treasuries not seeing highs seen in a decade. back to work with mixed reviews. new numbers on americans heading back to the office it's tuesday, september 20th summer is just about over. "squawk box" begins right now. good morning 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. let's take a look at what is happening with the equities. things started out in the green early this morning 3:00 a.m now the dow futures have turned down once again. you are talking about a decline

of triple digits for the dow 102. s&p futures off 16 nasdaq down by 61. yesterday at this time, we were looking at the futures in the red and markets did finish up for the day. if you are looking at the futures this morning, we were looking at a positive outlook two or three hours ago it turned at 4:00 a.m. we have been under pressure since. the big part of the story is treasury yields. yesterday, yields ticked higher. you saw pressure on stocks this morning, the 10-year treasury is at 3.56% that's the highest we have seen in 11 years. you have to go back to 2011. we crossed that barrier yesterday morning. 23 hours ago you were looking when we crossed above the highest levels the 2-year treasury at 3.975%. front page story in the journal that lays out how it is more

attractive to look at bonds again than markets i think a study showing 16% of the s&p 500 is yielding higher than the 2-year treasury 20her than the 10-year treasury if you want to look at risk/reward scenarios, bonds are looking hot again. >> we had -- >> guaranteed money from the government >> we had that conversation for the last week specifically the 2-year treasury. people are saying hey. you know, i'm not going, oh, my gosh 4% 4% for two years risk free. >> not terrible. >> people have been talking about stocks. >> you lose. >> you can go down 5% in a day as we have seen. we have been talking about that. i think it is funny when the journal writes that lead story 4% is not bad for two years.

>> i like the numbers. we talk to them and they point out how few of the stocks yield something higher >> you pbuy a stock -- >> you remember 15 years ago a cd for 5.5%. that was great now i'm aging myself >> you are not >> now it is a good deal >> you remember when i used to walk to school uphill both ways? i told you, , triple tax-free bonds 13%. >> amazingreturn i told you and i was trying to sell them to people. you know what people wanted? floating rate bonds. they floated no one wanted to lock in 12% tax-free >> sign right now for that. >> oh, my god. >> how much can i buy? >> you would clean out every

municipality and they were -- there was no risk now we know. >> we have been talking about the fmoc meeting and the fed is not the only global central bank in the news. china central bank keeping the key one-year and five-year prime rates unchanged. in europe, sweden central bank hiking rates saying inflation is too high germany reporting producer prices soared nearly 46% year over year just last month with the headline number driven by soaring economic costs of when yyou strip out energy, the core rose 13%.

>> that's a key difference when you heard 46 you thought natural gas or energy in germany. when you factor it out >> the european banks are behind the curve. why you see them moving 100 basis points because the dollar is crushing everybody's currency >> are you factoring out all of the down stream effects of energy >> no. >> it is still all there you are taking out the nominal it is still what is moving in corporate news, a warning from ford. auto giant telling investors it will incur an extra $1 billion in costs during the third quarter. the company blaming inflation and supply chain it is dealing with parts shortages impacting 45,000 vehicles mostly high margin trucks and

suvs which have not been able to reach dealers. they are saying the vehicles should be delivered in the fourth quarter and rival gm -- ford had been doing better with the inventory and had fire over in japan supplier a year ago that caused them to be able to fill. they have so many suppliers. >> you know what ithought when i heard this story we talked about every other industry that couldn't keep up with demand and all of a sudden, demand shifted and the stuff was here and you look at the retailers and any of the different industries and it made me think i want to wait before i buy a new car. you will go from a six-month wait and all of a sudden, the tens of thousands of cars almost ready to go will flood on the lots at the same time. >> you know what it is called?

the bull-whip effect you know why i know? studying up for the supply chain conference with sal. i'm studying and learning about just in time and just in case and inventory. all of those. >> i don't know if we will have a shortage i think we will have a shortage. >> used car prices came down for the first time in a year. >> so many people have been holding off and waiting. i think there is a lot of folks with a lot of cash i think two years from now, maybe. right now, there is still a moment. >> i would give it six months to a year i think a year once they get the components for the cars sitting there by the way, these are high margin vehicles waiting. >> you have that happen at the same time of the slowdown with the consumer and consumer thinking i need a used car instead of new

>> leases. >> a lot of people have been waiting. >> how many parts in a gasoline powered car? how many parts 30,000 30,000 parts do you know how many tier one or tier two suppliers thousands. one crappy part out of 30,000 that you can't get. >> in this case, it is chips >> mostly chips. it could be chips. 30,000 only one has to be -- and one supplier dealing with covid or labor or whatever it is. >> shutdowns >> right >> do you have questions supply chain questions >> thank you, professor. to @joesquawk? >> right we have other news nikola ceo had concerns of joining the company because he thought the founder was in his

words prone to exaggeration and public statements. mark russell made those statements in the are securities trial. before and after nikola went public, milton lied to the public about the status of trucks and technology. they point to comments on social media and television interviews. milton resigned in 2020 and pleaded not guilty that stock up 3.7% we have other legal news for you. elon musk's lawyers deposing jack dorsey today. according it to the court filing musk is locked in the legal battle with twitter for the $44 billion to pewbuy the company a he wants to terminate it dorsey stepped down as ceo last year he had been a supporter of musk's bid dorsey will be questioned by lawyers from both sides today via zoom welcome to the new world >> i'm overflowing with

information. guess how many suppliers mckenzie estimates for automakers in 18,000 when you try to track down tier two or three guess what they won't tell you because all of these other suppliers are afraid they will go around and get rid of the middle man to save money it is impossible to track. >> this is good. >> news you can't use. good >> what do you mean you can't use it that's what you say about sports when i talk about sports this is business you don't like anything. this is about business why is this news you can't use >> what am i going to do with this >> you heard about ford. factor it into your thinking coming up, treasury yields

i lost last night. you forced me to talk about sports you see who is really good this year the bills. don't you think? >> i was going to say the jets >> treasury yields hitting levels we haven't seen in a decade we will talk about that next as we head to break, check out the s&p winners and losers you are watching "squawk box" on cnbc >> announcer: this cnbc program is sponsored by ibm. ibm. let's create of compliance controls with the help of ai. now you're making smarter decisions faster. operating costs are lower. and everyone from your auditors to your bankers feels like a million bucks. let's create smarter ways of putting your data to work.

ibm. let's create (vo) while you may not be closing on a business deal while taking your mother and daughter on a once-in-a-lifetime adventure — your life is just as unique. your raymond james financial advisor gets to know you, your dreams, and the way you care for those you love.

so you can live your life. that's life well planned.

hey! if we want to build the future, we're going to need some things. like a high-speed internet connection that can turn my ideas into reality. like the skills to become the world's most powerful coder. way more space to collaborate. through project up, comcast is committing $1b to open doors for the next generation so they can build a future of unlimited possibilities.

welcome back to "squawk box. take a look at oil prices. wti is at $85.78 we are following the energy cri crisis in europe germany is trying to buy lng from qatar to replace russian gas. the talks with the two nations have not been easy with disagreements over length of contracts and pricing. those close to the talks say the compromise is expected soon. europe's biggest economy aims to replace all russian energy imports by as soon as 2024 treasury yields surging ahead of the fed meeting the 10-year treasury we have not seen since 2011.

by the way, the 2-year treasury at its highest level since september of 2007. joining us rights now is mark grant. mark, you put out a concerning note where you talked about a situation where we're damned if we do and damned if we don't you want to plexplain that >> certainly the fed is raising rates aggressively to combat inflation which is, in my mind, one factor, but not the only factor. raising interest rates will have a tremendous effect and negative effect on corporate revenue and corporate profits and mortgage rates at 6.3% now for a house. it will have a very bad effect, in my opinion, on as i said corporate earnings and also the bond markets are going to go up. up in yield and down in price

which also will have a very negative effect on savers and investors. i think the fed is way too focused on inflation by itself and they need to consider what it will do with the raising of interest rates and what it will do to the rest of the economy or risk throwing us into recession causing bankruptcy with high-yield companies and it will be a very difficult time so we're damned, as you said, becky, both ways. >> i think about that. it puts the fed in the position of choosing winners and losers, i guess. you could say the high yield positions thinking these rates will never change. when you look at inflation, it kills every company. including small businesses that risk going out of business because they can't keep up with labor and input costs. >> the best move the fed can make is to say we're going to

raise interest rates this time the consensus is 75 basis points and then say we are not raising rates again until the first of the year so the markets can readjust and companies can readjust and borrowing can readjust we don't get thrown into some recession because the fed is combating inflation and not paying attention to the corporate market >> i hear your point i want to dig deeper into the implications is this a case of the market not listening to what jay powell has been saying for some time? they have been saying they will raise rates. every fed speaker i listen to said those rates will be higher than the market is anticipating. they will lastigher for longer if you haven't readjusted already, were you a fool because you haven't believed the fed >> becky, it is not the question

of believing it, but it is an opportunity of refinancing your debt you can listen to jay powell and i do, but the fed has to pay attention to what their actions will do to the entire economy otherwise we're going to risk getting thrown into recession. the question is higher inflation or recession more damaging to the american economy also it will raise the rates for our government's borrowing you know, all across the board, there are two sides to the question the fed is ignoring the side of the question of what it does to the economy when they're in the rush to raise rates just to combat inflation inflation is one issue, but i wish the fed would concentrate on the entire package and not just the one issue of inflation. >> people will argue there's bad

and worse, mark. what's the worst thing is both at the same time that's why stagflation is so horrible what you described is the fed's biggest nightmare. everybody is aware of the volcker days of stop/start and arthur burns who have gone down in history as the way not to run the fed. those guys miller, burns. we talk about the mistakes they made that put us in the horrible position if you read this piece in the journal, powell had a big long peach re speech ready to go and scrapped it i'll accept recession to cure inflation. he is following volcker's playbook you think that is wrong. the stop/start method is the way to go, but there is great risk an associated with that.

