Transcripts For CNBC Squawk Alley 20240714

Growth as solid and said that the labor market continues to strengthen but the fed pointed out that wage growth has remained moderate and that inflation has been below the feds 2 goal this year. In the report, the fed said that it remains firmly committed to its inflation objective. Here at home, the fed is still forecasting more moderate growth during the Second Quarter and that the slowdown in business fixed indepth could be persistent internationally, the fed said that growth has stabilized during the first half of the year, albeit at a restrained pace it also said that International Financial conditions were supported by accommodative communications by major Central Banks. Now, as you said, this all comes from the feds semiannual report to congress fed chair jay powell will be testifying on the hill next week there was a special section in this report on trade the fed found that tariffs lowered u. S. Imports by about 70 billion. It also said that higher tariffs are having a material but modest impact on global trade flows and that uncertainty is weighing on sentiment and Business Investment decisions guys, there was also a special section on how high skill versus lowskilled workers have fared in this economy since the great recession. And it concluded that periods of low unemployment can particularly help the job prospects of lowskilled workers. Back over to you yeah, and that certainly fits into the jobs report numbers we got this morning ylan mui, thanks for breaking that down for us we have stocks falling this morning. The dow is down 188 points after a strong jobs report that dampens hopes of a fed rate cut. Lets bring in berns mckenney and gordon charlap good morning to you both gordon, ill start with you. Were you surprised to see stocks moving down, the dow down 200 right now . Not really, morgan. I think that the Investment Community believes that the rate cut is a foregone conclusion its priced in so perhaps the fact that the jobs report came out the way it did, people are suggesting that possibly it might not happen, so theyre maybe trying to walk back their expectations a little bit. But it has been a tumultuous free fall. Its a friday after a holiday. Volumes down about 20 . Were just sort of listless trading here but i dont get any sense of this thing sort of gaining any momentum to the downside just sort of lackluster trading here a couple of things, though, that you have to look forward to in the weeks ahead. Obviously, earnings are coming and the question will be, what is the impact of tariffs and trades on those earnings and how will they spin it if the earnings come up short so it will be very interesting in the next weekor two to see how that plays out berns, should a rate cut be priced into the market should it be considered a foregone conclusion based on that strong jobs report we got earlier today . I think its very clear the way equities are trading, and it to some degree reaffirms the movement that weve had in recent weeks have been very binary, risk on and risk off based on trade policy. And when you consider the fact that we had a very strong jobs report, unemployment is near the lowest its been in 15 years, stocks are at alltime highs or near alltime highs, and it suggests that maybe we shouldnt expect one in july that said, we believe that one the two rate cuts at some point in this year, perhaps in december and january are still likely, based on the feds desire to reverse any inversion in the yield curve and the fact that you have imbalances with respect to low rates elsewhere. And what really matters for Equity Investors is not necessarily what fed does, but what they do relative to what is desired or expected by the markets, which suggests if a kid goes to the fair and they think theyre going to get three scoops of ice cream and only get two scoops of ice cream, theres probably going to be a little bit of a tantrum and based on that, we suggest that stocks arent terribly cheap, it could be a little bit more volatile at some point later this year. So one of the things were suggesting to our clients is maybe take a little bit of a barbell approach, whereby get a little bit of your offense through not necessarily through growthier areas, but through disrupters things like mobile payments or Cloud Computing. And try to find, you know, cheaper ways to play defense maybe not in the bond proxies, but maybe in the Defense Sector or perhaps health care that said, gordon, how important for the bulls was it on wednesday that we saw the rally broaden out somewhat we saw all three of the major indices close at records what are the key levels youre watching for whether this can go higher well, you know, to the point that was just made, obviously, everybody is keeping an eye on the fed and this labor market. But the question really becomes, are we just all about entitlement right now . Do we just expect these kind of things regardless of whether theyre needed or theyre warranted . Is this what our society has become and the other part of it, though, is this trumps policy in effect, if other countries, Central Banks are going to support their economies and were not going to do that and now hes going to start trying to flood the fed with people that are going to engage in Economic Warfare, if you will, and really bring the rates into