tomorrow could cloassify normal business activity as espionage foreign executives in china are on edge. we take you live to beijing. it is friday, june 30th, 2023. one more day in june i know this is it tomorrow is july "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm melissa lee alongside joe kernen telling jokes already. becky and andrew are off today >> which month has 28 days >> all of them. >> you heard it before >> i heard the bad dad joke from

you. the equities on the last trading day. the s&p looking to add 15 at the open dow up 72. nasdaq higher by 73. here is a look at the advantages on this -- averages on the last day of the first half. nasdaq is higher for the first half by 30%. s&p up 14.5% we have seen outliers on the upside apple and microsoft and google and netflix up 35% and 50% tesla and meta have more than doubled in the first half already. really quite a per fornl answer that we're starting -- performance that we're starting the second half with look at the yields >> that got me almost 4 2-year treasury back to 5. >> astounding move

>> not a lot happening in the yield curve. now it is happening. whatever jay powell said in portugal is at least convincing the market more we're going -- maybe we don't go that much higher, but staying here for a while. no cuts next year at this point. >> no. that's not what the markets believe. >> no. you were mentioning apple. i looked at the market cap >> on the door step of $3 trillion >> i didn't look to see if we will do it we're having an interview with dan ives 189. it is bidding 190 to 191 it could happen pre-market is that official if it is pre-market >> no. >> all right >> i don't think it is >> all right it was at 2.982. >> it is whether we close at $3

trillion. >> it is shares of nike are falling missed estimates by a penny. it doesn't sound like a lot. multiply the outstanding shares. revenue rose to $12.8 billion. that was ahead by the estimate the earnings shortfall was thanks in part to a 1.4% drop in gross margins. nike cited higher input costs and freight and logistic costs and exchange rates and promotions to clear excess inventory. guidance was muted for the year. sales in china rose 16% year over year. that was easy to comp when china was closed down dealing with the covid lockdowns. time for a recap of the three ipos we haven't done this in a while. savers rose 27% after priced at 18 it opened at $24.77.

then the other two did not fare as well. kodiak fell 1.9% after pricing below the range and fidels fell by 9% on the first trading day. fidelity is joining the rush for a spot bitcoin etf it was denied by the fcc the move comes two weeks after blackrock filed and the ftc has blocked every coin blackrock's filing includes surveillance sharing agreement that could help the concerns the proposal sparked a flurry of funds and moves by invesco and wisdom tree and cathie wood's

a ark invest took at the dtc. it has been improving that all of these guys are filing and something will change. blackrock knew something >> the "b" word or "f" word. >> "f" word? >> fil fidelity blue chip compa. >> they will tell them no? >> citadel charlie munger jamie dimon. i hear those beanie baby and pet rock comments. >> if you crackdown on the exchanges because of various legal problems -- >> that's fine >> and couldmingling funds >> it is there it is happening.

which expression do you like is the toothpaste out of the tube >> or the horse out of the barn. the toothpaste back in the tube is impossible. >> unscrambling an egg >> that's impossible >> humpty dumpty big oversized egg. virgin galactic completed the first commercial space flight carrying three paying passengers three members of the italian air force. it could fly the second mission as soon as august. vir bgin has a backlog of 800 passengers it has now reached $450,000 per flight >> that might be like pete davidson yeah, i'm going. i'm ready. then the weekend comes well, um. >> why are you picking on pete

davidson >> he was the guy. he was booked. he has other issues. >> he chickened out. you can go >> i said -- >> you have no trepidation you would be a scaredy cat you are picking on somebody else for backing out. >> i said i'm not going down any more if i had to pick one or the other. i would go with bezos and shatner. i might go with those guys i prefer not to. i'm not sky diving or bungee jumping ever remember the guy bungee jumping out of the hot air balloon the balloon can be too low. >> you are compounding your risk >> the balloon could be too low or the thing too long. do it off a bridge no, i wouldn't. chinese retailer shein is

denying a report it has confidentially filed for u.s. ipo. reuters reported it could happen before the end of the year we were talking about this yesterday. a spokesperson told cnbc that shein denies the rumors. the company is under fire from the house committee over accusations it exploits loopholes without pay ing duties or shipments to human right reviews. you said it is really cheap stuff. >> cheap thanks in part because they are not paying duties. >> and not paying employees. >> if they are using forced labor. it is the number third ecommerce brand behind amazon and nike according to piper in a survey this is a big impact for other retailers in taking dollars away that would have been spent elsewhere. >> amazing >> you never heard >> actually learned how to

pronounce it yesterday >> shein you are not in the market for $8 bathing suits. >> you are right $8 that is a faber speedo thing he is an olympic swimmer he is lauallowed to have those. if i lumber around in one of those, i look like -- >> you can't unsee things. speaking of toothpaste the supreme court is expected to issue the decision on cancelling $20,000 of student debt for millions of americans using an executive action during the covid pandemic coming up, where to find the best returns in the second half of the year. opinions on that topic were split in the quarterly stock

survey a quarter of responses were short-term treasurtreasuries a quarter said foreign markets we'll talk strategy next you are tcngsqwkoxonwahi "ua b" cnbc >> announcer: this cnbc program is sponsored by truist wealth. where meaningful relationships matter most. so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done. i'm okay.

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today is the last day of the

first half of the year the markets are on track for a strong ending. s&p is up 14% so far this year nasdaq is set to report strongest first half performance in 40 years. joining us now is stephanie link at hightower she is our cnbc contributor. stephanie, good to see you. >> good to see you, melissa. >> do you stick with what's working? performances are gone bsmackingf you think meta or tesla up and how could you keep going >> i think what is encouraging over the last couple weeks is we have seen a little bit of a broadening out it is not just the technology sector in the big seven or ten

that have led us so far this year you are starting to see interest in energy and financials industrials have held up well. we know the on-shoring theme i think there are other places to focus on. i think that is where there is better value i don't want to give up on tech entirely the addressable markets are enormous and growth is impressive i think you want to have a balance into the second half of the year i would also add not only in the sectors i just mentioned, but i think the consumer has held up remarkably well. i think you want to own disc discretions los discretionary and housing. >> a lot of the times are at or close to 52-week highs even when mortgage rates hit 7% in yesterday's session

is the supply demand enough to hold the stocks up >> i think that is not exactly where your value is in terms of the pure play housing. look at lowe's or home depot home depot is up 1% on the year. they just reiterated guidance. i think you can find other places within housing in addition with tjx. home goods and that stock is flat on the year there are places where you can kick for sure. on weakness in the home builders, that is where you want to look. 5 million homes short in the country. you have 5 million millennials that are just entering into the buying spree for the first time. we had 13 years of under production from the home builders i still think the housing market is a theme to play i want to be careful in terms of which names you are buying >> in terms of the broadening,

steph, does that necessarily mean we see a drawdown in tech shares >> i don't know if it is all or none i do think when you look at something like a.i., i know it has been exploited and people are excited about it it will be like a $2 trillion total addressable market by the end of decade. cloud is a $900 billion total addressable market by the end of the decade cybersecurity. so many ways to play that. i think you also have a very strong total addressable market. there are themes within tech where you want exposure. however, there are other areas that are better values at this point. i'm not sure it is all or nothing. i think it may be more of a balance between the value names and under performers plus

technology companies >> i haven't talked to you in a while, steph, have you trimmed your faang stocks as these stocks have really run >> yeah. faang stocks meta got to 8% in terms of a position in my portfolio i only have 25 times 8% is big. i did trim that. i'm still involved there i'm trimming the semiconductor companies like broadcom and lam research these stocks are up on the year. i think it is prudent to take profits and redeploy that into other areas that we have been talking about where there is some better value into the second half of the year. >> in terms of redeploying, you would not look in the semiconductor sector and say intel is a laggard to some i'm

trimming i'll find value elsewhere within that sector? >> i think, to me, i like broadcom and lam research. i like those two if they pull back, i would add them right back. i like those there are other areas, melissa i would buy delta. the demand has been so strong and the ceo was actually on "squawk box" this week talking about the goods to services theme just being in the middle innings. they actually raised guidance. stock trades 8 times earnings. fedex has been beating estimates the last three quarters. there is upside on the margin front. there are places more exciting to me on a valuation basis not giving up on tech or any pull backs >> steph, thank you. stephanie link. >> thank you coming up, lydia moynahan from the new york post will join

us to talk about intern wages on wall street rising as much as $120 an hour on wall street. this is the wrong type of higher wages for liberals they want to back down to $7 an hour we will talk about how her new piece quotes goldman sachs insiders about the appointment of tom montag to the board we will talk about those subjects next. "squawk box" will be right back. it's raising capital to help companies change the world. ♪ opportunity is making the dream of home ownership a reality. ♪ ...and driving the world forward to a greener energy future. [applause] sometimes the only thing standing between you and opportunity is someone who can make the connection. at ice, we connect people to opportunity.

