faring 59.37. how is the first day of the rest of your life here? >> fabulous. missed you, missed everybody here we are. beginning of the year, and otto va to everybody celebrating. >> okay. make sure you join us tomorrow "squawk on the street" is next. good tuesday morning welcome to "squawk on the street." i'm carl quintanilla at the new york stock exchange. jim cramer and david faber have the morning off. futures steady, the market reflects on friday's weaker than expected jobs number and goldman cutting g3 estimates see spending in "hard earned path. ten-year 137 a begin with delta risk for investors. goldman downgrading outlook second time in a month and

morgan stanley. >> plus a big bet buying $21 million of the cryptocurrency bitcoin as the country becomes first to accept it as legal tender. >> chips crunch. fearing global shortage to we are sift for some time. >> mentioned goldman note. talking q3 gdp 35. about a month ago, maybe six months ago saw 85. now 35 as delta in his words, taken a bigger notch out of consumer spending than they thought t. has, and the economic surprise numbers have been negative for a couple of weeks now. so you've had data falling short of forecasts steadily. atlanta fed, gdp now, realtime estimate of gdp actually got below 4% last week so i think this is a lot of the formal forecast kind of converging in this area. the other, thing about it, it makes a lot of sense to be concerned about this sort of

uneven phase of this recovery, but the market's been there for weeks. if not three months. because that's when the cyclical subpeak, relying on the big nasdaq stocks to carry things. while i think it's still a little slippery in terms of, you know, do earnings estimates really have much upside from here given this? get a stutter step in forecast, revisions? all good questions the market's not blindsided by this idea delta put on the brakes a little. >> worth noting goldman, changed gdp forecast includes raise outlook for next year and noted meantime that it's not just spending weakness because of delta also the fading fiscal support, inventories affected by supply chain disruptions as well and, of course, we know this week those enhanced unemployment benefits that have been tied to the last pandemic package, stimulus package, also sunset in states hadn't already been phased out

watching that coming into the next jobs report and part of the debate as well right? how much is delta and impact of delta on the economy right now and how much is the fact you do have labor shortages and some businesses can't open as much or serve as many people as much as they would like because they just can't find enough workers, at least right now, to fill those jobs it's worth considering that. i know peter boockvar pointed it out this morning's in part you see disney, record box office weekend for its latest marvel movie as well. people still seem to be going out even to movie theaters despite the delta concerns how much is delta fears? how much is the fact some folks are just not ready to get back into the job market? >> yes take stock who is in the ocffic on this day after labor day. and with us is strategists and great to you have with us and great to see you >> pleasure. >> good to be here. >> david, begin with you, because all of these different

cross-currents inflation. mentioned labor and chip short o shortages. peaking growth, delta, of course the jobs number. is your view for the fall markedly either pessimistic or optimistic >> i would say it's markedly higher, carl i'd say it's kind of steady as she goes with me, at least you know, i sort of stood back after q1 and really thought there was going to be a much slower job growth creation story line mainly coming from the fact i thought businesses would be able to get by with less workers. i mean, if you look at gdp, we've talked about this before on the show. we're actually at record highs in gdp so we're producing more than we have produced in q4 2019 with less workers than before the pandemic businesses have become more productive

figured out how to do this talked about the beginning of this as relates to the job market is that, yes, there's a bunch of high-profile guys calling for we need more cheap labor, but actually been able to earn a lot and make a lot, record amounts and record of stuff with less. i think that's an important, an important go-forward thaw, suggesting maybe we don't need a higher back as many of those people and this is going to be a slower process and let's about demand side and more about the supply side. that's my take. >> interesting that would have ramifications for corporate profits, ernesto, that and bond issuance, the saving grace in this environment. how much act as a salve for the markets? >> i think economic, i mean, earnings growth is key to this market going higher as well as a lot of support from the fed. i mean, the fed has proven to be the investors' best friend and now in a state of flux between

the labor market with the pace of tapering, with interest rate hikes with infrastructure bill a lot of uncertainties about what's going to happen at what speed that's going to happen but one thing constant is earnings growth. that's going to keep propelling the market, long as it stays there. the question is how much is in the price and arguably a lot of that is in the price already because markets are trading at high valuations, but there is really no alternative to quick t equities at this point less expensive in relative terms than bonds but still have to be exposed to the market and our take is the fact you want to be exposed to the market, but you don't want to overpay for stuff. we're buying quality, value stocks at this point meaning, companies with solid business models, solid operating earnings, and are trading at the discount to their peers. that's where we're focused on. >> david, you made a key point i want to dig into it a little

more now talk about record margins and companies able to do more with less in terms of workers i mean, how sustainable are these levels especially if you do see wages continuing to grow whether you look at jobs report, whether you look the blue chip companies, walmart latest example to continue to raise wages as well? >> morgan, i mean, we're going to learn a lot in the next few quarters as it relates to inflation, whether wage, house price inflation. going to be a fascinating time i think the take awei fay for mf you're a ceo, love to have cheap labor. love to hire guys at minimum wage or $10 an hour. hard to find them. can't get my stuff from china and other low wage areas love to have it, but loving to have it and getting it are two different things and i willing to pays $15 ors $20 for that low-wage?

the answer's probably "no. we have to be careful how we think about the growth implications of what's happening, and i don't see this wage story developing into something more since sister and pernicious i think it's more about disruptions in global supply chains and that will work it's way out slowly, and i think the sort of ugly truth under here from what i was saying is that businesses have become more productive and invested more in technology we have to retool and retool millions of people, i think, by the time this is over. because covid created an incentive for every business, every business, to go out and figure how to do more with less labor and less labor interaction. less of putting people together and hedging for the future if it happens again i don't want a business model all of my people have to come sgoo the office i want to disperse them and still make profit. >> actually sooneen a catch-up

the recent days. nikkei flash and towards value and quality, does that also imply a preference for non-u.s. stocks as well? >> well, in terms of preference, we have exposure to european and asian markets. we still favor the u.s. simply because there's more transparency here in terms of the growth, and you know the fed is solidly behind investors' backs. more talk in europe about earlier tapering than in the u.s. so i think you want to see more overweight the u.s., relative to europe definitely you still want to allocate towards europe and asia china's complicating the asia story to a certain degree, because of all of their, their restrictions and their central government dictates on technology and education and the property sector.

