copycat app. we talk to the reporter who broke the story. it is friday, july 7th, 2023 "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times area. i'm becky quick with joe kernen. andrew is off today. we have been looking at the markets. check out the u.s. equity futures. there are red arrows these are modest declines. the market waiting to see what happens with the jobs report right now, dow futures off 23 points s&p futures down 4 nasdaq off 27. the dow was down 1% after yesterday's surprisingly hot adp report the s&p and nasdaq fell by .80%.

it was originally the treasury markets where you saw the most activity hot adp number immediately had people thinking the fed is going to raise rarttes again. that was reflected in the yields the 10-year treasury is above 4% 2-year treasury above 5% again, you are talking about maybe 100 basis points of inversion and serious movement as everybody thought this is it. this is the indication that the jobs market is hotter and that will be putting pressure on the fed. >> immediate action across the board. dollar index surged. bitcoin headed to 32,000 on larry fink's comments on being digital gold it sold off and almost broke below $30,000. it is $30,100 on the fed's not

done bulls say the fed may go up more we may be getting close to core inflation and get to where you need to be on the short term and if you want two points or whatever, we are almost there. 5% we are almost there. we did 500 basis points. we have 50 left? that is probably not the end of the world. there is a piece on tom lee talking about it why he is now at 4,700. >> now above 4,800 >> 50 is not great maybe they do another 50 you know, 500 is out of the way. >> the weird reaction is this was a strong jobs market the economy is still here hanging in the idea that is concerning. what would the market rather see? the beginning of the recession starting or something along those lines?

>> people aren't quitting any more when they were quitting, they could go anywhere to get a job that is another sign adp is not the government. >> it's tracked closely. >> they can make mistakes. i'm holding out. >> i wonder if these numbers are better than the government >> i'm holding on for an average number maybe not a cool number. >> 100,000 >> maybe less. you know, hope springs eternal it is warped i'm hoping there weren't enough jobs created and nobody got a ra raise. it's warped. it doesn't follow. i'm hopeful for one of the times adp is dead wrong. hoping it is dead wrong that the economy is weaker. >> adp showed 500,000 jobs created. that should be good news that hot jobs market showed no signs of cooling payroll growth for the first five months led 1.6

million. payrolls rose 240,000 in june. there were questions about whether people would raise expectations based on what we saw with adp 240 is the estimate. the unemployment rate is expected to tick to 3.6% the other question is what happens with wages did they go up what is the inflationary wage? >> the next segment is jassy sounds sound means it's going to be a sot bite from andy jassy we're not back to playing music. i'm looking at my side shot. i've gone gray i've never liked i got a haircut yesterday. normally i would go and they cut off all the gray and people

accuse me of using grecian it is not working anymore. >> i can tell you about a k colorist >> how long does that take >> a long time >> this is 11 minutes. this one looks like it took 11 minutes. amazon's ceo andy jassy challenging the notion that amazon's fallen behind in a.i. in our interview with jon fortt, he highlights the cloud business to benefit from new a.i. applications run the sot. >> all of the teams are investing the customer experience with generative a.i we are building the applications the overwhelming majority of the applications will be built by other companies and we are optimistic people will build them on top of aws >> he is hoping for new age smooth jazz. some something. >> i could whistle for you.

>> don't do that that's jarring take five. andy jassy states the environment is the hype cycle that comes before the substance cycle which we -- substance cycle. that is happening at the white house. >> this was a great interview. i listened to it with jon in the car. i listened in the car. it was really in depth and thorough he went to a lot of pieces the thing that struck me is andy jassy has a grasp. he has a long-term plan of how they will build it out he is still looking for a lot of growth that is something the market has been reluctant to buy into are they going to have the margins? it is two businesses online business and aws and all of those things putting together he does have a play at growth. >> amazing the breadth of the different businesses as a watch amazon tv

and leave the house and see those little electric trucks everywhere i am. they never try to pull over close to the side of the road. whenever they are, where the house is, they stop. you know, you have to wait. >> it is a hard job. >> they don't even attempt to get close to the side of the street i'm amazon i'm electric i'm parking here >> you have to have streets. >> i'm going to the store and you will have to go around me. that's okay. it's amazon. >> they are bringing you the stuff you need. >> exactly treasury secretary janet yellen making public comments in china overnight. she is concerned about the export controls announced this week on two metals used in chip manufacturing. eunice yoon joins us live from beijing. eunice, this is something we have been watching expectations are low, but so far, we are hearing they are making pretty substantial talks.

maybe not substantial progress, but substantive talks. >> reporter: they are having discussions and secretary yellen earlier met with american business executives at the event. this included folks from boeing and cargill and bank of america and medtronics and s&p she is pressing the u.s. case against the chinese business practices. she is particularly troubled by punitive actions against u.s. firms and concerned by new export controls on two metals used for chips the president leader told me they were encouraged by her trip because it addressed a pain point for u.s. businesses in china. that is deteriorating u.s.ties she is meeting with the premier and he may be the highest level

point person to xi jinping who is wooing foreign investment and trying to get governments to stop de-risking or cutting ties with china what is interesting is the comments and impression that this trip is leaving because state media has been reporting about how her plane landed on the tarmac and a rainbow appeared they are saying this is a sign of harmony after conflict which suggests on state media that the government wants to spin this as a positive trip. the other thing which is interesting is the social media has been abuzz that she has been spotted at a local chinese restaurant somebody in her standing in the u.s. government is eating at a local dive untended or unintended

i don't know >> eunice, the take on the reuters report that chinese authorities are likely to announce a fine of $1.1 billion on a.n.t. group to supposedly bring an end to the years-long overhaul what do you know about that? >> reporter: well, that would be very significant because of the sizefines. the bad news is the fine is $1.1 billion which is the largest the chinese internet industry has seen close to par with the fine that was slapped on to didi years ago. the good news is that it means this could clear the way for a.n.t. to finally get a license to become a financial holding company which would mean it could be regulated like other banks and could ipo and expand the business of the other point people are talking about is it is a sign that the chinese government wants to ease pressure off the

private sector and say let's grow try to reverse some of the crackdowns we have seen over the past year. in that way it is seen as a positive development. >> wanting the economy to grow again and concerned about that over other issues that held them back. >> it is friday, eunice. i don't like my fridays ruined i don't know if it makes over to you. it would be very easy for china and russia, maybe in combination, world war iii would be fought with viruses and two front biological and cyber attack could defeat the u.s. before we even know what hit us. i don't know if we stock up on stuff on the way home. i wanted to mention to you, eunice i don't know if it is something

you have seen or not or what will happen. >> reporter: no, i thought you were talking about your day was going to be ruined by being too busy on covering alibaba stock analysts here have been talking about a.n.t. and what it means for alibaba. i have not heard about that. >> it is an op-ed piece. i guess it is good to think about all of the black swans and what could happen in the future. covid could have been a warm-up which is a frightening thought eunice, thank you. coming up, the two-year treasury yield pulling back from the 16-year high we talk rates ahead of the jobs report next. later, a newly approved alzheimer's treatment could cost medicare as much as $5 billion a year dr. scott gottlieb will join us at the bottom of the hour. bcngsqwkoxonhi "ua b" cn >> announcer: this cnbc program

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chief officer of merrill and bank of america private bank matt, i was talking about your thoughts earlier if you look at where core inflation is, do we have rates about where they need to be right now within 50 basis points or so? >> i think that's a good call, joe. we are definitely in the range where we need to be. monetary policy acts with a lag. our belief is there is probably two more hikes from here it takes a while 18 months or so for that 5% jump in rates to actually work into the economy. whether it is two from here or one or three, that's around the margins. we believe that we're very, very close to the end of the rate hike cycle that is what the yield curve is telling you and indicators are telling you. it is all consistent story >> you pointed out the inversion

hit in november and how long does it take before we find out what the inversion is telling us >> so, you have seen the curve invert at different times. if you want to focus on the fed funds on the 10-year treasury. that is the best indicator for more than 60 years, it never inverted without a recession happening. recession hasn't happened without it inverted. it is a very good indicator. it inverted first time in november of 2022 you look back at the las recessions it takes between 9 and 18 months for the recession to hit based on that timeframe, the recession is hitting q3 this year to q1 next year our chief economist believes it is first quarter next year that is in historical range and middle of the fairway of when you expect the recession to occur based on the last several

recessions back to 1970. we believe the yield curve is a great predictor and harbinger that the fed is doing what it needs to do. it will get what it needs to get to eventually. slower wage growth and bring inflation back down not to target, but close to the target. >> michael comes on and he is a tall man >> we're both pretty tall. >> he can look out over and see things he is someone you should probably listen to what is going on with adp? what does that mean about today? let's say this confirms the adp numbers. that doesn't sound like what you described at all what is taking so long for things to bite is this a head fake or are there underlining things we can't see that play into what you are saying it seems like, you know, we are

still running really hot in the labor market >> absolutely agree. a lot of folks have been surprised the resilience of the market particularly the labor market. we think it is not perfectly simple story, but relatively simple story talking to michael gapin, my friend on the research side, show estimateestimates. his estimate is there is still ten months of excess stimulus payments and that is what we are seeing here. we are seeing continued resilience because we have not seen government spending program of this magnitude relative to gdp since world war ii this was a war-time level of fiscal spending. in world war ii, it was financed by the fed shock. what happened? massive government spending. financed directly by the fed

double digit inflation we are seeing a replay of that now. we are seeing the resilience of just that. the amount of stimulus and amount of payments in the marmt. market we know how to deal with it. tightened policy keep it tight. the fed is doing a better job of talking hawkish. keep rates where they are. they will get where they are looking for, but it takes another six-to-nine months. >> 2-year hit a 16-year high chill. 16-year. four in five -- nice round numbers. 4% on the 10-year treasury 5% on the 2-year treasury. let's take a step back see what happens matt, thank you. say hi to gapin and say hi to him if you see him try to get his attention he is lumbering through the

hallways we'll see you later. thank you. >> thanks, joe when we come back, twitter accusing meta of stealing its trade secrets to launch its threads app. we talk to the reporter who broke that story next. after today's jobs report, former fed vice chair roger eaowe bs will join us to brkdn thjo number and what it means for the next fed rate decision. "squawk box" will be right back. u d for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done. i'm okay.

