midterms less than three weeks now. it's friday, october 21st, 2022 and "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. it's friday. i'm rebecca quick along with joe kernen and andrew ross sorkin. as joe mentioned, under pressure dow futures off 130 points s&p down 20. nasdaq off 100 this is after a choppy day of trading. stocks were down dow down 90. s&p off .80% nasdaq down .50% for the week, you are looking at a decent week.

indices are on track for the best week since early september. nasdaq up 2.8% for the week to date the picture with the treasury market yields continues to climb. that has been putting pressure on stocks this morning and yesterday. you can see the 10-year treasury at 4.272%. the highest level since 2008 2-year treasury lower. this morning was above 4.6%. that's been the real concern people thinking make rates are topping out. jeremy siegel on "closing bell" yesterday. if we're not getting to the point where rates are tipping out, that's the concern for the markets. that's what we have seen for equity shares t it is notandrew. >> snap is the biggest example of that. plunging earnings beating estimates

revenue lower than expected. monetizing users remained a challenge and that's putting it politely average revenue per user down 11%. snap taking a charge with the restructuring plan announced in august it included severance for 20% of the worker it is laid off. it did not give guidance for the fourth quarter revenue growth is decelerating with the losses and now stock down 80% year to date. look at it now off 26%. other social media stocks falling after snap's report. twitter off 8% frankly that is a musk deal. meta down 4% pinterest down 7%. joe, some people were saying if you actually had to value twitter today and you took the musk deal off the table, you might be in the single the

billion dollar digits. we were talking $44 billion and half some talked $15 billion. now people are saying -- >> based on snap. >> let's use snap as the example. 75 is the high 52-week high on snap it's 8 >> a year ago, snap was trading at 40 times sales. now 4 times sales before the haircut it took overnight. >> you rightly were talking to john mueller attin p&g i loved his answers. we will do it differently. here and there oh, maybe i can't say. maybe more maybe less >> more efficient. >> more efficient. >> the high sign >> is it social media advertising for are we really -- >> i don't know. i assume the pull back in advertising is across the board. you hear it in the media

business broadly the question is whether it takes a bigger chunk out of social media or out of the social media growth agenda. >> that's the issue. if you talk about flat revenue if these are no longer growth companies. up 6%. the smallest since the company launched in 2017 >> we are still open for business here if you want to reach the highest caliber. >> sell it sell it. >> my son, i hear from my son. elon musk is laying off 75%. he got that wrong. scott? 75%? my wife said how many employees? >> 7,500. >> what are they doing >> his plan gets down to 2,000. >> that still sounds like too many >> all of this is more than youtube has.

youtube is a massive business. >> these layoffs were coming with or without musk >> sure. to me it is like that sounds bloated at this point if you can get rid of 75% 66 here. i don't know i don't know who that leaves >> look to your right and look to your left >> you can say, mac. twitter clarified to staff yesterday there are no plans for company wide layoffs after the washington post reported earlier in the day that elon musk told investors that in his deal to buy twitter, he was go to get rid of nearly 75% of the 7,500 workers. the executives were planning a reduction of 25% no matter who owns the company the stafcompany is not planning

layoffs. that's according to a reuters report 25% is still a lot. >> a lot >> out of 7,500. >> what i don't understand is they are not planning any layoffs? every company in america is going around saying we need to rethink. >> today, we are not planning any layoffs. today. then tomorrow comes. don't you think that's what that was? >> you also have to calm your staff. if there are rumors out that 75%. >> you don't want to lie through your teeth >> you lose all of your best people who you hope to keep. >> so you say that so people don't look for another job a week later, you do it? >> i didn't see the wording. >> we have the mayor on today. did you see this are you going to ask about this? >> of course we'll talk about that and talk

about casinos in times square. >> that's all we need. >> all of the things going in new york no doubt. >> the new york post >> the post. >> you want to show it to the audience >> don't we have one three with the shelves we have that out here. >> the shell game. >> out here and you can lose all your money doing that. the biden administration officials are considering whether some of musk's deals are subject to national security reviews like the twitter and starlink deal. they are concerned about the threat to stop starlink internet service to ukraine and increasingly russia-friendly stance based on the tweets one possibly considered is the review of musk deals respect operations

probably knew this was coming. >> the second the deal was announced, i started to say how this would be bad for spacex or tesla. you will have governments, not just the u.s. government, but the government in china and other governments around the world start looking at elon musk in a different way and looking at those businesses. >> this is not just because of the twitter deal i gave them starlink now and he proposes maybe i should give some of crimea he starts talking. then there was the situation where he was talking to putin or not talking to putin this has little to do with that. >> we had alex on talking about that >> you worry about tesla >> i would argue you would think that the and i think the acquisition of twitter makes it more complicated

part of the speech on the platforms, but part of it will become everybody else's speech on the platform. what he does or doesn't do and who he has to placate any given time becomes very complicated very quickly especially when part of your business is doing business with governments and that's what spacex is and largely tesla as well. >> i think spacex is the biggest one to watch with this that is what alex statalked abot the former combat veteran. from any defense contractor. you have to be quiet for the government to write checks and supports research and development and have you publicly saying statements like this brings a complicated picture. he told us this a week or two ago. watching this today makes you think through the implications of what it might mean. >> getting serious there >> did you also see the ken

griffin news >> yes >> it's like a philanthropy donation for him they call that pocket lint >> i would talk to you about this because of the craziness. >> i didn't know >> did you talk about it at dinner >> i would guess it's not a true investment investment. it's -- >> among friends >> you did not have dinner that was a joke. tweaking the crazies of which there are many as i find out every day on twitter >> true. a new forbes report says tiktok parent planned to use the platform to monitor the location of specific american citizens. that report focused on an internal audit team at tiktok that conducts investigations into misconduct by employees the materials viewed by forbes said the audit team planned to collect data about the location

of the u.s. citizen who was never employed with the company. and it said the audit team was surveilling other citizens not for ads, but other purposes. whatever those may be. forbes is not disclosing the purposes to protect sources. it said the company did not answer questions about whether the tiktok audit team has targeted any members of the u.s. government, activists or public figures or journalists this is the thing we have been hearing about since the trump administration with concerns of tiktok and who is watching and what the chinese government would do with that information >> yup these guys know a lot of stuff about us >> yeah. >> i still see weird things happening and i'll talk about something and here's an advertisement. >> listening all the time. >> i know. >> i don't believe it. >> there are these times how is it triangulated.

>> the toe fungus? how does that work i just said it and it knows? >> the crazies >> i think this might have been on "jeopardy!. you know what that is on the outside? >> mold. >> yeah. >> duh >> i'm done. >> you eat that? >> yeah. i had been i'm not going to anymore stop eating. >> eat the inside. >> stop eating my toe fungus >> yogurt? >> i assume some bacteria. it grows >> yes, it does. on cheese. it's something growing on cheese and you are selecting for it >> delicious when we come back this morning, we're going to talk a little more about the markets. the futures right now are down

a little more than even 12 minutes ago. dow futures off 140. nasdaq down 107. s&p down 22. a lot of that is happening with interest rates we will look at yields when we come back. we will talk strategy after the break and get you ready for reports from verizon we will hear from new york mayor eric adams and former microsoft ceo steve ballmer. you are watching "squawk box" and this is cnbc ♪ ♪ ♪ ♪ introducing ihg one rewards. seventeen hotel brands. six thousand global destinations. one loyalty program that lets

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to see how much you can save. on today's agenda, we don't have any economic data, but we have a few earnings reports of note we have verizon and american express. the numbers due before the opening bell both stocks indicated higher futures are not. if you are looking at the broader markets, you will see the dow is down by 150 nasdaq is down 112 s&p down 24. i like to look at what is happening with interest rates. higher interest rate yields is what has led to higher yields on the treasury which is leading to the issues 2-year treasury is above 4.6%. you are talking about the 10-year treasury above 4.8%. let's talk markets with lisa

erikson at u.s. bank and j.j. haniken. >> i think the market is baking in a 75 basis point move the next time up with that, we're seeing the consequences of it the day like yesterday, we have some nice momentum and things turn around quickly. again, we're in a bear market. with that, rallies -- the change for the viewers a year ago and people are looking to buy. people on rallies are looking to sell to take advantage of the pop and some of the stocks, et cetera it is a mind shift overall with the yields, a, we are seeing less volumes particularly from retail traders and, b, it

is a different mind set. >> 4.28% for the 10-year treasury the highest since 2007 we are continuing to creep higher since 2008. lisa, there is the expectation that maybe rates are topping out. you hear that in places. the fed talk that keeps coming is hawkish as ever it was harker who said it could go significantly higher and we haven't done anything to stop inflation yet. what do you do as an investor in that environment >> we do think we need to be cautious in the market as you point out, it is unclear when some of that fed policy is really going to have an opportunity to revert. one of the key things we're really keeping our eyes on is the inflation front. obviously to the extent that price pressure begin to decline, that will allow more hope we get

the policy pivot until that time, that is making us cautious on the u.s. equity market we indicate an under weight at this time. where we emphasize the relative emphasis is on the cash flow assets although we are still seeing difficulties in the fixed income market, the yields are becoming more attractive. another area of interest we're seeing is global infrastructure. again, based on nice dividends and a nice array of components from utilities to the transports and mid stream that are picking up on the ongoing reopening activity. >> if you are under weight and cash sensitive, would you tell people you are cash attractive >> certainly overall in terms of the fixed income exposure, we

