cut. a report says a new white house plan could lead to renewed drilling in venezuela. and elon musk's deposition postponed as his team works with twitter to address sticking points and moving forward with the acquisition. it is thursday, october 6th. "squawk box" begins right now. >> good morning. welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm rebecca quick along with joe kernen and andrew ross sorkin. let's look at the u.s. equities at this hour you will see red 190. as we learned yesterday, where you sit during the session may

not be where things end. a big swing for stocks yesterday. dow down 430 points at the session low. it rebounded to close lower by 42 points. the s&p and nasdaq also closed lower. again, they made up ground they made up .20%. for the week, however, the indexes up by 5% on pace for the best week since june 24th. this after significant losses. treasury yields this morning 10-year treasury is yielding drum roll please 3.67%. 2-year treasury is above at 4.146%. news out from ibm. ahead of the president biden visit to the facility. it will invest $20 million in the next ten years to boost innovation for semiconductors. that move coming days after

micron announced a chip factory center in new york i think ibm is winning that competition. >> huge dollars coming into new york some of the politicians here have been working on that. >> a big deal for the tax base of new york. we talk about who is staying and who is going. new overnight. shell saying the third quarter profit pressured by sharp drop in refining margins. the company warning the refining margins in the third quarter dropped to $15 a barrel. it said the drop in the margins have a negative impact between $1 billion and $1.4 billion. sticking with energy new concerns about prices in america after opec decided to cut production now reports say the u.s. is looking to ease sanctions on venezuela to allow chevron to

resume pumping there brian sullivan is joining us from vienna. brian. >> reporter: joe, thank you very much a flurry of headlines. let's blat thsts through. opec cuts per day. we are actually cutting 900,000 physical barrels per day they are not directly tied, but the spr is 900,000 barrels per day. if you look at the papers and cnbc.com and dan yergin saying this is a blow to the white house. the wall street journal saying snubs biden. you see the financial times with opec plus aligning with russia this is polit sicizedpoliticize.

i sat down with the saudi oil minister abdulaziz bin salman. they said they would not talk about politics they view the building behind me as switzerland and they are neutral. he did not blame the federal reserve for the cuts, but he kind of did. listen >> of course, any central banker would like the best of two worlds attending to inflation and continued growth with this severity that you see, you run the risk of growth what you see is coming and we show it in the trajectory. we show it in the things we presented that growth is coming down and there is a potential with more aggressive rate hikes

that this growth will come lower. >> reporter: so full interview on the web site. joe, wall street journal last night saying the u.s. easing sanctions on venezuela and in part chevron will keep drilling and producing oil in venezuela i was in touch with chevron last night. it was 2:00 a.m. here. 5:00 p.m. or whatever there. they would not confirm the entire story to me, but i got the sense, i'm not confirming it, but it was direct ionally corrected. chevron did not deny joe, that is an easing of sanctions in venezuela to buy more and produce more oil there to import to the united states maybe trading opec and russian oil for venezuelan oil

either way, brent crude to $95 at christmas a lot of headlines >> opec plus is russia and allies it is not making it political to say this is something that russia wants and will help finance the war if prices stay high that is -- he just wants to pretend that is not part of the equation you don't have to actually have a political hinge to call what is happening inreality and the are friends. you have russians here and president biden that went over and asked. we know who the saudis sided with it is staggering it hurts if we -- i wouldn't say we have a friendship with saudi arabia it certainly hurts the relationship this is what the journal went on

to say the biden white house tried every gimmick to lower gas prices, except the one that matters. call off the regulatory campaign against the american oil and gas production the administration won't do it because biden is too afraid that the climate left would abandon him. ban fossil fuels that is short sighted. there has to be a bridge, brian, or we will see bad things happening in the world >> reporter: yeah, by the way, the uk this morning, national grid warning they may run out of heat and power this winter headlines in the uk right now that there may not be enough heat and power in the winter from covering energy for as long as i have, both parties, anybody needs to do a better job of explaining to the american people you can hate hydro carbons and fossil fuels

you can love solar and wind. you can power electricity with a windmill that can power an electric car i get that you can't use wind power to make plastics the uses of the hydro carbon are different. we have this idea. kill oil and go to wind and solar. that is fine for cars. you still have to make the solar panel for the wind turbine and plastic. it all requires natural gas. there is an electric car, by the way, hi! >> brian, california's grid. if it was 3% ev, that would overload the grid in california right now. wind and solar are not ready to power the grid for electric cars yet. >> reporter: you have to build the grid first that's right a princeton university study said if you don't build the grid the death of the manchin

permitting bill was a big win against fossil fuels no, it wasn't. it will kill the mountain valley pipeline, probably, but speed up the permitting of the transmission and infrastructure lines to power wind and solar. now those are going away now if you invest $10 billion into the solar plant in arizona, but not sure you can get the permits to build your power lines to the homes, would you spend the $10 billion? i don't think you need to be some political or economic genius to figure out the answer. a lot of complexity to the story that people don't realize. president biden has a long history with opec he wrote a letter to then president bill clinton he sued back in the early '80s there is a long history there. >> maybe that is part of it. all it nuance. i have seen that nuance.

it hits you over the head with the reality of the situation thank you. we'll see you. >> reporter: i've had a lot of coffee an lot of viennese coffee. let's get to the latest in elon musk's decision to move ahead with the purchase twitter. wall street journal reports that musk and twitter held unsuccessful talks about the possible cut price of the $44 billion of the social platform before he reversed course and said he would return to the original terms musk initially sought a 30% discount and then 10% discount before agreeing to the initial price. the journal said musk and twitter were still hashing out details and including for litigation to be dropped and if the closing could be contingent on financing give me a 30% discount

no give me a 10% discount no let's get the debt financing and i have to pay $30 billion and twitter is probably saying no. that leads me back to wondering if this is a real offer and the deal gets done all of those people who were doing defense with carl icahn saying the deal would go through, they made a ton of money when the stock popped. if they were smart, they sold at 52 and change instead of waiting for the 54.20. the risk assessment at that point is different >> i would say as i attempted to atone on yom kippur, i was taking phone calls and making phone calls on this. he made a couple of proposals. some around more than 30% trying to get a cut as you imagine. then 25 and 20 and then 10 was

the last one thrown into the bucket. >> this was him saying it. twitter saying no? >> i would say this is the part that actually got interesting and i think there is a bit of debate between both sides of what was happening somewhere when 10% was thrown out there and debate of how the 10% was thrown out and who threw it out there was a conversation from my understanding that was twitter saying we will not look at the number what we need to talk about is how you would close this deal. we'll talk numbers later clearly there is contractual issues about closing there is already agreement that indemnifies the board and pays compensation not just to management, but a plan where those who are paid stock over time plus cash. there is great fear in twitter

that the deal will close even with certain things in the contract that he will not abide by the contract. there became another conversation before you get to that about reassurances effectively. rearticulation of probably 10 to 15 or 20 points in the contract already to effectively reaffirm or i'm agreeing to these things. there is a whole plethora of issues ts thrown back into the bucket if you weren't going to agree with the deal in the first time. certainty and certainty and certainty and what date you could set. >> this is now a deal with the delaware courts. i think twitter is saying it is no longer on us. it is the delaware court >> that is the next part the new effort on this $54.20 is

back on the table, if we think that is true and this didn't a done deal. i think the effort is twitter is seeking or trying to seek what is called a consent judgment >> which would mean the delaware court would iespe enforce >> there are other methods could you add an interest fee? the deal was supposed to close on september 18th. could you now enforce an interest fee that you continue to pay until the deal closes could you, by the way, add a higher ticking fee than that i think there is a lot of things that are thrown into the soup in the past 24 hours in terms of the talks back and forth >> i had jim stewart on last night. he is aharvard law graduate.

one reason musk might have agreed to the original terms because if he lost in delaware and delaware court, the court could do a couple of things. you have to go through, but jim said delaware judges don't like to say you have to consummate the deal the other thing is award damages. it was a very clear idea of the damages and the original offer and how far it has come down with him trashing the company along the way, the stock has come back up the damages part of that if you go to court might be harder to prove. >> the stock is up to the company's advantage. >> i love jim. stewart, this is i disagree the judge has a track record now of forcing deals to completion this is not like a theoretical thing. this specific judge has done this before. the idea -- >> let me not say. both ideas were possible

jim said if she awarded damages and you don't get the company, but pay billions in damages, you walk away. >> people had him in prison strikes. >> they could take his assets. >> that was postulated if he said no. people said that he didn't say it definitively. there is a possibility if he doesn't abide. >> we had discussions. how do you hold somebody civilly in contempt of court the view has been, i think, the delaware court and the court they run could effectively try to take assets from you or a snare assets or titles of public corporations like tesla and spacex -- those are the kinds of things you would do before you see prison >> i remember the twitter stuff.

someone said it. maybe on air and they were mad all day. tesla -- i'm not saying they said it. it is true that someone did postulate that at the time. coming up, futures right now indicated as you see down. kind of happened in the last half hour. we were basically flat i'm not sure what is ailing the market down 200 we will show you events that could move the day ahead in "squawk planner. we will talk to white house energy strategist about the opec decision and potential easing of sanctions in venezuela you are watching "squawk box" on cnbc >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com.

