Transcripts For CNBC Squawk 20240704

Incredible month where you saw stocks continue to climb add that to year to date dow up 7. 3 . The s p up 19. 5 the nasdaq is up a whopping 37 . Lets put that in historic context. The year to date, you were talking about the nas ddaq with the best first months since 1975 held on to gains gave some back in the second past of the year up 30 by the end of the year. If you look at the s p, up 19. 5 . That is the best performance since the beginning of 1997. That year, s p up 28 . It ended up 31 . Adding to gains, mike, throughout the things. You look at this and look back the pattern in history is that markets that are consistently strong with five months up in the s p 500 happens in the context of generally continuing uptrends. It is not a fluke. That being said, it has happened eight times in the last decade it happened 40 since 1949 the dow was up 100 points in the last minute of trading yesterday. A lot of stuff that gets done at month end. In general, the market has answered most of the criticism you mentioned it is unbelievable returns. Thats the point to many people, it is unbelievable nasdaq is up 50 s p up 31 from the low in october. If you look at the history of a nonrecession bear market. That is what it looks like right now. The history is the next year with a 30 gain in the s p we have gotten it. It is better than expected. Earnings are better than expected and Government Intervention which is critical inflation has come down faster than the economy has weakened thats the big picture story on what is happening. Over the course of the last couple months, the strength of the markets broadened out. It is not a handful of stocks driving things all that said, valuations are looking on the rich side from six months ago, the expected s p 500 earnings hasnt changed a lot. It dipped and come back a little bit. The point is people are more confident that those earnings are going to come through. Where are we on forward earnings 30 years in terms of the multiple . Yeah. On the nasdaq, 26 s p is 19. 7. It is expensive, but it is not historically completely out of the realm. It is all about next years results. We are looking at 8 gain with s p earnings we will see if it comes through. The psychological effect is people saying im not going to fight it you have oppenheimer saying we get to 4,900 mike wilson. He sort of capitulated. Is this capitulation . This is capitulation on the upside you can make a mistake on the up eventually if it feeds into overconfidence bull markets need bulls to keep going. It is a more even trade now to say from here and this point on, i think a lot of people are on board with the soft landing scenario a lot of people are on board with the bull market you no longer have the skepticism to burn off to get to the higher price. There has been a lot of money moving in. It can continue lets look at the treasury market 10year treasury is yielding 3. 9 the 2year treasury is 4. 9 . On the squawk planner, a busy morning caterpillar and merck and pfizer and uber reporting we have an interview with the ceo of merck and ubers ceo. We will get reports from Electronic Arts and starbucks and amd. Lets talk about the new x sign on the headquarters formerly known as twitter. That sign officially taken down in San Francisco it has drawn criticism from neighbors and city officials and 24 complaints from the building and Inspections Department the flashing lights make it hard for nearby residents to sleep. I see that if i was across the street and that sign put up without a permit the city spokesperson said the Property Owner would be an assessed fees. There was a bruce wayne bat call it was cool from the markets perspective. He must have had a drone fly by to get a nice shot which was used on twitter. We with have talked about ito days in a row. It is worth the permit fees permit fees are worth the marketing with all of us talking about this stuff and at this point, it is a okay, fine well take it down. Were staying in San Francisco. Well stay here. We love you. I thought was fascinating he has been outspoken about california and San Francisco more particularly. We saw during covid how much he was unhappy and kept saying im going to move more and more operations to texas. I would have thought, frankly, he would eventually move x to texas to consolidate and be in one place. He has freemont. He will always have some travel. If you are trying to have your house physically living next door, which he has in austin, to spacex and tesla faber made an interesting point yesterday. He was talking about how elon sets foot in california, he pays in millions in taxes he tries to get out by midnight. People do that in new york city. Same set up. Track how many days you spend. You dont papery per day. It is like new york which is 183 days. He wants to keep it under that he is trying to stay under that number. Yeah. Presumably. I would, too, if it were millions no place i want to be. It is only costing you millions of dollars a day if he is over the limit. Take him to the next threshold. We have more coming up on squawk box. The ceo of bp is joining us to talk about the Energy Giants quarter. And uber is set to report in the first on cnbc interview with ceo Dara Khosrowshahi. You are watching squawk box and this is cnbc welcome back to squawk box. Bp reporting a drop in the Second Quarter the company boosted dividend by 10 and would repurchase dividends. We welcome in Bernard Looney to the show thank you, andrew a different picture the last time we spoke. We were talking about windwfall tax at the time. The world switches fast. It is interesting to see the change in prices and what it means to profits and how you balance it on the dividend and repurchase side. It was a good quarter, andrew we grew 3 overall we drove production costs down by 9 . We grew other parts of the business as well w we tripled our power into the Ev Charging Network and convenience business at 7 . A lot of growth and resulted in the announcement you have seen today with the confidence of 11. 5 billion buyback which is good following 60 of cash to buybacks also over the last four quarters, andrew, we bought back 9 of the Company Shares we announced a 10 dividend rise as you said. It is about confidence and the business is forperforming well. Bernard, you increased the dividend by 10 , but paying out the same amount which is good to control the capital . Thats right, becky hi to you. We bought back 50 of shares since we started the program 21 months ago as we look back over the last four quarters, 10 higher allows us to increase by 10 and maintain the absolute burden flat it is a good way to manage and return profits to our shareholders the same through buybacks with 60 of cash flow to dividend to shareholders and hence the 1. 5 billion this quarter. Help us with something you probably have seen the critique or criticism and not just bp, but true of shell and other Oil Companies around the pledges made on Carbon Emissions and the like and transition work that you and a number of other Oil Companies have been on and what appears to be a scale back do you think that is fair . Were not scaling back. If anything, were propelling forward. Andrew, our strategy is very simply defined by the phrase and, not or. We must believe in the system. We put 8 billion more in the oil and gas system we grew oil and Gas Production 3 in the first half at same time, not or we accelerate in the Energy Transition in 2019, we spent 3 of capital outside of oil and gas three years later in 2022, that number was up to 30 3 to 30 in three years we are leaning in and in february, we would put 8 billion in the Energy Transition it is an and strategy. We believe that is what the world needs. Tell me if this is wrong. My understanding is there was an original pledge on emissions cut by 35 to 40 lower by the end of the decade of 2030. In february, you switched that target to 20 to 30 the actual numbers in question we would reduce production by 40 . As a result of the concerns of Energy Security in the world and every government in the world pretty much where we work wanting to ensure it has security of supply and we updated to 25 rather than 40 that is true at the same time, we said we would put 8 billion more in hydro carbons, including the United States. We grew production in the onshore u. S. Business by 9 in the first half we brought on in phase two four wells producing 70,000 barrels a day. At the same time, we would put 8 billion in the transition in addition to what we are doing. That is the nexus. Ill blow your mind with the next question. You will be surprised im going to say what im about to say i was having a conversation with an Energy Executive last week who may have convinced me of something. You probably would disagree with what he said he said, andrew, maybe this whole thing is a mistake this idea of pushing Energy Companies to try to reduce the amount they will be emitting clearly what you can do in Carbon Capture is important but they are investing in the new technology shouldnt it be governments and Capital Venture firms with a different profile shouldnt they invest in clean tech and other things and the Energy Companies should be the 23Energy Companies. We mixed the message so much this person was comparing it to the pharmaceutical industry. A long time doing r d and now pharmaceutical Companies Market drugs and have sales people for drugs drugs. We now have a Venture Capital community which supports to build the new drugs and developments and then p when they get to maturity, the Pharmaceutical Company buys it that is a fascinating way to think about all this look, let me tell you what we believe and what i believe here at bp. That is the world needs rapid Energy Transition. I think that is true at the same time, that transition needs to be orderly by orderly, we need to match the supply with the demand with the energy we saw last year, andrew, with a mismatch we lost 3 of the worlds gas supply and prices went up sevenfold. 700 what happens when prices sfrise countries turn to coal line germany and south korea and japan. We must make sure the transition is orderly which means we invest in todays system. As to the transition, we are investing in growth businesses in the transition where we have things and skills and capabilities to add. Let me give you an example e vork Ev Charging Infrastructure we fuel your car that way. Tomorrow, we will se sell electrons 550 Million People live within 20 minutes of a bp site. The use of evs is on the increase from the low base, but on the increase. Of course, we will use the installed assets we have to leverage that growth engine. We sold three times as much power in the first half of the year as we did in the first half of last year the same is true on bioenergy enormous enormous advantage here. We have a large trading business here we build the products next to the refineries which will be cheaper and sell in the 700 airports with every airline in the world we have relationships with we are growing in growth sectors with competitive advanadvantage. Thank you for joining us. We will talk to you soon thank you when we come back, it is jobs week in america we get the latest from Small Business Employment Data from paychex after this break. And Chris Christie will come on ua bsqwkox to talk about his race for the White House Well be right back. Its an entire trading experience. With innovation that lets you customize interfaces, charts and orders to your style of trading. Personalized education to expand your perspective. And a dedicated trade desk of expertlevel support. That will push you to be even better. And just might change how you trade forever. Because once you experience thinkorswim® by Td Ameritrade theres no going back. This is cynthia suarez, cfo of gogo foodco. , an Online Food Delivery service. Business was steady, until. Gogofoodco. Go check it out. Whaatt . overnight, users tripled. Which meant hiring 20 new employees and buying 20 new laptops. So she used her American Express business card, which gives her more membership rewards points on her business purchases. Somebody ordered some laptops . Cynthia suarez. Cfo. Mvp. Built for cynthias business. Built for your business. Amex business. I remember being on aau trips, high school games. My mom would always say, you need to fuel the body and you need salt. Im like, why do i need salt . Like, who is going to do that . She literally would make me rip open a pack of salt, pour it in my hand, and i would, like, lick my hand. Sure enough, i would always be the kid not cramping, i would always be the kid energized, ready to go. Fast forward 20 years and i go from eating salt out of my palm to a drinking lmnt. Announcer squawk ceo call is sponsored by Truist Securities experience expertise and execution. Paychex is out with the employment report for july joining us is john gibson. The paychex ceo. John, you have good news in what you are seeing the example we have been thinking when it comes to the soft landing wage increase is coming down, but that is not impacting jobs market overall what did you find . Thanks, becky great to be with you you know, i feel like im a little bit of a broken record. I have been coming on the show the last year and seeing Wage Inflation moderating and no signs of recession i think that story continues we are seeing wages go down without real job losses and interestingly enough, fed chair powell stated the same thing last week. In july, what we saw for the First Time Since 2021, wage growth fell below 4 and we continue to see a strong Small Business job index we are where we were at the start of january below 4 for the first time barely 3. 