good morning futures pointing to more losses after fed chair powell's comments at jackson hole sparked -- let's say preceded a 1,000 point selloff in the dow. now it's jobs week in america and we will get you ready for this week's employment report and the other big market events that you need to be watching. plus, countdown to launch. nasa's artemis 1 is set to take off in two and a half hours for a mission around the moon. it's monday, august 129th, 2022 "squawk box" begins right now. good morning welcome to "squawk box" here on

cnbc live from the market site in times square i'm mike santoli along with joe kernen joining us is stephanie link good to see you. >> good to be here. >> equities showing a little bit of down side down 3.3% on friday in the s&p you are looking at less than 1% decline here the dow down 250 it has been down as much as 300. the stock market did react more dramatically friday than the rest of the markets. the bond markets, of course, it comes since the worst day since may in the s&p dropping 1,000 points. all averages down 4% for the week treasury yields did not do much on friday. it was mostly in response to jay powell saying it will be higher

for longer for rates and maybe engineer a deep slowdown in the economy. you see the summary action 2-year treasury above 3.45%. effectively at the highs that we saw earlier this year. that shows pricing in more fed rate hikes 10-year treasury at 3.12 inverted yield curve the dollar is a bit higher as well steph, i guess the quick take on friday stock markets seemingly hoping for a different message. >> the fed pivot that people were talking about in june and july wasn't the case he told us that on friday. basically, they are behind the curve on inflation we have been talking about inflation forever. they need to get ahead of the curve. he basically was more hawkish. he is scared to talk about having pain in households and businesses that's just not something i've ever heard a fed chairman talk about or say.

>> prolonged period of below trend growth is what he characterized might be required. the take away is he may have been presenting the case recession is what is needed as opposed to what might be an unfortunate side effect. >> if he is already very sensitive to causing pain, it almost make me think i worry if he has the resolve to do it. i was thinking a pivot near term might have been what the market thought it wanted. if he had been dovish, we could end up in the same place at 1,500 points it could be the wrong thing to do we have the arthur burns summary of everything that happened in the '70s in the "wall street journal. you can think you have inflation licked and if it is wage price and systemic, it can be horrible >> one thing that did not get

attention was the core pce on friday 4.6% that's huge. the goal for the fed is 2% >> right. >> i don't think that got any coverage. >> arguably, it was a little cooler than expected >> yes cool price >> if you are looking for multiple months of inflation, it fits into that script a little bit. in terms of the arthur burns thing and resolve, he frames it as this is the populist right thing to do for the overall country. in other words, you know, a time when getting unemployment as low as possible was the thing to do for the average person the thing to do is make sure inflation becomes contained. that sets the ground >> all of the anecdotes. for us, we're doing -- i do the self check out wow. i'm not thinking i need to put that back. there are people that what do i

want gas or ood that is not hard to see that he would be -- >> even rents. 7.5% year over year in july. that's a huge number rents, wages those are the sticky parts of inflation. you have natural gas up 14-year highs. oil. food is up 13% year over year. this is real stuff. >> i like the 4.6. i've been asking guest after guest. give me the number we need to go above on the 2-year treasury >> yeah. >> not 8.5 ppi, cpi, it's alphabet soup which one is the real one that the fed needs to focus on? 4.6 sounds better than 8 .5 they are measuring different things when you read this, inflation was 11 if we get to 11 -- 4.5

>> one read, he was saying on friday was not that rates have to race higher from here once we get to whatever level we're headed to, we may say there for a while. you have to get used to that as the baseline cost in the k economy. the market gets this whether he believes or not they have a long way to go in hiking. whether he believes they will not take a pause, he has to say that they have the resolve because he doesn't want the market to front run that >> he sounds more aggressive on friday >> how do you not? he was preceded by people trying to say, if we go half a percent in september, that's aggressive. they were trying to make sure the market not get the idea they were setting up the dovish pivot. >> jackson hole was big. now we need to know if employment is a lacking indicator. maybe we see something on friday that gives us a little breathing room

if it is as strong as its been, this could continue for a while. the sidequawk planner. on wednesday, we get the first look at retooled adp private payroll report that report has been paused for two months while the company changed the methodology. on thursday, we get jobless claims and second quarter productivity data and then friday is the august employment report light week for earnings. if you are not done now, we're just not going to do them. if you can't get your work in at this point -- how many extensions do you get in school? retailers are different. there are companies on different fiscal years it is almost september let's go we are worried about next quarter. i finally do my taxes after the extensions, it is next year. i'm not done yet are you?

i'm not done i'm afraid to say that with 87,000 people breathing down my back. >> it leaves you ahead of the game in the end. right? >> best buy. hp hp enterprise report ctomorrow campbell's soup on thursday. broadcomm. and then, mike, we talk about artemis. i want to talk about artemis we will. the world's biggest proponent of electric vehicles says we still need oil and gas elon musk says civilization will crumble if oil and gas exploration doesn't continue transitioning will take decades to complete and the biggest challenge the world fashced. musk hopes to announce a new location for a tesla factory

later this year. nasa plans to launch the artemis 1 mission today in kennedy space center in florida. sending the rocket and orion capsule. it kicks off the long awaited return to the moon surface the first mission in the program which is expected to land the astronauts on the moon by the third mission in 2025. >> now i need to go back and talk about the musk news for a second did you watch "60 minutes" last night? the grid story nothing about whether we actually are going to have trouble supplying the grid this was about sabotaging and knockout a couple of stations and you knock out the grid we would come to a standstill. they tried it before snipers shooting different power stations they uncovered plans to knock

out as few as 9 of the 5,000 stations around the country. i thought about europe and natural gas and how we supply the grid here. i heard elon talk about it we have to make the transition it is diis decades use the "d" word >> it is interesting on the one hand, it is intuitive what he is saying. pretty much the prevailing wisdom it is decades and don't worry about it is that $900 billion tesla evaluation he seems to make that a lot sooner. >> he wants to go to mars. i like the moon. i've given up on the cultural references when you think of artemis, i

t think of artemis >> greek mythology. >> she was all about the moon. in addition to the goddess of hunt and wild animals. child birth, care of children and chastity can you imagine? a lot of her time she spent with other lunar dieities now you know that's where artemis comes from. >> the twin of apollo? >> the roman goddess is diana whethif you are looking for artemis. >> the apollo mission that nasa had. >> she is a deity. most known for being a hune

ar lunar deity how do you say s-h-c-a-t-e rory mcilroy, did you see this rallied from six shots down and won the fedexcup you can make more money doing nothing on liv, but you can win the fedexcup that would have been unbelievable for scheffler who won the masters and rookie of the year if he had won that, that would be something rory, i don't know if you saw it, didn't make a putt over 25 feet

but made four putts over 25 feet yesterday. it was interesting hitting into the par 5 in two and put it into the stands took a drop. >> yeah. >> was able to -- all he needed was par. >> he needed a challenge it was too easy. >> it was close. i thought the gentleman, mr. im, was going to win at least tie he just missed a putt on 18. you didn't watch what were you watching >> it's not my thing >> giants/jets >> it's baseball season for another two months >> i was watching that, too. the jets were cute yesterday it was like they won the super bowl this game and running around it was -- i enjoyed it >> take it where you can if you are the jets >> exhibition game nece coming up, we get you ready for the jobs report and trading week ahead

futures right now still opening with losses. s&p down less than 1%. later, we talk about fed chair powell's speech at jackson hole with former fed chair roger ferguson you are watching "squawk box" on cnbc >> announcer: this cnbc program is sponsored by ibm. ibm. let's create ir seats? so, you partner with ibm consulting and use ai to analyze millions of data points to help predict player performance and bring fans closer to the action. now you're serving up head-turning insights and transforming your business into the top seed. let's create experiences that ace it with your fans. ibm. let's create

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trading week with autos. we have stephanie link with hightower joining us for the hour eva, good morning. >> good morning. >> give us your assessment of friday we mentioned the stock market reacted in a more dramatic way to what jay powell said than the bond market did and foreign exchange market did. did it change the picture in terms of how stocks are positioned spl >> not really. to us, the fed revealed nothing new. they have been consistent with the message. we did not get into this mess overnight. we should note e expect to get t of it either it will take one to three years to reach the goal of 3%. if that said, we might see reversal this week that put volume spike and doubled on

friday if you look at the advance decline volume, the decline volume was much farther ahead. last time that happened was june 13th and june 16th and then followed by the strong bull market we might see the same happen this time as well. >> no doubt it was pretty aggressive selling and maybe on a short-term basis washed out. i guess longer term, if you say it is one to two years to get inflation under control and powell saying we have to deal with growth struggling under that scenario and rates staying higher do you think rates have to soften up a little bit we have aggressive growth expectations for 2023? >> dmefinitely. that being said, profits are at record lows. inflation effects each company is different we are looking at margins. to us, margins is important.

of course, we see retail struggling bed, bath & beyond and target and wayfair. at the same time, you have other companies also in the technology area able to decrease the costs and expand margins with inflation. >> eva, a question for you interest rates are going higher and usually that is not great for long duration assets you like technology. you like growth. try to explain that to us a little bit and go through your rationale. >> yes, definitely the narrative is since february of 2021 growth has significantly under performed the market that was because of the expectation that inflation wil now we have the reverse. inflation has peaked now we might see the reverse of what happened last year and

earlier this year with growth out performing the markets and value under performing >> it is the earnings pred predictability that will come to the floor. do you think we need to revisit the areas of the june lows to see if it is the real thing? >> we will revisit the june lows the markets will be choppy the rest of the year we might have a year-end rally i think we need to be patient. i think the fed will stay the course with the 75 basis rate hike in september. there are two key things they are monitoring three consecutive months of lower inflation and also the rate of change is very important. if the rate of the decrease of inflation is accelerating, that is a signal. i think we might see cooling in the rate hikes later in november and december which will push the

markets higher. >> november of 2021 is the about face maybe another one. eva, thank you very much >> thank you >> steph, we have you for the hour. coming up, a big bet on the return to offices by new york's governor we dig into that story next. and we will talk to dr. scott gottlieb for the fall covid boosters "squawk box" will be right back. . more care for your cashmere. more power for your workout gear. this is smarter sensing and dispensing. fully optimized cleaning, no more guessing. getting the best out of everything that goes in. ♪♪ this is smarter cleaning. this is ge profile.