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>> welcome back.

time for the "squawk planner." at 8:30, weekly jobless claims and several fed leaders have speeches cleveland fed president at 8:30. loretta mester and chen chicago fed president charlie evans at 1:00 p.m. then christopher waller will speak at 5:00 p.m. joining us on the markets is mimi duff. good to have you on to talk about fixed income do you see stresses or strains similar to what we saw in the uk last week whenever that was? everything is mushing together that was last week >> it was last week. it feels like it is all blending together there are a few strains in the u.s. mashrkets. i would say on the tail end of the instability of the uk with

mortgage rates gap wider that was one bit of instability. i think they've since recovered as the be global rates have recovered off the highs. i think that all of this stuff is connected at the end of the day. >> i just wonder, mimi, if you stay at zero for a long time and we can date it -- if you want to date it during the pandemic or all the way back we have been in emergency mode with qe and everything else for more than a decade if the absolute level where we head on interest rates doesn't seem historically that high, does the speed at which we get there cause really serious things or not? >> yeah. first of all, the speed we got there is really crazy. to put it in context, ten-year yields have moved from minus 1%

to north of positive 1.5%. we have seen that 2.5% more than that move this calendar year in the context of overall basket type portfolio stocks and bonds, typically the bond portfolio bails out the equity side of the portfolio when equities are not doing well this year hasn't been the case to answer your question about with these rapid moves can things break, yes, absolutely. the uk pension fund experience is a good one. just to refresh your viewers' memories, uk 30-years went north of 5% rapidly. from the news articles suggest that the lvi, the folks helping the pensions in the uk hedge their long dated liabilities >> i don't know why -- we don't

have much time, mimi one last question. if the fed is dead set on inflation and fighting inflation and they say, look, i'm not -- do they need to see the whites of the eyes of the credit event for them to stop or would they just go head first another 75? inflation stays hot. another 75 or do they consider we're moving too quickly >> only market function. not level. i don't think they will care about the level or interest rate credit spreads >> they need an actual market problem before they would slow it seems we're going to -- if it breaks, then we'll stop. that sounds like not a great way to conduct policy. >> well, they really are full force inflation fighting along with global central banks. the bank of england is a good

example. they did step in that's what we need to look for. >> okay. okay all right. a lot of power for, you know, 10 or 12 people to have especially with one at the top basically almost regual in what he is able to do thank you, mimi. >> thank you coming up, the state of louisiana. pulling funds from blackrock and we will tell you why and ro khanna will join us with the take about yesterday's massive output cut "squawk box" is coming right back

blackrock silver is advancing one of the highest-grade undeveloped silver projects in the world, in the "silver state" of nevada. with a maiden resource estimate just announced, the focus now is on further expansion. blackrock silver.

>> welcome back to "squawk box." the state of louisiana will pull $800 billion from the blackrock over the esg strategy. it would cripple the louisiana energy sector. blackrock is facing pressure over the policies from the republican led states and groups fascinating about this is the tactics that liberal and progressive states used for years in terms of how they use treasuries and pension funds to influence policies is something that red states have not done because they argued that they believe the free markets and that is actually a terrible tactic to use. you shouldn't use your shares to influence these things now we're in a situation where we're in the red state/blue state battle not over politics

>> this is actually a good thing. >> but you can debate that >> i know. >> the interesting part about this is really now i think you will get into the unique divide over investment products which is a new feature of the market and i don't think it has been -- we will see how far it goes. >> i wonder if it puts pressure on esg and makes it go away. nobody wants to lose half their clients. nobody wants to get politicized or painted in a corner with 50%. >> 100%. 100% >> this is not new this has been happening and there is a real push back on a lot of this. you are saying from both sides. >> now what is interesting is now this tactic if you are free marketeer on that side, if that is your view, this is the test

>> use that to enact free market policies you have a double negative there. you are trying to use the free market >> the secondary issue i would make this argument of the more liberal states, blue states that have used these tactics, historically what we talked about at this table a million times is those policies have actually not helped pension funds. there has been finger pointing left and right over calpers getting out of this and out of that five years later or ten years later, the pensioners lost money. >> they say make us whole. your fiduciary is to make us money. >> the point is made the fiduciaries would buy under

price hydro carbon i don't think you have the bad performance this time. at the top, this is red states using it for good things rather than blue states using it for a culture war. >> the other issue is -- >> this is economic. not culture. >> here is the fiduciary question this has been the political question is your fiduciary -- someone at calpers says my fiduciary is to teachers and to nurses and whatever it is and part of my fiduciary duty is to them and their livelihood >> make sure you are managing the pension. >> this goes to what louisiana is doing louisiana said this will hurt the livelihood of the people in the state. that is a ridiculous argument in this case, i would argue that's why i'm saying it goes back and forth >> focus on the fiduciary responsibilities and fine tune

what that is. when we come back, former u.s. comptroller david walker joins us next. we will talk about rising rates for interest expenses on u.s. debt and why he says changes are needed at the federal reserve. throughout hispanic heritage hun month, we are celebrating our teammates. >> hispanics in the u.s. represent an economic power with $1.9 trillion in purchase power. most importantly, we have a great culture and great set of traditions we are very proud of our past. we are also taking very seriously our responsibilities for the shape of the future of this country hope you can join us to celebrate hispanic heritage month. i'm sure you will learn a lot about our traditions

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>> good morning. welcome back to "squawk box. we are live in the nasdaq market

site in times square the dow looks like it would open down 172 points. nasdaq off 81 points s&p off 25 points right now. >> joining us to talk about the fed rate hike path and impact of higher rates and inflation is david walker former u.s. comptroller and author of "america in 2040." a super power pathway to success. david, we spoken with you for many, many years of the impact might be finally rose again and the impact of the debt and how much we have to pay to payoff the debt and what it does to the budget where do things stand with the way we see >> becky, good to be back with you. we have excess inflation and rising interest rates. the fed has to come back and inflation is the primary responsibility there one of the major tools is to

raise interest rates that ends up have a ripple effect for the u.s. to pay more to service its debt. the rate increases have occurred and eight have occurred and will result in hundreds of billions of annual interest expense for the federal government what do we get for interest? nothing. we have a huge fiscal imbalance that has become exacerbated because of the fed action. the fed's first and foremost responsibility is to fight inflation. its mission needs to be revised in my view. >> revised how you are not opposed to raising rates to fight inflation what do you think in terms of how their mission should be focused? >> they have three missions. number one, maintain stable prices number two, maintain economic growth those make sense in that order. they have the primary responsibility of the first of the they can help with the second obviously congress and fiscal policy has something to do with

that the third is unemployment. they should have nothing to do with unemployment. we have twice as many jobs today as people looking forjobs. unemployment is affected by education and immigration policy and welfare policy the fed has nothing to do with that get them out of the business we also have to recognize that for the fed to ultimately accomplish the objective, congress has to get control of its finances the only way to get control of finances is constitutional amendment that will stabilize debt to gdp in a reason able level. that is what hcr-101 in the house and soon to be introduced in the senate are designed to do >> how would it work it sounds like a good idea, but i would worry if there was little flexibility for the fed in periods of crisis we needed the fed to step in when covid shutdown the entire economy.

>> there needs to be reasonable degree of flexibility. one of the things did that the fed did to enable us to be where we are today and fiscal actions by the congress to follow the modern monetary theory which is flawed and failed is they purchased trillions of dollars of treasuries directly which served to artificially hold down interest rates because we weren't going to market to sell these. now they have to unwind that over time which will result in additional pressure to keep interest rates higher. >> all right let's go through the whole idea of modern monetary theory. that was my take on it, too, when you saw the revolt in terms of the uk gilt no more to modern monetary t theory you cannot spend forever the bill comes due that looked like that was

happening. it is not different from a lot of governments and whatthey have done for a while. that looked like the real moment of push back >> as you know, you know, becky, the theory is deficits and debt don't matter as long as you can borrow your own reserve currency and battle inflation it is contrary to history and establish ed economic principles and based on the flawed japan model. we have excess inflation that theory was promulgated by the progressives it is that along with our dramatic change in energy policy are the two primary reasons we have excess inflation today. too much spending and we are no longer energy independent which has to change. >> david, what kind of reception does this get in congress? you know, for a long time both parties have been willing to push deficits to new highs

>> first, there is virtually universal agreement that financial situation and fiscal outlook is unsustainunsustainab. the treasury department and fed and gao which i used to head and the cbo say we're on an unsustainable path which has gotten worse we face the exhaust of the funds in social security and medicare in 2024 and 2028 that is likely to come sooner because of the recent economic conditions universal agreement that you will not get 2/3 of the house and 2/3 of the senate no matter what happens to agree on the constitutional amendment to stabilize gdp to sustainable level. we have to go to plan b. the proposed amendment to be citizen ratified that is hcr-101 is about

the senate willthing if we don't do that, the economic future and national security and domestic tr tranquility is at risk >> david, thank you. >> take a look at the hill today. there is something how we are not following constitutional principles as well i just saw "hamilton" last night for the first time >> you looked like the head of the peterson foundation. >> one in the same. >> deficit was $4 trillion it is now $31 trillion he grew the beard. we don't recognize you. >> keep in mind the deficit and debt >> the debt. that's what i meant. debt $4 trillion when you took over now $31 trillion

i guess, i don't know. >> the numbers were off. you are right. things are out of control since i have not been there. i'm trying to fight that. >> unbelievable. no one could have -- it is impossible thank you, david i know it was you. coming up, new data says demand for apartments has evaporated at nt.olick has details. th'sex >> announcer: currency check is sponsored by interactive brokers. the professionals gateway to the world's markets.

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>> after a record surge in demand in the first two years of the pandemic, apartment demand is falling off dramatically. diana olick is here with more. hi, diana. >> joe, a report says apartment demand evaporated in the countr due to a freeze in household formation. the third quarter is a seasonally strong leasing period demand fell this year. this is the first time it has seen a third quarter drop in the 30 years it has been tracking apartments summer is a busy turnover time in the rental market move-ins outnumber the

move-outs. asking rents were easing this year and fell month to month in september for the first time since the end of 2020. rents dip in september usually, but they did not last year vacancies are low given the strong demand, but the rate did pop up 1% to 4.1% incomes and rents have improved in recent months with incomes among new lease signers up 13% year over year demand softened in all price po points the chief economist points to lower consumer confidence. joe. >> okay. live in parents basement how can that happen? >> yeah. are people doubling up or group homes or a lot of people in one apartment or parents basements any way.

