is cutting ties with kanye west. take your time after his recent comments and anti-semitic social media posts. and rishi sunak set to deliver his first speech at uk prime minister we will have highlights on this tuesday, october 25th, 2022. "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we're live from the nasdaq market site in times square. i'm rebecca quick along with joe kernen and andrew ross sorkin. if you look at what is happening with the u.s. equities at this hour, we are looking at a little bit of pressure coming through

this has been gradually decreasing, futures have, the last hour. dow futures off 125 points s&p down 13. nasdaq down by 17. of course, this comes after the major indices rose yesterday the dow was up 417 points. it closed at the highest level in six weeks s&p 500 up 1.2%. nasdaq up under 1% if you look at treasury yields which have been the important story. the one we have been watching closely for weeks. 10-year treasury has krcreeped p a little bit new this morning, we have to talk about it. bloomberg reporting that adidas plans to end its partnership with kanye west. gap and balenciaga cut ties after the social media posts and

interviews and all sorts of things he said ridiculous things. the shoe line accounts for 8% of the company's total sales. there has been an ongoing conversation the last two weeks of what will happen. >> he dared adidas he said there is nothing they can do what >> he is mad he doesn't have more control there is clearly something else going on with him with the comments he showed up with pornography he was showing adidas executives. anti-semitic rants doubledd down every time he opens his mouth. >> it is not over. >> this is the assumption. his brand makes up 8% of the revenue. >> it doesn't matter. >> it doesn't. >> i don't know what he thought he had on them >> you think >> i'm not saying he had something on them.

he felt emboldened to do it. >> it may be a function of a mental health issue he seems to be having in addition to the terrible comments. he said them so repeatedly over and over again starting with the tucker carlson stuff that was edited out of the video which was a problem. he continued and continued and continued. we discussed that op-ed. you have to get out of the business with him. caa doing it yesterday you know, at some point, you have to make a decision. >> gap >> i think which side of the world you're on. >> adidas has a background that makes you wonder why they haven't done something before. >> i don't want to go there. it's 2022. very strange

very weird it is historically a cancer that needs to immediately be exicised otherwise it metastesized. strong language. we'll move on. u.p.s. reported adjusted earnings per share at $2.99 a share. revenue slightly below the c consensus of 21.3. that is slightly the math on that the company saw softer demand, but was able to offset that with higher prices. the ceo carol tome will be on "squawk on the street" later

today. we while hear from 3m and ge and coca-cola in the next hour or so. we will bring you the numbers as they hit an interview with mary barra at 7:50 a.m and then alphabet and microsoft will report as well as visa and chipotle we have case-shiller home prices at 8:00 a.m. today and then the consumer confidence price read out at 10:00 a.m. we have steve liesman here with the happerapid update >> the u.s. growth rebounded in the third quarter. it will half to zero and turn negative according to the first economists we interviewed.

forecast to 2.4% when reported this thursday by the government for the third quarter. gdp in the current quarter will go into half at 1.2% and falls to zero and turns negative by the second quarter of 2023 the average debate inside the numbers over whether the u.s. economy will experience a full-blown recession with forecasters see bigger than 1% next year and continues into 2024 the average is for a 2024 rebound. the current forecast is highly contingent on how high the fed hikes and if inflation comes down and how quickly joe brusuelas writes we think that core pce inflation creeps up to 5.5% that may require a federal fund rate close to 5.5% which the market has not priced in

what is our panel saying about pce pinflation? not peaking until 5.1 and then 5.6. it averages 2.3 back down to the fed target i suggest be wary of the growth rebound on thursday and lag of higher rates and inflation it is slowing the economy sharply. i think this is the first negative number we had forecast in rapid update as long as we have been doing this >> okay. steve, that's -- i don't know. the market is not agreeing with us at the moment, right? >> so what has happened is a lot of the daly balance, d-a-l-y, mary daly, we are looking at

4.93 at the peak fund rate andrew, you are right with 5.5% fund rate. i think the market has built in a zero the question is is it a negative one? we had somebody on yesterday that says it does matter roger ferguson talking about zero is different from minus 1 that is a more serious recession. zero would be maybe getting off cheap. >> steve, does this mean the gdp number this week is something we should blow past and not pay attention to because it is not the story of what is happening on the ground right now? >> i think the third quarter is in the bag we want to pay attention because i want to see how we get to the number of 2.4 which is forecast. right now, the going ahead and outlook is for growth to have and get to zero. i would not be a buyer of the idea that we're off to the races

again and we put that weak first half behind us. >> steve liesman rapid update we'll see. we will see what the fed does. i appreciate it. coming up when we return, we take you live to the controversial investment conference in riyadh dubbed davos in the desert. check out shares of ubs. 24% decline in the third quarter as corporate deal making slowed and clients pulled back on net income of $1.7 billion investment banking revenue down 17%. corporate banking and personal banking rose thanks to higher interest rates you are watching "squawk box" on cnbc we're back in just a moment. >> announcer: this cnbc program is sponsored by baird.

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this digital age we're living in, it's pretty unbelievable. problem is, not everyone's fully living in it. nobody should have to take a class or fill out a medical form on public wifi with a screen the size of your hand. home internet shouldn't be a luxury. everyone should have it and now a lot more people can. so let's go. the digital age is waiting. welcome back to "squawk box. let's go to saudi arabia for the davos in the desert. we have dan murphy joining us with more. dan, good morning. >> reporter: andrew, good morning. it might not be as exciting as the davos you cover. davos in the desert is attracting big names

jamie dimon and steve schwartzman and david solomon are here in the room behind me for the big event. it was set up to put saudi arabia on the map as a global investor and investment destination. fii, as it is known, future initiative aims to attract billions into the kingdom. it gives business leaders face time with the $600 billion public investment fund and others at a time when we have seen traditional markets whipsawed by rising rates and the energy crisis. the most interesting angle to all of this and you are observing that wall street is at riyadh, but the biden administration has not we have seen the frosty relationship playing out after cut cutting oil output

that means no senior u.s. official has been on the ground as in the past i had a conversation with ant anthony scaramucci >> i think when you fight with your spouse or business partner or in the world of politics, you shouldn't push this fight too hard because both sides need each other i'm hoping for a reconciliation at that political level. i predict it will happen it will just take time there are sore feelings around and that's 23natural being huma. you have to step back and look at the long-term relationship. these two countries need each other. >> reporter: so it is clear that washington wants to reset the relationship with saudi arabia, but it is also clear that wall street is chasing deals here and

largely undeterred that is good news for the saudi crown prince and the overall economic diversification drive that it has been on for a number of years back to you. >> dan, two questions. how much of the conversation to the extent there is one, you know, is about the cloud of khashoggi and the standoff with the u.s. and saudi arabia with the price of oil -- how much is in the discussion there or is that put to the side >> reporter: it's absolutely in the conversation with regards to the killing of jamal khashoggi, yes, it is still in the room. however, you could say in this instance that business is trumping politics. it is clear global investors see this part of the world as a new investment destination saudi arabia and the uae had lax

lockdown policies. we will see the economy the fastest growing in the g20 oil prices are tracking at $140 u.s. a barrel earlier this year have helped. investors see opportunity here that is what is bringing people into the room. they are not too overly concerned about matters of the past even though it is still a major issue on the minds of many in the room. >> dan, gut reaction optimistic or pessimistic about the economy? the feelings in the room what is your sense more people feeling good or feeling bad? >> reporter: feeling good i would say. you can see behind me the amount of people that turned up you walk the halls in the ritz here in riyadh, and there is optimism in the air. investors are chasing money from the sovereign wealth fund t. is

an opportunity to tap into the world as we have seen tulmult in other parts of the world there is optimism in the air >> dan murphy in riyadh. thank you. >> 30 maybe. nowhere near consensus at least at 50 >> i think that may have played into the game we saw yesterday >> that would hurt the market. >> why >> because the fed needs to go further. >> the question is if the fed goes further than it should -- i'm starting to hear from investors saying it will go further than it should on the back end, nine or ten months, it will reverse. one step back. >> i anthink they took this int

account. >> overshoot and panic and start cutting? >> that is what the fed funds show they will have to pull back at the end of next year. >> if you think that will happen and the equity market is playing out at 12 or 18 months >> my fantasy -- >> wait. we should move on. >> my fantasy has been the strengthen in the economy would allow us to harness inflation without a horrible rise in unemployment inflation shouldn't be a function of a strong economy there are other things supply chain, oil, all those other things if you cure that -- >> our hope has been for a long time once we get through the supply chain, the handle is it worked into wages. have you heard about new five-year contracts signed at 20%? increase in wages? that is the big concern. can we keep it under wraps now

that's here? not that higher wages are bad. it is how high. >> refinery. when we come back this morning, apple hiking prices for music and tv services. we have that story right after the break. still to come, reports from 3m, ge and general motors. that is all coming within the next few minutes "squawk box" is coming right back i am a fiduciary, not just some of the time, but all of the time. charles schwab is proud to support the independent financial advisors who are passionately dedicated to helping people achieve their financial goals. visit findyourindependentadvisor.com if you're loud, be louder. if you stand out, stand strong.

