the platform after a brief war of words it is monday, december 5th, 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. on this monday morning, you will see some red arrows when you look at the u.s. equities picture. dow futures off 140 points s&p down 18. nasdaq off 36. this is after a week where you did see the stock market move a little higher. dow has been down for three of four sessions. moving higher than last week

we saw the s&p move to the point where it was no longer in bear territory. treasury yields. the 10-year treasury is at 3.515% 2-year treasury at 4.313 let's talk about the china stocks they saw strong gains after major cities relaxed covid restrictions beijing and shenzhen announcing it would not require covid test results to travel or have to provide information to buy cold and cough medicine the 30 largest tech companies surged 9%. that is up 23% quarter to date still down 25% for the year. china casino stocks higher on that news. relaxed covid rules.

the travel stocks in hong kong rising and foxconn reported the plant in shenzhen, the largest iphone factory will resume 100% output >> you have to go with it. no one will know at home is 1,000 cities with 1 million people. >> to keep tabs of buying cold medicine >> keeping tabs. >> of who bought cold medicine >> we do that here >> we do that with behind the counter stuff. can you imagine buying dayquil

and they come to your house and lock you up and kill any house pets you have? >> you looked at me a couple of times. >> you cough, i think you should be tracked >> you will see. the whole thing -- think about it now so many things you have to look forward to how about friday >> the markets remarkable turn around after the jobs report >> down 400. the blue chips other averages were down i have a whole new theory. that is some people think the market is stupid or players are stupid for ignoring jay powell what if jay powell is not paying enough attention to markets to see maybe they're indicating we're closer to a pivot than he

would like to think? >> did you hear about larry summer >> i did >> larry summers has been right. >> i thinks he thinks we need to be higher. is 3% going to kill me >> 3% inflation? >> no. >> everyone would be happy if we got to 3%. >> what is the 2 thing since when is 2% perfect >> i ithink if you get to 3%, th fed would say that's enough. >> 3% is 50% higher than 2%. >> 3 looks better than 7 nothing is happening this morning. i'm surprised. that was in the cards.

opec countries agreeing to stick with the production cuts let's get to brian sullivan. if he doesn't go to vienna, he goes to brussels brian. >> reporter: joe, a lot going on and i thought your china discussion was really important because it layers into today let's get into everything that is happening no, we are not in vienna opec meeting virtually yesterday. a smaller part of the overall story. let's walk through what is happening with global energy as we are in brussels he hello, poland. they were joking about coal. calling it coal-land we know it is not the full number 900,000. they are not adding production all at a time when the european union sanctions on seaborne coming from a ship, russian oil, go into effect today

they will have exceptions for pipeline fuel going into germany. we don't know. i still will try to hammer that out here in the eu you somewhere the $60 brent crude price cap going into effect today which is the level russia is selling oil anyway it will not do a lot it is enough to keep oil flowing. what you talked about, all on the same day, today, witone day, china decided to reopen its economy and likely use more fuel i'm not math expert. 365 days in a year carry the 1. 0.275% chance that china announcing the reopening on the same day that the price cap and sanctions all go into effect and by the way, alexander novack was

just in china talking about energy who knows? russia, guys, vowing retaliation. russian ambassador to vienna, coming out over the weekend. you can read the tweet yourself. saying today the eu will get no more oil europe said we will not use more russian oil. russia says fine we're not giving you more russian oil. the only question now that needs to be answered is where does that 1 million to 1.5 million barrels come from? u.s. can't do it a couple hundred thousand barrels. kazakhstan norway we're in day one of the next leg of europe's energy woes. guys >> brian, i have a couple of questions. i keep reading about natural gas levels in italy and eu sounds like italy is at 90%

that is up from this time last year it sounds like a more dire prediction to be at 90%. if you have a long day and it is 4:00 a.m. and you can't charge your battery on your phone and you are starting at 90%. no great odds for what will happen >> reporter: no. becky, there is a weird narrative going around weird is my word where europe's energy crisis is over because natural gas storage levels were slightly higher than they were or were expected to be tomorrow, primarily, we focus on natural gas. i don't want to go down that road and steal that coverage becky, nobody you talk to says the problems are over. remember this, about 55% of the eu natural gas storage this year was done with russian gas. with the exception of the small pipeline p coming through the du

pipeline which is 5% of the total flow russia will have to do something it has never done. fill all of the gas storage for next year using almost no russian gas. here is a secret, becky, russia is still selling quantities of lng to europe. doesn't get a lot of attention now with the sanctions and cap, there is growing concern what will putin do? will putin stop selling lng as well if he does, that will add ood leg to the energy story and you can see the gloves it's cold. cold is bad. it drains that storage >> all right you got a place to go, brian have you found a place we have our place in vienna?

>> reporter: we have our place there is a place in there, joe, for you. a coffee shop at the eu commission we will drink four euro coffee it will be warm and about that tall i'm saving one for you >> sounds awesome. they do have good football which i realize watching our team play >> reporter: you mean american football >> no, i meant watching soccer the netherlands showed me what you can do if you are good you see the three goals? >> i did >> it's like surgical. we're like this. it's sad they say, hey, four years will come in no time. really i hope not. >> we did really well to get as far as we did. >> watching all three of the goals. did you watch them >> they set it up all the way from midfield. >> reporter: and i was the only

american in the bar with 100 dutch people then they were fine until they scored and turned and looked at me i bet the whole barry would hold up a dutch flag if they won and they won and i held up a dutch flag did i mention there were 100 of them and me. still good odds in my favor. you know. >> you would be too short to be a goalie you need an 8-foot goalie. >> there were a come of moments for the u.s. team. >> and any decent pass -- >> reporter: don't tell anybody, belgium did not advance. >> i'm proud of our team i really am. they got far farther than we made it in a long time sdp >> two goals last guy to touch it was the guy

from the netherlands thank you, brian sullivan. we'll talk to top white house soccer no top white house energy adviser amos hochstein in the next hour. and we have the squawk planner and get ready for the earnings and data points later, how the hotter than expected jobs report could impact the fed decision next week you are watching "squawk box" and this is cnbc >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com.

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time for the squawk planner. on the data front, we get international trade data for october tomorrow on thursday, weekly jobless claims and then on friday, ppi and consumer sentiment we have toll brothers reporting tomorrow and we hear from campbell's soup on wednesday and we have reporting from lululemon and broadcom >> do you know they have stores in malls >> yeah. >> i thought it was online mostly i did. i went to that place and i saw

something i liked. >> totally expensive. >> no way. >> it's good stuff good stuff >> i thought about what i would look like in it. i said, you know what? no no >> we have docusign on the way a programming note don't miss this. tomorrow morning, right here live on "squawk box"we will have the gang from washington, d.c. the head of the business roundtable honeywell and united and united pacific and raytheon and jamie dimon. if you want to get a touch point of what is happening in the real economy, this is the morning to get it with so many leaders in businesses >> and greg hayes. >> yeah. >> we need to say his name

>> say everybody by name. and let's talk markets with stephanie link from hightower. good morning i don't know if you heard us earlier about the friday about what happened on friday. is the market right? is jay powell right? who is listening to whom >> i thought friday's action was interesting as were you talking about it we rallied after being down a couple hundred points on the dow. it actually ended green. i thought rates going down was interesting as well. i think what it is telling us is maybe powell is wrong at this moment in time because if you look at the data from last week, it was pretty bad, andrew. housing we know has rolled over. jolts was weaker than expected challenger gray data and layoffs was worse than expected. the new tell

new orders are in contraction mode and have been out of the last five of six months. i think that the fed is not going to pivot any time soon i think maybe higher for longer, but not so many more aggressive hikes coming down the pipeline. >> go back to the other issue which is do you think if the market is not listening to powell, will powell start to listen to the market >> no. i don't think so look, at the end of the day, the number on friday, the real callout is the average hourly earnings if you look at september and october and revisions in those months and hot november number, you are 6% annual rate for wages. the core pce at 5% is higher than the 2% they are looking

for. i don't think they will look at the markets. they will look at the data and we have to see how in the next couple months what that looks like it will be higher for longer that's why rates will be higher for longer. >> anything new you love or hate w with equities? >> i'm excited about ge day. they are splitting into they sections i'm looking at lowe's. and the housing market was outstanding given what is going on with the housing market that is interesting to me. we get broadcom on thursday afternoon. we had marvell talking about disappointing data center details. that is big for broadcom i own it of course, we have costco. they had a disappointing call number last week let's talk retail and the

consumer it will be a busy week in addition to what you were talking about with ppi and durable goods. >> stephanie link. linking us with all the good news i appreciate it. nice to see you. >> have a good one. >> who else? that has been used 10,000 times. >> she's linked in. >> see that's a good one. she's linked in. >> combine when we come back, companies are bringing workers back into the office, but are they bringing back extravagant holiday parties? sharon epperson has that story next. and the latest from the collapse of ftx. we will talk to former s.e.c. chairman jay clayton "squawk box" will be right back. they'd huddle.... welcome to the peytonverse. such a visionary. game plan... you go. no, you go! and call audibles...

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parties the last two years, now the office party is poised for a comeback how are employers handling this amid inflation and layoffs sharon epperson has more with the findings from the report >> good morning, becky the office party has been a staple in 2010, 75% of companies had parties. covid concerns canceled most events and now year-end festivities are staging a comeback 42% will hold in-person holiday parties after one or more years of not having one. that is according to a report from jay and christmas business leaders need to be aware of the messages they send by scutting out the holiday party. >> it is challenging with the labor market you don't want to send a

negative signal. >> companies don't want to appear thoughtless after mass layoffs which the tech sector has seen many other industries seem to be in a matter mood from airlines and aerospace and carmakers and business and support and food and beverage sectors some firms are seriously decking the halls with catered events and alcohol. others are scaling back having smaller gatherings or foregoing the party and planning gatherings other times of year they are trying to figure out how do it differently, but do something. >> do uber >> if you are serving alcohol. >> right >> that's one thing that may be changing they are saying sometimes people don't want the drinking and dancing as much. they want to connect this is a time for remote workers to be brought back into being together and meet the people they see on zoom and meet

people from other departments. have an experience to get people to connect >> is pot legal everywhere you can't go to the office party and light one up >> yeah. >> with your boss right there? dude no. >> way to make a good impression. >> then you shouldn't drive. >> you don't want to look like you are having a great time and you lost friends or colleagues sdp >> we talked to hr consultants they said keep it small and make it team based. retain the workers you have and make them feel they are productive and motivated and celebrate what they have done right. it is not like you are doing a massive corporate wide event something to just let the people who are still working for you know that they are appreciated. >> tricky situation. >> it is. >> sharon, thank you.

