the biden administration could sell more oil from the spr as soon as this week. maybe for a couple more weeks. it's coming. november. it's tuesday, october 18th, 2022 "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we're live from the nasdaq market site in times square. i'm rebecca quick along with joe kernen and andrew ross sorkin. as joe mentioned, the u.s. equities are strong. you see the dow futures are up 310 points this is basically where we were yesterday at this point. s&p futures up close to 50 points nasdaq up 17177.

the dow was up 151 points yesterday. the s&p was up 2.6%. nasdaq up a whopping 3.4% on the session. the recent gains don't get us far off the record lows that we have been looking at dow is now more than 18% from the record high. a lot better than yesterday. s&p is down 23% from its high and the nasdaq is down 34% off the record high. if you look at treasury yields 10-year treasury at 4.021% 2-year treasury at 4.54% overnight, other news. reuters reporting the biden administration planning to sell oil from the spr as part of the response of the russian war with ukraine. that is a move to dampen the prices before the elections.

this would drain 14 million barrels from the previous release of 180 million barrels which started in may the department of energy will release further details -- what are you looking at >> it's in the script. >> we're going to talk about it. the desire to try to combat rising pump prices while supporting domestic drillers national average as of this morning. $3.87. up 20 cents from a month ago >> whice put it in there. the move is to dampen prices before the election. are we sure? before the election? you said it. didn't you read this before? >> factually it is an accurate

statement. is that the intent >> you said it was their intent. sorkin if you say it, i believe it. >> for the first time ever says no one >> you're right, andrew. well said. >> well said >> i said it i started laughing when i read it at the top of the show. then i heard you say it. did he just -- it's right there. >> i didn't ad lib it. >> how did it slip through the cracks in when are you getting enough to correct this before we come on? if you want to go a step further, it is not what it is intended it is not. >> we brought it up yesterday. >> especially if you believe the storms are getting worse and stronger and happen more frequently >> i'm not disagreeing with you.

i'm loud and proud >> you did i'm the one who's proud. >> i know. an update from the uk prime minister liz truss facing calls to resign from within her own conservative party six weeks after taking office. the finance minister announced a fiscal package she fired her finance minister last friday. now members of the party are openly calling for her to quit this is how it works up to 100 members of the party are believed to submit letters of no confidence in the prime minister and truss apologized for mistakes yesterday in the interview to the bbc >> now i recognize we have made mistakes i'm sorry for those mistakes, but i fixed the mistakes

i appointed a new chancellor. we restored economic discipline and fiscal discipline. i want to go on and deliver for the public. >> newly appointed finance minister jeremy hunt plans to reverse all of the proposed tax cuts announced by his predecessor and truss in september. >> he is gunning for the job at this point >> maybe >> that's the chatter. >> at that level >> that's the speculation from what i read in the british papers tabloids i don't know >> the level is in the eye of the beholder in this country, sometimes depending which side you're on -- you say that guy was or that person wasn't >> we're not at the level.

>> it's happened again, we're back to why it happens. you have to be crazy to get into that business in the first place. >> to want the job. >> and to get into -- it fulfills some need for some deep seeded need that people have whether for power or -- yeah >> greed >> lots of crazy people in -- >> all right on the squawk planner. earnings season rolls on we hear from johnson & johnson and goldman sachs and hasbro and lockheed martin before the opening belt bell we have the interview with the ceo of johnson & johnson in the next hour. and david solomon will join us in the cnbc interview to talk about earns ings after the closing bell, we hear from netflix and united airlines. elon musk deleted a tweet

that appeared to tease a team-up with cankanye west it shows musk and west cartoon with logos of twitter and parler captioned fun times ahead. west reportedly agreed to purchase parler after being locked out of instagram and twitter. this may be the same image with kanye west is not the greatest of all looks i'm trying to think -- i don't know how much money ckany west has and i don't know how much parler costs. >> decidedly less than twitter >> decidedly what are we talking about here a car? >> we have rolls-royce on this

morning. kanye is loaded. he must start with a b >> his line is 10% of the revenue at adidas. >> that was a power couple for a while. >> maybe i misunderstood unlike michael jordan, he complained he doesn't get a real piece of the adidas line >> he has cash coming in that is one line he has fewer business lines than a few weeksing ago he was making cash for quite a while. coming up, yankees and cleveland. one good thing one good thing is now it is on at 4:00. >> from the rain >> yeah. >> you will be awake you get to see it with dinner. >> semi awake.

>> 4:30 as you eat dinner. >> if it is extra innings, forget it. i'm up until 8:00. 8:00 to 8:30 >> i was up after 10:00 last night. >> 10:00 is too late. >> we were doing math homework >> you and your husband? >> my son. >> all right back to school stock futures pointing to more gains at the open we will talk about the potential for pick ps for the portfolio after the break. and ben smith will join us and talk about the launch of the new news media venture semafor i kept seeing it in notes. it looked like senator you are watching "squawk box" on cnbc >> we have one of those on today, too >> we do

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nasdaq got a boost from positive bank earnings closing at 3.4% higher volatility continues in the markets. our next guest says the bear market may be nearing the end. joining us is kari firestone and chairman and ceo of asset management kari, i was reading some of the

comments and i felt some sort of empathy. one thing that we say again and again is nobody rings a bell at the bottom or the top. a lot of people suddenly don't really adhere to that because they're waiting for a vix at 35 or 40. they are waiting for the final capitulation they are really sure it has to happen before we make any bottoms here which is seen as bear market rally or we have to go down and re-test the lows at 3,200. isn't seeing a vix spike to those levels and we have seen it in the past, isn't that a bell ringing? does it have to happen you are saying it doesn't have to happen. >> no, it doesn't have to happen joe, i appreciate the empathy. on the question of where the market bottoms there is no bottom in sight. it is ridiculous we are not trekking down to the

bottom of the grand canyon what we have seen is amazing we had a day with a hot inflation number and the market ended up 2.6%. what would the market have gone up if the inflation was cool the day was down and yesterday was a big up day i can't see the bottom either. i will tell you it appears as if there are investors out there willing to take some risk. all year long we have seen de-risk. no one wants to buy. there have been a lot of sellers. there are sellers out there. we have seen a rush of buying. the market was down 20%. now down 23% it is selling for 15 times or maybe 16 times next year's earnings we know inflation is hot we know there are higher interest rates coming. this quarter's earnings are not going to be wonderful. the prices reflect a lot of that it is about looking at where the market trades and not feeling comfortable and saying we'll join everybody and be on the

sidelines and own more energy stocks, but making uncomfortable choices from potentially you can make a lot of gain because the market has taken these stocks down a lot >> you have data going back to what year? 1928 i think on the average age. >> exactly >> i was feeling empathy for today is 2.290. >> this was a sign >> it could be 310 or 260. it doesn't mean we're there. at least that's something in the back of our minds in the terms of duration, we're already there. we're close in depth 20% on the s&p 35% on the nasdaq.

you are close for duration the only thing that worries me, kari, if we are in a multiyear cycle of inflation and rising rates. >> of course we would say that right now we know the employment levels are very high. we are still at 3.5% unemployment if we go to 4.5%, which would be a big increase on the percentage basis, we would not been any where near we have seen the depths of most recessions. this slowdown has been going on for years. if you look at different sectors. we had a recession in retail we had recession in medical devices. there have been rolling recessions through the pandemic. employment has stayed high we don't expect there to be a drop of unemployment rate to be minus 8 or minus 9 that seems unlikely. there is a slowdown and we have to get through it. it doesn't mean the market has

to go further down we are already down a lot. if you think about what happened in the pandemic, we dropped 34%. we began to go up on march 24th of 2020. that is before we saw the effects of the pandemic. we don't need rose colored glasses. we need to say what is the level that many stocks with real earnings are driving real businesses can be bought here? if you think about venture capital firms putting money in public equities which was fascinating last week when this was announced. they feel that there is more value in public markets. you know, let's be realistic that there are signs that buyers are willing to start to take risks and perhaps after the next two rate increases the fed will take a break and look around and see that housing prices are down see that spending is down.

consumer spending is down. recognize there is softness and price weakness in the economy and they don't have to continue to push the pedal. we can buy names like paypal and meta and adobe and first republic and auto desk those are all stocks we think at these prices we can look over the next year and make money >> we have to go say it one more time meta, adobe, auto desk >> first republic, align and paypal >> paypal. you did say that >> those stocks have gone down a lot. the people are buying them haven't lost money yet they think they will make good money and they should. they all earn. they have decent pes >> is that a new piece of art or is that the same one >> i think it is different. >> we rotate some art here in the office it is from the museum.

>> is it for our benefit >> it is an asset. >> i'm not going to ask. >> you can buy them too. take care. bye-bye. >> thanks. >> everything's for sale when we come back, the inside story of the crypto laundering scheme. the case with interesting twists eamon javers is next he will talk about the crocodile of wall street later, big earnings inter s interviews the ceo of johnson & johnson joins us next. thtot going on this morning. bo scks are higher ahead of the earnings reports we'll be right back. >> announcer: squawk picks is sponsored by wisdom tree the modern alpha pioneer

