good morning welcome to "squawk box" here on cnbc i'm becky quick along with joe kernen and andrew ross sorkin. joe mentioned the equity futures. there are slight gains for the dow and s&p. breaking the five-day losing streak yesterday with the gains. nasdaq was down for the fourth day in a row futures are indicated weaker nasdaq futures off 4 points. dow up 14. s&p up close to 3. if you look at the treasury market treasury yields at 1.39%. and there is august consumer

price index report today it is expected to rise by .4% producer prices showed a gain of .6% in the headline number. if you look year over year, it was up 3.4% r. that is significant. a lot of reasons we are watching and what is happening with oil prices which have been higher. wti up another .50%. this is happening as nicholas made landfall as a turn on the texas coast before downgraded to a tropical storm an andrew. a lot of attention on apple today. the company holding the iphone launch event this afternoon. virt virtually. it is expected to update iphones. you look at the share of the giant right now. it has been on quite a ride.

we will talk about it more later this hour. the bigger question, joseph, is whether you updated your iphone overnight. >> because of the shocker? i think i'm okay we'll see. can you do it? >> high value target you don't think the exploits >> i don't think i am. i don't think that many people -- my q rater is not as high as yours. you are not invited. how do you get invited too many people. >> my dress said tax the rich, too. >> not surprising. >> i'm not going to talk about her. that's all republicans like to do is talk about her she is the real celebrity

politician there are no laws or anything. she is a celebrity politician. it is amazing. >> she has figured out how to work us, the media, just as well as the former president. how about that >> i know she knew that the tone would not be taken as a great thing to go to a $30,000. >> that's why she did it she did it to be a billboard we have to show the picture later. >> andrew doesn't understand the irony. >> i understand the irony. the irony is the brilliance of the marketing. i disagree with the message. >> what do you mean? >> because i don't love the idea of taxing -- >> abigail on? >> taxing the rich for the sake of taxing the rich. >> you are not on their side

>> there are two messages. how much money does the country need the other message is a different message which is if you are wealthy, you are terrible and we want to tax you. >> if you are wealthy and able to spend $30,000 to $50,000 on a ticket >> celebrity politician. does she go to washington and try to pass laws i don't know news on apple. install a new security update amid a security breach concern research group is warning that an israeli spyware company developed a way to takeover any apple phone, computer or watch a glitch in the software takes control of the device by sending a message through the imessage app and hacking through the flaw that the company processes i images the company has been exploiting the vulnerability since

february. cathie woods on bitcoin. i sat dawnown with her at the s.a.l.t. conference last night here is what she told me about bitcoin. >> we believe the price will would be tenfold of where it is today. instead of $45,000, over $500,000 confidence in ethereum has gone up as we have seen the beginning of the transition. we would still do 60% bitcoin and 40% ethereum >> we will have more from cathie wood later this hour there it is. ten times. $45,000 right now? ten times? >> people say 1 million, right >> that's the number >> i have seen $1 million. >> there are people who believe it i should say, by the way, this is the five-year outlook >> her point with that is the

basis because you will have so many companies using it and adapting it. >> her process is a lot of companies will put it on their balance sheet and others use it. countries will use it. that's what will generate the demand to get the price ten times. >> $21 million. the head of the litecoin foundation says the group screwed up when an employee retweeted the announcement about walmart. announcing walmart would accept litecoin as a form of payment online that led to the spike of 30% of litecoin walmart said the press release was fake and looking how it was issued litecoin was jumping this would be something where the s.e.c. could figure out who profited and tried to trace this back >> except we haven't decided

that a crypto is a skrecurity. this is what is wrong about this wild west that is happening right now sdpl >> it is an argument >> who is the agency that is supposed to regulate that? if it is not a security? >> it has to be. >> is it the cltc? >> what is litecoin? >> a block chain >> it's like bitcoin >> a bitcoin element to it >> like i said, i know a little bit about bitcoin. any of the other stuff there's no rationale for dogecoin is there a rationale for litecoin >> i imagine there is. dogecoin was to tell a joke. >> in the nft world, that's all you need a couple of stocks to watch. oracle fell short of analyst

expectation. it was hurt by the growing competition in the cloud earnings beat estimates and intuit is buying mailchimp last year, the maker of turbo tax abought mailchimp half of the revenue coming from outside of the united states i tried to figure out what mailchimp is have you heard of it >> yes i have been dealing with mailchimp for years. >> they never raised money >> they boot strapped the whole thing. ama amazing. i never received an email from mailchimp? tho thousands. >> i am afraid to open emails. that's why my apple phone will

be hacked. >> they're not related. >> the mailchimps? >> a great story they should betaxed at the sam time >> not carried interest. becky, good piece in the journal today. democrats get a lot of money from carried interest. >> that's the one that manages to slip through every tax reform bill >> i'm not sure. it is a great vibrant industry that i worry about the consequences and other partnerships the democrats are sure you need to do it until it starts lining their pockets in terms of political. >> it is a disgrace. >> it's a disgrace it is shameful >> do you understand why that's their thing. >> i don't accept i can understand why because i find it so shameful. >> that is part of the problem you won't admit why.

the reason why is they -- that's big campaign contributions >> yes it's disgusting. what else do you want me to tell snu. >> i don't know. you have the house and senate and the president. do something stop talking about it. >> shameful and disgusting you tell me when the republicans are in power and you will say the same thing and we can talk about it >> i told you i would not say the same thing i think -- you talk about it all the time it's a horrible thing. when you get a chance to do it. >> it is horrible and shameful and disgusting and gross every time we have a democratic politician on air, we should talk to him about this >> he doesn't get to vote. >> stop talking about it change it or shut up. >> he doesn't get to vote on it. >> you sway those people one way or another get them on.

>> i need to do more work on this. when we come back, two market strategists on what we should look over on the trading day ahead. and a look at the dow gainers and laggards stay tuned this is "squawk box" and this is cnbc >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com.

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welcome back futures are adding to the fairly substantial gains yesterday. we did not see the reversal from the early morning indications. 3m was out with negative comments it accelerated throughout the day. now we're seeing the dow up and nasdaq up and s&p up all after fairly difficult week last week. joining us is gabriella santos and amy with rbc amy, you said what is interesting which is what options are indicated. we do that a lot when you come on we did see kroger and actually, i think, we will hear from kroger at some point today we are seeing pricing pressure with inflation read today.

going out 6 to 12 months, you don't see people hedging the consumer products companies. they don't seem to be concerned about inflation lasting through that period. the option market is confirming it might be transitory is that your point >> yes, joe. i would say an interesting stratification area. there is persistent concern in staples and industrials. you take that longer term and it disappears in staples whereas industrials. this is looking at down side implie implied volatility >> what does that indicate to you? a lot of times there is a message in the markets do you think that is something

you can bank on? can you decide how you feel about inflationary pressure from the markets in your view >> i think the way i would frame it for people who are trying to use this is information in a tradeable way is if you look at the issues going on in kroger and consumer staples and think this is persistent i don't think this is transitory the consumer staple hedged the bet. if you make it inflationary, you may be better off in the staple sector than xli where it is priced in. >> reopening, closing. delta variant. does that have an issue over consumer staples >> yes in 6 to 12 months out, that is

baked in what will happen with taxes. that could be part of it you know, overall option sentiment. taking s&p that is glum it has been bearish. on the overall market, the market is positioned on the down side everyone has been along the market and owning hedges along the way. >> gabriella, uncertainty. markets don't like uncertainty. you seem to be indicating that right now it is a period where there are many, many questions and nobody has answers i'm wondering whether that's unique you actually use a phrase that i love because we used it here there's a lot of noise, but not enough signal. we like to find the signal through the noise. what do you mean >> that's right. i think as we enter the fall here, there are a lot of

questions that need to be settled before the market can grind higher and we get clear leadership here with cyclical and defenses the question is whether the third quarter growth slowdown will fade or growth ramp back up next year. whether inflation or the pop prove to be transitory whether 2022 earnings can be revised higher or whether the rest of the world can pick up the growth baton and expecting it to pick up in asia and whether cyclicals will stop depressing bond yields we are in a period where we will not get conclusive data to answer the questions one way or the other. so we will get cpi data, for example, this morning. we might see a second month of moderation with inflation pressure and things like used cars and lodging and

transportation you will continue to see some supply driven effects on goods prices we are unlikely to see the numbers. the market is a bit sideways without a clear leadership or narrative a little bit longer before we resolve the questions in a more positive direction and the market continues to grind higher in the next 6 to 12 months with the cyclicals taking the baton back from growth. >> you are not looking for a 5% or 10% break anytime soon? just an period with churning and it moves higher? >> we might get that over 5% pull back just because this is a unique year. this is only the third in history we haven't had an over 5% pull back probability speaking would be normal especially if we get more bad news before good news.

here, we are watching what is happening in congress. the discussions around corporate tax increases which, of course, are important for the 2022 earnings he can expectation. we want to get clear issues on the debt ceiling and supply disruption we might get that pull back which is normal and investors have been hedging and expecting before we get some more good news in the market which grinds higher later on. >> very good gabriela and amy, thank you. let us know if it changes. is there a lot of interest in the open options we're seeing enough. >> there is. >> okay. okay crazy. all right. thank you. coming up, amazon ceo responding to comments his company is a monopoly. first, we are watching the

home builders. industry index down 6.81% in september. each down 7%. we with will talk about it when we return afr isteth >> announcer: this cnbc program is sponsored by ibm. the world is going hybrid with ibm. the live better u program basically just provides the answer to the question: what if? with live better u, my 'what ifs' were erased. ♪

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matching your job description. visit indeed.com/hire we see smarter software delivering cleaner power. emerson's breakthrough technology enables the power industry to integrate renewable energy sources to modernize and improve the electric grid. emerson. consider it solved. we mentioned apple earliear. the company's product event this afternoon. another company in focus amazon's ceo andy jassy sitting

down with cnbc's "tech check." here is what he said about the company being a monopoly. >> we don't have the way to raise prices in any unfettered way. if you look, we are constantly taking prices down with the competition in the market. you have to look at reality. at 1% of worldwide retail. it is hard to argue that's a monopoly. >> don't miss the conversation at 11:00 a.m. eastern time andrew, it sounds like they are getting at the idea of a monopoly if you have lower prices for consumers. if you are a monopoly if you are lowering prices for consumers. >> this is the ultimate question the way we measured anti-trust laws and benefits or lack of benefits to consumers is typically how we have done this. now a move afoot to suggest it be done differently.

