it's thursday, july 13th "squawk box" starts right now. good morning welcome to "squawk box" here on cnbc live from the nasdaq market site in times square. i'm kelly evans alongside joe kernen >> that's barbie pink. >> mac gave me a pink earpiece >> where do you find that? >> u.s. equities this hour dow implied open 55. muted open look at that

s s&p could open 15 points higher. >> tom lee's 98. close. it's thursday. he's got 26 points to go >> that's a guts y call to say in a week >> 100 points. not a huge percentage gain it was significant which was coming from no one on the street forecast no one thought we would be at 4,400. >> in my affinity for t-bill yields i give tom lee a lot of credit because -- >> you are still sitting there watching your -- >> you should see me last friday after the jobs report. the 3% and 4% are looking good. >> you must be wealthy most people are investing $10,000. you are talking about a $500

payoff after a year. >> i have never been able to get a guarantee. guaranteed 5%. >> buy some calls next time someone says 100 points. why? ten points out on the money. >> options my brain. >> all right you can lead a horse to water. it is not like you are retiring next year. 23 or something. >> my inner old lady markets were moving sharply higher nasdaq and saep &pclosed highest since 2022 it goes back to the cpi report the drop in bond yields and the dollar hitting the lowest level since april of 2022. reflecting the taper the fed hike expectations are not tapered that much. july or september.

treasury yields with the 10-year treasury over 4% last week and it was -- we're at 3.81% 4.65% on the 2-year treasury >> that is pretty good immediately trading higher getting a bit of a bump first thing in the morning up 2%. organic revenue growth second consecutive quarter of the organic revenue growth better than the 9% consensus for organic revenuie growth analysts put a composite tog together for that. net revenue was2$22 billion.

earnings per share up 15%. core growth profit margin up 15%. can you say price hikes? yeah you felt it. you've been there. you have people. you have been scanning at king's or shop rite >> really whole foods. >> whole paycheck >> worse my husband is reading a book of unprocessed foods. >> i love salmonella >> i'm not going to talk to hugh about this >> are you mad about hugh?

he probably didn't know you would be on the show >> you think he will not come on >> you didn't get anything yesterday? >> did you >> yes it's less than $50 we are not allowed to accept more than that we got new products. blt flavored potato chips. warning against. no, no these are new flavors. what was that? have you tried that cuban sandwich flavor? a buffalo chicken lay's potato chip with 65% fat. >> i look at warren buffett and he and charlie are up with coke and going back strong. >> i'm back on coke. regular. full strength. >> the only way they pack so

much sugar in is coke is bitter. >> coke is so good we know about sweetener. is there a sweetener that is -- go one coke a day. >> it's a glucose thing. >> why go with the -- is there a color for oppenheimer? barbie is better disney's board voted to extend bob iger's contract to the end of 2026. it aids -- it adds two years to the term he wants to ensure the company is strong when the successor takes the helm david faber will speak with bob iger at 8:00 a.m >> i was kidding about iger.

that was self serving. have you been on one of these things you have to do it yourself what is that called? >> the climber >> i don't know. he does it for 40 minutes. i can do it for -- my guy tells me i need to do it and i am start weeping. i'm on for 45 seconds. 75 he will be 75 when he is done. i think he is 72. >> is the age thing relevant here >> i don't know. have you watched what happened in washington? >> 80 is the new 70. >> not all 80 year olds are created equal. >> especially with bob iger. it is not about his age. this is a question of fit. is he the right person is he the right person to lead the company? he needs a couple of years to figure it out.

>> being in my mid to early late 50s. whatever you want to say we can go forever. look at shatner. he has done "the anmazing race. we. >> -- >> we talked to the head of the cruise line the other day. he went across the amazon. >> you are a tenth of the way through your life. the ftc is not giving up on the fight for microsoft to close the $69 billion deal of activision-blizzard. it has nothing to do with the wall street journal. lena khan is taking on media

none of this i'm doing will work it gets static if you don't try. you lose cases because you're wrong. the courts will decide you're wrong. why throw it up against the wall because you can? >> tons of analysis of this being the wrong move and set us back five or ten years. >> if you want to take it to the enth degree and in the eu is more than that any merger is bad. it can end up losing jobs. there are rationalization of operations over there, it is not about keeping prices low for consumers of consumers. it is keeping the economy on a solid footing. you can block all mergers which is what they are doing >> through observation of daily

life, i don't understand the process -- i thought you were swatting a gnat earlier. you got him? >> no. >> i think there is a lot to say when we make sure the status quo is never the way you like it markets are dynamic for a reason they are searching for a reason. they tend to monopolies and get disrupted. >> if you were a business and the regime and you see what happens two years from now then i won't be able to after that they might try to reverse what i've done. it is not a good way to do things >> i agree >> there is no visibility. >> the microsoft activision deal is interesting because of what it could setoff. >> i cannot figure out it is not in microsoft's

interest not to have "call of duty" on multiple platforms. they have ability. >> i don't care about it one way or the other it is odd to me. we can't harm consumers. this is what i was talking to steve about. >> you have four kids under the age of five? >> we may do mario kart. >> you have to park them with a controller they just killed the story it is your fault. >> which one >> we talked all about it. the ftc story. did we mention it? >> perfectly on time coming up, a look at what investors should be watching ahead of the busy earnings season sarat will join us

not because of pepsi we will dig through the quarter with hugh johnston shortly keep it here you are watching "squawk box" on cnbc >> announcer: this cnbc program is sponsored by ibm. ibm. let's create go on... well, what if you partner with ibm and red hat, use a hybrid cloud solution to connect data across clouds, then analyze all that data with watson. okay, but this needs to meet our... security standards? yup. compliance standards? mm-hmm. so they get the insights they need... yup. in real time... check. ...to make quick decisions? check. aaaand check. that's the solution ibm and a global bank created. what will you create? ibm. let's create. you got this. let's go. gobble gobble. i've seen bigger legs on a turkey! rude. who are you? i'm an investor in a fund that helps advance innovative sports tech like this smart fitness mirror.

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we moved out of the city so our little sophie investment objectives, risks, charges, expenses could appreciate nature. but then he got us t-mobile home internet. i was just trying to improve our signal, so some of the trees had to go. i might've taken it a step too far. (chainsaw revs) (tree crashes)

(chainsaw continues) (daughter screams) let's pretend for a second that you didn't let down your entire family. what would that reality look like? well i guess i would've gotten us xfinity... and we'd have a better view. do you need mulch? what, we have a ton of mulch. earnings season kicking off this week. we heard from pepsi this

morning. delta expected to report this hour tomorrow, the banks will start lining up to report with jpmorgan chase first out of the gate let's see what we should expect from the corporate report. joining us now is sarat sethi. portfolio manager at dcla and a cnbc contributor do you watch in the mornings, sarat? >> i do. >> tom lee was bullish on the october lows and bullish at the beginning of the week. do you ever get evnvious and pound the table in calling for a new bull market? you are still cautious are you saying now there is no reason to get excited 20% later? >> i'm saying there are opportunities out there. just don't get too excited about the seven stocks running and caused the run-up. there were opportunities with companies like pepsi and delta

is a legal ireally good one. there are a lot of companies trading below market multiples and haven't given them credit with the post-covid run-up you have to be careful you don't chase or get too innvolved in companies not too diversified. >> okay. you never will be a tops down guy, i guess, right? would you ever go out on a limb? are there times you say to people don't invest or times you say buy with both hands and not where you are talking about individual opportunities do you ever make market calls like that or is that not something dcla does? >> we look at macro in terms of where we think the opportunity is today today, tomorrow p down, the mar good if you look at market and

commodities, there is opportunity. we dive stock specific and look at opportunities this is trading six times earnings or gm trading at seven timesside. macro side >> is there a recession, sarat that is a macro problem. >> yeah. i think, you know, if we get one, it will be a technical rece recession. you have demand going forward. services are still strong. goods are coming down. you could see that, but the opportunity will be in the market most probably we will know in

the recession after had it you are seeing it commercial real estate. the costcos of the world and other companies are calling for a slowdown which companies will be productive which will raise prices and keep them you saw pepsi. we will see what happens on the docket. >> we will have hugh johnston. pepsi raised prices. i'm getting fewer doritos or something. >> one is commodities. aluminum and steel how is that impacting them and input prices agriculture. that is coming down. is that helping them you couple that with prices increased and how do you maintain going forward if the answer is yes to all of those, they will make more money in the next two or three years joe, you know the packets are getting smaller. they are better in how they

ship you are getting the efficiency from the companies those are the companies i would call in. >> fascinating to watch. the coke's approach versus pepsi. you know, even i understand salty snacks and drinks. >> yeah. you knew that all along? >> remember when they thought it wasn't a good idea >> right >> they are getting the bottling distributors it is better to have blt flavored doritos thank you, sarat >> thank you >> let me know >> it's a barbie world we're just living in it. merchandise promoting the movie is exploding with 100 licensing partners now selling barbie merchandise. the movie is about to open tonight or this weekend. more on the strategy next. "squawk box" will be right back.

