points, quite a bit higher than where we started the show. nasdaq has flipped to positive territory. and the s&p is indicated up by about 38 of course, this is after a pretty lousy end to the month and end to the quarter last year anyway, that does it for us today. make sure you join us tomorrow right now, it's time for "squawk on the street. ♪ good monday morning, welcome to "squawk on the street," i'm carl quintanilla with jim fcramr and david faber. got the ten-year below 3.7 a road map begins with the new month, new quarter, but will it come with a new outlook for equities c dow and the s&p coming off the biggest monthly loss since march of 2020. >> credit suisse is seeking to calm investors and client fears about its financial health

and there has been a kardashian crackdown. the s.e.c. targeting celebrity crypto endorsements. it reaches a nearly $1.3 million settlement with kim kaerdashian but we know the real important part of this story, jim, and we'll get to that. >> do you want to do it now? >> well, i don't know if we have tape i don't know if we have the tape >> we need tape for it, carl we need to look at gensler, so we'll have to wait >> it's a reveal, we call it in the business >> okay. >> nice haircut. >> thank you very much >> very handsome >> we'll begin with the markets today, strategists weighing in mike wilson at morgan stanley looking at m-2's collapse. >> mike's made that joke that i'm so tired of. there might be light at the end of the tunnel, but it's been on coming freight train ha, ha, ha get a new joke writer is all i can say. the takeaway of kostin's note is

the -- approthis goldman's note. he's got, like, tara >> there are reasonable alternatives >> yeah. that could be -- reminds me of "gone with the wind. but i do think these strategists are overlooking one key thing, which is all that matters is the two-year, and today, the two-year is on fire, and we don't even know why. maybe something related to the shenanigans at britain >> the fact that they are eliminating from the tax break the highest earners? >> yeah. they really have a real firm hand -- firm grip on the situation over in britain, don't they >> i mean, it's interesting in the uk because, of course, that did send the pound plummeting. they have now gone back on what is the highest 45% tax level they're going to maintain that but it's not about raising money, though. because in fact, the tax break that they are going for at the lower end is, by far, the more costly of the overall tax-cutting provisions >> does the king pay taxes

>> i don't know. wait no right? >> right the king pays no tax that's a good tax break. >> it's good to be the king. yes. i knew you were going there. >> i do. my tuff's better than wilson's >> well, and as for kostin, he makes the point, he thinks the weaker economy, higher rates will drive households to sell about $100 billion in equities next year. >> yeah. >> so, his theme is about losing marginal buyers to stock >> come up with that corporate tax, look, i think kostin wants his cake and eat it too, and i love kons. he's basically saying the individuals are going to bail. now, one thing that is certain is that this is what the fed wants, i think the fed wants your -- you know you know, david, you don't believe me, but they want your portfolio lower, they want your house lower, they want your car lower. >> your portfolio is lower isn't it enough already? are they satisfied now >> no, they're not

the fed needs you to feel impoverished they don't want you spending they don't >> where you tell the kids, we can't do it this year? that kind of thing >> that's exactly right. the kids are staying at home the rent's too big now it's going to be 7% but soon it's going to be 8%. look at the dow. the dow is telling you stay away. now, we have a little bounce here at the end of the month but i'm sure someone's going to try to rain on the parade with the opec story, which we haven't even gotten to >> over the last week, it was about possibly mulling cuts. today, reuters says they're looking at a million-plus. >> russia's calling the tune russia's not exactly doing that well in ukraine. so, do you think anyone fears them unless you think nuclear weapons. >> well there, you said it. it's scary to even talk about it

in a real way, but i'm sure i spent the weekend doing a lot of reading about this i bet you guys did too the discussion of the use of nuclear weapons now and the way it is being discussed and analyzed and thought about and questioned is frightening. learning what a tactical nuclear weapon really is and/or at least the various ranges of what kind of damage it can do, but we're having those discussions right now in part because russia is losing the war badly >> right >> even this morning, reports, ukraine in the south now, getting closer to kherson, making significant gains, the dnipro river, in terms of just pushing the russians back all over the place and then it leads done this road, jim, which i don't really know what the market response will be to that possibility. however remote it may be, and certainly not nearly as remote as it might once have been >> this is -- mike crouch just talked about this. catalyzed by the piece that

russia's become north korea, which is another country that says, hey, look, we're ready to use them the thing i'm kind of astonished is that there's still so many pro-putin people in russia they don't have any free press so, yeah, the conscripts, people are frantically trying not to be caught up in the war you have the individuals in the country seemingly pro-their president and you get a very mixed picture of what's going on there but it feels like 1994 in chechnya where they sent the conscripts and the conscripts were annihilated i think it's going to be a very difficult time for them, but i don't know if the people will know because there's no free press. >> freedman's point is putin's breaking the cardinal rule of energy supply and that is being an unreliable supplier once you do that, who's going to lean on you for supply unless they're in dire straits themselves >> i believe by 2026, we'll be able to provide them everything they want. that's how much we're working to

get us -- get others energy independent. basically germany. >> interesting story in the "journal" about how the chinese have contracted for a lot of natural gas that comes from our country that's offloaded on to boats. on to ships and then brought over under contract to china but they're not -- it's not making its way to china. it goes to europe. >> they're sending it all to europe >> with a huge mark-up, of course, because the chinese have contracted for this certain price, and it makes sense, especially given their diminished energy usage right now given the covid lockdowns. >> xi was photographed without a mask over the weekend at some of these national day celebrations. >> they got two weeks. >> is that meaning they're going to recalibrate covid >> did you see the note that moderna -- that moderna is willing to help them >> they wanted the technology. >> all intellectual property what are they -- who are they? i don't know the axis of evil of russia and china seems more on the run to

me than what they're saying. i'm not -- i'm not -- i'm not betting on them. >> you're not betting on who >> i'm not betting on the mets i'm not betting on russia or china. >> 7:49 in, got to bring up the mets the jets are 2-2 giants are 3-1 >> i'm looking to win a hundred games. it's not over yet. >> yeah, bewell, it's the most hated team in history. >> i lost drinks with chuck robins >> the cisco ceo why didn't you bet on whether his stock holds 40 i think that's a better thing to bet on sorry to bring up stocks >> yeah, thanks. we want to talk about our parent company's stock? we haven't been able to hold 30. >> pass. >> plus 30 and we did mention, by the way, we talked about morgan stanley and goldman, but citi also cuts their year-end target to 4,000

looks for a down year next year. and credit suisse, david, who's in the news for all kinds of reasons. >> yeah, credit suisse, you guys may remember a few weeks ago, i did the story on credit suisse at the time, there were some talk, well, what they need to raise new capital, the stock just continues to trend down, more or less, so you can see over the last week but let's look at a longer period of time here. and as a report at the time, speaking to people who were close to the board and those who were advising the company, and by the way, refreshed on this late last week, no plan to raise additional capital but that hasn't stopped continued concerns in the market and you guys know this even when somebody is reporting on the fact that a company doesn't need to raise capital, it's still a bad thing because nobody even wants to have that conversation whatsoever. it should be something investors are thinking about >> why are the -- in the old days, the american banks would get clubbed. not anymore.

or is that just the treasury >> if you want to cut to, you know, credit suisse is a swiss bank and the swiss government's never letting them go down we know that >> why are we even -- right, so, why are you so right >> what we are talking about is a company that has been under stress for quite some time here in the u.s. as a result of missteps that seem to occur every few years. >> viacom. >> to the likes of billions of dollars. and therefore, this company has a market cap that is below that of what they paid to buy all of dlj 20 years ago >> that was such a good company. >> it was a good company so, in an environment like this, where you continue to have this headline risk, you have a great wealth management franchise, but you have to wonder, are people starting to worry. do they pull off does business slow things of that nature. meanwhile, we're waiting for the 27th that is the date the company says they're going to present their plan, which could include, and this is why i did the story a couple weeks ago, the diminution if not the end of the

way we know it, the investment bank here in the united states that operates under credit suisse so there's a lot going on here, but the company will tell you very straightforwardly that credit suisse has strong capital and liquidity. that was put out in a memo over the weekend by its ceo or on friday and their cet ratio, tier 1 leverage ratio has been strengthened significantly, as they say their total loss-absorbing capacity exceeds both going and gone concern requirements in switzerland and on and on from there. but jim, you and i both know it's these kinds of conversations that are very deleterious to the financial health of a company, regardless of how strong it may be. it's all about confidence. >> you were talking about a lehman moment. i keep thinking, you're finally going to get a bank merger and whoever gets credit suisse is going to do quite well if you cordon off those losses because that is some great franchise storied franchise.