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pushing ahead with the construction of ten towers and mostly offices located in penn station in manhattan the buildings help pay for the hub. the governor pushed for the role in the project it overstepped the zoning rules to allow developers build taller buildings than otherwise allowed. and for return to work, we have robert frank. >> only 38 p% were back in offi from june of 41% and 50 million square feet of empty office space in new york many new yorkers go away for the summer, but the most optimistic scenarios show half of office workers will be back in the office by the end of the year.

the new york comptroller showing a disconnect with employees and ceos one-third of employees expect to be back in the office more than two days a week. ceos expect three days a week or more comptroller says employer expectations and employee preferences and these rates stabilized and appear unlikely to rise quickly in the coming months the partnership with new york city is more optimistic saying office presence could reach 50% on average by the end of the year youpg e younger employees are back, but the biggest resistance is older workers who live in the suburbs and do not miss that commute joe. >> all right robert, we have lots of debates. i can't believe that number. not even a 4 back to a 3 handle what about everybody that depends on lunch traffic and

take your pick >> yeah. if you look at the average spending by commuters, it has fallen from $13,000 per year per commuter to $6,000 the biggest decline in a city. that is the economic impact. aside from the impact on the tax dollars and property and real estate and tax collections mta is looking at a $2.5 billion deficit in the next three years because ridership is only at 60%. all of the economic impacts will start to add up when this federal stimulus sort of trails off over the next year or two. tax dollars start trailing off >> it's self fulfilling and vicious cycle. if we don't have tax dollars, we can't clean up what is happening. there's trash everywhere all over new york city right now i don't know if that is related.

vibrant city needs everybody there for the guy selling newspapers and guy selling bagels out here at one of the carts and everything else. you are talking a third of the people are back to support all these people and people's livelihoods. what's the reason to hope it doesn't come back exactly? >> i don't know. we have to hope it comes back. you look at the subway and unless ridership improves, they have to cut service. that helps the most disadvantaged of new yorkers everyone is hoping this labor day is the magic number three that finally brings enough people back where the upward cycle can start again. >> okay. you see what i mean? you don't want to come back because it is dangerous or the subway then >> people are saying it may be a tougher job market we'll see how it goes.

robert, thanks coming up, the pressure on cryptocurrency stocks with the ceo of bit curry and the countdown is on for nasa with the launch starting at 8:30 a.m. eastern. we will update you as we get them "squawk box" will be right back. >> announcer: executive edge is sponsored by at&t business at&t 5g is fast, reliable and secure oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic i labra-dore you round of a-paws at&t 5g is fast, reliable and secure for your business.

good morning welcome back to "squawk box" live from the nasdaq market site in times square. futures are down down but not out it was ugly on friday. especially with the nasdaq nasdaq at 123 this morning it is early though chairman jay powell spoke at

jackson hole con furtfirming thy will wraise rates. let's bring in roger ferguson. the ceo of tiaa and former vice chairman of the fed. roger, if you don't study history, you are doomed to repeat it. it is on everyone's mind and every very interesting piece in the op-ed of "the journal" and looking at the '70s and arthur burns. i wasn't aware he was an accolade of milton free dman. he taught greensspan and is a fan of paul volcker. one of the things after everything that happened is congress is to blame or needs to share in the blame all congress is trying to do is improve the lives of americans with employment and everything else sometimes that causes a lot of

printing which the fed has to cover. is that happening again here or has it happened again? >> there's no doubt that we had a period of fiscal stimulus to deal with the chrisscrisis emerged from covid there continues to be debate if that was too much. the most important part of what jay powell had to say was at the end. point number one, federal reserve is responsible for dealing with inflation so while there may have been, you know, some points of too much fiscal stimulus, at this stage, who is in charge of this and jay powell clearly said this rests at the door step of the fed reserve of the cause and there may have been numerous causes. >> senator elizabeth warren and many people on the right are strange bed fellows.

it is happening again here it is not easy for fed chair powell he is already talking about the pain coming. he is already very aware of the pain he is going to cause and if he is already feeling the pain, how do you stay committed to doing what's necessary when you have -- i was references senator warren she wrote the fed seized on aggressive rate hikes. high dose or big dose of the medicine at its dispoal although they are largely ineffective against inflation. you will hear that more and more when congress or certain members of congress will try to ask jay powell to ease up. >> right i think there are three sththins going through his mind one is the one you talked about which is history everyone understands the mistakes of the '70s and fed

chairs don't want to repeat those mistakes the second thing through his mind is a clear sense inflation is a visible tax on low and moderate income people for those in the populous mode, one of the things one has to do is get inflation under control to help the most vulnerable in society. the third thing that helps his resolve is the point he made early on which is there may be pain now, but delaying will only increase the pain. it is true they only have one tool. it may not be fully effective with the supply issues the resolve was there and i think there are three points that would support him as he confronts the critics. there will be some >> roger, can they actually control inflation? there are parts they can are there other parts? what is your thought >> my thought is they can control inflation if they are willing to get demand down to

meet supply. the challenge is that we have constraints supply we may have what one describes as access demand it will take some time i'm not sure they will get to the 2% target in the next year or two and he said it will cause pain history points out that monetary policy, if set at the right level, and as he says, maintained for a long enough period will slow sufficiently to get supply and demand closer to being in balance there will still be shocks, obviously, but history indicates at the end of the day they can, the fed and other central banks, can get the inflation under control. >> roger, it was pointed out that so many things are similar. it was pointed out that they said to arthur burns, these are food and energy. both are one offs.

this is not systemic there was longer in arthur burns thinking that he had done enough only to see it vengeance. what was it about the '70s that made it so sticky back then and do you see things in the current environment that are similar to that that could make it just as sticky or is it not -- we don't have a lot of what went into what happened in the '70s like hyper inflation. we don't have that or do we? >> i think there is good news here that the '70s were different from the current period different in three ways. one is there had been a long period of overshooting and federal reserve that seemed to make excuses of the type you mentioned from chair burns the second thing that i think

was different was there is no anchor people had no -- the fed had no particular target of the target. now we have the 2% goal. i think that has helped. the third thick that was different then as far as i can tell is inflation expectation. right now, fortunately, although we can be complacent as chair powell says, inflation expectation is reasonably anchored there are lessons from the '70s about not letting these things happen again this is not exactly a repeat of the '70s this recession is new and young and has underlining causes and shocks, but the fed is behind the curve versus where they should be. it is nowhere near as drastic as they were in the '70s.

>> i don't know. you would know better than i would, roger just looking at what happened in the growth since the financial crisis we were hit with back-to-back once in a generation, as you call them shock. whatever the reason, we have been growing and we have been loosy-goosy and an c accommodatg all the way since 2008 i don't remember 14 years prior to the '70s where the fed was so easy it is a new normal for what we think of as interest rates now it has been so easy for so long. >> you are right about qe and right about monetary policy that was easy what was interesting during that period that's just ending obviously is we had job growth and we still had inflation that

was somewhat below the fed's 2% target there are technical reasons we don't need to discuss now. you are right about the stimulus it did not have the inflationary impact for a number of reasons now what's changed is some of those good luck and structural changes led to inflation breaking out i think we have to be quite clear that they are -- the fed is somewhat behind the curve by their own admission, but not totally due to the qe. they should have started to tighten earlier. i think they would admit that. i wouldn't, joe, point to 14 years of qa as the primary culprit. they are doing much of that below the 2% target. >> you think fed chair powell thinks the possibility of a soft landing is remote or more remote

at this point? is that what we glean from friday you still think he can do that if he doesn't think he can, why should the rest of us think he can orchestrate a soft landing is that still a possibility? >> one of the things i noticed in the absence of the speech wa that point it was a brief speech. it couldn't cover everything he did not talk about the narrow path to the softer landing and talked about pain. i think softer landing is r rec receding >> roger ferguson, thank you don't make any outgoing calls. we will call you. >> i will be there for you always. >> thank you we're here for you all right. sir, thanks. coming up, new reports about the ad supported tier from netflix and how much it could save you if you are willing to watch a few commercials. later, we talk to dr. scott

gottlieb about the latest on covid boosters and monkeypox and more. you can watch or listen to us live anytime on the cnbc app.

welcome back netflix is reportedly considering pricing the ad supported tier at $7 to $9 a month. half of the current and most

popular plan which costs over $15 a month. that is with no commercials. bloomberg says they are planning to sell ads for the tier and showing ads before and during, but not after. the tier restricts content downloading for offline viewing. that puts it in line with disney plus ad supported tier which is $7.99. >> i don't mind the ads when it says 60 seconds. i can do 60. i don't like 240 can you do 60? you don't like 60? >> i don't like 60 if i wanted commercials, i'll watch cable. >> i hope you watch cable. cable has been greatly exaggerated. stream cutting replaces cord cutting.

i want my cable thing. >> hopefully it's not both no ads after is interesting. they want you to kick to the next episode >> i'm not stupid. exactly. what oh, okay speaking of ads. did you watch "black bird" >> i did >> apple tv plus. >> where he was affected that got me. i can't think about it coming up, more pain for bitcoin hodl ers. and get the best of "squawk box" in our squawk pod. listen anytime it is audio ly tonhis podcast. we'll be right back.

