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 news.

the treasury secretary begins her china visit, landing in beijing early today, looking to calm tensions. and meta, as you know, officially launching threads millions join, but will it prove to be a twitter killer let's begin, though, with the markets here jim, you tweeted this morning that you didn't like the feel now, what does this data do? >> same as yesterday we're just in a -- wow the data is just really bad. if adp is right, which they almost -- a half million people got jobs, there's been some geographic areas that aren't so strong south wasn't strong. but i don't think anyone's set up yet, particularly if they trade treasurys, for what remains a boom i mean, i have been saying it's not a hard landing, not a soft landing. it's a takeoff this is a takeoff. no one expects that, it's not spoesed to happen. there's a couple recommendations at toll brothers and pulte, and i'm going to savage these

people -- not savage i'm going to say perhaps thooir ill advised, are these people who have price targets for home builders and the price targets are like 40 points away and they raise them by seven. they have to do that every day from now to kingdom come there are very few people who are that off >> adp is a remarkable print now, granted, they have had issues with their model in the past but a lot of it is leisure, hospitality. that's 200,000 right there >> there's no end to the long on money, short on time now, pay chex did say yesterday that they're seeing a mod occ moderation, and they are actually more concerned because rates up has meant that people aren't being as adventurous. >> it would be one thing if it was just adp this morning, but challenger layoffs get cut in half, lowest since october claims, what, two-week high. but it all directionally says

the same thing >> right someone was trying to make a case that the mortgages being down 4% matters. no, that's ridiculous. it's just not enough homes it's not the rates it's just there are not enough homes to buy so, i mean, we got a nice, strong economy here. it's not what they want to see, but it's strong. i think it's a shame that it's strong for the big companies and not the small, medium-size but travel and leisure, we're going to be back to 2019, but we have to be well in excess of 2019, because we travel now, and we go places i mean, we're sedentary. by the way, the people who work from home on friday take three-day trips to iceland for all i know i mean, honestly i love people work from home because that means you don't have to work and that's a sensational thing. itch i have to come to work, so i can't hide i can't come to work and not work >> when you start doing the show from home on fridays -- >> i have a studio in my

basement i'm going to throw a grenade in there. what is the point of working from home? work means going to work now, i know this is old-fashioned and dates from my first job in 1977, but had i gone into the tallahassee democrat and said, you know what, guys friday is out. they would have said, cramer, you're out how did it happen that we have a four-day -- what are they fighting in france i shouldn't say. that's a violent thing but we're -- i mean, those people are traveling they're going places and they're pretending to work, and that's fine. you pretend to pay, they pretend to work. it's like the soviet union >> so, are stocks materially more vulnerable with the ten-year above 4%? >> absolutely. and i think that we're looking at -- i'm just saying, we can't pay the same price turning multiple the yield curve -- i think we're going to have the 30-year at 5.5% and that's when this thing will end not until then >> first cut getting priced out,

september of next year, 2024 >> there's not going to be cuts. >> that's what the market is saying >> you know, i bet if we go back and look at the people who said that they were going to start cutting this year, we would find people who right now are seeking other jobs why not? zaslav fires a lot of people >> you noticed that. >> i read that piece it did compare him to logan roy, which to me meant he was good. >> you read the original archived "gq" piece. >> i think it's about cash flow. i don't care about friends it's about money zas is making it so they can have cash flow, but that includes firing 30 people whom he does admit he had no idea what they did. now, those people probably took off more than friday those people may have been monday to friday really digging in. >> yeah. i was wondering if you were going to comment on yesterday's news >> you have to logan roy, man >> as for fed speak today, we do

have lori logan saying -- who just said that a june hike was totally appropriate, would have been >> what was that all about >> and then of course williams adding to the hawkish rhetoric over the last couple days. take a listen. >> do we have more to do in terms of monetary policy i think the incoming data support that hypothesis. and you know, again, just continuing to watch the data >> then you have the minutes inflation. risk to the upside housing, jim, that wonder whether it's bottomed. >> bottomed? housing is so strong there's multiple bidders for any toll brothers house. they take it from $900,000 to $1 million it's christmas in july the only real layoff is from the christmas tree shop, which, by the way, i've been to. i've never seen anyone at the christmas tree shop. they had to be more ecumenical and broaden the number of people who do to christmas tree in order to get anybody to go there, and nobody did. if this is the layoff, the

christmas tree store, we're in trouble. we were thinking maybe it's going to be, like, real people, but no it's christmas tree. the fed is not winning it can't this economy is fantastic. >> we do have the lowest inflation of the g7. if it was graded on a global curve, we would be winning >> we just have to -- look, we raise it a little. you're not going to win on housing. he's playing for time, powell. he figures if you get enough time, the home builders will go back to making 1.7 rather than 1.3. that will really help. he's playing for time, and that's why he didn't do anything in june. he's got to play for time. he's got to hope that toll brothers builds more and pulte builds more because housing is where the inflation is it costs 40% more to buy a house than it did in 2019. he has to bring that down if he's going to be the -- known as the good fed chairman. >> some of these red fin numbers are the number of homes for

sale, down 25% year on year. >> that's impossible >> all we really have at this point are the home builders and those who are willing to move for some reason or another >> when you buy an apartment, you get people knocking on your door, saying, listen, i'll pay you 20% more for that apartment after you close. that's what environment we're in multiple bidders for places that aren't for sale. people are knocking on my door, listen, is your house for sale i say, no, i live in my house. they say, it's an ideal house to work on friday it's a play house, for heaven's sake but that fits the description of what people do on friday by the way, no one works -- these people are frauds. >> those who work from home on friday >> yeah. they just are frauds i'm calling them >> because apparently the new dynamic is bringing them in on monday, but the thinking is that friday is a lost cause monday, maybe. >> friday is a lost cause. i think they just sit here and play the market or they play

"call of duty," thank you, bobby kotick or they garden. they ain't working >> we mentioned the treasury secretary this morning, beginning her four-day visit to china. she did arrive in beijing. eunice yoon is on the ground with what to expect. >> the treasury secretary, as you said, has arrived in beijing, and it looks as though she's going to have a very long day ahead of her on friday a senior treasury official said for her first day of meetings, she's going to be sitting down with the former vice premier, lui he, a familiar face to the west, as he is the one who helped negotiate the u.s. trade deal for the chinese under the trump administration she's going to attend a business round table hosted by the american chamber of commerce here, and she was also going to have a bilateral with the premier, li qiang, and end her day with a dinner hosted by the former central bank governor, zhou xiaochuan, another familiar

face to the west the overarching goal, according to the senior treasury official, is that she's going to hope to improve the communication between the u.s. and china, which is a greater effort on the part of the biden administration the topics that are going to be covered are going to be some of the more stickier issues, such as china's trade practices, as well as areas where they hope to find common ground and this is on debt distress in poorer nations or climate change the senior treasury official said that so far, they don't expect any specific policy breakthroughs for her trip, and that they hope that the conversations in beijing will be frank and productive in fact, the official said that that is their expectation. now, on the chinese side, based on official commentary, as well as state media reports, the chinese are seeking what they call signs of u.s. sincerity, so that is some combination of a reduction or an end of the

trump-era tariffs on chinese goods, lifting the sanctions on chinese companies and individuals and stopping the export curves. now, the chinese argument has been that these tariffs are just exacerbating u.s. inflation. that's some of these curbs, carl, would be bad for u.s. companies as well. but the view is that yellen is a very pragmatic person, and that at the end of the day, she might go back to washington with a similar message as the chinese >> interesting we do have nxp today and taiwan semi saying no material effect, jim, from those metals restrictions anywhere. >> no, look, i think that this is an important mission from the point of view of the chinese recognizing that they need us more than they used to i mean, if you think about it, they're reshoring the moving to vietnam. it's taking time but it's beginning to work if you listen to nike in their

pathetic -- i mean, in their somewhat suboptimal conference call, you do understand that what's happening if you're moving away from china and also selling to china, that's not so good but it is working, and i think they need to reverse it, and they need to reverse it now, because when you go to walmart, you'd be surprised how little is from china it's from -- there's -- i find just as much from sri lanka and jordan as i do from china, and walmart's the largest, so i think they have real work to do. they better treat secretary yellen with respect. >> yeah. >> that's what they -- that's what i'm looking for >> we'll see what kind of leverage she has on her visit. our thanks to eunice yoon. when we come back, meta now launching threads in this direct challenge to twitter take a look at the premarket here obviously, some weakness on the back of, once again, strong labor data out of adp, out of alngs,utf aims more "squawk on the street" is straight ahead k she can count o. and now she has myplan, the game-changing new plan that lets her get exactly what she wants and save on every perk.

