with president xi. we will tell you what's at stake. it is tuesday, november 14th, 202 2023 and "squawk box" begins right now. good morning welcome back to "squawk box" here on cnbc we are live at the nasdaq market site in times square i'm andrew ross sorkin with joe kernen and melissa lee is here with us. becky is on assignment today we have a lot going on u.s. equities at this hour the s&p is up three points dow up nine. the nasdaq opening up 33 points if we did right now. here is what happened yesterday. stocks shock off moody's warning on the u.s. outlook. dow gaining 55 points. nasdaq falling .20%.

we didn't talk about that yesterday. that is how little people care let's show you treasury yields the ten-year yield at 4.662. the two-year yield at 5.035. home depot just crossing right now. courtney reagan is here with more >> news is stronger than the forecast at $37.71 billion against $37.6 billion for the estimate total comparable store sales fell u.s. comp sales down 3.5%. the fourth straight quarter the numbers fell home depot is narrowing the full year sales forecast to fall between 3% and 4% compared to 2% and 5% the retailer will narrow its full year guide to fall between

9% to 11% to 7% to 13% i spoke with the ceo who said the consumer and the homeowner is healthy they are employed and seen gains in recent years. they are deferring larger projects and we have seen that through the year mcphail says the higher rates are keeping people from moving, but the demand is balancing out. we don't quite know how to quantify that balance. obviously, shares of home depot have been under pressure down 13% since last reporting it looks like up about 1%. we don't see big moves in this stock on earnings day, melissa, but we will see once we get more clear from the earnings call at 9:00 a.m back to you. >> courtney, the average ticket

is down. we saw the dynamic where tickets were up, but -- tickets were down, but sales were up. implying inflation was behind the gain are we seeing the reversal >> it does seem to be the case we talked with richard mcphail over the supply chain and inventory being better in stock. the average ticket and transaction were down here a little bit in the quarter. largely did come in as expected for the most part for the company and for analysts we talked about the beat at the top for the earnings and revenue, but it is interesting that both of those analysts' estimate numbers had come down in the last week to ten days yes, they beat, but those numbers they were expecting with the expectations falling >> thank you, courtney >> you like home depot, you have a chance here. 414 is the high?

that's uncharacteristic for a two-year performance that was back in 2021. in the height of -- i don't know why home depot was the stock >> you are sitting home and notice you have to regrowth your tile that's what happens. >> no. >> maybe not in your house >> no. some people. would you? >> regrowth my tile? i know a guy to call >> that's important, too >> exactly you know a guy who knows a guy >> right >> who handles those things. i have someone yes. >> a handler. >> yes i have a lot of things that sold it's a critical day for mike

johnson to avert a government shutdown the speaker's proposal would fund some parts of the government through january 19th and others through february 2nd. he faces opposition from at least eight far-right gop house members. the speaker needs votes from democrats. they will meet this morning to see how many would support it. it is not clear if the vote on the cr will take place this morning or this afternoon. ahead of that, house speaker mike johnson will join us live from washington at 7:30 a.m. we haven't seen him. what's the honeymoon like? should it be called -- is this as good as it gets should it be called a honeymoon? we'll have some of our normal questions for him. it is a job that some people thought not everyone would rush to say yes, i'm ready.

he did you know, whether it is to serve -- someone has to do it. >> thank goodness. >> we admire him and respect him for that what day are we on >> goodness. under ten days >> you can count on one hand two hands. >> president has 100 days. he has time with the caucus. >> with this caucus? >> ten hours, maybe. meantime, thousands of starbucks workers at hundreds of stores plan to hold the biggest strike yet the strike is pegged to the company red cup day which happens on thursday we they give out reusable holiday cups. they are accused of not negotiating in good faith. the staff says the union is not negotiating fairly it has been months since they agreed to sit down and talk. 350 company run stores have

voted to unionize. no stores have come close to a cba with the company at large. check out the move in the price of cryptocurrency. xrp spiked 13% after filing for a blackrock fund after showing up on the delaware web site. the only problem is blackrock never submitted the filing the spokesperson said this is false. it is unclear how the false information ended up on the delaware web site. it could have been a great opportunity for somebody to profit >> i still get a lot of stuff on twitter from that xrp

repellions they have a lot going on a lot of things happen don't call them that they have a lot of beasts. isn't that what you call it? >> beef. >> a beef. >> you call it a beef? >> people on twitter a fight or beef or complaint >> i don't want to talk about it i don't really pay attention to twitter. i don't have a blue check mark you may or may not be writing to me you know what i'm saying don't bother new details in the who can attn tack hack attack of the industrial arm according to the wall street journal, in hmarch, the fbi warned icbc officials over the systems made by citrix of the growing ransomware risksing sug

this could be averted. by the way, there are a lot of fake accounts. if you see an account with all of the pictures of my family and everything and i have a great new trading strategy and all you have to do is follow me and all i have is 500 followers, it is not me i don't have a trading strategy. i shut them down i got tired of talking to the comply aniance people >> it is like whack-a-mole >> get ready for my trading strategy which will be released -- they try to profit off me >> the question is who would want to subscribe to your platform >> not me. i won't want to trade.

i talked about bitcoin some people might want to talk to me. >> it is your trading strategy coming up, countdown to key inflation data we get you ready for the cpi report next. and at 7:00 a.m., we ark invest's cathie wood over her positive future. >> she's a believer. >> you are wchg atin"wosquawk bx on cnbc. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com.

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welcome back to "squawk box. time for the squawk planner. president biden will meet with president xi tomorrow. large companies will hold a sideline summit at the apec. we're going to talk about what is at stake for both countries with gary locke. he will join us at the bottom of the hour. and the october cpi report

duty due out at 8:30 a.m. the closely watched core reading on inflation excludes food and energy is unchanged at 4.1%. obviously, tom lee thinks if it's hot, it's good news if it is soft, it's great news. >> really? >> a win-win situation >> yeah. he thinks so no matter what the print he is alwaysan optimism. >> he is he had that great call earlier this is a similar one. the other was based on the cooling inflation number a couple hundred points on the s&p. 100. joining us to talk about the data and the potential market reaction is barry knapp. knappster. wait, that's taken is that available? >> it is probably available now. >> we can use that now, barry.

managing partner of research at ironside macroeconomics. also a nice view of lion's head? vail mountain? >> lion's head you are looking at right there >> you are worried about the inability of the market to digest longer-term paper than the fed. what does it indicate to you, barry? is that a negative >> until the rates market truly stabilizes, it is hard to see how the equity market is in a sustainable recovery rally end of the fed 95 scenario i think what the treasury did two weeks ago that sparked the rally along with the fed meeting and a weak payroll report was a band-aid by increasing treasury bill issuance which looks like

liquidity is starting to tighten once the fed program dropping precipitously is where they find themselves to tweak or stop qt they increased the belly of the curve. two-year note to seven-year note coupons have a problem with the banking system to participate and finance a lot of that part of the usissuance the banking system is not in a position to do that with the curve inverted the fed is hiking further until we get the fed rate cuts and then the banking system is not in the position to help the government finance themselves. the treasury market situation, to me, looks unstable until we start to get rate cuts i think we'll get them next year i'm in the 100 basis points or full percent of cuts for 2024.

we need to get over this we might go one more time before we can get to that point. >> you are not going to get help de-inverting from the long end -- you might from the long end. you will not get it from the short end any time soon. it is tough to keep a lid on longer-term rates. that's the fear. >> that's my basic point any rally in the treasury market should be suspect unless it is led by two-year notes. >> right. >> even this morning we got the long end down a couple of basis points, but two-year notes are unchanged. the fed needs to start to ease that pressure on the front end and allowi the banking system to participate in the rally i'm not in the tom lee camp as a

consequence of that. >> you were bullish on stocks in the first half of 2024 you are not as much? is this -- am i reading this right? from a 9 to a 4? is that what it sounds like? >> i was bullish this time a year ago i was bullish through the first half of the year as inflation was coming down from 9% to 4% would be a favorable back drop for stocks once inflation stalled out, we would have a tougher time. we're right now in that position where the necessary condition for the fed stopping the hiking process and starting to ease is disinflation we need .20% on core today would be great that would be a good starting point. we can talk about the details if you like we need inflation to come down, but the fed is also creating the sufficient condition which is growth weakening enough so

inflation not only goes down, say, toward 3%, but stays there. they believe growth needs to weaken i disagree with that i think when they push that hard, they damaged the supply side housing is a great case in m point. after the last payroll report was weak and we have the round of fed speeches which sounded hawkish. you know, to me, the fed seems determined to get the unemployment rate above 4% and weaker consumption numbers in some ways, tomorrow's retail sales numbers may be more important than today's cpi report assuming we don't get a big upside surprise in cpi >> okay. you are not necessarily -- you are talking inflation with the numbers. all right. you are not necessarily bearish on stocks next year in the first

half, are you? have you turned into a full-fledged bear? >> i haven't written my outlook note unlike the street i'm not on the street. i wait until december. i don't know why the rush is to get them out in november. >> you have no idea what will happen a month in advance. that is what worries people about the ed >> that's right. i think chances are that the first part of the year will be a little bit difficult inasmuch as we have a huge amount of loans to roll. commercial, multifamily real estate a bunch of projects in the pipeline and equity financing. the market will struggle with refinancing that through february or march until the fed pivots if i'm right and the fed cuts in march, from that point, it could get really bullish

you don't have to wait until they cut, but you will put the markets under pressure i'm writing my outlook note on the fly with you, joe. i suspect the first couple months will be tough and from there, we will get into a more sustainable uptrend. >> thanks, barry there is an lot of snow cover i the world. can you tell if you will have a good base in november or this month or next? >> we had a couple of big snows snowfalls. the mountain opened last friday. i did five runs before i went to the red lion we'll see. it is el niño year we are supposed to get a lot of snow early so far, not so much sdp. >> it took you the whole day to do five runs on the green slopes >> no green slopes open. i went up for a few runs

>> all right, knappster. i can't believe i haven't thought of that before barry, thanks. >> thank you coming up, fisker shares down 13% pre-market after the release of the quarterly results delayed from last week. and programming note, cnbc's focus on formula 1 and explores how the league anchievedd rapid growth and looking at the las vegas grand prix "the business of formula 1" premieres at 8:00 p.m. ameritrade is now part of schwab. bringing you an elevated experience, tailor-made for trader minds.

