by the way >> we all do >> we need to talk about the mets, aaron judge. that's going to do it. final check on the markets 180 points now on the dow, nasdaq indicated up 64 an monday. >> tuesday >> that's right. and it's september; is that correct? >> correct >> and it's raining. >> make sure you join us tomorrow "squawk on the street" is next good tuesday morning welcome to "squawk on the street." i'm carl quintanilla, here with david faber. jim cramer has the week off. we have powell on thursday, ecb, futures getting a lift here over the last couple of weeks nasdaq trying to avoid its

seventh straight day of losses and opec plus surprising the energy markets, agreeing to cut production targets by about 100,000 barrels per day starting in october >> ukrainian president zelenskyy is set to virtually ring the open bell right here at the new york stock exchange. we'll take you there live when that happens let's begin with stocks trying to rally a bit to the shortened week of trading. we got the note about the fed over the weekend saying the u.s. can achieve a soft landing jan argues three things, some rebalancing in the labor market, that's coming along, and a large decline in inflation which they think has been particularly encouraging and they even suggest that shelter, rent growing might slow >> some things considered stickier are cooperating, at

least in the short term. i think it's always been the case that it's been a tricky equation to get to a soft landing, we've all acknowledged that at times in june it looked like it was virtually impossible. now with friday's jobs number, it seems like, okay, maybe we can get back to 50/50. what are we defining as a soft landing? we had a couple of quarters in the negative, gdp, below friend growth for a considerable amount of time is what powell is looking for and the markets reflected that to a degree and really the ambiguity around that it looks like the market has been resilient today, a lot of the global headlines over the past three days which is true but also we lost a percent and a half on the gdp since friday keep in mind where we came from, 3900 being treated as relatively important on the s&p just level-wise it's one of those situations where you can be impressed with the way the market has kind of attempted to regroup at the same time, you say the

don't overthink it rule still favors the bears it's september, fed is tightening into a slowdown, treasury above 3% and the trend is lower and the dollar is higher all these things say that the keep it simple rule is, stay cautious and yet the market has priced in a lot of tough stuff already you just don't know if it's enough, is always the big question >> meanwhile we have this ongoing debate between the goldman side and the morgan stanley side today it's mike wilson we think the next several quarters will end up containing some of the most significant downward revisions it forward epf positions. >> it's morgan stanley versus jpmorgan, the old house of morgan is kind of in ovpgs h

opposition here. mike wilson has been very current, he's more or less been correct in terms of the valuation compression, rates going higher, inflation being an issue, he was early on that, and the big question is do earnings have to succumb. >> been the question question for a long time. those allocators of capitol who have chosen to raise capital over the last few months and watch while we have that significant bear market rally hung in there and perhaps they're going to end up proving right with that basic thesis being that come the fall which we are now unfortunately moving into, we're going to start to see significant revisions in terms of earnings which obviously wilson is making the case for >> absolutely. he's been reluctant, outside of energy, you're projecting a slight decline in earnings for the year in the s&p 500. i mean, it's minimal he makes the point that analysts and companies have been very, very hesitant to do the big things you talk about 4x and little

moderation in demand and that's been the case. based on the concentration in earnings power, you need to see numbers come down in a big way from the big growth stocks apple, microsoft, they have to come down a fair bit in order to have a real washout. >> where did you say a.m.pple ws now? >> 7% of the s&p the stock is much more expensive than the average stock in the market and the index as a whole. so it's plenty >> i'm happy to move on if you want, carl european energy is a situation we have to discuss, i hope we will at some point, because it has broad ramifications as well, not just for markets there but for our markets. >> guys, it's great to have you back, hope you have a great holiday. sumir, we are going to get

deeper into conference season. there has been this lingering thought that that's when the rubber will hit the road in some of these downward forecasts for eps will eventually come to fruition do you see that happening in the next couple of weeks >> we do the longer we go, the more the economic data deteriorates, the more the macro gets to be trickier with respect to ma margins, with respect to interest rates it's more about risks versus rewards. as mike mentioned, there's a lot of things negative right now we would much rather be cautious right now with the optionality to get more aggressive >> interesting jimmy, do you think the resolute nature of the fed commentary gets tested here by what some might argue were some stagflationary signals >> when inflation is above 8% and we have a very strong job

market, it would be a dereliction of duty for the fed not to sound very hawkish. i don't think they're being tested right now the question is fast forward a few quarters when unemployment rates start to move higher, a clear sign of things slowing and perhaps of a recession that's the time the fed will have to be tested and whether they will be fighting inflation or pivot back to healthy economy. >> a few quarters, you say, a lot can happen in the next whatever, nine or 12 months or something like that. i wonder, from here on out, does it matter much of the fed, jimmy, goes 75 basis points in september or 50 and then says that's probably the last super sized hike we have to worry about, and then it's a little more data dependent, we see how the economy fares from here? >> yeah, whether it's 50 basis or 75 depends also on the cpi data that comes out next week. i'm leaning more towards the 50 basis point camp now, given that

we're seeing clear signs of some deceleration in pricing, from gasoline to car prices whether it's 75 or 50 doesn't really matter. i think it's really the terminate rate and i think the expectation is for about 3.75 to 4% and the fed is likely to try to stay at that level for a while. as i've said, things will change whether it's in a few quarters or a few months, we'll see but i do think given the macro backdrop, when you look at the big picture, a recession appears unavoidable. >> sameer, i did kind of list all the challenges that are known and right in front of us in terms of just the trend and the seasonals and what the fed is doing valuation is not necessarily certainly turned cheap i do wonder what you make of either the fact that the market has shown a little bit of an ability to stay above the lows and then this general sense out there that pretty much everyone

