twitter, all the way back to where we started for elon musk he now says he intends to complete the deal he originally agreed to back in april. wednesday, october 5th, 2022 "squawk box" begins right now. ♪ good morning welcome to "squawk box" here on cnbc we're live from the nasdaq market site in times square. i'm becky quick along with joe kernen andrew is off today. watching out for equity future, look out things have gotten worse you can look now the dow futures are off by 300 points s&p 500 down by 36 nasdaq, 109. we're getting used to this vola volatility

this comes after storks surged yesterday. yesterday alone the dow was up by 825 points. almost 1500 dow points in two days. >> more than 750 and 825. >> 750. >> 750 and 825, wasn't it. >> i think you're right. anyway, the dow and the -- or the s&p and nasdaq were up each more than 3% yesterday bigger gains on a percentage point. that brings the gains for the week to more than 5.5% for each of the major indices of course, these before any of the declines this morning. we'll see what happen has. right now the dow is indicated off by about 300 points. if you're looking at treasury yields this morning that's the thing that was a little more well behaved this morning the ten-year is back to 3.7% the two-year is at 24.125% gold prices also sliding this

morning. if you take a look right now, you'll see that gold is down by about 15 bucks that's a decline of 0.9, $11$1,4 an ounce. and we're awaiting word from the opec meeting brian sullivan, we'll always have vienna. have we hung out here with the wives? we hung out there with the wives. did you go to that gothic beauty that everyone should visit >> you know i took a picture and sent it to you i call it the joe and co we and the wives had an amazing night. we're back in vienna joe, the fact that we are back in vienna as opposed to those virtual meetings is saying this could be a big deal from opec.

okay, so what are we expecting anywhere from 1 to 2 million barrels, and everybody we're talking to, delegates, a lot of leaks -- a very leaky opec is getting us to 2 million-per-barrel-per-day production cut that would be the biggest since the pandemic it would be an historic cut. saudi arabia plans deep cuts in defiance of the united states. saturday we're going to switch it from virtual to in-person we're expecting some deep cuts we're also expecting a potential extension of opec. it's called the declaration of cooperation. it sounds boring to viewers, but it's a deal that ties opec's nations to another you've got mexico and eight others as well 23 member states comprising just under half of all the global oil output announcing what could be another major ku

that seems odd, joe, because you're thinking why are we cutting oil output when you talk about new sanctions coming up from russia. you're talking about china potentially reopening. there hasn't been much growth in the u.s. oil i think that's kind of the point. opec is sending a message. if you remember last year there were many articles that said, is opec finished? saudi arabia and u.s. fighting is opec done i think this meeting is designed to show the world and the u.s. that with everything else going on, opec remains united. nothing confirmed. we could get a 2 million-barrel-per-day cut, joe, in an already tight market. >> it's strange and we have different narratives like everything, it's so political, brian we hear that we were the swing producer, and that's why opec had less power a couple of years ago and now we're not,other side

back to basically as much oil as we've ever produlsed in this country. what are the facts were we the swing producer and are we no longer the swing producer, brian? >> we are the swing producer the reality is if we get back to our 2019 highs, i we peaked out we're struggling to get back to where we were. you can blame it on lack of forfrac sand, either way remember the movie "cinderella man" about james j. braddock and no one took him seriously until they did i think the u.s. industry was kind of like that. opec was facilitiering a bit opec has brought the group back together, bringing russia back in the russia factor, joe, is fascinating.

you think about europe's energy crisis we've been talking about it for more than a year the austrians have seen their energy bills double or more in a year we sanctioned alexander novak, the prime minister of russia, the u.s. has he's expected to be here in person this is putin's basically number two who should be here in person, the highest ranking russian official to appear sense the u.n. it could be a very bizarre sort of geopolitical contradiction. >> yeah. >> but does this have to be unanimous? are there anybody -- any countries that are going to be u.s. allies and say not the time to be doing this in. >> it -- yes and yes, becky. it does have to be unanimous that's part of the problems. if you remember the last time we were here in person, mexico -- they're not an opec member but a member of opec plus collection,

they held it up because there was a sticking point it does have to be unanimous but there are reports that the uae and kuwait are seen in some ways as allies militarily, perhaps from a natural gas perspective as well. they're pushing back a bit but is that pushback going to be enough to either create tension in the group or change the outcome? nobody i've talked to really thinks so, becky, because ultimately the group wants to reassert its dominance that's whey they've dragged us here something's going to happen, we think, and oil's down a little bit, and we're up ten buck as barrel in the last week or so when we started talking about this >> whisper numbers that's amazing all right, brian "cinderella man" not that familiar with. i'm familiar with "cinderella boy," the assistant greens keep their won the masters a couple of years ago. >> or the hair band "cinderella"

from the '80s which becky probably rocked out to. >> yeah, probably. we'll check it out this morning. you know how people misuse 180 to 360 degrees -- >> this tactually is. >> exactly they've come 180 degrees >> a circle sl 360. >> all the way so he's back to buying it. >> in fact, that's what we're talking about. twitter shares closed higher by 22% yesterday after elon musk reversed course again and is once again proposing to buy twitter for $54.20 a share sources tell cnbc a deal could happen as soon as friday if you don't remember, we'll catch you up to speed really

quickly. twitter sued muffing over his a attempt to back out of a deal he agreed to in april that trial was scheduled for october 17th in delaware he was set to be deposed later this week. twitter was deposed. there have been embarrassing releases with his texts back and forth with former billionaires like larry ellison and some other people that were out there. and his lawyers were telling him this did not look like a case he was going to win at twitter, they're probably saying, show me the money, show me what's happening with this. but the deal could go through as quickly as this week, and, boy, this has been a drama and a saga. >> i want to see it. we're going to talk to gene munster who says twitter is somewhere between $20 a share and $120 a share like all stocks. >> look at the markets look at the indexes. where would you put the band at

the indexes? it's pretty wide. >> it's been damaged, but he saw something originally and now i think he's back to -- he e he's so mercurial. it's way too much money. i'm the richest guy in the world. what i'm going to do, it's going to double a couple of years. i'm going to buy this thing. my original intention was to make it a fair public forum, a fair town square instead of what it is now where if you even -- if your body language looks like you might be saying something the woke twitter droud kroud doe crowd doesn't like, so good. >> he's one of founders of paypal if you combine some sort of pay mechanism along with video along with social media aspect that

twitter already is, i think maybe that's what he's looking at again, you're talking about some pressure that's going to come on this stuff very quickly. did you see carl icahn he put $500 million into this, basically an arbitrage play. dan loeb they laid out all the investors saying we're going to arbitrage this because he's going to get forced to buy it those people are not going to necessarily stick around you could see some immediate pressure on the stock. >> it's not going away, and i'm really bullish on twitter's future unfortunately, but i don't know if they ever make any money. that's the thing but, i mean, it is sort of an essential -- out of all the social media -- i could do without face boochlk i don't care about other people's vacations. instagram, i don't know. this is use. this is utilitarian. we use it for -- >> use it as -- >> use i as news flow. i don't know how you monetize

it whether you ever can revenue growth went from 16% it's 1% now. so it hasn't -- >> look, it's gotten more battered over the course of the last many months he's been trying to get out of this deal so he's beaten up the property he's now going to take control of the big question wash the growth numbers have come to, now morgan stanley and others have to go out and sell these bonds, the debt, for what they have done for the secure station on some of these things. if you're talking ccc bonds, what does that mean? 15% on some of these things? >> i'm also filled with even care cassie for all the snowflakes out there that are like, elon musk, oh, no, i'm going to quit wrchlt are they going to go? then he wasn't going to come, then they were like, oh, good, he's not coming, we're all

happy, we can keep doing what we're doing. then he's back, oh, no, i have to go -- i am filled with shadden frade, even care cassie. have i said too much fewers right now down 278 points we're going to dig into this week's rally and today's pullback you know, it's too social. it's not good. >> no, it's not. >> elon musk is coming back and making this a fair town square. later -- >> it wasn't looking good before. >> trump's not coming back to twitter. maybe he will. former s.e.c. chair jay clayton is going to weigh in on ooe elon musk, 360 on buying twitter. we talk about micron it's building a big plant for chips out of clay. you're watching "squawk box" on

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talk to our switch squad at your local xfinity store today. welcome back, everybody. the futures are under pressure this is a little different picture than what we've seen in the last couple of months. you could say the market's in motion here. the s&p down by about 36 the nasdaq off by 104. overnight, hong kong's hang seng playing catch-up, gaining nearly 6% after it was closed the day before for a public holiday. our next guest says that this rally is not much difference than the summer rally because it's all sentiment driven and the air will be let out soon enough let's bring in greg branch, a cnbc contributor greg, you think this is a head fake at this point. >> i do. exactly as i said in july. actually based on the same

premises we continue to hear in recent days that the fed is likely going going to pivot this is a self-fulfilled prophesy to saying the fed has done too much to the fed has now to pivot we've reached inflation, which we have, but unless the levels of inflation are going to come meaningfully down, this is all sentiment driven as it was in july the only thing lacking is jerome powell tripg over his words. he's become much more careful in how he articulates it, and i thought they were very clear in their message not only out of the last poll but that we should expect another two to three rate hikes likely two this year, and that their ideal weight is 4.5% on fed funds, and we're not

there. >> add to that some pretty hawkish fed speakers yesterday the fed president in particular talk about how the people she's hearing from who are hurting are hurting because of inflation, and that's particularly at the moderate and lower end of the income spectrum. they're very focused on inflation. greg, one thing we got yesterday, though, the jolts number did show the job market may be showing some signs of potentially turning over you're still talking about job openings north of 10 million that's a big number, but the first time we've fallen below 11 million in a very long time. those are signs the job market could be turning if you see that, see unemployment rise, would that be enough for the fed to say, okay, this is another part of the mandate, we have to look at that, two, or don't count on it? >> no, i don't particularly think it is, in terms of the magnitude we're talking about. yes, it's below 11 million, but we still have in excess of 2 million or so of millions