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>> announcer: executive edge is sponsored by at&t business next level moments need the next level network. ev maker fisker reported a bigger third quarter loss than expected it delivered 1,100 suvs in the quarter. the expectation was for four times that the company did say deliveries accelerated since the quarter ended with 1,200 delivered in october. the company lowered production target for the year. the quarterly report was delayed after the departure of the cao after the financial statements and disclosures. today's pre-market move with the stock down 45% since the start of october down 14% pre-market here >> $800 million. >> market cap. >> 860

>> that's what happened. >> it is down. >> can you say you will deliver 5,000 cars and deliver 1,100 >> no. >> that's not a forecast >> no. you want one, sorkin a fisker >> i don't have adesire. >> i don't see you as a car guy. >> you have to get the right car to get him going cars have been something that i like like a irebird or something. i want a tesla now you wanted a -- which one? silhouette >> i wanted the pacifica at one point. the minivan. absolutely say it loud and proud. >> a vacuum cleaner. >> yeah. the new ev volvo that looks

amazing. >> huh >> amazing i'm saying. >> he has small children you have to think about that >> by the way, volvo, if you sit in the back, if you are an adult, you would be happy. >> it is not tiny? >> it looks amazing. you should get a driver and sit in the back of that thing. >> then what is the other one? the telluride. >> practical cars. >> thank you >> functional. >> the vacuum idea that's great every car should have a vacuum why is it so hard to put a vacuum >> because of car-bage one of the good ones it's one of the good ones. it is. chrysler parent stellantis is offering buyouts to half of

the white collar employees in the u.s. as the cost cutting operations it will be offered to 7,500 employees. the company did not say if they will enforce layoffs it is not associated to the cost of the increase of labor in the uaw deal >> put your heads together someone asked me the other day taylor swift and travis kelce. benifer. i rack my brains >> you know what i'll do this is what chatgpt was built for. i'll ask it during the commercial break and give you the answer. when we come back, a

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good morning welcome back to "squawk box" live from the nasdaq market site in times square. we will get to the shutdown. let's look at the futures. nothing's happening. >> nothing's happening >> if you must, nasdaq is up a little all a.i. all the time. chatgpt. >> before the commercial break, you said what should travis

kelce and taylor swift >> i write in to chatgpt and say jennifer lopez were called benifer. what would you call travis kelce and taylor swift immediately writes back and saying creating the blended name for taylor swift and travis kelce combining options of tavis. traylor. kelswift >> melissa think's taylor should be first based on net worth >> how about travte. >> tetrav. >> none of those are good. >> i wrote back and wrote taylor

should be first. tavis. taykelce taytrav. if taytrav becomes a thing, is that a royalty to chatgpt or to us for typing it in? who owns that now? taytrav. >> i'm excited i can get you to talk pop culture as long as it has a tie to chatgpt or a business hook. you love chatgpt >> here we are a shutdown potentially happening in the government. in other news, we can ask chatgpt. lawmakers returned from recess and the government running out of funding on friday and lawmakers working around the clock to get the votes to get

behind the propose the two-step plan speaker johnson will join us coming up shortly, but we have jake sherman with punch bowl news to discuss it is that the style section, jake? big profile of jake last week. >> no way? >> yeah. he's a rock star thank you for joining us >> you are not allowed to do that. >> you can't call someone in business a rock star or billy idol will come with a chainsaw >> oh. jake, we've got the leader coming on the broadcast in a little bit what do you think is going to happen today what do you know tell us everything so we can have -- i don't want to say we are going to grill the leader, but ask the right questions. >> how about swiftce i like that. >> that was one the of the

options. swiftce. >> liesman emailed me that >> it gives her enough weight. >> yup on to government shutdown. here is the thing. i imagine and i'll be watching eagerly, andrew, your interview with speaker johnson in a little bit. he is going to be able to pass, most likely, famous last words, he will pass the stopgap funding bill for one reason. it is a clean funding bill it does nothing for democrats and does for republicans it is the exact thing that kevin mccarthy got booted out for a couple of weeks ago. listen, what speaker johnson will say is he, by passing this bill, bifurcates the funding there is one in january and

february where it puts off or prevents the year-end massive spending bill that has become a hallmark of washington that is fair, but we will see if republicans actually get anything out of that at all. there is no guarantee in january or february they will cut or change policies or what the republicans want to do this is what people were telling me last night at the capitol i don't think anyone thought jockey -- johnson would get elected. >> it is what it is. he does have a honeymoon even some of the guys in the freedom caucus said it wouldn't be the end of the world if he did this we are watching. they made all kinds of comments or implied threats about the future judd gregg was on yesterday,

jake he said this was a big win for republicans because it freezes things where it is right now and avoids that pre-holiday omnibus where everything and the kitchen sink is thrown in. if you get beyond that, it les the speaker to come back and fight another day and all of the same issues that we're avoiding here will be raised big time in january and february. >> pick your poison, joe yes, if freezes things for a couple of months, which i guess is fine. remember, there is a deal in place on government funding that kevin mccarthy cut back when he raised the debt ceiling. here is the bear case on what johnson is doing if you think it is a good idea to have two shutdown threats in the first quarter of 2024 with

joe biden's numbers where they are, i can tell you at the white house they are looking at this and saying this republican c conference will have two shutdown threats in the first two months of the election year. you can argue whether shutdowns matter as much as you think they do, but if tu thiyou think this conference is separated with two shutdown threats in the first quarter of the year, i'm not sure what the strategy is there. most speakers and leaders would say, okay, let's kick this until the end of 2024. i just don't get the strategy. andrew >> if we get a shutdown, who takes the blame for that or takes the credit for that? in this presidential election, does this benefit president biden or former president trump?

are they so separated from the situation at this point or not really >> everyone in washington besides house republicans agree on the parameters for spending white house and senate republicans and senate democrats and house democrats. house republicans would get the blame. idea of government shutdowns is you shut it down and the other side gives in when the things get tough. i just don't see that ever working out. in all of the available evidence, that never works out not only do you have a shutdown threat this week and in january and february >> the crazy eight with matt gaetz. they were crazy about ousting mccarthy here is something that really is concerning i saw messina write stop worrying about joe biden jake, i have seen the president

in recent appearances and people can decline relatively quickly when you get to a certain age. i can't imagine -- i'm thinking leading up to the election, but think we have four more years after that i think there is reason for concern. i think it could really be the beginning of the decline with tim scott out, there could be eventually one viable alternative to donald trump. those two months to the first primary and i don't know if that is a slam dunk people think it is 100% are the nominee. i think it might be one or the other might not be there or neither might not be there is that possible >> i think it is possible, of course democrats, i can tell you last night at the house vote series, we caught up with democrats who are very concerned about the president's numbers and think

frankly that they don't know what will turn it around that's the scary thing dean phillips is not the answer. i know republicans whether they say it publicly or not, are hoping nikki haley is the answer every polil i have seen has nikk haley beating by a larger number than donald trump. usually the obvious answer is the right answer both of these will be probably the nominee. speaker johnson still has not endorsed donald trump to my knowledge. that is a very interesting dynamic you may want to bring up with him in a little bit. >> wow >> it probably wouldn't get a solid answer >> i imagine not. >> good question, jake thank you, sir see you later. you have other names let us know. >> you got it. >> it is not swiftee

>> swift >> it is not swiftee >> swwiftswiftce. >> both of those were the male >> mike johnson should prepare for an answer. in the next hour, don't miss the interview with house speaker mike johnson live from washington we're coming right back. honey, i think i heard something. ok. ♪ from christmas tree mats... to floorliners... cargo liners.... no drill mud flaps... seat protectors... and more... weathertech has the perfect holiday gift. honey, is everything ok?