twitter is threatening legal action over meta over the social media app threads. the company accusing meta of poaching former employees to

form a copycat application joining us is max, the reporter who broke the story. >> good morning. >> you got a hold of the letter? >> it was written by elon's personal attorney and done a lot of work for twitter. basically, the letter alleged that meta hired former twitter engineers and staff to basically build this copycat app and basically demanded that meta preserve all documents related to building threads and former twitter employees who now work at meta and might have worked on this product >> twitter fired half of the employee employees. is there anything preventing them from being hired after that >> absolutely. that's the point people raised after we reported this story yesterday. part of the cost cutting measures that elon put in place as soon as he came in and bought twitter was to get rid of a lot

of the engineering staff one thing to keep in mind here is what meta said in response to this meta said that this is completely moot because nobody former at twitter worked on the threads app to begin with. meta might have hired former twitter staff, none worked on this product >> i guess i wonder. mark zuckerberg tweeted for the first time in 11 years yesterday. >> that's right. >> basically acknowledging this was a copycat. he tweeted the picture of the spiderman who looked just like him. he is saying, we are coping you. what is the legal framework? what are you allowed to do >> i talked to a number of legal experts. i wanted to see if this is tough talk from the aggressive lawyer or was there any validity to this

there is nothing to prevent you from hiring former staff to work and build a competitive app. meta said in the first place they built this off the back of inst instagram. they were not trying to replicate twitter. they they were trying to take twitter's audience >> no question what they were legally allowed to do. >> they were building it on to instagram. which is why you were able to get some of your instagram followers and the like. >> max, the story of the week about the judge and talking about the government not interfering with what happens on social media in the files, a lot of it was facebook which was cooperative, if you will. now we have twitter which a lot of people used to love the old twitter -- anybody on the right

got banned now they are mad and it is mean again. is this setting up to be a fox news versus cnn social media site is it going back to mark zuckerberg, you know, banning or are people at facebook who live near san francisco and are they gone to ban anyone with a right-leaning idea or kinder twitter? >> that is an interesting question and actually in the first day, we have seen -- >> i've heard yesterday saying i'm banned already. >> they have been doing more content moderation elon has taken a casual affair approach to content. meta wants to be content friendly and having more restrictive policies. the criticism on the right is we went too far >> or center >> the loudest voices were on the right, but i hear the point. >> it all depends on the universe you don't know if you are moving

or the object approaching you is moving it is all relative >> fair new. >> thank you for coming in, max. is this a big competitor others have tried. >> you know, as you correctly mentioned, there have been in the eight months since elon bought twitter, a number of competitors have tried to take some of that dissatisfied user base or felt the changes they made on the platform degraded the quality. none of those has managed to make a dent. >> the letter is proof. >> they are spooked, clearly the numbers they announced on the first day is 30 million signups and users. yes, that's right. alex reported last night that the number had jumped to 48. i'm told that number is accurate and mark zuckerberg might be

posting something later today. >> good to see you coming up, jobs friday we will talk about opportunities and potential job cuts related to the rapid adoption of a.i as we head to break, here is a look at the s&p 500 winners and losers from yesterday. >> announcer: winners and losers is sponsored by state street global advisors of the -- advisers the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪ ♪

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good morning welcome back to "squawk box" live from the nasdaq market site in times square. checking the futures down eight on the dow. did you see it yesterday when it was down 400 plus and had headed for 500? it was 4 for a while it looked like that really started at 8:00. before the number actually that cast everything today wocould reverse or confirm

>> the market saying the fed means what they say about the last couple rate hikes it wasn't huge panic 1% move. it is not end of the world stuff. >> the bond market or supposedly the yield curve is coming around to believe the fed we are still pointing to 4%. still 100% on inversion. it still doesn't believe it will last as long as we're meant. this is you. the labor market is in focus ahead of the jobs report including how a.i. could cause disruption according to the report by goldman sachs, a.i. could expose 300 million jobs to automation, but increase gdp by 7% joining us to talk more about a.i. on hiring trends is sedal, the business school professor and jacqueline rice.

is this going to be that big of a problem for jobs will it destroy that many jobs >> first of all, good morning. great to be with you all i think it is worth starting with the fear that people in the market are feeling which is substantial. we are hearing from many angles it is worth acknowledging there is a lot of fear and it is not unfounded. i believe that automation will be streamlining different processes and functions. that means that companies of the future will need fewer people to operate. at the same time, the barrier to entry for companies will go down significantly and the pace of innovation is rising like nothing we have seen before.

i expect to see companies of the future operate with fewer people opportunities will still abound. it may look different than it does today >> sedal, do you feel that unconcerned about things or more concerned? >> i think the concerns are legitimate with the advancement of a.i. and especially generative a.i i distinguish between company-led a.i. implementations and individual uses of generative a.i. which means that people can actually cut the time that it takes for them to do regular tasks. we have hear what might take four hours to produce is now taking an hour and a half. connectivity is getting boosted. that means jobs will be transformed. >> i hope you're happy, tsedal i hope you're happy. telling all these people they can stay home. they will be running back and

begging. please don't put a computer in my chair. let me come back this is all remote work stuff, tsedal it is coming home to roost >> i said remote work and hybrid work is digital work our obsession with butts in seats is misplaced we really need to be thinking about how a.i., generative a.i., is going to transform jobs and build industries and also displace jobs. this -- this -- this physical in-person virtual, we're way past that, joe it is time to think how do we upscale? >> i was kidding you in truth, this is the next step of transformation you have been talking about that we better be ready or we are caught flat footed it confirms most of the stuff you have been saying much to my

chagrin. >> joe, a.i. has been around for 60 years it has been barrelling >> how does google find what you are looking for? >> jaclyn, describe what you do. >> so, we are an a.i. first company that is helping other companies build a.i. solutions think of us as a modern consultant which is an a.i. enabled helper to bridge the gap between a.i. aspirations and reality. that was the big piece i was going to come to which is all of the impact on jobs hinges on companies being successful of the otherwise, we are seeing what you just mentioned which is a productivity boost employees. i think this is the core moment for companies. the make or break.

we saw a flurry of activity out of the gate post chatgpt with companies who really sort of saw the moment they had to move on a.i. then many of them are sort of hitting a bit of a wall right now. that's kind of, i think, the core message for really reaching some of the economic growth. they have to keep going and they have to keep pushing it may be a less exciting story right now because they are working through challenges companies are staying focused and that is where the gains be had and it is worth it you mentioned google a moment ago. that is my former employer where i worked eight plus years. you were right every part of the company is powered with a.i that is true for tribe a.i. as well this is the future of where companies are headed and will

determine the winners from the losers in my opinion >> tsedal, let's talk about chatgpt. it saw the first decline in the last month in users. i think it is because kids are out of school and out of college and they don't need to use it to write paper ann and they don't need to use it to write paper an for the most part that is the flurry andy jassy as on yesterday on cnbc and said there will be substance. that wave is still coming. what would you tell workers to do to prepare for that and get ready? >> i think it is important to start learning and experimenting with chatgpt and others. what is also happened is the proliferation of chatgpt early on starting in november is actually augmented by the releases of other generative a.i. systems, including visual based journey. it is important to experiment.

it is also inncredibly important to learn the liabilities and harms. bias and misinformation. these things ha llucinate and w need to come up with guardrails to ensure we don't perpetuate harm there is a learning curve to climb to use the systems responsibly. there is no doubt in my mind when school is back in session in september that every student is going to use these systems as a companion to learning. >> and that is something to write their papers for them. tsedal, jaclyn, thank you. a source tells cnbc that taylor swift signed a deal with

ftx. the conflict is a report that she declined after due dil diligence. >> what? >> the story of the it was $100 million supposedly get squawk pod on your favorite podcast app and listen any time on your single favorite. we'll be right back.

taylor swift signed and did agree to a sponsorship deal with bankrupt ftx, but executives at ftx decided not to go through with it. i don't know why they decided that it is all according to a person familiar with the matter which does align with the early report in "the new york times" which contradicted the accounts. the nature of the failed deal with swift and ftx an attorney praised her due diligence efforts and said the artist asked the exchange to explain why its listed assets were not registered securities >> i thought it was her dad telling her that

>> they are saying the source tells cnbc that swift did agree to the deal and assigned agreement with ftx founder sam b bankman-fried's inbox. executives pursued him not to follow through with the reported $100 million deal. this smells weird of why not? >> he was spending money willy-nilly and getting access to mike at kevas and all kinds of crazy stuff >> you could have kept everybody else for me. if you got taylor swift, some of the lesser -- >> i don't know what to believe. >> you could have got matt damon. >> i don't think it was ftx. >> brady and gisele. >> yeah. gisele and sam bankman-fried

>> what is that paper? >> i didn't see that when we come back, a newly approved alzheimer's treatment could cost medicare asuch mas $5 billion a year. dr. scott gottlieb will join us next we'll be right back. >> announcer: executive edge is sponsored by at&t business at&t 5g is fast, reliable and secure 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. that sounds just paw-fect. terrier-iffic i labra-dore you round of a-paws at&t 5g is fast, reliable and secure for your business. [phone: starting route.] technology helps us navigate to work. [phone: go straight.] but, to navigate the complexities of modern work...