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good morning welcome back to "squawk box. we're live from the nasdaq market site in times square. the markets had a pretty remarkable come back after friday's jobs reports was stronger than expected people thought that meant the fed would be higher for longer dow ended positive friday's jobs report showed strong wage growth to complicate the fight against inflation. for more on this, let's bring in deputy economic adviser jared

epps and then former chairman roger ferguson thank you for joining us i'll start on the left and go to the right. joe, what do you think no, i'll not interview myself. greg, i'll start with you. i can understand market players. they love to belong. it it has been a tough year since january. any good news and the market gets ahead of itself is the ten-year like that? what is it doing at 3.5% is thad ybe your job is nearly done or is it just likely to go back up to 4.25 >> the only way i can justify the 3.5 treasury yield, the market assumes the fed will do what is necessary to get inflation down to a little over 2% given the strong wage numbers in

november, it is the fed doing more with the shorte end of the curve to induce the market into recession. if that is true, it is hard to explain why the stock market is where it is. i look at the bond market and stock market and say one of them has to be wrong. >> all right what if there is a lot of different parts of the economy that aren't based on wages what if we get different parts of the economy cooler or at least commodity prices moderate and housing moderates. then the wage gains above inflation, we like it and productivity can increase and wage growth could be back to being a good thing instead of a bad thing, greg. am i too pollyanna >> the market will think

headline inflation 2% to 3% in the coming years if the look at the tips market. that is because you see the mechanical things in the index especially with the rent which is rolling over. over the long term, you cannot have inflation at 2% if wages are not consistent with 2% wages are 50% to 60% costs base of the economy where employers and employees set wages tells you where they think productivity and pricing power issing going to be 5% or 6% in the last three months and that is telling us that employees think they can justify wage increases with pricing power in the 4% range. joe, if we get a low print on inflation a year from now, it is not going to stay there unless the wage numbers start to come

down i think that's the way the fed t thinks about it. >> i wish the '70s or '80s never happened, roger. that got us in the mindset that it can happen again and maybe it is not as similar to that this time around as most people believe. the mistakes were so glaring back then and so long lasting and even people that weren't alive know about the fed's miscues in the '70s and '80s i hope it doesn't cause us to chase a phantom menace >> it is not a phantom menace. this is above the fed's desired target the inflation numbers have an impact on the welfare of the moderate and low income people

having said this, this inflation is different from the 1970s and 1 1980s. the fed has inflation expectation baked in at a higher number as greg said correctly, the wage numbers are running hot and we should observe job numbers coming down, they are two to three times the norm the fed clearly thinks it has work to do and said they are prepared to impose pain which i interpret to mean short and shallow recession, if that is necessary. >> the fed chair -- we have been begging more little more data dependency he seemed to acknowledge we don't know today the effects of all of the tightening and what

it will be six months from now that is one of the reasons it was taken as a dovish speech by the markets. you look at how long we stuck with transient on the way into this mess and i don't know why we should think the forecasting abilities somehow have gotten a lot better of how we get out of it go ahead you want to take it, greg? i'll get back to you, roger. >> okay. >> i don't think the fed is addicted to transient any longer powell has been clear. the market rallied after powell spoke last week is because he ratified what other fed officials said stepping down the pace of increase from 75 to 50 and

somewhere in that range in the meetings after that stepping down the pace of increases is not the same of stopping the increases the resting point is higher than 4.6% they indicated at the last meeting. it is difficult to understand why you would see the medium term this is a bullish message i take that message from powell and saying we will move gradually and still data dependent in the sense we don't feel we know our job is done until we see the inflation and wage numbers >> remember last time? he said it this way once and this way the other time. you remember the time before that, he said we probably will not go up as quickly, but the terminal rate is higher and the market got crushed down 1,000 points. he didn't say anything. differet this time, roger >> he didn't say anything

different this time. i think there are two things playing into the market psyc psychology one is the anxiety from jackson hole he came out stronger than colleagues he did not do that we saw a relief rally. for the first time, he talked about the two-sided risk i.e., acknowledging there are parts of the economy that are slowing quite a bit. i think that gave some people and markets some hope. as greg said, they missed the big point which is he is ratifying the fact they are stepping down a little bit maybe 50 basis points. maybe a couple of 25s. they are pre-3pared to go higher and hold it longer i think people heard it and focused on what he didn't say. he didn't take out the jackson hole hammer and they were focused on the two-sided risk compo

component. the bigger picture is the market is hot and labor is tight. the fed knows it has more to do. >> that's where wie are at this point. who knows? 2023, we have to stop saying next year in about three weeks we will be there then we're saying next year. the next year is an election year crazy. greg ip and roger ferguson thanks happy monday let's try to carry on. keep the chin up andrew >> chin up coming up, elon musk keeping his chin up. apparently winning back twitter's biggest advertiser oh, boy. we have to talk about this one right after the break. later, we talk to adl ceo jonathan greenblatt. you don't want to miss the discussion of the decision to he

is press a news story of the hunter biden laptop ahead of the election you can watch us live or any time on the cnbc app come on back for the big debate.

welcome back to "squawk box. look at u.s. equities at this hour after a wild ride on friday the dow opening down 120 points. nasdaq off 26 points s&p 500 off 15 points. we have to talk about the advertising now and talk twitter. apple and amazon now planning to resume advertising on twitter. this is according to the report. ma elon musk announcing during the conference on saturday which got over 1 million people listening at the same time apple resumed advertising. apple is the largest twitter advertiser twitter sent an email to ad

agencies offering incentives to increase spending on the site. okay i have a cynical take on this. last week, elon musk goes after apple. hard core after apple on the 30%. what happens tim cook calls him and he is at apple headquarters you remember we were talking about the picture. right? >> you think it was a trade off? >> now apple is all of a sudden largest advertiser and you will probably not hear a word for some period of time about his great frustration with the 30% problem at apple >> neither one. >> you tell me what happened shappened >> neither one wants their dirty laundry over the oair waves. the other thing i'm struck with,

re regrettably. i'm addicted just like everybody else it is harder to say i'm done than we say it is. i think legacy media is somsomewhat jealous or envious or worried that twitter sucks up so much of the oxygen there's a lot of things i displace with solely twitter i can ignore the crazy 8% that arthur brooks talks about. the haters and trolls and try to focus on the goodness i can find at times on twitter. >> it is really hard. >> and humanity. we will have jonathan on later he says we're here anti-semitism has been normalized i think the opposite revulsion of the meeting in

mar-a-lago and kanye i think it is more obvious that 99% of normal people are totally disgusted. >> find on social media. >> it is rejected and no way it is normalized. it is so far from normalized at this point >> i think at this point -- >> who has not spoken out? everybody has spoken out unacceptable >> i don't know about -- >> kanye >> he has to wear a spider-man outfit just to go outside. >> i don't know if there are smaller communities on twitter and they are having discussions and that is the part you -- it is a different -- there are various communities on twitter, as you know. i don't know -- >> sometimes it is for the good and you can find small communities. >> i don't know what is going on in that realm. >> let crazy people amplify.

>> remember when jonathan talked to elon and he said he was optimistic we will see what he will say today. i don't know >> i was glad that twitter and apple -- >> with great freedom comes great responsibility there will be things that slip through that you don't like. that is the way it is. aclu, that used to be their whole deal we will defend them. lawyers that defended the frickinging 9/11 guys. people with certain principles you need to stand up for even if they are unsavory. >> we will continue to talk about this as we mentioned with jonathan greenblatt. >> you set all-time records.

>> apparently. >> when we come back, we get a check on the supply chain. we will talk to the director of the port of los angeles after this reminder u, you can get the best of "squawk box" in the daily podcast. you can download us and listen anytime. we'll be right back.

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the threat of a possible rail strike revealed the fragility of supply chain i on the u.s. economy it's been impacted by a rise in energy prices and opec reducing production cargo has dropped between 20 and 25%. joining us right now is the port

of los angeles director. it's really good to see you. it's been awhile since we've spoken and things have changed pretty drastically. >> it's great to be back on the set. what we saw was an earlier than normal peak season june, july numbers were off the chart. and then the bottom dropped out. we saw a lot of cargo owners shift their goods over to the east and gulf coast to avoid what they thought would be labor disruption >> what's the situation? you're long shoremen have been working without a contract since july how are things going >> that's right. and that's pretty typical for these two groups, the employer's group and the dock workers it would land us in about february, march of next year where i see an agreement taking place. it won't get done this year. both sides are at the table and

the rank-and-file on the docks just keep moving cargo, productivity is good. >> what's going to happen. we just watched this with the railroad workers they had what we thought was a pretty good deal that had been seen by a presidential advisory board that many of the unions ratified but three or four of them did not and that created significant problems there were 24% pay increases what are the big sticking points and what kind of pay increases will we see? >> if you had to break it down, the real difference, there's no hard deadline with the dock workers on the west coast like there was on the rail side of the business. >> on the rail side, it been three years past their contract. >> and then you saw deadlines from the fall all the way through to these actions that congress took last week. on the dock workers side, big issues, like automation, robotics, pay, training and education, as well as health benefits

they had been stuck on an exurngs around jurisdiction of work but i think as we come out of this into the beginning of next year, you'll start to see it towards an agreement. at the same time this is not only a coast-wide agreement, but you have 29 ports that need their local agreements done to collective bargaining is hard. >> i just saw the numbers that the port of new york, new jersey right here had bigger volume than the california boards for the first time in years, i think, at this point are you worried that that volume won't come back to you, even after a negotiation is struck. >> i'm supercompetitive, but it keeps me running to work every day. we've been in the poll position for 22 years but there will be cargo that sticks to these east and gulf coast ports. it's gone through a change, moving fluidly and once a supplain gets ingrained, it doesn't move easily i get the no satisfaction on seeing boats backed up when we