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estimate ge also said it is planning spinoffs to three companies is on track ge health care ready to make the debut the first week of january. the bad news is ge, if you are looking for the tarot cards of earnings in the economy, that looks bad. the good news is ge is not a bellwether for the economy that is ugly >> good news if you are a ge shareholder. >> they are not used to bad news let me see where ge's market cap. 68 it was an 8 for 1? >> 8 for 1 >> 1 for 8 it was over 100. suddenly it is 100 again that gives people the opportunity to get short or negative on the company. next thing you know, it is almost cut in half from 100.

not quite. market cap is $80 billion before today. down another 7%. so it is a 75 billion -- >> still grappling with supply chain bottlenecks and ports with the renewable energy business and uncertain policy with renewable electricity production tax credits next year. that hit customer demand >> the guy has a lot of goodwill has yet to deliver you would say most people -- i guess ge would say he is delivering they are very happy. a lot of people think it is a big step up from recent management i don't know maybe it's hard. it must be difficult there are external factors you cited that the company has to deal with. come on. >> here are the comments

>> it's been at $59.93 before. >> they say our team is delivering larry saying strong aerospace in the third quarter fueling by the cust commercial back drop and supply chain. they are building momentum with free cash flow results this is supply chain and weakness in demand for products after the expiration after the tax credit >> people in the know -- it is coming back, i feel. people can be thin trading pre market and focus on the wrong things and bounce it immediately. maybe it bounces and turns around give him the benefit of the doubt. now down 3.5%. right now, time for the executive edge apple increased subscription price for the streaming service. apple tv plus is $6.99 a month

up $2. apparle said the change is becas of the increase in licensing costs they are facing. it introduced apple tv plus at a low price because it offered a low number of movies and shows we will hear more from apple on thursday that's when the company reports earnings >> the question. everybody is raising prices. i know some are lowering by adding advertising >> heading into the difficult economic environment >> i'm thinking about it maybe i want to keep it for a my month or two and binge and go to another one. >> that's a lot of work. >> you can get interesting apps where you can turn them off. >> you can't turn them back on. >> harder to turn them back on you may save $3 or $5 here f

if i do that over 12 months. >> with 12 different services. >> jeff bezos says he has to batten down the hatches. people are battening down the hatches. >> it's true with your earnings power? >> yes putting myself aside >> that's a better way to do this put yourself aside no, no put yourself aside >> i still do. that's the thing >> i know you. that's you that's not normal. don't expect everyone else >> most american households are saying this is insane. >> if there is one thing in a month i'll watch, i'll blow the $3 you see? >> announcer: executive edge is sponsored by at&t business

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good morning welcome back to "squawk box" here live at the nasdaq market

site in times square dow looking to open off 127. s&p 500 looking to open down a lot of companies reporting news this morning. including 3m. >> just out with the results on the adjusted basis. they came in with earnings of $2.69 a share. that's 9 cents better than the street the street estimate was $2.60. looking at the revenue revenue e estimate for $8.76 billion if you exclude the decline in the respirator sales, if you exclude that, it would be organic growth of 3.4% also talking about operating cash flow. adjusted free cash flow of $1.4 billion. the company looks like it is

updating guidance for the year. the first nine months along with what they say is continued strengthening of the u.s. dollar and macro economic and geopolitical uncertainty for organic growth, they are lowering the high end of the range. organic growth of 1% to 2% for the full year. previously it was 1.5% to 3% adjusted full year to $10.35 the street is at $10.29. the higher end of the range. the previous guidance had been $10.30 to $10.80 adjusted free cash flow for the year conversion of 85% to 95%. they are talking about supply chain challenges and strong pricing and cost management and managing those they are talking about the economic environment that is what you hear from companies. strength of the dollar is a big deal for 3m and other

international companies. >> gm is out phil lebeau will have the numbers. >> joe, you have gm indicating higher reported better than expected earnings for the third quarter you have a couple of things going on with the second quarter. we'll talk about that in a bit gm earning $2.25 a share expecting $1.88. revenue shy coming in at $41.89 billion. $42.22 billion expected. the numbers within the numbers and adjusted margin above 10% at 10.2%. in north america, it was 11.2% the supply chain conditions are improving. that's the encouraging news from gm in the third quarter. they cleared out 75% of the 95,000 vehicles in the second quarter that were built, but not delivered. june was a mess for gm they were dealing with supply chain issues they had 95,000 vehicles they could not deliver because they did not have key components.

they cleared out 75,000. earnings are better than expected transaction price for the average vehicle sold over 51,000 close to an all-time high. the died anguidance for the yea. gm reaffirming and expected to e earn $13 billion to $15 billion. the street is at $6.78 a share they will outline ev production ramp and plans to scale quickly in terms of battery production and ev production. that is coming up on november 17th on investor day lots to talk about with mary barra. she will come up next hour on "squawk box. gm beating the street earning $2.25 a share versus $1.881

expected guys, back to you. >> thank you, phil yeoman's work. let's give you other ones to handle are you open to that >> beer. >> beer. i was thinking across the board. >> are you homer simpson >> you did such a good job there are times with 500 s&p companies. can you do five or 20? >> have your people talk to my people see if we can work something out. >> he means we like you. we want more of you, phil. >> we want more phil lebeau. thanks, phil >> thanks, guys. >> see you in a bit. we have other breaking news. it is official adidas terminated the partnership with ye immediately. the artist formerly known as kanye west

the company reviewed and decided to end production of ye products it has been a long time coming you see the stock reaction down 4.1%. this is a partnership that is a subst substantial one for the company. 8.5% of the lineor revenue tha comes in from the yeezy products >> i was trying to think if they pull off some kind of -- not a compromise, but way for them to continue to sell products that either not branded yeezy, but looked like yeezy. >> that's what they are trying to do. >> and if anyone would buy said product. i'm fascinated to know walking into the foot locker these days if people are buying these products i bet people were, interestingly

enough >> is this all revenue loss for why the stock is down or reputational damage? >> that would cumulatively over last few weeks look at -- >> i love wearing stan smith sneakers historically. would i not buy adidas sneaker because i thought they took too l long this is the conversation and what it becomes. i don't know >> now it seems frivolous. why is it yeezy if it is ye? >> ye. >> the whole thing -- i can't believe that a lot of ramifications that is not one. i got corrected. i used to call it ye his new name is not ye are you using that terminology artist formerly known?

>> i don't think everybody necessarily knows ye >> are you going to hold his comments now against adidas? that's the question. >> i like to hear what the company has to say >> did you see dredge? they go right to the german history of adidas. >> absolutely. germany. that's what it is. >> because they were actually clothing the hitler youth at that point close affiliation. then the two brothers had a falling out. >> that's why it was surprising it took them so long to get here. >> right why you nip this in the bud. zero t zero tolerance adidas should have said zero tolerance. not one or two >> i think there is a mental health issue >> for adidas?

>> no, for him >> whether it is mental health or not doesn't matter where it came from the company in bed with him needs to figure that out quickly. >> we will talk more about the story. be breaking news in the last couple minutes when we come back, microsoft and alphabet down 26% and 29% year to date. both of the companies reporting after the closing bell we'll get you ready after this. and later, brian dees joins us from the latest from washington and recession risk and more. you can watch or listen to us live anytime on the cnbc app. s used to be the death of me. but with upwork... with upwork the hiring process is fast and flexible. behold... all that talent! ♪ this is how we work now ♪ ♪ ♪ ♪ ♪

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welcome back everybody u.s. futures are under pressure this morning a few days of gains and the markets giving a bit of it back. dow futures down 195 points. s&p off 11 nasdaq off 4.5 the dow closed at the highest level in a while yesterday we are going through earnings season we will have more in a few minutes about what we have been hearing from the companies you see u.p.s. up .50% gm up 1.3% not the case with 3m or general electric

down 3.2%. 3m beat for the quarter, but lowering the estimate for the year down 3.5% let's get ready for the tech earnings after the closing bell today. alphabet and microsoft you have more reports coming throughout the week. meta comes tomorrow. amazon on thursday joining us now is paul meeks wealth management portfolio manager. paul, how far the tech stocks have come down and as a result, people are eager to buy if they see good news, but you are in a wait and see mode. what are you waiting to see? >> i want to make sure that when the companies report that they will not give guidance that makes me and other analysts lower considerably revenue and eps estimates. although stocks may be cheap, you may say they are down 60% or 70%.

they cannot rally or they can't rally and hold those gains if we continue to lower estimates. let's see. clear the news cycle no rush to engage. afterwards, we will reassess i'm hoping to be pleasantly surp surprised. i'm hoping to see continued pressure on all of the faangs. >> you think it is not possible to get certainty into the future or they know what the future is and it will not be great >> i think they will be, although they may indicate they are seeing some sort of turn or confidence, i don't think that even the best on their teams can say that we have to see what unravels with the recession and what happens with the companies you have the digital advertisers like alphabet and meta more

impacted you have somebody like even apple that is geared toward consumer electronics we know there is trouble there let's see what happens we want to see the major tech companies and do we finally after years after aggressive growth in the cloud, see deceleration do the cloud companies, aws and amazon and azure at microsoft and google cloud have been growing nicely in the cloud business and focus has been there. they have been growing for some time 30%, 40% if we see deceleration, there could be hell to pay. >> let's split this out. they are not all down equally. microsoft is down 26%. alphabet down 29%. they look a lot better than somebody like meta down 60% right now. how do you look at these are you more trrinterested in wt you think is a good deal for the

stock dropping significantly or is there a reason you are drawn to the stocks that haven't fallen because they have a better story >> you see the ones in line with the nasdaq this year and maybe out performing companies like microsoft and alphabet a lot of people ask me about alphabet and meta, aren't they the same thing and digital advertising companies? alphabet is more resilient because they are search and meta is social media driven meta is going from legacy business to the metaverse whatever that may be a company like meta may be intriguing because it is down the most it has the squirreliest going forward business plan. i would stay with the leaders. alphabet, amazon and netflix with the turn in the story recently will do better with meta is the odd man out

regardless of how far that stock has dropped. >> paul, you sound skeptical what will the companies say to convince you this may be a time to jump back in? >> i don't think they will say much because it all comes down to the macro and they can try to spin it the best they can. they really don't know what type of recession we will have or how long it will last or how deep it will be. i don't think they know. i think what they can do is give p me some confidence or some hope or how carefully they are at managing costs. you heard alphabet talk about employees to be 20% more productive microsoft for example, sad for the people who get laid off, but they will layoff a couple thousand folks what you can control are the costs. i think they are doing a good job of that. when you talk about any rapid reacceleration or revenue, i

don't think they know. they can handle the specific stuff. i can't handle and you can't handle the macroeconomics. >> paul, thank you we will be watching tonight. keep us informed when you see the end of the bad stuff which may be coming. keep us informed >> okay. thank you. >> thanks. coming up, we will get a closer look at the earnings that are coming later with analysts or investor that says this week is make or break depending on what tech says it could be really good or really bad plus waiting for results from ca-laocco that is due in the next few minutes. we'll be right back.

