presidents' tenure two fed presidents stepping down in the last 24 hours after controversy over their stock trades getting out just before the tapering plus government shutdown looming. senate republicans blocking a bill to fund the government and suspend the debt limit now democrats can do it on their own. scrambling to avoid financial catastrophe. it's tuesday september 28, 2021. "squawk box" begins right now. good morning, everybody. welcome to "squawk box" here on cnbc i'm becky quick, along with joe kernen and andrew ross sorkin. and if you checked things out this morning, the futures are under pressure the dow is indicated down by about 164 points

it closed higher yesterday but the dow is still on track for its worst month since january right now, probably a reflection of how strong the dow has been in that period of time. but the s&p and nasdaq are on track for the worst months since october of 2020. s&p indicated down about 20 points today and the nasdaq now indicated down about 245 points. that's a decline of more than 1.5% for the nasdaq. technology stocks taking it on the chin this looks like a bit of a rotation as people are thinking higher interest rates are coming they're here if you check out treasury yields. yesterday we saw the ten year move above 1.5%. as we got the higher than expected data that came in at 8:30 eastern time. it continues the march yield and jay powell going before congress today talking about inflation maybe not being so transitory that's a message the bond market

has figured out. 30 year above 2% two year .315% check out energy markets, too, that has been something to watch. yesterday crude oil prices, wti up about 2%, highest close since it's seen since october of 2018. brent is above $80 that hasn't happened in a long time again, back to october of 2018 and natural gas is really the place to watch, up 7%. that continues to keep climbing. we have seen natural gas prices skyrocket as demand around the globe really increases to try to get supplies before the winter, which is coming, andrew. >> it is winter is coming but meantime, congress is running out of time to prevent a shutdown yesterday senate republicans blocking a bill that would fund the government, suspend the u.s. debt ceiling and move democrats scrambling to avoid a possible economic calamity.

lawmakers need to approve government funding before friday to avoid that shutdown and the u.s. risks default if congress doesn't raise the debt ceiling by a point likely to come in october, that from the treasury department and more to come on that story, what do you think? >> i think the republicans are willing to fund the government, just not tied to the debt ceiling. >> did you see the vote on that? it was 48 to 50. they wouldn't have gotten it anyway chuck schumer voted no for a procedural thing. >> it is procedural. they can go back, they decided on 304, they can --mcconnell's point is you need to raise the debt ceiling doing all this stuff on a partisan basis, so raise the debt limit on a partisan basis and they can do it. >> when i asked that question to chris van hollen, the democrat, why did he push back >> they have to tie it to the

$3.5 trillion bill if they want to do that if they want to push through on reconciliation, they have to push it through on that. >> the democrats raised the limit for trump to do so so now they're saying we did it for you, with you need to do it for us that's not what they need to do. >> why >> you're going to argue about whether what trump did was good or bad republicans do not think we should be spending $5 trillion after we spent all this. that's what they're thinking you want to spend it, go ahead you want to raise the debt limit, go ahead. but you're doing all this -- you're not going to get a single republican vote -- >> they're making it more difficult and slowing down the $3.5 trillion bill they're putting pressure on that position of it i would be shocked if the two sides didn't find some sort of agreement to default on the debt would be a really big deal. >> they'll fund the government say we'll do it right now. mcconnell introduced a bill --

why are you smiling that ridiculous smile they will raise the -- they'll do it. they said they would mcconnell introduced something to do stop gap but they won't do the debt ceiling it's simple. there's nothing ironic. >> republicans what they are doing, i understood how they were doing this politically to try to slow things down because they don't have any say when it comes to the $3.5 trillion bill. i wonder if they're being a little too clever because what they're doing at this point is providing unity for the democrats to say, wait a second, they're going to let us string this up, it sounded to me after nancy pelosi met with her caucus there was more unity coming out of that meeting than there was going in because they have a common enemy. >> to get to where they need to be on the infrastructure deal, the progressives have to vote for it and they're saying they're not going to. >> it sounds as if they had movement moving towards nancy pelosi's way on this. >> it won't be 3.5 we know it's going to be 2,

maybe 1.5. >> we'll see. >> whatever it comes out the two fed presidents stepping down abruptly yesterday. first boston fed president eric rosengrin said he would leave his job thursday citing health concerns and then later in the day, dallas fed president robert caplain said he would step down october 8th so next week he said a recent statement on his financial disclosure risked becoming a distraction both men were the subject of controversy over stock trades last year at a time when the fed was conducting trillions of dollars in asset purchases to prop up the markets. if you wanted to be a stickler, you'll say jaypowell is stayin he bought a bunch of muni bonds while the fed was buying muni bonds. >> i think kaplan looks --

>> kaplan was talking against his book the entire time. >> you'll see he was making million dollar plus investment -- >> which is not a lot for him. >> may not be but in the grand scheme of the world it's going to attract a lot of attention. >> you saw the timing on this, all of this had to happen before jay powell went before the snoot today. this is the same thing as the instagram pause news because they're getting called before congress this week nobody wants to go before congress and defend these positions. jay powell made it clear they don't want the reputation of the fed to suffer. all of these moves happened just before congress is going to get to start asking questions. >> by the way, maybe this is a good thing maybe the fed will stop doing this so we don't have to have these conversations so we can trust there's not a crazy situation happening. >> we don't have to have the conversation choose not to have them by looking at the facts of the situation. if they want to change the

guidelines, fine i'm tired of talking about it. >> don't you think the guidelines should be changed this might be considered progress. >> and the fed's action changed over time. >> i don't think any of them were using inside -- looking at what was done -- >> do you think the fact that you can't own stock, but they can, makes any sense to you whatsoever >> no. the guidelines are going to change for sure. >> okay. >> the fed is going to have to >> the fed shouldn't be able to buy stock, elected officials shouldn't -- >> i think i have a lot more influence than the fed so i understand that it would -- >> let me raise one more question with this kaplan and rosengrand were two of the more hawkish voices on the fed. interesting as the fed was starting to taper these voices stand down if you thought it would make a difference, you have to think again based on -- >> it's all a ploy before you

start tapering you wanted me out, they get out, taper. now you sell before you taper, you played right into their hand. shares of ford this morning are high erafter the automaker said it's teaming up with sk innovation to invest $11 million in two new u.s. facilities, a plant in central kentucky and a campus in tennessee. that investment is expected to create nearly 11,000 jobs to produce electric vehicles and batteries. and the latest from ford's ceo to produce electric vehicles this is the first time that ford is building a new plant here farley joins us at 8:00 a.m. eastern time. coming up when we return, inflation in focus later today when fed chair jay powell does begin the two days of testimony on the hill. as long as it doesn't get sidelined by talk of conflicts we'll tell you what to expect.

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we'll get consumer confidence data at 10:00. after the closing bell, micron due to report quarterly results. and the fed chair beginning two days of testimony on capitol hill he's going to warn the senate banking committee inflation is likely to remain for the coming months joining us now is stephanie link from hightower and cnbc contributor. i'm going to start with you, stephanie. what are you expecting we know what the prepared marks say. but what do you think is baked in, what's actually happening here >> i think the 10 year is telling you the economy is stronger but inflation is higher than expected and not as transitory the economy, consumers, 70% of the economy is the consumer, wages are going higher, jobs are aplenty, with 11 million job openings, savings rate still high and retail sales are

remarkably strong and on the manufacturing side, it's also seeing a resurgence and a v-shaped recovery. industrial production is below pre-pandemic levels and inventories are at 5 year lows and yesterday you had durable goodshipments at a 10% analyzed rate in the third quarter. so economy is okay then you listen to people and ceos like expedia and wynn and kayak and all are saying that things are starting to improve, especially as travel restrictions are getting lifted in europe. so that's the good news. inflation, it's much higher. we got ppi, cpi, we know that. we heard from fed ex, they're having problems on the wage side, labor side, seasonal workers, having to spend more. and general mills is expecting 7 to 8% inflation for fiscal 2022. it's real, wages are up, rents

are up all of this, i think if you package it together is telling you that growth is better but inflation is it higher, rates go higher, they're all interrelated and that's why you see the rotation in the market to cyclicals, reopen names and away from the nasdaq tech heavy names at this point. you're seeing it today. >> tiffany, are you staying away from tech as a result? >> i never stay away from tech but to that point we are seeing this rotation and definitely into cyclicals i think first when we're talking about this, it's important to understand the importance of the ten year and really what that's is an indicator to us, to investors in particular professional investors that of investor confidence. when you think about the fact that historically yield ranges have been very, very small when you have very small moves they're a big deal so last week when the ten year hit 1.5 for the first time since

june, that was a really big deal it tells us that investor confidence is very strong. look at what else happened last week, all signs are leading to this the fed suggesting tapering and the market reacting positively high yield corporate spreads, widening just a tad but really, you know, at, you know, all-time, you know, lows so when we think about this from a portfolio construction standpoint as yields are increasing and as we kind of prepare for potential definitely tapering and rate increasing, i think investors need to think about that portion of the portfolio, how do you approach this from a portfolio construction standpoint. a lot of investors will say let's focus on the mix side with bond ladders but also should be thinking about leaning into those sectors in rising yield environments like financials,

like energy, things like that. >> stephanie, when you think about the inflation we're seeing, how much do you think is a function of wages and how much is a function of this messed up supply chain we have the reason i ask, it could have an impact -- i'm hoping it has an impact on how long this sort of inflationary period, how transitory or not it is and how long it lasts and what it really means. >> well, andrew, the supply chain is really difficult. if you listen to the ceo of ups last week on cnbc, on closing bell, she was not willing to commit in terms of when the supply chains are going to get fixed. but she didn't say it was going to be the first half of 2022, right. so if you listen to some of the semiconductor companies they're saying end of 2022 i don't know if you want to call that transitory or not, i don't know if that is, quite frankly, but it is fixable. wages are a different animal that's 70% of a company's costs

and they're running 4.3 analyzed rate that plus rents as the eviction moratoriums get removed. those are stickier pieces of inflation. that's what i have to say for months that inflation is not all transitory, some of it is. >> give me two or three of your favorite inflation adjusted names. >> my gosh 70% of my portfolio is cyclicals and economically sensitive and reopen the two i've been buying most recently, bank of america, most exposed to higher interest rates most sensitive of the big banks, doing a greet job in terms of cost cuts. and diamondback energy they announced an accelerated buyback two weeks ago. they obviously feel confident in the business trends, reducing cap x, increasing production, i like that name, too. >> tiffany, do you want to throw out a name or two in this inflation adjusted world.

