>> nvidia is down about 1.5% we're seeing the pressure of the, you know, the 4.1% ten-year yield really on the higher multiple areas of the market that's what we should be watching today >> melissa, thank you for hanging out. >> pleasure. >> she smiles. that's great such sincerity join us next week. "squawk on the street" begins right now. have a great weekend ♪ good friday morning, welcome to "squawk on the street," i'm carl quintanilla with sara eisen, mike santoli at post nine of the new york stock exchange jim and david have the morning off. premarkets not thrilled with that macro data today. uk gdp runs hot. our own july producer prices run warm highest annual headline since may. bonds under pressure yet again our road map begins with a slightly hotter than expected july ppi also ahead, the tech stocks are in the midst of its worst stretch since december will the pullback be short lived? president biden speaking out

about china's economic challenges, calling the country a "ticking time bomb." let's begin with the markets on this final trading day of the week as investors digest today's ppi number interesting, sara. i mean, 0.1 is not that dramatic we had a negative revision, but coming off the stellar reception to cpi yesterday, maybe it looks a little bit worse >> yeah, after a zero percent in june, you don't want to see it tick up to 0.3% in july, which is what we got, and we know producer prices are wholesale prices that feed in, so maybe a little de-emphasized because we already got the cpi read but you just don't want to -- traders, investors are on guard for inflation to hook back up. right? like, we hope -- people are hoping that the inflation data, which has shown moderated inflation, been celebrated as good news, will take us down to the 2% target and the fed's work is done, but there's a chance that, look, it could be sticky we still see a really tight labor market where wages are

rising we see oil prices rising to year-to-date highs that's going to matter to the headline number, and we see signs, including in this number, mike, of the ppi, where services are still problematic. i mean, services inflation jumped 0.5% month over month in this ppi data. that's a 2.5% year over year increase driven by trade and transportation and warehousing, so the disinflation, the good news, is all in good, which it has been, and services are still remaining a little sticky, and that's making it a big debate about whether the fed is actually done or how long they'll have to keep rates this high >> exactly this is one of those instances where when the markets react to ppi, which in most circumstances is a secondary indicator, it shows you where the sensitivity is it shows you the market has a raw nerve in this regard, and the stock market's outsourcing its response to the bond market right now. >> and treasurys hold off. >> all those things you mention have built in toward -- into further upside momentum in yields, the ten-year at 4.14% or

so the chart has been kind of stubborn, it's hanging around these highs. by the way, i don't think the levels are any particularly, you know, have any magic to them if you went back to last year, we would be having the same conversation we're having right now about 4% ten-years about 3% ten-years. every time it shot above 3%, the market panicked. it happened in maybe, happened twice over the summer. it's not necessarily the level it's the surrounding context of it is it going to restrain growth from here? does it reflect the fact that the fed is going to be still higher and stay there for longer all those things building in by the way, in the context, and to your point also, sara, we took a ton of credit into july for the soft landing is in hand, right? people migrated to that, that view, that it was happening, and it just sort of took more evidence of things getting better and better to improve stock prices from there. so, that's why i feel like when you're in this in-between zone, the market could not hold a rally yesterday on the good cpi

number the market has not been able to really feed off of better than expected second quarter earnings that tells you, fully valued, people fully exposed for now, we're chopping around to the downside, the huge megacaps correcting, all this stuff feeds in >> today, b of a, hartnett tries to take a crack at why things have stalled out here. cost of capital ain't falling without a hard recession still in their view. that's why -- i mean, looking at treasury inflows, set for a new record, and yet yields can't fall does the fed need to volkerize in wyoming this month? >> i don't know about that i know treasury supply has been the main focus, so therefore, sure, we're soaking up that supply with some indigestion, i think. >> yesterday, there was a pretty weak 30-year bond off which i don't know how responsible that was for losing the rally, but it was notable. >> it was part of it, yeah >> it was a -- the smallest take-up, i think, from directs

and indirect bidders since 2022. 87.5%. that wasn't good news. >> right >> since we're on guard for the auctions >> exactly all week, it's been -- it's been something that's been on everybody's screen and you had two good ones leading into yesterday, and it gave the market some relief, which, again, maybe we're overfocusing on what we have in front of us in august, in terms of treasury supply and every move in the yields, but the bond volatility has returned you're seeing a lot of chop on intraday and all-day day basis and that's usually when the market -- stock market has a hard time getting comfortable. we could throw all this into the middle of the table and say, that's what's going on, but also, you just look at the chart, and you say, we were up 20% through july we're backing off toward the 50-day moving average in the s&p. maybe we have more to go from there. last august, when powell gave that warning at jackson hole, we peaked at 4,325. that seems to be the level underneath the market right now

wr where you would say, okay, that's fine. >> jackson hole is the week after next, and then we will get a jobs report for august and a cpi report for august before the next fed meeting in september, which if you look at the odds now in the fed fund futures, market doesn't really expect a hike it's like 10% chance the question now becomes around november and december, and if they pause in september or if they end in september. and that -- that's really where the conversation is going. you mentioned the british gdp numbers. i don't think that's helping the narrative. >> not at all. >> when you get 0.2% quarterly growth, 0.5% for the month of june, totally defying expectations by double, which, of course, the takeaway for the market and for investors is, bank of england can keep hiking rates because they're still not close to target on inflation >> new thinking may be on bank of england, next week is japan gdp and cpi. mike, your point has been that yields are a global story and if we're looking at hot activity

x-china, what does that mean i would mention goldman yesterday saying, fed's done for the year they took off november in the wake of cpi. >> i feel like the debate on the fed is, you know, when might the last one happen if we're getting another one? i mean, at least as far as what we can work with right now, is it november 1st? is it december that kind of thing which i think is completely digestible for the market, but yes, bank of japan seemed to release longer term global yields to the upside when, you know, late july, and that's been, i think, what mostly we've been contending with you know, again, it's not been across the board weakness in stocks there has been some rotation energy's been a strong area of the market, because crude and natural gas have cooperated pretty well. whether that's good or bad, on a net basis, is worth debating, but again, i keep going back to s&p's 3% off the highs, and apple, microsoft, and nvidia are all down 10% from their highs. >> people are writing a lot, and

i don't know, mike, if you want to attempt to explain this, but the fact that the s&p index gamma left negative for the first time in 2023 we watched these levels. they become a big part of the market story >> certainly in the absence of -- essentially, this is the sort of mechanics of when a lot of systematic trading firms, like, what their effect is on index prices in relation to how the market makers are hedging. so, i don't want -- you don't want to get into all of it, but all you do have to know is there's now a downside bias based on the levels we're at over the course of an intraday level and also those cpas and other systematic funds, they just got very, very extended in terms of their exposure to the market they are momentum players. they're trend followers. the trend was super strong into july now, we're just unwinding some >> could explain some of the twists and turns, which have been more dramatic this week let's hit the turbulence you mentioned in tech stocks, the nasdaq 100 dropping below its

50-day moving average for the first time since march dan ives says the fundamentals are strong we got through earnings season and it looks better and if the fed is done raising rates, these stocks should be a buy and they should rally again who say you? >> yeah, i mean, look, there's no doubt that the fundamentals have come through more or less as you would have hoped. i think that the information from the reaction was that the market figured that out beforehand so, microsoft got a really good quarter. microsoft also had a lot of a.i. excitement energy running through that valuation and microsoft has traded sloppily off its quarter, even though there was nothing plea barticul about the quarter itself that got a negative i think we've been testing sort of how expensive are the big best companies in the world going to be able to stay they didn't get all the way back to their high valuations of late 2021, which is like the nasdaq 100 at 30 times forward earnings, but it got above 25 again and 27 to 8 and i think

that's really what it is it's just that adjustment. >> i'll say something that mike won't, which is the ten-year yield is above 4% and that is a headwind for tech. i know you don't think so. it's got to be >> people have the same conversation about the a.i. deal or the a.i. narrative when oil is $70 versus $80, right there's more competition >> there is. and i would never say that rates don't matter my only point is that the nasdaq was at this same level when rates were 1.5%. >> the nasdaq -- right >> in 2021, right? or 2020. my point is that, yeah, they matter, because if they're moving fast, you have to adjust what you're willing to, you know, pay for risky assets, but it's just not some kind of perfect equation that you just plug it in and you know -- >> just the forward multiple, though >> no, of course, but we were at 4.25% in october what's the nasdaq done since then it's ripped. >> a.i >> one of my favorite calls this morning -- it's not a call, but a note from wolf, long intel