are emphasizing near benchmark or short exposure. you know, in general, we recognize that you have some more attractive rates on the shorte end if you are looking at longer term, the exposure to aggregate to fixed income over short makes sense to us. >> j.j., just looking around and the earnings reports overall have been really good. snap disappointed the market last night lots of companies beat expectations if you are looking at overall, this collapse of earnings hasn't happened. >> it hasn't, becky. it is interesting from that point of view. as of this morning, i believe 20% of the s&p 500 has reported. over 75% had beaten earnings that is normally a 68 of we will see if that comes into line as we go forward. one thing to keep in mind is the rate move happened at the last

few weeks and we'll see going forward what this means for earnings also, i think one of the things that sometimes is forgotten is the rate hikes often takes six months or more to work through the economy. you guys were just talking before this segment about many companies that are nervous right now about what's going to happen going forward. i really think it will be the next earnings cycle or two earnings cycles out where we see more effect of the rate hikes and the possibility to slow things down. i guess the great part is we have seen incredible resilience in the consumer and in earnings overall in this rate cycle i think as you guys have ceos on all the time, i think caution is really the word going forward. nobody is coming out and saying we're really going kill it going forward. >> there's a little bit of freeze to the environment and

talking about how difficult it is to predict the future lisa and j.j., good to see you both coming up, we have more on squawk ahead the update on the student loan forgiveness program we told you about yesterday and update from the supreme court. that's next. as we head to break, look at the biggest pre-market winners and losers in the s&p 500.

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♪ ♪ for smarter trading decisions, no more waiting. no more running. [ screaming ] we finish this tonight. an update on the story we told you about yesterday the supreme court has rejected

the request to block the biden administration student loan debt program. justice amy coney barrett rejected that brought on from the plaintiffs the question is is this something the administration could do without congressional approval that is what is still here and i think there is still a way the supreme court could weigh in down the road. the initial thought is maybe she would stop that and she has not. to the next decade of disruption i spoke to the ceo of moderna at the d-50 x summit. guys, this was a billion dollar company when it was a disrupter. $1 billion company at the top, it was $150 billion. no one knew it was a disrupter that covid and pandemic would

occur. now it is a $50 billion company. it was $150 billion. stephan took a deal. we will talk about the power of mrna the patent dispute generated this answer. >> this is not another company where all drugs are different. this is a platform company which is the first platform company in the bio-tech space where you can really go from one drug to the other and use the same and go with another product protecting the technology is protecting the platform. it is not just about covid >> sorkin, the two companies, pfizer and moderna had a patent

through covid. >> because they were trying to work to the emergency at hand. >> now it is lawsuit central >> yeah. they both -- i said to stephane. you went from $150 billion to $50 billion. you can't leave well nenough alone? some of that was generated from the government funded research are you sure you want to do this >> what was his response to that >> i also said messenger rna how do you say this was our idea to use this to generate a protein to generate a vaccine? >> i think it is valid if you manipulate it and twist it >> you can't without the lipid

thing they put it in are you saying biontech saw what you were doing and decided to do it or did they arrive at this lipid idea separately you can't say -- >> the same battle is playing out in so many levels. it is very important for biontech to set out markers on this because you publish it >> if you are the first to use lipids and biontech finds the same way are they allowed >> that is the dispute >> and then i asked him -- i really am interested >> before you get to that, what happened >> he said they need to do it because of the platform. yes, they can own this because they were the first to come up with it. >> is there a way they can reach and say we all have the rights to this and not charge each

other so research can advance and you can get cure for cancer and other things. >> sometimes that happens. >> it would seem like a more fair way back to the question where this came from government funding. other stuff came from universities >> i want to talk about this as long as we talked about the borla contiinterview on your primetime show >> equal air time. >> really good job. coming up. julia was happy. she came up with the disrupter thing. huge she thought it was interesting. >> nailed it >> all right we're going to look at some names to consider in the energy sector amid the blockbuster year later, economist judy shelton will join us on what happened over in the uk. is boris cominbag ck seriously? we'll talk about that. >> cut his vacation short.

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good morning well come back to "squawk box. we are live from the nasdaq market site in times square. it is friday, but the futures are not feeling it dow futures off 160 points s&p down 25. nasdaq down 116. new this morning, the japanese yen is topping 151 versus the dollar that is the weakest we have seen since 1990 all kinds of other things we're watching 10-year treasury has moved up 4.28%. the highest since 2007 yesterday, the highest level since 2008 there we go. climate to 4.284%. big year for the energy sector the loene sector in positive territory, but up 22%. thanks, dom.

dom chu has a look under the hood for "sectornomics." >> i want to say for viewers watching yesterday, i may have been distracted because joe was in the studio stalking around before his interview >> no, no. he was so serious and i got right next to the camera i was going -- right >> lurking around plasmas and circling around the set of "the exchange." was that joe kernen? >> he started laughing that's what people do, dom, when we're friends. >> especially around you anyway, joe, it is the only sector in the s&p that is in positive territory and by a lot. 50% gains versus s&p which is down 23. to give you context about just how big a gap it is, the second best performing sector in the s&p 500 is consumer staples.

that is still down 12% that's second place versus the first place up 51% it has been a big move higher for sure this is big because energy is becoming increasingly more important part of the market it is still only one fifth the size of technology with sectors. ne in terms of best and worst, the names tend to be more geared to oil and gas. as they go higher, the stocks tend to do better than the underlying commodity occidental petroleum with berkshire building stakes. up 137%. eqt up 86% we know what is happening with natural gas. hess, one of the smaller oil and gas companies, not the size of

exxon or chevron it is up 76% as for the laggards, there were some in negative territory most of the glaggards gear towad kinder morgan and natural and gas pipelines. baker hughes and oneok joe, throughout the course of the day in halftime report and power lunch, we will look at stocks geared to dividend investors. joe, we will look at the stocks that are correlated to the oil sector that's coming up later today >> thank you, dom. we will see you at the top of the hour at this point, you have been

holding 19,000 on bitcoin. $18,969. you see it down a quarter. risking off. off risking. >> a fascinating argument it has been a little less volatile than the equity market recently in the meantime, when we come back, we will talk right here at the table. pollster frank luntz will join us to better understand how americans feel about the economy and, yes, what it means for the mid-term elections. don't miss the interview with new york city mayor eric ad amoi u jnss in the 8:00 hour a lot going on as we come back >> announcer: sector nomics is sponsored by spdr etfs

welcome back to "squawk box. the latest polling from cnbc all america survey showing president

biden's approval rating on the economy improved since july, but still trailing low at 40%. joining us right now on set here is frank luntz pollster and strategist. we love talking to you to get a better sense of the way you think americans are going to play this out come november and what it means for policy and business for the economy what do you think happens in november >> i want to relate this back two years ago. it was two years ago next week that you had me on the show and i said that trump on election night would be leading on the hours and days that followed, biden would catch up and move ahead and eventually elected presidentmen i'm here to say enough deniers and candidates running to lose and claim they won they won't accept the election results. i'm scared to death and doing this a week earlier so you can replay this and replay this and replay this. we will have a problem in this

country if senate candidates and secretary of state candidates lose by two or three percent and claim the election is stolen i'm warning the markets now that i don't think we will have a clear result on election day 2022 >> why do you say this >> because i have seen the interview was the candidates and watching the debates i do this in addition to the polling. the american people do not trust the election counting. they do not trust the system it is a greater degree of cynicism toward elections than we ever had. it is prompted by elected officials who are telling them don't believe the numbers. don't believe the count. it's not true. the way that elections are counted, you will get the people who vote on election day counted first. you get the absentee ballots counted third. last and you have the early vote counted second it should have gone in order what it means is republicans look like they are winning early

in the evening and it will even out. i still believe republicans capture the house. i believe the democrats, by a single seat, keep the senate the vote will look overwhelmingly republican at midnight it won't be as republican as all of the votes are counted. >> what is the solution? >> change the counting system. it is not how you cast your votes. donald trump would say 100,000 votes in philadelphia dumped he called it vote dumping. no, it is counting people who voted a week or two weeks early who sent in absentee ballots you have to count those at same time that you count -- >> don't do any precinct releases >> it is causing damage. probably we should have done this a week ago. this is serious. joe, at the point -- >> the pandemic caughtsed a lotf people to think there is more mail came in because people were

not going in person because of covid. >> correct. >> have we gotten back to more in-person voting or is it the same amount of remote learning and remote work and remote voting >> if you count them separately, democrats vote remote and republicans in person. it is a systemic problem. >> you spent a lot of time thinking about language and persuasion and what works and what doesn't this issue of election integrity to the degree that we want people to believe if you believe they should believe, i would argue i think they should. thus far the system is working from my vantage point. people say elements are not perfect, but nonetheless, the system works the question is how do you message and persuade people that is the truth when there are lots of candidates often times on the right who made it their business

to suggest that it is not? >> stacy be an rams a democrat she continued to deny her election results >> both hillary clinton and joe biden called the election of trump illegitimate and stolen. it started long before. >> hold on i'll not let you guys. it entertaining this is serious. the corruption is not accurate the perception of election suppression by the democrats is inaccurate both sides need to cut it out. you will be the arbiter of this. don't do this the next two weeks. other election system is important. we need people to trust their votes. if they don't, the democratic process comes apart. this is my warning to you.

