welcome to "squawk box" on cnbc i'm becky quick. the dow closed down yesterday by 614 points that was the worst one day drop since july but that was way off the lows, there was a rally into the close, we had been down almost 1,000 points until the last 15 or 20 minutes of trading. the s&p 500 down 1.7% for the worst day since may 12th it pulled back 5% from the record high. right now it sits at 4.1% from that record. check things out today as joe mentioned, futures are up big getting back half of the

losses from yesterday. dow futures up about 340 points a gain of 1% so giving back and we'll see where things shake out s&p indicated 40 points, the nasdaq up 125. if you check out treasury yields you'll see this market didn't move much at all with all the moves we saw yesterday with stocks right now the 10-year note yielding 1.336%. and then crypto, about the hardest hits of the assets yesterday, some down 8, 9% they're not declining much more but not huge bouncebacks either. maybe this is a situation where physics kicked in. what goes up, must come down because cryptos which were up the most suffered the most on the down side. >> got a beta two or three times of the averages. the s&p and dow 1.7%

s&p 1.78% yesterday. keep it in perspective the pullback but -- >> it's a pull back. >> the question is it a larger sentiment. >> the vicks was up. >> since september 1st it's felt a little bit different right when they said i guarantee you the momentum is going to continue higher because every dip is being bought, that's when it started waivering on if the dip does get bought but so far it has. >> that action at the end could be mutual funds too, which at the end of the day are trading up saying here's where we match things up. could be a lot of retail buyers, too. >> i'm glad to be here. >> barely. >> what happened >> interesting today. >> harrowing on the way here >> i have a tunnel between where i live and -- it's amazing that it never happens because it's a tunnel and, you know, so there's like major police activity and i read that and you know what i

told andrew what i said now. i said you guys got some stuff to check out, take some time it's under a river under a river like a couple of miles. >> don't cut any corners >> check it out. you have things you're looking at you want to make sure. >> go ahead, sir. >> don't mind me, i can wait andrew and becky can handle it see a leak -- >> we were talking about it before, it is sylvester stallone, but i thought it was mel gibson. >> "daybreak". i lived in hoboken at the time and that was stuff of nightmares. >> it's claus terphobic enough because of the fans and everything i love nypd, all those guys, if they tell me hold off for a second -- >> yes, sir or ma'am. >> good idea i trust you guys

then i ran up here, too. i got out. >> i will say because of that stupid movie -- >> you aren't in shape or anything -- >> we usually go around. it was fine. it was fine. i stepped over a couple of things >> i will tell you, because of that movie i still to this day when you drive through the tunnel there's the demarcation line between new york and new jersey i wait until when i see that line, so i know if something happens i need to run forwards or backwards. >> and when i get here, one thing i need to do. >> what's that >> hair. >> not what i was thinking. >> not makeup. it's sue per flew yous it either doesn't help or doesn't help enough. but the hair. >> did you get sun yesterday or is that from running this morning? >> what's that >> when you do the hair with the velcro --

>> it's like a shirt have you ever worn a shirt for a while, and you realize it's inside out >> we have some news for you, actually, as it happens. there's a lot going on house democrats say they're going to be trying to pass a bill that prevents a government shutdown and suspends the u.s. debt limit until the end of the new year this is an attempt to avert two possible crises in one move. congress facing a september 30th deadline to fund the federal government janet yellen is now telling lawmakers that the u.s. will likely not be able to pay its bills sometime in october if congress does not suspend or raise the debt ceiling. >> that's on top of all the wrangling that's taking place for both the infrastructure bill, whether that's going to get voted on by the 27th as nancy pelosi had promised those -- the democrats would come to her, the moderate democrats, and while you try to figure out if there's enough support for the $3.5 trillion

bill and based on the comments from kyrsten sinema, joe manchin, a lot in question on that it looks like a much tougher needle to thread and we'll see this on those issues, the back and forth on congress. right now time for an update on the company in the center of crisis in china, evergrande. eunice joon joins us for an update on that good morning or evening. >> good morning to you, becky evergrande faces deadlines when they have to make interest payments on bonds or risk default. the company's chairman is trying to convince staff, as well as investors that the company will survive. in a letter to the staff for the mid autumn festival holiday the chairman said evergrande will walk out of the darkest moment

soon and resume construction as soon as possible he failed to say how the company plans to do that, however. the s&p said it doesn't believe a rescue will come in the form of direct government support it only sees beijing stepping in the if there is, quote, a far reaching contagion causing multiple major developers to fail and posing systemic risk to the economy. other property developers today made several statements to try to reassure investors that wasn't going to happen rnf said they're going to invest $1 billion of their own dollars into the company other property developers, small companies, announced share purchases or bond redemptions again in an teattempt to make se

people feel assured. of course, all of this is k exaggerated because the markets here are closed for the holiday. >> this is interesting because the talk had been about how it didn't look like the government there was going to step in and offer support unless it was for areas they cared about, maybe workers losing their jobs or average investors losing their home or savings on these things. these are moves by the private market to try to shore up investor confidence. is that a new phenomenon a very different thing >> reporter: i don't think it would be a new one also, there isn't any evidence that the government itself isn't trying to encourage some of these statements. >> that's what i was going to ask is this the government doing support. >> yeah, behind the scenes -- >> yeah, behind the scenes. >> reporter: right it's difficult to say but we

know the government has been encouraging some of the banks to -- or at least telling some of the banks maybe they shouldn't expect to get some of the payments for a while and encourage rollovers of these debt obligations so the government, you know, does play a role in the private sector to try to make some of these things happen. we just don't know exactly to what extent at this point. >> you know, interesting, i thought this piece in the journal might be in the op-ed section about what the journal's take on what xi is trying to do to return it to a -- >> right. >> -- i don't know whether you saw it, but it's on the front page of the journal. according to people -- they had a lot of discussions with people involved in policy there and involved in trying to analyze president xi's thinking.

i don't know if it's disturbing, xi said this in a speech, the goal is to build china into a modern socialist power kind of the same goal that democrats have right now i think in this country -- no? not completely. >> reporter: i think it's a little different i think it's a little different. >> we're further along, i think. depending on the 3.5 trillion, how it works this kind of is -- it's almost as if they got far enough along the capitalist road to where they started seeing, wait a minute there's other things that go along with this and we're going to lose control in other areas, we're probably blacked out now there, but it's like they got to that point and said hold on here, we need to move slowly but it's a huge article, i want to read the entire thing. >> reporter: yeah, it's a great

article. but i think that -- yeah, just in the early days a lot of people thought president xi could be a reformer but then very quickly over the years we started to see that it became more and more evident that he wanted to have more state intervention in a lot of different parts of the economy now it's just become much more open that there's been a concern about the private sector and the role that it plays in various ways that maybe there isn't enough control by the communist party that you could have a lot of influence. >> deja vu. >> reporter: that's right. >> we're watching it happen. >> reporter: there is a lot of concern -- exactly >> you sit with kyle bass and say how terrible china is. >> he's coming on. >> you think that the united states -- >> no, not in terms of human rights not the united states. i still think the american dream is alive you have stated on the show the american dream is alive in

china. you have stated that again and again and again. which always warmed my heart. >> i said that. >> coming up, futures looking to bounce back after yesterday's selloff, get you ready for tomorrow's big announcement from the fed. two major home builders trading ocwer after earnings stks to watch is up next, 6:11, 6:12, do you know where your children are? we'll be right back.

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if you just hold it like this. yeah. ♪ i love finding out things that other people don't want me to know. mm-hmm. [beep] i just wanted to say... ♪ find yourself in these situations and see who you are. and that's just part of the bargain. ♪ in business, setbacks change everything.

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a rough day for home builders dr horton lowering its quarterly sales guidance, citing a shortage of supplies and labor to meet demand a similar message for lennar it said supply chain constraints limited the ability to sell new homes for the quarter. that stock off about 3.5%. >> futures set for a rebound as the fed kicks off the two day policy meeting following a bruising day for the broader markets, the s&p 500, dow, nasdaq all down somewhere around 2%, a little bit less. stocks did finish off the lows for more on the markets let's bring in silvia and our friend joe, managing director of vert

investment partners, cnbc contributor. silvia, you point out this pullback we've seen, if this is it, that is quite a bit lower than we've seen as an average for a pull back over the last decade, and then from that, you deduced that it's usually about 14%. you think it was an overreaction even though it was much less than the average pull back and you're buying? >> absolutely. good morning, joe. yeah, you know, so over the last few decades, the average bullback has been between 13 and 14% so the 5% move isn't so concerning to me, it's more of an opportunity to buy on the dip. i think yesterday's action was around evergrande, i think it was potentially waiting to see what the fed does, news around the debt ceiling and covid the market simply pulled back.

if i look forward, though, the economy is in good shape we're growing. you know, consumer spending is high industrial numbers, manufacturing numbers are good we're looking, you know, forward to ending the year in the green. so i think when you get the pull backs and some of the top formers, great opportunities to buy in trillions of dollars on the sidelines in money markets that yield zero just aren't benefitting now so i think it's a great time to buy stocks. >> i got to ask silvia, you're not only buying the different stocks, you think crypto, bitcoin, you would recommend the weakness in crypto -- you would say buy it at these levels >> yeah, i'm very openly bullish on crypto. i think nfts are absolutely exploding. they're going to take over the market bitcoin has fallen back to the 43,000 level el salvador recently adopted it

as a currency. retirement plans are letting crypto on the platform, trading forms are expanding the availability of the crypto it's used to buy and sell things, exchange like a currency and then you have the pending etf rule out there, which is going to affect the price of the upside i like crypto here and i think it's a good buy on the dip opportunity. >> joe, you probably have some comments about yesterday and specifically about any change in tone that you've noticed for the last, let's say, three weeks have we entered a different phase, do you think? >> i think sentiment has certainly adjusted, but i think s september is a calendar month void of any positive catalyst for the market i think a lot of what happened yesterday has to do with the same type of conditions that existed in 2018, if you remember from june of 2016 through the

first week of 2018, in february, you had 20 months without a 5% correction sound familiar that's what we have now. what happened during that time you had significant short volatility strategies being implemented. that got unwound quickly that's why you had such intense selling yesterday, a lot of short volatility strategies being unwind i don't think the evergrande story is going to go away we know they have $119 million due on thursday in an interest payment. another $550 million due by the end of the year and then 3.5 billion in the spring. that's not going away. but sentiment kind of gets damaged here i think what you do is you're looking for what's the next positive catalyst for the market and i think that ultimately comes in the form of earnings. >> that comes in earnings but the headwind, joe, is the fed is less accommodative some day. isn't that something to worry

about? >> i'm okay with that, joe tapering doesn't mean tightening we're at a point in the cycle where we should be tapering, but as i said that's not going to equate to tightening the federal reserve is stepping back, time to do that. if there are headwinds it's going to be what happens with the tax consequence of the legislation, private equity names yesterday really had a rough day. they've been up very strong, blackstone and others, but the carried interest tax consequence looks more onerous than we previously thought so those are the things of significance i tell you, today i'd be watching starbucks, nike, they've been under pressure because of what's going on with the chinese regulatory pressures. it comes back to the faangs, if they're able to show the resiliency from over the summer, the markets will stabilize.