that could be the source of uncertainty for asia i would say overweight to u.s. and remain exposed to europe and less so to asia. >> interesting finally, david, we are going to get fed speak this week. although some argue the biggest news will be whether or not the president reappoints powell, and that could give the biggest movement thoughts on that >> i think it's a very tricky one. i think there's a lot of pressure to not -- not keep jay around from the political parties, and you've seen that coming from the further left reaches of the democratic party. so, yeah i think while there's mup more interest in the two vice chairs and the chair and the governor, for out of seven seats up by february, on the board of governors. that's big news, and i think this is going to be a difficult battle for jay i'm not in the camp he's got a lock on this at all. that said, i do think that what comes forward for us and who

comes forward for us will be a dovish fed jay powell has prove's quite dovish relative to peers and i don't think it's a huge hit. problem is as we go through confirmation, you get a lot of miscommunications, when new people come onboard. new chairs and vice chairs and could create nice volatility lurch to have that. >> a lot coming at us in the next coming weeks and months thanks for kicking us all this morning. appreciate it. >> good to see you. >> thank you. watch bitcoin, meantime, hitting highest level since mid-may over the weekend retreating a bit now, you can see there right around 50,928 is the level. and el salvador first to accept it as legal tender quite the experiment, gentlemen to see how this plays out. obviously critics and skeptics point to the incredible

volatility of bitcoin, the country is rolling out infrastructure, i believe offering equivalent of $30 worth of bitcoin to folks who download its country backed, government backed app to begin doing transactions in bitcoin as well, but keep in mind, el salvador is a country something like 70% of citizens don't have bank accounts so presumably, looking to target a much broader swath of the population for some of those financial services. >> yeah. i mean, the core real world case for bitcoin was always remittances, people who were under-banked, people in parts of the world aren't necessarily, don't have great faith in currency had these se sell the news moments for crypto the coinbased listing a peek into crypto and something we've anticipated and made a lot of fuss once had you the announcement see if it's as a sentiment, you know, indicator, maybe just a little bit of a culmination.

okay, we did it. see if it actually matters. >> and of course dealing with what technicians argue a challenge to get above the levels, low 50s. >> for sure. when we come back this morning, marvel with some good news smashing their labor day box office records with "shang-chi." and but disney facing challenges to get the movie approved for screening in china a live report from beijing in a moment. futures, we said, steady this morning upgrade to procter & gamble. new stam oref netflix as "squawk on the street" continues in a moment. hen ever ♪ and found solutions that kept them going. ♪ at u.s. bank, we can help you adapt and evolve your business, no matter what you're facing. because when you close the gap, a world of possibility opens. ♪ u.s. bank. we'll get there together.

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welcome back to xws. amc theaters announcing new labor day admissions revenue record, saying that this weekend this past weekend marked first time since beginning of covid attendance in 2021 actually exceeded 2019. shares of amc up 3% on this and, of course, guy, this comes as "shang-chi and the legend of the ten rings" from disney, latest marvel movie, also poised to break records for the highest grossing film for the labor day weekend. expected to make $90 million in the u.s. and canada according to industry estimates we say that with a big asterisk. historically labor day hasn't always been busiest for the box office. >> looking mid-50s in terms of box office came in 79.5 imax, best resident ever according to the company

13.6 million in large part because of marvel and "shang-chi." and talk in hollywood is, visibility to handle talent. negotiations now given the scarlett johansson lawsuit. >> yeah. that is kind of the stingi ing anecdote, suggesting botched that overture. box office year to date total still down 70% from 2019 i think this is an absolute hit. definitely outperformed. definitely shows the franchise is well intact it's what it means for theaters, that's a huge question. >> of course given the legalities of this release, only released in box office, unlike going back to what you said scarlett johansson's "black widow" and simultaneous streaming. >> see if this ends up for disney asmorgan says 45 days to get it on disney plus meantime, disney still facing screening issues overseas. eunice yoon is live in beijing.

>> reporter: content providers broadly having several issues in today's china including disney's "shang-chi." the movie has not yet been approved, and comes at a time beijing, already sensors movies here is very sensitive about the way chinese are portrayed in any, basically in movies or tv that includes, for example, a chinese villain. the source material for "shang-chi" is base on or seen at racist. the movie as well as the kocomis based on a fictional character a chinese evil mastermind, propagated a lot of what is seen as very negative stereotypes of asians also the movie coincides with beijing's cac down on entertainment and celebrities. over the weekend, a suspension of more than 20 accounts for fans of k-pop stars including bts. the state media later blamed

south korea for creating and kick-starting a celebrity fan culture, which they see as very excessive and negative for china's youth and an actor renounced canadian citizenship on state tv. this comes at a time when there have been rumors swirling around that if you are a star and you have a foreign nationality, then you could be blacklisted chloe, famous, of course, for directing "nomadland" is directing the next marvel movie called "eternals" and has been completely erased from the internet here because of remarks she made that were interpreted here as being critical of beijing. so likely very difficult for that movie to make it here either one thing i want to add to this is that, if this movie, "shang-chi," does not get

distributed in china, it will be the first in the marvel franchise not to stream here guys >> ah. that really puts context around it, eunice leading to my question china has become so crucial to u.s. filmmaking and box office releases in recent years if this were to not actually be released in china, i guess what could that mean for some relationships with u.s. media companies like disney? >> reporter: i think it's going to be really tough for a lot of folks at the top of the media game in the united states to really make decisions about what they want to do with china, because china is seen as such an important market for the film industry in fact, for the marvel franchise, the last two movies they have "avengers end game" spi spider-man's last iteration, smash hits here in china

one-fifth of ticket sales overall came from china. a lot of money to be made here, but if they want -- i mean, probably a calculation that from a lot of western executives, you know, do they want to play ball with the chinese because the chinese do have their own concerns and interests about the way they are portrayed overseas as well as here at home. >> eunice yoon thank you. taking another look at futures here with the major averages all poised to open about flat right now the u.s. ten year, 1.366%. oil and gold slipped don't talk much about aluminum, at a high. more "squawk on the street" when we return, and nine minutes to the opening bell.

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coming up, that long labor day weekend. hope you had a good one. futures starting a little in the red. bearish notes out of morgan stanley. and ppi friday and beige book somewhere in there and the opening bell in six minutes.

