down 160 points on the dow. the treasury secretary janet yellen arriving in china. we will take you live to beijing. meta platforms launching its competitor to twitter called threads, we will show you what mark zuckerberg said about the new service. "squawk box" begins right now. >> good morning, welcome to "squawk box" on cnbc, we are live from the nasdaq market site at times square, all three of us are here. >> all of us in yellow, how did we do it? one of these is not like the

other. in combination, as you can see right there. that looks really good. it is cub scouts. >> it started out, yes and then there were the bears and the lions and that's the acronym. >> let's look at the equity futures at this hour. you will see there are red arrows across the board, down by 164 on the dow half a percentage point in the same story for s&p, the nasdaq down 61. looking at the treasury market you will see yields for the 10 year are below 4%, 3.977, two- year 5% at 4.97, the minutes from the latest meeting show all fed officials expect further tightening to be

likely, slower than the rapidfire rates we have seen since 2022. members say that a brief pause would give time to assess impacts of the hikes on the economic activity with hiring and inflation, other issues. if you thought they were done, they don't or they didn't when they last had the meeting. >> oil is acting a little better. above 72. i don't know if we looked at it, but then car sales. >> the demand for car sales keeping prices high. >> that is one of the things we were supposed to get relief from, used car sales. >> a lot of people were waiting and i am still waiting. >> still hard to get one. >> if it comes off the lease, you should buy it.

>> i am on it. >> you were on it last night and you know it's not some kind of drug, it is meta platform the threads, twitter like app debuted last night, was supposed to debut today. they are billing the service as the instagram textbased conversation app. people can follow the same threads. what makes it easy is you can just follow anybody you already follow on instagram and reply to the public post in a similar way as you would to twitter although it is linked to instagram it is a separate app. there is not a button in instagram, but it's pretty cool. looks and feels almost exactly like twitter, i don't know if it's better in terms of the different features, i'm sure there are features they are

working out. mark zuckerberg ending his twitter silence tweeting this. here you have got it. >> okay that's the episode of spiderman where there was a fake spiderman. >> this morning on threads, i am already there. mark zuckerberg, you should say threading maybe or posting, posting that they already have something like seven or eight seven or 8 million downloads. 10 million? >> i heard the latest was 10 million. >> that's the newest, but you wouldn't know the difference. >> does it change the authentication process? the reason i am using twitter is because i don't know who is what. i feel like i get dumber every

time i read it. >> the old blue checkmark system that applies to instagram will apply to twitter. >> how do you get a blue checkmark? >> i don't know. >> does not know how he got his last blue checkmark. >> the good thing, good news, bad news depends on who you are. you don't want one, but in terms of the way they have done it. it's similar to the way twitter had done it. not a paid system, based on whether they think you are verified, if you think you are next group. >> anyone you are following on instagram you can follow that does not help me. my numbers would still be zero. >> i don't follow a lot of people on instagram. >> this goes to the town square idea. what i feel about this is a little bit of walter isaacson was saying yesterday.

you can see a vulcanization of how this could go meaning the idea that you could have a townsquare, if this one works. >> fox cnn? >> it might break down different lines. there are some people who are already posting aggressively posting on threads. people who were n twitter you can see they moved. >> i don't want it to be the anti-twitter. >> i don't think it is, but anyway i am excited to see what they do. i think it will create a nice little competition or race between the two of them. >> the journal weighing in, we talked about the judge's ruling and it does go back to the days when twitter and facebook were very compliant with what the government wanted. twitter no longer is, but if you read the conjecture, facebook was really really

eager to please its overseers in the biden administration. now it could be like that. go back to the threads for everybody who wants to see what they feel the ministry of truth and then twitter. that's where it's going. >> what i used it for was a news source. >> i have been liberated by not having the blue checkmark. i don't know who this is. he is out of his mind. it's not a joke. i'm telling her she wasn't here. plausible, don't you see when somebody hears something for the first time and it's like we talked about that quite a bit, but i may or may not be me if i call someone something. >> if you don't like what you

wrote then it wasn't you. >> everybody says we get hacked. >> the truth of the matter is that it is still on facebook, on twitter, on all these companies to decide whether they're going to comply. >> the government has ways of threatening you and your business which is much different from a company calling and saying i don't like what you're saying. totally different. >> there have been many instances over the years where the government has tried to chorus media companies it is not publishing articles. and it's bad. thank god the guy, the judge we talked about that. >> the point of it is that it really should be on the media company or on the tech company

to decide what they will amplify and what they're not going to amplify and you are right sometimes they should push back and maybe they haven't and sometimes they don't, but the idea that the white house or any agency is not allowed to send a note or email and say this i like, i think they should have the same freedom. >> do you wish we had the biden minister of truth? it is not about the biden. >> it was and provide to say no this is not happening this is not 1984. do you know how much harm was done with all the vaccine stuff and all the covid stuff that wasn't printed at the time because you couldn't. you couldn't say anything. >> that's not true, it could be published but people chose not to. >> you think alex bernstein could publish what he wanted to

publish? how could he publish on twitter. >> twitter is a private company. >> they could of published if they wanted to. >> they censored all 12 people, all 12 individuals that the government set on facebook don't let them do this. >> if you have a gmail account or outlook or name your email account and the government, a prosecutor even decides they want access to your email, they go to the company and they say we are trying to get access to your email. sometimes the companies push back as i would argue they should and sometimes they don't, but it is on the company. the idea that the government is not allowed to ask. >> they were not asking they were threatening. the government is threatening to do things to make it harder. you think they have no teeth?

that's not just suggesting. it is coercion. >> what i am suggesting is in a instance with through clear threatening coercion that should be illegal. that's not what the judge decided, the judge decided any agency cannot send an email or communicate at all. >> the less in cases of illegal activity, that's the sidenote. >> yes but i cannot espouse a view on anything except something that they think is illegal activity. >> the supreme court will probably quickly take it up. >> it seems to me to be a bad precedent. on the flipside, do disney florida, ron desantis, just do it. that's a similar case. talk about abortion. >> prior to that you do not have problems with the woke coercion companies.

>> then you go to a judge and figure out the judge and if you believe the courts which are in your case stacked in a certain favor and you will see where it lands. >> how about if tech companies were held responsible? >> they are allowed to do whatever they want. >> take away 230. and then they were responsible. >> take away 230 that nobody would say anything about anything ever. >> maybe that's the way to go about it. make them responsible. >> section 230 the idea to say stuff and nobody is held responsible. >> if you don't then you cannot like to 30 my friend. >> i'm not saying that. i don't want people to decide i can see it, even if he's out of his mind.

the amount of harm that was done in the old days when it was compliant to the government said, we saw what happened to this day. still don't know about wuhan. we were not allowed to say the possibility. we cannot even see it back then. >> when we come back we will talk about portfolio strategy with the dow pointing to lower opening on wall street, indicated off by 650 points. later the fda decision expected on a new alzheimer's treatment today. we will tell you what you can expect. you are watching "uasqwk box" and this is cnbc.

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treasury secretary janet yellen landing in china, joining us live from beijing with the latest, eunice yoon what can you tell us? >> during her visit, the secretary will meet with the chinese presidents new economics teams, many who are unfamiliar to her in the biden administration. she will consult with the business community and

communicate directly what the treasury describes as areas of concern and discuss global challenges such as climate change and debt distress. based on official commentary and state media reporting the chinese are seeking signs of sincerity so that is some combination of a reduction or spend of trumpet era tariffs on chinese goods with new sanctions on chinese companies and individuals and stopping export curbs, the argument is that the tariffs only exacerbate inflation and that the curbs and the sanctions are also bad for u.s. companies. janet yellen viewed as pragmatic, in the past she has talked about skepticism of the benefits of tariffs, she calls decoupling disastrous and she says she is looking to find common ground and certainly the chinese are looking to find common ground, they are incentivized because of the

poor economic condition and increasing concerns that they have about what looks like washington has a coordinated effort to de-risk, the allies of the u.s. to de-risk and wean themselves off a reliance on the chinese economy. >> thank you very much. eunice yoon. our next guest says the bear market is over, looking to broaden with compelling entry point across many asset classes you want to talk markets with global investment strategist at j.p. morgan global wealth management. why do you think the bear market is over? you think the economy will not be as bad and the fed is backing off? >> things have been more resilient than a lot of people feared and we welcome the as a good thing. important to look at the

earnings with the equity market which sector by sector has gone through this contraction so given that we have had a lot of c-suite taking measures to sure up margins that should make them better able to navigate what could be a bumpy road if there are backdrop falls apart. >> if you think there are attractive areas of entry, what would they be? as the markets have run so far the first half of the year. >> a lot of investors are scared by the valuation of the broad s&p 500. stripping out the seven biggest names in the index or looking at the equal way to value the index those are below average. so we do see stock picking opportunities in large caps and taking a long hard look at the mid-cap equity space we see the potential investors to position for a reset of the cycle. >> don't you think the s&p 500 itself gets higher or do you think the big high flyers will

pull back? >> we are close to the year ahead targets for the broad s&p 500, navigating with some selectivity and emphasizing to invest on alpha not later, but there is upside and it is important to remember what it is we are hiring equities to do in the portfolio, to be the engine a multi-years capital appreciation. we still think over the course of the next 10 to 15 years the s&p 500 will annualize total returns of more than 7%. >> when does it break out into all-time highs? >> million-dollar question. we don't think it can be the next 12 months, but it's not unreasonable to get back to those started in 2022 over the course of the next one or two years. >> yesterday we had someone say not even one or two years. that this is an extended trading range, maybe not to the

october low, but 4040 400 and then 4000. i don't know any strategist that have a year in the target above 4400. do you? what is yours? >> the year ending target is right about there. at this point we are focused on 12 months ahead. that outlook is around 4500 for the broad index spots does not seem worth it. >> alpha over beta, there are opportunities for active managers to pick and choose the right winners. >> when did you raise your target? >> when we published the midyear outlook in may. the end of may. >> where were you before? >> we did not have a 12 month target. >> you were lucky to be 3500. >> we don't expect the index to revisit the october low.