first boston i mean, these guys are -- >> that was one of the great investment banking franchises of all time there are so many other great bankers. >> wasn't there some discussion of reviving the first boston brand? >> yeah. >> by the way, i mean, you know, when they go to an investment banking light scenario, if they do maintain some sort of franchise here in the states, they're going to want one that doesn't require a lot of capital. it can be very expensive to run because you're paying your people so much they had a lot of very talented people, many of whom they had to sign up to guaranteed deals after the blow-up or who left the bank already so their under pressure there's no doubt about it. but when it comes to asset management, wealth management, that's a significant franchise for this company, and the question is, what will happen to the u.s. assets, and you know, if they do split in some way, what does that mean for maintaining an investment grade credit rating, and will they be forced in some way to raise capital again? they continue to tell me, no, no, no >> but what i think the ultimate takeaway of what you're saying

is all these stories that this could impact and crush the market are just people rumor mongering. >> yes >> it's not a big franchise anymore. >> no. >> when i got out of school, i was trying to figure out whether to go to them -- everybody was trying to figure it out because this was the way you went morgan, goldman, or those guys they have had a series of leaders who i think have just befuddled, and the risk control -- but they're -- they're not a big bank so, i mean, if you're going to say, look, what happens is going to bring down anything, it's not going to bring down anything at all. it will be preserved by the swiss. >> the swiss would never let it go if it came to that. meanwhile, they may want to try and at least accelerate their plan to announce whatever they're going to announce by the 27th >> can they just get it over with already >> each day that goes by is probably not great for them. >> yeah. it's going to be -- the season's almost over for them what's their magic number,

david? >> will you stop just stop it because you know what we are in? the new york mets are in the playoffs let's not forget that, okay, everybody? let's not forget that. may not be going great now, but we're in the playoffs, unlike -- how are the phillies >> how'd you do against the padres last go round because you're going to see them again. >> sometimes, posting record numbers isn't enough tesla down after these third quarter deliveries disappoint the street speaking of banks, goldman cutting citi, other news on peloton, amazon, ebay. we'll get to it all. i traded my taxicab for a food truck and a dream. i'm larry villalobos, owner of cachapas y mas,

bringing venezuelan flavors to new york. people love our yoyos and cachapas. we've become a foodie destination. larry doesn't just create mouthwatering dishes; he creates opportunities. small businesses like larry's open doors for neighborhoods to thrive. support your community. support small business.

millions have made the switch from the big three to the best kept secret in wireless: xfinity mobile. that means millions are saving hundreds a year with the fastest mobile service. and now, introducing, the best price for two lines of unlimited. just $30 per line. there are millions of happy campers out there. and this is the perfect time to join them... see how easy it is to save hundreds a year on your wireless bill over t-mobile, verizon, and at&t. talk to our switch squad at your local xfinity store today.

tesla's among the biggest premarket decliners on the s&p the company announced it's deli delivered almost 344,000 vehicles elon musk tweeted, customer experience suffers steady as she goes is the right move he's been hammering this point about trying to smooth out the quarters >> i think he has to move some production, different places, but i take my cue from jpmorgan. they don't like the stock. they have had it underweight but they did raise the price target, which i think is very interesting, although 137 to 153, i guess, most people prefer new stocks, but i think you have

wedbush remaining bullish. david, this has been the bright light of the nasdaq in a period where the nasdaq's sun's been setting and no one seems to want to let this one go >> well, you know, it's not as though demand seems to be in question >> that's all that really matters. >> right and if that's not in question, then longer term, you're going to get to that, what -- i mean, they have the capacity to make 1.9 million vehicles a year? >> the gross margin is going to go up, not down, and that's what i care about >> because his costs have been collapsing >> yeah. and by the way, lithium, that's been coming down big he says we should all get into the lithium business i tried. it's not as easy as possible you got to take the lithium at night, not in the morning. it's stable -- oh. >> excuse me you have to what to the lithium? only at night? >> i was confusing it with the drug, lithium. >> you're raising a good point, jim. which is something the fed's

barken mentioned last week and that is when you're looking, you're waiting, an end to peak inflation, let's say, margins are a big part you got to wait for companies that are trying to make up for lost ground. >> the one that will do it the best is tesla, because he thinks about things like that the other guys have to scramble. i'm speaking with mercedes this morning about the idea that, you know, going all electric and what an edge it is to be tesla and not be worrying about the internal combustion engine thousands of people that are making cars and trucks that are going to go away in the world. so, i do think that tesla, if you sell tesla on this, you're, you know, maybe you can sell them because the multiple's too high but don't sell on this. this is him rationalizing production we all wish that every auto could rationalize production and they're not able to. so, i thought this was positive, not negative in the end. >> when will the day come, though is it when you truly see a competitive set that actually is

winni winning out against tesla, if that day were to ever come, given all the efforts of the other automakers >> that would be when ford produces and run rate of 500,000 at the end of next year. but ford, so far, has been incapable of producing what we were hoping, and all the news out of ford so far has been negative and that has to do with expenses it has to do with warranties commodities. name plate problems. so, while my charitable trust owns ford, they've got to be able to -- they got to be able to do what they're saying. >> it's a benefit to having a long lead time over all your competitors, i guess, isn't there, having done this. >> there's a lot of selloffs for everything that ford can make but they haven't been able to really make. >> we always talk about apple's second strike advantage but tesla's first strike advantage is power >> the analysts are just trying to justify it not going down anymore. and i always say, own apple, don't trade it there's some notes about the app

store doing very badly, and the app store is a big profit center let's see. i say, own it, don't trade it. but people won't listen to me. people want to sell it low and buy it high. >> we'll get to, i think, morgan stanley today looking at app store revenue growth year over year we'll get cramer's mad dash, countdown to the opening bell, kick off the month of october in just a few moments don't go anywhere.

good luck. td ameritrade, this is anna.

hi anna, this position is all over the place, help! hey professor, subscriptions are down but that's only an estimated 15% of their valuation. do you think the market is overreacting? how'd you know that? the company profile tool, in thinkorswim®. yes, i love you!! please ignore that. td ameritrade. award-winning customer service that has your back. that opec plus decision coming midweek is going to be one of the highlight events of the week, and the reports that they're mulling some production cuts, in fact, some of the biggest since the pandemic has oil back to $44 and most of the s&p gainers in the energy complex. opening bell in about six

minutes and don't forget you can catch us any time, anywhere, just listen to and follow the "squawk on thetrt"peng llodst see oni

♪♪ ♪♪ ♪♪ be ready for any market with a liquid etf. get in and out with dia.

>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. let's get to a mad dash on this monday morning, about three or so minutes before we get started with trading here at the new york stock exchange. robin hood >> jason is one of my favorite finance people, used to be the vp of finance at amazon. he's the the cfo they have a september 30th, friday announcement, which talks about how they are taking a restructuring charge that's even bigger than we thought we first thought the restructuring charge would be 45 to 60 million. now it's 90 million to 105 million, and what they're doing, david, is they're closing five offices of which four hadn't opened yet >> so they're not opening four new offices. >> exactly so, i had to partially close or completely close five additional offices, part of the restructuring, four of which are

recent leases that have not been occupied, and they expect to be able to make this up over time i just think what matters, david, is that we have to keep track of how well they're doing because they were the way young people are getting in the market and that chart indicates the way young people feel. >> we had vlad on recently, talking about the 3% that they give certain -- at a certain tier for clients and their brokerage account, just 3%. >> younger people are speaking in philadelphia. they're buying the two year. guys are like 26 what are you doing with your money? the two-year i said, how about the amc, the gamestop they said, what do we do with that junk? it's interesting when you have these younger people and they're not talking about stocks, david kostin so, have you looked at the two-year it's like amazon in the old days have you looked at amazon? how about the two-year

