it is tuesday, september 13th, 2022 "squawk box" begins right now. welcome to "squawk box" here on cnbc. we're live from the nasdaq market site in times square. i'm rebecca quick along with joe kernen and andrew ross sorkin. so far, the u.s. equities are looking up the dow futures are up 150 points s&p futures up by 20 nasdaq up by 60. if you are watching treasury yields this morning and this is something to keep track of before and after the cpi at 8:30 10-year treasury is 3.318% oil prices are lower than recent months if you look this morning, at least this hour, wti is sitting

right at $88.83. joe mentioned the big story which is inflation you have the august consumer price index due at 8:30 a.m. eastern. expectations are high or maybe low because polled economists expect the headline number to fall by .1% by month over month. that would be something to see the decline. if you see the turning of the tide, that is the expectation. you are looking at an 8% gain year over year that is a slight cooling from the previous month the core come poen ebt is expected to rise wti has ripped through come down significantly. year over year, you are looking at 6% if you are looking at the

core numbers >> you just gave us eight numbers. there is something for everyone. >> it matters. every number will be analysed. >> i saw something that is a really big position long based on the notion it could be a friendly number. that is purple it is a beautiful purple. >> thank you >> i can't not mention it. i was immediately thinking -- >> royal >> no, barney. barney >> the big purple dinosaur i thought you were going to say queenly. >> i think purple. i think barney is he still happening with kids? >> no. my kids weren't into it. >> sad when icons -- >> when a loved one. >> fade. >> i thought you would say it is regal because purple was the hardest color. >> big with the royals

>> you have to extract it from snail shells only wealthy people could do it. >> that? i didn't see you -- >> i didn't. i actually learned this on queen elizabeth coverage i learned it this week >> from snails >> i didn't get that deep. >> sorry sorkin >> let's talk to twitter twitter blue in corporate news, looking to approve the $44 million takeover bid musk is in the process of getting out of the deal. early votes show investors will approve the transaction as you imagine by a wide margin what else would they do? musk owns almost a 10% stake and not expected to vote his shares. in washington today, twitter's former head of security, peiter

zatko is testifying against the company. now musk trying to use those allegations to get the takeover offer dropped. senator dick durbin is chairing the hearing. we will speak with a lot of folks, including him, about this at 8:00 >> if they approve the deal, october 17th is the trial? these things are moving on straight tracks. >> they happen anyway. if they didn't approve the deal, you need to have a trial sure the trial will happen. >> october 17th is the delaware trial. >> we should move the show down there for a week >> i think the same thing. >> it will be riveting i don't want to say that i'm not actually sure it will be riveting anything that is riveting is probably filed in the pre-motion

papers i will bet money the judge already has a clerk working on the decision in advance. there is an element to theater, probably, to some of it. >> because they know so much already. how long do you think it takes >> a week. >> for the decision after. >> i think there are two ways she could do it. there are times when the judge will rule from the bench literally the trial could end and she could say this is my decision then she could effectively file a longer written decision or she could probably pull it off in three or four weeks? that's what i said in most cases, you have the clerks already writing elements of the decision with advanced stuff ready to go. she seems to be ready to get it done quickly.

>> because time matters. >> does time really matter it is ann interesting question. time matters if you are a shareholder of twitter but in the grand scheme of the universe she says time matters. that's where we are. >> does time go backwards? talking about universe type questions. >> i hadn't gone there >> time space continuum. >> the time space continuum. >> he said he didn't want it because there were too many bots. >> he said that. i don't think that was why he didn't want it >> it just seems like that plays -- can he be deposed >> i guess he could be i think the bigger issue is not -- how quickly she columbus down comes down with the decision is one thing.

then he will appeal and go to the delaware state supreme court. that could take a little bit of time they act pretty fact the other question is does he somehow turn this into a federal case we talked about this before. if he can turning it into the federal case and leverage the whistleblower, you could string it out for a long time. >> i don't think we want to go to delaware. we like viewers. >> you know? >> i don't know if that many people -- i saw them wear occupy mars shirt >> blue arresorigin >> i saw that. internal combustion engines. >> nbc news had a former astronaut who explained what it would feel like if the blue origin had been manned it wasn't. there was no crew.

if it was manned -- first you start to feel the deceleration if were you on board then you would feel the massive g force that pushes you into the back of the seat because the blasters to get you out of the way takeoff. then you feel weightlessness then you would start to fall and then jerked back when the parachute deployed by the way, it landed on its head >> do you remember the video of the ferrari we used to play the video of you sitting in the passenger seat. similar. >> that was not similar. >> what are you doing? >> i do not have all the right stuff. >> you were going whoa you fell and then you stopped. the g forces pushed you. that was fun we used to do things like that >> we should get out there the pandemic has really --

>> yes now the risky thing we do is showing up to work >> in times square that's something >> all right peloton. you got a peloton treadmill? >> i do. >> i'm in the market for a treadmill. they are expensive >> that's why you should get this >> i need padding for the knees. >> that's what this is the best thing rolling i'm telling you. peloton tread plus which i don't think they sell anymore because of the situation with a children is basically a poor man's version of the woodway or better a couple thousand bucks. >> a big management shakeup. the two executives are leaving the company along with commercial officer kevin i'm glad we got the names in there. oh, kevin is out as well

they don't foley served as a ceo for a decade we used to have him on before stepping down this year. barry mccarthy has been trying to turn around the business with changes with equipment rentals and selling on amazon. sounds like they need to push the treadmills if they are that good peloton shares benefits from the pandemic lockdowns that kept people away from jagyms stock high in 2020 >> and i listened last night and kari firestone said people are riding less often and not as engaged. >> i'm riding less often totally. >> someb of the other gyms are raising prices. >> riding on the peloton less often. you can run outside. >> people ride on treadmills

a lot of cheating on treadmills. you have to -- >> the larger point is people are ruseturning to gyms and bac to the office. less time to workout if you look at the day-to-day basis and interaction of the peloton hardware, it is not the same that's a problem >> harder story to sell. >> the other question is if they should pursue the growth strategy they are still on the growth story strategy they want to be a growth story you could probably run this business for cash and actually if you decide you weren't trying to be some crazy super growth company and it could be a different story. it could be a successful company. may not be a wildly successful grower it could actually be something they just focused on dealing with what they've got. instead -- >> they were never just one of

those. a lot of companies like that they were never like peloton >> you have to decide what you really are. >> okay. i was there yesterday. i'll be there today. i have to. >> the gym >> yeah. i hate exercise so much. someone has to yell at me. >> you have to go. so this purple is made from the mucus of several snails. >> cool. >> there is now. this lasted until 1453 after the fall of constantinoble this is from squawk-epedia coming up, we'll talk cpi. we've got ppi coming pe we'll talk to a couple of money

managers as we head to break, look at the pre-market winners and losers. stay tuned you are watching "squawk box" on cnbc

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applovin abandoning the takeover bid for unity software they said we are not making another bid. unity software down 1% keep an eye on shares of vm ware s.e.c. charging the company was misleading investors without admitting or denying the findings vm ware consented to the cease and desist order >> app lovin like mclovin >> yeah. that's what i thought. >> of course everybody does if you think that's a good name we were expecting the latest read on inflation this morning fake i.d with august cpi due out at 8:30

a.m. we have greg branch at veritas and kari firestone at rss management both cnbc contributors kari, looking through your thoughts and musings about cpi it is an important number. people are expecting a pretty good number. overall, your trading range for the s&p is 3,700 to 4,300. my bet with el-erian, he wins at 3,600. i win at 4,400 we could be here for eveever wi the range. how long does that last and resolve above or below the high and low end of your range? >> hi, joe it is about inflation. we know the focus is on cpi. people hope it will be 8.1 or

lower. nationa until we have more clair rity ad how many hikes over how many periods of meetings they have, it is a trading range in our opinion. that is a broad range. remember, the market fell 10% from august 17th highs now it was oversold and come back about 5.2% just in the last week because we had some descimation of technology stocks that's when investors started to buy again and were enthusiastic about prices coming down on gas. we know gas is down and hotel and air fares are down other commodity drops. retailers are selling discounts on inventory the numbers should be good it doesn't mean we are out of the woods. interest rates are going up and we have the strong dollar and headwinds in europe with

recession and inflation prices s>> greg, it is interesting how the market tries to fool people one way or the other head fake. we had the nice summer rally in july and august from the june lows the pull back made everyone say we are going to new lows i don't know if it was trying to take people with weak hands and if you are not committed, we are going to low hands again you are committed to the bearish perspective. are you positive at all given the action the last couple weeks? >> maybe a little bit incrementally, joe that is only because some of the negative catalysts that i expected this year are, in fact, behind us. we are no longer wonder foing if the fed is raising 75 or 100

bips some negative revision cycle is behind us. when we look at the third quarter numbers, estimates from the bottom up are down 5.4% for the quarter which is twice the normal 10-year average with reinves revisions of the first two months of the quarter. the street and and lalysts reacting that is not the same with the 3,t 3,800. there ar catalysts we have yet to encounter. the rally in the middle of the summer is based on unshared reality we reached peak fed hawkishness which they clarified after jackson hole and they were clear. they think it requires a 4% fed rate to have meaningful impact on inflation i think this number will show us

exactly that despite maybe 50 basis points on the overall, which you could argue energy is effected by vectors outside of the economy in fact, you could argue that maybe even lowering the strategic reserve had an effect on that particularly we go into the winter heating months. core will be the same. driven by the housing component. we will see little impact on the job market to date which begins them the breathing room to be more aggressive and get to the 4% i think despite the wall street reacting favorably to this, there is very little to show thus far that fed action has had a meaningful impact. >> greg, i don't know. that's morning in america. that's as positive as you have been in a while. i'm taking this as a major red