versus short nvidia. consider me intrigued. it has been a one-wriay street o years. i'm not saying this is the start of a secular move but you could see that ratio making its way higher as some of these great ideas are starting to flatten out. >> that's reflective of the kind of trade -- it's not just go for the laggards or go for value it's kind of cash flow in hand, a kind of corporate specific story in intel where there's kind of a restructuring as opposed to just keep paying more and more for the imagined future that nvidia's going to deliver us you could go sector by sector and play that game, and maybe people are going to started to do that. intel, certainly we're talking about market cap, there's no comparison at this point. nvidia compared to anything in the market basically looks like it's right for mean reversion. >> the other factor here, and it relates to the yield discussion and the tech discussion and the overall discussion is the dollar is marching higher it's up about 0.7% this week

for the month, it's up almost 1% dollar rising and yields rising aren't supposed to be happening as the fed is ending its rate hikes. >> that's right. >> those are both headwinds for the equity market. thais headwinds for the tech stocks that do business overseas people value their earnings on a long-term basis. >> yeah. >> so, headwinds emerging. also oil prices rising which is also not supposed to be happening if you're ending this sort of inflation period >> yeah, i mean, everything, it seems like, the story lines get scrambled here because the market didn't really behave the way they were supposed to before the fed started hiking you got this 20%, 25% setback last year. in retrospect, it looks like one of these nonrecession bear markets, which afterwards you typically, by history, have gotten a 30% gain. well, we got the 30% gain in, like, ten months normally, it comes over the next year my point is, you kind of run out of the bear market priced in the

recession story after a while, because we've gone long enough since then to where you have to talk about what happens next >> yeah. interesting take on why the consumer arguably is going to remain resilient today, out of b of a we were talking about the note, savings rate is higher than it was in '08 85% of mortgages, fixed. you've got leverage on the labor front, obviously, with weak immigration and low participation. and you got real wages inflecting positive. how is the consumer vulnerable with all those things going on >> exactly there was a lot of attention on the trillion dollar aggregate credit card balances for the first time this year first of all, credit grows with the economy. if the economy's at a record high, credit has to be at a record high unless there's something really wrong on the other hand, the cost to service to debt, the household obligations debt is really low in relation to history it was not evenly distributed. some people are absolutely strapped >> but household debt to gdp is

at a ten-year low. >> exactly but the point is that it doesn't mean you can buy anything you want, because auto loans are getting stiffer, and all the rest of it, but it means in aggregate, in terms of how it affects the macro, it's not challenging. >> we'll talk retail sales because it's out next week on tuesday, but there's just -- the only other thing i just want to bring up quickly as a risk and that people are starting to talk about this week is the shutdown risk and michael of morgan stanley said there's a real risk and we should be watching it it should shave half a point off gdp for every quarter it lasts >> she's talking gonvernment shutdown >> september 30th, end of the fiscal deadline. they're far apart, the senate and the house, still, on spending got to watch it. >> fitch would be, like, told you. coming up after the break, the read on retail as sara said. some of the major earnings next week, including walmart, target, tjx, depot, ross stores and more we'll talk about some of the thinking about the consumer going into that.

got some media news as the writers and the studios meet again today. got some updates on musk-zuck when we come back. 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... check. ...to make quick decisions? check. aaaand check. that's the solution ibm and a global bank created. what will you create? ibm. let's create. with powerful, easy-to-use tools, power e*trade makes complex trading easier. react to fast-moving markets with dynamic charting and a futures ladder that lets you place, flatten, or reverse orders so you won't miss an opportunity. e*trade from morgan stanley.

we want to reposition ralph lauren back to its luxury roots. ralph was telling me a few months ago, when he launched his first tie, he launched it as a very premium proposition, two and a half times the price of the christian dior tie

our roots are luxury our focus now is to reposition the company to be closer to the european luxury players. >> the ceo of ralph lauren on "mad money." we know cramer's been constructive on that name, even with questions about the resilience in china and china demand >> they were pretty bullish on china yesterday, talked to patrice louvet off the earnings. china grew sequentially better than it did the quarter before they're taking share in china, and whether that says anything about the macroenvironment, they're spending on luxury goods. the question on ralph lauren, and they reiterated the outlook, was the north american business. i'm always trying to figure out what's the macro tell? he actually said that bull price in north america and the u.s. did very well, that it was really on value -- there's pressure on value, he said, in the outlets, for instance, where units are down meaningfully.

outlets and digital hurt the overall sales number china continues to do well so, take that as a sign of what you're seeing in the consumer, and i think it's interesting that he told jim that the luxury european brands are the -- they're clearly winning right now, and they're doing something right, and after yesterday's acquisition, from tapestry to buy capri, everyone's trying to play this game, clearly. >> yeah. play the game or their version of the game, right you can argue about whether the brands themselves hold up in comparison to the big european luxury brands or if the companies want them to because they do have more mass market distribution, and part of the logic of the merger is probably to rationalize the brands, have different tiers, and also be able to have a little more leverage maybe on the, you know, the third party department store channel. >> 100%. we talked to joann exclusive yesterday on the deal, got a lot of her thoughts on the strategic merits of why they were combining these six brands,

including, and she did mention, the luxury piece of this, because they're getting versace and jimmy choo listen to what she said. >> they're complimentary we're gaining access to parts of the market where we haven't had access, the higher-end luxury parts of the markets, so we're broadening our access there, and as i said, the brands are quite complimentary. they're distinctive in the market with distinctive customer segments so we're confident this is a great deal not only for tapestry, for our shareholders, but all of our stakeholders. >> combination of the brand -- the two biggest are coach, which is what tapestry has, and kors, and they came out with earnings yesterday and that kors brand does continue to struggle, but it will be combined with brands like kate spade and versace and jimmy choo i don't know what it says about where we are in the cycle or the economy. i tried to ask her she said, look, we're thinking long-term here

these brands have been doing better, coming out of covid, as people have been traveling they're holding on to pull-price merchandise, but the question is what we're heading into. >> it did seem a little opportunistic. obviously, capri stock had been pretty depressed they paid a big premium but not relative to where the stock has traded at the highs the last couple years so it's one of those deals that on paper makes so much sense because both of them are just these umbrella companies for several brands, and the more the better and all the rest of it little financial leverage and maybe there's a willingness to take that on at this point in the cycle because the opportunity was good enough. >> meantime, walmart reports next thursday. yet another positive call going into next week it's a credit suisse today reiterates outperform. the day before was deutsche. the general takes are, grocery share gains, inventory's pretty clean, easy comp on margins, and stock's obviously been doing

record highs >> and with pressure on the value-oriented consumer. consumers trade down, and they go to walmart, something walmart's talked about on recent calls. even with a strong stock price, still getting a lot of love from analysts i'll be also be watching home depot next week and target because they haven't been faring as well as target. home depot, we know the problems when it comes to working on your home >> you see the black & decker downgrade today. >> walmart's getting full credit for the defensiveness. i mean, the forward valuation's as high as it's been in 20 years except for the heart of the pandemic dividend yields at a 20-year low. people feel like it's very predictable, reliable story right now. still to come, we're going to talk about the auto stocks and what ahas been a rough start to the month we'll talk about those negotiations with the uaw workers as well. taking a look at futures as we head into the opening bell, some pressure after a mini-rebound w tuerday. dofures down 69. more "squawk on the street" when

we come back and deliver solutions that meet complex needs. massmutual. partnering with financial professionals, benefits brokers, and institutions. (fan #1) there ya go! that's what i'm talkin' about! partnering with financial professionals, (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? myplan from verizon. switch now and they'll give you nfl sunday ticket from youtubetv, on them. (hero fan) this plan is amazing! (josh allen) another amazing plan, backing away from here very slowly.