>> i'll go with financials for me it's j.p. morgan and goldman sachs. >> interesting steph takes b of a, tiff takes goldman and jpm. >> i do own b of a, though. >> we'll have a competition, talk in 12 months. i'm sure we'll talk before then. let's revisit it in 12 months. >> it's a deal >> appreciate it >> thanks, andrew. >> thank you. when we come back, crude prices climbing above $76. brent above $80 right now. what it means for the energy stock straight ahead as we head to a break, check out huntsman, a stake of more than 8% in a chemical's company and plans to make for changes. we'll be right back. it's a place to change the world.

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former pepsi ceo is speaking about the role of corporate leaders in the biden agenda's build back better. here's what she told cnbc about the potential cost of the infrastructure framework, the bipartisan deal. >> why are people still questioning whether this should be done, why are people skeptical about whether this is good spending of taxpayer money. it's time we moved beyond discussing whether this is a good program to talking about what's the way to design it and implement it fast. that's where we are on in this fork in the road at this point

i'm afraid that in all the debates and discussions this program will once again be cut back significantly or go to the back burner. so i think corporate leaders ned to lean in and have their voices heard as to ngo leaders and families and everyone else to come say we need help. if you want the best and brightest to be engaged in paid work, we need help this program is only going to see the light of day in the right way if everyone stands up says let's act on it >> be sure to catch more with indra nooyi on closing bell today. and one -- i don't know. that bill is ready to go it has like 17 republicans voted for it in the senate that bill is ready one quick story as we head to break. merck is in advanced talks to

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to "squawk box" this morning look at futures, we are in the red across the board dow looks like it's going to open 146 points lower. nasdaq looking to open 270 points lower, s&p 500 looking to open 37 points lower as well all this in large part a sense that inflation is upon us and it is very real i want to get to dom chu now

with another edition of sector nomics looking at consumer discretionary stocks dom? >> between consumer d discretionary and staples you have a good amount of the market subject to inflation every sector subject to inflation with regard to raw materials and inputs but this sector, it's interesting because consumer discretionary is a market performer for the first half of 2021 you can see the white line, which is the sector overall has been tracking the orange line, the s&p 500. just about may or so right here we saw a performance gap where the overall market has outperformed the overall s&p 500, consumer discretionary sector you can see a couple hundred difference in basis points for those two measures of the market overall. with regard to that impact if you look at the sector it is

important to the narrative because it does make up a healthy amount of the overall indeks con consumer discretionary, if i add in staples, 18% overall for consumer oriented sectors. technology far and away the most important, subject to costs and inflationary pressures if you look at how discretionary shapes up right now it's two big stocks not the brick and mortar we've thought of in the last 20 to 30 years indicative of the sector it's going to be amazon and tesla. amazon has been an underperformer, tesla has to a certain degree as well versus the benchmark. however, these two stocks make up nearly 40%, about 38% of the overall index. so amazon and tesla are driving the sector

amazon, tesla, home depot and throw mcdonald's in there, those four stocks make up half of the consumer discretionary sector. back to you. >> dom thank you for that. i'm sure we'll see more of you this morning and throughout the day. we'll talk crude prices they're climbing wti above $76. brent above $80. the impact on energy stocks next. plus ford announcing plans to build four new plants in the u.s. and further invest in evs we'll talk to the company's ceo in a first on cnbc interview you can watch or listen live, any time, you can do it at this moment if you want do it on the cnbc app. live shot of times square. we are back after this

welcome back, everybody. take a look at the u.s. equity futures this morning you'll see some red arrows dow futures down about 120 points, s&p down by 35 but it's the nasdaq that's down significantly, decline of 1.5%, with futures off about 227 points that continues with the decline we saw yesterday on the nasdaq energy stocks are surging amid a

sharp price rise in oil and natural gas prices and bullish calls by analysts who expect the rally to continue. natural gas up another 7% this morning. the energy sector has risen about 40% this year. for more we're joined by rob raymond, the principal of rr advisers we haven't seen this translate into sharply higher prices at the pump right now so maybe a lot of americans are thinking this is not a big deal but you see the rise with natural gas and this could spell trouble down the road, don't you think >> yeah, unfortunately, it's coming to some degree i think the u.s. is lagging what the rest of the world is seeing, specifically europe and parts of asia and to some degree china. i think what you see here is a market that's flipped from being supply long over the last decade to now supply short in a world where shale production in the

u.s. is no longer growing. so there are a lot of consumers around the world that made the bet, whether they understood it or not, right, that u.s. shale was going to continue to grow almost add i infinitum, where t next foreseeable future beyond 2020, that u.s. shale production growth we live in a supply long market in perpetuity that has now changed so everybody is having to reevaluate wait a minute, where am i going to get the hydro carbons from that i thought i was going to have access to when i commissioned these projects. >> the big oil companies have been disciplined about not putting more money in fact, they pulled back, they're not doing the production and development they were doing for so long in the oil patch and part of that came because investors said this is dirty oil, we don't want this anymore. we're moving to new energy what's the end result of this? >> well, the end result, unfortunately, is going to be

very high prices and so, you know, this gets into a little bit of a political conversation and i would just comment right that we're very involved in companies associated with the electrification of many things, that's in pennsylvania, standard power in ohio, we look at this stuff all the time every day the point, though, becomes, right that there has to be a gradual and reasonable transition from a hydro carbon based economy to something that represents what everybody wants to call electrification. europe is trying to do too much too fast so they're decarbonizing against the intermittent supply they're building into the grids primarily wind they cannot ultimately provide for the same level of consistency in terms of supply that the hydro carbon based economy could. so they're caught in what we

call the wind trap specifically. where they're stuck between a rock and a hard place. decommissioned large natural gas storage facilities, producing fields in that continent the last five years all betting wind could fill that void in that gap and they're learning the hard way it cannot. so this needs to be gradual. it needs to be well thought out. let the laws of physics apply to everybody equally and nobody is going to get out of this if we continue to make stupid mistakes. >> the united states, do you think they're headed on the same path we, i should say. >> unfortunately we are. i live in dallas, texas, the state of texas and what we went through back in february, the reality is 24% of our stack in this state is wind we have more wind generation than any other state in america relative to our consumption and we paid an extreme price for

that in february so my point really is, we're already seeing it, it is upon us, it's concerning. >> wasn't the problem in texas that the wind turbines weren't built for the cold weather, they had taken short cuts that were cheaper to put the wind turbines up would the wind have worked if they had taken the other precautions to make sure it was there for extreme weather. >> maybe but let's ask the uk for people what happened all of their turbines are winterized but sorry the wind stopped blowing. it's intermittent, it's not reliable intermittent is a nice way of saying not reliable. so that has to be factored into the grid and people have to figure out how to have back up or a plan b, other solutions when intermitt ten si ultimately rears its ugly head and it will. >> is this a call for investing

in big oil, a call for hoping that big oil will start to increase production, and what are the odds of that because they've gotten beaten up so badly the last year or two >> this is the big challenge the free market in one sense isn't working here so the market is sending signals we need more supply and need it s urgently, frankly at the same time it's a global issue it's not just domestically if we look globally, this includes opec and everybody around the world, this thing is down 50, 60% from two years ago and hasn't shown any signs of recovery so the exxons, the chevrons, the big oil guys are now, to some degree, ham strung in terms of what they can do with cap x, to compete with the supply dynamics and the pricing dynamics in the market but this is a global issue as well. >> does that mean we're not going to export too?

liquefied natural gas there are already calls not to ship that to make sure we have supply there. >> go down a more dangerous path with things like price control we can cut out exports in this country but what do we say to our friends in europe, asia, south america when they rely so heavily on us. you will effectively end up freezing people to death in europe if you start having that conversation just for the record, that will happen >> so it sounds like a little bit of a mess. best case scenario >> well, you know, best case scenario we have a warm winter and tiptoe across the high wire here unfortunately hoping and wishing, right, is not a viable strategy so i think the reality is, right, we need to take a hard look at the pace with which policies are being enacted and have a more measured approach, right. in one sense everybody needs to slow down and ultimately realize

that ultimately, right, the base at which we're trying to like man date all of these changes across these economies is not feasible under the time lines that some of these people, right, want to predict or have happen >> rob, thank you. i get the sense we'll be following this very closely. so thanks for the heads up and the road map on what to follow good to see you. >> fair enough, thank you. meantime, news for you citadel's security posted its first tweet since january 21st yesterday. as the hashtag was trending on twitter, referring to a february hearing in the gamestock saga in which ken griffin said he never restrict trading saying sill dell securities did not ask robinhood or any other firm to restrict or limit its trading on january 27th.

they said the ceo had never met or spoken. it's bizarre what's happened on twitter in this regard because there is, you know, these sort of -- call them memes where people say these things. they say he said one thing but the truth is, if you read the testimony -- or not the testimony, but the filings in the lawsuits and the quotes from the emails, it is not clear and i'm sure the hate will come at me for saying this, that citadel was asking them to restrict trading. there was a conversation, clearly, about payment for order flow and frankly the fact there was so much volume at the time that citadel was likely going to pay them less for the order flow but that was not a call to say restrict the trading it's as if there's some kind of -- like people can't see or they can't read what's actually in the language. >> they will postulate things

they want to believe it gets enough retweets and likes to where it has a life of its own. to the point where citadel said look, this has exploded into this thing that has the danger of becoming factual information when there's no truth in it. i see it with stuff about cnbc i have never been told to say or do anything about anything -- >> right. >> -- based on who sponsors us, based on big bank. >> i'd like to see somebody try to tell you what to say. >> yeah. good luck. but i see stuff saying -- last week i saw something that said, it's apparent that blah blah blah and then it got all these -- it's clear that's true >> i saw somebody yesterday saying what's the price to get mentioned on that show because clearly they're all bought off it's free, you jerk. i'll mention you for free. >> it's total bull none of it is true i'm not going to address it.

