house is saying about bidenomics. trouble mounts on travel operations details ahead. plus, it's a big day for banks. we'll get the latest fed stress test results this wednesday, june 28th, 2023, and "squawk box" begins right now. ♪ good morning welcome to "squawk box" on cnbc. we're line from the time scare market site in times square. i'm becky quick along with joe kernen andrew ross sorkin will join us later. you'll see at this point red

arrows the dow is up by 12 points nasdaq off by 61, the s&p 500 by 7. s&p 500 and the nasdaq doing pretty well yesterday. if you want to take a look at what's been happening in the treasury market right now it looks like the 10-year is at 3.7, the 2 y-year at 2.7. severe storms and staffing issues kicked off a rocky start to summer. yesterday flightaware said more than 2,700 flights were canceled nearly 650 flights scheduled for today have already been canceled including 300 by united.

the department of transportation warned last week air traffic control staffing short falls put operations at risk and in a note viewed by cnbc, scott kirby told staff on monday that in his words, the faa, frankly, failed us this weekend, but we have seen some weather, but politics are rolling. >> anyone who had to be rescheduled has been rescheduled into a business schedule already. i talked to people whose flight was canceled sunday and they were booked for thursday. >> i have family members with three-hour delays, four-hour delays. >> yeah. >> and i had dogs that were just petrified and basically sitting in my lap, and they're german shepherds. >> a lot of thunderstorms. >> they don't like that thunder

one bit. they have no idea. i'm not thrilled with it either. >> i like it it seems cozy, when you're inside. >> it is >> when you're asleep. >> see, they need to go outside for a lot of reasons. >> i can understand -- >> for a lot of reasons. i'm not sure whether to bring an umbrella or just let them bring in all the -- it's difficult when you have three or four animals running around. >> pack. >> a pack. definitely have a pack. president biden is launching a campaign to take credit for the nation's post pandemic resurgence calling it bidenomics we'll hear new messaging in a speech by the president today, but ahead of it, the white house speaking to media on growing the economy from the middle out and bottom out according to the white house, the three key pillars are making smart investments in america, empowering americans to grow the middle class and to help lower costs and help on trow pre nears

and small businesses survive but it's written, the record is overshadowed when his rescue plan pumped 1$1.9 trillion of demand. >> it's a good piece that greg wrote. it's a -- >> it's not an op-ed. >> he's an economics reporter. >> he definitely has highlighted both sides of things over the years, but he states some facts. taking credit for the rebound after covid, as he points out, biden took over in january of 2021 the last six months of 2020, payroll growth averaged 800,000 a month fur six months it was already happening and

throwing all that additional stimulus, it probably did make our recovery stronger than the rest of the world. >> it definitely did, but it also caused inflation. >> it also caused inflation and probably wasn't needed at that point. as far as the novel ideal of growing the middle class, no one comes in and says aisle going to build the upper class a lot higher it's about old-fashioned stimulus >> i will say different parties have different takes if you want to do trickle-down economics -- >> these ooh really in my view the only thing that works is growing -- >> nobody comes in saying we want to destroy the middle

class. >> they come in saying i ooh p going to divide a smaller pie up that's exactly what obama said the reason why bidenomics gets no love from voters and the reason we've been talking about it's a hard sell, the last pew polls 35rks% biden approval. if you ask about economic approval, it's below 40. i hate when we hear that voters -- or citizens just aren't smart enough to know how good they have it and that drives me nuts when i hear that well, if we actually show them the fact whoofs ws of what we'r, they should feel more positive

people know exactly how they feel if they're living paycheck to paycheck and ground beef is now $9.50 a point, i know exactly how they're feeling and exactly how they're getting by and how they feel about their economic future. no lecturing from a politician is going to get them to say, you know what? i was wrong about the president. >> the president is expected to speak today at 1:00 p.m. eastern time that will be happening in chicago. we'll be speaking with the economic adviser heather boushey. the biden administration is considering new curbs on exports of chips for artificial intelligence specifically to china. the commerce department could unveil the updated controls as early as next month and it could include defining rules and expanding measures that cut off the advancement of chips shares of the two companies as

well as other chipmakers falling ahead of the open. >> remember when they first made those restrictions and put them on, nvidia shares dropped pretty significantly. the ai resurgence has brought the shares back up, over 400 buck whence they're off by a quarter percent. >> is it still in the trillions? >> i'd have to look that up. on today's agenda. the federal reserve will release the results of the latest bank stress tests it will determine in part how much banks are row required to hold on their balance sheets analysts expect thebanks to pass easily, but many warn they'll be waiting for more clearance before returning excess to shareholders that's because they're waiting for them to release this things following the collapse of four regional banks earlier this year you said it was well over a

trillion yesterday >> one at the close, 1.034 not well over, but -- >> then it's down 4.25%, so no. >> it's down 4% today. okay when we come back, the nasdaq turning in its best performance since may yesterday. it's now up nearly 5% just this month. we'll talk potential tech picks for your portfolio right after this and later former house speaker paul ryan will join us on the squawk set with his view of the president's economic record. you're watching "squawk box," and this is cnbc good night! hey corporate types. >> announcer: this cnbc program is sponsored by truist welts where many relationships matter most rock stars. look, it's great that you use workday to transform your business. but it still doesn't make you a rock star. so unless you work with an actual rock star. hi, i'm ozwald.

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nasdaq is on track for its best first half in 40 years driven by a big run in the tech stocks joining us now with hick picks is dan let's talk this through. have we one through all the games or are there still places where you see opportunities in the second half? >> good morning, becky i continue to see select opportunities into the second half and beyond. it's driven by the companies that can ino e vat, invest, and ultimately drive good growth

if we look at all fa bet or google, they're generating ai in it. amazon is nation cyclical changes. i'll also highlight apple, which is executing well on its product cycles i do phase choppy demand in some of the markets, and i think that remains a challenge, but i think the bigger story is really them powerment to the developers and the broader ecosystem which remains vibrant. >> you talk about all of these great things that are out there, but let's just keep the apple chart up there for a minute. you look at the run from january through june how much of that has already been baked in, dan, and what makes you think there's even more potential >> i think in recent months, becky, the market's gotten

increasingly comfortable that apple's able to drivethis rock market for example you have services, wearables, ipad mack, and the nan chies is durable it's not that they're facing -- it's not that they're immune from the challenges, but they're continuing to execute. we saw the division grow, but that's going to be small in the next few years i think what the market will care about is growth is likely to improve driven by their product cycles the services business, again, continues to provide a level of visibility and gross margin support. >> okay. so of all the stocks that have seen the runs, do you think any of the tech stocks have had their run? do you think any of them are getting richly priced? >> from a valuation standpoint, i think many of them are quite reasonable it's not because the near term

is easy, per se. it sees in the case of alphabet and amazon that there's significant cash flow and the market will continue to try to look ahead to that you, of course v technology transitions underway meta's done a good job shifting to reels so all of these companies need to execute, but they're continuing to innovate and bet, and that's going to help them groix in my view. >> nvidia is one of the stocks you like this morning it's off by about 4% last time we checked. just on reports that the biden administration is actually considering some new curbs on the chips they will allow for sale to china, does that concern you? >> i think it's a near term risk we continue to like nvidia even with the headlines overnight i think what we've seen from this company is if they're able to drive a level of innovation

in their chips and software and in health care with drug discovery or fraud detection with financial services, that adds value for the very near term, i think demand exceeds supply and they'll be able to navigate some of those challenges. what we've seen from nvidia and others in the last several years with ongoing tension is that they're able to deliver chips that are allowed or able to be licensed for a given market. i think we'll continue to see that evolve in china when i step back and think about the growth prospects for nvidia, the data center, gaming, i think it remains robust. and, so, yes, there is near term risk, but i continue to like the name here. >> dan, we've had greg brown, the ceo of motorola solutions on the show it's not a name that's frequently mentioned, but why is

it on your list? >> they have transformed motorola solutions in the last decade that have a core provision. if we think about the next several years, they've been investing in areas like video and analytics, command center software, and so that's resulting in higher growth for the company and continued margin expansion. and so we see the area of public safety as a key part of our broader society and that is going to get transformed in the decade ahead, and so motorola is a leader there i think greg brown has been an exceptional ceo. i think he's continued to nurture a lot of talent, and they remain very, very important to their customers as those men and women help keep all of us in the community safe we continue to like motorola solutions. >> internet of things. we used to talk about that all

the time we don't talk about it much anymore. you list qualcomm. >> it has a lot of intellectual property in key areas like mobile part of it is driven in their low powered solution, security, automatic, artificial intelligence processing at the edge so this idea of infusing intelligence and activity into factories, into cars, into agricultural environments, retail environments, all of that intelligence is getting harnessed and able -- the men and women. qualcomm is at the heart of it it's what's enabled them to build a $30 billion design windpipe in automobiles, for exam el. so we see the growth opportunities in the internet of things, automobiles, also content gains in the smartphone

market which remains in the near term we do think it's going to help transform our company, which will lead to higher growth and higher earnings over the next few years. >> we've got the run, but very quickly, what would change your mind is there a macro situation that would may you think, maybe hold off for a while? >> i think the main risk, certainly the geopolitics and innovation for me it's on the product cycles more than anything else. >> dan, thank you. we will talk to you soon. >> thank you. coming up, google is distancing itself from a drag show that had been planned to mark the end of p.r.i.d.e. month. details are next. and costco taking a page out of the netflix playbook, crack down on membership sharing we'll be right back.

