Transcripts For CNBC Squawk 20240704

And later, former saks ceo steve sadove markets trying to get back some of what was lost on tuesday. As you know by now, the dows worst day since july, up about 130 here s p continues to circulate now around 44. 50 you have a little bit more tame vix picture below 16 and that tenyear coming off of 4. 22 this morning. Tech is lagging after yesterdays selloff and now the more recent underperformance of tech after the outperformance of tech so far yeartodate can tech continue to rally as these yields, even if theyre pulling back, settle in at higher levels. And the debate continues about whether the economy is too hot to get rid of inflation for the fed. Just this morning, we got some housing numbers that were better than expected. Industrial production, a litter better than expected after yesterdays retail sales a lot of jokes about the magnificent one or two, as opposed to magnificent seven, although cisco tonight could give us a view at least of enterprise spend and whether that gets another kick along with the consumer. But doesnt get a magnificent title, because its not ai topping the tape is target results and the readthrough on the consumer the stock is higher, despite a somewhat gloomy outlook. The companys cfo telling me this morning, hes watching the consumers discretionary category slowness. He says were watchful of student loan impact. Thats coming in the fall. More students thereof pay off their loans. We have a position of caution. Thats how he characterized the guidance those results coming ahead of walmart, which reports tomorrow. Cnbc senior retail reporter Courtney Reagan joins us with the sentiment on these two stocks, pretty far apart, courtney very, very, very far apart. Going into this, target had hit a 52week low, and walmart had been up 5 over that same threemonth period we know that their businesses are very different, largely because of mix, which seems to matter now more than ever before, with walmart overindexing in those categories that target calls frequency the categories, food and beverage, with some of those categories with over 56 or so of sales target, of course, really pushes more into those discretiona ary categories that are considerably weaker than target had expected. They talked about the weakness last quarter not only did it continue next quarter, but are forecasting it to continue Going Forward, taking down their guidance sharply for both sales and profit for the rest of the year, even with a 41 cent beat, theyre taking down the fullyear profit forecast by another 1 the inventory numbers were interesting. We mentioned down 17 but down 25 in discretionary it does seem like even though demand is a little harder to come by, they are manage to become somewhat disciplined in that environment yeah, and i think its really important, of course, as always, when were looking at numbers like this, because they are eyepopping, to think about the comparisons. Remember at this time last year, target had placed all of these orders for these goods that were in such high demand by many of us consumers during the pandemic and because of the supply chain snafus, by the time they had got in stock, we had moved on. So target was left with all of these items that they had to sharply discount in order to move them. It helped to juice up those sales, yes, inventory was higher, and profit margin was lower. Thats that quarter comparable youre looking at for this quarter now, which makes those numbers look even shaper just as a point of comparison, i think its important to look in the context of what was really going on then versus now yeah, its a good point, courtney what do we know about market share, for target . Because the story has been, they are in categories that consumers are not wanting right now. Home, apparel, hard lines Like Electronics and thats whats hurt target relative to walmart. But whats happening with overall share . I think thats a really good question and i dont think that we know for sure because obviously, walmart, too, in the past quarter, well hear from them tomorrow for more detail, also talked about weakness in those discretionary categories im not totally sure theyre picking it up. But we heard from tjx today and look at those numbers. Their comps are up 6 . When it comes to amay recall, maybe the target shopper that was previously going to target is now moving to tjx but i also think that we all know that were spending more on travel these days, on these other discretionarytype of services or other discretionarytype of spending so maybe that share in general has waned across the board no one has recaptured it, because thats not where consumers are spending their money right now. Thats a really important question that we need to ask and its a bigger problem Going Forward with a market share issue with target in general well, it does echo what we heard from home depot yesterday, which is weakness in the category, but looks like its getting a little better. Same sort of thing its a taylor swift economy, courtney thats what were spending on. That and european vacations, and not home goods, i guess. Exactly exactly. All of the planes are totally packed, the airports are totally packed, hotels are tpacked