florida's governor, who would that be? he does have a name. he is kind of well known. ron desantis declaring a state of emergency as florida braces for landfall. it's tuesday, august 29th, 2023. "squawk box" begins right now. good morning. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site on times square. i'm becky quick with joe kernen. a a andrew is out today. you will see the gains from yesterday. the dow futures are up close to 50 points. nasdaq up 20. s&p is up 6 points. in the session yesterday, dow

ended up 213 points. the s&p and nasdaq rose each by less than 1%. you are looking at the markets trying to put a dent in the losses for the month of august. it has not been a great month for any of three major averages. >> they were up last week because of friday. after jay powell. >> the story for the month to date. s&p down 3.4%. the dow up 2.8%. nasdaq is the big loser off 4.5% of 4.5%4 4.5%. we have seen advances sdp. >> we looked at the abyss. >> you don't know the next motivation for the fed. i heard people talk about that. you have to look to earnings. we have seen significant gains for the year. what comes next? what motivates people?

when does the fed cut rates? when they cut rates, why? >> i don't know why we're talking about that. why would there be a reason to cut? >> we go back to the low interest rates. >> are we never going back to 6 or 7? >> good question. >> i don't know why we think they would cut. if inflation were to come down to 2% or if we move it to -- would you settle for 2.5%? >> 2.5% doesn't sound bad. >> 3? 3.25%? >> that's not bad. >> 4.20. under 5 on the 2? >> barely. >> i'm ready for a 4 handle. idalia. i never heard of that name. it begins with an ""i."

strengthening to a hurricane as it gathers strength near cuba. it could become a powerful category 3 before landfall tomorrow in florida. it will go across -- >> the state. >> miss the bottom. maybe go through -- >> tampa has questions. >> it would have moved over land. i don't know what it means for the strength by the time it gets to the atlantic. hurricane warnings and watching are in effect for parts of the gulf coast of florida with evacuation orders issued. it is august. that's why we go through the alphabet. now they name storms. they name storms in the winter now. they name a little bit of snow. >> yeah. that's how we track them. >> those how we know what they are. >> how would you remember?

you don't know the big ones. that's how you track things. shares of ev maker byd jumped in hong kong. the company reported a jump of property of 204% in the first half of the year. re revenue rose 73%. it sold more than 700,000 units in the second quarter. that stock right now up 5.6%. sticking with auto news, toyota suspended operations at 14 plants in japan with the production system malfunction. it prevented toyota from ordering components. toyota says the disruption is probably not because of a cyber attack. operations were halted for a day last year when the supplier

suffered a cyber attack. the japanese plants account for one-third of the global production. >> supplier suffered a cyber atta attack. it sounds like a coronary. >> yes. norfolk southern restored all systems after a hardware related outage yesterday. the company said all systems were restored by 7:00 p.m. last night. the outage impacts the systems for a couple of weeks. that doesn't narrow it down for me. no indication of a cybersecurity incident. none of us are computer. >> hardware, does that mean trains? the box got rained on?

>> i don't know. we hear software. it runs on the hardware. i don't know if the hardware -- they need new boxes? upgrade? >> is there an external factor? >> anything we say would be -- >> we have no idea. we'll move on. amazon ceo andy jassy has a message to workers who don't want to return to the office. it's not going to work out for you. that's according to the report from insider which said andy jassy made the statement during meetings earlier this month. in a record of the meeting, andy jassy said the decision to have employees rushs return to the o was a judgment call. if they want to leave, they can. what is your data for making the decision? he said no data. my way or the highway. >> my data is called ceo. >> right. separately, amazon increased

the minimum order to $35 for shipping for shoppers in markets who don't subscribe to prime. that had been $25 to this point. prime members will see no change. a spokes persons said we evaluate and make adjustments on the assessments. the $35 minimum matches walmart for shoppers who are not part of the walmart plus loyalty program. amazon prime. >> raising prices for free service means how many value. >> they raise the price of prime, too. it used to be $99. >> price for free. >> it is worth it. there is a lot of stuff. yesterday, open a.i. launched chatgpt enterprises. the tool has been in development for less than a year and includes access to gpt 4.

pricing will not be announced. it will depend on the company's use case and size. in the blog post, open a.i. addressed concerns of. it doesn't train on business data or conversation. the enterprise version of the software will allow clients to choose to input company data to train and customize chatgpt for their industries. the use cases were not immediately available in yesterday's debut. i don't know. i understand the angst of the writers guild. you can be nice and say it will not hurt anyone, but when the rubber meets the road and costs keep rising wherever else. if you get to the bottom line.