>> we're right in the middle of a long-term bull that's intact? >> i think so. i think that we're going to end the year strong and i believe that next year will be a strong year to joe's point i don't think that what the fed is going to do is going to affect the market much so you'll have this endless pile of cash with the top companies out there, particularly the faang names, growth in consumer spending, numbers are higher than pre-covid at this point. opening the borders again to travel perhaps you get a full run there in the cruise names, airlines, and hotels i think that the outlook for all the of indexes is in the green this year. >> thank you both. i know it's early. good to see you both. >> thank you >> happy earth, wind and fire day. >> what did you say? >> happy earth, wind and fire day. that's one i didn't know >> that's news you can use

>> coming up, discord, the latest funding round bringing the valuation to $15 billion, i spoke with the company's founder and ceo in an exclusive interview. we'll bring that interview to you next as we head to a break, check out oil right now, rebounding after yesterday's dip. 71.04. a positive impact on energy stock. some of the biggest losers we showed you at this time yestery,aka okda te lo

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dedicated to helping people achieve their financial goals. visit findyourindependentadvisor.com you're driving innovation. you're racing to the cloud. you need to do it securely. that's why palo alto networks developed prisma cloud - an integrated platform that secures your cloud environment end to end. used by the world's largest organizations, prisma cloud provides the cyber security you need from code to cloud. so you can get cloud security right, the first time around. we've got next. welcome back discord recently raised $500 million in funding, bringing the company's valuation now to about $15 billion, in an exclusive interview yesterday i spoke to the founder and ceo about how he plans to use that infusion of capital. >> the focus of the round is to

be able to give us the ability to continue to invest in making just the best community app and services that we can bring to market for people. you know, fromthings like improving, you know, our ability to keep people safe through an acquisition we made recently, to amazing cool new features that allow people to organize how they communicate like threads which allows you to have branching conversations in a group of people. all the way to continue to invest in our subscription service which is how we make money and continue to create value through that. >> how key do you think the issue of privacy is to the use case and to the business and the way your customers or your users think about the company? >> we think privacy is fundamental. from the day that we brought discord to market, privacy and safety were built into the

foundations of how the product works. every conversation is opted, you choose to join a community or add someone as a friend, you can, you know, block people if you like, you can leave those spaces and we also give, you know, community owners and community moderators lots of tools so they can enforce rules and norms in their space and maintain our community guidelines we believe that people want to have, you know, safe environments where they can be themselves, relax, hang out with their friends and a big part of that is feeling like it's your space, you have your privacy, and it's safe. >> catch a lot more of that interview with jason citron, we'll show it to you tomorrow including his take on apple versus epic. plus facebook, china's crackdown on children, gaming and so much more i should say crackdown on children playing games in china. so we talk about screen time

he has a little one as well. so discord began in the world of gaming. >> got it. on that same note in the gaming world, the s.e.c. is investigating activision blizzard over allegations of sexual misconduct and work place discrimination the agency is seeking documents, including personnel files, separation agreements and minutes from board meetings going back to 2019 it's looking into weather the company properly disclosed complaints and whether any kind of information should have been shared earlier with the investors. the company said it is cooperating with the investigation, stock up about 1.5% coin base said it will not offer a lending program that through threats of enforcement through regulators it would allow customers to earn interest by lending to other traders, but the s.e.c. said it could not offer that product

without registering it as a security and following investor protector laws coin base said it is still seeking regulatory clarity but in the meantime will not offer the product. that stock up by about .3% let's check the overall markets and where they stand right now yesterday, huge down day for the markets but at the end of the trading day in the last 15 or 20 minutes you did see a rebound, stocks for the dow down by about 600 points versus down almost 1000 points earlier in the session. this morning indicated up about 300 points getting back half of what they lost s&p futures up by about 38 joe? >> there's breaking news out from j&j good morning, meg. >> good morning. johnson & johnson giving at lo of updates on its vaccine this morning including the results on

what happens when you give two doses of what is a one-dose vaccine. let's start with those results they spaced the two doses out by two months so eight weeks apart. what they found is the protection against symptomatic, moderate to severe/critical covid in the u.s. rose to 94%. that's in the united states. globally they said the protection was 95% they said when they gave a second dose it remained generally well tolerated that's looking at giving two shots two months apart they also looked at what happened when you give a booster dose six months out. we've seen these data earlier but essentially showing the antibodies level rise nine fold two weeks after the booster to 12 times four weeks. and with a booster about 2

months they rise 4 to 6 months so six months will do better booster. this was a huge release of information. they also had two additional studies on what happens when they give one dose, including an update on the phase 3 results as well as a very large real-world efficacy study where they essentially tracked almost 400,000 people with the shot and compared them to people who weren't vaccinated they said they saw no evidence of reduced effectiveness including when the delta variant became predominant in the phase 3, which was global, they noted somewhat lower efficacy against severe and critical disease, they said they saw two variants included in the update of the phase 3 so a lot here. johnson & johnson trying to say they have this one dose vaccine, a pandemic vaccine, the one dose still provides lasting

protection but when you look at two, two is better than one. guys >> can you explain the d distinction between the 94% efficacy for the united states -- that's a big delta for lack of a better word in this case >> yeah, there is. and there were not a lot of details here in this press release, so i can't explain it as of right now. we'll have to wait for a more publication to understand if there were variants causing the difference we saw it with the beta, the one in south africa, it was lower in the results. >> do we know if efficacy over time we've seen with the case of the pfizer drug, the pfizer vaccine, the efficacy wains, do you believe we wains with j&j? it's clear we know it starts -- its starting point is a lower rate and you hear about

breakthrough cases, chris rock the other day had apparently taken j&j, how should people think of that? >> with the one dose vaccine the starting point is lower than the mrna vaccines. what is starting to seem clear it does not wain to the same degree we see with the pfizer or moderna vaccines pfizer said you see a 6 percentage point drop every two months in any case of covid. with j&j i don't have an apple to apples comparison but they're trying to make the point the comparison remains strong. but there are so many numbers in the release it's difficult to make any kind of direct comparisons. >> the timing in terms of the booster for pfizer would be six to eight months out, and in terms of what pfizer is talking

about for kids, still usuggestig you wait three weeks in between the doses. are there studies done on pfizer or moderna moderna was four weeks waiting between the two doses there, does it make a difference how far out? because it seems like it does with j&j, it's more effective at six months than two months. >> yeah. sort of accepted in vaccine science that the further you space the doses the higher response you're going to get but what happened with pfizer and moderna was they were trying to get these results and they were trying to protech people as quickly as they could as they are running the trials in the middle of the pandemic so they spaced the doses close together. in fact, the ceo of pfizer said that was a risk pfizer took doing the three-week spacing it seemed to work, but would it be better when they have time to kick the tires and do the studies, would it be better to space them several months apart and it seems that's what they're

trying to back into with the dose or what people call the third shot six to eight months out. >> that's not done until they get at least emergency use authorization for kids age 5 to 11, right? we're just going forward with the three weeks on that. >> exactly i mean if you wanted them to run the studies -- >> it would take a lot longer. >> it would be years, yeah it's what they usually do. why it takes so long to make vaccines. >> meg thank you we'll have her later in the show to talk more about it. when we come back, the fed kicking off a two day policy meeting today. we'll have the implications for the markets. that's straight ahead. let's look at yesterday's dow and s&p 500 losers there were a lot of them

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just out this morning uber saying it will post its first adjusted profit reaching the milestone in the current corner this news coming in a filing just filed by the company. means uber will have turned a profit months earlier than expected among the catalyst, cost cuts improvement in its ride strength and strength from food delivery.

dara joins us at 8:30 to talk about it. universal music group made its debut this morning, it's spun off from a french media group. trading opened 25 euros per share. it's behind the platform for lady gaga and taylor swift we spent an enormous amount of time over the summer talking about the company because a spak was trying to buy it back then there were questions whether it would have been a good deal for the spac and its spac owners. the stock up about 35% over where it -- where he was purchasing it. interestingly enough, the s.e.c. raised questions about the transaction, he stepped -- the spac stepped away from the acquisition of the shares but pershing square, his hedge fund,

stepped into the shoes, be effectively. so investors in pershing square should be happy today. public investors in pershing square tonteen should be upset. >> maybe upset with the s.e.c. at this point? >> that too. i would imagine, you know, the -- they call them the tonteenites, not apes, you would think they would maybe have some words for gary gensler or others. >> that's what they call themselves >> they also have another phrase but this is a family show. >> i'm curious. >> yeah. >> so all the things we used to say. so they do call -- >> just like the apes, there's the apes >> remember the tazarians. >> i do.