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coming up, former u.s. ambassador to chinesa is gary locke. a reminder, you can listen to us any time on the cnbc almaguer. an

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president biden meets chinese president xi in san francisco tomorrow this will be the first meeting in about a year with both presidents mr. ambassador, thank you so much for joining us. >> my pleasure, melissa. >> is it possible the two

presidents could declare this meeting a victory, or is there not that much overlap here >> i think they will both try to come away with a successful meeting for their domestic audiences, and the most important thing is to create a baseline of relationships and to improve from there, because certainly neither side wants the relationship to deteriorate any further. we have a lot of concerns about china's trade policies, and also their attempted theft of intellectual property in terms of government secrets and the technology of american companies. we want to make sure china does not get involved and support hamas and the iranian government, which is supporting hamas, and not providing any direct military assistance to

russia in the conflict with ukraine. >> it seems those two areas would be paramount to the american people with us funding, for instance, ukraine, and you can't send president xi back with his tail between his legs >> i don't think we should expect any agreements but a reaffirmation of the relationship and the commitment to re-establish dialogue on a whole host of areas, whether it's military, if it's a military cooperation, trying to address climate change, reducing carbon emissions, and so much is at stake at the same time china will reaffirm its stance on taiwan,

that taiwan is part of china and the united states should not interfere, and so i think that both sides will want to simply reiterate to their own audiences and own people that they raise these core points and that the other side listen. >> president xi is expected to host a dinner with top u.s. ceos, and as a former commerce secretary, how do you think the ceos should approach china it's important for their growth but fraught with difficulties, and china cracks down on not only u.s. companies, but its own companies, its own sector. >> that will be a topic for the american ceos, and they want china to recommit to opening their markets, as china promised when it joined the wto, and that

allowed china to grow dramatically and lift hundreds of millions out of poverty, and western companies have big expectations, and they feel china has not opened up the markets on the pace and schedule that had been promised they will seek commitments they are welcomed in china, and china wants more foreign direct investment within china because they need more companies to manufacture things there for domestic consumption, and when they open up factories to serve the chinese people, that creates jobs for the chinese people. right now employment is a major issue for president xi >> it's a balancing act, including western foreign investment, but not appearing too weak, but it's a slippery slope here

>> very much so. china ratcheted up its control of domestic and foreign companies, and what the companies want is greater predictability, awhat are the rules, and china keeps changing the rules. and china hunger for products made in america, and the more american companies set up operations in china, whether it's to manufacture cars or making consumer or household goods, things that chinese people will use in their daily lives, that will create jobs for the chinese people >> thank you for joining us. great to get your thoughts >> my pleasure coming up, the first on cnbc, an interview with cathie

wood "squawk box" is coming right back

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good morning rate hikes and the fed focuses on inflation data, and what tech

is moving ahead of the numbers and then house speaker, mike johnson, will join us live here on "squawk box" ahead of the vote home depot earnings beating expectations but we will get wall street's reaction to the numbers and the outlook. yes, cathie wood is here at the table. all that and more as the second hour of "squawk box" begins, right now. good morning welcome back to "squawk box" here on cnbc we live at the nasdaq markets, and i am melissa lee in for becky quick along with andrew ross sorkin and joe kernen it's a big day in terms of

cpi at 8:30 eastern time, but right now the nasdaq up by 37. the treasury market, the 10-year yield holding stable at 4.62%. the move on oil, if we can check that this morning. we have dropped 20% from recent highs. it's down just fractionally right now. and joe can get his trading strategy -- >> that's performing, right, cathie >> 36,000 again. yeah, 17 after it went to 65 did you? >> no, i didn't. >> you could have. new this morning, cathie

wood, we're going to talk with her, and joining us at the table is cio and ceo let's talk about the etfs, and talk about them and what you are trying to do >> with our partner, 21 shares, which is the largest eft crypto in the world, we are launching five etfs, and there will be bitcoin futures and crash, and one will be bitcoin futures and athey'ream futures, and then the next one will be broader bitcoin and companies exposed to

equities >> how much of this is a dress reh rehearsal in your mind >> well, we think there's a place. these strategies will be more probably institutionally focused, and i think the bitcoin eft will be more retailed focused? >> is that something you want to do eventually? >> spot bitcoin? >> yes >> yeah, our pspot is next in line >> do you think the move that we have seen in bit cone over the last, i don't know, what, two months now how much of that is a function of a pent-up demand, and folks like black rock and fidelity and

you and others made these applications have this sense that it's more likely to happen now than a year or two ago is that misguided or realistic what is that >> i think the change is the sec asked us questions, and black rock and probably has asked a lot, whereas before our filings were rejected. so that is movement. that is significant. over the years i have gotten to know the research people at the sec, and i am very impressed i was impressed by the questions they asked us, too >> what were the kinds of questions they asked >> a lot of them were technical. they were all about protecting the consumer, and, of course, the show-stopper, at least from larry's point of view is he thinks bitcoin can be

manipulated. this is a transparent network. you can follow all of the activity online. >> it had to be that, because he understands, cathie. he's got enough -- not a lot of people do, not a lot know how bitcoin works to make an informed decision, and he understands it's not a ponzi scheme or beanie baby, and there has to be something else >> i don't know what it is i have speculated he's interested in the treasury secretary -- i don't know, and i don't understand it myself >> he understands. there's something else >> how much do you account for the move in bitcoin as

speculation on the eft being approved, and is it just a straight shot if, in fact, that were to come to pass >> i am sure there's some anticipation, and there could be a sell on the news, but the fundamentals, we put out a bitcoin monthly piece every month, and can you see the health of the network using our unchained networks, and it seems like this is a bull market sure, nothing goes straight up, but i think this flight to quality, larry fink used that expression, and bitcoin went from 19,000 to nearly 30,000 as the kre, the regional bank stock was imploding. if you look at that stock today it's back down close to where it

was in march larry might say flight to quality, which is good, it's true, and we would say flight to safety there's no counter party risk in bitcoin. >> in terms of the eft that is launching, that investment in equities related to bitcoin, what do you think would be the better performer in five years, something related to bitcoin orbit coin itself? >> we believe bitcoin. we are trying to find the company that is going to produce the digital wallet that will be a very important position is it coin base or square with cash app or robinhood, or in latin america, is it new bank. >> the biggest overlap would be

arkf >> you just mentioned a number of companies all of whom have had stocks that have been challenged, including robinhood. what do you think about those companies right now? >> we think each of them has a very good opportunity in the digital wallet space basically, if you think about we chat pay, that kind of digital wallet where all financial services take place, and there's pier to pier interaction and commerce over it, and we believe the rails in the united states have been good enough. >> right >> but wechat showed the way >> is that a one-way winner? by the way, elon musk would like to be that winner. >> absolutely. i think he has plans he started in the fintech space.

>> i hit four pages of coins, and it got to the point where people said there's bitcoin in everything else. is there an application for block chain where bitcoin does not lead the world with? >> sure. the reason we have focused as much as ether and theiram, that is the decentralized network >> anything beyond that? >> well, there are infrastructure players solana is doing a good job ether was faster and cheaper than bitcoin in the day, and that's how we got ether. solana is even faster and cost-effective than ether, so you know, there are infrastructure plays we do believe web three digital assets, that's a big idea,

actually digital assets with property rights, first time ever online that we are seeing property rights >> some bears said, okay, there will be a bitcoin 2.0 that somebody comes up with >> they already tried. i think most people understand that bitcoin is the money revolution this is the first global -- >> a lot of people don't understand because they have not read anything about it >> private, and no government oversight, digital, rules based and monetary system in history, and my professor, mentor and friend, we did our first paper and took our first position in bitcoin in 2015, and when he understood what this was, he said i have been waiting for

this since they closed the gold window in -- another interesting way to understand this is in the '90s, when the internet infrastructure was being put in place, nobody expected financial services or commerce, and they forgot to build that part into the block chain. this is bringing financial services into the internet age it's the internet financial system >> we sat down in 2021, and i asked you -- i believe this is when bitcoin was selling 50,000, and it was much higher than it is now you said in the next five years, you thought it would rise at least ten fold you were looking at $5,000 a coin >> yes yes. >> if we have this conversation

in '25, '26, are you still on track? >> yes, i think the regulatory break through is very important to bring institutions online effectively, and i think blackrock and coin bases partnership will be important. and another important part is way back in 2018, cambridge associates which advices institutions, says you may not like it but you better have a point of view, and this is a new asset and we would add it's a hedge, if you are talking about bitcoin in particular, a hedge against inflation and deflation, and we think the bigger risk is deflation. >> and the product that put you

on the map in terms of being a household name to cnbc audiences, and we are back to the prepandemic levels, and you come on and you are very optimistic and future looking, and at the time you invested in the ipo, it was revolutionary. what they were doing is amazing. they revolutionized the landscape for the investor, and today are they as innovative as they were before, now that everybody has your commission trading? what about them makes them innovative still >> first of all, they are -- they're moving very quickly internationally. in crypto, i would say they have been much more conservative when it comes to the sec. if the sec deems something a security, even though others disagree and are probably going through the courts, they have taken off.

that has held them back a bit in the crypto space we think they are running hard their user interface delights the consumer to this day, and so we think they have a special place out there and we love it that they are moving internationally. coin base as well, and this is a global -- if anybody owning bitcoin knows, this is global. this is not just a u.s. opportunity. it's big if you look at both ether and bitcoin, our expectation is -- well, that the crypto asset system will be dominated by those two and that will scale from a little more to a trillion dollars today to more than $25 trillion in 2030 i was at the beginning of the internet -- not really, but as

we were studying it in the market in the '90s, this feels like that again. it's a very big idea >> before you go, and i have a couple other companies i wanted to mention you have been very bullish on autonomy, robotics and the like. what do you make of what has happened with cruz, the shutdown of cruz, or the temporary suspension of it, and dara was on last week from uber, and he said he didn't think autonomy was a real thing for five or ten years, and i think five or ten years ago they would have said five or ten years ago. >> yes, and so would elon. >> if we go and get tape of a conversation we had five or ten years ago, we probably said five or ten years from now. >> yeah, 2022, '23, '24 -- yes,

and we delayed ours one or two years to elon. cruz didn't have anything like this, five million robots around the world feed information back to tesla, and they have less accidents and information like that than all the other companies in the world combined. watching the breakthroughs in ai that we are seeing, they are astounding the speed at which this is moving, so it's interesting and i think it's a data issue. autonomous taxi platforms are the biggest ai project in the world, and therefore we think tesla -- >> you have sold tesla shares, and it used to be the number one

holding and now it's number three. you have sold some shares. why? >> whenever it goes up -- it was up 150% relative to other names, many of which we had not moved, and we always recycle. and listening to elon on the last conference call, he's very concerned about the economy, as we are >> will ilook outside five years from now and see gm and ford evs everywhere? >> it's interesting to hear both of them pull back -- >> i don't know if we will be talking about gm and ford in five years >> both are pulling back for profitability reasons. they can't be profitability in this case unless they scale. it's a catch-22. their shareholder base is

combustion engine oriented, and they want their profits now. >> will they be able to do it? >> i don't know. all i know is -- back to the tesla question, as they are pulling away, our market share expectations for tesla go up, and to answer the question, we sold as it was up 150% relative to everything else, we have not sold much since then and it will. if we were up on the autonomous taxi opportunity, it will remain in the top five in our fund, in our flagship fund. >> missing nvidia, is that a big regret >> we got into nvidia at five, and it's now at 500, and we rode it into the 500s, and surely

there's not just one winner here as we have done our research, for every dollar of hardware spent there will be 10 to $20 of software, and the key is -- the key in terms of the companies, every company in our port ffoli, we look through the ai lens, do they have the proprietary data, and they can develop specialized models and make their businesses more interesting, creative and productive >> thank you >> great to see you. at 7:30, coming up in a few minutes,ik me johnson, the house speaker will be our guest. "squawk box" is coming right back trading at schwab is now powered by ameritrade, unlocking the power of thinkorswim, the award-winning trading platforms. bring your trades into focus on thinkorswim desktop