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time now for a closer look at this morning's quarterly reports, and united and 3m

falling, and i don't want to talk about them although we can, and i want to talk about your comments on how important this week is because it will give us a look at tech and there's a couple reasons, and just the leadership that tech exhibited, so it's a psychological thing, and also these companies give us a good look at what is happening in the economy, whether it's advertising or commerce or whatever you want to look at, so this is, in your view, a make or break week >> absolutely. we have seen 13 trillion taken off the market and that has come from major agencies have been down, and we are at the crossroads of the unfriendly fed, inflation, and the first two quarters held up okay and earnings are holding up okay, and for the average company, the

average s&p stock, if they don't come up with terrible news or guidance, that will be a win in this market, but if alphabet, amazon, apple, if they have big business -- if they come in with terrible or unexpected negative guidance i think in the short term we are going to get a pullback on that on the other hand, if it looks like enterprise and consumer spending are holding up, and whether it's microsoft, alphabet on cyber security spend, and competing things like this, that tells us these companies are slowing down and that everything is okay, and then we will have to look at the balance sheets. most of the companies are sitting on a lot of cash, and some of them may have good dividends. long story short, if they meet or beat, that's going to be a

really good sign for the market and we could get that year end rally we are hoping to see, and if this miss, though, we are in for short term pain. >> you used the term, on the other hand, like john ford, and you started with -- he always ends with the one he has the more compelling argument for, in my view, and that's probably not true, and you started with the negative case and you said if they don't disappoint, and you must have a feeling one way or the other, 60-40, and you said a sustainable rally into year end, and let's take for argument's sake, let's say they are solid or unexpected, it could take the s&p back to 42, 4300 >> yeah, historically, from october to the end of the year it's about 7% up from here i do think that if tech, you

know, stays steady, we could see that level of performance of 7 to 10%, and i would argue higher if after november the fed comes out and does that 50 instead of 75, because the pivot means a little less and the market would be happy with that kind of movement, so -- >> the swivel. >> yeah, i am probably 40-60 it's going to be okay. >> really? >> i don't think meta will be great, but microsoft, apple and -- >> meta is down 65%, and it's already telegraphed at that. >> yeah, it is, and i don't have a lot of hope there because the advertising spend is not like google, and nothing comes with the metaverse except for big

costs, and they have a great user base but i will not put my money there, but i am comfortable putting my money with the enterprise spend and consumer, which is okay. >> when people said we hope things are not as bad as expected for -- it's so warped the way we do everything, and if tech says things are good, really, and then the fed is like, oh, crap, we have further to go. >> yeah, it's gotten hammered. >> i am glad you used on the other hand, and i don't think he has trademarked that -- >> i think the network has >> there we go they don't have to do anything on a tuesday sylvia, thanks coca-cola just reporting shares rising after an earnings beating, and that's after the

break. and hassan minhaj is going to join us to talk about his new show, and you don't want to miss it "squawk box" is coming right back shrrshrr

good morning, earnings in focus as wall street takes aim at a third straight day of gains. the futures are pointing to a lower open we have heard from several major companies including ge, general motors and more. we will run you through what is moving and get you up to speed

on the latest results. the countdown to the mid-term elections is on and we are two weeks out and the economy is front and center, and kevin brady joins us live. the second hour of "squawk box" begins now good morning welcome back to "squawk box" here on cnbc we are live from the nasdaq market in times square, and i am andrew ross sorkin along with becky quick and joe kernen we are getting earnings reports coming in, and a mixed picture, and the dow off 180 points, and the nasdaq, i want to call it up but it's really not, and take a look at treasuries that's the big story moving everything around. the 10-year at 4.77, and the

ten-year, looks like a good deal and then oil, 8326, down just a little bit as the ceo -- >> you can buy verizon and at&t with a 7% yield. >> is that still the case. st. at&t's yield is down to 6% >> you should hope -- >> i have seen the charts. can't go any lower >> they hope can only hope. both companies have struggled, you are right, with the dividends. >> let's get to dom chu. >> i got stocks that go up and shocks that go down, guys, and i will show you some right now a lot of earnings reports out

this morning, and i am sure you will recap a lot of these. general motors is up 5.5% right now, and over 30 shares of volume, and the automakers reports fell shy of estimates, and gm has 5.5% there -- this is the diversified from post-it notes to scotch tape, and it reported earnings that beat and fell short of expectations, and watch the shares down 2.5% and then general electric, shares are up 1.5% or 2%, and ge suggested earnings of 35 cents a

share, and we do know revenues were better than expected, and ge did cut the earnings forecast as well, and german sportswear or adidas has cut ties with kanye west, and adidas said it does not tolerate hate speech, and mutual respect and fairness, and adidas shares and german trading down 4%. and then weber on fire, forgive the pun. it already owns a vast majority of the stock, but weber inc. up -- >> that's a fire sale down from almost 20. >> yeah, if you could see the chart, exactly >> no, i got like a viking

>> yeah, built in, and that's a little old >> that's fancy. i have a weber >> a 10% swing, and ge was down 7, and now it's up and that's amazing. at face value -- either it was very thinly traded, and you can see it, dom, and -- >> yeah, right here. >> or somebody didn't factor in exactly what analysts were anticipating or re-evaluated the knee-jerk reaction >> it's thinner on a basis than where it normally is, and we are talking tens of thousands of shares -- i think 3m had five or six shares traded so you can move the stock around with that, and ge has a little more liquidity, and that's why you can see the jerky moves we have seen over here >> i have seen that before i have seen fedex move from $10

to $12 in the past at different times. >> and even general motors, it was not up 5.5% when i walked on the set, and so we have seen interesting moves in the last couple of minutes here that's general motors. >> thanks for pointing that out. that's why we have you do this >> i'm happy do it >> we know you are >> thanks. coca-cola reporting moments ago as well, and sarah is joining us with more on what the company is saying. good morning >> good morning, becky beverages are a good place to be for consumers right now. i will run you through some of the highlights on the tphuplgz $11 billion in sales, and the estimate was 10.5, and organic revenue growth, which is the key here, up 16% that was a really big beat what is important for investors in terms of stock reaction,

guidance raised on sales and profitability. and that was a raise and the interesting thing is going in there was a lot of worry about the strong u.s. dollar and how much of a hit that was going to be for coke, which is international, and they said 9% on earnings this year and kept that. coca-cola is one of the companies that hedges and they can see the cost for the rest of the year, and that will be unchanged and unimportant for investors, and i got off the phone with the ceo he said very strong, and we did well all throughout q3, whether it's in categories, the sparkling or carbonated beverages or some of the new innovations in fair life milk, and they did, for instance, in china, where they are facing mobility problems with people getting around with the lockdown problems, and they still managed to grow, and like we have seen

in so many consumer companies is pricing. out of all of the growth, 12% pricing for volume growth, and they managed to grow volumes even with higher prices. i asked quincy about that and he said we will continue to see that into the next year, and the costs are still high and they pass that on to consumers, and elasticity, that's the word. you can't have inflation rising faster than wages forever. i thought this comment was interesting. quincy went through what happens typically through normal recessions, and hard to tell if that's what we are in or going into, but consumers pull back on discretionary items and then

they buy less expensive brands, and as they go through the process, they reduce the basket size in terms of shopping and he said he's seeing that take place in the u.s. and europe, and still going strong and put a ton of marketing into advertising, and they are seeing the storm clouds, as he says, gather in the u.s. and europe economically i will be talking to james quincy later >> and yeah, 3m has been down after lowering its guidance. and then while you are here, adidas ending his partnership with ye, kanye west. adidas took its time getting here and they said they did it after the thorough review, and they will be stopping the payment to ye's companies, and i

think that stock is down 4.2% this morning, and that's the lowest level since 2016. >> it's a really big deal, and it's hard to get the exact numbers of how much ye makes up, and some analysts say it could be as much as 10% of the total annual revenue, and this is something that i have been highlighting for investors for a really long time you mentioned they took a long time, and it has been several weeks, and we have asked for comment every day since kanye ran the rants and no comment they have announced their ceo is stepping down, so it's a lame duck ceo but they have not announced a new ceo, and they were trying to punt the decision, but obviously the pressure grew too large. there was carefully legally worded statements about how they

own a lot of the ip, and i do wonder if they are going to keep all of these successfully easy styles and try and rebrand them going forward. we are going to learn more on earnings they report on november 9th. >> they expect to have a short term negative impact up to 250 euros on their net income of 2022, and we were talking about this earlier, andrew, just is there demand for the prau tkub product, too sarah, thank you we'll see you later today. >> some of the prices higher on stock x right now. >> not going to be there anymore. >> maybe >> and joining us after the break, he's got a little bit of an issue with hedge funds. here he is to tell us about it and also take a look at what else is happening on the show today, two weeks until the

mid-term elections, and the economy front and center, and we will speak to congressman, kevin brady, and then brian deese will 'rin us. wee back after this with hasan minhaj ♪ ♪ ♪ ♪ ♪ ♪ introducing ihg one rewards. seventeen hotel brands. six thousand global destinations. one loyalty program that lets you guest how you guest.

circumstances we have inflation running as high as we do, and that's not healthy for the economy, and i am still concerned about that >> the fed has to rethink using