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big news today we are launching threads, an open and friendly public space for conversations. it takes the best parts of the instagram experience and creates a whole new app around text, ideas, and sharing what's on your mind. you just sign up with your instagram account. you have your followers already there, and you can just get into it and get started, and it is available on the app store now the people who have tried it out so far, the reactions have been really great, and i'm looking forward to the fun journey ahead to turn this into the kind of

big and friendly community that i think we all want to see in the world. all right. looking forward to seeing you all over there on threads. >> that's mark zuckerberg last night on the launch of twitter rival, threads the launch is on to see how the company may monetize that new app and how it might deceisrupte ad market. 15 million sign-ups in the first 11 hours, including yourself >> yes, and andrew sorkin and downtown josh brown have sent me good stuff already zuck has not, which is disappointing. i expect him to be following me, i do, and going and having interactions it's still early where he is we've been trying to figure out how much money you can ascribe to it and i think it's going to be part of a package of a boy. i think if you're making a sales pitch, you'll say, listen, and we'll throw this in and in that sense, it's hard to figure out the roi, but you effectively go to -- basically cutting into linda yaccarino's bailiwick.

i've always found if you give away advertising, it's better than making people pay >> yes so, yesterday, you said, game, set, match >> game, set, match. it's fantastic andrew, great post there's just -- and i invite the people i like and the myriad haters that made me mid-single-digit most hated person in america, right above, not kidding, right above putin, which i felt that putin and then me, but no it was me, then putin. that always disturbed me i got that from senior management this one seems to be a kinder, gentler place, except for if zuck doesn't follow me, i'm going to be -- oh, my daughter's following me this thing is cooking. >> it did pretty well last night. we'll see. >> 15 -- it was 10 million when frank holland was on this morning. >> it was two million in the first two hours, 15 million in the first 11 hours

zuck did tweet for the first time in 11 years, a little jab at musk. >> i felt, when i got, wow, look at this. he came in to me and showed me something, this is the greatest, and my colleague said, no, that went to everybody. i didn't feel as special as i thought. but it is a great video that he put up look, i think this is -- it is game, set -- i think that twitter will lose here >> and lose means what >> i mean, like, look, i'll still -- we'll still go to it, but i will look at what people say about me right now, what people say about me is that i swim in the love canal, and i dry -- the love canal, and it comes off me i jump into the gwannis to get clean. >> what do you say to trading desks who say, we live in a high-frequency information business, twitter has that >> whatever twitter can do, zuck can do better. anything musk can do, still zuck can do better. i'm not going with that anything you can do, i can do better.

zuck zuck is in the business to win the -- musk was in the business, and he didn't want to be so, who's going to win that? one guy was reluctant, and the other guy is just a monster. >> well, you only need, what, one out of every four insta users to match twitter's network effect >> it's so easy to use, and it's friendly, and people are saying nice things. i mean, you know, nobody wants to draw and quarter me it's fabulous. >> right and as for the p.e., the forward p.e. of meta, which has doubled so far this year >> they're going to have a monster quarter. you know, they had these e-15, e-5, they have these classes, classifications of people, and there were people who were just think people they didn't really have anything to say and i got to tell you, they got zazzed >> you mean, out good-bye >> well, they were, like, doing nothing, and after he gets out of the leases in new york, out of the leases, this guy, he's

fired the right people the really expensive people who did nothing. >> so, you think operating leverage remains a story line for this coming earnings print >> it's a huge position for my travel trust it's been. and i think that zuck -- when you talk about -- remember when people used to hate him? >> he's had some worse days, yes. >> i never hear anything other than, hey, you know, he had a baby, his family's growing, he's having a good time, you're a good man i mean, he has become -- i mean, it's one of the great transformations of all time. people really like the guy it is incredible when i met him, you know, he gave me a la croix, he liked my tjx pants, 14 bucks, very good, only 30% poly. although i did have to jump over the highway to get there on time it was a freeway it was a little keanu reeves thing. the bus was coming to me but i just think that's who he became he is a guy people want to know.

>> well, rising stock price cures all ills, jim. >> yes >> it does >> makes everybody great >> yes >> that's why i hate at&t. that's why disney's become problematic. >> we're going to talk some disney and a lot more after the break. we'll get to tesla expecting some forward numbers, perhaps. levi's tonight we'll get cramer's "mad dash" and countdown to the opening bell check out the weakness in the premarket.

take a look at ford this morning getting sales numbers in trucks up in the second quarter. ev sales, up year-to-date. jim, coming on the heels of gm

and the industry sales, just an enormous demand for cars >> ford's stuff is sold out. you go to a bronco, the buronco assembly line, and they come off the line and they're all on the right-hand window, it says, reserved, reserved, reserved there aren't any broncos they need, and they're going to get to run their shifts 24/7 they have to they have way too much demand for their -- for the bronco, and that's not alone the f-150 lightning. people just continually write off farley they're saying that he can't do the big 6.2 free cash flow, they're like a 3.4 if you go to the assembly line, all you can do is say, we need to make more cars and trucks in order to meet demand high-quality products. >> right we replaced the chip shortage with the labor shortage in the car business >> also, you have a union, and

the union is basically one of those unions that sounds very much from the '30s >> you mentioned that yesterday, but they're going into these talks with an enormous amount of leverage >> it's not like u.p.s. where i don't think they have any leverage to speak of the problem is the guy really wants to take away money from the shareholders he thinks they're doing too well the billionaires, as he calls people who are shareholders. and that's bad, because you don't want to roll back some of these great gains that ford had that gave them a lot more say with what hours people have. let's say you take, instead of the half-hour lunch break, it's an hour and a half, or you take the dreaded friday if they stop the bronco assembly line on friday, i don't know what to say. that would be a major blow >> yeah. not everybody can work from home, including those on the line >> no. if you try to work from home putting a tire on a bronco, it's almost impossible. >> opening bell coming up in

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responsible investing. let's get cramer's "mad dash" ahead of the opening bell. >> periodically,there's a statement, a statement price target increase, and today, we got one rather remarkable from keith weiss, microsoft he's at morgan stanley, and he is very, very good and he raises his price target this is rather incredible. from $335 to $415. basically, anointing it as kind of an indy 500 thing going, the pole position at the generative a.i. race begins this piece should be read by everybody, because what it says is, those who think that this thing is not here and now are wrong, and microsoft just got it it's a very impressive report. >> so, ease lily, the next $3 trillion company in this case >> yes i think it's a must-read piece must-read. and i really -- i have been -- my travel trust owns it.

