we've been looking at cryptocurrencies, which is down even more, but quite a start to the week >> somebody has a bad case of the mondays. >> it will be a day to watch, to see where things go, whether there is in dip buying that comes in. >> we will see you back here tomorrow morning, but stay with this coverage. "squawk on the street" starts right now. good morning monday, welcome to "squawk on the street." we're live at post 9 futures indicate a near 2% at the open we have the fiscal cliff drama in d.c., the ten-year yield, and europe is having its worst day of the year. we begin with contagion fears spooking stocks as that september slide intensifies. >> one reason, of course is

china's evergrande it's a chinese property giant, and the debts, they top $300 billion. it does risk defaulting on a payment deadline this week. pfizer says the covid vaccine is safe in kids ages 5 to 11. jim, we'll start off -- even though we're keeping it creative on the seating arranges -- on the sell-off, which i have been eye fog several weeks now. >> i've been saying the sell-off will begin, and i was introducing -- that all bull markets are happy, but even bear mark is happen in its own way. this problem, this $3 4u7bz billion debt is an issue, it has been an issue for months, but we always felt that the prc, the government, would bail them out. david, what this seems to be is a recognition that, when the

nation's richest man, which is the person who owns evergrande, is in trouble, we no longer expect the chinese communist government to bail them out. >> it's been what's happening them in the last six months, over a year actually. >> it's been a slow train wreck. >> it's not like we haven't talked about an overneated market in china for many years this default could be the key one, or this was undermine the entire financial, the chinese figure out a way that somehow. banks continuing on, and those trying to make good on debts by giving people and/or vendors, what is it, empty apartments

that aren't even finished. >> parking spots we sill he and talk about how the united states is not allowed into china we're not allowed to be part of china, about you which china goes bard, suddenly we're involved i'm sorry, look, with you know we have to deal with three or four days of people who don't know what they're talking about, coming on, talking about contagion. all i can tell you is, we wish we had contagion we're now allowed in our banks are the safest, because we've been told by china forever, good luck, you're not coming in. i am going to say, this is the playbook silver lining, even though the eagles look terrible dish while i regard -- they need us so badly, but we're not going to play, because there's no reason to. >> i hear you talking about the relative safety of u.s. versus

china, jim, but how do you fold in the evergrande certains can stagflation concerns, what it does to the fed meeting this week, obviously the dance between manchin and the white house and the house? >> look, all of that it negative so is the debt ceiling when you have people like janet yellen saying this could be catastrophic, you talk about the s&p being downgraded, causing a 19% sell-off, i look at this moment as being faux perilous, i say faux t. all of this could be contained by responsible politician then you know what we have to suffer through this period, david, where we can't get anybody to work, hopefully they don't create even more jobs where we can't find anybody to work, and then we deal with it,

but we have to go through it first. >> it feels look more showdowns about the debt limit than china. >> 80 in the last couple decades. >> but at the same time, if it were not to happen, do you not believe this would be a significant moment that would be potential bad? >> yes, and that could cause a bottom since i've been negative for so long, i'm knoll not looking for a rally. we come in this morning, and suddenly this loomic crisis all over the globe, with the exception of the united states, because we're much more hostage to whether we'll race rates, and what is this evergrande? they own 1.5 million apartments, the apartments are empty they have asked the employees to pay -- this has been going on forever, but it hasn't been part of our lexicon, because we're so busy talking about how the

chinese are saying stay out of our markets. this is as negative as the idea of the debt ceiling. once again senator manchin this weekend and now some other moderates, are saying maybe we shouldn't have an infrastructure may we have to be saved by earnings, but this is a moment a 20-day period that started last went that is historically the worst period for 20 years, so we should not suddenly wake up and say, you know what it is time to buy amc entertainment. [ laughter ] right? how much dead? >> a lot. >> they have a lot of debt. >> but the movie slate, and the people involved -- now, carl, this will be an interesting moment we have these people, they call themselves apes.

where is jane goodall? where is jane goodall? is she going to bail out these people is this her moment. >> i don't know what she thinking of silverbacks. she'll gone gori-- done gorillas we'll have to see how that competes with the other narratives. we'll talk about the pfizer news after the break, jim, but that's one bit of good news to look forward maybe a monday or so if there's a possibility of millions of young kids vaccinated by halloween? >> by the way, there was an odd vote on friday initially pfizer wanted everybody to get the vaccine and presented no data, but then suddenly they presented some data for people who are older

than -- in the 60s, but let's say we get vaccinated, we're now the 40th most vaccinated -- that's kind of negative, but then we start having more people come to the workforce, and it is 5 to 11-year-olds being vaccinated, one of the reason i think people not going to the office, is concern for their children's health, so employers a are frustrated, and a lot of, at least the concern they have -- i'm not real worried, but i'm worried about my kids. by the way, we should point out, guys, this hag -- our seatings arrangement has nothing to do with virus property -- protocol. we have a lighting issue on our

main set. >> carl, there's a chinese auto company that was very big. why? because covid and chip shortages. now, these are the things -- maybe we can knock on the covid, but the chip shortage thing is still with us. we can't seem to be the chips that we call full feature going, but you know what? all these things i'm talking about, shouldn't they mean that general mills that that does well there's an upgrade about colgate. by day four maybe people are saying, maybe we buy in pfizer here it's not today, but it's coming. >> that's interesting. by the way, the trial, about 2300 kids ages 5 to 11, safe and robust response, they'll smith for an eua as soon as possible here is what board member scott

gottlieb said on squawk this morning? >> pfizer is in a position to file quickly the data came earlier than some were expecting deng on how long the rue vie takes, you can't have a vaccine available to children as early probably by the end of october, perhaps it slips a bit into november >> it's two doses, the same vaccine, but a smaller dose, three weeks apart. they did add they did see fewer side effects than, for example teens have gotten, sore arms, that kind of things. >> this is one of the things we get excited about it. >> people in the northeast i think will go for it, and then, david, people in the south -- remember we have a sizable people who just don't think this works -- well, they have a million reasons not to give it to kids. can we accept the fact that we now have a situation in this

country where basically half the country thinking -- >> it's not hat. >> the numbers would indicate 25%. but that's an enormous amount of people. >> we don't know this feel get shot two, and i just say what is holding us back are people who, for religious reasons -- i don't know what the reason is, about you it's not in the old or new testament, but more importantly, there are people who think this is a democrat vaccine. >> right >> not a republican vaccine, but a democrat vaccine. >> we have talked a great deal about resistance, and it's unclean how much progress you can make with the children of people who don't want to get vaccinated. >> this is something you've been talking about, people who are happy to take the regeneron