have 25% latent capacity -- >> you're throwing said there. >> that's fact. >> doesn't that motivate a quicker negotiation instead of letting this ride out to the middle of next year or the early part of next year. >> you would think so. but both sides have the dna to show their membership that they squeezed everything they can out of their negotiations. i've been crisscrossing the country trying to explain the ground truth to importers, exporters, at the same time show these sides, we've got to get this deal done before it unravels. >> in terms of what's happening with china, what is that going to mean about additional flows coming here. what has it meant with the shutdowns to this point. >> in l.a., we haven't seen that much of a difference we've gone through three, four, and five covid waves, lockdowns across the board including in

big manufacturing location, but the central government and the ports prioritize their long-haul trade. we saw a little bit of a blip up and down, but nothing that would show a cavernous drop. >> if you don't have ships waiting off the coast at this point, do you have dock workers waiting around >> absolutely. the jobs may not be one to one, but it's close truck drivers, warehouse folks, the dock workers the dock workers have been averaging six days a week since the pandemic begin there's a lot more work that could be add. >> would congress step in if there was ever a strike. >> i don't think so. i don't think there will be a strike both sides put out press releases back in the summer saying we won't strike or lockout. president biden is the first sitting president to meet with them during an active contract negotiation and the iow has not gone on strike since 1972. >> gene, thank you appreciate the update and good

to see you. >> good to see you. today's biggest movers make sure to watch "squawk box." tomorrow we'll be in washington with a huge lineup of ceos, including but not limited to the heads of honeywell, union pacific, walmart, raytheon and jp morgan. that's tomorrow at 6:00 a.m. eastern. impossible odds, save the world. i'm done. what do you have for me? a new way to transform our agency. strategy to execution. oh, looks my laces have come undone. a business card? yes, for ey. tech expertise? $2.5 billion invested. impressive. okay, you've convinced me, i'm back. just gonna... get this...

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good morning futures falling this morning as investors await more economic data we'll get you up to speed on what's moving. opec countries sticking with production cuts ahead of a pending ban from the eu on russian crude. we'll talk to amos hock stein about what it means. plus the ftx fallout 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 times square

i'm andrew ross sorkin along with becky quick and joe kernen. we got some red arrows this morning after some green arrows ended the day. take a look at where we stand right now. you're looking at the dow off about 109 points that's a little bit better than where we were before nasdaq off 17 points the s&p 500 off 12 points. treasuries, which, of course, are impacting all of this. you're looking right now at the two year at 4.315. the ten year at 3.157. oil right now, we've got our friend aboard, checking out what's been happening over the weekend with opec+ and the like. you're looking at wti crude at $82.21 and then crypto, we're going to talk a little bit about that and regulation in just a little bit with jay clayton you're looking right now at bitcoin sitting at $17,307 which is making a bit of a comeback compared to where we were just two or three weeks ago looking at -- >> in the face of all the

negativity death of crypto i think was the headline on drudge after they had the headline of sbf at this -- is it a "new york times" thing? what is it deal book. >> deal book. >> say it loud and proud >> deal book, deal book, deal book let's get to christina with a look at this morning's premarket movers christina, good morning. >> good morning, joe well, the world's biggest apple assembly site expects its covid-hit plant in china to resume full protection sometime between late december and early january. it was affected by a covid broke and you had violate protests that's because they grew tired of the restrictions and their pay. but it impacted its november revenue. down 11% but because they announced they're going to reopen, you're seeing the stock up 8%

apple has accelerated plans too and this is coming from "the wall street journal. year to date, foxconn is up 33%. speaking of china, mgm resorts is upgraded citing strength in vegas. other names also higher. almost 14% right now and then you have starbucks posting some strong earnings, not even a month ago, but deutsche bank analysts lowering their rating to a whole. they need to offset risks of the potential u.s. recession dynamic that doesn't want to go away and get that bowl of oatmeal analysts think travel will have a goldilocks year with market conditions just right. that's why they're making delta air lines their top pick and they're upgrading delta air

lines. they believe ticket prices will cool just slightly becky? >> thank you. by the way, that strong november jobs report has boosted the outlook among a small number of economists for a soft landing. steve liesman joins us with the details on that. good morning >> good morning, becky the strong jobs report marketed another david point that defied the prevailing outlook for a cooling economy careening toward a recession. but the outlook this morning showing still forecasting a high probability of a recession let's take a look. looking at the probability of a greater than 50% chance of recession, 57% of respondents thinks that's the case 23%, less than a quarter, think there's a greater than 50% chance of a soft landing there's your chart right there now, aggressive fed rate hikes designed to slow the economy the primary reason cited for the recession coming let's do the minority report and look at what the soft landing camp sees. there's a bunch of things.

got the strong jobs number it's hard to have a recession without a sharp unemployment rate increase. peaking inflation, gas prices, by the way, are back to where they were before the start of the ukraine war. we have lower interest rates you guys you were talking about the ten year coming down also credit spreads in junk and investment grade debt have come in quite a bit you have improving supply chains, you've heard that from the port of los angeles, and then these kocola increases, wht does all of that mean? evercore writing last week the broad slowing seems to be consistent with either a soft landing or or a mild recession but the gradualness of the easing of labor market conditions is difficult to square with something more serious so far here's the danger of the soft landing scenario that a stronger economy doesn't allow inflation to come down or spooks the fed that it won't be coming down the fed would raise rates more to bring it down, creating a

recession that may not be necessary. guys >> steve, you know, we're also hearing from bank of america's brian moynihan that if there is a recession next year, it's going to be shallow recession. that's what you hear from people here and there but then you have other people who say, okay, that sounds like inflation is going to be transitory >> yeah. i mean, a lot has to do with how much the fed has to do to bring inflation down i think that's a big part of it. i do think, though, it's worth taking a step back and looking at the resilience of the economy so far there's capacity at the port of los angeles. obviously, some supply chains have reoriented themselves in fact, the two reports just leading up to mine were right in line with the idea of the kind of -- call it the minority report you have this other idea that china is opening up again, that's also -- it's inflationary and also deflationary in that you have the supply chain coming back over there. we put more people to work here,

that also could help supply. so i'm just saying, becky, it's not a slam dunk this recession there's a way out, there's a way to a soft landing and it has to do with the fed getting that calibration right. and i was very interested in joe's remarks in the 6:00 hour about the fed looking at the signals of the market. >> what's wrong with 3%? would you rather have 3% or minus 1? >> that's a great question, joe. >> i would have 3. >> i agree with that but i would add this, that the fed has a credibility issue. if it changes the target before hitting the target, then down the road you won't believe them when -- >> that's the nature of the beast. >> you never want inflation to work its way into this wage spiral, it's 50 to 60% -- wages are 50% of the cost structure when you start looking at inflation and when you're looking at new contracts that

are being negotiated and being negotiated at much higher rates, that's a really tricky, sticky thing to try to work your way out of >> yeah, it's true but remember greg also said that that's a sign that labor and their bosses believe that there's a productivity rate that they can get to that pays for it at that level. in other words, i don't think people are signing labor contracts that are resulting in long-term losses for their businesses, right? >> right. >> so at some point, they feel like the hiring of the labor at the cost they're being hired at is something that's commensurate with continued profitability and i would assume profitability that's the other side of what greg was talking about which was a fascinating conversation. >> thank you. we have more coming up on "squawk box. opec holding steady as the group weighing the impacts of china's

reopening and new russian oil sanctions out of europe. we're going to speak to amos hochstein in just a bit about what it could mean for energy prices in america. dow off 120 points, nasdaq off 21 points, s&p 500 looking to open down. we have the week -- we have the market week ahead. yen we return, we're going to tellou everything you need to know after this. >> announcer: "squawk box" is sponsored by bitwise, the world's leader in crypto index funds.

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plus ask how to get up to a $750 prepaid card with qualifying internet. ♪ welcome back, everybody. bank of america securities releasing their 2023 forecast for the markets saying that investors really need to focus on the marathon here not the sprint joining us right now, the head of u.s. equity and esg research at bofa securities welcome back we're glad to have you back on set. >> it's great to be here. >> and i love your jacket. >> thank you >> it's an inside joke, folks. >> thank you very much. >> let's talk about the markets and your view on this. you're positive at this point, at least longer term, and that's a little counter to what we hear from a lot of people. >> it's interesting. i think this past year has been brutal but we've seen a lot of really good things happen.