if you don't fix this now, you are going to have a crisis. >> block chain voting? can we do it on the block chain? >> people talked about that as a way to do it >> most way to double count. >> in terms of feeling safer about this immediately where does the tamping down of rhetoric happen? it has to start at the top >> it has to start with biden and trump. it has to start with the candidates running i'm a teacher. i'm a professor. right now, i'm teaching college students they are wondering what is happening to american democracy just as our students wonder what is happening to the british democracy. we are both coming apart at the same time. it begins with the leadership giving clear direction and acceptance you win, you lose, you live to fight another day. and from the partisan perspective is the most evil thing you can do destroying the confidence in the system that worked for better or worse

for over 200 years i love teaching british students we don't want to end up like britain. they can't keep a government for more than weeks at a time. >> he called it 4.1. >> it is a danger for us. >> let's ask about the economy and how much that will impact the way people think going into the voting booth especially over the next two weeks and how this issue of inflation and price of gas actually changes the dynamic if it changes the dynamic at all over the next 14 days? >> it does it is not inflation. inflation is what you talk about on the show. it is affordability. 46% of americans had to return food when they check out because they cannot afford it. 44% cannot fill up with gas because gas prices are going up again. >> frank >> affordability republicans will take the senate

if that is the number one issue. the gop is talking about abortion and social issues that will deny them the majority. >> it has to flip back our cp has 52/48 republicans predicted from 35 republican senate to 65 the betting markets have republicans winning the senate >> i don't hear that the betting markets don't hear that they don't see what i see. it is still possible i'm not rwriting the republican off. >> that's where the cp comes >> that requires the republicans to win arizona and georgia and pennsylvania >> lee zeldin is in the picture. >> he's in the mix by the way, in the end, the polling really doesn't matter. what matters is being responsive to and reflective of the public and business markets, if they are making decisions right now with where to invest, i'm

telling the business market assume you have a divided congress and kevin mccarthy is speaker and chuck schumer. >> you sound like it is worse than that. we may not have an answer in november and the country -- >> i'll mark your words. >> words, but -- >> that's my fear based on your words. >> we'll have you on with speaker mccarthy -- >> i would enjoy that. >> thanks for coming in. >> coming up, the head of the blockchain association calling for legislation in crypto that would create a more stable framework for investors. she's going to join us next.

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cryptocurrencies have remained flat in the last months bitcoin hovering around 20,000

joining us now is kristen smith. we said earlier that it used to be bitcoin maybe had a higher delta than maybe equities. now it looks like it's at least in recent months it's calmed down a bit and it seems like it's been relatively stable around 19,000 to just over 20,000 is that how you see it are we starting another leg down here today >> yeah, listen, i think bitcoin has been largely stable for a couple of reasons. one, you have the retail investor that has largely exited investing in bitcoin as frank was talking about before people are worried about paying for gas, groceries they don't have the ability to put extra money away by investing in bitcoin at the moment but i do think that the investors that are in there right now are holding out for a future date. they're in it for the long run and that -- as we start to see the economy turn around and people putting more risk into

their -- investment portfolios we're going to see the investment in bitcoin rise and subsequently the price >> what kind of legislation do you foresee and would any legislation at all be a positive, or does it matter what finally comes down the pipe? >> yeah, yeah. listen, what i think is interesting right now is that congress is actually actively working on legislation that would provide additional regulation for the underlying digital commodities spot market. and this actually has a real chance of getting done before the end of the year. the chair and ranking member of the senate agriculture committee has introduced the digital commodities consumer protection act and this is a pretty good framework for regulating centralized exchanges in the spot markets there's one outstanding issue

around software protocols that operate completely differently than exchanges but that's an issue that's being work and i'm optimistic we'll come to a good resolution there i think there's a decchance we could see that before the end of the year. >> you feel good about the integrity about the individual chains themselves? when we have seen hacks or sort of that -- -- a lot of the hacks we've been typical bridges between two chains if you have something like ethereum less chance to inspect the code to do audits and look at the underlying it would

zozothat that would be offered by those listing the exchange all of that information is publicly available today these are open source networks it's all out there but distilling it into something is meaningful would be an important step forward >> very good we keep talking about it here we sit waiting for it it takes time. things take time. >> it takes time it does. >> probably moving forward again. >> job security for me >> moving forward with the mining the mining is done at 2150 or something. maybe that's when we'll get some legislation. a big lineup still to come into the ceo of verizon, new

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plus an interview with hans vestberg. the u.s. government considering security reviews of elon musk's deals. jake clayton will weigh in 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 joe kernen and becky quick. take a look at u.s. equities this hour. it's been a bit of a wild week and the futures, i don't know if the futures have been indicative of where we landed in the day. the dow looks like it would open down the s&p off about 19 points. treasuries seem to be driving a lot of the situation you're looking at 4.276.

the two-year is down to 4.609. currencies we should talk about given what's happening in the uk and elsewhere, right now you're looking -- we should focus on the pound. 1.11 we have an earnings alert to tell you right now american express hitting the tape earnings of $2.47 per share. that beat the street by six cents. the company saying, quote, the demand for travel has exceeded its expectation throughout the year with spending increasing 57% from a year earlier and that spending volume in international markets are passing premarket levels for the first time this quarter. both on an fx adjusted basis american express backing its revenue growth forecast and saying it expects it to be above its previous range look, we've seen all week in terms of travel, specifically, even more broadly with the exception of some of these advertising businesses like

snap, earnings coming in better than people expected and there's continuing worries about inflation and the like advertising would be the piece that would hurt the most. >> american express is down by 3.8% the company saying, 9.25 to 9.61 so maybe that guidance is what's kind of putting a little bit -- >> a little bit -- >> everything that steve says in this is talking about great numbers. i wonder if that's an apples to apples comparison? i want to dig a little deeper and double check on that. >> it looks like it's apples to apples you could probably say there's some good news in american express with all the -- with what we think about the rebound in travel. >> more comments from steve squary we have not seen changes in the spending behavior of our customers, but we are mindful of the mixed signals in the broader

economy and have plans in place to pivot should the operating environment change dramatically as we have done in the past. so this new guidance that they're giving may be a reflection of a little more caution on some of those issues too. they're not going to do as well in a recession -- >> the other issue you have is forex. when he says that travel is up and spending is up internationally, that's with forex taken out of it. foreign exchange is also going -- >> like stephanie link said yesterday, most people don't necessarily make buy-and-sell decisions based on losing currency headwinds. >> that's true. >> if you're dependent on travel, you ever go -- things are expensive at the supermarket. i don't know why i'm always there, i'm there a lot -- >> business travel in particular. >> if things are, everything costs $10.

mozzarella cheese, without mold. hold the mold. making headlines, biden administration officials are asking whether elon musk's deals should be subjected to reviews it includes the deal for twitter but also starlink, satellite network and we've talked about all of these disparate businesses that this gentleman has. they cover almost every other general news story we talk about. you can somehow find a link to something elon musk is talking about doing or tweeting about. that's what you would hope for with the richest man on the planet in the known universe, really. we could see a major strike by railroad workers in this country. railroad companies bargained with workers over the new contract details now have been rejected they've rejected a proposal from the union representing jtrack

maintenance workers and it's all about sick time. >> what i don't understand is this -- does this shut down all of these railroads as the old strike did, or is this because it's one union, it -- or would all the -- >> if you had to pick, what would -- who -- the last workers were involved with which part of the business >> it was all -- it was three or four -- >> the maintenance guys, i think we need to make sure those guys are happy, don't you think >> are any union members going to cross the picket line one union could shut down all of them. >> this is for the actual track maintenance workers. we want them -- as we've seen, you want those guys -- not just for -- when something goes wrong on the eastern corridor, you can't believe it it's, like, five-hour delay, things like that, where one train can't get by another

train. >> i think the issue is, if you can't settle with all the unions, you're basically settling with none >> we think of air travel -- how inconsistent or unreliable is air travel it can happen with trains too. instacart unlikely to launch an ipo this year amid difficult market conditions. that's according to a "wall street journal" report that cites a memo from the ceo to employees as recently as this summer, the company had been moving ahead with plans for a public listing in the fourth quarter. the memo said instacart would remain ready to go public this year once market conditions allowed it let's get back to dom chu with a look at this morning's premarket movers is it quiet out there today, dom? there's no one around you right now, is there? >> this time in the morning in new jersey, it's a sparse population it's like a skeleton crew this morning. there's going to be more activity in the hybrid work world, mondays and fridays tend to be

associated with long weekends. but, anyway, if you can kind of take a look, it's empty. there's brian over there kind of checking things out on set and then there's me. anyway, let's talk a little bit about what happened happening. the headliner has to be what's happening with snap. 28.5% declines right now it's the parent company of snapchat losing over a quarter of its value. over 2 million shares of volume right now premarket. it's a decent pickup in volume it posted better than expected results on the bottom line and it's daily active users around the world came in better than expected as well but the revenues missed expectations calling into question some of that momentum and perhaps digital advertising. it did also authorize a stock buyback plan of up to half a billion dollars. on other social media stocks and business models, take a look at what's happening with twitter, sharing down 7%, meta platforms

down 4%, pinterest is down 8%, and even alphabet. not like the size of snapchat, way bigger it's down 2% right now again some questions about advertising going forward, maybe playing into these this year then you had a conversation about the rails. if you look at csx right now, it's up over 5% right now. but it's thin volumes. just around 1500 to 2,000 shares so far it reported profits and revenues that came in better than estimates helping to power those results. and we're going to end on shares of palo alto networks which is down fractionally. it gets initiated with a rating of $220 price target citing they're strategic positioning in cloud and digital security watch those shares becky, back over to you.

