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 with you shortly

in the meantime, let's look at u.s. equity futures at this hour and we're continuing to add to some of friday's losses. down another 251 points now on the dow if you're just joining us the nasdaq -- if you're just joining us, you're not happy with us, you should have been watching "squawk box." we're down 125 points down the nasdaq down 35 or so on the s&p and the drop, obviously, today comes after the dow posted its worst day since may dropping 1,000 points or 3% all the major averages were down more than 4% for the week -- for the week throwing a big wrench into the notion that we made the new lows treasury yields this morning are at 3.08 and don chu joins us now to talk about whatever you want to talk about. let's talk about jay powell and

the prospects for what we're going to look at this week which is a big week becauseof the jobs report on friday. >> this notion that the market has reacted on the equity side of things to what was happening overall with the economy and with the comments from fed chair jay powell during the jackson hole symposium the equity futures are continuing their slide as you did note here, this is "squawk box" going into "squawk on the street. we're just about 9:02 eastern time in new york city. it's jobs week in america like joe points out on wednesday, we will get our first look at the retooled adp private payrolls report. that report has been paused for two months while the company changes the methodology by which it calculates those numbers. and on thursday, we're going to get the jobless claims on friday, of course, the

all-important nonfarm payrolls, the government august employment report it's a light week for earnings on the microeconomic front the company specific side of things you have best buy, hp inc. and enterprise reporting tomorrow. campbell's soup reports on thursday as well joe, if you look at the overall picture for some of the catalysts, everybody has to point right now to the jobs report is that going to give them even more fuel to raise by 75 basis points, three quarters of a percent, or is it going to show us easing where they can say, maybe it's time we can take the foot off the gas a little bit and see how the economy plays out, joe. >> crazier than usual in trying to figure out what we're supposed to hope for supposed to hope for, you know, more people not getting jobs. >> is it bad news, good news, are we back in that regime all over again >> basically but it's frustrating and i blame -- i don't know who i blame for putting us in

this -- i think policymakers for putting us in a position where the fed has to induce a recession to -- and you really can't say, well, the average person is going to be hurt because the average person is already being hurt by the populous take is that inflation is really bad for a lot of people so the fed almost has to do this you got your choice as an average person, a business slowdown and possibly losing your job, or not being able to afford both gasoline and groceries. >> it's one of those big issues that's happening right now isn't just for those people main street americans who are just dealing with the inflationary side of things it's small business owners, right, joe, because you have the scenario where they're dealing with cost pressures as well. they're dealing with all of these other issues in the economy and at the same time because rents keep going higher, they're dealing with rent issues as well right now. so all of a sudden it doesn't just become about whether or not the slowdown is going to happen,

but how pervasive it becomes, how big of a deal it is, joe >> thanks, dom jim cramer joins us on the phone. if there had been a more dovish speech from jay powell, do you think that would have cured what ails the markets i'm not sure i don't know what the counterfactual is. >> i'm calling it the open mouth committee, not the -- and the reason i'm calling it the open mouth committee is because i really believe in a lot of ways what jay powell did was give us a 25 basis point without doing anything, 25 basis point increase because he scared the markets so badly. he accomplished a lot more than just saying that he's cautious and worried. he gave us a -- and i thought it was very, very significant no one expected it 25 basis points. 50 next time and then we'll

wait it was very powerful very negative. >> very negative so many things to consider we had gerjeremy siegel said th stayed too long with the transitory and staying easy too long now they're going to mess up by staying tight too long -- >> in any way, hindsight is 20/20. who knew if you're in china lawn, do you think people are saying, you know, what, maybe we're getting this covid situation wrong, we got a 2,000-person conference coming up. maybe it's going to be a superspreader event. covid fooled everyone. covid changed everything so jay powell is trying to do -- trying to figure out where the people went. maybe you have to take wages so it stabilizes and goes down a little and then you're okay and you have to keep rates high. the two-year says they're going to keep rates high i think the guy did what he had

to do. it was a volker moment for him and i think there are a lot of people who are grateful that he got tough. the two-year is very grateful. the people who are buying th two-year are telling you, he's taking it to -- i was thrilled that he was tough and just hindsight, why didn't he do this and that those people should stop talking. that's like saying, why didn't -- someone challenging rory, why didn't somebody do that that's over. i care about the future, not the past >> and you think he talked -- you think he's going to follow through and you think that's a right move >> yes i want this thing to be over we got to get wages to peak. we got to find people. we got to find the people. we still have supply problems everywhere but i want -- >> okay. >> i wanted a tough fed, i got a tough fed. >> i'm told we're going to take a quick break and we'll be back th mwiore "squawk on the

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♪ good morning and welcome to "squawk on the street. we're currently having some technical difficulties down at the new york stock exchange which is why you're seeing what you're seeing right now. we want to bring you up to speed on what's happening with the markets because we're extending the friday sell-off right now. futures indicate the dow lower by 212 points. the s&p 500 by 28. we got our senior markets commentator mike santoli joining us now what the interesting part about this is, is this idea that we're

seeing a follow through on the sell-off, but not a panicky follow through that must give some traders a little bit of comfort here. >> probably so it's often said that you don't necessarily want to see some kind of a weak bounce that gets knocked down so, yeah, some follow through on the downside did see some work over the weekend that when you've had a decline on a friday, you have a weak monday and then some recovery later in the ensuing days this all makes some kind of sense. and, of course, dealing with the leftover uncertainty of exactly what we should expect in terms of monetary policy ten-year is well above 3% now. those have been levels that have given equities a little bit of trouble on the way up here so i do think there's plenty of absorb although, once again, an aggressive oversold reading we

got on friday because of that pretty one-directional move lower and people talking about the fact that there are a lot of these systemic strategies that really did kind of shoot stocks higher when we made the highs above 4300 and have become sellers. we'll see if a buffer comes in there. >> it's interesting you bring that up, mike. i was watching "squawk box" with you and joe for the last few hours here and one of the things i noticed was that the implied open for the dow was down between 200 and 300 points pretty much all three hours of that programming it doesn't feel like there's a -- more of an exacerbation at least in the premarket right now. and i guess maybe that's something that we can flesh out a little bit more in the next couple of hours. but what you're seeing right now is the price action on friday. let's now bring in -- because we have on the phone right now, of course, jim cramer and david faber, two familiar voices and faces on this particular hour of

programming. jim and dave, welcome. we got you on the phone and maybe we just heard from jim speaking with joe. david, i wonder if we can get your thoughts now on exactly what's happening overall with -- in your mind the markets and the acceleration of that -- the downside that we saw on friday and the follow-through that we're seeing a little bit more this morning as well. >> sure. i thought you were going to ask about my thoughts on the technical issues that are having jim and i being on our cell phones sitting near to each other. i wish you could see this. it's a good shot as you know, typically, on your show, i question jim on -- we do have it. see, i told you guys we could get it thank you. >> i can see you >> i haven't aged at all >> jim is sitting next to me this is a great way to broadcast. i think everybody should do this i don't know about you this is the future of

broadcasting. >> it's different than the pandemic for a little bit. >> yes, it is. yes, it is and we got carl in a car he's on his way for you. as for the market which is opening less than 17 minutes from now, listen, jim, you were talking earlier with joe, this is one of the slowest liquidity weeks of the year. you're not going to see a lot. you can't read too much into it, some people would argue, even simply the lack of conviction because there's so few people who are coming in and working well coming in doesn't matter anymore. but engaging in market activity. >> i agree with david, i find myself thinking we're doing some buys for the investing club because i think there's an air pocket where no one really has anything other to say than let's just sell. it's one of these moments where you can really question whether it's just going to continue to go down based on the same thing. there's nothing new.