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google is distancingitself from a drag performance it planned as the clowings event for p.r.i.d.e. month after a group of employees circulated an internal petition that opposed it, claiming religious discrimination the p.r.i.d.e. and drag show i what it's called at a bar in san francisco and a description of the event which pea furred the performance of peaches christ was removed from an internal events page at the time the petition started circulating

the petition indicates it sexualizes the co-workers there. the event will still tack place but it will no longer categoriz the performance as a google-recognized as a diversity and equity inclusion event a spokesperson said an internal team planned the event without going through the standard process. when we come back, the supreme court agreeing to hear a case that could determine the future of a proposed wealth tack robert frank has that story for us next. as we head to break, a look at yesterday's winners and losers . >> announcer: winners and losers is sponsored by state street

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good morning welcome back to "squawk box. we're live at the market site in

times square if you take a look at the futures, a little bit of a mixed picture. the nasdaq is down by 52 dow futures up by 37 even after gaining 212 points yesterday. the supreme court has agreed to hear a case that challenges the government's right to define income for tax purposes. robert frank joins us now with more on what's at stake for democrats pushing a wealth tax could it triefb adrive a stake e whole idea of it, robert >> it could. this case is called moore versus united states. it involves the trump tax that imposed a one-time tax on profits including paper profits. this could answer the most important question in today's tax policy debate, and that is what counts as income. specifically can an unrealized gain that's increased in value that's not sold actually be

taxable. if the court rules the 16th amend only allows taxes on income realized, this would kill democratic hopes for any kind of wealth tax and kill biden's billionaire tax. a ruling for the plaintiffs would also be a huge win for american multi-nationals those are the companies that paid the tax on the offshore profits and would get hundreds of billions in refunds the ruling against the moores could change the way certain bonds, commodity futures and other financial markets are currently taxed. cato and other groups have filed a suit against them. joe, it's not about the money. it's about the money. >> yes

>> it's a basic question how can you be tacked for something you don't have if you don't cash it out today, when you do, it may have a zero value. >> if it's money you paid toxes on and invested, that's one thing. if you found a company and haven't sold a share in years and you're table to borrow against billions --? that's a loop hole, and i can understand that. >> i don't know how you can fix that. >> that you can be charged for. >> but you have to figure out a way to do it i understand what the ration ale is there you know what gets at it, robert, unless you don't do anything with the money. if you buy that 500-foot yacht, how about a consumption tax. the way you get rich is tax it at the time you buy it. >> if you're using it and

borrowing it against income, you should be charged on that. if you're not, you shouldn't i mean it's -- you know what i mean >> you know, even if it's a consumption tax, joe -- >> i know. you've got to means test it. >> he just bot a $500 million yacht but gained a billion in amazon stocks this year. it doesn't get at the money. the attorneys for the moores is saying the conduct does not point to any amount of money, call it income, and tax it that's the issue. >> it sounds like i going be a case that's going to be hard to argue against. >> it would be an important precedent and shut down the entire debate. if the supreme court says you cannot tax unrealized gains, the wealth tax is gone the billionaire biden tax is gone the question is what do the

democrats turn to next to get money from the wealthy >> it's nuanced and unsolvable and gray and everything else because i want people like our great tech executives that have gotten rich, i want them in this country. i don't see them -- >> you don't want tax dodgers. >> they're not really dodging it. >> well, then the law should be changed. >> well then change the law. >> right. >> there's no elegant way to make the law be able to get that stepped up profits. >> i don't know how -- just the practicality of some of these proposed taxes -- >> it can go back down. >> right do you get it back does the treasury department have to write you a check if the asset that you never sold goes down in value. >> you know what i think we have guests who know exactly what to do not probably we'll see.

we have our guests here. you're nodding you know what to do. can you help us? >> sure, i know what to do congress has relied on taxing paper profits in many instances for decades. i helped with tax rules. that's before a sale or distribution however, congress has been very careful not to extend those rules very far as a consequence, we don't have tacks on unrealized gains as a general proposition for individuals. mainly for sophisticated investors and for multi national corporations

and now with this moore case, congress's worked many, many decades. and much of the work i did in the 1990s drafting for congress will be blown up. >> so i don't -- we do property tax. i don't know how you apply it to thinks that fluctuate. one year you canpy a huge bill on your $700 netflix and the next year it's like $200 and you're like, oh, my god, i paid that capital gains on $500 worth of gains i don't have anymore. it's not going to work how does it work we're stuck. >> wealth takes would be dubious. liquid assets fluctuate in value.

are you going to accommodate it by paying a big bill one year and then you say to the irs, i'd like a big refund. you have wealthy individuals subject to the whole regime in the first place. steve points out we have versions of this kind of commonplace on the corporate side of the code but they have been extraordinarily careful not to apply this to individuals, you know, both for fear of -- well, for a couple of reasons, 1, sheer complexity 2, suspect at best, and, 3, they didn't have the votes in the prior congress, doan have the votes in the congress, and, fragly, it's hard to foresee a political universe where there are the votes to produce something like this. senator manchin said quite publicly the last time around, you know, he was 'posed to the concept of wealth taxes because you can't tax something you

never had, and i think he was speaking not himself and for those reasons i have always been sort of dubious that a wealth tax would in any way become imminent in our tax political lives. >> you know, rohit, it's been pointed outoutyou can tax people to the ends of the earth, but unless you broaden the entire base, you're gong the run out of money. is it something that we should be doing, trying to do i mean it would help obviously how do we get out system of those gains never taxed? >> look, you could certainly change it. those are relatively straightforward and suffer no real constitutional question you can raise individual margin rates and do all sores of things

frankly they don't do much that we experience on a capital and ongoing basis. there aren't that many people who qualify for these taxee sta. even if you took all of the money, you wouldn't be able to get at it. we run a deficit annually, more than a trillion dollars a year even if you could do something totally constitutional and confiscatory, you couldn't close the gap. that's not where the bulk of the income inthis country resides. >> steve, i don't know where that's going to play out we may have enough agents to do what you want to do. one year you pay it, next year you get a refund

it would give them something to do do you want to try that or constitutionally do you agree it wouldn't pass muster >> joe, we've got a straw man here the supreme court did a search on the trump tack cut from 2017 that restructured our international taxes, forced multi national corporations to prove nchlkt good idea i think rohit would agree. but there was an individual, a couple of individuals, the moores, who were going to pay a small amount of tacks as a result of the transition to our sim. they're going to use that to blow up all the rupe tax

i would share some skepticism that rohit and i probably agree on a lot i share that skepticism mainly because of administrative concerns it's hard to tax stuff we only shifted to mark-to-market so-called realization events that were created, fictional, and circumstances in which the taxpayer had the ability pay, and we would value them. as an administrate ichb matter, we want to wait to tax until the actual sales then you have a ref rerns poichlt for how much is to be gained and the proceeds of the big tacks. congress has been very shy about extending those ujdsized gains by very far, only to the most

sophisticated investors. but to forstaal a billionaire tax, to reach out to accept a dispute over a public transition would be a disaster to our tax code as it exists today. we're not talking about future taxes. of course, those would be preempted if all unrealized gains were to be recorded, but we have a lot of unrealized gains that are reported now. zero coupon bonds. mark-to-market for commodity futures. >> you make a great point. they're messing everything up.

>> it was only a good deal when you apply it to certain businesses, but it's different when you try to do it by and large. >> they boast of a billionaire tax. >> they're going to have to figure it out now. >> i challenge it. >> go ahead, rohit. >> so we're making an assumption here about not only how the court is going to rule but perhaps the breadth of the ruling we don't know what the court's going to do. it's interesting they decided to take f the matter with no kum of underlying split but this is a -- as steve points out, this was a noshl approach to a transition of one international regem of tax to another. it is a question of first impression in this narrow context and we don't know how the court's going to rule. nor do we know the potential if

that -- whether it might be issued whether it would be limited to this case or be more broad-based, or do they rule against the moores and say it's entirely fine? we just don't know while i appreciate where steve is coming from in terms of his depth of angst about the potential effects of the ruling, i think we're putting the cart a lille bit before the horse. >> thanks, rohit steesh, i wonder, do you need anything else to have fun? it seems like writing taxes and thinking through all this, that would be enough joint for anyone, is that you wouldn't have any other leisure activities is. that right >> correct my wife complains i read the facts sheet on the couch on the weekend. >> you've got to love your job.

>> i'm just saying thank you for doing that, steven anyway, thank you both rohit, thank you too. >> that's great. i love that he brings enthusiasm to it and thinks of it as a game his wife said on the weekends he's poring over tax tables. >> he loves his job. he found the right thing he found the right thing. when we come back, costco cracking town on membership sharing, taking a page from the netflix play boochlk we've got the details next. >> later fed chair jerome powelle speaking and we'll be joined later by roger ferguson, the former fed vice chairman. follow squawk pod on your

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(we did it) start today at godaddy.com costco taking a page from netflix's playbook the retailer is cracking down on shoppers who use other people's membership cards costco always requests

membership cards at the checkout nowite go toung request to see photos and review photo id if the membership card has no picture. it's noticed more abuse of card sharing since it's expanded to self-checkouts in more stores and this is just an issue you kind of see everywhere in society. >> i don't have one. >> it has a picture on the front. >> you don't want the sales even if someone's using someone else's sales >> no. >> why not >> you're subsidizing the products in the store. >> so it costs money. >> it costs money to get the membership it's not a huge fee, but -- >> i wonder if it offsets the dilution of the idea -- does it offset the -- >> why have a membership at all? >> because it's kind of marketing -- that some people pay it, some people don't? >> no.

i'll still want the sales. >> if you want the sales, why do the membership thing at all? >> if there were netflix ads, you wouldn't care. >> you do if you're charging. >> do you have a costco card >> i had one but it's expired. i don't need it as much. i use freshdirect. >> you have the gym, that's a pain. >> the only way they make money is on the membership. >> and trainer fees. i hate exercise. coming up, the hearing that could decide the fate of the microsoft activision merger. it's heating up. i like it when i'm done. i don't like it before i go. we're going to tell you what to expect next. a reminder you can watch or listen to us live any time on 'rcongpp a wee mi right back.

