earnings hollywood going dark actors joining writers on strike what it means for the biggest streamers and studios. and the ftc is making another move to block the microsoft activision merger. the latest on the court ruling and appeal it is friday, july 14th, 2023. you know melissa lee could not stay away. "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc live from the nasdaq market site in sometimes square i'm melissa lee happy to be back alongside joe kernen >> i knew you would be back.

>> becky and andrew off today. let's check on the u.s. equities when tom lee was on this week, people thought he was nuts he managed to get it right s&p right now looking to take a breather at the open down by 2. nasdaq giving up 14. dow looking higher by 35 unh is helping on the dow. just reported. better than expected and a raise here the s&p breaching the 4,500 level. highest since april of 2022. four consecutive days of gains treasury market move is absolutely stunning. look at the 2-year treasury at 4.67%. one week ago, we were above 5% >> well. >> the volatility in the bond market is playing out. that is the theme of the year with volatility in the equities. 10-year treasury at 3.793% we will hear from a number of banks reporting this morning

jpmorgan chase and wells fargo and citi >> 4,510 is where the s&p closed it closed last friday at 4,398 tom was on monday morning and at 6:00 a.m tom said 100 points based on the cooler cpi then followed by somewhat cooler ppi. we all thought that it would be a cooler cpi you can't necessarily -- number one, you had to be right about that number two, you had to be right that the market which was already seeing a stretch or out over the skis by a lot of people at 4,400 will say no, we will get another 100. that is another leap to make that and make it definitively. pretty good. >> the other thing that people does not anticipate was the move in bond yields which underpins

the move in equities the move in the 10-year treasury and highlighted the move in the 2-year treasury the last week. just stunning moves. bond markets don't move like this. >> that's a clear call that he was right on there is no way you can say oh, this or that you can't say that he went out on a limb and made that call. he was correct now i'm just thinking. >> he should call in and give us the next move. >> he should now i'm thinking about the bitcoin call at 250,000. >> you think from 30 >> if he is right. >> that's a lot of upside. >> yeah. i got to call someone. no coinbase >> although crypto winter seems to be over back to pre-ftx levels and the ripple ruling yesterday lit a fire across the board. >> xrp it was up.

coinbase >> xrp was up 76%. >> amazing fed governor christopher waller is not convinced by the cooler than expected ed inflatn data and calling for two more hikes. waller noted it fell in 2021 before it shot higher. a 90% chance of a rate hike is estimated next week. they are skeptical the fed will follow through with the second hike at the three remaining meetings this year waller believes the bulk of the tightening last year has passed through the economy. we can do another 25 basis poirn points with our eyes closed. >> they accepted that. >> you go 500 or 550 basis points and you have one left maybe two?

maybe three? none of those things is like three straight 75-basis points did we do that to get to 500 quickly. >> what the heart doesn't accept to remain at that level for six mon months >> the 10-year treasury doesn't accept that. the st. louis fed president jim bullard will step down and leave the bank on august 14th. he will become dean of purdue's business school and no longer play a role in the interest rate decisions for the fed inc, incln this month there is a business school in st. croix or malta university. >> you looked into it?

>> i put my name in the hat for ambassador of malta. i don't think there is a lot to do of th do it is cushy and great weather. manageable small island beautiful architecture old, ancient, nice people. maltese falcons. ftc making another attempt to prevent the microsoft activision-blizzard deal they are temporaryingily blockig the deal before the july 18th deadline overseas, microsoft and activision weighing the sale in the u.s. to appease regulators there and move forward with the

merger >> they said in my ear, take it from letter. no, they said this is me if it it says anchor >> this is your show. >> that's true i don't -- >> i'm just a visitor. >> a journalist. the ftx is investigating if open a.i. is harming people with false information. the agency saying it is looking through the security practices and includes how it trains a.i. models and treats personal data. open a.i. ceo tweeting he is disappointed in the agency request and it is important that the company's technology is safe and the journal has it out for lina khan. losin losing doesn't get her down. they are not thrilled with it of the it almost sounded -- it

rem reminded me of worrying about every little thing you see and something you cannot control which is said about people or things or anything else. you know, as adults, some of us, as adults, we want to see most things and we can make our own decisions on some stuff. do we not want to see -- >> do you regularly block people on twitter >> not any more. i blocked 6,000 in the past. >> on what grounds may i ask >> i want them to know i don't like them. >> yeah. >> now i mute them i don't want to give them the satisfaction i mute theme i see what you write -- mute them i see what you are writing i see it >> my point is a lot of people don't want to see negative things. >> i know. i know this has me he concerned i didn't realize movie studios

and netflix have stuff in the can going out to next year >> not the beneficiary they are all right they have a huge library and pipeline hollywood actors officially heading to the picket lines after failing to reach a deal with studeios and streaming services this means production will immediately halt and actors will not be permitted to promote projects through interviews or panels and upcoming movies and campaigning members of s.a.g.-aftra joined the writers. we with wil s.a.g.-aftra joined the writers. we withl have more on it at the "oppenheimer" premiere murphy and emily blunt walked out when they heard this happened they were at the party they both walked out that's interesting fran drescher, yeah, "the

nanny. >> she's the president. >> i saw her yelling yesterday she's good she's stride nt. >> that means she was a very good actress she convinced you she is "the na nanny. shocking for you to see her in that role. >> i agree i saw her on twitter he is saying they are not -- they don't understand the situation. what's going on? oh, people over there. crazy stuff going on >> it is not chrazy stuff they are standing behind you >> a drug deal oh, we had stuff earlier >> iger. >> iger saying it. thank you. senior moment. iger saying they don't understand the situation yeah, i make $27 million, but there's no way that you can expect to get paid for streaming. there are all these residuals of

the cost pressures ceos do make a lot that's a tough spot to be in i'm not saying he shouldn't, but it does open up certain writers and people that are sort of on the side of the people striking. what are you talking about money isn't that tight when ceos can still make -- an average writer makes $69,000 a year and iger makes $80,000 a day >> it is a tough argument o we heard that argument in other industries the cashier makes x and the ceo makes multiples of that. >> i want to see what is going on out there big morning of futures the dow is up. united health helping there. nasdaq is down s&p is down. check out -- great minds check out the shares of chatgpt

must have done this. united health with stronger profits and raising full-year guidance later, we talk to gary vaynerchuk and talk about everything from threads to a.i you are watching "squawk box" on cnbc >> announcer: this cnbc program is sponsored by truist wealth. where meaningful relationships matter most. there are some things that go better... together. like your workplace benefits... and retirement savings. with voya,

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ripple xrp token soaring yesterday after the judge in new york ruled it is not necessarily a security on its face the news giving hope to crypto investors that other altcoins may not be considered a security after all. it is forcing the s.e.c. to revise tactics on several cases. bitcoin prices and shares of coinbase moved higher on the news ethereum and everything moved on that crypto prices this morning consolidating the higher levels. i saw yesterday at one point at 31,700 on bitcoin. holding 31 so far. >> the move we saw when you see it down 3% now it was a stunning move effectively, the s.e.c. has no standing in governing the coins traded on coinbase

we saw the move in coinbase higher in yesterday's session. coinbase and binance is undercut the s.e.c. would be the regulator which would be seen as a good thing for the industry. >> a lot of the xrp ripple types have been waiting a while. theyvocal. okay we see you we see you yesterday, the s&p and nasdaq closed at the highest level of the year as the focus is shifting from inflation to earnings we have aoifinn devitt with us >> good morning. >> the earnings season had real question marks around it >> we have seen already the earnings have always surprised

on the upside so far this year i would say that same telegraphing is going into effect now and we telegraphed some of the bad news and cost cutting. we are looking at a positive scenario for earnings. this is the recession which barked, but hasn't bitten. we see the resilience of the market and economy of the consumer i would have a positive outlook for earnings fur furthermore, if you look at flows, we see reasonable return of equities and people holding out in money markets they may rue that day as a bit of fomo taking over and flows in the sidelines coming in. >> hopefully they will have the short-term part of the curve which yields a bit more than 5%. what point in the bond market moves over the past week do you think the real alternatives become not a real alalternative?

>> there is a lot of memory of when it was nothing and a drag on the portfolio now you see inflation coming down and the meaningful yields are looking at a net after inflation basis. i think it is a little bit of muscle memory thinking i used to never make money on the bonds and now i can. there is sluggishness moving away from that you have to remember asset allocations tend to be slow and take a long time when they do come, they stick longer i don't see a massive running out of bonds, but optimistic and bottom fishing on the sectors which haven't run up much. >> aoifinn, i know you have a conviction of non-u.s. equities. >> exactly we always had a global approach to investing

n non-u.s. markets lagged for some time we believe it is diversifying the return of the portfolio of the -- portfolio and remembering the dollar could stand a little it is still 8% down on the year. if the dollar is going to weaken, this will be good for the non-dollar currencies. at the end of the day, we do see a lot of growth coming from emerging markets even if it is subdued now. we still have the covid overhang to reckon with growth has been robust and resilient in developed economies. i see that middle class emerging in markets which has not changed. we retain conviction we are still dominant in u.s. markets for u.s. clients in terms of not changing our view right now, we haven't been swayed by with the strong outperformance of the u.s.