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there has been a barbie blitz in the retail world as the movie gets close to the box office debut re courtney reagan is here with more >> kelly, this is a big deal pink, perky. everywhere impossible to be scrolling social media without barbie with the move release mattel has over 1 00 licensing partners selling headquarters. much is not for kids the gap and pink plastic heels

and barbie crocs and rugs and more the toymaker and those selling the pink products are cashing in on the nostalgia and adults. according to analysis, searches for martini glasses up 90900% barbie accessories for adults on amazon increased 400% month over month. revenue for the ken accessories is up 600% compared to the month prior. barbie birthday set revenue is up it is one-third of sales f for mattel it is shy of the '90s sales. the 2016 revamped that launched the size and skin tone and physical ability helped the

brand. if the movie doesn't increase sales of the famous malibu r re rer res resident, it lays the blueprint for the strategy to generate new revenue streams for other property they have other films in the pipeline and hoping to see similar success. it may be hard to top the mania around barbie. >> we were talking about superhero movie exhaustion >> here is the thing, could it be the start >> anybody can play with barbies. boys can play with barbies, too. it skews more toward girls this is the first real movie with a feminine touch. >> how long is it? >> i don't know. i haven't seen it yet. >> i need to know what's going

on do you know anything about the plot >> i don't know. >> is ken involved >> ken is involved. >> are they together >> ken is involved i understand barbie has an existential crisis living in the barbie world i think she tries to go into the new world. they poke fun at mattel executive executives >> how about the china thing the map in the back of the scene? vietnam is not showing the movie? >> i didn't know that part >> i didn't hear that. >> i don't know. it was planned or got in there by accident. >> i like courtney's pink. >> mine is not quite right. >> pinkier pink. >> i never played with barbie. >> i was all-in. i had a barbie house at my parents i could sit in

i used fabric scraps for rugs. it was a whole thing >> we need to come over. >> "squawk box" will be right back in astruc . megawatts of power, rails and open road, and essential services of every kind. all running on countless invisible networks, making it a prime target for cyberattacks. but the same ai-powered security that protects all of google also defends the systems running america's infrastructure. for these services. for the 336 million of us living here. ♪ i was told my small business wouldn't qualify for an erc tax refund. you should get a second opinion from innovation refunds at no upfront cost. sometimes you need a second opinion. all these walls gotta go! ah ah ah! i'd love a second opinion. take the first step to see if your small business qualifies.

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delta airlines just reported quarterly results of stock is up. the number is good is ed bastian smiling? >> he has not walked into the operations center yet. as soon as he gets here, joe >> i think he is smiling probably give us the numbers, phil. >> let's explain why ed would be smiling. this is the beat on the top and bottom line. well better than expected. a couple of weeks ago, they raised guidance at 225 to 250 a share. 268 against 240 estimate revenue up 19% at $14.6 billion. the street was at $14.5 billion. operating margin is 17.1%. free cash flow of $1.1 billion revenue per set mile 1.3% compared to the second

quarter of last year you get jet fuel costs which say help to the bottom line. dropping 34% compared to the same quarter last year let's talk about the q3 guidance this is new from delta coming in at 220 to 250 for the third quarter. that is the expectation. the street is at 207 we will see if they change revenue expected to grow 11% to 14% in the quarter revenue per seat mile expected to be down to 4% finally, 2023 guidance, they are raising it couple of weeks ago, they expected the high end of $5 a share. they expect it to be between $6 and $7 a share they are reiterating the free cash flow of $3 billion. expect to pay down $4 billion of debt lots to discuss with ed bastian. when we talk with him next hour,

joe, we will see if he is smiling. >> he is smiling right there >> better than expected. >> and when your stock is at a new high 52-week new high >> they won. they won they are the best. they are the premier airline in the country. best to travel on. if everyone could afford it, they would do it all the time. the stock is up 15 days in a row. they are the only one who didn't raise equity in the pandemic in incredible >> growing up in cincinnati, my dad said delta was the best. they lost their way for a while. mckenzie guy tried to run it >> joe, if you go back in the history of airlines, there is a period with all airlines where they lose their way and then the management comes in and leaders get back on the right path they have been knocking it out of the park for some time. these numbers are an indication for the business plan and the

execution that they are doing here in atlanta. >> i just looked at that, phil, 2019 right before the market of 2020 where everything hit the fan low 60s. >> yeah. ed bastian says they will get back there >> you blink and it was 25 62 to 25. >> buffett buying the airline. they abandoned it and they came back. >> after he came back from swearing off because of u.s. scare -- u.s. air back in the old day. where is it? south america now? >> yeah. >> good to get rid of that name. want wait for that, phil you know, set yourself up at the door as he is walking in snap a shot to see if he came in with that smile. the joker type smile

all right. thank you. >> other airlines see it that way. coming up, another hollywood strike is looming as talks collapse with the actors and studios. the latest on that next. and ftc chair lena khan is set to testify today we talk to jim jordan about that next to the "squawk box on your favorite podcast app and listen any time we're back in a second >> announcer: currency check is sponsored by interactive brokers. the best informed brokers choose interactive brokers.

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i was told my small business wouldn't qualify for an erc tax refund. you should get a second opinion from innovation refunds at no upfront cost. sometimes you need a second opinion. all these walls gotta go! ah ah ah! i'd love a second opinion. take the first step to see if your small business qualifies.

welcome back u.s. equities are up 15 on the dow. we need 26 to hit the 100 points we did that early monday morning in the 6:00 hour with tom lee. he said we wiould get there wit a cooler cpi number. it was a good call i said do not do that. do not start making short-term calls. you know what he thinks of bitcoin. >> i remember at 100,000. >> at 4,000, he said 20.

it went back to 20 now he is saying 100 or 250. it has been a few years. you have $500 at the end of the year you pay the tax on it. >> exactly elon musk starting a new business venture announcing the creation of x-a.i. an artificial intelligence company aimed at understanding, in their words, the true nature of the universe. musk had long planned to build a rival to chatgpt despite the warnings and dangers of a.i. and calling for a pause in the race. the team at the company features alumni of deep mind, open a.i. musk will share more information in twitter spaces chat that will be tomorrow. >> i find this uninteresting it gives me a chance to ask you

if you are a threads user. >> did you see my conversation i love the new twitter i love everything. i know there are bad things in the world. you need to -- >> i don't get threads at all. i tried it >> you go on some woke >> it is not woke. >> you see what zuckerberg did with facebook and we saw the original twitter the government asks for nine things to happen he didn't question what the government said. >> you have to respect the free speech stuff >> zuckerberg? >> yes that big speech at georgetown of free speech. >> talk is cheap. >> here is my point. >> do you like the old twitter when you couldn't read babylon or read wuhan conspiracy >> that is why engagement is falling. i don't think that is a real

disruptor for someone like me maybe it is for someone in news. to take the people i follow on instagram, i follow it like a read a magazine. translate that to text >> 100 million you could do with your eyes closed because of the people on instagram. is it like i was never on club the house. >> i trade it for a day or two >> i don't have problems with twitter and i don't have a blue checkmark. maybe it is me >> i find it essential for productivity so far, nothing for threads. la la land may be going dark actors are looking to join the picket line after the negotiations collapsed last night. this would give a blow to

hollywood with the television on hold is this a big deal >> i don't care about the late night writers. i would care if there was no new content. what's going on? >> how big of a deal is this >> this is not a good thing. this is bad for the industry if you think about it, kelly, the recovery after covid the industry was reeling all production stopped for a pretty extended period of time you are just starting to get the box office down 20% to 25% compared to pre-pandemic times we are just starting to recover and now double whammy. basically everything in hollywood is shutting down other than reality tv. that will be the only thing produced even foreign production. any foreign production that has a s.a.g. member in it won't be

able to produce. this is just a very problematic development for hollywood. this is not what the industry needed yes, some of the ceos are talking about p how this will help the free cash flow in the short-term that is short sided. >> probably help netflix make the quarter. when is the last time we had something this broad and far reaching we know we had the writers strike 10 or 15 years ago which was big. when was the last time something in this nature >> you have not had two strikes in 63 years. >> wow >> rich, the moment passed for writers and actors, i think. no, i just mean there was a time when streaming was going to go on forever and someone yesterday said you are getting money thrown in your face at one point. >> i disagree, joe >> what about a.i.

a.i. doesn't impact writers? is this a great time saying i'm important when you don't know if streaming will be the boom you thought it was or you don't know if computers are taking your job. this is not a buyers' market in real estate. this is a sellers' market. the studios are in the driver's seat, represeich. >> jeff bezos says never lean away from the future the future will win. when you think of the disruption which is coming, is it problematic for writers? the bottom line is writers, the change in the business from the typical syndication and lineal television with 22 episodes and five seasons the business has changed so fundamentally. the writers have real gripes the studios would admit the writers compensation needs to change screen actors, look, to your point, this is a boom.

this is never better than the last four or five years. you can worry about a.i., but -- >> what about david sazlov they don't have cost concerns? this is the time to start asking for the moon as an actor >> what was the last time you saw every single media company cutting jobs thousands. disney cut 7,000 jobs this year. >> that's my point why do you disagree? >> i don't disagree these companies are troubled what i meant is i think all of these guilds have real issues of the t-- issues. they have changed from the way it was done. there is no bonus on netflix when something does well on netflix, how do you calculate your bonus for good performance

on thnetflix or max or peacock? the business has changed >> what do the actors want >> they want a bonus tied to streaming performance. honestly, kelly, i don't know what does that mean? >> if we had better metrics, the box office you do $150 million on a weekend. is that how it works with the traditional box office >> yes, but think about streaming. is it because you stay longer and don't cancel or a lot of people watch i can say "squid games" was a massive success. what is the dollar contribution to netflix nobody can tell you that it would be guaranteed up front. >> if the movies are moving from theater platforms to streaming, it seems the actors want the same bonus from the box office

days in the new platform >> that is why it is hard to argue. their complaints are real. i don't think there is a studio kpe executive. if you have david and bob right now, they would not disagree saying the compensation for the guilds needs to change with the technological world evolved. that said, i don't think going out on strike, to joe's point, these businesses are facing real fundamental changes in profitability. >> we went from the best of times to the worst of times in how we thought about content we thought the gravy train would go forever and need all of the con content. then reality hit now it is like not the great time to go on strike i would have asked for more money when we thought it would be endless content production. >> in many ways, that is why bob iger is staying longer

turning around disney. he came back, he left at the best of times, joe you think about sort of the exit he had in early 2020 after the incredible 2019. you look at disney right now everything that can go wrong is going wrong. he agreed to stay for another two years as we expected because it is so hard. this business is undergoing so many pressures what would you do? joe, if i gave youes esespn, h you fix it what is the easy solve for the espn business model fixed? >> i wouldn't be paying -- i would not have 300 talent and a lot of live sports i might be broadcasting pickleball live. >> you are a big pickleballer? >> i don't like it it reminds me of "caddyshack."