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activision ceo bobby kotick and microsoft ceo satya nadella are both expected to testify today in the ftc's legal challenge against the company's nearly $69 billion merger. steve kovach is here with more on this front. steve, is this finally a situation where we're going to be looking at, okay, the answer to whether this deal goes through? >> soon, sooner than later it is day four of five of this federal court hearing that will likely determine, like you said, the fate of microsoft's deal to buy activision and this is the big one, guys, ceos of both companies are going to take the

stand. activision's bobby kotick testifying in the morning pacific time and microsoft's satya nadella in the afternoon up to now, the ftc and microsoft arguing over the definition of console video gaming and the cloud gaming markets we heard from microsoft's gaming boss phil spencer who framed the deal not around the exclusive console titles but the opportunities he sees in mobile gaming that's the fastest growing gaming market where all the real money is and microsoft wants a piece of it. spencer also testifying microsoft will keep future versions of activision titles, especially call of duty on playstation for at least ten years. as for nadella and kotick's testimony today, expect the microsoft side to get both of the men to commit to keeping those games on rival platforms and expect the ftc side to point to examples where microsoft hasn't done that with two other studios it has acquired in the past cloud gaming will be the other piece. nadella and kotick will have to defend

ftc alleges buying activision will give microsoft an unfair advantage in subscription gaming services the san francisco federal judge will decide the case and will likely reach a decision before the july 18th deadline for the deal arrives and, guys, it is still not over after that microsoft working through the appeals process still with regulators in the uk who rejected the deal this spring. so, hopefully by the end of the summer we'll get a final answer. >> the ftc is basically saying we don't believe you when you say you're not going to do these things here is other cases where you didn't >> this is bizarre so much back and forth, there have been three days of hearings so far. >> if they say they're going to do it, can't you hold them to that >> they're saying it under oath, phil spencer and offering signed agreements, enforceable by a court, to put call of duty on these platforms. the sony -- there is a prerecorded deposition from the sony boss jim ryan who is the head of playstation, arguing,

well, there are some titles they haven't included on that but everyone is focusing on this call of duty thing they offered and -- >> sounds like we're just going to kick and scream and say no? >> basically that's basically -- look, sony is by -- microsoft does have a point here sony is by far the market leader in console gaming. and it is kind of ironic to hear the market leader by a mile complaining that they're going to, you know, have an unfair advantage by buying activision so, that's what's being quibbled over right now we're going to hear for the first time in depth nadella and kotick defend this acquisition and defend against the allegations from the ftc, which echoes what we have seen in the uk as well it is -- doesn't it make sense the irony here, also, is, becky, the day the deal is announced a year and a half ago, lina con, the ftc chair and the antitrust boss, they came out with this idea that we want to squash these megamergers before they

can even grow. they really want to prevent this idea of another instagram happening where a facebook can come in and buy a competitor before they can grow into the next big thing and announced the same day that microsoft announced this acquisition and that's why we're seeing so much -- >> activision blizzard is hardly instagram. >> they're paying $69 billion, not $1 billion but this idea of a megadeal scares regulators right now. and, look, even if they lose, what we hear from that -- >> makes them mad. >> makes them mad. what we hear from that side is, even if we lose a case like this, it is still a win because -- >> we messed things up. >> we messed things up we put a chill on m&a. we hear from ceos all the time saying we reconsidered buying companies because we don't want the headache microsoft gave themselves 18 months to close this deal, and they're still facing this and running right up to the deadline. >> said that last time he was here they're going to challenge everything just so ty n se

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good morning stocks snapping their losing streak with tech industry leading the charge and the nasdaq poised to -- in

40 years president biden set to give a speech on his own economic record we'll speak with us who economist heather bouche ahead of that speech later today. would you take medicine developed by ai? former fda commissioner dr. scott gottlieb on how machines could change the medical field. the second hour of "squawk box" begins right now good morning and welcome back to "squawk box" hopefully here on cnbc live from the nasdaq market site in times square. i'm joe kernen with becky quick. andrew will be joining us in a bit from the aspen ideas festival he's got to be -- he's been there, what is it wednesday? >> sunday, yeah. >> must be overloaded with

ideas. coming out of his ears, don't you think? ideas about -- >> big ideas, yeah we'll talk to him about some of them coming up he's going to join us in half an hour. >> dangerous u.s. equity -- people get a lot of ideas in their head >> yeah. that can be a good thing >> can be a good thing or a bad thing. u.s. equity futures up about 25 points at this point the nasdaq has been weak all morning, maybe it has to do with nvidia and some of the chips, some of the news about exporting these or not exporting to china. treasuries this morning, we'll take a quick look. i like watching paint grow, yeah and take a quick look at crypto, which is been above 30 for a while. kind of holding on to that got -- almost to 31,000, bitcoin did, down 1% to 30,356 to diana olick with new data on mortgage applications. diana? >> yeah, good morning, joe

mortgage demand rose last week despite slightly higher interest rates and the home builders are likely behind it applications for mortgage to purchase a home rose 3% for the week, still 21% lower overover year these applications increased to the highest level since early may, despite relatively high mortgage rates an mba economist in the release pointed to strong new home sales in recent months yesterday, of course we got that report on may new home sales up 12% month to month and t20% higher than may of las year also interesting in this report, the rate for 30-year fixed jumbo loans rose more sharply to 6.91% from 6.8%. so the spread widened for the third straight week to 16 basis points that's all thanks to the credit crunch at regional and community banks where jumbos live. from may of last year to may of

this year, the jumbo rate averaged about 30 basis points less, less than the conforming rate applications to refinance a home loan rose 3% for the week, still 42% lower than the same week a year ago, not a lot of people have rates that would benefit from a refi. joe? >> we have talked about the -- what, the regionals could mean for the fed and i bet you 30 basis points is probably more accurate we heard as much as 100 basis points of tightening they don't need to do probably too much. this could be the actual number that you can see in black and white. >> yeah. just the fact that it was lower all of last year and now it is higher that jumbo rate, people were benefiting on the higher end of the housing market, getting a lower mortgage rate for more home and that's where they're being squeezed the most. >> when do we see the fed say, all right, housing is definitely cooperating and we're satisfied? >> i'll tell you when the fed decides that.

>> yeah. >> rent has been a big part of the problem. >> we need more houses. >> housing is still doing very strong demand on the housing side and that new home sales number we saw yesterday was incredible given how high mortgage rates are to see them jump that much and see builders like lennar, kb home, outdoing what the street thought on earnings reports saying demand keeps coming >> okay, diana thank you. i'm sorry to always put real estate into terms of what the fed is going to do it is interesting in its own right. >> it is what it is. >> yeah, it is what it is. thanks. >> to the broader markets now. for that we want to bring in victoria fernandez, chief market strategist at clarks mark global investment and the lead writer for "the wall street journal's" live markets coverage and a cnbc contributor. and let's talk very quickly about what has been happening with all this optimism that is out there you think the people are really embracing a bull market here. >> becky, i think the hottest rate out there right now is

betting that the bull market is just getting started we're seeing that across the market where people are really piling in. they're piling into stocks, they're piling into options that would pay out if the rally continued. we recently saw call options activity tied to the s&p 500 index hit one of the highest levels on record it holds true for many of the tech stocks, the ai stocks we're seeing people embrace this i think momentum seems like it is on the market side right now. and people are trying to ride that higher, whether or not they're actually optimistic about the market or not. they want to profit from the short-term gains >> you say not so quickly, victoria you're a little more concerned >> i'm a little bit more concerned, becky i don't deny that we're seeing some positive effects in the market and that people want to take advantage of this what concerns me is when you look at some of the other elements that historically have said there is going to be a downturn or have recession 14 months of declining leading

economic indicators at a pace that we have never had without going into recession declining into, rising rates you look at the consumer and they're still strong but not as much as they were before there is a lot of different elements out there the inverted yield curve, all of these things, liquidity issues, so it tells me that you can still be in the market we don't want to tell people get out of the market and don't take advantage of what is going on. i think you have to be cautious when you're doing that and i think people are one of the things that tells us that, look at flows into money markets, versus equity etfs. money market flows have outnumbered 4 to 1 since last october and 8 to 1 since march i think people are in the market, but they're being a little bit cautious. i think that's probably a good playbook for the second half of this year. >> maybe they just are waiting for a pullback, given the huge gains. if you missed what happened in the first half, nobody wants to feel like the dummy who buys at the top.

>> that's true and so i think that's part of why a lot of people when we say we're a little bit bearish, we think there is going to be a pullback later this year as all of these elements start to flow through the economy. we're not saying don't be in the market, but we're saying maybe don't be all in some of these names that have been the majority of the runs so far this year find some other element, whether in healthcare, whether it is in staples, general mills reports today, a name like that or kimberly-clark, different things like that that can give yousom optionality in the market, but you're still being a little bit more conservative on where your allocation is. >> if you were waiting for a pullback, if you think one is coming, how big of a pullback would you say before you say, okay, jump in, this is it. you don't think it is going back to the lows of last fall. >> i don't think it is going back to the lows if you asked me that a couple of months ago, i would say there is a pretty good chance that we would. i think we're seeing the consumer in the underlying elements in the economy strong enough that we get a pullback at

5%, 7%, 10%, somewhere in that range. it is going to be choppy the labor market is strong enough, but inflation is high enough that i can't make a strong high conviction call that it is going to be a complete soft landing i would be prepared to see a pullback, and that's an opportunity to switch some of your allocations at that point >> gunjan, one of the confounding features of this has been the vix, that low volatility we have seen throughout all of that you expect that will continue this summer? >> i think a lot of traders are taking a look at their calendars, deciding to take those beach vacations right now because i think there aren't a lot of catalysts the next few months that could kind of move the needle ande r inflation data because so many of these have come hin so strong we're seeing people more

positioned for volatility in the back half of the year. we saw big bets tied to the vix that would profit if the gauge jumped significantly to a size 30 or 40 it has been hovering around 14 you see people say, hey, maybe things will be calm for the next few months, but pick up in the autumn >> gunjan and victoria, thank you, both. >> thank you. coming up, would you take a medication made by ai? we're going to talk personalized medicine and the possibility of medical miracles we already have a lot of them. dr. scott gottlieb. and president biden is set to give what the white house is calling a major economic speech in chicago later this morning. we'll preview what's on the agenda with white house counsel of economic advisers htheaer bouche "squawk box" will be right back.