first of all, everybody is talking about what could go wrong, which is actually bullish for the market the -- i think the key reason to be optimistic is that we're all talking about this bad stuff that's going to happen, the fed is tightening, inflation is out of control, china is a big question mark, we have quantitative tightening, it's all out there. at the beginning of this year nobody was talking about what could go wrong we didn't even know we were going to be in a war there's a lot that's been digested by the market at this point and that's probably one of the biggest reasons to be bullish. >> having said that, we have come back from the lows. >> we have. >> we've seen some -- you've got the s&p out of bear market territory. >> we have it's a really interesting year and i think that what's happened is we've all been trained to expect this fed put. i don't know if that's what's going to bail out the market i think what bails out the market, we suffer some kind of a soft recession next year and

then we actually see a real economic recovery which is something we haven't seen in a very long time >> i mean, that to me would be the best news if you could stop thinking about the fed put you don't look at the jobs number and thought this is terrible it's great news if people are working and you have more people employed. >> consumers have money. they're gainfully employed balance sheets are strong. i do think, though, that there are risks to the biggest cohorts of the s&p 500 if you look at the s&p, it's dominated by mega cap tech and that's what i worry about. so if there were a way to buy the s&p -- >> without -- >> ex-mega cap tech, that's the way to do it >> what percentage of your peers are in the -- we need to make new lows camp on the s&p of 33, 3400, 3200 what percentage? over 50 still? >> probably. >> they haven't thrown in the

towel on that thesis, that we need a final flush. >> i think there are reasons for that if you look at just -- you know, valuations, earnings expectations are still 15% too high there are probably going to be more downward revisions. we did a survey of our clients it was interesting 2 out of 3 clients think that we're going to see pain in the first half and then gains in the second half which is starting to become an increasing consensus view but i think it's hard to argue that we won't see another down trend. i mean, if we saw 15% of earnings expectations slashed, that would probably be accompanied by -- >> you could make up for that if rates stop going up. multiples could expand or you could get a double whammy if the fed has to go much further than we think right now you get the 15% earnings revision and multiple contraction. >> exactly. >> that would be bad. >> that would be 3,000 easy. and our floor on the market, we

think the market could go as low as 3,000 easily. that's the typical recession drop >> this does not -- 4,000, 4100 on the s&p is not saying we're having a recession. >> it isn't. so i think right now there is this expectation of a fed put. and i don't think that's going to happen. i think we're going to -- we're going to fail to see the fed bail us out -- >> and then the market reacts poorly but then we get, like, a normal recovery, which is what i think we need. >> if you think that the market is supposed to see out 12, 18 months, the question is, when is that -- when is that -- >> if we all know it's going to happen, why is the market still here i know i think part of it is just the fact that we're approaching year end. i would get ready for a volatile january. i think the higher the market goes in december, the worst it's going to be in january but i think there are places to be the key risk right now is not being invested in any equities

i think you need to pick your spots, but i don't think that it's -- >> unless you believe that maybe 18 months from now -- by 18 months from now it is better meaning there is this trough you're talking about, but what the market is actually looking at is something, you know -- >> further out -- >> further down the line. >> if you have an 18-month time horizon, if you have a longer than a year time horizon, i think you should remain invested and maybe potentially add exposure to sectors. i think if you have a three month or a one month or a six month or even a 12-month time horizon, it's hard to say we're going to clear where we are. >> we could go to 3600 to 4400 for two years, couldn't we >> i think we're setting ourselves up for a better -- >> not a trading -- >> no. i think one of the reasons that i think we could actually see long-term gains over the next ten years is that our valuation framework, which is the most predictive model over a ten-year time horizon, explains 80% of the market's variability, is

telling us we're going to see 5% returns over the next ten years. if you add on o to that a 3% dividend yield, 8% total returns, that puts the s&p at 9,000 in ten years i mean, the market looks like it could double over the next ten years if you just remain disciplined, reinvest your dividends. i think we're sort of moving back to a more old-fashioned equity market. >> what are the sectors you like over the shorter term? is energy one of them? >> i really like energy. we've liked energy for two years. i don't think it's time to sell. the world is still underweight energy everybody bought industrials and materials as a proxy for energy. if you look at long, short funds, long-only funds -- >> what sort of energy across the board nuclear? >> i think -- there's a lot to choose from. i think they could all work at the same time. but i think that fossil fuels are a really interesting area.

we've choked off capital to the energy sector. we're now paying ceos on meeting their esg targets rather than meeting their production goals these guys are not going to flood the market with more oil because they're getting paid to actually reduce emissions, right? so we're in an environment where we've got tons of supply constraints on oil -- and we need oil. >> part of your tile is esg research >> i'm saying this as the head of esg research at bofa because i think oil and green and brown energy can outperform at the same time. and i think that's what we're setting ourselves up for the path to net zero is going to take a long time and it's going to be paved with i think a lot of alpha for traditional fossil fuels. we want to rehabilitate these companies and create massive inflation for lower-income consumers. we've take the "e" and focused so much on the "e" that we've

kind of forgotten about the "s" impact, the social impact on higher inflation on lower-income consumers. and i think that's where things really untravel. >> it's great to see you >> great to see you. likewise thank you. >> love the blazer >> coming up -- >> that had nothing to do with me for once. ftx and regulations. we're going to talk to jay clayton. we're watching oil prices this morning. opec+ and europe's price cap on russian oil in focus around the globe. we're going to speak to amos erchstein about what's next for engy markets all that and more coming up on "squawk.

♪ a developing stories in north carolina, residents of moore county in the central part of the state faced a second night of freezing weather yesterday with no power and authorities say that two electrical substations were damaged by gunfire in a targeted attack i've heard about things like this before. a spokesperson said the outages could stretch all the way through thursday because of the extent of the damage duke energy has been in contact

with the secretary of energy and she said her department is working with other agencies to investigate and respond. late friday, a journalist released details about twitter's censorship of the hunter biden news story in a twitter thread, he received thousands of documents from twitter. nbc news has not seen or verified those files the thread revealed deliberations about twitter's move to restrict access to the article. musk has been critical of twit twitter's actions. we're going to talk much more about this story coming up in the 8:00 hour with jonathan greenblatt, the ceo of the anti-defamation league. >> it was fascinating. >> it was. >> it's still a possibility. we just haven't decided.

i'm telling you, i knew that guy was solid. i knew he was gold >> you and ro? >> did you see he's the only one -- >> i saw it. >> the only one. that's sad it's really sad. it's great did you see -- >> how many layers to this >> they went crazy with ro he's a hero now. ro/joe, i don't know i don't want to work that hard and i think the vice president is perfect for me. he's the one who makes all of those decisions -- >> okay. this is a bipartisan ticket you're doing. >> that's the whole point. >> how is that going to work you think you can get -- >> i'm a centrist, he's a little bit left of left he's a little left of the left. >> interesting. still to come, the latest on the ftx fallout including the most recent push for crypto regulation we're going to talk to jay

clayton next plus, white house advisory adviser amos hochstein on the weekend's opec+ meeting as the group decides to leave oil ayoduction unchanged st tuned you're watching "squawk box. this is cnbc couple of kids, recently went through a divorce. she had a lot of questions when she came in. i watched my mother go through being a single mom. at the end of the day, my mom raised three children, including myself. and so once the client knew that she was heard. we were able to help her move forward. your client won't care how much you know until they know how much you care.

after some contentious negotiations, delta has reached a tentative agreement with its pilots and phil lebeau joins us now. >> the labor piece that a lot of people have been waiting for, it needs to go through the pilot unions and over the weekend it took a big step towards that happening with delta and its pilots agreeing on a new four-year contract here are the details 31% pay increase there's also a one-time bonus payment totaling 22% of back pay based on the percentage of salary over the last three years. total cost, $7.2 billion remember, delta pilots and the airline have been in really contentious talks for some time. we've seen the pickets around

the country. the rank-and-file had authorized their leadership to okay a strike it was likely not going to get to that point for a long time, if at all. they're basically under the same rules as the rail workers. all pilots are and so the delta pilot contract improves a number of things, including quality of life issues which a number of pilots, not just at delta, but other airlines have been complaining about. when you look at delta, you're looking at a company that is promising not only to have this contract locked in, if the rank-and-file approve it, but also it contains a me too clause what does that mean? the pilots at delta are guaranteed in this contract to always make 1% more than whatever the final contract is at american and united it's an escalator clause as you take a look at shares of delta, this is one of those moves that a lot of people have been saying, once you get this, this would be the clearance that the airline stocks need as far as labor stability going into next year.

we'll see if the cost is a little bit too high as we start to see the analysts weigh in this sets the stage for american and united american pilots had previous rejected a 19% pay increase for a tentative contract that was agreed to. went back to the drawing board the pilots at southwest had requested federal mediation. this could be a contract at southwest where a federal mediator puts it together, an agreement between the pilots and southwest. let's see what the airline stocks do. this will be the time when people start to say, how much do we expect labor costs to increase over the next three or four years >> good news there i think, phil, and we heard it's a goldilocks -- someone said we need oatmeal just the right temperature for what travel is going to be like. >> morgan stanley was saying that they believe we could be hitting a goldilocks moment for

airline stocks, the combination of the demand, the labor piece locked in, jet fuel come back a little bit if they come together, according to morgan stanley, could be a goldilocks environment for airline stocks pent-up demand is still there. i wonder how long that lasts not everyone has gotten it out of this system that's for sure. flying and everything else i guess. >> that's true >> going to take -- i don't know how long it's going to take. 18 months, probably. who knows. thanks, phil >> you bet when we come back, the implosion of ftx and regulation recommendations from former s.e.c. chair jay clayton and a quick programming note for you, tomorrow, "squawk box" will be live from our nation's capital talking jobs, the global economy and america's competitiveness. we have the ceos of union pacific, general motors, walmart, jp morgan and raytheon. that's just a few of the big interviews that are coming your way. make sure you tune into tomorrow starting at 6:00 a.m. eastern time

it's going to be our own "squawk box" of the beige book 'lgewel t a view of what's happening in the real economy. "squawk box" will be right back. the holidays are here. and dick's sporting goods has all the best gifts for everyone on your list. the hottest footwear from jordan, nike, and hoka. and the coolest apparel from all the best brands. plus must-have gifts from yeti, callaway, and the north face. when you're running short on time, shop dicks.com, where one hour pick up is always an option. and with our best price guarantee, if you find a lower price - we'll match it. this season, give the gift of sport. every holiday starts at dick's.

♪

welcome back to "squawk box. stocks in china saw strong gains overnight, big, big gains. after major cities further relaxing covid restrictions over the weekend. they would no longer require commuters to show negative covid tests results before travel. residents no longer have to provide personal regulation when they buy cough and cold medication the tech index, look at this, it represents the 30 largest tech industries in hong kong, now up 23% quarter to date. still down, we should say, 25% for the year you got to get your timing right on that one to make it work for you. and foxconn expected that its covid stricken plan, the largest iphone factory in the world will assume 100% production later this month that factory has been dealing with a number of outbreaks and worker unrest in recent weeks. joining us to talk to us about all of this and so much more, including the latest op-ed outlining a path forward for

crypto regulation, in the wake of the ftx fiasco is jay clayton. also nonexecutive chair of apollo and a member of the board of directors at american express. let's talk china before we get into this op-ed of yours what's your reaction and what do you think the largest implications are at this point i can't hear you, my man we're going to get your volume turned up if we can. we're going to take a quick second, see if we can do that. in the meantime, he has a fascinating op-ed out in the journal which everybody should take a look at just around what he thinks needs to happen when it comes to crypto part of the big issue is how do you get so many of these exchanges back here into the, you know -- in the u.s. as opposed to -- >> they're following the u.s. rules. >> as opposed to offshore and what that really requires or not. we'll get to that in just a moment jay, can you hear me now >> i can hear you. can you hear me?

