nasdaq, if you can move over for a second there, 106 points off, s&p off about 30 points. the ten-year about 4.0, the two-year at 4.760. melissa, thanks for hanging out this morning. >> i'll be back tomorrow. >> join us tomorrow. "squawk on the street" begins right now. good tuesday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber a hefty diet of bearish headlines. moody's put banks on review. ups also weak, ten-year back below 4. our roadmap begins with another downgrade warning. moody difficult's put bigger names on downgrade march. >> we were going to be focused

on pharma. eli lilly with earnings. novo nordisk, the drug cutting risk of heart attack and stroke by 20% we'll talk to mr. irgin and echo star ceo a day after s&p and nasdaq broke the four-day losing streak, stocks back in the red financials in focus among laggards after moody's talking about interest rate and asset liability risk. >> what's incredible is we just went through the quarters. with the exception of, honestly, key, the quarters were good. a lot of them had inflows. people thought there would be

outflows david, when you see these kinds of downgrades, don't you see -- >> yes, yes, yes. >> good, good, good. done, done, done move on, move on, move on. >> you can't pay for this kind of analysis. >> no, you really can't. >> it's important because financials represent a huge part of the market, and if we're going to have blending, we can't have as much lending that's kind of what we're saying my problem with it is it doesn't jive with the facts. it was entirely possible, entirely possible we could have been in a situation where all these banks did poorly let's say jpmorgan, bank of america, goldman sachs, citi -- leaving out citi because i wasn't sure about citi, fams fargo, all better than expected.

>> talking about m and t's here. >> zion was good, schwab was good a lot of people didn't like schwab i like huntington bank these are guys i've all had on first horizon i had on, they're not fatuous, but every one of those is lending and almost all of them had big inflows. this would be fine if comerica had big outputs. i would buy it but they didn't i'm saying the problem is that what was supposed to happen supposed to be big outflows and you're supposed to be worried about them they didn't. >> speaking of the broader market before we get to some of this important news that we want to talk about as well from novo nordisk and the like, china

concern you at all the turnaround, the action we've had in the last few trading days. >> china is challenged. >> more than challenged. those export numbers -- >> other than russia -- >> i mean obviously overseas dropped 14.5%. imports down 12.4% carl, look, i look at this and i think why do we not put two and two together we had a president, president trump, who told you get out of the way, stop making things there. it takes a long time to wean yourself off making things, but we've succeeded. david is right russia and china are good partners russia is small and they need to raise money. france and germany have gone away from them >> car sales down a couple months in a row. july down 2.6. morgan stanley cuts china to equal weight they up india to overweight.

this is a firm that was going -- the beginning of the year they thought china was going to be up 7. >> you're not going to get that. there was a miserable piece about tesla, chinese deliveries down 31% month over month. >> consumer demand isn't what was expected when they opened up dealing with a property sector that's debilitated, trying to figure out ways to continue to stimulate there. property, when that's going well, that's good for the municipalities in china which are selling the land that's a revenue stream that's been cut off at this point you've got high levels of debt on personal balance sheets, incredible high levels of youth unemployment i think it's one of the more important and unexpected stories of the year has been the decline in the chinese economy by the way, not to get too far here -- it's still growing there still isn't deflation, although there is concern about it. >> the plan was become more of a

service economy. all the stimulus is bogus. >> second largest economy in the world. you don't think as it slows significantly that's going to have an impact overall >> i think they're demographically challenged no u.s. company that i know that's put a new plant there what happens if a president who has been president becomes president again and looks and sees who built more factories there, i don't want to be one of those companies. >> i don't want to even have that conversation. can we have that a year from now maybe? >> first things first. >> i was the first to predict he would be president i was wrong about the nobel prize. i said he would be president but i also said he would bin the nobel prize. today's big pharma movers, eli lilly, better-than-expected

profit revenue another name in the space, novo nordisk was up 16 after the anti obesity drugs exceeded expectations in the late stage trial on reduced risk of major cardiovascular drug. >> jim and i were talking about this this is one of the trials out there, trying to get a sense for the broader health implications of the weight reduction drugs. they had been originally for diabetes glp 1 is what they're called novo nordisk, wegovy we'll get to the earnings as well i don't want to state the importance of this, jim. we're talking about 18,000 patient study over five years, average duration of wegovy use was about 30 months. top end of market expectations in terms of how meaningful it was clinically all three components of the primary end points contributed positively we're talking about, again, to give you some sense here, we're

talking about for heart attack, obviously, for stroke and any number of other important implications we haven't gotten things like osteoporosis, some other things that may over time sleep apnea. >> -- bigby next year. >> you take these drugs, lose weight and also have beneficial things that occur as a result of doing so beyond just losing the weight, not to mention this probably strengthens the case for payers, that is, the insurers, having to cover these drugs. >> one of the things people forget, the disease that kills the most people that is stoppable other than, of course, smoking is cardiovascular. there's 928,000 deaths in the u.s. alone in 2020, a million deaths now this would make it so there would be 800,000 deaths, rather

amazing. just in case people don't understand how it works, it lowers your blood pressure dramatically let's say you're 140 over 90, probably go to 125/70. if you're 150/100, you would ge back to 130. if you're on the verge of stroking or dying, it will get you to 150 this is monumental i've been saying it's monumental i said the biggest drug of all time >> this class of drugs >> right lily shares are up on this >> -- >> -- the expectation is it will have the -- >> i have the ceo of lily on tonight. the one they want to try post covid, heavy drinker it makes it so that gatorade

tastes better than alcohol >> when do the vaccine players come back if you're looking at pfizer and moderna lately? >> i don't know. moderna has been quiet, pfizer has been quiet the company most up against is amgen because the rapatha, it does do more for the heart, david, but doesn't have these other characteristics. >> speaking of amgen, the horizon deal, horizon had good numbers, too that would be beneficial -- >> -- >> i want to move on because this is a moment -- >> you're jumping around. >> i'm not jumping around. i'm sticking with what we actually -- can i go >> listen, you move that interview to 10:00 so i can't be a guest. >> you're not playing that not a chance