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the next medication may be designed by artificial intelligence biotech firm insilico medicine, the therapy treats a chronic lung disease and the company claims it is the first drug entirely discovered and designed by artificial intelligence to begin a phase two clinical trial. joining us now is former fda commissioner dr. scott got

leagottleib a cnbc contributor i don't know where we went over the tipping point for getting -- for calling it this, scott, because i can go back, i remember years ago the new guy at mit center cancer for research, the reason they picked him was because he was going to fuse a lot of computer technology with drug discovery rational drug design, use computers to see what compound is going to bind most tightly to the target so we have been using computers for how many years and when did we cross over a step where we call it artificial intelligence when it has been incorporated for years and years and years? what is the difference now >> i think you're exactly right. we have been using these tools probably since the early 2000s, companies formed in the early 2000s based on rational drug

design using computers helping to design the drugs and discover the new targets and the drugs that would hit those targets it appears this company made heavier use of those tools, but there is a lot of companies that are making heavy use of those tools. so i'm not really sure there is a tipping point when it comes to the discovery and the development of novel molecules to hit new targets and using computers for that purpose i think where we're going to see a lot of innovation is continuing to incorporate these tools in early discovery and development and refining molecules, but also moving them closer to the patient, using some artificial intelligence tools, large long models to help select patients into clinical trials more likely to benefit from some of the drugs, less likely to experience some side effects and having the regulatory constructs to move those into the care setting, to move them into healthcare. and guide how we deliver drugs to patients in the healthcare setting. that's going to be the real tipping point to allowing these tools to really start to make substantial improvements in the delivery of healthcare

>> i can imagine that the convergence of, like, 3-d imaging for different compounds, you know, where you see the active site of an enzyme or something, you could use ai to design something that is not even naturally occurring >> that's right. yeah, that's right that's how the tools are being used we have done a good job of drugging diseases caused by single genes or single proteins or single enzymeatic pathways. you'll be able to look across multiple changes and find molecules that can intervene mult and multimodal models coming out, and data on how patients are behaving, how they're responding to drugs, their symptoms, but also imaging data. once you have those large language models that can look

across multiple different forms of data, you can start to make correlations they're just too hard to do from traditional discovery vehicles. >> you think about what big data tells us about mundane -- not mundane, but marketing or consumer habits and think of what you could do with big data on drug-drug interactions and outcome and all kinds of, you know, with prognosises, survival rates, all the things you could use big data for using ai just to -- to design the best drug you could use for someone with the best outcome it is kind of daunting i'm glad there is people that are doing this, but it seems like a -- going to take a lot of work and a lot of computer power. >> right and the key is the quality of data, making sure there is adequate transparency around the data sets being used to trant m train the models we have ai tools used in healthcare now, for example, tools that are used to help

augment diagnoses of radiology scans and imaging and pathology. those were trained on loft data sets where we knew the integrity and the reliability of the data. you are roadiologists reading a scan and saying that a tumor is a tumor. it is more complex when you train the models on an electronic health record, for example. you have to find ways to ensure the integrity of the data and you want transparency around it. if the data, for example, in an ehr, electronic health record, is saying a patient was ventilated, what does that mean? you want consistent terminology across different medical records. there is tools for doing that. that's going to be the key getting the tools incorporated that's the key to regulation by the fda. they're going to want ways to ensure the quality of the data and that's going to be the nexus for how they regulate the tools that are used to guide patient

care >> it is mind boggling ai could be in healthcare could be the biggest usage you could present data to the hms or to medicare and medicaid and say, look, this is why you need to pay for this, or conversely, you could say, look, we're not getting any benefit from all this money and there is no reason to even do it at this point. i can think of so many different uses for when you could aggregate a lot of different data i wonder if doctors, i think this is once again where it would be helpful, not necessarily displacing doctors, but medicine is an art as you know and an experienced clinician can be presented with a lot of stuff and just take a guess on what is really happening with ai, would you be able to -- it would not be an art it would be a pure science medicine at that point might not need the intuition of

a great doctor >> i think it is certainly going to make the most impactful application in healthcare, not just drug discovery, but the delivery of healthcare you raised an interesting point about the use of the tools by insurers this is causing a lot of consternation on capitol hill right now. >> machines say you can't have this drug. you got to die >> and a lot of legislators are calling for new regulation that would be a mistake to try to create new regulatory models. the existing regulatory models can adequately deal with these we have regulations of health plans in terms of how they deal with claims and claim denials. you can apply the rules to the use of the tools my concern is that these healthcare applications could get scoped into some of these calls for regulation more broadly of ai and what we need to recognize when it comes to healthcare, there is a lot of existing regulatory frameworks that have been put in place over a long period of time that are adequate to deal with these tools and the incorporation of these tools, not just in the drug development and drug delivery, but also health plans. the fda is equipped to regulate the tools.

some rules need to be modernized, they have the authority to do it same with cms and other state health insurance regulators. i don't think you need new legislation, new rules i think existing rules can be adapted to deal adequately with these. >> now i might write some science fiction. you have computer death panels >> that's exactly -- that's exactly what they're saying. >> that's the way it would start and sooner or later, they won't give you any medicine when they decide that they don't want any humans anyway. that's what we got to think about. >> computer death models to figure out -- >> computer death panels >> what people should or shouldn't get. >> you don't get this -- >> it is too expensive >> then take it to the next step, we don't want you living anyway because we're computers. >> we have regulation on how health plans have to deal with denials of claims. so you don't need a new set of legislation to deal with this. that's what is happening on capitol hill right now this is quietly happening right now. there are people calling for new

legislation to impose new restrictions on the use of these tools with health plans. i think we have adequate authorities within the existing agencies you don't want to stymie the introduction this could be helpful in facilitating access of treatments, making sure the right treatment gets to the right people at the right time that's the key >> that's the big but. >> getting it -- eventually a terminator world we will. i see it coming, scott thank you. got to think about it now before it is too late "squawk box" will be right back. time now for today's aflac trivia question. google's first physical retail store opened in 2021 in what new york neighborhood? the answer when cnbc's "squawk box" continues now there's a hole in your defense; look at the size of that- gaaaaaaaaaaaap!!! is that a goat?! you talkin' about me? gaaaaaaaaaaaap!!! i think this goat is saying “gap.” must be talking about the expenses health insurance doesn't cover. so who's talking about the money aflac pays to help close that gap?

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now the answer to today's aflac trivia question. google's first physical retail store opened in 2021 in what new york neighborhood? the answer, chelsea. still to come, president biden -- set your dvrs now --

giving a speech on the economy later today. we're going to talk to heather boushey for the latest on bidenomics and former fed vice chair roger ferguson will be live from the aspen ideas festival stay tuned you're watching "squawk box. this is cnbc for me, pride month is truly a celebration of the uniqueness of our community, but it is also an opportunity for the lgbtq+ community to come together in solidarity because there is strength in numbers. and particularly this year when there is a lot of hate and intolerance against certain parts of our community, solidarity is crucial. for those of us who are comfortable being visible, comfortable speaking out, we need to come together and do that to fight this hate and intolerance.

welcome back to "squawk box. i'm andrew ross sorkin live at the aspen ideas festival in aspen. take a look at the futures right now. let's show you where things stand. we're going to be speaking with roger ferguson in a little bit live right here in aspen about

frankly where things stand but right now the dow up 40 points nasdaq off 25 points s&p 500 off about 2 points we have great interviews coming up from the festival, including huawei chief security officer andy purdy his company has been in the cross hairs of national security concerns when it comes to chips and other products and the news from "the wall street journal" this morning about what the u.s. government plans to do around ai, chips and the like we'll talk to him about that doordash ceo and co-founder tony xu with us from aspen as well. and the fed, the inflation in big focus this week. former federal reserve vice chair roger ferguson also in aspen, he'll join us to discuss the fed's next move and jay powell's speech later this morning. becky? >> andrew, thank you and welcome. looks like another beautiful day there. >> thank you it is cold >> i thought you were saying another beautiful outfit. >> i like the jacket. >> everything matches the background who did that

who did that everything matches the background it is uncanny. >> it's, you know, actually, sam wright over here, he gets credit for the fashion advice and putting all these things together it is colder here this morning, though it is beautiful out. but it is colder and you're seeing a little bit of snow caps there >> it will warm up later in the day. andrew, thank you. we'll -- well, we're glad you're here president biden is set to defend his economic record and what the white house is calling a major economic speech due to be given in chicago later this morning. joining us right now with a preview is heather boushey, the member of the president's council of economic advisers and, heather, what can we expect to hear later today? >> well, today the president is going to outline his vision for the u.s. economy he's been talking for a long time about -- he's working to build an economy from the middle out and bottom up. and he's going to lay out that economic argument. here's the thing the core pieces of the

