are moving higher today, but the ten-year note yield remaining inverted with the two-year our rick santellis in chicago for us to go through all of those details. rick, the fixed income market is very much a fixation with the big fixation narrative floating around. >> it absolutely is. the only thing that is in keeping par with the recession are interest rates themselves. we both know that two-year and ten-year dabbled very close about three weeks ago on an intraday basis with 3.5%, but as we look at the two day of twos and we've taken off and going into the jobs number two step and we always seem to sell off pushing yields up, no exception and look at the two-day of tens and about 25 basis points, low to high and it has been a rather big move especially considering that at 235,000 as kelly was referencing earlier, we're basically at a six-month high on initial claims even though the numbers are small. it's a very flat line that goes from slightly under 230,000 to 235,000 and even though historically they're low, the market avoided that. as a matter of fact, as you look at a five-year break

bond report means the fed will stay aggressive and the job side of things is getting better and rick santellihe strong jobs report reverberating big in the market right now >> oh, absolutely. whether it's two year or the 30-year bonds and everything is moving down in price and up in yield and do remember in two and a half weeks, of course, we have the fed meeting and it certainly seems once again, three-quarters of a percent, 75 bases points on the table and the last three days have been a pretty wild ride for treasurys and look at the day of two-year note yields and we've gone from 2.75 to 3.15, 3.15, a huge move, and if you look at one month of tens, you can clearly see that we're starting to get closer to the intra-thai high that was in 3.5% in mid-june and continue to monitor all that has to do with yield curves because the yield curve spreads as you see on this long, dated ten-year chart going all of the way back 11 years, we'll have the highest weekly close, basically, in nearly 11 years for tens and what it's done is it's starting to flatten out that curve we know that twos to tens is

the bond market where the yield curve sin verting following the gauge book results from the fed rick santelliand how much more is the bond market materieltelling us e likelihood of a possible recession? >> the bond market isn't tellinging us quite that much, but the fed funds futures marks are and we'll get to that in a moment it's a long story today and we can tell it all today in four charts look at the intraday of 10-year note yields. at 8:30 eastern it popped and those were hot, hot, hot, cpi numbers and the minute it didn't hold 3% it popped. if you look at the intraday of 30-year bonds what happened there is the 1:00 eastern we had an auction and boy, investors they might have looked at today's inflation data, scratched their head and said i think around 3.5% will be the terminal rate. i like the fact that the bank of canada won 100 and maybe the fed will be bigger because the more they do now the better off the market is going to like it and boy, they really bought the longest maturity on the treasury curve especially foreign interest if we look at the curve as you were just discussing

danielle shay joining me five-year notes up for auction at the top hour rick santelli has the resultsi should say rick, how is it looking? >> you know, it looked pretty good i gave the auction a b-plus for demand by investors, straight up at 1:00 eastern. let's go through, it shall me. 46 billion five-year notes, second leg, 29s yesterday. we don't have 7s tomorrow baugts of the fed decision. they will be on thursday the yield of those 46 billion, 2.86 right on the nodes. the one issued market was at 2.87 lower yield price, a positive all the metrics were near ten auction average. the best metric i think was indirect bidders we always talk about that, kelly, that's your foreign interest, and i also think that the community is taking much less than their 10% option average down to 16 president 8 is a god thing as you look the at the charts did have a nice little pop at 1:00 eastern didn't last long basically at high yield low price of the section as you see on tra day and looking into early may you can see what dom was talking about, the longer the ma tart the more damage being done to

let's get to rick santelli at the cme. what do you make of all this, rick >> it seems pretty clear to me, the biggest issue we have right now, and i hate to say this, but it's true, and i think tony walked right to the edge is there are a lot of politics getting played shocking, but it shouldn't be considered a negative, but janet yellen paints a very good picture of the economy maybe she should get an oscar for that because i thought it was a tremendous job, but if you look at the twos and tens whether it was the president earlier or janet yellen and i think that is very important because the only thing i see going on post-gdp is the dow jones industrial average, the s&p, the nasdaq are having really good days i wonder why there's no good news sma sma as a matter of fact, if you look at the goods, new home sales were weakest since 2020 and durable goods was the right bright spot and it's not really adjusted for inflation and pending home sales were down almost 20% year over year and gdp was horrible and the initial jobless