>> you said it biggest drug of all time eli lilly has a market cap that far exceeds any other pharma company. >> remember, they have giant facilities coming on >> medicare going to cover all these drugs? >> that's a great question i think that this is certainly better -- look, i've been with the success of the alzheimer's drugs. >> somebody reminded me of history. bristol-myers bought amylin in 2012 amylin had the first glp-17 called buy etta. amylin was one of the first there. >> so you take the shot once a week can you imagine when they make this a pill? >> i've got to tell you, these drugs are remarkable you can't get them you're going to run out of

wegovy by the way, this horizon, for the first time last night, really it's a question that the ftc is blocking this as someone who is the head of the american migraine foundation spokesperson, you can't get the word out about the eye bulge and the drugs without amgen's money. yet, lina kahn, the ftc head hasn't included the notion of awareness being stopped. >> jim, again, we will see based on those who have a lot more experience than i do and have read the complaint from the ftc when it comes to their objection, they don't think there's much of a case there hence, there's still a belief that there will be some sort of settlement prior to it getting to trial. >> she says there's examples that amgen has tied drugs. we can't find them we can't find any examples >> listen, good day for pharma

overall. it shows the value to a certain extent of all the science. >> you don't like the ira act which they stuck this in so the government can negotiate pricing of drugs >> in certain instances it makes sense. >> they're still smoothing some of that out. >> merck is really aggressive on that >> ups this morning down 3% after the company cuts its forecast it is a beat, but sales missed, jim. some of the margins after the teamsters deal are now in focus. >> did you know ford and gm went down immediately when that happened people realized the power shift is real. this is the teamsters versus the uaw. teamsters have always been very well financed and teamsters can take the strike. i think there are a lot of people who feel like -- >> really? >> meaning what, jim >> bad number. when you're paying your people more and you're not doing the revenues, it does hurt the

bottom line. it was pretty ugly. >> we know e-commerce is booming. >> avoided a strike, though. >> david, you can avoid a strike if you give the teamsters -- let's just say you cave. that would be the word, and then your revenues don't keep up, that spells disaster. >> this quarter is not reflective in any way of the new deal. >> i think people are looking at the revs and saying they're not that great. >> and heading into higher wages. >> now, i think fedex is in better shape i think they can cut back. remember the plane issue when he came in and lowered expectations a big drop-off he's handled this company -- playing it like a fiddle

fantastic work. >> remember when he came in and blamed the macro economy, remember he did that on "mad money. that was wrong. >> okay. he lowered -- he lowered expectations. >> as fedex likes to do. >> and then he crushed the expectations that's called u pod. >> i remember your eagle speech from a few years ago >> they wouldn't let me give my take no prisoners speech this time underpromise and over deliver, we went all the day. >> you picked the wrong day to go to practice >> he'll be back, no doubt >> still to come, charlie irgin. let's take a look at the premarket. we'll get to the media names with "new york times," fox, paramount, disney news data dog guidance. downgrade of home depot when we come back.

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welcome back about 15 years or so after they split, dish and echo star, dish will reacquire its one-time partner, so to speak, or part of its company in an all-stock transaction. we haven't talked about dish that often these days other than in terms of its inability to potentially raise the necessary

capital that it needs to fund its rollout of nationwide wireless service remember all the money dish spent? charlie ergen spent, acquiring spectrum over many, many years now the process is under way by which they're building out the business the question, of course, continues to be how much do they need and how much can they raise, and how much will this deal help is the key question. it is in many ways designedto give them access to echo star's balance sheet, additional borrowing capacity and things of that nature. it combines everything that once had been the same company and then got split apart and will now come together again. expect it to close by the end of the year that said, jim, the key question remain, without having great access to the capital markets, how do you fund this term? obviously we get a chance to ask mr. ergen in the next hour

>> you have taught me that charlie ergen is money good. >> ergen is one of the pioneers. i happen to personally like him. >> very impressive man. >> some people would say he has not taken advantage of opportunities to truly reward shareholderers over a long period of time. >> i'm sorry we didn't sell ourselves to at&t for a big number we could have bought ourselves back at a much lower number. >> really, what a terrible company. what what did i say i told the truth carl, you mentioned "new york times" and you mentioned fox on the other side of dish >> they were good numbers. dish continues to lose subscribers. 294,000 in the second quarter

down that keeps getting worse. >> can you get that darn dish off my roof now that i'm switching to youtube for football i don't need a dish. >> i'm still worried about the stability of youtube. >> you got youtube replacing cable? >> i cut down a 200-year-old tree to get that stupid dish now i can't get it down. it looks horrible. youtube, i got the package for a good deal. >> david and i will come over -- >> be my guest >> i'll hold the ladder. >> get up there and get rid of that darn dish it's hideous >> i have a beautiful house. >> how about an air gun. >> my wife has four dishes we have more dishes on our roof than we have in our cupboard. >> that's a lot of media consumption. >> yes. >> a lot of satellites.

we'll get cramer's mad dash. futures looking weak as attention is being paid at least to the bksan in china today. back in a moment want more from your vitamins? get more with nature's bounty. from the first-ever triple action sleep supplement... to daily digestive support... to more wellness solutions every day. get more with nature's bounty.

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somebody ordered some laptops? cynthia suarez. cfo. mvp. built for cynthia's business. built for your business. amex business. -- down 25% again this morning as they cut their sales guide, and some banks, as we said, are reacting to these credit rating moves out of moody's on some of the regionals and some of the watchers of the larger banks you can catch us any time anywhere just listen to and follow the "sawonhetrt"pengquk t see oni bell podcast

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let's get to "mad dash" with jim. i've been so busy i don't even know what we're doing. >> we're going to do data dog. this is important because i never actually cared for the name but very good management what data dog does -- let's call it first of all under the category of enterprise software. most of our viewers would never come in contact with data dog. they do cloud-based monitoring it sounds a little like new reliction. everyone likes their analytics that i know in the business. they did a good number, but gave you a very weak revenue guide. in a world where revenue guides are everything and blarkark lay said there's no clear fix. you have a company with an incredibly high multiple it's going to sell 80 times next year's earnings. this market has no appetite for

a company like that. before it became public, there were many bidders, folks that wanted to buy it it's important to point out that it's a $34 billion company it was loved, and this is a shock to people. it's bringing down some other companies. >> did they give a clear sense as to why -- >> i didn't think so. >> i sensed kind of an unrealistic view of their own -- >> previous trajectory. >> yes. >> now they've corrected >> yeah. again, i want to emphasize, there's a whole world of companies like data dog, month mongo db -- unless you're in the game, you don't understand them. enterprise software has been where most of the venture capital money has gone to. you get the service now and the

salesforces have been so successful. >> -- name that guides above on eps despite the revenue guide. >> people don't care it's a revenue company if you want fast growers -- [ cheers and applause ]. >> they were in disarray on the conference call. at one point, look, we're not happy with ourselves >> a lot of where the analysts are caught bysurprise. those kinds of calls are very jarring. it's like wow, they hate it. they loved it the other day. kind of like agi jilted relationship. >> meridian link celebrating th second anniversary

jim, at least we've got harker saying -- >> thank heavens we do have a lot of negative news i thought yesterday was a true good market. this is more reacting to china harker's comments make me feel like, look, we're going to wait and see. don't take the fed out of the equation it is unfortunate that there are so many huge disappointments today. >> there are a lot led by iff. >> jesus, a once pristine company. >> -- >> -- so many years. what has happened there? i can detail a number of accusations they did they clearly have not gone well at least as judged by the performance of the company the news this morning is after reporting earnings it was the guidance reduction, jim, much worse than expectations.