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if the country really wants to sink as to whether cyber attack with a viral attack. let's talk about this alzheimer's treatment. it's not easy to administer. the population of 70 aging. number two, you have to start

early with the $26,000 per year. the fag■de of things to consider on how we adopted and use it. budget wise. on the companies that developed it has formulation that may be available at some point in 2024, which would certainly make it easy to administer at home and indicated for people who have mild cognitive impairment. it's not early in the course of the disease by the time they're diagnosed with alzheimer's disease and you have cognitive impairment in a pretty advanced disease by the time it demonstrated mental status tests that they administer. you have the disease for decades. i think this dragon availability of all these drugs is going to do is help more people get diagnosed. now that we have something to offer and more people interven . you can get tested and diagnosed earlier. a lot of things you can do

other than lifestyle modifications are the kinds of interventions like blood pressure that can reduce the prevention of alzheimer's disease. i think it's a good thing about 6 million patients in alzheimer's takes two years to get diagnosed with an average patient in about 25% of patients with this disease don't get diagnosed. >> they could be 5 billion per year. theoretically. any of these numbers and make the budget and the numbers we've seen from the fighting administration. do they take anything into account? >> that's an interesting question. when i make a coverage decision when they look terribly smart when you go back and read it they rejected the fda's judgment on the original decision to not cover this class of drugs. they have initially assumed to have these drugs within the baseline and when they weren't paying for

the jokes and showed in the cost of the medicare part b program. they have been touting the fact that medicare part b premiums are lower than expected and they prescribed that to that collection inflation reduction act. when they went back and revise the coverage decisions finally acknowledge it will be paying for the sharks because the subsequent data which was so convincing and they were really demonstrating to be wrong on the site that they assumed the trucks would work. and that they be updated the budget to take into consideration that the jokes would be covered. they didn't take up the part b premiums as much as a shadow. isn't this some kind of reconciliation of the budget or part b. these are now going to get paid for. they were touting this as a savings in the program because they decided not to cover this class of drugs until this point. there is still a lot of conditions apply. it's going to be hard for patients particularly people

who may not have as equitable access to healthcare. you're going to have to jump through a lot of hoops and i would expect the utilization to go slowly in this category. >> wait a minute. the biden administration is wrong on science and gaming numbers? >> cms was. like the original decision that i made it was quite intuitive. they scorned the fda's judgment on the original approval the first drug in this category. the judge, saying they didn't believe the drug they targeted did not question the data. there's a much stronger data set. they didn't believe these drugs worked. i don't think anybody believes these drugs are the final word on alzheimer's disease. they are intervening in a late part of the disease process. were getting better drugs in the future other than earlier in the process and the

underlying biology of the disease with progression. we know how to get a drug that affects some component of the disease process. the clinical trial of the patient. this literally took 30 years. >> is a better than this? does it cost the same? is that the next generation? similar? >> it's hard to say is better. the data looked better. he was later stage patient whether patients have the more advanced disease. you know how to continue to take the drug. entry into you get official reduction. this drug was approved yesterday has the soluble forms of it. there's earlier portions of the disease process because of that. that is why it is believed echoes of the later stages. >> thank you. >> thank you.

>> i have word games. >> figures

a preview of what this could mean for the market.

coming up. a breakthrough in the battle against alzheimer's. fda approving a drug. a pivotal decision that one paints in medicare. a report card on how the pandemic impact. here's a clue. it's not good. the second hour begins right now. i'm joe kernen along with becky quick. andrew is off today. sitting in his chair. steve liesman. he's going to do a great job with everything. what is the number? >> do you want to talk about

the work? >> i haven't done any work. >> they put me in this sick position. steam is a terrible job. >> if it is anything short of adp. >> adp could be more than like the government. >> we can do a 160 today. >> you mean do a 180. >> 180 down towards 160. >> this is a point i make. four to five. four with a 10. another 50 basis points. not another 500. i'm trying to look at things. >> maybe we should get people to let us look.

cooling in the job market even though some data suggest unexpected use of numbers. 240 average. that's down from the 339 i. the average unemployment rate is down to 36 or 367. the average hourly wage is unchanged at 03 which would breakdown the 42 from the 43. the services report include gains in the employment index with a pop in jobless claims during the survey. they remain low. that is if you lose work could be finding work. goldman tech is picking up in gemini labor market is tight and developing strong hiring of youth summer workers and all forms of the blue truck indicate a strong pace of job. 250 have issues about seasonals. the probabilities separate hikes also went up. it's now

around 90% hike in july. 45% november. and november 26 percent for the second hike. the resuming job market is the foundation of the landing. it's unclear how woodstock that is going to require and feel competent. >> if you get the average hourly wages. that number is expectation 0.3% over a few months or less. is that then make the government desmet or they say we are not so concerned about the job markets as long as it is not affecting the leading situation. >> i think people misunderstand the fact that lower job number . there means to what is believed to be. it's possible to get a hot number and a way for example if you have a surge of people with a participation rate and a

lower rate with an increase. we suggest this be commonly remains understaffed. other than the level of gdp we do not have workers in place. that is coming closer to them. this imagery is nice in that. the places where we see all the job openings are the places that are the most understaffed relative to gdp. and then under my contention is that i think hiring is anti- inflation. >> how many restaurants are open for how long and how many places -- imagine if american airlines had enough pilots and stewardess these days. >> oh my god. >> i'm so behind. i'm thinking about disco being good. take a listen these days.

>> the whole actor and actions this thing. it's possible. >> that is the feds only told that it is possible that the employer can say strong to be what we are one. >> that is possible. we like the adp wage data. the universal symbol is much larger than the governments. that's been coming down. is higher than the government reports by the way. they gave out to attend last time at both of the jobs and the job of the changes. that is something that people are following. >> but about people quitting? >> that went up a little bit. >> is a dangerous point in the increase i believe. >> that is a good sign that

people are able to quit but the churn is a big deal. and then matt is pleading with me that we move on. >> automakers calls. is he a fed official or something now? >> that is his schedule. >>

>> i have a great rescue dog. >> what is your favorite show? >> and appeared i'm going to get a lot of executive producers and senior produces kind of messaging me right after this right now. >> tell them the truth. >> i can kind of go down that route. i go with that i like them all equally. squawk is the best show in business on cable i would save them from may be 6:00 to 9.

9:00 a.m. we will take the macro commentary from stephen change into some of the micro commentary and some of the stocks on the move here. start with a check on shares of tesla which are just about one third of 1%. affectionately, 325,000 shares of volume. susceptor 2% drop during yesterday's broader market declines. newcomb this morning on the china front. tesla has offered potential ev buyers in the country new cash rebates in order to boost the sales of the. the rebate is on the heels of tesla joining other chinese ev makers in a pledge to appoint a price cutting war. giving notice to some workers responsible for making battery packs of layoffs. dispose of worker with the tesla balance off by 1%. china shares the u.s. listed the chinese e-commerce and web services ali baba sent chinese regulators one point million

dollars and ali baba's group. that is finest and removed by officials to close out their problems and and let them get them necessary licenses in the world second biggest economy. as well as a big potential down the line. ali baba up 2%. the big box store with costco the shares are down about three quarters of 1% with volumes after reported sales growth that established store locations installed by 1.4% in june. the same-store sales growth figures were down 2 1/2% and following gasoline prices were costco estimating they were responsible for 4% drag overall. joe, tesla in the news, costco

in denny's, ali baba in the news. and a lot more that was coming up at the 8:00 a.m. hour too. i'm going to remain in the 6:00 to 9:00 a.m.. >> i was going to call you milquetoast. you can't say you love suck. can you find a way of saying that? >> i love squawk box. >> i'm going to stick with my story. we will come back to you later. we will figure out a way. you don't have to come back. >> i don't see joe in the office. i see becky in the office. >> i don't like your temple. >> it's so nice. i am you to play golf in connecticut, but you like to stay in jersey.

