porsche making the public debut in germany and surging that's a nice one in what has been a slow year for ipos so far. and hurricane ian downgraded to a tropical storm. we will bring you the latest on storm. it is thursday, september 29th that means -- october is two days away? what happened to september "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm rebecca quick along with joe kernen andrew is on assignment today.

right now, you are going to see red arrows significant red arrows dow futures off 200 points s&p down 30. nasdaq off 114 this comes after stocks surged during yesterday's session the dow was up 550 points almost 1.9% the s&p and nasdaq up 2% if you take a look at where we stabb stand for the month of september which is almost over dow and s&p down 6%. nasdaq down 6.5% it looks lousy if you looked yesterday, it looked worse improvement yesterday. you are talking about a significantly weak month for stocks also big moves in treasury yields 10-year treasury dropping 25 basis points yesterday a huge move. it came despite previously topping 4% early in the session. yields came back to earth after the bank of england would buy u

government bonds whatever scale is necessary europe is picking up today it is the same story here. 10-year treasury at 4.182% >> second day analysis of the story yesterday. a lot of what i'm reading today which i'm proud to say >> you said it instantaneously >> how much will they back this up with? >> they said they would do whatever is necessary. they tried to couch it by saying we'll do whatever is necessary between now and october 14th we will make sure we go way out of the way to do these things, but continue to shrink the balance sheets all of the statements. they are trying to walk a fine line to say, yes, we are continuing to tighten, but not really >> nobody likes to throw good money at bad these bonds are headed lower as rates go up. you know, why buy them

people over there and the government is buying these things and they end up losing money on them. >> that is what stan druckenmiller told you yesterday. selling at 1%. now we waited. >> yeah. the other thing we talked about is the world central bankers supposed to work in a synchronized fashion we're not. when there is a weak link, you see what happens with currency >> we got used to the idea of them working in a coordinated effort because of 2008 and the global financial crisis. every economy has a slightly different issue they are dealing with >> it all happened from them we want 75 they go 50 the dollar is already surging and the pound is down in parity and euro below parity. we do 75 and they do 50. maybe something can happen

you see what happens with gilts. i thought also the journal talked about this. journal points out the debt ratio in the uk is much more favorable than we have here. just immediately tying it to poor prime minister truss. >> you can't do that in the time >> you can't do student loan forgiveness. >> a point where investors say no more. >> we're at 125% they're at85%. they have another 40% they could issue. >> you should be aware >> the journal points out the only reason it did not happen to our bonds is the reserve currency of the world. luckily we have king dollar that doesn't put us in the same mess. all of it is a result of what we've already done in terms of bad policy with the central banks. now we're going to be in a tough

position roach motel. we checked in and may never been able to get out. meanwhile, i tried to figure it out, becky. i was in a category 5 camille in 1979 it went up the gulf in alabama i remember being scared. it was rain. august it was 1969. you see the plane? >> the guy who has done it 76 times. >> don't fly into a hurricane. >> trying to help us understand. >> into the eye. that was unbelievable footage. >> watching the footage. i have family in florida in fort myers and sanibel. your heart goes out to them. we still don't understand the devastation. >> no. for camille, i was reading

they don't know how strong it was because it destroyed all of the measuring equipment. they couldn't measure it ian is now downgraded to a tropical storm after it slammed into florida as a category 4 hurricane. just after 3:00 p.m. yesterday it is still expected to produce strong winds and heavy rain across florida, georgia. go easy. and carolinas. the storm knocked out power to 2.4 million homes and businesses caused 2,100 flights. we will get a live report. >> fort myers beach and all of the areas and the biggest one they had to date that this compared to was more than 100 years ago. higher population. you are looking at the water that got sucked out of the bay

because the winds blowing onshore and out of the bay later in the night is when the water came back. we still don't know how bad the storm surge was. a lot of people were evacuated mandatory evacuations. you hope people ra safe. you know there were people who stayed behind with the scenes we have seen which have been devastating. i have seen estimates of $66 billion of damage. i don't know how they would know because they have not gotten a good look at the areas you know it will be weeks before people are allowed back to the properties they will worry of the power outages and safety for people and looting for some time. >> watching governor desantis and where the deaths occurred. the initial event, it is like, i don't know, 80 people that died and it is downed power lines and generator and accidents and

trying to deal with the aftermath a lot than the actual event. hope there is a minimum. >> we do we do. also desantis was talking about this yesterday worried about the orange crop. 90% of the orange crop the theme parks are shutdown today. significant impact that will continue for some time in corporate news, chevron sold the headquarters building in california and plans to move to nearby leased space one-third of the size. the company said earlier this year it would cover costs for employ ees to relocate to houstn to right size the office space the houston work force is three times the size of the san ramon, california operation.

amazon unveiled a number of gadgets ahead of the holiday shopping season. among the highlights is the halo rise sleep tracker it sits at your bedside and tracks your sleep. mine would be like -- we can't do this. it would give up it has a smart alarm >> is there a rating below zero? >> it costs $139 again? we can't measure your -- you are never in a deep sleep. amazon updates four echo devices with an improved bass. a new temperature sensors and gesture control and built in wifi extender. it can improve your network coverage in your home. >> what are gesture controls clap on and clap off >> the clapper >> and the company introduced

the kindle scribe. make a to-do list. and write directly on the pages of the book you are reading. and amazon's new fire tv feature and qled picture is available in 65 and 75 inch models. separately, amazon is raising pay for hourly employees as it prepares for the holiday shopping season. average pay is increasing to from $18 to $19 an hour. amazon said the raises represent investment of $1 billion of the next year. that move comes a year after the

last pay hike from amazon. we are watching apple. big story from yesterday and big mover. the tech giant was down 1.3% after a bloomberg report said the company is ditching plans to increase iphone production after demand fell short of expectations the stock now down they were going to increase production a lot of congesjecture over increase >> jim cramer was talking about morgan stanley the stock was down 4% yesterday. when it closed down less than 2%, it showed improvement during the day. >> it has been -- you know, compared to meta or microsoft, apple is the true horse. when we come back this morning, a big warning from cnbc's delivering alpha con fr

ference of a hard landing. and don't miss the cleveland fed president irealottmester interview. you are watching "squawk box" and this is cnbc >> announcer: this cnbc program is response orred by baird visit bairddifference.com. lily! welcome to our third bark-ery. oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected

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if you look at what the fed did, the radical gamble they took to get inflation up 30

basis points from 1.7 to 2, it is to me a risk/reward bet you bet one to lose 40 and they lost and who really lost poor people of the united states ravaged by inflation and the middle class my guess is the u.s. economy for years to come because of the extent of the asset bubble in time and duration and breadth it went on. our central idea is hard landing by the end of 2023 i could be wrong on this since i do it for a living, our forecast is recession in 2023. >> that was investor stan druckenmiller at cnbc's delivering alpha conference. i started by saying you were here at delivering alpha it wasn't last year. it was the year before

2014 >> a long time >> eight years it seems like -- not eight years. we know. when i was just checking to see when he was on, i watched video. it was the point the idea the fed is still at zero interest rate since 2014. that was the discussion. we are having the same discussion we had eight years of zirt since 2008 he just pointed out talking about where he said it was reckless jay powell from 30 basis points to 2%. nfts were happening. spacs happening. meme stock mania happening there was bitcoin at $50,000 happening. all of these things that the fed and out of the corner of their eye could see asset inflation.

maybe 1.7 still and they like to get to 2 we can keep going. we want employment as strong as we can get it. that's our mandate that should have been -- they could have noticed that in the market at the all-time high during the pandemic. we had an exercise bicycle machine or company, the market cap as boeing. how -- $50 billion boeing is $80 billion. it was staggering. >> everything is easier to look back in hindsight. plenty of people like stan calling this at the time saying raise rates when it was good so you have the powder at good times and prevent the inflation and issues we're dealing with right now. stan was sobering. i stood in the back and watched. >> horrible. >> i was on next i was listening to the comments.

it is hard to walk away. >> i'll get great investing ideas. you may make no money for the next ten years >> the dow >> in previous periods like that, there are major moves upward moves >> 60% rallies that happen >> different sectors make a difference there are other things it was quite sobering. in terms of entitlement. add things up and take it out. we said we don't have to worry about 2049 >> spending. >> because we'll be dead kidding with each other. i should have said speak for yourself, stan you're an old guy. >> it was funny. >> i'll be there i'm telling you, i'll still be there. i'll be here in 2049 you can tell our friend. >> it was concerning it happened in the past. from 1929 to the '50s, you didn't have a return

you had to wait that long. let's hope we're not in for that he pointed out everything was going in stocks favor over the last many years and now everything reversed. >> reaganomics everything has flipped >> it has. joining us right now to talk about the odds of the hard landing and what it could mean for the markets is sam stoval from cfra and lindsey piasa. lindsey, we'll start with you. this question that was raised yesterday. stan druckenmiller brought up as a hard landing he is looking at that as a bigger scenario. how about you? >> i think it was interesting he was waiting until 2023 for the hard landing to occur.

