airline and casino stocks in china surged after the government eased covid rules particularly around international travel we take you live to beijing. and elon musk's message to at whi twitter employees. if you don't come to the office, resignation accepted it is friday, november 11th, 2022 "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm rebecca quick along with joe kernen and andrew ross sorkin. as joe mentioned, it is up, up and away this morning again. green arrows across the board after the massive gains we saw yesterday. dow indicated up triple digits

with 106 nasdaq up 60 s&p indicated up 13. that comes after stocks ripped higher yesterday dow up 1,200 points. a gain of 3.%. s&p up 5.5%. the nasdaq was the biggest winner of all. u up 7%. all three indices had the best day since 2020 it was volume that was strong, too. the strongest since september 16th the bond market is closed today in observance of veterans day this is where things stand the 10-year treasury down to 3.81%. the 2-year treasury is down, too. we have talked about 4.7%. it closed at 4.3%. and the dollar with the worst day since 2009

$107.34. and china easing covid measures removing a penalty on airlines bringing in too many cases those changes should not be relaxing of the prevention control, but adjusting it is still sticking by zero covid policy markets in asia jumping overnight as a result of that building on what is an early rally in the united states you are looking at markets hang seng moving up close to 8%. look at travel stocks. they jumped as well. we will show you travel stocks and casino stocks. sharply higher it has been a lot of speculation of what would happen with casino stocks mgm up 8%. macau is up 9% we will take you live to beijing in a few minutes >> the number had been softer

than anticipated people were blelieving this was fed pivot. >> it is interesting we tested the july lows. 3,5888 does that count? below 3,600? in bull markets, you get scared by sharp breaks. in bear markets, does the same thing happen with a short covering rally 7% in the nasdaq is a big move in a single day. >> carl icahn was on with scott wapner he has been bearish for 30 years. he says you see things like this and you get volatile days. it doesn't mean the all clear is there if you are looking at the longer term. if you missed the rally yesterday, you have to be hurting. if you were waiting for the

pivot or the turn. >> it matters what happens with inflation. i can see we go to new lows if this is a brief sort of head fake about things cooling like a '70s thing arthur burns or montgomery burns or whoever was running the fed, they thought they had it licked. if jeremy is right and elizabeth warren and all these people are right? >> i personally think it is more 75 i do i'll be consistent with that i'll stay there. when you say you should be fully invested if you are in for a day or around for longer, i think it is longer decision. >> i have been hoping for the pivot for a while. if you are wrong about transitory, how do you think you

are right that you have to go higher than most people think? they don't know. they don't know. >> the transitory talk was something he held on to longer he might have had conviction for it he was waiting to see if he would be reappointed >> you are basically saying all the money that the biden administration spent and fed printed caused systemic inflation. i'm saying reopening after the pandemic briefly is causing the dislocation in the labor market which makes it look like a long term, but it is not. why is inflation bad >> i'm not even thinking about it the way you are thinking about it i'm thinking about it as here is a guy who has told the market one thing and believes his credibility is on the line over what that is -- hold on. i believe as a result, is going to continue on that path it is super clear.

not just a little clear, super clear because he does think about it like antibiotics and he does think you don't want to stop the medicine too early. i think he believes it is worse to stop the medicine early and get caught out again and have to go back. >> the basis points stopping the medicine 50 is still raising. >> i tell you -- >> the fed chairman legacy can be ruined in one of two ways ruined by being too easy or you were so strident thinking about inflation and you sink the economy into a harder landing than necessary that's what people on the left are saying why are you trying to kill the job market what if he does kill it? >> i think he is looking at this and saying this is a remarkable strong economy >> and liesman said one month is not a trend.

it will take many months to build up to it i also don't think whether he goes 50 or 75 next time around is the end all-be all. it is how long he keeps the rates at higher levels that's the question. >> i remember the horrible hyper inflation. itengrained. >> oh, my god. it smells so bad in here >> because i'm talking >> no. >> something died in here. >> we have issues. >> did you see the dahmer? it is ode to dahmer in here. i think the risk is you -- >> i don't disagree with you all of the risks you spelled out. i have been saying i don't think that is what is going to happen.

>> we don't know if sinking the economy cures inflation. we don't know if we're addressing the right thing >> that's the only thing they have >> it is like here is inflation. here is the economy. we're going to sink the whole thing to deal with this. the job market is holding up >> raging inflation out of control is bad news. and once it gets into wages and you look at the contracts negotiated >> elon musk >> 7% is still terrible. terrible it doesn't matter. >> it's coming down. >> not fast enough it isn't >> now you are talking about we should be drilling more. a lot of it has to do. >> sure. >> we don't plan this. that's what is amazing we don't plan this senator warren is right.

you are like no! twitter pay for verification system rolled out wednesday. it is not going well yesterday, eli lilly had to ab apol apologize. a blue check mark account sent this tweet saying we're excited to announce insulin is free now. free for everybody the fake profile used the company's logo as the profile picture. it appeared to be legit after it began to pick up steam online, the real eli lilly account we apologize to those who were served misleading messages from the fake account our official account i is @lillypad >> this is the problem with the $8 paid for twitter check mark i can see charging $8. make it look different

this blue check mark sounds like you are verified and somebody looked into it that is what we used this entire time >> worse is the idea -- this is what i don't understand why he wants to put the company in jeopardy i think it is possible that lena will say enough already. >> a bunch of people quit yesterday. >> the point is what will happen p is he is worried about making money now. when there is billions of dollars of fines from the ftc because they are not working through the consent decrede and you have this behavior all over the site, that's a problem that's going to have a real economic cost. >> they moved this up. the fake account has since been removed and the company logo from the profile there are others new york times report. maggie haberman retweeted news

pretending to be espn reporter and was fooled by the system last night, lockheed martin. a fake account tweeted that all weapon sales to saudi arabia, israel and the united states are going to be halted until there's further investigation and record of human rights. >> at some point there will be real danger to people, human danger, or danger to the stock market think about what could get published and move the markets. >> especially when sam bankman-fried and others are -- >> totally that's in our world. a call about the economy or ukraine or russia or others with complicated situations complicated is the polite word for it thequestion is whether regulators step in and say enough we're doing it this way.

you have to actually abide by something else then, you go to court and you will be in court for years and years. >> the question is whether he will be able to maintain the ftc decree on the company. a bunch of people quit yesterday and the legal team who weren't fired saying we are not involved because you will not live up to the ftc >> you used to see a blue check mark now blue check marks -- >> right you have to decide if the blue check mark is not relevant >> if you have a problem with anything you see that i tweeted, it is not me at this point i have a blanket >> you are working that joke two days in a row? >> it is not a joke. anything you see there may or may not. you need to step yours up. you use it to watch? you don't use it to say anything you don't want anyone to know.

>> i use these three hours to say what i have to say. >> true. coming up on the other side of the break we dig into the collapse of ftx. the real morning joe latest on that story next. we will get reaction from former s.e.c. chair jay clayton that is later on in the hour first, we have the big market rally look at futures right now. they're up dow up 104 nasdaq up 60 s&p up 13 points you are watching "squawk box" only on -- only on cnbc.

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join xfinity rewards for free on the xfinity app today. our thanks, your rewards. welcome back to "squawk box. now an update on the collapse of ftx. as issets have been frozen on te exchange in the bahamas. the regulator says it is aware of public statements suggesting

assets were mishandled and mismanaged and to the sister trading firm alameda headed by sam bankman-fried. sam bankman-fried plans to close it down and a lot of talk of trouble. now news moving overnight about access to customer funds ftx halted withdraws, but regional exchanges have resumed some service ftx getting a credit facility from tron which is letting investors redeem smaller currencies on the platform ftx u.s. is separate to the exchange and it may be halted in a few days, but withdraws are available now. i imagine people are racing to get money out. the question is will we see customers getting money out or not? all of this as sam bankman-fried is looking for cash to keep it

afloat sam bankman-fried is warning of bankruptcy if he can't ftx is in an $8 billion hole on the balance sheet. the venture firm of coinbase invested in the fund i asked brian armstrong if he saw any red flags given what he knew about their numbers versus the fact he had his own in c coinbase >> i feel duped as others because i look back at the interactions i had with sam and, you know, i felt he was a very bright and genuine and eager person perhaps a bit young. he is a bit reckless in certain moments. not corrupt. again, i hate to use that word we don't know what happened. people get in over their heads or misunderstandings happen. we should wait to reserve to see what happens when all of the

facts are in you mentioned the numbers. i was aware of of our revenue last year. we did $7 billion in revenue and $4 billion of positive ebita i was aware of their revenue as an investor which was $1$1 billion. i was surprised how much cash sam had in the market and buying 9% of robinhood. you look back and i certainly didn't feel anything enough to speak up i was as surprised as anybody. >> i think a lot of people feeling that way right now >> that's the same thing mike novograd said that yesterday where is he getting the cash for the deals. >> a lot of people were quiet about that because they were jealous.

an envy. they thought am i doing something wrong? how is he doing this it wasn't just how is he doing it it is almost feeling bad that you couldn't do it nobody wanted to raise their hand and say i think there is a problem here >> during the good times, alameda was riskless arbitrage >> he was buying in the u.s. and selling in japan >> riskless. the other with the interest. it made hundreds of millions of dollars in short order you can put that back. he thought he could keep it going. >> he was running a prop desk. coinbase was never that. coinbase has no -- >> as far as we know. >> no, i am confident about that. >> you were all the way on the

basis of crypto in general at one point. the underlying asset is questionable people are treating it like it is at this point >> there is a different between bitcoin and crypto. >> a valuation issue which is how much does it have to be worth? >> $1 and $62,000. >> that is the moment. the range may be lower or higher i never thought it has to be viewed with the kind of value it has been viewed with >> we will see you know who you have coming on? >> who >> christian who last time once tried to talk about short covering for a rally will you let her talk as long as she wants? will you let her do that >> absolutely. >> do you remember last time we had to go to break we had technical problems and the conspiracy -- just let her if she wants to talk about it.

