third quarter revenue missed estimates. elon musk sounded bullish. and it is another busy day for earnings we hear from at&t and american airlines we have ceos of both of the companies. it is thursday, october 20th, 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. let's look at the equities yesterday was a down day for the markets. for the week, we are looking at strong numbers dow up 2.6% for the week s&p and nasdaq are each up 3%.

i think the nasdaq is up 3.5%. this morning, things are flat. we are watching to see what happens over the next few hours as we start to get earnings reports coming in. earnings have been better than the street anticipated that has been helping for the last several sessions. the treasury market today. 10-year treasury yesterday rising to yields we have not seen since 2008. right now, the 10-year treasury is yielding 4.124% 2-year treasury at 4.45% the yeeields are picking up agan and the dollar versus the yen change rate topped the level of 150 yen per dollar the debt yield hit the ceiling that the central bank vowed to defend the bank of japan announcing unscheduled bond purchasing to

rein things back in from the crazy level of 0.25% boj has a policy meeting next week lawmakers against the policy of raising rates to slow the slump. you didn't think you would see inflation again. you have been watching for decades. the government has been intervening to prop up the yen it spent $19 billion last month selling dollars to buy yen the currency official said he would not comment if they are intervening now or intervened today. this is expensive when you consider global central banks. >> not a lot of inflation. there. >> crazy level 0.25%. >> the nice 4% 10-year treasury that we were talking about yesterday morning. immediately it went.

you know who is back to having the right call greenspan. >> watching the ten-year. >> it is all about the ten-year. especially when we hear people say that the fed isn't really controlling things the ten-year is controlling things >> a decade ago with alan greenspan. he would like to flash the ten-year yield on the screen more that is the most important number he watches. >> go at 4 or below 4? i don't think the fed is as tight if the ten-year is signaling to them. >> i feel the fed is not listening to the markets. >> there is no equity put. >> bonds >> not a bond put. you don't need to do more. things already slowing. >> maybe it is not telling >> hope. hope

hope versus reality. on the sidewalk planner. jobless claims due and we get home sales we hear from at&t and american airlines and blackstone and un union pacific and csx and snap and more we have interviews with american airlines and at&t ceos and the president of blackstone. the number of fed speakers today, they are not here, but they will speak. cnbc will. philadelphia fed president patrick harker as well as fed governors lisa cook and philip jefferson and michelle bowman chicago fed president charlie evans out with hawkish comments on rate hikes. he was speaking yesterday. evans said inflation is much too high and the fed needs to continue on its path to tame it. evans said if prices continue to

spike, the central bank may need to do more to get things under control. you know what that means at least one more 75 and another? >> i think the market is counting in two more 75s with the fed futures. >> i know that's too far let's talk about the future. this guy has the future of the take of tesla. shares are falling after the company's earnings beat estimates, but fell short of revenue. phil lebeau has more with the long-term prediction that musk made on the call about the future of valuation of tesla >> yeah. apple, saudi aramco. nothing that tesla is eventually that is one of his predictions from the call last night this was an earnings report that gave you something to like if you are a tesla bull something to like if you are a

tesla bear mixed reaction from analysts this morning the numbers within the numbers they beat with $1.05 a share over 99 cents a share. margins at 17% the gross margins at 26.8% revenue at 56% growth year over year here is the musk statement about tuesd tesla. >> i cannot emphasize enough we have excellent demand for q4. we have ever car sold as far as the future we have seen. >> that is the same statement from musk in past calls. here is the annual deliveries. 50% annual growth is what they have given as production guidance, if you will. he reiterated that last night. they need to deliver 450,000 to

hit the target that is out there of 1.35 million. could they have a big fourth quarter? that is possible meanwhile, this is a company that is sitting on a cash balance of $21.1 billion that is a lot of money that has people wondering you will spend on a lithium refinery that they confirmed in the call. on the gulf coast of texas what about the cash? is there a chance of stock buyback? >> it is certainly possible for us to do a buyback on the order of $5 billion to $10 billion even in the down side scenario next year. if next year is the record year, we have the ability to do a $5 billion to $10 billion buyback it's pending board review and approval >> he didn't say there would be a stock buyback, but said i can see it happening some time in the next year.

again, guys, there is something in the report for you to grab on if you are skeptical of the near-term and long-term prospects and bullish on the company. you can say they are optimistic of q4 and reiterating the growth no reason to see why tesla won't achieve those numbers. you can see what the investors are saying down 6% in pre-market. back to you. >> phil, apple and saudi aramco. what do you think? >> you do enough of these calls, andrew, you will hear something from elon musk at some point that makes you scratch your head remember 1 million robo-taxis within a year? where is this coming from? he believes that tesla will be the most valuable company. that is not new. combining apple and saudi aramco and market cap and saying tesla

has the possibility of becoming more valuable than both? i guess anything is possible >> he took to twitter overnight and said the media makes a lot of misses in terms of predictions he makes don't give him credit for ones when he was right in the beginning. >> i don't buy that. i think people have given him credit for a lot of what he has done early on, he said we will do this, this and this in the development of the electric vehicle. he gets full credit for that full credit. when you go on the calls and earnings calls, there is where investors are getting an idea of where the company is headed. when you say we will have 1 million robotaxis on the road within a year and you don't do it, you say i got overambitious. you can't pick and choose. that is my take. that's the take of many analysts tony is out with a note from bernstein saying this call did not sit well with him. he found that some of the

prognostications were a bit over the moon they were a lot over the moon. at least the one with apple and saudi aramco >> the guy is brilliant. if you look at track report in valuing companies. look at twitter. he is saying he is over paying on that. it is not often you hear any ceo saying how much they think their company should be with market value. that satis dangerous. >> 100% right, becky he says take what i say with a grain of salt. >> we need to leave our perceptions about cars in general. if you are a car guy, you have to leave it in the past. i'm coming to grip was that, phil seeing a car you go by that is cool now i look it's endless

the teslas not the nice ones. one after the other and identical colors with robots driving. we are never going back to wow, look at that >> we aren't there are two ways to look at that, joe. >> used to go to a showroom. now it is cookie cutters it's depressing to me. >> joe, there are two ways to look at that tesla owners are loyal they stand by the car. they say it is the best vehicle. they love it that cesays a lot on the other hand, you will look at people who say -- joe, to your point -- >> that's the future, i guess. >> -- and they are getting long in the tooth of design and we are a country that has over 100 years of track record where people want to see the next design when it comes to automobiles. will that happen with tesla?

the model s is long in the tooth in design. >> model s is the best one the starter teslas one after another. i see five in a row. ugh. >> phil, they are playing us out. we didn't get to twitter in a meaningful way he was indicating on the call the deal's done. he's taking it >> yeah. that's my take as well >> okay. we'll talk to you, i'm sure, more in the day. we will see you back here at 7:30 this morning with another exclusive interview. this time with the ceo of american airlines. robert isom. coming up, ibmshares up beat on guidance we look at that report next. futures right now. down 11 on the dow how about red? nasdaq is worse down 75. "squawk box" will be right back. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. (vo) while you may not be a pediatric surgeon volunteering

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stronger dollar weighed on sentiment. gets half of the revenue outsid of the americas. let's get to stephanie link who is our cnbc contributor. we have seen better than expected expectations, but barely above last year does that matter >> well, expectations have come down so democratically because we are slowing down in general in the economy we have currency headwinds and inflation headwinds. expectations were low. i actually have been surprised i think they are better than feared valuations have come down on many names i'm pleased, too especially the banks across the board, they did a very good job and the stocks rallied. that tells you they got beaten down and there are bright spots.

>> again, i think the banks earn more in prior years. how did you like p&g did you learn anything a stronger dollar across the board can impact a multinational. isn't it kind of like an extraordinary item almost? it is beyond their control unless they hedge. do you really gauge whether to buy a stock based on currency? >> absolutely not. i don't give them credit when currency helps them. i don't penalize them when currency hurts them. you can say this also about johnson & johnson. i think from both companies, you learned that they have pricing power and they have elasticity it looks like the demand is still there. the only problem with p&g is it is expensive at three times

forward estimates. it trades at that valuation because you get consistent results x currency >> we still are held hostage by yields, stephanie. will you ever convert 30% or 40% of what you do to figure out corporate bonds and how to move out of the risk duration munis? all of those things? if we have ten years of not great stock market activity, it might be good to brush up on fixed income investing >> well, it used to be there was no alternative now there is an alternative. now you don't have to go out to get duration for yield to your point, there are parts of the bond market that are interesting at this point in time let's go back over the long term long term total return for the s&p is 10%

clearly the last three years was not sustainable at 28% we are reverting this year i get it we are shopping around i do think that for the long term equities are a great investment with the way i approach this year is cost average lower because we are trying to buy low and sell high, right >> we have you on a lot. you must be in a different spot. we are taking a lot of hits on audio, steph we want to get you back to your normal spot. actually, when you are talking, it sounds like you are repeating things and you are not people at home are saying what is wrong with stephanie. was she out late i don't think that's what it is. i think we have audio issues steph, see you again soon. i like the back drop ivory tower somewhere.

up next, the biden administration could begin processing applications for student debt forgiveness as soon as this weekend unless the supreme court acts on the application to block the program. we have details after this break. "squawk box" be right back

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the supreme court was asked to block the biden administration's student loan debt relief program. that request by the taxpayer association in wisconsin was directed to amy coney barrett.