95 . That is still implying hotter than inflation than the fed can tolerate no doubt about that the other thing i kept pointing to is what we track is Weekly Earnings growth factor which looks at where that is heading for five consecutive months have been below 4 . We continue to see that number going down and when you also dig under the wage data, becky, there is still something going on in leisure and hospitality. It has been dragging down the index the last three months. That is a supply issue again we are seeing a supply issue Wage Inflation were actually seeing in the index is coming from the leisure and hospitality sector Wage Inflation there was 5 . When i told you about the leading indicator we follow popped to 6. 5 we still have a Labor Participation and labor supply problem particularly in the leisure and hospitality sector you think anything will happen to get more people back into the work force . Well, you know, there are signs of hope. We are starting to see reports that ive read and were seeing it and starting to see women get back in the work force particularly in the prime age. Prime age workers are actually getting back to even higher than prepandemic levels. It is really not keeping up with the 55 plus going down i think on the macro level as we look at the retirement of the baby boom generation, that is something both employers will have to look at and how to create more Flexible Work vie environments to keep people in the work force and Government Officials have to look for ways to attract worker into the active work force. How do you break this down geographically which parts of the country are strongest and weakest . This story has been going on since the start of the pandemic. The south is the strongest it ebbs and flows and continus strong in the south. New york and northeast and west coast continue to be the areas that continue to drag on the index. John, i want to thank you for your time. Becky, great to be with you be well. See you soon. More coming up on squawk box. Caterpillar closed at an alltime high. Look at it 263 we will bring you the results straight ahead plus, we get Quarterly Results from pfizer and merck. We have an exclusive inafter v after view interview with merck ceo coming up. As we head to break, look at the s p 500 winners and losers announcer winners and losers is sponsored by state street global advisers. The biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. It still does. What can you do with spy . 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Were a fiduciary, obligated to act in our clients best interest. other money manager so when do you make more money, only when your clients make more money . Fisher Investments yep. We do better when our clients do better. At Fisher Investments, were clearly different. Good morning welcome back to squawk box live from the Nasdaq Market site in times square. Checking the futures backing off after the modest lateday rally on the dow. We have caterpillar earnings coming out the numbers are significantly better than the street expected. You are talking adjusted earnings per share of 5. 55 against the street looking for 4. 58. Revenue beating by a pretty wide margin 17. 3 billion against the 16. 5 billion the street was anticipating comments coming from the company. The chairman and ceo saying this reflects healthy demand and achieving double digit top line growth and record profit per share and generating strong Free Cash Flow. Caterpillar shares, if you are watching, the best dow component for june up by 7 for the month of july out performing the broader markets there. That really makes up for what they saw at the beginning of the year if you are looking for the stock year to date, up 11 it did have a few rough months going through this all the while, strong numbers coming in. Investors were thinking what would happen next. Is this as good as it gets china with weakness there. Incredibly Strong Demand here especially with construction and you can expect that to continue with the infrastructure bill exactly construction commercial boom is a strong industrial. You have a lot of people anticipating a broader recession at some point not too far in the future what do you pay for caterpillar ahead of that . The stock has made up ground the last couple months we will see what august brings the ceo will join squawk on the dis street in the 9 00 hour. And merck is coming in with a loss of 2. 06 per share. Revenue coming in over 15 billion. Beating that estimate of 14. 5 billion. Revenue from keytruva. The stock off 5 cents. The company did take a loss of 4. 02 a share on the acquisition of prometheus. The ceo robert davis will join us here on squawk box coming up. Joining us to talk about the earnings season is sylvia jablonski. Good morning, sylvia we have the beating with the earnings ceestimates. Mixed reaction with the agregate good morning, mike. It has been a rally in the first half of the year that is on pace to continue p if y continue if you look at the first halves if you look at the index rallying by an average of 23 . The rally can continue this is a shaky rally. I think a lot of investors missed out and came back in and caught the tail end and popped out with the fears of the recession and the fed rising 11 times. The corporate earnings are proving otherwise. You have caterpillar reporting today stellar earnings that is a sensitive name that tells me the economy is on good steady ground and consumers are spending i think we have a shot to continue into the end of the year with a rally. It is fascinating in the last couple weeks where i would auargu a lot of the bearish arguments are cast aside by the continuing rally. People were worried about the debt ceiling deal and they have to issue so much debt and things will surge that will fall by the wayside. Inflation is on the downswing, but is that a problem for corporate Revenue Growth and margins down the road . I wonder if that is the next challenge. That will be the next fear that will come into the market for sure there is a sense of Pricing Power with inflation and people believe inflation is bad on the whole. Pricing power wise helps corporate america. What will replace that Pricing Power first, pricing is not gos going to come down what is replacing that is the money on the sidelines you have savings of trillions and 5 money market rates people are invested in. Once that falls to the side and people come back to the market, that liquidity picture is what keeps us Going Forward although, i would say were at record Money Market Fund assets, but it is not huge compared to the market cap of equities like 15 years ago i want to get to a little bit of the flavor of the rally recently in terms of the aggressive parts of the markets running i know your etfs would be in the category of Aggressive Growth or meme stock etf or cryptocurrency related. A lot of stocks rallying really hard is that something you feel is Risk Appetite returning to normal or should we be concerned about the froth . Tesla is rallying because of the massive Global Growth from the makers a. I. And Machine Learning has been all the rage, but also something that will contribute to top andies as we globalize a make supply chains more efficient whether it is merck or pfizer with the drugs there. You have to pick your stocks crypto meme stocks is appetite if you look at growth and innovation in sectors likely here to stay for the next decade like electric vehicles and a. I. And Machine Learning, i thine o potential for the tech generals and names leading the market now. What then is on your list of things that we now legitimately be concerned about we do have yields which inched higher and oil is on the climb again. Maybe it will put pressure on inflation. It bring the fed equation where they settle with shortterm rates back into the discussion what worries me and what could be a potential head wwind for the market is the fed being the wild card. If we get more rate hikes than we anticipate, that will stall growth for the economy i think geopolitical issues are always out there and we saw that with russia and ukraine some time ago tensions with china and where that lands on trade agreements and things like this will impact big tech and Semiconductor Companies and future innovation and trade revenues for the u. S those are key factors we are looking at here. I know you were talking about the innovation centric part of the market where do overall valuations place us in terms of what to expect from here the s p is up 30 off the lows and pushing 20 times forward earnings all of the major indices have rallied. What is good about the rally and you have mentioned it before is you have starting to see participation in the market. As long as earnings come through and we see the slow and steady growth across various sectors outside of tech and semiconductors and you see what can continue to pump the gas for those things which is tech and innovation and a. I. And Machine Learning and cloud and cybersecurity and the way we are transforming our lives with technology there is room to run on valuations, but it is high val auations have been high for some time and the tech generals continue to fperform. They are coming in with ad spend and bottom line revenue from the investments in a. I. And increase of corporate spending. It is certainly true that the part of the market is not really screened out as cheap for a long time sylvia, thank you. Thank you coming up, we have more earnings on the docket this morning. Waiting to hear from pfizer and uber that is expected in the next 20 minutes. We have an exclusive interview with the merck ceo robert davis. Narrower than expected loss and revenue better than anticipated and raising guidance for the year we will talk to him about these issues andrew will join us live from uber headquarters with the ceo Dara Khosrowshahi. The first on cnbc interview. Well be right back. vo verizon Small Business days are coming. From august 7th to the 13th. Now is the time to partner with our experts. Get started today with verizon business. Its your business. Its your verizon. Power e trades easytouse tools, like dynamic charting and riskreward analysis help make trading feel effortless. And its customizable scans with social sentiment help you find and unlock opportunities in the market. E trade from Morgan Stanley. With powerful, easytouse tools, power e trade makes complex trading easier. React to fastmoving markets with dynamic charting and a futures ladder that lets you place, flatten, or reverse orders so you wont miss an opportunity. E trade from Morgan Stanley from big cities, to small towns, and on main streets across the us, youll find pnc bank. Helping businesses both large and small, communities and the people who live and work there grow and thrive. Were proud to call these places home too. Theyre where we put down roots, and where together, we work to help move everyones financial goals forward. Pnc bank. Welcome back being lets look at the equities for the first day of august. This is not the positivity we screen year to date. Dow futures are down 65. S p down 9 nasdaq off 36. Dont get too caught up in this. If you look at the year to date numbers, they are impressive the nasdaq so far year to date up by 37 . Actually more. 37. 1 . That is the best performance for the nasdaq since back to 1975 when you talk about the first rec seven months for the s p, that is the best performance there and best since 19 1997 jetblue shares is tumbling a loss of 20 cents to break even compared to the street of the 40 cents profit the guidance is below what the street is looking for. The street is looking for 78 cents. The stock is off 7 . Phil lebeau will join us at the top of the hour. Maybe they need to make investments to shore up systems not up to snuff. Similar more southwest. Pfizer just reported adjusted 67 cents a share. That is 10 cents better than the street estimate. That is on revenue of 12 12. 7 p billion. Thats was lower even the 13. 276 billion. The company p is lowering the revenue guidance on the adjusted earnings for the rest of the Year Revenue Guidance now at 67 tt to 70 billion 67 cents a share for the latest quarter with estimates cut down significantly. Six months ago was 81. Downgraded expectations and a beat and positive reaction big pharma is a laggard group. It is a concern with the government negotiating we will get a chance to talk about this in a minute coming up, we will talk about that with merck ceo robert davis joining us in the interview. That stock up after the narrowly expected loss and full year guidance dont miss former governor Chris Christie le ivon set to talk about the race for the white house. Squawk box will be right back. Joining us to break it down is rob daveice the Company Reported a loss of 2. 