>> my mom is a huge pi pickleballer everyone i know. >> honey, i'm hot today. >> kelly, i will say threads so far is downright boring. you are 100% right it is just boring. it doesn't do anything it's boring. >> get off it. i'm not on it. >> we are doing due diligence. >> we will be right back it says blank. that's my life we'll be right back.

welcome back, everybody. leslie picker is here with us on set. you kind of have a little bit of

the barbie pink going on >> barbie purple or -- oh, maybe i'm oppenheimer. i don't know >> both. >> don't forget, "mission impossible," the biggest movie star -- >> you can be tom cruise, joe. >> i love tom cruise i think he's a little -- i think he has a couple of screws loose, but i think he's the biggest movie star. >> very talented he's not your guest, but you have someone very special. >> he's not my guest, but i do have someone else very special texas capital launching banch's first etf focused on the state's economy, texas capital texas equity, headquartered in the lone star state. it currently has $10 million under management it is designed to reflect the performance of the texas economy. joining us now for an exclusive interview is a long time jpmorgan executive and president and ceo of texas capital rob holmes the index has traded companies, weights determined by sector and

relative contribution to texas' reported gdp and market cap. what is the use case for incorporating a texas oriented etf in someone's portfolio what is the gap that this is looking to olve? >> good morning, leslie. good to see you again. well, look, it is a way for -- it is a super exciting morning, the first of its kind etf ever txs, on the new york stock exchange what it allows everybody to do is invest in one of the most vibrant economies in the world so the texas economy, $2.4 trillion gdp, ninth largest in the world, number one exporter for 21 years, $458 billion last year, second largest work force, the youngest workforce, the economy in the fourth quarter last year grew at a 14.8%. and the rest of the country grew at 2.6%. so, and for the year was 7% last year so, it is outsized growth, a

very diverse economy now in texas. oil and gas is only 9% so, that's very different than years past you have one of the fastest growing, most diversified economies in the world and now everybody in the world has a chance to invest in it and what it also does is attract -- >> texas fell out of the top five in america's top states for business here on cnbc for the first time, you know, in a while. >> yeah, i saw that. and i appreciate the survey. i respect it i haven't really studied the questions, but just factually those are the facts. today, if it is fallen out of the top five, if you talk to the economic development team, the governor's office, they're currently talking to two times the number of companies to move to texas, to live, work and invest here in our economy and our state. so, i appreciate your survey, but factually, the net migration to texas is number one job growth, 650,000 jobs last year no other state has done that

so, while the survey says one thing, the facts say something totally different. >> senator ted cruz is really mad at us. he tweeted -- >> did he? >> he could only come on at 8:00, he called it a bunch of woke left -- a bunch of woke lefties that put -- there was a lot of inclusion mattered, and reproductive rights mattered >> alaska was at the bottom. >> i don't know. >> if you had to pick an etf for one state in the country, what state -- i might pick texas. >> i would pick texas. i think texas is a pretty good place to do business i think florida is a pretty good place to -- a lot of people moving there no income tax. >> is the new jersey etf next, rob? >> actually -- look, i commuted to new york for over 30 years, i love the whole tristate region and area but the growth and the vibrancy of the texas economy is

incredible and the net migration, the talent moving here, not just numbers, it is talent. we built the first full service financial services firm over the last two years headquartered in the state of texas a full salesman trading floor. guess where that talent came from and investment bank, and in one year that investment bank's profitable and the first institutional sales and trading floor built in texas is profitable we're really excited about not just the numbers, but the talent and the quality of jobs as well. we have more fortune 500 companies -- >> and you got victor. the spurs. >> yeah. >> basketball. >> basketball. sports round. >> i got it. >> antonio work with my, rob. >> we'll see you back at -- >> i'm here all week >> thank you, rob. appreciate it. coming up, a big two hours of "squawk box" is still ahead we're going to have pspei co.,

the ceo hugh johnston, he knows all about the economy. and how about ed bastian from delta, we'll talk about what's going on in the economy. changin. ♪

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good morning pepsi quarterly results are out. and we're going to talk salty snacks, soft drinks, the state of the consumer, inflation, all those things with the company's cfo. and then delta, the first of the majors to report the airlines ceo ed bastian will join us live to talk about the quarter and summer travel demand and a rough start with the weather, at least on the east coast. and stock futures rising after the s&p closed at its highest level in over a year this morning, more inflation data that could shape today's session and what you need to know ahead of that the second hour -- that guy is smiling. he's happy second hour of "squawk box" begins right now good morning and welcome

back to "squawk box" here on cnbc live from the nasdaq market site in times square i'm joe kernen along with kelly evans. >> good morning. >> thanks for getting up not like you have anything else to do. >> listen, my daughter passed out at 7:30 last night i feel like a new person. >> that's good congratulations. u.s. equity -- two and two perfect family so far. but you're not, you know -- five or six more, i think u.s. equity futures -- but that really -- >> perfection at home, let me tell you >> all under 5. >> and no one's screaming. >> except for -- >> me and everybody else >> u.s. equity futures at this hour, look at the nasdaq i don't know up 103 points. is that going to be up 40% before half of wall street finally says maybe we're not going to hit the october lows? think any of these guys we have on -- guys and gals -- >> how far are we from the s&p

target >> what are we looking at? we need 11 more to get 100. >> by friday. >> i think people are giving -- it was a good call a good call. like we said, 100 points isn't a lot, crazy to make that call it is just 100 on top of what people thought was absolutely the top end of the range for the rest of the -- people had 4400 targets for the end of the year. we still may hit, that still may be the target at the end of the year. >> don't make me say it. we don't know what's going to happen in the back half. december could be very different. i don't know if i believe -- >> right now these are supposed to be a headwind, what we see. it is the beginning of -- we'll talk about earnings, a couple of big companies to talk about it >> yeah. and dom chu has a look at how things are shaking up premarket. >> i'm doing pretty good with two kids and neither of them got to bed before 8:30 i'm a little worse for wear this morning. anyway, we're going to start with one of the big earnings mover of the morning delta airlines taking off, forgive the pun, nearly 3% now,

nearly 4%. it reported beats on both profits and revenues it gave more upbeat current quarter guidance than estimates and boosted full year forecast as well. so delta was helped along by amongst other things still robust travel demand for both leisure and business and cheaper fuel costs i know as joe mentioned, you'll be chatting much more about this in a few moments with delta ceo ed bastian on a first on cnbc interview here on "squawk box. stay tuned for that. and speaking of ceos, we got disney shares higher by around 1.5% on 35,000 shares of volume, thereabouts. helped along by news that the media and theme park giants board of directors extended ceo bob iger's contract by another two years through the year 2026. iger said if there was still more work to be done, he wants to ensure disney is strongly positioned when his successor takes the helm of course, we'll hear more on that front next hour, when bob iger sits down for an exclusive interview with our own david

faber from the sidelines of the alan and co. conference in sun valley, idaho. another big ceo to watch for we'll cap things off with an analyst call getting some attention, coinbase shares down a percent or so, 100,000 shares of volume being dragged down by analysts at barclays they cut to an underweight rating while boosting the target price to 70 bucks. it was $61, because the shares are $85. they cited things like the continued regulatory headwinds and overhang on crypto and the recent run-up in the stock we have seen over the last couple of months here coinbase shares, they don't see a lot of near term catalyst to drive the stock higher a little bit of a mea culpa downgrade. >> do you like coinbase as much as bitcoin >> look at that. you're in your silly t-bill that has gone from 50 to 84 in a week and a half kelly sleeps with the light on she can't think of any stocks that might -- we're not allowed

to buy stocks. so that -- okay. >> what is the -- >> all right. >> here's what i would say, kelly, don't sleep with the lights on. it messes with your vision >> it does >> there has been studies about nearsightedness being linked to people sleeping with, like, night lights on and things like that >> is that what it is linked to? i've been told it is linked to -- >> there is hereditary stuff obviously, but -- >> okay. >> i'm nearsighted i don't know i have to wear glasses and contact lenses >> let's go. we have to go. pepsico out with quarterly results short time ago the company reported adjusted $2.09a share, beating the estimate revenue rose 10.4% to $22.32 billion, driven by strong snack demand, raise the sales outlook for the year for more on the numbers and first on cnbc interview, let's bring in hugh johnston, vice chairman and chief financial officer of pepsico, serves on our cnbc global cfo council.

i was going to start -- good to see you, hugh. thank you for the -- >> hi, joe good to see you. >> you never forget me thank you. but, i was going to start with -- it reminds me of when banks, interest rates go up, they love raising the prime, they never cut the prime you probably were able to raise some prices, now inflation is coming down. are you sticking with the price increases? is that helping the results? but then i looked at your organic revenue growth and it doesn't seem to be based on necessarily on just higher prices i mean, you're up on selling more units, i think. >> yeah, that's right. and good morning, joe and kelly. listen, our pricing was up, but at the same time, our commodity costs are still up one thing to keep in mind is commodities for us, we forward buy by nine months it takes a while for lower costs to work its way in so i think what is most encouraging to us is the growth was very strong and very, very

broad-based. our north american business grew 11, our international business grew 15, beverages grew 11, snacks grew 15, so, certainly a good top line story. but maybe even more encouraging is the strong margin improvement and as i mentioned, our pricing and our commodities were basically in line with each other in terms of the rate increase all the productivity investments that we have been making over the last couple of years are really starting to pay off now i think you're going to see a pivot for us toward more margin improvement as those productivity programs not only pay out this year, but pay out over the next five to seven years. >> could you -- you would -- if prices come down, will you take back any of the increases, hugh? have you ever done -- has a company ever done that in history? if you do see commodity prices come down, would you add any chips back to the bag? >> we added chips back to the bag in the past plenty of times. it is not so much a question of

that >> not good for me. >> well, joe, we need you. by the way, we would like to work on your beverage choice as well i like the fact you drink cola i think you're drinking the wrong one. you might want to come over to the blue team. we got a better product. >> i'm drinking the high test now. i used to think you're wasting calories to do that. but i don't know, the sweeteners don't taste as good now. are any of them totally safe i'm back to thinking i like the sugar -- is sugar natural? >> we think the hot -- yeah, the high test product is great the low calorie and zero calorie products are great but back to your question, keep in mind, commodities for us right now, we don't think they're actually going to be going down in price, we think the rate of inflation is going to be reducing but we don't see the basket of commodities going negative anytime soon we're going to continue to need to take pricing, just probably not at the levels we have seen in the recent past and that's why we're doing more of this pivot to productivity, to drive margins through productivity and we have been pretty successful at it