>> that's good, that something. >> technology stays in leadership? >> we are starting to think about other ways to play the big tech themes especially artificial intelligence, especially given that those names in the space look overvalued. we are looking for opportunities in the mid-cap where you see attractive valuation and where we think the next leg of the rally could broaden. when we come back on the other side of this, new survey data on tipping culture. see who is cheap and who is not and what the responsibilities are. how americans feel about tipping screens at the point-of-sale terminal. i expect it at walmart soon. as we go to break look at the premarket winners and losers on the s&p 500.

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welcome back to "squawk box". 30% of americans think that tipping culture is out of control. i think i will add myself to the list. a pay increase survey found 2/3 people have a negative view about tipping especially when it comes to no contact point-of- sale programs like toast you're probably seen them at a lot of stores. in the most recent report tipping at sitdown restaurants has held steady, tips at quick

service restaurants dropped to a five-year low of 16.7% in the first quarter, that a surprising that it had fallen given every time i seem to go to one restaurant i am paying 25%. 20, 25, 30. >> five, 10, 15. >> what stores are you shopping at? >> when you show up to just pick up. when you go in to get it. >> for whatever reason it's often 20 or 25 or 30%. it is crazy. for picking up food. what is the standard at starbucks? >> five, 10, 15. >> in the city? the thing that is so fascinating is you used to give a tip not just for the service, but also out of moral obligation that he

felt the people doing the job were being underpaid. i'm not suggesting they aren't still, but one of the things that has happened is that it has gone up, we have a friend who owns a ice cream and some of the kids working at the store, because of the tipping are getting paid 25 or $30 an hour. i don't think when i went to the store and was pressing buttons that ever thought the kid was getting paid 25 or $30 an hour. >> i'm glad is finding its way to those people. half the time i figured it prices are higher >> the craziest thing i've ever seen for a tipping suggestion. i bought something online from a small company and they suggested a tip on the website where i was purchasing it. i said no are you kidding me? >> raise the price and put the. >> if you go to the place a lot, a lot of times, they know

you're coming back. >> the places in my town where i go i always tip. >> dominoes? >> when you pick it up, it might be different when he comes. >> here is the question. we have a lot of small business owners here. i want to see what he has to say about this later. he tried to get rid of tipping and build it into the restaurant fees. >> it's not fair to the people on the back end. >> it didn't work, but where i was going is let's say you are paying 18 or $20 per hour and then you invest in the host machines and then all of a sudden the numbers are 30%, getting $30 an hour. name the number there is a big question about and i know small business owners talked about this, do they lower the hourly

fee that they are paying because the tips have moved up? are they supposed to take a piece of it? the tipping culture has changed. by the way this is a uniquely american situation. >> a guy over in paris, i got the cab and he says you already paid. >> restaurants in europe maybe 10% or not at all. very interesting. that's why i'm more interested as tipping as a moral issue. interesting you do it here but not most other parts of the world. >> they have better health care. >> do you leave a 20 in the hotel room every time? >> i do, yes. >> some say they don't do it at all. they said they don't. and the coo of hilton says

you're not expected to because the cleaning services and god bless them, but this goes, this is why, is it a moral or economic question? ytngouss what, if you forget anhi y are not getting it back if you don't leave a tip. i have had to return stuff.

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good morning everybody, welcome back to "squawk box". live from the nasdaq market site in times square. there are some green arrows on the futures, not as bad as earlier, the dow futures off, the nasdaq down by 68. >> meta launching the twitter competitor called threads, starting last night one day at a schedule, days after elon musk said that twitter would limit the number of tweets users can read on the platform leading some to seek an alternative. joining us is wall street journalist senior columnist and

cnbc contributor. i followed you last night. i don't know if you saw, but i am on threads with you. what do you think? >> i think it is really good, it is pretty funny all the talk of the meta-verse, the most possibly popular product in years is a tech space app and i will follow you back. >> is a long-term thing? somebody wrote as i was looking at it, they said this has clubhouse vibes, clubhouse being the voice audio product, the social product that was hot for about a minute, during the pandemic, but quickly lost steam . >> i think it has a early days of any social media service of vibe which means everyone is excited, everyone is there and there is a huge linkup for threats because it integrates

with instagram. i followed you as soon as i logged in because i follow you on instagram, i logged into my new account, i was able to follow everyone that i follow on instagram so you're there with your instagram friends and then you find twitter friends and facebook friends. it is pretty exciting right now. staying power is the big question. i don't think it is a mass appeal that, this is about capturing more time of the already existing service. >> the thing from a advertising perspective that advertisers will flock to this? have they built a better mousetrap? i don't see advertising on this currently. people have long said the problem with twitter from advertising was the mousetrap, the construction of how advertising works on twitter does not have the same efficacy as it does on facebook and

clicking on instagram ads i have not historically clicked on twitter ads, do you think that will change the format? >> there are no ads right now. i spoke with the vp of products, they want to launch with ads and clearly they will come. they will have a user base and they will want to monetize it. i agree twitter has not been a great ad experience, maybe if meta can innovate, they have not done much, this is a twitter clone a lot of copy and pasting from twitter. maybe the innovation is advertising. maybe it is more dynamic or visual, certainly you already look at the ads on instagram so bringing that over will not be difficult. >> what is your sense of the product and the feature set itself and one of the things

elon musk is doing and he gets criticism, but there has been more innovation at twitter over the last six months than there had been over the last six years. i can finally watch a video on my phone off of twitter and be outside of the twitter app. it seems like threads is i don't want to say bare-bones, but it does not have all the future feature sets. >> it is not have half of the features and we list a lot of them, there's no following, there is nothing if i just follow these people, right now it is a algorithmic feed with no chronology. there is no editing button, there is no direct messaging, there is no hashtag so there's a laundry list of things meta has to do. not very hard things. they have them in other apps and they want to justify they have the user base and

according to mark zuckerberg in the first four hours that 5 million sign-ups. not the size of twitter or instagram, but a good size. >> i think it has doubled overnight. we might be at 10 million. >> see, off for a few hours and look at that. >> final question, in terms of innovation and speed, we are watching what's happening at twitter with how quickly elon musk is pushing the team and engineers, how quickly do you think those features will take to get onto something on threads ? >> i think weeks for some, months, but this is a long game for meta in the sense that it is looking to capture the people already on twitter and they are looking for a alternative and already on instagram.

with those two things combined meta can capture quite a bit of time from maybe not as big of a user base, but it is solid. >> great to see you this morning. see you on threads and twitter and instagram. >> when we come back from a ups and the teamsters union say contract negotiations have stalled. we will talk about the odds of a strike next. and we will talk about everything from social media to ai. "squawk box" will be right

back

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negotiations have stalled on a new labor contract raising

the risk of 300,000 delivery drivers and package servers going on strike next month, the company and the union accusing each other walking away from contract talks. here is the transportation analyst on closing time yesterday. >> both ups management and the teamsters know that you probably don't get the best deal until the 11th hour. they will not get the very best deal until july 30th the. >> the deal expires on july 31st. news alert, another waking thought and he has a lot of money, so pay attention. this has to do with about-face on vaccine policy. in 2020 when he said the lane covert vaccinations for older americans seemed like genocide. now he says he listened to democratic presidential candidate robert kennedy junior and thought he raised important

issues about vaccines. he says he does not think we fully answered questions about the safety of all vaccines, particularly some recently approved, i guess we're talking about the mrna vaccines. when asked if he thinks kennedy should be president he says i don't know yet but i think he is asking important questions and raising interesting issues. i will say, the rise of autism being linked, there are countries in europe that have completely gotten rid of those delivery vaccines and the autism rates are the same. so it almost reminds me of the cell phone brain cancer fears where if used it .0001 times the number of people using cell phones there would be virtual explosion of brain cancer so i

don't know what's happening with autism. i have no idea, but i don't think it is the vaccines. with myocarditis and heart information, covid itself 10 times the level so the vaccine may in some cases cause myocarditis, but if you got covid, it is all give-and-take. i don't know what else needs to be studied, but a lot of people are jumping on the bandwagon about vaccines. >> about things that twitter couldn't put on their website because the government told them not to. back to the original discussion. >> you have vaccine aversion, you are likely to have it and polio is back. >> i will tell you that the intention of trying to get people to take the vaccine

during the middle of covid cover the government was well- intentioned. but it is impacting health, coming up, the fda decision expected on a new alzheimer's treatment today. we will tell you what to expect next. 26,000 per year and we know about the aging population. better think medicare is going up. letter, don't miss the interview coming up at 4:00 pm eteasrn lily! welcome to our third bark-ery. oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network.