>> i think it's -- goldman has that basket of stocks that retail investors favor the most. it's back to 2020. it's totally full circle >> it really is. david, the pain of what -- i mean, amc ever since they announced -- >> it hasn't done much for them. >> no. but the apes are making a comeback at the philadelphia zoo. >> oh, good. >> they're back. they're getting out. it's getting cold, though, so we don't know what's going to happen so i'm following the apes in san diego. that's what these are, right they're animals. they were people now they're animals. jane goodall likes amc it's like horseshoe. >> jane goodall, what a lady >> the best. to be associated with them >> let's get to the opening bell here and the cnbc realtime exchange and the big board

celebrating its listing at the nasdaq medical technology company logic speaking of potential new listings, at least, jim, mobile i following a registration statement for that proposed ipo. >> well, what can i say? there is no nicer guy in the business than pat. you hear me? no nicer guy in the business than pat bring that mobile ideal, not necessarily -- should have brought this morning, actually >> not the best time to be bringing a technology ipo, so to speak. >> people -- >> it was a public company once, though >> sure. israeli public company it very much wants to be able to do that. self-drive how come every time i say something, they cheer? they're just addicted to what i have to say? i don't hear anyone saying anything if you talk >> they are. they just want to hear you talk. >> they go quiet >> that's why we basically do just let you talk. >> honestly, the mobile i, does

it smack of desperation that he wants to do it now i think he's just want to do it for months and you just to fish or cut bait at this point. >> jim, you've been watching the two-year so religiously for the past few weeks you think we saw the peak? is that what today's about >> i think that we have -- you know, we have an employment number coming up, and i think it's going to be red hot it's still -- i mean, i passed a billboard going from philadelphia where we won to new york, and there was a sign, amazon, people wanted. i thought amazon had made the layoff, but no, it's like you don't even need to interview i mean, amazon's like a no-dock loan i just think things are hot, hot, hot the economy remains too easy to get a job. and i know that that's not what he wants to hear >> we're going to get jolts tomorrow tom lee's done some work suggesting that conference board and indeed.com are going to see that number cool off or actually, on the jolts

number, actually higher. >> well, there should be i mean, what time do higher rates kick in? i still think there's a lot of people, you know, let's say for housing. well, they switched to remodel they're not buying they're remodeling the number of -- this is what the story is from what i'm getting. the number of buyouts that they got at the beginning of covid, a lot of buyouts all over the place, so private plane and pilots that's a good example of what's going on you can't find them. you can't find planes. you can't find pilots. david, the pj market >> private jet market. >> yeah. right. private jet market is demonstrating there are no planes and no pilots now, that's kind of where we are. >> we've been -- that's been the case for a period of time, hasn't it, jim >> no, that's new. >> it is new i thought that was -- i thought that had been the case >> i worked on that all week and that's what you come back with, it's new >> i didn't know it was new.

>> it's new. >> you can still write off the entire, i believe, the entire cost of a private jet on your taxes, right that's a fully deductible cost can you imagine that how come we haven't gone in on the "squawk on the street" plane, guys? we could write that off in one year >> we need twin engine you always want twin engine. >> yeah. i'm not going on a single engine >> no. no apple again. everything is up and apple is down. and it just is -- remember, it was the one that was doing well. and now, i mean, it's going to be saved by the apple watch? >> it had a bad week last week, as you know, a couple of downgrades and real questions about the 14 in terms of demand. >> we mentioned the morgan stanley note on app store growth, jim. down five year on year the slowest as far back as we have data, going back to 2015. they say the app store debate's going to be a battleground even if the trajectory improves >> i continue to think that

china is understestimated for t decline it's putting on the whole world, including the app store, which is gaming this morning, i tripped, because it was so dark, and my watch went off and asked me if i was okay >> are you serious >> it did. was really dark, i missed a step, i tripped, and it said, are you okay i said, i'm fine it said, do you need help? i said, no, i can handle it. i thought it was great it's kind of like a wife >> that is nice. life alert, almost >> yeah. i mean, i was, like, wow it's really worried about me >> and if you -- >> someone's worried about me. >> would it have contacted the authorities? >> yes, immediately. as far as i'm concerned, they're money good so you can sell apple all you want until you trip and then you'll say, i want to own apple, not trade it i couldn't believe it was talking to me. it just knew it. amazing. amazing. >> peloton jim trying to bounce as they are now going to put them in hilton

hotels last week, the news was they're going to sell them in dick's sporting goods stores. >> every time i read the desperation there, i come back and say, what do you think about lulu and how they are doing so this things right? and that one is down so great. a lot of these ones that were down about the high 20s, but lulu is crushing it. calvin mcdonald with mirror. so, stop fooling around with peloton. buy the expensive one. i think you'll do better i think that lulu is doing incredibly well. by the way, hologic ringing the bell, i've got them on tonight this is national breast cancer awareness, but they are doing incredibly well. some companies are doing so well, but we focus on what, the f.a.n.g. thing, you know, david, where it's like, meta -- you know, meta's -- facebook's had a decent number, the facebook numbers aren't falling apart, but it does seem like we need a breakthrough if you're meta. you need a breakthrough. >> well, stocks now out of the

top ten, right >> isn't that something? >> zuckerberg's wealth this year has seen material reduction. >> i've got to tell you. the collapse of the idols is so stark. and david, no new leadership has surfaced i was going to say the banks, because they've stopped going down, but it doesn't matter. >> well, energy has been the leader it is again today. >> well, today it is >> exxon and chevron both up over h4%, this on the possibilit of significant production cuts from opec. >> can you call, because of your unbelievable documentary, can you call exxon and get a read? >> i do have connectivity. i have some. >> what's the word >> i haven't connected, but i can. >> yeah. >> now that you've requested it. >> i would give them a individual if i were you >> what is your question >> do they believe that this is all much ado about nothing because i think that what the million cut, we still have a deal in this country to be able to get more, you know, our

country, president biden does not want to lose the midterm election so, i doubt there's going to be a spike in oil at the pump >> yeah. it has -- gasoline has come down sharply from, obviously, the highs of, really, not that many months ago >> you don't read that anymore >> no, not at all. well below 4 bucks >> this is so stupid i mean, it must be all etfs, carl conoco is not worth this much on the basis of a million cut the market is such an extremist market in the way it acts, and to me, it just says maybe kostin's right, a lot of money coming out because there seems to be no liquidity on days like today we've got some very bullish things happening no one cares >> you're saying there's no shades of gray everything's binary, either the worst or the best? >> i think that's a sign of a not healthy market i do believe that if you think,

like, don talked this morning, if you think that the forward estimate of the s&p doesn't go down, this is one of the cheapest markets in history, but everybody's saying the earnings are going to come down so it's not as cheap as it looks i'm principally worried about that >> that's the center of the debate a lot of this is, how far are we going to come down once we get the numbers? what's the guidance going to be like as we now -- now we're in the third quarter. i'm sorry, now we're in the fourth quarter >> we don't have to wait that long and i think the first quarter, the banks, i'll tell you, if jamie goes with the second jamie, the negative jamie instead of the first jamie, we're done we've been lost. >> you mean, if he goes with hurricane jamie? >> yeah. >> well, you saw what was said on friday. one of their bullish quants at jpmorgan increasing worry about a policy mistake that could delay their targets. >> i just think everyone, first of all, people think that jay

powell is asleep at the wheel. the guy is just mr. rate hike now. remember when he was mr. rate not hike >> i do. he was mr. rate not hike for perhaps too long >> the first one was a 0.25. that was a mistake >> now he is definitely mr. rate hike >> this is a good example. wells fargo is upgraded today by gold goldman. it's just a giant yawner my travel trust owns it. >> they go from 46 to 48 it's not -- it's $2. >> the price target bumps are so pathetic >> what's more interesting is the downgrade of citi and the target of 950? >> citi's trades at a multiple that reminds me of, like, glen fed. >> citi is traded at a discount. >> doesn't that mean at a certain point we got to relook at their book? >> or we've got to kond why. why? >> that's what i'm saying. >> it's traded at a significant

discount to book now for, i don't know, for a long, long time >> at a certain point, that means we ought to go in there and take a look at what the real book is. >> that is a great question, jim. is there something else there that the market seems to know about or worry about speaking of, we should take a look at cs citi is out with a note on credit suisse, saying -- and we talked about this, but stock's kind of resuming some of the significant losses we saw earlier. had seemed to pull back for a bit. we would be wary of drawing paralleling with banks in 2008 or deutsche bank in 2016 rather than liquidity concerns, we see the current move in spreads as a security cost get wealthy clients to say, well, i got money a lot of places, why would i keep it here and so, there's that there's still this continued reverberation of the need for a capital raise and the idea that,

you know, they'll run out of time to some extent. i don't know i'm never -- you're never -- it's never good when the ceo is saying, stay calm. that's never a good sign >> right jpmorgan told you that remember, he said, if you have to explain -- >> i mean, we can go back to bear sterns and things of that nature but again, people close to the bank who are in positions of authority within the bank have told me there is not a need or advising the bank, not a need to raise capital. that continues to seem to be the point, but the market not necessarily believing it the most credit false swap, as you're seeing there, haven't seen that level since 2009 march of 2009. >> so many negative notes. roadblocks starts with a sell. i know the guy who runs it united parcel, morgan stanley, cutting price targets to 100 >> a hundred we got morgan stanley upping

box. >> yeah. good for him may have to give him a call. >> as we go to break, let's check the bond report. obviously, yield's a big piece of the puzzle today as there are about 10 or 12-day low, both here and on some of the german ten-years. we got data coming up after the break. ♪ icy hot pro. ♪ ice works fast... to freeze your pain and your doubt. ♪ heat makes it last. so you'll never sit this one out. icy hot pro with 2 max-strength pain relievers.