drug. >> once they're deathly sick that's not working well. >> it will potentially help, at least, dewith the back-to-work situation, which i do hear from a lot of frustrated employers, who anticipated bringing their workforce at least three days a week next month, even though many of those same employees are fully engaging in life otherwise, which raises the questions as to how many people want to come back to the office s. >> carl, this is a very rich person problem, right? if you go out to dinner, you have to presume there will be one server handling 20 tables, one bar tendser, because they cannot find people to work there. >> though i've got to say, broadway this weekend, packed house. at american utopia, where i was,

vax required, everyone masked up, but you're finding venues who handle large numbers of people discovering ways to protect people. >> i think there's a number of employers who prefer to have kept the mid-october date, and some have. that does create more economic activity, or at least some more, certainly for your central business districts around the country and the small business that is rely on them jim, people who are unvaccinated are as well. unfortunately we still have, what, 2,000 people a day dies? >> ours was 70,000 people at the eagles i had a mask initially i felt pressure not to wear one, because nobody else did. will we see an outbreak, like in

and out in 1918. >> delta is so contagious, as you know, it's not quite the same as the early onset of the virus, in terms of the ability to be transmitted even outdoors. >> i used to say what does it have to do with the price of bristol-myers -- >> if you're near somebody for a long time, not just walking down the street. >> carl, the one thing i would point out is you want to look at tech i am not hearing people saying you've got to sell microsoft, which has the best balance sheet maybe in the world because of evergrande, but there will be people on air, who will say this is the beginning of the big rollover i come back the other way and say this is the end of the big rollover, because the people's republic of china, if they want to do bail it out, they will

>> so that's what the impact has been so far. >> i like you kind of further away from me >> you do? >> i was close to 70,000 people. i feel safer now. >> i should be the one concerned. >> i don't know those 70,000 as well -- >> you may be up to your fifth shot by now. we'll kcontinue this conversation ether is down, and "squawk on the street" is back in a moment.

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global markets is continues to watch the situation with evergrande. >> reporter: we're going to find out very soon whether or not klein's second-- evergrande haso make interest payments, and later in the week on bonds the company has signaled it's been working very hard to try to raise money, but has been struggling to do so. the big question is whether or not the government is going to step in. so far the signals, including

through the state media has been that the government doesn't believe that evergrande is too big to fail. it has been wanting to discourage this type of excessive lendsing, especially in the private sector. the company itself is really representative of a certain type of company in china, a highly leveraged one that's been traditional, able to get access to credit, and expand into a lot of different areas the fear, though, of course, is that it could lead to a way of defaultses in property sector. the hope is that the central bank could inject liquidity into the market, but at the end of the day people are still concerned about what potentially could happen with the financial sector there are some estimates that have come out. capital economic has said that a

hit wouldn't necessarily be bad, but it would have abimpact, but it would be manageable they estimate that the cost to major commercial banks would be 1% -- so not particularly destructive, but having an impact in terms of the priority, most people think that beijing's priority is not going to be the banks, but actually would be more to make sure that small-time investors would be made whole, that homeowners are also going to be made whole as well that's the thinking behind what people here believe beijing is going to -- how beijing is going to move next carl >> eunice, thank you eunice yoon in beijing there's the bank and the financial aspect there's also the labor aspect.

they hire evergrande, almost 4 million workers, and have 2 hundred, 00,000 employees of their own. >> do we really need the people at the to be who are reckless? no, can they restructure the debt yes. we'll have a serious of bears on this they're right for 72 hours. >> they are. listen, those who are short certain names are going to be benefiting, maybe a little early to cover i talked to a couple of them, but your point is one i made as well, which is we've been hearing concerns about an over-levered real estate sector in particular in china for more than a decade. it doesn't mean it hasn't been true, but at least it's not yet come to the fore, it's a

controlled economy. >> it's a command economy. if they said someone to lose money, they'll do it if. this -- we keep sounding like it's the united states, like nancy pelosi going at it with manchin. it ain't like that it's a communist country let's own that and stop fretting, and put the bears on, let them have a good time, and then let them hibernate. >> jim, we'll gel more in a second, and count down to the opening bell f.t. just now with a story crossing that the white house will relax travel restrictions for vaccinated passengers from the eu and uk beginning in november we're back in a moment

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global markets watches china's evergrande, seasonality, technicals, fears about stagflation. futures week is off the session lows, coming off two weeks for the s&p, and europe is on the rst day. the opening bell is just a few moments away

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let's squeeze in a mad dash. our seating arrangement today, with carl not with us, is because of a lighting issue. >> i just haven't looked good. >> computers run everything. maybe it's a chip shortage >> maybe we look better, ring of fire -- >> you always look great starbucks is what you want to talk about tell me. >> last week, today we start

hearing that starbucks in china could be down as much as 20% so this one, which has had such a run, will be under a lot of pressure that said, here's another one. the chinese vaccine is kind of like our flu vaccine, eh, you want to take it -- so china does not have covid under control they don't have their balance sheet under control. we don't have the debt ceiling under control or covid under control. we have two stooges propping up each other in the meantime, italy, you can't get in what the heck happened here? >> also, as you say, china is an important component. are think any concerns about the chinese overall in not really, in that somehow it will impact

consumer spending? >> when they're -- they will then help the people, but we have to understand xi has an agenda his agenda is to -- it's robin hood don't buy robinhood off of this. that's more of a kind of analogy. >> i hear that opening bell, even though we don't see it, carl, so we'll send it over to you. >> there's the opening bet at the big board, arch are aviation celebrating a listing via spac fulton financial, a financial services holding company, as breadth is rolling in heavily negative, jim. we've been watching for fades intraday for the past couple weeks. what would it say if we got a bounce >> i would say sell the bounce i have to tell you, what we need on a day like today is a real good flying car spac >> and we've got it. >> i think it's arch, archer, of

course we talked about this a lot they renegotiated the price lower. flying cars, or otherwise really mobile flying taxis. i like to call them flying cars. >> the jetsons >> can we be speaerious it's not oh well. >> and i'm going to talk about it in a bit, guys. >> that's a segue. >> but we can't do it now. >> see this right here we have to -- have you ever done this show? we go through a lot of stocks. >> i haven't talked about tether yet, whether they own commercial paper from china do what you have to do. >> i'm looking at your lists, you have a lot of them we talked about adobe earlier. you did starbucks, but a lot of

