chair. india's prime minister meets with president biden and big tech ceos at the state dinner. and elon musk and mark zuckerberg trading barbs about a cage match fight zuckerberg is an mma fighter i thought it would be two nerds fighting each other. it's june 22nd, 2023. "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 becky quick along with joe kernen and andrew ross sorkin. welcome back. >> thank you >> what a week we have been looking at the u.s. equities and futures red arrows across the board. dow off 61 nasdaq off 22. s&p down 6.5 that comes after the pull back for stocks in yesterday's session. dow was off 102 points the s&p lower by .50%. the nasdaq was down 1.2% it came while jay powell was testifying and bostic had comments as well over the future of interest rates. i heard different interpretations of the bostic comments he said he thinks he is fine let it ride and see what happens. some people say that is bullish. he said he is taking the idea of rate cuts off the table for next

year some people pointed to that as the point when stocks actually started to sell off in the afternoon. >> until next year >> taking them off the table next year for next year. no cuts this year. no cuts next year. >> 5 or 6 is where we will be? >> if you believe bostic is the prime mover. >> the idea -- you will hear from a lot of fed hawks today. you have mester annd waller and an others anything else you hear may concern you a little bit about what is happening next not to mention there is not a consensus on the committee it highlights that more than anything >> i thought all of the comments powell made so far and we will see about today are on the hawkish category. >> a couple of hikes coming. i saw people saying jay powell caused the sell off.

interest rate concern is a fair assumption >> we decided if you were sure you were going to go, you would have gone. >> right the case was there for needing it that is what larry summers was saying. >> take a month off? >> yeah. no big deal. there is a reason you are doing that >> see what's going on >> you are admitting the possibility of something happening which changes your point. this was weird yesterday >> bitcoin going up again? >> based on where you started. you know, i was watching it kept going and going and going and going above $30,000. it kept coming in. it was weird blackrock neighmade the announc. it was dealing with negative things fed comments about going -- >> blackrock announcement did not move anything. >> not right away.

charles schwab and citadel and others stepping in with the void by ftx the blue chip names saying we are going to do the crypto stuff. i think the other thing people were saying is there may be a lot of the s-coins, not allowed to say that word if anything makes it through all this, bitcoin will be a survivor why else get in crypto if you didn't think bitcoin or ethereum did have some type of future in the world? i think once again -- it doesn't take much. >> bitcoin is up 50% for the year. >> for the year. yeah meantime -- i was rolling my eyes she wanted to buy a one-month 5% t-bill >> i bought some

>> what will it do in a month? >> 5%. that is better than what -- >> if it is $10,000 at the end of the year, you have $500 you can go to dinner at a decent place. >> by the way, it beats the savings account right now. >> right all of my former guys in the business message me. kelly has a night llight, too you want to feel safe at night you keep the light on at night buy nvidia buy something. >> you are able to say that now where it has been a strong year for stocks we didn't know that at the beginning. i'll take the 5% >> take it you get to go to dinner at the end of the year. take in a movie. bring the kids let's talk about jay powell. powell affirmed more interest rate increases and this is where we were going with this before

in remarks to the committee, powell said nearly all fmoc participants say it is appropriate to raise further by the end of the year. powell will testify in front of the senate banking committee this morning that goes to the issues around bostic being a little bit more -- >> i don't know if you describe as hawkish or dovish he doesn't want to raise rates further. that is dovish on the other hand, if you are not lowering rates for a year and a half, that is hawkish. >> uk inflation at core 7.5%. >> back to the issue of the political question >> i know. i said that to somebody yesterday. i conceded that. >> jared bernstein several data points of note on the squawk planner.

that comes up at 8:30. existing home sales at 10:00 quarterly results from darden restaurants. the bank of england interest rate decision is expected today at 7:00 a.m. eastern time. the president and first lady are hosting prime minister modi. we have tim cook as well as others from the tech world senator mark warner will join us in the 8:00 hour he is the chair of the senate india caucus microsoft will meet with the ftc today and arguing the inje injection -- injunction.

the ftc sued amazon yesterday accusing the retailer of intentionally do youping mils of customers to signing up for the prime program and sabotaging attempts to cancel ftc said amazon made it difficult to buy items on its site without prime a button that instructed users to complete transaction did not clearly state they were agreeing to join prime for a subscription the complaint said the cancellation process is difficult to navigate and designed to deter consumers from ending the prime subscription. >> they described it as an illiad the odyssey that takes forever you have to know where to click. one thing is in bold the real thing is not in bold. it is 100 different steps.

>> i never tried to cancel i like it. >> it is terrible. if true, terrible they were doing this the other thing is they were selling prime video. we had a discussion about the idea that some people do watch the prime video. you are not a watcher. >> i am. i do watch prime video i got prime before because i liked everything else. >> some are buying prime video for just video one allegation is you think you are going to buy prime video, but they are upselling you to prime because you can't tell the difference between the two look, these things -- this is such a good company. such a good company. so many good things. they should not do these things. this is low brow stuff >> i thought the same thing. >> if it is true, it shouldn't be the case. >> the only way to watch the yankees was on amazon. i did not go there

i watched a different game. >> i watch prime video for free. >> what i am doing lately is the ads -- the x doesn't help you. it takes you where it wants you to go. i don't want it there. i'm doing something. i hit the x, get rid of it it takes me to where they want me to go try again. >> the x is so tiny, it is impossible to get on it. >> back to the thing again and again. back to where they want me to go this is not good >> are you going to get the ftc on that one? >> it is part of the same thing. >> this is much worse. they are charging people $200. >> they planned it you know they did it they created that maze >> the columbia record deal.

how many for $1? you could never end it >> and one, they suggested to change the policy. it is easier to quit the real question is whether there is actual evidence they say there is evidence internally inside aemazon of how to make it harder. >> that would be bad >> that's terrible. >> i know. >> it is just petty stuff. >> i know. we will talk about the google accusations it is making and charging some competitors. when whene come back, we wil talk about the strategy and markets. nasdaq down 45 s&p down 10. in the next hour, barry sternlicht blasting the fed decision he will join us at 7:00 a.m.

eastern ime. you are watching "squawk box" and this is cnbc at pnc bank, you can find us in big cities and small towns across the us, where our focus is to always support the people who live and work there. because you call these communities home, and we do too. pnc bank. you know doug, ever since switching to workday you've been a real rock star. rock star? what do you know about rock stars? billy idol? i mean where's the skin-tight leather? my shoes are leather. where's the unnecessary zippers? that thing! billy, rock star is just how doug feels when he uses workday. thanks, rory. i'll show you rock star! be a finance and hr rock star. workday. for a changing world. billy idol just stole your golf cart!

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time for the squawk picks. kari firestone is with us. she is a cnbc contributor. kari, before we get to the picks, let's look around at where we stand right now with the market valuations. you have been positive since

before the rally started last fall you have ridden this thing thinking this was a good time for the markets to rally what do you think given the appreciation we have seen to this point >> if you look at the market overall, the s&p is up 14% the top seven names in the s&p were up 90% as of two days ago 90%. the rest of the market up 5.5% 90% is a lot of appreciation we felt it makes sense if the market pauses, meaning those big cap names pause or come down, and the rest of the market comes up it was starting to do that we have seen a bit of broadening to other sectors small caps performed large cap that would be healthy for the market you cannot live on the back of individ nvidia and tesla and a few other names. we began to count a.i. on

conference calls i got to 70 on one call and said this is crazy. everybody is attributeing a.i. t the present and future that is too much >> if you have stocks in other categories, you see opportunities. let's talk about the picks this time why amazon >> >> amazon is the same price before the pandemic. what we noticed is there is a lot more cost cutting and margin potential. people keep using amazon they are gaining market share in overall spending we think the slowdown in the cloud business was an contributing to -- was attributing to the slowdown. i know it is not a cheap stock there is potential and the laggard relative to the other names within the consumer

discretionary and tech in general. >> what about adobe? they are coming up against tougher comps. >> adobe is a terrible under performer last year. with w we bought when it cwas down 25% maybe it needs to pause. >> that is because the a.i. is amazing. >> if you look at photoshop and illustrator, yes, it is really very good. the market leader. they are gaining traction. think about digital advertising. their business is starting to grow although they are in the slump, we see great potential for the next couple years. >> new a.i.? we had barry on yesterday about waze is adobe different now it has always been a.i >> sure.

>> what is the new stuff >> the the tools they now have, they can take a picture of you and put kari literally next to you. we can say with a painting next to you and say do it it would do it and look basically perfect. >> instantly >> that is mind boggling. >> scary >> in terms of what with you can trick people >> you put kari next to me or epstein next to me i prefer kari. >> i prefer you. >> i don't want anyone next to me if they are not next to me. >> they can clean up the background there are things you could do. >> that are not malicious. >> it is concerning. >> people go -- >> a hair may be out of place that you would like fixed. >> not if there is a mirror around >> kari, carmax. >> they will report today. earnings will be down 50%.

the used car business was terrible in the last two years no one could buy a new car and they were not selling their used cars the market is starting to improve. you can begin to buy about a new car. i just bought a new car. it was impossible last year. i sold my former car that's going to help the market. they are better online and at the sites than competitors we think that they will start to show improvement in earnings the stock has been acting b better we think there is a 50% move from there. >> electric? >> a hybrid. i did. electric >>prius is a cool looking car. didn't take much they look better. >> you have two people in the family with electric cars and everybody needs to desperately plug in. everybody is fighting for the charging port. >> just like a phone

>> yes >> it is easier for a phone. kari firestone, thank you. coming up when we return, we dig into the backlash by consumers over the company's pride display. and later, rick scott will be here tubalk about the inflato and economy and more "squawk box" rolls on. >> announcer: squawk picks is sponsored by wisdomtree of the t -- wisdomtree the modern alpha pioneer this is the all new, all electric lucid air. a car that goes as far as it does fast. as sleek as it is... spacious. as smart... as it is beautiful.