so, guys, i'm kind of sanguine that we put the fed behind us if we're going to be down another% and percent and a half >> jim, in your mind, though, is this a scenario -- the question i got multiple times over this weekend from a lot of folks who are savvy on the markets and pretty well versed in what's happening with, you know, economic cycles and market cycles, was do you think we retest the lows again? and to be fair, we're not that far off them the composite index for the nasdaq is up 15% from what we saw over the last couple of months is this a scenario where it's justified for us to go back and touch the lows again. >> i think for a lot of stocks it is. we did a lot of work on what happens when you have a meme explosion. there have been six meme moments which are -- and you get a 12% decline from the height of the fraud. we still have more work to do

when it comes to that. but i also feel there are stocks that just represent great value that have come down so much that to me i don't know why they should go down why lower we were talking about -- i would say it's nasdaq stocks that frankly i've been waiting for them to come down for some time and here they are. >> you've been talking about some of the names, some of the names that you've been talking about, snowflake actually went up of a much stronger quarter. when you're talking about some of the memes, what do you mean some of thechinese names that have benefitted from the new audit requirements there's snowflake. we can do this look, we can actually doa show on our cell phone. it's incredible. >> it's a great show yeah, i -- i think snowflake had

a great quarter. that model works we're examining that model we have a show tonight, maybe we do it outside. we were going to talk about snowflake business model and how effective it is, david >> we also had an interesting show planned today talking about remote work from our interview on friday with chairman gensler of the ffc we all would have benefitted from staying home and working at home in our studios. >> this is a trial run, right, david? we're trying to figure out -- >> jamie dimon wants -- this is a workday. monday is a workday. >> at many shops, but, of course, companies are trying to rally their employees, potentially, consider revisiting the office in a more regular basis after labor day. we're still working on -- as we should tell the viewers on the technical issues that have prevented us from being able to do the show from here, appreciate your willingness to step in and help us out as we

get ready for an opening bell. jim, you mentioned some of those beaten down names. is there anything in particular that comes to the front now? >> marvele had a decent quarter. the company couldn't get all the parts. i'm looking at stocks like that and i want to buy them i want to buy them. >> all right okay so what we have right now, again, is a scenario for the markets right now where the dow is lower by 218 points as you can see, we have some technical difficulties, but we are working through them you'll be able to see jim and david every once in awhile me here. the audio is still on cell phones we're going to work to resolve that we'll be back after this 're mcial break we12inutes away from the opening bell right now

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all right, welcome back to "squawk on the street. you're seeing a market that looks to be accelerating some of the losses that we saw back on friday remember the dow, the s&p 500, and nasdaq were all down markedly about 4% or so for the week let's bring in mike santoli to breakthrough a little bit more of this market action. one of the things that was interesting that jim and david brought up was this idea that, you know, there are still potential catalysts out there and one of those reasons that we are seeing a little bit of the movement that we're seeing right now is because of the -- at least the perception of the mega cap technology trade one of the interesting points of discussion that has been brought up over the last maybe several weeks at this point, mike, is this notion that over the last 12 or 13 years in an ultra low interest rate environment, many times in downturns, people have turned toward stocks like apple and microsoft and other folks out there and other stocks out there, if you look at those names, they're not acting like the safe havens they once were is that rising-rate environment

the real difference right now in your mike? . >> yeah, and it causes valuations in general to be questioned and compressed across the market and if you looked at the cohort of stocks where you had still the greatest most aggressive valuation premiums, they mostly were in the very largest. if -- i think if you take out amazon and tesla which together are something like 5% of the s&p 500 market cap but have a whole lot less than 5% of the earnings, you know, the market would look that much less expensive. and you took out microsoft and nvidia or something and you kept doing that, all of a sudden you get down to this sort of median level evaluation of the s&p which is extreme to the upside the market got washed out, oversold, s&p hits 15 times forward earnings, everyone was too negative, people priced in

stag-flation, those two things both, you know, have most of their swing in the largest stocks in terms of the amplitude of the moves you have some rationalization on that if there's a thought that the fed has implicitly along with the uncertainty about the economy capped valuations at 18, i think there's a legitimate question as do we hit a floor above the june lows. did we see that the june lows did find real, genuine buying interest and therefore we don't have to go down there. that's what i think we're testing as we come to the end of august and, by the way, just a few days ago, people thought there was going to be a lot of mechanical reallocation flow out of equities and into bonds because equities had outperformed so much in august that's no longer true after friday maybe that's a slight glimmer of a silver lining going into month end in a couple days.

>> the valuation story is part of it, right the fundamentals there, you could argue some would argue, mike, are intact right now given what's been a negative here. it's something we'll keep a close eye on we're just about six minutes away from the opening bell, mike, stick around with us we've got the dow down by 211 points chcak t see" tenil difficulties, we're resolving them right now we'll see you after this commercial break municipal bonds don't usually get the media coverage the stock market does.

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welcome back to "squawk on the street." we're two minutes away from the opening bell the dow is down by roughly 220 points here. let's send it over to jim cramer and david faber who are down at the new york stock exchange. we're experiencing some technical difficulties but are working hard to resolve them i see that both of you gentlemen there right now without cell phones that's a good sign, guys. >> we're making some progress here the crew is doing what it needs to do to deal with what's a pretty significant problem this morning in our inability to get anything out of the new york stock exchange. >> the ten-year which didn't have much movement on friday, now we're seeing the prices drop

and yields go up but nowhere near where the two-year is. so i think, once, people are going to say inversion, recession. recession is on everybody's mind what is powell looking for is he looking for wages to peak? is that what he wants. everything else is kind of going his way. there's a note this morning about toll brothers, the radical number of cancellations. we know there's much in the economy, the glut in retail. what does powell want to see is it a peak in wages, david >> jim, maybe so all we know from the speech on friday and interestingly, of course, we were hear during this speech and lost the market reaction somewhat muted for the first hour or so after the speech. >> and people -- >> higher for longer, that's all we know. >> higher for longer means he kind of just -- he moved the market drastically he did it. and that and alone does matter it was a very forceful -- he

used the word. historically, it's been more theoretical. he used it to say, listen, we're not done until the fat lady sings. that's not his m.o., new m.o. from fed chief powell. >> there you have it opening bell at the new york stock exchange being monday morning for us. and we open good one for you at home as you take a look at the real-time exchange we are going to have a lot more red on that board. of course, following on that significant downdraft we saw on the market following those powell comments at jackson hole on friday -- >> friday, and -- >> hold on non-profit providing health care for those in need over at the nasdaq the tennis channel, got the start of the u.s. open, we had serena williams with us on friday. >> of course here's something i want to get into i want to explain to people on that friday, this has to do with the lack of liquidity. you would think everyone who had

to sell would have sold with the dow down 1,000 and the averages down 3%. who are the people selling today? did they, like, not get the friday memo? >> i don't know about the cannonball's current schedule. but there are plenty of investors out there who did not believe the significant rally we had off the june lows who are of the belief that higher rates and a higher terminal rate than some were anticipating for longer was going to be where we're headed and that we are going to see significant softness in corporate earnings in the coming quarter as a result. various things that we're seeing that camp remains. there were asset managers know with high cash positions when they can have them, hedge funds being a perfect example of that, that were not moved by that rally. as painful -- >> how often are those people -- have they been right

that's the problem i mean, i look at the opportunity. if you've been selling when the market had a big -- remember, there's a four-week rally of some consequence if you sold into that you're saying, yes, i think the market could hold those lows. let me go in and buy something i'm going to use one that -- we're not buying -- meta meta, which is mark zuckerberg, was down two and three quarters when i got up this morning and i looked and said, okay, did anyone -- were there really people who didn't get to sell it down big on friday those people are coming in to selling today. i'm going to buy their meta. i'm going to buy their meta because they don't know anything all they knew it was down on friday there was no news, meta. and i find that stock with all the cash that it has and no longer highly valued intriguing. and de-risked. if you remember, mark zuckerberg said, this is the worst to come.