06, a smaller loss than anticipated, and thats because of acquisition costs and we can talk about that in a moment. If we strip that out, we just mentioned oncology and vaccines, and thats keytruda that was a big driver this time yes, we had a really great quarter. I could not be more proud of how the team is continuing to execute. What you really see, as you pointed out, was long sustained underlining growth, and it was driven by oncology and vaccines, and the guard sill franchise in vaccines and you can used for Breast Cancer what you are talking about, that has been driving the growth in the United States this year and last year, and its launching outside the United States, particularly in europe thats an important part of what is driving tkpwrau taouda. You are seeing us move to earlier stages of cancer, which is a big push for us, because as we do that we can start to talk about cures for cancer if you can catch the disease early enough thats expanding across a broader tumor range, and there are multiple different tumors, and you mentioned the breast and continuing to strength among cancer, melanoma, carcinoma, just to name a few lets talk about the acquisition, and thats the reason for the loss reporting in shares, and this company does a lot to immune over reactions and trying to address those issues, and a lot of those are early stage and when do you anticipate a pipeline up and running there . As we look, its across a broad swath of autoimmune disease. We are continuing to progress and starting to expect new studies this year in the fourth quarter. You are looking with benefits coming as you look to the 25, 26, 27 timeframe as the benefit of what that drug can be we will see both crohns and ul ul ul ulcer kau lightious, and these are devastating diseases we hopefully will be bringing what will be a best in class, first in class, medicine which we think can be a game changer for patients in these areas. You are raising your guidance for the new year, 58. 6 to 59. 6 billion, and for a full year of adjusted earnings you are talking about an increase from 295 to 305, and its at 290 and thats 15 cents better what do you think the second half of the year meeting the expectations we continue to see Phenomenal Growth tkpwrau taouda grew 21 in the Second Quarter, and thats the first time we have been over 6 billion and a quarter. We see strong growth to the full year, and the Guidance Range you are referencing implies growth 10 to 11 , if you exclude the onetime impact, and its a strong beat. We are carrying that through to the bottom line. We have beat expectations on the top line by about 6 billion, and we are carrying 800 million to the top line, underlying all the different moving parts, and theres about 24 cents of operational strength, and we feel good about where we are and its the sustained momentum these important drugs really have what about when the government starts negotiations on september 1st to lower drug prices your diabetes drug is the first up with that, and you dont think that will have any impact on the profitability for the year number one, the discussion and the negotiation is only the beginning of the discussion for it the actual impact of it wont happen until 2026. In reality, for jaw tphaoufa, it wont have a patent. We already heavily negotiate that drug today. If you look at that drug, that drug has discounts of upwards well, i should say north of 60 in the marketplace thats really through the negotiations we do through the medicaid part b sponsors today its not going to have a Material Impact on our results in the near term, but our concern more broadly is the sustained impact this will have on innovation. While we discuss this as a negotiation, it isnt a negotiation. Its government price setting. Thats where we have a fundamental issue. Our industry right now is really at a turning point where you are seeing a real acceleration in the level of innovation, and the number of new drugs coming to market, and its coming right at a time when we believe the unintended consequences of the negotiation, as they call it, within the ira, and its going to put a damper on that. We want to find a way to drive affordable and access for patients, and we want to bring a way to drive that while protecting innovation, and we dont see the ira doing that rob, thank you, and we appreciate your time today thank you very much andrew we are down at ubers headquarters, and the rideshare receiving its first ever operating gap in the companys history. Its a milestone for the company. The stock is on the move already this morning, up about 6 after what has been quite a ride for the last several months now. And ceos uber will join us here at 7 30 a. M. Eastern time. You will want to stick around for that, and so much more squawk box rolls on right after this 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 youre sitting on a goldmine. Call Coventry Direct today at the number on your screen, or visit coventrydirect. Com. Good morning welcome back to squawk box here on cnbc we are live from the Nasdaq Market site in time squares. I am becky quick with mike santoli, and Andrew Ross Sorkin is up next take it away thanks, becky uber reporting quartly results and the Rideshare Company reporting its first ever gap offer, and earnings coming in at 18 cents a share, and thats greater than the onecent loss expected we are digging into some of the matrix trips jumped about 22 monthly, and uber generated 1. 1 billion of Free Cash Flow during the quarter. We will dig through these numbers and dig through them with the ceo, Dara Khosrowshahi, and that will happen at 7 30 eastern time, so we hope you stick around for that. A big day in uber land this morning. The stock ticking higher. Its been on a strong run, by the way, and even if you go back the last six months, it has been on quite a move in anticipation of this day of sorts, but you have to see where this all goes next yeah, it was in the mid40s four years ago, and we will see if it can get moving to a different range. Jeff bloom reporting results as well, and the stock down sharply on Current Quarter guidance lets get to phil lebeau lets first start with the numbers for the Second Quarter this was a beat by a penny with jetblue earning 45 cents this year, and revenue coming in line with expectations at 2. 61 billion, and excludeing fuel in the Third Quarter. Those numbers largely in line with expectations, but its the guidance, and thats the reason for the shares for jetblue moving lower the eps guide, from a loss of 20 cents to break even. They were expecting a profit of 40 cents a share, and this is the impact of the northeast alliance being unwound it will be down 4 to 8 . And jetblue expecting to earn between 5 and 40 cents a share the guidance, again, heading into this morning was for a profit of 78 cents a share the guidance is well below what wall street is expecting and thats the reason you see shares of jetblue under pressure. It will be interesting to see what the ceo of jetblue has to say later in the conference call, but clearly its the guidance that is moving shares lower. Back to you. Phil, a picture of separation in the Airline Industry in terms of winners and losers, and jetblue or southwest or some of the bigger ones, its stark. What is behind that . The biggest driver is look at those airlines where the stock is doing well, and the guidance has been upbeat, it has largely been those who have more international exposure, whether its american, delta delta, especially united they have oriented more of their schedules towards the International Demand out there, and not just transatlantic, but trance pacific as well look at those who have reported less than optimistic results or outlooks that leave people saying thats not that great jetblue, we know what is going on with jetblue in the northeast alliance as well as southwest. One other thing to point out, mike, with regard to jetblue while the stock is moving lower on the guidance for the Third Quarter, at the end of the day, what will drive the stock is how the proposed merger plays out, and that impact is being held in the second half of the year. Now it will be a question of what happens with the proposed merger with spirit thats what investors are focused on to a certain extent the stock is locked into a bit of a range here, and we know the doj is contesting that proposed merger. Yeah, for sure. In a sense, jetblue attempting to gain scale, where the deltas and the urls appreciate a much greater scale. You bet lets get over to dom chu yeah, there are a couple dow components to lead things. First with caterpillar, and it is down and has been jumping around between gains and losses. The Construction Equipment and heavy machinery maker quarterly profits and revenue that both topped estimates because of more spending on infrastructurerelated projects, especially in the u. S. C caterpillar is sitting just below the high figures we have another component with sha shares of merck. Its up 2. 25 . The dow component reporting better than expected results keytruda, a Cancer Treatment, and gardasil doing pretty well merck reported a smaller than expected loss. We will end on pharma as well, with merck competitor, pfizer. A mixed report leading to a fractional loss, and profits came in for pfizer better than expected, and revenues fell shy of expectations by lower sales of covid treatments and vaccines, and it was expected but not as much as what advisors were thinking. Thank you so much marriott just reporting as well, and earnings coming in at an adjusted 8 cents better than the streets expectations. The company has continued momentum and demand for travel, and that was driven by a 39 jump in marriotts International Region its indicated slightly higher as well after those drivers. They do have the leverage. Thats right. When we come back, former new jersey governor, Chris Christie, will join us after the break. In the meantime, take a look at the futures this morning the dow is off by about 29 points, and thats a significant improvement from about an hour or so ago. S p fures wntudo by 6. Squawk box will be right back. Wake up, achievers. Youre making the most of every hour of your life. Except the hours that youre sleeping. So why do we leave so much Untapped Potential on the table . This is a next level bed, for a next level you. My circadian rhythm is kicking your circadian rhythms butt its not a competition. I know, but im still winning so, it is a competition. Save up to 500 on the new sleep number® smart bed. Plus, free Home Delivery when you add an adjustable base. Shop now only at sleep number®. So, youve got the power of xfinity at home. Now take it outside with xfinity mobile. Like speed . Its the Fastest Mobile Service around. With the best price for two lines of unlimited. Only 30 bucks a line per month. Thats hundreds in savings a year when you wave bye to the other guys. Save hundreds a year over tmobile, at t and verizon. And now, trade in your current phone, and get up to 1000 off the new galazy z flip 5 and z fold 5. Were back we want to welcome Chris Christie hes now a 2024 president ial candidate. Governor, thanks for being here. Thanks for having me. Lets talk about some of the latest headlines we have seen come through we have seen charles koch, and the pac he has builtup is 70 million, and he wants to beat donald trump, and that plays into what you have been talking about. You have had any conversations with him we have most of the major donors are giving a little bit to people, but as you can see from the reports that were filed yesterday, but not going all in on anybody yet and they are trying to figure the race out. What happened early on with the Governor Desantis viewed as the primary contender against donald trump, his campaign has, to be nice, under performed and everybody is holding back a little bit and seeing how the rest of us perform and if somebody emerges from our group. I have taken the approach, becky, where the truth matters i am saying the things about donald trump that need to be said, that i think most of the people almost all of them agree with and believe we cant do this in a delicate way. Theres nothing delicate about donald trump, and hes not going away by clicking our heels when you look at him, his filings yesterday, most of the money the americans have given to him he spends on his legal fees how about selling trump tower or his plane. But hes taking the money from Everyday Americans and paying his legal fees 108,000 for melanias stylist they called that political strategy consulting. If you look at nikki haley, though, she says shes not obsessively antitrump like you are. We cant figure out what nikki is, and she said she would not run if trump ran, and lets put it this way. I am not auditioning for any position in the trump administration, and i got offered white house chief of staff, and secretary of labor and turned it down, and ambassador of italy and turned it down. I want to be president of the United States so i dont have to worry about it and i am not obsessive about anything other than trying to get our country back in a direction where we Work Together towards common goals of a common economy and i am not worried about anything other than that. For nikki, like, if you are not going to beat donald trump, you are not going to win thats it. Its that simple if you look at the party, its interesting, the republican party, the democrats when they dont have the white house the number of candidates are huge. We saw this back in 2016 lots of candidates running some of the republican parties in the states are pushing back against this California Republican party just changed it to winner take all instead of doing it by Congressional District and other states are considering this because they dont want to have to deal with such a wide number of candidates to try and figure it out and split things, and that makes it to challenge anything later in the game it has nothing to argue the number of candidates, and donald trump did a good number when he was president , he changed the rules to favor him a house that is rotting from within, no matter how you change the rules, will ultimately collapse lets face the facts here. Donald trump, by the time we get to the debate in three weeks, will probably be out on bail, out on bail, becky, in florida, and in washington, d. C. , probably in georgia