others how about nigke >> there's a problem there with vietnam and covid. malaysia, another country important for semiconduct other, not under control. port of los angeles, not until control. there's a lot of not under control situation until we can get it behind us this is an opportunity to sell now. >> we're not seeing very many names in the green, but of the few that are, they include the airlines if the f.t. story is line, and we'll get an announcement today about travel restrictions loos loosening, that's a victory, particularly for london. >> if you want safety, for american tourists, you go to

europe, because you need a green pass don't go if you don't have two vaccinations, because all you can't do is stay in your hotel room even though those five-stair hotels it's still not phone. >> i look forward to going soon, and i'll get whatever vac nat vaccinations. >> and take dr. gottlieb's new book there >> the s&p down 1.37%. you know, i do notice, carl, as well crypto, bitcoin not get -- down 8% down. >> crypto, ether all getting

hurt this morning we didn't get morgan stanley's mike wilson, who has been calling for a significant correction he thinking a correction of 20%-plus is increasingly likely. he divides these paths into two parts, one he calls fire, the fed reacting to an overheating economic, and ice, where you get margin trouble and supply issue, and demand pull forward. he thinking the second part is increasingly troublesome. >> fire and ice, thunder and ligh lightning. a good couple running backs. i've been saying sell sell sell, but i'm not buying that negativity mike should have stuck something that's more negative, but not that much. we do have companies that are doing quite well we do have a bond market, david, that says you can't own bonds. we do have companies with unbelievable balance sheets, and they're going to report. i'm not buying the end of the

world scenario i'm not. >> i know you're not, and at the begivening of this month you did warn about volatility. >> if you have 20 years where this is the bad period, am i going to wake up and say, that's not true this time it's going to be different? no, no, david, no. >> okay. if you say so. >> thank you. >> i believe you it's been a while sing -- at least it feels like we've had a decline of that magnitude, and we're going to spend a lot of time on it it is connected to this giant property company that may very well default in china. >> yeah, there's two steel plants that are opening, so somebody deciding to sell the steel companies, you know what i want to watch, carl? a lot of the new investors they're in robinhood, they're in coinbase i think peel have to understand,

we spoke to gary gensler last week he talk about one of the biggest problems is the $60 billion black hole stable coin that's tethered, where they haven't told us what they own. >> my belief is they own a lot of chinese paper if you own chinese paper, carl, and you suffer from redemptions, and the chinese are redeeming, you have to watch crypto as being the weakest, and crypto then spills over to all the happy talk people who came in and said, you know what? crypto is the safest thing, it's blue chip, j&j, it's not, carl i'm urging some of the other people in these things, why don't you sit back and say, you know what? i made a lot of money and i'm going to wait. do you think there's any chance the young people will do that? >> i can't speak for them, jim, but i hear what you're saying. you do have bit counsel below 44k, at least nap co -- in a col

months >> you have to have kyle bass, and then once bitcoin falls never -- >> then we can bring in larry fink to -- >> larry fink did not have a big position in evergrande, >> no, of course not. >> i think larry is worth talking to. >> you have to book him. >> you can't just try to find him at lunch have you ever read his letters >> i have. i never had a conversation with them

>> jim, thank you. on a less dramatic take, we may mention apple, katy is calling the iphone 13 off to a promising start. >> some people are saying qualcomm might be laying off, there's issues at qualcomm all i can tell you -- there's never been -- david, you nose these companies. the competition to give you a phone is much more important than whether you went to the apple story. you know, david, that it's all about the phone companies. >> it is about the subsidies that they provide in terms of at least letting you trade in an exists iphone for a new one, perhaps a 13 at a very substantial discount. >> i'm getting one. >> are you

>> my superstar is dying. >> you have a very specific opinion about at&t i would not say it's a particularly positive one, unless things have changed in the last ten seconds. >> they are not going to. >> but they are going to complete the spin-off of warner. they have conceivably going to be fighting a one-front war. spending enormously direct-to-consumers, and the wireless wars, with two well-funded competitors coming at you so the idea is at&t will be more aggressive now >> when lenin said they would fight a one-front war. how did that work? at&t going to 25 >> i think it's clear, then he still has a relatively negative opinion on that name.

>> but look at that green, david? carl, there's green. >> verizon is up that tends to be a safe haven, given its yield. >> it won't be straight down we could get a whoosh. only then can we say it's overdone, but i think companies with a good yield will be bought, because treasuries are rallies, and therefore it's hard to find any sort of income. >> costco, we mentioned -- -- some utilities, some staples. >> it is a busy week, jim, of corporate meetings, and dream force, right crm, wells initiates over 325, more left in the growth tank. >> it's not the old business kind of scattered.

i'm following the oils, carl the oils have been runaway successes, and finally they seem to have cooled, but i don't trust the cooling. i think the chevron, the dividend is safe david, can i just get your attention for a second >> you have my attention, always. >> when you have 5% yield like receive ron, and he comes on and says we have all kinds of cash, that's interesting to me. >> it is. >> he's dumped $3 billion into energy transform answer to $10 billion. someone said to me isn't that green washing? jpmorgan downgraded him because he's doing too much green? is that green wash no, that's green green that's not mr. car wash. >> you're a believer in the strategy. >> i am a believer i wouldn't leave chevron if i tried.