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is brought to you by, nuveen a leader in income, alternatives and responsible investing. keeping eye on china names this morning kmul lit action in china overnight not that bad as we got comments from the vis premier they will work to support the private sector the other hand, george soros sat with another piece in the "wall street journal" opinion page this one titled "blackrock's china blunder. he writes pouring billions into china now is a tragic mistake likely to lose money for blackrock's client and more important damage the national security interests of the u.s. and other democracies. soros consistently negative on

just about everything coming out of china right now >> yeah pap longtime critic of just the government, the way the society runs this comes out of his, yes, investment arm to this call where he doesn't believe it's a good place to invest, but also just through his open society's foundation feeling as if just the, the lack of political freedoms and things like that is the reason it's not a place to do business and operate on their terms, so to speak, like a blackrock china access to that market. >> real estate over the last couple of years and end of the ep edd got my attention most calls on congress to pass legislation empowering securities and exchange to limit flows of funds to china ought to enjoy bipartisan support, quote/unquote and a topic of xugs among lawmakers and seeing a, i don't want to use a word "crackdown" but seat the s.e.c.

move towards structure companies listing here in the u.s. and calling for more transparency and more information from chinese companies for fear of risks for u.s. investors as well certainly not done with the discussion, but george soros weighing in again. second time i believe, op-ed, in about a week. >> as far as didi goes, pushing back on reports state-backed entities looking to invest in the company. one bright spot out of china in addition to comments from the vice premier, export growths 26 year on year better than the 19 we looked for takeaway this morning, maybe the covid bottlenecks are not impacting exports as much as we feared certainly good news as ppg for example cuts guidance today because of continued shortages. >> yeah. a tricky spot to decide you want to become negative on china. just given the market's gotten so blasted seems it trying dealing with headlines out of chinese authorities about business

restrictions and market restrictions for a while you wonder what's in the market already. >> yeah. tight coming out of china and of course coming into the holiday season vietnam also, supply chain bottlenecks hearing about their, too. >> and not well suited to distribute for sure in vietnam there's the opening bell and cnbc realtime exchange on the big board. msa safety making products to protect workers and in hazardous conditions at the nasdaq bok bank speaking of financial services, m & a activity over at straight street buying investors services element of brown brothers harriman $3.5 billion in cash essentially accounting tech services custody. continue to own and appropriate private bank and investment management mike, ink tramental move in services. >> 100% purely a scale business basically about just the technology back off of state street back of new york northern trust to a degree

giants in the world and makes sense. brown brothers still a private partnership, doing it the old way and wasn't necessarily probably that was worth their incremental investment a good kind of roll-up-type move state street really outperformed the other two trust banks for a while. maybe more of an asset management, component, etfs that sort of stuff. >> and aggressive been on the forefront services and products cryptocurrencies and bitcoin concerned as well. worth keeping an eye on and noting ahead of our interview in the next hour with ceo of state street $1.8 trillion in u.s that is the mergers and acquisitions activity so far according to deal logic, in the first months of 2021 $3.61 globally highest that we've seen at this point of year since at least 1995 really speaks to the dealmaking environment in general right

now. certainly there's a name i've continued to keep an eye on. i know faber who's off and david as well, i used this term a couple weeks ago, the slow moving train that is the kansas city southern takeover we saw that board meet over the weekend, and the board of ksu did say that the canadian pacific offer which is the $27 billion offer that is lower than the canadian national $30 billion offer but we know that rail regulators basically said, canadian national cannot use a voting trust to take over kansas city southern, which has put that deal in jeopardy, allowing an entryway for canadian pacific to come back in and take over kansas city southern whew hope you're with me. ksu board said saturday canadian pacific offer could "reasonably be expected to lead to a superior offer versus the one

canadian national did make." worth noting and remindingers, got the green light to use that trust structure. that's in focus. see what happeneds because cp did basically say that they need an answer from kansas city southern by august 12th -- or september 12th so end of this week. and we'll continue to keep an eye out on this. i mean, there's a chance that canadian national could counter with a sweetened deal, but the risk is considered to be, analysts wrote notes over the last couple of days, very high for that deal to potentially go forward. so we will see how it plays out. whether there are -- fees involved with that process as well, and -- yeah. >> there will be plenty to go around. this is the kind of stuff where, you know, you kind of are earning your money for advice and tactics. it's an ongoing process here.

>> by the way, nasdaq all-time high, you can see. a lot is due to chinese names mentioning a few moments ago, up about 3% to 4% netflix also will help out almost at 600 at atlantic goes to a street high 780 target. their general thesis this morning, developed markets like the u.s., japan, brazil, that are going to matter most actually lift malt poor on 2023 earnings from 40 to 45 as we continue to try to navigate the streaming environment. >> yes this has been on, this sprint, you can see there, starting a couple weeks ago the stock has after really long period of just kind of boring people with sideways range a combination of kind of lapping some not so great quarters right? reset expectations for subgrowth. people look at the valuation and say, well, a lot of other growthy stocks have gotten that much richer. maybe netflix is not a relative basis as expensive

got the "seinfeld" stuff good for news flow, and just feels as if it's kind of a catch-up move in general the other thing i mentioned last week is, whatever threats that were coming from other streaming players, they've already launched, they're in the market. you kind of have a feeling for their run rate netflix buy stood that a sense of more pricing to go? all feeding in mostly a psychological catch judge move to make a little hay in return. >> financials helping out a bit on higher yields but industrials i think taking cue from the ppg guidance citing a number of different factors. increased disruptions in commodity supplies part shortages continuing logistics and transportation challenges, and raw material inflation trending higher than previously communicated ppg will take you back this morning all the way to april levels, although off the early session lows mike, i know you talked about

this argument that cyclical names have already indicated sort of the disruptions of delta, at least. >> they have just through underperformance, the fact it has mostly been the growth sectors leading today again. taking care of the indexes in august today, deere one of the biggest losers boeing, toolworks. a lot is heavy i think it's a plausible case we're in nor a staticy period in terms of growth, what the globe can deliver and what that means for nusmbers. i don't think it's fresh news necessarily in every respect of the market. >> it does talking about this quite some time that push/pull between reflation trade and i guess the more defensive growths or -- big tech growth trade that we've been seeing play out and continues to be prevailing, to your point it does sort of speak to, what's next in the midst of this economic recovery is it the idea of a low interest

rate environment pre-covid again? or is it going to ultimately be more of this reoperationreopera- reflation trade? you mentioned boeing under pressure one of the worst performers in the s&p and particularly in industrials and also weighing on the dow as well, and you've got ryan air, boeing's biggest customer outside of the u.s. saying it's going to walkway from talks with boeing over potential new order for that 737 max because of a pricing dispute. also you have headlines that the 787 deliveries may remain halted until end of october all of that weighing on that name, too. >> you mentioned treasury yield up, carl 137 on the ten year. that usually has been consistent with the cyclical stocks doing bet perp today you have banks improving. small caps outperforming part of the playbook the other thing people are noting is that this is a little bit of a get back to work trade for bonds, which is massive