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we live in greenwich, connecticut. oh, yeah, it's get out white everybody there works at a hedge fund, and i can feel your judgment, brooklyn you are judging me, and you are, like, really you are going to take your daughter and raise her in greenwich, and spoil her no, i want to see how corrupt the real world is. every morning she wakes up and sees bankers and traders in coats, and i say, look, babe, criminals. >> that was a moment from his new netflix special "the king gesture" now streaming, and he's on set

>> thank you for having me i have lost so much money watching this show i can't believe we are on the ground floor people can just walk up -- >> yeah, they can. >> do you have poverty pigeons run up to the window and say i listen to you. >> no, they use it as -- they put fingerprints on there. >> i want to talk about hedge funds, and a little kanye, because that's in the news >> what about the turtle neck? >> what is going on with that? >> every great american drifter comes on wearing a turtle neck >> are you putting yourself in that category? >> your head floats -- >> yeah, my time has arrived >> if we put a black ackground

your head just goes like this, and that's what steve jobs does. >> a lot of ceos around the world have shown up in reodd, and you had a show called "patriot act" on netflix, and you made fun, and then they pulled the show. >> yes >> there was a little bit of a back and forthwith you and netflix. >> sure. i know there was a back and forthwith me and netflix but there was a song and dance between me and the saoudis, and they banned the episode. so -- >> how do you feel they are doing business and it's more complicated with the price of oil? >> yeah, we talk about human rights violations until the

price hits $5, and then we do a song and dance with them, right, joe? >> if we are dealing with china, are we going to do all or nothing? >> yeah. >> honestly, we have learned over the years maybe not to try and take our morality and think that every other country needs to adhere by those to trade, and so it's a kingdom in saudi arabia, and kings have done some pretty crazy stuff throughout history. >> yeah, they can almost act with impunity because it's good to be king, i guess, in their view what do we do about that what would happen to less developed countries if we cut out oil, and there are concerns, and to be the moral arbiter -- >> yeah, i am banned --

>> you were slighted >> i didn't get the invitation >> do you think -- >> it's like asking me if dogs bark >> do we cut off all trade with china because of the uighurs, and that's probably a bigger human rights issue for khashoggi. >> do we not >> it's a complicated -- >> so we're all part of the same hypocrisy. >> yeah, i don't want to make a false equivalency, and i do the best i can given the information i am given and i am an artist and try to make jokes. >> you take on hedge fund -- >> yes >> and you live in greenwich >> yeah, i don't like the

leverage buyout people, because they have no value for creating a viable business that has a good product >> really? >> they don't care about the success of it. >> that's not true >> i am with you in some of these cases. >> yeah, high achieving hbs mackenzie -- everything is a pnl sheet. >> yeah, and using leverage in itself is an issue, and it blows up markets, and my dad lost his job at one point when we were young when it was a company that came in and did that >> and the worst part, they don't have a sense of humor about it, and that's why i am on "squawk box" talking about it. >> i am just going to stop -- i am going to take a big chance and channel gordon gegco

the company was so poorly managed, so there have been times in history where these firms have come in and done what needed to be done to save the company for the 50% of the remaining employees. >> do you think that is true with the guys with deep pockets now running a muck, and it's housing and local news, and nursing homes. >> it's not phmonolithic -- >> there's a guy in greenwich swinging those -- i don't like how you guys couch words, like retail investor, and i don't like that. >> are you a retail investor >> you guys are journalists, and it's the same way you used to write about rap music, calling

it urban music, and you are saying the same thing, poor people >> no, no, no. >> do you invest yourself? >> i lost a lot of money watching this show i have a pitch for the show. you need to add the segment, and this is great television it's called my dad told me not to and you have a retail come on the show, and i say, i bought bitcoin at 50,000, and even though my dad told me not too, and then my dad open-face slaps me on air, and -- >> did you buy bitcoin at 50,000 and your dad told you not to >> yeah, he told me not to >> at what price did you get in? >> at 50,000 >> did you really? >> yes >> sorry >> maybe you did not watch close enough and 8,000, 8,000 -- where were you? >> i guess -- >> i guess you were not

watching >> i was swinging kettle bells this is the grift by the way >> we're talking about cancel culture, and as a comedian and somebody who is in the entertainment -- >> my dad is handing me the phone. what happened? >> it was 8,000, and you said 50, and why -- you are cherry-picking the bad picks >> i watched the day you said it would go to 100 or more. >> trust me, we did not. you were watching the whole show i have been negative the whole time >> yeah, up to 8,000 >> kanye, this is the big headline in the morning, adidas parting ways you talk about cancel culture a lot, and do you put it in the category of he should be cancelled and this is appropriate? >> yeah. >> do you look at this in the context that he said something terrible how do you think about it? >> this is bad, and we're coming

to the comedian here -- >> a lot of what you are doing is cultural commentary, and it's a point where people look at the big news and they are trying to figure out what does a company supposed to do or you supposed to do and not say? >> the hatred and anti-semitism needs to be condemned full stop. i think right now corporations are dealing with this type of speech and rhetoric at scale, and this is not a new story, the clippers and the suns and now you have kanye, and it gets to a point where you have to condemn and cut ties with this, and i am mad at the media ecosystem where you had to put a microphone and camera in front of a dude that needs help, and for me, i see 40-year-olds wear foam runners, and i am like, stop it >> you think the media is part

of this? >> total -- i mean, for the past two weeks, under the g guise -- >> i thought it was the right decision >> if you really sincerely care, do we have to wear a live mic and cameras on you to talk about this >> you are trying -- you remember what happened when the houston rockets gm had the audacity to say one thing about china and the nba rallied around china because there are 600 million fans in china and it's all about the benjamins, once again, and so -- >> you pick and choose i don't want to make a false

equivalency between what kanye was saying and -- >> it's a good time to be a comedian >> trust me. i like poking powerful people, and it's one of my favorite things to do, joe -- >> we are not powerful here, and we cover powerful people >> i know the block i am on. how do you feel about the new pm over -- >> we should have a conversation about that how do you feel about that >> great >> former hedge fund guy >> yeah. >> worth more than the monarchy. >> what do i think about the monarchy >> no, the new prime minister is worth more than the monarchy >> are you serious >> 860 million >> clearly we don't have that in america, becky i think either way if he -- if he drives britain's economy in the ground, that's great, and

hindu's love karma if he figures it out and helps the uk, immigrants will do better are we getting the diamonds back are we getting the hardware or what >> hasan minhaj, check it out, and you are streaming right now? >> right now you watcng, hijoe? >> i'll watch, just be kind. >> "squawk box" is coming right back

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morning at 10 downing street in london let's get over live on the scene. this is big news >> reporter: it's certainly big news the prime minister of the uk officially bringing forward his speech here outside 10 downing street in london he becomes the third prime minister for the uk in seven weeks, announcing then that he accepts the role and hopes to continue with compassion as he had done during covid-19, and he

was chancellor and treasury secretary also, and he was given the sense that he helped the ordinary citizen in the uk, and then truss was right for looking for growth and mistakes were made and he was voted in by his party, the conservative party to fix things, so i guess, he has become mr. fix-it. let's get a sense of what he had to say this is what he said a few moments ago. >> i want to pay tribute to my predecessor, liz truss, and she was not wrong to want to improve growth in this country it's a noble aim and i admired her restlessness to create change, but some mistakes were made >> reporter: some mistakes were

made, and now he says he needs to try and earn the trust of not just the market or investor community but of ordinary citizens and he said it's a job he is willing to take on and he must restore trust after all that has happened and hopes to live up to the demands, so it will be a difficult one. next monday he is supposed to put forward his fiscal plan, and whether that is done by the same person who was in charge before he was prime minister is still a question and to put together his cabinet will be the key question mark heading into friday as well all of those still impacting things, and we will see how things fair on 10 downing street thank you. >> thank you let's look at stocks to watch this morning these are companies that have been reporting, and 3m reported a quarterly prophfit, and the

company also cut its full year outlook, and that outlook is in a range where the estimates are within, and you can see that stock off by 2.4%. general electric shares erased an earlier loss. and ge reported earnings that misses consensus, and revenue did come in above the forecast, and so did cash flow, and now that is up by 3.6% general motors is reporting a mixed quarter, and revenue coming in below the forecast the automaker reaffirmed the out look in the stock, and gm ceo is going to be joining us in a few minutes. "squawk box" will be right back.

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points, and we were down by 130 points earlier, and the nasdaq in positive territory, up by ten points let's talk markets with emily roland we have seen earnings really come in in a big way we have got a lot of numbers this morning what is your take on the earning season we have seen so far >> good morning, becky i would say it's decent. we have 20% of companies now having reported -- we're looking

at about 1.5%, and the bar had been lowered significantly, it was at about 10%, and 7 out of 10 sectors are seeing negative earnings growth right now. energy, of course, doing a lot of the heavy lifting with about 100% year over year growth expected for this year i think it's important to know that there are pockets of weakness there, and overall some of the key themes are positive we are seeing the banks indicating that lend something robust, and consume staples and discretionary companies are able to raise prices. this quarter the economic backdrop was decent until the end of the third quarter, so what happens from here is going to be a lot more challenging the terrain is shifting quickly and we are seeing cracks in the consumer and the forward guidance are indicating things a going to get harder, and 98% of

ceos are expecting a recession next year, and that's not being reflected, and earning growth is being pencilled in at 7% for 2023 >> you are seeing the guidance becoming more opaque, and it's hard to have visibility into what the orders are going to look like. we heard that from 3m this morning, and that got punished pretty quickly >> we are seeing discounting i don't know if anybody has been jarred by the fact that every website you go on, they want you to purchase your christmas gifts right now. you have a higher cost of capital, and you consumers continuing to be pinched by higher continued elevated commodity prices, food prices. they are making decisions in terms of maybe not engaging in that consumer discretionary high