we look at every sector of the economy. say for the labor market, it does seem we can check the recession box. i do see those recession conditions sending by the end of the year with the nbr with the look back declaring tech nical recession beginning as the second quarter of the year the fed raising rates at the aggressive path and looking to the forecast of maintaining positive growth a very minimal up tick of employment, the odds of very significantly negative implications that a further back up and borrowing costs >> lindsey, i don't think stan was of the opinion they need to stop at this point the fed is looking at this and saying we're raising rates

because the economy is great, but the economy is ragraging >> they were behind the curve. they shouldn't have accelerated the path of rate increases by the end of 2021. they did need to remove the foot off the crisis level of policy remember, they were still talking of transitory near the end of last year it took the fed a while to deal with the fact that inflation was more broad based i agree. the fed has little option other than to continue to raise rates. as we approach the 4% level, that is likely enough to curtail the demand side of inflation and the fed needs to recognize that it is a good holding point the further back up in borrowing costs at that point does little to address the supply side it will all but ensure recessionary conditions. >> when you see recession happening right now and as early as the second quarter, how deep

of recession are you talking that depends what the fed does from here, but what is the base case scenario? >> drop of 2% growth as we look to the second half of 2022 as we roll into 2023 assuming the fed recognizes the monetary policy on the supply side of inflation and willing to hold steady at 4%, the second half of 2023, we talk about a return to positive growth. at this point, the base case is a relatively brief and shallow recession. again, depending how aggressive the fed becomes, that could change to a prolonged deeper turn. >> sam, let's talk about the markets and volatility and downward pressure we have seen this month september has not been kind to equity investors >> you are absolutely right, becky. interesting, but typically in september, we have about 20 days

in which the market trades by 1% up or down this time around, it was 56 times. more than two and a half times the volatility and history says it will get worse in october which traditionally has 36% more volatility than the average for the other 11 months of the year. i don't think we're done yet as a as a result, a lot of volatility still to come. >> and the other thing stan said yesterday in the room said you could be invested in indexes and ten years, you may not have made money if you just let it ride. >> that would imply we have a great depression kind of follow through. from september of 1929 to the fall of 1954, we ended up really just getting back to break even. i don't think we're going to have to experience anything like that i do think that we are or should

be telling ourselves we're not going to get the returns we have in the past. on a rolling ten-year basis, the s&p compound annual growth rate of 14% before the bear market got under way. if you look to what is normal in the case over the last 100 years, we should be closer to 7% certainly the ten-year trajectory is lickly l trajectory is lickkely to come down i will not say we will see a '70s environment again >> the worst-case scenarios don't come true. sam and lindsey, thank you. coming up, more than 2.5 million homes and businesses are without power in florida we will get an update on that and further impact of hurricane ian live from tampa. here say look at u.s. equity futures. "squawk box" will be right back.

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right now let's get to the developing story in florida. ian has been downgraded to a tropical storm after slamming into the coast as a category 4 hurricane. nbc's chris pollone is in tampa, florida this morning with the latest chris, we all have been waiting to see what it looks like when the sun comes up >> reporter: yeah, we are starting to see reports of first responders going out to assess the damage in last half hour or so south of me in naples and fort myers, they will get a better sense of exactly what happened as the storm surge rushed in

the immediate issue right now with ian is that it is dumping tons of rain on central florida. places like orlando and to the space coast. we we see flash flooding homes and cars and streams getting swol with swollen. ian raced onshore with 150-mile-an-hour winds and the storm surge yesterday coming in south of me here is 00 miles it left neighborhoods under water. we saw cars floating down the streets. we still have no reports of any fatalities there are 2.5 million people in florida without power right now. about 500,000 in the tampa bay area this area emerged uniscathedunsd the storm went south of here and

people in the tampa bay area are waking up to some tree damage and power lines down and also maybe don't have power at the moment certainly avoided a direct blow. the governors of georgia, north and south carolina and virginia declared states of emergency as they anticipate the remnants of the storm bringing lots of rain to their states in the upcoming day or two let's go back to you >> chris, thank you very much. again, thank you for the updates. we hope you and everyone else stays safe. coming up, some interesting news out on the crypto front it could give us insight into the midterms that story is next throughout hispanic heritage month, we celebrate cnbc teammates like gina sanchez. >> the benefits of being hispanic is a naturally inclusive culture.

you can come from many different racial backgrounds and be classed as hispanic. the challenge to that is that it can create divisions and the lack of cohesion in the community. the latino voice is not as strong in one direction or another. as a community, we have to think of how to channel our voice and what we will channel it toward so we can have the maximum pact

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good morning w welcome back to "squawk box" live from nasdaq market site in times square big gains yesterday giving back 30% or so after six straight down days. earlier, becky, i went to talk to you about it. i was just thinking about it when people buy like yesterday and it goes up 600 points, is

anyone in the mileu right now that it will restart who is that buying it is not people looking for buying it is short-term it is the thing people complain about. >> it is not just short recovery or people jumpingin david rubenstein talked about it they don't ring a bell at the bottom you go down another 10%. there are people trained to buy on the dip they have gotten beaten up if you are a long-term investor. you don't know what if it turns around like in june i've put money in the market last week. >> i have a lot of conspiracy friends here >> s&p 500 index >> the guy who was on later.

>> if you are a long-term investor and not touching this and if stan is right and you don't make money for a decade. it is better than leaving in a savings account. >> all of a sudden 1,000 point rebound we have seen only to be followed by back down to new lows. who were those people? >> yeah. e except i have been buying the last week. >> the big time deferred comp was june 16th. now i wish i hadn't. >> you will not buy the absolute low tick >> the shares of apple this is interesting. bank of america. boa securities downgraded from neutral to buy. the firm cut the price target to 160 from 185 >> 145 >> it's 149. now boa said apple held up well.

it expects a negative impact from weakening consumer demand now the analyst had 185. now it is 145. now 160? thanks what are you telling me? >> the facts change and you change your opinion. >> you say i'm sorry it was a buy >> never mind. >> i'm on the record now at 160. eventually he or she could go on the record at 145. >> yes this is you. >> we have news on the crypto front. ylan mui has more on this. good to see you in person. >> good to see you, too. we have a new look at the poll that shows the critical swing states of the mid-term elections and there are more voter whose own a digital asset than hold a

union membership card according to data from morning consult which is $1.5 billion fund started by katie hahn. the polls showed 18% of voters in new hampshire and nevada and ohio hold crypto and nfts. 79% make less than $100,000. one-third are minorities and they tend to be young. 65% between 18 and 44 years old. >> if you are a democrat and looking at the data, but these are voter ws who are younger an voters of color. those are the voters you need to speak to for them to turn out. if you are a republican and you are looking at the data out there, these are clearly voters where there is potential to talk about the anxiety issues >> crypto voters trust democrats more than repreublicans

they are not partisan. the polls suggest there is an opportunity for either party to win them over. that doesn't mean this is the issue that defines the midterms. to the extent voters views show anxiety over the economy, any vote they cast could mean a difference >> if this is reflecting the anxiety in the economy, this is meaningful if it says i'm buying crypto because it is the future and the economy is in trouble, that could be a vein to tap into. >> owning an asset doesn't make it, but what does the asset represent. the poll shows the distrust of big tech and dissatisfaction with the government. these voters are looking for a home it is up for grabs with the republicans or democrats if they

talk to them right away. >> and if the name looks familiar chris was politically connected. i should point out he was with a republican white house >> in today's spectrum, yeah. >> what did i say? right, right, right. >> you were making a joke. >> that's how i look at that i'm kidding. he is very connected he's a democratic strategist >> back to the strategy of it is the economy, stupid. >> i thought you were going here and it would favor the right not the notion of free market and independent. >> this libertarian idea >> of crypto >> i asked him about that. i said why are they trusting democrats more than republicans on this issue. he said if you look at the demographics, the communities of color and the income level, et

cetera, age. those are democrat graphics thaw democrats in the first place that's the interesting point in all this they are potentially swing voters in swing states. >> who can capture it is the economy, stupid. back to that. >> you are young you know the saying. it is not surprising >> when you are old, you have no heart. >> you have a brain which helps. >> great line. ylan mui, thank you. >> coming up, porsche stock jumping in the market debut. we will take a closer look after the break. don't miss the interview with loretta mester. you can watch us live anytime on the cnbc app. we're coming right back. >> announcer: currency check is

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porsche stock popping in the public debut in germany. up 2.8%. phil lebeau is joining us now. phil, we can talk about the demand there it is the same old story, for the cars, the cars themselves. how is the supply of the ones

that people want is it loosening up? >> joe, the cfo of porsche had sobering comments about the chip supply which drives the overall ability of porsche and other automakers to build more vehicles we'll talk about that in a little bit let's first talk about shares of porsche as it began trading in frankfurt today. it was a successful debut. interesting to say it would be successful on a day when the overall market in europe was lower. ipo completed with the $72 billion valuation. global sales down 4% and coming in at 145,000 vehicles you might say in terms of german luxury automakers and market gaps, where does porsche figure with ferrari and mercedes-benz

it is below ferrari and below mercedes-benz and bmw. they are doing a public float of 10% of porsche as you take a look at shares of ferrari, the reason we show you this is we go back and show ferrari from the ipo i remember the ipo a lot of people say why is he doing this is this a money grab are they really going to be able to be a good investment? it has been a strong investment. the best outside of tesla in the auto industry since the ipo. when you look to ferrari, it raised full year guidance. they did that in august. they are seeing strong demand. in terms of volkswagen, a couple of things. it is using the porsche proceeds a portion of them. some will be issued to investors as a special dividend. some proceeds will be used to invest in the ev business. the cfo after the ipo today said

the ipo that could happen next for volkswagen because it is so huge it is a big conglomerate over there. it is a big battery division to get to your question, joe, the cfo of volkswagen said the chip shortage in the auto industry around the world could extend to 2024 it is getting better, but could extend into 2024 joe. >> it is amazing how many parts there are 30,000 parts or something. if one is missing, it doesn't work i have compassion for what these guys are trying to do. that's why it took so long for the one i have now to get to me. it took a year and a half. that was, you know, you following it from port to port you know what i'm waiting for now? the second key the second key is like a sperry computer it is like what is in there with

the chips and the doo-doo noise. it takes a couple hours to program the key. you need two keys, right even the chip shortage there >> yeah. >> it has been -- >> it's everywhere, joe. it's everywhere. at least you got the car, right? >> right at least i got the car i was. i was. you have to get an s to get the seven speed. that was a cool color. did you see the blue one >> i like the blue one. >> i know. that's not a standard color you can order, i don't think >> no. nope nope >> it's not. >> it's like everything. it is specialized. order that, too, joe it will take how many months >> yeah. we'll see. thank you, phil. when we come back, we'll dig into the struggles for widely