rick santelli live at cme hq with breaking news our july read on the chicago pmi.ecting a read in the mid-50s. 52.1 for july. 52.1 that follows 56. both those have something in common they're both the lowest levels since august of 2020 that's correct when it was 50.9 haven't been below 50 since june of 2020. we all know that wasn't a good time we see a lot of the data today was a bit on the aggressive side, whether it was employment cost index or inflation embedded in the consumer aspects of the last number. rates, well rates are up on the session, but down on the week. "squawk on the street" wl tu aer srtreak. nurse mariyam sabo knows a moment this pure demands a lotion this pure. gold bond pure moisture lotion 24-hour hydration no parabens, dyes, or fragrances gold bond champion your skin 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...

rick, for now, thank you our rick santelli. >>> let's stick with energy. the white house today is reportedly out with a memo saying that gasoline prices are likely to account for the entire annual increase in tomorrow's cpi report they're also emphasizing that the gas prices are expected to keep falling in the weeks ahead. and sure enough, oil today is way back below $100 a barrel, down to about 96 and its lowest since april. pipta stevens is back with me now. p pappa, what is driving these renewed declined >> wti down almost 8%. it's a confluence of related factors behind the move. we have demand concerns out of china amid a spike of covid cases, a stronger dollar makes oil more expensive for foreign buyers, recession fieears are sparking concerns about an overall slowdown in demand the dip below $100 has sparked interest from funds and finn liquidity. and with biden preparing to meet with saudi officials, there's limited appetite to buy the dip. wti is right around $96. the contract closed at $92.24 on february 23rd, the day before russia invaded less th

and our own rick santelli and steve liesman.ould the markets be rooting for >> the last time i was here, melissa, rick santelli got this number right on the dot. i just agree with whatever rick says in reality it's the reaction that the market has that counts. unfortunately, i don't think we can trust rallies on any of these dressirections on this particular data. we have cpis next week i think we're hoping for something right around estimates, but i hope that we break below the 300 number so we can see some moderate cooling in the labor day at that. >> and clearly, nila, what are you examining here >> well, the bridge between today's number and next week's number labor force participation has been surprisingly stubborn, and i would tie that to the industry establishment survey because i think what you're seeing there is a structural change in the economy where retail is losing to momentum as people shop more online, and people are making different decisions on whether they want some of the jobs that the economy has to offer so

thank you, rick santelli good thursday morning, everybody. to another hour of "squawk on the street" i am david faber. that is sara eisen carl has the morning off and morgan is on maternal leave. we are up across the board. >> despite some of the negative data out there that rick just mentioned, we're 30 minutes into the trading session. here are three big movers. carnival getting crushed, announcing a $1 billion common stock offering, saying it will use the proceeds for general corporate purposes the stock is down 12%. we've seen a nice rally in the last few weeks evaporating today. profits and revenue, as they sales rose faster than costs, i should say, the company also announcing a share repurchase program. s.a.p. sinking lower, trimming the profit outlook later today we have an exclusive interview with christian klein on "closing bell," david one of the biggest software makers with the ecb moving and there's questions whether europe is heading into a hard landing sooner because of the this energy crisis. we should turn to tesla. stock of

of mind thanks >>> let's turn to the bond market with the recessions and reversions, it rages rick santellih the latest action rick >> there's a lot of different movements on the yield curve today. you have two and three-year yields down on the session price is up. look at the interim, too and you can see after the 8:30 eastern day and it gave it ground and combine that with waller's comments and maybe it won't be under 100 and then you look at the mid part of the curve where yields are up and they're up with 5s, 7s and tens and we're still up, not a lot and we're up a couple of basis points on the session, though the most important dynamic is still up 30% and their yields are lower on the session and yesterday's 30-year bond auction underscores. we keep a lot of this pretty simple the market believes there's most likely going to be a global recession and that global recession will probably be sent to us from europe if not from our own shores and, look at december fed fund futures. yesterday their prices dropped to contract lows okay, that means more fed. today, some of that, not all of it