amount of supply on the way this week both treasuries on the corporate calendar as well might be a little bit of an indigestion or pre-positioning ahead of all that meaning it's not really responding. treasuries are not really responding to near-term, freshest macro news. just a little more of a positioning move right now although they've been very stable and they've kind of been neither a threat to the growth stock valuations at this level nor necessarily said oh, we're panicking about a deep slowdown because going to new lows on yields. >> keep your eye on automakers no huge moves today, although we got ford and gm cutting production last couple of weeks. today it's bmw arguing the ongoing chip shortage in their view likely to weigh on the industry for another 6 to 12 months sort of ties into what we were saying a momenting a appg. funny. ppg market and then there's the peg market, as morgan stanley

reiterates outperform on procter & gamble names top pick general view scanner data in the last few weeks is not just a covid tailwind but an actual record market share last couple of quarters as that name is not around a lot today but certainly reflected some investments made in their brands. >> diaper prices through the roof. >> yes >> you know? one of those companies that talked about the fact yes, they've seen higher cost inputs and able to push it out in terms of higher pricing to consumers talking about staples like, use an example again, diapers. i mean, consumers will pay it. right? even if it means you have to cut your spending in other places on other services or goods, you'll pay for the staples. again, goes back to this whole sort of push/pull between reflation, more defensive aspects of the market. >> and in the call of p & g, you're going to pay for pampers. not the other guys not trading down. >> it's hard telling you.

i have found not shortages but hard sometimes to find the diaper you want in a timely manner right now. >> yeah. by the way, in this kind of -- >> sorry about this right now. >> real world data. >> timely. >> in the tape like this you might expect other defensives to work like health care. but -- but this morning morgan stanley cuts j&j, cut merck and amgen all to equal weight. all three notes read the same way. limited risk/reward awaiting strategic direction, limited news flow in terms of driving the shares higher. so you have merck and amgen, two worst performers right 0 now. >> a little contrast johnson & johnson has done bet perp don't know what will get the stocks moving, merck and amgen from these levels. health care a bright spot quietly. not big pharma specifically, the medical device names and services have helped out there

definitely defensive tone in that respect to the recent market going to mention a couple of other leaders in the morning, which were real, on the down side mastercard and visa. a lot of puzzlement last week. real underperformers bad news flow for them in terms of amazon suggesting others use -- what's that >> glad you're bringing this one up. >> amazon in australia suggesting people look for alternatives affirm news with amazon. while they use kind of the visa mastercard rails, seems as if they're getting nudged aside from their completely immunable position as a duopoly. quasi-duopoly and also expensive stocks and needed premium come out of it. today, anyway, suggesting some of that's getting rebuilt. people noticing their trading a little choeaper than one decisio never buy stocks. >> buy now, pay later.

spintech market. affirm news that stock shot up, what 50% last monday? to your point, did see those more traditional names like -- like visa and mastercard under pressure it did, talk about it a lot but the lines are blurring between the new tech companies and entrants upon the scene, and more, i guess, financial technology stalwarting like visa and mastercard got to wonder if there's were more m & a activity or dealmaking for those names no sbeez areas? >> a foray buy now pay later. >> not all worked out. >> exactly. >> so they're going to be active in that area, because spintech is consuming all the odds. >> down 180 on the dow didn't mention tesla 755 about a 4 1/2 month high despite the chip shortages we talked and to bob pisani.

>> good morning. happy tuesday. some concerns on friday qi the jobs reported stoked stagflation kearn concerns showing up in the sector banks up rates up goldman up, jpmorgan, rates highest since july tech holding in there. a cyclical slowdown moderation in the economy, growth can continue to do well. that's showing up there. energy's a poor performer but flat industrials weak boeing weak this morning some other industrials like honeywell and 3m an the weak side easy to identify what the risks are for the market postlabor day. three of them. first of course, a growth moderation due to covid, but so far moderation has been manageable the profit margin decline is a concern out there. we have record margins about 13% that concern here it's higher wage, material costs so far, exception of consumer companies, they have been passing prices along manageable as well earnings deceleration.

we know what's going on. new highs on earnings and keep going up of course, deceleration an issue. as of now, not happening earnings trends. stuff that matters, that has the biggest margins keep going up at this point we look at the q3 numbers here 29% today for q 3. july 1st 24% q 4, 21% july 17% numbers keep going up for overall market the treads go up, keeping the market holding up. the right stuff keeps going up i point out, what's accelerating in terms of estimates for the third and fourth quarter technology communications services. some materials, not all, health care and financials. that's an enormous part of the s&p 500. not everything consumer staples and industrials are not seeing any real acceleration in earnings at this

point and consumer discretionary and particularly retail, there's something we're actually seeing estimates starting to decline a little bit as a lot of enthusiasm about buying into retail sector as a baby due to concerns about covid pulling back overall, large parts of the overall s&p 500 are continuing to see acceleration in earnings. you can see this in what actually is going on if you just look at the price action, you can see so far this quarter, two months out of the three gone health care and technology these are the growth sectors that are continuing to see the biggest move up. so growth is doing better than ci cyclicals. industrials and energy makes sense in a mid-cycle recovery continue to do well. still have reliable growth stocks that do better but k cyclicals and energy toned falter almost a textbook mid-cycle recovery

the important thing now is keeping an eye on those earning situations and right now no deceleration carl, back to you. >> bob, thanks bob pisani. dow down 213 to start this tuesday morning. by the way, keep your eye on the bond market and see how treasuries fare this morning talk about the ten-year right around 137 that's about highest since august 26th. as we do have a bunch of speakers on deck for the week. williams, kaplan, evans, mester, watching for news, of course, about a potential reappointment for jay powell we'll be right back. (vo) this is more than glass and steel... and stone. it's awe. beauty. the measure of progress. it's where people meet people. where cultures and bonds are made between us. where we create things together. open each other's minds. raise each other's ambitions.