president's economic agenda are to make sure that we're making investments all across this country and things like infrastructure, but also in strategic industries like clean energy and new technologies like semiconductors that are important to our national and economic security and doing so in a way that empowers the private sector so investments all across the country, that's thing one. thing two is empowering workers in making sure that they have the education and skills to be able to thrive in this economy make sure they have the opportunity so that that's the second piece and the president likes to say he's one of the -- he's the most pro union president in decades and he'll talk about that as well, the important role that unions play. and then, third, making sure that the -- that the economic landscape is competitive and fair this has been a priority of the president since early in the administration, with his whole of government competition, executive order, making sure

that the way that our economy works allows small businesses to thrive, allows workers to thrive and allows the best of american innovation to reach the marketplace. so those are the key -- the three key points he's going to talk about in terms of his bidenomics and how to grow the economy and he's going to contrast that with the way republicans focused on the economy with their trickle down economics, and, you know, with tax cuts that primarily benefit those at the top but don't lead to the kind of economic growth we need to see that can benefit people all across this country >> heather, i'm not sure if you know greg ipp from "the wall street journal" journal. greg is a straight shooter, nonimn nonpartisan, he's got an article in today's "wall street journal" that lays out things very well with two records that the president has when it comes to bi bidenomics, his economic plan. the successes he's already had

legislatively, he had very early on when it came to things like infrastructure, and when it came to thingses like semiconductors, renewable energy that's one side of it. the other side of it is the huge amount of money that was spent, $1.9 trillion, laid out to do some of these things and the after effects that has had, that greg, i think, rightly points out have led to a lot of the inflation that we are continuing to deal with and that has been a much tougher mar on bidenomics, on what happened with his economic plan. what do you say to the argument that, look, the american record is a tough one, with the american rescue plan and it caused some of the inflation that has meant that the average worker until very recently was not making more money. we're making more money, but not in real terms when you consider inflation. >> i have a number of reactions to that. let me go through some of the economic data that is so important. first of all, when the american rescue plan was put into place,

folks, the congressional budget office and others thought it would take us years to get the unemployment rate back down to below 4% of course, we did that within the first year of the administration and we have seen historically low levels of rates of unemployment we have seen the president have an addition of 13.1 million jobs on his watch we have seen month after month of strong job gains for people all across this country. and we have seen real wages outpacing inflation. we have seen that inflation certainly has been a challenge that has been a challenge not just in the united states, but globally but we also have seen significant progress on that we have seen the inflation rate come down by over half over the last 11 months we have seen that because of the work of this administration, supply chains have become unsnarled, which allowed prices to become more normal in many markets across the country and the root cause of this inflation was the global pandemic, and

then, of course, putin's war in ukraine that up ended global energy prices. and now that we have been dealing with the issues around the pandemic, that is -- we're moving past that, we have unsnarled those supply chains, and energy prices have come back down and we watched those very carefully. we need to remember this is a global phenomenon, that the united states has performed much better than our other folks that have also experienced these same trends so our inflation has not been ahead of the pack. but we have seen stronger economic growth. and that what has been benefiting family all across this country the other thing i would note is that families are doing much better on many metrics than they were prepandemic you look the at the number of families falling behind on their mortgages or look at bankruptcies, family household net worth is doing better than it was prepandemic, and indeed people are saying that they are happy with their jobs, there was a new survey that actually came out in the "wall street journal"

that said that job satisfaction was at these record highs. so we need to put all of the pieces together, certainly the president has prioritized inflation, but what he's prioritized as well is making sure we get this economy back on track, we get people back into jobs, we provide that economic security so that families can thrive and in doing so in a way that is allowing american business to thrive, with the massive investments that we have seen across the country because of that suite of legislative policies that the president is putting into place we're now up to $490 billion of private sector investment all across the country to do those investments in semiconductors and clean energy. >> what do you think the average person would need to see to change their -- how they feel, their perspective. this is what we deal with a lot. and you can say polls are -- one day they're one thing, but consistently the president's approval rating for economic

issues is underwater and lately it has been below 40%. so, do they -- i mean, i don't think you would say that they don't know how they feel about things, that they're incorrect in feeling concern or feeling like they're having trouble making ends meet because of inflation. you would identify with them, but how come they don't seem to be clued in on all the great things that are happening? >> i was -- i did not say that -- i mean, certainly when we're looking at polls, and we're understanding how people feel, the place i always start is the fact that the vast majority of americans get the vast majority of their income from holding down a job. that provides the economic security for them and their families and that is one of the reasons the president prioritized getting the economy back on track and getting people back into jobs. we have seen historic labor force participation. we haven't seen this many women in their prime age working years, 25 to 54, we haven't seen

this many women participating in the labor force going back to 1948 when we started tabulating, just one indication. as i mentioned, "the wall street journal" recently published this survey that people are happy in their jobs they have this high job satisfaction >> joe biden has been just as unpopular as president trump was. why is that? >> well, certainly the -- this has been a challenging moment for the country, coming out of a pandemic, the challenges that we have seen with gas prices and the challenges with inflation. but we have seen that on the specific pieces, people do want us to be investing in america. they do -- they are excited about the opportunities for small businesses they are excited about the economic opportunity coming around the bend. so, and we do see that people are excited about the fact that they have jobs and that this is providing them and their families the economic security they so desperately all need. >> andrew? >> i just want to keep on the

same path here, which is this feeling, joe is mentioning, there is a feeling, not necessarily jobs, wages, but the inflation story that becky is mentioning and what i'm trying to understand is do you completely object, heather t, to the idea that some of the stimulus plans as well as intentioned as they may be and as good as they very well may be for the long term and the health of the economy in the long term did exacerbate inflation? do you object to that idea completely >> so, here's the thing. when we put in place those policies, the nation was reeling. we had high unemployment, we had an out of control pandemic, and then, of course, a year later we had this unprovoked war in ukraine that putin waged that up ended global energy prices this has been a series of shocks and the pandemic we all started to see the research and the effects that it had on communities and mental health and how hard this was on families certainly this has been a challenging time but when we put in place the policy, the president wanted to

make sure that communities and people and states all have the resources they needed to be able to get through the pandemic and get to the other side. >> i guess one question i'm asking -- >> let me finish my point here one of the important pieces of this is we were able to get people back to work, get them back in the labor force, get them back to the place where we could get them back to earning for their families and we were able to do that much quickly, much quicker than people -- >> was part of that calculus, though -- i want to understand, was part of that calculus, even if that was true, was part of that calculus saying i prefer to take jobs even though i know i'm going to -- i'm going to -- even on the margins, even if you want to blame the fed completely, o the margins i'm going to increase inflation was that the considered calculation or was that something that happened that was not in the cards when you made that decision? that's what i think we're trying to understand. >> let's be very, very clear, andrew this inflation that we have seen, not only has it come down

markedly in the united states, but this inflation was global. this was not something that only happened here. part of your argument is that in us doing this package, we were doing something that put us out of step with what other countries were dealing with, the challenges that they faced and that is simply not true. we have put in place a policy that got to faster growth than our economic competitors, but did not put us ahead of the pack in terms of inflation and to that end we have seen american families benefit i think that is where the proof is in the pudding. every country struggled with the pandemic and what happened with energy prices. we have done an excellent job of making sure that we have been addressing our supply chains, getting our prices back down, and we did that while making sure that we preserved and got people back into work. that is an historic accomp accomplishment, what the president should be celebrating today, what we all should be celebrating because the pandemic was an enormous global challenge and i believe the history books will show that because of our

actions we were able to deal with it in a way that, yes, we certainly did have inflation like other countries did, but we were also able to deliver for the american people and then put ourselves on a path towards long-term growth and make sure we aren't here again we understand now that fragility of the global fly supply chains we have taken steps to make sure we're adjusting that, reassuring where we need to, we are derisking where we need to, so we can have a more secure economic future. >> heather beoushey, thank you for joining us today. when we come back, a lot more here on "squawk box." tulane professor walter isaacson is going to talk ai. we'll show you some of that in a little bit the top of the hour, former house speaker paul ryan will be our guest. and reminder, get the best of "squawk box" in our daily podcast. follow squawk pod on your favorite podcast app and listen anytime. is rhtacafr ig bk te th

welcome back to "squawk box. we're here at the aspen ideas festival, where on monday i spoke with walter isaacson on a wide ranging discussion about ai

the question he thinks right now is what type of relationship we want to build with ai. >> the most important thing about ai is the concept of whether we're going to build artificial intelligence that will kind of leave us behind, that will do things on their own, versus augmented. are we going to have what lickliter called a symbiotic relationship with machines steve jobs was the exemplar of that second camp, which is we have to be more connected to our machines so that they will not develop intentionality or values different from ours. >> walter also weighed in on ai's potential impact, both the good and the bad, on employment and jobs >> never in the history has technology led to an overall loss of jobs it just transforms buggy makers into gas station attendants, whatever it may be the question is not will we lose

jobs, but will our students, the students i teach at tulane or whatever, be able to stay ahead of the curve to know what jobs of the future will be interesting. >> walter isaacson, spent a lot of time talking with a lot of geniuses including elon musk he has a book coming out next month just about all of that, september. we're almost in august could be next month. we should mention, of course, that nbc universal is the media partner of the aspen ideas festival and walter isaacson's highly anticipated book will be out -- we have the date, september 12th in the next hour, i'll speak to tony xu of how ai is changing his business we're going to continue along this theme, becky. >> i saw the back book cover of the book of walter's book, he said he wanted to focus on space. it has a spaceship on the back, which is cool too. >> starship, it is a pretty -- the whole book is pretty cool.

the cover itself with elon almost has a steve jobsian image of elon on the cover. >> he's like -- yeah anyway, can't wait to read it. i'm sure a lot of people can't too. and, andrew, looking forward to these interviews we have today from aspen too. before we head to a break, couple of analyst calls for you. morgan stanley naming delta airlines a top pick. that call comes after the airlines' investor day yesterday where it raised its guidance the analyst there going to overweight with the price target of $70 and that would be a big jump from here that stock at $46.30 right now and deutsche bank downgrading dow component walgreens boots alliance to hold and taking the price target to $46 from $34 that call comes after walgreens earnings missed expectations for the first time in three years yesterday. and for fiscal 2023, walgreens now saying it sees earnings somewhere $4 to $4.05 a share. that's down from $4.45 to $4.65

a share. i guess that was the earlier guidance there. take a look at the futures this morning dow is in the green with the dow futures indicated up by 33 nasdaq and s&p indicated off nasdaq by 47 points. the s&p down by about 5. stick around "squawk box" will be right back. n named dinosaur, colorado. we just got an order from dinosaur, colorado. start an easy to build, powerful website for free with a partner that always puts you first. start for free at godaddy.com power e*trade's award-winning trading app makes trading easier. with its customizable options chain, easy-to-use tools and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are. e*trade from morgan stanley.