>> david, third time since the december analyst meeting they guide down that was not long ago? >> when a company puts in a release amid the current operating environment, iff has performed zero expectations across majority of the portfolio. you know you've got trouble. zero expectations. >> lucas meyer is a company for beauty ingredients it was considered a brilliant accusation now frantically trying to sell that's very jarring. >> i think it's worse even if you go back. they have a relatively new ceo, too. >> yes just so you know, they had to reduce guidance. they raised the price of their product, inflation-based pricing. they have two big competitors. the customers didn't go for it, so they lost a lot of business but you're right, this is a

really excellent company this was at one point one of the great blue-chips of america. >> i know. significant volume declines in functional ingredients. >> it started when they bought the outfit in israel where there was a lot of chicanery >> paid a lot more than they should have for that company >> almost every great smell has come from them, so many great tastes have come from them, whether it be the hot taste from a dorito or the amazing diamond which was the liz taylor smell, long after she passed away it was the number one perfume. >> what was the oscar laf vant line, always a bride, never a bridesmaid what was the line? >> national velvet unbelievable short story

butterfield eight was the exchange -- bu 8 i was adam 3518. >> i was looking to see what underperforms well, el or iff? >> el was one of the greatest performers i know this quarter is bad. >> you're still a believer at what point do you finally say, neh >> the key is not just the buying the key is the selling. >> that's absolutely true. i've been very candid with club members that i don't think it's going to go up i think this quarter is bad. but i don't know when the quarter is good whether you can get back in. that's how quickly the stock runs you can see, if you look at a longer term chart, you can see

this can be a rocket ship. n now, they made a bet on china and made a bet on duty-free. >> still five years -- >> -- >> until the early part of '22, it was one of the great stock picks. >> but china didn't open a lot of companies, the numbers we see, david, on china reflect just a huge botching of the economy by lifetime president xi who takes no heat because he's president for life >> he is guys, paramount reported >> it was okay >> it was okay market agrees with you, jim. the stock is not up much, but certainly not down. >> 200 million in cash flow, david. >> many viewers are aware of some of the issues facing these companies. we've discussed them a lot of it part of weeks ago my

interview with bob iger. we'll get disney earnings later in the week which will not be good. >> they did pretty well given the original deal was rejected by antitrust regulators and they lost in court. when you add in the break they got from the original deal, you get close to the price they were going to get from the random house-penguin deal

it takes a half turn off leverage which is important for these companies at this point. the big question, of course, remains unanswered as it does for so many of these companies what does it look like for streaming services versus what they're losing every day which is the foothold in the business that produced such high operating margins. >> so, karnak, what stock am i thinking of that did better? that did better on paramount >> on an ad basis? >> i love the times. talk about an unheralded, fantastic web presence, and merit levy, the ceo -- >> they did the digital transformation >> they're the winner. they're the one you subscribe to, you don't think about it.

>> puzzles. >> do you do wordle? >> i did it in three seconds i did it in three seconds. >> if my family misses it, there's a riot. >> my wife is just -- wow, how is the day going wordle >> i like the athletic >> i've got to tell you -- i want to go back for a second i thought warner brothers with the huge cash flow was fantastic. >> you continue to warm up to zaslav because you're trying to get him for an interview >> i'm completely transparent. >> if i was covering you, i would have -- you wouldn't catch a pass. >> you got me. >> i see you in the zones of wyoming soon >> but times was the best. i met the ceo at one of the 72,000 events that marc benioff throws it was a remarkable revelation

about how humble she is about a site that really did turn into the one that was the winner. when i started in the street -- we had a joint newsroom with "the new york times. they took every bit of knowledge we had -- not that we were brilliant, but they havetaken this thing and made it to be the gold standard of sites we get. it's also beautiful. the late rich mizely who was a brilliant man, did so much great stuff -- >> on the engineering part that is interesting. some consumer names. kelsey cut home depot and lowe's >> underarmor, inventories were up 38, stock hasn't moved on much of the results. they cut their full-year -- i'm sorry. the inventory number, they do beat despite the estimate for a

loss. >> at one time i thought they could rival nike no maybe they're rivaling -- not even crocs they're ahead of crocs roger federer -- >> a lot of different models. >> hoku is better. >> mine squeak i sound like squidward when i'm walking down the block. >> what skreek >> my ahn's. >> -- >> we'll get anti-pebble stuff. >> my pick for the best stock of the year >> look at that thing. >> qsv, jim, with a beat pretty good comps out of burger king, up 12 -- >> that was an amazing quarter

david, i have patrick doyle on tonight, want to completely crush -- you have charlie ergen. >> i do. first time i'll talk to him in quite some time. we used to do interviews regularly. >> lilly is up 15% market value is up -- talk about who you have on tonight. >> i like to have a big show it's a really big show. >> probably half a trillion dollars. >> -- >> these very impressive results from novo nordisk, weight reduction drugs. think all cardiovascular events. >> this drug is used -- there are many, many drugs both for pain and for schizophrenia, for mental issues that put weight

on this is now given in conjunction with it. >> if you put weight on, people don't want to take them. >> i look forward to hearing from mr. ricks >> david is one of the least promotional people on earth. his cfo is so closed-lipped, every time i speak to her, she switches the conversation to the salad. >> somehow the salad >> balsamic. >> amc did swing to a break b even they were looking for a loss highest quarterly attendance in four years as we've gotten conflicting signals on domestic box office. >> all we have to do is talk about "barbie. oh, my people talk about "barbie. it's like raiders of the lost arc or something. >> the first one not the most recent one. >> okay, the original "star wars." >> can we give a little more

credit, ynon >> ceo of mattel and the benefits they got from it which wasn't from the sale of movie tickets. >> the guy who really made the money in warners brothers. zaslav. >> we know who you're talking about. >> barbie with a b >> you want to just ask him? >> i'll ask him. >> i'll ask him. >> i've got him on super speed dial remember when i called noto? that was crazy he picked up it was like 4:00 a.m. there. >> he was getting ready for our interview that you weren't a part of. >> that's why i called him i was pantsed. i don't like to be pantsed by my

own team i need to talk about an out-of-body conference kpaul where the first thing he says is we're going to save the world, we're the world's best company it was like -- i don't know. i read it and i said, guys, you're a software company. you're not lowering heart attacks. it was a horrible conference call i've been on board the day -- when they did billion dollar buybacks, the conference call was jarring. there were no curse words, so it's a little step up. you can't just come on and say we're the best, we're the best, we're fabulous, we're the best. >> introducing themselves strongly in terms of at the forefront of ai. >> yeah, they're ai. >> everybody is ai. >> you know what -- restaurant brands is ai they're trying to figure out -- >> -- had a big year.

