good wednesday morning i'm carl quintanilla with sara eisen live at post nine of the new york stock exchange. on the agenda today, pimco's tiffany wilding is with us why she says the second half of the year will prove to be very different than first and why credit may be your best bet going forward. >> plus, house financial services committee ranking member, maxine waters joins us the house kicking off a hearing on esg investing today, and what could be a contentious fight even black rock's larry fink says the term esg has been weaponized in congress and later on, why amazon prime day is not exciting one veteran. it is a celebration of the weaker inflation, softer inflation read than what was expected, and that than what we've seen in a long time, going

back to march 2021 we got a 3% inflation read s&p is up 1% right now every sector is higher and what's leading us in particular, well, it's technology consumer discretionary, financials, they're all having good days. materials, it's cyclical also tied to the economy as well. what's lagging, more defensive groups like consumer staples and health care. also, carl, i just have to say, i'm watching the u.s. dollar, because it's making a big move lower. we've got a more than 1% move lower in the dollar index, which tracks it against a lot of other currencies, but primarily the euro and that's because the fed is now seen doing less than other central banks, like europe, like the uk, like norway, which is also making a big move today because the inflation report shows that what they're doing has been working and according to the market's views, they won't have to do more than just july a rate hike next week. we'll see about september and november, but that's how the

market's reading it. >> a some more expensive european vacation, maybe, as dxy. we'll start talking about 52-week lows here in no ime. meantime, let's dig deeper into this june cpi print. inflation may be at it lowest level in two years, but not low enough for our next guest that sees inflation in the cards to bring prices down even further joining us, timothy wilding. great to see you talk to me about the lag effect that you see playing out, and is that really a second-half story? >> so like you mentioned, we do think the second half of this year is going to be a very different picture than the first half and that's both for inflation and for growth so we think what really resulted in a more, you know, persistent inflation, more resilient economy in the first half of this year was the increase or the acceleration in real incomes as a result of just falling energy prices over the back half of last year but that's ultimately fading you also probably had some pent-up demand for services.

just coming out of the pandemic. but we think the second part of this year, you know, looks very different, as i mentioned. we think growth will decelerate in the second part of this year. you have headwinds from consumption. and by the way, under the surface, credit growth is slowing. and slowing quite dramatically and the economy, ultimately, needs credit to run on so that will also be a major headwind, at a time when monetary policy is very tight. >> what happens to unemployment, do you think, by year end? >> yeah, i mean, unemployment has kind of been notoriously difficult to forecast. you know this cycle, as a result of, you know, companies wanting to just increase more employees, but maybe work them fewer hours. i think there's definitely some secular trends that are changing in how corporate workforces revolving. but nevertheless, we do think as the economy weakens, you will see unemployment rise. and usually, historically, that rise in unemployment has been

characterized by negative quarters of real gdp growth. in other words, we have never seen, you know, in the history of getting a rise in unemployment without those negative quarters. so we think you'll probably see a recession. and the bottom line is, wages are sticky even though headline and core inflation measures are coming down, wage inflation probably still will look a little bit stickier, and you probably need some unemployment in order to moderate that fully. >> so just to play definitely's advocate, tiffany, there's still 9 million job openings in this country. bed we don't have any immigration policy, letting people in. and we have so much in the way of demand coming, like the infrastructure bill and the chips act and the american rescue act that's all still filtering through. and should create a lot of demand for projects and for workers next year, shouldn't it? >> yeah. i mean, you're absolutely right that that stuff is happening, under the surface. but it's been one of the reasons why we've suggested that

whatever recession that we get probably will be more moderate, on the more moderate side. we definitely are seeing within the government statistics, we're seeing, you know, the chips act, for example, result in, you know, a major acceleration in that kind of manufacturing in the united states. all of this is good news construction payrolls, for example, haven't fallen like we've seen the contraction in residential investment yes, all of that is good news, and it will be ultimately an economic buffer, but nevertheless, you know, the fact that banks -- we've seen a pretty persistent decline in bank equities, just on average in the united states obviously, a lot of that is coming from the regional banks but a 30% peak-to-trough decline overall in average banks, historically that's been associated with a recession, a sort of pending recession. so we do think it's still reasonable, monetary policy is tight, it's still reasonable to think that you probably will gate recession and again, in order for inflation, i think, to move back all the way to target, you probably do need to see more