seeking work as long as the excess exists, there's very little risk to the labor market they've already addressed this and they want to make it clear that they well understand that there's going to be some slowdown attraction. they well understand that unemployment's going to tick up from here. i think you need to see three things for the fed to start talking about a pivot. obviously our colleagues are all too happy to do it, again, sentiment driven for the fed to start talking about it or at least hinting at it, you need to see unemployment tick up 5% you need to see a meaningful contraction in the economy, obviously 1.6% in basis points i think you need to see something on the magnitude of 3% or more to test that and short of those two things or the third thing, short of inflation coming down 100 basis points or more, there's nothing here that is going to get them

and notice they're all on message now. they're all on message mary is saying the same thing as bullard's saying as powell is saying i think theylearned that back in july. >> greg, what would you tell people to do as investors? sell any bounce like this? >> i would be looking for this as an opportunity to lighten as we did back in july. you know, obviously where you need to have equity exposure there are safe havens. we have structural damage given the macro environmental where we have secular tail winds and have interelastic demand. energy is a great spot it's one of the few sectors where we saw estimates rise in this quarter as we noted, estimates came notably down, almost historically down in the quarter, but street strategy even though moderate prices have come in, energy still performed

and will likely have a supply shock in the report. >> what are you selling right now? >> everything else everything that does not exhibit intoe elastic deanimal, that does not exhibit a secular tailwind that we can point to. at the end of the day, multiples are still too high and we still have to have down provisions in the fourth quarter and in 2023 if at the end of the day, if you don't have security in the multiple, if you can't point to securities growth -- and i'm probably flat this year it's certainly not going to be high it will be low at best with the prices down are where we are, that will be the same for next year. unless you can identify that earnings growth, that secular tailwind, that interelastic demand, it's probably not worth owning here. >> greg branch greg, thank you. >> no problem.

he has made a point -- see, i don't know, you know i've stayed long with my debt and everything see, the 6% in the last few days, i'm still in he never said go ahead and buy jeremy siegel says people never buy. if greg's right, then you have another chance but we -- you know, jeremy siegel thinks they're cheap enough now and you're not -- if it gets too low, you don't buy coming up, a vote in europe's parliament makes it official apple is going to have to change its chargers in the eu details next it's like when we go to davos and the electricity is crappy. >> you need a different adapter adapter. >> they should change our stuff

over there because we're leaders. >> as we said yesterday, they've got nothing else to focus on >> as we go to break, here's your squawk planner. weekly mortgage apps at 7:00 a.m. eastern september adp employment at 8:15 spacex dragon set to go launch at noon. and raphael bostic is going to utter words toy.da stay tuned for that. 4:00 p.m we'll be right back. ♪♪ ♪♪ be ready for any market with a liquid etf.

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do you have those budget markups? thank you. mmhm. [bubbles] (desert wind blowing) sand. (engine revving) (cheering) we like sand, don't we? between the toes and such, and, in other places. (glass jar breaks) (shoes tapping on floor) expedia tracks the price of your flight, and lets you know when it's best to book. ♪♪ so you can go see all the sandiest sand. and never wonder if you booked at the right time. because, you did. ♪♪ the european parliament has made it official starting in the fall of 2024, apple will have to change the charger for its phones in the european union the vote confirmed an earlier

agreement among eu institutions that make the usb c connectors the standard across the 27-nation block. it also covers e readers and earbuds and laptops. i warned the proposal would hurt innovation and create a mountain of electronics waste ten years ago would you have figured we'd be reporting on something like this? i guess that's interesting as we move foofrmd it used to be, you know, the outlet on the walls that didn't work do you have that saved for when we go to davos >> i save it every year. i keep them all in one bundle. >> for the different hotels where we stay, they won't give you one because people steal. >> and if you stop in the uk either on the way over or back, i carry those with me too. >> why can't we get on the same

page with electricity? >> we can't get on the same page with anything. is it feet or meters >> that's right. >> is it 32 degrees celsius or is it zero -- i mean 32 degrees -- >> it's celsius, according to -- that's what one of the congresspeople were lecturing jamie dimon on and she called it celsius. >> when we come back, we're going to dig into elon musk's 360 on twitter and how he now plans to pay for the deal. a special report next. throughout spanish heritage month we're celebrating teammates and contributors here's kraft heinz north american president carlos abram ri rivera. >> we have very much a passion of people who care deeply and

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good morning welcome back to "squawk box. we're live from the nasdaq market site in times square. i'm becky quick along with joe kernen we've got you covered on three big stories today. first up, the markets after this week's big rally big rally, the dow more than 1500 points in just two segs this morning you are seeing some red arrows

we were down by 300 points before for the futures it's about 250 for the dow nasdaq off by about 85 the s&p done by about 28 again, this comes after two giant days for all three of these major averages, up by about 5.5% each jo second story this morning, opec meeting oil prices are up significantly over the last week or so wti is at $86.49 we're going to get a live report from helima croft in a few minutes. joe? >> elon musk is planning to buy twittering but how is he planning to pay? it was not going his way, was it >> yeah, no. you know, i've been following these numbers for a while it's

been clear all along, look, he has the wealth, but does he have the money to do this deal? look, he agreed to provide $33 billion in equity for this deal. the question is how he's going to pay for that and whether he has to sell more tesla stock to get there. this year he sold $15.5 billion of tesla stock first in april when he tweeted no further sales planned after today. an then again in august he's getting $7 billion in vc inve investments. he's got the $4 billion in twitter that he already owes, so that's a 4 billion dollar stake that probably counts as part of this assuming that's included, he has right now $27 billion of the 33 billion he needs so that's $6 billion short ubs says he may have to pay tacks on the august sale, and he may have $4 billion left over from last year's sales if both of that is the case and depending on how that twitter

stake is counted, ubs says he may need to raise $6 billion minimum, and if that is subject to taxes if he sells tesla stock, that means he would have to sell about $10 billion of tesla shares or about 40 million shares to pay that i suspect he's done selling after saying in april i'm done and then selling in august but it's still a little unclear where that extra $6 billion is going to come from, guys >> yeah. but we talked about that actually, robert it's like, i know i'm overpaying, but don't you think elon musk is bullish on elon musk he probably thinks i'm going to have twice as much in the future, i can buy this, it's kind of more than i wanted to pay, and it's a good idea because i'd like it to be an objective town hall forum and it's invaluable in that regard and now he has to. he's sort of come to grips with that and he's making the best of

it it's worth between 20 and 150 according to our next guesting robert, a share. >> yeah. look i'm sure he's bullish on elon musk. as becky mentioned earlier, you've got that $13 billion leverage loan facility, $3 billion of that is unsecured they're going to have to get at least 12% or 15% on that just to get investors to look at it. so that's going to be expensive. and those banks are committed. >> thank you, robert speaking of our next guest, a decision to revive the deal, gene munster, managing partner you said between $20 a share and 150. i said, like any tech stock, it's worth somewhere between 1 x and 7 x. >> that's one perspective. a second is a question that really begs the question of what is elon's motivation here or how

much time he's going to invest in twitter to me that is the core question, and that has an impact on what happens with tesla and his time at tesla but, joe, that 20 -- i was justing it to our current stock price. if you put that in market cap, call it 20 billion versus 100 billion. call it a $40 billion market cap today. it really comes down to his goal and the amount of time he's going to invest in that. his basic level, it really is difficult, impossible to predict what its value is because ultimately it comes down to that investment in time question. eve elon musk is subject to 24-hour days he's notorious for working 18-hour days he gets more done than, i think, anybody, but there is a limit. i think when you line up his passions, most importantly if you look at what tesla is doing, which you can think about

renewable energy, you can think about cutting the cost of transportation, reducing deaths on the road, the optimist robot in terms of solving labor problems, spacex, with space travel to maybe a different planet for humans to live on, these are the types of problems that elon ultimately wants to solve. i believe that those are where his biggest passions are and so when i play this forward, i put that 20 to 150 kind of range out there, but when i play it forward, i think it's less likely he invest a substantial amount of time in twitter. he has to put on a good face today. he clearly doesn't want this asset, and i don't think the fact that the pride piece plays into this because he's got so many toys with tesla and spacex, he doesn't need to be distracted with twitter. >> i don't know, gene. he -- maybe he doesn't want to delegate the engineering specs

on rocket takeoff and land on the same pad and he needses to be there for that. maybe to colonize mars he needs to intimately be involved. you don't think he can delegate someone to do what he wants to do with tesla? th is not anywhere close to nighing an autonomous taxi. >> tesla or twitter. >> twitter, i'm sorry. you can delegate this is not -- this is not rocket science i can actually use that term here this is not rocket science this is a social media website he can delegate, put people in charge to run it the way he wants it to be run he doesn't have to sit around thinking about twitter. >> i think a delegation is subject to the ltenets that are put into place and it's unclear who that would e i would agree if he's able to put an "a" group together, he

can do it. >> do an ad model or subscription mod. >> he's gotten to battle with this management team the employees there, there's going to be -- >> he doesn't have to battle with the management team. >> no, he doesn't, but he's got to find other people who can run it. >> if he can delegate to have people do -- >> jack dorsey was splitting his time with two company, square and twitter. >> he's sitting there thinking about engineering specs for spacex while he's looking -- >> while he's talking to jay leno. >> talking to jay leno so he's not your -- we'll see. twitter is pretty -- what i was saying, twitter's not going anywhere it's only getting bigger i don't know how you monetize it but i think it's here to stay. >> i think it's here to stay i would just -- when we -- let's play down the delegation road here, too, and his vision. there's, i guess, a

philosophical question about the future of twitter, this objective town hall. is that possible you know, is this going to be a platform that you get some weight on one side of the conversation and it kind of spills over that the other people just don't want to be a part of it it's never been done to that scale. >> where is it now >> it's kind of a mess. >> it's totally weighted to one side going to be easy you don't block everybody from one side on the content. >> perhaps -- i guess i -- second law of thermodynamics, if things are left without a force put on it, it goes to chaos. i think that there's a chance -- or i think -- >> the world is in chaos yeah, that's just a reflection of it. >> it becomes chaotic. >> all right, gene munster. >> thank you, joe. >> maybe you can run it.

