case against amazon, details straight ahead it's wednesday, july 26th, 2023, and "squawk box" begins right now. ♪ good morning, everybody. welcome to "squawk box" here on cnbc we are live from the nasdaq market site in time square i'm beck request quick along with joe kernen. andrew is on assignment in los angeles, and he'll join us a little later this morning. u.s. equity futures at this hour, take a look. whoa that's the first we've seen that in a while red arrows these are not significant declines, but you're talking about the dow, which has been up for 12 sessions in a row that's the longest streak since february it's now at its highest levels since february of 2022

the s&p is also at its highest level since early 2022, or last year dow futures down s&p futures down by 3. the nasdaq down by 21. this has been a slow and stt melt-up. i don't know ite goes to be 4% or 5%. >> i'm ready for -- it's just like the reds. >> yesterday i wore green. futures were -- >> that's from "caddyshack." >> today it's red. >> that's smart. put it together, that's christmas. remember, they broke the streak? >> they might have done 13 but they won last night, beat the brewers. >> there's the streak. that's the run we've been talking about. i think -- last week it was like 4% before we saw any of these additional like the last three

-- >> the nasdaq has taken a little bit of a breather after being up. >> it was the best performer yesterday. >> yeah. >> but, again -- >> we're finally getting into tech season, too, so that will be good. do you know who's here in person and who's 6'3" >> i was going say steve kovach. >> i'm not 6'3". >> he's a tall -- see, now i understand he's like this looking out at the interest rate environment. he's looking around. >> it's a higher view. >> there's nothing in his way. that's why he can see so clearly, i think he'll be out in a second handsome man i said, did you already go into makeup >> no. and his hair. >> oh, my gosh i was moved. i was moved. >> coiffed -- is that a word >> coiffed he'll be in studio

said, oh, my god, you're a tall man. we've never met. >> are you kidding he was here before. >> maybe he was sitting down by the time i saw him i don't know i'm guessing at 6'3". microsoft shares are sliding. i don't want to make you feel inadequate. >> i'm fine. >> you're fine. >> not 6'3". moderately handsome. >> you're 6 feet or so >> 6'1". >> my man. that is half the game. all right. >> let's talk about motte shares after that company failed to provide specifics of when it would start selling its new a.i. tools on its earnings calls last night, still the company beating on the top and bottom lines. revenue, up 8.25%. microsoft reporting 26% growth

there. that number was 40% in the year ago quarter. as for a.i., front ran this report with the announcement last week investors were waiting for. pricing for co-pilot that's the a.i. feature fur apps like microsoft outlook and word. that's going to cost $30 per user per month but shares started declining when it would start selling co-pilot outside a limited group of customers testing it right now. cfo amy hood said on the call the company would see growth from a.i. services like co-pilot but said that growth would be gradual. it would not happen until the second half of the fiscal year translation, that's calendar year 2024. that likely means co-pilot is not going to go on sale -- i'm sorry, joe not in time for christmas -- hood warning margins for the fiscal year will be flat as the company plans to scale up a.i. infrastructure

one other notable metric, the collapse of p.e. is down guys, still likely going to be a while before we see demand for pcs and consumer electronics overall after the spending spree consumers went on during the pandemic, of course. >> microsoft is not depending on me for anything for years, i think. >> not from you. >> not from me, maybe from here. >> $36 per month for microsoft that's what they're looking at. >> that's a nice business that we never really realized. >> exactly hundreds and millions of users >> this company ten years ago supposedly was old tech and missed all the new trends. >> focusing on the cloud and a.i. and look at the stock

performance. it's truly paid off. the real thing that spooked people last night, a little revenue guidance with a little light in some points, but it's really this idea they're not going to start selling this a.i. co-pilot until maybe next year. >> but when you think about the size of the companies that are at times getting a boost from the prospects for a.i., do the math a.i. has to be a really significant -- it's got to be more than just cheating on your home work. >> and they're going to charge $30 per month on top of the $36 i just mentioned the burden falls on microsoft, right, to say it's that good to almost pay double per user what you're already paying. >> but the stock is down because it's already run up so much. >> exactly last week it was a 4% gain. >> we're looking at the cloud having lower -- >> and deceleration in growth. >> check out 41% year-to-date gains

that's why show me the money now after all the huge runs. >> and on a forward p.e. basis and the magnificent seven has gotten superexpensive. >> it's a lot less than it had been. >> $2.6 billion. >> not a small company. >> no. amazing. to twop? t top two? >> yeah. apple the other one, maybe you have heard of them. alphabet, up $76.7 billion youtube up separately the company said the cfo would step down to fake a knew role as president and officer. she'll be seeing investments across the board including infrastructure, database, andests to expand in india really it's around advertising

that is still the huge driver for this company >> look, this is still a search company. ruth porats with the architect of alphabet. nothing has really spun out of there that's been a huge success. it's still verymuch the google search company and youtube, of course, still performing okay. >> how much of a threat are they facing >> next to nothing. >> yeah. that's what the stock seems to indicate. >> revenue was up like 8% or something like that for microsoft. but it's so infinitesimal. microsoft will say, oh, we're gaining market shafrmt it's maybe 0.01% of the market share. earlier they were saying chatbot is going to slurp away tons of shares from microsoft and google it hasn't happened and it might

not ever happen. the other big news is the ftc is finalizing its long-awaited suit against amazon the suit could be unveiled as soon as august and would likely challenge a range of amazon's business practices it could echo existing cases from states attorney general which centers around retailers the offer its lowest prices on its platform the others are amazon's required merchants and being required to use amazon's advertising services amazon has offered to make con segs to address competition concerns related to third-party sellers. that stock right now off by 1.75%. we knew the ftc was looking into this, but i didn't realize all of the details until i read through the politico report, how extensive this is, how important it is to lina khan.

>> that's why she has the job she has now because of that paper. >> amazon needs to be split up. >> amazon, because of that paper, is trying to get her to recuse hess. she has not done that. look, this investigation started u under the trump administration under her predecessor. doj has already sued google. we're expecting doj to go after apple mostly on the app store marketplace, so this is just another one. look, lina khan, we know she has that losing track record microsoft is the biggest case, of course, but this is going to last way longer than her tenure. these things take years to work their way through. amazon has a lot of money, they're highly motivated to fight this thing through. >> when you say it will take years and last longer than lina khan will be with ftc, that's a drag on the company. you remember what happened with

microsoft. bill gates said it's why they went mobile. it's a heavy lift. >> this is anotherle test of the lina khan and jonathan canter theory, what continue substitutes antitrust and who gets hurt. it's not necessarily the customers but the merchants who live on amazon and basically, you know, their entire destiny is tied to be part of the amazon platform and being subject to the rules. they're trying to level the playing field for everyone one thing they seem to be going after is the idea if you're a third-party seller and you want to sell through the prime program, two-day shipping and so forth, if you don't use their logistic is network and use their shipping, then you don't show up as high in search results. they're going to reverse that because of all the scrutiny around it. that's one of many potential

things they could go after. >> steve, thank you. >> sure. it's nice to be a company where you have no idea who's going to be making the rules, and the rules are 180 degrees. >> the lina khan successor could have the complete opposite view of this. >> antitrust is so polar op -- >> exact opposites. >> polar opposites the same thing you can't get any more opposite than o opposite enough. coming up, it's fed decision day. we'll dig into that and what it means for the markets. >> plus a t&t set to import any time we'll bring you the numbers and reaction on wall street. you're watching "squawk box" on cnbc e exactly what goes in it. now she gets to pick only the perks she wants and saves on every one. and with an incredible new iphone on us,

no wonder sadie is celebrating. introducing myplan. get exactly what you want. only pay for what you need. act now and get iphone 14 pro on us when you switch. it's your verizon. ah, these bills are crazy. she has no idea she's sitting on a goldmine. well she doesn't know that if she owns a life insurance policy of $100,000 or more she can sell all or part of it to coventry for cash. even a term policy. even a term policy? even a term policy! find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com. you got this. let's go. gobble gobble. i've seen bigger legs on a turkey! rude. who are you? i'm an investor in a fund that helps advance innovative sports tech like this smart fitness mirror. i'm also mr. leg day...1989!

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well, it won't be long now there you can see it you know, can we get 100s of a second does that work for you in just a few hours, the federal reserve is expected the raise its benchmark lenning raise after a pause last month joinings us now, the aforementioned gentleman also barry knapp both of you watch the show you watch it when you can.

