Skip to main content

tv   Squawk Box  CNBC  July 8, 2021 6:00am-9:00am EDT

6:00 am
seeing red red this morning stock futures pointing at big losses this morning. a lot of it has to do with the 10-year yield tumbling below 1.3% we will show you. big tech remains under fire. filing anti-trust lawsuit against google that didn't be good over its app store. japan officially declaring state of emergency olympics will take place, but fans might not be allowed in the stands thursday, july 8th, 2021 "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc i'm melissa lee along with joe
6:01 am
kernen becky and andrew are off this morning. the dow right now yoright now by 454. nasdaq down 189 points check out the action in the dow futures over the past 12 hours you can see we started making the move lower at 2:00 a.m. eastern time a driver of this is the treasury yields we have watched this the past day or so. the big move lower in the 10-year yield. right now, we are at 1.26% this is the lowest level since february 18th. joe, you know, 1.25% is the two-day moving average >> i think, you said for 24 hours for a couple of days once it got below 1.6 and got to 1.5 -- we said it is 1.5 to 1.7. it hit 1.4
6:02 am
we thought something weird was happening. then it breaks 1.3 that gets your attention that is the biggest market in the world in terms of money involved oil factors into it. i think all of these things factor into it because they are influencing the view of the economy and like so many things, there's good and bad. i think too much stimulus could cause the fed to tighten that could be negative not enough stimulus, and that is what people are worried about now. suddenly we don't have the economic assumptions that economists make with the rebound. those start falling by the wayside. the service sector yesterday, below expectations and it was contracting with jobs added. plus, you have more jobs open than people to fill them i think there is some question now as to whether these economic assumptions are going to be born
6:03 am
out. the wild card delta is now number one in the u.s. i hope that is not what it is. i hope the market isn't smart enough to smell out a resurgence >> we have seen around the world and we just got data that shows 51% of infections are now from the delta variant. economic picture has been mixed for a few data points. i said in the past 24 hours is when we saw the break of 1.3%. it has been seven straight days of declines in the 10-year treasury yield imagine 1.74 when we were worried about inflation and the economy heating up too quickly to where we are right now. that context, this is a decline here we are talking to santeli yesterday. when he said this forecast, it was shocking he said if we don't close the week in a band of 1.35 or 1.37,
6:04 am
it is a quick trip down to 1%. we are on the precipice of that. seeing that today. >> it is not like oil hasn't done its part to engender inflation fears. >> opec impact here. we are seeing a decline in oil this morning >> inflationary pressure hasn't gone away. it doesn't make sense. the fed didn't say most participants did not look at what the fed said in the minutes. even though they are saying they are buying early although things are reevaluating >> we knew that would be the case they would reevaluate depending on the data. the impact on the market you mentioned oil. cryptocurrency volatility is spiking. we started the week or ended the week at 14 between 14 and 15. here we are up >> this is not a surprise to
6:05 am
anyone it is purely risk off every single time. this is not core related. >> low rates are good to a point. yesterday to where we are right now and the question of breaking the two-day moving average and then it is risk off. >> the fed will have to stay longer because the economy is not strong it needs to print more money that is the anti-fiat of stability. it is speculation. it is just like assets people sell, they sell bitcoin this is not helping. regulators doing their part. it is 400 points let's not overdue it it could be the start of something. google facing anti-trust lawsuit over the app store the company abused its power over app developers through the play store on android.
6:06 am
google used anti-competitive tactics to extract a 30% commission over subscriptions and content. they accuse google of competing app stores stifling competition. the google the play store distributes 90% of android and apple faces a similar lawsuit over its app store there are anti-trust concerns rearing. when things start going south and we had people on this week saying i don't know what it will be i don't see anything on the horizon that's negative. then it starts happening why didn't we see all these things. >> i don't know if there are many market watchers who have guessed a week or so the yield would be 1.26. it is not the anti-trust it is not lawsuits that threat has been hanging over big tech for a long time.
6:07 am
declines in tech. >> ransomware. china. all of the china stuff didi s didi. >> right >> it is not a canary. it is a buzzard in the coal mine that's more than an aberration normally, you think. you go from 1.65 to 1.7 down to 1.2 or 1%? you smell a rat. former president trump announcing lawsuits against facebook, twitter and google and respective ceos. it is not clear how many lawsuits have been filed three have been filed in florida alleging the first amendment rights violated. they want to let trump back on
6:08 am
the platform google and youtube definitely banned him twitter permanently banned him after the capitol mob. news breaking within the last hour. japan's prime minister announced that covid related state of emergency for the tokyo region through august 22nd. the olympics will still take place, but spectators may not be allowed in the stands. general public will likely not be allowed to attend the opening ceremonies a ban on serving alcohol and in restaurants will continue. coming up, we will talk about the selloff in the stock futures. the slide in treasury yields that is next as we head to break, we look at the biggest pre-market decliners in the s&p 500 we have a mixed bag of materials, tech, oil
6:09 am
"squawk box" will be right back. >> announcer: this cnbc program is sponsored by truist securities look, as cfo it's my job to be ready for whatever's next. that's why i have my finance team, randomly hurl things at me. it's also why we use workday. it gives us insights, so we quickly pivot our strategy, people, planning, you name it. sorry, sir. i will aim straight at your next step. see that you do. would you like some coffee? workday. the finance, hr, and planning system for a changing world. ♪ keeping your oysters business growing fohas you swamped.ld. you need to hire. i need indeed indeed you do. the moment you sponsor a job on indeed you get a shortlist of quality candidates from a resume data base claim your seventy-five-dollar credit when you post your first job at
6:10 am
hey, it's good to see you. the company we've trusted to keep us working remotely,
6:11 am
is the same company we'll trust to bring us back together. cisco. the bridge to possible. [ "me and you" by barry louis polisar ] ♪ me and you just singing on the train ♪ ♪ me and you listening to the rain ♪ ♪ me and you we are the same ♪ ♪ me and you have all the fame we need ♪ ♪ indeed, you and me are we ♪
6:12 am
♪ me and you singing in the park ♪ ♪ me and you, we're waiting for the dark ♪ tech stocks under pressure this morning check out the widely held names. alphabet heiit the record high yesterday. the sector has been hot with the mega caps leading the way.
6:13 am
josh joins us now. josh, good morning >> melissa, let's start with the nasdaq closed yesterday at the all-time high it is now up 14% for the year. digging in the names amazon trading at the all-time highs. andy jassy taking over as ceo. checked in amazon. he said jassy is the right man for the job. he built aws. he knows high growth and business returns apple closed at an all-time high the iphone maker is up 15% in the past four weeks. bulls sounding confident jpmorgan chase expects apple to out perform in the second half another basket of tech stocks performing well is the work from
6:14 am
play home. docusign at all-time high. peloton up 13% in the past month. cybersecurity is another se secrsector to watch they have been placing their bets which are all up strongly this week. back to you. >> thank you for more on the tech sector, we are joined by gabriella santos great to have you with us. from what i read, you thought yesterday's decline in yields was technical. i'm wondering what you attribute today's move to. >> sure. good to see you, melissa if we have to be careful here this morning about the narrative we tell about weakness early this morning in markets. i think we have some very unique dynamics happening for certain assets even where there is a broader
6:15 am
map growth story, it is not about variants or lockdowns. it is more what a normal economy and earnings looks like and if we are paying the right price for that in terms of treasury yields, especially, i put it in the first bucket this is very much a distorted market where we are in a particular time period where the fed is buying 100% of net treasury issuance. that is something we have not seen during qe over the last decade the environment that investors were caught by surprise from the initial falling yields now scrambling to short coverage it is very much a technically driven fall in yields. this retracing of the half move higher from the first quarter. for us, that is important. it means once fundamentals reassert themselves in the
6:16 am
second half of the year, this is a temporary retracing. >> why will fundamentals retrace in the second half of the year when the fed is the large purchasing of bonds? >> the second half of the year and next year, the strange dynamic where the fed is buying 100% of the net issuance will fade and go back to normal treasury has been low. abnormally low it issued a lot of bonds in advance. it will go back to the regular issuance we expect the fed to announce they will taper at some point in the future over the next six months their demand of bonds will come down and investors will start to price that in. the market will become much more normal and focused on the normal
6:17 am
economic inflation perspective we should see the 10-year end the year closer to 2% and continue higher over the next 18 months toward its normal resting place which is closer to 3%. >> in a normalized market, gabriella, what should we pay for the s&p 500? >> that's a good question. i don't think this is a delta var variant. vaccines have se vrks evered thr of hospitalizations. once we're past the recovery and firmly in expansion mode, what is a sustainable growth rate for
6:18 am
the economy and earnings and what is up ahead this is a supportive back drop we don't expect the hard landing. it is more of a soft landing back to normal the trick is we have already priced a lot of hope into multiples. returns going forward will be a lot more muted and below earnings because we do expect a multiple contraction it is probably closer to 18 times or 18.5 times. it is more what is happening beneath the surface. >> maybe this pull back is warranted? if that is what the markets are looking forward to, the normalized economy, and you should say we trade at 18, then the markets have it right here whether it is a response to bond
6:19 am
yields or not? >> i think the trajectory for the market over the next 6, 12, 18 months is higher. it is a slow grind higher. what will get higher is the revision of upwards earnings expec expectations that will continue in the normalized economy the return won't keep up with earnings because you will have the multiple contraction we have seen that the first half of the year. earnings expectations moved higher 20% the market returned 15% because we had a multiple contraction of 5 percentage points. >> the "e" gets bigger. >> exactly >> we are fretting about 1.25. violating that going 1 you say that is just noise because the bond market is discod dist distorted? there is no message coming from the bond market? >> absolutely. we don't think there is a
6:20 am
fundamental message here that is important with portfolio positioning. we don't think we should make adjustments at this moment in time we expect the resteep eening of the curve. we are in fixed income we want to be under weight it also means we wouldn't be changing risk on position especially reflected in equities especially we still continue to like certain sectors both within growth and value and financials a big one within value that can still benefit up ahead from the re-steepening of the curve the one thing of equities, the most important factor going forward talking about normalization of the expansion is quality so much less about which style you pick, growth or value. quality is the most important factor >> gabriella, thank you. >> thank you, melissa.