>> aoifinn, i wonder what the value is in the tech sector. >> that is not so much value in the tech sector, but bet at the peril with the momentum we see there. we hear about the big seven in con send -- concentration this is the like the ibm risk off which is investing in the risky large-cap tech that is a safe haven healthcare and industrials and solid consumer staples is where i see value. they haven't been as exciting. they he ave been solid in the lt month. that is where the money on the sidelines starts to come in to equity markets with the fomo kicking in again i see it focusing on the less exciting and momentum sectors,

but also going down the cap spectrum into mid-cap and small-cap stocks >> aoifinn, thanks aoifinn devitt coming up, a.i. may face new laon from washington the latest on that story when "squawk box" comes right back.

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net inflows in the $838 billiond assets with new management markets and s&p. the high on the stock is $$785 larry fink is still young. maybe not according to david the window is not closing on larry yet. it is an example of if you go woke, this company is not going broke. they are doing well. >> you are referring to the esg practices? >> yeah. if you decide -- >> i'm filling in the blanks for everybody out there. >> every single proxy vote it is like aoc voting your proxy. >> to be fair, to take the other side, you highlighted the

increase in aum. >> yes that's what i said going woke they're not going broke. you know, disney has its problems coca-cola. and there is anheiser busch. we had people on that actually said the reason in-bev is down because they are not defending what they did instead of the original thing people have different views. depends where you are sitting. the new push in washington to regulate a.i. is going ahead. emily wilkins is joining us with more we still haven't done crypto why not start with crypto? we will do this?

we should go >> we are. right now, mccarthy assembled the group of lawmakers trying to lead how to figure out a.i mccarthy brought five democrats and four republicans with a bipartisan effort to brainstorm the new technology >> what i tried to do is watch the individuals i brought together republicans and democrats who i watched inside the briefings care about this and have great knowledge. we devised a plan to work together in a bipartisan way to bring a foundation legislation to build on it sself >> might be is not finalized and specific bills have not been discussed. mccarthy made clear his effort is separate from the senate

where chuck schumer is crafting a bipartisan bill. >> no disrespect to schumer. i don't think a guy who uses a flip phone has the best knowledge on a.i >> senators and flip phones are pushing ahead with work. they are planning to hold a briefing on july 26th on the future of a.i. >> things are moving quick, emily. andrew, about six months ago, i don't think it was six months ago, he asked chatgpt to make a thing. my resume. it was amazing that's when i realized -- >> that's what you use >> emily, it happened so fast. we have the guy who created waze and sold waze to google ten years ago. he said that was my a.i. company that i sold to google.

we crossed some threshold. amazing. >> chatgpt you see the bills out there. bipartisan bill that would prevent a.i. from ever getting a hold of the nuclear codes. you see what lawyermakers are thinking here. joe, you never see congress act in a bipartisan fashion like this when you do, it signals that lawmakers are very much aware if they don't start looking at a.i. now, they will be very, very much behind. >> they act bipartisan when they come at something from twitter left hates it for this reason. the right hates it for this reason it is similar with a.i emily, thanks. it's early thank you. coming up, actors joining writers on the picket line

wl talk about what it means for the industry next. "squawk box" will be right back. (vo) while you may not be running an architectural firm, tending hives of honeybees, and mentoring a teenager — your life is just as unique. your raymond james financial advisor gets to know you, your passions, and the way you help others. so you can live your life. that's life well planned. this is american infrastructure. 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. ♪

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one of hollywood's biggest

talent agency could be on the block. caa is on the block to be sold to francois-henripinault hollywood at this point is going dark as actors joint the writers on the picket line the first industry wide shutdown in 63 years when ronald reagan was president of s.a.g all film and television halted production fran drescher raising concerns about the role of a.i. in negotiations >> if we don't stand tall right now, we are all going to be in trouble. we are all going to be in jeopardy of being replaced by

machines and big business who cares more about wall street than you and your family >> disney's bob iger downplayed those concerns are "squawk box" yesterday. >> level of expectation they have that is just not realistic. they are adding to a set of challenges that this business is already facing that is frankly disruptive >> they are not being realistic? >> no, they're not >> joining us to talk about the implications of the shutdown is ben smith from semafor smith is so smith. >> whatever you like to call me. ben, we have a video there is a premiere in london of

"oppenheimer." we have killian murphy and emily blunt who with both walked out that must be -- there's matt we may not see them actually walking out. this was a big deal over there just to leave right in the middle of it killian murphy kenneth branaugh they walked out. we were joking about stars making $10 million on $15 million. they're in the union they are in solidarity we are with you guys at this point. >> yeah. promotion element with empty red carpets over the summer. >> they make a lot of money. you don't think of them as trying to -- >> they make a lot of money and pay a lot of union dues. the reason the union has muscle and if you are making that money, you are paying

substantial dues. >> what are we trying to help here more rank and file people? >> a huge union. 120 members. $125,000 a year. there is a big fight at the low end of the union for people who don't work that much it is a key moment of the change in the industry of a.i. and stuff that happened during the pandemic they are exercised about the auditions which are conducted rem remotely people send in videos. actors feel to invest more in lighting and videos they send in >> that is interesting you know the details let's talk business. iger seemed to think this is not a great time for this. we have seen the layoffs across the board. didn't necessarily start with

zaslav he has been three or four steps ahead in the chess match he telegraphed what would happen there are cost pressure to be dealt with and throw in a.i. and streaming. streaming is not making money. it is a tough time i said this is not a great time to strike. it would have been good a year ago when there was a fire hose sprayed at content people. so much money around. >> you know, everybody is cutting. there are hints, particularly with the writers strike, pr producers saying this is a way to save money while the writers are out. the actors and writers feel this is a huge moment the actors were on track to settle they heard from the fraction from jennifer lawrence and meryl

streep that they should stiffen their spines >> i had no idea. >> where is the compromise it sounds from what bob iger said they don't want to negotiate. these are issues they don't want to cave? >> they never want to negotiate. talent is he enormous they were headed for a settlement to raise the dollar amount with details on a.i. which were broadly acceptable around preventing the studio from taking your image and reusing it in a new movie. the actors feel it is a moment of intense change and they need to really go to the mat and hold the industry hostage here. that is what is happening. >> can we throw it into the same bucket of writers and actors totally different? >> totally different the writers were settling for a strike through the fall.

>> can one settle without the other? >> different internal politics actors are out there more militant. they have big gaps writers union -- actors union has a lot of politics. fran drescher and then the former president ronald reagan she is like a joe biden style. >> if someone has young kids, they are not necessarily as the president. >> you think she is "the nanny," joe? >> i didn't think people expect her to be that fiery >> i saw that. i mean, i have a love/hate relationship with actors i love hollywood witand i love movies sometimes i think they are not necessarily grounded with how the country actually works when you are not just playing a role. there are things that go on in

the economy that are important to give them the life. >> it is a complicated union you have multi-millionaire celebrities and people working barely getting by p. t -- by. the union is trying to manage that tension it is hard with the strike with the diverse and innternal union >> have you figured out why they always marry each other? they have the same jobs so they understand each other? do they like the fame? does it make them powerful is it a career move? i wondered about that. >> did you ever think you woul come here? >> i'm having that out of body experience am i on the wrong show >> why why do they not marry normal people >> analysts have said if the strikes go on through the end of the year, that is when we will see the hit to the stocks. the actual hit with profits. do you see that happening?

>> yeah. it puts the executives in had a tough position bob iger has conservatives furious at him and in a difficult position now actors rallying against him and turning him into the character billionaire. not where he wants to be >> do you want to answer that question i feel i robbed you of the opportunity. >> i don't think he knows. >> he is giving me time to think about it >> it was more of a commentary rather than question >> it is a weird life. you have not many people can relate to it >> i married a producer. >> joe >> all right that was any me too problems we settled our me too problems we married each other at cnbc. you know what i mean, ben semafor. ben smith of semafor i think ben semafor is cooler.

>> it's my handle. >> no wonder that's good. >> thank you, ben. nice to see you. >> great to see you. coming up, waiting quarterly results from jpmorgan chase out in the next fuse mew minutes. do not miss our interview with transportation secretary pete buttigieg over the summer cancellations and more >> it is a morning show. meoen is not op >>akver later? you can follow squawk pod.

the fda approving the first over-the-counter birth control pill in a move expanding access to women across the u.s. opill manufactured by perrigo will be available in 2024 without a prescription they said in a statement, they are committed to making the pill accessible and affordable. a long time coming what's the problem you don't want to rush things and safety is important. it would be a good thing to have access to that the other things become less of an issue >> exactly >> no-brainer. the world health organization classifying

aspartame as a carcinogen. it is safe to consume within the recommended daily limit, but found a link between it and liver cancer according to the w.h.o. official. adult weighing 154 pounds would have to drink 9 to 14 cans of diet soda containing that sweetener to exceed the limit and potentially face any of the health risks just add it in another long line of sugar substitutes we hear how bad sugar is you hear about saccharin let's get to jpmorgan chase. crossing the tape here. >> they are not putting anything in it's up to you it will take a second to do that melissa? >> $41.3 billion second quarter.