- oh, the stock market is doing that fun thing again. so you'll never sit this one out. news from the future: you're going to live through that about 10 more times! (laughs) no stress. i just discovered yieldstreet.

they vet investments that don't ride the stock market rollercoaster. - [narrator] yieldstreet: private market investing. welcome back to "squawk on the street". rick santelli live with breaking news s&p global, manufacturing pmi, our september final, which means that the 51.8 that mid-month read's going to get tossed and that followed 51.5, which was over a two-year low going back to july of 2020. the new level is 52.0. 52.0, a bit better than expected, and of course, the best number. we have to skip a month, since just july of this year when it

was 52.2 we all know that manufacturing may be coming around as some of the supply chain issues ease back a bit, but we also see that the global recession and slowing in many sectors in the u.s. is keeping demand a bit lower than it had been. we still have construction spending, an ism yet to come don't change that channel. "squawk on the street" will rernft aho baktu aer srtre ♪ ♪ i was having relationship issues with my old bank. it was just take, take, take. so i moved to sofi checking and savings. get 2.00% interest, and earn up to $300 when you set up direct deposit. sofi. get your money right.

esg is responsible investing. you set up direct deposit. who's responsible for building esg into your investments? at pgim, the pursuit is on for outperformance. as active investors, to outdeliver with customized strategies, integrating esg best practices into our investment decisions. as asset managers and fiduciaries, to outserve, with our commitment to better esg outcomes. join the pursuit of outperformance at pgim. the investment management business of prudential.

our internet isn't ideal... my dad made the brilliant move to get us t-mobile home internet. 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.

the securities laws congress put in place that you have to disclose not only that you're getting paid but the amount, nature of it and this was really to protect the investing public when somebody is touting a stock, and whether that's a celebrity, an influencer, or the like, and that's at the core of what this is about and we brought these cases in the past >> that was s.e.c. chair gary gensler, a guest earlier on "squawk box," talking specifically about that settlement that they reached with kim kardashian for, jim, her touting certain coin >> yeah. >> without, i guess, effectively letting people know that she was

being paid to do so. >> i thought it was interesting that -- and curious. they emphasized her, because a specific coin, but there are other people, actors, who were in, but i guess they weren't recognized as single security. they were more talking about a company. >> perhaps that's why matt aboua company. >> matt damon, for example. >> if i were someone representing these people right now, i would say you can do anything but do not represent anything that's crypto, because this is such a high-profile thing. chairman gensler talked about this, there are so many of these and they're all prone to manipulation, so i would say, hey, listen, celebs, go talk about something else to talk about, not this. >> the headlines in crypto are brutal there's that, the ft story that the celsius chief withdrew money before they froze customer accounts, nft sales in the quarter just ending now 60

quarter-on-quarter >> the one thing i keep hearing, if you live in russia, china, whatever, and you want to get your money out, the euro falling, that's why they haven't fallen apart that's why they've not they've held in. >> ask then there's really the most important part of the story. >> what's that >> gensler's not at home. >> he's obviously fired up >> it's the first time we haven't seen him in front of the fireplace. >> i would say - >> we did discuss with him last time he was on, and he said, yeah, it's still remote at the s.e.c. it's voluntary to come to the office at this time he appeared to be someone other than the home fireplace. >> i thought the gravitas was increased by not being in front of the fireplace >> me, too. >> the word from home thing -- >> it felt better. >> by the way, norwegian eliminating all testing, all

m masking, all vac requirements. >> i'll be on norwegian thursday trying out the new boat. >> you are >> just doing a piece from there. i'm not going on an actual - >> you said i was going to be on an norwegian cruise. >> my daughter who has cruised on norwegian says virgin has great cruises. virgin, upscale. that's not a great chart, but great cruise she was on an electrical music cruise. >> you're interviewing the ceo of norwegian >> yeah. franc del rio. >> right here? >> yeah. you knew i was going on a cruise last february. i was going to take the haven line, go to alaska, and then there were three days -- look, i think cruising is back, but carnival still, despite the stock price, 2023 bookings are still good and i think the fact that they're -- that they're getting rid of the idea you could get the flu -- the equivalent of the flu.

it's not china people in this country are -- most are vaccinated. >> with all that, bulls starting out the month with some green. 3620 let's get to bob pisani. morning, bob. >> morning, carl futures rose the buying enthusiasm is fairly muted. it's -- energy is definitely there. oil is at $84. that's certainly a good sign it's the only sector up on the year so energy is up, what, 30%. the other ones, you want to look at what i call the risk-on sectors. metals and mining. that's a good sign communications, another risk-on. that's not bad ark innovation getting weighed down by tesla, docusign. i would say it's mixed in terms of risk-on not a lot of heavy volume, that's disappointing energy stocks, high beta names like marathon, devon, haliburton up 6%. airlines, all new lows

southwest, delta, american airlines, new lows, a shortage of pilots and planes not good for the airline industry overall as for october, well, seasonally this is not a bad time to be involved here. generally october has above average monthly gains. we're going into november-december, which is seasonably strong. we're in a midterm election year and that traditionally is stronger, q4 and q1, up 6.4% and 6.9% historically in this period my thanks to stan for those stats. this is not a normal year. there's less confidence in the seasonality indicators that we always bring up at this time of the year just bear that in mind when you hear about seasonally strong here as for what's going on for earnings season, we're going into it, let's just call it lousy. we had 15 companies reporting, nine beats, five misses. that's not good. nike, fedex, carmax, micron, all disappointing guidance the big thing here is the operating margins. remember in 2021 we had a record

high in the second quarter 13.5%. all-time record operating margin it's been coming down every quarter, almost since then i think q3, we don't have a q3 number, though i think you'll see that in the low tens or high nines historically, by the way, that is not far from an average number we've been unusually high in terms of operating margins that's the big issue the big thing here is overall earnings estimates are in positive territory, but the growth sectors are really getting hit hard i'll show you one example. here's the technology sector july 1st, the fourth quarter we had almost 9% earnings estimate growth today, 1%. that number is going to go negative in the next few weeks, is my estimation that's just one example. you can look at communication services any of the other growth sectors. they've been dramatically cut. it's energy that's holding up a lot of the s&p 500 as for where we are right now, let's just call it earnings cluelessness i have never seen a range of estimates here the multiple on the s&p right now is 15 times 2023 numbers

what is the right multiple nobody knows if you think we're in a recession, you could be 13 to 15 if you think we're not, we could be at 17 that's a pretty wide multiple. the 2023 earnings, right now, are expected to be up 7% is that right? who knows. people think it should be lat. people think it should be down 10%. that is an unusually wide dispersion that is why you are getting so many estimates you're getting 3,000 and 3600, carl we've got to figure out what the right earnings number are and we won't know for the next, unfortunately, month or so. >> it's going to start rolling in event bually, bob. what's on "mad money"? >> it's national breast cancer awareness month. they have an amazing machine, 3d, hard to get parts. there are so many good companies and good stories that people should focus on. >> we still haven't

congratulated you on having the only undefeated team in the national football league. >> as my wife says, you were not on the field, jim. i say, wait. but congratulations to coach nick and howie roseman has put together an incredible team and doesn't get any credit. >> fly, eagles, fly. we'll see tonight, "mad money," 6:00 p.m. eastern time. dow is up 318. we have ism on the other side of this break - when you lose power, life stops. your home needs a hero. (motor rumbles) introducing power joe by sun joe, the easy-to-use portable generator that runs on propane. just like your barbecue grill. forget pull starts. power joe starts by pressing one button. the secret is power joe's exclusive pro power 3x technology. power start features a lithium ion battery to instantly turn on power joe's 4,100 watt max motor.

power cool keeps the motor running cooler and longer. and power fuel uses cleaner propane, and its virtually maintenance-free. power all your devices with multiple outlet options. turn on lamps, the fridge, microwave, heaters, ac and electronics to stay informed. when the power's gone, power joe on! - now, we'll never be in the dark again. - gas generators are bulky. and finding gas in a storm is tough. but power joe is compact and propane is easily available. just connect the hose like on your barbecue and press one button to turn on the eight horsepower engine for up to nine hours of run time. - getting power from a propane tank is a game changer. - [announcer] call now to get the power joe portable generator with 24 volt ion+ battery and charger, four piece hardware kit, five foot propane hose, and sun joe's premium three year warranty, along with free shipping all for just $999. order now and get these hardworking accessories free. but hold everything. go with joe right now and we'll take $100 off.