6:21 am
swe talked about it japan is buying. europe is buying bonds everybody is buying it because it makes sense to buy. stock investors. if you see the bond market do this, you will act first to see whether you don't know what is going on and 500 points is not the end of the world s&p was up 15% in the first six months what happened if you have long-term stock returns of 7% and you do 15% in the first half of the year? if you had worries, you would get out? >> the reality is there is a reaction in the stock market to bond prices even if intellectually think differently. right. the world's largest charity is out with a contingency plan in case bill and melinda gates can't work together. details are next.
6:22 am
three stock stories as we head to break. this is hard to do this first one quickly. get me started on wd-40 and i don't know i need to talk about it. third quarter results topping forecast companies raising revenue guidance ceos expects sales to rise you know what it stands for? it is a water displacement formulation. 40th one water displace pment formula two things in life duct tape for things moving that shouldn't. wd-40 for things that aren't moving, but should >> not considered a lubricant? >> it was used by first responders to remove a burglar from an air conditioner duct we got to movie. mcdonald's rolling out the customer loyalty program
6:23 am
nationwide i'm here i haven't heard about this i'm loyal? number three watch farfetch today remember ftch. maybe not a name you heard of, but cathie wood just bought shares for a second day in a row for ark w. next generation internet fund. this is what you watch cnbc for. now you know farfetch it is an e-commerce luxury site. we're coming right back. or it could be the day there's a cyberthreat. get ready for it all with an advanced network and managed services from comcast business. and get cybersecurity solutions that let you see everything on your network. plus an expert team looking ahead 24/7 to help prevent threats. every day in business is a big day. we'll keep you ready for what's next. comcast business powering possibilities.
6:24 am
♪ ♪ ♪ ♪ ♪ ♪
6:25 am
you packed a record 1.1 trillion transistors into this chip i invested in invesco qqq a fund that invests in the innovators of the nasdaq 100 like you become an agent of innovation with invesco qqq - grammarly business turned my marketing team into rock stars. (diana strums guitar) maya swears by grammarly business because it keeps her work on brand and error-free. fast and easy. - [announcer] learn more at
6:26 am
what if you could have the perspective to see more? at morgan stanley, a global collective of thought leaders offers investors a broader view. ♪♪ we see companies protecting the bottom line by putting people first. we see a bright future, still hungry for the ingenuity of those ready for the next challenge. today, we are translating decades of experience into strategies for the road ahead. we are morgan stanley. the bill and melinda gates foundation with contingency
6:27 am
plans for the charity future the namesake couple planning a divorce. if after two neyears, the two decide they can't work together, melinda would receive personal resources from the philanthropy work the foundation plans to add trustees outside of the couple's close circle to better governance that news shadowing the news of the $15 billion donation over the next decade adding to the $50 billion of the foundation. the retail industry suffers the biggest back to school shopping season in years spending expected to reach $32 billion. according to the report, technology is a key area of spending, but apparent papparel
6:28 am
expected to soar. stocks tumbling at the open. we will show you what is moving next as we head to break, look at yesterday's s&p 500 winners and losers >> announcer: executive edge is sponsored by at&t business our people and network will help keep you connected let's take care of business. met. oh, we can help with that. okay, imagine this... your mover, rob, he's on the scene and needs a plan with a mobile hotspot. we cut to downtown, your sales rep lisa has to send some files, asap! so basically i can pick the right plan for each employee... yeah i should've just led with that... with at&t business...
6:29 am
you can pick the best plan for each employee and only pay for the features they need. (realtor) the previous owners left in a hurry, so the house comes with everything you see. follow me. ♪ (realtor) so, any questions? (wife) we'll take it! (realtor) great. (vo) it will haunt your senses. the heart-pounding audi suv family. get exceptional offers at your local audi dealer. the world's first fully autonomous vehicle is almost at the finish line what a ride! i invested in invesco qqq a fund that invests in the innovators of the nasdaq-100
6:30 am
like you become an agent of innovation with invesco qqq
6:31 am
good morning checking the futures dow down 517 points. s&p down 64. nasdaq closed at a record. now down 200 points. a lot of the numbers are from elevated levels given the great first half that most of the indexes have had a lot had to do with the 10-year note it has come down we'll know in due time it has come down from 1.65% in
6:32 am
the last six weeks or so down to 1.25%. i appreciate the tweet that says you people were freaking at 2% now freaking at 1% make up your mind. >> meaning too high? >> the 10-year going to 2% you're squared it goes to 1%. you're more scared what do you want >> we personally are not scared. >> no. >> we're reporting >> paraphrasing. the world. you people is never -- >> you start off with you people you are asking for trouble >> i meant people that do financial news on tv special survey of cfos revealing the sentiment for the return to the office this fall frank holland joins us now return to the office return to the studio
6:33 am
depends on what your occupation is, frank, right >> absolutely. people outside of the business journalism world not you people one-third of tech leaders and hiring managers say their employees will return to the office at first. a lot of caution in the corporate world. this survey in june with concerns over the delta variant. 33% will have in-person as the only option. and then the mix or hybrid is the plan for the second half of the year vaccines are part of the plan. 16% responded say the vaccine is mandatory for returning to the office and 70% said vaccines would not be mandatory employee safety and wellness is the consensus according to the survey
6:34 am
respondents citing employee productivity and aligning with the company mission. look at the results. 84% believe workers are productive or more productive than the start of the pandemic joe, back to you >> frank, return to the office obviously, we're new at this it is an evolving situation. any more definitive decisions to corporate travel why do we need to do it? we love zoom >> you know. it is funny. according to the survey, people believe in-person working has a lot of value to it corporate travel is already making a comeback. 64% corporate travel allowed, but restricted more than 25% say just allow flying or driving or visiting customers. >> i hope so i do i'm thinking of buyers and
6:35 am
sellers. you have the buyers are the people who want to go to conventions and meet with employees and coworkers. you have the people that sell that stuff hotels like las vegas and convention centers let's not abandon that >> joe, there is the -- >> what? >> there is the generation sun valley conference. people see the value in coming together and meeting and talking face-to-face >> right i don't know about that. that's just particular business travel >> that can go away. >> i don't know. that's hiking in beautiful pl places >> are you jealous because you are not there and becky and andrew are >> that's it >> ding, ding, ding. >> maybe next year
6:36 am
see you later. >> it is beautiful the mountains in the summer. amazing. thanks, frank. almost every automaker in the world planning to develop the electric vehicle salantis has the latest. let's get to phil lebeau >> melissa, we will hear from the ceo as he will be delivering the ev strategy for stalantis. why is this so important they are basically not in the game with evs. at least in north america. they have offerings in europe. they do pretty well over there here in the u.s., jeep and ram is what we are talking about with fiat and chrysler with stellantis they have three plug-in hybrid models how quickly are evs coming to market look at the number of models on sale through 2025?