i feel like this is much better than i thought >> remarkable. even though chatgpt website traffic fell for the first time in june. hasn't happened yet. >> i think that they -- that people are beginning to realize, until they get more recent information, it's very hard to be able to do what you want. it's more historical it's a "yes" man it always likes you. i'd like a little controversy. the chatgpt person is, like, hey, mr. cramer, how you doing today? what's cooking >> at least for now, it wants to be friends >> i would have it be like, i want to talk to you about your kids and what went wrong and what went right. it just talks about what went right. >> yes let's get the opening bell here, and at the big board this morning, it's life zone metals, specializing in nickel, celebrating a listing via spac at the nasdaq, it's burke and herbert financial services, a

holding company. lot of discussion about the impact these rates are going to have on asset values at the banks. >> nobody, i mean, other than first horizon, which was up because they were jilted by td, yeah, all the commentary is just that's going to be -- let's go back to why i don't feel good about the market they report first. they can set the tenor, and the tenor is going to be one of, wow, i can't believe how much the fed has hurt these companies. and i know the banks aren't -- the regionals aren't doing that well, and we're going to see that -- you're going to see the decline in ownership, and i thought it was very interesting when i had paychex on last night, they are advising people to pull out over $100,000, diversify, which is highly unusual. they used to say, just stick with your bank there's just so much in flux that you're just not going to want those stocks, and that could hurt the overall market. >> does that mean you're leery of another hike?

>> no, i think another hike has to happen. i just think that there's some -- you got to stick with what's winning, because the nation states, which, the magnificent seven, they're not going to be hurt by any of this. but who's going to be hurt is like comerica. that's a free fire szone i didn't like what the fed had -- >> they talked about that on "squawk. >> what was that like? i mean, you guys aren't ready for the new world? that's crazy but bank of america's a very good bank. citi, i understand, because the book value of citi versus what citi is, there's something awry there. but i said that many times >> so, basically, you're -- your risk tolerance is retrenching back to mega cap tech. >> you'll see the disappointments from everybody else you'll say, well, wait a second, what jensen's doing, jensen

wa huang -- now, goldman-sachs is in a terrible predicament. they were just for wealthy people, and they ramped up for everybody, and now they realize that everybody's not so hot. markets can't be used overseas apple, they're making a lot of noises that it's been a great relationship, but we're ready to leave. you never do that. it's apple you never say that it doesn't work and what are you, crazy? >> it might not be the best fit for them >> right, but somebody will buy it apple, if it was any good, making them a lot of money after the money they sunk, they wouldn't lose it, but the fact that everything is up for grabs, everything, well, that means that they made a mistake, but there's still no one coming out a and saying, we made a mistake. that's not the old -- the old goldman would come out and say, we screwed up. this new goldman says, hey, listen, everything's for sale because we said. no one's saying, listen, we took

this strategy, and it was dead wrong, and we're going to undo it and when you find out that i think that marcus is no-go, that's my own prediction, and that apple goes to another company, i think you're going to say, what were they doing? how are they still premier >> what about the notion -- we got a spac today we have had a couple ipos. we had three in one day, in fact, that capital markets get a little spicier >> i think they're a little better there's some biotech, which is good but -- and i think there's going to be -- janet yellen is probably going to welcome their ridiculous ipos. but yeah, i mean, there are still ipos, but there's no mergers because the person in charge of the ftc, a merger could -- a leaf could blow through a window and sense that so-and-so is thinking about buying so-and-so, and she'll call and say, don't you dare she's the first ftc person i've ever seen who just says, we

can't do mergers because rich people benefit this kind of rhetoric, by the way, which was very much in vogue in 1917, when the, you know, and when those -- the winter palace was stormed and finland station and lina khan, these are all illusions between the czar and the party i'm not talking about the mencovic that's more like tanner at taint trust. >> glad you're parsing your historical analogs >> bolshevik >> markets holding 4,400 here, jim, 1% loss on the s&p. a lot of the leaders are defensive. keurig, dr pepper is in the lead, although a little bit of energy in there, halliburton, s >> there are things that are going to work, but when you see endless cuts to rails and to trucks, that's the real economy. and the real economy's not doing as well as the travel economy.

someone raised norwegian cruise. you know, they took it from low teens to mid-teens that's like norwegian wood is what they're using in their head "nor "norwegian wood" is producing those numbers. >> this bird has flown >> they got to be on the haven >> well, speaking of consumer worries, a firm today, jim, i know you saw piper goes to underweight 11 at a time where we are paying attention to delinquencies and even b of a credit card data down 0.4% for this past week >> but affirm, the numbers of the falls were quite good. so, that's just a kind of piece that just says, we're going to have recession, and it can't be good but max managed to put together a company that doesn't have a lot of defaults, but it's also something you're not supposed to own at this point in the cycle sofi should have been up much more after the student loan. >> after the scotus decision

>> the cycle says, don't own these, and people are taking the cycle very seriously they're selling the minerals, and they're selling the regionals, and they'll go back to microsoft by the end of the day. >> we haven't done a whole lot of media disney, back to $88.5. "variety" with a piece yesterday saying they may not have a billion dollar movie this year for the first time since 2014. people wondering what happened to pixar >> i think it's going to be tough. disney, my trust owns. i want to sell it here because i think that a year and a half, it's going to be higher. i think the next couple quarters are just going to be bad and so, the question is, do you sell it and buy it back? i think that's too hard. but the disney situation versus the, believe it or not, the time warner situation, night and day. >> really? >> night and day >> you mean the progress on the cash flow? >> the cash flow, the paydown of the $9 billion debt, the decision to go after -- to make it so that their online, the presence streaming makes money,

makes everybody else look bad. i wouldn't be surprised if everybody doesn't call zaslav and say, help us, how are you doing this how are you making it so you're making money in streaming? everyone's losing. and yesterday, i talked about how playing for comcast, i will also say that $3 billion loss in comcast, i think that's unacceptable and i work for comcast, but i don't care i don't want to -- i don't want to be a naysayer about a company that i work for, but you can't lose $3 billion. you can't do that. >> barclay's today with some constructive comments about our parent >> that was very good. >> basically saying, margin, pricing, more in line with expectations than, say, charter, got the hulu upside potential. >> but, oh, yeah, they went from 38 to 42 and telco competition is less of a worry if they were to sell hulu, their stake, to -- which, by the way, is still very hard to get on to, make a note. if they sell hulu, they can take

a charge at the same time and figure -- remember, they can't -- there was a previous person who worked at peacock, and he's not with the company. this is his chance to be able to right-size they must take -- i work for comcast. i'm not saying i'm management. i'm obviously just talent. but $3 billion is a lot to lose, and i don't think, unless you're the u.s. army trying to protect taiwan, that is not a forgivable number >> right >> and i'm from philly $3 billion in philly that's, like, you know, i mean, we tip 15% in philly >> yes, yes. you mentioned china. interesting piece about tesla today, signing a letter with other chinese ev makers to protect core socialist values, and basically trying to call a truce among some of the regional players there. >> that surprised me i mean, i think a lot of the people really cutting back from

china. he can stay, musk, but i mean, when i talk to jim farley, by the way, he's just out of china. he says it's just too hard maybe we'll figure out something, ceo of ford saying that ford was there i think tesla's the only guy that's going to make any -- i don't think you're going to see big american evs over there. i mean, i'm waiting for mary barra to say, look, we've got the car that they want, and the truck that they want, but we're not hearing that yet >> yeah. again, the ford numbers this morning, pretty interesting. just the demand for cars we got levi's tonight, jim >> ford's been up endlessly. i have levi strauss on i think that will be interesting. apparel is a black hole. it's a -- i mean, again, referencing the numbers from nike, the conference call about inventory. when you start -- you say, listen, i want to make it clear, we've no inventory problem immediately, i think, wow, geez, how bad is the inventory problem? and then when the cfo, first sentence out of his mouth is,