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. the fda is expected to make a final decision on the alzheimer's treatment lakemby today. it is made by the japanese pharma company esai and biogen if approved, the second drug in the u.s. to treat alzheimer's. the expected price, $26,500 a year joining us now is kavita patel, former obama white house policy director so hard to name drugs that there is a leqembi. we should hear today whether the cms is going to cover this and it looks like it was unanimous fda panel, so it looks like it gets approved and there is some body language that the cms is going to say, okay, we'll cover

it. >> cms is earlier already indicated they would put together a coverage program, what we would call coverage with evidence development, essentially asking neurologists and treating physicians to put data elements into a registry to make sure that we're sharing information. by the way, we saw this same sort of requirement with taver, the cardiac procedure. i think cms is trying to send a signal that, yes, indeed, if fda gives it a full approval, it is under accelerated approval now, but with no cms coverage this full cms coverage with conditions signals they will indeed approve this, cover it, both cms and the fda, but the devil is in the details because not everybody can get access to it, even with full coverage. it is not a very easy drug to give. >> eventually, though, eli lilly it looks like maybe the amyloid protein is important, not just the result of, but perhaps involved in causing alzheimer's. so we're going to get drugs for

this, which, you know, eventually we have to face what this means for our healthcare system and how much things cost. and i don't know how you think we should approach that. because other medicines are helping us live longer in a big way, quantum leaps, along with that comes some type of dementia, it seems like, the longer you live. so you have to have more people at $26,500 a year. we'll break the bank, kavita. >> yeah, yeah. look, listen, this is -- especially because the goal of the drug is to try to catch people in the early phases, mild cognitive impairment, may not have a technical diagnosis of alzheimer's at the time. if you look at the aging population as you said, that can get into right now about 6 million that we think have alzheimer's dementia, that can grow even in a decade or so to double digits and then when you think about people that are right before alzheimer's, even a larger population, as high as

10% to 20% of the population to your point, yes, this is expensive. that $26,500 sdoesn't get into the costs of the other services that are required. this is a drug administered by iv under monitored infusion, monitored for at least 30 minutes to two hours after that, once every two weeks for at least 18 months. so, it is not a trivial undertaking and then the nursing staff, the physician staff infusion chairs even at just large hospitals, which don't exist in many rural areas, which means we're going to have an access problem for majority of america that can't get to one of the treatment centers, not to mention you try to make an appointment with a neurologist, not very easy to get in. we have to retrain our system to take on this problem along with many of the issues of an aging population very similar to what japan is facing as well and they're trying to get creative about access solutions, including to drugs like leqembi which we expect approval after fda

approval. >> we need a pill and the offset is that the long-term care for someone suffering from alzheimer's is really expensive too. so, i mean, eventually you can hit a point where it flips but what you describe in terms of the infusion and everything else makes it seem like it is very difficult to administer. but we're at the early stages and let's not be too negative. it is good to be makie ing some progress, i think, doctor. >> it is huge -- it reminds me of the late '90s with cancer treatments with monoclonal antibodies this is pretty groundbreaking. >> yeah, yeah, the first monoclonal now look at it >> right. >> exactly doctor, thank you. good to have you on. see you later. coming up, bank of america raising its dividend, after most of its rivals announced its 'ldidend plans wel g into that story next straight ahead as "squawk box" rolls on

at morgan stanley, old school hard work meets bold, new thinking, ♪ to help you see untapped possibilities and relentlessly work with you to make them real. ♪ good morning futures lower as wall street digests the fed rate minutes bank of america questioning the results of the fed's stress test and raising its dividend by 9% we get an outlook for

financials and the social media world is growing threads has now gone live, with more than 10 million users and growing. will it be a twitter killer? we're going to talk social media, ai and more with tech investor and palantir co-founder joe lonsdale the second hour of "squawk box" begins right now good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square i'm andrew ross sorkin with becky quick and joe kernen u.s. equity futures at this hour we have some red on the screen right about now. dow off about 148 points, nasdaq off 67 points, the s&p 500 looking to open down about 19 points look at treasuries, we're going to show you the ten-year and two-year ten-year at 3.977, steve liesman is here, we'll talk about this

in a moment. two-year, sitting at 4.976 joe? >> to dom chu with a look at this morning's premarket movers. and as sort of my rendition, you are, of an everyman, are you on threads yet, dom, and do you plan to get on it? i need to know we're polling people i'm not a quick adopter. and i'm not on truth social. i'm not on -- i'm still on myspace. are you on threads >> okay, this is apropos i literally just got on threads in the last 15 or 20 minutes or so after hearing about the stories. >> after hearing that's a good sign >> well, i listen to you guys in the conversation and what you had with joanna about what is going on with threads. >> you got on it, huh? what do i google >> here is the part that they make it very easy. if you're on instagram, which i'm on, with the same twitter

ha handle, i have it on instagram, you can take your instagram profile and convert it to a threads profile. it is hitting two buttons. i'm also verified on instagram and so the true verification comes through on my threads account as well. there is all kinds of -- they make it easy is all i'm saying. >> your first stock was meta, that you were going to do anyway. >> correct because becky mentioned it in the open, i wanted to kick things off with a check on the meta platforms if you look, it is up 1.75%. it is 150,000 shares of trading volume it is now also the parent company of threads so, this social media app is going to compete with twitter. it is text-based, messaging, it formally launched yesterday, on the instagram platform, you can follow the same accounts you do on instagram if you look at that, the meta platform trade, it is generally

positive year to date, up 150%, a juggernaut of a stock. we're also watching, by the way, other ones, affirm holdings, those shares are down 5% premarket, 100,000 shares of volume they are known for the buy now, pay later program, being downgraded they cited amongst other things expectations for revenue growth and operating margins that are too expensive. so affirm holdings down 5% cryptocurrencies, black rock ceo larry fink called bitcoin an international asset, and said his firm wants to make it less expensive and easier to invest in cryptocurrencies. in an interview he said he hopes regulators will see black rock's proposed bitcoin exchange traded fund as a way to democratize he likened it to digital gold, things he was initially skeptical of crypto because it was used for illicit activities. but bitcoin prices now, you can say maybe getting a bid partly

because of the comments, up nearly 2.5%, 31213 crypto kucurrencies are more positive on this news. >> i agree with some things larry says and some things he doesn't. i guess that's the way it is with everyone. but in this case, he may be on to something now he's talking -- they do want to do the etf. >> so, yes i mean, if you do that etf and have the biggest etf manager out there talking about it, it is probably a good thing. i would like to circle back, joe, becky, andrew, are you guys -- i didn't see, are you guys on threads? >> yes i joined up last night >> okay. have you done anything with it have you threaded yet? >> i threaded. i started a threat this morning about the debate we were having on the set about the court's decision around whether social -- whether the administration can communicate with social media companies

about issues that they find objectionable but maybe aren't illegal and whether that's coercive and what to do about it. >> as soon as i get off set now, i'm going to go back to my desk. >> come join me. >> i will go and i will follow your conversation and you, and i don't know, becky, are you on there yet? >> not yet i will i haven't done it yet. >> i want to talk all about this right now, dom, on truth social. >> on truth social >> that's the only account i need >> i'm not on there yet. but this is only because i don't know -- might be too complicated for me so -- >> you don't have a truth social account. >> i have no idea how to get on. never looked at it no, i don't. thank you. meantime, minutes from the fed's june meeting pointed to higher rates this year, the market awaits jobs data. ahead of the big jobs report we get tomorrow at the table, steve liesman with all the action what's going on? >> good morning, andrew. minutes to the june meeting showing fed officials largely believe their pause was

temporary or transitory pause and tend to hike again in fact, they held off to give themselves more time to judge the effects of their prior aggressive rate hikes, but they were clearly not pleased with their progress and slowing the economy. one of the comments from the minutes, inflation, which was to the upside, labor market tight, consumer spending and gdp resilient and this idea about housing maybe has bottomed and on the way in term of the effects of interest rates on housing and, john williams, the new york fed president spoke yesterday, he's been somewhat surprise of the resilience of the housing market he supported the decision to pause in june. slowing the rate pace, he said, the pace of rate hikes, he said, made sense to him, but now it is meeting by meeting, that's the way he calls it. he said the forecast of the fed shows, quote, we don't think we're done, following the minutes and williams this morning, markets pricing in 85% probability of july rate hike. but a 38% chance of a second hike coming in november.

so, hike, pause, hike is the rhythm jobless claims up 245. the note that's up from last week, which many thought was depressed by the failure of the data to incorporate the seasonal adjustment of the new juneteenth holiday. tomorrow, austan goolsbee on 11:30 a.m., we'll talk about all this stuff with him in addition to the jobs report. >> can i ask you about something else >> sure. >> we're going to talk to -- >> not threads i don't do anything like that. >> we'll talk about the financials bank of america and citi came out and said the results they ran of their internal stress test are different than what the fed found. bank of america said they had a bigger loss than the fed's results showed >> wow. >> which is a little weird but what would explain that? the differences here >> i don't know. they should all be running the same model and the fed be judging the model. that's something i have to report. >> it is weird just strange to hear the second

and fourth largest banks saying they differ with a stress test result. >> and they had worse results than the fed came up with. >> which is also weird. >> my hope is they have stress for actual scenarios like their failure not to do it last time, which was the rise of interest rates. >> thanks, steve. >> pleasure. >> pleasure. pleasure pleasure was ours. >> i don't know, i enjoyed it. >> we did too. we have a little thing now where you can tip us so, you want to do 10 -- >> you know what -- >> is that on threads? >> no, here, you missed the segment earlier, i want a steve liesman segment on this, impact of tipping, point of sale things where it says 20, 25, 30%. impact on the wages or i don't know if it is considered wages, but income as a function of this new tipping. 30% of americans are very upset

now apparently about sort of how tipping -- the tipping culture in america has shifted. >> you added yourself. >> it is so interesting to me. >> moral issues around tipping >> i've done studying of pricing and pricing is a cultural phenomenon and the best example of that is you bargain at the car dealership, but not at the grocery store. why? the same thing is true -- there is behavioral studies about tipping. a guy who leaves the two mints is -- gets one tip if you leave a mint and come back and give another mint, you get a higher tip it is all a weird sort of psychological behavioral thing going on tips are higher now and we all feel a little better about ourselves when we leave a bigger tip, right >> i don't burn at the grocery store. i won't argue with you >> what do you want to do, 10,

15 -- >> for you, for what what service did you provide >> it is everywhere. >> a wonderful job on the read-in. becky asked a nice question. i don't know what i'm tipping you for, kernen. >> producers say just to go to break. >> bye, steve. when we come back, bank of america raising its dividend 9% after the results of its own stress test after dodd frank differed from the fed's stress test results we'll break down what happened and later, palantir co-founder joe lonsdale joins us to discuss ai and more "squawk box" will be rig bk.htac what do you get from the morgan stanley client experience? listening more than talking, and a personalized plan ♪ to guide you through a changing world. ♪ good luck.