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home depot shares off their premarket highs, but up about 0.6 of a percent that was less than the drop, 3.6% drop that analyst had anticipated. we will talk to op kwrpb heimer's brian nagle and then a larger than expected quarterly loss for fisker. we are watching shares of kraft heinz.

the stock is at 1.7% >> really? kraft is down because of the weight loss drugs? "squawk box" will be right back with a preview of tod'say cpi data and what that can mean for the markets. we'll be right back. warning civilians to clear out, while hamas forces them back. allowing in food and water, which hamas steals. rylee! from rylee's realty! hi! this listing sounds incredible. let's check it out. says here it gets plenty of light. and this must be the ocean view? of aruba? huh. this listing is misleading. well, when at&t says we give businesses get our best deal,

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welcome back to "squawk box. cpi data out in just over an hour steve liesman joins us >> it will explain why the fed is on hold on hiking rates, and unwilling give up the threat of hiking more. and bad news in the core, just 0.3, unchanged from last month, and the trouble is that the fed achieved zero inflation in goods and less energy but far less in service inflation. prepandemic goods was zero or negative, and services ran 2.5%,

and motivating the fed's patience andrew, that keeps the fed's fingering hovering just above the hiking figure. back to you. >> thank you coming up after the break, our interview with house speaker, mike johnson, and he will be talking about a possible government shutdown after this (♪♪) (♪♪)

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later this morning, house speaker, mike johnson, will face his first steps in avoiding a government shutdown as the house is set to vote on the two tiered budget plan. good morning >> good morning. >> the president gets 100 days before we can decide how it is going, and i think how long do

you think you got before we judge you. are you already beyond that period >> i think i may be judged this morning, and we will find out. i have been on the job three weeks, and it's like drinking from niagara falls what we are committed to is changing the way washington works. we have to you are educating your viewers to let them know that the trillions in federal debt is not sustainable, and the downgrading by moody's is not a good thing these are the pains of bidenomics, and we have to change it and we are putting a flag in the ground to do it. >> plenty of blame to go around, and bidenomics are not good, and you are well aware of the debt

raised with trump. aren't we just delaying some of the hard decisions that need to be made and some of the tough negotiations that will need to be made? >> we are rolling our sleeves up and looking forward to the tough decisions and negotiations if we don't do the two-step, it's a paradigm shift for how washington works, and it will allow us to have the debates out in the open so the american people can see it. if we don't do that, what will happen and what would have happened is a christmas omnibus spending bill. this has been the habit where the senate jams the house right before the christmas holiday with a giant bill thousands of pages long, adding $100 billion

of new spending, and that's no way to run a railroad. this prevents that from happening, and we will have a bipartisan agreement that this is the better way to do it i began that immediately after i got the gavel. here we are on the eve of november 17th, and we have a shutdown looming and we have to prevent that because that would be doing more harm to the economy. >> you said since you have been there, how many times have we done the omnibus before christmas and how did we get there? >> that's all i have ever known. i have been in congress seven years, and it happened way before that. the appropriations process in washington has been broken for decades. we are trying to fix it. i have been on the job in less than three weeks, and this is the necessary step in a way to do it. there's a law and a statute -- a

whole list of statutes put together in the budget act of 1974, and the president is supposed to present a budget in february and congress begins its process, and it's very methodical and then you finish it all up by the end of june and there's plenty of time to do it before the end of the fiscal year that has not happened. lawmakers get lazy and like to punt the decisions as long as possible and that's no way to do it governing by continuing resolutions is not a healthy thing for the economy, and it has resulted in us spending more than we should spend because there's not proper oversight it will allow us to consider spending in smaller batches, and that's good financial stewardship instead of doing it all in one giant bill.

that makes sense and i think the american people will support us in that. >> you must at least be hearing from the other side about support? we heard from leader schumer about it, and i don't know if leader jeffries has weighed in yet. how many do you expect to lose within your caucus for lack of a better term, i still call those guys the crazy eight because the former speaker labeled gaetz and them the crazy eight, and maybe that's not fair, but how many democrats do you expect to be on your side here, and that was the cardinal sin or the mortal sin that speaker mccarthy, i guess, was guilty of, and he lost his job because of it. you are allowed to deal with democrats at this point, mr. speaker? it's your honeymoon. does it feel like a honeymoon? >> not much of a honeymoon in

this job because the crisis are too great. we are doing different than what kevin was presented with, and he was in a jam as well, but by breaking this up the way we are, it's a new shift yesterday you had on dr. harris, and this was originally his idea we credit him with that and others that worked on it, and i think it's a real innovation it's different than what we have done before. i hate crs as much as anybody, and it's not the way you are supposed to do it, and we are not going to do this again under my leadership, and i think we have a moment to change the way it's done. with regard to the whip count, i am not sure yet. in about an hour or so we will go in and figure out the final numbers. i am working on the guys in the eight that are my dear friends and across the conference, and i

want all the republicans to vote on this because it's the first step in making the change here >> you have not made any enemies yet, and that may not last long. that's why i was asking about the 100 days we had a gentleman on earlier, jake sherman, and he said two more shutdown possibilities on the table if you do it this way, january and february you have president biden with some of the lowest numbers of his presidency, so here we are going to suddenly -- republicans are going to be blamed for trying to shutdown the government again in january and february, and maybe once again snatching defeat from the jaws of victory by giving cover to the biden administration for all the bad things happening in the economy. >> no, look, i think that is a way-too-cynical of an outlook. we just ran out of time.

we need more time to finish the appropriations process what we have done, set two deadlines, january 19th and february 2nd, and january 19th will be the first batch of bills, and the other eight will be announced before the deadline there are measures in place that will create incentives for that, and january 1st there is a cut that sets in on the government spending in the various areas, and if we don't get the appropriations bill done by the april timeframe, those incentives will set in we also can train our attention on getting conservative wins in the supplementals, to get proper oversight of additional ukraine funding if that materialized and get israel funding

all those we can look at separately and evaluate debate, and we can't do that again if everything gets handled in one giant omni bus before christmas. >> president biden looks like the candidate in 2024. when you were named speaker, a lot of people said a big trump ally, but as far as i know, you have not endorsed the former president yet for 2024, and this is -- everybody is watching this show right now if you are going to do that, it would be a great time to do it, mr. speaker. are you ready? >> i have endorsed him wholeheartedly i was one of the closest allies president trump had in congress, and he had a phenomenal first term we brought about the greatest economic numbers in the world and not just the country because his policies worked, and i am all in for trump i suspect he will be our

nominee, and he will win it and we have to make biden a one-term president. we have to do that >> mr. speaker, i have so many questions, but coming off of the back of that, just speak to it, because i think there are a lot of americans that look at the former president as fundamentally divisive to the country, and they look at january 6th and the like, and they think to themselves, even if you like the policies that came about, what it ultimately did to the country and questions about democracy. there was a story over the weekend in the "new york times" talking about how he planned to approach immigration i know there are a lot of folks that want to be harder on immigration, no question, but some real questions about how he thinks about that, and some of the things that have come out in the last couple of days about january 6th and his intent to stay in that position irrespective of what the actual public and citizens were voting

for, and how you think about all of those things? >> listen, i think when we are voting for president it can't be about personalities but has to be about policies and principles, and you if want liberty and security for the country, you contrast the two policies and the principles of trump and biden and it's not even close under president trump we had a thriving economy and did not have all these skurplishes around the world you look at what is best for your family, your security, your safety, the economy, your pocketbook, and we have to make these radical changes because the american public is hurting, and we can't handle these things and that's due to the biden white house. >> i read the same piece andrew

is referring to. if he truly believed at that point in his presidency that it had been stolen and there was too much fraud, i can see why somebody would say i am not leaving, i'm staying here. is that what you assume? because if you know you lost and still are going to stay, that's a dangerous precedent you would argue he believes -- >> he says it every which way. >> i take him at his word. i do believe he believes that. remember, i was one of his lawyers and worked on defending his position, and i know how he thinks, and because of all the irrig irregularities, i understand --

i didn't read it because i have been busy. >> you say you take him at his word there are many things he said before his presidency and now, that are not accurate. i say that politely. it's sunny outside, and he would say it's raining, and a lot of americans think that's hard to trust. >> listen, there are a lot of people in washington who are saying things that are not accurate all the time, and everybody does, we are human, and with regard to the election and what he believes, that's deep in his heart. i talked to him personally about it and many of us have, and over the years you have heard him say repeatedly he feels like he was cheated. when i say we should take him at his word on that, he believes it i don't know what comment you are talking about in this article, i know he has been consistent from day one.