amazon he is right. amazon is not a monopoly if you look at the world as retail. if you look at the world as electronic retail. the narrower you get you have to get narrow we will see what regulators come up with. >> cathie woods? what was her premise >> deflation eiary. >> thank you for the segue >> because of technology >> technology is going to become deflationary like it has been she also believes inflation, at least the inflation we're seeing, i don't know if it is temporary. we will show you more of the conversation with cathie wood. tesla and china and bitcoin and the broader markets. as we head to break, look at the s&p 500 winners and losers

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welcome back to "squawk box. the s.a.l.t. conference in new york last night. i sat down with cathie wood. she manages $85 billion in assets ark innovation down 5% year to date i asked her where she thinks we are in the market. >> i believe we are seeing -- it will be incredibly confusing to people just look at what's happened to the bond market this year? against all expectation, yields have dropped from 1.75 at the peak in march down to 1.3. as inflation expectations are exploding. we believe the reason for that is that we're probably when all is said and done and the dust

clears from the supply chain, we are in a highly deflationary world. >> joe and becky and i were talking about that before the break. i asked about the role of millennials and the role they play in the markets given how much they supported her fund >> i do believe that both crypto and the equity markets are going to be powered by millennials tom lee has done the arithmetic the way stan did he said the bull market will not end until at least 2026 and maybe not until 2038 when the number of millennials peaks out there. >> last week, three of cathie wood's sold over 180,000 shares of tesla the closing price is nearly $139

million. a lot of headlines about the sale i asked her why she made it. >> tesla is still the largest position in our portfolios on that particular day, and i can tell you this, because we disclose holdings every day and public trades every day. on that, i'm always looking for cash especially the flagship fund which is very concentrated and involves all of our technologies so, a company in the automation space, ui path, was down 11% that day on its earnings release. tesla had just gone up 30% it was really a tactical move. to give you a sense, tesla is at 10.5% position in the flagship fund the next highest position is, i think, 5.9%. so, the conviction, i will take a trade up 30% and down 10%.

that's like a 40% difference that's all that was. we cannot buy a stock if it is 10% or higher in the portfolio we can sell, of course we do not have to sell what we usually do and this is not science. very unpredictable you can't replicate this in terms of trying to figure out what we're going to do when a stock gets to 11% or 12% in the portfolio, it means that it has appreciated by 10% to 20% relative to the other positions in the portfolio usually what we're doing is being opportunistic and taking advantage of a drop in a stock an gain need the cash largest position above 10%. >> ark is an investor in coinbase we talked about the twitter feud with the s.e.c

>> i was shocked when i saw it wells notice they haven't released the product. what is this i think what that wells notice is doing is a callout by regulators saying we got to discuss this stuff because this is happening very quickly. i think we are going to bring courts into the system >> we will hear more on that conversation with cathie wood in the next hour. including her take on the investing in china >> we will talk? >> let's talk. what do you think? >> she might be right about inflation. it's been 20 years 40 years probably we benefitted from amazon and technology then we talked about anti-trust. hopefully we don't screw it up by going the european way where you worry about competition instead of consumers deflationary pressure. >> we didn't show you the france

portfolio. >> you know the way my mind works. when she said that about 2038 and the millennials peaking. i cannot wait. i can't wait to tweet to a millennial okay, millennial, i can't wait to do that the way they do, okay, boomer. they will be boomers some day. and that snarky -- then they'll realize in 2038. wow, my parents really were right. >> you can't wait that long to say i told you so. >> a lot of assumptions in doing that in 2038 >>andrew, about tesla. i understand that 10% of the flagship portfolio she started to say something about conviction and stepped away from that i wonder does she has less conviction in tesla so far based

on how the company is run? >> i don't see her going below 10%. what she called the base case is tesla hitting $3,000 in the next five years her best-case scenario is for it to hit $4,000. also a fascinating conversation about how she discounts, interestingly, the comments elon musk makes the comments about the robo taxis and things when she does her models, she doesn't put it down as 100% probability or 50% probability she puts it down as a 25% probability. >> it is a track record. >> even as somebody who is a complete and utter bull on elon musk and tesla >> she is familiar with things not happening quite as quickly as she has predicted in the

past the market, you know, the market bailed her out on a lot of calls. the fed has to do with a lot of that, too. we will see five or ten years from now if we are still talking about cathie wood like we had peter lynch. >> we illwill have more on the s.a.l.t. conference tomorrow >> let's work it out >> mark spitznager and dr. scott gottlieb and ray dalio they will come to us live from the s.a.l.t. conference. >> do we need a new acronym on s.a.l.t. >> because of the taxes. >> i think strategic arms limitation treattreaty i think taxes and bloomberg. i like salt.

>> on your french fries? on your hamburger? >> i don't know what to do no way to get rid of it. they will not be able to raise the capital. >> where are you i want to get rid of the s.a.l.t. taxes. >> what do you mean? >> i would like to -- you know -- reimpossible. >> you have to raise taxes somewhere else >> i know. >> you could do carried interest i can tell. >> it is tough for them to reinstate fully. it would not be surprised to raise limits we're out of time. >> disappointed with josh. >> why >> because the journal called it a fig leaf they folded. all nine when we come back, we will talk about what consumers can expect from the apple event. and kevin mccarthy talks

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apple is expected to unveil some new iphone models today featuring upgrades to the processor and battery and camera there are still many questions for investors and josh lipton is joining us with more >> reporter: joe, dates tech investors circled on the calc cal calendar this is one where tim cook takes the stages to introduce new iphones. mini, regular and pro and max. important questions for investors today. will apple raise prices due to memory costs and price hikes we know are on the way. baseline iphone 12 starts at $799 they have been impacted by the

chip shortage. how will that affect supply? in addition of the iphones, apple is unveiling a new watch perhaps with a faster processor. that accounts for 5% of total company sales. some on the street are bullish they are betting it could become an important health monitoring device for a lot of people we could see new airpods as well apple doesn't breakout that product. now it accounts for 5% of overall revenue. becky, back to you. >> thank you for more on what it means for the stock, we have joined by the analyst daniel bubdaniel berger. what does it mean for the stock this time around >> becky, for the stock, it will attest to the fact that the company is innovating and

delivering a great user experience which is key to creating value as josh mentioned, we will see additions to the camera. the bigger story is how important video is becoming to the overall experience then you think about the fact that we are very early in the rollout of the 5g or next generation which will enable a better experience. i'll round out the importance of the watch. if you have a bigger screen, you will enable a richer experience and a key area like health care and fitness with the ecg emergency calling. a lot of things that help people lead healthy and fitter lives which all of us care about >> i hear your point with the watch. when it comes to the video, what is the important part with going 5g we will all have to pay more for storage every month? >> i think less about paying more for storage i think more about the

versatility of the experience being able to create an exceptional cliche video is more essential in all of our lives the importance of pushing forward the experience in making it stronger with each generation coupling that with the next generation network is creating that rich and dynamic experience >> daniel, we will be joined by dan nyles later this morning he has taken a big step. they used to look at apple as the largest long positions now it is one of the biggest short positions. he just changed his tune on this first of all, an evolutionary part of the cycle, not revolutionary. he talks about semiconductors and other components will

increase in price. and the work from home stole from the forward sales on some of the issues. and he thinks epic is a big deal although many think epic lost in this it could mean changes in terms of what they get from the app store down the road. not just what the epic lawsuit and the judge required there, but also regulatory pressure he adds that up and thinks this is the time to short the stock what would you say >> what is important from the iphone, becky, and we appreciate the smartphone market is mahore mature this calls for healthy demand from existing users. i think when we look at the epic lawsuit, what we are likely to see from apple is the company is going to give a little more flexibility in terms of developers reaching out to users. i think there could be

additional payment options what i think is going to matter more so than the current focus is the longer term story with the app store. will apple continue to make it a vibrant platform the data suggests they have been successful and paid out $230 billion to developers since 2008 of course, the majority of apps are free as long as the company is able to create tools for the developers, millions of men and will around the world, building on the platform and give that seamless user an experience, that is what will matter to the app store and apple and most importantly to the users ultimately, this is a company enabling others to create and innovate on top of it. if they are able to do that, i think apple will create additional shareholder value over the next one or two years even in the face of slowing ipad

and mac given the strength of work from home a lot of drivers here which is key to shareholder value. >> daniel, thank you for your time >> thank you, becky. when we return, a new media avenger. it is breaking news. hnel jnss xt jo klyoi une >> announcer: squawk picks is sponsored by wisdom tree the modern alpha pioneer

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welcome back to "squawk box. from puck news, trouble at viacom cbs after shakeup at leadership as sherry redstone not happy with the direction of paramount pictures joining us to discuss this and

so much more, co-founder of puck news, officially out of -- i don't know if it's out of stealth mode i think we're out of stealth mode now but i don't know if we were technically in stealth mode but a stellar lineup of amazing journalists who have gone over there to create some pretty compelling journalism. >> thanks for having me. thanks for the kind word we're out of stealth mode, out of beta mode and into the world. as you say we've been initiating a private email program for a large part of the summer to try to connect with insiders and concent rick circles in washington, silicon valley and hollywood. we appreciate the support, guys. >> you put together some of my favorites. william cohen is a friend of the show, who has been on this program many times, dillon buyers, teddy schrefeler and so many others. i want to get to the news that matt had in his report about

what's happening at viacom/cbs and with an that shakeup really pore tportends. >> first of all, andrew, you're making me blush. thank you. matt is doing an amazing job no different on sunday the shakeup at paramount, brian rob robins in. all signs point towards this being a fundamental change at paramount, which is the historic studio of robert evans and sherry lansing and is under the hand of sherry redstone, lurching toward the streaming wars, probably a few years behind its biggest competitors obviously cbs and viacom is an arranged marriage of some sorts and the combined entity is smaller than it was when they were individual entities it's pretty clear that it is on a direct path vectoring towards how they can build up paramount plus, their streaming competitor