>> don't taze me, bro. >> don't taze me looking forward to our conversation with dara later today. that's big news and will be something to watch. also mark grant is going to join us next to weigh in on tomorrow's much anticipated fed announcement and what he tnkhis happens with the market and what's the result. "squawk box" will be right back. , in our effort to build the world's safest cars. we've created crumple zones and autonomous braking. active lane keeping assist and blind spot assist. we've introduced airbags, side curtain airbags, and now the first-ever rear-mounted front-impact airbags. all in the hope that you never need any of it. ♪ ♪

we'll hear from jay powell tomorrow afternoon but our next guest doesn't believe the fed will start the taper program any time soon. joining us is mark grant mark, maybe before we look forward we need to look back at what happened yesterday and what you think the implications are do you think yesterday was about china primarily or is this just the final straw after so many things have been building up, so many concerns? >> it was certainly -- good morning, becky it was certainly chinese centric. the evergrande situation is much more serious, i think, than a lot of people realize. they have about 300 billion in total debt in china, they don't have a rule of law, they don't have due process and whatever decisions are going to be made about evergrande are going to be made

by the chinese communist party they can run the country however they want to run the country but in terms of investors, as you probably know in my commentary out of the box back in july i said get out of china, stay out of china, it's a losing proposition, you don't know what these people are going to do and there's no rule of law, there's no creditors committee that are going to decide anything in some court. the whole decision in what's going to happen here is made by the chinese communist party and i think it's going to have global implications. we saw what happened yesterday we're getting a pop in the futures this morning and i am very cautious about what's going on here >> the china -- i understand your concerns about investing in china. but do you think there's a contagion factor, that it spreads beyond yesterday you saw everything declining, energy, commodities a

lot of places down, including cryptocurrencies, is that worthy of blaming that on this china situation or do you think there's other things afoot here? >> i think the china situation, becky, is the main culprit look there are banks that lent money to this company, american banks, a enumber of our equity managers the debt has declined to 90 cents on the dollar to around 25 cents on the dollar. and it's big enough to have an implication. sure you can throw in what the fed is going to do, i don't think they're going to taper at this point for a variety of situations the china situation is one thing with evergrande, another reason is we have the debt ceiling coming up and there's political dissension about how to deal with that issue in the united

states. >> you don't believe thepause in the china pressure at this point. do you think the u.s. equity futures with the dow indicated up over 300 points >> i think it's a pop. i think people are being overly opti optimistic i think the big day, so everybody knows, is friday, the first big evergrande loan is due on thursday. we have to sit and wait to see what the chinese government does i don't think anybody has any idea so in my institutional and individual accounts that i deal with, i suggested and we've been raising some cash for friday to see what happens after thursday and if the government intercedes or if they actually default on their bonds, and then, of course, the rating agencies in the last 24 hours have been warning as well. so i think it's a serious situation. and it's a global situation. >> mark, thank you

always great to see you. i can't remember the last time i saw you without your glasses but that's nice too. >> my new, younger look. >> i love it. >> thank you. we'll see you soon a programming note for you, more on the fed in the next hour with former dallas fed president richard fisher. up next, after th'ecs major move down yesterday, is it time to buy that discussion next hey lily, i need a new wireless plan for my business, but all my employees need something different. oh, we can help with that. okay, imagine this... your mover, rob, he's on the scene and needs a plan with a mobile hotspot. we cut to downtown, your sales rep lisa has to send some files, like asap! so basically i can pick the right plan for each employee... yeah i should've just led with that... with at&t business, you can pick the best plan for each employee and get the best deals on every smartphone.

♪♪ if a computer can replace a truck driver or a cashier, ultimately won't a computer code itself? do we actually see a society that moves back to emphasizing, prioritizing and putting great value on the arts? as we start to manage our technology usage, we could see somewhat of a renaissance era in society that moves back to prioritizing music and ballet and fine arts. the creativity of thinking out of the box, how you can take basic things in the world and create something that's highly productive... when i think about my children, i think about creativity. i'm less focused on technical skills, than i am in terms of making sure that the mind remains open. i am katy huberty. we are morgan stanley.

. welcome back to ""squawk"" tech stocks taking a hit big tech names have shed now more than $500 billion joining us is the founder and managing partner at loop gene, good morning to you. i know you are long-term bullish. but in the moment, clearly, there is something else going

on so what's your current feeling here >> i think if you have a trading mindset just to stay clear over the next month to two months i think this is a longer opportunity for longer-term investors to build positions the reason i talk about staying clear, it's hard to fully dissect what is contributing to the market, the contagion, becky talked about the previous segment. i think at the end of the day most of the focus will shift from chairman powell later this week i suspect they will be muted despite that i think the bond markets will probably ignore what the chairman is going to say and probably inch those highers. i am not a macro-tech. i go from the bottom up. so i think when you put all this together there is a perception rates are going higher i think that can have a more negative on tech stocks. many have higher multiples than

less earnings, so they're more sensitive the rates. so to kind of clearly answer your question is that i think near term there is no urgency. i think build positions and ultimately anchor back, there has been a direction over the last decade that has been helpful, which is anchoring and where is the world going ask yourself that question i think that will reveal the best tech. >> i know the question i'm about to ask is going to betray the very idea of market timing, which unto itself is a terrible one. except most people think they should be trying, even though they know they're not supposed to if you think the next two months are going to be -- are you suggesting the next two months are sideways are they down? i ask, i know people will say, should i be investing today if it's worse later maybe i should wait. it's never a great strategy. i know people out there are trying to understand what they want to understand >> exactly and i think that as you said,

it's difficult to time the market i think the most judicious approach is to just time this out yourself do some dollar cost averaging. my general thought is it's difficult to predict the market. i think it's going to be flatish to down to answer your questions over the next couple months. it's just today the a bounceback i think there are some more systemic things that need to be processed by the market. so i think the broader markets will go down i think people should plan appropriately. ultimately, i don't want to bury the lead with that comment is i think there are a handful of tech companies that will power through this ultimately and be great investments over the next year. >> if i can ask you for three names you think will be the winners that will sit together a year from now today? >> i think first apple it is as powerful earnings, massive addressable markets, when you look at what's going on in the metaverse, ar, what they will do in health and wellness,

auto i know it's well traveled, but i think this should be a $200 stock in the next year plus. there is also the fact -- think about this, apple users touch tore products it could be 1,000-times plus a day it's almost an addictive factor to this. which is a powerful testament to where the earnings can go. second, take two, investment at loop take two is i'm going to capitalize on what is the first monetization opportunity within the metaverse, yes, the metaverse will be real it will take up a lot of our time i think on the gaming side. the third is another company we're investing in it is in joy this is an upcoming spec i realize it's not an attractive segment to invest. what joy is doing in 25 years of commerce, they're experiencing commerce at home they've upped their engagement with apple

they have three apple marks, earlier this year. they've ramped it to 14, more recently, founded by ron johnson who started enjoy. this company could be the third leg capitals retail. >> gene, appreciate it i'm in the metaverse with you. maybe we'll do a "squawk" verse. >> for sure. >> thanks. if by definition it's a fictional universe gene just said is real. >> exactly >> you know what i'm saying would be an avatar >> you know what i'm saying. it's a fictional universe. he said it's real. how can it be both >> it might be an assimilation it's hard to know. god help us. >> this feels like a simulation right now. coming up, a big lineup. still ahead, check it out. kemi novogratz, richard fiber and --

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begins right now good morning, "squawk box" right here on cnbc u.s. equity futures are looking a lot better than they were looking 24 hours ago right now the dow is opening up 310 points higher. the nasdaq looking to open 124 points higher. the s&p 500 up 38 points we will see whether that holds up or whether some of those folks who bought the dip yesterday will flip. lots of questions this morning. >> the federal reserve is beginning its two-day meeting today. it's got to get started today to finish tomorrow with questions about whether it's ready to start reducing its asset purchases. have i got that right, steve, today? we got to get going. steve leishman joins us with the

i don' outlook of the markets in the cnbc -- you got the cnbc service for us >> i do, yes, man, i do. >> that's awesome, steve, tell us about it. >> just relax, joe i don't want you to have you know an incident here. i know how excited you are i am excited, too. the taper announcement cometh. just not this week, according to cnbc fed survey. markets expect the announce the $120 asset purchases in november to begin to tapener december the fed is expected to cut by 15 billion a month. the first rate hike does not come until the end of next year. it's early august just before the spread of the forecast now nine of our 30-plus respondents think it will happen tomorrow that compares to 17, looking to a november announcement. and there is pretty good agreement around the september start to the taper some are banking on it earlier, some a little bit later.

you can see december there is the median forecast. all this happens amid widespread, rates won't move for more than a year, despite some anxiety, to the fed's own forecast tomorrow could show that expectation for a rate hike in 2022. the chief u.s. financial market economist from oxford says the challenge for officials will continue to delink the timing of tapering from eventual rate liftoff amid splintering views in the market committee. market expectations have eased is insurance the more optimistic days in the spring, when the reopening was gathering steam. back in april, they were showing expectations for about two quarter rate hikes next year now one is fully priced in the rate hike has been priced in for a while. we'll see now if the fed actually is forecasting that rate hike is what spooks markets. joe. >> in your view, have we moved beyond the noise of the last

week, the things that you were reporting on and the reason i ask, i'm just wonderinging whether it would embolden progresses that already had it out for powell, because they don't think he's strict enough in terms of regulatory issues with the financial sector, does that story, do you think, embolden them to say we need a change or is it already in the rear view mirror which i think it's already in the rear-view mirror but we'll ask richard fisher, maybe. >> i think it's not done, joe. i think the fed has some work to do in powell has called for a widespread review of the fed's ethics code of conduct and its trading practices. so i don't think that's done i think there could be questions tomorrow to the chairman about these stories that we have been reporting and others as well so i don't think it's done the question becomes, joe, i think you really hit the nail on the head here. does the story have life in the

political sphere you know, you can only do so much as a reporter you can put the facts out there. can they pick it up? what's interesting congress itself is in its tradings, it's interesting to see congressional questioners ask powell their conflict of interest he might say, hey, what about you guys >> and we never did talk about oac's designer >> attacks it's delicious stories in the new york post ever >> so there's hypocrisy, everywhere, so you're right, these congressional people will be securing muni bonds when they're just, so i don't know what, but the liberal wing has it out for powell. but the moderate wing, he's getting a lot of support there from a lot of people are stepping up saying reappoint this guy

so i would imagine -- >> let me make one quick point, joe, i think powell cares about this stuff and somebody said to me that powell would see his own portfolio go to zero to get the fed's reputation right i think that's accurate. so i think he's going to take care of this me may take care of it in a way that creates much stricter trading regulations for the federal reserve. >> wait, steve -- >> whether or not -- >> in the past saying, you know what, i'm not going to own any stocks i'm going to plug it all in munis, so there is no questions for anyone next thing it's qe, you are buying munis i made the point you couldn't hold dollars so i don't know what you do. i guess you need to be a monk, give everything away >> no, i think you can take it a little far, joe, if you want you are right in everything you say. >> i know. >> chinese stocks. >> assertive

right. right. right. >> bitcoin >> the penny stocks, becky, are more affected by all this stuff. but i think, you know, if the fed came forward with a plan and said, hey, we have this new mandate to affect monetary policy by buying all of these assets that's changed the need for what our code of conduct says the fed, of course, will say, here's what we will do here's what will be permissible. i think the fed has to do a little more. the office of ethics in how they report what they say if you read powell's disclosure, they're very difficult to know when he bought things, where they're owned. the fed's own ethics officers misread them we misread, everybody misread them. >> see, that's my question in your report yesterday, you said that the fed originally told you that the stocks he owned were in a blind trust. >> right >> is that because he misread their own statements or misinforming

that's what i never understood >> no, they were not misinforming as far as i understand in how they made that mistake. we made the same mistake we asked them what the story was. they said, yes, you read it correctly is what they said to us and this is after, by a government's ethics officer, which makes me wonder, how well did they actually review it when it first came to them? so it's kind of interesting. if you look at it, for example, robert kaplan in all of his trades, he says the date is multiple he tells us he didn't trade in the blackout period. i have no evidence he did. but it's not listed there. in terms of exposure, transparency, i think these guys do not want to be seen profiting from their nerds knowledge but they have to do a better job i believe in disclosing how they trade and trade it i also believe in how the actual rules that govern what they did. >> the blind trust could have been for equities.