(fan #1) that was josh allen. (fan #2) mmhm. (vo) for a limited time get nfl sunday ticket from youtubetv on us. a $449 value. plus, get a free samsung galaxy z flip5. only on verizon. the citi custom cash℠ card automatically adjusts to earn you more cash back in your top eligible spend category. hi. ♪♪ you don't have to keep tabs on rotating categories... this is the only rotating i care about. ... or activate anything to earn. your cash back automatically adjusts for you. can i get a cucumber water? earn 5% cash back that automatically adjusts to your top eligible spend category, up to $500 spent each billing cycle with the citi custom cash℠ card. i love it... [voice vibrating]

take a look at s&p leaders this morning for the week. b of a today notes that inflows into health care names, highest since april. lilly leads that list, 16% gain for the week you'll see amgen further down. opening bell is coming up in four and a half minutes. don't go away.

you got this. let's go. gobble gobble. i've seen bigger legs on a turkey! rude. who are you?

i'm an investor in a fund that helps advance innovative sports tech like this smart fitness mirror. i'm also mr. leg day...1989! anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. i go through a lot of pants. before investing carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com. ah, these bills are crazy. she has no idea she's sitting on a goldmine. well she doesn't know that if she owns a life insurance policy of $100,000 or more she can sell all or part of it to coventry for cash. even a term policy. even a term policy? even a term policy! find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com.

the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. top s&p sector for the week is going to be energy as wti aims for its seventh positive week in a row. lot of attention, mike, being paid this morning to wholesale gasoline probably going to see $4 at gas stations in the coming days. 52-week high, even though u.s. is on pace to produce more oil this year than any country in the history of the world

>> yeah, it seems like -- i mean, globally, there's been a little bit of a firming up in the supply-demand picture. i mean, natural gas has been screaming higher part of that's an australian strike, but really, it's also weather. so, a lot of things working in this direction sort of with crude oil, on the verge of breaking above what were the highs before the ukraine invasion in the mid-'80s or thereabouts and the stocks have done well. the stocks really did not give back that much of last year's gains. oil prices stayed at a comfortable level. and they're now, you know, kind of reasserting themselves a little bit the xles outperformed the semiconductors index on a two-year basis, for example, so seems like an area of the market that people are willing to rotate into. the issue is, it's 4.5% of the s&p, and internet is like 35%. so, you know, it's not exactly like you can carry the whole weight >> if you want to know why people are bullish on oil

prices, read the update from the international energy agency today, the iea, which talks about opec supply cuts happening at a time where macroeconomic sentiment is improving >> yeah. and you know, time is always out there. even though it hasn't come through yesterday, francisco of b of a said the price of russian crude has been on the rise it's filtering through the whole line >> right and we'll start talking about europe's winter yet again. >> yeah, exactly >> if things don't change. there's the opening bell some negative red this morning at the big board is delmonaco's restaurant, celebrating its brand reopening in the financial district at the nasdaq, jet.ai, a private aviation and a.i. company celebrating its listing via spac mike, you mentioned yesterday the number of times we had crossed the 4,500 mark >> it was six straight days. it's going to take more than a 1% gain from here to get us

there. you know, i don't know that 45 necessarily was some really significant level but it did sort of serve as the spot where we were struggling it's in the 4,430s is where the 50-day average is. all these things are coming into sight as to whether we get -- it's still in routine pullback zone, and i would say anything like 5% from the highs would be no big deal, but it's -- it still would mean some chops to the downside seasonal is not that favorable inability to really benefit from what should perhaps have been good news on inflation and earnings was a tell. >> well, we're now firmly negative for the week for the s&p 500, down a little bit more than 0.5% and you can see the divergence the nasdaq down 2% this week the dow is still positive this week just a little bit but it shows you where the brunt of the pain has been it's been on technology and this morning, the only sectors that are higher are energy and utilities. tech is at the bottom of the market again, on some of these macro

worries and the fact that maybe it was right for a pullback. >> you had so much air under that part of the market, and you know, i just feel like these pullbacks happen in these waves. the first people to back off are those who are pure momentum players who are only in there still because the stocks won't go down. once they break, those folks get out of there, and then you have a rethink of why'd we get here in the first place what does the valuation look like do they seem overowned or underowned and i think after earnings, there was a sense out there that people had loaded up on these names enough that they, you know -- >> i think also, you know, carl, the combination today and the lack of other major news of a hotter than expected ppi wholesale inflation number a better than expected gdp number out of uk, the fact that cpi was good yesterday but was widely telegraphed, it raises some questions for a market that, as we mentioned, is on edge for any signs that inflation is popping back up. and that the trends toward

disinflation might have a few more bumps, might prove a little stickier than normal, which would have implications for fed policy i'm watching the treasury market today because yields are higher, and treasurys are selling off. the dollar is stronger again, those are indications that there's a risk. >> well, there's no doubt, and of course, it happens at a time when you also still have that undercurrent of worry that it's late cycle, and things are decelerating, and yeah, the job market looks healthy, but you know, over the course of six months, it can certainly trend lower from here, and where are we going to get the workers? i don't think it's a one-sided worry. we always knew that, you know, things have to go well on two fronts to get a soft landing on inflation and on growth, and you know, we'll get a bump between those scenarios for a while, looks like >> you mentioned areas of tech that are coming under pressure today. semis are going to definitely stand out as the fmh -- i almost called you jim -- mike, it's back to june levels and it's amd, nxt, by the way, earnings

next week, corvo, nvidia kind of interesting these comments that the president made according to pool reports yesterday about china, calling them bad folks, calling their economy a ticking time bomb, not to mention the country garden concerns, but the worry that with these investment restrictions this week that is china poised to retaliate? >> yeah, and i think it was one of those set of remarks that seemed like it was straying from the very careful, orchestrated, yes, we're going to take these measures but we're going to communicate it openly and transparently. we don't want to exacerbate the situation. but i think the semiconductors, aside from the a.i. stuff that got them really, you know, running, there was a sense out there that the market got a little hasty in terms of pricing in a decisive turn in the cycle and there's still just a lot of upside to work off it doesn't seem like, to me, we're out of that realm of, this

is just a needed correction in overheated group >> on the ticking time bomb comments, obviously, wall street's paying attention because that's an educscalationn rhetoric from the president. he was speaking at a fund-raising event, so that's important to remember. he made a lot of inaccurate statements about the chinese data he said they were growing 8% and now they're growing 2% the last gdp showed they're growing more than 6% if you believe their data he said there are more people in retirement than working age, which is not quite true, and off by a hundred million people. the bottom line is, this market is also watching this risk i think the read on the executive order yesterday, mike, was that it was a little tamer than it could have been and tamer than the really harsh order they put on semiconductors and what they announced last year from the commerce department when it comes to restricting any sort of advanced semiconductors for military activity, but clearly something

we got to keep an eye on especially because things were looking better it was thawing treasury secretariy yellen had made a trip there. raimondo is set to make a trip there. it's always a little tenuous >> didn't china reopen for group tourism? >> yeah. 70 countries now get to group travel, including japan and areas of europe. which is hopefully going to help the travel names, although carnival is definitely a standout on the weak spot today. there's some data of hotel occupancy down one year on year, which is going to be interesting. disney had made some constructive comments about its parks and cruise business, although disney now has given back roughly half of the earnings bounce, mike. >> yeah, for sure. i mean, it was definitely a little bit of a move on faith. we're bumping around these areas, still above the lows from a couple days ago, so it seems like folks are starting to give a little more credit that they might have a path out of a lot of the business model issues i was going to take to look,

too, in terms of yesterday's action and follow through is gm and ford have firmed up a little bit. gm still to the downside pretty conspicuous yesterday the way they sold off very hard with a lot of the concern flaring up about the uaw and wage growth and also whether that's something that feeds into the general anxiety about stickiness and inflation avefter the teamsters deal and all the rest. >> what, $170,000 wage for u.p.s. drivers i think it's a big round number that people are focusing on for some >> and the $130,000 price for the gm escalade ev >> i saw that. i thought it looked a little cybertruck-y one of the movers that we're watching, news corp., is at the top of the s&p 500 today which is interesting because the company actually swung to a loss there was some good news there, profitability, for instance, at the dow jones unit, "wall street journal" and barons was high, but they did talk about weakness

in consumer demand in books. remember, they own publishing. in housing here's what the cfo said about the environment. >> consumer demand slowed in the fourth quarter more than we initially expected, leading to lower sales and higher returns, particularly in christian publishing and general books most of the weakness was in north america. >> stock was initially flat on the news mike, it's up today, 2% in a down market. >> yeah. certainly a better than feared type of message. it's a very sort of low expectation stock, benefitting from that a little bit there were also some comments from the ceo about a.i. and the company and other media companies as being beneficiaries, potentially, because they own a lot of the proprietary content on which a.i. models are being trained, so you had some bright things to say about maybe getting paid for some of that monetizing, not necessarily using a.i. to create its own products but just getting into the whole ecosystem. >> he said, ingestion should not lead to indigestion.

