>> okay. we're going to leave the conversation there we appreciate it thank you so very much >> thank you >> final check on the markets now. we have moved from triple digits in the red we moved to red. 20 points off. s&p 500 off about 8 points what a three hours this has been >> the headline is you do like crocs. >> i do like crocs tune in tomorrow maybe i will wear them good tuesday morning welcome to "squawk on the street". premarkets trying to stay positive after four straight losses for the s&p and tphas dock nasdaq. a road map this morning begins with rising risks. jamie dimon delivering serious economic warning and the bank of england having

to intervene again plus, we are keeping an eye on meta shares >> and let's go over to taiwan where taiwan semi is adding to the stocks more than $240 billion has been wiped out from that sector's global market value. >> let's start there the market is trying to snap this four-session losing streak. jim, we talked a couple days ago how he thought semis would have to lead. stocks down, in two days, 9%. >> there is something a lot of people are missing, except the people selling taiwan semi, which has an upcoming analyst meeting that you could probably get a different view there are a lot of people who very quickly said there's actually nothing to do with what the president is doing with china. really doesn't matter.

and then there are other people i know who just said, look, they're saying there's going to be licenses. they're not going to grant them. and this is a chokehold not just on what could be used militarily but on their cloud and high-performance computing so if you make anything cloud and high-performance computing and you're selling it to a company who only sells it to china, or if you're taiwan semi and you're making it, well, forget it. so the question is -- and, david, you know what the toughest thing is about this administration, they're not that coherent about what they mean. but they can easily, if they want to, say we have an upcoming meeting after the coronation we're not going to create any licenses >> all i'll tell you this this morning i had a conversation with a senior leader at one of the larger asset management firms. as i will often try to do, what are you worrying about

what's on your mind. china/u.s. tensions. that was the number one. >> absolutely. >> actually, it surprised me >> china/u.s. tensions and they are ceaseless someone in the military yesterday said isn't it interesting that we don't have that much luck with tariffs in changing their behavior. so now we are switching militarily you can disarm a country by basically saying we're not giving you the key parts they did that with asmlf but this is a potential shutdown of the cloud in china. and that's frightening to any country. so they're hitting them in the bread box. >> what do you mean shut down of the cloud, though? they are still capable of technology advances in that country. >> the high-performance computing chips are all

american that's just something we do well we have tremendous ability and have intellectual property in the companies like lam, asm, which is dutch but we control it >> it is dutch. >> right. but we have complied a lot of people say, listen, secretary mondeaux, who might end up being treasury secretary, she's not -- she said we just gave these guys billions of dollars to build here. in return, i mean, come on so the tensions are real the assurances are bogus >> meanwhile, white house on the tape this morning saying the president is reevaluating the relationship with the saudis after opec and maybe willing to work with congress senator menendez calling for this freeze there.

>> their backtrack there, david, is many people say, listen, this is a great ally. and we are acting now as if they are not a great ally >> they certainly didn't help us out with the decision to cut production and obviously it's russia signing onto that. >> how much, david --. >> and that seemed to be a help to the russians, which is not something we're focused on trying to help >> okay. so think about where you just went russia, oil, china, taiwan buy the market >> we haven't talked about rates yet or the two-year. >> but then you come in, like yesterday, and there is this weird futures move traps people they get all excited it goes down quarter to 3:00, people get excited again, and then it goes down how about the best thing to do is wait.

how about just wait. when is that -- now, on twitter people say i can't believe that cramer is so equivocating. i'm waiting. i have to put my self-employment, my money to work every month people on twitter, because i want to see. now, it's entirely possible that, you know, don't pass go, don't pass 200 i'm with you on the game of monopoly but i'm getting 4.5 to wait. that's pretty good money >> actually, interesting piece in the ft, why i'm finally warming up to bonds after many years. relative attractiveness there. there are reasonable alternatives >> right i deal with this maureen chevron. i call her the ceo of my wife. my wife is ceo of everything and she said, look, we do this automatic investment into vanguard for s&p funds, which we're allowed to do.

and i said, well, whoa let's -- i have an idea. can i get 4.5? yeah well, i don't know >> no, listen. that's our bond market we haven't even talked about the uk bond market, which is showing signs of volatility far in excess of anything we're seeing given lack of lid weudity, the bank of england trying to help the journal had an interesting story about collateralized loans. they needed to be sold by investors in the uk. got to keep an eye on that obviously it's not anything comparatively compared to our bond market. the bank of england is working hard there to make things stay in some equilibrium.

>> remember in the twilight zone with the guy had the eyes. well, i have so many eyes. >> i didn't say all eyes i didn't do that >> yeah. someone could say well you liked it -- no i have been pulling money out of missed market at chapel draft. >> look at that move. >> can i just say jamie dimon was a little more nuanced than we're making it. >> the pound is down for the fifth straight day they are adding index-linked gilts. dimon's general point yesterday is it's problems in europe that the u.s. is going to import. that's what is going to lead us to a recession, likely he said in the next six to nine months here's what he said. >> stock markets where do you see the drop for the s&p 500? >> oh, i don't know. it may have a ways to go

it really depends on that soft landing, hard landing. since i don't know the answer to that, it's hard to answer that it could be another easy 20% you know, i think like the next 20% will be more painful than the first. rates going up another 100 basis points it will be more painful than the first 100 because people aren't used to it when it's all said and done, he will say i don't know. >> people are negative saying, listen, if they're below 200 and we stay 15 multiple, that is down 20% s&p it doesn't mean it's going to happen but it is one camp that seems to be all he embraced >> i don't mean to be definitive on this. what he said is he did not concretely predict this. he didn't. look, i go home and my wife says you hear jamie dimon said it's

going down 20% and we'll have a recession. i said, no, he said it's possible he put it as one of the -- i said, look, why are you -- you're defending him no, i'm not defending him. i'm saying if you listen to his words, he very easily said, listen, i don't think it's concrete he's not predicting. you tend to think jamie was once again lowering a boom. and he did not it's within the realm of possibility. >> unfortunately, so are any number of other things, including the use of a tactical nuclear weapon those are not words i think i would say in the realm of possibility >> there is no fighting in the war room, david. it's amazing >> toe to toe.

>> slim pickings >> you come in and say putin is firing missiles everywhere >> everywhere. >> and then you read a piece which said he's almost out of missiles but then you know ukraine is almost out of missiles ukraine is doing well because they have borrowed tanks and then you know russia beat germany in part because of the rainy season that's about to happen but does therefore ukraine beat russia because of the rainy season how many eyes do you need? >> 20. >> mahomes has 20. >> he is like a self-driving quarterback. >> he has that thing spinning around his head. he can industry all -- >> i want to say something definitive i had kelsey last night.