unemployment rate increases. >> your views about recession are not, i would say, uncommon on the street. i've seen some other strategists say they're, for example, trimming corporate credit, moving some over to government bonds in the back half but you still like the high-quality stuff, right? >> yeah. i mean, so overall, you know, the market -- the bond market adjustment for high-quality real rates, government bond yields, high-quality credit, that adjustment has already happened. because central banks needed to get financial conditions tight but again, monetary policy works through lags, and the real economy adjustment hasn't happened yet and usually when we get that real economy adjustment, ie a recession, lower-quality credit as well as equities don't the end to do that well. so at pimco, we like building our portfolios with an eye towards resilience we do think government bonds and higher-quality credit do provide great starting yields at this point, and we think the diversification benefit of those

asset classes is going to come back, as we move into the back half of the year and the economy and inflation slow >> good to get an update on the house view, where you are, tiffany, especially given the importance of today's number it's great to see you, thanks. tiffany wilding. >> speaking of inflation, one area that's finally starting to see a drop is hotel prices but lower room rates aren't leading to lower stock prices. seeing a lot of 52-week highs here seema mody here with the details. so some relief in hotels that's good for consumers. >> yeah, i think what you're seeing is a reality check, sarah and carl, for the entire industry their prices are falling, but at a moderate pace. one of the biggest decliners we saw in the june inflation report, airfares down 8.1%, with more americans traveling outside of the u.s the average cost of a domestic airfare ticket has fallen to $26 #

$264 $ $264 that's according to hopper the cost to check into a hotel has dropped sharply in places like san francisco also seeing prices decline in miami, maui, san diego, according to co-star however, there are markets like new york that remain red hot ppt occupancy now at 86%, versus the 83% that we were versus this time last year if prices cool even further, that could present a change for the hotel operators that have been sharply increasing daily rates. one of the reasons these stocks have outperformed. it's a similar story for the home industry rate air dna now expecting average daily rates to grow just 2.1% this year versus the 5.7% rate last year, as consumers become more cost conscious. oppenheimer, analysts there say the pivot back to cities is pressuring home rental operators that don't have as much inventory in urban locations so that's going to be a challenge going forward. one of the beneficiaries of cheaper airline tickets

according to analysts we spoke to this morning are the cruise lines. you know, you speak to the ceos of a number of these companies, they will tell you this has been a key headwind for the broader sector however, given the run-up we have seen in these stocks, morgan stanley among others writing that valuation wise, these stocks are due for a breather and you're seeing some of that play out today >> we've talked a lot about the cruise lines and how they've been pretty disciplined on inventory. i guess hotels, too, in terms of adding new capacity. i just hasn't happened, kind of like the airlines. >> dealing with higher rates, the higher cost of capital has put more pressure on hotel developers they're being more strategic about where they're adding new properties and for the cruise lines as well, even though there's this exceptional, impressive rebound that we have seen in bookings, in order to order a cruise ship, that takes two to three years. you're talking about ordering a cruise ship back in 2020 when the entire sector was shut down? i mean, it took a lot of confidence to do that. that's why they were very conservative with their bets, and one of the reasons why capacity may be constrained over

the next two years, carl >> and why it will be harder ultimately to fight inflation all the way down in the sector >> yeah. >> right >> for sure. >> if it's a supply problem, they have pricing power. >> exactly although we have to watch the prices across the sector car prices are down 20% compared to this time last year airfare is down. and that really helps the cost-conscious cruise customer, that for the longest time hasn't been able to get down to miami, because it's cost too much to bring their family of five that's something to keep in mind, as well. >> seema, thank. seema mody the house financial services committee holding a hearing today on esg policy and financial regulation ranking member of the committee maxine waters joins us on the other side of this break to discuss. plus, check, out shares of nvidia moving higher today, adding to a nearly 200% run, just this year the company is now in talks to be an anchor investor in arms popp ipo, which as you know, could happen as soon as september. stay with us