he does believe in the rule of law. and look what he has done on the supreme court, and we have many judges that he appointed -- >> you are talking about the rule of law, and he's now been indicted on 40 different charges. is there such a juxtaposition behind the rule of law, and then there are things he has done that broke the law, and i will stipulate there are elements that are probably true that are political, but not all of them >> listen, i think it's motivated by political prosecutions, and we call it law-fare, and it's another way to go after a candidate. what happened to trump is unprecedented. every time a new indictment

drops it is followed by a favorable look, and you have an fbi and doj that have been weaponized against their political enemies. i have been in the questions, and i requested attorney general garland and christopher wray from the fbi, and we have oversight responsibilities, and we are using the power of the purse and our oversight responsibility, and we will use every tool in our arsenal to bring back the american faith. >> can you change the way washington works, mr. speaker, if the political polarization within pt republican party continues? that could very well be the result of another trump presidency a lot of the challenges you and the party face past the

government shutdown, a donald trump presidency, would all but guarantee that that remains as opposed to electing a more moderate republican? >> look, i am an optimist. i think our best days are ahead. i think we have energy in the grassroots right now, and i think president trump's polling numbers is an indication of what people think of the country, and i think the thing that unites the party is our core presidents it's individual freedom, limited government, peace through strength, and free markets and human dignity. these are the things, and right now the republican party is the steward of our principles, and the democrats are undermining those principles i am excited to go to every

swing district with my colleagues and talk about those things because that's what makes america great. >> you have spoke about faith in your live, and it was the first day you were sworn in, and it looked like you were praying on the floor with another congressman, and there's a question about the separation of church and state we often talk on this show about if religion should play a role inside a company, and if people should be able to pray inside a company. it's one thing to pray outside and to have your faith, and there's a great importance in that, but how do you think about that and the public perception of that? >> listen, faith, our deep religious heritage is a big part of being american, and a general

moral consensus and virtue was necessary to maintain the grand experiment in governance we don't have a king in charge, we don't have a middleman, so we have to keep morality amongst us so we have accountability. the separation of church and state is a misnomer, and it was a phrase in a letter jefferson wrote and it's not in the constitution, and it's not that they didn't want principles of faith to have an impact on our life religion and morality or indispensable supports, and john adam said our constitution is made only for moral people, and they knew it would be important to maintain our nation >> we will be watching, and i

don't know -- i guess i should say, good luck i don't want the government to shutdown good luck today, and good luck in, man, 100 days will probably seem like 1,000 days by the time it's all said and done thank you for all your time. and we're the least of your problems, and you have your caucus and the other side to deal with. thank you for all your time. >> appreciate you all. >> "squawk box" will be right back this is "real time insights." i am here with lee henderson we are talking about landscapes for mid size companies >> deals are still getting done, and venture capitalists are being more focused on profitability, so when you skew

that formula to profitability, and we will see longer close times. >> how should mid size companies adapt their approach to fundraising? >> the realization is it's >> the realization is it's tougher right

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home depot beating earnings expectations with 381 compared to 376 consensus expectations. revenues also stronger than the street forecast. joining us now to break down home depot's latest report is brian nagel, oppenheimer senior analyst. they also fine tuned their look in terms of sales and et cetera. what did you make of -- any surprises here does this justify now this sort of market multiple that it's trading at >> yeah, good morning. look, i think -- i was joking with our sales team a few minutes ago. i think the big positive here is that there are no surprises. i mean, this is very much an in-line report from home depot, and relative to the market sentiment, that's a positive you know, the key here is, the business is holding in well. okay, this is despite all of these worries about further deterioration in spending, a potentially deteriorating housing backdrop and in my view, the positive here is, this sets up, this

paves the road, if you will, to a better 2024. and i think that's where home depot stock really works >> why is that -- is 2024 better, just because you expect rates to come down or stabilize at least >> well, in my mind, there's a couple of big factors at play here one, i think rates i'm not a rate expert. i keep a very close eye on rates, given my coverage of home depot, lowe's, and other names but i do believe that rates in 2024 will be moderated i think that's a big positive for home depot the other key here, and i've talked a lot about this on your show and elsewhere, we need to get further away from the pandemic home depot and others are still talking about this weaker demand for bigger ticket items. there's probably to some extent a confidence issue in there. the consumer feels less confident. i also believe that these are the products that sold particularly well during the pandemic there was likely a pull forward in demand. we just need to get further past the pandemic for that demand to

sort of reinvigorate and i think that happens in 2024 >> lowe's reports next week. what is -- i mean, there are differences in the business like home depot is more leveraged to the pro business, for instance but lowe's has a cheaper multiple which one do you like better here >> well, exactly what you said, melissa. the multiple at lowe's is very attractive here. you know, it's really surprised me, despite all of the fundamental improvement that has happened at lowe's, that that multiple has not climbed closer to that of home depot. i think the lower multiple is a big positive for lowe's. next week, i expect a very similar type, benign report out of lowe's, which again should be a modest positive. but again, as we look towards 2024, i think both home depot and lowe's set up quite well here from an investment perspective. >> brian, thank you. appreciate it, brian nagel, oppenheimer. >> okay. coming up on the other side of this breaking economic or inflation data, the latest read on cpi is out at 8:30. futures ahead of those numbers dow off about 17 points right now.

nasdaq looking to open higher, about 28 points higher the s&p 500 off, we'll call it unch for now "squawk" is coming right back.

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october's look at the consumer price index. in the meantime, retail earnings kicking off. home depot out with third quarter earnings the numbers and stock reactions, straight ahead and crunch time for congress we're expecting a vote today on whether to fund the government before that, we'll bring you hi highlights from our interview with house speaker mike johnson. the final hour of "squawk box" begins right now good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site, times square is it cpi day, too oh, my god a lot going on i'm andrew kocurnan along with andrew ross sorkin and melissa

lee. a lot going on today >> less than 30 minutes -- >> cpi today pp -- i said -- ppi is coming up too. u.s. equity futures at this hour, as you can see now, about where they were. flat on the dow jones, up a little, 36 on the nasdaq and s&p up about 270 treasuries, 461 or so on the ten-year we're back to sort of fixating on that part of the yield curve, even though the two-year is back above 5% among today's top stories, we've got home depot results the company beating earnings and revenues expectations. total comp store sales fell 3.1% in the third quarter that was better than an expected 3.6% drop and the company also narrowed its full-year earnings, sales, and comp store forecast and president biden and president xi are preparing to announce a deal that would see china crack down on the export

of fentanyl. that is according to a bloomberg report biden and xi are set to meet at the apex summit tomorrow in san francisco. we'll get a live report on that later this hour. and the international energy agency raising its oil demand growth forecast for the year, and this is despite growth in nearly all major economies around the world the iea said oil market balances will remain vulnerable to heightened economic and geopolitical risks and further volatility >> let's get back to the broader markets, check in with mike santoli. mike, what are you watching this morning? >> good morning, melissa the s&p 500 continuing to idle in place here, as it did yesterday, basically a flat performance from the benchmark but that means it's held on to this 7.3% gain over the last couple of weeks. off that late october low. here's where it sits, just nosing above this 100-day average, so there's some

technical progress that's happened here. broke above that line from late july shows that there's forward motion here on the market-cap weighted s&p 500 a lot of quibbling about what it means that the average stock has been lagging so much but for most folks, invested according to the index things look okay for now we'll see reaction to bonds or the cpi. take a look at the global picture. a lot of talk about this meeting, biden and xi. this is the two years of the u.s. market total stock market index, emerging markets excluding china. and then china indexes so, you see massive underperformance, also a series of these kind of false starts, lower lows and all the rest. i think the big question is, is it getting washed out? is it already pricing in a lot of economic malaise there? the bank of america global managers survey, the respondents said that short china is the second most crowded trade in their estimation it's hard to figure out if that means if all money managers think it's a crowded trade, is it really too crowded or not, but it's worth noting this

historic level of underperformance in the last couple of years. also, finally, looking through home depot's numbers, as you guys have been over the last hour or so, over the last two years, home depot mostly sideways here you have home builder stocks actually really outperforming, as we all know. and home depot basically trading right in line with equal-weighted housing discretionary. housing turnover helps home depot. we know that market has been frozen decent numbers today we know the market wants to give them credit for coming through we'll see if there's any catch-up to be had relative to the builders >> but in terms of holding on to our gains recently in the s&p, rates can go back up to five we have that respite, still. that's probably what the markets are looking at in terms of cpi and other economic data. if we give back what we lost in rates, then that could be, you know, trouble for the markets. >> no doubt. it's a precarious relationship

i don't think we can take for granted that we've had some kind of major top in yields, and that's why the market is kind of moving with every twitch of the bond market. that is why i say, we've kind of outsourced the interpretation of the inflation numbers to the treasury market. now, of course, it's not the fed's actual inflation gauge we are expecting some stickiness at the core. we'll see if a lot of that gets looked through, if, in fact, it's an unfriendly number under the headline >> mike, thanks. mike santoli >> as we mentioned, under half an hour now until the october cpi number investors waiting to see if the fed has made additional progress in its fight against inflation joining us now with her market take, citi global wealth's head of north america investment, kristin bitterly is that what you care about? jay powell and the fed at this point, kristin, or one of the things that you care about >> i think it's one of the things, and maybe what we could say is that the fed's trajectory from here is the most important thing. it's not a question of how high

any longer, it's really for how long are they going to hold rates at this level. and i think watching other signposts -- cpi is certainly important. i think the most important part of cpi, though, is when you look at the composition of cpi, you have shelter at 35%. if you were to strip out that 35%, we're at the 2% target. and we all know that owners equivalent rents have a lag in terms of showing up in the data. so realtime, we're seeing that number decelerate, where we don't anticipate we'll see it in the data yet so i think looking through to, is inflation continuing to cool and go in that trajectory, which means the fed would be on hold >> do you think that the recent move in the ten-year, that emboldened the bulls to say, wow, there's some good things happening, is that going to be lasting, do you think, or is it -- you know, are concerns about, you know, the long end, going up again, not being -- the