in other words, they're getting ingested for a.i., but i don't know that they're getting paid >> i don't think they're necessarily getting paid right now, but there is a big move among those people who own copyrighted materials and everything to make sure that there is some kind of payment out there. we need like a getty images or some clearinghouse to get paid for stuff that's online. >> cue the lawsuit >> i will say, having worked at dow jones for a long time, the culture there is, we get paid for our stuff. "the wall street journal" is the first news website, really, to demand a subscription. that was a big move, too, back in the day >> springs to mind, media in general and the fact that the writers guild is going to meet once again with the amptp today where we expect the streamers and the studios torespond to some of their recent proposals of course, covers almost 12,000 writers. at the same time, for example, names like netflix today, jpmorgan's doug anmouth says the

paid sharing revenue hopes are coming in a little bit slower than expected but they do expect it to be quite accretive over time >> it can only be at least a modest tailwind, as opposed to anything else, so stocks all reacted pretty well to disney's quarter and the pricing power they're going to try to exert across streaming it seems to me like the strike is going to create this whole occasion for an industry that overinvested in production, like, you know, energy in 2015 or something they fracked too much. it seemed like a winning strategy, and then the market said, sorry, no. the economics don't work for us here under current conditions. and now, you have to find, what's the right level of production what's the right level of investment what are we going to get paid for? can we pay attention to profitability? seems like that's where the industry is heading toward right now. it's not going to be to the net benefit, necessarily, of creators, but they have to strike some kind of deal to get things going again >> only took, what, tens of

billions of dollars in lawsuits and tons of writedowns and impairments before they turned tail >> right and a lot of people complaining that there's too much to watch and you can't keep up with it. how much are you losing if you are a little more curated in what you put out there i think that's the experiment they're going to run >> for those of you wondering about the musk-zuck fight, there's an update because elon musk tweeted anot 7:30 this morning, eastern time. looks like they're making plans. the fight, he says, will be managed by me and zuck's foundation, not u if, c. i spoke to the prime minister of italy and the minister of culture. they have agreed on a location small font but you know, i talked to linda yaccarino, the ceo of x, about this, whether it was really happening, and she said elon -- listen >> i think it is a separate

excitement from the business you know, i represent all business operations. i don't think i will be on the undercard for the cage match so, i think we have to really stay focused on the seriousness of the potential of x and not conflate it with things that may be a humorous back-and-forth between zuck and musk, and we'll see if that cage match really does happen. >> she then went on to say that he is actually training and that was in response to a question i asked about whether it was good for the business to have this fight. >> i think -- >> keeping it focused on the business >> people are asking that for both companies, really >> right her update was a good one on the business she said they were close to break even, which i think shocked a lot of people who have been following the woes of x and the advertising. said she's been winning back customers and named some names >> everyone can define what

close to break even is relative to what they were losing before, but if things are looking like there's at least some return of ad revenue, it's interesting i mean, i don't know seems like the fight thing works for everybody as long as it's this live possibility out there. they seem to want to promote the idea that there's something happening. i like the, nothing modern at all, except we're going to stream it on two different social platforms >> they're going to wear sandals. >> ancient rome and broadband is all you're going to need certainly not helping tesla shares today down almost 3% that's going to take you back to the early june, i guess, on more of the car concerns that we talked about, and obviously, tesla's widely concerned the rabbit that everybody's trying to chase speaking of which, morgan stanley's adam jonas today reiterates his underweight on carvana, but ups his target a couple bucks to $37. says company deserves a lot of credit for making this much progress, but that the risk-reward definitely has

downside interesting, some of those names, mike, twilio is another example today, gets an upgrade over at argus as they go to buy on some of the notion that maybe the enterprise is poised to make a stand. also, cisco with its positive catalyst >> twilio, certainly one of those companies in the category of, we think that things have stabilized, at least, in terms of overall enterprising, but also this mantra of, we're focused on profitability, we have to keep our costs right, so all these companies that were kind of growth at any price two years ago are now in, let's see what the real size of our business is, and they're trying to promise something to the street in terms of profitability if nothing else. >> consumer discretionary is down, but it's so interesting to see the home builders. they're up today, again, in the face of rising yields. that relationship really is broken remember, these used to be tied at the hip home builders would sell off as yields rise because higher mortgage rates and activity. not in this low supply environment for housing, which

keeps pricing strong and which -- and the fact that we have seen confidence really come back for the home builders go back to the cpi report yesterday and look at the owners equivalent rent number, which is so elevated and a big problem for the core services. >> i did push out this folks' thesis that vacancy rates are rising zillow asked rent is declining usually a 12-month lag there, and apartment supply is booming. >> it is lot going online >> that's the best thing the doves have going on right now, at least hope--wise. >> i think that's where a will the of the confidence is, that you will see further declines in core inflation because of the way the mathematics of it work to the point about -- yeah, you do, absolutely but to the point about home builders, it's almost in this backward way, higher rates means the builders of new homes get to buy down the rate, and they can mitigate that effect on buyers, whereas existing homes are just nothing for people to feed off

>> my question for you, now, mike, is whether or not the bulls can defend s&p 50-day nine points >> yeah, i think it makes sense to have, if nothing else, a touch. i don't think the 50 is the one that's, like, kind of the make or break, is this just a pullback or not, but there will be an attempt on a summer friday to see if that matters at this point, because you're not going to get any further real fundamental stimuli before the close that's going to determine anything more than risk appetite and what yields do, because that has been the intraday mover and we're at 4.13% on ten, 4.90% on two. >> going back to early august levels at this point >> yeah. >> we'll watch that. speaking of which, bonds, just told you what some of the yields are doing in this environment. data for the morning is done but not completely as we're still awaiting umich we'll get a look at expectations in about 14 minutes. don't go away.

>> announcer: the bond report is brought to you by pimco. she didn't know they were talking to her. i just could not hear. i was hesitant to get the hearing aids because of my short hair. but nobody even sees them. our nearly invisible hearing aids are just one reason we've been the brand leader for over 75 years. when i finally could hear for the first time, i started crying. i could hear everything. call 1-800-miracle and schedule your free hearing evaluation today.

it's been a tough stretch for the tech sector, the group down 8% from its highs, down 6.5% this month. check out the biggest laggards on the nasdaq 100 for the week see data dog down 16%. trade desk, micron, marvell technology and pdd holdings. we'll be we'll be hitting all the market volatility tonight don't miss our special "taking stock" with me and josh brown. later toght 00ni6: p.m. eastern. we'll be right back. stay with us

two years after evergrand's debt troubles worries about chinese real estate and that sector are coming to the forefront again. eunice yoon is live from beijing again and another troubled company we're hatching here. >> absolutely, sara. shares of country garden plummeted to the equivalent of 12 u.s. cents in hong kong, and this is as investors are starting to fear that we could be seeing another major debt crisis in the already very troubled chinese real estate market country garden is not a household name around the world, but it certainly is here in china. it's one of the largest privately run property

developers in the country, and, of course, the property sector has been suffering sales, falls, as well as declines in prices and that is exactly what company cited as the reasons for its current woes the company missed two coupon payments earlier this week, although there is a 30-day grace period moody's downgraded this rating because of what they cited as heightened liquidity and refinancing risks. morningstar has warned there could be more trouble to come. they estimate that 137 million bond interest payments are still going to come due in 2023. now there is some market expectation that the family that runs the company could put in their own personal wealth, but morningstar has said that might not be enough. the company itself on thursday warned the stock exchange in hong kong that it could be reporting very soon, just later