>> too late. >> but they make up stuff, enough people like it -- >> i believe citadel >> in this instance -- >> now i'm going to get your mail. >> look at the lawsuit look at what the quotes actually say. and then look at what people seem to believe is being said. it doesn't make sense. they have pictures of, you know -- i interviewed ken griffin maybe, i don't know, ten years ago, i've interviewed him a bunch of times but a picture of us standing next to each other, we both i think tried to look nice like we were being nice to each other in the picture and they send that around as if it's proof of some kind of conspiracy >> you could be sitting there with jeffrey epstein, so be glad it's ken griffin plenty of people smiling with epstein, like our buddy. >> who >> like bill gates, unfortunately was a little too close with ep seestein and has o

of trouble explaining it at this point. the next thing, how do i know who pays me more, the people that want me to bash tesla or promote tesla? who's paying you more at this point, becky i don't know which to choose. >> nothing pip don't get paid on my twitter feed. >> antiripple. i don't know got to like, hey, whoever gets -- jack the price up. >> give your bank account number >> you get it from both sides. >> provide the wire instructions on twitter put the instructions out there. >> use bitcoin. >> yeah. tell them where to send it. >> this is going to be one of those aquaman moments. >> no. >> no wire instructions. sarcasm. i know i'm not sarcastic >> i have never been told to say anything ever. after 30 years i don't know whether -- maybe it's coming. >> you come up with the obnoxious opinions yourself

right? >> right i have my own. >> i'm just getting my instructions. >> from ken? >> maybe from ken. >> he's got the hot line. coming up washington's dramatic week continues. yesterday senate republicans blocking democrats' bill to fund the government yeah, 'lta authaanwel lkbo tt d the market impact next

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we got some news out from pfizer the company submitting data from hits trials children 5-years-old plan to submit an emergency authorization in the coming weeks.

joe. >> all right >> we're here. we're here >> where is moderna? that should be happening soon. >> i think that's a few weeks behind this is big. >> it's coming >> it's four-to-six weeks from now. that's how long the fda approval is i think they will go through the request for eua is a few weeks out. i don't think that would slow it down >> fda approval or eua >> fda of an eua it takes them four-to-six weeks to go through the do you that. my guess is they would go through the do you that immediately. not await the request from pfizer, which is a few weeks out. if that's the case, we would be on track for kids to be vaccinated by halloween, potentially. that's five weeks. >> i'm ready to hyperdrive my anti-bodies. >> the third shot? >> right off the charts. lay it on me

you know, i feel it pretty at the strong already famous last words. but, what? you know i have a good immune system, right? >> you have a very good immune system >> you do. >> you set the bar this is a pivotal week on capitol hill for president biden's agenda on infrastructure and the implications from the markets. let's welcome aei good fellow jimmy petakukas, a cnbc contributor. thank you for joining us i was talking about me, how about grassley, 88 years old, running again for a six-year term he tweeted it out at 4:15 a.m. getting ready for a 5-mile run do we need someone to follow in the footsteps? william shatner?

>> william shatner, unbelievable man at age 90. i need to take like two naps >> clint is still punching people and driving pick-up trucks at 91 pete, here's the deal, jimmy, the democrats are in total control of what they're doing here this is an intra-party squabble. i'm talking the 1 trillion infrastructure and reconciliation they can do the 1 trillion whenever but they got to get the progressives to say, okay, we're going to lose our leverage on the 3.5 trillion then the other side of the progressives is manchin and sinema who want maybe 2 trillion on the bigger bill that's where this is going to end up, because it's all totally within the control of the democrats. they can do this whenever they want, can they not frub republicans can't stop

them >> you are exactly right i think the original sin here is progressives got it in their mind before the election that they're going to have a sweeping win big majorities and they could have this quote/unquote transformational presidency. obviously, none of that happened there has been this very slow walkback and realization that they're not going to have the 5, 6, 7 trademark they will have a much smaller bill until they realize they're not getting 3.5 trillion they have to negotiate with barely centrist democrats in the senate that's what's taking place and it may continue to take place over a number of weeks. >> okay. the truth is, it's not, the $3.5 package we're talking about, we're talking about funding what we have done thus far.

>> we weren't talking about the debt creaming. all we're doing is talking whether the 1 trillion passes? i asked one question, are you going on the bad republicans not raising the debt limit on the stuff they already spent why can't they do this on thursday like pelosi wants and are they going to get it or is the squad going to hold out because they don't have enough margin in the house they'll do it on thursday. then they'll get a 2 trillion on the bigger one, right? >> listen. if the infrastructure passes, i think it unlocks -- is that going to happen? that means progressives have gotten some reassurance. the debt ceiling will be tacked on the reconciliation. >> is it going to be passed on thursday, the infrastructure they can do it whenever they want the republicans, it's already ready to go. right? they can do it if they guess the progressives to vote for it in the house. >> to make that prediction, i am looking for soothing comforting

words, joe manchin and kyrsten sinema about what they want. as i heard, as reported from nbc news from joe manchin, is he made a strong guarantee they will get infrastructure by november 2022. i did not hear kind words about the other bill it would not surprise me we plugged into having to pull this on thursday him then it's sort of here we go for the fall >> well, that would be, i mean, pelosi's promised to do -- it's weird, they're not linked, but they are linked. do you want to talk about the government shutdown and the nasty republicans want to shutdown the government? i want to talk about what will happen they spent it. now they don't want to pay for it what do you think? do you have any comments >> i think once they get passed the reconciliation, when that is, that is the headline shaker. >> thanks for being with us this

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yields rise and oil surges the latest on what's moving markets is straight ahead. the government funding drama in washington, police have sentiment. a live update from the nation's capital and what it means with the public policy is minutes away plus a look at ford's electric plan to build batteries in the united states what it means for the company. as the second hour of "squawk box" begins right now. good morning welcome to "squawk box" right here two-and-a-half hours before the market is set to open, it looks like it will open down amid we're going to call it inflation fears but a bit of rotation in the cyclical's and the like, the dow off, take a look at the nasdaq, it is off about 225

points meantime the s&p 500 off 35 points a couple big headlines, crude oil, the rally continuing with oil prices up now a sixth straight day hitting their highest levels now in three years. it's fair to say a key reason is supply disruptions in the u.s. because of the recent hurricanes that swept through the gulf of mexico meantime, pfizer submitted a study of data on the use of the covid-19 vaccine for kids age 5 to 11. it expects to submit a farmal emergency use authorization within a few weeks, just discussing, programs, we could have a vaccine for kids by maybe halloween in and around. the success of the covid-19 vaccines from pfizer and moderna has prompted the 47 drug to shift its sanofi vaccine plans they followed up saying it was discontinuing development of that treatment, instead, they're focusing on efforts to develop a

more conventional british vaccine with british partner glaxo smith klein. >> andrew was referring to some weakness in the nasdaq the outsized weakness and a lot is concern over interest rates earlier this year, with you saw interest rates rise more steadily that took the shine off the nasdaq and parts of technology and consumer discretionary interest rates a key focus the 10 year topped 4.51% holding steady at 1.45%. continuing to move higher, the highest since the third week of june meanwhile, ice brent crude futures above $80 bucks a barrel the highest since 2013 2% gain there. devon energy, marathon, chevron, getting moves higher in crude oil. so that inflationary trade with regard to sell-offs and

government bonds and higher crude oil prices playing out now. a big earnings story this morning. a pandemic beneficiary in some ways, thor rv maker. they make towable. they're up 2% in pre-market, earnings come out better the order backlog is massive the biggest they've ever had this is the maker of air stream, rvs, a big part of that story. year-to-date up 24%. then we'll finish it off with this particular move here, applied materials. those shares down roughly 3 or 10%. a unit base, a massive move higher, 60%. analysts at news street cut applied materials to a neutral rating they have a $140 price target. they say there is a lack of near-term catalyst it's been fairly range bound, no near-term catalyst they lack the longer-term trends

for applied materials. the reason why folks need to look towards applied materials, is it's a leading indicator in some ways of the global chip market this is the company that of course makes the stuff that makes computer chips so if it's slowing down there, it might slow down elsewhere it's something to keep an eye on as well. >> aren't you glad you took calculus to say, it's, did you do those little s things >> different rules >> you did that, didn't you? >> i had to, it's a part of our regimen. >> we had to, i was doing a couple calculations here on death zoning, actually it's not looking good. thanks, dom. >> i'm glad i took it because it means i took it i don't have to continue to take it. that was the point of calculus right? get through it a second fed president deciding to retire just as fed chairman j. powell gets ready to testify before the senate

banking committee. coincidence, or not? let's go to steve leishman with more steve. >> yeah, becky, two federal reserve presidents in a controversy surrounding their trading practices announcing plans to retire as fed chair j. powell begins testimony before congress and robert kaplan said he will step down. it shows multiple trades and stocks throughout the year that watched our group that created the appearance of a conflict of interest kaplan headed the bank for the past six years, insisted he did not violate the fed's code of conduct. he was saying he was stepping down because quote the recent focus on my financial disclosure risks becoming a distraction boston head eric rosengreen, he said he would step down for health reasons and announced a

candidate for a kidney transplant he will retire in 2022 he made several real estate investment trusts in mortgage-backed securities powell may well face questions about his own ownership of individual muniesaple bonds. he owned those before the fed last year began buying munies. becky. >> a couple questions. we will talk more about powell's testimony in a moment. first, whether changes are coming to personal to the fed, these are big ones, two very hawkish fed heads leaving. >> yeah. and i think it's worth pointing out, both of them appeared to be taking stances on monetary policy that would appear to be diverse to their portfolios the change is coming rosengren, quarless ends in october.

collarida ends in january as governor and fed chair powell his term as chair ends in february so, there are some substantial changes that could be coming, depending upon decisions made by the biden administration. >> i don't want to write this off as housekeeping, maybe at important as the testimony powell will be giving today in terms of talking about inflation, not being as transitory that's a message the market seems to be hearing the ten-year keeps climbing it hit 1.5 yesterday, it's scoring through the points, we're talking about. >> no doubt in that testimony, becky, powell is more hawkish about inflation. he talks about the supply bottlenecks and constraints out there in the economy will be around longer and he does say that if inflation is a serious concern, the fed will act, the kind of language that says, hey, it's out there on the radar, remember, powell has said there will not be inflation one way or another. okay so one way is that it does end up being transitory.

it goes away next year, somewhere in the middle of next year the other way is the fed has to act to clamp down on economy and economic growth. >> steve, i want to go back to the stock and conflict stuff one second, which is, in the future, do you think it's going to be harder to attract people to this role and because they won't be able to own stock, if that's going to be an issue and perhaps more importantly, will they set it up in a way in the same way if you were to go into government right now, you can sell your stocks effectively, put them into treasuries and you actually don't pay the step-up, the tax on them is that something that the fed can do? >> i don't know the answer to the second question. i think a lot of people sigh that it may be harder to attract people because of what could be new rules put in place at the federal reserve. it's a pretty perceived decision

ahead of the federal bank. i don't think there will be any passivity of candidates for those kind of jobs. >> i am agreeing with you, by the way. coming up, amplitude going positive by a spac, they will join us after the break. check out endeavor groups openbet for scientific games for $1.2 billion the owner on board with the sports betting business. we are in the red amid some continued deflation fears. the nasdaq down 225 points as a tech sell-off taking place the dow off 152 points we're back after this. feel stuck with your finances? ♪ ♪ move your money to sofi. earn up to $930 when you download the app and feel what it's like to get your money right. and feel what it's like hey lily, i need a new wireless plan for my business, but all my employees need something different.