>> yeah, i watch it. it's the middle of the night for me in california, but i do watch your show. >> or dvr it or whatever then you know, the one thing that's been getting me, if we go today and then let's say we to do -- do do. sorry. it gets crazier and crazier and harder to explain why bond market participants are so far from where the fed is and is going. we're going to get further away. what does that mean? is the fed going to capitulate or they're going to catch up with the fed >> it may not be today today my expectation is they're just going to be talking about a quarter rate increase. and they have a very divided fed. keep in mind that even though in june they agreed to pass, it was not really a unanimous decision.

he's going to have a hard time explaining it today, that's the first one. second, whether you look at the one today or friday, it's going to be about a fed target at these kinds of low levels, inflation has a tendency to go down, and then if you take the foot off the break, it is going to start going up again, and that's the risk that they run. you asked about the 10-year. it's reflecting the fact that recession is coming. nary like 3.8 on the 10-year is a very good value for the investor because as i've been saying to you in past discussions, i think the 10-year is coming. >> 10-year coming no matter what, or the fed is going to keep going until it -- it's

going to keep going until it causes a recession >> probably not keep going repeatedly but eventually they'll have to keep increasing again until the interest and inflation rate comes down or something breaks in the system, whatever comes first. >> barry, do you agree with all of that or do you have opposing view points? do you think a recession is in the cards and that's why the ten-year is coming no matter what >> not really. i think we're actually in an earnings and gross domestic income which may very well be ending i think there's some element of the fed's policy's too tight that's embedded in the deep, deep inversion, particularly when you look at the tips curve and real rate curve, which is probably a better reflection on the fed policy we've only seen it three other

times in post-war history. october of '73 december of '79, and december of '80. those were obviously followed by very deep recessions sri's on to something with recollect to that. the other element and the reason that the 10 y-year is so anchord and so low is the fed's balance sheet. they own a third of the treasury market and tips market that turned premium that's a measure of how much risk you take on to hold the longer term securities is almost negative 1%. and so if the fed were doing this tightening differently, were more aggressive with qt and less passive, then they would probably be getting better results on inflation with respect to the housing market, for example. so i think part of that deep curve inversion, which by the way is an existential threat to small banks, not to jpmorgan but

small banks. we saw they finally had to capitulate they've been selling high-quality asset portfolios, doing anything to shrink because they can't operate in this deeply of a curve environment. to me that's the real risk out there, that the banking system can't deal with this deep a curve inversion. >> sriing the stubbornness of inflation, we had kaplan on, former dallas head president said there's still a lot of money left to spend. i thought most of the pandemic-related relief was gone that might be gone but the infrastructure bill and the i. rchl a., we're just getting started on that stuff. if you see what's going on with teamsters and u.p.s., that's where a lot of it is going on. >> exactly 2022 is a reflective time

period they saw somewhere in the range of $1.5 trillion affects savings, joe, in the hands of the public that is what is causing the market to remain so strong even though barry said you have to consider the 2- to 10-curve. it's no reflection of predictions in the past. my expectation is the recession is delayed, not denied. >> 2025, is that the cleared time i hear people in real estate, they're hoping if they make it to 2025, it will be a better picture, rates will come down, and then they can refinance on some of those deals they're involved in. do you think that's the case >> if you can survive to 2025 in the real estate commercial

estates, you will be in good shape. i think rates are coming down by the end of the year. i expect something to break. you mention commercial real estate that's one of my top candidates. the other is once again the regional banking crisis because a good chunk of the assets are under water. it's going to put even more pressure on the assets and that's where the risk may come as well. thirdly, a credit crunch with the high interest rate and credit not available, and that in turn causes problems that the fed cannot foresee at the moment. >> barry, final thoughts before we go. >> sure. i think rob kaplan is absolutely correct. i think that's the real story, the '70s every time i hear on television that the reason that inflation got unanchored in the '70s was because of the fed's stop/start, my head wants to explode it was fiscal spending and

fiscal policy working with monetary policy. read arthur burns. he'll describe it blow by blow that to o me is the rerisk there's room for the market to rally a little further, but we absolutely need to solve this problem with the deeply inverted curve. maybe the good sector will cooperate, but the fiscal policy is working at absolute cross purposes for monetary policy powell won't talk about it, which is shocking. >> so you're live, but that's the back -- the backdrop is not real have i got that right? >> you know, if it were still ski season, i would go ski season this morning because there's nothing to do before the fed meeting. >> you're up high. i know you're up high. on palm desert there's snow. >> i'm at 8650, and it's gone

now. >> but there are some good golf courses in veil vale >> at least. thank you, barry thank you, komal. all right. when we come back, elon musk's rebrajded twitter is reportedly cutting ad rates for some formats. we've got some details straight ahead. we'll be right back. in the true iconic notion of what america is all about. ( ♪♪ ) this is our task. this is our mission. we have a clear focus, and we have the ability to be agile and innovate. it takes years of dedication to get us to this milestone. it is all because of you. never doubt that a small group of thoughtful, committed citizens can change the world.

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reports that x is offering new incentives in certain ad formats in the u.s. and the uk and warning that -- warning brands they're going to loose their verified status unless they meet certain spending thresholds. this week x began offering some advertisers reduced pricing on video ads that run alongside some trending topics in the explorer tab. all right. it looks like we're just getting at&t a kfiling from the s.e.c. earnings came in at 63 cents a share. that was better than the 60 cents that the street was expecting. revenue came in at $29.9 billion. that's right in line with expectations if you run through a couple of other numbers, wireless service revenue up by 4.9% that's the biggest by 28%. broadband by 7%. adj adjusted ebitda.

the company talks about how they hit a $6 billion run rate on cost savings ahead of cost level. they're hitting it at the mid point of that at the year and now targeting another $2 billion over the next three years. i spoke with the cfo who just ran through some of the issues that the company is facing he said, look, he thinks they're in the good position they think they've delivered on a lot of the things they laid out three years ago. we talked about the debt load saying they haven't been able to cut the debt to this point they say they've got a clear line of sight on the ebitda by the end of this year, and by the first half of 2025, they expect that number to be 2 1/2 times net debt the ebitda. that's the level where they think they should be as a result, to say at that point they'll be able to spend a lot more down on debt, a lot more cash to be paying off the debt they've got $16 billion or better they're anticipating.

they say they'll pay an additional $8 billion. $1.5 billion on preferred shares more and more cash will go to pay off the debt big issues still facing the company. the debt is one of them. that's what they're addressing here the other is what's been happening with the lead-covered cable lines. they're going to do what's best for the employees. they're doing additional testing and sharing all of those results with the epa they're going ahead with that, saying they're going to continue to make sure that they follow the science in this situation on this other things that they're looking for, just things he's going to be talking about at 8:30 a.m. on the conference call, just what they plan to do with where they've come from at this point, and he says, looking over the three years since john steinke took over, they've grown their subbase by $8 million.

they've got wireless revenue up and they've doubled their fiber revenue to $1.5 billion a quarter what previously had been $750 million per quarter big issues facinging the company for a long time. the stock up 1.25% it has had some real trouble right now it's back above $15. but you saw it down in 13 and change after the wa"the wall stt journal" reports. coming up, the tech stocks on the move. we're going to dig through the reports from alphabet and microsoft. as we head to break, a look at yesterday's s&p 500's winners and losers

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live from the nasdaq market site, we're in times square, believe me, we are in a little fish bowl here with panoramic views of all the happenings. >> you know what's fun though. >> oh, it's fun. >> i have to say july into august is fun because there are so many tourists who come. it's not just the regulars who are around they come from all over the place, and you can tell they're new and in town for just a day or a week. >> it's the so-called regulars that i find so interesting. >> yes. >> checking -- including mac. >> now there are people i want to turn around and say hi to. >> i saw some things this morning, wow they're out in full force down in the 30s. >> a guy walked by me at the stoplight carrying a bottle of gin that only had this much left in it, pranced on by.