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welcome back to "squawk box. target and kohl's and petsmart

are under fire over the pride campaigns o s campaigns. 40 corporations and others have signed agreement over harassment of the gay community joining us is sara of the we are g -- sara we are glad to see you there is an amazing backlash taking place in the country with budweiser being the most prom prominent. what do you think is happening here >> good morning. thank you for having me. i think we need to reframe this and the headline got away from us on this one companies that did back down to bullies actually saw this escalate those companies, hundreds of companies running pride campaigns, and many companies that stood up to the extremist

bullies and did not see any problems they didn't back down. i think we're talking about like north face and nike and walmart. cracker barrel, nascar the sesame street sawing bullies coming for them and stood their ground what we do know -- >> you think the problem is budweiser stepped away you think the problem was that target sort of backed down that was the issue >> yeah. you might as well be in the school yard. as soon as the bully comes to you and you back down, you give them more room if you stand your ground and say you will not bully me. these are our values and values we he stand with, then you go some place else. that changes the game. we have seen it with the corporations it is absolutely from them backing down if you give in to extremists and

these folks used images of violence and threats of violence against these folks. >> look, if you are working at budweiser and bud light specifically that business down 28.6% that is the figure that dropped in the aftermath of the campaign we could debate if the campaign was a good campaign or a bad campaign, but you are saying you think that drop was a function of them walking away or stepping back >> absolutely. if you look at lgbtq+ folks, our community and our allies talk with our dollars we don't want to be in the way of or supporting a san company t did not support us when the going got stuff. >> you think sales dropped because people in the lgbtq+ are

boycotting bud light >> absolutely. i think we will see the same with target. i can't tell you how many people say i'm not drinking bud light lgbtq bars stopped serving it of t the -- it. you look at the people online, it is a small minority of people it is math, honestly we are going into the market to test it and see where the loss is coming to con firm the theory if you look at it in dollars and cents, if 74% of americans believe companies should have pride campaigns and pride merchandise and twice and likely to shop from them, the numbers are not moving out i think it is actually the other way around. >> sarah kate, when they moved

the merchandise, they said they were concerned because employees in the stores were being harassed and intimidated and real concerns of their safety. >> safety is a real concern. you know, when i was on meeting with them, welcome to lgbtq+ in america today. we are all concerned for our safety right now with these extremists i think we saw the biden administration up the level of fbi involvement for the lgbtq+ community and homeland security. i remember that they were being threatened when mask wearing was mandatory and there was a lot of violence threatened against these folks. they didn't back down. what they did was they increased security and increased the way they handle it and trained folks on the ground. there were other ways to manage this that would have been

proactive. >> sarah kate, have you spoken with target and the folks at bud light and others about this? what is the reaction you get when you make the case that you just made to our audience about what is happening here >> i think my feeling is they may splits decisions they weren't seeing the culture we were living in. we have been seeing this as a community. add glaad, we -- at glaad, we tracked over 170 events of violence in less than a year we know the culture we're living in i don't think these folks knew and they moved quickly without thinking it all through. they gave in to bullies at the end of the day when you give in to bullies -- >> you have not succeeded in turning them around. i don't see them saying we made a mistake. in fact, most of them seem to

say this was a lesson to them not to step into political controversy. what i keep hearing privately from ceos is look at what happened over there in this ice t -- instance we have to be careful of how we support and what we do i'm curious about the message and what it will ultimately be. >> i want to see htwo things here me and my life are not political. they have been pollpoliticized y the politicians. i think there has been a chilling effect. that is why we were very quickly able to get all of the folks to sign on to the letter. i will say, though, the future

is changing. if you want employees who want to work at your companies and consumers who want to buy your product, you need to be inclusive. it is a matter of fact and all in the numbers gallup poll of gen z is lgbtq. our allies are loyal i think it has had a chilling effect i don't disagree however, the real winners here are those that stood up and those who are sitting under their defsks, there will be a price for that. >> sarah kate, thank you talk to you soon coming up, we will talk to former governor deval patrick and former senator judd gregg

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good morning welcome back to "squawk box" here at the nasdaq market site in times square. time for the squawk stack. the market indicators we are watching dow futures. look at where we are right now we are down a little bit the 10-year note 3.758. wti crude. bitcoin is over $30,000, joe. high profile ceos like tim cook and satya nard della will i

the white house state dinner and narendra modi's visit. they will cultivate partnerships let's bring in deval patrick and now professor of practice and co-director -- i'm not supposed to use the "h" word, deval tip to harvard students. don't gratuitously drop the "h" bomb that's in the wall street journal. you don't want people saying i went to harvard. it gets old. judd gregg, former senator are you allowed to use the "d" word >> let's not do this on

primetime. >> don't forget, everybody in massachusetts -- just raised taxes. >> throwing down deval you knew that right from the start. >> glad to have yyou part of it >> i bet we can -- we can in a minute, guys, talk about the political atmosphere it's so frustrating. both of you, deval and judd, we have two candidates and nobody is thrilled about either just the sniping and an u-- ugh i was around for clinton deval? >> it feels discouraging i'm a democrat i don't think you have to hate republicans to be a good democrat the notion your party is your identity rather than the

framework within which you work politically feels to me as a new inflammation in the political body politic most people understand no one party has a corner on all of the best ideas you have to be willing to be firm in your own convictions, but humble about the possibility somebody else, from some other party, may have a different point of view. that tone and approach to politics is something that judd understands. i don't think it is something you see in the performative nature of washington, d.c. politics today >> judd, you have -- i wouldn't say new hampshire policy i know how you feel about things you cross the aisle a lot. you have a lot of friends.

they keep putting india down there. we have to talk about that eventually >> i think this is a hugely important issue, joe i think deval hit the nail on the head you don't have to personalize pol politics you can't get things done unless you cross the aisle. almost every issue that you confront of importance in society is complex and doesn't have a simple answer you have to work across the aislesuccessful. i think if you are a former governor, you understand this rather than being a legislator when i was in the senate, there were 12 or 15 people and it was obvious we wanted to get things done and not shout people are there to shout and not get things done today. >> correct me if i'm wrong, governors do legislate i don't think legislators legislate? do they, deval >> governors have to get things done

if you have a problem in the morning, you have to have it solved by the afternoon or evening or you are in trouble. legislators don't have any accountability >> that's right. the executive role is different. you have to make things happen you get to make things happen by, you know, widening the net, as it were widening the circle tof folks yu bring in whether they are your party or not or in government or not. the idea of collaborative problem solving is now taught in many business schools as a modern day skill and indicator of success i think that has been part of being a successful public executive for a long, long time. >> the real problem, joe, if you get to the essence of it, a disproportionate voice has been given to both parties. the conspiracy theorists and it

is driven by social media. if you need to reach a compromise on something and deal with a compleplex issue like sol security, you cannot deal with it because you are overwhelmed by social media language we have to put the genie back in the bottle we have to figure out how to govern from the center and not from the fringe. >> can we agree that bilateral relations with india now have become more important? >> it is critical. >> great trading partner and friend in lieu of what is happening with china and russia? >> i think we have to start with a simple fact. you take india and china

2.5 billion people those are the people we want to do business with those are the people our companies want to sell to and we have to recognize they have a capital resource that is infinite compared to ourours engaging is critical india is a democracy and has rule of law. it has an advantage. >> china deval? >> i agree with that not just the size of the market, but strategic position geographically makes india incredibly important its human rights record is a problem for us you don't get to evngage in thoe problems unless you talk to people i think modi's visit is about china. it is about strengthening the relationship with india as part of the chess move as we deal with an increasingly fraught

relationship with china. >> gentlemen, i was giving you an opening with rule of law. i thought we had a couple of rules of law at this point >> i'm not going -- you may have a point, joe i can't understand why you didn't get the invitation. i know it is in the mail i was told it was in the mail. sdpl >> i hear the food is pretty good the black tie all the time >> isn't that how you dress for dinner every night >> i'm embarrassed i still have the clip-on if i learned how to tie a b bowtie -- >> you can't get a clip-on through the metal detector >> who is the guest we had who always wore a bowtie >> patrick >> i have beautiful bowties. >> you never tied it these gentlemen could wear a bowtie both of them in ties

>> a rarity. when we come back, elon musk and mark zuckerberg trading barbs on social media about a potential cage match in vegas. we have the details next "squawk box" continues after this >> announcer: squawk stack is sponsored by mass mutual protecting what matters most since 1851 work? i don't know. you could sprain your ankle, throw out your back. get hit by a school bus. or a regular bus. get kicked by a horse. fall off a ladder. bathtub mishap. polio. boating accident. stuck by a fork. rabies. wolves. scurvy. talk to us about disability income insurance today. feel comfortable about tomorrow. massmutual. what if you could make analyzing a big bank's data... no big deal? go on... well, what if you partner with ibm and red hat, use a hybrid cloud solution to connect data across clouds, then analyze all that data with watson. okay, but this needs to meet our...

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top tech ceos are ready to

rumble after elon musk tweeted he would be up for a cage fight with mark zuckerberg meta ceo shot back say send me location musk responsibded to that with e vegas octagon. the online sparring comes after musk taunted zuckerberg on tweets and zuckerberg took a shot at user numbers you know zuckerberg has been training in jujitsu for a year >> somebody said he got pinned >> a controversy if he had actually -- >> he won medals he was doing the rop-a-dope. >> the referee was quoted saying he lost consciousness and zuckerberg said that's not true.

he was making these grunting or snoring sounds then -- they corrected the story. they went back and forth crazy. >> he may have been rebooting. when we come back, the latest propublica piece of the the secret irs files we'll discuss it next after this >> announcer: currency check is sponsored by interactive brokers. the best informed brokers choose interactive brokers.

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welcome back to "squawk box. pro publica series has a new entry this morning called "the biotech edge: how executives and well connected investors make exquisitely timed trades in healthcare stocks. for more, we're joined by one of the authors. good morning nice to see you again.