>> they will not do everything, but chatgpt can give them a good start and you have real people to fix it and work it up. watch what college students did with this stuff. it is everywhere. we saw the numbers drop with chatgpt in the summer. kids were out of school. numbers will pick up again now they're back. >> what is it look like with the writers and studios? >> i heard conjecture from studios. i think they were talking about kicking the can down the road. we don't know how it will change. let's not set rules. we will figure it out then. you can't make a deal when you don't know how it will work out. >> fran went off on the actors side. just went off the other day. none were prepared remarks. she sounded like -- >> angry? >> like she is playing a role of

the union -- >> norma rae. >> yeah. she said this is not about hollywood. this is about all workers and capitalism. that sounds like something you would writer a script for. >> i'm a member of the jeascree actors guild. >> i am, too. my performance on -- what is it? i had three lines or something. i delivered them. i tried them a couple of times. it is like, these pretzels are making me thirsty. these pretzels are making me thirsty. these pretzels, they're making me thirsty. i did the same thing. my two lines. in other a.i. news, executives from top tech companies will attend a forum

hosted by chuck schumer on september 13th. elon musk and mark zuckerberg will attend and sam altman and jensen huang and alphabet's ceo as we wllwell. it is part of schumer's plan to regulate artificial intelligence industry. >> i never wanted to go to washington more than to see this stuff. see all of them there. this is worth watching. >> probably. get the text or emails or contact information. it would recognize you. >> or you. >> maybe. >> they might recognize me. >> it is early on the west

coast. >> yeah. some people can't sleep. coming up, the biden administration planning to unveil the first ten prescription drugs. do you have one of these? what is our average? 67? it will target medicare price negotiations. that's why those people are up. can't sleep. the announcement -- they're watching us. it might help. that's the answer. we'll take a look at the potential impact on the pharma companies next. and later, an offer to unload start-up stakes from pahahi.liptma you are watching "squawk box" on cnbc. they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq,

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generation 10g network and with 99.9% reliability. plus one line of free mobile for an entire year. it's the mobile made free event-happening now. get started for just $49.99 a month. plus, ask how to get one free line of unlimited mobile. comcast business, powering possibilities. the biden administration is set to announce the first ten prescription drugs targeted for price negotiations by medicare. it will happen this morning. joining us to talk about this is the healthcare sector specialist jared holtzen from mizuho. we hhave dr. scott gottleib on

yesterday. he is not happy with how they are doing it and the unintended consequences, jared. >> i think there is a lot of dynamics here, joe. we can argue positive and negative for the industry and how the government is going about doing this. you know, i think at the end of the day, it is a little bit of a political, you know, symbol on the part of the administration in order to, you know, curb drug pricing for seniors. many of the drugs are going to be for the 55 and older community is a strategy they employ to help their chances with the election coming up. we'll see how it plays out. you know, it is very, very difficult for the companies to navigate around it. we'll see what the negotiations

are and how this kind of goes over the next year. the companies will have about a year to counteract or argue their case against cms regarding the drugs announced later today, as you mentioned. we will see how it 34plays out. i agreed with most of what scott said yesterday. >> it is complex and had to deal with the small molecule development versus different drug development. scott said the patent structure is really at issue here. if you wanted to try to modify that to get to certain goals, that would have been a more effective way of doing it. you are a little bit cynical, i think, and i am, too. i happy hearing the president talk about it being a slam dunk. it is part of the i.r.a. we will lower drug prices. the election is coming up. that all makes sense.

you know, the devil is in the details if it actually ends up making things worse with getting access and innovation. can you go into that? >> yeah, certainly. i feel if drug pricing is curbed or curtailed to 20% or 30% or greater and we're undercutting the patent life of two years to five years, it depends on the specific drug we're talking about and that is detail oriented as you mentioned. it presents a lot of complexity for companies in order to salvaging the business from the investment perspective. what will they do with r&d and how do they develop drugs? if we pressure revenue and earnings, it is difficult to

come up with better and new treatments. you create a dynamic to make it more difficult to get better medicines to patients. is it counter productive from that standpoint? it is an argument. that is what scott mentioned yesterday. that is what the companies are also saying as the lawsuits that bristol myers filed and merck filed. no doubt about it. >> if you were a genius and you knew how to do it, on face value you, it is logical. medicare is a huge buyer. you have someone with that clout to negotiate prices. you have the middle man and the list and cvs and mail order.