>> janet yellen sharing her concerns over china's recent trade with escalations. more face-to-face meetings. the former secretary carlos up next. before the break, checking on the box. on the box. stay tuned. ♪♪ at morgan stanley, old school hard work meets bold new thinking. ♪♪ partnering to unlock new ideas, to create new legacies, to transform a company, industry, economy,

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(chainsaw continues) (daughter screams) let's pretend for a second that you didn't let down your entire family. what would that reality look like? well i guess i would've gotten us xfinity... and we'd have a better view. do you need mulch? what, we have a ton of mulch. sleepovers just aren't what they used to be. a house full of screens?ton. basically no hiccups? you guys have no idea how good you've got it. how old are you? like, 80? back in my day, it was scary stories and flashlights. we don't get scared. oh, really? mom can see your search history. that's what i thought. introducing the next generation 10g network. only from xfinity.

treasury secretary janet yellen meeting with former chinese officials in beijing. the latest in a series of high profile visits from top ceos and diplomats including jamie deming, tim cook, i■an must, secretary of state antony blinking. join us now with the generations with carlos gutierrez. he is the cofounder and executive chairman of them had and carlos, struck about where things are standing. how would you or describe the relationship between the united is in china right now? >> rock-bottom. it's very positive. it's an opportunity for change. it's an opportunity to improve things. they're doing a great job. i don't expect anything to come out of it.

i don't think the chinese will come back or pullback. it's to start. we have just summer. this is a great place to start. we are talking about economics and business. as opposed to till other areas that are contentious. >> yeah. they are at maybe rock-bottom in terms of the relationship if you look over recent decades. i think there's a reason for it too. i think is probably not a way to put things back together the way they were before. there's a lot of questions about national security. and making sure that we see things differently post covid- 19 too of making sure that we have two too dependent on one

nation as we have been to this point. >> that is right. i think a lot of the things that we are doing will supply chains that obtain or encourage companies to do so. companies doing business in china will invest in china for china. this is a fine line and the difference between decoupling. if you look at the traders being at an all-time high. this motion of decoupling is a word that is not really happening. perhaps, they suffered and there is a linkage between the u.s. and china continues, no matter what anyone says. >> carlos, in a letter you can dictate how other countries act. we want to begin engaging with china. in a world where they

have two by from saudi rabia and we have to deal with talking to iran. i understand your point, but at the same time you are saying that. there is a whole bunch of people saying this was awful with janet yellen going over there and making nice with these guys and they are buying up farmland and covering up what happened at the lab. you saw those comments, right? other people are saying that it was horrible. they are acting like business as usual as they try to eat our lunch across the board. >> well, what is happening is some things are totally unacceptable. what we are doing is avoiding things getting worse. that is what the world eeds to be worried about. there's so much talk about,

hearing statements that the chinese will go into taiwan since 1997. in 2007, and now sometime between 2025 and 2049. that kind of sparks more contentiousãmake it's interesting, china made it very clear that they will only attack or will attack taiwan if they will go in if there is a foreign military presence in taiwan and if taiwan declares independence. those are the two reasons. and that, by the way, as the number one concern when u.s. is in china. the discussions and roundtables, that is what people bring up. that is what they talk about investments in china. and so janet yellen will go and have a very good meeting where

she will have some good, honest constructive discussions . when she comes back what happens, is somebody tried to pass a taiwan independence bill in congress. janet yellen, she has a limit as to what she can do and there are so many different stakeholders. it's for the world's interest and i don't think it is appeasement to try to avoid military concept of china. we can have an arrangement, we can have a treaty, but i don't think anybody wants war. >> you think visiting taiwan was is what got us the rock-bottom? like semiconductors and product trade issues that go beyond. >> i think that was a point.

obviously, they didn't like it. those are the types of things we have to wonder why they do that. we're trying to create pace. we are trying to warn a military conflict. we should be ready to fight china on chips, trade, business, on anything, except going to war. i find it hard to comprehend why there are those who don't dismiss the idea of war. and they just take it off the table. we have to be careful. this is a trade battle with the trade were continuing to fight each other. things may get better. i do believe there is an opportunity to create an arrangement or some kind of an agreement with technology with the chips today and tomorrow something else.

we negotiated nuclear deals with the soviet union. i think we are capable of negotiating the technology that will be better than what it is today which is changing time to time. i think this is a great start. i think the ministrations on the right track and now we have to follow up. after the secretary antony blinken's visit, he was very straightforward and very honest and very constructive. immediately after, he started with china. and those are the types of diplomatic issues that we have to contend with. they should be private discussions. we should say whatever we want to say in discussion and talk about anything. it doesn't mean we have to carry out the negotiations. this is the way it once was. >> carlos, thank you.

carlos gutierrez, have a great weekend. sharing plans on competing with google and microsoft in the ai world. talking big tech in a bit. . back. today's four the trivia question. rlcording to projections by wod population prospects, what your will china's population peaked? the answer when squawk box the answer when squawk box continues.ose that gap? gaaaaaaaaaaaap!!! aflac! aflac! gaaaaaaaaaaaap!!! it's about to go down, baby! aflac! aflac! stop that goat! get help with expenses health insurance doesn't cover at aflac.com

according to projections by world population prospects. what you will china's population peaked? the answer, 2030. meta-platforms new app threats is now the number one pre-downloaded app on the apple and google app stores with mark zuckerberg as of yesterday morning. posting within 30 million users so far. the early success coming with the potential site is twitter's lawyers accused meta-of what they call systematic and unlawful misappropriation of trade secrets. alleging that med approached former twitter staffers to work

on the project. these are claims that meta denies. a rough week for socks. meta is holding up games and trading the highest level in 17 months. he can see is down by about $.64 this morning. 291 35. >> still to come. the fda, and opinion of treatment. medicare covering treatments under some conditions and worried about the impact next. plus, historically low math and reading test scores. con academy found the challenges for students for the post-pdec rlanmiwod. stay tuned. you're watching squawk box.

an entire book on how the amazon company is closing in on ai.

>> i don't think artificial intelligence changes how your structures are as a company. every single business unit inside of amazon is working intensely and very probably on genitive ai. in fact, many measuring what will work and what we are learning and ways that would be more effective for customers models is very useful across different departments inside of amazon. >> joining us with the ai is the independent solutions wealth management portfolio manager. and finance professor. always blown away by putting a few words into google to see what it comes up with. i can't imagine. isn't that ai? it's been around for 30 years. and has a creator and founder and he said that he sold the ai company 10 years ago.

>> what happened? had we cross over into this new era? it was chet gpt i think was telling us to write something and people can't believe they might not have to do homework ever again. >> we really emphasized genitive ai last fall really is for commercials pressed pretty hard and there is a paradigm. you are absolutely right. we've been talking about this in companies we've been talking about with ai and to the entire product sweeps for years. i'd like to interview yesterday that you did with andy. and i will tell you my you completely agreed with the cycle and all of the tech majors including amazon will get to the substance before too long. tech companies will distinguish themselves, modify having ai,

that'll be everybody's oxygen by the companies that actually don't jump on this bandwagon. again, a lot of this reminds me very much in the late 90s taken the lead to thousands amount of the times companies technology or not, claiming that they were companies. and the internet became a really great dylan changed everything. but a couple of companies really excluded and a bunch of companies are no longer in existence today. >> considering if you take your phone and put something in motion that expands the entire country to an amazon warehouse via logistics center or a plane that goes to an electric truck which goes to your door and all of ai. what is really the difference with what we are talking about

implementing from here on out. if they run on ai already in amazon? >> i think the key from yesterday's interview that you guys did is, right now is they are getting everything they deserve for the ai. however, if amazon is right and i have the two chips that they can bring with ai, not only for them to but maybe potentially for other partners that are cheaper and faster. that is a major take away. the major potential positive from the interview yesterday with the ceo of amazon. >> all rights. the meeting today. you thought maybe it was time for a look around to see if you can make additional or adding to positions? i think that might've been a good call given what we saw with the adp reports.

are you still somewhat less enamored of doing something right now? >> yes. particularly i don't want to chase the ai names. and in the tech majors that they are essentially making with the tech companies spend probably the only two with reasonable evaluations we show our meta and google. i would probably look for meta for a lot of reasons not only the threat of thread over twitter, but i'd like to see what these companies on the next part of results that is coming fast and serious in about two or three weeks time because the last quarter, they talked about ai as marketing. this quarter, when they have guidance for the next timeframe, they are actually going to talk about ai impacting today or impacting anytime soon revenue, cash flow, earnings. i think a lot of companies will not be able to confirm that. i'm a little hesitant. >> i will quickly note that you think threading is a threat as

far as advertising dollars they can take away from twitter? >> i think over time as they are definitely going to be a threat in the near-term is a scary thing isn't nearly what meta can do to drive revenues. if meta today was to take all of twitter's revenues, which was about $5 billion before elon musk by the company. it's only going to add 4% to meta's revenue base. overtime yes in the near time potentially for twitter and the long-term, once meta starts to monetize, yes, it could be a big deal. i don't expect them to monetize it for a while. >> thank you. >> congratulations. the fda approving an all time mistreatment who paves the way for medicare coverage. speaking to a biotech analyst about the breakthrough coming next. raising price target for biogen. $311 from $302.