i did not buy anything for the trust because i was miffed that he said that as it goes lower, then maybe you can say, you know what this is the worst. after being down horribly on friday, people come to work and say, wow, you know what, it's still not down enough. i'm going to keep selling. that's stupid. >> it's near its 52-week low let's just call it sort of on the lows but i've heard you say that a few times along the way, jim, that you thought it was an opportunity to buy meta. >> okay. mark took that away when he -- on that conference call i thought definitely showed concern that things are getting worse. i now think that that has been a spur to action for his team. i think that tiktok is going to have a run for its money with reels. i think it's possible that instagram is stabilizing

i'm not buying yet because i'm very negative. but i'm getting there. i'm getting there. that thing goes to 150, david, i think you're going to see a stock that is down more than 50% with a great cash position with a ceo that is basically still working and businesses that are not falling off a cliff. remember what you remember, there's going to be a slowing before earnings -- >> that's the belief for those who are not positive on this market and has been for quite some time. >> let's take dow chemicals -- >> the current multiply is not even justified. >> dow chemical, the stock was downgraded to a sell it was at 71 now it's at 52 it eeyields 5.2 does that person have special insight? sell it at 52 and get back to 48 what's the point of that it's got great cash flow why do i want to sell that in

order to buy it back where where am i buying that back? you decide i don't want to own something that yields more than 5 with great cash flow run well, i like that kind of high-yielding company. >> right >> that's interesting to me. >> yeah. >> don't look so puzzled. >> i'm still trying to adjust to our new reality of one camera and just the two of us, carl, on his way to new jersey. it's been a crazy morning. >> yeah. >> we forge ahead. in fact, so does the market. looking at a lot more green right now on my screen than what we began with. meta has turned positive >> that's because of me. >> amazon -- >> i think these are the ones we're buying i can't reveal which one we're buying for the travel trust. people who take part of the club would feel aggrieved i think that's right but, david, my inclination is to buy, not sell. i simply do not believe that when you come in after a very

big sell-off on friday, that you should say, you know what -- there's no new news. >> speaking of news, we're not going to take a break. we're -- no way. >> if this news -- >> we lost the first 25 minutes of our show. >> i'm not talking about elon musk. >> i am. >> come on >> why >> because there are many stocks -- >> but tesla has a market value of $900 billion or 889 -- >> are we going to talk to his -- >> yes at an energy conference in norway, elon musk talked about the fact that we will need to use more oil and gas and perhaps additional gas exploration is warranted. went onto talk about things about that transition to sustainable forms of energy, he's making sure that the grid they are powered from is also renewable. >> that's always been an issue for him and he believes there's no work being done on the grid

to improve it. now, california 2035, that could put a lot of pressure on pg and e. >> there's not going to be a -- i.c.e. cars stolold in the stats of 2035. it is a question as whether the grid is going to be able to handle that and whether you're going to be able to power them through largely if not solely rene renewable sources of energy because you defeat so a certain extent -- >> incredible -- let's combine friday with what's happening in the economy. still one more factory was announced, this time in ohio, to make batteries and people were cheering david, we do not have enough people to staff that factory i think we have to stop kidding ourselves. the one thing that powell cannot create is people the elon musk seems to be able

to create people >> that was funny. >> we don't have enough -- keep opening these battery factors where are we getting these people that's part of jay powell's problem. the government printed so much money. a lot of people complain about jay powell do they not realize that congress printed money endlessly and that was not jay powell's business. >> right you were talking about the stimulus -- >> now it's done at least he's trying to get things coordinated. >> you've been a powell supporter -- >> are we on tv? >> we are on television, we are broadcasting. >> i feel like we're in our basement -- >> yeah. it's true. >> anyway, there's a lot of nice people here. all i'm saying is that i question the idea, david, i question the idea that powell can really do anything other than throw people out of work and the next big data point will be employment. and he needs to throw people out of work. he needs to see wages not go up. even if wages didn't go up --

>> that was a positive that continues to be a positive. now we're done we don't want wages to go up anymore? >> no. friday he laid it out. he obviously doesn't care about -- he does not care about commodity inflation. he won that battle >> right. >> he won that battle awhile ago. but he doesn't think peak inflation is upon us because wages are still going up and that's where -- he cares about my people tell me, my people, they tell me wages and rents he doesn't like rents going up and wages going up what do you got there? >> nothing these are some of the elements that we were planning on doing for our show today that got a bit short -- >> i want to go to the sec. >> shares of alibaba and a number of other large chinese companies that are listed here as well are benefitting from the news that we discussed with chairman gensler on friday when he actually broke it with us

which which is the agreement being reached for auditors in hong kong -- >> a lot of trading desks have reacted by suggesting to clinics, get long. this was what we were most worried about. it's been hammered out what did we get in return. honest, securities >> there's over 200 companies that will not have to if this actually works by the way, they'll know a lot more soon because the inspectors are inspected to go by mid-september to see if this is actually going to be followed through on and they get the access that they want. jim, there's 200 companies that have market values between a trillion and $2 trillion that may not have to delist. >> did you notice that the commissioner dodged my analysis of amtd global, magic empire global this is a stock ipoed last

friday and it went to 187. up 6,000% just a few days later -- >> gensler never wants to talk about individual securities. >> how about jz? >> the one thing we did talk to gensler on friday that got a lot of play over the weekend was the last question about the fact that the sec is largely working remotely. >> we have tape on that? >> i do. i asked chairman gensler whether we were going to continue to see him in front of his fireplace and why they continue to work the way it did or when their plans were to get back to work i have that. take a listen. >> i think it's remarkable how well society at large, but let me do a shout-out to the sec staff, 4500 people have been

able to be effective oversight of the markets in these times. we're largely remote when i came on board in april of last year, we were still actually mandatory remote. we worked with our bargaining unit with the union representatives. we moved to voluntary remote that's where we are. >> a number of people who reacted to that, the idea that they're not coming to the office, but broadly speaking, jim, i know -- i know had a bunch of people over to the house, we were talking, people still want to talk a great deal about back to work and about this new world that we are in that we've talked about a great deal, but that may be one if not perhaps one of the most significant outcomes of the pandemic the fact that we will never work in the same way that we did and that the question remains how many people will come back and how often will they and to your

point, at what point are the employers who want to get people back in the office on some regular basis going to have more leverage in which they can do that by saying, if you don't come back, you lose your job. >> i'm going to go a step further. i heard many people -- i was with a lot of people, too many people, i got to start relaxing these weekends too many people said he's got to get into the office. it's not right that the chief should go in because maybe he would be better, again, some of those -- some of the bogus cryptos. maybe he would be more focused -- >> that's another larger issue when the chief doesn't want to go to the office -- this is not about the sec. i'm saying when the ceo or senior executives don't want to be in the office, then, obviously, it's very difficult to have an in-office culture. >> i'm not picking on him. the vast majority of people i was with this weekend said let's get on with our lives. let's go to work

