indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire good wednesday morning i'm leslie pick we are david faber, live from post nine of the new york stock exchange. union pacific ceo lance fritz joins us this hour on earnings, the activist challenge of ump and an update on his successor >> the ceo of pfizer also with us during the hour that stock is at an all-time high after strong quarterly results. >> and later, former kansas citi fed president, thomas honig, on

the conversation ahead of the fed decision this afternoon. >> let's give you a quick look at the markets nasdaq is down and microsoft, amazon, and even meta has turned around, adding to losses on that index. although alphabet, of course, has been quite strong on the day after those earnings were well received by investors, you can see the s&p also down a third of 1% >> and banks pulling in here, i think, on the heels of that pac west deal that we talked about the prospect of consolidation. you have key corp. up 7.3%, comerica, up 6.4%. zions up 6.4%. very strong moves. in recent weeks, coming off the heels of earnings, things have stabilized there, creating some comfort surrounding the overall thesis of investing in banks staying ant markets, the upcoming fed decision, major focus of the day our next guest says the fed will be unwilling to stop hiking until wage growth registers

below 4% he believes the economy will fall into a recession in the coming quarters, though a shallow one. joining us now, northwestern mutual wealth management chief investment officer, brent chshu. thanks for being here. looking at the way you're positioned right now, it doesn't appear that you're currently positioned for a recession, overweight small caps, underweight big caps is that a recent shift that you had, where you were kind of taking some profits from the bigger names that had recently run up >> yes, in may we took money off the table on the s&p 500, which i think seems a bit odd given the quality there and the typical, how it does better towards recession. but small and mid-caps, and i would invite youraudience to think about this small and mid-caps are historically cheap and i think there'll be a recession, but i think it will be mild and shallow. if you think about investing through that recession and not getting too cute, i think the valuation and discount there at 13 to 14 times earnings, i think

you need to think about owning those for the next 1 to 2 years, because i think there's an opportunity on the other side of what will be a short and shallow recession. back to your question, we are positioned more defensively, because we are actually overweight fixed income. we have commodities which are underweight, so we have been adding to fixed income over the past six months based upon our opinion that it now offers real value and a hedge against equity downside >> so you believe the economy will fall into a recession in the coming quarters, a shallow recession. what does that look like and what is the coming quarters? is that middle of '24? >> yeah, i mean, there's good news and bad news here the good news, as we expected, cpi has come down. that was tied to covid the bad news, as you opened with, i don't think inflation is done or the fed is done with inflation until they see wage inflation fall below 4%. the fed is afraid of a wage fire where wages essentially took the elevator up and pulled inflation with it. and so this to me is where the fed is going to be focused on and why i think there will be a

recession, because they aren't going to take off their tightening bias. they aren't going to put liquidity back into the economy, until they see wages come down, which i unfortunately think means job losses in the not-too-distant future, which is what we actually call a recession. >> i want to come back to your view on small and mid-cap. you say they're historically cheap. it feels like they're always historically cheap and i wonder, when is that really going to turn or what's going to be behind you saying something like that, where you feel like they are going to start to at least see some multiple expansion, perhaps. >> i think once you actually see the whites of the eyes of the recession, that's when they start turning around they typically do so in the middle of a recession and do so while coming of a recession. this reminds me a lot of 1999 to 2000 if you go back down and take a look at how those names that drove the s&p 500 to those absurd multiples back then did in the economic cycle after, they didn't do very well the interpret was something akin to ai back then. those stocks were good

companies, but they weren't good stocks, because they had discounted it already. and perhaps some of the benefits of that internet accrued to the other parts of the economy and the markets. i think you're looking at that over the next few years, where you see small and mid-cap and companies of that nature actually benefit, because they are cheaper and they're going to have an economic tailwind. >> can you give us a little bit more specifics, even on a sector level or industry level, on what would fall into that category? >> well, i mean, certainly the small and mid-cap indices are tilted away from those so i think there's opportunities and things you open up banks, things of that nature, where they have been pulled back quite a bit. and as you think about a short and shallow recession, if it's not, perhaps the time period is a bit longer but at 14 to 15 times forward 12-month earnings that have been marked down, i'm willing to take my chances >> and maybe hedging with fixed income exposure, as you mention. thanks so much appreciate it.