letter day to me, it doesn't sound like you think we're going to new lows, greg >> we will retest the june lows. we will retest the june lows at the end of the day, i'm not sure everyone has gotten the message there is more behind the 75 in september. i'm not sure everyone understands that the $60 of earnings in the s&p is too high and that needs to come down. we well retest those we will look at 2023 where we probably had mid single digit earnings growth. mid singles off 220 putting us at 230 17 times on 230. right now, for next year, i'm looking at 4,000 that's about where we are now. so, if what you are saying is that i'm not at 4,700 predicting 3,800. yes, i'm more positive >> kari, did that dissuade you

or persuade you? it is true, energy is one thing, but there is stubborn parts of the inflation picture that probably aren't going to improve that much. >> we know that. we understand that rent, for example, is sticky and wages are sticky when the market gets to a point where it is selling at 17 or less times earnings and i understand earnings are coming down, i think it is an option that makes sense for people. particularly when some groups get oversold technology and energy were the top sector notice s&p. t that is an unusual pairing. you can look at earnings in the next 6 to 12 months and say with more certainty these stocks are trading at a price that we think make sense because we know the cash flow and prices on oil. tech stocks have been hurt so hard this year and names like

auto desk and adobe and even on the payment side with paypal and amazon and consumer disc discretionary. those have had a tough time. consumers over the next year can see reasonably good certainty they will hit numbers because they are taking numbers down and cost control seems to matter more for companies that were high and fly a couple of years ago during covid i think greg is too pessimistic. >> greg branch, thank you. kari, good to have you as well you are so close to getting out of this, kari, without any comments you are right -- >> nothing >> it is safer to come in with what's going in times square than to stay at home that's amazing we have stuff happening behind us that would just curl your toes. >> i had to get out of the house. >> i'll take my chances at times

square all right. thanks >> take care coming up, workers at a couple of well known companies pushing back on return to office ca calls. as we head to break, kr cryptocurrency bitcoin here and eth on the big merge. stay tuned you are watching "squawk" cnbc >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. ♪♪ i don't accept this. i can't do this anymore. impossible odds, save the world. i'm done. what do you have for me? a new way to transform our agency. strategy to execution. oh, looks my laces have come undone.

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among those firms, new york times and nbc news some union members at the times and nbc news digital properties decided to push back and continue to work remotely despite management calls to return this week the times union says it has nearly 1,300 union signatures to stay home. there are 2,000 members in total. the head of nbc news digital unit have 215 members vowing to remain remote. the spokesperson for the times and nbc news say the companies remain committed to flexible and hybrid workplaces. this is where you get to the point where what started as emergency measures with the global pandemic and now an expectation for workers. the idea you have to negotiate with me to come back into the office that is what companies are

worried about and now taking place. >> i'm a dinosaur. i admit it i'm flabbergasted. we had the horrible pandemic people had to stay home. when it is over, you come back i don't get it >> i understand the desire for flexibility. i don't understand when the boss says you need to come in and you say no. >> it is hilarious you let me do this never let me do it now i'm not coming back. >> interesting times it is emblematic of the shift we are seeing right now in the negotiation. >> one note on this. a number of the union contracts are open this is not -- just to be 100% clear. i don't believe this isis employees saying i don't want to go to work it is years working without a contract we want a contract this is another negotiating

piece of leverage. >> where is the beginning of the negotiation? the fault at home or at the workplace? >> i think it is still get us a contract most of the folks, it is get a contract >> you know who gets to stay home hundreds of people at goldman sachs. awesome. >> getting laid off. >> you want to stay home enjoy. >> it's emblematic of the discussions taking place at workplaces everywhere. >> i spent three hours with my nose to the grind stone so i can talk about it. talk about 12-hour days. >> you might want to keep your mouth shut when we come back, we will head to washington where the whistleblower is preparing to testify before congress today. someone else preparing, too. as we head to break, we will look at yesterday's s&p 500 winners and losers

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good morning welcome back to "squawk box. live from the nasdaq market site in times square. we are in the green. 185 points on the dow. nasdaq up 762 points. and look at widespread security issues at twitter with the whistleblower testifying this morning we have eamon javers in the suit you want a person like me on the wall preventing yoga pants. >> you want me on the wall, joe. standards of civilization will

collapse we have to hold the line let's talk about today up on capitol hill nobody will wear yoga pants. we hear in person from peiter zatko. he goes by the nickname mudge. he alleges deceitful or mis misleading communications with board members and users and shareholders of twitter. he focused on four main crit criticisms lack of software security and too much access to sensitive data by employees. internal process issues and security issues impacting user data the biggest issue is misleading the board about the problems at the company. the dramatic testimony we expect before the senate judiciary committee today comes against the back drop for struggle of the company with elon musk

looking to get out of the $44 billion acquisition attempt. twitter looked to minimize the zatko allegations and saying he was terminated for poor performance. they call the allegations a false narrative. musk is looking to get out of the company and changed his mind we can expect mudge to be asked about the settlement twitter paid him $7 million in june over lost compensation. he signed a nondisclosure agreement at that time whistleblower complaints and testimony are exceptions to the agreement. he can talking freely today and you can be sure members of the committee will ask about that. back to you. >> all right eamon, thanks for that do you think we could do a w week's worth of shows on

twitter? do we need other things? would we have viewers? >> it is an incredible company drama inside the company is intense. drama on the platform is intense. it has taken over our lives. particularly those of us who live online lives in the media there is a multiple echo chamber on twitter all times of various folks talking to each other. it is fascinating dynamic. i bet we could do a twitter week i'm up for it. >> the sub story of elon musk and everything that happens based on all that. poor shareholders are saying please. >> i can't understand about musk why he thought it would be a good idea to take over the company. he is on twitter a lot he uses the platform and sees the value. why would you want that headache >> make that statement i want to end the way it is run. there is real money involved even if you have $200 billion,

it doesn't mean you are ready to lose $25 billion thanks, eamon. why some on wall street are bracing for layoffs because it is happening we get our take on the markets ahead of the key inflation data. she's towering over times square you are watching "squawk box" on cnbc (vo) you can be well-dressed. you can be well-mannered. (man) oh, no, no, after you. wahoooo! (vo) you can be well-groomed.

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and mentoring a teenager — your life is just as unique. your raymond james financial advisor gets to know you, your passions, and the way you help others. so you can live your life. that's life well planned. welcome back. the futures are up this morning ahead of the cpi coming out at 8:30 a.m. eastern time expectations on the headline for the month over month are expected to show a drop in consumer prices. we will see if that carries out. down by 0.1% the dow futures are up 200 points s&p futures up 26. nasdaq up by 80. goldman sachs is recportedly preparing for layoffs.

according to deal logic, the deal making this year totals 1.2 trillion dollars that is compared with $2 trillion a year ago. it sounds like a big number until you see the year ago for more, let's bring in lauren hursh and leslie picker. welcome. lauren, let's start with the details. what is happening here >> goldman sachs historically laid off under forperformers bottom 1% to 5%. they put that program on hold during the pandemic. as you are aware, the deal making frenzy was out of control. they have too much work and not enough bodies and not only did they not layoff people, they hired people we turned a chapter in deal making environment david solomon said in the last earnings call that goldman had that the pipeline has slowed

i'm hearing that from the bankers i talked to. goldman is reinstated the program and they will layoff probably closer to 1% of the work force than 5% it is significant. it is telling us where we are right now in the economic environment and how the ceos of the banks are viewing the year ahead and conceding and not going to be as good from the deal making perspective from the past two years >> i think we realized that. i think the firms stepping in and making changes after tiptoeing carefully around all of the employees for a while especially during the pandemic lauren, do you expect this to be the first of many on wall street >> absolutely. that is something the bankers have been talking about. every bank has a list. goldman tends to go first. this will pave the way for other

layoffs across wall street >> leslie, how deeply do you weigh into this? back to business, but also a recognition that it has been a very difficult year on wall street >> if you look at the fdic data net income across the largest banks in the country, five largest dropped 8.5% investment banking income dropped about 38%. it is no surprise that they would be calling their work force to keep up with the market is doing it is also worth noting it is not just investment banking with layoffs. mortgage bankers are experiencing similar as the market has taken a turn with rising interest rates. this is according to sources that i've spoken with across wall street and it is widespread across the businesses within the firms. >> i guess we can try to put this in the broader context of what we have been talking about this morning and several weeks

the return to work so many companies saying post labor day, they want employees back in the office this has been a workers market for some time. is this a one-off in the industries where they have seen a severe drop? >> i think you have to wonder what attrition has in store for the companies as well because as lauren reported and lauren mentioned, goldman sachs is looking at closer to the lower end of the range, that 1% to 5% that they could be laying off they historically laid off how much does attrition play a role how much is people saying i don't want to come back to the office i want employment elsewhere. the job market will tighten and it is still quite strong people are potentially looking elsewhere for employment as well it is a combination of both layoffs and attrition that these ceos are grappling with. perhaps they don't have to

layoff as many people because there is a natural flow of these things >> lauren, how about that? these bankers have been ones that have been forceful. banker ceos saying we need you here in these seats. to this point, they had workers who pushed back saying we're doing this work and doing things and working really hard. you need to take more care is that the end of the kinder, gentler wall street? >> i think it is to an extent of the kinder and gentler wall street leslie's point is something i have heard this doesn't completely solves the attrition problem. does it give david solomon the ability to say you better be back in the desk fyi, we're doing layoffs, sure they still need junior bankers will it be the vps for not

bringing in business this shifts the dynamics back to the c-suite. it doesn't shift it from 0 to 100. i think it is 20% if you want a figure on it >> lauren and leslie, thank you. lauren, congrats on the stoop. okay coming up, oracle the latest to blame the dollar for the earnings we will have more when "squawk box" comes right back. but to connect to all your clouds, you need more than technology. [watch: 50 feet to pin.] well that's not fair. you need cdw to implement vmware cross cloud services. a portfolio of multicloud solutions. it'll simplify workflows, speed innovation, and secure all of your applications. how did you get here?! [watch: the backdoor is open.] vmware makes connected multicloud possible. cdw makes it powerful. ♪♪ the ey entrepreneurs access network