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good morning welcome back to "squawk box" live from the nasdaq market site in times square. nasdaq is paring losses with higher interest rates which we saw. quiet mood yesterday with the 10-year treasury at 4.05%. it started inching higher to levels we have not seen in two years which may be problematic the last week has had a firmer tone after we had that amazing thursday turn around at&t looks like it is just out with the earnings and adjusted numbers looks like came in at 68 cents a share above the street street was looking for 61. revenue beat $30 billion versus the $29 billion estimate

if you look at the numbers, they have good news 964,000 total post paid net adds they were talking about the third quarter with the full year, that gets to the industry best 2.2 million in subscribers. they say the second best quarter for at&t fiber growth in the company history. wireless service revenue up 5.6% highest year over year growth in more than a decade the company is raising guidance they say they expect to reach 130 million 5g pops by the end of the year. they said they thought it would be 100 million by the end of the year that double the target from the

start of the year. and consistent customer growth they will increase the wireless service revenue growth expectations now looking at 4.5% to 5%. they were talking about 3% or better adjusted earnings per share, they say 250 or higher for the year the street is 256. i'm not sure that is an apples to apples match. they are raising what they expect the street to hear. we will talk to john stankey at 8:00 a.m. eastern time last quarter, guys, they had decent numbers john stankey talked to us and they said they were seeing slower payments with customers and that put pressure on the stock. that stock now up 2.2% the company had been saying for several quarters since john took over a couple of years ago that they were building the company to deliver growth.

the question is are these the numbers the street has been waiting to see >> when do they make the pivot i like john. this is one of the companies where it is hard to fall off the floor. we are -- the stock has been -- you look at the five years five years down 42%. you go back farther and you are still down this is just a company that has struggled and struggled and struggled. down this year 20% less than a lot of other companies. as you said, hard to fall off the floor. meantime, steve liesman is here. >> it's not that rare. less frequent than it used to be >> nice to see you >> big poll results. quick comment with recessionary earnings from at&t >> i don't know. >> it was crazy. it sounds pretty good to me. >> no recession coming

>> it didn't sound like one in those results. let me go on that is not how people are feeling. improvement in president biden's approval rating. some modest gains in the view a the economy. the public still with down beat views. giving republicans an edge on the economic issues which are coming ahead of the congressional elections. look at what is happening. ten-point increase in the president biden approval rating. what was 36% is now 46% overall. 30% to 40% it is not impressive because all of the gains are democrats coming home. independents up 5 points on the economy, independents were unchanged all of the gains were democrats coming home from going into the 83% which is where your party should be if you are going to have an election the improvement in gas prices in

the quarter. still low levels we will talk about that in a second on o'ccon congressional control. democrats at 46% and 48% for republicans. when democrats pick up seats, they tend to have a larger lead. you have to be four or five points on congressional preferential >> they're down. you mean larger lead they don't have a lead. >> if they were to pick up seats or hold their -- >> they're down. >> yeah. look at the gop. it has double digit leads on almost all of the key economic issues that matter bringing down inflation. plus 15 on the gop dealing with taxes plus 11 for the gop. reducing the deficit plus 11. creating jobs. plus 10. the democrats have the plus 4

for looking out for the middle class. it had been double digit >> that's what you are talking about. >> the most important one. health care. democrats remain bringing in the cost of health care. that is the typical plus 16. they have a substantial lead if the were only about the economy, it isn't, but it would be a shellacking both with this comparison with republicans took the senate. look here. presidential economic approval about the same as obama. state of the economy pretty much the same in terms of those saying it is excellent wages going up that's the one bright spot although, those wages have been going up less than inflation on home values, the lowest level at 32% who believe they will increase views on the stock market as down beat as you have.

you willread the poll at 7:00 on cnbc.com. quickly, guys, before i go in my other job here the peak funds rate hitting 5% this morning. >> wow >> there you go. >> by the end of the year? >> no, that's for the may contract now the peak funds 5% >> unless the betting sites predict it, it is weird. it's like this now gop is favored to take the senate 62 now to take both is 62 the average of polls has been moving in the gop direction. >> it will be part of that poll later today. >> 52. still some that are too close. they can't be that definitive in the senate i don't know which ones they

looking at who knows with herschel walker or blake masters you see the articles about lee zeldin in new york three or four points that governor hochul is up. >> one of the things which has happened, joe, when we did the poll in july, we were after the decision on roe v. wade and abortion was a huge issue. as i said at the time, the people for whom abortion is the biggest issue, women in the 18 to 49 age, also are among those hardest hit by inflation especialliy single women with families they had the hardest time. the thrinflation and immigratio and crime. these are big issues for independents and republicans all i do is look at the chart

and i got three dots independent, democrat and republican i look to see if independents are close to the democrats or republicans. almost every issue, independents are closer to republicans. when it comes to independents, inflation is the only thing that matters. everything else ranks nothing. abortion and health care >> i think you get 90% threat to democracy. it is what i consider a threat to democracy and what others consider a threat to democracy aren't close to being the same thing. we all want to keep our democracy. we think the threats may be coming from different places that's my point. >> you mean -- >> like something other than -- >> invading the capital? not a threat >> invading? okay i'm saying a lot of other things i think of as a threat to

democracy. remember reagan -- >> counting votes. >> that as well. counting votes >> what about throwing out millions of votes? is that a threat to democracy? >> we have seen -- >> one side made up the election inn at tintegrity story? this was a judge the judge said this, joe a judge said this. >> you always say that >> that's what -- >> a judge, not me he made it up, joe it is made up. >> i'm not defending trump we have different views of what is a threat to democracy >> counting votes. >> that is important >> not throwing out votes. not i am vanvading the capitol. >> when everything is suited to voting during the pandemic >> less voting

>> no, no. something that is more -- i don't know -- more integrity >> when you have a conversation and you are suggesting there is not integrity. >> are you worried >> are you worried that at right this moment we are having a c conversation a lie is happening and not integrity in the system. that is wrong. >> democrats have said t. all of the same people stacy abrams >> you are leaning on all of the issues don't go down that rabbit hole you are weighing in on taxes >> if you are worried about democracy, i look at where we are as a country a lot more now other than things in january

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i can't emphasize enough we have excellent demand for q4 and we expect to sell every car that we make as far as the future as we can see >> that was elon musk on the tesla conference call. the stock is off by 5.4% this morning. join us right now is tim higgins from "the wall street journal. tim, what we saw with the stock overnight and this morning, too, where is the disappointment coming from? what was the street hearing on the call >> if you are a growth stock story and the company is not hitting the 50% growth this

year, you have a problem there are a lot of positives if you are long term and bullish with near record profit and more cash flow than expected and the other things and potential buyback next year. in the interim, pain in china and potential rescicession. >> you think musk and others were defensive on the call? >> you look at the results in the last three months and generating cash flow that just a few years ago would have beenim. these are huge ambitious targets they reach this is a company with huge expectations and if you are not meeting those high expectations, you will get punished in the market elon was saying deliveries could

rise 60% this year the fact they will not hit 50% is troubling to some >> let's talk about one of the latest targets i don't know if you call it a target or prediction the idea the stock for tesla could be much more valuable down the road let's listen to what he had to say about future market valuation. >> i'm of the opinion that we can far exceed apple's current market cap in fact, i see a potential path for tesla to be worth more than apple and saudi aramco combined. >> so that's a big number. you don't often hear predictions like that from ceos. elon musk is somebody who will make bold predictions. how do you think that sat with people on the call >> well, it is like babe ruth pointing to the stands

it is not the first time he said it he said tesla would be worth as much as apple. they did it in the last few years. at the time, it seemed ridiculous here he is doing it again. you know, the challenge here is in order to do that, he is building in the math this is the company that is more than selling cars and solar panels and battery packs. it is a leader in autonomous cars and leader in robotics. robotics is where people question the near-term capabilities of the company. hasn't democrat nstrated it cano everything it said or promised that's the challenge some watching the numbers thrown out tend to roll their eyes on it. the faithful are along for the ride. >> what about any questions about twitter? it did seem to kind of make it sound like he is ready to do the twitter deal

>> absolutely. one of the things i was surprised over he engaged on that question. elon likes to avoid other businesses on a tesla call he wanted to get the message out he is ready to go on that. even if he is overpaying, which is what he said. it sounds like, prerhaps, we're getting this rolled up, if you will we will see if he will sell more tesla shares to fund the deal. we will see in the next few days, perhaps. probably why he is talking about buybacks for next year to give long-term investors something to be excited about for 2023. >> he mentioned the possibility of $5 billion to $10 billion of share buybacks he did add like he does in the disclaimer subject to board approval and discussion. >> i was trying to put a floor on things in case people get

nervous? it didn't sound like he would go through with it. >> clearly, investors talking about it on twitter. he mentioned that. this is part of the conversation and concern. it is interesting. here is a company in growth mode they are generating a lot of cash there will be pressure to use the cash some wonder why not invest in more future of whatever things they seem to be defensive on their cap x spend. they are spending as much money as they can to grow the business >> tim, i want to thank you for joining us today tim higgins. >> thank you coming up, it's the hottest sport that is attracting investment from the biggest athletes and investors in the world. we'll talk about the latest name getting into pickleball right after the break. ♪ ♪ connecting to opportunity is just part of the hustle. ♪ ♪ opportunity is using data to create a competitive advantage.