>> perfect excellent. we were talking about china. i think you could hear me, but we couldn't hear you you were so rudely interrupted by the lack of volume. you were not being muted, i promise. >> thank you, i appreciate it. on china, i think we're in the midst of a significant reset in our relationship with china, our economic relationship with china. we all recognize that there are a number of factors driving that and i really put this into three buckets and i focus on the last bucket the three buckets are trade, sort of global trade, implications, the second is operations, you talked about foxconn and the relationship on, you know, true operations for a company like apple, and then the third is investing and that is putting capital to work in china, particularly as the u.s. retail investor and what does it mean.

and around that, one of the real questions is governance and governance and rights of shareholders one of the great things that we have in america is that the retail investor sits side by side with the most sophisticated investors. one of the things we're going to be looking at very closely, holding foreign companies accountable and the like, our investors, retail investors, getting that same type of deal as they invest in chinese markets. >> are you of the view -- this may be a counterintuitive view, that china may actually be about to open up i think there's a view that president xi is going to run this country in the mosttightl fisted way is there -- do you have any impression that actually he's looking around and going, oh, my goodness, gracious, the people are speaking, this is a problem,

i may actually have to shift strategy and what that means not just about the people being able to move around china, but maybe what it means around business. >> well, andrew, i think we can all recognize just how deeply integrated the world economies are. economic welfare in the united states is affected by developments in china as we've seen over the last few years it is a driver of inflation and economic welfare in china is certainly going to be affected by what goes on in the united states and, you know, openness of economic trade and the like so to the extent that that's recognized widely by the population and perhaps as you say embraced by xi, you can be an optimist in that regard you know, there are other factors that have been driving what i would say is, you know, a decoupling, particularly around

national security and, you know, we're talking about oil and the like and how we're dealing with russia and sanctions and china is taking a very different tact. so, you know, there are reasons you can look forward and be optimistic the real question is, will they trump those other reasons that we've seen recently. >> all right let's talk about your op-ed as well i think a lot of people are trying to make some sense out of the future of crypto, future of crypto regulation in the aftermath of this ftx collapse and we were just discussing while we couldn't hear you, you know, the bigger sort of questions about being offshore, what you have to do to get people on shore, and how that should work. >> look, in the wake of ftx, the question is, where do we go from here and what are the problems and i want to thank tim assad, the former chair in the obama administration for coauthoring

this for me. we came up with bipartisan ways forward as we try to sort this out. the first is to look at the platforms. what we saw in ftx and what we're seeing in other places is many of these platforms lack the basic protections that we expect from our exchanges segregation of customer assets, prohibitions against trading, limits on leverage, governance, prohibition on engaging in competing businesses our suggestion is, go to these platforms and say put these in place now. there's lots of debate about whether you should register with the cftc, put these in place now while we sort those out. that would give investors and others protections that they desperately need while these classification issues are sorted out and we see whether congress acts or not. >> do you think regulation could have been prevented this >> well, andrew, i think that to

the extent things are offshore and we've spoken about this, it's very difficult for u.s. regulation alone to prevent things like this and in particular with crypto, it emerged offshore and it emerged retail this is a very new way for financial innovations to emerge and with that, you get euphoria, human nature, and you get things like this. accidents like this or, you know, going beyond calling it an accident, calling it whatever you want, they are as -- they are as old and as common as your financial markets particularly when they're not regulated so could something offshore like this have been avoided i doubt it could it be dampened of course. where do we go from here and i think that where we go from here is -- we learn from this and we try to put the rigor around this. another area is stablecoin

i'm concerned that there are many things called stablecoins that are not stable. they're not transparent. i don't know how you can have stability and lack of transparency you've had people on your program, kyle bass, others talking about this i think that the fed, the s.e.c. and cftc should come together quickly with the cooperation of the treasury and say, if you want to have a stablecoin, these are the characteristics that it has to have. otherwise, it should be regulated like a security. >> jay clayton, always good to see you, sir thank you. >> thank you very much >> i recommend everybody read the op-ed. when we come back, reaction to the opec+ meeting and what it means for prices in the u.s. amos hochstein is going to join us after the break the futures right now, we are in the red this morning off about 156 points on the dow. ckft ts.ba aerhi

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♪ we'll stick to its output targets as the markets assess the impact of a russian oil supply cap we're right around 80 -- actually, now we're up up 2.5%. joining us now to share what

this means for the u.s., what the biden administration is doing to keep costs down, amos hochstein, special presidential coordinator for international affairs. amos, was there anything that happened over the weekend that was not in yourcalculus this is about as expected. >> i think opec rolling over their policy and delaying their next meeting until february, so starting to move away from this hyperventilating every month about this issue and meeting every two months now, i think that's -- that's also as expected and i think what we're also seeing is the chinese reopening responding to the -- to some of the pressure domestically >> can you -- do you have a calculator can you tell us exactly what the

$60 cap and the eu ban will do in your view to the price of oil per barrel globally? what do you think? >> i don't actually think it's going to have all that much on impact on global oil prices. it's going to have an impact on russian prices russia sells oil if it's traded out of the -- at an overseas corps, out of the russian ports, it's a very opaque and not very transparent trading. but we have some sense of what it trades at and it's trading in the -- at a -- right around $60 or maybe -- last week it was trading quite a bit employee $60. and they have some oil coming out of -- further out east and that has lower transportation costs so it trades a little bit higher so overall their average cost for the russians is

significantly below brent. even if it's being sold at higher prices in asia, it's significantly lower. and this cap is going to put a ceiling on how much they can -- they can profit from oil during this period of time of the war >> >> brian sullivan asked me, and it is a great question, why can't india or china buy it and then sell it back to europe at a higher price, buy it under the price cap and then is there anything preventing them from doing that >> well, they will still have to attest to what this oil is and again, it is not that much of a large producer so it will still be russian oil, but at the end of the day, india is buying this oil not because it wants to buy russian oil but because it needs oil for its economy. so you are going to see there is also a lot of limitations on shipping and other logistical concerns for the russians to be

able to significantly expand what they are doing. so i don't see that as -- you know, that may happen on the margins, but not as something that will be a major player in the market in the meantime, what we're going to have the most important part of this price gap is to make sure that it actually caps the revenues that putin gets and that the storyline about his being able to sustain while bombarding kyiv and the energy grid and innocent civilians, that won't happen, he will be capped and probably sell it below the cap for a significant portion of his oil >> and with the spr basically being tapped out, that means that we're no longer going to get about a million barrels a day that the spr was putting into the market. i think the iaea has said that could mean additional demand of

2 to 2.5 million barrels a day if you've peck continuing with this cap, that is a pretty big shift in supply and demand what do you think that does to energy prices? you have wti already above $82 this morning >> yeah, look, remember that we did the president ordered the 1 million barrel a day because of the emergency that we were suffering through a war at the time and we were at about $117 a barrel it the on our peak or $120 a barrel at our peak. and today wti is almost $40 below that and even brent is somewhere -- i can't see the screen, but somewhere in the higher 80s. and so you will take a significant jog, 10% or so -- 3%, sorry, of the market which is the russian crude and 3% to 5% and cap that at $60 on the purchase price so i think that there is --

notice, we'll have to watch it very closely if there is an emergency, if there are storms or other reasons for emergency, we still have enough in the spr to be able to respond to that. we've been acting very responsibly as far as taking out of the spr what we needed for the emergency but not more than what we should so we still have 400 million barrels or so in the spr >> i think that there are questions about that though. we spoke last work with mike wirth from chevron and he said there are a lots of issues because if you take. more out, many of the caverns are lowest than they have ever seen so from my understanding from a technical point of view, you really can't take much more from those caverns. >> i talk to mike quite regularly and i think on the stability of the caverns we're doing okay there will be some maintenance, but that is not a concern. we still have enough oil that we can can release additional oil

from there if we need to we are not going to do that unless we need to, but we have enough to be able to respond to any emergency. >> does an emergency include higher prices or does that only include a storm shutdown because there has been a lot of criticism about it being used for high prices. >> it is true that when you have an emergency there are also high prices but the response of the spr release was because of the emergency. we did have a major war erupting in europe involving one of the largest oil producers and oil exporters in the world which was the driving force of the higher prices so yes, you are responding at a time when prices are higher, but it is because there is an emergency happening there and that is why we needed to be able to make sure that we did not empower the aggreineineineing a. they are now $82 a barrel.