thinks they're going to have it lower on the fourth quarter as far as i can tell. >> i think the tricky part is the market has become very short term people are literally trading day to day, week to week they're saying, look, until quantitative pricing comes in, to your point about valuation, if we bottom here, if this is a true sustainable bottom, this would be the most we've had on the s&p. >> fascinating we'll see. we've got some major data points headed our way over the next few weeks. sameer, jimmy, thanks, guys, talk soon. it's not a merger monday but it is a tuesday and we have a deal, cvs is acquiring signify

health it is an all-car transaction signify shares you can see right there. there had been hopes in the market that the price would exceed $30 or $30.50 as it did, but cvs comes out the winner unclear whether there really were a lot of competing offers, so to speak. u&a have made a bid, unclear whether they did or not, change health care is a deal that unh still has looking for regulatory approval for but the overall trend here is an interest one, which is cvs becoming much more of a health care company we already know they are an insurer. but as as well now, 10,000 track i guessers, clinicians across all 50 states. mike, it does put them into a position to send people into

their home, a new wave or new way of doing things in terms of medicine at this point for these larger organizations, all of which will continue to look, it would seem, for acquisition opportunities as well to sort of match. >> for sure. and interesting that the market does like the fact that cvs ended up with it in terms of cvs itself being up 1% the general idea i guess that the more of that kind of chain that you control in terms of patient visits, pharmacy benefit manager, all of it, if all of it's based on managing costs and essentially being somewhat efficient in how you deliver care, you have to just be right there and not just essentially have it passed along from other providers. so definitely interesting as a trend. i think cvs, stock's only 10% off its high, not a lot of stocks that size only 10% off the high >> people still think of it for their pharmacy but it's become such a different company at this

point. they're talking about integrating home care and technology we'll see whether they are fully successful in implementing that. but a large deal for them this morning, again, at $8 billion. perhaps not a huge windfall for signify shareholders at this point given previous reporting had sent the stock higher, although the private equity firms behind what was signify, creating it, certainly have done extremely well in creating value there. still to come this morning, ukrainian president zelenskyy will virtually ring the opening bell, we'll monitor that some comments today about the trajectory of the conflict between russia and ukraine take a look at futures we'll get to some other news regarding cardinal health and bed bath more "squawk on the street" ntuein ment.

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bed bath & beyond's ceo, who died friday by suicide, courtney reagan has the latest. >> good morning, carl. the tragic news of the death of the bed both and beyond chief, his death was confirmed. the company says their focus is on this sad and difficult time it leaves open another executive

seat a successor is still to be determined the company eliminated its chief operating and chief of stores rolls. the financing agreements were $500 million, expanded more than $1 billion credit line and $375 million first in last out facility with jpmorgan and sixth street partners were finalized september 1st. bed bath & beyond trading remains active with traders, 40% of shares are currently held short and volatility remains high in august investors filed a class action lawsuit accusing them of artificially inflating bed bath's stock price stock sales in question were both preplanned as part of an agreement that he signed in april. in a filing last month bed bath & beyond said it was evaluating

the complaint but believes the claims are without merit and would not comment when asked by cnbc bad bagtd -- bed bath & beyond most mentioned name in the news in the last few days carl >> it is such tragic noise, cort there aren't many companies at the moment who have neither a full-time ceo or cfo that management structure will be key >> absolutely. in that strategy update they named a head of bed bath & beyond stores and a head of bye-bye baby stores. that seat remains vacate and the cfo seat of course is vacant as well they say a different time for

the requests and the tragic news makes it all the more difficult. >> courtney regan, thanks very much oil has turned around. h currenting g ly getting closer . don't go anywhere. for your full financial picture. with the right balance of risk and reward. so you can enjoy more of...this. this is the planning effect.

also we mentioned earlier, keeping a close eye on the worsening crisis in europe in terms of energy. it appears at this point for the most part no russian gas will be exported to the continent which had comprised as much as 40% of

its energy use the nord stream pipeline has been closed. germany obviously building up its stockpiles of natural gas as are others the french relying as they have for many years on a huge nuclear plants for much of their energy but even there, because of a drought and lack of water there have been issues in terms of being actually able to cool the plants so that has come down then you have the supply side. you have inflation uk electricity rates, a new prime minister there, trying to say no, we won't raise those rates, could be as high as $4,000 a year. mike, there are so many different parts of the story, much of it leading to the idea of significant recession in europe and then beyond that, sort of on the trader side, both beneficiaries and potential losers on either side of that lng trade in particular. >> for sure, and also any energy dependent businesses,

industries, are looking like they're going to have perhaps some rationing interesting that natural gas itself, it kind of peaked well ahead of this. >> yes >> on the storage news, really, on how much they were kind of stockpiling. >> which is good news. >> very good news. >> in the sent that it had not been expected that they would reach the targets as quickly as they have. >> right now it's essentially weather-dependent for the winter they're basically saying we have enough for a mild or not-so-harsh winter. but in terms of the electricity costs, that is filtering through. the idea of bailouts of one variety or another, whether it's governments essentially kind of subsidizing energy consumption or however it might work, that remains to be seen you have to imagine there's going to be some kind of trading casualties along the way too >> and/or the beneficiaries. >> sure. >> will they have the capacity, those who contracted for capacity can actually break

those contracts by paying damages and make more money selling into the open market >> market strain is one thing we'll be watching for on european energy. goldman today, the market continues to underestimate the depth, breadth, and structural repercussions of the crisis. we believe these will be even deeper than the 1970s oil crisis that's goldman commenting. there's projections that uk disposal income comes down 10 in the next two years incredible changes >> a true crisis we'll see. >> after the break, on a related note, ukrainian president zelenskyy will deliver remarks prior to ringing the opening bell that's moments away. don't go anywhere. ♪ ♪ wow, we're crunching tons of polygons here!