>> oh, yeah. i saw some -- it was morning, but there's still some ladies of the night around but that's new york down in the 30s. checking on the futures, we're now in the red to some extent nothing that substantial 12 straight days of the dow trading higher, which is -- i think we've seen that since at least 17, right? does it go back even further than that. >> it's still february of 17 still a 12-day winning streak. hilton worldwide reporting moments ago, earnings coming in at an adjusting $1.63. revenue of $2.66 billion also beating estimates. key me trek, it grew 19% compared to the same period in 2019 a before the pandemic and the company is also raising its guidance for the full year.

let's get back to big tech earnings with alphabet and microsoft reporting. both beat expectations if you look at stocks this morning, a little bit of a different picture. you have microsoft shares down about concerns of future growth for cloud and you've got alphabet shares up pretty sharply just on positive numbers that they reported that they're seeing going forward too joining us now is dan flax, senior analyst i know you like all of these stocks you see a lot of long-term opportunities coming. >> good morning, becky we do see opportunities. it's driven by the innovation and growth and ultimately the generation if we look at microsoft, it was solid. some may have wanted slightly higher growth in azure and the company is emphasizing, which i think is the right strategy, a significant level ahead as they prepare to infuse generative

artificial intelligence in their platform i continue to like the name. if we shift to google, what's going on is revenue is beginning to inflict the company has been investing in artificial intelligence for many years and we're seeing it begin to transform youtube, cloud, they're continuing to accelerate and it remains attractive. >> this is where -- i mean i understand the long-term promise that these companies hold, but those stocks have seen some phenomenal growth this year. alphabet is now up 47% year to date microsoft is up more than 41% year to date is there a point where you start to say, wow, okay, this is a little rich, i'm going to hold off, or is this just such a great long-term play that you're talking to long-term investors and saying stay the course, this is going to be something you're going to want to be in for

years? >> i think part of the move reflects a rebound from the selloff last year. with google and microsoft, it's been clear over the first half and i think through the second half, they're able to navigate the significant headwinds. they're able to cut costs in places and continue to invest. i think what the market is going to look forward to into the back half is what do the 2024 and 2025 growth numbers and the free cash flow generation, what does that look like i think we will see revisions higher over that time frame and so i think that can help support the stocks and drive further out performance even given the moves they've had year to date. >> you've got a pretty similar thesis for amazon and apple as well, correct? >> it's predicated on deliveries to prime and it will help margins the other key piece to the

amazon investment framework is you're on the clouds by where there are certainly customers optimizing workloads, but we see attractive growth over the next one to two years helping workload scenarios this obsession with customers, if we shift to apple, is something we also see on the device and services side with apple. so apple, too, is facing cyclical headwinds but if we look at the broader ecosystem, really the notion of empowering others to build on top of its platform, we see attractive opportunities iphone 15 will rew e lease a new cycles services. growth will occur over the next 12 to 24 months and growss margins should remain. >> what do you think of the an

-- antitrust you heard amazon may be having to break down, the department of justice looking into some of the companies too. is there anything that makes you think, okaying these things are so powerful and so great i need to worry about what washington does >> regulation remains a risk, and i think both here and in europe and in other geographies, regulators and governments are rightfully looking more closely at these companies i think all of them, including amazon, need to drive or deliver more transparency and engage even more with regulators and governments. there is risk that perhaps one or two of them could be broken up we'll have to see how that evolves. when i step back and see what's going on, competition in all of these markets for amazon and e-commerce, competition is fierce, and if they're able to drive value to users, to advertisers, really a lot of the participants, billions on their

platforms, i think that sets them up well again, regulation is a risk. >> dan, thanks >> thank you. >> thank you. coming up, snap shares plunging on some disappointing guidance details after the break. reminder, get the best of "squawk box" in our daily podcasts follow squawk pod on yr ou favorite podcasts. listen any time. we'll be right back. (vo) it's time to switch to verizon. sadie did. and now she has myplan. the first unlimited plan that lets her choose

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welcome back to "squawk box," everybody. among today let's movers, we've got snapchat shares down about 18.5% after the company's quarter guidance came in weaker than expected. that's overshadowing the share loss that wasn't what analysts expected, but take a look at the stock this morning shares of wells fargo are actually higher after the bank announced a $30 billion share buyback program. the board also approved a previously announced dividend hike and that stock is up by 2.7% and texas instrument shares are falling. the range fell mostly below what the street is expecting. coming up, we'll talk to someone who does the top note. bottom's up. her best investment ideas. and then a reminder you can

watch or listen to us. you can either do the podcast i just told you about, or -- we're all over the place a cnbc app you can listen to us any time. my dad was a hard worker. he used to do side jobs installing windows, charging something like a hundred bucks a window when other guys were charging four to five-hundred bucks. he just didn't wanna do that. he was proud of the price he was charging. ♪♪ my dad instilled in me, always put the people before the money. be proud of offering a good product at a fair price. i think he'd be extremely proud of me, yeah. ♪♪

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thank you for joining us. >> were watching stacks. this is very hard work. we have 29 analysts and the whole idea is to find companies that have had a setback operationally and they have done something wrong and that can be rectified and that would reinstate earnings and then you get this upward trend. you have to believe in the management. if they have done something

wrong or is it just the management sounding the alarm? >> typically it's the new sheriff in town. the board at rolls-royce the board share wanted a better ceo and got one. that ceo is restructuring. it is not just the recovery it is flying hours that are increasing. there is an individual on behalf of the business creating this with better pricing and contracts and there is more to go. >> do they make the cars? >> no. that is something i say because brady is going around. he is the new squeeze. >> willie this up. >> it is the aircraft engine.

any of the problems coming in? >> not necessarily. >> pre-pandemic because they had an aircraft engine problem. that can be a reason to buy into a stock like that. the pandemic led to the grounding of wide-body aircraft and that was a total disaster. >> if people have been asking you, are we going to resist this would you have cared about any of that what was going to happen or are you totally focused, to ask stents that they got ahead of themselves maybe you can look at this. it markets could bring us an

opportunity and our team is very interested because this could be high. whenever there is a crisis or selloff think about the chance to buy the great company. sometimes it is catching falls and sometimes there lower lows. nobody knows. it is that the question everybody asked. that is dollar cost averaging and you can lower the entry price and it is helpful because you don't know where the bottom is. rapid evaluation helps. you need to understand how irrational the market has become. let's say samsung sold off the problems they had with access inventory of memories ship has gotten too close to book value,

that is the time to start buying. >> what else you have over there? >> in household products we have been keyser, new ceo and great lineup of brands. we have more consumer staples then we have had in years because of the concern about market slippage and the slowing economy. we have this tightening and inverted yield curves. it is a tightknit situation overseas especially in europe where economy slow quickly. there is a greater transition to have this associated with his variable rates and you take a slow term sharply. that gives us the chance to position some defenses and you

use it and they outperform markets and go down less. when you buy cyclical stops, it has to be when the opportunity presented help. >> to go everywhere like india? >> we go everywhere. we have a quantitative approach in india in emerging markets. i would have said several months ago that the best place to go could be china and now they are bursting into flames. this becomes the stock that are so beaten up. my colleague head to our technology portfolio and we could accumulate some of them and those valuations for world class companies because they are so glazed over it it might be too much. >> is just agnostic.

if it is saudi arabia and you find something you get it? >> they have to have liquidity. you are not looking at other nuances of those. coca-cola, think the prices are out there. it's good to have you in the studio. >> let's look at coca-cola coming in. $.78. that is six cents better than it was looking for. revenue also beating expectations at $12 million. they were looking 11.74 billion. this echoes what we have seen for pepsi earlier. i want to look through the release because it is raising guidance. it looks like -- digging through on this, some updates. it will take me a second to find this. anyway they say they're raising the guidance and expect to

deliver organic revenue of eight% to nine%. that is updated for the revenues and three to four% lifting from current rates and include a one% headwind on acquisitions and structural changes. given these considerations they are now looking to deliver currency neutral earnings of nine% to 11%. 5 to 6% versus $2.48 in 2022. >> let's look at the sckupto, by three quarters of a% and we will be right back. >>

good morning. quarterly results from apple and snap. what is moving in the market and it is decision day for the feds. reviewing what is ahead and what that could mean for your portfolio. >> a markup as congress lays

the groundwork for regulating crypto currency. we will hear what is at stake for investors. squawk box begins right now. good morning and welcome back to squawk box. we're live at the nasdaq market site. we are counting down the time for andrew to appear on the show. that will be at 8:00 and we have this thing happening where we have an actual clock. >> he will join us from the pickle ball convention. it's a big sport. >> it is. >> the guy who does this is a pickle ball guy.

kevin durand, is that going to shoot you? >> you can see it, the nasdaq is up 42. treasuries are indicated that we are watching almost 3 months and now it is almost 3949 over two years in the 10 year. >> coca-cola reports they raised tenure guides for the second quarter after reporting 78 cents. revenues came in ahead of that and the street had been anticipating lower earnings. this is in line with what the street is a acting. earnings per share of five% to six% over last year's numbers. that is about 5.2% increase from last year. guidance is where this is going.

strong numbers and guidance from earlier. people anticipate coca-cola would have strong numbers. up by 1.5% right now. let's get over to done with the premarket movers. what he watching this morning? what is on your radar? >> it's all about earnings. a big headliner driving action comes out of those results. at&t is up right now 2.5% and two% -- i don't know what the volume is right now. mixed results. profits did top estimates. wireless subscribers group. it was on the bigger beat in the amount of cash flow generated by at&t which will be used to pay down debt load. the positivity rating is just

about one% to two%. then you have a big plunge in the shares of snap and over half 1 million shares. it is the parent company of snap chat. the current quarter forecast came in below. on the plus side the daily active users group by more than expected. the stock is down 18.5%. >> in early action it will be the impact of google and alpha. these are moving in opposite directions. the drop in microsoft by three .5% and 300 shares per volume. artificial intelligence is better than expected results. slower growth for the cloud

environment. 300,000 shares of volume. also busted expectations. you can see the difference. they announced there will be a new role for the chief investment officer. this is the kind of movement we are seeing and it shows that there is no real trend tree in tech. sometimes the fundamentals matter. >> i don't know. it seems a little fickle. investor have been cheering ai investments and part of the disappointment may be that those are going to continue. it felt like you show me the money. we have been getting the backup and never going to question the music. that is the longer-term tour and? is it all one thing per day.