>> so $120 towdown to $80. when prices at the pump were much hire, we can do hear a lot from the president and administration about profiteering and gouging and now we're not hearing that as much. now what we're hearing is that some positive moves made by the biden administration to lower prices this the markets, the world markets. that bore fruit. and as a result, now we have $3 gasoline a lot of places so if oil companies and refiners were able to control the prices and gouge and profiteering at the higher levels, why does the biden administration get credit when market forces take over and they do come down, which it always happens is it just politicians got to politic and they got to seize an opportunity when prices are high to talk about windfall profits

and then the minute they come back down, we don't hear anything more about it when market forces take over. is it the same as we'll end the fossil fuel industry, they just say this stuff to their base >> well, joe, let's level set this when prices were high, the president was not talking about higher taxes, he was talking about increasing production. we released from the spr i had conversations as did others with ceos and other senior executives in the oil industry in the united states. we were told it will take time to increase production, six to seven months and bring it to market they thought that would be by the end of the year. we took the action with the spr in order to save not just the u.s. economy but the global economy from the reactions that putin was trying to cdo he was literally using 234rg as energy as a weapon and we mitigated that and gave time to the private sector to invest more and invest in

america to increase production there was extreme frustration when several months later prices were still very high and we didn't see the same level of investment and increased production the president called on them to do it. a lot of calls around europe, they instituted a windfall profit tax on energy companies and the president basically came out and said if you don't increase production, and you continue to have soaring profits, we'll have to see how we give relief to the american public in other ways so we're still hopeful that we see increased production even at these prices and we have seen companies like chevron and others increase the injection of products into areas of storage in these coasts and so on. so we're seeing some progress in some of our conversations with industry and we'd like to see more >> all right i think that you were on -- this says it is a weekly thing almost, which is good. an important thing to talk about and good to have you on. i like the backdrop.

all very official. >> i'm just worried that it is so cold and he is not wearing a coat >> jfk, remember never core a coat. coming up, jonathan greenblatt will talk about the latest elon musk twitter saga and free speech on platforms we'll deba ianmotet d re

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good morning, stock futures pointing to a slide at the open. friday's job report tanking the markets but a nice comeback now. we want to know what the strong jobs picture means for the fed and oil prices jumping new price cap, sanctions, reaping moves from china and what did elon musk twitter files reveal about free speech and big tech? we'll is the anti-defamation league as

as. good morning and welcome to "squawk box. live from the nasdaq market site, i'm joe kernen along with becky quick and andrew ross sorkin who likes purple blazers apparently that did look nice i'm fine with you -- >> so i can wear a purple blazer >> let's say i like it and if i don't like it, i'll say i don't like it. u.s. equity futures are in the red. kind of the impressive snapback on friday after the hot numbers, hot wage numbers, good jobs numbers. it was a good report >> i just wonder if we can get back to the point she was saying that there is no more fed put and good news is actually good new. >> there was no fed put for a while. >> but we're still rooting for bad news to some extent in the market if you eventually get rid of the fed put, then you are really

just rooting for yay for the economy, people have jobs. >> i think it implies pain, to know that the fed put is gone means that there is less pain. we'll learn about loss, counselor. 14 years >> and triseasury yields too. >> that is also maybe more important. 3.5. ran up to almost 3.7 on friday >> and we're also keeping an eye on crude oil prices. today's big news that a 60 ready per barrel price cap on russian oil is coming into force along with opec keeping its output policy unchanged all of that added up together shows you wti up about 2.8%. all of this coming from the g7 nations with that price cap. it means that russian oil cannot be shipped to third party countries using g7 tankers and insurance companies if it is sold above the $60 a barrel level. intended to squeeze russia's finances as punishment for its

invasion of ukraine, but it is possible it won't have much of an impact because of $0 of $60o far from where they were selling it anyway. separately today the european union is imposing embargo on russian crews shipped by sea >> i don't actually think that it will have all that much of an impact on global oil prices. i think it will have an impact on russian prices. this cap will put a ceiling on how much they can profit from oil during this period of time of the war >> you asked him the interesting question that came from brian sullivan, what is going to happen in terms of whether india and china can turn around and sell it. i don't think the administration our anybody else would be upset with that. >> as long as russia still doesn't get it >> i think that they would like to keep the oil on the market and moving around the globe

where it is needed we will talk much more about energy a little later this hour as we showed you goldman sachs commodities expert jeff currie will be joining us and china eased some of it covid controls execu commuters were allowed to use subways and buses without a negative covid test. shanghai says starting tomorrow there wouldn't be any testing requirements for people to enter most public places and sources tell reuterss that further easing measures could come as soon as wednesday. reopening of china will likely put upward pressure on oil prices, maybe other commodities. one of the things we talked about last time we were discussing this story, it may be -- you may be able to get cold and cough medicine in china a little easier without being ratted out immediately to the police state that you ordered --

that you had the sniffles and they come in and test you, i guess? >> and lock you up if you have covid. >> and lock you up >> you know the joke but you don't think it is a joke, so we'll leave it there >> no, i don't, but -- >> i didn't realize that -- >> you like it here. the american dream is still here you're not going to tell me that you like it over there >> no, but i -- >> you want people to get locked up i know, you look at me if i cough. >> i think there is a larger piece going on here. i actually think president xi is actually moving based on what people want in that country. and i think that -- >> i think he has to >> i think there is a chance that this is not just about this, that now that the party congress has happened, now that the people are speaking, that you actually might see the country open up in ways that we have not before. >> but i think that is coming out of brute force >> no question >> from the protests and weird in iran same thing is

happening. but in iran they are saying that they will pretend they are going to relax the head covering but then the minute -- >> and the morality police have kind of disappeared the last couple months. >> that is a real thing. >> yeah, because they pushed down so hard >> haven't seen as many of the morality police around >> i also think he is seeing what is going on in the economy and so he is saying i have to rethink this and now that the party congress is over, i think he has time to actually make some changes that he couldn't maybe have wanted to make ahead of it meantime when we get to the broader markets, mike santoli is joining us to help us ahead of the opening bell help us is probably the right phrase this morning. help us, mike. >> no doubt going to test that intra day rally we got friday after that jobs number

question here, is this just another one of these rallies that is to be sold, in other words just another rally within a longer term down trend it is very similar to what we saw from mid june to mid august. 17% gain in the s&p 500 peak to trough and that one stop just short of the 200 day average. we also had twrreasury yields declining in the expect takes that the fed would get less aggressive some differences, it is better seasonal period. we've also absorbed a lot more and we have more tangible indications from the fed that they might be easing up. and a little bit of sturdiness in the underlying economy is also kind of gotten rid of some of those stagflation fears for now. riskiest ones just barely nosed above the s&p year to date basis. also did that back near the august peak. kind of risk-on flavor from this very heavy in tech and consumer

discretionary. the s&p 500 vix is down to the lows just about of the year. so this has been kind of where it has bottomed out on these rallies in the committee market. doesn't mean it is too low, it means that we have holidays coming up, more stable equity market and maybe demand for hedging a 30 day window ahead. not very strong. but keep an eye on that because it has sort of shown itself to represent a market that was getting a little overbought when the vix has gone below 20 as it has right now. >> there it is beal we'll see what happens next and when we come back, elon musk said he did not want twitter to become a free-for-all hell's gate but a lot of people think the platform has gotten more extreme since he took over following release of two-year-old documents highlighting the debate inside twitter over the hunter biden scoop. we'll speak to jonathan

greenblatt on free speech, hate speech and more. stay tuned

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censorship of a news story about hunter biden in 2020 controversially blocking people from twitter in dreirect messagn about it he said he received thousands of internal documents from sources at twert aitter. and people get mad when you read this, they will get mad at me. nbc news has not seen or verified the files the thread mostly revealed deliberations internally and externally including with congressman ro khanna about twitter's move to restrict access to the article. musk has been critical of twitter's actions during the 2000 election. including freezing the post. pretty talk to the anti-defamation league last time you were on, i don't know whether you have revised what you told me, which i was

pleased with an great gratified thought elon musk understood the problem and would do the necessary things to make you happy. >> and it is about fighting hate >> to satisfy your concerns. >> well, look, elon has undertaken an extraordinary challenge. whether we like it or not, twitter is the public square but it shouldn't be a firing range, right i think that it is really challenging for us in an environment where hate and incitement is thriving on the platform now, i know he has the right intentions because i believe that advertisers will flee if he gets it wrong. he knows that brand safety is linked to user safety. the challenge is does he have clear and transparent policies and does he re resource it

effectively. >> he said in your notes anti-semitism has been normalized and i think that is totally untrue in fact i think putting the light of day on it, the revulsion from 99.9% of the people that saw the -- whatever that was down in florida and any of the crazy stuff you see on twitter, you shine a lot on it and i don't think that it is anymore accepted i think it is less accepted than it was 10, 15, 20 years ago. >> i totally appreciate that point of view. i think if you ask jewish people, they are seeing the hate spread in places they never would have imagined before, whether comedians or celebrities. >> farrakhan has been around a long time. almost looks like 2.0 the kanye stuff. it is disgusting and no one -- >> but he is one of the most well-known entertainers on the planet >> he's well-known, but so

compromised at this point, i don't know if he can even earn a living he has to wear a spiderman output fit so you can't recognize him. >> i think the reason why jewish people are so concerned is anti-semitism has reached historic highs and by the way, when terms like globalists, that is code for jews and they are not going away >> what do you make of apple becoming the biggest advertiser again on the platform, how much do you think that was driven by elon sort of speaking out against their 30% cut of the app store versus something else? >> well, look, i think elon has extraordinary personal appeal. i think he went right to tim cook and said this is what my intent is and still giving him the benefit of the doubt, which i get. twitter is incredibly complicated. it won't be solved overnight but the reality is a lot of

brands have not gone back on the platform because they haven't seen the clear and transparent policies >> do you think they should or shouldn't? >> i understand what tim is trying to do, how popular aen app it is, i understand that he wants to give elonen a opportunity. we all do but he has to show some progress >> how would he show progress? >> he personally intervened about kanye and took that account down he personally intervened on another account a few weeks ago that was promoting anti-zionist hate that is great. but we need clear policies, not personal intervention. >> can we talk about the twitter files themselves, which to say it was pretty eye opening to see some of the back and forth going on inside the company over the new york "post" article which of course now this morning the new york "post" has "fed lies" related to some of this. but two pieces to it, some of the stuff that was taken -- look, that article should have stayed up, i think i don't know where you are

but the other piece of it, some of the stuff that was being taken down apparently were, you know, porn -- you know, pictures not appropriate to begin with. so how do you measure those two pieces and the communications that clearly were happening from both the biden campaign and then separately in truth from the white house. >> so a couple things. number one, i don't think that twitter files are exactly the pentagon papers. so you have to keep it in some persp perspective. >> might be worse. >> worse than the pentagon papers >> it might be worse in terms of when you've got people like brennan and clapper still haven't responded to -- and even the president said that he knew it wasn't russian disinformation and he still fed into that and you saw how the election finally determined it. do you think it would have changed the election that is a pretty big deal. >> i'm not a political

scientist. >> it is a big deal. >> i don't think that it is the pentagon papers. that being said, i wasn't a fan of old twitter so i had the same questions about them >> you are not lessening how egregious this is. forget the pentagon papers but ro khanna was the only democrat who said anything >> you need open discourse on these platforms. you do and there are legitimate questions which i think that you need to provide room to debapt and keeping out stories that are literally front page in the paper, i don't think that is really help aalthy for debate o discussion but my area of focus is hate and incitement and there should be no debate or discussion about that >> we agree on that, but i can't say that it was just going to be -- you know, they kept out the front page i don't know where this all leads. i don't think that we know where it leads in abou in. >> but the point is, and this is