$4.75 is the estimate. >> $4 was the estimate if they didn't say if there aren't special items, that's the number that is apples to apples of the. >> adjusted is $4.37 >> that is still a large beat. stock up 2% in the pre-market on the back of the results. >> revenue numbers is 38.9 41.38. there are the people that cover the stock, analysts, have estimates for non-interest expense. es estimates for everything. the devil is in the details. charge offs are important. reserves or adding or taking back is important. net interest income is a number people are looking at and i don't know the estimate. it is $21.9 billion of net

interest income. book value is 98 one stock where some banks are not managed as well and trade at or near book or just above book. jpmorgan chase trades well above book because of the jamie dimon premium you would think. >> to get to comments about jamie dimon is making about the economy in the release continuing to be resilient consumers are spending, but more slowly he says there are risks here labor markets have softened. there are still salient risks which i have written about >> he has. we breath llessly report on statements about the recession jpmorgan chase gets involved with it to one extent which is

good >> right. >> we pointed out. >> we will see what he says on the call about that. also first republic. the first quarter with the first republic on the books. there is a lot to get at in this quarter. >> people who do this for a >> people who do this for a living and you

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♪ >> wells fargo, lots of numbers. but the early first share is a dollar 25. they posted a dollar 16. you can see the stocks reacting positively out of the gate, 3.5%. the revenue number was above 20.53 billion of what the revenue number was. the street was 21 1.8 billion. we do a charge-off number here, 764 million. and also second quarter provision for credit losses is 1.71 billion net interest income. 13.16 billion, that seems like a lot, noninterest income, 73.7 billion, return on equity 11.4%. i don't know what stephanie link is focusing on.

both stocks are up on this. she is chief strategist at hightower and nbc contributor, 2 for 2 in terms of the stock reaction anyway, positive on both. yeah? >> yeah, good morning. i think expectations were pretty low for the entire crew. j.p. morgan has been the standout, 11% year to date versus the index down 16%. so it has held up well. i think that number is expected because they are gaining market share versus some of the smaller banks. i think the evaluations are very supportive. i think there were poets and takes in both corners so far. nice to see beats, expect provisions and non-charge-offs to actually be higher than expected, which we saw. so we step back on the negative side. you have hired deposit dadoes.

you have non-interest-bearing deposit outflows. you have the loan growth, the age 8 data coming in pretty weak, about 1.2% for loan growth. on the positive side you have credit is pretty good. provisions are expected to go higher. that's okay. evaluation is supportive as i expected. the one area in banks that i think is the most exciting for me anyway is the capital markets piece. you are starting to see green shoots in terms of equity markets up 8% in the second quarter. you have spreads are tighter. you have underwriting and mna starting to improve. so there are green shoots to be excited about. i think that capital market plays are exciting like goldman sachs and morgan stanley. >> -- i'm going to start stopping questions with a soul.

so the duration risk worries, they really were sort of alone in some of that. or does the whole industry not need to market to market? there still will be some duration risk out there when the fed goes up 500 basis points. these seem to be doing pretty well. obviously, they didn't have the same approach as the ones that got in trouble. is that over? is commercial real estate looming for some lenders? >> i think commercial real estate, i worry about the smaller banks, the regional banks. it's a bigger percentage of total revenues and of their books than some of the larger banks. that is certainly a worry and something to watch. i think it's the large banks that are taking share from the

smaller banks, number one. number two, yeah. they have the commercial real estate risk as well. again, small percentage. the non-interest-bearing deposit outflow, that is absolutely happening to everyone but less so from the diversified banks like j.p. morgan and wells fargo. >> this is a christmas tree. not for nothing -- you know what i mean? people leave christmas lights up year-round and don't turn them on. do you remember? >> it's a beautiful tree. the good news is, it's going to come back. >> i'm going to put a different one. i'm going to put a different one up in december. >> that would be just like you, have more than one. go with this one.

>> you've got to go. thank you. >> thanks, stephanie. >> we will be right back. we earn your trust. maintain our financial strength and stability. and deliver solutions that meet complex needs. massmutual. partnering with financial professionals, benefits brokers, and institutions. at morgan stanley, old school hard work meets bold, new thinking, ♪ to help you see untapped possibilities and relentlessly work with you to make them real. ♪

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this is american infrastructure, a prime target for cyberattacks. but the same ai-powered security that protects all of google also defends these services for everyone who lives here. ♪ good morning. bank earnings in focus, wells fargo and citigroup are all reporting this morning. we will break this down. the bottom line is, the dow is up. airline stocks are taking off. what do investors need to know for the second half of the year, 2023? and 20 -- is that right? yeah, it is.

facebook's thread is seeing a drop off. stop the presses since the blockbuster launch. we will hear from gary on the social media battleground. the s.w.a.t. -- the squawk box begins right now. ♪ good morning and welcome back to squawk box on nbc, live from the nasdaq market site in times square. i'm joe cronin with melissa lee. becky and andrew are off. it twitter is not a public company. i like elon musk. i'm on the record, okay? >> you like twitter and that's the way it goes. you haven't tried threads -- >> i don't like threads. we will see.

but i'm allowed to say that. >> you just did. >> futures are up 103 points this morning. united health, j.p. morgan are both big gainers. the nasdaq is off a little. but the smp which tom lee rhymes with the snp, that puts it at 45 -- i don't know. almost 4520. he said 100 points, it was 4398. if you are watching the two of us, and you are welcome for being here for what was a significant event -- >> i was here on monday. thank you for noticing. the generic anchor who sits next to you was here. you can't even remember who it was. >> you know who it was?

becky was here one day before. >> i hope she is watching. >> it's hard to keep track. you were great yesterday. >> it was the best show ever. >> it was so smart. >> there should be more shows like that. >> was it kelly yesterday? >> it was kelly yesterday. there are. they are down. we worked over 5% a week ago. look what has happened. what a difference a week can make. then 10 years, it was significant on the adp report we saw. god knows when that was. i think it was last thursday. >> it was. >> and you were great that day. >> let's get too and morgan with the results. revenue was coming in at 4.2 billion. the estimate was 38.96. so the top of the bottom line were seeing a 0.7% gain in the premarket on the back of that. >> wells fargo also reporting a dollar 26. the estimate was a dollar 17. revenue came at 20. five 3 billion.

the stock is also writing in the premarket up 3%. >> and blackrock is out with results. adjusted 920 to share, better than analysts were expecting on revenue of 4.6 billion, that is in line with estimates. they saw $80 billion in flows during games. we saw initially down by 0.6%. david george is here. it's great to have you with us. what is the take away so far from j.p. morgan and wells? >> thank you for having me. the numbers have been pretty good for all of the gnashing of teeth and negativity around financials. we were off to a good start from an earnings perspective both wells fargo and j.p. morgan raised guidance for the full year. and it posted what we think were good results in a

difficult environment. >> yeah. what are you going to be listening for in particular on the conference call for j.p. morgan? they posted a big gain on the back of the first republic transactions, first quarter reporting as a combined company at this point. they are usually very vocal and descriptive when it comes to what they are seeing in the economy as well. >> i think the main focus will be on credit quality as well as looking forward, commentary for the market business. as you know, it has slowed a bit from an mna. it will be interesting to see what they have to say on the markets. i think it is a function of credit at this point. in any further commentary as it relates to regulatory changes we may see in light of some of the challenges emanating from the fallout earlier this year, but i think from a regulatory perspective, those will be the

two areas of focus from the bank as we go through earnings season here. >> what's your feeling on credit and where it is headed? we are getting mixed signals. some need to do more and more, the prevailing thinking on the street when it comes to the economy. but you know, in terms of that, you know, does the stock support that scenario? i know the scenario was worse than what? >> i think it's important to expect that credit is going to deteriorate. tanks are in the business of taking risk. that's how this works. we are coming off seven years of well below normalized credit cost. it is very reasonable to expect that credit is going to deteriorate as we go to the balance of 2023 and into 2024. in particular, the office sector and cre. that should normalize as claims go up and starts to normalize as well. that in and of itself does not mean it's particularly negative for the stocks. we view that expectations for the regional banks are particularly low and estimates already incorporate fairly notable notarization and company. we view that the group can handle higher credit costs and the stocks are already taking

in a more draconian situation. >> baking in that, there's the regulatory changes that could increase the amount of capital banks have to hold. what bank in your universe do you think is the best value at this point? >> from my perspective, the most value is in the super regionals or the smaller regionals. a couple favorites are u.s. bancorp, usb, cma as well as dfg, fifth third, most of these are trading at five, six, seven times earnings where gpm is treating close to 10 or 11. from a trade-off perspective there is more value in that smaller regional group. >> david, great to speak with you. thank you. >> thank you. coming up, is the sec holding back crypto? advocates for the digital currency are looking abroad for

digital currency hotspots. there are regulation lawsuits in the states. we will discuss that next. futures right now continue to be strong. the dow united health reported $6.14 per share versus estimates of $5.99. revenue of $92.9 billion is above the $91 billion estimate. outlook as well, squawk box will be right back. ♪ "the pursuit of gold" by alex ball ♪ ( ♪♪ ) ( ♪♪ ) ( ♪♪ ) ( ♪♪ ) ( ♪♪ ) ( ♪♪ ) the l'or barista coffee and espresso system.

