their indication of what is happening with other central banks around the globe, if they think that's the end for things. but this has been a really strong, oh, 14 days for the dow, minus yesterday. right now, you're looking at pretty strong numbers. make sure you have a great weekend, everybody we will see you back here next week, but right now, it's time for "squawk on the street. have a good weekend. ♪ good friday morning, everybody. welcome to "squawk on the street." i'm david faber with leslie picker and scott wapner. we are live from post nine at the new york stock exchange. carl and jim both have the friday morning off let's give you a look at futures. of course, you heard becky talking about we're looking for a higher open. we were at the time yesterday, and in fact, we got it but things sort of changed as the day went along let's start with our road map and those stocks that are in rally mode the s&p would be on pace for what would be its third straight

week of gains, this as investors digest the latest batch of inflation data plus, intel returning to profitability after two quarters of losses, sending shares surging in the premarket and the bank of japan shocking the global financial markets with its latest policy tweak. we've got the details. we'll start with the markets on this last trading day of the week, that much, i know. >> good job. >> beyond that, i don't have a lot. i'm glad you two are here to help >> at least you got that one. >> i got that one. >> it's all downhill >> we did not -- >> yesterday was thursday. >> statistically irrelevant dow did not manage its 14-day streak to break the 1897 record so, there's that unfortunately. and then, obviously, we had that very strong start yesterday in the nasdaq, scott, when you were on air later in the day, though, things had changed significantly. >> you had the story out of japan that boj was going to tweak its policy, maybe tolerate higher rates our rates moved up a little bit, and then the market ended up selling off, but this morning, it's all about the pce, and

rates are down the market likes it because it really didn't upset the story that -- and this path that we think we're on, guys, that the fed is, you know, maybe takes another pause at the next meeting and then there's a one in three chance right now of a november hike. so, nothing that happened this morning in the data says, oh, wow, okay, maybe we need to rethink what the path is again for the fed. >> which is kind of the mindset and the fragility of the mindset currently, is that any kind of volatility on either front could upset that but if you've got something that's kind of just a little bit off from estimates, a little bit in line with estimates, that is seen as a positive thing obviously, it's been a very big week for central bank news, for earnings news. the boj news this morning, very, very interesting, and in terms of what it means for u.s. bond markets, because they're the largest foreign owners of u.s. debt, so there's some thought that maybe there could be some repatriation if yields are allowed to go higher over in

japan, and what would that mean from kind of the japanese selling off u.s. debt and putting their capital to work instead in their home country? >> of course, as you say, leslie, it's been a big week for earnings, and today is no exception. we'll get to as many as we can of course, p&g and ford, exxon, chevron, intel, t-mobile, amongst some of the bigger names. but skcott, we've come off what would seem to be a pretty good week, in terms of the mega cap we have yet to hear from amazon and apple. >> next week >> yeah, that's next week, but of course we have digested alphabet market liked it. 29% operating margin meta yesterday had a very warm reception, although as the day went on, the stock did not perform as well as it had. microsoft, a bit less so, although generally speaking, not a bad quarter. i'm curious to what your take is on what we've seen, on what the market has done with it. a lot of people yesterday, for example, still talking about meta's multiple, given what expects to be accelerating revenue growth into the mid to

high teens, and yet it trades below the market multiple. >> it's the knock you hear about the megacaps almost across the board. you look at apple. what is apple, 31 times at this point? maybe microsoft's 33 but yet, they keep, for the most part, living up to the hype, and you know, what the relationship is between where interest rates have gone and how the stocks have done, higher rates haven't really been able to knock these stocks off of their mantle, so to speak, and michael hartnett at bank of america says real rates are not high enough yet to do that, to pop the a.i. bubble. now, you can debate whether there is, in fact, an a.i. bubble or not. but nothing this week that we have gotten from an earnings perspective upsets the story in what has been a more broad market that's the whole reason we're talking about the dow at 13. the streak was ended at 13, but the reason you got to 13 is because the market itself had broadened. >> also, i don't know, maybe when i think about bubblish companies, i think of

unprofitable ones, so if you've got high rates but profitable companies that are driving that excitement to the upside in a.i., how does that factor in? just looking at earnings season, we're actually halfway through and it's been a really good earnings season, just in terms of beating consensus 82% of reports have beat consensus on the bottom line that's better than the 77% five-year average and up five points just from last week alone, so this week has been a key driver here, especially with big tech names but companies are exceeding expectations by a lesser margin than history so, by about 6.5% above expectations below the 8.4% five-year average positive surprise rate. so, more companies exceeding, but i think going into this earnings season and you guys could probably comment on this as well, there's been just a lot of downward revisions. a lot of lowering of expectations so, the companies were beating, and still not even beating by as

wide of a margin as they have been historically. >> hence the market multiple has moved higher and that seems to be a concern of any number of the strategists who come on who are perhaps less than constructive on the market from here it's funny, scott, i've heard a lot of them lately and of course they just keep explaining themselves, and yet they haven't capitulated to a market that just kind of keeps powering and grinding higher. >> they haven't capitulated, but in some respects, let's take mike wilson for example at morgan stanley, it's not like he's all of a sudden bullish, but he's realistic enough to say, as he did earlier in the week, i think, at the very beginning of the week, you're wrong. we did not see earnings holding up to the degree in which they have we didn't see the a.i. bubble -- excuse me, you know, well, what some would say is a bubble, but the a.i. boom is better said, to the degree that's carried the market higher and the magnificent seven stocks either. if you see the writing on the wall, you may ignore it for as

long as you can ignore it, but at some point, you have to acknowledge the call was wrong now, whether those types of strategists actually get more bullish remains to be seen as in some cases, the narrative has changed, and that the market's been in this uptrend. you have a growing number of people who are now on the bullish side, which makes other folks nervous. too many people joining the bullish brigade. but nonetheless, at least some of the more negative strategists have kind of seen the light. >> i wonder what those types of capitulations say about the overall kind of market sentiment. we just got through bank earnings or at least for the big universals, and trading activity was really muted, and a lot of people blame that on the fact that there's such lack of conviction about what's going to happen with the economy, what's going to happen with the direction of the markets, especially in the fic markets, fixed income, currencies and commodities. i think part of that has to do with the strategists saying,

this is not what i expected to happen this is not what my regressions were telling me, but here we are. >> indeed, here we are, and as we said, of course, scott, we have a lot of earnings to get to as well this morning, including exxon. chevron prereleased. ford, something we may want to talk about as well >> oil is on track for its fifth week of gains, david it plays right to you on exxon as the drop in oil prices is obviously hurting the profits of exxon and chevron. profits were down 56% at exxon profits were down 48% at chevron. you know, you know exxon better than anybody from the doc you did. obviously, there's a good correlation there between what's been happening in oil, notwithstanding the last four weeks, but in a bigger picture, oil prices down hurts the profitability of big oil >> no doubt, but they're still doing just fine. >> yes, they are as they usually do >> both darren woods, who joined "squawk box" this morning, and mike wirth, who joined us, if you recall, earlier in the week,