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cnbc's daily digital show , a global perspective, and high profile interviews. catching up on the latest episodes from cnbc crypto ropes answered by crypto.com. the fda granting alzheimer's drug, it slows the

disease. the judge made by the department of biogen. here's with the ceo had to say about the benefits of the treatment of fast money yesterday. >> this treatment is safe and effective for the alzheimer's disease. this is from the clinical trial. we believe about 100,000 individuals could be diagnosed and eligible for treatment. >> biotech says there's a lot of things floating around on how to view this. compared to a drug for cancer that came and it ushered in subsequent treatments that were very powerful but maybe wasn't the end of it at the beginning.

is there similarities in your view? it is a start for something nobody has had any luck with in the past. >> i think you are right on point. it's a big breakthrough for them to have a new alzheimer's drug is the first time taken gl timers patient. a big breakthrough. importantly, i think it is the start of the next decade with innovation and a lot of companies working on new treatments to approve on this in combination. at that is great for alzheimer's patient. they are on a new era here for the treatment of alzheimer's. >> that's a huge market. sadly, that's a huge market. for drug companies, that can justify the investments which are going to be happy and also the cost for society.

alzheimer's is for long-term treatment in the first place, but this is pretty expensive here in we had to deliver it with intuition or whatever is pretty -- not like taking a pill. it's that simple. >> it is sort of pointing to the debate of courses the drug if there is a bound point of $5000 per year and that is why they covered and the majority of that medicare insurance., the total cost of that could be as high as $10 billion is what people have for peak sales for these produced drugs as well with the alzheimer's antibody coming. that is billions of dollars. of course, what is important is patients and caregivers and families, preventing the time to a nursing home which can be

20,000 or 30,000 a year. i can obviously prevent downstream costs for the cost of care for these people, nurses, and time away from family. it is not only the cost, but certainly savings as well. >> i don't think it is talked about very much. >> is the evolution of the treatments for alzheimer's. you think it'll all focus around amyloid and now if you get a better way of getting rid of it. is that going to mean you get better results? do we just don't i know? do we have more work to do? to make all this the entomology? >> i think you're right on. think about the evolution from oncology or hiv. there is treatment that decades ago we started with basic treatments to advanced cancer by one or two months while we have

therapy, drugs that can provide many months or years of extended life. hiv, now, there's about 15 or 20 pills trying to help hiv now and there is one pill once per day. and then alzheimer's, i think this is the first step. 25% to 30% of the slowing of the disease. and i think over the next 10 years we can have further advancements through combination with powell another important genetic markers companies like cocina are working on vaccines as well to slow the disease. this is the first step of fighting it and the biotech community and we obviously look forward to further advancements for patients and caregivers who are going to be beneficiaries. >> so we understand what is happening. we have a clue with this. if you make some money doing this you have money to invest

to try and understand the disease better. >> that's right. i think that's an important step. there is controversy last year to have the jugs not approved or the fda help them. two companies to further invest to try to make small benefits because is 80% chance that they don't work and everybody loses money. obviously, the fda advances alzheimer's, gene therapies, there is an important part of the research investments which is great for patients obviously for investors with my hopes of these and i certainly would hope that they would do that differently. i don't want to bring politics into that. that forces a lot of legislative changes to educe prices. of course, we don't talk about the cost. i think this is good news.

i certainly think this will be great. >> yeah. this is why you need patent protection. you need incentives. you can spend tons of money trying to do something with their guarantee not being for sure. >> there is other companies they are developing. pfizer which half would have been a decade ago. and here we are with the two companies with biogen and randomized control with cognitive study. that drug is coming next year somewhere with cocina as well with their substantive versions. you pointed out, on ecology, i pointed out, hiv, we will continue to improve on this. that is why we are here today.

we are in u.s. developing these drugs on the system is working. >> i think that's approved today. >> the fda. thank you. good news across the board. it is going to be expensive. good to have you on. thanks. still to come this morning. looking at lower test scores we see with students everywhere after the pandemic. a big issue looking into that and ow to address it. ai is going to be part of the solution we think. more on that conversation when more on that conversation when squawk box comes right back.utin to connect data across clouds, then analyze all that data with watson. okay, but this needs to meet our... security standards? yup. compliance standards? mm-hmm. so they get the insights they need... yup. in real time... check.

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♪ sleepovers just aren't what they used to be. [ana house full of screens?”] basically no hiccups? you guys have no idea how good you've got it. how old are you? like, 80? back in my day, it was scary stories and flashlights. we don't get scared. oh, really? mom can see your search history. that's what i thought. introducing the next generation 10g network. only from xfinity. is it possible to protect my business from cyber threats? it is, with comcast business. helping every connected device stay protected. yours. your employees'. even... susan? hers, too. safe. secure. and powered by the next generation 10g network. with comcast business, advanced security isn't just possible. it's happening. get started wih fast spees

and advanced security for $49.99a month for 12 monts plus ask how to get up to a $750 prepaid card with qualifying internet. are not good performance has fallen significantly since the 2019-2020 school year when the pandemic hit the nation's education system the federal standardized test known as niep given last fall showed that 13-year-oldes scored 256 out of 500 in reading, 271 out of 500 in math that's down from average scores of 260 in reading and 280 in math two years ago and we are joined the academy founder and ceo. and sol, are you surprised by

the results? >> no and you gave the numbers right before the pandemic. those weren't great to begin with not only did they get worse in 2022, they got even less good in 2023 most people point out during the pandemic a lot of students missed school, the schooling they got was over video conference, people were just trying to do the basics and students lost a lot of ground. >> so what do we do? >> that's the big question i would say it's the same thing we should have been doing all along even before the pandemic the reason why a lot of students, especially in a subject like math struggle, in a tra dugsal math class, you get a pre-algebra, you get a 60, 70% on a test, too bad, we're going to keep going and build on that concept. what happens is typically in the

u.s., a majority of students, even the ones who graduate from high school and go to college, the colleges say you're not even ready to do algebra yet. the opportunity is to allow students the incentive to address those gaps if we were talking about 30 years ago, it would be hard for one teacher to address 30 students before the pandemic, the average classroom would have three grade levels in it, now they're talking five or six grade levels we think technology has a role to allow students to practice at their own pace after the pandemic, billions were spent on tutoring unfortunately what we've seen is that tutoring was a little business disjoint from what happens inside of the classroom. a lot of the students who needed it most weren't showing up for

the tutoring so we haven't seen gains from a lot of those resources being put behind tutoring the reason we're excited about regen regen regenerative a.i., we released our version and we're already starting to go to real schools and it's able to close that gap where it can provide that in-the-moment tutoring and while they are in class so you don't have to say, hey, come to something after school >> is it weird to say, okay, part of the problem with the pandemic is people were getting online learning and we can use online learning and a.i.-assisted tutoring as a way of fixing that >> on the surface it does seem

ironic blended or online learning does not mean that you are completely in isolation now, if you're in some rural place or in a place where you don't have access to a certain type of a class, then online and distance learning can be the same thing the pandemic would have been even worse if we did not have zoom or distance learning as imperfect as it might be as much help you can get from the teachers and the peers, that's always good some of the classrooms the teachers have been pointing out the a.i. was able to answer that math question, it doesn't give you the answer it acts as a socratic student. the a.i. can act like a teacher. so in our minds, you try to do the best of both worlds. >> you're using in this newark,

new jersey and indiana it's expensive, though how do you guys have the resources for it >> our mission as a nonprofit, the marginal cost of delivering a web page or web service is a fraction of the cost when somebody comes we could have used something like gtp5 turbo. an average tutor using gtp4, the costs are on the order of $10 per user per month we are at least trying to pass that on to the user because obviously that could break our bank if we had to do that for every user that's where we are right now.

this coming school year, we're looking at several school districts and even some states that are looking to do pilots of many tens of thousands of students because even a cost like that that could amount to $50 to $100 per student per year, it's a lot lower than in-person tutoring and if it can accelerate students, even before we have efficacy studies if people use conacademy, the average system is spending $2,000 to $3,000 a year. hopefully the cost will come down and we can make it more and more accessible. >> thank you for the hopeful message, it's good to see you. >> coming up, the june jobs report is out. in just over half an hour we'll bring you the data and instant analysis, as soon as it crosses. the futures ahead of the report

are in wait-and-see mode down 4 points on the dow nasdaq down. s&p basically flat "squawk box" will be right back.

good morning the market's waiting for the big

employment report that hits at 8:30 a.m. eastern time we've got our team assembled for instant reaction and analysis. investors getting a charge for rivian shares. and empty offices and crowded streets, what is this telling us about new york city's economy and future growth? the final hour of "squawk box" begins right good morning and welcome to "squawk box" here on cnbc. i'm joe kernen along with becky quick. andrew is off today.

♪ final countdown ♪ ♪ >> we can't play music anymore >> i'm going to sing and whistle for us >> i requested "friday i'm in love." we can't do that and we can't even do any jazzy sound. it was actually a sound bite no jazz, no nothing. u.s. equity futures are pretty plaid, the nasdaq off 23 the adp, will it be an actual harbinger? maybe. those seem like good, round numbers. >> easy to do the math >> not for kids in school apparently, which we just found out even that's too difficult. >> yeah. it's concerning. >> we're not going to make any engineers if we can't do simple math >> it was the gap between those who were getting better educations and --

>> and if you can't do algebra, you have to do remedial work just to do algebra, won't be taking any calculus. >> right >> and the fda approving an alzheimer's. to be eligible for medicare coverage, medicare patients diagnosed with mild impairment must be treated in a data collection system established by the government the treatment is made by a japanese pharma company. it slowed cognitive decline from early alzheimer's by 27% over 18 months that is something to get excited about. you can see the excitement of investors, too eisai up about 20% dom, we'll let you back.