>> not homeless, obviously people have to live somewhere. there probably are increases in living that happens in recessions >> you see it in house formation. it flattened >> hard to figure. thanks, diana. okay coming up, stock picks in the financial sector we will talk about it. talk about the bank stocks you might want to consider for your portfolio or not we'll talk about all that after the break. that's coming right up i know a group who can help us. not those new age shamans again. i'm talking world-class business experts. data geeks, strategists, tax advisors, the works. what about technologists? 40,000 strong, baby. we'll be able to hit our projections both fiscal and astral. this company sounds great. what do you think, agnes? looks like it's unanimous.

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welcome back to squawk credit suisse and other financials taking a dip this week on concerns that the bank may have some trouble. we prepare to try to kick off earning season, good morning, to you, jason let's start with credit suisse last weekend was a doozy

everybody was concerned, worried about the fate of credit suisse. we talked about it in the context of is this some kind of lehman moment. can they get to the 27th of october when they're going to announce earnings and this restructuring plan where does credit suisse in your mind right now and as a stock pick as well >> yeah, my focus is on the u.s. banks, as you know clearly the company said they're going to come out in late october with the restructuring plan i think the street in general is waiting to see what they have to say. you made the reference to 2008 and lehman brothers, if you kind of compare/contrast just the financial services system in general today versus then, it's remarkably different in terms of the capital, the liquidity, the health of the balance sheets of the banks, particularly in the u.s. i think it's not a great comparison to make. >> let's take that one for at least now off the table. as you look at the u.s. banks,

which i know you do cover so very well, if you like one or two, which ones do you like the most and, frankly, which ones do you hate >> kick off the third quarter earning season next friday with more than half the banks reporting in a single day. you're going to see strong records. it should be another record quarter as the group benefits from higher interest rates, trading. you talk about the volatility in the markets, trading operations the banks should benefit from that we expect loan losses to be at 50-year loans. names like a wells fargo or bank of america that are exposed to the benefit of higher rates should stand out. >> but just dollar for dollar, if i said you could only buy one, who do you buy? >> wells fargo stands out at the moment. >> that's a value play for you

at this point? >> it is trading not much more than tangible book for a company that we think in a few years going to put up mid teens. >> for the last decade, i feel like, if you ask a lot of folks in your position which bank do you like from a value play position, which has the highest chance to go higher, everyone would have sat around and said wells fargo. they would say it's a mess it should get cleaned up if it gets cleaned up, it will be amazing here we are sitting around -- just look at the calendar, right? why do you think that is >> i think you had a new management team that look over a few years ago, that's done a tremendous job in terms of cleaning it up and now they're at the point where they got the new products in place, new management team and board in place and the results should start to improve on a relative basis as you look out over the next couple of years. >> when you think about jpm or

bank of america, one of the biggies, you like keeping your money there -- not into checking or savings account. >> checking and savings account still don't pay a lot of interest banks have done a good job in lagging in terms of what they're paying depositors. you're going to see robust margin expansion this quarter and banks should benefit from that. >> we're going to leave the conversation there appreciate it. look forward to seeing what those numbers and the quarters look like next week. >> thank you still to come this morning, the new data on the consumer from john hope bryant. that is straight ahead and later, we'll talk about yesterday's big opec cut with amos. >> announcer: squawk picks is sponsored by wisdom tree

good morning futures lower this morning as the massive rally earlier this week fades away at least in the futures. we'll continue to see, walk you through what you need to watch in today's session. oil extending its gains

after opec plus slashes crude output we'll speak to a congressman who has been critical of the move and said the cartel is actively fleecing the american people. the latest in the musk saga and whether or not a twitter deal will happen "squawk box" begins right now. good morning welcome back to "squawk box" right here on cnbc i'm andrew ross sorkin along with becky quick and joe kernen. take a look at u.s. equity futures at this hour we're looking at a little bit of red across the screen. right now the dow looks like it would open down about 192 points and the s&p 500 off about 27 points also show you treasury yields looking at the ten-year note right now. sitting just at about 3.77

the two year at 4.157. talking about the energy complex. opec, russia, the whole story of energy we're at 87.35 brent sitting at 92.99 whether you want to take this as a signal of what's going on with risk appetite going on, bitcoin is sitting at 20,000 >> it will be interesting to watch oil as the two -- supply and demand >> oil prices go up, does it hurt demand and what happens -- >> right how bad will demand be i think the saudis think that it's going to be really bad. >> right. >> and they're talking about central bankers. even the u.n. is talking about -- the world bank talking about central bankers. this could be ugly in a recession, oil can go to 20

bucks. remember, it's done it before. >> that wasn't a recession -- >> what's 2 million do >> brian pointed out it's 900,000 because they're not meeting the production quotas in a lot of countries do you believe the sort of this is a cabal that's trying to help putin or do something else neighbor a cabal is a cartel or maybe they're looking around and saying, this is going to get bad. >> the saudis and russian like high oil prices. >> that's true too. >> i think it has more to do with that. saudis got their own problems domestically and they got -- how many people work in saudi arabia >> from other places, from other countries? >> no. how many of of their own citizens have jobs a lot of it is it the largesse

of the government. i think frank is going to mention oil. let's get to frank holland with a look at this morning's premarket movers. >> we're going to talk about oil. we're going to start with social media. the story of the morning, twitter. twitter down a percent and a half this is on reports that elon musk and twitter, they're working out those final details to end litigation and close that $44 billion deal to take twitter private. musk is scheduled to be deposed today in austin, texas shares are up more than 15%. actually, up more than 15% week to date. spiking after reports musk agreed to buy the social media for $54.20 a share you've been talking about the moves all morning. he's saying buying twitter was key to creating a superapp that

he would call xx shell oil dropping 5% this morning after a week outlook there's an impact of reducing ebitda by a billion dollars or more the country's chemical margins forecast to be weaker. shell posted record profits in the first half of the year bp also down on sympathy, down 2.5% social media site pinterest is moving higher this morning after upgrades from goldman. up over 4.5% right now take two getting a price target raise. goldman seeing potential for a 40% move for the upside for the video gamemaker. back over to you. >> very good, frank. a lot to have -- totally different situations in all of

those. but it all adds up to more red this morning thanks, frank. good to see you this morning as well let's get back to twitter and the fate of elon musk's deal for the company. "the wall street journal" reports that as of late yesterday, the two sides are still at odds over details of the proposal to stick with the original agreement cara joins us right now. the more we hear about this, the more confusing it becomes. the stock took off, twitter shares, that is, took off on the original tweet from elon musk saying that he's gone back to his original price and will offer 54.20 for it it sounds much more convoluted than that. what's happening behind the scenes. >> that's exactly right. if you think about it, the letter that musk's lawyers sent to twitter on monday which started this all off has three facts, we will close at the original price, contingent on debt financing provided the litigation is paused

my understanding is, both sides are open to the original price, of course, but the discussion is now around kind of how to resolve those other two items. is it contingent on debt financing, what needs to happen before the litigation -- before twitter is willing to put the litigation on hold. >> twitter would be crazy to say it depends on the debt financing going through. you're talking about a 16% haircut for citrix when it went out. what would prompt them to say, okay, this will be contingent on debt financing at this point because the deal they have right now says it's not. >> exactly so i think that's -- that's very unlikely to happen and you could imagine in addition to not giving that up, twitter probably wants extra comforts after all they've been through over the past six months. and then, you know, on the other side, musk may not be under particular pressure to make

extra concessions given that he's offering 54.20 again. that's my understanding of why they're at odds right now. but there are signs that they're making some progress in the meantime, they did both agree to delay musk's scheduled deposition today that could be a sign that there's some agreements, at least. >> i mean, this is something that would have to be resolved rather quickly if it is resolved the judge is saying she's moving ahead with things as scheduled which means october 17th that's 11 days from now. >> they can't delay the deposition too long. it would have to happen before the trial. so we should have some clarity is the thought. >> cara, the question i have, if this is some kind of grand negotiation which doesn't really make much sense to me anymore, isn't this capitulation in the sense that a judge -- even

though they don't -- are not supposed to technically take a settlement proposal into the court, that any judge who's clearly not in elon musk's camp already, it's pretty clear where she sits, will look at the settlement proposal and the fact that he even exists and say, you know, enough already >> enough already and then do what what do you make >> enough already and force the deal if there's anything more than -- if this is anything more than a negotiation at this point, it only bolsters the twitter hand in court itself. >> yeah, that's a really interesting point. i think it's probably why maybe twitter could be playing hardball here and they feel like, hey, the worse that could happen we have a strong case, let's see what protections we can go to make sure this deal

closes they obviously don't want to leave any openings for musk to keep playing games -- >> cara, in terms of -- in terms of these reassurances that they're seeking and i spent too much time on the telephone yesterday trying to understand the situation because there's folks -- there's folks in muskland, i think, who are trying to portray the -- they're trying to portray that twitter is seeking things that are not already in the agreement or they're trying to benefit themselves in some way i don't think that's possible and that's what i was going to ask you about which is to say, there's conversations about what compensation might look like for executives that i believe is already previously agreed upon, not just executives but how employees get paid, issues around indemnification, other things that i know folks inside twitter are worried that once a deal were to close, potentially,

maybe he would renege on >> i'm not familiar with exactly what -- what the details are we put in the story what we felt confident about which is they're at odds about the terms that would be required to get the deal closed. the deal right now is to get to the deal closed and obviously when you're twitter and you've been through the past six months, you need to get some protections in place to make sure that happens. both sides want to know what rights they have in case something goes sideways. >> what rights they have if it goes sideways, as it's gone sideways already appreciate it. thank you. >> thanks so much. coming up, understanding our community's financial help john hope bryant releasing its credit score community index it's a snapshot of what's going on in the real economy he's going to join us after the break. insider reporting that p/e firm vista equity partners are trying