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box. u.s.-china relations one company in the cross thairs, waway. andy, it's great to see you this morning. we're having lots of debates about chips and ach.i. on th table. i'm curious if you could walk through what's happened to your business over the past year. >> what we have done, which is the restriction on the ability to sell 5g chips used in our phones is we basically had to heavily invest in r & d. so even adjusting our portfolio, focused on carrier enterprisers and consumers. we have stopped the drop in our

consumer revenue our carrier business has leveled and our enterprise level supported by 5g to business has grown 30% in 2022. so with our continuing focus on investment and in partner with customers around the world, we're going to find success. for example, the goeblobal 500 t of companies, we've partnered with 270 of global partner 500 companies and been hired by 700 s s cities to do their digitalization >> i'm curious how you're thinking now about the relationship between the united states and china, about what we're seeing from secretary of state blinken and how do you think this is manifesting and ma

metastasizing. >> i'm heartened that the biden administration has changed their focus from decoupling to derisking. risk is what it should all be about. janet yellen said there should not be a complete decoupling because it would be financially catastrophic to the u.s. it's a fundamental issue based on what is in the best interest of the u.s i'm hoping saner mind can find areas of potential agreements so we can build on reducing the carbon footprint, digitalization, helping the ecosystems of the world. >> the wall street journal, i'm sure you saw the reporting that huawei workers were tracked at a chan spy facility. can you tell me what you thought when you read that and what you know >> i saw a newspaper article

that said there was speculation that there were some bad things going on, that huawei participated in efforts to help china to spy on the united states huawei categorically denies participating in any efforts against the government and categorically deny any issues in cuba >> we hear report after report about china and often huawei around security and the like and then we have conversations in our broadcast and you deny them. even if the world is not black and white, there's something in the gray, no >> if you keep repeating the same thing over and over, then sometimes people listen. i've ventured to 26 countries in the world. i've had some private

conversations with u.s. allies the question to block huawei has been intense when you look at what is the record in terms of the fact, and you don't see specific allegations on the national national security threats. and there's no such thing as a trusted supplier the bad guys can hack into everybody. when you look at issues like privacy, you force the sale of tiktok but who is going to protect american data? there need to be transparent international standard and third-party vare if i kigs for everybody. >> andy, we're going to have to run but as an american citizen, what do you think about just the relationship itself and the concerns about where taiwan might be and what may have happened >> that's similar to one of the earlier point. the situation, the geo politics

between the u.s. and china, we're just a private company we're not involved in those issues and we hope there can be a resolution that's peaceful >> we appreciate you and the discussion back and forth about all of it. thank you. >> you bet >> joe >> coming up, apparently he's in the house, former speaker of the house paul ryan will join us to talk everything from russia to taxes and more we may -- we may mention 2024 as there might be election that year "squawk box" will be right back.

good morning futures mixed ahead of the opening bell the dow just snapped a six-day losing streak. with three days left in the quarter, the nasdaq on pace for its best first half of the year in four decades. the chip sector feeling pain today. we'll show you which stocks are down and is bidenomics working? the president set to make his case for his stewardship of the u.s. economy we'll get context from the former house speaker paul ryan

the final hour of "squawk box" begins right now good morning and welcome back to "squawk box" here on cnbc i'm joe kernen along with becky quick and andrew ross sorkin, who continues to be at the idea at the colorado festival >> beautiful >> it could be that shot that we're looking at was it 40 degrees this morning what would you say >> i don't know. it's cold. i don't have them but people have hand warmers out. how cold is it, guys it's about 40. >> it will get to 75, 80 air temperature and just pristine. it's the best place. >> it's beautiful. by day it will be 70, 75

last night it got close to the 80s. >> 300 days of sunshine. >> we got times square >> we have our own unique charms and smells and sounds here in times square as well >> and wildlife. >> and wildlife. we do. u.s. equities this hour, nothing gang busters, up about 4 points on the dow, nasdaq weak, maybe on chip-related news nvidia is down a significant amount this morning. treasuries, that's not really where the action has been lately oil is kind of interesting still below $70 and of course bitcoin continues to trade above the $30,000 level, which was the overhead resistance. maybe it's cleared that now. we will ask a technician next

time we have someone on. >> thanks, joe semiconductor stocks are the ones under pressure. the biden administration weighing new curbs and looking at banning services by chinese a.i. companies that move could come by next month. it is day four of five in the government's court case against the $65 billion a activision merger. >> and doordash leaning into grocery and retail and will offer its dashers different ways to get paid. we'll be speaking with the

company's co tony xu, who will join us in a couple of minutes from now, becky. >> thank you, andrew let's get back to the broader market and check in with mike s santoli. what stands out to you >> the act so far to hold yesterday's rally is relevant. and yesterday' ups upside in th broad market shows you the market is in a mood that good news seems to be good news and that being said, it's unclear whether this little 2% to 3% pullback we got over the six days or so was enough to digest the gains that led up to it this is a one-year chart on the a year-to-day basis, all of up sides have come in these one-month sprints, three to four weeks. so we obviously got another one of those recently going into mid

june i've ban saying anything about the old high of 4,200 is good but even better is anything over the high of 4,300. now transports have also caught up to the s&p on scale it's mostly about momentum in airlines, though truckers and others trying to confirm this idea we're in this maybe speed-up phase of the economy or at least better than anticipated phase. in terms of big secular growth, look at apple and microsoft. this is a two-year look at these stobs. this is $5.5 trillion worth of market cap it's 25% of the nasdaq 100 a couple things to note. one is that microsoft has kind of paused right here, right around its former highs in late

2021 we'll see if there's anything more than that where you see apple has consistently gone higher i point out this almost ridiculously steady trend update up there it's not really about some kind of changing fundamental story. it's just the biggest and best balance sheet and most predictable player out there we know the story but we'll see o to what degree it has the b-line to that market cap and proves to be a culmination point in the short term, becky >> we had an analyst pointing out it's about looking at all these different monetization scheme and broadening thing out. but when you look at a chart like that, what's happened from january to june, it has to equal sentiment change, right? you don't see charts like that otherwise. >> it's sentiment change and it's the character of the market

which they feel they need to migrate, too people felt underinvested. there's a bit of we need plenty of good, fundamental reasons why you want to hold >> it's. >> mike, thank you we'll see you later. >> it's -- back here is the 2024 race for the white house is heating up president biden is expected to deliver a major economic speech, digging into what they are calling bidenomics the president will try to convince voters his policies are working and the u.s. is getting back to normal >> the united states has performed much better than our

other folks that have also experienced these same trends. inflation has not been the head of the pack but we have seen stronger economic growth and that is what has been benefiting families all across this country. >> please. joining us now with his reaction, former speaker of the house paul ryan, chairman and vice chairman at tenio >> relaxed >> i was going to say healthy. >>. >> you do look happier that is no joke. >> you go through a destressing exercise like that and it's relaxing >> we've known each other for a long time. do i call you paul >> do i call you joe >> sir would be good for you

>> the president has a lot of things that are going well for him. listen, infederation is coming down, unploumt is at phenomenal levels the fed has been able to normalize rates to some extent and it hasn't knocked us into a recession at this point. the one fly in the ounga ointme you can say it's global, all the spending the last six months of 2020, payrolls were growing $800,000 a month. we were coming out of the recession already. and there is quite a bit of inflation. >> 100%. i think that last big spending bill, they wanted to take credit for coming out of co individual. they went down their spending wish list and hit the gas pedal on inflation

they exacerbated the inflation problem. the fed has a lot of responsibility there i think it going to be harder to get from 2% from 4% than it was from 8%. my guess is a few more rate increases. >> they also blame it on putin and the war. >> did it happen for a while >> when you have this kind of growth, you we can go on -- inflation was not vladimir putin's fault. there are a lot of things that are putin's fault but that is not his fault. shutting down the energy supplied is a bad thing as well. i think bliden will say -- if we want to have more upward

ability, unleash our economics and i think you're going to get a gusher of industrial policy. picking winners and losers with your idea logs, regulatory agencies, is not going it grow our commodity. >> what are you talking about specifically are you talking about the ftc -- >> all of the above. he's computing ideaologues who are putting a crippling effect he wants to get rid of expensing and raise rates. >> i can agree but gary glengleentzle