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telecom stocks like verizon and at&t have been struggling, reaching lows they haven't seen in over ten years. both stocks down over 20% in the last year and at&t hasn't been at its current level since 2003. joining us now is light shed partners analyst it's like, man, cord cutting, we got to get into streaming. streaming, we got to -- and the wireless guys. we got into wireless yeah, that's where it is verizon is safe. it's a defensive stock what can happen? now we know things can happen. i thought 5g was going to save us >> there's a lot of similarities, joe. the wireless sub growth at verizon, for example, which is -- you know, has been the bellwether of the group has

investors freaking out they slipped in a price increase in the last couple of months they have a hundred million customers and that price increase is going to add billions of revenue. when you look at the revenue growth, they're actually -- this is how they're going to grow they're going to increase price. they haven't been able to come up with 5g services as you talked about they're going after the br broadband guys verizon is running a commercial addressing the fact that they're losing customers to wireless broadband. the underlying theme here for these guys is increase price >> why so there's -- is it an economic -- macroeconomic phenomenon or are we just tapped out, walter? >> tapped out. everyone's got a smartphone. they did try for a time to say, hey, i'm going to throw in your

netflix account or disney+ account to get you to a higher rate plan. that was showing higher revenue growth but there's only subscribers out there that were caring about some of these services 5g hasn't materialized as i think you profiled some of these services that were promised, automated cars, doing surgery from far away, these things may come over time, but narrow not delivering the revenue growth a lot of investors want today now you've got this inflationary environment they got to cover. when they increase your bill, it's inflation, but it's an opportunity for them to increase revenue. >> yeah. be nice if the doctor was around when they're putting you out he's in cleveland, but he's a heck of a surgeon. i don't know about that. so at&t, for awhile i could see the idea of owning all those great assets that discovery now

has and at&t still has an interest in -- was that the right move are we questioning that? it looked like john stankey was a genius for dodging that bullet just in time but, you know, was that out of the frying pan into the fire now she's stuck with the same problem verizon had. >> even if these media stocks were performing well, i think there would have still been some criticism about some of the media acquisitions that at&t and verizon both made. now they've gotten rid of those, right, and the timing, whether it was coincidental. the media stocks are not something the companies would want to own. we get the question, is at&t going to cut the dividend? the stocks have pulled back because of a rate environment, these are dividend stocks. when the ten-year goes from "x" to "y," there's an impact on

at&t and verizon they have plenty of free cash flow and the 5g that the industry has been talking about for a couple years is about to end its capital cycle. they'll have even more money to pay these dividends. to the extent that you talk about safety stocks, like, the biggest challenges in the market is t-mobile and the ceo of that company was in a conference saying, i'm not going to burn the house down that's him messaging that they're not going to go out and be aggressive on price you still have some relative safety in terms of the pricing environment. churn is at record lows for this industry the only thing that can disrupt it at this point is if the cable operators get more aggressive at going after wireless subs. dish is still kind of looming out there. no one thinks that they can execute. maybe they come in with a low rate plan that disrupts the market >> okay, walter, if we could

have only have seen the future you know how hard it is to predict things, especially -- predicting especially about the future much harder to do that thanks >> when we come back, fallout from the bank of england's surprise announcement yesterday. that is straight ahead

good morning stocks looking to reverse course after yesterday's relief rally

futures pointing to a lower open we will show you what's moving right now. plus, is a hard landing coming we will hear david rubenstein's assessment. and hurricane ian downgraded to a tropical storm. floods and rains leaving more than 2 million people without power. we'll get a live report from tampa as the second hour of "squawk box" begins right now. ♪ good morning and welcome back to "squawk box" on cnbc we are live from the nasdaq market site in time square i'm joe kernen along with becky quick. u.s. equity futures this morning indicated down about 191 points this morning -- 186 now. some of the -- actually some of

the least bad levels that we've seen of the morning. but yesterday we did have a pretty sharp bounce back on those bank of england moves on a six-day losing street. treasuries were big movers yesterday. not as big as what we saw in the gilts. we went from four -- over 4.10 to 3.70 in the blink of an eye now we're back to 3.82 oil was lower and then it was rebounding a little and that gives some strength sometimes to equity markets i guess it's a growth story. and then finally crypto which some of the big proponents -- our friend -- what's our other friend's name who comes on all the time -- saying it's been much less volatile >> it's because it lost all of -- it went from 60 to 20. >> i know. but tom lee, when it was at

2000, he said it was going to 20 we said, why are you risking your career on this thing that isn't even an asset. it's back to where he said it was going to go. over time, it's dropped -- >> david rubenstein spoke about about the ecosystem surrounding it >> the blockchain. >> and what does he think? >> he's put some of his own money into some of these things. so he thinks it's going to be there and continue to come back. but he said he couldn't look at any of the coins and decide which one was going to be better off. >> does he store the coins in the washington monument? >> that would be a safe place for it. >> exactly right at the top >> that would fit in with all of the conspiracy theories. anybody who goes back to any of the national monument search things or anything -- you have to watch the nick cage movies. >> oh, yeah. let's get to dom chu he's got a look at this

morning's premarket movers every day, a lot going on. >> there's a lot of movers and i'm going to have to watch "national treasure" again because of the conspiracy theories one of the reasons why you're seeing some of the weakness in the dow is that bounce down trade, that fall trade after we saw a big rally yesterday. one of the big drivers, shares of apple right now which are down 2% right now, it's maybe not surprising giving some of the run-up in tech that we saw yesterday for some of the names to cool off a bit. in addition to that this morning, we have dueling analyst notes out there. the first one is from bank of america. the analysts have cut apple to a buy rating to a hold or neutral rating they've cut their price target on the stock they think there's weakness ahead, revisions could come down also that we're downgrading shares of apple to neutral from buy and lower our price objective to 160

shares have outperformed significantly year to date apple down 16% versus one of the tech industry indices down 29% and had been perceived as a safe haven. they think that apple could be the victim of slowing consumer demand that's part of the story there meanwhile, analysts at ro rosenblatt have upgraded the stock. they think some of their demand for the iphone 14 are better than analysts are predicting by the way, the rest of the mega cap tech complex is down today not necessarily in sympathy with apple, but just because of a pullback microsoft is down 1% same with alphabet, amazon same thing. we'll keep an eye on those mega cap technology names also check out what's happening right now with some of those big financials, right? we saw massive moves and gyrations in interest rates across the globe, specifically

in the united kingdom given all those headlines about the bank of england bank of america, citigroup down 1% goldman sachs a little less movement there we'll see if that picks up that's the state of play right now for tech and financials. i'll send things back over to you. >> thank you we'll see you later. a bank of england move prompts an economic reporter, steve liesman explains in your own account, for you to buy gilts right here, the long ones, would you buy them right now? when you have to think that inflation is moderating to buy them, or wouldn't you tell the bank of england if you were a uk citizen, do not spend my money

on this, i don't want these things in this rising interest rate environment that the entire globe is having? would you buy gilts right here why should they? >> i don't think so, joe, because i don't really understand the extent of the problem at the pension funds we have some sense that there was a lot of derivatives that were out there but i would really want to know -- i mean, it seems like the bank of england has come forward and said we're going to solve this problem with liquidity. and that creates the inflation problem -- >> it's tough to extricate ourself from where we are and this is another phenomenon -- or another example of that. >> i think that's right. i think that's right guys, let's just skip to the fed funds. one of the curious parts about this whole thing was how the fed reacted. global bond markets also rallied on this thing yesterday

including the fed funds futures where investors drove down their outlook for fed tightening in response to the boe's move the year-end rate at 421, down from 430 and the peak rate falling to 447 from 476. markets pricing out a quarter point on the fed maybe they think the fed would see this blow up in the uk as a warning against tightening too much until something breaks in the market but that, by the way, raise the question as to whether bond traders would come to view the u.s. fiscal side as recklessly as they seem to be viewing what's happening in the uk right now. the bond vigilantes look to be back we had the deputy secretary at delivering alpha he made a lot of the right comments about inflation i'm not sure that the biden administration is making the right policies when it comes to

inflation. >> there were some interesting -- in hindsight, a lot of what we talked about, it was the -- was the way to look at it, steve one thing that struck me is that the uk in terms of ratios is in a lot better shape than us and we're lucky, i guess, we have such a strong dollar maybe we don't have -- maybe we're going to be able to carry out what's necessary to try to stop inflation not everybody is as lucky as we are. we can say, hey, we're supposed to be siynchronized here in their own situations, that's easy for us to say. >> we're in a better place they have higher inflation than we have. you're right a slightly better fiscal position but not if the truss government comes forward with those big tax cuts hey, guys, just so you know, we're going to have a chance to

talk about this in less than an hour where we're going to talk to the cleveland fed president loretta mester and phillip lane from the ecb we're going to have a chance to get some remarks from key officials on this. >> made some money on the guardians. good year for them don't count them out are you going to catch a game? you should while you're there. >> maybe that's a good idea. >> there was one yesterday >> steve is more likely to go play a show. >> he is. >> i'm wondering what kind of fish are in lake erie. >> what about the rock 'n' roll hall of fame >> that's an idea. >> we'll see you in just a little bit obviously, that big interview coming up a little later this morning. when we return right after this, there have been some steep declines in those so-called

pandemic stocks, stocks like docusign, peloton, zoom. aol co-founder steve case will join us to talk about how these names and others can reinvent themselves as people venture back out. let's get a check on the markets. again, futures are under pressure dow futures down by almost 200 points s&p futures down by 33 the nasdaq down by 132 "squawk box" will be right back.