>> jensen huang's speech today who do you want me to mention? >> i don't know. i'll mention all the automakers including tesla, of course >> -- i'll see you and raise you a john stankey. >> -- down 1.75% gm is down, ford is down. >> the september 14th strike is for real i really believe it. i've gone on record with carl. i think it's going to be a strike and think think they're back to a class warfare situation. i see the ftc with amazon which i don't think is going go well jassy reports an amazing number. people absolutely love prime day. he's lowered the price of pretty much everything. no, he's in front of the ftc for doing -- i don't know what monopolistic characteristics. >> what they talk about -- >> what is that meeting going to be like? >> their ability to suppress things that otherwise would occur -- the ftc's view is we

should not just be focusing on consumer price there are broader implications -- >> the guidelines are about competition. look, i think amazon is great. it's unlike estee lauder amazon is in a very good position i would tell you i think that meeting is going to go very badly for amazon amazon is a large company that lina kahn, head of the ftc, believes abuses its market power and wipes competition. it's right in her crosshairs. >> after amazon's comments about north american retail, walmart with a new 52-week high. >> walmart is at this point in the economic cycle when people feel like they have to cut back, they go to walmart walmart has unbelievable prices. david, you and i have to go to walmart. you will not believe the apparel. >> you've been saying this are they moving into target's --

>> i think they are. we went into walmart, expected to go in and buy a couple things we ended up spending a couple hundred bucks. what i love is there are countries -- this is something they don't talk about but i wish they were. there are companies where they're a huge factor, in poor countries. they've got to buy america and that's a lot of -- grocery they are a changed company where i'm sure if we could get doug on to talk about what he's doing worldwide buying stuff instead of china, it is remarkable they are one of the reasons why china exports are weak >> as we've pointed out through the years, a lot of the shelves were filled with products that were made in china they came back and talked about -- >> arts and crafts aisles. >> how are you able -- use

sources from other countries. >> sri lanka, pakistan. >> -- but tends to be more expensive. >> the prices they have, i can't believe they have these prices i found myself buying in the pencil and pen aisle buying everything they had. i bought everything they had they were made in countries that were -- i felt great about supporting >> the dow down 318 which is going to take us back to maybe 80 points above friday's close we've given back most of monday's action. almost every sector is red health care is the only exception. financials, energy all down 1.5 to 2%. watch bonds today. $103 billion in treasury auctions begin for the week. that's going to be very important for the markets obviously with the ten-year sub 4. back in a moment

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early session lows dow down 350 led by financials, industrials, goldman your biggest loser down 3 a lot of attention paid to the banks in the wake of this by moody's last night stop trading with jim after a short break. don't goway. ♪ ♪ opportunity is using data to create a competitive advantage. ♪ ♪ it's raising capital that helps companies change the world. it's making complicated financial concepts seem simple. opportunity is making the dream of home ownership a reality... ♪ ♪ ...writing new rules and redefining the game... ...and driving the world forward to a greener energy future.

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let's get to jim and it stop trading. >> my hat off to martin sh rober who worked at ibm and then took care of the spinoff which does great consulting and they're running off contracts that were very negative. left overf from ibm, and he sell the stuff everywhere martin is a good plan and doing a lot -- will he be accenture one day? what's amazing is he's turned that around and next year i think is going to be big earnings so my hat is off to martin good job. >> tackle lily tonight >> yeah. and also a qsr, which is burger king and then i've got really interesting -- we don't talk about it enough, merging with

one oak and i had enbridge last night. people can get good yield from the pipelines. rather than go the southern or dominion, people should pivot towards enbridge or one oak. looking forward to saying goodbye. >> we did get west texas below 80 for a moment. >> i know. >> this morning. >> look, i have to tell you, we are swimming in russian oil. it's hard what to do every time you see china down, you think they have too much. >> trades on china. >> retail gas topping out here >> we had the highest gains in gasoline prices in a long time it's good. makes it for the fed easier, harker being our hero today. why not? yeah. >> another company we covered s&p up 480. >> we missed - >> warehouse. >> chegg. >> chegg up 3. >> victim of generative a.i. >> they have their own

generative a.i. >> they have it. but the quarter that was where they got - >> i think - [ inaudible ]. >> jim, we'll see you tonight on "mad money." 6:00 p.m. eastern. when we come back, charlie ergen, merging dish and echostar as the markets are in sell-off mode the market is down 375 now erge

good tuesday morning welcome to another hour of "squawk on the street. i'm sara eisen with carl quintanilla and david faber. we are live for you at post nine of the new york stock exchange take a look at stocks here in the early action declines we're down 358 on the dow. the s&p 500 down a full percent as well, and the nasdaq under performing as it has been as we've seen these rising yields over the last week and a half down 1.25% this comes after yesterday's rebound in stocks. 30 minutes into the trading session. here are three big movers we are watching for you right now earnings is the theme. ups is under pressure this morning. missing revenue estimates, lowering its forward guidance

due to, quote, the volume impact from those labor negotiations and costs associated with the tentative teamsters agreement. look at international flavors and fragrances, slashing guidance after consumers pulled back during the quarter. that company warning that destocking could continue for the rest of the year stock is getting absolutely hammered then on the plus side, eli lilly, one of the top gainers on the s&p as novo nordisk heads higher. >> getting data on wholesale inventory. let's get to rick santelli hey, rick. >> hi, carl, good morning. wholesale inventories in june final which means we take the mid-month read and toss it what was the mid-month read, minus 0.3% that comes down half of 1%, down 0.5% here's the thing, okay, down 0.5% is now the fourth remains the fourth negative month in a row, five out of six have been negative and you have to go all

the way back to november of last year to have a positive number it's the second worst number of the year at 0.5. january minus 0.6. if we look at the trade numbers, this is a fresh june number, down 0.7 multiples of what we were expecting, looking for a number down 0.2 in the rearview mirror, down 0.2 becomes down 0.5% as well and this is the worst number since march when it was minus 2.7% back to you. >> rick santelli, thank you very much as we look at stocks continuing their declines down 354 on the dow, guys, there's fed speak this morning to digest, which is good. i've been gone for a while so i'm happy to be back at it philly fed president harker, a voting president, signaling he's cool with not raising interest rates anymore. we have sound from an event he did in philadelphia. listen. >> absent any alarming new data between now and mid-september, i

believe we may be at the point where we can be patient and hold rates steady and let monetary policy actions, actions we have taken, do their work. >> patient and hold rates steady as the chatter continues over whether the fed is going to have to do more rate hikes. i will say, if you were excited about that, that he signaleded we might not have to do more he did add, i do not foresee any likely circumstance for an immediate easing of the policy rate don't get excited about cuts, higher for longer is still the mantra and basically where the market is, not now expecting a hike in september or november even though the odds are higher for november then september and starting to cut in spring of next year. >> still observers don't think november will be a move. goldman among them and certainly this paper from the san francisco fed yesterday about shelter inflation will add

to the dove's hopes. >> zero, right. >> potentially going negative by mid-'24, potentially deflationary effect in rents comparable to the gfc. sounds a little bit ominous but would help ease concerns there are more hikes ahead. >> there's a good chart, which they're projecting the decline in shelter inflation you know, the debate still, thursday is going to be very important. thursday the cpi report, and energy prices are back up, which is not a good sign it doesn't necessarily feed into core inflation, but we're going to need to see some moderation in core services because all the moderation from the peak last fall in inflation in core, has been in goods, not in services the biggest battle here for the fed is going to be on wages because we still have a very tight and hot labor market, even if it is cooling on the headline numbers, 3.5% unemployment this morning we got the small