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unwavering commitment to honoring our heroes. we extend our gratitude... beyond words... by proudly offering a legendary salute discount to those who protect our freedoms. our dedication to those who selflessly serve us runs deep within our dna. it's not just a discount... it's a commitment to making a difference. because every day is a chance for us to say thank you. bass pro shops and cabela's... your adventure starts here. wall street firms are increasing the salary of interns this year to entice the larger pool of workers disenchanted by

layoffs in the tech sector some earning as much as $120 an hour in the summer joining us is lydia moynahan from "new york post. $120 is the most a lot of firms are up at $70 or $80. google was down at regular wages. not quite. tech is back -- >> lifeguarding or working at google tough call the promise of silicon valley and start-up riches are not what they are used to be. wall street is doing what they do best. offering a lot of money. even year over year, we see an increase at hedge funds. intern wages up 30%. joe, there are a couple of firms on wall street paying $150 an hour to interns. these are 20 year olds >> are they specialized? >> high-tech firms

they don't necessarily have technical expertise. what i want to note about the intternship is the wage the interns are getting paid overtime and time and a half anything they work over 40 hours. to be fair, there are tradeoffs. in tech, you get the kuambucha and bean bag chairs of the if you are at goldman, you are coming in. >> you come in for the yoga class? >> exactly they are getting time and a half when you consider annualized, that is well into the six figures. it puts 20-year-olds in the top 10% of households. >> do these interns come back as full-time employees? you get a glimpse of the work force and get people in on a

permanent basis. there is a payoff here >> certainly it is a payoff which is more than getting paid a fortune, most of these are going with the hopes they can get a return offer. it is interesting because it is not like a rush process in the sorority and lured in with false promises many will work over fourth of july and worked over juneteenth and long hours and over weekends anyone coming to wall street hoping to hang out with models at the club are sorely disappointed >> you will be expected to work hard and come into the office. are these ivy league valedictorians or are these normal people? the very best? i know you are thinking about it i was referencing melissa. >> they would be lucky to have melissa. >> cream of the crop at $120 an

hour >> some of the internships are very competitive at citadel which pays $120 an hour before overtime they had 69,000 applicants for a few hundred jobs it is more difficult to get an internship at goldman sachs than it is to get into harvard. these are lucrative opportunities. it is interesting that there are plenty of people more than willing to pull 80 or 90 hour weeks and schlep into the office. >> that is going back to the way things are supposed to be. >> begin as you are meant to go on they are bringing people in. >> progressives want higher wages. not this way no, no, no not these fat cats i wonder if montag is getting

$120 your latest piece. goldman board members posting tom montag to the board. he is a former second in command. he has to work long hours at $120 an hour he was the second guy at bank of america after leaving goldman 15 years ago. lydia's piece called the move a slap in the face this is back to the future this guy was not the boom-boom room, but merrill lynch executive. whatever you think of the old brokerage days, he is associated with those things. >> he is emblematic of the old school wall street i don't know what that means >> you don't remember the boom-boom room >> there was a lawsuit >> it was a brokerage firm that the trading floor did all of the

crazy things you think a trading room floor would do and go to the strip club afterwards. >> okay. i think i get it i'll google it for you right now. >> the frustration is goldman is intentional saying they wachbt -- want to move on. the reporter wrote a piece detailing a number of lawsuits settled. women at the firm, especially, feel this is a slap in the face. goldman settled a $200,000 lawsuit alleging harassment and discrimination everyone is baffled by this. people at best think it is bizarre or a toxic choice. he is qualified. he has tremendous risk management experience. he has worked in trading and security he brings that to bear

i think feel you could have chosen somebody else >> does this shore up support for david solomon for support on the board? it seems like acknowledgment he may not have support of the board. >> a lot of people we spoke with said it is a weak move if you feel you need to sddilute peopl that don't like you is not a sign of confidence what does google tell sus >> i have seen things. i saw the moon landing it was 25 years ago. boom-boom room 2,000 women joined case against smith barney and testosterone t driven culture >> that wasn't settled 25 years ago. it took years in court >> decades after the suit. this is what it reminded me of

i'm sorry. i talk about things -- i thought it wasn't that long ago. 25 years you didn't see the moon landing? you believe it happened? >> i do. i do i have seen footage of it. i feel i'm well versed in that i learn something new every day. i learned about the boom-boom room i remember that being a hot spot in new york. i'm old enough to remember that. >> it is so long ago, it lost that title i was a stockbroker at merrill lynch and ef hutton. we used to have astronauts sitting here >> that's why i love europe. they still have those ash trays. it is interesting. he didn't necessarily leave goldman on good terms. he poached a lot of people when he went to bank of america he alienated a lot of people, particularly women, but pretty

much everyone who worked with i am h-- with him. >> i think the rank-and-file guys who loved him >> i will say he is was more aggressive than david solomon when it came to getting people back to work he made the trading work at bank of america what means he used to do that is questionable >> lydia, thank you. >> great to see you. coming up, nike shares under pressure after the release of the quarterly profits. as we head to break, look at yesterday's s&p winners and losers >> announcer: executive edge is sponsored by at&t business at&t 5g is fast, reliable and secure [due at target in 5!] copy that. make a hard left down the alley.

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good morning welcome back to "squawk box" live from the nasdaq market site

in times square. the dow is looking to add 93 nasdaq is up 74 at the open here shares of dow's nike under pressure this morning. the sneaker maker reported the first miss in terms of what analysts were expecting. it has been three years for that the company should have told them more. the company reported 66 cents a share profit that was a penny shy joining us is kevin mccarthy, managing director. kevin, future orders, so many ways to parse nike rouesults ov the years. this may be a pretty effective way. that is gross margins. a lot of it is to deal with cost control and the business model what happened here they mentioned forex what is the real issue >> good morning, joe and melissa. good to see you. i think, first, as we look at

gross margins, it is a big piece of the story as you look at the near-term scorecard, it is fair to ch characterize the earnings which are decent less threatric than the build up stephanie said it was doing well decent upside on revenue to your point about margins, elevated costs from inflation and also promotional clearance which should be one time in nature and drove a slight miss on profits d guidance contemplates the cost inflation continues into fiscal 2024 that is why the stock is bidding down 3% to 4%. second as it relates to maybe the longer term scorecard, i don't think either of these points are going to be thesis changing in fact, on the margin, i would

argue it might be a touch better in a day like this where you might have a good buying opportunity on a quiet day like this >> the cost increase that they see, do they -- are they able to pass those along to people or will people is elastic where they go and buy -- is the competition ready to take up the slack if nic nike raises prices? >> it is a great point you are getting to what long-term shareholders care about about. they care about the competition and if the industry is better or worse and if nike is less effective in capturing the share. it is fair to say industry growth is slowing. put china aside for a second the next few years, there are a

few points i think the silver lining is here, if you will. the first is nike now has the industry leading inventory position they went from being up 16% last quarter to flat this quarter on a unit basis, they are actually down double digits. this is across u.s. and china. this puts the company in a great position to be able to capture upside and when and if we see an up uptick in retail demand. as far as the kcompetition fron, we have competition from smaller footwear from on and hoka. that is great. it drives pricing power. that's what we like to see however, you do have another large footwear competitor which is dumping some of discontinued

product on the market right now. that is unhealthy. to the extension that competitors can clean up inventory situations, this should be a benefit to nike la lastly, i would mention as we he a -- as we are talking about the silver lining here, on the management side, the way they guided for fiscal 2024 was for operational improvement of 200 basis points as you recall, this company was taken to the wood shed with freight and margins. they are still probably 200 basis points of margin opportunity still left u unmodelled in fiscal 2025. i did not include us in that as a shareholder. we look at the validation proof points that nike is still relevant for a fund like ours which focuses on the millennial

generation this brand is relevant >> i'm sorry you are not victor i want to talk about victor, kevin. do you know or insight -- victor wenbenyama he had a deal in france. does it carry into the nba and do you now how big it will be? i hear it could be a blank check. talk about the size of the deal or sneaker he wears. do you know which size he wears? 20.5 he has a nine-foot wing span he will be a phenom. nike is already there which is what they do >> that is exactly right they are the ones that move in with the athletes. they are able to provide young consumers with an avenue and channel that is obviously very

inspirational and they are in the formational years. yes, nike continues to lean in whether it is football, basketball, all sports, women. all of these verticals, nike is leaning in i think part of the story of nike which is under appreciated is how they continue to reinvest and innovate and continue to be fluid and adapt with innovation. when i look at a situation like today, there is a lot of drama coming into the print today and a lot of that was really pretty well telegraphed by the company that they want to put themselves in a position to be nimble and flexible and capture demand as it unfolds >> he can stand -- did you

notice he's 7'5" with an eight-foot wing span. he can stand on his feet and touch the top of the rim are you excited about that guy this is going to be great for nike we will see a lot of sneakers. 20.5 go ahead >> i was going to say, if you see the movie "air" any phenom is great for the brand and great for the sport. >> all right thanks for rolling with the punches, kevin i was thinking about victor. that's why i called you that i know your name is kevin. kevin mccarthy what the hell does he know you showed up. thanks >> good to see you this morning. >> good to see you there he is. coming up, new warnings for foreign companies doing business in china a law takes effect tomorrow and putting executives on edge

we take you live to beijing. plus, m ohamed el-erian gives us his latest follow "squawk pod" and listen to us any time we'll be right back. the first time you connected your godaddy website and your store was also the first time you realized... well, we can do anything. cheesecake cookies? the chookie! manage all your sales from one place with a partner that always puts you first. (we did it) start today at godaddy.com

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constant contact delivers the marketing tools your small business needs to keep up, excel, and grow. constant contact. helping the small stand tall. new warnings on doing business in china. new law takes effect tomorrow. eunice yoon has more from

beijing. eunice >> reporter: melissa, not just one, but two laws. the law of foreign relations as well as the anti-espionage law together cover a broad range of issues on national security and also flag the beijing focus on security issues over the economy. from a business and investor standpoint, the law is worrisome because it leaves vague what constitutes espionage and empowers the authorities to have expanded control over corporate data and documents in the investigation for the undefined espionage activities the american and chamber of commerce highlighted this as a major problem saying the term state secret is poorly defined and it is really difficult to know how to comply compounding that is a clause in the new foreign relations law.