this month, that it had a total loss of $7.6 billion in the first six months of the year this is versus actually making a profit in the year ago period. local media have been reporting that the debt restructuring could be in the works and the company itself hasn't commented on that report, however, it has said that it's making an all-out effort to ensure a self-rescue it says it's considering various debt management measures guys >> there's reports beijing is trying to tackle the debt by the government in a top down approach how much support is the government doing it feels piecemeal but maybe you can sum it up for us >> there's a lot of announcement from the top that more needs to be done. in fact, the securities

regulator had held a meeting inviting several different real estate developers asking for what they think needs to happen to resolve some of the debt issues, asking for their advice. in terms of what they're doing in terms of actual dollars that hasn't happened. a lot of that is because of the fear that the leadership has about the rising debt problems, not only in the real estate sector, but in other industries as well. >> eunice, any thoughts on how china might respond to at least some of the reported comments by the president about china and the government, the economy, at this fundraiser? >> yeah. it hasn't actually gotten a whole lot of play. he did say, as you have been reporting out, china was a ticking time bomb, but at the same time, he was pointing at a lot of problems, including ones

right -- that we're seeing before our eyes in the real estate sector that you have a country that has an economy where the demand hasn't been great, consumption is slowing down because people are really worried about the future, and then, of course, you have the troubles in the real estate sector and then worries about deflation. it all kind of adds up to a very negative picture, and then externally, you don't have the help with the exports either. >> eunice, we'll talk about it, i'm sure, more over the coming days, including some of these travel restrictions getting lifted that's eunice yoon in beijing tonight. a quick break here as we are still defending the s&p 50-day about 12 points or so below where we are at 4151 back in two.

with your hearing, if you start having a little trouble, 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 and schedule your free, no obligation hearing evaluation today. happy friday good morning and welcome to another hour of "squawk on the street." i'm sara eisen with carl quintanilla and mike santoli today, live from post nine of the new york stock exchange. david has the morning off. take a look at stocks in the early action dow goes positive helped by united health care and walmart, which gives you a feel for what's working today

defensive groups like staples and health care and utilities. s&p is down 0.3% it's weaker on the week. the nasdaq, down 2% this week, is getting hit again microsoft, nvidia, tesla and apple at the bottom of the pack. we're 30 minutes into the trading session. here are some big movers we're watching ubs is in the green, announcing it would no longer need the more than $10 billion in guarantees that were originally provided to smooth over the takeover of credit suisse. shares are up 10% since the acquisition was completed back in june. thrift storesing making a comebk with value village beating estimates, same-store sales up 5% finally auto names on the move as morgan stanley adam jonas reiterates sell rating on carvana saying they stril a lot to prove, even though they've had a good week. last bit of macro data rolling in hey, rick. >> hey, carl

pay attention to the university of michigan sentiment figures. they're preliminary but interest rates moving a little bit lower. the headline number, 71.2 exactly as expected, but it is a little lighter than 71.6 which is our final read last month however, despite that slight drop, it's still basically near the highest levels since october of 2021 with 7 is 1.6 was, and if you look at current conditions, 77.4 that is the best since october of 2021. now here's where it starts to get interesting. that was headline current conditions as you look to the future, the numbers dip. 67.3 in the rearview mirror was 68.3. 67.3 indeed would be the lowest level since june when it was 61.5 it really does represent a bit of a backup. now on inflation, here's actually good news 3.4 last look. 3.5 expected what we arrive at is 3.3%.

to find a lower one-year inflation on this particular set of data points you would have to go back to march of '21 at 3.1 if we look at 5 to 10-year it's handle change finally. we move from the 3%, so we've had a lot of 3.1 and 3.0, to 2.9% to find a lower rate of inflation. we've had a few 2.9s, but to find a low rate of inflation you have to go september of 2022 so you can see yields have moved a bit lower, but we're still a lot stickier and interest rates higher than last week. sara, carl, mike, back to you. >> thank you, mike santoli. digging through the data a lot of good signals there. just to reiterate on rick's point about inflation, potentially why you're seeing the treasure bid on that news, lower inflation expectations is good news. the fed watches those inflation expectations when they creep up it's not. people were watching that

because gas prices are starting to move up, oil prices on the rise food prices firmer lately. the other piece of news today was ppi, wholesale prices, producer prices in the pipeline, and it it was nothing super alarming, but not in the direction that economists were hoping for up 3% on the month after 0% the month before in june there were funky things going on like in the services component, the portfolio management services were up 7.6%, one of the highest read force that series ever. >> that's because stock prices go up and fees attached go up. >> that's why. there were other things like meats were up, so that's why we're watching food. overall, as we've been talking about, it's a market that's on edge, and the federal reserve, too, to try to figure out was july the last of the interest rate hikes are they going to have to do more, go for longer?

is inflation really on a one-way path lower or could it bubble back up again? we're watching the rise in gas prices and that's a debate likely to be reflected not just in the market but the fed as well some will argue we've done enough it's working others will argue, we're still higher than we need to be on core and things could turn a little bit sticky. >> i mean, the market cravings further gratification along this area they want reinforcement of their celebration a month ago that we got this roughly we're on the path for persistent disinflation with the economy okay carl, you asked about the 50-day moving average i've been focused on the action it at the prior cpi release. july 12th was the june cpi release. that's really, to me, when the market burst higher and said soft landing is here, stop fighting it. you have consensus moving in that direction the high for the day before that on july 11th was 4443 in the s&p. the low this morning 4443 we

bounced off. sometimes it's about -- it's always about macro and yield and everything it's also about let me see if somebody wants to sell it there and take us below that point where we started to believe the soft landing and disinflation was here a lot of that stuff you moving around in this direction. >> i was blown away by the quote from larry meyer in the journal talking about the reaction to cpi. my god, that's incredible. there's no question that core inflation has turned the corner faster than the fed anticipated. pretty much annualized course. you have rent coming on board, the hope anyway. but we've gone from 9 to 3 with no degradation in employment. >> it's great if you think it's going to continue to move towards the target core inflation is still 4.7% it's better. it's turned the corner better than the 4.8% it was the month before that's still more than double what the 2% target is. you really could have this

argument on both sides mary daily was out yesterday reacting to the cpi data i don't know if you saw but for her, she said it's not a data point that says victory is ours. there's still more work to do. the fed is fully dmoitsds r resolutely bringing inflation back to its 2% target. someone who has historically been dovish that sounds more hawkish. the question is more work to do higher rates or higher for longer >> or the message you would land on when you realize you're not exerting that much of a price in the labor market right now like the economy is giving you cover to stay vigilant whatever you define that as. >> we have two great experts to talk this three. paul mccauley is an ajunk professor at georgetown university and our own steve liesman. good morning to both of you. paul, what do you think about the data set now we have ppi, cpi, the umich

inflation that were weaker than expected on 5 to 10-year outlook. >> i think the disinflationary process is very intact and durable but we're a long way from where the fed wants to be so i think the bottom line, monetary policy is in a good place, it's restricting, inflation is coming down, but it's too early to declare that they are sufficiently restrictive. they're in a good place, but they also want to be on the side of saying we're going to be late, not early, in declaring victory. i mean, the market thinks they've been restrictive, but we'll get another jobs report and cpi report for august before the september meeting and before that jackson hole. how is it all looking to you as far as communication and policy?