a level that can spur this economy. Is that just the direction were going to be heading . Is it Economic Warfare or is it really just an increase in diversity in terms of the conversation around the feds dual mandate and their policy moving forward well, i think that President Trump plays for keeps. And i think that his attitude is that we are losing on multiple fronts were losing to china. Were losing on some of these other agreements that weve had, whether it be mexico or even canada earlier europe, hes had some contention with not to upset you, wilf i take that stuff to heart, gordon but the fact of the matter is, i think that he believes that the American Voter believes that its all about the economy and he just wants to try to make it, our economy, as strong as it can be, make america great, put americans first, and hes going to use the fed as his bully pulpit to make that happen burns, when weapon look at the next few weeks ahead, were expecting an earnings recession. How much do you think thats going to factor in to rate cuts for the rest of this year and what kind of emphasis are you putting on it . What do you think well see . I think that earnings are expected to be roughly flat for the coming quarter and by and large, i think one of the things thats fascinating is that this has been such a binary risk on, risk off market that you really havent seen Equities Trading on pure fundamentals and corporate fundamentals and so i think thats something that, you know, again, regardless of what earnings do, youre still seeing, you know, equities moved by trade policy, by, you know, what the feds likely to do and so, you know, will that impact what policy ends up Going Forward . We dont think it really with. I think that, you know, if you look at what earnings are doing, you know, investors are willing to pay up more for solid earnings, because it does become a little bit more rare and i think thats one of the reasons why its kind of interesting. Weve seen defensives lead the market upward. Its kind of like youve had the caboose leading the train in recent weeks as weve hit these new records. So some of the places that might be undiscovered and that you might be able to take advantage of Going Forward are some of the more cyclical sectors that have really gone a long way towards pricing in the next downturn all right gentlemen, well leave it there. Burns and gordon, thank you for joining us thank you still to come here on squawk alley, big tech under fire well discuss that next. Then, chips on pace for their third winning week in a row. The names you should be looking to add to your portfolio and later, in just a few minutes, fed nominee judy shelton sits down with Rick Santelli for a special Santelli Exchange you dont want to miss that. Squawk alley back in a couple minutes. Welcome back to squawk alley. Some negative headlines abroad for big tech from higher taxes to antitrust investigations, Global Regulators not holding back on the likes of facebook, amazon, google, and other Silicon Valley power players joining us now to discuss this, New York Times tech reporter, mike isaac, also author of the upcoming book the rise and fall of uber. I cannot wait to read that one weve also got wilf research analyst, steve malanovic steve, lets start with you. Share prices of especially the f. A. A. N. G. S suggests that investors dont really see this regulation, the antitrust scrutiny as a serious threat are they complacent or do you think well see some real action in the second half of this year . Yeah, no, its a great question i think, look, all of the share prices of these companies are really propped up by the idea that the margins can stay super high at least, you know, look at facebook, which has really healthy margins or apple or, you know, pretty much any of the Big Tech Companies that dont pay really any significant amount of taxes overseas but imagine, you know, a tax on revenue, which is what theyre sort of floating in france right now, would be, you know, really somethings actually to feel in terms of paying taxes for the first time in a significant way overseas so, right now, it sort of suggests that they dont feel like its a real possibility or at least investors dont see it as a real possibility, but this could be an actual big expense if it actually makes progress. Right now, steve, mike brings up a really good point there the tech giants have faced taxes in the past, but not a tax tied to revenue so would that really be a game changer . And you know, weve got a slew of headlines from europe this morning. How different is this from what weve heard and seen in the past well, lets think about the motivation here. Probably the biggest trend in tech over the last ten years has been the rise of platform companies. Platform companies are the top seven market caps in tech. And were talking about the f. A. A. N. G. Names, but also alibaba and ten cent where are these located . Theyre located in the u. S. And asia europe has none, nada, nil so theyre basically at a Real Technology competitive disadvantage right now this doesnt change any of that. But i can see why they want to get their pound of flesh theyre saying that these Digital Companies take about a 10 tax rate compared to 23 for traditional companies. They want to close that gap. Youve also had the g20 talk about a twopillar approach. One