>> if you look at the long-term charts for both the stock they outperform and a lot of it has been bid up. i think the reason there was underperformance and alphabets have a lot to do with the perception by some investors that it was lagging behind in the cloud computing side of things. this is interesting. the components of much larger tech conglomerates had focus paid on what that looked like in azure or the google cloud side of things an amazon. after that might show it has a sign of life. >> thank you. decision day. we haven't mentioned that yet. we're joined with steve with

more. did you get any sleep? >> no. i was up calculating stuff and then biting the faa trying to get down here to decide i was taking a train. >> i think that is pure excitement. >> yes, of course, there is that. >> let me explain what the feds will do today. there will be a rate hike after one pause. that brings the rate up to 5.38. we wonder if this is the last hike to come. 97% probability of a rate hike and then a 40% probability back in november two rate hiking. we will take that second hike update more seriously and watch the number after the meeting. let's look at how the data has changed. unemployment rates are going down between meetings.

payroll growth is strong. the cpi is four% to three% so why hike? >> the economy is not weakening. this is the first-half estimate using the actual number and the estimate for first-half growth. it is gone up half a point. the second half is up by 0.8 percentage points. what is happened to the second quarter forecast will be given a real number tomorrow. look at what has happened. we started off in november with the survey showing it was going to be almost -1% and now the prediction is 1.7% and the dow production is two% tomorrow. you're not getting the weakening forecast. we keep predicting it will weaken but what is going to

happen is important. we keep the possibility very much alive. >> the fed is not done yet. >> a good way to live your life. >> i am caffeine dependent. >> i agree. it is -- the fed is watching this and they are into this every other meeting mode. i think that is how it is being played. >> okay. that was a rude awakening for catherine. i knew about that but i was under the impression that the pandemic overkill in spending had dried up and when you added what has been done since then which, depending on what you believe it may not be great long-term but near-term there is a lot of money that is still going to be spent hiring people

and building things and in this environment where people can ask for more money i think maybe there is, for the next couple of years or more, that is the level of pressure, wage pressure. >> i think that is right. we have to figure out ways. this is the data and the younger people, 25 to 54-year- old are back in the workforce. there is no huge increase in those in that age group who are not in the workforce. it is the 65 and older crowd that took great retirement packages and said back at them out and they have not come back in. we seem to have immigration backup to prior levels and we ought to think about weather to bring it up to stronger levels and i don't want to be cranky but i have to talk to you about the fiscal spending. i have been going like this and i should've gone like that.

>> yes. and it takes a lot for you to talk about it in a cautionary way. >> from the beginning of this package i my host was, i like giving money to the local and state governments. the local and date workers were laid off and why would you put them on the unemployment line if you could avoid that? that makes a lot of sense. just to be fair, the fine people would argue that there was a national security thing with the chip development. i think there is some justification for that and then they have priorities and climate change and it's not yours and not for many people. >> energy is mine. >> you like the changeover? >> no. >> i like the energy we have.

i think we need to deal with this. >> your anti-energy by the administration will preside over gas production rather soon in the united states. >> natural gas is great. the problem is that you find it when you are drilling for oil. >> okay. so steve, we will be waiting and watching and we will wait for the feds to visit as well. >> when is andrew coming back >> i think we have a countdown for him. about 46 minutes. >> okay. see you. >> take care. when we come back boating on a bill to develop a regulatory framework for crypto currency. it is a milestone for capitol hill.

a long time coming. we speak to fred hill right after the break about that. check out crypto prices. 29,200 for bit going. we will be rht bk.igac >> (vo) it's time to switch to verizon. sadie did. and now she has myplan. the first unlimited plan that lets her choose exactly what goes in it. now she gets to pick only the perks she wants and saves on every one. and with an incredible new iphone on us,

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later this morning the

house will begin the markup of two digital asset bills. the agriculture and financial search committees they will establish a regulatory framework for crypto. it will protect consumers and participants. turning us with the deal is the vice chair of the financial services committee and chair of the digital assets subcommittee in the hill and playing out the idea behind the visual and i don't want to get too excited actually i do want to get excited. what are its chances? is this finally it? it is bipartisan, right? >> good morning. we worked hard, over one year on a bill with democratic colleagues to find a pathway with coin legislation to find out what is table coin is an how are they measured, audited and how are investors protected

and we continue to work on that and we will bring it to market this week. we have regulatory framework with what is a digital asset? how do you trade those, where do they trade? on commodity exchange or security exchange? how are investors protected and innovators interested in the market? >> was in charge? >> do we know? i think he passed away but who is in charge. >> in this country who is in charge? do you have any idea? >> what congress so in these bills is allowing us stable going to be issued under of regulatory's team supervised by the federal reserve. so that is the pathway. it can be a federal or state

pathway. for crypto the sec is in charge and if it is sick commodity the cfc c is in charge and you can be duly registered to change these on the proper changes or securities exchange and you can put to rest what is the test on how someone can determine if an asset is a security or a commodity and we think that brings a lot of clarity to the market for integrators and investors and they finally have the protection they need that they have not seen due to the collapse and other crisis that we face with the crypto environment. >> okay. do you talk to people about how to do this? i may have asked you that and you said yes. it affects everyone. is your consensus the way to go

on this one? >> we are going to work hard to get another committee this weekend create consensus in the house and then we are working with senate colleagues for the path they perform. we need the stability of regulatory framework and i don't think the sec as the statutory authority to do what they need to do and we know for fact that the cfc said they don't have a statutory authority that they need. this will give the direction to the fec and scc what is the framework? >> okay. it is not what i normally cover but it is interesting to note here about additional topics. far be it for me not to put it to someone who would know but picker mccarthy had a look into

biden. you think that is something -- it's very strange. i think if anything comes from it will have to be congress. this is a post. every day they have something in eyes was looking through the "new york times" and did not count on this paper to walk in and help you. i don't think. i don't understand it. it is confounding to me because it's a great pentagon pater like woodward and bernstein investigated judge in holding people to account. i don't see it happening. the only way will happen is if you do something. you think there is something going on? does something smell funny with all this or is it just a bunch of lala a lot. >> there is something that doesn't smell right here based on the materials that the

oversight committee have reviewed. we find inconsistencies with what president joe biden has said and disconnections to his sons and business dealings when he was vice president. >> we can even talk about it anymore. >> the press secretary says it is the same it has always been he was not in business with hunter. that's not the same answer. >> i think that is what you see chairman comber focused on, differences of authority and i don't think they give it a loo . this is evidence of an inquiry. you want the insight to follow and go where it leads. it needs to be done appropriately and it is the opposite of what speaker pelosi agreed to with the investigations of trump and what he is done. she had to do it.

i was saw her and thought of this yesterday. what is in the charisma of ukraine and talking to and withholding the money. it had to be done. the same thing would happen live. >> that's right. i think it's being done in a deliberate way. they will follow the evidence where it leads. they're getting good cooperation. this demonstrates a serious list of what is happening. okay. thank you. >> it's good to be with you. >> thank you. it's good to have you on. maybe those speakers will come back on and explain things. >> when we come back dennis lockhart will join us to talk about the feds and what they do today and in the future.