6:37 am
125. sales are expected to top 1 million by 2024, if not by 2025. the competition is coming. they need to get in the game also, you have two primary competitors. gm and ford. the ford f-150 lightning which is pouring billions in electric vehicles and autonomous vehicles a combined $64 billion through 2025 stellantis much lower. i'm not sure they are planning to spend a couple billion right now. we will get a bigger outline later on today they need to have dedicated plants gm and ford have done that shares of stellantis like the rest of them they had a nice move in last year we will hear from him 8:30 a.m. eastern time look for billions invested
6:38 am
the number of new models we will all focus on ev jeeps and ev rams. that's where the market is headed they need to be in the game. >> that's it for you today, phil your focus on cars all right. >> yes did you want me to focus on something else, joe? >> on all of the things that move you come on six times. a air carriers race to pick up. travel rebounds. >> wheels and wings, my friend >> they were not ready a lot of problems with the air y this is a surprise people want to travel again? >> not a surprise. >> it is like you have to restart everything it may not run smoothly. i guess that's what we're seeing i thought you would -- you are
6:39 am
on anything that moves as you said. >> years ago it was the bankruptcy court now anything that moves. >> duct tape or wd-40. if you missed that, you have no idea. the 10-year treasury yield tumbling below 1.26% dow futures tumbling 500 points. don't miss our interview with sofi ceo anthony noto from sun valley he's out there >> announcer: currency check sponsored by interactive brokers. professional's gateway to the world's markets.
6:40 am
6:41 am
6:42 am
welcome back futures down 506 on the dow. the 10-year fell below 1.3%. it's just basis points we're talking about less than .50 in the old days. >> the old days? >> i said it the day of the '87 crash 300 basis points
6:43 am
joining us now is the senior managing director and cnbc contributor. is it the 10-year that is raising eyebrows for stock traders, joe if so, what is happening with the 10-year? what is it telling us? >> good morning, joe we have been trying to figure out the riddle that has been messaging from the 10-year since june when it fell post fmoc from 1.59 to 1.30 good luck figuring out the reason the important thing, joe, is the reason and position. was the overwhelming majority expecting a 2% for a u.s. 10-year treasury you are seeing a dramatic repositions under way with the equity market. we are coming off all-time highs posted yesterday over overnight, the news from chinese policymakers of the reversal because they are concerned about
6:44 am
growth their view is growth is slowing and now they are witnessing that they are talking about easing or loosening policy taking the reserve ratio requirement and allowing that to be lower and have banks provided with more liquidity to put forth for customers and small businesses >> the fed is, you know, on one hand i hear something rumbling about a plan or to come up with a plan to take something away. on the other hand, i hear we're very aware that this is the economy is not a slam dunk we have the great rebound. we're ready to provide assistance if needed they are saying both i think they need to >> well, joe, they have been saying both since the great financial crisis for the better part of the last ten years. the 10-year which averaged 2.3%.
6:45 am
it spent 90 days above 3%. we heard the rhetoric from the federal reserve for years. it is the deflationary impact of the economy and technology dominance within the economy is creating an environment where we are going to see below trend economic growth and i think that's the challenge we have here in 2021 as we normalize the abnormalities of 2020. the expectation of growth is misplaced. where is the organic growth coming from when the fiscal spending fades >> right does that mean -- we have people who think we spent too much. again, nobody agrees people spending too much and others who think we haven't spend enough that will be bad for bonds if you spend too much if you don't spend enough, then the economy doesn't recover
6:46 am
quickly. it is like everything. you can make a case for either side >> ultimately, it means monetary policy remains present sdp >> what about fiscal another $6 trillion after that when does that become an issue in terms of higher rates how does that eventually doesn't cause an increase in borrowing costs which would really be a problem? not yet. >> not yet we had that expectation for years. i think what is important to focus on is the continued presence of monetary policy. joe, ask yourself the question the size of the federal reserve balance sheet grew 100% from 2008 to 2009 is that federal reserve balance sheet going back to where it was in 2007? >> do you -- do you think the
6:47 am
10-year could be purely technical? we had gabriella santos tell us that european buying and japanese buying it makes sense for them to do that if they don't think the dollar is going to collapse it makes sense for them to buy the bonds. >> yes, it is always technical when you have it priced below 1.30 yes, it is technical we're talking about the olympics now potentially not having spectators that is not something we were thinking about six weeks ago there is concern there you have the reversal in chinese monetary policy. you have the european policymakers talking about a 2% inflation target there is some fundamental action behind the pricing that we're currently seeing for a 10-year go back to positioning there was not a collective positioning that believed that
6:48 am
you should be aggressively buying government bonds. it was quite the opposite. many people were coming on the network and talking about being short government bonds and 2% and inflation. here it comes. it is important to always consider where we are with positioning. with the equity market, that is why you are seeing mega cap technology front and center again. that is where you find the defense in the market with the growth oriented mega cap technology names >> nasdaq was high not too long ago. still is until we open. thanks, joe. see you later. coming up, how businesses need to respond to the stunning rise in cyber attacks. our next guest has the solution. check out the major crypto coins hit this morning all in the red bitcoin down 5.7%. ethereum is down 7%. we'll be right back. now it's, "network, network, network."
6:49 am
so you need a network that's built right. verizon business unlimited starts with america's most reliable network. then we add the speed of verizon 5g. we provide security that's made for business. and offer plans as low as 30 dollars per line. come to verizon small business days on fridays in july to get a plan that's built right for your business. competition beat us again. how? they have a better finance system than we do. i feel like they might have a better finance system than we do. workday. how do they make better decisions faster? workday. it's got to be something workday. i think i got something. work... hey, rob, you're on mute. hello! hey, rob, there he is.
6:50 am
workday. the finance, hr and planning system for a changing world.
6:51 am
6:52 am
however terrified you are about cyber security, you are probably not terrified enough. the fact that all of the infrastructure is there, the ability of worldwide hacking, they do that in order to make ransom attacks it is a critical issue one part of the solution will be startups we as venture capitalists will be doing >> linkedin creator speaking yesterday. joining us today an expert in cyber security and protecting businesses. is there a solution if people have spent enough money. can it be done or do we even need to look to crypto >> no. there are solutions to these
6:53 am
let's stop this from spreading this needs to be balanced with preventing let's minimize the amount and react at that point in time. there is a simple way to go that is bad that is called application white listing. it is a simple concept black listing is trying to keep track of everything known bad. white listing is everything known good the reason the viruss are entering the network is that they are neither they are unknown it is not known to be good or bad. if it is not on a good list, it does not enter the network everyone needs to get into security that is focused on
6:54 am
prevention it is really that simple this is where the federal government is going and we need to deploy this more rapidly throughout the rest of the country. >> so it is ready to go. they won't develop something to get around that. you heard reid haufman say it would be startups. >> i'm not sure. we saw here. 1,000, they get in and then 1,000 computers get infected within a day i also want to remind you that two weeks ago, 23 texas cities, the same things happened our response needs to be about application white listing and prevention as opposed to just reaction >> rob are you agnostic on
6:55 am
bitcoin, do you think it is just a method used as a tool for ransom wear or part of the problem that needs to be addressed because it seems to be necessary to do ransom wear. >> it is a way of moving money around if you set down one, you would move to another. right now, as everybody knows, bitcoin is the most popular for ransom wear and other transactions if you knockdown one, the barrier to create another cryptocurrency is quite low. >> everybody needs to spend the
6:56 am
money and toughen up the system? >> application white listing start googling that and put it into your security stack and all of those other things there let's say by factor of 10 reduce the chances of getting hit by ransom wear. let's not for get ransom wear is a business by and large, everything we are seeing in the news and stuff has to do with monday 'tisation of security holds by using application white listing, you are closing those security holds that's really the answer here, whenever we see these things happen, we say how did they get in and let's close those security holds that's what we need to do. >> at least you have a viable
6:57 am
solution people are kind of panicking about this coming up, a check of dow futures. the dow down the volatility index is no surprise we'll show you what is moving straight ahead energy secretary coming up energy secretary coming up on [ding] power e*trade gives you anng mobile app with powerful, easy-to-use tools and interactive charts to give you an edge, 24/7 support when you need it the most and $0 commissions for online u.s. listed stocks. don't get mad. get e*trade and start trading today.
6:58 am
♪ ♪ ♪ digital transformation has failed to take off. because it hasn't removed the endless mundane work we all hate. ♪ ♪ ♪ automation can solve that by taking on repetitive tasks for us. unleash your potential. uipath. reboot work.
6:59 am
new projects means new project managers. you need to hire. i need indeed. indeed you do. when you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria. visit and get started today.
7:00 am
. the latest on this morning's market move is straight ahead. china's crackdown on didi. and can facebook build their own clubhouse. the second hour of "squawk box" begins right now.
