%. others have said above 4%. which camp do you put yourself in or neither? >> well, i think for this year, we do, we have three more meetings we know we still have more progress to make what i'm really looking for is to say when do we see the turning point in inflation when can we begin to see where the terminal rate might rest

i don't think we knowyet where that will have to settle out, but it will be higher than its today, for sure. >> how do you know it when you see? >> i think you'll see a pretty conv convincing deceleration in inflation, and for me i think i will be hearing it in the region number one is the tight labor market, difficulty finding people to work they've seen some easing on supply constraints but not enough that they can look ahead over the next year and think that still isn't going to be an issue for them >> is it three month a row of good numbers like we had in july, four months? a row in. >> ultimately, it's getting back to our target. so i think to see a convincing trend you'd at least want to see three consistent months of data to know where things are, but of course always doing ha in the context of what's going on in the rest of the world. >> the market gets obsessed on things like 50 or 75 do you want to weigh in on what

your preference would be for september? >> no. i think it's hard to explain, obviously, doing 75 in june and july sets a pace that i think the public is looking for. what changes that would cause you to step down and i think certainly at some point getting to a steadier, more sustainable pace is going to be important. so i think it's too soon to say, you know, what should we expect in september, because we have important data coming up >> could it be more than 75 in your mind or less than 50. >> after we saw july, the real question is, the july inflation numbers beginning of seeing other easing that will come in months to come but far from clear, given how broad based inflation is right nowright. we have done a lot of interest rate increase in a short a time. nothing i've seen in my time on

the fomc and i think we should still expect that some of that policy will work with a lag so we've seen it hit the housing market pretty quickly. but i think its full effects may not be seen for some time, as we move ahead with this expeditious path of rate increases is important to me. >> how do you expect it to cool. >> we've seen a little bit already. we've seen in the housing some cooling beginning at that point. i guess when i look at the inflation dynamics right now, though, we have a fund aa imbalance. we saw airfare, car rentals, those kinds of things but those

were pretty simple categories. >> does the unemployment rate need to rise to bring down inflation? >> the labor market is very tight. i expect to get loosening in that marngt you will see higher unemployment >> is it already a recession or will it and recession >> it's an interesting question that comes up. when i talk to contacts in my region would not be consistent with what you might hear during a recession. difficulty finding labor, wages rising, adding jobs every chance they get, so that dynamic is not clear yet, despite the fact that we had two quarters of negative gdp and added three million jobs so itsa's an unprecedented situation. >> what does esther george say >> i think what we see is demand is cooling, and i'm going to be watching that data very

carefully to see how much it brings this imbalance back to something to get inflation down. >> if it is a recession, how does that change policy? or does it >> well, i think there are always factors that are going to influence our policy that we can't anticipate for right now, given the dynamics we see in the economy, our charge is pretty clear, and that is to bring inflation back to our target. and that remains the focus, even as we watch what's going on around it. and right now that seems pretty clear on the path ahead. >> the title of the conference is constraints on the economy. can you give a preview of what kind of topics that leads to discussion >> over the past few decades, the issue has been, do we have enough demand? we had relatively low inflation. we now are focussing more on supply, and what a supply shock has done the inflation that's accompanied that the kinds of policies that have come along the past two year i think it's a good time to

revisit those constraints. >> if it is a world of more constraints, on the supply of labor, supply of goods, does that mean a world of higher federal funds rates? >> it could mean higher funds rates. right now we're looking at inflation and trying to decide, how sticky is inflation. thinking about i hhigher intere rates seems reasonable to me i hope this conference sheds some light on them >> the idea of higher interest rates for longer is something to discuss. more immediately, we have fed chair powell speaking tomorrow maybe some of the pressure came off of him because of the rise in rates, the federate outlook which has come up over the past week to be closer to where the fed itself is. we'll be able to talk about this more on a series of interviews we have. we have the philadelphia fed

president coming up later this morning as well as st. louis and sorry guys about not having the mountains this morning maybe later if the rain cools off and the sun comes up as expected >> i'm predicting the latter is a certainty. the former, i don't know who controls that. i don't know who controls that, steve. what do you think -- >> actually, di do it's a matter of inflation, and max wouldn't pay the higher price for the mountains this year >> can you give me the composite number of what the fed believes the inflation rate is? i'm still trying to figure what the terminal rate would need to be given current circumstances if there was no change what is it is it 4.5, 6, 7, 8 >> the fed uses that pce core number >> which is. >> in the 4.5% range.