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is if i die too. [ screaming ] all right. now it is time for the executive edge this morning, we are digging into the massive crypto scam we have javers eamon javers wit story of the crocodile of wall street >> this is a crypto who done it story with the hack of bitcoin in 2016. no one was charged with the hack the years long investigation to find the stolen crypto led the feds to a young married couple in manhattan heather morgan and aspiring rapper they shared hundreds of videos on social media that make it hard to imagine the couple could be charged with conspireing to

launder billions of bitcoin. videos give us a peek into the private life of the mystery woman accused of the crime >> i made this really dope orange baclava which is inspired by joe exotic. >> reporter: she posted videos of art project where her medium was tax determiny. people discovered razzlekahn she describes as something as an acid trip and nightmare that describes her spirit and hacker mindset. >> living on the coast >> that's super weird story. i can imagine there will be a

movie around it. >> i hear the voice wraprapping. >> reporter: tin this video, she calls herself another name ♪ don't know where i'm headed ♪ ♪ crocodile ♪ ♪ of wall street ♪ >> to see these people acting the way they are and just being so open about their lifestyle and stuff. it was fascinating to me honestly, i could only laugh >> filming and something to happen and you want me to just like shove something up my [ bleep ] and do a dance >> reporter: the fact that so much bizarre content was available to gawk on social media helped the story go viral. >> i'm obsessed with heather morgan >> go down the rabbit hole you will not be disappointed >> reporter: heather and dutch are innocent until proven guilty there is a status hearing in

november the end of the story is still to be written what we know is both strange and fascinating. guys, you can check out the crocodile of wall street documentary at youtube.com/cnbc. >> nothing like keeping a low profile. >> they were living large here in new york city the investigators we talked to on this said if you are going to find somebody laundering billions in bitcoin, maybe a state sponsored organization or a criminal gang in eastern europe they are here in manhattan when they got engaged, billboards were up all over times square announcing the engagement that is the couple they were super loud and high profile. the feds say they laundered the biggest amount of cryptocurrency from history >> fascinating eamon, thank you earnings are just out from johnson & johnson. looks like the company came in with adjusted earnings of 2.55%

a share. that was better than the street was expecting. revenue is higher. $23.79 billion we will talk about the quarter shortly with johnson & johnson chief financial officer joseph wolk who with will join us in a few minutes. if you look at the breakdown, consumer health and operational sales up 8.4%. med tech sales up8.1%. we will talk about those issues. there were concerns of currency. that was why bank of america downgraded the stock last week stock is up 2.8% we will talk about lots of things in the economy right now. we have more coming up this mornin morning. it is a big show

david solomon will be on set here joining us in the exclusive interview after the earnings report there are those reports of companying restructuring and the firms plans. we will talk about all of it as we head to break, a look at yesterday's winners and losers in the s&p 500. >> announcer: executive edge is sponsored by at&t business at&t 5g is fast, reliable and at&t 5g is fast, reliable and secure 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. (♪ ♪)

welcome back to "squawk box live at the nasdaq market site nasdaq up 178 points s&p is looking to open higher at 51 points higher microsoft confirming the company cut additional jobs. three months after it trimmed 1% of the workers this comes as software is expected to slow a spokesman telling cnbc microsoft would continue to invest in the business and hire

in key growth areas. microsoft's next earnings report is one week from today let's talk about credit suisse considering sale of the u.s. business ahead of the october 27th review. we talked about that data lot. this new report saying that the bank asset management is expected to draw interest from private equity no decision has been made. all of the anxiety and worries of credit suisse two weeks ago when people talked about a lehman moment have not come to pass when we come back, ben smith making a big announcement launching a new news platform semafor. joining us next with the big stories on the site. in the 7:00 hour, don't miss the interview with david solomon. you can watch us atinyme live

anytime on the cnbc app. we're coming right back.

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welcome back to "squawk box. we have details on the accident at spacex in january that left a ten--year veteran of the company in a coma for months semafor is being put forward by ben smith. former columnist at the new york

times. a lot of people waiting for the launch of semafor. ben, it is nice to see you, sir. >> thank you for having me on. big day for us. >> smith and smith. >> no relation >> here we are >> we're incredibly excited. >> we were debating before the commercial what are you trying to do with semafor? >> i would say we are trying to be more transparent about our journalism on the page, we've broken down the story form which is the black box of news. >> it looks different. multiformat. different sections >> we are trying to say the thing we hear from readers is tell us the news here is the reporter's thoughts and the alternate point of view on the same facts. here is the global point of view i think there are irreconcilable differences.

>> here is the question i have about news broadly we all say we want sort of center, middle of the road news. no bias. that is what everybody says they want yet, when it comes to, i would argue in television and, frankly, writing, people go to their own corners. they say they want the middle and then they seem to do something else what do you make of that >> i think what people want is news that they know where it is coming from. that's why people watch this show they may not agree with everything, but they know where you are coming from. they know you know the difference with the factual claim and your opinion on it most of the time i think that's the kind of transparency we're trying to give. >> where is semafo wrrkr coming? >> i think each story is put together by a journalist and human being. we will try to put that person front and center. >> in the constellation of media

and if you think of the new york times and financial times and wall street journal in one place and politico and axios and puck in the news letter world where does this land >> i think we are part of the new generation that is trying to think hard of what our consumers or complaints about the news and people say you're wrong. people file legitimate complaints we need to look at them. >> i don't think you have any other conservative than at cnn and he's gone now. and he would point to fox news and he would point to them than he would point back at him he would point back at fox and your guys are the end. are you going to really land in the middle >> i don't think stories land in

the middle usually we are still working on which is the end of scivilization >> are you an advocate now there are people making that point. we need advocacy if someone is so outrageous and they are on the right, we need advocacy to silence those people >> you know, certainly i don't think we should be de-platforming people. >> it happens. >> here are the facts. here is what we think as a reporter i'll not put my opinion on you like it is a statement of fact i'll include a dissenting voice. >> take twitter and put it on the platform you are not going to other places you are seeing it right there on the platform it's a place for discussion on all of this? >> i think we are going to try to include alternate points of view and global points of view on the same facts. that's not that complicated. that's what people want to get back to shared facts

>> from where you are sitting here, make it simple did cnn have more facts or did fox news have more facts over the last two years >> you know, i'm not sure i have done a wading. >> in your gut feeling, don't you think cnn had more facts >> i'm not sure how you put it on a scale >> straight up truth >> you think cnn >> i think this is such a pointless argument you take the two politics and weigh them against each other. >> echo chamber of the left, ben. >> we are trying to be the opposite of the echo chamber we are trying to open it up story by story not partisan streaming >> two interesting stories this morning that are fascinating one we set the piece up about. the fellow sadly at spacex who got injured which is the story you found out about. what is the implication?

what is the implication for spacex and elon musk >> it is great story i hope people will read it it is a complex story. this guy, a technician, was basically blown up during the high pressure tests. the way you build a rocket is you build a bomb and send it in the air. you could see the story as a classic workplace safety and osha violations which there were i think the format of telling this is a more complicated story of the class of technicians who take incredible personal risk to private this industry. they take risks all over the place. when they get killed, their names don't go on the wall at cape canaveral >> this goes to how people read thesestories some people who read the story and say this is a fascinating universe other people will point to it

and say is there a liability at spacex others say what does this have to do with elon musk and is he operating properly where does this lie? >> we try hard to include all of the perspectives the technicians themselves is not this is outrageous management we think this is an incredibly important project worth the risk it is authentic. >> you have another story about your former employer who i have a little bit something to do with as well these days. the new york times >> six degrees of the new york times. >> an activist investor has a stake in the new york times. you report on that you have an interview with james bennett, the former opinion editor, fired after the tom coughlin piece >> i think one of the big questions for the times is they have been essentially trying to reel the brand back in since the summer of 2020

they also had the huge symbolic moments firing the public editor i think the question is can they essentially quietly shift the brand back to center or to big symbolic moments define it >> were you surprised how out spoken james bennett was >> i wasn't. >> those were scathing comments. >> i was glad he went on the record >> what did he say >> i can imagine >> i think he felt personally betrayed by the publisher and also made a point of saying some people reported falsely he apologized for publishing the op-ed. he had not. >> i'm gratified that you seem to concede that maybe there could be some move back to the center at your old employer. if you admit it -- that's the

first step of recovery >> andrew knows this much better than me. it is trying to do a lot of things >> andrew, the world is looking at the way things are going this is insane. that's why i can't stand meadia. it is not just the right that is out of control. >> i recognize it. i'm suggesting there is a side that you live on is -- >> we all live in our echo chambers when john malone says i have an idea for cnn hire a journalist there. that should be an idea that things have gone too far that way. you lost the public. you've lost the credibility to the public. >> what was the times push back on the bennett comments? >> they wanted to comment to engage with him personally >> i don't want to comment or engage personally. ben, thank you >> thank you for engaging with me >> congratulations

good luck. check it out s semafor.com. >> spell it. >> s-e-m-a-f-o-r it is the same word in more than 50 languages or elements of it we have global aspirations >> good luck smith and smith. >> in 50 languages you didn't know what it was. >> incredible. when we come back, johnson & johnson earns are out. the stock has been higher after the numbers came in better than anticipated on earnings and revenue. it looks like johnson & johnson shares are up 2% we will speak with cfo joseph wolk after this break. dow has moved up higher this morning in futures johnson & johnson helping out. 384 points above fair value this is after big gains yesterday when the dow was up almost 2%. s&p up 55 points after gaining

more than 2% yesterday close to 2.5%. nasdaq up 190 points after 3% inga yesterday "squawk box" will be right back. 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 ♪ 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. ♪♪ ♪ a bunch of dead guys made up work, way back when. ♪ ♪ it's our turn now we'll make it up again. ♪

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welcome back, everybody. johnson & johnson out with quarterly results. with us to talk about is the cfo, joseph woke it's great to have you here. >> good morning, becky how are you? >> good. your numbers came in better than expected what happened that the street wasn't anticipating? >> the teams across the globe

did a great job in terms of the macroeconomic pressures to accelerate growth across all three of our segments from what the growth rates were in the second quarter 9% growth in the pharmaceuticals, a lot outside the u.s. med tech growing at 8% and consumer health growing close to 5% so as supply chain issues abated there, wae were able to have moe products on the shelf and saw a recovery in that business. we're excited certainly how that plays out for the west ofrest o the year we maintained guidance but we're really excited about what that presents for 2023 and beyond you look at our pipeline of pharmaceutical products, 100 candidates in development, 43 in phase three, 10 in registration. the cadence of med tech innovation continues to be extremely strong with 20 new entries this year alone and great free cash flow

so we've already distributed to shareholders over $11 billion in the forms of dividends and share repurchases and it's almost still very much poised to add to our portfolio with strategic acquisitions. >> joe, i hear everything you're saying and none of it seems to reflect the concerns that the market has had recently, whether that be a slowdown is coming from an economic perspective, whether inflation is going to continue and eat into profits. that doesn't affect you in any way, shape or form how are you managing around that% >> that's why we were excited about what the teams were able to accomplish. obviously the macroeconomic pressures. you will see gross profit has eroded about 130 basis points but we've managed other parts of our p & l to prioritize investment up 8% over last year's levels. so strengthening the future. we are facing into a stronger dollar so reported results obviously are somewhat of a

headwind about $4.5 billion on the top line for the year and about 68 cents on the bottom line but again, our teams are being very effective, managing the deployment of all of our resources to make sure that we're focused on those initiatives, those projects that really drive value for patients and consumers. >> you mentioned that you put some price increases in. there was no pushback? that's something consumers are willing to pay at this point >> yeah, at this point as you saw from a number of our consumer health competitors, we've been able to institute some strategic price increases our products, such as aveeno, neutrogena, tylenol, are well respected and loved by the consumers who use them price increases are not an option for us in the space of pharmaceuticals and very, very limited in med tech. but in consumer health, we founding that the elasticity is still there so demand is is it ill very, very strong. >> with the inflation reduction act passing and that's going to allow medicare to negotiate with