this clause requires foreign nationals and only rations in china not to evndanger security those activities are undefined in addition to that, the law of foreign relations suggests that chinese law can override international treaties and apply overseas with extra territorial enforcement and apply counter measures if chinese security and development interests are seen as being violated. again, that is not in any way defined. guys >> eunice, do we have a sense of what the punishment could be are companies worried that executives would be detained or offices shutdown >> reporter: absolutely. people are worried about exit bans and worried about detentions and offices being shutdown the problem is that the system

with so much uncertainty around the legislation and people don't really know what this all means. one thing that does come up in my conversations with executives here is they feel the slowdown in the economy, oddly, is on their side because the economic situation is so dire that the government here is going to want to continue to have and encourage and welcome foreign investment because of that, they might not see the application of the laws. however, these laws are still hovering over the way they do business here. >> eunice, thank you eunice yoon in beijing for us. coming up, the microsoft activision hearing is over now we await the judge's decision that could decide if the merger can proceed or not. details next reminder, you can watch or listen to us live any time on the cnbc app e ithoe.t at thwhe us

the microsoft activision hearing is over. now we await the judge's decision steve kovach has been following the case closely, joins us now with the latest. 50/50, 70/30. >> you mean the chances? >> yeah, what do you think >> i'll tell you what the judge thinks, how about that the ftc and the microsoft last night spent hours quibbling over the facts in this case, in their closing arguments and here's what the judge thinks. sounding pretty skeptical about the data the ftc's expert witness, a harvard economist, provided he tried to prove microsoft had an incentive to remove call of duty from playstation and lure a significant portion of

playstation gamers over to xbox. now, microsoft's own economic models and experts disputed that, of course. but now the arguing is over. most expecting a ruling within days because the deadline for microsoft to close the deal to buy activision is july 18th. now, if microsoft wins, it will likely move forward to close the deal here in the u.s., and the ftc may even just drop the case altogether but if microsoft loses, it says it will likely have to abandon the deal and pay that activision $3 billion rate fee. but that's just here in the u.s., guys even if it all goes microsoft's way here, the timeline just doesn't add up in the united kingdom where it is appealing regulators' decision there to block the deal a tribunal in the uk is not going to look at the case until the end of july. that's way after the deadline. so now the speculation begins. microsoft's options here, well, it can negotiate new terms with activision to extend the deadline by planning a new price above the 95 bucks a share they

already agreed on or it can find a way to close the deal, excluding the uk in some way, until the issue is resolved there. for now, microsoft is keeping that strategy secret we probably won't get more details in the next chapter of this drama until after we get the ruling from the judge in that case here against the ftc >> they could probably pick a couple of states that matter more than the uk to the actual revenue. >> exactly >> but can -- >> but it is tough to -- >> that's what i mean. is that really going to be the issue? certainly a big deal with the europeans, obviously. >> yeah, but the europeans approved the deal already. >> that's whati mean so you got that and if it goes microsoft's way here -- >> right, then the cma looks pretty silly to be honest in the uk that these major regulators including the toughest one in the eu said, okay, go for it, we agree. it's so messy, joe i can't even describe how messy

it is. who knows what's going to happen >> and when exactly? >> july 18th is the deadline the judge last night, she heavily implied, not saying in so many words, for one, it seems like she's definitely leaning microsoft's way. that was my takeaway after listening to the closing arguments and her questioning of both sides and then for, two, at the end, wrapping up, the evidence all has to be submitted today by close of business pacific time and then, you know, she probably said i'm not going to drag this out, i know we're on a tight schedule here, she's going to make her decision soon. >> a series of court losses would change the perspective -- >> that's the next question, of the ftc. keep in mind, lina khan, the chair of the ftc and her colleague at the doj, they have new merger guidelines coming out soon within a few weeks, most likely, and this is going to -- their thesis behind this, mergers like this shouldn't exist and we'll see what the

judge says, but this could be embarrassing for them. they spent their entire tenure so far working towards killing deals like this, and now they might lose the biggest one. >> trading well below -- >> 95 bucks a share. we know what the market thinks. >> steve, thanks. coming up, the fed's favorite inflation metric is due out at 8:30 eastern time we'll get a readout from marcus samuelsson, that's straight ahead. and the premarket, apple, bringing the market cap above $3 billion. "squawk box" will be right back.

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good morning markets look like they're set to close out a strong first half of the nasdaq, poised to notch its best six months in four years. stocks looking to finish on a strong note. futures, higher open hitting high gear, ferrari's stock is on the roll the market cap surpassing gm and ford and they only make about 13,000 cars a year. a look at what is driving the stock. get it and a new trend on tiktok has mcdonald's grimacing

details straight ahead as the second hour of "squawk box" begins right now good morning welcome back to "squawk box" here on cnbc we're live at the nasdaq market site in times square i'm melissa lee with joe kernen. becky and andrew are off today take a check on u.s. equity futures, we're poised to close out the first half on an upnote. the dow is looking at 107 at the open s&p looking to be up by 19 nasdaq higher by 80 points nasdaq up 30% so far this year take a look at the move in the treasuries we're watching the two-year note very closely 4.91% is where the yield is at right now. ten-year note at 3.872%. to dom chu with a look at this morpning's premarket mover. i was watching you earlier and

couldn't think of anything but the shoes, are those nikes can we get a pullout on those? >> they're controversial >> are they? are you hearing about that from anyone that matters? >> no, so the people that matter, the people that kind of sign off on some of the wardrobe, they're all okay with it and generally speaking it sits well with people in the office here. it is more on social media that people say it is very unprofessional or, like, hey, what a great look and everything so people always weigh in there. >> can i see your shoes again? oh >> the camera is stuck can you do a hand stand? >> i can't do a hand stand it wouldn't be safe. >> whoa, wow it is a blue suit, dude. >> it is very light. very light i feel like a darker sneaker might look more professional. >> i have 20 sneakers under my desk right now i cycle through them when you're in the office, you and i sit back-to-back with each

other, you can see my shoes. >> did you hear us talking about victor do you know what victor's shoe size is, including an eight-foot wingspan 20 1/2. >> that's, like -- what was shaquille o'neal's back in the day? >> remember when you broke through the shoes, stepped right out? >> oh, yeah. sorry, dom we got to go we got to go we got to go go ahead >> all right so let's get through the movers here let's start with speaking of footwear, nike, right? the dow component. the stock is down roughly just about 3% right now around, call it, i don't know how many shares of volume we're talking about here nike is coming off an earni ings miss we're seeing 50,000 trades so far in the premarket trade the mixed results after last night's close involved a revenue beat, a profit miss, by the way, first time nike missed profit estimates in the last three

years. gross profit margins also declined to 43.6%. but it expects those margins to improve on the full year guidance was also more tepid, navigating more macro economic headwinds, changing consumer behavior, changing retail trends nike a big earnings mover down roughly 3% also travel and leisure, shares of carnival up around 3% or so, 200,000 shares of volume the cruise line operator was up graded to buy from hold. it was $9 before they cited amongst other things a more efficient management team, lower fuel costs, continued momentum for cash flow generation, and then the ability to pay down debt so carnival shares catching a bit on that. and we'll end with a check on shares of apple. which are up fractionally, just around 120,000 shares of volume. but, the iphonemaker and online services giant dow component trading north of that $3 trillion market value in extended trading, $190.74 is the magic number to watch. given the most recently disclosed shares outstanding

a close at that valuation, by the way, would mark a first for apple. today, analysts at citi initiated coverage with a buy rating and street high $240 target price they cited things like smartphone market share gains, improving profit margins apple shares, you can see, pretty much bet on a straight line all the way higher, leading some folks to question whether the valuation is justed. joe, i'll point this out the biggest drawdown that apple has had so far this year has been 12% during the month of february that's the only real drawdown that we have seen. so there is a little question, joe and melissa, about whether or not apple can sustain this kind of momentum, guys. >> i don't remember what was happening necessarily in february but, yeah, that's pretty amazing. the only break that's one of the -- that's one of the stocks we talk about for why the nasdaq is where it is, why we're in another bull market that's one of them and pretty amazing. >> and, joe, also, you and melissa and i, we all know, it

generates a lot of interest from our viewers and listeners. always one of the most searched tickers on our website, just to check where apple is right now it is widely held. if you wonder why people talk about it so much, it is because a lot of people have an interest in what is going on, whether it be positive or negative. >> don't hear a lot of people saying, gosh, that -- you know, without steve jobs, this really -- i don't know. >> we also don't hear a lot of people saying they need a new product, or it is not going to keep going neither one of those -- >> remember when smartphone sales were supposed to be one of those things that were going to be a drag. they weren't going to grow them enough and services was going to be the big thing now it seems like there is at least some investor focus on all of those things, smartphone market share is still an issue, so -- >> yeah, no autonomous flying cars with the big apple tv set happening yet. >> or the skepticism over x thousand dollar vr headset. >> i don't know about that

though. >> they don't need it. like a trial balloon sort of thing. >> thanks, dom. >> you got it. in just a little while, we'll get the latest read on inflation and personal consumption expenditure data is released the federal reserve's preferred inflation gauge in the latest delivering alpha investor survey which consists of the nation's leading institutional investors, top strategists and cnbc contributors we asked for thoughts on whether the fed should hike rates. 74% of the par ticipants said they should pause, the rest think they should hike nobody thinks it is time to cut rates. for his thoughts on this and the markets, let's bring in mohammad el aryan, president at queens college at cambridge university. great to see you where did you fall in that survey >> i think if they are serious about the 2% inflation target, then they should hike. chair powell told us yesterday that a majority of the fomc

expects to at least two more hikes. if they're serious about 2%, they should hike >> do you think that they will have to give up 2% in some way or acknowledge that going towards 2% or touching 2% is sufficient seems like, you know, everybody talks about jackson hole, but jackson hole might be sort of a good time to sort of elaborate on that and expound their views. >> so, sara eisen asked that question at sentra and all three central bank governors, other than bank of japan, so ecb, fed, and bank of england, made it very clear they don't want to even talk about it the problem, melissa, we see it in the data on a weekly basis is that because the fed was late, inflation has gotten embedded in the service sector, and to get to inflation in the service sector via interest rate, you undermine the good sector. so that is the trade-off they