>> good morning. thank you for having me. >> another fascinating piece in the series, in the biotech world. explain to the audience what you found and what you're seeing and the real question is whether you think it is illegal. >> yeah, so for the first time ever we have been able to review personal stock trading data for thousands of the wealthiest people in the country. as you said, we previously revealed that executives across sectors are trading and their competitors and partners with remarkable timing. today's story focuses on biotech and other relatively small healthcare firms we found dozens of incredibly well timed trades, including by individuals who are competing against those companies, partnering with those companies or have other personal ties. >> and in some cases you have them making investments in companies that they know they're about to do a deal with. >> yeah, so, if you remember a couple years ago the s.e.c. made

headlines, you know, their first shadow insider trading case. and an employee at the company learned his employer was about to be acquired and he didn't buy options in his own company, he bought options in a competitor, that also rose on the news and what our data shows is that it wasn't just this midlevel guy who was trading in competitors the ceo of the company was trading millions in such firms and, you know, one example on the very same day that that ceo finalized that acquisition of a niche type of cancer drug, he bought about $8 million of stock in a second company that also produced the parp inhibitor. experts said the acquisition of one parp inhibitor will affect the makers of everyone in that small niche. and so the stock did go up. >> the question is, you found this, you found this through irs

tax data is this available to the s.e.c.? and to the extent it is, why do you think they have not acted? >> so we have -- first of all, the s.e.c. does not have access to the kind of data we do through this trove of irs data they do have, you know, pretty comprehensive data they could look at these trades. we have gone to them and we have asked about specific cases they have not commented. more importantly, we have asked them about their enforcement priorities and whether they're interested in focusing on this kind of trading. executives trading in partners, trading in competitors they have not commented. so we don't know >> from a policy perspective, to the extent we all care about the credibility of the markets, do you think there needs to be a new -- either different enforcement in policing, different policies, so corporate leaders can't be making these types of investments it appears on the face of it,

some of it is plainly illegal. >> yeah, well, we have talked to former s.e.c. folks, former doj folks, they're disturbed by what we're finding. they say that these trades risk running afoul of the law and they're concerned that if this kind of trading goes unchecked, unscrutinized by the s.e.c. and we looked at dozens of trades now and have no indication that the s.e.c. looked at any of them, that public faith in the fairness of the markets is going to be undermined. >> how about the -- fair to say civil case could be brought by some shareholders, either private companies or public companies, to say you misappropriated profits that ultimately should either not have existed or gone to us >> look, i mean, you know, that's a question for someone else, but i do think that, you know, shareholders in these companies, people on the other sides of these trades, you know, they -- i don't think they'll be

thrilled with this news. >> robert, we got to go. i got to ask you, i don't know if you have a view, this alito op-ed coming out ahead of your own article where he's defending himself, i know it is not yours, but you have a perspective >> you know, as my colleague who wrote that story said, you know, we welcome substantive response in all forms so, i'm just glad he responded >> but i guess there is a big question about either front running the article, should the journal have published the piece, did alito have some kind -- responsibility to respond to you first i think there has been a lot of back and forth about it. >> i was actually -- i was hoping you would ask me about the zuck/musk cage match, but -- >> do you a view on that we'll take that too. >> i think i'm going zuck. >> robert, thank you appreciate it. >> thank you for having me coming up, barry sternlicht

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u.s./china ties, but the plans for a joint military base in cuba could make things worse senator rick scott will join us with his reaction. plus, the latest interest rate decision from the bank of england. they are raising rates got your premarket movers just seconds away as the second hour of "squawk box" begins right now. good morning welcome back to "squawk box" right here on cnbc live at the nasdaq market site in times square. i'm andrew ross sorkin with becky quick and joe kernen 100 points down on the dow s&p 500 looking to open lower as well, off about 13 points. nasdaq down 62 points. treasury yields right about now, we're going to be hearing from jay powell later today, who is going to be in front of congress, but right now the ten-year note, 7.676

crypto, we have been talking about it all morning, now over 30,000 on bitcoin, 30,169, ether up as well, up about -- >> some breaking news from the bank of england. the boe announcing just now that it has raised rates by 50 basis points that's a surprise move it was expected to only raise rates by 25 basis points that key rate now at 5%. the expectation was that the bank of england had been behind. you mentioned the inflation rate yesterday, joe, how it is above 7% there and what they're watching. >> rates were too low and -- rates were below us, but inflation was higher >> they're playing catch up and you're seeing it play out right now. take a look at the euro versus the dollar it is up slightly on this news pound's up too >> over to dom chu with a look at this morning's premarket movers. >> good morning, andrew. if you look overall right now, we'll start off with another

check on tesla shares, we checked on them yesterday. we'll add another downgrade into the mix. it is getting some attention on wall street. this time from morgan stanley's auto analyst adam jonas. shares of the electric vehiclemaker are down just about 3% to 4% right now, around 1.7 million shares of volume it follows up on yesterday's 5.5% drop. today, morgan stanley is cutting tesla to an equal weight from an overweight rating while raising the target price to 250 from 200 bucks. it is an acknowledgement of the massive rally that you have seen here over the course of the last couple of months here in tesla shares that thing -- that move is now made tesla fairly valued in their minds. they did, though, say that tesla still remains a must-own company in any electric vehicle portfolio. so, tesla shares down on that downgrade from adam jonas over at morgan stanley. also on the analyst front, shares of beer-brewing giant

anh anheuser, that stock upgraded from a buy to a hold it is more of a tactical call. they argue the stock is already reflecting the downside given its challenges in the u.s. market while giving no credit for a potential recovery in the brands their research and data suggests consumers may return to the bud light brand, despite current sales dropoff. those shares are up 1.5% premarket. we'll end on an earnings mover the red hot housing sector continues to be a focus. shares of kb home today have gone from after hours gains to a 1.5% loss right now on thin trading. this is despite a solid beat for both profits and revenues. it also offered a more upbeat forecast for full year revenues. but this stock has been on a blistering run, andrew i'm showing you year to date at 60% gains right now. pretty much been up the entire year andrew, the shares have doubled since last year on a one-year basis. so, again, maybe just a little bit of that profit taking this

time around for kb homes >> overpriced at this point? >> i'm not suggesting it is overpriced what i am saying is that there has been a lot of expectation built into this and a lot of these home builders like lennar and pulte have been doing well these days maybe a little pause for kb home shares. >> dom chu, all the market movers thanks our next guest says he's been selected with redeploying capital and trimming some of the winners like meta, nvidia and oracle for more on the current state of the markets, we're joined by sarat sethi, dcla managing partner and portfolio manager and cnbc contributor i was racking my brain, sarat, bullish or bearish, and realized what a genius you are because i have no idea >> well, i would say that, you know, we have a diversified portfolio and to the point you made, we're taking some money off the table on some of the

winners. they have done really well and it is time to kind of look at some of the fallen angels or stocks that are going to do well we're in a rising rate environment. the economy is slowing the fed is causing the economy to slow. so i want to be in areas that have not participated in this rally. dom was talking about the home builders look at some of the stocks in the technology world, great companies. i still want to own them but when you got 50 to 100% gainers in three to six months, it is just wise as a fiduciary to diversify your portfolio. cvs is trading at eight times earnings j&j, solid earnings international. we're looking at companies that would benefit from a lower dollar as rates are increasing, the rest of the world faster than we are here we want to benefit from those type of companies as well. i think the diversified approach here and looking at -- sorry, joe? >> no, we have got some crazy

sounds >> it sounds awful >> sounds effects for you. >> i said i wish i hadn't eaten that oh sarat, that's -- that's a crazy sound. >> it is not me. >> it is not i can't -- i don't know. hey, sarat, do you do asset allocation do you do 60/30/10 are you always 100% invested i'm trying to get an idea if you miss this entire rally, whether you were at a 5 in terms of bullishness, at a 10 are you surprised that we got 35% in the nasdaq right now? did you miss it? did you fully participate? >> we're invested according to the clients' allocation. so, it is not that we'll miss or try and time it, it is based on a client's objective if you're in equities, you're going to be fully invested

it is if you had new capital, that's where it gets selected. we first submitted in the rally, have you been overweight technology no but we have been -- we have been selective as to where we owe, so some of the stocks i mentioned, the oracles, nvidias, microsoft that we do own, it is just that i'm just more cautious and i don't want to chase some of these winners with new capital i want to actually diversify it and take some of the gains >> do you think, sarat, that we'll get another 50 basis points or are you no smarter than everybody else on the fed and we're waiting to see what happens? >> if you talk to the fed a few months ago, they wouldn't have expected where we were now i think we're going to get some more, at least one more. they're doing the smart thing, waiting to see how the data comes through, waiting for the lag effect but i do think that if rates keep where they are, which we think they are, we don't think they're going down in the next year, and that's where valuation is important so, a big part of the market

thinks rates are really going to drop in 12 months or 18, and that's propping up some of the more kind of speculative stocks. so it is where you want to be. look at cable companies like charter or comcast i think those have some value in there and some of the fallen angels and financials, look at morgan stanley that has come down, but it is much more of a asset management, wealth management firm. >> you think that everybody joins in or do you think that the high flyers are just ai hype and other things have them totally extended >> joe, if the market goes up from here or even stays within 5%, the rest of the markethas to come with it. the breadth of the market is so narrow with the 7 to 10 stocks leading, we just don't see the market going up unless the other -- as i say, the generals that participated, the soldiers

haven't done anything. if we don't get broad participation, i think the market does not -- cannot go up from here because some of the valuations of some of the companies, great companies, you just can't keep on going up, especially if the economy is going down or earnings are going to come down slowly and the fed is still raising rates >> right do you think, sarat, as your recession probabilities for the next 2023, has that changed for 2024 >> i think if we raise rates more than 50, the recession is probably higher. but i don't think it is going to be a bad recession it is going to be a light recession. and that's where the opportunity is going to be so, i think you can still be invested, just according to your allocation, joe, that's the one thing we always talk to clients about, say, make sure you're invested when you run your risk profile and where there are parts of the market that are much more volatile than we have seen over the last couple of years, a little similar to where

we were in covid and people were starting to chase some of the stocks because -- i think there is more risk in the market, especially in select areas >> all right, sarat, thank you >> thank you, joe. >> appreciate it you worked through all that. do these people not know there is a tv show it is 7:00 a.m obviously not a union shop here with -- it's -- what was that? >> i think it was a drill. it sounded luike a drill -- >> it is 7:00 a.m. i was going to tell you, be becky -- >> we're living with a lot of noise here. >> we are. >> just so you know, joe did it. when we come back, rick scott on national security concerns as china and cuba have plans for a possible military training facility just 90 miles from u.s. soil. and starwood capital's barry sternlicht joins us for an extended interview we'll talk markets, inflation,

and much more. "squawk box" will be right back.