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we are awaiting comments from ukrainian president zelenskyy who are virtually ring the opening bell in a moment he wants to drive investment in ukraine, inviting businesses around the world to invest in

ukraine's future he has given some interviews over the weekend saying he's not interested in negotiating and that the united states in his view should name russia a sponsor of terrorism even as we got multiple reports today that putin is scrambling for more weapons technology, even resorting to buying artillery from the north koreans. so the store is moving along >> as you pointed out, carl, connected to our last subject prior to the break, how much pressure will be brought on zelenskyy by european countries continues to be a question, for him to sue for some sort of peace, given the pressure their economies will be under as a result of lack of energy supplies coming from russia. >> there is also a little bit of a take after the announcement that nord stream is not going to reopen for natural gas, that that is in a sense the last piece of leverage putin has, at least a big one that we know about, to try and pressure european allies.

>> it doesn't appear the europeans at this point are buckling in any way despite what certainly is going to be a great deal of pain for parts of the population dealing with at the very least higher electricity bills. >> it will be interesting to see if there is a shift in strategy at least in the uk with liz truss, who has been said to be not as actively interested in foreign partnerships, boris johnson was intensely in favor of allying with ukraine. >> so that ukraine will enjoy all the manifestations available to a free person in a democratic society. we have achieved significant

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gives financial opportunities. i invite you to invest in ukraine for success in your companies. start your work. [ bell ringing ] [ applause ] >> and with that, the opening bell, and the cnbc real time exchange on the big board. as you saw, ukrainian president volodymyr zelenskyy ringing thi rebuilding our economy and giving you the opportunity to rebuild with us. definitely some aggressive

targets. >> right targets, confidence. he's trying to look to the next step >> there is an offensive going on in the southern part, the kherson region, trying to take back land the russians took early in the aggression. it seems to be going okay but always hard to know based on the various reports we get >> even just the estimates that say how many soldiers the russians have lost, do we know if it's really 50,000, and if it is, to what degree is that ringing in households in russia that are used to so much scarcity and drama it's impossible to know. >> tough calculus to figure out what brings about movement on that side. >> for the time being, 3941, as we looked at the opening of this holiday-shortened week basically we were looking at september weakness, and that after the trade would be at least a revamp in the back half

of the month then the ft was arguing over the weekend that the givebacks from spac is bullish, 70 billion with no place to go >> i think it's fascinating that everybody is attempting to account for every dollar of flow in or out. they think they know at least the systematic flows and what that's likely to mean, all else being equal. all else is never perfectly equal but goldman was making the point there is this mechanical pressure on the markets based on volatility levels, where the ctas are positioned, where you have the systematic fund community moving toward, even if the market doesn't move, that perhaps they have to apply some pressure that was supposed to be this morning, that was supposed to start today. i do think it's fascinating that the september story is perhaps overstated in terms of exactly how weak it is or how reliably weak it is

we had a market that went down the at the worst, 24%, in a way that no seasonal effects should have told you that was going to exactly happen so i think, you know, you take it all in, you realize that it's how the general climate of things, and see how it goes. i mean, at this point i think you can take some very modestly in the fact that the market is oversold internally in the short term, see if the market responds to that. if it responds to that, see if it's a real rally or a reflex bounce that trade after the trade is what he's talking about. if you get a rally and then a routine pullback, maybe you don't have to worry about the june lows getting seen again you scribble the line on the chart, past where we are right now, and see if it matters >> guys, we talked about europe, we haven't yet talked about china which has of course been an important component overall of sort of broadly speaking the market as well shares of alibaba, which usually we use as a bellwether for the

chinese market, are down 3.4%. more lockdowns they continue to follow the zero covid policy in the country as has been dictated by president xi jinping and that continues to be the case you've got zheng du, different parts of shenzhen, they may be using different terminology, they have as many as 60 million people in three different centers under some form of lockdown we haven't heard from eunice yet this morning, her reporting tells us what's going on we see the broader effect on the economy these lockdowns have had, and larger u.s. companies who rely on manufacturing there, they have to think about where they can potentially move this manufacturing as this continues. >> big picture, so you remove china as a potential source of

global growth, incremental global growth at a time when europe is definitely seen as dipping back into recession. and the formula is, all currencies are weak relative to the dollar that's what's going on chinese currency certainly making new lows. the u.s. dollar, 1.10, 20-year highs, effectively all time highs in the age of the euro, in a sense. what does that mean? it means in theory that the u.s. is the destination for capital, for safety purposes, and for relative growth purposes it should also help in the fed's cause. if they're looking at tightening, the fed's goal, that's a manifestation of it >> time to take us on the road, i think. >> we were talking about doing a show from uk >> "squawk on the street" in

paris. >> we'll see >> that is quite something >> you mentioned the reshaping of certainly the chinese manufacturing space. great piece over the weekend in bloomberg, the construction of new manufacturing facilities in this country over the last year, up 116% versus 10% for overall construction growth. and it's just obvious, blaringly obvious how purchasing managers, logisticians, ceos, are making long term decisions about the future >> so much of that about the supply chain, they've encountered -- problems they've encountered after the pandemic as a result of so many things. so much robotics will be deployed in many of these new manufacturing facilities >> for sure. essentially the pandemic and the supply chain issues reminded everyone what seemed like the less expensive place to produce was not all in less expensive or more reliable. and, you know, even the labor cost differential is narrowed

and it's really about labor availability we'll see how that works out here i absolutely think the capital deepening, as they say, of the u.s. economy is under way. >> we mentioned the prospect of moderating consumer demand certainly there's some sell side notes this morning about that. citi takes fdx to a hold train line freight is not building up to the peak season you would expect ahead of a holiday. they are wary on overall rails but in this case it is going to affect the rating on fedex >> yeah, and the stock is down 1%, it opened a little bit lower than that. it is interesting that we did see a lot of talk of freight rates, trucking, coming down hard that was taken as good news on the inflation front. what it means for demand and whether you'll get a real peak rush is an interesting question. fedex, it's one of those stocks