>> we will dig into the rally after the cpi data shows signs of cooling inflation the nasdaq soaring 7%. if you were in the market yesterday, it was a good thing dow surging 1,200 points the next guest says this is another technical market bear rally. kristin, you were interrupted by a gentleman. i don't know who he was. >> we have no cameras. >> whoever that interviewer was. why don't you continue with what you were saying. >> now if you want to talk about short covering, which you probably do. there was short covering yesterday, kristin >> absolutely. i think we need to breakdown what could happen short-term in markets versus reality of what we expect in 2023. i think yesterday's price action was a great reminder of the dangers of market timing the worst day notice market

followed by the best days and the data shows in you are out of the market on average for two of the best days of the year, you reduce your return by 80%. there were technicals driving the rally. you have bearish positions in the market we had record volumes of option activity leading into yesterday. both on the side of put options with unwinding of the positioning. interestingly enough on the side of call options. a lot of investors positioning for a bear market rally. dealers are hedging on the back of it to drive markets higher. one thing i have to say going back to the beginning of the program in terms of what happened with cpi. does this mean the fed pivots? we don't believe so. it is simple 7.7% cpi print is far away from the 2% target. the fed is trend dependent

chair powell has said this in the past and they will not give cr credence to one data point 50 basis point in december is not a dovish signal. we are still on the tightening path which is why we're cautious >> would you like to go on we like to give you the time. >> you didn't talk about short covering enough for me, kristen. to show you really are allowed to talk as much as you want about short covering no wione tells us anything. >> anytime you take the view on the market we are talking about peak bearish sentiment and positioning. that is people taking gains on the position and being able to unwind those positions. >> kristen, admittedly 50 is still, you know, you are still in hiking mode it is not 75

why a 25 basis point difference? people yesterday were -- people that thought 50 were emboldened by what they saw it will be 50, not 75. it is still resulting in 1,200 points it is still tightening someone saw something yesterday that certainly got their juices flowing or bullish juices flowing. we go back below 3,600 and back to new lows at 3,200 >> you have to balance short-term and expect for 2023 what chair powell is saying this was just a little over a week ago. howfast, how high, how long? we could reach the pace of slower pace and higher destination. there are two key data points. one is inflation and the other is employment.

as long as we have the employment data which is strong, which the fed is under shooting when it comes to the unemployment for 2023. they are forecasting 4.4%. we think it will reach 5%. until we see the data come through and break, we will not see a fed pivot or potentially a pause. >> kristen, i don't want to cut you off. >> you can keep going. >> we're going to break. >> i'm told we have to go to commercial >> ask me many questions. >> we hope to have you back. thank you. >> i hope that made the apes happy. >> good luck with that >> that's all we care about. making the apes happy. when we come back, china relaxing strict covid rules overnight. this is significant. we will take you live to beijing and talk about the relaxing rules in a moment. later, we talk to the ceo of huntington bank.

a top ten regional bank. we talk to steve steinour about the easing inflation pressure and the higher rates andhat wit means for mortgages and other loans. stick around we'll be right back. ♪♪ ♪♪ ♪♪

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new overnight. china relaxing some of the strict covid rules we want to get right to eunice yoon in beijing. eunice, this sounds significant. i can't remember hearing anything like this over the last three years. >> reporter: you and i would say relaxing or significant. china and chinese leadership has described this as optimizing th covid controls and unwavering sticking by the zero covid policy the market has considered this as easing. there are positive developments for any foreign executive who

may want to come into china. the government quarantine is five days in a hotel that is appointed by the government opposed to seven days shorter period another three days if you have a home here, to be monitored there. then you only have to take one negative covid test in 48 hours instead of two it might be easier to catch a flight here because the policy that u.s. airlines as well as other foreign airlines found unreasooeasonable by china was e circuit breaker which china would suspend flights if infections were detected on the flights. that policy is over. there is positive developments for us who live in china first of all, the extreme measures mitigated for example, positive cases and close contacts are rounded up. close contacts of the close contacts are no longer rounded up and put into government

isolation. the risk is redefined. it is now high and low as opposed to high, medium and low. the point of that is fewer people in theory, will be put on lockdown then supposed to be the citywide mass testing is going to be disco discouraged. all of that is a positive development that is being sent a signal sent and at the same time, people are not sure how these are all going to play out and whether or not it really gets to the underlying problem with zero covid with the economy and that is will it solve the uncertainty that zero covid creates? >> eunice, thank you i have so many questions we will check in with you throughout the morning one question is why are you standing on the street in the rain i guess it still has complications in terms of getting in and out of offices. we will talk to you when we come back we are short on time we will see you in a little bit.

thanks, eunice. coming up, former s.e.c. chair jay clayton will weigh in on the impact of the ftx collapse here is a look at the llyep s and losers in the s& ray sterday. >> announcer: executive edge is sponsored by at&t business at&t 5g is fast, reliable and secure oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic i labra-dore you round of a-paws at&t 5g is fast, reliable and secure for your business.

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when we come back, we will have former s.e.c. chair jay clayton. he will be here on squawk to talk about the collapse of ftx. then later we talk to phil murphy take a look. the dow in the green nasdaq up 75 ghp looking to open 18 points hier "squawk box" returns after this.

i'm not surprised this happened there really is no -- as far as i'm concerned, no rules or laws. it's like the wild west. >> does it feel illegal? we'll see. it feels immoral >> we feel we're trapped in a dysfunctional relationship with crypto and we want out. >> not all companies are like this just like the traditional financial system, you have a company that goes bad and not representative of the whole. >> when you give somebody your token and they go down, you will stand in line at a bankruptcy court. >> if you are going to have the crypto asset, it needs to be nobody else's liability. you need full transparency to it that's what bitcoin is that's what ftt was not. >> it is frustrating we have basically a situation

that looks like theranos >> get back to the drama of the week you see what we're talking about. collapse of crypto of ftx. lawmakers believe regulation is long overdue joining us with this is jay clayton. former s.e.c. chairman and cnbc contributor and non executive board at apollo. do you have a framework that would suggest would have prevented this, jay? it doesn't involve crypto, but it looks similar to things we have seen in the past just with plug in different names and it is the same idea things are going great -- when things are going great, it looks like you can do no wrong it is almost as if it is happening gradually until it all happens all at once. it happened again. >> joe, it is amazing how much

leverage can be a really great things when things are going up and how quickly things can unwind look, do i have a regulatory framework? we have a very good regulatory framework for financial products in the united states age old lessons we're learning again. liquidity transformation taking money on short-term terms like a bank. lending out on long-term liquidity transformation needs a great deal of regulation you need capital you need high quality liquid assets you need access to be able to borrow in the event of stress. leverage leverage needs regulation. we know that time and again. and one of the things we're seeing here that is, i think, going to be focus and chair gensler mentioned this rules in asset regulation and

segre segregation. all of the rules exist in the financial system they are there for a reason. they are there for stability in times of stress. what we are seeing a time of stress and none of the rules seem to have been in place in any rigorous way >> we heard no regrets i heard i don't know if it is illegal or immoral having the exchange give money to a sister company that then uses it to trade is that illegal? is it ill advised? is it co-mingling funds? is it a gray area? what is it >> in the united states, joe, there is no gray area around these things that's fairly clear. one of the things about crypto and the development of crypto and we spoke about it on the program. it has developed internationally

24/7 and retail. you know, i recall speaking about this with andrew back in 2018 we had a live event. i took the opportunity to say to people if you send your funds offshore to an unregulated platform exchange or matching system, wherever you want to call it, there is very little the u.s. authorities will be able to do to help you get it back. and we're seeing that play out u.s. investors should understand that doing business with regulated u.s. financial institutions have a tremendous amount of protection doing business with unregulated financial systems particularly offshore ones, on a comparative basis, almost zero protections >> there may be zero protections of getting people's money back, but the long arm of the law would reach down to the bahamas in this case, wouldn't it? >> becky, that requires

international cooperation. sure does the long arm of the law reach people who engage in activities connected to the united states? yes, it does we have a broad jurisdictionajurisd jurisdicjurisd jurisdictional concept with individuals it is different from entities. what can you do? i can tell you one of the more frustrating things i had at the s.e.c. was looking at the alan stanford victims they were mostly retail people they got taken for a terrible ride their money or what was left of it, was spread around the world through alan stanford's network of fraud it was so hard to get it back. >> hey, jay, a couple of things. you know, when you think about the long arm of the law,instancg arm of the law comes after the fact can you make a stake for wire

fraud? it is a matter of jurisdiction and what not to me, the larger question is how do you get ahead of the things fighting with the s.e.c. and ftc and what the laws should be and who has jurisdiction and why we have all of the rules and regulations in place that we need my fear which mirrors brian armstrong's fear is rather try to get laws that make sense that bring people into the fold of wanting to do business in the u.s. we do the opposite and the truth is binance and ftx and so many others are offshore and offshore for a reason what do we have to do to actually get these plat fforms o operate in the u.s. and operate in a way that everybody feels good about >> andrew, there the reason they are offshore is because the activities cannot comply with the basics of u.s. regulation, that should tell you something