drug companies, what kind of pressures does that put on your company for next year? >> we're still looking at the details. actually the administration as well as cms is still looking as to how that's going to roll out. that's a few years away, 2026 i believe is the first year that that's instituted. we do have concerns with respect to how that could burden investment and innovation. it will obviously, i think, hurt life sciences in general some of the great innovations we have in oncology, in mobility for people with, you know, needing knee repla replacements, those types of things could suffer if it's not done proappropriately. we do have some strong concerns in how it may hamper innovation going forward. >> the year -- joe, it's joe kernen the year outlook you didn't really raise, you just narrowed. the stock is reacting pause tef

positively you're not really raising guidance but unlike a lot of companies and especially multi nationals, you're going to earn a lot more this year that last year not too many banks can say that many there's a lot of companies that can say that. >> thanks for bringing that up, joe. on the bottom line if you look at it, we digest the stronger u.s. dollar with a better operational performance. we leaned in very much in january. i think the street was surprised to the upside. and we're living into that expectation despite a much more challenging year than i think anybody thought back in january. >> hey, joe, your forecast for the dollar do you think it gets stronger from here or how are you planning around that >> boy, that's up to call, becky. we called it as parity back in july and thought that's probably the leveling off point, but obviously we've seen it tick a little bit stronger from a u.s. dollar perspective in this most recent guide it's hard to tell. we haven't seen it this level in

probably close to 20 years we continue to manage our business on an operational basis. with 7% growth given the size of our company, strength across all three of our segments, we couldn't be more please bed what that means for not just this quarter but how it bodes to going into '23 and beyond. >> so you're obviously not moderna in terms of depending en dependence on covid and vaccines, but are you seeing elective surgery that was put off? are you benefitting from things reopening, people going back out and saying, all right, give me whatever it is that j&j makes for elective surgery whether it's joints or whatever you're talking about? >> we're seeing much more predictability around that back in '21 that was much more of a factor as it was coming back off of '20 levels now we're seeing much more predictability it's not driven so much by patient fears or patient

hesitation, it's much more around hospital staffing hospital administrators really across the globe have done a fantastic job finding ways to get procedures in with staffing shortages as well as the covid dynamic that was in place over the last few years but we're seeing much more predictability the u.s. market rebounded nicely in the third quarter outside the u.s. it's also, except for a few limited geographies and countries where the first half of the quarter was impacted due to mobility restrictions, we like the trend that we're seeing there. >> joe, thanks for being with us. >> thank you, becky. coming up, goldman sachs set to report in the next half hour. we'll bring you those numbers and an excsiluve interview with ceo david solomon. ceo david solomon. "squawk box" will be right back. what's up, peyton? good morning, peyton.

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good morning stocks in rally mode as the major averages try to claw their way out of bear market territory. doing their best this morning. futures are surging. the last of the big banks ready to report. goldman sachs chairman and ceo,

david solomon, willjoin us for an exclusive interview to talk results and the firm's decision to restricter some divisions. plus the incoming ceo of xpo logistics on the spin-off of its trucking business. the state of the economy before the holiday season and much more the second hour of "squawk box" begins right now good morning and welcome back to "squawk box" right here on cnbc. we're live at the market site in times square take a look at u.s. equity futures at this hour because they're surging higher the dow looks like it would open up 348 points higher we just got those j&j earnings the nasdaq up about 171 points and the s&p 500 looking to open about 50 points higher of course the all-important treasuries let's show you the 10-year note

and the 2-year note. right now the 10-year is just above 4% and the 2-year at 4.454. oil, as we think about the energy complex, wti crude standing right now at 85.30. and crypto, to the extent that it is a risk asset that might tell us a little about how folks are thinking, it is up bitcoin at $19,542 ether up as well marginally, $1,326 joe. this just happened breaking news in the last couple of minutes a road in the center of london's government district near downing street, where prime minister liz truss's office and residence is has been closed due to a suspicious package according to policemen on the scene, we'll bring you updates on the situation it just happened as we get them. some corporate headlines to bring you as well. microsoft confirming that just yesterday the company cut some

additional jobs. the move coming as the sauoftwa maker's revenue is expected to slow thanks to slowing licenses for windows licenses microsoft will continue to invest in the business and hire in its key growth areas in the year ahead the next earnings report is one week from today, so mark your calendar. also credit suisse is considering a sale of its u.s. asset management business and is preparing for the departure of the president of its investment bank unit. this is all ahead of that october 27th strategic review that we've been expecting. according to a new report, the bank asset management unit is expected to draw interest from private equity, although no final decision has been made the stock is up 2.25% but of course that's 10 cents. and the earnings parade continues. after the bell we'll hear from netflix and united airlines. for those and other earnings to watch, we want to bring in the inning partner at dcla and a

cnbc contributor surat, i know you own johnson & johnson. we just went through the report, spoke with the cfo there you had some questions about pricing, whether they were going to be able to keep up with inflationary issues. you also had questions about the stronger dollar and how the company was managing it. what did you think looking through the release? >> becky, i think they did a wonderful job. when he talked about the three divisions that they have you have pharmaceuticals that did really well. what i was looking for was what was med tech going to do and consumer going to do they're going to be spinning off their consumer business in a few months i think they talked about, hey, things are coming back to normal in med tech surgeries are coming back so the read-through on that for other companies will be pretty good then on the consumer side, i think that's going to be good when the staple companies report so all in all, they're managing the costs, they're managing the strong dollar. i think the strong dollar for a lot of companies is going to be a difficult road >> yeah, one of the things that

caught my attention, he said that they had price increases that they put through in that consumer division and didn't see any pushback from consumers so all of these concerns about a recession may not be showing up, at least not yet. >> yeah, that's what we were looking for in this earnings season to see what companies were going to call for over the next couple of quarters, not looking backwards. those price increases seem to be sticking and they're sticking on the consumer side and some of the discretionary sides, including travel and entertainment. so, you know, at what point do things slow down and where do they slow down that's the key question moving forward into where to direct capital. >> i will say johnson & johnson is up by 1.5% now. it had been up 2.2% when the numbers first hit so we'll see where it shakes out today. up on deck next we've got goldman sachs. what are you looking for >> so i think goldman will be an interesting story. bank of america did very well. goldman is like morgan stanley,

but what i'm looking is, hey, how is their investment banking business going to do and how is their trading division going to do is it going to compensate for the asset managers they're trying to grow as well they're highly volatile earnings so it will be interesting to see. i think we're in front of where they're going to restructure, so that's a really interesting question going back to where they were before normally when companies do that, it's more of a defensive move so i like to see how this is all going to sort out. >> any questions in tparticular that you'd like to hear answered by david solomon >> yeah, i think capital markets will be interesting. goldman is in the forefront of that so what is the activity? we've been hearing about public to private is that happening? what are the capital markets doing? rates have really jumped again, goldman is a leader in that area. and the asset management business where are they going with markets, where are they going with private wealth. i think people want to know, especially at goldman, because the recurring revenue piece is what they're trying to get to.

that's where you get the higher multiple, not the offset where you get highly volatile earnings, so i think that's going to be very interesting to watch. >> sarat, what do you feel about the market the last couple of days the futures are higher this morning, we had big gains yesterday, but that comes on the back of wild swings up and down last week. is the market looking through the earnings, liking what they're seeing here? is this just the up and down as more volatility is around, we're still waiting to think about what the fed does? >> i think one of the things the market liked, and we were very concerned about this going into it, is what were the financial earnings going to look like. and you actually did not get -- throw the kitchen sink away. hey, the economy is still growing a little bit we're expecting to slow down so i think we got a little stabilization there. i think that's good for the market i don't think we're out of the woods yet. i still would stay invested because you can't time this. but i think multiples for some of the cheaper companies are doing fine the jpmorgans, bank of americas.

delta had good earnings. tech is going to be a big one to see how sustainable it is. you talked about microsoft cutting. a lot of that was pulled forward through covid, so we'll see what happens to what we call the real economy versus some of the tech economy. that's what we're looking for. but at this point still very volatile, becky. the days of 400, 500 swings, last week we saw 1500 intraday i don't think we're out of the woods yet. morgan stanley is one we would add to so keep on looking. netflix is reporting, i want to see what their ad-supported business is going to look like united is coming, are they going to support what delta said it will also be company specific we know some industries are doing well this is where the companies specifically are going to do well and some of them are just not and you've got to really pick the good ones. >> sarat, thanks we'll see you soon. still to come in this hour, hard to believe, hour exclusive

interview with goldman sachs chairman and ceo david solomon we'll talk quarterly results, recent changes at the firm that sarat was alluding to, the state of the economy and much more. up next, frank holland brings us a special guest. what's coming up >> xpo logistics is one of the nation's largest trucking companies and set to hold their investors day today after releasing preliminary earnings after the bell last night and ahead of its spin off of the truck brokerage business coming up i'll talk to their incoming ceo about supply chain, the holiday peak, the spin-off and much, much more. we'll have a tllhat on "squawk we'll have a tllhat on "squawk box" right after the break ♪ ♪ ♪ ♪ ♪ ♪