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. welcome back to "squawk box. a growing number of celebrities and proathletes are investing in

pickleball our next guest is here, the co-founder of 35 ventures and boardroom. and he's announcing the purchase of a major league pickleball team good morning to you, sir. >> good morning. >> what is happening we were talking about the crazy popularity of pickleball now you're investing in a team. >> yes, very much. the sport as you know has extended in popularity and i fell in love with the sport this summer and the opportunity to be a part of it was like the first thing i thought about when i got off the court and we did some research and now we've found ourself proud members of mlp. >> it's so fun. >> it's so fun. >> what are the economics of the pickleball universe at the moment >> there was 12 teams and i think after this latest round, there will be 16 teams and by acquiring a team, you're getting equity in the league,

but you own and operate your team with that becomes, like, a blank canvas for opportunity because this is a sport that is growing every day and because of that, the league is evolving and it's a pretty exciting time. >> how does the legal work relative to tennis >> it's different in that being a team for mat, they have these league tournaments and at the tournaments there will be a combination of individual play and team play and compete, men's singles, women's singles, men's doubles, women's doubles. a and mixed doubles. >> do you see talent and you say, you're coming. >> it's going to be a combination of starting to do that, which will be a fun process. and also there's, like, a rating system the league also encompasses an organization which is the official rating system and that

will be very handy >> five or ten years from now, is this something you're going to be watching on tv is this a streaming situation? is, like, there going to be the u.s. open of pickleball? >> yeah, i mean, there is in some regard now. but five, ten years from now, i believe it will be way bigger. and i think there will be these bigger events that will be regional events. we can create exhibitions and build a community around the sport in the city that we're operating our team in. yeah, i think five, ten years from now, you're seeing even more events per year and this thing will be streamed fortunately, like, because they haven't landed exactly on what that will be in the future, i think the possibilities of how -- >> and you're plugged into nike and other companies. what kind of sponsors do you think get behind this? >> i think a ton in columbus this past weekend at the championships, you saw a handful of sponsors that have

already committed. the sport is exploding we all know that >> rich, this is -- you can see all kinds of sports that take off. you can watch the world championship pillow fights and nutty things i think this is different. i think this has the real ability to kind of connect with people and maybe get some real sponsorship community. >> agreed. the community around this sport is what i love the most. just the culture of being on the court, when you play with another pro, they're always teaching you thow to play. everyone is welcoming everyone into the community and the same thing happened when i brought kevin to play with me. he walked in and didn't have much understanding outside of the sport and he picked up on it right away you can see in the clip you're running, he jumped right into it. >> are you going to do celebrity games? >> e mean, i don't think that's the number one goal, but if we

need to challenge some of our fellow owners to bring up more popularity for the sport, i would be happy to. i feel confident in my ability >> what does it cost to get something like this? >> to get tickets. >> to buy the team >> the money is not crazy. it's changed -- it's more now than it was a year or two ago. i think that's why team sports is attractive to people. if you can get in early, the economics -- >> what range? 5 to 10 million. >> no, no, no. >> i don't know about team -- we don't -- i guess there's some team tennis. i don't know if i want to watch a professional team play pickleball. >> the reason why i like that -- there are other organizations and they all do well but i think this sport lends itself to team play. and the fact that you can let an

individual have their vindividul success, the fact that the sport is built around this feeling of community -- >> is it $100,000 for a team >> no, it's more than that but you want these owners to have a healthy economic setup -- >> you got to give us an outlook for the nets what do we think >> i feel good about it. you can't get caught up in one opening night game that happens all the time. we'll be good. >> there was a promotion for durant to get more than 20 points on draftkings yesterday i don't know if you saw it. >> did you take it >> the normal would be minus 800, it's plus 100 you double your money if he gets over 20 points during the first quarter it's 18-3 and he had zero points -- >> that felt like a free bet. >> it was a free bet they do that once in awhile. how about justin herbert passing

for a touchdown -- >> you're a big gambler are you? >> $5. i did put 25 on durant but that covered my losses but i had both playoff teams yesterday. >> nice. >> i had houston and san diego. >> i might be much more involved in that conversation -- >> you can gamble on pickleball, i'm sure

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good morning rising treasury yields putting the brakes on a two-day rally. this morning the futures are a little higher actually in fact, yesterday, we closed lower. but this morning the dow is indicated up american airlines reporting results this hour. the numbers and the exclusive interview with the ceo is coming up and elon musk says tesla is pedal to the metal, even with a potential recession. that stock on the move this morning as the second hour of "squawk box" begins right now. ♪ good morning, welcome back to "squawk box" right here on cnbc i'm andrew ross sorkin along with becky quick and joe kernen. we're playing a little pickleball this morning. u.s. equity futures at this

hour, take a look at where we stand. we're in the green things are moving a little bit here the dow up 133 points. we're going to have earnings for you in just a moment nasdaq up about 13 points. s&p 500 up about ten points. also show you treasury yields that we've been focused on the ten year and the two year. you're looking at the ten year, there it is, 4.117 and the two at 4.563 which may explain a little bit of what's going on here oil -- >> the ten year looks like -- >> down slightly that might have moved things around let's show you oil right now wti crude at 86.98 moving up despite the release of some of that strategic petroleum reserve. and then crypto, take a look at bitcoin right now. a little bit of our indicator of risk these days. 19,210 dollars american airlines just reporting. let's get back to phil lebeau who has the numbers.

>> joe, this is a beat on the top and the bottom line and strong guidance for the fourth quarter. we'll talk about the guidance in a bit. for the third quarter, american airlines earning 69 cents a share versus the estimate of 56 cents a share. revenue coming in better than expected the estimate was 13.42 billion and this is record quarterly revenue. we're seeing this from all the airlines because of the demand and the pricing, record quarterly revenue for american airlines operating margin 6.9%. revenue per seat mile up they gave new guidance three, four weeks ago in line with expectations. q-3 cost per seat mile up 13.9% compared to the third quarter of 19 and capacity does 9.6%. now to the guidance, in the

fourth quarter, they expect to earn between 50 and 70 cents a share. going into this morning, the consensus was for 22 cents a share. q-4 revenue guidance up 11 to 14% compared to g-4. cost per seat mile up 8 to 10% compared to the same quarter in 19 and operating margin, a guide of 5.5 to 7.5% for the fourth quarter. lots to talk about with the ceo of american airlines you do not want to miss this exclusive coming up in a half-hour. and also, guys, about the trend that is not going away, it's only accelerating, people want to pay to go on a premium seat we'll talk about that coming up with him in a half an hour >> a premium seat in coach. >> not a premium seat in coach coach is the seat.

it's premium if you're going to business class or a premium. >> that's what i mean. so it's -- you got a little more room. >> it's not coach. more room. more room. >> it's coach with a few extra inches >> first class is now coach with a few extra -- they were -- they stopped the moving to -- all those pods, phil the west coast and didn't come close to getting one of those actual comfortable pods. it was barely first class. >> right. >> was that a premium seat >> that's a -- well, yes it's a premium seat and it's what people are paying up for not just with american -- joe, that's a separate question about the quality of service for air travel overall but we'll talk with robert about the fact that -- look, they're increasing the percentage of

premium seats. they're boosting it by 46% why? because people are willing to pay up for that. i know you're going to say it's a few more inches, but people are wanting that experience. we'll talk about that with robert isom. >> thanks, phil, we'll see you in a little bit. let's get over to dom chu. he's got a look at this morning's premarket movers what's happening >> it's a lot of earnings right now. some of the earnings headlines are driving some of the early action this morning. at&t is one of those early headliners the telecom giant up just about 2 1/4%, now 2.5% it reports profits and revenues that top analyst consensus estimates helped by growth and the number of wireless customers that get a bill instead of prepaying for minutes ahead of time at&t raised its full-year profit forecast and says it feels confident in reaching its goaling for reaching free cash

flow we'll talk with the ceo of at&t john stankey joins "squawk box." next up, you have shares of dow inc. it's despite a beat on profits and revenues even though the results were lower than the same time a year ago. dow was hurt by rising input costs. things like energy, among others shares down 2.5% we're going to end on what will be driving a lot of the investor chatter this morning tesla shares down 5% right now 850,000 shares of trading volume they posted mixed results, earnings were better than expected, but revenues did miss. elon musk did say that demand for tesla weeks remains robust right now and he has high hopes

for tesla's market value in the future take a listen. >> i'm of the opinion that we can far exceed apple's current market cap in fact, i see a potential fact that will be worth more than apple and saudi aramco combined. >> apple's market value currently around $2.3 trillion and saudi aramco, just around 2 to $2.1 trillion that's a $4.4 trillion combined market value and tesla's market value hovering around 700 billion right now. you can get an idea where the ambitions for elon musk lies adam jonas at morgan saying he thinks it's a solid when for tesla. focus on the battery front taking note of tesla's 84% growth in services and other related businesses tesla shares down 5%

but it's a big weighting, of course back over to you. >> thanks. we'll check in with you a little later. let's talk about blackstone. they're out with quarterly results. coming into $1.06 per share. results getting a boost in fee-related products jon gray is going to be joining us in the next hour. we're going to get a snapshot of the global economy from him given his pulse on so many different businesses around the world. coming up, over the last five years, this stock has outperformed its rivals home depot and lowe's on a percentage basis. we're talking about tractor supply the company's ceo is going to join us to talk about the health of the consumer inflation and so much more. take a check on the markets. "squawk box" coming right back

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tractor supply out with quarterly results earlier this morning. profit came in at $2.10 a share. that was 3 cents above expectations the company raising its full-year forecast it's talking about a range of 9.55 to 9.63 a share the street is at 9.60. joining us right now on what's happening with the consumer, we want to bring in tractor supply tractor ceo and president. thank you for being here today. >> thank you to our team members for delivering an excellent quarter and living our mission and values good morning. >> good morning. it's great to see you. we've been trying to figure out what's happening with the consumer and what's happening in agriculture too. and you guys have a very good finger on the pulse for both of those areas. where do you see the consumer right now? >> i think the consumer is being judicious in their spend they're certainly feeling the weight of inflation and so they're being more thoughtful

around where they spend and how they spend that really benefits us. we're demand-driven and needs-based. we're much like a grocery store for our customers' animals they're also passionate about their lifestyle. so we've seen continued strong sales, sales were up over 8% this quarter on agriculture, i think commodity prices will continue to remain high for the foreseeable future input costs remain elevated, labor costs remain tight, capacities remain tight. the external markets remain wit a lot of risks prices are staying elevated despite some of the forecasts about them coming down. >> what's that mean for your margins and how do you handle those higher input costs >> the team has done an excellent job navigating our margins this year. we've had nearly 1,000 basis portraits of cost come through on the cost of goods side, both

from supplier cost increases but also freight and other types of input costs. we've been navigating that through strategic pricing management and other offsets, particularly in our g and a. and our operating margins will come in 10 to 15 basis points below last year. the team has done an excellent job navigating that. >> there have been some questions about whether or not you guys were a covid play i mean, you really took off during the pandemic. a lot more teem kind of interested in trying to do things in their house, getting bigger houses, bigger yards, and that brought people in to ta tractor supply but you guys have held those customers so far. >> we think our story is unique. as a company that was impacted by covid and we've maintained all the sales growth that we saw over the last three years. q-3 is up 65% in terms of sales.