sarah wanted to add barbie herch as well. Were both wearing pink today. Thank you, Courtney Reagan. For further insight into the consumer, lets talk to steve sadove when you have meet someone who has questions about the consumer, what do you say to them grab them by the shoulders, whats the overriding dynamic right now that describes the u. S. Consumer . I think courtney hit some of the topics really well the consumer is slowing right now. If you look at the beginning of this year, the consumer overall growth was in the 8 to 9 range. Today, its in the 3 range. We looked at the scommerce department numbers yesterday and everybody was very excited about the improvement from june, but look at it a year ago, it was a 3 growth on an inflationary impact in the 3 range as well wages are growing faster, so we feel good about it, but a slowing consumer, and a consumer that isnt buying as much in goods as well as meexperiences. We also ought to look at what happened three years ago, because we have to compare everything to prepandemic youre now in a period of reversion to the mean. You had the winners early in the pandemic are now looking on a year ago basis like the losers home depot their business is dramatically better than prepandemic but on a year ago basis, it doesnt look as good, because you have people moving away from those categories youre starting to see the experiences are looking great, but if you look at travel and some of these other categories versus prepandemic, they still dont look that good theres a lot of room to run, but clearing on a year ago comparison, experiences, travel, are all the winners. Youre starting to see a resurgence of apparel. Youre starting to see electronics come back. Remember, electronics were big winners early in the pandemic. I think this is a bit of a reversion to the mean. And youre clearly seeing the needs versus wants in the sense of target discretionary not doing as well. Im sure youre going to see great numbers out of walmart theyre 50 food, and food continues to be strong thats a great point on the you know, normally in retail, we look at one or twoyear stacks. Its probably not enough, given the bullwhip effect that weve seen from the pandemic i do wonder. Its 131 days to christmas, if its too early to start thinking about how that season is shaping up well, i think its probably going to be a cautious Holiday Season you know, think about what were seeing in backtoschool the backtoschool numbers look reasonably healthy in the 3 to 4 range but the forecast coming out of target was cautious. And thats because everybody is concerned about a slowing consumer i would be very careful. Inventories are well controlled right now. A year ago, we had an inventory problem. Right now, were in a situation where inventories are under control as well as are supply chain costs. I would expect it to be more normalized promotions during the holidays, not overexuberant promotions, unless the consumer falls apart, chit clearly has not yet fallen apart and the categories that are performing well right now, which tend to be the experiences, but i would expect during the Holiday Season, electronics, apparel, the categories that came out really well during july, and you saw that in the Mastercard Spending numbers that just came out, apparel, electronics, grocery, travel, entertainment doing very well. I would expect them to continue to do well during the Holiday Season but i think that caution is an important word during this period of time its easy to start feeling exuberant, but there are headwinds out there. Whether its Consumer Debt that is starting to increase, their savings rate is coming down, we dont have the you know, others have mentioned whether its the student loans, the lack of Government Support programs, all of these are things that are weighing on giving you a very, aggressive forecast. The word i would use is value. Look at tjx today. They had great numbers i would expect you to see it in walmart, i would expect it in the dollar stores. The value play that the consumer is focusing. I look at that for the Holiday Season interesting that is definitely actionable from a stock perspective, steve. Good insight well talk soon. Thanks for the help today. Steve sadoff is the dip in the s p just a blip or the start of something bigger well check in with one strategist who says theres still more upside to rates and more downside in stocks. And from the white house, nec Deputy Director is with us on the inflion atreduction act turning 1yearold today were back in just a moment. What do you mean . These straps are mindblowing they collect hundreds of data 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. Every business thats why comcast business de is launching theal. Mobile made free event. With our business internet, new and existing customers can get one year of unlimited mobile for free. Its our best internet. Powered by the next generation 10g network and with 99. 9 reliability. Plus one line of free mobile for an entire year. Its the mobile made free eventhappening now. Get started for just 49. 