>> thank you >> well, alphabet and microsoft are both big movers this morning, going in opposite directions now our attention will turn to meta, wondering whether the results from that company will justify the enormous rally in its shares, up 134% year-to-date julia boorstin is with us and she's looking ahead to those earnings julia? >> investors are hoping meta will accelerate its revenue growth the social giant is struggling with the same ad market weakness that has weighed on snap shares, but meta has the advantage of scale and new revenue drivers. analysts are expecting the company to grow its revenue 8% in the quarter, that's accelerated from 3% revenue growth in the prior quarter. meanwhile, thanks to cost-cutting, earnings are expected to grow by 18.5%. now, there are some other key issues to watch. threads. while the app had a record-breaking launch, investors want to know if the app had held on to its users and what the plan is to convert that

usage into ad dollars. relea reelz are expected to be a tail wind and investors will be looking for more insight into how ai is improving ad targeting and measurement. bernstein pointing to youtube's 4.4% advertising growth, writing, quote, in the wake of google's solid earnings report last night, i think we can safely say that investors are now expecting a very solid report out of meta evercore is cautiously optimistic on the ad market, writing, quote, the state of the ad winter, so far, our checks suggest tentative signs of thawing. but the macro environment remains uncertain. now, the other interesting factor to watch is how much mark zuckerberg stresses his metaverse vision guys, it seems like investors would rather hear about ai than the metaverse. >> julia, do you think that the kind of -- that that dual perspective that the analysts are sharing, is that what the stock's not moving too much? there's not as much of a

readthrough on the positive dynamics as some of the other big tech reports that we've seen so far >> i think this stock has just had a massive run-up year-to-date i mean, it's just hard to justify having more buying of the stock into the print today, because take a look at this stock chart, ever since november, it's been shooting higher i think this is a stock that has seen such massive gains. now the question is whether the earnings we get tonight and the guidance, if not necessarily officially dpi ly guidance, thet into what's going on in future quarters justify those gains >> julia, you mentioned snap of course, you just conducted an interview with evan spiegel, but alphabet looked okay on the ad front. that may be a better comparer, right? >> and i think there's this question of youtube, whether that's a good comparison youtube seeing over 4% advertising revenue growth that should bode well for meta of course, google and meta are the digital duopoly, as they're

called these are the two largest players in the advertising space and their scale may prove to be a big advantage as everyone else tries to figure out the ad contraction that's going on right now. >> it certainly has year-to-date, julia. thank you so much. the ceo of fiserv is next. $80 billion payments company up 30% this year. we'll break down results and get a look at where they're seeing consumer spending. plus, don't miss a first on cnbc interview with the now-outgoing ceo of union pacific. that stock is up sharply after results. we'll talk succession, as activists push for lance fritz's departure later this year. a lot more "squawk on the street" for you straight ahead communities and the people who live and work there grow and thrive. we're proud to call these places home too. they're where we put down roots,

and where together, we work to help move everyone's financial goals forward. pnc bank. the first time you connected your godaddy website and your store was also the first time you realized... well, we can do anything. cheesecake cookies? the chookie! manage all your sales from one place with a partner that always puts you first. (we did it) start today at godaddy.com new projects means new project managers. you need to hire. i need indeed. indeed you do. when you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria. visit indeed.com/hire and get started today.

taking a look at wells fargo this morning, announcing a $30 billion buyback program and saying it's board approved, its recently announced dividend increase coming off the heels of a stress test, the dividend now at 35 cents per share, up 30 cents, and shares of wells fargo up 2%. they were up about 3% yesterday after-hours on this news and noteworthy, of course, david, because tomorrow we get those basel 3 end game rules >> that sounds scary >> very exciting, like a video game of sorts. >> or the final episode of a trilogy. end game so tell me what we're expecting or what it means >> we're expecting higher capital requirements, although those will take years to phase in but a lot of banks have been