want -- they need to make. they want to maintain optionality right now. that's why they pause at the last meeting but let's hope that's not the model middle because getting to service inflation is tricky. we saw it again in europe today, headline came down, but coal went up. and that we are seeing as a repeated message in most of the advanced world >> right and then we have the sticky point of china, not doing as well as some people might want and some questions about whether beijing will actually embark on a huge stimulus. i asked this in the context of it being a major trading partner of europe and if china doesn't come out of its funk, that could impact the odds of a recession in europe and maybe even here too. what are your thoughts there >> it could. and i think china's 5% inflation -- growth target is optimistic having said that, you know, it is incredibly impressive how resilient the u.s. economy is, 2% growth in the first quarter, we're tracking this for the

second quarter and it is incredible how resilient most of the u.s. stock markets have been. you mentioned the 30% gain in the nasdaq, 14.5% gain in the s&p, despite, despite two-year rates being 50 basis points higher this year, despite the curve inverting to minus 100 basis points we have a resilient economy, and we have a resilient market despite everything that has been happening around it. >> how would you make sense of this all, though, mohamed? it doesn't -- if i told you at the end of the year that rates are going to be where they are, guess where the stock market is going to be, i don't know if many people would have said s&p 500 higher by 15%, nasdaq higher by 30% would you? >> and they wouldn't have. but part of the answer is in the apple chart you had up you had apple up 47% so you have a few stocks as we know that led this incredible surge up to about a few weeks

ago, then it broadened out and those are what i call either secular theme stocks, like the ai stocks, or weather stocks like apple, and now it is broadening, so you had that impact and then you had the other thing is that all the people who have been predicting recession, i'm not one of them, i've come on your channel over and over again and i don't know why the u.s. needs to fall into a recession unless there is a policy mistake all those people who have been predicting recession have been proven wrong the u.s. economy is much more resilient than people are willing to acknowledge >> so you think that the fed can go towards or move in the right direction of 2% and the markets can still go higher and we do not have a recession it seems like that's too good to be true. >> so i think if they insist on 2%, which means going after service inflation hard, they could undermine all this if, however, they're willing to

tolerate a 3% to 4% inflation rate provided it is stable, then you can maintain this. they're going to have a difficult choice to make and so far they told us they don't want to talk about changing the 2% target but that is what they're going to face internally they have to confront this issue as to how much do you want to bash the good side, the manufacturing side, to get to your service inflation because that is the problem right now. >> mohamed, how much should we be paying attention to the weakness in the yen, at a seven-month low against the u.s. dollar at this point and the impact that a yen carry trade is having on inflating asset prices here and elsewhere for that matter >> so, what we see happening with the yen, the yen nearly 145 versus the dollar is a function of interest rate differentials as you know, japan implements this very strange yield curve control, keeping the ten-year below 50 basis points. and the rest of the world is

seeing rates go higher look, it doesn't matter to us as long as they can exit yield curve control in an orderly fashion. and they have been waiting and waiting and the longer they wait, the harder it is it is like a exchange rate everybody knows you have to exit and the longer you wait, the harder it is to exit the question will be for us can they eventually exit the ycc policy regime in an orderly fashion? and the jury is out on this. we simply don't know we have not seen this happen before >> mohamed, we're going to leave it there great to speak with you and get your thoughts. mohamed el-erian. >> thank you, melissa. coming up, it is a busy time of year for restaurants, from hiring to dealing with inflation. red rooster owner and chief marcus samuelsson will join us after the break to discuss the dining experience and the consumer and labor issues and everything else. then later, ferrari shares hitting an all time high

yesterday, now up 50% for the year so far. the company is now worth more than ford or gm. robert frank tells us what's happening here, what's driving the shares of the italian carmaker higher. "squawk box" wl rhtacilbeig bk. this cnbc program is sponsored by truist wealth, where we focus on person to person connections so you can focus on what matters most since i was very young. dad played here. grandpa played here and then there was me. (camera shutter clicks) playing for camden high was a huge thing for me. it wasn't just high school basketball to me. it was way bigger than that. you're playing for the city. it's like in a way, the city is winning. (♪♪) (crowd cheering swells) (basketball swish) (♪♪)

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summer is the busiest season for many restaurants, which could lead to an uptick in hiring the industry expected to add half a million jobs this season, which would be the strongest seasonal hiring since 2017 joining us now to talk about what he's seeing, chef marcus samuelsson, owner of a lot of places, a lot of restaurants, like red rooster and street burn it is good to see you, marcus. if you had to say the old dickens line, the best of times and the worst of times, would you say it is the best of times or is inflation still so pernicious that it just makes it, you may have a lot of new patrons, but rent's up, food costs are up is it the best of times and the worst of times >> yeah, i mean, i'm listening to the segment before, and the economy and the people, we're very strong and resilient.

we heard about recession, but at the same time, you know, post covid people want to go out and we want to be with each other in restaurants. and summertime is always a tricky situation, especially for cities cities get more tourists and some places empty out during the summertime particularly for black and brown businesses, for minority-owned businesses, we have develop ed open doors, really an initiative that worked with both the minority-owned restaurants and the property owner because in order to understand the challenge that we have in our industry, first of all, black and brown people, capital is very, very difficult, but for the profitperty owners, they ha higher -- there is a lot of empty spaces and we come up with a program here that the property

owner can really take more risk and take more chances with new startups, right? which they don't have to, you know, for new business, it is very hard for new restaurants, very hard to sign a ten-year lease. when you can have a more flexible rent structure, a property owner can really work with a trendy pop-up, a newer business, that is really something that changes the industry, transforms it and makes the barriers go down for black and brown businesses in particular. >> did you ever have a hard time staffing your restaurants, marcus and did it -- did that cause inflation as well to pay more, to get good workers? >> yeah, sure. i mean, it is a very competitive market and you have to really be super creative about what initiatives, what are you doing, how do you keep your employees happy, but, yes, it was very, very difficult time sometimes but, for me, creating a great

work environment, it is equally important as creating a great restaurant part of creating a great restaurant is creating the great work environment at red rooster, we look a lot at our service staff and say what else are you, are you an entrepreneur, do you own a candle company, do you -- what else are your ambition if you are an entrepreneur, we can partner with you and you can do pop-up in our restaurants it is always about meeting the staff, where are they at, what are their ambitions, you create a creative solution and see the staff and have a happy staff, you have a happy restaurant. >> over the last year, what have your -- how have your costs risen just for input, just for the stuff that you use to make all the great dishes that -- as a chef, you're not only founder and entrepreneur, but you know exactly what you're paying for all the stuff. how much is it up? >> you have about 25% to 30% cost increase in a lot of places not just from the hiring side, it is also in terms of protein

prices have gone up and gas has gone up. so, it is very challenging, especially, you know, the restaurant industry is such a vitally important part of the local economies, so you got to be super creative. i have to also say our guests are sticking with us, they're coming, and you have to communicate and come up with smart and vibrant marketing ideas and staying in front of your guests, you know? >> marcus, you mentioned that it is so important and here you are, you've done it somehow. and you've gotten access to capital. you've gotten access to leases what do we need to do to make it easier for people to do that in urban areas or whatever? what would have helped you to do it even more easier or even more quickly or to have expanded even more what was lacking what can we do >> well, first of all, i've been extremely lucky and i had great

people to mentor me and, you know, really help me start the company and evolve, right? but, yes, it is really cutting down those barriers, right and making sure that hospitality as an industry has easier access to capital, to the institutional capital, or whether that is -- different forms of capital, is super important. at the same time, working with the property owner, very often you see property owners have a lot of spaces empty because somehow they make more money on having the places empty in terms of taxes versus putting someone in our industry always looks at trends and trends very often come out of the pop-up restaurant those restaurants that -- you can start your business out of tiktok, out of instagram and now you're not ready for a traditional restaurant, but you might be ready for a pop-up. taking that concept, and signing a three-month lease and being able to really drive a business

over the holidays, for example, can be game changing for that entrepreneur, for that restaurant and that's what gets the open doors initiative is really doing urban space here in new york city is a great important sort of food hall they have signed up, they're partnered with us and they committed to ten spaces over the holidays, and i can guarantee you, one of those spaces is going to be that might be the next, you know, next really incredible burger company. we don't know. because all these businesses started as small businesses and eventually got an opportunity and after that were able to -- >> we're out of time i was going to ask you what the most excitieing thing you got on the horizon is you're all over the place, everywhere are you working on anything nobody knows about right now >> well, what will be exciting

for me is when you come down to the restaurant, hang out with us and you see it, because once you see it, there is nothing like going to a restaurant, you eat and you see the staff and the great environment, you're surrounded by great people and that's why we love restaurants not just about ordering in, which is part of it. it is about being in the middle of the room and seeing how beautiful this machine of people, how it works, right? that's what gets you to come back that's my goal that's my summer goal. >> all right i like it. all right. we'll do it. marcus samuelsson, thank you. >> thank you very much >> good to see you happy friday all right. coming up, tiktok footing the bill for content creators in montana who are suing the state saying the ban there violates first amendment rights we'll talk more about the act and some of the issues the company is facing. as we head to break, look at the winners and losers in the s&p 500 this morning "squawk box" will be right back. time now for today's aflac

