wednesday, really. big cpi number on wednesday. for now, we've got mixed dow is up, s&p and nasdaq are both down. let's look at the yield curve, because it really did get quite a scare on thursday. moderated a little the ten-year aboves 4, the two-year below 5%. you're not here tomorrow parting is such sweet sorrow join us tomorrow "squawk on the street" is next ♪ good monday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber at post nine of the new york stock exchange, setting the table for a big week, cpi, bank erarnings and more strategist commentary ten-year, still 4.08%. our road map is going to begin with the big week ahead for investors. key inflation data on deck, lot of fed speak and of course the banks kicking off earnings

season >> citi is downgrading u.s. stocks, saying performance may go on pause after a solid first half but it is upgrading one other major global market. and that war of words between elon musk and mark zuckerberg, it just keeps heating up as threads, that new offering from meta, surges past a major milestone. let's begin with the markets on this new week of trading. jim, you have been fairly circumspect. >> yeah, we have this cpi number on wednesday i did a piece for investment club which talked about, we're not going to get what jay powell wants. i think there's a big mistake. i think that we keep thinking that he will be happy with, it's going in the right direction that's what we keep hearing. and i don't think he wants that. i think he wants it to be better than it was, and he stuck -- remember, housing used to be in the cpi, took it out in 1983, but housing's terrible and i use the story about the -- my favorite -- >> people may get confused when

you say housing is terrible. within five minutes from now, you're going to talk about housing stocks being great >> you're absolutely right >> explain what you're saying. >> i apologize home prices have gone up 40% since 2019 but home prices are not in the cpi, but i honestly think that we may look at the cpi and say, maybe we're out of the woods, but i think that jay powell is saying, hey, listen, these have to come down we need more homes, and yet the housing companies are doing so well because for the first time, they're not building homes unless they have buyers. so, we've got to get it lower. we don't want to get it going in the right direction, which is why we keep hearing, and i fear we might hear in jackson hole, that we're fwnot done it's just not working. >> consensus for cpi is 3.1% last month, it was 4%. last june, it was 9% 9 versus 3, is that good enough? is there a good enough print >> if you strip out food and energy, which i don't know if he does or not, because i know that energy's set worldwide, but food

isn't, you're back to 5%, and i think that jay powell is saying, look, we need it to be negative. we don't want it to be 3% or 2%. we got to start rolling back, and without more people in the workforce, carl, i just don't know how he does it. and i just look at it and i just say, we're just stuck with a losing hand when it comes to short rates. a lot of stuff today about autos, by the way, which are controlled by short rates. but there's a lot that does well in any rate, and we come back to tesla and amazon we come back to netflix. we come back to alphabet these were all positive pieces today. meta david, meta -- i mean, i know that there's a dialogue between musk and zuckerberg, but i don't think it's a war of words. i think it's a war of numbers. >> well, we're going to actually spend a little bit of time talking about both the war of numbers and the war of words and what it means for meta

but is it your expectation it would work, then, in the first half of the year this is our first chance to be together since the first half -- second half of this year began >> i missed everyone >> missed you. is it, worked in the first half, it's going to work in the second half >> the good news is we're about to have earnings, and all the analyst reports are, it's stretched already. so, when we have that set-up, if someone really does a good number, it will surprise people, but there's a lot of industrials where there's just very tepid research out today, but where there's not tepid research is, let's say, amazon. now, jon fortt had an excellent interview with andy jassy, and the subtext is, what's jassy doing on if it's not going to get better with amazon web services but no one 's saying the time i right to buy gm, but i think gm might be cheap >> why >> because i think the wrong part of the company is doing well international combustion engine. >> we got some target increases after the sales numbers last

week and now these reports about supply of double evs it's the i.c.e. cars that are hard to get. >> the mach-e from ford did not do as well as we thought, but the traditional f-150, just try to get one, david. you'd you'have to go to a deale ask a truck person, and then you say, 150 and by the way, david, never say 350. you say, super duty. those who say 350 are novices and it is dreadful >> i'll keep that in mind when i go truck shopping. >> you're right about the analyst commentary, though, today. citi, we cut u.s. to neutral >> what did you read >> stifel, going to flatline bernstein, struggle to recommend tech in the second half. i guess kostin is the best thing we got going today, which is the bar is so low on earnings. >> i'm with kostin, because i've

got a stack of earnings right here other than netflix and amazon and tesla, these are all tepid >> yeah. >> i mean, they're all like this cvs, lower by td cowan, $111 to $109 >> there's your buddy, tony. >> he's not my buddy, to be honest he downgraded apple at -- it was at $80 and he said the best times have been had. now, david, i know stock prices mean nothing in this business. what matters is the narrative, and maybe you have to just overlook the fact that trillions were made, and you have to focus on the fact that the best times were in the past >> true. >> right >> a guy you used to be a little bit more fond of was mike wilson but he's tripling down -- quadrupling down at this point back to your point on earnings as we sort of head into earnings

season, "the next leg will be about deteriorating pricing and topline revenue disappointment." >> i'm going to send him a gift certificate to cava, because it's just very clear that cava's numbers are too low. what with it being a new restaurant chain >> we got a bunch of initiations today. jpm overweight, all in the mid-40s on targets >> i think people want more deals. i'll tell you where i'm in a quandary i want to take goldman-sachs for a second goldman-sachs spends a fortune moving apple, right, they got the -- they bought this green sky and they're making a big push with marcus now, marcus doesn't really, apparently, work overseas. they got rid of green sky one year later they're talking about apple and how great the relationship is. does the new goldman worth a higher multiple?

i mention this because you know what's around the corner earnings and other than blackrock, i don't see a lot i want to own. >> in financial services >> yes >> really? >> yes >> but what triggered this thought on your part was the opening of the ipo market. i know the connection you were making you didn't make it, but so -- >> karnak here >> that's me >> is goldman-sachs cheap here because if, in fact, the ipo market is opening, if you start to see more m&a transactions -- by the way, it hasn't been the worst year for m&a it just hasn't been as robust year as we had a couple years back but maybe the stock's cheap. >> exactly that's what i'm thinking i'm thinking if you go back to the old goldman, where they used to make a lot of money, and we didn't care about buy now, whatever, you know, apple turned out to be -- i heard various things about apple, that it would cost$2 billion to get that network up online to $4 billion that's from competitive banks. now it's turnkey, and maybe express buys it.

but if you get an uptick in m&a and an uptick -- by the way, there are more deals coming. maybe the new/old goldman at $317 is a buy. it could be. >> they will continue to want to focus you on the alternative asset manager they have inside goldman-sachs. >> they do have to take a huge hit. >> as those fees continue to rise, sort of exit velocity. >> big hit on what they have in real estate. >> right that came up in the interview that david solomon did with sara a month or so ago. >> yeah. >> but also with me. >> and with you, ahead of sara >> sorry, i apologize. >> first you, then sara. >> i mean, the blockbuster will be when i sit down with him, though >> oh, no, i'm not even -- that's absolutely true this is after the iger sitdown about why the theme parks aren't doing well how did you do that? >> there's no iger sitdown >> oh, i'm sorry >> we're going to get to some of the data on disney parks attendance >> it's interesting that there's nothing good to say about

disney, almost to the point where it can't be that bad >> it's got to be a challenging quarter. i mean, they basically closed the quarter, all these companies, with the end of june. >> and then the hulu -- >> it's not just challenging there was a story today in "the journal" about the parks not being as active. wait times down substantially. but i would argue across the board, for media companies, you continue to see the acceleration of cord-cutting, meaning, there are simply fewer people -- thank you all for watching right now, but there are fewer people out there who have cable to watch, and you need to be available digitally. >> are you appealing to people who have already cut the cord? they're not listening to us. >> i'm thanking our current viewers for not cutting the cord and then the advertising market is not exactly the greatest either, so it's a challenging time for these companies, taking netflix out, because of course

netflix is -- >> amazon, meta, it's just on fire it's the place to advertise, to reach people, younger people, middle-aged people we're very good for sunrise senior living. we're killing it we're killing it in sunrise. >> we are best-sellers >> nobody has that market like we do. we've got the demorooney mcfatty. >> i don't even know >> it's a thing he used to say that was, whatever, i just don't think -- when i saw the downgrade at fox, and i said, honestly, i mean, fox? is that what -- dish there's a cut, david >> fox is sports and news, and news hasn't been going that well for them, not to mention they paid almost $800 million to dominion >> i want to congratulate zaslav for a beautiful grandchild and the fact that max may be crushing it. >> he should have named his

grandchild max >> max he is so smart >> that could go -- >> could you imagine if i had a grandchild i'd have toname it peacock >> you'd have to name it nvidia. >> that would be a winner. >> you've come pretty close with the pets we mentioned a bunch of calls in there. wells does cut fox to underweight. they look at viewership pressure at fox news, percentage of primetime cable news audience was 51% in january, now 38%. >> it's incredible we have to go to -- i remember when i was at goldman and there was this company called smith corona marsham, but it turned out it had a chemical division david, is there like a chemical division within fox? >> no, there isn't >> that makes iron filings or something? >> there's some questions in terms of the decision-making that's happened clearly. why didn't they settle it would have cost them