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new overnight, reuters reporting that the biden administration is planning to sell oil from the strategic petroleum reserve. it could happen as soon as this week that sale would market the remaining 14 million barrels from president biden's previously announced release of 180 million barrels that started back in may. gasoline prices have been ticking slightly higher. the national average as of this morning is $3.87 that's up 20 cents from a month ago. far below what we had seen, but of course we are just about a

month away from election day not even >> not even. >> not even. the earnings parade continuing as of this morning, we are seeing johnson & johnson, goldman sachs, but it's an investor day i don't know, there's something romantic about long haul trucking for me but i'd probably do it about three hours and say i can't take it. frank holland joins us now we're going to hear from this xpo on investor day. frank, do i romanticize it isn't there something about they're modern day cowboys aren't they moving stuff across 3,000 miles. >> joe, i don't even know what to say about that. i think you're thinking about your old days of watching "b.j. and the bear." we're going to focus on the actual business. joined by the xpo ceo, mario hart i know you're a long-time

executive with xpo so thanks for taking a minute to talk to us. >> thanks for having us on, frank. >> yesterday you did an early release of earnings. revenue per shipment up about 7% can you give us a sense in the current quarter, what's the state of your business >> so we had a very strong quarter with adjusted ebitda was stronger than expected we had guided 330 to 345 million of profits for the quarter and we came in at 348 to 352 for the quarter so we had a strong results in our ltl business. our pricing improved 7% and our volume trends accelerated and flipped to positive in september. and brokerage had record shipments that have gone up 9% in the third quarter as well. >> broker anage is the business you're going to spin off but i want to talk about these

results not only as far as they're coming up officially on the 31st but what we're seeing right now. are you continuing to see revenue per shipment up? we had a dire warning from the fedex c eeo are you seeing similar softness in your business >> we're seeing the acceleration as we head into the fourth quarter but a lot is company specific initiatives we are investing into more capacity in our network. we're adding more terminals, more equipment, more drivers, and we're also investing in our sales force and that's leading to having more business wins in the second and third quarter we're seeing the trend accelerate like we saw it in the third quarter, every month of the quarter as well. >> you mentioned drivers but we had the ceo of forward air on last week he said in the u.s. we're short 100,000 truck drivers right now. are you having difficulty sourcing drivers do you have to increase pay, especially heading into the holiday season >> incredibly passionate about

this we have more than 13,000 drivers on our team but we have a company specific program which is our driver schools. we operate schools out of 130 locations, terminals in our network. this year we're on track to graduate more than 1700 drivers. we pay their tuition, that i earn wages as they're training and they join our ranks after they graduate from the program. >> so it does sound like higher compensation because you're also paying them while they are in school >> we are paying them as we go through school and our wages are very competitive in the industry our drivers get to sleep at home every day which leads to a higher retention of drivers and makes it easier to recruit drivers as well. it's still a tight market but it's a little easier for us in ltl and driver schools. >> we keep saying ltl. that's less than truckloads. that's where different companies put a load on as opposed to renting or buying their own truck altogether when we had your former ceo on,

he talked about the spin-off as getting rid of the conglomerate discount he felt like xpo shares were undervalued. old dominion trades at 23 times forward earnings what do you think the spin-off is going to do what's it going to do to raise valuation and change how investors see the company? >> number one, we'll have fit for purpose companies that are focused on one line of business that goes an inch wide and a mile deep. so when you have a focused management team on improving one business, you can have better results over time. the second will make a pure play comparison with our peers a much easier compare november 1st we'll spin off our tech-enabled brokerage platform called rpo and our ltl business or less than truck load is also a fantastic business both are coming from a position of strength to be industry leaders in their respective

industries. >> before i let you go, some people are forecasting a recession. how do you see the potential of recession shaping up the u.s. supply chain and the freight market going forward also in 2023 >> i'll not seeing it in the results, obviously third results in the third quarter where our ebitda margin went up by 21 to 23% when you account for the sale of our intermodal business earlier in the year. you're seeing mixed feed back from customers in terms of some customers seeing lower demand, other customers continuing to see strong demand. we're modeling depending on what the economy does the next year, we are modeling different scenarios of how we'll perform in any market condition. >> mario, we appreciate your time andrew, that's it. back over to you. >> hey, frank, thanks for that fascinating state of affairs in terms of where our economy is headed. coming up, quarterly results from goldman sachs due out in just minutes we'll bring you the numbers and our exclusive interview with

goldman sachs ceo, didav solomon, who's joining us at the table right now. here

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johnson & johnson reporting earlier this morning they had adjusted profit of $2.55 a share. revenue was also above cup census at $23.79 billion versus $23.34 billion that had been estimated. here's the cfo on the drug maker's quarter. >> we saw 9% growth in pharmaceuticals. a lot of growth outside the u.s. med tech with procedure recovery growing at 8%. and consumer health growing close to 5%. as supply chain issues abated there, we were able to have more products on the shelf, take strategic price increases and saw recovery in that business. we're excited how that plays out for the rest of the year we obviously maintained guidance largely in what we printed this morning but we're really excited about what that presents probably for 2023 and beyond >> johnson & johnson, the dow component, up 1.5% this morning after that report.

let's talk a little bit about intel, because it's eyeing a significantly lower valuation than previously expected for the ipo of its mobile eye car this morning. they have a projected price of $18 to $21 apiece. that is down from earlier expectation of, wait for it, $50 billion. so a big drop in terms of -- that's a lot less, a lot less this morning. next up on "squawk box" goldman sacks ready to report. our exclusive interview with the ceo, david solomon check out the futures this morning, they are sharply higher you're looking at dow futures up by over 400 points s&p futures up 58, the nasdaq up over 200 points. "squawk box" will we right back.

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goldman sachs reporting better than expected profit and they earned $8.25 a share. the consensus estimate was

$7.69. i had a -- oh, david is here, which is really exciting joining us now, andrew do you want to do it? i've got a revenue number $11.98. >> and you're looking at the stock moving already, about 2.5% up right now joining us for an exclusive interview is goldman sachs ceo, david solomon. nice to see you, sir. >> really happy to be with you on set. >> we've been joking with you on set that you're an in-person guy so it's nice to see you in person. >> it's nice to be with you. >> let's talk about these numbers and the other big headline which is this reorg of what's happening inside the company. in terms of the numbers, better than expected. there's a lot of questions about what the future of this firm is going to look like so speak to it, if you could. >> sure. well, on the numbers, this was a challenging operating environment. there has not been a lot of capital markets activity given the headwinds of economic

activity, equity issuance has been slower. i think strategic dialogues still remain pretty good at this point in time. our clients were active,though the thing that i'm most proud of when i look at what our team has done over the last few quarters, if you look at our market shares and wallet shares, we're really focused on our clients and doing well servicing them and being there with liquidity and servicing them in what is a challenging time. >> in terms of thinking of you as a bellwether for the capital markets, what are you expecting? when you look out over the next couple of quarters, what does it even feel like to you? >> i think it feels uncertain. you know, i think there's no question we're tightening economic conditions relatively quickly. we're reversing what's been a very, very long period of relatively easy economic conditions as you do that, at some point there's going to be a bigger impact on consumer behavior, on market behavior. i think we've started to see

that but i think until we have a better trajectory on the direction of economic activity, it's hard to really know where markets settle so it's time to be cautious. if you look at -- if you look at what most economists are predicting, they're predicting slow to no growth in the u.s., they're predicting negative growth across other developed economies in europe. so that event heading into 2023 is one you have to be cautious and prepared for. >> if you have to place a bet on where to put your own business, meaning is it trading at where you think the growth is going to come when you look out over the next year, to the extent there's opportunity if there is one, what is it >> well, i think there's a lot of opportunity with our clients, because our clients are resorting their position, given the fact that the world has changed. we're entering a period where there's more embedded inflation. obviously the fed is focused on taming that. but we're shifting the economic environment materially i think big businesses are looking at how they're strategically positioned and saying how do we adapt to that

scale matters a lot. people are shifting supply chains it's not that everything is onshoring but they're thinking more strategically about certain supply chains. so as you look ahead and think about that, i think our clients will continue to be active and we're there prepared to serve them and we don't really think, andrew, we're not looking quarter to quarter we've got a leading investment banking business, a leading global markets business. we have an extraordinary asset and wealth management platform and all of those are set up to serve clients. this reorganization of the way we're organized really comes out of our one goldman sachs ethos to say how can we position ourselves to serve our clients better. >> you're going from four units to three the markets business gets moved into the wealth management piece of things. there's this new platforms cloud unit that's going to encompass the sort of goldman apple and general motors piece of the card business why break it up that way >> so this is all really driven

through this client lens that i was talking about. one of the things that we're very proud of and we think it's had an impact on the firm's performance over the last four years is the evolution of this one goldman sachs ethos. it started with taking 30 clients and saying how can we serve them across the firm, break down silos, serve them very well. it's now expanded to hundreds of clients. but it's become an operating ethos in the firm. there's synergies between our banking and markets business they have been operating increasingly closing in over the last couple of years when we think about our investing platforms across asset and wealth, we've wanted to really bring those together as we've been able to organize over the last few years and so that was the lens of really doing this. the fundamentals really don't change the leadership does move to different places, but it's the same leadership. a couple of people with different responsibility the financial targets are the same with respect to how we're serving consumers, we really have had two businesses that we're working on

one is a direct-to-consumer business in that business we've learned a lot over the last few years. >> and that's the markets business. >> that's the markets business and one of the things we've learned is that our ability to align with our wealth business, to go to consumers and people that are already on our platform is a strength of the firm and that's a better place for us to be focused than to be out massively looking for consumers. so we're aligning it with wealth and then we have our partnerships, and those are fintech platforms embedded in somebody else's ethos system those operate differently and that's a big opportunity for the firm. >> does it indicate that you've cooled at least a little on consumer is it retrenching slightly and realizing you want to focus on what made goldman great for years? years ago it looked like you were really headed -- >> i think we've learned a lot over the last few years, joe this is an important part of the firm the most important part is we now have $110 billion of digital deposits we need those deposits as a bank we had to diversify

our funding. that's been a hugely important part of the journey. but as we've learned the concept of really being broad with a consumer footprint is not really playing to our strength. when you look at our wealth platform, you look at workplace wealth where we have access to millions of individuals through our workplace wealth offering, the ability to add banking services to that and align to that actually plays to our strength and our fintech platforms, if you look at what we've done in transaction banking, what we've done with the apple card, this is a strength of ours. these are interesting platforms that we can be very focused on creating more transparency around. >> what does it mean that the markets brand doesn't remain you know, goldman sachs is the brand, that's what works for us, that's what we're going to do. >> well, we're moving in a direction really amplifying goldman sachs. we had started when we started this again, when you're innovating and trying new things, you've got to look in the mirror and say okay, this part worked, this

part didn't work so let's make an adjustment. we started with marcus and now it's goldman sachs/marcus. what's the brand out there that everyone really knows? goldman sachs. and so marcus has some brand identity we're going to continue to work on our deposit platform. we're going to continue to offer these banking services adjacent to our wealth platform that's where our direct-to-consumer model plays to our strength. it's a much better customer acquisition strategy for us. and we're excited about these digital fintech platforms. and we think over time we can show people that what we've built and what we have here is really unique. i think what we announced with apple is pretty cool the high line announcement what you'll go on your phone, go into apple cash and link over to a goldman sachs savings account directly out of apple cash that's another example of how when you get into these partnerships and get embedded in somebody's ethos -- >> can you talk about the margin

of the deal with apple i think people have wanted to understand the dynamic behind that arrangement. >> sure. one of the things that you'll see that we're announcing today, and it's in the earnings release, in the earnings script which is now out, is that we've extended our partnership with apple through the end of the decade and made adjustments to it so one of the things that happened that's very, very interesting about the card is we went out and saw the card experience the deal was based on a partnership where there were assumptions. how people behave with this card because of the technology is different. we've now looked at thatand renegotiated so the partnership works for both of us. >> different in what way >> i'm sorry >> what was the lesson, different in what way? >> it's actually good financial health people pay down their balances much more quickly. how does a bank make money on a credit card? it's because people have balances if people are paying down their balances at a much faster rate and you have less because rowers and more immediate payers, the