ticket item but getting the things they need >> bottom line, stocks have come down significantly in some sectors. would you be a buyer or do you think there's more bad news to be priced into the stocks? >> there's value in some parts of the market, especially some areas that have been sold off amidst the selling, and these are companies with good return on equity and lots of free cash floor and more durable profitability, and think about companies that don't need the capital market in order to grow, and the quality factor is down more than the s&p 500 this year, and we think that's a big dislocation, and we would be looking there. we think the multiple compression we have seen ultimately turns into a challenge in earnings next year, so we want to look into areas to get income without the earnings

engine for support, and we are looking at a back up in bond yield as an attractive entry point. >> thank you coming up, with two weeks until the mid-term election, weighs and means committee member, kevin brady will join us and at the topf othe hour, national economic council director, brian deese will join us stay tuned

from fashion designers to game developers, it's a new experience for customers when you take value, that creates taxability >> could this be the next opportunity for tax then >> it may well be, and if you thought tax was complex already, buckle up. this borderless marketplace will push governments and companies to answer the key text question of thedecade, how do you tax digital assets and services and answering that question is easier said than done. >> what do businesses need to do now to get the tax strategy now? >> lean in and engage with the business, and understand the metaverse and web three, and think rnd or payments, and think about enterprise, which is learning and development so the companies that get the tax and finance groups in early

will be the winners in this, and you want to avoid surprises. >> thank you for sharing your expertise. >> thanks for having me, caroline just weeks away from the mid-term election where republicans are confident at this point they will take back the house, and our next guest has had a long career on capitol hill, 13 terms, and this will be his final term, and here to talk more, the lead republican on the house, weighs and means committee, kevin brady, and there are interesting races, like the governor's race here in

new york is getting kind of interesting. >> yeah. >> the big issues, inflation, crime -- >> yeah, for us, obviously, inflation, crime, the border and the economy is front and center, and there's a good reason for it half the workers have seen a real net pay cut, on average 9%, and that's a month worth of loss wages and that's huge on families, and crime is big , an the texas border issues driving it hope. we will see real gains among hispanics because their communities are paying a pretty steep price. >> the rcp averages things like that the house looks like from the safe seats, and the seats up for grabs in the leaning, lacks like there will be a gop win there, and i don't know if it's plus 20 or plus -- i don't know, but the senate you could not -- it's as

divided as it is now, and two are learning this way, and that way, and three -- it comes out to almost exactly -- what do you think will happen? do you think it finally breaks >> my guess is we end upcoming down to the runoff in georgia, again, so a replay of two years ago, and i am sure the people in georgia excited about that, another month or so with that, and you want to have the momentum >> what would republicans do >> the opposite. >> that's assuming what biden did caused it. >> yeah, what is the agenda in the house, and the four pillars are strong, and it's a future built on freedom and a government that is accountable, so hrless government spending,

more workers, more energy, and more innovation that can help drive inflation down >> what do you think in the shift in the relationship between the gop and the business community, which is what we talk about all the time, and sort of an outspoken and conflicting relationship than there used to be >> there is, and i think there's more tension along the cultural issues for the most part, and when we align on economic issues like working families benefit from that. we saw that after tax reform in a major way. that's where i wish the space was focused on, and we traded more opportunities, culturally and socially with a strong economy, and we lifted 6 million people out of poverty, and income inequality began to shrink, and household income soared, so together we created real societal opportunities, and not the government created but

the free enterprise created. >> and you are seeing some senators speaking about things in their own home, like disney and stuff going on in texas, and you are seeing pension funds and treasuries in some states pulling -- the liberal progressive blue states were the ones using the pension funds to influence certain outcomes and the red states never did that because it was a tactic we hated, and when i say we, i mean the gop. >> voting rights or gender -- >> it's not just about energy, but it's about a lot -- >> the ones you are talking about are about that >> standing by and watching hedge funds, the government just step on the hose of financing for oil and gas is hard to sit and watch, because we think it's unfair, yeah, i am not surprised.

>> you watch fox and see infrared people crossing, and there's 50,000 people coming in every day, and we have individuals, inflation, and one of the components we don't have enough workers, and if republicans get elected can you come up with a policy where we let people come in that need to, and we are not overwhelmed by illegal immigration. >> no question, we need more workers. that was a problem before covid and even more so now i think you have to shut that backdoor of illegal immigration to give you the space to -- on immigration reform >> why has immigration reform taken so long? >> neither party -- >> people could sit down and work it out, and how come congress can't >> in the summer of 2018, something happened in the house and got almost no coverage, and it should have, and a majority of republicans supported a bill

that shut the backdoor on border security, and traded a legal path status for the dreamers, the balance between security and that path going forward and the bill didn't make it out of the house, but the point was the balanced solution was offered up i still think that once you have got confidence that we have secured the border -- >> if you put that forward, and let's say you win the senate and the house, and if you put something forward would you get biden to sign it or no because republicans -- >> i think he will say no, because he has no interest in securing the border, and it's overwhelming -- >> why would he not have an interest in securing the border? you think it's undocumented democrats? >> in over time, they think they will get citizenship and voting

rights, and perhaps a path to a legal status >> looking at the 2008 bill on immigration, donald trump supported it but a lot of house republicans didn't vote for it >> not all, but a majority did, and the president was making calls for us >> why did some of the republicans not vote for it? >> look, immigration is hard to do >> democrats voted against it. >> yeah, democrats shut it down. >> you are complaining about the republicans. >> yeah, why is it so hard >> the catch and release, it did family reunification, which democrats like and it reformed -- it was not just who you know get you in the country, but what skills you bring, and so steps that way, and not a perfect real and it got real political real fast, and people forget, but it was the first real balance -- i think there's a desire to solve

this issue and do it right >> i don't know what else we would do about inflation i don't know >> well, i will tell you -- >> do you want to drill more, i guess? >> well, no, i mean, look, 2018, 2019, we saw saw dramatic wage growth without inflation so economic growth, twice as fast. >> all right, congressman, good to see you. >> two weeks we're talking two weeks. i think it will be a really positive night >> i'll bet you do >> good to see you all >> thank you all right. let's get to phil lebeau he joins us with a special guest this morning phil >> thank you, becky. let's bring in mary barra, ceo of general motors on a day when the company beats the street earning 225 a share versus 188 you also have double-digit

margins, mary. paint a picture of the market and the economy as you see it right now. >> sure. phil, it's great to be with you. first, i want to start by thanking the general motors team and seizing opportunities and managing through headwinds as well as thank our suppliers and dealers for the quarter that we delivered. we're still seeing very strong demand for our products and especially our full-size products and allowing for strong pricing and we are starting to see inventory rise a little bit, but well below pre-pandemic levelses right now we're still seeing a strong consumer and we're watching carefully and very pleased with the reception to our products >> mary. you ended the second quarter with 95,000 vehicles that were built and not delivered because they didn't have certain kaye components you cleared out about 75% of that and not all of of that is chip related and a good chunk of it was chip related.

are you to a point where you can say we're past the chip crisis you're confident there will not be any more major breakdowns in production because of chip shortages. >> you know, we are seeing a steady improvement and very proud of the team that we were able to clear 75% of what we had on inventory because of the chip shortage i wouldn't say we're completely out of it yet. it is more volatile than what i would expect at this point and we're continuing to work through the different challenges and quarter by quarter we're seeing it improve >> let's talk about china. it is your largest market in terms of volume and when you look at what's happening over there. the xi administration, if you will, he's going to be in charge at least for another term, if not another two terms, and there are a number of people who are worried about american businesses and their operations over there and you're front and center in that how concerned are you about what you're seeing in china

>> well, we're looking at the situation very carefully you know, we believe that if the two countries, we should find a way to compete and have a level playing field. we have strong brands especially the cadillac and buick brand are very strong and from an sgm operation, the mini is still the best-selling ev in china so we have a strong business there. it's important, but when you look at it as a percent of our overall performance, both revenue and especially ebit, it's not as significant for driver as it was in one point. we continue to see opportunity in the iconic products and we'll continue to monitor the situation. the team did a great job on profitability this quarter and we'll build on that. >> mary, last week you guys unveiled the new gmc sierra

denia denali and i know it comes out late 2023. eventually you expect the base model to start at $50,000. i know you haven't given official pricing on that, but a number of people look at the automakers and they say i don't see them being able to hold the line on pricing and evs given the cost of the raw commodities that are going into battery packs and building these electric vehicles. how confident are you that you'll be able to offer these models at prices whether it's the denali or something else in the ev space at a price point that you will not have to continually raise prices >> well, as we look at the trucks, both the silverado ev and the sierra ev we do see the opportunity to see multiple price points because you go from the work truck, all of the way to a luxurious truck like a denali ultimate and so we'll continue to have the wide range

covering the truck market that's so big we said the equinox will start around $30,000 and as we ramp it up and are able to supply our own sales we see that that vehicle will be profitable and we've done a lot of work on the ev supply chain, making investments in this country and ahead of ira, but ira should also support what the treasury rules are. so one of the things general motors can do is provide a complete portfolio from an equinox all of the way to a super truck whether it's the hummer or the sierra or the silverado and we intendto do that and over time start strong margins and that's the implementation that we're on and we're on track >> mary, you've been through recessions in general motors during your career and typically, the auto industry takes a big hit in terms of demand that is out there does this feel the same or does this feel different if we slide into a recession

does the feeling you're getting from other business leaders and looking at the economy, how does it feel now compared to what you experienceded in past? >> i think one of the big difference is when the country has gone into a recession is generally the inventory levels were a lot higher. inhave not ors are so low to monitor the situation and get inventories to what i'll call a new healthy level, muchlower than it was in the past and because we don't have that inventory situation, i think we're much better prepared to manage if we do move into a recession or have challenges from a demand side perspective, and i think through covid, we demonstrated how many levers we can pull to really continue to invest in what's important, our ev future and our av future and at the same time take measures to make sure we have a strong balance sheet. >> speaking of the ev future, november 17thing and that is your investor day and a lot of

discussion for that day planned for what you'll be doing and raf ra ramping up evs >> guys, i'll send it back to you on squawk, and 235 a share versus estimate of 188 i'll send it back to you >> all right, phil, thank you very much. when we come back, nec director brian deese will join us on inflation and more and kyle bass as xi jinping takes on a third term "squawk box" will be right back. ♪ ♪♪ be ready for any market with a liquid etf. get in and out with dia.