>> my love for "squawk box" and my favorite business show between 6 and 9 a.m. eastern time becky, you know how much i love you. joe, i love you, too, on or off the golf course. doesn't matter we talked about tesla. i figured we'd kick things off with evs rivian shares, we're up around 4%, around a million shares of trading volume, riding a serv seven-day winning streak analysts have upped their target price from 30 bucks, it was 25 they cited positivity around hitting production targets and, by the way, for those interested in more on that price target hike head over to cnbc.com/pro where subscribers have full

access to that story we're watching earnings from last night's close levi strauss reported a slight beat on earnings but it slashed its full-year profit outlook due in part to a dropoff in whole sale revenues as the company shifts to direct-to-consumer channels rather than whole sale. and we'll end with eli lilly a lot of the biotech and pharma focused. it's got a market cap of 440 billion. for context, that tops the market cap of united health, and

johnson and johnson stands at $420 billion eli lilly again, this move higher just over the last few months here because of that obesity-related focus. e eli lilly getting a huge bump. >> we have not paid as much attention to some. pharma and biotech stocks. >> and it trend worthy just like in technology we talk about a.i., this whole focus on wegovy and even those they're not franchises for certain drug companies, there's a wave for certain drugs. >> thank you you know you are my favorite stock market watch are who is on with us between 8:03 and 8:06 in the morning. >> i'll take it, becky

>> except when somebody sits in for them, then i love them better >> that's fine >> let's talk markets now with gabriel santos, global market stratus at jpmorgan and just barely came back and decided to work, i would say. she had some personal things happening that i would not >> like a little small thing, a wedding. yeah, >> yeah, thanks for being here are you glad you're here >> lots happened while i was gone >> ignore the adp report you say it's crappy in terms of prediction but you still say things are really -- you look at other things and it's a resilient job market anyway. >> ignore it as a predictor of the jobs if you look at the mosaic of the jobs data you got yesterday, challenger layoffs coming down, the quits rate moving higher,

continuing claims staying very low, services, employment index ticking up, the whole mosaic does point a picture of a still pretty resilient job market. it is gradually slowing but very gradual. today we look at 260,000 job added, 0.3% month over month wage growth. so still too high for the feds, especially that month over month wage growth figure and expectations are high for a hike in july now. >> you thought the stock market could have taken it positively it's clear eventually things are going to slow and it's kind of good that the economy is hanging in there and that the jobs market is hanging in there, isn't it you can look at it either of two ways >> absolutely. it could be a good thing and we were in that sweet spot where we were taking the good data as a good thing

but then we had the fed meeting and now we're expecting further hikes by the fed so really i think the market is concerned about the possibility of a policy error now, that the data being too strong means too many hikes, overdoing it and an eventual slowdown. not this year. the odds have come down over the past three months but perhaps next year. >> you think the wages, though, will be the key component for the fed. 0.0% is not, what would be >> i think something closer to 3.5% i think month-over-month figures of 0.2, 0.3 is what they're looking for. over the past 12 months we've been seeing 0.3, 0.4 there has been a slowdown but it's still a bit too hot for their liking given the tie to core services and exflation.

a lot of it is about auto insurance but their calculation seems to be very focused on wages. >> not many people thought we'd be where we are in the s&p i saw an article on one guy that said 4700. do you think we tread water, go higher are valuations too high right now? >> it does seem to us that we've had quite a run in multiple expansion, right, 16%. that's been behind almost the entire run we've seen this year in the stock market. there's already quite a lot of enthusiasm about artificial intelligence, cost cutting at tex firms and a potential soft landing. you could get some disappointment ahead and you could see a pullback here we're thinking about the second quarter earning season. expectations have not come down as much as normal so we're in a setup where we could be actually disappointed by earnings and that could be a trigger for a

pullback but just making it clear we do think the bear market is over, we started a new bull market and we're talking about a more normal pullback, witch we could use to add exposure to quality companies both on the growth side and on the value side >> does jpmorgan asset management have a naples office in. >> no, but we have a rome and a milan one. >> you have a rome >> yeah, we do we do have others working there unfortunately. >> did you stop by >> not this time next time. >> "squawk box," the emulfy edition. >> better hours, better food >> much, much better food. gelato >> did you eat pizza there >> we did eat pizza. we had some pizza at our welcome party. had to we're near naples.

>> whenever naples have problems with the currency -- not the currency but when you worry about debt overhang, how can you screw this up? how can you screw up because they don't need to do anything right? all they have to do is say come and -- >> there are so many americans there, so many tourists. they're doing quite well actually >> why wouldn't they it's the greatest place. it doesn't matter that maybe the trains don't run on time or some of the other things. >> all good. it's sunny and the food's great. >> oh, and the marriage. that, too. that, too. >> all right we've got the jobs report coming up at 8:30 a.m. eastern time that is less than 19 minutes away and former fed chairman roger ferguson will join us with his reaction to the data

next, though, new york city commercial space struggles as the return-to-work push slows down and now new jersey with a congestion tax plan for commuters. that's not nhelping get people back in their seats. katherine wild joins us next listening more than talking, and a personalized plan ♪ to guide you through a changing world. ♪ - [soldier] take a look at this! to guide you through - they've left us a gift. - [soldier] i think we misjudged them. - i love horses. (birds chirping) - [soldier] we should open the gate. - let's see what charlotte thinks. - [narrator] at crowdstrike, we monitor trillions of cyber events to detect threats and prevent breaches before they happen to keep your business from becoming history. we stop cyberattacks.

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do you need mulch? what, we have a ton of mulch. several delivery companies are suing new york city to block a new law that set minimum wages for food delivery workers and the law requires that companies either pay workers around 50 cents for every minute they spend on a trip or pay them a minimum of $17.96 an hour for the time that they spend active on each app. both options exclude tips. the company would include door dash, uber eats and grub hub they say it is flawed because they are active on multiple apps and they say it would force them to raise consumer fees in new york city and limit the number

of workers that they employ. >> the war over new york city's new congestion taxes revving up. the plan could go into effect as soon as next april and is facing criticism over the garden city's tax on commuters katherine, i realize that there's not a lot you can say on this point i know we're leading with this but we'll talk about a lot of other things facing new york, too, but this is in the headlines right now and it is causing a lot of concern for commuters who are coming in from new jersey who feel like they are already taxed pretty heavily by the tolls that they pay at the gw bridge or tunnels to get into new york city now if they want to drive into mid town, they're going to pay a much heaviest fee. new jersey politicians have been saying the same thing, this is the mta looking to make up for a

b budget shortfall on the backs of new jersey commuters what do you have to say? >> new jersey should get over it we have over 80% of manhattan office workers, including those from new jersey use public transportation and will benefit from the tolls from congestion pricing. if somebody is driving into manhattan to new jersey, they are paying between $40 and 50 a day for the parking space. they can well afford the additional toll that will support our transit system >> as one of those commuters, thank you. look, i don't love being in new york i never wanted to be in new york to begin with. i'm here but okay, we'll get over that. maybe we'll move the show back to new jersey. if part of the problem is you can't get people back into offices, this seems like a crazy time to come up with this incentive. i did hear governor murphy talking about it the other day saying it would be one thing if we had moved to make sure we were doing additional commuting

issues to make sure that the tunnel was built up for the train lines to come through. we've dragged our feet on that so it's not the right time to do it >> well, i don't think that's correct. we just got word that the federal government is going to put almost $80 billion -- >> almost $80 billion but it's going to take years and years before it's finished and actually up and running. >> that's not the federal government's fault that took a long time to get the agreement on the plan, but we did get the financing now. we now have the local financing in place, the tunnel's moving forward. but that is really not the point. new jersey depends on our mass transit system and should be contributing >> new jersey does contribute. >> in terms of discounts, what they're asking for is for new york city basically to carry the burden for regional transportation >> that is not the case. new jersey pays heavily. and, by the way, all new jersey residents who work here are

taxed and paying new york city and state taxes, rather than paying those taxes to new jersey >> well, they do pay taxes to new jersey, too. i'm not going to defend our tax burden, it's high. >> i'm telling you new jersey commuters pay new york city a lot. they don't have a vote here but they play heavily. >> that's true but that's a tax policy issue, not a congestion issue. very few new jersey people drive their cars into the city if they can pay for parking, they can pay congestion fees >> let's talking about what's happening with commercial real estate there's not the same push to get people back to work. people who have been away for years probably have proven to their employers that they can work from home seems like at this point people think they can work from

anywhere >> i think you're going to see starting in september that there will be a strong, consistent office presence at least four days a week. we're now at 60% office presence on the average weekday we've seen transit ridership go up and that press is going to continue because what we found, businesses are just as profitable, they're just as productive but the professional development of employees has suffered through remote work so we're going to see, yes, some flexibility. everyone's saying you can forget friday in the office, but remote work is not going to replace the important functions that presence in the office, being part of a team, the mentoring that goes on, the relationships with clients and other staff members, it's not going to be replaced by people sitting at home >> so, in other words, no problems in new york city, everything's great >> the economy of new york city is great it's actually we lost very

little except in the tourism area, service industry during the lockdown, the pandemic otherwise our economy has been growing at 2 to 4% a year. we have a very strong tech sector we've seen for the first time last year more tech startups in new york city than in san francisco. so we're seeing a strong economy and we certainly intend that should continue. >> so no problems here nothing you -- >> as you mentioned earlier, commercial real estate is seeing an all-time high in vacancy in manhattan. the older commercial buildings is a problem our state legislature failed to create some zoning and tax incentives so we're concerned about a delay in the conversion of buildings or rebuilding parts of manhattan where the older commercial stock just isn't up

to modern standards, but where we have modern, new office buildings, upgraded buildings with amenities that employers are investing heavily in we're seeing, one, people are coming back to the office with more regularity and, two, they're commanding rents that are higher than we had prepandemic. so the commercial market, a big chunk of it, the older buildings are suffering but we had 20 years of nothing but commercial real estate in manhattan going up our economy today is becoming less manhattan centric and there's going to be a dip in those values for a while but have i total faith that the value of manhattan property ultimately is going to continue to rise. >> katherine, when are you going back in the office >> well, i'm on vacation this week but i'm joining you from home i work five days a week in the office since june of 2020 i've been five days a week in the

office >> we need you good and you're working on vacation all right. >> thank you, thkaerine. have fun enjoy. "squawk box" will be right back.

a couple minutes away now before the release of the june employment report. we have our team assembled to react to the data as soon as it's release "squawk box" is going to return in just a minute actually in about a couple minutes. but we have four left. run some more commercials. one high-pressure system that can do both. brew to your heart's desire with the l'or barista system. a masterpiece in taste.