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a news alert, nasa tv said the launch at artemis at 8:33 is unlikely as they troubleshoot problems with the engines and a crack on the inner core stage. they have not said they're scrubbing the launch they have a two-hour window, presumably. >> those don't seem like things to fix in two hours, but what do we know, obviously. the price of bitcoin down 70% from the high in november. let's talk about regulation in the crypto market, and joining us is brian brooks, bitfury ceo.

former acting controller of the currency thanks for joining us this morning. are you a proponent of regulation will eventually be just what we need to remove the uncertainty or just looking -- i saw a piece of gary gensler today, and he's serious. he's serious about a lot of things in terms of the s.e.c. very activist, in i don't know whether the regulation is going to be the panacea for crypto. >> joe, first of all, let's define some terms. regulation does not mean suing people, and the approach s.e.c. has had for the last couple of years has been to not tell anybody what the rules are in advance but to sue people after they've launched a project, started a company, list add token. and then caused people to infer what the rules were later. that's not a good thing, and so at some point congress and the regulators need to get serious about telling people, you know, what is the speed limit on the crypto highway, and what

projects are appropriated good once we set frameworks and rules for those things, you'll see a flourishing. until then, you're going to see a lot of people very nervous about investing in the space. >> does that have anything to do with the chart you're looking at right now or is that just a chart you overlay the nasdaq with. >> i think there are a bunch of things going on right now. this is the problem with technical market analysis. every chart is tea leaves you can read something into it bitcoin and crypto broadly, there are two things going on. we have talked about the idea that bitcoin is an inflation hedge. the more the market expects tough policy from the fed, the people think the fed is going to keep an aggressive posture, and that would tend to harm bitcoin. the other thing going on, you think about what happened a couple of weeks ago when elizabeth warren, bernie sanders and some other prominent democratic senators sent a

letter to my old agency asking them to pull back all of the regulation that i had imposed when i was in office that was an attempt to provide safety and clarity. their view seems to be, no, no, new yo no, let's not let bitcoin near the regulated sphere of the economy, bankers and brokers that suggests this is going to remain a niche asset that will be risky and nonstandard that isn't what markets like if the asset managers are going to touch crypto there has to be a rule set why the senators don't want the activity to be happening within the regulatory perimeter, that's a good question. that tends to be negative for price. >> i'm not convinced that people are using bitcoin yet or even what happened to gold. i thought bitcoin took over for gold for the inflation hedge the fed is talking tough, but congress is still allocating trillions of dollars that we don't have for things. how many new laws have you seen

in the last six months and, brian, if it was really an inflation hedge, 21 million, whatever you want to say about bitcoin. bitcoin should be above 19,000 it's still just a correlated asset with risk assets >> yeah, look, joe, i would take the other side of that, you know, we've talked before about the fact that the all time high of bitcoin happened about four days before the current fed tightening policy took effect. and it's not about what inflation is it's about what the market predicts inflation will be in the future so if you believe the fed is committed to a long-term tightening course, if you think we're going to see 75 basis points rising at the next meeting instead of 50, that kind of thing, that's bad for people who are short-term traders looking to think of this as a hedge. i realize that's complicated for a lot of people to understand, inflation is rampant the expectation for inflation in the future is downward because the fed has finally gotten the message. that's what's hurting bitcoin in the same way stock, it doesn't

matter how well the company did this quarter it matters what your forecast is the next several quarters and that tends to be good or bad for the brice. >> >> bitcoin is the only thing that believes jay powell is going to be successful. >> committed, maybe not successful but committed. >> that's what you attribute it to. >> it's a part of it there's a lot of other things going on here. >> we shouldn't think zero, bill gates, charlie monger, rat poison, raider fool theory, ponzi scheme, it's an established asset class, none of that's going to happen >> we crossed the threshold of the number of holders who make this thing a sustainable activity for sure. but remember, the internet wasn't a flaw or wasn't a fad because of the bubble of 1999 and 2000, and these exact arguments were made about

networks then. no more true today it's an ugly market for every asset class and bitcoin is not the only one. >> brian, thank you. >> what? i thought you were here. you leaving. >> i can't believe it. it went so fast. we didn't even talk stocks. >> you have any tickers you just want to. >> deere, starbucks, broadcom on thursday thank you, steph. we'll talk autbo friday's selloff with wharton professor, jeremy siegel, "squawk box" will be right back.

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good morning, fed chairman j&j po-- jay spoul, hitting levs not seen since the height of the pandemic, we'll break down powell's remarks and find out where markets may be headed. plus, airlines getting ready for the unofficial end of summer travel surge a. a look at what they're doing to make the skies friendlier for travelers. a second hour of "squawk box" begins right now

♪ good morning, and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square i'm joe kernen along with mike santoli. becky and andrew are off today given friday, what do you expect, u.s. equity futures would have been hard to imagine, and probably not a very good thing if we were up 270 points, so we're down 270, looking for a bottom, we'll see whether one was made during the session. you've seen it in the past, though, right, mike, not necessarily, you don't want an immediate snap back. >> you don't want a weak bounce attempt on a monday morning after a friday decline we'll see what the pattern looks like a 10% buffer between where we close friday and the low from june >> i figure we're right around, what, 4,000 now on the s&p. >> that's where we're indicated.

>> we were up about 8 or so, right, from 4,000. >> we were 4,800 at the high >> no, no, in this -- >> right >> in this retracement of the selloff. we got back some >> we got 43 >> 4325. >> so yeah >> you got almost 90% intraday low to high. >> although the nasdaq it doesn't really -- i don't think we need to move new numbers for that let's look at treasuries after friday everything's after friday. by after friday, but before this friday when we get the employment report. 3.1 now on the ten-year oil. that's -- we could spend the entire show talking about forecasts for where that's headed too but most people think that there is a bullish case to be made for crude at these levels and then

crypto, just had a long conversation about bitcoin and the rest of the group, and you can see below 20,000 this morning. let's get to dom chu with a look at this morning's free market movers you know what, i don't want to -- we'll talk at the end maybe, i know you love rory. >> i do. i'm a fan. we'll save it for the end, but i will -- something you and mike just spoke about that kind of struck a tone with me for the morning movers hit, the retracement levels, where we're trading right now. for the nasdaq composite, we're 15% off the lows that we saw over the last couple of months and we're about 25% below the record highs that we saw in the fall that kind of gives you an idea of the context for where we are. the reason i mentioned that is because our first morning movers is pin duo, duo, it's not that it has a huge effect on the markets from a broad perspective. when you look at chinese

internet, this is an online retailer for china some do make up the nasdaq 100 indet index. this might have some influence, pin pinduodo shares are up 9%. they come up with earnings and, with the lock downs, people online shop a lot. that drove earnings beats for pinduoduo, it could have a ripple effect of chinese names part of the nasdaq also watching what's happening with some o. economically sensitive stocks that took a beating on friday's trade. we're talking names like materials companies. mosaic on fertilizers, down 1 to 3% here. norwegian cruise lines, carnival american airlines among the travel names showing weakness on broader economic fears, given the fed's talk about having more

of a slow down economically to tamp inflation, so those names are certainly moving in the premarket trade, and then the ones that really matter for not just the s&p 500 but the nasdaq trade overall, and in certain cases the dow if you want to talk about sentiment impact, it's apple, microsoft, alpha fw - alphabet, amazon and tesla all down about 1 to 1 1/2% tesla down 2 1/2% right now. as we watch the drivers for many of those trades within mega cap technology, communications services and consumer discretionary joe, those are the ones we're keeping a close eye on this morning, given their weight in those indices. >> we had roger finerguson on maybe that explanation some of the cyclicals that you're talking about, dom as far as counter factuals, we

never know if he had looked weak about his resolve for fighting inflation, are you sure that we wouldn't have been down even more i just don't know. if he hadn't been as hawkish, i'm not convinced, i think the market was headed lower no matter what. >> my feeling, given the conversations i've had over the last couple of weeks, the path of least resistance was more to the downside, given the fact that people were not as optimistic that the bounce that we saw really was something that they wanted to buy into. the only reason why is because there is still so much uncertainty on whether or not fed policy will trigger some kind of a slow down. we kind of know it does, but whether or not it's that bigger kind of recessionary threat, that remains to be seen. but a lot of the folks i talked to were just a little bit more nervous about this idea that when the fed kind of moves on this kind of path, you don't know whether or not it's going to just take a couple of weeks, right, for things to resolve

themselves or whether this is a longer term phenomenon, and one of the reasons you're seeing the valuation issues come into play is because people fear about what the profit picture for corporations will look like, given higher interest rates and everything else. jay powell, there wasn't soft landing but there was resolve about getting inflation under control, and joe, i guess a lot of people on main street, wall street, k street believe that inflation is the bigger threat right now. >> right, even in a populist way. i don't know what else needs to be said. scottie scheffler if he had a decent round would have won anyway, but rory hit the putts he needed to hit. >> scottie scheffler had a dream season i think he made the most money of anybody on tour for one single season, but you come out and shoot what you do, plus three, when you have a lead like that remember, the way the fedex cup playoff structure looks like,

you go into the tour championship with a massive handicap lead, given the fact that you were in first place, and the fact that rory overcame the ten deficit. he has three fedexcups, more than tiger >> rory looked like it was going to happen again with the bogey, and the next putt on the next hole, that must have been the one that he just was shaking his head that's what i was shaking my head at. >> i was shaking my head more at the end on 18. when they hit the second shot into the bleachers >> if you're going to miss it. >> all you had to do was lay up and get on in three, and two putt, and you got this thing wrapped up. >> worked out better that way, boom, and he got a great drop, and up and down. >> you could hear the thump, when it hit off the bleachers and i was a little scared. >> all he needed was a 5 almost didn't. from our friend mr. m. almost a playoff so close >> here's what i would say,

sunjae, the middle part of the back nine, he shook a little bit. if he had one or two better holes, he would have been right there. >> a putt that burned the edge thanks,. dom. >> you got it guys. stock futures falling as investors shake off a sharp decline in stocks at the end of last week. the dow, s&p 500 and the nasdaq logging their worst day in two months with us to discuss the markets and more is liz young, head of investment strategy at sofi, good to have you here. >> great to be here. >> interesting how friday itself, pretty linear response from stocks, you know, jay powell spoke during the session. let's remember, they opened quietly and went down from there. on market, it got to that point, just about, yields price over the prior two weeks, the dollar, things like that does that tell you stocks had to catch down to what everybody else had figured out is there something from this point out that says a renewed pressure coming on stocks from