you don't know where the real increases are coming from. >> and the benefits o sbenefits. >> the pbm. they're all bad actors. it is a big target. here is the potential. i wonder if i can sing this song of any of these. i don't see o-o-ozempic. they all have songs and they are all advertised on "nightly news." eliquis. symbicort. januvia. jardiance. is that your list, jared? does that look right? >> that is roughly the list. eliquis is the big one. there are a couple of blood thinners on here. xarelto on here.

diabetes drugs. oncology drugs. that sounds roughly right. we all tried to run through what the top ten drugs might be. what companies are impacted. when i looked at it, bristol, merck, pfizer, abbvie are the top impacted. >> what with's the rational? >> this will kick in in 2026. we have a couple of years before it is implemented. we are seeing pharma work around it. pfizer has done six acquisitions or attempting to do the sixth acquisition in less than two years with seagen. amgen is trying to lock up horizon. a lot of mm&a is taking place

sdpplace. >> would you make a decision to hold on to them or buy them? >> we have been in a holding pattern waiting for the top ten since the i.r.a. came out. i feel if the stock dips another 3% to 5% on the headline, i would buy for a trade. i'm not sure much more. >> jared, thanks. it's early. you had to set an alarm for today. >> you bet. sure. >> talk to you later. when we come back, from prescription drugs to the cost of being a caregiver. sharon epperson has a report on the financial and emotional stress of taking care of a loved one. a new report from the japanese news outlet stating

toyota will resume operations at the 14 plants starting tomorrow. "squawk box" will be right back.

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48 million americans are caring for someone over the age of 18. most of them are family members caring for an aging parent or relative. the value of that care is $6 billion a year according to the aarp. sharon epperson has the look at the financial and emotional cost of that care. it's huge. >> it is huge. the value of the work they do. for caredcaregivers, for out of pocket costs, it is far greater than expected.

i met three siblings taking care of their mom at mohome. we talked about the financial and emotional stress. after she had a stroke four years ago, her daughters stepped in to take care of her. >> so good to me. >> a retired project manager and oldest sister took the lead sdp. >> it was a learning process. >> along with the two serc sist they worked to create spread sheets and managing medications and tracking her progress and managing expenses. >> we went up and down and buying things that someone would suggest that you use this and this can help. thousands. >> they made out of pocket for medical and transportation and supplies. not covered by medicare or insurance. including a $5,000 hospital bed.

nursing home care costs over $100,000 a year. a home health aid? $626 $60,000. when a fame family member provides care? >> when you think of the financial sacrifice you made. i'm sorry. >> it's been hard. >> it's so complicated. when you start trying to figure out even just in what we might be entitled to, we pay off our bills and stay afloat. that's a good thing. that's what we're trying to do. >> the financial adviser says planning ahead tfor long-term care can help with the strain. >> it is tough. a person in their 80s doesn't know when they may need help.

>> family care giver s can get help through state assistance. you have to apply for the programs. >> we are trying to take care of our mom 24/7. there is no way in the world you have time to figure it all out. >> piecing together finances for the mom's care has been overwhelming. these sisters say family and faith offer the support they need on the most trying days. experts say it is important for family members to discuss who will make healthcare and financial decisions if an aging relative can't make the decisions for themselves. having the legal documents to spell out who takes on the roles can alleviate stress. it is very important to have the powers of attorney and the living will and all that. >> work that stuff out long in advance. you see people suggest your college age children do the same thing. at age 18, you cannot access.

