Strong Tech Stocks, A Weak Jobs Report, & FDA Departures 8/1/25

0:00Bring in show music please. Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod. Is America's health care healthy? Former FDA head Scott Gottlieb weighs in on innovation, operations. I think the largest story here has been just the degradation at the agency in terms of departures. And the impact of major philosophical and structural changes to the largest health care regulator has on our future. So you're seeing a hollowing out of the scientific staff at the FDA, and that's starting to impact early reviews. And the industrial revolution we're living in an age of emerging artificial intelligence, technology investor Mitchell Green.

0:42We just believe this is like the internet bubble all over again, where this stuff is going to completely revolutionize the world over the next 20 years. It's just we are probably still in the 1999. Plus, the July jobs report hits Wall Street and Washington, the big tech company's big earnings, the Figma IPO that soared, and a flurry of late night tariff deals from the White House on trade deal deadline day. It's a wild situation. I'm hearing he still wants Canada to join the union. He wants Canada. It's Friday, August 1st, 2025. Where does the time go? Squawk Pod begins right now. Stand back to you by in three, two, one.

1:21Fuel, please. Good morning, everybody. Welcome to Squawk Box right here on CNBC. We're live from the NASDAQ market site in Times Square. I'm Becky Quick, along with Joe Kernan and Andrew Ross Sorkin. And it's Friday. We're here. And it's a jobs Friday on top of that down day yesterday, at least for the S &P 500 and the Dow. The Dow is down now for four sessions in a row. So is the Russell 2000. The NASDAQ closed down yesterday, too. Did it close down? At the end of the session, it was down seven points. OK, so it gave it everything. It was up 350. It was hundreds of points because of what happened with both Meta and Microsoft.

1:56Gave it all back. Now people are a little worried about what's happening for this. Four months in a row, though, the Nasdaq has closed higher. The Dow closed higher for the month, but just barely. I think it was up by eight one hundredths of a percent for the month. S &P did OK. It was up for the month as well. You did see a small gain for the Dow in July. And that's what I just said. The Nasdaq was the big winner, though. It was up by three point seven percent. The Russell 2000 had the small cap Russell 2000. What did I see? I said that wrong before. What had four months in a row of downs? The third straight month of gains.

2:30I see different streaks from here. OK, it's third straight month of gains. That's its longest monthly winning streak in about four years. Treasury yields this morning. If you check things out, you're going to see that the 30-year yield is now at 4.9 percent, a little higher than we had seen yesterday when it fell back in the 4.8 percent range. The 10-year is at 4.39 and then the two years flat. It's just below 4 percent at 3.95. Also, check out copper prices. Yesterday was its worst day ever. That came on pared-back tariffs from the White House. There were tariffs that went through, but it wasn't on everything that they had anticipated.

3:05This morning, you're seeing a very slight bounce back of just 1 percent. For the week to date, we're still down by close to 24 percent. President Trump ratcheting up tariffs on countries around the world with a new rate set to kick in within days. I should say new rates because there's a lot of them, And we want to get the very, very latest this morning from Megan Casella. Good morning to you. Good morning, Andrew. So with one executive order overnight, the president, as you said, increasing tariffs and adjusting them on dozens of countries across the world. All of these new rates set to take effect within six days from now, August 7th.

3:38So take a look here to break down everything the president has been doing. Seven trading partners now. This includes the EU, South Korea, Japan, locked in those framework deals, locking in those tariff rates of between 10 and 20 percent on all of their exports. And then another 62 countries, by my count, also saw their tariff rates, so-called reciprocal tariffs, increasing. Those will be between 10 and 41 percent. Those are on some major trading partners. That includes India at 25 percent, Thailand and Malaysia both at 19 percent. So some significant levels there. And then for nearly everybody else, the baseline tariff will remain at 10 percent.

4:16So a little bit of a surprise there that that level didn't move higher. Now, all of that, again, taking effect next week, but three countries not included in any of those categories were China, Mexico, and Canada. So China holding firm at 30 percent where it's been for now. Mexico also holding the status quo at 25 percent after it struck a deal yesterday to keep negotiating with the White House for another 90 days. But Canada never reached any sort of deal. So overnight, its tariff jumped 10 percentage points, up to 35 percent. So now you can take a look at it this way. I think this simplifies everything that happened.