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park their capital because the debt is a floating rate. but that also means that increasingly large portion of the economy, especially the middle market private companies, are going to need to come up with more cash to service higher interest rate payments leslie picker joins us with that story and what it means. >> hey, becky, good morning. private debt made by nonbank investors set a record last year this year, though, it's attracting a bit more scrutiny along with those inflows of capital. this has been an attractive area of the alternative investing landscape in recent years because it's a floating rate investment which offered more yield than liquid bonds when rates were low and we're moving higher in the more hawkish environment that we're currently experiencing of course, the double-edge sword to this is that borrowers will need to come up with capital to service higher interest payments at the delivering alpha

conference a week ago, dan i'veson said this would cause significant strain during the financial crisis. >> we think the problem is going to be in that segment of the nonfinancial credit space and those risks have laid mostly dormant this fall but thereby a negative theme for markets as we get into the 2023 period. >> we should get an updated sense for the health of these types of borrowers when many of the alternative firms think blackstone report earnings this month. >> leslie, thank you >> it's time to take a look at what is happening in the real economy today. operation hope launching a community credit score index joining us right now is operation hope chairman john hope bryant. it's great to see you. let's talk about what this index

is before we get into the details of it. >> well, wall street can measure quarter by quarter and know its results. but we're able to measure community corner by corner the health of a community and their economic prosperity because most of our challenges are actually economic in nature so a lot of communities, a lot of leaders are really looking at the symptoms, andrew, they're looking at crime, they're looking at health disparities. these are the symptoms, not the core we're able to now with experience help. we have the data to go right down to the zip code level and give you an actual score of how a specific community is doing and what we found is dramatic, within 15 minutes, you might have a sweeping change between 150 points, 550 in one area and 730 or more in another and it changes everything.

>> i'm looking right now, for example, at chicago and you have -- i don't know if you've got this graphic in front of you. but you can see the distinction between one area at 597 and lincoln park at 739 and, again, this goes to your 15 minutes apart situation. >> yes if you look at that data, you find that the health disparities, the -- the periods of time you live is striking and i think as lincoln park, i'm doing this by memory -- >> garfield park and lincoln park are the -- >> garfield is about 61 years and lincoln is about 81 years. it's a 20 -- you live 20 years longer because of your credit score, because of your zip code and the underlying elements that permeate there and we found that if you move the credit scores 54 points,

we're doing it in six months, we're reducing debt by $2,600, increasing savings up to a thousand dollars for somebody making 45, $50,000 a year and moving credit scores, you're fundamentally changing somebody's life. >> so when you look at changing your credit score, what are you actually doing and how are you doing that >> well, most people have an error, andrew, on their credit score. they don't know. most people don't check their credit people who check the credit tend to have good credit. but most americans don't check their credit they were not taught financial literacy it's what you don't know, you don't know if you have an error on your credit record, 90% of the time if you go to the credit bureaus, they can't confirm it, they must remove it. 90% of the time it gets removed, that pops your credit score 30 points what's that do to your

self-esteem, confidence, belief in the system. what's banking a trust system now you're able to -- willing -- take it as a charge off. we found if a charge off is ten years old, they sold that to a payment agency, well, $1,000 bill, they want 50 bucks we'll give them 100. everybody wins you can move credit scores legitimacy by getting them engaged in their lives what's beautiful about this, andrew, i can't change a lot of things, i can't change bias, racism, political environment, where you work but you can change your credit score. and that's why this is so powerful every project in america should have a community credit score index rating next to it and so as you know how to move the needle >> john, real quick. we got to go in terms of changing the credit score and it's an important

thing, question is, how quickly can changing the credit score change all of the underlying numbers? what's interesting about showing, you know, west garfield park versus lincoln park, the credit score is a lot lower in west garfield park, meeting household incomes, $25,000 versus $117,000. homeownership, median home value. so there is -- it's not just a credit score issue it's a disparity across all sorts of different lines and the question is, how quickly can you shift the dynamic with the credit score unto itself. >> 12 to 18 months what you're trying to do, you're trying to get -- if you -- i'll make this simple you move the credit score a hundred points from 550 to 650, you stabilize that neighborhood. the crime goes down. the high school graduation goes up look at that number between graduation rates between garfield and lincoln park. it's stunning.

the -- and college education goes up. the small business number goes up, the entrepreneurship level goes up. the self-esteem goes up. the people who have a 401(k) grow up. payday loan renters, rent centers, they go away. because people with a higher credit score make different choices. it may not be the same as lincoln park, but it's the best in your community. >> appreciate you joining us this morning thank you. >> honor to be with you. coming up, opec's cut in production sparking new inflation fears. ro khanna has been critical of the move and opec plus in general. he's going to join us in just a few minutes. as we head to break, check out this morning's winners and losers in the s&p 500. we're coming right back.

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peloton. the company cutting another 500 jobs in its turnaround effort. that's 12% of its remaining workforce. "the wall street journal" reporting that the new ceo says that the company has six months to prove that it can survive on its own. the stock down by 2.25%. >> a look at what's moving in the premarket, including the latest developments regarding elon musk and twitter. and after the break, congressman ro khanna is going to be our guest. he's been critical of the move by opec to cut barrels of oil production and then in the next hour, the president's right-hand man, amos hochstein is going to be joining us as our special guest. right back after this.

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♪ welcome back to "squawk box. take a look at futures right now. we are in the red this morning we're looking down about 176, 177 points right now nasdaq off about 67 points and the s&p 500 off 24 points. take a look at treasuries. you're looking at an interesting

story there. five-year -- let's look at the ten-year 3.781. but the two-year at 4.173. >> kind of flipped it around. >> i know, we just flipped it around. >> it throws me off when we do that. >> that looks like it's not inverted we should leave it the other way to show that it is inverted. >> right brent crude and wti saw their highest prices since mid-september yesterday in the wake of opec plus announcing an output cut of 2 million barrels per day. our next guest says in his words, opec is actively fleecing the american people and destabilizing the economy. let's bring in congressman ro khanna of california, whose district includes parts of silicon valley it's been awhile good to have you on. i guess most people agree, this is a snub to president biden and to the united states no doubt about it.

but then there are disagreement about the motivation do you think -- i mean, the saudis need money, they love money, they've got their own internal concerns in their country domestically their citizens don't pay taxes they like high prices, right or are they really doing this to help putin to fund that war in ukraine? what do you think the motivation is >> they need the united states of america more than anything. we supply the parts for their air force, we provide them with weapons. it would take them years to transition to china or russia for any of those parts are weapons. their air force literally would be grounded. i don't know whether their motivation was to strengthen putin. i don't know whether their motivation was to hurt the

american people, but the fact is, it does hurt the american people and there should be bipartisan outrage and a demand that they reverse the system or there will be consequences. >> they point to -- i don't know whether you think this is right or wrong there could be central bankers around the world, there could be a sharp slowdown in global growth and in previous recessions, we've seen oil drop precipitously. we never thought it would see 20 or $30 a barrel, but that can happen couldn't they argue that they're just protecting their -- protecting their revenue, that they need, that's generated through oil. >> at the expense of the american public, it's not acceptable if they were a country that was not dependent, joe, on us, that would be one thing they literally -- their entire military is dependent on us. we were supporting them when

they launched the brutal war in yemen, which continues, the largest humanitarian crisis in the world. i mean, before putin's invasion of ukraine, it was the biggest foreign policy crisis, they murdered khashoggi who was a "washington post" journalist now they're coming in just when oil prices have come down, just when the american people are getting under $4 and they're taking this decision in contrast to not just what the president has said, i don't think you could get a republican senator on, republican house member saying, yes, we think it's a good thing that saudi arabia is cutting oil. >> i heard earlier this morning from former senator judd greg, he's not a flamethrower. he's a wonderful, wonderful man. he just spelled it out here, biden, president biden goes, hat in hand to autocracies, empowers russia, is willing to underwrite

a leftiest regime in south america but continues his administration's efforts to undermine u.s. oil and gas production in the name of his green energy elitism and that's why we're in this mess right now. have your views have all done that i've seen video of you asking our oil producers, why haven't you matched the production cuts that we've seen from the oil producers over in europe and now we see what europe is facing have you evolved to some extent on that view >> i think that the full clip has to be in context i was talking about long term moving towards a green energy, but short-term, i have called clearly, even in "the wall street journal," for an increase of oil production in the united states here's the facts, jim, we're producing more oil today than we did at any time under the previous administration and i support efforts to short-term

interest domestic oil production the president supports it. u.n., there may be a difference of opinion with some of my republican colleagues and what we should be doing in the long term in the long term, i said there should be a transition to clean energy but in the short term, and by the short term, i mean over the next year, we need more production. >> i don't think we're back to 2019 levels yet, ro. so i don't know if that is -- is factually correct. do you think -- i mean, in your heart -- in the bottom of your soul, do you think that we're doing everything that we can in this country to make it easier to produce hydrocarbons right now? you know we're not. >> the question is, what would we do that's going to have a short-term production increase i mean, you know, and i -- if the oil executives have ideas,

what short term, it would do, not that we're going to build a new infrastructure for things that aren't going to pay out for two or three years that's not fair. if they have ideas, here's one idea, why don't we put a ban on gasoline and the export of oils and that is something the white house is considering fox news runs about how we sold oil or gas to china, let's ban it let's have more domestic supply. that's something that we can come to an agreement on. >> congressman, i hear you about wanting to make sure we conserve all of our oil and natural gas here but if we were to ban natural gas in particular, wouldn't that really crush our european allies who are really feeling the worst brunt of what russia is doing to them right now but it might help us, but it is going to crush our allies who are facing much bigger problems. >> that's a fair point and i would have an exception on natural gas for our european allies we could do a lot by having an export ban generally on gasoline and other refined products but