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bank of america and citigroup are questioning the fed's stress test results. the two major lenders say their own income projections differ from the fed's and asking for clarity on the discrepancies in the meantime, both companies have actually raised -- have actually raised their dividends. we're going to talk more about this in a moment we have some breaking news and diana olick is joining us for that right now diana? >> yeah, that's right, becky mortgage rates hit their highest level since the end of may last week that had a direct effect on mortgage demand, which fell to the lowest level in a month. that's according to the mortgage bankers association. the average rate on a 30-year fixed conforming loans rose to

6.85% from 6.75% and that's for loans with 20% down. that was the average for the week, a separate survey from the mortgage news daily showed the rate crossed over 7% last thursday and still at 7.08% as of yesterday now, as a result, mortgage demand to purchase a home which had been rising for three straight weeks dropped 5% for the week and was 22% lower than the same week one year ago interesting, though, the average loan size for a purchase application dropped to its lowest level since january of this year. that was likely driven by a drop in home buying and some high priced markets and more activity on the lower end applications to refinance a home loan fell 4% for the week and were 30% lower than the same week one year ago. all eyes now are on tomorrow's jobs report and that will give us the most important indicator for now at least on the fed's next move on rates

back to you. >> diana, thank you very much. all right, coming up, bank of america raising its dividend 9% after results of one of its own stress tests under dodd frank differed from the fed's. we'll break down what happened and talk financials after the break. and a federal judge blocking the biden administration officials from communicating with social media companies. palantir co-founder and investor joe lonsdale joins us shortly. we're coming right back. time now for today's aflac trivia question. what is the record for the number of most people in space at the same time the sw wn bc "anerhecn'ssquawk box" continues now there's a hole in your defense; look at the size of that- gaaaaaaaaaaaap!!! is that a goat?! you talkin' about me? gaaaaaaaaaaaap!!! i think this goat is saying “gap.” must be talking about the expenses health insurance doesn't cover. so who's talking about the money aflac pays to help close that gap? gaaaaaaaaaaaap!!! aflac! aflac! gaaaaaaaaaaaap!!!

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station. bank of america and citigroup are questioning the fed's stress test results as we mentioned. the two major lenders say their own income projections differ from the fed's and they're asking for clarity on the discrepancies and raising their dividends in the meantime. joining us right now is ken leon, cfra director of equity research ken, this is a weird situation it is odd to see banks disagree with the fed, especially in bank of america's case where they say we would have lost more money than the fed thought >> it is great to be here. so there is 23 banks and they all got approvals in the case of dividend increases on the surface level. but you're right, becky, since 2012, this was quirky because not only that, probably difference of opinion, but bank of america last week, you're waiting to see if they're going to raise the dividend and they put a power point presentation on the mechanics of what they

submitted. in the weeds of what this is all about is a debate on what is called other comprehensive -- a throwaway category, if you can't get it into the operating income statement. we're going to hear more about this from bank of america on july 18th. again, citi also had some issues but we never have seen this before and they felt that it was important as it affects some of the other ratios that they have to abide by with the fed. >> i guess the more important point being here that the banks all went ahead and raised their dividends including bank of america last night you like bank of america stock it had a rough year, but you got a buy rating on it why is that? >> you know, we wish there was positive news. i think stock has underperformed the market, plus large banks, you know, it is down 13%

banks have bounced back and their down like 2% and really bank of america sentiment turned to negative which we thought was an opportunity when the unrealized losses was the largest in the industry back in march about $108 billion but they got $2 trillion of deposits, diversified and, you know, so we think there was a penalty for bank of america for that issue along comes the stress test and we would have liked to have seen just the clean press release like everyone else we didn't see that for bank of america. but then, again, as an analyst, you look at the operating performance of q1, or even for q2, we see them year over year having much higher revenue and earnings, bank of america's executing, so this is not a problem child or a turn around story in the large banks >> okay. what do you feel about the other banks? what do you think about citigroup? >> citigroup is still a longer

term turn around we have a whole rating on citigroup. we think it is very event driven to the selling of consumer bank assets outside of the u.s. there was disappointment with the largest one in mexico, where they have to go the ipo route. so we do have a hold on citigroup. where we're optimistic is possibly the second quarter will be the trough of the investment banking cycle. so names like morgan stanley and goldman sachs, which have led, we think have upside opportunity later this year into 2024, which is why we have strong buys on goldman sachs and morgan stanley where it is down significantly in march when we upgraded the stocks. >> are those your favorite stocks at this point >> they are. just because i think there is a higher delta coming from the investment banking area, where they're ranked number one or two. >> all right, ken, thank you fo your time today.

we appreciate seeing you. >> thank you all right, this is here. >> the tip jar you think there is a moral duty to tip here at "squawk box" i have a moral duty at certain places where i -- >> i'm not sure. >> we get accused of -- >> this can be construed as pay to play. >> we get accused of -- that our guests -- people will believe anything but you can tip with mints mints in here. i'll accept candy, jellybeans. i like them individually wrapped. individually wrapped is better for me than just, like, in -- >> when you tip, you're not supposed to get anything for it. >> do we need to declare it? does anyone declare tips >> yes, you need to declare it. >> you need to declare it. >> as much as anything. >> you got to put a venmo number

on there too new world. >> would you not accept bitcoin, either one of you? you dent want it because it is worthless? i'll accept any crypto >> still to come, a judge ordering agencies and officials in the biden administration to limit their contact with social media companies. we'll talk to joe lonsdale for the latest next. plus, a check on the consumer and the state of the new york city with union square hospitality's danny meyer. you're watching "squawk box. this is cnbc

good morning and welcome back to "squawk box. with us is cnbc. and we're live from the nasdaq market site in times square. i'm becky quick with joe kernen and andrew ross sorkin, who is begging for tips, still. i'll get you a squeegee. a squeegee that you can -- >> that i like then you're working for --

right? you're providing a service >> whether you want it or not. let's look at the u.s. equity futures as you can see there are red arrows dow futures down by 140 points s&p down by 17 the nasdaq down by 55. if you've been watching the treasury market, the yields on the ten-year falling below 4% the last time we checked for the ten-year, 3.977. two-year just below 5% at 4.97%. oil prices have picked up at least above $70. wti is above 72. brent is at 76.86. if you're watching crypto, with a thlot of interest, some looki to potentially start etfs, you can check things out bitcoin up 2.3% to above 31,000. andrew >> meantime, jetblue ending its partnership in the northeastern us with us american airlines, this after an order from a federal judge.

the allowance allows the two carriers to share passengers and revenue and coordinate schedules. in june, american said it would challenge the court's ruling that the alliance was anticompetitive. now jetblue is saying it will not appeal and instead focus its efforts on acquisition of spirit airlines so, bit of a switcheroo in airline world. and u.p.s. and teamsters union saying negotiations have stalled on a new labor contract, raising the risk of more than 300,000 delivery drivers and package sorters going on strike as early as next month the company and union each accuse the other of walking away from contract talks. here is transportation analyst don bratton on "closing bell: overtime" yesterday. >> both the u.p.s. management and the teamsters know that you probably don't get the best deal until the 11th hour. they're not going to get very best deal until july 30th to the

31st >> current deal expires july 31st. and coming, amazon ceo andy jassy wants his hollywood studio explain its big spending and rein it in we'll talk about the future of prime, the streaming wars and hollywood strikes in a bit and get the best of "squawk box" in our daily podcast, follow our squawk pod oyon ur favorite podcast app and listen anytime stay tuned lets her choose exactly what goes in it. now she gets to pick only the perks she wants and saves on every one. and with an incredible new iphone on us, no wonder sadie is celebrating. introducing myplan. get exactly what you want. only pay for what you need. act now and get iphone 14 pro on us when you switch. it's your verizon.

coming up, from strikes to the struggling summer box office, a number of issues to talk about when it comes to hollywood. that's next. and at the top of the hour, ironside's microeconomics director of research barry knapp will join us with his reaction to the fed minutes and what it means for the markets. "squawk box" will be right back.