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billion. the olive garden parent increasing its quarterly dividend by 8.3% the company's chairman announcing his retirement. all of this happening at the same time and that stock off now. china plans to establish a new military training facility in cuba. our next guest is calling out president biden for what he says is continued appeasement of china president xi joining us now is florida senator rick scott senator, welcome obviously people on both sides of the aisle very concerned about what is happening with china. i know you're saying that you think president biden is appeasing him, but if you look at a lot of the things that the biden administration has done, i mean, the politico called it a sea change in terms of biden reversing decades of trade policy by cracking down on their access to things like sensitive semiconductors saying that that is a much bigger issue for the

chinese than any of the tariffs that president trump put on president xi why don't you lay out why you think they're being soft, why you think president biden is being soft on china? >> first, i think we all have to wake up to the chinese government has decided to be our enemy. so, what i'm worried about now is, you know, we had spy balloon come across the country. and we basically did nothing about that we watched what china's done, stealing our technology, basically our government has done almost nothing on that. now we have, you know, a spy station, are they going to have chinese troops there, are we going to have another missile crisis like we had in the '60s with russia? i think we have to be very clear, one, the american public has to figure out we have to start, you know, not buying things from china. are we going to stop after they invade taiwan? they're threatening taiwan xi told his citizens toprepare for war. we have got to start taking this seriously. our president needs to be very

aggressive at getting the public ready and do everything they can to not put ourselves at -- they're not our friend. >> no argument that there are concerns about what china has been doing and i think both sides of the aisle obviously recognize that senator scott what are you suggesting that we cut off all business with china, companies like apple and tesla and others that they can no longer manufacture there, are you saying we should be preparing for a ground war over taiwan >> well, what you hope is that it never happens you have to -- listen to what they're saying they say and they're going to invade taiwan. that's what they're saying they have said to their systems, be prepared for war. i think what we have to do is put ourselves in a position, don't be dependent on china for anything our drugs, anything at all, we should not be dependent on them. every american is part of this we don't have to buy chinese products and to the extent we're buying them now, how do we get those

products made in america, or in another ally so we have got to -- we got to wake up and understand, they're preparing for war against us it is not what we're doing and so you do it every day you don't do business with your enemy. they decided they have decided, we decided, they decided to be our enemy. >> so would you tell american companies they can no longer do business there >> i think the american public should demand it i think -- i had a bill that amazon basically tried to block the whole time i've been up here, just to have company of origin disclosure on anything you buy online americans want to buy american products, but you can go on apple and see if -- go on amazon and see if you can figure it out. what we have got to do is understand, this is america, we want american companies to do well, we want american citizens to do well, and don't keep appeasing them like, what did we get out of blinken going to china are they going to not have this spy station? >> i think -- i think the hope was we could re-establish at least military communications,

which were cut off after nancy pelosi visited taiwan last august i think that's concerning. even during the depth of the cold war, we did have military communications with the soviet union. i don't think anybody wants to be saying, yes, let's have business as usual, let's go back to a way where nobody is looking, nobody is paying attention. but the idea of cutting them off cold turkey when there are so many issues that we need to be discussing with them, need to make sure we have open channels of communication, i think that's a little different than completely backing out. >> oh, no, i agree with you. i think we ought to have conversations with them. but let's live in reality. they're not changing i'm in the armed services committee, we're going through the national defense authorization act and everything is about how do we even stay up with china now with the military they're building so -- >> tell me how you're going to balance this issue i understand the position you

have, but what do you tell, for example, bob iger, who runs disney, one of the biggest employers, if not the largest employer in your state, for example, has a big operation in china as you know. what do you tell john donahoe the ceo of nike? huge manufacturing, huge sales in china what do you tell tim cook of apple? how would you suggest they go about doing this at the same time you say you don't want to damage americans and the economic ramifications that would clearly take place here in this country >> well, what you do is you say, open your eyes listen to the rhetoric listen to what they're saying. trust what they're saying, they believe. so what are you going to do when they invade taiwan do you think they're going to -- are you just going to do business as usual when they're invading an ally i doubt it i think the american public is going to expect the same thing as they expected with american

companies when they -- russia invaded ukraine. so i think what you have to say to yourself is, the more they see that it is bad for china, all right, to invade taiwan, to build a military, and the less money they have because they're selling less products to america, there is a greater chance they'll come around and do the right thing this appeasement where we act like, oh, gosh, they're going to get better, they're not. i would love it if they got better they're not getting better >> but the choice is to do it preemptively or after the fact the question is what kind of message you would send by the way, if everybody left, maybe they would say, screw it, why -- we have no incentive to do anything, except to do exactly what we want. >> fbi director christopher wray, he said, look, they're out to replace you in china. they're stealing everything you have, and they -- they're out to replace you. so, we all have to understand, we are going down a path of

watching an enemy take our money, take our values, our trade secrets and we have to wake up to it. it is not going to happen overnight. i think there is a greater chance if we wake up now and we say what you're doing is wrong, we're not going to put up with spy balloons, spy stations and eventually troops on -- close to our border, we're not going to put up with this and you educate the american public, the american public is the key here. if china can't afford to not sell products to this country. they cannot afford it. it will decimate their economy and so we, by buying their stuff, give their government more money to be able to destroy our way of life. >> senator scott, thank you for raising these concerns with us and talking about the bill of origin interesting idea we appreciate your time. good to see you. >> have a great day. bye-bye. >> crazy, the but the more i listen to him -- what will happen if they invade taiwan

>> we have been saying that -- whether the ukraine situation is a dress rehearsal. >> a semiconductor there. >> maybe he's right that they need us very badly. >> the truth is we need them too. >> at this point -- >> making these moves, they're happening, that's why we're trying to build chip manufacturers here, why they're meeting with narendra mody tonight in the white house it doesn't happen overnight. need to do these things slowly and that's why when you start talking about decoupling, it drives china crazy >> but maybe it is not a done deal if we do preemptively do something. they sit back and say -- >> let's say you do this right this second. >> then they say, what do we got to lose? >> not only that, probably do shave 25% easily off the market

caps of disney, apple. >> that's the real issue that's the real issue. >> follow the money. coming up, starwood capital barry sternlicht joins us from the feds to -- from the fed to the markets -- from the fed to the markets, we're going to cover it all check out the futures right now. triple digit losses in the dow we'll be right back. time now for today's aflac trivia question. who is credited with creating the spike as a post-touchdown celebration? the sw wn bcanerhecn's "squawk box" continues now there's a hole in your defense; look at the size of that- gaaaaaaaaaaaap!!! is that a goat?! you talkin' about me? gaaaaaaaaaaaap!!! i think this goat is saying “gap.” must be talking about the expenses health insurance doesn't cover. so who's talking about the money aflac pays to help close that gap? gaaaaaaaaaaaap!!! aflac! aflac! gaaaaaaaaaaaap!!! it's about to go down, baby!

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fed chair jay powell says the inflation fight has a long way to go. our next guest is asking at what cost joining us is barry sternlicht, the chairman and ceo of starwood capital and the chairman of starwood property trust, which is the largest commercial mortgage reit in the united states good to see you. it has been a while since we talked about these things. you have been opposed to the fed

raising for quite some time because of the damage you think it is doing. what do you think about the latest comments from jay powell? >> thanks, good morning, guys. i haven't been opposed to the raise in rates i think he was late in the pace of the raise is what i was opposed to i thought i was very pleased he paused but there is -- we're mutual golf fans and jim nance says this was a weekend like no other. this is a economic recession like no other. nobody has seen anything like this this doesn't make any sense what is happening the fastest contraction in history and you're looking for signs of the economy is slowing down and why is it not slowing down i really tried to -- my thesis in college was -- a statement, there are lies, damn lies and then statistics. you have to boil down -- listen to the economists. i'm not an economist i come on the show and i want to go a little deeper on the data and show you what is actually happening because it is fascinating. let's start with the employment market >> we have some charts that we're going to show as we go through this why don't we call up the first

one? >> the employment market i think we had like 339,000 jobs in may. i kind of said this in the last appearance that in the '07, '08 recession, two industries actually gained jobs and you can see last month, it was leading category of growth, almost 100,000 jobs. in the last 12 months, that's been a million jobs. healthcare and education is not sensitive to interest rates. nobody is not getting sick because he's going to take short rates to six he can't impact that government, that is local government that's been almost half a million jobs in the last 12 months that's going to -- should reverse. what governments are doing is catching up -- it is basically the municipalities and states, not the federal government, actually and so he can't really impact that the last category is probably one of the most important to me, the leisure and hospitality, that's been 850,000 jobs in 12 months last month it was a third highest category, fourth highest category that's hotels and also restaurants.