is doing the job that congress is not >> i totally agree but that's congress's job >> but they haven't done it. and all of this is coming after imagine blowups that left lots of investors -- >> it's a new technology that people are just getting their heads around, frankly. >> we're going to hear that real wages were up. >> it's this may i thing >> there are this straight months where we'll made less than what they did and we're not back to where we were that probably needs to be said >> i think i mean, look, i'm happy that the economy is as resilient as it is these are good things. independent not one of these people who talks down the economy just because a democrat's in the white house. what i don't like is what he's proposing to do for the future

because in addition to his tril policy, it slows our economic growth and harms innovation and he's promising not to record entitlements so is trump, by the way. so we have the p leaders saying i'm not going to do anything to stop the dress kous. he is moving us closer to a debt crisis by base and you can make an exception to the rule for national security, like semiconductors and things like that, people agree with that but he wants to take that to the rest of the economy. >> or have another merger ever between anybody. >> that's where we wanted to go. just to say, paul, i think there's a and mergers and things like that. but when you talk about i

ovation, maybe we can talk about whether there shoulding an industrial policy at you a look at the incentives that have now been put in place. it is unleashing hundreds of billions of that the entrepreneurial spirit of america is now did i think there's totally fair arguments to be made on so many of these other come point parts but that's not about innovation in america you could argue there's have been more, not less. no in. >> to get rid of raising taxes on small businesses, getting rid of a section but when you're going tofr this energy policy, there is a crowding out effect

it does talk money from otherwising and put it towards politically blessed usage. i would. actually, at aei, we let innovators how to ash be and pick who is sub dizz we're 82% fossil fuels after billions have been spent >> if you want to talk it about decarbonizing the economy -- >> it still starts with a "t." we want to talk about lester holt we're leading into our president

trump discussion i want to play a little bit about what she said about the former president and the election coming up >> reporter: it's really important for democrats to take him seriously. there can be a tendency for people on the democratic side to say, well, look, sure, the rabs are a mess but we'll be able to beat him in a general. and that is playing with fire. it's a risk we can't take. so i think it's really important for apart from party it's something we got to take very seriously and stand against. >> you're relaxed because you're not the speaker anymore. we had the actual speaker on yesterday and he barely intimated that maybe a guy that's got multiple problems in terms of legal problems and, you know, take your pick

january 6th -- he barely said maybe in some world there could be another candidate, even though he said trump would be fine he got all kind of flak even more admitting it. republicans are stared because none of the candidates can lose these people how how do you walk that line? >> i had no. >> why would most people say they're not going to run somebody else? >> what is kevin's job it's making the house work that means keeping your majority in tact. he's down to a formidable margin because chris stewart retired. his job is not to make his life difficult. >> now talk about who the rab look, it's a disas but liz is

right. he could win i think we lose. we lost the house in '18, the presidency in '20, the senate in '20 and we could have won the senate in 2022 but for -- >> is rupert going to tell you who you want to endorse. you're on the board of fox that's why i said that >> anybody not named trump >> rfk before any nominee because i think we beat how think -- everybody's down by 40 points >> donald trump and president biden have a symbiotic relationship with each other >> do you think you win if you nominate somebody not named

trump because you make everybody supporting trump very mad. >> i'm a never again trumper the base doesn't like a person like me. i'm very clear, i don't think he's fit and i don't think he could win. liz thinks he and he. >> i think voters are going to realize trump's baggage is so big, we're not going to win with him and there's all these other republicans that we're fine with i think there's plenty of republicans that can traffic with magna and -- >> did you watch "succession"? >> i did watch "succession." >> so that guy was picking presidents >> i'm. >> thanks, paul. >> when we come back, door dash

ceo tony schu will join us on the and new features for gig workers. and a market you can't a stay tuned you're watching "squawk box" and this is cnbc

we moved out of the city so our little sophie could appreciate nature. but then he got us t-mobile home internet. i was just trying to improve our signal, so some of the trees had to go. i might've taken it a step too far. (chainsaw revs) (tree crashes) (chainsaw continues) (daughter screams) let's pretend for a second that you didn't let down your entire family. what would that reality look like? well i guess i would've gotten us xfinity... and we'd have a better view. do you need mulch? what, we have a ton of mulch.

welcome back to "squawk box. door dash announcing some very monum monumental changes and rolling out changes of how delivery workers are going to get paid. they're going to be able to choose between an hourly rate or per-route rate good morning, tony i don't know which side of this you want to take first, the shift in terms of what's going to happen on the consumer end of this, which is to say that you're expanding beyond just food and restaurants, or really -- it's a really big policy, almost societal question, around how workers are going to get pay, which is a big shift for you. no longer just the option to get paid per route but on an hourly

basis. >> for consumers this is a huge change door dash even in its name is now a verb and a noun across millions of households across 29 countries we were never set out to just build a restaurant delivery service today we have over 100,000 merchants on the platform that sell groceries, retail items, pet food items, liquors, flowers and pretty much everything inside your city that is our goal to consumers, to expose and connect them to businesses small and large we've always been about giving dashers the most choice. when you think about the now over 13 million dashers that have chosen to drive or bike or do other forms of delivery on the door dash platform in the past decade, the vast majority of nem deliver under fewer than

ten hours a week so they really want that flexibility. in this case we're giving them the choice of doing whatever kind of delivery they do and on the other end, not thinking about it really, having a consistent any in earnings >> and frankly the earnings to the dashers, which is the better option, which is to say they're going to have it explain sort of the math of that >> they're literally set and designed to have roughly the same earnings in either choice so the dashers don't have to feel like they're missing out or being advanced or disadvantaged by their preference. some of them view this over a number of of the sp 13 million dashers we're talking about. the vast, vast majority

delivering under and so now they literally can pick and choose each time they open the darker apartment having to feel like they need to try to game the system or game an advantage. >> i -- but on some level that can't be if the choice was an even choice, there wouldn't be a choice to be made. i'm trying to understand the advantage for them for those workers who work almost full time, let's say 30 hours, 35 hours a week would they prefer to be paid by the otheror would they do better if they are speedy gonzalez and can get around to a the lo of people very quickly. do they do better on a pro-route basis in. >> i think soo -- we are a

marketplace that their behavior isn't perfectly uniformed. i think that's why this is something that we tested for years. we've had this idea for years now. we then tested it with our dasher community council across all of the geographies that we wait in before we hold it ou you actually can make it -- dough sign it such that it costs the company the same it the same benefit for the dashers and across tens of thousands of citying you need to understand supply and demand very carefully and then you could roll >> do you think others would lo this could they do a similar thing and make sense of this economically >> well, i do think that it takes a certain scale to be able

to do this this is why door dash didn't -- has been thinking about this for years but only shipped this out nationwide in really just this week as the largest local commerce platform in the united states both with consumers, with merchants and with dashers by a significant margin, that just gives us the greatest number of matching opportunity to do this to benefit all sides dashers earn $25 an hour nationwide that's fantastic we have to make it affordable for consumers, make sure merchants are growing same-store sales and profits and we have to make all of this orchestration happen in coordination every single city. >> tony, we appreciate it. this puts you head to head also with the insta cart and amazon let's continue this at some point. >> thank you for coming on as this new was breaking. >> absolutely.

>> joe >> thanks, andrew. coming up, winning the chip war. we're not talking about u.s. versus china or doritos, we're talking about states back here scott, you're in california? is that it, scott? what's it all about? >> well, we bounced around a little bit, joe. you were talking about paul ryan about industrial policy and semiconductors came up this is huge in our americas top states for business study, which is coming out in we're going to talk about the chips act

away from revealing cnbc's top

survey scott joins us with a game chi changer. do tell, scott >> reporter: we've been talking about how in 2023 all of this economic uncertainty is kind of freezing things in the economic development world with a lot of projects being on hold right now, but that's not anything that about $52 billion from washington won't cure. we're talking about the chips and science act of course. it is transforming states and cities across the country, places like syracuse, new york >> syracuse. >> it's the biggest here since the eerie canal. micron technology will spend $100 billion at this vast site

outside of town. >> how do you spell hope in new york it's mm-i-c-r-o-n. that's how you stel spell hope >> new york has been at the front of semiconductors. >> new york had to sweeten the deal with $5.5 billion in tax credits on top of the chips act. >> this is a company bringing in $30 billion revenue in a year. why are new yorkers getting a good deal? >> it's real simple. 50,000 jobs. >> syracuse's mayor says people are still pinching itself. >> it is a game changer for us >> this local businessman agrees. >> you have incredible jobs and high-paying skilled labor.

we're really optimistic. >> but subsidy watch dogs says states like new york are missing the point. >> they don't need to match the federal dollars. they should be their economies generally competitive. >> governor hochul says this deal is doing just that and will have a huge ripple effect and the green chips act in new york will also require companies to do things like get all of their energy from sustainable sources. it really is a small price for the chip companies to pay. they are raking in billions not just from the federal government but also from the states all of this does loom large in america's top state for business you can read all about that at

topstates.cnbc.com >> when the governor said how do you spell hope we you'd to say foxconn. how do you account for that? >> they certainly are confident in new york. you're slightly right. we reported about that in wisconsin. foxconn was going to be at eighth wonder of the world and it didn't happen the difference here is there is a lot of money going into this, a lot of federal and state money. intel in ohio last year, ohio is putting up $2 billion on top of the chips act. so there is a lot of money here. there is a lot of money here but the question is what's going to happen to semiconductor demand is it enough to sustain all of this everybody sort of admits this is a moving target. these fabs, these chip things are going to get build but it's a little bit of a question about how and how big. >> scott, thanks you

you know we're waiting and trying to guess behind the scenes are you just in california because that's your back yard or something? >> well, i'm in silicon valley and i guess we bounce around we want to see which is the top state for business and, yes, i also live in california. >> scott, thank you. we'll see you coming up. we're looking forward to all of these things as we get closer to the final unveiling of who actually won this year when we return, we're going to talk about whether the market believes the messages that the federal reserve is selling hi there lots of people behind today. former fed vice chairman roger ferguson igog bs intoe joining us he's with andrew out in aspen. they'll join us in just a moment action hero! unnecessary. ♪ - was that necessary? - no. neither is a blown weekend. with paycom, employees do their own payroll so you can fix problems before they become problems. - hmm! get paycom and make the unnecessary, unnecessary.