>> so we still -- >> and so -- >> we still need five on the two-year that's a lot of pain left. >> joe, you are really bringing up a great issue, and i don't know how much time there is, but it's a great question as to determine the neutral rate, you use the current inflation rate or expected inflation rate you are right. at the current inflation rate, right, the rate right now is below. and you have to bring did above. but it's going to come down. you don't have to go that high is it a 5% or a 3% funds rate future, that's a big part of the debate >> steve, we always call this a junket for you, but we know what hard work this is. we appreciate everything you're doing. >> not me, becky, the crew getting getting this up in the rain. >> shout out to the crew

>> we got miller, we got rich. >> rich? >> we got the a-team out here. >> crystal, a-team >> all right coming up, we got to go. again, tiger woods, no, he's not coming up. but we're going to talk about tiger woods and rory mcilroy part of the big changes, coming to the pga tour to take on liv golf jay monahan will talk us to. and get the best of "squawk box" on our daily podcast as i said yesterday, it must be three hours long to get the best of "squawk box." flohree and a half. >>olw squawk pod on your favorite podcast app and listen anytime. stay tuned

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welcome back to "squawk box" this morning take a look at futures right now. right now you're looking at the dow up about 111 points. things have improved a little bit this week as we expect to hear more from j. powell and from so many fedexexperts and mr

of the board the pga tour raising the stakes in the face of surging competition from liv golf. jay monahan will join us for an exclusive interview next you do not want to miss this

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. welcome back to "squawk box. among today's top corporate stories today, salesforce under pressure its full-year forecast disappointing investors. could see mark benioff pointing to a weaker economic cycle spoke with jim cramer on "mad money" last night. >> everyone is trying to assess what's going on, how do they position themselves for this new economy. it's a new day for many companies, and i think when you look out at all these businesses, yes, they're all doing digital transformation this is still everyone's number one priority every digital transformation is still beginning and ending with the customer >> take a look at shares of salesforce this year looking at that stock down about 7% this morning. another big tech mover, though, snowflake on the other side, up sharply, reporting better than

expected quarterly revenue snowflake ceo saying the consumption-based model, a is proofi proving to be an advantage tesla told investors that the three for one move would provide more flexibility for its employees. tesla's split share five for one back in august of 2020 elon musk's company is the latest big cap company making the move, amazon and alphabet both made the move in recent months bed bath and beyond is reportedly holding exclusive talks with asset manager sixth street about roughly 400 million in new financing for the retailer shares of the stock, which is now a meme stock, up a little bit this morning, up less than

1% >> amazon is shutting down its telehealth service, amazon care, that launched in 2019 as a pilot program for employees in and around amazon's head quarterers in seattle it allows them to offer home or digital doctors visits at home amazon care operates virtual services nationwide and house calls to markets like los angeles, washington and dallas amazon says the service was n meenot meeting the needs of its customers. the pga tour is shooting back at rivals with new announcements, promising more money for player, elevated events this comes as many stars that participated in the liv tour that is financed by saudi

arabia jay, it's good to have you on. i could talk to you about this for an hour. i know you from various events and have actually played with you. my first question, are you able to look at this whole situation now in a detached, calm manner i think it would have probably caused some consternation and some emotion initially, for you. where are you with this whole situation? at this point, jay okay, i'm not, we. >> we're not hearing you >> we went to jay late trying to get everything squared away. and i'm not sure that we have done that yet. so we're going to take a break and go back and try to work on the gremlins that we have. we will be right back. and hopefully have plenty of time you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire

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all right, wi let's try thi again. how are you. are you there? can you hear us? >> i'm here good to be here. >> i'm thinking about all the different ramifications. have you ever seen any sport have to deal with something like this given the economic situation we're talking about? where i'm not sure they ever even need to make money. how do you compete against that? and my first question, whether can you talk about this in a calm manner at this point, or whether there's still a lot of emotions swirling around where are you, jay >> first of all, i'm not aware, and where i am, joe, becky and andrew is we're here at the tour championship to get the top 30 players from our season who will be competing over the next four days we're coming off really the best financial year in the history of the pga tour and i think, like every other

company, you focus on the things that you control and, you know, you look at the pga tour, and you look at our history, and this organization is all about presenting the ultimate competitive platform for the best players in the world. and for fans around the world. and we've had a remarkable year on that front with more and more stars emerging we made some announcements yesterday that only enhanced that going forward, and this game is all about the trophy that you're looking at, the titles that these guys are seeking forth, the history they're trying to make, and that's the competitive fabric of the pga tour has never been stronger, and you couple that with all we stand for. the impact of this organization. $42 million raised, we're impacting people and communities every single day, and it's that combination of the competitive platform and yes, ma'am pact

t impact that's led to this record year. >> that's a great strength you have all that history but you've probably heard that, hey, competition we always hear it in cable even cable businesses. competition's great, great for everybody. normally, competition involves other entities with the same financial concerns and constraints that you have. when someone comes along that doesn't even need to turn a profit and just has a bottomless pit of financing and can talk to, i don't know, golfers that may not win a major again, can you say no to $200 million if you're 52 years old? it just doesn't seem, i can't believe we have to deal, did you have any notion that this was coming >> well, certainly had a notion that it was coming and i would just go back to the comments i just made