99 a month. Plus, ask how to get one free line of unlimited mobile. Comcast business, powering possibilities. Welcome back lets dig into the markets a bit more with some experts that have some expectations about where things go from here. Paul christopher from Wells Fargo Investment Institute predicting at least one more hike with a recession on the horizon. And tony roth sees a soft landing in the cards, pulling back on his base case for a recession, but not moving back into risk just yet gentlemen, great to have you paul, let me begin with you and lay out the conditions by which we would get a hike yet again. We think that youre going to see the fed still have enough concern about inflation, maybe not at the headline level, but core is still very sticky, food and fuel prices still rising, housing prices going up. Rents, again, sticky thats going to keep the fed engaged. Any of these meetings is potentially live between now and the end of the year. One more hike and then potentially into 2024. We think higher rates are going to be a problem. Do you think that gets framed at jackson hole, or is it a function of many more data points coming in that run hot . Theyve made it clear the fed has that theyre looking at the data on a monthbymonth basis we dont expect any real surprises from jackson hole, but we do expect a reminder that, hey, look, the data arent all benign, especially when you look at core inflation. Tony, the doves would counter with shelters coming online. It looks like used cars is not a head fake, given some of the alternative data that continues to come in and theres deflation on that front. What do you think . Well, we would agree with paul that the fed probably will hike in november but we dont agree that they should hike. We believe that the fed is going to be very, very careful to not put a stake in the heart of this inflation problem. But when you look at the data, you look at the cpi numbers we had earlier this month, cpe coming out on august 31st, likely to follow that, you see a very strongly disinflationary economy, notwithstanding the strength in the economy, the economy is disinflationary the one area of the numbers that are holding up inflation at 0. 2, in fact, is shelter. And shelter lags by around 14 months so if you go back and look at the caseshiller, what you see is that we should have around six months coming up of very weak disinflationary housing data thats going to push the monthovermonth core numbers and supercore numbers really quite low. So i think if the fed is going to stop after the next hike. And when you look at the longer end of the yield curve, what we see the downgrade, the situation with japan, the refunding of the treasury account, all in the shortterm, really pressuring yields but when you go out a little further than that, it would appear to us that yields should be down maybe closer to 375 or so, and that makes bonds look pretty attractive when you car where the shields should go, coupled with the carrier what does all of that add up to for equities . So what it adds up to for equities, upyou have to be very careful and very selective those big megacap names are at very extended levels when you look at multiples excluting those top seven or eight securities, youre only at a few forwardlooking earnings over the next few quarter. If youre selective and looking at the value areas of the market and the quality areas of the market, such as consumer discretionary, diversified financials, travel, casual dining, all of the Service Areas of the economy that have good quality names, there are some good buying opportunities there. Finally, paul, you know, one thing were not really addressing is employment and im wondering how tight you would expect labor to stay if, in fact, you remain with a hawkish fed. The labor market has some structural tightness to it in the sense that 55 and olders are not coming back to the workforce. But if you look at the cyclical sorry, lets just say the month tomonth. The Labor Force Participation in that 24 to 54yearold category has been Strong Enough lately that supply and demand are roughly balanced, and were going to see hours start to come off. Firms dont need to work existing employees quite so hard and so what that means is that even if wage rates are still rising at about 4 annualized, the number of hours is declining so that total takehome labor income is softening quite a bit. And we think that contributes to an overall weak situation for Consumer Finances going in the next year. We dont see how that pulls out of that nosedive pulls out in time for a soft landing. Yeah. The workweek is definitely becoming something that we watch every jobs friday. Well continue to, including revisions. Paul, tony, good debate. Thanks, guys thank you cava off its highs more on those results when we come back. And later this hour, intel scrapping its planned acquisition of tower, the antitrust concerns behind that deal and some of the termination fees when squawk on the street comes back your record label is taking off. But so is your sound engineer. You need to hire. I need indeed. Indeed you do. Indeed instant match instantly delivers quality candidates matching your job description. Visit indeed. Com hire my cpa told me i wouldnt qualify for the erc tax refund, so i called innovation refunds. Their team of independent tax attorneys will work with your cpa to determine if your company is eligible. [whip sound] take the first step to see if your Small Business qualifies. upbeat music woah. Constant Contact delivers the Marketing Tools your Small Business needs to keep up, excel, and grow. Constant contact. Helping the small stand tall. The first time you connected your godaddy website and your store was also the first time you realized. Well, we can do anything. Cheesecake cookies . The chookie manage all your sales from one place with a partner that always puts you first. we did it start today at godaddy. Com european stocks set to close in just a moment with a story abroad today, all about the cooling inflation in the uk. The headline cpi number there dropping sharply to 6. 