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after the sec's lawsuits against coin base and other platforms for not registering properly as securities exchanges, regulators are coming off. there's at least a perception that they are nfriendly to crypto in the united states. according to our next guest, other countries are rolling out the welcome mat with players in japan, hong kong and europe making an effort for crypto to operate in their countries. emily parker, coin desk

executive director of global content. emily, you know, a casual observer would say, yikes. ftx, there are things going on. we need some regulation. but then, i think the coin base suit -- that almost seemed gratuitous. even a reasonable person would say, all right. something is happening here that goes beyond trying to protect investors. have i got that? is that a legitimate viewpoint? >> you know, it is funny. if you go to the sec website there are so many different cases. it's not just coin base. they have charged so many different companies. i think the issue here is not so much is if it's gratuitous or not. it's clarity. this is something advocates have been complaining about. the concept of regulation by enforcement which is a lot of the regulatory decisions are being played out in court as

opposed to having a framework where people know what they can and can't do. all the lawsuits are different. the sec is accusing by nance of different things. you know, if we look at ripple for example, you know, there was a partial victory in that case. ripple has been fighting that for years. you know? again, it would have been better if there was some clarity from the outset that did not leave the issues to be decided in courts because not every company has the time and resources to do that. >> do we want to be the global leader? if we do, you point out that hong kong and singapore -- there are places that seem to be putting out a welcome mat. can we actually lose our ability to lead the world? would that be a negative for the united states? >> i guess it depends on who

you ask. i think if you asked the sec they are not concerned. they don't seem particularly concerned about crypto projects leaving the united states. yes. the issue is, even if the sec were to continue the current approach which i think most people agree or most people in the crypto industry believe is inefficient, there are other places for the projects to go. dubai, singapore, we've heard about these places for years. there are new or revived players in town. japan is one example. let's be clear. japan is very strict. it's not an easy place to do crypto business but it is clear. they had a victory of their own when ftx collapsed and people all over the world were worrying about it. japan was calm because ftx japan was one of the only places that were able to give money back to their users. this is a victory for japanese regulation which prevents co mingling of assets. there are separation of assets. the exchange can't dip into the fund or customer funds and do what they want with it. japan has strict rules about how crypto is stored. the majority of exchanges need to be stored in cold wallets which is a more secure form. it's very strict. it's not easy. but it is allowedfor

protection of investors. hong kong also recently has -- you know, has been willing out a licensing regime for changes. europe now, 27 member states will have a licensing regime. so again, what is interesting is these are not wild west jurisdictions. these are jurisdictions with very clear, very difficult requirements. but i think for some projects, they would rather deal with that rather than make a mistake and spend years and millions of dollars fighting it in court. >> if you assume that crypto is here to stay, for a long time i could see why banks or even the u.s. government in terms of being distant intermediated or disrupted, we have the currency for the entire world. if you are in that position, the way you benefit from that, you don't need an arrival or upstart or anything. i can nderstand that. we beyond that now -- you know? if you can't beat them, you at least have to regulate them at

this point? i don't know what the hesitancy is. are they hoping it goes away eventually? >> that's a great point. that's a great question. i think you are right. regardless of if you like crypto or not, it seems like it is here. you know? i think you could make the argument that the approachis less protective of investors in the united states because of that. crypto is here. as we saw some crypto exchanges that have done great damage like ftx was not even in the u.s. that doesn't mean it can't hurt u.s. investors. i think you can make the argument that you can't turn your back on this. another interesting piece of data, bitcoin is up since the beginning of the year despite the string of lawsuits which again is another data point that shows the u.s. is not calling the shots here. if the u.s. cracks down on crypto and there are stories we are hearing about projects avoiding the u.s. entirely, it's not stopping people from investing in bitcoin. >> what is the chance that

timothy and j clayton, former sec chair said that the two agencies should create a self- regulatory organization and ot wait around? it comes up with asic structures. is there any way that could see the light of day? i can't imagine. >> yeah, again. exactly. you know, i think i know what they are referring to. there are good suggestions. they are incremental and reasonable. they are not making dramatic, dramatic recommendations. but the problem is, is there any kind of political rule in congress to do anything? i don't see much evidence that there is. i think the u.s. was burned by the whole ftx collapse. i think sam bateman freed positioned himself as a spokesperson for the industry. he made political donations. a lot of people in washington got burned. my question is, before the

election, there is not will in washington with a few exceptions. there's a handful of exceptions. people in congress are trying to change things. i don't think that there is a lot of will or effort in congress to make this a priority. they would rather stick with the status quo. >> in the year that spot bitcoin eps -- what year? this year? >> you know, that is an interesting paradox because it is something people have been waiting for for so long. again, i mean people in the crypto industry have been waiting for a long time. now you have black rock and multiple players like logos applying for etf. with players like this, if they are applying they have to have some sort of confidence they have a decent chance. you know? in the past there seemed to be no chance at all. this could be a real game changer. some of these are working with coin base which is also being sued. it is a confusing moment in the united states right now because the etf thing could be a game changer. it is happening at the time

when the sec is taking a lot of very unfriendly positions towards crypto. >> you didn't say what year, emily. >> what year? okay. i -- you know? i don't know -- i don't think anybody knows or if it will ever happen. >> it should be 2023 -- it should be this year. i didn't ask what month. emily, thank you. all right. >> thank you. coming up, clear skies ahead, stocks have been flying high. we will get an outlook for the remainder of the year. squawk box will be right back. aflac! seriously? now there's a hole in your defense; look at the size of that- gaaaaaaaaaaaap!!! is that a goat?! you talkin' about me? gaaaaaaaaaaaap!!! i think this goat is saying “gap.” must be talking about the expenses health insurance doesn't cover. so who's talking about the money aflac pays to help close that gap?

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♪ >> hollywood actors are officially headed to the picket lines this morning after

failing to reach a deal with streaming services. that means film and tv productions will immediately halt. actors will not be permitted to promote projects including emmy award campaigning. members have joined the writers on strike in the biggest industrywide shutdown. fran drescher spoke on the vote to go on strike to nbc news. >> actors want to work. performers want to work. workers want to work. what is this maniacal need to put people out of business because, what? you can save a nickel or a dime? it's like, it is sick. >> the problem is, at this point in time, they are looking at the studios to save nickels and dimes because it is a difficult industry particularly streaming. disney has discovered that. >> they made a lot of moves and investments that run up a lot of debt and interest rates are up. so the debt costs more. the service -- and -- places

like disney? disney would be loathed if they got rid of loyal employees across the board -- these layoffs. espn -- >> right. it's a bigger business than just the content production. >> there is. and there's always been the tension between the suits and the bean counters and the creative side of things whether you are a producer, writer or actor. when it's hard, they need to talk to each other. it is difficult because they are coming from different places and speak different languages. coming up , why legacy? why legacy? that someone told. why legacy admissions could cost harvard millions of dollars. we have a look at a massachusetts bill that could level the playing field. then, the ftc is investigating launching an investigation into the chat gpt

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welcome back to squawk box. we are live from the nasdaq markets. check the futures this morning. the dow is up by 560 points. thanks in large part to better than-expected earnings from unh as well as bank earnings. jpmorgan is one of them. we heard from a bunch of them in the past half hour or so. we are 30 minutes away. all of them are trading higher across the board. both are reporting a common theme we are hearing throughout the quarter. rates were higher in the second quarter. that helped the banks overall, j.p. morgan and wells fargo were beat on the top lines. >> what a concept. although it is still inverted a little, but still. >> high rates are good. >> savers, insurance, for years, we have been complaining about how skewed things work

for anyone who needed to earn a risk-free return, you couldn't do it. insurance companies had all these assumptions. they are not -- they are low to move out on the risk spectrum. they can't. >> yup. >> it has to be there. >> yeah. we will get more from blackrock as well. larry will join us on the show later this morning. new this morning, homebuilders are getting an upgrade from raymond james. ray says the firm is raising estimates and going into earnings next week. they raised a strong buy with an updated price target of 100. also, cayenne home and mdc holdings outperform holdings as well. >> after spending much of the first half of the year struggling to gain altitude, airline stocks took off in june. what is the spark behind the movement? phil joins us with more.

good morning. >> good morning, melissa. what a great seven weeks it has been for the airline stocks. if you look at their returns since may 1st, they have had a heck of a run here. we are showing you the majors. we are not showing everybody. this is what you have seen for the airline sector anywhere between 22 and 35%. what fueled the second quarter for the airlines, three things. first of all, near record revenue. that is a reflection in terms of demand as well as pricing with the airfares that are able to charge right now. capacity, however, has been the low 2019 levels. that's important. a lot of people say they are adding flights. they are not adding the number of flights they had in 2019 pre- pandemic. jet fuel prices are falling anywhere between 25 and 35% depending on the airline. that has had a huge impact. we saw it reflected with delta yesterday.

you will see it with the carriers. they report results. the number of people flying right now is not quite back to pre-pandemic levels. it is close but not quite back there. the average daily passengers being scanned by tsa just over 2.2 million people every day. you can see where we were in 2019, 2.3 million. the question becomes, what, stocks do in the second half of the year? can they manage what we saw in the second quarter? if they were to get back to pre- pandemic levels they would have to be up anywhere between 25 and 50%. to get to the all-time highs, most of them hit them in 2019. there were some that hit all time highs in 2017 or 2014. they have to go up 60%. i think it is asking a little much, guys, to think the airline stocks will get back to where they were pre-pandemic although, you know, when we talked to ed bastion, he said we've done it before. we will do it again. when remains the question.