>> i want to make a short short-term comment we may be in the middle of the dumbest bond market sell-off i've seen. you were pointing out this portfolio management service number, which has been the thing that really created the upside surprise on the ppi, so what i did is i just took it out and guess what ppi comes in exactly as expected and then i just ran the correlation. mike santoli brought this up i did a correlation between the year over year change in the s&p and this portfolio management service series it has an 87% r squared, which is what you were talking about, assets under management goes up, the fees people pay. just to be clear, that's not inflation, and the bond market may have other reasons for selling off, but if it's selling off because of this portfolio management thing it's kind of silly. then i think, sara, you made a great point, which is, it seems

like it's offset and maybe equally so from the fed's point of view, by this decline in both the 5 to 10-year inflation outlook in the michigan sentiment numbers and the one-year outlook, what they're trying to do i'm getting this feeling there's engrained disinflationary process in the economy certainly like to hear more data i think daly would change her opinion in a minute if there were one or two more reports like we've had the last couple months. >> but you can always take something out. inflation is flat if you include the lag shelter impact, for instance, of cpi the rent data in this. >> i'm not talking about just taking anything out. i'm taking out something that is, a, not inflation, and b, was up 7.6% month over month i don't want to be cavalier about it, but i think this one probably makes sense to take it out. >> that does make sense, but it is such a transparent factor that in theory it should have been in the system too because

you can just do the math on the s&p. to me, what the little sell-off we've gotten today in bonds might tell us is, even if it is responding to kind of this fleeting factor, it does have information in there about what market is on edge about, and it is this sort of two-sided story about you have some folks at the fed who are starting to talk about the risk of overtightening at this level and we've done enough and we should hold rates here and we already are kind of restrictive in real terms and others who are essentially saying like we wanted more than we got already in terms of rate hikes and we have to get there how do we navigate that debate >> i think you're very right my. we're very much in the end game of the tightening process. the end game is when risk becomes too static and effectively all of the fomc is saying we're in the end game and it's too static risk and then you have essentially a camp that

wants to say, let's think in terms of let's do enough and then the other is saying, wait a minute we probably have done enough so i think it's really characteristic of the end game nature of the monetary tightening process that informs what chair powell will be saying at jackson hole, is that i think he'll say we're in a great place we're in the end game, but we'll point out there's still two-sided risk and it's going to leave out the possibility of more hikes they have it in the plot i don't think they will do it in september, but they want the marketplace to still have fear of another hike. i think that's where we are and i think the market is reflecting that. >> one interesting predicament, steve, might be how the fed reacts to headline inflation going back up. we know gas prices are going to rise and oil prices are now at the highs of the year. and so far they've been focused

on core inflation, which has been above and elevated and it sticky, but if we start to see that gas price move, will they have to respond to it? >> i think daly is laying out for us, sara, the idea of inflation not being in a linear decline. i think that what she's suggesting in her comments is, we don't see inflation coming down in a straight line. we expect there to be bumps along the way. and i think the increase in oil prices is going show up in the august cpi it's something that has to be watched out for. i think it's in line with where the fed is, which is the possibility out there, actually pretty good unanimity, on a second rate hike that will come or go depending upon the data. if it doesn't go away after say an august surge, well then they may do the second hike i don't think they do it in september, but i think they reserve the right and suggested, perhaps, it would come later

this year. it's not a key question as to how fast they get there as far as the fed is concerned at this point in the end game. it's a question of how high they go and how long they stay there. the market is banking on cuts about seven months from now, and that length or duration could get shorter or longer if inflation were to fall or stay higher in the months ahead >> paul, does the economic data, i know we've been focusing on the inflation data, but what if we get -- continue to see strength in the consumer retail sales are out next week we've seen credit card debt rising so that could be a strong signal about spending. bank of america credit card data turned positive for july after being negative in june does that shift your mindset and do you think it will shift the fed's around the inflation outlook and this idea that it may prove sticky or come back up again? >> i don't think so.

i think the fed embraces the notion the economy is decelerating, but it's decelerating to a level that is very soft landing. i don't think they're looking for precipitous weakness in the economy as the signal to say we're sufficiently restricting they're looking for a soft landing, not a recession i don't think that it really influences their thinking at the margin very much at all. i think it reinforces the proposition of high for longer, not necessarily higher for longer, but high for longer. they get to where they want to be, it's sufficient, and they stay there for an appreciable period of time until falling inflation itself lifts real interests. so i think that's the scenario they're dealing with i wouldn't get wrapped around the actual retail sales numbers.

they embrace the economy is a soft landing trajectory. they just don't want to declare that they're done yet. i think jackson hole is going to be a [ inaudible ] but no throwing of the ax. >> cuts first half of 2024 >> that's a distance out no sooner than the spring, but i am not going to wager greatly on that it's when we see real rates going up because inflation is coming down. >> steve, where are the forecasts coalescing around now? >> the forecasts are -- you look at the futures, i'll double check that while i'm answering your question, it had been the march or april contract, sara, that had a greater than 50% probability of a rate cut and that is still the case now it's the may contract. so i think the markets are a little cautious here, and i'll

lay out an optimistic scenario, and paul gave us the ingredients of that scenario, which is that if inflation falls faster than the fed forecasts, that's wonderful iteration right there -- inflation falling faster than the fed forecast, the real rate goes up and the real rate could potentially go up in a way that the fed is uncomfortable with and be higher than they think. if that happens, then the market is being too cautious here i would love to be optimistic on application and optimistic on the real rate. the fed could find itself perhaps in the first quarter or some part of the second half or first half of next year in place where it's tighter than it wants to be. >> all right we'll leave it there on the optimistic note. thank you, both. good discussion. paul and steve as we head to break, our road map for the rest of the hour a slew of retail report cards ahead as consumer warnings continue to grow. >> more on the markets with

ubs's art cashin who says to continue to watch for that 4500 level on the s&p 500 finally, the latest from hawaii as the death toll rises to 50 plus amid the huge wildfires in maui. billions of dollars in repairs ahead. big show stay with us thicker, fuller har with just one capsule a day of advanced hair complex. conquer hair thinning... ...and fall in love with your hair all over again. only from nature's bounty. what do you see on the horizon? ...and fall in love wuncertainty? or opportunity.. whatever you see, at pgim we can help you rise to the challenges of today, when active investing and disciplined risk management are needed most. drawing on deep expertise across the world's public and private markets in pursuit of long-term returns... pgim. our investments shape tomorrow today.

wow, you get to watch all your favorite stuff. it's to die for. and it's all right here. streaming was never this easy, you know. this is the way. you really went all out didn't you?

um, it's called commitment. could you turn down the volume? here, you can try. get way more into what your into when you stream on the xfinity 10g network.

as we said earlier big week for retail we will get report cards for walmart, target, home depot and others let's get to courtney reagan with a preview. >> good morning. the guidance for the quarter to be reported and the remainder of the year was conservative for most retailers last quarter. that's despite the twinz that many saw from lower freight costs and stabilize in the supply chain there's worry about the consumer the u.s. consumer has been resilient in the face of persistent inflation, but most think there's a looming breaking point. home depot reports on tuesday before the bell and forecast a year of moderation and while an asal sis of foot traffic by placer ai dropped 6% in the quarter, it did improve throughout the quarter and investors might expect more. its shares are up more tha double the retail etf. the xrt since it last reported expectations for target, though, have been falling on wall street since it reported as the retailer saw the shoppers pull back on higher margin discretionary categories like

apparel and electronics, placer.ai estimates target store traffic has fallen around 3% in the quarter and target shares down 17% in the last three months walmart always among the most followed by investors and reports its quarter thursday morning and looked at as a positive retailer by many. walmart is a strong grocery category, has attracted higher income consumers the retailer work to keep them and get them interested in other higher margin categories which have weakened. walmart has grown its grocery share over the quarter capturing 25.2% of all grocery in the united states. that's up from 24.2% last year placer's traffic data does suggest that walmart store traffic fell by about 3% in the quarter, too sara, carl >> thank you it's a great run down. retail, pick winners and losers who says, quote, events are driving demand in consumer

spending on soft goods while companies are seeing profit margin clarity based on clean inventory levels, lower supply chain, and raw material costs. dana chelsea, chelsea group ceo right now. dana, barbie and taylor swift, right? that's who is dominating the summer which retailers benefit? >> you're exactly right. thank you for having me. i think overall, nearly everybody is doing a collaboration with barbie lately and also the taylor swift concert. on average we're hearing numbers like $1300 for people going to taylor swift, with the transportation, the restaurant, the hotels and the ticket prices alone. when you think of which retailers will benefit, it's brands benefitting and some of the brands out there, you saw ralph lauren yesterday, i don't necessarily think they're a taylor swift beneficiary but ralph lauren what they've done with the business model. i think tjx will be a beneficiary given the traffic going their way and the value offering they have i also think you're going to see