attribute that to two things one is the secular trends have remained sound and elevated, you know, the industry and the segment that we play in. but secondly, probably half of our growth has been driven by share gain and tractor supply is a unique asset with a set of very competitive and compelling advantages we're investing further into those and it's allowing us to gain significant share, particularly in categories like dry dog food where we're outgrowing the market by 15 points for the last handful of quarters >> where are you stealing those customers from where did they used to buy their dog food >> yeah, really across the board, specialty channels, grocery, mass. as customers are shifting their behavior in those channels, much of it to say online, the pet food is still staying in their instore purchase ticket.

as they come in to shop their full lifestyle at tractor supply, they're picking up our pet food and also point out we've been very focused on maintaining instock in all of these categories over the last two 1/2 years. we would like to have more inventory in our stores right now. and we've got a cost advantage on moving food and feed like no one else in the united states. last year we moved 8 billion pounds of food and feed through our supply chain our cost advantage has allowed us to gain that share. >> have you seen any problems with the supply chain or has that cleared up? >> it's one of the good news stories as it relates to our economy and inflation is the easing up of supply chain. on the vendor side, fill rates and lead times are coming down, fill rates are coming up we're seeing more windows for capacity on ocean containers as a consequence of that excess supply, costs are coming down.

there's a bit of a lag to that, just like there was last year where prices were going up a lot of this business is on structural contracts that take time to renegotiate. the contract markets will lag a bit. but a good news story certainly is the supply chain component of our economy. >> that's great to hear. also this is finally your closing on this deal that people have waited for awhile it's going to expand the number of stores you're going to be in. >> we're thrilled to welcome the team to tractor supply it's been a long time coming, over 18 months it took longer than we expected to reach a remedy with the ftc but the remedy we reached is very much in line with our expectations we now closed on that transaction, we welcomed 81 high-quality stores in the midwest, in an area of our footprint that we previously didn't have a strong penetration

in it allows us to bring all the great things that tractor supply offers and we're excited to be moving forward with the acquisition. >> hal, thank you for your time today. always great to see you. >> thanks, becky. coming up, how inflation might lower your taxes a closer look at the new tax brackets and robert isom joins us for an exclusive interview after reporting quarterly results. "squawk box" coming right back. >> announcer: time now for today's aflac trivia question. name the four states that don't have a statewide sales tax thanere sw when cnbc "squawk box" continues le in your defense; look at the size of that- gaaaaaaaaaaaap!!! is that a goat?! you talkin' about me? gaaaaaaaaaaaap!!! i think this goat is saying “gap.” must be talking about the expenses health insurance doesn't cover. so who's talking about the money aflac pays to help close that gap? gaaaaaaaaaaaap!!! aflac! aflac! gaaaaaaaaaaaap!!!

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into renewable gasoline, jet and diesel fuels. our planet offers countless sources of energy. but it's only human to find the ones that could power a better future. >> announcer: now the answer to today's aflac trivia question. name the four states that don't have a statewide sales tax the answer, oregon, delaware, montana and new hampshire. welcome back to "squawk box" this morning the irs released new tax brackets for 2023 and many americans could get an effective tax break of sorts to adjust for higher inflation here's a look at how those

brackets may be changing >> yeah, andrew, every year the irs adjusts the bracket for inflation. they increase 7% that is the biggest increase since at least 1984. the top rate of 37%, that will kick in next year at 694,000 for joint filers that's up from 647 this year all seven brackets will now have higher thresholds and because wage growth is now at 5% and lags inflation, some taxpayers get a lower effective rate so a taxpayer making $750,000 this year, they would owe 212,000 in federal income taxes. that's not counting deductions and everything else. they get a 5% raise next year, they earn 38,000 more and pay 10,000 for in taxes. that's $5,000 less than they would have paid under today's bracket. so they get a tax cut of about

$5,000 other parts of the tax code adjust, you got the standard deduction increasing by $1,800 that benefits the lower and middle income taxpayers. the estate tax arises to almost a million dollars. >> a little bit of a hollow victory. >> right and you're still -- if inflation is really higher than 7%, you're still not keeping up with the stuff you're paying for. but because we have this weird arbitrage where wages are not keeping up with inflation, at least on the wage side, it's like a small tax cut >> i'm trying to think through the math if you're on the higher end, it looks bigger in a way it may be less. >> if you're on the higher end, on the dollar basis, it's bigger but this doesn't affect sort of income above 700,000 so the very high end, they were already paying that 37% rate

anyway it's really the amount of income below that that -- you're basically paying more income at a lower rate. >> it means the treasury dollars coming in are -- >> are going to be less. so people on -- everybody all the way around is getting bit by this, the government is not going to have the same spending power and you have higher interest rates more expensive to pay off the debt we do have. >> exactly there will be a drop in revenues if today's bracket continued into next year. >> that's interesting. right now the numbers for revenue always looked -- look really great so you think it's going to look a lot worse. >> a little bit. the bigger worry for both states and the federal government is that taxes, because capital gains was supporting all the tax collections last year, were just not going to have that this year new york state is seeing a big drop off in collections. that's the biggest worries, the

economies and markets. >> thank you for breaking down our tax bill. american airlines' ceo is going to be joining us on the company's quarterly results. and later at&t ceo john stankey is going to be joining us to talk about customer growth that stock moving higher this morning. take a look at futures, dow up about 139, 140 points. nasdaq up about 6 points and the s&p 500 looking to open ten points higher. we're coming right back after this

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oh american airlines out with quarterly results a bit earlier. right now, take a look at the stock up 2.5%. that's not bad let's get to phil lebeau who is with the company's ceo they're not sitting. you're not in any premium seats at this point, phil. >> no, but i'm sure robert heard your comments earlier. we'll ask him about premium seats and how many they're planning to add. ceo from american airlines you beat on the top and the bottom line.

give me your take in terms of what you're seeing in the market right now with demand and how strong it is right now. >> phil, demand is strong. we're really pleased, that's powering the results that we're reporting and also the forecast that we're giving as well. but you know what, it goes back to the couple things we talked about long ago which is we want to be reliable and profitable. it's taking us a little bit longer than i would like to get back to reliability. but we're on that track and positive about it. profitability, two quarters in a row, projecting in a third looking to the fourth quarter and it's all fueled by a tremendous comdemand environmen >> your q-4 guidance, going into this morning the expectation was 22 cents a share much better than analysts were expecting. what are people missing and not appreciating on wall street about just what's happening in the airline industry right now >> well, we didn't get a lot of credit that's for sure, in terms of

forecasts. but it really is, demand is coming back strong in all expects, from a leisure perspective, but also business and then this blended trips, people are flying differently. demand is out there. we're doing a good job of servicing it. >> as part of that demand, you and i were talking about people wanting to pay up. this started before the pandemic it is accelerating now are you surprise that had you've got this pricing power that you can use it because people are willing to pay whether it's for main cabin extra, all the way up to business class. >> we've got a great product suite for customers to buy up into and now we're looking at our premium seats. 5 to 10 percentage points higher than they were prepandemic customers want to treat themselves that they're willing to do things and we're giving them a product that they're willing to pay for. >> does that continue if there's a recession? at some point people say, wait a

second, i'm paying how much more for a few extra inches and to get on a little earlier? >> well, there's demand that's out there. if you take a look at where we are, we're back 90% of where we were in 2019 it tells you that we have not grown as much as the economy people want to get in on travel and they're traveling in different way and is they're treating themselves differently. and i think that that's a phenomena that continues not just now but into the future also, if there is any type of stagnation in the economy as well. >> your capacity is still down 8 to 10% compared to 2019. you're not all the way back there. but part of this is taking delivery of new aircraft you know the challenges that boeing and airbus are both facing right now are you frustrated that you can't get more new aircraft quicker. >> boeing and airbus have been good partners. we need them to be great we depend on them for our livelihood and i'm confident that the leadership at bot

boeing and airbus are going to get back on track. what i'll tell you is, we're taking deliveries of 787s and the maxes. the product we're getting off the line is really, really nice. we've got to make sure that that's the case in terms of product quality but also in terms of when they deliver aircraft they got to be on time. >> andrew has a question, but i don't want to belabor this, you say they've got to be great. what would you do differently? if you are sitting down with dave calhoun, what would you say? >> supply chain is a supply chain, but you got to build an enterprise to make sure it services what you committed to i know they're going to do it. they got to catch up we've all had to rebound out of the pandemic they'll do the same. >> andrew, go ahead. i want to ask you this, there's an interesting tweet this morning, sarah nelson who runs the flight i attendants writing

gas prices are a dollar gallon higher than they should be because of big oil's greed we need a windfall profits tax and she seems to be -- i don't know if she's endorsing it or putting it out there i'm curious what you make of that and whether you think that the price of oil is keeping prices up in your world as well. >> hey, andrew, thanks sarah nelson is fantastic. does a wonderful job hey, i haven't talked to her about, you know, the oil profits. but i'll tell you this, at american, we have to be ready no matter what the environment is oil prices high or low, we've got to be able to provide a product that people are willing to pay for and ultimately we can make a profit on that's what we're focused on right now. look, it would be great, it would be wonderful if there would be stability in oil prices, but we got to be ready for whatever comes our way. >> do you think the big oil