7:01 am
welcome. it is 7:00 on the east coast becky and andrew are off today futures are a little better than before we are now down about 449. nasdaq closed at a record. giving back over a little 167 points right now there is the 10-year, which has been conjectured, speculated upon talked about we are wondering what it could mean and what it is causing. let's get right to dom chu >> it is interesting there is a broader narrative of
7:02 am
this notion that it is covid fear of economic growth. we are seeing evidence of some of those play out in the market early on if you take a look at some of those reopening plays. those that have come back since covid subsided it is the names we've talked about on the covid side of things travel and leisure, that's down. that plays into the narrative. carnival is down about 4%. darden restaurants is down exxon mobil is down. the covid variant is kind of playing out in these kinds of trades you would think some of these
7:03 am
work at home would be catching a bid. that's not the case. take a look at zoom, which is down docusign and peloton, fastly, all down it is a little more broader based. you mentioned the idea of the 10-year note coming into focus at one and a quarter percent, we have to go all the way back to the early part of spring or late winter to see the same levels we are talking about. you can't really see it here, you see the general trend line is higher and leveling off that is the 200-day average level that has brought support for yields in prices going back to the fall, late october, maybe early november of this past year if all of that is in play, what
7:04 am
is it in terms of the narrative, it looks as if it is a general aversion trade >> you can't find things that are up, maybe it has more to do. just that things have moved a long way a little pull back and uncertainty. it is kind of like what you'd see, dom, if we were moving towards 2% on the 10-year, everything would be down instead we are moving towards 1% and everything is down >> so joe, to your point, i thought about that as well a lot of traders are thinking about that too let's look at some of the places you would see and maybe take a little more move with interest rates. banks have been in focus for a while. as interest rates have come down, they've come on with it. jp morgan and city are down with
7:05 am
it those growth portions should be down a bit interest rates are lower, you could justify it helps not so much with apple and nvidia it might signal this debate of the fear of overall risk of flight to safety hitting every part of the market that is better than we have seen it certainly stands to reason as we enter the opening bell if we do see some signs of stabilization in some part of that technology trade. >> thanks, dom one of our other friends on the phone with us.
7:06 am
jim cramer i saw you tweeting earlier you found a few of them. even antitrust-type stuff. when you get the 10-year going down, does that make traders look for other things. what do you think is going on? >> i think there is a couple of things people look at that and speculate. i do think the market took a real hit when japan said no spectators, which makes you think wait a second, are we back in that world? there has been an endless amount of speculation if you watch the memesters they've broadened out a little bit. yesterday, they tried operate a company they call new egg which they took to $25 billion we have to be careful.
7:07 am
this is no longer a couple of guys just having fun now alphabet and crypto we look at this thing to the right. that freaks out people too you go to eunice, china doesn't want bit dinning anymore there is so much speculation and supply >> is it delta or fears maybe we were too optimistic about growth does that have people wondering if it is rebound or needs more
7:08 am
stimulus >> i think people have worried it has cooled a bit. in that part where it has viewed there's a lot of problems right now. china has been the source of much growth and travel take a look at boeing they must have been looking at some sort of equity. that would have been the last thing. i still think the dollar is a major reason why people are buying our car overseas, they are buying our treasury as well to say the delta variant has
7:09 am
made it where the people who are not vaccinated are having problems, i thinks that true we are looking at some new bad numbers. i can't wait to see what happens between now and next week when delta will be the dominant form. >> at this point, would you urge fiscal or monetary people to ramp up the stimulus or start being aware that that could be self-defeating long term >> yeah, you've got to play it different ways i wouldn't do anything if i were the fed. >> do we have to look to infrastructure and social infrastructure is there a law of diminishing returns there. you keep doing what you were
7:10 am
doing to be helping. sooner or later, you don't get the same bank for your buck. >> it was an attack. the things coming out of the white house are anti-business. obviously president biden is furious so much money is being made by too few people >> i'm done defending billionaires you get hammered for it. it is not my problem >> the billionaires have to keep their heads down i do think this is a moment where the speculators have overreached. you watch amc and game stop go down and watch the $23 billion
7:11 am
that came in the market leave. i tell you, we'll continue to see a lot of stocks go brutally up because the memesters have broaded out. they call it the full plate problem. >> the last thing he was looking at is overflow and payment they have to say it. >> if that happens, jim. they say the further declines in some of these stocks continue. that's additional downward pressure on the markets, you are saying >> yes i think you and i would agrees that the kind of downward pressure that would grow back faster we needed this money to go into the spots doing well
7:12 am
virgin galactic or coin base global wish but this nest egg yesterday. that was a speculation too far they gun stopped up 1,000 percent. no that's got to stop >> wish. they are wishing upon a star, not the moon let them have some fun >> a little bit hearkening back saying, you know what, these are the guys i work for. i think i should issue more stock. it is what i should do to make amc a better company for the future i'm giving in to the meme guys because that's who i work for. >> he's acknowledging what they
7:13 am
want >> they become establishment at that point >> 80% of the share holder base. that's the reality he lives in i'm not saying right or wrong. >> look, i think you guys are totally spot on. what's happening s, think abou it adam aaron says i'm not doing anymore stock, the stock goes down how is that possible the money goes to faang. semiconductors start going on. i've been watching micron. you seen that one? that is just a crawl i'm new egg, that's a solid company. we have to start acknowledging that the crazy tape that runs beneath us in the morning where you see the manipulation people are doing what the heck they
7:14 am
want we are all used to the end game. we see that kind of stuff, the musical chair stuff, that is not a positive that's got to end. >> this doesn't mean you are coming back at 8:45. >> i'm watching your show. i'm addicted i'm glad you guys let me play. >> it is great having you on one thing we've learned. markets, that's when we need to focus. new viewers. how many people are saying, wow, look at the market i better check out this meme stock. right? >> to the moon that stuff is no longer funny. go get em, guys. i'm no longer laughing newegg is gonna crush the nest
7:15 am
egg. >> coming up, china's crackdown on didimay give other companies pause perfect going public in the u.s. and concord acquisition corp circled $4.5 million. circle ceo joining us on "squawk box" we'll be right back that's easily adjustable has no penalties or advisory fee. and we can monitor to see that we're on track. like schwab intelligent income. schwab! introducing schwab intelligent income. a simple, modern way to pay yourself from your portfolio. oh, that's cool... i mean, we don't have that. schwab. a modern approach to wealth management.
7:16 am
7:17 am
the latest from the china crack down eunice is with us. >> i'm in the tech hub where the chinese government revised renovations. really having chilling affects one company, linkdoc a medical data is the first to get cold feet to list in the united
7:18 am
states several reports it had raised $211 million other chinese companies are on the docket as well it is still a big question mark as to whether they'll go ahead with those ipos and at what pace they've announced an exchange. saying they'll tightened time of pricing and ipo cutting that down between five to two days. this would match the process in new york as well as other places in europe. the idea is to make hong kong more competitive the big tech companies here having beijing baring down on their necks yet again. the banks said that the
7:19 am
regulations that will apply will not only apply for alibaba's ant group and other payment companies. the details of those will come soon also the wall street journal is reporting the cyber security watch dog which in the past had really been the regulators that they had seen. that watch dog was established by president xi jinping in 2014. as you know, xi jinping is getting more power that's been reflected in another announcement we got. they decided to set up a research center in beijing that
7:20 am
will be based on the xi jinping's economic thoughts. that research center will take what they believe are xi jinping's best economic ideas and turn them into practice. >> is there any talk on the crack down of chinese companies already listed in the united states >> it is easy to say with the recovery and how about for the ones that are already listed >> there has been some discussion about that. if they have new offerings that these regulations announced a couple of days ago would apply that said, there is not a whole lot of clarity on these
7:21 am
guidelines at this point, we really don't know joining us now with more on the risk of these companies. >> chief financial officer of yext he spent time over there working for hp in china. you know they can be fickle and changed in a moment's notice that kind of seems like what happened with diffedi p this time something did happen what changed in the last two weeks in china >> when i worked there in the 80s, it was chinese business law. the reality is policy. ccp owns everything in china when you change policies, you have to shift. they are doing this quickly.
7:22 am
i'm not sure what the motivations are. you can lose money and that was okay in the asian exchange, that is a little more difficult. i wonder if that was not a focus of bringing those back and forcing the companies to list those rather than in new york. policy changes mint by minute there. one has to be very aware and policies can change the next morning when you wake up >> people say we are worried about our data >> they are worried about their data coming over here, it is really not that, they just want their money back >> i think that's a part of it keep in mind, it is wealth creation for citizens, i do think you hit a point that data will be a bigger and bigger roll
7:23 am
china clearly controls the data they have on their residents so data privacy and data control and big data usage by ccp will be a big part of what you see, i think, going forward >> the point was made that investors here love the chinese ipos the reports can be higher and will take on the risk involved do you think that it is over now. >> i agree i'm not sure i actually believe india is an aspiring country and we know they operate under commonwealth law.