>> that's the monkees, right who wrote that >> i think neil diamond. >> how about xom >> no. he's got that board, david, it looks like greenpeace. >> all right taking them all out in the boat chasing the whaling boats, yeah, all right. >> is this a good chance to have spacs? >> we have a graphic we don't do our typical introtoday we have to be more serious, since we have a storm down about 1.5% >> you know, i've been talking about this new phenomenon of very high rates of redemption

for many of these spacs, but it's been resulting in something interesting, certainly volatility, that's ironnet, 90-plus% redemption rate, you end up with far fewer shares, and you also end up with a lot less catch at the company, when they gave you their projections at the time they announced their transaction. tmc metals, effector, we'll look at all of them, you can almost call it the meme-ification of these names. i've been hearing that people are looking at that are portfolio of spacs, many of which are saying i'm going to redeem it's not a great return, but it's a return, it's a business,

but then they're making choices, i'll bet you they get more than a 90% redemption i know the float is going to be so tiny, ironnet was a perfect example of that -- that potentially that could send the stock higher and that story has been reverberating. >> people are shorting them, and the shorts have to cover -- >> yes, originally people were shorting many of these names, because you wouldn't expect it's a good think to start life with less cash than expected, but that's not happening as often, because so many people have been hurt as a result of being short of the name. what seems to be happening is a handful of days after the close, you're seeing hedge funds, wall street bets crowd as well, get involved, and send them higher,

in part because the float is so small. none of it is reflective of the underlying fundamentals in these companies. that's not to say there aren't spac companies that are quite good ones or potentially have positive prospects but there's a complete disconnect, because these find themselves with less cash than anticipated to fund their businesses that's all i thought it was important to connect everything here, in terms of the moves we have seen up >> and there are many companies, right? this is not isolated>> you get a very high redemption rates oftentimes it's interesting to see the games being played in the spac market now >> wow. >> yeah. it goes back to a lot of the

speculation we have seen in this sector overall not to say there aren't plenty of names perfectly good, but it has nothing to do with the underlying fundamentals. >> close are to a 1% drop than the 2% we got premarket. let's get to bob pisani. hey, bob. >> we're about 250 points off of the lows global big industrial names, industrials, materials were on the weak side, energy also on the weak side, china of course, mchi sort of the proxy for china. more defensive sectors health care generally holding up better you heard is all throughout the morning, seasonality, a rather weak couple weeks coming, and trying to figure out the ever --

evergrande fallout and to the extend there's actual systemic risks. and that's why they're concerned about some spread of contagion that's associated with that. in terms of what's going on, we're off of the lows. if you look at some of the things associated with the global markets and the cyclical markets, oil and gas have been weak, copper miners have been weak value has come off its lows, and the jet, the global airline etf, we've already had a turnaround 15 minutes, in terms of thematic tech, that's been weak it's about a 2% decline that we've been seeing overall, so you see things like cathie woods' ark funds, some of the clean energy funds, lithium

stocks as well, all down 2%, 3%, or 4%, as you can see here we've global cyclicals, like air airlines, big material names, big industrials also in the materials space, they're already more than 20% off their highs. >> this is also true with sectors associated with the reopening. many of them are already well off their old highs. this is part of a rolling correction we have seen for many months the real question, is there a serious down side risk to earnings they've been revised upward for the third and fourth quarter it's pretty flattish they have stopped raising estimates for the third and fourth quarter, but again, not

moving that much this is when you want to watch these revisions, but i don't see any alarm bells. finally, when you're not sure what to trade on, you trade on technicals 4106 is the 200-day moving average, that's the gray line, the purple like is the 50-day moving average we are essentially sitting on that if we hit that 4106, that would be about a 10% drop. we're down about 3% from the old highs. there you go, that would be the correction level everybody is watching that 31-day moving average. carl, back to you. >> bob, talk you to you in a bit. let's see how treasuries are do. we mentioned yields down for the first time in four sessions. ten-year right around 1327 we'll be right back.

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dow is down 400. sharpest decline of the month so far. burying the brunt, materials, industrials, financials, new corps, free port, gm, cat, taking the brunt airlines doing okay. american airlines up almost 3% with the drugmakers in the green. we're back in a moment

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let's get to jim and stop trading. >> want to see if the market is going to turn, take a look at upstart, a positive piece out of barclays today the artificial intelligence lending and it's up 600% if that can turn around then look out we might see high multiple tech do well. just putting it out. >> don't want to be too negative things can happen. >> tonight airbnb. >> yeah. special announcement by brian chesky, he has something to talk about, about landmark number of people who have used it.

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good monday morning. welcome to another hour of "squawk on the street. i'm carl quintanilla with morgan brennan and david faber. close to post nine china's evergrande rolling markets around the world as asia closed, hong kong down, the dow down 17. housing data this hour let's check in with diana olick. >> carl, builder sentiment rose 1 point to 76 on the national association of home builders wells fargo index. that's a slight beat and the first gain in three months the street was looking for

unchanged. sentiment stood at 83 in september of last year and then set a record high of 90 last november it dropped off when lumber prices spiked and supply chain issues hampered construction price of lumber is down to quarter of its record high from last april and builders say delivery times remain extended and the chronic construction labor shortage is expected to persist. if the index is three components, current sales conditions rose to 82, buyer traffic increased to 61 and sales expectations in the next six months steady at 81. regionally on a three month average sentiment down everywhere except in the midwest, that, of course, is where housing is most affordable >> thank you we're 30 minutes into the trading session and we will get to evergrande in just a moment but here are three other movers we are watching this morning we're going to start with jpmorgan, bank stocks in the red on slow down fears jpmorgan and goldman two of the worst performers, big drags on the dow this morning

you can see jpmorgan down 2.5% right now. ok dental under pressure as the price of crude oil falls on fears of a global slowdown tied to the china property market and a stronger dollar amid the safe haven trade. we will end with an outlier in today's market action, name that's in the green right now, colgate getting an upgrade from buy to hold from deutsche bank which args the difficulties with inflation and some international markets is already priced into this stock as you can see the shares are up half a percent right now. david? >> we will as you said get back to evergrande, of course, a colossal real estate developer that perhaps is collapsing our eunice yuan has been following the story from beijing and the latest for us right now. >> thanks, david china's media are now reporting that evergrande may get a financial -- may get financial help from a fellow developer

the country's largest real estate developer known as country garden is being quoted as saying that it's not impossible for the company to buy some of evergrande's property so evergrande has been facing a test this week as to whether or not it's going to default. first we're going to see whether or not it's able to make interest rate payments on chinese bank loans and then later in the week, on some bonds. the big question has been whether or not beijing is going to step in with some sort of bailout. it has been encouraging, a cup such as country garden and other banks, to try to help evergrande's liquidity situation, but signaling otherwise including the state media has been that beijing doesn't want to be seen as endorsing this type of excessive lending, especially in the private sector at the same time, of course, there's concern that evergrande

could spark a wave of corporate -- of defaults within the property sector because it just is a representative of some of these highly leveraged companies within the property sector there is concern there but there is hope that at least the essential bank could step in with some liquidity to try to stop a credit freeze the other concern that people have here is the potential impact that evergrande could have on the overall economy. there's some estimates that the property sector is responsible for about 16% of gdp, so that could have a knock on effect to the overall economy if it does, indeed, have -- if evergrande does, indeed, have -- spark a wave of defaults within the sector guys >> eunice yun let's bring in david, jpmorgan