you hoolook at, look at who's w us, joe. you got the top 20 players in the world. the best players in the world are committed to competition, to pure competition there's not an interest in competing in performing in exhibition matches this is all about competing at the highest level. avenue every player out here grew up trying to get to this spot grew up trying to create a legacy when you're dealing with a non-economic actor, you have to focus on the things that you control, the essence and the soul of the organization, and it comes back to that is correct again, that combination of a combination of a competitive atmosphere how they can build their own brands and businesses and that's what you saw yesterday with the

announcement of tomorrow golf, partnering with rory and top players that will be announced at a later date. >> a lot of them do involve money. money talks, everything else, some word they use everything else walks. some of the new initiatives do involve compensation and maybe for players that are not tiger woods or rory mcilroy. i guess what i would ask you, should these things have been done before you were forced to do it? was it, was the tour too complacent in just having sort of a monopoly on the biggest names in the business? and was there, i don't know, i've heard some people, i guess phil has gripped in the past that with all the sport has given him, he still felt like he wasn't, you know, free or, as free as he could be to earn a living i mean, were there things you needed that should have been -- that were you forced to

do in. >> do >> we're running a business. and i was with you when i announced the deals that sustain us through 2030. we've got $6 billion in media rights revenue $4 billion in sponsorship revenue. our partners are behind this tour and this organization as we came into 2022, we made a number of changes to elevate our purses at our top events and all of our events, on the pga tour as well as the corn ferry tour, the pipeline to the pga tour, and have invested in '22 we made announcement this is summer to elevate eight events to purse levels of $20 million to take our fedex cup playoffs, coming back to my comments on the competitive spirit, reduce those sizes. and what we announced yesterday, adding additional four elevated

events, expanding our player impact program, creating a minimum salary for our non-exempt, for exempt players and for rookies coming onto the pga tour those are all steps that are enabled by the work that was done several years ago and the revenue streams that we have going forward, again, acting as, you know, as a true business >> how long are most of the contracts of some of the guys that have signed on with liv i think some go out till the end of 2023. are they longer than that? and is there a way back into the fold of the pga tour, if their ithis is, are they gone forever? >> i'm not aware of their contracts. for me, joe, i look at our players, and our players are committed to the pga tour p

perpetually. i respect that players have a choice, and players that made the choice to leave have made their choice, and the players that have decide to stay here are the once i'm so proud of that's why i'm going to continue to push this model forward in a way that continues to put the best players forward in front of fans around the world in more ix sighting ways in the future. >> andrew, you're going to grimace. if you want to ask something, ask something. >> as it relates to the saudi piece, we're always talking about businesses and their relationships with saudi arabia, whether we should be troubled by that, whether we shouldn't be troubled by that, the united states is clearly, as a country, at least the white house, trying to re-establish a relationship with saudi how much should that be part of the conversation here or not

>> well, i think it has been a significant part of the conversation and it's been a significant part of the conversation because what's happening here is unprecedented. you know, you have a foreign government that's investing in and trying to take over a sport. which is much different than businesses that are doing business in that country when you are joining that league, you are playing for the kingdom of saudi arabia. and i think that that's an important distinction. and it has certainly been talked about at length, and i would expect it would continue to be >> is there any type of detante that can be reached in the future, jay? and i think andrew's point was more than just talking about maybe a sovereign fund or a foreign government, we're talking about the saudi foreign government with all the overhang from the khashoggi murder and everything else.

so there's a lot that goes in here could you ever see any type of alliance we've even heard maybe there might be some type of business relationship between the pga tour and liv in the future is that possible >> joe, i mean, i think you saw the steps that we have taken really over the last year. and we're going to continue to focus on our business model, which is very different from theirs again, we are the ultimate competitive platform for the top players in the world we not a team-based league with 48 players we a system builds and brings the best players forward to make the core of our season, january to august even stronger. we've got two different business models, and we feel like in the long run with the strength that we have with the great partners

hi behind us, that needs to be celebrated we going to fight every single day to make sure that continues to be there not only for the best players in the world but for our growing fan base around the world. >> we started talking about bobby jones and jack nicklaus and tiger woods. that's pretty strong that's a pretty strong argument right there, i don't know, i don't even know the name of some of the liv events, but, you know, we all know what the masters is and we all know what the tour championship is and the players and everything else. so good luck i can remember once, years ago, people said, you know, mci, look at them! they're just eating at&t's lunch. bernie evers, if it's a non-economic endeavor, it just doesn't seem like a fair playing field for competition, but you've got a lot of straights on your side that i think, it's just me, but i think you probably prevail in the end. thanks for coming on today, jay,

appreciate it. >> thank you so much >> go ahead in. >> enjoy the tour championship i know you'll be watching, all of you >> you knowly. wishing zalatoris wasn't hurt, but nbc sporkts by the way, does provide exclusive coverage at eastlake golf club in atlanta, and is that today? today at 1:00 eastern time on the golf channel and throughout the weekend across nbc and peacock. that's where you will find it. andrew >> okay. let's take a quick check on markets, joe, show you where things stand on this thursday morning. dow up about 122 points. you look at the nasdaq up 101 points the s&p up about 27 points also show you treasury yields. this has been moving around a little bit as well you're looking right now as 3.104 on the ten-year. and markets have been jittery ahead of the symposium that