there you go there's something. jamie did not correctly preticket them, i definitively did. >> sharply being uncomfortable, the fed -- others would respond you have to do it now before it is politically untenable that's what the journal is saying the last couple of days highlighting the risks of overshooting this is what brainard had to say at the business economist conference yesterday >> monetary policy will be restricted for some time to ensure that inflation moves back to target over time. it will take time for the cumulative effect of tighter monetary policy to work through the economy broadly and bring inflation down in like of elevated global economic and financial uncertainty, moving forward deliberately and in a data-depend manner will enable us to learn how economic activity, employment and inflation are a justing to the cumulative tightening in order

to inform or assessment of the path of the policy rate. >> is that true? easier to hike and hold than it is to keep hiking little by little over time >> well, i think we're all afraid there could be something catastrophic if something moves too fast david's department floating rate debt i think the optimism is tomorrow we get a ppi number. and the the ppi number is soft, then people jump to the conclusion that they're further along, david it does always start with the ppi being soft >> all right maybe we get a bit of a rally if that number is soft. >> it's called a bear market >> it's the same conversation every day. but there are a host of other concerns >> you know what rings a bell? >> what? >> build-a-bear. >> symbolic >> possibly. >> we are building on something. it's a bear market >> no. actually i was just -- >> just using the bear analogy

i have to talk about the bear on the tv show. >> bear is great >> rocky companies going way down wes westlake, way down, eastman, axta ppg repronounces a bad number yesterday. sherwin-williams going down. zoom, get out of zoom. coin, don't fall for it. kkr going down and then be careful about valero disney doesn't deserve to be up here >> all right, all right. >> lulu, hold the buy. >> marvel amgen. service now. >> these are all companies -- service now, i know. except for service now, they are all companies that have very little to do with the business

cycle. that's what people want. a little exposure to the business cycle that's reasonable. when jamie dimon does not say there will be -- >> he didn't say there isn't but he didn't say there is it could happen. >> the dow was at 11,000 take your money pack he was never heard from again. except he's sitting next to me yes. i knew you were going there. news on meta and russia adding meta to the terrorist and extremist corporations gold man sacks chief u.s. equity strategist david kostin. take a look at the premarket on this tuesday we're back in a minute power e*trade's easy-to-use tools like dynamic charting and risk-reward analysis help make trading feel effortless

and its customizable scans with social sentiment help you find and unlock opportunities in the market with powerful, easy-to-use tools power e*trade makes complex trading easier react to fast-moving markets with dynamic charting and a futures ladder that lets you place, flatten, or reverse orders so you won't miss an opportunity with my hectic life you'd think retirement would be the last thing on my mind. thankfully, voya provides comprehensive solutions and shows me how to get the most out of my workplace benefits. voya helps me feel like i've got it all under control. voya. well planned. well invested. well protected.

new developments involving meta it cuts to neutral from overweight russia's financial services listed facebook's parent to terrorists and extremist they are looking at a 160 target >> yeah. i will push back a little on this facebook itself doing a little better there's no doubt about it that

instagram is not doing as well we know that starting to take shares away from tiktok. wha whatsapp, david looked at me what i said it could be monetized. didn't like the article about metaverse, which i thought was incredibly positive. >> you have been bringing up whatsapp as an opportunity for them it's been an opportunity for a long time. long time since they brought the company. and being a real competitor for reels against tiktok >> what am i going to the? >> you're the number one zuckerberg defender. >> i'm going start lying my research says there's nothing going on at whatsapp metaverse is a colossal joke there's all my nonresearch it is the opposite of everything i hear but why not?

and i don't even like zuckerberg there. here i'm deleting here. i'm taking him down. i'm deleting him >> tkphot do that to mark. he has enough people who don't like him he needs few you're one of his few. in russia, who cares that is a sign of that's a good thing when the russians don't like you >> he's a friend i think he's an acquaintance >> you look like friends there >> that is called footage. >> do i wish him well periodically yes. does that make me a suck-up? yes. >> barclay's cutting numbers across media >> yeah. i think meta is down big from when the pandemic started. and that's important very few stocks are down that big. >> it is down dramatically

listen, they are just focused on the digital advertising market and the market share is so strong they only have one way to go at this point to cut it down >> i'm going to go to something. say we have some level for the feds there are going to be some companies that do better that employment number on friday was about as hot as you could ever have. now, i did not think -- i felt at some level these rate hikes would do something they seemed to have sped up the economy, which is incredible mortgage rates i was looking at properties. david knows i like to accumulate properties it was 7%. that's higher. it's double. >> just buy that two-year. >> the two-year, you waffler, you jack, blank-blank.

i said something positive about larry fink yesterday i said, larry -- they came after me so fast but you know what, i watched their show last night, the trolls it's on at 11:00 they are so well spoken. they use more curse words. but the trolls show, the ones who attack me -- >> i'm going to watch the chiefs tonight. >> hail to the chiefs. you can watch the panthers all you want >> when we come back, cramer's mad dash, countdown to the opening bell a look at the premarket before the opening bell in about seven minutes. don't go away.

the new iphone 14 pro is amazing. the camera is incredible. and you'll get our best deal. nice, but i can't accept it. unless every business gets the best deal. on every iphone. uh, actually... we already do that. the plumber with the ascot! big bjorn, little bjorn, too! the caterer who really cares. every business should get the deal! we make a good team. every business gets at&t's best deals on every iphone. including up to $800 off iphone 14 pro. (♪ ♪)

we planned well for retirement, but i wish we had more cash. they have no idea they're sitting on a goldmine. well they don't realize that if you have a life insurance policy of $100,000 or more, you can sell all or part of it to coventry for cash. even a term policy. we've got to tell them! hey, guys! you're sitting on a goldmine! do you hear that? i don't hear anything anymore. find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com.

we mentioned at the top what a tough couple days it's been for the chips. sure enough. it will lead lower at the open sky works to equal weight from overweight opening bell coming up in a few moments. catch us any time, anywhere, listen to and follow the "squawk on the street" opening bell podcast.

thinkorswim® by td ameritrade is more than a trading platform. it's an entire trading experience. with innovation that lets you customize interfaces, charts and orders to your style of trading. personalized education to expand your perspective. and a dedicated trade desk of expert-level support. that will push you to be even better. and just might change how you trade—forever. because once you experience thinkorswim® by td ameritrade ♪♪♪ there's no going back.

all right. we get started with trading two minutes from now at the new york stock exchange we will squeeze in a mad dash. intel we talk about a lot. you don't usually have anything to say about it. >> why should today be any different. >> as i point out many times, you have been right. >> good to be right >> wells fargo, too early to call the bottom. i like that. pc shipments, are they so bad

they're actually good. meaning bottom there was a note that came out yesterday. worldwide pc shipments declined 19.5% in the third quarter 2022. david, it's a collapse it's just -- this quarter results could mark an historic slowdown for the pc market supply chain disruptions, blah, blah, blah the pc market has collapsed. why would you want to buy intel? you can see through the collapse no >> right >> so i am still -- >> down 20% number >> they have a dividend. i know some people are saying they don't have the cash flow to maintain the dividend. the company would totally disagree with that everybody involved with pcs are telling me i'm too negative. i've been negative a long time at a certain point, you're right >> pelotons or zoom calls, there was an assumption the pandemic was a new normal. that was a significant increase

in the purchases of pcs for home offices and a lot of other uses. that has ended >> right >> and i think that this historic decline of pcs, carl, if you disagree with this, you're disagreeing with facts. like dell down 21% like hb down 27% hp still thinks it's doing well, though if you say that, they will say, why are you saying this? the answer, because it's there >> huge metric biggest drop in 20-some years. build-a-bear workshop celebrating 25 years at the nasdaq br brightcove celebrating its 10th. >> danny myers started an index of companies for me he really liked when i started build-a-bear was on there.