pretty prudent in terms of their capital return to shareholders, things like buybacks and dividends in anticipation of these very exciting end game rules that are coming out tom tomorrow. >> wealth has been many a special category >> interesting time dpegt out ahead of that, even though those rules, those higher capital requirements will take most likely several years to actually be implemented >> let's get to our first earnings interview of the hour i'm going to talk over here. shares of fiserv are lower this morning, despite delivering an earnings beat in the second quarter, raising guidance for the fiscal year. revenue just under consensus joining us here at post nine in a cnbc with the fiserv ceo, frank. let's start off with clover. integrated point of sale offering, competes with players like square and toast. toast did not have a good number recently you guys are seeing quite strong

growth, 23% year over year revenue growth so explain what that is, why it's growing so quickly. are you taking share >> well, as you probably remember, it's been a ten-year journey. we brought clover to market. you know, in the teens and we continue to invest in it. we have had tremendous distribution we actually lead in gross payment volume of anyone in the space. it's really a software suite so people not only are we getting payment volumes, but we have software services and we continue to grow it in verticals and internationally. so i think you have distributions, and the product is league leading. >> what about it do you think is appealing to your customers? >> i think is what's appealing to it, it's a software store it's their platform, it's their operating system, as opposed to just a payment device, it helps them run their businesses, it's a small business favorite.

it does everything from inventory to sku management to employee management services >> and you know, again, given clover and you have good visibility in the small a medium-sized businesses particularly with that product what does that say about the economy? we'll hear from the fed in a few hours. >> i think the consumer has been stable the consumer had had a huge run. i think they're stable now, they're spending we don't see them -- we're not forecast an increase in spend -- >> are you seeing headwind then? are you concerned at all about student loans? >> i think we dguided up in the light of those, but really by the strength in the business that we saw in the first half and what we see rolling through. but i think student lending debt, rigsing interest rates ar all a challenge that we're seeing consumers to react to but they are stable. >> what's your expectation on

fintech top line >> i'm sorry >> on fintech top line >> well, you know, we've been a four to six guider there we previously were a lower grower, if you look back over time we have a very strong set of products, in high demand we're winning. we won ten big logos we're also winning in consolidation. just saw bank of california yesterday, the ceo give us a shout-out as to the capabilities that we bring to them. jared wolf so i think we see a very strong second half in our fintech segment. >> go ahead, melissa >> are financial institutions spending these days? we have see head count reductions, we see -- we just talked about in terms of preserving capital, being very cautious in terms of expenses. are they spending on -- >> yeah, interestingly enough, we just came off of our first annual physical event since we merged the company we had 3,000 clients there

and their demand is super high we're a growth engine for them there are parts where their infrastructure, but our digital capability acquisitions we made like on dot, that allow them to bring more mobile capability to their clients is something they really want. so i don't see them on the front end of this business slowing down spending. >> frank, finally, again, because you can give a pretty interesting view of sort of where we are on the consumer, what, $4 trillion or something runs through the system. >> yes >> is this whole idea that people are spending on experiences, but not goods, reflected in the numbers >> i think we're getting a little balancing out right now >> are we? >> i mean, yes, you know, retail spending in general was very high on experiences. i think you've seen a little rotation i think you see where they're spending to get more value is what's going on. and we may have not seen that year and a half ago.

i think you're seeing value spending going on, also. >> you said stable consumer, but you seem to be moderating. i don't want to put words in your mouth, but are you more concerned about the second half than you were previously >> we guided up our revenue and we guided up on our merchant revenue, so we're quite bullish on it, but that's really from breadth of distribution, expanded tamm. and a stable consumer as opposed to maybe, we were, a year ago, a robust consumer. >> frank, it's always good to get a snapshot thank you. >> always good to be here with you guys thank you. >> stable, slightly different than resilient or robust later this hour, former kansas city fed president thomas h hoenig we're keeping an eye on boeing as well the company had a smaller than

expected loss, strong flree cash flow that's the highest level they've seen since january david lhn incaoujoed us earlier this morning if you want to watch the interview, go over to cnbc.com for the highlights we're back in two. ( ♪♪ ) ( ♪♪ ) ( sfx: people celebrating ) ( ♪♪ ) ( sfx: people celebrating ) ( sfx: stock exchange bell ringing )