kicks off in jackson hole. here's kansas city fed president, esther george >> we see balances between demand and supply putting high inflation in play. we saw some easing in the july numbers, but i think it remains broad based. so there's more work to be done. >> joining us to discuss the markets and the fed is asheesh shaw what do you think j. powell hey have to say about this on friday >> so i think there's going to be a balanced message that we hear on friday coming out of chair powell and i think it's going to be a mix of we still have work to do. this is a long fight, but we've, we're making progress, and we're seeing that in the near-term

number we're going to have to monitor the pace of that progress and how it develops over the coming months >> and so in terms of how you're positioning your clients and when people are calling, i'm sure they're calling you today ahead of tomorrow, what did you want to be doing or what are you telling them to be doing >> so we think the market is kind of overpriced in front of the fed. we think the rates market has, you know, is fearing tomorrow and hawkish speak. and i think it's going to be more balanced. on the margin, i think, can you generate return, short return but it's a different market. not a broad-based bull market. there are risks here, and we're going to be very data dependent. so there's going to be volatility make sure you're buying when there's fear in the market, and

don't fall into the trap of buying when there's fomo so don't be afraid of selling into fomo. and i think that, you know, a lot of the hard work has been done by the fed in messaging a lot just priced into the curve. and the easiest thing can you do here is to actually get your money invested because what we're seeing is that most banks are not offering customers any yield. and you can get yield in the markets. getting your money out of a low-yielding bank account where you're still earning zero and getting it into the market where now suddenly you can earn 2%, 2.5%, 3% in the coming months is going to be a big deal >> well, where do you stand, if you look at what mark benioff said last night for example, there is real concern, even in tech land, which is obviously been sort of the face of growth for such a long time, he's still

bullish, long, long term but it sounds like shorter term there's some real concerns >> yeah, so i think you have to go back to being a disciplined investor here. money's been easy, and so people have been buying growth at any price. and i think we're going back to basics where companies that can develop growth, that's internally funded, that they don't have to go out and raise money to develop, companies that generate free cash flow, and companies that know how to execute in volatile environments or changing environments, that's where you're going to see value develop and where investors are going to be rewarded and that's where our team is really focused >> you want to name some names >> i can't name some names but let me give you a couple themes i'll take the consumer space where you've seen a number of companies particularly that served broader-based investors get hit with excess inventory.

we see really interesting trends there where companies, let's say the online companies are actually starting to snap back and see demand reassert itself coming out of the pandemic the other thing you're seeing is that the high-end consiumer is trading down that's going to benefit the off-price companies as they benefit from excess inventory on one hand, but at the same time, high-end consumers looking for b bargains when we come back, peloton pos posting a decline in rievenue

jon fortt will join us with the multiple stories at play

with the economy slower, inventories are being de-stocked hiring freezes are taking place. so the economy's definitely

slower it's easy to get out of inflation. it's impossible to get out of deflation. >> that was ron baron joining us by the way, he said okay, the economy is going to slow that's how inflation shows this is all planned. nothing surprised about any of it but he also said this has been a generational time for buying stocks he said that back on june 17th, just after the june 16th low he says that continues to be the case today, that you haven't missed your opportunity. the dow futures are indicated up by about 108 points. s&p futures up by 26, the nasdaq up by about 100 points peloton on a wild ride this week down sharply this morning by about 15%. that came after peloton came out with earnings. the call begins in about 15 minutes. outsourcing manufacturing and delivery and now selling some products on amazon the stock was up sharply yesterday because of the amazon

news is this a situation where the embrace of amazon is a wise move for direct-to-consumer company john jon fortt is here to weigh in >> what a difference a day makes. ye yes, it is a smart move. peloton needed to face reality amazon has a giant pool of likely buyers searching for peloton on the site, not finding any about a half million times a month. right at the time when peloton needs to save money on marketing. it needs to generate cash by selling hardware quickly and efficiently with few returns if it's going to survive without laying off more employees. amazon will provide new demand and back peloton up with sq

customer service but the concern is overblown people are already searching for pelotons on amazon and not finding them and buying something else while there's some risk, it's a lower risk once a customer signs up, they can make this work >> it will probably provide a demand boost in the near term. >> on the other hand, partnering up with amazon is not a good idea it's a band d-aid on an infectin and give peloton less urgency to focus on the festering problems. it's not that they built too many bikes and they're sitting

in warehouses. there are quality problems bikes were return the in such bad shape that they can't be resold they're scrapped some reports suggest peloton has built and sold bikes that have corrosion. peloton calls these one-time items, but my experience covering hardware tells me when you have this many shortcomings, it's the equivalent of termites. peloton probably needs to re-engineer its bikes. otherwise it risks either making too much product that doesn't pass quality check, which is bad or continuing to sell products which disappointed customers return which is worse they will give a powerful rival insight into just how bad peloton's problems are allowing amazon to build a peloton killer or watch the company try to bail out of ship with leaky buckets >> that was my question when i saw this yesterday