we got a preview of chevron's numbers when they extended mr. wirth's contract for a period of years beyond what had been the retirement age at chevron, and they announced the de departure of their long-time ceo. we got a preview of that but both woods and wirth talking about a world that still needs an awful lot of what they're producing. take a listen. >> i think this year, we're going to see record high oil demand i expect that to be then next year even higher, so certainly in the short to medium term, there continues to be a significant demand for oil and the products that come from oil, primarily because the world is growing, and economic prosperity is improving all across the world. >> mike wirth making the point, evs are here, and over time, yes, that will dampen consumption of gasoline, but chemicals, plastics, ammonia, think about fertilizer, there are so many other use for these

products, and that's when you hear woods talking about things like that. it's not just, of course, for automobiles, and that's why you're still -- and those who are very focused on climate change, clearly disappointed to hear the idea we're going to produce more than we ever have >> but interestingly, just looking at a superlative here, third straight drop in profit, that's the longest decline since the 2014-2016 oil crash, so despite relative stability on the oil front, i mean, obviously declines in the last five weeks or so, weaker nat gas and shrinking returns from fuel sales. i think the question remains, when this turns around for them. >> they're generating so much cash >> i think they returned like $8 million to shareholders >> they're doing some of it, they are doing some deals. exxon did the deal with denbry a couple weeks ago chevron has done some deals in the permian as well. increasing their footprint there. so, you know, they are putting

some of it, at least, back into trying to enhance production but of course, return of capital has been a key part, really, of this sector now for many years in terms of, don't put a lot of it towards future production, as much as give it back to us >> how much do you think we should be thinking about when it comes to the energy complex and what oil is doing as it relates to these questions about china, david, and where the recovery really is? in terms of a global demand perspective, which could add to this fifth week of gains we're seeing in oil but taken on a much longer trajectory back up if you think that that ko recovery's going to start to take hold, because it's been so uneven and not anything close to what people expected it would be at this time >> we talk about it a lot. of course, the expected recovery after covid there has not emerged the way it was anticipated in china youth up emplnemployment over 2% hard to believe that number in

many ways. always tough to get a full read on the chinese economy they did say they grew at 5.2% or something long those lines. that's where the world bank is in terms of their estimates. they're using a lot of russian oil, of course, as you know. so, that's helping fuel, sadly, the money that putin needs to continue to wage war in ukraine. but it is an important point as well, because if they do come back on as strong as they have in the past, conceivably, that will increase consumption worldwide. >> we've seen a little bit of that in the luxury names over the course of the week, and the u.s. was actually the underperforming market with the exception being hermes, which showed sales and profit jumping thanks to birken bags, if you can believe. there's so much demand i don't know how much they cost. what is it, $30,000? same as a car? >> why are you looking at us >> i've never even seen a birken bag. >> i've seen it in the movies. >> you don't own one

>> oh, i do not. no >> what do they go for >> i think it's like the price of a car like -- $10,000, they're saying in my ear. >> i think they go higher than that, though >> they have high resale value so i guess it depends on if you buy it new >> somebody just said $10,000 in my ear, and i think it's low >> i think it's low too. i think they were talking a few years ago. >> way low >> people, they don't know >> i was thinking the price of a car. >> senior executive producer has no idea. what would he know about birken bags my producer, however, does know, and she told me much higher. >> since we're talking about higher prices, maybe we should talk about procter & gamble. >> those prices have stuck, scott. >> talk about the range, right birkin bags. >> pampers down to diapers. >> but seriously, they have pricing power, and they continue to flex that muscle. and that is one reason why you had the earnings which were in their margins, which were strong

and the reason why the stock looks the way it does, david >> operating cash flow, $16.8 billion. net earnings, $14.7 billion. that's fiscal year number. that's a full-year number for the country. because they did report their net sales number of $82 billion, and that was up 2% organic sales and being pushed by price, they are not seeing people trade down to the extent that there had been a view there would. unilever also was quite good on the branded product and not necessarily pushing down we heard from kenvue a few weeks ago. different world, to some extent, but also saying that people largely stuck with the big-branded names that come in more expensive >> mondelez, higher prices there too. you can flex it if you have the ability to raise prices. and you're -- then your margins will stay intact i guess you could make the argument that the fed is winning on inflation there still is inflation in the system >> sure. >> for these kinds of companies that have the ability to raise

prices >> when did they normalize especially if consumer behavior hasn't changed at all. they have no incentive to go back to -- >> not until people really start not buying their products, which hasn't -- they're not buying cognac, though, as we now. the cognac sales have fallen off in the united states scott's not serving it any longer at the end of his dinner parties. >> nope. >> trading cognac for birkins. >> tequila red hot. >> that's all day long you don't have to wait until after dinner for that. still to come, we're going to break down intel's big quarter. let's take a look at futures as well you did have that good inflation data today pce was in line, and the stock market looks pretty good 15 minutes before the open dow would open higher by 166 resqwkn e re" mo "ua othstetis straight ahead

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intel shares, take a look. they are going to be up over 6%, it would appear. this after the company had an earnings beat, at least in the analysts who follow it it returned to profitability, this after two straight quarters in which the company lost money. not to get overly excited, net income was down. revenues, down 15% and any number of their business segments, including client computing, down 11.5%. datacenter and a.i., 13.9% it's just -- >> all business segments, there was weakness >> it's just they did better

than had been anticipated. so, it is being rewarded go back 20 years as i've asked us to do, and you can sort of see. that puts it in perspective. that's ten now we'll go back 20 that's not much. that's the fraying of a great, great american company right there. one of the key decisions along the way, perhaps, i think it was paul when he said, no, steve jobs, that's okay, we don't need to provide chips to your iphone. we'll be fine. >> if there's a positive take, maybe it's, you know -- maybe you could say pcs have bottomed, and that's what they're going to hang on, and then it raises issues, too, about the story of the day, which we started with as we talk about big tech and looking at next week a.i. and whether intel can be a real player in this new world of a.i. as it's been all about nvidia and in some respects broadcom they cite competitive pressures, not necessarily related to a.i., but amd comes to mind. so, there's been every reason to

talk about all of these other names and not necessarily intel. that's part of the problem that they have to figure out how to overcome >> they do, and part of that has to do with their manufacturing capacity, which they have been advancing. i think they're still a few years away from where they want to be on that front but some of the commentary from pat gelsinger has been that things will improve in the second half of the year, especially for personal computers, where they play heavily, and so i think the market, it's the kind of stock where the market is really looking for good news on that front. >> you can take a look there that's just a year in terms of how nvidia has distanced itself from every other company, of course, and there's a few years. take a look. look at intel there. you know, when you look at intel over the last 20 years, you see the decline of american chip manufacturing, basically, and to your point, they missed a couple of cycles on nanometers. taiwan semi became the world's preeminent manufacturer of the most advanced chips. intel was, and then it wasn't.

>> apple >> apple makes the m-2 for their macbooks samsung. there are different chips for different types of uses,but we grew up in a world where andrew grove, i remember back in the early days when i was at -- andy grove was the king, and intel was, without a doubt, one of the most preeminent american technology companies if not -- it's hard to bring that back >> well -- >> chips act may help. >> yeah. yeah and gelsinger thinks he's the right guy to do it the market hasn't necessarily given him the benefit of the doubt beyond that first day. you remember when he was named as he's coming back? the stock popped on these great expectations that gelsinger was going to return this company, to david's point, to prosperity and we're still waiting. >> these things take a while >> it takes a while. it's going to take a long time to build the fabs alone that they plan to build in the united states, in part with help from

the chips act. >> the r&d aspect. >> finding the workers is not easy either. tsmc, which is trying to do that in arizona, will tell you as well it's just not that easy. >> yeah. well, we've got a ton of other earnings to hit with names like roku, mondelez, and sweetgreen on the move, taking a look at futures at this hour in the green you can see there, dow is indicated to open about 170 points higher this morning more "squawk on the street" when we return.