>> we are awaiting earnings from boeing after numbers and market reaction come straight ahead. bus more. we will be right back. >> now the trivia question. how much was the toll to cross the george washington bridge in 1975? >> the answer when squat box continues. >> 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? gaaaaaaaaaaaap!!! aflac! aflac! gaaaaaaaaaaaap!!! it's about to go down, baby! aflac! aflac! stop that goat! get help with expenses health insurance doesn't cover at aflac.com

now the answer to the trivia question. how much was the total to cross the george washington bridge in 1975? the answer is $1.75. i want to see that number inflation adjusted. that is a decent chunk of change. >> when we come back, good by quite quitting and hello lazy girl job. i did make those names up. now tick-tock trends promoting low stress careers to enjoy for the rest of your life. >> susie wrote about it in the journal. what is it 9:92. that is a lot

less. plus the naps you need to take. >> and let's get a closer look at that and then digital stock market up. we are waiting for results from boeing. boeing. you are watchingng, ♪ to help yo untapped possibilities and relentlessly work with you to make them real. ♪ the first time you made a sale online with godaddy

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the stock is ticking higher than it was just a couple of minutes ago. it looks like it is accelerating. we will see when it is all said and done if it is over or under. >> better than expected numbers for the second quarter from boeing. they had a no more than expected loss of $.82 per share. the street expected $.88. revenue is 19.75 billion. 1 billion above the pre-cash

flow. this one gets a lot of attention. 2.6 billion. the estimate was for 127 million. some can be plain because analysts may not have anticipated the events payments that go with orders of late in the second quarter. that is well above the street estimate operating margin is -2%. they have charges in the second quarter related to space programs totaling $514 million. now let's talk about the guidance. reaffirming the 737 production. it is transitioning as we speak to 38 per month. we have known it is going to happen and they are reaffirming guidance for 37 and 787 delivery guidance. that is not changing at all and reaffirming the pre-cash flow for the year of three to $5

billion. there is a lot to discuss. we will talk with dave calhoun. these are better than expected numbers across the board and the first time in two years they have done better than analysts expected in terms of earnings. a lower than x back to the loss of revenue and cash flow. >> okay. >> thank you. >> the monetary policy meeting kicks off today. we bring in dennis lockhart who is a professor with the school of international affairs at georgia tech. dennis, thank you for being here. i am guessing -- >> good morning. i'm guessing you think they will raise rates just like everybody else in the world? >> yes. a number of voices advocated that and there was very little

pushback on that idea. i think they have to follow through with that today. >> you have been in the room before. what will they talk about the day and what will they be checking out and what are the considerations about weather they raise rates again? >> i expect there is discussion about what is the real underlying rate of inflation. inflation is a month to month with lots of noise and trying to discern exactly what the underlying pace of inflation is. it's not an easy task. so i think they will look carefully at the inflation data. obviously, it is continuing to be the number one priority and they have to figure out what they are dealing with exactly in this last phase of rate increases. >> if you were going to be

voting or thinking about what to do next, what would your suggestion be in terms of how good you think this is going today. >> the interval between this meeting and the september meeting is longer than normal. they get more data coming in in the next few weeks. so that gives them a bit more information than they normally have between meetings to really figure out what they are going to be dealing with as the fall unfolds. i would say let's keep our colds close to our vest and not indicate a definite move in october or even september. you can take the advantage over the coming weeks. i point out that normally this

is the speech of jackson hole. it gives them an opportunity to really explain the reaction function of the committee in the final phase. >> you think that a second hike seems unlikely at this point? right? >> i do. there was discussion around the june meeting about weather they could substitute bank turbulence and credit tightening or another rate hike. the turbulence seems to have calm down. there is news this morning of another merger that takes a week bank off the table. so, that is not in place so i think there will be one more rate hike. >> we have been watching the markets. the dow is up 12 sessions in a row.

how big of a concern is that with the feds in terms of additional stimulus or people just feeling better about things and spending more as a result. >> it is plausible that the strong equity markets are seeing an upbeat consumer sentiment. net consumer demand is being strengthened by people serving. i think it is a factor in looking at financial conditions the fed said that question a little differently than perhaps wall street does because the equity component is less important. it is interest-rate that i think matter to the feds in terms of overall positioning of financial conditions. >> if you look at the treasury market they don't seem to believe that the fed will keep

rates higher for longer. do you? >> i do. i am in the higher for longer camp because i think it will take very convincing data which is a series of consistent reports to convince the fed that they are going to achieve their two% target and it is sort of a natural -- how should i put it -- a lagging effect in terms of policy. it takes a while for all that evidence to accumulate. >> what if there is another ground or turbulence in the banking sector? with that change defaults when it comes to real estate? >> anything the policymakers say about policy is conditional. you have to start with

assumptions of continuing stability. if they have another bout of financial turbulence and banking system turbulence, it certainly is going to factor in and perhaps be a cautionary point as they formulate policy in the coming months. >> thank you. >> thank you. >> the chances for 13 look a little bit better, i think. microsoft is down a lot but boeing is going. you have to get through microsoft being down. you can do the math on the dow component. where the futures are down 22. it is possible. let's get a quick check. a coup reported earlier. it is the second company. it winds by six cents in

revenue came in ahead. $12 million . the company raises its suggestions. they can do all kinds of things now. >> that's right. >> new this morning, susquehanna and guggenheim placing bets on alphabet. we will have more in just a minute. squawk box we'll be right back. >>

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coming up lazy girl job. i'm not saying any of this is on the telephone from there. the tick-tock trend. we're checking out the future and down 20 on the down. >> might be 13, you never know. it is probably depending on what the interest rates go too.

conflicting dow opponents. boeing is up and microsoft is down. among others. >> list check this and now becky is going to introduce something? are we going to break? >> okay. let's go to break. >>

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hello lazy girl job.

that is the name of the career trend, low stress job to favor a work life balance. joining us right now is school of business professor susie wells. welcome. >> this is what i have not heard of. what is it? >> i had not heard of it eithe . it was brought to my attention. it is a trend and a popular one on tick-tock were life coach starts with the twentysomething life coach advocating for young women to take jobs 60 to 80 k, check in and do very little and then clack out and collect your paycheck and then focus on what is happening outside of work and become an amazing human and

i saw this and my head did not explode but i did like it. it is more of what i've been hearing which is it was not so much the word lazy, i think they don't want to be lazy so much as what i generally experience which is avoiding anxiety at any cost. this is what drove me to go to speak to a psychiatrist and say what is going on. so the phenomenon is an overwhelming desire to not feel discomfort including in your career. my -- i understand it. >> i want to feel it either but i say you called anxiety and could it just be adulthood were you have trade-offs? anxiety disorder is real. that is a true condition that can put people in the hospital and medicated. i understand that.

this is not what we are talking about, just everything that makes you uncomfortable and allows you to say i have zing dieting. eddie barbee, the first human emotion is anxiety. she has been becoming a human and she says i feel fear with no object and somebody pops up and says that's anxiety, don't worry, we all have it. do we all have it? >> maybe. >> you think part of it is parents? >> we made it too easy for the kids and we didn't let them feel any of this? >> i think that is true. when i was talking to the doctor and when we think about parenting and i am one of those parents who you work hard to keep discomfort or anything out of your kids life. that is the best intention.

we love them so much and we try to keep them from feeling bad things and then they get no practice it with anxiety and that is something that you think it doesn't kill me i can go on and i can do hard things and what you get is i can go on. but what you get is a bunch of 20 somethings and when they feel it tehey're like ow, ow, i want to go go away. >> how many of us made assessments during the pandemic and think is this what i want to spend my time and focus on and how much do you want to spend that time home with the family it's a trade-off >> i think our generation was saying being home with the family is kind of great, maybe i should do more of this i think with them the pandemic brought into their lives a lot

of uncertainty, a lot of the routines, school, vanished it was a two, three-year period where there was no visibility. they want to not have that feeling of floating. i don't know if it's so much about that and i felt this with unemployment, another trend that i wrote about, that there's a little nihilism going on, the whole world is going to end anyway with climate change and so why would i invest in a future >> the down side to the hysteri is that it's ludicrous >> i just saw "oppenheimer." >> there are times when i say it's a pain getting old, right what are the alternatives? it's a pain getting anxiety when

you're living your life but the alternatives are not living your life it's just a fact of the matter i have tried to spare my kids, i hope they've never had a bad day, neither one of them, in their entire life. am i wrong to do that? do they need to be at the school of hard knocks >> i think the answer is yes i do the same thing, joe my kids all have informed me that they've experienced plenty of anxiety, despite my best efforts. but i would say we did it because we love them and maybe there should be a swing back in parenting to say, you're going to feel anxiety, it's going to help you in the long run >> real world anxiety might be preferably to the horrible anxiety they get on social media. >> that's where the anxiety is, go out in the world. >> this may self-correct anyway

because what's going to happen is eventually people are going to react to just being bored if you choose to opt out of everything so you're not feeling anxiety -- you have to be mentally stimulated and you're protecting yourself to the point where all anxiety is out of your life, are you even living? think about a startup. i didn't sleep for the four years i was doing it but it was the most fun thing i had done but it was stressful. anxiety is really a serious condition. but i would advise everybody to do it. i'd say take a hard job and maybe the pendulum will swing back 40 hours a week to just clock in and clock out, that's a lot of hours of your life >> the worst jobs i've ever had is when i'm looking at the clock