and you know we have no workers. like we still have no workers. we had a million and a half workers in 2019. we had a million last year so, we're -- every month he's going -- we're gaining 50, 60, 70, average, 77,000 jobs a month in that category alone that's going to fill we saw the backlog of 350,000 empty jobs you're going to see -- he's got a tidal wave coming out. if we kept that chart up, manufacturing finally went negative last month. it is the last category. and we took out, like, 17 categories, financial activities, utilities, information, retail trade, wholesale trade, which are basically flat >> so -- >> so everything else is flat and this is the total gain he's trying to kill the labor force with interest rates that is hard structurally to kill with just interest rates. >> we can back off the chart now. i think that's -- that's the reason we have not seen the job market slow. so stubborn. >> he's measuring success -- he wants to increase or lower

employment but -- >> i think he thinks that's the only way he can actually get to a point where you slow -- wage growth down and slow inflation. >> let's talk about the other problem, i'm sorry for the situation, but here is the federal government spending out of control look at spending, which is called discretionary spending. >> yeah. >> and many people may not realize we're spending more money this year than we did the last two pandemic years. and joe would like this, right >> i would like it >> fiscal discipline but it is so amusing they have a discussion of huge argument about the debt ceiling when they're spending -- they agreed to spend -- that's up at 100 billion in defense the rest of it is other stuff. and that -- so you have the federal government, which is the largest -- who spends $1.7 tri trillion that's not changing with interest rates let's go pull back on spending, this is committed spending and i

think this -- you see the construction, it was up last month, like, wow that's probably federal spending on construction products and data -- a website you can go to. you can see where they're spending the trillion dollars of infrastructure money you got the federal government with the foot to the accelerator and the treasury trying to break it it doesn't feel like a real economy. he says the economy is strong. look at retail sales we have a slide for that so, retail sales are falling off a cliff. >> the argument has been that people are spending the money on services >> that's true but that should slow i think they'll slow we're beginning to see a topping out of the tail market, like prices not going up. >> you came on, i went back to look, september 15th, 2022, we wrote a headline, the u.s. economy is braking hard. >> i was a little early. i didn't understand the strength of the consumer. i did not -- i think people are

employed and people are employed, they spend money. and they're not feeling like they're at risk of their job so i think today you see a stronger economy, but signs of weakness there are, you know -- spending on services. >> could you still be early is the question >> i think, like, you saw credit cards now, record credit card numbers, b of a said we reached the same levels of delinquencies, we're headed higher look at the last slide, inflation, i come on and talk about all the time it is such a bizarre number, which is rent growth a third of cpi in 42% of his pce. this is the biggest flaw in this inflation datia. he knows it, he talked about the lag, but the blue line is basically what has happened to rents. and the green -- the top one, the green one isgoing down and the green line is what the fed is reporting and last month's number, this number went up housing equivalent went up from .4 to .6. it is an anomaly it was a really weird thing that happened with hotels. >> he talked about if you stripped it out, stripped out

that component of it, you would have seen a lower -- >> we'll see inflation lower than 3%. the question is he going to be happy with that? i hear 2%, i hear about credibility, they have credibility for jesus christ can i say that. >> who are the victims of the fed raising rates? who is really suffering? the federal government is at $32 trillion deficit we're the biggest -- we have to pay interest on $32 trillion at higher rates that number is $660 billion. 5% on 32 trillion is $1.6 trillion we're going to have to keep printing money to pay the interest expense second category regional banks you have said, i think things are not fine in the regional banks. he can say it all he wants but the government is basically giving an implied guarantee on the deposits so there is no run on the rest of the banks the banks are not in good shape, the regional banks they all have commercial real estate loans we can mark the securities to market -- >> janet yellen said she would

be interested in having some of them pair up, having them be -- >> look, only by the grace of god do some of the regional banks continue to walk basically any group of hedge funds can take one of them down any moment because they can't create liquidity and sell bonds at market and crystallize losses. we can't even look at the commercial real estate loans we can't figure out how close they are we know the victims of the rate increases are all fixed assets, bonds, real estate, infrastructure, anything that was a yield is worth less. >> jay powell's response will be look, we have to fight inflation because inflation hurts everyone, but particularly those at the lowest wrung. >> he's done a good job. inflation is coming down that's the whole point >> they're now focused far more on core than they are at headline inflation and that's -- >> it is coming his way. >> you think as long as they -- as long as they extend this pause and wait and see, which, by the way, is what rafael bostic said yesterday, he's

satisfied with where they have come, he would like to wait and see. on the other end, he says don't expect any relief anytime soon rates are not coming back down >> i hope -- i hope the fed doesn't have to lower rates as fast as i think they're going to have to lower rates. >> because of what it says about the economy? >> yeah. >> you think he made a mistake if we go back to september, do you think he made a mistake with all the rate increases that he's conducted since then back then, the view i think that you had was he should stop back in september. >> it was in the 4s, i think i think there is a huge lag, we all know it. the question is he didn't raise when he had to the fed was unanimous on rates lower longer we all positioned our books based on that. and all of a sudden we went to the moon and beyond on rates and very quickly i know he threw a hard brake on the economy. look at global trade, hina, th world was slowing. it is going to slow. deglobalization is bad for gdp growth he's got a different environment, different macro environment than he had before.

>> you're talking about -- spending, how much fiscal discipline we have or don't have i'm with you we don't i wonder how much of that really co do you think is the problem insofar as we're also talking about what is happening in england, for example, the uk, look in europe, in other parts of the world, the inflation rate there. and say to yourself, i mean -- >> england is partly brexit. >> maybe we have issues but totally different. >> no energy >> europe's going to come down they're going to see rates will come down. can't afford the rates and europe does not have -- never had the demographics the u.s. had. we're missing immigrants we're missing millions of immigrants we're missing from the restaurants and hotels that would free up the labor force a little bit we have to cure that the party, when i was in washington, they say we'll fix visas, but they don't do

anything they need to increase the labor force dramatically and we opened a hotel in hawaii, we don't have -- we can't find workers. we can't find workers. and can't get them into the country. so, i think powell at the end of the day, the increase in rates, he did his job, they should -- now we have to wait. i do think that the banking situation is more fragile. not the 26 big banks but the regional banks, which service these communities, which really work. if you want to open your burger king or laundromat or little restaurant, you're not going to jpmorgan they have this implied guarantee. but i think i am, as i might have mentioned last time, we own a lot oftreasuries we're waiting for the fallout. this doesn't feel real this feels like '07, the rally into '07-'08. >> people have pointed back to that, we thought -- >> i remember what that was like. >> we have had kevin warsh on

and he said, look, we all thought we were in the clear after bear stearns too we had a very fine summer when it came to the markets come fall, that's when -- >> look how thin the rally is. it is broadening out a little bit, but it is awfully thin and the stocks are not cheap now they can't all be winners of ai. so, look, it feels like to me i think we're -- we're deploying capital. we're buying things. we're beginning to see discretion, some cracks in the armor. we just bought a big portfolio of loans in europe the energy complex, there are loans to be made in that area that are kind of exciting because all these investors are pulling out of it and you're trying to lend against the existing reserves. there is interesting things to do the real estate markets in general are healthy, except for the u.s. office market and the u.s. office market in new york just passed 50% finally. i don't know what would happen to restaurants and theaters if

we were full in new york new york is really active. not like san francisco, which feels look a dead man walking. new york has a lot of activity going on and the youth are here you can't kill this city if you tried. they're trying hard. but i think the real estate complex, the apartments are -- that's interesting one thing i missed, we all missed, housing, how could this happen how could interest rates go from zero to five and housing is bananas. this is a weekend like no other, this is a recovery like no other. the housing market, he's creating a bigger deficit of homes. you have to rebound out of this, it could be inflationary you could see apartment rents climb again. i was with the head of fannie m mae and she said -- >> if you have an interest rate 2.5, 3%, you don't want to trade up. >> the head of fannie mae said that their actual growth is 1.5% the fed is almost at 9%.

that's almost -- they're almost the entire apartment market in the united states. they should talk to each other that would be helpful. but use her data don't use your 6,000 houses you surveyed apartments are fine. and probably will be fine. they have a balance sheet problem. the cost of debt is too high at least they have fannie and freddie to lend. hotels are solid now i'm worried that the first thing to go when we get a recession is travel slows this is a lot of leisure travel. logistics are good, solid. amazon is cutting back but everything else is good. u.s., only u.s. office and not every city, it is really just city by city, and the good buildings like one vanderbilt which is owned by -- >> what will drive home all your points, how will we see it, how will he go, holy moly, sternlicht was right all along what data point in the -- can happen in the next month >> you'll see the categories of the economy that lost jobs in

'07 and '08 will begin to turn around so, construction should go down. retail sales, which is 15 -- >> will it happen in the next month or will it raise again >> it won't happen >> he'll raise again >> several months. i hope he'll pause and look at the whole of the data. if you look deep in the data, you see problems he should listen some of my friends met with some of the regional governors and they talk about the real estate complex. and they're beginning to ask, which is good. the meeting just yesterday and they said to this gal, there is no problem, we don't see the problem. the problem is there we see the problems in the world in the real estate world we see people who have caps in place on a loan, they're not -- they don't have to cover 5% interest, but they're covering 2% and that loan matures, they can't refinance the loan. >> that's what i was going to ask you. you said something earlier, we all listened to the fed when they said they would keep rates low for a very long time we positioned our books as such. we positioned our books as such. and then rates went to the

middle has anybody been able to reposition are you stuck in those positions at these higher rates with what you're talking about when the loans mature, there is nothing you can do about it? >> there is going to be a lot of opportunity for rescue capital people will come in an assets with the wrong balance sheet. you try to find really good assets i think the office complex will look like retail the good malls are good. the bad malls are being razed for fields of hay or wheat but the good -- in new york state, they just killed govern hochul's 800,000 residential unit bill. it died on -- from both ends the democrats wanted you never to kick people out that weren't paying rent and the republicans didn't want to have an override of local zoning. so she got pummeled from both sides. >> are you friends with the mayor of miami >> yeah. >> do you like him >> i like him a lot. little early. >> backing him

>> yeah. >> backing him for president >> i'm backing a few people for president. >> bitcoin guy. >> i like glenn youngkin but he's not running >> you say you're backing a couple so who -- >> you're afraid to say, even though you like them >> nikki haley >> oh please. >> you asked me. >> you won't say it. >> i'm not sure trump or biden will wind up being the candidates >> right >> do you like desantis? >> if i go to the middle. >> you like chris christie he was sitting here earlier this week. >> some people like him. >> i like -- you know -- >> i thought if we're on the same side, i got a question. >> interesting guy look, we have this discussion about running a third party candidate. 49% of the country is now independent. it was 43% in 2020

ross perot -- when ross perot ran for office, you know what percent of the vote he got 19 >> was it 19 that's higher than i thought. >> the u.s. population was independent that year. >> now 49. they have no party i'm in the big middle. i have no party. we would love to have a candidate. i think they would win on the merits if they pulled -- >> christie is getting money from barry >> i'm sitting on the sidelines right now. mayor suarez is going to be a rising star. he's a real athlete and he's really -- you remember george bush's compassionate conservatism, he's a compassionate conservative. >> he loves bitcoin. >> marketing. >> he still loves it he's still talking aut ibot. >> nice to see you guys. >> nice to see you