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it is esg month for the house financial services committee. republicans kicking off the first of six hearings today, focused on deterring companies from prioritizing environmental and social goals over investor returns. our next guest plans to fight

back by introducing pro-esg bills of her own joining us now is california congresswoman and house financial services committee ranking member, maxine waters. welcome back, congresswoman. thank you for joining us >> delighted to be with you. thank you. >> esg has become a dirty word for corporate america. it's gotten so politicized >> it certainly has gotten politicized. and it's unfortunate because it's inevitable that everyone is going to have to participate in dealing with the environmental crisis, social activity, and of course, corporate governance and so, even if these attempts to deny or to delay are taking place in the final analysis, we are going to have to have esg. so, yes, we're paying a lot of attention to it. we're going to fight back dpens these attempts to deny, destroy

the whole idea of environmental, social, and governance, but we have to do it in order to save this planet. >> so what do you have in mind what sort of legislation >> we're developing legislation, and one of the things i have in mind is transparency we have some companies who are, you know, doing their own type of data collection and analysis and we want to see what kind of things they're coming up with. we have the data, the third parties that is being developed and we want to have access to that and we want corporate america to have access to that. so that they could use this data to make good decisions with. >> congresswoman, i wonder, how much is it competing with bank regulation, tiktok, ai, the pga,

liv, how crowded is the calendar right now? >> well, everything competes with everything, yes we have a lot of issues that we are dealing with, and that's always true in financial services everything that you have identified, you know, including, you know, artificial intelligence, cryptocurrency, housing, all of that are issues that we have to deal with. and we cannot say that what is so important that we can't deal with all the other issues. we have to step up to the plate and deal with these important issues that are facing our country. >> are you talking about the s.e.c. disclosures, the fact that -- no disclosure rules, what the s.e.c. wants to do to have companies give detailed data on greenhouse gas emissions and that sort of thing >> well, here's what we know and we must understand some companies are legitimately

asking, what's more important, environmental or corporate governance, et cetera. it's okay, they need some guidelines, and i think those are being worked out so all of that is important, to answer the questions of, you know, our corporations, about how, how much, et cetera, et cetera and we're developing all of that s.e.c. has a responsibility in all of this. >> the states do, too. and they've gotten involved, as well some of the states cutting off certain companies or making it illegal for them to ban fossil fuels, for instance. how do you work around that? >> well, one of the things we don't want, we don't want a race to the bottom. we don't want to ave, you know states with so many different ways by which they're doing the evaluation, the data collection, et cetera, et cetera and that's why the s.e.c. is important to have this kind of guidance

>> the other thing that's interesting to me is that in a lot of the states where policies like this have been criticized, they're dealing with very immediate environmental emergencies. you're seeing insurers leave the florida market, states like texas in these rolling energy crises i just wonder why that's not having more of an effect on the dialogue, within more of the state itself >> well, i'm not so sure about the leadership of the states that you're referring to however, you're absolutely right. these crises are taking place. it's inevitable that the people will have to ensure that their leadership is dealing with some of the most important issues of our time that's identified by esg. and so, many of them are environmental. i come from a state where the fires are age, the wildfire have taken off. we are watching floods in different parts of the country, and of course, there are other

parts of the country where this particular summer will be the hottest summer in the history of this country the temperatures are going to soar so these are real issues >> so, congresswoman, companies that we've talked to, they're not talking about esg anymore, they're talking about ai and i am curious how focused you are within the committee and just within congress in general on figuring out what to do to regulate it. >> yeah. they have to talk about both is it not that one is more important than the other ai is real and it's going to have a significant impact on our country, the way information is shared, what's available to people in a short period of time, all of that is extraordinarily important, and yes yes, we're looking at that, we're dealing with that, and we're trying to make sure that we have artificial intelligence if it's inevitable, that works in a way that does not in any

way undermine, you know, real credibility and the truth about information. >> you think we could see something from congress this year calendar year 2023 >> it's possible it's certainly possible. >> because it feels like there's an urgency here. it's moving very quickly >> well, you know, artificial intelligence has emerged very quickly. as a matter of fact, it's in use now and we did not expect it, absolutely, to be in use as quickly as it has become available to the public. but because of that, yes, we have to step up our game and make sure we're on top of it >> congresswoman, thank you very much for joining us today. >> well, thank you very much >> thanks. when we come back, can lvmh take on rolex. we'll talk about that, next. plus, check out shares of gm