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>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. well, ev adoption is still growing. the paradigm has shifted ev price premiums over internal combustion vehicles fell more than $3,000 in the second quarter and nearly $5,000 in the first half we expect the ev market to remain volatile until the winners and losers shake out >> all right, let's take a look at shares of ford. that was jim farley, the company's ceo, of course, on the conference all after earnings. you can see not much of a move there. you know, jonas, who follows the company closely at morgan stanley, the analyst, a tale of two auto companies i.c.e. beats, but scott, they talk about ev retreating and obviously, he talked about some of the challenges and opportunities that they see in that market. such an important one for them as they retool the company

>> they just cut the f-150 lightning by two grand they're trying to stimulate sales. it's interesting to hear farley just say, the market's going to be volatile until the winners and losers shake out you could make the argument that it's already shaken out. >> yeah. >> and that the winner is tesla and the loser is everybody else. it's been able to distance itself, to some degree musk putting growth over profitability the way he has by simply cutting prices, david, to the degree they have, repeatedly, and he may not be done, to continue to spur sales. you look at the stock performance as we have on here, what tesla, over a long -- you have tesla this maybe is obviously not representative of what the stocks have done versus one another. ford shares have, for the most part, not been able to get out of their own way tesla shares have had remarkable -- there's a better representation on your screen of

what i'm talking about >> winners >> winners and losers. there is a winner, and there are many losers to date. to this point. whether the gms and the fords and some of these others make up some of the -- >> you know -- >> it's that bell. let's take a look at the realtime exchange. should be a lot more green on that when all is said and done here at the big board, celebrating its recent listing over at the nasdaq, an agri foods supply chain provider. of course. >> sure. makes sense. >> yeah. >> but going back to the conversation of ford, you know, as things shake out, they can't afford to not be in this space if this is where consumers are going, they can't just pivot completely and be, like, we're not going to do evs at all

but i think the pricing dynamic is an interesting one that really does need to be sorted out, and who has the ability to charge more for these vehicles who does need to maintain kind of a tesla model of cutting prices to get more scale, more share amid all of this competition? it's really interesting here, especially as adam jonas says they expect major changes in ford's ev strategy may be necessary. is that produce? is that production is that the vehicles themselves to make them potentially more appealing to consumers is that the manufacturing process? i mean, all of these different levers that can be toggled, but as you mentioned, scott, time is of the essence you can't just do this over the period of years. the chips are falling now, so you have to kind of claim your rightful place in the ev history world. >> i think what was most, in some ways, telling, from the ford call, is he talks about their strategy at ford to have

an 8% margin on evs, and to your point, scott, and to the pricing power that tesla has, an 8% -- that shows the difference. they were coming down from what were the margins originally? as much as 15% maybe more at tesla. >> ultimately, you have -- >> and they have that pricing power, in part because you're talking about companies that are one day hoping to get a margin that tesla's far exceeded. >> you're going to have to ask your question -- ask the question, i guess, as to the consumer who is even interested in an ev, are they interested in anything other than a tesla if they're interested in an ev? that's farley and mary barra, general general motors ceo, are trying to figure out. they have no choice but to invest in that part of their business, but it's a hard world to be in when musk continues to eat everybody else's lunch because he has an ability to not

care about profitability in the way that some of these other ceos don't have a choice investors don't care whether musk weighs on profitability or not. they care about the growth are investors in general motors and ford willing to overlook profitability in evs the way they are in tesla? i don't know >> well, and how much brand affinity is there if you've owned gm cars your whole life? if you've owned ford cars your whole life, do you one day pivot to a tesla or do you stick with that brand just because that's what you know, you know where the dealerships are, you know where to get it serviced i don't know how strong those bonds really are, especially when you're looking at just such a different model in terms of evs and the other things that people look for. it's just not your traditional car shopping experience. >> yeah. david's going through a press release. he'll be back with us in a second take a look. let's note the market as well, because we've gotten out of the

gates pretty well. the dow streak was ended at 13 in a row as yields move higher yesterday. a lot of eyes were on the bank of japan and this policy tweak, as it's being called but nonetheless, we're higher across the board dow is up just about 200 points. earnings, leslie, as we've been going through this morning and what happened this week, pretty good across the board. certainly better than feared there were some questions as to whether better than feared was going to be good enough, whether the market was going to be receptive enough to better than feared it seems like that narrative that's been in the market isn't ready to change yet. >> earnings leading the dow to the upside here. you've got intel up 4% procter & gamble up 2% largely a lot of green on the screen for those names the biggest laggards are cisco, chevron, which has david pointed out, preannounced, and is down only about 0.74%, so nothing crazy. but yeah a lot of green on the screen for a friday

of course, we've got that pce data what the bank of japan did market's really distilling that and how it interplays with u.s. markets. >> i want to talk to you about financials we got these new capital requirements, questions about what you're going to have the same degree of buybacks that you've gotten as well. financials have done next to nothing this week. now, over a month, they've been one of the best performing sectors, up 7% the best-performing sector over a one-month period of time, financials because the stocks reacted very positively in a way in prior quarters they haven't. >> it was the banks within the financials, which i think people were surprised about, because talking about negative earnings revisions, the bank saw a lot of those revisions come down over the last few months in the wake of what happened in march and april with the banking turmoil the biggest winners, if you look at kind of the bank stocks that have done the best, especially since then, it's basically the banks that acquired assets of the failed banks >> jpmorgan.

>> it's jpmorgan it's new york community bank corps, which i don't know if you saw this, they got an upgrade today. they acquired the signature assets, on the prospect of them just dominating more share as a result of that and those who acquired silicon valley bank as well. >> fabes, you good >> i was trying to review the charter release, one of the larger cable companies in the country there. taking a look. >> that's new york community bank corps, what i was just talking about. >> got it. we also got t-mobile let's dive into these two if we can. t-mobile, of course, and again, it's funny, we've been talking in various ways about tesla versus ford, intel's decline over a period of years, and then there's verizon and at&t in the competition they face from the likes of this company, which has the largest market cap of any of the wireless companies out there by a pretty substantial margin over verizon i can remember when they passed it

it was either earlier this year or last year, but you can take a look and it continues at this point. postpaid net customer additions, 1.6 million. churn was 0.77%. churn, in the industry, overall. verizon churn is very low too. they added 9,000 postpaid. at&t had a good quarter on that front as well, although neither stock responded very well to earnings there is that concern about the lead-wrapped cables, most heavily, when it comes to at&t, although they have responded to it less so for verizon and virtually nil for t-mobile there's no legacy business there in terms of having stuff buried in the ground. you can take a look at at&t shares, which have been disastrous over the last year at this point not so for t-mobile, but not a great response in the stock market stock hasn't done much of anything this year flat is not bad for this sector, given you have had declines of at&t of 20%, verizon, 14%.