pillar is making Companies Pay taxes where they sell their goods and services and the second is to have at least a global minimum tax so i would say its very real, but it doesnt really change the Competitive Dynamics over time steve, when you look at what europe has done in the tech space already, whether its gdp or various fines regardingteenthtrust violations, its led to a brief blip on the share prices and then theyve continued higher. Do you think this is different, that potential annual taxes could really hurt them or is it small fry for these tech stocks . Well, there could be a onetime dislocation obviously, higher tax rates mean lower cash flow and potentially lower stocks but again, it doesnt change the Competitive Dynamics there, you probably have a bigger threat from the u. S. Justice department and the ftc going after potentially some of these big names and talking about competition in a different way. Historically, europes talked about competition in the market. The u. S. Has talked about harm to consumers but the justice departments now starting to talk about, well, its not just, you know, okay, your prices are low, its, do we really have a competitive market so i dont think whats happening in europe, other than a shortterm dislocation will have a lot of impact i think whats going on in the u. S. , longer term, could be more interesting. Now, i want to bring in tom standage of the economist into the conversation picking up from that, how real do you think it is that well see more taxes or broader relations here in the u. S. Of course, the tech backlash, a very bipartisan issue here with Elizabeth Warren calling for the breakup of tech companies. But at the same time, in many ways, it feels like, you know, Tech Services have never been more convenient or cheaper for consumers. No, thats true but i think we are going to see quite a lot of sort of europeanstyle relation. Obviously, california has this new set of rules coming in, in january of 2020. And thats basically a copy and paste of gdpr from europe. And i wouldnt be surprised at all if we see under any future democratic administration, a gdprstyle or introduced across you know, at a federal level. John, im glad you just brought up california, because, also, getting away from the f. A. A. N. G. S, were seeing relation that could change the picture in terms of lyft and uber and how they classify their drivers. Where do you think thats going and how critical is that for those companies . What we see with all of these companies is that theyre basically taking advantage of regulatory gray areas. We saw the same with airbnb as well and ultimately, they have to they get away with it for a while, but ultimately, we see this happening all around the world with uber and lyft and we saw it with airbnb for a while in fact, its in their interest for there to be clear rules eventually and those rules do end up not being quite as strict as the rules that govern the incumbents that they pushed aside so theres some sort of essentially compromise going on here you barge into a gray area, and instead of there being no rules all, you end with slightly lighter relation and i think thats where were ending up. Mike, it seems that theres so much broad base and it doesnt matter which Political Parties you look at, but so much broad base consensus that the Big Tech Companies need to be under more relation. Whether its in the uk or here in the u. S. Or in europe, and maybe this is a crazy question to ask, but do you think we could see a situation where all of these different regions, Different Countries come together and map out rules of the road more broadly for big tech you know, its really interesting. Because weve seen facebook get hammered for the past year, year and a half in particular and one of Mark Zuckerbergs strategies has actually been calling for exactly what you said, which is sort of a broader regulation of all Internet Companies and really all tech companies. I think part of its mostly, you know, strategic to deflect the specific intention on facebook, which they would love to sort of spread that pain around a little bit. But i do think the point that he makes is interesting, because hes sort of seeing further down the road, you know, tech has had maybe a good 15 to 20 years of no regulation and real oversight as to what it looks like so if they can insert themselves now into the conversation, it sort of goes to what toms point is, which is, look, youre not going to get the ultrastrict version of what these rules are going to look like and youre not going to get the sort of come what what i version of selfgovernance, so you get something in the middle that everyone can live with after a while. I would like to point out that also facebook its worth pointing out that facebook benefits from these sorts of rules. Gdpr entrenches the position of the big companies, because they are betterplaced to cope with a big regulatory burden. Weve seen the same in other sectors as well, like banking, where its important that we have regulations, but that actually makes it harder for new companies to come along and displace the incumbent so theyre at the table guys, thank you very much for being with us on a friday, on a holiday week tom, mike, and steve thanks for having me. The dow, s p, and nasdaq all coming off of record closes wednesday. Can they erase