the news with amazon can you think of another company that has got nooten into bed wi amazon and has been just as successful as amazon has been in the partnership? >> that's a tough one. i can think of some that have gone out nike got in and got out and is doing just fine on its own yes, peloton's in this position where it needs the cash flow, but it better be careful >> yeah, either way, this week we are two years in with "on the other hand." and these companies just give you plenty to argue about with yourself, which we love. >> yeah, you know and i try to write these like far in advance, and i can't do it, right, like i didn't know what i was going to talk about today until yesterday, when this amazon news came out, and then, you know, with the earnings this morning, it just gets even more interesting. >> it's perfect. news on the spot and analysis on the spot and arguing with yourself on the spot thank you u john >> thank, becky. coming up this morning,

stocks to watch, but breaking economic data on the nation's employment picture as well, and a reminder, you can get the best of the "squawk box" in our daily podcast. follow squawk pod on yurp favorite podcast app and listen anytime. we'll be right back.

welcome back to "squawk box. take a look at the future this is morning ahead of the open the dow up about 76 points right

now. the nasdaq up about 80 point, and the s&p powering back. amazon is shutting down its telehealth service it lets business customers offer at-home doctor services. it has house calls in markets such as los angeles, washington and dallas amazon says the service wasn't meeting the needs, though, of its customers. on the back of this, telehealth share trading higher including teleadoc and amwell. >> a stock to watch. dollar tree cutting its earnings forecast due to price-related

investments. at its family dollar store, they did report bert tter than expecd profit and dollar general, same-store sales rose the stock had been higher in the premarket but dipped negative after rival dollar tree cut its forecast and abercrombie & fitch cut its full-year sales forecast citing the impact of inflation. up next we do have breaking economic news. we've got jobless claims and gdp. we'll break it all down for you. in the meantime, take a look at what's been happening in the treasury market. the ten-year up above 3.1%, 3.108% and treasury yields have been moving higher all week, probably

in anticipation of what we're going to hear from fed chief j. powell tomorrow in jackson hole. the rhetoric has been strong and hawkish. we'll hear a lot more of it today from jackson hole. stay tuned you're watching "squawk box," and this is cnbc

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just a few minutes away from a revision to gdp and weekly jobless claims the futures are up, showing some of the, not the best levels of the session, but green, up about 80 points or so on the dow can y you can see the nasdaq indicated up 80. the dow being efaffected somewh by weakness in the shares of salesforce ahead of disappointing guidance it's down 13 points. so you can do the math on how much that's taking out of the dow. take a look at the ten-year note ten-year note was right around 3% or so for most of the week. can you see right now, 3.11, moving up a little we do have rick santelli standing by at the cme in chicago.

steve liesman is at the fed symposium in jackson hole, wyoming. rick, are you excited? steve's already out there, you're going to have to watch from afar. you guys want to talk at all >> well, i'm excited i think that coming off of basically half century best levels with regard to employment at a time where we're at four decade highs on inflation, presents a very interesting series of events, i think, for them to all deal with, and i'm sure steve is going to try to dig to the bottom. i think my biggest issue continues to be the idea that the fed cannot possibly ease up on the rhetoric despite what they may believe behind closed doors. i'm not saying the fed has to pivot in 2023, as a matter of fact, the recent steepening of the yield curve is what i would talk most about if i was steve to the fed officials

because maybe, and i'm not saying it does yet, it could be reversing flattening, but maybe it means that we're starting to price in better growth versus recession, with long end rates what do you think, steve >> i think you got that right, rick and i think it's also important to point out that when you have these higher yields, also higher funds rates expectations, it takes a little bit of pressure off powell tomorrow to be quite so hawkish, but you're 100% right, he can't afford to let up right now. and i don't think what the fed thinks behind closed doors is different from what they're saying publicly. they're pretty square on the inflation fight, tried to pin esther esther george down on how far she thinks they're willing to go and there's the thing joe brought up which is really important. what's the right neutral rate, relative to current inflation or

relative to expectation for inflation? if it's expectation you might get away with 3.5%, 4% if it's the current rate -- >> market believes 3.5%. look at the mid june yields. they're basically 3.5% >> right, going up to 380 and tweaking back down >> rick, you got the numbers now? >> the numbers should be coming out momentarily. steve, here we go. all right, 243,000 on initial jobless claims definitely better than expected, about 10,000 better than expected at least until we see a revision, it's 7,000 less than 250,000 in the rear view mirror. 243,000 would be the best level since the week of july 22nd. on continuing claim, 1,415,000 and see kquencely sequencely be.