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a letter from pfizer, they submitted vaccine trials for kids age 5 to 12-years-old to the fda. meg joins us, that puts us on what time line before those kids could get vaccinated >> >> reporter: yeah, the next step, they've submitted the data we've already heard about in kids 5 to 11 they have to formally finish the submission for emergency use organization to the fda. we think that will happen in the coming weeks so basically when they get that in, we will start to hear from the fda about their planning for

what the review of this is going to look like well, they have that meeting at the outside for pfizer, how long will this review take? essentially by getting this data in, the fda can look at i.t. and start that review process and do all of it in real time we have been hearing halloween could be the time when this becomes available to kids. we'll see if that stays the time line, but right now, this is in keeping with what we've heard from pfizer and the timing around which everybody was talking about halloween as the date >> the one concerning one in the release is that they have fought not asked for the emergency use justity. b -- just yet. does that slow down the process or giving them the data, the fda can start that process right now? that's what i don't quite understand >> reporter: yeah, this is what pfizer has been saying the entire time.

i don't know if some of the folks thought they would file by the end of september and the final submission would be done at the end of september. if you listened carefully, pfizer said they were going to start by the end of september and so this is all if keeping with what they have been saying. and the folks kind of predicting maybe halloween works around that time frame. i don't know if they were taking those details into consideration. we'll see when the eua gets submitted. but they have all been talking about this, as if it's coming really fast. the cdc is planning for this so this is coming up pretty quickly. >> the chaos that we've seen over the last couple of weeks, both with the cdc and the fda, does that change any of this does it make it less likely to get pushed through does it make it more likely? it's pretty confusing for anybody that's watching from the outside and seeing this back and

forth? >> reporter: yeah, we'll have to see whether there is debate within the advisory committee for the cdc over whether kids need a vaccine and whether it should be recommended, for example, i have not heard about that debate from the advisers. the fda's job here is pretty straight forward it evaluates the data, decides if it's sufficient to grant an emergency use or recommend one from the advisers. the cdc will make that recommendation who should get the shots. we can hear from these advisers. they believe a vaccine for kids is necessary and they expect to do this quickly. >> mech, thank you, great talking to you. meantime, data analytics company amplitude going public on the nasdaq today through a great listing. $35 a share. they will trade under the ticker ampl the co-founder spencer stakes and a partner at benchmark and

early investor and a legend in silicon valley can we say that? you woke up early, you will get legend are you on the east coast, west coast? >> i'm in texas. >> it's early enough to get a nice salutation on top of it spencer, nice tow see you. congratulation on this milestone this morning for those initiated in terms of what amplitude does, why don't you try i to explain it and then maybe we can dig in? >> yeah. amplitude does data driven products we take the same tools netflix has and we have the 26 of the fortune 1200, twitter, walmart and ford. >> what do you mean by that? >> well, we help people understand how they're using the online products, where they're getting stuck. what features they like. what things frustrate them one of our customers peloton

found out features that used the features, they built in high 5s and leaderboards to help them engage better and build a workout habit. >> i like that, by the way, i tuesday high fives i look it. it helps hey, bill, one of the things that's fascinating about this particular transaction and so many has been your commentary online and elsewhere happening in the ipo world really your push for direct listings and spacs like this one, why >> look, i couldn't be more excited that spencer and his company have chosen this path. as i mentioned many times before the legacy ipo process has evolved into this process where a huge one-day gains are transfered from the investment banks to their trading clients and that number is 200 billion over the past 40 years, but 30 billion just last year so it's actually gotten worse. there is a modern way to do it you can actually use supply and

demand to determine price and allocation that's what the direct listing does, that's how every bond is priced that's how everyone i think most intelligent people assume markets work it's they don't. so it's so great to see these smart, young founders pushing forward and taking an approach that i think is much better for the company, much better for employees, better for investors and fits better with the fiduciary duty >> you said it fits better with the fiduciary duty do you think ipo - >> violates fiduciary duty >> yes >> i think knowingly headed into a transaction you will take on so last year in 2020, the average ipo was under priced by 50%. if you add in a 7% on the investment bank, that's a 57% cost to capital. any finance professor, a company that's got the possibility of

going public so it's highly legitimate should have a 57% cost-to-capital i don't think you can find it. so i think selling your shares in your company that annoying discount, using things likes 30x to over subscribe is not in wane way, back to spencer and his team, i couldn't be more excited a group of young founders is moving in this direction j. ritter put out some data at the end of august you guys probably saw, where he analyzed all the companies that have chosen the direct listing path and they've wildly outperformed their ipo peers, which i think is interesting and highlights the quality of the decision-making people choosing this spac. >> hey, spencer. we have a lot of viewers, entrepreneurs like you hoping to do what you have done. also thinking through some of these issues i imagine every wall street bank in america came knocking on your door saying do an ipo. then you probably got every spac sponsor these days knocking on your door as well.

looking at what's happening right now. how did you make the choice? and was there a moment, was there ever a moment where you thought the ipo route was what you had to be doing? you didn't have to convince bill, but others >> yeah, it did sake some work to work with our board and existing investors convinced them a direct listing was the best path. i think the craziest thing to me is that tra terrible ipos under priced companies, bill mentioned that on average last year, traditional ipos under price companies by 50% so if i'm a ceo and selling stock, i want to get the best price for that stock out on the open market. selling a dollar for 50 cents makes no sense at all. that's why the markets based price is a much superior path. i wrote a founders letter in our s-1 i congressly recommended every single ceo taking their public public these days, do a direct listing the traditional path was designed 50 years ago when there was much less information about

companies out there. you needed bankers to go and sell your stock. these days, a lot of public market investors knew amplitude when we were out there we did a round with a few public market investors, so just given where things are at today to bill's point, it's much better to do a mark-paced pricing for your stock >> bill, before we let you go, what do you make of what's going on to tech, valuations obviously, there is a lot of anxiety about inflation, are you seeing in the public markets, a bit of a rotation in terms of the valuations and multiples on some of these companies, put it in perspective for us. >> well, we talked about this on the air before but we've had very, very low interest rates for a very long period of time when you look at companies like amplitude, these companies that have repeatable revenue and expanding that dollar retention, you know, the investor group gets very compensated about taking those revenues and profits way forward into the

future if your discount rate is tiny, interest rates are low, you end up with outside valuations the people talk about inflation, that's the one thing that people worry could come and spook interest rates and sends them north. i think it's very, i don't think we've ever been at this place before so it's very hard to predict, what itself the fed going to do? how is that going to affect inflation? how does that come around to these tech stocks? >> fair enough bill, spencer, thank you congratulations and good luck. >> thank you so much. >> you bet coming up, pimco's head of policy libby cantrill. a quick check before we led to eak. quawk box" is coming right back >> ♪ ♪

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ipod, iphone, lots of things out there. still to come, the latest out of washington, a looming government shutdown and what it means for the markets. plus, delivering alpha is back it's here tomorrow everything from spacs to crypto to esg it's all about maximizing returns in this new era of opportunity. i have a panel with mary erdoes and the hurricane catastrophe fund and much more if you want to register, you can go to delivering alpha.com u ay tuned yoare watching "squawk box" and this is cnbc

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. lawmakers are scrambling to find a way to prevent a government shutdown. ylan mui joins us now. >> it's not just a government shutdown, democrats are forced to save their entire agenda this week last night house speaker nancy pelosi told her caucus the infrastructure bill and social spending package need to get

split up that has been a source of tension since it was announced progressives could not do the bill pelosi announced the house cannot wait on infrastructure because the senate is not there yesterday on a new price hike with a social spending bill. meanwhile, democrats are considering separating the debt on the increase and government funding. republicans blocked their attempt to link the two last night and after the vote was over, majority leader chuck schumer vowed to avoid a shutdown >> keeping the government opened and preventing a default is vital to our country's future and we'll be taking further action to prevent this from happening this week. >> so it's still unclear how democrats plan to handle the debt limit but, guys, they had dramatically scaled back their ambitions for what they had gotten done this week over to you. >> that's one thing. i am focused on this trillion

and 3.5 trillion not length, length couldn't do it monday. but i'll get the votes by thursday and i see the intra-party squabble as on the senate side, manchin and sinema and you got the squad and like-minded progressives the progressives think if they go for the infrastructure, they lose their leverage on the 3.5 trillion so i don't know who blinks >> yeah. right. >> i think the progressives blink and do the 1.2, do the infrastructure and then they deal with manchin and sinema at a 2 trillion dollar range? >> yeah. the outcome of the vote on thursday assumes it is still held is really uncertain what we do know is that kamela jayapal, she has spoken to senator sinema in some cursory initial conversations about where they can potentially meet

in the middle. she did leave the door opened yesterday after democrats had their caucus meeting to potential for some assurance that's not a vote. that they will move forward on reconciliation in some form. what she said was that she's not sure what an assurance is not a vote looks like, that's why progressives have been so focused on ensuring there is a vote on the reconciliation bill, the bigger bill as well as the infrastructure package but if democratic leadership can come up with some other way to give them kefdz, that they will move forward with the rest of the agenda, not leave it behind. that can be that small opening, that small window that they use in order to reach this compromise but they are running out of time to do it because they don't want to jeopardize doing anything as they go after the biggest pie possible >> okay. ylan, thursday is the day. is that tomorrow no, no, today's tuesday, right, okay so that's out. >> one more day to go. >> i know what day it is, that's