i don't believe and look, i don't believe that's the whole story. are there tokenized and di digidig digitized products suitable to be offered in the united states? i think so i think they are coming. it does go to your question. how do we accommodate that within what i would say is our extremely remegulatory system? we have to do so incrementally >> jay, here is the thing i can't figure out jay, gray scale wants to have a bitcoin etf. that might make sense except you have the other operators operating outside of the united states that have such a massive impact on the price perhaps of said etf you could have a regulated etf in the united states on one end, but the true impact is something you cannot regulate on the other. >> that is, andrew, that is one of the reasons why it has taken

so long for an etf to be approved in the first place. is there activity going on outside the united states? it is going to make the price discovery that the etf uses subject to the manipulation. andrew -- go ahead >> we were going to ask about the flag you want to talk about that. before we do, i don't understand how such savvy investment professionals cannot ask more questions. you looked at the list that's what novagratz means when he talks about theranos. the people on the board. is it that they get so excited about the potential that they don't do the due diligence blackrock. did they fall in love with sam bankman-fried's rhetoric how can the companies get i hope

inv involved how does that happen why don't they share some of the blame? >> i don't know that you can blame people for -- >> for being stupid. >> yeah. i say we don't regulate euphoria and we don't regulate stupidity. >> what is with the flag >> it was a guest from the s.e.c.'s veterans committee. i want to take a few minutes of your time and thank the veterans for their service. the s.e.c. was blessed to have almost 20% veterans in its work force. i can tell you that what a terrific group of people and not just pitching in, but helping me and my colleagues find areas of impact veterans are a trusting group. many times an offshore group and they need the financial protections we talked about. we had a great initiative to make sure our veterans and

day-to-day financial activities are better protected you know, it was just a pleasure to serve with all those folks. >> great okay very good. we want to remember that today jay, that's something we obviously need to talk about again and again and again. i don't know we really respect anyone that puts their entire future on the line for us and we all take it for granted. remembering it one day a year is not enough >> people give me a hard time about the gun. it is a civil war gun that found its way to afghanistan and given to the s.e.c. veteran by a fighter out of respect for the veterans our u.s. troops on the ground in afghanistan. >> people give you trouble about it >> it's america. you can have an opinion. >> i know. i understand thanks, jay. when we come back, we will talk about yesterday's cooling inflation data and rising

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the latest inflation report showed inflation cooling in the month of october still pretty high. let's dig into the implications for the med and for consumers. we're joined by steve steinour steve, inflation numbers have been very high fed has been raising rates there's a lot of concern about a recession, but we hear that coordination have been doing pretty well. is that what you're seeing at your bank too? >> absolutely. you can see the impact these rising rates, slowing down

certain business, in particular home building and a few other areas. >> what other areas? >> manufacturing would say that their sales forecast are a little less confident in '23 over '22 but it's having an impact. >> are you seeing loans down >> loan demand is brisk part of that is because inflation is driving a change in cost of inventory, things like that. a need for increased working capital and because of the supply chain constraints, most are in need of working capital. >> what does this time look like not just from the economy, historically, but just from the health of banks as rates go up. >> this is very, very different from '08/'09

the banks are in fabulous positions. and we have strong momentum and pipelines going into next year so we're very optimistic about our position and we're looking forward to helping our customers through the dip if there is one. >> the fed raising rates, that's good news for banks in general. >> it's the steepening of the curve that helps us. rates were almost negative at one point. there's a rebalancing that's going on the adjustment is happening were quickly. it's challenging for some consumers. the fed has to break the inflation cycle. >> the complaint you'll hear from consumers -- this is for any bank out there, oh, my, gosh, rates are going up, my credit card rates are going up, my interest that i'm getting in my checking account is not when can they expect to see that go up.

>> it's on cds and money markets and you're starting to see that -- >> nowhere near as fast as the fed is raising rates. >> we couldn't sustain that margin so there's a rebalancing that's going on i think it's about to level off. >> for an investor who is looking at the bank, what are those margin levels at this point? >> banks are generally like a 310 to 350 margin. that would generally be the range for many banks and that will allow us -- we're already doing this, to reprice money market and other interest-bearing accounts. >> what's it mean as mortgage rates go up just in terms of demand for mortgages housing is a big part of the inflationary picture but it takes awhile for that stuff to sit down. >> the yield curve has moved significantly. until yesterday we saw mortgage rates above 7%

that's a really significant change 3.5% at the start of the year. this doubling has had an impact. mortgage applications are off 40% this year and projected to decline next year. if and when we break the inflation curve and start coming back down, i think it will open up housing. >> you sound positive about things if there's one thing you worry about, what would it be? >> i worry about a sudden macro event. we pay a lot of attention to what's going on in europe now with ukraine and russia. it doesn't take much to unspool markets. and we've had days when markets weren't open already this year we think we're on the right course from fed policy, break inflation, and then put us back on a more natural track. >> does crypto and the concerns we've seen around that qualify as something that concerns you -- >> it's not a big impact directly it's $2 trillion of loss, of

wealth so far this year. it's a big deal for some people and we have 3 1/2 million customers. some of our customers are getting impacted by this. >> steve steve steinour, thank you, steve. we have more on the fall out from yesterday's cooling inflation data and the big rally in the markets yesterday that seem to be continuing this morning. dow up 142 "squawk box" will be right back. you ok, man? the internet is telling me a million different ways i should be trading. look! what's up my trade dogs? you should be listening to me. you want to be rich like me? you want to trust me on this one. [inaudible] wow! yeah!

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good morning futures jumping after the s&p posts its biggest one day rally since 2020 the state of the consumer, two reads on where people are spending money one from the ceo of price line and another from a top bank of america economist analyzing car data inside the mind of sam bankman-fried. anthony scaramucci is back after visiting with him. and the second hour of "squawk box" begins right now. . good morning, and welcome back to "squawk box" right here on cnbc. we're live at the nasdaq market site in time square. i'm andrew ross sorkin along with becky quick and joe kernen. u.s. equity futures are looking higher dow up 116 points. nasdaq up 51 points.

the s&p 500 up 13 points m >> let's get right to the top story. there are three top stories. steve liesman joins us now you had to be a little bit chagrinned, excited, surprised yesterday. that was quite a response across almost all asset classes to -- >> it was remarkable it was remarkable, joe there were eight fed speakers in the past two days, some of them coming after the inflation report and there is this subtle debate going on in the committee, joe, that i think is worth logging in here not over rates going up in december, it's how far the fed should hike before pausing kansas city fed president saying the fed has, quote, more work to do and that high household savings could require a higher interest rate for some time.

a concept hammered by fed chair jay powell saying i currently view the larger risks as coming from tightening to little. there was no side to this. some with a more dovish view distinguished by their concern of their risk of doing too much. laura logan may not be a dove, and concerned more about the fallout from hikes to the financial system she said the fed, quote, should try incurring costs that are higher than necessary. of course, there's charlie evans from chicago, he said he was nervous about risk to the economy of higher interest rates. it's not likely to show up in december where the fed is seen hiking by 50 basis points. they're most likely to show up next year. the peak funds raged is 4.93 that's down 12 basis points from

yesterday. not a lot considering the excitement in the stock market the fed futures market sees the fed cuts a half a point from the peak rate by the end of next year in one sense, an emerging debate between hawks and doves, it's a sign of a return to normal there's been little disagreement on the committee that could be about to change as the fed grapples with this critical question, the unknown question of how high it has to go to fight inflation and one note, joe, i don't think i heard any fed official be as excited as the decline in inflation as the market appeared to be. >> steve, you mentioned it right at the top, that it's not what they're going to do at the next meeting, it's how far they will go if you remember the market at the last meeting, the market took off until jay powell started speaking and then he went out of his way

to sort of cure that extuberance in the market by saying we're going to a higher rate you just called that potentially into question. and i did at the time because they don't know, they didn't know transitory. they can't possibly without knowing the data two, three, four, five months from now, they can't possibly know how far they're going to have to go, i don't think. but he made it -- he did that and the market went from up 500, did it go down 600 that day. >> something like that 900 point swing. and now we're saying we don't know whether the terminal rate is really going to be higher than we thought? >> we don't know that. joe, we never knew that. that number, that peak rate, we follow it because it's the market's best guess of what it thinks the fed is going to do.

and the fed is guessing and grappling with this question i thought, joe, if you want to go down into the weeds on fed analysis, i thought that the statement came out and was part of the agreement i've seen over the years, joe, that when a chairman wants to bring a certain, you know, oppositional part of the committee on board to vote for a statement or vote for a change in the rate, they'll put a paragraph in to kind of mollify it and i think that paragraph was in there and that's what the market took off on and i think the fed chair came back and redirected logan and evans are voters next you're that we're going to want to watch people are concerned about the risk of doing too much and some too little that's a line with the chairman.

braina brainard seems to be concerned about doing too much there's been this monolithic fed for a long time. now the important differences are emerging and we have to figure out where that peak rate is going to go. >> he does a whole paragraph just to bring some of the dissenters into -- that sounds scary. but as envy jay powell where your legacy is you stayed too long or you don't stay long enough and you get inflation get out of hand. i don't know how you strike that perfect balance and it's not easy we want him to succeed, but i don't want to be him that's for sure. got any hair that's not gray by the end of this, jay powell is going to be white, i think. his hair >> it's going to be tough. but there's no gulag, just to be clear. >> there's no what >> there's no gulag. but there is an archipelago.