8 in july and now the question being debated on the street today, is this the whole story core inflation remaining unchanged and several economists are pointing to those Lower Energy Bills as a factor in that number also following a regulator reduction in the price cap versus the actual easing broadly of price pressures all of that for something from the bank of dpengland to chew on and some folks pointing to the fact that we just come off of this number yesterday where we saw record wage growth in the uk not necessarily an allclear, though, Prime Minister rishi sunak sees light at the end of the tunnel the pound is stronger today its some home price relief in the city of london year on year, which isnt saying a lot, but its something i guess baby steps probably still at a very high year over year rate, even though its coming down weve lost some of our opening gains, but the dow is up 92 lets get a news update with our bertha coombs. Hey, carl, a vichcivilian cao ship stuck in ukraines port of decembers a since the invasion set sail on the black sea today. It traveled through a new corridor despite a russian blockade the company that owned the ship confirmed it was en route to istanbul this morning. Moscow that has threatened to treat any ships leaving ukraine as potential military targets. And more evidence of a divided america. A new poll from the Associated Press shows a deep political dividing line when it comes to Donald Trumps recent criminal indictments. It found 85 of democrats think that trump tried to interfere in georgias vote count during the 2020 election. Only 16 of republicans shared that belief. That poll was conducted ahead of mondays charges in the georgia case and englands womens team reached the World Cup Final for the first time after defeating cohost australia this morning the lady lionesses will face off against spain for the title on sunday im really shocked that sweden didnt make it thats going to be an amazing match on sunday, id think thats the news out of the uk today. Forget inflation right bertha, thank you when we come back, panera bread founder ron shaich on opportunity in restaurants and the performance of his act iii fund his w neact as an investor stay with us we are about two hours here into trading lets go posttopost with bob pisani for a look at whats moving, Holding Small gains thanks to energy and staples and industrials and financials, but tech is not helping out today. We are getting a little help from the financial and not the banks, for a change. Insurance companies are doing better i dont often talk about them, but this is a pretty rare day blue see, this is the leader on the s p 500. This is one of the big property and Casualty Insurance companies out there. They had their july statement out. They underwrote a lot of premiums in july almost 6 billion. Thats up 20 from a year ago. So underwriting profitability, looks like is improving a little bit. These casualties, the numbers theyve had the catastrophe losses have been strong for these groups, these insurance companies. Its been a real problem overall. But overall, these numbers are good, up 9 that theyre reporting for july thats helping travelers and dragging up all the insurance stocks thats a dow component thats good for 20 points. Allstate is up 4 all of these insurance names are generally moving to the upside also helping on numbers today, we had target numbers, targets moving up all the discounters. We had tjx as well heres dollar general, trades right here its up about 2 ross stores is moving up its been a while since its had a good day they had a rather poor Earnings Report months ago. This is early june, as i recall. And they essentially have been sideways since then. Theyre having one of their better days, believe it or not, 2 not having a good day. The reits are having a terrible time these higher rates are really putting pressure on them, particularly sensitive areas for example, strip malls right now having a very tough time heres really the king of strip halls. This is kimco. And you can see, its down again today. Its down maybe 8 to 9 for the year this whole sector, not particularly strip malls, but malls in general and off complexes having a very, very tough time in this higher Interest Rate environment. Carl, back to you. Bob, speaking of which, im curious to know your thoughts on the kbw banks, mentioned with cramer, the underphone conference versus the s p this year if it holds for the year, it would be a new record in terms of underperforming the kbe