they were saying, yeah, he's in a blind trust, automatic munis, oh, i wouldn't consider on face value for me, i wouldn't think oh, that has to be in a blind trust, too you could think you are giving all the disclosure you need to by saying the stocks were in a blind trust. not even consider the fixed income and cds or whatever it is that you have to be in just to hold cash. oh, my money markets, are my money markets in a blind trust you know you see what i'm saying? >> we got to go, if you think about how it happened, joe, the fed found a need to do more in monetary policy than it had done before all of a sudden, powell had these things previously on his disclosure form. they shouldn't have been holding what the fed is buying that would have meant at the time they could have changed their code of conduct rules at the time. >> thank you, steve. >> this is your spinterview.

>> adam says, that's similar to the whole thrust of the piece is from the c nbc interview yesterday, dude. >> bingo >> holly shitzu. yeah, that's awesome >> great job take a look at the daily mail. that one is even more fun. >> it always is. >> we have much more on the fed's -- eat more chicken. oh, charming eat more chicken eat more chicken the cows are terrible spellers did you ever notice that >> dallas fed richard fisher coming up, martha stewart art will talk about her consumer business and the state of the consumer and the upcoming ouopping season, whether you shld anticipate hick ups there, whether you should start right now? "squawk box" will be right back.

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we'll keep you ready for what's next. comcast business powering possibilities. that was a good one. coming up, investors shedding worse in yesterday's trading session. it includes bit tony

lifts off as much as 10% the digital founder and ceo mike novogratz about what investors should deploy and put their money. as we head to break, take a look at the biggest s&p this morning. it's after energy was the worst performing sector. but some of that, anyway, "squawk box" is coming right back

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if you just hold it like this. yeah. ♪ i love finding out things that other people don't want me to know. mm-hmm. [beep] i just wanted to say... ♪ find yourself in these situations and see who you are. and that's just part of the bargain. ♪

. welcome back, everybody. martha stewart wart is expanding her direct-to-consumer business. she joins us right now with the details. martha is the founder of martha stewart wart omnimedia i can't wait to hear more about this because you are somebody who has transformed and grown over the years and kind of followed the consume tore where they are. we had you on to talk about partnerships with companies like a macy's on cannabis cbd this is about you having all of your own brand under one roof. right? >> yes, finally. finally. it's a very exciting moment. because what i've done is accumulate all the things i have

designed, that we have curated and partnered with different manufacturers to bring them all in one place, martha.com so it will be a nice experience for the shopper. because you will not only be able to buy, but you will be able to learn. we have so many thousands of hours of beautiful video that we have preserved, showing how to cook we have wonderful, wonderful ideas for the home-maker, the gardener, the entertainer. so all of this will be on our website in one nice place. you will be able to pay by paypal or amazon pay and your credit card, of course and you will be able to get really good value. this is what i've always done with my business i tried to provide not only great beauty and utility and usefulness, but good value so, for example, we have this and i didn't have it in front of me, but we have the dutch oven there is a lot of play on the

dutch oven, the enamel cast iron this one is $99 for the highest quality manufacturer and you can buy it for $99 you can also buy one that's similar from an older company for $369, which would you rather have >> $99. >> yes, but it's a good quality that will last you forever it's a beautiful design for you at home. and we are also creating new branded ideas with they have never put a name on a product before they have been, oh my goodness, somebody is calling me it's probably richard gere who calls me every time i'm on television >> he calls you every time >> we are neighbors. he's always calling me to ask me

about something and he loves interrupting when i'm on the news or something look that. >> obviously >> here ismargarita glass it's beautiful crystal. a large glass. they're trying to you know attract the younger millennial customer this is the way to really induce the younger customer who doesn't want a little skimpy wine glass. >> that's not cheap. those cost $450. >> a great wedding present can you imagine a wedding present or engagement present and you can build your collection behind it. >> we have talked to you over the years, this is not ending your partnership it's bringing them all under one house? >> exactly >> it's not cutting them out of the deal >> not at all. you can still go to macy's.com

and buy my fabulous bedding and kitchen wares and the other partnerships we have a delicious new food coming out, too, which will not be on the website. have you frozen food available in the supermarkets. but it's highest quality, frozen foods, frozen entrees, appetizers, desserts we've already won some verifies awards with our food stuff and they're available in more than 4,000 different grocery stores right now and growing exponentially. i'm very excited about that. they're icing our recipes and they are very delicious. you will be happy to just be able to pop a frozen entree into the oven and you can see right here, 40 different recipes right now. so, we're so excited about that. >> i was thinking about you this week, even before i knew about this deal. because we talked about

series's the last series's store closing. you are in a partnership with sears and k-mart. >> we do >> which is all under one house. >> we sold hundreds of millions of dollars of paint at series's, from beautiful colors, the market colors. i was so sorry to see series's, which was the richest thing series's could have been the amazon right. i love they had everything, they just didn't have the internet. and what a shame because that was, i loved pouring over the passenger of that series's catalogue. >> me too. it was something that was always in our household growing up. it made me start think about you and a partnership with k-mart, too. how your brand has gone in one direction. their stores have gone another what is it that you know online retailers have had trouble figuring out >> what they didn't figure south what amazon did figure out and what other up-and-coming younger

retailers did figure out that online shopping is here to stay. that people want the convenience of sitting at their desk in their kitchen on their trusted little phone and they can forward and it have delivered directly to ne's home. that itself the whole idea and i think that that is where they went wrong. and it's a shame but you know what, this is the way, this is the modern way. i have tried to keep up with technology as carefully as i could possibly, we're just starting to do it. i can't wait for my tiktoks to appear we already have a huge audience on tiktok without posting anything so it's a lot of fun we are, you know, we're trying to build, keep building our audience in as positive a way as possible we have a halloween special coming out on peacock, your lovely new streaming service, with snoop dawg.

it's going to be so much fun >> this coverage was unbleeshable i loved it. >> wasn't it fabulous? oh, i loved it so much can i say one thing to mr. sorkin >> of course >> he's keeping me awake at night. that new billions is fabulous. >> oh, thank you i'm just a proud pop i can't claim credit i'm glad you like it >> oh, it's so great tell the boys. i just adore it. >> martha, let me ask you about the issues we keep hearing just in terms of procurement and supply chain issues. is that something that you've run into trouble with, with your brands or should you be telling people about holiday shopping right now? >> well, pre-order we have deliveries promised, promised but we are on top of it as much as we can be and so, for example, you can pre-order the down vest. this beautiful puffer vest that

i've popularized so much i call it the new sweater. it comes in many beautiful colors we have a holiday one with a faux fur color great for every female member in your family. but pre-order, we're taking pre-orders on a lot of our stuff and especially our christmas things, too, our decorations are beautiful pre-lit trees that are coming and ornaments, all of those things are, you know, they are a problem. because of the supply chain and i think that that supply chain, it's kind of weird, don't you think? >> yeah. >> who is cooking it all up? who, think back in history of the last four years,b is getting back >> yeah. it has been a problem. sit going to cut into margins you think for the retailers in terms of what they have to pay to make sure the stuff gets there on time? >> we're not air shipping a lot of stuff in. it's way, way too expensive.

we're trying to be patient as are most people, most resellers. let's hope it gets straightened out quickly. >> in terms of the pulling everybody together in the martha mall so-to-speak, the online mall is it something that you think you will take more and more control in terms of the direct sales where you'll be leading that versus what sales either on a website like amazon or what sells in a store like macy's >> no, we can direct our customers to our other retailers for certain products so it's a very, it's a complimentary arrangement with our partners and but i just want people to see what the real offerings are in one place so they don't get confused the pricing will be the same it will be very good value for the customer >> we enjoy you showing off these wares, it's good to talk

to you. >> great to see you, too >> thank you still to come this morning, we're going to talk the china crackdown that sent crypto plunging we'll do that next plus the fed's two-day policy meeting begins today find out what to expect from the dallas fed president richard fisher right after ts.hi "squawk" returns