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♪ softbank's vision fund is planning to cut 30% of its staff following sharp losses for the fund that's according to people familiar with the matter who spoke to bloomberg they say the layoffs had alread started. they had a record $23 billion quarterly loss most of that came from a plunge in the value of portfolio companies. the vision fund unit has 500 employees. docusign is cutting its workforce by 9% in response to slowing demand and staff turnover they're the latest of the pandemic stocks like peloton who's growth stalled during the peak -- after the peak of the pandemic for more on this, we want to bring in steve case, aol's co-founder who is the ceo of the investment firm revolution he has a new book out this week

called rise of the rest, how entrepreneurs in surprising places are building the new american dream steve, thanks for being here. >> it's nice to be in the studio >> i know. we had a chance to talk off camera -- >> someone behind me was giving me a shoulder massage. >> razzing him from -- >> you have strong hands, my friend. >> there we go >> i didn't have -- did i say no you're fine. >> back in person is awesome >> steve, let's talk through some of these things because you've been talking abiliout rie of the rest and we need to get out of silicon valley and make sure that the rest of the country is seeing this development. we saw that happen in a big way in the pandemic. it allowed people to work from anywhere what seeds were planted at that time. >> we've been working on this for a decade i've been on this show a couple dozen times in the last decade talking about some of the stories about different companies and different cities but the pandemic definitely was

a tipping point. and you talked about one of them, which is the dispersion of talent in the last couple of decades, the middle part of the country wanted to be a part of it and had to leave to be a part of it. you also saw venture capitalists sitting in places like san francisco and new york doing zoom pitch meetings and they realized if they're doing a zoom pitch meeting, they could be talking to an entrepreneur anywhere in the country. we're starting to see the capital start to flow. i think it's going to be an amazing decade with the dispersion of ideas and innovation is going to create a new dynamic in america and create more jobs in places that have been left behind. i think this is a moment after a decade of kind of building some of the -- putting the foundation in place, i think the next decade we'll see things really transform. >> there are ceos who -- especially some of the wall street ceos who say we want

everybody back in the office you are slowly starting to see even some tech companies call their people back for several days a week. does that do what we have seen to some of these stocks like a peloton or a zoom or a docusign where, wait a second, we pulled the growth forward, but now the waters are heading out again does that disrupt things do you have that same sort of fits and starts? >> the mega trends that were accelerated around things like telelearning, telemedicine, video conferencing are here to stay we're not going to put the genie back in the bottle but we're moving toward a more hybrid model where there's more people in the office what's interesting, most of the entrepreneurs we backed -- we backed 200 companies in 100 different cities most of them have been in the office the other dynamic is some of the people that moved to different

parts of the company but still were working for tech companies as people are called back to the office some of them are going to stay and they're going to join start-ups in these community that will fuel this next wave of growth -- >> i wish you could do 50 out of 50 states. i'm thinking of the problems there, steve i'm wondering how you can make a place a better environment obviously you can't bring a coastline into an landlocked area and you can't bring great weather to south dakota or something. but what can you -- and the pool of atlanta, universities and the people that are there, how do you make that better i guess there could be tax incentives to get this going how do you do it to places where people don't want to live. >> most of the people in silicon valley are some place else 95% were from some place else. some of the best of the universities in the country are in the middle of the country

historically what happened was people graduated and then left to go to new york or san francisco. now more and more of them are saying the talent e's been there. the answer to what we can do is create more jobs in these communities. if we are backing companies that are disruptive and destroying jobs in different parts of the company, no wonder people feel left out we have to back new countries to create new jobs, the industries of the future, and that's what this book is all about dozens of stories, cities that i think are kind of inspirational to me as i travel around and i wanted to share them with other people i think people reading this book have to have a more optimistic view of what's possible in america. >> we hear about places like austin all the time. >> i think we profile 30 different cities but one in chattanooga, richmond, virginia, we backed a company that focused

on sustainable packing goldman sachs just led $140 million round for that company. a lot of things happening in indianapolis now there's 2,000 employees there. a lot of things happening in columbus, ohio intel is launching its new plant. the president was there a few weeks ago. but the point of this book, it's not about two or three or four cities, it's several dozen cities are on the move and on the rise and that's going to change the innovation landscape. if they want to be in new york, san francisco, they want to be in boston, obviously they should do that. but they don't have to be there in this next era. >> here's what i don't get, i don't understand why more money doesn't follow your example for quickly. if you are trying to find one of these companies to fund in one of these areas where it's so populated already, prices go up, up, up if there was -- >> people are starting to realize that but venture capitalists said we have a network in where we live.

let's invest in those companies and then we can help those companies. we don't have networks in other parts of the country we don't have -- and that's what we're trying to change we invested with 300 regional venture firm and is we're starting to network them with coastal funds. the founders fund invested in a company focused on kind of mach 5 jet engines. >> these are great private sector solutions to these things which are going to bring the american dream to people can the government help or can it at least not hurt what kind of policies -- >> i think you're right. ultimately it's about the entrepreneur, the investor, the marketplace. but there is a role of government. >> what can they do to help?

>> the chips and science act was a 10 billion funding or at least authorization of funding of regional hubs. some of those cities like silicon valley, like austin, some of the momentum was started -- >> they picked a specific industry. >> it's not just that they're picking a specific industry. trying to -- >> overall the chips act -- >> backing more of the r&d in a variety of universities across a variety of different industries. things like that can be helpful -- >> the chips act was a net positive >> it was a net positive it was authorized, not appropriated there's still work to be done on immigration reform and -- >> you could do that personally, i think. >> what's that >> if they don't come up with that 10 billion, you could just write a check which is cool to be you >> if enough people buy that book then perhaps. for now i'm going champion these

cities at least in a small way i think we can unite a divided country by creating more opportunities for these people and places that have been left behind. that's why i wrote the book. i'm grateful for the opportunity to be here and talk about the amazing entrepreneurs. >> you still use a dialup -- >> that screeching modem tone. i think the broadband thing is way overrated. i'm there with dialup all the way. >> i was listening to a podcast on my walkman. i won't change. >> you've got mail. >> we followed you along the way. really great to see how it's taking off thank you for the update. >> thanks so much. >> the book is called "the rise of the rest". coming up, hurricane ian slamming florida now weakening to a tropical storm. the damage being felt across the sunshine state a live report next as we head to break, check out the laggards in the dow, the

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>> announcer: now the answer to today's aflac trivia question. what is the largest and busiest seaport in the world the answer, the port of shanghai developing story this morning, hurricane ian slamming into the florida coastline just shy of a category five storm earlier this morning, president biden declaring a major disaster in florida awarding federal aid to supplement local efforts. chris pollone joins us live in tampa. what can you tell us at this point? >> reporter: yeah, good morning, becky. well, the sun is starting to come up and so it's going to start shedding some daylight on

the situation across this state which is very badly needed especially to my south and the hardest-hit areas, places like fort myers and naples. officials will be able to get out and take a look and see the extent of the damage they suffered when this storm roared assure yesterday packing 150-mile-per-hour winds and bringing with it that incredible storm surge. we've seen so much of the video of how the gulf of mexico just rushed into these communities, flooding entire downtowns, topping over homes, floating cars down the street that's order number one for many parts of florida there are 2.5 million people without power in the state right now. about a half a million of them are here in the tampa/saint pete area this area got by relatively you be scathed

it's dumping rain. we keep seeing reports of flash floods happening in that area. they're expecting anywhere from a foot to two feet of rain in some areas and so as the day goes along, you can expect to continue to see reports of people needing to be rescued or cars, you know, floating down streets and things as the storm continues to dump rain so a day of cleanup, a day of assessment for some, they're still dealing with it, especially in the northeast part of the state and the governors of georgia, north carolina, south carolina and virginia have declared states of emergency as they anticipate the effects of ians moving into their states today and tomorrow, becky. >> thank you nbc's chris pollone. still to come this morning, former white house economist jason furman joins us to talk about the news out of the bank of england and the risk of a recession. that's next. don't miss our exclusive

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we're probably heading towards something that's going to be not favorable and nobody wants to use that "r" word but we're heading to something that's not so favorable. two years from now we'll be back to something closer to where we were about a year ago. >> that was david rubenstein yesterday at cnbc's delivering alpha investment summit after the bank of england's announcement that it would buy long-term government bonds in an effort to stave off a financial crisis it brought concerns from former white house economists jason furman he joins us this morning he's currently a preview at harvard. and you were very quick to condemn what the bank of england was doing or maybe what the bank of england was doing in response to some policy blunders by the uk you want to explain? >> yeah, look, i think the bank of england had to do what it did yesterday but it was put in a terrible position by fiscal

policymakers they drove the run on gilt and the bank of england compounded the problem when they did the tepid increase last week and so i don't think yesterday was intended as relaxing their fight on inflation, but it's really a very confusing message coming out of the uk as a whole. >> what do you think the end result is? we watched -- we've been watching gilts, the yields soaring. we've been watching the pound get crushed. now what is this a temporary fix from the bank of england or are they going to have to double or triple down to convince investors that they're there backing this up. >> the hedge funds will rush in. they'll start buying these gilts to front run the bank of england and the bank of england would need to use those 60 billion pounds, but what happens when the period expires

they can't afford the perception that they're engaged in yield curve control. interest rates in new england should go higher they will go higher and the longer you try to put your finger in the dam of those interest rates, the more you're creating something pent-up and possibly some bigger adjustment in the future. i think the hope is that they're slowing the adjustment, that they're making it happen in an orderly way. but if they try to stop it, i don't think that's going to work >> it reminds me of the largesse of some of these european countries and trying to soften the the blow if i were a citizen -- the energy subsidies, you're not going to have to pay more, we're going to cover that. no one in their right mind would buy gilts here rates are probably headed up i don't want my government making a bad trade they're making a bad trade just because it's so hard to get out of the roach hotel that central

bankers have made. >> yeah, i mean, that's the pair box. at a time of inflation, you really want to help people if you help people by giving them money, you drive up interest rates there's going to be a lot of people in the uk paying more on their mortgages even as they pay less on their electricity bill and none of this is working out particularly well. europe is doing less in terms of the largesse i hope they look at the uk, see it as a warning. i think you can do some targeted relief for some people but you have to make it very targeted you can't make it huge >> you weren't a central banker. you don't have to defend the fed. do you agree with the journal, they call it the banker and bailey's circus of monetary policy >> look, i think the biggest problem there is number ten, number ten is the people who said they would take away the bank of england's independence and now they temporarily put