have an exception on natural gas or some other things for our allies that's a fair point. it shouldn't just be a blanket ban. >> congressman, shifting gears a little bit to a wealth tax i think you brought that up again. i'm still wondering, you know, how come we can do that, whether you really think it's feasible we couldn't even do carried interest the democrats folded like a cheap suit on -- for one, i don't know i don't know what they got instead. but you can't even get that. how can we line up enough votes for some type of -- and do you want to do it to anybody that has a certain amount or does it have to be if they, you know, had -- have never paid capital gains because they've never sold their shares and then they're borrowing against that you want to actually -- what's the methodology? the devil is in the details. >> as popular as you are, you

won't qualify for the wealth tax. this is for people over $50 million. i've got the addistrict with th most billionaires. they keep sending me back to the folks in my district 25% wealth has been lost in this country since 1980 by the working class and the middle class. stat at the same time, people have made extraordinary wealth. some of it is justified. they've done great innovation. i have a lot of admiration for steve jobs i don't agree with everything that elon musk says. 93% of american wealth is invested in america. where are they going to take it? to china to russia? give me a break. they're going to keep nit the united states. maybe we won't collect all of it, maybe it will be 80% to some people, but the vast majority will pay the tax they'll grumble and get over it

and then we can invest that money in patriotic things like childcare and preschool and building manufacturing here. >> it's just -- it sort of goes against what we've always -- that's not necessarily an excuse but if it -- if it's not what i was referring to, if it's wealth that has been accrued that you've paid taxes on the first time we just never gone back after it again. i didn't work well in europe there can be more -- you can move to a different country in europe, obviously, moving to different states wouldn't help but it seems like you're just changing the fundamental tenets. you just don't say, okay, i'm going -- it almost sounds like eminent domain you got this money, we want it and i know wealthy people have done well.

i blame that on zero interest rates for 15 years anybody who has assets, their assets have appreciated. it almost seems punitive, ro. >> we have property taxes in this country. >> that's true >> that's based on personal property look, the reason that we have a lot of billionaires is partly innovation but it's also that we hollowed out manufacturing in this country, we run trade deficit, we have all of this capital come in from places like china and a lot of it went to buy up farmland, real estate speculation. so i think a couple percent wealth tax that is used to rebuild our manufacturing base, to help the working and middle class with childcare, college education is worthwhile. but what i want to make clear, that's not demonizing the people who have built the wealth. it's saying they can do more for our society. >> i just don't see it, ro

couldn't even get carried interest what happened there? did you go along -- i know it was kyrsten sinema but just overall -- i'm not even saying that i necessarily think -- that -- you would at least start with that. >> i agree with that that was one of the shameful moments of our congress. it shows the influence of money in our politics -- >> and if you think that was influenced in money, wait until you start to -- you start 2 and 3% -- you ain't seen nothing yet the money that will flow in. all right. congressman, thank you >> always good to be on. >> we haven't decided. joe or ro or ro joe. i want to be the vice president -- >> you can solve the problem at the border. >> the border -- we can solve that, joe. i know we could do that. that's commonsense >> we need workers anyway.

we got to fix that thanks in the next hour, special presidential coordinator for international energy affairs amos hochstein will be our special guest. stick around for that interview. when we come back, elon musk and twitter reportedly looking to reach an agreement to end their litigation in the coming days and clear a way to revive musk's $44 billion take private deal that's according to reuters. but is owning twitter really worth it for elon musk jon fortt is here with a preview of what's to come. >> is elon musk better off owning and controlling twitter wi aueotsis en we come back.

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welcome back to "squawk box. elon musk has this week reversed course in the twitter saga yet again saying he wants to complete that $44 billion deal to buy the company at 54.20 a share. the question this morning, is musk really better off owning twitter now? jon fortt is here to weigh in. what do you think? >> yes, andrew, he is better off. i know it sounds crazy

twitter was suing to make him buy a company he didn't want but elon musk had promised to buy it, didn't inspect the property before closing and it's looking more and more like a delaware judge was going to make him follow through on his word could he have fought this, sure. but musk's reputation and the reputation of his friends were starting to get muddied. they were airing out his text messages and he was about to testify under oath he's a real-life tony stark, and embarrassing your investors in the process doesn't fit the narrative. this way he has to buy twitter but with tesla stock, he cashed in at a much higher price, having another global brand in his portfolio isn't such a bad thing if musk can conquer

electricity cars, space and twitter, maybe he really is iron man. >> but, social media new york city h-- social media networks come with a lot of baggage it could cramp his style, don't you think? >> on the other hand, owning twitter is going to be a nightmare for elon musk to the point where he might want to give it away why? because even though twitter will be one of his least profitable ventures, it's going to be the most distracting elon, you were offended, you weren't invited to the white house for tesla, you're going to be invited to the white house all the time with twitter. you have to explain to eu regulators who think twitter is fueling extremism. and there's china where twitter is not allowed to operate. the dance of advocating for free speech around the world and building and selling teslas in china is going to make your feet tired real quick what's musk to do?

if he's the majority owner at twitter, all of his other ventures become political football on the global stage his next impossible engineering challenge is this, make sure twitter pursues his speech values but structure twitter in a way he can claim he doesn't control it i think landing a rocket and using it again might be easier, andrew. >> i'm with you. >> that was really good. >> thank you >> the second one, especially. >> every ceo of a multinational in this country has tired feet >> yeah. >> i mean -- >> he's going to have a lot of tired feet. >> he's like the jeff bezos of "the washington post" -- >> we all -- >> do you think he can still back out of it that's one question. >> no. >> okay. let's take that off the table -- >> can you imagine the judge -- >> at this point, it's over. but what do you make of this idea of this "x" app which would be him bringing back the idea of

what paypal was 20 years ago, right, when he started working on this, he's going to create a superapp do you think that's real and do you think he can create something meaningful in that regard. >> far be it for me to say what elon musk can't do but there's the difference between keyboard courage, all the people on twitter have it, and then actually having to follow through on what you threaten to do, it's hard. the thing i've been saying privately is, you know, people think that somebody who is a billionaire and a genius can do anything but just because he can do electric cars doesn't mean he can draw a goat really well, better than -- >> i have a hard time betting against him, though, because he's proven us all wrong every single time. >> carl icahn bet against him and is about to make a lot of money. >> there's a reason it's not at 54.20 right now. but that premium has come up in a big -- >> way up.

yeah >> thank you, sir, appreciate it take a look at futures, we're in the red this morning before we go to break, stock futures are lower. nasdaq off about 54 points "squawk" coming right back

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saw this morning s&p is down about by 20. the nasdaq down by close to 50 let's talk market with cheryl pate the senior portfolio manager at angel oak capital investors and so many waiting and watching to hear what the fed says next. there are several fed speakers coming up today. my guess is they're not dovish but you have the big jobs report tomorrow so where do you come down on what the fed's position is and what that means for the market. >> yeah, i think that is clearly the question of the day. and where we think -- i think there is clearly the view that the fed still has work to do here but there is also the sort of balance realization there is a effect of these monetary tightening changes that play out over the next two to three quarters so it is a delicate balance and that is why the data is so important right now. but i don't think there is doing

to be any significant shift in tone in the near term. jobs report will clearly be important. more so the cpi print next week as in where we're seeing inflation trending from here and we're concerned about the stickiness of some aspects of that inflation print. >> which part of the personality becomes most prominent is the bullish upbeat tone we've seen in the last several sessions, the marks up by about 5% or is it this bearish kind of scary market we saw last week and before >> i think we'd be more in the camp there is probably more downside and more volatility to come as we enter earnings season we look ahead to bank earnings kicking off next week and i think it is one where clearly there is a benefit to higher rates but at margin we're more concerned about accelerating a

credit cycle here. stopping buybacks, weak capital marke market so i think they will out weigh the growth for the last couple of quarters an that is particularly going to be evident at-n some of the bigger banks with large capital market businesses. >> so you would steer clear of the big banks but do you like region financials. >> i do. i think that is the clearest way to play higher rates and so it is a more pure business model, there is less exposure to capital markets and less exposure to consumer which is where we think the firstshoe t drop could be and nthat is our lower income and lower fica score. the community banks are tilted to commercial lending and have a faster repricing lobe book and i

think deposit will stay low so it is still more of that revenue growth story playing through with still some normalization, but the earnings picture is certainly brighter there in our view >> cheryl, thank you good to see you. >> thank you we have a big hour ahead coming up. more on the oil patch in opec production cut from the white house's head of international energy affairs and then kevin o'leary is oufa og about elon musk's abt-cen twitter and so much more. "squawk box" is coming right back ht? he'd crunched numbers day and night. that's it. to maximize profitability. morning. i have quarterly numbers that are beautiful. and forecast revenue from every corner of your organization. is that important? or you could use workday. the finance hr and planning system that helps cfos make better decisions faster. for a solve problems like a genius world. workday. for a changing world.

good morning, stocks set to give back some of the gains from earlier in the week. futures pointing lower but major averages stick tracking for the best week in three months. the white house not happy with opec now the administration reportedly looking at easing sanctions on venezuela we're going to speak with a top energy adviser to the president. and can you keep track of the fast-moving developments in elon musk's bid to buy twitter? we can we'll bring them all to you and talk about them with one of the only, the one and only mr. wonderful, kevin o'leary is joining us to break it down and give his opinion on all of it.