we're a growth company geez i always thought they were a growth company so, i mean, i preface -- the one i'm actually looking for, i'm looking for vf port to be able to make it so that the big charges are taken and that one can come back at $18 she probably has to cut the dividend but i do think that ralph lauren is the only one i want to own. >> in apparel right now? >> yeah, ralph lauren is really crushing it. you want to own the -- anything that bernard arnault touches i think ralph lauren is the one to watch >> well, one thing to watch in apparel and a bunch of other businesses will be transports. i see fedex this morning saying they will prioritize existing customers in the event of an industry disruption. >> okay. >> we know what that is. >> here's what's going to come raj is not going to screw this

up subramanian is a very competitive guy, and he's saying, we'll take you, u.p.s. clients, but you know what we're not going to do? we're not going to take you and then you go back to u.p.s. if you sign a long-term deal with us, then you can be with us it's a brilliant strategy. he's going to win. the stock remains a buy. >> really? >> yeah. >> so, just, it could be a market share grab, the trouble with the teamsters >> the you get these long-term contracts, you can't miss the back-to-school season for heaven's sake. and raj is a very competitive player who people underestimate repeatedly look at the stock, how it's done since it had the so-called bad quarter. >> it was right over there with you. >> man, he is so good. and i think that if u.p.s. has a strike, it's going to be one of those strikes where you come back and say, how are they ever going to recover from this the teamsters are not -- teamsters are back by the way, all the unions that used to be powerful, uaw

teamsters, they're powerful again. >> some would argue the resurgence of labor is a good thing. >> i was a shop steward. they would tell me, listen, you're going to work saturday, and i would say, how about sunday this is no longer the case these unions are tough >> the machinists? the teamsters. the uaw. >> my god. >> yeah. >> these unions are like when i was growing up, and i remember i worked -- i tried to work in favor of jp stevens. i was on the picket line for jp stevens, and then they just closed jp stevens because they were on the picket line. like, yeah, knock yourself out we're rich, you're not the unions are incredible. and i think the uaw is the one to watch i think it's going to be vicious. vicious. but the fact is, unions are back the u.p.s. breakdown in talks, that's not going to resolve itself in any way that makes you feel that fedex shouldn't be bought >> yeah, when i covered airlines, they were all very

powerful by the way, speaking of airlines -- >> these guys flirted with a system that was very much like what you got in countries that -- i don't want to say communist countries, because that would be too strong flirted with communism >> sure. it's definitely collective power. >> look at this stuff this guy is saying. he's saying, listen, it's time for the rich to take a hit >> right we mentioned the airlines. jim, do you have blue throwing in the towel on this american partnership? sfi about time yeah the airlines -- jonathan kanter is no fan of any of these guys talking to each other. he's the attorney general for antitrust. and he is benign compared to linda "ge"gengis" khan. >> that's your new nickname?

do you expect if there is a drawdown in the next few days on the back of these rate moves, it will be limited? >> i think we have to go through july, though >> first half of july is seasonally pretty good right? >> i know. >> not this year >> no. i just think that july is -- we have to take some hits here, because there was so much money that came in at the -- the money was like -- money off the sidelines came in exactly the wrong time, at the top those people have to throw in the towel. the bank numbers have to be bad. after that, we're going to begin to see that it was really the banks that were bad and there was a lot of companies that were good, but i look at transports transports didn't confirm. no, i can't -- i think it's just a troubled moment right now. >> jpmorgan -- >> it's the highest ka cash we've had in a long time >> how much? >> we're trying to get over -- we're at 10. i want to get to 12. >> really? >> yeah. we sold some stocks yesterday we actually like. i tend not to do that. >> can you name them here? >> i'll name them. we sold procter & gamble we sold -- >> to raise some cash? >> just wanted to have cash for

the decline. i never sell stocks that i like unless they get to be too big and therefore are unwieldly. procter & gamble is a great company. i said, i can sacrifice them because i don't like this market >> you've been pretty clear on that 4,402 this morning >> i'm going to go on threads. right now, i'm on twitter. i'm going to do it nicely on threads. on twitter, it's going to be attack mode. on threads, it will be kinder, gentler. >> let's get to the ism services and j.o.l.t.s. at the top of the hour first, u.s. services pmi let's get to rick santelli hey, rick. >> yes, carl, lots of numbers still yet to come out. this round is s&p global services pmi, a june final replacing mid-month read, mid-month read was 54.1. well, it increased to 54.4 and it remains the fifth consecutive month above 50 in expansion territory, same is true for the composite pmi by

s&p global 53.0 is mid-month read a bit of an improved, also the fifth month above 50 in expansion mode we still have j.o.l.t.s. to come along. we see that interest rates are toying with cycle-high yield closes, 5.07 for twos. now testing and above 4% for tens "squawk on the street" will return after a short break

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take a look at the pre market -- actually the actual

market the dow down 343 one gainer, microsoft, to jim's point of the note out of morgan stanley. we'll see what happens still data on deck in ten minutes and stop trading with jim is also next we planned well for retirement, but i wish we had more cash. you think those two have any idea? that they can sell their life insurance policy for cash? so they're basically sitting on a goldmine? i don't think they have a clue. that's crazy! well, not everyone knows coventry's helped thousands of people sell their policies for cash. even term policies. i can't believe they're just sitting up there! sitting on all this cash. if you own a life insurance policy of $100,000 or more, you can sell all or part of it to coventry. even a term policy. for cash, or a combination of cash and

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it's time for jim and stop trading. >> maybe an overreach or something that doesn't happen. dr. pepper, it's been a disappointment wondering in the wilderness for ages and all the negativity related to the stock. i kind of like the call because i think that bob gamcourt runs it i don't think he's going to accept that for much longer. maybe there's changes afoot. coffee weakness has been real. i'm with this call because of gamcourt, not going home a loser. very good ceo. >> from a coffee standpoint is it a stay at home or office play >> it's stay at home stay at home best ones at home. i have the combined cup, my wife likes the chocolate whatever the hot chocolate and i use coffee i use cologne, for people who want to know, it's a delight

i complained to gamcourt it's got to be this way, that way, this is great. for the people that play at home on friday, work at home on friday, it's ideal work on friday ever seen younger people work on friday they work on their skills, tmc maybe that's why zas love will make it and they practice their penmanship, i don't know what they do. i know what they don't do is actually contribute to the companies they work for. >> you sound like don draper, that's what the money is for. >> had a lot of things going including the anti-tobacco ad which didn't help the earnings. >> good memory levie? >> yeah. look, apparel has been a tough ride i'm going to ask chip, this may be chip's last one, about what to do when you're kind of in a business, secular decline business, which is the higher price clothing i got pair of jeans, $14, three weeks ago at marshals. i wore them on vacation and my

daughter said dad, you look great. what's going on? i said 14 smacks that's what you're looking at. >> that's a bargain. >> they're so good looking oh, my, i kayaked in them and it was a million bucks. >> maybe one day bring them in and wear them on the floor. >> i'll wear them on friday when no one does anything. >> we'll see you tonight "mad money" 6:00 p.m. eastern time south of 4400 on this day where we're losing steam he teronhe back of higher rates don't go away.