to netflix, hbo max, apple plus. >> it seems like matt has made, and i think it's the right argument to make, which is they need to build this quickly what they really need to do is think about selling and they need to -- there's a difference in terms of the math of playing for the long term versus playing to sell. the question is, how quickly do you think that actually happens and to whom? it also seems matt has made the argument that the best seller, long term, might actual ly be th new discovery warner media but you have to wait for that transaction to close and probably for that to integrate first. >> yeah. it's going to be a longer timetable no matter what we're reading the tea leaves here based on the business intelligence we have, which is that the multiple for parameter plus and annual recurring revenue from subscriptions is going to be higher than the multiple from a legacy media there's absolutely no doubt about it

this is where it's going in the sektder. we all see this very clearly it also appears very clear that vichlt acom/cbs is going to be right in between too small to compete with the netf net netflixes of the world 10 to 12-month window on this at&t/discovery deal. any potential comcast arrangement. that was in the news a couple of we weeks ago. obviously that would go through a lot of regulatory hurdles and nbc and cbs would be involved in the deal it seems clear that this is at least being positioned for the opportunity for a sale, andrew. >> john, as someone who is now getting into the newsletter or subscription business yourself, and the multiples that people are putting on subscription businesses, i wonder whether you think unto itself that will be a fad. meaning if we're having a conversation ten years from now, whether it will be a rerating -- right now everybody loves a sass

business in all forms. as you know, these things seem to come and go. >> you know, i'll take it back a second what's old is new again somehow. my career in the heyday of the magazine business and vanity fair when it was an extraordinary annual business based on monthly recurring revenue. there was obviously adjacent advertising business, everyone talking about. you knew every single month who your subscribers were. it was an incredible, predictable and wonderful growing business obviously there were ten or 15 years when people came along and scrapped a lot of businesses we're seeing again how you can grow these predictable arr businesses so you can actually build adjacent lines of business around them. i don't think it's a fad, andrew i think we're at the beginning of something big and powerful here i say this as a founder of a new media venture, we're trying to build a microcosm of what these

behemoths are go ing through at the other end of the spectrum. >> we wish you a lot of luck with it and hope to follow your progress thanks. >> thanks, andrew. leading technologist and artificial intelligence expert kai-fu lee on the next big trends plus, kroger partnering with inis that cart to deliver groceries in 30 minutes. the ceos of both companies will join us. then, house minority leader kevin mccarthy, either love him or hate him. set your dvrs. love it when he comes on you should see the twitter feed. you're watching "squawk box" on cnbc ♪ ♪ we are the next. the next generation of visionaries.

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the dow and the s&p snapping a five-day losing streak we'll get you caught up on what's moving this morning. democrats formally unveil ing their tax plan to pay for the president's trillions in new government spending. former omb director peter orzak will join us. a delivery deal that could get your groceries in 30 minutes. we'll speak to the ceos of koeger and inis that cart about their convenience store as the second hour of "squawk box" be begins right now welcome back to "squawk box" right here on cnbc i'm andrew ross sorkin along

with becky quick and joe kernen. dow looks like it will open up 35 points higher, s&p 500 up five point, nasdaq five points higher as well couple of headlines to bring you right now. manufacturers of rapid covid-19 tests are apparently falling behind as new white house mandates increase demands for those tests, limiting the number of home tests consumers can buy as suppliers ramp up production and consulting group now saying con consumers are having a tougher time to get bulk tests key executive president tom nealon retiring from southwest after ten years from the company, three months after he was passed over for the ceo job. announcing in june that he would retire in january and will be replaced by long-time southwest executive bob jordan apple is holding a product

event today at which it's expected to unveil the newest iphone models and updates to apple watch and ipod it will be begin at 1:00 p.m. eastern time and as other apple events, held virtually you know me, i'm going to sit here at my ipad right here and will watch. >> yesterday, joanna stern tweeted out we had a bet about whether it would be called the apple 13 or not. >> you did she did say that yesterday you said it on air did you not remember >> i totally remember. i just don't remember i told you i bet it's not. >> you said okay i remember at the time it sounded like a bet to me, too. >> i didn't say what i said was going to be called i want to bet on the same side you can't bet someone when you're both on the same side. >> let's go to the tape. >> you can't use that word, by the way. you can't use that word. >> i did. >> because of people in wales.

>> what am i supposed to say then you're trying to get out of it >> i didn't bet her. i didn't say it's not going to be the 13. she made that up. >> i took your approval, your assent to mean the same thing she did. >> you can look at it. i bet you $13 it will be the apple 13 and i said okay. >> right, which means okay, i'll bet you. >> it was not betting. i was saying -- >> you bet on everything you have to definite ly say if you're not beth on something otherwise we're going to assume. >> no, i said i love the 13. they don't have them in buildings but i got married on the 13, it was a full moon, lunar eclipse. >> you don't seven. >> it's too jagged my son, when he was young, didn't like -- >> i like both numbers. >> he likes nine, a nice number. ahead of apple's -- soft ahead of apple's big event, battling an even bigger. i'm afraid to even touch my

iphone today you don't have to do anything, right? what, it can explode or something? what happens >> i hope you guys all updated your iphones yesterday i updated mine as soon as this came out that it has a patch to a new vulnerability, zero day, zero click exploit new spyware is circulating out there in which the attackers can get into your iphone without even sending a bogus link. we spend so much time focusing on those links you click on. this spyware gets in just by knowing your cell phone number and that's it. you can't even see it's gotten in the group behind this spyware is the nso group. and this new disclosure is raising questions about who the new nso group is israeli software company founded in 2010. they make the so-called peg as software that can access ios and android phones it only sells to government

intelligence and law enforcement agencies to fight crime and terror they reportedly froze sales to the saudi government in the wake of the jamal khashoggi killing israeli media reported nso group did suspend its sales to the saudi government citizen lab, cyber security investigative group, they say that nso group engages in despotism as a service, selling this software to despotic governments that use it to oppress dissidents, journalists and the like some of this is on apple, one expert says, because they're not doing enough in terms of security here is what he said. >> apple essentially is ignoring the fact that their phones are being compromised. yes, they put a lot of security into the device but it's not perfect. they need to provide end users with the ability to determine if their phone is compromised or not. today, that doesn't exist. >> so apple issued a new

statement about this yesterday saying that attacks like the ones described are highly sophisticated, cost millions of dollars to develop, often have a short shelf life and are used to target specific individuals. the implication there being if you're not a high-profile person that some destination state entity is going to spend millions of dollars to attack, you don't need to worry about that that said, apple released the patch. everyone can download that today after your iphone if you need t do that. nso gave us a statement yesterday, they're not backing down here is what they told us. nso group will continue to provide intelligence and law enforcement agencies around the world with life-saving technologies to fight terror and crime. so, that is the dispute right now. nso group says it's providing the software to fight terror and crime. critics say, hey, it's being used to push back by these governments on dissidents, journ journalists, human rights activists and all sorts of people who don't fit in that bucket

fascinating dispute. >> andrew, i always wait for you to upgrade things, because you say there's lots of bugs you've done this already so it's safe to me >> go to general. >> right. >> settings, general, software update. >> okay. >> you might have automatic updates on. >> i do have automatic updates on i didn't see one. >> and have wifi. >> it's crappy wifi here isn't it >> it's not great here, i will give you that. >> eamon, can i ask you a washington question since you're still clued in >> sure. yeah. >> this -- i'm seeing this characterized as taxing the wealthy not the very wealthy they've still dodged again the most egregious avoidance is taking a loan out against, you know, securities that have gone up a lot in value, writing off the interest, living off that. and that the billionaires totally are -- >> you never sell so you never

pay taxes. >> that's totally not in here. >> right. >> do you think that makes sense in that -- i've seen that you look at what joe biden would like to raise. if you take the total wealth of the billionaires he's spending more than they have. maybe you need to go where the money is billionaires don't have enough so they're escaping this -- there must be a way at getting at it somehow. some type of consumption tax if you buy a mega yacht for -- 550-foot yacht why not get at it that way that way they can't spend any of their money consuming? why not get at it that way >> the argument is the consumption taxes -- >> you can put it in assets overall, right >> you can't do it -- >> they can try. they can try. >> consumption tax ends up being regressive. >> you do it so it's not regressive. >> on like wealth items. >> items over $100,000 or

something. >> right. >> turn over property law and property rights to do the wealth tax. >> no, but if you wanted to make it -- >> wearing aoc's dress this morning, joe. >> i love her. she's our celebrity politician. >> i thought you were going to be in drag this morning. >> didn't do anything before she became a politician and doesn't really do anything now but the lesson is go out there and get attention for yourself, right? that's what she was doing yesterday. >> come on it's a sad world. >> classic, new viral media celebrity politics, right? >> i'm hearing we've got to go to commerce. we'll go to commercial she had quite a commercial on her dress. yes, she did coming up, when we return, cathie wood, limiting exposure to china we'll find out why and we'll speak to the former president of google china about doing business there as well let's get a check on the futures. "squawk box" returns right after this

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in business, it's never just another day. it's the big sale, or the big presentation. schwab! the day where everything goes right. or the one where nothing does. with comcast business you get the network that can deliver gig speeds to the most businesses and advanced cybersecurity to protect every device on it— all backed by a dedicated team, 24/7. every day in business is a big day. we'll keep you ready for what's next. comcast business powering possibilities. i don't think it's a very friendly place for capital now however, focused only on innovation, china has, in its various five-year plans, made innovation incredibly important plank. >> right. >> and so we don't want to avoid it, but what we do want to avoid is very high margin companies.

so you look at jd logistics or jd.com, some of the companies that are pushing innovation and access into two tier cities, we'll play with that what we've done in the moves recently around china, we've taken our position down significantly but stayed with a few low margins. >> invest more, what would you need to see? >> what would i need to see? i think xi jinping saying, woops, we made a mistake we're open for business. i don't think he will do that. i don't think we'll be hugely involved with china. >> that was ark invest cathie wood we welcome in now kai-fu lee,

sinovation ceo good to see you once again so much to talk about. so many stories in this book about ai and future of work and what our life is going to look like i want to talk about that but also china and what's taking place there, given that we have had conversations, both of us together, about the future of china and all the innovation that's going to come yet here we are at a moment where there's a question mark about that, given the regulatory crackdown that's taking place. what do you think is happening here behind the scenes >> well, i think we're seeing a decision to regulate large internet companies to ensure that their large market position doesn't hurt consumers that's not a lot different from what the u.s. and eu have done so i think to call that a regulation of all-tech is way overstating the reality.