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ask your local veterans affairs office how you can help. the more you know. european markets set to close in just a market, surging today off the back of that lighter-than-expected inflation data here in the u.s the euro surging on bets that the fed will be closer to the end than the ecb in terms of hiking rates but our story abroad is lvmh and its plans to take on rolex robert frank, of course, has that story for us. robert >> good morning, sarah you know them from formula one tagheuer opening a new flagship boutique in new york city today. the plan is to more than double their u.s. boutiques to more than 50 in the next three years. it's all part of lvmh's plan to be the leader in every single luxury category. its jewelry and watch division

growing 11% in the first quarter with nearly $3 billion of sales. frederick arnault, the ceo of tagheuer and the son of bernard arnault says demand for new watches remains strong tagheuer has waiting lists of over 18 months for some models but prices for a lot of the pre-owned collectible watches, especially from rolex and others, they have fallen by more than 20% in recent months. >> after covid, there was a very strong growth acceleration, especially in watches. and also, we saw a huge surge in the secondhand market, due also to speculation with many resale prices that were increasing a lot. and this has changed in the past six to eight months, where the secondhand market now has normalized again >> tagheuer getting a huge boost right now in their partnership from the top of the one team, and with ryan gosling, who was sporting a pink tagheuer in the new "barbie" movie

lvmh will report its second quarter results later this month. >> it's almost like i'm the cmo of tagheuer who partners with red bull racing and "barbie. couldn't be better and in the sweet spot. robert, lvmh is disrupting a lot of things, beyond the core categories i keep hearing about their hotel business, they're moving to luxury hotels, and how that's a threat for some of the other hotel companies that are actually looking at the chevel blanks and taking cues from them >> they are the largest retailer in the world, surpassing walmart by market cap. and you look at every single category, whether it's tiffany and doubling the sale since they acquired that business, as you mentioned, growing into travel wine and spirits buying a vineyard in california they're just relentless in going after every category and spending whatever it takes to dominate >> it's interesting, too, robert normally in the old days when we

talked about luxury sales, a lot of it was sort of pinned to cross-atlantic or cross-pacific international tourism, which many would argue was still hobbled right now. i just wonder what the picture would look like if and when that returns in full force. >> it's a great question that's what investors are betting on with the stock. it's up 40% over the past year a lot of that bet was on the chinese reopening, and specifically chinese tourists coming back to europe and spending not only in china, as they have been, but also in europe we haven't seen quite the level that people had expected, but it's early in the summer and that is the big expectation, not just in europe, but when will they come back to the u.s. and start buying as well >> huge implications for obviously new york city business and commerce, too. robert, thanks with so many angles on a great story. robert frank >> it's $2,100, the red bull racing tag watch that's a lot but competitive with rolex >> yeah. for back-to-school >> exit actly. let's get a news update with

kate ruooney. >> fbi director christopher wray begins his testimony on capitol hill this morning. he's facing questions from republican members of the house judiciary committee over claims federal law enforcement agencies have been weaponized against conservatives. wray, who led the bureau since august of 2017, has defended the fbi as non-partisan and this morning, the white house accused republicans of attacking federal law enforcement for political purposes illinois state police say at least three people died and 14 others were hurt when an overnight greyhound bus crash on interstate 70. according to police, the bus hit three commercial vehicles that were parked on an exit ramp, just before 2:00 a.m. this morning. and new research suggests humans reached north and south america earlier than we thought. scientists came up with a theory after analyzing pendants made of boney material from extinct giant sloths the pendants show evidence of humans carving into them those date back several thousand

years before scientists originally thought people arrived here in the americas v sarah, back to you >> i love learning those discoveries. thanks, kate quick programming note as we head to break. don't miss kate rooney's ai roundtable today at 2:00 p.m. eastern on cnbc pro. also, a look at shares of tjx today moving higher. luke capital hopes to buy. i think the target on tjx goes from 75 to 95. we'll break down that call next.

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reports on inflation hitting bac back-to-school spending. some of the notes grabbing our attention this morning courtney reagan is here with the latest you've been following this thread >> while the rate of overall inflation is falling, it does remain a major pain point for back-to-school shoppers, because the cost of school supplies is up 24% in the last two years back-to-school spending is expected to fall 10% compared to last year according to a new survey by deloitte that's the first drop year over year in a decade and most parents say they'll spend less on back-to-school because of their own reduced disposable income. three quarters say it's because of higher prices, up sharply from those who said that last year, and a third of parents say their financial situation has worsened since last year and 51% are looking ahead to the broader economy and saying,

that's going to weaken overall in the next six months back-to-school spending on clothing could take the biggest hit with spending expected to fall 14% technology spend to drop 13% some of that to be sure is going to be redirected to cover the now more expensive school supplies however, retailers have the opportunity to capture more sales. the vast majority will shop at mass merchants, walmart, target, those fall into the category followed by online retailers like damazon a third price say they'll buy like t.j. maxx and dollar general. the current amazon prime event is expected to capture some pretty good back-to-school share. its survey showed 40% of its shoppers plan to shop online and this month marks the top month for back-to-school shopping and buy now pay later orders were up 20% across all u.s. online retail sales on tuesday, kpard to the first day of amazon prime's event last year.