>> they are doing two things they are raising rates and cutting back on the balance sheet. we have parts of the economy based on the 10-year treasury as the benchmark. maybe what they should be doing is, you know, raising rates in the short-term, but making buying more things in the 10-year treasury to keep that interest rate in reasonable line because 6.3% mortgage rate translates into personal housing, but into corporate real estate and it will cause a great problem in the real estate market and refinancing and high yield bonds. everybody knew this was coming, but i think the fed would be much better off to say we're raising rates 75 basis points now, but not going to raise rates until 2023 so the markets

can adjust to what the fed is doing. otherwise, as you said and i've said, we risk going into some kind of recession that could be far worse than having high inflation. >> that's the question is it? people will err on the side of recession. inflation is so insidious and long lasting than recession. a short-lived recession.% they decided to do that, mark. what you are describing, they know that's where they're headed and they accepted that if that's what they need to do to wring out inflation and inflation expectation. last time we did it, it lasted 40 years. >> right i think they are making the wrong decision, joe. that's my opinion. i think they should say we're raising rates 75 and we will consider the data and the things the fed says, but we're not

going to raise rates again until 2023 so the economy can adjust borrowing can adjust as well and an expectation adjusted to reality. if you just keep bumping it every time and every time and every time, then i think it causes the real problem for the entire economy and while it's been said that inflation is the tax on the economy, recession is probably a worse tax on the economy. i think the fed needs to understand and recognize both sides of the equation, not just one side >> this is the debate we're in right now. as soon as things got compl compl complicated, we knew people would come from all sides from the fed. this is how we are seeing it play out joe said yesterday we now have people saying raise no more after this one and other people calling for anywhere from 100 to

200 basis points they are looking for. it will get complicated and tricky for the fed you bet the politicians will start coming for them, too it will be interesting from here mark, thanks go ahead >> becky, it is not good for the markets. it will hurt the stock market. >> take your medicine. we lived high off the hog. if you get a year-long inflation and cure inflation for the next 20 years that's what thaey are thinking. >> question is do you get a one-year recession or longer >> unemployment versus a decade of hyper inflation the market goes nowhere. we were at 1,000 in '69. we went nowhere for 13 years, mark not in the 1982. >> we need a balance we need the fed to consider the

entire picture and not just the inflation picture. of course, joe, this morning is dangerous for me because of the bull-whip and i don't know what you will do. >> you are not wearing rose-colored glasses >> he swapped them with elton this morning >> you know, you all are such shining stars, i have to protect my eyes. >> there you go. mark, thank you. great to see you this morning. >> you, too, becky god bless. coming up, why the beyond meat coo is finding himself in a lot of trouble after attending a college football game. you have to hear what he was trying to eat. first, a reminder. join us at delivering alpha. the investment event of the year is happening next wednesday. goo liriala. tdevengphcom to register stay tuned

we're coming right back. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. go gorgeous reliable grid. go emerson software. go science people. go breakthrough meds and safe science. go space age welds for super silent cars. go big. or go home. from software that delivers new cures at warp speed, to technat makes clean energy reliable, emerson innovation helps make the world healthier, safer, smarter and more sustainable. go boldly. emerson. ♪ ♪ discover sound that can truly move you in the 2022 grand wagoneer.

awarded best driver appeal by j.d. power. this is not just laundry. this is laundry that's smarter than the dial. this is ge profile smarter wash technology. fully optimized cleaning, no more guessing. this is smarter cleaning. this is ge profile.

welcome back to "squawk box. time for "executive edge." we start with major legal trouble perhaps for the beyond meat coo doug ramsey. different doug >> this was a crazy story. >> he was arrested for allegedly bu biting a man's nose at the college football game. i don't think he did that. i think it was a fight

something he resorted to a nose bite charged with battery the altercation happened in the parking garage near the razorbacks stadium he punched through the windshield after it made contact with his front tire. he got out and ramsey punched him and bit his nose ramsey has been the coo of beyond meat after three decades at tyson >> you are on the board and what do you do? >> i would look into details from what i heard, this is shocking >> you deal with the obvious comments that are going to be on twitter. >> the vegetarians >> yeah. then the canabol

have you been in a fight >> i have not. >> you are in pain and you try anything remember mike tyson bit off some guy's ear. >> he punched the back wind windshield >> you think it was a movie. >> college football. perhaps alcohol was involved have we decided? >> i don't know which is more concerning there was or wasn't? >> college stuff happens. people get toasted >> and in their cars driving away >> breaking the windshield >> fans from different divisions. >> all in self defense >> not just -- big fans on both sides of the contentious game. they yell things >> you are the coo of the publicly traded company. i remember college, too.

>> oklahoma will come to town and those guys were ready. rough necks in colorado. we're toasted for a different reason >> this is one of those things only the new york post can do this story well. let's wait >> yeah. wait until tomorrow. you think they will go for the cover on that? >> i think it is in the paper. >> it is sdis >> i didn't look at the post >> we don't have old news on squawk this was yesterday's news. >> it was a story for people to talk about it will continue it will be difficult for the board. >> coo they may have a new coo in mind. they have other issues, right? >> that whole business is a tough business if the story wasn't on the front, the queen might have made

it hard for that story >> the body of the paper if it is not anywhere, it might be tomorrow. >> we'll see when we come back, futures are pointing to a lower open today. we will talk about the expectation for the big fed decision right now, dow off 95. nasdaq off 54. s&p down 14. we were in positive territory a couple of hours ago. anything goes once the trading session opens. you saw that yesterday first, throughout hispanic heritage month, we are celebrating our contributes. here is silvana henao. when i first came to the country, i only spoke spanish. once i learned english, i only wanted to speak english. my mom assured me well held on the roots and spoke spanish at

home i know i speak two languages and if someone needs help, i can help them and translate for them i think throughout life, it opened doors for me, especially in my caeriv ire gen'm bil bilingual. i feel it gives me double the power. >> announcer: executive edge is sponsored by at&t business at&t 5g is fast, reliable and secure oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic i labra-dore you round of a-paws at&t 5g is fast, reliable and secure for your business.

power e*trade's easy-to-use tools like dynamic charting and risk-reward analysis help make trading feel effortless and its customizable scans with social sentiment help you find and unlock opportunities in the market with powerful, easy-to-use tools power e*trade makes complex trading easier react to fast-moving markets with dynamic charting and a futures ladder that lets you place, flatten, or reverse orders so you won't miss an opportunity your shipping manager left to “find themself.” leaving you lost. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire

still to come, wall street bankers worry about shrinking bonuses. we have details next don't miss our interview with leon cooperman. we have the latest from him on the interest rate hike from the ayd. st tuned you are watching "squawk box" and this is cnbc

with my hectic life you'd think retirement would be the last thing on my mind. hey mom, can i go play video games? sure, after homework. thankfully, voya provides comprehensive solutions and shows me how to get the most out of my workplace benefits. what's the wifi password again? here you go. cool. thanks. no problem. voya helps me feel like i've got it all under control. because i do. oh she is good. voya. well planned. well invested. well protected. finding global investment opportunities requires experience across asset classes and markets. it demands an active, long-term approach focused on the potential for creating wealth and generating income. learn more at federatedhermesinc.com

this is not just laundry. this is laundry that's smarter than the dial. this is ge profile smarter wash technology. fully optimized cleaning, no more guessing. this is smarter cleaning. this is ge profile.

welcome back to "squawk box. a growing number of americans returning to the office this month. robert frank has the new numbers and mixed reviews. robert >> good morning, andrew. good news finally for new york city last week was the strongest back to office week for new york since the pandemic the average office occupancy for last week was 47%. a jump from the 38% the week before and much of the summer. wednesday hit 57.5% with dropoffs on monday and friday. the buses and rails hit a

post-covid record. rails carried 3.7 million people the number of workers who were still fully remote is 60%. that is way down from 28% this past spring. three days a week is the new normal the survey of employers through the partnership with new york city found 77% of employers will stay hybrid. by the end of the year, most will be three days a week. 11% will be in the office five days a week by the end of the year it varies by industry. not surprisingly real estate companies are expecting the highest at 82% by the end of the year. financial services are 62% tech industry is much lower at the bottom at 50%. if you look nationwide, the city with the highest in-office rate now is austin, texas at 61%.

the worst is san jose in california still under 40%. andrew >> thank you, robert it has been a tough year for wall street with markets taking a hit and inflation on the rise and slowdown of ipos bankers are worried about the bonuses drying up. we have katie with the latest. there will be a shrink in the bonus pool, but what will the layoff picture looks like at the same time? >> i'm sure people are apprehensive about that, andrew. we know from goldman sachs ceo david solomon, they will go through a layoff exercise any day now. although this was an annual thing for years, they put performance reviews on hold for the pandemic and they are reinstating that review and they

are getting rid of the bottom performers that 1% to 5% bracket. i think it is possible we will see that at other wall street firms especially as profitability falls and we continue to have so much market volatility volatility, of course, is good for the sales and trading desk in banking, you see that all-important m & a number the fall i looked at the numbers yesterday for year to date and they are way down year over year. >> how much of the goldman layoffs is a culling after a two or three-year period where they continued to hire during the pandemic and how much is related to the current state of affairs with m & a and other banking activity is? >> that is a key question. it is framed as a culling so far. they don't want people to get nervous about the other possibility you were talking

about. at the same time, they h historically had 40,000 people and they went up to 50,000 people during the pandemic with the hiring there is a reassessment of the staffing levels as well as many other places with the staffing levels especially as we not go into the "r" word, but recessionary period where people hunker down and still to the pp&l to weather the storm. >> the question is in the environment where unemployment rates are so low and everybody is looking for employees, to the extent that folks are going to lose jobs or not get the bonuses they expect, want, et cetera, are there other opportunities on the other side for these same people >> yeah. i looked at the johnson associates second quarter

report the third is not available yet they looked at sector. they looked at hedge funds and asset management and private equity and banking and broke it down into sales and trading. as always, and i remember doing this story often when i was full-time at cnbc. the great performers, especially on the trading desk, will always have job opportunities there is always the kcarve-out for people who are successful. in a year like this with rates activity and fixed income activity is wild and those that were able to capitalize will have great opportunity in the hedge fund side is where you see the greatest strength with bonus potential, according to johnson and associates. i talked to finance recruiters yesterday. they will have options investment bankers, tough year

one person i talked to said the thought bonuses could go down 50%. think about that last year in absolute terms, that is bad in relative terms, you have to consider how good last year was and how far one would have to fall from that at the same time, there is not, i think, a lot of mobility for those sort of the middle bracket of performance and are in a challenged area because you are seeing the challenges in traditional asset management you are seeing it in private equity >> that is what i would say. so many bankers graduated from banking to private equity. how do you still see that play out this christmas >> hard to know. i think it is a generally sort of depressing environment for people in all of the prognostications of bonus figures and deal activity through the end of the year are challenged. obviously the cost of capital is

likely to go up again on wednesday. starting on wednesday. in terms of all of the levered deal making that private equity does, that's going to be a lot more expensive they will have to be more selective about what they are doing. at the same time, i think that the expectations for recession if we have it, of course, different people have different opinions it will be manageable and relatively short and not terribly deep. i don't know if that is the optimism i'm hearing from even senior people in finance these firms need the talent. goldman sachs says the greatest assets walk out the door every night. at banks, at private equity shops, they needs to hang on to the best per formers that is how they weather the down turns. >> kate kelly, thank you coming up, stock picks to consider amid a ring rsiate

environment. stay tuned you are watching "squawk box" on cnbc she was supposed to be the one. i used to believe in the one. and then i realized, there's plenty of savings in the sea. what? amazon has daily deals, so every day is a chance to meet the deal that catches your eye, that shakes your soul, that changes your destiny. i'm gonna go check on those tater tots. learn all the ways to save with amazon.