companies are keeping prices high, that's part of the problem? >> i can't speak to that i know there's turmoil throughout the world oil markets have been up and they've been down. for us, again, the biggest thing that we have to do is make sure that we are profitable, reliable in any environment and that's what we're set out to do >> all right we've talked about the fact that you think there's been a shift in travel patterns. >> right >> we hear this from every ceo do you think things have changed? do you think that the demand environment that you're seeing right now, it doesn't fade away come the second quarter or by next summer, that it -- it is the new normal, so to speak? >> phil, people are traveling differently. they have come out of the pandemic and they're traveling differently. people want to get out they're spending more on services and things like travel, right? and for most customers, right, they really want to get out and

reconnect. and that's all fantastic for us. as we go -- as we take a look into the future, though, these travel patterns where people are saying, you know what, i'm not going to be the road warrior going out one leg and coming back the same way the same day what they're doing is saying, i'm going to make travel work more for me. that's good for us they're spreading out travel throughout our system. they're buying into premium seats and adding more premium seats going out to 2026. that's good for us and i think it bodes well for the airline industry. >> you mentioned the blended travel there are a lot of people who may have moved away from new york, chicago, l.a., wherever and they may be a one-hour flight away. is that part of the new normal, that they say, hey, i'm in charlotte but i got to go back to new york one week a month now i'm going back and that has added a new dimension to the

travel. >> that's right. it's positive for the airline economy and we're going to make sure that we take it into account and set up our products and our services and our flying to accommodate that travel. >> robert isom, ceo on american airlines, on a day where they not only beat on the top and bottom line on the third quarter, but their fourth quarter guidance, much higher than what people were expecting coming into this morning we'll send it back to you. >> thank you. when we come back, political leaders are wall street traders. we're going to debate butting a ban on congressional stock trading. ibm raising its full-year guidance is it a sign that the long-awaited turnaround is happening. jon fortt is here. he's got a preview. >> shares beat estimates revenues up 6.5% but questions remain about the acquisition of red hat's

performance. what about a possible recession? how does all of that play into the company's future, we'll take a look into whether investors epwald buy into the numbers or ke ay. next on "squawk box.

welcome back to "squawk box. the futures right now in the green at least for the dow and the s&p. the nasdaq has been trying to pare its losses. but triple-digit gains now in the dow. interest rates kind of under control this morning so far. >> okay. ibm reported a beat and a raise in its quarter fears of a spending slowdown with stock holding up better than the s&p 500 this year is it time to ask this question, are we seeing the long-awaited ibm turnaround is the pivot upon us

jon fortt is here to weigh in. >> no. slowdown waiting for an ibm turnaround has been a charlie brown situation with lucy pulling the football when you think they're turning in consistent growth, it does another reorg. ibm had solid revenue growth from a year ago to 14.11 billion. software grew faster than the business overall, 7.5% but the real standout was the z-16 mainframe where revenues jumped 83% i'm not knocking mainframes. powerful, efficient, high margin, but mainframes are not the future mainframes are not going to take ibm to a $200 billion market cap. if that's going to happen, it's going to come from software and hybrid cloud it's just too soon to say that's happening yet. this is kind of a goldilocks

quarter for ibm. it's benefitting from the predictability from its stable customer base and its rare mainframe product cycle. if ibm has grown even every quarter through calendar 2023 with stable or improving margins, then we can cheer about charlie brown kicking the thing, andrew. >> it's clear that the acquisition has gone well. doesn't that count for something? i mean, i don't know where you put that >> yeah, i mean, on the other hand, the ibm turnaround playing around and q-3 is a prime example. since the acquisition three years ago of red hat, ibm has done 1400 consulting projects. hybrid cloud has become an industry standard validating the vision and further focused ibm on making and delivering business software and free cash flow is way up

then there's this piece, a lot of investors haven't unpacked. it's not ibm versus aws. the strategy has been to make ibm is a hybrid cloud bet agnostic if the consulting workforce keeps doing its job, ibm wins when the cloud giants win. ibm gets half its revenue outside the america's region the strong dollar has hammered sales and profits and they still manage to beat on the top and bottom lines ibm has a lot of people, about a quarter million, at a time when labor costs are soaring, but management says they can make them productive and these results suggest it's starting to work the market downturn is just helping us see the ibm turn around, andrew, that's already been happening. >> what about the threat of a recession and what do you actually think what do you actually think here?

>> this is always hard -- >> i know. >> i start out some place and then i write it and i'm like -- the threat of a recession real because particularly in europe where ibm has a lot of indepe independence, they say they have enough strength to carry through. and so much of their business is b2b, they feel confident that what they're doing is mission critical but they've also got some credit exposure in that business, right, in the financing business if things get really bad, do people who are paying for these mainframes on -- almost on a credit card start to default, does that cause a problem for them we'll see. it's a different ibm than we had five years ago. >> jon fortt on all sides this morning. and i have to say, you look like you're sitting straight up and down but the building behind you looks like it's tilted. >> it's an optical illusion.

does that fix it >> a little bit. >> thanks, good to see you. when we come back, political leaders or wall street traders we're going to debate putting a ban on congressional stock trading. and john stankey will join us to talk about growth. now it looks like the dow is up 73 points s&p up just over a point we'll be right back.

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♪ earnings just in from railroad operator union pacific. profit missed by a penny but revenue did beat the forecast if you listen to some of the commentary coming from lance fritz, said they did make positive strides in the third quarter to increase network fluidity, but also added that inflationary pressures and operational inefficiencies continued to challenge the company. the stock not trading yet. over 80 senior federal government officials disclosed that they are or a family member made over 500 trades from 2016 through 2021 totaling over 80,000 transactions while working in the government.

you recognize some of the names on the list according to the review dr. anthony fauci and elaine chao reported sales of funds and stocks totaling up to $600,000 another piece in the journal today, officials betting on some of the covid policies that they were involved with joining us now to discuss this, former congresswoman donna edwards and judd greg. in the same -- right across from that piece, the journal says individual investors are placing fewer trades as the market swoons all of these numbers are abysmal in terms of trading dropping off. this is even before we've done anything with congress >> well, as a practical matter, if we're talking about the congress, you certainly don't want to ban members of congress from having the ability to trade assets, but what you want to do

is essentially make it public so there's disclosure within 72 hours. if you make a stock trade, it's a public disclosure and if people are upset with it, they can talk to their congressman or if it gets to the ethics committee or these very active watchdog and the watchdog organizations you know, we are a market economy and we are built on the idea that people participate in our market economy through trading stocks that's all of america, by the way. especially people who have pensions and i don't think you want a congressman that's separateded from that, they'll just end up with one that they have less contact with and less knowledge of what's bothering folks on main street if you don't allow members of congress to participate in the stock market >> congresswoman, is there a way to at least keep a close eye on individuals benefiting from legislation, from companies they would be involved or benefit or

be hurt by legislation that they're involved with. even if you do make sure that that's transparent, that just seems like you're too close to actually impacting the fundamentals of the business you're investing in. >> well, look, i'm a hard liner on this. congress -- members of congress, people who are in policy making positions should not be trading individual stocks. i think it's harder to police what spouses and children do, but you can certainly police what members of congress do, what senior executive officials do, and i just think, you know, in congress you come across a lot of information and some of that information is privileged information or it's things that are not broadly known in the public and members of congress and senior executive officials should not be acting on that, and let's face it, main street mainly doesn't trade stocks.

main street pensions are invested in funds that are pool funds. there's nothing wrong with that. that's an arm's length from a member or from an executive official, and i think it is high time, past time for congress to do this. i mean, the american public doesn't have a lot of confidence in elected officials and institutions and this is one thing that can help to build that kind of trust in those institut institutions, and it shouldn't be allowed i should serve on the transportation committee and no way should i trade stocks in that committee or the science and what's up and down in science and research this is really insane. the public recognizes that and frankly, we have disclosure now. disclosure simply is not enough. >> judd, have you seen -- you can almost connect the dots on some of these trades it almost looks like certain

members have actually known what the legislation or what, you know, privileged information about what was about to happen ask actually benefited from it would it have mattered you want that to be transparent so that they in hindsight are called to explain that or something or is there a way to make sure it doesn't happen in the first place? >> well, i think the way you make it not happen in the first place is to make the penalty realliy is rear and insider trading as martha stewart will tell you takeses a pretty big penalty, but what you end up with is a movement and i would say it's an intentional movement from the left with elizabeth warren, bernie sanders and the squad to force out congress people who have been successful and replace them with social workers. you need people in congress who understand markets and you need

people in congress who benefit from participating in the american dream by being market-oriented individuals. . >> i don't disagree. >> you talked to her a considerable period of time i believe i get to talk and you get to talk, that's the way this works and this is not the democratic party whshuts down te opposition members of congress should be disciplined if they act inappropriately. they can be disciplined by the ethics committee or the watchdog organizations and clearly, if somebody uses insider information to trade stocks that person may end up a liability through a number of scenarios, but to simply say nobody in congress can trade stocks is basically trying to force out of congress people who have been successful. >> when you look at how we treat insiders of corporations and the various windows that they have

to trade or not to trade, do you think we should approach it like that are there any restrictions you'd be willing to place on trading >> i think that's a distinct possibility. i think if you serve, for example, as the congressman said on the transportation committee you shouldn't be trading in transportation stocks. if you serve on the finance committee you shouldn't be dealing with health care, basically. i don't have any problem with that at all, and i do have problems when you say to members of congress you simply can't be participating in the american-based system. we pay members of congress less than you pay someone in the chicago white sox. the people who you draw into congress are not involved in the economy of the united states in the way you would think you might want have them involved because for many, this is the best job they can get. there are smart and capable people in the congress and the congresswoman happens to be one

of them and i've always admired her for that, but the fact of the matter is the more you restrict members was congress in the market economy the less quality you will get, in my opinion. >> did you say that spouses should not be under the same guidelines because that just seems like, you know, that would be a pretty easy way around any concern whether there was wrongdoing or not. i'm not going to mention names, but we have seen spouses of government officials trading pretty heavily and doing pretty well. >> i just think it's more complicated when you're policing people who didn't run for elective office and do not hold policy positions and it's more tenuous. i do think there could be rules share between spouses and not privileged and anything in the public view i think is fair game, but the reality is that --

look, i do think members of congress should be paid more i think they should get a housing stipend. i live in the washington region, i didn't care about that, but i care about it for my colleagues, and i also think that it's very important for us to put the kinds of rules in place that give the public confidence that their business is being done, that it's not -- that the information is not being used for personal gain and you know, choose not to serve. >> congresswoman, thanks senator, governor judd gregg, thanks >> always a pleasure thank you. coming up, more earnings interviews that you don't want to miss. we'll hear from at&t ceo john stankey and results, recession risk and more. stay tuned

"squawk box" will be right back.