4:50About 65 percent of everything the U.S. buys from abroad comes from just five trading partners, and tariffs on all of those goods will now start at a minimum 15 percent. And guys, President Trump spoke with NBC after he signed this executive order yesterday. They were talking about the tariffs. He said it is too late as of now for other countries to avoid these tariffs. But at the same time, he said his door is never completely closed to compelling offers. So that doesn't mean someone might come along in four weeks from now or something like it and could strike some sort of a deal. So on that question of how firm these are, he's leaving the door open at least a little bit.

5:26Guys. So I think the big question is, what do you think happens next week? That's that's the entirety of the question that the whole market and the whole world wants it out. Absolutely. And I know they do. So I will say White House officials said in putting this August 7th deadline on there, yes, you could look at that as giving some leeway and maybe an optimistic sign that things won't take effect. The president to NBC says, of course, he's not striking any deals, but we have heard that before. White House officials say that this is simply to allow customs some time to adjust what they're doing at the border so that they know what level of import taxes to collect.

6:01And importers then also have a few days to adjust to what they're going to have to be paying. So I wouldn't say it means that he's going to strike deals between now and then. But of course, that is a byproduct of it. This allows some wiggle room. And he does say, and officials have been saying, they're going to keep negotiating. Well, on the keep negotiating piece, is there anybody else meaningfully that you think is close? Meaning that a deal is within reach within these in this couple of days, that this actually is a negotiating tactic that forces the issue? Yeah. Canada is the biggest one left out there.

6:33As of late yesterday, it was four o 'clock or so, the president said Canada had been calling. He hadn't talked with them. So I'm really curious what happens with Canada, just given the size of the trading relationship. There have been others, Malaysia, Thailand, not insignificant trading partners that the White House yesterday was telling me were very close. So we could potentially see those adjusted somewhat. So I would say potentially some partners in Asia. The biggest question, though, the one that will matter the most is Canada. And given the president's rhetoric, I just don't know if he'll strike anything between now and August 7th.

7:04Okay, Megan, thank you. Appreciate it. It's a wild situation. It is. I'm hearing he still wants Canada to join the union. He wants Canada to, he thinks it makes everything a lot easier. Saves everybody a lot of money. Still join. Yes, this union. I know, but he still. Upends his own politics. Huh? It would upend your politics, the country's. Believe Believe me, I know it'd be like adding 100 Minnesotas. That's like the last. I said I'd trade a couple of those. No, I know you've said that. That's why I'm surprised. I'm not saying it. I'm just saying I know for a fact that he still thinks that makes sense.

7:37Take a look at Apple. After fiscal third quarter results, sales and profit beat estimates, iPhone revenue, easily topping expectations. Overall growth of 10 % was the company's best performance in a quarter in more than three years. Apple CEO Tim Cook said about one of those 10 percentage points of revenue, the growth, came from customers buying iPhones to get ahead of tariffs that were imposed in April. On the tariff front, Apple said its third quarter hit was less than expected and had projected back in May, Cook, saying that the fourth quarter impact, though, could be about$1.1 billion. And in a reversal from the past two quarters, Apple saw sales in China rise 4%.

8:18For fiscal fourth quarter, Apple said it expects a mid to high single digit increases. That's what I thought was interesting. If they think that this was selling to get ahead of those tariffs, but they don't see it slowing down in the current quarter. That's kind of interesting to kind of weigh that out, how they measure that, how you figure how much was pulled forward, how much wasn't. Given how much the stock has come down and how positive a lot was yesterday, you would have maybe felt more than a, you know, more than a 1.8 percent gain. People are still some trepidation still about Apple. And A.I.

8:52Cook noted that the company is significantly increasing investment in CapEx in both talent and computing, though he didn't give specific numbers. And then there are shares of Amazon, which are falling on second quarter results. Profit and revenue both beat expectations, with sales growing by 13 percent year over year. But the company gave some light operating income guidance for the current quarter. On the cloud side, Amazon Web Services was up by 17 and a half percent. That was better than had been anticipated. But it was nothing compared to the amazing results you'd seen from Microsoft Azure, where their cloud revenue was up by 39 percent.