and already here in new york i dont understand how we cant be talking about that and how we cant say to Republican Voters, if you dont want a democratic president again in 2025, why do you think independent voters in the general election will vote for somebody who is out on bail and probably during the general election facing at least one, probably two, trials, which could subject him to prison time you know, nikki haley can call that whatever she likes. Im a former prosecutor and i know what he is facing he goes to trial on the documents case and is convicted, theres apresumption of jail time presumption. If thats telling too much truth to make somebody like her uncomfortable, she probably doesnt belong in this business. Given the reality that presumably Republican Voters are aware of the legal peril and everything that has been going on for two years, and you still have to go through a completely daunting polling lead the former president has right now, so how do you square that i dont think the American People are focussed on this quite yet. We are focused on it, but i dont think they are yet i think the first debate, whether hes there or he isnt will start to kick this off on august 23rd, and then kids are getting back to school and people are back to work, and they will say, okay, what is going on here . Im one to understand having been involved in the game as long as i can, if you have a message honest, forthright and direct, you have to just keep it at it. From yesterday, july 31st, nobody is voting for six more months and how about we give people that six months of time, and we have the instant gratitude in society, and lets just keep at it, and its not a situation that will get better but will continue to get worst if he spent 40 million in his legal fees, what are his legal fees going to be those two poor guys that are his codefendants, and will they not turn on him and testify against him . Andrew is down at uber headquarters because hes about to interview Dara Khosrowshahi, but he has a question. I have two questions for you. You have been very outspoken against the former president trump, trump i dont know if you can hear me. He can hear now great, thanks governor, two questions. One, you have been very outspoken against the former president. The Ceo Community investors, and other folks with great wealth that donate have not been nearly as outspoken as you, and most are very, very quiet they may privately share a lot of the shame views you do, but they have not said them publicly and taken a sort of leadership position in this race yet, and so many of them, frankly, i think are scared to say similar things to what you may be thinking and they may be thinking what do you tell them . Well, what i say to all of them when i speak to them is its either now or never if they are counting on, you know, events to do their work for them, i think this is a real, real risk. Thats why i got into the race, andrew i am not going to let this go on its own. Somebody has to drive this argument and i know how to drive this argument and i know what the facts are. I will continue to present the facts to the American People, and other people need to chime in here. For all those men and Women Leaders of our busines community who are watching this morning, you cant count on me to do it myself, and you have to chime in whether its supporting me or somebody else with the same message, or you do it yourself by coming on the air and talking about these things, and whispering his name is not going to get his job done. The other thing i was going to say is you really staked out ground in i dont want to say in a reactionary way, and people want to understand what you are against, which is donald trump, but what you are for so many businesses are fiscally conservative, and we talked about it all the time, andrew, and its the stuff that i say about trump is more entertaining to cover. I go on an interview, and people ask me those questions and i answer forthright. But lets be clear, we have to stop the spending and thats what caused inflation, and prices are 17 higher than they were when joe biden became president. Statistics this year are down more than the year before. We need to present educational freedom options for every parent no matter what your income level is in this country we need to look at what we are doing in our cities, and i am a former prosecutor, so on crime, if cities like the one we are sitting in right now in manhattan, if alvin bragg doesnt want to do his job, i will appoint those that will go and get them off the street and put them in federal prison if alvin bragg wont put them in state prison like he should be doing, and we cant be a great country without great cities and finally on the border, we need to interdict tpetfentanyl, inform the immigration system so we can fill some of the 8 million jobs we have open here so we can work hard and grow our economy. Lets talk about the negotiations with the Drug Companies and government that start september 1st, and we had merck ceo on earlier this morning, talking about earnings and talking about this, too, and he said its not negotiations but price fixing, and you have americans paying for the innovation of the world. You dont want to see the innovation cut off but how do you deal with making sure americans are not the ones getting squeezed by it you dont hear any politician come on the air and talk about the pharmacy benefit managements, and they are taking from 50 to 70 of the rebates that pharmaceutical companies mean to go to the customer they are taking them purely to be middle men. Its not sexy, becky but what about cutting out the need for the middleman in the whole thing . They will need help from the government to do that. These pharmacy benefit managers have been so entrenched in it. Thats what the Johnson Johnson ceo said yeah, they are not without fault. I have to tell you the truth, i dont need another pharmaceutical television commercial, and i have to tell you the truth, is there a man over 60 in america who needs, like, another see alice commercial we get it. What the Pharmaceutical Company is talking about is innovation americans should get access to the medications first i dont want to kill the Innovation Trust me ken fraser talked about how he tried to take this on when he was ceo, and he couldnt just theres an entire system with the prices you cant just do it that way, and nobody in the political world has wanted to take on the pdms, and nobody has wanted to do it, and we did it in new jersey, and we are the first state that wanted to do a reverse auction for those managers, and we cut our costs, becky, jest for state workers by doing a reverse auction. If the government got involved and made sure everybody in the system is treated fairly, we could reduce the prices without price fixing that would lead to innovation thank you when we come back, the ceo of uber. We will be back after a quick break. Becky, jest for state workers by we will be back after a quick welcome back to squawk box. Uber, the Ridesharing Company achieving the gap revenue, and 9. 23 billion in the quarter, and uber generated the 1. 1 billion of Free Cash Flow during the quarter joining us right now, the companys ceo, Dara Khosrowshahi when you took over, by the way, bookings were 14 billion. 33 billion right now when we were sitting together, ebitda was negative, and thats quite something for you. Its a great day. There has been a ton of work for everybody on the uber team and the drivers and couriers were on the platform, and we are up 18 year on year ebitda record, up over 50 year over year. And our first profitable quarter i remember trying to get you to say when in the year it would happen do you know you are on track at this point we thought we would be on track either in 2q or q3, and everything came together and we plan to be profitable for every quarter Going Forward. I dont know if you can see the stock. The stock is up 4, almost 5 , and at one point it was over 6 , and you look back at may and now its a Straight Line up. How do you think about the companys valuation in this context . What i can control is what we are doing operationally, the service we are offering to our consumers. Audience grew by 12 on a year on year basis, and the frequency of use, that grew 9 on the year over year basis, and you combine that with discipline, and the stock price will take care of itself the stock price is now reflecting you from investors, which we said all along, this is going to a scale platform on the internet that could be very profitable, and we have got a competitive advantage lets just talk about what that is, though. We went through uber 1. 0, which is probably the travis calnick version of it, and you just might have completed 2. 0 of sorts. I dont know if you take a victory lap on that front yet. We are not ready for a victory lap, but we have come a long way that was almost like a daily knife fight trying to get through it all, and what does the 3. 0 version look like . For uber, it looks like we are essentially connecting every single driver who is available to take you anyplace in your local city, and what that translates to is the operating system when you combine that with a. I. , we are for you, anyplace you want to go, and anything you want to get to your home, and we are more of a service you cant do without how concerned are you with what is going on with your competitor, lyft they have been challenged, in part, because of your own success. We will see if they need to get into a pricing fight with you all over again andrew, i dont spend too much time worrying about lyft, so to speak, and we dont see evidence of a pricing fight. Lyft is price competitive with us now, and we are competing based on brand and service and innovation, and with products like uber x share and reserve, and our enterprise you dont think as they try to capture share, and now they are price competitive, that they will make it a lot more challenging . I think that the era of pricing, fighting purely based on price is over that was three or four years ago when it was just about volume, and now its more profitable volume if the only thing you have to offer is a lower price, you are not offering much ultimately, and as far as lyft and other competitors, they are trying to compete in the right way, and in that way we have the advantage and scale. You came into lots of cities across the country uhhuh. At a very low Competitive Price talking about pricing yeah. In some cases, you were so successful in that realm you put a lot of folks out of business or shifted the business and became a successful one, and now the price has gone up. Well, the price has gone up along with inflation everywhere, right . When you look at the prices going up, a significant portion of the price is being passed on to drivers for example, drivers, couriers, earned over 15 billion including trips on our platform, and that was up 19 , which is faster than the bookings growth which was up 18 the increase in pricing a vast majority of that is going to drivers and couriers, and we think thats fair. That is happening in a very positive direction, when it comes to mobility, meaning people in the cars, and delivery the freight space has remained a challenging spot for you why . It has. When you look at the consumer and what the consumer is spending on, and the consumer continues to spend in the services, and prepandemic, spending services was 59 , and its still only 67 of spend, and more is going towards services and that benefits the Mobility Service freight grows when people ship stuff, when they buy stuff this year people are buying more services, and our Freight Service is down. We are adjusting costs, and the mobility delivery businesses are growing at huge rates and are larger than others if we are sitting here three years from now and we have a pie chart, mobility, delivery and freight, and advertising absolutely. How does that pie chart look . Well, the whole pie is much larger, right . But i think all of the pieces of the business are going to grow at significant rates in the teens or 20s, and advertising will be the biggest growth area for us we have a huge audience, over 130 million audience coming at us, and this is a highend audience, and they are engaged and are going places what we are seeing in advertising is 68 in run rate revenue. When you talk about being a super app, what does that look like relative to my twitter just turned into x, and elon would love to do a super app, too . We are not going to rename the company anytime soon, but what we are focused on is we are in the real time physical movement of goods and services, and i think twitter is a different animal again, not the one i bet against. Where are you about surcharges what would that do to your drivers or traffic or the broader business generally we support congestion pricing in cities to alleviate traffic, et cetera, and get the vehicles that have the most utility in the most crowded parts of the city. We will pay once generally its proving out to be a real challenge in new york city to figure out how to make it fair to all the constituencies. Do you think its good for these cities, congestion pr pricing . Some have been challenged, you know, and just having people in the city is a good thing yeah, the fact that people are coming back to cities and coming back to new york is terrific if you think of the supply characteristics, theres too much demand for transportation in some cities, and how do you make that fair and equitable to everybody is tough elon musk was saying its like a doomed city, but we are staying. Are