>> you don't want me running that. >> why not >> i think it's just -- i think the concept of having a truly objective town square is a fantasy. >> all right maybe we'll make you an offer you can't refuse see you later. >> all right. >> either sign this contract -- remember that? when we come back, treasury secretary janet yellen shooting down a rumored departure from the white house. we've got the details on that next. and later, much more on today's opec plus meeting. we will talk to helima croft who is live in vienna. that's coming up in just a few minutes. >> and then former energy secrarriety ck perry will join us in the next hour. "squawk box" will be right back. ♪ ♪

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yellen throwing cold water that she's eyeing an exit from her position speaking during a panel event yelin told the crowd she plans to stay on as the head of the treasury department saying there was, in her words, no truth to a recent report by axios of her leaving the biden administration the report said the white house was quietly exploring her replacement, and it said the outcome of the midterm elections would determine whether she stays. >> that's a pretty flat out denial. market shares jumping overnight in asia. that comes after morgan stanley named the stock a big pick they're suggesting bargain hunting in quality stocks right now. it characterized tsmc as the enabler of future technology check that out that stock up by 3.75%. when we come back, we're

going to take you live to vienna that's where opec plus members are set to meet totalk about a massive production cut helima croft will join us next. by the way, a programming note i'm going to be hosting a cnbc special tonight at 6:00 p.m. eastern time "markets in motion." we're going to cover a wild week in trading and where bon adsnd things have been headed. that's coming up tonight at 6:00 p.m. eastern time. "squawk box" will be right back.

joining us now to talk about the opec plus gathering in vienna as the members weigh a historic output, joining us now is helima croft, a cnbc contributor. tell us a little bit about what is kind of riding on this meeting right now. >> i mean, there's an expectation that we're going to see a significant opec production cut this is will be the first cut

since 2021 oil prices went negative andthis is obviously something that the biden administration would be very concerned about. the question is, how large is the cut going to be. we're hearing numbers like 2 million barrels a day. who will make the cut. a number of countries are underperforming. the question is, are the questions that are the major producers going to do the bulk of the heavy lifting >> the big question in this is opec exists for a reason, to try and manipulate prices of oil, keep prices higher what do they think is a fair price at this point? we used to think 40 to $60 was okay or 60 to $70. if they're not happy at 87, what's their expectation of where oil prices should be >> opec producers say they're not targeting price. multiple reasons why a production cut is company, we had the saudi oil minister

express concern about what he believed was a disconnect between the financial and physical markets so is this a circuit break theory the saudis are throwing into the market saying you're more concerned about jay powell. we're going to show you that we are a regulate ner this market russia is a clear factor to watch. the russians have every incentive to want to push prices higher they have every incentive to scuttle the european union's union to push sanctions come december 5th >> and that's why this potential meeting is so much more important. this is not just about prices. thi this is not just about the market, it's about global stability from a security perspective. do they not understand that, or do they not care >> i mean, becky, this is far more than about oil. now, russia is at the end of the

opec plus table. there are no indications that russia will be vacantting that seat to have the russian prime minister in vienna at this mo moment, this is a geopolitical story and we're going to be watching very closely to what he says in this press conference today. >> we've heard the white house may have been making calls trying to get around is there any influence from them, or no? >> obviously, this is not something that the white house wants. they do not want an opec plus production cut president biden visited saudi arabia in july and so i think they were trying to potentially scale back the size of this cut. but, again, all indications are that we're hearing right now, this is going to be a multimillion barrel day cut. potentially 2 million barrels a day is going to be announced this afternoon. >> what will that mean for oil prices for the oil markets? >> i mean, becky, this is really

an interesting question. because you have a number of opec countries that have been underperforming. so the question is, is this going to be a paper cut or is this going to be a significant pullback in actual production. who does the production cuts matter in terms of what the market impact will be and even if we have a muted response today because there's already this expectation in production cut, fast-forward to december, that's when that european embargo takes effect the price cap policy is supposed to launch. we're setting up for a significant bounce come december even if we don't see it today, keep your eyes on year-end. >> even though we know that is probably going to happen too i'm trying to figure out how much has already been baked into the market >> becky, i would say that the european union sanctions are not fully baked into the market. i think there is still an expectation out there that

europe could not possibly go forward with embargoing two million barrels of russian oil on the provision of shipping and insurance purposes i think a lot of people in this market believe that eu will blink. so if europe goes forward with those sanctions, if there's a price gap, the barrels may move to asia. if it does not work and those sanctions are locked and loaded, then you are looking at a potential significant disruption of russian barrels, again, at this point, i do not think that market participants have fully priced in what could be coming with russia and the european sanctions come december. >> when do we see production in the u.s. spike significantly when is the price of oil high enough where u.s. producers say we have to drill more? >> we loosen capital discipline?

the u.s. is not the immediate response that is why calls are always made to countries like saudi arabia that is why we all continue to go to vienna at a moment's notice the countries that sit on spare capacity, the countries who can deploy their barrels immediately in the event of a crisis, they are the middle eastern producers, the opec producers. yes, more u.s. production comes in a higher price environment, but not to save europe come winter. >> thank you, we will be watching. >> thank you thank you very much. coming up, much more on the big stories of the morning the pullback in futures after two days of strong rallies the opec meeting in vienna and elon musk's round trip on the twitter deal we'll talk to jay clayton. "squawk box" will be right back. for your full financial picture. with the right balance of risk and reward.

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(vo) get the new iphone 14 pro on us. right now t-mobile is including apple business essentials so you can easily manage your team's devices. on the network with more 5g coverage. only from t-mobile for business. good morning after the s&p posted its pest two-day gain in roughly two years, investors taking a breather this morning. futures suggesting the two-day rally may be on pause. energy in focus. opec preparing for its first in-person meeting in two years, mulling dramatic output cuts rick perry will join us live twitter shares seurge

we're going to talk about elon's pivot with jay clayton the second hour of "squawk box" begins right now good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in time square i'm joe kernen along with becky quick. u.s. equity futures at this hour are giving back a couple hundred points out of the almost 1600 points that we gained in the last two sessions after we lost thousands of points over the last month and a half or so. probably, right? dow points not in s&p >> yes, because we were below 29,000 >> at this hour, the treasuries, take a look as we're hearing the "p" word a lot, and that's

pivot. don't worry. >> yes. >> relax 3.689 and 4.11 now on the two-year you know that sets us up for disappointment doesn't it, when we think we know the fed is feeling a certain way. >> feeling like they're going to pivot? >> feeling like they may be seeing the effect of some of the tightening they've done in the labor market and therefore they may be a little more dovish than we had thought. >> that's why i think the messaging you heard yesterday from mary daily matters. the focus is still inflation. >> it was transitory for a long time too words can do the work for them, and it has in a lot of different, you know, mortgage rates, housing sales all those things are -- >> interesting comments -- >> but this isn't helping. if we go back to 95 or whatever, if this happens, i honestly don't know what they finally

decide, whether it's a million barrels, not a half a million. brian raised the possibility of 2 million barrel cut bitcoin was still above 20,000 let's get to dom chu with a look at this morning's premarket movers. >> to your point here about what's happening with twitter, we're going to put some numbers to kind of where we stand on that twitter trade right now, now that elon musk has revived that deal to take it private at $54.20 it closed at just about $52. 54.20. you call it roughly 4% below, right now, a 4% discount to where that agreed-upon takeover price is t twitter shares at $51.78 off one quarter of 1%. that's after that 22% rise that

we saw in trading yesterday on the heels of the headlines coming out that the deal was going to go through. so we're watching twitter for sure i know you guys will be talking about that in the coming hours at least on this show here and then let's talk about some of the big moves that we've seen the s&p 500 and nasdaq we decided to take a look at -- this is a massive two-day rally. the best start to a fourth quarter since going back to 1938 so where are some of the big bounces that we've seen. we take a look at the s&p 500. we screened for just the ones who were mega caps a $100 billion in market cap or more and which ones have jumped 7% during the last two-day span. it turns out only 20 stocks fit the bill among them are big technology names, no surprise nvidia down 1% each of these is down anywhere from one quarter to 1% in the premarket trade. but each of these stocks is up

roughly 8% in two trading sessions some of the bigger names the three biggest bounces in the s&p 500 among mega cap names belong to energy conocophillips, chevron and exxon mobil. they're up or do fractionally. each of these stocks, conocophillips is up 13% in two days, chevron is up 2% and exxon mobil is up about 9% or so in there. it's interesting that technology, energy have been the places that have bounced the most they've been some of the deeper down trends that we've seen. if there's bargain-picking to be had, a lot of the action is right now in technology and oil. by the way, if you're curious what the other stocks are in that screen, just go to my twitter feed i posted a screenshot of all the

stocks amazon and domino -- >> oh, no, we can't bond -- what was she? do you remember domino in one of the -- i don't think we can really -- i sho-- i'm going to e twitter. i'm not going to allow that to go out over the airwaves because of what it implies. >> i thought this was a public square. >> you're right. that's chaos it's chaos you know what, i don't want to offend anyone, dom we'll keep this conversation nice and neat. thanks, domino. >> joining us right now to take a closer look at the markets this morning is cameron dawson i look at this and you think that this market rally has legs, at least in the short term you want to explain that and what -- and describe what short term is.