you get all this, over $450 in savings for just $899 if you call now or go online to trypowerjoe.com and pay as low as $84 a month. your first payment of only $84 is all it takes to get power joe to your door. this is an exclusive tv offer that includes sun joe's 30 day money back guarantee. ♪

welcome back to "squawk on the street." nick santelli with more breaking news construction spending for the month of august, expected to be down 0.3 comes in double expectations, not good down 0.7 of 1% for the third negative month in a row. ism manufacturing, these are september numbers, expecting 52.0 on headline 50.9, 50.9 that is the lightest since may of 2020. and if we look at prices paid, 51.7 roughly in line with

expectations sequentially lower that is the lowest level also since june of 2020 new orders, 47.1 it breaches 50, which isn't good last time we were under these levels, we have to go back to 2020 as well timf finally, ism employment, 48.7. 48.7 is the lightest level going back to 47.3 in june of 2022 so, we do see a deterioration in all the isms construction spending, three months negative. and we see interest rates down double digit yields all the way out to the 30-year bond, which is only down nine plus basis points as dropping yields in europe continue to extend and pressure u.s. interest rates carl, back to you. >> wow a lot of data there, rick, thank you.

rick santelli. good monday morning, welcome back to "squawk on the street. i'm carl quintanilla and morgan brennan and david faber. rick showed you the data and that has the bulls a little powered up as we begin october dow is at 400 and s&p has reclaimed 3600 >> 30 minutes into the trading session. here are three big movers. we'll start with credit suisse under pressure shares are down 2% we'll take a closer look in a few moments. plus, roblox with an underperform rating citing too much uncertainty around the game platform's stock they are down 5% down 60% year-to-date. we'll end with deal news viasat, the satellite operator selling military communications to l3harris for $2 million those shares have been unhalted.

up 39% right now l3harris up 2.5% we have more on this deal later in the hour. getting back to the markets, macro with new calls citi cuts the year-end target on the s&p to 4,000 they were at 4,200 predicting a down year for 2023, down to 3,900. citi's chief economic strategist, scott kroner joins us it sounds like earnings growth is going to be one key dynamic here. >> yeah, it's still an area where i think we can differentiate. our view is that, yes, earnings expectations need to come down, particularly for 2023. but we also are of the view that relative to prior recession periods, we'll find earnings prove more resilient than many fear. >> so, the idea of a severe recession still is a minimal

probability in your model? >> so, it's -- mean, this is the key question, right? so, back in the springtime frame when we were first putting out recession scenarios, we gave a more severe recession, a 5% probability as events have unfolded over the past couple of weeks on the heels of, you know, higher interest rates and stronger dollar, you're starting to see some, you know, cracks, if you will. so, what we've done is lifted our severe recession scenario from a previous 5% up to something closer to 20%. still think the base case is for a mild recession scenario but we have to be more attentive in our view to unintended consequences of the fed policy actions. >> scott, that's a big jump from 5% to 20%. meantime when you were on with us last, you said the market was primed for a rally here. we seem to be getting it to start the month of october this morning. your take right now in the near term, and what you're watching

as the next, i guess, key catalyst this week, as we do see the s&p up 1.5%. >> right so, i say there are three areas that we're kind of focused on. the first year, the commentary on the macro indicators we're in an area where we think that news is good in terms of the reflex on the fixed income side and along that point, the second element of that is that we're watching the fed funds futures curve very closely and as it comes in or shows any signs of less hawkishness that had been priced in on the days following the last fed rate hike, that implicitly is a positive in our view for valuations, which kind of syncs back to our move to go tech overweight third is longer term, what are we watching for here there's no question that the fed is very clear on what it's focused on so, in addition to the inflation indicators, we're watching other

macro inputs, particularly on the wage side that shows some signs of relief that would take onus, not so much on the fed rate trajectory but on how high peak rates might get. >> what would you be telling clients to do on a day like today? >> our view is pretty clear. yes, we've lowered our year-end target from 4200 to 4,000. our implication is in q4 we're in for relief rally. we'll play a constructive tune headed into q3 earnings. where i'm different than other speakers, i do think we'll see onggz earnings resilience during the q3 time frame. in the context we're very aware there's probably room for '23 numbers to come down in the shorter time frame, we think q3 earnings in aggregate will provide some form of relief

around the economic concerns that come with the rate policy >> scott, some of the other year-end outlooks we're getting the last few days center on policy and the likelihood of policy mistakes. the more aggressive actions by central banks around the world, japan, reports of mulling capital controls in taiwan how much of that plays into your view for next year >> well, i put it all in this category of unintended consequences and, you know, eventually fallout of, you know, of the rate policy with this read-throughs to it the dollar a lot of this is imponderable, it's difficult and i don't want to speculate on it that's what we try to incorporate in the more severe recession scenario point we're just trying to acknowledge that, yeah, there are these risks out there. they're very hard to pull into a more specific, whether it's an earnings outlook for the s&p or price target outlook, but they

become something that we have to, i think, be more attentive to as a tail risk. now, the point on that, though, would be, this is pretty well embedded when you sell the s&p off, nearly 17% from the mid-august high to friday's close, you're imbe embedding a lot of concern into that price action. we put in a downrisk in our note this morning is, heck, what if you actually get some relief on the inflation front and the mack c macro data that goes with that that engineers results or a change in fed tune, say, by the end of this quarter, then you mitigate a lot of that concern and you give the market a reason to lift. again, the tail risk discussion here is wide and i think will stay wide. most of the focus is on the negative side of it. we're trying to allow that there's, you know, some potential inefficiency over the q4 on the more positive side >> right, right. well, the note got so much

attention this morning, we really appreciate you shining light on it on tv. thank you. talk soon. >> thanks, guys. we'll stay with the markets and bring in somebody who buys and sells stocks for a living. mike nicholas, oakmark portfolio manager. good morning. >> good morning. >> let's start with your experience running a portfolio in a market like this. anything it's equivalent to? it's been a tough year your fund it down 23 plus percent. similar to what the market is. what do you tell your clients? >> at oakmark, we're very long term we know we invest in businesses that are going to experience, you know, tougher times, recessions and booms throughout their life as long as they're well capitalized, you know, we believe our businesses will be able to withstand some tougher times if we end up facing them the silver lining of a market like this down 20 plus percent is we're unable to uncover

attractive new opportunities and add to existing ones like some of the names we're here to discuss today. it's a very actionable period for us. >> that's good to hear how do you change the action you're actually committing to based on what your views are of the future >> well, we have an opportunity set that we are always looking at and trying to find the best risk-adjusted returns we can deploy capital in. you know, that's part of the role of being a portfolio manager, constantly re-evaluating and thinking about how you want to position the portfolio and where the best risk-adjusted returns are. >> right which leads you to where, mike >> you know, one name we like today is willis, towers watson willis is a leader in insurance brokerage. they help their clients manage complex issues involving insurance, talent management and benefit plans with best in class. it's a good business and good industry historically, willis had been undermanaged and its operating margins were well below peers.