you staying . Yes, we are do you have views on is it a doomed city . Things are tough there, and right now their feedback loops between negative and positive, and San Francisco is going through a negative feedback loop now, and never bet against innovation in that city. I think Artificial Intelligence, Machine Learning and et cetera, the excitement there should bring people back. We will be there talk about innovation in a. I. , in particular, and you made a deal with waymo with self driving businesses, and you had your own self driving vehicle for a time what is your perspective on getting to that question about who the driver ultimately will be if you step back for uber, we want to wire up every single car and driver that is safe and good for business, whether its a human or robot driver. Robots have a long way to go to provide the Wholesome Service humans can i know theres the drama, are robots going to replace people, et cetera. What we have seen over and over again, robots compliment humans. Our deal with waymo, its providing a Better Service for you. You are a twosided marketplace. Yes, we are you spent a lot of time trying to attract drivers saying, look, this is the place you should be driving on i think what we are communicating to the drivers very clearly is we are squarely in their camp. We have improved Customer Service significantly with drivers, and the onboard experience is better, and we have 6 million drivers and couriers on the platform, and the driver is spending more time on the platform, up 7 per year, and retention is up. A fascinating Court Decision a week ago with selfdriving cars, and there was the tragic incident with the self driving car with an uber backup driver, and there was a question about who is responsible, the person or the robot, and in this case it really is the person. Thats because there was a backup driver in the vehicle how do you think that changes if theres no backup driver i think that all of this shows just how important safety is in developing these technologies that have impact on the real world and can affect lives. For us, we are very much focused on our platform saving lives, ending drunk driving and et cetera, and it shows you have to take your time and i think self driving is going to take time. We have to go, but i just discovered you will now actually show people not just your star rating but how many five stars you got and four stars it doesnt show you which driver gave you what, but you now put it out there for folks we just want to give you more information so you learn maybe a little more about yourself, andrew how are you doing . Are you mostly fivestar or fourstar . I have about 1,600 drives great customer. Thank you. I have gotten four to five stars, and so as you go down the four stars its interesting you start to think, which is the drive that costs you the lower number new yorkers are tougher in judging each other, and the new york attitude, you have edge, et cetera yeah. Dara, congratulations on a great quarter. Thank you appria iectet. Squawk box coming back with a lot more as we roll on, after this now is the time to partner with our experts. Get started today with verizon business. Its your business. Its your verizon. Still to come. Hello tupperware the stock up more than 700 in the past two weeks we will ask tom whether mean stocks are making a comeback plus, could alphabet become the leading Media Company . Why youtube could be in the pest position to weather the decline. At 87 years old, we still see the world with the wonder of new eyes, helping you discover untapped possibilities and relentlessly working with you to make them real. Old school grit. New world ideas. Morgan stanley. The two most important things in golf are your swing and your style. Dicks Sporting Goods has everything you need to upgrade both. Find toprated drivers and irons from callaway, taylormade, titleist and ping. Tour balls from your favorite brands. And the most dapper styles from travismathew and walter hagen to calia and lady hagen. You handsome devil. Select the best golf shoes like footjoy, nike and more. And get back on the course with onehour pick up. Look good and play great with gear from dicks Sporting Goods. Bridgett is here. Look good and play great with gear she has no clue that im here. She has no clue whos in the helmet. Are you ready . Im ready alright. Xfinity rewards creates experiences big and small, and onceinalifetime. Short sellers are getting crushed on their tupperware trade as the stock rallies kate rooney joins us with more hi, kate good morning. So betting against tupperware has been pretty profitable trade. Earlier this year, the stock was down 80 or so in the First Six Months of the year that changed as the stock price quintupled in the past month according to new data from s3 partners, the tupperware shorts are now down 384 this month alone, and disown 171 for the year its among the most squeezable stocks that there are. In part by Short Interest, as a percentage of a float, almost 30 of those available shorts are sold short salt soon the wound for some of those short sellers has become prohibitive ly expensive to stay in those trades. 41 for any of those new slivers of stocks. Tupperware now being called the latest meme stock, in part because of that high Short Interest they mentioned but some of the viral popularity on social media and weak fundamentals its had a lot of issues its influenced the momentum tradering. Some of the longonly hedge funds are also chasing that momentum and closely watching sentiment on reddit and other social media back to you. Kate, they know how this game is played at least in the shortterm thank you very much. Joining us with more on what could become a new wave of meme stocks, tom sosna, cofounder of tasty live so tupperware in particular, its moving on almost nothing beside an apparent short squeeze. Doesnt have current financials. Theyre probably going to miss bond payments. Its not like theres something going on in the business how do you read this type of activity now that its being revived . I mean, in a case like tupperware, we have a company probably worth less than 200 million. Youre really talking about, its more of a game than anything else. I dont think theres much else there. I think its kind of, the short sellers had their day, and now theyre getting squeezed i think its more fun and noise. I wouldnt read anything entitle. I dont think theres a market tell from this i dont think its anything more i know the stock is up about a dollar premarket today, which seems even crazier but you know what, this happens with really low float and a big Short Interest and you know, like she said, the viralty of it is interesting but i dont think its more than just noise so if theres nothing much to read into it, we all remember what happened in early 2021. This is the type of activity associated with what became an important top and subsequent decline in the speculative parts of the market. We had amc go 540 to 5 thats healthy market activity anything that brings people into the game. Anything that creates noise and excitement, i wouldnt its hard to say if its a healthy market activity. What it is, its healthy for the business like, the more people that get engaged in finance, just because theres noise and activity and theres viralty and theres excitement, thats good for business i mean, ultimately, people will forget about tupperware, theyll forget about siri, forget about amc, forget about all of these meme stocks and gravitate and transition over to things that are actually more important. So in the big picture, yeah, it is important and its actually good for business in the short run, its just more of a game. And i do always like to emphasize that theres always been this type of activity, where people were just trading the tickers and the next little flashing light on the screen what are you seeing in general, though, in terms of flows. In terms of people getting reengaged with the market so far this year . The funny thing is, in the last couple of weeks, we have seen a real transition away from kind of more traditional hedges like futures and futures options trading, into a lot more equity trading. The equity marketplace has been really busy in the last two weeks. And that is thats kind of a good sign, that retail traders are coming back. And theres actually a lot more excitement for us, we look at any kind of noise and excitement as kind of the basis for, you know, risk taking and Wealth Creation so for us, were looking at it as a pretty exciting time right now. I like what im seeing, at least with the flow of money going back into the retail sector. All right, tom, i appreciate the time this morning. Thanks very much hey, thank you. When we return, could alphabets youtube tv be the worlds leading Media Company. Michael nathanson putting out a note yesterday on that very topic. He will join us in the next hour. In the meantime, check out the futures this morning first trading day of august, we have seen some improvement with the futures, especially the dow futures. Of course, we had caterpillar, merck, pfizer, all reporting earlier. Nasdaq indicated off by about 78 s p futures down by 14 right now. Squawk box will be right back. E game today . hero fan uh, yea. I have to watch my neighbors nfl sunday ticket. josh allen its not your best plan. But you know what is . Myplan from verizon. Switch now and theyll 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 s23. Only on verizon. Good morning and welcome to august were 90 minutes away from the first opening bell of the month. Major averages finishing july by locking in big gains we begin the new month with a big slate of corporate earnings. New results out from dow components caterpillar and merck, plus rideshare giant uber and many others. And putting a price tag on youtube. Well speak with an analyst whos projecting a 12digit valuation for the video streamer the final hour of squawk box begins right now. Good morning welcome back to squawk box right here on cnbc we are live from the Nasdaq Market site in times square. Im becky quick along with mike san santoli. Andrew will be back with us in just a few minutes hes making his way back from uber headquarters. If you take a look at whats been happening with the u. S. Equity futures this morning, mike mentioned the first trading day of august, and not off with a bang a little bit of a downward pressure on stocks at this point, are on the futures at this point, the dow futures. 41 points below fair value, s p futures, 14 points below fair value. Youve got the nasdaq down by about 83 and if youve been watching the treasury market, lets take a look right now youre going to see the tenyear is yielding, its been just below 4 , still there. 3. 99 . The twoyear, just below 4. 9 , and of course, it is a big day for earnings lets run you through some of the key results weve gotten already this morning dow component caterpillar beating profit and revenue estimates with the companys ceo saying that those results are reflected continued healthy demand for the companys products kat was the best dow component for the month of june, and outperformed that index last month. And you can see with the guidance the company is giving, that stock is now up another 1. 6 this morning. Yeartodate, its up by about 12. 5 . By the way, you dont want to miss an interview with cats ceo, thats coming up in the next hour of squawk on the street. Fellow dow component merck posting a revenue beat and a narrower than expected Second Quarter loss narrower by about 12 cents sales of the vaccine gardasil and Cancer Treatment keytrueda topped expectations. The market is raising its fullyear Earnings Guidance and earnings per share its now looking anywhere from 5 to 15 cents better than the street expected on those adjusted earnings per share. Thats with the 12cent better than expected number for this quarter, so they see upside even from here. That stock is up by 1. 8 youve got pfizer beating analyst expectations for profit in the Second Quarter. Sales did come in a little light. That company is narrowing the top end of its revenue guidance while maintaining its adjusted earnings per share guidance for the rest of the year and that stock down by about 1. 