the fed? >> well, i think a couple of things so first of all, traditionally, we look at the bond market as a signal before we look at the stock market as a signal the bond market, usually we believe, knows things first. i think it was right in this sense. what stocks had priced in up until let's call it august 16th was this big possibility for a soft landing i think the belief that we could manufacture one, and then what we had to re-price in was still this 50% possibility for a recession. so we re-rate back down. indiscriminate selling, i think we'll have more today, i don't think that's a huge surprise, given where multiples are. on a forward pe, about 7.3 times, which is right around the ten-year average but with inflation at this level, maybe deserves to be a little lower until we get inflation under control. >> it would seem the stock market, in addition perhaps to pricing in the hopeful idea that there would be something explicit about a fed pivot,

deceleration, whatever the message might have been, the market is also looking at the path of the inflation numbers themselves, right, so you've had, you know, this one month down in cpi, friday morning, you had the core pce, inflation measure that came in below expectations so the market is not just tryinged to we were trading based on what powell said, we were trading on how they might respond in a few months if inflation cooperates that would be the bull case for why the load would hold. >> you want the market to trade on the data rather than on powell's words, and i think that's what he tried to send the message of on friday, look, you're not listening to me, so let me say it again, very clearly, very succinctly, and then let's all watch the data, so if you're a bull in this environment, and i am optimistic that we can still have a rally through the end of the year that doesn't necessarily mean we'll get back up to the highs it doesn't mean we're going to end the year positive, but the

bull case would say as inflation comes down and we get to the second month of a cooling and inflation, and a third month, the market will care more about that than the idea that the fed is going to keep hiking rates. the reality is we have to get to a restrictive policy, and the restrictive means that the fed funds rate is higher than neutral. if we're at neutral right now, we have to keep going. that shouldn't have been a surprise. >> a long period of privilege policy so that was basically the message on friday, and that's what markets react to. liz is sticking around for the hour we'll have more from her throughout the 7:00 a.m. coming up, crude is staying high natural gas continues to tick higher as well we're going to talk about the energy sector after the break. and what's driving the moves before we head to break netflix will be a stock to watch today the streaming company is mulling a 7 and $9 monthly price for soon to debut ad-supported

service. according to a bloomberg report and that compares to $15.49 for the company's stmo popular current ad-free plan "squawk box" will be right back. school is back. and dick's sporting goods has everything you need to gear up so you can show up. the hottest brands. like nike, jordan, the north face, and more. and, with one-hour curbside pickup, it's never been easier to sport your style.

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mid-90s low to mid-90s 93 joining us now is matt smith, head of crude analysis matt, what would surprise you more, 85 or 110? >> both, joe, just because the market is so volatile, but i think 85 seems the low case scenario here. particularly given the backdrop, just what we've seen so far today, and what we saw on friday so even though you have recessionary concerns, you have the super strong dollar making crude more expensive than every other currency apart from the dollar, and then the prospect of an iran deal coming through. on the flip side of that, you have opec plus telling us that they will cut production if there is an iran deal, and at the same time, as well, this is the kicker, joe, is that european natural gas prices are so high.

they have come up a lot today. they are about $75 super strong, that's about $450 equivalent for oil, and so you have strong oil demand that's going to be coming through in the months ahead here, simply because you'll see switching from burning natural gas to burning oil instead. >> so if i understand you correctly, you're saying 85 possible, but you think we're headed higher. >> yeah, and we've just seen that today, where you've seen equity markets coming off with the concerns you have this underlying demand strength coming through. we've got russiawe looming on t, coming in early december there that's going to be a chunk of supply coming off the market, too, so really although we've had all of these demand side concerns and, sure, china is a real concern, their economic data is weak, there's crude specific imports, refineries are running low. here in the u.s., you know,

things have turned around fairly well in terms of the price at the pump all prices have dropped $25, 25% from where we were, $25, and we've got 25% on that national average as well. and so there's less of demand-side concerns, the whole picture for the bull market right now seems to be the supply sideconcerns from various different factions. >> matt, when would you expect, let's go out to 2023, everything we talk about, transitory, not transitory, what's the average price of crude going to be, give me a range for 2023. >> i think we're going to be above $100 a barrel. you know, unless we see really deep recessionary concerns, but the problem relies on the whole kind of supply side of this picture. that is the problem, you know, even in the u.s. here, we're the no seeing particularly strong production growth, even though

we're seeing prices picking around $100. so we're not seeing that strength really coming through in the u.s opec plus is really struggling, and yet we have a backdrop here where we're still emerging from the pandemic, and seeing demand growth if you you believe eia, iea, 2 million barrels a day to my growth this year, and contuing to grow going forward here and so that's -- there's that kind of impetus here to see prices moving higher as those lack of investment in the production side of the picture. >> so matt, when you look at the absolute level of prices, if you expect them to stay high into 2023, what's the point at which they would spike higher and become troublesome in your mind to the rest of the economy, to the global economy. >> absolutely. in dollar terms, because you see the parity with the dollar, that's a concern, because they're paying that much more

for the barrel, six, nine months ago, in the u.s., we probably had a good blueprint of this back in mid june we saw prices getting up to $125 we saw that price at the pump hitting $5 a gallon. that's when we saw demand destruction kind of kicking in and so we've come off 25% because those demand side concerns, i would make the case that that's the kind of level we have to see us get to to see dema kicking in again. >> the supply side looks like what to you at this point? do we have the workers to go full boar in this country? what happens to saudi arabia, what are your prospects for iran, et cetera, opec plus >> sure. yeah, with the supply side just in the u.s. here, joe, yes, there is that worker shortage. there is also shortages for say, steal and sand and people to drive the trucks, all that type of thing, but at the same time, too, you just don't have the

appetite from these publicly traded companies to invest they're looking at shareholder returns instead, and so that's why we're not seeing the growth in the u.s in terms of opec plus, you have saudi arabia and uae, they're the ones that really have the spare capacity but they have really been increasing production over the last year and a half or so so they're kind of buffering up against the top of that level. that's the concern when you have these leading producers in the world that can't increase. and then you have russia, one of the largest oil producers too and we're about to see them hit by a million barrels a day in terms of their production being cut simply because of those sanctions by the end of this year. >> okay. matt, thank you. >> is kepler >> kpler so you just assume everybody's just going to assume, there's no e between the k and p, you don't

care. >> you said it perfectly. >> stick an e in there, why is it kpler, where's the e. what's the point, it's going to cost you the ink. >> it rolls off the tongue, kpler. >> the guy kepler didn't spell it that way. >> this is true, this is true. >> think about it. it's confusing all right. thanks, matt. >> thanks, joe smth >> coming up, with labor day approaching, we'll get an outlook for the airlines and what they're doing to ensure smooth operations and wharton finance professor and stiahiorn je jeremy siegel will talk about market selloff and where this market is headed "squawk box" will be right back. , you can stay on top of the market from wherever you are.

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still to come, dr. scott gottlieb joins us for the latest on covid boosters, monkeypox, and his favorite stocks, no, i'm kidding. plus jeremy siegel is going to join us for the latest on markets this morning futures right now, as you can see, down about 270 points on the dow. stay tuned, you're watching "squawk box," and this is cnbc

stocks going to open lower, liz young of sofi is here spending the hour with us. liz, clearly jay powell friday he wanted to, you know, get that wall of worry that the market is always, you know, got in place a little bit higher. he wanted stock investors to not bet on some kind of dovish

thing. we have seen since the june low a little more risk taking. we saw a revival of some of the meme trade we saw industrials out performing, which was kind of interesting a bit of a cyclical bellwether where does it leave us with regard to risk appetite, individual names that got caught up in the risk rally we got since june. >> it's interesting to look at the market, and even look at the sector story we're trying to figure out where we are in the cycle, mid cycle, late cycle, things like utilities are sending a decidedly late cycle we've got meme stocks back with strength, which frankly doesn't make any sense in a riskoff market you see the big dislocations, that's the kind of stuff that makes me nervous we need more of that flush to come out of really risky names they're not necessarily growth names, so they're not going to be hit hard by comments from powell about restrictive policy. but it doesn't make fundamental sense. it doesn't even really make

technical sense for meme stocks to be up and have an appetite like that. >> you mentioned earlier, maybe a 50% chance of recession in the ballpark it's consensus in that context, you had things like john deere performing well. you've had, i guess, the defense contractors are also helping the industrials, but it's not clear message under the surface, if this is a defensive posture, and they have gotten the message they should hunker down, or, if in fact, the economy is strong enough, to withstand what the fed has to do. >> the industrials complex has been driven by defense contractors and that's typically a more defensive posture by the market when you look at heavy machinery companies, caterpillar, deere, companies that are dependent on materials and dependent on the manufacturing side of the economy. that's what i would want to be watching into fall to see how that activity is going, to see how productivity is, and see

what capacity utilization looks like, if it's affecting those names. now if recession probability and fear goes up, you're likely to see industrials and other cyclicals really get hit so far they've held in there pretty well. the market is not sure that we're headed for something catastrophic. >> and a way that financials have not out performed, it's a mixed message. thank you, you'll be joining us continuing for the hour. let's get to jeremy siegel, professor of finance at the university of pennsylvania's wharton school of business professor siegel, great to have you here you know, is there an older maxim on wall street than don't fight the fed. is it time to fight the fed and what would that mean, even if they're talking touch, they may not have too much more to do. >> i think you hit it there. let's not take chairman powell's words as gospels here's a man who as we know, a year ago, stood at the same

podium and said inflation was not a problem. here's a man who in congressional testimony told us we don't think money matters our studies have shown money doesn't matter, and exploded the money supply at the greatest rate in our history. here's a man a year ago said we're not thinking about thinking about raising interest rates. and most troubling was in response to the last four fomc meetings, in the q&a can period, we're going to reduce the number of job openings, kwyou know, to balance with the demand. what has happened in the last three or four weeks. actually, in the last month, and this is an interesting fact. 90% of the price indices that have been released have been below market expectations.