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welcome back we're right around a minute away, a little bit over that, a minute and eight seconds away from the government's june employment report. let's welcome betsy stevenson, former labor department chief of economics, currently economics professor. and stephanie link, chief investment strategist and portfolio manager at high tower advisers, as well as a cnbc contributor and then just a couple of schmos, steve leaseman and rick santelli. you guys got anything i can say about you that would rate with these other people

i don't think so steve liesman, you like the dead >> we've been here a quarter of a century. >> and rick likes cars >> and ceaheeseburgers >> and i can't wait to talk to you. i don't know what you think, rick, but we're going to know soon enough whether adp is any good what are the numbers, please >> we're going to see if adp was on track or not and it was not 209,000 on the nonfarm payrolls for the month of june. 209,000. that is the lightest level and i have to go on the way back quite a ways that's the lightest low since 2020 when it was minus 268,000 if we look at manufacturing payrolls, they were up 7,000 the unemployment rate dropped from 3.7 and we all know that was the highest since february of '22 last month to 3.6

so it's moderated but it's definitely still above the 3.4 that we had in april and of course we understand that the unemployment rate is something that the fed is going to pay close attention to average hour live earnings up 0.4%, hotter than expected matches april. you have to go all the way back to july to see it up more, that was july of last year. and if you look at average hourly earnings year over year, they were up a whopping 4.4% this is the enough metric against inflation for many it's the wage component, up 4.4% it equals april. you have to go to february of this year to see it higher at 4.7. even though it was 5% in november of last year, it is still definitely above the last several months, which was 4.3, 4.4 and 4.3 as you see we're hovering at that zone. if we look at hours worked,

34.4, a tenth hotter than what we were looking for and what was in the rear view mirror. labor force participation rate, 62.6, it remains exactly on top of last month. 62.6, fourth month in a row. and finally the underemployment rate known as u6, 6.9% we have to go all the way back to august of last year to find a higher number at 7%. interest rates have dropped, dropped, dropped as a matter of fact, prior to the number we're hovering in a two-year around 5% now it's at 4.92 and if we look at the 10-year, it was hovering around 4.06 and now at 4%. we continue to monitor equity markets. and they did pop a little bit but they're kind of right back to where they were

we need to continue to monitor equities have a lot on their plate. just to summarize some things very, very quickly here, the 10-year gilt in the uk are up. our 10-year yesterday closed at an 8 1/2 month high. that 2 year note yield failed to close above its march high-yield close at 5.07% as a technician, if we fail to close above that after trading intra day through, especially on friday, a weekly close, it's going to start to look like a double top is that whohorribly bearish no, but it's certainly to pay attention. some believe we'll see

steepening driven by long-dated treasuries and it may get stickier if you look at 2s to 10s at minus 90, it is definitely the flattest in probably about four weeks, almost a month. joe and the gang, back to you. >> thanks, rick. we're going to bring in the rest of our panel liesman, at the top of the show i twisted myself into a prelts pretzel saying i wanted a crappy number and i wanted adp to be wrong. i said 160 but if you add the revisions in, it's even worse than 160 >> taking off tens of thousands from the prior month >> this is crazy throw away everything we thought we knew yesterday. >> i wouldn't throw everything away >> do your thing >> betsy is here, lavornia,

steve. i said can you justify your dovish comments of what the fed will be doing? it played right into your hand >> joe, when the fed added $400 billion in liquidity following the svb debacle, that was back door qe and that stabilized things then with the debt deal, the treasury general account having g gotten run down but the reverse repo facility offsetting that, it's improving sentiment, and monetary policy will work and slow things. these data suggests we're moving in the direction of weaker activity we're not there yet but we are going to weaken and the fed is going to regret as much tightening as we're doing but they're not there yet. >> betsy, you saw the dollar index, the 10 year and 2 years

acted like this is the most hottest labor market we've ever seen is it a new day? this is crazy. >> well, i don't think we've had the hottest labor market that we've ever seen, but i think that the key word there is had it's clear that the labor market is starting to slow. you look across all these industries, we're seeing industries that lost jobs that month. so we're seeing negative handle on some of them. job growth was 149,000 in the private sector so even weaker and here's a fun fact. 167,000 of the jobs added this month went to women. so women took most of the jobs that's a one-month fluke but actually it does tell us something. it tells us about where the jobs are coming from. they're coming from the kinds of industries that women tend to work in like health care and education services and government >> stephanie, am i wrong? do you feel whip-sawed after

yesterday? the averages haven't moved that much but compared to yesterday it's a totally different feeling all of a sudden. >> well, it is the headline is less but we know from other factors and data points that the job market still remains pretty strong. adp, fine. if it wasn't a gauge to the non-farm payroll numbers, it was double expectations. challenger job cuts fell 49% it's not near close to a recession, which would be 350 to 375. the jobs numbers, 1.6 job still available for one unemployed person and the employment numbers got back into expansion. so nothing really changes from this number today, especially given that wages, while they are coming down, to joe's point, we're not there yet. we're nowhere close where the fed wants it to be and i know the job numbers and the wage numbers and the

inflation numbers are backward looking, but this is the fed we have they're a backward looking fed so they are going to continue to tighten. is it one, is it two, is it three? the good news is we are in the eighth or ninth inning in terms of hyigher rates and tightening rate are going to stay high but i don't think they're going to cut any time soon. >> so rick, your whole treatise is new life. do you think we could stay or we could get zero >> here's something fascinating. there's no doubt the entire panel realizes this number was not too hot in any respect but yet if i do my quick math on fed fund futures, they haven't moved. they're basically around 88% chance of a quarter point increase in the july meeting, 29 to 30%, really hasn't moved for the september meeting despite this number. i think that the federal reserve most likely is going to go, joe.

so i probably am going to be wrong and i will seasnd steve hs cheeseburgers. but in nine months i think i'll have a bigger smile because i think the fed will have regretted the last quarter point cut. but to go from zero in a quarter to add another quarter to it at this point probably doesn't matter there's one other thing that i find really important here, joe, and that is if you consider that the technicals going on around the globe and we heard stephanie link, one. best traders, we all know stephanie has a resumé that's a mile long and she's correct. it's hard to discern looking at current data that we're recessionary bound but here health in's what i say. we're only one citizen, we're all stuck with that since covid. if you look at germany, thaiwan,

whether it's in europe, asia, they are slowing and that is not going to benefit the u.s i think the runway is much longer post-covid for normalization of labor and all the signals we monitor but i am still in the camp if i had a big position in equities, i'd stick with it. how, i think you need to keep the nose sniffing for any telltale signs of the global dynamics affecting the u.s. economy and more of a slowing process. >> stephanie, is it really a mile long? that means you've moved around a lot. i've got one thing on mine, it says "squawk box" for like 30 years or something may was what, 339? >> may had been -- >> we were so excited about that 339. what was it really >> hold on >> 3 o -- 306. >> one thing to question in this survey and i just want to get that number up here. it has leisure and hospitality

up just 21,000 i don't know if i believe that number >> i don't either, not with seasonal adjustments >> we don't want to play that game of a big seasonal adjustments because it cuts both ways sometimes when it's stronger seasonal adjustments take away but i think the leisure and hospitality business is doing a lot more higher than may be indicated in the survey. other sectors are kind of all over the place we did have a strong hiring in education health services, up 73,000, that was a good number look, i think the fed is going to welcome this number ultimately it shows what joe was talking about, which was this gradual -- >> even though wages are up higher than expected this is almost the opposite of what you were talking about yesterday, a whole lot of jobs with lower wage inflation, less jess with higher wage inflation. if that's the key that they're focused on -- >> they believe they need to see hiring decline let's step back one second before we make too much good of

this number, which is still more than double the additions by the population to the workforce, that you still have this very low unemployment rate. if you're going to get slack or easing in the labor market, you've got to reduce hiring this shows the past is weaker than it was and the current in this 209,000 number is weaker than we thought and we dodged a bullet in terms of it not being adp ultimately the strength could be a little bit stronger when it comes to leisure and hospitality. >> hey, steve, sep contract p percentages are dropping if they're doing my math right, they're probably approaching 20%. >> 23% on september, rick, and i have 42 down from say 48 or 47 on the november here