>> yeah, so we think we have to think of this market in two distinct time periods. the first one is the very short term which is really driven by positioning, by technicals being very oversold, whether we're looking at where we were versus a longer term trend, things like momentum showing signs on a short-term basis we were flushed by the time we got to friday. that supports some kind of bounce but then we think the medium term becomes really important and where investors need to be cautious which is we still have a prevailing down trend in this market and that down trend is driven by the trend in valuations being lower because of the tight fed, because of tight liquidity, as well as earnings moving lower because earning estimates remain far too high we see the short-term bounce because of those technicals which could get us to about that

3900 level that was important support and resistance all through the summer but then we have to start looking and thinking about where those medium-term headwinds are from earnings and valuation. >> cameron, i -- very interested in technicals especially recently with a lot of the volatility that we've seen but i can't help but think at this moment that there's basic one overwhelming thing that is driving everything one story. and that's the fed when the market participants think that the fed is going to be more hawkish, we watch huge extreme pressure both to bond prices and to stock prices when they're convince that had the fed is about to take a more dovish turn, that's when you see this huge run-up is there more than that right now? >> i think you're exactly right. and we've seen the perils of getting ahead of the fed all summer that summer rally coming out of

june was powered by this expectation that inflation has peaked and that the fed was going to shift into a more dovish tone and the shock came when jackson hole came about and the fed gave no inclination that they were going to pivot dovish and re-upped on their hawkishness. and so that's where the conflict comes which is that the fed is still saying they want to get rates into restricted territory, which means rates even higher than today, and they want to keep them there for an extended period of time the end result of that is real economic weakness, real pressure to earnings. we heard from fed president of new york williams a couple days ago saying that he would be comfortable seeing unemployment going from 3.7 to 4.5% that's not at all consistent then with an eps estimate for 2023 that 7% growth. so i think you're exactly right that if the fed continues or if the market countries to run

ahead of the fed and optimism of some kind of pivot, that's where the risk really is. >> yeah, i mean, i know the vix hasn't skyrocketed we're not talking about a 40 on the vix or anything. but the volatility, just the feeling that you don't know where things are headed one day to the next, you walk in and the futures will be down 300, up 300. you'll see bigger moves by the end of the session and same story on the downside. it feels like there's a crescendo to something, but i guess how do you play that out >> it's not just the volatility in the equity market bond market volatility has been even more pronounced but even when we look at the trend of yields, that's where we see that the trend is still very strong being upward. if you look at the ten-year, you could go as low as 3.2% in the ten-year and still be in an up trend. that's where we wouldn't want to read too much into the softening

of yields to think that everything has peaked and the fed is over. when we think about navigating these high-volatility markets, we think we have to be nimble, we have to be able to move quickly. we're likely to reduce risk into strength, meaning if we see a big rally that stares blankly in the face of the fed, we would use that as an opportunity to reduce risk. but on those -- >> the last two days count for that >> not -- >> would the last two days count for a big rally? >> not quite we think that that 3900 level is a really attractive level for less tax-sensitive investors to take a little bit of risk off the table. but then we have to think what we would do on the downside on down days if we undercut those result lows that we had and that's the discipline that when markets get very volatile, very

scared yo scared, you start seeing despair. start thinking about looking of the one, two years, plus, it's not calling the ultimate bear or low of this market it's to keep us disciplined so we don't get scared in the event that volatility really kicks up. >> cameron, thank you. when we come back, elon musk reviving his deal to buy twitter at the original price. former s.e.c. chair will join us to talk about this about-face. before we head to a break, let's get a check on the markets right now you see dow futures are down but they've shown some improvement. down by 240 points right now nasdaq futures off by 91 the s&p off by 30. "squawk box" will be right back. ♪♪ ♪♪

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it's back on elon musk reviving his deal to buy twitter at the original price. joining us now is jay clayton. the lead independent director at apollo and a cnbc contributor. looking at some of your comments, jay, it's good to live in a place where the rule of law means something, i think and you point out that it's a good couple of weeks for delaware and the court but maybe we can learn some broader things about what it means to be willing to enforce the rule of law because if you

don't, you really can't run a society that way and i think elon musk finally realized that he's going to have to own this thing and he's back to the original idea, i can do something with this, good for society. >> look, joe, i think you're exactly right. this is a good day, good week, actually, good several months for the delaware courts. people do their deals in delaware because there's certainty around the terms that they agree and it's not just the enforcement of the law, but it's the process here and i have great respect from what has gone on here and that setting the trial detail not too quickly, but certainly not too long, giving the parties an opportunity to test their legal theories if the reports are correct, those tests have proven that this deal should close and in setting that very good

process and in having that clear rule of law, it looks like we're going to have an outcome here without the need of a trial. and that's actually what you want most of the time when you have the rule of law the rule of law is clear, you don't have to go to court. the parties tested it here that the reports are correct. we're going to get to a conclusion here without the need for a trial. >> you know about debt financing too. you're at apollo now do you see any possible obstacles to a quick close on this deal? >> i think the parties are going through that now that's what we're hearing. the regulatory hurdles seemed to have all been cleared. it is a matter of just getting the financing lined up, finding a time frame and i'm sure that the folks on the twitter side are saying, look, you asked for a stay, you asked for us to delay going to trial and put -- let's get this done as quickly as possible. so my expectation is that's where the discussion is right now.

>> you think it would be good if elon musk sort of went forward and didn't look backward at, wow, i wish i hadn't done this, do you think he can get in the mind-set that i wanted this for some very good reasons at the outset and now i'm going to have it, so i'm going to make the best of this and -- i think he wants to make twitter something that we're using ten years from now and it really is a fair, open public forum or a town hall in that regard, it's very, very valuable and maybe it's not a money-making venture maybe it never was for him he'll make money in other ways, jay. >> look, i -- i don't know the man. but it sure seems like he's not a person who is going to look back once he's charged with operating this and making it a success. i don't think there's any doubt that people will want this to be a success. as you mentioned, there are lots of other people around this

asset who will want it to be a success. >> if called upon, would you serve? if you did -- elon musk say, i've seen that jay clayton on cnbc a lot, i want him, i'm going to pay him what would you -- what's your idea to make this -- to make twitter great again? >> you do not want me on tech strategy that's not going to help >> can it be monetized in an effective way? it's going to be a -- it's a household name we all use it. we use it as a news feed there are pluses and minuses to thetwittersphere whatever it is a lot of twits on twitter. can it be made to a valuable asset, a $44 million asset. >> take this advice as the value of your pay for it, but it is remarkable that people all across the business community

where we interact and the like get their breaking news via twitter. it is kind of a remarkable -- what i would say -- pivot in the way that we consume information. it astonishes me tweets seem to be the way that we get instant news. it's pretty remarkable. >> it is remarkable. and in that there's value. i just don't know if there's -- i don't know how you monetize that so that you can hit quarterly numbers. that's what -- you can't do brand recognition to make your quarter. >> well, look, i think there are things where subscriptions have -- again, we're getting into strategy here but i certainly pay for a lot of subscriptions that i use less than i look at what's coming up on twitter >> all right you need one of those programs that gets rid of all that stuff. i was going to -- oh, do you

have an instagram account, jay i would like to follow you and friend you if you do do you have one? >> no, i don't. >> facebook? >> no. >> see this is what i'm saying. you got a twitter account, right? this is the survivor of all this other just drivel that's everywhere. >> and i follow you on twitter, joe. >> oh, boy you do that scares me a little. am i on thin ice at times. i think so, maybe, right >> no, you're solidly in there >> i try to imagine anything i say being like in the "new york post" and that could always happen do you do that actually, i know you when you come on here, you're so measured and careful, that i probably don't want to follow you on twitter but it would be boring are you saying anything -- >> i'm one of those horrible people i just follow.

i don't tweet. >> you just follow you don't -- >> that's a wise ove. >> i see people saying stuff to you -- if you had thin skin, that -- that would be your full-time job responding to these crazies. >> your filter is very good. i see nothing objectionable is very good. >> it is you don't know what's really going on >> it's good filter. >> exactly exactly. >> i'm sure the thought bubble is different >> all right thanks, jay clayton. >> if only if only. >> i'm friending you if you have that instagram account that's one reason to maybe get on there i will friend you. >> i'll think about it >> i don't have one either i have fake ones i have a lot of fake accounts. in a related story, "the wall street journal" says that carl icahn amassed a twitter

stake of $250 million. he made the investment believing musk wouldn't go through with the trial he looked like to lose so this was an arbitrage play that played off well for him he's not the only big name investor who did this. you have de shaw group and dan lobe's third point placing bets on twitter shares and, again, smart play that paid off, at least we think we'll see when the deal closes when we come back, we're going to talk more about the oil market and what is likely to be an historic opec plus meeting. that group expected to dramatically slash production. the numbers are large, but the price of crude has run up significantly over the last week on some of this -- wti this morning is off by 46 cents to

$86.07 we got rick perry who will be joings us in a few minutes to talk about it. later, we'll talk the february with ken rogoff "squawk box" will be right back. >> announcer: time now for today's aflac trivia question. what year did starbucks introduce its pumpkin spice latte? the answer when cnbc's "squawk box" continues look at the size of that- gaaaaaaaaaaaap!!! is that a goat?! you talkin' about me? gaaaaaaaaaaaap!!! i think this goat is saying “gap.” must be talking about the expenses health insurance doesn't cover. so who's talking about the money aflac pays to help close that gap? gaaaaaaaaaaaap!!! aflac! aflac! gaaaaaaaaaaaap!!! it's about to go down, baby! aflac! aflac! stop that goat! get help with expenses health insurance doesn't cover at aflac.com ♪ ♪ wow, we're crunching tons of polygons here!

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>> announcer: now the answer to today's aflac trivia question. what year did starbucks introduce its pumpkin spice latte? the answer, 2003 still to come this morning, former energy secretary rick perry will join us to talk about the latest headlines out of today's opec plus meeting. plus, jeremy siegel on the market volatility and whether or not he thinks the fed will pivot. a programming note for you, i'll host a cnbc special tonight at 6:00 p.m. eastern time. "markets in motion." we're going to cover the wild week in trading. that's tonight at 6:00 p.m stay tuned, you're watching

"squawk box" and this is cnbc. >> announcer: this is cnbc program is sponsored by baird. visit bairddifference.com.