you founded your kayak company because you love the ocean- not spreadsheets. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire ♪ (cheery music) - they get it. they know how it works... and more importantly... it works for them. - i don't have any anxiety about money anymore. - i don't have to worry about a mortgage payment every month. - it allowed me to live in my home... and not have to pay payments. - [narrator] if you're 62 or older and own your home, you could access your equity to improve your lifestyle. a reverse mortgage loan eliminates

your monthly mortgage payments and puts tax-free cash in your pocket. call the number on your screen. - it was the best thing i've ever done, and- - really? - yes, without a doubt! - just like these folks, aag can show you how a reverse mortgage loan uses your built-up home equity to give you tax-free cash. - it's a good thing. - why don't you get the facts? like these folks did. - [narrator] call right now to receive your free, no-obligation info kit. call the number on your screen. oppenheimer is magnificent. the new york times calls it staggering. it's utterly enthralling

and one of the best movies of the century. welcome back shares of gap up over 5% the company announced that mattel's ceo, richard dixon, will be its next chief executive. that's effective august 22nd, not too far from now dixon was best known for helping to rejuvenate the barbie franchise. that move helping partially repair what has been -- well, it's been a tough year for the stock, as you can see, down about 14%. we don't talk about the gap the way we used to back in the mickey drexler days. >> it feels like a gap a coverage gap. >> i'm not sure it is. >> there's a lot of management changes. >> there re.

lance fritz, gap -- getting that in before the summer >> a few others. >> trying to get that news out there before everyone goes away in august. makes sense. we are two hours into the trading day. let's go post-to-post with bob pisani for a look at what else is moving. >> the dow is still up, but the s&p is down. trading is very choppy here's the good news the bank rally, one of the big broadening out stories, it's continuing most of the regional banks have reported comerica, highest level since march here this was $32 at the bottom, in may. two months ago look at that $53 here. so deposits are stabilizing. there's still concerns about the high cost of deposits and some of the regulatory changes coming up, but this is one of the big broadening out stories of the regional banks rallying rather dramatically i'm a little concerned about another broadening out story, and that's the industrials remember every day, i used to be putting up new highs in some of these big global industrials

general electric, new highs. eaton, new highs this is starting to fade a little bit this was 175, eaton, two months ago. this is a big move up for an industrial name like this. but it's been fading this was 210 a few days ago. and it's been moving down and so have those other big rally ones. ge is off of its high as well. rockwell automation. this is another component of the broadening out story that is showing sides of fading as we're going into the last week of july and remember, the bulls want to keep up this broadening out story. that's a little bit of a crack another little crack in the game is some of the luxury names. tapestry and some of the other names here in the u.s. are trading down it has nothing to do with tapestry we got the results from lvmh, the biggest luxury retailer in the world. on the surface, numbers are amazing. organic growth was up 17%. that's the envy of almost any other company that's out there

but when you're lvmh and you have had unbelievable growth in the last year or so, and you're up 24% in the year, it wasn't quite good enough. so most of the big luxury retailers are trading down over in europe. lvmh is down about 3%. rich month's down as well. some of the other once like swatch are also trading to the downside and interestingly, almost all of the divisions were outstanding. leather goods were down just a little bit and david, the curious thing is the wine and spirits division. for some strange reason. cognac sales in the united states seem to have been down. this wasn't my fault i had absolutely nothing to do with that. i'm doing my best. >> we know you are, bob. >> thank you, david, that part for some reason was the weak part and it wasn't terrible, but when you moves like this, 24% in the biggest luxury retailer in the world, any little misstep, and this is part of the problem with earnings, with the price moves we've seen, good numbers are not

good enough. and that's exactly what jpmorgan said >> i'm really glad that you delved into. it the numbers yourselves are very strong. but u.s. weaker, new entrance into luxury. cognac, which we talked about at the top of the show for some reason, people not drinking as much now, you had richmont with cartier. >> china sales were very good. remember, they cratered last year the comp here is great and this is sort of true in the u.s. u.s. sales last year were outstanding. in fact, we were talking about this a year, how big cognac sales were in the united states. and now, of course, they've topped out things have kind of reversed the comps are more difficult for the u.s. numbers and they're easier for the china numbers, which is why they did so well on the china numbers. >> there's a man who still drinks cognac, leslie. >> we found one.