that hold, hopefully permanently put that on hold they announced this reckless fiscal plan. i think the bank of england, they're a little bit behind the curve. i think they've made a few mistakes but they're operating in a tough environment. >> jason, you have been critical of the u.s., the current administration's policies that haven't been done on the same scale, but, you know, when they were talking about wiping out student debt, you were very critical you were from a democratic administration >> yeah, look, i think there's some things -- the inflation reduction act, i think that's good that's going to cut the deficit. but all that deficit reduction was undone with the student loan bill going forward, the yiunited stae has a lot more room for policy mistakes than the uk has we're a big economy. but we don't have an infinite amount of room and i would rather we not test how far to go

president biden is doing exactly the right thing in respecting the independence of the fed. that's something prime minister truss was not doing with the bank of england. i think president biden needs to stick with that and not really pile any more onto the debt than we already have. >> liz truss is doubling down saying they're going ahead with this plan. they're not looking like they're flim flinching at this point. i guess the bank of england has given them cover at least for now. >> ronald reagan did an enormous tax cut in 1991. it sparked inflation, dramatic increase in the deficit and in 1982 he undid a big chunk of it. is she going to flinch in the next week? maybe not. is her hand going to be forced in the next year or two that they're going to have to do something to undo this, i would bet on that. >> in terms of the economy and what we're facing, we've asked everybody coming on what are the odds of a recession, how steep

would a recession be if it hit what's your best guess at this point? >> if you asked me on a year and a half horizon, i would say there's a two-thirds, three quarters chance of a recession i've been less worried all year about an imminent recession. i never thought the odds were that high for this year. all of these interest rates are going to increase and add up, they're going to have a lagged effect i think the fed is doing the right thing but, you know, i'm worried about where we'll be -- yeah, a year, year and a half from now >> jason, thank you. jason furman coming up, amazon introducing some new devices including the new halo rise which monitors your sleep. is it creepy or dreamy that's what it says. jon fortt is here. there's two sides of the story, apparently. later, a report that apple told suppliers to bail on plans

to increase i phone 14 production and that sent the stock lower. this morning, bank of america is downgrading it rosenblatt upgrading apple he'll join us in just a bit. get the best of "squawk box" in our daily podcast. follow us on your favorite podcast app d st a te. ayunedliennyim

amazon yesterday introduced halo rise. it's a bedside alarm clock with sensors and it monitors your sleep and gives you tips to improve it is it dreamy or creepy jon fortt is here to weigh in. i don't get it, though does it say, go to sleep clear your mind! how does it give you tips? do you know? >> if it's too humid, if it's too light, if you need to make adjustments, things like that. overall, a little creepy anything or anyone watching you sleep is a little creepy halo rise, $140 sleep tracker. it doesn't have cameras or

microphones built in it has sensors it reports the sleep information to the halo app which runs on a fitness service that costs 4 bucks a month. you get six months for free when you buy this thing the sleep-tracking device joins smart home devices including doorbells, speakers and drones and robeots that are fly or roll around why is this uncomfortable? in our web browsers we have cookies. while some cookies have turned out to be a problem because they're tracking too much and that's the issue with these smartphone devices they're like cookies in the real world. they're here to help and make life easier. it's a slippery slope. >> all right can you use that argument to

make any technology seem -- any new innovation seem evil or prying in. >> well, yeah, on the other hand this sleep tracker is kind of a dream. it's thoughtfully designed to capture data a lot of people were skeptical about the home telephone why anybody needed one of those inside but we need to use technology to came it. the internet first made general information more accessible. it's giving governments access to data that will make them more nimble and more powerful the only way we'll get ahead is if we become more nimble that's not to say we should trust big companies or governments to do the right thing with the data these systems gather we need modern laws governing how companies and governments gather data and how individuals can audit those sometimes and

hold the platform's feet to the fire it's to use the technologies for both convenience and to drive accountability, joe. >> all right what's it going to take for that accountability movement to get any momentum in your view? >> yeah, probably a catastrophe of some sort of. how did we get the fda and stuff like that? usually something has to go really, really wrong there have been enough things going wrong, you would think maybe it's got to get worse. i don't know. >> just think about this, it just makes me laugh if i were to -- i can think of all kinds of scenarios where i could use this thing. >> how are you sleeping? >> the fourth time i would get up, it would be like, come on! >> i quit. >> just -- the thing -- you know, sprockets would be

shooting out of it you know what i mean again? again? what do you want from me >> bepee before you go to bed. >> you don't think i do? i don't know it might give up it might say, please take me back send me back to amazon. >> yeah, maybe you need one of those in the bathroom. >> bathroom humor goes a long way on this show for some reason what's wrong with us what's wrong with me >> i'll join you there when we come back, we'll talk apple and demand for its new iphone is now the time to buy the stock? right now it's off by 2% this morning. $146.56. check out the futures at this hour, still under pressure not by as much but the dow is indicated off by 165 points the nasdaq off by 1.12 "squawk box" will be right back.

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oh... but everybody's online during the day so we lose speeds. we've become... ...nocturnal. well... i'm up. c'mon kids. this. sucks. well if you just switch maybe you don't have to be vampires. whoa... okay, yikes. oh sorry, i wasn't thinking. we don't really use the v word. that's kind of insensitive. we prefer day-adjacent. i'll go man-pire. apple reportedly balog plans to ramp up iphone 14 production and the stock fell on that report yesterday it's now about 18% off its 52-week high, and bank of america downgraded it to neutral saying the stock has outperformed year to date suggesting that the trend now is at risk, but our next guest has a different opinion. barton crocket is senior analyst for rosenblatt securities and he's upgrading the stock to buy

from neutral and raising his price target to 189 and that's a 26% upside thanks, barton other analysts actually lowered the price target so where do you think you disagree with the bank of america analyst, barton, and was this, in your view the -- would you call it a cut in production and would you say that it has anything to do with demand any indication that that's weaker than expecteded in. >> we'll start with our work we did a consumer survey in the united states and we foufrnd very, very strong consumer interest not just in iphone where some 29% of people we surveyed in this country plan to or think they already have bought an iphone 14 of adults, but that two-thirds want the pricier models and very strong preference for the priciest one.

the iphone pro max and that coincides with very strong interest in new apple watches with similarly there, but very, very strong preference for the very expensive ultra watch so what we think is we're in an environment where these devices are more important to people than ever before and they're willing to pay more for them, reflecting the importance and reflecting apple's ability to come up with features that people like. one thing that is new in this iphone 14 series is this emergency s.o.s. satellite communication safety feature very, very big interest in that. we found that over 80% of respondents found that very or somewhat appealing 38% thought it was the reason to think about buying an iphone so i think that we went and looked at demand a lot of people are focused on supply chain and look at demand.

a positive mix shift and asp and you can be flattish on units and be pretty happy with the revenue outcome and i'm not sure that that bloomberg report is the end story and it's been a number of anonymous reports and it seems to at certain levels miss the picture, and these devices are something that consumers really want based on our survey >> apple has performed better than any of the faangs or technology in general. it's been a real -- not a leader down, but kind of a leader in maintaining a lot of its -- of the gains that it's seen in recent years is that good or does it have further to go in i'm asking a question and you just raised your price target. i assume that relative strength is a positive in terms of whether you should own the stock. >> i'm less thinking about relative strength and more just

the fundamental ability to grow the business i think that demand for pricey devices and pricey apple watches is set up to grow revenues in an environment where that would be more and more difficult for many companies. apple is rising to the -- the cream of the crop in termless of what consumers want to spend money on in this environment so on a relative basis, i think you should preface is. in terms of valuations for apple, the multiple is down from some higher levels that it's had in recent years. it's up from where it has been many years ago, but at this level, i think, the premium is not crazy and it's something that i think it will tend to attract as the device and the thing that people are most willing to, you know, put high on their want list in the world as it is rid now. >> and ecosystem and services and apple is a big part of everyone's life.

some would say that they that the quantum or lack of a quantum leap is something new. that the iphone 14 wasn't even that differentiated. there's no flying cars and there's no tv and -- i mean, i'm being facetious about the flying car, and there's none of those big -- and something more that steve jobs used to come up with. there was nothing really and also this, was there >> i think the consumer appreciates the emergency s.o.s. feature that nobody has and nobody else will have for a year or two >> it's life insurance, bart i don't want anything to happen to me. i see what you're saying if it does, it's nice to have it if you're on mt. everest >> it's nice to have it and the blocking and tackling that apple

does, better cameras, faster processing and a device that works seamlessly to help you through your life. they've been taking great share from android our survey indicates that they'll continue to. 18% of the android users in our survey said they want top buy an iphone 14. the company's on a role and they're giving consumers what they want and it doesn't have to be completely inventing the wheel. they're just improving blocking and tackling in ways that are important to people every day and things that are very important to their life. >> barton, thank you great to have you on i love it. two-sided market every time someone's buying. good to have you on today. something occurred to me >> what's that >> when you said that that you pee before going to bed? who said anything about pee?