>> both have health care proxies. >> absolutely. >> in a situation like this, where you are dealing with all of the costs that are not covered by medical programs, very few people have money stashed away to deal with the money. what can caregivers do? >> one of the things to do is try to figure out how to fund the long-term care. insurance is one way people are doing it if the person is under the age of 70 and relatively healthy. many in the situation of suddenly, that is not possible. looking into state medicaid plans and if the person was a veteran or veteran in the family, there may be assistance for family caregivers. it is important to talk to employers about what they may offer and see if they are offering fsa or hsa.

the other thing is look at the tax return. declare this person as a dependent, you can look at the medical expense. it is important to talk to a tax professional. go to the irs web site. it has a tool to figure out if you are eligible to claim the dependent care credit. >> sharon, thank you very much. >> sure. coming up, commerce secretary gina raimondo is in china to hold high-level meetings. as we go to break, we take a look at the winners and losers from the s&p 500. >> announcer: winners and losers is sponsored by state street global advisers.

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welcome back to "squawk box." commerce secretary gina raimondo holding high level meetings in china today. we have eunice yoon on the train with the delegation. eunice. >> reporter: that's right, joe. they are in the carriage behind me. raimondo is headed to shanghai after the full day in beijing. she met, as you mentioned, with

high level officials. her message has been the u.s. and china should continue p to have a very strong relationship. not only on her area in trade the commerce and the economy and outside. when she met with the chinese premier, she stressed she hoped the two would cooperate on a.i. and fentanyl crisis and climate change and most of her focus, which you expect, was on trade and economics. because of that, she met with the vice premier who is in charge of economic affair as. when she was with him, she said we will never compromise in national security. we do not seek to decouple or hold the chinese economy back. secretary raimondo met with the chinese minister to cooperate on travel and tourism. she announced the two will revive the leadership summit in

tourism at the start of next year which had been shelved because of the pandemic. a lot of optimism in her messaging today. joe. >> a lot to talk about, eunice. the high speed rail. what we talk about when we talk about the projects in china, the high speed rail to nowhere. do you think it is going well? do you think the hard questions and conversations are being had in these meetings? >> reporter: i think there are hard conversations being had in that the secretary said that she had brought up some of the stickier issues such as the treatment of micron and the issues with intel. she brought up the chinese

export curbs of the two metals which are very important for the world's semiconductor industry. whether or not they resolved or either side has really stood back or agreed to any compromise on the core policies, we haven't seen any sign of that. most of it has been talk about where they could have cooperation. that is her focus. including in shanghai where she will visit the nyu campus to address the people and visit to disneyland. >> thank you, eunice. we will talk more about this on the china trip with daniel rosen. former senior adviser for economic policy with the nec. this was the national security council under george w. bush and that administration. he is now the founding partner

with the wrotium group. she is trying to increase business with china and trying to mend fences and trying to inn da -- introduce export controls. it is a tough job for her to orchestrate. >> it is a tough time in the relationship. this is the new reality. we had decades and decades where the answer was also open the door riwider. that worked as china kept the foot on the pedal of innovation. they did that a lot of running a an market economy. when they got into the limit of that, the u.s. is putting an emphasis on de-risking and dealing with security concerns as it is looking for economic opportunities. in fact, the security has to come before the commerce.

indeed, secretary raimondo has a tough balancing act. so far, she has done a pretty did job. chinese embracing the opportunity to have her present and talk to her despite the fact that the biden administration hasn't let up on the de-risking. >> people think the biden administration might blink -- maybe not blink, but not be as tough as the china hawks to like them to be. what do you think? >> the true hawks often don't stop to think about whether steps they are proposing will actually achieve anything productive and useful in terms of the security and what the economic cost is here. for example, pulling the plug entirely on the u.s./china investment flows to companies and sectors which have nothing to do with national security

would undermine the u.s. role in the world economy as the capital market that nobody can get close to touches in terms of how deep and productive it is. some of the hawkishness is really more political grandstanding and theater than achieving national security objectives. i think wisely, the biden administration has drawn some limiting around what it will propose and it tested it against whether it is productive to do the things they tried to do. that said, really, compared to what most people expected out of the biden administration, this is pretty tough with the screening executive order signed a couple of weeks ago continued focus on de-risking in the technology sector. eunice mentioned secretary raimondo's goal of trying to get the chinese to let up a bit on exports of critical minerals. from the chinese perspective,