when the market gets too low, i can't talk about that. interesting. >> right opening south of 3600. jim, i don't know whether you think some of the big round numbers are important for semi >> no. i think what we're up against, people want to own a defense of stocks and don't get in the way -- >> even though a lot of them are expensive. >> they don't care a lot of them are priced for a recession. and markets do find a bull market somewhere it's a story that people like. an upgrade of cj i think it was a $1 price target >> merck is not. that fell apart. >> right i'm just saying people want a transaction in biotech

by the way, let me -- >> no. the trend, though, of large pharma buying bio tech has not gone away. >> no. >> but there are plenty of hurdles to big strategics. price is a big one the buyer says, hey, things have changed. we still have the anti-trust issue. perhaps a little less so given certain losses by the government of late. still something that stands in opposition as a possibility and elongating the view. we will see this trend of large pharma buying. >> biohaven selling their migraine drug. it was very important to pfizer for a gigantic amount of money

there is still m&a, carl there is still this. there is still that. what that is saying is there's a lot of nothing >> big premium 53% over their close as of yesterday. >> that's where the money is >> a company that does digital identity, helping people simply access a connected world >> when pepsico reports tomorrow we will find out whether people are buying into the thesis of slowdown pepsico has a lot of raw costs that have actually come down the stock has come down a great deal plastic has come down. aluminum has come down they sell water basically. >> got to wait for margins to do the same >> it should happen eventually

>> they have to bring the jack and coch into america. >> into what >> you know, they have a jack and coch can where they mix the two. >> i don't drink jack or coch. >> it doesn't really matter. there are a lot of americans >> i know there are americans. >> they are testing it they did that with topo chico. that's a seller is >> you are saying they haven't brought it to your market. >> you got it. >> sometimes it takes a while. >> american q3 revenue up 13 from the third quarter of 19 no real color on q4. >> if no >> and jobi delta. >> up 8.5% flying cars we like to call them they are that mobility sector.

a great piece from morgan stanley that i will never really forget saying that the total addressable market for air mobility, which is what we would be talking about here, $9 trillion it still makes me laugh. $9 trillion. hey, listen, it is 27, 28 years away that's what marcus stanley said. the companies are still trying to get all of their s. jobi was a spac. we focused on it >> cathie wood liked that. >> she may have liked that these are quiet too were we have a rooftop deck i go up there and read with the air traffic, so loud. it will be nice when they come in their quiet >> i say coca-cola with the jack coming up 3.2%

pepsico reports tomorrow i look at these defensive stocks people should start focusing on this elf. this is a $2 million stock you say forget about it. it is up nicely. it's cosmetics people use cosmetics when things go bad remember the lipstick indicator? do you remember that >> i do. and look your selfie best. >> i came one that >> i think on jobi, did we mention delta has a deal to invest we didn't tell people the news >> five cities if you're going to fly out of new york, make your way to the airport. >> avoid the traffic

>> uber and lyft share some of your work with us. they are both down we can put them up sharply uber down 9.5% right now the reason does appear to be headlines around the biden administration's gig worker classification proposal. basically, the proposed rules the labor department will apply a test to determine if they are contractors or employees for companies. the test will be how much workers have over how they do their job, how much opportunity to increase their earnings, such as offering new services and if you have little or virtually no control, well, you are considered an employee and if that was the case, the proposal is a potential blow to

gig companies and other service providers. again, seems to be the reason we're waiting for this classification i don't believe we have gotten it as of yet the labor department rule could be out, if it isn't out yet, as soon as today. details haven't been made public the market is getting ahead of it and punishing both stocks >> let me because this programs the administration is pro-capital as sit labor and we're sitting here pretending that the administration doesn't impact stocks they have, let's just say a charleston tphal house because it's not on their mind >> right. >> not like when i met president biden on the train years and years ago when i was going through washington he was telling me owned no

stocks and was almost proud to be a poor senator. people in congress have been tremendous traders >> very good track record. >> just to come back to uber and lyft, labor costs could go up 20% to 30% on this idea that these are not gig workers. they went through this in california already >> right >> and then trying to get certain outs in that state law >> my piece said if you want to know that if you shorted lyft and went long uber, you made a lot of money they are both down right now >> there's been multiple calls on how uber is eating lyft's lunch. >> i think they are just reacting to the two-year

it says the two years the bonds are going higher the yield is not going higher. bonds are higher yield -- >> yes, bond prices go down and yields go up >> people looking at bond. >> a horrible year to own bonds given their price. >> i'm just saying they are very moment rates are not going up. they buy the very stocks they were thinking about selling. because this is the tkrbg and this is a bear market behavior everyone is so hopeful the problem with hope is it it betrayed you constantly. myron preannounced and cut their

forecast horribly. and it's above where that happened so is that -- i want to use this because you love this cliche >> please. >> is that the albatross in the coal mine? >> you could extend to marvel. >> they are not a consumer they're enterprise at the same time, they're semis. so i'm torn. i'm torn they shouldn't be. i mean, the consumer companies are really being crushed that, by the way, david, that piece i gave you about gardner this is 90.

>> bob chapek does not get -- i gets a level of respect for the late rodney dangerfield. >> that is the lowest level since july. >> it's amazing. and this piece is savage it says, okay, but it's going -- they cut it, but it could go to 105. just take it to 80 these analysts who cut and they're all cuts today, why not take the price targets below where the stocks are why don't they do that why don't they just do it? they mean it when you talk to them >> maybe they're counting on the unbeaten record of stocks after a midterm 12 months later? >> or the unbeaten record of the eagles >> did i mention jobi, by the way, really interesting. >> you know what i'm going to do >> it's the love >> hey, lisa, how are you doing some i'm sorry i'm give you a call back

i'm on the show. that's the stuff you do. except for i usually talk about companies like apple >> yes, you to >> you talk about jobi >> if i have to point to something. i added a little value with uber and lyft that's kind of ugly today. >> actually, that was an amazing story. once again, i think if the midterm losses for the democrats are pig, i think biden's agencies go nuts and you will see oil just crushed by the biden administration by the way, jamie dimon -- >> you are very fond of that biden administration, aren't you? >> not to mention some of the new closures in china regarding covid not helping. >> maybe after the great coronation they open things up >> we'll see >> you keep thinking they will >> i don't know. we had a huge spike in covid here all that is going to do is make sure people don't go back to the workforce. 74% intoic in one week

>> covid >> not been paying attention >> shaved a little >> mr. i know. as for the s&p this morning, trying to hold 35.84 let's get to bob hey, bob >> good morning, carl. almost going positive on the dow. the s&p is a half a percent lower than the dow that's a little unusual. that's because semiconductor stocks and other tech stocks have a big market cap waiting in the s&p 500. another one of those days you want to look at the risk on components sort of underperforming. metals and mining were down right at the open. that's turned positive that's good. transport, still can't outperform there's your really weak lincoln the semiconductors consumer staples some of the more defensive names holding up better taiwan semi was down 8% overseas it's done better here. trades here in the u.s. now down

4% kla, holding some sales in china to comply with controls. a new look at 409, asml. we had positive comments from american airlines. that's helping you can see all the other ones, these were all positive right at the open now they are negative. and another reason we can't get real energy even though you had positive comments. earnings on friday jpmorgan will be the big lead-off of course that always is guess what's at a new low? jpmorgan 52-week low. same for citigroup coamerica, 1%, 2%, 3%. global markets have seen a dash to cash recently really the strategists

mentioning how much money has gone out to money market funds this is ubs. withdrawn from global stocks 3 billion from bond funds, 18 billion. a lot of money going into money market funds he has warned against market timing, when to go out and when to come back in. usually it doesn't work. we continue to advise against retreating to the sidelines, especially given the drag on cash from high inflation and the challenge of timing a return to markets. and you put the rest of that in, without missing out on the rebounds that's a key part here the evidence against market timing is overwhelming you have to be right going in and right going out. what happens if you miss the 5, 10, 20 most important days look at 1970, this provided by dimensional funds. if you had invested 50 years, you would have $128,000.

if you missed the best five days, you would only have 90,000 and the best 25 days, 32,000 you have $138,000. nobody knows when the best 25 days are going to be here. this is one of the classic examples of the problems about market timing. again, you have to be right going in, right going out. and, carl, the important thing is nobody knows exactly when the best days are. back to you >> bob, thank you very much. as we go to break, let's check the bond report. we mentioned the 10-year, kissing up to 4% early this morning. backed off a little bit. currently 3.93 as for the s&p, we lost 350084, the lowest day since 2020. we'll be right back.