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gq magazine removed an article critical of warner bros. discovery ceo david zaslav after it ran online on monday. the piece was titled, "how warner bros. discovery ceo david zaslav became public enemy number one in hollywood. written by a freelance writer who compared him to fictional characters such as logan roy, the media mogul, hbo succession, edward lewis, the corporate raider played by richard gear in "pretty woman. warner bros. said it wasn't contacted prior to publication and it reached out to gq to point out what it saw as inaccuracies in the story. a spokeswoman said the article hadn't been properly edited before it went live. they made a series of changes to the story includingin iremovinge comparisons under the fictional

characters and i read the author said he didn't at that point after seeing some of the comments -- >> he said -- >> it was removed, he said i want the byline off the story, i don't like the story the way it is edited, i'll take my byline off. >> they edited that stuff into it >> no, my understanding is he writes the story, he writes the story with his byline, they publish the story, warner bros. calls and says we don't like the story, we don't like these issues in the story, gq goes in with asking him, without asking him, who knows what, changes things in the story, he says this isn't my story anymore, i don't like the story, i want my byline off the story, they say we don't publish stories without bylines, we'll remove the story in its entirety and that's what appears to have happened >> not nice to fool mother nature my view on this, i like david, i've known him for 40 years, i know his politics and to watch sort of the left eat their young

is -- eat their own is a little -- he tried to clean up cnn, which was needed cleaning up they had michael avenatti on 100 times and brian stelter at one time legitimized him running for president. also the writers, they're mad at him, he makes a lot of money, there is a strike, he closed down some movies, my son sees it all on twitter he tells me what the hollywood look as far as david is. and if they only knew that he's totally on their side on everything he's not -- should not be the object of their vilification he's with them, 100%, just trying to run a company without losing money and pay down debt and cnn needed to be cleaned up. you can't, the dead-enders are still there. and you see what happened. poor chris licht he's a friend of yours, isn't he didn't even get a chance didn't even give him a chance. >> meantime, chatgpt saw monthly

traffic to its website decline for the first time ever in june. actually fell by 9.7%. that's according to analytics firm similar web which found that unique visitors to chatgpt declined last month by 5.7%. some analysts said that the -- that was a result of novelty wearing off, but others tied it to the summer break for schools as fewer students looked for help with their homework >> meantime, tesla and chinese automakers pledging to maintain fair competition and avoid an abnormal pricing in the world's biggest ev market, signaling a possible end to a price war that has rattled the industry this year executives from 16 companies taking part at a signing ceremony, acknowledging committing to four points laid out by this pledge they included byd, nio and others tesla was the only foreign brand. that doesn't seem so free market

to me. maybe it isn't meaning they're all saying we're colluding on prices. is that what this is like the oil cartel for cars is that what's happening >> i was looking -- >> i got to get eunice yoon from beijing this morning >> first thing i thought in reading about u.s. automentione, legacymakers, not tesla. weird. >> tesla had strong sales. >> they did. very strong. but it wasn't mentioned in the -- >> they reported earlier, that's probably why other automakers report later. >> earlier, a judge ordering agencies and officials in the biden administration to limit their contact with social media companies. joining us is joe lonsdale, co-founder of palantir on the line this morning with us, joe, nice to have you you saw this decision by the courts some folks -- >> a huge victory.

a huge victory for freedom probably one of the worst things we have ever seen with regard to the government violating free speech you can't use private actors, can't bully private actors with the first amendment. this is actually an awesome, great thing to celebrate for july 4th. >> i'm going to take the other side, indulge me for a second, i think it is apolitical because i think it doesn't matter what administration it is, but if an administration to me wants to call a social media company or somebody else the free market is that the social media company or whatever company it is should decide whether they want to amplify a voice or frankly whether they want to cancel a voice it is on them to decide that the pentagon papers is a great example of this, "the new york times" got a lot of pressure court case and decided to move ahead and publish something the government didn't want we have seen objects, by the way, in the state of florida you've had desantis and disney

right there, you have seen what coercion looks like. coercion is a terrible thing and transparency is an important thing. so, you want the communications and documentation of those communications to be available to the public as they should be at some point. but the idea there can be no communication at all over these issues unless it is about national security, that seems like it is against the first amendment on the other side of the ledger. >> the history is really important here freedom of speech, you know, and our civilization if you go back 400 years to the 17th century and have the star chambers using all sorts of private groups to scare and bully people not to say, not to do things because they would go after them, what you saw here is you saw several quotes coming out of the biden administration, other places, that they better watch out, there is going to be regulation, they better watch out, they're liable for killing people and really pushing them on, wasn't just 100 laptops, every, like, kind of moderate

right talking point around -- >> killing people, you have blood on your hands is what they -- hold on. they were fully -- they were fully -- >> you can -- i don't agree, by the way, with every talking point. there is a lot of idiot people on the populous right. regardless whether or not they should or should not be saying that, the government funding this information around the world, paying people who are then trying to get advertisers to be bullied not to go on to the things, and the government calling and telling them don't say this thing about our president, by the way, we have lots of regulatory power here, you better watch out, that's obviously orwellian situation which shouldn't be allowed. >> but i think the flip side of this is coercion should never be allowed and retribution should never be allowed when it comes to government actors there is no question about that. we're in agreement about that. so we agree also that the florida piece of it, i think,

correct? >> and i -- that's a good one to jump into. when it comes to first amendment, it is very clear the government should not be bullying people. i think that's a very fair point overall. >> okay, but then the question is, should the government not be allowed to communicate, which is to say, this is my perspective, my view is the government should be allowed to communicate, if they coerce bullying or otherwise, there should be a case in those instances against those government actors that do that and there should be transparency around those communications the idea that we can't -- that they can't communicate at all seems to go against the first amendment on their side. >> so what has happened right now is that the government, the government doesn't get its own first amendment. the government is not a private actor, the government has been caught setting up a massive apparatus to find people, bully people and to basically quietly, you know, threaten them. so given that we have caught

them setting up this massive apparatus of this -- of bullying people, the judge points out, these are all things that are on one political side, all things, many times saying not to criticize the president, given we caught them doing that, we need to dismantle this entire apparatus and not have them talk anymore and set up -- perhaps that's what they do in the future . it is so clear that the whole thing is a mess and needs to be wiped out and those people need to be reassigned and it is really transparent and really clear. i completely agree that you need to stop all these groups from doing their weekly meetings with social media and going along with their legal cabal. >> one final point on this, and i want to pivot and talk to you about threads and the battle with twitter and maybe cage matches and the like on this issue itself, your sense is there should be zero communication unless it is about

national security as the judge said, because i'm not sure that decision unto itself will ultimately get upheld the idea that you, joe lonsdale, if you were working in the administration of biden or trump or whoever is going to be in the white house, you're not allowed to call somebody or send an email. that email should be transparent, meaning it should be foiable, freedom of information act or available on a website the same way the visitor logs at the white house are. >> i think the situation, andrew, we have uncovered what is clearly a crime and violation of the first amendment based on how it was being done. so it needs to be a hard reset long-term, there should be ways they can transparently talk to them and given we taught them that a massive bullying apparatus and disinformation apparatus is do many illegal things, you need to stop it and at some point in the future perhaps be able to talk in a more transparent way where it is clear they're not threatening them as they have been. >> mr. lonsdale, where are you

on threads have you -- i went on last night and logged in. i don't know if i follow you yet or if you're on here are you on here yet? >> i don't use instainstagram. but i have checked it out a little bit and it seems like they have a lot of interface issues, but you can build something and it will get serious issues os out of it. >> how does that create competition for twitter from a business perspective and then potentially even a larger issue, to the extent that we -- i don't know maybe we want it, maybe we don't, people want certain things, a public town square, the idea that now social media at least in this text-based world could become bifurcated. >> you know, i think having competition is not a bad thing facebook was very eager to go along with all this censorship and do everything the government wanted and it is going to be a lot of

important conversations that wouldn't be able to exist on threads. i'm glad we have twitter i'm sure there are some people who use it, but there is going to be another one there. i think twitter is likely still to have the most usage >> cage match. what to you think? is this really real? you see now elon musk, he's out there practicing, mark has been training, not necessarily for this particular match, but maybe thinking this was coming, or is this just a lot of hype? >> elon is an extraordinary fighter. i know the family had a tough background, where they grew up i wouldn't want to have to fight elon he's a really big guy. zucker is in amazing shape people underestimate the shape that zucker is in. when you had a disagreement on product, he would make people race him and he never lost a race

i wouldn't want to fight either of the guys to tell you the truth. it is probably good if they call it off from what i heard, seems like it is still on. >> elon's mother is trying to end this do you really think this is a real thing >> his mother is trying to end it, my wife thinks it is a terrible idea, a lot of my friends and i are amused, all right, this week, am z amazon ceo scrutinizing the spending of its studio, requesting detailed budgets from major prime shows. this is as hollywood is also facing a writer's strike is it broken an impossible upcoming strike from the screen actors guild

some someone's not going to get a 10. >> and missing expectations for the weekend. joining us to discuss that is matt belamy. where are we standing right now? are we going to pay for content or did someone finally realize, wow, this can get expensive with very little return and we're actually trying to make money? >> i think andy jasty is going to have that discussion. he wants to see the budgets of some of these shows that they're making and these are hundreds of million of dollar investments that for the most part have not turned into massive hits and amazon is in the content

business for different reasons than other people are in the content business they want to increase activity on prime and we'll see if that's actually what this content is doing, but it's a sign that this spending on hollywood that has existed for the past five to seven years in the streaming business is really coming to not an end but the content bubble is coming to an end >> a lot of times and i've seen it happen in the past obviously, been around for a long time when ge came in and looked at how movies were made and how content was being developed, it's sort of a culture clash between i guess the hollywood sort of artist, those people and people that actually have to make paychecks and pay taxes and at the end of the year with an income statement and a balance sheet. is there a balance that can be made who does it best do you think at this point >> that's a good question. sony is a great example.