thinking when is this done >> nothing ventured, nothing gained if you haven't learned about loss, you can't learn about winning. you can't see the sunshine if you haven't seen the rain, susan. skbli know, i know it may vently correct sem sefs because eventually they're try this life out or maybe they'll discover there is the life about getting -- i'm watching my son as a parent and his wife and they are the most present parents. i mean, i wasn't there -- >> as parents, we struggle with it and these are all the types of questions we all considered during the pandemic. >> i think the complicated fact is for the employers it's not a fun thing to have somebody who doesn't care about

the work because you're there -- >> it does kind of blend into quiet quitting, too. >> and this is lean out, too, asking people to not care. >> do i have to worry about gen-z now? millennials, i got a lils of things they're bad at. maub they're informing -- -- maybe they're informing. >> millennials, i have a real heart for them they're asking good, hard questions. >> you weren't there in the 60s. >> and it swings -- i like the

questions they're asking they make me reflect on my own life i think in general laziness wasn't one of the seven sins for no reason. i think you should care and be passionate about what you're doing in those 40 hours but they're pushing back on the bargains we made and that's not a bad thing. this whole thing with anxiety, that has got to be addressed >> that i would love to see come down >> suzy, thank you so much, suzy welch. >> professor >> professor suzy welch. >> that stock is under severe pressure this morning, down by 18% after a weaker-than-expected outlook. we'll talk about the digital ad landscape next, who the winners are and why the losers are losing >> and check out shares of union pacific, down 8 3/4%

jim bayna will take over at ceo. the business volume is down by 2% over the quarter. obviously not the earnings moving the stock this morning. it's thashe-t akup in the c suite. "squawk box" will be right back. ah, these bills are crazy. she

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this is your moment. critics declare oppenheimer is magnificent.

the new york times calls it staggering. it's utterly enthralling and one of the best movies of the century. good morning 12 in a row, the dow up for a dozen straight sessions. it's nowclosing in on its longest ever winning streak. but could the fed rain on the market parade? we're just a few hours away from another expected hike in interest rates plus, another big morning for earnings results out from boeing, coca-cola and at&t we're going to go inside the numbers from some tech mega caps all this as the final hour of "squawk box" begins right now.

good morning welcome back to "squawk box" here on cnbc, live from the nasdaq market site in times square you heard the unmistakable voice. i'm joe kernen along with becky quick and andrew ross sorkin i asked when the:is for when 8 a.m. hits. they blew me off here we are with a great shot. you got the standard dark tie with the jacket, which is the way to go, i think, right? that's your thing, right >> itory i feel like i'm sitting in julia b borstin's seat

cnbc teamed up with board room and we're going to talk all about the intersection of. >> exactly knock yourself out we'll be right back there. >> we do want to get over to dom ch hu. we tw go we will start off with one of the regional bank stocks and that's pac west it's reached a deal to be bought by bank of california in a stock swap transaction. the commonwealth bination

probably over 170 branches searching mostly communities in california for a stock swappin pac west up about 31% on that deal and they're industrial frm. >> on the early front, we're tracking a couple of bianna golodrygas twrm it also razed its four-year, if. frm so coca-cola shares about 1.5% also now tracking fellowle dow component boeing, which is higher by roughly call it 3.5% right now. aerospace and defense giant reporting better-than-expected

profits and revenues helped along by aircraft deliveries it also reaffirmed its full year forecast we'll have much more on that story in joins in a cnbc exclusive interrue and that story as it plays out with that surge in travel demand and commercial commercial aircraft deliveries >> wu shares getting hammered in the free antarctic this one frm to help them determine whether the duj tall ad is in, to a record high number joining us is al and can tro

wits how much do you take away from all this, alex >> i don't think you can read true the markets this company company and in that battle, advertisers are moving to the companies that they know can show shem and maybe amazon in some cases. it's definitely not snapchat. >> is the issue just scale my kid are engage pd too much. here what's tiezers trpz every dollar that i spend has it and i'd up the results at the

end of the day snapchat is not doing that air force base and goolle. i think that's the point that we need it lookwe have 397 average daly users and that's big! >> is that a capex issue meaning in terms of engineer be talent or are you saying they are so woefully behind it's a lost cause? what are you suggesting? >> it's probably a leader if your leadership doesn't care enough by thunderstorm but he prioritized it. wild and it made the transus to it

needed to. snapchat is more of old school advertising. put an a.r. mask on and it will get you with br to go and if you don't puts that a from we're going make sure we can show advertisers twrpg just going it look and advisers are making their decision it you it it. i'm trying to think about what the long-temperature temperature. about p after a call like this and the numbers that you're talking about, you i would this this being peacekeeper i mean, i think some people has speegle

shown that to us at this point dwrk nnk they're going to get as many cracks of so spiegel has something ups n when you think about snap -- for a very long time people thought would it be independent, would it ma had, in, where dprorks i don't know where you put twitter in this context. >> so snap is is many for young peer is bag frm they tried to shoe horn media in there have

sfrrmt there's challenges from facebook would threads and blue skies grfrms and ultimately the challenge for twitter is that people might end up going to so many diffuse different sources they're going to forget why they went to twitter in the first place and that could lead to problems for that country down the road and use and modernization. they say they complain about twitter and this and that yet it seems to me that frm is it more fractured this namt and i don't know if you plef in but they say their numbers are higher than ever >> there are reports that dispute that andrew, we both know there's an

intangible val that there is culture there right threw. and their advertising hef yu is going down they're not making golf into advertisers and that many how you go to dwm i mean, is that a long-term bet? ra rahal. >> and the t-line is calling him and he tonight have a problem with them. >> i'm holding noom thank you, alex thank you, andrew. wulia sfrechlt and at 5 a.m.

current many up, at&t first as we head it break a few frm head will has offered to change the way that nn that can actually atom (. maybe. and on a totally unrelated note, campbell soup says it's investing $160 million in a utah plant to boost goldfish cracker manufacturing because of consumerity fan. >> saltine crackers if. >> >> i like the regular little

ones we having about becomeses of them i don't like the flavor blaster either fwli like the frafr blaster. >> my kpoom. >> the new line says it will produce 500 million goldfish an hour or 15,000 every sonecd. we did the math. wow, another 15,000 just were made

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at&t out with second quarter results this morning, matching sales estimates and beating on adjusted earnings per share. the ceo is telling us the company has a clear line of sight to achieving three times net debt to ebidta by the end of this year and the company expects that number to fall to two and a half times by the first time of 2025 he also said at&t is doing more led testing. and sharing results. joining us for a different look inside is the ubs media and telecom analyst. john, what you you say today tam

the stock was very hard. people really questioned their guidance for better than $16 billion. this year they did 4.2 that's a full balance ahead of where they were last year and i think those worries will subside as a result of that. you saw nice growth of it. >> two big issues, though, still have to do with the debt how are they doing in terms of the debt, first of all >> becky, you laid it thut but

you should see that leverage come down pretty dramatically next year and we're believe by the end of 24, they'ring if to start it roo be, from. >> i know that you had a buy waiting on this and a weis fwrrms we think the financial performance is very strong and i think a lot of the overhangs that you see on the fok frchlt and get into a twol sale carrier with a cable prot are prsh frshl the lead is really the issue if we can get beyond that with the financial performance we've

seen in the company, it's in a position to get to our fresh start. >> how do you even get your arms around the lead-cage issue >>. >> >>nd p they've seen what the potential outcomes are >> that's what our clients are telling us we did a lot of work on the legal side and the yesterday they said something we're looking at in terms of scaling the potential issue, in terms of how much lead they've got in their infrastructure and then the cost per mile of remediation. to $25,000 a mile. that's what you're frk frrn and

we have said in a note that the overall impact from a remediation standpoint is less than $5 billion to the company >> i thought they had 66,000 square smiles of this cable temperature. in the water or in the air >> wem they've been asked to re of it by those environmental groups >> you this bir pausing to frp frngs and it something that would fwrk, maybe as long as a decade so f but at this point it seems relatively, you know, something

that he can handle within the,st budget thanks, megan opinion. >> many cog up on the other side of this break, we've got today's fad if the and in a couple of minutes we'll be joined by come context jiem own yap frfr you are watching "squawk box" on nbc.