♪ icy hot pro. ♪ ice works fast... to freeze your pain and your doubt. ♪ heat makes it last. so you'll never sit this one out. icy hot pro with 2 max-strength pain relievers. - [narrator] if your business kept on employees through the sitpandemic, out. getrefunds.com can qualify you for a payroll tax refund of up to $26,000 per employee, even if you got ppp. and all it takes is eight minutes to find out. then we'll work with you to fill out your forms and submit the application. that easy. getrefunds.com has helped businesses like yours claim over $1 billion in payroll tax refunds. but it's only available for a limited time. go to getrefunds.com powered by innovation refunds.

leading the nasdaq lower qualcomm, some of the apple suppliers, paypal, airbnb among the biggest losers offset by amgen. overall, 3585 on the s&p pretty much the lowest intraday level since november of 2020 going to live through that about 10 more times! (laughs) no stress. i just discovered yieldstreet. they vet investments that don't ride the stock market rollercoaster. - [narrator] yieldstreet: private market investing.

- oh, the stock market is doing that fun thing again. news from the future: you're going to live through that about 10 more times! (laughs) no stress. i just discovered yieldstreet. they vet investments that don't ride the stock market rollercoaster. - [narrator] yieldstreet: private market investing.

just look around... this digital age we're living in, it's pretty unbelievable. problem is, not everyone's fully living in it. nobody should have to take a class or fill out a medical form on public wifi with a screen the size of your hand. home internet shouldn't be a luxury. everyone should have it. and now a lot more people can.

so let's go. the digital age is waiting. sllet's get to jim and stop trading. >> bristol-myers was downgraded. you can't keep a stock like bristol-myers down this far. these are the ones they want when i say they, this is what you buy in a recession that's what everyone thinks is happening. so, there you go. >> certainly this imf downgrade of the global economy that just crossed sounds, the worst is yet to come. it's pretty gloomy >> i have to tell you, i never want to be so negative as not to find things to buy, but the bull market is in things like cereal and drugs. accept it. just accept it it's okay. it's happened many times in my career

it happened in 1984, for heavens sake >> how about tonight >> i have the privilege of having julia with a great book, just a great book about women and -- interviewed 60 women. just an incredible text. i have two girls i'm going to demand they read this because it is so illuminating about what women have to go in the workforce. >> jim, we'll see you tonight. "mad money" 6:00 p.m. eastern time. when we come back, we'll talk markets and earnings with goldman's david kostin the s&p low 3580 - oh, the stock market is doing that fun thing again. news from the future: you're going to live through that about 10 more times! (laughs) no stress. i just discovered yieldstreet. they vet investments that don't ride the stock market rollercoaster. - [narrator] yieldstreet: private market investing.

- oh, the stock market is doing that fun thing again. news from the future: you're going to live through that

about 10 more times! (laughs) no stress. i just discovered yieldstreet. they vet investments that don't ride the stock market rollercoaster. - [narrator] yieldstreet: private market investing. good tuesday morning welcome to another hour of "squawk on the street. i'm carl quintanilla, morgan brennan and david faber. we did lose some key levels, including the low -- the interday low we got on september 30 on the s&p. >> we're 30 minutes into the trading session. here are three big movers we're watch, starting with kla,

slighting on a report that the chip tool maker will halt sales and services in china to comply with the sweeping new u.s. export controls. shares are down 2% right now barclays initiating coverage on roblox analysts saying the company's growth may be challenge the going forward as key markets already have high penetration rates. you can see those shares are down 5.5%. finally, american airlines, those shares are taking off. the carrier raising current quarter revenue forecast as well as guidance for a key metric that looks at sales and operating efficiency those shares are up almost 1%. starting to take off >> maybe taxiing we'll begin with the broader markets. the s&p losing a quarter of its value this year alone. the big question on investors minds, of course, is where is the bottom yesterday's cnbc europe julianna tatelbaum sat down with jamie dimon and asked him that exact question here's what he said.

>> stock markets, where do you see the trough for the s&p 500 >> oh, i don't know. look, it may have a ways to go it really sxendz on the soft landing, hard landing thing. it's hard to answer. it could be an easy another 20%. i think the next 20% will be much more painful than the first. rates going up another 100 basis points, so a lot more painful than the first 100 because people aren't used to it and, you know, and i think negative rates, when all is said and done, will have been a complete failure >> joining us this morning, goldman sachs chief u.s. equity strategist david kostin is with us at post 9 good to see you, dk. >> nice to see you. >> whether it's dimon, you yourself cutting targets consistently all year long, would you agree that's all part of a trend >> it's been the consequence of higher rates that's the story, higher rates, lower valuation to the market. we haven't seen a degradation, carl, in the level of profits in

terms of the profit expectations we're looking for roughly 8% growth this year companies have basically been along that track although this particular quarter and we kick off in a big way at the end of the week, we're likely to see earnings growth at 3% you had 12% growth year over year in the first quarter. 10% growth in the second quarter and 3% in the fourth quarter if you take away energy, carl, it will be down around 2% year-over-year decline i think that's a dedriver. mostly it's been rates the idea of the multiple of the market coming from 21 times to around 15 times. that's been the story. the idea of much of the increase in interest rates that's anticipated going forward, because largely priced into the market certainly in the forward market. >> what's your dollar s&p earnings for next year >> want to think about earnings up around 3% you're looking at basically around $234. >> so, higher than some on the street.

>> that would be a baseline forecast the consensus expectations is around 7%, so we're below 7% if you want to sketch out, that's a soft landing scenario thatbasically assumes the u.s. economy decelerates. doesn't tip into a recession that is possible but that's not the baseline forecast right now. and if you wanted to sketch out a scenario of a hard landing, you look at earnings falling by 11%. call that a bid/ask, down 3, down 11. that would be consistent with a contraction in earnings in prior recessions, which is around 13%. a little less. we don't see as many clear imbalances just rates going higher and earnings starting to contract in recession. again, that's not the baseline forecast. >> do you go anywhere near u.s. equities right now >> relative to other asset classes. so, morgan, let's think about that, relative to europe, u.s. is probably more attractive. europe is in recession

earnings will be down sharply next year. a lot of challenges in asia. relatively speaking, the u.s. equity market is a reasonably attractive world in the equity world. then the acronym from tina to tara, from there is no alternative to there are reasonable alternatives with rates pushing 4% on the ten-year and higher than that in cash next year. that becomes a reasonably attractive turn. if you want to think about a trading perspective, the s&p 500 around 3,600 level pretty much where we are now that is fair value at the end of this year. that's three months from now that will give you a flattish kind of a market in a scenario where the economy is decelerating we're decidedly not in a recession right now. just to be very clear. that's a question we often get from portfolio managers. definitely not the case. the labor market is really strong unemployment rate is 3.5%. doesn't mean it will stay at this level going forward the idea of the consumer actually being in a pretty strong position with wage gains,