$50 million bucks? >> how about unscripted at paramount? >> how about it? >> what's paramount worth? >> those are all good questions you're asking. >> on the week where "mission: impossible" premiered. >> premiers tonight. >> isn't that something? >> you going to go >> no, i have dinner with a senior executive it's such a big dinner that i can't even -- >> i know who you're meeting today. >> stop it >> it's exciting still to come this morning, we'll get to some of the autos jim mentioned there's a lot of news on that as we get data from used cars from manheim later this morning we'll get to e.l. and disney, schwab, ulta, cava take a look at the premarket on this monday.

let's get the latest on twitter versus threads as mark zuckerberg and elon musk exchange jabs on their respective platforms over the weekend, musk tweeting that threads is instagram minus pics, which makes no sense, while zuckerberg replied to a post implying that twitter is censoring threads from its feed. >> i think it's fun. trying to remove a tweet that i put where i misspelled lightning because i'm a clown. >> it's fun until somebody's face gets bashed in. >> that's like what my mom used to say

>> that's apparently what they want to do to each other, which only raises the chances that they follow through on this absurd plan to meet each other in a cage fight match at the coliseum in rome >> two enter, one leaves i think people are spending a lot of time trying to figure out, do you want that kinder, gentler interchange on threads, or do you want combat but have more viewers on twitter? but it's combat versus kindness. i think kindness is winning. >> well, a hundred million >> that's incredible >> that's faster than chatgpt got to that number >> that's interesting that you say that >> now, you know, if you have instagram, it's very easy, but is it potentially a revenue producer for meta? twitter's no longer a public company. we still spend a lot of time on it is it really a threat to twitter? >> i think it is, but i think that it's easily additive, but it's like no one says it's more than $2 billion in advertising for a company like the size of meta, it won't matter, but for a

company the size of twitter, it might matter >> you're saying twitter punches above its wait in terms of ad revenue? >> if zuckerberg wanted to wipe it out, he could >> this would seem to be an attempt to do that musk certainly seems to be playing close attention. >> musk puts in his -- by the way, his truck i told you to get an 150 i'm doubling down after looking at that monstrosity. >> you don't like the cybertruck >> i looks like a german -- well, i don't want to go into world war ii, but it looks like a tank used by the other side. >> you're a total mouthpiece for farley >> admittedly. and farley did say it was -- he said it was a lamborghini. i think that was wrong i think it was more like a panther tank >> wow all right. >> the other side's panther, not the current panther, which is, to me, kind of interesting >> what i continue to wonder when it comes to musk and

zuckerberg and this idea of having the cage fight, when and if anybody on their boards of directors says, you got to stop, this is not a good idea. by the way, that said, i'll be there. i mean, if they're going to do it, i'm going. >> i have two million on twitter, a bunch of -- that are on threads, but we put up a thing that said, what's the best thing you've learned on threads? we're just getting this fantastic stuff that would be good for a show that we could do if i put that for twitter, it would be the best thing i learned is that jim cramer is one of the worst people ever, and putin may be nicer remember, i'm -- i rival putin in terms of worst -- >> you're not moving you just tweeted you didn't thread. >> i did tweet i tweeted because i wanted to attack musk on that ridiculous vehicle that he had, which, again, i think looks a little bit like something that fred

fl flintstone might have built. >> you just want a cage fight with elon musk >> i say, bam-bam. if you want to go childish, bam adebayo. >> bam-bam >> go for the legs, jim. >> you have got my direct. i'll put the garden, which is my most viewed thing, on threads. people love it and i will talk about interesting things about stocks on twitter, because it's instant. i won't read the responses, because the responses would make me want to, you know, crawl into a shell and build a clubhouse deep in the realm of my pennsylvania house where you would never find me, but it's foitter. >> and mosaria talked about this, they're culture, sports >> yes, yes. i mean, david, you know, my three tomato rows, crushing it

>> got it. >> crushing it and i did a lot of romas and cherries because they make the best salsa >> nice. >> he's probably never -- he's probably -- today? is it threads? no >> not yet >> i'm a late adopter. as you guys know >> because this is 60 count. this is 200 count. i know threads there's more counts in this than -- in five of your outfits. >> i haven't actually joined instagram yet, so i guess i have to do that first and by the way, facebook, which i also am not on >> one of the great things that happened is that you can't smoke indoors, so i don't have to worry about the fire retardant suit >> again with the fire retardant? >> stop, drop, and roll. that's all we need >> this is super 130 >> 130 that's like hot-rolled steel geez oh my god, 130 >> so mean >> how do you do that? doesn't it just itch like all getout >> the shaming is real >> at least it fits me

>> i lost weight, you son -- >> we'll get cramer's "mad dash," countdown to the opening bell on this monday. one more look at the premarket ♪♪ at morgan stanley, old school hard work meets bold new thinking. ♪♪ at 87 years old, we still see the world with the wonder of new eyes, helping you discover untapped possibilities and relentlessly working with you old school grit. new world ideas. morgan stanley.

this is ge aerospace, advancing flight for future generations. ♪ welcome to a new era of flight. (bobby) my store and my design business?

we're exploding. ♪ but my old internet, was not letting me run the show. so, we switched to verizon business internet. they have business grade internet, nationwide. (vo) make the switch. it's your business. it's your verizon. futures relatively mixed here this morning to start what will be a busy and full week opening bell coming up in about five and a half minutes, and don't forget, you can catch us any time, anywhere, just listen to and follow the "squawk on the street: opening bell" podcast. - today, 9 million kids in america are considered food insecure, meaning there may not be a lot of dinner at the dinner table. help change a kid's life. support your local food bank.

the more you know.

>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. all right, we got two and a half minutes before we get started with trading for the week here. let's get to a "mad dash."

johnson & johnson. >> wells fargo has this as a signature pick everybody has them, evidence lab, everybody's got u.s. one and it's really good and it says there's potential upside and guidance i just want to warn people that there are closing arguments today on a case involving a 24-year-old who is believed -- believed to be, unfortunately, a fatal situation against a particular kind of mesothelioma, heart, not lung, which has typically not been caused by, if there is indeed asbestos in talc, which there's been a doubt. i will tell people, and i'm going to tell people at our morning meeting, you got to be very careful this thing is controlled by talc, and if they lose this case, it could hurt them in the overall ability to accrue all bankruptcy cases under bankruptcy rubric, which

is that entity they want to create, give $8.9 billion to, so you may like change. i suggest that you wait to see how they do on this lawsuit. closing arguments today. most likely a verdict tomorrow >> i'm glad you pointed to it. it's been a long-running case, allegations that j&j has completely denied and is doing so in court, namely that talc contained asbestos and caused mesothelioma >> when you read these reports, they tend to de-emphasize the legal issues, in part because they're not lawyers. >> they can't measure them very difficult to measure. >> i went to a couple lawyers on this, including j&j, i felt very comfortable with j&j, and i talked to another 24-year-old w the facts may not even matter to the jury, because it's a left-wing jury in alameda, california so, all i'm saying is, beware. this may not be what you want to base any investment decision on. >> that's a good one