business optimism survey overall headline, a little more optimistic, still pessimistic. what i pulled out is the jobs number this is a chart that indicates there are a lot of businesses out there that still have unfilled jobs and openings an just to put a finer point on it in terms of the numbers, owners plan to fill positions remains elevated 17% planning to create new jobs in the next three months up from june, down from a record high, but it's still very high. >> we still have more openings than we have workers essentially. >> exactly. >> which to your point conceivably will keep pressure on wages and, therefore, the fed -- >> sticky inflation and therefore fed higher for longer. does it go even higher >> continues to be the question. i am curious about this san francisco fed seeing housing inflation not just slowing but going -- >> zero. >> do we know what is going on there or what they see happening

as to what would cause that? >> it's just a model they plug in their models. we've heard that shelter inflation is coming down, and the reason we haven't seen it yet, because it hits with a lag. don't know their exact methodology, but it suggests it's going to come down sharply. >> sharply and then go - >> we have -- [ inaudible ] on the show this morning and ask him about it i think the overall question for the market, why thursday is going to be important, jackson hole on august 24th through 26th which is ahead of the september meeting is important, how sticky inflation will remain, right will they get down to the 2% so far it's come down pretty dramatically, but there are signs that the economy is not collapsing and that wage pressure certainly and services pressures remain in this economy. on the other side, moody's downgraded the banks and cut the outlook on a number of banks, which is another reminder that have we fully dealt with the

problems in the regional banking sector including commercial real estate which moody's is sure to highlight. >> when it comes to saying commercial real estate you have to distinguish between warehouses, for example, which are doing just fine and office space which is really what we're talking about in terms of weakness no we're going to see it. will it take time? will it be over a longer period time where the banks are capable of taking a hit. the big banks are. the question for the smaller or regionals where they have more concentration in office space in particular in their particular areas, where they're going to get the keys back from certain developers and/or have to extend and pretend. >> yeah. by the way, worse day here for the kre since early may, so that's going to take you back a bit. also the report on revolving credit balances down for the first time in 28 months. typically not a great signal if you're looking at recession, recession signals, when it tends to fall.

>> we're going to get consumer credit numbers at the top of next hour. i did note in the moody's, it's always interesting the debate whether these downgrades matter. >> i'm sure they do -- >> for the banks i'm sure you talked about it last week in the united states. >> came up once or twice. >> with this one, it does seem to have an impact on the stock prices, but the stocks have had an incredible run since they've run. the kre up 30%. >> so many regionals were the best performers of the month of july the entire list made up of the regionals. speaking of good performers this morning, take a look at shares of novo nordisk. eli lilly. we've got important news this morning from a study conducted by novo nordisk for its weight reduction drug called wegovy 18,000 patient study over five years. average duration of use of the drug was about 30 months and what they were looking for and what the market was very much focused on was not weight reduction -- we know it's doing that -- but what else it did for

you in terms of cutting the risk of heart a tack, stroke, other cardiovascular events, and it ended up being at the very top end of market expectations and being very meaningful clinically that's just been huge news, not just for novo nordisk but eli lilly as well. its entrant in the glp 1s is moderna and lily is now sporting a more than half a trillion market cap which puts it well above j&j at about $450 billion. that shows you, and much of that has been due to, of course, the views of and the potential sales for these weight loss drugs, which clearly will have a benefit beyond that, including cutting heart attack risk, stroke risk, and the like. therefore, enhancing their ability to potentially be paid for by insurance and/or even

medicare on that front let's get to bertha coombs who has a much better sense than i do in terms of that important part of the debate here. it's such an important part of the overall market view of these drugs, ber bertha, in terms of whether they can get insurers to pay for them. >> we've heard from other parts of the industry that have reported, whether it's mckesson that said they saw huge interest in preauthorization services because of these glp 1s or the insurers who have said employers have started to ask for more qualifying and more preauthorization and more sort of limits on how these drugs get prescribed nonetheless, when you start looking at this data, it does become a question of whether you want to in a sense pay now or pay later. they're very expensive drugs, bought lot of folks are pointing to the fact that obesity itself is very expensive.

cardiac issues, high blood pressure, they're all issues that contribute to long-term disease. if these drugs can mitigate that, that is something that a lot of employers are weighing a lot of folks in the health care industry are weighing. it's likely to just galvanize that much more demand for these drugs. david, we saw lily this morning report sales of its mounjaro $1.5 billion in the first six months of this year. wegovy for novo in the first quarter was $677 million they missed on estimates because they couldn't produce enough there was too much demand. ozempic they are expecting to be an $11 billion drug already this year >> i mean, it's amazing how fast it sort of permeated society and the culture and these results on heart disease. that's the holy grail for this country and for the world, bertha what do we know about the study? how definitive are they?

what other studies are in the works? >> there are studies for all sorts of things, not just about heart disease, and that's one of the things that a lot of people talk about i talk to people who are on these drugs, they've noticed their blood pressure has become lower. obviously, they don't have as much appetite as a result. so some people are looking at it for addiction because it does sort of trigger a sense of sayty in your brain. people are looking at whether it might help with alcoholism and other things because some people who are on these drugs also report they no longer want that as well. so there may be some offshoots, different types of dosages medicare is not covering it because there are concerns for older people if you lose a lot of weight, you lose muscle mass and that's a problem for people much older because fall risks becomes an issue when you're older. also that lower blood pressure for folks who are much older can

increase the risk of fall. it's one thing that medicare is still studying, but even without medicare, which is a huge drug buyer in this country, we are seeing these huge numbers. >> yeah. really important study, bertha, appreciate your giving us insight there in terms of what it's going to mean longer term bertha coombs. lily top performer on the s&p 500 right now. under armor, the stock is higher, reporting this morning, q1 was a beat on profit and revenue expectations it also maintained the full-year 2024 outlook citing a challenging consumer retail environment in north america the brand new ceo international and direct consumer business drove the strength, realized solid growth in the quarter, and continued to deliver the story for under armour, it's a show me stock and they have to engineer a turnaround in sales and that's what ceo is focused on she spoke to investors on the call today i think there's some anticipation building they might do an investor day into next

year to map out a longer term trajectory it's in the release. she wants to see brand heat and that's that is something under armour has fallen behind on. >> how do you generate brand heat >> better designers and you connect -- something she's good at -- you connect the brand and the product and under armour has not done that so well. thank to jeff golden listening on the call, acknowledges, he says it's been an inconsistent journey that has not created the shareholder value that brand is capable of and that's why they need to return to growth so far, going a little bit better than expected on the profitability side, but that's going to be the terror to follow as the stock way down, 20% over the last year and way off its high. as we go to break this morning a road map for the hour. it's been over a year since the chips act was passed and companies are asking, where is the money? we'll explain. charlie ergen merging dish