7:24 am
it is commonwealth law the chinese market is sophisticated and will grow. >> it is still as far as you are concerned in the ipo world even in india, you can see what is involved with china >> i wouldn't be in hong kong today if my life depended on it. it is a dream that one country, two systems would exist. i think there are better opportunities with a lot lower risk outside of china. >> appreciate your time today. thanks >> if they try to buy my privacy stuff, i've never bought anything online.
7:25 am
>> what about all of your betting. they could do that >> they could. they've got nothing from me. >> what about the loyalty programs taco bell knows how many tacos you buy. >> i can't believe i'm not in the mcdonalds loyalty. coming up, talking about the president's clean energy plan with infrastructure. we'll be right back. which popular snack was invented in the early 1900s by the jackson cracker company? the answer when we continue. with that unexpected bill from her back surgery. aflac! let's see that one more time. ♪ ♪ (bleep)
7:26 am
(wincing) oooh, right in the wallet! ouch! aflac! aflac would have paid jill cash directly to help with expenses health insurance doesn't cover. hold on, i think she's trying to give us a side-eye... because she can't turn her head! (laugh) get help with expenses health insurance doesn't cover. get to know us at only 6% of us retail businesses have a black owner. that needs to change. so, i did something. i created a black business accelerator at amazon.
7:27 am
and now we have a program that's dedicated to making tomorrow a better day for black businesses. ♪ ♪ i am tiffany. and this is just the beginning. ♪ ♪ no one likes to choose between safe or sporty. modern or reliable. we want both - we want a hybrid. so do banks. that's why they're going hybrid with ibm. a hybrid cloud approach helps them personalize experiences with watson ai while helping keep data secure. ♪ ♪ ♪ from banking to manufacturing, businesses are going with a smarter hybrid cloud, using the tools, platform and expertise of ibm. ♪ ♪ ♪
7:28 am
now the answer from today's trivia question. which popular snack was invented in the early 1900s by the jackson cracker company. the answer, the ritz cracker
7:29 am
nabisco changed the name to ritz >> taking on clubhouse and sub stack with facebook bull he ton. can facebook beat the upstart. here to weigh in good morning >> sure, facebook can meet them. roughly 44% of all human beings. also facebook beating these will look a little different than one would expect that would become exhibit g in the anti-trust case. the way they beat this is becoming nimbal.
7:30 am
good products if they lean into the demand clubhouse said they have 10 million users but to a 2.34 billion using service like facebook, that is not. facebook just signed malcolm glad well-known to sell millions of books all by himself. facebook isn't going for the ko. >> do you think facebook has the c capability to crush companies but it doesn't want to >> on the other hand, i think facebook will fail to catch clubhouse and sub stack. if that were remotely true, facebook watch should be doing better and at least get on the score board. how come the only facebook watch show i can name is red table
7:31 am
talk facebook bought occulus 10 year ago. microsoft was working hard to make a hand-held computer. remember the zoon. they said let's make one but not so much that it crutches ipad. that is not facebook's mo. facebook is known for owning the audience and renting it out to others on its own terms. >> either way, it seems facebook could be at risk if they work too hard >> could be. but they have to try as hard as they can if they want to stay relevant still to come, u.s.
7:32 am
secretary of energy to talk u.s. oil and more and fintech firm circle announcing plans to go public via a spac "squawk box" will be right back. you got your existing customers — they also get our best deals. everyone. gets. the deals. questions? got it. but, why did you use a permanent marker? because i want to make sure you remember. i am going to get a new whiteboard. it's not complicated. only at&t gives everyone our best deals on every smartphone. like the samsung galaxy s21 5g for free. jerry is here! j! mate, how are ya!? it's so good to see you. good to see all of you, yeah! why is jerry so... popular? it's been like this ever since we started using workday. what do you mean? it makes it easier to develop great relationships with our suppliers. now everyone, everywhere loves jerry.
7:33 am
they sure do. they do. they really do. mmhmm. workday. finance, hr, planning and spend management for a changing world.
7:34 am
7:35 am
welcome back to "squawk box. taking a check at futures. the dow is looking at 465-point loss at the open we are a little further than we were an hour ago looking at some of the transport airlines they are all lower cruise ships, they all fit in the narrative. there are many narratives that apply. maybe the economic reopening that is as good as it gets maybe it is slowing down automakers, airlines, cruise lines battle >> you have to go beyond what it means when japan says no
7:36 am
spectators who does that affect it is the overall feeling of here we go ago >> when they canceled spectator sports, that changed the mindset. maybe this is delta variant, the threat of something else coming. we are not pricing it in >> right maybe we are trying to figure out the 10-year. president biden is pitching in the bipartisan deal. passing the bill back are receiving a push back from republicans. senate leader mitch mcconnell with more. great to see you i had secretary buttigieg on and i said, admit it, mr. secretary,
7:37 am
wouldn't you really just like to do a transportation bill of classic infrastructure and i'd say the same thing to you. wouldn't you just like to get the first one done without all these contingencies. some people think a stimulus could help and more is needed. calling human capital infrastructure isn't that self-defeating? >> no. i mean i'm an american i want america to succeed. i want all infrastructure to succeed including human infrastructure >> yesterday, 75 corporations came out in favor of the clean
7:38 am
energy standard. these are general motors to p paypal to google we are excited about the whole thing. i feel very optimistic we'll be able to get it >> we heard the bipartisan plan when the president came out. he said i'm only going to do this with the follow on. they all looked like they had indigestion. i don't think you are going to get that other $6 trillion the reality is maybe manchin will go along with it. you think they'll do both?
7:39 am
>> i do. the plan the president put out is in two parts. this is a negotiation. i don't know whether we are going to get the whole thing the president asked for but so much of it is good for the people who watch your show. he's calling for two years in community college and infrastructure you've had guests on this morning talking about china and their five-year plan he's really calling for an historic investment in the united states it definitely gets bipartisan support among voters. >> we talk about a transition to
7:40 am
a cleaner form a lot and we noted the biden industry is pushing opec to drill more or produce more >> oil goes above 75 it seems like a strange position of not wanting to drill, canceling keystone and acknowledge how important it is to economic growth globally at this point how do you walk that fine line >> this is clearly a transition. the president does not want the transition to be on the backs of ever day citizens. that's why he made sure in his negotiations overall his red line, he will not raise
7:41 am
taxes on people earning under $400,000 he does want to see us move forward. ultimately, it is cheaper to drive a vehicle and hopefully we get to this point without having to go to the gas station which is powered by renewable clean energy not everybody can afford that. so bottom line is, you got to do both >> there was a team of leading researchers. leading sustainability researcher to get to zero on in terms of the carbon foot print in this country by 2050, we'd need to cut energy use by 500%, live in
7:42 am
a smaller home and fly once in every three years. >> totally do not agree with that that study didn't include clean energy >> how much sacrifice should americans expect to do >> no sacrifices i'm head of the department of energy and the solutions department that's why we need to make the investments in technology that will enable us to have the quality of life we know and do it using clean energy. by the way, that's a $23 trillion global market >> do you expect china and india to sacrifice they are still building coal plants >> they have to stop no doubt suggesting they are not stopping we are not stopping either do you know how much money we spent just cleaning up after these weather events
7:43 am
we are going to continue to es ska escalate we have to wrap ourselves around those india, china and make sure they live up to their agreements >> you seem to suggest climate change might have helped to cause that tragic building collapse >> i did not i said we do not know when caused that building to collapse >> it seemed to be implying there was a tie between climate change >> the question asked about climate change i said we do not know. >> if it's not a structural problem with that particular building >> we do not know. >> anybody who lives near the water probably should worry if it wasn't a structural problem with that building >> listen, the engineers are going to be looking at that
7:44 am
building allow that to happen i push back strongly on those who want to politicize this event. we do not know yes, climate change is happening. two separate statements. >> madam secretary, thank you. >> you bet >> the markets today there may be something to the notion of the infrastructure bill we don't get many opportunities to do these. if we get push back again, we could end up with nothing. that was my only point at the top? >> let's hope we can continue to invest in our country. that's important if we compete globally that's what this is all about. >> we are watching the treasury this morning below 1.26% right now.
7:45 am
with us now, chief global market strategist what have you decided about your view on the 10-year at this point. >> i'll answer in one second i want to say something to you to encourage viewers to join me. joe has been on "squawk box" now 26 years >> today is your anniversary >> a couple of weeks ago >> the answer to the question -- >> i thought you were going to say 26 years long enough i get that a lot on twitter. >> congratulating you. >> thank you, sir.