the question, the article should have remained. i don't think that is in question but you look at the links that were being eliminated -- >> james wood was posting pictures of his junk and do you want to see that >> well, no, but when you saw the biden campaign asking for links to be taken down, those were the links that they were asking to be taken down at the same time you had the trump administration which was in the white house at the time, so trump was an elected official, you talk about free speech, the constitution, all of that, you know, that is the president asking for certain things to be removed. so that is why this to me is not like a cut and dry pentagon papers situation not to be defensive of one position or another. i think this piece from the "post" should have absolutely remained on the platform >> i agree >> and it is not just twitter, it is across the board it is frightening to see how everyone got in lockstep with that papers, mainstream media,

networks, everybody. lesley stahl it is bizarre. and i don't know where it leads, but you know, if it leads 10% here, big guy here, discussing business here, influence peddling here, it could lead to real things that we needed to know about and for mainstream media not to have any interests in pursuing it is wrong. and i don't understand it. i don't. well, i do understand it, but it is egregious >> i mean, look, at the end of the day, i think you need the open discourse, people need to make decisions on their own and a lot of things that need to be within bounds and some out of bounds one of the big questions that elon has to deal with is links on tweets. so when it links to pornographic material, should there be room for it i personally don't think so. >> you want to talk about amazon >> yeah, while we're talking about twitter, we're talking

about amazon that movie, that hateful inciteful movie which i won't mention is still up on the platform andy was at deal book last week saying they have no intent of taking it down and now they are putting a disclaimer on it but guess what, they are breaking the law in places like germany and other parts of europe where holocaust denialism is i is illegal so we're working with the government to encourage them to pursue this. >> and i'm jewish. i don't like anything like this. having said that, and i'm not being defensive of this position at all, there are so many books on this platform, i mean, that say all sorts of crazy things about all sorts of crazy things. and the question is who is the arbiter, where does the hate piece -- what is the line there,

the hate piece leading to the violence piece sort of -- and who is supposed do that? because there are millions of books on the platform and i don't know what the right answer is i really don't in this particular case, i don't like -- but again, i haven't read this book so i can't speak to exactly what we're talking about. >> look, i think that your audience trusts you here at "squawk box" to curate guests with valid points of view that are within bounds if you will. i think we as consumers of amazon trust them to curate content, books, movies, products within a set of bounds and norms. that movie is out of bounds and beyond our norms so there is at sis a category b that has to use amazon's values. >> but it is not really a rules based decision, it is based on the decisions of humans. >> like so many of life. >> but elon musk doing oneoffs, you are saying that is not

enough, that it has to be rules based. pretty tough to find rules around all of this stuff because it is the eye of the beholder. >> none of this is easy. and i'm not trying to o oversimplify it. >> let's talk aclu you remember and we brought this up before, just one instance, but i was a kid and i remember white supremacists marching in skokie with the acl's not blessing but they were very intent on making sure that they were there defending rights of these people to do that. was that mistake you're 180 degrees from that was it a mistake that they did that what has changed i think certain media outlets where you would think free speech was going to be the last thing that they would give up, suddenly they are anti-sfree speech >> like what media outlets do you mean >> take your pick. i think maybe twitter

highlighted it i'm not going to throw myself under the bus, but mainstream media outlets, you can find representatives at every one of them that suddenly are anti-free speech >> i mean, in the abstract, it is hard for me to respond, but let me be specific with you. at clu and the issue of free speech, we will fight ferociously for the first amendment, but freedom of speech shouldn't be the freedom to slander people and you have the right to march and share your ideas, but is it a good idea for you to march in front of a synagogue where there are holocaust survivors? i don't think so take your march and move it over here there are ways to manage this, joe. we've done this as a society for hundreds of years. we need to adopt norms and policies >> but to me it appears to have moved. >> we have nazis back on twitter this morning goalposts have moved usually you wouldn't find them in any mainstream media outlets. i hope twitter gets it right

we all want to succeed >> good to have you on coming up, goldman sachs oil expert jeff currie will be with us to talk about the week ahead and what is going on with the new opec decision. and first reminder tomorrow we're taking the show on the road, we're headed to d.c., it will be a biggie we'll be with the business round table, an all-star lineup of guests if you want to understand what is going on in the economy, this is it. we'll talk to the ceos of gm, waar jorn onthlmt,pmgaamg em stay tuned ive as you are... don't settle for silver. harness the power of 7 moisturizers & 3 vitamins to smooth, heal, and moisturize your dry skin. gold bond. champion your skin. the holiday season is in full swing. and dick's sporting goods and golf galaxy have the best holiday gifts for the golfer on your list. like tour balls from the best brands. and top-of-the-line irons and drivers from callaway, taylormade and titleist. a golf bag is always a great gift.

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corp is cutting full yea outlook and announcing that their ceo is retiring. the lead independent director is being named interim president and ceo. the company says it will conduct a search for a permanent successor. if we look at the stock again, you can see some red arrows there. reacting pretty badly to this news down by about 6.6% lawmakers, lobbyists and businesses are racing against the clock to try to pass tax deals. ylan mui has more on that front. good morning >> good morning, becky you're right, lawmakers are trying to pass a massive end of year spending deal before the

holidays and businesses are hoping that it will include some key tax breaks on the top of the list, restoring the full deduction for r&d. due to a quirk in the law this year companies had to t am ortie it over five years and they write failure to reverse this harmful policy will impair america's competitive position, weaken our national security and undercut the well paying innovation jobs supported by r and d and companies are also pushing to preserve full expensing of capital investments later to start phasing out next year. and to keep a more generousculi interest reductions. in exchange, they want the enhanced child tax credit. still unclear if congress can pull this off. on or if lawmakers will resort

to another short term funding measure and kick the can down the road once more back over to you >> it is like episodic tv. i don't know what season we're in, but it happens a lot hopefully never the worst case scenario coming up, what to expect from an oil market poised for bill changes we'll speak with goldman sachs analyst jeff currie. plus richard fisher on new questions facing central bankers.

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back to one of our top stories, the new g7 price cap on russian oil combined with fresh sanctions, opec also standing pat on the output. and jeff currie is here, head of commodities research put it all together for us >> let's start with the announcement from opec over the weekend. very rolled over the previous agreement primarily due to the ina and as well as potential retaliation by russia. so let's start with china because without china, russia's leverage in this market drops tremendously and the best way to describe china is let's look at the price action of oil equities versus

oil prices or copper versus oil. copper and oil equities are forward anticipatory assets. they look out into the future. they have been pricing well over the last couple weeks. pricing on expectations of a reopening of china 2 q of next year in contrast oil is dealing with the near term problems of china, meaning caseloads are increasing tremendously, when you look at high risk districts, 75% of china's gdp is being impacted. the concern is this creates forced reopening, oil demand drops, oil prices on the front end collapse, but we know that they will get the out of it like most of these reopening scenarios and by late 1 q, 2 q demand is back up which is why the equities and pricing -- >> but come back to us on that piece of it. so your expectations over the

next three months, the china element, is going to be -- it will be a rough ride the question is how quickly do you think that comes out on the other side you think q2 >> q2 is base case but the problem and why the market is very worried on the front end of the oil curve is what if we get a disorderly forced reopening where people self impose lockdowns. they just don't want to go out and interact with in in-anyone e caseloads are rising so quickly. i think that is what people are fearful of where you actually have a sharp contraction in demand, and then you are reopened and you get the positive benefits later on and i think that that is the big fear factor in the oil market. now if you bring russia into the equation, his leverage is a function of that chinese bid if the chinese bid is not there, his ability to retaliate drops tremendously and almost you will get an

answer to both of these sometime in the next four to eight weeks because think about with russia, they can announce retaliation, we can't verify it until all the ships that left -- because remember, part of the reason why oil prices came off is before that december 5th deadline, they loaded ship after ship after ship, send them out. we won't know if they retaliate until all those ships come back and they have to reload them that will take two, four, six weeks before we actually know that but also the situation with china, we won't really know what happens until you probably get into mid-january/february about their ability to manage this so that uncertainty creates the cap on oil >> you talked about why, and it makes sense rationally what you are talking about. but having said that, people have been piling into fossil fuels. at some point does the balance

tip? >> i think that it just looks strictly at relative returns if you take the three year moving average of the nasdaq versus energy equities, they are kissing right now. we'll see how people's aversion toward fossil fuels in that energy sector stands up when you actually have much better returns in the energy sector than you do nasdaq and growthy tech names i tend to think in talking to asset allocate tors, if they rank order their reasons, history of bad returns let's not forget the sector destroyed 54 cents on every dollar it was given. number two, high volatility and then esg was number three. >> and do you just buy with both hands? we have a list of big oil on the screen chevron,oco phillips, exxon,

bp, any differentiation? >> i'm not an equity analyst, but i'd argue that the space in general is very well positioned into 2023 under investment the supply picture is bleak to say the least. you know, particularly in nonopec sqs and shale also disappointed the other point is inventories are incredibly low we have no inventory, no spare capacity and you are likely to see sequin that will improvement in demand given what is going on in china and the rest of the world. so you put that together, 2023 very positive for oil and energy >> thank you for putting it together we appreciate it top officials from the united states and european union are set to talk trade today with electric vehicles high on the agenda kayla tausche is joining us with more you'd think that they would have

other things high on the agenda besides electric vehicles. >> reporter: yes, but that is certainly toward the top of the list and i'll tell you why here at the university of maryland, third in-person meeting for these high level if i recalls from both sides of the atlantic and there are two top officials from the european commission here as well and they are talking about big picture items like china's economic coercion, russia's aggression in europe and the secular shift in supply chains that they are calling friend shoring trying to move them from places like china toward western nations where they have shared values and like minded approach to business in areas like critical minerals, batteries and electric vehicles as well as medical devices. but even as all of that discussion is under way, europe has been extremely critical of the inflation reduction aunt and