the chinese government is very big on tech. and i think in the next 12 months we're going to see 10 to 15 artificial intelligence ipos, many of which we invested in although ipos are moving smoothly so i think there should not be an over interpretation of the intent to limit the scope of large internet companies to take the data they have to cause problem for consumers into an overreaching slowdown of the tech economy that will be mistaken by interpretation. >> we see the polling of the alipay ipo or what appears to be -- appearance may be too strong of a word but say he's laying low and i'm talking about now jack ma. just a real sort of shift. you saw the crackdown against

didi these are high-profile tech companies that have really taken it on the chin from the government and a real question about what that is really about. >> well, these are, as i said, large internet companies china recently just passed the laws for data regulation, punitive measures were put out for each of these large internet companies. the way u.s. deals with large internet companies is to go through congressional hearings, traditional appeal, anti-trust and justice department t takes a long time. and usually no action. china is much more action oriented and the types of action are the speed that americans are not used to seeing and, you know, fast decisions, if made correctly, will cause these companies to reform and give a chance to smaller companies, which we invest in, to have a chance, creating a healthier ecosystem.

that would be the glass half full angle i look at this. >> has it changed, though, your investing thesis at all or how you might approach this? what do you make of what's happened with jack ma, for example? >> i haven't talked to jack for many months, so i don't know we invest in deep tech we've always invested in deep tech, artificial intelligence, semi conductors, cloud computing, and i think these stocks and what these investments and in the future stocks will be in favor of bec because, you know, if you choose to believe that the government will have power to make or break a company, then the government is doing everything it to make these semi conductor and cloud companies. so how can it be wrong to invest in them? >> if you hear cathie wood -- and i don't know if you had that

opportunity to hear the clip we played before you came on. she said i'm not investing new money in china right now you think that's the wrong call? >> i'm talking about china deep tech i believe all of us believe when the chinese government has the well, it's good to invest in also health care, bio are also great to invest in i would definitely do that i disagree with anyone who chooses not to on the internet companies, yes, there are -- but the decisions have come out. the punishments have been handed out and their valuations have been dropped by half or two- two-thirds in some cases already. i would say there probably is a case for bargain hunting as well although i'm not an investor in these large internet companies myself. >> let's pivot toward your book for a second you spend a lot of time looking

at the future. and what it ultimately looks like, you know, 10, 20 years from now in this case in 2041. paint a picture for us of what you think life is like then. what do you think the biggest distinction is >> yeah. ai and other technologies like quantum and life sciences will have disrupted many industries we will have ai become part of education. ai will be teachers teach ing every student in a particular way that's fun and helps them grow with the human teachers providing the mentorship on va values and what's right and wrong. ai will help us live 10 to 20 y years longer for people born in 20 years because all the data that can be fed in to revolutionize a diagnosis, treatment and discover new drugs will no longer have blockbuster

drugs that cost $2 billion to develop. it can be invented by ai and human, treating on rare diseases just for starters. >> what do you think of the idea -- and, look, i love innovation but ai -- the promise of ai has come a lot more slowly than some of the optimists have suggested. and i'm thinking of autonomous vehicles as an example. >> we invested in a chinese company that is launching global buses in five cities so these are happening it's just that if you want too much, if you want an autonomous vehicle to go from any point to any point, it will take another 15 years or so but there are many useful things you can do buses travel on fixed route to fixed points it's a problem we can tackle today. these buss are being delivered

without a steering wheel it's a marvel to look at, almost like science fiction, and they are functional. >> when you talk about privacy, it's a big issue i don't know how you think about it yourself personally, based on where you are at in beijing right now, but what do you think the implications are when you start to think about i long term >> i hope there are technologies that will let us have our cake and eat it, too. two signs of privacy, one, you want to keep it to yourself. nobody else should get access to it no company in most cases, no government or minimize company government's access on the other side you want the data to be aggregated so intelligence ai can work and help in your everyday life there are companies like fed rated learning that allows you to give your data to trusted

devices, say your phone or hospital services and it can go no further and there can be a national model trained for cancer diagnosis but the data never leaves your hospital these are tiepts of technologies that will allow us to have our cake and eat it, too. >> kai-fu, but i let you go, we've been getting a lot of emails maybe it's an unfair question to ask because you're in beijing right now, but do you feel you can speak freely, completely about china, your own opinions and say them publicly whatever they are, or not, these days >> all of us go on every television station have to package our thoughts in a way that is appropriate for the audience and for the environment. so i do the same it's no different, if you ask me questions about the u.s., i would state it in a way that i think matches the situation and the audience. >> kai-fu, appreciate you being

here ai, 2041 appreciate you being here. >> thank you coming up, peter orzak on how the government should offset the president's $3.5 trillion budget plan. then the nation's largest grocery store, kroger, is teaming up with instacart on how to deliver to you in 30 minutes. flexshares etfs are built with advanced modeling. to fill portfolio gaps and target specific goals. strengthening client confidence in you. before investing consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully. (vo) this is a place for ambition. for a prospectus containing this information. a forge of progress.

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welcome back to "squawk box. i'm dominic chu. big takeaway from what we've seen so far. tech sector is up 9% in that span come services is up 8% health care rounds out the top three around 6%. energy sector, far away the worst performer in that timeframe, down roughly 10%. big gainers this morning are in the oil and gas industry like marathon oil, occidental petroleum. more bullish comments from the

international agency which says oil dmoond is set to pick up an estimated 1.6 million barrels a day into october and that will continue to grow into year end we mentioned apple big streaming event is today that stock will be on the move given those announcements. also keep an eye on apple suppliers like jabil, broadcom if you're interested to see what other apple suppliers could be on the move today go to cnbc.com/pro s subscribers can see the moves there. it's not just apple but watch the suppliers as well. >> dom, we will do that. thank you. 2041 >> 2041. >> i've got 2038 for millennials and then -- >> it's tom leroy, kai-fu lee with 2041. >> i better get that booster. >> watch my cholesterol. >> i'm with you. >> get the third shot.

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welcome back to "squawk box. democrats have pushed for years to tax wealth the same as work, but that gap may be widening under house tax proposals. robert frank joins us now with more you're in a suit you may be dressed to tax the

rich. >> i didn't dress for that this morning, andrew. this raises the capital gains tax rate and income tax rate rather than close the tax gap on work and wealth it actually makes it higher. on the sale of assets is 20% tax rate for wage income is 37%. over the past year, democrats have ramped up their calls to increase taxes on wealth biden planned to raise the capital gains tax to ordinary income levels both at 39.6 the senate even has a plan for billionaire's tax to tax wealth and unrealized gains the house, well, they had other ideas. it is proposing a capital gains rate of 5% at a top income tax rate of 42.6%. that includes a 3% sur tax on top earn ers. rate gap between taxing work and wealth would be 17.6%. that is large r than the current 17%. the house also avoiding biden's plan to end the step-up in bases

which allows the rich to avoid taxes for a lifetime or even generations. most of the revenue, bottom line, for any reconciliation would likely come from high-wage ear earners rather than the asset wealthy. at least according to the house plan guys >> joe made the point, and i called it shameful and disgraceful, they're not touching carried interest, they're not -- >> they are touching carried interest, andrew they are. >> oh, it's -- >> it's minor. >> instead of the three-year holding period it goes to five years but just to be clear, they are touching it. >> i mean, come on do you agreally agree they're touching it? like for half a second >> it's a change. >> what do you think is happening here why? >> the farmers got to them look, there's this huge. >> the lobbyists got to them >> the farmers and the small

businesses, you know heidi heitkamp, former democrats that are advocating against the abolition of step-up were successful and that's on the step-up side it's interesting to me why, you know, the capital gains didn't go up to ordinary income you can step up alone and at least increase capital gains to ordinary income. maybe it was the financial ser services industry that's worried about a stock market pullback. i don't know clearly they got to them on assets. >> i appreciate farmers in the united states. i geneuinely do. but how many farms are we really talking about protecting here? and is there a different way to do it? >> well, you know, the senate plan, they're talking about a $5 million exclusion for farms. so, number one, they're saying farms will be excluded you don't have to sell the family -- don't have to pay the tax on the family farm or small

business as long as it remains in the family until you sell it. so that would sort of take care of most of it. and then the $5 million exclusion ensures any farm valued at less than $5 million would be excluded from the tax i don't know why they continued fighting back after those exclusions seemed to me to solve the problem. >> robert, the 26.5, if you add in state and local, the point is made in the journal that it br brings us back to 31 corporate tax rate, which we're back to number one in the world for how high it is. >> yeah. >> anyone care nasty corporations that -- >> the chamber of commerce came out yesterday. they cared a lot a lot of businesses care about this i mean, 26.5%, people talk about the market rally yesterday being a relief rally with that 26.5% it's not that much lower than 28%. as you mentioned yesterday,

that's the opening bid probably going to settle around 25%. even at 25%, i think when you add in state, that would still put us maybe not number one globally but certainly in the top three. even at 25. >> great thank you, robert frank. joining us now peter orszag, former omb director in the obama administration peter, i know that you would rather talk economy and health care and overall than the tax plan i'm not really sure why, because, you know, really no budgets. did that before. you kind of want to avoid -- >> you're sucking me back into it, joe. i have to say unfortunately i think the analysis in that previous segment is wrong. the gap on capital income versus wage income will go down not up. the reason is in your analysis you applied the 3% surtax to

wage income but not to capital gains and i believe at least based on the descriptions that i'm hearing, it will apply to both it will apply to adjusted gross income, which capital gains are included in. so there are a lot of details here that we need to kind of sort through i'm happy to talk about it, if you would like. >> it's funny. have you ever seen in tv trials when they have if one or the other side brings up something that the other side wanted, because for a minute it made sense to them, then the other side is able, suddenly, to talk about it and they introduced it so you've done it. you've introduced this tax discussion. >> there we go let's talk about it. mission accomplished. >> peter, overall, and just philosophically -- you were in the obama administration and biden was vice president do you think that the expansion of the federal government that we're seeing, that we're seeing