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welcome back to "squawk box. a gallop survey, given the stock run that it's been on for the last 15 years, is it the right call all sides. >> yeah, but i'm actually going to tell you this time. >> are you like really really >> i really, really am and it's the call to ditch the old 40% bonds, 60% stocks, portfolio rule go with fewer bonds and more

stocks in stocks, the s&p 500 has returned about 700% since the lows of the financial crisis meanwhile interest rates have been low for most of that time opitime retail investors can also put more money into stocks these days because we've gotten a major upgrade. smart phones let you trade on the go as technology continues to redefine the stock market to artificial intelligence today, it just makes sense. in another time it made sense that investors would gradually shift into mostly bonds for capital preservation as they got older. now there's opportunity for risk i'm not saying there's no place for bonds. they just don't need to play as big a role as they used to >> we got interest rates higher

now, get the great wishes of our past guest doesn't that change the landscape? >> well, on the other hand, we are in a golden moment for bonds right now and investors need to pay attention. prime example, mun icipal bonds you're thinking what could be more boring than to build schools, roads and hospitals the distributions are often exempt from federal taxes. if you're in a high tax bracket. that's a big deal. say you can buy in at 4% that 4% shielded from federal taxes is like getting 7% on a cd plug it into a callculator online it checks out. if you can get that from lower risk bonds, why wouldn't you lock some of that in investors need to be able to walk and chew gum at the same

time look at your portfolio if you're looking to trade bonds -- if you're going to hold on to them, the yields are in a really special place right now >> joe kernen and i don't want to speak to him will tell you forget about equities, forget bonds, buy bitcoin >> i would buy bitcoin is 4% available? >> if you go into some muni bond fund, if you're willing to wade into closed end funds -- >> which sell below net asset value. >> not always. they don't always. >> i don't know. >> you have to check the leverage ratios on those, too. >> when i started as a stock broker, triple tax free. say you do a 4% 10 year, you'll double your money in what, 18 years? no, no, no

approximately, right >> right but tax equivalent yield on some of these -- if you can do 4 -- >> i would settle for 4 if it's triple tax free for part of your portfolio. >> what do you really think? >> i have been geeking out on muni bonds for months, just looking at as rates have risen people were talking about bond before >> there's also duration risk. forget the 4%. there may be a lot of longer paper there. if rates, like you think, really do go up a lot more, you're kind of in there. >> i'm not saying a lot more >> we never know, though >> they could go up another point or two over time >> you probably wouldn't want to be in -- >> we're going up a point or two in a month right now >> we had forced rate 75-point base increase.

you're right, it's a different world, muni. and the credit rate is not great. you can buy insurance. >> my grandfather used to say you got to buy munis he was living off munis. he was buying in the 80s, crazy rates. >> is this a sorkin that didn't like to pay taxes? >> i love you, i love you. >> all right >> check it out. go vote on the newsletter. point your phone at the screen >> have you bought aun >> we got to run "squawk box" will be right back.

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good morning futures pointing lower again in the news today fed chair jay powell going before the senate and the bank of england pulling the trigger on a big rate hike the owners of "the black swan" talk market. and president biden getting ready for a white house visit from prime minister of india and tesla shares are falling this morning a long-time bull downgrading the stock. we'll tell upyou why as the finl hour of "squawk box" begins right now.

good morning and welcome to "squawk box" here on cnbc, live from the nasdaq market site in times square joe kernen along with becky quick and andrew ross sorkin we're about where we were at the lows yesterday they improved a little going into the close yesterday but it hasn't been a great week so far after what was a really good week last week treasuries this morning, not a whole lot of things happening, 10-year at 3.74, 2-year 4.73 >> let's get you caught up on some of today's top business stories. long-time tesla bull adam jonas from morgan stanley downgrading the stock today from equal to

overweight it implies a more than 3% drop from yesterday's closing price in a note jonas says tesla still remains a must-own stock in any ev portfolio he says his team isn't trying to call the end of the tesla rally and it's the company's ability to benefit from a.i. advances that has brought the stock to a fair valuation he's calling it a fair valuation after the huge run you've seen over the last month or so. that stock this morning off by 3 1/2% to $2. 5 -- $251. the ftc is alleging microsoft intends to close a $69 billion deal no matter what regulators say the ceos of microsoft and activision and the head of xbox are expected to testify. and the lira weakens against the

dollar, jacking up interest rates by 650 basis points. that's right, 650 basis points the country's re-elected president erdogan embarking on a monetary policy. turkey lowered interest rates before the election, over a year and a half with erdogan saying it would help tackle inflation the bank of england raising interest rate business half a percentage point earlier this morning, following last week's hawkish pause. fed chair dave powell telling the house financial services yesterday that more hikes are likely to talk more about the rate hikes around the world, we go to the head of strategies at the bank of end. i don't know if you heard

sternlicht's comments. what do you think? >> i think the central banks are in a tough place there's no doubt inflation remains high, they were somewhat slow to come through you're now seeing a bit of differentiation across banks i think the feds are using a lot of language to talk the market out of expecting a very quick series of rate cuts after they've reached their total weight >> what do you think bostwick was saying yesterday >> i think he's introducing the idea there's a two-way risk in today's markets. >> there is a hot economy. at the same time if you look at the amount of hikes that have come through already, they've yet to fully hit the economy >> was he being hawkish or was he being dovish? >> i think he was pragmatic. a bank like the fed have got the opportunity to do that and i think the slowing of pace, a little bit more language, a little bit less action is giving the opportunity for them to manage -- >> what's your gamble through christmas and come 2024?

>> we think the fed will be up to 5 1/2 by christmas and hold pretty steadily in 2024. we think there's an elevated but not outsized risk of recession we think that the economy remains fairly strong. an inventory cycle to come we've got a reasonable amount of support. that probably leaves the fed on hold for quite some time think about the middle 90s they raised rapidly through '94. >> multi-asset strategy. invest in a lot of different assets >> we do we do. we have a wide opportunity set we have bonds, stocks. >> would you buy bonds now >> we do buy bonds now we think you've got a decent amount of coupon returns from bons you w bonds we have to think of carry versus cash you're getting a deecent pick up in carry earnings have held better than expected >> do you get 4% on tax free

right now? it's been offered to me. 4 would be pretty good can you get 4? >> we're taking mostly within the treasury, the corporate space -- >> you don't do munis? >> not so much in terms of our own portfolios downside protection were the worst to happen. if you've got duration in a portfolio in a multi-asset sense you have more opportunity to lean into risk on the other side, credit spreads, currency like the euro, stocks selectively, it allows you optionality on the portfolio >> you said selectively. who are you thinking about >> we don't go down to the single stock levels. >> single country? >> when it comes to region, interesting thing is we're looking outside. u.s. earnings cycle in terms of downgrades is probably towards the end of its cycle here in the u.s., but if we look at places like japan, bizarrely enough

despite today's news in the u.k. you can start to pick up some inexpensive healthy dividend streams, strong structural rerating in the case of japan. i think there's a lot to do in the equity complex if you look beyond the s&p 500 >> do you have a bitcoin take? >> we don't think about bitcoin since it's so volatile just a tiny amount of bitcoin and it will blow out your tracking budget. we tend to stick to financial assets where we know how they ought to behave in a portfolio >> like netflix. we heard the argument about comcast. uh-oh. comcast was 62 and went to 27. almost the same move that we're talking about. stocks are volatile. stocks on a two year, even on a one-year basis, they either double, get cut in half, get cut in third, they triple. i mean, they're volatile and it may not be great or full theory but it's what someone's

willing to pay on any given day. >> absolute ly that's what valuations are about. the viksx are telling you they' not as -- we have to take some level of predictability about where we think volatility is that decline in volatility we're seeing we expect in rate space actually allows us to build a much more balanced portfolio than we've been able do in 2022. >> you likes rates being higher. >> it gives you more optionality. >> for several years people complaints rates were too well >> thank you >> my pleasure >> coming up -- what's coming up president biden prepares to meet india's prime minister in washington we've got virginia democratic senator mark warner, who at one

point did look like that we're going to ask him about america's current relationship with india we're going to get into it plus bitcoin is at its highest level in months. we'll speak with noted bitcoin sceptic author of "the bckla swan." he was right, once i think don't go anywhere. "squawk box" will be right back. . you need cdw, who gets to know your business and can design and deploy custom solutions, with pre-configured hp notebooks with hp wolf security. ai-enabled threat detection and remote management protect your endpoints 24/7, giving your defenses some real teeth. bummer. hp makes always-on remote security possible. cdw makes it powerful.