this is not just laundry. this is laundry that's smarter than the dial. this is ge profile smarter wash technology. fully optimized cleaning, no more guessing. this is smarter cleaning. this is ge profile. - oh, the stock market is doing that fun thing again. news from the future: you're going to live through that about 10 more times! (laughs) no stress. i just discovered yieldstreet. they vet investments that don't ride the stock market rollercoaster. - [narrator] yieldstreet: private market investing.

welcome back a few stocks to highlight for you today, and our squawk picks segment. the feds meeting today, heather, just in turns of top down or macro, your favorite stocks, do you just buy and if they go lower buy more is this the three that we are going to talk about, i assume they do well in inflationary environments, but do they do well in inflationary environments >> you have to consider both of those now without a doubt. we look at companies that are

mispriced, and that's diamond hill's focus, striker, google or alphabet and sun opti, we think they are mispriced >> striker was known for a long time they have a broad portfolio, and we used to think no matter what the economic backdrop that health care would do well, and when elective surgeries were put off, but now you think they are back on? >> ultimately one of the

barehand fits sftryker provides is everything for the surgery suite, and that doesn't mean it won't recline during a recession airy period if we go through one, but if you look at their long-term earnings power, we are confident in the business in the long run >> other than orthopedic, can you describe some of the other ones, and i always think of minor surgery, that's what they do on something else, right, heather? >> yeah, definitely not something you want to do to yourself a lot of what stryker offers to the hospitals, and between people not electing to have surgeries or hospitals cutting back, a business like that can be impacted by those things, and so when we take that into

consideration we look at the long-term earnings power of a business and we think they have strong advantages because of the relationships it has built with hospitals and we think the management team is strong and has done a great job of investing back in the business, and following acquisition strategy when it makes sense >> how about sunopta >> yeah, when you see the trend moving towards things like almond milk and soy milk and oatmilk, we think it has tremendous growth ahead of it and it's not fully priced into the stock. particularly within the plant based milk category, i want to

make sure i got that right, and within plant-based milk, there's an advantage like in dairy or cow's milk to be based near your customers, and sunopta, they have a competitive advantage and more capacity as well. >> and alphabet, when it was over valued you harvested your gains. >> yeah, alphabet is one that has been impacted by a rising rate environment because it generates more cash flows f future, so as rates rise alphabet has been thrown out with a lot of companies that need a cash flow enable to

justify their valuations, and we expect them to generate cash, and we think there are changes going on on the marketing side of things that will lead more companies wanting to advertise on google than in the past they have nine different business lines with more than a billion users. >> great thanks, heather. >> thanks for having me. >> was ghoulsby there when you got your nba >> yeah. >> he has a short fuse >> i don't think i had him as a teacher. >> he has a short fuse >> opblnly at you, and sometime it's deserved. heather, thank you >> i don't know if that is reflective of austin

>> the eye of the beholders. he has a short fuse, and he would admit that ford is the latest company to warn investors of the high cost and chainsaw apply issues our news maker of the hour, leon cooperman. you are watching "squawk box" and you are watching cnbc. go.

go green. go wind turbines. go gorgeous reliable grid. go emerson software. go science people. go breakthrough meds and safe science. go space age welds for super silent cars. go big. or go home. from software that delivers new cures at warp speed, to technology that makes clean energy reliable, emerson innovation helps make the world healthier, safer, smarter and more sustainable. go boldly. emerson. ♪ ♪ ♪ ♪ ♪ ♪ welcome to ameriprise.

i'm sam morrison, my brother max recommended you. so my best friend sophie says you've been a huge help. at ameriprise financial, more than 9 out of 10 of our clients are likely to recommend us. our neighbors the garcia's, love working with you. because the advice we give is personalized. hey john reese, jr. how's your father doing? to help reach your goals with confidence. my sister told me so much about you. that's why it's more than advice worth listening to. it's advice worth talking about. ameriprise financial. this is not just laundry. this is laundry that's smarter than the dial. this is ge profile smarter wash technology. fully optimized cleaning, no more guessing. this is smarter cleaning. this is ge profile.

good morning stock futures pointing to losses ahead of the opening bell. that's where we were this time yesterday and of course the major averages went on to break two-day losing streaks and the central bank kicking off another policy meeting today a big rate hike is expected. the question now is how big? we will ask lee cooperman. lots to talk about with him. the second hour of "squawk box"

begins right now good morning and welcome back to "squawk box" right here on cnbc. we are live with the nasdaq markets. u.s. equity futures at this hour, i hate to say it, we have more red on the screen we are looking at 80 points down on the nasdaq, and s&p down about 14 points, and we have warnings where things are worse and things tkpgot better >> like yesterday. >> like yesterday. so here we are, and we will see where things land when the markets open and, more importantly, perhaps, where they close. >> could it get any worse, because today is the beginning of the two-day meeting >> i am prized with the 100

basis points instead of 75 >> well, maybe that's a good thing. >> i don't think they are going to say they are not going to do -- >> investors are widely -- they worked hard on this. investors are widely expecting 75 basis point, and powell will explain to the press and get a news statement, an economic projection, and a table that aggregates unemployment, gdp since june, and a lot has changed in the economy since then we know behind the scenes, according to the journal, he had a long torturous speech ready to go, and he said, you know, i am just going to say we are on this and will do what it takes, and we have been affected by that.

>> there are still a lot of people that didn't believe it going along -- >> people like barry or mark grant that said you need to -- >> some were feeling the pain. >> and some said you need to maybe make -- >> the question is has inflation been arrested, and i don't think we can say that with any certainty at any point it was not as high as it was >> what if it's just the supply chain? if it's labor and saw ystemic, and -- >> only if the money slows down you could gradually do that, and inflation is firmly planted at this point and getting into wages, and you look at the negotiations they just had with the railroads where it's a 20% increase, and it's a five-year contract, and this is back pay

they're getting. workers have a good case when they go to their bosses and say i need more money because i can't -- you are paying me less, effectively. >> if you are the boss are you going to hand over more money? >> no, because you are getting squeezed from every direction. >> that's the problem. >> but in some cases, because of the labor movement, you will have to pay more the yield on the benchmark 10-year treasury note. you can maybe get relatively guaranteed money otherwise if your office seems more crowded by the way, these days, it's not your imagination. it's the highest since before

the pandemic began according to a new survey of ten major metropolitan areas and more of the workforce is showing up to the office on tuesday and wednesdays >> amazon's football broadcast is spurring a jump in new prime subscriptions. according to an internal memo, last thursday's game attracted a new record number of prime subscriptions, and amazon has a contract to broadcast thursday night football, and they got more people coming in than even on prime day in some cases, maybe it's, quote, unquote, working. >> it's word that we are thinking 55% are showing up in the office and it's crowded in there now. is this the new normal >> life is relative. life is relative the truth is that even on a regular day, for the most part, if you look at the stats, it was

about 70%, because people would be traveling it's not 55% of 100%, it's sort of where you really are exactly. >> yeah. >> in the meantime, this is news, and it's fascinating, the king of spacs, and he's starting the process of winding down to spacs and those funds are going to be returned to shareholders he came close to agreements several times but valuation concerns and market volatility, obviously where we are now, ultimately preventing the deals. in "the posts" he says, they are one of many tools to support companies as they grow and we have long talked about the conundrum is that a spac because it's a blank check company with

a fuse attached to it, and in this case walking away from a deal, which might have been the better answer than the opposite because we are worried the number of sponsors were going to do any deal at any price, though there is a real check and balance in the system and shareholders could vote against a deal >> for a number of the spacs, folks walking away, it will cost them >> what ultimately happens is they spend an enormous amount of money to find a deal, negotiate a deal, and there are tens of millions of dollars. >> in this case -- no, the great economics of the spac are if you complete a deal, it's a fabulous

wealth creation device, beyond anything you can imagine >> for the founders. >> for the sponsor if you can get a deal, and this is an example of that, and you will see this across the board, and i think the spac universe is going to be littered with what might be described as broken deals and they will not only have lost out on a deal but millions of dollars, and the upside was tens of millions of dollars. that was the risk reward >> we should have known with the symbols, a "d" and an "f" for the ipos >> no, no, no. >> i am joking >> it was a, b, c, d -- >> yeah, it's "d" and "f"

getting wrapped up >> have not seen him in a while. >> no. >> let's get over to dom chu >> ford's stock is down nearly 5%, and late yesterday the automaker warned investors it expect to incur an additional $1 billion costs due to supply chain issues, and that is leading to part shortages and could affect production of 45,000 more vehicles, and it did reaffirm its full year forecast saying it expect to deliver the vehicles another premarket lagger is nike just around 15,000 shares of

volume is due to cutting it to an equal rate, and the target price goes to 110 and it was 125. and they have potential to demand erosion in some places. and then western digital downgraded the maker of data storage products gets cut to hold over at deutsche bank they don't see a lot of meaningful upside in the near to median term given the possible inventory issues and so western digital, nike and ford among the biggest premarket laggers in the s&p. back to you. >> thanks, dom social impact investing versus investing for maximum

return strive asset manager, vivek, will join us as they roll out a new fund then our big interview with billionaire investor, lee cooperman. you're watching "squawk box" on cnbc

launching a new fund today, and its corporate aim is in its words, maximizing value over all other agendas, and the company says its priority is to serve its clients' interests they are calling on the tech giant to base hiring on merit, and not on politics, and it's sending a message to disney. joining us now, strive founder and executive chair, vivek ramaswamy. there's 500 stocks that will be

in this new eftf is it possible to find any that are excellent, and is it possible or are they mutual exclusive? >> they are not mutual exclusive, and the goal is to drive hopefully positive change through engagement and not through selective divestment but through engagement, and that's what we wanted to demonstrate after launching the fund with the letters i sent to the boards of apple and disney, and a clear message to corporate american is simple, focus on deliver ring to your customers rather than pushing social and political