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good thursday morning. welcome to another hour of "squawk on the street. i'm carl quintanilla with courtney reagan and mike santoli. live at post nine of the new york stock exchange. sara eisen on assignment and david faber has the morning off. stocks are lower as yields pop two-year at a fresh 16-year high, 10-year above 4, vix at a one-month high on the back of hot numbers across the labor market. >> that's right. markets down more than 1%. 30 minutes into the trading session, here are the three big movers we're watching. start with microsoft, morgan stanley raising its price target to $415 from $335 as wedbush's

dan ives says the a.i. boom will push microsoft higher and be the next company to touch a $3 trillion valuation by early 2024 bank of america upgrading sweetgreen to buy from neutral citing the company's growing foot traffic, up more than 60% year to date watch affirm, piper sandler downgrading the stock to underweight. expects higher rates to pressure operating margins. >> ism services in jolts back to rick santelli. >> yes jolts out for the month of may expecting a number around 9, 900,000. a miss, 9, 824, 000. and last time we were anywhere near that number, we would have to go back to actually only march. march when it was 9 million 745,000. nonetheless it is a miss

if you look at the five numbers for 2023 thus far, three below 10 million if we look for services side from ism, 53.9 the june read 50.3 in the rearview mirror. 53.9, the best level going back to february when it was 55.1 54.1 on prices paid and we all know this particular number f you're monitoring inflation, and its impact on fed decisions you want it to be lower. 54.1 follows 56.2. 54.1 the lightest level since march of 2020. if we look at employment, 53.1 remember this is services, 49.2 in the rearview mirror, under 50 our last look. the first time since mid 22. we popped up nicely, 53.1 the best read since february when it

was 54.0 finally the last number here, ism services new orders, 55.5. well above the rearview mirror at 52.9. 55.5 is the best level since april when it was 56.1 we notice interest rates have been on the move pay attention to the 507 area and 2-year notes even though we're comping areas well back 16 years, we had a close this spring of 507, the high cycle yield close, technically significant if we take that out. that same level for 10s is 4.25, about 21 basis points above where we're trading. back to you. >> all right rick, appreciate that. a lot of important numbers i was thinking given the improvement in new orders and employment and decline in prices paid we might be celebrating

that data. >> it feels like it reinforces the idea of a re-acceleration in the economy, less slack than we were anticipating, and it catches the market at a moment when the yield move has caught everybody's attention and it's sort of pushing in the same direction. you also have apprehension ahead of the jobs report tomorrow and easily see the market saying okay, we've moved a long way in a short distance in terms of the bond yields, maybe we can moderate that before tomorrow. as for stocks it is good news, certain, that economy is holding together better, but it's a matter of kind of consolidating the gains of june, getting back to some kind of, you know, levels that make sense banks weak on this as well it seems as if it's going to force the fed's hand reprising the entire fed policy curve out, six months, a year, 5.5, 6 and 12 monthtreasury yields where we're seemingly migrating to something we have to digest. doesn't seem as if we're losing very much.

4400 where we popped up from on the last day of june we're not going back that far in time to where we were right at these levels. >> when you look at the jolts data does it give you clues what we might see tomorrow? seems consensus has been wrong over and over again. >> i think everyone is leaning to the assumption that the official forecasts are likely to be light again and that's the adp number there's a high threshold for caring about what adp says because it hasn't corresponded very well. whatever that threshold is we've cleared it getting towards half a million net new jobs in that report we'll see. people have pointed out you've had big job prints not long before an official recession in past cycles. nothing that says you're insulated from a downturn because hiring has been at a pretty good clip. >> what about those this morning that say the last time the 2-year yield was lower we were

10% lower on stocks. >> much lower on the nasdaq 100. i guess i would say that's only one input. it's not some kind of magical grid that says at this level of yields we have to be at this level of prices. earnings system have kind of flattened out. they've gotten a little softer in the last few weeks, but the point is, we're pricing in different things today versus that snapshot in march when we were there because we really did think that at that time fed is going to have to raise to 6%, probably going to break something we got something broken in advance with the regional banks and now we're kind of picking up the implications of that several months later. >> it is eye popping to see the 2-year sitting at 5.08% for the yield. let's turn to meta, officially launching its threads app, a direct challenge to twitter, and its declining ad revenue julia boorstin has the latest. good morning, julia. >> reporter: good morning, courtney threads is off to a fast start leveraging instagram's reach to quickly on board users mark zuckerberg announcing 10

million downloads in its first seven hours, key bank increasing meta's price target to $335 on the heels of threads launch, saying it appears to address twitter's challenges and could represent several billion of dollars in ad revenue, meaning u.s. and international adoption. but key bank does warn we believe this will be an immaterial contributor near term as meta focuses on adoption over monetization with an overweight rating they are raising their earnings system on meta's core ad products. meanwhile wells fargo with an equal weight rating, sees a 3% level at maturity, pointing to uncertainty aren't eu data privacy regulation as the cause of threads delayed launch in eu countries and meta needs to balance revenue opportunity with the potential for incremental

regulatory and privacy scrutiny. now twitter despite its smaller size has been a lightning rod for controversy. we'll have to see if threads turns out to be a kinder, gentler and safer place than twitter has been. >> what do we know about the appetite for advertising on a platform like threads, threads in general, with the promise it hopes to be kinder and more gentler than twitter, perhaps less controversial for some of the businesses that decided to pull away from twitter >> well, look, advertisers follow consumers and eyeballs. it's too soon to say how quickly meta will monetize threads, but they do typically have an approach of building the use case first, making sure the product is good and then adding advertising later. so we're going to be talking to some advertisers today everyone is looking for new platforms to reach consumers they will try out new platforms. they've seen advertisers jump on to tiktok and some of the other platforms as way to reach

particularly younger consumers, but i think the fact that meta has so much information about who the people are, who are on threads, not just what they're interested in but have all the information about what they follow, on instagram and what they do on instagram, so i think that will provide a wealth of data that will enable better ad targeting and then also measurement, but i think we can expect meta to wait a beat before they start launching ads. >> interesting just shy of yesterday's $298 the high intraday for the year fascinating. we'll talk in a bit. julia boorstin lot of data in fed speak to monitor and we'll turn to steve liesman wrapping up highlights. >> big numbers including the ism services number. strong adp number with hawkish fed talk popping the street, rethink its outlook for growth and inflation. adp private sect more than doubled at 497, that suggested a strong jobs report on the way tomorrow the service sector and education

health services also were the ones driving higher adp. continuing claims at 17, suggesting those who lose work and file a claim are finding work employment index coming in at 53.1, an increase from the prior month. all this raises questions whether the 240 wall street consensus for tomorrow is that good anymore or as you were talking about on the weak side new dallas fed president lori logan, voter this year, making hawkish remarks dismissing factors. saying fomc policy needs to be restrictive. skeptical of a lag effect coming from prior rate hikes and thinks it's in the economy already, not much credit tightening going to hurt the economy and concerned whether inflation will return to the target and is sustainable and timely

all this you saw interest rates higher, 2-year up above 5% but raising the probabilities of a july hike by the fed to near 90% and november to 46%. that's up 10 points from yesterday. get a chance tomorrow in this show actually a little bit later to talk to chicago fed president austan goolsbee about these things i'm going to have a -- pick a fight with him and maybe just the fed idea, i think service sector hiring is good for inflation. because if you think about the only supply we have in the service sector is people supplying their service it's jobs. when you have a big surge in the service sector i think that's anti-or disinflationary. >> all right well it will be interesting to see if they're willing to go with that or at least have, you know, kind of build into the conversations we got detailed in the fed minutes yesterday. very interested to see that. we'll talk to you soon let's continue this conversation with jpmorgan's chief u.s. economist mike fer rowly

you heard the litany of hot numbers in the latest batch. we've gotten, you know, the relatively hawkish fed speak are we in a re-acceleration of this economy or just a pazzing phase? >> i think it's really hard to say because there's a lot of flingtsing signals out of the -- conflicting signals out of the economy right now and some were mentioned in the minutes of the fomc it will be easy to answer tomorrow ta rather than today. looks like the labor market is slowing. it's garadual but we'll have a better sense tomorrow. >> in terms of the way the rates market is reprising fed expectations and how long we're going to stay there, it seems as if that's been one of the notable shifts recently? >> yeah. i think the fed has been pretty successful in, you know, disabusing the market of the