[ laughter ] >> oh, boy all right. when we come back our exclusive interview -- reminds me of a joke our exclusive interview with cleveland fed president loretta. and the final look at second quarter gdp and we'll bring you those numbers from former sec chair jay clayton and former treasury undersecretary john taylor stay tuned "squawk box" will be right back. - 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.

good evening what goes up, coming down a bit. yesterday's gainses and losses at the opening bell following the dow's best day in a couple of months. historic moves from bank of england sparking the latest round of great volatility and some markets, as well. we'll have reaction exclusively this hour from cleveland fed president lorestta mester, and porsche shares, and the company now the most valuable automakers in the world details are straight ahead as the final hour of "squawk box" begins right now ♪ ♪

♪ >> good morning. welcome back to "squawk box" here on cnbc we are live from the nasdaq marketsite in times square i'm rebecca, and andrew kernen is off today most mornings, yesterday was the outliar with the bank of england's moves and this morning the dow is indicated off by 200 points and the s&p futures off by 35 and the nasdaq off by 141. again, yesterday was the outlier and stocks closed up 2% across the board and that came after six losing days in a row if you're watching treasury yields this morning yields are starting to pick back up after coming down precipitously yesterday. the ten-year is yielding 3.86% and yesterday it was above 4% at one point and the 30-year at

3.78% and the 30-year at 1.39. >> let's start with dom chu with the pre-market movers. >> joe, becky, we have some earnings reports out this morning that are moving things around pre-market. carmax shares are down big losing rid now about a fifth of their value, just about 50,000 shares of trading volume and you can see down 17% right now the used car retailer that reported earnings that fell short and revenues were below expect egg expectations and all of this because vehicle prices fell raising the price of financing and a big pre-market mover next up, you have shares of bed bath and beyond which are all over the place in the pre-market trade and gains and losses up 6% on just about half a million shares of volume and that's in the midst of a massive corporate turnaround plan at this point and reports of wider than expected quarterly loss and sales fell shy of estimates.

a key measure of profit margins also took a hit as it moved to clear out excess inventories it was down earlier and up about 5% now we'll end with a look at shares of occidental petroleum which are fractionally higher on 200,000 shares of volume as many viewers and listeners know as berkshire buffett's berkshire hathaway and berkshire bought another 6 million shares of occidental bringing the total stake to now over 194 million shares and that's over 21% of the overall company and occidental shares and rising oil prices helping a new added stake by berkshire becky, joe, i'll send this back over to you guys let's move over to the first big guest of the hour and the recent rate volatility around the world and the guest here is with steve liesman. take it away >> thanks, becky i am here in cleveland for the

inflation drivers and dynamics conference with cleveland fed president and the host for the conference loretta mester. >> my pleasure thank you for being here. >> you can't really not be in a great place. speaking of a great place, yesterday the bank of england suggested it was not, reversed course what is your view of what they d did yesterday? >> it's a challenging situation for them they have an inflation problem just like we do and they have a monetary policy path that they have put out there and what they plan to do including raising interest rates on the other hand, the markets weren't functioning yesterday. so for financial stability reasons they had to go in and buy bonds that looked a little bit incoherent because they were buying bonds at the same time they were talking about raising interest rates and that's a challenge for all central banks is how do you try to span both of those goals and think back to

the financial crisis and the pandemic we had to go in and buy bonds because the markets were not functioning well and the all-important global market. what is different is that was then consistent with the monetary policy news we had to make because of the pandemic this is a situation where because inflation is so elevated. >> it's going the other way. >> -- it looks the other way, but there are good reasons for what they had to do. >> i have questions about this does the financial stability mandate trump the inflation mandate? >> mortgage functioning is incredibly important because you won't hit any policy goals if the markets aren't functioning so when you're in that kind of situation that they faced they had to make a judgement call about what to do to shore up the market functioning that's different than worrying about volatility in the markets, right? when things aren't pricing -- my sense of this, and i haven't been able to report it in depth,

but this was not a dramatic or really ornate trade that was going on this was pension funds doing an inflation swap i guess my point is it can happen anywhere. do you worry about the possibility that you keep raising rates and something breaks in the financial markets? >> well, you always have to be in tune to that possibility because we are in transition we have made pretty dramatic moves in the fed funds rate 300 points this year the economy so far has handled it the other thing that i think that was illustrate in the situation in the uk is how important and how difficult communications are what we tried to do at the federal reserve is to be very forthcoming about what our plans are knowing that we're not prescient, but putting out where we think rates need to be in order to get inflation down, and

i think that communication is an important part of monetary policy making, but a difficult part >> we'll do that communication in just a second and i do want to stick with this idea. do you see this as a warning and did it creep some concern in your thinking in terms of rates? >> no, not in terms of the u.s. economy. in fact, one of the lessons is perhaps that we have to be very diligent about getting inflation down, right? the confidence of the markets and market participants and the public generally is that the fed is on the job in making sure that we get back the price stability. so in some sense the fact that there's some -- perhaps the credibility of the institution matters in cases like this, and it's very important for people to understand that we're watching and doing what we think is the prudent thing to do, but we have to get inflation down. >> just one more question on this topic what did it tell you about the importance of the fiscal side

getting it right what precipitated this whole issue in england was plans of the new government there for additional tax cuts and deficit spending >> well, i think the market judged whether that was a good policy in the uk and you always have to be thinking about what the fiscal authorities do and take that as part of the economic environment in which they're operating. >> becky has a question and i want to ask you about current policy which is one of your colleagues yesterday suggested that you need to do another 75 basis point hike in the upcoming meeting and where do you stand in the rest of the year and the peak funds rate? >> the seps we put out, the summer of economic projections, that was the median pass across participants if you look at the fed funds rate, and that's about the middle of the rate and at the end of this year and next year,

rates are in the 4.5 to 5% range and that's basically the median path i am above the median path because i see more persistence in the inflation process in the median path and the sep. and above four is where i think we need to get to because we need to have real interest rates and real interest rates judged by the expectation over the next year of inflation had to be in positive territory and held there for a time >> becky >> loretta, just in terms of that persistent inflation that you see, where do you see that are there other data points that you watch? i mean, that's kind of the key >> right no, we do do a lot of what i call reconnaissance with the district, and across a wide variety of different contacts, business contacts and people in the community development space, households

you know, we have an inflation research center here our center for inflation research does surveys that are nationally representative surveys and all those surveys basically tell us that inflation, you will expect inflation to remain high over the next year and some of the measures will come down a little bit and they do expect inflation to remain elevated above 2% over the next year and that feeds into salary demands and price setting and so that persistence is there the other part that's going on is that we've had this beginning of a transition from purchasing goods and the goods inflation to services inflation and services inflation is much more persistent so again, my expectations, then, inflation will come down and my s&p is i have inflation coming down and we have to bring interest rates to get back the downward shift on the inflation path >> do you remember when jim cramer had his you have no idea

moment in 2008 there are people right now that are suggesting you have no idea what's really going on in the economy when it comes to inflation. that inflation is coming down rapidly and they talk about recession in the housing market. they say the fed is out of touch with what's happening in the real economy >> i can just tell you the contacts we talk to and our board of directors and we gather a lot of information and that's not the perspective they have. in fact, they are still concerned about high inflation and we're still concerned about the mismatch in the labor market which is adding to cost pressures and so that reconnaissance tells us that we still have inflation i think there has definitely been a slowdown in the housing market which is to be expected given where mortgage rates have gone because we're tightening financial conditions and that's the mechanism through which demand is moderating and hopefully getting into better balance with supply so that the price pressures can be contained and then put on a valid path.

>> let's talk to someone who has an idea of what's going on joe kernen >> i've seen it positive that the fed if it were to blink or pause it's not going to be because of economic conditions, but because of something scary and something similar that we saw yesterday, maybe some type of dislocation i wonder, how do you try to anticipate that? the piece in the journal today said that we are fortunate to have king dollar so that we don't have the same type of -- you know, it was easier for that to happen over in the uk and it won't happen here, but we've got our own issues with -- with debt ratios and everything else, with some of the stuff we're seeing from the biden administration. do you know for sure that there's not something under the surface if you continue to raise rates sharply that would cause you to pause because of disorderly market conditions or

pensions or whatever you want to use? >> i mean, joe, you're right that no one knows for sure and what we saw in the beginning of the pandemic was dysfunction in the all-important treasury market there have been steps to make that a more robust market and more resilient market and no one knows for sure so far, we haven't seen the kind of market disruption even though we haven't seen that in the u.s. markets, but we've got to always be at tuned to the possibility and react appropriately should that happen and we're balancing what we need to do on the policy side, knowing that market dysfunction is not helpful for us to achieve the monetary policy goals i take your point that we need to be cognizant of that, but right now we don't see that in the market functioning that

we're looking at >> i use so many expressions that sometimes i get tired of it myself this is not your father owe labor market and switching to economic numbers that are coming in and whether we can trust those to give us an accurate picture. if there are parts of the economy where inflation really is moderate, but we have this new workforce and low participation rate and new ideas about how we actually want to approach labor what if that's why we have this inflation, but it's not -- it's moderating everywhere else and you kill the patient when it didn't need to be killed because you were misinterpreting what the labor market's telling us? >> so all of the indicators we have from businesses that we talk to is that the labor market, demand is still outpacing supply the firms we talk to in manufacturing and the service sector are still trying to hire and they're still trying it find

labor force. i think the things you're talking about are important when you're thinking about will labor force participation, you know, move up from levels where they currently are, and i take the fact that we're basically become to trend on the labor force participation rate given demographic. so i'm not expecting this big influx of workers. i think we'll get some relief there and people will be drawn back in, but i'm not expecting that, so then we have to ask, okay, we have to moderate both the labor market and product markets if we're going to get inflation back down. at some point, once we get real rates up and we see more of that moderation and demand, you're exactly right, then there is some tradeoffs and then you need to be concerned, have you gone too far or is this a good place to stop? we're not at that point yet and inflation is still a 30-year high so right now the conversation has to be, we have to do what we must do to get back to price

stability because we can't hav hea healthy unless we have price stability. >> you've done three hikes in a row which is historic by itself. they say monetary policy acts in long and variable lags and you have no idea when what you've done to the economy will hit given the rapid rise in rates, why is there an argument even if you're still going higher to see what kind of effects you've had on the economy >> yeah. we can have that conversation, but we're still not each in restrictive territory on the funds rate you're right we moved the funds rate up 300 basis points this year and look at how high inflation is >> give me the number. when you say 4 1/2 what's restrictive about four and a half what inflation number are you using? >> inflation moves at 3 1/2 next year or even lower which is what

the median cpi or the sep says, then that would be a positive real rate. >> you'd have to get to 4 1/2. >> the other thing to understand, though, as inflation comes down, right? even holding the funds rate at a particular level is a more restrictive policy so that's going to be the calibration exercise, and again, we're not even at a point to have that. >> how does the dollar work into your thinking. it's been very, very strong. it does help with inflation and it's a potential dislocation along the globe with taking it on the chin and you're right, it help his us on the inflation side when you think about what's happening and we do care about that because of the way it influences the u.s. economy and that will be through the trade channel and the financial market channel and the global financial markets affect the u.s. economy