agendas. apple adopted a social equity audit, and the boards of these companies recommended the shareholders against adopting that proposal, and with the votes of black rock and other big asset managers, these proposals carry majority shareholder support, and my hope is to bring another shareholder voice to the table we are able to debate these ideas where behind closed doors people may have the same view we do, that view of them are saying it out in the open, and by saying it out loud we hope we bring that diversity to markets and boards. >> it can go wrong, and it doesn't always go wrong, but it's a focus on esg, and there's no doubt that we have handicapped our own domestic energy producers and given the keys of the kingdom to china, and any of the companies that

forced these changes, i can't see it across the board, s but i bet you can help me. >> you are right, on the e-prong, this affected the energy sector quite a bit, and we wrote a letter to chevron laying out of the issues the s-sprpong, and it's the soc movement and i asked why do these politicized behaviors best advance the business of your stock holders, and disney going to war with the state of florida over a piece of legislation, and the question is not if it's right for society, but the

question is to ask why is this in the best interest of the stock holders, and it was not in the best interest of the stock holders and that's the debate boards need to be having and i hope we can guide them back to having those debates, and that's the point of this fund and future funds >> what do you do as a company -- i wonder whether you are on the right side of history here, because i think there will be lots of instances where companies say to themselves especially in the environment today where customers are looking at these issues, but not just shareholders but customers are looking and saying i want to align with the company and i want to work at this company and i can get better talent that way, and all of these issues -- the fiduciary issue of the company -- i am not disputing

that in florida it was not handled as it should have been, but in the larger context, evs, why are people making evs, because there's an audience -- we are seeing it, customers desperately want evs, so how do you think about all that >> there are areas of agreement i have with you, and perhaps disagreements. the mission of the ev company is to make electric vehicles, and disney is an entertainment company, and that has nothing to do with teaching kids about transgender education in schools. >> go to apple, and that's why i say -- go back to apple and their hiring policies. >> let's talk about apple.

>> maybe there are customers out there that say i like the either owes of apple, and you could argue that this allows them to hire more and better people because people like to think about the company in these ways, and maybe you disagree, but the board could make a decision from a dfiduciary perspective to say this is what we want to say? >> this is not the boaction the board initially took, and a one size fits all approach, and they created legal liabilities that involve hiring attorneys to pay them $200 an hour to defend them, and the board wisely recommended against it, and the proposal carried a majority of shareholder support, and the

board still didn't take action and then they were pressured by outside groups, one of them called color of change, to take a different course of action your theory could be put in action, and that was not the motivation of color of change whose stated goal was to hold companies accountable for perpetuating white supremacy, and why is that in the best interest of apple. and i believe on your page in the deal book, at the end of the day, companies have to earn their social license to operate, and it's an interesting argument but not one that i agree with, and it's a retro argument, and it betrays both sides of the debate, and that was a different motivation and i think we would be better served if we have an

honest debate about whether businesses have to earn their social -- >> are you getting anywhere with sort of the advocacy groups for companies? the reason i bring that up, republicans apparently are going to launch a variety of investigations into the chamber of commerce based on the -- the u.s. chamber of commerce basically aligning with esg sort of interests in a lot of their statements and a stark contrast to what you think about the chamber of commerce, and it's usually a business roundtable, same thing, and according to sources republicans are going to look -- for example, esg said, today for many companies klei -- chamber of commerce, today for many companies climate affects

the long term value that requirement managers need to take into consideration, and you have the chamber in this sort of going along with it? >> at the end of the day when i think the issue does become politicized, it's probably bad for everybody involved, and i prefer addressing this issue through the market, through free speech and open debate in the market, both in the marketplace of ideas and corporate board rooms, and shareholder power is where to voice those views, and at the end of the day whether it's a non-profit or schevron or apple, and that's their right to do it as long as it's with their own money. >> you don't want to do the same thing black rock is doing with your -- you want to get so big with ets and offset voting

you are doing the same thing, aren't you >> we need to bring diversity to the table and our voice is a pro fiduciary voice, and it's focussing on products and services >> how do you think about value maximaization? >> we think about long-run maximaization, andrew, and we need to have that debate about what is in the best interest of the company, and what happened in the last couple of years is we are shoe horning has a trojan horse, and they are motivated by the long-run value but that's the justification firms are using to use social agendas, and the boards of those respective companies recommended against before they were forced into them >> doesn't the whole problem get fixed if nobody can vote your

shares for you, and just because i own a etf, and most don't vot and it's apathy, and now you have a situation where people who don't, it's not their money, are voting those shares, and that's the problem, and people are harnessing that and voting for people who don't care. >> that's a great point. t at the end of the day, it's pragmatically impossible for them to vote thousands of proxies. there's another dimension to this, too, that people forget. much of the influence that asset managers have through corporate boards is through what they call shareholder engagement, and they are saying we are your largest

shareholder or second largest shareholder and this is how we want to see you behave, and there's a study that observe -- think about the presumption about one man writing a letter to company ceos, and that letter drove more than the proxy voting that we see, and proxy voting has become a lightning rod >> you wouldn't have the soft influence if you did not have the tickets to back it up. most shareholders don't care, they don't care enough to vote, and it's a problem it's a problem we have had if you ask management, they would say, yeah, because it's not a democracy, and most of these people are intrusting us figuring we are going to do the best job, and by the way, they can sell the stock if they don't think we are doing the best for them >> can we leave the g. i am with the on the e and the s, and i mean, we want good

governments, right let's leave the g, and give that thought in the joe etg >> "g" is good >> how about the x etf, and that's the high school i went to thanks we will see you again soon made good from onto harvard and -- >> you did okay with yourself. >> i went to boulder and somehow ended up here. when we come back, lee cooperman joins us cooperman joins us "squawk box" will be right back. [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.

power e*trade's award-winning trading app makes trading easier. with its customizable options chain, easy-to-use tools, and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are.

power e*trade's easy-to-use tools make complex trading less complicated. custom scans help you find new trading opportunities. while an earnings tool helps you plan your trades and stay on top of the market. coming up, our can't miss atterview with lee cooperman th's after the break th's after the break "squawk box" coming right backa? a new way to transform our agency. strategy to execution. oh, looks my laces have come undone. a business card? yes, for ey. tech expertise? $2.5 billion invested. impressive. okay, you've convinced me, i'm back. just gonna... get this...

p our next guest says equities are the best place to be right now in the financial asset neighborhood, the only thing is he doesn't like the neighborhood joining us with an exclusive interview is lee cooperman lee, you have not liked stocks in a while and you have not liked much in the markets and you certainly have been right. a while ago you said 4800 for the s&p was not only the high watermark for this year but for years to come. is that still the case >> that's my general operating manual a dream was in the bible by joseph, and he said we are going to have seven lean years followed by seven fat years, and i am not making a prediction,

and there's an explosion of debt in the system and that debt has to be serviced and we are facing an environment of continued inflation, and rising interest rates and rising taxes, and the market is not cheap. it's a very strange market, you know the end of season sales have no fascination for me, and there are a lot stocks attractively priced, and so we are engaged in things that make sense >> it's a pretty dower outlook, and there are things going in the opposite direction, and if there are things you like, maybe we should talk about a few of them >> my criteria in stock selection, given my conservative view of the environment, and a certain percentage of stock

data, i am looking for companies that have been through a couple recessions and i am looking for paid dividends while holding a security, and the companies that have the capacity and willingness to buy back cheap stock, and i don't want them to tell me it's cheap, i want them to act and buy back stock under valued and i want quality and reliable management, and generally avoiding bonds you know, nobody, myself included, and certainly powell know how high rates have to go to stem inflation. >> that was a long laundry list. you have a high wish list. >> well, i can find them cigna, well managed and buying back and 12 times the earnings, and energy transfer, the man

puts his own money on the table and yield 6.5%, and the dividend is going to go up. and then a forecast of 50 to $60 a share, and stock trading around 240, and they just beat in the last quarter, the chairman just bought stock and paid cash for it i am having a decent year relative to the averages, and working too hard to be flat, and everything i am reading is an accomplishment we have 22% of the portfolio in energy, and discounting $65 oil and $3.50 gas, and i don't think we get anywhere near those levels anytime soon. and so a major gas producer in canada, and 20% in cash flow,

and stocks are worth well over 100. i am finding things to do. >> yeah, there are plenty of managers and investors that would take that in a heartbeat, and s&p off 19% from its high, and there are lots of people that would love to sign up for being flat right now and one of the things you just said caught my attention, the idea that you would stay away from bonds and you don't like treasuries, and people are saying, they are giving you a real yield, especially in the two-year this is with the full faith of the government behind it why would you stay away from all bonds at this point? >> two-year bonds are a place to park your cash, and -- >> that's flat, and the two-year is at 4% >> yeah, i could see that, but i have a better place to park my cash

i have a guy that does workforce lending and 1% a month has been paid weekly for nine years and never missed a payment i understand that. the point i could make is ever since the financial crisis, it's been screwed out, and prior to 2008, there was nominal gdp, and take your choice, is trend gdp 4%, and we have had financial suppression, and i think that's in the process of ending and i don't know how high rates go but i could find things in the stock market -- >> what is that guy's name, lee? is he in the waste management business in northern new jersey? do i know this guy >> you want me to tell you his name >> no, i was kidding >> you have a good sense of humor. >> don't mess with him make sure you pay on time --