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. welcome back to "squawk. time now for an update for a company on the center of the debt crisis in china good morning >> good morning, andrew. the company's chairman is attempting to boost confidence in evergrand in a letter to staff, the chairman said they would walk out of its darkest moment and resume full-scale of the construction projects as soon as possible he didn't, though, explain exactly how. s&p said they didn't believe a rescue would come in direct report they said they only see them stepping in if there is a

far-reaching contagion other property developers. a lot small once today were trying to reassure investors that wouldn't happen for example, the co-founders of mid-size firms are an f. they are injecting $1 billion of their own capital into the company starting tuesday they also said they sold their property management business to rival country garden and other smaller property bond redemptions, so what's happening next we watch how the markets react tomorrow when the company will go back to work on thursday another important date forevergrand specifically the company is going to have to milwaukee an interest payment on a march bond it has a 30-day window from thursday to be able to settle that payment if it doesn't, it does risk

default. guys >> we will keep our eyes on the story, of course it doesn't sound like it's going anywhere fast. nonetheless, thank you we are going to continue talking right now about crypto currencies, because they have been one of the biggest victims of yesterday's sell-off. joining us is mike, try to understand where this is all heading, whether this is a buying opportunity, if you will, to buy the dip or there is something grander, talking it's a play on words about what is really happening here, mike. >> listen, the crypto marksets have had an amazing run, an amazing quarter. there was a tremendous amount of activity around what we'll call level-1 block chains people realized the story is not just bitcoin but it really is web 3 and missing web 3 would be like missing the internet. so we see lots of mine pile in i think the market had itself a

little too long. the china new scared people worry about fed coming out, talking about statement points and regulation gary genzler has been the tough slichl there was rumors around new york that the fcc was showing up subpoenaing people. there was a lot ofner v nervouss in the market. i think those are very important levels for people to watch as long as those hold, i this i the market's in good shape i see nothing but engaging activities from our investing around corporate clients the level of inquiry, the level of business hasn't been hiring you know they came out in letter round for a project in europe and 660 million capital rates. so we see so much capital in

private ways lissen the prices are prices it was an ugly day in crypto jed. >> two issues. let's break them down. one is china, how important is the china market of bitcoin and etherium clearly, we initially spooked fo folks. >> listen it was a lot more important five months ago. miners have moved out of china china was never a big source of innovation in space. but it was a big source of trading. i think there is plenty of trading in china the chinese are smart. it's harder and harder so i think it's less and less important. but, you know, people do worry one of the biggest worries in crypto has been a stage point tether tether has performed very well

through this entire thing but, people have this idea that tether has got lots of their staple cones back on chinese commercial paper and if that was the case and evergrand blows up, you got to think chinese paper is worth less. so some of this was a reaction to say, oh my goodness, if tether goes, that would be a bad thing. tetter is talking about stable coins, the treasure i have on stable coins i think you will see them come one guidelines and say, hey, the stable coins are actions fed up by fed banks so that's going to be, you know, something we watch closely over the next you know week-to-three months >> mike, one of the things we did see in the last 48 hours was coin-base step back from offering an interest-oriented product, if will you, in part, because of the objections of the sec. brian armstrong had been quite outspoken against the sec but

appears to have taken a mu tax away from that how important is that? >> listen, you know, the crypt as to market is in this growing up period writ started as a you know a movement outside of governments. right? and i think there is a real realization for it to make the next step. it's going to have to work with govern fans. that said, people in crypto want good regulation. gary genzler has come in he is a very smart guy he wants to be the sheriff of the town unfortunately because this is a new asset clarks it's not clear where the sec's powers start then do they have the power to regulate things if they're not securities and so, there is a lot of you know pushing and pulling right here both in d.c. and amongst the different regulators i think it's important - >> you mate be getting a call from martha right now?

richard gere could be calling. who knows? you want to pick it up we all like to listen in maybe gary genzler is calling. what i was going to say is one of the things you hear from a lot of pro points of crypt as to right now is we want regulation. we know we need regulation, then when it comes to the brass tax of dealing with like the actual regulation, they say, no, no, no, that actually is bad regulation so how do we get from we want regulation in this sort of philosophical -- i don't know if it's really philosophical that you want it even or just that everybody wants to say they want it because i actually think when you get to the brass tax of it, you don't want it. >> that's not completely true. listen, i personally think some of the big lending platforms, right, that are taking customer deposits, leveraging up very large levels of leverage, where the consumer might or might not know they're taking credit risks with those lending platforms

there needs to be a lot more exposure around that maybe regularly. there is a lot of banks set up you know, if they get big enough, those are problems rating to happen, so if i was genzler, i would be looking into them i think that's partly the message he said to coin mates. i don't think coin base with their balance sheet and their ability to raise capital is really a big worry right at this point. and so i can understand brian's frustration, but, again, what's complicated is it's not clear what the sec is allowed to regulate they regulate by lawsuit, not by rules. right. it would be a lot easier if they regulated by rules that's not their m-o >> ray last week said once bitcoin gets too big, too much of a threat to, you know, to the government, to the dollar, whatever, that they both have the means to kill it and the

will and that they will kill it. and so my question is, the way that bitcoin works, is it possible that they could do that if they decided to and, second, he also said there is no intrinsic value. we've talked about that a lot. i think if you read 20 pages, you can come up with a rational why there is intrinsic value i'm not sure you spent the time. can you address both of them >> listen, i don't think people at this point are worried. if bitcoin really is digital goals. we're one-tenth the market capital goal, i don't think it's a huge worry as a threat to the dollar listen, if our finances get so bad that we start looking like vim bobb we or venezuela, which is no means i think in the short run outlook and people are flocking out of the dollar into some alternative asset, yeah, then governments will alert and do all kind of crazy things.

we're all if a lot more trouble than just bitcoin at that problem. people are buying bitcoin based on a slow depreciation of the dollar >> it's not digital gold, mike, if it has no intense ig value, it's not digital gold. >> you know, listen, we can get into philosophical debates of what value is. >> right >> a matisse paintings can run 100 million. there is 150 million people around the world that decided bitcoin is worth something so that's enough for me that that gives it value. ut like paul jones, abby johnson, bill miller all these legendary investors believe it has value i think, therefore, it has value. i'll debate anyone on that topic. listen, i would take drunkenmiller and jones over the skeptics any day win look at

their records. >> that sounds like group records, are you not saying why, are you saying everybody else has intrinsic value. >> that's what value is, vote it's perception. >> well, the other question that i was going to ask you is, you know, a lot of advocates work for bitcoin, especially him some of the other currencies as well, they are supposed to not be correlated that is a part of the argues you want to own this because then this goes down this will hold up or go up, what have you. it doesn't seem to be the case >> yeah, that's for sure. >> we're a very young asset class. bitcoin is 13 years old. as an asset clarks it's staushl. it's less than a year and maybe four years when you put the whole thing together and so there's lots of wealth that's been created when people get nervous, they get nervous across the spectrum. the nft market, an unbelievably dynamic market is being fueled

by crypto wealth it's going to be that way for a little while are you seeing some breakdowns in correlation right? we're seeing new people show up to the market because they realize this isn't just an asset trade. it's a technology trade. right? that is a theory on all the other level 1 watch chains, salana luna are laying infrastructure for the new economy. so it's a tech play. and we're seeing new investors asking us tons of questions to understand the tap so i do think give it time, you'll see you know different buckets like you see equities that are correlateed.n right now -- >> mike novogratz always good to see you. thanks for weighing in on it in the 8:00 hour of "squawk," kyle bass will be sounding out on the rks.

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to secure our digital future. we innovate to outpace cyberthreats. so you can make the next day safer than the one before. we've got next. welcome back to "squawk box," everybody. the futures are indicated higher but not as strong as we had seen earlier this morning we have been over 330 points at

one point, the dow futures now indicated up by about 260 points of course that comes after a decline of more than 600 points yesterday. the dow bouncing back from down almost a thousand to 600 now bouncing back more with these futures. s&p futures right now indicated up by about 32 the nasdaq up by 112 universal music group shares are surging. it's europe's largest listing of the year the company is, of course, behind artists like lady gaga and taylor swift it and at around $29.37 a share. though that stock up by 36%. general motors is going to begin replacing fault my modules in chevy bolt vehicles. they were recalled and the replacement may start next month. many owners will have to wait months to receive the fix.

it plans to roll out battery monitoring over the next two months that stock up by about 1%. still to come on "squawk box," former dallas fed president richard fisher on the fred's two-day policy meeting later, hayman capital founder kyle bass and much more, "squawk box" will be back after a quick break. my son romeo has sought counsel with some strategic advisors. they suggest that we marry our fortunes with...the capulets. blasphemy! fear not. these advisors managed one of the largest mergers in history, creating billions in value. billions? plus, they have experts in global trade. this merger shall be a boon for our spice business. and set a course for growth. here, here! friars, send word at once.

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policy meeting for a look at what we can expect let's welcome former dallas fed richard fish, now a senior adviser. every time we see you there is more stuff to put into the mix to come one what type of conclusion we should draw. we've got delta and recent employment reports some good, some bad. we know how hard it is to find people and there is demand but not maybe enough people. the fed is in a tough spot what would you do? what would you be recommending for the fed if you were still if that room? >> i think it will flush out the idea of the tapering of the balance sheet. i think the surprise, joe, for the most likely thing you will see that's a little different is how they move the clock and i am willing to suggest one of the

surprises might be, you will see more do zo move inward in time as to liftoff the zero bound so that to me will be something to watch for. i'm not sure given all the background noise right now much more definition all tow we might of when they might begin tapering the issue with tapering is the speed with which it will be done over a ten-month period as it was before over a one-year period, over a shorter period or longer period. those are the kind of things that need to be articulated. we will get a change in the doz i think that will be noticeable. >> a lot of market participants took solace from jackson hole, they said powell clearly delineated the difference between the beginning of

tapering and raising interest rates him what you are saying is that is not what she should take that rates will rise sooner than we anticipate. is that going to be problematic? >> joe, that's not what i'm saying i am saying the splt will plop thoefr forecast there is a significant probability. that forecast will rise. we move closer to 2022 this will be the ft. we have 2024 on a plot so, now, powell guess out of his way to make sure we don't emphasize it too much. but people do notice i'm a former do. i'm a retired dot. it's kind of a highly subjective silly exercise in my view. but that's the only way you get a sense the way the committee is thinking at this moment as

that's the only thing i expect to be different. i don't expect the language to change a whole lot there will be commentary we know this, covid d is beginning to roll over we're seeing it in the data. that might give a little more encouragement the economy is doing fairly well. slowing down significantly in the quarter. but we have a robust july and a little slowdown in august. so if this rolls over, then we should have better economic performance that is being projected right now in the fourth quarter >> so then we're still not seeing a true price discovery in the ten year f. you say what is happening, nothing is happening there? wouldn't you, picture something happening there? i guess if it wasn't being manipulated by the fed >> i this i the market's fairly complacent right now the business of tapering the

balance sheet has been in an attractive place to be it's a negative yield, the yield has come off the floor a little bit. if you saw yesterday during this mi minor minske moment in china, every time we have a sliver go -- shiver go up the line is, we see a stronger dollar. that means we have an appetite and the europeans as we expect will accommodate the cbd there is more buying power in the dollar and the tenure treasure. >> richard, what do you make about the hoopla about kaplan, powell, personal accounts, personal finances, and what do you think there needs to be of a

no greater should it will regulations? should they not do anything? i made the point they can't own dollars, because their actions what can they own? >> so i went through this as well we were scrutinized it was the first time they were released of the holdings we had in broad brackets then ever before it did not influence my decision-making. kaplan brand announced they will get out of those securities entirely and remember kaplan was talking about his own book he's a hawk. so i tell you what i did during the crisis of '09, i didn't buy securities i bought first edition rare books. the original dictionary and winston church mil hills, now

collectibles are another example of how the markets are robustly priced here, have soared i have probably, if i were to sell my original oed, it's very rare, it's in mint form. i can sell it almost eight times i paid for it. i got away from securities entirely and i recommend, again, i want people, kaplan is an extraordinarynary example. he understands markets i want him on the committee. because he is actually knowledgeable about how financial markets were, that's why we picked him at the dallas. i hope this blows over they will make charges i think the changes will be made. >> i can needle you and say you knew there was qe infinity coming they were going to stay away long you knee those assets would be

marked up. >> i won't say that, richard >> the winston churchill book. that guy >> i have every first edition of every book he ever wrote in mint condition, yes, i do so there you have it you know, i just felt i can buy something and they were being hammered. >> we got to run, richard, thank you. good to see you. >> thank you, joe. when we come back, senator rob portman joins us to talk spending, taxes and much more. that's next. plus, we will be getting the latest take from hayman kyle tss and our exclusive interview ofhe morning ofhe morning uber ceo darragh hosrkhosrow --