let's find out who is good let's make some decisions about who to train and who not let's let some people go who are not contributing we don't know who they are and what they're doing. >> no, and obviously -- >> look, i think chairman gensler is doing a great job but it's time. china does not have vaccines not time >> jim, it's time, but, again, a lot of companies are anticipating trying to bring their employees back 2 1/2 years now after the pandemic began for at least a couple of days a week but it depends on the company, what we call technology companies. certainly those who are focused on software who have their workforces comprised largely software engineers, they're not coming back. and a lot of those other companies take their lead from some of the bigger companies you've seen the pushback at apple. it's fascinating. >> it's funny because it's not being done on zoom anymore, it's being done on teams. david, here, if you go to coinbase, new on coinbase, i

have one of those from goldberg's seller network, star gate finance, star gate i think was in the running then. things are being added david, this is not right and i directly ask -- do we have chairman gensler on how he says we should get lawyers if we do this stuff >> you're very focused on this. >> i know. >> they're also -- playing the music. they're playing the music and you need to stop talking. >> the chairman has to topstop a creation of money. >> we're going to have more on "squawk on the street. i think carl quintanilla may join us next. >> this is a waste of my time. >> no, it's not. i love to do a show. i live for doing the show. >> you can do your show later. >> all right

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welcome back to "squawk on the street" from the new york stock exchange i'm david faber along with jim cramer and our third come patri had to get in a car and go to new jersey in order to deal with our huge technical issues that we're still grappling with carl, that was a pretty quick trip well done. >> i was listening to you talk about return to work and it's funny to be racing to get back into headquarters where it's actually fairly busy things are going to start to fill in the middle part of the week, starting in mid-september,

at least for those at cnbc live tv, david, that's why we're in this business, for days like this. >> yeah. you just forge ahead and thanks to dom, joe, mike santoli, everybody else filling in along the way. as for the broader market which was our focussantoli and everyoe filling in along the way the broader market, the focus this morning, coming in, given the significant downdraft in the market, we're down in the s&p and the nasdaq a bit better, meta back to negative. but you know, it is adjusting and moderation, plenty of green. >> there it goes again, the oil stocks exxon. >> not a great market. >> what about the financials we haven't had an opportunity -- >> i mean obviously a lot of you invested in the two-year, if you're a bank and suddenly, you are paid a quarter a percent and i get to invest in the two-year, the banks should be liquefied but the tough talk, by jay

powell made you feel like wait a second, the bad loans are going to spike and people care more about bad loans, as we know from the action in a firm and upstart, they care more about bad loans than volume of loans. >> or net interest margin which should be a ben fish. >> i and people are still worried about bad loans i think wells far go is having an unbelieve able quarter still has consent decrees to worry about. upstart has had a terrible quarter but it is a fin, a big tech company that has a lot of bad lopes. >> i think carl, we didn't get through to it on friday but you guys had him on, i think, on tech check. >> max was on tech check. >> i was off that day. but he appeared in the wake of the quarter. interestingly, i don't know if you watched the one year inflation break-eacvens the lows

since january of 202, and the one thing we didn't get to is elizabeth warren who has made the argument on our air in the last few weeks about the impact of rates going too far in the wrong direction and actually arguing that rates, to the upside, are actually not a cure for inflation, but she echoed some of those comments in the last 24 hours. take a listen. >> there is nothing in interest rates, nothing in jerome powell's tool bag that deals directly with those. do you know what is worse than high prices and a strong economy? it's high prices and millions of people out of work i'm very worried that the fed is going to tip this economy into recession. >> and certainly, jim, that dynamic is what the fed equity trading on friday, and again today. >> well, look, carl, we have the lowest unemployment for years, if there was ever a time it would be tough, it's now, and when i speak to jim farley last

week, 3,000 white collar workers but they find jobs rather quickly. no one wants to be a country where people are laid off but if there was ever a time to be tough, it is now >> there are a number of times where the expectations are there to find work quickly. >> we have a shortage of engineers here tremendous proportions and we don't teach enough engineers, a 500 engineers at raytheon, the lack of engineers has to do with the fact that it has not been a skill set that you needed you needed computer science. computer engineering that's where the weakness is in this economy the real weakness is there are a lot of companies that got started and venture capital money and are failing and that's where the layoffs are. >> we can get to the public markets. >> well, we have talked many times, carl, about the fact that ipos this year have been few and

far between. it may be a year with the least amount of issuance we'll see. no one knows what the third or fourth quarter is going to bring in that regard >> carl, as jim mentioned earlier, the oil is the leader right now, with exxon up 2.5%. we've seen that. boy, it is worth mentioning, those shares, 64% as far as this year, and it is well above the $400 billion market value. >> it's been said, since you're special, this thing is caught up with a lot of the other oils now there are other oil, the american permian, and occidental is insane, because of warren buffett. but we do not have west texas back to where it was, so and it is tough to tell whether there isn't just a pull from europe. >> interesting - >> you know, carl, it is a worldwide market >> yes, definitely going to be the high end of the range we've

seen the last month. >> by the way, earlier this week, down 20%, because some german officials talked about the storage activities actually running ahead of schedule, going into winter, which, whether it's true or not, is something that you would hope for >> very much so. look, there's a big percentage of people who think, in this country, that germany and france are going to force ukraine to come to the peace table to make it so they get the natural gas i don't think that's the case. i don't think that they're going to sell out, ukraine >> and getting ready for - >> absolutely. and it is a stock yoouhink ther be -

>> anything else this morning? >> 3m lost a key suit. 3m is a relatively denial of the come bart arms, they have a bankruptcy so to speak where they thought it could expunge some of these, they need to come on air, because the cases, the soldiers, they're winning more than they're losing, and it is this that is really prevalent here now euph, you know i've worked with the american foundation for four years, and we think we have something that is breakthrough, but right now, the plaintiff's doctor's are hoping that their lives, that that changes because lives are being destroyed. >> we had mike join us. >> very straightforward. >> yes, so consider this an

invitation, mike >> yes >> what's on "mad" tonight >> we've got the guy who called this rally, almost to the day, we've got that, it is kind of shocking and it has to be watched. >> i may be doing it. >> you may be heading back to the old studio. >> yes >> carl, we're working on it and doing the best we can. >> yes, we are trying to make that trip. >> we've got the hour done >> former kansas city fed president thomas hoenig on the chair's wkh mmhaiscoents and the path forward for rates and the dow below the 50-day for the first time since late july