a start. thanks ylan. our next guest says the high stakes day for lawmakers, they will disregard the noise out there. she thinks the democrats won't let them shut down joining sus libby cantrill, the head of u.s. policy at pimco libby, you think all of this is noise, just that >> 83. and it is definitely noisy this is going to be, in particular, a very busy week in washington for both president biden and congressional democrats' agenda. becky, the bottom line here is that failure is just simply not an option for democrats. they cannot let the government shutdown they can't, of course, breach the debt ceiling they have to pass both the bipartisan bill and a reconciliation bill even if that's going to be summarily that's in our long-standing view for several months now that bill would be smail ller again the bottom line for

markets is they have to get this done politically president biden's approval ratings have softened, as you know they're going into a difficult election psych until 2022. so failure is not an option. it will be noisy it may not be linear but we have a view that they will get there ultimately. >> i didn't really see the path for how they'd do it until last night with pelosi in the caucus and really kind of pushing, basically saying you got to go along with this. i think joe is probably right. that's what happens. they vote on thursday on the bipartisan infrastructure bill and figure out the details i don't know, they'll have a trimmed-down version that will be whatever the 2.5 to 3.5 trillion whatever it's going to be. i think that's going to be how it moves through what does that mean for the markets? and so much of it has already been baked in, in terms of the infrastructure spending in terms of potential for tax increases this is the specifics we don't know, maybe that's enough to move very small areas of the

market beyond that, what happens? >> yeah, becky, that's right our view is that as well, that there will be a vote, likely on thursday for this bipartisan infrastructure you have to remember, that bill then gets signed into law by president biden because, of course, the senate already voted on last month. so that will get signed into law. then as you say i think you know fairly that their focus will then turn to this partisan framework. but to your point, what is the size and scope of that really still remains unclear. we know there will be some tax increases. i do think the market can move incrementally on the details of that for instance, we don't exactly know where capital gains rate will land. we don't know where the corporate rate will land or these international tax provisions which affect multi-national companies in particular significantly so i think there is room to move

the market but albeit incrementally our view in general, though, is that because of the, a lot of this fiscal stimulus from the c.a.r.e.s. act wearing off at the end of this year, this will likely be helpful for growth but it doesn't necessarily fill that big gap that is going to be created from all of these provisions that were, of course, posturing a really extraordinary time that will roll off at the end of this year it helps incrementally from a gdp perspective. it is certainly not the size and the scale the front ended loaded nature of the c.a.r.e.s. act provision wes saw over the last year or so. >> it's interesting, the c.a.r.e.s. act is winding down, have you the federal reserve with j. powell going before the senate today to talk about how you could see higher rates sooner than rather than later. whether it's transitory and goes away or the fed will increase rates fast tore cut it off.

>> we're seeing the fed in a little bit more progressive ly starting their tapering time frame. we don't think that moves the needle very much here. you are right, fed is talking about, you know, taking backs some extraordinary monetary support. i don't think the markets are super focused on or realize is that, of course, you know, j. powell's term is coming up at the end origining of next year, but as is vice chairman monetary policy rich clarida and rich quarless in october and a vacancy and the big question mark for the market is who does president biden nominate for these key positions in the fed and really have afternoon ability if he wants to, to really remake the composition of the fed? probably the fed would look a little more dovish, honestly, than anything else, especially if progressive democrats in the senate get their way >> so i've heard people say if

it's not j. powell, the market is not going to like that, they like his steady hand at this point. if you say it that way, if president biden remakes it, it would be a much more dovish pie. the fed that that will be something that would make stocks go higher probably, too, right >> yeah. or it could also unnerve the markets as it relates to inflation. so i think there is a down side there. it's just the reality, the political reality here is that, you know, our view is president biden probably renominates j. powell after all the reasons, the market has life and he also has deep bipartisan relationships on capitol hill and i think the general view is that he's done a good job during an extraordinarily difficult period of time i think it's those other positions, though, where there will be some big question marks. of course, j. powell is really important as fed chair, but it will also be who the other members of the fomc will be an important question mark.

>> so here's my question, if progressives are the ones that have to eat it with the bipartisan infrastructure bill and the price tag on the human infrastructure side of things, what are they going to give back if they have to eat it also, they're not the ones that necessarily want j. powell there? what will they have to be given? or will they have to learn the extreme part of the caucus and you will not have your way >> look, i was saying, we remind clients all the time is that president biden is navigating the narrowest congressional majorities since grover cleveland. so he has visited as a first term democratic president. so this is incredibly challenging. so the idea that, you know, progressives can come and accept that they would get all of what they wanted is probably not realistic just looking at those narrow congressional majorities and i think that at the end of the day, becky, look, a half a pound is much better than nothing. right. so they at least will get something. we are still talking about in

addition to the $1.2 trillion bipartisan deal $2 trillion or more or less, so they are still for sure getting something and within that, importantly, a lot of the priorities that a lot of progressives and moderate democrats have wanted for years, the child tax credit, child care tax credit, what have you. it's not to say they're not getting into anything here but you are right, you could see some concessions, particularly on the nominees, whether it's the fed or outside of the fed, we've seen that the occ, for instance, that you know biden has sort of, you know, extending an olive branch to the progressives on the nominee. so the fed could be, you know, it could be an indication for the fed as well. >> libby, thank you. >> thank you, appreciate it. coming up, ford and battery supplier sk innovation teaming up to build new factories in the united states, creating nearly 11,000 jobs. this company looks to push further into the electric

vehicle market we will talk about it on break and look at the leaders and laggards in s&p 500 this morning. we are back after this i've spent centuries evolving with the world. some changes made me stronger. others, weaker. that's the nature of being the economy. i've observed investors navigating the unexpected, choosing assets to balance risk and reward. and i've seen how one element has secured their portfolios, time after time. gold. an element so agile and liquid. a proven protector. an ever-evolving enabler of bold decisions. an asset more relevant than ever before.

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ford rolling out an $11 billion ev plan that includes building new plants right here in the u.s. creating thousands of jobs. phil le beau joins us now. >> good morning, joe, huge commitment from ford in fact, it is the largest single investment all announced at one time. it's four plants let me roll out what ford plans to do. two new plants in tennessee. one will build electric f-series the other one will be for battery cell production, in addition, ford is announcing plans to build two new battery plants just outside louisville, kentucky now, all of this is going to be 11,000 new jobs being added by ford between tennessee and kentucky and in the case of all of these locations, these are greenfield locations, they are building from the ground up.

they're going to be huge, in fact, one is going to be three times the size of the company's historic rouge plant the plan is to have zero waste in terms of water, in terms of other things that come along with manufacturing the carbon neutral, a very ambitious plan, ford putting in 7 billion sk innovation. the partner why korea the other 4.4 billion. the ford f-series lightning is the model coming out next from ford this is just the beginning they know that electric pick-up trucks are a big part of this. that's why they are building a plant outside of memphis the lightning, by the way, has 150,000 reservations so far. it comes out next spring you take a look at shares of ford, they are targeting 40% of their sales being electric by 2030 so do the math here if you are going to get to 40% of your sales being electric, you got to put the pieces in place in order to not only

manufacture thevehicles and batteries and ramp up those sales, later this decade do not miss our interview. you know this is coming up next hour are you as excited as we are to talk to jim farley, four plants, 11 billion, 11,000 jobs a. big deal for ford and the latest sign, guys, that the auto makers, not just ford but all auto makers are going all if when it comes to electric. >> phil, thanks. are you right, we are looking forward to doing it. a quick wrap, we look forward to it, phil, see you soon when we come back, which greenfield lightshed partners cutting the cord and in the next hour, supply chain bottlenecks, the executive director at the port of los angeles will talk to us about what is happening at e uny.e of the busiest ports in thcotr big problems we'll be right back.

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subscribers to youtube tv may lose ac sicess to a few channels the next guest, the conflict represents a new front in the decades old war between content providers and distributors joining us is rich greenfield, lightshed's co-founder if you did put so many names in

there, we seen these movies many times. this is a whole new group of players entrants, it's not i have a com, i don't know, spongebob, i remember that that got me. you can take my spongebob away, will you get my attention. this is similar. >> well, look, i think, joe, what's happening is historically, these battles were comcast and charter and directv and dish network, we probably have been on "squawk box" many times talking about dish network and charlie getting into carriage battles carriage battles with over the top services, these sort of what we call virtual mpds, virtual cable companies, whether it's youtube tv or hulu live or you know what was you know the old directv now. all of these products have taken on more and more sob scribers, sling actually, which dish owns. they were the first, the original vmpd.

but as these services have gotten bigger and bigger i think it's only natural you get into the same old carriage battles that we have been talking about for you know essentially my entire 27 years covering this space. it's now just playing out in the virtual world versus in the traditional sort of fixed line world, whether it's cable or satellite. that you and i are used to discussing i think for your viewers, what is interesting to think about is youtube and hulu live, the two biggest virtual cable companies, mvpds, they now represent about 10%. maybe a little more than 10% of all of the cable and satellite subscribers in the industry. so they actually matter. they used to bepimples >> who is raising prices who is saying uncle, no, that's too much how did it happen? >> this is always about, you

know, more than just the price i mean, look, there was a very high profile battle that you probably remember that played out a few years ago when dish network dropped the regional sports network so both dish and sling, which is its vmvpd, they dropped all of the regional sports networks several years ago, just because they got too expensive they wouldn't allow them to cheer it so that's why those channels no longer exist across dish and sling. it's always more than rate it's about packaging, it's about other things n. this case, it probably involves peacock. there are more at play than simply the rate. tell challenge is the business is changing. you are seeing, you know a tremendous shift in priorities from all of the media companies. right? a few years, when you and i would debate, hey, it's netflix, amazon, hulu think about it now

i mean, we're talking peacock, paramount plus, disney plus. espn plus. everybody is, discovery plus, everybody's got their own strategy and it's creating more and more friction in the business because everyone is trying to -- >> you think it's not in question >> it's about more than peacock but certainly peacock plays a role in this everybody is trying to -- look, investors, if you think about what investors are looking at right now, the most important thing to media investors you know, in many ways, you can sort of blame bob eiger for this the success of disney plus the stunning success, blew out of the water anyone's wildest expectations for subscribers and despite the pandemic, disney stock soared because disney plus was seen as a massive success, massive outperformer that's caused everybody else from comcast nbc to i have a com