there's actually a pretty good diet of sell-side commentary on individual names we'll get to some more in a minute let's get the opening bell here. at the big board, it's core laboratories, celebrating its 25th listing anniversary at the nasdaq, it is the times square alliance, celebrating three summer performances in new york city. >> core labs is a very important company. halliburton was the biggest gainer on friday there's a belief there hasn't been enough growth in american permian. the way to get growth is to drill more or find out that your reservoirs have more in them and that's been core labs. >> i'm glad you brought up oil services, because a lot of them are bumping up on 52-week highs, whereas the crude itself is not far from 52-week lows. >> i know, but there's a sense that, for the longest time, they used to drill, drill, drill, and then they switched to a, let's make money, go for dividend, then oil prices collapsed, year

over year, and so now people feel they have to start showing growth and the only way to show growth is to bring halliburton in it was much more expensive to drill not that long pack pricing has come down. the idea that you can drill for less expense because there's no longer the level of inflation, and you can show growth appeals to wall street halliburton being up so much on friday >> yeah. and overall, your view of oil prices how does that fit in with your macroeconomic views? >> look, my views don't matter as much as what people feel about china, and people are just endlessly negative about china and the janet yellen interviews and meetings did not make me feel any better about what's happened with a country with no growth >> we should spend a little time on that, because obviously, secretary yellen was there, series of meetings at least communication that seems to be the goal, not

necessarily making great progress, but at least having some communication you had blinken there. she's there. i believe john kerrky is going a well >> there's talk of raimondo. >> she pushed the chinese on climate a bit as well. >> remember, it's raimondo she's the one who's pushing for giving them less of the highest tech because she wants it made here now, of course, the highest tech is made by -- >> tsmc? nvidia >> nvidia. >> and then the chips are manufactured by tsmc, which, by the way, reported numbers. >> the chinese very much want the highest from nvidia, and nvidia, there's a lot of good commentary out of late, but -- including, geez, goldman saying it's a big deal. >> reiterates a buy today. >> whoa. >> yellen did try to argue, look, these controls that we have going on are targeted, they're not going to affect your overall economy in a material way, which when you're doing 5%

drops in producer prices, like we got last night, that's the biggest drop in, you know, wholesale pricing since '15. >> when are people going to realize that the on-shoring is doing better than the off-shoring. i urge people to go to walmart go no further than checking the labels of where things come from my daughter and i were marveling that it's sri lanka and jordan and pakistan, not china. it's countries -- when i talk to walmart about it, they're really not that -- they're more anxious to talk about what's made in america, which are american flags. but i would say that if i were a chinese trade representative, and i went to the largest retailer in the world, i would say, uh-oh we're not making things that are selling at walmart they're making them at these other countries that are early developed world and they're helping these countries immeasurably, including, i

think, the jordanian shirts fit me very well >> another country you've talked about very often in the past that see mexico. right? >> oh, my. mexico's doing so well and by the way, we have a possibility of a strike in uaw the idea of you bringing up mexico is counter to the whole notion of what's supposed to happen with the -- with the unions and with the three different giant infrastructure projects we have in this country. but mexico is ready. and by the way, the biggest winner will be that ksu canadian-pacific merger that we don't talk enough about, because wow, that's a powerhouse that's how you get the stuff up here >> right and listen, we also continue to try to focus on the chinese economy. it's the world's second largest economy. obviously, great importance. and very difficult to measure just how bad things are. >> yes >> you hear anecdotes, but it's -- and there's a lack of information that even more so

than there had been. >> do you have read nick's stuff? >> sometimes >> i went to college with nick he's just brilliant. and one of the things he says is that if you want to measure a regime, what's the growth rate what's the birthrate you see what's going on with china versus india the birthrate is on the decline. the death rate is higher you're having a country where it seems like that people have very little hope. that's what it tends to mean and i say it's worth watching, because this is a substantive thing that the chinese must address. >> they're on the cusp of outright deflation as june's cpi was flat over there. lot of price cuts in the ev business gm cutting the lyric over there. volkswagen >> ford, kind of giving up >> and by the way, we haven't mentioned last week's rivian, 40% increase fisker's convert offer today >> i just think that people want -- i know that there's a belief that what matters,

including bill ford saying this on tv, is that they're coming, the chinese are coming i look at it a little differently. i just think that the chinese are in a crisis mode, whether it be what to do with the capitalists or what they do with -- what to do with pollution or what to do with the younger people who are unemployed >> i think, you know, that, youth unemployment number is the one that i think is most startling to a certain extent and has got to be very concerning, as well, to the regime when you're getting up in the 20% range for younger people looking for work >> let me posit something, david. it's a little existential. david, are they we are they us in the 1982, '83 an are we them? we have better growth. we have great sicience, and we have some birthrate and much better youth unemployment. i'm just saying, do they sit there and say, what the heck

happened i thought we passed them and we can't even get to 200? we can't get the nvidia 200? >> can't get the nvidia 200? well, they're still going to figure out a way that's my guess. >> they are? where there's a lot of people, there's a way? uh-uh. you can't just duplicate the h-200. >> no, even when you steal all the plans, probably. >> they stole micron's plans they haven't been able to get nvidia >> it's interesting. projections of the chinese economy surpassing our own, perhaps, have now been pushed out a bit. >> yes yes. and we used to have all these ipos that were chinese where they would basically make fools of us. there are fewer of those now between the spacs and the chinese offerings, it was really quite a treat that they presented to us. >> you were not a fan of those, even when they were in full force. >> baskin was the spacs and robbins was the chinese. >> speaking of cars, you want to get to phil lebeau we got manheim in, down two.

>> carl, that is the largest decline month over month since april of 2020 when i think it was down something like 7.3% so, here are what we see from the june used car or used vehicle prices from katz automotive and manheim, the used vehicle index. down 10.3% versus june of last year the retail inventory, and this is significant, it came down four days. it's now down to 45-day supply, so if you take a look at carmax and carvana on the used side and then also on the new side, auto nation and group one, keep in mind that auto nation and group one, those two stocks are close to all-time highs. they are almost there. i mean, just down very, very small percentage carmax, we saw the run-up late last month and carvana has had a heck of a month as it continues to rebound from where they were earlier this year. bottom line is this, guys. we are seeing the moderation in used vehicle price, but keep in

mind, this is less a reflection on the consumer and more a reflection on the fact that there's greater supply of new vehicles in the market, and because of that, you see less demand, if you will, on the used side, and that's why prices are moderating as they are >> one of the things that is difficult for a lot of people to understand, including me, is that a fella by the name of bill nash, who runs carmax, and i think he does a very good job, he might explain that where they do really well is when used comes down and new stays pretty much the same, and i know that auto nation has made a lot of money. carmax is good is that the way it works >> definitely. and the other thing to keep in mind with carmax, and the heck of a quarter they reported is that they have done a great job of prioritizing vehicles that sell under $20,000 that is a market that is red-hot

if you can offer people a car or a truck or a small suv, whatever it is, if you can get them into there under $20,000, there's a lot of demand there, and that's what carmax has excelled at over the last six months. >> terrific. terrific, david. >> phil, thank you phil lebeau with those latest numbers for us guys, did want to get a follow-up to a story we did follow somewhat closely here a few weeks back, namely icahn enterprises, hindenburg, and that report, remember, that came out was back in may 2, in which hindenburg, a well known research firm that takes aim from the short side of many companies, nikola being one that people may recall, and really questioning a number of the marks that iep had in terms of some of the businesses that that holding company, essentially, in some ways, has marked them at. it had the effect of significantly decreasing the price of icahn enterprises and

then having people question whether, in fact, loans that were in place by mr. icahn would have to be shored up by either the sale of stock, potentially, and/or more equity being pledged against them and that kind of had a negative impact bill ackman got in on it as well, questioning certain things, kind of rekindling the feud between those two that started on our air sometime back as many of our long-time members may remember this morning, we got an ak from icahn enterprises. there's a new loan agreement, essentially, with the banks that mr. icahn has entered into extends the maturity of previous loans, charges interest at a variable rate, will provide for the prepayment or the payment, i should say, of $500 million on or before the 1st of september of this year, and then principal