>> that's a really good point, hugh the -- when politicians take credit for inflation being much lower, the prices are just rising -- this rise we have seen for the past two and a half years, those are still there it is just now they're only growing 3% so prices, will they ever really -- i don't ever see them coming down to where they were. >> i would be surprised, frankly. and our plans assume we're going to continue to see inflation, just lower rate of inflation >> yeah. makes it -- tell me, just explain to me the investments you've made into productivity and how that helps it is on the call side of things in terms of labor, in terms of logistics, in terms of how you stock shelves? how does that work >> you got it. it is actually all of those things i put it into three big buckets. number one is automation especially given the challenges,

just with getting labor in the u.s., we have been investing more and more in automation. and it is making our -- the labor that we have more productive and obviously that lowers costs there is a capital cost up front. we have incurred those capital costs. now we're getting the benefit of all that the second one is making the company much more digital. by virtue of doing that, you get more done with the same or fewer numbers of office workers and you make your people more productive and more insightful as well. and then the last one is we got a global business services operation where we're standardizing a lot of ways we do work inside the company and as a result of that standardization, we can do it more quickly, more efficiently and at lower cost. all of that stuff is driving real margin improvement in the company and i think that's something that is going to sustain for some period of time. >> hugh, real quickly, kelly here, it does look like your snacks business has some incredible momentum right now. looking at analyst notes, they're talking about sales up 13.5%. industry publications are saying it is lay's, doritos, cheetos,

ruffles, double digit percentage growth here. where most are trading to private label, why the dramatic acceleration what is that all about, why these brands what is going on here? >> yeah, i think it is a combination of a couple of things, kelly. number one, we continue to expand distribution. while we may feel like we're everywhere, we're not. we have lots of opportunities to continue to grow number two, as people start to do more outside the home, whether it is for us convenience stores, restaurants, colleges and universities, and offices, as people go back, we tend to have a stronger business there than most of the other food and beverage companies, just by virtue of the reits we have in our system and as a result, that is sort of a tailwind for the frito lay business as well it is the investments we made in innovation sorry we missed you this morning, kelly we got joe with the new products the blt lay's and --

>> you got to send a couple. she's got -- >> they eat all that stuff are you kidding? anything, yeah. >> we love to get them to you. and, remember, these are great simple luxuries. where as when consumers are feeling stressed and may -- they cut back on personal technology, and cars this is the affordable luxury you can have as a result of that, they're doing -- and frankly they like the products what is a potato chip. it is potato, salt and oil what is a frito, corn, salt and oil. these are real food, delicious. >> you're right. and i'm -- i'm not going to feel guilty not even cauliflower chips, kal chips, you're never going to perfect them for me. >> we want you drinking a pepsi instead of the other product. >> i've always been kind of -- i'll try i'll try mountain dew, i like what a jolt. but some of those have like 300

calories, hugh some of the -- >> that is like the biggest diet mountain dew fan of all time >> hugh johnston, thank you. send him your address. >> thanks. great to be with you, guys. >> send it here. >> we'll share >> thank you, hugh. coming up, delta shares up sharplin ty he premarket ed bastian on the latest quarter and summer demand. before we leave, a check on the markets. we'll be right back. you've been a real rock star. rock star? cnbc's cfo council is brought you to by workday, the finance and hr system for a changing world eather? my shoes are leather. where's the unnecessary zippers? that thing! billy, rock star is just how doug feels when he uses workday. thanks, rory. i'll show you rock star! be a finance and hr rock star. workday. for a changing world. billy idol just stole your golf cart! the two most important things in golf

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welcome back to "squawk box. check out delta, which reported results earlier today. the stock rising 3% at last check premarket. phil lebeau has a special guest. hi, phil >> kelly, it is up about 3% because they beat on the top and bottom line. ed bastian, reason to smile today. >> reason to smile especially for joe. >> yeah. joe, as if he neat needs any mo fuel let's talk about q2, you raised your guidance and now you report earnings that are even better than your raised guidance. what changed over the last couple of weeks? >> the momentum has continued to build and as we got into the holiday period, we wanted to make certain that we saw that demand strength continuing we got a little bit of break on fuel prices, but we closed q2, the team did an amazing job

delivering the best revenues in our company's history, the best profits in our company's history, all through the second quarter. i know you ran through the numbers earlier. so i always like to remind myself how good a job our team is doing the important thing, phil, is the focus that our team has had on running the best operation, the most reliable, strongest operation we can, especially now during the summer period and summer's tough summer travel is difficult at all times. but when you think about the fourth of july holiday, this team delivered over 21,000 flights for our customers. so hats off to them. they're the reason why the stock is doing well, the revenues are at an all time high and i could not be more proud of the people here. >> we're at the operations center, the heart beat for delta airlines we had a weird summer. every summer is weird. we have storms pop up, we had one yesterday in chicago that forced a lot of cancellations. are you confident we're going to

be able to overall airlines in the u.s. manage this summer better than last summer? >> we are. clearly we are last summer, a stat i used with the board recently, last memorial day when things started to pop, a year ago, the airline had over 800 cancellations through that long weekend. this memorial day holiday weekend, we had eight. so, the airline is doing a fabulous job and the people are doing -- i think the important thing for our industry is that we stay within our capabilities. we know weather's coming we may not know when or where exactly, but there are pretty good pathways an we also know where the constraints are within air traffic control. as long as we respect those constraints, remember last quarter we were talking about delta proactively pulled its schedule down this summer by 3% to give us some breathing space with that, and we're able to recover a lot quicker than some of the other guys did. >> you're out with q3 guidance what do you expect after labor day, historically where

travel -- the seasonality comes in and it slows down a little bit. are you expecting that >> we'll see some seasonality as kids go back to school, especially in the southeast. i think the international business is going to continue. what we can tell stayed really strong, will be a long summer. you're going to be flying the summer schedule longer and hotter than anything we have flown, so september, october, great times to go to europe. i think the corporate demand for travel is going to start to pick up a bit more. we're hearing now from corporate travel managers as offices are starting to return back their employees, companies are starting to mandate they get back to the office that's the real driver >> the driver is people getting back to the office. >> it is not the people are afraid to fly or corporates are using virtual. it is that the offices aren't open as the offices continue to open, we'll see some steady improvement there. and this new hybrid work pattern that we see, that's not going away so potentially any weekend could be a long weekend, i think

you'll -- you put it all together, we'll see some of the seasonal patterns reappear, it is going to be a strong q4, no question about it. >> one of the drivers for your revenues, which are up 19%, year over year, is the growth of premium. we talked about this before. you're continuing to add more premium seats in your fleet. where is that cutoff where is the point where you're, like, we want to add more, but there is a limit >> we're early innings in my opinion, early to midinnings i think for the next five years, as long as the crystal ball i can give you, we'll see that continued build in premium it is what is driving this industry forward, it is what is separating the majors from some of the discount carriers we see the growth in premium on delta, the other airlines. we have been at it for a decade and we're ahead of the game. we're going to continue to stay ahead of the game as a result of that. >> you're an investor, you have a relationship with clear. you probably heard these

complaints around the country. i go to certain airports, the line for clear is longer than tsa precheck it is a balance. they have to work with the tsa have you had any conversations with them about some of the complaints and some of the airports had >> absolutely. they're on it. they understand that at delta we also introduced our own biometrics, scan right here in atlanta, detroit, some other markets, we're growing, we're building it. it is the fastest way to get through the airport if you're a delta customer got to be one of our sky miles members. if you get registered with delta, that's the best way to go we need through security to take advantage of every square inch of real estate we have clear is one access point and we're working with them, delta biometrics is another great way to do this >> joe has a question for you. >> thanks for coming on, mr. bastian. can i just -- just for my own knowledge, what is your perfect plane? what is the perfect plane right now that -- for all your purposes is it a boeing jet

an airbus? is it -- obviously a hub and spoke model. we're not going to have 500 passenger jets, that was probably not ever going to work trying to board and unboard that thing. what is the perfect plane that is out there right now for fuel efficiency, the right number of passengers, and everything else? what is your favorite plane? >> well, the plane that -- the newest plane we have introduced to the fleet is the airbus 321 nio. it is 25% more fuel efficient than the planes we're retiring, has all the latest technology and the growth that we are seeing in the business we have got 150 of those coming over the next five years we're also big fans of the max, we started taking the max in a couple of years as well. there is great technology. it is one of the things that is not talked about as much in our business is about the fuel efficiency this quarter, one of the reasons why our performance is so much better is that every single passenger, we are 6% more fuel efficient than we were in the

second quarter of '19. so, that's a lot of fuel that we have saved and a lot of energy that we're conserving. and the 321 nio is one of those planes that are doing that >> joe, one more >> yeah. the future of, i don't know, net jets, in light of wheels up and these things you had an alliance there. it is always going to be expensive. you're talking about premium and these great seats. that's in the realm of possibility for most people. is a jet card or wheels up model ever really in the realm of possibility for the masses, ed it is just always going to be a niche, i think how do you view that now given what's been going on >> yeah, i don't know that's going to be in the realm of the masses, joe. it is continuing to grow in fact, throughout the pandemic it was the most popular form of growth in air transport because everyone wanted to, that could afford it, wanted to get a private plane, to stay out of the airports for safety reasons.

but i do think that you're going to continue to see that. >> what is going to happen with wheels up? >> wheels up is -- the team at wheels up is working hard and one of the things that they as many private jet operators work because they saw so much growth during the pandemic, the majors now returned, we pulled some of that traffic off of them and they're having to go through work to kind of get their business model right but i'm confident they will. and penny is a great friend and the team is doing a good job. >> ed, thank you very much ed bastian, ceo of delta airlines on a day where they beat on the top and bottom line, guidance of q3 is above where the consensus is on the street guys, back to you. >> proving themselves to be ahead of the pack. thank you very much. coming up, lina khan in the hot seat today on capitol hill, facing questions about the commission's record of enforcement actions. the congressman running that hearing, jim jordan, will join us shortly and next hour, a very special interview with disney's ceo bob