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a new samsung phone or upgrade your existing phone. learn more at your local xfinity store today. welcome back to "squawk on the street." the journal reporting they're forecast to handle the most container than any other on record, dating back to 2002. joining us now for the impact is

analyst. in terms of what we're seeing with freight and cargo flows, how are you assessing that >> you know, for any business that depends on a strong q4, the plarning process begins early in the year there are so many unknowns in the global economy and recently we've seen supply constranlts. rates have gone up a lot but there's a sthortage of containers it's proving to be a big challenge. there's just four months left in the year with stock needing to be in ware house shelves >> as a consumer, there have

been more than i can count on two hands, shipments, purchases i have made on the platform that have been delayed. if i'm experiencing it that often, i would imagine others are too. so, how is this factoring in to your take on the stock and other ecommerce players as well >> it's potentially a big deal as we head towards the holidays. for amazon, specifically, they have a lot of their own oceans freight capacity, and they can source inventory from the a lot of different third-party merchants. we're less concerned for amazon than other companies more dependent on the traditional shipping providers or manufacturers for a product. in terms of other stocks a platform like e bay should do reasonably well.

they can diversify where a source product shows up on their marketplace. we also like paypal. they fund payments, transaction values should be higher without as much discounting as we've seen in prior years. those are a couple of alternatives for the ecommerce >> in terms of amazon's potential for actually making a stand-alone business out of the logistics as a service, the analogy to aws, something that amazon created for its own needs and then can accommodate a seller of those services but is it not a less scaleable business or one that does not necessarily for those network effects that aws does? i'm wonder figure you want to see this kind of capitol intensive in the growth area >> it's a great question

it's certainly valid but does require a lot of investment and infrastructure and they've already started this in the uk. and we're seeing this unfold real time. receiving fees from other parties for delivery, transportation, that helps subsidize amazon's own cost in delivering products same day, next day or within an hour we think when this does scale, it will help them from a profitability standpoint >> all right thanks for joining us. >> thank you >> after the break, we'll talk to state street ceo on their new multibillion dollar deal

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good tuesday morning .

welcome to another hour of "squawk on the street. we're live at the new york stock exchange once again, for i think several years now, the day after labor day has not been kind to equities we're weighing a bunch of worries for the fall, a couple of bearish and morgan stanley. >> we're 30 minutes into the trading session. so, here are the three big movers we're watching right now. match getting a move as they're moving to the s&p 500. cyber security company, ironnet also surging, as some call the so-called next quote/unquote meme stook and finally, spotify's heading higher as well, on the back of an upgrade with key bank that says monthly active users are quote, back on track those shares are also up 4%. and those two themes, the kind of caution going into the

post labor day period, because people are worried about a choppy period for the recovery, maybe we have payback for year-to-date gain and the s&p 500 coexisting with some of the fringe, wild crazier stuff going on in the market we have a meme stock of the day. nfts people couldn't stop talking about how much they were paying for the crypto and journal over the weekend saying people are hunting for unrated junk debt to create extra yield people in the core of the markets feeling like we probably have a slowdown and we have been pricing that in over the last few months at the same time, we don't know if it's safe or how to ignore or incorporate this speculative adrenalin through other parts of the market i agree it's not impacting the center pieces.

it seems to me those are trading on good old free trash yeeltds, as opposed to some wild story or short squeeze thesis i think that's where we are as we head into the quasi-fall at this point and street sentiment, i think, is one thing that's fascinating. the immediate target on the s&p for the owned of the year is 400. to me, that doesn't say people have had their eyes to big in terms of potential returns i wonder if that limits any blowback we get in magnitude or duration because it hasn't necessarily been this overshoot on this side of the board. >> even the more constructive notes of the morning, barkley is one example. they don't believe the taper is going to bring about a significant sell off they increase their year-end target to 4600

which is essentially where we're at >> and it's tough. if you do the strategy work for a living, we're going to get deceleration, what's the advantage of me going out there with a 5200 upside target? and i think it's plausible we have a little bit of a giveback phase. but that doesn't mean you get it and of course, question marks around, not only infrastructure bill but a more social focussed package that they're returning to begin more earnestly now too. how large that ultimately will be and what that means in terms of ramifications to pay for it, etc. we should get more details around that in the coming weeks too. just speaking to not only fed and monetary stimulus and when you see the fed begin to taper

and largely seen as off the table, given the weaker than expected jobs report >> september could be a policy mindfield. we'll see how that goes. meanwhile, get to state street and $3.5 billion in cash it is set to be completed by year end 2021. here to discuss the deal is state street's chairman, ron ohanley. great to see it you. glad to get your take on this transaction. we were talk ing earlier, these investor services you're in, it's truly about scale what is it about brown brothers devisions that makes it a fit here >> grirtsds to see you and these are technology-driven businesses it's about scale, the amount of technology that has to be

brought to bear increases every year what brown brothers brings us is a couple of things first a set of technology assets that are quite adequate for our own and will help propel our own platform deinvestments second, it's in very attractive geographies. in some cases they overlap and in some cases they have a stronger position than we do one example is in latin america, which are high growth luke rutv markets. 3rdly, a talent base very, very good people so, that coupled with the fact that there's a consolidation element for this, it's very attractive to our shareholders so, we're very pleased about this >> i'm sure the logic is very well understood. and shares down 2% is there a sense that there was a rich price that you did pay for the other side of the brown

brothers business? >> i don't know if it's about price. acquisitions are always a surprise to investors. so, i think there's a time that investors need to digest it. but once they understand what's happening in terms of there's consolidation opportunity but also an ability to really advance our strategy and help, in effect, help us be the leading player in the markets. we will, after this, be the number one ranked custodian. >> a lot of investors assume your fortunes are going to be based, in part, on interest rates being higher, a beneficiary of fed tightening. asset values and such. but what is your take in terms of what matters most in the near term, as a driver of your business, besides the kind of steady-as-she-goes consistency of the fee business?

>> we serve investors in all forms, whether investing directly or through funds. so, this business has a lot of terrific fundamentals behind it. asset values continue to grow, investment markets continue to grow as long as you believe the conomy to grow, typically assets grow and yes, as you noted, interest rates are an interesting upside option to this we're at an all-time low on interest rates so, it is at a historic low as interest rates increase. that will increase also. so, we're not dependent on it and we've done fine without it if you believe interest rates over time will increase, that's another benefit. >> it's morgan to shift gears a little bit, i think it speaks to the broader

strategy you're speaking to as well state street has been on the forefront in terms of adoption and products and services, as far as bitcoin is concerned as well can you speak to that and the opportunity you see there. >> well, morgan, as you articulated, there is a digital revolution going on in financial services you're going to start to see it insecurities, whether it's deployment of block chain to help accelerate settlement periods. there's enormous amounts of technology in the business our technique has been to build our own and partner with players to help us get a technological edge and make it attractive to our clients where, they're getting the best in an open architecture way we've seen rapid deployment, we

believe yowl rr see rapid deployment in terms of the technology tools and regulators starting to think about is there a way we can decrease settlement period, create more stability in the financial system create fundamentals behind the business and we'll reward those that are technological leaders >> one other area you've been a tip of a sphere has been your commitment to the hybrid work model. you're closing two of your offices in midtown manhattan i wonder if there was the urban core you didn't like at the moment >> as we're seeing through the covid and post-covid period, there's a change of how we think about work we, like many others, are deploying a hybrid model a large number are returning to us next week but what we found is that we --

using the example there of greater new york, we had several different locations in new york, as well as outside in new jersey and connecticut. and the preference of people was actually to be part of those offices outside and have, in effect, touched on space in new york so, again, i think you'll find that people are much more meaningful about why they come to the ufls, when they come to the office it will be about collaboration, innovation but with the tools we're able to give them, they can be productive when working remotely >> ron, good to catch up with you on this morning. appreciate it. >> thanks very much. as we head to a quick break, here's a look at our road map for the next hour. bitcoin, hitting the highest level since may, as el salvador becomes the first country to adopt the crypto as official currency we'll talk about that.