when they came to hollywood and bought into the columbia pictures studio, they hired guys that were experienced producers in the 80s and 90s to run sony pictures and they sort of got taken for a ride now if you look at the sony studio, they're doing pretty well they're not trying to have their own streaming service. they're just trying to be one of those so-called arms dealers selling content to those streamers. it's the companies that have tried to compete with netflix and have spent millions trying to gain market share in the streaming business that is what's coming under scrutiny you look at warner brothers discovery, disney, paramount, nbc universal with peacock these companies going after the netflix business of building up a streaming service to compete with netflix, the market leader. those are the companies that are

really struggling right now. they haven't figured out how to make that model work >> matt, do you think you can be a ceo of a company, some of the ones you're talking about, do what's necessary for the bottom line and still be beloved by the people that are making your movie? and i was talking about david zazlow and he went crazy. >> it was "that girl." >> it was going to totally bomb. cnn plus was costing so much money, was never going to have a return when you make those business decisions, by definition you're going to be in the cross hairs for all the people that are affected by it and i think that's what's happened >> certainly it's a tug of war between the creative instincts people have and the financial realities of this company. war

warner discovery, when we came on, $50 billion in debt. he said we're cutting $4 billion in cost. that's going to mean jobs and mean projects. i think it's the way ceos go about doing that >> while making a lot of money i guess there was a tone deaf party, during the writers strike a lot of money i guess i understand that but -- >> the turner classic movie situation. they have that channel turner classic movies and they just cut two-thirds of the staff. and they didn't do it in a way where -- they knew there would be blowback but i don't think they anticipated the level of blowback with steven spielberg and said we're going to bring back a director and have a consultant and give oversight to

the warner brothers film studio. it felt like a self-inflicted wound. >> it's never going away the suits versus the artists that's never going away. and there's always going to be that tension i just want to make sure we have more content, matt i don't want to mess that up either but it's not the red cross that's not a not-for-profit organization you need to be profitable. >> we've had an unprecedented run-up in the level of content over the last decade, to the point of 600 television shows. that is going to come down necessarily. >> you can keep 500 of them so that will be okay. we just don't know beforehand which ones >> that's the problem. >> matt, thank you and a programming note, amazon ceo andy jassy will be joining

"closing bell" right here at 4 p.m. eastern time. andrew, off to you good luck with the teleprompter. >> coming up, the latest read on employment yob jobless claims, it's at 8:30. and danny meyer is going to be here maybe talking a little bit about tipping as we've been discussing all morning. we're coming right back.

good morning let the data begin two big reports on the labor market this hour we're going to have the breaking news and instant reaction. and moving the needle on threads. mark zuckerberg's meta releasing a new app to take on twitter overnight. and the tipping culture. labor shortages, rising food costs, all of that on the menu danny meyer will be with us 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 i'm joe kernen along with becky quick and andrew ross sorkin i it's adp reporting day, which means tomorrow is jobs friday. and all ahead of the big number we get tomorrow. seems kind of late for it. sometimes it's the 3rd or 4th. it's the first friday, unless the first friday is on like the 1st. >> or a holiday. >> or a holiday. equity futures have gotten worse. treasuries have been pushing ever higher. the treasury has now it almost back to 4. a big inversion, 4 .96 on the

2-year bitcoin was in the mid 31,000s earlier today and it's up just 1% now it looked like up on the comments of larry fink of blackrock. >> fed inversion between the two intents. it's gotten a lot bigger >> yeah. people still think cuts are coming before anyone gets it >> let's get you caught up on some of today's top stories. bank of america hiking its quarterly dividend after passing the the fed's recent stress test the bank held back a dividend decision last week after conversations with the fed citing results between the central bank stress test and the company's own under the dodd-frank act that stock down by about 5 cents. >> meta platform debuting its

twitter-like app threads yesterday. people will be able to follow the same threads, accounts, that they follow on instagram and reply to each other's public post in a similar way to twitter. that stock is up about $5. gain of 1.7% and janet yellen arriving in beijing this morning for meetings with her chinese counterparts she outlined a policy in april geared towards defending u.s. businesses and fidelity national agreeing to sell a majority to world pay, private equity group gtcr $18.5 billion. fis will maintain a 45% stake in world pay and receive $11.6 billion from gtr and will use

that cash to pay down debt and fund buybacks. and stocks marginally down across the board except for mastercard let's get a check on the markets as futures are indicating weakness at the open this morning. mr. santoli, what's on your rye dar, sir in. >> i think a lot of folks would agree we came into july perhaps prime for some kind of a pullback yesterday small caps were weak even though the headline indexes had modern moves the s&p 500 index fund, you see we've kind of come up to this point here where that's really the trend line the 50-day average is above 4200 the late june low is in the 4320 area you're still playing with a little bit of house money, still

have the uptrend in place. here's what that looks like on the 10-year yield and why there was a lot of focus and this 390 level. that seems like it's sort of a breakout and sort of gets you past whatever little sort of downtrend there was from that late 2022 high this peak right here of course was right before svb we're trading above the levels before that little regional banking panic. you do have this upper drift and rating for a lot of data seems like we're clenching up on the idea that we do have a pretty sturdy economy based on the numbers. and we're trying to price that in and see where it goes from here however, take a look at the home builder related stocks as well auto nation, the biggest publicly traded auto dealership owner. this is over a one year, too

you see really impervious. both housing and autos benefiting from shortages that have been ongoing in supply. the economy seems not to have felt the full force of that 500 basis points in fed tightening, at least not yet or in the ways that traditionally you might expect it to >> mike, thank you nice to see you, sir >> let's talk markets now with barry knapp, managing partner and director of research at ironsides macro economics. barry, you've sort of been in the camp pa the fed's done enough, i think, in the past it doesn't look like they have at this point. has any of the data caused you

to question your prior stance or do you think that the highs are in, should be in and that the economy is slowing and inflation coming down and nothing needs to be done. you still feel that way? >> i do from an inflation perspective. we'll be just above 3 after we get the june report. then it's going to level out and the problem that will make it likely not fall much below 3 is fiscally driven inflation as opposed to monetary. the feds trying to offset monetary policy really is the 70s and stagflation. i don't think they can do that much more about that from this we've had two negative quarters of gross domestic income income is really what matters.

this is bea speak for corporate profits but driven by the net operating sur palace of private enterprises. sprofts been negative by that measure for three quarters in a row. the question that earnings in that revision are getting better do we have a double dip? does the fed cause a credit contraction? i think what's important is this deepened version of the yield curve and mike santoli just saying that the rate aren't high enough to really cool housing off. small business leaders are getting hurt by credit availability large lenders are benefiting but the way that the fed has done passive qt and aggressive rate hikes means those ten-year

rates that are the determining factor for the housing market haven't moved since september. sure they sold off, came down, but they're no higher than they were they keep jacking up the short-term rate, more aggressive with qt and a little less aggressive with the front end rate hikes, they'd be having a much better impact on auto, housing. so this has been all wrong from the get-go and the fed remains the main problem here because the deeper that curve inversion goes, the more risk we have of credit tightening, forecast particular they can only work on the short end. the long end's not kwoping so

credit titans on the short end but it still looks like we're in this rip roaring sart many you see every time we get a jobs report, it seems like it's hotter or better than expected none of those things make you think that the economy is just right now so resilient that maybe some more tightening is warranted? because they're not looking at what you're looking at they're not looking at the profit recession or anything else almost to a member they all seem like they're absolutely certain that they need to get tighter to, you know, to get inflation back down to 2%. >> yeah, it's fascinating because powell's inflation framework that he laid out at the end of november, the brookings institute, was almost

defunct from the moment it came out of his mouth he was talking about wage growth core service inflation has been coming down. it's come down on a six-month annualized basis from 9 1/2 to 3. and the work weeks being at the low the entire last business cycle, wages dropping a% where that speech was given. the only thing going up is that headline payroll report. i think "the wall street journal" article did by the way, just as an we had a 240 for claims and then jump to 260.

two-year note yield jumped 15 basis points it's a new holiday if you use the same seasonal as back in memorial day, it would have been 275. i still think the labor market, if. >> oh, we got to go. we can't talk. it a mystery >> adp next. power e*trade's easy-to-use tools, like dynamic charting and risk-reward analysis help make trading feel effortless. and its customizable scans with social sentiment help you find and unlock opportunities in the market. e*trade from morgan stanley.