>> he's paying lee >> only risk is 15% unemployment, and i don't think we are going anywhere. he has delivered over 1%, and i trust him and he worked for me over eight years and has done a good job, a smart guy, and picks up your trash. >> i don't think so. i don't think so but i appreciate your sense of humor. >> it's called base point and his name is eric snyder, and he has done a good job. and it's not in my interest to have everybody discover him, and he's an honest guy >> let's ask another question. on your wish list, you have got stock buybacks, and there are a lot of companies willing to do stock buybacks and there's new

legislation kicking in with the 1% tax >> pretty stupid legislation they leave in carat interests. stock buybacks is one method of management's use of cash flow. you know, there's no magic to buybacks if you are buying back something unvalued, you are creating value for your shareholders and why should the government try and discourage that. when a company buys back from an investor and they realize the gain and pays tax, and the government should keep his nose out of buybacks, and dr. henry singleton, he is now deceased, but he started that, and now everybody is copying him i am suspicious about everything these days, and the expression,

what the wise man does in the beginning the fool does at the end. it's easy to see where interest rates are versus multiples why they are buying back stock some companies are self-serving, and i don't understand why we are taxing buybacks, because it's just another use and flow >> how would you grade jay powell these days, and what you might tell him if he was listening to you right now >> i would give him a failing grade, could be honest with you. for two years, a bad grade i tend to listen to people, and one of the things he said two years ago was that the stock market was not over valued because of where interest rates were interest rates didn't make any sense, so rather than encourage

people to invest, he should have been realistic he said the market is elevated because of where interest rates are, and interest rates don't belong here in the long-term context, and you are supposed to get a return investment responds go back two years ago, if you put 10-year money in japan -- germany, you are getting a negative return. there was no return with mixed u.s. income at 130 rates are going to go up, and he has to be careful, and inflation is decelerating, and i am not a big bull on inflation, and people say under 2% in a year and i don't see it >> given the situation we are in today, recognizing that mistakes may have been made, what would you do if you were him >> i would raise rates 75 basis points and to be data dependant

and watch what it shows and not be dogmatic. >> isn't that what he is doing, kind of? >> yeah, now he is, and he's learning on the job. it was obvious to me inflation was not transitory, and i said that on your program >> you did >> 64% in the corporate cost of labor, and do you know labor have demands, and they want to work at home, and you have twice as many jobs available as there are workers, and that's not where the environment in labor demands are going to moderate, and we have a president on union jobs, and not jobs generally but union jobs i am a registered independent, but i don't find a democrat i would vote for for president, and there are a number of republicans i would vote for >> so you are not voting this time >> no, i voted, in 2016, i voted

for mitt romney, and in 2020 i voted for joe biden because trump, while he had better economic ideas, his behavior offended me. i think you can look at 2024 and you are going to see 10 or 12 candidates on both parties sitting on the stage in the debates, and i know who i would not vote for, but i will figure out who i will vote for. >> let's get back to the question of interest rates, and this is the huge story the markets are watching today and tomorrow, and there are people that really think the fed already has done so much it's starting to hurt the economy, and it's probably depending on which industries they are involved with, because you see things likehousing crashing, and other people are dealing with i am dealing with too much inflation coming in, whether that be labor or input costs

and the supply chain won't be fixed by the feds raising the rates, necessarily, and maybe it will be if they kill demand. >> you have to look at what is normal we are not in an environment of normal the inflation is going to be, at best, say, 3%, and so if you have 3% inflation and a couple percent of real growth, that would put the 10-year at 5%, and then you have a capital loss but i don't think that's the problem, interest rates. i went back and looked, and i was around and investing in 1972, and jpmorgan and u.s. trust, and k mart, it went bankrupt, 34 times the earnings, and sears row buck, 31 times earnings, and guess what the ten-year government with

6.5% for the year, 1972, and then you look at the excesses of 2000 in the technology bubble. you could buy google today and 17 times next year's earnings, and in relative times, that's -- >> you have a balance sheet from the reserve, and that's a lot of liquidity. >> i am assuming the fed, a strong dollar with the price of oil will reduce the recession, and when the recession hits in 2023 -- i have been steadfast saying no recession this year, but in 2023 a recession, and the market will head lower than it is presently >> lee, thank you. >> i have been lucky >> more than luck. >> working too hard to be flat, and that's good in this environment. we have to be realistic.

we borrow from the future. you know, in 1776, we had very little debt coming out of the revolutionary war, and in 2017, we have $20 trillion of debt, and now we have $30 trillion debt, and you have to worry about inflation if we are going to service this debt we want the government to be able to service their debt, and you don't always get what you want to get. >> this is true. lee cooperman, we are very glad we got you thank you. >> stay healthy. >> we'll talk soon coming up, how much is tiktok really worth to its investors, and should facebook and google be worried ouabt its worth? don't go anywhere. "squawk box" will be right back.

this is not just laundry. this is laundry that's smarter than the dial. this is ge profile smarter wash technology. fully optimized cleaning, no more guessing. this is smarter cleaning. this is ge profile.

. coming up, why has tiktok become so dominant and what can american social media companies hope to do about it? bradley tusk is going to be here to talk about that and more. stay tuned you're watching "squawk" on you're watching "squawk" on cnbc how did it feel compared to the ball you play? i like the feel right off the face. now let's go to the bunker. just like the one that i play. just as good, if not better. the driver. more poppy. more penetrating. it feels like a tour ball to me. it's a little bit straighter. let's see it on the greens.

i like the shape of the dimples. nothing like a nice dimple. maxfli. tour quality performance without the tour ball price. this is not just laundry. this is laundry that's smarter than the dial. this is ge profile smarter wash technology. fully optimized cleaning, no more guessing. this is smarter cleaning. this is ge profile. shh! stealth mode? yeah. [cricket sounds] shh! shh! [light switch clicks] don't pta meetings end at nine? -it ran... late. -oh got lost. the lexus rx built for modern families. ♪ ♪

welcome back to "squawk box. with plans for a tiktok ipo going nowhere the company's parent is now offering to buy back up to $3 billion worth of investors shares of a valuation of $300 billion. the company facing pressure from chinese regulators and u.s. lawmakers but the growth is making companies like google and meta sweating. joining us to talk about this is bradley tusk, tusk ventures ceo. nice to see you. we haven't seen you in a while would you invest in tiktok if you could? >> i would although it's interesting. last night at dinner i knew i was coming on to talk about this my kids, i asked them, give me your analysis of each platform facebook, they never even been on instagram to them is outdated.

they like tiktok right now but they like be real even more which may say while tiktok is at the top right now, 12 months from now it could be different. >> so if you had a dollar today, and you could invest it in tiktok, meta, google, i'll put be real on that list for those folks who don't know, be real is a new social media site that effectively is trying to encourage people, sort of force you to take a picture at a certain time, daily, so it's not -- you're not just showing the best of the world, you're showing the realistic version, why it's called be real, right. >> there's no likes. theoretically mitigates some of the harms of facebook and twitter. >> which do you like >> google overall because it has so much going on as a company it's not relying on the whims of a 16 and 13-year-old if you took them out of the mix, i would go with snap snap seems to be the one platform that they consistently

use all of the time no matter what else is happening in the world, no matter what other option pops up they're pretty consistently on top of snap. >> what is your sense -- there is a sort of investment thesis by some that tiktok eventually really will get blocked by u.s. regulators if that happens, it opens up lots of opportunities for all these other players. >> look, that's logical and makes sense, but we saw trump try to do that a couple years ago and nothing really came of it same thing, i asked my kids last nights, do you care that tiktok is a chinese company, not in the slightest, and i think the best corollary is dji, the biggest maker in the world and the drones have more potential to do harm than social media platforms, a chinese company, controls 76% of the u.s. market, and there's no regulation whatsoever to limit that we might talk a big game, but rarely does anything happen. >> you're an investor but also a policy guy

what do you think the right policy should be for a tiktok or you mentioned dgi? >> well, two things. one, for the platforms, it's eliminate section 230. the platforms should not be exempt from liability from the content that is posted on them and once they have to all of a sudden account for all of the toxic content then you'll see them doing a good job of content moderation that's number one. number two, with a chinese company specifically, yeah, i think we need to put, you know -- create a new type of tariff tariffs were on physical goods being shipped from one country to another now it's a digital tariff that accounts for the fact if there are products from other countries we don't want here or are afraid of, we make it -- we give consumers an incentive to not use them. >> you would do it through tariffs but wouldn't do it blocking them through national security grounds >> i think you could -- on a case-by-case basis use national security, but more broadly, you're going to have dozens and

dozens of companies that pop up like tiktok or like dgi from china or russia or other companies that worry us and trying to make every one a national security exception is hard to do and something with tariffs where you could apply it as you need to up and down, would be better. >> bradley tusc, ak, always goo see you. >> thank you for having me. >> we have a lot coming up including interviews with phil murp ahynd mike novagratz. big hour ahead

♪♪ this... is the planning effect. this is how it feels to know you have a wealth plan that covers everything that's important to you. this is what it's like to have a dedicated fidelity advisor looking at your full financial picture. making sure you have the right balance of risk and reward. and helping you plan for future generations. this is "the planning effect" from fidelity.

good morning the fed in focus we're getting ready for the big event with mike novogratz. ford warning investors it will incur an extra billion dollars in cost as it deals with supply chain issues plus breaking economic data on housing just 30 minutes away. the final hour of "squawk box" begins right now ♪ good morning and welcome to "squawk box" here on cnbc. live from the nasdaq market site in times square, i'm joe kernen with becky quick and andrew ross sorkin u.s. equity futures are down they were up earlier, then down more than that, now down about

100 points on the dow. the s&p was around 3900 at yesterday's close after a rebound that brought the session into positive territory by 4:00. you can see giving back about 16 points right now it all has to do with treasury yields and the big fed meeting coming up for the next two days, but the 2-year, 3.966, the 10-year, 3.545, an 11-year high on the 10-year. >> one of the top stock movers is ford. shares of the auto giant sliding after the company warned investors about much higher third quarter costs thanks to supply chain issues. phil lebeau joins us with more we knew there were supply chain issues out there, i think hearing the details put things in sharp perspective. >> becky, we've been hearing about this from a number of companies over the last several weeks and every time i would hear from somebody, they would say that's a one off, that's an

isolated situation i think this is emblematic of what we're seeing from manufactures in a number of different industries here's the news from ford. it is warning that its q3 profit is going to be lower than what analysts were expecting and they're expecting in the range of 1.4 to 1.7 billion. the fact set consensus was 2.98 bill be. supplier costs $1 billion higher than previously expected ford says it has 40 to 45,000 vehicles that have been built that are not yet delivered and won't be delivered in the eartthird quarter? why? they need certain components to allow them to sell the vehicles to their dealers the expects to sell the held vehicles in the fourth quarter, but it also says that the issues with the supply chain, they're not chip related they are primarily other components, other issues within the supply chain so as you take a look at shares of ford in the last year, it brings up the question, what do

we expect if we know the earthqthird quarter is light previously to expectations, what about the fourth quarter ford is reaffirming full-year earnings guidance plans to make between 11.5 and $12 billion the other automakers under pressure in sympathy with ford and with concerns about the supply chain remember the inventory of vehicles right now is -- it stands at 28 days here in the united states for some perspective, a normal inventory of new vehicles would be 65 to 70 vehicles. we're still light on the inventory in the auto industry and what we're seeing from ford this news shows that all of the industry is struggling with a fragile supply chain. >> we talked about this earlier. maybe i'm wrong. i was thinking at the time just knee-jerk reaction this morning when we discussed it, if you have all these tens of thousands of vehicles available in the

fourth quarter maybe that gets to the point where it will be easier to get a car in the fourth quarter maybe these cars are already sold. >> that is overstating it. it won't be. it is gradually improving, becky, the inventory of vehicles is gradually improving, but 28 days supply even if you get a flood of vehicles and we're not expecting a flood, we're expecting an increase, it may go up 30, 31 days supply. it takes a while to build it back up. typically, again, it's between 65 and 70 days supply. we're in an environment where if you want a vehicle, you've got to order it from your dealer or if you're doing it online you order from the automaker online and then you will get it we are not in the environment where you can go to a dealership - >> [ inaudible ] make things easier >> at least the next year no doubt about that everybody in the auto industry says they expect that this slow inventory situation to last well into '23 that's being optimistic.