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a big day for the u.s. relationship with india. that country's prime minister will meet with president biden in washington. we go to the white house >> hi, seema >> you hi, becky we are expecting announcements on defense and defense of technology they reported the co-production of fighter jet engines in the country, it's one of few countries that ge is agreeing to share this type of knowledge with and therefore will require con congressional approval he met with modi to security the deal and they are nearing a deal to buy high grade zones

following border disputes with china and would help reduce reliance on russia for defense equipment, which has been a key concern for the state department here a number of tech deals are expected to be announced, including a new partnership with google on artificial intelligence a $2.7 billion chips factory with micron and efforts to collaborate on space exploration. tonight is where we're expecting an extravagant affair, the who's who of corporate america will dine with modi and fedex and marriott ceos. they all have vested interests in seeing india grow we're told some leaders will share concern they have about india's infrastructure, the lack of skilled labor and a new data collection bill that would make it hard for tech companies to expand there >> seema, i think the biggest issue facing everyone is this juxtaposition between this very warm relationship right now with the prime minister of india and what's been happening with

president xi of china and the united states. it's hard not to acknowledge that backdrop. >> reporter: absolutely. as the former ambassador to india, he said both india and the united states have vested interest in containing lthe rise of china it will be symbolic to show that the two countries are working to the on defense and technology. one area of focus will be russia modi has been criticized for not taking a strong stance on condemning the actions in ukraine. will biden address that and not to mention modi's track record of human rights violations >> thank you, seema mody >> and virginia senator mark warner co-chairs the senate india caucus and the chairman of select committee on intelligence you got your shirt all pressed

>> i'm all pressed and ready to go tonight >> you had someone -- you going stag you need a date? i've never been. >> i'm actually bringing my wife she doesn't go to many of these things so we're looking forward to a good time the fact that i live 20 minutes from the hill also gives me an advantage. i get to actually go to my real home after the dinner's over >> senator, it seems like the perfect country for us in terms of, you know, we both have similar interests in terms of containing china they've got i think india, the population is going to surpass china or has surpassed china, capitalists, democracy if we could move everything we do in china to india immediately, it would probably be something we'd try to do. is there any down side to that strategy that you see? >> first of all, i was just in india in february with nine senators i've been to india many times.

india was always an aspiring nation i think india's time on the world stage has arrived. i've never seen a country -- i've never been to india when it was so optimistic from the government leaders to business leaders to folks on the streets. i think that's positive. india has also moved off the center on things like china. they recognize china expansionism is a challenge in that whole region, not just the south china sea but some of the border disputes they have with china. i think it's really important this meeting with the president. we've been working on a number of these items to strengthen defense ties these announcements that are going to be made one of the reasons why india's been on the fence and i've been frustrated with them on this in terms of putin and ukraine is because they've got a 50-year relationship with russia as a dependable arms supplier if we want to get india off the fence on russia, we've got to be willing to sell more arms to

india within appropriate controls that's why john cornyn and i have put forward a suggestion, a bill that would say let's move india to a higher level in terms of defense cooperation, in terms of being able to sell arms so i think this is one of the most critical relationships the united states has for this century and part of that's got to still go in more trade. we're only at about $100 billion at this point. we ought to have a goal to move up to $500 billion i think this visit will take us in that direction. >> we have been talking about -- we referenced china just now but we've been talking per se about china. i just want to get your opinion on this. we had senator rick scott on, who points out that the taiwan issue seems to be maybe are we getting closer, in your view, to where we have to face something like that?

and what do our multi-nationals do what should they be doing now? because if it did happen, you saw what happened with ukraine, they just had to cut ties basically. is that on the horizon should it be done preemptively >> i don't think it should be done preemptively. and i don't think we should fully decouple with china. there are things like climate change and others we've got to work with them i think it's important as a policy maker to make clear my beef is with the communist party and xi jinping's authoritarian leadership it's not with the chinese people or diaspora. china's great nation i've been having what i call classified road shows where we bring in business leaders and share with them in more detail than we can publicly the challenge that china presents. $500 billion of intellectual property theft a year, the fact that china is literally competing and in certain areas i

used to be in the wireless industry investing at a greater level than we are in a series of technology domains, telecommunications, quantum computing, artificial intelligence everybod everybody's abuzz about a.i. china is putting resources there. i think american companies are starting to realize that this hypothetical, they got to have a plan b i hope there's not military action around thaiwan. you blockade taiwan for two weeks and slow or stop the supply of chips, we've got an economic challenge if x sends weap-- xi sends weap to putin, will be acknowledged the more they're going to play

by basic capitalism rules, that didn't prove possible the case because president xi tightened the rules in 2017. >> back to india we had the same hopes there and it's on -- on face value, it's a liberal democracy. you are -- you know it well as a co-chair of the india caucus, there are some people that think it's been back sliding under prime minister modi in terms of, i don't know, the press, freedom of the press, elections, some human rights do you have concerns there >> listen, i think we're at the stage of an honest relationship. those of us who spent a lot of time investing in this relationship the shared concerns and even in a semi-public way at the india business council about a week ago. i think some of the indians could point out, hey, america,

you got some challenges with your own democracy look at what happened on january 6th. so i think as friends we ought to share these concerns, but i do believe the up side of this relationship across not only a kind of geo political, not only defense ties, the quad is an important step forward but also frankly people to people this relationship is made stronger by the 4 million indian americans who are such a vibrant part of american life. they build that people-to-people relationship in a way that we have with very few other countries around the world, so i am long on india will there be bumps? yes. but this is a relationship worth investing in >> all right, senator. okay that's fine. tell mrs. warner that's even we're going to get to one of these state dinner have you seen the menu

>> i think he's gone he's starting to think about food. >> they do have unbelievable like 12 courses normally >> coming up, we got a special interview with nas i didn't mean taleb author of "the black swan," the current risks and latest crypto rallies. you're watching "squawk box" and this is cnbc

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welcome back to "squawk box. the futures right now indicated right across the board down about 80-plus points the nasdaq weak yesterday, down another 45 today and the s&p giving you back premarket about ten points >> warren buffett has created more than 9,000 a shares to b shares to make his annual donation to five foundations most of that is going to the bill and melinda gates fo foundation, the sherwood foundation and buffett foundation and five foundations have regularly received donations from buffett since june of 2006 that's when he made a lifetime commitment to support them and every year around this time he makes those donations this time the shares were $4.7

billion of the a shares that he converted to b and gave to these five foundations i think the interesting thing if you look at this over time, talking about basically the mathematics of a lifetime with the commitments to these five foundations, it's a law in compound interest and a building up over time back in 2006 he had 475,000 berkshire a shares worth $43 billion. in the 17 years since then he's given away about $50 billion now he has less than half the shares, 218,000, less than half the shares left worth $112 billion now. so even as he's been giving away billions and billions and billions of dollars, the value of those shares keeps growing. that's not over a period of time where berkshire had a phenomenal growth rate. it just shows what happens when you have compound interest >> that's always been his argument he's going to be much better at compounding -- the philanthropic

organization better get a pretty good money manager to try to beat buffett >> when we come back, we have jobless claims that number when "squawk box" returns. how can you sleep on such a firm setting? gab, mine is almost the same as yours. almost is just another word for not as good as mine. the queen sleep number 360 c2 smart bed is now only $899. plus, 48-month financing on all smart beds. shop now only at sleep number

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welcome back to "squawk box"

right here on cnbc we are just a few seconds away from new initial jobless claim numbers. we've been watching the futures this morning we've been in the red for all of the morning at least since we've been there s&p futures down by close to 11, the nasdaq down by about 49. rick santelli is standing by at the cme in chicago rick, the numbers, please. >> yes, we're expecting initial and continuing claims, many of course are going to pay attention to that 262,000 we had in the rear view mirror and continuing claims 1.8 million of course is the significant number as i pick those off coming across the headlines, i do see that the current compounds, which out for the first quarter is minus $219 billion. that is close to expected. the reason i bring it up is in the furst quarter we were minus 280 billion, going all the way back to record keeping in 1960 you can see that i'm -- here we

go, 264,000 for initial jobless claims that is a few thousand more than the 260ish we were expecting, 2,000 more in the rear view mirror of 262. we'll have to see if there is a revision do keep in mind to find a higher number than 264,000, you're going to have to go towards the end of october of '21. that's the week of the 22nd when it was 269,000 now on continuing claims, june 10th is the cutoff, 1,759,000. once again, this is not only less than 1.8 million, it's significantly less than the 1,790,000 we were expecting. and there are revisions. last month's 262, which was back-to-back 262s moves to 264 we now have back-to-back 264s. last years' $1,775,000 moves to

$1,772,000 not a big move continuing claims for this current week now, you have to go back to the last week in may to fu find a smaller number than $1,759,000 if you look at a ten-year chart, we're at 373, we're now at 371 and change, 372. i try to look at this and see what exactly motivated the markets. we saw a few points pop from minus 89 to minus 80 on dow futures. most likely it's the fact that initial claims are remaining stubbornly in that october of '21 region continues claims is what they'll feed into and as steve liesman talks about, we want to attention to the path leads from

initial claims to continuing claims to see in those unemployed end up finding work we want to draw your attention quickly to the notion that the inverted yield curves 2s to 10s gets very close to minus 100 i think that's significant and when it comes to the senate banking committee, we're all of course going to be paying very close attention to jay powell. i would like to point out yesterday that the market that seemed to pay attention to him on the house side, the only market that really seemed to pay attention to what was going on after 10:00 eastern was the dollar index becky, back to you >> rick, thank you let's check in with steve liesman right now. he's going to join us with more on this. steve, what are you picking up interest these numbers, as rick was just pointing out that march from what we see with the jobless claims to continuing claims >> rick, gave me a good curtain r raise right there. we now have let me count it, one, two, three weeks in a row where we've had this step up

from 230 a week to 260 i think we can call it a trend i think at least on the front end of unemployment we have some softness there, some gathering softness, something definitely worth watching remember, though, that the continuing claims is a week behind but what we're not seeing is an increase in continuing claims the appearance -- we infer this from the data, we don't know it definitively from the data, is that folks seem to be going to unemployment, jobless claims and seem to be getting work relatively quickly or the people who are on continuing claims before are getting work. so we're not seeing this increase in continuing claims. maybe it's something that catches up later because it does lag by a week. but we're not seeing i guess persistent weakness from the claims numbers something definitely worth watching could eventually show up in continuing claims. but that's what you would see over time is an increase in continuing claims. on to powell, powell yesterday was i guess initially a little

bit hawkish and then he got very much a little more definitively hawkish. what he said of the following: future rate hikes are probably going to happen. then when asked about two rate hikes he said that's probably a pretty good guess. he still says decisions are made meeting by meeting but how will they be made he'll look at inflation and the labor market inflation he says is too high, the labor market tight and the gap between the fed and the market has developed, becky. if you look, 75% or 71% probability of a rate hike in july but the market ain't buying that second hike, at least not right now. maybe they'll get there after the next hike. maybe it's the way they're playing or hedging this play right now, but only a 20% probability or 19% probability that by november that second hike is in the market ain't buying it right now. becky? >> steve, there was other commentary from raphael bostick yesterday and some people kind of pointed to that as a reason

why the futures were under pressure he was more dovish in the short term, said that he'd just like to wait and see how we play catch up with the hikes they've already done to this point he said in his mind he was taking the idea of dropping rates, lowering rates off the table not only for this year but next year, too >> it was goolsbee and godspeed that were in the wait-and-see cam many they were not on board definitively with hikes. hi a nice conversation with my producer who follows all of this stuff. we try to corral and keep straight what 18 fed officials are saying and my producer, betsy, oupoints out there are to people unchanged in their plot chart. i would not take bostick and

goolsbee on the committee. two-thirds of the committee has two hikes or more built in it may be the two most dovish guys spoke at the same time and caused the market to say maybe powell has a lot of opposition i don't think so we'll hear other folks talk today. right now two-thirds of the committee has two hikes or more built in and i'm suspecting we did not hear from two of those folks when goolsbee and bostick spoke. >> steve, thank you. a lot to consider. >> pleasure. >> up next, "the black swan" author, nassim taleb on the markets. you can get the best of "squawk box" in our daily podcast. follow it on your favorite