>> thank you we'll see you in just a little bit. jay powell has told the american public to expect pain in the fight against inflation could the fed's rate hiking face a political backlash from the public steve liesman joins us with another installment of the economic survey looking at what the public thinks of the fed and r rate hikes good morning. >> the survey finding the american public has little confidence in the federal reserve, even less than it has in congress, does have confidence in their ability to bring down inflation just 15% of the public say they're quite confident in the fed compared with 22% for republicans and 21% for democrats in congress. 44% are only somewhat confident, 35% say they're not confident at all. there are big gaps by party, just 7% of republicans saying they're confident compared to

23% of democrats now when we ask whether the fed's rate hikes will work at lowering inflation, a slim 53% majority saying it will be very or somewhat effective. 40% say it won't be. democrats are far more confident than republicans and those with more money in the stock market, they're more confident than those with less money in the market this is limited good news for the fed which needs the public to believe inflation will decline and the fed is going to be effective at doing it and avoiding an inflationary spiral. 47% say it's more important for the fed to protect jobs even if inflation continues to rise. 43% support combating inflation even if it means more unemployment now, this -- the margin of error on the polls, 3.5% it's pretty much a split but it's potentially concerning because unemployment right now is at an historic low.

the fed which markets think is going to raise rates above 5%. they're facing opposition from the public. >> i would think the biggest threat would be from politicians who are kind of jumping on this and trying to stir the public up, using these as talking points, trying to win political plays by saying, yeah, you feel terrible, right? inflation is taking all your money and you're having trouble finding a job and it's the fed's fault. i would think it's not the public leading the politicians but probably the politicians leading the public >> i think it's interesting, becky, you're talking about that prospectively, i think that's already happened elizabeth warren has been complaining about the fed's actions. i will say having watched this for awhile, right now pretty good support from the politicians because as you saw from our results yesterday and look at the results right now,

the public is being hurt by inflation so there is political support. the question becomes how these poll numbers, what happens to these poll numbers and what politician politician do if you do get a rise in unemployment jobs and unemployment are far down the list. if that starts to creep up, i think you're going to have more people complaining about the fed's action and is we'll see how powell and the fed react to that kind of public opposition >> bailey from the bank of england didn't step down you wonder if jay powell was watching closely and taking notes. >> some people were saying bailey took down the government. he did not flinch. he kept going. he did give them a couple weeks to get their act in order. have you checked the ten-year gilt this morning. it wasn't the first thing i did. >> i've been watching the treasury, not the gilt. >> the gilt, it looks like, it's

not that bad it's 405, 402. but the ten-year -- the yield has been on a tear if you have the fed rate outlook chart in the back. 5.05 is the outlook. >> continues to climb. when we come back, all things elon musk, to talks of job cuts and reviews of his ventures, jay clayton will join us next. futures a little bit weaker, you're going to see dow futures off by about 148 points. you're also looking at the nasdaq down by 105 the s&p off by 21. american express is still down 136 bid, 136 ask after a 142,

142 close yesterday. check out this morning's biggest premarket winners and losers winners are being led by caterpillar, dow and merck you're watching "squawk box" and this is cnbc

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headlines once again this morning. musk told perspective investors in his deal to buy twitter, he plans to get rid of 75% of the company's workers. twitter is now telling its staff it has no plans for company-wide layoffs despite a memo that had been at least indicated in this article. the biden administration is considering whether some of musk's ventures should be subjected to national security reviews. this includes the deal for twitter and starlink joining us now jay clayton he's the lead independent director at apollo we talked about this prospect to some bedegree as early as the moment you try to buy twitter. if you own twitter, are there national security issues for spacex which has government contracts and tesla?

>> look, good morning, andrew. from the very beginning, we talked about many of the complications that exist in a multinational transaction, including a multinational transaction that involves technology and personal data and over time, you know, i've been on this program several times talking about how we've ticked this off, there was due diligence, financing, shareholder approval, and regulatory approval was largely assumed to have been something that had been de-risked from this transaction i will say that the reports that we saw overnight were not something that i anticipated look, it is clear that mr. musk is and has been for a long time involved in a number of enterprises that raise national security and other important concerns for the u.s. government the fact that this came up at this time, i think we're going to learn a little bit over time whether -- how real this is for the transaction.

that's part of our system. we can go into that. but what i will note for viewers is that over the last five years, the review process that has been mentioned in these reports, its jurisdiction has been expanded in several ways. one is around technology and critical infrastructure and personal data. and then the other is on the amount of foreign investment and the amount of influence that is necessary to trigger a review. that amount has come down for those critical areas >> and what is that amount and how do you -- by the way, how do you think about owning twitter in terms of this -- it's a free speech issue and the like. but also it's not just the ownership of twitter unto itself, i think it's also some of the commentary that he's made and decisions he's made around starlink and demonstrated how much influence he really does have singularly.

>> well, let's separate those. when i talk about it, we're talking about the foreign investment in the united states. and those thresholds coming down go to things rather than control over the entity, to things like board seats, access to data, ability to influence decision-making in one of these critical companies does a foreign entity have that ability to especially use their ownership position, even if it's not a controlled position, to extract information that -- that i would say calls into question national security issues or the like your point on one person controlling or having such influence over issues around national security and the like, look, it's something that in a democracy we should be talking about, but it's not something new. much of our national defense and critical infrastructure is outsourced to private enterprise private enterprise is better at building things than -- >> 100%.

my question to you is actually, when you were talking about ownership issues, part of the other thing that critics or skeptics might say is they say, look, he has a massive business for tesla, this is, in china the government of china may not own that business, but has a massive influence on him and, therefore, how should we think about that from a national security perspective as it relates to these other businesses >> andrew, i think you have raised an extremely important issue here and it's not an issue that just is around the businesses that we cited where mr. musk has a controlling influence. it's about all multinational businesses doing business and having a substantial interest in china as we have seen china pivot. it is fairly clear to me and to those who watch that the chinese government is very control-ocon control-oriented and willing to use all of its controls at its

disposal >> when you think about this twitter transaction, it now appears that by maybe a week from today, next friday, that will be the 28th, that maybe there's a deal to be had how do you handicap that at this point? >> look, i think i've said this before, i think the delaware court has done a very good job at demonstrating why people do transactions in delaware and i continue to think that the delaware court will press for the parties to reach a resolution here. >> just as -- as a point, though, we're looking at the stock off 6% some people are looking at the stock as a function, perhaps, of what we saw with snap. i don't think that's the case in terms of snap's earnings i think it's a stock that has been trading on whether you think there's a deal here or not. it's come down i think because they're having a conversation

that's very similar to the one we're having right now how do you handicap the timing of somehow something like this could play out if it does. >> andrew, i got to say -- >> a deal is done on the 28th, perhaps, but then somehow we hear before the 28th or after the 28th, before it closes, there's a separate review. >> i got to say, like i said at the beginning, this was something that i hadn't anticipated. i'm not an expert. it kind of surprised me that this has come up at this -- you would say as how many months into this are we there are filings and like that would have had to have taken place. so i think we'll see this play out. with the delaware court date and with our disclosure obligations in the u.s., hopefully we'll have clarity around this sooner rather than later. >> it's not on purpose, but it seems like every time you are expected or plan to be on our broadcast, typically to talk about something else completely,

and i think that was the plan this morning, mr. musk seems to interrupt this and make news do you have some kind of cosmic thing going on with him? >> i think he hopes not. >> jay clayton nice to see you. >> thanks. coming up, we're waiting on quarterly results from verizon we're going to bring you the numbers and talk with hans vestberg first, as we head to break, check out the shares of fellow dow component american express that is not helping the average this morning down 4%. you have to worry about, i guess, travel, if things are slowing down stay tuned, you're watching "squawk box" on cnbc >> announcer: time now for today's aflac trivia question. according to the national center for education, what is the most expensive four-year college in america based on out of state