♪ ♪ just a second away from the release of the adp report for june steve liesman is here. what do you have >> i got 497,000 i togot a double take number he that you got to look at and say is that right? that's the number adp providing for their estimate of growth -- actually, it's no longer an estimate it's their estimate. they say it's what happened in the month of june against 220 for the adp number and 240 for the payroll number

services, what's the higher order than surge 373. >> this is not held as close to the vest when do people really know this number >> i think when we report it >> just said the market was down about a hundred. >> now it's down at 2:28 >> it was at 8:00. >> it was already down >> you think the market all comes down all morning because of this? >>. >> let's take a look by business size small business surging up 299, medium up 183. leisure hospitality up by 232. construction, 977,000. a lot of talk about that housing market bounder willing information down 30.

motor vehicling town i guess that's down 42,000 >> what's information? >> information technology. waging up 6.44%. job rng and so a lot of people are hired but wages continue to come down. now, guys, real quick you may be asking yourselves who's better, the adp or the wall street consensus? and i have a chart to show you, which i'll show you -- >> in terms of matching up jobs with the government? >> matching up adp with the governor's private number and matching the con sense ut with the overall number you can see the wall street consensus has been light we talked about this yesterday the average is oaf 110,000 over year to date you can see adp has been a lot closer their average miss has been

about 30 years just over this period that we're looking at at on a three-month of range about but just to be clear, adp redid their calculations and meth it will so the result is we don't really know how goodis, through specific, the economy looks stronger, the job market looks stronger and that this twrrk. >> do you think it's plausible you can have a strong labor market and have inflation

continue to come down without having to go at these numbers effectively? >> yes yes. >> that's to me the fundamental play >> yes, in a story i'm trying to understand and work on morgan stanley says in their report this week previewing the payroll, which i was going to talk about at 7:00 but it just got too complicated in my brain. here's the thing they say for the current level of gdp, there should be 300,000 more people at work using an old thing called oklahoman's law which tells me that maybe this economy is a lot more productive than we to say maybe we're mismeasuring productivity. >> steve, thank you. >> you know what that stand for?

>> to ensure prompt service, which is what you get every time you come on here >> i delivered the news, i delivered the context. >> we'll see you back here at 8:30 >> you give me money >> you didn't tell us -- >> we're just days away from the release of cnbc's top states for business scott cohn is in floridatell us how the culture war is how woke are you getting this year, scott in pretty woke >> reporter: well, you know, we'll talk about that. what better place to talk about all of that than here, joe so many issues in our top state study come to play right here in orlando. so we will have a front line rertropo fm the culture wars when "squawk box" for a thursday continues.

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we are just five days away now from learning this year's top states for business, a competition that is playing out amid huge economic turmoil, massive amounts of government money and a raging culture war scott cohen putting together the rankings for us, as he does every year this time he joins us from ground zero in that culture war, orlando, florida good morning to you, scott >> good morning, andrew. this has been playing into our top states study see that pasture behind me that was supposed to be the site of a billion dollar disney campus from a couple of dozen people shipped here from california instead this is a latest casualty in governor desantis's war on woke.

>> reporter: disney is florida's largest employer, so when the government takes it on >> there's a new sheriff in town, that's just the way it's going to be. >> does the state want us to invest more, employ more people and pay more taxes or not? >> you would think lake nona, an empty lot -- >> if anything, this realtor says disney news is helping lake nona manage all the growth >> with the rapid growth, we need time for infrastructure >> reporter: that's not to say there aren't concerned in dunedin, gregory brady, who helped organize the local pride

celebration worries about disney's reputation in corporate america. >> they deem the state to be not as friendly as it used to be >> i live here my whole life there is a lot of high-paying jobs in florida. i would hope it's not a pattern to lose those. >> both disney and dee santus has too cl -- we look at busine friendliness and life health and inclusion and business patterns and we reveal the top state for business just five days from now.

you can read all about our study at topstates @cnbc.com >> you can't tell us any of those states i'm curious obviously. but just a little glimpse? >> reporter: well, keep an eye on florida and the rankings where i am maybe i'm going to stay here and be live next week. >> no, i don't think you're going to do that >> reporter: but keep an eye on florida. there are some interesting developments in a lot of these states but we do bounce around and and we'll be back here or somewhere on monday and give you some of ou and right about now, tuesday morning is when we reveal -- >> can i ask one culture war

question in terms of the waiting a state that seems active in the culture war, whatever that means, by the way, bus i can see a red state active in the culture war like florida being in that space but also you could argue a left-leaning, very blue state could be seen as participating in the culture war, too? how does that get weighed at the same time, in our workforce category, that's very looking very closely at migration. where are all the people going in maybe it cancels out a little bit. both very important. you'll see when we release the study on tuesday >> scott, thank u.yo woe got the jobs data on the way. the weekly claims report just ahead after this

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welcome back to "squawk box. rick santelli here live from cme hq we have breaking news this morning. we have not only the trade balance but claims initial claims 248,000 about 3 or 4,000 more than expectations it's 9,000 more than the rear view mirror 239 but my guess is that stands to be revised. we're hovering right around what many traders and analysts

consider to be -- we have a revision coming in, 239 becomes 236. 248 is the high since two weeks ago when it was 265,000, the high mark going back to oct '21. continuing claims a bit less than expectations and a bit less in the rear view mirror which gets revised 1,720,000 the current read at this point in time is the lightest read since february of 2023 so february of this year and if we look at trade balance, exactly as expected, minus 69 billion. the pop 10-year note yields up to 4%. we did get technical signals with a close about 3.82%

that to many, including myself, signaled the call towards 4% does it man we're going to challenge the fall high of 4 1/4 from last year, that's possible. testing 4%, maybe we do a whisker higher when you look at that it obviously what the fed may or may not do if you look at last friday, last friday's percentages for the july quarter point increase, well, they were right around the same they are now. they were 83 1/2 last friday, today they're 85%. that's for july. if you looked at sepp last prierd, it was 44% and now it's 22 1/2%.

i'm still a bit surprised they're going to come in the july meeting with a rate increase time will tell we still have more data points like tomorrow's big jobs report, inflation gauge and then the question is should they or will they that's always a fascinating debate and in the u.k., their inflation is definitely running hotter on a new heat measurement almost every month and right now a 10-year guild year of 460 is the highest since 2008 i think we've covered just about everything, joe beep have may factory order in germany that popped almost 6 1/2% they have two negative quarters of gdp some questions there as well back to you. >> some nice round number that we can talk to liesman about, rick 4% above it. >> well above 5 on the two year. >> i want to tell a story, joe

may be true, may not be true it gets at something andrew was talking about. let's say that we are normalizing in this economy from the craziness of the pandemic. >> yup >> some industries are shedding works are because they overhired and some let's say you had too many fedex drivers, not enough people working at hotels you have pleem they get work in these sectors that need employment so you do not have a rise in continuing change. >> it's just a shift >> it just a shift we're passing through one area to another area. and so what happened and what has been happening is we've had this upward shift in claims from the 220 area that ruck was talking about, the 250 area.

i get more concerned at 275 to 300. we can dee bat that. temperature rel tiefl muted amade the that i'm telling that's based on a cursory examination of ditia that if you have sufficient labor ply that's why we see in the data some attenuation of the wage data so it's a slow process of normalization but it is as of yet normalization back to more normal wage gains. >> and it then puts you back in the category of i'm jay powell and this is good news. >> that's a great point. i meant to mention that at 8:15,

andrew putting more people to work in the service sector is probably good news because it means you open more restaurants, it means you don't -- you have more hours open, it means you don't have to raise prices as much so getting back to a more normal employment level in some of these industries, so in this sense hotter labor numbers could mean, and this is a story i'm telling just to be clear, hotter labor numbers could mean cooler inflation numbers. i'm going to leave it there. how about that tips, tips >> we had someone from brookings and she was saying that one of the problems with the way the biden administration is promoting infrastructure and chips and everything else is it's all manufacturing jobs. that's not going to help us with flags and productivity you just said the same thing that she was saying. >> and part of the problem with the i.r.a. is this huge

information we need for chips. we going to have to bring lot of engineers in and maybe this -- >> everything took a lot longer through that whole process than we thought >> thanks, steve >> ewant it prng in linsey lindsey, i want to start with you. i think for friday you were anticipating that the jobs report would have 225 to 250,000 of a gain. of a what we just heard from adp, almost 500,000 jobs versus the 220 that people were anticipating, are you going to

take up your numbers for friday's official government report which further justifies from the fed's perspective, a early as the july meeting in just a couple weeks now i think when we look at the details of the report, that's going to be more important than just that headline number. it the trend pressure. do we see a drop in the unemployment rate, do we continue to see hourly of the labor market continuing to be extremely tight among a lack of labor supply it true that we do need more osh work and millions of workers we do need to create an inseverityive, entice those

workers back it the labor market pu we haven't seen that request mmm. >> hey, jay, i know you were looking at the youing do you see a recovery for housing commonwealthing any it up i don't know if we're looking a the a recovery with a claes. you know, that people are getting used to those higher traits here, things are starting to borrow out. resisting home sauls african americans -- again, a full-blown recovery with interest rates where they are >> let's get down to when this

frm. >> i think they will i think if you if back to june ceasier con sense cult if we get a halfway decent print in terms of employment on friday, if we get cpi running at 4.5% or so in terms of the core, then i think they go again in july. >> how about you, lindsey? >> oh, absolutely. i think the fed not only goes into july but we see at least one additional hike from that july hike. for the fed it's all about inflation. and right now there's nothing in the inflation data that's convincing we'll maintain this downward trajectory back towards 2% we've made a lot of improvement off of those peak levels, but it

not about going, it's been tuning that delivery and prices still remain very sticky the. >> guys, would you let me do some recording would you tell me if you're raising your forecasts tomorrow bass because certainly moves us not on to the upper range what, becomy said, 225 to 250. we could see an up side sproos has been somewhat sketchy over the past month but to anticipated than in terms of our regular forecast. >> we don't move because of adp but if the employment component comes out pretty high, that

would cause us to push it up >> jay and lindsey, i want to thing you both >> coming up, joe has his temperature jar out. we'll talk about the culture of tipping and frankly whether it out of control check out tiktok shares, up near lirr 90% over the last year. >> ooh >> coming backig aerhi rhtft ts. (vo) while you may not be running an architectural firm, tending hives of honeybees, and mentoring a teenager — your life is just as unique. your raymond james financial advisor gets to know you, your passions, and the way you help others. so you can live your life. that's life well planned.