and july 15 was under 1.4 million. now let's get to gdp our second look at second quarter gives back a tenth down .6 instead. that's a tenth less with regard to the negative aspects of the contraction with regard to that quarter, and it follows, of course, minus .9 in the previous quarter. the consumption number ramped up this is really unusual the economists had it right. it ramped up from 1% to 1.5. that's a nice jump now the price index going wrong way. 8.9% on the price index. 8.9% now that is a new high

watermark. 8.7 from june was the old high watermark. that is the highest level since 1981 and it could be for a while, because 1981 goes all the way up to 11% if we look at the quarter over quarter personal consumption expenditure, core, also a fafrlts of the fed, it remained at 4.4%, and 4.4% of course is well below the high watermark which was 6.1 in june, the second quarter of last year. so the big news is the price index jumped up and claims are well behaved another issue to be brought up at the symposium, the continuing claims being so well behaved, even though initial claims finally are coming back down again. gives some people confidence that the initial claims are short-lived, and that's brought through by how continuing claims have been more well behaved, probably because there's so many

more job openings than people to fill them. joe, back to you >> all right, thanks, rick, steve? >> yeah, lots to unpack here, joe. let me start with what's happening with jobs. it's a process i kind of expected the journal wrote a story about it with the tight labor market the way it is we hear a lot of headlines about companies laying off workers. what i think is happening is you have these people laid off they spend a little bit of time in jobless claims and get rehired. it seems to and very good market, i hate to say this, in twoi which to lose your job, because it make it is easy to find one certainly, it's not alarming at this moment, and it keeps along with that theme that while other thing may be weakening in the economy the jobs market remains tight and strong and in a sense, a problem for the federal reserve. on the gdp number it gets back to the debate of is this or is

it not a recession still negative, but the consumption number, which rick said was revised higher is hard to be saying we're nain a recession when we have numbers running the way they've been running. i think the market may have taken its eye off the ball i think the concern is a recession down the road. esther george talked about there's a lot of tightening in the system that may not have taken effect yet and we had a guest who said the second half will be better a lot to chew on i forgot to mention andy and thomas part of our crew here in jackson hole that was an oversight. just as vital as the rest of the a-team that they are a part of. >> yeah. do not leave people out. did either one of you gentlemen. >> no.

>> i can't believe you agree with this piece in the op ed volker is like in the third stage of sainthood in terms of mauchbt policy we're sure that raising rates kills inflation, aren't we anything you get out of that article, rick, about how maybe the economy isn't unstable in maybe it's the fed that make it is unstable? >> i agree with you, joe, we know that's been your mantra for a while. as much as we talk about all the fed's tools, there really isn't a variety of tools there's basically a few blunt instruments. and by squashing demand, i'm mott not so sure that we're actually doing what mission accomplished should entail. do you really believe that as the central banking bible is going to get revised in any substantial way in i d

i don't think so and even if they believe this is the way to do it, there are better ways to do it they are not going to bring this up now it is not going to be a new chapter in any fed playbook anytime soon >> rick, you ignorant? >> i didn't say any of that. just to be clear it's just a small point i disagree on. having spoke ton n to a bunch o these people who will be part of this conference, i think there is going to be some discussion about how the feds screwed up the tail end of the response to the pandemic, and it may be a discussion about how it screwed up the response to the pandemic. in this regard, i mean, it probably acted correctly in responding to a concern about the fall of demand, and when it did $120 billion of stimulus every month and kept it in place and didn't respond quickly enough to the inflation problems such that maybe the inflation problem is worse now, i think

that's going to be part of the discussion >> oh, steve, i think joe and i are way beyond what you're discussing we're way beyond that. that's little details. i'm talking about big details, with regard to just the general notion of how volker and interest rate policies have morphed over the years the vietnam war created the typ of hyperinflation that volker needed to cure and the anomaly was the high inflation until we came to our fed. allan greenspan decided having recessions is not a good idea. and everything we've done to squash out recessions has made the economy so much more knee jerky, and i think we're going to have many more boom-bust cycles and all of those because of the fed >> hold on, steve. what i'm disappointed is, bad government policy causes the fed to have to finance the bad government policy, and now we

all have to pay with the recession. >> enable, enable. >> and enables them. why do i now, and all the workers in the country and everybody who's trying to live the best life they can, now we all got to have a recession just because of crappy government policies that's frustrating, steve, see what i mean? >> well said >> i do, but what i think when you talk about moving from the details to the 30,000 foot level, are the failures episodic or are they system snicic what troubles me is he didn't look over his shoulder he just said, you know what, it's going to be transitory. we're going to come back he didn't really give -- >> i heard a "oh, come on. >> what did i say, rick? >> bernanke and yellin are your high watermark here?

come on. >> certainly their inflation record is the better high watermark. >> they controlled something that didn't exist because of globalization, which isn't going to exist, but is going to make inflation higher, and the fed can't do a darn thing about it >> guys, we have to end this argument so we can get to another argument >> rick is going to have to respond. if there is less globalization, the fed is going to have to respond. that means the world of a high are funds rate >> they can't spend, they can't respond! globalization, globalization in many ways is a really crummy idea think energy policy. think putting ourselves in bed -- >> really? >> -- with countries and economies -- >> really? come on. >> i'm glad it's your treaty and if prices need to be higher, so be it >> you want to close the borders. rick, i lived in a country that

closed the borders it was called the soviet union >> we're going to break. >> i think offshore something a crappy idea. >> they're not going to listen in >> it's not my fault. >> it is entirely your fault i watched you do this. when we come back, we will have jim cramer live, and we'll see right now on those charts, there we go. auto desk is leading the way netapp up by 8.5%. this is "squawk box" and cnbc.