9:32And then Google Cloud, where their revenue was up by 32 percent. Capital expenditures, the company CFO at Amazon saying that capital expenditures in the second quarter actually topped$31 billion. That was up incredibly, something like 90 percent, and will remain at that level in the second half of the year. Tariffs were another topic in focus. And here's Amazon CEO Andy Jassy on that earnings call. Through the first half of the year, we haven't yet seen diminishing demand, nor prices meaningfully appreciating. We also have such diversity of sellers in our marketplace, over 2 million sellers in total, with differing strategies of whether to pass on higher costs to consumers, that customers are advantaged shopping at Amazon because they're more likely to find lower prices on the items they care about.

10:20For the second straight quarter, Amazon included recessionary fears and tariff and trade policies as factors that could affect its guidance. And again, That stock is off by about 7.75%. Year-to-date, it's down by 1.5%. Take a look at shares of software design developer Figma soaring. And when I say soaring, that's probably an understatement in their public debut yesterday. The company pricing its IPO,$33 a share. That was originally open for trading yesterday at$85, then closed at more than$115. At that point, Figma's market cap was close to$70 billion. You remember, and we've talked about it, Adobe agreed to buy that company back in 2022 for$20 billion.

11:07But that deal had fallen apart over concerns from British competition regulators. And we spoke to Figma's CO, Dylan Field, pre-market yesterday before all of the craziness began. And here's what he had to say about possible M &A activity of what they may do next. I expect us to take big swings. Maybe that's on AI. Maybe that's with M &A at scale. And I thought it was really important for people to know that. I still do. Because obviously M &A, if it's done well, is often misunderstood. It can create volatility. And, you know, we don't have a plan for that right now. We're always looking. Shares of Figma right now, pre-market$129, two pieces.

11:49He did have a comment where he talks about the idea of you don't want to look at the stock price for one day because it could be a drunk elephant. That was his comment in the morning. I don't know if he looked. I don't know if you think this is a drunk elephant or not. We'll see. Share price is a moment in time. You know, we're going to see all sorts of behavior probably today, over the weeks ahead. And, you know, I'm not going to say it's just noise. You can't tell people that don't look at the elephant in the room. You know, there's an elephant in the room, it's dancing, it's drunk. But I think at the end of the day, what's really important here is that we control the inputs.

12:30And so what I've been talking about with the team is we have to stay focused, stay on mission, listen to our customers. The other thing is we mentioned his compensation package yesterday, which is very Elon Musk like with these market cap targets. Well, guess what? He already blew through some of them. Well, he only had to get to$60, right? For the first run. But it has to be there for 60 days. It has to be there for 60 days, but then there's other parts where they have to be for years. And then he has to hold. So we'll see. But it is quite something. The other question, of course, and Bill Gurley talking about this on X last night, how much money did Figma just leave on the table?

13:08How mispriced was this? Did the bankers leave on the table? Right. If you're dealing on a morning like today or at the end of last night beyond going out and hopefully having a cocktail, are you saying to yourself, I'm having a cocktail because I'm excited and I'm celebrating? I'm having a cocktail because these Wall Street bankers screwed this up so badly in terms of the supply and demand of my shares and how they were priced. And that's still always the question. Because the company didn't get the money it could have had. I mean, it's just, yeah. Were they selling shareholders or was it just for general corporate purposes?

13:38Were they selling shareholders? No. So most of this cash that was going to be raised was actually to pay taxes, weirdly enough. It wasn't it was not like a huge opportunity, big cash. In the past, we've always and we've been a lot of times been wrong to say that, you know, when you see a certain number of shares trade at a level like that, based on demand for people that can't get in. It's a mistake to multiply the total number of outstanding shares by that price and think that suddenly it was 40 times over. Right. But you can't monetize suddenly that if everybody wanted to sell and take their what's the market cap now?