economics are different. there's something that people are paying their credit card bills multiple times a month that's good financial behavior, that's what you meant. so we looked at it, modeled it differently. who renegotiates a partnership before it's over -- >> but it had better terms for goldman sachs. >> it was rebalanced because it's an important relationship for apple and goldman sachs. there's a lot that we can do together it's a real partnership. we're not just someone supplying money here we've got technology that's embedded in their ecosystem and we're trying to find ways to help people with their financial well-being and moving forward with that. it's a very interesting platform like anything else, we're building something, it's new the results aren't immediate they think about goldman sachs let's step back to the earnings at a high level. tough operating environment. look at our performance, how are we on a relative basis to people

we compete with. we feel good about that, the firm is performing but we're also making investments in things to allow the firm to grow, position the firm competitively. >> you try things, if they work, they work. maybe you take another work. did remote/hybrid work model, is that a success >> well, for goldman sachs, i talked about this actively, we have an organization where 50% of the people are in their 20s of the they come to goldman sachs to learn, to meet people, to interact. for our organization, we had to do what we could do to bring people together on a reasonable basis. and we're kind of operating that way at this point. before the pandemic, about 75% of our people were in the office on any given day of the week today it's about 65% so we're kind of operating close to the way we were. >> do you want to get back to 75 or are you okay with 65? >> i'd like to get back to the culture we had before which is people come to work, do their work, live their lives, have the flexibility to manage. one of the things that was very

interesting, joe, when i looked at the data and really looked at how things operated at the firm before the pandemic, if you broke the firm into people in their 20s versus people in their 30s, 40s and 50s, there are a couple of dinosaurs like me that are out of that entirely, but if you looked at -- if you looked at the data, people in their 20s came to work five days a week. people in their 30s, 40s, had more responsibilities with kids, et cetera. i don't want rules i want a culture we show up, serve our clients, work hard, mentor our people, teach our people, strive for excellence. that's what goldman sachs is all about. i want a culture that promotes that, not a set of rules. >> you are great a risk assessment and jamie dimon spoke last week and i think he concerned people when he said things that could play out he had one line that caught my attention. saying if you need money, you better line it up now basically. if you need that liquidity, get it when you look at the market and what's potentially out there, what do you see? >> well, this goes back to what

i said earlier, becky. i think it's a time to be cautious and i think that if you're running a risk-based usiness, it's a time to -- it's a time to think more cautiously about your risk box, your risk appetite i think you have to expect there's more volatility on the horizon. now, that doesn't mean for sure that we have a really difficult economic scenario. but in the distribution of outcomes, there's a good chance we could have a recession in the united states. >> did you see -- >> i think it's hard to predict. >> if we paid it forward, do we have unfunded liabilities at the federal level that will impact the way we're able to grow stan, who knows, he said we may be unchanged on the s&p ten years from now. >> we've had decades like that before i'm acutely aware of the fact that if you put $100,000 into u.s. stocks in 970 and 1980, i was worth -- it was worth

$50,000. so there's no -- we've lived in a period since i got out of school, i got out of school in 1984 we lived in a period where there have been lots of speed bumps. but if you held your breath for six to 12 months, we marched ahead on this continuation of easier money, asset appreciation relatively quickly in an environment where inflation is more embedded and growth is slower, asset appreciation will be tougher now, are we going to get rooted in that kind of a decade-long scenario i don't know the policy decisions we make from here will have an impact. can we make better energy policy that can last across administrations? can we make better immigration policy can we find ways to do things that allow us to invest in our society in a way that make it easier to shift this and i don't have the answers to that, but certainly we're all going to focus on it if you're a risk manager right now, i think you have to prepare for a more difficult environment

in 2023. >> talking about raising capital, the ipo market is closed effectively how long do you think that lasts? how hard is it to raise capital in this market and as a result do you think you're going to see people taking companies private, not taking companies private how is this all going to work? >> well, you know, i think it's fair to say the ipo market is closed what i prefer to say is the world is still resetting its mindset as to what valuations are if you're going to go public i'd mention it but i'm not sure that it's out there yet. wee a relatively significant ipo coming to market that i think is getting announced today. and just in the context of that, the valuation perspective is a different valuation perspective than somebody -- >> is this the mobile eye transaction? it's been announced. >> so that's an example. so the porsche ipo came. so i think you're going to see good companies that have a strategic reason for going public, you know, going public

but the valuation expectations and discounts are going to be more significant until you start to see a good experience with that and that will move forward. historically, even in tough economic environments, the capital raising marketplace doesn't close for years at a time but there's definitely a reset going on in terms what capital costs, what the discounts are. but at the end of the da companies need capital they need to move forward, they need to investment and they have to look through the lens that's appropriate for today's market environment. i think that transition is going on and you'll see that evolve. >> how do you think of your own valuation, which arguably has underperformed relative to a lot of the other banks the big money center banks >> i notice year-to-date, you know, this year that our stock is down less than the s&p. and i think all the other people will be benchmarked against are down more than the s&p so what window do you want to look at? would i like the earnings power of the firm over time to be recognized more broadly than it

is of course. but i think our job, andrew, is we're growing the firm, we're growing the earnings i'm very proud of the fact since our investor day in 2020, we've grown the brookook value by 40% if we continue to do that. if we continue to grow our client franchise, focus on our franchise, grow our earnings, grow our book value, perform for our clients, we'll do just fine. >> but you see the growth opportunity coming from the platform business? >> our business, our business is our banking and markets business it's a good business. >> no doubt. >> it's the strongest piece of the business but the thing i'd highlight there that we feel very good about, look at our wallet shares over the last three years. some of the growth of that business came from the environment for sure, but our relative position in terms of our wallet shares, our wallet shares have really improved in those businesses over the last few years. and i think that's because of

the way we're serving clients and what we're doing so our wallet and our ranking with clients has gotten better. >> stealing business from where? >> from other banks. everybody reports. add up the wallet that was available. what's our share our shares are up 300 basis points so we've really improved our share in those businesses. we're growing our asset management business. >> historically where does goldman trade to book? is this the right number, 308 and it was at 306? >> we're trading right around book. >> below book. >> so how often are you trading above book >> how often have you been able to buy goldman at one times book >> there have been a number of periods where you could buy goldman sachs at book. there have been a handful of times you can buy it below book. but generally speaking since the firm went public, it's been above book but if you look at the peer

group, most is trading around book or below. i think the market still looks at these large financial institutions through a historical lens. i think they're capitalized differently, their businesses are bigger, broader and more diverse, and their earnings power is meaningful. but at the moment certainly given the environment and uncertainty, i understand why people are cautious. >> would you spend your open money and buy stock here >> i own a lot of goldman sachs stock. >> would you buy at this valuation? >> i'm not supposed to go on television and say this, that or the other. i think we're running a very good company, a very good business we're doing really well with our clients and are focused on our clients. i think we're making some interesting investments that give us niceopportunities in the future to add to the firm. i think the asset and wealth opportunity and our ability to grow those platforms, we're very, very focused on our ability to grow management fees. we put out a $10 billion target and $2 billion alternatives

target we're very focused on those. we had $2.25 billion in management fees in the quarter and so we're focused on diversifying and strengthening the firm, serving our clients. if we keep growing our book value, growing our earnings, i think we'll do fine. >> how many layoffs will we see? >> i think it depends. i think when you look at businesses broadly, i think it depends on what the economic environment is. >> goldman sachs. >> i can't predict. >> will we see some in the next six months >> i can't predict i think you know that we have a process that we do every year where we look at bottom performers, a small single digit number of people that we don't think are working in their jobs. we stopped that during covid and earlier this fall we did appear exercise in that context at the moment we have no other plans. i think for all businesses evening you have to look, joe. goldman sachs' head count over the last two years has grown

8,000 people we've taken our head from 40,000 to 48,000. we're making a significant investment in the underlying infrastructure of the firm we're trying to catch up and invest it wouldn't be sprurprising if had to slowing environment, we'd have to slow their toast >> you know, stay at home. you know, you're not going to come in on saturday, don't even think about coming in on sunday. >> this is joe's mentality >> if i take a walk up from soho on sunday morning, will i find you sitting here doing some work >> i might stop by here. i may be in the taco bell over here. >> we can have some coffee >> i'll be here when the market is open. >> david saulolsolomon, thank yr joining us this morning. >> thank you for having me >> here, here, where we can interact and learn and nurture

coming up, a preview of netflix results. we'll talk to senator mark warner also in the next hour for his take on relations with china, oil and much more. plus get the best of "squawk box" in our daily podcast. follow squawk pod on your favorite podcast app and listen any time we'll be right back. i'm joined by john king. john, thanks for being here. when we're talking esg, how are boards preparing for upcoming regulatory changes >> it's really part of a

multi-year evolution boards are taking a broader role in oversight generally and sustainability is included when we talk about esg, boards will need to get into the details and understand how their organizations are preparing. the bottom line is we expect boards to be more involved, more hands-on as esg progresses >> so that's how boards are preparing. what is it that investors are looking for? >> investors are generally looking for two things first, tangible action on esg, whether that's net zero or pay equity secondly, they're looking for companies to back up bold pronouncements with shorter more tangible interim goals and transparent reporting all the way along. >> what advice can you give to companies awaiting final s.e.c. rule >> we tell all of our clients to get started now. it's incredibly important that the finance function work throughout the organization on sustainability it's also important that all stakeholders are kept aware of where a company is and communications matter, whether it's sustainability reports, regulatory filings, what's on your website

they all counting. be purposeful, be transparent. >> i appreciate your advice and your insights. thank you so much. >> thank you welcome back, everybody. amazon web services said that it plans to invest $5 billion in thailand over the next 15 years. that investment would include date a center construction and purchases of goods and services from regional businesses amazon also plans to set up an infrastructure hub in bangkok, just one month after building a cloud data center in the uae and byd said the third quarter net profit more than quadruples as it looks to extend the lead over tesla byd said strong sales and

broader product offerings are allowing to-t to reduce costs for vehicles byd is owned by berkshire hathaway and the boeing new model 737 max jet, according to reports, the agency has been unable to review the company's submissions for the 737 max, because of missing and incomplete information related to cockpit crews reactions to hazards the move by the faa comes after it said it the aircraft was at risk of not being certified by a december deadline set by congress when we come back, netflix will report after the bell today. we're going to be talking about what investors will be watching for and what the company said about subscriber numbers that stock down 59% in02 22. we'll have a preview next. "squawk box" will be right back.