network and echostar he's going to join us. an exclusive interview you will not want to miss that's coming up next. fears around real estate growing as commercial delinquencies rise and real estate brokerage compass becomes the latest name to report a slowdown we're going to break things down with that company's ceo later this hour. we took another 100 point leg lower. down 425 on the dow. you've been a real rock star. rock star? what do you know about rock stars? billy idol? i mean where's the skin-tight leather? my shoes are leather. where's the unnecessary zippers? that thing! billy, rock star is just how doug feels when he uses workday. thanks, rory. i'll show you rock star! be a finance and hr rock star. workday. for a changing world. billy idol just stole your golf cart! (fan #1) there ya go! that's what i'm talkin' about! for a changing world. (josh allen) is this your plan to watch the game today? (hero fan) uh, yea. i have to watch my neighbors' nfl sunday ticket. (josh allen) it's not your best plan. but you know what is?

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keeping an eye on shares of

dish network as you see there, echostar as well this after charlie ergen announced he will be reuniting these two businesses, almost 15 years since echostar was spun off from dish. the deal bringing together the paid tv, satellite service, 5g network, with echostar satellite communication infrastructure joining me in an exclusive is charlie ergen, chairman of dish and echostar and hamid, the ceo of echostar. good to have you both. charlie, it's been a long time sorry we're not in person, but i'm happy to see you 15 years ago, you said, let me look here, when you spun off echostar, that it would enable the companies to pursue the strategies that best suits their respective long-term interests and allow employee incen tifrs and the like to be tied to the company's performance. now you're saying that it's compelling because it's all about growth and building long-term sustainable businesses what changed so you're bringing

these two back together? >> good morning, david a lot has changed. the biggest thing is we can really build a new -- a new athlete for telecom. there has been a lot of technology changes since we spun off. there's a lot of companies that do satellite well and a lot of companies that do telecom well, but not really a company that combines connectivity in a way you can use both together. with the advent of lower satellites and lower cost launches and of 5g standards, you now can put those things together we built this that has a tremendous amount of resources, worldwide spectrum, expertise in both telco and satellite, network management skills, it all comes together and so while that didn't exist 15 years ago when we spun the companies off, but now it makes sense to put them back together. >> charlie, what i hear from many investors is the continued question of how much capital you're going to need to

successfully build out your wireless business, and many would view this deal potentially under that perspective as giving you access to echostar's balance sheet, one saying to me it's almost a disguised equity raise. how do you respond to those questions and/or concerns? >> well, there's no question that this deal, one of the benefits of this deal it strengthens our balance sheet and the runway for the next couple years, but there will be more to do on that we know we have a lot of capability and assets and we know that we have to continue investing in the future. it's always a mistake for companies to not invest in the future because eventually that catches up with you. we've been investing for over a decade and where we think connectivity is going and i think that's going to position us well for the future but certainly we're in a stronger position today than we were yesterday. >> yeah. i mean, you spent almost $40

billion buying spectrum and the question is, do you have enough money? you don't seem to have access to the capital markets at least at a level you would like to be able to borrow at. citi saying you're going to need between 8.5 and $9 billion by 2025 what are you going to do to raise the capital to build out this wireless business you spent so much money acquiring the spectrum for >> first of all, maybe the market doesn't totally understand the capital that we need that may be partly our fault but we have a tremendous amount of assets. the company allows us to grow parts of our business and maybe hamid can talk about echostar and some of the things that they're doing because they are cash flow positive, ebitda positive, so they bring a lot of skill sets when you put the companies together there are some synergies and business opportunities we otherwise wouldn't have. >> hamid, we'll come to you. you're going to be running a company that's challenged in some of the core businesses, the satellite tv business, you just reported lost 294,000

subscribers. i think you're below half of your previous size ebitda burden from the wireless build out. revenues running at a rate of 8.6% decline a year. your leverage ratio is 7.2 that's for dish i'm talking about. i don't want to -- i don't know the combined companies what do you do when you run this company? >> so here's where we have technology meeting opportunity i think we have a unique portfolio of assets here that provide us with almost any form connectivity we have anything from engineering and manufacturing and, you know, content delivery and mobile wireless. we ought to bring this together in a synergistic way there's synergies to be created and more importantly, bringing products to market bundled properly there's 17 million households in the united states that do not have proper broadband connectivity that's a requirement to participate in digital economy

we have 18 million subscribers spread across three or four lines of business in the combined company i think this opens up a lot of doors for us to bring new products to market, bundle products in the market and satisfy the needs of the consumer i expect to, you know, take advantage of that unique differentiation. i think charlie referred to it as an telecom and we put that to use. >> you talk about a lack of broadband. i wonder, you have a competitor in starlink from elon musk, putting up so many satellites so often, not to mention $45 billion in government subsidies for rural buildout is that a concern for you given the competitive breadth that both those things represent? >> listen, i'm always concerned about competition. that's my job. i consider the market much larger and ever since i've been in telecom 40 years ago, i have never heard that there's been enough bandwidth and connectivity

today, after all those years with all the investments that have been made, the demand is far higher than the supply i think the market is large enough if you look at how many subscribers starlink has to date and how many we have and how much the market has been taken, 60% share of the market, we're still serving a couple million customers and still 17 million households that don't have connectivity there's room for both. i think that more than doubles our capacity to date, and that's the largest commercial satellite for broadband connectivity put up there we're looking forward to having that capex holiday and serving the consumers. >> i might add as you kind of looked in the rearview mirror when you talk about some of the statistics you put out there, but as hamid said, we've been starved for bandwidth in our business from satellite. we've now more than doubled that capacity with the successful launch of jupiter 3.

we have already demand you're going to see those trends dramatically change, and then on the dish side, we've only been in the prepaid business on somebody else's network. that's probably the least economic place you can be in the wireless business and we've just now really met our critical mass of our 73% of population build out with the most modern network in the world with 5g open cloud native network and we're entering the post space which is the sweet spot, so those trends are all going to change. i think if people look in the rearview mirror they won't understand where we go as a company. it's our job to articulate a little bit better where we're going and the opportunities that we have, but it's not the dim picture that you painted. >> i don't mean to paint a dim picture, charlie it's you have enormous capital needs, perhaps not as great as some would estimate, and it's unclear where the money comes from

it's as simple as that you have a put call option deadline coming up this friday on t-mobile 800 megahertz spectrum, cost you $3.6 billion. i would imagine you're not going to exercise that option, for example? >> we won't discuss that, but we have been in negotiations with t-mobile we don't know what that resolution is going to be. there's not a hard deadline this week, and, obviously, there's a lot of opportunity for us. we're not going to stretch our balance sheet to -- we're -- i think we've been prudent capital stewards and we're not going to do anything that would risk what we're trying to do i might add that when we put the companies together, outside people, financial advisors did a lot of stress tests and this company is not going together if what you said was true. >> under stood would you sell spectrum to help you fund the buildout? >> i think there's -- look, we certainly, between the two companies v an awful lot of