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earnings rolling in fast results from gm, 3m, coca-cola, general electric and so much more we'll bring you all of the highlights breaking news, adidas cutting ties with kanye west over anti-semitic comments and how it will hit its bottom line and are we in for more tech turmoil in china now that president xi is the leader for at least five more years hedge fund manager and kyle bass will join us on that key question as the final hour of "squawk box" begins right now. ♪ ♪

gm and welcome back to "squawk box" on cnbc live from the nasdaq marketsite in times square along with becky quick and andrew ross soshgin and the futures are pulling back this morning. we have a lot more to come accident dow is down 140 points and the nasdaq indicated it's down 14 and the s&p off 13 and change let's look at treasurys and we're following the ten-year and two-year, the ten-year 4.46. >> corporate earnings, among the top movers, general motors helped by rebounding sales gm said supply chain constraints are easing, allowing it to increase inventories on dealer lots that's good news for anybody looking for a car out there. the ceo mary barra joined us on the quarter just a few minutes ago. >> we are still seeing very strong demand for our products

especially our full-size trucks and allowing for strong pricing. we are starting to see inventory rise a little bit, but well below pre-pandemic level so right now we're still seeing a strong consumer and we're watching carefully because as we move forward very pleased with the reception to our products. >> also reporting this morning, you have coca-cola that company beating on both the top and bottom lines and raising its full-year outlook. it sees steady demand even as it raises prices and that stock up 2.5% don't miss an exclusive interview for the ceo on "squawk on the street. the company missed on the top line and its latest results even as it beat on the top line 3m will cut its full-year outlook because of rising costs and the impact of the strong dollar and that is off by 2.8% >> let's get back to the broader markets given the volatility and mike santoli joins us with what

he's watching. mike, what's on your checklist this morning >> kind of interesting, pulling back this morning from the s&p from the 3800 level and we're 12 days removed from the panicky drop after the last cpi report that was on october 13th since that low that morning. s&p 500 is up almost 9%. so you've had a sense of running outside of the urgent sellers in the last little while and i've been pointing out since the june lows you haven't made downside progress and the reason people are looking at this 3800 area technically as a bit of a hurdle, the downtrend that connects the mid-august high and that's where you'll find it right there. also yesterday we had the continuing theme of disengaging at least slightly in the short term from what's going on in treasurys. you had yields that were steady to higher and you still had a good rally day in the s&p. you'll see if that does continue take a look at the industrial

sector we're talking about 3m and ge, there's been from the industrials and it's interesting from r from where it's coming from you see the industrial sector right here this is over a couple of months and you'll see over the last month or so it's been outperforming the s&p. it's coming from aerospace and defense, but not from transports so there's stuff working within it also caterpillar and deere machinery and aerospace are fine whereas transports play on domestic volumes and things like that have taken a backseat so there's a message in there, too. second day after that chinaa shock. take a look at how it splits between u.s. markets and emerging markets outside of china. that's what -- this is the overall emerging market. very heavily weighted in the chinese equity market and here you have, that's the overall equity market. this is excluding china and what

you have there is india, taiwan, south korea, brazil and two-thirds of it and you see the separation here, right china has dragged the overall emerging markets lower and outside of that doing pretty well and see if that continues, andrew >> mike santelli, we will see what ultimately happens. it will be a pretty interesting day. thanks all right. we are just two weeks out from the midterms and races across the country are expected to turn on the strength of the economy we'll be getting a clearer picture before the vote with the new gdp and inflation data and the fed decision that comes next week joining us right now on all of this is brian deese director of the national economic council. it's good to see you i think we're trying to figure out what to make of the economy and the overall health of things on the one hand, if you look at the jobs pick ture it's a good e and on the other side of the ledger, you have serious concerns about a looming

recession and you've got inflation running hot and gdp running weak and real wages that are down with the stocks and how would you sum things up. >> it's a striking degree of resilience as you mentioned and certainly that's true in the labor market and also in terms of household balance sheets, as well and we're seeing signs of cooling and almost a million job openings and last summer, the summer of 2021 and other areas like on the supply chain and the new york fed's index and the supply chain is back to where it was in pre-pandemic lefvels expressing some significant progress in getting supply chains to move and obviously that brings prices down throughout the supply chain, but we haven't made enough progress in bringing progress down and it's what we can do to help

encourage that process in bringing prices down in a way that doesn't give up the historic and economic gains that we've made and the focus on energy prices, for example, in addition to oil prices which are down 35% from their summer highs and in the industrial sector and going into the winter and on the oil side, gas prices coming down they're falling now for the third week in a row and we know that gas prices in addition to being important for american families and the sentiment about the economy. so, look, we're focused on a resilient economy based on a historic recovery. we need to make more progress on bringing prices down >> hey, brian, the biden administration didn't create all of these problems, but it is a serious argument that it hasn't helped alleviate it and the

approximately sees have exacerbated things when you look at real wages, they've come down significantly and have not kept with inflation and that pinches workers that are struggling to get by if you look at what the biden administration has done it hasn't really helped does it get to wages and stay there in a real way and continue to spiral out of control there are people who can say focusing on labor unions, focusing on trying to push some gains through in other areas isn't helpful, not that you don't want to help american families and make sure they're helping enough to keep up. it does become problematic how do you shut that off >> i would say two things. the first is let's look at the global economy these issues of inflation are global in nature the eu inflation is running at 10%. the united states is uniquely well positioned in a challenging

global environment from a position of relative strength. that's not an accident they're a result from policies and help head workers in the bottom half of the income distribution in a way that prior recoveries haven't and that positions us well, but second, let's look at what this president his prioritized. over the last year the combination of the infrastructure bill, the semiconductors chips bill and the inflation act are taking steps in the economy that will increase productivity in the economy. reduced price pressures and better infrastructure and more resilient industrial base that is prime for a complicated global economy and we see china over the course of the weekend and bring down prescription drug costs at the family and household level. all of these are steps to take on long-standing problems that the democrats work with republicans to get done and will

pay economic dividends in the years ahead. i think that we are in a significantly better place than we were a couple of years ago and we are in the best place of any major country to deal with a complicated problem and we now have these tools in place that will make a game changing difference for families. families, workers and communities. what we want is an economy that generates real wage growths for moving americans and we have more work to do, absolutely, but we're movinged in direction and you can see the direction that we need to move and it's a very different direction than economic approximately see was in the past and what the republicans would like to move to in the future >> you have a very fair point that there are a lot of other countries that are doing it worse than we are. that is a certainty. brian, when you look at inflation, the problem becomes that you are spending more and adding more money in the economy and i do look at a lot of things

that we've done including the inflation reduction act and it just means that you'll take taxpayer dollars and pay for that right now and all of those are counter to what the fed is doing and the federal reserve trying to tighten monetary policy and we've seen a much worse example of this in the uk where they're offering tax breaks at a time when clearly they should not be adding more stimulus to the economy and that's a worse plan and the market said so, but should you be moving in a way that's count tore whato what the bank is doi? i think federal fiscal policy is doing exactly what you want which is taking steps that are complimentary to the fed our deficit in fiscal 2022, so you saw a contraction in the federal balance sheet of

$1.4 trillion and that moves in the direction. part of that was increased revenue from a stronger than anticipated economy and part of that was a reduction in spending because this administration has been able to pare back emergency spending because we've gotten covid under control, but if you look at the inflation reduction act, it does exactly what you want, complimentary to federal fiscal policy, reducing the deficit by $250 billion over the next ten years and doing it in a way that actually, for example, reduces federal medicare expenditure and reduces the prices of prescription drugs both in medicare and the private market that's the kind of fiscal policy approach that you want in a way that's complimentary to the fed. long term tax incentives that aren't generating excess demand in the short term, but are going to lower the cost of clean energy i think in the united states what you're seeing is the fiscal policy that's helping the lower

costs and that is a contrast to the way other countries are approaching this across the world and you also have a president saying i'll respect the independence of the fed without lower costs without exacerbating the cost. >> brian deese, happy for your time. >> on the other side of the break, the founder is bullish on energy stocks even in this era plus coil bass joining us on another term for xi jinping and ignga and jeremy segal will be wehi ahead and it is all here on "squawk box as we roll on

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welcome back to "squawk box. as you can see, we are down 180 points on the dow. one of the worst levels that we've seen in the pre-market session. the nasdaq's down about 10 the s&p off 15 or so and the biggest s&p loser this morning, if you're wondering what the biggest s&p loser is this

morning corning -- corning on a weaker-than-expected warning, andrew >> a bet on u.s. energy stocks is a good bet. the companies are free from esg mandates and so is the founder of asset management and he joins us and he has a new wall street journal op ed out with david sochul why we're bullish on energy stocks the question i would ask, the climate act of sorts whether you think that's a good thing or bad thing, and the debate, but given the money that will pour into all sorts of clean tech, the question is if you put a dollar into fossil fuels or something like that and one of the clean tech efforts and if you talk about it five or ten years from now who will have more money