notion they're going to be cutting rates shortly after reaching the terminal rate so i do think that would be it, you know, considered a success here in their communication policy they've gotten a nice assist from the data which has shaken off the idea the economy would buckle under the impact of the cumulative rate hikes. but, you know, i think july is, obviously, looking pretty much like a lock unless we get a disaster tomorrow and then i think a path after that gets more interesting given the data we've seen. >> are we searching for that pain point for the economy at this point it seems as if growth has held intact not at gang busters levels but real growth in the 2% range at this point structurally labor market seems like it doesn't want to soften up too much in the short term you have to weigh that against these long lead time forward indicators of recession risks like the leading economic indicators and yield curve

what are we placing most weight on here? >> i think we are feeling our way to that pain point because, you know, i think chair powell doesn't trust forecasting a whole lot, economic forecasting, and so i think he's willing to continue to kind of dribble out rate hikes until you start to see things buckle rather than just forecasting things to buckle notably that has to come in the labor market and we're not seeing signs of that we had a little bit of improvement in lower job openings today, but you also had a pretty decent increase in quits which is a sign of confidence in the labor market until you start to see those go in the right direction more convincingly, i think chair powell is going to be inclined to continue to dish out the rate hikes until he sees some cracking there. >> mike, ahead of the bank earnings that we're going to be getting here soon, lori logan saying they doesn't believe the banking stress we seen earlier in the year is having an impact

on credit availability do you agree and how closely is the fed watching or worried about that as we could be getting a slew of more information here? >> i guess it depends on how you define outsized impact nothing like 2008, of course most indicators suggest that, you know, bank credit is getting tighter, particularly for smaller businesses, and you see that in the weekly cni lending trending lower it is a headwind i don't think it's an acute headwind but it is something that, you know, i think you saw this in the fed stat forecast when they were talking about the recession forecast it was pretty importantly informed by what we're seeing in bankinging development it is something they're watching carefully. if you break it you own it i think they want to see tightening being transmitted through the banks but i don't

think they want to be brought before congress to answer more questions about more bank failures. >> mike, on the list of things the bulls were hoping for, deflation, now shelter graduating into a period where rents would begin to ease we are seeing alternative data suggesting it, but i wonder if you believe it right now >> in the official bls measures and cpi report you've seen rolling over of those measures of inflation dins about march, not in a dramatic way, but i agree with the point that some of these alternative measures like zillow and so forth, you have seen pretty sharp deceleration late last year and i think there was some expectation would follow through this year and instead you really have seen kind of more stabilization. so that process may take a little bit longer than people were thinking six months ago on the other hand it is a positive thing that last week we saw multifamily housing starts

at a i forget 30-year high or something like that. you are seeing the appropriate supply response take at least two years, about two years, for that to get on-line. >> a lot of things taking longer than we anticipated in the cycle. we'll see how it plays into tomorrow's numbers thanks very much >> good to see you. >> mike from jpmorgan. as we head to a break here's our road map for the rest of the hour could gamestop's ryan cohen save bed, bath & beyond shareholders. that's one of the theorys on reddit right now. a lot more on zuckerberg's threads and what it could mean to the social ad market. >> home builders lower but near all-time highs amid the shortage of homes for sale. the ceo of compass will join us to discuss don't go anywhere. ah, these bills are crazy. she has no idea she's sitting on a goldmine. well she doesn't

know that if she owns a life insurance policy of $100,000 or more she can sell all or part of it to coventry for cash. even a term policy. even a term policy? even a term policy! find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com.

regionals are sliding? today's trade. dominic chu is tracking that action. >> the price target cuts are weighing on the regional banks this morning kdw analysts took down the target prices for u.s. bank corp, keycorp and zions as well. also raymond james slashed comerica's target price to $53 a share. one of the reasons you're seeing the regional bank etf lower. all four of those banks down around 3 to 4% on the morning so far and are among the s&p 500's biggest laggards most of those regional banks

will report earnings in a couple weeks, but courtney, lingering concerns about interest rates, the economy, curve inversions weighing on the banks. >> there are times where it seems like it's been stabilized but perhaps the issues are not all together resolved. we'll get more information when they report. thank you very much. ryan cohen with the potential new lean saver kristina partsinevelos joins us to explain. >> you like that toss. what do bedtime stories, a bankrupt company and memes all have in common fellow montrealer of gamestop ryan cohen or at least the speculation on reddit right now. bed, bath & beyond filed for bankruptcy in april, delisted in may and now trades on the u.s.'s main over the counter exchange the shares tend to float around until the bankruptcy process is over, and its bonds are practically free highlighting the value in bed, bath and beyond after overstock paid

$21.5 million for all ips. that means they don't even own bed, bath & beyond is now overstock right now. shares have soared over 300% since delisting which is pretty uncommon for a bankrupt business and more uncommon you have retail investors getting in and even though they know they would be the last to be paid in any sale, so enter the bedtime stories and meme angle the reddit crowd has a theory involving teddy holdings which filed trademark applications to be an online marketplace from towels, picture frames, to children's bedtime stories it's also registered as a bank in delaware. the reddit crowd noted the address for teddy holdings is the same for teddy publishing, the publisher of a series of children's books written by ryan cohen. there's that connection. prominent figure in the meme stock world although did cash out of bed, bath & beyond last

year making over $50 million investors now, though, the retail crowd are hoping teddy may step in to somehow find value in the bankrupt retailer i called and reached out or tried to reach out to teddy's patent lawyer but didn't hear back in time for this hit. rumors can move names. meme traders are hoping to connect the dots that may or may not be there suggesting that teddy holdings and in turn ryan cohen can help find value in a bankrupt company that is no longer really bed, bath & beyond. >> bed, bath and beyond saw the huge moves because of the meme crowd, haven't given up on this name even after its filed for bankruptcy and ryan cohen cashed out. >> and corporate bonds are not really worth anything or and the value, what's the value, the ipo was important, reason why overstock bought it, but they believe this company, shell, whatever is left of it, that hasn't been given to overstock, could be renamed and taken under teddy's wing that's it. >> you're shaking your head no. >> shows you the lengths of

wishleful thinking people are willing to delude themselves, people needing to get into the business needs the husk of bed, bath & beyond. i can remember lt, and it was craze, and it happens every cycle but the fact that we have the encouragement here of somebody at one point saw value in a doomed retailer is -- i mean, i think we should be clear that, you know, these are people telling stories to themselves. >> or this is a confident market right now. you have these investors seeking out profit we're reinvigorating the meme trade when people are trying to find value in names that are pretty much dead. >> trying to find alternatives to what has been private equity coming to the rescue. >> not always turned out very well for a lot of these retail names, of course, with all of the debt they leverage and when other crises happen big problems surface later on. >> fascinating >> you are all smiling but -

>> a bedtime story. >> let me get my glass of milk. >> once upon a time. ryan cohen came to the rescue, cape and all he's going to save the damsel in distress or that's the story they're telling themselves. >> as we go to break, watch shares of ford releasing the latest sales numbers trucks up 26 in q2 ev sales up 35 in the month of june we'll have more on the auto mbmes and some of the stellar nuers in the past 24 hours don't go anywhere. how's the chicken? the prawns are delicious. oh, i have a shellfish allergy.