assets one of the things that i think is interesting is, echostar has s band around the world and we have the same frequency in north america. you can't do a worldwide system without economically without making sure that you have a business around the world. so there's tremendous synergy there in the fact that you have a ubiquitous spectrum around the world that happens to be a spectrum that's ideal for iot and devices and sensors but also for handsets you've seen reports of people saying that's a $25 billion plus dollar business in the future. suddenly, you know, together we have some of those assets in place, and so i think when you have -- when you have the kind of portfolio we have as a company, whether it be assets or technology or management, i think there's a lot of opportunity for us look, you'll have to standby and wait. >> i will. i will your shareholders are not happy having waited and watched the

stock decline so much. years ago you talked about being a poker player and you had a hand that you felt was a great hand because you had so many different options. do you still feel like you have any options here others would say you should have taken the opportunities to sell or to do other things that could have created shareholder value at 50, at 60, instead of at -- where is the stock a lot lower. >> i think the skeptics are certainly that would be their position i'm a bit more of a half full person because i'm on the inside and the way i look at it is, we've been building and investing for 15 years for connectivity and we're now in the position, we're finally in the position to reap those rewards with the things that we need to go build our business and build it i think our investors will see that i'm a big investor in our company, so certainly i'm disappointed in our performance, but i also have the confidence to know that that's short term and that you're going to see the

culmination of the things that we've put together and start seeing all of that pay dividends for us our investors will be rewarded for that. >> all right i'll be watching closely i certainly hope that it is good news and that we can be together as well at some point and talk about it but i certainly appreciate you both joining me today. charlie ergen and hamid. thank you both. >> david, always a pleasure. thank you. coming up after the break, a look at the chips act one year later. kristina partsinevelos is live in north carolina with a preview of what's still ahead. hi, christina. >> billions of dollars spent on chips manufacturing hubs here in the united states, even though the chips act funding has yet to be dispersed i'm kristina partsinevelos at a north carolina facility i'll have all the daietls on the progress of the chips act coming up next.

$53 billion chips act passed through capitol hill a little over a year ago. companies still waiting on government funds to be dispersed. kristina partsinevelos joins us with a progress report hi. >> you're right. you have the chips act, it's

been a year, but not $1 has been dispersed yet. companies like wolfe where i am right now are already spending money, despite not getting any funding. that's not the case, though, for all chip companies, companies like skywater have said they have to put their plans on hold until they receive that federal aid. >> we've been building coalitions with the construction industry so that once funding does start flowing, we can begin to start that process as quickly as possible, so, you know, in terms of industry speed, made it's not as fast as we would like. >> reporter: that finding isn't expected to arrive until the earliest at the end of this year and that 53 be there is going to be split over the course of the next five years. >> you know, i'm pushing the team to go fast, but even more important, to get it right >> reporter: but getting it right is going to be tough

companies are not only going to have to spend money on construction, they have to work with local schools, educate and find the qualified staff, and then hope when they build these massive facilities, that the customers will come. >> the second thing is about making sure we don't build capacity ahead of demand that we go and make sure customers are signed up to use that demand. the worst thing we could do for the industry and government funded perhaps is to create empty factories. >> reporter: promises being made by micron, intel, globalfoundries, a long list of companies that want to build manufacturing hubs here in the united states, just over the next little while, but this is, in turn, going to help our national security and reduce our reliance on foreign countries like china it's not an easy job because the commerce department has 140 staff members sifting through 400 applications right now that means companies are going to have to continue to wait.

sara >> never easy to disperse hundreds of millions of dollars. thank you. kristina partsinevelos looking at the chips act still to come, moody's out with a warning on the banks, cutting ratings for ten smaller lenders and putting more on watch. bob diamond joins us after the break with his take. a programming note, tune in for a big exclusive interview later this week, the ceo of x, talking about the company's rebranding and the platform. she will join us thursdaony "squawk on the street. we're down 450 on the dow. feel the power of osteo bi-flex®. taken every day, it's clinically shown to improve joint comfort in 7 days, with significant improvement over time. ( ♪♪ ) - i got the cabin for three days. it's gonna be sweet! with significant improvement over time. what? i'm 12 hours short. - have a fun weekend. - ♪ unnecessary action hero! unnecessary. ♪

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welcome back here's your cnbc news update seven people were killed in a deadly double attack overnight in eastern ukraine officials say the first russian missile hit apartments and then as emergency crews responded to the scene, another missile hit a nearby empty hotel authorities say two rescuers were among those who died in the

attack there's a special election in ohio today that could change the state's constitution and definition of majority rule. issue 1, as it's called work raise the threshold of support required to pass state constitutional amendments to 60% instead of a simple majority while it doesn't explicitly mention abortion f it's passed it is likely to affect a november ballot amendment that seeks to enshrine abortion rights into ohio's constitution. georgia kids might need to get their parents to sign off if they want to sign on to social media. two republicans in the state said they plan to push for a law requiring parental permission to use apps including tiktok or instagram. arkansas, texas and utah have passed similar laws. back to you. >> thanks so much. moody's cutting the ratings of ten u.s. banks adopting a negative outlook for 11 others and putting big names on downgrade watch. joining us today former barclays

ceo bob diamond, now the manager of atlas merchant capital. it's good to see you again i think it was bill gross yesterday who said, you look at some of the long yields that caused all the trouble in march, they're just as high or maybe higher now were these banks able to reduce duration, in his words, is the situation better or not? >> i don't think it's worse than it was, you know, six months ago, carl, when we had the collapse of svb. we recognized that part of it was higher funding costs, part of it was mark to market portfolio, part of it was a concern about the portfolio in many cases commercial real estate, and regulatory capital was affected by all of those things, so i didn't find that announcement this morning particularly surprising. i think it's kind of following the trend. there wasn't a huge jump in the etf for regional banks

i think down around 4% in march the index for regionals was down quite heavily, 30, 35%. it hasn't really recovered eartthat much, so not a big surprise in my mind. >> is it all about inflows, and will that be the important data from here on out >> i think -- you know our view. we've talked about it, we feel that worst of people's fears of recession are probably behind us the cyclicals are beginning to rebound. manufacturing and housing. so we've been a bit more positive on kind of a longer correction, rather than a deep and dark correction, and we're starting to see some progress in the inflation numbers as well. we'll see the cpi this thursday, and see if the trend from june continues. i think that, you know, the important thing for me is we all recognize the importance to our economy and to the capital markets of these smaller banks,

the regional banks, the specialist banks, and what are the impacts of the takeover of svb and first republic by larger banks, is many of the small businesses that were doing business there, have already seen reduced services in terms of how many days it takes to do a foreign exchange transaction, the ability to get serious inventory financing, so i am a big believer in the importance of the regional, smaller, specialist banks and the impact that has on our capital markets and the economic recovery. i think this is a bit of trend from the regulators, and i hope it creates an opportunity for private capital to come in to some of the stronger regional banks. >> i know you're sort of dismissing the moody's downgrade this morning, but we are seeing a pretty big impact on the banks. the overall market is down pnc down 5%. they were put on the warning for a downgrade.