to think we will see the stocks back to pre-pandemic levels, i'm not sure we will see that in the second half of this year. >> thank you. let's bring in citigroup airline analyst, stephen. it's great to have you with us. >> thank you and good morning to you. >> what do you expect the second half of the year? ed bastion was optimistic when he was talking about bookings. into the fall he said consumers continue to book to europe through october. >> yeah. you know, the group has been seeing very strong demand. what your colleagues said, i would largely agree. you have a very good combination of an evolution of post-pandemic demand, and you continue to have the capacity on a per capita basis which, relatively speaking is supporting pricing. i would say from a fundamental perspective the main members of the group such as delta are actually in stronger shape than they were five years ago. so i do think we will get back to those pre-pandemic evaluation levels eventually,

but maybe the street still needs to quarters of additional evidence. >> a key part in the story, stephen, has been the constraint capacity as phil pointed out. for airline investors that have been burned in the past, that is the muscle memory that airlines get to where demand meets capacity. walk us through where there might be capacity constraints that the airlines themselves can't fix. it's not as easy this time around to just get an airplane out of the hanger and roll it out. you know, they are waiting for the new aircraft. there's the 5g component that is making it more scarce. can you walk us through that? >> absolutely. the group is waiting a long time to get new airplanes. so we have had supply-chain issues on the jet manufacturing side. and while there are some public

indications there might be some improvement there, there is a long backlog. you know, so airline ordering a new aircraft, it couldn't wait a couple of years before the new airplanes start to arrive. and as your colleagues said earlier, capacity on a per capita basis is down and it will stay there for a while. the other thing that is making this difficult is the lack of pilots. i think that kind of ties in with some of the drivers we are seeing currently in the service industry. you know? airlines need big pilots to come and work for them. you just don't have enough of it. so the place where that has really created a lot of heart ache is the regional side mostly. but mainline as well. and it takes a while to train pilots, get the 1500 hours of flight time, and finally get

one of those guys into the copilot seat in the car it. that's not going to be fixed overnight. >> stephen, what's your topic in this space? >> delta airlines is our favorite one. we would highlight in addition to the international long-haul it is seeing, the loyalty and cobranded card revenue has been requested and is continuing to move in the right direction. >> stephen, thank you. >> pleasure. coming up, vader media cofounder joins us to talk about more. and transportation secretary pete buttigieg joins us to talk infrastructure spending, coming ghba.

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it is almost, perhaps, ready to turn positive. one more big bank will report this morning. we are expecting citigroup results in the 8:00 a.m. hour. space x reached a $150 million evaluation after investors agreed to sell millions in stock. it was $81 per share. it is one of the most valuable private companies in the world. >> the ivy league elite have a new target on their back. this time, in massachusetts as a new bill makes the rounds. it could cost schools like harvard millions. robert joins us now. >> from your tone, i can tell how you feel about this. >> i know that place, sort of. i was in the working sector of kendall square. >> one of your alma mater's is making it through the legislature. they charge feesthat allow

legacy admissions. harvard would pay $100 million a year under the proposal. that is more than half the total revenue that would be raised. williams would pay $8 million. amherst, wellesley, boston college would pay millions per year. this would be based on the endowment size. harvard is $52 billion. and the school favors alumni and donor families as well as early decision. the bills sponsor saint legacy admissions is effectively affirmative-action for the wealthy. >> nothing in the bill says, you can't get into the school your parent went to. it just says, if there is some other kid, some other applicant who has higher grades, higher s.a.t. scores, was more hard-working, a better essay, then we are not going to give you a leg up. >> the money raised from the fees would go to state community college in massachusetts. harvard declined a comment.

independent colleges in massachusetts called the vote, quote, punitive and likely unconstitutional. it would harm the very students it is trying to help. the growing number of schools have abandoned legacy admissions including mit which never had the practice. mit would not have to pay a fee. they have always led in the best and the brightest. >> yeah, right. -- how that happened. >> i think -- when you -- when you argue that it should only be based on merit, and it really shuts the door on a lot of other ways that colleges use to diversify the student body. >>this is the most -- this is

the old boy network type -- is anyone -- >> if you're going to make this argument, you know? if you extrapolate -- >> they don't want to -- >> it reminds me of the salt debate. it points at the hypocrisy of liberal institutions saying, we are going to defend something because we need the money. basically, this is a program that helps the wealthy. the schools are in a tough place. they say, this forges relationships with families that last generations. the money they get from donors helps scholarships which helps the underprivileged. >> it's not simple -- >> but after affirmative action, this is a tough one to defend. >> it is. but i didn't think about that. they've got the rich alumni. the reason they have $52 billion in endowment is because of the legacy admission. >> people don't get to harvard because it's a needy cause. >> i think my kids -- i didn't have this case at university of colorado. it's like 80% of the people. my kids, they didn't go there anyway. have you ever been to boulder, colorado? it's the greatest place. >> look at johns hopkins. look at amherst college.

they have come out and said, we are not going to do this anymore. i think there will be more schools. democrats in congress are against this. you even have bipartisan support for schools. it can't be legislative. it will be fought in the courts if it is fought. >> that is interesting. what about my lv mh guy? did you invite him on the show? >> yes. the son? >> frederick. >> you haven't even met the other ones. there's alexander. there is john. >> he is the ceo, right? >> bernard -- frederick is the ceo of lv mh. >> yeah. so the other kid -- >> we will get him on. he was great. he was a great interview at 8 years old. >> amazing. >> you mention he is seeing someone. she is cute. >> i saw her, too. >> he wouldn't confirm. >> he wouldn't confirm.

is she talented? >> according to the internet, very talented. >> do you know what we are talking about? >> i was here. >> i don't know! >> i should just leave right now. >> you weren't here for tom lee. you were here for frederick lv mh. >> we will get him back. we will have him live. >> excellent. >> next time alyssa is on the show. >> promise. >> robert, thank you. coming up, attracting advertisers, threads take down twitter as elon musk struggles to rake in money? get the best of squawk box on your daily podcast app. listen to us any time. stay tuned. ♪ to guide you through a changing world. ♪

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the ftc making another attempt at preventing activision blizzard, a federal judge denied a request from the agency to temporarily block the companies from closing the deal ahead of the july 18th deadline. they are also seeking emergency action for the ninth u.s. circuit court of appeals to stop the deal from closing. overseas, he made a sale of the cloud gaming businesses in the uk to appease regulators there and move forward with the merger. after launching last week, instagram thread has gained over 100 million sign-ups drawing the interest of companies, agencies and

advertisers. businesses have stopped advertising on twitter over brand safety concerns. they are excited about the possibility of advertising on threads. reports this morning that threads is seeing a massive engagement drop off, we are hearing since the blockbuster launch, users spending 50% less time on the app then one week ago. joining us now to discuss the state of the digital ad market is gary vaynerchuk. i guess, did you join threads? do you like it ? has your engagement gone down? do you think twitter needs an alternative, a kinder, gentler alternative? >> good morning, first of all. i joined threads. i like threads. i think competition is good. i don't know if it is a kinder, gentler thing. i think all he places stop off

very kind and gentle when i was on twitter from 2007 to 2010, it was the kindest, most apps for relational joyous place. these are not platforms that are creating the place to be less joyous. these are human beings being exposed for who we actually ars threads is empty, twitter is empty. we as humans are filling them so i'm not sure about that part >> what's the answer, though, gary it's the question we argue about every day. i didn't like the old twitter. i don't want someone saying you can't see what's in this type. let me see it. i'm a big boy. i can take it. actually, i don't like what people say, i can't take it. but in general i want to see what people are saying >> well, you can these are -- >> not with the new twitter. i couldn't on the old twitter. i couldn't see anything about

wu hahn. >> you could follow who you want these algorithms people complain about, you can control -- >> i'm not on threads. i've never been on instagram so it's my fault maybe. >> this is the big punch line, brother. we love to blame platforms and we hate to blame ourselves when you said earlier what's the answer to a kinder, better place? how about parenting. how about civility becoming a big are part of our conversation how about people in public forums knowing how to handle someone seeing the world slightly different than them this is not about apps and tools. this is about humanity and where it sits and where we are as a society. >> oh, geez, gary. a hope for a higher standard, you could be hoping for a while.

i'm not sure that's going to happen >> that's fine but then let's stop pointing fingers and start pointing thumbs. i choose to be practical and optimistic, i'm not delusional i'm not in fairy land but i choose to see the opportunities, i choose to be entrepreneurial, i choose to be on the offense and not dwell on stuff i can't control and i definitely have no interest in tearing down other people or other operations or ceos or businesses to make myself feel better there's two ways to build the biggest building in town one, tear down everybody else's building, two, just be good enough to choose the biggest building i choose the latter. >> you think we said advertisers are excited about threads because they're not excited about twitter. >> advertisers weren't excited

about meta 12 months ago you know that. you guys covered that extensively. advertisers love to posture in headlines but in reality advertisers that were smart and understood where consumers attention was -- if they were smart they'll advertise on threads, twitter and youtube and snapchat and facebook and instagram and the emerging channel ott providers, what roku is brewing, if advertisers were smart they would spend their money where the attention is and stop spending monday on television and potential awareness rather than actual release. >> and elon musk on twitter.