so the first hike still a lock around 90% and there's going to be a debate over whether or not that second one is needed and i don't think the fed will do it if it's not needed and it will do it if it is >> the last inflationary period we had was the early 80s and what's remarkable is if you look at the data in realtime, we printed nearly 400,000 jobs in july of '81, the exact same month that the unemployment rate bottled for the cycle, we were in recession in august so to stephanie's point about backward looking data, that's very important i did notice temp hiring was down 13,000. that's a sign labor demand is cooling. watch construction that's where you have this massive gap between activity and hiring the earnings numbers generally cover only a subset of the overall population the compensation data and

productivity, which are based off of tax filings showed a big down revision from about 4 and change to 3. i would focus on the broader measures of labor pay. >> you got to wrap it all up, betsy. what do we take away from all this >> realize that this is actually a great number this is a number that is something we can sustain we can't sustain that in 300, 000, 400,000, 500,000 jobs a month. it needs to slow if we're going to have a soft landing, this is what it looks like i don't think we should make too much of this number being bad but i do think that the fed train is rolling towards another rate hike, but i wouldn't put my money on a second one yet. >> really? okay >> rick, you never eat a burger if you're going to think about the future, right?

you eat the burger for now you're always going to regret the burger >> enjoy the burger. >> you have the burger because it's a good thing now. >> because of the carbon footprint. >> those cow farts and, everyone, thank you it's just a cycle, a horrible climate crisis cycle thank you one and all. coming up, the numbers are out but -- you want me to introduce you? >> is this you >> yeah, it was. >> please go >> coming up, the numbers are out. the markets are reacting how will it impact the fed and its next move? we'll get to that with former fed chair roger ferguson he'll join us right after the break. and check out the futures after that number was down, weaker than expected, the average

hourlyag a wes little hotter what does it mean? we'll ask roger. "squawk box" is coming right back you know doug, ever since switching to workday you've been a real rock star. rock star? what do you know about rock stars? billy idol? i mean where's the skin-tight leather? my shoes are leather. where's the unnecessary zippers? that thing! billy, rock star is just how doug feels when he uses workday. thanks, rory. i'll show you rock star! be a finance and hr rock star. workday. for a changing world. billy idol just stole your golf cart!

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welcome back to "squawk box. the june non-farm payrolls coming in at 209,000 that was below expectations, even though we got that very hot adp number just on wednesday the unemployment rate officially fell to 3.6% the futures now a little bit lower, dow by 72, s&p down by 8,

nasdaq down by 9 probably worth looking at treasuries, too. you did see the treasury yields come down precipitously, the 2 we're below 9.57 for more on the jobs data, we've got former fed area roger figufi ferguson roger, this number, did it surprise you after that very hot adp number we got? >> it surprised me just a little bit. i think the markets maybe made too much of the adp number it's shown to not always be a great indicator. it suggests that the labor market is cooling but marginally most important, the hourly average earning number is firming and that's where the fed has been primarily focused for me this is maybe a little

lighter but not a dramatic change in terms of outlook and expectations. >> the one place it was hotter of when it came to hour lly thee watching >> i agree completely on that. the reason they have been talking about the labor market being tight is because it feeds into wages, which they believe feeds into the service sector, inflation in particular, so i think you're right to point everyone to that number and that number, again, slightly higher, so i think this certainly says that the market expectation of a 25-basis-point move at the next meeting, i think, has been reinforced here. and i actually put slightly higher odds than i think the market is today on another 25-basis-point hiking before we get out of this year >> roger, the bull case, if you're looking at equities is that, okay, even if you're talking about another 50 basis

points, two more hikes from the fed, you're still getting to the end of rate hikes, and that could be potential good news is there any reason you see to argue with that? >> i think certainly it could be potential good news. if i were looking at the equity markets, the real question would be picking and choosing. there are some sectors that are going to slow more than others as interest rates continue to rise and importantly stay higher than maybe the markets currently expect i can understand the bull case saying the fed's almost done but recognize still how much has already been done in terms of interest rate hikes and we're seeing, you know, some slowing versus some forward momentum the market, as you know, has been very focused on the very good news in the tech sector and perhaps downplaying some of the weakness in some of the other sectors. >> let's play out what you think odds are for a recession at this point, because for a while, you had been more concerned that a recession was more likely than had been before. do you still think that's the case, and is there a potential

for a soft landing when you continue to see how strong the consumer's been and how strong the job market's been? >> certainly, we should welcome the strength in the consumer spending and job market and job creation those, i think, do increase the odds of a soft landing what i have said, and i still believe, is recession, if there is one, will be short and shallow, and at the end of the day, the distinction that we're going to draw between a short and shallow recession and maybe some sort of softish landing is going to be marginal, so i think overall, my view hasn't really changed. whether it's called a recession, others will decide that, but i think we have some more slowing left because, as the fed said, and others know, the amount of tightening in the system, still more to come, and i think that does portend for some sort of softish behavior here right on the edge of recession, maybe a short, shallow one, maybe a soft landing. >> what's the most important number you look for next >> i think i still continue to

look at three things, the j.o.l.t.s. numbers, to see if we're in the 1.6, 1.5 openings per unemployed individual. obviously, continuing to keep an eye on wage pressures. very, very important so, i think it's all about the labor market right now, becky. >> roger, thank you. great to see you >> thanks. coming up next, what to wl t oni bl hepengel onalstreet following the jobs report. "squawk box" will be right back. café quality espresso. one high-pressure system that can do both. brew to your heart's desire with the l'or barista system. a masterpiece in taste. your record label is taking off. but so is your sound engineer. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire ♪ opportunity is using data to create a competitive advantage. ♪

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the jobs report showing a gain of 209,000 nonfarm payrolls last month the futures right now are indicated down about 20. didn't see lot of action there, but did see quite a bit in the yield curve. so, bitcoin, initially, which sold off yesterday, come back a little bit saw gold move up, i don't know, kind of canceled out some of what we saw yesterday but not everything joining us now to talk about the possible market impact, president and chief investment officer of hennion & walsh asset management one more do we go in september too at this point, kevin? or more data needed? >> joe, i still hold to my mantra of hike in may and go away i think today's job report

somewhat negates yesterday's blowout jobs report. we have to recognize that the unemployment rate has risen at 3.6%, and by the fed's own estimates, should raise further to 4.1% by the end of the year why do they need to raise interest rates anymore that's only going to put further stress on the consumer and potentially lead us into a recessionary period, which i believe the fed is trying to avoid. >> do you think now that, i mean, is it possible that the fed could orchestrate a soft landing, kevin could they win could they do it could they do this exactly right? >> the way i see it right now, joe, there's four remaining fomc meetings this year they meet in july. i think they continue their pause in july. they don't have a meeting in august if, in fact, they raise interest rates during those remaining three meetings of the year, well, then, i think they could actually eradicate the chanceo a soft landing however, if they make this pause

into a permanent halt to this rate hike cycle, i think they may very well be able to navigate a relatively soft landing thanks, in part, to the continued strength of the consumer and spending. however, on the flip side to that, joe, if they continue to raise interest rates, that's only going to make the cost of servicing the outstanding credit card debt, which is now at record rates in our country, even more severe >> well, stock market participants yesterday said, oh no, strong jobs market, fed's going to hike. today, it's like, oh no, not very strong jobs market. we might be seeing a slowdown. it almost looks like they didn't like either, but the market has had a nice run does it continue >> i think there's limited upside from here, especially when you consider if you pull out those magnificent seven stocks, joe, the first half of the year for the s&p 500 would have been up less than 4%. still good first half but not a record first half by any level we need that breadth to continue

to expand, and in order for that rally to continue, i think we need more certainty from the fed that they're at the end of this rate hike cycle and also know that we're going to be able to navigate a relatively soft landing. we're going to remain data dependent from here throughout the remainder of the summer. if inflation continues to moderate, if earnings aren't as bad as some are fearing, forecasting a decline with 6.8% for the second quarter, i don't believe it's going to be that dramatic if it's not, perhaps we do get a soft landing and better days are ahead for investors, joe >> real quickly, do we want to get back on the fed gravy train with free money or do we just want them out of the way what do you think would really help >> we want them out of the way well said. we want them out of the way for the balance of this year, and i believe by this point in time next year, we'll be talking about cutting rates, not raising rates or halting >> well, that doesn't say great things about the economy, kevin,

but -- >> it does not >> all right good to have you on, and whatever we think, it's still friday thanks, kevin. liesman's got cheeseburgers on the way. >> yeah, saw what happened jobs report came out >> things reversed >> much stronger >> now rates are back where they were nothing's changed whic it's crazy >> have a great weekend. we'll see you monday "squawk on the street" begins right now. ♪ good friday morning, welcome to "squawk on the street," i'm carl quintanilla with leslie picker, mike santoli at the new york stock exchange. jim and david have the morning off. june jobs is a miss. first one in over a year, and that's with some negative revisions. two-year yields back below 5% but stocks are still on pace for a losing week. our road map begins with that slowing job dwgrowth, the fewest jobs added in june since december of 2020