here -- "the new york times" the other day called it a cradle to grave expansion to entitlements. do you think that it's a -- we should be doing that to the tune of $3.5 trillion and do you think that the concurrent tax increases will have no negative effect on either gdp or corporate profits? do you think it's worth it do you think that's what we need to do? >> so, joe, again, i'm not in government anymore what i would say personally is that there are a lot of things we need to be doing. i would put at the very top of that list altering the course we're on with regard to climate change and that probably does -- not probably it does involve a significant amount of new activity a and, by the way, if we wanted to finance that with the carbon tax or tradeable permanent system that would be fine, too, from my perspective. that's not entirely what we're doing here so, like with most things in

l life, or at least in politics, it's a mixed bag, at least from my perspective there are things i like, things i don't like but it's not up to me anymore, joe, and i'm glad for that. >> you've seen if china and india continue along the same path that the type of actual influence we could have in the next 10, 15, 20 years is -- do you think that we would have fewer weather events, if we undertake this action with the 3.5 trillion do you think that things would actually change in terms of flooding or wildfires? do you think we can influence that >> my point was that we can do a massively ambitious -- you asked the question broadly about government spending and government involvement in the economy. >> like building up levies and making sure the subways don't flood or change in the outlook for the number and frequency of weather events >> there's a whole bunch of things we need to do. >> okay. >> we need to put a price on

carbon, invest a ton in technology we do need to do some abatement and other protection measures, too. but i don't think you can look at what's happening, including frankly what's happening in texas as we speak, and just be complacent about the pathway forward. i would be taking absolutely every step we could to reduce the climate risk that the world is facing. i think that is the dominant economic risk that we face over the next couple of decades. >> what are you seeing in -- nicholas, you're talking about >> nicholas today, but we're seeing a significant number of extreme weather events. >> okay. tell me about the positive things you're seeing in health care is it the digitalization of health care or is it -- and are we addressing that effectively in some of these proposals we've got -- i mean, heck, we're throwing 5, 6 trillion around with the other structure plan.

seems like there should be -- >> we're in the odd position of you keep looking to the government to make all the change and improve everything. there's a lot that's happen ing out in the real world, as they say. yeah look, several things are happening. the most exciting of which is we've dramatically accelerated the use of digital technology in health care because of the pandemic and because of the increase in virtual visits during that time it came off a little bit as people have gone back to seeing the doctors and go ing to the hospital physically, but there's been a step change there lazard has a new health care survey come ing out in a week or two. one of the things that health care professionals see as being persistent is the new, you know, dominant role of virtual health care it's convenient. it might improve quality and might reduce costs but certainly is a lot more convenient than having to go to the doctor even

when you have a minor issue. >> maybe the watch, peter. >> yes. >> i want to lower my blood pressure it's going to be hard. >> difficult for him he says he wants to live to 100 and -- what? what's the age >> i want to see ai in 2041 and the decline of the millennials, pete i want to live just to see that. >> the new watch is going to get you there, joe. >> so i can say okay, millennial, like they do with boomers. you're saying i want the government and you're pitching the private sector this is like a crazy -- >> exactly. >> i don't know what happened. peter, thanks. good to see you. >> good to see you. kroger teaming up with instacart to provide 30-minute delivery ceos of kroger and instacart will join us to discuss that

deal 30 minutes, that's amazing. top of the hour, house minority leader kevin mccarthy will join us he is going to be here did you know that, sorkin? >> i know! he will be here. >> we're going to go upstairs. he specifically said, you know. >> i got you. >> just me. >> g iot you. >> no, can you get in on it. updates on vaccine mandates. isn't it a paradox? that the love for this world that gets us out in it sometimes leaves behind the things that can harm it? but now, flight by flight, we can make a difference. because delta has committed to becoming the world's first carbon-neutral airline on a global basis. we believe you shouldn't have to choose between seeing the world,

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a programming note for you don't miss today's tech check. amazon ceo andy jassy sitting down for an interview and talking about possible regulation for big tech and whether or not amazon is a monopoly that will start at 11:00 a.m. eastern time on tech check on "squawk box," delivery in 30 minutes ceos of kroger and instacart join us exclusively to talk about their new venture. and business investor and owner of the new york mets, steven cohen, making an investment in radical, quaunt trading firm that specializes in crypto currents.

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this morning, a collaboration in the grocery delivery business was reported kroger and instacart are teaming up for what they call kroger delivery now promising 30-minute delivery to kroger shoppers. rodney mcmullen, kroger's ceo

and also fidji simo, instacart's ceo. i think we skrust lost her signal but we'll get her back. you're calling this the first of its kind convenience store what does that mean and how does it work? >> good morning, becky thanks for letting us join you it's about creating something that doesn't exist today it's no compromise a customer doesn't have to compromise on price, quality, variety. we offer 25,000 skus and, obviously, in 30 minutes delivery time. so there's no compromise you can get everything you want, just like you could going into a kroger store. >> how do you get things faster? i take it this is at different locations? you'll still be using kroger sto stores for doing it but how do you step up the timeline for that >> it's leveraging the assets of both of our companies. instacart has the ability to get

people to the store quickly, get to the customer quickly. our stores are incredibly convenient together we're able to map a store out so an instacart shop er can figure out where to go exactly to the spot within each store. it's leveraging both of our existing assets in a way and offering something new to the customer. >> having assets and using those has been a real plan for success for places like target and what you have been do ing to this date, too. there have been a lot of questions. people are wondering how consumers are reacting now that a lot of people are coming out and have been vaccinated are they changing their patterns are they shopping on line less, more likely to go into the s stores how is that working out? >> early in the second quarter, shoppers were going into the store more and picking up less everything that we can see

really accelerated two or three years worth of growth in one year and is maintained at that higher level the other thing customers are telling us is that they've learned how to cook. they're proud of the fact that they've learned how to cook. they are enjoying eating as a family and those are things that are helpful for us as well. >> i enjoyed it for a while but i have to say it got a little old after every meal for 18 months straight. i've definitely looking for other people to do the cooking lately i hear your point. it is good having everyone learn how to cook and sit around the table together fidji, i think you're good again. sorry for our opening technical difficulties i don't know if you heard the conversation with rodney tell us about this partnership and what it means and how it's different from what you're doing with other partners right now. >> well, i'm really excited about the initiative and it says a lot about the customer

it's a big selection by kroger, offering 25,000 products to customers in 30 minutes, speed price selection, it's really new. >> fidji, there's been a lot of excitement around your coming to instacart. people look at your experience with facebook and before that with ebay. maybe one of the questions you can answer what you learned about facebook and what you think you learned there that translates into what you can do at instacart. >> a lot about running a company at scale and running a global company of instacart great advertising business [ poor audio ]

>> rodney let's talk about some of the challenges. i think a lot of companies are facing right now grocery store companyies and others, too. and that's inflation that's when it comes to wages, how you get people, hire them and transportation costs from the supply chain issues, but from higher prices across the board. how do you handle that >> one of the things over the years, we've operated in low inflation environments and high inflation environments and you figure out a way to manage your business and one of the things that we use is our data to understand which items our customers are less price sensitive to. if you look at it overall, customers are expecting a little bit of inflation in the environment we're in as a general rule, we're able to pass it through in places where we need to the other point you made, becky, was in terms of find ing we cal employees associates, but we have about 20,000 openings right

now. we're gaggressively hiring anywhere we can. one of the biggest constraints we have right now is finding talented people. and we've continued to increase wages. we've been able to do that it's part of the long-term plan over the last three years we've increased wages by $850 million a year we are increasing another 350 this year. and through work process changes and using technology, we're able to make everybody a little more productive and that's how we're finan financing those increase in wages. >> fidji, i guess you're dealing with the same problems how do you find instacart delivery people? >> we actually had quite a lot of success in onboarding new shoppers and meeting the demands that customers have during the pandemic and afterwards. and a big part of it is offering shoppers very flexible

deliveries that work around their lives and offering the kind of work they enjoy, spending time in the store more than just spending time on the road as a result, we've been very succe successful in hiring shoppers. >> fidji, there's been a lot of talk about instacart getting into the digital ad business you're going up against some big competitors, facebook, places like walmart, too. how do you think instacart will be able to maneuver in that business what have you seen so far? >> the thing that's really interesting about our business is it's at the bottom of the funnel what that means is that all of these are able to advertise directly as people are putting items in the cart. and that creates a lot of positive with investment for them we are seeing them come back because they are really trying to get their products discovered right at the point of sale

and as a result it's an offering that really hasn't existed and we're excited to bring that to our customers. >> i know the plan is to get to a billion dollars by next year in revenue is that going to be a big part of the ramp up or is that just icing on the cake? >> definite ly a very big part o the ramp up. triple digits, and will be a very big part of the revenue. >> fidji, rodney, thank you for joining us today and letting us know about this partnership. good to see you both. >> thanks, becky. >> joe, we'll send it over to you. >> all right, beck thanks kevin mccarthy is here you voted already. you voted. something going on out there that we haven't talk ed about latest out of washington on spending, taxes and much more. you were not at the met last night? >> no, no. >> the gala? >> i wasn't invited.

i didn't get a free ticket it's illegal but i don't know how she does it. >> you're so obsessed with her apple's big product event kicking off today. tech investor dan niles on what it means for the stock as consumers await the new hoipne cost me $13 because i got sucked into a bet i didn't agree to "squawk box" is coming right back crafted by lexus. experience amazing at your lexus dealer. ♪ ♪ crafted by lexus. ♪ ♪ ♪ ♪

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good morning news of a breach to apple's messaging app coming hours before they're about to wow the tech world with new apple watches and more. plus californians go to the polls today to determine whether they'll recall their governor, garch new some this hour, a big interview w house democrats are out with some actual hard numbers on where they want tax rates to be. we'll have reaction from house minority leader kevin mccarthy as the final hour of "squawk box" begins right now.