it's better or he's ruined it? >> the product is better i think the reality of the product versus the reality of the conversation are two different things, not to mention i don't know how a single person that actually spends time on twitter doesn't realize that the temperament is a technical of a lot more calm and chill than it was three years ago. by the way, preview alert, it's not going to be calm and chill until next year, because everyone watching this, 90% will be on tilt and emotions will run high >> so twitter will be around do you think threads will be around, too? >> of course there's more than one channel. >> no, there's not do you know of any of them

>> tell me, i love science fiction and i like terminator movies i don't think machines, if they were really, really centian, i don't think they'd like us i really don't 20, 30 years from now, do we need to worry or do we need to just worry about photo shopping or lies. i'm concerned, i'm scared. >> look, it can happen luke why are we the last evolution? dinosaurs used to rule this thing. if you told me 200 years from now the robots win, i'd be like, okay i don't fear evolution i'm not saying, hey, we're finished look, it's a fine technology when the tractor was invented, it made us much more effective because most of us didn't spend our times working the farms anymore and a.i. is going to make a lot of tasks way more

effective. i'm not ready to say the robots are coming and we're finished but in any new technology you have to be thoughtful. people are like, oh, the jobs. nobody cried for the tens of thousands of yellow pages salespeople when search engines came long. it just happens. the way the system is working now, i'll take anything. >> you're 85, you don't get that procedure. >> i used to watch this network when everybody said they were going to hold on to their blac blackberry when everybody said they needed their buttons and

others didn't have it. >> not every card, not every sneaker is worth something 90% were not destined to be the thing. there's 99% of things that don't matter in the excitement of 18 months, people assumed every single one was going to be. we become more educated. this viewership knows more than anybody on earth the embassy and flows of supply and demand >> gary, thanks. we'll see you again soon >> other business channels >> i don't know what the guy's talking about. >> coming up, transportation secretary pete buttigieg will join us live "squawk box" will be right back.

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we're going to have to outlaw golf. absolutely no golf in this house! not under my roof! since we started working with empower, all of our financial questions have been answered, so we don't have to worry. so you never- nope. always part of the plan. join 17 million people and take control of your financial future to empower what's next. start today at empower.com what are you working on? financial future to empower what's next. a bomb. it's happening, isn't it? this is the most important thing to every happen in the history of the world! good morning earnings season getting into full swing big bank results out in the premarket. jpmorgan and wells fargo leading things off next up is citigroup strikes hit hollywood, actors walk off the job, joining

the writers on the picket lines. that's the first time that's happened since the early 60s and as weather wreaks havoc on air traffic control, how can congress fix weather delays? we'll get answers from pete buttigieg when the final hour of "squawk box" begins right now. good morning welcome to box bright here on cnbc becky and andrew of off today. we're looking at u.s. equity futures. we're seeing an immediate boost in those shares. we do see higher indications across the board the nasdaq now in the green, up by about just about 8. let's get straight to leslie, i

think. >> oh, good. i was scrambling citi is out. leslie picker. you have to do the heavy lifting for us and we'll pretend we have some analysis we're talking about afterward. >> i'll bail you out with this one, joe citi shares jumping on this news it's a 36% decline from a year ago but analysts were expecting a $1.30 a share so a 30%in crease there top line saw a slight decrease, just 1%, beating wall street projections. operating expenses up 9% for the quarter. revenue from fixed income and equity market, it was down 13%

and 10% perspectively citi's treasury and trade solutions division, also a bright spot with 15% top line growth thanks to higher interest rates and volume growth. personal banking revenue grew during the credit as well. net credit losses. citi returned $2 billion to shareholders and they said we'll continue to review return levels on a quarter-by-quarter basis. we'll speak with mark mason

exclusively this afternoon here on cnbc, guys. >> i can't get over this citi group it's a $47 stock but i still see as it a $4.70 stock. jpmorgan is almost half a trillion oh, wow! who did that for me? how'd you know -- i must really be predictable but it's just flatlined. flatlined ever since the financial crisis and i love jamie and he's a piece of work but there's a difference one of these is not like the other through the financial crisis there's risk management and then there's i'm going to keep dancing until the music stops with chuck prince and others it's just a commentary and if you're really effective at doing what you do. otherwise you get stuck as a

$4.80 cent stock still, leslie >> joe, i don't know if you can hear me but there's like thunder and lightning happening. you said financial crisis and it's like the sky opened up. kind of weird. >> never recovered >> and to your point that's kind of the whole overhaul that citiis undergociti is going thr right now, trying to be a smaller, more focused bank being exiting their mexico business. that was announced, they're going to ipo that. so there's still this kind of turning and so the result of that have yet to fully play out under jane frazier's leadership. when i look at it it, it went

$4.70 to $4.80 bus of the 1 for 10 reverse but it was a very difficult time for -- i mean, we now know how close we came we look back on that and hope it never really happens again but we should do like a long -- >> go ahead. >> i was just going to say it was interesting as you take a step back and look at the results of all three banks, of the large banks that reported this morning is kind of how full circle we've come since the financial crisis given the fallout its had on the regional and lull banks >> and viewed in the context of what we were just talking about, hopefully that's all it was, a little tremor. thanks, leslie >> let's bring in stephanie to talk more about this morning's earnings jpmorgan beat on estimates on both the top and bottom loons,

as did wells fargo stephanie, what's the message from the banks this morning? is it just that we beat very low expectations or is it actually glimmers of flown the industry >> i think it's glimmers of hope to be honest with you, melissa jpmorgan grew 34% year over year, wells fargo grew 20% year over year. both were helped by better net interest income. citigroup, their revenues fell 1% we got to hear about their cost guidance the number we're looking for is 54 billion for the year for citigroup. we have to hear about buybacks, people are wanting them to buy back at five times book value. jp just raised their net income

growth for their full year, so did wells fargo, by the way. their core capital, the cet1, they have $1 trillion in securities and expenses in the quarter were much better than expected and jp, they execute in challenging times. wells fargo, their net interest income group 49% and their net income has been increased to 14% from 10. a tad higher on the full year on the guide there. overall very solid results from jpmorgan and wells fargo citigroup, eh, okay. >> as we see rates come back down a little bit, even though the banks are so diversified,

they're not reliant per se solely on net income or where rates how high they go but they sort of trade like that. at what point do you start getting worried when you're seeing declines that we've seen just in the past week with yields in. >> well, i think you'll see net interest income go higher or maybe not as high as we just saw in terms of the revisions but i think they'll stay strong. net interest margins probably continue to compress so it's not going to be perfect for these banks but that's to your point of diversification. that's why you want to own the big banks and have capital markets we talked about in the last hour. if you think capital markets is troughing, which i do, you want to watch the net interest margin side >> we have an analyst on before and he said that the real value was in some of the super

regional banks, suntrust, comerica, et cetera. do you see value there in. >> yeah, i do see value in the super regionals, melissa not some of the community banks and smaller ones that being said when you can get jpmorgan for 1.6 times book, wells fargo at 1 times book, i city think there's value and we don't have to worry about the net interest account deposits going away and also market share losses at the super regionals. so to me i kind of feel like the big ones are cheap enough and i think there's value there but i. >> that's good to see. thank um, stephanie link >> when we commonwealth back, we'll head to sun valley, idaho.

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welcome back to "squawk box. green arrows across the board. s&p 500 looking to add 8 dow jones looking to be higher by 173 and the nasdaq catching steam here up by 13 right now. check out shares of nvidia, and coming up, we will talk about travel delays so far this summer and how the airlines are handling the surge in demand with transportation secretary pete buttigieg and do not miss ceo larry fink on "squawk on the street" next hour ayuned 'll be right back.

it's july and that means the biggest players in media coming together for alan and company's conference in sun valley, idaho. julia boorstin joins us. >> i'm join by casey wasserman

your group spans music, sports but you really start out with sports there's been so much conversation about the future of the sports business. where do you see the streaming business going and do you think we'll see all of the sport really just be direct to consumer and off of linear television >> you are certainly seeing the slow decline of linear cable and linear television and you're at the bottom of the cycle where you'll start to head in an area where there will be a rebundling people like to watch sports live as a media company, once you have those rights, no ones can have them and the audience is quite predictable. whether you rely on advertising or direct-to-consumer revenue,

sports will sit at the tom of the chain. >> you represent about 15% of n nba players. >> the nba is the last big rights for some time i think the nba will have a significantly expanded rights deal the disintegration of the regional sports networks will provide more opportunity for its partners the deals don't end until the end of the '25 season. and for us as representing talent, they are gross revenue participants as revenues and value increase, athletes are direct beneficiaries of that. >> you do not represent actors and writers. but one firm that does, caa, is reportedly in talks to sell majority stake for about $7 billion to one of the richest men in the world, francois

pinot. they also have a sports client >> it's a valuation of the value of talent, where the ability to connect with consumers is more and more important someone whose business is making high end consumer goods thinks the best use of his company, i think it's the right time to sell a business. >> another big source of conversation here is the writers strike and now the actors strike on top of it of course the actors are starting to picket today a lot of the media companies impacted are going to be here. that means there's going to be more attention on sports, especially in this fall lineup what do you think the strike means for your and your business, not being directly impacted by it >> it's a lose-lose. you have an opportunity to create a shared economic opportunity for a new future