the final hour of "squawk box" begins right now ♪ good morning and welcome back to "squawk box" here on cnbc live from times square. it stopped raining wonders never cease. i'm joe kernan with becky quick and andrew ross sorkin equity futures are giving back some ground this morning 163 yesterday i thought was pretty impressive after 1600 points monday and tuesday, market was down 3 or 400 the dow ended up closing down about 50 or so yields have been under control they've been kind of quiet not a lot happening there. waiting for either the friday

number tomorrow on jobs and pce data or we'll get inflation data that is coming back and we're kind of in wait-and-see mode we do have a snap back and let's see if it is sustainable let's get to the biggest premarket movers they better be big and premarket. >> they're in the premarket and also moving. we'll start with credit suisse shares popping this morning. up 4%ond the reports that the bank is considering an investment bank spinoff and there are talks to revive the first boston name those talks are advancing. up more than 10% despite that the bank is on the brink of collapse and even more questions. jp morgan giving the european bank an upgrade today. an consolation brands. a beat on revenue and eps. profit more than a quarter above

estimates. maker of corona and modela raising guidance for the core beer business and remained to expand beer production in mexico the earnings call started at 10:30 a.m. eastern and compass shares moving on reports that vista equity partners is taking over and they deny the reports saying they haven't been contacted by anybody about a take over. and it was founded by billionaire robert f. smith. back over to you. >> a note on that. because i was calling around beyond the company saying it is not true, there is a secondary issue which is that vista equity has not ever bought from what i could tell in my life a b to c business they are in the business of buying companies and compass is not one of them and so i warn

the consumers trying to buy up these shares that this company is being bought by vista that is not to say that there is nobody wanting to come in to try to buy compass along the way but the idea that vista is it, i'm not sure that is the case. >> the ceo owns about half of the shares so he would have the final yay or nay >> yep, exactly. >> we're watching shares of peloton this morning the exercise bike maker said it will cut another 500 jobs or 12% of the remaining work force. this follows several earlier rounds of job cuts the ceo barry mccarthy said he's giving the company another six months or so to turn around. if that doesn't work it is unlikely that peloton is viable as a stand alone condition it was down but now it is flat.

>> i think barry is so candid and he will tell the truth it is either going to work or not going to work. when the last time you heard a ceo say look if the next six months we can't figure it out, it is not figure out-able. >> someone else who could turn it around could say something like that other wise you own it. >> >> i want to know how he has his physique is it peloton. >> 16 hours of fasting aday. >> 16 hours? >> intermittent fasting. >> that doesn't sound intermittent. >> i've tried everything else. that works and after a few weeks your body gets used to it and you're never hungry yesterday i was in town and i forgot to eat lunch. >> you know what works running. >> i do that too. >> on a treadmill? >> no, i try to do it outside. >> how fast would you say? >> well and yu got me in this and i'm wearing an apple watch

and a regular watch and i try to get my heart rate to 120 that is the v-2 zone i'm into this stuff now. >> are you barely moving are both feet off the ground at sat time. >> we have to go but the truth is if you're running and trying to lose fat, you don't want to run fast so consumer said -- >> i don't run five miles an hour that is not fast. >> but people say how fast are you running? >> no, i'm not saying that i run 13-minute miles and that is hard enough but i do run for -- >> why are you killing yourself. >> i'm embarrassed to run slower than that. i could crawl. it is like the snail on top of the turtle wee. >> we're going to get to kevin in a moment. but in the meantime, a statement from the national security adviser and national economic council director said that

president biden was disappointed by what they called the short sided decision from opec plus while the global economy is dealing with the fallout from the war in ukraine but in an indication the u.s. may have more cards to place the biden administration is reportedly looking at easing sanctions on venezuela government which would allow chevron to resume pumping oil there. joining us is am os hochstein. and let's start with the opec plus decision. this puts saudi arabia in close coordination with russia on this could be they russia's allies and ours at the same time? >> good morning, becky it is good to be back with you today. yeah, look, clearly as we head yesterday, we're very disappointed in the decision that opec, saudi arabia and russia in particular took yesterday. quite frankly we think that is a mistake as a time when the

president of the united states is so focused on strengthening the u.s. economy, strengthening the global economy this step that they took yesterday is not in line with interest of strengthening global economy. and to be honest, it is going to hurt not just countries that are dealing with fallout of the war in ukraine, but already poor low income and middle income countries around the world and developing countries that are really already from high energy prices so this is a mistake. and we're very disappointed about it >> we've just spoke with congress ro khanna and he's of the had been that this is outrageous and that we should stop selling arms to saudi arabia at this point does the administration agree with that? >> well we're going to take a look as we said, and talk to congress about whatever tools we have and need in order to address this situation but what we are really focused on as the president has been all along is strengthening our

economy by making sure that oil prices remain manageable and at a rate that reflects the supply and demand balance and the american consumer, the american consumers are suffering from 5 gasoline today those prices are much lower than at their peaks we want to make sure that that price trajectory is still there where prices could be lower for consumers. that is what we care about and that is what the efforts that we're going to take so we'll see what this means moving forward we're going to identify the tools that we need in order to address it, to make sure that our economy, the u.s. economy is protected from these kind of steps that opec took yesterday. >> so the wall street journal is reporting this morning that the biden administration is negotiating to loosen some of the strict controls over venezuela, that this would allow chevron to continue to pump oil

there again if the sanctions are eased. is this the situation with maduro doesn't look so bad when we can't get opec plus to go along with ourneeds? >> i think that there is -- i just saw the article as i was coming in this morning there is a lot left to be desired by that article. i think we're still looking at what the maduro regime needs to be able to do in order for us to take steps on our end. we are -- we have already taken some steps that we think make sense to strengthen the u.s. position economically as well as our objectives for transformation and change in venezuela. it is in relationship between the regime and the opposition. and we're going to continue to work on that there is really nothing to announce yet i think that is very premature to any discussions that we're having. >> so what is wrong in the article. it said that you are preparing to loosen sanctions.

is that or is that not the case? >> i think we're just very -- we're not there yet. and i'm sure i'll have something to update if you something changes but frankly there is nothing to report at this point. >> aimos, let's talk about the opec plus cuts yesterday 2 million barrels per deay is th headline, but it is closer to 500,000 because some were not meeting quotas already you're talking about what we've been releasing from the strategic petroleum reserve over this period of time. our plan is to continue releasing but the spr is at the lowest levels since 1984 because of the releases to date. how much is left there and what you could continue to do and was the saudis sending a message everything you release from the spr will be cut here. >> i've learned over many years

to take what opec says and does as two separate streams. they were already over 3 million barrels below their quotas that they set for themselves. and so i will -- we'll wait to see if it is even 900,000. i expect it is significantly below that if any cut at all i'll be surprised if there are net cuts maybe a couple of countries will cut while others will increase and so we'll see what that means. as far as the spr, look, we said we we would release 180 million barrels and we haven't released the full 180 million the president has authorized another release of about 10 million barrels in november. that is still gives us more room before we reach 180 million. so we still have some space to do that. and we'll see what the impacts that these things will have on

price. we don't believe that it is going to have much more significant impact on price to the upside the actions by opec so i think we're bell in a good place to supply the american economy and i think we still have room there. there is no doubt that you're right. we want to make sure we have an spr and we have a robust spr and we plenty of room to continue going. >> what is the biggest concern, if you don't think is that what opec plus did yesterday, in terms of the announcement and what they say they're going to do if you don't think it will lead to higher energy prices, why do we fight so hard to try to get them not to do it? >> well, i think prices did go up a few dollars over the last several days today they're running flat but over the last few days they've gone up. but i think the mistake that they've made is that they are

cutting production or rhetorically trying to cut production at a time when prices were relatively high we were already reduced the price from 120 down to about $80 or $85 so a massive reduction in price that what the president set out to do when we put the strategy together several months ago. so we have brought the prices down but not to a point where it justified a reduction in cut announcement by opec and frankly, a lot of countries around the world, specifically low income countries have seen that saudi arabia and russia are colluding against them and that is really unfortunate and that is what the mistake is. the world is still at a volatile place. we don't know where it is going to go. and we would like to see prices continue to go down. we've already said we'll replenish the spr when prices got to be low. we never said what that would be so this is not necessary to do

it this time and we're going to work to see what we could do to make sure that a small number of countries can continue to have a impact that threatens the global economy. >> in an op-ed piece they have gone to saudi arabia and now venezuela and autocracies and dictators and all of the things that -- all of the baggage that comes along with dealing with them yet, the journal points out, the biden white house has tried every gimmick to lower gas prices other than the one that would really matter, call off its political and regulatory campaign against american oil and gas production in a statement from mr. biden to that effect, it would spur more production in the permian basin. why not invite the major oil companies to the white house to talk about this. not to berate them about gouging gas prices if they don't even control.

that is refiners but why not invite them in a show of good faith that we need near term, we need these guys to produce hydrocarbons why not do that. >> so we've had this information before and i appreciate that look we've asked them -- >> invite them to the white house. i don i don't know if i would risk capital not knowing if i would get a rieturn on it. you know how things work. >> i'm glad you're not making the decision because i think they are committing capex toward it we've seen several of the american companies and well companies operating in the united states increase production this year we think they will continue to do that. we have seen over half a million barrels of a day of production increase by the u.s. industry. we expect to see another several hundred thousand barrels in 2023 we are working with them and i

could tell you that we work very closely with them. sometimes we -- they like what we have to say and sometimes they like it a little bit less and we have a very open and honest conversation about what we think that they're doing right and what i think they could do more. we believe that the united states still has the ability to increase production. at this moment in time, that is an important asset and tool for the united states. we perhaps have more of a disagreement on the long-term of where oil play -- what role oil will play in the global economy as we transition away. but for now we have worked very closely with them to give them what they need both regulatory but also assurances in order to make sure that those investments make sense at the moment and that they will be able to recoup profits from them. we're not looking to make extraordinary profits against the back drop of high prices but we are -- look we're capitalists and we're americans

and we understand companies do things to make a profit. we're not trying to restrict is that. >> has chevron been involved in the conversations to consider loosening sanctions on venezuela? >> well since i told you that we are not that advanced in conversations to loosen the sanctions, there is not really any advanced conversation with chevron either we are in communication with chevron as you know they received a license to have discussions several months ago we have seen that some european countries have been allowed to take some crude to europe from venezuela and in a way in a does not go against the sanctions so we've made some changes but at the end of the day it is about venezuela policy and it has to match our goals and our values for what we need in venezuela. and we believe that we have tools here in the united states

to be able to address these kind of prices and again i think what opec did yesterday was a mistake and we're going to look at what we need to do here at home and working with our allies in europe to make sure that we have enough production to match that. >> amos, thank you, sir. >> thank you. coming up, the very latest on the twitter/elon musk saga. s micong fast and and furious. kevin o'leary is joining us. stay tuned to "squawk box" on cnbc go. go lights. go big city lights. go spotlights. go stadium lights. emerson software helps clean energy become reliable electricity. go “good night.” go boldly. emerson. ♪ ♪