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now the answer to today's aflac trivia question. what year was the first macy's fireworks show the answer, 1958 it was held to commemorate the store's 100th anniversary. this year, the macy's fireworks show will air on nbc and peacock on july 4th, starting at 8:00 p.m. eastern still to come, the tale of two housing markets. a breakdown of what the numbers are saying about the state of the sector that's next. "squawk box" will be right back. throughout my 20-year career at goldman, some of my most rewarding experiences come from the fact that i'm an out professional but also that i'm an ally to other out professionals in the lgbtq community at the firm. parents or family members of gender nonconforming or transgender children, this part of our community has grown it is often invisible but it has

grown and they need forums to help them connect, to help them share and to help them to be seen and heard by others as our community's needs change, we have a unique opportunity to be there for one another so active allyship is there. let's take the opportunity

just got through a round of data on the housing market diana olick joins us to break it all down with a look ahead diana? >> good morning, melissa much of that data for the month was not just counterintuitive, but really just conflicting. bottom line, we're now smack in the middle of a tale of two very different housing markets. pre-owned homes versus newly built homes. may sales up 12% month to month and up 20% from a year' go p preowned pending sales are down. i chose pending because they're based on signed contracts and that's how new home sales are also counted why the divide there is twice as much new supply than existing and even more remarkable, there are now twice as many new homes that have been sold, but haven't even been built yet. on the existing side, new listings are down 26% from a

year ago, and the average home that is for sale is getting at least three offers so there is still tons of competition and that points to this very strong tdemand despite mortgage rates, more than twice what it was in the first two years of the decade. that brings us to prices for existing homes, they peaked last june and fell sharply when mortgage rates doubled in a matter of months hit bottom in january, rising now for three straight months. due to the supply and demand imbalance. new home prices, well, they were down in may, as builders have been focusing on more affordable homes, not to mention buying down the mortgage rates for buyers and so here we are, with the all important spring market officially over, and just one more note, melissa, yesterday th30 year fixed went back over 7%. >> i saw that. i wondered if that would put a dent in sales for the month and the next coming weeks.

investors are puzzled over the sector, they're trading at 52-week highs even at mortgage rates at close to 7% people just don't want to -- there is not enough inventory on existing, they don't want any fixer uppers, they go here and are they giving any incentives the home builders? >> yeah, absolutely. that's why the builders are doing so well, because they're able to buy down the mortgage rates. a lot of the largest builders have their own mortgage arms or deals with other mortgage companies, they can buy the rates into either the lower 6s or high 5s, much more palatable to a buyer walking in there. they can offer other incentives, give them more upgrades in the home, et cetera. the builders have much more wiggle room and they're also not just lower, prices some, but they're also trying to focus more on that entry level product, which is hard to do, given the high cost for land, labor and materials. that's what they're trying to do and it seems to be working. >> all right, diana, thank you

diana olick. >> sure. >> joining us, danielle hail, realtor.com, chief economist were you nodding, did you learn anything from diana? you know all this stuff already, don't you, danielle? >> i think she's right i think the point about builders this spring really trying to focus on the entry level supply, which is something they haven't done over the last couple of years because they haven't had to, i think that's one of the big reasons why we're seeing a difference in the new home sales market it is also much better supply. though i will note a lot of the inventory that builders have now is not yet started or is still under construction and so buyers in today's housing market are going to have to be patient whether looking for an existing home, we're just not seeing new sellers come to market as quickly, so they have to stay a while if they have specific needs for their house or if they're looking at a new home, there is more availability, you just might have to wait for it to be completed and ready for you to move in so, it is still a challenging housing market, but certainly

different market than most people expected coming into 2023 >> is it a different market than -- i know you're young. obviously not going back 100 years to know all these things, but seems like it is different just not -- there are so many different dynamics in terms of millennials or coming out of the pandemic, remember what vacation homes, you couldn't even find one a couple of years ago because of so many people wanting to be able to do that. do you know of any periods that are similar to this, does that give you any insight into how this plays out from here >> this is a really unique period you have the pandemic coincident with the fact that the millennial generation is hitting their peak, the largest number of millennials from 30 in the year 2020 and that's the age when a lot of people start making that decision to become homeowners after renting for a decade or more so the factors coincided to create the frenzied housing

market that we saw when mortgage rates were also at very low le levels, that created the means for a lot of buyers to make the housing dreams come true when it comes to home ownership. now we're coming down from that. on top of the fact that we have this large number of young people, we also have almost a decade of underbuilding in the housing market, the aftermath of the mid-2000s, so builders have a lot of room to build, if it weren't for current housing demand there are about a couple million to 6 million homes under built over the decade, and for context, we build about a million homes every year so there is a lot of opportunity for builders now looking at ilooking at thisr specifically, we expect prices to continue to soften but not by a whole lot. you have the strong demand and limited supply and hard to see prices fall when that's the case. >> throw in, you know, inflation, rising interest

rates, as you said, lack of, you know, the total underbuilding in housing in the last ten years. what do you think about housing prices has it surprised you that they're not up more? >> our original forecast was for home prices to go up more this year i think if you look at the fundamentals it does make sense we have seen some softness, affordability just isn't there for buyers, especially with mortgage rates remaining as high as they have been. that's one of the updates we made to the forecast, is to really retool it and focus a little bit more on affordability. so we have gone from almost a 6% increase in prices to accepting that they'll be down just less than 1% this year. i think the fact that they're not down more is surprising some analysts, but when you've got a lot of households that are looking for a place to go and rental vacancies also still relatively limited and rent still relatively high, it is tough to find a place to live.

>> we have anyone in the real estate business, it is, oh, my god, this is the greatest time to buy or sell to buy or sell but you -- you didn't sugar coat anything, danielle and it is, it is cross currents all over the place, including demographics, which makes it -- i'm really interested in vacation homes i need vacation homes to go up i used to need them to go down can you get them -- are they going up not making any more coastline, right? >> that's true they're not making any more coastline. i do think there has been a shift in demand, working from the shore is maybe not as easy to do this year as it was in the past couple of years that's going to be a challenge. >> should get on that bandwagon. i need to talk my -- we need to be able to work -- you're right, danielle we need to work from home. thank you. appreciate it. >> absolutely. >> i say realtor, i don't say realtor or nuclear >> you got it. >> all right

thanks. coming up, ferrari's race to the top and tiktok making multiple headlines this month from a ceo change to a ban in montana and a lawsuit they're footing the bill for and, of course, data being sent back to china. we break down the buzz around all this social media app. right now the futures, you can see, not up triple dinlgits anymore, but solid start for this friday. get the best of "squawk box" in our daily podcast, follow squawk pod on your favorite podcast app and listen anytime stay tuned

ferrari stock in high gear can the run continue robert frank, caviar, what is it, champagne wishes, caviar -- that's you, that's you, man. the stock hitting an all time high, right? i have a lot of questions about it, though, when we get done. >> okay. we'll get done ferrari shares hitting an all time high yesterday, up 50% for the year so far. market cap now over $60 billion. it is worth more than ford or gm ford and gm, keep in mind, make more than 4 million cars a year, ferrari only sells about 13,000.

now the reason for that valuation, faster growth and bigger profits the gross margin on a ferrari right now is over 50%. that's more than twice of tesla's gross margins, like louis vuitton or gucci than a car company. ferrari's earnings grew 16% last year analysts expect stronger growth this year. yesterday they announced the new 1,000 horsepower hybrid sf 90, 0 to 60 in under two seconds, price tag over $800,000 and they're already sold out the day they launched. if you walk into a ferrari dealer today, try to buy a car, which start at 2$230,000, go int the millions, you're looking at a 3 1/2 year wait. try ordering the new suv, you're not going to get that until 2026 at least unlike most cars, ferrari's actually gained value over time, mainly because demand far exceeding supply they're also one of the few

brands rolling slowly into the new ev transition, their first ev isn't expected until 2026 also helps that they have a $2 billion share buyback that they're in the middle of so that helps earnings per share. >> if you can't say it, you can't buy it >> the porasangue. that's the new suv. >> will there ever be no internal combustion ferraris and will it be worth $60 billion >> ferrari is making a big lobbying case in europe for biofuels to keep maybe not the 12 cylinder famous ferrari engine, but maybe like the v-8. >> you can buy an electric fer ferrari? >> that's the big question that's the question for the valuation of the shares, what is an electric ferrari? is it that much better than a tesla plaid to make a $300,000 car. >> that makes me sad i don't want to live in that world. the starter ferrari, i see

those. what are they, 230 they're nice. >> yeah. $230,000 car. >> will that ever be a everyday car for people >> it has a little back seat so people can put the small kid in there and call it a family driver >> porsche knows how to do it. there is 911s everywhere you can use that every day, it is quick not going to 0 to -- why do you want to go -- >> there is no back seat in the 911. there is a shelf for one golf club. >> my kids used to be able to, but -- >> what are you doing? >> not anymore >> that was a while ago. >> we got to get in a new car, a new porsche or new ferrari and get new angry driver video. >> what about the million dollar ferrari? what do you use that for driving to the palm beach country club or something? >> you don't drive it, do you? >> the $2 million car doesn't

even have a windshield or a roof you can't even drive it in the rain so there's that. >> those kinds of cars you don't drive, do you? >> they do but in florida or california, where they don't typically have nonsunny days. >> $60 billion sounds like -- >> it is a lot that's the question about the valuation. >> apparently we have an update that is so important -- >> it is important >> it is important all right. an -- so important to this guy in the control room. a follow-up story, robert reported last week on florida's new law limiting chinese landownership. >> yes, this is what we reported a new law in florida that prevents chinese citizens from buying any property in china the doj just yesterday filed a statement in support of that lawsuit against this law this law takes effect tomorrow so unless there is an injunction, which is possible, this law will take effect tomorrow the doj stepping in saying it

r violates the fair housing act and the 14th amendment this doesn't mean that the judge in this case is going to rule with the doj, and the litigants, but it adds more firepower to that lawsuit so the next 24 hours will be big for this case. >> there has been a rush to close. >> there could be a rush to close. it affects russian, chinese, venezuelan, a lot of different countries. >> countries that you're, like, yeah, i can see that, but if you own property, it is, like, is the money green? i don't -- that's really my problem? >> there are over 20 states that have laws barring chinese companies or chinese government officials from buying large agricultural land near military sites. that makes sense this is buying a chinese citizen buying a condo in south beach. where does that protect national security that's the question. >> property owner that is selling, we can all get along. >> and property owners could go to prison if they sell to a

citizen. >> that's unbelievable all right, super man how did you -- how do you change in a phone booth seriously. >> there are no more phone booths use starbucks now. >> chris farley, remember in the bathroom on the plane, his elbow came through the -- >> yeah. what would you be like >> can't fit in a phone booth. >> got to pull it off. >> got to bring the phone booths back the chargers in the street, they don't -- >> robert, great to see you. thank you. kt> coming up, a new trend on tiok grabbing the attention of grimace. that story is next "squawk box" will be right back.