possibly, this is an indication that shoppers need a little bit more time to pay for the purchases than they did last year maybe because prices are higher and things are tighter at home back to you guys >> it's a really interesting report, court. shoppers starting earlier, paying with cash >> yeah. >> and they say prioritizing in store, which i wonder, you know, "the journal" or somebody did a piece this week about free shipping may have peaked >> free shipping and returns i think there's also some shoppers that just believe that they actually have higher prices or higher prices online, thus better prices in store, which i find pretty ascinating, becaus price transparency is so easy to compare online nowadays. i like that bold point, 77% of parents say they'll pay with cash or debit cards, which really surprised me. >> especially on a week where we did get some consumer credit courtney, thanks that will get interesting in the next few weeks that's our courtney reagan thinking about the consumer.

our next guest is pretty pobulls value. raising ross price target. joining us here, post nine, to break down her call is luke capital managing director. great to have you back, laura. welcome. what did you find in july for some of these checks >> i could almost see in realtime the supply chain healing, meaning brands are much better, not just better than the last few years, but tjx is carrying the kind of trendy brands that i haven't seen there since way pre-covid. also the closeouts are back, so the skin care brands are awesome. they've got a few -- i saw a cool schwinn bike in the front of a store, but also in the value brands, too, the rosses, the burlingtons, their selling price points $10 and in some cases lower than that of good brands, especially pack to school >> and that's why you argue that tjx in particular has room to raise some prices? >> tjx is about the only one who has room to raise price. whereas ross and burlington

target a customer earning $50,000 or less, tjx is around $75,000. so they'll promote price points at $40, whereas at ross or burlington, you'll see them tap out at $12 or $13. >> is it their gain, other retailers' loss, the fact that you're seeing trendier stuff at t.j. maxx. does that mean that the specialty stores and the department stores are hurting? >> they have those brands, too, but they can't match the prices. and what i'm seeing that's key is in-season products. this is not stuff that was stored in warehouses it will hurt department stores, but it also has the potential to take a little bit out of mass, because the price points and the brands, if i can pay the same thing for my kids to have a nike t-shirt as opposed to a walmart no-label, why not do it? >> one of the things in this deloitte back-to-school report is the way in which the consumer doesn't have real -- a great view of the labor market in the

next six months, right >> that's right. which once again, you want to be a value retailer you want to be at retailers that sort of scream value and all of these guys have taken for granted in the past that people went there for value. but i'm seeing them advertising price points more in the front of the store >> i think it was also notable that you put in the research notes that you looked at the "barbie" assortment. is that a catalyst for sales >> i think it makes a difference, but also easy to check. i'm checking the same exact skus from retailer to retailer. ross has great and the lowest prices on barbies, cl which it'a fun month to be checking that. if parents are there for back-to-school, why not pick up a barbie for 5 bucks >> what about traffic in these places >> traffic is good, which is a little bit surprising. i think there's a shift away from goods and towards services. i think that points to off-price getting a bigger share of the wallet as opposed to the wallet growing.

>> we had been talking about, for example, levi is great example, where they said, you know, our business to consumers who make more than 100k, for example, is holding in, but we can't get some of the wholesale pass-through what's happening there why do you think there's such a split? >> it's interesting. levi's in particular has tried to take their price points up and up and up. and i just don't see them in these off-price stores and i see them at higher price points i think they've tried to control their wholesale distribution, too. which can hurt the presence of the brand and the growth of the brand. >> the other thing was the last couple of weeks, concerns about student loans. but what a sort of strange story it is that the lion's share of those who have those loans are upper income consumers, right? >> right it's not going to help, but it may help offprice. >> i know you like them because their value plays right now. typically, what happens during recessions how much do they benefit that versus other stores?