14:16If everyone wanted to do that, that money probably doesn't exist. But every time we said that about Google when it opened at like 80 and it's probably 100 times. So I'm not saying it's not going to happen, but I don't understand. I haven't heard the term drunken elephant before. Is that like a drunken Republican or what? Drunk giant. I don't know if I would right now take it to the bank. And it also sort of, you know, your bigger question about M &A and IPOs and sentiment and everything else. That's frothy, isn't it? The number of people yesterday who I was on the phone with who said bankers who were just watching this in awe with their mouth agape and saying there were a whole bunch of companies that wanted to come public who are now saying we need to do this immediately.

15:03Like the window is open. Let's go. And by the way, you can't blame the bankers too much. I mean, maybe. I think it's a great thing. What if it fell apart? I think I'd rather have you do it that way and set a basal level for where that thing opened. And suddenly everybody's thinking about it not as a$20 billion company anymore. So when you conjure up all that demand, it's like the guy at the velvet rope at some stupid club down in Soho. And you get in there, no one's in there. There's a big, huge line. As if you know you ever made a pass. That's happened 30 years ago, and nothing ever happened.

15:35I had no success. I don't know why I was waiting in line. I should have never waited in line. But it is, wow, that was something. Something to behold. I have to say I was watching. I remember. And I still have no idea what WTF that comes from. I mean, I was listening to him, and I wanted to understand really bad, and I stopped listening because I still, So I don't see how they can possibly design a rollout of some idea that a person has. I don't know why they need thousands of employees. I don't know what they're doing. I don't know what kind of idea they're talking about. I don't know how it could be that skill could be worth$50 billion or whatever it is.

16:15Can you explain it to me? I think he's 58. How does it, what do they do and why could it be? And how can someone 25 years old have figured this out? He's 33. Okay. It's effectively a design. Okay. I was listening. It's a piece of design software. Tried to understand. You and I, let's say we wanted to build an app. Why don't we? We could. Then let's. With this software, we could go do it. Today, you could do it with a prompt. Four months ago, professional designers used this software, and they would move things around. And if they were making an ad or a design on the, by the way, Netflix uses it in terms of the way the Netflix screen looks, all of that, they would be doing that.

16:54Today, you don't even need to do that. Joe, you and I could just, and Becky, we could just type in what we think the screen should look like. Can I just say, design me a screen? Basically. Is that, so it seems, again, what's the underlying product or service that we're selling? Is just the ability to do that worth all this money? Well, what they have is it's an enterprise business where, effectively, the top Fortune 500 companies, everybody uses this software. They do. They do. For advertising. Well, not just for advertising, but anything that's design-related. To design something. Okay. All right.

17:27I'm working. I'm trying. I'm thinking about the jobs that are on the line. Who gets laid off as a result of this stuff because it's so good now? Will you work on that so we can... Becky, you want in? You just said us. I'll stay here. You guys go away. I'll hold down the floor here. I know she's... You guys go do your thing. Bird in the hand. Yeah, yeah. Cheese will be next. Coming up next on Squawk Pod, the president pushing the chairman of the Federal Reserve on Jobs Day and the impact of major changes to the nation's health care regulators. Former FDA head Scott Gottlieb on what's happening at an agency he once ran.

18:04If you look at the drug center, they lost about a third of the reviewers that review breast and gynecological cancer products. They lost more than half of the group that reviews malignant heme products. They've seen 473 departures of medical reviewers, voluntary departures, on top of about 600 rifts. That's more than 20 percent at center.

18:29This is Squawk Pod from CNBC with Joe Kernan, Becky Quick and Andrew Ross Sorkin. Here's Andrew. Guys, I've got to tell you about this. President Trump just posting on Truth Social some more criticism right now for Fed Chair Powell. He's saying now the following, quote, Jerome, too late Powell, a stubborn moron, he's now calling him, must substantially lower interest rates now. If he continues to refuse, the board should assume control and do what everybody knows has to be done. I guess he's talking about the FOMC board, which, by the way, there were only two dissents in the vote that just came through.

19:07Yeah, first time There were two since 1993. You know what? It could get even louder if it's a crappy jobs number. We'll see.