>> it's a great way to put the question, it doesn't have to be an either/or we're in the middle stages of a great reversal between the fortunes of u.s. technology stocks over the course of the last decade and u.s. energy stocks which i think are looking at a different era in the next decade and the thing that happened from the 50,000 foot perspective, we were in a period of chronically low interest rates which tends to favor tech or anything that rhymes with tech from biotech to clean tech is investors describe a lot of value to distant, uncertain cash flows when cash is yielding low amounts in the cash today. yet over the same period that investors were willing to grab that fortune to technology companies, they said that you know what? fossil fuels and their profit will be after 2030 and there is a great fortune in the tech sector while it flat lined or was down over this period. i think that dynamic is changing with the few factors that are

apparent this year soaring inflation ask nd keep in mind, against the backdrop of rising interest rates to fight inflation which favors tech stocks we predict and we foresee the possibility of a rotation of capital and from the tech sector to the energy sector and the thing this year is that the russia invasion of ukraine woke everyone up to the fact that you know what? fossil fuel profits aren't going anywhere in 2030 and they're here for some time to come >> take out even clean tech stuff, if you add money in an apple or alphabet, you take that money and rotate it into fossil fuels right now? >> into broadly, the u.s. energy sector and there's a strong argument to be made for it and the reason why, that's a massive supply, demand imbalance is not going anywhere for energy and there's a be in of factors

coming up in the relative near-term to spike the supply/demand imbalance. we'll see what happens in china and when the coronavirus is lifted and xi jinping has a firm grip on power and that's a demand shock coming as a supply shock to the system when the ban on russian oil goes into effect. the u.s. petroleum strategic reserve is the best since 1984 to buy fossil fuels and to buy oil from u.s. fossil fuel producers and the middle east is somewhere between unable and unwilling if you're saudi arabia and the uae to step up and fill that void. so i think the basic issue, andrew is we've had this esg-informed investment consensus over the last seven years and fossil fuels have fallen off that clip after 2030 and the so-called terminal value and the value in the distant future in the fossil fuel profits are effectively implied for a long time at zero. if that rises, you can see the

energy sector. >> i'm not even going to debate this point with you. i agree with you that long term or at least over the next ten years there will be a market, clearly, for fossil fuels, if not for 20 or 30 years longer. the question is from a tailwinds perspective, given actually the injection of money that i was arguing the inflation reduction act ultimately is for those kinds of companies whether those will turn out to be better investments than fossil fuelses? >> i don't think that that money from high from the federal government changes the underlying fundamentals from where we are in global demand and need for fossil fuels relative to the wind, solar to fill that same void. that's my view, andrew i think that's been laid bare this year with respect to the disruption of less than global market share of hydrocarbons coming from russia

if that were to wreak havoc i don't think we would move into a transition any time in the near future you might have some artificial engineering top down from the short run. those political winds could just as easily changed in other direction. >> you know, you've made lots of arguments over the conversations that we've had on this broadcast about human rights in china, about the relationships that the u.s. should have or shouldn't have with others dollars in the desert is taking place, a number of multinational ceos including jamie dimon other ands are there this comes against the backdrop of this skirmish, if not more, between the u.s., biden admine sta administration in that conference and how do you see it >> i've been to that conference, the thing that bothers me here

is you have a u.s. president who has to go hat in hand, begging every foreign dictator around the world when we could be doing it more effectively right here at home and biden got slapped in the face not once, but twice by mbs. first when he accidentally rehabilitated mbs on a global stage. this is a dictator who biden said he wanted to turn into a pariah and legitimized in the stage when opec decides to cut production >> if you don't believe that he should be legitimized, then do you believe that those ceos should not be going there as a boy cott, if you will, against this country not this country, but saudi. >> i have my personal views as a citizen andrew, but i don't think it's the responsibility of company to be the moral arbiters of international justice and part of the problem we inherit is when companies claim that role for themselves that's what renders their behaviors hypocrital, whether it's with

china or saudi arabia and our societal expectation should be one that companies should just focus on their products, for profit without apologizing for it >> you talked about companies and the idea of being patriotic and the idea that here is a country that's slapping us in the face >> i believe citizens need to be more patriotic and part of that is viewing companies as being patriotic or not i believe companies, to be clear about it should focus on delivering products and services for profit, but the problem, the trip wire in that system, andrew is that companies are able to claim the moral patina that they get from signatures at home and they come out smelling like a rose. >> hold on before we go and i don't know if you think it's moral patina or not, weigh in then on adidas

ending its agreement with kanye over these anti-semitic remarks. i would argue this is not a moral patina this is something that you have to do and you have to do not just as a citizen, but as corporate citizen of the world. do you have a different view on that case? >> i'm not going to pick on adidas to cut ties with someone that is or isn't good for their brand. at end of the day, if you can't discriminate against somebody on account of their race, sexual orientation or gender, you shouldn't be able to discriminate against them on account of their political beliefs. >> they were trashing morgan you can't cut a customer >> kanye said he wanted to end their account with him if someone wants to terminate the elationship, and i'm makin

a broader point not based on the facts of that case you know --? yeah so the facts are still there -- >> we can change the example the specifics of the can kanye west changes on what he says on a given day. the companies that discriminate on the basis of race, sex and national origin, they're not permitted to do that >> if somebody makes a hateful, anti-semitic comment or more than that in this instance and i will accept that there are perhaps mental health issues, bipolar disorder and other things taking place. >> yeah. >> nonetheless, that a company should be able to say enough with you >> so i think that companies should have that freedom, and i think that actually, my preferred state of the world, we don't have these protected classes at all i think if we want to let the free market work we should let the free market work, but the point i'm making is what

happened in the last 50 or 60 years is that in the name of expansive civil rights jurisprudence. certain hostile workplace environments now work on the race statues and we created the very culture that creates political discrimination in the workplace so we can't have it both ways. >> back up, vivek. you're blurring the line here? i don't think so >> are jews are a protected race that you don't think should be protected. >> so, look, here's what i think. either we trust the market that businesses get to discriminate and they're discriminating one race and that's a good opportunity for another business to hire with those people and work with those same customers either we trust the free market or apply the standards >> if j.p. morgan decides they don't want to do business with somebody based on nasty comments to people, what's it to you?

that is the free market. >> they're discriminating on the basis of religious beliefs i don't know why we treat it any different from political beliefs. >> do you condemn what kanye west said? do you condemn kanye west as a person >> i condemn what he said. i have nothing, but disagreement with his apparently anti-semitic comments i don't know what personal struggles he's going through, but i absolutely condemn the comments >> we are up against a hard break. good to see you. >> thank you. >> what can investors expect with xi jinping gearing up for another five years and kyle bass from hayman capital namemagent will join us stay right there "squawk box" will be right back.

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box. i'm dominic chu. we have a long way to go and a short time to get to all of them and i'll be efficient here c coca-cola, profits and revenues both top estimates and raised its full-ier outlook and demand is steady even as it races prices to make up for higher cost 3m, 30,000 shares of volume and the industrial conglomerate known for post-it notes and lower than expected sales and 3m cut its full-year outlook due in part to rising costs and the strength of the u.s. dollar. shares of ups, roughly 85,000 shares of volume and the logistics company saw a mixed quarter and better than expected earnings and revenues and the profit margin expansion to help offset costs and general motors is up over 3% and over half a million shares of volume and better than expected earnings and weaker than expect revenues and gm did cut its outlook and

it did see supply chain issues easing and we'll cap things off with jetblue, 3%, 400,000 hshars of volume and it did help make up for rising costs and head over to cnbc ppts com for previews of the big ones after the close, like alab, phet microsoft and visa "squawk box" will be right back with kyle bass keep it right here visa "squawk box" will be right back with kyle bass keep it right here they've got a guide to help them through, i definitely feel privileged to be in that position. ♪♪ fsd pharma is developing new treatments for neuro and inflammatory disorders. in a breakthrough discovery, fsd

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welcome back to "squawk box. chinese tech stocks rebounding after tanking yesterday following news that china's president had secured another five-year term as leader and stacked the top communist commit we loyalists and here to talk about whether investors should expect this market volatility to become the norm. kyle bass, hayman capital founder and cio. this has been the most telegraphed occurrence over the past year that we knew this was coming what about the tone yesterday? was it that spectacle with the former premier jintao that shocked people, kyle

does it mean, maybe that xi jinping will be more strident in his walk back from free markets? >> yeah. good morning, joe. i think it's important to note that number one, that public humiliation of hu jintao and th removal of any of the thought leaders from the bureau was something that shocked many because he was the person or one of the people that was really focused on reforming an opening. something inserted into xi's work papers that were filed back when the party congress began, and something in that former nsc was china caught over the weekend was the fact that they inserted the term great struggle and replaced reformed an opening with great struggle and are focusinging on this great struggle, and i think that in

itself was a major change on top of hu, xi jinping appointed to be standing there in the bureau in the standing committee and also in the central commission he added two spy chiefs. he added pem with expertise and atomic weapons and procurement and in the military and he started changing where he was actually willing to go to war with taiwan. he said not only would he be willing to use force on taiwan, if taiwan was seeking independence, but now he can seek a forceful resolution of the reunification of taiwan even if the focus is simply on restoring or, let's say, fighting the, quote, taiwanese separatists themselves so he changed the -- he moved the goalpost on the war. he changed the document itself over the weekend and he

installed people that had never been in the bureau before and he removed anyone who focused on reform and opening and he sacked the technocrats and he sacked the head of the csrc and the sec and he removed the person from the pboc that wasn't at retirement age all of these things happened very quickly, joe and the way that i see it he installed a war cabinet and removed the people that people like steve schwartzman and larry fink talked about that were not focused on the reformers enough and we should be focused on them and not the hard liners. guess what all of the hard liners are in place now. >> the goose that lay the golden egg in china over the last five, ten years has been the free market reforms and sort of their version of capitalism. so to make this transition with