good morning welcome to "squawk box" here on c cnbc i'm becky quick, along with joe kernen and andrew ross sorkin and u.s. equity futures this hour after a stronger day for the dow and s&p yesterday where they broke a five-day losing streak, you see arrows across the board. a couple of hours ago, you were looking at the nasdaq down now dow futures down by 41 points s&p futures off by four, nasdaq down by 26 if you're watch ing the treasury market, you can see the yield on the ten-year right now sitting at about 1.343%. andrew >> thanks, becks pair of apple headlines, a patch to fix vulnerability related to

the iphone imessage go to general, software update, hit the 14.8 ios that's how you do it my mother was probably looking to figure out how to do it hopefully now she knows. apple expected to unveil new iphones, apple watches and air pod models today what it's calling it's california streaming event we'll talk more about that later this hour with tech investor dan niles. ark invest cathie wood i spoke with her yesterday at the salt conference in new york. here is her take on bitcoin and ether. >> we believe that the price will be ten-fold of where it is

today. so instead of 45,000, over 500,000. confidence in ether has gone up dramat dramatically, as we've seen the beginning of this transition we still probably would do 60% bitcoin, 40% ether. >> crude oil prices extending gains on fears that hurricane nicholas, now tropical storm, will disrupt output even as gulf coast energy operations work to get back online after hurricane ida. you're looking at wti accrued crude at 70.74 right now that dump ed more than a foot of rain along the louisiana coast and flash floods to much of the deep south becky? >> just under 90 minutes till the opening bell on wall street. dominic chu joins us with looks at the premarkets. what are you seeing this morning, dom >> a look at shares of coin base

right now, biggest crypto currency exchange. premarket getting some help from analysts over at piper sandler who reiterated their overweight rating that implies, by the way, a nearly 40% gain from here, saying the recent selloff in the shares is overdone and the bull case remains intact speaking of crypto kurchsys and cathie wood's comments, they're on the move this morning senate banking committee 10:00 a.m. eastern time, expect ed to address and face questions from the agency's plans to possibly regulate crypto currencies and some of the moves we've seen as of late, including the situation with walmart yesterday as we do this hour, most popular ticket ticker searches the dow jones industrial average number three, tesla number four and then, of course, moderna

always a top ticker search, number five. joe, as always, the rest of them are up on twitter at the domino as well as highlights from the top 50 back over to you. >> 421, unbelievable, for moderna, dom thank you. >> you got it. house democrats outlining a series of tax hikes intended to pay for $3.5 trillion social safety net upgrade house, ways & means committee corporate tax rate of 26.5, top individual rate back to 39.6 and includes 3% surcharge on individual incomes above $5 million and capital gains rate would be set at 25%. joining us live on the set here for his party's view of this proposal is house majority -- house minority leader. that was a deliberate slip we were talking, you think that's possible in 2022. i just want to say, we're up here because we have certain guidelines for covid and becky and andrew are ready and raring

to go. so, get ready. >> we're all vaccinated. >> oh, yeah, we're all double -- >> we believe in it. >> i got vaccinated in january, the day -- somehow i lucked out, the day i was eligible good news was i got the vaccine. bad news was i was eligible because i was 65. >> what vaccine did you take >> two modernas. >> i got pfizer. what's amazing is you have more choice than one. when people know the science behind it, people should be vaccinated. >> i was almost going to use a prejorative and say what the f is the problem with -- get the f'ing vaccine? what is the problem? you don't want covid, do you >> it's the way we deliver it, too. it should be a reward for people to be vaccinated. >> the reward is that you don't end up intubated in the hospital with a mask on, where you don't ever have the mask come off. up in heaven.

>> don't hide from the science let people understand it, and i think they'll make that decision. >> it's weird. i've never seen anything like it. >> i'm proud of the fact that our country was able to produce not just one -- >> that quickly. >> that quickly. they will write books about this here is something that came from china. we didn't invite it or want it we're defeating it if you're anywhere else in the world you don't want to take a vaccine from china or russia you want one from america. >> after a year of abject horror where you of people my age -- i don't have any underlying conditions but i was on cloud nine on the way out to the place. >> with the new variant you have a higher probability of being hit by lightning if you were vaccinated than going to the hospital if you were vaccinated. >> let's move on here. when you finally saw the nuts and bolts of what the democrats are proposing, versus doing some type of gazillionaire getting at

wealth keeping with income, not drawing carried interest this is what they can get through with manchin and sinema and the moderates? >> it goes much further. it's punishing people who produce things you don't like and rewarding people with things you like it's the wokism of tax tacks are a redistribution of wealth you take something from somebody else and you think you know a better place to invest it. when you look at what they're doing, they're guaranteeing an income to 90% of americans with no requirements. you don't have to work for the child tax credit they've taken away social security but if you make $800,000, now they'll give you tax credit to go buy tesla it's backward. the biggest fear i have is the global minimum tax, they'll make jobs leave america it's going to be about 19% all these companies, to sell in another country, are going to leave.

remember, structure dictates behavior our tax code will dictate the behavior of what you do. after the 2017 tax code we created more jobs, corporations came back to america it's making america less competitive on the world stage and we're on a world stage. >> how do you think that republicans should approach it should they question the effectiveness of the social programs that are being proposed or the climate change proposals that are being propoesd or should they question the other side and that is the way the revenue is going to be raised and the effect it could have on corporations goldman sachs. >> will america be stronger, will we be better off and will our economy be stronger? all those answers are no in the world of inflation now, this will propel it even further. we're not talking about $3.5 trillion, we're talking about $5 trillion because the infrastructure is on the other side that is the amount of money we spent during world war ii. >> would you do the infrastructure

would you toughen up levees, harden grids, fix bridges? >> i would do infrastructure on infrastructure that infrastructure bill is not about infrastructure i would reform epa, make sure it gets built less than ten years and invest in roads, bridges and broad band. >> if you could do the $3.5 trillion in a perfect world and it wouldn't cost anything, are those programs something that republicans would want child care, expanding some of the -- human infrastructure, in order. what if you could wave a magic wand and it would be free, would you still not want to do it for people >> i want to do things for people that need to happen government shouldn't do everything for you what they're doing is taking away the incentives. child tax credit, republicans believe in a child tax credit but they took away requirements. you don't have to work do you know what else they took away you don't even have to have a social security. who are you benefiting beyond americans i don't think we can afford to do that. this is money taken from somebody else. this is money taken out of the

hands of americans and put some place else the more resources individuals can keep, that they are better determinants of where their money goes. >> last time you were on, you made even other -- there's this other gentleman who calls himself the "morning joe," although his name is charles his name is charles and i've been on longer than him in the morning, okay. but they ran the clip of you saying, "over my dead body," the most incendiary thing. how are you going to stop it they can only lose three in the house. do you have anybody in the house that's wavering, come to your side >> there were ten democrats who signed a letter who said they would not vote for reconciliation, $3.5 trillion, unless they had infrastructure first. they folded in less than 48 hours. >> josh was on yesterday he said he didn't fold, he said he got everything he wanted. >> you can't even do that with a

straight face. not only did they vote for it, you didn't even get it debated on the floor and they never got to vote for infrastructure it's the worst fold i've ever seen if three democrats vote no, it still passes f four votes no, it fails. remember what the constitution says all tax reform starts in the house. all they have to do is stand up and say let me read the bill that will slow it down i believe there's an opportunity we can stop this. >> and on the senate side, what -- do you think that manchin is -- like senator schottheimer, do you think he will fold? >> i don't hear from manchin or the other democrats saying they're opposed to doing something. they're opposed to 3.5 they're in negotiation mode. so if the house gets something out, whatever the house gets out probably won't be the final product. remember, you still have to go through the bird rule in the senate they can knock other things out.

>> right. >> whatever the senate eventually decides, the house will have to either just pass or not pass anything. >> do you think given the events of the last month that there's less political capital that president biden can wield at this point >> i don't know what political capital he has i mean, i've been in the rooms, watching on both sides of the aisle, look at this administration this is the first administration in history that made a fun fundamental decision that you're going to leave americans behind and decides to talk about something else what is their plan there are still americans there. it's appalling what has transpired no one is proud of that if you're in the democratic party how can you? >> they've implied or i've heard they implied we have a very quick news cycle here in the united states and by the time 2022 comes along we won't be thinking about afghanistan do you think that's true >> i think people will be thinking about it, because world leaders i talk to, they're recalibrating what they think about america. they're recalibrating of whether they reach out to china or not

this is going to linger past '22. i think this is going to be a 20-year problem he just created for us and then to be able to look over the horizon, you don't have the capability of leaving bagram and the prisoners that were released -- he has got much more problems just in that. the border, inflation. the serious problem a president has is the ability to manage a crisis he ignores the crisis and passes it on to someone else. if he's mismanaging every crisis, we've got a severe problem. >> andrew? >> nice to see you i've got a bunch of questions. i actually want to go back to the beginning of the conversation you were having with joe related to vaccines i know that you're a believer in science and believer in the vaccine. but at the same time, i also know that you tweeted out on sunday, in all capital letters, three words. you wrote no vaccine mandates. and i appreciate your view about

no vaccine mandates in the political realm. my question is, there are a lot of business leaders that are trying to mandate vaccines, want to and, frankly, actually want the air cover of the political class to do it because they're worried if they don't have the white house and they don't have washington behind them, it's going to be harder can you speak to that? >> yes i don't -- today, you had about 90 million americans a month ago who were not vaccinated. 40 million of them actually had covid so you're dealing with 50 million. if you have not been vaccinated yet, you had questions, you had doubt. i don't believe in a punishment method to get somebody to do it because it will create more doubt. if you remove information from the internet where they can't have all the information if you say you're vaccinated, you still have to wear a mask, even though the science doesn't say it behind it that is no incentive to get vaccinated i would take a much different approach i'm going to start reaching out.

i'm a believer in this i would show them all the information. let's get to that point. we were in an economy that when you walk into a restaurant, they don't have enough workers. if you're trying to move transportation, they don't have enough inflation is driving because salaries are going up because you don't have people to work. then you're going to come in and mandate? we're going to have hospitals shut down today that you can't have a child in a certain hospital because people aren't there to work. you will have health care workers who are not vaccinated. >> leader -- >> you're creating a fundamentally bigger problem and greater fear in the vaccine instead of bringing the information to get more people vaccinated. >> couple of things. >> yeah? >> one point of fact in certain circumstances, even if you're vaccinated, wearing a mask is actually the right thing to do, especially around unvaccinated people if, in fact, you will then be encountering people who are not vaccinated. >> then why don't you say it that way why don't you say if you have somebody elder ly, if you have somebody that's more -- then you

should wear a mask what happens is when you mandate that, if you're vaccinated -- so a person who is unvaccinated, that's our target market that's who we want to get vaccinated. >> right. >> if you create more hurdles and no rewards for doing it, it's less likely to happen. >> i assume you also appreciate the point, there are people who read your tweets, who don't want to get vaccinated and say, right on that's the right decision. >> yeah. and right on don't mandate it, but go get vaccinated i've been vaccinated and i believe in it. i encourage it. >> but you appreciate the mixed message that can reflect to certain people >> no. >> who are going to take away what they want from a tweet like that, right? >> the mixed message right now is of how you're delivering it what i firmly believe is when you mandate something, when you don't reward somebody for doing something, you're going to get less of it so the process here is what the government is doing is taking more information away, not providing it to all the people we're talking about people who are not vaccinated today

let's give them an incentive to be vaccinated instead of actually creating -- >> do you support private enterprises mandating vacci vaccination? >> it's the private enterprise let them do what they want to do that's called free market. >> leader mccarthy, what information is being taken away? what do you think is being taken off the internet >> i watch time and again -- i would sit down and i would allow individuals to have all the information. >> information is one thing. misinformation is another. what information is being taken down. >> gottlieb is on your show. i love to sit back and talk about it do a question and answer time instead of sit down and say you've got to do it one way or the other. if you're sitting in america today and you are not vaccinated, you've got some doubts so whynot let them ask a question and answer the question >> i think we've had months of that, though these vaccines were rolled out last year. >> leader, before you go, i have one final question --