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that oth people don't want me to know. mm-hmm. [beep] i just wanted to say... ♪ find yourself in these situations and see who you are. and that's just part of the bargain. ♪ good morning stocks set to bounce not enough, though, to make up for yesterday's losses, it is a start. we will run you through the morning's pre-market action. johnson&johnson out with a trove of data, including an efficacy of booster shots and what

happens. we got all the details straight ahead. plus, uber turning its first adjusted monthly profit this summer saying it is cracking forward in a company milestone, a break-even quarter final round of "squawk box" begins right now >>. good morning, welcome back to "squawk box" here on cnbc i'm joe kerr none along with becky quick and andrew ross sorkin u.s. equity features are holding onto the gains, the bounceback we saw from yesterday's sell-off we are up 260 points, we were up over 300 for a lot of the first two hours of the show, but

pulled back a little some people don't like a quick bounce back like this, you know, the ideas that you need to make a better bottom or it was too easy too fast. you never know. >> we seen everything over the years. we seen where you need to go back down and we seen it where we never do, so it's interesting the dip being bought at this point, andrew. >> yep, meantime, johnson&johnson out with a bunch of new do you that, including what happens with two shots since the originally intended one shot with shots now spaced out two months, the company saying they saw protection against symptomatic moderate to covid-19 rise to 94%. that's in the united states. but globally the protection was lower. it was only 75%. also we leased new data on anti-body levels following a booster shots six months after the first shot j&j says those rose nine-fold after one week to the booster after 12 fold after four weeks after the booster. it was given two months out.

the anti-body levels rose four-to-six times. the idea here people may get more protection with booster shots when they're spaced out further apart versus a plain old two-shot regiment. the company is releasing data from a real world study that found a single dose, strong and lasting protection against hospitalizations with 81% effectiveness after several months lots of people trying to figure out what's happening as we seen more breakthrough cases, chris rock earlier this week announcing he had a breakthrough case and had johnson afternoon afternoon johnson, which had a lower efficacy early on. >> he's a comedian, i don't know what's real and what's, i don't know >> i'm not sure. >> go ahead, andrew. >> he said j&jr around was calling himself two-shot rock. >> maybe he wants the second shot he tells people to get

vaccinated i think the weird thing is we don't even have official statistics that tell us how many breakthrough cases there are all of us probably know plenty of people who have gotten breakthrough cases the cdc scott gottlieb was telling us yesterday he was only tracking hospitalizations, not the number it's great if it's a breakthrough case and it's not severe you don't wind up in the hospital the prop problem is, if you aren't tracking those casings, you don't know where it's spreading from there again if you it have, you get it, you can be contheyious to those who haven't been vaccinated or have immune issues, too, it's something we continue to watch. david leonardi has a column today in the "new york times", talking about where are the tests? we're not all that much better off than we were in march of 2020 it's hard to get tests, if you are looking for rapid tests to maybe let you know before you see people, before you go somewhere, if you go into the office or not. if you have these like they do

in europe, it would be a much easier situation to try and deal with those things and cut off 98% of infections. >> i always thought the testing was the answer, instead of spending alet his dollars, we could have spend 50 billion and had massive widespread testing you go here, you get tested. if you have done that, you probably you know all of the money that we had to spend, i think it would have been in a different place. >> you don't disrupt society people can go to school to work, not worry necessarily about doing it, if are you testing more often let's get back to the markets right now. yesterday's big sell-off in what looks like a bit of a bounce this morning senior markets commentator, mike santoli joins us i was watching, everythingyou were talking about yesterday as we headed toward the close we seen that bounce toward the end. you were talking about what this means, what we should read into it what do you think about the bounce in the futures this morning? >> yeah, that bounce, becky, you started around 3:30.

it seems as if first of all the internal action in the market looked like a thorough flush not a crescendo like that was it that's all we needed you had 90% of the volume to the downside, it was indiscriminate. you say, turn around, tuesday's coming that's obviously a tendency the market has, it teseems there wa no credit buying here's the s&p etf so it shows the pre-market bounce stocks when they pull back, they go down in price and back in time yesterday's low, we went to july first. so around that 4300 level. that's when we first got up to the july 1st level that's also represents a catch-down of the intex so-to-speak with the average stock, which is already down way more than 10% from it high yesterday. so it could be this is a little more after a cull min nation of a recognition moment as it is the start of something look at the nasdaq 100 etf,

though there is a bit more air under it yesterday's low. all it did, it went back to where it traded in august. so that was the leader on the way up it was actually an under performer yesterday, it benefited from a tremendous amount of weight, recent flows it seems that's where the money was, you can turn into cash, quickly. take a look at the ten-year treasury yield, i think this is important of giving people some sense it was not a broad macro-stress event the yields were down, in a modest way not firming up in terms of yield now maybe we are rapped at 1, 4. the point is it was fought really a rush a. head-long rush for safety as we talked about a. lot of these issues such as evergrand, which has been an ongoing thing for six months we spent all day talking about it this has been a six-month meltdown maybe that also is reflected in the fact it wasn't necessarily

something fresh that just hit the markets yesterday. >> mike, i've heard of a lot of people point to other things that can be not a tipping point, but something else that would maybe poke another hole in the bubble or the dike or whatever you want to look at this situation, one of them is the debt ceiling and if something were to happen, that's coming up next month what do you hear what do you think about that >> i think it's an element weighing on schooling. you can see it, look at the short edge of the bond market. clearly, people are pricing in some uncertainty about that i doubt anybody thinks we will get there in terms of reaching the debt ceiling or having a standstill or a debt detaumt it represents this overall kind of fiscal to-to list that isn't really getting done. so i think that's combined with the seasonal factors, with the earnings forecast are at least flattening out they're not declining. it show us you maybe an overdue

setback in the index is not necessarily all that surprising. i think again it's tough to isolate the three key factors. but the fact we haven't had a 5% pullback interday yesterday we get to that 5% mark and bounce. today the pre-opening levels, it's right at the area where you wanted it to hold on the downside yesterday the market doesn't part to preserve uncertainty on both side of the trade. >> confounding to most people as often as possible. mike, thank you. great to see you leading democratic lawmakers say they will try to pass a bill in the coming days that averts two possible blows to the economy. a government shutdown and the breach of the u.s. debt limit. but it's not clear that a bill like that can get through congress especially past republican who's are upset about the 3.5 trillion president biden wants to overhaul the safety net. joining us is ohio senator rob portman, a republican. and senator, it's good to see you today.

thanks for being here. >> good morning, becky, thanks for having me on >> so let's start with the debt ceiling and a showdown that's taking place here. schumer and pelosi have said they are going to move legislation on this, mcconnell from the republican side just said forget it, you are not getting any support from us. i know a lot of us have kind of gotten enured to these debt ceiling talks. it's a crisis, it seems to get averted at the last minute, would you vote no on something to raise the debt ceiling which is basically agreeing to pay the bills that we have already bugged for this year the treasury secretary says we'll run out of money in october? >> yeah, it is eend of october so we're not up against it typically, we wait until we are up against it. so this is putting the cr, which is the september 30th deadline along with the deadline so it's not necessary to do it now second, face it, this is all about debt accumulated since

august 1st we had a debt increase until that point the vast democrats insisted over the objections of republicans, remember the $is.9 trillion passed in march and now they're talking about 3.5 trillion, really closer to 5 trillion, when you look at it honestly over ten years, again without a single republican vote so the argument is quite simple, which is that democrats have the ability to do this on their own. just as they did the 1.9 trillion on their own and the 3.5 trillion on their own, which is the biggest tax increase in 50 years, in addition to social spending, it's the biggest social program since the new deal that's the argument. i think it's a logical argument. the part that i like is that the debt limit actually forces us to make some fiscal decisions in a previous segment, the comment was made about fiscal policy more broadly if you think about it, the only time we've reduced spending is in the context of debt limits. that was how grand ruddman happened back in the day

so i do think if the opportunity had that broader discussion about the fiscal crisis that we are facing as a country. >> what do you think might get resolved you kind of mentioned back, harkened back to some days where there were things that got done in a bipartisan manner it's hard to imagine that today in washington. >> well, it would be a bipartisan agreement to deem with the spending moving forward. so the cr that is being september to us is just to continue the level spending from last year probably two anomalies liss or exceptions to it but that's really not the answer that would be kicking the can down the road another couple weeks probably, maybe the end of december at the most we're not dealing with the actual spending of the country so we have to have an agreement on that that agreement ought to come along with the debt limit we ought to once again say, let's put caps on spending here, given the fact we are approaching a $30 trillion debt that it will be near record levels given the fact that they will

spend another 3.5 trillion in their context. despite the fact the economy is picking up on its own, if anything, the biggest concern is inflation. as you guys talk about constantly the 3.5 trillion you exacerbate that inflation and make it worse. i think it's time for a discussion and debt limit tends to be the discussion where that happens. >> senator, the two, the infrastructure bill and the 3.5 trillion bill are still linked with some people with speaker pelosi and others, at least that's the way they talk yet you have senators manchin and sinema manchin said let's postpone it and have a pause until next year i'm wondering what the body language, posturing is in your view let me ask you do you think we actually do finally get just the infrastructure bill and no human infrastructure gets done in 2021