thanks, steve. see you. >> now let's talk about the broader markets. here is what billionaire carl icahn said on closing bell overtime about yesterday's rally. >> i am still very -- quite bearish on what is going to happen a rally like this is, of course, very dramatic to say the least, but you have them all the time in a bear market and i still think we're in a bear market. senior investment strategist at edward jones are we in a bear market? >> it looks like we are seeing more signs of optimism that we may be going through a period of stabl stabilization. yesterday's inflation report provided a bit of optimism, relief, of course, for the markets. but what we saw in there was an inflation print thatcame in below expectations even as energy prices were higher, even

as shelter and rent prices were sticky and so that means that some of the forward-looking indicators that we're seeing in inflation around housing, rent, things like ism prices paid for both manufacturing and services, supply chain pressure indices all are moderating if the leading indicators of inflation are showing signs of easing, there's a case to be made that yesterday's print was a start of a trend lower when you look at history, when inflation is elevated and starts moving downward. it takes 12 to 24 months to reach that trough level. but it does so pretty consistently if we are in that environment where one print doesn't make a trend. but if we get two, three prints lower, that alleviates the pressure from the fed. gets us on that path towards a more sustainable recovery ahead. you know, we've moved pretty far up, pretty quickly some volatility may be likely. but there's a case to be made that we're in for a bottoming

process ahead. >> if you're right, then, how do you play what you think jay powell is going to do? i made the argument, i think he's going to stick -- at least next month he'll -- he's going to stay. i think it's every five. people think it will be 50 what do you think happens afterwards and the market is always trying to figure out what's going to happen before it happens >> yeah, that's a great point. i think that's the key one, especially we think the next meeting in december he's likely to move at a slightly more gradual base 50 basis points is a relative vate elevated rate hike i think the fed is headed to 5 to 5 and a quarter terminal rate it creates volatility in markets. if you look beyond that, historically, when you do get peak fed and that peak terminal

rate in place, the 12 months after that are pretty positive and resilient for markets. the s&p 500 is up on average close to 16% we are setting up towards this backdrop where as we head towards a peak in rates both for equity and is the bond market, that's a pretty nice backdrop to be in as we head into the year ahead. we're hopeful that both bond and equity investors can see a little bit of rebound in this u-shaped recovery as we move towards the next 12 months. >> mona, thank you appreciate it. >> thanks, andrew. coming up a view of the economy from 33,000 feet priceline ceo joins us with a look at where consumers are spending, still spdienng stay tuned you're watching "squawk box" on cc >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com.

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. welcome back to "squawk box. demand for travel shows no signs of slowing that's according to brett keller, price line's ceo even before the pandemic, you have made the point that demand seems inelastic almost if people want to travel then you go and get pent-up for two years of a pandemic and we

wonder why even if money gets tight why people are still going to spend on travel you think this could last two years longer by the time people are already cutting back on other items, they're still going to be spending on travel for at least two years just to get it out of their system what we just went through. >> it feels like it. travel seems to be a highly prioritized activity especially when you can't leave your house. now when you can, it's happening in vogue and we look at what's happening even coming out of q-3 into october, we see a little bit of acceleration remain in place if you look at airline load factors and hotel occupancy rates, those are reaching all-time highs people are getting out and traveling. >> the luxury splurging or are they already starting to do what we're seeing in other areas and trying to find deals, trying to trade down, i don't know, discount airlines, lodging

what are you seeing? >> well, we saw the tradedown really happening coming off the pandemic people were afraid to book out into the future. they were really using it more for utility travel those properties recovered very quickly. now we're seeing the recovery happening across the board, all star category and is with the airlines, there's limited supply they're still running 10% down versus where they were in '19. the planes as you i'm sure know are packed and it doesn't matter where it's the low cost carrier or a full carrier, people are traveling and filling up the flights. >> domestic still more than international or international has caught up now as covid -- no one talks about it anymore, i don't think. >> right our analysts here at price line have been tracking this closely and domestic travel recovered quickly coming out of 2020 into

'21. what's happened in the last six months, now that many of the international countries have dropped their restrictions, which were really just earlier this year, months back, we've seen a very strong recovery in international travel in fact, americans in particular are traveling now all over europe and are now beginning to move into asia, philippines, thailand, places that were shut down three months ago. >> people are going on big cruise ships again you still got -- you got other viruses that seem to love those ships too. but people don't care. you get trapped on those things, people are going on because of the deals, are they still discounting? >> they are. people love to cruise. if it's in your blood, you cruise no matter what. what's happening, it is one of the most really economic friendly kinds of travel there are. you can pick a three, four, five-night cruise and spend 50 or $60 a night with food

included that's cheaper than driving down the street to a low-star hotel it's really great value for the consumer. >> weird the booking holding, we're still not back to the highs. even though you would say the business at least as good as it's ever been or no >> the business is really healthy right now. in our earnings report, we signalled strong growth in q-3 and q-4 and hopefully 2023 as well it's unclear what the consumer is going to do the next year or two. >> it's not covid. it's that other thing, the fed coming up on the other side of this, china easing covid restrictions the possible impact. we're going to talk about it when "squawk box" comes right back

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♪ good morning, and welcome back to "squawk box. live from the nasdaq market site in times square. look at the futures. up 109 points right now on the dow after 1,200 yesterday. nasdaq indicated up 47% gain in the nasdaq yesterday one day. dow leaders in the premarket, take a quick look at some of the stocks that are -- you know, 111 maybe more interesting yesterday. there are a few. walgreens, chevron, nike, salesforce -- salesforce that's right, it is a dow component. >> so is nike. >> walgreens boots, still working on that. nasdaq winners, premarket,

jd.com pinduoduo, netease all made the list this morning. authorities in china are easing some covid measures, this news coming out on singles day which is a huge day for the country's retailers. eunice yoon joins us live from china with this. my first question is -- you're inside you're not standing in the rain anymore. what happened? >> that's right. that's right well, some of those covid curbs that changed here in beijing i'm not now in a live-streaming studio, despite all of the curbs, people are still celebrating singles day. and -- the whole point of some of the covid -- or well, no, i'm getting a little bit mixed up here with the covid curbs, they've

also been depressing a lot of the work, but the chinese government has been a scaling back, some of the worst ones today we had some interesting announcements where the chinese government had laid out more of its 20-point plan to try to ease up on some of these quarantine as well as other measures. so they're going to shorten quarantine for some by two days, they're ending the isolation for some close contacts, close contacts in other words, curbing some of the more excessive measures and they're redefining risks to high and low only which is to try to make sure people are put into future lockdown the covid policies have impacted consumer behavior. in fact, that was highlighted by some of the recent surveys that we had bane put out a survey saying that chinese spending for this year's singles day, about 34% of the people said they're spending

less from the year before, only 24% said that they're going to be spending more from 2021, and jd also had put out a survey saying that a chinese considerations for this year's singles day is a size of the discount, practical use, and the delivery delays due to the covid curbs. and the transport ministry said that so far, the number of parcels from last year have dropped by 2.2%. so this is for singles day doesn't really bode well in this overall economy because of the way the covid curbs have been impacting the economy. one trend that we are seeing here still, becky is the livestreaming, so because of the government crackdown, some of the most popular celebrities haven't been able to do the kind of work that they've been able to do in the past. it is still going on where

people are trying to get more chinese to buy products by going online and telling them about all these great products that you could still buy. >> some of those restrictions just kind of illustrate to me, at least, how tough it is there, how many restrictions you guys actually had that i didn't even realize. do you think that the loosening is coming about because they think there's less risk associated with covid at this point? that the population is better prepared that there have been more vaccine that is have gone out, or is it, we got to do something because people are sick of this and it's hurting our economy >> it's probably a little bit of all of that. i mean, i think that there is a tremendous amount of pressure on the government as well as the economy here again, the -- they want to attract more for investment and maybe cutting the quarantines from their perspective would be one way to make it more palpable, to get more people to

come here. and then in terms of the covid curbs, there have been a lot -- there's been a lot of anger over a lot of the measures where people think it's too excessive. the idea that they would no longer round up the close contacts of the close contacts from a -- rest of the world context, that sounds a little bit extreme to do something like that in a chinese context, it makes sense because they feel like you have to break up the chain at least it looks like as though they're trying to respond to some -- to the public and people who just feel like the measures have gone too far. >> thank you. when we come back, the collapse of sam bankman-fried's empires a investors try to figure out how it went wrong we're going to talk to a man who spent a few days with sam