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welcome back verizon just out with quarterly results. earnings coming in at $1.32 a share. that was better than the street was expecting. revenue coming in better than expect 42.2 billion and if you look through some of the other numbers, the company is talking about total wireless service revenue growth of 10%. in terms of expectations, they're now saying on an adjusted level, they're looking for eps of 5.10 to 5.25 a share. talking about reported wireless service revenue growth of 8 1/2 to 9.5%. joining us right now to talk more about this is hans vestberg, he's verizon's ceo this is a first on cnbc interview. thank you for being here this morning. >> good morning, becky >> good morning. it looks like most of these numbers are showing growth, at

least. what's your takeaway >> my takeaway is that we came out from the second quarter, we were not satisfied how we performed, especially in the consumer segment we took a lot of actions in the second quarter, but there was some adjustment to prices. we launched new products and we saw growth and we saw year-on-year growth and r&d grew 12%. we have more to do we're a large companies and we're moving it in the pace we should do in order to keep our cash flow continue coming in as strong as it's coming in i'm looking at the net adds that you have it was 8,000 net adds compared to what we heard from at&t yesterday. they were also talking about growth i think they think that they're putting stronger numbers up. how would you look at those two comparisons? >> i think we took some deliberate decision in the second quarter to do price

adjustments. we knew we would have -- gross adds, they went up more than 5% compared to down 11% in the second quarter clearly more traffic in the stores, clearly much more movement and growth for us it was a deliberate decision to do price adjustment. if you look at on a business side, we were adding 200,000 net adds again on the business side. this is the fifth quarter in a row. so clearly we were addressing what we should address, the consumer segment especially on the net adds and we see the outcome of that right now. as i said again, we have more to do we're a big company. we're moving we have clear segmentation so we'll continue to do that work >> at&t raised prices too. did you raise prices more and is that going to lead to higher profitability? >> i think that what we -- we're

adjusting prices in certain segments and it was important for us to actually do -- it was a deliberate decision. as far as i know, this industry has never increased prices we are in a special moment right now. we did it for certain segments and had an outcome that we expected >> do you think those customers are leaving for t-mobile which i don't think has raised prices as much >> i don't know. i think we see also movement between prepaid to postpaid and we have growth in our prepaid portfolio this quarter, first quarter. very happy with that we launched new products there with a new set of products called total wireless by verizon. so we're starting to get traction on that section as well but it's a lot of work to do here and we feel good of what we did in the second quarter. as i said, we would continue to work with it >> let's talk about what you're

seeing from the consumer obviously there must be some price sensitivity and that's something that every business is watching right now, how much they can raise prices to make up for higher input costs what do you see just about the health of the u.s. consumer right now and in terms of when they're paying their bills if you look at our consumer base, we have the highest in the industry we see no changes in payments or something like that. we're better off than we were pre-covid when it comes to payments from our customers. so that's one thing. on the other hand, of course, it's sort of a sensitivity in the market when it comes to prices given inflation and all of that. but we are really happy with our customer base and how they are performing in these times. we see roaming basically back to normal levels. meaning people are traveling aboard and using their cell service. we see that back to pre-covid as well it's a little bit mixed feelings when you look at it. we have more store traffic this

quarter compared to the second quarter. it's a very mixed feeling, what you see in the economy and what we are -- into the largest base of consumers into this market when it comes to wireless and basically the biggest direct to consumer business in the united states for your guidance, you're saying you're looking for adjusted earnings per share of $5.10 to $5.25. the street is at the high end of that what are the uncertainty that is will determine which way it goes >> we have a holiday season coming up. so far, it looks normal. but we need to work both with our offerings. and we will work agile right now. we're addressing consumer base all up from the premium that is working well to us, down to the value segment.

and we can work with all of them we need to be very agile in this sort of sensitive marketplace. and i'm feel -- i feel really good about where we are in that sense because we know what we can do and we can do it very agile and quickly. >> let's talk about capital and capital spending it looks like you are saying for the full year, you're going to be spending somewhere in the range to 16 1/2 to 17 1/2 billion in capex the 5g is expected to be another 5 to $6 billion. that's a big amount of capital to put to work >> yeah, this is the peak year for our investment we're accelerating everything we can to get the c-band out. we will hit more than 200 million covered in the beginning of the first quarter that's one year after we got the spectrum when we come into 2023, we

have -- our peak spending. so then it will come down quite a lot on our spending in 2023. but we'll come back to that. that was the plan from the beginning and we really see a great performance on a c-band that we bought last year when it comes to the markets we're launching, we see uptick from our customers on mobility and, remember, here, we're getting the spectrum over time and the last piece of the spectrum we bought we will get at the end of 2023 >> your stock is yielding north of 7%. it's a high yield and i know the answer is always -- the answer is going to be, well, we'll get the stock price up are the dividends safe >> of course i don't think that anybody really likes their share price performance right now. i don't like our share price either when it comes to our location, our focus is clearly, invest in the business, continue to put the board in the position to

continue to increase our dividend we've increased our dividend for six consecutive years. and our work is to continue to do that. we have a really good cash generation we'll continue to seer time, ifo perform, this will pay off. >> hans vestberg of verizon. thank you, sir >> thank you coming up, what changes to the tax code -- what's it going to mean for individual investors. our senior personal finance correspondent sharon epperson will join us with answers next. check out this morning's premarket winners and losers stay tuned, you're watching "squawk box" on cnbc

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welcome back to "squawk box. futures right now about what we've seen for most of the morning, red 142 on the dow american express not helping nasdaq down 81 and change. s&p given back 15. there are some of the laggards 5% on american express visa down as well, walt disney, travel name, maybe, a little bit, and then two others, johnson & johnson, unchanged >> we are still going through the latest changes to the tax code due to the inflation adjustments. we looked at how the changes

affected the tax code. sharon epperson is here to smell out what they may mean. >> we're looking at middle class investors and more of them could apply for a 0% tax rate on capital gains. most investors focus on the 15 or 20% capital gains tax rate, but there's the 0% rate too. and that could impact more middle-class americans in the year ahead rates are based on your taxable income and income thresholds to qualify for the tax rate are going up next year in 2023, you could qualify for that 0% rate with taxable income up to $44,625 for single filers. that's a nearly $3,000 increase from this year and the income limit for married couples filing jointly will go up to $89,250.

your taxable income is calculated by subtracting your itemized or standard deduction, whichever is greater, from your adjustable gross income. most americans take the standard deduction and the irs is increasing those amounts for next year. it will be 13,850 dollars for single filers, that's up $900 from this year and $27,700 for married couples filing jointly that's $1,800 increase from 2022 once deductions are taken into account, a couple making six figures could be in the 0% tax bracket and pay no tax on profits from their investments and it could also be a way for some investors to sell and diversify their portfolios in light of this volatile market. >> okay. thank you. we got a lot to do. >> yeah. >> got -- >> i think there's a lot of people that owe zero on capital gains. >> they don't have any gains

>> that too. you can do your tax harvesting -- >> you can take off for losses. >> that is never inflation adjusted that stays at the $3,000 for your net losses. >> i avoided every winner. >> we got a lot more going on. the countdown to election day, voters feelings about the economy could be a game changer. we're going to talk to arthur brooks about it. check out some social names, a basket of stocks under pressure following snap's quarterly report last night. twitter stock down on a different report which we talked about the earlier. you're watching squawk on cnbc what's up, peyton? good morning, peyton. hold for peyton. they'd huddle.... welcome to the peytonverse. such a visionary. game plan... you go. no, you go! and call audibles... double our investment in omaha! omaha! omaha! omaha! or you could use workday.

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i mean, moods swing, it seems like what have you noticed in the last couple of weeks >> the mood, obviously, according to all the poll and is anybody you talk to, is commonsense, that the mood is pretty grim at this point. we see -- we hear a lot of economists sense the mood is sof grim right now, a loft economists people like me we don't know if there's going to be a recession, the first quarter of 2023 and americans are saying we're in a recession, we can feel it, we can see all the stuff around us and what we're not getting from politicians is real answer that acknowledge the fact that there's a lot of suffering going on and we need solutions they need to behave normally, show solutions that would be the winning solution in these election and we have inflation globally, arthur, the uk's numbers, you know what, some of it does relate to energy issues that could be self-inflicted but

also from deep you know global issues like putin and ukraine i don't know how you fix that quickly but there are a lot of other things that cause i think the dissatisfaction with the direction of the country, too and crime is something that depending on who you are you view it differently. >> the big issues are always economic issues as you go into an election, people feel that it's harder and harder for them to take care of their amilies, if we start to see a big loss of people's home values >> bring inflation at bay. >> yeah, you know, absolutely, we're going to see that and that's going darken the mood considerably, crime is always right behind it something that

politicians doesn't understand, i the biden administration and local democratic officials in big cities they want to argue with the public, a lot of crime, we feel insecurity, a lot of rhetoric from politicians you don't feel the right thing which is exactly the wrong approach the most amazing thing that i find is politicians are unwilling at this point to acknowledge the realistic feelings people have and they're losing market share as a result of looking like they're not, not genuine, they don't recognize what americans are feeling, this is a huge problem, it's an overlooked issue actually. >> do you think it's going reflect on november 8th, we see the incumbent typically lose seats in the house, all politics are local, they'll take it out on people that their senators, whether it's the people they

send to the house? >> the republicans are doing a lot on better if they sent a lot of people more normal and less rhetorically inflammatory, if they sent people who were pursuit of happiness and not misery, the same thing is true for the democrats, the fewer radicals the better they do, the reason is, 70% of americans hate the direction of the country with respect to the rhetoric being hijacked by the populist right and cultural left. they want a spirit of compromise, but they recognize this whole political situation is driven by this populist far-right rhetoric what we see on schools and campuses the cultural left, most democrats that i talk to don't even agree with this they hate this, come to middle and talk