there's a few things they are restricting compared to a broad swath of things the u.s. and not just the u.s., but as we saw south korea and japan and other market economies are putting on restrictions at a pretty fast clip. >> dan, are the chinese coming at this from a slightly weakened position given the economic back drop? is this a good time to extract concessions? >> it's a new world. a year ago, the working assumption was that china's gdp growth was 2 or 3 times the u.s. gdp growth. now here in the third quarter of 2023, we have the atlanta fed saying the u.s. is looking at more than 5% annualized growth in the quarter. china, while it is reporting to be on track for the 5% target for the year, personally with

clients, it is probably zero or 1% or 2% at best for 2023 for the chinese economy. it is a changed political environment. i think a lot of china's willingness to talk about things like a commercial issue working group and restarting exports at boeing and talking about opportunities to increase two-way exchanges in tourism -- i was over a month before last to talk about scholar exchange. all of these are the hard reality of where the chinese economy is right now. you have to be careful about gloating in the united states. no reason for challenges. china has to be mindful of the situation presently and try to put as many points on the board in stabilizing the relationship with the u.s. and other market economies as it can.

>> dan rosen, thank you. rhodian. >> thank you. >> good to be with you. see you. when we come back, goldman sachs selling another piece of the business that was acquired under ceo david solomon. we have the details right after this break. riadlater, former td ametre joe moglia will look at the state of the retail investor. "squawk box" will be right back. introducing purple's new mattresses. our unique gel flex grid draws away heat

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welcome back, everybody. goldman sachs has agreed to sell the personal financial management. it will result as a gain for the bank, but declined to sell the sale price. goldman acquired the unit with 225 advisers managing $25 million in assets in may of 2019. goldman finished offloading the installment loan business in the second quarter and reducing legacy balance sheet investments. when we come back, the ceo of freight and logistic service will join us with the update on the supply chain. reminder, you can watch or listen to us live any time on the cnbc app.

retail industries and has its stock rise. joining us to share her view of the economy is judy mccreynolds. i think there has been a talk of a freight recession and concerns about what is happening, and in august you have seen a pickup in some areas. >> yeah, it's related to some of the disruption in the industry, i will say. you have seen the headlines with yellow going bankrupt. that has affected some of our

opportunities and the core business, what we call core business, and the update we did, we are commenting about that impact as well. >> it's not necessarily this is a sign of better news for the overall economy, but for you as a player -- >> yeah, that's exactly right. in the second quarter we had seen freight weaken into the second quarter, and that's usually an uptick in the business, and you don't normally see that down slide relative to the first. this happened as we were winding up the second quarter into the third, a lot of this disruption was going on. there has been a lot of interest in how that's impacting this.

>> one of the things you dealt with with the other industries and other players is to try and settle with the -- >> yes, that's right. >> how big of an increase was it? >> well, the overall increase is about 5%, and our employees are very well compensated, including the benefits. the first years, 13.5% increase. we had a big jump in increase to get us to the right place to start from a market competitive wage standpoint. as you go through the contract period it's, you know, pretty normal is what i would say for this environment. it's five years. >> so the five-year contract on that, and you can offset with cuts you did yourself,

internally. >> we did. when you have your business performing with a lower number of shipments, at least that's what we were experiencing in the second quarter, and we review and make sure our resources are aligned with that, and whether it's something we are purchasing outside, and sometimes we use rented equipment and those types of things, and those things will typically go first to reduce because you don't have the shipments to support them. other changes we make relate to head count in different areas and production sort of things attached to shipment levels. it's that kind of adjustment you make in a time like this. >> what do you hear from customers? is there less demand on the store shelves as part of this? >> yeah, and we have off-price retailers we do business with

that are in a robust place right now. there has been a weakness that is there, and then persistent, i would say, and we're hopeful, you know, that with some of the other trends, you know, reshoring and things like that that there will be a pickup in that. you know, we're ready for anything. we have been in business 100 years and have been through a lot of ups and downs in the macro company. our company is resilient. i was thinking about the pandemic period, you know, where we had the big falloff in business and things were shutting down, and two months later we had a robust recovery and the rest of 2021 and 2022 were amazing years. we had revenue of a billion in each of those years. and then, you know, of course the yellow situation has given

us a lot of opportunity. >> right. the biggest challenge you are facing right now, is it finding employees? or is that easy to do now that you have the contract settled? >> it's easier to do with the contract settlement, and the available workforce that is out there now. we think of these things over the long-term. we have to be positioned right. we are a company that the employees we say are the heart of our success, and we really mean that. we invest a lot in all parts of the process, whether it's recruiting or retaining employees, developing them when they are with us. all of that is a plan to make sure that we're in that position where resources are available to us and not something is that a challenge. >> thank you for coming in today. judy mcreynolds. >> thank you. and then targeting prescription drugs.