7:46 am
they are being accomplished by the fed. i wrote a piece where bonds have no value left we are seeing corporate bonds and high yield bonds. also making a comment with all that squawking, if you will. >> it is a global marketplace, mark we need to remember that
7:47 am
considering money moves across the border so easily is it artificial from the fed buying anything in sight to keep qe going and rates low >> the answer isn't one. the answer is both >> if you look at the european union you can go across any country you want including italy and greece, japan, switzerland their yields are significantly lower than american yields that is driving some money here. their central banks are much more aggressive. >> i keep wondering at some point having to do with the
7:48 am
stimulus packages the administration is proposing, the fed is part of the u.s. government the fed by the federal reserve act of 1913 is part of the u.s. government. i wonder if that current administration is going to come along and say, gee, how come our yields are so much higher. i think we'll see a continuing and what i said to my institutional and retail clients is shift, pivot and start looking at closed in and exchange rated funds to get outside yields compared to corporate or even high yields.
7:49 am
you can get way higher yields than you can find in the bond marks. >> more or less in terms of stimulus >> let's talk fiscal stimulus. is more or less gonna help the economy and the markets? now we are hearing we aren't getting more stimulus so it should go down is it ever going to be enough is enough >> i think there is tremendous pressure to keep interest rates low on all the central banks and the companies they represent they are issuing debt and they cannot afford higher interest rates. it is great for the governments but terrible for investors, especially individuals that used to have some part of their portfolio in bonds and income.
7:50 am
they can't get it and i keep saying pivot to close in some funds and change in the funds. they are complicated and know what they are doing. you get more complicated there than in the bond market. >> how long you been doing this? you make me look like a kid. >> 47 years i've been on wall street >> you see, 17 years me and you 17 more together think about that >> we are not together >> sometimes off and on, i might be able to tolerate >> that's a good start >> up next, circle is going public by a spac you can see the stock reaction and later, galaxy digital will talk with us about crypto. looking at bitcoin and other
7:51 am
assets down about 6%. we'll be right back.
7:52 am
[ "me and you" by barry louis polisar ] ♪ me and you just singing on the train ♪ ♪ me and you listening to the rain ♪ ♪ me and you we are the same ♪ ♪ me and you have all the fame we need ♪ ♪ indeed, you and me are we ♪ ♪ me and you singing in the park ♪ ♪ me and you, we're waiting for the dark ♪
7:53 am
fintech company circle going public joining me now great to see you today >> why go public >> you know, the market that we are in, this digital currency
7:54 am
market has seen incredible growth really over many years but that has been accelerating we've seen the adoption of usd coin, which is the digital currency we operate skyrocket. it has grown over the last 12 months the amount of circulation has grown to almost 26 billion it is driving growth in the company. if we look at what we are building building the platform and services and financial institutions and others to build on we see an incredible opportunity to grow and grow rapidly. >> you are going to use the
7:55 am
proceeds to grow in what specific area and wear >> there are so many things happening right now. we've launched a new set of services on top and seen significant demand we've seen that demand coming from around the world we have seen the early stages of this curve. there is an incredible amount as far as blockchain and sales, marketing, customer operations of course, we want to do that around the world >> you always like to look at comps. what is a comp to a publicly
7:56 am
traded circle? >> we are an interesting company we operate this market infrastructure it is an innovation in payment systems you might think of the payment networks as something that was there we are building this suite of transaction services maybe something that looks more similar to at scale and equipment owe companies will be in that as well. >> it will be interesting to see what is next
7:57 am
thank you. coming up, our exclusive interview with anthony soto and later, galaxy digital joining us to talk bitcoin as china's crack down continues and senator elizabeth warren those comments saying something has got to be done we'll be right back. because it hasn't removed the endless mundane work we all hate. ♪ ♪ ♪ automation can solve that by taking on repetitive tasks for us. unleash your potential. uipath. reboot work. ♪ ♪ ♪ aloha! isn't this a cozy little room? sorry your vacation request took so long to get approved,
7:58 am
so you missed out on the suite special. but lucky for you, they had this. when employees are forced to wait for vacation request approvals,it can really cramp their style. i'm gonna leave you to it. um, just— with paycom, employees enter and manage their own hr data in a single, easy-to-use software. visit and schedule a demo today.
7:59 am
i think you're going to like it here. umm, why is everyone... throwing things at me? look, as cfo it's my job to be ready for whatever's next. that's why i have my finance team, randomly hurl things at me. it's also why we use workday. it gives us insights, so we quickly pivot our strategy, people, planning, you name it. sorry, sir. i will aim straight at your next step. see that you do. would you like some coffee? workday. the finance, hr, and planning system for a changing world. ♪ flowers are fighters. that's why the alzheimer's association walk to end alzheimer's is full of them. because flowers find a way to break through. just like we will. join the fight at good morning lots of red to look at
8:00 am
with the markets selling off the yield dipping and the dow is down about 500 points. the morning after the s&p and nasdaq hit all kinds of highs. crypto as well with billionaire investor weekly jobless claims now about 30 minutes away. those numbers, analysis as the final hour of "squawk box" begins now. good morning i'm melissa lee. becky and andrew are off today we are back down 500 points more
8:01 am
than on the dow. looking to lose 62 at the open nasdaq down 221 here a driver of today's action we saw yields go to 125 and break briefly. we are at 1.28% just above the average of 1.25. crypto, we've seen pressure there. either down by 8.5%. and oil across the board feeling pressure oil lore by 1% on wti. >> let's head down from here >> nyse has been studying. it is fun when we have ny people in here someone called it a
8:02 am
museum downtowns that cold isn't it >> it is cold. nasdaq sort of built a building in time square when it didn't really need to there you go it is okay. set up with the markets, we had a little bit of a growth scare now kind of reached through the day. 1.4% based on the futures this will get us back to a week ago where we closed june before we had a little lift higher
8:03 am
in that mid-42 that's when you start to say, okay this is more than a little wiggle >> take a look here. the nasdaq 100 has been leading the way you see here, this margin that has opened up here this is where it is doing the support work also on the small cap where it built up a huge lead and is giving this back this shows you a little draining of enthusiasm. i think we havea little sense of the global picture has softened up to have product taking and people going towards the strength, which would be the large cap defensive platforms we
8:04 am
got that down to 1.25 earlier. >> most of what is going on is the inflation coming down and normalizing back to prepanicked levels around 1.23 is the two-day average. it is still going up this is still technically in an up trend it is close when it comes up to this giving up the static trying to figure out if the overall story has changed or this last little lung where people were caught off sides by that move. >> when we try to ascribe reasons for a selloff like this.
8:05 am
is it ever really what people are worried about or does it ever come to pass or does it really matter whether it is justified as people think it might you turn the light on in the abis a lot and nothing is there. it doesn't matter. what is going on is it delta? is it covid? is it we are not going to get stimulus or is it pull back after stocks got ahead of themselves? >> i think we mostly deal in excuses we built up a tremendous amount of house money. it seems as though people are
8:06 am
prepared for the idea we hit some chop. people are fully invested. any wiggle means the rebalancing goes away from stock to something else >> we are hitting the higher threshold of vaccines. i always say in the market, it seems to go off of nowhere kind of like the murder on the orient express. everybody did it and nobody did it >> that's a good one >> sorry to spoil a 90-year old novel for everybody. >> like talking about breaking
8:07 am
bad. i talk about that and andrew yells at me. >> people like me can talk about it >> i've actually not seen it let's take into the tech trade. joining us now, portfolio manager and professor at the baker citadel school of business the sell off may be pretty well timed. >> apple has had a pretty good run. way think that was just a lagarde from the year. we think apple was just a seasonal trade until it goes into the next launch in
8:08 am
september. many people see the lower rates and here we are. granted, a lot of these stocks are down now from all-time highs. >> we've had an unbelievable rotation in. i think the most recent rotation of value trades into tech is probably overdone. i'm worried about the spike in rates that could be coming as you said, tech has been on a rally for the last couple of weeks. i actually think it is probably too much too soon. >> chris, to what extent, if any do you look at the bond market does it educate your view on you
8:09 am
ho apple would trade >> it really doesn't our premise in apple, we upgraded the stock on the premise of the two-year iphone cycle. we are through that and follow the fundamentals we think in the case of apple, you didn't unlock all of that value. the phone was late >> there are lower expectations when they raised their price target on apple. low expectations for the iphone 13 does that create a good set up for apple in your view >> i think it does you just couldn't sell as many phones as you could have the good thing that happened last year is that the mix of
8:10 am
iphones went to the high end more people caused the maxs. this year, we think they fixed that the benefit this year is you get some catch up on the units because you have a full selling season but the mix towards the high end is permanent. we think that is important and turns numbers higher >> the worry you had before rates go lower in that world, what happens to the tech trades? >> i think we had an indication of that when we saw the early rotation out of tech into the value trades for the meaningful
8:11 am
bounce back. i've been a big fan of apple we have a fiscal year that starts not far away. if you believe theconsensus th sales at the highest price ever to enter a pretty significant slow down. i don't get it i have to say i disagree with
8:12 am
chris. as apple has been in the past. apple is somewhere now between a software and hardware company. it is some combination for hardware sales driven by the hardware sales still to come billionaire investor talks crypto. as we head to break, schwab
8:13 am
downgraded stay tuned, you are watching "squawk box" on cnbc
8:14 am
right now, you're planning for your future. maybe it's for kid number two. or employee number two hundred. maybe it's understanding the real value of your business. or ensuring that what you've built, will be taken care of for a long time. whatever you're planning, you don't have to do it alone. we'll make that part of your plan. you have a team who's been preparing for all kinds of futures for nearly 170 years. learn more at [ "me and you" by barry louis polisar ]
8:15 am
170 years. ♪ me and you just singing on the train ♪ ♪ me and you listening to the rain ♪ ♪ me and you we are the same ♪ ♪ me and you have all the fame we need ♪ ♪ indeed, you and me are we ♪ ♪ me and you singing in the park ♪ ♪ me and you, we're waiting for the dark ♪
8:16 am
welcome back to "squawk box. the futures now down around 500 points the charles schwab down after the downgrade. dow is down about 500 points nasdaq taking it on the chin we'll see bank stocks probably not fairing well down more than 2%. also watching chinese stocks continuing with developments as
8:17 am
in the past year we go back. >> coming up the sofi ceo live. first, we look at the s&p 500 biggest movers on "squawk box" on cnbc.