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welcome back to "squawk box. i spoke with coinbase's ceo brian armstrong yesterday in his first interview into the ftx, binance deal collapsed and he talked to sam bankman-fried and shared what that conversation was about. >> when he reached out, he was in the mode of trying to raise financing, emergency financing and so we briefly discussed that but, you know, it quickly became apparent to me that this wasn't the type of asset that we would want to invest in if it was actually that far underwater if there had actually been either fraud or just, you know, misrepresentation to either customers or investors, you know, at that point, my view was that the firm didn't have value for us to participate in anything, even if we could >> and yesterday, sam bankman-fried tweeting i'm sorry and -- we're not going to use

the f-word, but i effed up and should have done better. joining us right now is that i know scaramucci, cnbc contributor and somebody who sold part of his business to sam bankman-fried. anthony, it's great to see you sir. >> i would say it's good to be here, but it's a concerning day, andrew and there's a lot of the stress in the markets. >> let's talk about it you spent some time with sam recently, what happened? >> listen, i spent a lot of time with him, we traveled to the middle east. this was before these revelations were exposed

we were embarking in helping him fund raise he purchased 30% of my business. we were trying to help him around the world when the crisis hit over the weekend, i made a decision to fly down to the bahamas on tuesday in the spirit of helping. and so you caught what brian was saying, the original idea was, this is a rescue finance situation and could we somehow help which would help the entire industry and then when i got to the bahamas, it became clear, at least from some of the people that worked on the legal team and the compliance team that perhaps there was more going on than it being a rescue situation. so when i left the bahamas in the afternoon, i was actually distressed i don't want to call it fraud at this moment because that's a legal term and none of know and we have to leave it up to the regulators and we have to give people a presumption of innocence, but i'm distressed about it

i don't like it for the industry and i would implore sam and his family, he has two wonderful parents, joe bankman and barbara fried. i would implore them to tell the truth to their investor, get to the bottom of it stop 22 tweets, but get themselves in front of a regulator and explain exactly what happened and if there was fraud, let's clean it up to the extent possible and repair the accounts at ftx. for myself, i'll be working on buying back my equity and restoring that the good news for skybridge investors. we had no assets on custody there, so we were saved that way. but the bad news is, and i'll say this candidly to everybody i liked and like and trusted sam and that violation of trust didn't go to me, but 20-plus

venture capitalists, people around the world that trusted the technology and if there's something seriously wrong there, i would recommend to the family members and sam himself get to a regulator and disclose everything and that's your moral imperative if you're a believer in effective altruism, you've done people to this industry and the people in this industry and the account holder who trusted you enough is enough don't let a charade go on. speak candidly directly and honestly so we can clean this up immediately. >> if you could, speak to the -- to the state of mind of sam when you saw him. what were the conversations you had with him and his team and it's probably worth noting that much of that compliance and legal team appears to have resigned over what's taken

place. >> well, sam was certainly contrite he had a group of people on his team that i would break up into two different categories, a group that was in his inner circle that may have known every single inner working and another group of people who were perhaps outside the inner circle that had a level of shock on their faces in terms of what they saw. and then, of course, you're right, some of the legal people that i had met with resigned the extent day, that wednesday i was there on tuesday, andrew >> but when you spoke with sam, did you say what happened? did he explain what was happening? >> i did he was under a lot of stress and so i -- again, i showed up in a rescue finance situation and then it became clear that there were problems. he did address the firm over firm-wide zoom i had the opportunity to hear that, where he was contrite and he was trying to explain that they were going to fix whatever the problems were that they did and whatever the miscalculations

that they had, et cetera, he was spending a lot of time with the legal teams. i certainly didn't want to be there to bother anybody. i was there to help. but you could see there was a dissembling going on among the staff that was causes a lot of stress. >> did you confront him? did you say -- >> not my personality to do that particularly when people are in a situation like that. i did not confront him again, i was there to come to help him but it became clear that there was really not much i could do and so i booked a flight back home that afternoon. >> and in terms of just your own business at this point and investors that have money there and their ability to get out, has this impacted liquidity at all? >> well, we -- nothing has changed. our business is up and running we've obviously have to mark our positions down in the

cryptocurrency markets but nothing has changed at skybridge. i think what you're referring to, we have a small piece of business, we have talked about this on the air, several months back that, we basically suspended the redemptions on about a $200 million fund. we thought that was the best idea to protect investor assets and to protect continuity of those assets because some of those assets, andrew, are in private equity and some of those assets are liquid. we have to figure out, once we could unlock that liquid portion, we'll release a suspension there but that's the only piece of our business and that was way before we did this transaction with sam bankman-fried and that was really i think a by-product of the current bear market. you wrote a book about this in 2008 you know sometimes when you're spending customer situation in a hedge fund like ours, it works advantageously to the customers and we're working our way through that as well but that was really not related

to this. and i think the good news is, sam was an investor in our business and a minority investor, our business was running fully operationally with the same compliance protocol and is the same operational values unrelated to ftx and skybridge is an 18-year-old company that is a registered investment adviser we have a broker dealer which is regulated by finra there's a lot of bells and whistles on skybridge. and you and i know each other for a very long period of time i take the compliance aspect of this business and the integrity aspect of this business very, very seriously. >> anthony, the gating situations, nobody likes getting gated. that's what caused a lot of concern. i was under the impression that when sam bankman-fried came in, that was really shoring you up he was coming in to rescue you in some way. it was putting more money into it but i thought part of that agreement was that you had to take $40 million of that and put that into crypto

are you in a less liquid position now than you were before that investment >> no, no. there was no need for a rescue situation. we're an asset management firm we have very light capital equipment. we did make an adjustment to staff and a reduction in salary and that's what capital management firms do when they go through the up-and-down cycles of the market. there's no need to rescue skybridge. the reason why we did that transaction with sam is that we were trying to grow the firm and reposition the firm. despite the current debacle and this being what i think is the worst week in cryptocurrency's history, we're a believer long term in the technology our colleague jim cramer brought up a great reference, you always get this type of behavior when you have this massive evolution in technology. it's an you aren't thing, but you can go back to the robert barrens and the railroads, including the dot com crisis in

march. there was no need to rescue sky best of my knowledge that money went onto our balance sheet. we made a decision with him. it was part of the term sheet that we would buy some cryptocurrencies and put it on our balance sheet. we did not need the capital for daily operations or things like that but i was basically trying to send a message to people, the firm is well capitalized, which it still is, with or without the ftx investment and the second message, we made a big commitment to this industry because this is a better technology for transacting over time, i believe throughout economic history when products are better, they eventually get adopted. there were people that had horse and carriages and said the horseless carriage is not going to work and they got it wrong. >> are you in a better or worse position just in terms of the marks you've had to take or anything else. if you took that investment and

put it into crypto, crypto has had pretty difficult days since then. >> we're in a worse position because we had sam join the table at skybridge he's hurt the industry we're working right now. my team, my legal team and other partners are working to buy back that stake, take him off of our cap table and then to effectively -- to the extent possible, just unwind the transaction. but we're in a worse position because the market is down and we have to mark our securities down, of course. but sam is not affecting the daily operations of skybridge. just a minority investor in the firm. >> do you feel duped are there things that you think you should have seen and what do you actually think happened? >> well, again, do i feel duped? yeah, i'm disappointed is the way i would describe it. i think the -- you know, duped,

i guess is the right word. but i am disappointed. i do like sam, okay, and i don't understand the motivation for exactly everything that's going on what was the second part of that question, andrew >> it was really, what do you think happened do you think this really was a comingling of funds? what do you think about that >> i can only -- >> how do you think that that started? i think some people say, is this bernie madoff? is this a ponzi scheme what -- what do you compare this too? >> i said this ten years ago, john was an honest guy and everybody got back a dollar for a dollar once everything was accounted for. i don't know what happened because i was not an insider at ftx. i can surmise -- it's difficult to answer hypotheticals and i don't want to be accusatory because of the way the legal system works let me provide a hypothetical

answer if there was a comingling of funds, we think and our friends in the industry that made direct investments in sam's company as venture capitalists, it may have started in the april, may, june time frame the venture capitalists that did due diligence on the firm, us doing due diligence on the firm, you couldn't see that type of activity when three arrows it could be possible, andrew, that sam had difficulty then, and then he made some decisions that turned out to be disastrous for him and for both sides of his business. >> disastrous or illegal >> do you think that this -- i mean, there's been some speculation around three arrows and whether that was something that would have happened this summer or whether it goes back even farther we were talking to brian armstrong yesterday, he said, i'm a competing business i know my numbers, i know his numbers and for a long time i thought this is weird. where are they getting all this

number from? and this money was not just being spent in the last call it four or five months. it started almost a year ago, if not longer what red flags do you think that you missed -- by the way, not just you you would have argued is sequoi, you could go down the list. >> i watched that interview with brian carefully and i -- i think when you're talking about duping, i think people were under the impression and i think there was a belief that there was more capital there as a result of the success that the firm had at alameda. that portion of the business if you're asking me about mistakes that were made, the vcs and others should have said to same, listen, you got to shut down alameda people bought into the argument that alameda was a client of ftx and there was a separate chinese wall because wall street and good at dealing with conflicts

like that. that was obviously a mistake but, yes, i think -- >> what about things like no cfo, no board of directors >> i mentioned that to you i don't understand the no cfo thing. that was also explained by his internal team of young people, just not ascribing the right titles to each other and i think people gave him too much of a break on that. you have to have tighter controls we can go back now and go through everything that was done wrong and what people missed in due diligence and we can put this up there if in the pantheon of different things that happened but i think the due diligence process, again, it sort of ending in february, it feels like a lot happened after the beginning of this bear market and, again, i'm time-stamping

that april or may. but this is just a surmise because i don't know it definitively. >> how much of the $40 million that he gave you to put into crypto as an investment, did any of it go into the of it go into the token. >> some of it. >> moihow much >> i signed a nda i want to stay committed to it. >> is it material to your -- >> not material because we have a profitable business this was a strategic idea for all of us to try to grow cryptoeco system, so not material where it hurts skybridge but enough we have a loss in that token. >> anthony, appreciate you joining us this morning. coming up, will consumers continue to shop or e arthey about to drop? heading into the holiday season