so he suddenly acts as if things have gotten a lot worse. what is he looking at, did he tell us, what are his guidelines for bringing inflation down. is he looking at sensitive commodity prices is he looking on the ground prices >> right >> i just found it a very unsatisfactory description, almost like, yeah, we messed up. we're way too loose, and now we're going to be mr. tough guy. okay and where is the hard evidence. >> in fairness, jeremy, he has always said that there was a risk that a soft landing was not going to be the outcome. he used the term softish, that was never a promise. they have been acting if they have a sole mandate, they also for months have been saying it would require a few months of persuasive evidence of declining inflation. we haven't had a few months of declining headline or core

inflation, so i guess the point is, maybe all he wanted to do on friday was to make sure the market didn't get out ahead of that in a way that loosened financial conditions enough that their job became more difficult afterward. >> you're absolutely right he never promised and we can debate about whether it's possible or not. he did use a word that's going to be, you know, pain for the consumer for the worker, like now we're really going to raise unemployment never made those terms before. listen, the inflation is eating away at american's savings, at the real wages, and now, you know, because of the mistakes that the fed made in my opinion, bad mistakes, we're not going to cause you more unemployment. you know, yeah, okay, i understand that. on the ground, not the official statistics, on the ground prices

have slowed dramatically, and i would like him to acknowledge that we're looking at some forward-looking indicators, rather than not even specifying which indicators, he's looking at you're right, he wouldn't want to say, we're ready to pivot, and we go to, you know, go to the races again, but mike, you know, i looked at the money supply because that told us how much inflation we're going to get. we have had a decline over the last four months there's only been one or two other occasions in the last 75 years where we have restricted liquidity this greatly there is -- look at the strength of the dow, you know, what we see on the ground on sensitive commodity prices, real estate prices on the ground are not going up again money supply is tight. you know, my feeling is he has 100 basis points to go, and now

he's -- and that they will ease next year, to sort of tell us we're going to have to have more pain to me was a far too negative message, and honestly, his forecasting ability has -- i mean, lost my credibility and i don't know about the street. is he going to make a mistake by tightening too much? now, we did mention monetary policy works with the lag. if he waits for the official statistics to really start coming down to 2%, he will overtighten. and he'll make the same mistake on the downside as he made on being too slow on restricting liquidity in 2021 and early 2022 so i mean, that is basically what my concerns are >> so professor siegel, and you just spoke to what my question was going to be. but let's be more specific if i paraphrase what you said in

the beginning of the segment, the fed is pretty bad at really projecting what it might do and what it might have to do, let's say 12 months out, so we can argue that the statement on friday was overly hawkish for what you might expect to actually come down the pike. if there's a lag in policy, we expect there's a lag in policy of six to 12 months before bake into the real economy. what do you see for the rest of the year as necessary as far as hikes go should there be a pause maybe earlier than the market is expecting to wait for that lag to catch up? >> i think the fed funds, now, certainly it tightened more in 2023 than it did for december of this year. you know, my feeling is we need about 100 basis points more. whether they want to do it 50, 25, 25, and you've got to be looking at the statistics as they're coming in, being very

data dependent i would like to know, okay, tell me the statistics that are coming in. i don't want to look at cpi constructed lag response to housing, which, you know, we know is going to be filtering into this index as i and others have mentioned for the next 12 months that make it look not good we're not down to 2%, let's tighten, tighten, tighten. i'm saying he should give us the criteria of market-based, on the ground prices that would cause him to think that he is near the peak i think the market will tell him. and i don't think it's going to be as high as the market fears it has to be. >> we fight yesterday's battles, don't we so everybody is so aware that we've all become students of the 70s and stop and go, and arthur burns, and that's everybody singing about it that's murphy's law that it won't be that way this time,

and, you know, they were t transitory way too long. they're probably going to err on the other side, now that they have learned their lesson. you'll probably end up being right about that let me ask you one thing, what really happened in the '70s in terms of, i don't know whether it was, you know, the money supply or how we got into that mess obviously that was the middle east and a lot of things happened, but we've certainly earned a period of tightening, given how loose we've been for ten years or 12 years, haven't we and you've pointed that out so many times aboutm 2, why are you more dovish than the rest of the fed right now, with all the warnings you've given us about none supply growth and too much -- too many dollars. >> precisely because m2 has been shut down. that's 1% growth on the year, as i said a four-month decline that is almost unprecedented. we are getting that timing

by the way, what happened in the '70s as opec started raising and the economy was contracting, unfortunately, arthur burns thought he could offset that contraction by pouring more and more money in. by the way, that was more and more money for ten years we're not in that. we had too much money for 18 to 24 months. thank goodness we're not in that problem. we had ten years with a build up of inflationary expectations, far in excess of today the surveys on inpolice station have -- inflation have been coming down university of michigan, breaking points have not been out of control thank goodness, so we are not in that condition. we do not have to tighten the way we did then when we had prolonged money growth, and out of control inflationary expectations. >> you got class today >> no, not yet, i'm emeritus,

joe. emeritus professor >> but it starts today, doesn't it >> no more classes >> does it start today >> yeah, this week it begins. >> probably you got a lot more people coming this year since it's free. no, i'm kidding. >> no, it's not free it's not free. >> i know. oh, i know ever more expensive. >> but it's a good time to raise tuition, i'll tell you that much, considering uncle sam is going to be footing the bill that's all we need is for prices to go up penn is worth it if any place is worth it, it's penn >> well, thank you, thanks for giving us the confidence of sending your daughter to penn. >> you are welcome she loved it i think she misses it maybe a little but the real world, you know, it's awesome but college is the best years of your life, isn't it >> it was for me, and teaching at penn for 45 years has been an absolute pleasure. >> all right thank you, professor we'll see you.

coming up, flying the skies, labor day weekend. a look at how airlines are preparing for the unofficial end of the summer surge, and then dr. scott gottlieb joins us to talk the latest on covid and monkeypox, including the expected approval of an omicron covid booster shot for the fall. it's been too long i miss my vaccines plus, get the best of "squawk box" in our daily podcast, follow "squawk pod" on your daily podcasts, and listen anytime. stay tuned

>> labor day weekend approaching, airlines believe they have the staffing and schedules in place to ensure smooth operations over the long holiday weekend that's expected to be a busy one let's see where phil is. he's not there yet, i don't think. phil lebeau. i know where you're headed phil lebeau joins us with more >> where would i be? >> does it begin with an o, end with a hair? >> oh, is that o'hare? if i was at o'hare, i would be talking with people waiting in line to go through security. i'm not there.

we are not yet at labor day weekend, joe >> it's friday. >> maybe next weekend. it's like a treat. they'll give you something next weekend. let's talk about what we're expecting in terms of this coming labor day weekend, and for the airlines, they're hoping that it will be a smooth one some of this depends on what happens with weather, but in terms of staffing, they have been adding staffing, and they believe that they will avoid some of the cancellation problems that we've seen june was a mess, better in july. and a couple of rough weekends in august, and we've heard about those weekends and raise the ire with the transportation secretary pete buttigieg just last week, he said, look, the performance this summer has been unacceptable, and it has to improve. we've heard this before from him, if you don't improve, we'll make you improve, and yet, we haven't seen them institute any kind of rules or mandates, just simply, you better get things to improve. what you're going to see from the airlines after this weekend, they're going to be cutting

capacity in september. not a surprise leisure capacity falling off in september, and they will ramp up in the holidays at the end of the year this is how much they're going to be cutting capacity in september, compared to august. take a look at the major airline stocks the last three months, they have been a little bit up, a little bit down it's hard really to get much traction with these guys, and the one airline, guys, that is adding capacity, spirit. not slowing down at all. in september it will be adding capacity spirit, as we've talked about, pretty much locked einto a trading range now that they're going through the process of a potential merger with jet blue guys, this weekend, big test for the airlines let's see if they have the staffing, and hopefully the weather cooperates and that way everybody gets where they need to go for the end of summer. >> phil, i'm sure we'll see you then from an airport appreciate it. coming up,r. d scott gottlieb joins us after the br break. "squawk box" will be right back. i'm done. what do you have for me? a new way to transform our agency.

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the fda expected to offer new covid booster shots this week without data from human clinical trials. those trials have not been completed and the agency plans to assess this shots by using data from other sources including research in mice and performance of earlier iterations the former fda commissioner and cnbc contributor also serves on the boards of pfizer and alumina, doctor, this fulfills the promise of the technology to some extent, it's like a

software upgrade and we probably can be fairly confident that it would not be that different in terms of how it works or the side effect profile. is that what is allowing us to do this without additional trials >> yeah, look, i think you're seeing the fda change its orientation towards the approval of these vaccines more towards how they view flu vaccines, that they can make extrapolations from the immunogen data, the ability of the vaccine to generate an antibody response and see what the benefit of the vaccine will be. we don't have just data from the ancestral stream we have tens of millions data from the ancestral vaccine we have data from clinical trials involving the vaccine we've developed against b.1, data from the vaccine developed against delta, generated against

b.117, the original south african strain so there's been multimillion vaccines that have been developed that have been put into clinical development and trials the fda is looking across all that data and seeing consistency in terms of their ability to not just see a safety profile that's consistent across different vaccines but also be able tose a clinical benefit from the antibody response from the vaccine. i think that's informing their ability to move towards this new paradigm that reflects how they treat flu vaccines >> we have a little bit of diversity in the -- in covid and the different variants, but anything on the horizon really troubling to you at this point, doctor >> not right now there's this strain that you're seeing in some european nations that seems to be a hybrid between delta and the original b.1 omicron strain that has some people concerned we're not seeing anything spread with significant velocity, and i

think that's a reflection of the fact that the variants that are emerging -- we'll always see variants emerging-- but i thin none of them have gained a foothold because we have broad and deep immunity in the population most people have seen some variation of the variants that have emerged so there's a lot of community to those. right now the united states is seeing an epidemic of b opinion 5 and b.4 that's declining overall because the west coast, the southwest, florida with all coming down, and the place where is the epidemic is shifting to smaller states like alabama, louisiana, kentucky, west virginia, tennessee, oklahoma, that's where you're seeing the rapid case growth. overall, cases are coming down nationally i still think we're not out of the woods on b.5 and b.4 the tristate region hasn't had much of a b.5 epidemic while cases are coming down, 20% reduction many the last 14 days in new york, new jersey, and connecticut, and a declining