rick santelli back in the action rick >> well, you know, if you look at retail sales, maybe in certainu can say it was about right with respect to the fed, and i'll tell you what i mean the numbers look pretty good, adjusted for inflation they didn't look quite as good, but fed funds futures for december at the end of this year are up about eight basis points today and interest rates like a two-year note yield are unchanged on the week. what i garner from that is that the market isn't acting as though retail sales was strong enough to be that 100-basis-point push and i'm still in the three basis point cam and while two-year notes are unchanged and at 292, they're down four on the day and they're down 16 basis points on the week and open the chart up to early june and we closed just a whisker below 3.5% and not only does that become elusive and just 3% has been, losive and th look at the week in bunds. they're at 113 three weeks ago they were at hig and the high-yield etf as it moderates a bit, they'll close at a five-week high and this week as the euro versus a dollar, tuesday, wednesd

here is rick santelli with all the latest. rick?rter: it is all about what you want to concentrate on, especially considering how markets do leading up to a sub meeting. look at the two-year start and realize that right now, two year, three year, and it just crept to the five year are the only maturities with a higher yield lower price than yesterday. it was only twos, threes, fives. it is creeping up. if you look at the same start date, you can see exactly what i'm talking about. the tens have a high watermark close to 350, so did toews. but you are about 20 points away from their high watermark, but you look at how far we are with 7.8% with regard to 3 1/2%, and you can see how much the curve flattened or inverted. this is really something. that minus is almost 26. today's close should be the most important close in 2020, going back to august 2000. maybe it will happen in the next few recessions, because our fed might be going in one direction and so are the ecb. but look at what happened with their yields since the tightening on

a busy day in the bond market where the focus is on yield curves and currencies and rates and rick santelling all the action. rick, what are our takeaways >> yeah, i'll tell you, all of the above and let's not forget the reason we're studying all of the above is because central banks have been so busy the last decade and a half, accumulating large positions, our central bank 9 trillion ecb, boat loads of negative securities, that's why inflation and recession and tightening cycles are so painful, because of decades plus of manipulation by the big central banks. look at an intraday of 10s, you see that selloff that pushed yields up, that was a failed option i gave it a d minus. it was an ugly option in front of tomorrow's cpi. look at a two-day of 10s and realize less than a month ago we have intraday highs, a whisker shy of 3.5%, much lower and yields higher in price look at a three month of boons look how they've dropped from 177 to its current level just above 110, and then look at the three-month euro versus the dollar notice how the right side is the same as interest rates fell the last

in the year >> that's a very interesting tilt, bob, thank you let's look at the bond market and rick santellicking the action in the nyse people are raving about the 20-year auction, rick. >> they are and they should, but do remember the reason it's the highest yield on the curve is it's not the most popular, most highly traded maturity on the curve and the bigger the auctions, the deeper the amount of supply and the more it's traded and liquidity is pushing yields down in the other maturities, but it is definitely in many ways some of the best action that we have seen my mike did fall, i a polpologi everybody. you can see it was off the charts and the auction was great. month to date of two year and it keeps steadily climbing and all yields now are very close to higher on the day. and they've come a long way like stocks and now look at a month to date, and it's turning higher why? because next week we have a fed meeting and it's starting to do the fed dance. finally, high yield for a while it was the big talk. right now we're at a six-week high should we stay here for the hyg, the high yield