that's two-thirds of the economy. that's sort of a back drop of why there's in the next six months or so, at least looks like there's a reasonable argument for the market level around 3,600. >> there's a debate around recession. folks like yourself have come on and said, we're not in a recession yet. others have come on and said, no, i think we are why do you think we're not yet, given the fact we have had two quarters of negative gdp and what would you be looking for to suggest we are actually entering one >> the labor market is a key variable and the labor market has been very, very strong and lots of metrics. that would be the sort of first order to look at you can look at whether it's job openings, in terms of the unemployment rate, we can look at the wage gains. those are all consistent with the economy expanding, not necessarily contracting. that is also consistent with the idea of earnings, at least at these levels, kind of maintaining because inflation, which is the whole source of why the fed is hiking rates and the tightening of the financial positions, higher inflation is a

pressure on margins. good for revenues. sales, are nomal dollars but it's a pressure on margins as an investor, that's the number one issue to focus on shifting on what the investor should be thinking about, which are companies in a position to or able to maintain or expand their margins, that is a rarity. across the entirety of the market this quarter, earnings coming up. we'll see margin compression that's likely to also continue to be the case next year i think that's where there's the bid/ask and the debate in the market by how much will margins compress margins are sitting here today at record high levels. that's a challenge for management we hear that repeatedly. that will be the commentary we'll be looking for in the upcoming conference calls that will take place in the next few weeks. >> that's important, whether they can maintain pricing power, demand destruction as a result of rates where does that leave you in terms of the all important s&p number for next year and what is an appropriate multiple on that number?

>> the market now trades around 15 times that is reasonably consistent with kind of the yield gap, if you think about real yields, the level of -- real yields right now are around positive 160 basis point, 1.6%. they were negative 1% at the start of the year. it's remarkable to think about the move that's happened and you see multiples have gone from 21 times to around 15 times. that would be, david, my response the level of the valuation that you can see in the market at this junction, given our rate forecast. in that environment, it's earnings that take you a little higher that's why it's modestly higher, 3% earnings growth to the extent you have a recession scenario and earnings would not be at 3%, but minus 11%. then you see the valuation in the level of the market around 3,150. that's a trough level and a scenario, and maybe, david, that's around 14 times the bulk of the valuation compression is behind us and in this environment, you

know, how do you think about the investment opportunity set in a tightening financial conditions environment. the strategy there has worked well is generally quality. stronger balance sheets, higher return on equity, higher return on capital companies with relatively more stable growth in their business. that's the stocks that tend to outperform in a tightening financial conditions environment, which is decidedly where we are now >> right finally, you had a great piece on midterms. looking at the historically bullish pattern, 12 months following an election. but you think it's not going to have as big an impact this cycle. >> we don't expect major legislation to be passed there's the possibility of more executive actions, things like that, but not from a legislative point of view is not an expectation of ours. therefore, likely to have less consequence in the year ahead based on the forecast of the outcome in november elections. >> we're watching, predicted at

338. didn't even get to china and russia next time. thank you. david kostin. let's take a look at the road map for the rest of the hour, including growing concerns over esg investing we'll talk to one state treasurer who pulled out of blackrock. youber, lyft and doordash a falling. g7 leaders holding an emergency meeting amid russia's latest attacks on ukraine. do not miss my exclusive do not miss my exclusive interview with u.s. army ♪♪ age before beauty? secretary christie wormuth why not both? visibly diminish wrinkled skin in just two days. new crepe corrector lotion only from gold bond. champion your skin. - oh, the stock market is doing that fun thing again.

news from the future: you're going to live through that about 10 more times! (laughs) no stress. i just discovered yieldstreet. they vet investments that don't ride the stock market rollercoaster. - [narrator] yieldstreet: private market investing.

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

another 4% today we're focusing on that top holdings include tesla, zoom, coinbase is another holding. the fund picking up more shares of adobe after it got crushed following its acquisition of rival figma. shares of adobe down 1%. ark buying shares today around

worth $7 million as we see with tech names, everything is trading largely lower given the nasdaq is down 1.5%. >> keeping an eye on shares of uber, lyft, doordash because of a proposed contractor rule that the -- we're waiting on being published from the department of labor. man, these losses have been picking up as we first brought this to you, let's call it about half hour, 35 minutes ago or so. let me give you a little background the department of labor, we're waiting for the actual publishing of this proposed rule but it would essentially lower the bar for employee classification from the current test that was created under the previous administration. it's an interpretive rule, but the key here would be that it basically would make many of those gig workers actually not gig workers, but be considered

full-time employees. the test would consider things such as how much control workers have over how they do their jobs, how much opportunity they have to increase their earnings. and if, in fact, workers have little of either, they will potentially be considered employees. again, we're waiting on the actual publication of the proposal for companies such as lyft and uber, where estimates are their labor costs would rise as much as 20% to 30%, the fact they were forced to alter their business model as gig workers, you can see why they're getting punished in the stock market we'll wait for specifics of the proposal itself, but the market not waiting. >> you have to wonder how much employees -- or gig workers would welcome this employee designation versus those that wouldn't, who maybe pick up this type of work on the side. >> without a doubt sorry to cut you off we saw a similar debate in california where they passed a

similar law. there was a lot of pushback from the drivers themselves saying we like the flexibility that comes along with this. we don't want to be considered employees. but effectively the biden administration seemed to be taking that same approach. gig workers, it's going to narrow the definition. >> just when some of these names are either on the cusp or turning profitable based on certain metrics we might be talking about, as we've come out of a recovery that's hit them so hard you talk about 20% to 30% costs, it's eye-popping perhaps explaining the reason for such strong selling in those names today. >> driver availability certainly got a lot better last time uber was here, talking about maybe the next goal being investment grade and who knows. maybe one day returning some capital. certainly between the two, uber and lyft, the street has definitely been on the uber side rbc downgrading lyft last week >> i want to make sure the proposal is out.

we were having a hard time getting ahold of it. we'll take a quick look at it. i think the market is responding to obviously what is in that proposal >> after the break, do not miss my exclusive interview with u.s. army secretary christine wormuth. first, taking a look at shares of leggett & platt, pointing to economic conditions weighing on demand and into the current quarter shares are down 9% back in two. ♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq

yo

- oh, the stock market is doing that fun thing again. news from the future: you're going to live through that about 10 more times! (laughs) no stress. i just discovered yieldstreet.