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welcome back to "squawk box," everybody. president biden has announced that he is going to be canceling $10,000 of student loan debt for braurs earning less than $125,000 a year. joining us to discuss how this will impact you and your taxes is will mcbride, a fellow in economics, and andre perry, a senior fellow at the brookings institution. will, we'll start with you we're saying this is canceling student debt, but it's not it's taking those debts and having other taxpayers pay for

them how would you describe this and what you think about it all? >> right, will, this is a big move, this is a lot of money we're talking about. we're talking rough guess, more than 350 billion in terms of hit to the federal deficit upwards of 500 billion these are ballpark figures we don't have an official estimate from the cbo or anyone else hopefully we will very soon. but it's clear this is a very expensive policy for instance, far more deficit impact than the inflation reduction act, which was just passe passed last week which was ostensibly going to reduce the debt by 3 billion over ten year. this is a lot of money and a lot of money coming out and getting dumped on the economy at a time when we don't need it, precisely the kind of policy that caused the inflation crisis we're in by most accounts.

the american rescue plan 1.9 trillion last year and the c.a.r.e.s act before that and several other programs amounted to about 6 trillion in relief and stimulus p dumped on the economy, this is by moist account what is caused our inflation crisis and now the very aggressive moves by the federal reserve to try to get that inflation under control so here we are repeating the same type of policy. so i think it's very dangerous, and i'm afraid it's going to make our inflation crisis worse. >> andre, i know this is a move that's popular, particularly with some young people who do have excessive student loans, but just looking at it, the power of the purse is supposed to ride with congress. does the president even have the authority to do this under executive order, realizing that, you know, the next president may be somebody you disagree with on some of these things do you want to seat e the powerf

executive orders taken to this degree >> well, doii do want the presin and the administration to have the power over aid but biden believes that he does have that power. i want to get to this point of the problem. the real threat to inflation has been the enormous tuition increases that higher ed has enacted over the last 30er yoos. this plan does not address that. however, it does provide much-needed relief to people burdened by that the reason why many people are suffering because of the pandemic is because they can't acquire wealth, because they're taking on too much debt. so government can't stop solving structural problems in the midst

of a nationn inflationary perio. if we don't fall for these structural problems now, they'll make it, when the next inevitable inflationary period comes, it will be even worse so i mean, because that thinking that you can't address structural problems because it will be inflationary, why not cancel medicaid and medicare during their is time? we wouldn't. so we have to have the business of creating good government to get us out of these situations >> andre, i agree with your point that we should be addressing this larger structural problem, that college tuition has far outrun inflationary pressure this is this country for decades at this point. my additional concern would be that because this doesn't address it, it kind of allows that to continue it does not make any of these higher education institutions take a look at themselves and say wait a minute, maybe we need to address this and that we're

not charging more than somebody can reasonably earn. it takes all of the burden off those higher education institutions >> oh, yeah, and i would agree with that. i think the hope is that one domino will fall to lead to another. at some point, we need a free college option just, we don't require kids in elementary or secondary school to go, to take out a loan to go to school. if college is that basic as an elementary or secondary education, then we have to have a free public option that goes beyond community college, community colleges are moving in that direction anyway. but that's the ultimate solution what i think this is doing is providing immediate, acute relief for a, for a number of people who are burdened by the problem. and that's a political choice that biden is making >> well, i'll give you "the last word" he the las

word here. >> i'd love to have college be free, i'd love to have everything be free no one questions that, but someone has to pay for college, someone has to pay salaries of professor, et cetera, and the question is who. so you're proposing, you know, having the federal government pay for it, which means taxpayers pay for it i agree this policy goes in that direction, it's shifting the burden to taxpayers. and it's quite a large burden as what we're seeing here this move alone, this debt forgiveness move, again is costing somewhere around $500 billion. that's $500 billion laid on the taxpayers of this country. that doesn't sound very fair as many of those taxpayers paid off their student loans, worked, work the worked their way through those

loans or chose to do something other than college, got a job and paid their taxes so i think it's an incredibly unfair policy. there's other ways to go about reducing the cost of tuition it is about for their incredible increase in the cost of tuition. i think this policy will make that worse i mean, as you encourage more students to go to college through this policy, essentially having them treat their loans as potentially grants, this will encourage more and more students to stay in college longer and go for more degrees, more classes why not? i was in college it was a lot of fun. stay in college for years and years if it's free so i think it's -- you know, and as that happens, the colleges and universities will simply raise the price of tuition because they can so, i think this is not going to work in that regard either it's going to make it worse.