that has looked cheap for a couple of years right now. not a lot of earnings growth expected this fiscal year and next, it's supposed to hold together they're under a multiyear restructuring going on as well so, cautious about, you know, what the latter half of this year is going to be, but i'm not sure if it changes the overall story or is the perfect shock to the market either which had already taken the valuation down >> a bit of a recomposition of the board there as well given that agreement they reached with db shaw a couple of months back and fred smith is obviously now chairman carl mentioned spac money coming back that does lead us to at least a quick discussion of digital world acquisition corp leslie reported on this on "squawk box" earlier and probably will have more on the 10:00 hour on "squawk on the street." dwac, you know it in part because it is the spac in a deal to merge with truth social, the

social media platform of former president trump. they need 65% of their shareholders to vote in favor of extending the timeline for the spac to have in order to reach a deal for another year. apparently, this is reporting from reuters, they have yet to reach that i believe they have until noon today. now, alternatively, the spac's sponsor can actually, if he were to pay $3.75 million, get a three-month extension which conceivably would buy more time in which he could then go out and continue to try to get 65% of the votes in favor. that's what you need, in favor of an extension. the spac is under a good deal of pressure the sec obviously has asked for a lot of disclosure. there are a number of subpoenas, things of that nature they're dealing with a lot of document requests from

the sec. very unclear whether this will actually get approved by the sec. if he doesn't put up the 3$3.75 billion and this thing passes, it goes back to the shareholders >> which is confusing for some why would you vote for ten >> you have to vote in favor of the extension. >> right >> what it really is is a retail base of probably is unaware and you need a process solicitor to round them up. if you don't do that, you have to get past 65 if you don't -- but i believe they can try again and again, he can get at least three more months. this won't get them past what they need to to fulfill the sec's requests but it will potentially buy more time. he is in a position, if they do close it, to make what could be hundreds of millions of dollars given the performance of the stock. >> you know, on the general

notion of, you know, spac money going back to investors, you wonder what the next stop for that money would be, right you kind of tie it up in this structure where you knew at least you would get your $10 back is that the money that you say, fine, i'll put it in the s&p, or i'll throw it in small caps or do another kind of hedge fund structure? it's an interesting, i guess, thought experiment what the risk appetite that have money is right now >> as forced savings >> and by the way, if you haven't lost money if you're getting 10 back, you know, you've done better than the market by far. >> that's true >> at this point so you're not necessarily unhappun unhappy with your spac trade if your spac has been unable to do a deal and decides to liquidate. you are unhappy if they've done the deal and years have passed and there you are with your post-spac not doing very well.

>> and there was the idea too that while so many stocks are down 80%, why aren't they finding good stuff to buy? that's always the way it is, it never feels like it's safe to buy the stuff that's been -- >> finally, one of those mornings where you're seeing some beat-up names lead. pbh, for example airlines are in there too. reuters did have a piece earlier this morning, i think it was in an international dateline, basically arguing corporates are setting their travel budgets for next year on a 2019 baseline, which is interesting, sort of trying to forget the last two years. and whether or not that drives some sort of marginal demand for corporate travel as we get back to work. >> it's interesting, the missing piece, i don't know that really neighbor is counting on. it's not baked in the numbers, i don't think. it would be interesting if it came through, but you wonder if that is going to happen. >> some decent performance from airlines as the opening gains are fading

pretty quickly here, dow is up 20 the bond report, we'll hear from powell on thursday we'll see to what degree if any his remarks differ from jackson hole ecb on thursday where the debate is whether or not they go 75 we'll be right back.

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rick santelli here with s&p, global u.s. services, pmi. on the services side, 43 replaces 44.1 but it is still the lowest level since may of 2020 when it was 37.5. if we look at the composite, 44.6, that's versus the mid-month, so also lower also lowest levels since may of

2020 we'll have the services index in about 12 minutes but watching the service sector deteriorate of course is something to pay attention to whether it's lingering supply issues, employment issues, it all comes home to roost and "squawk on the street" will return after a short break. (vo) what can a nationwide 5g network from t-mobile for business do for your business? unlock new insights and efficiency-right now. allow monitoring of productivity at remote job sites, with next-generation bandwidth.

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new report out of c bcbre showing manhattan leasing hit its

you wonder at what rates it's a combination of volume and price so, it makes sense there would be more activity you do hear those clients, those companies that are signing new leases are going for more space, you know, per employees. so there is a slight offset. >> aci think his larger point t the friction to change jobs is practically zero all you have to do is change an e-mail address. >> cultural attachment is almost zero it's big tech, though, that's been the leader in terms of remote when you're a software engineer, the idea you're coming back to an office, it's unclear. the leaders of those organizations will do what they want, until the leverage really turns fully to, no, i need you

in the office, and if it makes sense. it's a unique situation, where it isn't as important to have that collaboration. >> a lot of those companies were dispersed anyway, but i understand why the big banks are the most adamant the business itself is a commodity, a lump of money and a bunch of people, and if you don't emphasize that we have something that others don't, then what are you as a company plus these spend their entire year figuring out the compensation of who deserves credit for what. that's what the business is on wall street. you can't necessarily do that. it's and it's a compliance cul

culture. >> they obviously get on the road and do that, but it goes up and down the elevator every day, your real capital. >> we're in five days. >> and have been for a really long time. we lost some ground. the markets are -- hey, bob. >> i've been here since january, four out of five days, at least. post-labor day trading kind of looks like prior to labor day. down about ten points on the s&p, can't hold the rally. what we are holding is some of the gains in the commodity stocks we've been flip flopping all over the place watch the xme here it's been moving recently. energy started up, it's not flat tech is down ark innovations is down today.