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...and driving the world forward to a greener energy future. (applause) ♪ ♪ opportunity is setting a goal... ...and charting a course to get there. sometimes the only thing standing between you and opportunity... ...is someone who can make the connection. at ice, we connect people to opportunity. good morning another trading session, another round of wild swings for the markets. we will bring you a unique perspective this morning from blackstone's jon gray and earnings central, at&t among the big reports before the bell. ceo john stankey will join us

with an at&t as that stock is moving higher. breaking news on the labor market and set to hit the tape as the final hour of "squawk box" begins right now. ♪ ♪ ♪ ♪ good morning and welcome to "squawk box" live from the nasdaq marketsite along with becky quick and andrew ross sorkin futures have been mostly friendy. now the nasdaq is actually in positive territory and that's been the laggard and down most of the session earlier it was all red the dow turned initially after, i guess, yields seemed to be more well behaved today on the ten-year, although the two-year is up all of the way to 4.57

4.13 on the ten-year we get used to more and more incremental additions to it, but as long as it's not 4.25 and then 4.50, the market can digest that. >> we're like frogs in the boiling water. >> exactly do it slowly and we -- >> might not notice. >> and then it's like a jacuzzi and you might fall asleep. dom chu. >> i could use a jacuzzi given what's going on and relax. let's get earnings movers in front of you we'll start with the alternative asset manager and that's blackstone, private equity giant moving in thinner pre-market trade and 3,000 shares or so have changed hands the ongoing market volatility have sold their assets at

favorable profits and the assets under management total did rise 90% to $151 million. a bottom line beat for plaquestone. danaher now which is down 2% pre-market and 15,000 shares of volume the medical device diagnostics and services company beat expectations danaher said it saw broad-based growth along business units and margin expansion and that is down 2% right now. one analyst call that's leading to some upside movement in dick's sporting goods right now. you can see they're up over 3% roughly, it's just 7,000 shares of trading so far. this is helped by analysts at oppenheimer from a prior market perform. they've also established $138 price target they, like among other things to capitalize on post-pandemic consumer demands and dick's sporting goods up pretty good

and 3% up in the pre-market. >> in the meantime, at&t reporting better than expected quarterly results this morning and joining us to talk about it is john stankey, at&t's ceo. the numbers are better than expected and just in terms of subscriber growth numbers and that's a big part of the story here what happened? >> what happened is we continue to make progress around what we told the street two years ago we were going to do, and i think actually the subscriber numbers are really impressive and really good and demonstrate a lot of hard work and progress i think more importantly, we saw the profitability shift that we said was coming in the second half of this year through a combination of as you see stronger etfs than what analysts are expecting and our cash flow's in a much better place and record ebitda in the growther and strength and when we see the growth of revenues starting to match the ebitda

increases and that's the profitability dropping to the bottom line that we told people was going to happen and i think i'm really pleased about that. >> part of that is because you raised prices earlier this year. what was consumer reaction to higher prices. is that something you took is it sticky >> last quarter that price change has gone exactly as we expected it to go. we knew that it was going to be accretive and it's been that most importantly, it gave us an opportunity to talk to a lot of our customers and in many instances what customers elected to do is to move to higher value plans and they moved into a plan that had a slightly higher monthly price on it and gave it more value and updated the services that they had and the features that they had that maybe the older, embedded plan didn't have it and they ended up walking away and feeling like they were getting more for what they were paying because they were we were able to see most of that stick and see an uptick in this

quarter and that was expected because of some of the pricing changes that we drove through, but overall we're really pleased about how that's worked out and the offsets against some of our cost inputs ultimately is what allowed us to keep ebitda margins stable and in turn of what was a great quarter on the profitability side >> as a result, you are raising some of your guidance in key areas and part of this is the pop, 70 million and now the number is 130 million. what's happening when it comes to 5g? >> as you noticed we were hotter for the quarter than what analysts were probably expecting and most of that hotness on capital investment is coming from investments in the network. either fiber or what we're doing around 5g. we have a clip going on 5g deploy want that's really strong and we like the efficiency that's going on and getting

additional coverage is helping the network better than before and we stayed on that course and feel that's better for our customers. we're comfortable that we'll hit 24 billion for the year and kept the momentum going as long as we had it so what we looked at right now is a strong performing network we like the fact that we have the latitude and the flexibility to invest in the cycle right now because it is, in fact, that improved network on both fiber and wireless and it's giving us the good growth and customer subscriber numbers >> last quarter, you came on with pretty strong numbers and in the interview when you were speaking with us, you talkeded about how you were seeing a slowdown from customer payment times and there was a two-day delay. customers were slower in paying their bills and the street read that as an indication that the consumer was weaker. a lot of people said this

because we were going into a session. what can you tell us about those same sort of statistics three months later >> i think when i spoke with you last quarter, becky, i was pretty clear that people weren't paying their bills and they were taking longer to pay their bills. >> there's been no change. we actually see the exact same dynamic and last quarter has stayed exactly where it is and you know, look, the pandemic people were a little bit more flush with cash and they weren't going out eating and they were managing their bills differently and we're seeing things return back to a normal state i didn't see anything in the last 90 days that's any different than what i shared with you a quarter ago so do i believe that the country has to step back and ask are we going to be in for a somewhat rocky or uncertain 2023? i've been pretty consistent in my point of view that a

circumstance, we have inflation running as high as we do that that's not healthy for this country. it's not healthy for the economy and i'm still concerned about that and we can see that there's evidence and pressure those individuals who maybe aren't as flush with cash and live a little more paycheck to paycheck we service the entire breadth of the american consumer and there are segments of the base that if the economy sours we'll be working through dynamicses about that and services are extremely high on the priority list and some are right underneath food and we expect they will continue to pay and buy our services and albeit, they'll have to manage a more difficult environment. >> john to that point, what do you see in terms of device sales? we've had the new round of apple phones and the report of the information in the past 72 hours suggesting that apple may cut

production of its 14+ -- 14 max plus phone given demand. are you seeing anything there? >> i saw a really strong quarter with 2.2 million post-paid net ads since the first of the year and that's remarkable performance for our business that 2.2 million is probably going to be the best in the industry as everybody reports this quarter, would be my guess, and we've been incredibly strong i think we've been getting our share plus more in the industry. so i feel really good about where we are overall and what it means to apple's business and aggregate. i think apple is probably in a better position to answer that. >> john, what are you going to do about the streaming wars, geez -- wait a minute, that's not your problem anymore, is it? i'm referencing back to that >> you still own a big piece of it, but it's not his decisions yet, john. it seems like you just doubled

down on kind of of a commodity business which is really tough the stock's still tough to move. i guess if you focus on your ps and qs, satisfy customers and do all that you can to be the best you can be at this that the stock price will eventually take care of itself is that what you think at this point? >> i think what we know throughout history is when the cash shows up the stock goes up, and i think this team is demonstrating that it's doing the right thing to grow revenues and now drop the cash yield improvements to the bottom line which is exactly what you saw in this quarter it's what we've shared with the street and provided guidance that you see next quarter, as well and all we can do is come in and control what we can control and this team is very focused on getting the fundamentals as you just indicated, and doing the right things for customers and executing well behind that and the stock eventually sorts out what reflects in the results and

sometimes there's a lead lag issue and we may be in those moments and we understand that we have to build back the confidence of investors and i think we're doing what we need to do every 90 days on make that happen and we'll continue to do that and unlike andrew, i personally like the movie rocky and i think people do get up off the floor and they work hard to do that and i'm proud of this team. >> you're listening to early in the morning and you should not be watching the show so early in the morning. >> everybody should watch. >> who approached lebron is lily trying to approach lebron did you have to pay him? he's got so much money does he just like to do it at this point >> think it's time to move on, joe. >> you think what? >> you're trying to move on and take lily's job, maybe >> i'm sorry the transmission was a little bit garbled there, joe >> i was talking about lebron

commercials and i'm watching and whose idea -- that wasn't your idea and you're about the same height >> look, lebron does a wonderful job. he's incredibly good at what he does and lily does a fantastic job, too she's been a mainstay with this business and been fantastic in delivering our messages and it's frankly, one of the things that i think has been a consistency of market performances and how she delivers the message and what she delivers and we're pleased to have both of them >> john, you're raising your guidance from continuing operations to 25 0 or better if you look at the estimates on the streets right now on an adjusted base us they're looking at 256 is that an apples to apples comparison or is that something different than what the street is looking at? >> you hit it on the head. i think the 256, becky, is prior to the divestiture of the other assets that are not a part of the continuing operations and

our adjusted eps is reflective of our continuing operations. >> is there a way to break out how much the discontinuing operations contributed just to try to figure an apples to apples comparison or too much spoon-feeding? >> i think that will get normalized over the course of the next several days, and i think what you should look at is at 250 and we're a strong beat from the continuing operations from where we were in the beginning of this year and that's an artifact of what i indicated earlier which is what you're trying to see the profitability momentum come to the bottom line. >> you've told me the solution to the high yield just to get the stock price up, and i realize that and the deal today is 7.1% and my question would be is that dividend yield safe if it stays at 7.1% >> we'll generate $14 billion of cash this year, becky and this quarter, our cash from operations was up 10% year over year and that's the yield

dynamic i'm talking about and our dividend coverage is an $8 billion issue and there is no issue here >> john stankey of at&t, thanks for being here, john >> thanks for having me in have a good day, everybody. >> good to see you >> coming up, blackstone's jon gray on his company's performance on recent market turmoil and joining us virtual today for the disruptor 50 summ summit among special guests i'll be sitting down with moderna's ceo with stefan about life after covid and maybe life continuing with covid at this point and you look at some of the numbers. go to cnbc events.com to register stay tuned "squawk box" will be right back. s by streamlining your data across cloud environments with netapp cloud services orchestrated by cdw. with greater accessibility and control, you'll be able to accelerate innovation, bring the flexibility of the cloud to your environment, and reduce your infrastructure footprint to contain costs