more about compromise and pursuit of happiness, imagine that, we could be doing a lot better and the party that committed itself to it would be winning a lot more >> arthur, wanted to mention frank and his deep concern he expressed this morning that come election day and the days after, there may be concern that there are senators and prospective congr congressmen and women may say, look, they lost but tried to claim they won that this is something that has been in water, set up almost as something that could create even more chaos in this country, what do you say about that, what do you think should happen? >> yeah, we need candidates that are -- and we need major party candidates that commit themselves not doing that beforehand that stuff really works in

politics we actually need candidates to start saying, no matter what happens in this election, tying themselves to support, campaign support for example to not contest elections after they happen, look this problem is not 2020 problem in the country really picked up steam in 2016 when a lot of democrats were denying the validity of the presidential election when donald trump clearly legally got elected. that was the first wholesale we started seeing it -- >> i'm going to make two arguments you can disagree one one this happened with gore v. bush, that's actually probably when this became in earnest on both sides, both sides issue to it, i think the issue you're referring to when it comes to

trump was slightly different than the way you're suggesting and argue come 2020 moved into high gear in a way we've never seen before in this country in a dangerous way, you may disagree with what i'm saying, i think there's at lot of americans that feel that way. >> in 2016 a number of democratic senators that were saying that it was inappropriate to certify the election, not the first time we saw it in 2020 this is not both sidesism, this is a direction that the country is going in, it's becoming main stream to deny the legitimate outcome of democratic elections in this country, it picked up steam in 2020 when the presidential election who lost actually suggested that the election was stolen for sure it picked up steam in 2020. the point is this has been building for a long time and it's time for normal candidates people like, i live in a blue state with a great republican

governor, the best governor in america, charlie baker, this is normal behavior, what we actually need at the federal level is to look at what's going on states that are functional. people who would never dream of engaging this kind of craziness, this is i think the greatest threat to our democracy denying the democracy when it's convenient for them to do so. >> elections five, ten points. the close ones that might be a problem. i think we'll get through it we had special elections recently that were very close finally settled, i'm not nearly as pessimistic thanks, arthur. new york city mayor eric amisoi to join us talking about fighting crime in the city, its economy and so

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we'll show you what's moving right now including some big earnings movers, update on verizon, american express and the big splun j this morning in snap plus our squawk newsmaker eric adams will be joining us live good morning and welcome back to squawk box here on cnbc. futures are at some of the worst levels of the pre-market sessions down 180 now on the dow, treasury yields have been ticking higher and there you can see 4.29, what we were worrying

about, we were right at 4 a couple of days, now we're easily at almost 4.3. two-year at 4.6. here's a look at the dow futures versus the ten-year over the last few hours and you can just see it as clear as day, it's been that way every day this week and for longer than that. the yap these yen topping 151 versus the dollar just one day after it broke the 150 per dollar level and this's the weakest level since 1990 >> verizon's earnings and revenue best estimates this morning and the company is reaffirming its guidance, the net post phone ads fell short of expectations, verizon had extented some dropoff because they've been raising prices.

>> we were adding 200,000 net adds on our business side. so, clearly we were addressing what we should address the consumer segment and we see the outcome of that right now, but as i said again, we have more to do, we're a big company that we're moving, clear segmentation in the wireless business and we'll continue to do that work. >> shares of verizon right now are trading a little bit lower in the meantime snap shares have been taking it on chin, revenue came in slightly lower than expected, growth of just 6% which is the weakest that snap has seen since it went public back in 2016 daily active users increased year over year snap didn't give any guidance for the fourth quarter, once again they didn't give any

guidance for this quarter either, they said that growth is likely to keep decelerating. other social media stocks are falling after snap's report, too, little concern across the entire platform, pinterest down by 8%. twitter is down 4.42 including musk's deal with twitter. a look at this morning's other big movers, there are a bunch of them. >> there are andrew to your point the other dow component verizon, driving the pre-market story this morning, american express, those shares are down roughly 5% if you're looking at the bottom of your screen right now, the dow down 200 points, this is

after the financial services american express actually beat quarterly profit and revenue estimates, but some traders and investors are focused on what amex is saying about potential tougher times ahead. though it did sacred metrics for card members in the current quarter right now remain strong, nonetheless,5% decline for dow component american express. home builders stocks taking a hit. dr horton, kb home, toll brothers, amongst others, get cut to a neutral rating. for all of these stocks and they

cited the effect of rising interest rates on home affordability so watch those stocks a check on shares of under armour, down nearly 2% after the athletic apparel footwear maker driven in large part by competitor adidas which lowered its profit profit for the second time in three months, downgrade by analysts at telsey advisers, they cut it. bigger promotional pricing andrew, under armour shares, the maco conditions for athletic apparel they have a lot of product to move and under armour could be a relatively loser in that scheme as well. >> dom, thank you for that.

joining us right now to talk more about the broader markets is the ceo of stra ttegas compa. the two-year pushing back up too, how much of this, we watched the dow futures tick higher for those treasury yields, how much of this is a good reason to be concerned about things and how concerned are you? >> i think it's a good reason to be concerned and you know it seems like a quaint notion but before the era of qe most investors would expect some sort of over inflation, right now inflation's 8 and you're getting 4% back, 4.5% back from the government, doesn't sound like a pretty great deal to me, when i

talk to institutional investors while many people have priced in higher fed funds rates, very few people think the ten-year treasury could move a lot higher and i'm not quite sure why that is, it might be habit with the fed training us to think that way. that's clearly the risk. it wouldn't be surprise if ten-year treasury yields move higher. >> and if they do your concerns play out how >> well, listen, i think, becky, there's a lot of companies in the major indices that either have very little in the way of earnings or no earnings as all, and so those companies wind up almost becoming zero coupon bonds, the entire value winds up a terminal value of the company and so if you're trying to discount that terminal value of the company by higher interest

rates the value moves significantly lower. and, again, these are kind of old, you know, old-time conceptions of how you value stocks but i think with quantitative easing out of the way globally, investors and fiscal policymakers don't have the shields that was provided to them by very easy monetary policy so we're coming to a conclusion or we're coming to a point in which we're seeing the actual capital is for the first time in 15 years it argues for quality, it argues for companies that have real cash flows and earnings that can pay dividends return money back to sh shareholders, other companies will have a tough time until inflation is brought back under control. >> if you look at the fed fund futures, and we just checked

them out a little bit ago, that explains why you see the two-year moving so rapidly, but there's this notion out there if we fall into a recession the fed will have to cut rates by the end of next year or maybe 2024, i guess that's why the ten-year hasn't moved higher to this point, what's wrong with that plan with that expectation >> well, there's nothing wrong with it but a lot has to happen between now and then i think that sounds like gambling to me the fed clearly, you have to give them credit, since they started tightening clearly, i don't think anyone could fault them for moving very aggressively but also, becky, i think many times once inflation moves into a higher band, or higher level, it proves to be

more difficult to root out than you normally think and that's because it's a moving target, last week you saw social security cost of living adjustments of 8.7%, next year you're going to have significant labor negotiations between the teamsters and also the uaw, those labor negotiations i'm sure are not going to be for, you know, something meaningful lower than the rate of inflation and so, as we talked about before, you have to be careful wishing for a financial crisis to get the fed to ease because the chances of you not being right in the middle of it is pretty low for all of us no matter what your invested in and so it's certainly conceivable that the fed could start easing but to get more bullish on the long end of the curve you would have to real concrete evidence that inflation has cracked and i'm not so sure you've really

seen that just yet, it seems to be moving in that direction, i wouldn't quibble with the idea that inflation has probably peaked, but the level of inflation matters and that's still high. >> jason, thank you. >> thank you coming up, new york mayor eic adams joins us next on return to work in city, fighting crime and the potential for a casino right here in times square later, the economists judy shelton out with the power of simple banks squawk box will be right back.

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and this is the perfect time to join them... save hundreds a year on your wireless bill over t-mobile, verizon and at&t. just take the xfinity mobile savings challenge today to see how much you can save. welcome back to squawk box, time now for our squawk box newsmaker of hour, new york city mayor eric adams mayor adams, great to see you this morning, we're all trying to get back to work and we've had a number of executives in new york talking about more folks getting back into the office, still lots of work to go, but one of the issues they continue to talks about is the issue of crime in new york and i wanted to sort of start there in terms of how you're thinking about crime, there was some comments you said recently you think it's been overplayed, the

new york post this morning, they put you on an unicorn horse, fantasy land, i think executives and employees are thinking about this as a real issue >> yeah, and this is why how we have to approach this in public safety, i've learned in my das in police, you have to deal with actual crime but you also have to make sure that people are feeling safe because you don't have to be a victim of a crime but if you watch someone with mental illness who's loud and disruptive on the subway we focus on gun violence double-digit decrease in homicides, decrease in shootings. record high of gun arrests moved over 5,000 guns off our

streets. in is the subway, 1,000 new cops, we're going after those violent individuals and we know we also must new yorkers feel safe while we deal with the actual numbers. >> mr. mayor, howy you feeling i take the subway close to three times these days because it's so sufficient, i have moments i see people out there, oh, this is not a good situation and i sort of edge one way or the other. >> that's so important what you're saying because i'm in the system and i'm in the system a lot, the subway system and i noticed if someone is disorderly someone is loud they did not have to do something to directly to me but i'm feeling anxious because i just read about someone being shoved on the subway tracks so that's an anxious feeling that i'm having, we're have a major summit this weekend with everyone around the criminal justice and mental health issues, with even though