this mornings losses and make more history this afternoon here are the names that are trying to make that happen for the s p today. Zions, jeffries, and m t bank. Financial names. Weve a lot more squawk alley straight ahead welcome back to squawk alley. President trump making some comments on the fed and jobs and more, just moments ago at the white house. Lets listen in. We had great numbers this morning. I think it was 224,000 jobs. Those were really unexpectedly good and our countries continues to do really well really, reallywell so were very happy about it i think were going to, uh, were going to be breaking records. If we had a fed that would lower Interest Rates, we would be like a rocket ship. But were paying a lot of interest and its unnecessary, but we dont have a fed that knows what theyre doing, so its one of those little things. But if we had a fed that would lower rates, you would have a rocket ship. When obama president obama, was here, he paid close to zero Interest Rates im paying real interest and yet our economy is much better than its ever been from election day, were over 50 increase and weve made trillions and trillions of dollars, with a t, trillions so were doing very well but last night was spectacular yes . [ inaudible question ] yeah, i would love rural broadband. Were working on it and i would love the democrats come back and talk about infrastructure, talk about drug pricing were going to be announcing something very shortly, a favorite nations clause. As you know for years and years, other nations paid less for drugs than we do sometimes by 60, 70 were going to be and were working on it right now, were aeznat law. aeznat where we pay whatever the lowest nations price is. Why should other nations, like canada, but why should other nations pay much less than us . Theyve taken advantage of the system for a long time, pharma so were working on right now a favored nations clause, so that whatever the lowest nation is, anywhere in the world, or company, but the lowest nation or company, then what happens is, we will pay that amount, and thats being worked on right now. Were going to do it in the form of an executive order. All right well, those are some of the comments from President Trump just a short while ago, in front of the white house he is en route today to his Bedminster Golf Club in new jersey first trip there this weekend since the start of the year, but again, talking about the fed and his desire for more, even more accommodative fed, saying that if they lowered rates, we would be like a quote unquote rocket ship lets bring in ylan mui now for more on some of these comments from President Trump ylan reporter yeah, morgan, i think what you heard there was trump once again placing responsibility for the economic expansion at the foot of the fed. Truth be told, the fed also sees that as part of their responsibility, as well. We just reported on the feds Monetary Policy report, in which it said that it plans to act as necessary in order to support the expansion. So the fed does recognize its role here. I think the fed just doesnt want to be the only game in town and the reality here is that right now, this administration doesnt have a fiscal policy that they can point to, that would provide that same jet fuel that perhaps lower Interest Rates might for the fed. It wont have the same type of economic boost that the tax cuts and jobs act had, so right now, President Trump is looking for a way to ensure that the economy remains strong through 2020, when voters will be assessing how they feel, where things are going, and that being a proxy for who they vote for at the ballot box ylan, thank you very much for that no real move in the u. S. Markets. Were down 0. 6 or so for each of the major averages. Time, though, for the european close, its a few minutes away and seema mody joins us with a breakdown of whats happening across the pond. Seema . And wilf, we are lower across europe we also hadfactory orders. And theres hexagon cutting its outlook citing trade tensions. And that stock is down over 11 . Bmw also in search for a new ceo after Harold Krueger announced that he is stepping down shares are lower, just fractionally, though for the major markets, though, italy is the outperformer this week and over the past two weeks after the Italian Government agreed to lower its budget deficit over the next two years through spending cuts, alleviating fears of a standoff between rome and brussels. Rising debt levels has made italy a bigger target of the european commission, which has been calling for the countrys Coalition Government to push its deficit down worth noting that some of the major banks in italy, unicredit and tesla san paolo, theyre up today but still down about 6. 