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joining us now to discuss what to expect from netflix earning after the bell, ken leon, director of equity research it is great to see you so this was a pretty loved stock at 700 we must admit. more 200, i didn't think i needed to know anything at 170 about subscriber growth, how are they going to do the ad business or content it seems like if you loved it at 700, you have to give it a shot at 280

what is more information for netflix to show to continue its climb. does it ever get back to 700 in our lifetime, ken, if we live a long time. >> great, joe. so a lot of analysts say this is a growth stock and aspirationally see large numbers. but subscribers are not growing. 75% are in development markets like the u.s. and europe that could decline next year in the ad free plan an the message from netflix competitor is to drive ebidta profitability and return of capital and netflix this year hasn't bought any stock, does not have a dividend, and we think that the focus aspirationally is on this new ad rate plan at $6.99 per month that could bring in new subs, but it could also cannibalize the higher ad free plan. the last part of the case is

that advertising will bring in 1 to $2 in the next 18 months and that is going to do the trick. we think with recession it is going to be very hard and with digital advertising, you could turn -- you could click off quickly. you know what is interesting, joe, and we've been doing this a long time, netflix can't program investor call. there is no analyst live on the call but we're all looking forward to netflix because it is the leader in terms of video streaming. >> to get people to pay either, it depends on -- whether they feel like they need to have that and then you're back, the onus is on content again and again and just feeding that beast and that is expensive. ot otherwise, the demand could be elastic, whether people keep netflix or pay the higher price or not so we're back to deciding

whether they could keep bringing on the hits. and i don't know i think it is been mixed for the last year. >> it has. and you have to feed the beast we did just release a report on netflix and programming and production costs still are very significant. on the last call netflix management said that wire going to ease off. they have tough competition, whether it is disney, paramount, discovery and others amazon, youtube and then there is binge watching where unlike wireless or even cable tv before, churn rate is high for this business model. so it is a really tough game netflix is very good at what they do. but it is a financial analyst it just doesn't add up to us and that is why we have a sell rating. >> so we have to live a long time to get 700. that is what i'm hearing from you. but we have no time now and we have to go we have to do our own ads programming. thank you, appreciate you.

ken, we'll see you coming up, walter isaacson will talk about elon musk and free speech after kanye west's announcement to buy parler and mark warner on everything from china to oil to inflation don't go anywhere. big hour right ahead on "squawk box" after this.

good morning, could we actually see two days in a row of big-time market gains stocks set to surge as futures point much higher a day after the dow added 500 points another big day for earnings goldman sachs wrapping up the big banks and johnson and johnson shares up as new results are out as well. we're going to bring you the highlights and is china getting set to reunify with taiwan. the secretary of state thinks that the timeline has now shortened. we'll ask as the final hour of "squawk box" begins right now. good morning, and welcome to

"squawk box" here on cnbc live from the nasdaq market site in times square i'm gee kernan with becky quick and andrew ross sorkin there are different ways of saying it. that sounds so nice. >> what is that? >> is china set to reunify with taiwan isn't it weird how we could say it this way or that way and it totally changes what you're saying i guess it does matter on how it were to happen whether you would refer to it as sort of a calm, nonaggressive reunification or whether they just go in and say you're ours. >> whether they vote to reunify. >> there is no vote. this is going to -- >> the question is when. >> but it is a nice reunification where taiwan said thank you may i have another or is it an ugly thing that the world looks at and said we have to take risk off again and that is why i bring it up.

because u.s. equity futures, my next question for both of you, is bear market rally, sharp snapback what level would it mean at this point to turn people slightly from saying this is not anything new, this is just a bear market rally. where do you think we need to go in because right now we could do another -- we did it on thursday, we could do -- >> well the dow is still 18% below. >> the s&p is below 4,000. it is like 3700 or something where do you think it need to go where people say wait a second maybe we've put in a sustainable bottom we're not there now. a couple of hundred points on the s&p before people say maybe i'm wrong and maybe we don't go to 3200. >> but you here someone like david solomon say there is some volatility ahead. >> and then jamie dimon and everything but for today, let's live for today, because we're talking

about 500 points for the dow after a good session yesterday and a big gain on thursday. >> earnings have been pretty good. >> earnings have not been bad. treasuries, that does depend but remember sherry saying 4% on the ten-year, you're getting near a high end of the intermediate range. i guess that is if next year ort year after we're at 6 or 7, then you would think maybe equities are not such a great buy here. >> although some people think they'll have to cutrates by th end of the next year what happens well i can tell you what happens with earnings today. at least with goldman sachs. those shares are higher after third quarter revenue and profit both beat expectations the bank saw better than expected trapding results in the. david solomon joins us in the last hour and he weighed in on inflation, specifically how businesses are dealing with rising prices. >> we're entering a period where

there is more imbedded inflation. the fed is focused on taming that but we're shifting the economic environment materially i think big businesses are looking at how the strategic positions and saying how do we adapt to that. scale matters a lot in an environment like that. people are shifting supply chains it is not that everything is on shore but they're thinking strategically about certain supply chains. so as you look ahead, and think about that, i think our clients will continue to be active >> solomon also pointed out that looking ahead there are concerns about what happens we're going from a lot of liquidity to a time when you're going to be shrinking liquidity and a lot of things could happen in an environment like that. goldman does complete the big bank earnings and if you see how others are trading across the board, morgan stanley is up about 2.4% bank of america up by 2% and citigroup 1.9% they talked about the bank's restructuring. that is one of things that david talked about. >> which a lot of people focused

on and what that means in terms of the commercial bank or the consumer piece of it rather in terms of how that is all going to work. >> it is interesting to see what people are thinking about it meantime, take a look at what is going on in the dow. because j&j is out the estimates for profit and revenue helped by growth and pharmaceutical sales here is what the ceo said to us early this morning he also weighed in on inflation. >> price increases are not an option for us in the space of pharmaceuticals and very limited in med tech. but in the consumer health, we found that the elasticity is still there so the demand is still very, very strong. >> and johnson and johnson did narrow the earnings out look as it remains cautious of the strong dollar. >> let's get back to the broader markets. mike santoli joins us with what he's watching closely today. you heard what i saying, so say

we get 37 and change today on the s&p. right now the consensus is sharp bear market rallies, maybe a retest or maybe 3200, 3400 on the s&p is probably coming so that is where we are. where do you think we need to go for people to start saying maybe we were wrong, maybe this is more than just a bear market rally. because we to 4300 in july and august, remember >> absolutely remember i think you have to hurdle 4,000 before you start to persuade people and take a look at s&p 500 etf which maps it out a little bit for you, joe first hurdle, first of all, before we talk about that is, is the october highs from this month, it is like 3820 so we're not even there at the pre-opening levels the other thing to keep in mind, if you draw this trend line, it is still down obviously. that is also roughly in here where the 200 day average is that is what stopped the rally

in mid-august. so we're talking about 4150 maybe. before you kind of cross that off your checklist for things for sustainable low. i do think that is it is encouraging to have very much underinvested big institutions that is the case for a while very negative sentiment and very few people think that a low is in because we've been conditioned by it. yesterday there have been five up days in the s&p in the last 20 trading days an all five of them 2% gains. so the market was down 5% or 6%, so clearly big one day gains don't tell you what is going on but this is not inconsistent with a base being built around the seasonally strong period so you have to throw all of that in the mix you mentioned the 4% ten-year treasury yield, maybe that is a ceiling on the instrument panel that things look clear take a look at industrials and financials relative to the overall market over the last three months very subtle.

outperformance, those two groups which are cyclically geared. year-to-date basis doesn't look as good. that is economic bell wealthers. take a look at netflix relative to disney. since the day that disney detailed its plan for disney plus this is back here in 2019. not that different in terms of points to point. netflix got the huge pandemic b bump it seems what is the value of netflix as the incumbent and what do you pay for that level of earnings. but this interesting it has gone sideways in a way that seems like it is getting tightly coiled, joe. >> we also saw one other thing that struck me today, and we never know, mike, but it is true that they never ring a bell at the top or the bottom. that is an expression and we know it is true. why do we expect to hear a bell ringing with that final -- we're expecting a capitulation, at a

higher vix we're all waiting for some time of climactic moment. we do think they ring a bell at the bottom what if they don't. >> in a way that is right. but whenever do you see those conditions show up, it is because something really scary is going on. and you're going to have a ceo of a bank saying something, wow more is coming at after this and so, yes, you could see it all line up and some traders are disciplined and say when that stuff is in place, that is when you add risk but you're right, there is no single way that things bottom. i think it is too early to talk about anything definitive happening right here but you just have to be open minded the next 5% or 10% is always in either direction in the way that i view the market. >> thanks. lockheed martin out with third quarter results. morgan brennan joins us with the highlights on that morgan, good morning >> good morning, becky well earnings topping estimates

which revenue which grew 3% short of the expectations. free cash flow of $2.7 billion better than expected 2022 guidance in tact and analysts had been looking for this kind of news following the rocket deal. the top weapons maker booster share repurchases by $14 billion. now cfo telling me 2023 sales likely to be flattish. that despite strong demand, supply chain and covid impacts will carry over into next year he calls the supply chain still choppy and labor is still tight as well. he now expects top line growth to resume in 2024. this is a year later than previously planned and sees an excess of $10 billion in opportunity starting then. opportunity for tactical missiles, air and missile defense, f-35 and f-16 fighter jets, sikorski helicopters and i asked how ukraine filled into that and he told me it will

take time for production to ramp so the defense department earlier this year for lockheed and raytheon javelin missiles is in the order but most of the replenish stockpiles or sell to allies that are boosting defense spending, that is like to take a couple of years to actually translate to sales now for f-36, which is a quarter of overall revenue, next contracts are on track and while the company did receive a waiver for the chinese medal discovered, not fully complete to lockheed is not delivering aircraft but close according to malave. we'll have lockheed's quarter and more on that when malave joins me on power lunch later on >> looking forward to it thank you. coming up, virginia senator mark warner is joining us live right here on set. we're going to ask the chairman of the senate intelligence committee what he thinks of

another term for chinese president xi and what it would mean for u.s. business but next, elon musk and now kanye west we'll talk online free speech and what is going on with rich guys wanting to own their own social media platforms take a look at futures right now. we have some green on the screen dow up a whopping 568 points nasdaq looking to open up. "squawk box" is rolling on after "squawk box" is rolling on after this ♪♪ be ready for any market with a liquid etf. get in and out with dia.