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(police radio call) (sirens) (news report) (sirens) (news report) welcome back to "squawk box. oracle posting earnings, and blaming a stronger dollar and said that would continue to be an issue for the company the dollar index up about 12%

this year. take a look right now, we're at about 107.80 and kathy, what do you think, we have a lot of currencies moving around obviously what we are seeing in europe and asia, and let's talk about the dollar and the strength of it or the lack of it >> this is a big year for the fx market, and we have seen an incredible expansion and volatility in fx, and that's causing a lot of pain for companies across the globe a lot of companies have become complacent with fx hedging, and they are starting to seat consequences of it, and if they start it's a little late, and the u.s. inflation data coming up in an hour and a half or so and we may start to see the dollar get back some of its

gains as central banks start to slow their tighten cycles. >> where do you think the dollar will be in six months from now >> probably lower than where it is, because if you think about it, what has been driving the dollar higher, and a lot of it is from the aggressiveness and the underlying strength of the u.s. economy inflation -- they have been wrong on inflation for a long time and are trying to catch up, but with today's inflation data, and powell made it clear on friday they were going to flinch, and we are seeing the categories, and we know gas prices are lower and car prices are lower and truck prices are lower, but airfares, and there could be a situation where the fed said they are not going to have a recession but see a soft landing, be as long about growth

as they are about inflation and that's what i fear, and that's why i we are going to be at terminal rates six months from now, and all of that is going to feed into profit taking in the greenback. >> so what is the trade? is there a trade that you think makes sense in this context? >> well, keep an eye on the yen, and the dollar, it seems over stretched against the gains against the yen. the -- a lot of financials are being effected, and i also think that in the longer term we are going to see more strength in the canadian dollar as well. >> what about the euro

what about the euro and pound for those of us that like to make a trip to europe these days >> euro dropped, and i think that's the bottom that we have seen, and we are above parody right now, and the bank of england has been more realistic about a recession, and i think they are going to manage the margin policies more appropriately, and so i think the euro, which, you know, both the euro zone and uk are worried about tougher times ahead, and we are probably seeing the bo bottom of both currencies. >> thank you when we come back, bank of america's savita subramian

and in the dow right now you have american express leading the way, and on the opposite side of things you will see dow, travelers and p & g., and the dow is up by 228 points right now. stick around this is "squawk box," and you are watching cnbc. will be one of partnership and trust. i am a fiduciary, not just some of the time, but all of the time. charles schwab is proud to support the independent financial advisors who are passionately dedicated to helping people achieve their financial goals. visit findyourindependentadvisor.com

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good morning futures rising as investors await a key inflation report ahead of themeeting, and we will find out where you should be putting your money to work. a busy day for twitter as shareholders approve a vote to the sale to musk as the whistle-blower heads to capitol hill and then we will get an out look and talk housing trends. the second hour of "squawk box" begins right now good morning, and welcome back to "squawk box" here on cnbc we are live, and take a look at u.s. equity futures right now, we have green to show you, and

the dow looking to rise at 239 points right now, and the s&p 500 up about 31 points treasury yields right now, and the ten-year note sitting at 3.20, and crude looking at about 88.98. and then crypto, ether, we talked about the big merge this week at $1700.32 >> that's the lowered range and s&p is at the high end -- they are so correlated, it's amazing. the company launched a bitcoin trading business in 2018, and earlier this year it started

letting companies add bitcoin to the 401(k) plans it manages for them, and the "wall street journal" reports it's bringing crypto to 40 million brokerage accounts, and that could be significant for crypto, you might think. and then the former employee of twitter alleging extreme deficiencies by twitter relating to privacy and moderation, and twitter shareholders reportedly voted in favor of elon musk's takeover of the platform, and there's a change and share holers can alter their vote at the meeting. we have two big guests coming up to talk about today's hearing, we have walter isaacson, and then coming up at 8:00 a.m.

eastern time, senator dick durbin will be joining us as well also a story we have been following for days now and the latest on what could be the latest nationwide railroad strike since 1991, and all of this is coming with a deadline approaching friday it could bring huge swaths of the u.s. supply chain to a halt and could cost the u.s. economy $2 billion a day, and the white house is stepping in and urging railroads and unions to reach a deal congress would likely intervene to block the strike and then the railroads and retailers, growers and other industries are largely urging lawmakers to implement the terms laid out by the presidential emergency board it released the recommendations last month to try and bring both sides to a deal. this is incredibly concerning for the economy to see what is

happening, and some of the railroads are saying they are stopping shipments of hazardous cargo and sensitive material, and chemicals that is important for the pharmaceutical business as well, and the last time there was a nationwide strike was 1991, and congress pushed through a bill stopping it a day later, and george bush signed it immediately, and then in '92 the same thing happened. the white house panel came out and recommended wage increases of 24% between 2020 and 2025, and a 14% hike immediately and five annual payments of $1,000, and two of them retro actively, and some of the unions would like to have paid time off for wel wellness checks. >> it's impact on inflation.

>> it's shocking that ten of the unions settled and agreed to terms, and there are two left and they represent 66,000 workers and it's getting down to that day, and the railroads started initiating this where they stopped the shipments saying they don't want the hazardous cargo to get stuck on the rails. >> for a democrat it's the tough position and administration as well, and you want wage gains, and you don't want to be presiding over the inflation numbers. >> amtrak is going to stop some of its longer passenger routes because amtrak only controls the rails between boston and washington and everything else they use is controlled by other railroad companies, and starting today they will end three of

their longer distance journeys and hold off while they await these things to come through >> remember the golden age of the rails never really went away, and it goes back to the late 19th century, but is it not the best way to go between here and d.c. -- you fly. >> i love to fly >> you get stuck in weather. >> i have got stuck in traffic on the runway. >> on the amtrak, they get bison chili -- >> let's get to dom khu. >> thin premarket trading at this point, and the high-end

fitness maker is seeing its co founder depart the company, and he was formerly the ceo of peloton, and then he moved into the executive chairman role and he will be replaced by current board member, karen boon next up, you have shares of oatly, and this is due in part of analyst who downgraded the stock to neutral rating, and they cited among other things what is expected to be a volatile consumer environment. and rates, of course, ticking slightly lower this morning but trending higher in the last few

weeks. and jpmorgan chase and back of america and citigroup, they are up fractionally. >> how did you phrase that what did you -- >> plant-based milk alternatives >> you don't call it oatm milk. >> oats don't lack tate. >> coconut milk looks like milk. >> whatever it does, it's not working for oatly right now, is it >> if you look at that, and i just remember when it was a $15 stock, and $3.24 is where it's

at right now i would say this, i was told -- i was told by my doctor i should drink more almond milk because it's better for my heart and then i was told almonds are tough because of the drought conditions -- i don't know what i am morally supposed to do. >> paper or plastic bags when you get to the checkout. >> i only use reuseable bags, because they are now charging in this area, so i always have the plastic bags >> all right see you in about an hour >> you got it. when we come back, inflation and the housing market, what today's cpi data might tell us about where rental rates could be headed. in the meantime, let's get a check on the markets you will see the interest keep

picking up and the nasdaq is up by 103. there's a lot riding on the data we will be getting at 8:30 eastern time, and that's an hour and 21 minutes from now. you will look at the cpa, and expectations are for a softer enough, a decline of 0.1%. we will see if the number delivers "squawk box" will be right back. power e*trade's easy-to-use tools like

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welcome back to "squawk box. news on the red-hot rents we have been seeing and signs a fall chill may be coming diana oilic joins us with mere >> apartment rents are rising across the country, and asking rents for new leases rose in august, and the gains were five times that at the same time last year precovid the average monthly rent in august was 0.2%, and now it's down 16%. just 17 of the largest 150 markets saw annual rent gains go up, unlike the for sale housing market, landlords still have

pricing power, just much less now. there are some markets raising red flags. phoenix, which really overheated recently saw asking rents fall in august, and the same holds true for las vegas, and jacksonville and ft. lauderdale and orlando are also seeing faster moderation in rents these are markets that saw rent gains in the 20% range in the past two years, and markets not seeing slowdowns are in the west which did not see gains either >> faster moderation that's a slowing, isn't it >> yeah, it means they are not going up so much like the last couple of years. >> i like it thank you. joining us for more on the housing market is logan, the

lead analyst at housing wire you see similar things in the tea leaves, i think, although we're at levels that do reflect not a lot of supply and quite a bit of demand still. >> well, rental vacancies have been falling for many years like total inventory for home buying, but the supply is increasing and even though wage growth really picked up, the growth rate of rent inflation cannot sustain itself, and on cpi tuesday, core inflation is -- shelter inflation is 23% of the component and 25% of that is rent so it lags the cpi data but i think it will be a bigger story in 2023 when the growth rate is slowing, and historically shelter inflation doesn't go negatively

nationally >> like so many things, logan, it's supply and demand it's very simple i think everybody should take a economics course demand, we need to gauge whether the fed continues and we go into a slowdown or recession, and you have to look at both sides, don't you? >> yeah, you know, the fed really can't do too much in terms of getting multifamily construction out there i know raising rates may not help that in the future, but we have building a lot of apartments in the last two years, and some of that is coming online. the markets that are cooling off that might be red flags are the markets that i am excited about because more supply is coming up the best way to deal with inflation is to bring more supply on to impact that, and that, i believe, is currently happening. we won't see it in the cpi data until six months from now, but

it's a positive for the united states >> does the strength or weakness of a local market depend on just how attractive the area is for job growth what are the best areas and worst areas? >> well, areas like phoenix that had so much migration, and even parts of the u.s. that had migration in there, those areas were not ready for that much people moving in and employment, and those wage gains or those incomes that came into the areas that pushed home prices and rent inflation, that can't sustain itself for multiple years. so the growth rate slowing down should have been expected by everyone, and when you get more supply, that will help as well >> logan, if energy is going to help the cpi number today, when do you expect -- you talk about shelter inflation being 43%, and