by the way, anything else you put in front of him. >> i deny everything >> i'm kidding he's the best to go out with up next, unp announcing its next chief executive this morning. that stock is substantially higher outgoing ceo lance fritz will be with us next on his succession plan, talk about pressure from activists, as again we mentioned, that stock a big winner on pace for what will be its best day since march of 2020, it leads the s&p lets her choose the first 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.

welcome back union pacific shares surging that would be best day since march of 2020, if it holds up. succession news one of the keys. the company naming its new ceo succeeding ing lance fritz. >> that special guest is lance fritz. the current and outgoing ceo, president, and chairman of union pacific. lance, it's great to speak with you today. you did report earnings as well. first, what's really moving the higher this morning is this succession news. we knew you would be retiring this year. that news came earlier in the year after a key stake holder in the company became activist, i guess just walk me through jim

vena, specifically, and how this came to be given the fact that he's a well-known entity, analysts seem to be very surprised by this news >> jim is an absolutely perfect pick for us at this time, morgan and thank you for hosting me this morning we started the conversation with our board about a year and a half ago onning with being ready for my ability to retire at the back half of next year or the front half of this year and we made a stronger point on this, it would happen this year and the board went through an exhaustive and thorough search and they identified the individual that is perfect for running us jim vena, a great track record and has a history with us. he was our chief operating officer in 2019 and 2020, and an adviser in 2022.

we're looking forward to working on all the things we're working on right now >> what does that include. and part of the reason the stock is reacting the way it is, given what that means for potential for operating ratio, potential for margin improvement, service improvement, and the like. >> so morgan, we're already well down the path on our psr journey, our precision scheduled railroad journey >> most of the, being more efficient reliable, jim's goal right now as he joins the railroad is to be the safest railroad in america, in the industry second is to provide consistent and reliable service to our customers so that third, they help us grow growth is one of the key factors, as we look in creating long-term value into the future,

and jim is laser focused on that >> let's talk a little bit about the quarter specifically missed estimates revenue per car was down as well, but head count was up. i guess, walk me through the dynamics that you're seeing right now and how much that is a reflection on the broader economy and activity you're seeing in realtime >> it was a noisy quarter. we were down on volume, and that generated 5% down on revenue on the cost side, when it comes to labor and compensation. we signed a deal with our smart td union, that's the conductors on the transportation craft, regarding break persons. and that cost us just under $70 million in the quarter now, it gets a two-year payback, but the up-front cost is this quarter and now we implement it. we're about 60% implemented, so

that payback is looking quite good there were two other things we did in the quarter one is we reached the last agreement on paid sick leave with all of our craft. and that's a real cost it's a wonderful benefit for our employees to get the opportunity to, when they're sick or their family members are sick, take time off, be paid, and take care of themselves. what we have to do is recoup that in cost that just adds to our -- or in price. that just adds to inflation. the other agreement we reached, which is really historic was with all of our engineers on the transportation side. we have a schedule now 11 and 4 and what gives our engineers is predictable life schedules and is gives a predict, workforce. when we call somebody to take a train, they're available we talked about how that adds cost we aren't yet ready to be able to unpack directly what the

productivity and service offsets are, although we're confident they exist >> you and i have had many conversations about labor and workforce. in terms of the volumes picture, weaker consumer markets and inflation, two things you talked about contributing to some of that weakness there. when do we start to see vaolumes turn a corner, and just as importantly, if volumes have been softer, what does that mean in terms of future pricing >> yeah, notably, morgan, the real soft areas of the economy for us were in lumber, housing, consumer goods, so packaging, and just in the intermodal project, whether it's international intermodal or domestic that's all kind of retai retail-oriented, retail-facing product. what we need our consumers to get comfortable again in their reallocation of their dollars between service and goods and start buying goods again we also need consumers to get used to the interest rate environment, so that homeowners