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bitcoin hitting the highest level since may, ahead of el salvador's official adoption of crypto currency. it makes the first to officially make bitcoin on the balance sheet and hold it in reserves. here to hold down the test case, essentially, is mckinsey i know you've been doing a lot of reporting around this but the fact we did see bitcoin jump ahead because of this and this has, in many ways, been the bull case, longer term around bitcoin, the fact that you could use it to transact for every-day items, right >> reporter: and i think that's one of the major things people are looking for on the ground in el salvador. they can technically use bitcoin to buy virtually everything. we mean coffee a haircut, and taxes in bitcoin

bitcoin's prices touching highs it hadn't seen since may and the government announced it's adding bitcoin to the balance sheet frrbls and yes, it has come off of the highs but we're starting to see that. from midnight, i was on the phone with people on the ground in el salvador and they were actively downloading the wallet being offered to all citizens. it's been interesting to see it happen in real time. >> i realize we're only hours from the rollout do we know how those downloads are going right now? and i ask that, given the fact that only about a third use the internet >> right and you know, that stat has been called into question because it's referring more to these fiber-optics but almost everybody has a cell phone in hand and that the level

of conicatnectivity you need toe parted of bitcoin. was this a flip of the switch at midnight no, it wasn't. but people were act ively communicating with each other. and around 2:00 a.m., that's when we first saw the wallet go live er for it's something called the chivo wallet, which is el salvador slang for "cool." they're pushing the country to be part of the economy and they're saying everyone who signs up for the wallet gets $30. and that's no small sum in a country where the average minimum wage is $365 we have seen successful down loads, peep receiving the $30 in their wallet >> from people who are intently watching this from the, kind of bitcoin camp, let's say, and

people who really believe in it, what would represent success, in terms of volume of transactions or the adoption or displacement of other types of payments what are benchmark indicators? >> you said a few of them there. mainstream and going beyond a reasonable doubt using bitcoin as a currency, as a form of exchanging value people see it as a way to help el salvadorians save money and it's a largely unbanked population so, this gives a way to build a culture round saving money i thin that's something bitcoin insiders have spoken to me about, that they're excited about moving people from the government wallet, which is custodial, to their own wallet where, they have 100% ownership over their wealth and that's something a lot of these people

havant experienced before and i think that's what they're most excited about. >> el salvador has been looked at as a test case for a while. are people talking about which country might be next? >> you know, panama was watching but i think a lot of countries are keeping an eye on what happens in el salvador not everybody is happy the world bank has expressed concerned about what this means. there are a lot of big supporters but you have a large portion of the population that is confused about what it means. they're inherently skeptical there's quite a few barriers to entry. it will be very telling how this plays out, as we get a better sense of what mainstream adoption really looks like >> when we talk about bitcoin, we talk about volatility i suspect we're going to discuss this more in the coming days so, thanks for joining us this

morning. >> thank you >> a quantum encryption company following the spak merger headed higher we'll find out more when the ceo and chairman join us next.

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time for our et, if spot lielt. they got a slew of new headlines over the weekend down since january, getting a little bit back today. billionaire weighed in with a new oped calling blackrocks's investment in china a huge mistake. didi's shares tanked just last week on news of the potential crackdown. we'll check out shares of cyber security firm, ironnet, surging more than 50% and this after a 23% gain, about 48% right now.

a 23% gain on friday the stock has been a subject of a number of discussions on reddid and i spoke with general keith alexander after the spak merger and public market debut and asked if the company had enough cash >> we raised 137 million from a guy from the army, this is a lot and that givlgs us for the next 18-plus months we need raise it with less solution i think that's a good thing. know some of the companies regretted not coming in, especially when the stock rose i think that's an art fact of the amount of float. we have a tremendous opportunity in the future of cyber security. i'm a huge optimist in the area. i know there's a lot of work

i won't kid you. we have a lot of work to do as a company. >> so, that was ironnet, sticking with the cyber space overall, quantum technology company opening for the first trade, following the completion of its own spak merger arqit shares are up about 4.5% right now. great to have you on this morning. congrats on going public here. i guess to break this down, when we talk about the technology that your company offers, it's the intersection, essentially of quantum computing, cyber security, and space, right >> that's right. good morning arqit's invented new technology, called quantum encryption. we found a way to make keys that can be deposited on to any device and those keys are unbreakable and it's not possible to steal them

we do that by combining quantum delivery of information from satellites and data centers and a little bit of software on your device, which borrows the information and uses it as an increediant in the creation of these new kies and another 1.1 billion in the price line it looks like one of your partners, richard bransen's other space company getting ready to go public, is going to launch satellites as well. what does the growth of your portfolio and the services you have to offer look like, not only in the coming months, but years? >> the product of arqit is very simple a 200-line code that sits on your device. the way we make keys at the moment, involves turest real

investment and that product is live today when we launch our satellites with virgin, they basically upgrade the network. they add an extra piece of security, as a result of the quantum piece of information it's technology gets upgraded in two years time and it's a fundamental throughout the models we're soling it in scale and the great benefit of coming to the nasdaq market is we have comfortably more money than we need to execute our plan so, we don't need to raise anymore money ever we have twice the money we need to take this business to scale and because the global

addressable market is basically every device in the world, we're pretty convinced this can be britain's biggest ever tech scale up >> you just touched on it with the money you raised redemptions was high, which is a trend we're seeing from a number of companies and ironnet being one of those as well i think it's 87% so, 37.1 million or 34.5 million shares were redeemed investors decided to cash out, instead of bank roll the deal. can you speak a little bit more to the fact and you mentioned you already have enough cash to move forward with your plans but the details around the deal and why we saw redundant levels? >> you mentioned ironnet it's a great company and they had higher redemptions than us

in the '90s. er for it's great to see their shares up about 50%, i think so, that's a sentiment we'll akbree with. and the market's going up and stay in, the market's going down, they get out so, they were poor companies that had higher redemptions than us in the last two weeks what's important us to us is we have a strong sponsor group and as a result, we were able to bank twice the money we need fully fund our business. i think we're now -- we no longer have any arb traugs on the register the free float is quite small and we only have investors that are focussed on the growth prospects in the next year or two. given that we're forecasting revenues growing to about 660 million dollars in the next five years. i think the company has a good strong run ahead of it so, we've got a great register

one of the interesting things about a spak is your sponsor group gets to see very, very deep diligence so, our investors have seen all the facts about technology and customer contracts so, they're very strong support of the deal was welcome. we have a great register, twice the kagsz and a wonderful growing list of customers. so, it feels like we're in a great place. >> all right david williams thank you for joining us interesting to see how it plays out, especially when you talk about block chain too. appreciate you coming on >> thank you, bye. >> shares of humania