unsurprisingly, one of its chief competitors spotted the same opportunity a couple of years ago and tried to buy the company, but regulators effectively killed the deal. you know, willis is a stand-alone has committed to a lot of change since then they have a new ceo, a new cfo, a refreshed board. they committed to a large capital return program and a big cost reduction program we think looks highly achievable if not conservative. if you look at the stock today, trades for about $200 a share. if they deliver against the cost opportunity, deploy capital the way they promised us, we're looking at a business that could earn $20 a share in a few years. and, you know, high performing peers like aon or marsh get 20 times earnings we think it's upside potential there. >> it speaks to the other financials and opportunities there. we talk so much about the banks, but it can be insurers or some other names. walk me through other stocks where you see opportunity right

now. >> yeah, you're right. just back to willis, the non-bank financials we don't have to worry about credit risk. it's more of a fee-driven business as opposed to a spread-driven business another name we like that caters to a lot of financials is fiserv i think in order to frame the investment thesis a little bit of historical context would be important. over the past several years there have been heightened fears that some younger, more disruptive payment companies would significantly impair the growth profile of fiserv's payment business they were trading at enormous multiples of revenue while they fisrv contracted what's interesting is that if you look at the fundamental performance of their payments business, it's actually accelerated in the face of some of these competitive pressures,

suggesting that, you know, perhaps some of this was a bit overblown. that's due in part to assets like clover they own, a payments platform geared towards small and medium size businesses similar to square. while the disrupters have seen their multiples come in considerably, there was no counterbalancing mechanic innism in play. the multiple of an innovative incumbent like fiserv never recovered to appropriate levels. >> finally, mike, i notice the performance of the fund you run is virtually identical to that of the s&p are you weighted very similarly, or is it simply, you know, a coincidence? >> we are a few points better than the s&p today no, we do have quite a bit of difference with the s&p. if you look at our financials exposure, it's our single biggest allocation today it's a really eclectic mix, like we spoke of. that certainly looks different than the s&p

and energy energy is an area we've had multiples of the exposure of the s&p. and i think we've talked about our thesis there over time but those would probably be the two areas most pronounced, most different than the index today. >> as we take a look at the oakmark fund and that's different than the oakmark equity and income fund you have a lot of them over time they've typically outperformed mike, thank you. >> thanks for having me. >> you're welcome. i want to move on to credit suisse, shares are off again this is a company i spoke about a couple of weeks ago because we're waiting for still a few weeks from now, by october 27th, when credit suisse will report numbers for what is expected to be a fairly significant reordering of the company's business, particularly with focus here to its u.s. investment bank. you can see the shares have actually come back quite a bit from what had been significant decline earlier.

a couple of weeks ago i was talking about the fact that while there were rumors in the marketplace as to whether credit suisse would need to raise new capital, close to the board, close to those advising the company on its plan, it firmly indicated that was not part of the current plan that continues to be the case, although the chorus getting even louder in terms of, well, maybe they will need to. of course, as you wind down certain businesses, losses potentially increase prior to the actual closer of those businesses it's unclear at this point what they're going to do. in a memo that was released friday, ceo of the company sort of reassured both clients and customers, employees as well about liquidity, about, you know, not believing what they're reading in the media and the like this morning we got a number of different research firms coming out and talking about things securitized products, as i

reported, is considered to be one of the businesses that certainly would be sold in some fashion. that would actually release capital, but there is still continued questions as to whether they're going to have to raise capital, particularly if you were to split companies, maintaining investment grade would require more capital now, i want to bring in leslie picker leslie, any time we have a conversation like this, there was a note from citi about securitized products and other businesses every time you have a conversation like this, even when a company says, we don't need to raise new capital, it's certainly not good at all. it does have the effect, it would seem, of scaring certain clients of that company to, perhaps, pull back. >> that's right. and every source i speak with kind of points to that date, about a week and a half ago you mentioned where there was a report out there saying they were sounding out investors for a potential capital raise. and then you accurately reported that actually that wasn't taking place. in some ways, the company is really in a catch-22 because you

can't really go to the market and issue new equity and try and raise additional capital if you haven't announced that plan that you said you're going to announce investors are going to be like, i don't know what i'm signing up for here in buying additional equity if i don't know what that full plan entails. we're kind of in this weird wait and see mode with credit suisse we we have this three 3, 3 1/2 week period before we know what the numbers look like, what the transformation plan looks like in the meantime, you have to fund that transformation wbw says they need $6 million to fully restructure in a good way to support growth and protect from the unknown but against that back drop, it's unclear what the real pain points are that would indicate that credit suisse isn't able to, you know, open for business tomorrow, which is what some on twitter and social media have been fearing >> that seems hard to imagine, particularly, leslie, given the

fa account that the swiss government would never allow that to happen we should also point out they continue to have a very strong asset management, wealth management business. that's the core franchise. but certainly there are going to be, it would seem, significant changes to the storied name here in investment banking in the u.s., which is one reason we spent some time talking about it certainly i can go back and remember first boston, once one of the leaders when it came to that even more recently in leveraged finance and spacs certainly had a leading role >> oh, they were at the forefront of the whole spac underwriting they were the ones who kind of pioneered this deal as kind of a back doorway for ipo that's been lucrative, but as that has slumped, i think in their q2 earnings, they saw 96% drop in capital markets during the quarter year over year so all of that has led to tremendous losses in their

investment bank. a lot of people are looking at this and saying, there's a big profitability issue. balance sheet, while interconnected, a bit more of a question mark. obviously, there's been some impact from just the volatility we've seen in rates on the makeup of their balance sheet that we just don't know what that looks like at this point in time >> yeah. as we see, no longer at the bottom of the screen, shares are no longer sliding. they've come back during the session and now in positive territory. leslie, thank you. >> it's all that context you two gave it. >> there you go. as we head to break, let's give you a road map for the rest of the hour. tesla shares are under pressure. they are sliding after reporting third quarter deliveries we'll go through the numbers. keeping up with crypto the s.e.c. going after kim kardashian after that social promo for crypto. we'll check in on the state of freight a 20% drop in ocean freight orders for the past two months we've got a lot more "squawk on the street" straight ahead

don't go anywhere. - 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.

new this morning, the s.e.c. is charging kim kardashian for a post on her instagram. without disclosing how much she was paid to promote it joining us with more this morning is our own andrew ross sorkin who talked to gary gensler on "squawk." hey, andrew. >> hey, carl the s.e.c. saying kim kardashian

has agreed to settle the charges, pay more than $1 million in penalties and cooperate in an ongoing investigation. in a statement to cnbc, her lawyer said, ms. kardashian is pleased to have resolved this matter and she'll do whatever she can to assist the s.e.c. in this matter. she wanted to get this matter behind her to avoid a protracted dispute. the agreement she reached with the s.e.c. allows her to do that so she can move forward with her many different business pursuits i spoke with s.e.c. chair gary gensler, as you mentioned, earlier this morning i asked him about the rules around advertising since we've seen many celebrities endorse crypto on social media and in commercials. >> if you're advertising perfume or advertising vacation homes or anything else on the internet, there are various laws related to that but these are the securities laws and those other laws might be appropriate to just say, #ad.

in the securities laws, congress put in place that you have to disclose not only that you're getting paid but the amount, nature of it this was really to protect the protect the investing public when someone was touting a stock. whether that's a celebrity, influencer or the like >> carl, gaens gensler sending a warning shot to influencers everywhere about what should be required when it comes to disclosure we asked him about exactly what that disclosure looks like i have to say as strict as you may think the law is, it seems like there is some distinctions between where social media may lay. she had #ad on her post. and where an ad that might run in the super bowl with matt damon may lay, i don't believe there's disclosure about how much he may be paid. there's also another issue that a lot of folks in crypto are watching in this, which is that ethereum max has clearly been deemed a security, which raises

all sorts of other questions about how other tokens will be regulated in the future as securities or not, and whether places like coinbase will ultimately have to turn to a broker/dealer if it's not an exchange dealing with securities an issue in the news a lot of people will focus on because of kim kardashian but folks in finance as well. >> so many ways you could parse through this, andrew the last point you just made is sort of where i honed in this morning, the idea that basically by the settlement happening, that the s.e.c. is deeming this a security there's been some debate over the last couple of years of where cryptocurrencies and their different assets associated with crypto platforms and everything else would fall, whether it was s.e.c. or whether it was the commodities regulators or elsewhere. >> that is the big issue and in terms of being consistent -- we should say, there is an expectation that the

coinbases of the world will ultimately turn to broker/dealers and other things like that. there's also going to be questions, i imagine, about what it means to promote a security and what it means to promote something like bitcoin, which is not considered a security. if you're michael sailor out there with microstrategy, for example, can you promote something. you may not be paid to promote it, but, boy, do you have a huge stake in it. in which case, you probably have a bigger stake in its benefit and could make more money promoting it than somebody getting paid to promote it you'll see a lot of debate around this decision this morning. maybe we'll see more of these types of settlements >> i think you're right. definitely a shot across the bow in terms of this discussion. andrew, thanks for being with us >> thank you. as we head to break, airline stocks are moving between positive and negative territory today. american, southwest, delta, all hitting their lowest level since 2020 shortly after the opening bell higher now united is still around 6% away

from its march low we're back in two. how will your business adapt to change? you could hire an office full of peyton mannings. what's up, peyton? good morning, peyton. hold for peyton. they'd huddle.... welcome to the peytonverse. such a visionary. game plan... you go. no, you go! and call audibles... double our investment in omaha! omaha! omaha! omaha! or you could use workday. omaha. the finance, hr and planning system used by over half of the fortune 500. for a be-agile-like-an-mvp world. workday. for a changing world.