>> we can attalk tax, too, if y want to. $5 trillion in taxes from the government. >> one of the largest companies in the world and largest companies in your state, apple, in this epic fight. >> i believed it was going to be named 13, too. >> but very interestingly, the judge in that case citing not the sherman act in terms of anti-trust issues but actually citing the cartwright act, a california state law suggesting that they are using their influence unfairly do you agree with the judge? do you agree with using california law on a federal level? >> i believe in a state's effort, but i can't give you official word. if i looked from a macrolevel, 30,000 foot level, federal case using state law, i would have real questions about that. >> you think 2022, you could be maybe the -- the republicans

could take back the house. 2024, will trump run if he doesn't, who will in your view >> 2024 is a long ways away. if the election was today, i saw a recent poll, he would beat president biden by a wide margin as i go across the country, the number of people who i hear that were upset about his tweets but now love his policies wish they had him back that's a long way away if he doesn't run, we've got a big field that can the democrats' field is cuomo, gavin newsom and maybe after today neither of them. >> cuomo and gavin newsom, okay. i get it leader mccarthy, thank you. >> thank you. as californians go to the polls in a hotly cteedo

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[music stops] and release. [deep exhale] [fast upbeat music resumes] [music stops] welcome back to "squawk box. this morning, california governor gavin newsom will try to survive a recall vote today recent polls suggesting new some

will beat the 46 people challenging him. nothing is a given until voting closes our next guest says california has a problem. he left the golden state for texas. he won't be voting a state he believes supports its businesses more. going to get right into that right now. joe lonsdale is here managing partner and co-founder of palantir. you can't vote on this one, joe, right? >> i'm not allowed on this one anymore, that's true although i hear that's not a problem for a lot of people. >> so let's talk, though, about what's happening in california and whether you think the move is permanent you moved, but there are a number of people who have moved to texas or moved to florida and said i'm going back, actually. >> there are a couple. i think i have at least one friend who loved the bay area too much listen, we're about to throw some shade at california, which it deserves. i'm a patriot. i would much rather be in california than china.

it's not banning gay people from tv, it's not disappearing billionaires maybe it would like to, but it's a lot better place than a lot of parts of the world there are some serious incompetence problems, serious special interest problems. it's tough if you're in the middle class in california, driving an hour to work in the major economic centers there's a lot of incompetence that needs to be addressed there. >> and you think gavin newsom can do those things? >> you know, i think the legislature is the bigger problem. i think he gave in to the teachers' unions, powerful interests that were somewhat misguided this last year people are angry at him for it but i think legislature will have to be fixed is the bigger problem. the important thing right now, you said there's a recall today. unfortunately, there's been a recall where they changed the rules and sent ballots to house s the last 30 days and the unions are going door door and helping in poor areas and they're allowed to harvest the

ballots and turn them in to you. it's not a conspiracy. it's ridiculous how they changed the rules. it's unlikely he loses, given the shift in the change of the rules. >> think of the politics in texas. >> i think overall texas is a much better climate for business not all of us agree with the governor's recent bill that's really controversial a lot of people respect to pro-life, lot of people are p pro-choice but what really matters in this country is where is the government competent, where is government letting people build, where is the government letting people have good lives in the middle class versus getting in the way and interfering with stupid rules top/down? those are the things we tend to focus on. >> do you imagine states like texas actually politically shift over time? i'm not -- this is suggesting fully necessarily shifts from being red to blue, but maybe becomes a bit more centrist?

as a function of this pilgrimage, if you will? >> it's interesting. if you look at the numbers, at least so far, people who have moved here are more on the pro-liberty side i saw a study that ted cruz would have lost his senate election a few years ago if you didn't have people moving from outside the state the last 20 years. people self select a certain way on average here. either way, you know, i wish things weren't as much about red/blue i think it's much more about competence versus incompetence in society that's functional and where special interests don't run the governments. there's issues in every state but texas is doing very well overall on that measure. >> if you were gavin newsom, what would you do to get you back could he get you back? >> if i was gavin newsom, i would find a way to ally with moderate democrats i would call out some of the really obviously corruption that's going on with special interests in california. i would call out the problems that we've created by not allowing us to build homes, by not allowing small businesses to

operate in a much more free environment. california is ranked 49th in the country by a lot of different metrics for small business and i would make it a place that could have a functional middle class. i don't want to bring up my family in a place where there's a bunch of wealthy people and a serving class. that's not how a state should be structured. >> joe lonsdale, great to see you. you have a podcast called american optimist that i've been listening to, that i've been enjoying. >> thank you trying to get more people to be optimistic to see how america can be pretty awesome. it's not all negative. >> pretty cool joe, good to see you. >> good to see you take care. becky? >> rick santelli is standing by at the cme in chicago. he has breaking data take it away. >> consumer price index, probably the most important inflation gauge for the month of august .3 lighter than expected and the .5, of course, was one

of those numbers that started to creep down with the high-water mark was up .9 if we strip out the all-important food and energy, it really moved back down from up .3 to up only .1. up .1 is the lightest it's been since february we started out the year at zero. now let's go to the important year over year year over year, cpi up 5.3%. 5.3. that's .1 lighter than 5.4 and 5.4, our last look, was the highest year-over-year reach since 2008 finally, strip out food and en energy, you're left with year-over-year read of 4%, follows up 4.3, and that followed up 4.5, a june number, the highest in 30 years. you can see, becky, we've eased off on the year-over-year, which is still high. i can honestly use the word transient. what's transient

most likely the effects of the delta variant that are keeping prices from accelerating faster amongst suppliers. when all the dust settles one, two, three years down the road, is that apartment rent going to go back to where it was? is the price of a car going to go back to where it was? most don't think so. the sticker shock of that, we'll have to wait to see the effects on the general population when all this passes us by. back to you. >> rick, just watching the dow futures jumping on this, they're now indicated up 125 points above fair value that's the market thinking we're kind of anticipating that the number would be up at least .4% and likely hotter, based on the series of numbers. maybe that means there's less pressure on the fed move immediately? >> you know, we could debate as to where the pressure is going to be on the fed my own feeling is that jay powell and company know full well that most likely the delta variant effects will be on the

downshied at this point in time. and i do think that they could continue to talk about what they're going to do and keep us all busy, and kind of shift our focus from a more real time to a more down the road but in the end, the fed knows what they have to do and the european central bank knew what it had to do and it didn't and the market response was rather swift although their interest rates are stubbornly high, despite the fact that they want to keep the pedal to the metal on stimulus. >> rick, thank you very much we'll continue to watch this steve liesman joins us with more on his reaction to these numbers. what do you think? >> good morning. i think rick has it right. i think the fed has had it half right. what's happened is some of the initial surge in prices that came with the reopening, airline fares and used cars, they've used off and eased off quite a bit. when i look at the used car prices, they are down 1.5% they had risen 32%, 10.5%.

then they started to fall. that's declined. airline fares down 0.1%. that was the initial surge but here is the deal that we're still waiting for. rick has it absolutely right that you might have some decline here in prices because of the covid surge. what was expected to happen was a transition from price increases in the initial reopening to price increases in the services sector. you might have had some -- a reprieve now in the service sector price increases because of the surge in delta, which means it's yet to come so, powell is right. we did have some transitory factors that were part of the surge in inflation, but we may get another wave on the back side of this, especially because what we're watching is shelter prices shelter prices up 0.2% given what's happening with high prices in real estate, those are going to surge in the months ahead. i don't think we're out of the woods. and i think it takes maybe some of the pressure off the fed to act this month but i still think

it's a possibility that they do announce that taper. >> rick pointed this out if you're looking x food and energy, it was up .1%. that tells you a lot of inflation is coming in things like food prices, fuel prices. cathie wood spoke with andrew yesterday, last night at the salt conference. she was talking not about inflation, about deflation she thinks technology is a big part of that that's what she told andrew, technology will keep those prices down. but it won't help with a lot of things probably like fuel and food. >> no. those things are specifically almost immune in some cases to effects from technology. but you're right, becky. there is a whole series of other thi things, by the way, that the fed is counting on that could keep inflation in check a surge of input costs for businesses what do they do? pass some along. that's the easy way. one of the ways they can decrease costs is let people go

but look for more productive assets that's why the surge in inflation also, you know, makes you want to spotlight, highlight or think about these technology companies that provide a way for businesses to respond to higher prices without passing them along by increasing efficiencies it is one of the reasons, becky, we've seen some increase in productivity in the economy during the pandemic. >> again, the futures really up on this news dow futures up 135 now s&p futures up 17, nasdaq up 57. we were in negative territory before we got these softer than anticipated inflation numbers. joe? >> all right, beck, thanks. coming up, brand new outlook from boeing on its commercial airline business we got these numbers a short time ago we'll bring them to you. next, stay tune d -- that's coming next. stay tuned you're watching "squawk box" on cnbc

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welcome back to "squawk box. fut futures, as you can see, are sharply higher they added to their gains, following those numbers we just heard about from rick, up 127 points right now after 260-plus points yesterday and you can see the nasdaq up