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welcome back to "squawk box" ahead of holiday season consumers continue to spend new data from the bank of america institute showed that discretionary spend rose from a year ago, down from 3.2% in september. definitely not necessarily keeping pace with inflation.

we've been talking to you guys about the data that you see because it's broad, roughly half all of the consumers in the america where you can see through some of this card data so it's very good indicator of what's happening what are you seeing at this point? >> i mean, we still feel pretty good, slow down in household data down from 4.4 glooimplgtsd cost spending was up in and around there this slowdown from

steady growth rates earlier this year and the lesser half of last, things still seem okay >> is the pace even keeping up with inflation, though, is this a case people have to spend more because the stuff they were buying before is more expensive? >> half of the challenge here, i mean, the 3.1% is less than, you know, even the good cpi that came out yesterday, so i think, you know, at the level, households remain pressured and when we look at the broader data we discussed in previous months, we've seen large increases, i think, you know, the factors that we've discussed before it's still there, i think by and large, you know, the positions

for the consumer are slowing as you'd expect of course if the consumer doesn't slow then the fed isn't going to be able to take its foot off the accelerator >> what are people spending more on >> well, discretionary in particular against lower income households we've seen quite a slowdown there, this time last year the lower income group was about making two-thirds of the growth in discretionary and right now that's down to around a fifth, so there's definitely a slowdown there, when we look at the holiday -- that we calculate, particular goods that people usually buy in the run-up thanksgiving and christmas, that looks pretty solid to us but last year was quite a robust

comparison >> david, thank you. we'll continue to track this with you and see what happens. we appreciate your time today. >> thank you >> thank you. when we come back, new jersey governor phil murphy on this week's midterm elections and the state of the nation's economy, stay tuned.

good morning p the rally's apparently not done, futures pointing to more gains on the back of encouraging inflation data solid results in china as finally easing some of its covid restrictions new developments in the complex of the crypto exchange ftx. quickly raise billions of dollars, we'll bring you the very latest. final hour of "squawk box" begins right now.

good morning and welcome to "squawk box" here on cnbc. live from nasdaq marketsite in times square are we in a new world? stock market's up, got a sub 4% ten-year, how long does that stay there coming off the best day for the averages since the spring of 2020 after cooler than expected consumer price index the bond market is closed today so we won't know the intention of yields this morning but the intention yesterday was pretty clear and there was a big rally really across the board, down to 3.81 on the ten-year this morning. as i say, is it headed to 3 or 5? >> china relaxing some of its strict covid-19 rules, people

coming into the country like foreign executives will have to quarantine for five days instead of seven, also even though people testing positive and close contacts will still be put in government isolations close contacts of those close contacts won't be. risk categories will now be high and low eliminating the that medium category. maybe limiting the number of people that have to go lockdown. the hang seng up 7.7%. if you've been looking at the casinos some of those >> meantime twitter's new pay for verification rolling out on wednesday and i think you can

put it politely it doesn't seem to be going particularly well. eli lilly had to apologize with a blue check mark sent this tweet, we're excited to announce insulin is free now, used the company's logo the real eli lilly sent this message, quote, we apologize to those who have been served a misleading message from a fake lilly account. now, the fake account has since removed the company logo from its profile and relabeled itself as a parody account just one of a number of these kind of situations that we have seen over the past couple of days elon musk gathering twitter employees yesterday with about 20-minute notice to address them

directly for the first time. covered a wide range of topics he said bankruptcy for twitter is not out of the question he said he thinks we're heading into a recession and recession advertising is disproportionately affected. he said remote work will still be an option but an exceptional basis for exceptional people and a back and forth exchange with an employee he said, if you can show up in an office and you do not show up in an office resignation accepted, end of story, twitter lost more top security officials including its chief information security off officer. so lots going on in twitterland and i think some big questions as to where all this is heading.

idea that it's going to fall into bankruptcy, the big question is come april, the debt payments that need to get made, by the way, even operationally he may have to keep paying not only if they're losing $4 million a day, the question is, does he try to do what describe a cramdown round, put more money in it, he would be telling his pals larry ellison and mark running a fiduciary they're going to lose money, does he decide at some point am i going to buy him out >> ask for money from them. >> that's the point, either -- no, when i say that you'd ask for more money from them at default it would be at lower valuation, the other option is,

these guys are my pals i'm going buy them out, but buying them out would be expensive plus the amount of money -- >> at some point friendship ends >> well the question is, does your friendship end with all of those players, the people who supported him over the years i don't know i don't know i don't know what happens next >> the worst case scenario is still not as bad as the worst positions in terms -- he can do whatever he wants. >> with his own bank account, sure, are we in a worst position >> he's got so much money that the worst case scenario it's not going to talk about what could happen >> the question is, do you actually send the company into bankruptcy then by the way come out of it

with control on the other side that's interesting >> right. >> do the banks try to play against him? they have an incentive to be in business with him because of the other businesses tesla and spacex it's a heck of a chessboard. >> let's get to the broader market coming off stocks' best day. the s&p right up on the 4,000 mark again, mike, do you adhere to the notion that really sharp rallies a lot of times are what happen in bear markets ongoing bear markets, really sharp breaks, bull market shake out the weak hands is that this is >> history says that's the case, the very largest one-day gains tend to cluster in those areas e either ongoing bear markets or really coming off a crash a lot

of those days were after the '87 crash that didn't involve going to lower lows after that that's been the pattern, it's very difficult to kind of map everything about this reaction although the direction of movement very logical. a peak in cpi leads to dollar down, stocks up. now the magnitude is a little bit extreme because we came into it i think people very wound up and tense about the possibility of a hot inflation number. the all that stuff together did exacerbate the move. late april through now the range has been 4300 on the upside, 3900 -- beyond the midpoint there, the next thing folks are

looking at technical upside targets is close to 4100 where this downtrend line is so it makes sense here that you can capture some of that seasonal strength and burn off the negative sentiment when you have that relief on the yield side the bond market is closed today. the 5-year yield, the shorter end and the treasury curve, you see this -- i mean, it's still an uptrend it could be topping right here, this by the way, intraday got above 4.5 in early october and now you're down here below 4%, again, you're taking potential fed rate hikes out of the market you huge moves in some of the biggest tech names tesla versus amazon, tesla up

7-plus percent amazon up 11 or 12 look at it one-year basis, amazon and tesla it's been pretty much tick for tick, they were making lower lows so in this type of scenario that kind of a huge pop in a bear trend still makes a -- >> that's still amazing amazon and tesla. >> it's kind of remarkable. >> you wouldn't, if you had your pick you'd rather have the s&p getting through some resistance than the dow, you always want something broader or the industrials are doing better in this environment and that could

still be a positive that pa maybe, maybe the s&p follows the dow or would you rather have broader markets in better technical shape? >> to make a real pronouncement about what's going on with the trend you'd want the broader index to be participating a little bit more it's interesting the dow in tough markets is when it actually outperforms if you go back five years it's not even close to performing in line with the s&p and nasdaq industrials themselves, the sector has really shown some upside leadership in the last few months. >> all right, very good. lot to digest there appreciate it, mike thanks. now to the crypto and what's been happening there amid the meltdown at ftx. kate, good morning we're starting to see more

collateral damage from the high-profile blowup of ftx, the latest overnight, the bank had agreed to bail out earlier this year saying it was shocked by the ftx news and found out about it on twitter like the rest of us, pausing withdrawals and not able to operate its business as usual. reminder a handful of these crypto firms that the ceo of ftx agreed to buy. some of those deals hadn't officially closed, lot of these startups are at risk here. on the hunt for his own bailout, we saw what was happening earlier this year the crypto company has been gaining international withdrawals and transferring some of those to a sister firm.

ftx saying in a tweet it had to allow some of those redemptions to comply with bahamian law. those i'm talking to allowing withdrawals in certain jurisdictions is going to make this pretty murky. i'm told right now is a likely outcome, has at least $8 billion hole, the ftx fallout has really rattled investors. you saw what happened with bitcoin. back to you guys >> okay, thanks. obviously watching to see what happens. bitcoin picked up pretty rapidly yesterday as a lot of asset classes moved in dramatic fashion after the cpi number

>> absolutely, so cpi had a big effect but it has rattled investors and you see some of the collateral damage, some call it the house of cards, we saw it in the lending market. it did have a chilling effect and you saw some of the more classic wall street analysts not just pure crypto analysts raise more cash in this market and the other shoe hasn't dropped yet. the private investments and the private side of this in silicon valley those rever bases are probably months away this really puts some egg on the face on a lot of the best known investors in silicon valley. >> thanks, kate. coming up, democratic new jersey governor phil murphy is

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welcome back to "squawk box" our next guest has unique insight into the state of the economy, new jersey governor phil murphy joins us this morning. governor murphy thank you for being here this morning. the to see what the tax receipts are showing you on a regular basis, how is the consumer right now, how are businesses doing right now in your state? >> good to be with you and god bless our veterans kind of a crazy economy right now, a tale of two cities in many respects on the one hand our revenues have stayed strong softened a little bit of late particularly the sales tax revenues tells you that people are still consuming at a pretty

solid clip have stayed strong, we've upgraded several times this year. the challenging side you got a lot of pain at the kitchen table, a loft affordability challenges that we all know, inflation obviously driving that and in some cases things that we could control so we've had a massive property tax relief program in place and other things that are beyond you like a war in europe and i worry what's around the corner, i'm encouraged by the seem ingly softening of the inflation it's very much a tale of two cities right now >> i wanted to talk to you about that, former senior director at goldman sachs.