8 from the end of last year. Italian debt also rallying, the tenyear in italy at its lowest level since 2017 but the hard work is not over yet, guys. Italy has now to submit a new draft budget in october. Back to you. Seema, thank you. Lets get over to sue herrera now for a news update. Hey, sue hello, morgan hello, everyone. Heres whats happening at this hour a night of fun and fourth of July Fireworks turned into chaos on Chicagos Navy Pier a stabbing just outside the securityscreened area created a stampede of those trying to flee 16 people were injured in that incident a man who accused kevin spacey of groping him as a teenager in 2016 has now voluntarily dropped his civil lawsuit against the star spacey still faces criminal charges in connection with the incident and has pled not guilty mad magazine is saying goodbye after 67 years in publication. The onetime pop culture powerhouse, which was known for its edgy satire, will print its last issue next month. And tomorrow will be a big day for baby archie. The newest member of the royal family is expected to be christened tomorrow at a private ceremony in Windsor Castle that is the news update this hour guys, ill send it back downtown to you deirdre . Sue, thank you very much for that after the break, the interview that you have been waiting for. Ricks sitdown with fed nominee judy shelton dont go anywhere. Well be back in less than three minutes. Rting military families. When i have a child deployed, having a Reliable Network means everything. So, when i get a video chat, and i get to see their face, its the best thing in the world. And ive earned every one of these gray hairs. Military moms, we serve too. vo the network more people rely on, gives you more. Like military plans with a special price on unlimited, 100 per line, and big savings on our best phones when you switch. Thats verizon. Lets get over now to the cme for a special Santelli Exchange rick well, thank you i would like to welcome dr. Judy shelton. Dr. Judy and have spoken many times, but this is the first time im speaking with her in the capacity of the president , nominated to be a potential fed governor to that end, dr. Judy, you saw todays jobs report. Maybe you can give me some thoughts it was definitely a bit stronger than many had hoped for and maybe it changes the philosophy about what to expect from the Federal Reserve . Well, first i want to compliment you, rick, because you called it. And coming in at 224, that was fantastic. I think it shows that the progrowth economic agenda under the administration is working. I think it shows that economies really do respond to positive policies that help create a better environment for businesses to be successful so they can higher people we see gains in productivity that justifies the gains in wages, which is fantastic. And its paying off. And the numbers today are testimony to that. Now, having said that, and i agree with much of what you said, but i also see that you are advocating at least the last several pieces ive either read about you or interviews with you, that you think an ease is in the cards, so to speak, and you can correct me in your answer if im wrong. My answer is, i see all the things you see and i hope we have sound money policies and maybe we dont blink too early with regards to our insurance hikes. We had nine of them, bringing us to the current level, 2. 25 to 2. 5. So how does lowering rates dovetail with your historic stance on sound money . Well, i think what weve seen is Central Banks have been engaged in policies that have created a disconnect between the real economy and the interaction between Central Banks and financial markets. So my concern is that now that were getting things going the right way, because of genuine impacthaving policies that are raising the growth potential, i dont want to cut liquidity to that i think that markets are set up, this is why we see a negative reaction to what is really good news, for the idea that theyve been taught to believe in and when you consider that more than half of american households are invested through mutual funds or Pension Funds in this market, i dont want the fed to pull the rug out from under them, by taking a position that is not conducive to further providing the liquidity for this growing economy. We have two scary things that, you know, i look at the international aspects. One is this yield curve, where you have the Federal Reserve paying interest on excess reserves, the fed funds rate of 2. 35 and then you have a tenyear treasury at, what, 2, even under 2, it has been. 205, just traded. And that practice is very damaging to the incentive to banks to provide Financial Capital to small businesses. They are being paid for leaving money sitting in a deposit account at the Federal Reserve now, dr. Judy, let me stop you, dr. Judy, let me stop you right there. I agree. So really the issue is, i just dont see that lowering Interest Rates over a quarter or a half a point over a couple of different meetings, is that going to address liquidity . I look overseas and there are big spoonfuls of liquidity, negative Interest Rates, 13 trillion of them and they dont seem to ever seem to make out the Promised Land where they want policy to go i dont understand why a quarter or a half point is going to make a difference, but even more to the point than that, everything that you are bringing up in my opinion means, if we start giving up our quarterpoint tightenings, those nine i referenced, doesnt that almost assure that if theres really the type ofcrisis that demands the attention of our central bank, does that relegate us to go in a negative rate when we start using up those quarterpoint tightenings as tools right now . Well, i think its hard to normalize, which is what you would be expecting when the mechanism for doing so is creating this disincentive and when were paying the banks not to invest, including foreignowned banks, we have a problem in that we