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now, the answer to today's aflac trivia question. what is the symbol for gold on the periodic table the answer, au the symbol was created from the latin word for aurum >> indeed. still to come, lina khan in the hot seat today in more ways than one the ftc chair is set to face questions from the house judiciary committee on her crusade against big tech and major mergers. jim jordan is our special guest. >>anbo> d b iger can't let disney go. don't miss the exclusive interview with the ceo just ahead on "squawk box." this is cnbc at pgim we can help you rise to the challenges of today, when active investing and disciplined risk management

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ftc chair lina khan is taking on the world's largest tech companies and losing. that is almost a quote from a piece in the journal today on the front page this week a federal judge blocked her bid to halt microsoft's acquisition of activision blizzard. the ftc also failing to thwart

meta's purchase of a virtual reality gamemaker earlier this year meantime, regulators are still fighting amgen's bid to buy horizon. the jetblue spirit merger and cases against amazon are expected in the near future. amid this string of high profile losses, chair khan is set to answer questions for the first time before the house judiciary committee about her crusade against big tech joining us now is ohio congressman jim jordan, chairman of the house judiciary committee. congressman, i'm interested in the questions that you're going to be pursuing, a line of questioning, and it is not really just about big tech we have had people come on and just say that it is just tough to even contemplate any merger in what is going to happen with lina khan at the ftc right now, that business men and women aren't even contemplating doing anything right now what is the goal of this ftc

>> well, who knows, but we do know this, surveys of the staff, when in the final year of the trump administration is like 87% of the staff over there thought their leadership was doing things the right way, doing things in a proper way and now it is down in the 40s. the staff doesn't think things are going right. she's 0 for 4 in cases she's taken to court i think it all stems from this fundamental position that she adopts, she's against the consumer welfare standard, what is she is against is good for customers what is good for the consumer, the standard for 40 plus years in this great country. it is part of what led to this amazing -- the fastest growth in american economy, the greatest economy in human history, and she's against all that because she has this sort of radical left ideology. but, look, i guess she's going to appeal the activision microsoft deal i think that's wrong she got the northern district of california said that was -- her position was wrong as it happened every other time, it seems.

so we'll have questions about that and frankly i think we'll have questions about the attack on twitter. 12 letters in ten weeks' time, supposedly the pretext being this consent decree. it was attacking first amendment free speech and she has written things about her focus on big tech and disinformation. that's a fancy way of saying she's going after certain types of speech. i think trying to put limits on the first amendment. >> well, we -- we almost had a ministry of truth as you know. they thought that was a good idea and it went quite a ways before someone finally said, you know, people have written about this, novels like -- >> already named the director. >> they had. >> they already named a director we actually deposed her because this is crazy, as if some agency -- that was a different agency, but it is the same mindset as if some agency can tell americans what is right and

what's not it seems lina khan has bought into that. crazy ideology. >> let me ask you this, though there is a lot to unpack in all of this. i think anyone would tell you that big tech has a lot of power. and you know on the flip side of what you're talking about, they are able to decide what we see in a lot of ways i don't know whether they're de facto monopolies, just from being so good, or so dominant in some of the positions, isn't there a place maybe for chair khan's stance that maybe if you just sit back and let anything happen, you do get the status quo that could be dangerous. and i think -- i heard people say she's going to take big swings at these things and she knows she might lose but she thinks otherwise, that stasis is not the way to do it if you lose, you lose. >> she's definitely losing

i don't know she's won anything. i don't think it is good for consumer or the country. we can see that in her record. but, we should be going after big tech with their censoring american speech and colluding with big government as the judge, the federal judge, the federal court just said last week, on july 4th of all days, this was going on, our government was pressuring big tech companies to limit what americans see, what they post, what they say, how that gets sent out, how that gets shared, they were doing all that and the judge -- and the court slapped a preliminary injunction and said you got to stop that's where we have to focus. that's the distinction that's why -- republicans, we're all for stopping the speech. she's on the other side of that issue, and at the same time trying to stop any type of business merger going on that would benefit the consumer. >> we also at one point are watching this microsoft activision deal, we saw the uk, the eu, it almost looked as if

regulators in the different parts of the world were actually talking to each other. i guess that's okay. that's not against the law but do you think there is -- do you think they're getting -- all getting on sort of the same page i don't think we want to be -- even the eu gave the go ahead on this that is saying something, isn't it they do -- it is more about having -- it is more about having companies survive than the consumer benefiting. even they -- are we left -- is she left of them >> well, i don't know, probably, but i do know the biden administration and the ftc under lina khan's management, they have allowed a european country to set up an office in california for goodness sake really, that's how it is going to operate now you're letting some foreign country come in and set up an office that is going to regulate american companys? i don't think that makes a lot of sense that's the direction they're going. we have questions about that today in the hearing as well

>> i saw you all over the place yesterday. were you satisfied with director wray's -- with his answers, but did he really answer anything? i don't know if there were any answers? >> no, it's -- it's more of the latter that's typical for the director. and, you know, he couldn't or wouldn't answer all kinds of questions. the biggest takeaway was what we learned about what's happening with americans' data he was asked twice it was interesting, by democrats he was asked, is the fbi purchasing data from data brokers? americans private data, are they purchasing that? he said, i'll have to get back with you, give you a briefing. that's a little troubling. you couple that with the fbi asked financial institutions, bank of america to turn over debit and credit card purchases for a date and geographic location and any purchases of a firearm, that's pretty frightening stuff too. we have that email from fbi to bank of america asking for those things that was one of the big takeaways. >> all right

jim jordan, thanks. >> thank you. >> we'll see you. coming up, jon fn fortt joi us for the on the other hand segment. that's next. later, disney extending bob iger's contract, we'll hear from him live here on "squawk box" beginning around 8:00 a.m. eastern time stay with us also defends thess for everyone who lives here. ♪ there are some things that go better... together. like your workplace benefits... and retirement savings. with voya, considering all your financial choices together... can help you be better prepared for unexpected events. voya. well planned. well invested. well protected.

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welcome back the supreme court just two weeks ago struck down racial preferences in college admissions a tectonic shift that will reverberate across campuses and corporate offices. is the ruling a setback or progress jon fortt is here to weigh in. >> hey, kelly. well, it's a setback i know we're very eager to live in a post racial society where no one sees color and meritocracy rules. we're not there yet. the most likely impact of students fair admissions versus harvard college, we see it in california state schools since affirmative action was banned 25 years ago. lower enrollment of black and hispanic students at the top choices. that's not the worst of it zachary beamer released a study of the downstream effect in 2020 and found black and brown students who didn't get into top tier california schools went to midtier schools where they were

less likely to earn science or engineering degrees. there they displaced other black and brown students who went to lower tier schools where they were less likely to complete a degree at all. in other words, this ruling isn't putting people into environments where they're more likely to succeed, it is peelin peopler's fingers off the ladder of progress. the honest first step is closing the admissions loopholes for country club sports and kids' alumni those preferences don't tend to benefit black and hispanic students and they're still allowed. >> a pretty convincing case. make the case for the admissions policies of selective colleges and whether they affect that many people. >> well, kelly, on the other hand, see why this is progress asian americans and your average state school this affirmative action debate gets framed in black and white, but a lot of asians have been getting a raw deal under the existing system. asian applicants with high grades, test scores, get dinged for an elite admissions for not

being well rounded the most honest measure of whether things have gotten more fair will be how high elite admissions will let asian percentages rise considering nearly 60% of the world's population lives in asia 4.75 billion look it up where does your average state school fit into all of this? even those who have the credentials to go to a more selective school, that's why the culture wars and elite admissions are a red herring here the focus should be on getting more minority students enrolled in colleges, selective or not, where they're likely to complete bachelors degrees with minimal debt that will boost employment rates, you can offer mobility and financial freedom. this supreme court ruling can put our focus back on outcomes, that's progress. >> it is not just college. we got to start early. got to start early and hopefully everybody -- it will never be where everybody gets in based on

merit. i don't think. that's rough to do it that way they would be good to get to that point. >> how do we define merit? >> test scores or, of course, those are skewed >> right. >> what are we testing -- >> i know. >> is merit knowing how to deal with different kinds of people >> we need to improve the educational system across the board. that's what we know. >> early childhood education >> it is troubling, because we have seen places where there isn't -- and it doesn't work you do lose a lot of the advances that we have made in the last however long we had affirmative action other things don't work. other methods don't work then again, if you were to have a perfect society, where everything was based on merit, which is impossible to define, then you see why, i think, how many people think this was a good decision? i think a majority or plurality go along with this decision, right? which is bizarre >> here's how i wish we thought

about it, right? >> by 2028 -- >> in 25 years, yeah. >> i think there is a sense of culturally not of whether the policy itself is right or wrong, but has moment passed. you were going to say -- >> i was going to say, we wish we were looking at this in the full economy as we want to get the most potential out of every individual person. that moves the whole any how do we do that especially in the spots where it is not happening. i got to plug the on the other hand newsletter, you can read this argument, pass it along here is the qr code on the screen sign up for it or get complicated and type in cnbc.com/otoh, and a poll on linkedin, you can weigh in, let me know which side of the arguments you agree with more. results from last topic, can the president turn the economic story to his advantage with bidenomics 38% say yes, 62% say no, that's not going to work. >> we can agree that the alumni

thing is a tough one how do you -- >> probably the least tough one. >> how do you justify that >> yeah, right it's up to -- >> i used to be really against it but in my -- i don't know. >> buster murdoch, criminals down in -- all right, jon, thank you. can't believe you -- you went there. you really did coming up, disney is extending ceo bob iger's contract through 2026 he'll join david faber live from sun valley at the top of the hour get the best of "squawk box" in our daily podcast. i don't see how you can do it. it is all of us. do that on your favorite podcast app and listen anytime stay tuned