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welcome to another hour of "squawk," equities today, extending friday's round on the heels of the fed chair speech, the two year with a fresh two-year high and as we wrap up the last few days of august and work our way to jobs friday this

week david? >> we're keeping an eye on the movers this morning. we will start with pin duo duo, the shares soaring in part because of better than quality result, and the company says performance was boosted by recovering consumer sentiment. more on the quarter later this hour key bank sector weight downgraded and citing challenges ahead for the company including potential power shortages in europe later this year. >> and then netflix, which is reportedly mulling a 7 to 9 dollars a month price where it is soon to debut as a service. the stock has been a little less performing, down 6% 2% this yea and the s&p 500 wiped out $1.2 trillion on friday as the fed chair signaled higher rates

and significant pain fighting inflation. chief investment strategy and chief economist steven whiting is here and cfra sam stoeble is here good to see you both >> good to see you >> in star trek where they get hid by a laser and the captain calls scotty and says damage report give me the damage from friday. >> i'm doing the best we can [ laughter ] >> we got the weaker than expected economic data and the fed being more hawkish, so i believe we are now in the re-test of the june 16th low, and so we're going to be seeing more pain, if you will, between now and the september 21st fed announcement and you know, the question is, do we break to a new lower low or does the june 16th low hold and i believe the latter is the case >> interesting

steven, what if jobs are weak on fridayer, when the cpi is soft again next week? >> look, i think more news like we've had on inflation will be very welcomed by the fed, but it's not sufficient. it probably will take some outright employment declines, and i don't think we will see them until the new year, to really turn the fed around it will be the combination of falling inflation, and again, goods inflation has slowed from 12% to 7, it has the 12 months behind us but it is headed in the right direction. services take longer it will be 2023. but the labor market itself, again the federal reserve said that it's not monetary, it was behind the supply shortages but it will act as if, and i think you will see some employment declines in the coming year and the fed will be willing to tolerate a recession and it will reverse in the coming year. >> that's interesting.

to steven's point, prior to jackson hole, there was an element of the market that would say that, would welcome weak data because they believed it would lead to a pivot, but powell's speech, just the framework of the speech now, seems to have given him a path to say, when weak data presents itself, to say see, i told you, and it is part of the ongoing plan we have to be stubborn on hiking rates >> well, i think you're right. and that steven is correct, that we are likely to see the fed remain sticky with their higher rates. our expectation is 50 basis points increase in september, two 25 basis point hikes for the remainder of the year and staying at that elevated level through 2023 and possibly through 2024, through early 2024, so the pivot could be going from hiking to neutral rather than hiking to easing. >> right we mentioned break-even. steven, with kramer in the last hour, the one year back below

230. i mean that must be at least some silver lining in that things are not getting extended, imbedded, getting away from the fed? >> there's a lot of good news here to suggest that this is a cyclical problem as chairman powell said, we didn't have 15 years of failed attempts to lower the inflation rate we've had inflation expectations stay, long term inflation expectations stay in a 1% range over the last few years and still getting the largest annual rate hikes in history, along with qt. so the federal reserve is not acting as if this is going to be a long-lasting inflation it will, in every likelihood, be a recession, but the economy, sort of getting to the top of the building, we don't have that far of a default if the elevator goes down. i think again, we didn't generate any of that hubris and denial about a recession like we had in '08, '09, or in 2000. >> finally, sam, growth is actually three weeks now, of growth underperforming value,

are we back to banks and energy? is it that kind of market? if so, for how long? >> i think we're in a defensive slash energy inflation sensitive area, where energy materials, consumer staples and utilities remain in a leadership mold but i think that really is for, like a september to remember, that we're going to be re-testing the june 16th low, and then should we end up realizing that maybe inflation will come down to about 6% by the end of this year, 2.5 by the end of next year, then i think investors will be willing to dip their toe in the water once again. >> that's a nice road map, both short and long term. steve and sam, talk soon thank you. >> thanks. all right, let's get to that fall that we saw in crypto that occurred over the weekend. bitcoin hitting lows that had not seen since mid jewel don chu has more on what may be driving some of that volatility.

>> risk aversion has to be part of that equation we have spoken a lot over the last several weeks about that increased correlation or trading relationship between some of the higher volatile nasdaq type stocks and bitcoin is falling victim to perhaps some of that trade as well. bitcoin prices right now, we have actually reversed a little bit of the down side move we've seen over the course of the last couple of days into the weekend. we are on a 19,000 handle just about an hour or two ago right now, back above 20,000 20,206 the last number for bitcoin. now up a percent but the reason why it is important right now is because many traders are starting to rekind of value, what are the levels for bitcoin that they're watching if you look over the last week, 20,18 a is where we were and over the course of the last couple of months, when bitcoin hit its low, the number that a lot of folks are watching right now is around that 18,700 mark that was the low for this particular cycle in the last couple of months if you can somehow manage to hold that, that might be a bit

of a constructive sign for bitcoin prices one other place to watch now is what is happening with ethereum. because it is sitting right at a technical level for traders that is about its 50-day average price on a rolling basis just around 1,500, 1,497 or so and both are at that level for ether prices and for those stocks that are most likely associated with the bitcoin ether ecosystem over the last couple of months has been names like coinbase and robinhood and mitcro strategy because it has been so involved with the bitcoin trade some have had steeper declines on a year to date basis, and then as you kind of put things into context overall, for some of the trades that we will see, and keep a close eye on, some of the smaller tokens, things to watch, coinbase, robinhood, micro strategy among the stocks that are the most levered so to

speak to that bitcoin trade and ethereum trade so we will see how things shake out, carl. back to you. >> before i lose you, bespoke had some numbers out this morning, 3% declines on friday and how often that gets made up on a monday. not very often hence the term they say turn-around tuesday. so today's losses might be seen as almost expected >> almost. and it was a conversation that mike santoli and i had in the last couple of hours about some of the bespoke numbers and one reason to be a little bit constructive on what is happening right now, is that it is not a massive snap-back rally. the turn-around tuesday could still be intact. but if you watch that risk aversion trade, whether or not you do see some of those mega cap names really start to kind of build up a little bit of steam to today's closing bell, that would be a tell, but that turn-around tuesday story can still be intact given the fact that we aren't seeing a massive breakout to the up side. >> thanks. as we go to break, take a look at the road map for the rest o

the hour here. including a boost from chinese stocks more on easing some of these de-listing fears in the u.s. plus, return to office stalling. will more than 40% of workers ever come back the owner of the world trade center will join us. and a let more on what is ahead, and joined by the former president of the kansas fed, when "squawk" continues.

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there, it has outperformed the nasdaq over the last month, you can see also up nicely this morning. pinduo, after the company reported results and the china tech sector is moving higher as a whole after the delisting of some of the bigger names has seemed to ease a little bit. chief investment officer brenden hern is joining us now and give us your take on the news we got officially on friday on the so-called chinese regulator, reaching some sort of agreement to allow for audits of chinese companies the way that we wanted it to take place >> you know, 100%, we had a great agreement, a first step for the audit reviews to take place in china that would stave off a potential

delisting of adrs which put almost 2 trillion of u.s. saver's wealth at risk a great first step certainly, as the s.e.c. stated, that the proof will be in the pudding. so we need so see these audit reviews take place and hopefully the companies pass, as we anticipate they will >> again, you're right the chairman said those exact words with us on friday, the proof will be in the pudding have the shares moved up too much in your opinion as a result given that there may be some rough sledding ahead do you expect in fact, that this will move smoothly from here >> well, i think, you know, the individual audits should be taking place, and remember, these companies are audited by the big four accounting firms, so we anticipate that, you know, the u.s. colleagues are telling their chinese colleagues how to handle these audit reviews, so hopefully things go smoothly and that should allow for a re-rating of the space and trading at half of the price

earnings multiple and half of the peg rating of securities so i think the re-rating of the china internet stocks hopefully is a strong catalyst for the space. >> well, speaking of re-rating, it is not as though this audit question has been the only question, we've had covid lockdowns, which we still don't know exactly, because china continues to have a zero covid policy and you've had a skro -- a crackdown by the government over the last couple of years on technology companies overall brenden, mix it all together, for me obviously we know how poorly these companies have performed over time. is this a re-rating of significance or are there still too many questions >> i think that a lot of the issues you point are really hopefully the wall of worry that the stocks can climb, that these companies have seen an incredible disconnect between the price action, and the fundamentals and a lot of that is because of the issues you outlined. and certainly china internet