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life zone metals debuts through a spac at the nyse this morning. shares were lower in early trading. obviously, a tough tape today. the nickel mining company plans to become a source for battery makers competing with suppliers in indonesia and china at its undeveloped mine in tanzania joining us is life zone metals ceo on a week for the metals complex around the world congratulations. good to have you. >> thanks for having me here. >> talk about where the company fits in the long-term narrative of what's going to happen to metals demand as evs become adopted around the world

>> yeah. i think when you look at the massive anticipated transition to this electric economy, i think, you know, one of the biggest challenges is not only to getting the metals but doing it in a clean way. we can source more metal, but you have to meet the standards that are being demanded by the oems and battery producers co2 targets required not only from people, companies, what we do is provide a clean processing technology combined with unlocking the next really big source of nickel and cobalt in tanzania we're busy developing that mine right now. >> customers right now >> we will be in production end of 2026 and we're engaged with all the auto manufactures and so we're talking to them right now and i think one of the big attractions for us, we'll have one of the lowest co2 footprints when you look at where nickel comes from specifically it's not a very clean process nickel is challenged we're providing the next biggest cleanest source of nickel with a

low co2 footprint. that's going to be required by the world going forward and we're there providing the solutions right now. >> how does that technology work why is it cleaner and more efficient? >> the mineral processing value chain, if you look at it historically, it's set up through a series of met lurcle processes. big furnaces, burning it at very high temperatures and we can do better, so what this is a water based clean processing technology we have 120 patents we're in the process of implementing and commercializing this technology to clean up the mineral supply chain. that's really if any of these companies will meet the co2 demands they have to start doing it in a cleaner way. listen to elon musk and tesla, 30% of their footprint is the nickel in the lithium ion battery. you have to clean up nickel and that's what we're demonstrating in tanzania right now. >> in terms of overall, nickel

most of it to date is used for stainless steel. if you meet the targets of how much we're going to be powered by battery technology how much more in aggregate has to be produced >> you're right. the bulk of the demand is stainless steel. the largest demand from the ev industry and that's going to be around 20% compound annual growth going forward for nickel and cobalt and nickel coming on stream in indonesia, but when you look at the process of how they mine in indonesia, that's open pit, going through multiple meta lurnlgcle steps going into big furnaces the new supply coming online is not the type of clean quality that really the oems and the world will demand going forward. we have, you know, the largest grade flickle sulfide mine and we're partnered with bhp invested 100 million our partner in tanz mea, and big step to come back into africa and

tanzania through the project so that's a big demonstration of these deposits are important, go where they exist, but you have the processes in a way that's going to meet the demand for the industry which is cleaner processing next week reflexctios on the spac process? >> with go green we saw the partnership with go green the spac market has been challenged over the past year but to identify like-minded partners, go green, their whole vision is to, you know, identify clean processing companies that can make a difference going forward and so philosophically we had a very easy connection, chemistry. it's kind of nice to come to the market, list at nyse with a partner as well, they've been supportive and we've got more to do. >> a lot more i would imagine in the coming years the stock turned around, obviously, and a difficult day for equities overall we'll be watching you.

thanks for coming by. >> thank you for having me. >> it's great. >> home builder stocks soaring this year. climbing mortgage rates and fewer homes for sale, we'll take a closer look there as the markets are pretty much at their lows of the morning. the dow down 460, 1.25% loss of the s&p 500, the nasdaq giving back 1.3% as treasury yields lift don't go anywhere. what? i'm 12 hours short. - have a fun weekend. - ♪ unnecessary action hero! unnecessary. ♪ - was that necessary? - no. neither is a blown weekend. with paycom, employees do their own payroll so you can fix problems before they become problems. - hmm! get paycom and make the unnecessary, unnecessary. - see you down the line.

welcome back your cnbc news update. the president of belarus said that yevgeny prigozhin the leader of the wagner mercenary group is back in russia. alexander lukashenko's claim call into question the deal he helped to broker between prigozhin and russian president vladimir putin to end an armed rebellion against the kremlin's leaders. prigozhin hasn't been seen publicly since the short-lived mutiny and nbc news could not confirm his whereabouts.

two new jersey firefighters died trying to put out a fire aboard a cargo ship in the port of newark. the flames broke out in a handful of cars last night on the tenth floor of the ship and then quickly spread to other floors they aren't sure yet what started the fire and in ohio, norfolk southern is trying to share the blame in february's fiery train derailment the railroad filed a complaint against car owners and shippers connected to the hazardous chemicals that spilled in the crash. norfolk southern says they bare shipping responsibility under federal regulations. back to you. >> thank you very much. mortgage demand dropping to its lowest levels in a month as interest and mortgage rates climb. john williams saying yesterday he's surprised by the strength of the housing market. >> it is a bit of a surprise to see the housing market kind of bounce back a bit after a lot of those measures slowed with the

higher mortgage rates. it's not completely surprising that it would stabilize, mortgage rates rise, the market adjusts to that and moves forward. we definitely like you said have seen some signs of improvement in an area we watch and, you know, i watch along with all the other parts of the economy i think to me it's not so worrisome that the housing market has rebounded somewhat, it's i'm focused on the bigger picture, how does it all fit together. >> joining us now is compass' ceo to help us fit it together where what do you make where we're at in the state of housing? a bunch of measures going on you hear anecdotically people are putting bids on houses that aren't for sale? >> earlier this year i shared i believe 6% mortgage rates were set as the new normal. i think we're in an environment where 7% mortgage rates are the new normal and people are accepting it the data points in the last month, three of the four weeks on increase in purchase mortgage

activity, this week it was down 5% but that's not down much and it's what we expect in the spring market. also, every month this year the price of homes were higher than the month before. >> what about the housing supply how do we get over the shortage? is there a long-term solution? >> the fed can help bring mortgage rates back down they bring mortgage rates back down to a place where they're around 5% we'll see a huge unlock of inventory. but until that time, there's a little bit of a silver lining in housing starts 1.6 million housing starts the greatest numbers since 2016, also a third of the jumbo mortgages in the pandemic period were arms and the majority of them were below 7-year arms. the value of that asset is going to decrease every year if it's a five-year arm in 2020, about a year and a half left. >> when you say 7% mortgage

rates are being accepted it means by accepting it, home prices aren't going down, you're paying a greater share of wallet of what you earned for housing, which at some point has to change the rent versus buy equation, doesn't it if you have more rental supply coming on? >> we're seeing housing deflation on price over year-over-year basis on rentals by 0.5%. i think the fed has done their job there. on sales, although it's been up on price every month this year, it's about 3% less than the prior year so i think we're seeing a normalization at this point between rent versus buy. the issue again is inventory and we need to see an unlock in order to create more balance the issue that the fed has in order to bring down price, they're trying to -- prices in general they're bringing up rates. as you bring up rates, mortgage rates go up. as mortgage rates go up more inventory is unlocked. they're in a catch 22 where

they're not able to bring down the value of these homes. >> so what are you seeing from sellers that may have a home that could be in high demand but if they sell it they have to find a new place to live and may have to pay a higher rate than they're currently selling? how are they deciding that calculus, want to unlock the value of the home but they have to pay more to live somewhere else >> we're seeing more people buy without mortgages than in the past so historically it's around 25% of buyers were all cash buyers now it's almost 40%. this is higher than the number i've ever seen. >> the manhattan numbers, 65 in the last three months? >> cash. >> it's incredible. >> yeah. if you have cash that's the way to get through this. but on the other hand we're seeing more buyers that have to buy because you have to move, there are life events, people get married, have kids, have a new job, return to office, they move to a zoom market, we're seeing them do is that they're buying a new home but instead of selling their existing home, they're renting it out so they can have the financial low

mortgage rates and high rents. >> since you mentioned it with changes in work and wait we live our lives, what's happening in some of these zoom boom towns? >> so the zoom market, there's not a zoom market i know that's doing well right. so you have boise, idaho, salt lake city, and the demand that went there is coming back because ceos across the country are expecting people to come back to office at different rates. the opportunity i would see is in downtown san francisco. here's why you just saw in seattle, which is downtown, very similar to san francisco, that there became a moderately to robust market after amazon required people to come back to the office. ceos in downtown san francisco will expect people to come back at some point. when that happens, the downtown market, i believe, will surge and prices with it. >> there's a lot that has to happen in that san francisco market to clean that up. thank you very much for joining us. >> thank you. still to come this morning,

we're going to turn back to threads and talk about what it might mean for twitter and the social ad market at large. a quick note as we go to break later today do not miss a major cnbc exclusive as jon fortt sits down with amazon's chief andy jassy live from their seattle headquarters at 4:00 p.m. eastern time stay with us new projects means new project managers. you need to hire. i need indeed. indeed you do. when you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria. visit indeed.com/hire and get started today.