cbs to discovery everybody wants to be in the streaming game everybody wants the investor love and affection that netflix got, disney has now gotten so everyone is pushing direct to consumer in a very aggressive manner now it's actually impacting carriage agreements and that's you know plays into why this battle is as intense as it is right now. >> so it's going to fold, because i don't know, someone said they were going to take away "squawk box" and that is cnbc is one of the 14 channels and so is the golf channel i mean, youtube better think about that is all i'm going to say. >> i'd say two things, joe one is consumer options. look, it's a fair comment, joe, people have lots of options. it doesn't take a lot to turn off youtube tv and switch on huh huh live you know, at the end of the day, google is a massive company. right? they're going to be fine whether

or not -- if youtube tv shut down tomorrow, i doubt any google investor is going to penalize google stock price. do i think there is real strategic value to youtube the every? is it helping on board advertisers iyoutube, which is one of the fastest growing subscribers. absolutely these things generally get worked out, even if there is blackouts. generally these things over some period of time get resolved. it's very, very atypical where you go months or years without the content. it happens, but i would suspect they get to a deal >> do you think this will happen where google would drop the price by $10 and you can get peacock separately will it come to that or no >> it may for a short time remember, joe, you've seen battles i remember when cable companies would literally hand out over the air antennas. they were dropping the service so these battles tend to get

nasty, they tend to get xhiktd is ittese year to switch today than it ever has been? you don't need to rip a dish off your house and get cable service or another dish. now you can switch distributors and switch to something else so i doubt it comes to that ultimately >> we got to run you know what i need to say -- >> joe, i got a new show for you to watch squid game you got to watch, the entire world is watching squid game on netflix. it is the biggest show in the country in the world today. >> nbc universial is a parent company of cnbc. i need to say that in closing. thank you and i'll watch that show thanks take a look at the futures, dow bound u down by 100. s&p down by 30 week

[uplifting music playing]

♪ i had a dream that someday ♪ ♪ i would just fly, fly away ♪ good morning, futures starting a lower open at the bell i nasdaq, the ten-year at its highest level in month fed chair j. powell this morning is set to talk about inflation, janet yellen will go before the senate banking committee and this comes a day after not one but two regional fed presidents

said they're resigning and ford supercharging it's electric vehicle plans with new american factories potentially thousands of new jobs we're going to go live with ford ceo jim farley the final hour of "squawk box" begins right now ♪ good morning, welcome to "squawk box" here on cnbc. on "squawk box", the most important business show on tv. >> yes. >> andrew. >> the most important one, you know where i heard that? i heard it on "squawk box. >> no, we were talking about this we are talking more about carlos watson and this saucy situation. >> i seen it >> did you see it beck >> i did >> there are now examples, all

of their ads, they have these quotes about them. >> amazon prime and the opening? >> so many quotes come from like paid content ads or other weird things that were basically said by them. >> by them then it's attached to -- >> other news organizations as if they said it about, the whole thing. >> while we digress. i'm joe concern none along with becky quick and andrew sorkin, with the heart and soul of the show u.s. equity future can you do it that way >> apparently. >> u.s. equity futures at this hour are down. what's taking it on the chin is the nasdaq, that was up yesterday. but the nasdaq down, so, one five on the tenf year. people started saying, whoa, tech valuations, influenced by rising interest rates, but maybe the rising interest rates are because the economy is getting better so the dow stocks do a little

better in terms on a relative basis. anyway, there we are, 1.53 on the treasury yield brent, crude oil so there are some things firing on for whatever reason you can tie it into the crude oil to whatever you want to tie it to there are maybe some positive underlying things for growth that could be impacting the bond market and maybe nor negative for tech than for the rest of the stockmarket. we'll see. you know what i was thinking we're not ought october 14th or 15th yet yesterday, i was saying we dodged the bullet for the september swoons that ends up making a good low in october heck, i gas there is still time. who knows? brent crude above $80 a barrel for the first time in almost three years and natural gas continuing its dramatic move higher then did you guys see the gas lines in london? not natural gas but the other ones. >> gas lines of cars. >> what i they call petrol. >> part of that was the trouble with getting truckers, truck

drivers to navigate those things. >> j you the idea of waiting five hours. >> another reason to plug your tesla in. >> you got to pluck your tesla in with $25 natural gas spots over there so your electric bill, it was 200, it will be very 1200 a month. here are some of the stories, investors will be talking about today, senate republicans block ac bill that would fund the government and suspend the u.s. debt ceiling the vote came in at 48 to 50 against the house-passed measure. that means the government is still on track to shut down the end of the week. senate majority leader mitch mbl mcconnell says republicans, are charging republicans charging the new debt was incurred under president trump. they raised the debt ceiling when the republicans were doing things during the trump presidency that's their take on things. pfizer has said on "squawk

box,". >> as said on "squawk box" >> republicans, they may put that down as if that's -- pfizer submitting some study data to the fda on the use of it's mrna covid vaccine in children ages 5-to-11 or formal authorization submission is expected in the coming weeks the american academy of pediatrics says virus infections have soared in children, hitting the highest point in early september and some more vaccine news, sanofi announcing positive results from its own mrna vaccine. then the company said it was halting further development because pfizer and moderna already dominate the market. sanofi says it will develop a covid-based vaccine with dplaxo smith -- glaxo smith kline there is a lot of noise.

grudge had a headline, dna vaccine, like it was the scariest thing in the world. i read the spire article and it, messenger rna to me seems a morell gapt way to do it the dna would have to get into the nucleus of the cell to be expressed into the spike protein. the only drawback. the good thing is that you can do naked dna, which you wouldn't need a lipid vesey cal, with messenger rna, you need a delivery kit do it in the cytoplasm >> "squawk" signs. >> we can merge them at the aussiefest this has nothing to do with block seven? >> not it's onesie versus two one for aussiefest two for ozzy osborne >> it will doed with wizard of

oz or australia. a minute away from the opening day on wall street dom my chnick /* -- domenic chus here >> welcome to the opening bell here on "squawk box" right now as said by me. anyway, take a look, right now the interest rate picture. a lot of focus has been on the ten-year treasury yield, back above and staying above 1.5% there is growing interest on other parts of the yield curve as well, specifically the 30-year long bond, right now 2.057% at the high point today it was roughly 2.07% as well. so as we watch this kind of rising rate environment, it's important to kind of take a look here at what's happening with the 30 year as well, trying to break out a range. the 30-year long bond, a big focus. not just the ten year right now. those higher interest rates are

carrying through to the megacap technology trade as you guys have noted with the under performance of much of the nasdaq over the last few days here, we want to show you in the pre-market trade, what's going on apple shares down 1%. alphabet 1.5% declines for microsoft and amazon and 1.5% declines for facebook. it's almost like it's indexed. these five stocks make up roughly shy of a quarter of the entire s&p 500 so 1.5% decline there. with the tech and the nasdaq a very big focus here. let's carry through those themes you were referring to as well, with the energy trade, everything else involved in the market to some of the most popular searches on our website cnbc.com from yesterday's full session. the ten-year treasury note, i will photo, has been a topper for that long time i've put it up there with regard to others in the top

10, tesla and ford, a lot of focus there, especially with ford on this new battery and ev announcement and wti crude, u.s. crude prices and natural gas prices, also both in the top 10, so a lot more focus, many traders and investors, retailing professional alike, what's happening with the commodity process overall, highlights from the top 10, andrew, as usual, the rest of the top 10 and highlights of the top 50 on twitter at the domino, i'll send things over to you. >> at the domino, thanks, dom. central bank's leadership lineup changing dramatically from 24 hours ago. steve leishman will recap all of the developments steve. >> andrew, there is trouble at the fed, chair j. powell meets for congressional testimony. he's up for reappointment. the fed embarks on a change to its monetary policy. dallas fed president robert kaplan saying yesterday he will step down october 8th. his financial disclosures showed

multiple multi-million trades throughout the year. individual stocks. some watchdog groups say create the appearance of a conflict of interest he says he did not violate the fed's code of conduct. the former goldman sax executive said he was stepping down because the recent focus on my financial disclosure risks me becoming a distraction boston fed president said he will retire february 30th. he spent 35 years inside the federal reserve. he was scheduled to become a voter next year. he said he would step down for health reasons, announcing he is a candidate for a kidney transplant and planned to retire in june of 2022. it shows he made 37 real estate trades on mortgage backed securities the fed purchasing billions in nbs as a part of the monetary policy powell may face questions about

the directions of policy, higher inflation and now the fed might react to and how the fed might react to a looming government shutdown andrew. >> steve, you know, the congressional testimony from fed chair powell and treasury secretary yellen this morning. what are we expecting from that? >> yellen will say that she's very concerned about the government shutting down and saying that the u.s. recession and the financial crisis, if a debt limit is not extended and powell is going to talk about inflation. he's making more serious comments about the threat of inflation lasting longer because the supply bottlenecks and other constraints in the economy and saying the fed will react in higher and sustained inflation becomes a serious concern. >> steve leishman. we will be watching all of it, thank you. >> thanks, andrew. coming up this morning, much more happening, the ceo of ford will join us live with news about the company plowing billions of dollars of

additional money into electric vehicle technology next, though, we will hear a lot about how covid strain the united states supply chain is. the nation's ports might be the best example we're talking serious backs ups. tens of thousands of containers out there. after the break, we'll ask the port of los angeles executive districtor what's really going on, stay tuned you are watching "squawk box," iss bcth icn

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welcome back to "squawk box. major insight in the biden administration they are set to layout the first agenda items first we have an exclusive interview, kayla joins us now. good morning >> good morning, gina romonda has 52 billion incentives for chip makers, $10 become for regional tech hubs and more for workplace training, much of which will be funding for charging corporations higher taxes. raimondo says they are hiding behind their trade associations

and lobbyists, those who oppose this >> i can't find a business person who says these investments aren't necessary you know, everyone agrees, investing in your supply chain innovation will make our economy better, stronger, more competitive. then the question comes, well, how do we pay for it and you know they want the president to be responsible and pay for it, then we, the rub is then they don't want their taxes to increase. so i think if you are honest about it, they will tell you, it's okay to raise taxes because -- >> sacrifice. >> unnecessary sacrifice, good for business in the long run you know, some have said to go from 21% to 28% is maybe a bit too high and to that, president biden has said, he's opened to compromise, like what we can't do is have inaction.