or you think manchin finally says, okay, let's do 2.5 and we'll get that done and we'll get the infrastructure do you see a stand-alone that you helped? do you see a stand-alone infrastructure bill getting done if in other bill is done >> joe, that would be what's best for the country no question about it the infrastructure bill is long-term capital expenditure. realistically, it's possible it's not in our hands, as you know, because the democrats have chosen to do it with democrats votes on they've put themselves in this bind it's other moderates in the senate, democrats and also a number of moderates in the house. the speaker has a four-fold majority he has about ten mothd moderates that don't like the direction they're going. i hope they do it will be terrible for the country. it not only raises taxes the

most in 50 years it hurts our competitiveness it's a huge expansion of the welfare state that, you know, frankly is not timely. we are spending way, way more than we are bringing in already. so joe manchin is absolutely right. this is not the right time to do it he is very concerned about inflation. he should be, he is talking to experts, kyrsten sinema is an independent thinker. she'll do what she thinks is best for arizona and the united states i think it's not unlikely your first scenario could happen is we focus on what works, long-term spending to help the economy, to make it more efficient, the infrastructure bill f. the president were smart, that's what he'd be pushing. by the way, he supports that it's supported on a boorp basis. that would be a win for our country. -- on a bipartisan bafts it would be something we need with all the other crises we are facing. >> if you would talk about the issue of carried interest and the bill that has at least been

proposed thus far, democrats not effectively getting rid of carried interest, interestingly enough, making it a five-year window for a holds period. does that surprise you is that something you would support? would you not support it some people suggest the way it's structured, it means that you have to own the asset for something on the order of more than five years to make it, to actually get the tax benefit >> yeah, hon stly, andrew, i was surprised to see how they reported that out. i thought they were going to get rid of carried interest, with i they talked ability. they raised capital gains and increased taxes on small businesses, because if you are a pass-through entity, will you get hit with the individual income tax increase, it's dramatic it's a combination of a number of things. i agree with you, i was surprised they didn't do what they said they were going to do. it doesn't mean it won't happen. it's more likely the senates will add that to it.

i've heard a discussion they will do it in the rules committee in-house in other words, they will add that to the bill along with something on salt. the state and local tax deduction. so we'll see the problem with all this, when you combine it, they're kind of like trying to fit ten pounds of suggest har into a one-pound bag in terms of spending on the tax side, they're putting at rick the recovery the recovery is going better than anybody expects it, in a way, the cbo, they said we'd be back to pre-pandemic levels mid-year we were. inflation is our biggest issue and work force and we got to be sure, you can't exacerbate those by doing more stimulus that's the wrong thing to do right now. >> senator, is there any middle ground and i'm talking basically about through the democrats? if joe manchin, sirs kyrsten sia and the moderates in the house

pulled out on this, it seems the progressives are going to come back and refuse to vote on anything lower than they'd like to see does anything get salvaged here in they get to that position and the democrats can't figure it out themselves is there going to be an infrastructure bill that gets passed or do you think everything crumbles at that point? >> i would hope the infrastructure bill passes it's good for the company. it has a lot of priorities, i think they think are important so let's have a win for our country right now. i look at what's happening in the crisis at the border, with afghanistan, what continent to happen in terms of the chaotic withdrawal caused issues with regard to evacuees in our country. look at what's happening globally right now in america's press teevenlth i look at the fact that it's eating away we got a lot of issues right now. wouldn't it be nice to have a bipartisan win and do something that's good for the country long term and puts us in a position to be more competitive, vis-a-vis china and other

countries. that's what we ought to do president biden supports it. republicans support it 19 republicans support it in the senate so my hope is we can get that done if we do it will be a win for not any political party but a win for america. >> senator portman, thanks for your time today. >> thanks, becky it's joe coming up, a pair of reviews, first china hawk kyle bass weighs in on what's sending shock waves through the department and live with darragh khosrowshashi, uber ceo. stay tuned "squawk box" is coming right back

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in a letter to staff, the chairman of embattled chinese property developer evergrand says his company will walk out of its darkest moments but our next guest says china's issues are more serious, joining sus kyle bass, founder of hayman capital management there is a lengthy piece on the page of the journal that tries to give background to some of the moves president xi has made and put it in context n. summary, some of the reforms from 40 years ago that lit a fire under the chinese economy through capitalism that president xi in his own interests to get a third term is reversing some of those to form

a new type of economy that is much more involved in terms of being government-led is that what you see happening there? >> yeah. hi, joe. i think it's very important to understand what president xi is looking to do. they are experiencing similar problems that we are in the u.s. and other nations are experiencing what the large deaths of the central bank, china's credit system has grown at huge percent annuals of gdp every year since the financial crisis of 2008, 2009, they're entering this period of weakness with over $50 trillion of credit in their system and their gdp is around 15 trillion to put that into perspective, the u.s., we had 17 gdp and 17 trillion of on balance sheet

credit the point being is they are 3.6 times. we are 1.7 times they were at the capital markets business for 20 years. that i have only adopted a person system in 2001 and that's when it all began. so what's happened is the greater picture is chinese birth rates are collapsing they're now 1.3 births per woman and you need to be a 2.1 to actually sustain your population so chinese population dynamics are at a critical level. the reason being the chinese men can't afford houses, so they're living with their parents and the fact that evergrand went on a credit binge and built all the housing and chinese property took off because the central bank printed so much money what he is trying to do is reign in property presence and as quickly as possible because china is on an unsustainable

path low everyone that has it everyone that believed china is going to grow at 6% per year add an item is just dead wrong. >> if we just divorce ourselves from any value judgments about china and think about the future of the plan -- of the globe, we always think about the chinese consumer and we all at one point wanted to move forward in a symbiotic way, where we sell thing to china, their consumers get things from us, i know you maybe don't feel that is possible i know jim has some different points, but the moves that xi is making right now are possibly an impediment to chinese growth, which would be theoretically good for the world the six biggest companies already lost a trillion dollars in value. they're talking about, there is a quote the big thing is mr. xi suppresses much of the entrepreneurial energy and innovation coming out of china,

if they become much more government centric and much more socialists, in other words, which we are grappling with here ourselves s. that the worry that china transforms itself back to the way it was before it embraced capitalism? >> yeah, look what they've done to their gaming sector, look at the for-profit education sector. they've basically pulled the plug on many sector in their xa. they are reigning tech that require 50% of profits on top of the tax rate like ali baba and ten cent for the common quote common prosperity. you got to realize you are not investing in a real market there. you still have an economy with a closed capital account imagine if dollars start heading out? the chinese. >> the economy's quotes, his new system is saying this is a system that doesn't exist anywhere else in the world,

calls for common prosperity of more equal distribution of wealth achieved through government intervention in the economy and more steps to tax the rich to share the fruits of their skechlts i read it i thought maybe bernie wrote this i see similar sentiment. here's another quote western capitalism focuses too heavily on the single minded pursuit of individual wealth, leading to inequality, social injustice, i mean, this is what i hear every day here. >> but what's important, joe, are you hearing the narratives spun what is important is to look at the fact the fact is china has 400 million people they have been able to lift out of abject poverty into what they call the middle class there are still a billion living under abject poverty in the world of the nation. when your central bank prints as much money as it does, the

price, everything goes up in nominal terms. so you have the poor get poorer because you look at food food is up 45% in the last nine months the u.n. ag xood index have you real estate and food going to levels that prohibit the rest of your economy from participating. it creates major risks what they got to avoid is a social uprising, even with the problems, you see the chinese investors at evergrand rushing to the headquarters around china demanding the money back from the chinese police have been bult with those protesters i am sure you saw a woman saying evergrand will pay us back they are tackled and brutalized by the chinese police so no model of communism is worth over time we will see that ap over time with china.

>> do you view this as a personal move by xi to say in power longer than it would have normally been possible it has to backtrack, they are changinghorses and you mentioned that 400 million people have come out of poverty they are changing horses mid-scream >> yeah, i think they really got thrown untenable situation with the population dynamics and the credit growth. again you can't grow credit that fast over such a short period of time and not have it come up and evergrand is the first block in the jenga puzzle that will cause the jenga puzzle to collapse it's not a layman moment where everything is connected and you have to see which banks are solvent. this is the first of many you will see fall apart. for those people that believe investing in china is a good idea, that there is some chinese pot of gold at the end of

eldorado, it's kind of unreachable and they're not going to allow westerners to make money and by the way, westerners that have known evergrarpd's bonds will get somebody nothing >> what about the issue a company chine's size and the importance of that company and global economic growth f. they do regress back into a much more socialist system without innovation, without entrepreneurialship and benefits that acruise from capitalism, what does that say about global growth and what we're counting on is it good because china doesn't become a super, they're als goo

surpass us i think that's good. you remember long ago, russia said they would surpass us and japan. now it's inevitable china passes us what you see now is central planning is having a big problem with population dynamics and a giant well staff i don't think the chinese model works in the long term >> well, this scares me to the extent that, you know, if things don't go smoothly and growth doesn't continue the way it is and they aren't able to do what they need to do for tear people for the billion people that are still in poverty, then you got worries about i don't know

taiwan, have you worries about hong corporation worries that could end up in more than an economic war it could end up in some type of i don't knowactually conflict with the rest of the world we see signs of that already, around you >> they quietly took over hong kong you saw the most recent elections in the last few days i seen them simply arrest and detain and put away any pro democracy legislators. so they want to take over hong kong what happens with taiwan has major economic weapons we can use without firing a single missile. if that's, in fact, the way china decides to go. that's the big question. but as far as the evergrand situation is concern and the chinese economy, is this is a beginning of a retraction if their economy. loft is going to a lot of people they will continue bringing in

troubles, will beijing be allowed? absolutely, they l. will they form a company in the long run, global gdp is going to slow down a bit joe, that itself answer. >> it's so far beyond anything we think about anymore with the super power like china and russia now we know that there are actually military individuals or generals that have actually in recent months talked about, no, we're not going to be engaged in anything like that so it's not totally a ridiculous premise to even talk about it at this point i guess so it's i think the dangers in the world are increasing due to the invaeblt we see in china on the financial side of things. >> look at the chinese four years rhetoric coming out of their global tab loirksdz they've minsd their words about

what they will do if the u.s. engages more diplomatically with taiwan or if the taiwanese government arms itself, and let's just say if they believe they become more bridge represent, china has started fighters nuclear-armed bombers over taiwan in the last two months so everything is heating up on the militaristic side as well. the question is, again, what will the west do about it? we didn't do anything about hong kong >> yeah. okay kyle, we got to run it to be continued. good to have you on. we will hopefully have you on again soon and maybe things will, i am hoping for improvement in some way in all these things, but, thank you >> we just got some new housing data diana oleg joins us. what you can tell us