some of the incentives given to american business to move domestic manufacturing back to the united states they call it protectionist, they say it is illegal under the world trade organization and they have threat onlied retaliation. and earlier this morning i spoke with the european commission executive vice president, and i acknowledged that that spat has the potential to overshadow all of the progress they are making elsewhere. here is what he told me. >> we can see how to strengthen a corporation, we agreed to cooperate on raw materials, on minerals, overall supply chain diversification. so clearly the work is ongoing, but it is important that it is not being contradicted by provisions in "inflation reduction act. >> he called it one step forward, two steps back and says that they will try to work on some fix bincentives are set too

in place at the turn of the year i also asked him about the price cap on russian oil that is either to go in effect as you guys were just discussing. i asked him about russia's deputy prime minister saying that they just wouldn't sell oil below that price gap and they will find workarounds. he said that officials from the u.s. and eu are monitoring the situation very closely and they will be monitoring any potential workaround and trying to strike town any sort of supplemental business that russia is trying to do outside of this mechanism. but he acknowledged that that could be an issue. i asked him about the jump that we're seeing in oil today. he said that they believe it is not going to be a sustained rise, just the market reacting to these measures going into fent b effect. but as jeff said, many other forces in place. >> really incredible last night. "60 minutes," president macron, that is all he wanted to talk about is "inflation reduction act. and the same thing that you just brought in

right after he said we really worry about the stability of american regimes and then he threw the trump administration totally under the bus because of climate change and iran, but then he just teed off on the biden administration for the i.r.a. >> many of the european union officials will suggest that perhaps the few years of calm in trade tensions between the u.s. and the eu are sort of reverting back there are discussions on, you know, aircraft disputes between boeing and airbus, still trying to work out a fix there. and of course the tax incentives you mentioned. but last week president biden when he was standing with president macron said there are adjustments to the i.r.a. that will benefit european manufacturers as well. just remains to be seen how they benefit them at all. >> will this overshadow the unity we've seen facing russia with ukraine just the idea there have been

threats from some areas of the political parties here in the united states to say we'll cut off exports because we don't want prices to go up too high here, which would lead them high and dry. that is what surprises me about this, it seems like there are so many more urgent issues facing them right now >> and i think that there is a risk of that, i asked him about how the eu would potentially retaliate against the u.s. and he said don't put the cart before the horse that is something that they would potentially take up next year >> kayla, thank you. when we come back, jim cramer's first take on the market week ahead and we have former dallas fed president richard fisher joining us as central bankers go quiet ahead is heir next big meeting. hea former banker so he can still talk

down to the this morning new york stokxx

what is on your radar? oil? >> i still think that china reopening is so bullish, that whatever happens at opec+, china will need more oil and that will drive the price up so i think that that is very important. mike wilson came out with this piece today. a big bear and he said it will be earnings that are the problem next year i think the earningsin tech will be a problem but the rest of really almost every ear sector i think will be pretty good >> i just wonder whether we can really believe that china is going to be able to spin this if they are not responding to domestic sort of uprising. that looks like whats it is. >> i think that they realize that like if you work at

humana's day take, why not just pivot and say that we won, we beat out the bad strain, and now the strain that we have now is just like a flu, so just stay at home and get better. and use the omicron as a way to be able to say look what a victory we had against real bad covid. i think that it has a good narrative. >> are there data points this week with individual companies that you are looking forward to, jim, to key on to bigger things? >> well, i'll tell you, it is a very weird week. we're going to get -- there is one company that i think people don't think enough about, but it does cover the whole gamut of technology which is broadcom and they report on the 8th enterprise software i think that is the weakest part of the economy, of the whole complex. so i'm looking and saying that these have to win, they have to

do better in order to protect the technology rally semi and software are both disasters. >> and are they going to -- >> no, i think that there is too much inventory throughout the channel. we know foxconn business was down more than 25% so there is just this gigantic backlog and gigantic collide that includes what broadcon has to do. and mongo i think we'll see a forecast that is disappointing >> and do you want to live without twitter? >> i'm still on. i talked with some high executives who were let go and i feel that it is too early to abandon >> all right >> by the way, some of those executives are still on too. >> i know. i don't know, it is hard to stop doing addictive drugs too. >> that is absolutely true

oxy. >> are there good things >> i think so. i think it is very much kind of a purdue phrma thing >> twitter is sick thanks, jim. we'll see you in a couple minutes. "squawk box" will be right back thicrdisr. wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq

as we get close to the end of the hour, another reminder to catch our big show tomorrow. we will be live in washington,

d.c., from the business round table with some of corporate america's top ceos we're going to be sitting down with darius, also ceos from across the board, lance fritz, doug mcmillon, jamie dimon, mary barra. in the meantime, a quiet period ahead of next week's decision that comes ahead of the jobs report investors now are trying to figure out if the fed will still do what it was signaling before that jobs number joining us now is richard fisher, he's a senior advisor to barclay's. he serves on the boards of tenet healthcare and warner bros. discovery and is a cnbc contributor, and richard, we don't get to talk to a fed president but we get to talk to a former fed president and that is pretty darn good. what do you think after that friday jobs report it was definitely hotter than expected is that going to change jay powell and company's minds >> i don't think so.

just came across the wire, the fed whisper, nick, arguing that they might possibly make two 50 basis point moves. i consider that a reasonable thing. and i think that the main point here, becky, is we're still going through this adjustment from free money to money that costs, and it's sort of a jerky process in the markets one of the best investors i know has described it as going from driving automatic to stick shift, and trying to get that down, jerking back and forth, back and forth, back and forth, back and forth, and i think that's what we're seeing in the financial markets. i don't think that dissuades the fed and certainly not chairman powell from doing what has to be done and it's pretty clear they're not done >> we're looking at the dow futures right now. maybe we can put this up tick by tick for the dow futures, which are now off by about 240 points. we've been down earlier this

morning, but it was closer to down 150 my guess is that had -- that's a drop that took place just as you mentioned that wsj headline crossing we've ticked lower probably just on the assumption that things could be 50 basis points, 50 basis points, and then the fed waits and sees to figure out what's happening. you can look at the futures or the bond market, and the yields there are indicating that the bond market seems to think the fed is going to pivot sooner rather than later, that there's enough damage that's been done that they will have to be pulling back 3.553% is the last tick. which one do you believe who's got the bigger heft when it comes to this >> i'm not sure markets are great indicators here. again, there's so much uncertainty. if you look at the yield curve, what's interesting is the one h one-year is stuck at very high levels and everything else has fallen off as you proceed out the yield curve. what that's telling you, i think, is that they expect some tough stuff in the sheort-term but that it's going to work, therefore, you see the ten-year

has come down dramatically from its peak of 4.3 to where it is right now, 3.4 range and even at the three-year, the five-year, seven-year. so, that, to me, is an assumption by the marketplace, right or wrong, that they'll get the job done, but short-term, it's going to be expensive and look at, again, where the one-year yield is. so, i think the main point here is, i'm pretty certain, as i understand jay powell having sat next to him for three years, having talked to him every now and then, the worst thing they could do is stop early they already made a mistake by embracing this transitory argument they look bad. they stop early, and then inflation continues on or roars back, particularly driven by wages, especially on frontline workers, not white-collar workers. and then they have to come back and tighten again. that would be -- i think they would go down in the books as

having done a very bad job >> you mean it's better to hurt the economy too much than to lose face? >> i think he's basically said that he didn't say, lose face, but it's -- there's a danger in not doing your job, and that's the way i read brookings, his appearance at brookings. everybody said, massively dodged, et cetera. i thought he was quite deliberate and signaling they're going to do this as long as it takes to get it done, and it may last longer and at a higher level and stay there than some people are guessing or the consensus has it >> you know, lasting longer and leaving it there for a while is different than continuing to raise rates beyond the level that are needed. and i mean, there's so much -- if you listen to some of the ceos we have on who have seen real struggles in their businesses as a result, they'll tell you they've already done too much if you listen to larry summers, he'll say, it's going to be way more than the fed is even

indicating at this point which camp do you come down in >> well, you know, larry is ubiquitous he's everywhere these days, but he's very, very smart. and he's a friend of mine, and i think that he's probably closer to being right i can see a terminal rate that's above 5% and holding it for a while. so -- but you know, becky, i just came off a huge victory, which is the dallas cowboys last night, 54-19 >> 33 points in the fourth quarter. >> i want to be generous, but i just need to be -- >> that's you feeling good about things that's concerning, richard >> richard, only -- >> once a fed official, always a fed official >> only i could have dak prescott over 200 yards passing and they score 54 points and he was not over 200 yards passing what the hell happened >> we have a great defensive team that's the big change that's taken place this year. so, hats off to jerry jones,

particularly the defense coach these guys are good, really good >> they are. >> tomorrow, we've got -- >> the kansas city chiefs went did you see that, the bengals? or in jim nance's words, the bengles. i hear all of them and the bungles. i hear all of them >> richard, we're going to be meeting with a lot of ceos tomorrow that will give us a look at the real economy if they're telling us things are bad, does the fed hear that? you've got about 30 seconds. >> first ask about inflationary pressures swinternally, what the wage price dynamically is. secondly, the key is going to be aer earnings now the economy slows, earnings will be weaker. i would focus on earnings and their cost structure that's what i would do >> hey, richard, thank you very much, and we will talk to you again soon because none of the fed officials there now can talk to us, but we appreciate your

insight because you know this stuff inside out you've been there yourself thank you. >> importantly, joe and i are going to play golf at the pebble beach pro am so we'll talk there. >> we'll see beyou before then. >> do not be in that gallery around either one of us. >> fore! anyway, we will see you tomorrow from washington, d.c please join us for a big show with the business round table. right now, it's time for "squawk on the street. ♪ good nond monday morning, i carl quintanilla with jim faber and jim cramer futures having trouble getting out of reverse, despite more optimism about a china reopening and hong kong up 4% overnight. very busy week, inflation data, road map begins with china changing course. set to announce a further easing of its tough covid curbs as early as wednesday >> plus, speaking of china, signs of waning demand tesla is set