treasury not being able to sell anything over five years in length, will that be a problem again? and i guess that depends on the -- somewhat on the cpi numbers today and next month >> i think there's some technical factors that are driving that, as well as some fundamental factors. so when we look at the technical factors, it is a function of, you know, who is the natural buyer of the ten-year, and everything that's transpiretrans well as just the supply that's required in terms of meeting debt servicing, the additional supply that has continued to come to the market, and also just naturally, where are investors putting capital to work even our investors, when you're looking at the opportunities that exist within the fixed income market, you can get really attractive yields by going out three to five years. you can just kind of hang out within that intermediate term duration, instead of stretching for duration, and lock in some really attractive yields that are north of 6%, for example, on investment-grade corporates. so i think we could continue to see volatility within the ten-year, but one thing that i

will note, history has told us that when you see a peak in fed funds rate, that's also when you tend to see the peak in the ten-year, as well. >> some people said that we talked to yesterday that the most recent bounce back that we've seen was kind of a nervous, non-committed bounceback kind of a fomo, i don't want to be out, but i don't want to really be in is that a good thing, that people aren't embracing it to the point where the sentiment gets to bullish? >> i think the sentiment -- so overall, there's a lot of nervousness in the system, and i would agree with that. there's a lot of people that continue to be significantly overweight cash on the sidelines. and so, i think you need to break down all of the major signs and what they're telling you. so if inflation continues to cool, if we see some cooling within the labor market, if we see that we've actually see earnings trough, this quarter will be the first quarter that we've seen in over three quarters where we're actually pivoting now to earnings growth

on a 12-monte basis, year over year so you have a number of signs that a lot of the recessionary conditions certainly from a profit standpoint, are behind us and so you add that, and that the fed could be at the end of their trajectory, i think there's excellent opportunities to put capital to work both within the fixed income, to lock in some of these yields, as well as the broadening out of the equity rally >> will the fed cut next year, kristin? >> i think so. i think so our view is one where, will the data give them what they need within the first half of the year probably not so i know there's a lot of disparity right now, within market views as to when we will see the first fed cut. i think the fed ultimately is going to look at this trajectory of inflation and look at the deterioration of the employment backdrop, and that's, you know, that's their mandate they have to look at those two things and when they feel confident in seeing that through in the data is when we would anticipate that

we would get our first rate cut, which will most likely probably be summer or second half of next year, in our expectations. >> and is anything going to break between now and then, do you think, that could bring it -- make it happen sooner? is there a recession next year >> i think the recession -- i think the traditional recession that everyone was expecting is not something that we're going to experience, because as i mentioned, we already had the profits recession in terms of this financial tightening. we've already seen this interplay between services and manufacturing. when you look at the manufacturing data that we received recently, that is in contractionary territory and some of the lowest levels that we've seen since the 1990s. and so seeing this play out through the system, it's not in the traditional sense of everything, all at once, and how asset prices react to that is also something that i think we have too much of an anchoring bias, and even a reecency bias

when it comes to comparing everything to the financial crisis a great data point that i read today is that when you look at the past nine recessions, home prices, for example, actually rose, in seven out of those nine so i think in preparing your asset allocation and preparing your investments for where we see opportunities today, based on entry points, both from an equity market valuation and beyond that magnificent seven in select pockets, as well as in fixed income and high quality locking in some of these yields can help you navigate through a recessionary environment or just a slowing growth one >> okay, we're going to leave it there, kristin thank you. >> thank you >> about 19 minutes, 18 minutes ago, we'll get -- we're going to talk about it now. thanks, kristin. >> coming up on the other side of this breaking cpi inflation numbers, we'll bring you that data and talk through what it all means for the fed, the markets, and more. and later, the personal relationship between president biden and chinese president xi, well, will it be enough to deliver some economic wins when

the two men meet tomorrow? we're going to head to san francisco for a live report. and a reminder, you can always get the best of "squawk box" in our daily podcast. follow squawk pod on your favorite podcast app and listen anytime. workplac e benefits and retirement savings. with voya, considering all your financial choices together can help you be better prepared for unexpected events. voya. well planned. well invested. well protected.

welcome back to "squawk box. the futures right now are fairly quiet ahead of cpi report due out in 15 minutes time s&p looking at three at the open nasdaq looking to be higher at 38 at the hope dow up by 7 right now, in part helped by home depot it's up by 1% on the back of earnings >> meantime, google's video platform youtube changing its content rules. it will soon require video makers to disclose when they've uploaded synthetic content that looks realistic. the policy goes into effect some time in 2024 so, still several months away. and youtube says creator who is repeatedly choose not to disclose when they posted synthetic content may be subject to content removal or suspension of its creator program that allows them to earn ad revenue so following in the footsteps to some degree of what we saw from meta about a week, week and a half ago now, when they came out with a similar type of policy. i thought their policy, though, might be related to political

content. this seems broader, to some degree meantime, the house expected to vote today on speaker mike johnson's plan to keep the government funded beyond this weekend's deadline at the moment, it is not clear at all whether that legislation has enough support to pass johnson joined us last hour on jac "squawk" and here's what he had to say about it. >> we're rolling our sleeves up and we're looking forward to those tough decisions and those hard negotiations. if we don't do the two-step, the ladder cr, as we're calling it, it's a really innovation, a paradigm shift for how washington works but that allows us to have those fights out in the open if we don't do that, what is going to happen and what would have happened here again is another dreaded christmas omnibus spending bill. >> joining us right now to talk about the government funding plan and what the drama in washington could mean for the markets is deputy head of u.s. policy at piper sandler, former economist for the house ways and

means committee. how do you handicap it, sir. let's talk about first what's going to happen in congress, and what it does mean for the markets. >> i think this round is more likely than not to pass. i think we've seen good signs from democrats, both in the house and senate, that they're prepared to take this up and assist you'll see, you know, a few dozen defections on the republican side. but overall, you know, i think even the far right is going to give speaker johnson the latitude to move this bill, and not oust him, even though it's effectively the same thing that speaker mccarthy did, which is a cr to buy more time to fund the government as for the macro economic outcomes, i think it's worth taking a step back and just looking at the deltas here they're pretty small in either direction. if we fund the government at the fra or fiscal responsibility act levels, which is the summer debt limit deal, spending goes up $28 billion. if we fail and we just pass continuing resolutions for the foreseeable future, we trigger the 1% sequester, spending goes down $16 billion we spent $6.3 trillion last

year, so overall the numbers are pretty small >> how do you think the market reacts or do you think the market doesn't care >> i don't think it cares that much in the short-term if we shut down, it has a larger macro economic impact. i think a shutdown would be short lived. you know, what is unique in this circumstance is that the military has not yet been funded so, if we shut down, the military is paid twice a month, active duty military doesn't get paid i think that would end the shutdown pretty quickly. so i think the market impact of this sort of thing from a, you know, what is the fiscal spend and all of that is pretty small. i think when we get moody's or these other ratings agencies that are starting to factor this into their calculus, i think this shows that this will ultimately matter more, but in the short-term, i don't think there's a large impact >> i mean, that helps with the democratic side, to have the military -- that's part of the reason why they're giving the go ahead on this, i think, dom.

let me ask you this. we had the speaker on, and he said that the days of the omnibus, you know, christmas eve bill, that this means it's not going to happen anymore. is that what this means? that would be good if it didn't, a lot of people think. does this change the rules of the game and how things are done, permanently? >> i think that's the only selling point he has, in effect, which is that you put some deadlines into the new year, so you don't have a holiday backstop that is a reasonable thing and then the other is by putting four appropriations bills on one deadline and eight on the other st is that in theory, you could force the senate to gonegotiate bill by bill and get some kind of spending concessions. but i think the strategy is ultimately doomed to fail in the sense that what house republicans want is to fund the government below the levels they already agreed to, in june so, i think they really have two

options, which is just fund the government at the levels they've already agreed to or shut the government down and ultimately lose in this fight and then fund the government anyway >> well, you know, he can't change the makeup of his caucus, so you know, that's just -- facts are facts and, you know, the executive branch and the senate are both in democrats' hands. these are just the realities of the situation, i guess, for johnson. >> yeah, very much so. i think -- and that's ultimately what the message he should be taking to his republican colleagues, who haven't wanted to support him on these bills. by definition, this bill needs to be moved through a democratic congress to be signed by a democratic president it will by definition be bipartisan he can't cater to getting all 217 republican votes it's going to be a bipartisan bill he should take the win they already got on the debt ceiling bill by the way, democrats took two fundamental lessons from the obama era. one of which is, if you have a recession, stimulate more than

you think you need to, and two, do not negotiate on the debt limit. republicans got a victory. they got democrats to negotiate. this is the final best offer and i suggest they take it >> what do you think of moody's, by the way we didn't really talk about that the market seems to have not cared so much, but maybe there's something underneath it that you think we should be worried about? >> so they did shift from a stable to a negative rating. so moody's is, i guess, moving towards joining the sort of consensus on the outlook you know, the market didn't move much on the fitch move i think it was more of, interest rates responded more to the qra and broader deficit questions and stuff like that. so i think all of this just a consensus is building, whether we are paying for it in the short-term is not clear. but a consensus is building that political leaders, and we have dysfunction, first of all. we can't maintain fiscal measures but the bigger problem is everyone recognizes that we have

an unsustainable deficit trajectory, but neither party, especially the leaders in both political leaders are explicit in their platforms about not touching the drivers so in that sense, i think there will be room to worry in the future, when the drivers of our debt are basically untouched by policy >> i want to thank you for your time and perspective on all of this morning we'll see that cpi data in just a little bit, and see what happens later today. and later this week. thank you. >> thank you >> almost time it's 22. coming up, october consumer inflation data, economists expecting, remember this, a year over year poor cpi gain of 4.1%, unchanged from the last reading. but that's probably the number we need to think about, whether it's above or below that plus, we'll speak with a top tesla analyst on the latest ev headlines. and our wide-ranging interview with elon musk and bitcoin bull,