who criticized our policies will be there and we must approach this in a unified way to deal with the mental health issues that people are facing, which you're seeing a large number of the violent attacks that are happening because of those small numbers, we must deal with the actual crimes, the city must be safe and people are not feeling that anxiety >> mr. mayor, as a former policeman you've probably kicked this theory around the broken window theory, something to it obviously, you know if the small things get overlooked, if there's cashless bail, if people get arrested and they're out immediately because there's no room or it's a minor crime that sort of gives anyone the feeling that there's no consequences, do you think something needs to be done in terms of the bail reform

even letitia adams is conceding there should be some reform at this point or prosecutors seen as way too lenient i think you need to start there. it's not the media covering all of these things and it just seems worse than it actually is. >> you're 100% when you talk about broken windows, i'm a big believer in quality of life, number one, the overwhelming -- large number of paper plates, on our roadway, many people who had these big cars that weren't authorized were committing robberies and other viololents zeroed in on them. t we removed thousands off our streets, we're zeroing in on

those who are fare beaters we're going after those quality of life crimes, going into stealing things walking out but once we make the apprehension because the arrests are up in this city and the subway system we have 47% increase in arrests year over year, officers are doing their job, once we aprehend people we must send a strong mess sang in our criminal justice system we're hoping that summit this weekend is talk about how we accomplish this. >> mr. mayor, this issue about immigration and the tent cities that have gone up around the city, one of your colleagues was, i don't know, caught on camera, i'm sure you saw it, what governor abbott was doing proven effective it's flooded our system it's going to make

biden look back, i don't know if mayor adams is capable to navigate it. >> he's a low level staffer, his role was to go to events, it's unfortunate that he was taped by often unethical group and not much you can say to that but look at the facts, the fact is we had an unprecedented influx of migrants and asylum seekers. we were prepared and didn't panic, we made sure that everyone came here we fulfilled our legal and moral responsibility to assure that we had no children sleeping on streets, we accomplished that. we sent a message to the white house we need to have a strategy, they put that in place we saw a decrease in the number of buses, ten buses a day we're

down to two. we got a mayor from el paso, who said he would no longer be sending buses here >> mr. mayor, just speaking with people who have been looking at the budget and trying to figure out how things are going to be met, look, we got $20 billion in stimulus funding and pandemic funding that came from the federal government and that's been able to prop a lot in new york city, when that money runs out what happens because there were some programs that were expanded on the basis of that money as if it was never going away, things like pre-k, what do you at that point and what kind of hole will leave it in the budget? >> many people believe that $20 billion influx was going to

remain throughout our days in office, that's not the reality, we have a fiscal cliff, we potentially could have a $10 billion budget deficit and i'm not going to wait until the money runs out before we have a response, we're doing just the opposite, we introduced a program to eliminate the gap every agency in this city is looking at how to be fiscally responsible, we're looking at how to get a better product out of taxpayers' dollars that's why we're making these tough decisions now so we could be prepared in the future to protect pre-k, protect many of these programs we have, listen, let's be clear, there were a lot of -- i'd like to say fat in our agencies and we're trimming that fat and we're doing it without layoffs. >> mr. mayor, thank you for joining us, and as new york city

resident, i'm rooting for this city so thank you. >> thank you take care. when we come back, one of the biggest stock losers of the day, what's behind that move next. the meltup in yields "squawk box" will be right back. ♪ ♪ connecting to opportunity is just part of the hustle. ♪ ♪ opportunity is using data to create a competitive advantage. ♪ ♪ it's raising capital that helps companies change the world. it's making complicated financial concepts seem simple.

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shares of tenet under significant pressure the hospital operator's earnings disappoints. a one-billion share buyback doesn't seem to help. judy shelton is going to join us onlessons learned from the fiasco in the uk, we'll talk about next, and later later formerform er microsoft ceote sve ballmer will join us at the bottom of the hour and a lot of big head lines in the news this morning i'm on top of the world. i'm looking for someone who likes to be in the middle of it all,

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welcome back the futures as you can see has improved a little, down over 200 a few minutes, we're down 140 this morning treasury yields part of the problem, ticking higher. here's a look at the dow futures versus the ten-year over the last few hours, highly correlated as we got back to almost 4.4%, 4.3 and change. after weeks of fiscal turmoil and emergency intervention by

the bank of england british prime minister liz truss is out. our next guest says this is a cautionary tale. joining us now is judy shelton the author of "money meltdown, restoring order to the global currency system. judy, we noted the narrative, it's at least, i mean a lot of times coincidence isn't causation, but after the budget was proposed by the new prime minister that everything hit the fan but prior to that we did see the bank of england go 50 basis points when we went 75 here so it wasn't coordinated that started the pound weakening and, you know, there have been years of what you could call mismanagement by central bankers at the bank of england but it was the actual budget worries

about the tax cuts but you point out the energy subs dares much higher and more debt rhode islandal to the deficit over in the uk >> well, there was some cognitive didissonance, they we offering these subsidies which are inflationary but at the same time i think that was a political trade-off to improve the fracking potential and to provide more rights to have a better energy policy in the country, you bring up a very important point about causation, the budget was received by people who don't generally like a tax-cutting, pro-growth economic agenda, people don't go for the supplyside approach. they kind of prefer a

redistribution approach by government so i think they were gunning for the plan and it was just the day before that the bank of england only raised 50 basis points when our federal reserve as you pointed out raised 75. global capital has no flag it chases the best rate so it shouldn't be surprising that we saw a change in the dollar/pound exchange rate. so i think for the central bankers to then be the first to criticize the program is more than ironic, it's quite inappropriate and the reason we saw the problems in the guilt market also reflects bad monetary management for all those years, a sudden arrival of fairly obscure derivative, these liability-driven investment funds that pension funds used to hedge the risk on future payouts

that suddenly became an issue because when you have huge interest rate differentials that move financial capital around the world like that you're going to cause market disruptions and that's what forced the hand of the bank of england to have to start buying its own sovereign debt and that affected the guilt market and interest rates in britain. >> kind of interesting for -- it almost like he said here's my chance after years of bankers leaving interest rates at 0 so they couldn't fund their future liabilities so they had to go into these risky derivatives that's -- they sort of forced that move and then they saw an opportunity to say, hey, it wasn't us, you proposed these tax cuts, that's what caused the

unray veling in the first place. she's gone and central bankers are being commending for doing enough to stem off the selloff they're not supposed to be mrilt call either. >> well, no, that's the problem, central banks have become increasingly political, i think this was a terrible example it was the former central bank, mark karney within days of the announcement of that pro-growth tax cut cut regulatory burden for the private sector and empowered entrepreneurs he bad mouthed that in a bbc interview, so he put the central bank's agenda which had just done the switch from easing money to now their very committed to

tightening money, they haven't achieved price stability whatsoever i think they've failed, they've left the world with an extremely fragile financial system, highly vulnerable to these kind of market dysfunctions and every time we have a meltdowns, the central bank should have been predicting it they're responsible for calibrating money and credit to the real economy, they end up avoiding the blame and use that for the rational to have more economic powers. >> let's talk about central banks becoming political, mark karney is a former bank of england governor not the current bank of end governor, the central bank stayed more independent didn't do what what other government did if the government here decides to spend more money i'd like to

say powell remain more independent and say i'm not going to go along and do that i think it takes a lot of courage to not do what the government in power doing the current of bank of england governor wasn't saying about it politically. he said, okay, we'll buy these, even though it's not what i'm trying to do right now at this point central banks are trying to tighten, it shouldn't be them who's then making it okay for governments to spend more, whether that's supplyside or additional spending, it's not up to the central banks to do whatever the government in charge wants them to do. >> our central bank officials do tend to be more -- i can't tell you how many times we've listened to chair powell say to congress i'm not going to weigh in on that issue because that's not my job, now he does say that

our fiscal situation in this country in the long term is unsustainable but nobody ever says to him, well, this is day one of the long term, so what are you actually saying? i think we have to make a distinction between overspending or borrowing from the future in order to the finance current consumption that's really big government socialist redistribution i think that's different than offering tax cuts to promote private incentive to create more, to have higher supply of goods and services, because you're cutting taxes around regulations and that helps entrepreneurs actually produce, my issue is that central banks should have a very nar voe function, they should provide stable money and then let the

private sector use that as the platform for productive economic activity and the problem is that central banks have guided investment into financial speculation and you could make good money doing that but that does nothing to increase the size of the pie, that does nothing to increase genuine prosperity, shared by the whole population the money has to work for everyone and it does nothing to really raise standards of living and i think we need a major revolution in that we have put central banks at the center of our economic universe and i think they have way too much influence to allocate credit and when i talk about politicalization of central banking i think we see things like climate change, diversity creeping into their mandate and i might note with regard to diversity a recent study came

out that 90% of the economists who work at the federal reserve are registered democrats, what we really need is intellectual diversity at the federal reserve. >> judy, the debt to equity it's worse in this country, we have the reserve currency of the world, we won't have the same issues and we mentioned that mmt might have caught up with the uk how many programs have we had while the fed's tightening how much have we proposed to put into the economy for whether it's student loans or inflation reduction act -- that would help the deficit -- but the chips act, we've been spending money while trying to tamp the demand. >> the federal reserve steps up and says we are responsible for

price stability in a way that absolves congress and the white house from that kind of overspending and putting money in the pockets of people that works for the congress and that works for the white house they say it's the fault of the fed. but for all of excess money that the fed created they have kept it locked up for years by paying interest on reserves and they keep money mark mutual funds, 5.6 trillion in cash doing nothing buying nothing, investing in nothing, earning over 3% and well on its to earning over 4%, a pretty big hurdle in the banks to make a loan to you. it was only when the government started sending out federal checks that went into people's checking accounts that they

could spend that's when the inflation was unleashed, so the fed is doing its own thing keeping it locked up which i think is very unhealthy, it's kind of sick that if you want financial intermediary >> judy, thank you good to have your take on all these things this morning. coming up, jim cramer's keta on the trading ahead. and steve ballmer joins us ♪♪ ♪♪ be ready for any market with a liquid etf. get in and out with dia.