>> reporter: it's a headline beats and building permits up six percent, up basically 4%, it was driven by entirely multi-family that doesn't mean we don't need more but honeing in on single family that's where we see the disappointment we saw single family permits flat down from a year ago and single family starts also coming down that's where we need to see more construction one more important note in this report is that the number of housing units that have been permanent but not yet started is up 50% from a year ago and that is again due to all these supply chain issues we saw it in the earnings released yesterday from lennar, which missed on revenue for the first time in two-an-a-half years. they couldn't get the homes closed they lower guidance, d.r. horton lower guidance and single family having trouble with supply chain issues that is slowing down their

production they are able raise prices you aren't seeing that slowdown. so permits again for single family, not what we wanted to see. multi-family, though, driving these numbers higher back to you guys. >> andrew. >> coming up, it's uber ceo is going to join us live. he's right there it's an interview you do not want to miss on the path to profitability. they announced it this morning we will talk to the man in charge are you watching "squawk" on cnbc mmercial real estate exchan. you can close with more certainty. and twice as fast. if i could, i'd ten-x everything. like a coffee run... or fedora shopping. talk to your broker. ten-x does the same thing, - but with buildings. - so no more waiting. sfx: ding! see how easy...? don't just sell it. ten-x it.

welcome to "squawk box." uber signaling it can be right back even or turn just a profit

in the current quarter ahead of schedule it said it adjusted profitability in july and august ands it believes it is heading for a break-even third quarter, up to 100 million in adjusted ebitda in the fourth quarter joining us is uber ceo khosrowshashi. you said to you, this is the question here we are sitting together you would have thought it would have happened in the midst of what is still to some degree an ongoing pandemic >> it's amazing the way the world change i think the great thing is the flexibility of the model and actually here we say, here we are, still in somewhat of a pandemic and our gross bookings level are 35-to-40% above the ipo. and we are very clearly on the path to profitability. so super proud of the team for what they've accomplished.

we got a lot to do. >> plain what's happened here. obviously, this is ahead of plan after plan. >> yes >> given what's happened in the world. >> well, what we did was early on we identified our need to bring on more drivers to the platform so in the second quarter, we really leaned into supplies, especially in the united states to reinvigorate our driver base and grow our driver base in the u.s. and we're seeing that now the benefits of that early investment in q3 the business in terms of volumes, we had our best week ever last week the service, in general, search levels are coming down etas are at their best levels since the beginning of the years. the service, itself, is getting better, still not where we want it to be and as a result, margins are coming to what they have been on a historical basis, both on the right side and the eats side,

the core business if q3 we think will be close to break even or profitable we have both our rides business performing at really high levels and our eats business performing you get to a good place. >> how much is a function of search pricing during the commercial break. i joked, not so much when i get anneer uber, i have to -- my home, it's two, three times what you think it would normally be. how much is representative of the margin and what happens over time when you get back >> so surge pricing isn't about margin it's when we surge, the driver typically gets their fair share of the surge it's about making sure we attract drivers to those areas so that surge pricing goes down

wmplt reseeing surge pricing essentially at its lowers levels since may and moving down as well, we're not where we want to be the margin situation is much more, supply and demand are much more in balance now, really in the past two weeks, we've signed up 5% more dryers onto the platform so the flow of drivers is quite positive because earnings opportunities now are extraordinary, $95 bucks an hour, working whatever, wherever you want >> there are 35 an you're today how does that compare to say 4 months ago, what would a driver have made then >> it depends on where they're driving, it is elevated, about 20-30% of where it has been. walk us through the labor going forward. i think our system is showing it can adjust and operate in a high cost labor mark as we are now.

we're delivering best weeks level, prices come down and the system adjusts >> in terms of pure volume, what do you think that starts to look like over the next 12 months is that going to expand rapidly or sustained if a steady state >> so volumes for us, the last week in the u.s. was the best volume week since march. volumes are improving as well, i think we will see pricing is going to ease up in the back half of the year and volume will especially accelerate. on the eats side, the volumes continue at very, very high levels that's translating into good profitability for eats >> i don't know if you saw doordash get into the alcohol business are you through the drizzling transaction. how does that change the dynamic? >> u not surprising doordash followed us into alcohol at uber eats, we have alcohol available in 23 countries, it's

up 245% on a year-on-year basis. it's a great category. the categories are fast freak, what do you want fast and how do households order frequently? food, grocery, alcohol, pharmacy all of these categoriesalcohol, pharmacy, all of these categories we want to become synonymous with uber >> we've been talking all morning the last two days, really, about china. the chinese market and what's happening over there you still have a big stake in didi, so i imagine you're watching this. what do you make of the crackdown? >> we're watching as outsiders but it's pretty extraordinary. i think ultimately the real question is whether didi becomes a vehicle of the chinese government to some extent, we are competing

against didi are you competing against a private company or the china government we don't know what the answer is the bigger question is, didi's operations outside of china. will they have access to real-time location from riders in mexico and brazil that's a big question that has to be answered by didi and the -- >> how do you feel about the stake itself keeping it, selling it down, potentially buying more? >> we're not going to buy more and the stake for us is not a strategic stake. so we look at that stake from a financial standpoint when it makes sense to monetize the stake, we'll monetize it >> what would you be looking for, given what's happening over there? >> right now, i have no idea what to look for we're watching and understanding what happens we have a lockup anyway.

we're in no hurry. we're running ahead of our path to profitability we have a strong balance sheet and we have plenty of other investments as well. we have time to be patient here and i think a lot more is going to -- many more shoes are going to drop here. >> curious in terms of the pandemic itself, relationship with labor, obviously you're requiring masking of the passengers, the drivers, where are you on vaccines and vaccine mandates at this point >> we're going follow local government mandates, essentially. we want to create the safest possible platform. in a uber, you see a lot of places that say, mask when you're indoors it makes sense to mask when you're in the car, open up the windows -- >> if you were to require a vaccine mandate for your drivers today, what do you think would happen >> i think the majority of our drivers are getting vaccinated anyway but we deeply believe in the right for drivers to earn when

they want to, how they want to as long as they're safe. and we think the safety protocols allow a safe environment and allow access to earning opportunities any time, any place. >> do you think we'll get to a point where there will be no masks in these cars and -- would you move to testing? we were talking about -- and becky and joe and i were talking earlier, if we decided to test, really aggressively test, instead of spending a trillion dollars, maybe life could have gone on. >> as a strategy as a company, we went all in on vaccines unfortunately, from a social aspect, we haven't gone all in as far as people's beliefs in vaccines so i think our making a bigger bet in testing is something that we should absolutely do, the cost of testing here in the u.s. is far too high compared to europe we would be very supportive of, you know, more testing all around business, personal, et

cetera. >> do you have a sense of when that's either -- or we're going to get to a place where it's going to totally change? >> i think we'll see increased momentum around testing. but to call out timing is a fool's errand at this point. >> when you think about this business, i asked you on the day of the ipo, when you reached profitability, if we talk -- three years from now since we're about 2 1/2 years from then, what does the business look like >> it's a lot big eger and it's sustainable profitability. and i think that's the position that we're in. we're in a mobility business on a global basis with very strong margins and now we're proving each profitability which is improving the core business, is going to hit profitability, possibly in q-3 and we're

gaining share. we're the fastest growing delivery platform in the u.s. right now. that's a great combination to be able to grow, take share from your competitors and sustain profitability long term. >> i think becky has a question for you. >> just a quick question on didi what, if anything, can you tell us about what you've seen there and what you're hearing, what you think about it >> well, obviously, the company is going through lots of change. we have understood that there might be a leadership change there. we don't know exactly what's happening. it's difficult for me to speculate. we haven't seen any significant moves on the ground in markets where we compete in a brazil or mexico if we do, we'll tell the investors. but at this point, it's -- nothing has changed as it relates to the competitive environment. >> policy question for you in places like new york, as you know, in terms of eats and some

of the other things, there are regulators or politicians who want to regulate the price of these deliveries where do you think things stand right now, what are you concerned about and what aren't you concerned about? >> we think it's entirely wrong for regulators to negotiate price between two businesses the fact is that we have grown through the pandemic in partnership with our restaurant partners restaurant partners who have engaged with uber eats have had a much higher chance of success, have grown their sales significantly. so i think this picture of us working against some of these partners is entirely wrong i think i'm proud of the work that we've done on the pandemic and coming out of the pandemic, i think we'll continue to be excellent partners >> but are you worried about what's happening in new york >> sure, i'm worried about it. the business can adjust. we are at this point, for example, the cost of these commission caps is probably 30 million a quarter which we're

able to absorb in the business and grow the top line and improve profitability as well. from a business standpoint, we're confident of what we're doing. but if this trend continues, it's going to result in higher prices to consumers which always result in lower volumes to restaurant partners. we don't think that's a good answer. >> dara khosrowshahi, it's great to see you >> in person. >> exactly in person all over again that's it for "sqwauk" today "squawk on the street" is coming up after a quick break so why we. it gives us insights, so we quickly pivot our strategy, people, planning, you name it. sorry, sir. i will aim straight at your next step. see that you do. would you like some coffee? workday. the finance, hr, and planning system for a changing world. ♪ need your prescription refilled? capsule pharmacy can fill and hand deliver your medications

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♪ good tuesday morning welcome to "squawk on the street." the new york stock exchange, tuesday turn around in progress. not just stateside but in the uk, france, germany, and hong kong no firm catalyst plenty to watch including day one of the fed meeting stocks look to recover after the worst day for the s&p in four months. >> uber shares are surging they did boost its third quarter outlook. >> and a shot in the arm j&j says a second shot of its covid-19 vaccine boosts protection for moderate to severe cases to 94%. all right. what is different this morning >> okay, so my chinese sources which are pretty decent even