an announcement expected in the next half hour or so. i know all of them from watching tv at night, and it was ozempic -- >> i can't believe that. >>the cialis is my favorite, because they are in the tub and then they are empty. >> "squawk box" will be right back. my cpa told me i wouldn't qualify for the erc tax refund, so i called innovation refunds. their team of independent tax attorneys will work with your cpa to determine if your company is eligible. [whip sound]

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stay salty. wall street coming off a winning day as investors look forward to inflation data and the jobs report. best buy set to report results. we will bring you the numbers and talk about the state of the consumer. the biden administration set to name the first ten prescription drugs it will target for medicare price negotiations. we will bring you the news as soon as it crosses. the second hour of "squawk box" begins right now. ♪

good morning. welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square. i am joe kernen along with becky quick. the futures are off a little, but we had back-to-back winning sessions after a pretty crappy august, really. it's almost over, isn't it? >> oh, it's almost over. yes. >> did you know there's a jobs report on the first of the month? >> yeah, because we talked about it last week, the very first day of september. >> yeah, thursday night is august 31st. people are still getting hired on thursday -- >> yeah, by 8:30 a.m. >> i am looking for a four handle on the two-year? >> nope.

>> we will see. 4.21 -- >> it was 5.006 -- >> becky, all this fear and trepidation on the ten-year is -- well, is that the end of the world? it's not going to 5. >> yeah, and it was 7.5 last week. and that changes a lot of things. it changes affordability. you are right -- >> it should be good if it cools things down a little, and then the fed doesn't have to do more. >> but the praoblem was supply n this situation, and so many others, too. so. let's get over to frank holland for the premarket movers. let's start out with oracle getting an upgrade.

now it's a buy from a 140 price target, and an upside from where it's trading now. this stock is under appreciated for its gpu capacity, and we also believe that oracle cloud is gaining market share. the share is up almost 3%. we have telecom upgrades. we have verizon and at&t. analysts said there was overblown concerns and less weight on the stock, and now the competitive environment is stabilizing. morgan stanley out with a note yesterday, and there's an increase for verizon, and if that happens it would be for the 17th straight year. we are watching shares what the biden administration calls big pharma. the first ten medicines it will

target, and these are the companies that are flagged and they are expected to be targeted, and joe says he knew a lot of the names. and merck, keytruda, and the price negotiations could reduce the federal deficit by $237 billion over a decade. and the analyst said it could change how and what drugs big pharma produces. you can see these companies with mixed results right now. bristol-myers doing the best, up almost 1%. joe, you were asking the right question, and i think we still don't know it, and what are the gauge they are picking for which drugs? the ones that are widely used. it's not a negotiation. it's going to be price setting.

call it what it is. there are reasons for it, and medicines, the prices have gotten out of control. the unintended consequences are what things people are worried about. >> it could be a netflix series to talk about all the implications. in a perfect world, pharmaceuticals are the greatest way to have people live longer lives, and it has been second to none, and the things we take for granted, and we said keytruda, and that's a targeted cancer medication, and it is the scattershot approach of chemo, and so think of the promise, especially with a.i. and everything else of this technology, and we sequenced the

genome, and it's going to save us -- if anything saves us, it's not going to be hospital stays for a month that costs hundreds of thousands of dollars a week or whatever it is, it will not be expensive home care. i mean, in a perfect world it would be great. >> when you have insurance companies and insurance plans saying we will not pay for a lot of stuff because it's too expensive, and you have people that can't access it. >> you have drug companies trying to have extended release drugs, and then you have the middleman, and they want their piece. >> it benefits the managers. >> it's very nuanced. you get a guy running for re-election, and it's a knee-jerk reaction, you know, these drug companies, these ceos get a lot of profits, and i will

get medicare to cap the prices, and it's a knee-jerk type of thing and if you don't do it right, it will screw up the system in other countries. >> that don't get access to them. in the meantime, let's get more on the markets as investors look at the economic data, including the key jobs this week. let's bring in the global market strategist. gabriella, you were here when we were talking about interest rates. is this right for people to jump in and say we will buy the jump in yields at this point or do you think it's trickier? >> we look at it as an opportunity. look, the bond market sale as gotten extended at more favorable prices than we had been expecting. we would be looking at it as an