♪ welcome back to "squawk box. live from the nasdaq market site check out the futures this morning. 250 down giving back the -- part of that 1600 or so gain that the dow had on monday and tuesday out of nowhere after down 500, exactly, on friday. the nasdaq indicated down about 87 and the s&p down about 30. >> joining us right now to talk more about today's critical opec plus meeting and u.s. energy policy, we want to welcome rick perry. mr. secretary, this is an opec meeting that it's hard to remember one that is really on par with this. this isn't just about trying to set prices, trying to boost prices, manipulate prices. this is really something that comes down to geopolitical issues at this point with russia being front and center trying to make sure that it can continue to get money in to fund its war.

what's riding on this this time? what should we be watching >> yeah, to say we live in interesting times is a great understatement when you think about what's at stake here, whether it's the global economy, we get a massive hit, i don't think we'll have a massive hit, but the point is, curtailing that production, the potential to drive up inflation across the country you compound that with what's going on in eastern europe and ukraine. the potential for a real chaotic time is there. you know, and it goes back to -- again, i'm very critical of the current administration from the standpoint of their war on fo fossil fuels and the united states in particular we could be filling the gap, so to speak, with our ability to

produce. we were certainly independent of anyone a few years ago and we lost that potential because of the clear message that we're not going to build any more pipelines. we're going to make it difficult in the united states to produce whether it's offshore, whether it's our federal leases. so this meeting and -- and our lack of ability to influence it, i think that's one of the things that's not lost on me is that the saudis, in particular, don't have a particularly close relationship with the biden administration and so there's not that appearance of wanting to work with the united states that we had let's say four years ago. >> you know, you look at the saudis at this point, it's a new regime there as well new people who have come in. do we trust the saudis at this

point in terms of -- they're not going to be our partners with this administration, potentially with others too. and when they're in the position of choosing russia over us and making that very clear, what are the ramifications long term? >> well, long term i still have great hope that the saudis, the middle east at large, if you will, obviously, iran is not going to be our friend and they're not the friend of the saudis from the standpoint of the geopolitics that you mentioned earlier. i think long term the saudi government has historically been -- well, let me back it up for six years. over the years i was at the department of energy, we had a good working relationship with them i think that that can be retrieved. i certainly hope so. and i think it's important for us -- and i think it's important for the region when you think about the saudis, their intent

to work with israel for the last four years you have the russians who saw this opportunity to take advantage of the rift, if you will, between the united states and saudi and they're going to take advantage of it and i hope that there's some sensibilities that areput in place here as decisions are made on the production cut. i think a production cut is coming i think it's going to drive up oil prices to some degree. yet to see what that's going to be but it could potentially be a very chaotic time for world markets as we go forward. >> are you saying we shouldn't criticize mbs for any of the humanitarian rights issues i mean, that is part of the big

reason between the divide between the biden administration >> all of those criticisms have been laid out there. they're there. they're real they're appropriate. but the point is, life goes on here and the idea that the united states is not going to do business with saudi arabia because of that event, yes, we are. i mean, biden went there within the last 60 days, i believe. so this isn't an all or nothing game that we're playing. and, you know, we have regimes around the world that make some really poor decisions, offensive things, but we're still going to do business with them. >> china is another situation where the relationship has frayed and russia has sought to take advantage of that i mean, would you say the same

story when it comes to dealing with china >> well, obviously china has sent a clear message that they're not going to be a good partner for the united states and i don't want to cross any lines of classified information, but we know that the chinese and even multiple books written about their ability and their desire to steal property, i encourage people doing business with china to be careful. >> we're talking about geopolitical issues that have massive ramifications when you're talking about the one and two biggest economies in the world. >> i understand that but the point is, you need to be careful. we're going to do business with some folks who have some very

repressive personal -- and i'm not talking about personal i'm talking about inside of their countries -- activities that are going on. the uyghurs are a great example of what's going on in the chinese government we're still going to do business as best as i can tell. but we need to be careful. the idea that we, for instance, small, moderate reactors, we need to be looking in the united states for those places to invest for that technology, not in china i think that anyone who is looking to china to do that type of investment is making a big mistake from the standpoint of, number one, china is not our friend they have sent that message time after time and we need these types of technologies to deal with our

future energy needs. there's some great companies out there that are united states-based you think about new scale as a public company, you've got small company right here in texas that is a small moderate reactor. those make a lot of sense to me for us to be focusing inward, towards the united states and our innovation and, you know, i don't know what the future sf china is when you look at their workforce, when you look at their demographics, i don't think the future is all that great for china. so the idea that today they're this huge, massive, i guess, number two economy in the world, but what does it look like in ten years and you talked about the long game a little earlier, what does it look like in 20 years. i will suggest to you that their population restriction because of the one child policy, their

workforce is really going to be in a strain, if you will, and so, you know, is china really going to be a world power 10, 20 years from now i don't know the answer to that. but there's some signals that they have some big problems on the workforce side facing them in the future. so short term, you know, i just tell people, be careful if you're going to do business with china. be ready for your intellectual property to be stolen. they are philosophically, foundationally a very different people -- >> governor, we used to -- we used to lead the world here and we still do in hydrocarbon exploration and production it's hard right now because you're asking the major companies to commit capital in a very uncertain future, given the political backdrop and given the green lobbying and given the notion that we got to get off of

this quickly because of what they call the climate crisis now. i guess is the new preferred term but what would you -- if the republicans win in november or -- i don't know whether they take the house, the senate what kind of certainty could you give that industry that they -- the world has an appetite for fossil fuels because we use energy and we fly around and we have commerce and trucks are driving -- i mean, what would you tell them to make sure we have that five years from now? because the way it's going, you know, we can't just say, okay, we got to curtail all these things that we're used to because we don't have the energy what should we do? >> well, good point. i highly recommend everyone a book called "fossil future". it's one of the most timely books that's been written in some time and it talks about why

fossil fuels are so important to the world, not just the united states, but the world, particularly the developing part of the world if you believe in human flourishing, with i'm a big fan of, i think we ought to be working to make people's lives better and the way that you do that is with fossil fuels. and anyone who says that you can fill that void with wind, solar, and those are fine but they are part of an all-of-the-above strategy. you're going to have to have fossil fuels for a long time in the future the idea that you're saying, 2035, we're not going to have internal combustion engines in california, it's nonsensical it's not within the realm of possibility. it may make you the hip kid at the class party -- >> governor, if that's what people want in california, that's what they'll have if the markets -- if everybody

wants an ev, why do they need to ban -- if everybody wants that and that's where we're going to be, then you don't need to ban things you don't need to tell people things they can't have anyway, we got to run. you think that alabama covers this saturday? it's 24 points >> can we talk about just about anything other than -- going into alabama is always a handful. >> when they play ohio state, i will call in sick. if i was an offensive lineman, i would call in sick is there a way i don't have to show up in tuscaloosa? >> i heard that in 2012 and johnny football walked away from there. alabama came to texas a&m last year and went home with an "l. >> it could happen that's why they play the games, right? good luck.

>> don't count the aggies out. >> i'm saying there's a chance >> i don't know what to do would you give 24 -- alabama didn't cover last week, i don't think. or one of the weeks they didn't because they lost. governor, thanks you don't say break a leg in football >> on the stage. >> football is good luck. >> or go team. coming up, how much are you willing to pay a month for a car? how about $1,000 phil lebeau goes under the hood and tells us how that can be the few norm i would like to pay 1,000. the futures right now, as you can see. i'm giving up. i'm being pc "squawk box" will be right back. aren't we all just looking for the hottest stocks? (fisher investments) nope. we use diversified strategies to position our client's portfolios for their long-term goals.

(other money manager) but you still sell investments that generate high commissions for you, right? (fisher investments) no, we don't sell commission products. we're a fiduciary, obligated to act in our client's best interest. (other money manager) so when do you make more money, only when your clients make more money? (fisher investments) yep. we do better when our clients do better. at fisher investments, we're clearly different.

it may sound crazy, but it's becoming more common for dealers to sell new vehicles to a buyer and it's financing the purchase with an auto loan that includes an auto payment of more than $1,000 if not, sometimes you see 8900 when you sign the purchase

so it's one or the other a lot, lately things are more expensive. >> right it's a far different environment than when you bought your duster back in 1978, joe. the numbers that we're going to show you, some people will look at this and they will say, are you kidding me that's basically a house payment for a lot of people, maybe not today given the pricing on houses has moved up so much. take a look at this data which we received from edmunds we asked them to crunch the numbers. here's the average in the third quarter. financing a little over 41 grand. average rate just under 6% and the average, average new car monthly payment on a loan was $703 look what's happened in the last year and a half. the percentage of new vehicle buyers who are financing their auto loan with a payment of at least $1,000 a month, it's gone from 6% all the way up to 14% in

september. 14.3% to be exact. we wanted to find out what dealers think about all of this. we want to scott adams toyota. we talked with scott a number of times over the years he thinks this is crazy. that people have lost their minds in terms of some of the financing. some of the people he says they can afford it. other people want to roll it all in there here's scott's take on the consumer these days. >> what we've noticed, especially here in the last 45 days with the federal reserve raising rates that at least 50% of your customers are having payments over a thousand dollars a month. when you include sales tax and sometimes property tax, it's even more than that. so it's at least 50% of the cars that -- and trucks that we're selling because most of them are sold in advance. >> think about that. more than half of the vehicles he is selling right now, people are paying at least a thousand

dollars a month for their monthly payment when it comes to that auto loan showing you the major auto dealerships here, keep in mind that the rate of sales for new vehicles, 13.7 vehicles year to date likely going to come in under 14 million, guys. so we're still seeing a very constricted market mainly because of supply but remember this much, we generally speaking have retail sales of anywhere between 12 to 13 million vehicles. that's how many people are actually buying new vehicles in the u.s. about 80% of those are financed. you do the math. that means there's about 1.3 million people -- 1.3 million when you do the 14% paying 1,000 a month that's how many are doing that right now. think about that, guys >> amazing, phil we could talk about a lot of things they tell me we got to go. thanks, phil lebeau. >> you bet. >> it's planes, trains and

automobiles with this guy. when we come back, harvard economics professor on the fed, inflation and the state of the economy. "squawk box" will be right back.

joining us now to discuss the fed's next moves and impact on the markets, let's bring in harvard economics professior ken roghof i could talk to you five hours

and still not understand your thinking you think of chess moves, 20 moves ahead. i can think of like one move ahead. so for you to explain to our audience why you think the end of low interest rates is over, even if the fed does tame inflation, you still think that we've been in a2008. can you you explain it so people understand why it happened and why it might be over >> i'll try. so there are two reasons interest rates have been low one is that inflation has been low, but it is also that interest rates after 2008 came down much more than inflation. the real interest rates were very low and i would say, you know, unusually there were many economists said this is forever, we can run debts to the moon, real interest rates we pay are very low but actually if you look at historical time periods, there always is some movement back

so i think what that says, when the fed is done tightening, it has gotten inflation to where it wants, which will be a long time, i think interest rates will rest at a higher point than we're used to. they will be more above inflation. and so there is sort of that going on top of obviously the very high inflation. >> and you see that -- you can see that in inflation adjusted assets which are skewed in a very different level than they have been historically so you've got a reason to think that this will happen. and so many people havenecdotal this level feeding the beast for so long, it will be impossible to extricate ourselves and some is something you think is coming home to roost now? >> well, i don't know about impossible to extricate ourselves, but the days of just printing money and running deficits as a free lunch, i think what we saw in england is

already a warning shot over the bow on that, that it will become more difficult for policymakers over the next decade >> would you give recent fed regimes -- you're an economics professor, you give out fwradgrs would you give any of these recent regimes an achl"a," and i mean a real "a." >> well, you know, you can't i mean, obviously. i think the fed maybe gets beat up on a little bit more than it deserves because a lot of what it was doing was being cheered on by many, many economists who thought that inflation would just never come. i think the one really big mistake they made was when they changed their framework at the end of 2021 and said, you know, we're no longer going to look at unemployment being very low as something signaling inflation.