rick santelli tracking the action as he always does with the power player in the bond market rick, overyou. >> yes, and thank you, tyler i'd like to welcome jerome schneider and managing director of pimco and head of the portfolio management jerome, we haven't talked in person since covid hit it's great that you're here in chicago and while you are, i noticed the vix trading around 2610, and the reason i bring that up is if you look at the high for the year that's the midpoint and i know one of the themes we're going to discuss is the liquidity issue and the volatility issues that are affecting equities and interest rates and that shows me this investors are getting used to it, but they're definitely not looking forward to more of it. >> you can extrapolate it to fixed income and rationalize that even when you look at front-end rates you see a tremendous amount of volatility even in the past month the two-year note has gone from 2.8% to 3.1% today so the volatility that we're seeing in the marketplace is punctuated by a no known in the markets place and the federal reserve is ever more

the dow down 110, the nasdaq remains up rick santelli is tracking the results. >> and it went spectacularave it an a and it had a couple negatives but so many more positives look at the 20 year bounds, the yield 3.42 and several basis points below freezing the issue market. second highest yield ever for 20 year, last month being the highest at 3.488 this is 3.42 and we had a bit of a weak bid to cover, a bit of a weak directed bidding at only 14.1% but the only two categories, enco indirect bidders indirect strongest and if you were going to buy into a treasury auction, wouldn't you buy the maturity that had the largest yield by 1 26 basis points? >> so fascinating. why is the ten year yield relatively so much lower than the rest of the curve? >> this is called liquidity. the 20 years a bit of a three legged stool others have bigger auskss and easier to buy and sell >> people are a little worried about that rick, thank you.>> people are ad about that rick, thank you.and sell >> people are a little worried about that rick, thank you.easier to buy al >> people are a little worried about tha

and now to the bond market we have part of the yield curve still inverted rick santelli welcome backme, it is really striking we can have this strong a stock market rally with yields still up around 10 year up around 3% it's not like this is happening because everyone thinks the fed is about to cut 75 basis points. >> i know. it really is quite incredible. it is a tale of two different sections of the yield curve. look at a two year note yield. and kelly is talking about the market is hovering but two year note yields are like the s&ps on pace for the highest yield close since the cycle high yield close on the 14th of june which was at 343. now that cycle high at 3.43% on the 14th of june was a 15-year high for the two-year note yields as you look at that formation, keep it in your mind, let's go to a ten year with the same start date see how the right side of the chart is going lower that didn't show what is going on in the markets. the short maturities are getting ready for the fed meeting next week 75 basis points, maybe 100 i'm leaning 75 and so reflective in the two-year and sho

will the market be right it is better than the people guiding policy >> rick, thank you very much rick santelliother key inflationary indicator and energy having a strong week and the earnings and records, pippa stephens. >> let's start with wti which is about 2.25% here at 98.64 and this comes ahead of opec's highly anticipating meeting next week and higher oil is boosting the bottom line for energy companies. chevron and exxon this morning reporting record profits during the second quarter and their refining divisions playing a key role as prices for products like diesel and jet fuel jump both stocks are rising today, but we have seen some softness across the energy sector in recent weeks amid growing recession talks and the potential demand slowdown, but exxon ceo darren woods saying on squawk box that he still sees growth ahead >> there is some elasticity in demand so we did see some impact in moderation demand, but continue to believe and see growth overall and as economies continue to recover. >> meantime, huge moves across the clean energy space this week following that surprise deal bet

that's what's bugging me >> rick, thank you very much rick santelli. >>> well, speaking of which, that's perfect place to bring if pippa stephens with the latest on the energy complex >> there's been a lot of volatility this week a quick review here and we had the spike on monday that took wto above 102. we drifted lower over the course of the week and are now ending down 1.6% at 104.79 following the latest rig count data and also fuelling this week's decline includes the return of libyan production and u.s. gasoline demand as well as recession fears. turning to nat gas, that continues to be the big story rising here in the u.s., in the uk and eu. there was perhaps a sigh of relief as russia resumed some gas flows, but rbc among those noting that gas remains president putin's weapon of choice and cuts could be coming. shares of schlumberger up 4% revenue jumped 20% year over year and the company raised its outlook amid drilling activity kelly? >> and a 4% dwayne ingain in th tells you it wasn't totally priced in. my next guest isn't throwing in the towel. he's sticking in with the 14% ra