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we have to share our signal with the entire neighborhood. yeah, now we do some weird things to get our speeds. well... i'm up. -c'mon kids. this sucks. well if you just switch maybe you don't have to be vampires. whoa... -okay, yikes. oh sorry, i wasn't thinking. we, uh, don't really use the v word. that's kind of insensitive. we prefer pro-lunar. yes, much better. welcome back to "squawk box. the futures right now all green. green across the board let's take a good look at that and just savor it for a second the s&p's up nine. the dow up 128 and the nasdaq indicated up 11. when we do the yields when they're green the yields are going down. >> yeah. we don't want green.

we want red -- right >> exactly >> although equities are green -- >> it's 4.13 it's not 4.3 or 4.4. let's talk about blackstone distributing earnings per share coming in at $ 1.06 per share and revenue coming up above analyst forecast with a jump in related profits. ginning me is jon gray, chief operating officer of the blackstone group let's talk about it because while the numbers were better than expected, fair to say that the titan financial conditions have forced things to decline in many ways and made it harder to sell stuff so where are we we always use you in a way of a fascinating proxy for the global economy. >> andrew, it's great to be with you. i'll start with the quarter for us, which was pretty remarkable.

obviously, the market's backdrop was really tough, but we protected capital for our investors and that's the key we delivered outperformance. it's a function of the fact that we've been anticipating inflation for some time, and i think we've done a really nice job in sector selection. a lot of exposure to energy. energy infrastructure to travel-related businesses, to global logistics, to floating rate credit and the that allowed us to outperform that outperformance continues to lead the inflows so we had 45 billion in the quarter and 143 billion year to date and a record for us in that period and as you pointed out, the financial results, despite the challenges, very strong. fee-related earnings up 51% and it is a much tougher environment and we should talk about that, but we are pleased with our performance. >> life is relative and you're doing well on a relative basis

to what is increasingly a tough environment out there. you've had to mark down the value of a lot of the assets and just speak to where you think we really are in terms of -- i don't know if you want to call it a ball game, but what you think is happening in the economy? >> so i guess i'd start by saying the fed, i believe, is beginning to have success on its goal to slow the economy and slow inflation. >> at the same time there's still a fair amount of ement mo up in both if you think about what's going on and think about the fed almost as the doctor administering a shot to the arm of the economy, basically triing to slow things down. the immediate impact has been in capital markets. stocks have gone down by 20%+ this year and bonds by 15%+ and credit markets have tightened a lot and that's gotten to move to

the rest of the economy starting with the capital side of the economy so the good side is slowing. we're seeing container shipping slow down in our portfolio and the furniture business is slowing. the for sale housing business. when you have 7% mortgage rates and that starts to slow down so as you move deeper into the economy you still see a lot of strength, as i evementioned in travel unemployment today is still up 3.5%, but when you talk to our companies, what you're seeing is they're becoming more cautious on their hiring plans and they're thinking of spending less with capex and so you can feel things start to slow and the fed policy does work with a lag. i was talking this week with a large apartment developer who has 15,000 units under construction his budget six months ago was to do another 15,000 units in 2023 he has now shelved 75% of those

units and so when you think about the workers there, unfortunately next year will look a lot tougher so i would say the slowdown is working its way through the system, but it takes time. >> and so how do you think, though, about this next year in terms of deploying capital are we going to look back and say, you know, vintage -- you know, vintage q4 '23 will be like one of the great vintages of all time or do you think this challenge will persist even longer what's your outlook? >> i would say in general after markets correct and prices go down the vintage is better it was certainly true in the early 2000s and it was true in 2008 and 9 and in the early downturn in 2020 and it was hard to pick the exact bottom because markets tend to bottom six to 12 months before the economy bottomed, but in general, when

prices come down, when it's harder to finance transactions, the investment opportunity set is better. specifically today i'd say the most interesting area are providing credit because the capital markets have slowed so far $320 billion we have in the credit market and that's interesting and i think on the screen, andrew, because stocks have fallen and some of the best sectors we like, we think there's more opportunity there >> in terms of credit, how should we think about how people describe the shadow banking systems and to the degree that some people worry about not just a soft landing and a severe recession and i don't know if you're in the jamie diamond camp that equity can fall 20% and the folks that really worry about stuff, they say i'm not worried about the banks, but i'm worried about everybody else should we be >> i don't think so. it doesn't mean there may not be more defaults in the future as

the fed takes rates up and the economy slows, but if you think about private credit, it's generally if you think about our non-traded gdp it's one-times leverage that are 12 to 15 times leverage they're generally stand alone entities and not part of oa system that's a systemic risk. they make a loan to a company, they hold that loan. we think that's a very good model and today as the banking system has locked up a bit and as the capital markets have locked up, the idea that we have a robust private credit system in the united states i think is very helpful to the economy. we view it as a positive for the system >> and then finally, real quick, on assets you do hold and own that you were thinking about selling, do you say to yourself i have to hang on longer do you think you sell in the next year? how does it look

>> in general, when you get to this kind of environment with a high degree of uncertainty, you know, you tend to pause a bit when it comes to dispositions. we saw a window in july and august where the markets were better and we exited some private positions and public positions and when volatility is high you tend to be more patient. the good news is with our model we're not a fore seller so we can pick our moments and at some point the sun comes back out and you sell some of the businesses and assets we own. >> jon gray, we have to leave it there. we have breaking news out of the uk in the world of politics that may have an impact on the economy as well. thank you. >> thank you all right. that news is multiple media reports saying that prime minister liz truss will make a statement coming up at 8:30 eastern time that's just a few minutes away obviously, her entire prime ministership on the line here.

more mps from her own party has been calling for her resignation of bank bench conservatives and that's a group that decides a vote of no confidence with the prime minister we will be back here and take you live as it happens when we return, some breaking news on the nation's labor market weekly jobless claims are minute away, as well. the futures are indicated higher fures up by 181. stay tuned you're watching "squawk box" and this is cnbc what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq

some breaking news we are awaiting a statement from uk prime minister liz truss. she is expected to approach that podium at any moment here. we do not know exactly when she is going to say, but obviously there's been a lot of concern and turmoil in her very short prime ministership it's been less than seven weeks. during the course of that time we've watched the collapse of the pound, we've watched the intervention from the bank of england being forced we've watcheded a standoff with her own financial minister who has since resigned last night her home secretary also resigned and took some shots to the prime minister on her way out the door more members of her own party have been calling for her to resign and we are waiting to see what she will say this morning with the live shot right outside of 10 downing. we will bring that to you as soon as she starts speaking and

in the meantime we're looking at the weekly jobless claims and let's get right over to rick santelli who is standing by with the numbers in chicago rick >> yes 214,000 on initial claim, that's 14,000 less than 228,000 last week which still may get revised and 214,000 as it stands would be the smallest number going back to the third week in september when it was 190,000. 1,385,000 is continuing claims very close to expectations and in the rear-view mirror 1,364,000 so it is a bit better and actually it's the best level going back to the first week in september when it was 1.4 million, and if we look at the october read on philly fed index expected to be down five it's down 8.7 -- down 8.7 and that's the weakest since july when it was down 12.3 and it

underscores how manufacturing definitely seems to be folding in on itself these days and if you look at the response in the marketplace, there are several things to pay attention to and we see that after cycle high yields yesterday and we're easing back on everything from threes to 30s and twos are basically unchanged to a smidge high higher to 256 and many are saying the terminal rate is 5% and there's talk out there about exactly how that will turn out and do keep in mind that the yen continues to get hit against the dollar and it's at the lowest level since 1990 the bank of japan forced an emergency buying in the bond market and despite that, we're still at seven-year high yields and keep in mind, record imports and exports in japan and that speaks volumes record imports because they have no energy, they have to import it all record exports because the yen

is at the weakest level since 1990 and in some perverse sort of way those balance each other out. makes my brain explode becky, back to you >> just watching those things today as they're trying to support the yen, that has been something to behold. they don't want to raise interest rates while the rest of the world is raising interest rates and they have this incredibly high level of 0.25% and that's a really tough game to fight >> yeah. oh, it absolutely is we all know the bank of japan will literally lose this balthd and it's been going on for decades and it makes investors wonder how that affects other large economies that are basically moving down the same path, albeit well behind the chapters that japan's in >> rick, thanks. let's bring in steve liesman and get the most out of the latest data point. what do you think, steve >> you know what you haven't

asked me about these past several weeks is ian remember a storm would come through and all i would do is give estimates of the economic impact. >> hold that thought for just a moment liz truss. >> i came into office at a time of great economic and international instability. families and businesses were worried about how to pay their bills. putin's illegal war in ukraine threatens the security of our whole continent and our country has been held back for too long by low economic growth i was elected by the conservative party with a mandate to change this we delivered on energy bills and on cutting national insurance. we set out a vision for a low-tax, high-growth economy that would take advantage of the freedom of brexit. i recognize, though, given the situation i cannot deliver the mandate on which i was elected by the conservative party.