payments as well of $87.5 million, beginning september '24, ending at $2.5 million at the end of the term the loan agreement as well permits prepayments. here's some of the more important parts. this is what icahn had to do he had to put up 320 million depository units of iep. and another $2 billion of interest owned by mr. icahn, essentially his hedge fund pretty tough pretty tough you know, my understanding was, this has been a kind of going on for a while, and you can see the stock had crept up a bit of late on expectations that mr. icahn would be successful in this restructuring, essentially, of his loan obligations, but jim, they got a lot, the banks, and my understanding is he approached private equity, seeing what was available there as you probably would expect him

to in terms of a potential new capital or deal of some kind but ended up just doing a renegotiation with his banks that, again, when you look at what he has to back them by and what he's agreed to, clearly significant. nonetheless, being, as you would expect, applauded by investors the dividend stays in place. >> okay, that was what i wanted to ask you still get that big dividend. >> the dividend yield is 24% it stays in place. he owns 85% of the shares. he pays himself in stock, pays the 15% in cash and that stays in place they have changed the mark on some of the assets the u.s. attorney got involved briefly, basically kind of saying that they were going to investigate, unclear what exactly they were working on, but this puts him in a better place without a doubt. he had to pay a lot to do it, but better place >> and we have to figure out the different earnings power, but the principal worry was everything was overstated. well, it's not overstated anymore. >> and that he would continue to have to sell stock

>> yes >> right in a significant way >> i think a lot of people felt very, very strongly that this may be the chance to buy it. i know a lot of people called in, carl, for my lightning round to say, is this the opportunity? i would now go to say, from the best of my knowledge, it's no longer overvalued in terms of its assets >> so, yeah, don't worry about margin calls in his future any lo longer >> right >> jim, you mentioned the banks we're going to get on friday upgrade at schwab over at jp there's been a concern for a lot of the regionals >> i think schwab is overdone on the downside because their bank wasn't that big, but against that wound up being blackrock, which i think is going to be a big share take, especially with the 5% on the short rate and i think it's going to do a admin lot of outsource, do fantastically well that's the one to be in.

>> the other sort of spin around the banks is going to be largest loss collectively since the beginning of covid, and then maybe more provisions on top of that some were talking in the $7 billion range >> a lot of people keep thinking that if the small, medium-size businesses are hurt by this, i know that paychex said they would be, i come back and say, take a look at some of the banks that did well in the stress test my travel trust owns wells fargo. i think charlie schwab crushed it jpmorgan is doing very well. the big are getting bigger here, and the small are struggling, and i think that the fees, we still don't know what they're going to be. i just think that the smalls have become very difficult to invest in with the exception of first horizon, which may have been because of the jilted, still, to me, strange, david, deal with td waterhouse, involving -- >> td bank, yeah >> i mean, what exactly was -- did you ever get to the bottom of that. >> there were some reports that talked about it was on the td side, the regulators were looking into certain things. but it was never made clear.

>> no. >> i think -- it was never even made clear to first horizon. >> i spoke to first horizon about it and they were just in the dark about what happened >> yeah. >> kind of >> but it didn't seem -- it was not related to any potential deterioration in their business. td may be very happy, though, that they didn't have to buy the bank at the price they agreed to clearly, it was well above what it would have been at a different time >> in the meantime, other than broadcom up, and meta, a lot of the big cap tech stocks are doing poorly today >> i was going to say, basically f.a.n.g. in the red this morning. citi is -- part of citi's call today on going neutral is they expect mega cap growth to level out. >> i thought that was a good piece from the point of view of what it would do today and the one that has been the best barometer is microsoft, because microsoft has great a.i., and people know their core business is good. but the fact that it goes down on days like today make me say, it's not going to be an easy

path >> speaking of microsoft, and we don't know, but we are waiting for judge corpley to issue her decision most likely, would be after the close. that's the thinking. not today. i mean, but some day this week, it's going to have to be this week there were some who thought it might have been as soon as last week, but it wasn't. >> but activision blizzard has been quietly creeping up >> it's only 12 bucks with a $95 all-cash offer from microsoft, but it's an important case as we've said so many times, as much for the ftc as it is for microsoft. should the ftc actually lose and no injunction issued by the judge. >> you told me, from the very beginning, when i was saying that lina khan, ftc, could really hurt the business of m&a, you said, jim, she can do what she wants. if the courts go against her, you might see a different environment. might we see a more positive environment for m&a if it's just tossed out

>> yes, i think there's an argument that says that if judge corley agrees with microsoft in its arguments that the deal is not anti-competitive, that it will make it perhaps -- perhaps it will make the ftc more reluctant, but that's conjecture we don't know. they had brought cases that very few people expected them to bring, brought second requests when they were not anticipated and so, it's unclear, jim, i guess, but yes, there is a hope, i think, on m&a practitioners' part that should the ftc lose, it would make them a little more reluctant. >> and looking again at goldman, which is the old goldman, which you wouldn't want to be in if you do get a better m&a environment. >> speaking of which, take a look at bonds today. we are going to get vice chair barr in ten minutes talking about bank regulations on top of a healthy diet of eco-data throughout the course of the week cpi, beige book, ppi, claims, of

course, and waller later in the week should be interesting as well. right now, you got the ten-year still circulating north of 4%. hi, i'm katie. i live in flagstaff, arizona. i'm an older student. i'm getting my doctorate in clinical psychology. i do a lot of hiking and kayaking. i needed something to help me gain clarity. so i was in the pharmacy and i saw a display of prevagen and i asked the pharmacist about it. i started taking prevagen and i noticed that i had more cognitive clarity. memory is better. it's been about two years now and it's working for me. prevagen. at stores everywhere without a prescription. somebody would ask her something

and she would just walk right past them. she didn't know they were talking to her. i just could not hear. i was hesitant to get the hearing aids because of my short hair. but nobody even sees them. our nearly invisible hearing aids are just one reason we've been the brand leader for over 75 years. when i finally could hear for the first time, i started crying. i could hear everything. call 1-800-miracle and schedule your free hearing evaluation today.

keep your eye on the nasdaq 100. jimmentioned the weakness in mega cap tech and some discussion as well about the nasdaq 100 failing resistance at 15, say 15.2 a look at the laggards, amazon among them stop trading with jim in a minute

- i got the cabin for three days. it's gonna be sweet! what? i'm 12 hours short. - have a fun weekend. - ♪ unnecessary action hero! unnecessary. ♪ - was that necessary? - no. neither is a blown weekend. with paycom, employees do their own payroll so you can fix problems before they become problems. - hmm! get paycom and make the unnecessary, unnecessary. - see you down the line. 76% of 23andme health customers surveyed reported taking healthier actions. more exercise. eating healthier. and simply getting more sleep. because they know health isn't just a future state. health happens now.

with over 150 personalized genetic reports from 23andme you can start your dna-powered health journey today.

jim and stop trading. >> i've been pro the idea that you can't just litigate to get safety for any sort of crypto. now tim, my friend from law school, used to be the head of tftc will talk about an op-ed piece about how to regulate crypto i think it's going to be terrific and i think all of us will feel more comfortable i like what he has to say and we'll sit down with tim and he's terrific and a wise fellow who

knows how to get this going. it's important. >> you're looking forward to friday's numbers. >> i sure am. >> and then i know a lot of people are trying to figure out with tech, microsoft down 7 today. the one to watch adobe it almost started to go back to where it was when it reported the great quarter. if adobe can stay up here you will not have a bad day to protect. >> it's interesting the way it's defying the gravity that's taking down other big tech names. >> i keep hearing how well, it's doing. it's how to use and it's doing well the rest of them, i don't know microsoft down 7 really i mean it's microsoft. nvidia down 7. enough enough get ready to do some buying. >> you've been saying that and raising a little cash here and there. >> we have we keep selling and selling. i know we want to have some cash for what i regard as going into earnings where people just are not crazy about what they're going to see and probably going

to be right. >> i'm not mike wilson. >> no, no one -- >> i'm more dennis >> we'll see you tonight "mad money," 6:00 p.m. eastern time we're going to check in with former kansas city fed presser esther george, her first television president since retiring that. >> ask her if she's going to pick up the tip for jackson hole it's going to be worse she's going to be like let's spread this out among the different federal reserves. >> they host it. >> kansas city chiefs are going to end up having to pay. >> got it. >> they won. >> dow is up 180 as about everything is working this morning with the exception of tech don't go anywhere.

ah, these bills are crazy. she has no idea she's sitting on a goldmine. well she doesn't know that if she owns a life insurance policy of $100,000 or more she can sell all or part of it to coventry for cash. even a term policy. even a term policy? even a term policy! find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com.