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plus ask how to get up to a $750 prepaid card with qualifying internet. a new tiktok trend catching the attention of one of the most mysterious mcdonald's character. earlier revealing a purple berry shake in honor of grimace. this brought "me pretending, don't drink grimace shake trend. >> tiktok is a very popular

application. tiktok fronting the bill for influ influencers. it's great to have you with us let's start off with montana tick t tiktok is paying for all this. a lawsuit was filed challenging on first amendment grounds the case has merits. t tiktok made it seem as if they were not involved in the case. they filed their own suit a week later but it turns out they actually are orchestrating the

lawsuit and they are paying the bills and they finally admitted it this week >> why were they so reluctant? >> it seemed more of a p.r. effort than anything else to suggest that these people had sort of rallied on their own and were really fighting back. at the end of the day, this is a white shoe law firm, they're first amendment experts and this case is really important for tiktok's future in the united states >> how does montana even enforce that to not be able to download the app across state lines >> there's been a lot of questions about how you can possibly enforce this. the state has come ppared it to sports betting apps. >> where is the effort to ban

tiktok on a national level it was a reason why some investors bought into meta they thought a ban on tiktok would be of huge benefit that seems to have gone away a little bit >> there's been no shortage of attempting to ban the app. you see it on some college campuses they've banned it on the wifi and on the state level but there hasn't been any curtailing of the app. you've seen trends like grimace and the milkshakes there is no effort to ban it on the devices of teens nationwide or something like that >> i want it get to the report that tick tock could start an e-commerce business. it's not just linking to where you can buy something but it sounds like they actually want to be a retailer, take on inventory and also deal with the logistics of it. >> yeah, this is a really interesting report that this

would create a new tab within tiktok right now you open the app and you scroll and see all of these videos this would make a new button where you could potentially shop i think what's really interesting is right now we're at this place where we're seeing temu and a bunch of these apps taking off where chinese factories are essentially shipping goods straight to the door steps of americans. so it's kind of bypassing the structure we know of within retail if tiktok got into this, it would be really interesting. we've seen in at past year there's been talk about tiktok going into e-commerce, they could start live stream shopping this is huge overseas but not in the united states. it could be a little bit of a game changer given how much time people are spending on it. but i would say there's been a lot of talk around e-commerce

and tiktok that we haven't seen come to fruition yet >> so nothing new in terms of the rumors you mentioned sheehan. it's coming into the crosshairs of congress people who are looking into the use of force labor. and it sounds like the goods they may be selling could be kitchen products still, you have to wonder if this is going to help their battle in washington at all. >> i think that's a great point to raise it's certainly going to be one to watch i think watching what tiktok does next given all the heat on them and what regulators are saying about the country and the sheehan concerns, they are probably going to proceed with caution. >> great to see you. thank you. >> thanks for having me. >> coming up, apple hitting $3 trillion in mark cap we'll have the latest next plus breaking inflation data core pce is out at 8:30.

"squawk box" will be right back.

♪ (upbeat music) ♪ ( ♪♪ ) constant contact's advanced automation lets you send the right message at the right time, every time. ( ♪♪ ) constant contact. helping the small stand tall. good morning futures pointing to gains on the

final day of the second quarter, the nasdaq tracking for its best fu first half in decades. apple indicated it opens here about $3 trillion in market cap. we'll speak with an analyst today. and we'll bring you breaking inflation data the feds measure that and much more as the final hour of "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc live from the nasdaq market site in times square becky and andrew are off today let's take a check of u.s. equity futures at this hour. what a stellar performance with the s&p up by 15%. the dow opening higher by 101s

are despite the drag by nike earnings and the nasdaq set for a 30% performance. watching the 2-year very, very closely, 4.91%, the 10-year at 3.876. nike beat analyst sales estimates but missed profit forecasts for the first time in three years. margin pressure contributing to the lower-than-expected earnings in shares thanks to costs and higher markdowns the company said greater china returned to double-digit growth in the fourth quarter. the u.s. has been trying to get its allies to export fewer

exports to china they said they were not changing their financial guidance as a result of the restrictions and we're watching for key decisions out of the supreme court today. justices are expected to rule on the constitutionality of president biden's plan to give relief to student debt >> how are you doing >> i'll see if i can fight my way through it take a look at the s&p 500 finishing up a very, very strong first half, largely because not that many people expected a lot of strength from stocks.

i have a two-year look here. we turned the trend positive in the s&p 500. at the end of the first quarter, we've maintained this status of the bias being to the up side. the up side has come in these little four-week bursts. each times we've consolidated off that very minimal pullback. seasonal tail winds remain in play people returning with up side targets around 45, 50 or so. that gets you there. and that takes you back to where the final launch from the prior bull market started from that was a year and a half ago that we did actually peak. people focusing a lot on the split market very large stocks, certainly overrepresented by the mega cap growth stocks. we're doing very well. here's the small cap on a year-to-year basis still a big gap. it's been closed to a small

degree, outperformance by small caps my take is that's a 6.8% return in small caps. in the absence of anything els going on with larger stocks, you'd say that's a pretty good friend equal weighted s&p 500 also up about 5% year to date. it's an unbalanced return profile. it's a little less to worry about than if they're diverging in directionon talking about nike having a slightly disappointing report, gross margins not that great still pressures around costs in the business this is compared to starbucks and the s&p 500 going back to the end of 2019 so right before the covid crash hit. both built up huge premiums that people migrating into the elite global american brands and they've had this long hangover period since then, slowing growth to some degree, exposure to the china market is significant. they have been in lock step over

this period. so they still are getting credit for the quality of the brands, 25, 27 times earnings and struggling to get the growth profile back, joe. >> in behindhindsight you can g back it's close we're up 500 basis points. that's no small feat either. >> the market has been battle tested >> i don't think anyone could have predicted that the stay-at-home stocks and what that did to the overall averages it's just mind boggling that shut down we ended up with those unbelievable numbers in a lot of different sectors in the market. thank you, mike. >> we're talking about bringing

together the market intelligence of nation's leading institutional investors. top strategists and 61% poll said we've entered a bull market the other 39% said we're in a bear market rally. david, great to have you with us >> good morning. >> what do you think where do you fall in that survey >> i'm still cautious. i've been cautious all year. but it does look like it's been a great start of the year. looks like the equity markets trying to start the fireworks early. it's been a great half we might get to highs for the year i think that will depend on the inflation report at 8:30, but the market's doing well. i would argue that the challenges are still ahead the fed has not landed this plane. it needs to point the nose down more because one of the things that's happening here is this wealth effect from the equity market is keeping spending power

strong and the equity market will make the fed's job a lot more challenging. >> prices remain fairly resilient here if jerome powell is not getting help there or from the equity market either. >> the data would suggest there's more than one hike to go >> most are in favor of at least two. >> i'm beginning and some of the investors i speak to are beginning to consider three. why? housing, which is supposed to be very sensitive to interest rates are still very strong, labor market is rock solid economy is pobuoyant and now you've got this equity market. it's not a valuation point, it's a wealth effect point.

the last time we had this kind of inflation problem, it was not even 40% of usgdp. the wealth effect out of equities is four times as much as it was. the fed has to keep an eye on this equity market as part of its navigation >> we have a decent road map where the fed is going to go and the side effects that at least two hikes will have and higher for longer we'll have. yet we are still at these valuations one could argue, if you are a bull, that we've taken all of that into account and that we are still at these levels. >> yeah. and markets are smart but the s&p is 20 times this year's earnings i don't see a whole lot of up side for about the $220 of earnings i'm estimating for this year certain big, big companies in the tech sector that traded at 15 times earnings that, at valuations that are 30 times that

why are these valuations so high when interest rates are presenting a very fair and solid alternative? i think there's a lot of liquidity out there and the fed needs to do something about that >> do you think your view will change if we see a continued steep climb in the 2-year yield? >>es that not just an indication of where investors think the fed will go or the least risky to an alternative to short-term treasury bills could you make well over 5% in the next year or two, 18 months in treasury bills. i would think you would want to make three times or four times that in the equity market in the coming year to not take that riskless opportunity i don't think the equity market has a great second half. i think the challenges we've been talking about for a long time are still with us >> you should get out of the business if you're going to stay somewhere 5% for two years