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welcome back to "squawk box. this morning dow futures up 575 points among the s&p gainers. tesla up close to 4% general holdings up close to 4% and cesars and let's talk a little musk social media ye i want to hear what our next guest has to say about this. i wonder if he's excited elon musk has deleted a tweet that appeared to tease a team up with kanye west. who is known as ye now i think the image did show musk and west's faces photo shops on a cartoon with the logos of parler and twitter superimposed, captioned fun time as head and it was zleeted two hours after it was posted. west has agreed to purchase

social media platform parler after being locked out of instagram and twitter. and president trump has his truth social network right now we want to talk about the ultra rich, the ultra out spoken going after digital town squares and what it means to have their own loud online mega phones joining us is elon musk's biographer walter isaac son. a professor and partner and cnbc contributor. thank you for joining us i thought we were talking about you. the assets are shrinking how are you as a member of the ultra rich, do you have a social media site you're eyeing >> i think i'll buy cnbc. >> coming on here is pretty good for you. >> correct >> do we take it seriously how much is parler worth and how much is ye worth is the same situation like with elon, we need financing and debt financing and everything else.

what do you think parler is worth. >> i think it is a niche player that becomes more niche if this happens. and this is pretty interesting because what you're going to see is a fragment of the social media. twitter and the town square, the network is if you wanted to be on it, you wanted everybody else to be on it and hear many people now if you're going to have so many different truth socials and parlors, that say is a bad thing. i think it would be good for the country and for our society to have a few big places where it serves as a town square, where people could talk to people of different opinions i mean parler will be an eco chamber for people who agree with that view point same for truth social. i think if elon musk ends one twitter, his move will probably

be, yes, bring more people in. but try to make it a very broad platform that is not a niche player to certain ideology. >> what do you think elon, it was just a joke, don't you think he thought, wow, i have twitter, maybe ye gets parler we're going to make social media safe for free thinkers there is not -- i don't know whether you call ye a free thinker. i don't know what ye is. he is certainly a controversial figure in getting more controversial as the days go by. >> yeah. i'm not an expert in kanye west. and i don't follow him as closely as most people do. he seems like a troubled individual and has a bit of a problem. >> the latest on elon is what? you've got your finger on the pu pulse of that. >> he said he's going to proceed with this purchase and i suspect he will. he has the financing lined up.

and i think that people are misinterpreting what he would do with twitter it is not about saying i want a couple more right-wing people on the fringe coming in or left wing or whatever i think what he's going to do will actually end up improving dialogue on the platform because i think he wants to make sure people are verified and probably charge a tiny, small subscription fee maybe a buck or two a month. if you want to be on the service or at least if you want to be verified on the service and be amplified on the service and that takes out people who are just trolls and bots and people who are just flame throwers and i think that he's going to want to make it more like we chat or other platforms in which you could pay for content. and so things that are valuable will actually rise to the top if you have somebody who is going to do his original vision for what he called x.com that became

paypal which is have a system in which you have a payments platform on a social network like sub stack tries to do with good writers and say we're going to have good valuable content that people will pay for. >> walter, how do you think about the price at this point and how elon musk may think about funding it over time the reason i ask is there was an interesting piece that william cohan wrote and he suggested in the piece that those holding the debt, if in fact this company lost money or continues to lose money and elon musk weren't to throw his own money after it in the future, they effectually could one day take control of the company and i was trying to understand the thought process given that woe be paying $44 billion for a business that a lot of people have said is worth probably less than half of that at this point. >> well since he made his offer, the price of everything from regular stocks to social media

like snap or meta has gone down. so i assume the market value of it is down a bit if he re-priced it, that would mean that the people that took on some of the debt, who are going to be funding it, they did so at interest rates that were pretty low a few months ago. so it is a little bit difficult to re-price the whole thing. then they could get out of doing it at the low interest rates they agreed to do it so it is somewhat complex. but i think everybody is going to be kind of into the situation the way it was when they first made the offer. >> do you think there is any -- do you see a path for him to make money doing this? >> yeah, i see a path for him to make money doing this. which is basically to turn it not into -- if you look at the revenues per user on twitter, they're very small compared to

revenues per user on anything from google and facebook to youtube, other things. so if you start saying how do we get up revenue per user, how do we charge people to have verification and be on the service, how do we use it as a payments platform so that if people want to put out songs or they want to put out videos or make things just as you would on we-chat, i think there is a lot of ways to make money on this platform i'm not an expert on how much you could do to pay back the interest rate on debt. whether that is two or three years. i think he thinks he could make money and having written about elon musk, i don't bet against him when he thinks he could make something work >> knopp of us are experts and we're showing it it is not ye, it is yeah

if you're at a cocktail or party and you start talking about it, it is ye >> te little time trying to talk about kanye or ye. >> we shall see. we talked about him a lot last week when this happened for the water cooler but if you do, walter, ye. >> thank you , so much, i enjoy tips about hip culture from you, jim. >> all right >> dead pan. >> look at that expression all right, walter. he's going to buy cnbc that worries me. >> well i'm worried he's giving elon ideas they hang together. >> that is right. >> when we come back, maybe you could call it the anti-prius, rolls-royce rolling out with the first ev today we'll speak with the ceo live. and don't miss an all new american greed that is tonight at 10:00 p.m. eastern time on a year's long

investigation to find stolen crypto leading to a young married couple in nhmaattan. and they were pretty high-profile stay tuned "squawk box" will be right back. gang, we need our paranormal services to be more versatile. 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.

coming up, what is a relationship, what does it look like with china if president xi jinping does get a expected third term in office

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welcome back to "squawk box. right here on cnbc take a look at futures we have zbregreen on the screen. up about 571 points. we have some breaking news right now. want to get over to our good

friend david faber to bring us that news. what is going on. >> i don't want to overstate it but we're here at 13-d monitor, active conference. jeff smith about to take the stage. yesterday you may recall splunk shares were up you were reporting on it because that is part of his presentation this morning but wanted to give another name that he'll be talking about and that is salesforce also taking what i'm told is a significant stake in that company. of course it is a huge market cap and so it would be well below any reporting state. but nonetheless, when an activist of his type takes a position in salesforce he's expected to focus on a number of areas that he thinks could be improved while complementing the management he does say high margins will result in significant outperformance versus the investor day targets he believes that outperforming

the targets will result in free cash flow and he believes the valuation discount that is in those shares is largely the result of salesforce sub par mix of growth and profitability. pointing out it is not generated meaningful operate leverage relative to peers in recent years and that its long-term targets are less ambitious so all of those going to be part of the presentation mr. smith will make here in a bit. and we did want to let people know again, now, how do you get active in salesforce in a meaningful way or does that have the possibility of it. these days as you well know, andrew, a lot of people call themselves activists there is a lot of activism but most of it does not result in proxy fights or battling for boards it is a lot of conversation and quiet pressure but that would seem what is going on here with mr. smith and salesforce back to you.

>> when you talk about pressure, what is it exactly that he -- is it just this is a long bet he thinks there is a lot of value there or there is real things that he thinks need to change in a substantial way that he's going to be pushing for. >> i think when it comes to the company's ability to deliver operating leverage relative to peers and improve the margins he's going to be pushing for that but it does not appear that he's going to be pushing in some way for a change in management or something along those lines. at least not at this point but i do think that the focus is going to be on their improving what he believes is a meaningful under-performance versus peers in terms of their ability to deliver margins, and rue. >> just worth pointing out, salesforce is a dow component. we're talking about the dow up by almost 650 points that is a gain of 7% for salesforce and then again add significantly to the dow so this is something that the market is paying very close attention to as you're reporting this, david. >> yeah.

of course you have co-ceo and chris benioff and there is a good deal of organic both but as a result of deals the company have done being quite a inquisitive company. benioff doesn't have a control stake but a significant shareholder. more than mr. smith. but i'm told it is a significant stake. >> okay. david faber. we'll keep our eyes on salesforce all day thanks >> moving the market. >> it is. >> right now let's talk china and geopolitics. yesterday ant tony blinken said beijing's approach to taiwan has changed in recent years. >> instead of sticking with the status quo, that was established and in a positive way, a fundament decision that the status quo was no longer acceptable and that beijing was

determined to pursue reunification on a much faster timeline >> joining us right now with his thought on whether he thinks the time line has shortened is virginia senator mark warner senator warner thank you for being here it is good to see you. >> thank you, becky. >> blinken pointing to this but it comes after comments from president xi talking about how reunification is coming, they would like to do it peacefully but they will do it by any means necessary. >> you have two autocrats, putin with rebuilding the soviet empire and xi confirmed nor another five years has been very clear that he thinks acquiring, invading, taking over taiwan is his life goal. and i think we have to realize that while most of the world's focus has been on the russia/ukraine challenge, the circumstances with china not only vis-a-vis taiwan but in terms of the technology competition with china, i think

that is the issue of our time. >> i would say what is our official policy on this. i know what our official policy is but comments that have come from president biden have confused and muddied the waters here. >> this is whether joe biden being joe biden or a grand strategy, i don't know i do think it is made clearer, i think we clearly maintain the one china policy but the prose's comments at least have been more than a brush back. >> it happened more than once. >> it has happened more than once. >> so what do you think? would we actually -- >> i you need a level of strategic ambiguity. what you do not have with taiwan is that set of neighbors that will come to taiwan's assistance the way there with nato vis-a-vis ukraine. and south korea, japan and other nations in the neighborhood, but there is no formal alliance that would be nato-esque in that part of the world again, though, i don't concern

about potential military activity but i'm also concerned about the notion that if xi put an economic blockade around taiwan, when we still are dependent upon taiwan for every one of our leading edge semiconductor chips. now we passed a law that the chips bill to bring some of that back to america. but in the interim, taiwan is where all of the cutting edge chips that we buy for any advanced material in this country. >> are we getting close to the point of a cold war in this situation, saying we're not going to allow chip sales or semi equipment to good back and forth. >> chips is not the first domain where we're brushing up against china. i was a former telecom cowboy and what was the wake-up call was four or five years ago with 5g, the next generation and huawei where you have a chinese company dominate the field and you also have china setting the rules, procedures and protocols for that emerging technology i think what we have to do and

what i'm doing the intelligence committee, the last functioning bipartisan committee on the hill, what are other areas where we could not allow china to d dominate two areas synthetic biology and advanced energy and all across the realm on the supply chain is both of those fields. >> what do you do to stop them >> i think what we may have to do in this country is it will not look exactly like the chips legislation, with massive amounts of government intervention, but i do think that there needs to be a agreement not just from the united states, but with friends around the world, where we could not allow china to dominate these new emerging technologies. i think synthetic biology is one. think energy from fusion to supply chain around electric battery and artificial intelligence, quantum computing, we've have to have the government play a role to maintain the technological advantage. >> what does that mean for u.s.