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accenture. let there be change. welcome back to "squawk box. insider cofounder henry blodgett stepping down as ceo of that publication. he's going to become chair of the company's board. insider president barbara pang will take that ceo job the site also is going to change its name back to what it was

formally known as, business insider. blodgett helped create the brand more than 1,500 years ago. the german publishing giant asquired a majority steak in 2015 so -- by the way, one of the great success stories and comebacks -- i mean, comeback story for henry, but also, in terms of media brands and sites and news sites in the business, journalistic space, i can't think of actually something else that's actually emerged in the last decade or decade and a half that's had the same -- >> media for business, i think it's click bait. >> mediaite, which i find to be a fascinating site, with no disrespect to mediaite at all -- business insider is a massive business >> i like going back to business insider instead of insider, i don't know it's -- it's sort of too broad business insider but it's click bait, at its heart. but everything is, is it not

sometimes even work click bait >> no, no, some of this is click bait, i'm not -- but i'm just saying, i like mediaite. enjoy to mediaite all the time >> it's insufferable >> anyway. coming up, breaking inflation data, october cpi is next when "squawk box" returns

[ "i'll be seeing you" by the five satins ] ♪ ♪

one more look while we have time at the futures, ahead of the cpi number, the october number, which will be here in about ten seconds, you can see the dow has turned marginally positive it's up a little it was down earlier. nasdaq has been the strongest today. let's get to rick santelli, standing by with the numbers hey, rick! >> hi, good morning! yes, october read on our consumer price index, mo month-over-month headline expected up 1/10 comes in at zero, unchanged, zero, which equals the lowest we've seen on this metric, since we hit our high at 1.2. that was in june of '22. that was the highest since '05. so zero ties, that's the lowest we've been if you strip out the all-important food and energy, it's up 0.2. that's 0.1 cooler than expectations and the rearview mirror

year over year, year over year headline, up 3.2%. 0.1 lighter than expectations. 0 half a percent lower than the look last time 3.0 in june of this year was the lowest since march of 21 so we're still above that level. and finally, what i would consider potentially the most important, even though it's ex-food and energies, year-over-year cpi, 4% 0.1 lighter than we were expecting, 0.1 lighter than our last look, which was 4.1 and the metric there, this is a biggy, we haven't been under 4% since may of 2021. yes, under 4% since may of 2021, although this is the lowest level since 6.6, which was the high water mark in september of last year. now, if you look at the markets, interest rates have moved down we moved from basically 461 in

10s down to its current level at 447, which equals our intraday low test that we had last week so you want to pay particularly close attention, and the pre-opening dow futures have moved higher as well, dramatically higher, as well like, 300 points higher as well. so this number is being taken as a good sign. and i understand why especially if you look at the month over month and you start interpolating out. but i will still leave us all with the notion that 4% year over year ex-very important food and energy, and by the way, all these stories about evs and power grids and losses on transition, they're not going away these numbers for energy and pockets of energy are going to stay firm. but that is the number that i think is important all the metrics have moved lower and as i said, even though all of these have moved lower, they haven't really taken out, other

than the headline equaling the lowest level since our high water mark, the others still have comping above levels that were lower the 3.2 is obviously good news, but as i said, it was 3% in june we want to pay more attention to how this transitions into the actual opening, but we'll toss it back to the panel to debate some of these numbers. joe, back to you >> yeah, immediate reactions, though, pretty big, bigger than we've seen recently. stay with us let's bring in our senior economics reporter, steve liesman, along with joe lavorgna, chief economist at cmbc mikko, and teresa richards, served as an economic adviser to the president when he was vice president. steve, we'll go to you first and i think one of the things rick said was that 4.5 that we saw has been breached on the downside for the ten-year. that's sort of, i don't know,

that's like a confirmation of that move, maybe, at this time, because of the cpi number. >> yeah, i think that's right, joe. there has not been a lot of inflation in the move up in interest rates and it's interesting to see some move down in it it's not quite there yet, but we're still quite a bit above financial conditions being tighter. this is a good report. there were some surprises to the downside, and it's been a bit since we've had surprises to the down side. we're incrementally making progress towards the fed's goals here one of the big standouts here was the owner's equivalent rent, which is the proxy for housing, down to 0.4%, over 0.6, surprising to the upside, in the prior month. we've got gas down 5%. that's headline stuff, not really a big issue used cars down 0.8 that's a big number there. physician services also down 1% while household services were

up and one quickly, airline fares down 0.9%. that probably comes along, a way that energy seeps into the service sector so, i think that if you were to draw -- let's say the fed was e equidistant between hiking and not hike, this is an incremental move towards not hiking, again i think the market likes it that way, joe >> and lavorgna, this -- i guess you just say that the fed has been too tight and this is exactly what you said was going to happen, right? >> i did joe, the thing about it is if you look at the headline inflation rate, it peaked in june of '22. and core cpi peaked in september of '22 that was way before monetary policy got anywhere near restrictive. so if this economy as low as, and it is, then this inflation pressure should moderate even more going forward this is good news. the trend in headline is important, because the fed looks as inflation expectations, so that flat reading that takes

that year over year rate down close to 3% is very powerful i don't expect the fed to hike anymore and do expect it to be cutting next year. >> so, kitty, this is good news on inflation does it indicate that in an election year, we might have something that might not be ideal in terms of economic conditions, or do you think that it will be just right, leading up to november >> well, what i would really like to focus on is getting beyond the numbers, so what joe said a moment ago, i couldn't agree more if you look at the path of inflation, we have had rapid disinflation after a peak that was, as he pointed out, before the fed's interest rate hikes really got going and we've had that rapid disinflation in the context of a booming economy, quarterly gdp growth last quarter in real terms was 4.9% we've seen 21 straight months of unemployment below 4%. something many economists didn't think would be possible. but even today's cpi numbers, as

good as they are, they are hiding an even better picture. and that's because of the role that housing inflation plays in the way that we measure the cpi. so if you think about the path of real housing inflation, as opposed to the inflation that's measured by the cpi, by the bureau of labor statistics, we've actually seen rental prices and rental inflation peak much, much sooner than even the cpi would indicate so this month's 0.4% is a drop in shelter, but it is the entire driver of core inflation going in the month, month over month and it reflects prices for rent from about a year ago. and if you look at market indices of rental inflation, it normalized year over year several months ago and in fact, peaked well before, on a month-over-month basis, the fed started hiking interest

rates. so i think it's really time for the fed to ask, did we go too far? what real damage are high interest rates causing, by making it more difficult for corporations to finance investment, by making it more difficult for us to move to green energy, by making it more difficult for people to actually afford homes and be able to make their credit card payments >> at the same time, i mean, that is the sort of longer-term look at financial conditions but when you take a look at the ten-year yield dropping to below 4.5%, joe lavorgna, you think about things like the general motors goldman sachs financial conditions index, two years ago, it was the biggest drop from 1990, when you see the knee-jerk reaction in the futures market, you think, at what point does the fed take a look at this and think, oh, my gosh, we don't want the markets to get carried away with thinking that we are done >> you know, melissa, i don't like that financial conditions index.

i don't think it's reflective of what's really happening. yes, ten-year yields are down, by the treasury morgan basis is very wide. so mortgage rates are up at 8% that's more than double where they were about 18 months ago. and household effective borrowing rates, when you include not just mortgages, but auto rates, credit cards, personal loans, those are at the highest rates in over 20 years and the consumer is 70% of the economy. they are seeing much, much tighter financial conditions, and the senior loan officer survey from the fed shows that their credit availability is weakening. not only do they have to pay more for credit, that assumes they can even get credit so for me, financial conditions for the bulk of the economy are very, very tight >> hey, rick, when does the $33 trillion come back and was inflation transitory all along? >> yeah, you know, i think inflation, a good junk of it may be transitory with a timeline

that is significantly longer than jay powell and company thought just several years ago, but i still will contend that we have a slice, a significant slice of our energy costs that is going to affect manufacturing, it's going to affect the bottom of the food chain logistics for moving any product across the country, and it's going to remain sticky. listen, i'm agnostic when it comes to inflation i just don't see us at 2%. let's really look at this and be objective here outside of the headline at zero, which made some nice progress, okay, let's look at ex-food and energy month over month. we justed eup 0.2%. the month before that was up 0.2. doesn't sound like we're really going anywhere year over year headline, 3.2 now. it's been 3.7, 3.7, 3.2, 3% in june of this year. 4.4% on the year over year

hasn't been below 4% since may of '21 i could make an argument that we have a long timeline, but, yes, we're drifting lower we're just not drifting quickly to 2% op and i'll throw another issue out there. if you look at the jpmorgan client index of their positions, which everybody is buzzing about, it basically shows some of the longest positions going back to 2010, okay why is that important? because we're moving around 4.5% at a time when we couldn't have more longs in the market i'm not saying we can't keep going down in yield, but ponder that and consider what bias that gives us on the conventional wisdom >> okay, we've got to end it there. thanks to our panel. lavorgna, joe lavorgna, katie -- steve, what? was that you talking >> i just wanted to point out that the probabilities of the fed tightening have now really cratered you were at almost 30% going into this number it was now last i looked down at 7% a market taking a dramatic

message from this that really is counting the fed out again it may be overdone in my opinion, but i guess we can debate that tomorrow >> okay. all right. thanks, steve. thanks, everyone okay, coming up, what to expect when president biden meets chinese president xi, xi jinping in san francisco tomorrow eamon javers will join us live with that story. stay tuned you're watching "squawk" and this is cnbc powering sustainable growth in a changing world. powering financial solutions that transform industries. powering innovation with access to capital. powering critical decisions with precise data and insights. powering seamless execution in evolving markets. we deliver our entire global bank to power