1 and jetblue scoring a Second Quarter bottom line beat with sales matching expectations. However, its the guidance thats hitting the stock this morning. Both for the Third Quarter revenue and profit numbers, on the revenue side, jetblue expects the unwinding of its northeast alliance with American Airlines to take a toll. That stock down by about 6 . Lets get back to the broader markets, as we come off of a very strong month of july. Mikes been taking a look at where the rally has been taking the indexes relative to alltime highs and we have seen some big gains this year, even bigger gains off the lows in october, mike for sure, becky and that old highs are kind of within sight of the nasdaq 100 and s p 500. The nasdaq 100, up 50 off of its october intraday low this is what it looks like over two years, for both of those indexes. Very modest moves on a twoyear lookback but really a big kind of scoop in this chart. Now, both of them, also, are the same distance, roughly, from their record highs, for the nasdaq, that was set back in november of 2021, for the s p 500 in the first couple of trading days, actually the first trading day of 2022, the 4 to 5 below those levels so clearly, its not a foregone conclusion, but a lot closer to a lot of folks had thought and a lot of strategists raising their estimates for the yearend to that area of the old alltime highs. Apple and microsoft, kind of interesting, obviously, key drivers of both of those indexes, now about 13 or so percent of the s p 500 a little bit of divergence here, which i think might be significant. You see microsoft is below that level of a couple of years ago, when we got toward that peak level of the nasdaq. Its kind of faltered a little bit, of course its also been one of the key central kind of vehicles for the ai excitement. Apple, meanwhile, reporting earnings later this week its still been up, up and away, although its kind of stalled out just recently here in the 190s at that 3 trillion level i want to take a look at the volatility index all the way back from before the covid crash, because youve kind of normalized back to those levels around 12, right before we got the first stirrings of covid. And so now were back to 14. I think its also interesting in the last few days, weve kind of had a floor here in the 13, 14 range. It seems like, becky, people may be bracing for what is often some seasonal volatility, turbulence in august and september. Even as the index of the s p has clicked slowly to new highs. Some volatility that comes in, in part, probably, because so many people are away on vacation at the beach. Things can move a little more rapidly. It doesnt help, exactly. Thats part of it. Well, thats something to look forward to. We always have that, mike. Our next guest says that high Interest Rates and high inflation has created ed a challenging environment across all the major asset classes. Lets bring in uwan monroe i guess its challenging if youve missed out on what the major averages have done to this point. Yeah, i think its more looking forward. Clearly, theres been strength in it, and we havent necessarily been negative about the markets, its more of a forwardlooking basis. Weve had Interest Rates rising very, very rapidly one of the highest Interest Rate cycles ever. And a lot of debt has been termed out so the refinancing consequences on corporate and on the household sector really havent been felt yet. So theres that delayed response so when i look at the earnings season at the moment and the success that companies are having and beating earnings, its on the basis of earnings expectations having dropped quite materially over the last 12 months. Its a relatively easy beat. That makes sense when you worry about the debt load that has to be refinanced or in the process of being refinanced, but youve also got inflation coming down pretty rapidly. And when you look around, Interest Rates could be nearing their ascent as well youve got inflation coming down i think one of the things that probably i would take issue with is that Interest Rate futures, the yield curve is anticipating that inflation could come down, and then Interest Rates can drop really quite quickly afterwards. So youve got this inversion in the yield curve. My view is that inflation will only be beaten if you keep Inflation Higher for a bit longer than expected you have to keep it high enough to get through this refinancing wave, otherwise it will have no effect so you think the optimism thats been built into the markets is based on the faulty yield curve, where the market hasnt caught up with the fed yet, and you think the fed will ultimately win i think the optimism is quite narrowly defined so theres a couple of tech and excitement theres a number of really narrow areas, and theyve lifted the indices. And i think there could be a change were excited about Artificial Intelligence and the variations are far more interesting in some of those areas. When you talking about companies having termed out that debt, that would also seem to mean that the fed impact has been blunted, and you talk about it in terms of a lag, but are we sure to see the full weight of what the tightening has been on the economy, if in fact we can have this slow transition towards higher interest expense . I think at some point, this needs to be phased in. You know, if you have built your enterprise on significant debt i think it might be felt more in the private sector or private assets, private equity and so on, where have often debt was used extensively as financial engineering. And i think thats where there could be some pain so thats where i would expect it to show up. You like dividendpaying stocks you think thats really the turn that investors should be looking to at this point we think, to some extent, maybe its ive got growth managers who are very used to buying things on high multiples, if theyre excited about the Growth Prospects of the company. Im from a macro background. And i tend to deal in entire asset classes, and when an equity market was anywhere above 20, 25 pricetoearnings, i started to get a nosebleed so you have to take me from my background but i dont want to have to believe in really, really strong growth to buy into an investment opportunity. And if i do, as we do, we feel Interest Rates are going to be higher, its going to be quite difficult for companies to refinance. Growth is not going to be abundant theres definitely going to be winners. There will be people nind growth in a challenging environment its always best not to have to rely on strong growth, so buying into companies on unchallenging valuations have got really good cash flow streams. Some people forget that, you know, equities are real assets theyre operating in a real economy. They give you protection against inflation. So when you see high Interest Rates, too many people think nominally, they think that 5 or 6 is a very good income level its not so great that inflation sticks at 3 to 4 . I know you cant talk individual stocks, but bp this morning said that it was raising its dividend by 10 . The ceo said thats because they bought in 10 of their float so they can raise their dividend to individual investors, by still spending the same amount of money thats what youve seen through a lot of these oil and gas companies. Theyre all doing similar sort of strategies. Thats the type of thing that makes sense you . Itdoes. When you think about the demographic of people who are correctly positioning themselves in the equity market, very often, whether we like it or not, theyre the people with money are in their 50s, 60s, 70s, theyre older people that have built wealth over their lifetime and they need that money to work for them to generate an income and enter retirement to some extent, if they miss out on nvidia or tesla, thats not so much the point. Its, have they got a portfolio thats going to drive useful income, thats going to keep pace with inflation . And thats why i feel its more of whats the right thing for people to invest in. And this is not necessarily whats going to give them the absolute best return in a feverish, excited market ewan, thanks for coming in today. Thank you coming up, as successful as youtube is, is it still an underappreciated asset for alphabet after a break, well speak with one of the top Analysts Covering that company and the head of the Antidefamation League joins us to talk about the proliferation of hate onneli it is an interview you dont want to miss stay tuned, youre watching squawk podcast on cnbc points like hrv and rem sleep, so you know all you need for recovery. And you are . Im 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. Im done. Im okay. Wake up, achievers. Youre making the most of every hour of your life. Except the hours that youre sleeping. So why do we leave so much Untapped Potential on the table . This is a next level bed, for a next level you. My circadian rhythm is kicking your circadian rhythms butt its not a competition. I know, but im still winning so, it is a competition. Save up to 500 on the new sleep number® smart bed. Plus, free Home Delivery when you add an adjustable base. Shop now only at sleep number®. Welcome back to squawk box. The futures are again under some pressures. The dow futures down by about 63 points nasdaq futures off by 77 the s p futures down by 14 amazon expanding its Health Care Offerings Bertha Coombs joins us now with this mornings announcements hi, bertha good morning, mike. Eight months now since amazon launched its amazon clinic with services in twothirds of the country. As of now, the Telehealth Services is available nationwide after meeting state regulatory requirements in places like new york theyre also expanding the range of Health Issues that they will treat, driven they say by consumer demand. But while patients can get weight loss drugs, like ozempic on amazon pharmacy, the clinic side is not ready to offer that kind of individualized Health Coaching and support that should go along with those weight treatments its a space that i think we want to make sure that we understand a bit better before moving forward because i do think that theres a lot of theres a lot of complexity there and a lot of Decision Making around whats the kind of optimal path to help someone with their weight journey. Its definitely a hot area, these days, though teledoc last week said theyre moving into the space for 2024, leveraging its levango Health Coaching Weight Watchers bought weight loss telehealth service, like amazon, hims and hers is taking a slower approach. And theyre definitely all being a little bit strategic about how they go after this kind of service. Bertha, i dont know if its just semantics, or if theres an important kind of difference between Health Coaching and treatment, as we would otherwise think about it what does qualify as Health Coaching, as opposed to just, you know, getting medical care, for example . Well, its not just getting a prescription a lot of these companies try to offer more, you know, like nutrition, coaching in terms of making sure that you also do exercise to go along with it and also, you really have to watch as people use these drugs. The lady around the corner was talking to me about the fact that shes been on wygove and she had to talk to her doctor about scaling back because she didnt have appetite for anything shed lost weight, but didnt want to eat anything you have to maintain constant surveillance and for insurers to pay for it, they really want to know that there is some sort of support there. Yes, you have some coverage if the service is offered. Bertha, thank you very much. All right, when we come back, a recap of a big quarter for uber then, analyst Michael Nathanson tells us why he thinks youtube is one of alphabets most underappreciated assets. Stay tuned, youre watching squawk box and this is cnbc. Welcome back to squawk box. Uber posting a Second Quarter result this morning. Revenue missed estimates, but big news, because uber received its firstever gaap operating profit, versus a 1 share expected loss. You can see the stock up 1. 2 right now. It had gone up at one point 6 de de deryk Dara Khosrowshahi joined us earlier we plan to be probably for every quarter Going Forward. For the Third Quarter, ubers gross bookings projections and projected ebitda guide are above analyst estimates. And that stock, if you look back starting in may. Its a big deal big move. To say, profitable every quarter here yeah. Thats a big declaration. And one that so many of the Growth Companies have struggled with and not been able to and being able to maintain, what he was talking about, 15 to 20 growth on the other side of it, too. Which is, its both the top line and bottom line story. If you compare that stock to lyft, its breaking away oh, completely. And its going to be, its going to be much more challenging. Lyft basically made a choice not to get into delivery, not to get into these other businesses, to be this pure play. And as we were talking about with him, they are now having to get competitive on price again, which i do think is going to ultimately have to make it more challenging for lyft in certain markets, at least. Sure. Meantime, switching gears, a new note coming out from our next guest, asking a very big question, which is this. Is alphabet the worlds leading Media Company. The note says the youtube can grow from roughly a 40 billion Business Today to what he thinks is more than a 240 million standalone asset. Joining us right now, michael nat nathanson, Senior Research analyst. Good morning to you. Boy, do you think that this is an undervalued asset, do you think, michael i really do i think the issue is an Internet Company asset. When you put your media hat on, you realize, its probably in the bestpositioned asset Going Forward for media investors, as cordcutting picks up and streaming grows, its really at the best position to take advantage of all the trends that were looking at right now therefore, though, the question becomes is the conundrum for investors that the multiple of that unit is not baked into this valuation that we see in the larger umbrella that is alphabet, or are you effectively arguing that this should be spun out and if it was spun out, would it have all the same kind of benefits that it does inside of a google right so my argument is that it would be spun out. Im arguing that people have focused on the advertising opportunity in youtube, because thats been the core business. Our argument is that there are so many other Growth Drivers ahead that the growth rule accelerates Going Forward because of those drivers so im just argue welcome if you look at it as a classic internet advertising play, youre missing the big picture. Im not arguing spin it out. Im saying, its so well positioned that the growth will accelerate through the year and be doubledigits for the next couple of years pretty easily. Theres been a big question, and clearly, youtube went a completely different direction, insofar as