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welcome back as athena continues in the northeast, president biden is heading to new york and new jersey to see some of the damage caused by the remnants of hurricane ida. and nbc news reports biden will talk about a strategy and delta variant. the cases have been slowing recently but we'll watch and see if travel and events over the labor day weekend reverse that trend. and boris johnson says higher taxes are needed to pay for health care and social services, including an increase from income from stock dividends. that does break a conservative party promise.

>> no conservative government ever wants to raise taxes and i'll be honest yes, i accept that it break as manifesto commitment, which is not something i do lightly but a global pandemic was in no one's manifesto, mr. speaker >> you're now up to date carl, i'll send it back to you >> rahel solomon and the dow is taking us to about a one-week low this morning. here are top picks and tony, great to have you with us. great to see you >> great to see you. >> i wonder if some of the rotation is making your screens more interesting are you sensing more opportunity? >> where we're sensing more opportunity is there's not a rhythm or rhyme. the names are really all over the map, including the ones we're going to talk about today.

>> let's start with some of them could you argue they're mostly on the defensive side? i'll start with humana >> it's really about how big is the discounted value do you trust the management team and humana ecchecks all those boxes. >> in wu what sense. >> what we like is it's almost a pure play in meds care advantage. and it's taking share in the overall medicare market. and it's doing that because it's a win, win, win. it's a win for consumers because seniors save 1500 to $2,000 a year in out-of-pocket expenses in medicare vad vantage, verses medicare and seniors are happy, which is an important constituency and a win for society because the medical outcomes are better in

medicare advantage than overall medicare and that's why it's gone from 25% of the market to over 30 today and we see it going up to 70 in the next decade or twenty-two and yet, trades at a 20/25% discount on earnings and we find that intershing. >> five serve is the next one. you can see the lack of appreciation, especially in the last several days. >> yeah, it's interesting the payment space, there's a lot of newness in companies going on in that area. if you're not a unicorn, you're a dinosaur there's room for the truth to be in the middle. this management team has made interest nothing vestments in new areas in payments that are paying off for the company and it's growing in the high single digits, and they have assets in clover and the small business

merchant acquiring business that's 20% larger than square. square has a larger market cap and in the e commerce space with carat, about the same side as odiom in the netherlands and yet they have $14 billion of other revenues growing and very profitable and yet, odiom has a bigger market cap than pfizer and they're going to retire something like 30s to 40% of the shares, which is great source of return before any of the multiple upsides >> you know, tony, when are it comes to fiserv, at what point do you say the market is telling us these guys are disadvantaged or they're the odd man out because there is so much enthusiasm towards the pure play growth payment names and it's

not participating? >> you know, we look at the fundsmentals and they don't lie. the fundamentals are very, very strong and they're strong because they have -- it's not like -- it's not a pure play new payments company, but there are pieces providing overall growth for the company so that it can maintain its relevance going forward. we think that's really important. there is going to be change and it's up to the management team to maintain relevance of the business and they're great examples of them doing that. >> tony, let's talk about the bet you're making where consumers are concerned and that's dr. pepper as well. >> yeah, so thankful business is the single serve pod coffee business we kbloe and love and half is the dr. pepper business we all, hopefully, know and love i know i like dr. pepper on the single-serve coffee side,

i think there's a miss understanding. they reset contracts to drievl penetration, which was the right move and we've been seeing the growth acceleration in units and overall adoption but we haven't seen the price increases and now we're starting to see the price move through the pipeline and the growth rate accelerated keurig and part is the feckniccal concern on the over hang it was taken public through a merger with dr. pepper and the legacy keurig shareholders are -- have a big position and they're widdling that back >> i'm not noticing a whole lot different, in terms of overall holdings you still seem to love banks and mega cap tech. >> it's an interesting conundrum where we find value in the tech companies and finance companies.

if you peel back the onion on the tech companies, we're paying far below average multiples for a good core business, when you strip out all the spending they're doing and the cash on the balance sheet and that can be a value stock as much as a traditional bank, like city group can be a value stock and we're comfortable in both realms >> really good stuff and actionable tips for our viewers. appreciate it as always. good to see you again. >> thank you >> with all eyes on disney's movie, a check on who's winning the streaming wars up next don't miss a special edition of "fast money" at 6:00 p.m. eastern with a look at opportunities for investors as we get back to busins.es stay with us

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check out shares of netflix trading at an all-time high, as the studios continue to adjust streaming strategies disney is dominating the box office, at looegs with this weekend w the theater-only release of "shang-chi. let's start with disney this morning because i wonder given the strength of the box office we heard from amc and imax do we have to start reconsidering the length of the window yet again >> this is a big decision as i look towards the next marvel release, which is "eterges." released later this year and i

thik the industry is looking closely at the experience of the last four days obviously, "this movie did well over the weekend there's a lot of question whether the the atrical only or hybrid model is the best way to go >> is this a precedent-setting move now do you think all are more films with a 45-day window prior to this weekend >> my gut says yes as i said this was a real out performer this last four days. and the pushback from the talent has to be considered, as well as from the theaters. you have to remember disney ceo and disney is motivated to work closely with both talent and the theater exhibits he wants them to see success as well if they're successful, he'll be successful and they're both motivated to

have that 45-day window in place. >> i get all that, simon but let's dig in more, from the talent side of things. right now you have a streaming debut on disney. the company gets to take in all the profit associate would that, verses having to share in the revenue of a box office opening initially. aren't there new or creative ways you could, as a disney or another one of these companies perhaps get them on board? >> absolutely. and everyone needs to be mindful that the legal challenge that gallagher has with disney, that was negotiated ten years ago and included multiple films and did ncht anticipate where we would be in the landscape. certainly all the new agreements give them that flexibility to have the streaming simultaneous. but i wonder if they start to