look at what we're seeing with the supply chain it's just a case of lack of manpower, the costs are high, commodity costs are lie. you can't ramp up as much as people would like. >> are the new cars you're getting going to have issues i've heard some cases where they're putting out cars that when we get the chip, bring it back and we'll put it in for you. you're taking off with a car that will not have having >> you could have some of that generally speaking, the automakers -- and we're in an environment now where they are delivering what's been ordered generally speaking they want to make sure they have it complete. you don't have as many cases where they say, it's 95% done. it's not that it's unsafe to drive. then bring it back and we'll add some software or something like that generally speaking they want to make sure they have it completely done. >> phil, thank you obviously, really important issue and i misjudged it earlier this morning i was wrong thinking this could

fix things sooner than later thank you. >> you bet. the fed beginning its two-day meeting with expectations that it's going to hike rates by 75 basis points for a third time, but what's the terminal rate? how far will it go and how long and at what cost senior economics reporter steve liesman joins us with the latest results of the cnbc fed survey hey, steve >> good morning, joe wall street increasingly embracing the idea that the fed is going to hike and hold at a restrictive rate rather than the old idea that it would stop short and then cut quickly september cnbc fed survey finding that 75 basis points is the call for this week all of our 35 respondents except for two who put it at 100, but mostly saying 75, then that peak rate the terminal rate 4.26 now and that is 40 basis points higher than the july survey. the peak rate is hit in march of 2023

the important question we asked this time, how long will the fed hold there 11 months is the number with some saying as few as 3, some saying as many as 24 the recession risk 52% little changed for the next 12 months little changed from the prior survey john riding, the fed has realized the seriousness of the inflation problem and has pivoted to a messaging of a positive real policy rate for an extended period of time. that's the important part. here's the trajectory, 240, 238. we reached near 4% by the end of this year. go up to the peak rate in march. you can see there is some cuts built in that's the result of something in the fed turns quickly, but the average, thinking the fed stays and holds with cuts coming perhaps into 2024. rates stay high because the 35 respondents think that it's a long time for the fed to bring down inflation to its 2% target. we're 8.3. we go to 6.8 by the end of the year 3.6 by the end of 2023

it isn't until 2024, just 60% believe the fed hits the 2% target by the way, more than 80% of respondents did not change their inflation forecast over the next two years because of the inflation reduction act. along with the recession risk comes an expected rise in unemployment take a look at what's expected to happen. 3.7 now. go to 3.8, not too much damage by the end of this year but next year 4.4 it's still a historically low rate, but you often don't see a 1 percentage point increase from the bottom outside of a recession. while these respondents have argued over the past several months the fed was way behind the curve in tightening policy, many also now are concerned about the opposite, that it will go too far or further than it needs to go. joe? >> all right steve, we -- we don't have enough of these, i don't think how often do we see this, steve? it comes very quickly, doesn't it >> the survey that you're

saying >> no. i look forward to the survey the two-day meet where we -- they're always important and they've gotten more and more important. >> every six weeks i think a lot of people would like for the fed to be more in the background than it is right now, but i really think what is going on is there's a lot of uncertainty about the outlook and even though the fed has proved it's flawed at predicting the future, but it's probably the best you got the fed is wrong, then where do i go to figure out what's right if i look to the market i look to a market that's by the fed. it is also influenced right there. i think we need to get to a place where the fed is a little bit on cruise control and it's -- the idea it's going to get up and stay there for a while, i think is being baked into the market. businesses and investors might have the ability over some

period of time to have a little predictability once we get up to where we're going. >> it's in vogue now to think that the economy might be more stable than we give it credit for and we just do, you know, if we do supply side things and just take care of our ps and qnessqs in terms of job generation and things that are pro growth maybe we wouldn't need the fed to be such a big part of our lives and things would equilibrate and we would have a more stable economy. the fed's part of the problem, you don't ascribe to that, steve? >> i do, joe the only way i disagree a little bit, we have to get out of this sort of post-pandemic recovery period here, right, which is, we're still coming back, we're still down millions of jobs in some sectors we have too many workers in other sectors that probably shouldn't be there for the long haul we have a pretty dramatic adjustment going on. we have to concur the inflation and we have the ukrainian war, which has caused dramatic

issues i would like to see us have the debate and it's a good debate to have and i think it needs to happen i just don't know about right now when we're still in the adjustment period trying to figure out how we get back to where we were. >> maybe too many people still working at like the fed to be part of the problem. no i'm kidding, steve thank you. >> are you maybe that's right >> retrain them for some useful work coming up, new jersey governor phil murphy first a reminder to join us at deliver alpha. among the special guests i'll sit down with stan druckenmiller. join us next wednesday >> you know what, i'm glad that i found out. i would be there early september 28th go to deliveringalpha.com and register stay tuned. >> hello, is anybody he?er >> where is everyone >> you're watching "squawk box" >> you're watching "squawk box" on cnbc.me bonds inspire confid,

and some you grow to rely on. these are the bonds worth investing in. for over 50 years, pimco has reinvented fixed income to create opportunities for investors in every market environment. so, no matter what happens you can build the bonds that mean the most to you. pimco, a global leader in active fixed income.

pst. girl. you can do better. at least with your big-name wireless carrier. with xfinity mobile you can get unlimited for $30 per month on the nation's most reliable 5g network. they can even save you hundreds a year on your wireless bill over t-mobile, at&t, and verizon.

wow. i can do better! yes you can! i can do better, too! now you really can do better! switch to the fastest mobile service - xfinity mobile. now with the best price on two lines of unlimited. just $30 a line. millions have made the switch from the big three to the best kept secret in wireless: xfinity mobile. that means millions are saving hundreds a year with the fastest mobile service. and now, introducing, the best price for two lines of unlimited. just $30 per line. there are millions of happy campers out there. and this is the perfect time to join them... add a line to your existing plan, or see for yourself how easy it is to save by talking to our helpful switch squad at your local xfinity store today. . goldman sachs is poised to cut hundreds of jobs this month and the economic effects will be felt not only on wall street, but also in state houses like

new jersey's a financial downturn could strange the garden state's budget surplus we want to bring in new jersey governor phil murphy by the way, also want to give a shout-out to governor murphy because the three major ratings companies upgraded new jersey's credit this year, the latest by fitch ratings last week and fitch hasn't upgraded this state since 1992 governor, not often that we get to give shout-outs for this, but congratulations on getting that recognition from these ratings agencies >> becky, thank you. i've been dealing with rating agencies in one capacity or another for 40 years, and i know when they take you down, it's often hard and fast, but when they take you up it's a long journey. i'm proud of the fact that we've continued to deliver on the expectations that we put out there when we got into office now almost five years ago. we're gratified by the upgrades and hoping to continue to earn

more in the years ahead. >> part of the reasoning behind all of these upgrades came from just what's been done over the long term. you were able to make pension payments for the second year in a row. that's the first time the state has done that in 25 years. the other big issue is the $6 billion budget surplus that the state of new jersey has at this point. i think you're setting this aside for a rainy day. the question is are rainy days here when you hear about things like goldman sachs, when you see what's happening in inflation, do we need the budget surplus right now to survive some difficult days ahead >> yeah, i think we do is the short answer, and you're right, the budget i signed a couple months ago had a surplus of $6.8 billion. i think the budget the year before we got here was $440 million. by the way, on top of the $6.8 billion we have another over $5 billion in either debt avoidance or defeasance fund i thought the prior conversation that joe had on the prospects of a recession at about 50/50, that

seems right to me. we don't want get caught out new jersey has been caught out before, and we are determined not to get caught out again. our job is to make sure we deliver affordability, that we've got enough in the bank for a rainy day, and that we outperform other like states those are our obsessions right now. >> what do you see in the tax receipts at this point in we keep hearing about how the consumer is flush. we keep hearing how businesses are flush. everybody sees tough times ahead. what do you see in the day-to-day tax receipts? >> it's a he very weird environment. on the one hand you have real hurt at the kitchen table in terms of affordability which is why we backed the truck up on record property tax relief and free sales tax for back-to-school and other steps we've taken on the one hand. on the other hand we've had 21 months of growth, and the state

coffers continue to be strong. we're very much in this tale of two cities moment an we've been in it for several months now again, we're hoping for the best but bu but we're preparing for the worst. >> if you ask the business leaders they will tell you much higher odds of a recession chamber of commerce put out a survey that showed almost 70% of the business leaders think we're already in a recession 71% think the recession will last more than a year. more than 50%, 58% of the state's respondents think that new jersey's efforts to supmall businesses since the pandemic have been ineffective. what do you say to the business leaders? >> on the outlook i'm not as dire as they are a 50/50 chance of a recession within the next 18 months, is a pretty significant statement in and of itself. tea i'm not as dire as they are.