asset global market strategist and chris to discuss what we're seeing in what's some pretty ugly market action this morning. thanks for being with us today david, i want to start with you. we've been talking about the bricks that have been laid in this wall of worry for the market for weeks now just on tap this week you have a fed meeting on wednesday, all of the concerns around not only monetary policy and changes there but fiscal policy, concern around this debt ceiling game of chicken we're seeing being played, flowing earnings growth, companies cutting guidance, china crackdown and seasonality and technicals at play in the near term where do we go from here with the markets >> i think the first thing to recognize is that when it comes to a pull back, we are due the largest pullback we've seen in the s&p 500 so far year to date is a mere 4% versus a long run average of more than 14%

so when i think about volatility, volatility to me, rising volatility, just represents a wider distribution of potential outcomes. i think that that's what you're seeing investors grapple with in the current environment. not only are they worried about the potential for both infrastructure packageses to be passed, the debt ceiling, they're concerned about the fed and what this week might signal about the future trajectory of rates and then evergrande the value. so i think [ inaudible ] it's difficult to pinpoint any one thing in particular. despite some of the cuts we've seen to earnings guidance as of late the picture for 2022 still looks strong and we remain constructive on risk assets over the course of the immediate term. >> chris, i want to get your thoughts, basically, on the same question, given the fact that you are more geared toward growth with your funds it is decidedly risk off in this market right now the nasdaq also dipping below its 50-day moving average a key

technical level there too. are you a buyer on depdips righw >> days like today are days we are happy we have a cash position you know, we can pick away at those companies that we've been doing diligence on and when we get opportunities where they sell off, $3, $4, those are opportunities. we think risk assets are the place to be longer term. we've been preparing here in the last month that we thought we would be into a higher volatile period, seasonally as well as going into earnings season, you know, delta variant has impacted chip shortage, the supply chain, china, all these are significant risks near term, but when we look out over the next year, 18 months, we still find very good opportunities in a lot of those sectors to deploy capital. we would be more of a buyer ob a day like today it's not the time to panic and

sell >> interesting david, we got 10 million job openings in this country the consumer continues to spend. delta hasn't really rocked mobility or in terms of retail sales look pretty good and we might get young kids vaccinated. is your playbook a growthy economy where the fed has room to remove accommodation? >> i think that it needs to be when it comes to the fed specifically and i'll move on to what it means for asset allocation in a minute, i think we need to continue to differentiate between tapering and tightening it is more than appropriate for the fed to begin removing the punch bowl here over the course of 2022 more broadly you look at the financial markets, the housing market, i don't think that asset purchases are necessarily needed to the extent they've been in play over the better part of the past year even if the fed pulls back here a little bit, i actually think that it continues to be good for risk and for the reflation trade

more broadly we've stuck to our guns over the past couple months as growthier markets have come into favor and we think there's room to run in things like financials, industrials. it's not just an interest rate story to us, but really the idea that because we haven't seen this big surge in economic activity as we've moved past the pandemic, we could arguably have above trend growth for longer which has supported the cyclical parts of the market. we recognize the amount of uncertainty that continues to exist, particularly around the ways that the consumer is going to evolve here we don't want to be completely over in risk, we want to pair that cyclical exposure with high quality exposure because the names that are the biggest risk in the current environment are those that have relied on the multiple returns, higher interest rates will impact valuations and it's all about

following the earnings. >> chris, we're watching the market down a 1.5% on the concerns over a property company in china that may go bankrupt. do you have any concerns are you perhaps less willing to take risk as a result of what you're hearing >> so i don't think chinese real estate would really impact where we do our investing which is more domestic. i think where people are trying to understand is what is the contagion, what is the sell-off, cause other investors to sell securities going back to what we saw with ar chel goss, is there underlying risk that were tied to these that may have to unwind those trades you have to see what fallout comes from that. with regards to here domestically investing, i'm looking at it more as a barbel approach if we have some value in growth i think that's a proven

strategy if tapering does begin, which we think it should, the interest rate curve should steepen which would certainly lean towards benefitting more of the value names. but again, i think that the high quality investments, companies with good story stocks, good investment thesis, technology, those are the places we would still be constucktive in investing. >> there's a lot to parse through here right now david, the fiscal piece of the puzzle when you look out to something like 2022, which i realize you're still very constructive on, i mean not a day goes by that we're not talking about possible tax increases that are on the table as well. is that priced into the market here >> so what i would say about fiscal broadly and then move on to the tax question in a moment additional fiscal support has been a shoo-in for the better part of the past 15 months what we're seeing is washington

getting back to what washington is best at, creating confusion and getting in this done at a bit of a slower pace so, you know, again, we do think that both fiscal packages will be delivered before year end and need to be paid for some how generally speaking what we've heard from the administration on potential tax increases, the bark seems worse than the bite the increase in cap gains is less than whafs originally being discussed. an increase in the corporate freight 21 to 25, which is high as they can get it, knock about $10 off earnings next year then you do have the top marginal rate increase for upper income videos for some time assuming wedon't get hit for something out of left field that derails the broader economic story the market can take these tax increases in stride because the underlying funnel

fundamentals remain robust and expected to going forward. >> okay. david and kris thanks for joining us with the major u.s. averages downgraded this morning. >> as we go to break, the road map for the hour including cryptos crushed. bitcoin down. >> a call for more accountability at the federal reserve follows concern of senior officials financial holdin sash down for spacex, the crew makes its way back to earth. more "squawk on the street" still ahead. don't go anywhere. .