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welcome back to "squawk box" here at the aspen ideas festival we were joined yesterday for a rare interview on squawk >> i this nk we probably will he a downturn many sides of the equation industry are coming under better control, but the goal of the fed is to reduce the heat in the economy. and one way to do that is to trigger some kind of recession it's been slow developing.

some people think that the excess cash in people's pockets will start to run out around year end maybe it's an early 2024 event >> joining us now to talk more about the next set of decisions facing the fed, roger ferguson is here, former vice chairman of the federal reserve, cnbc contributor. it's great tosee you in person here in aspen. >> thank you it's nice to be with you >> i'm curious, he says early 2024 do you think we're going to run out of cash? >> for exactly the reasons he suggested, the fed is fighting an entrenched inflation. i think the possibility of a recession and early 2024 seems like a reasonable possibility. >> tles here's a lot of debate t this piece of it and actually whether jay powell will go further. i think -- are you in the camp of there's more in common even

beyond that? >> i'm certainly in that camp. the reason is inflation is quite intractable and they've been clear of getting it down to the 2% i think facing that kind of inflationary pressure forces them to keep going until they are clearly convinced that inflation is on a downward trajectory and that might take them to three rate hikes, possibly more, if the data call for it >> you think it's three rate hikes in this calendari year? >> this calendar year or early next we're trying to call where the terminal rates are going to be i think the market is off just a bit. >> here's a somewhat police department -- political question are you of the view that what's happening in terms of the inflationary story in this country has been a function of the if federal reserve being frankly behind the curve or are

you of the view or how much are you of the view that the inflation that we have seen, at least even on the margins, was a function of some of the other stimulus and industrial programs that this administration put forth? >> i think it's fair to say it's global so the biden administration is right there. some of it had to do with geo politics, energy, food, et cetera and, yes, i think it was a little bit behind as it got into the transitory debate and certainly the modelling would say the amount of stimulus put in was deeper that the hole that was left because of covid. >> we were talking about this piece in the "journal" this morning. how much do you think of the inflation we saw was a function of what the administration put forth in terms of the stimulus and is it just -- because that's part of the plolitical argument around the country you can look at a lot of numbers

that are good, the jobs and what not. but if you're not feeling it in your pocket in terms of wages, you say to yourself maybe it isn't working. >> the answer unfortunately is both are true. i saw earlier on your show the discussion about a big factory going up in i think new york, clearly a sign that this is an investment-driven kind of spin that they're doing that's going to take years to play out the challenge for the administration is they are looking at the supply side, saying we need more chips here, we need better infrastructure. all of that takes years to unfold it does not feel to the consumer as though their actual real wages are going up because inflation is high. it's a really tricky dilemma for them to answer your earlier question, i would argue inflation tends to be first and foremost a monetary phenomenon, i.e., the fed being late, putting a fair about of the blame there, global

pressures that got out of there and for me in third place would be the stimulus package. now that it was irrelevant and i would say what they're trying to do is drive supply, which over the longer term will really pay off i think they'll have a pretty strong argument to fight what they're doing will make america better over time, not necessarily quarter to quarter >> i have a ceo operational question for you, which is the other conversation that's happened a lot these days, which is esg people would talk about esg very actively and very positively and i would say you've seen a real switch in the past year and layrry fink, a real pioneer on this issue -- i don't want to say stepping back by taking it out of the vernacular, if you will >> people are seeing what's

happened in other states, florida and texas, others, where the government is going after those with an esg lens esg are different kind of risk factors. i think investment managers, ceos, et cetera, should put that on their portfolio of risk that they're analyzing. they may want to step back from it politically when it comes to thinking about where you put your money, esg factor should play in. >> i was talking to a hedge fund management about this and he said in europe, what are the esg factors you're using and we have to tell them this, this, this, and this and here in the us we're meeting with pension folks and you look at esg and we have to pretend as if we don't do that and say something else we're creating this very unique sort of moment >> absolutely. i think the job is to, one, be

as honest as you can two, for those who are skeptical, you have to say it is part of our risk portfolio we want to get paid if we're taking esg risk. and there's probably some risk that we don't want to take now, part of the issue here is also about sort of the energy transition i also think if you're running a large pension fund or running a company, you have to recognize carbons are part of the economy and you can't completely disconnect from that recognizing this is a risk that you pay for is important we've seen what happens if companies don't take environmental impact into their consideration. i think it important to keep all of it going. >> roger ferguson, thank you for waking up early. we'll see you later on a panel >> thank you

>> we should mention nbc universal news group, the media partner of the aspen ideas festival we'll be seeing roger with wells fargo ceo charlie scharf later today. >> very good i think ceos have always had to think about those things it suddenly became fashionable any ceo that ignored any of those things obviously paid the price. coming up, what's driving the market action as we get ready to wrap up the second quarter guenimill ingghe wjo us for an interview. stay tuned you're watching "squawk box" on cnbc

you know up next, anne walsh will join us live onset. we're at the nasdaq, at the nasdaq market set in times st tedua ayun

we are fortunate to have a very special guest with us for the last interview of today's show anne walsh is chief investment officer at guggenheim partners investment management, $224 billion in assets under management, and anne, it's great to see you >> thank you very much for having me. >> let's talk about what you're thinking about the markets, about the economy right now. i guess the good news is the fed is winning this battle against inflation, as best we can tell, but i think you're a little worried about what comes next. >> well, i think the fed is definitely going to continue fighting inflation that's their number one mission right now. our expectation is that inflation will go down to about 3% by the end of this year

but that's still not 2%, which is their target. so, i think that they're going to continue with their quantitative tightening until they feel very confident that they have gotten inflation down and it will stay down. as a result, quantitative tightening means that the economy should slow down in the second half of this year, and with that, there probably will be some market impact. >> so, what we've seen in the first half of this year, you don't think can be repeated in the second half? you're not anticipating? >> well, so, you mean about equities >> equities, what we've watched play out >> i think the equity market is a little overbought right now, and i don't think it's priced for a recession. i'm also concerned about the fact that there's not a lot of breadth happening among stock prices, that it's been driven by a handful of tech names, artificial intelligence-driven names, so as a result, i don't think that's really signaling how the broad health of the

economy is i think that the fixed income markets are probably a better indicator of whether we're confident about the direction of the economy. our expectation is that we will be slowing down, you know, do i see a recession? yes. do i see a recession that's going to be deep no and what we've already started to see is sort of rolling recessions last year, we had some manufacturing slowdown we had tech layoffs. we are definitely predicting a slowdown in commercial real estate, and so as a result, that will also have a knock-on effect, and all of this is going to lead to a weaker credit market, and so in the first half of this year, we saw instability in the banking sector, and in the second half, we're going to start to see more credit-driven events >> so, you have taken strength in the credit markets right now to reposition. what are you doing >> we are becoming very

defensive at this point in time in our portfolios. for example, we're moving up in credit quality, and credit quality improvement can mean not just going up in rating but also in capital structure selection, increasing our covenant protection on our investments, and in general, becoming much more defensive now, the good news is that the fixed income markets, because rates are high, has given us the opportunity to do this repositioning, and not lose any yield in the portfolios. so, it's a good time to be thoughtful about risk. >> seth was here yesterday, and he said when it comes to the credit market, they're looking around at things, and they see opportunities that they haven't in a while, that there's going to be some distressed stuff out there and there might be some value. >> absolutely. and because of the rates environment we're in right now, we are able to collect a really

solid amount of investment income for our clients and our portfolios without taking that additional risk. one area that we're finding a great deal of value in is structure credit you can go up in credit quality, and at the same time, you get the benefit of, in many cases, floating rate yield and where it spreads relative to corporate credit that we haven't seen in quite some time. so, it's a very advantageous time to be in structured credit as well. >> he mentioned what you just talked about with real estate being a potential place for some of that. >> so, as we go through this cycle, i think it's pretty obvious that there's a dislocation happening in office properties, particularly in second-tier and third-tier office properties, and i see that as banks continue to have the tightened lending standards in real estate, there will be an opportunity there. it's not yet, though and a i think that there's some

room for more pain as capital continues to be rationed throughout the system. i mean, the fed's continuing to engage in quantitative tightening, so what's happening is they're pulling capital out of the system and liquidity as a result you know, good projects will attract capital. projects that need more work are going to be really challenged going forward. there will be refinancing activity there will be increases in defaults we're already seeing bankruptcies increase across the board, and i think that's a better indicator of a broad economic impact from capital rationing, and i think there's more pain to come before the opportunity exhibits itself. >> anne, it is a pleasure to have you here in studio with us. we hope you'll come back again soon >> thank you very much right now, we'll take a very quick final check on the markets. you will see the dow futures

have turned a little lower they had been hanging in there in positive territory through most of the session this morning. right now, dow futures off by about 10 nasdaq down by 60. >> i blame amtrak. >> andrew is out in aspen. he's going to be coming back very soon. that does it for us today. right now, it's time for "squawk on the street. ♪ good wednesday morning, welcome to "squawk on the street," i'm carl quintanilla with david faber, mike santoli at post nine of the new york stock exchange cramer has the morning off big day for macro as powell and other bankers speak on a panel moderated by you are own sara eisen. our road map begins with chip stocks under pressure, reports of a potential new u.s. ban on a.i. chip exports to china. plus, microsoft versus