. good monday morning. welcome to another hour of "squawk on the street. i'm sara eisen with carl quintanilla and david faber, live for you from post nine of the new york stock exchange. take a look at stocks this morning after last week's sell-off more than 1% decline in the s&p 500. it's kind of a tepid rally right now and the nasdaq is behind technology not in the driver's

seat nasdaq down 0.3% s&p up 0.2 led by industrials, consumer staples and financials those are your best performing sectors right now. communication services and information tech at the bottom of the list. 30 minutes into the trading session and here are three movers we're watching. stifel raises price target on service now to $600 a share, one of the highest on the street, citing servicenow's expanding platform, and pipeline we're watching nvidia up 180% since january. as morgan stanley calls it their top a.i. pick and goldman sachs raises its price target to $495 per share. a number of firms on the street initiating restaurant chain cava following the ipo last month, baird setting the price target at $50 per share leaving the stock up now almost 100% since its debut. >> it's going to be a big week for data let's get wholesale trade numbers from rick santelli

good morning, rick. >> good morning, carl. our may final read on wholesale inventories, well, it moves from minus 0.1 to unchanged a bit of an improvement from the mid-month read something interesting on inventories we haven't had a positive number since november of last year we've had a couple of unchanged definitely and i think that's important to mention we all know that inventories, well, we've been depleting inventories and many are suspecting a this is going to be an area of growth adding to gdp at some point down the road on trade sales, down 0.2% we're expecting an up number, so that's also a bit of a disappointment interest rates other than the 30-year bond unchanged to a slightly higher yield all maturity yields are lower. the 2-year failed to close above the cycle high yield close in

march, yield of 5.07%. vatsz dropped rather dramatically in the last 30 minutes. back to you guys. >> rick santelli, thank you very much carl, as you mentioned, busy week of data and the highlight is going to be wednesday's cpi report, the big inflation number for consumer prices and then ppi on thursday. it's important because inflation has been sort of a wild card in the stubborn factor leading the fed to continue to speak hawkishly. big move in the markets last week off the back of stronger data and even though jobs was a miss on friday, that wage growth surprised on the hot side and now we're trying to game out what wednesday is going to look like the expectation for the numbers that the headline number will fall dramatically which is good. we want to see a 3 number in front of that and that's what market expects a lot of it because of the base effect such a big number in june of last year month over month is important, 0.3% increase from the month of may. that would mark a deterioration, but nobody really thinks it's

going to keep the fed from hiking in july what happens with september. that's going to be the -- that's what we're going to figure out a lot of reasons to think the number could be soft because it's been inflated recently by used car prices two months in a row should start to come down, shelter, we know, has a lagged effect air fares should cool off a little bit so the best hope for stocks that are still, you know, stuck with this better than expected data is that we get a softer inflation read. >> we'll see that's why manheim this morning used car data was important down 4% month on month, one of the biggest drops since covid began. interesting, adam parker has interesting charts on the split between cpi and ppi, which by the way is now negative year on year that's only -- the split to that degree has only happened a few times in the last quarter center we'll see whether it catches up. >> you would think ppi would lead, wholesale, what goes nats pipeline, manifests and consumer

prices i don't know if you saw the data in china, very weak, had a big negative number in front of it and c pishgs i as well no correlation between what they're seeing and we're seeing. recovery has been weak ppi wholesale number down 5.4% adds to growing calls for stimulus in that economy. >> we spent time discussing it in the last hour it's fascinating to look at any number of different metrics trying to understand how weak that economy is. treasury secretary returning from china also had some things to say as well in terms of where we are in the job market, just - >> in the u.s. >> in the u.s. curious to get your take overall on any comments yellen made in china or about the u.s. sort of caught your attention. >> i mean, for me it was really about the delicate dance she's doing between on one hand the military concerns and the security concerns we have with china and on the other, trying to make sure economic ties are

sound. she did not use the word decouple she used diversify when it came to supply chains which is a new friendlier word. a lot of people think you can't separate the two, right, because they announce the rare earth metals are going to be -- are now their rules on that and retaliation a lot of people think for what we did with the semiconductors we're expecting the biden administration to do more restrictions on chinese investment can you have a friendly economic relationship it's good that we see a thaw, but there was no new policies announced and i think it's -- it's challenging i think investors, according to the research notes i'm reading this morning are encouraged to see her there, high-profile visit, ten hours of meeting, that's good, they're talking i'm sure ceos who do about this china are happy too. the bigger picture, i'm not sure it means anything necessarily for that relationship. we didn't make any headlines on the chinese economy side of things. >> there was no major groundbreaking of any kind, other than the communication itself which is seen as

generally a positive between the world's two largest economies. >> she did not meet with xi jinping. >> right. >> the previous treasury secretary mnuchin did. a lot of people thought what does that signal we're in a tense relationship with china, no matter what i think when it comes to their economy the bigger question, more pressing question, how much stimulus are they going to do. they're announcing rules to get investment back and they're loosening some rules, but i don't know if anyone is expecting any kind of bazooka that made the market sour on china. one of the biggest surprises this year. better u.s. data, weaker chinese data. >> very much so. i think there was a broad expectation out of covid their economy would heat up and that hasn't happened and other marriages at an all-time low, things of that nature that you see. >> marriages in china. >> in china. >> unemployment at an all-time high worth keeping a close eye on something else are the banks we have leslie picker, a news

alert for us on those banks. >> hey, david. yeah, the fed is proposing sweeping changes to bank capital requirements in the wake of the turmoil this past spring the revamped capital standards are embedded in a speech michael barr is currently giving at the bipartisan policy center in washington the recommendation for enhanced capital rules apply to banks with $100 billion or more in assets the current framework applies to firms that have $700 billion in assets barr says the proposal is the equivalent to require banks to hold an additional 2 percentage points of capital and says the expanded scope is appropriate because, quote, the risk of contagion implies we need a greater degree of resilience for these firms than we previously thought. notably, barr is proposing firms with $100 billion or more in assets account for unrealized losses and gains and they're available for sale securities when calculating regulatory

capital. this was an issue with silicon valley bank because they realized losses without the capital to back it up which the fed says triggered that run on the bank the proposed rules would end the practice of relying on banks internal estimates of their own risk and instead, use the consistent approach across the system barr is seeking to affirm's market risk measures to better align with market exposure and seeking to standardize operational risks like trading losses or litigation expense based on a firm's activities and historical losses. the new proposals, requirements, still need to go through the comment process and barr says they're likely years away from implementation regardless, 2 percentage point increase to capital sounds like a small amount but would have an impact to margins, guys. >> is all this anticipated by the banks and do we expect it to influence how much they're lending, which we're watching very closely i'll be focussed on that in bank

earnings this week. >> yes, and yes. we were expecting higher capital requirements the fed is very much telegraphed that would be something they were studying and something that they were considering in the wake of the march and april turmoil. and then as far as how it impacts lending, lending has been crimped based on higher interest rates and what we saw in march and april and barr says in the speech we know this could have an impact on the overall system and higher capital requirements could divert business to nonbank financials, but at the end of the day, the resilience and soundness of our banking system is the most important thing. we'll deal with all the other fallout from that as it happens. it. >> regional banks remain higher. big banks remain higher. to your point a lot was anticipated. thank you. leslie picker. let's bring in market comme