i therefore, have spoken to his majesty the king to notify him that i am resigning as leader of the conservative party this morning i met the chairman of the 1922 committee sir graham brady. we've agreed that there will be a leadership election to be completed within the next week this will ensure that we remain on a path to deliver our fiscal plans and maintain our country's economic stability and national security i will remain as prime minister until a successor has been chosen thank you. >> that was a very brief statement that we just heard from prime minister liz truss announcing her resignation less than seven weeks after taking that position. this is a decision that came about after meeting this morning with the 1522 committee of back bench conservatives. those back bench conservatives have been very upset with the u-turn and u-turn and u-turn

again that they've seen under truss' leadership and have been more and more of them calling for that resignation and that is the group that calls for a vote of no-confidence that vote would not have to be taken because they've convinced her to resign. a new vote will be coming in the next week as leadership election and she will stay on as prime minister until that points you see what's happening rid now with the footsie 100 and the stocks are higher, but the markets have been front and certain through her very brief tenure, again, less than seven weeks. the bank of england being forced to step in and prop up and do some gilt buying at a time that they were supposed to be tightening and we watched this because the pound plummeted and is now almost at parity with the dollar and watching that over the last couple of weeks has been the huge story and again, the bank of england being forced to intervene and coming it a head saying forget it.

we're not going to do it anymore and that was the beginning of the end for liz truss' government >> he's the one who did 50 when we did 75. that's when the pound started collapsing it's kind of interesting the way it works she fell right into his clutches, it almost seems like >> the bank of england governor. it's -- >> bailey, not barnum. >> it has been a bit of a circus and you are seeing this continue to play out in the market today and that resignation coming after many calls and it heighten in the last 12 hours let let's head down to 10 downing and arabile, what can you tell us today >> that official statement coming through from liz truss the prime minister setting forward that she, indeed, will be stepping down as prime minister just as she finishes

that statement the rain comes down, a sort of a signal if you want to call it that, bringing down the end of her time at 10 downing street. certainly that statement is clear and evidence that the meeting that she held just before that that the 1922 committee chair graham brady, and of course, then her deputy prime minister that kind gave a sense that things were moving in a particular direction and a clear conversation has been had and her leadership under a lot of scrutiny of late and that definition or that statement really coming on the back of the resignation then of one of her mps just last night. of course, on friday, then we saw the departure of the finance minister quazi kwarteng and september 23rd is that budgets

speech was brought forward and that was what determined her path this way because she had put forward a whole host of unfunded tax cuts which affected the market, creating a hit then on the pension market and it's particularly the gilt market forcing the boe to intervene and quite a few members saying she needed to pull that back that happened at the conservative party conference before the initial u-turn then on the big tax element then which was, think, the taxing of the upper end which is said to be decreased from 45% to 40% so quite clear that the statement put forward today does come under a whole host of pressure and certainly we're bound to see who takes over the reins is the interesting element at this point in time and some names that are being touted and she did go up against him in the fight against premiership before

she was announced earlier last month and before that other candidates we've had, include believe it or not, penny morgan, the leader of the party in parliament at the same time and we've also had the former prime minister boris johnson, actually, stand as a possible successor to liz truss just a few months after he step down from 10 downing street. >> that would be something arabile, thank you let's bring in rick and steve and talk about the market's reaction to this and the economic implications. rick, what are you seeing right now with the markets >> listen, don't take this the wrong way, but i'm not seeing, from a market perspective, it just doesn't seem to fit the resignation. the pound is well off its worst levels i believe its worst levels were right around 106.5 right now i don't believe i have a screen up, but it's trading close to 113

interest rates have risen dramatically i think the thing is the fact that she flip-flopped and the rate cuts. if you think about the interest rate scenario and the fact that they were unfunded, and you look at the numbers against debt to gdp and any metric under the sun that wasn't as extreme and there was a lot of politics embedded in this story and i do think changing her mind, the way her man came up with the plan that pulled some of it back and once you show weakness from a political standpoint is game, set, match from a market standpoint i would be hard pressed to tell you right now that i can tell you any of the events going on by looking at the markets solely in a univision and a microvision format this point in time. >> to that point, the conservative parties issues its own issues that have been spray out for everyone to see on this,

and braverman who was her secretary who resigned last night. she had great concern about the direction of the government, but i have serious concerns about the government to honor the commitment a lot has been happening there steve, this became more than a uk story >> it was a dramatic sell-off, and i remember the morning that i came on and kind of butted into the show with, this is happening over here and it matters to us ask all fixed income around the world were moving on this and rick is right that when they did a little exam nation of it it wasn't quite the huge issue, but it was the markets telling the government that you cannot do this in this particular environment and if you look at what happened to the ten-year gilt this morning yields were substantially down, they were

down to 3.80 and they're back up a touch this morning and now we've separated into different camps or different unique financial situations rate now, not really trading so much sympathetically, but it was a warning shot, and i'm interested here from a british standpoint because my knowledge of politics over there is not extensive at all, but i think they've tradeded in something pain worse, right if they get a labor government, they'll be tighter on the fiscal reins. >> i think by resigning, they don't bring it back to the general election >> okay. all right. so if you look at the polls, labor is doing quite well relative to the -- >> although the latest poll i saw was what arabile was talking about, if you're looking for someone to take over next is boris johnson which is interesting, because it's been

serve weeks since he stepped down from the market perspective what surprised all of this is the focus liability-driven investments which is the cdos and leveraged instruments that were there underneath that drove a lot of this. >> yeah. and it raised the memories of 2008 which was, wait, was there something out there? we've done a lot of reporting on the show and we had jeff zweigel on and are we about to become england? there is time. we use that time to get the fiscal house in order and it is not the most important and not front and center i guess we are going to be talking about another fiscal cliff or government shutdown some time in december if i'm not mistaken and that comes back up. >> can we use -- rick, why are we allowed to use mmt, but the uk was not what do you think the difference was over there, rick

that's exactly what the point is, i'll tell you what, whether it's the notion of remainders versus those on the brexit, that was still a heated issue they didn't make a lot of friends in the uk when they had their brexit so europe in general was watching everything under a microscope, and i think your question hits home what the truss government did was more of an experience than the actual sin and the rest of the world and internal politics went after it just shows us how touchy the future will be for the uk economy in a post-brexit scenario >> we have the dollar. >> everybody wants our dollar and everybody want -- it doesn't make what we're doing any less profitable in what they're trying to do over there. >> we don't have a license to do it >> we've done it on the spending

side -- >> until we don't. the point is everybody else has screwed up in trying to be a rival to us and the chinese had an opportunity to create a reserve currency and the europeans had an opportunity and they messed that up and so we're the last ones standing we could mess it up, as well, joe. you're absolutely right. >> we are down 35% in the nasdaq and we may be in the process we're up against everybody >> the stock exchange and our good friend jim cramer is standing by. i'm curious what you think about all this, jim, and how do you think it will affect the economy this morning >> if you think the economy is bigger we would have an impact and certainly worth talking about and her tenure was so short and it does seem like the conservatives screwed up here. i have to tell you, if we were talking about germany today in light of what dow chemical said, it would be much more pertinent

to me. as much as i'd like to care about the uk, there's so much weakness in europe that it's a sideshow they're if recession in europe and that's what we have to focus on when it comes to earnings and when it comes to this stuff, obviously they're in disarray, but it's not front and center for earnings >> the earnings destroyed europe >> let me throw out a couple of names, we heard from at&t and john stankey and he's had a great quarter and he's had a couple of quarters where he was putting up some numbers. what do you think? >> think the stock's bottomed and he's been such a destroyer of people's capital. he put on a good show this morning, and i think it's for real jonathan gray, not a show. just actually for real gray is so good and what he said about what he has to do at this point in the cycle is so smart he should be running the uk. i cannot believe how smart that guy is he's just fantastic.

>> jon gray for prime minister is where you're going here >> i think jon gray has a better handle on a larger economy than she had. his economy is gigantic. >> that's very true. is your sense, by the way. one of the things that jon did talk about is it's true, the market does bottom out 12 months before actual economy bottoms out. >> right >> so where are we really in the cramer universe? >> i take gundlach and we seem to have a hard time on the two year taking ought 4-6 and come back and say 75 and 75 right now just because we see too many companies like night swift and the costs are way up $45 kcosts are up in every american household and people are cutting back on the ability

of apartments and still too much inflation and the fed has to take action. >> but there are a lot of companies that are having no problems finding workers. >> what do you think is a -- on the s&p 500 and the nasdaq i think we're now on the red >> we have to ignore them and this is where they were at 3:30. this stuff is just nonsense. >> the skies are trading on absolutely nothing whoever is trading is moving the futures easily my take is don't pay attention, they don't know what we're doing. >> we should tell everyone on squawk box, the counowtdn to the opening bell when "squawk box" comes right back

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about are still supply concerns. is he right about that >> yeah, you know, and i'm

seeing, as i read other articles and analyst opinions that i think there are demand fears out there. i think that they're unfounded you know, again, i would look at evs as a percentage of overall auto sales, you know, they're something like 7% of total vehicle sales last year, so -- and as we saw gas-powered car sales decline in the past couple of years, we're still seeing evs up on a year over year basis i mean, we saw tesla's revenues alone grew 50% this quarter. so, i would look at that, and you know, for, like, macroeconomic concerns, i would be much more concerned about the companies that have the majority of their revenues dedicated to gas-powered car sales, because that's what we think is going to decline in the future as evs become more cost competitive thanks to rights law so, rights law forecasts battery decline costs very well. we think it's coming down at

roughly 30% rate for every cumulative doubling in production that's what's going to bring sticker prices down and drive demand >> tasha, thanks perfect ending got 13 seconds to summarize the markets, which are now negative, at least on the dow. the nasdaq has gotten more negative the ten-year, maybe not to blame here i guess a new prime minister isn't a panacea for us, apparently make sure you join us. "squawk on the street" coming up next ♪ good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. premarket trying to hold some gains here as liz truss resigns as prime minister in the uk after just 44 days got some solid corporate earnings but again, rates at new cycle highs, two-year hits for six. our road map begins with the big news out of the uk, liz truss