>> thank you both. we appreciate your time today. >> all right thank you. >> down to the new york stock exchange this morning where jim cramer joins us now. so much to talk about, jim you can weigh in on student debt if you like. i'd love to know your thoughts about your interview with mark bentioff maybe a little bit of peloton. can we squeeze all three into two minutes? >> absolutely. i think it gets dollar tree down maybe that's the way to take advantage of that. family dollar is a problem for when it comes to student loans because those stores are being used by younger people of that era, so to speak i do think that mark kept using the term measure, meaning people used to spend a lot of money on this stuff easily and now they have to run it up the flagpole and that takes too long. that is not a good sign. peloton, i like the way that barry handled what is an immense

change to the cargo ship as he calls it where all hands are on deck he's brought in some real pros including people who worked with him in netflix, using amazon, rationalizing the operation. the stock is down reflects too much enthusiasm over the amazon deal the thing is getting interesting. informant saluteman, barry mccarthy, they are the two toughest guys. he may have added the best quarter of the tech season it was an extraordinary call >> then finally, given how crazy this week has been, the shift in sentiment and everything else, come friday afternoon after jay powell has spoken at 10:00 a.m. eastern time tomorrow, the market will be up or down? >> i think jay is a measured individual and the market will be flat. >> flat. >> is it disrespectful to call him jay? is it disrespectful.

i think there's a familiarity to it at this point i don't know chairman powell. >> it's not worth it it's not really -- i find it somewhat unsettling and i apologize to jay chairman powell. >> chairman powell it's true. i don't know why we've got -- >> why don't we just call him sunshine i think sunshine is doing a good job. i'm going back to chairman powell >> mr. cramer, dr. cramer, we appreciate it. thank you, sir >> thank you >> on "mad money" tonight, jim will be talking to the ceos of williams-sonoma and workday. make sure you get jim nit.togh a. what do you mean? these straps are mind-blowing! they collect hundreds of data 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.

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welcome back to "squawk box. the dow up 38 points a lot of reasons it's not up more salesforce, we once again figured out was a dow component. the managing partner and portfolio manager at dcla and cnbc contributor joins us now.

trying to do what you do as well as you can for your clients, do you need to have an opinion about whether the s&p tests those lows in june or whether this is a bear market rally or a head fake for the bulls? do you need to know that do you focus on that >> i don't that's more technical. i mean, it is part of the formula to say, hey, how fast did the market go down, how fast did it go up, but at the end of the day it will be fundamentals that matter. what are earnings estimates going to be at the specific companies we own and today looks like, you know, some of these estimates are going to have to come down so, some of the stocks, you know, in some of the sectors have reflected it -- the financial, the industrials but you still haven't seen this ta in some of the other sectors. there's a bifurcation in this market right now, and given where rates are, if rates keep on going up, which we expect, i think you'll see more estimates come down pretty drastically >> you're basically over time

can add to positions in industries or names that you think at some point will flourish and what are those >> yeah. so, for example, look at a company like ge, completely out of favor most people don't want to look at it because they're pabt to break up into aerospace, renewables, and health care. the sum of the parts is greater than the whole the aerospace is bigger than what the company is. there's a stock that trades at a multiple that we like. electric trades at 15 times earnings, growing 7% a year with almost a 5% dividend yield those are kind of under the radar. people don't want to touch them. we like those types of stocks, especially now seeing the volatility go into friday. what is chairman powell going to say. everybody expects rates to go up i think at that point with more market volatility, you add to positions and new positions for client who is don't have it. >> any of the great tech names

that are now on sale still from some of their best levels during the andemic, do you put client in any of those, any that you'd be doing right now >> yeah. i would use starter positions. i think google as a great cash flow machine if you're going value, you know, meta has some great opportunities, but that will be really volatile so that depends on the risk profile of the client i think those are two kind of interesting plays. i think amazon is really interesting at these levels because they're getting to a lot of other businesses and really not focus that much on just the retail but with aws and a bunch of other businesses. so, there is value there, but i think the opportunity is going to be in a lot of other specific stocks as well because these are a large part of the index. i think if you can look and get value, whether it's in the financials or the industrials, some of the consumer staples and out-of-favor stocks, that will be the next couple years >> sounds like a lot of work

that's why you have clients, i think. you do that for us we have to go. good to have you on. >> thanks, jeff. >> see ya. andrew >> what a show, guys what a show. make sure you join us tomorrow we will see what jay powell has to say and a lot more as the week winds down. "squawk box" -- i should say "squawk on the street" begins next >> chairman powell chairman powell. >> good thursday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber going to be a busy one futures lost steam on this revised q2 gdp price index, now 8.9% fedspeak has begun at jackson hole nvidia opens lower on earnings we begin with the fed. esther george and raphael bostick signaling. >> peloton share