>> my friend still in the business say do you sleep can a night light on you can't find an opportunity -- you put 10 grand and 5% you get $500 at the end of the year? you own any bitcoin? >> no. >> it's at 31,000. it was at 17,000 >> it difficult to beat those tech titans over the past year, several years and decade that's the nature of the equity market do you really believe there's more valuation and super earnings >> but when you're done, the fed will cut rates and you're going to be looking at 3%. >> maybe 3 1/2 and i think the 10-year treasury yield -- >> did you ever say bye, bye, bye -- >> no, not this year >> so we missed the rally? >> yes >> now you can't say it. >> i don't think now would be a good time to chase, no >> but that doesn't help anyone that listened to you for the last year. >> we like health care

we like big banks and insurance companies, which are benefiting tremendously from this many investors refuse to look at foreign stocks >> you could have bought the q, q, qs. don't you wish -- >> we do own these things and we've been overweight those things most of the past ten years and longer year to date underweight portfolios i manage, underweight big cap tech up, crying a little bit about it >> headaclth care is up single digits for the first half of the year >> i can do that myself. >> it's been a great year for big cap tech we did see in june broadening of the equity market. >> but you would expect clients to listen to you now even though

the last year -- >> they listen to the strength of the arguments valuation does matter. >> that and a quarter won't get you a cup of coffee. but the strength of the argument, is that what you tell your client? i had some great arguments, sorry about that 35% >> let's see the data information at 8:30. i would be careful in the big cap tech space look for some alternatives >> thanks, david >> pleasure. >> coming up, apple bumping up against a $3 trillion market cap milestone. what should investors expect in the third quarter and beyond fromec th's marquee mega cap that story and more when "squawk box" returns ( ♪♪ ) ( ♪♪ ) ( sfx: people celebrating ) ( ♪♪ ) ( sfx: people celebrating )

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>> with its premarket gain right there, apple's mark cap is over $3 trillion. it was at these levels early last year but never closed above the $3 trillion mark

joining us to talk apple, managing director, senior equity analyst. you think this time it happens, dan? and do you think the underlying fundamentals support that valuation more at this time than they did in january of 2022? >> yeah, i think it's an historic day for tech. i think when you look at the story here, specifically on the services tied, that's the key part of some of the parts i think a lot of the bears miss. i don't think it ends here at the end of the day apple continues to play chess while others are playing checkers. >> what -- you call it something that the bears complain that it's all been incremental. this hasn't been any quantum

leap in apple's product mix but that hasn't stopped. you can see it right there that obviously has a lot to do with momentum and the narrow advance that we've seen in the nasdaq obviously but apple has sit on a lot of cylinders. it didn't go from an 8 cylinder to 12 cylinder it just got a really good 8 cylinder >> what investors missed here is it's a golden install base cook has led apple through all the challenges from supply change and other issues. you've had 25% of the base not upgrade their iphone in four years. this is the the sum of the parts to the middle innings. but i think a.i. is going to be the next step. this is a flex of the muscle

moment for apple as well as tim cook >> the goggles will mean what do you think? does that help with the a.i. bill now >> i think -- at first most investors, oh, 3,500, they're not going to sell many our view is it goes back to that whole chess verse checkers this is all about developers getting more use chases. ultimately it's the bread couples to what i see them as building out an a.i. store for apple. i don't think you've seen that multiple projected this big tech rally, we believe the new bull market up another 15% second half. year >> so you think tim cook, you can check off a lot of boxes with him i talked about it earlier. i haven't heard anyone

missing -- i mean, we love steve jobs, we miss him but no one has said apple can't continue without the strength of that penalty. i mean, he hasn't superseded steep jobs but it's close. as you said, he's just navigating the supply chain issues and china issues, even political issues with china he eed p seems to be pretty good at that, too. but i do wonder whether he runs out of room at some point without that next big things maybe the goggles are it, i don't know >> yeah, i think that's been going back to the install base it's all about that install bait we think by 2026 they'll have the apple car. that's going to be ultimately for tim cook i think another sort of trophy case moment for

him. i think it's a master tactician move that's what you're seeing in this environment you look at the tacticians, the hall of famers, you look at cook and musk and tesla that's why right now there is an a.i. revolution. i think apple is another phase to reaching the $4 trillion mark by 2025. >> we thought about apple tv wrong. i navigate everywhere i go is on apple tv and then you throw some om of the things you need to have it for but they develop great content, too there's going to be an actual apple car you think is this. >> we think 2026 it's a matter of when, not if. and i think ultimately when you look how apple ultimately is playing this out, it's really about the install base, just

further selling into that. that's why from a mhad multiple perspective, the growth at apple continues to be underestimated quarter by quarter, despite many bears yell, fire in a crowded theater. >> i don't know. i can get you 5% on a 2-year note would you rather have that -- you feel safe enough to buy apple here rather than to buy the 5% note? >> because when i own apple, i sleep well at night. it's a double table pounder in my opinion >> sleep with the night light on you got to be able to find something in the stock market. i don't know it would take a lot. i can't wait another 40 years to get my money back and i'm still not buying a 5-year -- you know,

it's right for some people it's all about your risk profile. >> your time frame >> all right, you think it happens this time. and 4 trillion is next that's unbelievable. >> oh, yeah. this train's not stopping here >> i we can go zero to 60 in faster than under two seconds. you can't have a lot of fun if it's not one second. can you even do it in one second without losing your lunch you think? >> yeah, that's going to be tough. but i think you're going to see more and more innovation nothing's out of the realm >> thanks, dan >> thank you >> all right see you later. >> coming up, a new look at u.s. inflation core, pce prices due up in a few minutes. endeavor recently made an offer. still up 5% for the year

after a break we'll get key inflation data core pce prices for may are next that's when "squawk box" comes right back

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she literally would make me rip open a pack of salt, pour it in my hand, and i would, like, lick my hand. sure enough, i would always be the kid not cramping, i would always be the kid energized, ready to go. fast forward 20 years and i go from eating salt out of my palm to a drinking lmnt.

welcome back to "squawk box" and cnbc we are just seconds away from may pce, inflation data and personal income and spending, the fed's preferred measure of inflation is pce as far as futures go ahead of these numbers, the s&p looking

to add 20 points it is on pace for a 15% gain in the furst half of the year the dow will be up about 106 and nasdaq higher by about 91. on the 10-year yield we are at 3.8% is what i'm guessing at 3.872. rick, the numbers, please. >> yes, we are awaiting anxiously the read on personal income and spending. expected to be up 0.3 of 1%, definitely better than expected. we'll be paying attention to the perm consumption core deflator year over year that's been over 4% since september of '21 it wasn't been below 4% and we are now looking at personal spending is up 0.1, a little bit

light. real personal spending taking account of inflation is unchanged and here we go with the big numbers. personal consumption expenditure deflator, one over month up 0.1 and in the rear view mirror, we had 4.4%, which was revised up 4. 3%. we are indeed making progress there. 3 opinion 8% is the lowest level going all the way back to april of 2021. we look at the core deflator month over month, it's up 3.21%, exactly as expected. personal consumption year over year up 4.6% last month it was up 4.7 as i said, hasn't been below 4% in september 21. there-in lies the rub. when you look at recent data and

i try to always be fluid, it looks like there's a stubborn area that isn't going to dim nush any time soon 10-year note yields back just a bit. and my guess, the reason is, these numbers are less than last month and very close if not better than expectations but the overriding wisdom here that the chairman powell and the group keep hitting us over the head with a hammer is, yes, we are making progress but too sly sloely here's the issue do they put the chi m a deep freeze by going too high on the rates and what the temperature to cool over time? only time will tell, back to you. >> we got a little bit of a pop and the nasdaq higher by 126 and the dow looking to be up by 153.

let's bring in to two voices kevin cummings and tiff good to have you both with us. kevin, what's your take on the numbers given the market reaction that we're seeing >> it was very much in lune with our expectations coming into the number on the spending side or core improvement so very much in line with what we had thought coming into this morning's report >> tiff any, we think it's a very high bar for them not to hike in july i think there's still some question as to whether they get another hike in in the back half of this year but we have a lot of data. there's going to be a lot more discussion on that one >> we're watching the ten-year

note right now we're seeing that back down a little bit are you surprised at all at the market reaction in terms of we saw a little bit of strengthening in the equity futures. >> i'm not surprised at the knee-jerk reaction there's the ongoing took ache and that seems to take a bite as the sessions wear on we want to pay attention, especially on this holiday shortened week of trading and the fact we are coming back to a market that's going be to be in a new fast year, a knew quarter and there's a lot of issues going on even though we backed down just a bit, at 3.84 on the 10, we are up 10 basis points on the week look at that 2-year note yield right now it's at 4.88 i it closed at 474 this week

so the point here is is that we have made some progress. but when you take the week in treatle it's hard to not as a technician be fluid enough to realize 10-year notes have popped through a send line that comes in right around 484, 485 if we closed the and not think we're at las going to it and, rick, considering your basic thesis about the highs already being in and really that no more hikes make any sense, the market looks like it started to believe the fed a little bit more, whether it's portugal or i don't

know you -- >> you know, it's not that i have doubts but i would have to say looking at the charts that if i had to make a bet as to whether the fall high yield close for the longer maturity treasuries is going to hold, i would still say 60/40 yes but i was more 85/ 09% about a month and a half ago it isn't that the charts are wrong. things change. i think what has changed here in my opinion isn't necessarily what the fed ought to do i think what the fed ad to do what the market originally priced in with regard to higher for longer what changed is we're taking the calendar cycle of when the eases may come, disporting the yield curve a little bit it and that makes sense it me. the fed is most likely not going

to think it. >> they're going to be more in line with they want to be aggressive, almost in a show the world, show the other central banks that we are tackling. >> well, the markets don't seem to -- i mean, kevin, we are just talking to david bianco of the u.s. and he was saying there's a wealth effect with the stock market and some can argue this extend to the housing market, too. so and does that change your view of how the fed is going to tackle this? because that's a head wind, people feeling richer. >> sure. i think it all comes down to the

labor market, which has rauzed resilient despite slowing in the last couple of months. next week will be really critical to the july meeting if the fed can deliver on their message of the majority, the strong majority that powell referenced the other day of two or more rate hikes this year it will all be very data dependent. if ever the fed is more data dependent than it's ever been right now and maybe it seemed to even have been there in may. and their expectations for further hikes will be dild back more the line of president bostick. >> he said it's his job to potentially wait for the others to see that we avoid a more

serious con traction later this year i think that's and and it many and it seems to have piqued and is moving in the right direction but not just quick enough as the fed would look for here. if we're their narrative can chang pretty quickly, markets could start to reprice potential earnings sooner than what guidance has suggested >> tiffany, how do you think about the greater dent to the labor markets or the stock market in terms of rates is the greater impact, negative impact, which theoretically the fed could want it tame i flugs and two or three more rate cuts and an lending, et cetera.