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in a little while we'll get another reading on inflation producer prices are out at 8:30. nasdaq up -- i'm going to ask you about that our next guest says the markets are adjusting by mixed messages but why he prefers equities to bonds right now. let's bring in kevin nicholson you prefer stocks to bonds right

now? >> yes >> oh my god >> you know, sometimes up got to switch it up >> got to do it. >> the big thing is that i manage a portfolio that's balanced, and we have been -- woorp neutral for most of the year but one thing that we learned is that when the trend turns positive, equities typically do well and right now -- >> what trend do you mean? >> the 200 day moving average. >> of stocks >> of stocks most people look at the 200 day and they look at the full 200 day but that's not the way we slice hand dice it we take the last 21 days, a month's worth of trading and had it really turns positive, that's when we want to start leaning towards equities and about a month ago it really started to take off. so now we know given the fact that the trend or the s&p has

broken through 4200, we can just kind of sit here if it doesn't move, the trend's going to take off. >> i want to ask you kind of a dumb question. but the reason so -- it makes total sense to me that professional live speaking and what most trader want to do is absolutely identify that trend, jump on it, it's exactly what tom lee was talking about, the momentum but how do i know what's going to happen next after the trend turn positive, it's going to turn again i sort of feel like i'm on a ride i'm going up the roller coaster but i don't know when i'm going down and i can't get my bearings >> don't you have to buy when nobody else wants to buy >> that's exactly right. >> and for october lows, it's taken a year for people to say i like this rally. you finally get on at 4200, you

only got 5 or 10% left and you missed the big 30 on the nasdaq. >> we group it with the trend and we basically created heat maps of probabilities. so we kind of know and can forecast where it's going. it's a three-to-six month type trade. it did help us get off the fence and leaning to overweighting equities >> not many people did it's convenient for us because we know who to invite back on. i think the hardest thing, kevin, is for people that really stayed cautious the entire time, can they ever switch or they got to say i need a 10% pullback before i'm going to be able to get in what if they never switch? >> it's the fomo, the fear of

mitting out. the missing out it's great to be in a money market but the problem that you have is you can have reinvestment risk at some point. with this fed i think that they're going to remain hawkish because they have cover. you have such a strong labor market that as long as people are working, they're going to spend money. we're not a nation of savers, we're a nation of consumes rs i think that is the big thing we have to focus on here. going into this year we thought the terminal rate on fed funds would be 5 1/2 to 5 3/8. we pretty much know they're going to hike at the end of this month. they want to have ammunition in their arsenal that they didn't have two years ago

>> he's here fixed income once we put all our money in one-year notes and a year from now when rates are lower -- >> will you tell her not to buy? >> the kelly plan has worked out terribly you go in at 5%, 4%, you come out of that when that matures. you don't go back into bonds you buy stocks down 20 or 30%. >> you buy stocks at 52 0 00 >> or maybe i'll buy bitcoin >> you wouldn't reinvest in bonds. >> you have to diversify >> you can't buy stocks, though. diversify into bitcoin >> the way we have set our portfolio, it depends on the

time horizon we have invested on the front and invested in credit one to five years because we can get 5% plus and you don't have to worry about the reinvestment risk if you're playing the money market game and you want to, you know, be up in credit quality. don't go chasing just anything you want to have really strong -- >> a lot of people are like that smart. >> kevin, it's good to have you in studio. let's do it again. they're telling me i have to say good-bye but bob iger is going to join david faber when we come back.

good morning get ready. we've been waiting for this, a very special interview disney ceo bob iger sitting down with cnbc the morning after his company announced it goi's goin be keeping him in the driver's sa seat for for two extra years, till 2026. this is a conversation you won't see anywhere else. we await more inflation data and

i'm sure david's got a lot to talk about stay with us as the final hour of "squawk box" begins right now. good morning and welcome back to "squawk box" here on cnbc, live from the nasdaq market site in times square. i'm joe kernen along with kelly evans. we've got a solid start on the market, another triple digit gain on the nasdaq we've been talking a lot about the s&p this week because of that tom lee call but the nasdaq up not 40% yet but it isn't that far. >> the top six names are 50% of the weighting. >> that's true but it's stalled -- i know it's

a magnificent seven, but if you've missed it, you missed it. >> do you think it's too good to be true or are you all in? >> this is the most hated rally in history >> we have breaking news exxon mobil is buying denbury. denbury shareholders will get 4 shares for each share they own premarket they are both fractionally negative. and exxon chairman and ceo says acquiring denbury allows us to grow our low carbon solutions business becky quick is sitting down with darren woods live in sun valley,

idaho. very fascinating deal. a lot to dig into there. >> and disney extending the contract of ceo bob iger through 2026 it interesting when mr. iger gogo the call to come back and it was sort of a relief i wondered at the time -- they needed to start looking right away if it was going to be only two years. this is not a huge surprise, is it, for a guy who is on that stair climber for like 45 minutes and i can't even do it for a minute >> probably not in some ways a huge surprise, joe, but we can ask the gentleman sitting across from me as we are joined by ceo of walt disney in sun valley thank you for being here >> all right, let's start off

with that news joe kernen was asking a couple questions about it as well why are you staying? >> let me start with the fact that i did like retirement i highly recommend it by the way. >> you're never going to get to it, bob. you did it for 11 months and that was it. >> it was a good 11 months and i came back to the company at the request of the board it's a company that i started working at in 1974, 49 years ago when it was abc and we became part of disney, and i obviously have deep passion and the company and the business i care a lot about the people. after coming back, realized that the company was facing a number of challenges. some self-inflicted, some caused by changes in the business, large scale disruption of certain parts of the business. and while a lot of work has been accomplished in the seven or so months that i've been back, the board believed and i agreed with

them, that there was a lot more work to do the timetable we initially established, which was two years, seemed like it was putting undo pressure on us, even owe we're getting at the work very quickly but to accomplish everything we wanted to accomplish. part of it was designed for continued to continued continuity and to give me time to help me through not what only what is a kchallengin period but to help themselves. >> i asked you if two years was a short period of time you said you can get things done very quickly setting the company up for success can happen quickly did something change >> well, we've gotten a lot done quickly. major changes in personnel,

dealing head on with issues. i'm quite pleased with how much we've accomplished in a short period of time but there are a lot of challenges out there and there's just so fast you can go with certain things. some of these businesses are still recovering from covid, for instance, dealing with complexities in terms of continued disruptions, which we'll talk about but i'm pleased with how much we've gotten done but i also know how much we have to get done >> so is it more challenging than you anticipated is the business for challenged than when you returned late last year >> yes it doesn't mean i am any less enthusiast being about the opportunities, nor am i less enthusiastic about the company in fact, it's the opposite i would say in some cases the challenges are greater than i

had anticipated. >> in what way >> we talked a few times about it over the years. i predicted when i was i was head of the company, i made a statement about the future of the multi-channel ecosystem being very pessimistic and that prediction was accurate. i'd say the disruption of that business has happened to a degree that even i was aware that will be reflected in some of our near term results for instance parks and resorts, which is just a tremendous business for us, we're invested significantly and the investments we made are really paying off today shanghai disneyland.

we opened up in california some years back i really believe in the future of that business we actually have opportunities there to turbo charge that growth the studio business, which has been incredibly successful can drive so much of our other business, like parks and resorts. so i'm the president and of course streaming but the studio obviously went through a difficult time with covid, it's coming back. and then of course there's streaming. >> you're going through all the things that we want it talk about in the time that we have here but just to sort of wrap up why you're staying, you said to a memo to employees you've made important and difficult decisions but there's more to accomplish before this transformative work is complete. again, what's transformative here and what is the work that is going to take another perhaps

two years or even more even after you do leave that needs to get done >> the transformative work of course is making sure that our cost structure reflects the economic realities of the business and that includes disruption transformative work is dealing with businesses that are no-growth businesses, particularly the linear business, which we're expansive in our thinking about. clearly it's a business that is going to continue to struggle. >> let's stop there for a second land let me ask you about it we're talking abc network and the cable net wwork as well are you going to look to sell them >> we're just getting at that work but we have to be open minded and objective about the future of those businesses, yes. >> meaning that they're not core to disney? >> that they may not be core to

disney there's clearly creativity and content that is core to disney but the undercore of that business that delivered great profits for years is definitely broken and we have to call it luke itlike it is >> we've been having this conversation for a very long time now it's closer to obsolescence? >> it's eye opening. there's a reality to it that we have to come to grips with and we have to come to grips with that now by the way, another business that really has benefited from in a model is espn but that we're looking at very differently. >> i want to get to espn

you don't know what you're going to do when it comes to these linear businesses but you're open to ideas that would perhaps separate them or change the structure in some way? >> i'll let you speculate. i'm not going to do any speculating now except to say we're very objective about their future as part of our asset base >> all right when we talk about the other business, the cable ecosystem, it is espn what are the expectations there? i assume you've been thinking a lot about it >> i have. >> what is the conclusion in terms of the future of that. a lot of people have been focused of when are you going to take it to a fully streaming opportunity and move it essentially away from the cable ecosystem. is there more you're thinking about? >> let's talk about sports first. obviously that's espn. sports stands very, very tall in terms of its ability to convene millions and millions of people

all at once. there's almost a guarantee that occurs it's an advertiser's dream, it learned itself in many ways in terms of coverage, distribution and consumption. we have a great brand, we've had a great business and we want to stay in that business. that said, we're going to be open minded there, too, not necessarily about spinning espn off but about looking for strategic partners that can either help us with distribution or content but we want to stay in the sports business >> what would it look like for dust contribution for espn >> i'm not going to get too detailed about it but we're bullish about sports in general as a media property. there is an inevitability, by the way, you raised it, in taking espn direct to consumer we haven't said when but we do know it will happen. >> is it sooner than you had thought let's say seven months ago? >> no.

i think i'm much more certain about when but not prepared to say when that is i won't say whether it's sooner or not but i'm enthusiastic about it. >> why are you enthusiastic about it >> because i think sports stands tall in a sea of tremendous choice and is in many respects an advertiser's dream and a consumer's dream, meaning it's a very, very attractive medium and we have a unique position and we feel that we should stay in it. but we'd like to -- >> you're spending more and more money to do that, to keep the nba, to keep the nfl, essentially renting the content that keeps this thing alive. is that the best use of your capitol? >> i know a lot has been set and continue to be profitable from renting it then there's real value at staying in it

we have great relationships with major league baseball and of course the nfl and the nba and it's not just about the live sports coverage of those leagues, those teams, it's also about all the shoulder programming that throws off on espn and what you can do with it in a streaming world as a director of consumer proposition, i talked about it being technology friendly in a way. there's so much more it can be done with. it's interesting just thinking about the apple announcement a few weeks ago and what the possibilities there -- that device lends tofl in terms of sports so i think it's a business that we want to stay in, we're realistic because it has been -- >> but what would be the advantage of having a strategic partner then >> it could be a variety of things >> could it be a joint venture of somebody taking a -- >> somebody has 20% owner --