is, after being a Market Leader in the Third Quarter is down six of the last seven sessions thats real problem. Its obviously the regulations that are potentially an issue that are out there thats a big, big overhang for the overall Bank Situation carl bob, thanks well watch that in a tough environment right now for financials lets turn to cava, now lower on the back of those strong results. The ceo joined us last hour and talked about a challenging macro. Were mindful of all the headwinds that are building, facing our guests, whether thats the increase in gas prices, cost pressure on utility bills with the extreme heat weve seen across the country, student debt loan repayment waiting in the wings and you have a fed hawkish posture thats looking to temper growth to ensure that they tamp out any reigniting of inflation. So we wanted to take that into consideration as we give our future forwardlooking forecast. Kate rogers joins us this morning with a bit more on that quarter and the outlook. Good morning, kate good morning, carl. Its a big first report for cava, posting a profit of 21 cents in its First Quarter as a Public Company revenues 173 million samestore sales soaring up 18. 3 and the companys average unit volumes rose from 2. 4 million to 2. 6 million this quarter. Tailwinds for the brand include successful limited Time Offerings like spicy falafel and momentum like new Consumer Awareness postipo like chipotle and sweet green, brett shuman sounding like they are taking a beat. Guidance was still for the full year fairly strong it expects samestore sale growth for the full year between 13 and 15 and expects to open 65 to ap new restaurants in fiscal 2023 some of the menu testing, the digital advertising, the limited time offers it outlined on the Earnings Call did remind me of some of the pipeline that chipotle has built out over the years. Its compared to both chipotle and sweet green, and both of those stocks are some of the best performers of the year, guys not just spicy falafel, but fiery broccoli which to me sounds better. Love broccoli and fiery things kate rogers. Staying in the restaurant space, our next guest is finding investing opportunity not only in cava, but other names like life alive and level 99 through his act iii portfolio, which is now valued above 1 billion. Joining us now is the panera bread Group Founder and former ceo, ron shaich. Ron is an early cava investor and can you remember the board chair. Ron, good to see you again welcome back sarah its been a while. How are you . Im good. And im interested in talking to you as an investor now and not necessarily a ceo, as we did for so many years on panera. On the cava investment, how early did you get in and how big do you think it can get relative to a panera or as kate mentioned, a chipotle or sweet green . I made a very small investment when cava had two stores but i was very involved in the acquisition of zoes and made a significant investment at that point and actually joined the board and became chairman. What about total Addressable Market because this is a very richly valued stock even looking pricetosales relative to chipotle, its like nine versus five sarah, this company has the potential to be an industrydominant vehicle. It has got that kind of strength the category is powerful ive believed in this category for over a decade. Mediterranean is where there are bold and strong flavors. Mediterranean is a bit of something new and it excites people cava has been built and is the dominant brand in mediterranean. If you believe in mediterranean, if you believe in cava, this will become one of the industry domes. So youre working on act iii. What exactly is that is that private equity venture capital, Something Else . Well, its real simple. I have been doing a lot of speaking on the pervasive shorttermism in our capital markets. And i was trying to speak to the need for longterm thinking. Ultimately, i said, let me take my money and put it where my mouth is and we took 250 million we invested it, we invest generally in three ways. One, we invest with what we call founderfriendly capital that is to say that we take on all followon rounds of capital at preagreed to multiples were in the board room, my and my partners were no there for the liquidity event. Were there to help support and guide great ceos like brett schulman, give him whatever sort he can and our third principles, we only invest where we know something, where we have competitive advantage. Its basically the thesis of everything and when it comes to the market industry, were not an investment fund, were putting our money at work to help build the next generation. A billion assets under management no doubt cava was a home run, ron. Whos the next cava . Its got authority in coffee, authority in bread and baked goods, authority in food its got chefs in every unit its doing very, very high volumes, extraordinary customer response a wonderful founder, another thing called life alive, its positive eating its vegetables. Again, very high volumes, very strong concept and we have something called level 99 which is immersive entertainment. Its maybe the most powerful business ive ever been involved in well see where it goes. It could be one of the