when does that start to be a positive for the fed in terms of efforts to bring down inflation? when do you see that >> i believe by january or february it will be a little more noticeable, and cpi shelter inflation lags about six months, so even though it was declining earlier, and it was already picking up, so this is definitely a 2023 story, and hopefully the fed understands this but they are focused on the second mandate, which became their first mandate, and it's price stability, and they don't want to make the mistake of raising rates fast enough. >> let's talk about housing. mortgage rates, the rise there, is that starting to have an effect >> absolutely. the growth rate of pricing is

already falling, and the data lags and we see supply increase. the only issue with the home buying marketplace is that we are starting to see new listings data decline noticeably, and that started in late june, and sellers called it quits earlier, and then the mortgage rate lockdown that many people have talked about for many years, i never believed in, but we might be in the early stages of home sellers saying, listen, i will not buy a house at 6%, and that could be problematic long term if rates don't fall, but right now the growth rate is falling in america >> we talked about some of the luxury home builders haven't seen -- they are starting to but have not seen the affect of higher rates, and at the high end are people not as concerned with mortgage rates? is it really just affect the low end at this point or starting to

affect everybody >> what the builders say what is going to happen, and the builders are efficient in getting their supplies, so they had profit margins to begin with, and they will do what is necessary to get homes sold by incentives or price cuts if they seem more bullish than sellers, it's because they have more tools to use, and i believe the builders will be able to unload products more efficiently than after the housing bust, and for certain markets, some of the cheaper areas in the u.s., they find ways to get it done the higher home price levels is not so much rate sensitive, but in general the housing market is sensitive of the rates and we saw that immediately this year >> logan, thanks the lead analysts at housing

wire thanks still to come this morning, elon musk biographer, walter isaacson he has a lot of thoughts about back to work we will pick his brain on that, too. and also the winners and losers in the s&p 500 this morning led off by oracle. stick around, "squawk box" will be right back.

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still to come, b of a savit subramanian. and then the whistleblower, and we will talk to the chair of the committee, senator richard durbin stay tuned you are watching "uasqwk box" and this is cnbc

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(police radio call) (sirens) (news report) (sirens) (news report) on "squawk box" this morning, the futures are in the green ahead of the cpi data. we're up about 233 points if we open up now. nasdaq up about 97 points, and s&p 500 up about 31 points we have been talking crypto all morning as well, and pwoeut coin

has risen, $22,630 and we are watching as the merge happens on september 15th. mark your calendars. and the gains on the dow, amex moving higher, a little over 1%. caterpillar not moving that much, and then apple, we'll call it marginal. you are looking at asml holdings, and that's always an interesting since they have a monopoly on the ability to manufacture chips around the world. >> yeah, and they were hit with the concerns about what you can and can't do with china on chips, and you see the bounce back today and then the twitter whistleblower will testify about what he witnessed while working

for the social media giant joining us right now with more about what this could mean for elon musk as he continues to back out of his deal with twitters musk biographer, walter isaacson, and he's a cnbc conc contributor. thank you for being here >> thank you great to be back on set with you. >> so many things coming to a head, you have the whistleblower and then shareholders voting on the deal, and they will want the money. the whistleblower, how does that change things? >> if it goes to trial, the trial is a lot more exciting, which is not a good thing maybe for either side, and particularly not for twitter if you will be able to depose everybody, even though what this whistleblower has said is not

that relevant to all of the complaints musk made about twitter, and if you are going to have a trial where the dirty and clean linen is aired in public, and it puts more pressure there for a settlement, and there are a lot of people trying to promote settlements. these are not people who -- it's not like the colgate person talking to walmart saying we can settle, because there's a lot more emotion to this one, and i think there's a possibility this case will not go to trial. >> let me ask you this, because there are a lot of people said elon musk will not settle for settlement >> he has good lawyers and good bankers, and i think that he will make an engineering decision, and you are right,

he's not the easiest person to get to settle. i do think he's offended by some of the things he found out about twitter, so we will have to see. >> to me, there's such a large delta -- >> right 54 -- >> i was going to say the $44 billion deal, and if you are a twitter share holder, you feel like you are entitled to the whole $44 billion, and elon musk believes they are entitled to $1 billion, and walk away, and i imagine if you are a twitter board, you think to yourself, you know what, unless you are going to get me within 2 or $3 billion of that, why don't you let it ride because the chances are, i think most legal experts

think it's in twitter's interest, and maybe bad laundry will come out during the trial and from a winning or losing perspective, twitter has the better hand, no? >> i think twitter has a better legal hand with this judge in delaware, so yes, and if you remember the twitter board, your first thought should be how do i get off this board, and the second thought should be where do i settle this, and you look and down the streets, you will see people running out of the buildings which is lawyers filing class action lawsuits, so it's not an easy settlement to see, but it's like a lot of things in life, it's in both sides' interest. >> isn't this just a time value of money story

the truths i think most of the directors on twitter's board, they all have insurance -- >> that would seem to be the most important part. >> i don't think anybody will look at them in that way >> and they want to sell >> people on the board don't have the large stakes -- >> yeah, of course they would. they can let it ride and see what the judge decides >> and the judge seems very predisposed to -- >> and then you get into something that i will not be able to give you the answer to because i will toss it out, and i don't know what happens if the judge says, yes, you have to go through with it if he doesn't want to do it -- >> is he planning on that? >> no, and i think he is always

of mixed minds as most of us are, and there are times he wakes up and thinks of all the great things he could do with twitter and how great and exciting it would be, and he helped create paypal, as you know, and when he lost paypal, he was trying to make paypal into the great financial services bank that would do all your transactional needs he could, if he wanted, try to turn twitter into a payments platform, into a way in which you store money, and i think he dreams of or has good visions of what he would do to fulfill what he thought about as a kid by taking twitter and doing that. >> i bet he doesn't wake up too many mornings and think, wow, i am excited about being deposed today and being dragged

through -- >> i have never seen him enthusiastic or happy about upcoming depositions >> yeah, lawyers have access to his time and control over him, and i can't imagine -- >> we were talking off air, but late last night he was working on engines, and what valves he would use, and valves are a problem on rocket engines as we have seen, and he was able to focus in a way that i almost find, you know, it's like he is half volcan or something, like spock, and he's not worrying about depositions but valves >> the whistleblower, how does this potentially change things if they do reach a settlement

it's not going to stop the whistleblower from saying anything >> well, there's a whole lot more that could come out, so i think -- yeah, i think the whistleblower doesn't help twitter at all, and it also doesn't help the current management of twitter. >> we need to stay on this but as an aside, i think of the people you have written about, and steve jobs, and einstein, and ben franklin and da vinci, and listening to you off camera about elon are there similarities, and do some of them have good points and some bad points? >> we're all human, and i am a biographer -- >> are they all on the spectrum? >> that is an interesting and perhaps longer conversation, but that ability to not be as

emotio emotionally empathetically be engaged in, and it's something a lot of these people have, because they are not looking for affection from the person sitting across from them, they are looking to get rockets to mars >> that's interesting. is it harder to do biographies of live people or dead people? >> i did henry kissinger in manhattan, and after doing dr. kissinger, and that was an interesting topic, and i did ben franklin, and then i did somebody live again, steve jobs, and then i did da vinci. i think after doing elon musk i might go back at least to aristotle. >> steve jobs would tell you how

he felt, and is elon musk similar -- >> yeah, musk is similar in being extraordinary open, how he feels not only about business matters or whatever, but he has a -- more complex life than, let's say, i have, and he's transparent. that's transparency is part of his genius >> weird >> his willingness to be so open and transparent makes him -- >> i think he might do it for chip i am not sure it's about money, but to keep track of the chips >> in terms of -- >> in terms of being the richest man in the world >> but you would not start a rocket ship company going to mars >> this spectrum idea and this idea that he is an unemotional person that doesn't care what people think of him, i don't

believe that for a second. i think this is a person that cares deeply of what people think of him >> collective people, but maybe not -- >> but this is the interesting element of it, right you look at the way he feels about president biden, and -- >> he is very annoyed at president biden that general motors is leading the way -- >> he desperately wants to be loved and beloved. >> right, especially by humanity, and not necessarily by the humans >> you want to be loved by your wife, and i don't care about the collective -- i care about my family >> he cares that biden has dissed him on electric cars, and if he is sitting in front of four or five people that messed

up on getting the booster of a starship, and he said if i am feeling empathy instead of moving them out, and that's misplaced because my empathy has to be on the enterprise. >> let's shift the conversation, because i am told you have strong thoughts about back to work, and we have been talk around the table this morning, and for weeks this has been a national conversation, if not for months, and we kicked it off this morning with the unions have said we are not coming back even though you want us to this week, and you are a tulane professor, and you have seen this from a lot of different sides, what do you think >> this is america and every company should be able to say i am asking my workers to come back or not, and it would be an

amazing study if anybody can do it in ten or 12 years of what affect did it have when you asked people to come back to work, and elon musk will push people to come back to work. i can look out of these windows and walk by as i came here, and being in the corridors of the time life building, and people telling me, hey, kid, you are going to get to travel with the president next week because i was a white house correspondent, and you learn things by being around other people, you get mentors. i think it's really bad, and i watched kids in new orleans although kids came back in school, and that hurt and they lost a year for every six months of school, and likewise tulane came back on campus, and some

say we want back on campus, and if i was running a company, i would say come back to the office, this is ridiculous you need that stimulus, and it's good for our society our society is so polarized. when i went to work in the corridors, i had to sit there listening to people i disagreed with, and we had yelling arguments and sat there, and then all went down to the lobby for a link whe -- drink. steve jobs was fanatic about it, you had to walk through places and pump into other people >> i think i am more in your camp than the opposite camp, and also what about the idea that commuting has gotten so awful for people to get into the city,

and should there be more flexibility and more attentiveness to a work-life balance. >> there's a movement in the world today and people want more work-life balance, and they don't want to commute or come in that much, and whatever you call it, quiet resignation. is that good not in my opinion. obviously i am sympathetic i used to live up in yonkers when i worked at "time" magazine, and i came on in and would i have liked not to particular metro north maybe. but it was not the worst thing -- >> would you agree to a three-day workweek or four-day -- >> depends if i was trying to get to mars, i wouldn't agree to that, and if

i were google and trying to code, you know, do coding for the al tkgorithms good managers should experiment and say this works best with my team >> you mentioned cnn, and what is your take on what is going on at your former employer? >> well, i think what they want is more reporting and less yelling of opinion i like being on this show. why? because this show, the amount of valued information versus the amount of random pontiff indication is -- >> wait a minute >> the ratio is 2 to 1