volker was a friend. you understand inflation getting fixed into the economy the market's reacted with great relief yesterday that's still an incredibly high number, do you think this is something that the fed is going to have to continue to raise rates aggressively >> i mean, you've got folks who are much more qualified to answer than i am, becky, but i would think, and this brings me no joy because this is brutal at the kitchen table, but i think if anything the fed continues to overcorrect, i'm on the side of aggressive behavior because otherwise a lot of inflation is sentiment, it's not just the reality of the math it's the

sentiment and when folks wake up and realize, you know what, the fed and all other weapons that we have are as aggressive as they are it must be making an impact, therefore i believe when i look six or 12 months from now i'm more optimistic than i am today to feed that positive sentiment in the economy i think they've got the take some more steps, that's one guy's opinion, i don't say that with any glee because that means more pain for all of us. >> better position in terms of inflation, where do you think we'll be in terms of e employment you said you're worried about what's coming? >> i'm worried i don't think history gives us one example the fed has been this aggressive in the economy didn't cool sub subst substantiately whether that's recession, if it's recession, how deep a recession, there's a

lot of liquidity on the sideline, our balance sheet, we've got a massive surplus, we've got unspent american rescue plan money. dollars to be spent over five years, other moneys coming from the inflation reduction act or the chips act this summer i don't think our state is different from other states. households, all of that leads me to believe that the economy is going to cool but i personally don't see this thing tanking in a very substantial way. >> governor your party did better than anticipated in the midterm elections there wasn't a red wave but some issues that are incredibly concerning, including crime, too, i was reading so far this year 14,000 cars that were stolen that's up 14% from this point last year and up 36% from this point two

years ago, what's happening in. >> new jersey's numbers unfortunately you could put america instead of new jersey there's a little bit of good news, becky, the most recent months because of steps we've taken the year over year is actually down substantially thank god. we announced a bunch of steps earlier this week, no question it's an epidemic and no question we've got the right weapons in place to continue a reduction that we've seen over the past couple of months, a better news story is violent crime, shootings, homicides are all down meaningful year over year, 30% reduction between '22 and '21 they're north of zero. you

we think we've got the right playbook but time will tell. >> what's the right playbook, this is national issue it's been crazy to send to us. >> a combination of a lot of things, we invested aggressively, license plate, automatic license plate, reader technology, that's one important step we've loosened the ability for our police to give chase, we've extended meaningfully and deepened a task force, we're going to invest in a trail period from the time you're arrested and then go to trial. monitoring your whereabouts as well as giving you some services like mental health, housing whatever it might be, it's not one magic wand it's increasing

the penalties for folks who are persistent offenders and we're beginning to see more progress >> governor murphy, thank you for your time. we always appreciate seeing you. >> good to be with you thank you. coming up, peak inflation, have we reached it we'll talk about that. people h-- reminder get the best of squawk box on o pcaurodst listen any time. er money manage) different how? aren't we all just looking for the hottest stocks? (fisher investments) nope. we use diversified strategies to position our client's portfolios for their long-term goals. (other money manager) but you still sell investments that generate high commissions for you, right? (fisher investments) no, we don't sell commission products. we're a fiduciary, obligated to act in our client's best interest. (other money manager) so when do you make more money, only when your clients make more money? (fisher investments) yep. we do better when our clients do better.

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can you believe someone thought this would help you hear better? and no one will notice it? genius. now this is eargo. made to be heard. not seen. welcome back to squawk box, shares of coinbase rebounding yesterday we'll show you where those shares are right now and a bit of our interview with brian armstrong because we spoke to him just yesterday and talked to

him about what's been happening at ftx and what it means for the rest of the industry, we should also mentioned that coinbase announced more layoffs yesterday and the in that interview i asked brian about that move. >> in this environment i think it's very important for companies to manage costs and as a public company our investors look at those things very closely, we did announce some small eliminations about 60 folks, look there are certain areas of our business for instance we're not going to be hiring a huge amount of people in 2023. for instance we hired a lot of people to work through a large backlog of institutions, but through automation and working through that backlog we don't need quite a large team. we'll be very prudent in this kind of environment to make sure

that we are managing even cash flow cautiously, we have a strong balance sheet, we want to make sure that we can use the cash for opportunities in these down markets >> brian speaking some truth about what's happening around the entire tech space and when you think about if you're not going to be hiring you need less recruiters, lot of these firms had massive recruiting arms growing at fast speeds those people you don't need them it's sad because those are real jobs but that's where we are. >> let's switch gears to the biggest movie of the year, getting people into cinemas, julia joins us with more on that front, julia, good morning >> good morning to you, becky. black panther wakanda forever is a key test of a big disney franchise, year to date the box

office is down 35% from the same period in 2019 that's in part due to fewer newi er movies. imax shares down by about a third. that's why the sequel is under so much pressure to perform but also its budget was reported at $250 million, and it doesn't have a release date yet in china which is a key market for the box office and this sequel to black panther may not get a release date in china, analysts are predicting a domestic opening weekend up to $200 million the first black panther film grossed, now disney shares they're down about 48% over the past year in part on the recent wider than expected losses in their streaming unit

ceo repliereplied. barclays writing, quote, while black panther and avatar should help theatrical revenues next quarter and in fiscal q2 these releases will drive a significant increase in costs, now one risk for this particular black panther sequel it's 2 hours and 41 minutes that means fewer screenings of it in the theaters per day. >> a great movie but if it's 2 hours and 41 minutes you can't rotate butts through the chairs as quickly >> yeah, i mean, that's one of those logistical limitations

they'll feel like they got their money's worth. the film has gotten good reviews. critics seem to like it. >> julia, thank you very much. when we come back, inflation actually cooling in america, that's not something that we've been able to say very often lately we'll talk about what that means for investors, the fed, the markets, and as we head to a break, check out shares of intel getting a double downgrade from jpmorgan he said intel will participate in an overall industry rebound but at a slower pace because of competitive pressures, that company off by 8.9% stay tuned, you're watching "squawk box" and this is cnbc. s. i promise our relationship will be one of trust and transparency. as a fiduciary, i promise to put your interests first, always. charles schwab is proud to support the independent

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welcome back to "squawk box" on cnbc. some crypto, quick check on prices this morning, bitcoin was lower than that at within point with the saga of the week and everything else that's happening, the breakdown on the deal >> was it a deal a letter of intent they looked at it. >> you're on your own. we'll talk in a second about inflation. first, we want to talk about this. >> on this veterans day a closer look at employment opportunities

for former service members tech companies have been prioritizing the hiring of veterans even as the market cools. >> companies remain committed to hiring veterans a group known for their higher rates of engagement and diversity, over 200,000 men and women who transition out of the military every year, 80% without a job luckily that doesn't last that long given the quality of the candidate pool >> only 23% of americans can even qualify to enlist in our armed forces, indicating veterans is a good business decision >> rodriguez said they're not only getting hired faster they're staying longer and getting promote td quicker than most the jobless rate for vets continues below the average. you got amazon, disney, boeing,

comcast, some of the top names fighting to woo this group of workers especially within tech and this according to vets in tech, amazon promising to hire 100,000 veterans and comcast promising to hire 21,000 and the new chips act creating a big opportunity, a big hiring opportunity for veterans within the semiconductor space with names like intel, micron that all committed to hiring thousands of veterans over the next few years, the competition to hire veterans is so intense right now that many of these companies are partnering with the government and they're getting job offerings before even being discharged from the military. >> you mentioned diversity, how can hiring veterans -- >> the initiatives growing in

popularity amongst organizations, so with the military it's one of the most diverse organizations in the united states and just in terms of statistics 43% represent minorities, women are 17%, black are 16%. that's an opportunity especially given how difficult it is to get into the military you're already dealing with a stronger candidate, stronger pool of candidates and for those who are listening in terms top, project manager within aviation, software engineer. all make an average 125,000 to $128,000 a year. the recent cooler cpi number, that inflation may have peaked let's talk about it with linsey

and our own steve leishman i want to start with the idea, i don't know the best way to represent inflation, let's look at a pie chart on what caused it and percentages because i don't know how the fed can decide it's going to cure this if it doesn't really know the root cause of things, victoria, i guess i'd have energy prices, fiscal spending, the reopening of the pandemic and labor-related issues with participation rates and i'd guess i'd have the putin price hike in there as well how many are those are directly addressable by raising interest rates, what's at play here for how long lasting the underpinnings of inflation are. >> joe, we know that raising rates is all they can do to

affect demand. consumer spending continuing to do well, energy part of that headline number i think we'll continue to see demand go higher, we have sanctions that are going on to oil and gas out of russia. china beginning to open up, lot of demand out there so when you look at these different components maybe you can say headline or headline cpi has peaked but i don't think you can say individual components have peaked, good prices have come down, services are steady, food away from home that was up 0.9% month over month that's proxy for wage growth, let's go to labor market -- lot of different elements that we can say yes it was a good number but i don't think it changes the fed's path