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welcome back to "squawk box" the latest in elon musk's effort to buy twitter some reports this morning that the two sides struggles to come to a final agreement but that a deposition of musk that was scheduled to start today has now been delayed judge said to oversee a mid-october trial stemming from the lawsuit against musk so yesterday she's still getting ready to do it and i can report this morning as the journal and "the new york times" and others are reporting that musk and twitter did hold some talks they didn't go anywhere we should say about trying to reduce the price as to -- elon musk tried to hold those talks. to reduce the price before coming back to table

at one point proposing to reduce the price by 30% or month. then 20% and then he went back to 10% and well, it didn't work so here we are mr. wonderful is here and here we are what do you think is going to happen, kevin o'leary. >> i think what is lost in the narrative about details and what is going to work is why is he doing this if the first place. i think there is a good reason tesla and spacex and all of this other initiatives pay $0 in advertising. how did he do it he did it on the back of twitter and other social media platforms. very few people get to own their own unregulated network. which is what twitter is so, you know, barring the price, which obviously is overpaying for. he has 100 million plus followers. now -- >> he had the 100 million plus followers whether he owned the

asset or not. >> but he doesn't control the narrative or the platform and frankly it is -- iger himself didn't buy disney because it is -- it is the worst managed and a terrible company i'm sorry to say that. but i use the platform and i look at the metrics versus all of the other ones including tiktok and instagram and it is the worst as far as getting the message out. if he gets control of this and fixed it and allowed it to be a true narrative where everybody is heard i don't like canceling this politician then it is a world platform. then it is worth it. if he can't get the dead markets. >> you hear apollo and other folks that will put equity into a company that was worth -- what did he say -- if he's buying at 44, it is worth 15, 18. >> the stock goes down to $15 if

the deal falls apart, maybe $18. and now he's overpaying by about 40%. but if we don't get -- if he doesn't get access to the debt market, this deal ain't going to happen no matter what you want to litigate on because you have to be able to finance the delta. you can't sell all of his tesla stock. >> how much was left i thought he had financing for -- for $10 billion out of the $13 billion. the banks are on the line for that. >> he's $6 billion shy and he's saying give me $6 billion hair cut on it and we'll close. >> and for twitter to say that they feel like they've got a stronger hand. whether he could come up with the financing or not, you've signed the deal and you gave away. >> i heard all of that and ten there and throwing him in jail is a long time. >> i don't see anybody throwing him in jail. >> look if you're getting

frustrated, i can't negotiate something realistic, let's go down -- i know the judge is favoring twitter you don't know what will happen in litigation. poo poo happens. >> if you read the tea leaves of this judge this far. and i think it is elon musk reading the same tea leaves which is why we're back at $54.20 and that puts pressure on the twitter board. there is no question in terms of the timing piece >> well ihappen to have watche him forever and i think this guy is teflon man. and he could obviously multi-task i bet on him on this deal. by the time this is all over, i think he'll have a good out come. >> here is a question i had about twitter, if you open up the platform and get rid of the canceling. but that is around the margins or not the conundrum, about growing the twitter base, is different than

people fully appreciate. which is relies on users to create their own content and to create it in text. you have to come up with a witty little comment or say something. it is much harder by the way than taking a picture or making a video on instagram to actually do it right and do it well, in terms of scaling the business, you need a lot of people who know how to write >> or -- >> if you think you'll change the model of what it is. >> how many days and i'll include myself in this narrative. how many days have you not been something on twitter including you, joe everybody one off us is using te modern day information. >> they're already doing that. so where is the additional audience that is sitting around going, i can't do this >> well, if you were for example to offer me 299 a month to just have a narrative with the global watch community, i would pay

that. >> i would pay if you it were going to take it away from me. 299, i need it >> so there is new ideas on how to monetizing this that board on twitter, many don't have twitter accounts. >> what? what doesn't have a member on twitter? >> some of them are not tweeting do they have burner or private accounts. >> you should use your product if you're governing it, shouldn't you. come on. he needs to get in there and get the whacking stick out and start from scratch. >> mr. wonderful is going to with us. "squawk box" is coming right back after this.

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welcome back to "squawk box. rick santoli live here with breaking news and this on continuing claims for initial weekending october 1st, expecting a number just slightly above 200,000. we ended up with a bit more than that 219,000. and that at least for the moment followed 193,000 before revisions. 219,000 is the highest level since the last week in august when it was 228,000 and on continuing claims always aweek in a arrears

expecting 1,361,000 and that is a bit higher than last look at 1,347,000. i do suspect we could see some late arriving revisions there. but 1,361,000 comps to the highest levels since just two weeks ago and it was 1,376,000 that is a lot of numbers there isn't it but the irony is that we're supposed to hope for of course higher claims to push the fed further away so they don't break the economy to fix what they broke to start with. joe. back to you. >> all right, rick thanks steve liesman joins us now with more steve, what do you think >> i think that was well said by my colleague in chicago there. before they break what they broke to start with. real quick on the claims numbers, i need to see it go higher and stay there. there is this potential and i

think the document transition process where some industry shed workers and get picked up because the job market is tight. i'll give you a preview of what we're expecting tomorrow 275 is the consensus yet the big decline in the jolt survey ort job openings down by 1.1 million. that is kind of what powell wants to see is the decline in job openings with still job strength and adp suggested that could happen and then the two numbers on the bottom services above 50 on the employment index and manufacturing giving it up, down 5.5 and below 50 and really quickly on what rafael bostick said, he said yesterday, if economic conditions weaken appreciably for example if unemployment rises uncomfortably it will important to revisit the temptation to react by reversing our policy course prematurely. he wanted to get to 4, 4.5 and

look around and then keep going with rates up to 4% and by the end of the year and see what impacts those rate hikes have on the economy, joe >> steve, is it time for -- things that are going on in your world right now change hourly. it seems like, didn't it >> it is interesting >> i'm not -- i did have a couple of days off for the holiday. but it is a good point because you know i've been doing this for a long time and i know people are losing and gaining a lot of money tu still interesting totry to figure ou this economy and where it is going and how it is going there. this fed policy story of getting it right and getting up to this level and the impact on the economy and a guy like bostick who is not a died in the will

hawk saying you know what, we'll look at this unemployment number and we're going to keep hiking last week i heard that even if there is a recession, we are going to keep hiking so there you go. >> i was talking about it earlier. what occurred to me. they waited to see the whites of the eyes of inflation. this-r -- are they going to wat for something bad -- do they to do something before they break if and say oh, my god we broke it or do they know what they've almost broken it. >> look at what happened in england. the tightening. >> that is what i'm saying. >> and you'll note that my question to powellat the last press conference was, mr. chairman, you could see yourself getting to a point and then pausing and he sort of said yeah but not at this point. i think there is a lot of -- a lot of stuff out there, joe. i was talking to someone in the house market yesterday, there are some interesting things that are happening now.

when you have housing that you bought at a 2% rate on the commercial rate and now those commercial rates are 4% or 5%, not sure how much of that housing and how much of that commercial real estate makes sense at those rates so you have people that could be laying a lot of people off, you could have stuff that could go into foreclosure or taken back. so these are interesting times to watch and you're right, this idea of something breaking in financial markets. >> anybody could re act to once the inflation is here and once it is broken if we want someone that could make predictions about the future but their predictions about the future are the hardest one to make as yogi berra said. >> they're hard. >> thanks. >> look at my friend kevin over there. >> he has the black suit and black tie. red pocket square. some things don't change. >> tell him i need some hors d'ouvres. 'l on the other side of the brk. wel dig into the big market

moves. stay tuned you're watching "squawk box" on cnbc ♪♪ ♪♪ be ready for any market with a liquid etf. get in and out with dia.

let's talk marks now as investors pars the latest economic data in fed speeches, all of these for clues about where the central bank is going next and whether it is setting up a policy pivot. joining us now is julie beale, senior research analyst at cane

anderson and red nick and with us is kevin o'leary julie, we've been -- we have deja vu. i'm on yogi berra watch. we have deja vu all over again that is why we have the july rally for hopes for that are these false hopes again or is the economy in a different place where a pivot might be something to think about >> i think these are all false hopes again. i think every single fed member that comes out there is firm in saying they want to see rates higher because they want to see inflation be softer and that makes sense nominally we're at a high level and employment is still healthy and strong so that buttresses their argument for continuing to raise rates because we don't want to enter the 1970s with

s stagflation where it comes back and it caused a lot of uncertainty and turbulence in the markets. >> the jobs numbers, they're already old. and i just wonder if there is any humility in any members of the fed including jay powell on the transitory stage that we were in and how certain they were at that point i would question hi cen-- questy certainty now. didn't they learn from -- they don't know didn't they learn back then they don't know and it should be more data dependent. >> agree with you. but i think they're going to be chastised in the other direction where the mistake that they now want to make is to overtighten because they were caught -- >> this is the economy we're talking about. it is just -- people that are working and -- yeah go ahead. >> it is important to remember that it is the dual mandate is inflation and employment is not

the stock market so i think it is critical to remember that. >> i'm not thinking about the stock market we have nice employment rate and we have some wage gains and they're perfectly willing to go to 4, 5, 6, 6.5% unemployment. oh, sorry, we've had crappy policies and you people have no jobs now but you need to do this to fix things. to seems like no way to run a country. what do you think? >> so, at the end of the day, i think -- >> what about at the beginning of the day. >> 75 basis points is coming it is built into the market already. so far it is had no effect on inflation. still north of 8%. so why would the fed stop. i think people think that the fed is going to cause are dreaming and so as investors you have to make a decision. you can't time the market. you know that there are days when you make 2.5, 3% gains and

you don't know which one and at some point you'll get that he's slow down and then you'll lose 30% of the gains i can't control the fed. no one could control the fed i'll tell you one thing that is not disturbing methat is reall perplexing me. i have data every week on top line revenue and cash flows of private companies. over 50 of them. we are supposedly slowing down we're supposedly in a recession. >> but you don't see it? >> nowhere nowhere do i see it. >> and there is some weird irony where ceo's say i don't feel it now but it is coming later that is where you are. >> the fed in its dialogue is telling me to reduce my capex or my inventory and telling me to stop hiring people. >> and by the way, that seems to be working. >> except i don't see it i should see it. i get a weekly revenue weekly cash flow we've had the best quarter ever.