commentator mike santoli as we head into a week of cpi, ppi, b beige book and bank earnings. >> it comes at a moment when it's mid-season, baseball, all-star break do we double down on or strategy because it's been working or capitulate and say we have to find something new bulls and bears have to accept complications to their story to stick with it. inflation is coming down hard, yet if you are bearish you'll say the fed will not accept that and want to get to target and tighten more if you're bullish you have to say the inverted yield curve has had an important message over the years and not seeming to take hold right now. i would argue we inverted earlier than we otherwise would have last year in the 2s and 10s, 2-year yields shot up so much more because of the transparent fed we had ever. the other thing is just how important is the fed with the s&p trading above where we were on the first rate hike that rarely has happened if you've had a 20% decline in

stocks, usually you have to wait until the fed is done tightening before you get out of it all of this stuff i think is going back and forth at this moment when really the point is, inflation sustainably lower means we can sort of take the fed off the screen for our worries and say, earnings revisions are perking up again earnings estimates have flattened out and not gone down and i think everyone is a little bit uncomfortable in the strategists rhetoric from the street is reflecting that right now. people have been cautious on balance consensus coming in. the average wall street strategist forecast is, and you're seeing the reupping of the targets and people not buying into what the move has been because it's been nasdaq driven and nobody believed or was positioned for the leaders of the last bull market to be the ones that carry us higher this time. >> what's interesting is sure you have your cities that are

sticking with 4k, but even those who have been right and bullish, stifel and tom lee in there, are either looking for flattening out here or maybe another 100 points. >> exactly it's hard. i think the valuation, you run it through your models, it's pretty hard to get a straight line to a lot of upside from here that's why it does take either the a.i. excitement is going to translate into earnings forecast going higher or it's this general catch up type move where you say the rest of the economy and the sectors can do better than they have been. it doesn't move the needle that much on the headline s&p what does it help your target if that is the case i think there's multiple points of equilibrium 2% inflation, 2% real growth and 2% treasury yields there's a place to go to higher nominal growth, 5% plus, earnings stronger over inflation and yields are higher and you find your place to make peace

with that. >> in other words, the bull story is growth with moderating inflation. >> exactly exactly. >> and the bear case is stecker inflation. >> or the bear case is you took credit for that and that's why we're here and go higher from here. >> always a good sign of mention more of a.i. in earnings calls than recession. >> that was the crossover. >> thank you mike santoli as we head to break here is our road map for the rest of the hour china on the cusp of deflation as treasury secretary yellen says talks with china were productive what's ahead for u.s.-china relations. cnbc's annual top states for business is right around the corner the big economic issues that are in focus. and musk and zuckerberg facing off as thread hits 100 million users in five days meacin menhewee for both wn co bk aomt.

76% of 23andme health customers surveyed reported taking healthier actions. because they know health isn't just a future state. health happens now. start your dna-powered health journey today with personalized insights from 23andme.

we have a new team on the economic side in beijing and to open on growing channels of communication where kidnappers can be aired and discussed and i

think my trip has been successful in forging those relationships and creating the opportunity for a deeper set of more frequent context at our staff levels. >> treasury secretary yellen on meeting china's leadership in the last trip, her first trip to china, as treasury secretary she called the talks direct and productive, a step forward in putting u.s.-china relations on scheuer footing after new data showed looming deflation in china as sara mentioned as the economic rebound loses steam moon strategy founder and president and affairs jeff moon is with us on the phone. great to get your take it's a high-profile visit, but none of the deliverables that we've come to expect with something on that par. what do you think of expectations and where they met? >> i think of this not just as an isolated event, but as part

of a process the president met last november and decided they wanted to improve relations through cabinet visits the good news is, that the yellen visit continues to stabilize the relationship and did the things she described she met the new leadership and compared notes and remain on track for a possible biden-xi meeting in november during the apec meeting the bad news is that no minds were changed about the key issues, and i see this as the high watermark in that series of cabinet visits because there are three factors that threaten to further sour relations in the next few months. the first is that yellen's portfolio did not include the most controversial issues, which are tariffs and export controls. those belong to u.s. trade representative and the commerce secretary who may be visiting and will generate more controversy. the second is that we know more restrictions are coming in the future months. outbound investment is part of

the portfolio and she talked about it, but there's also cloud and a.i. and restrictions out there. the third problem is what you've been talking about, china's economic problems. china's economic statistics continue to show weakness. china is on the brink of deflation. the communist party is not known to blame itself for its own problems so it could well try to deflect blame to the united states one story i haven't seen reported in the american media is the fact that chinese media has been [ inaudible ] yellen but hostile to the united states throughout and signals to me that when the situation gets tougher that rhetoric from the chinese side, which is directed by the leadership, will get tougher as well. >> can you separate out the economic relationship from the security relationship? this is what -- this was her challenge going in and seemingly coming out >> well, they are intertwined, but if you look at all of the

u.s. statements, all of the u.s. statements about restrictions on china or sanctions are offering in terms of china's civilian military strategy which intentionally is designed to take civilian technologies and use them for military purposes to the extent that those kinds of dual use technologies can be excluded from economic activity, yes, i think there is a separation. >> jeff, love to just end on the chinese economy itself which we've been talking about this morning a bit. much weaker perhaps than many anticipated coming out of covid. what signs are you looking at and how strong or weak do you think that economy is right now? >> well, there are various measures that chinese have taken traditionally, stimulus is a go to move that china takes, but from my perspective, the biggest problem and one of the biggest problems is real estate and i have not heard anyone give a viable solution to the real estate crisis, which is unique to china because of the unique

way that china owns property, local governments sell the property and heavily dependent on that for serving the local population that situation is something that china is deferring, including through some measures that are issued today, but i don't see how they finally resolve it. >> we are, obviously, curious to see where the talks go from here or at least the pace of context. jeff, appreciate that very much. talk soon. >> thank you. up next, the countdown is on for cnbc's top state for business don't miss the details and another big hint coming for you right after the brk.ea stay with us dow remains higher up almost 200 points oothing benefits of retinol. are now for your whole body. plus, fast-working crepe corrector diminishes wrinkled skin in just two days. gold bond. champion your skin.

you founded your kayak company because you love the ocean- not spreadsheets. 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

welcome back to "squawk on the street." one year after the supreme court's dobbs decision returned the issue of abortion rights to the states turns out it's also an economic issue and makes it a factor in america's top states for business which scott cohen is getting set it reveal tomorrow and joins us from the mystery top state. good morning, scott. >> reporter: good morning.

we wanted to spend a little bit of time on this and know it is a serious issue and we had a lot of internal discussions ability this bearing in mind keeping personal views out of this, we know that there's a worker shortage and there are 78 million women in the workforce right now. cnbc and momentum surveyed about 5,000 this year and they found that 23% of them said they would not work in a state that restrict abortion. if you narrow that down further, 29% of women making $100,000 a year or more, 32% of all women aged 18 to 34, they also surveyed 5,000 men and 15% would refuse to work in a state that limits or bans abortions some governors say those numbers you cannot ignore. >> you think abortion is about the economy, you might not have a uterus, right. >> reporter: that's how gretchen whit more framed it as her state

codified abortion rights this year massachusetts governor said her state's reproductive freedoms are a selling point. >> we know having heard from employers this matters to their employees and massachusetts is a state where we protect women's access to needed health care. >> reporter: in states with restrictions some of america's biggest companies are paying travel expenses for care greg abbott predicted his state's abortion ban would attract wise there's a lot of businesses and americans who like the social positions that the state of texas is taking. >> reporter: there's little evidence of companies moving because of abortion laws, either way. >> have you actually recruited any businesses here based on that >> i cold call a lot of people the results, i haven't done it in a long time, but i don't have a specific case to point to, but i get their attention. >> reporter: factoring all of that, we have included

reproductive right as a metric in our inclusion category. across the cnbc study there are 86 metrics so we will see how it all plays into things when we reveal america's top state for business tomorrow and where i am and we'll give you another diabolical hint about that coming up in the next hour guys >> i guess the calculation, scott, from some of these right wing states, is they're so business friendly on their tax policies and incentives, it won't, you know, the abortion issue won't prevent them from winning economically it sounds like that might be true if they're not moving >> reporter: well, one of the things, sara, that may cancel this out, and things that a lot of these governors like governor abbott in texas and governor desantis in florida talk about, people are moving to these states with abortion bans. election consultants look at that and the migration patterns and companies as well. it's labor of a moving target

now exactly how this will affect things again, those survey numbers about people who are literally taking this into account closely as they make location decisions, workers i'm talking about, those were things that we really could not ignore this year. >> all right scott, we'll be staying tuned for the big reveal scott cohen. >> not much of a hint in that location. >> none. i don't think there's any there. we didn't get any riddles either. still ahead, more on the markets and what comes next for the fed for what is going to be a big week of data and break things down with former kansas city fed president esther george her first broadcast interview since leaving that role, that will be after the break. stay with us (bobby) my store and my design business?