8:18 am
8:19 am
8:20 am
>> the futures indicating a lower open our next guest is a voice to mark through all of the uncertainty. live from the allen and company conference >> good morning to you anthony, thank you for joining us here talk about the market first, futures are indicating a lower open talking about the fed access and
8:21 am
does the fed need to raise rates fewer than expected. which will kick off next week with support and cause inflation or will that be a moderate looking space and there for the fed out look looks relatively stable as women are worried about macro recovery right now >> i think markets will be volatile based on how long it will go before we have to raise
8:22 am
rates. is it spiking and how we think about the recovery continuing based on their review it will be a rapid increase of rates. >> on the investing where are you trading right now? >> we are offering investments and cryptocurrency we are seeing a broad based innovation and increase in addition to significant growth rate as it relates to new rates
8:23 am
being open. >> do you expect that increase will hold. in that industry, we've given access you've seen more 20 to 30-year-old increase that will continue it is a fallacy to think because of covid, people had more time. people are less time people were working 24/7 since there is no transportation, those hours are filled with meetings meetings are backed up to one another without time to rest i don't think we are driven by more time but a drive. >> talking two aspects of your platform when it comes to
8:24 am
trading. request gs that the agency look in to the consumer protection when it comes to the use of crypto and fraud do you think consumer protection is in place or do you think there is room there for more when cryptocurrency on our platform are bought, every time someone tries to buy on sofi, we are providing that warning suit ability is the real focus we and others are trading on
8:25 am
trading on the market and in terms of trade for order flow how much does your company receive in payment for order flow are you actually getting the consumer the best price for the stock or free trades >> we have focused on the order flow they are getting the bulk of that price improvement. it is widely used piece of the financial models that allow for paying no commissions.
8:26 am
they've innovated. about 34% come from our numbers. we are a one-stop shop they become invest yorz and borrowers. being a one-stop shop is a key investor our members in understanding and the pros and cons in the decisions they make. >> i have to ask about robin hood you do compete in some of them >> since you started trading on june 1 what is your message about your road map and how you are very
8:27 am
different. >> i believe we are very different. we are a one-stop shop unsecure loans, mortgages, student loans. no one is providing that one-stop stop. we want to have a life-time relationship with our members. we call them members, not just measures we want to be there for every big moment in their life. >> what is coming down the pipeline we should know about? >> we'll report earnings in the next month and a half. we look forward to sharing with you the results. we are excited about our future and happy to be a public company and to hit the next milestones you know your restriction and what we could talk about thank you for talking to us here
8:28 am
about the market and your road map here in sun valley thank you for the jobs data. we'll be right back. stay tuned if you wake up thinking about the market and want to make the right moves fast... get decision tech from fidelity. [ cellphone vibrates ]
8:29 am
you'll get proactive alerts for market events before they happen... and insights on every buy and sell decision. with zero-commission online u.s. stock and etf trades. for smarter trading decisions, get decision tech from fidelity.
8:30 am
8:31 am
live with breaking news. our current read on initial jobless claims moved up so far from 9 to 373,000 bouncing off the post covid-19 low. there is a revision. 364 now becomes 371,000 which is still the post covid low leading the charge on the post covid low with the revised 3,384,000. china is finding ways to add more stimulus for requirements on the reserves we see other issues on global dynamics we see
8:32 am
it is not doing nearly as well against the yen but doing very well against the euro and the pound. they are changing their policy and review that getting close to 3% they'll be okay they'll give it some room to breath before any significant violations occur the biggest violations will change on the corporate side there's just not enough concerns there is a lot of different reasons why there is such a bid and drop in yields there is a great reflags, redo, rewind, unplug whatever you want to call it
8:33 am
>> sometimes markets are not logical. sometimes they decide they want a different parking place. >> trying to ascribe a reason at your own risk. you don't think it is indicating growth blobally and maybe our expectations were too high for another reason >> a real key is that expectation wrong in just the reopening trade or have we now created so much global debt that the ability to grow has been stimed to some extent that that might be sniffing that out at the latter it is too early to see the impact and not necessarily the
8:34 am
same impact from one country or one developed economy to another. >> that's the thing you are saying even more stimulus would be more detrimental but down the road with a more debate. >> that's what we saw in china >> joining us now, also the president of queen's college. >> thank you for having me you and joe raised a key question can you have too much of a good thing? can you have rates that are too low for the equity market?
8:35 am
can you have a stimulus. that can be an explanation i stop at it is technical and too early to extrapolate it too much i wouldn't go as far as saying, that's it. that's the end of the stimulus story. >> what got you worried that is more than just technicals? >> three elements. one is growth. undoubtedly, there is some weakening i fine it very hard to explain this move based on the
8:36 am
fundamentals people are scrambling those who haven't covered their liabilities are doing it now i think think this is mainly comfortable. >> how do you think that resumes trading. >> we are pointing at the loss of the dow and this takes us back >> we have been conditions to go back record to record. even this small pull back created this big fuss. if you look at it in terms of the multi-month curve, you
8:37 am
hardly pick or see this dip. i do think there is the liquidity trade is still there we must not for get the fed will find it harder and harder given the liquidity on the inflation side i don't think you could declare the end of this incredible market but keep an eye on this liquidity. they'll have problems justifying what they are doing. >> in the coming weeks, they'll have an opportunity to brace the market what do you think the message of the fed should be or the market reaction? >> they should have started. it is impossible in my mind to justify buying so many mortgages
8:38 am
every month. we don't need this amount of stimulus at some point, you end up with stimulus you end up with bubbles all over the place. the main strategy of keeping yields unnaturally low is starting to have a negative impact on risk behavior. there was in the back,the gros better to start easing than slam on the breaks later on >> do you think that could be positive >> it is hard to say
8:39 am
if you are a long-term investor, you see that as a positive and not negative move. the technicals are really crowded right now especially with some asset classes it is hard to avoid some shorter term technical move which would be a good thing we have a lot right now in the marketplace. the sooner we curtail them, the better >> everything from corporate to the certain capitalization stocks you see everywhere some of them have self--corrected
8:40 am
>> the things out on the risk curve. >> correct those will cascade to the capacity of the market itself. >> great to get your take. thank you as always. coming up, billionaire investor mike novogratz will talk yields and of course bitcoin. have a better finance system than we do. workday. how do they make better decisions faster? workday. it's got to be something workday. i think i got something. work... hey, rob, you're on mute. hello! hey, rob, there he is. workday. the finance, hr and planning system for a changing world. that building you're trying to sell, - you should ten-x it. - ten-x it? ten-x is the world's largest online commercial real estate exchange. if i could, i'd ten-x everything.
8:41 am
like a coffee run... don't just sell it. ten-x it.
8:42 am
8:43 am
jim cramer on mad money last night. let's get down to the new york stock exchange once again. great to see you twice this morning. a treat for sure we think about what you said last night on mad, tech should be the haven and yet it is being sold off too >> i did not think at the last minute, states would gang up on google by the way, if you want monopoly, it is about advertising. that reminds us that government is not pro tech. delta is playing the role.