continued competition is not just limited to the three companies, but includes our patient company, comcast, which we talked about yesterday, added 340,000 or so wireless subscribers, and for its part, charter adds 648,000 mobile lines. that's both residential and small and medium business mobile lines. you know, you may see the ads everywhere for spectrum. 6.6 million now, they have, total mobile lines at charter, and this is the evolving competition we've talked about, the mv&o they have with verizon to resell, essentially, the verizon network, has proved to be a competitive help to comcast and charter. charter's shares, overall, up a bit. not nearly the reaction that our parent company, comcast, got yesterday and seeing a bit of follow-through today as well after it bested expectations

charter, for its part, had second quarter adjusted ebitda, 5.5 billion. that was up 0.2% and topline there as well, up just ever so slightly second quarter revenues, $13.7 billion, up. we talk so often about the video customers. they continue to be in seminal decline. a year ago, they had total video customers at charter of 15.495 million. now, they have 14.7. so, that just gives you a sense as to what's going on. june 30, 2022, versus june 30, 2023 and that's only increasing in terms of accelerating, in terms of cord-cutting, which we talk about all the time, what it means for the likes of disney, for paramount, for roku. >> roku. >> nbc universal >> maybe for roku. >> up 16% as we speak. >> yeah.

again, there may be a function of just not as bad a quarter as people anlticipated scott. you can see what's happened to that stock >> the only thing i see is a narrower than expected loss, to your point of being better than feared but better than feared in this kind of market is good enough in some cases, and maybe that's the overarching theme of earnings season as a whole. just better than feared. you could say that about the prior earnings season and the one before that, because you don't have a rally the likes of which we have had in the markets overall unless you have put in the books better than feared earnings seasons, plural >> well, and of course investors try and kind of garner a read-through roku can showcase they're doing a little bit better than that, you get a 16%. but there are so many interesting dynamics going on in that space right now, especially with the writers and the actors strike and the ability to continue churning out content in the current environment. the market just had a lot of kind of negativity surrounding

that name that just better than feared, as you mentioned, enough to get a 16% pop today >> m&a, as you both know, has been relatively muted throughout much of this year, but one area we continue to see are these big premium purchases by, let's call it, big pharma in this case, not quite as big it's biogen on the buy side. it's a company called reata pharmaceuticals on the sell-side here we're talking about a rare disease, product development, global commercialization they're dealing here with what they call serious neurologic diseases they do have an fda-approved first and only approved treatment for something called freed rick's ataxia in the u.s the premium is quite significant. $172.50. it was trading about $109 yesterday, and the expectation is it will, of course, boost that rare disease portfolio.

biogen has been in focus, in part, because of their continued efforts to try to come up with significant advancements in terms of combatting alzheimer's. with some success. previously, not as much. but here, again, $172.50 they've already got the vote, up 36% voting power of certain stock agreements they already have from stockholders there question, of course, in many of these, becomes antitrust you don't expect to see it, but you never know when the amgen horizon, nobody expected the ftc was going to have any issues whatsoever in fact, they have they're scheduled to go to court, perhaps in september. we'll see whether there's a settlement that takes place prior to that. and lina khan, who joined us last week here, was also at the economic club of new york earlier this week answering questions, i think, from peter orzak. but she spoke specifically, and sort of in an interesting way, about this very subject of big pharma buying smaller

competitors. take a listen. >> we have also heard from some capital allocators about the ways in which having a smaller number of exit paths or just a handful of companies that are going to provide that commercialization, that there's a worry that that, in and of itself, is also dampening the valuation or kind of impeding their ability to actually negotiate on the deal terms, and so even if, at the end of the day, you're going to have to have some of those acquisitions for that commercialization path, more competition and more jostling among the potential buyers, we think, is ultimately also going to be better for the innovators themselves as well as ultimately for, you know, the trajectory of innovation >> essentially, seems to be saying she'd like to see more competition amongst big pharma to buy these, although my sense is, having followed it pretty closely in some cases, not this one, that there's plenty of competition amongst the pfizers,

merck, bristol myers, lilly, you know, you go on and on from there. glaxo. for these very companies that are at the forefront of innovating, but when they get to that point where they've hit commercialization, they don't have the sales forces. they don't have the ability to bring the thing to market in an effective way, and that's the plan do some really great science, get them to phase two, maybe phase three, and then sell to big pharma, a la what they're doing with reata >> they're issuing long-term debt in this market to buy the company at a significant premium, which you really don't hear about much these days they're using cash on hand, a combination of cash on hand and financing in the markets to do this and so, you've got the regulatory uncertainty financing may be less of an uncertainty. you know, big deals are hard to come by this year. and last year. >> they are. i am hearing generally a lot

more conversation. i think i've said this a number of times from the m&a professionals that i tend to speak to, which is somewhat of a regular basis. there is some hope for later in the year that we may start to see stuff. but again, that lady you just heard from, lina khan, she looms large in the thinking of many who are considering deal making and her counterpart at the doj, jonathan kanter, who we often mention as well, who runs antitrust at that regulator. they loom large because even if you think you can win in court, the idea that you might have to go to court in the first place may mean, let's not bother >> unless you think you can win. and maybe more do think they can win, even if they have to go that road. the ftc, david, to me, continues to -- they keep talking tough, but their track record doesn't necessarily back up the bark >> yeah. >> right >> but the idea is, talk tough and try to stop people from even thinking about doing something, and freeze the market.

i think that's as much part of the strategy, scott, as anything else but you're right the question, though, still becomes, all right, you're willing to go to court, because we think you can win, but that's going to be 18 months. who knows? could be two years really want to take that amount of time? that's still something that's difficult for some ceos to process as something worth doing. >> so much is on hold when you're in the process of closing a merger and those 18 months you miss out on other strategic investments you could be doing you miss out on certain hires because you're just in limbo with regard to what your future looks like you miss out on certain strategy decisions. you can't make as many decisions in terms of supply chain changes or r&d so, you know, that's kind of why you see such a freeze on the market is because people don't want to go through that opportunity cost of 18 months of just lost time, as well as, of course, litigation expense, which, you know, 18 months >> and distraction, as we say. scott, i'm taking a look at mega cap tech and it's leading the way yet again with the nasdaq resuming what had been that significant rise yesterday

very similar percentage increase yesterday at this time, only it obviously retreat as the day went on. but apple, meta, alphabet, amazon, microsoft, all up more than 1.5%. >> no direct correlation, but enough of one, i suppose, that across the entire curve, yields are negative today so, that's not upsetting that story. we're looking ahead to next week, to david's point, with mega cap and apple and amazon, which are going to be the last of the two of the mega cap tech stocks to report the only one that really didn't do much this week -- i don't know what it's up for the week or down -- is microsoft. but otherwise, it's been pretty good across the board in all of those names. >> yeah. that's a great point here. just looking at the treasury complex as well, because we were kind of anticipating or looking into some moves on that front with the boj news and what it meant for some repatriation of cash, potentially selling some of, you know, u.s. government

debt in favor of kind of the -- >> we mentioned the treasury complex. that heads us to the bond report, leslie well done. good segue >> that's why they pay me the big bucks for my birkin bags >> which we know now go up to $300,000 each. >> yeah. >> let's look at how treasurys are faring this morning. two-year at 4.893% ten-year, 3.979% is what you get if you lend your money for ten years to the u.s. government what if you could make analyzing a big bank's data... no big deal? go on... well, what if you partner with ibm and red hat, use a hybrid cloud solution to connect data across clouds, then analyze all that data with watson. okay, but this needs to meet our... security standards? yup. compliance standards? mm-hmm. so they get the insights they need... yup. in real time...