strongest things weve ever been involved in were definitely going to watch it no question about it im sure you know that the markets are looking to restaurants as a category. Cava excluded to end the ipo drought. And i am curious to know how youre thinking about the Public Markets receptivity to new issues on that front well, when you have a great brand and a Great Management Team like we do with cava, it makes sense. The reality is, you need to be prepared for it. And so Many Companies go public, as if its the end but if you heard brett yesterday, what he said was, the ipo was the beginning. In some ways, i think of a Public Offering like a wedding its a celebration, yes, but its really the beginning of the marriage and what cava is engaged in is a marriage with public investors and that means we have to deal with that relationship in the right way. And thats what youre seeing from cava. And one can hope thats what we continue to see from cava. Its been a shock to the industry, obviously, covid how do you think the Restaurant Business has changed, postcovid ultimately, at the highest level, i dont think it does change the secondoldest profession people have been serving food to other people forever and what consumers want, they want interesting and intriguing flavors, food that excites them, people that care, they want humanity and environments. And in many ways, thats basically people say to me, you know, what ist this all about . It isnt very hard to make a sandwich or bowl its hard to execute it consistently and now in the 225, 230 stores we have, 240. Its hard to do that consistently and over the long longterm. But we have had so many challenges, inflation and wage pressures and competition with grocery, which is seeing high food and beverage costs and people still wanting to make moves at home p the consumer begins by saying, what kind of food do i want to eat today. Mediterranean, pizza, italian. Our role and our goal is to then build dominant players in each of those categories. The reality is, all of these external factors affect everybody in our industry. My goal, our goal in building a company and supporting it is to not is to be the best competitive alternative. And im reasonably confident that no matter what comes down the pike, the kinds of people that we invest with, people like brett, have the ability to figure out what is the best adaptation in the circumstances that theyre in. Its really good to talk to you and exciting to hear about some of those opportunities, ron. Thank you for coming on. Sarah, take good care you, too. Ron shaich is the founder of panera, board share of cava, and now the head of act 3 holding. Coming up nt,ex intels m a strategy hits a speed bump details after a short break. 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 . Fisher Investments in this market, youll find Fisher Investments is different than other money managers. other money manager different how . Arent we all just looking for the hottest stocks . Fisher Investments nope. We use diversified strategies to position our clients portfolios for their longterm goals. other money manager but you still sell investments that generate high commissions for you, right . Fisher Investments no, we dont sell commission products. 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. The first time you made a sale online with godaddy was also the first time you heard of a town named dinosaur, colorado. We just got an order from dinosaur, colorado. Start an easy to build, powerful website for free with a partner that always puts you first. Start for free at godaddy. Com ah, these bills are crazy. She has no idea shes sitting on a goldmine. Well she doesnt 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. Intel scrapping this 5. 4 billion deal with tower semi today after failing to get some approvals in time. Kristina partsinevelos here to talk about the deal and what it means for the foundry business it was a long 18 months, intel waiting patiently, and mutually agreeing with Israeli Foundry Tower Semiconductor to terminate its plans to terminate tower. But this is really about the regulatory body refusing to play ball amid rising tensions with the United States. So intel derives roughly a quarter or a little bit over a quarter of its revenues from china. In other words, a strong presence in the country means regulators have the right to review any mergers of companies that earn a certain amount of revenue in china thats the reason why they were able to slow down this deal. And thats why youre seeing tower semi shares on your screen down about 8. 