- 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.

dow is up 612 points on this monday morning first day of october and q4. bad news is good news as some of the weaker data has yields down. ten-year, 362. the two-year just 7 basis points from 4%. all dow stocks are green and 9 to 1 up day on the s&p. >> consumer discretionary shows signs of life to kick off october as well. the vanguard consumer discretionary index fund, vcr is up marginally this morning after an august in the red and a rough month last month one key holding heading lower, tesla, over 15% of the etf and down over 6% this morning on deliveries that were a record for the automaker. 343,830, to be exact, for the quarter. but still short of street forecasts. of course, david, we know tesla has an outsized impact on the broader market nonetheless, not denting the gains we're seeing for the s&p and the nasdaq right now >> no.

strong morning thus far. as we know, it can change quickly. let's get a news update. for that we go to kristina partsinevelos. >> good morning. here's your cnbc news update at this hour. indonesian police are investigating over a dozen officers responsible for firing tear gas into a crowd of rioting fans causing a deadly stampede police say supporters of the losing team rushed onto the pitch after the game sparking panic and chaos. 125 people died with over 300 others injured, making it among the world's deadliest disaster at a sporting event. ukrainian troops are claiming full control of the eastern logistics hub of lyman which marks the most significant battle gain in weeks this follows russia's vladimir putin proclamation that its country annexed a fifth of ukraine on friday in an illegitimate farce being condemned by the west. swedish scientist winning

the nobel prize for his research on human evolution it has key insights into the human system and brought to light the existence of an unknown human species from a 40,000-year-old bone fragment. carl, back over to you. >> fantastic thank you, kristina partsinevelos. we'll stay on top of today's rally. 2% gains on the dow, s&p former fed governor frederick michekin will join us. this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done.

i'm okay. - 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.

we're checking in on markets. the dow is up more than 2%, 611 points the s&p is up 2% as well, 3657 is the level there the nasdaq is up 1.6%. this as investors speculate about the need for the fed to

pivot from its big rate hike strategy joining us now is former federal reserve governor and columbia university professor frederic mishkin. thank you for being back on the show i want to get your take on this notion of a so-called pivot. we've had a lod of fed speak we're expecting more this week so far officials have come out and strongly said the need to tighten continues, however, perhaps some shift, depending on who you're listening to in the past couple of days, in items of how quickly that pace of tightening will continue as we come to the end of the year. your thoughts? >> so, i think, first of all, the fed should not pivot and i don't think they will pivot. i think they very much understand the kind of mistakes that have been made in the past. when you start to raise rates, and then you basically chicken out when the economy starts to take a little bit of a hit the economy hasn't really taken

a big hit yet that the fed actually knows so far they actually reversed course so quickly, has actually worked pretty well. they have lost a lot of credibility because of initial mistakes, i think, have been made i've been very critical. they actually turned the ship around much faster than i expected them to do, is which is good news. inflation expectations have come back down. i think the markets are understanding the fed is going to be -- has to be tough there are some elements of the market that don't believe that the markets have also been behind the curve, always expecting the fed not to do as much as they actually need to do and the fed has surprised them by being tough i think the fed is doing the right job and i think the markets are making a mistake, thinking there's going to be a pivot. >> is it a mistake to read into, when you have vice chair brainard coming out a couple of days ago saying, we also

recognize risks may become more two-sided at some point and uncertainty is currently high and there are range of estimates around the target range for the cycle? should markets not pay such close attention to commentary like that right now, or does that speak to the fact that we are seeing some major volatility and we are potentially seeing some warning signs in credit, for example? >> yes so, look, there is an issue, which is a separate issue, which is what we've seen happening in the uk and the dilemma for the bank of england, which is that if your fiscal policy is out of control, that you basically start talk about cutting taxes and make no efforts to restrain spending in a situation like we're in right now, then, in fact, we can get into a situation called fiscal dominance by the academics where the central bank wants to do the job of tightening, they have a problem because the debt market is reacting so badly in an unstable way that the central

bank has to intervene, which is exactly what we've seen happen in the uk. the central bank is basically between a rock and a hard place. so, this problem is a serious one. one of the things we know is, in terms of research, is that central bankers can't do their job alone. they have to have fiscal responsibility in order to control inflation. and, unfortunately, uk is showing that if you don't do that, you have problems. and also the u.s. fiscal policy has been way too expansionary. the biden 2021 bill was a bad bill way too large. and we're paying the penalty for that the central bank has to stay tough. in fact, it's playing a game a little bit with the fiscal authorities saying, we have to be tough they may have to actually intervene directly in markets to keep them functioning well on the other hand, they have to keep tightening. that's exactly what the bank of england has indicated they'll do i don't know if they'll be able to continue to do that, but that's the nature of the game they have to play. >> as morgan says, when you have brainard and daley starting to

look at the other side of hiking, what do you think is the point? what metric needs to hit what level where you think a pivot will begin to be appropriate >> so, when we see the following happen, which is two things. one is that the inflation rate is substantially coming down that's actually very, very important. and also that the economy is weak right now we don't have either of those, so to talk about pivoting now i think is premature. i hope the fed doesn't cave in i recently wrote an op-ed in the financial times that pointed out that the volcker, who was a big hero, actually wimped out in 1980 and it created a huge problem where the fed -- where it actually raised rates and backed up -- did a pivot the pivots a mistake then the fed had to really bring out the baseball bat, 20% interest rates, and then the most severe recession in the

post-war period up to that time. the fed can't do that again. shouldn't do it again. and i think they hope they learned their lesson i think they have, but, you know, the fed's made mistakes in the past i hope they don't make it this time again >> are there that many parallels between that current period and that period of 40-plus years ago? >> yes, but not nearly as bad. it's like a mini parallels the fed actually -- the fed had lost a lot of credibility in the 1970s. the fed has lost some credibility through its mistakes i've been pointing out since april of last year on this station. and that left some loss of credibility, but nothing like we saw in the 1970s so, we're in a situation where the fed -- the parallels in terms of -- the ideas are very much there what's less clear -- what's less true is the magnitudes aren't as great.

the fed doesn't have to raise rates to 20% this time around to do its job i think it's going to have to go above 5%, and in fact, it can't stop doing that unless inflation has come down substantially. that was the mistake volcker made in 1980 where inflation expectations hadn't come down very much. the fed then blinked, wimped out and as a result, the fed had to get out a baseball bat and do a lot of damage to the economy that's not what the fed should pursue i think they have learned their lesson i think they're aware of what happened during the volcker period but, you know, you never know. central banks make mistakes. central banks sometimes cave in. i hope they don't do it in this situation. >> always great to get your insights thank you. >> my pleasure. >> focus on that 5% you just put out there, too meantime, getting breaking news gm quarterly sales crossing the tape let's get to phil lebeau >> carl, for the third quarter

general motor sales increased 24%. that's just a smidge under the edmunds estimate of an increase of 24.6% keep in mind, the third quarter of last year, they shut down production in malaysia because of covid-19. they had a bunch of issues there. this is what we're seeing with all of the automakers. sort of lumpy results here these are coming in a tad light of expectations. but two pieces of news one, because of strong demand for the chevy bolt ev they'll be increasing production from 44,000 this year up to 70,000 evs. and because of the strong order book for the sierra ev, the pickup truck coming in the next year or year and a half, they are going to be pulling forward body work that's going to be done at the plant, factory zero, where they'll build the sierra they want to get as much as possible things moving as they ramp up ev production. back to you. >> phil, proo esht that. a lot of headlines today. still to come, we'll talk about that defense deal between

viasat and l3harris. both stocks moving higher. check on the top gainers on the s&p as we're back above 3650 ah, these bills are crazy. she has no idea she's sitting on a goldmine. well she doesn't know that if she owns a life insurance policy of $100,000 or more she can sell all or part of it to coventry for cash. even a term policy. even a term policy? even a term policy! find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com.

if you have this... and you get this... you could end up with this... unexpected out-of-pocket costs. so if you're on medicare, or soon to be, consider this. an aarp medicare supplement insurance plan from unitedhealthcare. medicare alone doesn't pay for everything.

and what it doesn't pay for, like deductibles and copays, could add up to thousands of dollars. medicare supplement plans help by paying some of what medicare doesn't... and making your out-of-pocket costs a lot more predictable. call unitedhealthcare now and ask for your free decision guide. medicare supplement plans also let you see any doctor. any specialist. anywhere in the u.s. who accepts medicare patients. take charge of your health care today. consider adding this. call unitedhealthcare today about an aarp medicare supplement plan.