with all due respect i don't agree with them in terms of what we've done for small businesses. that doesn't mean we're patting ourselves on the back. i think we've delivered since the pandemic began something like $900 million to small businesses only new york and california have put more money on the street and they're bigger than we are secondly, we're not done we are constantly finding ways to deliver help to small businesses because we know they have been crushed, disproportionately in this pandemic and in the economic turmoil that resulted. >> we have a lot more people who are working at home these days we just looked smat survey data from this past week, which was get back to work week, and something like the high watermark in the middle of the week was 55% of office occupancy in new york city a lot of those people who aren't going to work are working still at home in new jersey and they have been for 2 1/2 years. some of them haven't set foot in the city again, and yet new york is still taking all of their tax dollars. is that a situation you think is

far? have you had conversations with new york about that? >> yeah. i don't think it's fair and we have had conversations you're absolutely right. we're in this very sort of transitional phase where you're either at home, you're at headquarters or maybe -- and i think this will increasingly be the case -- there will be what i would call plug and play operations that are sort of a hybrid, sort of a step in between. we know one wall street bank that will open something like that up in new jersey some time later this year. listen, the new jersey taxpayers and commuters are under assault and we're not going to let that stand, whether it's fighting back against congestion pricing on the one hand, again, we want -- we're all for mitigating climate change but do it in a fair way and doesn't double tax new jersey commuters or your fair point, we tried to do this through the u.s. supreme court and they rejected our challenge,

so we're going to try to do this through other statutory steps. we want to make sure our taxpayers get a fair deal and they're protected. by the way, the state of new jersey is protected. >> governor, to that point, though, sort of an interesting balance that i imagine you have to sort of balance beam situation, which is i imagine you have to want a strong new york city in manhattan to exist, because it creates the hub that has created the suburbs, the sprawl if you will, that has madenew jersey as successful a it is. you may disagree, new jersey is successful unto new york city. i don't think that's the truth i think that's the truth for part of new york and connecticut, frankly the issue if new york city becomes a complete failure as a city, and doesn't collect any tax dollars because everybody is doing their work in new jersey, over time -- >> doesn't collect dollars from people who don't come here. >> over time i imagine it

creates a bigger dilemma for new jersey, for connecticut and the state of new york collectively >> yeah. so joe, it's a very good point i want to say this unequivocally we root for new york city's success, period. period your point is very well taken. i think it's and both, by the way. both success in new york city and inside of the new jersey ecosystem. all we want is a fair deal whether you're a commuter or taxpayer, that's not -- getting a fair deal is not to say we don't root for new york city's success because we do. we always will but it isn't one or the other. it should be and both. >> i haven't said anything yet that was andrew, governor. >> sorry. >> the only thing i would say, did mrs. murphy tell you to grow your hair out on top that looks so much better. you look so good today was that the wife's idea what happened? >> i was not it was my barber's idea, and i'm sorry for transposing andrew and joe.

won't let that happen again. my barber said one day, she said, you have no hair why do you keep coming here and cutting it. >> like night and day. i don't know i think hollywood might steal the governor at some point. >> joe - >> or me yeah. >> there you go. >> quickly, we are hearing that gavin newsom, the governor of california, is preparing for a run for president, at least he will if you don't have president biden run again. california is not nearly the shape that new jersey is in. are you eyeing a national race >> no. listen, president biden has said publicly and privately to me in the white house a couple weeks ago, he's going. i take him on his word and said him, assuming he does go, he will have no stronger backer than yours truly and that to me is the base case right now and what we're assuming will happen. >> so he told you that he's definitely going, even though that's not what he told "60 minutes" this week - >> i shouldn't say that.

i don't want to put words in his mouth. i said to him, you said you're going, i take you on your word and assuming you go, there will be no stronger backer than yours truly. i want to make sure i get that right. >> governor phil murphy, state of new jersey, thank you, sir. >> thank you for having me coming up, a lot more this hour a roundup of this morning's biggest stock movers, breaking economic data on housing and a news minakg interview with investor mike novogratz, all investor mike novogratz, all straight aheadcience people. go breakthrough meds and safe science. go space age welds for super silent cars. go big. or go home. from software that delivers new cures at warp speed, to technology that makes clean energy reliable, emerson innovation helps make the world healthier, safer, smarter and more sustainable. go boldly. emerson. okay season 6! aw... this'll take forev—or not.

do i just focus on when things don't work, and not appreciate when they do? [dog groans] so whatever is at work to pull all this off, it's working. as are those earrings. ♪ ♪ even work works! i just booked this parking spot... this desk... and this conference room! i am filing status reports on an app that i made! i'm not even a coder! and it works!... i like your bag! [people cheer at concert] real-time ticket upgrade! meaning....i get to meet my childhood idol. that works. i named my dog joey fatone. co2 levels-- if i may! all this technology is helping the world work, so you can focus on making the world work better! so i say...lets work! ...or i think that's what we're both saying. when your digital solutions work, the world works. that's why the world works with servicenow. hey! whats good your highness?!

coming up, breaking economic news on housing and then we're going to be joined by billionaire investor mike novogratz. the futures this morning have taken a turn for the worse

we are looking at the dow down by about 187 points, s&p 500 down by 27, the nasdaq off by 95 we recovered from bigger losses like this yesterday morning to end the session higher we'll see what happens today ay tuned you're watching "squawk box. this is cnbc

(vo) while you may not be a pediatric surgeon volunteering your topiary talents at a children's hospital — your life is just as unique. your raymond james financial advisor gets to know you, your passions, and the way you give back. so you can live your life. that's life well planned.

we're seconds away from housing starts and building

permits. the futures about some of the worst levels that we've seen down more than 200 points again now. we've got the 10-year note 3.567 an 11-year high, just under 4% now on the 2-year note rick santelli follows this closely especially the yield curve and has the numbers. rick >> yes august read on housing starts, joe, expected to be around 1.45 million seasonally adjusted annualized units much stronger. haven't been able to say that much with regard to housing numbers. 1.575. that's a good number not when you consider in the rearview mirror june was 1, 599, 000. nonetheless it's a nice pop and if we look at permits, expecting a number around 1.6 million. a bit of a disappointment here

1, 517,000 last month a subtle revision to the upside, but definitely permits are definitely a disappointment there the last time we were this close to 1.5 million, you would have to go all the way back to august, august when it was 1.52. you have to go further back. we're going to go back to june where it was 1.3 million that's the last time comparable to these numbers mortgage rates at 6%, there's a lot of headwinds yesterday the national association of home builders sentiment index down for the ninth straight months at 46. we see, as you pointed out, 10-year note yields is at an 11-year high the eu, the bunds are 8.5-year high the big deal is technical because yesterday we closed above 3.48% in 10z that was the mid year high yield

close. that part of the yield curve popped, so did bunds they popped over 1.77 their mid june highs why is this important? it's a green light now we could all talk about the fed, how they're in control we could discuss whether they have a good plan there is something called bond rates. they might be incumbered but we have them nonetheless and market rates have on the long maturities catered to some buying buying around the globe, as people come, investors come, to look to the u.s. for best areas for capital preservation potentially and that has kept 10-year and 7-year to some extent, the mid part of the curve, yields lower. the fact that they have popped above their mid june high yields with all the other maturities does send the signal that maybe the yield curve will continue to steepen more dramatically in the future joe, back to you. >> all right rick, thanks diana olick joins us now with

more hi, diana. >> hey, joe. this is a nice surprise to the upside, but i think this is what happened here in august. really interesting divide out the single family versus multifamily most of the gain was multifamily up 28% month to month, but single family starts did see a bump up 3.4% why? take a look at what happened with the 30-year fixed in july and august we saw the 30-year fixed pull back close to 5% in august we haven't heard the ceo of dr horton say they saw a lot more people coming into their models in august because of that drop in rates and that there was a bump up inside contracts during august as we know, of course, in september it went right back up and we are now at 6.42%. but it was that august drop in mortgage rates that i think really juiced these numbers for the builders they saw more people coming in also, we got mortgage applications to buy a new home for august they jumped 17% in august month

to month they don't usually do that from july to august not seasonally adjusted but usually we see those applications come down from july to august. we saw this brief reprieve in the so-called housing recession. but i do believe when we get i september you're going to see numbers come back down again now we're back up over 6%. the question is what happens going forward? i think you saw that in the permits, the disappointments the builders are not expecting to see that kind of traffic going through this fall. we saw it in the builder sentiment numbers yesterday. they talked about the mortgage rates and issues, affordability for buyers, and those numbers were for september again, kind of an august blip, but going forward, we're going to see a bit more pain in the market back to you guys >> do you have a terminal rate in your mind on mortgage rates >> you know, i've asked a lot of people how high can they go? can we go to 7%? i think a lot depends on the fed a lot depends on the broader

economy. you don't want to see rates go above 7 or 8%. historically that has caused a massive downturn in the housing market i don't think the fed wants to see that right now there is still demand around 6%, as you saw below 6% in august, you could still get buyers in the door >> it all matter, doesn't it >> what you can afford to buy depends on what your monthly mortgage payment is. you can imagine everything could get marked down and that hurts okay another issue to worry about th thanks, diana >> our newsmaker of the morning, galaxy digital ceo mike novogratz. we might start with bitcoin and crypto, i want to get there, and maybe that's a good indicator of where the markets are heading with risk assets, but put your macro hat on for a moment given that fed is going to be meeting later today, what do you think jay powell should be doing what would you tell him if he was watching right now >> i think he threw us all off

track a little bit two meetings ago when he said i'm going to raise rates and pause and watch. you know, he had to backtrack. the last cpi number was bad, and i think he's going to go, i'm going to raise rates, stay vigilant and raise rates until i see inflation start to crack we have the tale of two economies. on the one hand, look at the fedex report or what you just heard about new jersey and how many businesses think they're going into recession on the other hand you have services economy booming and you still have really sticky inflation and owners with rent and labor. you have a settlement coming with the railroad workers. roughly 5 or 6% a year so i think he's in a tough position and he's going to have to stay hawkish. i don't think the markets will love it. that said we're starting - >> how long are we talking about? >> 75. they're going to go 75 basis points

i would be shocked if he goes 100. >> by the end of the year how high has he gone >> he's going to go 75, 75, and probably pause, 75, 75, 25 i think we're getting towards terminal rates at 4.5% priced in, 4 to 4.5 europe, you're kind of pollyanish to think you know where this is going to stop. we haven't had inflation since 1970s. there's all these mechanisms -- you know, i've got a stake in bojangles and it's interesting, right, you're a chicken business, food prices went way up, labor prices went way up, margins come down, you raise prices and that cycle just keeps going. you're seeing that in all businesses so i think really understanding inflation is a mystery to a lot of people in the markets because we haven't had it that's where i kind of think picking terminal rate is a difficult game right now. >> mike, as a result, though, of that prognostication, it has been bad, as you know, for all

risk assets, that means equities and also crypto. would you own either and i know you're heavy, i think both, or at least crypto? >> you know, i'm short equities in my, you know, personal account and against crypto i'm long crypto. crypto is a tale of two time frames in the short run we've got these macro headwinds and the markets trade poorly, right. you get a rally up and they come right back down. that's almost all macro. in the medium term, you see adoption you saw today the nasdaq announce they're going to do custody. ken griffin and city dell, ken is one of the sharpest guys on the planet announcing, you know, his new crypto exchange. blackrock getting engaged. so you're seeing this massive move where institutions are building infrastructure or investing in the space that's not directly buying bitcoin and thethereum yet, but it's laying the foundation for