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welcome back to "squawk box. the futures, i just had a feeling about that adp number. they're on their lows. down 280 points. immediate moves in the yield curve and in the dollar index. you're still here looking for tips dallas fed president lori logan speaking this morninghere in new york >> yes, she is actually but i don't think the market's going to like this one logan making a very hawkish speech saying the fmoc needs to make policy more restrictive she said it would have been appropriate to raise rates in june but decided to pause. she's concerned l infwhether la will return to the market. there's no evidence of the

deterioration of the labor market logan comes from the dallas fed having run the new york fed monetary policy desk she was steeped in these issues of crises and financial crisis no indication of large lag effect, already htime to see effects and housing market looks to have bottom and rebound could cause risk to inflation. the outcome calls for more restrictive monetary policy and this is important, tighter credit conditions, she's judged, are unlikely to offset the need for high are rates again, that issue we talked about, the rebuilding of the general treasury account by a billion dollars not creating liquidity pressure the three things that might have stayed the fed's hands, lag effects, tighter credit conditions, rebuilding the treasury account, she's dismissing those as reasons not to stop.

>> what about the story you just told us? >> she's not on board with that. i told you it was a story. it was something -- it was data, explains it. i know we got a great, great guy who is going to talk about this stuff coming up. >> did she make some type of hand movement about your whole story or -- >> wave? >> like that or something like that but i just think we're missing the point. if inflation keeps coming down, all this other stuff doesn't seem to make as much difference. >> but she said not in a timely manner >> she doesn't think it will >> let's talk to a guy who knows about what's going on in the economy and sees it of single day, joining us right now danny meyer, founder and executive chairman of united square hospitality group and founder and chairman of shake shack. danny, it's great to see you i don't know if you've been listening to a little bit of our conversation this morning. i want to talk to you about tips

as well. i want to talk to you about where you think we are in the economy, what kind of feelings you're having when it comes to the consumer, hiring and the like >> the cost of goods sold is definitely coming down thes the cost of labor is remaining steadily high. interestingly from our standpoint, andrew, inflation has done what politicians could never do and it brought people back to the labor force. as you well know during covid our entire industry was on its knees. nobody could work at the beginning and then nobody wanted to work after that in the industry and at this point most of us have not only hired back well over 100% of those who couldn't work but we're like a vacuum clean are gobbling up any human being who will come to our

industry >> why do you think there's still such a thing and that is still putting pressure on the wage side of things. >> the wages have gone up. that has bron p brought more people back to the industry, especially tipped employees because tipped employees are making a percentage of menu prices, which means their wages have appreciably gone up over the last year and a half or so >> what is the average price that you're paying on an hourly basis these days at -- i don't know we can do the big restaurants or also to a shake shack. >> well, if you're talking about full service restaurants with tipping, you're basically talking about minimum wage, which in new york state is approaching the exact same amount as -- i think most of your viewers know there's an adjusted lower minimum wage for tipped employees, which is a shame. it should actually be the exact

same thing but in new york it's approaching the same thing so by, i would say most tipped employees are approaching somewhere between 35 to $50 an hour >> $30 to $50 it comes to a sha shack, what does that look like? >> well, shake shack, it all depends on each state being different. shake shack is roughly half the states in the united states, and they range from very, very low amounts to much higher amounts, depending on what state it is. >> at a shake shack, for example, we were talking about the toast devices that are now point of sale in so many locations where oftentimes it's offered 10 or even 15% or 20%, 25%, 30% on the tip. has that changed things? do you do that at shake shack? >> well, as you well know, technology has replaced the tin

cup that you would see at so many different restaurants and coffee bars, et cetera, around the country, and i don't think i've ever seen anything as high as 30%, not even the kind of restaurants that i like to go to in new york city, but shake shack instituted a tipping opportunity for guests probably about a year and a half ago or so, and many guests opt in, and many guests don't, and it's completely up to -- >> what are your percentages, the sort of suggested percentages? >> i don't know, andrew. >> right well, by the way, what do you think a fair tip is in this day and age? i feel like i'm tipping for the most part 20%. a fine dining restaurant, tipping about 20% these days >> i think in a fine dining restaurant, most people tip 20%. i don't think most people change their tip based on whether the chicken took too long to get out

of the kitchen i think most people realize that the server is relying on tips because of the adjusted lowered minimum wage, and that the timing of the meal has as much to do if not more with the kitchen than it has to do with the server i think people appreciate warm hospitality. they appreciate a sense that you are on their side, and they like to reward that they don't like -- >> what's a proper tip if you go get a cup of coffee or food that you take out >> it could be nothing, becky. if you're just taking out food and it was just a transaction, i give you money, you give me a cup of coffee, i don't think there's any obligation to tip whatsoever >> we're talking about the -- is it a moral issue i feel oftentimes, i end up tipping in a lot of cases because i feel that the people are being underpaid or as you're describing it's part of the transaction. but then one of the -- i mean, look, we can argue that even $50 an hour is still too little. i'm sure people might argue

that some people say $50 is a lot of money per hour >> let's be very clear i'm talking about full-service, fine dining restaurants. i think when you get to the fast casual restaurants around the country, it doesn't come close to approaching that. i just want to be clear about that >> you did something very unique where at one point with some of your restaurants, you were not going to have tipping at all it was going to be built into the price, and then you backed away from that what happened? >> well, we did it for five years and what happened was covid. it was going pretty well, although i will say the math was incredibly difficult not many restaurants around the country joined in. and so, what it meant was that the price on our menu included everything it didn't just include the cost of the food and the beverage and the linens and the flowers and the rent and the insurance and the cooks. it also now included paying for all of the people who bring the food to you, the bartenders, the

waiters, the busboys, et cetera, and furthermore, we were a little bit ambitious because we included a retirement plan we included full family leave opportunities for both the -- so, we got a little bit, i would say, ambitious about what we wanted to do and by the time we did this, the prices we could charge on our menus was not enough to cover all the things we wanted to do while remaining competitive. so, when covid came and people could not work in this industry and didn't necessarily want to work in this industry, we found that it was almost inhumane to tell our servers, you must tell the guest, who wants to tip you, because people did want to tip a lot at the beginning when covid -- when we could finally come back to eat, it was inhumane to tell our servers, you may not accept that expression of gratitude. you must tell the guest you're not allowed to say thank you what we did do, and this is important, we didn't want to erode the gains we had made

because kitchen employees are not eligible, legally, to receive tips it's crazy, but they're not. and so, what we now do is in addition to re-establishing tipping in the dining rooms, we provide a percentage of our revenues each night to our kitchen workers so that on a busy night, they too can do very well >> danny, i don't know whether you saw the head shot we're using, so we want a tip from you. we got a little tip -- >> you got to tip him. you tip the guest. he's not tipping the host. >> for showing this beautiful -- look at that head shot look at that young guy there >> that's what covid did to me >> almost identical except for the -- i don't know. little bit different they're both -- i don't know which one i like better. i prefer the current danny, i think. >> i think that is the current dan danny. >> that's from a couple years ago. i don't know, wisdom sells so, venmo us, danny, or not. >> pay taxes on it, though

>> provide me a number, and i'll give you the tip that i think you deserve. >> do you have a venmo number? >> i've got a venmo number i'll text you after the show, danny. don't do that. people will think that -- danny, it's great to see you. >> i'm going to put it -- ba this tipping thing is a big dete a lot of people online talking about it right now we're back after this. the first time your sales reached 100k with godaddy was also the first time your profits left you speechless. at the counter or on the go, save 20% with the lowest transaction fees and keep more of what you make.

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market flash

pretty small company but kind of interesting. shares of genius shorts are higher the sports data company announced an extension of its agreement with the nfl to provide statistics and play-by-play media it's a five-year extension that will run through 2027-2028, and i always thought that, like, al or chris or whomever, i thought they were researchers and researchers that are there so, we actually -- even some of that stuff comes from people compiling and a.i., i'm sure, will help, would work with that too. >> let's get a final check on the markets this morning we saw the futures turn decidedly lower, started right after we got the adp number, as joe pointed out, maybe before we got the adp number you can see the dow futures off, the s&p down by 37, the nasdaq down by 163. the adp number was much stronger than had been expected it was a number 497,000 jobs

added for the month versus the 220 that the street was expecting. that raises a lot of questions about what we're going to see on friday from the government report and what the fed will then do with its july meeting, if it will raise rates again concern about that, why you're seeing pressures on the futures, you've been looking at the ten-year anyway, folks, that does it for us today make sure you join us tomorrow >> friday. >> it is friday. "squawk on the street" begins right now. we'll see you later. ♪ good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer at post nine of the new york stock exchange. david faber has the morning off. premarket is stumbling here as the job market data comes in extremely hot. adp doubles expectations, and yields are crossing important lines. ten-year above 4%, first time since march. two-year, a fresh 16-year high adp shatters expectations, futures falling on the n