they vet investments that don't ride the stock market rollercoaster. - [narrator] yieldstreet: private market investing. . ukrainian president zelenskyy addressing g7 meetings in a virtual meeting, following russia's latest missile strikes over ukraine kayla has the latest. g7 leaders are expected to reiterate their commitment to ukraine saying once again they will support the country and its sovereignty as long as it takes. and discussing new energy measures to unveil in the coming weeks as well. nato secretary-general today

saying russia is increasingly resorting to horrific attacks on civilians and infrastructure, and that russia's nuclear forces are being closely monitored, but so far the alliance sees no change in russia's nuclear posture. seven months into the war, more questions about how it will end. today nse spokesman john kirby was asked if the full removal of troops is the only off-ramp? >> we believe that mr. putin should remove all his troops from ukraine short of that, and clearly he's shown no willingness to do that or sit down at the negotiation table, so short of that, we have to make sure ukraine can continue to succeed on the battlefield so when it gets to the negotiating table, mr. zelenskyy has the leverage he needs to succeed in negotiations as well >> to that end, the u.s. continues to discuss sending more air defense systems to ukraine, which presidents biden and zelenskyy discussed yesterday. the u.s. since this summer has transferred more than 1400 stinger anti-air systems and

announced another package with eight new advanced surface-to-air missiles, though most of those have not yet been delivered. in the coming weeks the major democracies will be face-to-face with vladimir putin at the g20 they're still trying to coordinate their approach with some leaders suggesting they walk out when mr. putin speaks all that being said, the financial and foreign leaders, when they have met as a precursor to the g20, they have chosen to rebuke moscow with their words and not actions through prepared speeches. and not with a show of force morgan >> kayla, following that closely for us, out of d.c we're going to stay with the subject of geopolitics i sat down with u.s. army secretary christine wormuth as the big conference asua in d.c we discussed everything from the rising risk of nuclear conflict to the army's modernization priorities as it looks to deliver two dozen new weapon

systems to soldiers in the field in 2023. take a listen. >> we need to be able to see the battlefield longer and better than our enemy we have to be able to mass really powerful combat forces at the time and place of our choosing we have to be able to protect ourselves. we have to be able to share data rapidly. these are all challenging things to do on the future battlefield, which is going to be complicated. so, to do that, we are developing a whole range of new capabilities and we're really transforming our army organizations >> of course, one of those capabilities, and i bring this up because certainly investors and wall street analysts have been focused on, it has been the flraa competition. any update on when we might see a selection on that? >> that, obviously, morgan, is going to be a big, important decision we're going to take our time with that to make sure we get it right. i think it will be a little bit more time. >> okay.

and in terms of other priorities, the role that some of these new technologies, things like software is playing. >> software is really important in a lot of these new systems. one of the things the army has struggled with in the past is we got locked into one vendor's software system, basically now we're trying to design our systems to have open architectures so we aren't just one vendor and we can swap in and out new software more easily a lot of what's going to make our new systems more powerful is the software inside of the hardware >> when we look at ukraine, and the last time you and i sat down together, russia had just invaded ukraine maybe a couple weeks prior. what are the lessons learned so far? how is it affecting the way the army is thinking about modern warfare and the purchases you might need to make >> i think of what we've seen in ukraine validates the idea that are in our new doctrine. in particular, you know, we've got to -- i think what we see in ukraine emphasizes the need for

combined arms warfare. not just using armor and tanks, but combining it with infantry, combining it with attack aviation we have to be able to do all of that at once another lesson i think from ukraine is the real pronounced threat of drones and other kinds of aerial unmanned systems so, that's something we're really working on, is developing better counter-uas capabilities. >> we've seen certain missile lines, the production there begin to reramp. there are reports over the weekend from the journal that the howitzer line from bae is potentially poised to reramp as well do you expect to see more of that given the fact that ukraine has thrust some of these, i don't want to say traditional, but some of these well-used and rong-standing weapons programs back into the spotlight? >> i think ukraine shows the importance of having deeper magazines and more nmunitions. we are working hard to ramp up

more production, whether it's gimlers, whether it's himars in terms of bae, i would direct you to them to see what their plans are. but we are absolutely trying to work hard with industry to figure out how to both increase capacity and speed up production >> in terms of ukraine, we've seen the commentary from putin out of russia in recent weeks, president biden just recently saying that the risk is very real probably the greatest we've seen for our nuclear conflict in 60 years, since the cuban missile crisis financial markets have largely shrugged that off so far from your vantage point, how acute is that possibility? >> i think we need to be very concerned about that and i have no doubt that the president and his closest advisers are working hard to think through what are the possible situations that might arise and how the united states would respond to it. i think you see with, you know,

the series of massive missile strikes that the russians unleashed on ukraine overnight, i think putin is starting to feel a little bit backed into a corner so, that certainly means, i think, the possibility of escalation, but again, i am confident we are thinking through what our options would be in that kind of a situation and, most importantly, messaging privately to the russian government, to putin, that it would be completely unacceptable to cross the nuclear threshold >> so, russia certainly the threat that is on the geopolitical stage right now, china, longer term continues to be the strategic threat for the u.s., the pacing threats what does that mean from the army standpoint? what does the u.s. army of the future to be able to counter china look like? >> i think the most important thing we have to do as an army to deter china, for example, is really make clear what combat credible army forces can do in the indo-pacific with our allies and partners so, the primary way we're doing

that is through having forces in theater, exercising, operating with our allies all around that region through pacific pathways and also demonstrating that our forces will have combat credibility through the new systems that we're developing. in particular, the long-range fire systems like prism, like midrange capability, like the l long-range hypersonic weapons. >> some new systems, what's the timeline how quickly does that happen >> we'll get a number of the long-range prototypes fielded in '23. for example, you'll see prototypes for prism, for midrange capability and the long-range hypersonic weapon the ground equipment for that is already -- is already fielded with a unit that's been training with it for about a year >> and, of course, we know that russia has been testing some of its own hypersonic capabilities on the battlefield in ukraine. when you talk about some of these missiles and anti-missile

systems, we'll talk next generation products like hypersonics, very much in focus right now. very mentioned himars, that is a lockheed martin made product that's been successful on the battlefields, being used by ukrainians right now in this fight to thwart and counter and push back russian forces in terms of the army's laundry list, mind you, amid what has been a flat budget over the last couple of years, for modernization, when you talk about unmanned systems and drones that are being fielded, you're talking companies like aero aerovirnment, competitions like titan, which is focused on software and data integration and a competition between raytheon and palentire, which is software going after some army contracts. in terms of everything we are see play out on the battlefield

in ukraine right now, and this risk of nuclear conflict, whether it's the army secretary, wormuth talking about, you know, conversations, diplomatic conversations, whether some of the other folks i've spoken to in recent days, recent weeks, it does seem that dialogue is very active right now behind closed doors. but it's a very real risk. it's the type of risk where, heaven forbid, as one person explained to me, if putin were to detonate a tactical nuclear weapon, it could be -- it could be as literal as which way the wind blows in terms of nato having to react and get involved and, thus, the u.s. into the magn magnitude. you don't want to see that play out on the world stage nobody wants to see that. >> nobody wants to see a tactical nuclear weapon used in any way, shape or form even the discussion of it is, frankly, frightening it's deemed unacceptable,

morgan, but obviously the administration is not going to tell us what countermeasures they will take you have to assume they are at least letting the russians know through the back channels. >> oh, yeah. pet rouse was asked on abs saying it would be massive, the response >> yeah. and keep in mind, just in terms of from an army perspective, a lot of the soldiers, american soldiers deployed to the region, war fighters in the region right now in eastern europe and part of nato, are army. so, when you start to talk -- to shift, when you talk about recruitment, which we touched on yesterday and which i spoke to secretary wormuth about as well, it makes the need for the service to be able to recruit and enlist new soldiers that much more important, right when we talk about readiness and the u.s.'s ability on the world stage to counter and deter any kind of conflict >> coming up after the break, why our next guest thinks the

president should act now on the wrecking ball dollar first, though, check out some of the top gainers on the s&p this morning as amgen is benefiting from the upgrade over at morgan stanley. they go to overweight target from 257 up to 279 we're ba itwckn o. this... is the planning effect. this is how it feels to have a dedicated fidelity advisor looking at your full financial picture. this is what it's like to have a comprehensive wealth plan

with tax-smart investing strategies designed to help you keep more of what you earn. and set aside more for things like healthcare, or whatever comes down the road. this is "the planning effect" from fidelity.