we're going to wait until we see inflation. and that was just a bad wrd. they idea they will have to walk that back >> and they also ignored a lot of asset inflation crazy stuff. spacs and nfts, meme stocks, they said no, we're still regular inflation is 1.8%, we want to get to 2%. dr tr and they ignored all the thi thing you talked about >> there was a debate and many people thought that the forces bringing down inflation adjusted interest rates and bringing down real interest rates were secular demographics, low productivity, inequality, there are like a thousand papers on this. i think that was way overblown if the real interest rates had stayed low, in other words the fed could afford to maintain 2% inflation at very low interest

rates, you could justify those asset prices but i've always been skeptical, i've always thought this would come to an end i don't know about a crashing end, but not a pleasant one. and i think we're starting it. >> you are not a market timer or even a stock market analyst, but what you're saying, i can't see how long term that would be positive for equity prices do you think that we'll continue to bewardedrewarded, are we in a period where maybe reversion to the mean >> well, there has been a lot of the reversion to the mean already. you are more up on exactly i think all the equity indices down 21% at one point, they have gone up a little bit but housing prices, bitcoin prices yeah, i think there is a long term adjustment. how brutal it will be depends a little bit on how fat the fed wants to get back to 2%

inflation. i actually think they shouldn't be zealots about it. i think that we're facing very unusual supply shocks and that they should get inflation down to like 3.5 or 4 and take tear time the way alan greenspan did. that is not what they are saying at the moment, but i bet they come around to that once recession really starts kicking in >> you are smart enough to get into harvard, i can see why. you probably deserven a an "a"a lot of things. in the age of participation awards, what is an "a" anyway? ken, thanks. >> thank you when we come back, the wharton school's jeremy siegle will give us his take on market volatility and what he sees the f fed doing next plus the latest adp data in about 20 minutes time. we have the futures ahead of hose numbers dow futures off by 256 obal invet opportunities requires

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stocks under pressure following a sharp two day rally. and a read on private sector jobs with the adp employment report due in just 15 minutes. plus opec+, thanks for that, ministers are meeting in vienna and sources say a significant oil output cut is on the table as the final hour of "squawk box" begins finally right now.

♪ good morning, welcome to "squawk box. we're live from the nasdaq market site in times square. i'm becky quick along with joe kernen andrew is off today. we've been watching the equity futures and we've been under pressure all morning long. of course this comes after two big days up for the markets. over the first two days of the week, all three of the major averages were up by 5% or greater. dow futures down now about 266 points s&p 500 futures off by 34, nasdaq down by about 100 the british pound is softening after a speech by prime minister liz truss earlier this morning it is still far off of its recent lows. you can see there what has been happening this morning it had been on a six day rally,

truss calling on her conservative party to back her tax cutting plans saying that they are coming, that it is something that you will see eventually of course the plans were responsible for a market rout and forced intervention of the bank of england. we'll continue to watch it this morning. also opec+ ministers are in vienna for a meeting set to begin this hour. oil prices ahead of that are flat, but they have run up pretty significantly over the last week. >> saw a big selloff in the market and then rebound the last couple of sessions since friday's close, dow, nasdaq and s&p are all up nearly 6% mike santoli is joining us from the nyse they warned us about sharp snapbacks in an ongoing bear market is that what this is >> it is unclear, a lot of folks trying to crunch the numbers to look at precedents for a two day ramp we've had like this, up

5.7% hasn't happened that often it gets you around the vicinity of some significant market lows from early 2020, late 2018 you go back to summer of 2015 as well on the other hand there, are a lot of back to back 2% to 3% gain days that you can look at that happened during 2008 that were within a bear market. so you kind of start the clock to say, okay, if pullbacks are modest, relative to the would d woul two day gains, that is encouraging. and you had sentiment similar to what we saw in june. you could also say we just got back to levels we were at a couple weeks ago, however, the s&p has kind of stayed in the vicinity of those june lows even as the dollar ramped higher and yields went higher and so i think seasonal factors start to get a little more friendly as well so that is why i think that you can say it has a shot to be a little more consequential, but

way too early to call it that. speaking of the dollar, moderation in the rampaging rally that was threatening brave parts of the market. we've seen a couple significant peaks. back in june when we did see the stock market bottom, you saw the rally moderate that is a pretty aggressive peak in the dollar index and clearly when we talk about the pound softening up today again so we have a bid in the dollar threatening the highs. job openings came down take a look at the employment services stocks. adp data and as well as the jobs number on friday and so this is the equal weighted s&p, outperforming by a lot. so employment services stocks are cooperating with the idea which the fed wants to see, which is a softening labor market so we look at that as a bellwether for the labor market. >> do you ever grapple with

sometimes fundamentals and technicals seem to be synchronized almost say-- we hae an excuse. it occurred at the same time suddenly that the fed might be not quite as hawkish as before because of data. do we just find a reason or did that cause the snapback, the idea that the fed could be a little more dovish >> i think it is a combination of, yes, you can always find a reason, you can always craft the story line based on what the market does. but the reason the market went to relatively extreme lows and you started to see a lot of stress building up in the capital markets is because of the fear that the fed was going to be perhaps poised to go too far and maybe cause some kind of a greater seizure in the market. so i think that the setup was such that we were very much geared for some kind of relief

and overall markets are suggesting -- look, just time is getting you to that place where the fed told you it is likely to be capping out on rates and you already have building in expectation of another rate hike in november. so i think it is logical for the markets to say we may be closer than we were this june even though the fed pivot was a story line in june as well doctor o >> other assets line up as well. the bond market. it all -- it fits into a very neat little package sometimes. sometimes you wonder why didn't we see this. thanks, hike we've been showing you the futures. dow futures off by 276, nasdaq down by 100, s&p by about 35 for more on this, we want to bring in jeremy siegel , professor emeritus at wharton school of business i know that you are of the opinion you can't time the bottom but stocks have come down

significantly. this might be a very good time to buy but i'd like to get you to taofe heard from professor rogoff. he is of the opinion that the low interest rates might be a thing of the past for matter what happens even if the fed is able to tame inflation, that we have seen times in the past where we see blips of lower interest rates but eventually they go away he thinks there is a reversion to the mean here and there areot means. >> and it is a very interesting interview and i know ken very well i agree and i disagree with a couple things he said. first of all, at the end he said to the fed don't get inflation down to 2% too fast. and i agree completely with that the fed as you know needs to go

cl slower i have to disagree with him on the interest rate. the actual decline this real interest rates really began right after 2000 and have been steady, not just 2007 financial crisis and it is due to slower real growth around the world, slower productivity growth, slower population growth. i mean, around the world all the things economists say lower real interest rates. also we have an older population that is more risk averse, goes more intobonds as you get older. that increases the demand for bonds. and bonds until this year have been one of the best short term hedges against the stock market that we have so that is another factor. and so i think that decline in real interest rates is really much more permanent than he suggests and i think real interest rates are going to on go back down

after the fed becomes less aggressive in its monetary policy stance. >> do you think the fed is going to be less aggressive in the near future? because that is certainly what the market seems to be indicating equities market at least the last couple of days. >> well, i agree with what mike santoli said i think the jolts data give the stock market a jolt and i hope it gives the fed a jolt to say, hey, you know, what things are slowing a lot faster than perhaps they thought possible. in today's "wall street journal," there was an article that said home builders are offering buyers, not final buyers, but bulk buyers, 20% discounts to take homes off their hands. they are not getting any traffic with the surge in mortgage rates and the softening in prices.

however, the personal consumption, the cpi, that won't record deflation in the housing index. we talked about those leags, tha is 1450my biggest worry they will look at the housing inflation, while on the ground there is no question housing is going down and that is a very important factor we just heard on your program half hour ago what is going on with car loans and what that mightdo to car selling all the signs are there for a slowdown the fed must recognize that and temper their hawkish stance. i think that is really why the market has rallied particularly first day of the quarter is often a rally especially if it has been sold down the week before so that was certainly monday tuesday i think the jolts data said that really the fed is

hopefully got to get it. now, will it show up in the friday data, that soon we'll have to wait and see on that >> i think what you just mentioned, that hope sentiment might be a part of it. if you listen to fed speakers, they are not sounding anymore dovish the san francisco fed said yesterday what she hears when she is talking to people, to businesses, the real pain she hears about is still inflation and so that seems to be the driving focus. chairman powellhasbeen very up front about how he is willing to bear hiregher unemployment leves to get inflation under control >> and honestly, becky, it disturbs me that everyone is on board with this same, you know, speaking points. on y out of the 18 fmoc members,

you'd think there would be more diversity of some saying hey, we have to go slower. there have been no dissents. this is one of the most tumultuous times and there is no dissents on what policy should be we need more diversity i've accused them of group think before that inflation was temporary back in 2021 and i think that their talking points are getting into the feeling that the only thing we have to do now is kill inflation no matter what the cost. it disturbs me there is not more dissenting voices at the fed that is what the fed was designed to build with the bank presidents and members we're not getting it >> if that is the case, if the fed is thinking kind of with one mind at this point and that mind is far more concerned about inflation than the unemployment

picture and signs of weakness in the economy, what does that mean for the markets? >> i think the market is worried about that and the reason market is going down. the market hopes that if we continue to get some softening data, just like it took a while for the fed to get it on inflation, which they should have gotten much, much earlier, it is a hope that they will get it on the other side and also by the way there are political pressures when things really soften and they will start getting phone calls, hey, guys, there is more than just inflation in your mandate. so that is really what has happened but really, again, you would hope 45 there would be more voices within the fed saying, you know, it is time to slow down and that really disappoints me in terms of looking at what has happened to the fed over the last two or three years. >> brprofessor, thank you do yor time and we do have the next big indicate of what is happening in

the jobs market coming up in about 20 seconds time. thanks a lot >> thank you down 250, we'll get the adp private payroll report, it is out momentarily. and let's remember where the futures were prior, down 244, almost 100 on the nasdaq private sector added 208,000 jobs in september. paid 45higher by 7.8% over the year medium sized businesses with the biggest begins sectors, biggest gains came from trade, transportation, utilities category information services and financial services saw the biggest job losses could be a little better