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that first time you take a step back. i made that. with your very own online store. i sold that. and you can manage it all in one place. i built this. and it was easy, with a partner that puts you first. godaddy. futures jumping after cooler than expected cpi data the nasdaq looking at 247 right at the open. the s&p looking to be higher by 52, and the dow, up 320. treasury yields, this is where we saw a lot of movement, too, in the cooler than expected cpi data ten-year low below 4.5, 4.492% the two-year below 4.9, 4.858. let's talk tesla earlier in the show, we spoke with longtime tesla investor,

kathy wood she spoke about the macro environment and her commitment to owning shares of the ev giant. >> listening to elon on the last conference call, he's very concerned about the economy, as we are we sold, as it was up 150% relative to everything else, we have not sold much since then, and it will -- it will, if we were right on this autonomous taxi opportunity, it will remain in the top five in our fund. >> joining us now for more on tesla, toni sacconaghi, great to have you with us >> good morning. >> you're basically the opposite of kathy wood. you've got an underperform rating, $150 price target. and i think that what was interesting when i read through your notes, you have all of these estimates, you think full-year '24 estimates on the street are too high. but it almost doesn't matter if you take a look at how tesla has reported and how they have missed estimates in terms of deliveries for a number of quarters, they've missed on some of the metrics for the quarters,

the stock is still up 80% this year so how do you look at this stock right now and say it's 150 when it's just, it's divorced a little bit from these estimates and the expectations on the street >> sure. good morning, melissa. yes, i mean, i think in the near-term, tesla's stock has been extremely difficult to call, as you note. i think earnings estimates for this year have gone from $6 to $3 and yet the stock is almost double from the beginning of the year, albeit still down considerably from, you know, last -- the september/october levels and so i think that's very challenging for investors, when numbers are generally coming down and the stock is holding in there or actually gaining ground i think a lot of it is because there's continued belief in the longer term vision of elon musk and tesla. i think you showed the clip of

kathy wood saying she really believes in autonomy others have espoused the fact that tesla will have dominant market share 10, 15 years from now, 10, 20 million cars and i think while that hope is still possible and is still alive, you know, it's difficult for the stock to go down i think the big question for me is, next year, do they have to cut their growth targets might they only grow at 10%? and i think it's certainly possible in '24 and '25, that tesla could have pretty modest unit growth, because they're not going to have new models and they're struggling to grow now without doing major price cuts >> i want to talk you about china, since that's supposed to be a major engine for the tesla story in the future. lee auto, a competitor there, has been gaining market share, granted it's only 4.5%, but that's up from 1.5% a year ago tesla has been losing a little bit of share

hsbc with its initiation last week, pointed out that the eu might be looking into probes and so that could impact -- i mean, it exports 40% of the cars made in shanghai right now how do you take a look at the china story and is there, you know, if it was worth "x" amount in its share price, you know, eight months ago or a year ago, what is it worth today is there a discount sorbeted with that? >> i think china's ev market is incredibly competitive it's, you know, one out of every three cars sold in china this year are evs there is an 800 pound gorilla, byd in china, who is growing much faster than tesla they just reported 25% automotive gross margins tesla is at 17 they only make ev-related cars and you know, there are others like li who are formidable competitors, as well so the chinese market, which is the largest car market in the

world, is the most competitive market it has the most models, the most competition, and tesla has its lowest share in any region its share in china is about 10%. its share of the ev market in the u.s. is about 70%. and i think over time, you know, markets will become more competitive. the european market will become more competitive, is becoming more competitive as the europeans have come out with pretty good evs and chinese are moving in. and over time, the u.s. market will become more competitive that's the challenge for tesla, is, it's playing in a hypercompetitive marketplace and it's really, really difficult for one player to have outsized share or profitability. and that's ultimately our concern about tesla longer term, is that it is really a car company, and the car industry makes it difficult for anyone to have outsized margins or share over the long-term >> toni, we've got to leave it there. it's great speaking with you,

toni sacconaghi, tesla shares are up 4% on the back of the pullback in ten-year yields. >> let's switch gears now and head out to san francisco ahead of tomorrow's highly anticipated meeting between president biden and the chinese president. eamon javers joins us now. eamon? >> good morning, andrew. we saw treasury secretary janet yellen yesterday treasury secre janet yellen wrapping up talks with her asian counterparts. she struck an optimistic tone with reporters after the sessions ended >> going forward, we hope to build on the foundation we've laid to further deepen communication, stabilize the relationship and make progress on key issues. there's hard work ahead of us, but i believe our engagements here have moved us along the right path >> that sets up the big meeting between biden and xi here on wednesday. these two leaders are hardly stringers to one another they've interacted a lot over the years, including before each man was president of his respective country

one diplomat joked that president xi has probably heard all president biden's jokes about growing up in scranton they had a meeting that was widely seen as success at the time but became a year of tension over the chinese spy balloon, flash floints in ukraine and gaza analysts say xi is taking some domestic political risk by taking this meeting and may be wary of appearing to be too close to wash. that's why the meeting was widely rumored but not confirmed throughout october as beijing hesitated before fully committing to the session. that delay and confirmation may also have been as both sides sought to hammer out agreed-upon outcomes before the meeting so both sides could be confident of coming away from the meeting with something that looks like a win. it will be carefully scripted, including who enters through which door and who speaks when

the fact that this is not a formal staet visit will lower the tensions in making sure the pomp and circumstance goes off without a hitch. it also means biden won't be able to reciprocate with a trip to china for a formal visit of his own in 2024. that's an election year where he might not want to appear to be too close to president xi. >> have you walked around? is it nice are the stories true you were having -- eating off the sidewalk out there it's so clean. >> they do seem to have spruced up the city ahead of the big meeting. i got in here last night, so it's been dark a lot of the time i've been here so far. >> you went clubbing immediately. >> exactly it's very early in the morning here right now a little hard to see anything out there. the rain has cleaned the streets and it looks like we're set for a big meeting. >> well, you know on its worst

day san francisco is a phenomenal place, beautiful city. >> yeah, it is gorgeous here. >> tough to mess that one up somehow some people say it has been thanks, eamon. >> up next, we'll get you ready for the trading day ahead. stay tuned, quk "sawbox" -- your "squawk box" will be right back. s move to the cloud. - so, the question is... - cyber attack! as cyber criminals expand their toolkit, we must expand as well. we need to rethink... next level moments, need the next level network. [speaker continues in the background] the network with 24/7 built-in security. chip? at&t business. [ "i'll be seeing you" by the five satins ]

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welcome back to "squawk box. we're about to end "squawk box." we're a little more than a half hour away from opening bell. joining us is chief investment officer at santos advisers let's talk first about the cpi data the dow is up 366 points if you missed the rally in the past week and a half, is it over is it gone what do you do now >> i don't think the rally is over i think there's certainly opportunity for market participation in the rally to broaden out looking at what's happening this morning in terms of the futures market, we're seeing small cap stocks, also the russell 2000 up almost 3% premarket. that in my mind suggests a

little bit of the cloud is lifting amongst some parts of the market, certainly not large-cap tech which as we know doesn't need access to capital and in many cases has a decent growth story behind it when we look at other places in the market to investment, there hasn't been a lot of participation. there's lots of room for the rally to broaden out. >> -- >> -- would it be a real genuine long-term rally or is this a, you missed the bus, you get that group of people who try to catch the bus, but the bus has kind of left the station and it's sort of the end of a mini rally, if you will >> well, i think if the economy hangs in there and we look to what's coming next year, we could have a more normalized earnings growth year which i think would be a welcome reprieve from the environment we've been in for the last

several years. that could be a positive thing certainly for the broader market i don't think this is it in terms of a rally that's being missed, because i certainly think there are opportunities particularly outside of large cap tech in areas of the market that haven't participated at all. >> would you buy a bond at this point? we were talking about how ron baron hasn't bought a bond his whole life >> for those who haven't, now is the time to consider adding bonds. certainly when we look at the potential in terms of return, if we have an environment where interest rates are starting to come down by midyear next year, that could be meaningful in terms of total return, not only from the yield, but total return as bond prices rally in that sort of environment. so we absolutely think there's opportunity in bonds, and if we have another year -- we could have another year where we get stocks and bonds moving in the same direction, but it would be

the right direction in terms of having positive return certainly after the last several years where bonds have delivered an absolutely terrible return, that we think that creates opportunity here and certainly in this environment we're in as well, there are increased geopolitical risks and if we did see some kind of disruption because of that, we think that bonds would absolutely be protected in that environment, particularly treasury bonds. >> if rates stay low or go lower, brenda, why not just invest in the magnificent 7? that seems like the trade you can extol the virtues of the other, more undervalued parts of the market that's where we see the lift when rates come down >> i think that will likely be the case through the end of the year i think as everybody is positioning portfolios heading into the year and window dressing, everybody wants exposure to those winners to show at the end of the year and

their portfolios i think when we look to what's likely to happen next year, we could see more of a broadening out. if we truly had a risk-off move in the market, i don't think those large cap tech companies will be as protected as treasury bonds. >> brenda, thank you very much what a day a lot happening. >> are you here tomorrow >> nikki haley >> make sure you join us tomorrow for that interview and so much more "squawk on the street" begins right now. good tuesday morning welcome to "squawk on the street." i'm carl quintanilla along with jim cramer annual ratings come in cool. ten-year back below 4.5. yields fall and futures are surging as ann