positivity rate as well, we'll probably see a pickup. i think the hope is the new vaccine comes out in time to be a back stop against that i think that is possible if you see an authorization this week and cdc makes a recommendation for that vaccine to be made available, that we can get people vaccinated in the month of september ahead of what could be a b.5 surge in the northeast. >> doctor, as a pfizer board member, are you comfortable at all in addressing the moderna lawsuit against the messenger rna technology that pfizer and biontech employ for their vaccines can you talk about that at all just in generic terms? because i don't understand if they were developed separately, what is moderna's case that you're hearing >> yeah, well, look, on the board of pfizer, there will be a lot of litigation in this phase. anytime you have a new area of technology, and this is not unusual for biotech and

biopharma, you see litigation that eventually gets settled sometimes there are royalties paid to different companies. i don't think pfizer was going to be the company to sue first now that pfizer has been sued, i think you'll see other litigation and companies have been sued already on this. so i think ultimately you're going to see some litigation go forward. it will get start sorted out in the courts one analyst said, you know, ultimately you'll probably see cross royalties paid that will net out to zero and the only people who will end up making money on this are the lawyers. >> has that ever happened before i don't think that's ever happened before where only the lawyers make money that would be a first. one of our problems. how many lawyers in japan, mike? every one for like 8,000 >> i don't have that at my fingertips >> like three lawyers for every person i love lawyers when you need one. [ whistle is it the lipid technology,

doctor, that -- because you can't -- >> yeah, i didn't look specifically at the claims >> you can't say i own message rna. right? >> i don't think it was specifically the lipid i think moderna is being sued related to that, but i haven't looked specifically at their claims but there will be a lot hoff litigation in the space. it will get settled out. ultimately, you know, you're going to see now litigation i think from other companies now that they fired first. >> you know what i mean. to translate messenger rna into an antigen which then causes an immune response, that seems like you'd have to sue god, i think, right? i don't know or darwin. anyway, thank you. depending on who you are thank you, doctor. good to have you on. we'll have you back for monkeypox. liz, thanks for being with us this morning. >> thanks for having me. >> mohamed el-erian will join

us

good morning market turmoil stocks set to continue their slide while the 2-year treasury yield hits it highest level since november 2007. crypto's crush, bitcoin tumbling to lows not seen in more than a month. and beyond stocks and bonds, currencies and commodities, we're watching history in the making at the kennedy space center nasa set to launch the artemis 1 mission on its most powerful rocket yet, but today's big moment could be in jeopardy. the final hour of "squawk box" begins right now >> good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square. becky and andrew are off today

u.s. equity futures have not just gone straight down. we were almost down 300 on the dow and someone bought something, grasping at straws this morning, 250 is not the worst levels of the morning, but it does come on top of a 1,000-point loss we saw on friday treasuries, 3.1% this morning, and crypto has been weak, but, again, crypto looked like we saw on bitcoin below 18,000 through the june lows. we're just under 20,000 right now. so we -- like everything else, it's given back some but not quite half of what was gained in the june to august rally >> in corporate news, honda and lg plan to invest more than $4 billion in a new u.s. plant to make batteries for electric vehicles the companies have yet to finalize a site, but reports say it will likely be in ohio, where honda's main factory is located.

the world's biggest proponent of electric vehicles says the world still needs oil and gas. elon musk said civilization will crumble if oil and gas exploration doesn't continue over the short term. he said a transition to sustainable alternative energy will take decades to complete and is one of the biggest challenges the world has ever faced. musk said he hopes to launch a new location for a new tesla factory later this year. >> let's get to many this morning's biggest movers dominic chu joins thus morning do you have some individual stock names hopefully for us this morning >> i do. a couple of them are very much fundamentally oriented towards earnings season because we are still reporting for key results right now. the first one up is catalent, medical technology, drug d delivery, that sort of thing it comes out with results.

top analysts, shares down 5.5% also earlier in this past hour, we saw a chinese internet name pi pinduoduo come out with earnings that topped analyst expectations as online demand still surged as china locked its country down for covid-related concerns again. that's up about 14% in the premarket trade. baidu, jd.com and netease are amongst the stocks in the nasdaq 100, chinese technology focus, and are outperforming the overall index right now. jd.com and netease down about 1%, baidu up 1%. and the china interpret net is up fractionally right now. watch chinese tech, driven in large part by pinduoduo earnings and check out what's happening, bitcoin prices, we want to show you where the range has been of

late this is the range we've seen so far. on the top end it's been roughly $25,000 for each bitcoin on the low end, joe pointed out, 18,700 or thereabouts is the low we saw over the last couple of months for bitcoin as we trade towards 19,820, which is where we're at right now, a lot of traders watching that key level around 18,700, around there, that's where the lows were, so we'll seep an eye on that for bitcoin. back to you. >> yeah, thanks, dom one-year chart of bitcoin, just noise here in a range near the lows thankyou very much joining us now, mohamed el- el el-erian talk about friday in terms of what jay powell sought to do, what the markets picked up from whooo he was saying, which essentially was we have a mandate, it is inflation, it might cause more economic pain than maybe the markets have

priced in, at least the stock market, so get ready where is the issue in that did he send the correct message? >> so, he finally sent the correct message. he should have done that months ago. he was unambiguous he was clear he stuck to the script and did it in eight minutes. and the market is starting to realize that when your fed chair mentioned inflation 45 times in eight minutes, something is changing that's the good news the less good news is he didn't deal with the policy errors of the last 18 months, so you have jeremy siegle, for example, coming on and saying what does this mean. he should do that at some point. and he hasn't dealt with the fact that they have a monetary framework that's not fit for service. so if he sticks to his script, we should expect more hawkish talk as we go forward, but there are people who doubt that he will so, that's where the ambiguity is and something the market has to navigate through.

>> at some level it was a reiteration of where he and other fed officials have already been for months, right they have said they're not looking for a moment to reverse policy toward easing they have said we still have to have significant tightening moves for the rest of this year. they have said they need multiple months of inflation to come down before they change that story so why do you think this was lacking if he was essentially just in a more vociferous way saying what they've been saying? >> because of what he didn't say. as joe pointed out early, he didn't talk about a softish landing. he didn't do the pivot he did at his press conference when suddenly out of the blue he brings in a neutral, something that is called analytically indefense and inexplicable so the fact that he stuck to the script made him come across as consistently hawkish, something that hasn't happened in the

past >> although he hasn't had any -- the jobs numbers are still good. people are still not convinced we're going to have a recession or that we're in one it hasn't gotten hard yet for him to stick to his guns i thought jeremy siegle is dovish he was saying don't go crazy, jay powell >> yeah. >> be data dependent don't get caught up fighting the battle of the '70s if it's not the battle of the '70s are you more hawkish than jeremy >> what jeremy said or what i heard him say is we already had one second stake, which is a transitory, being very late, et cetera. >> yes >> now we risk a second fed mistake of being reacting -- as you said, battling with the past, not with the future. that's what he said. he wasn't dovish he said on the contrary, we may end up with a too hawkish mistake. >> this is all front and center

now for the markets. >> right >> we'll have our old discussion now about -- >> i want to ask you a question on that. if we were to make the bet today -- >> that's what i was going to ask you, too, because we're right back where we started. >> almost. >> we're a little bit above. >> correct. >> we're down 40 on the s&p this morning, at about 4,000. so we can both take back our bets we can cover we can both cover and say let's just -- neither one of us was right, you won't pay me the tacos, i don't have to take you to a mets game do we do that at 4,000 >> what do you want to do? >> you might want to cover you think we're going to 3,600 >> that's the number you put out there. >> that was the 10% up or 10% down do we go to 3,600 first? >> go lower first or high ep 4,400. >> you were sweating >> i was ready to declare defeat

>> you were. >> yeah. >> now i'm ready to cover. >> are you >> no. do we know everything bad now, mike >> i think there's a case to be made that the markets were already uncomfortable, the market was already pricing in a certain probability that you'd have a rough patch in the economy. you can't say it's all in the market, of course. but i wonder, mohamed, are you suggesting that powell's -- the entirety of his communication has not necessarily been complete, but, you know, if you look at the market-based inflation expectations, they responded right away to what he had to say in other words, why should he care if he hasn't yet given a full, you know, kind of confession about how they missed signals on the way at this point when the market seems to be coming in line to what he's likely to do next? >> first you have to say which market, right? >> yeah. >> the 2-year, the highs of

june, the stocks have not taken out the lows >> sure. >> we all talk about disconnects between bonds and stock, between the fed and the market, between the economy and the markets. all that was a function of communication not being clear. so that's all. >> the second thing he had to face is that financial conditions loosened significantly at a time when he was trying to tighten financial conditions so he had to realign expectations he had no choice now the question is does he follow through >> there's no doubt he felt he had to realize things, but the market as i was saying, they don't strictly follow -- it's not just about the path of the fed raising. it's about how inflation is likely to come through the market is trying to think two steps ahead of what policymakers are right now do you actually think that inflation is on a path that will be more benign or not? >> i think headline inflation will continue to come down

i think core will prove uncomfortably sticky for the fed. i think what the market hasn't quite grasped are three things one, the global economy is slowing at a much faster rate. beyond the u.s., it looks terrible the u.s. is the best among all the other major economies. the first thing is the market understanding the slowing economy. the second issue that i don't think the market has internalized is other central banks will become more hawkish the ecb narrative this weekend was notably hawkish. the third thing the market has yet to recognize is how do you deal in a world of -- we're coming from a world in which everybody was subject to the same common shock. clou v now we're seeing differences and you have to navigate that. i think there's more volatility ahead, but this will be an interesting time for active managers >> i think we should keep the bet on with the parameters, 3,600, because for me -- for

you, if i win, like a 12-pack of taco bell is like $14. and if you win, i'd like to go to a mets game because i like the mets now i'll take you. either way it will be a win-win. >> i have good news for you. i mentioned to people high up at taco bell, at yum, that we have this bet on, right, so they may help me. >> with the $14? >> no. you may get, you know, a chalupa, something more. my worry is the mets season is going to run out what do we do? the jets game? >> i like the jets after yesterday a little too >> no. you didn't see the first quarter. you couldn't possibly like the jets two interceptions. no >> zach's not back yet >> not for six weeks, four to six weeks. you're in trouble. >> all right >> mohamed will stick around let's talk off camera about this the mets season, yeah, we may

not know >> although it's interesting that implicitly means mohamed doesn't think we hit 3,600 before the end of the september. >> that's right. >> and it could go longer for mets this year but he doesn't want to say that >> riding some options >> he'll jinx it. >> we'll talk to you again, mohamed. >> coming up, congressman kevin brady on what wall street needs to know. you know why i want to talk to him? who will pressure jay powell more the progressives who don't want to or the right who thinks we need supply-side solutions, not higher rates i don't know strange bedfellows first, check out this morning's biggest dow movers