>> estimate was up 200 so just about in line. >> what do they say, close enough for government work much closer than most of government work. so not bad we'll see. coming up, elon musk may be buying twitter, but the real story could be his love for wechat, why the tesla ceo might be checking out chinese super s&ps, that is next but first, as we head to break, biggest pre-market winners and losers

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welcome back we've been talking about elon musk changing course all morning trying to go through with his original offer to buy twitter. a little angle here. and now the story of how chinese super apps may have played a part in the equation argen, we have not mentioned this yet, so looking forward to it >> we've been trying to figure out what elon musk are do with twitter if the deal closes and perhaps a tweet from the

billionaire himself may give us some clues he said the purchase of twitter will be an accelerant to creating x, the everything app and it reminded me of time in china and the super apps there, in particular wechat just for our viewers who aren't aware, it is a messaging app owned by tencent, and i can't stress enough how ubiquitous this is in the daily lives of chinese citizens you can do everything. messaging, payments, ordering food, ordering taxis, booking flights, gaming. no need to download all these disparate apps and elon musk has expressed admiration for wechat earlier this year in a town hall with twitter employees. he called it a great app and mentioned that there is not a wechat equivalent outside of china and buying twitter could

be a real opportunity to create an app that resembles wechat and in that same town hall hinted at potential features that couldbe in his version of twitter including payments, this is a key part of the wechat offering in china, one difference of course, wechat heavily censored in china. something unlikely to happen with elon musk's twitter but there are a number of challenges firstly, we haven't seen super apps like this take off in the u.s. or other western markets. the nature of the tech space is very different for example, jd.com in china is integrated with the wechat messaging app. it would be unlikely you would see something like an amazon integrated in twitter. so this is a big question mark as well. also regulatory concerns when you start talking about payments and financial services within these apps, that comes with a regulatory burden as well so a key part of this story. but clearly elon musk feeling some sort of inspiration here

from wechat and tencent hoping to replicate that of a billion users using twitter if this acquisition does close >> thank you i'm glad you said for viewers that might not know exactly what wechat is. but i was listening very closely. what i don't really get is why hasn't -- we could do that why haven't we someone could. so are there -- what are the cultural -- why doesn't it happen, why hasn't it happened in the west and it has been so widely adopted in china? s >> you have these giants, ten cent oig, alibaba, these are controlling a lot of the super apps so with tencent, not only does it control wechat, but it developed its own payment service, but also invested in other companies. so for example i mentioned jd.com, send large second large

ecommerce. and that integration was able to happen it also acquired and has stakes in many other companies that operate on its wechat platform so that is one of the reasons it is very different. whereas when you think about twitter and amazon and facebook and apple, they are all competing with each other, which makes it very difficult to create this kind of synergies between these different apps >> elon's earlier paypal and we also have more competitive laws in this country. >> would it work without censorship is that part of the -- i mean, do you need that -- they are much more comfortable with a lot of central government oversight. china obviously, the ccp pchlti there was no censorship, would it work? of course twitter has sec censorship >> it would certainly work of course when you look at the chinese internet landscape, it

is heavily censored from the central government there is also self censorship. of course a lot of users on the platform in u.s. market, in europe, we're not used to that level of censorship on these platforms. so i think that it would work. that is something that would be part of the appeal of any kind of elon musk platform. but as you mentioned, that competitive landscape is very different in our markets compared to china which may be quite a large barrier to creating some sort of wechat-like service in the u.s. or elsewhere >> argen, thanks for bringing us that story learn something every day. thank you. coming up, billionaire investor bob johnson with a plan to help the underserved and undersaved plan for retirement first though as we head to a break, let's look at the faang stocks this morning. still calling them that even though there is no more "f." meta platform still downsimila

to other platforms stay tuned you are watching "squawk box."

coming up at the bottom of the hour, breaking economic news trade data is just minutes away. trade data is just minutes away. and then billion thaire nurse mari investor bob johnson will be joining us demands a lotion this pure. gold bond pure moisture lotion 24-hour hydration no parabens, dyes, or fragrances gold bond champion your skin

just a few seconds up a fron update on the trade deficit. futures have been pretty steadily down by about 2350, s& by 37. futures didn't budge much after the adp report that showed 208,000. and let's get to mike santelli >> the august trade bounce expected to be around minus 67 billion. spot on. minus 67.4 billion to be precise. and that is the lowest level going back -- i was going to say october of last year yes, 67.2 was october of last year so just barely we are at the lowest level since then. prior to that, you'd have to go back to may when we were at 66.6

billion. and this is actually a much more important number lately than it has been because as these numbers come down and the deficits get smaller, it does give us a way to view global trade. we know that the imf has been very nervous about the slowing in the global economy. we know that our central bank in particular has often said that it is not going to be affected by domestic or global recession. but is that actually going to be the case, many people disagree and think that the fed of course will respond because global slowing will bring down many of the pricing pressures the fed is nervous about. wealso see the dollar index with a jump today and we see red in the equities for the first time this quarter basically. and i think that you need to pay very close attention if you want to be one of those simple traders, if the dollar index is down, most likely stocks will be up and that dollar has become a go-to when things get a bit nervous globally joe and becky, back to you

>> rick, thank you we'll talk later, rick we have a big guest here according to our next guest, and this is a long time thing that we've talked about many times, approximately $93 billion in savings leaves the u.s. retirement system annually because americans cash out prematurely. today retirement clearing houses collaborating with fidelity, vanguard and alight to create a workplace called portability services network and it is intended to help those underserved and undersaved and joining us now with more is b.e.t. founder bob job son, also founder and chairman of the rlj companies and chairman of retirement clearing house. progress being made, bob we've wanted to do this. explain why it would be so important, help so much to get people more ready for

retirement >> joe, good to be here with you and becky. i think that many times i've come on "squawk box," i've talked about closing the wealth gap between black and white american households. and one of the big causes of the wealth gap is no savings or lack of savings or investment and 401(k) is savings and investment that is done through your workplace the problem is, which we focused on with the record keepers like fidelity and vanguard, african-americans tend to cash out at about 63%, much higher than white americans and others. and i'm talking about people with 5,000 or less in 401 kflt acc accounts you take it out, you 2340e9 drill. penalty, taxes and most importantly loss of compounding savings and investment

so what we did, along with the record keepers, and this is phenomenal, where the large record keepers say, bob, how do we take your intellectual property that was created at rch to create a system that allows for the free flow of data between people when they go from job "a" to job "b" and that is what the record keepers are expert at doing, tracking that information. we're expert at creating a central hub that allows that record, that 401(k) account, to stay in the system >> so basically a lot of this is just accidents because it is too difficult to keep up with some of the stuff >> the problem of cashout is, in some instances people need money, but they mistakenly think if i get the money now, i'll be better off when saving is obviously a better option if they can but the technology is simply saying we'll make it easy for you to make the right decision so when you change your job, your 401(k) account follows you.

it stays in the system if this program works the way we and the record keepers have created it, we're operating this, and this is the most important point, we're operating this like utility. lowest cost, maximum benefit to the participants who seek to keep their 401(k) account in the system so black americans over a generation would put about $619 billion into retirement savings for themselves and their families if this program becomes nationwide, which we expect it to do. started off now with alight, fidelity and vanguard, we have about 40% of the workforce in terms of 401(k) asset management that is a critical part. scale becomes the most important part as we go forward. ie more savings, more closing the wealth gap, more opportunity

for black americans to have a retirement outcome that are in their best interests >> i remember talking before the pandemic about this with you you're getting closer and closer to where this -- i mean, this is something near and dear. >> i've been at this along with my ceo spencer williams, head of rca, for almost 12 years through three administrations. started with obama, trump, and now. finally we've been able to -- and the record keepers believe in this. this is as much mission as it is anything and that is why we wait at this utility level cost very efficient in terms of costs and most importantly very inexpensive for those people who want to keep their 401(k) in the system and therefore improve their retirement savings >> sounds like good progress being made at this point

can i ask you, because you've been in so many different businesses, how business is right now? is the economy slowing, has the fed already done its job where are we >> if i look at the businesses that we're invested in or have ownership of, the automobile dealership has been a phenomenal success contrary to what you would think with inflation, although that will change to some extent as the interest rates keep going up. but during the time when there were no cars on the lot, new cars, because of the computer chips and other things, supply chain, we sold a ton of used cars at very attractive deals the hotel business that we're in, that is coming back as leisure travel expands because people got cooped up during covid and the pandemic they are getting back out and going back out and traveling and the same thing with small

group travel, businesses, you know, foundations and organizations are coming back and having conventions at the hotel. so that part of the business is beginning to show signs of the s everybody knows is the fed raising rates, inflation creeping up. and on the flip side of raising rates is the potential for higher unemployment. because you got to have a tradeoff someplace >> but inflation is something that is particularly problematic for the groups of people that you are trying to help, for people who are at the lower rungs of the income scale. >> that's right. for minorities, black americans used to be a saying black americans are the last hired and first fired. and so when companies see earnings going down, when they see costs going up, they have

got to in some ways delever at the employment situation and the end result is where does -- to me, if you were asked head of the fed, what is the tradeoff i mean, how much do you want to tame inflation at the cost of unemployment is it 3 or 4.5 >> higher than 4.5 >> yeah, higher than 4.5, it really hits black americans hard all the more reason why we should -- they should focus on savings and investment and that is why the 401(k) program, portability services network, to me it is right on time for this kind of economic condition we're facing >> really a bad choice, isn't it >> unemployment or higher inflation that eats your wages and a youyour earning power what do you think is the bigger problem? the concern is that the fed continues to raise too quickly, but what do you think just from everything you've seen