>> i'm slacking. >> i think there's a hunger for information you could trust, and when i was working at cnn, there was the gulf war and it was easy and people wanted good information, and as that ended it was a better business model to hire opinionated people that would get their hair on fire, and it's an easier business model, but a show like this where you are giving high-value information, and it gets you more eyeballs and that means advertisers want them, and it's something that we need in our society, and let me give you more accurate information than opinion -- >> i got a little teary. you really like us >> you are back at work and you deal with each other >> we do >> walter, thank you, let us

know when you are in new york. we got lucky this time >> we like having you around the table. thank you for being here >> right, in person. coming up, when we return, we are counting down to today's big inflation report out at 8:30 this morning the numbers and the market reaction is all straight ahead plus, get the best of "squawk box," check it out in the daily poasdct, and follow "squawk pod. we're back after this. i promise - as an independent advisor - to put the financial well-being of you and your family first. i promise to serve, not sell. i promise our relationship will be one of partnership and trust. i am a fiduciary, not just some of the time, but all of the time. charles schwab is proud to support

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coming up, savita subramanian, and check out the shares of oracle, the big tech company posting earnings below wall street expectations "squawk box" is right back

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welcome back to squawk b of a securities head of u.s. equity good morning to you. you want to talk cpi, where you think this equity market is headed at this point >> let's talk cpi and the mark so, you know, i think our expectations for the print today are b of a is calling for 8.2% i think consensus is 8.1 that is still a lock ng ways awy from the target, 4%. i think we need to think about the idea that it might take a while to get back down to what we would expect to be a normal

inflationary environment and along that way i think the worse thing to own is the s&p 500 wholesale. i think there are other better places to be in an environment where we're in a very different environment than the last 10 years where the s&p 500 crushed it every year. >> those are some fighting words because there's a lot of people, as you know, including warren buffett who said to the public, look, if you're going do anything, buy the s&p 500, hold it, just watch watch and wait you're saying this is a terrible idea at the moment >> i think that if you've got a 10-year time horizon, hold it and watch and wait returns will probably be in the mid single digits for the next ten years. you can clip a coupon from dividend yields. if you are thinking about what's going to happen between now and let's say the next 12 months, i don't think the bottom is in i like the warren buffett

strategy as buying and holding, but not everybody has a 10-year time horizon i think if you're looking for areas of the market to invest in in the near term, there are a lot of really attractive spots if you think about the small cap benchmark, it is pricing in a hard landing recession we think things are going to be okay we think we're going to get a recession but it's going to be a softer landing the u.s. economy can benefit so i would look for spots that are pricing in a much worse scenario than what we're likely to get i would also look for areas that are going to benefit from continued high and sticky inflation. if you look at inflation dispersion, different types of inflation, it's the widest we've ever seen. we're seeing an environment where, you know, food and rent are doing one thing, whereas, oil and wages are doing another thing. so i think it's an environment where you really have to pick

your spots and think hard about what you want to own the s&p 500 is expensive, super crowded. it's the most crowded ticker in the world if you think about it from an index perspective. what we've found is that over the last few years passive has overtaken active everybody owns an s&p index fund while it might be well over the next ten years, i do think that there is some crowding risk, some potential for investors to have to sell the s&p to meet, you know, their -- >> let's talk about where you put your money let's say you're not going to buy individual equities, you're going to do it similarly with etfs or other types of index funds. how would you do it? >> i would buy sectors i would look for sectors that benefit from still a very high backdrop i would buy energy, select

industrials that can benefit from a cap ex. everybody is moving companies back to the u.s. it's going to benefit kind of the traditional industrial companies from a more traditional cap excycle rather than just spending on tech i wouldn't own tech for the foreseeable future you know, i think that higher growth, longer duration stocks could still be hurt by rising yields, by a rising discount rate here's the thing, i think we need to get to a positive real rate of return for investors to actually start investing in bonds again and that is not the case today the real rate of returns is roughly zero it's flirting between negative and positive territories in the near future i think there's up side pressures to raise for the ten year and long duration stocks like growth stocks are going to get hurt in that environment i would stick with energy. select ndustrials.

health care looks great. it has a lot of free cash flow yields if you think about cash, cash is now going to be worth a lot more than it was for the last ten years where it was zero. so i think, you know, focus your investment on looking for -- >> when you say industrials, select for us. >> yes so i think that the best places to be within the industrial complex are some of the automation plays because if you think about it, that's where companies are spending money as labor inflation has started to rear its head, as we've seen companies bring back jobs to the u.s., you know, they're actually incented to automate more of the processes than they were when they could just off shore and pay for super cheap labor in other parts of the globe so i think that's a great place to be within industrials you know, i don't necessarily see a big oil cap ex cycle coming because they have gotten

capital disciplined. i would stick with some of the more tech automation plays within the industrial sector. >> savita, i want to thank you for all of these big ideas hope to see you very, very soon. we'll follow and see what happens. >> thank you thank you. you're welcome coming up, senator dick durbin on what to expect to hear on the hearing today with the twitter whistle-blower august cpi we'll bring you the numbers the instant they cross les that i had growing up. and that was important for me because you can't be what you can't see. the ey entrepreneurs access network has a tremendous impact on my business and other african american and latino entrepreneurs across this country because they give access to networks, business opportunities and capital.

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good morning the countdown is on. 30 minutes to go before we get august cpi data. we'll bring you the number and tell you what it means from the fed's calculus on rate hikes ahead of the number, stock phi tue futures are higher the twitter whistle-blower is set to answer questions in front of the senate judiciary committee. we'll speak with that panel's chairman, senator dick durbin. the final hour of "squawk box" begins right now.

good morning and welcome to "squawk box" on cnbc live from the nasdaq market site in times square i'm joe kernen along with becky quick and andrew ross sorkin the futures are solid ahead of what will be a pretty important number on inflation at 8:30. the cpi. before that, after we broke a three-week losing streak last week and started out better yesterday, we're up another 234 points people are kind of counting on maybe a cooler cpi number. we'll see if it's cool enough. i don't know if there's anything cool enough. a hot one would probably throw a bren wrench in the works. you've got to look at all -- subtract everything out. gas prices. >> the risk is that -- the

threat is it will be lower just in terms of below expectations gas prices are down significantly. energy prices down about 10% >> there's no way it can be too cool i don't think. >> i don't think so. >> that doesn't indicate a slowing economy. what you don't want is a strong economy and hot numbers. you want a strong economy with cool numbers we've had that for 20 years. >> you want to say we've peaked with inflation if you can get a negative number on any one of those measurements, okay, we've seen the top. when you hear about the wage increases and things to come, it's still a question. >> crypto's up can we look at yields? yields, that is important. you saw mortgage rates were you a little surprised at that mortgage chart? >> aren't we being a little too optimistic here? >> the threat is -- none of this makes sense to me. i think savita is right about this. >> the market built up yesterday and this morning. >> this happened in august, too, and they got hit goen.

>> it would be great in jobs would hold up but inflation would cool, that would be great, would it not >> it might. it still probably won't enough and that's the point >> enough for what we've already gotten, maybe. >> we're in that 37. now we're 37 to 43 which would be just my luck. i need 44 to get my tacos. >> that's what the market's designed to do, get you your tacos. >> specifics on inflation. investors are waiting. wait, is that today? >> 26 minutes and 43 seconds. >> repeating everything we just said. >> get ahead of ourselves. >> you kill it forecasting a slight decline in the number headline year over year numbers up 8%. that's down from last month's 8 1/2%

at&t's ceo john stanke says early demand is in line for the projections. he made those comments at the goldman sachs tech conference in san francisco. he says the holiday season will reveal a better picture for demand for the devices streamers ruled the day at the 74th annual awards "the white lotus" won five awards won for best drama series. apple tv's "ted lasso" won four trophies including outstanding series hbo took home 11 emmys disney and apple each earned 4 and netflix won 3. >> let's get over to dom chu he's looking at the morning's top premarket movers dom, i guess you're going to steer us a different direction than the cpi what else is happening >> i will wrap a little bit in let's start with some of the

strongest up side moves in the s&p. one is going to be oracle. higher by 2% roughly 22,000 shares of trading volume the sortftware maker, revenues were relatively in line with expectations revenues did climb 18% due in large part to oracle's acquisition of serner. then you have shares of tyson foods. down fractionally. roughly 2500 they downgraded the meat process from a hold rating to buy. they decided headwinds from a u.s. dollar. inflationary pressures and here's how it ties in and how consumers are shifting their purchasing behavior to cheaper variations and speaking of those consumers, we'll tie it all in. check out some of the consumer focused stocks posing fractional

gains ahead of the key inflation data coming out in just about 25 minutes from now could slow the inflation help bolster spending in certain parts of the economy more discretionary carnival corp, wynn resorts among the travel stocks up in the pre-market trade general motors up and nike is up fractionally as well a dow component. andrew, i'll send things back over to you. >> thanks so much, dom peiter zatko is set to testify he served as twitter's head of security last month he accused the social media company of content moderation deficiencies and perhaps what a lot of people are focused on is elon musk now trying to use that alleged multi-million dollar severance payment a reason to call off the

buy. they'll finalize whether or not to sell the company to musk. of course, they plan to vote to say yes on that. joining us to talk about today's hearing in congress, senator dick durbin, chair of the judiciary committee. senator, good morning to you very cure kbrous what you're looking to understand from this hearing but at the same time trying understand how you think and how you think other members of the committee are contemplating this testimony in relationship to this other almost larger situation, which is the future of twitter and this lawsuit with elon musk and how you think that bears on all of this. >> well, you'vecertainly given me quite a menu of things to be concerned about. i'll tell you, the first thick we're concerned about is the security and privacy of information when it comes to america's people who are using the twitter platform this is an unprecedented revelation this whistle-blower came to us

and on a bipartisan basis, democrats, republicans on the committee and said he had a story to tell and he believed the public needed to know. that's unusual in the judiciary committee. certainly on this matter it's not the last time i think we'll consider this important issue. americans have to ask a basic question when it comes to the issues being raised at this hearing. is there any level of information or data concerning you personally that you want to keep private do you believe that is being kept private by the platforms that you're using? he goes by the handle mudge. what he tells us is when it comes to twitter, that unfortunately there have been too many instances where too many people had access to basic information. >> senator, do you have any questions about the credibility of this witness given the various firings, payments, and other things that have been taking place and the backdrop of this lawsuit as well