start being more comfortable selling homes and then trading up, right? we need more inventory of existing homes, and we know starts to increase i think that all happens, when it happens is the big question mark the other good part about looking forward, morgan with is, the industrial economy is poised to be very strong. the united states is positioned very competitively in the world markets. and i think with reshoring, near shoring, and supply chain reformulation, it's going to be a very good thing for the united states >> interesting we've seen the shift in container volumes, you mentioned intermodal from west coast ports to east coast. is it a secular shift, or is there a point at which it reverses >> yeah, it has been in part a secular shift. if you go over the last two decades, every time there's labor disruption on the west coast ports, some part of the share goes to the east or alternatives and a portion comes back, but it doesn't all come back.

and so, i think to a degree, there has been a little bit of market share lost again, but much of what lands on the west coast wants to land on the west coast. it's a gigantic market in the l.a. basin and all up and down the west coast and it makes a lot of sense to land there and bring it inland into the middle of the country i anticipate that's going to continue we are providing new service product with an eye towards where else it might go we have a new service protect on the gulf coast in houston and we'll continue that work with our partners in the east coast, as well. >> lance, final question for you, what's next >> first things, make sure this transition is smooth and successful so all of my attention is on that have got to run through the tape and then it's time to take a little time with my wife and my family and live the life that we can enjoy now. and i'll worry about what's next, you know, bigger than that, half a year from now >> all right lance fritz, the outgoing ceo of

union pacific. great to speak with you today. as always, thanks for joining us >> thank you, morgan guys, the stock is up 10% right now. big move for the railroad. and it really is very much centered on this succession news, and jim vena, who is a known entity not only in the rail industry, but on wall street a board member of fedex, for example. he has worked at union pacific in the past, as fritz just mentioned. had been a contender at canadian national when they were looking for a ceo not that long ago, as well and really very much seen as one of the key disciples, if you will, or proteges of hunter harrison >> morgan, i'm curious to the presence of the activist here and what influence they had in this and what your sense is, and what their problem was overall what was the issues that they had raised >> the issues, and this goes back to a lot of this spilled out into the public earlier this year, around february time frame

was a sense that according to this longtime stake holder that at the time, i think $1.6 billion stake in the company, was one of the top ten largest stakeholders, shareholders, was that there was underperformance versus the other railroads, and that they wanted to see some of that addressed so in terms of what vena brings to the table, at a time when you're actually seeing some of the other railroads, particularly a norfolk southern or csx shift away from this concept of precision railroading or some of the connotation for better or worse of what's associated with it, in this day and age, after some of the rail issues, safety issues that have been raised, whether that's right or wrong, with union pacific specifically, with a 63% operating ratio this quarter, kind of speaks to the fact that there's perhaps some levers to pull here and ways to extract more profit and better service for the railroad, and maybe this is a strategy that doesn't >> i think sorban expected they

go up double in the next two years if vena does take that role he has a lot to live up to on those promises >> morgan, thank you for bringing the interview speaking of leadership changes, we'll take a look at alphabet results and what cfo's job transition could be telling us that would be the best day it's seen since february. wear back in two

♪ (upbeat music) ♪ ( ♪♪ ) constant contact's advanced automation lets you send the right message at the right time, every time. ( ♪♪ ) constant contact. helping the small stand tall.

shares of alphabet up nicely today, this on strong earnings driven by robust advertising and demand for cloud commuting one thing we're seeing, increased costs as well. big tech, of course, going all in on ai big capital expenditures coming. that's the focus of today's tech check with deirdre bosa. >> generative ai, it costs money, too if this was supposed to be the show me the money quarter for microsoft and alphabet, they were going to get more tangibles on ai monetization, that didn't exactly happen microsoft said it would be gradually google talked about benefits and ai is going to cost them more money before it actually makes them money both microsoft and google said that capex costs are going to grow to support all of these opportunities in zplooi, which benefits, of course, the current and undisputed zploo d ai leade, nvidia those chips everyone is trying to get their hands on.