the talent needs to feel comfortable and rewarded and protected in that environment and that's always when we are in a business our first interest. i'm concerned about the hundreds of thousands of people who work in those businesses who are now out of jobs, who aren't on strike, who live in the city i live in, los angeles, and who are suffering the economic pain of it. we're in a world where going to the theater and turning on tv isn't the only place to give content. we can't cede that to other forms of entertainment we need to build trust and get this done season possible. >> there have been a number of reports that wasserman is nearing a deal to buy brillstein entertainment at a time where there are strikes and a contraction in the industry overall. >> i'm the same guy who bought a

music business in the middle of covid when no one was going out of their houses. i believe in the long-term value of talent and the opportunity to acquire of best of any business in those categories is something we're going to pursue regardless of what may be happening in a moment of time >> it will be interesting to see what happens there there's been so much attention on taylor swift's huge tour and the question of whether or not there needs to be regulation of the ticketing business there was testimony from live nation in congress and there's this question about what's best for consumers. what's best for your clients and how do you see this playing out? >> so look, the taylor swift situation is truly an anomaly. we represent cold play and ed sheeran is filling stadiums as we speak she's at a unique level in terms

of interest and anxiousness for tickets. you've got a secondary ticketing market that is unfettered and unregulated where the people taking the risk on the intellectual property are not be benefiting from that once a ticket is sold, all the benefit is going to people down the revenue stream that take no risk and i think people need to know who their fans are you go to an arena because taylor swift doesn't know where people got their tickets and what they paid for their tickets and she's not benefiting from their ticket that is a truly complicated issue. we have to focus on how can we capture more economics from the market to benefit from those

taking the risk. >> there is a proposal from ticketmaster to reform this season how is the consumer going to see any differences? >> okay, look, i think ticketmaster is -- look, in the end, they're just selling tickets and separate business from live nation regulation and rules are good but having said that, we need to get a better handle on the economics. >> just a really quick final question because i know you're getting a lot of questions about liv golf and the pga you represent a lot of golfers what do you make of all of these controversy and questions about these two companies coming together if. >> i think the idea is fine. but the pga responsibility is to the players first and i think they have failed the interest of the players in the handling of the execution of this mergier how do you handle those who left

for liv and how do you reward those who were loyal to the tour what they have done now is put a band-aid on a big problem and kick it down the road and that's why they're getting, frankly, the criticism they deserve >> it's interesting to watch that one play out. no pun intended. casey, thank you so much for joining us here in sun valley. we're going to send it back to you guys >> on july 25th in los angeles, cnbc and board room are hosting " "game plan," bringing in the most influential leaders across the sport landscape, athletes, investors, innovators will t talk about the sports business >> and up next, a wide ranging interview with u.s.

transportation secretary pete transportation secretary pete je you know doug, ever since switching to workday you've been a real rock star. rock star? much more "squawk box" on the way. billy idol? i mean where's the skin-tight leather? my shoes are leather. where's the unnecessary zippers? that thing! billy, rock star is just how doug feels when he uses workday. thanks, rory. i'll show you rock star! be a finance and hr rock star. workday. for a changing world. billy idol just stole your golf cart! (♪♪) (basketball swish) i've been connected to camden high basketball since i was very young. dad played here. grandpa played here and then there was me. (camera shutter clicks) playing for camden high was a huge thing for me. it wasn't just high school basketball to me. it was way bigger than that. you're playing for the city. it's like in a way, the city is winning. (♪♪)

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bad weather no doubt helping to make it another tough summer for air travel travelers have dealt with thousands of delays over the july 4th holiday and yesterday delta airlines ceo told us his industry needs to stay within its capabilities, including on air traffic control. joining us to talk about this and much more, transportation secretary mayor pete buttigieg >> i'm happy to answer to it that's a compliment to me. >> secretary mayor pete. it is good when everyone knows you by your first name it kind of cool. weather had played a part but we do have some money to spend as far as the infrastructure goes should the faa -- do we need to improve the faa? it's hard to do this obviously, 50,000 take-offs and landings a day and staffing and weather

can we make it better with more money for the faa, mr. secretary? >> yeah, no question first i want to emphasize some of the movements, if you compare a year ago even on so-called blue weather days, we were seeing some major, major delays. that's not happening so much this year. we have been hit with severe weather on certain days this summer we can't control the weather but there are a lot of other things we can work on and we are. part of that is airport infrastructure we're working on something called an end around taxi way, which means the plane doesn't have to cross the end of the runway when they take off. so we're investing in that in places like charlotte, taxi way improvements in places like little rock. and there's also just making sure we have the air traffic control system we need

if we're going to keep pressing the airlines, as i have been, on their performance and investment and we have to do the same thing on the public side, investing in our air ways and investing in our people, making sure people have the technology they need to succeed and simply making sure there are enough of them traund and at their positions there is a substantial gap between where we are today and where i want us to be in terms of staffing. that didn't buildup overnight so we won't fix it overnight but i think we can make quick steps to make a big difference. we're bringing on 1,500 new air traffic controllers this year, we're requesting the resources to do 1,800 next year and keep going until we're at the level we need to be. >> retro fitting and it's not just for 5g you know, sometimes there's something that's identified that maybe wasn't up to standards so

they have to go and fix it do you think airlines book flights knowing they're not going to eventually follow through on that? i mean, everything likes to have planes that are full, but that's a bad thing to do. have you heard evidence of that, secretary, and i guess we should do -- that shouldn't be something we just, you know, turn a blind eye to. that can't happen. >> that's exactly right. so if they do and we determine that they have, we're going to take action. we actually have some active enforcement processes right now looking into allegations of unrealistic scheduling when an airline sells a ticket on a flight that they know they can't realistically serve, that is not only unfair to the customer, this is also a big competition issue. you could have airlines trying to unfairly compete, grab ahold of market share on certain

routes by overschedule i would give the airlines credit scheduling for conservatively than last year we see demand off the charts june 30th, tsa reported the largest number of passengers ever on that day, even though there was weather rippling through the system, cancellations stayed below 3% any time we find credible evidence that an airline has not been offering realistic scheduling, we're going to look into that and take action because they have to be prepared to service the tickets that they sell to be fair to passengers and as a matter of competition fairness, too. >> secretary, how's it going with the infrastructure -- the money that we have and it's a good problem to have but how much has gone out there? there was an urgent need for it and i would just ask you, is

permitting and red tape and regulation now that you're on i wouldn't say the other side of things but now that you'd like to get these things down and see real progress made, are you running into things that you wish could be reformed a little bit to make things easier or is it all absolutely necessary? >> we're definitely at the phase where those issues around delivery and red tape are looming larger and larger. the first year of this administration we spent most of that year just fighting to get the bill passed, actually making it happen, striking that bipartisan deal under president biden's leadership and getting those funds. and then the second year with all of those new programs created it, took a huge amount of work, setting up the architecture or the plumbing, if you will, to move all of that money through. now we're in the third year, which is about the money moving and then ultimately the dirt

flying and for that to actually happen, there are a ton of steps dwn when i get to call the senator, call the governor, call the mayor with the good news and say, hey, your project got picked we're working to make the process as easy as we can. it can be simple kind of things, a notice of core funding opportunity, making sure they're less than a hundred pages, that they don't proliferate in terms of how complicated they are, making sure we have processes where we're helping some of these project processor. it's the rans it's agency or the city or the state d.o.t. that we're funding, especially the smaller ones that don't have that much experience some of the rural areas, you can't just assume they're going to have a big, as long as those

core policy objectives are met, that the process is fair, that it environmentally responsible we're not going to keep everything the way it always been, let's find ways to mac it simpler and easier any time we can. >> but you've never run into some roadblock and just go oh my god! maybe the republicans are on to something here in terms of red tape and -- have you ever thought of it? have you gotten to that point now that you've got all these great things to do and it could take you eight years to spend in money, mr. secretary >> look, time is of the essence, especially when you look at escalating costs it matters in a big way the difference between getting something done and in two years leveling on some of these massive projects that could take ten years but can we make it

more like six to eight we're saying what can be simpler? any time we see that, we're going to try to root it out. >> i don't want to make you mad or anything, we're having a nice conversation but just talking about inflation, it's coming down now and the administration and president biden is going to take credit for it coming down my only question is whenever we talked about it in the past, it was never anyone's fault that inflation was bad here there wasn't the spending during covid. it was the entire globe, it's around the globe it's putin we can't do anything about it, it's inflation, it's global. but now that it's coming down it's like look what i did, i brought inflation down that makes no sense.

it's not logically consistent. >> i don't think that's quite fair for a couple of reasons first of all, these international comparisons. yes, we pointed out that inflation in the united states was not something that was just happening in the united states, it was happening around the world. but weep also pointed out all the ways that we were doing better than a lot of our peers around the world, that was true in our economic growth being the fastest among the wealthy countries recovering from covid and it's better now in terms against the fight about inflation. with we responded with a recipe of what we were doing that i think makes a difference some people assad your inflation reduction act is going to lead to unflags going you here's what happened we had a problem with inflation, we passed an inflation reduction

act and inflation is going down. >> has anything been implemented yet? we couldn't be seeing the benefits of something that hasn't even happened yet >> well, look, it's definitely -- people were saying this was going to cause markets immediately to respond by moving in directions that are going to be inflationary. the. >> addressing things that we know contribute, the transportation case, we talked a lot about supply chain issues. that helps keep shipping costs down and i do think some of the work we've downthere or whether we're talking about supply chains specifically, we still have a lo of, uin, ticketing our ports

where we need to be and look at where we are yoo or frn and he said, well, you can't control the weather. you told me in the past you can control the weather. no, i'm kidding. let's not go there but you have told me in the past we are going to control the weather. and now you say you can't control it, so -- >> i don't know if that's a climate thing or what but i'm going to let it go just this once >> that's what i was getting at. back when when i was mayor, if it was a good day, i'd say it was us if not, the county can take credit for that. >> i know, it's going to control the world. like you said, it's a hard job now, isn't it?

the buck stops with that something could go wrong goes wrong. and there was n of thanks for having me on >> all right, you're welcome thangs coming up, a wrap of the stay tuned "squawk box" will be right back.