checking in on the markets, about an hour into trading, we took out the september lows earlier this morning currently at level, 3584 dow much milder losses the dollar is a huge story, as you probably know. the index this morning 113 our next guest says the president should act now on the wrecking ball dollar, saying it's rising far higher than one would expect based on fundamentals joining us here at post 9 this morning, rockefeller international chair. >> good morning. >> you say it's a wrecking ball,

why? >> the popular narrative is the fed is increasing interest rates. other central banks have also been increasing interest rates if you look at interest rates differentials, the dollars increase or surge over the last few months is not explained by that these are fundamental factors thatusually drive currency markets. that's not happening anymore this is a fair trade going on. the doom loop building we're all scared it's not a statement on america's economic strength either people are selling their assets and just holding off by keeping it in u.s. dollar because that's the currency to hold it's become a self-fulfilling prophecy in a way. something needs to happen to circuit break this otherwise the consequences for the global economy are damaging the dollar's movements are a proxy for global liquidity. >> the answer is to engage in dollar selling >> yes, that's right i think it's very important for

america to realize it's in its own interest to support such a move a popular narrative is because inflation is high, you need a strong dollar to offset that as i argue, if you look at the research, it shows that only about 12% of america's gdp is in imports and 95% of america imports is in u.s. dollars the impact is minimal. here if you have financial contagion in other parts of the world, it will come back to bite america and america's economy. i think it's in america's interest to lead a g20 type intervention other central banks and policymakers around the world will be happy to join it america has been reluctant to take such leadership if we circuit break the dollar's unusual strength here, i think that's a good release that you give to the global economy while continuing to increase interest rates to fight inflation. >> what would that leadership look like?

would it be an accord type situation or something else? >> the plaza accord is very ambition even after plaza accord, in the 1990s or a decade ago there have been cities of coordinated intervention where all the policymakers come together to say, listen, we need to capitalize on the dollar stem the dollar from falling too much in the 1990s, that's when the strong dollar policy came from bob ruben because the dollar was crashing back then policymakers and central banks can act together without something as grand as the plaza accord where they have a series of interventions over months if not years. i think this is the op tune time to do something like that and break the doom loop, which currently seems to be gathering around the global economy. >> it's a fascinating conversation i've spoken to a few traders who have suggested that maybe other currencies are going to begin to

catch up, just as central banks are catching up. is there an argument to be had that time will take care of time or time is of the essence? >> i think you're correct. i do feel the dollar is close to a natural peak anyway because it's overvalued. it's close to a natural peak the problem is every day this goes on, you're adding to the financial stress on the global economy unnecessarily. because tightening is going on that's an inflation objective. and yet by not intervening and letting the dollar surge this way, you're adding to the stress of the global economy. you have countries around the world which are reeling from this stress. this is a great time for the u.s. to show leadership and engage in a coordinated central bank move. the treasury has to lead it. the currency policy is led by the u.s. treasury and the fed acts on that the fed keeps on doing its job on interest rates and inflation and the treasury takes the initiative this has been done many times in

the post-era of floating exchange rates it's just that it's not happened in the last few years. and i think it's time for this coordination to happen at this very moment. >> and it's not just about the rest of the world, but certainly trade of our own gdp as some vendors are getting killed once these contracts expire, they're going to resource in other countries, aren't they >> exactly a decade ago i was bullish on america because i thought this was going to be the breakout nation, currency was cheap now it's gone to a level, where any rational market pricing is going to hurt people more than help you need a stronger dollar to help fight inflation there is no evidence of that the second point is it's causing massive financial stress around the world and adding to the stress on top of the monetary tightening these are independent. think of these as independent policy levers. not all connected and keep marching to one drum

i think a coordinated move led by the u.s. treasury in fact, everyone is meeting in washington later this week it's an opportune time to get everybody in a room and talk about a coordinated move and surprise markets you watch the effect it will have it will instantly provide relief to the stress building up across the financial system globally. >> if it happens, you have to come back. >> making some noise ahead of it >> thanks for that >> thank you after the break, u.s. republicans coin $1 billion out of blackrock out of the company's esg investing practices. we'll talk with one state treasurer and why he made the move do not miss an exclusive interview, speaking of the conversation we just had, secretary treasurer janet yellen that's at 4:00 p.m we're back with the s&p down 0.50%. and hear their reasons. i screen for my son. i'm his biggest fan. if you're 45 or older at average risk,

you have screening options, like cologuard. cologuard is noninvasive and finds 92% of colon cancers. it's not for those at high risk. false positive and negative results may occur. ask your provider if cologuard is right for you. everyone has a reason to screen for colon cancer. if you're 45 or older, get started at missiontoscreen.com

worker's comp was about 20% of my total expenses. i needed a worker's comp policy that wasn't going to strangle my business. when we got the quote back from pie, it was a sigh of relief. we did it online, and it was done very quickly. we saved about 30% when we switched to pie. working with pie was extremely easy. i can grow my company while not breaking the bank. ask your agent, or get a quote at easyaspie.com.

welcome back i wanted to continue to follow this story we've been talking about for the last hour, hour

and a half or so the labor department new proposal that is going to essentially narrow the definition of what is a gig worker on that uber, lyft, doordash shares have all been down dramatically, but off the lows deidre bosa has more for us as well. >> i did just hear from a lyft spokesperson they emphasize they're no immediate or direct impact on that company or the business at the time the release they say allows 45 days of public comment they say this is the first step in what is likely to be a longer process before any final rule or determination is made. kind of stating the obvious here we hope to hear from uber soon but the prospect of this is big for these companies. i was looking back on some of the numbers from this battle they've already had here in california known as ab-5. a ballot proposal. the gig economy companies spent some $100 million fighting that. the impact on their bottom line

in the state alone was anywhere from 6% to 16% impact. that was from morgan stanley so, this is a national thing, though, david, so the prospect and the costs could be a lot higher more important here. it comes at a time when market investors in these companies are looking towards profitability, less so growth in their market caps are a lot smaller than they were it's no surprise these companies are being punished in the market with uber down 11% >> 20% to 30% uplift in labor costs would not be good. thank you. obviously, continue to follow the story on "techcheck. moving on, ubs ground grading blackrock, citing increased risk from the firm's esg positioning. this is a south carolina, along with a number of other republican state treasurers, utah, louisiana, a couple of other states, they're diverting funds from blackrock to other asset managers due to what they say is sustainable investing hypocrisy.

curtis loftis is south carolina's state treasurer and joining us now explain why the state is taking this position. what in your opinion is blackrock doing that you don't like >> well, you know, esg is nothing but the manifesto turned into investment policies i've been on this for about five or six years we've been looking at this from -- from as many different angles as we could five years ago, using my exemption for procurement for financial issues, i elected not to allow blackrock a very large portfolio. it's now $40 million it went to a different firm because i was concerned about their esg. over the last five years we've worked out most of the funds we have $200 million left to go. i ordered those to be taken out of the funds and they're being worked off by the close of this year if not a little sooner. >> but we're talking here largely about treasuries, right?