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share what the markets are doing. dow and s&p on track a slow grind higher. dow as we said up every day, 2/3 of 1%, .67%. a reminder later, don't miss wharton professor jeremy siegel on "closing bell" with me. get his take on what's going on with the fed and where he thinks the market can go inhe wks tee

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billion dollar deals have been scarce.

down from 96% last year. deal value is down 62% year over year in the second quarter with the dirth of deals, funding is down to the lowest level. i recently sat down with kkr's global head of equity pete savros at the delivering alpha newsletter he is now is a great time to do deals. >> the data has shown over decades, a lot of data on private equity outcomes, better return deals are done. it's logical purchase prices are constrained and you can't borrow as much and the money you can borrow is expensive. this is the time to be leaning in. >> of course, the flip side is it's harder to exit and sometimes it can be harder to convince a seller at a lower valuation.

stavros says those expectations are finally starting to adjust as there's a pretty long lag in the private markets compared to the public ones, david. >> important point, you can do your best deals in an environment like this, but you need prices to come down that adjustment period takes some period of time. sellers, they can be kind of stuck. especially with a rally in the nasdaq. >> they say now i'm down to 3 or 4, do i want to sell or hang tight until things normalize if that's the view they think it will normalize just the fundraising if you don't have as much dry powder out there. >> many of them do >> they're sitting on it. >> hard to move up in rates.

there was a feeling things were too expensive. >> oh, yeah. >> you know, i do continue to hear we're going to see a lot more activity in pe. that may be a hope instead of reality. we'll see. >> we heard about this a little bit on the goldman call. was that last week i'm getting my weeks confused. they expect that to pick back up pe deals are a big driver of the investment deals. >> stocks have done well over a month. >> yes yes. >> kpr up eight. blackstone 4.8. >> of those capital rules as well because the business moves to the non-bank financials. >> private markets >> scott, leslie, thank you so much for helping me through this hour. >> thank you. >> in particular being here in general, being you. >> thank you, david. >> any time, david. after the break we'll turn back to some of today's bigger earnings movers. we're back in two. i was told my small business wouldn't qualify for an erc tax refund. you should get a second opinion from innovation refunds at no upfront cost.

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good friday morning. welcome to another hour of "squawk on the street. i'm david favor with melissa

lee. have a quick look at the markets. very similar with most of the work at this time. >> exactly then things changed. >> in a significant way. the nasdaq is having a strong morning so far as you see up 1.5% the broader market with enough gains of .8%. >> we can't joke about the dow and the winning streak. >> no. >> that's over. >> that's over 1897 old. >> i thought of you when we went negative and we were not able to have that new winning streak because i thought how happy you would be. >> i was i was. i just can't stand it. >> now we don't have to talk about it intel headed higher beating top and bottom lines returning to profitability after two quarter of losses. we'll break down those numbers roku shares surging. better than expected quarter

shares are inches away from doubling newell beating on the top and bottom lines despite lower sales. cracks in the armor when it comes to the consumer up almost 6%. consumer sentiment is out. it was just moments ago. rick santelli has that for us. rick >> these are the july finals which means the mid month reads get tossed mid month read was 72.6 but it gets downgraded to 71.6. what does that do? that takes our comp from november -- september to october of '21 still a very solid number. on current conditions, same dynamic. 76.6 at 77.5 gets replaced with 76.6. expectations, 69.4 downgraded to

68.3 one year inflation outlook, 3.4 to 3.4 now that's interesting because that is a bit of an uptick from the final read in june which was 3.3. many continue to point towards that and if we look at 5 to 10-year inflation, a bit of a different scenario mid-month read was 3.1%. it now becomes 3.0%. we've had a lot of 3.0 there hasn't be been much movement in the 5 to 10. all of the actions in that one-year inflation outlook we see yields are mostly lower but mostly lower doesn't translate week over week 489, down 4 but up 5 at 397. down 3 on the day but up 13 on the week which means we've seen a de-inversion of about 8 basis points in the 2 to 10s spread. david and the gang, back to you.

>> rick, thank you rick santelli. speaking of sort of the fixed income markets japanese's long battle to get rid of deflation finally seems to have occurred 4% inflation rate? >> yeah. >> in japan. again, this has been going on for 30 years, right? >> uh-huh. you mentioned today's snapshot looks the same the headline from nikkei at 1:00 yesterday saying the boj would consider abandoning yield curve or backing away from it. overnight the boj meeting wrapped up at 10:00 eastern time overnight. we got the headline, they are going to abandon the .5% cap we saw that move immediately. we are seeing follow through we are seeing the 10-year yield pop and that's what caused stocks to go lower we haven't seen that follow through about 4%

that's something we're watching. immediately here though we are seeing equity reaction a little bit to these consumer sentiment numbers which are sort of interesting. >> we continue to have many big cap numbers better than expected quarter. again, many of the stocks were treated during the course of the session. m meta shares up 2.7%. across the board against alphabet, amazon, microsoft, nvidia >> amazing back to the old playbook and every time tech is your fair weather friend bad weather friend, fair weather friend, everything let's go to steve liesman with his take on the big morning for data and central bank moves. david and i were talking about what happened in boj around the world they've stopped effectively hiking campaigns and here we have the opposite at the

boj. >> yeah. i mean, i think what's happening in part was the rest of the world was getting too far away from them. it's a little confusing what they've done they're kind of using the old numbers, 50 basis point cap on the 10-year, as a reference point now. i've heard of caps i've heard of ceilings i haven't heard of reference points it's up to 55. before japan can declare victory, most of the inflation it's had imported. none of it seems to be dom domestically generated that was the reason why the prior central banker didn't do anything about it. now it seems there is enough pressure they need to do something about it on the data, it was good but not good enough for the fed to say

it's all clear i want to show you one chart fed chair powell's preferred inflation gauge. three things i want to show you about in this chart. the first one is that the number came down. 4.13% so it's headed in the right direction. if you look at the actual bar chart, what you can see by eyeballing it, one of the things the fed was concerned about was the pace of inflation declines had been sort of evening off now it seems like it's accelerating them. just one month that's not the chart, guys the one we want is the core services 1x housing. the one powell has been most interested in watching here. it came down to 4.13% so the pace increased if you look at the chart. the other thing you want to look at is what happened in november and december on that chart i guess we don't have it there we go. thank you so much, guys. november, december you saw that decline they had everybody got all happy back then and then you see what happened it went the other way that's another reason why i

think powell is going to be careful here and not react to one, two, even three months of data he wants to see it coming down and keep coming down that's what's going to give him the confidence to say, hey, no more hikes, guys. >> steve, when you look at that chart. it is a significant decline, more so than perhaps would have been the case when it was going up i don't know if that matters, the amplitude. >> i can't always control the y oh axis. you would see it was where they want it to be double this is a big deal for powell. this is a big part of the whole inflation story here it's a big part of the u.s. economy. comes from the core services they think housing is going to come down. that's good. this is the wage issue that they're looking at i don't know how big a deal that