>> well, i don't know this field with any great expertise but i take a look at his resume and the fact that when twitter got caught in one of the most outrageous hacking incidents two years ago they called on him to come to the rescue he boasts of a reputation in the industry, which is pretty substantial and with government agencies and the fact that they chose him is sort of a tribute to his expertise the fact that he fell out of favor at twitter is going to be subject to a lot of speculation, but certainly his resume is one that is impressive you call him in the most delicate situations, he must know a lot and must have a record to prove it. >> the reason i ask about the credibility issue, are you intending just to talk about what he sbleefs happening to twitter or do you believe to ask

him anything about his own motivations in this? because i do believe there are people who would argue that his credibility unto itself should be questioned. >> you can expect that let me say for the record, we invited twitter to send their ceo in to testify as well so we could hear that side of the story. for a variety of reasons they turned us down, but the fact of the matter is his critics have increased in volume and number as he has spoken out more publicly about this issue. he felt a moral obligation, ethical obligation to do that on behalf of the people using the twitter platform certainly they went on the attack against him almost immediately. that's not unusual it happens in our committee all the time we have to be the judge, america has to be the judge as to credibility. >> senator, how do you think about twitter and the context of its other competitors, and specifically i want to talk about tiktok because there is a view, a prevailing view in this

country that it is a company that is controlled by china and there are some people calling for its shuttering effectively >> we are naive to believe that there aren't international connections with these platforms which raise serious not only privacy issues but security issues there was a recent conviction of an individual who took information from the twitter platform and gave it to the leaders in saudi arabia and to out a dissident. a person was convicted for doing just that. so that is an i will lus stris -- one illustration of the misuse of data of someone's personal privacy, in fact, may have endangered that person's life we've got to take that very seriously. we should not be so naive to believe that it's all domestic i think there are international implications. >> does it matter who effectively controls it insofar as one being a u.s.-based

country, another being based somewhere else, in this case a chinese company. >> matters to me i would start with there are four hard targets the united states watches day in and day out, china and russia top the list when they are involved in any venture that has access to data about america, our agencies or our citizens, you bet i'm concerned. >> senator, we have a big number at 8:30, the inflation number, and, you know, we know how inflation ravages people it's something nobody wants. so, you know, there was putin obviously and supply chain issues after the pandemic reopening, but there's a lot of people, not just republicans, that say we've just spent too much money we did it during the pandemic, issued a lot of debt, a lot of dollars, the fed did, a lot of programs and then just this year, chips act, inflation

reduction act, student loan forgiveness which i know you were in favor of any second thoughts whatsoever about maybe that's adding to the problems and, you know, here we are, the fed's got to basically orchestrate a recession which hurts everybody just sort of to deal with all the overspending we've done any truth to that in your view >> let me just say this, there are a lot of people right now monday morning quarterbacking, maybe it's tuesday morning in this context, but they're basically shouldn't try to rewrite history. what we went through with the pandemic was unprecedented in the economy in america a sustained period of time where there was a virtual time-out and a real question of recovery. look what's happened with the number of people, the number of jobs that have been created under this president just in the last year and a half and we see a lot of activity that is encouraging. yes, there are the fires of inflation and people are fighting them but gasoline

prices are coming down thank goodness that's a good indicator that they can have confidence in the future of the economy. i look back on it. i believe what we did was extraordinary but the circumstances were unprecedented in our history we had the sustained businesses and employees during one of the most difficult periods in our history. >> senator, i wonder if i could ask you about this looming potential rail strike that we're considering now. i guess friday is the deadline with two of the unions that have not settled yet. they represent 66,000 employees. if they don't reach some sort of a settlement, you're talking about the potential for i guess about $2 billion a day in disruptions and in lost revenue. congress has the ability to act and i guess majority leader steny hoyer i guess said yesterday congress would act in that situation but it does pose a difficult problem for a democratic administration to kind of deal with this instead of letting it play out what are your thoughts on this

how urgent is it to get it set snld do you think congress should act >> i have been through this before and i can tell you the possibility or threat depending on your point of view of congress intervening is usually ended up with a resolution of the issues at the final moment i understand there were two unions working out their arrangements with the railroads. we are hopeful it will be done this week and we can avert a strike which would not help our economy recover in any way whatsoever, but i want to make it clear, they shouldn't count on congress to ride to the rescue they should come to an agreement. it would be painful and hurtful to our economy and recovery if there is a strike. >> senator durbin, want to thank you for joining us this morning. appreciate it. >> good to be with you >> you bet. coming up, the number of -- all wall street is waiting for

august cpi inflation data is out in less than 15 minutes. next though we're going to take you live to new york city's hard rock hotel. a five block journey through times square from here it totally would be uneventful probably but, who knows. you're already there, contessa, thank god. what do you have coming up for us >> i just swooped in and landed here listen, joe, hard rock's chairman told me that he is scrutinizing these inflation and currency numbers he admitted summer was a bit soft, but he is moving forward with a massive wage hike across the board. we'll tell you why and why now that's ahead on "squawk box.

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with inflation data coming up in a few minutes, we want to focus on wages another well-known company is raising them contessa brewer joins us with more on that story right now contessa, what can you tell us >> reporter: well, so, becky, from the folks who work behind the new hard rock hotel to the housekeepers who clean the rooms, bigger paychecks are coming hard rock international is ready

to spend more than $100 million on wage hikes. the company broke the news to more than 10,000 employees and we're not talking dollar or two an hour increases but as much as doubling hourly wages in some cases. for instance, in florida, employees will see 8 to $11 more than the state's minimum wage. you're seeing right now the news and the reaction that the employees gave when they got the news about the pay raises. this means some workers might actually double their salary here's jim allen. >> i looked at it, let's be the leader, let's be ahead of the curve in order to make people feel appreciated and hopefully in exchange, i've joked with this with the employees, we're doing employee appreciation days at all the locations, we only ask one thing in return, just be the best you can be to your co-workers and to our guests and we're betting that that formula will work. i personally believe it will >> allen says the real pinch

points in hiring have already eased but there are 1600 open jobs at hard rock across the nation the wage increases apply to those new hires, too here in new york city hard rock and others are hoping to land a casino gaming license and of course, guys, being generous and being a generous employer certainly won't hurt their chances. >> yeah. contessa, i have a couple questions. i guess first, what happens to their competitors in the entertainment industry, in the travel and leisure industry. they have to follow suit usually what you see when a walmart or target raises wages, everybody else has to follow just to compete. and i guess second of all, what's the strong dollar mean for hard rock's international business >> okay. great questions. first of all, what we saw here in new york city is when they opened, they hired at a premium wage they wanted to get the best people in and do this the right way so they had already taken those increased wages and offered them right off the bat when this new hotel opened in mid town

what we've seen is that the unions have negotiated wages, say, in atlantic city. hard rock says these wage increases will apply to those people who the non-tipped employees even if they're represented by a union they're getting rate increases even if the union has negotiated the wages. does that put pressure yeah if talent is in short supply it puts pressure on mgm and caesar's to come up with a plan there. on the currency situation, what it means is that they're not getting as many european travelers coming to the united states and jim allen told me it's super important that's a crucial cohort here in the united states, but even more important, guys, is that the russian invasion in ukraine has cooled travel. he says that the cafe business in europe has been really suffering this summer. it has not seen the kind of travel rates that it would have expected. >> contessa, thank you we'll see you soon. when we come back, breaking inflation data and the instant market reaction.

we're going to get those numbers in just minutes. stay tedun you are watching "squawk box" and this is cnbc

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really am kind of excited. welcome back to "squawk box" on cnbc we're just a couple minutes away just over two minutes away from the august consumer price inflation data ahead of the report, let's bring in our expert panel. nancy davis, chief investment officer. mira pandet. austin goolsbee, former chair of the council of economic advisers during the obama administration. now professor at the university of chicago's booth school of business chicago was like 5, austin, ahead of a lot of the ivy leaguers in the latest u.s. news tyler goodspeed, former acting cea chair in the trump administration now an adjunct scholar at the cato institute and fellow at the hoover institution we're going to be ready by the number by the time we get done with this. our own steve liesman, spent

years in russia, speaks russian, likes mean naoko lad d-- pi pina coladas and rick liesman in the windy city if we go quickly, we might be able to get a number austin, is it going to be a cool number will it be cool enough quickly. >> look, i hope so this is the critical three-month period the core month-to-month inflation is the thing we're watching if we could get that at .1 or below for the new month i think that changes the game of where the fed's head is. >> tyler, real quick >> i agree with austin i'm looking at the core measure. the headline we know a lot of the components there dropped last month so it's probably going to be flat. maybe slightly negative. >> nancy >> i'll take the over on that since we have a little bit of a consensus. the above 8.1 is probably likely

because of food inflation although energy has probably dropped. >> sorry to be moving everyone along so quickly mira do you have a guest estimate >> all eyes oncor. we want to see things outside of energy come down in this report. >> very good okay and then we'll get to you in a second, steve. sorry to leave you out it's time now for the report rick santelli, hopefully you've got the numbers for us >> yes the august numbers for the consumer price index headline number expected to be down is up .1 instead of down .1 do remember the high water mark there was in june when it was the highest level since 2005 when it was up 1.3%. up only .1 of course the lowest since, well, last month when we were unchanged. if we strip out the all important food and energy and do understand gas is down, what, 26% month over month, it's food we have to pay attention to.