we're not -- cash management stuff, correct not necessarily blackrock's equities. >> some of it is the $200 million going out the door now is a portfolio we do have equities. these are from adviser funds and college savings plan we buy a lot of -- we buy a whole panoply of investments blackrock has done good but we're removing them as best we could. i represent the people of south carolina i don't represent blackrock. i take the oath, i sign the documents. and when we give them money to invest for us, we expect it to be invested with the idea that the people of south carolina are the sovereign here, not blackrock. they have taken that money and used it in proxy votes, advanced social agendas it's just not appropriate.

the you can't get more esg friendly and left-leaning from those folks but they have been abusing their drivers for years. >> you're talking social agenda as opposed to climate, which seems to be the focus of esg - >> i apologize esg is the whole bottle. the environment is just part of it the social governance is extremely important. >> now, the ft article, you know, which publicized a lot of the moves, you picked federated hermes. >> i looked at their rating, they supported 57% of climate shareholder proposals. blackrock only supported 41% so, i just wonder, you know,

this does feel as though it's a political decision, not necessarily based on the differential between these two firms given one is actually voting in favorite of climate proposals more ovften than the other. >> when we went with fed rated, it was not federated hermes. federated understand they work for me and i work for the people of south carolina. they are consistent. they're not consistent, they let us know. >> i mean, blackrock, $8.5 trillion they are trying to get the best return for their investors that's what they're in business to do. i wonder how do you, as a state treasurer, approach the climate transition to the extent you believe one needs to take place? electric vehicles, we know, are going to be obviously all over our roads, for example it seems likely gasoline sales will decline over time

i mean, i know exxonmobil fairly well, having spent time studying the company recently, they are planning for that transition do you not want those who represent your state investing in companies that are doing the same >> that's not the point. the marking behind the esg is brilliant and makes someone com look like a chocklodite. we don't believe it should be at the pain of poor and middle-class people. you know esg is effectively a multitrill dollar boycott against the middle class of america. they don't have a say. now we're starting -- >> what would be an example of that i'm trying to understand an example of this. not an unpoimportant issue. those on wall street trying to think whether or not it will

impact blackrock what exactly is blackrock doinging that you oppose >> i don't quite understand pushback from the financial press. you understand that esg is this mammoth platform effectively encompasses the world economics, governance, environment and social there's hardly nothing that's not included in that when you go to the university's web wage, kd 12 web page, virtually any not for profit business in the country you see fruits of esg. now we have large businesses that we compete for in south carolina because we are a very modern state bmw, mercedes, boeing, valvo, when we compete for the large businesses they're saying because of esg, we want you to spend more money we want you to do this, this and that so, again, it's the large middle

class that doesn't have a say that doesn't understand esg. especially intricacies asked by the richest people in the world to go spend money so they can make more money. i don't represent the rich elites lar fink hangs out with i represent bob spunny and the insurance agent. you know it's a great different world we've started talking because of the, the right has been absent on all of this right? the left had the field completely to their own. when i go out now and talk to rotary clubs, republican party or any kind of event, people are shocked. the average person, smart people, they've heard of esg but don't know what it really means. they see it as a betrayal. it's another group of institutions that have betrayed them, they have gone out and -- and worked hard to -- to advance ideology that they don't

believe, and how know this is true, done it legally would have run it through the court. >> you believe that blackrock is trying to advantage and ideology through their investing? >> 100%. >> obviously attract assets. many of us at this desk talked about the failure of metrics, the fully measuring certain companies appropriately. the marketing tactics. same time that's quite a charge you're making. you really think they are, what? trying to position themselves for a global elite agenda at $8.5 trillion money manager one would expect to appeal broadly in anybody they can raise money from >> one of the reasons they have all of this money, they've appealed to especially over the last two years the blue state treasurers and union plan, college foundations. they've attracted massive sums of institutional money by this left wing agenda i don't -- i don't understand how people who have stated this can think it's anything other than that.

if they could have passed esg through congress they would have but 98% would never pass through congress and signed on to the united nations contacts and -- >> you well know a lot of money managers believe companies need to take into account the climate transition or transition to renewabled in a significant way and believe, they look at tesla, for example. obviously a great success. $700 billion-plus market value and say, hey, you know, the fact is, that's where the money is, and if you invested with that appropriate -- viewpoint you've done extremely well. >> but it's not an either/or we're saying they have gone too far. many of the plans that are under way now, many of the net 20, 30, net 20, 50, all of these things don't represent what the people of america believe when you poll americans, left or right, these issues don't come

up in the top five, sometimes top ten. we believe, i pay attention, in this office, we're very concerned about all of these issues top eight people in my office of females. think about that do you know any finance office that is the same we're in the duration minority and live the life but not going to allow the left's hard core agenda to be imposed on us we're david and they're goliath but we're going to fight and i think that we are postured as a whole -- >> i'm out of time i appreciate your argument, obviously articulating these views. it's a conversation we're going to continue to have, and -- thaun thank you for being with us. >> enjoy the day always. >> a statement from blackrock simply said it's built its business on clients' choice and preferences and actions of some state treasures affected media

outlets but not affecting their clients who represented 1.5 trillion they say to blackrock since 2019. we're back after this. - yieldstreet presents: alternative investing with kal penn and older kal penn. - oh, the stock market is doing that fun thing again.

- hey news from the future, you're going to live through that about 10 more times. (laughs) - oh, it's no stress. i just discovered yieldstreet. they vet investments that don't ride the stock market rollercoaster. - ooh. i think some of my gray hairs just reversed. - yeah. you're welcome. - [narrator] become an investor today. yieldstreet: private market investing. and it's easier than ever to get your projects done right. with angi, you can connect with and see ratings and reviews. and when you book and pay throug you're covered by our happiness check out angi.com today. angi... and done.

pst. girl. you can do better. at least with your big-name wireless carrier. and when you book and pay throug you're covered by our happiness with xfinity mobile you can get unlimited for $30 per month on the nation's most reliable 5g network. they can even save you hundreds a year on your wireless bill over t-mobile, at&t, and verizon. wow. i can do better! yes you can! i can do better, too! see how easy it is to save hundreds a year on your wireless bill over t-mobile, verizon, and at&t. talk to our switch squad at your local xfinity store today.

welcome back to "squawk on the street." phil lebeau with us with breaking news. >> hi, morgan. e.d. plans honda announced will start building batteries and evs here in the united states. here's the battery investment. $3.5 billion along with korea's lg energy solution putting a plant in south central ohio 2,200 jobs created honda needs to get into the ev game especially here in the u.s. they don't sell them in the u.s. now. the u.s. market is rampantly increasing 5.6% of the market right now taking time, however honda's u.s. ev production not scheduled to start until 2026. guys, back to you. >> phil lebeau thank you. a quick check on markets major averages lower s&p down now 25 points about 0.7 of 1%. 35al -- 3586 the

outperformer that does it for "squawk on the street." "techcheck" starts now. good tuesday morning welcome to "techcheck. i'm carl quintanilla with jon fortt and deirdre bosa how much farther can things fall talk about it. plus hardware to sales events. big techs betting big on the consumer, but with meta down almost 5% and amazon not far behind behind, is that a good thing and plus regulation fears. pressing roads on road blocks and cathie wood with a new buy we'll get to that. first steve liesman. >> hey, carl expectations recently followed closely for what it says about inflation expectations good news here the one-ye