regulation, zero covid, hfcaa, all of these issues have really pushed investors out of the names within em funds, actively-managed funds, 2% underweight to china, so i think if we have good earnings, like we saw today from pinduoduo, on friday, from metawuan and tomorrow morning, you have some of these catalysts to bring investors back into these names, and certainly the valuation disparities are really hard to ignore at this juncture. >> and to david's point about look, overall industrial policy over there, economic policy, ap's got a piece out today about a chinese think tank that issued a rare public disagreement with the party about zero covid, saying that it is just not working, it's endangering the long-term health of the economy. do you see fissures there in policy and do you have a sense as to which way it may tip >> well, i think since the shanghai lockdown, carl, we've seen an adjustment in zero

covid. which in china, they called the lives first policy, because if you apply the very low vaccination rate amongst china's elderly population, probably 2 million people would have been killed by covid, so what we've seen is since the shanghai lockdown, you're not seeing citywide lockdowns i think the economic consequence of what happened with the shanghai lockdown, we've seen a tweaking of the policy individual apartment buildings can go into lockdown apartment complexes. districts within a city. but there is covid all over china, it's, you know, a number of cases in hong kong, it's like 4 or 5,000 cases a day the city is not closing down so there has clearly been an adjustment to try to mitigate. so economic consequence of what happened in shanghai. >> that goes to the broader concerns about the overall economy in china and the state of the consumer. any number of head winds anything we're learning from

pinduoduo's numbers for example? and overall, they're sort of filling in your view, of how things are in terms of the consumer and the economy >> i think the zero covid policy, david, certainly has led to a conservative household, that if you're worried about being locked in your apartment, you're not spending money, you're going to be hoarding it so i think what pdd's great numbers today, 36%, year over year revenue growth indicates, that chinese consumer slowly coming back, and i think that is important for u.s. investors and names like nike and apple and others, where great u.s. multi-nationals are doing great business in china, and that's good not just for e-commerce plays, like, you know, the flames we hold, k-web, but u.s. investors in general. >> and brendan, you are having trouble getting back and forth from there have you been able to do it

sucit successfully or is the covid thing a real issue >> it is a real issue. we have our first trip in november we are hoping that includes hong kong we open after the party congress in october, we see a slow easing on some of the quarantine policies hong kong is down to a three-day quarantine and hopefully reflected in china and get back there and meet with our colleagues and the companies that we're invested in. >> always a good thing to be able to do that. brendan, thank you for your time as we go to break today, pot stocks extending their gains canopy up almost 25% in a week as a number of recent studies show higher marijuana use across the country. especially in states where it's legal. but first, take a look at the top laggards on the s&p, as the index itself has shaved the pluses down 10 points. we're back in two. ♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina?

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let's get to the comments made by elon musk this morning, speaking at a conference in norway about the future of energy changing his normal tone about the importance of renewables, saying that oil and gas is needed otherwise, civilization will

crumble. phil lebeau has more on that >> hey, carl, that is exactly what elon musk had to say. his comments gaining some attention this morning in part because of the situation in europe, when it comes to the cut in oil and gas supplies, given the ukraine war and what's coming or won't be coming from russia when it comes to oil and gas. and the exact comment that you mentioned, here it is from elon musk, when he was asked on the sidelines of this conversation, hey, what about drilling, do we need more back here, and he said yeah, there is some need for perhaps more drilling exploration. realistically, i think we need to use oil and gas in the short term, because otherwise, civilization will crumble. and we certainly don't want to see mad max, thunder dome, or anything like that in the near future the other comment he made that is getting some attention, it involves wholesale teslas, and he reiterated his target is to see wholesale tesla technology

by the year end. he said it several times, all of the whole threading teslas out on the road right now, several thousand in beta test format right now, they are not autonomous i get this question from people a lot. they say well, these cars are completely driving on their own. no, they are not autonomous. they are not fully autonomous. they do have some self-driving technology that is fairly advanced, but it is not fully autonomous so as you take a look at shares of tesla, keep in mind that this is going to be an interesting situation towards the end of the year do people really pay attention to this? and hold it against tesla? or do they look at this and say elon has been talking like this for some time. if they don't have full sale threading technology by the end of the year, maybe in 2023, maybe 2024, at some point they still believe in the technology that's being developed by elon musk and his team at tesla quickly take a look at crude oil, because of these comments coming over there, in norway, bottom line is this, guys, elon is saying what everybody has said for some time, we are not

going to go to an ev future overnight. we're going to need oil and gas certainly to power vehicles for many, many, many years to come >> yes, fascinating field to hear him talk about the long term transition. shorter term, any comment or color about the ability to expand production, in different countries where they have facilities >> no, i think it's interesting that, you know, he is saying, look, we need to expand it, in a number of different areas. i think everybody has said the same thing, carl, which is you're going to need greater oil exploration and production in different parts of the world, the question becomes, when do we see that exploration, and when do we see that drilling? as you know that is the big tug of war that is going on righ now. how much more do the oil companies want to go into exploration at this point? >> all right, phil, thank you. phil lebeau. to point out, shares of ex exxonmobil 3.3%, perhaps some

sentiments from mr. musk responsible for that. how to think about looming rate hikes and the impact on your portfolio, we will sit down with the former president of the kansas city fed. we are still down on the s&p but ffheowsoarf e oth morning. stay with us s doing on their phones? they're banking, with bank of america. the groom's parents? they just found out they can redeem rewards for a second honeymoon. romance is in the air. like these two. he's realizing he's in love. and that his dating app just went up. must be fate. and phil. he forgot a gift, so he's sending the happy couple some money. digital tools so impressive, you just can't stop banking. what would you like the power to do? your record label is taking off. but so is your sound engineer. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire

good morning, nasa's mega rocket standing down from a scheduled test flight to the moon the agency's un-crewed space launch system and the orion capsule were slated to launch on a test flight to the moon but engine troubles put a halt to the much-anticipated liftoff and a new launch date has not yet been announced. former white house chief of staff mark meadows has been called to testify in a georgia district attorney escalating criminal probe into former president donald trump and his associates fulton county district attorney filed petitions, seeking to have meadows, as well as lawyers sidney powell, james walldron

and former trump campaign adviser forest etchstein, testify before a grand jury in atlanta next month the government will end its give away of covid tests because of insufficient government funding and they want to have enough on hand in the event of a full surge. we will watch on that front. david? >> thank you. we are almost an hour into the trading session. markets are still in the red but we are off the lows of the session. of course, all of this coming after comments from fed chair powell sparked that very powerful sell-off on friday. let's bring in cnbc's senior markets commentator mike santoli as we're an hour into trading right now. mike, your thoughts. >> it's fascinating, if chair powell's intent on friday was mostly to keep the stock market

from becoming too comfortable and thinking about when it would be a plateau, it succeeded but to me, it is not clear how far he needed to go, because there already was this reservoir of uncertainty in the markets a lot of short positioning a lot of people thought we should have a pullback in the s&p 500, even before he made the comments, a lot of folks targets just under 4,000 on at s&p as a likely stop at least on a pullback the big picture clearly is did he essentially promise that a recession is going to be the means by which we achieve victory over inflation i don't think the market is willing to go quite that far in fact, we're not, we haven't priced january earnings recession in just yet. and i wonder if there is also some investors seizing on the fact that you did have a slightly lighter core pce inflation reading on friday as well, as a matter of fact, the university of michigan sentiment numbers showed inflation expectations going down. so i think we wake up on monday saying just exactly how much change, and the bond market