>> i think that the concern is if you looked back, you got to point to what caused it. and it is government spending. you can't escape that. and the fed arguably doesn't have any control over government spending if they tell people that we think inflation is transitory, you tell that to a politician, that is like saying you got fuel running, keep doing what you are doing. and that is the worst part of it and thousand winow with electio up, nobody wants to say anything about they will do anything to curb spending. if you look at the student loan program -- >> you are not in favor of that? >> i'm not a big proponent of government engagement in socioeconomic problems that could be better solved by business >> and when they do try to solve it, they blow all the money and people they are trying to help have inflation and then they

cause a recession. >> accountability very seldom exist in the world of government spending and nobody is keeping track of where all the money went for the covid pandemic, you know i don't know how much we lost, but i'll bet you somebody put pen to pencil and we did -- >> like half a trillion dollars. >> had to be at least that if you could find. maybe another half trillion i'm never find so that is a problem so when you go back to becky's question, what is the better tradeoff if i'm looking at someone who is concerned about closing the wealth gap, i'm looking for someone who has savings in retirement for minorities and low wage workers, women they cash out higher too, then i got to say that the government has to step in and put a brake on wasteful spending. and the fed, you know, they got two-man dates. one is unemployment and the

other is inflation but somehow they have got to be a little bit more aggressive as an independent agency and speak with a louder voice. i think people who serve at the fed, they tend to sort of try to serve two masters. and it is really difficult to do when elected officials look at spending as their mandate. >> great to have you this studio you know what i'd like to talk -- come back. we'll talk about this again, update us on what is soary and d ary near and dear. and then we have to solve the other problems you have a private secretor approach that we don't always hear >> i'm a strong believer in business solutions to economic problems >> and so provide capital and do it >> and to me the idea of saying i can help put $619 billion back

in the pockets of african-americans, to me that is -- i love people in entertaining and effort, but nothing more important than this effort >> and with that, thank you. coming up, the elon musk biographer walter isaacson about what may have changed the tesla ceo's mind about buying twitter. ayuned

now back to the top corporate story, elon musk saying he will buy twitter after all, this just a few week before he was scheduled to go to trial with the company in a bid to get out of his original deal joining us with a look at what may have changed musk's mind is walter isaacson who is professor at tulane university

and cnbc contributor walter, the knee jerk reaction is he did it because he didn't want to get deposed friday and his lawyers told him that he would very likely lose in court. is that what changed his mind? >> i would think the second is more important he has very smart lawyers. i'm sure they told him what the chances were not that you would definitely lose, but i think that elon musk is somebody who does the numbers and the risk analysis very well. and there was probably 80%, 90% chance that he would lose in delaware court so why go through that there is part of him that really knows how to make twitter into an amazing product, so he gets up every morning and thinks about how great it would be to have so it wasn't worth going through the court fight apparently >> what does he do next? with twitter >> i think in the future what he would love to do with twitter is what he started to do many years

ago when he was very young in the 1990s when he created x.com and he said that this morning in his tweet and he's been talking about it x.com was a payment system it evolved into what is now paypal his friend and enemy peter teal eased him out of being the ceo of paypal. but musk's vision of paypal was a little bit like wechat, which is a social network on which you do all of your payments and which people create content, in which it serves as your real financial system you don't have to write checks or anything else and so i think that he could creates a he certainly knows how to do a social network out of twitter that compensates content, in other words whether a newspaper, whatever, you don't have all the pay walls and subscriptions, people who come to you through twitter pay you a small amount likewise if you are a content

creator like on tiktok or youtube, you get a little bit of payments for that. and i think that he has got a really great vision for what twitter can be >> is he the one who executes that vision, does he find other people do it for him genius as he is, there are limited numbers of hours in the day and he has a lot of other big projects that he cares about, everything from spacex to tesla and beyond >> yeah, i think that is the billion dollar question. which is he is not perfect at delegating and letting other people run things hands off. he is always the chief engineer and the chief product officer. so, yes, there will be people who will manage the business he has incredibly good people both at spacex or at tesla these are people who can help him run the business, but he is

every day at meetings about product at spacex, boring company, tneuro link and tesla i don't know how he will add more hours in the day because i know he won't take a hands off approach >> so what is the least favorite of all his projects? which one has to watch out >> you know, he's got as you know many children and he loves them all and he doesn't sort of pick and choose. i think that there are times when he focuses serially on different things there was a time when i was with him last year where he was absolutely obsessed by so lo roof climbed up late at night ripping off tiles and putting on solar roofs. and he is now focusing on other things so i expect he will go back focusing on solar roofs.

so he is able to do multiple tasks in a given day and this will just be another one, but i think that that is something that he thinks about, which is, you know, how much will this take my behind off the mission say of getting to mars >> to mars it's amazing, this guy is -- yeah if you did da vinci, you should definitely do elon musk, because they're cut from the same cloth. >> that's what leonardo da vinci told me, yeah. >> well, you know, you got to channel that i think that might be possible at some point. time goes both ways, walter, supposedly >> exactly so said einstein >> yeah. another guy that, you know -- when you have talked about twitter with elon, why did he want it, and it wasn't about money. it was about -- does he want to do it for all of us?

is that it he wants to make it something that's just better for all of us >> i think it was rather impulsive. he had a lot of money from having cashed in options that he had to cash in at the end of last year, and he said, what product is a product that i use all the time that i would love to be invested in? i don't think he started this process by saying, i want to own twitter and change it. he started by investing in it at the beginning of this year he started saying, okay, it's something i like for a short while, decided he would take a board seat, and then he decided if he really was going to do it, he needed to be all in i think he had, at first, a vision of, let's open the aperture to more free speech i don't think he had thought that through quite as much as some of the other things, but he felt that it was being too narrowly focused, kicking people off for saying things. now, i think he's more focused on the algorithm that, you know, will allow people free speech

but avoid algorithms that cause misinformation and hatred to spread that's really the insidious force behind some of the social media. and then of course, as we said on this show, he saw it as a way to do what they're doing in china and other places, which is have social media that has content and payment systems, and as andrew pointed out in his indispensable dealbook letter this morning, he's also got to figure out how to hold the financing together >> that's the next big question. what happens with the financing? how do we see that play out? because you're probably talking at least 13 to 15% for the $3 billion that hasn't been funded yet >> yeah, right we have about $12 billion in funding committed. and andrew's dealbook newsletter talks about morgan stanley, ben

horowitz, larry ellison who put in a billion dollars without being too deep in doing due diligence on it. nobody seems to have done too much due diligence here. and commitments were made at much lower interest rates, so if you keep the deal intact and don't change it at all, then the commitment of the lenders is at interest rates that are far lower than they are now. so, i think there will be some people uncomfortable about all of that, but i'm not a legal expert to know whether a potential lender that is committed to financing such a person could or would want to get out of such a deal >> so, the banks are going to figure it out one way or the other. >> yeah. i mean, i think, he will excite people by his vision of what twitter can be, and if that happens, it will all go ahead smoothly he'll have to work it out with twitter, how the handoff is. you don't want a messy handoff here you don't want people messing up

twitter when it's being handed off so there's things still to negotiate. >> walter, thank you we'll see you again soon >> thank you, becky. >> when we come back, stephanie joins us with a look at the trading day ahead. and then tonight, don't miss a cnbc special, "markets in motion." it's live at 6:00 p.m. eastern time i'll be there. make sure you are too. ♪ ♪ ♪ ♪ ♪ ♪ introducing ihg one rewards. seventeen hotel brands. six thousand global destinations. one loyalty program that lets you guest how you guest.

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welcome back to "squawk box. did you enjoy monday and tuesday more than last week, stephanie or it's just -- we're not really enjoying any of this because we don't know what's yet to come? >> well, not enjoying it that much, so good morning, it's good to see you, joe. i think we're in this trading range. we're going to stay volatile i think the reason we had the rally was because we were very oversold we had the worst september since 2002 you guys know that we also had people starting to think about the fed pivot again. this is what happened in june, sparking that rally. and this was post-the uk pivoting both on fiscal and military policy, and also australia raising rates but at a lesser rate than expected.

but i also think the inflation number in the ism manufacturing report was very encouraging on the price component. the lowest since june of 2020. so, inflation in that series has come down quite a bit, so people looked at all these things and said, fed pivot. the problem is, the fed is telling you they're not going to pivot, number one, unless they break something, and number two, the numbers that they look at that are still way too high. so they look at the core pce, the most important inflation metric they look the a, and it's at 4.9%. wages and salaries up year over year rents remain high. the last couple days, we've seen commodity prices also stabilize, so i don't think they're going to pivot, and i worry that all of these rate increases and the speed at which they've increased the rates are really -- we're not going to know about it and how impacts the economy for another six months or so we've seen it in housing, but in other things, it will show up down the road and so that's why

i think it's going to be a volatile situation and probably a recession in 2023. markets reflecting a lot of bad news, so i am looking for opportunity. >> it could happen quickly the stubborn parts that are still holding up, that could happen quickly, and do you think what the fed's done already could have already -- could have prevented or presented issues now without any further increase as some kind of break something or things slow down too quickly, labor market erodes too quickly with what they've done so far? i mean, they've already -- >> yeah, no, i mean, housing worries me a little bit. and we'll hear from the banks next friday about mortgages, housing delinquencies, nonformed loans, that kind of thing, but you mentioned jobs they are still -- i know the jobs number came down. i know a lot of people were talking about that yesterday but you're still just shy of 11 million job openings out there, so i think that component is the

thing that we are looking for to really change, and i don't know if it can change that quickly. housing can turn really big-time, and we've seen it. but not so much on jobs, and certainly not so much on wages, right? and rents. rents follow home prices home prices are still up >> thank you, stephanie link we got to run. see becky tonight at 6:00. >> see you tonight see you tomorrow morning right now, it's time for "squawk on the street. ♪ good wednesday morning, welcome to "squawk on the street," i'm carl quintanilla with morgan brennan, mike santoli. jim and david have the morning off. here comes the giveback after the best two-day s&p rally in more than two years. adp with a slight beat road map begins with the best two days for stocks since april 2020 but futures do point to a pullback at the open plus a vienna cut. opec plus expected to announce deep supply