one of the most interesting threads to come out of last night's earnings is ruth porat she'll be more in the line of fire for regulators when scrutiny and measure is only increasing it also opens up that cfo role for someone else to come in and try to replicate or continue the success that porat has had she created the current operating structure, increased transparency, was behind the first buyback. she brought wall street sensibility to a high-flying tech company, chuck see her gains as cfo, but has had a hugefully successful time doing it and wants a new challenge the key question, who can come step in and do that again? >> i think there's a hope amongst investors that whoever succeeds her will be as if not more focused on costs. who knows, but that's certainly something that investors have always kept a close eye on >> and even over the last year, when you look at the megacaps and this efficiency drive,

alphabet, google, has seen kind of behind some of the others they were a little bit late to make the kind of layoffs that they saw, certainly from meta or amazon and this idea that maybe alphabet could have done more. it is interesting to look at sort of her reign from the beginning, in the mid-2010s to now and maybe that legacy is a little bit undone over the last year or so but remember, she'll be chief investment officer, she will still have hand, a large one in the financials it will be interesting to see what she does, on one hand, facing the regulators, but also as theinvestment officer, mayb some possibilities for some m&a there. >> interesting it's remarkable how long her tenure has been in that cfo suite. i think that's also worth noting deirdre, thanks so much. next, former kansas citi fed president thomas hoenig weighs on whether rates are close to a speak. the street expecting another 25 basis point hike this afternoon.

but if you recall, in june, the fed saying two more hikes were d 'sng anit just unclear if that's happening, when it is. don't go away.

every business deserves a great deal. that's why comcast business is launching the mobile made free event. with our business internet, new and existing customers can get one year of unlimited mobile for free. it's our best internet. powered by the next generation 10g network and with 99.9% reliability. plus one line of free mobile for an entire year.

it's the mobile made free event-happening now. get started for just $49.99 a month. plus, ask how to get one free line of unlimited mobile. comcast business, powering possibilities. july rate hike is all but certain. we're going to get 25 basis points from the fed this afternoon, bringing the upper

boundary of the fed funds rate to 5.5%. that's highest level it's had since january of '01 our next guest looks ahead to september and thinks another hike may be on the table joining us now, former kansas citi federal reserve president and distinguished fellow at themerketa center, thomas hoenig good to have you you know, i'm curious, do you think we'll get any hints from the fed or from chair powell at the press conference about the next potential hike? >> i seriously doubt that he will give any -- i think he will try to avoid giving any hints, because i don't think the fed knows quite yet what they want to do in september they're looking at major forces that they have to still figure through, number one. we're still experiencing -- the u.s. is still experiencing the effects of enormous fiscal stimulus over the last three years, including not starting just with the cares act, but more recently, the infrastructure bill, the chips

bill these are all increasing spending we're seeing it in wages and wage pressures now so they have that side of it that they're dealing with. that would suggest a rate hike but on the other hand, they have raised rates by a factor of more than 25 now. they move ahead today, as everyone expects they especially the intersensitive sector affecting commercial real estate and other areas and so they're balancing that and i don't think they know quite yet how that will play out over the next couple months. i think the chairman would be very careful in his conference today. we'll see, not to hint one way or the other prech but to say we're data dependent, we're going to wait and see. >> you mentioned that fiscal stimulus we've gotten out of congress, of course, the i.r.a. is another one that's a lot of money. how does the fed measure that and are they capable of measuring it in real time?

>> they are capable of measuring it whether they can measure it as closely as you would like is doubtful how is labor going to go forward and how much more pressure will we see if inflation continues to come down, real interest rates will be even stronger that may pull the economy down more and slow inflation. they are measuring it constantly but don't know how it will shape out. they think it may but don't know for sure >> thomas, tomorrow we're expecting weighs known as basel 3 end game david and i were talking about it earlier in the hour three decades between the fed and the fdic, two of the three agencies tasked with creating these rules, what do you think the overall impact will be >> as i understand it, and i

haven't seen it yet, testimony affect the trading account, a 2% from michael -- a 2% increase in capital. that will affect the largest banks only they usually can manage through that pretty carefully and do so. and even though they will say it will stop lending, i doubt it will have the effect higher interest rates will have on lending. i think a modest affect on the economy. since you're looking at market risk and operational risk, the fact they're looking at this is probably a good thing and i would suspect it will actually promote financial stability in the longer term, which is a goal they have, and will be separate from the effect of monetary policy