we're exploding. but my old internet, was not letting me run the show. so, we switched to verizon business internet. they have business grade internet, nationwide. (vo) make the switch. it's your business. it's your verizon.

welcome back to "squawk on the street." i'm bertha coombs with your news update president biden on his way right

now to a key nato summit in lithuania after spending the morning in the uk, he visited king charles after a meeting with prime minister rishi sunak. a spokesperson for sue knack says he and the president discussed the u.s. decision to send cluster bombs to ukraine, a move sunak made clear he disapproved of. a union leader tells nbc news larry nassar was stabbed in a facility in florida. nasir is serving a sentence up to 175 years for sexually abusing athletes under his care. the source says nas er was stabbed eight times and has a collapsed lung. the kremlin claims president vladimir putin met with wagner group leader yevgeny prigozhin and his top commanders just five days after their failed mutiny it's not clear why the kremlin

decided to publicize the meeting, nearly two weeks after it allegedly happened. russian officials did not share details of what putin and prigozhin discussed. that is one mysterious case, guys sara, back to you. >> absolutely. thank you. we're a little over an hour into trading markets awaiting key inflation data cpi and ppi wednesday and thursday affecting the fed's course going forward our next guest only stepped down from the federal reserve earlier this year. we are joined by former kansas city fed president esther george her first tv interview since retiring from her role in january. great to have you, president george thanks for joining us. >> thank you, sara. >> and now you can let loose because you're not in the fed anymore. so my guess is that you think they've got more work to do on the inflation fight, correct >> well, certainly based on the numbers we've seen over the last few months, inflation is really flexing its muscle and hanging

in there, so i would not be surprised, as the fomc indicated, even though they did not raise rates in june, they may be prepared to do so again, given that inflation we'll see what the numbers look like this week. >> is there any number that could be moderate enough within core inflation that would make you think okay, maybe july and then they're done in september they don't have to go two more >> i certainly expect that during the second half of this year we're going to see some slowing and i would expect that to be through to inflation to some extend. but if you follow the projections that that committee has put together to get to 3.2 by the end of the year, would mean we would need to see some pretty dramatic downshift in this week's report and so whether or not that happens, it will be just one data point. they think it's going to have to get closer to 3 than 4.5 for

them to make adjustments in their rate stance. >> do you think they made a mistake by pausing they didn't call it pause. not raising rates. would you have dissented if you were a voter >> that's a good question. i actually supported slowing down i thought the very aggressive rate path that was undertaken during the first half of the year, was sure to cause some hiccups and so we saw some of that come through in the banking system, and i think the committee is getting to a point where they can begin to look around and slow things down a bit because i'm a firm believe that are there are lags there. i'm also thinking about that balance sheet runoff and the combination of that i think suggests that even as you keep your eye on the potential for future rate hikes, it's probably a good idea to watch how the data unfolds. >> why do you think it hasn't been more impactful?

i think one of the biggest surprises of this whole tightening cycle is that a, we're not in recession and even the most interest rate sensitive parts of the economy like autos and housing are starting to perk up who would have thought after 500 basis points of tightening >> so to me, i think we are still living some of these impacts from the pandemic experience, and i think that's going to continue to confound how we understand the data and how things are moving. auto, for example, i think is great example. i think the chip issue is still with us, for example and so prices there, the fact that we have such strong employment, people have income, i think is going to continue to put pressure on that inflation number for a while so until those pandemic effects fully work their way through and many of those supply side, i think the fed will be looking at its demand side influence to determine that rate path

>> i'm curious to get your reaction, you mentioned balance sheet runoff i think chair powell was in front of the house talking about the experience in 2019 when the repo market, in particular, had some real hiccups as a resulto the runoff then. any concerns on your part on a trillion dollars annual pace of roughly a trillion right now there is any concern in terms of the experience we saw in 2019 that powell acknowledged didn't go as well as had been planned recently >> so i think you have to keep your eye on this always because this is a far more aggressive runoff than we had the last time, and watching particularly as the treasury begins issuing more debt to fill its coffers, i think is something that the committee will have to be mindful of that said, i think it's important that we continue to

factor in the runoff of that balance sheet with the rate increases. i think both of those things are in motion in terms of tightening financial conditions right now and we'll just have to watch it. >> yeah. we have the added issue of the treasury raising all this debt issuance and seeing where that comes from so ultimately, what's your best guess, esther, as to how many more rate hikes we have in the cycle? >> so i think just based on my own forecast, and listening to anecdotes from businesses in this region, i think you're beginning to see the effects of those rate hikes maybe another rate hike comes in july but i would be cautious to watch a slowdown for the rest of the year and whether further increases may be needed. it may be a good time are for the fed to hold rates an watch and see how the data begins to unfold. >> what do you think they will be happy with? we're not going to get back to

target, right, so what would be good enough for them to stop >> i think their own forecasts are anticipating that inflation is going to come down closer to 3 by the end of the year and then continue to move further down next year i think if it stays in the 4, 4.5 range, much longer, i think that committee will feel pressure to continue to raise rates. they can't afford not to try to bring this inflation down and everything i hear is a commitment to do that. >> you mean core, core in the 4s would not be okay? >> right >> esther george thank you so much good to speak with you. >> good to be here thank you. after the break more on meta as their new app threads hits 100 million users in a week and one investor argues it's make or break time for the name. we'll discuss that in a moment

the first time your sales reached 100k with godaddy was also the first time your profits left you speechless. at the counter or on the go, save 20% with the lowest transaction fees and keep more of what you make. start saving today at godaddy.com

>> meta's latest product to rival twitter threads surpassed 100 million users within five days according to data we received this morning. our next guest says meta needs this to work and timing is fantastic. joining us roger mcnamee, early facebook and meta investor and critic of meta what's your take on threads and what it means for the company? >> i think it's really a perfect situation and perfect time for meta but that doesn't mean it's easy the company failed in crypto and then it failed catastrophically with the meta verse and given how mature the facebook product is, the fact that it really doesn't have any growth opportunity left in its most profitable markets, the instagram is still under a lot

of pressure from tiktok, threads is an opportunity to go up against a competitor that, frankly, is, you know, basically shooting itself in the mouth every single day and as you've seen, meta has 2 billion active users of instagram, so signing up 100 million of them into this was, obviously, an effortless thing for them now the question is, can they, in fact, create the kind of community on this that twitter had that becomes economically valuable i think the odds of that are not bad but i don't think it's a gimme and i don't think it's going to be that big we'll see. >> twitter, listen, still a useful product perhaps less so than it had been for many of us who rely on news and information or use that's way to distribute it it's not as clear to me threads is after that audience is that your take? >> the thing that threads has is one of the three core constituencies of twitter, which is celebrities

every celebrity is on instagram and they all have just an eno enormous following there i think that piece of the twitter ecosystem moves easily the part that journalists use is going to be harder to replicate. what happened at twitter was in some ways a fluke, being in the right place at the right time, it was never a great product it was never monetized well. and candidly, they had an awful lot of problems just with moderation and other things he over the years, so to me, all of that produced 500 million users in a business that has never been profitable. >> yeah. >> so for meta to do better than that, i think is entirely realistic because i think the people there are smartser than the people running twitter over the years. i don't know how big that market is and whether it's enough to make a really big difference on