up .6 of 1%, double the expectation. the high water mark there is up .9. that was in april. that went back to 1981 up 6 cents. now the year-over-year numbers expecting up 8%. up 8.3 year over year. high water mark there was of course 9.1 that goes back to 1918 8.3 equals april and it is the lowest level since february when it's 7.9 if we strip out the food an energy on a year-over-year perspective, up 6.3% we're expecting up 5.9 the high water markup 6.5. that was in march. that was the highest since '82 when we see 6.3, that actually now is the highest since march when it was the highest since '82. we've had four months in a row

where it was moderating a bit. we'll call an end to that. as we look at interest rates, we could completelk4r50er8 clearlyt of two-way action. we're at 339 on the 10 and 329, down 7 so you can see there's been a big reversal the panel, of course, is going to discuss this. the thing that really bothers me with regard to inflation is everybody here on this panel agreed months ago that one of the reasons inflation was high was all the government spending. after we agreed on that, what did the government do? they spent more. student loans, welfare in terms of the chips act seems like nothing is sinking in these numbers aren't better than expected maybe they should be and they'll start to go up again we continue to go back to that well of debt and spending. the gain, back to you. >> we've had policy makers on and to -- no exceptions.

they don't cop to that at all anymore, rick. it's supply chain and gas prices have been coming down and all our efforts are working. what one representative just said just to be clear, like i was asking like the same questions about whether we should still be spending i don't know austin -- let me -- how about you, steve what do you see in there give us some more details. >> i think the important story of this, joe, i'll get to the detail -- the important story is the fed just erased the 75 basis point in pencil wrote it in in red ink. i think this moved them to 75 basis points it came from what rick pointed out, food. what was it 07, 08 on the food number that was the big thing 08 on food food and home was up 0.7%.

that was over on the core side -- sorry, on the headline side on the core side, two things one is i am not seeing, joe, some of the deflation from the excess inventory that people thought was going to show up i'm seeing goods prices up a bit. i'm not seeing too many negative numbers. the one negative number i see is used car prices down less than had been expected by some core that was down 0.1% you have this new car number up pretty healthy way the other important component here is the housing component. own nrs equivalent rent used to figure out the cost of housing up 0.7%. there may be some moderation in rents out there, joe, but it did not -- it's not showing up yet in the inflation number so it's not helping out the core it hurt the core and what you remember, joe, we had this lag before it came into the inflation numbers. looks like there's going to be some lag getting out fed has more work to do for

bottom line. >> next month will be important, right, nancy we didn't get the -- didn't get what we were hoping for? is it coming. >> as i was expecting, winner, winner, chicken dinner, more expensive food prices. you see it every day in the grocery store. i'm not surprised by the number at all it's right in line with expectations, for me at least. >> how about you, mira >> look, it puts pressure on the fed to continue to hike pretty aggressively we expected 75 coming into this meeting. even if we did get cooler inflation, which we didn't, we still haven't seen that sustained trend of disinflation. we'll continue to watch out to see if we see that moreover, we're seeing labor markets are tight and wage growth is falling. above all, if we see that the fed happens to have gone 50 basis points we would have been in the same exact position we were this summer where all of a sudden the markets are pricing a fed pivot that the fed is not

ready to deliver so i think at least it keeps us inline with that 75 basis point hikewe're likely to see later this month. >> austin, just referencing some of the stuff rick was saying and jason furman, he's kind of like-minded in certain ways. did you have any remorse about the student loan action, austin? have we spent too much is that part of what's going into this right now and has troubled you >> that's not going in this. as you know, i wasn't a big fan of blanket debt forgiveness of that form, but that the amount of money that goes in as stimulus from a 10-year debt forgiveness program is very small in this year it's totally confused to say that the government spending is going up government spending is all compared to last year. it's actually shrinking by almost $2 trillion, the biggest drop in the deficit that we've ever had that's not what's driving these

numbers. i couldn't tell what the month-to-month inflation in the core was it was worse than expected if the year over year was up more than expected, but that's the thing that the fed is looking at that's the only new information on the core, and if that's not coming down, i think -- forget about 75 basis points, that means we're going to be on a path that the fed is going to be raising rates a lot, not just this meeting but in multiple meetings going forward so that's the thing we've got to keep our eye on. >> austin, i know we haven't spent the student loan -- none of that has happened yet go back a little bit to what we had spent prior to that. you don't think any of that enabled -- the fed enabled a lot of fiscal spending at that point? that's why we're paying the price? you don't think any of that did that >> no, i think some of it did. i think some of it did the argument that the inflation

right now is being caused by too much government spending and stimulus is confused about how the accounting works it works as everything compared to last year and government spending is falling quite substantially. it's pulling gdp down. >> tyler, can i just ask just about the wage increases >> becky >> just a second let me ask about the wage increases in particular. looking at some of these numbers. we've been talking about the railroads negotiating for a 14% pay increase that they would like to see more than that i guess on some other areas. we've just talked about hard rock cafe raising what they're going to be paying their workers. we've talked about california and the fast-food law requiring $22 an hour for fast food workers. what happens to wage inflation that's what always worries people about the wage inflationary pressures tyler, are you concerned about

that or is that something we still need to see more than a few anecdotal situations >> i think that's a good question and certainly when we look over the past year and a half, a big challengefor labor has been that wages have not been keeping pace with inflation. and for most of 2021 into 2022, while that was true for the average wage, the average real wage, it was not true for wages in the aggregate, for the economy as a whole but that has changed in the past six months and, indeed, for two of the past three months we've actually had the aggregate wage bill in the economy not keep pace with inflation. so i think there's going to be a lot more pressure coming from labor with wage hikes to get even with the inflationary pressure we've seen over the last year and a half when i look at unit labor costs, the core measure of cpi, when i look at the alternative measures, trim, median, weighted median, those for me all seem

consistent with a pretty sustainable 6% core rate of cpi growth that's not 2%. >> steve >> long way from it. >> yeah, let me just tell you what's happening in the fed funds market this is pretty big right here. i don't know how big right now there's an 80% chance of a 75 points basis hike. the rest of that is not 50 the rest of that, if my math is correct, a 20% chance of a 100 basis point hike >> wow. >> guys, in the back we've got a little chart we've just updated. there has been a pretty significant move rick will either back me up or tear me down on this as is his want i am seeing the april 2023 contract trade with a peak trade of 420 and i'm not joking about that number. >> wow. >> it is 4.20 right now according to the latest number i have 4.07 by year end which is kind of incorporating a little bit

more aggressively than out there. i don't think that's right for the next meeting but i have long argued that everybody's too concerned with the steps and not with the destination the destination here i think has always been in the 4% range. what the market is now saying is the fed needs to go further. so what's happening right now is the market has piled on not just a neutral rate, not just a restricted rate but additional restriction in the rate there at 4.20 and it all depends on the great, debate, joe, what's your underlying inflation number to find your right fed number or fed policy rate? >> rick, you know, jobs friday we've seen some big swings plus 250 to minus 400, that's a cpi number that engendered that today. that's a big move. we haven't seen that in the yields and in the fed futures, these were pretty big moves. quickly, this is a lot of

surprise here. >> yeah, they're big moves there were 351, at 368, almost 369. we continue to make post cycle high yields. the yield curve is getting more inverted and i completely, completely agree with austin, the money we spent well before the latest money we spent still hasn't boosted inflation to the extent we will don't depair when that runs out, that will take two or three years for the next batch to make sure inflation stays up where it's at until our hard-headed politicians understand if we want to keep seeding inflation, you're going to get things to grow what's worse, on the inflation side with respect to what we're all discussing, how much it's going to cost for labor, of course labor hasn't got tough but neither has interest rate side the short end? well, it's continuing to move

higher with t-bills and ultimately it's the back end that's going to reach a fulcrum at some point. the terminal rate might be 4% but 10 year, 20 year, 30 year at some point are going to start to go the other way and that's what the market's trying to handy can, not the terminal rate with respect to the fed but ultimately where we break the back of the economy and how that affects the yield curve in the long maturities. >> guys, can i just throw this out? steve, maybe this is a question for you. shelter prices up 0.7% watching them point out that this is the highest in the cycle we've seen back to 1991. >> yeah. >> that's got to be a concern, too. >> yeah. i don't know if we have that chart. i tried to make a chart updating it it's a little difficult when the data first come out. if you look back at the relationship, becky, of housing inflation to overall inflation or core inflation, what you see is you have some moderation in

the core inflation number but not in housing you talk to people, there's a whole set of price increases, rent increases yet to come through the system there is a lag here. most economists or forecasters i've read do not see any relief to this component, becky, until the fourth quarter of this year and the first quarter of next year why is that important? the shelter component is 1/3 of the total index. if you want to get relief in the index, it's good to get down shelter. here's the problem the fed is leaning hard on interest rates and that has hurt it really raises the concern about a mistake by the federal reserve. let's say it is out there. it is lagged with the decline and the fed keeps going even while you have this what people are calling a recession in the real estate market so if you look by the way at what's happened to the 210 spread right now, it has widened up which, again, there's two

trades here. one is in the short-term end of the curve which is the trade with what the fed is going to do next then there's the longer term trend which is does the fed go too far? when that spread widens, there is some implication what that is telling you better chance the fed goes too far and causes a recession. >> all right nancy? mira anybody? >> well, the rate market is saying recession the inverted yield curve is getting more inverted. it's definitely saying the fed is making a policy mistake by hiking rates i think really i was very disappointed with powell at jackson hole to not talk about the balance sheet. i was sitting there, eight minutes of just talking tough? he sounded like rick flair why was he not talking about the balance sheet? the caps just increased in september and no comments about the future plans after the next three months i think they should focus more less on hiking policy rates,