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welcome back the futures this morning have worsen throughout the course of the morning, dow futures now down by about 218 points, s&p futures are down by 27, the nasdaq are up by 135, these equities futures have gotten weaker as we have seen treasury yields rise, the ten-year is at 4.3% if you take a look at the dow futures versus the ten-year just over the last few hours you see the inverse relationship here, yeah the dow futures down, the ten year up and this has been told the story we've been talking about for weeks at this point. when we come back, jim cramer's first take on the trading day ahead. and former microsoft ceo steve ballmer joins us to talk about his latest investment. squawk box will be right back. e

painful bond situation is just seems endless and still in control, i do want to take the other side of snap, i think snap

is loser, also a joke site, meant for teenagers, and within artificial content put in -- i'm not saying it was -- >> that's not the other side -- >> it wasn't a company it wasn't a company. it was a site so kids could be able to talk to each other they haven't made it >> so you're saying you're taking the other side, this shouldn't spread to other social media sites. >> if you go back to what john said, the best channel is the internet channel, google, thinking about amazon, and i believe he also thinking about meta facebook, snap's like an afternoon newspaper it's going to go away and gives more ads to the morning newspaper and the

equivalent is amazon i think people have to recognize if they've been to snap i was on snap this morning it's just a joke i wouldn't read -- it was like casper mattresses, articles about people buy a lot o things off amazon and google i would never buy anything off snap snap >> can i ask you -- >> why don't they set up a site that nobody cares about past 18? >> i've got an 18-year-old who uses it a lot. >> people invested in this, they're debating right now what the hell they were thinking and i don't think it's a real company. i think it's just a really interesting, funny site for 18-year-olds to talk to each other without their parents seeing it, and they decided to make it into a site. >> they're rushing us along but i want to ask you about american express first. >> i'm taking the other side of the trade there too. >> it looked like very strong numbers. >> it is a very strong number and the idea -- they're much faster than all the banks.

provisions aren't nearly as bad in relationship to the banks there is absolutely, i think, a terrific story here about millennials and gen x. whenever these stocks go down, they stay down for the day, but i think people will go back. >> jim, thank you. we'll see you in a few minutes >> we just talked with jim about snap and joining us to talk about tech, social media news, and news of his own that he is making this week, steve bomber, the former microsoft ceo, and his wife, they've announced a $400 million investment in a vc fund focused on black entrepreneurs. tv, great to see you i want to talk about that. i also want to talk about all these headlines we've been talking about. let's talk about this investment, though, first, that you have made with your wife, and where it came from and what you're trying to do. >> yeah. we committed $400 million to four different fund managers,

ariel investments, fairview capital, jpmorgan in partnership with grovener and goldman. the target was simple. we wanted to invest in some private equity but a lot of vc and early stage growth money in black-led funds with an obligation for those folks to put the money into at least at a 30% level, black-led companies and entrepreneurs. we're off to the races with fairview capital and goldman the other two are still, you know, coming together, but they will and very excited about doing that we see an undertapped market opportunity, and i think also important, if you will, in terms of what else can it bring, but market returns, capital not flowing in there, so much less venture capital flowing to black entrepreneurs and fund managers. we saw a great opportunity

>> there's no doubt that it is hopefully going to change the dynamic. my question to you about this, though, is how much you think about this in the context of returns, how much of it you think about in terms of developing this market do you think of this as a market-based investment? do you think of t philanthropically? what's the thought process >> top line is, market-based returns. how did i get here my wife and i philanthropically focus on economic mobility, certainly the opportunity to -- or the need to improve economic mobility is strongest in the native american and african american communities that's what sort of got us started. some friends of mine who are entrepreneurs also highlighted this shortage, if you will, but it only works -- it only works

if this stuff is market-based. philanthropy eventually runs out of money job growth opportunity depends upon capital, market capital with market rates, and then we'll see the flywheel spin, more investment, more jobs, more opportunity for wealth building in the african american community, which i think is great in terms of social impact, but it only works with market returns. >> while we have you here, steve, there's a whole bunch of headlines in techland that i would love to get your thoughts about, one of which is this issue of snap. you heard jim cramer talking about snap earlier, but we're seeing this impact social media stocks across the board. what do you think of snap? what do you think of the social media space right now? >> well, i heard cramer go off on it, and i have nothing particularly to add on snap. i have to say, he was pretty clear on his point of view

i think social media, unfortunately, is a weird conglomeration of a bunch of businesses that really have fundamentally different economics. i don't think of twitter, really, as being a similar kind of product to facebook, which is not the same as instagram, which is not the same as snap, and yet, they all get rolled together under the words, social media. and i think -- i mean, investors obviously are showing that people think of them more similarly than i do, but you know, i have a long-term belief that the ability to bring information, whether it's from, you know, people you don't know or people you do, and this is a mix of those two things, that will be a pretty good business we'll see how valuations do, but i think it's pretty good business snap's very different. it's a communication channel between two people twitter's one to many.

meta is kind of many to many, and pinterest, i can't say i know very well >> steve, what do you make of twitter? elon musk, it may very well happen, a week from today, if, in fact, he makes a deal by the 28th when the judge has set at least a schedule for that. would you be happy owning twitter right now? >> well, tough question. i bought a bunch of twitter about six, seven years ago i think i own 4% of the company at one time, and it really stayed put for a long, long time will this deal close and people be happy with the price? it's pretty unpredictable scene, let's just say it that way but if i still owned the shares i bought, i would be very happy to be getting 50 bucks a share for them >> elon, though, didn't offer you an opportunity, or did you ever think about trying to get in on this

>> oh, i didn't want -- no, i wouldn't have gotten back in i've long since decided that i'm less an investor than i am a lot of other things, and i'm happy, if you will, being relatively passive except for microsoft >> relative to microsoft, by the way, because you mentioned the other social media company, facebook, or meta, i should say, is thinking about the metaverse and augmented reality and vr and the like microsoft also playing a big role in that space do you think it's going to work in the case of meta? >> i will tell you, i don't really understand where they're going. i do understand where microsoft's going, but i spend a lot more attention understanding it obviously, the most active metaverses right now are in video games, actually. i do see a real role for augmented reality. we're building a new arena for the l.a. clipper basketball team, the intuit dome, and

literally, i can walk in that construction site with hololens, the microsoft a.r. product i can walk around, see where everything is going to be overlaid with what's there, so there really is a place for both a.r. and vr. how the world gets there, not clear. how meta specifically gets there is quite confusing to me outside the old, what do you call them, the old oculus, if you will. >> steve, it's not -- that's a great investment you're making we commend you for that, and we love that. but is there anything else you want to talk about besides last night? were you there last night? >> yeah, baby. clips-lakes, i was there >> kawhi is back 14 points, 7 rebounds, so he hasn't been there for 16 months. what's your forecast for this season with paul george and kawhi leonard on the same team >> i can't tell you i'm a

forecaster, you know, in this game i'm not going to be a forecaster i'm going to tell you, we have a great team with a lot of commitment and a lot of energy and a lot of potential >> you&u got a lot of -- >> where that will take us -- >> do you have floor seats i mean, you know, for friends and stuff? >> yeah, for friends, i do, joe. for friends, i do. you let me know if you're in l.a. >> for friends, i do, just not you. >> i did not say that. >> becky did thanks, becky. >> come on, i'll have you all out. >> steve, we very much appreciate you joining us this morning. it's a great thing that you're doing, and we appreciate your perspective on all of the big headlines this morning as well thanks >> the "wall street journal" has an article just out talking about the federal reserve rates, federal reserve officials are barrelling towards another 75 basis points at the meeting of

november 1st and 2nd, but they are likely to debate then whether and thousand signal plans to approve a smaller increase in december you have seen the futures come back a little bit, still down by about 148 points for the dow futures, but that signal discussion of a pivot coming from tim, who is kind of seen as like the fed hammer on this stuff, knows what they're thinking on some of these issues, could be something that they'll watch very closely that does it for us today. join us on monday. right now, it's time for kwauk squawk "squawk on the street" good friday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer and david faber at the new york stock exchange could this be the sixth straight down friday in a row some uninspiring corporate results not helping the bulls premarket along with is this unrelenting climate yield. options expiration today, dollar index near 114 our road map begin