how discretionary do they prove to be? >> so last year was a very bad year for ross and burlington, but tjx held up well with that upper middle income consumer typically, in a recession, their sales will be weaker, too. of all offprice, but they'll just do a lot better than everyone else. investors tend to flock to these stocks as a flight to safety, and tend to start with tjx >> are you watching gasoline as a tailwind now and the possibility that it becomes a headwind >> absolutely. i cover costco, too, and they reported gasoline prices at their pumps down 24% year over year that will help those july sales of back to school, but we've got our eye on it, you bet >> that's been remarkable, the year-on-year drop. thanks for coming in speaking of retail, can't leave out amazon early data showing prime-day sales yesterday drove the single biggest ecommerce day so far this year. more details on that story,

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we are about two hours into trading. we're off the highs of the session, but a nice rally.

post-to-post with bob pisani for a look at what's moving. bob? >> still up and off of the highs, 44.67 on the s&p. would be enough for a new closing high remember, we use closing highs that's what matter and at that level, that is it. we're seeing a broadening out of the rally. what does that mean here finally seeing regional banks, which have been very, very choppy since friday. comerica was $42 a week ago, now $48. it was $68 back in march before the banking crisis, but this is a slow move up and it's been pretty consistent throughout the week if anybody benefited from the banking crisis, it was jpmorgan, which is going to be reporting on friday. here it is, this is a new 52-week high for that. and generally banking stocks tend to sell off going into earnings season. certainly a good science that jpmorgan is holding up more broadening out of the rally. you want to look at cyclicals, material stocks, energy stocks, commodity stocks that be very, very fits and starts with these groups

freeport, my favorite commodity stock to watch this is the best week we've had in a while it's been up four days in a row right now. i don't think it's an enormous break out, but at least a trend is clearly to the upside again, we're looking for a little bit of sign one thing you're not seeing at all is defensive names they're not breaking out so consumer staples names. kimberly clark is a good example, going nowhere you don't really want to see big defensive names break out like this when you are trying to deal with a soft landing. you want to see more cyclical moves, so i'm not terribly surprised. it's the same thing, by the way, with most of the health care sector they're not doing anything now, there are some specific reasons for this united health will be reporting, they could close at a 52-week low, potentially, right now. obviously, they're out of favor, so defensive group, a little bit out of favor there have been reports of very heavy utilization in the health care system by people post-covid so that's weighing on this group overall. particularly the sector, the

sub-sector of health care, that united health is in right now. so right now, still on track for a new 52-week high in the s&p. guys, back to you. >> up 1.6% on the s&p so far this week. bob, thank you amazon prime day continues today. we'll discuss the impact with the former target vice chair, gerry storch we'll be right back. - i got the cabin for three days. it's gonna be sweet!

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early prime data looking positive for amazon. consumer spending $6.4 billion on the first day that's up above 6% from last year and driving the single biggest ecommerce day so far in 2023, all of that according to adobe joining us for a read on prime day and the consumer more broadly, gerry storch. what does prime day say about broader consumer do you read into these numbers >> i think prime day will be good up double digits amazon has put a lot into it they want to show they can show a gain and other retailers have piled on the question is whether prime day is going to be good. it's going to be good. $13 billion, $14 billion worth of sales and if you think about that, that's almost as much as a retailer like nordstrom's or gap or kohl's does in the entire

year that will just be prime day. but having said that, how much of that is pulling sales forward from later in the year that's what we really want to know and some of it have been deferring sales. so the event will be successful. what it will say about the rest of the holiday shopping season we don't know yet. >> that's what i'm wondering what does it say about the state of the consumer, which you've. kind of bearish on the con conventional wisdom is the consumer have been very resilient. >> i hear that a lot, consumer is strong. but when you look at what you're spending is inflation, inflation, inflated dollars, if you will when you look at purchases of things, retail sales of goods, they're actually down when your inflation adjusted, and they have been for something like 10 or 11 straight months. we'll see what the numbers come out on retail sales from the census bureau next week. but they've been down for a long time then they say, oh, they've been shifting to services we all hear that