could be punished for our successful reforms, because theyre not doing it in europe theyre not making the hard policy choices that bring about Authentic Growth and to me, its unfair to punish our successful producers when we can recognize that europe is headed toward additional stimulus measures, which is code for saying, theyre prepared to devalue the euro, and lets say the euro were to fall against the dollar but if you lower rates on a relatively Strong Economy but if we lower rates at a time and i understand, you have the free get out of jail card, inflation. Yes, its underperforming. But once again, i ask the question, does a quarter or a half point really make a difference weve been under the inflation targets for the most part since the volcker years. So the real question then becomes, if we lower to make the dollar less strong, arent we as guilty as that with faulty policy well, i think we need to confront whats happening. I think central bankers put on these blinders and we play by these marquist queensbur burques and its clear that Interest Rate policies do evhave an impat on currencies and to pretend that they dont is a mistake this is the challenge for central banking. How do you have a level monetary Playing Field that allows the rules to be july held. And i think that we cant ignore the impact of differential Interest Rate policies on that currency relationship. Normally, you would raise, if you had inflation on the horizon, we dont have that. And so i dont want to punish the u. S. Economy, which is flourishing, by doing the right things, by making us vulnerable. I dont see where the punishment is coming in, i guess. Wheres the punishment where can i look up and say, oh, my god, quarter or 50 basis points less, and all of a sudden, this area is going to light up well get a little nitrous boost, but were down 128 in the dow with a strong number i think the equity markets is getting used to the fact that maybe a good economy is so bad well, it would be nice if we didnt have a perverse reaction to good news but we see that we do. The problem is, you reap what you sew. And so, central bank easing has created this environment and i dont think markets are wrong in questioning the yield curve, because you have 13 trillion in negative yield debt out there. So its almost an impossible situation to be having this shortterm fed funds rate and now this impossible situation in europe, dr. Judy, is going to have a new leader that tries to paint a palatable exit so theres going to be a handoff from mario draghi, potentially, its not set in stone, to christine lagarde, imf chair thoughts, not on the nature of the job, we know what that is, but it certainly seems as though Christine Lagardes more of a politician, former finance chief with regard to france. Is this the type of political arrangement that you think is going to find a way to grow europe again and get over their structural issues . Or is this just going to be more negative rates and people only buying sovereign securities of the sovereign economies, because some knucklehead behind him is willing to buy it at a higher price thats more negative in yield . Well, im afraid i see the latter scenario. And its interesting, for all of the accusations that people make around the world that somehow the u. S. Has abandoned the rulesbased Global Trading order, that Global Trading order really traces back to 1944 and an agreement by 44 nations that they would not devalue their currencies that we would have a Stable Currency platform, so that you could really uphold free trade and that capital would flow to its best use to me, the irony today is that the imf often advocates its recipient countries that they should devalue their currencies. That they could then be more competitive. But i think competitive depreciation is not competitive. Its cheating. Not competing. Because it gives you an advantage against your rivals and i believe in competition, but i dont think its fair that through just monetary sleight of hand, you get a price advantage. Thats not fair to the whole dr. Judy, im going to let you in on a little secret. Over the next couple of weeks, my guess is, youre going to get hit hardest with respect to conversations regarding whether youre the right nominee or not, because you have advocated in the past strong money, which advocated maybe more of the Gold Standard now, that ended in 71, but maybe you could explain to the audience as i see bitcoin since april over triple its price, as i see gold going up and down, its pretty plain to see that the world is desperate for something that is a better storage of money than copy machines that have pictures of president s or nice colors on them and theyre called money i think that when i hear snickers, when we talk about convertible bonds into gold for various countries, the fact that there are snickers at all really depresses me nobody seems openminded to protect whats in our wallets. Can you finish out telling me why that potential should be considered well, rick, what i would want to bring to this position is the willingness to examine the fundamental question that i think is at the heart of what you just sketched out. Money is meant to serve as a reliable measure its really the key to free market capitalism. You have to send signals about prices by having clarity and money is supposed to be that