at this point in time. 50 basis points in december, 25 basis points hikes at the beginning of the year. >> what do you think caused it and it's overstated that the arsonist is now trying to put out the fire, was the fed partly responsible for really bringing the highest inflation in 40 years, it takes a while to do that but it was external factors? >> well, a combination of both what we did see is the supplyside components of the inflation equation certainly ignite this international policies still at this point are leading to supply chain disruptions and limitations in terms of access to parts and materials, but we also saw the demandside as a result of monetary and fiscal policy fueling the market with trillions upon trillions of dollars. this is the problem fed is facing if they raise rates, tamp down

demand and investments leading to slower growth and more benign inflation but raising the felt ral funds rate doesn't address the supply chain equation. it can't force resolution in terms of russia and ukraine so this is going to inflationary pressures arguably much more elevated for a longer period of time even as the fed continues to raise rates now yesterday's report certainly was a step in the right direction suggesting that peak prices may be behind us, but an another way with fed applauding initiative policies with 375 basis points of tightening already under their belt and inflation still near a four-decade high this simply reinforces the notion that

there's more work that needs to be done. just on the demand side of the equation. >> the conundrum, the fed giveth and the five taketh away, it can't control the other things that happened that was beyond their control, we can't blame russia, we can't blame covid and china, they also can't fix that with their tools either. >> no, but, first of all, i think that's a really important point, right, the fed almost certainly stayed too long and maybe did too much but once that happened there were some other factors that went along and i think the biggest mistake by the fed and ought to inform policy in future adjust it to the fiscal regime. both trump and the biden administration did at he of fiscal stimulus, the fed didn't

seem to plan to react to it. you paused the inflation being mechanical if the policy goes away the inflation goes away not quite the process the fed sees think about when you give something a push in vacuum it keeps going for a long time and the big concern at the fed here is that inflation takes on a momentum that is indeed divorced from the fundamentals that caused it and that's the reason why you have so much the hawks on fed who say, hey, we got to do more here, get in front of this thing so that momentum doesn't go on even some of these things cure themselves if the russia/ukraine war ended tomorrow that would be wonderful but i'm not sure all of that is enough to get rid of the

inflation that's sent into the economy. >> yeah, i immediately saw that 2001 the astronaut -- he's still going like that, you know that he's doing that. i don't know when that movie was, the guy's still end over end because there's no slowing it down. >> what are the chances victoria that this is peak inflation in. >> well, i think, the peak inflation overall i think maybe we can say, peak inflation in all the different components probably not rents are starting to come down a little bit maybe those start to stabilize a little bit, i think energy goes higher, food goes higher, look at the diesel shortage right now, that's needed forry culture. wages will be a steady component.

supply chains have alleviated somewhat maybe not allow inflation to fall quite as far as people are thinking, what is the fed comfortable with on inflation? if they say we're good at 4.5%, 5% maybe they stop sooner. i think their target for terminal rate has changed. >> why was it such a shock to everyone the labor market following the pandemic, no one had foreseen this? >> certainly not the fed held on to that transitory language for quite some time suggesting that this was a temporary phenomenon that they underestimated the length of some of the international policies

continuing to fuel the supplyside pressures and they also underestimated the earlier fiscal policy measures leading to nearly higher levels of inflation to anywhere else in the developed world getting back to the idea of peak inflationi don't think that's the real question the question is, are we going to remain at these elevated levels? and the answer is, likely for some time. keeping pressure on the fed. we have heard from several officials the risk not the fed does too much or the risk is the fed does too little with inflation at these levels. reinstating price stability which is the bed rook of the economy and more importantly to steve's point the fed has to convince the market they're going to remain committed to that to keep inflation expectations under control so we don't see that self-fulfilling

prophecy of higher inflation leading to higher prices, so the fed is walking a delicate line right now. the fed needs to remain 100% focused on reining in too high inflation. >> given these labor issues maybe that's -- a little bit higher maybe not to new peaks but sustained at these levels they're not going like thanks do you remember what i was talking about, steve >> i do. hey joe, did we wish rob a happy birthday >> no. >> happy birthday, rob >> it's someone else's birthday -- >> today >> no, yesterday.

jim cramer's first take on the trading day ahead. listen to us live right now on the cnbc app stay tuned you're watching squawk live. [ cellphone vibrates ] you'll get proactive alerts for market events before they happen... and insights on every buy and sell decision. with zero-commission online u.s. stock and etf trades. for smarter trading decisions, get decision tech from fidelity.

all right, let's get down to the new york stock exchange. jim cramer joins us right now. we are still trying to get our arms around what happened yesterday with the cpi number, whether or not that's hugely significant, whether there's a the beginning of a trend or not, and what the reaction's going to be in the markets. i mean, we're looking at the futures up this morning. how do you feel about watching the futures up after seeing that big run yesterday >> well, i think it makes some sense. we saw the dollar up the most in seven years. we saw the two year go back under veterans day to close. we saw a lot of the companies that have been doing well whose stock had been going down anyway start rallying and i felt that it was the

beginning, because the parts of the cpi that had cooled will lead to other parts of the cpi that are cooling also will lead to layoffs, and that's what the fed needs. it needs layoffs, and it needs to see wages level off, and these were all forerunners of that, so i appreciate yesterday. i think it was very for real >> i was listening to you yesterday, and one of the points you made that really stuck with me was just the idea that if the dollar has peaked here, and you mentioned biggest decline for the dollar since 2009 yesterday, if the dollar has peaked here, that means some pretty good things for companies that were getting killed by the higher dollar >> yes, becky, i mean, it's really the first thing that's said on most of the conference calls, which is that x currency, and we don't buy it anymore because x currency, in this case, is often someone from europe got a better deal than you or komatsu did better than caterpillar, and i think these are very for-real things when you get the trifecta of the

dollar going down, interest rates going down and earnings going up because of the dollar, i like it. led by semis, which, again, is a beaten-down group. and i know there are people like carl icahn, who's bearish, but it's so easy to be rich and be a bear do you really have to stick your neck out and say, it's time to buy qualcomm, if you're rich no i take it for granted that rich people are going to say it shouldn't be in because you only need to get rich once, but people who are trying to get rich should know this is an interesting opportunity. maybe you can have some stocks come back a little don't be tempted by intel. intel's just not doing well. >> some people only need to get rich once if they're smart about how they play it others, we've seen lots of money disappear in the last couple weeks. >> well, those people leveraged, they bought, you know, we all know do we really have to go into the crypto nightmare >> no, no.

anyway -- >> the government regulated so well i mean, they came on, did great. sam bankman-fried indicted himself on twitter the maximum stupidity our country's faced while we've been working together >> pretty crazy drama this week. thank you. >> have a good weekend ♪ ♪ ♪ ♪

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welcome back to "squawk

box. binance chief cz warning of what he's calling a cascading crypto crisis, just spoke at a conference in indonesia, said the digital asset market faces a similar situation back to the 2008 financial crisis and is now cautioning more companies could fail in the coming weeks following ftx's collapse you're looking at bitcoin down at about $17,320 but a little bit higher from where we were. using very similar language to what jpmorgan had put out talking about a cascading of margin calls we are just about a half an hour away now until the opening bell on wall street, and joining us right now to talk more about the markets and what's happening here is brenda, the chief investment officer of sand hill global advisers, also a cnbc contributor. good morning to you. how much should we worry about contagion in the crypto market, dare i ask, to what we're seeing in the stock market? >> well, i think so far, we really haven't seen much and

there's been a lot going on in the crypto market this week. but i think, you know, to the extent that it causes more of a risk-off feel to the market, that could be considered some contagion, but i think more importantly, when we look at what's happening on the inflation side and what's happening with the federal reserve, i think that's ultimately what's going to impact the stock and bond market and not as much what's happening in crypto, although i will say that when we look at some of these unregulated parts of the market, that's what is of concern for us and certainly cryptocurrency falls into that realm when we look at where there is leverage that's not regulated, certainly in the currency market, i think we're seeing -- >> weigh in, if you could, on this inflation debate. we heard carl icahn quite bearish. he's been bearish for quite some time you heard what jim cramer had to say about that we've debated what we think the fed is or isn't going to do and whether this really is a pivot or at least the first moment of something where if you're going to try to bet what the world looks like 12 or 18 months from

now, that it's happening >> yeah, i think this is a sign that maybe that soft landing scenario is really more within reach than we all anticipated it might be certainly very encouraging to see a lot of those core measures start to come down or stabilize a little bit we'd certainly seen all kinds of ancillary measures of inflation coming down over the last few months but it was not showing up in the cpi number. still have a long way to go but if we look at what the cause of inflation is, it's coming from that shelter category. more than half the increase came from shelter we know that there's a flawed way that it's measured i think the fed is also aware of that so, i think if we start to see continuation of improvement, which we would need to see a better number in november as well, that the fed may back off a little bit and then potentially pause, but i don't expect the fed to talk about any of that until they're actually in the moment doing it, so i don't think we're going to hear a lot, other than more pockets

of commentary likely, given this is one data point. >> brenda, i want to thank you we're up against a hard break, and we're going to be handing off to our friends at "squawk on the street" in just a moment let's take a quick final check on the markets, a half an hour before they're set to open dow up about 160 points, nasdaq up, and the s&p 500 looking to open 20 points higher. what a week it's been, folks join us next week. "squawk on the street" begins right now. ♪ good friday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer and david faber at the new york stock exchange bulls look to tack on additional gains after the best day for equities in two and a half years. dollar weakness definitely helps now with its biggest two-day loss in over a decade, and bond markets are closed on this veterans day our road map begins with, quote, one month of data does not a victory make fed officials sounding off over yesterday's positive inflation print. >> plus,