meta's income statement which is so much bigger than twitter's. >> oh, yeah. far bigger you bring up an interesting point twitter never seemed to realize its opportunity because it was -- it never seemed to work as well as it could have or imagined it could have there were those who believed once musk took control he will figure it out. what kind of grades do you give him? >> an "f." twitter he's made a mess of it how hard would it have been to not make a mess of it? well, not just pausing and thinking and trying before you just willy-nilly tore the place apart would have been a good start. i do think that's the place where meta has a gigantic advantage. i do think meta understand monetization a thousand times better than twitter ever did the problem with it is that in a news feed model that works the way the twitter works you can't just jam it full of ads and have

people find value in it. so i do think that facebook's strategy and instagram's strategy, which has been to load more and more ads into the feed, will probably be okay in the celebrity world but less attractive in the news and politics world. >> why do you say it's been a failure? it's hard to get metrics according to musk the engagement has never been higher on twitter. >> what do you think the losses are right now? i mean, the issues relative to advisors leaving twitter strike me as -- >> he hired linda yaccarino and that's her business and she has a command over the marketing world. >> i wish her lots of luck i just think you're on twitter every single day and you watch what's going on there, and what musk has done is take away the equilibrium that gave disadvantaged parties the ability to participate in the

political process. he's made the thing more partisan by undermining a portion of the broad ecosystem he changes the culture really dramatically and i think makes the product a lot less valuable to its users, at least to the ones who make the site really effective. i still use twitter, but i use it differently than i did before and less than i did before and i suspect i'm not alone in that respect. that. >> roger, finally, you know, musk has to your point even in the last 4 hours, the stuff going back and forth, particularly from musk, and zuckerberg, and this whole idea that they're going to meet each other in a cage fight, what's your take on that? do you think it would be a good thing? a bad thing? do you wonder? does it make you question certain things if these two go at each other in a ring somewhere? >> so david, i look at this and go, the whole thing is a distraction, right one of the big problems that

we've got right now is that we have the internet platforms like meta, like google, unwinding all the disinformation protections they put in after 2020 you have a judge saying that government is no longer allowed to talk to internet platforms to try to protect democracy against disinformation and you put all these together and what is the thing we'refocused on a cage match. i'm going hang on just a second. we have a five-alarm fire going on in our democracy, and these guys are at the heart of it, and the question is are we going to make an attempt to protect democracy, to prioritize that over social media? the answer right now appears to be nope, we're going to sit there and have the entertainment value of zuckerberg competing against musk in a cage match. >> yeah. we'll all watch if it actually comes to pass is my guess. >> maybe not all anyway, david, that's where we are.

>> say again >> i said, that's where we are today. >> that's where we are that's where we are. roger, always appreciate you telling us where we are at least as you see it. thank you. >> take care coming up, at 11:00 a.m., guggenheim partner executive chair lan schwartz as he calls for one last rate hike in july what he's seeing in the business in ten minutes stay with us we're back in just a moment. dow's lost a little steam. up 142 s&p holds the gains.

so, you've got the power of xfinity at home. now take it outside with xfinity mobile. like speed? it's the fastest mobile service around. with the best price for two lines of unlimited. only 30 bucks a line per month. that's hundreds in savings a year when you wave bye to the other guys. no wonder xfinity mobile is one of the fastest growing mobile services. you really shouldn't walk out the front door without it. switch today at xfinitymobile.com. 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. we mentioned some of the weakness in mega cap tech. let's bring back mike santoli. >> carl, some mechanical drivers, perhaps, to this action today. if you look at the nasdaq 100 etf, qqq, relative to the equal weighted one, it's the very largest stocks in the index down today. it's likely because late on friday, friday night, nasdaq announced they're going to do what they call a special rebalancing of the nasdaq 100. this happens when the top of the index gets a little too

concentrated you have the largest stocks, worth 4.5% of the index each that's apple, microsoft, amazon, tesla, nvidia, et cetera when they get past 4.5%, if you add them up and they're more than 48% of the weight of the index, they do a special rebalancing. which means they knock down the weight of the very largest ones. they'll distribute that market weight across the rest of the index. it's going to happen july 24th it's not happening in terms of the selling from the -- so to speak from the index itself but people are preparing for the fact there's going to be a little less index flow into those names. to me it's reflective of the place this market has taken us to, which is the domination of the very largest stocks has thrown this benchmark a little out of whack they need to kind of redistribute you're not going to know exactly how much selling is going to happen in those stocks at the time of the rebalancing for a while. clearly people are getting

ready. >> is there something magic about 48 >> i don't think there's anything imaginic about it i think it's in the construction of the index itself. if you remember back when they constructed the index and launched the qqq, it was when apple -- it really was microsoft and intel and dell and cisco threatened to sort of consume the entire index they wanted rules that this would be a traded index and you'll have an etf diversified by rule. you can't let it get too skewed in one direction my guess is they don't want a handful of stocks being half the index so you draw the ceiling at 48 as we talked about, david f you're a mutual fund, actively managed mutual fund, i think there's a 5 and 25 real. top five holdings can't be more than 25% of the fund right there you automatically underweighting the biggest stocks in the index. >> where are we in terms of the weight -- i know what apple is specifically, but is it possible

those five in the s&p as well? >> in the s&p, i'm trying to think of it. i know it's basically 15% for apple and microsoft alone or 14% to 15% for those alone it does kick you over probably 25% if you did the six or seven we talk about all the time >> yeah. >> which means what? >> that's the question is it a good, bad, neutral, just the way it is? clearly it means if you own the index, you've gotten the benefit of not selling the winners i think from an investment behavior point of view that's one thing the index does. maybe on the other hand, you have a lot of your eggs in a single basket or maybe vulnerable to some downside volatility on that front to me it's also a winner take most economy that's the way the market is viewing it the equity reflects that. >> it also means the s&p is up 15% year to date and the dow is

up 2. >> right dow skewed the other way, different type of stocks, different weightings and not participating. >> we got excited about the broadening -- the bulls got excited when the broaden add in june >> the equal weight s&p is up 4% to 5% this year. that's not a bad half of the year, by most standards. >> by most. >> unless you're going up against 15. >> back to the original point, other than meta, mega cap tech is back. >> meta seems to be moving on its own news dynamic. >> yes zuckerberg the favorite. the big cage match coming up. "squawk on the street" will be back after this - i got the cabin for three days. it's gonna be sweet! what? i'm 12 hours short. - have a fun weekend. - ♪ unnecessary action hero! unnecessary. ♪ - was that necessary? - no. neither is a blown weekend. with paycom, employees do their own payroll so you can fix problems before they become problems. - hmm! get paycom and make the unnecessary, unnecessary.

- see you down the line. ♪ (upbeat music) ♪ ( ♪♪ ) ( ♪♪ ) ( ♪♪ ) -awww. -awww. -awww. -nope. ( ♪♪ ) constant contact delivers the marketing tools your small business needs to keep up, excel, and grow. constant contact. helping the small stand tall. we planned well for retirement, but i wish we had more cash. you think those two have any idea? that they can sell their life insurance policy for cash? so they're basically sitting on a goldmine? i don't think they have a clue. that's crazy! well, not everyone knows coventry's helped thousands of people sell their policies for cash. even term policies. i can't believe they're just sitting up there! sitting on

all this cash. if you own a life insurance policy of $100,000 or more, you can sell all or part of it to coventry. even a term policy. for cash, or a combination of cash and coverage, with no future premiums. someone needs to tell them, that they're sitting on a goldmine, and you have no idea! hey, guys! you're sitting on a goldmine! come on, guys! do you hear that? i don't hear anything anymore. find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com. test tes

. good monday morning. i'm sara eisen with carl quintanilla. guggenheim partners executive chair alan schwartz as bank results with a make or break earnings season and yellen's trip to china. calling this a show me market with some key econ data coming later this week we'll get his warning on the fed's excess tightening. satori funds dan niles where to look fo