is i seem to think what's really interesting about yesterday's data, david, above trend growth not for one quarter, not for two quarters but for two quarters now. inflation is still coming down they're increasing their outlook for the third quarter. it was supposed to be a lousy quarter. it's not now because of the consumer spending number in this, you adjust it for inflation. it's pretty strong guys like steven stanley are talking about, maybe another 2% of consumer spending number for the third quarter. >> what are we missing then, steve? what are they missing? if this is snapping. >> the consumer. they keep thinking the consumer's going to give it up and the other big surprise yesterday, david, was business spending they keep thinking because interest rates are so high businesses are going to cut back

in their spending but i think we might be seeing some of the government investment programs that are out there show up in the private sector spending. we might be seeing tech and other labor saving things. you live in a world, david, talking to these companies all the time, they still can't find workers. they're looking for robots according to "the new york times" today, robots that can pick up plastic dinosaurs. did you see that story >> i didn't. >> using a.i. and the robots, david. >> i like to see plastic robots picking up litter on the streets of new york city. >> good idea. >> good idea, david. >> i'll let them know. steve, thank you steve liesman. chief investment strategist has a year end of 49.50 for the s&p 500 which is just about where we are right now, brian we've been talking about how difficult the last mile is for the fed. that doesn't sound like an

environment where you want to be long index in general. >> no, i don't think so. thanks so much for having us by the way. we've been saying for several months that we have entered a renewed era of stock picking i think the problem with most investors, not only institutional but high net worth, they're making a call on the s&p, qs, diamonds, the stock market is a market of stocks how the big banks are doing better than the regionals. i don't think you want to be in these more passive type of index level etfs, let's just say i think you want to own stocks that portends to an overall trend, melissa, many people are missing. in the beginning of the year many people are talking about a path towards normalization

i think what is going on is 2022 was your shock 2023 was your awe and as we kind of transition intomore fundamental investing we're going to get back into normalized returns i think that's very, very positive for the markets long term. >> you've been calling for this style of investment for the last several months, brian. index investing was easy it was the time just to own the qs and you could have been a winner so far here today so how do you sort of square that saying the stock was where you should go and it was investing in the index and the big etfs that was the easy way to go. >> no, i will kind of go against that a little bit. let's think about this since the beginning of the year, melissa, we've had three very distinct tech market trades. in january it was the january effect in march was the rotation out of financials into tech and then really what we believe is the

real true thematic fundamental move was more into the ai side of things. if you look at what the market has done in january and february, value was outperforming. small cap was performing it was the march kerfuffle with the whole notion of what everybody likes to talk about what was the magnificent seven the thing people are talking about is over the last 30 days, growth at a reasonable price has outperformed the s&p 500 by almost 300 basis points. more importantly and i think interestingly to us in our work is that dividend growth as a strategy has massively outperformed the last 30 years no one is talking about that i think what the issue is is that we're starting to see a broadening out of the market you take a look at stock performance, earnings growth, valuation, the disparate within those three measurements is very w

wide that tells you you want to own lily versus pfizer or nvidia versus amd something that has a proven track record but their company management as well. >> do you need to see soft landing/no landing in order for, you know, your forecast to come true that's the sort of backdrop that you need to see? >> no, i don't need to see either because the stock market said we're going to see some sort of slowdown when it's down 25% it says some sort of recession is coming. whether or not we see an absolute recession, melissa, i think is a moot point. this obsession with recession and the chicken little recession everybody keeps trying to call keeps getting pushed out what we need to see to get to our 50/50 bull market -- i'm sorry, bull case scenario for the s&p 500 are earnings to

recellerate. it looks like our bull case at 5,050 looks more and more realistic. >> 5,050 is different from your base kiss which is 45 and change brian, always good to speak with you. thank you. >> thanks so much. >> brian belsky. as we head to break. here's the roadmap for the hour. we'll break down the key take aways next. >> profits did fall at chevron and exxon. both stocks under performing why some on the street say it may be time to buy. finally, a look at one industry seeing sales heat up amid record breaking temperatures stay with us 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

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what are your take aways from the costs they're facing and the slowdown in volume land the consumer >> yeah, i mean, look, p&g has faced a pretty challenging last few years but they've managed to do reasonably well, at least relative to their peer group you know, cost headwinds are moderating

they're actually expecting costs -- commodity costs to be a tame wind next year though currency will be a tailwind. we're seeing consumers trading down in certain categories we're seeing them buy smaller pack sizes we're seeing them shop at dollar channel and share gains at walmart which obviously consumers under pressure tend to look at walmart to save money and have more value. so all of that is going on even though we have a hold, that's as a result of ten years of very heavy lifting the company has done. >> your assumption is that p&g will sort of settle out in terms of market share and that's sort of your assumption in terms of

all of the growth forecasts you have i'm wondering if there's a risk in your mind, if consumers are trading down if you lose some of those consumers or if it is always when the consumer has the money they will go back to the premium brands. >> it really depends, melissa. the one thing p&g did is they started value messaging about a year and some change ago what does that mean? they were basically showing, hey, it takes p one bounty versus ten papers of private label as an example. in the minds of consumers they're saying, i'm okay paying extra money because i'm going to have to use lez wss when i wipe table. they were very smart about getting the value messaging out. that's one reason why they're gaining share when value labels are gaining across many categories. >> we heard from colgate stock's down 3.5%. you cover it i think you're neutral on it just give me a take.

they haven't done anything much for the last three years >> yeah. look, i like the changes they're making the reality is north america is under pressure they made a big bet for whitening. that's a premium that's putting pressure on their business the reality is investor expectations were high coming into the print numbers were at the height of guidance colgate raised their guidance but they went to where the street was already part of this is about expectations or highs going into the earnings point. >> nik, procter & gamble you think it deserves a premium because of the execution, it's trading at 24, below the 5-year in terms of forward pes. it's trading at the same multiple as a met tampt i'm curious, how do you sort of walk through this valuation to investors? >> yeah. for us it's really about the

consistency. if you go back and look at what drives a consumer's staple valuation, it's not the magnitude of the growth, it is the consistency of the growth, right? think about it why would a chief investment officer buy a consumers staples company. it's their insurance policy of their staple if they want growth they can go to meta or any other stock you were mentioning. the reality is p&g has been very consistent if you think about long-term cash flow valuations, the duration and durability is much longer than some of its peers and maybe even some tech companies, flight where you have obsolescence risk and based on product cycles that's the beauty of consumer staples. you can find stocks that will deliver consistent results will warrant a premium valuation. >> nik, great to speak to you. >> thank you have a great weekend. >> as we head to break, check out the biggest gainers on the