athleisure and lululemon dominates that where they're beginning to see more wholistic offerings that is driving demand then watch for the return of abercrombie. abercrombie's core brand has been working secular improvement in hollister that i think we're going to continue to see as that is a path for 2024 and beyond. >> the stock has been strong fran harwitz has but together quarterly beats. tapestry, i think you like the stock. had it at buy. do you feel any differently after the big acquisition announced yesterday? >> let's call it what it is. it raises the risk profile when doing an acquisition like that and taking on the debt you are, it adds a risk profile to the story. i think $5 in earnings that tapestry laid out last september at their investor day for 2025 is still intact. i think what gave them confidence to do it is the fact that nearly $800 million in cash

flow ka capri generated in a murky year gives them confidence to pay down the debt to get the leverage from 4 times to under 2 1/2 times in a two-year time period the michael kors brand is the key to making improvements, and the management team that was there during kate spade is a different team there now i think the data science they'll put in place and the emphasis on dtc or ratcheting down their wholesale exposure should help with margins this takes time and i think managing the core coach brand and the tapestry business, while integrating this, is certainly a heavy lift, but one if scott roe as the cfo, joanne as the ceo, they're up to the task and the price that they paid we've seen brands go for much higher multiples. it raises the risk profile of the story as of now. >> and dana, i mean, are you

bullish in general on the potential for the concept of this portfolio of brands given the way that distribution channels are operating right now? do you feel as if those brands actually have a hold on today's customers? i'm wondering if this is kind of more of a compromise type of combination, as opposed to one that can be restarted as growth? >> so i think two things i think number one, i think they're buying it where they see it as a period of weakness i think they're buying it when they see the michael kors brand stumbling. i think that can it be growth? yes. it can reaccelerate. i think it can be a growth business, but not super juggernaut growth. i think it allows them to be a market share leader and to get better margins i think the margin opportunity, there's more clarity than what we can see on top line and it's dollars that go to the bank. >> really, quickly, on your point about profit margins, you see the tailwinds. you see this as a benefit, the fact that we're seeing lower

inflation, costs, inventory levels some people worry about the -- that that will pressure margins. retailers won't have as good pr pricing power and they have benefitted keeping merchandise at full price. >> one of the things i've seen this year. i have less certainly the direction of where top line is going. i've seen consumers at some of the higher end levels moderate their spend or curate their spend to other categories. i think there's more opportunity on the margin side because of lapping. lapping raw material cost pressures, lapping some of the freight changes, and the lower inventory levels can help you manage your pricing so you're going to see promotional, but maybe not as promotional you had to be if you had higher inventories. >> great good to preview that with you, good to pregame retail earnings. as always. >> thank you take a look at some of the biggest laggards on the s&p. we mentioned the weakness in semis today.

you'll see last month, lxp not far from the list. on pace for the worst week of the year, although the dow is up 130. back in a moment we planned well for retirement, but i wish we had more cash. you think those two have any idea? that they can sell their life insurance policy for cash? so they're basically sitting on a goldmine? i don't think they have a clue. that's crazy! well, not everyone knows coventry's helped thousands of people sell their policies for cash. even term policies. i can't believe they're just

sitting up there! sitting on all this cash. if you own a life insurance policy of $100,000 or more, you can sell all or part of it to coventry. even a term policy. for cash, or a combination of cash and coverage, with no future premiums. someone needs to tell them, that they're sitting on a goldmine, and you have no idea! hey, guys! you're sitting on a goldmine! come on, guys! do you hear that? i don't hear anything anymore. find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com.

icy hot. ice works fast. ♪♪ heat makes it last. feel the power of contrast therapy. ♪♪ so you can rise from pain. icy hot.

welcome back to "squawk on the street." the dog days of si summer hitting bitcoin, completely flat on the month so far. dom chu. >> as we talk about this kind of new consolidated trading range that bitcoin has found, it has found a slightly higher level than this year if we take a look at a chart, we've been hovering above and below the 30,000 mark for about a couple months now. so there's this kind of new range developing right over here that's slightly above where we were in the spring months. coalescing around it that 30,000 mark if you take a look at where the performance near term has been over the course of this past week, bitcoin and ether are the two biggest tokens out there in the world of crypto have performed okay, regulartively flat, but it's been one of the top ten in solana that has out performed either one of them

up about 8% versus the 1.5% gains for bitcoin and ethereum that gap is something to watch over the last couple days here if you take a look at the stocks most closely linked to the crypto trade, flaps terms of exchange operators like coinbase, also robinhood to a certain degree, also bitcoin proxies like microstrategy, owns a lot of bitcoin on its balance street, overall you can kind of see here, micro strategy has been the out performer among those with the exchange operator seeing relative weakness it's a dynamic to keep an eye on >> thank you very much still to come more on the markets as big tech under performance and small caps on pace for the worse week. we'll breathgsk in down with art cashin next. stay with us this thing, it's making me get an ice bath again. what do you mean?

these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done. i'm okay. (fan #1) there ya go! that's what i'm talkin' about! (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? myplan from verizon. switch now and they'll give you nfl sunday ticket from youtubetv, on them. (hero fan) this plan is amazing! (josh allen) another amazing plan, backing away from here very slowly. (fan #1) that was josh allen. (fan #2) mmhm. (vo) for a limited time get nfl sunday ticket from youtubetv on us. a $449 value. plus, get a free samsung galaxy z flip5. only on verizon.

welcome back to "squawk on the street." i'm contessa brewer. here's your news update this hour the judge overseeing the case against former president trump is hearing arguments this morning in a d.c. federal courtroom. the special prosecutor wants to bar trump publicly sharing evidence turned over by the government during discovery. prosecutors sought that order after a truth social post promising to, quote, come after those who would go after him here we are in the middle of a war and ukrainian president volodymyr zelenskyy just fired the heads of the country's regional recruitment centers why? concerns over corruption ukrainian officials have made cracking down on it a priority

as the country seeks membership in the european union. negotiators from striking writers and the hollywood studios will return to the bargaining table top issues are the payment of residuals in the streaming er and the use of artificial intelligence. >> contessa brewer for us. thanks. an hour into trading as we said, markets rebounding from the opening lows the umish data took some of the pain out of the ppi print this morning. on the newsline let's bring in ubs director of floor operations art cashin on this friday. it is great to talk to you again. i know you've written extensively this week about the influence of the bond auctions and i wonder if you think we're at a period where inflows, despite inflows yields aren't going down, do they need a push, growth disappointments >> we are at a rather critical area it's important, many of us thought that we had a series of

minor tops here in the 10-year around 4110 to 4125. they came up and pressured that again, and that spooked the markets a bit. the fear is that they push above the -- i'm sorry, if they push above the 4025 area, then we could have a problem relative to the auctions call that concern isn't about the individual auctions, but the supply the government, the treasury is going to have to issue more and more, and that's hopefully not going to crowd things out. that's the fear that we might be cro crowding out we're watching the bond market testing and for days now, the s&p has been testing a lot of moving averages between roughly

4440 and 4535. >> yep. >> so the key areas to be watching here. >> yeah. we'll been sort of stuck in this range. overall, 30,000 feet, art, does this feel like it's par for the course when you chopped a lot of wood on the inflation front and not sure what's going to happen with the earnings or marginis on the s&p and it's august? does that indecision, does this seem very familiar to you? >> you sound like you're in the watering hole with some of us old timers it is august and that does stick out in everybody's mind. we're moving through the middle and -- the middle of august sometimes sees changes there are certain people looking for cyclical changes that you might be watching for key action on monday and/or tuesday

i would love to be able to tell you which direction, but if i could do that, we would be on a yacht somewhere. historically, as we move into mid-month, you can possibly get some changes of directions and the fact that we're testing and testing and retesting both bond yields and the level on the s&p, says that if there is a sudden change a breakout, then it could take the market by surprise and you could have a big move. you almost saw one the other day when yields went down to 390 and then shot back up above 4, and it looked like that was going to move the markets a bit they held back i think from now, it could be a critical time for the bond and stock markets. >> yeah. art, we were saying earlier, just the jumpiness and uptick in