these are coal stocks, a subsaid of metals and mining these are all big cole names headlines overseas making it tougher over in europe carl referenced powell talking. he's going to do a q&a over at the kato institute's 40th anniversary onference, so mayb we'll guess et a more nuanced ia and then the conference season kicks off, which i've talked about a lot recently you'll get an enormous number of conferences today, where you'll have commentary from a lot of companies. many of them haven't talked since mid july

now wore two months later, so barclays, evercore, citi will have a big technology conference coming up. so we may get market-moving news from them in the next three, four days. if you're a retail trader, your head is spinning remember the glorious days in 2021 with the meme stock craze almost a quarter of all trading haus -- it's 17% this year, very close to the historic average, thanks my old pal larry tappen, who keeps track of this. we saw a bit of an up tick in august, but september will probably drop back down to 17% there's the america association of individual invest ore,

bull/bear index. bearishes in is almost twice as high as the historic average of course, these are sentiment indicators carl, back to you. we now a lot of sentiment is driven by trajectory of gas prices 84 straight days down. we've been very lucky, guys, with hurricanes season it's been remarkably soft. with whole say gas now 2.45, the implications of somewhere maybe even closer to 3.30. in the first six months of this year, the market traded directly inverse to gas prices. that'sing broken, to a large degree largely, i think it's what's going on in bonds right now. the two-year is back up to 3.5%. so again we're clenching up

again for the rate move. rail le good for the real economy. >> on that note, 3900 back in play a quick reminder catch us anytime anywhere, just listen to and follow the "squawk on the street" opening bell podcast. we will take a quick break the dow is down 125.

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welcome to another hour of "squawk on the street. we're live at poll 9 of the new york stock exchange. morgan brennan is on maternity leave. we had some gains, but lost it pretty quickly on the heels of some pmis. hey, rick? >> finally we get a number that's a bit of a beat our august read by institute for supply manage services expected to be in the vicinity of 55.3. comes in at 56.9 indeed that is good news

56.9 happens to be the best read going back all way to april of this year. we see what's going on today whether it's looking at the youry. or the yen at a 24-year low -- and the pound near the lowest levels since 1985, we need to pay close attention 15 basis points on the day higher for a ten-year note yield. leslie, back to you. and the day is still young, rick

they say the inflation reduction act is far and away the most consequentially dove for the auto industry in a very long time. tesla and their customers may receive close to $11 billion in incentives over the next few years. alibaba falling along with many other names, impacting around 65 million people the government also discouraging domestic travel. we'll have a live report from beijing. finally digital world acquisition corp down big, down about 13% right now, after a report that the blank check firm did not receive enough shareholder support for an extension to close that deal. more on that coming up later this hour. >> let's start with the energy

markets. opec cutting production. there was also a big financial warning from a norwegian energy giant. who else but brian sullivan to turn to for a lot of different cross-occurrence. >> yeah, a hat trick here. i'll try to blast through it number one, russia cutting off the pipeline remember, they sudden it down for maintenance, and i'm winking on that, if you're listening to the radio. they want the western sanctioning lifted there's a lot of talks about price caps italy and talking about natural gas. german storage is ahead of schedule keep in mind germany has never existed on just storage alone. there are two smaller pipelines, but overall natural gas flows are down 89% from last year, and

yes that will hurt russia and putin, too electricity prices hitting record highs in the last 24 to 48 hours goldman sachs out with a note a couple days ago saying a typical european family will pay about 500 euros a month for energy this year. goldman notes that's about a dollar 2 trillion total increase across the continent the uk, by the way, may be worse than germany they're talking about $100 billion in aid packages. opec plus really reversing the earlier output gains not material, not really substantial, but sending a signal to the market as well i reported that that was likely to happen late, about a week and a half ago

get this, what used to be called stats oil, a norwegian company, coming occupy in italy today, saying governments may need to provide $1.5 trillion in equity backstops to cover margin calls. $2 trillion in energy bills, maybe over a trillion in liquidity? suddenly we've gotten three, 4 trillion that's come up, the energy crisis quickly morphing into potential financial crisis. >> yeah, i wanted to ask specifically about though, brian. obviously there are two sides to every trade and there would be beneficiaries here as well, but what should we be and what should our viewers by looking for to identify the beginnings of a potential crisis? >> i think you have to look for the bank -- this is your area,

david. the banls more heavily exposed 3/4 barclays, and hsbc i think you also watch any of the shares, the publicly traded utilities, 31 centering providers went under in the uk many were small, but keep an eye on the billinger ones, david you know this -- if the british people are told they do not have to or cannot pay the energy bills, bus the utilities are buying on the spot market, somebody is going to pay that big. if it's not the people, at the be the utility if not the utility, it will be the government by some sort of bailout. this can't be quite bullish for many companies we'll sell as much lng as we can go europe.

europe basically got a giant ship that can take lng germany did a good job with that they'll buy as much lng as they can. that could be great for american companies. >> yeah, no doubt that's an incredibly important market. some market participants have told me lng capacity sold to those who can sometimes re-sell it the money here is going to be enormous. >> china is making a lot of money on this. here's how it works. if you sell a lot to china, china owns that lng the moment it leaves corpus kristi. you can see use marine traffic.com or one of these

tracking sites europeans are buying lng from china, whatever china is paying, call it 12 bucks -- i'm making that up, but that's probably close, they might be selling it for 50, because their covid lockdowns have reduced energy demands. the europeans are getting gas, but at what cost the chinese may be masse a lot of money. >> very interesting, brian appreciate you being on it for us we are far from done citi, by the way raising global price forecast, citing ongoing geopolitical tensions. ed morris is with us you heard brian's great reporting. what does it mean for all the

markets you cover closely? >> it means different things for different markets. the u.s. is bennetting in two different ways europe, unfortunately, migrating especially to the u.s. to seek fertilizer companies, in particular going into the southeast and southwest. we adopt think the price of natural gas is going to get anywhere where u.s. levels are in europe until 2026, 2027, when in that so the why europe suffers, and we have an election coming up this month that's italy we don't know the right-wing