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unbeatable internet. made to do anything so you can do anything. welcome back to "squawk box. let's look at the futures. they are indicated to have a followthrough to the downside from friday's losses, though less than 1% on the s&p 500, a little more than 1% on the nasdaq last week the sp&p down 4% with the worst week since mid-june.

the dollar index hitting its highest level since september 2002 this is certainly this in response to jay powell's comments taken as hawkish from friday as well as some difficulties around the rest of the world, dollar/euro below parity once again. gold hitting its lowest level since july 27th. real interest rates are climbing real yields are climbing with these expectations of more hikes. gold miners down more than 1% in response this morning as well, obviously pretty volatile group, down 6% month to the date for them copper miners also down 3% copper had been on a bit of a run, giving some of that back. the etf down just a bit. >> all right the aforementioned chairman, congressman kevin brady is coming up as soon as we get everything squared away audio-wise and looking for opportunities,

names investors might want to buy amid the sell-off. check out the morning's biggest nasdaq losers. reminder, you can get the best of "squawk box" in our daily podcast. follow "squawk pod" on your favorite podcast app what's yours >> spotify >> do they do that

welcome back to "squawk box. you usually see carrythrough after a horrific friday. that's not that awful, down 254. we have a three-day weekend coming up. that may take some of the sting out of what people are thinking. the nasdaq, that had a really tough session on friday. where's that now it bounced 29%, didn't it? >> i don't know if it was as much maybe 20 >> 22? >> i thought it was more >> 19. now, for a look at -- he's ready. for a look at the state of the economy, inflation, and more, congressman kevin brady, ranking member of the ways and means

committee. i wouldn't ask everyone to analyze monetary policy in congress, but i think we should talk, right? >> we probably can, joe. how are you doing? >> i'm doing okay. what did you think of the line that the fed chairman walked on friday the markets were down, but, you know, you can't base everything on what the stock market does. sometimes you need to do things based on other factors >> yeah. i agree. look, this is no time for the fed to go wobbly inflation is big, still. obviously core inflation far above what it needs to be, wholesale prices still near double digits. expectation of inflation still very high. so i don't think a month or so of some deflation or at least declining inflation is enough to change course. people are frightened by the inflation. it's an overhang on the economy. unless you take those concrete actions, i think we are going

to -- if we're not already in recession, we certainly will be. >> i could argue from either the right or the left on why chairman powell should tread lightly. from the right i'd say that people that think we need to cure things on the supply side would say why is raising borrowing costs for companies, why is that the right way to increase economic activity why don't you cut taxes, why don't you get rid of regulations? you've got the putin price hike, as the administration always calls it what are raising interest rates here, in trying to reduce recession here, what has that got to do with tackling higher energy prices being caused by things we have no control over it just seems like an -- then on the left you have people like senator elizabeth warren that talk about, you know, we finally get employment at these great

levels you don't like success you want to raise the unemployment rate? so i could argue it from either side it makes no sense to just keep hiking and hiking and hiking >> you know, i think you've got to break this cycle. it's not easy to do, no doubt. i think the president bungled the recovery i think the fed waited far too long here. but nonetheless, we're where we're at, so you have to take some concrete steps. i would argue obviously on the supply side of this that congress could actually be helping, you know, sort of offset some of the pain from the fed's actions on the supply side of things. as you know, it's going actually the opposite of all that >> right >> in a big way. so, you know, i think congress and the president, rather than just sitting on the sidelines, could be helping i think they're making it worse. >> senator brady, you rightly said it's no time for the fed to go wobbly. that's what should happen. what do you think is going to happen and how do we ensure that the

fed actually maintains its commitment to bringing down inflation? >> you know, i think how they act here in the next month or two is going to be really important. if the market frightens them off, i think that's a problem. i was pleasantly surprised that the chairman is taking i think a stronger approach here because, again, it was delayed to long, we're in this pickle right now so i think it's important for them to sort of fight their way through this here over the next several months let's watch where this data takes us i still think this worker shortage is a major issue. that's why i think we see conflicting jobs numbers versus inflation and the economic growth shrinking, and i think there's still a lot of people eager to hire workers. so i think the fed can continue this role and i think hiring may continue strong just because there is such still a need for

workers up and down the assembly line, delivery, as much asing. it's one of the drivers of inflation i think they have to address. >> you mentioned rightly the labor market joe mentioned the supply side, supply chains are being redesigned, globalization is changing, debt is high what else could be done today to help the fed because the fed can't address all these issues so what should we look for from congress and the administration on the wholeness of other things that we need done? >> yeah. i think three things one, stop beating inflation. i really do think both the student loan forgiveness and this climate bill will either feed inflation or keep it high secondly, you've got to focus on workers. of the $4 trillion that the president has approved over and above the budget, i don't think there's a dime yet to actually reconnect workers to that workforce in any meaningful way. thirdly, in this last climate

bill there's about $350 billion of taxes on made in america manufacturing and small businesses, although that one is set off for a few years. i would go the opposite direction. i would lock in expensing so the businesses can write off all that new equipment and technology they need i would make sure research and development credit is full so, i would make some changes on the tax side that actually help on the supply side of things >> you just described something arthur burns described back when he was trying to blame congress. he said congress has been intent on providing additional services to the electorate. that's probably what we're hearing now. did republicans get snookered on the chips act because they didn't know manchin would flip-flop and bring in another half a trillion or whatever? and then on top of that, student loans, does that pass must we are the courts when it's all said and done. >> or will it be too late to stop it by then? >> yeah, so in reverse order, i

don't think it passes muster i worry the money will be substantially out the door i don't know how any president gets a half a trillion dollars, you know, just by signing his signature on an executive order. that makes no sense at all the heroes act they're using from the 9/11, you know, relief for those who are at war, the national guard, just doesn't seem anywhere close to what we have today secondly, i was disappointed in the chips act. i think unfortunately it did open the door to those tax hikes which i strongly oppose. you know, i also don't believe the chips industry in america, which is the world leader, by the way, in sales, and growing, one of our top exports, i don't think those subsidies were warranted. >> all right we've got to go. your prediction on the house in november and your prediction on the senate in november >> yeah. very confident about the house taking nothing for granted, but the people we've recruited and

the issues this president has brought to america, a very cruel economy, i feel good about that, but we're not taking it for granted. i don't know in the senate, it seems like it will be tight state by state >> congressman brady, thank you. >> thank you, joe. >> good to have you here coming up, nasa looking to launch the artemis 1 mission today on its most powerful rocket yet, but there's an engine issue that has it on hold first, as we head to break, check out the faang stocks thi morning. they had a rough friday. you see meta down 1%, amazon as tfx d phter l. nelianalabet barely.

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welcome back to "squawk box" on cnbc. we're down -- some of the best levels we've seen. 220 on the dow now, nasdaq down 111, s&p not down even over 30, down 28 and change treasuries have been right around 3% in recent sessions, 3.1% or so this morning, 3.09%

on the 10-year mike had been looking at the charts and hopefully they've given you -- have you just been looking at them and that's it, or do you have something to say about what they're telling you >> been looking at them. may draw on them >> all right >> you know, friday, 3.3%, 3.4% drop in the s&p 500. did a couple things. it kind of sliced through a new low for august it was a 20-day low. a lotof folks if you look at the s&p 500 etf right here, used that 20-day low as an idea of maybe that's kind of a get out of the way, maybe more downside here 3,900-ish plus/minus, 3,950, a lot of folks thinking that would be the equivalent of 390 on the etf, is kind of a decent area to look for be about half the rally from june given up. it's also some areas where people think it might actually find its footing we'll see if that is the case. of course we did nothing to essentially break that longer-term downtrend that has

lasted since january, so definitely caught in between those two areas. 2-year note yield is where a lot of the action is didn't do a lot on friday. might be a flight to safety bid on treasuries. you had that big spike back in june, and this here is basically where the stock market bottomed when it started to come back down but it has now reached a new high obviously pricing in more federate hikes than we were before within that two-year window now, we had a defensive turn in the sector leadership. utilities have been very strong. this is a two-year low at utilities versus semiconductors. so that's kind of your growth cyclical risk-seeking-type group. utilities on a two-year basis level, i would point out, semis are just like everything else, kind of up on the lows, giving back about half of it. definitely caught in between and probably have some -- you know, a little more proving to do here if it's going to be a more

sustainable move off that june level. >> mike, do you think that for those individuals, i'm thinking of katie stockton and others that said we're going to have a summer reflex rally that will be resolved possibly to new lows, do you think the strength of the rallies, the strength and duration and the absolute levels it reached surprised some of those people >> there's no doubt. in fact, there was some rare momentum signals that came off of that first higher from june, these breadth readings, so that really does buy a lot of credence for the rally for a lot of people. in fact, you look at some technicians. they say typically that only happens when you've had pretty good outlook over 3, 6, 12 months in advance. there have been times you've gotten those readings and rolled over and had a quasi-retest or gone back down jeff degraaf at renaissance talked about 1962, 1973 and