19:21All right. President Trump ordering pharma companies to lower drug prices in the United States over the next 60 days. Joining us right now to talk about this and changes at the FDA, plus much more, is former FDA Commissioner Scott Gottlieb. He's also a CNBC contributor and a board member of both Illumina and Pfizer. And Scott, let's talk through what this might mean. This is a strict letter. President Trump tried to do this in the first Trump administration with an executive order that the courts struck down. How likely is this to get some pickup from the industry? Do you think they'll go along with it?

19:55Look, I think this is a good starting point for the industry to have discussions with the administration. The president clearly is focused on this issue. He has been through two terms right now. This sense that there is unfairness between the United States and our Western allies, mostly in Europe, who are paying much less for pharmaceuticals in the U.S. I think it's a fundamental issue of fairness for him. He tried to do this through a regulation in the first term, through a demonstration project at the Centers for Medicare and Medicaid Services. That was struck down. In the second term, he's begun to try to do that again.

20:24I think this may be an indication that they're having difficulty coming up with a regulatory framework that's going to pass judicial review. And so they're looking to do it through negotiation and a little bit of jawboning. I think this is a good starting point. They recognized in the letter that the president put out that this should apply prospectively, meaning that companies can't go back and renegotiate the prices that they've already established in a lot of these countries. So he's saying that he wants companies to do this on a prospective basis, basically for new drug launches within the commercial and the Medicare market.

20:54The one piece of this I think is going to be very difficult for the companies is that he wants the companies to offer the MFN price, the most favored nation price, day one within the Medicaid program. That's not necessarily going to benefit patients. It will benefit states by lowering their drug spending. But that's going to be very difficult in terms of the revenue hit to companies. In many cases, the difference between the MFN price, depending on how you calculate that, and the letter doesn't specify that, and the prices paid in Medicaid could be substantial for some single source drugs. Ultimately, and my final point here would be, I think we need to move towards some type of tiered pricing globally, where you basically price drugs based on the wealth of nations, and you have different prices for low, middle, and high income nations.

21:37because a country like Germany with a GDP per capita of$54 ,000 per person can pay a lot more than Vietnam with a GDP per capita of$4 ,000. So I think we do need to price public health goods to what countries can pay and their wealth ultimately. But this is a good starting point. That sounds like something that the United States trade representative would have to enforce. Are you suggesting that what we get out of this is not lower prices in the United States, but higher prices in other developed countries? Well, I think it's both. And the president in those letters that he sent was very clear that he wants prices in the U.S.

22:14to come down if prices in Europe and other nations are going to go up. And they did commit that the trade representative and other entities within the U.S. would support companies. That's going to be critical. There was a moment in time where we tried to negotiate some of these provisions into free trade agreements. It got into the FTA with Australia and South Korea as well. I think we need to go back to that where the U.S. trade apparatus is willing to support companies that try to push back on some of these pricing authorities globally. But the president was clear in the letter that he would expect that if the United States does support manufacturers and being able to raise their prices overseas, that would mean lower prices in the U.S.

22:50Now, ultimately, how you how you measure that would be difficult. But I think there are ways that you could probably look at that over the long run. But, you know, I think in terms of where the administration's position has been and what we knew the president wanted to do, there were some things in this letter that I think were some thoughtful, frankly, concessions on the part of the administration, particularly that provision about looking at this mostly on a prospective basis for new drug launches, with the exception of within the Medicaid program. The one piece of this I think could immediately impact consumers, and the industry has been having discussions with the administration about this, is offering some kind of portal, some kind of online portal, a direct-to-consumer portal, where companies would agree to sell to consumers directly for those who are underinsured or uninsured drugs at MFN-type pricing for heavily rebated drugs.

23:36And in those instances, probably the ex-U.S. prices are pretty close to the U.S.-based prices once you factor in all the rebates that are paid in the U.S. And so that's something that could provide some immediate savings to certain consumers. That might work. Scott, I'm just trying to historically figure out how we got in this mess and who's to blame. I mean, the first time someone over in Europe suggested that they were going to start controlling prices, who went along with that? It was our government asleep where our FTC or trade regulator. Did the companies just allow themselves to be taken advantage of just to continue to be able to sell abroad?