indexes hovering near their lows of the morning. see 480-point loss on the dow. the nasdaq is leading to the downside, down 1.4%. s&p below the 4400 mark, back to levels seen in june, down 1.25%. the move in yields is driving things the 10-year has popped above 4 to 407, back to before the march svb failure. the volatile index popping

a multiweek high as we have the jobs number tomorrow got people clinching up. >> meantime meta shares defying the broader market up 1% as the twitter competitor threads boasts more than 10 million users in the first seven hours the verge co-founder editor in chief joins us with his early take it sounds like your argument is, nice start, but it's a long game >> it's a long game. replacing twitter is the global public town square, whatever you want to call it, necessarily a long game. i think facebook facebook meta is taking that approach. zuckerberg's approach today, approach to monetization is the same as everything else. get on a clear path to a billion users and then monetize. the stock is popping because of user growth, traditionally what's driven meta stock not revenue or revenue growth. user growth is king with these companies and meta has found actual user growth for the first time in a long time. >> talk to me about your

assessment of the tools within the app and whether or not that can help long-standing twitter users recreate elsewhere >> yeah. i mean when i say it's a long way to go, you can barely use this thing on a laptop as a former power twitter user, you are one too, desktop is where all the action is. all those music facts and gifs are on a folder on your desktop not on your phone. you need that stuff, a desktop app that looks like the tweet act, you need tools to let brands publish there's no doubt they will implement this stuff they have the user pop and now can you layer on these tools for brands and other users who want to make use of the platform and then importantly, even if they succeed at capturing 100% of twitter's business, with something i can that looks like twitter, twitter was a bad

business but historically a bad business, why they sold it to elon you have to invent new app products and monetization products they have a long way to go but amazing how just user growth, they're up to 25 million now, they posted that, amazing how raw user growth is still kind of the underlying story we haven't seen it for these companies in such a long time because they're so big. >> i was going to ask about the noovg effect the if you have a big user or follower base on twitter, do you have hesitancy to move over to threads? do you have to manage both for a while? the network effect is the thing here 25 million is enough to get started but well shy of where twitter is. >> twitter's number is hard to know they were at 300 some million, some enormous percentage are apparently bots which led to them throttling over the weekend. they still have a bots problem if meta gets to 30 million,

they're at 10% of whatever twitter's best estimate was. that's pretty good for a couple of days. the question i think all of us have, twitter never drove any traffic to media sites it was great for marketing, building a brand can threads become equally good at building a brand. it can distribute people across a range of services or is meta going tohold it all. that's where their ideas about decentralized social plugging into the metaverse gets interesting. they haven't done anything yet. >> for understandable reasons we discussed this as a can it replace or usurp what twitter is, but seems like there's a splintering in general tiktok has grown to where it has grown. do we have to think about it as there's one central place for your primary activity like if you're a twitter person or previously an instagram person or just going to splinter?

>> feels early in the morning to get this philosophical i'm going to take a shot at it i think the internet is re-setting feels more like 2011 than whatever we thought last year was going to be. all the publishers are focusing on e-mail and direct home pages which is fascinating the social networks are splintering. we're seeing actual market share changes. none of this stuff was happening a year ago i think this reset moment for meta to say, maybe i have like three or four interspace places i go instead of one monolithic place, that's why decentral is interesting. for these companies what makes it attractive they get to farm out content moderation and say to congress or whoever else, look at all this competition, you can bring your own content moderating algorithms to the mix. we're only in charge if you want us us to be. >> it might be a reset as to how

much people post in general but we'll see how that plays out linda yaccarino tweets about how we, in her word, built the twitter community and that is somehow irreplaceable. would you expect twitter to make tweaks to stem whatever bleeding there may be >> one thing that has been true, the elon version of twitter and the other version of twitter is they have a monopoly they can increase costs on users and people have nowhere to go. now there's evidence people have somewhere to go. i'm hopeful, like we've seen with tesla, they're lowering prices, opening up to other carmakers. a little competition goes a long way. and ideally the competition from threads or blue sky or whatever makes twitter kind of reassess some of their decisions and figure out how to build a more sustainable community. instead of just increasing costs, which is what they've

been doing linda yaccari in o will be at the summit in september with your colleague. >> linda is a great interview. fascinating day. great to see you >> always good to see you. check out laggards on the s&p. banks are definitely one dynamic. a little bit of energy, a little travel and leisure you'll see cruise lines and casinos. there's caesars down and dow down 500

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session. we are sitting now at session lows let's get to bob pisani with what's going on under the surface. >> this is a rare day. 20 to 1 declining. that's less than 1%. everything is down, but defensive stock is holding up a little better, health care, consumer staples litically 20 stocks in the s&p 500 are on the upside. banks continue to underperform semiconductors, which have been market leaders and consumer discretionary also leaders consumer staples holding up.

banks underperforming on the week, the month, the year. again, just no energy at all they're dramatically underperforming even in the last month. commodity stocks have also been notable underperformers. mosaic, fertilizer stocks, copper, and conocophillips and apa also underperforming in the last month or so where are we now these job report numbers and job numbers today team to have thrown people in a tizzy unless job growth sparks inflation, generally the market holding up good jobs, strong jobs, is good for stocks that's the soft landing. the worry here, the big worry is the fed tightening induces a recession. that's the thing that freaks everybody out here we would need a big uptick in inflation for the pullback to turn to a series downturn. that's what's going on here today. remember, we'll get the cpi next week we're looking at 3% potential print here so, this may be just a little blip up. again, the key here is fed

tightening, worries inducing a recession. that's why we're down so much today. i want to point out something quickly. the banks announced -- they announced they would raise dividends last week for the quarter. that's good news we're having record dividend still here that first quarter, that number, 146 billion, that's a record payout for the s&p 500 not quite a record for the second quarter, but we'll probably have a record for 2023. here's why it matters. 1.7% dividend yield. people say, who cares about 1.7% it is a critical component in the overall return of the s&p 500. and, mike, you and i have talked about this, 10% average return on the s&p that includes a reinvested dividend because you have compounded returns, about 40% of the total return in the s&p 500 is due to dividends being reinvested so everybody who says, i don't care about 1.7%, you do, long term, the power of compounded returns. that's the story there. >> people say 1.7%, you can get so much more of that in bond

yields, that's fixed, you're not getting any more, it grows off the 1.7%. >> exactly. >> bob, good stuff we'll see what happens later this afternoon. thanks, good to see you guys "squawk on the street" continues after this don't go anywhere.

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good thursday morning. i'm carl quintanilla with melissa lee. setting at again da today, citi's ed morris on his second half outlook on crude and bearishness on brent. >> why the lack of fundamentals is a bubble waiting to burst. >> later, ben silverman on whether the amazon cost cuts should take place. let's take a check of the markets. it's the yield curve that's the story in today's session the two-year yield hitting its highest levels since 2007. this is a fresh cycle high the ten-year also going up it's that spread that's of concern. it's a five-year offering another place