what is unacceptable and bad for our economy, bad for businesses, is not making these investments. >> raimondo suggested 26% as a possible level of support and says all of the executives that she's spoken to say they've already factored that higher rate into their forecasts for next year. andrew >> it's fascinating. how much do you guys get into what's about to happen this week in the battle of what's brewing? >> well, we got into that a little bit we talked about the chaos that is going on in washington and whether that sends the right message to allies. the administration is trying to say if they invest here in the u.s., then they can approach a lot of these negotiations from a position of strength she said the passage of the bipartisan infrastructure plan in july of this year, that sent the right signal to partners and adversaries overseas, that the

government can function. she says what's going on this week sends the opposite message. certainly, we talked about tiktok, tech regulation, forthcoming negotiations with china and europe there is a lot in that conversation and, andrew, mote of it is on cnbc.com. >> we will look forward to it. thanks appreciate it. the pandemic continuing to disruption supply chains world wide we spoke with our next guest queen's park ago when there were dozens and dozens of container ships in california. fast forward, there are dozens and dozens of ships waiting to dock so what is the problem joining us is gene siroco, the port director at the port of los angeles. thanks for joining us. >> good morning, becky >> there was a page one story in the "wall street journal" this week that kind of caught my attention. it laid out the problems in more complexity than i had realized to this point. i think there was one line that caught me.

it talked aboutdespite shing delays, the busy yeftd u.s. port complex shuts its gate for hours on most days and remains closed on sundays meantime, major ports have operated around the clock for years. what are they doing and why can't we >> it's a little different business model in asia and europe, you remember i worked in asia and the middle east for 11 years. most of the cargo is concurrent relay, it's cargo moving from big ship to smaller distribution to other countries here we're a gateway multi-model connectivity it's so difficult to pull all of those nose of the supply chain together to work on the same schedule we got plans in place and a redesign of a push 1278 specifically given to us by importers that we think is going to make a difference. >> the port of long branch says that it's going to try 24 hours from monday to thursday. how are they able to do that

what's been missing? gene, specifically on this, everybody you ask has a different take it's the long shoremen, they'll say, you can't find help, workers to do this they'll say, it's because, you know, the shipping companies aren't getting rid of some of those containers quick enough to make space here what is happening in what are the bottlenecks? >> it's all of the above and more, becky. what long beach has described according to my information is that one of its six marine terminals will pilot 24/7 operation. early take and planning hasn't yielded the momentum that they had thought, but more time will tell exactly what that will be for our side, we've diagnosed that 30% of truck appointments go unused every day for a multitude of reasons so we have latent capacity available to us with long shore on deck, marine terminals opened, truckers and rail operations happening right in front of us, designing that push

system with importer commitments along with corresponding commitments from shipping lines to accept exports and empties may be the way to go. >> which means what? even if you were to stay opened, if you can get the union to work on a sunday, there would be no one on the other side to pick it up with the railroads, with the trucks now you think you can get commitments to do that >> that's been the key so far. we've used a poll system with our private sector terminal operators, of which we are the landlord here in los angeles, opening the gates and setting up an appointment system for each shift each day, waiting for folks to make those appointments and come in. let's turn that around the other way by pushing out the cargo to spec importers, lining up the exports and empties to return. so the truck drivers can get round-trip hauls this is so important for them. because every move means money to these truck drivers and while only half of those who

are registered are calling the port weekly, we need more to come in. we've also used extended hours as recommended by newport enjoy john baccari assigned by the white house. i was down here saturday night and saw six of seven of our terminals working when they normally don't long shore workers have been on the job six days a week since the pandemic it's the segment of truck drivers and warehouse workers we have to bolster. >> one of the complaints is also it's really expensive for importers to do this, if they want to work the off hours, because sundays and the overnight shift, it costs about 50% more, is that true it costs 50% more? >> if not double for the work done oak that's why looking at these 30% of appointments that need to be filled, while we have human capital andened infrastructure in place is the start point for the work we're doing with all this cargo coming in, the convergence of your online buying, the consumer strength

that we've witnessed, now going into the all important holiday seasons, we will expand these hours with all the cargo coming in, we're showing it today >> that haitian it sound like this is a temporary problem, that this will eventually ease out and you won't need 24/7 operations is that the case you think this goes away at some point? >> we've got to do better in our industry, becky, of being able to scale as we call it in logistic sector and reflects to peaks and valleys with the cargo flow it's my estimation we will see strength in the import market through lunar new year, which will take place in the beginning of february 2022 major retailers tell me after that holiday or assemblance there is with all this cargo flowing, they'll focus on a replenishment in the second quarter which may lead us into peak season again. so the strength of that import market, we movie past the delta and new variant.

even though we move discretionary income to the service sector looks very strong. >> it makes sense all of this was exacerbated by covid but what was normal before let's go back a couple of years before we had covid here was it a situation where you had lots of ships that were waiting to come into port again during busy seasons headed into the holidays >> no, on average, we welcomed ten container vessels today. and the last month, we're averaging 18 every day so our productivity per vessel up 80% in the last month 50% since this surge began and in more normal times, we did not see vessels at anchor. we work on a windows-based appointment shipment as the ships come across the pacific, they have a specific time and date to birth alongside inside the port and begin their work. >> are there situations where some importers, i guess these would be the big retail fames, an amazon or walmart or target,

they are capable of saying, okay, we will work with you on these additional open slots that are there, we know we have someone who we can send the trucker, they'll pick it up. we can ship things back and make things more smooth you work with the big guys first? >> well, we're working with all covers we did have conference calls just last week with the national retail federation membership along with the industry leaders association, who make up a great many of our retailers across the nation big and small and we have been taking doctor exfrom them over the past week to make sure that we have lined up those commitments on how many containers they can move out every shift, every day an corresponding with the steamship lines who control the exports and the empty container returns to make sure we match those both as an importer picks up a container, they are dropping off an export load it's exactly what we are doing is getting those commitments up front so we know what the line

of sight is for every shift of work >> thank you good to see you. i hope these problems get resolved coming up, the ten year, the yield, broke above 1.5%. now what is it going even higher? we will talk about that. as we he ed to break this programing note, cnbc is delivering alpha conferences tomorrow. >> tomorrow? >> really? >> from spacs. i'm prepare. >> from spacs to crypto. all about maximizing returns in this new era of opportunity. we're bringing you unparalleled incite in investment strategies him some of the biggest names in investing at this virtual event. register now at delivering alpha.com. "squawk box" is coming right back

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welcome back to "squawk box. the futures have been in the red. we see the dow now down triple digits the nasdaq was down, the dow is up, it is now down 227 points. the s&p 500 indicated down about a 34 or so it's coming up >> okay. coming up next, a first on cnbc, the ceo of ford, the commitment to evs with billions of dollars

worth of new domestic investments planned. you don't want to go anywhere. "squawk box" is coming right back with that and so much more.

. ford busying up its commitment to electric vehicles in a big way, including new u.s. plants expected to create thousands of jobs, phil le beau is with us earlier and joins us now with that special guest we are talking about. >> joe, let's bring in jim farley, the ceo joining us from outside memphis, tennessee, blue oval city. i believe that's where are you at jim you will be announcing the commitment you announced last night, formally you will be doing it with the governor of tennessee. tell us why this commitment in west memphis or outside of memphis as well as the two new plants in louisville, why did you pick those locations >> well, good morning, phil. this is a really big day for ford this is our biggest manufacturing facility in the history of our company and as you know, we're the number one

auto employer in america so it's a big deal we pick the locations because we have three battery plants and the battery plant locations are very special we need affordable energy, the environmental approval done and we feed greenfield sites so we don't slow down with any remediation for environmental. the government support, access to skilled labor these jobs are very different. all of those factors you know, we need the battery plants really close to assembly plant. unlike a nice power train, you can't ship batteries far we want them near the plant. that's why we are building such a big site 6 squares miles of the assembly plant to build new trucks. we need the battery plant onsite. >> jim you will also have, i know you are working with redwood materials, which is battery recycling. you are also going to have

basically from start-to-finish the entire life cycle for the electric vehicle battery on these campuses, so that you can say, look, at the end of life, let's recycle it we have the materials that we can extract from these batteries. the battery cells, put them into new ones a lot of people look at that plan and say it looks good on paper. i'm not sure it will be something that can be executed in reality what do you say to that? >> well, we disagree this is something we've studied. we have to do this, phil look at the chip situation we have to end source the batteries. we have to learn how to manufacture them in this country. we can no longer import raw materials from halfway around the world like cobalt. these materials have to come from north america we scrap in battery manufacturers, a lot of batteries. we need the recycle those into the manufacturing process as quickly as possible and as you said at the end of the life, we

have to get those raw materials back into the manufacturing system i think what you are learning here, seeing from ford, is not a big investment to scale ewillic trick vehicles a million vehicles worth of batteries in this case with recreating local supply chain that's circular so we don't have to depend on anyone. >> and this kicks in what, 25 is when we see production at the f-series, electric f-series plant just outside of memphis and the battery plants come online will we see a real ramp up '25 through '28 through '29? >> well, look, we're ramping up now. we have almost 20 gigawatt hours. the f-150 we're about 150,000 orders now we're not waiting for anyone we're in the market now. it's show not tell time. yes, this is going to be a further ramp-up of our battery electric volumes as i said, aple units worth of

battery capacity just for ford so do the math we sell about 2 million vehicles in the united states this announcement alone is a million vehicles worth of batteries. so it's a very large scaling we're not going to tell everyone what the product is. but we have a whole full f-series lineup. we're the best selling vehicle in america we sell over a million f-series. we have lots of new kind of ground-up electric f-series in this plant. >> jim, you mentioned the chip crisis give us a sense of where are you in terms of when you believe you are going to start to see some improvement in the supply of chips as you mo into the fourth quarter? >> well, phil, you know, ford was really uniquely disadvantaged in the second quarter. we lost 50% of our production. our competitors lost much less in the second quarter. that's because of the three facility burned down in march. tear up to speed now we're improving our shipments to

dealers now. our inventories are growing very fast at ford our production and third quarter is marketedly better in the second quarter at ford, things are getting better but it's so far short of demand because we have this all new lineup, plus, you know, the malaysia shortages on ship processing and packaging because of covid so you know, i think it's safe to say that we're going to be short of these key ewillic tronic components, probably to the end of next year we should count on that. the good news is a pricing environment is extremely strong right now. thankfully, we have a strong captive. so all those returning lease and finance vehicles, they're worth a lot more than we saw so that's helping to offset a lot of the production losses. >> jim, real quick on covid-19, the vaccination mandate has become a hot button issue with so many corporations where is ford right now both with your hourly workers as well as your salaried staff