all right, a market flash for you. check out shares of retailer gap. they say the company has appointed a form are executive who revived the new barbie brand as ceo this is richard dixon. he is taking over as gap's next executive and they say he is somebody who really knows how to breathe life into a brand. he does have retail experience he started his career the bloomingdale's and later -- >> we had an incredible lineup

of speakers bringing together athletes, owners, power brokers all vying to the rights of lucrative groups bob iger finds himself talking about not if but when the network goes direct to consumer via streaming. >> we are going to be making our flagship channels available direct to consumer and, yes, julia, as a part of that we are interested in partners partners that we think can make the flagship product more compelling and so we're looking at things like distribution, technology, marketing and content and, yeah, bob and i have had conversations we've been having conversations. it's early but we've both been

very pleased by what i'll call a healthy level of interest in espn >> and the hint there confirming a lot of many trying to get more original content in the mean time, agreeing to partnerships even with competitors but he does say these pivots can be tough. >> whether hastings did it with netflix that were dvds of streamings or amazon did it from a books company from prime, you need to do it with partnerships. it used to be m & a as a solution, partnerships are the new m & a and you have to work together to do it together, whether it's leagues are private

equity, i think people have to come together or wise there's going be too much pressure >> he didn't say the words lina kahn but that istnew. >> was it '14 or '15 when they played $2 million for the bombers. and what's going on here and you hear similar dynamic with the broncos and then the commanders, et cetera. look, at the end of today i come back to they're not making any more of them and they are growing they're not just growing on

their existing fan base, they're creating new fans, creating new revenue streams. the international markets, you know, from an nfl perspective, there is so much growth to go there. by the way, the nfl is one of the best business models i've ever seen in my life >> and then there's kevin durant, a legend on the court and entrepreneur off the court as i like to say, he runs nba twitter. take a look at this. >> i like engaging for the fans. when i'm working out before the game, i always enjoyed that part and i feel like this is another unique way to engage with fans you get an opportunity to tweet at your favorite players they might respond back to you you get an inside look at who they are, tap into what they're thinking >> did it ever got you, though >> no, no. at first i heard paolo turned

his phone off. >> but they hate it. >> i want to hear more of what they say >> it's sort of going viral. cannabis i don't know if you guys ever watched the interview with david letterman. he was relaxed during our interview. he talked about a very interesting meeting he had with adam silver. we'll have to get the video. we'll show it to you >> i love what he said about how he gets kind of fired up by what people say on twitter. some just take that. they take the hate i was watching some clip of michael jordan yesterday when he was only 4 out of 16 from the field one night. one of the guys from the bench said, mike, your shots aren't falling tonight.

in the last minutes he came back and won and some of those great players just take it all, eat it up and spit it back out. that sounds exactly what katie was doing. >> durant was thinking that he would take -- he said he would take mark zuckerberg against musk on fan duel or draft kings or something that seemed to be his bet. >> his take. >> in the cage match >> right i don't think that's going to happen >> do you? >> i don't know. >> i'm trying to get back to adam silver and kevin durant they left and then came back and went outside and came back in. what happened exactly? >> i'm told we actually have the video. so why don't we roll it as they say. go to the videotape. i called him and advocated

for him to take marijuana off the banned substance list. i think it was becoming a thing around the country, around the world, this stigma behind. it wasn't as negative as it was before it doesn't affect you in any negative way >> and what did adam tell you when you said this to him? >> they agreed >> oh, they're cutting off the individ video before the good part he says he walks into adam silva's office i said what happened in the office he said he smelled it. so he knew anyway, i can't deliver the line as as well as he did >> i didn't know where you were going with that. i mean, i agree. i just -- i don't know i think there are some negative things >> there are negative things but i don't think it's something that's going to juice your game. >> no.

especially defense >> go ahead. take it to the hole. >> he just got around me oh well. that's it. it was interesting, though thanks up next -- >> we learned a lot. i got to say, first time out it was a big deal >> and think of the future, what kind of people you could get at that thing up next, what to expect this afternoon when the fed decides on interest rates. we're going to run down key questions for the central banks and investors and speak with former asset manager chairman jim o'neill. stay tuned, this is "squawk box. you're watching nbc. sometimes you need a second opinion. [coughs] good to go. yeah, i think i'll get a second opinion. all these walls gotta go! ah ah ah! i'd love a second opinion. no.

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the fed set to decide on wall street this afternoon to resume its hiking with maybe 25 basis points let bring in our own steve liesman and rick santelli to talk about the decision. both deserve first billing we haven't talked to you, steve.

we haven't heard from rick you were up all night, you know, worrying, calculating, doing all your stuff >> you know, joe, i really want to hear from rick. i want to know what rick thinks about the curve inversion. i think he's going to go there and how do we ever get back to a normal situation my man, rick >> well, i'll tell you what, i'm not looking at how to get back to normal. i'm just looking at the information the market's trying to give us about today's fed meeting. what i was doing last night, joe, is ordering steve some hamburgers from white castle because i'm definitely going to lose the bet >> cheeseburgers >> but here's the issue. if you look at the 14th of june, the last fed meeting, let's look at all the relevant markets. if you look at the two-year note, it was around 469. if you look at a 10-year, it was

around 379, 380 so roughly up ten. it's changed about ten basis points since the last meeting. but here's the interesting part. we all talk about i remember the good ol' days when the fed was only worried about equities and everything the fed did was to help equities, okay? so where was the dow, the s&p and the nasdaq at the last meeting? you could look at the charts there and i'd find it really interesting. the dow is up nearly 4%, the s&p up around 4 1/2% and the nasdaq up a little over 4%. so you have interest up 20 and 10 basis points on what is the most aggressive fed rate hike defense that most have known in their careers on wall street and while that's going on, the equities have improved the message in the markets is no matter what the crystal ball shows by the federal reserve and they don't really know the future any better than any of

you viewers out there or steve or i or joe. okay maybe they talked to more influential iconic people in traders but many of the influence and iconic traders haven't made money so the point here is quite simple no one knows where inflation is going but it certainly looks as though inflation that was created by covid in the ultimate spending that tried to deal with it is slowly passing but, joe, you bring this up all the time the money isn't completely spent so there's going to still be a little pressure so they've gone into this skip, hike, skip, hike, that's what the market seems to be looking at so july's 97% under 20% and nova is reaching 30%. so that type of guidance has really stuck but in the end, what they're doing is when i was younger and my wife used to take longer to get ready, she'd say i'm not quite ready, why don't you go

warm up the car, okay? which is basically a euphemism for sitting there and waiting until i'm ready. that's what the fed is doing they're believing what the market believes that the market is going to keep coming down and the covid effects when all the money we print is gone is also going to rest a bit. but they're trying to buy themselves some time so they're warming up the time. >> so the fed hasn't totally ruled out that there's lags and that they don't know for sure. >> no. i think, joe, that's why they're in this kind of hike, wait, hike mohamed, to give lags to try to present themselves, to give the idea there was downward momentum in inflation what is interesting to me is the market is kind of cottoning to the idea of this second hike they had to almost completely

reject it. and i've got about a 41%, 42% probability of that november hike i don't know if it's time to do doing or nothing on the cheeseburger bet i'm inclined to think that we do it but if we do get another ratchet down in inflation, i think that might give them additional pause here. and rick is right. not only the idea of the inflation dynamic is something that has perplexed a lot of people the question becomes that service sector will be listening to what powell says about that and what kind of guidance he gives. i am shfairly sure powell will o down the road. and now it probably another 25 but i will take that

cheeseburger and the drive in the lincoln. >> i love white castle cheeseburgers. i like junk food i like fast food i'm sorry, i don't like exercise and i love junk food but you can't tell that, can you? for more on today's fed decision, let's bring in jim o'neill, he's also a former minister in the u.k. treasury. you got to hear everything rick and steve both said, jim do you agree with most of that >> first of all, joe, you're looking pretty good on your preferences for food i have to say that >> you're very nice. very nice. >> i'm kind of jealous of it >> i work out. no, no >> listen, listening to rick especially i'm kind of laughing to myself thinking there is so -- i've just put something

out on this a few days ago, there's been so many twists and turns of always effectively without fail surprised at let's call it the short-term consensus about the economy and under fed the past 18 months the fed's trying to do the right thing. it sides towards which i think with some justification the improving inflation outlook but we can't have a lot of confidence because there's been all these twist and turns. what i would have more controversially going around my head, though, i also touched on in this piece, i find myself thinking that maybe the real story and here i differ a bit with the tone of rick and the whole discussion is that maybe the flip side of what was conventional thinking from the bernankes and yellens and even

greenspans the last 25 years is what happened to this notion sort of low real rates because of savings and blah, blah, blah, blah, blah, blah i find myself what may be really emerging for various complex region if we're emerging from this very complex world, maybe we end up with rates being higher for longer so that real rates stay positive as to what used to be the normal belief of people trained like me back in the 70s, 80s and 90s before we got into all this kind of weird savings stuff. because it doesn't look to me that even though that was a very clever explanation as to what was going on, it's not clear to me that that really stood the test of time and hasn't done the past two years, that's for sure. in that sense i think we'll get the optimistic tone about inflation but i think the idea that the fed might carry on