and that's the lens i use for terms of how does it affect my economy? we have the benefit of being a bit isolated in that sensz e an we're a global economy and different from an e merging market economy and that's a benefit to us and we are in a global environment so we have to take the factors into account when thinking about the outlook for the u.s. economy >> professor segal was mad that we didn't ask tough questions and i think he was mad that we didn't ask about the money supply the growth was way down. do you use money supply and it is way down and does that perhaps that perhaps inflation is declining overall in the economy? >> so the money supply hasn't been that reliable an indicator. >> that's why we don't ask about it >> so we can pick an indicator and say oh, that's going to tell us something about the current time and maybe some day it will come back to be a reliable

indicator and it is not figuring into my calculous as being a strong indicator. >> give us something that if you wake up in the number and saw that number maybe i i would change my outlook on inflation >> i would be happy if we could get long term expectations down from where they are. >> two >> i would like to see them down from where they are now, and i would like to see continued progress in the inflation that we have, and i would like to hear from our directors that now we're starting to move our prices back down >> sort of a three-part test over three months. >> yes >> thanks for joining us i look forward to the rest of the conference today >> thanks very much for being here >> back to you guys from beautiful cleveland. >> it's a real renaissance city. we used to call it the muss take

on the lake. >> that was a long time ago. >> it was. the guardians are so much better than the reds. the browns are 2 and 1 the rivers don't catch on fire anymore, do they, loretta? >> they do not catch on fire they do not catch on fire. i can attest to that no river fire since i've been here >> thank you and thanks. that was great, steve. those are tough questions. no one can complain that it's a -- it's a tough job. it's a really -- i'm so much happier to be doing this than trying to get something going. >> but we do try we play one. coming up, much more on the markets and the economy. we have a debate lined up on inflation and global rates and market volatility that you don't want to miss a reminder, you can always watch and listen to us use the cnbc app. stay tuned we'll be back for about another 40 minutes of pure pleasure.

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morning long this was an update for the markets after six down days and the futures off by 38 points and the nasdaq off by 140. >> now say seven continents in a row. >> up next, exclusive results >> up next, exclusive results from our cnbc cfo.to adapt in te changing world, you could hire a professor of theoretical mathematics. r-o-t-l-f-m-n-a-o. "squawk box" will be back in 30 seconds. he'd crunched numbers day and night. that's it. to maximize profitability. morning. i have quarterly numbers that are beautiful. and forecast revenue from every corner of your organization. is that important? or you could use workday. the finance hr and planning system that helps cfos make better decisions faster. for a solve problems like a genius world. workday. for a changing world.

backalready. surprised myself welcome back now their exclusive results from the latest cfo council as we get to frank frank holland joins us >> we'll get some more surprises and we'll get answers from the cfo. inflation seem the biggest business risk for 29% of the survey and here in the u.s. it's 6.3% year over year according to pce. the dollar rising 5% in the last month increasing the costs of goods and services in the u.s. and these have become more positive about inflation and the second quarter of the year, 40% of cfos saw inflation as the biggest risk and that's a decline now and other big changes, considerably less concerned about supply chain and considerably more concerned about consumer demand as interest rates continue to rise. cfos also have a very mixed opinion on if inflation has peaked already and a lot of

discussion on the markets. 67% said no, it hasn't peaked yet and we get a fresh read, and a clear majority support and increasingly hawkish tone, 71% say the feds get inflation under control and 29% say the fed is doing a poor onand in this high inflation environment and more than a third see the healthcare sector having the biggest growth potential followed by energy and tech and keep in mind, that's with all krshg fos saying we are either in a recession right now or one is coming some time in the next year and almost half see a major economic downturn in the first half of 2023 joe, back over to you. >> a lot of those numbers and sometimes we say they don't add up they kind of do add up, frank, because if in this crazy topsy-turvy world, if the fed's doing a good job against inflation then you've got to

beinga acknowledge that there will be a slowdown or maybe a recession and that's what we're trying to do. >> that's the fed's goal and if you believe that a recession is coming then you believe that the fed is going toward its goal >> i wonder if in the uk are they doing a good job fighting inflation. after yesterday you'd have to question that, i think, that maybe you don't want to go that route. thank you, frank >> okay. >> they already were, based on the 50 basis points. >> already. >> some we come back, some breaking economic data we have new jobless ai iclmsn gdp figures. that's next. don't go anywhere. "squawk box" will be right back.

♪ ♪ welcome back to "squawk box. rick santelli here live at cmehq with breaking news initial jobless claims for the week ending september 24th, 193,000. 193,000. that is the lowest level since april 22nd of 2022 when we were at 181,000 and if we look at

continuing claims 1,347,000, another very, very good number 1,347,000 would now be the lowest level going back to june 17th week. now let's get into the gdp, still remains at minus 0.6% and still back-to-back with negative quarters of gdp and still debating whether we're in a recession or not and second quarter gdp moves up to 1.5 and here are the numbers we're all waiting for, right the price index. zoom, zoom, zoom, up to 9.0 and it still remains the highest level and it we look at what's

going with the core personal expenditure and well cooler than 6.1 in june which was the highest level since 1983 if we look at the marketplace, we can definitely look at how interest rates are coming back after a wild ride yesterday and everybody blaming the bank of england, but as i point out and the wall street journal finally point out, their debt to gdp is lower than ours and our reserve currency status give us us the right to sit a little larger and look less aggressive in that regard and maybe another big issue we should pay attention to is central bankers are worried about the marketplace and very little being said of how they placed year. becky, back to you >> thanks. very quickly, running through reaction to this and just looking at the reaction after

yesterday's very sharp moves and yields and how would you wrap it all up and rate it >> the way i would wrap it up is that you have the fiscal policy one way and the monetary policy doing a reverse, and that liz truss is making a big mistake. i can't tell you whether that's tru true or not and the uk seems to be right in the middle of it and yesterday's action has a very low half life, and the qe will keep things under control a bit and the better question is if we move forward a year or two down road i think wrrt and the turmoil that we've seen and specifically the bank of england, we'll pipe down a bit a and definitely there are issues that they have to contend with and in my opinion the biggest issue of all is the exchange >> loretta mester said they had

to step in to make sure the markets were functioning properly and tray would have to do this, and do you think they'll be furnging functioning well in a week's time? >> i think rising interest rates have been so aggressive that the recent character on the stage is the bank of england, but i think that there's equal responsibility and definitely equal blame to go around, because the bank of england and the uk in general hasn't done anything that the bigger economies haven't done as i said, they're just paying a bigger price for it. they actually start tightening earlier, and i think the upon swaing government and the issues with boris johnson and of course, what's going on with respect with the there are is really the main cause throughout the globe. >> and investors saying enough is enough. thank you. >> steve liesman joins us with

more on the numbers we just got. what do you think of the jobless claims and gdp >> so i'm liking my theory that i brought up a couple of weeks ago when the claims surged that there was a process whereby people would leave industries and spend a little time in unemployment and get snatched up by the industries that still neat workers and that's the theory of explaining what's going on now and i'm not sure those are numbers that you see softening in the job market, but they're not getting it here and what happened is you did have this spike in unemployment and they were in the 250,000 range and you had this increase in the continuing claims and it looks like those folks who left one job and they ended up employed in another place or you have a decline in hiring and these people came off of the

unemployment insurance rules and that's good point from the standpoint and interesting stuff when it comes to gdp numbers and still strong on the final sales side, and on the positive side of 1.3% and a bigger falloff in durable goods sales and a bigger increase in goods and services and still the trade drag and inventories took off 5% from the gdp numbers and that's one of the reasons why people are reluctant to call them on a recession because it's not on the final sale side and it's now this quarter, becky, as you know how well is the consumer doing and how well is business doing to figure out if indeed, how long of a slowing in the economy was happening and so far we were running 0.5 to 1.5% on the gdp growth for this quarter and we'll have to watch to see how much drag is with the fed

tightening and concerns about the economy. >> lindsay was on with us early this morning and she said that she suspects you might see a recession in the second quarter when they go back and look at things can that happen when the recession is so strong >> it's just hard. it's one of those things that mber uses jobs as one of the ways to date when it began not all of the way, but one of the ways and i think we did that a few months ago and buying now, this would have been down 700,000 jobs and we were up 3.2 million and even if you gave recession some time in the second quarter and if it would have been in a typical recession and some reaction in the job market and we just don't have it now. this comes under the category of recoveries or recessions or contractions that have to do with this covid crisis that make

it just a really strange world where you have industries and people back to work. health care and the government and leisure and hospitality still down a million-plus jobs and there are things to do in terms of putting people back to work >> history on this one does not repeat when it comes to history and it is not even quite rhyming, becky. >> steve, thanks. >> rick's gone we didn't see yields that much did you see the stock market 2 wen it went back to the lows. >> the yields picked up? >> it was down 3.70 again and 3.30 >> the market thinking bad news is bad news when you have jobless claims dropping so rapidly. >> i guess they're worried -- >> we're not seeing any effect of the tightening and the job market is not working and we're

still strong the stronger the jobs market -- >> the 75 basis points. >> and the cleveland fed president loretta mester, so warped with the strong jobs market is a reason to sell stocks earlier this hour on the fed fight against inflation and the bank of england's historic moves earlier in the markets in britain. >> market functioning is incredibly important because you won't be able to hit any monetary policy goals if the markets aren't functioning when you're in that kind of situation that they faced they have to make a judgement call about what to do to shore up the market funking and that's different than worrying about volatility in the markets, right? when things aren't pricing you have to worry. >> for more on the fed and the global economy, former sec chair non-executive chair and america snbc contributor and economic