>> is the business sort of more challenged than when you returned welcome back to "squawk box. the futures right now have gotten even stronger, up 163 points united health care, jpmorgan both helping the dow but now the nasdaq is actually in the green. the s&p continues to add marginally to its gains for the week of over 100 tom lee predicted points look at the treasuries which have been well behaved in terms of of yields. oil prices, 76 now that's significant the saudis were panicked it seemed like. it's good for them it's back

above 75 >> on crypto here, a judge in new york ruled it is not necessarily a security on its face the news giving hope to krcrypto investors. bitcoin and coin base part of one of those lawsuits by the sec and crypto prices across the board are little bit mixed though we did see the bulk of action on yesterday's ruling today the u.k. competition and market authority said it will extend the deadline for review of the takeover by six weeks. the regulator has appeared to soften its tone. they are considering ceding control. regulators are trying to pause

the merger from going through, though it's been hit from legal set becky quicks and hollywood actors are headed to the picket line. their union was unable to reach a deal with producers on issues ranging from wages to health benefits to guardrails over the industry's use of a.i. and residual payments based on streaming. fran drescher spoke on the unanimous vote to walk off the job. >> actors want to work, performers want to work, workers want to work what is this maniacal need to put people out of business because why? you can save a nickel or a dime? it's sick. >> and writers will also strike at the same time and that hasn't happened since the early 60s >> and leslie picker joins us with a wrap.

all largely better beats, leslie >> yeah, beats across the board, citi, jpmorgan reporting and wells fargo and jpmorgan raising guidance for full-year net interest income as a measure of profitability from loan making thanks largelies to the impact of higher for longer interest rates because banks can charge more in interest when rates are higher net interest surged from jpmorgan, up 40% and that's excluding the $17 billion gain on purchasing first republic they've been highlighting the resiliency of the u.s. economy while drawing down on deposits also a surge in the quarter thanks to higher rates in a stronger that an expected u.s. economy. quote, will likely be economic flowing remain

offices represented just about 3% of total loans as of the end of june. so a fairly small fraction of its overall balance sheet. the ceo said he expects more weakness in the market and it will be a while before we see the end of it. citi's net income declined 31% due to high cost of credit and lower revenue, the firm said there were some divestiture costs due to the severance of their mexico business. and the brougader sector ha been under pressure. the three getting a very sizable boost on premarket trading so a beat and increasing guidance, guys >> have you been hearing anything so far on the calls,

leslie, regarding where the bank sees interest rates and how that could impact we have seen in recent days even a big pullback >> that was a question that was part of the media call with jpmorgan executives, wlosht the newer optimistic numbers changed the dynamic this and they basically assad or looking at other tail winds facing the consumer in terms of just running off all of the savings they had collected during the pandemic those are all still part of it and inflation still continues to effect them as well. they in terms of jpmorgan hasn't really changed the di nap. >> the other key mover based on earnings out this morning, up itsed health and bertha coombs

joins us with details. you did it hours ago you don't even knee a teleprompter you have it memorized what happened now, don't you, bertha? >> pretty much i haven't been using teleprompter here. we did see a beat top and bottom line. the earnings came in at $6.14 a share, that was much better than the expectation, up 13% year over year. nearly $93 billion on the topline revenue, up 16% year over year. also a handy beat on the estimates and as far as outlook, they're raising their outlook just slightly, mostly on the bottom, about 20 cents one analyst calling this sort of better than feared, especially when you look at what was happening in united health care, the insurance side you'll recall, a month ago, they warned and said, hey, we're seeing a lot more utilization when it comes to people wanting to get back to getting their knees replaced, their hips replaced, but a lot of that is outpatient surgery, so when you

look at the united health care, they actually beat there on revenues, coming in at just over $70 billion. their medical costs were in line with what they had warned. that was going to be at the high end of the previous guidance what's interesting is that they saw their medicare membership up a little bit less than some on the street were looking for, but the medicaid membership has held up really well, and remember, with the end of the public health emergency, a lot of people are coming off of the rolls, and kaiser health said two million people have already come off the rolls, but they haven't seen it at united health their medicaid membership was higher than analysts were looking at the services side, interesting otum was up 25%. the optum health, which has that outpatient surgical, surgery

centers, also the doctors, also saw some pretty nice growth. the pharmacy benefits up about 15%. but their margins, they're a little bit less that be expected because they're spending more to expand those services. nonetheless, this morning, united health up, handily, off a 19-month low and it's giving some air to some of its peers. you can see humana getting a nice boost as well it's a little bit of sort of sigh of relief that maybe these guys will be able to handle that increased demand back over to you >> $416 billion company now, bertha it's been amazing. >> yeah. >> since obamacare, too. >> the call about to get under way, by the way, in just, like, right now. so, i'm going to hop off >> you're going to be on it, right? let me know, actually, at 9:00 i don't know i may not be that interested i will be. call me, bertha. let me know if anything comes up thank you. you want her to call you too

you could use it tonight if you find out anything. >> i'm off after this, so sure one could use it tonight >> someone could coming up, what to watch ahead of the openingel bl on wall street. stay tuned, you're watching "squawk box" on cnbc

little more than half an hour to the opening bell on wall street joining us now to talk earnings, liz young, head of investment strategy at sofi great to have you with us. bank earnings were good. does that tell us anything about earnings season overall? >> yeah, i mean, it's off to a good start with bank earnings, and this usually sets the tone, at least from a sentiment perspective on what we might hear from other ceos we haven't heard all the comments yet i think the big banks have a really good lens into consumer activity, consumer borrowing activity, and obviously there's still some risks lurking out there, but i think that financials are trading at a really attractive multiple right now compared to some of the rest of the market, and haven't necessarily participated as much in this recent rally, so if you're an investor and you must put money to work right now, i think that you can start looking at some of those diversified revenue streams that financials are offering >> we had steve eisman last

night, and he said banks, they're not interesting, were his words, one of the reasons because of the increased capital requirements that are still to come that we don't really understand yet, and i'm wondering if that's a factor at all in your view he said you could hide out in jpmorgan, but that's not really going to get you a lot of upside >> well, the other thing about big banks in particular, not interesting in the sense of, they're not a.i.-related names, not things that are going to see an 80% year-to-date return so maybe not the sexiest of opportunities from an upside perspective but you want to have that diversity, particularly if you think the economy is still going to slow down a bit you want to have that cyclical exposure on the other side, and the stress that banks went through in spring, i think, brought their valuations down to a more attractive level. that's not to say they wouldn't come town further if we didn't have a recession, but you can look at them and try to figure out which ones are really exposed to the commercial real estate risks that are still out

there, really exposed to possible credit spreads blowing out and some of these ones, like i said, with diversified revenue streams might be able to hold up much better. >> we've been talking about the move, dramatic move in just the past few weeks, and i'm wondering, from your standpoint, it's almost like a glass half full, glass half empty on the one hand, it's a goods underpinning for valuations here and could allow the stock market to move higher, but if you want to read the message of the ten-year note, it may not be a good one when it comes to the outlook of the economy >> the move in yields that's happened this week, i think, was in direction reaction to softer cpi and softer inflation i don't think we've necessarily hit the point yet where yields are coming down because people are afraid, but to your point, i think that the rally that we have seen in stocks right now requires a move in yields down to even just justify the valuations that we're at i don't know that it's a move down in yields would drive it up

further. i think it has to justify the level of valuations that are current. looking forward, if we get into the second half of the year and now, of course, we're transitioning into a new part of monetary policy, this sort of hold high and pause, i don't think that we're going to see, necessarily, another hike. i know the market still believes that we will i don't think it's guaranteed. in any event, we're going to see few, if any, hikes in the second half of this year. yields are going to have to sort of digest that, and what we've seen in the last few months is that stock valuations have moved up while yields have moved up as well and that's not the relationship that typically ensues. so, something has to give in that space i still am not sure the market has decided whether or not stocks need to come down or yields need to come down my take is that stocks probably have to give up some of the steam they've gained in the last few months >> liz, good to see you. final check on the markets this morning, we've got green across the board

the dow is the strongest, some earnings-related moves in some of the individual components like united health and jpmorgan, lots of banks today, always glad to get those out of the way. they always lead off earnings, but that means there's a lot more other companies next week >> tech. >> thanks for being here >> always a pleasure >> spent a lot of time together this week. >> it's been special >> be sure you join us next week "squawk on the street" is next ♪ good friday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer david faber is back at post nine of the new york stock exchange bulls looking to wrap up the biggest weekly rally for stocks and the banks will head up today. return on equity, import prices down six year on year. that's adding to this week's disinflation theme our road map begins with the