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welcome back to "squawk on the street." ford shares are under pressure while shares of intel are up phil lebeau and kristina partsinevelos are with us. let's start with phil and ford what stood out to you here, phil >> evs the spending it's going to be greater than expected the rampup is going to be slower than expected. look at the numbers, david in march their guidance for full year ev costs was $3 billion what's changed in three months, 1.5 billion has changed. 4.5 billion expected to be spent this year. that is double what the company spent last year when it comes to evs. what have they got for that? certainly haven't picked up market share they are number five when it comes to ev market share with just 4.6% share. their sales in the first half up just under 12% the market overall for evs, it was up basically 50% as a result of this, as a result

of ford realizing it's not getting the demand, it has to cut prices on the f 150 lightning, last night during the conference call ceo jim farley said we're going to shift gears and move more towards hybrids. here's what he had to say. >> systems from us but don't think of them in the traditional sense of an escape hybrid or pry us they will probably come to light differently than most people think and customers like that. >> the hybrid move is one that is going to get mixed reaction there will be people who say do not abandon all the investments you're putting into evs. they're not abandoning them. as you take a look at ford, gm, stelantis, they are seeing better profits with their ice models i shouldn't say better, they are near record highs. so that's still what's driving everything and the ev business is not there

we know stelantis hasn't rolled out their evs. ge is being judicious though it's coming towards the end of this year and next year and we've seen what's happened with ford the f 150 lightning has not been the success everyone thought it could be out of the gate that could change but the bottom line is this, guys the ev costs are going to be greater so as a result jim farley is saying, right now the market is saying hybrids are in demand we've known that ford does very well when it comes to hybrids they'll pivot and do a little bit more with hybrids. >> phil, as usual, you make it very easy to follow and understand exactly what's happening here i would use your help in try interpreting when he talks about hybrids and says they're probably going to come to light differently than most people think, what is he talking about? >> right i think a lot of people look at hybrids and they think of the toyota prius or the escape hybrid which is a gas electric

hybrid there's probably going to be more plug-ins. probably different variety, different versions of them they are trying to capitalize on folks saying, look, i want to go electric eventually. i don't want to go all electric now. let me take the half step. whether it's plug-in hybrid, traditional hybrid vehicle, there's going to be gradations of hybrids that they will be manufacturing. >> phil, thank you phil lebeau. let's get to another earnings mover intel. kristina partsinevelos has the story. >> that's because profits are back after two quarters of losses the main driver was recovery in its client computing business which really encompasses laptops and pc processor shipments what does that tell us it the pc bottom is in that helped factory utilization and the company is continuing its massive cost-cutting plan.

you're seeing on your screen cutting the dividend, ceo pay, et cetera. those two factors did add to intel's improved margins and bullish margins. amd hired on intel's positive pc it's not a complete turn around for intel. i say that because its data centered supply did lift they said cpu sales will fall this quarter why? because, quote, near term wallet share focuses on a.i. accelerators rather than general purpose compute in the cloud aka, a.i. chips are cannibalizing traditional servers. for that reena lone bank of america is rating it, quote, even though intel highlighted $1 billion pipeline it, quote, pales in comparison. recall the beat and guide is based solely on personal computer improvements but the weak data center business is

still an overhang for the stock. it raises the question is this really a breakout for the stock? are there going to be some long-term holders for the next several quarters >> yeah. i heard an analyst interview this morning on "squawk box. he highlighted if you take a look at an a.i. server the content of intel versus nvidia is single digits versus nvidia is higher. intel could see business thanks to a.i. through the foundry business >> yes they want to operate it as a separate entity. the rumors are it could be sold off, operated that way, separate balance sheet, all of that the problem with intel is we have investors slightly jaded. it's a big endeavor. working on it for several years. they're still working on it. the will they be able to follow through? will they be able to follow through with the five nodes, five new products in the past

four years pat gel dlgelsinger is promisin. isn't it because the bar has been so low that finally people are like, let me get in right now because they are getting a surprise profit. we saw this turn around in pc sales. data center is still a concern amd next week, next tuesday earnings, what does that say they're usually stronger. >> at least they're trying to convince people with the next generation a.i. chip. >> that's supposed to come out she's saying that's going to be a rival to nvidia. >> we shall see. >> always like that, right >> thank you >> kristina partsinevelos. still to come, falling profits at exxon and chevron as though shares are declining further on the year, but is it time to buy the dip?

qu'll discuss that next. "sawk on the street" is back after two. could tell you how they could be more efficient? i'm listening. well, with ibm, you can use software to help you connect and analyze data— from hvacs to elevators to lights. what if we use ai-driven insights to pinpoint inefficiency? yep. and act on it. saving energy, money... ... and emissions. yup. that's a big one. now you've built something better for everyone. that's the sustainability solution ibm and a global real estate company created. what will you create? ibm. let's create.

welcome back to "squawk on the street." former president donald trump said in a radio interview today he will not end his 2024 presidential campaign even if he's convicted and sentenced on the various charges against him. right now he's facing federal criminal charges for allegedly mishandling classified documents after leaving office he was charged again yesterday he's facing state charges in new york over accusations he falsified business records. casino mogul steve ngwynn hs agreed to pay a fee. the nevada gaming commission

finished a probe and in italy divers discovered the wreck of an ancient roman cargo ship believed to be over 2,000 years old. there were hundreds of ancient jars and they're guarding the site it's a hot business with art dealers. >> i could see that. thank you. wti crude prices on pace for what will be the best month for january 2022 that said, still down double digits on the year it's been a similar story for big oil. shares of exxon and chevron after very, very strong years in 2022 as you can see they are down for

the year reporting profit declines. senior energy analyst roger reed give me your read on the quarters for this quarter. >> nice play on words there, david. good morning. we like both of these companies and have for a while exxon as we came out of all of the challenges in 2020 and chevron a little after that. what i think you have to like about both is -- you can say this about the industry, the capital discipline, it's been pretty rare, maybe, you know, not ever happened where you've had commodity prices this strong and you've had the companies really hold back on cap ex and as a result we've seen strong returns and tremendous performance in terms of dividends and share repurchases. >> in terms of the acquisition game, it was not about carbon

capture. will they do more as it comes to buying more properties, perhaps, in the persomean and other plac? >> if you look at the companies, they're portfolio businesses, right? they're buying and selling all the time you had exxon selling a small -- you know, this quarter selling a small refinery in montana, right? you're always looking for them to trade up. in terms of the danbury acquisition, that's carbon capture. chevron doing pvc, that's consolidating an area up in the d.j. basin in colorado i look at both of those transactions as kind of the bolt-on type not necessarily a company transformation type. but overall in the industry there's been more or less a move of publics buying privates and a little bit of publics on

public's competition >> roger, both companies have talked about lithium mining as potential businesses both have said lithium mining is within the core competencies i wonder how you view that as an area will that increase their valuation in your view is that a great business for them >> you know, probably a little too early to say whether it's a great business >> how they're trying to buy it, they've drilled wells all over the world. they have a very good idea of what kind of brine aquifers have more or less lithium in them so if you think of it as a refining business which both companies do, bringing water up, separating lithium and whatever other attractive metals may be in it, reinjecting the water, that's bread and butter for both companies. so i think if you had another

commodity that in a sense was in a growth market but also was an offset to oil and gas, we would consider that a positive in the big picture. >> what's going to be the impetus to a higher stock price here you know, other than obviously a move up on the underlying commodity? >> yeah. yeah give me the -- you take the easy one. i'll take the hard one >> okay. >> yeah. >> exactly >> obviously commodity prices helped one of the things we've been dealing with the broader market and in energy this year is the fear of a recession, the concern of a recession so i think to the extent we see the market get back in a -- we're in a growth mode, right? not worried about employment not worried about expansion. then i think the question is are we investing globally enough to