8:44 am
it is hurting travel a lot of people think delta is hurting the treasuries look at last night around 3:30 to 4:30 is when the market fell apart. a think it had a lot to do with delta. i think delta has been under estimated. delta is scaring a lot of people, it really is >> i'm glad you pointed out the overnight. >> we were talking about the moment they shut down pro sports at the beginning of the pandemic, saying maybe this delta variant isn't or hasn't been priced in as a risk
8:45 am
>> absolutely. say you want to go to a football game at a southern university, i think you'd be thinking twice about it there's not enough vaccinations there. i'm concern that the fda is still calling this emergency use. why aren't they just saying this is just use. they did it with the drug that is supposed to stop alzheimer. i am worried about delta there are a lot of people in this country that are staunch anti-vaxxers and i don't think they are ready for it. joining us now, mike it is a pull-back day and as usual, crypto goes along with it there's never been a noncore
8:46 am
relation it is a given that it is down. have you been gratified that 30 has been held. i'm talking bitcoin. and the new range seems to be 30 to 35,000. >> yeah, we are consolidating at 30 to 35 we are seeing asian sell it off and u.s. buys it back. we are seeing crypto funds to hedge funds. we are seeing other coins have a good move and asian continues to sell china has declared a war on crypto as part of this broader cold war i think we are still digesting that >> the latest in terms of the regulatory front china is one thing but you saw the comments from senator elizabeth warren she wants more scrutiny to
8:47 am
protect investors. that's going to continue until genzler and company address it to some extent >> i think when gary finally addresses it, it will be good. he would love to regulate crypto he doesn't have the mandate. he needs congress to give the mandate. it is a pretty tight congress. we'll see what they end up doing. even if you have the mandate or the rules, i think that would be a relief for the market. one thing we learned and we'll spend more time ourselves in d.c. our politicians know very, very little about crypto. shame on our industry. we need to do a better job educating them >> once that happens, what is the right regulation >> etfs are probably coming.
8:48 am
>> that would probably help. could be first quarter of this year it feels further along >> you get into that first job i'm guessing bitcoin etf would be the top of its list >> i know they are working on it i do know gary wants to be smart and be seen to be smart. he will get to this stuff. the old chairman just didn't want to deal with crypto >> as far as china goes, that is a concern for jim cramer, is china concerning to you. is there still a lot of interest of the chinese people peer to peer >> he has madeit clear, anything he sees as a threat to the communist party, he's going
8:49 am
to smash out whether jack ma, crypto or didi we all have to regauge how we approach china chinese people get their money off shore when they want their money off shore. the last president to china, his kids all had u.s. passports. this is not a place not used to figuring out how to operate below the radar. i still think you'll see plenty of chinese participation in crypto it is just not going to be as easy >> i know you love galaxy as crypto centric, what is going on with the 10-year >> the only thing i can think of is post fed. they stuk risk down and put risk back on. when you get into the sleepy summer months, $120 million a month of consistent fed buying eats you alive
8:50 am
maybe there is a little delta in this but i think it is positioning. we are now in a new range of the 10-year. it is probably 1.20 to 1.40. to get back above 1.40 in yields will take something spectacular. some new data or a shift of body language from the fed. 1.20 to be in a sleepy summer bounce around range i think most of the pain in fixed income has happened in the last three or four days. maybe there's one more flush but every hedge fund i talk to is bleeding a little or a lot, and you know, listen, we think rates are at the wrong level i think the equity market got nervous last night because they said, well, jeez, maybe the fixed income market knows something we don't, you know, and china cutting the same message. maybe china's slowing in front of us. but i think it's more positioning. >> the doldrums are here, i
8:51 am
guess, and doldrums affect everything at this point i got one more sort of overall question for you does there come a time where the promise of a non-fee at decentralized currency where it's really realized in terms of what the fed is doing. the fed, when rates go down and the economy seems weaker, that just means they're going to keep printing why isn't bitcoin up on the notion that this is exactly why you own it, because of central bankers. >> you know, there's a lot of ownership correlated with other assets, right? if you're a hedge fund and you're getting lapped in your rate position and your equity position and your oil position, you're probably going to sell some of your crypto as well, and so it just takes a while for it to build a more diverse investor base, right? we haven't had the big pensions come in yet. i can tell you, they are getting closer so at one point you're going to see those correlations break down >> mike, got to ask you, what
8:52 am
does the equity side of your portfolio look like? i mean, during the pandemic you're heavy into the restaurants that had exposure to drive through. you're pretty well-positioned there. what does it laook like now >> i have some core holdings that i just keep i watch the equity market and i'm not as long as i should have been on this last way up, partly because everything i own is correlated to it at one point i started saying you can't have all the exact same bet it's interesting, it feels like, you know, we're going to have a little pullback here, but there's nothing stopping it as long as the fed's going to buy $120 billion of treasuries each month. >> the minute they think that they're going to pull back -- >> it's getting more and more dangerous. you can see like, you know, japan's equity market is wildly underperformed the u.s. in the last week, and you're starting to see these breakdowns where it's literally a small amount of stocks that keep going up.
8:53 am
>> all right, mike, the twitter are mad about your mic they said i've already told you to get a decent mic and you still haven't done it. they want to hear what you have to say so much -- >> all right, i'm getting a new mic next week. i thought this was a good one, but it's not working apparently, or maybe it's my raspy voice. >> it's terrible he sounds like he's in a tunnel. >> we always introduce you as a billionaire. that's how they become a billionaire. they're cheap. >> they save on things like that. >> you spend money on ugly sweater of the month club a lot, not today. >> i was wearing black just because of the morbid markets out there. >> that's your mood today. >> all right, thanks >> be well. >> we'll see ya. >> and check out the shares of beyond meat this morning the company just announcing it's launching beyond chicken tenders at about 400 u.s. restaurants. you might remember the company teased the announcement on twitter yesterday asking fans to
8:54 am
drop guesses on the next product, the meat free chicken recipe uses a mix of fava beans -- >> i knew you were going to do that. >> with a fine chianti, as well as peas and contains 14 grams of protein per serving. been tested at kfc restaurants today's rollout includes smaller chains and independent people will use that as a thing and say i'm a reptile. i told dennis gartman once, they still use that >> they ask people to guess what it would be. >> and what did that i come up >> beyond and they had seven spaces. >> chicken >> chicken was an obvious one. i thought it would be a weiner beyond weiner. re yesterday's conversation, they could make the weiners as big as they want at that point
8:55 am
to fit in those buns. >> just more fava beans. >> so you've seen "silence of the lambs. that's good. >> coming up, this morning's biggest movers and market themes features right now we are indicated as we have all morning to see a lower open. dow looking to open down by 456 points s&p 500 looking to be open lower by about 55. stay tuned, you're watching "squawk box" on cnbc what if you could have the perspective to see more?
8:56 am
at morgan stanley, a global collective of thought leaders offers investors a broader view. ♪♪ we see companies protecting the bottom line by putting people first. we see a bright future, still hungry for the ingenuity of those ready for the next challenge. today, we are translating decades of experience into strategies for the road ahead. we are morgan stanley.
8:57 am
8:58 am
a little more than half hour until the opening bell on wall street dom chu joins us with a look at the top market movers. >> we're going to take a look at some of the most popular tickers that were searched for on our website from yesterday. i've put up here the top five, and the ten-year treasury note yield comes in at number one 1.29% the last trade there didi global, apple, amazon, and amc entertainment. those are the top five most searched symbols on our website. because people have asked, i've put the rest of them up on twitter. follow me @thedomino also checking out what's happening here with the overall
8:59 am
markets on this theme of whether or not the market rally will take a bit of a breather today, it looks like it will now. norwegian cruise lines on the reopening trade, down 3.25%. fifth third bank corp. for regional banks and other banks in general off 2.5%, and lennar off 2% again i send things back over to you folks. >> all right, dom, thanks for all the work you did for us today. appreciate it. the final check now on the markets, we're not quite 500 points down on the dow 480 though, and the nasdaq down over 200, and the s&p as you can see down about 50 points tomorrow, today's thursday, tomorrow will be friday, it will be interesting to see how -- >> that's how it works. >> usually works that way. it was a four-day week you remember that. >> yes
9:00 am
and you were here and you got three more hours to go put in three more hours of -- >> of pure joy. >> of pure joy tomorrow. we'll see whether this continues. we've got the rest of the day today until 4:00 to see whether it adds to these or comes back a little but it should be an interesting session tomorrow and hopefully everyone will tune in. we might talk about the beyond meat thing again >> i hope so >> make sure you join us tomorrow, "squawk on the street" is next. good thursday morning, welcome to "squawk on the street." i'm david faber along with jim cr cramer we are at the new york stock exchange carl has the morning off let's give you a look at futures. you've been listening to "squawk box," you know where we're headed right now, which is lower. to put it in perspective, to levels perhaps that we saw last wednesday. but let's start gh


info Stream Only

Uploaded by TV Archive on