pfizer it out with new vaccine data for children 5 to 11 meg tirrell has that for us. >> hey, david. the data show a strong antibody response in kids ages 5 to 11 with pfizer and biontech's covid vaccine and a third of the dose to what they give everybody 12 and over they saw in the trial that vaccine appeared to be well tolerated and side effects were similar to what people 16 to 25 saw in a trial they plan to file for emergency use authorization with the fda by the end of september. pfizer's ceo albert bourla tweeting about the rise of cases we're seeing and the threat that the delta variant poses to children, glad to shares the news with the world, talking about how they plan to submit the data with urgency to the fda and other regulators around the world and also submit for peer

review publication this is just a press release of the top line data. but guys, it comes at a time when pediatric cases are on the rise comprising 29% of total covid cases reported in the first week of september. that's way up from what they've comprised for the entirety of the pandemic, an average of 16% since the beginning. hospitalizations among kids under 11 who cannot yet get vaccinated at the highest level ever for covid according to the cdc. so guys, these are the first data we're seeing and depending on how long the process is to apply for eua and the fda to review, potentially seeing this vaccine available by halloween or early november. guys >> meg, i guess maybe this is a really basic question but i'm just curious how did pfizer and biontech determine how the doses should be for little kids? >> it's an important question and in the early stages of clinical trials they tested multiple doses and what they want to get is that sweet spot

where you can give the lowest possible dose to have the least amount of side effects but still get that immune response, similar to what with you see in adults they found they could do that with 10 micrograms, a third of what they give to adults in younger kids they're giving one tenth of the dose they give to adults, 3 microgram, so getting smaller there. little kids have amazing immune responses so they can do that. >> fascinating and one shred of good news in the pretty rough tape today is meg tirrell. joined by morning star's damian. welcome back appreciate the help today. let's cover before we cover kids talk about that panel vote on friday does real world data back up what the fda said? >> well, you know, it's interesting, i think so. i think largely the real world data is showing that the third dose booster is helpful an the fda realized that and went for approval in sort of the higher risk patient population, 65 and

older and immunocompromised folks. i think real world data is supping the booster dose and i think in time, we're going to get more real world data that should support the booster for everybody. but i think we're going to have to wait for that and need more data to get the fda on board >> you've said moderna and biontech are no moat names, whereas pfizer has a wide moat can you explain what that means. >> absolutely. when you think about competitive advantage we will place a wide moat on a ferm we think has a strong competitive advantage, that has a portfolio of products that looks like it will be able to be renewed and that's something we see with pfizer they have a strong pipeline, they've got a lot of products that will continue to come to the market and support strong returns on invested capital. the challenge for moderna and biontech is they've got great technology with the mrna vaccine but that's all they have right now. we don't have that high level of confidence in their pipeline that would support the level of returns over a long period of

time in time, we think both biontech and moderna could develop a wide moat but they need more work pfizer is already there. >> just to dig into that a little bit more, damian, the fact that pfizer is so far advanced in the whole approval process and across so many different age ranges now, why is moderna not as far along as pfizer >> well, you know, i think what's happened is, you have a he seen sort of these elite development programs, both from pfizer and moderna, but pfizer's even faster. this is really warp speed, just very, very fast development of vaccines generally speaking vaccines take about eight years. what we've seen from pfizer and moderna is done in almost about a year or less and i think moderna is going fast. it's just not quite as fast as pfizer we should get data from moderna's programs in sort of younger kids, boosters probably in the few months behind pfizer's not too far behind but a little bit slower than pfizer

>> yeah. i realize we've seen these vaccines rolled out in unprecedented speed and books written about it i'm sure if there are not already. historically speaking and correct me if i'm wrong vaccines have not necessarily been a big blockbuster for drugmakers, at least from a profitability standpoint the fact that that does not seem to be the case with covid-19 and i realize this is very much a government program, and government contracting in many ways, does it change i guess the investing paradigm around vaccines and how future investments will be made >> i think it does i think it does. i think when you look at sort of the blockbusters of today most of them aren't vaccines but there are some prev nar, gardasil, these are major, major products and when you get vaccine sales over a billion, you can look at net profit margins that are similar to the net profit margins for other drugs. generally speaking, vaccines on the gross margin side are not as profitable if you get to the mass sales they could be as profitable as

other drugs. like you said they're generally not the key focus for the biopharma industry with this technology, the mrna technology, i think it opens up a lot more opportunity beyond viruses. you could start thinking about vaccines treating, you know, tumors which would be absolutely huge we're pretty far away from that, but that could be the next stage of vaccine development >> on the stocks themselves, you seem to be more favorable towards pfizer which i should point out just finally eclipsed the 20 year-year high. moderna up over 300% this year certainly shareholders expect there's a lot more to come, don't they, in terms of their ability to develop new therapeutics based at least on the mrna technology. >> i think so. i think if you are bullish on moderna right now, you have to be thinking about a third wave of sales that would be very bullish for moderna and pfizer when we talk about the we've

there's the first wave we consider 2021 and 2022 and the sales for the vaccines for moderna and pfizer will be enormous for pfizer it will be over $30 billion annually over the next two years. for moderna over $20 billion annually over the next two years. as we get into 2023, sort of the third wave, that's where there's lack of clarity. i think if you're a bull on moderna, you're thinking these huge sales over the next two years will continue on and that everybody will need an annual booster. we think that's unlikely and projecting annual boosters for more of the elderly and infants which is something that we think will drive about $2 billion annually for each of these companies' vaccines. robust but not as robust as what the stock is implying. alternatively the stocks could be implying the technology they have will be able to be more widespread and really we're in very early stages of extrapolating this data in the other therapeutic areas.

so we think moderna, biontech look a bit overvalued and pfizer, you know, at the current share price looks close to our fair value. >> a lot of crosswinds today thank you very much. good to see you, damen from morning star. >> thank you as we head to break look at crypto currencies getting crushed with the major assets down more than 8% right now. bitcoin falling back below 45 k. ether off. we'll be right back. i wonder how the firm's doing without its fearless leader. you sure you want to leave that all behind? yeah. stay restless with the rx. crafted by lexus. experience amazing at your lexus dealer.

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let's get more on the news regarding travel restrictions on europe kayla tausche has more hi, kayla. >> hey, carl the u.s. is going to be lifting those restrictions on inbound travel from countries such as the uk, european union, countries china, iran and brazil beginning in early november. white house covid-19 response coordinator is laying out a new system of regulations to allow travelers to show proof of full

vaccination before getting on those planes and having to prove a negative test result 72 hours before traveling this system is going to be put in place in early november we are still awaiting a specific date and in the intervening weeks, the centers for disease control and prevention will be assembling essentially the exact fine print behind the regulation that will be implemented certainly big and welcome news for many of those travelers who have not been able to travel to the u.s. since early 2020 when the restrictions went in place the u.s. will be requiring proof of full vaccination and a negative test 72 hours before departure. guys, back to you. >> all right kayla tausche, thanks for that update it's time now for our etf spotlight. seema moody is taking a look at specific stock sectors impacted by evergrande and all of the fears rippling through china right now. >> that's right. evergrande is the story here raising pertinent questions around the health of china's property and real estate sector. take alook at caterpillar whic