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welcome back to "squawk box" this morning we are joined by a very special guest who is here to talk about the markets, nicholas nassim

taleb. >> i've been here before it's nice to see stability i've known you guys 10 years, 15 years. >> 11 we've all been together. >> i think a dozen years now >> oh, yes, 12 i base it all based on when my son was born >> talking about stability and risk, where do you think we really are in these markets? we had barry sternlicht come on and tell us the fed doesn't know what they're talking about and things are much worse than we know >> let's talk the big picture. 2008 we had a debt problem, no the fed put the interest rates at zero for 15 years now lowering rates to zero made no sense, you know they didn't try -- a panic they didn't try to lower to 3% they went all the way to zero. once it's at zero, it's very hard to raise it so now we're going to have to learn to live in an environment with higher interest rates

and 15 years, that's a generation of traders, generation of finance practicers who don't know what interest rate means welcome to a new era monetary policy is something that is, you know, short term. they used that tool in place of a structural reform, you see you can't use -- it's not made for that so that's a big mistake and we got to pay the price >> when does that price come, what does the price look like? >> i don't know when it will come, but let's look at what we have it's more than $100 trillion of real estate valuation. we're not at 3% mortgages but 7% and going north, okay? so and you have a lot of the

methodology of the startup business changed in the past you used to be selling your future cash flow. now they're selling you future funding like you're going to sell it to someone else. so the whole structure needs to tumble, okay >> it needs to tumble? like 2008 style tumabble in. >> probably because systems don't fix themselves without some kind of pain. >> you think a true crisis is coming >> the risk is right there we know we have real estate valuations that don't make sense for the interest rates, short-term rates at 5 1/4% we have startups that basically are using the funding market to -- as cash machine. it's not sustainable the stock market is another story because the stock market seems to have some, you know, probably more robust on the others -- >> you say a black swan event --

>> it's a white swan the risk is right in front of us if you see a bridge that's fragile, you know it's going to collapse so you need to fix it. you have to reduce debt and do a lot of things that are not cosmetic >> if you have don't believe in mmt, the bins that we had at zero is much larger than any binge we've had in the past. if you believe in come uppins, hangovers, however you describe it, this has been the mother of all binges but we haven't seen it there are people that argue with me all the time that the strength ofthe dollar, that they don't think it's ever going to change so we're able to print. we're the country of record on the entire planet, we have this ability to print that's never going to go away so we can spend as much as we want that's the mmt people. >> no, mmt made no sense but

people bought into it because it was, again, it was -- >> you can make a case for it because we can always print money because we are the -- the dollar is the standard for the world. >> germany was a power, okay, and they printed, okay >> i know. they seem to ignore history. i sent them a picture of a wheelbarrow full of cash when they argue with me >> one thing you did ahead of 2008 was you hedged. if you were a investors today given this fragile bridge, what could you do >> it depends. if you can't take risk hedge, not going to sell -- >> you can try to sell it if you like >> if you're an individual, you have to stay away from the two businesses you're going to stay away from, you know, new technologies, particularly the ones that are connected to a.i. because it's going to be very unstable and the other one is real estate. and if you're a professional in

the market, make sure you're not naked long stocks. >> you did say something about the stock market you kind of felt a little friendlier towards it. >> no, no, no, i'm saying it's the least -- we have a lot of sick person, it's the person that's the least sick. >> it's a blue chip paying dividend and dividends are going up, that's okay? >> and also they got indexed by a little bit of inflation. we had about 10% inflation that helped their inventories and -- >> other than that, where's your money? you have gold? you don't like crypto. >> no, no, crypto -- i was here when you were -- >> i still like it we respectfully disagree >> i say it's a tumor. made no sense at 70,000 and it would make no sense even at a million, it would still be a tumor. the property of a tumor is it grows without control until it

stops growing until it self-destructs >> what do you buy >> now we know that crypto -- >> do you buy or short stuff >> short or gold or what >> we're talking about another great recession type of calamity -- >> it's not going to be a recession type of calamity, it's going to be an adjustment to real interest rates higher than 3% >> if you think we're headed for bad times, do you short certain stocks or certain categories >> i mean, we -- my business we don't have specific stocks in mind we just look at how to hedge portfolios where portfolios are. >> what does that mean >> in other words, you just make sure that you have a payoff that compensates for big losses in the stock market should they happen >> and does that require shorting entire categories >> no, that requires it's a

policy using derivatives we're involved in for more than 20 years. and the derivatives tailor payoffs for investors but regular investors, i recommend staying away from the market >> here's a crypto question, the same question i asked warren buffett. there are a lot of folks who are skeptical about crypto and bitcoin in particular. >> always been >> you talk about it being a tumor and sort of acceself-emulg on itself. what would be the tipping point that would do that this started in 2000 and -- what was it >> 2011 maybe? >> 2009 i wanted to say. >> it started after the crisis >> i think it was '09 or '10 now he we are 13, 14 years in. that's a very long speculation if this is that.

and i'm -- >> let's look at crypto. is it being used for real transactions no it is a cult >> the unbank or people in very high -- where they make money and inflation is 30%, 40%, they have a cell phone and are able to own something that didn't appreciate immediately >> it did exactly of its opposite of its mission hedge because it collapsed when -- >> it collapsed to 30,000. but people were negative $10 >> but you can look at any stocks that reach $100 and started at 1 or $2 >> and a lot of those collapsed. you don't look at the past, you look at the draw down you can experience, own it when it's already mature someone, it's not an inflation hedge. two, the thing is it may be good for a transaction for a small amount of money but it's not good for real money laundering because it's very traceable and,

three, it is pretty much in the first time in the history of the world we have had a cult, you know, cult coupled with financial instrument >> what do you make of blackrock trying to pursue, you have citadel. you have a number of wall street

>> the conundrum, somebody will win and for example, if you had been an investor even six months ago, you would've been rewarded for doing that, right? and so i agree, it is very hard to pick the winner. >> it is very hard to figure out , 97% fail. so right on the technology and wrong on the vehicle. the personal computer, he would be invested in osborne, osborne

went bankrupt. so it is very risky when you have the coupling of nuclear technology and the cloud in space. >> you don't have your newton, anymore? >> so this is why it is very risky. for a professional. >> it sounds like you are saying the world is coming to an end and the only way you can protect yourself is by investing with the company. >> the derivatives we produce. >> i am not saying the world is coming to an end. i am saying we are going to have some adjustments and the second thing, the leadership stay away from it.

if you are a dentist, try to make money. not make money with your portfolio. we have a generation of people who think they can make more money in the market than the profession. they should focus on what they know and where the skills are. >> how would you hedge the real state to the extent that you could and how are you thinking about the original banks and would be short in that bank? >> is very risky because they have uncle sam and uncle sam will save the banks and they showed it, they proved it in 2008 and again, recently, if there is a sector that has got to be stable, the banks pretty much elect utilities. in fact, bonuses.

>> there have been bankers for many years that have sent -- i am not going to answer because we benefited from the collapse of banks in 2008, my friends and i, as you know. we will not say, i am not going to be two faced with that. >> we appreciate you coming in and you have a forecast titled chaos king. >> more generally, the precautionary principle. one of which is finance and the author, scott peterson, a much better storyteller than me, he is a journalist.

and he tries to cover different aspects of the principles. >> we appreciate you coming in. when we come back, the opening bell on wall street. from the morgan stanley client experience. you get listening more than talking, and a personalized plan built on insights and innovative technology. you get grit, vision, and the creativity to guide you through a changing world. ♪

let's get to -- where have you been? >> i have been here! i was here at the top of the 7:00 hour. >> i already forgot. don't you is joining us now. >> no, we have got some different ones in here. the first one we want to talk about is earnings. this is the parent company of olive garden, longhorn steakhouse. the shares are down 41%. revenues were in line, the full- year outlook supported did raise dividends by 8%. a balance of 4% drop. also checking what is happening with the analyst call.

that is tesla, down roughly 3.75%. volume is starting to pick up. morgan stanley, adam jones pretty must much based on evaluation. this is more fairly valued, right now. and another stock to follow up on, yesterday's move, intel announces a big restructuring of its operations to focus more on manufacturing order foundry side of the chip business. that removes a little bit of downside on intel and semiconductors that were caught up in a macro selloff. they are down about one quarter of a percent, today. keep an eye on the chip socks. a final check on the markets. a slight improvement. if it had

gone from 264 or 260, back down to 240, it might be a different story. it is the notion that there is some developing weakness, who knows? the reason we are going up is because it only gives you a month. if you go further than that, you might start seeing it. but i'll be here, tomorrow? >> yes. good thursday morning. welcome to someone on the street. o night of the new york stock exchange, stocks are on track for a fourth consecutive decline. a better day for