the dow is up 625 points to start the new week and the new month but it's not the only name that's in the green right now. viasat shares skyrocketing this morning, up 42.5%. the satellite company selling a military communications unit to defense contractor l3harris in a $2 billion deal, all cash. this is the link 16 tactical data links business, which is about one-third of viasat's government systems business. totals about $400 million in

annual revenues. it enables war fighters from military aircraft to operating bases to securely share voice and data communications. this acquisition adds to l3harris' existing joint command and control, which is an ambitious, multi, multibillion dollar effort by the defense department to connect all military operations and services to information and data can move more quickly across land, sea, air and space. this is an area l3harris has been investing in aggressively, competing in aggressively, has won some contracts here. this an acquisition geared towards more capabilities. analyst note, strongly aligns with the focus on isr, another acronym, intelligence surveillance and reconnaissance within u.s. defense budgets. an area of growth as well. this deal is expected to close in the first half of next year viasat shares are massively

higher l3harris is trading higher on this news as well. >> yeah, that's a significant move, significant premium. when it comes -- >> all in premarket. >> when it comes to consolidation, morgan, obviously there's been a great deal of it in defense, so it always raises the question, even for a relatively small deal like this, would there be any opposition, although many times these companies do get a sign of of some kind from the dod, don't they >> yeah, you tend to see that, since you're talking about their largest customer being the defense department to put this in perspective, unlike some of the massive mergers of equals, including between l3harris -- l3 and harris a number of years, this is very much a $2 billion, more of pure play acquisition by harris l3harris has been very vocal about becoming the sixth prime among the u.s. defense contractors. just to put that in perspective, $17.8 billion in revenue for 2021 for l3harris.

the next largest prime, the fifth smallest or fifth largest prime, general dynamics is $38.5 billion. lockheed martin is $67 billion, the largest. this is a company, i think, would argue that a deal like this enables it to become more competitive against those bigger players in this market in terms of viasat, it also speaks to another deal that merges with inharmarsat and thee been getting regulatory approval in uk as they can focus more on the commercial offerings. >> it's always good when the acquire stock also goes up, as is the case with l3harris. meantime, pretty good breadth, all sectors are green let's get a sector sort with frank holland. >> strong start to the fourth quarter right now. stocks are up mostly higher across the board today energy is the best performing sector to start out the month and q4 after a very rocky september. we're talking names like marathon oil, devon energy and

pioneer natural resources, among the leaders there. the move comes as oil jumps in reports that opec and its allies are considering output cuts of more than 1 million barrels per day. that would be the biggest move since the early days of the pandemic and could sendhigher. now i'll send it back downtown to you guys. frank, thanks very much. coming up on "tech check," a lot more on tesla and that delivery. this from q3, shares down 7% that's about a two and a half month low. throughout hispanic heritage month, we're celebrating our cnbc contributors. here's frank del rio >> i've been both very lucky and very blessed to be hispanic and i wear it proudly. being a cuban refugee in the 1960s and growing up in connecticut, one of the things my parents instilled in me at a young age was a standard of excellence whatever you do, be the best at

it work hard and great things will come and i could only give someone two pieces of advice, that would be it. reach for the stars. we can all get there >> announcer: realtime exchange sector sort is sponsored - to adapt in the changing world, you could hire a professor of theoretical mathematics. we all know this equation, right? 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. if you have this... and you get this... you could end up with this... unexpected out-of-pocket costs. so if you're on medicare, or soon to be, consider this. an aarp medicare supplement insurance plan from unitedhealthcare. medicare alone doesn't pay for everything. and what it doesn't pay for, like deductibles and copays, could add up to thousands of dollars. medicare supplement plans help by paying some of what medicare doesn't... and making your out-of-pocket costs a lot more predictable. call unitedhealthcare now and ask for your free decision guide. medicare supplement plans also let you see any doctor.

any specialist. anywhere in the u.s. who accepts medicare patients. take charge of your health care today. consider adding this. call unitedhealthcare today about an aarp medicare supplement plan. - oh, the stock market is doing that fun thing again. call unitedhealthcare today about an aarp medicare 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. the hiring process used to be the death of me. but with upwork... with upwork the hiring process is fast and flexible. behold... all that talent! ♪ this is how we work now ♪

welcome back to "squawk on the street." sh shipping rates dropping significantly. a u.s. based dry bulk shipping company. john, thanks for being on with us on a day where we've gotten a softer than expected number in the u.s., we've got the strength of the dollar weighing on many commodity prices the world over, and then of course concerns about economic growth and possible recession, what are you seeing in this market, and does it seem like it's indicating we could be moving towards a global recession? >> so what we've seen on the dry bulk side is actually a winding down of congestion, particularly

in china and the rest of the world as the covid restrictions that were put in place and weighed heavily on the industry in 2021 have eased so that we're seeing more of the easing of congestion and, you know, our business is very focused on china, and china is now coming to the end, we hope, of their on again, off again covid lockdowns, and so we're starting to see a recovery on the demand side, and we're actually starting to see port congestion wind back up again. >> just to put a sharp point on, that does that mean you are seeing positive signs in china when other companies like fedex come out and warn that they're seeing slowing growth and there's concerns about the real estate market, you're not as worried? >> no, not as worried. and the real estate market obviously has put a damper on iron ore imports if you look at steel production

in china, it hit a low, and now we're up to close to 90% what i would say is we're seeing green shoots in china. whether it was the global financial crisis in 2008 or the initial covid lockdowns in 2020, china is what they stimulated their economy and led the world out of the recession >> john, it's david. you seem to be somewhat positive on the idea that china will kind of open up for good. do you have visibility into that because it obviously has ramifications far beyond your business. >> yeah, i mean, look, what we're starting to see again are increased shipments of iron ore which i think is a pretty good leading indicator on their steel industry we're seeing that steel utilization up obviously, you know, just reading what everyone can read, you know, with macao opening up, i think that's an interesting data point in terms of these -- again, these on

again covid lockdowns in china hopefully coming to an end. >> i wonder if we can bring up the chart again, the baltic dry index. we've seen rates fall pretty dramatically in recent weeks, in recent months. is this a reversion to the mean, if you will? is this moving past the pandemic to a normal? and if so is it a new normal how do you see it with the rates? >> first of all, put it in perspective, we're talking about 17 to $20,000 a day rates versus our cash around $8,500 these are still very healthy rates. we use 2021 and most of this year we've paid off 60% of our death with those cash flows and we're able to put a very strong dividend policy in place you know, again, i look at what is coming or what we believe is coming into the fourth quarter, and then hopefully a recovery next year is going to be led by china. it is going to be led by the real estate and their

infrastructure spending. >> we can't have this conversation looking the word over and not talk about russia's war in ukraine and all of the sanctions that have been put in place there. how is that changing trade flows? >> yeah, that's a big one. we have seen large disruption in the gray markets as well as the coal markets so with very little grain shipments coming out of the black sea area, europe, and africa in particular are having to rely more on the u.s. and brazil, which are much longer trade routes we've seen the exact same thing in the coal markets where typically europe would be importing russian coal we all know that has come to an end. some of that coal is going to india, some of that coal is going to china, but europe is having to source from longer distances, again, from the u.s., south africa, australia, and even colombia. >> surging dollar, do you expect that to continue and i ask that knowing that this

has downward pressure on commodity prices. >> yeah, look, it does seem that it probably has a little more to go in terms of the strength. i don't consider myself an expert on the dollar, but we are seeing that and our entire business is done in dollars whether it's freight rate or commodity prices, but again, look at what's happening in china. we do think, at least for the drive up shipping industry and the chinese steel industry that it will continue to -- will continue to have a healthy market for the next couple of years at least. >> thanks for joining us some key insights there on arguably a leading indicator for the economy, david, especially given the fact we have seen some companies more industrial facing in recent weeks come out and shoot up warning signs or red flags, if you will, around some weakening activity on the industrial side globally. >> and particularly somewhat

positively on the idea of china's economy starting to ramp back up in terms of from a consumer demand perspective overall. coming back here to our markets, we are starting off this fourth quarter on a strong note, at least if you are long stocks of course as you can see right there with the nasdaq up 1.5%, but lagging the other two averages the s&p move at 2% that's going to do it for us here on "squawk on the street. "tech check" starts right now. >> good monday morning, i'm carl quintanilla with deirdre bosa and jon fortt. what will the upcoming earnings season signal about the state of the economy? we have a few companies warning about the consumer intel's mobile eye filing to go blik what that means for intel's turn around efforts and the ipo market at large. and then tesla falling despite record deliveries. very busy day and week, jon. >> yeah, it is we're going to start with the market