this -- bringing a billion people into the middle class only happens through gdp growth. how is he going to -- how is he going to continue to make strides there, if he's, killing the goose that lay the golden egg because you're not going to get the same type of growth if you don't have market reforms? >> yeah. i don't know if you showed it on cnbc, joe, didyou guys watch the press conference with merrick garland and the usag and the fbi director wray? >> no. >> they indicted 13 people yesterday all focused on the chinese national security problem. ten of which worked for the chinese government, and they were literally paying people to steal the u.s. prosecutor's notes and playbook they were bringing military and

ministry of state security people into the u.s. to intimidate people here on u.s. soil and try to get them to forcibly move back to china. i mean, china is on tilt right now and any investors that don't see what's coming are blind to this all they have to do is look at evergrand's bonds and one of the largest property directors in the world with $300 billion worth of debt and why are there westerners and market for chinese and the market is different at zero. >> you've talked a lot about china and the american and multinational companies. i think you shouldn't be doing this as china and we got into a conversation not just about china, but about saudi, given than there are so many multinationals right now >> do you have a view about saudi and what the relationship should be given the issues that

exist in china, that exist there? >> i don't mince words there, either we have the countries that don't respect human rights whatsoever. saudi being one of them and iran being another and china and russia, and i think if you look behind the scenes they're all aligning themselves to be able to trade with one another. china, just a year ago xi jinping ordered its banks to do an extensive review against u.s. sanctions to continue to operate. i think it would be a large problem. andrew, if you look at what he said over weekend, he said prepare to undergo high wins and waves and even for the stormy seas of a great test it's all being telegraphed if you look at saudi, saudi is playing both sides of the coin and has had to do that throughout the entire career,

but saudi's newfound -- what's the answer both from the perspective of the administration and the country and what they should be directing companies or not to do and any company should be tickinging on, and western just debiting, moral positions on their own for. >> moral digs are not necessarily the purview of corporate america, right so we can all argue that that's not enshrined in any shareholder agreement. their whereby is to make money, but on the other side of that coin, their job is to risk assess where they do business and just like the risk assessments of u.s. institutional investors, where they invest and now one can argue that they've lost everything in russia where there's been absolutely a disaster for any kind of institutional investment, and a

lot of people invested there because it was, quote, cheap and now everyone is looking at china and hong kong saying it's cheap and they have to grow and they have to turn around. what's happening in the world today when you look at risk-adjusted returns. if you're an institutional asset manager or a corporate ceo or board, you have to re-do your risk assessments and invest in something like saudi arabia and investing in china and hong kong and they outrisk 10 to 1 where the risk assessments are so obvious. >> it's weird. i can see russia went on and chose war instead of the economy. although they've done okay in terms, on the price of oil you think china is going in its own corner with the allies that you mentioned or getting kind of on a war footing for a

confrontation with the west at the expense of further progress with their economy i mean, that's what you just said, right? it's more than just u.s. investors getting hurt in chinese stocks this could set up a pretty serious confrontation with china that might not end well. >> yeah. i mean, the u.s. military has been planning aggressively planning over the last 12 months for a potential conflict in taiwan if you listen to xi jinping's words very specifically, he says prepare not only for high wins and waves, but stormy seas and a major test there are those that are out there, yojoe and andrew that sa china will never do that because they're too economically interwoven and it would hurt them too much. >> exactly >> how many people did you hear say and experts and the think tanks say that russia is saber rattling they'll never actually invade ukraine.

>> experts say that, yep >> thewriting is on the wall and it's clear as day, every step they take forward is taken one step closer to a kinetic conflict in taiwan it's clear as day what they're focused on now if you look at how xi is building his team, it's fairly obvious that this is going to happen >> thanks, kyle in thank you, guys andrew, i want to commend you on the piece you wrote and it was very well done and people should pay attention to that. >> thank you for that. actually, bernard warner wrote that piece about short sellers and i was privileged to publish it >> short sellers >> it was the nicholas story it was the nicholas story. >> up next, jim cramer's first take on the trading day ahead and then we're joined by jeremy siegel, wharton school professor, one of them "squawk box" is coming right back

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let's get down to the new york stock exchange and check in with jim cramer. jim, we have continued to get earnings out on a lot of fronts today. you've got some that have performed well, if you look at coca-cola and 3m is getting punished what's your take away from what you've seen? >> i think 3america has become a troubled company and they miss them on many different lines it's small, but when you add them up it's big coca-cola is extraordinarily good and general electric was very, very strong. raytheon technologies was mixed and there are raw costs, but it is made up by united parcel having a good number there's only 3m that was bad again, we have a situation where we have the futures going in the wrong direction of the stocks. the stocks themselves are doing quite well and the futures have been horrendous as a predictor of what will happen on a given

day. >> what do you think is happening? >> right now >> yeah. why have the futures been so out of whack >> i think they're looking at the dollar and the bonds and every take of the bonds. in the end is after a few days the stocks that really did well go higher and i think the people stopped paying attention to the futures which is just a game and started paying attention to how the company was doing which is very real. can you imagine what coca-cola can earn >> geez. there are very unbelievable opportunities here and people are trapped by thinking about the futures and the fed. >> the dollar is up almost 20% in the last year >> think that's done >> yeah. it really is look, there's just -- the idea that our currency is so powerful that we can go over to any country in europe and just have a field day, i mean, look,

people are traveling and it's the only commodity that hasn't collapsed and it's a very crowded trade. >> okay. jim, thank you >> we'll see you in just a few minutes. >> by the way,

welcome back to squawk a clearer picture of corporate earnings coming into focus this morning. reports from g.e., g.m.,

coca-cola and more jeremy seeing elg, professor emeritus at university of pennsylvania's warren school of business good morning to you. you have been bullish on things. the market has been bullish on things how much of that is a function of a view that the federal reserve is going to stop moving higher, or is it a view they may go higher and then ultimately be forced a year from now, say nine months from now, to actually go lower later? >> yeah. i think there's going to be a pivot soon and i don't mean that means they're not going to increase. i think it will be 75 basis points next week but i think they're going to acknowledge that there has been a tremendous amount of progress made on inflation. and i want to reiterate the very important housing market

distortion in the annex. in fact, in less than 10 minutes we will get the well-known and well-respected case-shiller monthly index. i predict it will show a decline, maybe about 0.8 of a percent. and federal housing administration index, which i predict will be a decline. if you remember what panicked the capital markets and the stock market two weeks ago was that core rate well, the core rate was pushed up by an increase of 0.7 in the housing sector and, as i pointed out, with the bureau of labor statistics lags so dramatically -- >> right. >> -- in putting that in, that we will see the real index decline in 10 minutes, and there's still inflation in the core rate. >> okay. so -- but, jeremy, i'm trying to

understand short-term you think they raise 75 basis points. before the end of the year, another 75 >> i hope not. i don't think it's needed. you know, i mean, 75 and 50 in weight, i don't think that's needed but i think the market is more than hoping for what exactly it is but a statement by the fed that they see progress. >> right >> and at some point can afford to pause and see if that progress really makes it that's what the market is looking for. what scares the market the most is the fed is going to stay this tight through 2023, which i absolutely think would be really a disaster for the economy >> say we get into a situation where there is real unemployment and we start to see that move. i would think at the rate we're going you start to see it by

february or march maybe. i don't know and maybe they reverse course. i don't know but there is the larry summers view of the world that we are going to get into a period of stagnation and then what? >> welsh you know, i respect it, but i disagree with larry that we have to be as high as he thinks we have to get. because i really think that tremendous progress is already been made against inflation, and we are way on the down side, even though the statistics won't show it for quite a while. so i think that the fed is -- i wouldn't be surprised to see a 2% fed fund rate by the end of 2023 as we see the economy what's important, people are so impatient. we've only had six months of tightening it started in march. and all of a sudden, because core rates are not going down, people are saying, oh, the fed is not, twoing it has to keep on hiking

there are long and variable lags in it. >> right >> look at the money that started in 2020. we didn't get a lot of inflation until 2021 >> i don't want to misstate the larry summers position i agree he wants higher rates. he talks longer term about a period of effectively secular stagnation if that's the case, the question is the market a graduate value buy. i think you would argue it is. that would require i think to see serious growth at some point. >> well, there's a chance the fed can save that stagflation and a serious recession if they acknowledge now that progress has been made. i don't think that we're going to have -- i think inflation is coming down. stagflation is high inflation

with very slow growth. now, we really had slow growth this year's gdp is very, very low. and we're having coming down inflation. i don't think 2023 will be marked by the stagnation that larry fears. >> so what is the siegel family doing with its money >> we're staying invested. we're long term. i mean, and for young people with cash, i think this is just a great time to come in. >> you're in the index business. what indexes would you be be buying or individual equities >> i really like value value type of stocks are selling for 12, 13 times earnings. s&p is 15 because the tech are still, you know, in the high teens or 20s and nasdaq is still over 20. i think the long term -- i think the swing that we saw still has a way to go away from tech, more towards dividend paying, more

toward value investments in 2023 >> an argument is being made that fossil fuels will be a great investment over the next decade if you could put a dollar in fossil fuels or clean tekin decks, what would you put money into >> personally, i would diversify on that. listen, oil went from 23% of the s&p in 1980 to remember a year and a half ago i think it was 4% now it's about 8 or 9. i want to ride that roller coaster. i think everyone is better off by a much broader diversification than sectors. >> it's nice to get your opinion on all things sectors. thank you. >> thanks. we have many more earnings to come not just today but for the rest of the week

the nasdaq is positive i'll call it positive. only had half a point. let's look at the 10-year note it is not really what people are necessarily focused on this morning. 2-year, 447. make sure you join us tomorrow we definitely hope people make money, or at least save money. "squawk on the street" is next ♪ good tuesday morning welcome to sidewalk on the street premarket is a bit soft despite lower yields and good corporate results out of u.p.s., coch, g.m. more on the way with alphabet, visa on deck our road map begins with g.m., 378, g.e. all crossing the tape.