generates around 5 to 10% of sales in china, dirt, moving equipment used on the ground there we're looking at shares down over 5%, the worst day since november of 2020 a big move there the xli industrials etf one of the worst performing sectors following energy the commodities that are tied to china's growth story are moving today. iron ore which continues to fall after seeing the worst week since the financial crisis, remember china imports key raw materials, a number of key raw materials last year, as beijing tried to pull its economy out of the pandemic australia has long been china's go to source for i-- iron ore bu tensions has forced china to diversity to brazil. the slx steel and mining etf down over 4% right now names like cleveland cliffs, newmont mining, that operate in the global mining industry are

among the worst performers cleveland cliffs down 10%. those are big movers we'll come back next hour, back to you. >> later today on the halftime do not miss an interview with short seller jim chanos talking about china risk for years that's at 12:00 p.m. eastern time dow is down 515. we're back in two minutes. ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪♪ energy is everywhere... even in a little seedling.

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welcome back i'm ra hel solomon here is your update at this hour in utah after missing for weeks a body believed to be that of gabby pitino was found sunday. human remains were discovered at a camp site near grand teton national park. a cause of death has not been determined in florida investigators continue their hunt for pe tito's fiance named a person of interest in her disappearance

and hasn't been seen since tuesday. russia, a gunman opened fire at a university monday killing six people and leaving 20 others injured. according to the university, the gamm entered campus and began shooting people on the stre and later i -- later caught but not identified. a volcano eruption forcing 5,000 people to evacuate, including a 500 tourists, about 100 homes are destroyed. the eruption is the first in 50 years on the resort island popular with european travelers. no fatalities have been reported but the volcano is active today. back to you. >> thank you, rahel. we'll turn back to china and the overall is sell-off in many global markets and we're joined by senior portfolio manager and research analyst ashraf. good to have you let's start off with china you have exposure there. there have been any number of challenges in that market of

late, not the least of which has simply been the regulatory one broadly stated are there still opportunities for a fund like yours to be able to invest and invest with confidence >> good morning, david thank you for having me on yes. it's been tricky to invest in china. there's been regulatory complexity and, of course, the news of ever evergrande is all over the headlines for us, you know, we're looking for a few businesses that we can own for the next three, five, ten years and there are some opportunities, even being created with the policy push so, for example, the government is making a big push to get kids off of their screens, reduce the pressure of education and get them out playing sports. that creates some opportunities for businesses like anta which is a business we've owned for many years anta sells footwear and sports wear to children throughout

china and as more kids play soccer and, in fact, as china prepares for the winter olympics, we think more and more chinese citizens will participate in skiing and things like that which helps some of anta's brands. >> you know, we're dealing today with the fallout from the potential default of evergrande, we'll see what happens, but overall, you know, again back to the idea of how you can be confident, i think of dede that went public and now people are talking about the fact it's going to be taken over by the government how can you feel confident with what seems to be a changing landscape, given sort of the overall calls for a common prosperity in what comes along with that? >> if you take that example as an example, they very explicitly were told not to go public there were some very sensitive timing around their ipo and companies like that in china you have to realize it's a state

capitalism model the state comes first. if a company like that decides they want to do their own thing they're going to be punished there's some industries, you saw what happened in the for profit education sector, same in big tech, some industries where the chinese government will have a heavy hand especially if you go directly against their wishes you are going to face the consequences unlike the u.s. where there is recourse to courts of law, in china if the government decides that they're upset at you, it's a tough place to be. >> it's morgan just to put a fine point on this, what you're saying you don't see systemic risk from a possible potential default from evergrande in china. you're still invested in a number of chinese companies there as well. what would make you actually, given the conversation more broadly that we're having, what would make you step back, reassess, potentially rotate out of some of those holdings, i guess more so? is there a certain indicator

is there a certain data point that you keep a close eye on as somebody who has invested in the country for so long? >> yeah. we run global international emerging market stranls. our global strategies own maybe 0 to 8% in china our em strategy which benchmarks against the index is at about 25% china, the index about 35% we are under weight, but despite that, we still think there are some of these compelling opportunities in consumer and biotech and health care. in terms of what would make us pull back if there were serious concerns about the rule of law, about our ability to pull money out of the country, those are things that would get us very nervous, but the reality is, china is too big to ignore and as they continue to innovate, continue to move up higher value manufacturing, the opportunities there are really important for us to value. i think we can five or ten

businesses we want to own for the next five years. >> maybe too big to ignore, although there are plenty of investors who have invested in the well-known chinese companies here that wished they ignored them is the sell-off kind of close to the end in the mega cap names such as alibaba or tencent >> really hard to say. we've had some success in some sectors and struggled with others, particular in the china tech space what we look at is the fundamentals of these businesses if you look at a business like alibaba, the core e-commerce business has a lot of growth and other growth drivers like cloud which are early on and then we compare them to the valuation of what their peers in the developed world trade at and they're trading at huge discounts. the market is doing a good job of discounting the risk appropriately and for, you know, again focusing on the businesses we still think there's a lot of opportunity in some of the tech mega caps. we're possible we're looking for more opportunities in that

space. >> finally, just to make sure we're not missing the big story, evergrande, you don't see a big fallout from that domestically in china >> yeah. it depends on how the policymakers deal with it, if they bail evergrande out i don't have a huge insight on what policymakers will do, but if i had to bet i think they will not let it fail and cause systemic risk. that would be my call. we're not invested in that space at all so i'm not an expert by any means. it's hard for me to see the chinese letting it become a systemic problem >> right yeah worries about contake i don't know thank you. appreciate you taking the time. >> thank you very much. >> we continue to monitor this morning's sell-off with the help of our markets commentator mike santoli looking at some levels and the fact that you pointed out the market was already on some wobbly legs. >> no doubt about it, the overnight news in this kind of disorder in the capital nashgtsz china gave the market a nudge but already off balance. see what's going on today is

pretty continuous with the story all of september a little bit of window for the technical and seasonal weakness around the week afterward. we have flattening out earnings forecast growth that's been happening for a while right now and the policy flux sort of idea that fiscal pipeline looks a little bit clogged and obviously debt ceiling jitters starting to filter through we have the fed intent it seems on tapering the quantitative easing all of that stuff together to me is a bunch of pile of excuses for the market to have a little bit of a downside test right now. i think we're still -- you would have to say in the routine pullback zone, maybe getting close to something a little messier than that, but not quite there yet. in terms of levels we've been hovering on the s&p right around the august lows. that was one of the sort of points on the map that people figured we might have a little bit of a rally point or a collection point below that, 5% pullback is just above 4300, around the 100 day average, where the market bottom last september