an inevitability. >> is it true -- i mean work you ever think about hedging your crypto at this point in the same way you're hedging the market i think short equities, i could argue to you, at least short term, and maybe -- i could argue short term is going to be tough for equities that might be a good short right now. long term, you would like to be optimistic about equities over the next decade i would think in the same way you might want to be long term about crypto? >> we certainly, you know, move our positions up or down based on how we think the market is going to do. that said, we keep kind of a core long. we're a public company that has a crypto mandate so -- >> it's hard for you to answer - >> i wish i sold - >> the mandate - >> yes. >> if you didn't have the mandate how would you think about crypto >> you would be more neutral here, you know, you would be more neutral here and you would be waiting to see the fed pivot. i think you're going to see a big rally in crypto. >> what do you think the upside,

downside is in terms of equities and crypto and do you think that there's going to be a break in the correlation any time soon? >> you know, i think crypto -- let's start with bitcoin there's a put in bitcoin somewhere because you just see these institution all getting engaged slowly so when i see this adoption, when i see blackrock, you know, doing a deal with coinbase and beyond aladdin in the first quarter you know people are coming to buy. could bitcoin go lower of course it could i don't think there's a catastrophic fall in it. ethereum has had a pretty big move down. we've had the merge. the merge was an amazing accomplishments in lots of ways. it showed the decentralized community could accomplish something that's really complicated. we'll look back on that as something significant. ethereum had gone from 1,000 to 2,000 and now you've had a pullback it feels like 1250 should be the

bottom here and so i think they're close to the bottom than the top. alot is going to depend -- thi sounds crazy because you're looking at long-term investments that will depend on short-term data -- how the next few cpi numbers come out like the fed is kind of handcuffed to the next few cpi numbers. most likely, we know powell wants to pause you know, you hear the argument on your show or jeff gunlack, fed policy comes with a lag. it does come with a lag. jay powell knows that and balancing that for his credibility. i think we're closer to the end of the fixed income move, but to say that with huge confidence would be hue -- hubris >> no one couldhave predicted gold closed monday 1678. that blows your mind it blows my mind 4,000 years of consistent value. people make fun of crypto.

a lot of people that, you know, when crypto and gold were -- bitcoin and gold were at the same price, they staked their reputation on what was going to be better. at least bitcoin is still at, you know, whatever, 18,000, 19,000 gold is at 1600. do you have an explanation for that >> you know -- >> replaced by crypto? it's bizarre. >> i think the explanation really is, at the beginning of the year people did -- beginning of last year people didn't think you would be able to raise rates a lot and we're on our way to 4% so chairman powell and the rest of the global central bankers found their central bank courage, you know. they found the dna of a real central banker and are aggressively tightening rates around the world 100 basis points today in sweden so if -- the idea was you're buying a lot of these assets to fight inflation you have central

bankers fighting inflation and so - >> but 40-year high in inflation and you've got, you know, putin sending bombs near nuclear plants i mean, everything that you want is happening for gold and it's - >> yeah. other than the -- in the long run, gold will win and bitcoin will win if central bankers and governments revert back -- >> need go back -- okay. they're already getting pressure to stop. who knows. maybe they have -- it wouldn't take much to say oh, okay. >> the real disaster will be when one of our presidents appoints a treasury secretary that we all scratch our head, right. you can like or not like janet yellen but she's an ethical and smart and competent woman. you might agree or not agree with steve mnuchin, but he was well trained and knew what he was doing and doing what he thought was right. like we put smart, competent

people in those spots. the moment we put a political stoolie in one of those spots it's all over. >> okay. mike novogratz, thank you as always for joining us. appreciate it. >> be well, guys >> when we come back, we're going to head to the west coast and check in with jim cramer first, a reminder to join us at this year's delivering alpha event. among the special guests, i'm going to get the chance to sit down with carlisle co-founder david rubenstein and rockefeller university cio paula volent. just go to deliveringalpha.com to register. ay tuned you're watching "squawk box" and this is cnbc

if you wake up thinking about the market and want to make the right moves fast... get decision tech. for insights on when to buy and sell. and proactive alerts on market events. that's decision tech. only from fidelity. your record label is taking off. but so is your sound engineer. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire this is not just laundry. this is laundry that's smarter than the dial. this is ge profile smarter wash technology. fully optimized cleaning, no more guessing. this is smarter cleaning. this is ge profile.

still to come, jim cramer will join us with his take on the fed and the trading day ahead. then tonight on "mad money," don't miss jim's interviews with the ceos of salesforce, johnson & johnson, and nvidia. stay tuned stay tuned we'll be right back. for over 50 years, pimco has reinvented fixed income to create opportunities

for investors in every market environment. so, no matter what happens you can build the bonds that mean the most to you. pimco, a global leader in active fixed income.

all right. let's head out to san francisco where we find our jim cramer bright and early, or maybe we should say dark and early at this point i saw you tweet a couple of hours ago we are flirting with the 4% the stuck market rallies are

fake what happens when we hit 4%? >> well, i think at that point we can reconfigure taking it to 4 by the time we get to the fed meeting tomorrow. and that's why i felt any rally is phony and dispatient of that. the futures indeed were looking okay and joe said 4:00 things looked good then the treasury started moving again. i felt the moment to cooper man about whether 4% is good or not, he hesitated then he talked about a method for 4% a month but 4% is pretty good. that's why i thought it was so poignant >> preservation of capital. 4% over two years with a guaranteed buyer coming back in makes it a lot tougher to look at equities. wall street journal points that out as well. >> i think, as joe said, maybe they have a key note for the

obvious. it's such a competitive yield against almost every stock against the stocks with a dividend that is somewhat worrisome p. like with oils. lee said he was overweighted in oils, which makes so much sense to me. >> you were up two hours ago watching this, and you're in san francisco. are you sticking to the east coast time >> 2:30 a.m., set the alarm. my wife is here. she thought that was somewhat quizzical. >> jim, you work hard my friend. no harder than you guys. >> peloton, i don't know if you saw the news, they got a rower they announced it this morning 3,200 bucks. do you like peloton at this point? >> i happen to love the ceo. look, i'm not going to bite his nose off or anything but i do think he's going to take time before you can buy

peloton. there's so many stocks that are for sale i don't need that one. >> okay. >> like the bite your nose comment. >> i think it's interesting when lee says he's bearish. he did say he is bearish in the market, not individual stocks. and i think that's good. >> jim cramer on the west coast this morning don chew joins us. i don't know if we're getting the peloton rower. i don't think the bike gets as much as it should, andrew. >> 3,200 bucks is a lot. >> had it's more than the bike here's what i would say. if you're into rowing, i don't know -- i haven't seen it, so i can't make an educated judgment about what the product looks like but i will say this. the bike we have is great. it's awesome i don't think it gets as much

use as it should >> move all the clothes that's hanging on it. >> listen, i will also say, joe, i'm not -- look at me. i'm not the one who primarily uses that bike >> rowing is unpleasant the ski thing is unpleasant. it's all unpleasant, though. i was thinking of the rower. no, i don't like that. i just don't like exercise >> i would rather walk on a golf course >> yeah. that walk spoiled. it can be. >> it is, joe. movers-wise, big move in shares of what's happening with change health care. up 7% right now. a lot of volume picking up in the premarket. the health technology company had at one point been the subject of a doj inquiry with regard to whether united health could buy it a judge ruled they can go ahead with this particular deal. we'll watch what's happening here then let's move on to another

one we are keeping a close eye on norwegian up right now analysts upgraded it to a buy from a hold. a number of customers cancel and rebook at lower cancels down the line that's good news for norwegian cruise lines and then the shares of many of the drug companies closely tied to the pandemic covid through vaccine. shares of biontech, moderna, view va quarterbacks biden over the weekend declared the pandemic is over merck and pfizer taking a hit but to a lesser degree than smaller counterparts today it is roughly one quarter of its size from a year ago. we will keep an eye on the

covid-related stocks this weekend. back over to you >> novovax sounds like novogratz. >> it does >> cnn contributor brenda. brenda, deep down, looking at some of your comments, we have been in a rough trading environment really since jackson hole when chairman powell was so hawkish. but, in your view, are earnings estimates finally getting to the point where you think they need to be in terms of being lowered? do you think some of this may be in the stock market finally at this point >> yeah. we haven't seen earnings estimates actually come down very much for next year for 2023 but i feel like sentiment is very similar in many ways to where it was in mid-june we think about the angst over what's coming in 2023 and what

might be coming in 2024. so i feel like when we look at where the market is from a valuation standpoint, i think we're also pricing in a decline in earnings next year. so i don't think -- kwryou know think when we look at the market now we can get more constructive in terms of finding opportunities, and also knowing once we get past wednesday we're going to be very close to the end of this rate hiking cycle. we think it is likely to end by the end of this year not that rates are going to come down but the fed will be done raising interest rates i think that will be an important point for the market in terms of determining what comes next, assessing the environment that we're in. and i think it could be an opportunity for a lot of asset allocators with cash on the sidelines to start moving back into both stocks and bonds >> i think you kind of intimated

that chair powell will sound hawkish. but you feel deep down the fed is going to be data dependent in the future >> yeah. i feel that was a statement that was lagging in the jackson hole territory, which was very hawkish, as we all know. we did have a press conference afterwards which in the past resulted in an opportunity for the fed to reiterate they are data dependent when you look at certain aspects like the economy, the housing market clearly is going to be experiencing some weakness when we look at where mortgage rates have gone essentially doubled from where they were at the beginning of the year. that's an environment where we should start to see weakness it's an important part of the economy. those are the kind of things i think the fed is not going to ignore and certainly i think we should start to see that present itself in some areas like the job market where we have continuous ongoing

strength but i think we will start to see a trickle-down effect in the coming months as certain parts of the economy that benefited from the pandemic are experiencing weakness particularly in goods-related industries and the real estate industry as well >> we're almost out of town. you're kind of forecasting maybe the fed okay straits a semi-soft landing. it won't be as bad as people thought and they won't need to go as far as people thought. >> yes the fed is likely to continue raising rates with 75 basis points wednesday and two more smaller rate hikes toward the end of the year. that will be a moment where we have more clarity going forward. we can stop angsting on how much more the fed needs to do

it. >> it has gain scariy and bearish. thank you, brenda. >> thank you for having me a quick final look at the markets right now. we are in the red. we will see what the fed has to say about all of this, whether mr. novogratz is correct on this meantime, we will get you answers tomorrow "squawk on the street" begins right now. good tuesday morning welcome to stock on the street cramer is at 1 market in san francisco. premarket is a little soft coming off the late afternoon bounce on monday going to be a busy couple of days for central banks hot inflation data out of germany and japan. the fed waiting game futures are lower as they digest the corporate view on the macro. ford shares are goin