rebell unions against the actions that are affecting the citizens of those countries. >> so what is your base case scenario now >> we don't know what level of conservation will be taking place, but we've always been witnessing what high prices due to the demand. we ended our gas season in the u.s., we ended with the price going down, but steered thing is when we look at overall demand for the month of august versus a year ago, a year ago when we were coming out of the pandemic and grow ing there's nothing lie

high prices to cure this appeared conservation, as we've seen in the u.s., driving less really makes a difference. >> we've talked about this all summer long. you said we still think the curve is widely overstating where we will be at the end of the year has there been any changes in that view? >> no, we're the biggest once is the accelerating global recession. we haven't felt it in the u.s., but felt the impact of prices on demapped we're seeing radically lower demand around the world. that is where the pressure is coming on prices if you look at two limits, one -- the opec meeting didn't

really mean anything total market the markets are getting softer but we're seeing, you know, a recession impacting demand opec doesn't want to believe it. they're still calling for a tight market, but i expect there's a lot of politician involved in their reported view on where prices are going. as we said, a recession could bring the price down, not to the $ 2 level we see wti at the moment by the end of the year, but well under 70 if the recession really hits around the world. things are moving in that direction. we have a lot of risks as well

>> how much weight should we put on the weather equation as well if europe experiencing, say, a milder winter? could that help kind of create some sort of a ceiling on what we're seeing or do you still thing, given all the cross-currents, that things will continue to go higher >> weather and conservation will make the big difference. the big sure is whether we'll have a hurricane season. the world has fundamentally changed the last year. the u.s. global position has fundamentally changed. the u.s. has become, on a gross basis, the largest lng exporting country in the world over the summer we've got exporting alleges much as 11 bill chron barrels a day at times.

over the summer, and that results in the u.s. depleting its inventories while the rest of the world is building them, but it also means if we have a significant hurricane season we have 2 mill i don't want barrels a day, production in mexico out for a month, 3 million gallons flooded oust gulf coast, that will have ripple effects and the recession risk even more ed, thank you. thanks for having me good to see you. as we go to break, take a look at on you road map, including new covid measures in china. 65 million now in lockdown we'll go live to beijing.

a hard truth for digital world acquisition investors. leslie will have more. then wall street is returning to the office, if they haven't already been coming in how often will they actually be there? 'ldiscuss. "squawk on the street" is just getting started. your romantic night out... involves a +4. you want your kids to have memories before they even have a memory. [sneezes]

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welcome back to "squawk on the street." jim mcdonald, jpmorgan asset management, and jordan jackson let me begin with you, jaim, is sledding september getting tougher -- >> there's no reason to expect the volatility to settle down. there's great uncertainty what the fed will end up doing, you have uncertainties in europe and china. the u.s. is the lone bright spot, if you will. >> jordan, even if we get through some of that shock, is your general view that q4 is going to end the year on a brighter note rather than darker >> i think we could enjoy a santa claus rally, but we have

to get through the mid terms first. i think seasonally september tends to be a challenging month for markets, and i think the markets are already sort of appreciating a bit of a slowdown in the economy potential hitting sometime in the first half of next jeer. i think it's going to be a choppy market, at least until the election once that clears up, i think we can enjoy a bit of a late end of the year rally. >> jim, what do you think is responsible for today's se sell-off is it the fact that u.s. investors are finally paying attention to a potential crisis brewing in europe, given what's gone on with the slew of headlines surrounding their energy situation >> i think that is a part of it. but it's also very importantly tied to difficulties this china with their zero covid policy,

without a world-class vaccine in place, the risk around china is we'll be running through this for the next 12 to 18 months i think it's a combination of weaponization of energy in europe and also the lockdowns going on in china. >> jordan, if we can expect some -- what do you think is the best way for investors to play this we've seen your typical 60/40 portfolio deeply in the red here, are there other types of hedges that investors could be pursuing >> i think investors have to remain broadly diversified and balanced we have a preference to u.s. markets, a preference for large cap. if i'm putting new money to work probably in a large-cap core type of value. we've already had a meaningful correction in the markets we

can't have short-term stints that people perform particularly well, but that could change, particularly if we have some white swans, if you will, maybe some positive news with lockdowns? china, or the energy crisis in europe there would there could be some positive data we get, but i think markets are recognizing more of the challenges were seeing, particularly this morning. >> it's interesting, jim the way niche positive date -- goldman's note this morning is what a welcome development below-trend growth, rebalancing in the job market, and declines in inflation. i assume for the time being, you agree that bad news is net-net good news? >> generally speaking, yes, part of that that was that discussed was the risks around the

earnings companies are starting to use a bit of pricing power. whether it's across rents or across wages, that certainly is welcome news that is absolutely in es for the fed to consider to start to slow their pace >> we'll find out more on thursday jim, jordan, appreciate it very much thanks we want to turn to some sad news, bed bath & beyond's cfo gustavo arnal died by due side on friday. our courtney reagan has more. >> the tragic news of the death of bed bath & beyond's cfo --

it's lifting laura crossen, and just last week the retailer did detail the go-forward plans that exclude large layoffs, store closures and financing i confirmed the various financing facilities were finalized as of september 1st, ahead of arnal's death about 40% of shares are held short, and volatility does remain high. some investors filed a lawsuit accusing ryan cohen and arnal of artificially up flating bed bath & beyond's price and personally benefiting. in a filing last month, bed bath & beyond said it was evaluating the complaint, but believes the claims are without

merit and would not comment on litigation when asked by cnbc. it is mentioned that bed bath & beyond does show it's the most mentioned individual name in the last day, with mentions spiking on the news of arnal's death the discuss does lead toward holding on to shares, or those call options, believing presumably the shares will go higher today they are down by 17%. >> not quite to the recent lows prior to the meme madness, but getting there. thank you. >> thanks. we have the nasdaq composite down we'll be right back.