look at this and question whether or not $30 is a too light as a price point i wonder if there's a justification to step up that price point? certainly they get to keep a much larger slice of the pie when it's streaming revenue, verses the atrical revenue and i think there's a premium association that came from being a the atrical only release and that follows the film downstream through the following windows. >> when it comes to netflix, it's come along with news and a few dozen feature-type releases that the company's going to have lat urrer part of this year, as well as getting seinfeld do those things, you think, really move new subscribers, reduce turn or is it around the atmosphere, the incumbent streaming and they're going to

continue to fill the pipeline for the folks they already have? >> i absolutely think they continue to pour fuel on the fire and you only have to look at the "seinfeld" deal and be mind nofl fact that is a world wide deal previously hulu held the streaming only rights for "seinfeld. the marquee series they lost, "friends" and "the office. they didn't have worldwide streaming rights like the they did for "seinfeld. what that emphasizes is that netflix is very mindful of securing content and skurg in every market they're in around the world and delivering the best u.s. content on a global basis. >> i am curious to know a little bit more about how you view some of the classic sitcoms as intellectual property. your general point is streaming

audiences tend to like first-run stuff, original stuff but in between that, some of the older shares fill a white space. >> when you just recognize a certain talent or series and you've had a positive experience in the past, it's an easy decision you don't surf from decision fatigue in a way that a lot of us do -- the default is always what's new and fresh what's top ten in the country or around the world or what else did i enjoy and obviously "seinfeld" has the deepest fan base of any television show in history >> indeed. >> i watched "seinfeld" after an episode of "ovark" to wind down before bed >> like a nice cognac.

simon, thank you good stuff simon gallagher. meanwhile, apple's facing a way of activism, with two complaints against the company. we're going to hear from one of the employees out abwhy she filed on tech check. the best price on every trade, which saved investors over $1.5 billion last year. that's decision tech. only from fidelity. t-mobile is the leader in 5g. we also believe in putting people first by treating them right. so we upped the benefits without upping the price. with magenta max, get our best plan for 5g. with unlimited premium data that can't slow down based on how much smartphone data you use. and taxes and fees are included! you won't get that from anyone else. right now, pay zero costs to switch! and bring your phone we'll pay it off! only at t-mobile. the leader in 5g.

welcome back to "squawk on the street." the nasdaq is higher today but the dow and the s&p are lower to start the new trading week off a holiday shortened one. consumer discretionary sector is the single best performing secretary they are morning the industrials and real estate have been the laggards so far in trading. both down 1.5% or so some of the real estate investment trusts are leading that lower including gudr and equity residential, down more than 22% iron mountain as well weighing on the sector. keep an eye on those particular real estate stocks, especially ones that you see tied to the interest rate market a eyren the rise "squawk on the street" is back after this break

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♪ payday, payday♪ ♪ ♪ monday, payday♪ ♪ tuesday, payday♪ ♪ wednesday, payday♪ ♪ thursday, payday♪ ♪ friday, payday♪ ♪ saturday, payday♪ ♪ sunday, payday♪ ♪ ♪ payday, payday♪ ♪ ♪payday♪ with a multitrillion dollar spending plan on the way, are taxes headed higher? robert frank has the details for us hi, robert >> good morning, mike. democrats in congress floating new potential tax hikes

including a tax on corporate buybacks, a tax on ceo excess pay and a special billionaires tax. that is on top of the more than 80 tax hikes and other changes that president biden has proposed if you look at the dollar impact, if you boil this down it what really matters for investors and companies, there are really three that matter the most biggest is the corporate tax hike that, of course, biden proposing to raise from 21 to 28%. that would raise over a trillion dollars in revenue, over next decade, that's according to pen wharton. most tax experts expect that to be trimmed to maybe 25%. but a 25% rate would raise only about $600 billion, about 40% less than that biden rate. taxes on overseas corporate profits also raised about $500 billion. the tax foundation saying the biden proposal could in fact lead to more offshoring, so revenue could wind up being a

lot less for investors and high earners, the most important tax is the capital gains tax biden proposing to raise that to the ordinary income rate, taking it from 23.8% to 43.4%. biden also wants to eliminate the so-called step up in basis, tax appreciated assets at death. those two changes combined would raise an estimated $322 billion. now we see moderate democrats and those in farm states already pushing against that so, guys, bottom line, either this $3.5 trillion has to shrink or democrats have to come up with other tax hikes that they can all agree on and all of this has to happen or likely has to happen in the next few weeks. guys >> the clock is ticking, robert. i mean, do we have any analysis yet on what some of these proposed tax hikes could mean to the other piece of the revenue pie, which is economic growth?

>> so, if you look at the corporate tax hike, they're saying that could shave somewhere like half a percent off gdp. if you look at the market, that corporate tax hike, even at 25%, would reduce the earnings outlook for next year by 5%. so that effectively wipes out the profit growth for next year. and that's why many are wondering whether the market has truly baked this in or whether they just are sure it is not going to happen. >> right or just feel as if, robert, that only -- the only thing that can happen is what the most moderate democrat is willing to accept, right, in terms of tax hikes so maybe that's the calculus, just exactly what that group that wants revenue to offset some of the spending, but on the other hand might be resistant to some of these particular tax increases? >> that's right. again, even if you look at the most important and the biggest revenue raises which is that

corporate tax hike, let's say the moderates win and you get 25%, if you look at the tough tech and healthcare sectors, that would reduce their earnings outlook by 7% for next year. so i think even if you're betting on the moderates winning, there is still some to be baked in the market if we look back to the trump tax hikes or cuts in 2016, the market didn't really bake those in until 4 to 5 weeks before they actually became law so maybe the market just likes to wait and see what's certain before they make a bet >> all right, robert frank, thank you. >> a quick check on the markets here, mike before we wrap up this hour. it is a mixed picture. you have the nasdaq and the nasdaq 100 are in the green, fractionally, but the s&p, the dow, also the russell 2000, small caps and transports are all under pressure, not surprising given what we have seen duringing this time of year, in years past. >> very much true.

names on the decline in the s&p, where as the winners are the ones that don't require a lot of help from the economy, netflix, caesars, big story on sports betting, and tesla leading the way. it seems as if it is a slow growth feel in the internals of the market to start things off this week. >> industrials, the worst performing sector in the s&p we're going to see each other later today on closing bell as well we'll book end it. that's going to do it for "squawk on the street. "techcheck" starts now good tuesday morning welcome to "techcheck. coming up on the show today, nasdaq gets another new intraday high we're going to break down the divergence between caution and crazy. a software stepback, why the