>> if they come to the table with value, whether it content, whether it distribution value, whether it capital, whether it hopes derisk, if they come to the table with values that enables espn to for direct-to-consumer offing. >> well, you've told the wold now. have you already been looking a at that as an opportunity? >> we've had some conversations but i don't want to elaborate. >> our last interview we talked about hulu and you had a different view of it at that point, which it's now gone back to what we all expected, which is you're most likely going to buy the stake from comcast is this something you're thinking about and you're not sure and when you sit down six months from now you'll go we're

not sure >> i've been focused on understanding all of these businesses, where they are today, where they could go and which businesses are going to throw off the most shareholder values there was this agreement that actually calls for a transaction of their stakes to us sometime in 2024 and i didn't want that to be an automatic i wanted to look at that objectively. i spent a lot of time looking at that as part of the future of our streaming business and ultimately concluded that we would be better off having hulu than not having hulu the plan is for hulu to be available at the end of this calendar year as part of the disney plus. combining them is a major step in that direction.

>> we're jumping around a lot. quickly on hulu, your expectation is you are going to come to an agreement with comcast of the 33% you don't own? >> correct >> comcast wants the valuation to be well before 27 million, correct? >> there's a mechanism to come to the value of it the goal is to do it as quickly as possible. we are going to merge the apps by the end of this year. and the combination of those apps is designed to obviously help the business become profitable obviously -- >> the direct to consumer. >> hulu is a diversified business in terms of its content offering, it's done extremely well in the advertising front. it will help in terms of viewer engagement, the advertising, and

it's the right thing to do as we turn that business into not just a profitable business but a growth business, which i'm confident we can do. >> in the ten minutes we've been sitting here, you're telling me you're considering the idea of linear table networks, perhaps not being a part of disney in the longer turn, you told me you're looking for partner free espn these are pretty significant decisions rights there, bob. this is sort of where you've come in the last seven months of looking at the business or looking at it again with somewhat fresh eyes after having time it decide for 11 months >> absolutely. and it speaks to your question of what is the transformative work you're doing? it's looking very objectively at all of your assets, determining which ones are going to be the business and figuring out a path for espn to be a direct consumer

business and staying in the sports business because we have a very, very unique position, an enviable position in that business and i do believe it can make the transition successfully >> tell me why i'm looking at an nba contract that could double for you and others who participate sports continue to go up can you make it work economically in that mod snel. >> one of the things we're trying to work out now is that when we do it that it is economically viable. i believe it will be but it's a decision that has to be very carefully timed, made and considered and that's why i've talked about possible strategic partnerships >> let me understand that better why would the timing or what would be helpful -- >> woo may want to go at it with

partners >> correct >> who would help you and make it a moreaus about and you get to a number per month, which can equal what espn does now do you. >> you have a general idea >> yes, i have a general idea. it's a huge decision but it's part of the transformative worng that we're doing it's a decision that has to be considerable it's not long term but it's not tomorrow either, it's not immediate. >> these are big things you're talking about. how could you think you could get it all done in two years >> i was unrealistic in that that's part of the reason i'm staying. there is a lot of work to do these are great assets, a lot of these businesses that we're

talking about. you know the world is an interesting, changing world, more dynamic marketplace than i've ever seen in the almost 50 years i've been in the business. i like our hand a lot when you look at these brands and these franchises and this array of businesses i think we are unique in the business but i'm also extremely realistic about the challenges that we're facing. >> let's talk a bit more you mentioned near term challenges some of them seem to be at the box office, bob. there's those who say the content engine is not working as as well as it had in the past and they'll point to elemental, for example, which during our last interview you were very excited about. i'm trying to look here in terms of the numbers it didn't do as well at the box off office i know it's picked up a bit this opening weekend. is there a problem, though, at disney animation has the loss of john lassiter

been a blow you haven't been able to recover from >> first of all, the studio and its movie assets are number one at the global become and there have been some disappointments we could have liked i think in our zeal to basically grow our content significantly to serve our -- mostly our streaming offerings, we ended up taxing our people way beyond in terms of their time and their focus, way beyond where they had been marvel is a great example of that they had not been in the tv in any significant level. they ended up making a number of television series and it diluted focus and attention. that is i think mr of the.

we've talked through the years. there as a timeline, did it suffer during co individual when you were going for the direct consumer >> there were three picksar releases in a row that went direct to streaming, mostly because of covid and i think that may have created an expectation in the audience that they're going to eventually be on streaming and probably quickly and there wasn't an urgency and then i think there was some -- you'd have to agree that there was some creative misses as well i look at -- the company is 100 years old. walt disney went into the animation business starting with shorts in the 1920s and obviously his big first feature was "snow white" in 1937 if you look at his history, there were peaks and there were valleys. every valley was followed by a peak and i studied it very

carefully. it's true in my predecessor michael icer's day, too. and then there's a dip and that we have work to do there. >> did there has been turnover as well, not just john but there's been other turnover, too. that mau have if that the production of biks animation will continue to be strong >> correct >> marvel and star wars, pg. >> yeah, you pull back not just to focus but it's part of our cost connin.

it used to be some of that stuff would go to netflix. now it all just goes to. >> i shouldn't have done that? >> not that you shouldn't have done that. the old model still works pretty well >> it was a blend of basically business models. the licensing model was part of the collection of models i think if we hadn't done it, everyone would be saying why isn't disney going to the streaming business as it turns out, i think we made the right decision to go into that business. it will be a and it will be an important business because that drkt-to-consumer model where you you have a relationship with your consumers, which we lack as a company, except in our parks and resorts business, that will be of call u where you can

deliver host of. >> yes there may be among the thanksgiving we're looking at just in terms of improving the bottom line of the company and basically managing a i'm not going to rule that out >> no. >> about because show the movie in movie theater again hichlt and some of them have been extremely successful. the somebody 2.2 billion for $7 o,000. we're now digital cell through they we put it on disney plus to tremendous results so the model, i blow, that has

been created for us can still be very, very effective >> reporter: and you said you still believe it will be a if the combination of the, wool provide our consumes are with but general entertainment. advertising with are be being%, new sub -- so much is direct-to-consumer advertising you see a huge technology there. also technology will be a mauj factor, including its impact on

advertising and. and you can make multi-we're being much more surge california in how we spend and what we spend it on. so all of these factors, the advertising and conferring with hulu, many use of that will not only become prf frm the last couple kwars dpchl in many ways in that we and taste patrioted we would sign up 4 hl million to 5 million in the furst years of operation. we signed up 10 million in the first 24 hours we got to 100 million faster than anyone had ever ton it pi

par. the business is not even four years old for us, and what i mean by that is we're state police and this is one of the thanks the new leadership team has are the. we were not great. >> knee yes f we were still new at this. >> although you defended the 699 price. you're said you're happy you wept with that low price >> it was my follow because i knew at the time wering if to forecast but then at some point you have it lo

we were all over the place in terms of marketing programs and platforms. we have to get better. we have to get more selective about what markets we invest in. some market are just not going to dlufr the val meaning you turn on disney plus in the earliest days, you got a great picture and great experience there was no hmm das ned flicks is part of their value equation, their rahal u prop suggestion. because we're so new and still getting at this, i think we set a level of expectation in terms of what. by the way, to ourselves and it

the also, that sub sfchl and people got very excited. they were all concerned about were we going to get sun >> and what we we ended f we then leaned into or spent into this soon there if was well head of half of m tufs that we have it take, which is the effect it the marketing model and it the f but where it still spend at a unkrdably eye itself.

>> obviously have you to spend a certain amount to do that but you have to get why. half rafer f of $24678, which came in the form of condition tent manned. in and woof gone through that have, very, forecast f and new we have to look at fch the level of spending rerespectable is in the sustainable. >> speaking of content, we're in the midof a writers strike very lickly it with some to be

ff and the redrive from covid, which is is evening to add to that disrussian. from desire to work on behalf of in based on the value that this flecha very good reflection on the values that contribute to this great business. we want to do the same thing with the writers and the actors. there's what level of expectation that they have that is just not realistic and they are adding to a set of challenges that this business is already facing that is, quite frankly, very disruptive >> so they're not being realistic? >> no, they're not >> why not >> i can't answer that question. again, i respect their right and their desire to get as much as they possibly can for their

people and i come tleet lee respect this and it has been and has been a great which is for all of these people and it will continue to be, even throughs did ptive people >> what did you do in it will have a very damaging tell and there's huge d.a. ka to the tu of different fj it a shame >> bob, amazingly enough, fchg i want to talk about parks in the time that we have left, if we

can. specific to attendance there was an article in "the wall street journal" that seemed to pd kate that people aren't going to disney world at the right that they certainly did a year ago. and your fight with the governor there or his fight with you. is he having an impact, do you think, on attendance, his continued criticism of the company? >> no, no. we see no sign of that at all. the article that you referred to, it was not accurate actually it was measuring attendance at disney world on july 4ths are didn't factor in temperature and humidity that day. florida opened up early and there was a lot of demand because not a places were not open yet

if you like at the 2023 versus 2022 where nothing else was open, there's a lot more competition today. we actually track hotel tax revenue across the state, which is a matter of public record and there are counties in florida down 6, 7% recently. we also know our competitors are discounting in that state. so there are some near term issues in florida that i don't think have anything to do with politics >> and not about pricing either? when it comes to pricing in the parks, you have a great understanding what that can do >> one of the things i addressed as soon as i came back is whether our pricing was right and whether our pricing reflected value. i don't know the last time you visited disney world i say it world disney world lives in its sublime form. it's a very, very popular business and product it's very successful we're in the wringing our hands over it.