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ed transports are failing to deliver any relief for investors today. the ishares etf underperforming the dow by about 4%, now we have the citi downgrade of fedex. they revised the rating to neutral, overall saying we're

note getting the freight peaks we typically get this type of year maybe that's a sign of continuing moderating demand. speaking of transports, there would be more people transporting themselves to the office now that we're after labor day. wall street is tackling the new return to office normal. post-bay day employees can work from home when needed, but encouraged to be in the office as much as possible. they must be vaccinated to enter offices in new york. most other markets don't have that mandate once in the office, things will likely look more like they did in 2019, no mask requirements, and curtailing of covid testing in the office sort of issues broad physical -- only to have to switch gears in the face of

variants and covid waves that had re-prioritize remote work, much to the dismay of the c-suite. jamie dimon, for example, has long lamented the drawbacks of the work-from-home model so we'll see, guys, if this latest in-office push will be any stickier but, of course, covid so unpredictable. we have seen this movie before, only to kind of reverse course and allow people to work from home more frequently >> once people were vaccinated, things kind of changed, but having the broad mandates, making things look exactly like 2019, we're not seeing that. i they ubs even allowed they'll allow remote work.

citi was fairly aggressive early on, but i think they changed a bit. >> it also kind of depends on your job if you're working for a citi bank branch, you need to be there to serve your clients as a requirement of that job. jpmorgan as their peer has said 50% of the workforce really falls into that category the other 40% say, they said, can do more of a hybrid model with 10% working from home exclusive, but it goes back to what your job description is. >> kind of fits with the number of people who were in that five days, i think it was 8%. i think the three of us are part of the 8%. some rarefied air. after the break, digital world acquisition, plummeting on

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here is your cnbc news update police have identified the body of belelizabeth fletcher her body was not far from where scherr was forced into an suv. the suspect has also been charged with first-degree murder liz truss is expected to give her first speech as leader of britain within the next hour. president zelenskyy addressing new york stock exchange as part of the opening bell he took a few moments ago to say

now is the time to invest in ukraine. a chance to invest, worth -- to share the victory with us. >> he too is sticking with the character look >> yes has some factors working in there we've seen in the past several cycles, he's been consistent on that front bob? >> carl, those estimates we have now are about half of what they were months ago.

still up, but about half the is 1% it was just two months ago. inert, we have a failed rally. a lot of times, six, seven, eight, we've seen the high print, and then trend downward throughout the morning we have 2 to 1 advance to declining stocks now we're negative it's 2 to 1 declines to advancing stocks right now we took another leg down around 10:00 a.m. and, again, you get this problem, not going along with the narrative. now this is the highest reading since mid july, this is high, but not panicky high

that's where not much in the way those are the leadership groups. tech is down about 1%, megacap down, arc innovations, they're down 22% to 3% i want to -- about what's going on in energy in europe, the coal names again are moving to the up side. microsoft was 280 not long ago apple was, what.

expectations of more choppiness to come >> normally on a seasonal basis, it's actually the worst month, it's the only one down on an average basis, august, september, october not a good quarter. everybody waits for november and decent, january generally when you get the three best months together of the year the probably is seasonality may not mean a lot when you have a situation where the fed is still actively in the higher for longer warpath mode. leslie >> good point. thank you, bob

there is a high-stakes vote taking place that's the spac that's emerged with trump media and technology group group truth social the spac is asking its shareholders for vote in favor of the one-year extension to finalize the tie-up. the extra time is needed, because regulators are still probing a set of issues. reuters is reporting that dwac has already failed to secure enough shareholder support they cite people familiar with the matter that's causing shares to tumble today in trading logically speaking, though, if you look -- it's currently trading around $20, they could vote overwhelmingly, because they're still trading well above the cash -- but a large portion

is held be rye tailer investos this spac needs -- without that, dwac, if they have no other mechanism to extend and we'll discuss this in a little bit, you know they will have to liquidate and cease operations so a special meeting will be held today to see if in spac it has indeed garnered enough votes. if not, they have some recourse to continue extending. >> my understanding is the sponsor can pay $3.75 million to the spac, essentially, so it increasing the value of your liquidation ever so slightly, that could buy them another three months it's not like people are voting against, and many may just not be aware -- may not have sent in

their proxy or voted the way -- at all, so if you don't get to 65%, and if for some reason sponsors should decided not to put that moan ahead, you're looking alternate ten bucks. >> which is why basically it's based on a turnout issue it's an arbitrage, if you look at where it's trading now. any logical person would vote to extend it from here. that he, of course, depends on the probe. >> again, i believe it would be possible to one against try to solicit to extend by a year. >> i think there's a point, too, where you can't go bedownthree or four years with they spacs, the way these rules work. >> and they're brand-new rules

essentially given the extreme interest that's developed in the last year and a half >> guys, we're making progress in unwinding some of the losses. speaking of going public, we want to check on shares of volkswagen they are planning to list porsche in one of the biggest ipos of the year in frankfurt. it could value more than 85 million euros. more "squawk on the street" in a moment go, go, go. sorry. nope. okay. fresh donuts - hot coffee! they deliver real time data and business forecasts when you need it. i think it was fine how it was. (air tool sound) to help you stay ahead of the curve... or you could use workday. the finance, hr and planning system that helps cfos make better decisions faster. on the other hand, we had a great fourth quarter. for a accelerate your decision-making world. workday. for a changing world.