17.5% pretax cash flow when before the pandemic is was 15 the economy is still working so it could take another 75 basis points >> julie, where do you see infla infla inflation ingrained. opec is not helping. we could see the energy complex re-emerge as a real problem. but other than that, it is in this post pandemic labor market. is that the way it is going to be for good now. it is going to cause a wage price spiral or is it justgoin to slowly dissipate and we'll go back to normal >> i think the largest challenge actually is that it is in shelter. and that is so slow to re-set and the thing is that if you think about where we are in terms of housing market, sellers are not really ready to reduce their prices even though affordability has absolutely collapsed with mortgage rate where's they are so it is going to be very hard for people to kind of trade in

and out of their shelters and so high prices is going to remain pretty sticky. so i think that is actually the biggest challenge, is that without shelter getting meaningfully easier for people, i understand people are excited about apparel being discounted because we have so much inventory but people could choose not to buy new clothes, they need to live somewhere. so that is why the fed is so concerned about inflation because it is in stickier categories like wage growth and shelter. >> i have a question about this narrative on inflation which nobody seems to ask. you print $6.8 trillion in 30 months and then more spending bills. what the hell did you think was going to happen? like, of course is going to be inflation. maybe the answer is stop printing money whatever the bill is called, whatever inflation, that and that act, that is all -- stop printing money. >> or spending it.

>> and if you don't want inflation, stop printing money it is that simple. so i think after the midterms, i don't know what will happen but there will be no more bills about anything. >> we need -- >> except no economy on earth has ever done what we did in 30 months ever. and then oh, my goodness we have inflation. well no kids we have inflation now you could turn back that clock a little bit by just stop spending >> why is a dollar, should be worthless. gold is at 1600. >> at times of war and risk, default currency is the u.s. zollar and if this bill gets passed on the stable coin transparency act the dollar is going to continue to be more valuable and that is going to mark up soon. >> i notice you're here at work not at home in your naked from the waist down like you normally are. >> in pants today. >> you're back in here so where is your big -- no one

is ever coming back. did you say events systems are not good in the office for covid. that is your reason. >> i wanted to come back in here today so i could be abused by you. that is it >> mission accomplished. >> now he's like i can work from home >> julie, thank you. kevin, thank you for spending some time with us. it said right there, on set. like people are supposed to do if they want to get paid jim cramer is coming up in a second oh, then we're going to talk markets with jace tren ert from strategas >> and he used to be at isi. so it is great we'll be right back.

welcome back to "squawk box. want to get down to the new york stock exchange jim cramer joins us now. mr. cramer let's talk twitter we keep talking elon musk all morning. what do you think happens at this point. >> i want to know will elon musk atone? >> will he atone that is the question will he atone. >> well, look, i think ats with a bunch of lawyers in the last two days and the answer is he's just going to hold everything and he realized that that he made a big tactical mistake and not understanding the delaware law favored the incumbent and brett

taylor made an impassioned case, the chairman, that there is no -- nothing here to even argue about. and that is what happened. it wasn't like he suddenly realized well holy cow, i really want the asset he was going to have to pay no matter what and this is from a group of people that do nothing but practice in that still wort, though, here at this point, becky, we were talking about carl icahn, dan lobe, look like they've made a lot of money, at least on paper. would you put on a new play right now if you could >> carl icahn came in because he thought the company was worth a great deal, not because he was betting on the merger. and i think that's significant, because i think that means that you can buy it underneath, but there's not enough vig at 50 they just don't make enough money. i would not because it needs to be lower for me. jumped right up. the people i know who practiced in that court thought that musk

was -- was making ill-advised campaign to get the stock price lower and that there was no reason whatsoever for the people who were on twitter to do anything other than say, you made a deal. now you can't break it so, i don't want to arbit, but i think that you can definitely say it's going to happen >> we were talking to a bank analyst earlier this morning because we're going hear from some of the big banks. do you want to own the banks right now? >> yes yes. >> you do? >> i do. i think jamie dimon understands it's not good the way he talked, that he makes a fortune on everything from cds to your credit balance i believe that wells fargo, cha charlie is going to be bullish i think brian monaghan is going to be bullish. i don't know citi's posture, but these are all significant, and i think that jamie dimon is aggrieved about where stock is, and i think charlie thinks the stock is ridiculous. >> oy, jkaim cramer, we're going to see you in just a couple minutes. "squawk box" will be right back. for your full financial picture.

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stocks set to give back some of their impressive gains from earlier this week. the futures are pointing to lower opens, but we're well off the lows of the session. dow's down by about 86 now we've been down by about 250

now. s&p is down by 10. the nasdaq off by 19 joining us for more is jason, the chairman and ceo of strategas research partners, which is a baird company what do you think? are you long the market overall here you short the market what do you think about these wild swings we've seen >> becky, i'd be more inclined to be short than long here i mean, if, i would say, if you have an intermediate to longer term perspective, which means months to a year, something along those lines, next week or so, you know, the lord only knows. i think there's been a big short covering rally but i think the fundamentals are really setting up for more -- certainly more volatility, and i would say probably lower s&p 500 when all is said and done. if you look at profits, economic growth, the fed, monetary conditions, all the rest of it, i still think it's a very tough set-up >> are you concerned about

things getting stretched in the market, things getting broken? or you're just looking at this from the fed not being done with raising rates, and the market just getting hopeful about that being the narrative here >> yeah, i mean, i think -- first thing i would say is, it's a strange circumstance when people are praying for a financial crisis to get bullish on equities. >> i think so too. >> i think -- i mean, that's work -- that has worked. so, you know, you can't blame people but i think the problem now is that inflation is sufficiently high, and stubbornly high, enough so that the fed -- i just want to say to investors, it's not about you. the fed, i think, right now, they've made it clear, their focus is on price stability. they got started a little too late after -- obviously, after the pandemic and now the main focus, really, they have a single mandate, which is to get back to lower inflation. and so, whatever -- wherever the chips may fall as far as the

financial markets, i think, is where they're going to fall. the which thing that you have nn yet, if you think there's a decent possibility of a recession in the next two years, which we do, have been lower earnings and so, in a typical recession, earnings fall 30% on average the median is 22%. that would give you earnings per share in the s&p 500 of about $200, and you could do the math in terms of whatever multiple you think that is. 15 times, 16 times but that gives you something more like 3,000 or 3,200 on the s&p 500. we're not going to get there all at once. but you know, to me, that's kind of where the trend is, until i see some sort of meaningful change in the basic building blocks of what drives shareholder value. >> so, jason, if you're correct, that the fed has a single mandate right now, that is purely getting inflationary costs down, and i think you're probably right, if that's the

case, we're going to be looking very closely at the jobs report tomorrow my guess is that if the number is weak, the market will rejoice and think that the fed's going to ease sooner rather than later because the job market finally looks like it might be turning over but if you're right that it's only inflation that matters, those would be false signals >> i think so. you know, and again, i'm not a trader, so i wouldn't stand in front of it, but i think, in terms -- we're trying to tell people, from my perspective, and we have chris and a technical team here, they're very good at getting the short-term swings right and helping people get those right, but from my perspective, the fundamentals would suggest that you are likely to go lower, and i think that, again, it's -- the fed is not particularly worried about the financial markets. i know it's been a -- it seems like they are, because they have been since it -- it was a greenspan put, then it became

the bernanke put and the powell put, but there's no put, in my opinion, until you have something that changes the fundamental outlook for inflation, and that has remained sticky for a variety of reasons. >> very quickly, in 20 seconds, what would you buy, if anything, in the equities market is there anything that's immune to this? >> we like energy a lot, and i know it seems incongruous with the expectations for recession, but in our opinion, there are structural reasons, particularly our environmental policies, globally, that are causing a structural shortage in oil and natural gas. and so -- and you layer on top of that, opec plus, it seems to me that energy is going to continue to outperform as it has through the last two years >> jace, thank you good to see you. >> thank you 30 seconds to take a final check on the markets, which are down right now they were down yesterday too

actually turned positive for a while, but closed down but this is not as bad as some of the earlier levels we saw we were down a couple hundred points now down just 77 >> the sun's out today >> there's no rain no rain in the forecast either i think the weekend might be a little better. it's going to warm up a little it will be all right make sure you join us tomorrow, which i'm told is friday, and jobs friday. >> yep >> "squawk on the street" coming up right now ♪ good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer and david faber. premarket does trim some early losses as jobless claims come in at the highest since august. ten-year yield, 3.75, four more fed speakers today our road map begins with oil extending gains as higher energy prices could be on the way on the heels of that production cut. but reports signalled renewed drilling in venezuela, perhaps, might be on the horizon. plus, pressing