professor at stanford. you couldn't get hired at a good school and senior institution. >> some people think there's better than harvard. >> great school and you get to live in california so, i don't know you should have a big influx so she said as long as the -- loretta mester, as long as we don't have a dislocation in the marks it will be fine. there, but for the grace of god go us, john? if we keep raising quickly or do you think we're going to be okay everything's calm? >> everything will be okay, but it has to be in a determined way, and it can't just be surprises where the market doesn't want to hear they want to see that hey, we have to do a little bit more and the fed seems to be on its right track and it seems to be on the right track, as well and people are not surprised and the danger now is being surprised which are out of the

ordinary. >> i haven't seen you in a while, john. it took a long time. i don't know where you date the accommodation or emergency measures when they start and i guess the financial crisis and we stayed at those levels for a long time. do you think this is all what we're seeing now and how difficult it's going to be to get out of this. do you think it has to do with policy mistakes that go back a couple of different fed chairmen or do you think the transitory mistake of not recognizing it was happening. do you think that's where the mess started >> i think my own view of the fed was behind the curve a year and a half or so was clear they needed to start raising and they didn't raise and they're now on the way, and i think if they just recognize that was behind and we had a meeting out here not too long ago and how the fed got behind the curve and now, and i think the thing is it was behind and other central banks were behind,

as well and none catching up, but if they can do it in a way that doesn't surprise the marks and the interest rate is low compared to the inflation rate and you pointed that out many times yourself and we needed to catch up and inflation rate comes town and it would come down in a way that it doesn't harm the economy and that's what needs to be done and that is better off if it occurs that way. >> you can be an i told you so, john and that makes me -- that's gratifying to me that maybe there is a way out j.d., do you think not all is lost at this point can the fed, you know, orchestrate and we hope for a soft landing and i would hope for a medium landing at this point. >> he's exactly right. the market function was important because we don't have the signals we need to make decision, but we are real le focused on the fed i think we're losing focus on

the other important interconnected markets energy, transportation, logistics, food that we're really focused on the rates of inflation and they're all interconnected globally. when we are seeing with the uk here, i think, was the market saying, look, there's very little that the uk can do on its own here or stepping out of its enters connected nature around the funding marks in the world rick was just talking about the currency steve saying how connected it is where we need to go from a government perspective is how are we shoring is up supply in the energy and the agricultural and food markets around the g7 that's got to be part of when we're doing here just talking about rates is not enough here. people in the uk are worried about heating their homes and

feeding themselves and it's a reaction to that it's. >> you've always wanted a more rules-based format would that have workeded do you give credence to the fact that in a supply constrain world, do you need to make it harder to increase supply? >> is there a lesser of two evils here that the fed should be pursuing? >> i think you're right. the fed was behind on the rules aspect and the rates are low based on the inflation rate based on history the last time we saw the deviation was a terrible time in the 1970s and we don't want to repeat that, and so i think it's not really rocket science. it's pretty straightforward, and they have been behind.

they're still behind and they can do it and they can get back on track in a way that's clear to the markets hey, we know we've seen what's happened before we've seen how the central banks react, as well and we basically do that in a way that makes it clear. i think the fed has become somewhat clear in the last couple of months, last month or so and so that's good. i think that's reassuring to the market, and i think we should get out of this with minimum damage >> yeah. isn't the fed's job going to be easier in those key markets energy, agriculture, energy that we're doing something on the supply side, but won't it be much easier to get where we want to be and much faster if we do those things, as well? >> i think the supply side is important and not give as much as it should that's regulatory reform and that's international aspects, as well and so we can't forget

that i think the main thing now is, you know, people talk about inflation and the from jekz of 2% and it says it wants to come back to that, and i thinkit ca do that in a way that it's not slowing the economy and it can be speeding the economy up and let's just hope that inflation comes down closer over time to what the fed has said it is and it will bring central banks inside the curve as well and that's why the dollar is stronger than other countries. >> that's what they try to do in england is cut taxes and look what happens when you do that. >> exactly because it's not really credible as to whether that's going to solve inflation driven by energy, food, transportation

right, but that's when supply siders cut regulation and then they try it and then they had to back off on the tightening >> well, look, one country, 60 million people, we're talking about it -- >> with a much lower debt ratio than us and we are still forgiving student loans and chip factories and reducing inflation with the climate change. >> i don't think that kind of pickal stimulus tax cut will change the energy marks around the globe. >> maybe we're doing that in the ir, a, but thank you >> professor, thank you. i was kidding about stanford we took a tour of it and -- for how old it is they've made great strides and i think they're -- is it harvard? >> rankings? >> they were higher than --

>> higher than columbia. >> coming up, jim cramer's first take on the trading day ahead. first, as we head to break, here is a news alert. peloton will begin to sell bikes, treads and accessories like mats and shoes at dick's sporting goods that marks the equipmentitss fne maker's first brick and port ar partnership. "squawk box" will be right back. 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

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all right, let's get down to the new york stock exchange and check in with jim cramer i want to ask you about this leg down that the futures took after the 8:30 data came out we saw jobless numbers or jobless claims down more than anticipated, but you also saw the pce and the core pce and the gdp rise pretty significantly, i think for the pce, it went from 7.1% to 7.5% for the core pce, 4.5% to 5.6% and i guess that tells us the fed's going to have a lot more to do if we thought inflation numbers were coming down yet >> obviously, any bull would hope those are rear view mirror but those were strong numbers and hiring remains very strong in a lot of the country. ms. mester, i have to admit, i mean, look, she's on the right course for the working person. because the working person's really hurt by inflation but i do think that when steve liesman said, we're being hit with multiple rate hikes and you don't know what's necessarily going to happen after all these,

when you look at the numbers we saw this morning, they argue in favor of even more multiple rate hikes. that, i think, is a shame, because, wow, i do think things are going to slow down but they have not slowed down at all yet. >> yeah. the fed's stuck in a pretty tough position >> yes, they are >> they don't have many choices at this point. >> it's great to see you in-person yesterday. >> it was great to see you too, jim. it's been way too long >> that was a great conference, and i think that there was a lot of hope from a lot of people, but we have to go through some more pain before we get there. >> yeah, stan druckenmiller said a few things that scared a lot of people, just this idea that you could be sitting in the indexes at the same places we are right now, no growth for ten years. >> well, i know, that was painful. i know stan from the '80s, and he's got outsize views, and all i can say is i'd like to think that's not going to come true, and that stocks are going to remain in a good place, but you may wonder whether there's individual stocks that do a lot

better than the index, and i wish that he would focus on that but he is perennially focused on the big picture, which is right for someone of means, different from a lot of you are viewers. >> he pointed out, look, even when we've seen downturns or flatlines, it doesn't mean you're not going to get some 60% rallies along the way. i guess it's just figuring out when and how >> he's been a teller of truth since the day i met him in '87 i remember telling my partners at goldman, wow, this business is going to be hard. there's so many smart people in it but then he turned out to be the smartest person other than dave tepper. >> great people to see there and a pleasure to see you. don't miss james gorman, an exclusive interview that jim has tonight on "mad money. starts at 6: p00.m. eastern time "squawk box" will be right back.

♪ stock futures pointing to more losses at the opening bell, and by the way, the situation has deteriorated since the economic data that came out just about 25 minutes ago all of this follows the best day for the dow in more than two months joining us rights now to talk more about what's going on in

the markets is "wall street journal" markets reporter and let's focus on that data that came out 30 minutes ago or just under 30 minutes ago people concerned about higher inflation levels and the idea that the fed is going to have to continue to raise rates, job market is still strong >> that's right. this is a continuation of the extreme worries that we've seen throughout the year, and data, time and time again, keeps showing us this peak inflation that we hoped for just has not come yet, and worries about global economic growth have mounted this week and those don't seem to be going away and i think that remains at the top of mind for many traders heading into the trading day today, and we did see that brief rally yesterday but as we've seen at so many points this year, these stock market rallies have been incredibly, incredibly short-lived, and that looks like what we're seeing again this morning, and it goes back to how people are positioned and really trading kind of this broader

macroenvironment, and concerns about the economy are really trumping everything else we're seeing that in elevated etf volumes, elevated put options volumes. >> we are getting to the end of the month, end of the quarter. it's a big deal. you've been watching the options activity people are not expecting things to improve next month. >> what's really shocking is that the s&p 500 has fallen more than 20% this year, and it's on track for its worst annual performance since 2008, the global financial crisis. but what we've seen is people have turned to index options rather than single stock options, again, highlighting fears about the macroeconomic picture and put options volume hit a single-day record in recent sessions, so despite these huge losses, we're seeing people positioning for an even bigger leg lower the question is,some people do view that as a contrarian signal are people still bearish that it's time to get bullish but it's pretty shocking how people are positioned for more

volatility ahead after an already punishing year for both stocks and bonds >> yeah, i was going to say, volatility, not just in the stock market but in the bond market in fact, the bond market's the one that really seems to be driving things >> that's absolutely right i mean, it's alarming to see assets that are considered the safest in the entire world, treasuries, in one of their worst selloffs of the past century. yesterday, yields reported one of the biggest moves lower since the financial crisis these are not normal moves for a market like gilts or treasuries and that's going to ripple over into the stock market. as it has for much of the year, right? for a lot of year, we saw the death of the t-note trade impact stock prices and now we're seeing questions about economic and financial stability in europe ripple over into the bond market and of course ripple over into the stock market and i think that's a lot of what we're seeing play out this morning >> gunjan, thank you

>> i was thinking there is no alternative and now there is an alternative, so tiaa, sounds like a union there is an alternative. tiaa >> yeah, yeah. >> it's taken, though. we got to go >> by cruft? >> yeah, make sure you join us tomorrow, down about 300 "squawk on the street" is next ♪ good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer and david faber. stocks are going to give a lot of yesterday's rally back as revised q2 consumption and inflation data runs hot, claims back below 200,000 we're watching the damage from hurricane ian. nike earnings tonight. road map begins with inflation jitters continuing to jolt markets. fed officials say policy not restrictive enough yet >> plus, apple's deman