paying for original content, premium original content, the way so many of the other big players, the netflixes, disney, everybody else has done. Do you think that was the right choice and do you think that should remain the choice whats interesting is, there was the nfl ticket deal, and that was the first time they actually wrote a big check for content. And i could see them getting bigger and bigger into sports. So to me, competing on scripted content with all those other companies you named, thats a hard, hard game. But they can keep signing these big checks sports is the glue to the cable industry if they can pick off some more sports rights, theyll separate themselves from the pack i think its too competitive, but but they can move down, which to me would be but you and i i dont know if were going to disagree, but we may differ. Its unclear to me why they need sports unlike the other subscription packages that you could argue need sports to draw folks in, to pay that subscription, in a strictly advertisingdriven world, most are either user generated or in some cases professionally generated and then put on the service, how much of the sports piece of it is whats bringing people in or needs to bring them in well, sports, basically, as we transition from a world of linear channel to streaming, sports is keeping the linear channels together, right to me, its an aggressive move, an authentic move to try to quickly accelerate the change of consumption. So when i say sports, i dont see them getting an nfl contract they have sunday ticket, but will it be an nba package . Will there be more College Sports they can sign so i can see them offering, with a league, a package of sports rights that are no longer available in the linear world. So not saying go out there and get another nfl deal they have what they need i think as the bundle crumbles, therell be pockets of sports that will be better served in streaming, and to me, youtube is in a good position to start selling channels with other leagues in tandem with that. How bullish you on youtube tv, which effectively is the bundled product. Im actually a subscriber of it. I think its one of the best services in terms of the user interface and the way it works than anything ive seen in quite some time. Yeah, so, mike, i should be a paid spokesman for youtube tv. I have it as well everyone we talk to, i try to convert them over to it. We think in four to five years time, we think that youtube tv will be a bigger provider of channels than comcast or charter. So craig and i have this very negative view of where comcast and charter are going towards paid tv. We think youtube tv will get over 10 million subs in four to five years and be the dominant provider of channels and its a great product and i think when people experience it, youtube will get more strength, and they will really be in the drivers seat of deciding what the next bundles look like. Im as bullish as you are. I think you sample it though the flip side, economically, you could argue that youtube tv is empty calories when i say empty calories, its this is not a highmargin business in fact, they dont break out the numbers, so its a little hard to know but theyre losing money doing this yeah, no, were not arguing that is we agree. Its a hard, hard business to be in but i think what happens is, by creating that scale and that traffic through youtube tv, theyre going to start selling more channels. The sunday ticket deal was an experiment to sell more channels theyve got deals with hbo max and paramount plus so i could see them basically trying to make money by selling added channels i dont disagree with you. I think the streaming business in terms of a channel business is a hard business its true in linear and true in this world but i think the point were making is youtube is positioned to be a gatekeeper Going Forward. So when people complain that they cant find things they want to watch, youtube will create an interface where you can find things so most peoples phones have streaming Services Everyone complains theres no Central Place to see what i have so i see this as a longterm pivot, where they can be one of the who or three Major Companies controlling the interface. Mike, we need to thank you. And we are in agreement. I also like youtube tv for a different reason i think its going to maintain the bundle of sorts for a much longer time than perhaps some of the traditional cable providers would. Thanks, michael. Yeah, thanks. Check out shares of norwegian cruise lines, falling despite beating expectations, earnings coming in at an adjusted 30 cents a share. Thats 2 cents better than estimates. And that was on revenue of 2. 21 billion. That also Beat Estimates but guidance for the Third Quarter, which is typically the strongest for the cruise industry, driving shares lower you see there, by about almost 9 norwegian now expecting to earn 70 cents a share that quarter. That is lighter than the 79 cents the street is now looking for. Shares of carnival and Royal Caribbean also moving lower after that report. Yeah, just looking through, from something from the transcript, with marriotts ceo, because marriott, better than expected earnings coming in with this they say, while conditions could change rapidly, this is the ceo, booking trends remain solid and theyre raising their fullyear rooms growth and Earnings Guidance on both of those issues, too. So just waiting to see what happens with travel at this point. Their booking trends look really solid. So far. Everyone has been braced for the peak, but we havent quite, obviously, gotten there yet. Still, the stock is down by about 81 cents yeah, meanwhile, when we come back, its a question well be asking, is the central bank on its way to pulling off that soft economic landing or not well talk rates, inflation, ahead of the jobs data thats going to roll in later this morning. Uay tuned yore watching squawk box and this is cnbc in line. See the mona lisa. Smaller than you expected. Check in. See your room. Bigger than you expected. Join one key, where gold and platinum members get travel perks, like room upgrades. Let Innovation Refunds help with your erc tax refund so you can improve your business however you see fit. Rosie used part of her refund to build an outdoor patio. Clink dr. Marshall used part of his refund to give his practice a facelift. Emily used part of her refund to buy. I run a wax museum. Let Innovation Refunds help you get started on your erc tax refund. Stop waiting. Go to innovationrefunds. Com you really got the brows. Welcome back to squawk box. This is cnbc and weve been watching the earnings and the futures this morning we were just talking a little bit at it. Dow futures are down by 83 points at the beginning of the session, they were off 98 points, after that, we got dow components, caterpillar and merck both reporting numbers and we did see some improvement in the dow, we got down to 30, but were back to down 80 and the nasdaq off by 81 all right, following last weeks Interest Rate hikes, fed chair jay powell said central bank staffers are no longer forecasting a u. S. Recession our next guest says while things are developing as they should for a soft landing, its still too soon to declare victory. Joining us now, a senior fellow and the policy director of the Hutchins Center on fiscal and Monetary Policy at the brookings institution. Louise, good morning its good to have you here what keeps you from joining the chorus on wall street, we can still have slow but still positive Economic Growth and the fed no longer tightening soon, and an indefinite soft landing thank you so much for having me i think i worry about a few things not worried, but not ready as you said so for one, you know, the data had been coming in, as we would hope for a soft landing. The Unemployment Rate hasnt budged other labor market tightenings have come down Consumer Spending is resilient and prices have been coming down, but june was a great month of data, but that was one month. One thing we want to know, prices move around a lot its unclear what is happening to prices. Were going to be looking for a sustained slowing in prices over time, before we can declare victory. And then i think more importantly is, its possible that whats going to happen is the economy is going to slow somewhat and inflation will come down, but its going to come down and kind of get stuck at a level higher hanthan the feds target so we dont know that this soft landing is landing to the feds target or where were going to end up after this episode with an inflation thats more like 2. 5 or 3, and the fed might have to do more and bring the economy into a recession in order to get that inflation down. So thats the kind of thing that were watching i think its way too early to know how this is all going to unfold over time but its certainly looking good and looking a lot better than many had expected. Theres no doubt about that and of course, there are many who will say, you know what, even if theres a recession out on the horizon, it often looks like it could be a soft landing before you actually get into the recession. Its not unique of that sense that perhaps we have a little bit of a tentative allclear i guess the question is, you mentioned this, that if inflation proves sticky, the market seems to be embracing the idea that the fed is not targeting any specific level of job loss or Unemployment Rate or kind of sticking to a particularly equation on the relationship between jobs and inflation. They just want to see the Inflation Numbers go down. And if that happens and unemployment remainins very low thats all to the good you dont think theres a great chance well see continued improvement . I think there is a good chance im not a pessimist at all i think there is a good chance, i just think this economy is so different than what anybody had expected, from what anybody understands. Theres so many variables that could change we dont know whats going to happen within the labor market participation. We have seen head fakes before on inflation so i think theres a lot of uncertainty. But i think thats exactly right. One of the things thats really uncertain is what that natural rate of unemployment is, that you sometimes hear being targeted i think some people thought it went up during the pandemic, because vacancies went up so much, and unemployment didnt. Rate didnt, where it was before, but vacancies are higher the labor market is quite different. And other people think thats just temporary and were going to heal. We had a 3. 6 Unemployment Rate before the pandemic without much sign of inflation. Theres a sign we can get back to that, but its unclear. The fed will be really watching that dad and as you say, theyre not targeting that unemployment, theyre just watching the inflation data, and trying to find the level of economy thats just cool enough that inflation is back to their target without, you know, as best as they can, without causing a recession and raising that Unemployment Rate more than is necessary and even at that, the fed doesnt anticipate getting back to that 2 target for quite some time so were going to be on this watch of those Inflation Numbers for a while yet. Louise, thank you so much. Appreciate the time this morning. Okay. Coming up, social medias battle against online hate, Antidefamation League Ceo Jonathan Greenblatt will join us next well talk to him about so many things taking place in social media land u wchg quk xndyoreatinsawbo a this is cnbc back back to squawk box. Grades run the gamut from b for twitch and c for instagram to an f for snapchat joining us right now is jonathan greenblatt, National Director of the Antidefamation League. Youre the teacher in this case. Go through the grades, but even before that, how you came to them how are you measuring these companies . The adl has been tracking hate for over a hundred years, and now we see social media has become the super spreader of hate and harassment. We do annual polls and we found that this year, more than 52 of americans report receiving abuse, being harassed on these platforms. And thats over half of their adult users in america so those numbers are astounding. And actually, four out of five people have seen violent threats directed at them receive no feedback, no support from the platforms at all why do people stay on these platforms . I think these platforms have become so integrated into our lives, its how we shop, its how we socialize, how we search for information. And yet, again, they are vector of abuse and these are some of the most sophisticated, Profitable Companies in the world think about snapchat its got an 18 billion market cap, doing Amazing Things with, you know, half a billion users and yet we give it an f, because you cant get realtime support if youre harassed you cant batch report if youve experienced hate i want to deviate, but this is linda yaccarino, the new ceo of x, formerly twitter, posting the following a few hours, freedom of speech and platform safety are not at odds. Is that true is that possible that certainly seems to contradict what were seeing on almost all of these services look, they announced their r reorg at x yesterday and linda is in charge of trust and safety thats a good thing, because she understood how to handle these issues, i believe, at nbc universal. But the truth is is that what were seeing on twitter, x, today, is really alarming. Lets just define hate when you talk about hate, i imagine that there are folks who if they were filling out a survey would say that they feel like they have received hate online by the way, i, unfortunately, feel