1974, another scare pretty quickly, didn't get back to the lows but right now there are those who look at those breadth and momentum readings and say, okay, that was real demand you can't just dismiss that. it was somewhat stronger than a typical bear market rally. >> mohamed, trying to figure out actual numbers like 3,600 on the s&p, is there anything in the action that you saw that we watched together as we did rebound from june 16th that makes you change your notion of seeing new lows? you sounded like you didn't want to go 3,600 anymore. it sounded like you think we could go lower but maybe not touch new lows did it convince you more staying power to a better market than you thought before >> what has really impressed me, and i'll be curious what mike thinks, is the strength of all the technicals if you look at what the market has had to deal with, it's had to deal with the fed being hawkish, had to deal with shorts at very high levels being set

against stock. it has had to deal with recession and a strong dollar, and yet it has shown significant resilience and that i think is the technicals so, the question i have for you is do you think these technicals will continue to help us navigate through choppy waters >> you know, i think the technicals, like the breadth readings we saw, they reflected i think just how washed out things got in june i think you have to reserve full judgment on that but maybe one of the reasons for the resilience, front page of the "wall street journal" today, belts against the s&p 500 reach record lows. so, speculators have been positioned for further weakness. you have the futures exposures looking like they're expecting more downside. that in theory creates a little bit of a buffer or at least it says when we were down 24% from a high in mid-june, you had enough of a kind of recession, risk, earnings erosion in the market then to do us okay for

now. again, you can point to 2,000, 2003, 20% rally, still made new lows i don't think it's decided but i also think it's very comfortable that people arequite worried >> what i look at a lot are the flows. the strong variant of the flows is there's a lot of cash on the sideline that can still come in. people were relatively defensively positioned if they get a sense to come in, that's stronger. the weak variant is there's nowhere else to go >> right. >> look at the flows is that going to help us navigate -- >> is there still nowhere else to go, though, with 3.5% in the 2-year treasury? >> that's where the hawkish fed comes in >> yeah. right. >> you pointed out the 2-year is at levels we have not seen in decades. >> yeah. >> will you say, bottom line, that you would pivot -- i love pivot, pivot -- will you pivot

from selling strength yet? >> i would do it on individual stocks >> what else so you're saying -- is that a change for you >> that's been pretty consistent because i believe -- >> you're not any more bullish at all at this point given the strength of that summer rally. >> put it this way -- i am less confident we'll get to 3,600 because i think the technicals are resilient and put up with a lot. >> you're glad i didn't ask for a new porsche, a box of tacos. that's the bet >> not any ta cotacos. taco bell. >> gluten free vegan tacos it's like him winning. i don't even want those. thank you for being here you're leaving parting is such sweet sorrow >> potatoes? >> i try not to eat -- but all -- there's time for

everything, you know what i mean in moderation. that's what i'm saying news just breaking, "artemis," and thank you, "artemis," the launch is set for right about now. it had been scrubbed the un-crewed mission will be the space agency's first step to return humans to the moon after 50 years and we're going to bring in the chief astronomer and director of theplanetarium at the franklin institute. we finally figured out earlier that "artemis" was the twin of "apollo. now we understand that their missions, it all makes sense now. >> very good >> when they said there was a crack somewhere and we're going to look at it for two hours, it sounded to us then like maybe we ought to make this another day is that what happened? >> yeah. there were a couple issues that cropped up in the last hour or two hours or so after everything

had been fueled up as it turns out, two out of those three weren't going to be a problem. there was an intertank faring crack that was a problem a bit of an insulation problem that wasn't going to be a problem. what caught the mission up is they were having difficulties dialing in the chill-down procedure on the liquid hydrogen side for engine number three it's critical all four engines all be at the same stage of prechill by flowing cryogenic liquids through the tubing and the mechanisms of the engine to get them down to the right temperature, and they couldn't get engine number three dialed in they tried all kinds of things to make it work, but they just couldn't get it dialed in. and this is actually the first time on this particular engine they've been able to run that chill-down sequence fully. so here's the first test and this is the reason why they

call this flight test. it's because they need to test everything to make sure it's going to work properly >> any reason to send a manned expedition back to the moon in your view? >> yeah. >> we don't even want to drive our cars anymore we want to man out of everything we can do everything without a manned flight, can't we? or we're going back to that eventually for the moon? >> you know, space exploration has done wonders using remote explorers, robots on planet surface, on the moon and mars in particular we've seen tremendous work done on mars without humans being there. but if you want to send humans to mars at some point in the future, then we need to do some serious in situ training and that will happen on the moon because we can't actually send people out to mars to train them we have to do it someplace that's close it will take a long time to get to mars based on current technologies, so since it's only

a three-day trip out to the moon, it's an easy place for us to do that kind of testing do we have to do that? we don't have to do that we can use robotic methods to do the exploration we want, but there are certain kinds of observations and integration of data that humans do best, and if we can have humans there, that can happen, it's a big risk. yes, that's true but there's also the parent of us that makes us explorers, and we will want to do this, and we will do everything we can to mitigate the risks so that humans can make that big trip. >> are there advantages to having a stopping point on the moon versus the international space station? we do a lot of experiments in zero gravity, and i figure that's one of the big advantages to the space -- would we like an interim stop on something on the moon where we could send people and they'd come home, we send other people is that in the cards

>> that's the way we're going to use the systems is we'll build up our capability on the moon and then not only use it as a testing place but it can be a way station along the way to get everything pulled together for that longer trip out to mars and since, you know, the moon is 240,000 miles average further away from earth, that gives us a little bit of jump, and it takes us further away from the earth gravitational pull that's an advantage also because that means we can devote more to payload and less to fuel when we're trying to get away from the earth's gravitational field. of course if you're going out to mars, you want to take as much material as you can to assure a successful mission >> what's left on the moon for us to discover just in terms of the universe anything left? >> we don't have the definitive answer as to the moon's origin, but we know there's an intimate

connection between the moon's origin and what we can say was a close encounter of the fourth kind back a while ago between the earth and the moon so, there's something going on there. but we also have to think about how to use the moon in terms of what resources it has that it can contribute to our further exploration of the solar system. so the plan is let's visit some of those carbohydratesers in the south -- in the shaded south pole portion of the moon where we might be able to find ices that can provide the constituents we need for fuel, for water, for oxygen. that way we don't have to cory those materials to the moon and we can use those materials to build up whatever we need to head out to mars >> derrick, can you ask you a philosophical question for the current state of thinking on this because we have a little time. so, i've always thought that e equals mc squared means we can't go faster than speed of light as you go to infinite mass. the differences of the universe

are so vast even though there may be how many civilizations out there, billions, you think can we get there can they get here? can you get around that obstacle to traveling fast thaern speed of light can you go into a worm hole and come out somewhere else in a space/time continuum are ufos real? what do you think? >> who put you up to that question >> i've been thinking about it my whole life. >> these are really good questions, and they do need to be considered because, look, the physics we have to abide by, the laws of physics we have to abide by, every other civilization in the universe has to abide by those laws too so, just as it is for us, that we can't travel faster than the speed of light, neither can they that also means that for all of us in the universe that have the capability of space travel, any trip across a galaxy, across the universe from galaxy to galaxy is going to take a very, very,

very long time, like hundreds, thousands of years to make that happen, even if we can get close to the speed of light, it's still going to take a long time. this does not necessarily mean that all of the civilizations in the universe live in ice lags. it just means that the to chances that we're actually going to meet each other are far lower than you might want that chance to be but that doesn't mean we can't figure out a way to communicate even though there's a huge time lag or for us to recognize the existence of other civilizations. do we know of other civilizations in the universe at this time? no, we do not. we are it. but probability, if you work the numbers, probability says it's likely that there is another civilization out there somewhere simply because of the sheer numbers of stars and planets existing in every galaxymu multiplied by a trillion >> i don't know if aliens have

come here. people say you're stupid i think there are millions of other civilizations. i don't know how we get to each other. >> just not here yet they're just not here yet. >> i want to go out there and come back. of course i won't know anyone. everybody will be dead >> that's also true. >> at my age all right. >> maybe that's a good thing >> thanks. no one put me up to that i've been thinking about this for a long time. thanks for the great answer. >> not going to talk about it. thanks >> i have another one for you. hopefully you're back. coming up, much more on this morning's market story futures off the lows of the session. first, as we head to break, check out this morning's biggest premarket winners and losers

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welcome back to "squawk box. join the most powerful investment event of the year at alpha returns in person on september 28th among the amazing sessions, i'll be sitting down with legendary investor who has anybody who's been talking about the fed for years and years with -- i guess you would call it a bit of a warning about things i can't wait to get his update

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welcome back to "squawk box. futures right now down 239 points on the dow. you can see the nasdaq down 120. s&p 500 down 32. joining us now kristen bitterly, head of north america investments at city global wealth. kristen, i guess the bright side is, you have a little less wealth for your clients to worry about today than you did on friday at the beginning, right does that take a little bit of the pressure off of you -- >> no, it just adds to the pressure honestly in terms of expectations and what to do from here but i think what's interesting about the price action that we saw on friday and the price action that we see continuing into today is really this balance between what we saw over the summer months and what people thought the fed should do, what we want the fed to do, versus what the fed is telling us they are going to do. and so having that message from

chair powell, very short, very definitive, e lliminated any ambiguity. whether or not you agree with their path from here i think that was a little bit of a shock to the markets the fact that not only are they don't to continue on this hawkish path, but the fact that he admitted that the fed understands its policies will greatly slow the economy and that households will experience some pain. >> kristen, you, i think, are in the camp that you weren't fooled by that summer rally in terms of a new bull do you think it's a rallying within a bear market. >> we thought it was a bear market rally you look at what really was driving that rally there were a couple different things the first was a lot of short covering and when you look, there was the concept of did we actually -- >> kristen, we -- i'm sorry. i've been told we got to go immediately. we got some issues

thank you. "squawk on the street" is going to begin straight ahead. thank you, kristen, we'll have you back so you get unlimited data for just $30/mo, taxes and fees included. plus we have a new plan with 5g ultra wideband. switch today at visible dot com.

it's 9:00 on the east coast and you're watching cnbc yes, i am joe kernen and initially -- actually, to those people that are really mad at me about kristen bitterly, i think we're going to be able to go to her for a variety of reasons suffice it to say right now, "squawk on the street" will be wi y