5 . Intel, a little bit more of a less negative reaction, down about 2 overall, china is not happy with the americanled set of International Restrictions on the sale of advanced computer chips. This failed acquisition is a way for china to fight back. They did so with micron, blocking micron chips. And it does set a precedence for any other american firms that derive revenues from china and are looking at any other type of m a activity but this also disappoints prospects for intels foundry business tower semi is small, less than 2 billion in revenue and really roughly covers about 1 of foundry revenues you can see on your screen, when you put into context with taiwan semi, that takes up about 58 sam, 8 samsung isnt even on that. It shouldnt move the needle massively for intel, but intel would have been given more expertise in the foundry business as well as more exposure to radio frequency chips and the aid sectors as well i was looking at the mizuho desk does this deal even matter speaking up. I did read that line and it stood out to me on the subway line when i was coming here. Thats the problem, they havent built out their foundry business, but thats what Pat Gelsinger is hoping on when i asked him about ai, their Business Model right now is they may not be making the most advanced ai chips, but they want to manufacture them for other companies, much like tsmc does, so they can be part of that capital expenditure. So theyre able to monetize a huge rush of funds thats going into ai capabilities thats their argument. Will they get the five nodes in four years, which really just means differentsized chips within different four years, it gets a little complicated when you talk about the nanometers. Theyve signed up synopsis, a few other companies onboard. So also makes you wonder if any Semiconductor Deal can get done in this geopolitical environment. Any that may involve any type of revenues or any exposure to china . Yes, thats 100 and will other countries start copying with what china is doing right now to thwart americas push towards building here in the United States . Its a good book theyre on the front lines, the semis. Thank you, kristina. It has been one year since President Biden signed the Inflation Reduction Act into law. So has the investment in the economy been working to boost growth and add jobs . Were going to discuss with nec Deputy Director bratt mharat rat on the other side of this break from the white house stay with us sfx people cheering sfx Stock Exchange bell ringing sfx people celebrating sfx people celebrating sfx Stock Exchange bell ringing today marks the oneyear anniversary of the enactment of the Inflation Reduction Act. So far, at least 224 billion of clean tech and Semiconductor Manufacturing has been announced since the passage of the i. R. A. And the chips act, promising to create 100,000 jobs, according to the Financial Times its not all that rosy there are worries about worker shortfalls, global competition and awareness. Joinings now is a cnbc exclusive interview, National Economic director bharat ramamurti. Its good to have you back on the show how do you impact this bill in terms of jobs and growth and investment white, quite similarly to that ft analysis that you just put up there, were looking at Something Like 170,000 jobs created thanks to the investments spurred by the Inflation Reduction Act. Weve seen already since the passage of that bill just a year ago, over 100 billion worth of private industry commitments into Clean Energy Production and so we have a progrowth agenda, a projobs agenda, and of course, very importantly, a reduction in Greenhouse Gas emissions. By one estimate a reduction of a billion tons of Greenhouse Gases by 2030. As the president likes to say when he thinks about addressing climate change, he thinks of jobs we have a winwin, reduction in emissions and a lot of good jobs created. The problem is nobody knows about it according to the Washington Post university of maryland poll last month, 71 of americans say they know little or nothing about the law well, thats one of the reasons im here talking to you. Were out there trying to make the case for the law people may not know it as the Inflation Reduction Act. Starting this year insulin was capped at 35 a month for seniors on the medicare program. There are millions of seniors who are seeing real cost reductions thanks to the Inflation Reduction Act. If you ask people, are you familiar with that provision and how do you feel about it, its a very strong response i think that as time goes on and people feel effects with jobs coming to their community, starting this year were going to be negotiating the cost of drugs through the medicare program. Year after year well see ten drugs come down in cost. Were going to pass on savings to seniors and one of the great things its reducing costs, creating jobs, and its reducing the budget deficit im glad you mentioned the drug provisions because that is an industry not celebrating the oneyear anniversary of this legislation today, bharat. J j, merck, a number of other pharmaceutical companies, the Industry Trade group, and the chamber of commerce, are all suing the Biden Administration saying its unconstitutional and warning it will hurt innovation. How are you going to deal with some of that pushback including from republicans who say its state control . Big pharma has been celebrating too much what we have been doing with the Inflation Reduction Act is taking on big pharma americans pay on average two or three times the cost as people in europe for the exact same drug one of the reasons is medicare has been barred by law from just negotiating with the Drug Companies to reduce the costs of those basic drugs people rely upon were finally changing that. Im not surprised to hear that the pharmaceutical industry isnt thrilled about that but we believe there will be