putting rates up more is still very much in my head if the economy stays strong and unemployment stays low >> i remember how i used to think about interest rates, too, jim. and i used to say, well, they can't go below zero. i didn't know that could happen. so nothing surprises me anymore. but bottom line, for business, for business and the cost of money, is this restrictive right now for a successful business if it has to borrow at 5% it just doesn't seem like -- it seems like it's something that we can handle and for that reason maybe we don't see cuts and end year might be totally wrong. >> and the message that the market's the same. and it's certainly consistent with long-term history in the earliest days of my time at goldman when i was co-head of

research, i'd go to bill with his colleagues and these financial condition indications and even though rates had risen sharply the past 18 months, if they were really, really punitive, i would have thought financial conditions would have struggled to do what they've done that's partly why i have this growing idea in my head that maybe we're really returning to some kind of vague normality before some of all these weird things that were going on in the build-up to the crisis and the crisis itself. and, you know, again complete uncertainty about russia and energy prices elsewhere in the bo

world but it may well be if we slowly emerge from covid around the world and the energy issues to deal with russia, maybe the world might have a better position to cope with high rates than has been been so much conventional thinking for the past five year who knows but i wouldn't dismiss that in my own mind. >> well, think if money's free what happens think if suddenly it's back to where you're going to risk capital, there's carrying costs in it. i mean, if it's free all this stuff happens. you wonder why we have problems when there's no governor doing crazy stuff. so -- >> i'm with you there on that, joe. i was going to touch on this part early i will never forget the early 90s when until in recent period, only the particularly persistent

short period of rapid live rising bond yields and rising rates. and i was under the group that we thought it was happening and we thought we were geniuses. we weren't as smart as we thought we were. the truth of the matter is rising rates will always find out people have got weak businesses as we're seeing again. that does not mean to say to build the economy itself goes into the slammer >> that explains a lot, jim. and it's very thoughtful talking to you and your comments and it's been a while. we hope to see you again soon. thanks >> keep up with those burgers, man. >> i love white castle burgers, too. >> when we come back, the

drivers behind microsoft and those drivers going in the opposite directions. ahead in "opening bell." welcome to a new era of energy. ♪♪ at morgan stanley, old school hard work meets bold new thinking. ♪♪ at 87 years old, we still see the world with the wonder of new eyes, helping you discover untapped possibilities and relentlessly working with you to make them real. old school grit.

new world ideas. morgan stanley. (bobby) my store and my design business? we're exploding. new world ideas. but my old internet, was not letting me run the show. so, we switched to verizon business internet. they have business grade internet, nationwide. (vo) make the switch. it's your business. it's your verizon.

welcome back to "squawk box. microsoft and alphabet beating analysts in profits and revenue guidance a.i. obviously a very big focus for both of these companies. that term was mentioned, are you ready for this, 145 times on

yesterday's earnings call. joining us is equities research analyst. good morning if you could buy one or the other, which one do you take >> we like microsoft here for long term in a.i stock's going to be off based yo everyone got a little ahead of their ski tips on the impact of a.i. in the short-term, but long-term, there's no question they have the best monetization, the best partnerships, some of the best technology, and they've already unveiled the pricing models that you can see, that you can start to layer in the model going forward. so, revenue growth should accelerate you continue to see support for their azure business all their product lines will be infused with a copilot and this is hurry-up offense. this is not the old microsoft. they are not -- at a risk of actually confusing some of their customers, they are coming with a flood of products that i thought may confuse customers but talking to microsoft last

night, they are literally ready to roll. they are not going to hold back and they are going to -- it's going to be a flood of a.i. solutions that their customers can pick from. that will drive revenue going forward. >> satya is not one to boast, but he was boasting a bit last night, in terms of just the component part of the a.i. piece of that azure business how big, in terms of the azure business, do you ultimately see this becoming, and we talked about google, but we really should be talking, i think, about amazon, which is to say, how do you see that competition rolling up >> first on competition, i would say that microsoft is leading the charge google came in second. amazon is third. every expert in the tech industry has said that amazon can make their way, but they're way behind, and they got caught flat-footed, and they have to come back with a bigger answer so, that's the view of the industry, not our view so, amazon's got some work to do they have to make an acquisition

or talk in more detail around their strategy, and i think both microsoft and google have done a fantastic job of articulating their message. amazon's a little bit outside that sphere right now. in terms of how big it could be for microsoft, all the main pillars are going to have copilots, and many have sized this anywhere just in the office business, anywhere from 20 to $40 billion of incremental revenue, so over time, it's really exciting. they've doubled their prices if you're paying 30 to $40 peruser for an office suite, you're now paying 30 incremental dollars for the copilot a.i. feature. in many cases, it can take the pricing from 50 to 100% higher than what you're paying. yes, not everyone's going to need a.i. and not everyone's going to adopt it out of the gate, so it will be a phased implementation, and i think this is the pushback right now with investors, that there's so much hype in the stock, in a.i., but

the revenue has yet to come, so what we've said is you have to be patient it's going to be a phased rollout over the next couple years. >> brent, want to thank you. nice to see you this morning thank you. joe? thanks thanks, andrew. co coming up, we're going to talk markets as we head toward the opening bell the dow closing in on its longest winning streak ever. positive session today would make it 13 in a row. although we're now down 95 we almost got to -- in the green, but not anymore certainly microsoft not helping. stay tuned quk x"ilbeight back. (bobby) my store and my design business? we're exploding. but my old internet, was not letting me run the show. so, we switched to verizon business internet. they have business grade internet, nationwide. (vo) make the switch. it's your business. it's your verizon.

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

it's your verizon.

well, a little more than half an hour to go to the opening bell on wall street. joining us on the markets is brenda, sand hill global advisors chief investment officer, and i know we've got the fed today. we've also got a whole lot of earnings what do you think is going to drive the markets right now? >> well, i think we have had such tremendous performance heading into this week and this quarterly earnings cycle that i think, you know, we have the fed. that's obviously always matters, certainly, and i think we could get a little more hawkish comments than many are expecting if we look at the overall fundamental state of the

economy, the state of the consumer, even the state of the housing market is still suggests that we're really not seeing a tremendous impact yet from higher rates, and we have core inflation that's still at 4.8%, which is above the fed's target. so, i think that we may get more hawkish comments than the market really wants at this point, and on top of that, we have an earnings season this time around where early on, we had, you know, better than expected reports from a lot of financial firms. there were very low expectations, i think, going into those reports, but this week, we've seen certainly seen where we have a lot of large cap tech companies are expectations, i think, are pretty high going in so, we have even a company like microsoft that put up a pretty decent quarter should that growth of azure is not slowing as fast as we saw last quarter, but the market's still disappointed by that i think we could get volatility that picks up a little bit as time goes on during this

quarterly earnings cycle so, i think for investors, it's important to be disciplined, and so we recently trimmed equity exposure for our clients with that in mind, just given this tremendous move we've seen so far and the fact that, at the end of the day, we can still earn 5%, which is now actually better than the overall inflation rate, in very safe cash-like vehicles, so i think it's important to balance things out, certainly not take all the chips off the table, but be disciplined and trim when suddenly sentiment has shifted so tremendously towards the positive i think recognizing that and using that >> in other words, you think this 12-day running streak we've seen from the dow may be getting a little long in the tooth >> i do think so if we look at what's happening in the broader economy, we are seeing that financial conditions have tightened, and we hear every day from fund managers of private debt offerings that are just -- think this is the most

amazing environment in the world that they've seen because rates are so high, but we really question how sustainable it is for a lot of entities that can no longer obtain financing or a loan from a bank that are now turning to the private market and just how long that's going to be sustainable. so, i think there's still reasons to think that we could see some economic slowing as time goes on, if the fed keeps rates higher for longer, so i think it's important not to get completely wrapped up in the euphoria of the market and take a moment to step back and take a few chips off the table. >> brenda, we're just about out of time, but very quickly, what you have seen with the earnings so far has actually been pretty good, but maybe expectations were built up to that point? >> i think it depends on the industry and the stock, certainly, and i think if what we look at the primary drivers of the market returns this year, it has been that mega cap stock cat category, so we've seen broadening and participation in

the market rally, which is great, and there are lots of areas that we think are attractively valued. >> brenda, thank you great to see you brenda vingiello all right, that wraps things up for us today. andrew, we'll see you tomorrow >> i will see you tomorrow >> looking forward to it maybe we'll see some more, and you can tell us about what you heard at the conference too. folks, that does it for us today. join all three of us right back here tomorrow. right now, it's time for "squawk on the street. ♪ good wednesday morning, and welcome to "squawk on the street," i'm david faber with jim cramer, we're live from most post nine at the new york stock exchange carl has the morning off futures looking like we're going to have a lower open of course, 2:00, fed meeting, can't forget that. and an awful lot of earnings to digest this morning. that's where our road map starts alphabet and microsoft, yep, the two of the biggest giants out there, they have earnings. stocks moving in opposite