saying short rates, fed funds will get to 3 and 1/4, 4%, probably by the beginning of next year and then plateau blackrock is saying a hurry up and wait fed policy. hurry up and persist at that level for a long time until inflation comes around it is definitely in between. it is interesting where we found ourselves this morning, guys at the a-day moving average for the s&p, and trading very technically. this is the time of the day, the time of the year, when traders, they take vacations but the machines don't and they do what they will. >> yes, you know, i was going to ask you specifically about certain sectors, mike, we are seeing, as we often do, sometime in times like this, energy benefit, although other defensive names, pharmaceuticals not necessarily. we should mention bristol myers shares are down sharply on data for a key drug that they're having some questions on overall what is your take on how we're seeing different sectors perform friday and today >> it's kind of a muddled leadership story

the greatest absolute amount of value is taken again out of the big growth stock wis remain the more expensive side of things. energy is this kind of idiosyncratic leadership group and sometimes it is difficult, sometimes it is defensive, depending on what the backdrop is, but crude oil being pretty firm here and natural gas with the highs, it is supporting that story, and clearly, it is also the kind of mirror image of the anxiety that we have for other sectors, if you're worried about energy crisis in europe, and a recession there, you know, energy is sort of the cause and the refuge in that environment financials remain a little bit of a sore point, i think, because they didn't really distinguish themselves in the rebound rally in june, they're not really to seize on the idea we will get more rate cuts that will help the netinterest so i seems like they're very much a mood indicator, more than anything else, and the fact that people are still on alert about whether credit is going to erode and a near recession type

scenario or worse. >> mike, appreciate. that we will talk in a bit mike santoli. let's stick with the fed and joining us now, former kansas city fed president thomas hoenig great to have you back welcome. >> thank you good to be back with you. >> you made the point, sometimes the equity market needs to be hit over the head a few times but they finally heard him >> i think so. but i will give chairman powell some credit. he was short to the point which is what was needed, and he had to make it clear, based on friday's markets, that inflation was the priority, and even though people say inflation, it has been a downtick and so forth, who knows whether that is going to be persistent or not. that's going to take time. in the meantime, you don't want the market getting ahead of itself, thinking that the fed is going to back off its inflation-fighting stance. and i point out, the second thing that's been brought up

during the conference where chairman powell spoke was the fact that we're also, they are also involved in quantitative tightening, so there's liquidity issues that i think they're very much aware of, and that has to be balanced as well, and perhaps the market is picking up on that as well. >> i wonder, do you think the efficacy of the speech came from, as you say, it was brief and to the point and not a lot of nuance, or was it about the fact that it was at jackson hole or was it about the fact that there was pretty, i mean i would argue, unanimity in commentary from all of the firmofficials lt week. >> i think it is a combination i think there is unanimity i think that's important but more importantly, i think it was the chairman himself who was trying to displace any plot that he was being ambivalent about fighting inflation so that's why he wanted it short and to the point and i think he succeeded in that >> how do you think, and just hypothetically, how does the fed

now approach say a very soft print? either in micro activity or pricing data how would they handle a material decline in prices? would they still be suspicious >> i think they would still be suspicious i don't know that they would, you know, it might affect how much they raise the rate, but i don't think it would cause them to pause i think they would still feel a lot of pressure to raise, you know, we've had these false dawns before in terms of inflation, so why let yourself get fooled so i think the most it would do is perhaps modify how far this increase it in the next two moves but i don't think it will stop that. bought inflation is pretty imbedded in the economy and i think there's, i would be very pleased if inflation was coming down rapidly, i would also be very surprised >> thomas, i'm curious as to whether you want to offer any predictions on what you think the terminal rate will be, and how long it will actually stay there.

>> well, who knows for sure. my estimate is that they're going to get to 4% i would think that they would try to get, by the end of the year, although that would take some continued 75 basis points increases, but i think 4% is where they would want to be, and then they can hold for a while, and see if the inflation numbers continue, or if they stop rising, or continue to come down, and the faster they come down, then the sooner they could move away from that, but once they get to 4%, i don't think they will backlog very quickly. >> thomas, it sounds like the reason you would be surprised with the softening and inflation is about longer-term, sort of structural dynamics, and relationships, trade with china, and energy security in europe, and i would imagine, you would extend it to labor force, demographics here, in the united states >> well, you know, it's the same thing, you have two factors.

one is the supply factors of disruption and yes, we're not, we're still a global economy, we still import a lot from china, but it is a plot more stressful now than it was, so we're not going to have the growth in the global economy trading activity, so that is going to be a constraint you're right about labor and the cost of input. and on the demand side, it still is a fairly significant excess demand, both from the fiscal side, we just approved student debt forgiveness, if that goes through, that is a big fiscal stimulus, so you really have a lot of reasons to think that inflation may be around a while. and remember, quantitative easing has been with us for almost a decade and a half and you're not going to reverse that overnight so there's a lot of money, you know, the balance sheet is still close to $9 trillion there's a lot of money out there. it has to go somewhere so there is a lot of momentum believe it or not, in the sense of the, even though confidence is coming under some stress, there's still a lot of money out there, in the scope, going to be spent, and it's still going to

put some inflationary pressures within, inside this economy. >> finally, i wonder how you're thinking about the market's perception of the fed chair and his credibility, there were some pieces written last week about the fact that sure, you could have knocked him for misjudging transitory last fall, but that everything he has said about inflation this year has been proven to be true. do you agree >> well, when you say everything he said about inflation this year has been proven to be true - >> so far this year, yes >> well, in the sense of it has, it has been high, and it only has come down modestly, i think his credibility is really tied to his no longer equivocating on whether they're going to back off and whether we're, you know, neutral, and we, you know,give the impression that that's a good thing, that we're now neutral, when we, when everyone knows we need to be tighter than that so i think really, his

credibility will be rebuilt about what he said on friday, and how well he sticks to it going forward. >> thomas, appreciate that very much, as we continue to try to make sense of jack son hole and the market's reaction. thank you. >> you're welcome. glad to be with you. after the break, the gri reality for new york's return to office plans we'll get to that. but first, check out so big laggards on the dow which did fall below the 50-day this morning for the first time since late july. travelers and merck 3m, we're back in three.

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new york's office vacancy rate has been stuck below 40% for most of the summer and despite some hopes for a busier september, city officials and landlords are beginning to accept a grim reality for new york's office economy. robert frank has that this morning. hey, robert. >> good morning, well, the question is, will this be the labor day that finally brings people back to the office in new york back to work for new york,

stalled below 40% all summer now at 38% and more than 20% of the office space in major manhattan markets is still vacant. that's more than 50 million square feet. now, of course, many new yorkers, they go away for the summer, but the new york controller citing a big disconnect still between employees and ceos only a third of employees expect to be back in the office more than two days a week among ceos, most expect at least three days a week, or more the controller saying, quote, these rates have largely stabilized and appear unlikely to rise quickly in the coming months the partnership for new york city, a bit more optimistic, saying office presence could reach 50% on the average weekday before the end of the year a recent fed study even noting that businesses plan a quote slight increase in their footprint on aggregate in the next one to two years. but even a hybrid workweek could take a big toll on the city's