all that stuff filtering together suggests that, you know, the u.s. market is obviously taking a haircut on a lot of global news but we're not really seeing a lot of the stress building up in credit markets. just a kind of cursory softening in credit conditions here. looking for the alarms to go off, but haven't quite seen them yet. >> you point out in your notes that it might be better long-term constructive to get that 5% pullback so we can talk -- stop talking about how long it's been since we had one. >> it might feel that way, carl. yeah look, i don't think there's anything magic about 5% but it does seem as if we lose that little talking point, it's going to seem a lot less like wow, what's wrong, this market doesn't pay attention to anything also if it takes a little bit of a flush to the downside some kind of panic or urgent selling to culminate a move lower you haven't had that yet sometimes that can come around final point the average stock in the s&p is down well more than

10%. cyclical stocks have been correcting hard since june we're three months into this idea that we're pricing in some kind of a slowdown one difference the big cat nasdaq stocks have a huge out performance for a few months they're not there to take up all the slack today. >> thank you as we head to break, we're going to take a look at the biggest laggards on the s&p down 1.6% right now names like invesco and mining and materials names, commodity names, things like new corps down 7% and freeport almost 7%, en enphase energy we'll be right back.

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on behalf of spacex welcome home to planet earth. >> thanks so much. it was a heck of a ride for us just getting started >> that was the voice of jared isaacman, ceo and founder on what was a flawless landing to cap a mission. this is the all-civilian crew of spacex's inspiration 4 mission, it splashed down saturday off the coast of cape canaveral florida, sine proctor, mission specialist christian dem bros ski. an altitude of 366 miles donations to st. jude's children's research hospital skyrocketed upon the landing, musk adding $50 million donation to the pot as well, above the $200 million goal set by

isaacman in addition to bank rolling the mission did donate $100 million himself on the post-flight call, the director of human space flight benji reed disclosed people approaching the company about future private trips has increased significantly, as inspiration 4 marks a series of commercial space milestones and ushered in what they called on the call a second space age. a flurry of ctweets including jeff bezos and lockheed martin who had christin dem brow ski. noticeably absent, president biden. elicited trolling from musk on twitter remarking that perhaps they hadn't heard from the president because he's, quote, sleeping david. >> take people on i guess in this case, he's happy to take on is there bad blood between biden

and musk >> i would not have thought so but that being said, when you look at something likes te la, for example, and some of the deals struck and partnerships that are being made within the ev space right now, tesla has been noticeably absent from some of the policy still enacted by the administration so perhaps it's anything more on that front i would be speculating as i mentioned these are all american citizens who were in this first ever private space flight and keep in mind, if it wasn't for the public/private partnerships that a company like spacex has with nasa we probably would have never realized this moment. >> right more to come it sounds like. perhaps many more to come. >> many more to come potentially. starting as soon as january with acting space, another space start-up carl >> all right fascinating. by the way, coming up on tech check this mni, n'orngdot miss

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welcome back to "squawk on the street." i'm dominic chu. stocks remain lower this morning overall with the major indices by off by more than 1% most sectors in the s&p have been low all morning long, but the utility stocks on our sector heat match right now relative outwormers on the day. check out names like center point energy, consolidated energy, amom ng some of the nams in the green the dividends tend to be higher in terms of yields versus treasury yields, however, you see sectors like this outperform keep it right here quk t see i"sawonhetrt"s back on after this. utilities the only sector in the green.

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stree. steve liesman has more steve. >> thank you the non-profit sending a letter late yesterday, fed chair jerome powell calling for an investigation on widespread trade practices, trading by fed officials may, quote, not ohm be unethical, it may well be illegal. that's baud feds were given information, feds officially barred from trading far below the fomc meeting to midnight of the day's meeting. powell, boston's eric rosen gren and tom barkin owned the same kind of asset they were purchasing as part of its monetary policy. kaplan made multi-milion dollar trids of individual stocks throughout the year.

the fed reese leased a statement, around permissible financial holdings meanwhile fed reserve officials say powell owned municipal bounds in a joint account over which he had control but a spokesperson said he stopped trading in 2019. powell owned the bonds in a family trust over which he had no control it was reviewed by ethics officers and not found to be in conflict he had muni bonds previously purchased before the fed last year bought more than $6 billion in municipal bonds morgan >> steve, i know you've been following this story so closely and doing incredible reporting around it. thanks for bringing us the latest given that it's a week in which we get more on a fed meeting, it seems like the dot plots are going to be very much in focus what are you watching?

yes, to both of those things, morgan do they announce the taper when will they actually affect the taper, and then i think the dot pots is another way of saying what are the feds' interest rate forecast sunny expect those to remain toward the end of 2022, maybe the beginning of 2023. really i think they bring it forward just a little bit. the fed duh not appear to be in a hurry to bring interest rates but it's something that will indeed happen this year. >> steve, i want to go back to your story it's april let's call it 2020. you're a fed board member and you know for lack of a better term the fed's going to come to the rescue or all those different policies they put into place that i remember us talking about while i sat at my kitchen table. are you allowed to trade or not? >> outside the blackout period, yes. this is really what he's talking

about. he's like, in this world where you're making emergency discussions and plans, he thinks there should be like essentially a forensic accounting. what fed officials knew and when did they know it and when did it actually affect the trades i will say, robert kaplan said he did not trade outside the blackout period, however, there are no dates listed for the trades on his disclosure forms they just say multiple even -- there's some lack of clarity on when powell did his trades in a sense, i think the problem in part lies with the disclosure forms, which che called grossly inefficient. the other is a policy question i think, david, we have a policy here that restricts the timing we can do it if the feds said we're going to allow trading in june on a day and december on a day, nobody would say that it would be

necessarily with inside information. >> got it. okay steve, thank you >> pleasure. >> steve liesman that's going to do it for us here on "squawk on the street. let's get over to t"techcheck" because it starts now. ♪ good monday morning. welcome to "techcheck. today tech tumbles as the september slide intensifies. our first set of corrections coming then, doordash ceo tony chu. later call it an inflection point. we'll talk winners and losers and new listings later this hour, john