there are some near term issues in florida as we talked about. and pricing is not an issue. >> so you're not concerned >> i'm not >> overall about some sort of a significant decline over time? >> not at all. i think you're looking at a comparison to last year and it's very, very different and we do not have long-term concerns about that business. >> what about desantis, who is going to on the husking for theers in year he's made this part of his campaign, attacking disney, saying it's a woke corporation we've embraced the eye of getting the sexual content line that i'm not willing to cross. i quoted desantis there. how do you respond to that in. >> so far what we've said publicly is that we are concerned that he has decided to retaliate against the company for a position the company took on pending legislation in that

state. frankly, the company was within its right, even though i'm not sure it was handled very well, was in its right to speak up on an issue, constitutionally protected right of free speech and to and so we have filed a lawsuit to protect our first amendment rights there and to protect our business frankly the other issues that you reference, look, the last thing that i want for the company we are making products we are proud of in terms of its impact on the world. i joke every once in a while that we're there to manufacture fun. we're there to tell great stories. >> you but can't be happy when there's literally nazis standing out at the front gates of the park >> it was horrifying frankly

it's concerning to me that anyone would encourage a level of intolerance or even hate that freng will you could dangerous action they could be turned into but i don't wael want to engang in the pacifics except to say it not our goal to be involved in a culture war. our goal is to tn to tell we are the preeminent entertainment in the world and we're proud of our track record there the notion that disney isn't sexualizing people is preposterous and inaccurate. >> this is going to keep going on do you ever feel you want to engage in a more strayedent way or do you want to stay where you are? >> we're going to keep doing what we do best and be proud of

what we are doing and be mindful of the environment of course i've said this publicly. we're sensitive to the interests and the needs of the great audiences that we are seeking to attract globally and will continue to do that. >> and finally, ginoets. you're going to wrap this up when you're 81 now what is motivating you you said you liked retirement. i like retirement. >> i'm going to use you

withouting is. >> i'm sorry ale will traffic here in sunvalley. i team, she's not --om not doing this alon. and of the things that motivate me every day it not singular -- >> although none of them are ready to step up and do the job you do there >> i i'd say we have a lot of work to do here, that and it tabs the prsh off. there are so many thanksgiving that we have to do nand i talk about optimism as a imagine quality of a great leader. nobody wants to toll the ps m.

there's lut it end of the tunnel in the most al nachg >> despite what our short term analysis the country issing if to be yoors old are tns 74 that's almost half the company you've been here i. >> i never thought of it that way. oh dear. when you go to work every day and you're working for the walt disney company, what could be bad? >> i always appreciate you taking time and i look forward to sitting down in the future given we've got quite a few more years ago to bob iger ceo of disney >> awesome answered everything you wanted to know david. closing a window on your life. tell bob that shatner right now,

captain kirk is like is zip lining in the amazing race over in europe and he's 92. so you take that back. >> i'll let him know you're right we got a lot of window left, joe. joe wants you to know there's plenty of time william shatner is doing something at 92 years old. >> david's feeling good about himself. >> get it done, man. >> i say it every day. but, hey, that's the human condition and we love it fantastic interview, david >> coming up, another can't-miss interview, becky kquick will joi us live from sun valley where

she'll interview darren woods. don't go anywhere, another big interview. we'll be right back.

welcome back to "squawk

box. we heard from bob iger consumer prices came in cooler than expected, both on the headline and the core numbers. the futures right now have already made their move a little bit i think yesterday, but this just adds, perhaps, to the notion that maybe the fever is breaking to some extent in terms of -- did you see claims they were good 239 i think. no, 237. >> we don't know what good means anymore. good would have been 280 >> single biggest data point in the economy. kelly wins if claims start rising then my whole trade looks genius this continues to move against me so we see the s&p up 18 points now after that >> what do you mean good >> there were only -- >> that's bad. that's my point. that's the world we live in

where when you get a strong labor market, didn't you see what happened last thursday? your little one-year note went up >> on friday i was about to -- was it wednesday or friday the two-year is down 50 basis points in a week jobless claims at 237 is a huge deal >> when i had liesman on two weeks ago and it was 260, i said we're going to remember this was the beginning of something good and that the labor market was cooling. you got to define what you mean by good. >> yeah, this challenges the -- yeah >> let's get to another huge interview now, exxon mobil announcing a new acquisition, buying denbury let's get to becky quick >> hey, joe. hey, kelly

good morning >> good morning. >> good morning, everybody good morning joe, i am here joined this morning by darren wood, who is the chairman and ceo of exxon mobil with this big news you guys have been talking about this morning thanks for being here today. >> good to be with you this morning. >> why did you do this deal? what's it about? >> it's continued excuse of the strategy we've talked about for quite some time and builds on a low carbon business, we're investing billions to reduce emissions, not only our own but third parties. we have three large scale contracts to third parties, companies who are in hard to decarbonize sectors, industrial gas business, this pipeline allows us to continue and accelerate to grow that business, do it at a much lower cost and a lot faster with a very large opportunity to --

>> my eyes have always glazed over i don't think i understood this until maybe yesterday when things started to click. denbury is a pipeline as you mentioned. it's got 1,300 miles of pipeline and something like

opposite optionality as we're pursuing the permitting to store co2, we can use their existing

storage sites and enhanced oil recovery to start sequestering co2 in the short-term, but the value of the deal, the strategic play here is really the assets and the experience of storing co2, taking advantage of that pipeline and infrastructure system in this very industrial corridor, highly co2-intensive industrial corridor to store that co2 >> would you have done this deal without the inflation reduction act? there are some parts of the inflation reduction act that will give you access to the carbon sequestration you get funds for some of this stuff too. would this have made sense without that >> the challenge that we have in this is the industry as a whole and frankly society as a whole is working to establish a brand-new business this is a carbon-reduction business, and there has to be incentives in place to do that that has been lacking. the i.r.a. has provided additional incentives which catalyzes the opportunity to go in and make this acquisition and

do it with a return. it's an important part to get it going, but i would say we, as an industry, and i think society more broadly, have to move from what i would call our government-subsidized investments to market forces, market-driven investments. i think the world is going to achieve its objectives to reduce emissions, we've got to move to a point where the market will pay to reduce those emissions. that's the basis on which we're planning we're working to get that up and started to drive down costs and then transition to a more market-driven business >> would you have paid $4.9 billion for this company? >> we wouldn't have seen the same returns so it would have been more challenged without the i.r.a. for sure. >> what's your relationship with the biden administration you get beat up a little bit exxonmobil is routinely flagged by the president for making more money than god who do you talk to in the administration >> we've engaged -- we've always

engaged with the administration and tried to offer a perspective around our business and the implications of policy on our business and in this space in particular, we've done a lot of work to understand what would be required to expand the solution set to edeuce emissions. wind and solar and electric vehicles are going to play an important part they're necessary but certainly not sufficient we're bringing a much broader suite of solutions here, so we've been very engaged with the biden administration to talk about those other opportunities and the additional technology that is going to be required to meet the ultimate objective, so we speak fairly routinely around what exxonmobil and the industry as a whole can contribute in this space with respect to reducing emissions ca carbon capture, biofuels, all areas we spend talking about >> last year you announced a deal with petra technologies where you guys are going to be dealing with lithium i think you're developing acres in arkansas. lithium is used for ev batteries

and people at the time, when you announced this, said hey, this may signal the eventual end of the internal combustion engine is that how you see it >> what we're looking for is the rickie avenues that we can pursue and bring, a unique set of skills and capabilities to help advance society's objective of reducing emissions. if you look at the lithium opportunities, which we're exploring at this stage, it allows us to use our drilling technologies, our understanding of underground reservoirs, all the subsurface work that we do in our traditional businesses. there's a huge overlap with that capability and skill set and technology with producing lithium from underground sources, and so there's a natural synergy, and we think we bring some advantages to that space to produce low-cost lithium, which is going to be in short supply to meet the battery demand frankly, we have done a lot of work our business is not dependent on automotive transportation or light-duty vehicle transportation, so it's not a threat as we see it.

it's really how can we contribute more fully to the transition people are so anxious to see happen? >> very quickly, when do you think fossil fuels are kind of done in terms of combustion? >> i think the bigger question is, how do we address fossil fuels? there will be certain applications where it will continue to do that by addressing the emissions, which is frankly the source of the problem. we spend a lot less time thinking about the oil and gas and more time about how do we address the emissions associated with that, because if we can address the emissions and maintain the same infrastructure that we have and power generation and industrial complexes, it's a much lower cost to society and a much quicker path to reducing emissions, but i think in the long run, oil and gas will continue to play an important role, but with a lot less emissions. >> we want to thank you for being with us. darren woods is the chairman and ceo of exxon

thank you. joe, back over to you and kelly. >> great, becky. bringing down inflation without making unemployment go to 10%. that would be great if you could do that. get rid of the emissions but keep my 911. can i keep my 911? i'm not going to buy a ferrari if it's electric not that i could afford one. >> i love -- not this -- >> you like the american flag? we like that sweater too that's awesome >> boufl >> thank you, guys thank you. >> final check on the -- see you soon final check on the markets 71 points now on the dow not much has happened since the -- even though the ppi was a little bit softer, let's take a look at the ten-year and we've got, of course, we've got a look at the two-year and the one-year for someone who might go shopping today >> no. >> all right >> it's down half a point. >> take a look at oil after that interview and then i want to thank kelly for being here you got up early do you like how i structured the 8:00 for you you didn't have to do a damn

thing. >> i did a lot of instagram. >> those were great interviews >> very news-making. stay tuned between 1:00 and 3:00 p.m >> you'll be fresh you'll be fresh for 1:00 to 3:00 because we did two hours today i know are we going to owe money? give some money back make sure you join us tomorrow for now, "squawk on the street" is coming up next. ♪ good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer at the new york stock exchange david faber is in sun valley will join us in a moment to talk about that exclusive with disney's bob iger a few moments ago. meantime, stocks power on as yields fall to some one-month lows producer price inflation comes in light, nearly flat year on year, q2 earnings began, pepsi, delta, and more. our road map begins with disney extending iger's contract through 2026