more on reducing the balance sheet because an inverted yield curve is not healthy for the economy, not healthy for stock markets. retirees are getting killed right now because they're not benefitting from the wage inflation. the fed needs to do more and stop with just -- they're hitting the same nail with the hammer over and over and over again and it's not working we see that with today's numbers. >> okay. want to hear from you, mira. >> it's going to be a challenge for the fed next year for them to be fighting against shelter inflation which is much stickier than we anticipated. it's not necessarily a surprise to see it increase but i think it's a real challenge we're going to deal with over the next year plus as the fed fights against shelter in particular. and with regards to getting to restricted territory, they want to get there as quickly as possible they certainly have their work cut out for them given this report it's less about what peak

inflation might be and whether we're beyond it as opposed to where is peak fed hawkishness and per steve's comments in terms of how the market is pricing, where we get to by the end of this cycle in terms of rate hikes is much more aggressive than we would have thought even 20 minutes ago. >> mira, you're the global market strategist at jpmorgan asset management i hear a lot of people saying, look, we're still the best house in a bad neighborhood. that global inflation is a lot higher in other places, but how does this change your investment strategy when you look at the united states versus other places, especially when you look at what's just happened to expectations for where rates are going to be here in the united states i mean, steve showed that chart. does this change anything you would be telling people to do right now in the markets >> central banks are all running late for the train trying to board that train before it takes off. you see the ecb, you see the fed trying to get as much in terms of tightening in there as possible before we start to see

this rollover in growth. yet, we don't necessarily see a guaranteed recession in the u.s. that's a different case when we think about a much higher recession probability in areas like europe and slowing growth in china all of a sudden you do see that the u.s. does become a bit of the best house on a rough block or perhaps there is, as one of my colleagues said, a bit of a tina trade when it comes to u.s. stocks not necessarily the u.s. is looking as rosie or optimistic but when you compare it to other global markets and you factor in the higher dollar, it's a real challenge to want to lean in too heavily to international markets. >> austin, to 13spend 2 trillion less, i guess that means you spent 2 trillion the previous year, that's a big number. obviously it was -- previous administrations spent money on the pandemic as well, what's the real crux of the soup that we're

in right now, do you think, austin m2 growth? was it the fed miscalculated we did spend too much during the pandemic the supply chain labor issues it's all above policy mistakes, fiscal or monetary, got us to numbers we haven't seen for 25, 30, 40 years? >> yeah. look, i somewhat agree with that and it's partly all of the above. the one thing with the fed's action now that i'd like to remind everybody is numbers like this where it's all in shelter does bring a certain clarity of mission to the fed, which is they're disappointed that cpi core inflation is higher than what they wanted but housing is a part of the economy that the fed's traditional rate increases directly affect. so when it's a comeback of services, the fed is in a little bit of a difficult position because if we're over heating on

the service sector side, interest rates don't really have a direct impact on that. if what we're seeing is housing driving up inflation, the fed is going to just keep raising the rates to try to squeeze the housing market and get the inflation out of it. so i kind of think that's what we have. >> austin, it's that look, the same thing with the balance sheet. they had so many of the mortgage-backed securities that they owned they're involved in the housing market in a lot of different ways >> and i think also you have to keep in mind that when people purchase homes, they typically do it with loans, with mortgages and the inverting yield curve is very, very bad sign that the fed's policy rates are not translating because the market, the rates market the fed determines the policy rate the term is controlled by the market it's pricing us in like japan right now. >> thank you

i want to thank everyone nancy, mira, austin, tyler, steve and rick i mean -- >> andrew and i? >> mack, for all you do. >> out to the west coast where our friend jim cramer joins us now. he is in seattle this morning. want to get his take on what has been hotter inflation, jim i think the market expected, you may have expected. what do you think of this? >> look, i look at the futures as the same buy. it's really incredible how you can try to roll back whole moves that have been put on for the last eight days for a number that is why the fed is calling .75. food is the leader i don't know, food could be stabilizing here i question whether if you listen to diana olick's excellent report, not seeing relief in housing. we saw relief in any electricity that's per se. we're looking at company's

stocks falling short even as almost every one of the numbers i just mensed wtioned would be one month from now i'm not concerned the fed is going to overdo it obviously what i care about is they stop this, we arrest things, we get it so that futures, down 1.3. what are we going to do? is this the time to sell tech because of this number no, but that's what the market does the market is so stupid, andrew, it's pain zbll jim, we had savita on from b of a who i think is quite brilliant she has a view you might disagree with the view she said, i wouldn't own tech right now. i wouldn't own the s&p 500 right now was her perspective. she thinks the fed is going to continue to have to raise interest rates she said this before we got this hot number and her view is own

industrials, maybe a little health care, everything else sort of off limits. >> has she seen the more than 40% decline in semiconductors? has she looked at the average of the faang stocks which is selling between 19 to 22 times earnings i'm not quite sure i'm an individual stock guy and i know that nvidia on the board is probably 40 times earnings. the rest of the stocks are selling -- most of them are selling micron 6 times earnings, advanced micron 19 times earnings the banks are big winners here they've been winners here for weeks. no one seems to acknowledge it people selling off why? because there's a possibility there will be an increase in defaults there sure hasn't. if you look at futures, get out. >> what are you doing? >> isn't the argument, look, the fed -- >> it's happened. >> but the question is it may

have already happened. the question is is it going to continue to happen or is it going to stay flat where it is if the fed is going to have to continue to raise rates at this pace i mean, part of this is optimism in the market that maybe they wouldn't i'm not sure that that is true anymore. >> well, i mean, if you look at the futures that we're watching on the board, the optimism is gone they've erased everything we've had in the last eight days the reason this is happening is because it looks like the fed is somehow behind the curve again this nonsense has to stop. we've had a great rally from the bottom based on the idea that we are seeing not peak inflation but inflation that can be dealt with by the fed. diana olick's report which is about rents coming down is completely ignored by this the idea the dow should be down 1.5. i want to know which dow stocks should be down 1.5 which ones look, i just need a name

give me one darn name that should be down that much are we going to be ruled by the futures which have been wrong for the year are we going to be ruled by the individual companies you want to buy disney no, i'm really worried about the fed. what do you mean what kind of broad brush address is that. this is not a rothgo this is a rembrandt. >> jim cramer in seattle big show later today >> you should sell starbucks on that you should sell it because -- let me come back. >> and you have starbucks. a little bit later on "mad money" as well as the ceo of costco we're looking forward to watching both of those big interviews, jim. >> right now for more on the markets, joining us is joanne feeney she's a partner and portfolio manager at adviser's capital management what do you think? these numbers coming as a shock

to the markets looking at the fed futures now anticipating quite a bit longer and higher in terms of where the fed's going to have to keep rates. what do you do here? >> yeah, good morning, becky i think the markets are finally realizing that the fed has a difficult task ahead of them they're going to have to keep raising rates to make sure inflation rates are the anchor and that creates a challenge for investors. we recommend higher quality names and for those already in retirement, names that generate dividends, not just decent dividends but dividends that can rise with the rate of inflation. >> we are looking at futures at this point down by more than 470 points we were up more than 250 points more than we got these numbers 20 minutes ago it's amazing how quickly mr. market can change his mind

>> the u.s. economy is facing real shocks. we've moved on from an energy shock. prices have come down. what we're seeing are ramifications of the labor shochblgt from covid, women leaving the workforce. this thing is lingering. you combine that with the supply chain problems emanating through the housing market, for example, and the labor shortage is complicating hotels, for example, because they can't open up all rooms we have shortages that showed up in the cpi report as higher costs of leisure activities. it's in the services now not just in the goods trade. for investors they need to look at today potentially as an opportunity but recognize that things are going to be volatile as the shock plays through it's going to take a while to get out of this, but there are opportunities out there. we can talk about individual names if you like, but it's definitely a volatile time and investors need to be patient. >> sure. toss out a couple of names if

there's anything you like? >> sure. long term secular growth companies like an amazon or microsoft are very good places to be. one offers a dividend, one doesn't. also, you know, for recession proving, something like a target and a t.j. max we're going to see mid level consumers shift down to save money. also the luxury ends are also pretty good. the wealth effect of high prices isn't as severe for the higher end consumer something like a williams and sonoma you want to build income into the portfolios an adve, mcdonald's is going to be a good recession protecting play and offers a bit of a dividend. >> joanne, steve liesman pointed out there's an 80% chance figured into the market that the fed will raise by 75 basis points next week the only surprise here is the other 20% has them raising 100

basis points what would happen to the markets if the fed raises by 100 basis points >> well, i think that would be a negative surprise to the markets. i think they then worry that rates are going to go even higher than what's currently priced in a year out from now. that would con strain things people might worry that firms will pull back on the capital investments we're doing with the marginally higher cost of capital. i think that would lower the growth forecast over the next year if the fed raised by that much i think 75 basis points still probably, you know, extremely likely i don't really anticipate that 100 basis points but it does serve as a warning that investors need to be prepared for things to get worse before they get better. again, most investors should be looking at a year, two, three, four year time horizon they need to look beyond this crisis the pull back might be an opportunity to say, you know what, i want to buy this certain stock. it rallied too much. let me jump in and grab it.

>> joanne, thank you if folks want to take a look at the numbers. the dow futures indicated down by 511 s&p 500 down by 83 and nasdaq off by 147 the cpi number showed an increase of 0.1% markets had been expecting down 0.1% year over year, 8.3% we'll pick up with more coverage. >> the light at the end of the tunnel is a train. >> there you go. we'll see you tomorrow good tuesday morning welcome to "squawk on the street." i'm carl quintanilla and david and cramer is in seattle energy costs not enough to offset higher prices on shelter, new care, stocks open red. the two-year above 3.7 we'll begin with the hotter than expected cpi jim, you