based businesses that have operations in china? >> i think if you are not having a plan b, then you're not being responsible. i know starting back in 2017, the intelligence committee went out and did a series of classified road shows where we briefed industry sector after industry sector about both the intellectual property theft, the fact that china does not play by the same set of rules that we play by. at first there was some pushback, post covid we've done another half dozen of those. there is not a business sector in this country, including in even academia, that doesn't realize that the kind of notion that the more we bring china into the world economy, the more take going to be like us, doesn't prove to be the case. >> it doesn't seem to be but you still have apple or tesla that have major parts of their operations there. >> i'm amazed at the comments that elon musk makes oftentimes

trashing our government over site like the s.e.c. and kissing up the community party of china and their regime because he is so dependent on the largesse of the community party to build those teslas in kline. to have that supply of electric batteries. i think that is a concern. >> the biden administration has an ev meeting at white house and doesn't invite elon musk senator, let me ask you -- >> not a good move. >> not a good move let me ask you in nicest possible way that i can and you're have virginia and elections are coming up. virginia, what color is it now >> it was very red got to be blue, it is purple >> but glenn youngkin and others, i read this this morning and couldn't help but think where we are so china is going to have trouble hitting president xi's t targets of 5% growth and the journal points to what many economists say has been that he

has shiftedthe economy away from the private sector, which was very dynamic, and that pro pelled china's extraordinary growth and i said that, you could say the same thing about the united states, this year and you mentioned the chips act and the inflation reduction act. we are taking a lot from the private sector that you would have left to the private sector and probably would in a different administration, and now we've -- >> you're a pretty smart guy but you think actually think -- >> i'm not conflating the two. >> we'll never conduct another semiconductor fab in this country. >> market would tell us if we need to or not if the free market we needs to do. >> from a national security standpoint, i don't want to be reliant on china or for that matter. >> are you okay with the subsidies in the ira, what is called the inflation reduction act. >> i think we should transition to a cleaner energy. absolutely do i think we ought to do permitting reform as well.

absolutely do i think we ought to join every other industrial and have medicare negotiate with pharma on drug prices >> you don't tie anything to what happens in the economy, the inflation. you don't think we overspend or the fed is behind the eight ball because they enabled all of the spending of the last couple of years. >> monday morning quarterbacking on the level of -- >> people said that long before. they said on that friday, saturday, sunday. >> all of the dollars that were spent out over covid, 80 cents on every dollar was spent on president trump. i would vote for it again. because we didn't know where covid would end. >> student loan, you like that. >> i think the much smarter approach would have been a year ago, let's refinance all of the student to under 2%. that would have made people still be obligated to pay. it would have taken advantage of the then low interest rates and i think in light of what we wore doing with small businesses, it would have been a better, more targeted approach. >> and they didn't listen to

you. did they ask you >> we all have input i've been a business guy longer than a politician. i do believe there are things when i agree or disagree with this administration. everybody said the fed needed to move quicker now everybody is saying, the fed is moving too quick. but i would say the comparisons of the volk area, we're sitting on national debt at this point every 100 basis points that goes up, that is a $200 billion spending item of just addition at interest payments. >> we could work on the supply side we could drill -- do you think we should drill on, open up federal lands? >> i think we should be taking better advantage of the drilling we've already done in natural gas. we've gone enough capacity on natural gas not ome to meet us, but to serve our europeans >> vevay terminal and the refining. >> we have need the transmission and the terminals. and frankly even as you move toward a greener energy mix, if

you don't have the transmission lines sh all of the solar and wind in the world won't sox the problem. >> i have a d.o.d. question, if you were following this brouhaha with elon musk over star link and who should pay for the star link uplink if you will that is taking place in ukraine. he eventually originally said he was paying thend he said actually pentagon should pay and then there was a lot of commotion and then said, you know what actually, i'll pay but what do you think? >> i'm not sure i'm going to take that to the bank. i'm not sure that the ukrainians who have used this communication network, i give musk total credit giving help to the ukrainians was critical you then have him suddenly say he's going to be the global negotiator on how to settle the ukrainian war and at that moment in time, cutting off the star link to some of the front lines of ukraine hugely problematic i'm not sure you could make a

long-term bet on mr. musk's daily tweetage >> mean, long-term in what way >> the idea that he's saying he's now gos to buy or pay for the star link. i don't know if you could take that -- i hope so. >> should the pentagon be paying and get into business with him if a different way >> there is a lot of ways that we do -- various parts of elon musk's empire. >> right okay >> senator warner, thank you for your time today. >> good to see you. >> great to see you. >> and coming up, jim cramer take on all oft top stories. our david faber reporting moments agothat jeff smith's star board value is taking a stake in salesforce. they're all dow components which is salesforce. it is. futures are surging. up 600ois. pnt "squawk box" will be right back.

want to get down to the new york stock exchange. jim cramer joins us now. there is a lot of green on the screen and a lot to talk about you have j&j earnings, and goldman sachs earnings and we should probably talk about what is happening with salesforce, a company you know so very well but we just heard from david faber has now an activist behind it. >> well i'll tell you, let's start with j&j

your interview was amazing every single division is doing better the consumer business, the european pharma is amazing goldman, i think that goldman is finally getting it so that -- i've been waiting for them to get it so there is one steady stream that does really well and they're working toward that. the fin tech stream i'm not sure about but i thought he did a good job, the book value at $300 is embarrassing. i think it will be good. salesforce is hard, because there has been brett taylor and doing a good job and the software market is -- i don't know what you could do. >> do you think there is maermg there. >> he clearly thinks there is margin. >> mark doesn't -- mark runs the firm in a way that you could cut margins and i think you could lose some customers. but, looking everybody could use

more what could i say. brett taylor is very disciplined. i believe when i look at what they're doing, i look at what service now is doing they're doing better than adobe. doing better than a lot of different software companies i happen to like smith and when he got involved, he of value. so i would be, if i were mark, pretty smart fellow. >> i don't know if this is a macro question but we had a whole bunch of earnings come in quite positively ahead of expectations for the most part. what conversations sort of dropped off the face of the earth? well, the fed for the most part. >> the earnings are supposed to be terrible. >> that's the question should we be focused on what may or may not be coming after all of this, or have we pivoted? >> i think we have pivoted to new leadership we're buying stocks that have eight and nine times earnings. those are the banks, financial

services, and getting away from software and tech companies selling 200 times earnings that should never have gone up. it's a very nice change, and i think it's a welcoming change. it's just a complete sea change though look, there are a lot of downgrades to the semis today. almost every one, i agree with them china has gone off the grid. if china comes up with a vaccine. say they reverse the mrna or stole it from moderna or pfizer, it will be pretty telling that china could come back online get out of the rich stuff and into the poor stuff. >> we will see you in a few minutes on "squawk on the street". >> thank you, buddy. >> thank you, buddy. i'm an investor...in invesco qqq, a fund that gives me access to...

nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done. i'm okay. (vo) while you may not be closing on a business deal while taking your mother and daughter on a once-in-a-lifetime adventure — your life is just as unique. your raymond james financial advisor gets to know you, your dreams, and the way you care for those you love. so you can live your life. that's life well planned.

>> auto mid serious questions about the economy, the business jet industry is soaring. good morning, beck y.biz jets are back. look at corporate jet deliveries the last 15 years. it may not look like it, but we are looking at the best year since 2009ment they are expected

to jump another 17% in 2023 according to honeywell a wave of new customers buying and flying private jets since the pandemic >> they tried charter, you know, when charter blew up at the end of '20 they moved into membership, fract fractionals. if you get to a certain level, it makes sense to have your own airplane >> we can build exactly what they're looking for. delivery is about two years. it is different than four or five years ago for sure. >> yes, there are longer wait times if you want a new business jet. textron, bombardier. yes, they have been hit the last six months or so they see strong demand price next year, the next couple of years, expected to jump 10% to 15% guys, i'll send it back to you

>> you look so comfortable and at home there, phil. i don't know why >> joe, i'm in a citation longitude. if you have a cool 30 million, this would be yours >> do you look uncomfortable? >> what are the operating costs? >> a lot >> that's what i need to know. >> why do you need to know >> i'm curious >> you don't need to know. >> i need to know the operating costs. >> get a card. >> andrew, it depends how much you're flying it, do you own it. you have to tell me what the use portfolio is >> fractional >> we got to go. >> this is a longer conversation >> ready to drop a mid six-figure sum on an ev. robert frank is here and joins us with a special guest. >> morning, guys rolls-royce unveiling its first electric rolls two-door, a range of 320 miles

0 to 60, 4.4 seconds price tag, $413,000. the most expensive ev on the market delivery fourth quarter of 2023. this follows a record year for rolls-royce in 2021 where they delivered 5,500 cars the ceo of rolls-royce great to see you congratulations on the launch. so, what makes this ev truly a rolls-royce? >> yeah. first of all, good morning i men, the learning from our clients needs to be a rolls rolls-royce. finest materials, flight on land, silent propulsion. and that speaks for what a rolls-royce is when you sit behind the wheel which you're in

the car. it carries the genes rolls-royce is famous for. electrification fits perfect to the brand. silent, delivers loftability our acceleration for that, a brilliant proposition. >> i know you have started to show this to clients what's demand like and what do you see the number of bills being like in 2023, 2024 how many do you think you will make >> i think initial customer order is very pleasing we have even seen here also from the united states over 300 clients who visited us over the last two weeks and who have spine spectre. they deposited it. they hadn't seen it before they put the deposit down. once they have seen it here,

delighted. and i think the order bank looks strong and i'm very optimistic about "spectre"'s future our great suv is one column. the second column is the ghost, our great limousine. then comes "spectre" that is probably the proposition volume wise. >> torsten, thank you so much for joining us again congratulations on the first ever electric rolls, the "spectre". >> "spectre" >> it does look pretty cool. and cool name too. is that because it's james bond. >> yeah, "spectre" >> they have used "spectre" for over 100 years they were way before bond. >> james bond infringed on them.

>> yeah. a quick final check on the markets as we wrap up this edition of "squawk box". futures this morning up 640 points for the dow s&p up 85. nasdaq up 280. so, yeah, things are off and to the races. make sure you join us. right now it's time for "squawk on the street" good tuesday morning welcome to "squawk on the street". i david at the the active passive investor summit. bulls trying to go for seconds after the 20-1 day yesterday dow futures up 650 even though yields have not budged a road map begins with stocks in rally mode sharp gains on optim