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welcome back opec tapering back production. our next guest heart approximately one third of the firm's assets in energy, infrastructure and renewables. joining us to discuss, al hribal it's a great day to have you

you invest in energy infrastructure, energy private equity, upstream, midstream, downtreatment. we hear that the culprit is the lack of investment over the last decade or so do you think that is truly the case and is there the will and capital out there to reverse this >> yeah, it's a agree question i think we have underinvested and continue to be under invest when you have no less than elon musk saying we need to use all means at our disposal, it's not an oar, it's an and. over the last ten years we've definitely seen underinvestment, partly because of the capital al days dynamics that at this point fewer permits granted, energy companies be very yew dishes

with their capital we're going to need a sea change in terms of the political environment to make the change i guess good news for investors from a u.s. perspective, that makes us very bullish on u.s. energy, because to some extend we're going to exceed in spite of ourselves, because we're blessed with an incredible amount of natural resources in the u.s., and the world needs those natural resources. >> what about the political will with permits and so forth, but there's also the typical limited partners that would go into your funds, they've been shying away from these assets due to pressure in their constituents there was frequent data that found out it raised $3 billion -- if the first half of the year, 40% than just the same percent last year. so, is there capital that can actually go into some of these projects to reverse of

underinvestment we have seen >> well, there's certainly capital out there. you bring up a great point we're talking about energy transition i think if not all of us, the vast majority agree that that needs to take place. the question more is really over what time period can that reasonably take place. so, i think ultimately the capitalist system wins you find pockets the capital that actually want to invest in these companies. i also think that pension plans and others over time will take a more reasoned approach to the and, not the or, and that energy transition does need to take place, but the time frame over which we can reasonably do that has to be realistic. short answer, yes, i think there is capital out there

i think the returns are too compelling to ignore, and i think pension plans and others are -- and it's a good place to go, it will go there >> alex, it's david. i wonder, did the inflation reduction act change any of your views in terms of how you will allocate capital will it result in you taking a look at things you might otherwise have >> david, a great question we're playing across the full spectrum of the energy sector. as leslie mentioned, infrastructure renewables, we think there's opportunities in each i think the inflation reduction act, you know, does provide some incentives on the renewable side it doesn't change anything that we were already doing. i don't think it changes any to traditional fossil fuels

where are you seeing the most? or is it more on traditional energy i think there's tremendous opportunities in all of them traditional fossil fuels, as well as renewables all have to play a significant roll. so we're playing in all of them. we see tremendous tubes from a u.s. perspective not only is the u.s. a safe haven in terms of the global order, and i think some of the dollars we'll be looking at already coming from foreign sources, but also, you know here's the natural and know, as a previous guest mentioned, we

are already a large exporter, but we have the capable to do far more i think we'll see this play out in terms of nat gas and lng. it's certainly reorganizing right now. we would not go back to business as usual i as usual. i think we'll see that play out over the next five to ten years. >> interesting the world order reorganizing right now. we really appreciate your perspective, al. thank you for joining us today. >> thanks for having me, appreciate it. as we go to break a quick programming note, starting tomorrow "techcheck" will be live from the code conference in los angeles where the speakers include tim cook, andy jassy of amazon we'll be live alongside kara swisher and the crew dow almost erasing all of its morning losses "squawk on the street" will be right back

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comcast business internet customers. so boost your bottom line by switching today. comcast business. powering possibilities. ™ welcome back to "squawk on the street," i'm contessa brewer, stocks are well off of their low, the dow is hovering around the flat line the communications services sector is still lagging as a

number of growth stocks underperform media players like netflix and wa warner brothers are among the worst performers tech and media giants, disney, alphabet, all of which are down a percent or more. carl, back to you guys. >> contessa, thanks, contessa brewer. after the break 65 million people impacted by new covid lockdowns in china. meantime, the nasdaq is down seven straight sessions. we haven't done that since a nine-day loss in 2016. back in a moment

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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 china implementing new covid lockdowns and discouraging travel ahead of national holidays about 65 million will being impacted eunice yoon is live in beijing with the latest. eunice >> reporter: thanks, david according to the nation's top health authorities 65 cities are under at least partial lockdown. megacity tongue-du has extended its lockdown for most of 20

million residents until wednesday. the city of shenzhen has 18 million people mostly locked in with no end date the southern city of guiyang with 6 million people imposed a lockdown over 1 # 32 cases it's a production base for tesla supplier catl as well as byd fortunately the numbers are heading in the right direction they are coming down tongue-du reported 90 cases. shenzhen, 36, and guiyang, three. maintaining the curve conflicted with a 6.8 magnitude earthquake which shook the region the health authorities have had to contend with reports that building managers have been blocking people from running out of the buildings beijing also has tightened travel restrictions. as of this week there are to be no departures, and no returns to

the capital from any district or county that has had one positive case in the past seven days. so no surprise that the authorities would be discouraging people from traveling over the midautumn festival holiday which is coming up this weekend. it is usually a big family time for a lot of people. guys >> eunice, we got about a minute you know, why is china persisting in its zero covid policy when so much of the rest of the world has essentially moved on >> reporter: well, i think that beijing has been selling this covid policy as a big winner for china in the very beginning china saw it as something that made it look as though it's much better in the way it manages its lockdowns. its covid infections compared to the west and so, you know, there's a lot of questions as to whether or not this policy is going to change, maybe after president xi, assuming he gets a third term but then there's also a lot of

folks who think that that might not happen, and in fact there was an indication tonight that suggests that his policies might not change president xi just announced that he is vowing stronger -- stronger state-led systems to have -- create break through core technologies. so another very controversial policy. >> eunice, thank you, eunice yoon in beijing for us that will do it for us here on "squawk on the street. "techcheck" starts now good tuesday morning, welcome to "techcheck," i'm carl in any event nil la, with jon fortt, and deirdre bosa. nasdaq seeing its longest losing streak since the pandemic began although the s&p and dow have turned around. why tom lee is still bullish. plus, the biggest deal of the year, probably not your first guess, why one of our guests cease to keep an eye on private equity this hour. investors looking r