>> interesting you think it won't have as much of an impact as higher interest rates on lending is that a concern of yours given the overall impact of higher interest rates plus higher capital rules at the same time >> well, the credit availability issue is one the uncertainty around the level of interest rates are causing banks to be more careful their loans are under pressure because of higher interest rates. those asset values are taking downward pressure. they already have it in their bond portfolio that will continue to cause banks to pull back the marginal increase in capital probably should have come two years ago, but the fact that it's coming now i think will also add to the slowdown but

nowhere near as substantially as the interest rate increases even today's rate increase will slow it down more than the capital increases will if they stay at these higher rates very long that's where i would focus my interest and attention because the economy is still on fiscal stimulus they're still trying to slow it. that's where they're going to focus and the capital ratios will come in as a factor but less so than the interest rate environment. >> thomas hoenig, appreciate your time. thank you. >> sure. glad to be with you. thank you. british billionaire joe louis trading on aac a yhtnd now insider trading charges. the details after this vancing ft for future generations. ♪ welcome to a new era of flight.

we planned well for retirement, but i wish we had more cash. you think those two have any idea? that they can sell their life insurance policy for cash? so they're basically sitting on a goldmine? i don't think they have a clue. that's crazy! well, not everyone knows coventry's helped thousands of people sell their policies for cash. even term policies. i can't believe they're just sitting up there! sitting on all this cash. if you own a life insurance policy of $100,000 or more, you can sell all or part of it to coventry. even a term policy. for cash, or a combination of cash and coverage, with no future premiums. someone needs to tell them, that they're sitting on a goldmine, and you have no idea! hey, guys! you're sitting on a goldmine! come on, guys! do you hear that? i don't hear anything

anymore. find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com. welcome back federal prosecutors bringing insider trading charges against billionaire joe lewis. robert frank has more on that wild story wild allegations, robert some of the details here >> yeah, leslie, really wild surrendering to authorities in new york this morning. he will appear in court this afternoon. he was intidicted by federal prosecutors and 19 criminal

charges including securities fraud and conspiracy prosecutors who say lewis, 86 years old, worth $86 billion, organized a, quote, brazen insider trading scheme they say he received inside information about companies he invested in, then passed that information to friends, romantic partners, and even his private jet pilots who made millions in profits. in one case he leant his pilots half a million to buy stocks before news of a clinical trial became public. his girlfriend and the two pilots have been charged in a civil case by the s.e.c. lewis has come to the u.s. to answer, the quote, ill conceived charges and will defend them vigorously in court. lewis is the founder of a group that invests in real estate resorts around the world, many in florida and the bahamas he owns the tottenham hot spurs soccer team in england and is one of the largest art collectors friends say he spends much of

his time on his 320-foot yacht which has its own training floor and indoor tennis court. always surprising when someone with this level of wealth and success is accused of insider trading which, granted, made a lot of money but not relative to what he's worth. >> what do they have to prove, though he was the tipee and he was getting tipped and he was tipping others >> he was receiving information from these biotech companies he invested in mostly on clinical trials he would pass the information on to pilots, his girlfriend, other friends, in some cases lending them the money when the results were made public the stock would pop and then he would sell receiving material information and passing it on which is why the pilots and girlfriend were also charged >> material nonpublic information. robert, thank you. it's been a while since we've

seen a serious insider trading case >> and training court on his yacht. >> you have one, don't you. >> i'll be there next week >> okay, good. that will do it for us on "squawk on the street. over to courtney reagan for "the half." thank you very much, david and leslie welcome to "the halftime report." i am courtney reagan in for scott wapner front and center this hour, the fed, earnings and the fate of this rally as the dow tries for 13 straight days of gains. our investment committee is standing by. joining us for the hour joe terranova, liz young, sarat sethi and steve weiss. a quick check on the market. we are moderately mixed. the dow jones industrial average higher by a tenth of a percent the s&p 500 down fractionally and the yield on the ten-year note at 3.877. we have wti around $79, just a shade under that