>> the things that really tricky about this is there with be what we call known lynn areaities a recession doesn't just ease down nicely in contraction usual the economy chugs along okay and at some point you ektively wall of the cliff so i think that's kind of what the fed is dealing with here there's a lot of still underlying strength in the economy as a result of the pandemic-related stimulus. but that's not going to be with us forever pnd i think there's a lot of reasons to say maybe the second half of this year is not going to be as strong as the first half you have a fiscal policy that will turn more contract -- even though we're not seeing run on banks, credit is slowing and you are seeing tighter credit conditions if small businesses can't get

loans, ultimately they're not going to hire and that's going to slow the economy over time. everybody's has talked about this but monetary policy works through lags i do think we'll know the tightening and impact on the economy ahead of us. knowing that, i think it's very reasonable for the fed to, more cautious here. we thought they could be done in may and it would be a very reasonable thing to hold policies at these levels i think. >> the u.s. economy is into a and it creates for down risk if we do have a recession >> did that get pushed out and is there an indicator you would look at at to that drop is going to come in. >> economists tras diddally are

have against forecasting investigations and understanding exactly where that time-out is is very difficult to pinpoint. i would a, has really just been a linear trend from the peak and that linear trend would suggest payrolls are going to be neb tiff at the end of the year. in until i said ultimately they fall off a cliff at some point but i think the timing on this is really difficult. as i said, you do have a lot of economic supports. obviously you have the incestment potential from some of the fiscal policies that happened last year infrastructure so that's going o be a. >> i like how you didn't forecast the timing of it.

i appreciate your time rick, kevin, tiffany, thank you all. coming up, holly py wood jitters. the entertainment industry stressing out. even indiana jones may not be able to save the day we'll have that story when we return and in the meantime, look at the biggest s&p 35 p a 500 winners and losersrothla tee nthsm e sthr

welcome back to "squawk box. take a look at that picture of new york city. it's obviously very hazy we're still feeling the effects of the canadian wildfires and the air quality is unhealthy take a look at the fair value. the dow up by 152 and nasdaq up by 136 treasuries holding steady with the 2-year note. the 10-year at 3.883%. a mixed picture for the trio of companies that made their debut yesterday. savers value village

and fidel is insurance didn't fare at as well. space tourism company virgin galactic completed its first flight yesterday, carrying three paying passengers. the company previously said it could fly its second mission as soon as august it has a back log of about 800 passengers, pricing for seats over 200,000 over a decade ago and now $450,000 >> chinese fast fashion retailer sheehan is denying reports it has confidently filed for an

ipo. the company has come under fire that the company exploits trade loopholes. >> hollywood is on edge. industry watchers are paying close attention to the box office this weekend, along with another potential labor issue. julia boorstin joins us now. >> good morning to you well, the familiar star of harrison ford is back as underian a jones, returning to the big screen with disney's indiana jones and the dial of destiny. the whole industry and disney in particular are hoping the film draws movie-goers en masse this weekend the indiana jones

sequel is projected to bring in over $65 million the fact that the movie cost a reported $295 million to produce plus more for marketing does raise the bar for it to hit profitability. the question is whether this coming weekend continues the trend of that summer i think the box office is running 1.8% and down 19% since 2019 because of the writers strike, actors are not appearing on late-night films to promote its shows. now, take a look at theater chains they are still in the green for this year, particularly

cinemark, immess and. >> now we want to be more cautious about the opt sich could rebound to free pan for tg "mission: impossible" sequel and of course the "barbie" movie, which has been getting so much buzz >> what are we going to see? "oppenheimer," i hear, is only for certain people with calm demeanors, i think what have you heard, julia >> i mean, i'm very curious to see all of those movies. i, for one, will be seeing the indiana jones film with my kids this weekend, and i think that's really the question. do these familiar characters, these longstanding franchises, do they bring in a diverse aud audience not just kids, not just adults, and i think "mission: impossible" also has that potential appeal to a broad

demographic, but i think there's a lot of concern when you see the box office continue to dip instead of surging with some of these familiar names like ""the little mermaid." the question is, is this just a little blip? is this reflective of the fact that for kids, there's so much content at home. i have a lot of pent-up demand for movies right now >> you do? even an 80-year-old indiana jones? i'm not ageist, but i just -- i'm not sure >> but you mentioned the age >> i did i'm just not -- i don't know i like the mule. did you see "the mule" clint? >> oh, yeah. >> pretty good all right, but when he was, like, punching people, i wasn't -- i don't know if i bought that. thanks, julia. coming up, top stocks on the move ahead of the friday morning opening bell we'll be right back. that advances innovations like robotics. fresh, warm hot dogs, straight out of my torso! one for you, one for you. oh, you're a messy one. cool, right? so cool.

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a little more than half an hour until the opening bell on wall street. dom chu joins us with a look at some of the top market movers. >> new on the earnings front this morning, constellation brands, the beverage alcohol company behind brands like corona beer, svedka vodka, it beat on profits and revenues,

thanks in part to an 11% rise in beer sales, led by its modelo especial brand they have the rights to sell modelo in the u.s., so a bit of br profit taking. nike is down 2.5%. they reported mixed results after last night's close gross profit margins declined and are forecast to call again during the current quarter, though full-year margins are expected to improve. guidance was on the tepid side as it navigates macrowinds we'll end on apple, up about a percent or so. the iphone maker and services giant and dow component as well as trading north of $3 trillion in the premarket 190.74 cents is the price to watch. a close at that valuation would

be a first for apple analysts at citi initiated coverage with a buy rating and a street high $240 price target. they cited things like an underappreciation of gross margin expansion and the continued shift toward higher margin services. apple shares have been on a straight line so far this year, so a lot of questions about whether or not that momentum has a valuation that is now justified, melissa back to you. >> what is it, 30 times now? 31 >> yeah, forward earnings. >> dom, thanks dom chu. for more on the markets, mimi duff i want to start with apple and not necessarily i'm not asking to opine about the stock i know that's not what you do, but what does a stock like apple tell us about the market that it can hit a record high here, going higher and higher, trading at a steep premium to the s&p 500 overall, and yet, we're entering a period where we're expecting two more interest rate hikes. we haven't seen the full extent, perhaps, of bank credit issues

there are a lot of question marks when it comes to the economy still. what does this tell us about the market >> i think your point about the broad market is up healthy this year, but if you look under the covers, you really have the winners and losers, like the regional bank index, for instance, is down close to 30% on the year. so, certainly winners and losers this year. in terms of the fed and their likely action, powell reiterated the other day that they -- the median estimate is for two more hikes. i think the way to think about that is most of the hikes are likely in, but our stronger conviction is that we will stay in restrictive territory partner qu for whiquite a while, and we've seen those eases taken out of the pricing, but we don't see any eases for the coming part of the year and then, in addition to that, i don't know if it's one or two or three more hikes, but we're already in restrictive

territory, and that's going to take a while to play out in terms of softening the economy, which is probably still too strong to meet the fed's inflation targets. >> you're underweight equities, mimi how long have you been underweights we've seen such a performance. nasdaq up 30%. did you miss that run? >> no, so, well, we put some hedges on a couple months ago, and we think that's the prudent thing to do, because of the tighter credit standards coming forward. it's going to take some time to play out, but you know, equities are up very strong this year, but we do think that there's worse picture in the future. >> so, you're hedging via options? i mean, options are super cheap right now. >> that's right. we put some options hedges on to protect the gains that we have

seen >> what areas are you enthusiastic about >> on the fixed income side, we like front end tips. they're priced for perfection, one and two-year break evens around 2%. we don't think inflation will come down that fast. we also like emerging market funds. we think yields are -- it's healthy to earn those yields we're mostly neutral in fixed income, and on the equity side, as you pointed out, we have shifted to underweight, and then we also continue to like real assets, in familiar, uranium, where we think that will benefit from the energy diversification theme. >> mimi, great to have you thank you. in a final check on the markets, which did tick a little bit higher after those numbers that we got at 8:30, now up 170 points on the dow. nasdaq, another -- tacking on another 138 points of course, apple is helping that and the dow, actually. the ten-year is closing in, once begin, on some of those highs.

3.88%. i'm sorry, 3.82% coming down a little after those cooler, i guess, numbers, or as expected numbers, and then the two-year, just under 5%. yep. you may have a weekend, but you can run, but you can't hide. >> i'll be back monday but before that, i'll be here at 5:00 >> yes, you will you always mention that. i'll see you monday. good weekend make sure you join us next week. "squawk on the street" is up right now. ♪ good friday morning, welcome to "squawk on the street," i'm carl quintanilla with david faber, sara eisen at the new york stock exchange. cramer has the morning off we are wrapping up the month, quarter and first half with a strong batch of news headline pces in line. futures strong as yields are down apple, nike, banks, semis and travel today on what could be a messy holiday weekend. our road map