there's no doubt there's an increase in airlines and hospitality. then there are chinks in that armor. st stories about occupancy rates being down in florida. meanwhile, the much bigger increase in services is coming from purchases that are not discretionary. so there's a lot of health care expenditures, some of some of tt deferred from the covid pandemic a big increase in housing costs, too. other service spending by the healthy consumers spent on necessities while they're putting less on goods. i think the consumer is feeling stretched which is why you see good response to sale events like amazon prime, why i'm a big believer in walmart or costco, those are great places for consumers to go in times like these. >> they're spending on taylor swift tickets and beyonce tickets and travel and hotels and cruises, as seema was telling us

it's just the priorities are certainly a little different jerry, my question is on you went through the inflation baskets. apparel has held steady. 0.3% gain in june from may which is what it was last month. demand was falling hard, wouldn't we see lower prices >> retailershave tried to cut back on inventory. they got stuck and are being very careful they don't have to discount yet. we'll see what happens in the holiday season if sales aren't as strong as they think it should be. better times for the commodities that go into apparel apparel sales are not doing well, just like electronic sales are not doing well it's true that travel and entertainment are up where you see is there a pentup demand, people going strong after that

after that, it's starting to slow down. year over year increases, we're in the single year category. we had been in the double digit category for a very long time. you hear stories that don't quite hold up to the fact that will keep rising into the sky. you think hospitality, airlines, it's not very big when you compare it to health care or housing costs. >> it does maker wonder, jerry, when you have real wages on several quarters now what they do with the extra buying power >> that's really good, one of the great pieces of news tote was real wages, but it is starting to see some gains there. credit card balances are at significant highs. and then we're lookingality overhangs in the fall, things like student loans, et cetera.

i'm not sure they have this flush with cash situation. i think they're still very stressed >> everything you said, if the fed is listening at this moment, they have to be like, yeah, go, jerry, go. >> well, that's what they've been trying to do. i said from the beginning using one tool, interest rate increase, to deal with significant increase in government spending, with supply chain disruption, part of the employment issue people -- older people over 55 still haven't gone to work in the same numbers. labor shortages overall. the only tool the fed has is interest rates >> jerry, thank you. good to get your take. we appreciate it wall street buzzing about the new deal domino's has with

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the dow has lost some of the morning's gains but on pace for about the best day in a month. major index positive for july. mike santoli is back with us watching some of the action and watching whether the bulls hang on to this >> it has been a sturdy month. the s&p 500 tried to use 4,400 as a floor it has acted okay. now you are seeing a cooldown in industrials, a big leadership group coming into today. they're underperforming. you have a moment where we got what we wanted out of the inflation number it seems the burden of proof is on people who feel as if inflation will be a problem, at the same time recession is right out in front of us those two things seem less likely now the question is what the market has gotten to at this stage. you see 4,500. we visited it today. seasonals start to not be as friendly in mid-july

we bottomed on a really bad inflation number in october. it's time to take them off >> the other moments rallied this year, it's coming alongside a big drop in yields and in the u.s. that are. both moving in the right direction for stocks as the soft landing scenario gets more profitable >> the fed is just about done if not already done that's the tone of market today for sure >> goldman saying the used car dynamic is probably the beginning of something for a while. that's why they're reiterating july will be the last. >> and that's why yields are doing what they're doing it's this idea we have now down side momentum in inflation again, the question is what's the market already sorted out in terms of prices at this level.

>> it was all about inflation, but i do think now it becomes a little bit more about jobs. >> pace of growth. >> and about credit. growth and credit because if all of that is doing fine as it has been that might tip the fed. >> it's no doubt they feel they have that ability to move and why they're not going to give an all clear. >> mike santoli. let's get a check on what's buzzing this morning look at shares of domino's up around 10% on this news that the company has a new deal with uber allowing customers to order from domino's menu through uber eats and post mates the partnership starting this fall before expanding by year end. the ceo saying the chain is looking to generate new sales in this partnership

i think the move is sort of interesting and bernstein in a trading note this morning threw some cold water on it. it could deliver itself by door dash >> they've held out for a while but it does add to the bull narrative. we'll see if the gains hold. frank holland in for the judge i am frank holland in for the judge scott wapner front and center, stocks climbing on that cooler than expected cpi report. stocks are rallying on the back of that data with the s&p 500 and the nasdaq both hitting 52-week highs. we'll debate the road ahead for the markets and what today's inflation read could mean with the investment committee joining me jim lebenthal, liz young, joe terranova and rob sechan first, a check of the markets very quickly the nasdaq and s&p hitting 52-week highs.