points, but obviously they're aggressive right now >> pretty muted reaction and bob pisani and rick santellioin us to look at the markets in the early few moments as we digest it let's start with you that prior to the fed's last move six weeks ago it was 3.3.25% and now we're at 3.57 or so. >> if you look at two-year note rates and ten-year notes on the 15th which is when the fed made its move everything peaked on the 14th as a matter of fact, if you look right now they're down nearly 40 basis points from the 3.47 high close and the tens were down over 72 basis points from their high close both of the high close they would be tightening. so the fed's big 614 was to send a message to the market and the market has financial conditions and doing the heavy lifting and something's changed. since then, the market has eased and is losing credit conditions pretty much on every level you look at and that is the quandary right now. many believe large institutional traders that many big hedge funds are going the other way. they're going along with the fed who supposed to be the big inflation fighter an

we saw yields drop significantly and then kind of stabilize rick santelli, what can you tell us >> theybilized double digits we'll have double digits from twos all of the wait down to tens and look at the two-day chart below yesterday's lows and look at the two-day charts of tens and below yesterday's lows and, ell, consider the philly index, at an eight-month low and we see the leading economic indicators have four consecutive negative months in a row and it hasn't happened since the end of '15 and the beginning of '16 let's shift gears in just a bit. let's look at a year to date of boons and they settled their third session in a row lower in yield and if you look at it intraday of euro versus dollar, lagarde said in her press conference that the euro was below parity in the intraday basis and it was to juice up the currency, but it didn't get juice. it failed. it fell sharply as you look at the intraday chart from the intraday highs and? and energy prices on the verge of recession at 50 and it sounded good until you think about it the transmission protection instrument and that's the

rick santelli with the last batch of breaking news for this week of course, i'm at the cme hq in chicago1, university of chicago sentiment. i will take a breath here because the fact we are not at 50, last look, our final read last month was the lowest in record keeping in 1978 at exactly 50 current conditions, 57.1, 53.8 in the rearview mirror that was also the lowest current condition since 1978 and on expectations, 47.3. 47.3 and that isn't bad news because we have to still go back to 1980, 1980 on 47.5 or less, so 47.3, we'll, we're comping on the worst levels there for four decades on inflation finally, let's get to business inventory, shall we. business inventories up 1.4%, exactly, exactly as expected the inflation numbers coming in now. one-year inflation at 5.2% on university of michigan, down from 5.3 5.3 was noteworthy because that was the highest level, basically -- no, excuse me i'm sorry. 5.4 was the highest level going back to 1981 we have obviously lifted above that to some extent. and we have 2.8%, 2.8% on the five to ten-year inflation the high-water mark there was 3.8%

seconds away from new economic data, including the employment cost index for the second quarter rick santelli for the second quarter is running pretty hot. our last read up 1.4, was the all-time high going back to '96 recordkeeping, it's up 1.3, a tenth better than expected but a tenth lower than the rear view mirror which up to now has not been revised it has been on a steady increase of course that's salary benefits we understand inflation puts refresh pressure in that regard. back to back .6. we look at spending, up 1.1% multiples better than our last look upgraded from .2 to .3. these are some of the fed favorite inflation gauges. it is up 1%. it continues to comp back to 2005 where it was up 1%. and if we consider how far back you have to go to get higher than 1%, that will take you to 1980 1980, when it was up 1.2, and guess what, that is the all-time high we are only one tenth away from that and if we consider what's going on with the year-over-year number, it's up 6.8, 6.8's another fresh high that takes us back to 1982 when it was up 6.9. look's look at the core deflator month over m

rick santelli here live on the cme hq, our latest read on continuing claims and trade balance.smallest trade balance of the year. february's was the largest, going back to 1992 recordkeeping. it was slightly over 107 billion. on initial claims, 235,000 235,000. that's down 4,000 from what is still an unrevised 231,000 last week and on continuing claims, 1,300, 075,00 if we look towards interest rates, well, even though continuing claims moved a bit higher, rates are still hovering very much where they settled yesterday, 3% on a two-year. and the ten-year note yield is slowly creeping back hovering now at 2.95. the dollar index has been one of the big stories, as it's been continually making fresh 20-year highs. joe, back to you >> thanks, rick. steve liesman joins us with more >> we don't, the testinumber is coming down. we just don't know if part of the decline is because of the shutdown in china, whether it resumes or hits a higher level once china fully opens up. jobless claims remain relatively under control, up 235,000, but not signaling that caution alert at 250 or near 3