one of the issues that was flagged was this idea of unrealized losses, which is what got svb into trouble have we really figured that out in an era where the fed and some key members, including michelle bowman, just on monday, is talking multiple rate increases still needed and those that aren't are talking about higher for a longer period? >> sara, i absolutely agree with higher for longer period of time i think there's a very, very high bar for the fed to actually reverse course i don't see that coming any time soon but i think we're there or thereabouts in terms of rates, and i think, you know, the banks have had many of the regional banks have had six -- almost six months, five months, since the svb collapse to address some of those issues that's why i say it's unsurprising in the sense that it has followed the trend. i think it is an opportunity there is an opportunity in the market for many of the stronger regional banks to continue to

build their capital buffers, particularly around regulatory capital, but i don't see this as like a new trend, but more continuation of what we've seen since march. >> we'll keep our eye on it. worst day for the kre since early may. bob, thanks. good to see you. >> good to see you, carl. well, one earnings name amongst quite a few this morning that is slumping is compass. as the company does reach positive free cash flow for the quarter, but revenues down 26% year over year compass' ceo will join us next

. banks holding commercial real estate loans facing a looming threat as delinquencies ride higher, valuations fall diana is here with new numbers. >> hey, carl. >> office is a major component of stress right now, but it's not all of it and i want to show new data delinquencies and commercial

mortgage backed securities are rising when you take out office, hitting 4.16% in july. when you put office back in, the rate is 4.14% which is the highest since the end of 2021. a big chunk is defaults on hotels in san francisco but four out of five saw default increases only industrial continues to do well office where delinquencies have more than doubled since the start of 2022 and hit 4.96% and many loans haven't come due yet, which is often when they go delinquent because their values are plummets properties have shown signs of distressed, missed a loan payment, missed a maturity date, values on new property down 52% and older properties down 60% according to trep who told me the cre dispress will leave marks on some banks. >> that was part of the moody's downgrade this morning

thank you. diana olick. sticking with real estate, compass reaching their goal of positive cash flow in the second quarter despite major drop in sales. revenue falling 26% from a year ago. compass co-founder and ceo robert reffkin joins us now. not that impressed, down 14% it's had a nice run up this year what was your main message >> i can't control the stock market but i can control our expenses in the second quarter we grew market share and ebitda and proven in the worst of markets we can be free cash flow positive, generating over $50 million in free cash flow. we turned promises into results and said we would bring on x to 950, and now we're saying that we're going to bring opx to $900 million in 2024 and 2025 and when the market recovers our expenses and results will be significant free cash flow to inventories. >> -- investigators. >> where are the cuts coming

from >> vendor management a lot of vendors we have we don't need, more offshoring and outsourcing roles in the past. >> the revenue declines, is that sales volumes falling? is it prices what explains that >> both transactions and price, but more transactions. transactions are down approximately 20% year over year and the other delta is price that's the weighted average price of a listing, although price in the country has gone up every month this year. for the compass portfolio we tend to be weighted towards high end markets like california that haven't been doing as well. >> we talk about people with these velvet handcuffs with low fixed mortgages, but there has been survey work that suggests they're interested in maybe listing one day. what do you think cracks that? unemployment where they have no choice or something else >> buyers have accepted 7% as the new normal but sellers

haven't. 30% locking in 3% or below, 70% locked in at 4% or below, they consider that a financial asset and don't want to lose it. the delta between 4 and 7 is too much for too many people the current view once it gets around 5, 5.5, we'll see a significant 5.5% we'll see a significant unlock of inventory. >> when you talk about the market going sideways for some period of time, which is not exciting investors, is it just rates that is going to change the dynamic? >> rates are the key issue that will change the dynamic. i believe once mortgage rates get below 5.5% in a sustainable way, that's when the market will really recover. >> we're pushing 8% now. going the wrong way. >> you could be waiting a long time. >> we could be i think that's what the market is realizing next year it could look a lot like this year. >> which markets are hot and which ones are getting particularly hit, especially after all the weird covid dynamics >> i would say the hottest markets are still the warm

weather, low tax states. carolina, texas, florida but new developments continues to be the hottest of the hot people want things move-in ready. they want to pack their bags and go from new york, texas, florida. >> can financing get what they need to put up the apartments, for example? >> it's a great time to be a developer or home builder and rates are increasing there's not enough invinner to in the market so buyers need to pay the right price to get the seller to list so, we saw two months ago the home builder sentiment turned positive they had the largest number of housing starts since 2016. >> although the journal has a piece out today about mortgage real estate trusts turning off the spigot in terms of new loans. is that worrisome? >> it is but developers are also giving buy downs to home buyers,

in some cases two points from existing mortgage rates. >> it's such an odd phenomenon, the mortgage rates have gone up and they're still locked into these rates. >> there's a view they are prisoners to their homes people moved in covid and they thought they wanted to live in a certain market the world came back and they want to come back to new york but they're locked into their homes. you see that a lot in the market if they have the funds to move, they'll buy their new home instead of selling their existing home, they rent it out and take the financial arbitrage between high rent and low mortgage rates. >> can you explain new york to me all these people left and rent has never been higher. >> rents in the country have eased but in new york it's at record highs i think new york city is a disneyland for people that have the funds to spend. >> one explanation i read the other day it was the exit and return that gave landlords the

keys on that huge bull whip effect, does that make sense >> it makes sense. also, new york has been a leader in return to office relative to some other markets that's also driving activity >> and it's new york >> and it's new york >> robert, thank you robert reffkin. coming up on the next hour of "squawk on the street," pilray and anheuser-busch as they sign a deal to sell eight beer and beverage companies to a cannabis company we're back in two minutes. you're concerned that it's going to cost you money. to this day i only paid what i had to pay for the device... when i go back everything is covered. there's so much you're missing by not having hearing aids. we'll find you a hearing aid that fits your lifestyle and budget at one of our over fifteen hundred locations. call miracle ear at 1-800-miracle

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new data on women in the boardroom to report. women account for a third of s&p 500 directors according to the diversity report based on proxy reports from nearly 500 companies. nearly half of the director appointments in 2022 were women. so, high on the appointments flat from last year but a 92% increase from a decade ago progress, guys i look forward to the day where we don't have to report this i would also note that there's an important story in "the wall street journal" today about the increasing number of losses and

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good tuesday morning i'm sara eisen with carl quintanilla from post 9 of the new york stock exchange. neuberger berman's holly craft is with us. zaletis with strong revenue and cuts the outlook. anheuser-busch selling off some craft beer brands the buyer?