economy. a recent study finding that office workers spending nearly the office will fall by more than half, to about $6700 a year that is the biggest drop for any city in the country. and david, you put it well this is a new world. and next week will be a big indicator. >> yes, it is going to be one of the larger outcomes of the pandemic, i think, the change in the way we work. robert, thank you. for more on commercial real estate, and that of course, return to office, let's bring in silverstein properties ceo marty berger who joined us a little more than a month ago as well. nice to have you back. what are your expectations for this idea that we will give it one more shot in terms of getting people back in the office more often than they have been >> thanks for having me back look, we're experiencing people coming back, i think after labor day, we will see an increase in people coming back to the office and i think by the end of the year, we will have some new

normalcy in what happens in the office >> this is the new normal, what is it going to be? >> as you said last tight, people will be using the -- last time, people will be using the office space differently, i think tuesday to thursday, a 70 to 80% office occupancy, and it was never 100% and i think mondays and fridays will be different for different firms. different firms use different -- use their space differently, and it is interesting to see, yes, if you ask someone if they want to work remotely, they will say yes and if they want to give up their office space, they'll say no. >> i've had many conversations with obviously leaders of commercial real estate companies, and they always seem to put a positive spin on it but this doesn't seem positive to me. i mean over time, we're going to have 30 to 40% of people working remotely, and aren't companies eventually going to be reducing the amount of space that they use? >> it's going to be different for different industries we've seen a lot of leasing in our portfolio. and we haven't lost many tenants. in fact, we just signed 180,000 square foot law firm last week,

in 3 world trade center. and we signed 109,000 square foot lease with a city tenant in broadway, and those buildings are almost 100 years apart in age. >> and even though most lawyers i know will not come back to the office most of the partners will not come in but they don't seem to care, they lease the space anywhere. >> that firm was a 70,000 square foot increase. >> no kidding. >> what are your expectations, though, i mean, all right, today, we have a story about the governor of new york moving forward on this huge re-development at penn station, going to add millions of square feet potentially, over many years, to office space, it seems to make no sense, do you understand it? >> well, look, new york city is the financial capital of the world. and it's also a tech capital, after silicon valley, i think it is the largest tech area in the country, and then you've got everything in between. you've got great talent in new york city. that's where people want to be and so you have companies coming

here to tap into that talent and they're going to continue to do so. >> in particular, firms are saying to a lot of their workers, you don't have to come to the office. i mean even if we were to grow in terms of jobs, per se, it's not clear that people are actually going to come to the office, is it? when they're technology company? >> if you look at the history of the technology companies, they didn't make those products by being apart. they made it collaboratively >> carl has a question for you as well. >> i wanted to get your take on this journal piece from last week basically, they argued that we're in an office glut and we've been one in decades and they trace the origins back to reagan when he allowed investors in their words to depreciate real estate much more quickly than before, among other changes, lowering their tax bills. do you think that was the genesis of us being over-officed. >> i don't think it was an accounting change that created an office glut and i really don't think there is an office glut. i think, you know, the office

evolves over time and becomes different things in fact, we're taking an office building as we spoke last time and converting it to residential. if you look at new york city, it's got a very older stock of office buildings and it will be re-used as different things over time >> we talked about that last time you joined us, particularly the buildings that lend themselves more perhaps, because they have more light than the '60s buildings in midtown, do you expect a wave of re-development of old office buildings into residential >> i think there will be a lot of it but not a ton of it. not every building can be re-purposed like that. you have to deal with ceiling heights and floor plates and building systems and not every building can be repurposed into a residential building. >> i want a prediction here. where are you right now in terms of your buildings and people coming in? >> building occupancy is in the high 40s, low 50s and i think it will be in the 70s by the end of the year. >> 70s by the end of the year. i will hold you to that, marty thank you for coming in. >> thank you. coming up on "tech check,"

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. sector sort with dom chu hey, dom. >> carl, we are at session lows with the s&p down roughly 32 points, 4,425. we're hitting the lows of the session right now. the energy sector by far the only green sector, the best performer far and away nearly every stock in that group is in positive territory right now. marathon oil, diamondback energy, among the leaders in the sector and those games come as oil prices move higher traders are looking ahead to next week's big meeting between opec and its allies, where a supply cut could be on the table. keep a look at those oil prices. going to break, a programming note, be in the room at cnbc's delivering alpha investor summit, the investment event of the year, in person

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bulls made an effort mid-morning here, trying to shave some losses. we got fresh lows, dow is down about 300. bob pisani has more. >> we've tried to rally several times. the low print was 402 # 1 on the s&p, right at the open we've broken through that. the problem is simple, the bulls have tried to mount a rally several times but they don't have the buying power. there's not enough buying interest after what powell said on friday. sectors problems, you don't want to see energy leaving the market proxy for inflation. big movers are all tech stocks cathie wood's art fund tried and got into positive territory, but has since fallen back. so have semiconductors, and communications services, here's the growth parts of the market

falling back, at the same time, energy is mounting another big rally, and really as i said don't want to see that occidental, that's happened several times, 2% from a new high, 127. exxon's probably 103, 104, 4% from the new high, marathon also moving the big issue that everybody was dealing with over the weekend is, what's next after jay powell we're entering a seasonally weak period right now, september is seasonally weak, that's going to matter now is how well the earnings hold up we're still up, earnings, but lower at this point, 5 or 6% growth in the s&p 500 and the kmik data is what matters at this point, job support on friday and job growth, and we'll get the cpi, the consumer price index on september 13th. then we're going to get the sell side put up the full screen, i'll show you what's going on

very big conferences that start after labor day here, including big names, barkley's going to have a consumer staples conference, evercore will a media and tech conference, wells fargo is going to have a health care conference that's going to happen citigroup, and goldman sacks has a retailing conference, the first week of labor day, first week of september and normally these conferences have minimal impact on the market but remember, carl, we have not had major earnings commentary since the middle of july for most of these companies, normally that's not on issue but a lot has changed since the middle of july to the first or second week in september and i think companies may have a lot of commentary on how businesses in the third quarter could potentially move the market there's your two things, look at the economic indicators and look at the sell side conferences coming up. at the same time it's good to stop and remind everybody that even though we've had a terrible friday and monday is not so

great. a very long way from the lows, the rallies have been fairly significant in the third quarter, friday, not accepted, friday excepted, of course, the russell 2,000 is 11% up for the quarter. the dow transports up 9% the nasdaq 100s up 9%. and even the s&p 500 is up about 6% so the important thing is we're trying to rally, and this morning, and haven't been very successful and perhaps given what's been going on with powell that's not surprising we have gone from overbought to oversold in about two weeks, that's how crazy the markets have been, short-term indicators we use, s&p was at 70. that was overbrought a week and a half ago and now it's towards 40, that's now going towards oversold so it's been a wild time, the problem is, nobody's quite sure what is going on with the economic situation so the important thing here is keep an eye on where we're going, the major trend is being

driven by the fed right now, the last time, remember, no bids in the market the market tends to drop as the buying interest tends to dry up. it was a tough time in the last few days and we'll keep an eye on it. the important thing now, of course, "techcheck" is coming up right now. and that will do it for "squawk on the street. good monday morning, welcome to "techcheck," i'm carl quintanilla with jon fortt and deirdre bosa this doesn't happen too often, appearing together at cnbc headquarters. >> you wouldn't believe what dee and i had to do -- >> you've had the card. >> yeah, today the bears are out and they're coming for tech, why one analyst says we are still set up for a rally amazon and the ceo plug power on that acquisition and health care a ambitions, later on apple files a trade mark, netflix considering a pricing change. we begin today with tech stocks getting crushed, nasdaq down more than