keep supply where it needs to be not just in 23, but '24, '25. even at this oil price we would see the multiples expand and see a much more reasonable valuation on these companies relative to their historic levels. >> roger, appreciate the update. thank you. >> thank you amid record-breaking heat waves both here and abroad, one sector seeing hot sales. no, it is not energy pippa stevens joins us with more pippa? >> we're talking about the pest control market july is tracking to be the hottest month on record and higher average temperatures pared with milder winters create ideal climates insect life cycles are extended. that means pest control companies are one area to watch. the global market is forecast to hit $32 billion by 2027 in a

highly fragmented industry rollins and rentokil bank of america initiated coverage with rollins calling the company recession resilient. the firm added recurring revenue is 80% total sales and pointed to margin expansion opportunities under a new management team. plus, last year the south was the only u.s. region with positive domestic migration. their higher temps mean demand for pest control is three times the national average if more people are moving south that means we could see more sale for pest control companies. >> maybe, pippa, discussion is too technical, but how much hotter does it have to be to actually lengthen life spans and shorten reproduction cycles? i mean, is it 10 degrees does it have to be sustained 90 degree weather there's an element of

seasonality because once winter hits, there are fewer bugs. >> certainly seasonal and there is a sweet spot whereby if it gets much too hot for much too long that could have negative impacts on reproduction cycles for mosquitoes the bigger picture is seeing changes. whether life cycles are elongating, they're seeing more hatches per summer and so there are all these changes that scientists are trying to understand and better forecast as global temperatures rise and as we see more extreme weather events. >> a phrase never heard on cnbc before, sweet spot for pests pippa, thank you pippa stevens. >> who knew we'd get to reproduction cycles for mosquitoes that's why i love coming to work every day. >> you never know. >> you never know. speaking of you never know, take a look at one mystery stock. it's outperforming names such as

apple and tesla. find out why and just who is hoot is it a person we're back in two.

bitcoin right now just below 30,000 as the crypto heads towards the fifth week of consecutive losses let's head to dom chu. >> it's still around 29,400 at this stage now but if you take a look at the performance of bitcoin and ethereum, it has been a pretty banner year so far for both of those cryptocurrencies on a year to date basis you can see bitcoin pacing things out up nearly 78% ethereum prices up 56% you can see they've traded pretty closely earlier this year that kind of gap widened out this summer. narrowing a bit here see the spread

one other spread we're watching closely is the spread between it and the nasdaq 100, specifically the qqq etf. a lot of folks have talked about this over the last few years with regard to the trading relationships between technology stocks overall and bitcoin prices bitcoin handily outperforming nasdaq 100 up 43% for invesco qqq one other place to keep a close eye on the stock side of things is coin base set to report earnings next thursday coin base has been a star performer so far this year up 170% yes, some folks will point out on a low base. with coin base shares moving solidly to the up side and an earnings catalyst coming up next thursday, david and melissa, it will be something where the options traders are going to watch just how volatile things will get for coin base i'll send things to you, david. >> all right we've answered our mystery chart

question, david. >> it wasn't a person, it was mr. coin base. still ahead, mr. first solar is going to join us. company just narrowly positive after a surging pre-market company reported positive results. the fifth factory in the united states the company ceo will join us and break down the numbers and the e u. for more manufacturing in ths. kicks off at 11. don't go anywhere.

we got some time to go, but markets seem poised to end on an up note. again, things changed yesterday at this time we had similar gains on the major averages. let's get over to bob pisani and check out what he's checking out. >> we're ending the month a little more than 2% gain on the s&p. big gap up at the open the s&p jumped 25 points from the close, gapped right up. see that there i think that's partly on relief over the pce numbers coming in in line with expectation bond yields are down maybe a little overreaction to those bank of japan headlines

from yesterday sectors today, well, you know, the big winner this month has been bank stocks again, another up day in the bank stocks. semiconductors almost trade like a separate sector but technology is lagging this month. energy's been a big winner and health care has been somewhat of a laggard. let's just say that this broadening out story is partly successful here. look at the sector leaders i just want to show you this because it's noticeable how much banks have been leadership groups this month here communication services have been huge, but this is because what's been going on with meta and alphabet they just dragged that sector around all the time. energy and metals and mining, materials, there is your broadening out story cyclicals, deep cyclicals, a lot of industrials hitting new highs. there's the broadening out it's not a big, broadening out if you look at defensive names, for example, consumer staples are lagging. s&p is up 2%, almost 3%. there's consumer staples lagging.

consumer discretionary is lagging. health care is lagging tech is underperforming a little bit. i'd say broadening out is partly successful kbe, the bank etf. this is the big winner this has now recovered 60% of the losses since the start of the banking crisis in may. that is -- >> march, march. >> that is the big winner we've been seeing so far as for second quarter earnings, we are 50% through second quarter earnings, 251 companies reporting as of this morning 81%. that's a little higher than normal the average beat is what's interesting, 6, 6.5% i look at these numbers pre-covid because covid changed these beat numbers a lot before covid the beat was 6% this is the high end of where we had historically before covid. the revenue beats are on the light side i think this is because some companies are having trouble pushing up the numbers on the

revenue side, pushing up prices at this point. so, finally, i think the big thing is the trend in earnings for the first half of 2023 the earnings apocalypse has been averted. the first half we had earnings estimates coming down and recently they've been stable melissa, you're a good reader. are they trending up, down, sideways at this point earnings have stabilized for the second half and in the last few days, the numbers, the estimates are starting to peak up a little bit for the third and fourth quarter. that's a good sign so, the trend has stabilized and started to move up a little bit. that's what we need. the pe ratios are really high. this is about the pe expansion in the first half of the year. not about earnings going up at this point. >> i thought yesterday's session was interesting, bob i thought it underscored the fragility of the gains we made when it comes to yields. it popped above 4% and then there's an immediate reaction in the markets. >> that's a problem. i don't know

people were talking about a slight overreaction to the boj headlines. first of all, we had a lousy seven-year auction at 1:00 and then the boj headlines came right on that. the market just shockingly tanks. we move 50 points down on the s&p the minute we saw those yields go over the 4% level. and that, i think, goes to your point about the fragility of the market we're back today again yields are down a little bit that pce kind of calmed everybody down at this point and as as long as we see stabilization in rates, that's going to be a good thing when we don't see it, this is the pain trade the pain trade would be rates go higher when everybody thinks rates are going to be stable play against the trough. >> the regional banks were considered weaknesses have had the best month overall. >> yes you look at any regional banks, key corp, u.s. bank corp, any of those, they are all about 60%

above. here again, every single day these stocks move up they're all 60% above where they were they have regained 60% of their losses or so now this is on, of course, good news on bank deposits that are stabilizing. this makes it -- even though they're paying more for deposits, you can make it on net interest income. >> that mini crisis continuing to fade as a concern bob, thank you bob pisani "squawk on the street" is back right after this we planned well for retirement, but i wish we had more cash. you think those two have any idea? that they can

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(avo) ask your doctor about once-weekly mounjaro. 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 friday morning. i'm melissa lee with david faber at the new york stock exchange barclay's chief economist is here on a defiant gdp print. >> renaissance macro founder jeff de graaf also with us on the tech side of this historic melt-up in the dow. later, the ceo of first solar, that popped big, now in negativity territory right now. let's give you a check on markets an hour and a half into this summer friday

you can see we are u