volatility in the treasury market often does keep the stock market back on its heels it seems like that's playing out kind of hour to hour i wonder just more broadly, aside from just the calendar, we are into august, we came into this period of the year when everybody first decided to call it a bull market, even after we've been up, you know, 30% off the lows, a lot of bears capitulated and where even the presidential cycle starts to turn a little bit less friendly for the market, so i mean, would you be kind of putting that into the mix in terms of handicapping where we go from here? >> yes well, you know, i've been doing this a long time and i will tell you whenever it looks like the book is over, there's one more chapter. i think that's what we're seeing the hedge funds and others were capitulating we had longer term negative observers saying we were wrong

or off and that's not usually the kind of capitulation you look for, usually you look for it in high volume and volatility, but sometimes it's collectively people saying, wait a minute, i missed a decimal pound here that wasn't quite right. so i think you're dead right for a while it looked like the bulls were going to emerge victorious and now they're saying, well, maybe we'll keep the champagne on ice for a while and see what happens. >> just want to note that things are improving here as we speak the s&p has gone positive. the dow is now surging 170 points we are recovering from some earlier lows nam of sectors turn positive, financials, materials, industrials joining the defensive groups energy still at the top of the market for the week and day and i wonder, these oil prices hitting their highs for the year, whether that presents a risk or we should look at it as a good thing

because demand is high as we heard from the iea today >> well, i think certainly the energy stocks give it a boost. they've been lacking for a while, but nobody watches more carefully and professionally than you do, my dear, the currencies and when the energy prices move up along with yields, that tends to move the dollar higher and that tends to affect foreign earnings and a variety of other things the game is still on the table here you're right and you look at energy and oil prices for more than one reason. >> the dollar is higher. you're right. >> yeah. on track for four weeks. art, always great to chat. enjoy the weekend. talk soon. >> and you and all of your viewers have great weekend. >> art cashin. >> thanks, art. when we come back, the very latest on the deadly wildfires

in hawaii and the fallout we're tracking "squawk on the street" will come right back

the citi custom cash℠ card automatically adjusts to earn you more cash back in your top eligible spend category. hi. ♪♪ you don't have to keep tabs on rotating categories... this is the only rotating i care about. ... or activate anything to earn. your cash back automatically adjusts for you. can i get a cucumber water? earn 5% cash back that automatically adjusts to your top eligible spend category, up to $500 spent each billing cycle with the citi custom cash℠ card. i love it... [voice vibrating]

the death toll from wildfires in maui rose overnight with as many as 55 people confirmed dead, but the maui county mayor tells the "today" show the number is likely to rise because buildings have yet to be searched contessa brewer joins us now with more. hi. >> mike, apparently they have to wait for fema crews to come in because the crews are better equipped to handle the hazmat conditions inside burned buildings. of course the first priority is safety the situation as it stands now is still very uncertain. state farm is the biggest property insurer in hawaii with 11 offices in maui and two in lahaina which was terribly burned i asked a maui agent whether everyone he knows has been accounted for. >> we don't know there's still hundreds of

people, you know, on a list that i've seen that people are trying to locate. the challenge is the communication is so poor and so many people had to run out of their house with nothing, you know, to -- team members here in the office that had family members that ran out without their wallets and just some horrific stories of what happened in a split second decisions people had to make. >> the community has put on the back burner any worries about the economic impact or the implications for tourism, which fuels the economy. he told me right now, shelter is in short supply. the hotels are completely full he said he's actually considering that he needs to stock his office with cots to accommodate other insurance agents who have volunteered to come to the island and help process initial claims in the meantime state farm told me last night that they had processed 317 claims already in

connection wit connection with the wildfire, roads are closed and they expect more moody's risk management services reports 3,000 acres burned guy carpenter used high tech imagery. the fire structures within lahaina alone with the potential impact of $2.8 billion on the structure, the contents, and automobiles. in central maui, another 700 structures adds up to a half billion dollar potential exposure all of this isreally early you can take a couple weeks for us to get a good picture of how catastrophic this has been, but accuweather's estimate of total economic impact and damage, regardless of insured value, is as much as $10 billion guys >> contessa, has the insurers changed the way they model these climate disasters?

because i mean, like we never -- we haven't seen wildfires be this destructive and catastrophic, have we? >> not in hawaii this is the deadliy wildfire since we saw the campfire in northern california that killed 85 insurers are using a.i., really advanced technology, not only to model risk, but to assess the weather. in this case, you had hurricane dora going through the pacific, churning up these winds. on maui, and the rest of the ha why yea yan islands, they were watching the hurricane for the landfall there was an area of high pressure to the north and that combined with the risk assessment guys at, guy carpenter, told me yesterday, it created just this freak weather situation where it was so dry and so hot and already they had been in a severe drought in this

part of hawaii, that it fueled those flames and the winds drove through them you can see the devastation and how quickly it spread. i was reading this morning some accounts from residents that said they had to flee wildfire before they got a warning it was spreadingit, it was spreading so fast. >> contessa, you mentioned state farm is the largest insurer. are there other property insurers we should keep an eye on in terms of their exposure? >> 35% of the market is state farm, tokyo marine, all state corp, usaa auto, geico has 29% of the private car insurance, state farm, usaa, allstate and progressive. and in commercial you look for aig and alion are the top five commercial insurers. there are specialty lines. we read reports that the big

museum in lahaina that house so many of these irreplaceable treasures from hawaiian history has burned there is specialty insurance for museums. it's early and a lot of insurers won't talk about who their clients were or for how much they were insured. one thing about the hawaiian insurance market, though, is there's more than 250 captive insurers this is where companies decide they're better off financially to go and start their own insurance company and self-insure. 250 of those in hawaii so, we'll have to keep an eye out whether some of those companies that have captive insurance were part of what we see here for the catastrophe and how that shakes out. >> remarkable, contessa. tragic we'll see if we see more insurer flight like we've seen in the mainland "squawk on the street" is back after this from the first-ever triple action sleep supplement... to daily digestive support...

to more wellness solutions every day. get more with nature's bounty. your shipping manager left to “find themself.” leaving you lost. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire

talking about the big tech tumble this week and whether he sees any good deals. first, let's get to dom chu with some of the market moves dom, for the week, tech really was under pressure. >> it was. if you look at the way the

rotation worked out over the week, to your point, technology to the expense, perhaps the benefit of health care and energy if you take a look at the moves we've seen, 3% moves in energy, versus the 2.5% drop in technology gives you an idea where that value growth trade has moved and converged towards over the course of the last week or so. if you dig more into the industry groups that have been outperforming and underperforming throughout the course of the week, you can check the semiconductor etf, down 2% again today. the key a lot of traders are watching is the idea it's trading below its 50-day moving average. you have to go back to the may area to see when the last time we touched that zone is. as you can see with the orange line so well above that 200-day moving average or longer term trend line if you take a look at where, perhaps, some of those names affecting that trade over the last week or so have been kind of playing out it has been qualcomm, advanced

micro and nvidia during that one-week span. so, the computer chip trade still hot on a relative measure to its long-term trends but cooling off over the course of the last week or so. lagging wise, that's the trade as for where the outperformers have been, thematically speaking, over the course of the last week or so, within the s&p, it has been in pharmaceutical names, specifically eli lilly up 18%. still a lot of positivity around anti-obesity drugs and the like. also travel names over the last week like expedia, some airlines and casinos. expedia is up 7% apa corporate up 7.5% as well over the last week so, carl, energy has been an outperformer, travel and leisure. check out pharma, the week's laggards and leaders >> nice to have you in the house, dominic chu before we go, mike, another big friday night for santoli and

brown. >> that's right. mike and josh, or as josh calls it the josh and mike show, it's back at 6:00, taking stock i'll see if i can have josh be less inhibited. >> out of his shell. >> yeah. we chop up pretty much everything that happens during the week and i think we might try to remake the dow industrial. >> the dow jones industrial average? >> yeah. >> last friday's show was awesome. we look forward to another one tonight. 6:00 p.m. stn tieaerme "squawk on the street" is back after this don't go away.

your record label is taking off. but so is your sound engineer. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire

the new york stock exchange. ahead this morning, tom lee is with us. get some reaction to the inflation data today, what it means for margins and why it's bullish that a session is not in sight. nyu is with us with risk premium in the market and whether valuations are getting too lofty. >> jim stewart on the reverse leverage studios have in the writers and actors strikes. first up on the markets, a little recovery seen in the last half hour or so.

th