rick santelli here, our june rai read on housing starts and permits. closer to 1,580,000. it was the weakest since february of last year. if we look at what's going on with permits, 1,685,000 seasonally adjusted units, a little bit better than expected. it is still the lightest read since september of last year we are starting to see some revisions last month, getting upgraded a bit from 1,549,000 to 1,591,000, which makes this month's read the lightest read since february of last year. now there's a variety of issues going on with housing. there's a whole segment that does cash decemals, that's look at the price as a positive because they want to get deals done there are a lot dropping out of deals. and we know that of course interest rate, supply issues are all playing havoc with what's going on with regard to housing, but maybe the one bright spot, if you wanted to call it a bright spot. slowing housing might help the fed accomplish its mission, because it looks like it's going to have to strangle the economy a bit to get inflation where it deem it

visit indeed.com/hire >>> welcome back to "squawk box," rick santelli here with a litany of live breaking let's start off with the consumer price index for june. up 1.1 up 1.1 on headline we were expecting up .8 of 1%. of course the high watermark is up 1.6 in march. up .4 if you strip out the all-important food and energy. .1 lighter than the rear view mirror and if we strip out food and energy and trade, up .3, .2 light. and on that score, you have to go all the way back to january of '21 to see the high watermark, which is up 1%. so we really dropped in that regard now the most important year-over-year numbers, 11.3 on year-over-year headline, only .2 below 11.5, the march high watermark. 8.2 on year over year core that's as expected that follows 8.3 high watermark also in march at 9.6, so that is separating down a bit. and finally, year over year, 6.4. .4 lighter than 6.8, and 7.1, the high watermark from march. initial jobless claims really jumping here from last week's 235,000 jumping up to 244,000, up 9,000 and we continue to trend higher on continuing claims, 1,331,000. that is de

>>> welcome back to "squawk box" right here on cnbc it is time for some new durable goods data rick santelli we have durable goods, some trade numbers. the june advance trade, we don't cover it all the time, because it's an advance number, but at 98.2 billion, of course with a minus sign t, it is well off its mark of $125 billion deficit on retail, it's a june number, wholesale inventories up 1.9 that's about .4 better than expected both these sequentially are gains with respect to the rear view mirror. and finally, on the june preliminary read on durable goods, expecting down .4, it's up 1.9 that's better than expected. so some very good news there and of course the rest of the data sets that are embedded in this haven't quite shown up yet. i do see capital orders, the shipments, non-defense aircraft up double expectations, up .7. up .5 on one of my favorites non-defense ex-air, and that really has been trending quite well, especially on a year over year basis, a proxy for capital spending and on the durable goods order, strip out transportation and it drops dramatically to up only .3 .3 is

i know rick santelli is sanding by in chicago. those numbers 20 seconds do you want to make a guess at what we're going to see? >> i think it will be up around .6, and i think the inventory numbers really saved the day yesterday, and i know that we often talk about what the real definition of recession, obviously, it isn't back to back negative gdp quarters, that's only in the eyes of the investors that are trading markets. that's all that counts in my opinion! but here we go i see jobless claims at 256,000, that's up 5,000. oh, my gosh. not only was i wrong, down .9 of 1% on first look at second quarter gdp. down .9 of 1%. okay i know there's an organization that decides whether we're in a recession or not, but investors are not going to wait. two back to back negative quarter, it's not good call it whatever you want. consumption up 1%. that's a bit light sequentially, that follows 1.8 you look at the price index, also not very good news. 8.7% 8.7% on the price index. that will still comp back to 1981 because in 1981, our comp goe