innovations, plenty of money, but we can save hundreds of billions of dollars each decade thanks to these provisions and give people access to lifesaving drugs that they need bharat, it was reported the president said at a fundraiser the other day that it probably wasnt the best named legislation, and im wondering what the white house would want to call it if it were fresh today. I think one of the great things about the legislation, it does so much and youre restricted to maybe having a few words when you name your piece of legislation its not the most pithy name but Greenhouse Gas Emission Reduction bill t. Did a lot. It accomplished a lot of priorities for this country. It is putting us in a position to lead on Clean Energy Production remember this is going to be a multitrillion dollar Global Market for clean energy. The United States should be leading the effort not only because we have to reduce our own emissions, but when other countries need access to efficient, lowcost clean energy, the United States should be the ones building that and exporting that now were in a real position to do that. Just rolls right off your tongue the way you put it there. The knock against it, bharat, and you know this, and i hear this from big business all the time, a lot of what was in here is necessary and getting us to a cleaner future and bringing people to more adoption of evs, its at a time were battling inflation and spending billions in subsidies right now is counterproductive for a fed and an economy that needs to cool down to bring price pressures down is it making that harder this bill passed a year ago there have been significant investments on the supply side of the economy thats net beneficial and, of course, since this bill has been passed weve seen inflation come down by about twothirds at the same time weve seen robust job growth, so i just dont see it in the data. I think we can do both, make our economy more productive. And at the same time by reducing the deficit help the fed to reducing inflation its interesting the ft found more than 80 investments announced in the past year are going to republican districts, despite the fact there were no votes from republicans for the i. R. A. Is that a good thing politically or a bad thing this president said it in his inaugural address, hes the president for all americans, including the people who didnt vote for him were glad to see this investment go to communities who havent seen this type of investment for a long time, community hollowed out as we have lost jobs the president welcomes converts. Weve seen a number of republican members of congress tout the investments coming to their district at the same time they voted against the bill. We dont mind that bharat, thank you very much for taking the time today and drawing attention. Bharat ramamurti, Deputy Director of the National Economic council wall street continues the buzz about the treasury secretarys gic mamushrooms. Well explain in a minute. You sg each other rock stars . Youre a rock star. You are a rock star. No more calling coworkers rock stars. Look, its great that you use workday to transform your business. But it still doesnt make you a rock star. So unless you work with an actual rock star. Hi, im ozwald. Hello ozwald. Pam, you are a rock i wasnt going to say it. The citi custom cash℠ card automatically adjusts to earn you more cash back in your top eligible spend category. Hi. You dont have to keep tabs on rotating categories. This is the only rotating i care about. Or activate anything to earn. Your cash back automatically adjusts for you. Can i get a cucumber water . Earn 5 cash back that automatically adjusts to your top eligible spend category, up to 500 spent each billing cycle with the citi custom cash℠ card. I love it. [voice vibrating] ah, these bills are crazy. She has no idea shes sitting on a goldmine. Well she doesnt 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. Before we go, atlanta feds been a topic of discussion as they went to 5 tracking now 5. 8 or 5. 76. Thats from yesterday to today. And that takes the stronger than expected Housing Starts and industrial production. Its very strong growth for the Third Quarter. Quarter more than 60 days out for this official end of the quarter but were tracking well given all the Interest Rate hikes and a consumer hit by inflation. Do you think its why we lost some gains the better the market is youve been asking whether or not good news is bad news. Maybe it means the fed will have to stay higher for longer or go even higher. Thats why were watching yields above 4 minutes this afternoon might be dated stale well see what happens at 2 00 lets get to the judge and the half. Carl, thanks so much welcome to the halftime report. Im scott wapner the question of the hour, have we been in just a mild correction for stocks or the start of something bigger . The Investment Committee debating that issue today, joining me for the hour steve weiss, joe terranova, Kari Firestone and jim lebenthal. Lets check the markets. We are green on the dow. Negative on the s p and the nasdaq we lost a little bit on the dow. Joe, some technical issues weve been dealing with, the s p below the 50 day yesterday at the close, the russe