unit of account that provides it its supposed to be a dependable store of value its not supposed to be just another government policy instrument to try to engineer outcomes and what weve seen is Central Banks trying too hard to do just that and theyve engineered us right into a negative rate scenario, which completely undermines the idea of having faith in the future, which is the very virtue of capitalism. That people have a positive outlook. They think its worth it to sacrifice today to save instead of consuming, to invest that financial seed corn, in the possibility of a greater harvest. And its that kind of financial intermediation that actually creates a higher standard of living that brings opportunity and prosperity thats what we want to foster, not a continuing speculative game that is just played in a 5. 1 trillion daily turnover currency market. Excellent dr. Judy shelton, thanks for an abundance of your time im sure its going to be a wild ride until we get that vote. Hope it turns out in your favor. Wilf, back to you. Rick, thank you very much professor shelton, thank you, always dr. Shelton, excuse me rick, just one final pushback here given her final answer, where does the logic for a rate cut come to match the debasement of the ecb . Listen, i dont see the rationalization for rate cut anywhere to be honest with you and i tried to push on that quite hard i still am not sure that she reconciled sound money with rate cuts at a time where the economy is slower, but certainly not slowed to the point of comparisons with whats going on with other economies, other large developed economies around the world. Yeah. Be careful what you wish for when you see the state of the economy in europe and japan, as well its precisely rick, thank you very much thank you for bringing us that interview. Thank you again to dr. Shelton when we return, its been a 25year run since amazon was founded. What can we expect from the companys next quarter century well discuss. Good day, everyone im Tyler Mathisen in today for scott wapner on the Halftime Report today, are the bulls offside on the fed after todays solid jobs report . Well discuss that one plus, we will debate a serious warning from one top wall street firm, advising investors to get on the sidelines quickly well tell you who it is and why they think that. And where the Investment Committee hit and missed in the last three months. Weve got the Quarterly Report it is all ahead today at noon eastern on the Halftime Report. Deirdre . Tyler, looking forward to it now, today is a birthday for amazon, turning 25 it was on this day back in 1994 that jeff bezos filed the paperwork to create what was originally called cadabra. Now its a household name, amazon the next quarter century, though, is likely to look a little different today today the uks competition regulator says it is reviewing amazons recent investment in deliveroo. Weve been talking about that this morning in amazons case, though, that could complicate its new acquisitive direction that we have seen the company take in recent years the journal points out since 2017, guys, amazon has struck more than 20 billion worth of acquisitions and that is more than its deal volume in all of its previous 23year history thats important, because during the First Quarter century, amazon developed its online store logistics, network and Cloud Computing businesses organically. That is on its own looking at what it wants to disrupt now over the next 25 years, the company has made big outside bets on whole foods, pill pack, ring. This is the way its looking to get into groceries, health care, and smarthomes amazon tried food delivery on its own and failed, a rare fail for amazon now plans to integrate operations is on hold as regulators consider a formal investigation. Amazon facing increased scrutiny in the u. S. , which would complicate future deals here while the first 25 years, guys, were not all smooth sailing for amazon, investors eventually lander the importance of patient. We showed you those returns on the side of the screen investors didnt even care for a very long time that amazon didnt make any profits. Were looking at a much different, more sort of fiscally disciplined amazon these days. Zblifl li i feel like we need some commas to actually properly highlight what the returns on this stock has been. Its pretty crazy to think about this is a company that started at disrupting the started as disrupting the book industry and now has bookstores. Its like whats old is new again and imbued with tech as it expands into these industries. Those successes took a long time, were talking 25 years but the big projects, groceries, it hasnt been smooth sailing even with 14 billion acquisition of whole foods so i think its going to look different as i mentioned, the regulatory landscape looks different as well. So theres going to be challeng challenges. Im interested as you say investors were happy for them not to make profits for a long time is that an outlook today, if uber continued to make losses for as long as amazon did, would its stock be able to survive in the same way amazon has proven 25 years later they created aws from scratch, which is the profit engine we dont know because amazon has delivered quarter after quarter of record profits. If all of a sudden it wanted to have less of an inquisitive strategy, and