57, s&p indicated up 17. news from boeing on its long-term commercial plane outlook. phil lebeau joins us now h hey, phil. >> hey, joe. take a look at the long-term projection in terms of commercial airplanes and demand for those. this is the global fleet today, or actually in 2019, before the pandemic 25,000 it's actually going to double worldwide by 2040. when you look at the regions where the new airplanes will be delivered -- this is not just for boeing, but airbus, the entire industry, it's pretty evenly split between the four largest regions in the world the chief strategy officer for boeing says that a big part of what is driving all of this, at least over the next couple of years, will be aircraft retirement here is what he had to say i am told we do not have what he had to say we talked to him yesterday and said you're seeing a big surge in the number of retirements quickly take a look at boeing and airbus over the last couple of years going back to the

pandemic and usually these guys are trading in tandem. that's what we're seeing here. no surprise airbus is doing better than boeing, given the fact that boeing has had a number of issues with the 73 max and now the 787 dreamliner that is the projection at this point that we will see steady, continuous growth and basically a doubling am the global fleet over the next 20 years back to you. >> right now, do you think that airbus will continue to have an advantage, phil? kills me. >> on the narrow body? >> for the near term. >> in the near term, they do have an advantage because you have boeing that is still get ing back from the 737 max. it's lost a fair amount of market share there remember, the max is not flying in china right now that doesn't mean that chinese airlines are abandoning boeing they're not doing that, but the longer it takes to get the max

back into service in china, th greater the opportunity it is for airbus to say to the chinese government, look, take a look at our a320 they already know about the a320 it's not like it's an unknown quantity certainly right now airbus has an advantage in terms of the narrow body market. >> it's so important you think american industry and, you know, there's only three or four companies like boeing that you can really -- i mean, there's tech, obviously. >> you're right. >> but just in terms of american power and strength globally in the industrial area. it's an important, you know, important american company that i hope does well. >> you're 100% right i don't think anybody would disagree with that, joe. nobody would disagree with that. >> all right, phil thank you. andrew coming up, when we return, top investor dan niles on today's apple product announcement will shareholders cheer or yawn?

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you can't be in two places at once. let posh answer. posh virtual receptionists. apple enthusiasts the world over will be watching as the tech giant produces event called california streaming joining us to talk about the

business and possible stock impact is dan niles, portfolio manager. dan, you've had a pretty big reversal on apple and has take en place in the last week or so that you've been acting out on it this went from being one of your biggest long positions to being one of your biggest short holdings why is that? >> becky, two things going on. apple has a distinct trading pattern where in the month leading up to a new product launch, the stock is up about 76% of the time, which is pretty h high, with good returns. and then the day they actually do the product launch, the stock is actually down about 76% of the time and struggles for the next two weeks so it does a run into the event and then stalls out. and so, you know, that was one thing, the tech nical pattern. it's very consistent but the bigger issue am my mind was the following. epic ruling coming up, which would go after their app store

revenues and then the final piece, which is the fundamental portion of it, which if you look at their revenue streams this company benefited tremendously from covid mac sales, ipad sales were down year over year before covid started in december'19 in the march quarter, both of those businesses were up 70% plus year over year. same thing with iphone iphone was down four out of five quarters year over year before covid. in the march quarter it was up 66%. people were at home. i bought a mac for my kids, bought an ipad for my kids that were studying at home. so a lot of that stuff is going to reverse, like we've seen with streaming, with netflix, with e-commerce, with amazon. you'll see the same thing with apple when you get into the september quarter, december quarter and those results come out as you back off those numbers. don't forget, you know, smart

phones, unit sales were down four years before covid hit. so, you know, you already had lengthening replacement cycles new iphones coming out, they'll have tweaks to them. it's not revolutionary like the 5g launch was last year. >> dan, it's one thing to say, okay, i don't want to hold this stock anymore. i think it has seen some of the big gains and may have a tough sledding ahead it's another thing to hotter it. that can be pretty tricky and something that takes an awful lot of guts to go through with how strong is your conviction on this and how long are you willing to ride this out if the stock does trade higher after the event? >> you're 100% right, becky. obviously in the age of mean stocks and game stop, you have to be careful. it makes me feel relatively good about the timing of this, there's a good shot the fed next week says you know what?

we met the dual mandate, are getting close. we plan on tapering later this year and i think that's going to start the process for removing all the stimulus we jammed into the market it's pretty simple you look at last year, the pandemic started s&p was up 16% on a price basis. you look at this year, the pandemic is continuing s&p is up 19%. average return since the 1920s for the s&p is 6% a year so, either you believe a global pandemic is three times as good for the world, or something else is going on, and that something else is stimulus and it affects the biggest stocks out there as well as game stop and amc i think the timing is pretty good for putting it on as well. >> we did get the cpi numbers, consumer price index, that showed inflation was not quite as strong as people had been anticipating that's the first time we've gotten a weaker-than-anticipated inflation number in quite a while. steve liesman said that could

take some of the pressure off the fed in terms of having to taper or make that decision this month. futures are up right now dow future is up 140 after being negative just before that number does that change your conviction about the timing on this or does it matter if it's this month or next month? >> to next month >> to me it doesn't matter that much because the backdrop is valuations all-time record lows, then you don't care that much, but if you look at, you know, a variety of different valuation metrix, all with the exception of comparison treasury yields, all near 90 to 100 percentile in terms how expensive things are our favorite, market cap to gdp for the united states stock market, that measures up at two times. put it in perspective, the peak of the tech bubble, 1.4 times and the 50-year average is 0.8 so valuations are already at record levels, and you've got negative things coming up. i think you'll see a lot of

companies talking about inflation affecting margins, and this may be the first time this year where you actually see estimates with the s&p starting to lower don't forget the delta variant also causing a little slowdown in areas like, you know, travel and you saw it with the airlines saying things will be a little worse leisure, et cetera so i think you have that combination of higher inflation, and you've got a slowing in potential estimates. that's a really bad combination when you've got market valuations at all-time record highs. >> dan, are you short the s&p's too or just apple? >> we actually have, about as many shorts as we have longs right now, and our entire portfolio. we're trying to actually, you know -- we trade every day, but we're trying to have as many or more shorts than we have longs at this point, we believe there's a 10% to 20% correction before end of this year coming as that stimulus gets removed.

to put the stimulus in perspective, becky, for your viewers. you have 3.2 trillion in fed stimulus over 11.5 years prior to the pandemic after the global financial crisis you had $4.2 trillion balance expanse in 1.5 years since the pandemic you increased daily amount of stimulus by almost 10x and why you have gamestop, amc, cryptocurrencies and it affects the biggest names as well like apple and that's why we're very nervous to see what happens. >> are you short s&ps, too >> yeah. we're short a basket of s&p names. nasdaq names as well as well as individual stocks like apple >> dan, thank you for your time, and we'll check back in with you, you mentioned you're trading every day. see if you change your mind on any of these things but thanks for joining us good to see you. >> thank you, becky. let's get to jim cramer at

the new york stock exchange. >> whenever we have an apple day, something that, you know, certainly makes the headlines every time always incremental seems recently, jim, but usually there is a lot of excitement just around anything that has to do with that whole ecosystem. monopoly for me. got it right here and andrew showed me -- it worked immediately. upgraded while the show was on to get rid of that problem, jim. did you do it already? >> no. do it soon as i get over to -- this is unusual. a very big decline in apple because of what happened with the lawsuit. a lot of other times, unlike that, the stock run into introduction, this time stock is down in introduction, i actually believe is quite bullish much as i love dan in terms of trading major, might be getting an opportunity you simply wouldn't get i like apple very much i think a lot is going right with apple

i think we're in a difficult period for the market. the lack of news itself has made it so that there's just -- i think scrutiny on anything that's at all up, and i find that, i don't want to throw up my hands say, what do we do here i do want to say we're anxious going into september, the last 20 years it's been bad 20 we'res. people pretending it's not bad i can't do that. >> market held on to its gains yesterday, jim, but after -- well, it's been, i feel meandering around about six weeks, maybe longer already. you nevershort a dull market right, jim >> no. nasdaq was down, and semiconductors going into the apple cell phone were up and everything looked awful. when you see a kind of the faang rally to get that back on firmer footing, i do think also we had this -- in the new york stock exchange, in the dow, got

another, another word that, you know what? covid's peaked how many covid peaks have we had? >> yes right. >> how many covid peaks? right. >> hopefully -- >> it's crazy. >> -- this is the last obviously. never know with the variants jim, the cost at goldman and looking at the tax plans and what it would do to corporate profits or gdp do you spend any time crunches the numbers or just follow the companies themselves >> i love this stuff devouring a piece of labor as parsage how much and where's the profit margin, but i think, again, just not as important as -- there's just such a dearth of news we focus on. cpi number worth focusing on. much better than expected. i've been trying to understand i know phil lebeau had a good piece about boeing reading that testimony and maybe some boeing, an awful stock. maybe they can come back

in the end, go the to tell you, joe, absence of news to me is negative, not positive. >> negative. okay jim, thanks. >> yeah. >> talk more about that. >> thank you. >> see you in a couple minutes. coming up, ahead of the openg lln lltrt.inbe owa see [music: “you're the best” by joe esposito] [triumphantly yells] [ding] don't get mad. get e*trade and take charge of your finances today. (vo) while you may not be running an architectural firm, tending hives of honeybees, and mentoring a teenager — your life is just as unique. your raymond james financial advisor gets to know you,

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a final check on the markets before we wrap up the show here on "squawk box." dow opening about 80 points, and s&p 500 up about 13 points and a tenure note as we speak right now. you can look at the ten year, 1.328. which also talk crypto, maybe. show you where bitcoin stands now. 46,573 dollars spoke with cathie wood yesterday at the conference and we will be there tomorrow morning, by the way, with ray daflio and many others cathie saying five years out bitcoin ten times the price it is today mark your calendar at mark it at 460,000. what do you think? >> cheap, then >> is it >> i have no idea -- i don't know i don't -- you know what i don't know. i went out on a limb once.

if you do the -- pick a number, divide it by 21 million. see what you come up with. >> i was going to show you the price of oil given cathie wood and her views about tesla, we won't even need oil. so, there you go. >> the grid, though. >> power the grid, we do have to nice to see you. >> nice to see you guys. >> see you tomorrow. make sure you join us. "squawk on the street" begins right now. good tuesday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber at the new york stock exchange. and core cpi, less than expected futures up on news and cpi data shows inflation less hot and that's than forecast in august. >> and