like i receive hate every hour online. Im receiving it right now. And look, i actually try to be as introspective as i can, and say, maybe ive got to do this or that, and sometimes its crazy and sometimes its real. But that kind of hate is different than some of the true hate and hate crimes effectively that take place on social media. So how do you differentiate between that well, look, weve certainly seen where rhetoric online creates realworld consequences offline, andrew. Weve seen a connection. But how do i define it look, these platforms need to center the users experience so we talked to a holocaust survivor who told us how she regularly gets messages like, how did you enjoy the howers i understand, how did you enjoy the showers, if youre walking out of a locker room, may be benign, but directed at a holocaust survivor, thats absolutely a kind of hate that no platform should tolerate. You give the highest grade to twitch yeah. Most people dont even think about twitch in the classic social media land. Twitch owned by amazon correct but take us farther down the chain. So where does facebook land . Facebook gets a cminus x, twitter, gets a cminus discord, which is really just a rancid place, gets a d. And snap gets an f. But twitch did well, youtube scored a c. Insta scored a c. Tiktok scored a c. So theres a range was that a function do you think of safety teams that you think are doing a better job on those platforms . Do you think its really about the type of person and the community and the kind of language that is considered acceptable on certain platforms . I mean, i think even as instagram was starting threads, for example, it seemed like that was a happier, lesshateful place, at least at the beginning of the party well see how the party progresses well see but you see what im saying is it about the community and the way they sort of created an environment or is it about the technology of effectively, and some people call it censoring, and removing either people from the platform or posts from the platform i dont think applying editorial standards and basic rules of the road is censorship. You know i dont agree that in general. More specifically, its about the platform and the values that they drive linkedin is a place where we dont see any of this kind of abuse. Where on discord which is filled with rightwing extremists and all kinds of hateful people its a different issue, but given the amount of thought youve given to this, what did you think about the report just last week i mean, the twitter files are one thing, but theres this the Facebook Files that emerge around the white houses influence over covid information during the pandemic, the pressure that was brought to bear against facebook executives the ruling in florida by the judge, who effectively said that this administration should not be in communication about some of these things. You agree with that, disagree with that . So i do not agree with that look, i think if we looked at what happened during covid, lets acknowledge that Public Health officials, you know, companies, civil society, we were all struggling to make sense of this moment and no one really had their act together and understand what was behind the virus, how did we stop this transmission, et cetera so i think government trying to work with the companies to be responsible and get the right information out to the public, i dont think thats necessarily ill play devils advocate, because i happen to agree with you, but there is an argument to be made that its coercive when a Government Official calls you at a tech company that you that they regulate when they regulate. When someone can regulate you and they ask you to do something, its different. Its like the chairman of an Oversight Committee calling you when youre the bank they oversee and say, give me money for my finance campaign. Look, its a fair question. In afree society, i think we have to assume some modicum of trust for the Public Servants and the democracy in which we live nobody reads lower than journalists except for Public Officials when it comes to trust. These are complicated issues. But i give them the benefit of the doubt and think that tlheye trying to do their best. As someone who formewo if government, these are decisions are made in realtime but you cant have it done behind closed doors where Companies Feel like they absolutely have to battle pressure and look, i think there were mistakes that were made during some of the things that happened during covid but if youre not going to say you cant have ever call, whats the way to do it should there be sunshine laws that say, okay, anytime you call, well put out publicly what you requested us to take down i hear you, theres a gizmodo report that says since the Management Change at twitter last fall, that theyve complied with 80 of the government requests to pull down information, from around the world. And you remember what happened in turkey, when elon was asked to pull things down. Im acknowledging these things arent easy. These ceos want market access, and theyre pushed by governments who we dont agree on their basic values. At the same time, what were talking about at adl, keep our users safe from hate knock the nazis off your platform that shouldnt be so hard. Are you surprised that a let me from a technological perspective, one of the things that a lot of the leaders of these Companies Say is, you know, we are trying as hard as we can to take this stuff down as quickly as we can that, you know, users are clever theyll write things in certain ways we havent code it in every way. The second we figure out how its coded, we jump in and actually and we do deal with it right do you think that they are disingenuous in what theyre saying about how they approach these issues i dont know if i would characterize it as disingenuous, but i would say, if your product is broken, its up to you to fix it so, Beverage Companies dont get to say that, yeah, 99 out of 100 products are safe, so we think were doing pretty good. But the conundrum is, the custom in the the customer is almost making the product, right . So controlling every customer, its interaction with the product is a bit of a different issue. This is where i come back and agree with jonathan. Youre a profitable company. Figure it out. They can micro target ads to you. I dont think theyve prioritized it they dont Center Safety in the platform design. They dont Center Safety in the product development. It can be done it should be done, and it needs to be done. It would be done if they remove section 230 in a macro environment, if they had the same liability that the three of you do, then youd Better Believe they would figure this out, becky. Like that. What about the idea that they have a selfinterest theres an idea that they dont want that toxic content on there themselves. Im someone who came from the industry i believe in selfregulation what weve seen is they think, for example, subscription models, were seeing like with x, by offering a variety of subscription products, it hedges on the need to drive advertiser dollars. Thats a way to drive the revenue we need without relying on the whims of madison avenue. As someone pointed out online, its hard to knock the nazis off the platform when theyre paying 8. 00 a month. Subscriptions seem to depend on the needs of madison avenue. Jonathan, thank you for coming on this morning fascinating grade. Do you think its going to change anything. Do you think the Companies Look at the grades by the way, theres restaurants i wont go into if it has a d rating in it. I dont know if thats the case in social media land by the way, you might give them an f they might say thats who i want to be. If it leads, it leads were seeing the number of interactions and impressions on twitter go up despite all the madness. Look, at the end of the day, i think what becky said is right we need some regulatory pressure here again, just hold the companies liable if they allow libel its simple. Its not as complicated as the Companies Make it out to be. When we come back, well talk about what to watch ahead of the opening bell on wall street. Thank you, jonathan. Good to see you. The futures this morning, the dow is down triple digits, loss of 111 if we were to open here nasdaq down by about 85. S p off by 20. Welcome to august. Stick around squawk box will be right back. Helping businesses both large and small, communities and the people who live and work there grow and thrive. Were proud to call these places home too. Theyre where we put down roots, and where together, we work to help move everyones financial goals forward. Pnc bank. School is back and dicks Sporting Goods has everything you need to gear up so you can show up. And, with our best price guarantee, if you find a lower price, well match it. With value like that, its never been easier to sport your style. We earn your trust. Maintain our financial strength and stability. And deliver solutions that meet complex needs. Massmutual. Partnering with financial professionals, benefits brokers, and institutions. fan 1 there ya go thats what im 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 its not your best plan. But you know what is . Myplan from verizon. Switch now and theyll 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 s23. Only on verizon. Lets talk markets as we get ready to kick off the month of august on wall street. Joining us is Lisa Erickson head of the Public Markets group at u. S. Bank wealth management. Lisa, good morning a pretty good time to maybe take a beat and reassess investment approaches here. S p up 20 year to date, trouncing bonds even though bonds are giving decent income what does it mean for you in terms of how investors should think about reallocating or just staying the course we are really advocating for our clients right now to stay neutral in the u. S. Equity market the reason why is when you look at the tally of pros and cons from what might propel the market forward, we really find a balance of reward and risk on the very Positive Side the consumer has remained resilient and is supporting on going by the tightness in the labor market in addition to that, what were seeing this particular quarter in earnings reports are that companies, while they are experiencing the effects of slowing growth really again have been able to manage their overall Earnings Growth relatively well to expectations. However, we do really have the fact that the fed has been tightening for some time, Monetary Policy acts as a lag and inflation, while it has made quite a bit of progress is still elevated thats still hitting consumer pocketbooks, and keeping that hyperforlonger mantra for the fed in play. We recommend for clients that they stay neutral or at their typical strategic weights in u. S. Equities. Neutral simply because it seems like there are offsetting forces positive and negative i guess at this point . One of the Big Questions coming into the year is when might a recession hit. Now it seems its an if as opposed to a when. If last years 25 decline in the s p, its kind of priced in that recession risk. I wonder when that kind of expires. Right now it doesnt seem as if the market is necessarily poised to absorb a potential downturn in the broad economy well, to your point, what were really seeing in the market is in effect a sigh of relief and a very robust sigh of relief to the point of the doubledigit returns weve seen in the market so far this year because everyone came in, again, experiencing some sort of concern that we really were going to hit recessionary or at least very modest growth, tepid growth weve really been able overall, both on a macro front as well as a company front, been able to beat those expectations. Really what we see, again, is pricing in i think that has allowed the valuations to then on the back of positive expectation beats, to really outperform that. Going forward into the second half of the year, what we see again is because weve been able to maintain that resiliency in consumer behavior, our base case is for anything continued slowing of growth, but avoidance of recession or if there is a recession, a more moderate recession. Again, there is still the risk of a possibility of a harder recession if we continue to have some stubbornness in inflation which would mean higher for longer for sure, and maybe even higher than weve anticipated rates might go lisa, thanks for the thoughts this morning appreciate it. Thank you lets get a final check on the markets on this first trading day of august. The futures this morning showing basically where we were three hours ago. Dow futures off by about 100 points s p futures down by 18, the nasdaq down by 83. Remember, this has been an incredibly impressive year to date so far for these averages the month of july alone you saw the nasdaq and the s p both up the dow and the s p both up by 3 , the maz dak by more than 4 . You were talking about gains north of 19, 19. 5 i think for the s p 500 and for the nasdaq up by 37. 1 . That does it for us today. Mike, thanks for being here. Well see you later today. Well see everybody back here tomorrow right now its time for squawk on the street. Good Tuesday Morning welcome to screen. Im david faber with jim cramer. Were live at the New York Stock Exchange carl has the morning off lets give you a look at futures. You just heard from becky, of course were looking for a lower open this morning well see, as we always do july ended yesterday so our roadmap does start with a new month for stocks yes, a new month wall street coming off what was a strong july. The nasdaq and