put money back as it has over the last few decades i wonder what investors would say. Amazons success extraordinary. Putting a price tag on your data, thats what senators asked late last month when they proposed a bipartisan bill that would require big tech like facebook, google and twitter to tell users more about the data they collect and how much its worth. Our next guest is crunching the numbers to find out how to do that joining us sarafin engel thanks for joining us. Thanks for having me. Whats your take on which way the industry is heading and whether we need to see a law like the one proposed by senator warner, to see it enacted . Do you think users will get paid for their data either way . Yeah, i think it will happen. And i think that regulation is pair mound in achieving that goal i think the regulation proposed in the dashboard act is misguided. I think valuing data is a hard task it depends on a company by company basis how that data will be valued. I think any regulations should foster the evolution of a free market for this personal data in order to help customers actually see the real value that their data generates thats where you come in and where data wallet comes in, right . The fact that it is so hard to value data, how do you do that specifically at data wallet . So we focus a little bit more on giving individuals control of their data, so we spend time with companies focussing on how much they would be willing to pay their customers for data the problem is theres a Network Effect that values the data. Youre only able to get value for the data if there are individuals who participate in pooling their data together and sharing it with companies. So we shared the notion that individuals should be in control of the data before montization becomes the focal point. You create data with the companies but you have no idea what that data is and how its being utilized by companies. So we at data wallet think its the foundation for any initiatives to arrive value for your data to have control. Once you have control we can tackle value as the next step. That i believe flows from companies renumerating their customers for Getting Better insights and using these insights to service them better. Its a twostep process and the valuation of the data depends on a company by company basis and we want to allow companies to put a price tag on the data for their customers. What does that look like . How are customers being paid in u. S. Dollar, bitcoin, libra it should be up for them to decide our platform allows you to get paid in any form or passion. You can get credits, an amazon gift card, bitcoin, libra is to be determined. What we want to achieve is put individuals in control over their own data and create a free marketplace where they can decide for what use they want to permission their data and how they want to get paid in return. How do you put consumers in control of their own data . Theres the interactions between consumers and companies and what that generates, but the other piece is security and its hacking and the fact that so many consumers data have been compromised and are out there. So how do you rein that back in . Thats a big issue. And so what data wallet effectively is in its current state is a digital wallet that companies can give you and all the data you create on the companys platform is put into that data wallet so youre able to see what your data is, youre able to control how the company can utilize it, and you can completely delete your data or download a copy of your data, et cetera thats the primary mechanism we put people in control of their data one of the versions were working on and what we believe is the future of the economy, is taking that data wallet and attaching a trusted execution environment. So ultimately you dont need to hand your data over to a company for them to deliver you a service, you can put it in that trusted execution environment, companies can take it out and you can get the same Service Without needing to reveal the underlying data. Thats the big picture version still a little bit out, 1 to 18 months id say thats where we see the setting and the data wallet platform, the piece to get there. Thank you for joining us. Getting a check on where we stand across the major averages. Theyre all lower. Theyre off lows of the morning. The dow is down 120 points higher for the week though were back in a minute welcome back coming up by the way on closing bell today we have a full lineup of guests ready to break down todays big jobs number and what it could mean for the feds upcoming decision. Plus well talk amazons 25th anniversary and the future of retail with toys r us ceo. Were doing the open and the close. Were going full circle today here in this final trading day in the first week of the second half of the year. Holiday week too. You guys are putting in the hours, five hours today. There you go. Allstar team. Joyous five hours thank you both for being here for squawk alley. Lets send it to Tyler Mathisen for the half our top trade this hour rethinking the fed with a big june jobs report, is a rate cut still on the way announcer game changer, a stellar june jobs report may have just altered Investor Expectations of the feds next meeting 26 days away are the bulls offside . Plus a big warning to anyone thinking about putting more money to w