>> good question you know, we have populations at ford that require vaccination like myself. my whole leadership team, our medical staff. they're all vaccinated that's required. no questions asked when it comes to a larger population at ford, we want people to get vaccinated we invest a lot to do that we are surveying to find out how many of our employees are vaccinated we're excited about the mandate, we'll work with our union partners, that requires collective bargaining in some cases, and i saw ray curry last night. we talked about it we'll work through this. but at ford, we think vaccination is mission critical for the safety of our team >> but it's not mandatet as of right now for the uawa workers >> no, that has to be collective bargaining it's a part of the process and as i said, raising the new head of the aew

we're talking about it we'll work through it. nothing is more important than safety obviously, our playbook, covid-19 safety playbook worked really well. we have hardly any covid cases in the company we do feel vaccines are the right move but we have to work through the process. >> hey, jim, one last question this will be a ground up, your first all new final assembly plant tins since i think 1969 do you expect to see more brand-new final assembly plants as you build more in the future or do you expect it will be a mix of new ones as well as retrofittingsome of your final plants >> it will be a mix. no doubt about it. but we're really excited about this brand-new because it allows us to be carbon neutral. zero waste landfill. you know, 100% recycling in the water. it's just a great big growth opportunity. you know, what we found so far

is 80% of the people buying mach-es or reservations are new to ford. so these are growth opportunities for the company. in the case of a growth opportunity, you go after a new market or there is incremental growth, we could build a new na silt it will be mixed we have to convert a lot as we do in oakville and all over the country what i'm excited ab is the insource on these batteries. these are new jobs there are 11,000 new jobs. good jobs for americans and that's going to be additive. as we insource, we can offset the efficiency in the assembly area for the job loss for these electric vehicles so this is getting a net gain for the company. >> jim farley joining us from blue oval city just outside of mem cities, tennessee, jim is like a politician today. have a good day. i know you are with the governor of tennessee and governor of kentucky this afternoon, a good day with a couple big

announcements, thank you, jim, for joining us guys, i will send it back to you in the studio. we talk about these ev commitments. i think times maybe our viewers might look at us and say it's another ev investment. this is huge this is the single largest investment fords a he -- owe fos ever made. >> you said he's like a politician that's why they want to go where the jobs are with this stuff, too phil, thank you. when we come back, we get jim cramer's take on the day ahead. also, we will take a deep dive into treasury yields the ten-year hitting the highest level in months. it's above 1.5%. look at that 1.54% climbing rapidly wl lk about it when "squawk box" comes right back.

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moo. meantime, jim cramer joins us the markets are moving in the opposite direction what are we going to do? >> look, there is obviously people out at 3:30 this morning trying to bank futures out they expect it will be down even more i can't disagree yellen is saying that good word, a shutdown, have you powell basically i think caving

i think that you notice when steve leishman made his comments yesterday, that's when markets starting pulling until everybody realizes that rates are not done going higher and supply chain problems are not going away this is not a good moment. and i think it's just the wrong time the end of the month, the beginning of october people don't get worried until mid-okay i think we are re-adjusting. everybody is re-thinking this market i this city industrial move and bank move will roll over because i think people will be so worried about oil >> you are one off if banks right now? >> i think that was the trade. i don't know if you continue to buy on them. how many, are you going to start running into the earnings. then you realize the earnings had nothing to do with this interest rate move. >> i don't think you want to own much at all. of j.p. morgan that was up hey, wells fargo, what are we

supposed to do everybody resign, have the bank run by ai? >> but if ray is right and cash is trash cash might be temporarily better than trash potentially. >> thank you i mean we'll recycle it. cash is trash with one of those things a really rich go i can say. no, it's trash today there is probably trash today. in new york, we had trash days wednesdays so i do think we do not want to make a move, if are you in these don't panic and sell this is not a seasonably great time what powell is saying is not great for the stockmarket. did you think that it's pbad those two guys cot cancelled >> >> kaplan and rosengren. they spent their whole lives doing good >> my take is they should not have gotten cancelled

themselves, but i do think the policy needed a relook and i think policy should be relooked there and relooked by, frankly, any elected official. >> can we rebuild? you know they're good guys and you nknow that they're done i know they made a mistake when i covered the federal reserve, he said you scant trade period i feel badly they have been on a lot, kaplan is a smart guy knew we think of them as an insider trader sorry. >> his views were counter to what his position on stocks would have been. he was talking about taking the bunch bowl away on a lot of these things the energy stocks, is that one area you might touch at this point? >> yeah, i still think you can buy them, because some of these aren't pumped in, they're too

busy giving dividends to aramco. our big oil companies have gotten religion. there is an acceptance that this stock, these stocks are still under owned. you can buy pioneer, chevron i think you can literally buy almost anything in this group. it works it's the worst group imaginable. 92% of the s&p >> it was just, with had an analyst on earlier, talking a little about how we think we can ask make this transition to the green. guess what, you will feed these guys around for a while. especially in places like europe. >> i don't believe that mike, when he did the chevron, when he went from 3 billion to 10 billion to get to carbon neutral. that was not green washing at lot of pushback is will you give me a break? every company is carbon neutral. i think, look, they're in the business of carbon it's not like they will suddenly not, i generally think some of these companies are trying under

a court order. i think chevron is trying. i will battle anyone i don't think that i think he's a good guy. >> okay. jim cramer >> you know why i'm angry? >> because of the birds. >> the beatdown last night it was a beat down and call me e i'll feel better that was really horrible just a first-class eatdown. >> jim, i had everyone telling me that the public is all in on dallas and i actually had a free bet and i took dallas in the over and i didn't change it i don't know, dak prescott, first time he's played at home in a while -- >> there was emotion there >> i really thought -- so the public was right 90%, 80% was on dallas and they were right. they were really right i didn't change it i'm sorry for you. i feel bad i thought about you. >> i appreciate that.

>> but i did stick to my guns on that one and said, i really think dallas -- >> that was a good call. just unfortunate >> next sunday >> we plays the chiefs that will be an easy game. the fact that they lost -- that doesn't matter andy reid hopefully is healthy that's going to be a close game. very close if you give the eagles 21. very close. >> exactly thanks, jim. the 10-year treasury yield above 1.5% hitting its highest level in three months our next guest says yields are going even higher. president and investment strategist, and rick stan telly is here. we were at 1.6, 1.7 and you had already switched from your long standing 1% call and you said, we'll go to two. and then we had a left turn on

the way to albuquerque now we're back to 1.5. you're convinced this time it's when we get to 2 this time we do get through the hold highs on the yield and up to 2 >> if you recall what i've been saying to you since january, in a matter of a few months, we're going to head to 2%. there was no call in between, there was no trading advice regarding how we will get there, but that it could go down before it goes up i still believe in my 2% target. we had about 45 basis points away i still believe that we'll be there before the end of the year it could well happen in a matter of a few weeks but if you say to me, will it go from 155 to 140 or 135 before it goes up again? sure, it's possible. all i'm saying is, you are

looking for it to end up at 2% and then re-evaluate after that. >> rick, i guess the point i was making, stocks have already digested 1.6, 1.7 and they said they're going to stop here and trade around for a while they actually went down. i don't see why this would become a big issue for stocks unless this time we go through the old highs. rick, i don't understand why we had no price discovery we cannot explain 1.2, 1.3 except for maybe global inflows. what's changed there the inflation fears? what's changed in the last month from having those crazy yields back then. now they're not quite as crazy >> i think that the move has been so compelling, the underlying inflation rates have been compelling. even though the smoke signals are highly distorted, for most markets, the signal is still

eking through even in its most handy capped form. you have five-year breakevens at the highest level since 2012 we're looking at their inflation coming out and most likely it's going to show similar moves and we can argue about transient or not. but in the end, markets are supposed to be pricing right now. what's inflation right now there's supposed to be some built-in mechanism here. self-adjusting send signals to the world, you're spending too much money that 300 trillion in global debt is too high. if you squelch the signals t band keeps playing but it is starting to breakthrough your last guest is a very smart man. i've been much more generic. it's been off to the races since last month

we talked about -- the minute you close above it, you have not looked back. can it go to 2%? sure, it can at some point we're going to see that thumb on the scale again somehow because there's no way any of these treasuries around the world in any of the advanced economies can afford where i think interest rates can go with respect to how much it costs to service the debt. >> if you were listening there, rick basically saying that the price signal has been distorted because of central banks and policymakers around the world. but it's starting to assert itself because it just couldn't be like that forever holding a beach ball under water. once it gets up a little bit than that, you're going to see another concerted effort to keep yields down. >> i agree with rick in terms of the expectation that the fed and european central bank will hold them down, joe but the point at which you would still continue to trust in the

central banks is fast. if they make a new effort to control rates, they're going to have diminishing returns to the efforts. the whole thing reminds me of a 1971 woody allen video clip if you see the movie "bananas." he guides the driver to come on, come further back, and then the car hits the car in the back and he said, that's okay, now you can stop now you can walk away. he said, oops, it went up higher than i thought, but it's still transitory and today he's going to tell you at 10:00 eastern that it's going to last a lot longer than he thought don't trust the fed. >> right that's good analogy. oh, yeah, it wasn't transitory sue me thanks, sri, thanks rick

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final check on the markets take a look at the futures they've gotten a little bit weaker for the dow over the last three hours.

down by 150 points versus down 100 when we started. the nasdaq is the big issue. we're just about where we started the opening, down 224 points which is a decline of almost 1.5%. oil prices and natural gas is up by 3.8%. that does it for us today. join us tomorrow bye, guys. right now it's time for "squawk on the street. ♪ good tuesday morning and welcome to "squawk on the street." i'm david faber along with jim cramer let's give you a look at futures as we get to open the market a half-hour from now numbers just out home prices up 19.7% in july compared to a year ago you can see, of course, jim, where we are headed here