opportunity to move from what we find a very heavy concentration in cash, and record levels and sitting in money market funds into building a long-term fixed income solution, which was not cash. we would be looking to increase duration. there's no need to go all the way to the other side of the spectrum and be looking at the ten-year or 30 year, and really speaking about having a more neutral approach to duration, which is five years, six years. when you look at bond options, that has been the most heavily subscribed curve from the investment managers, and it's the sweet spot where you lower your investment risks meaning you can lock in the attractive yields for a longer time, and the risk and reward for fixed income for us is looking attractive, just looking at the core fixed income part. >> a lot of the money sitting in

cash on the sidelines has been waiting for a pullback in the market. we have seen nice returns for the year, but august not so hot. if you look at where the s&p is sitting, it's the 4433, and that's where it closed yesterday. even with the pullback, that could seem rich for some people. or is it the new reality, you better jump onboard? what do you tell people? >> when we look at the money market part, and the allocation to fixed income, because that has a role to play now, and we could be speaking about equity-like returns as prices fall. on the equity side, we have come a long way, right? we are now talking about pullbacks in the market as opportunity. we don't see a widespread fear when we speak to investors about returning to a bear market. really, it's speaking about

opportunities. our main conversation here is we become more constructive since late may on the perspective for the economy and for earnings. now expecting a soft landing and the earnings recession to be behind us. the difficult conversation we have is how do you actually implement that in the stock market? >> is this a pullback, what we have seen in august? >> we think it's a pullback, and looking at 5% once a quarter in normal, and 10% once a year, and we have not gotten 10% but looking at it as opportunities. the trick is soft landing does not equal buying a passive s&p 500 or nasdaq, because it has ran too much, frankly, if you look at the heavy concentration of the largest stocks. we have a nuance conversation about translating a more positive you into a more active approach, and specifically in sectors we think are interesting

s it includes different types of companies that are not just the seven largest ones, and it includes markets overseas. >> very quickly, health care includes pharmaceuticals at this point or no? >> not at this point. the sub sectors already under perform significantly, and the date to watch ahead is early february when the results of those so-called negotiations come to fruition, so a lot of pressure until then. and medical technology, they are returning to doctors visits and exams, and that's a sector seeing a lot of positive tailwinds. >> we're. thank you for come into today. >> thank you so much. >> good to see you. folks, we just got earnings in from best buy as well, and trying to look through some of

the numbers here. they came in with an earnings of an adjusted 122 a share. revenue also coming in ahead of expectations at $9.58 million. the sales were better than expected. for guidance, they are raising their adjusted earning estimates for the year and lowering the top of the revenue expectations, and it expect comparable in-store sales, and we will speak to an analyst later in the hour about the results. the stock right now up by 1.5%. "squawk box" will be right back.

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a slow motion crisis may be unfolding in the commercial real estate market, and higher interest rates and lower demand for office space, and it's almost a perfect storm. and causing more disruptions for the real estate and housing

markets. the great state of ohio. super regionals, key corps, places like that and a lot of your exsper tpertise has been i managing portfolios. >> yeah, thank you for having me this morning. yeah, that's about over the last 30 years, and 20 years of regional banking, and then i was a commercial investor in the real estate space. >> i call it kind of a perfect storm when you think about the post pandemic world, zero interest rates for a long time. we don't hear toxic assets, really, dan, like before the financial crisis but these loans got to be under priced for risks and especially after what the feds orchestrated. >> i think that's right.

there's a difference between now and 2008. during that time you did talk about toxic assets, and an unknown bottomless pit of potential losses that needed to be sorted out. we are in a different time now, and there has been great discipline with the banks, and the reality is we have seen this flash freeze, if you will, in the banking space where rates had this breathtaking increase through, you know, which had to be done, and i think the fed has done a great job controlling inflation and getting us to a point where we have to start to sort things out. borrowers and banks have to refinance in a market where there are $1.5 trillion of maturing loans over the next 18 months. during that period of time you will have stress, and they are not toxic assets, and banks

didn't get carried away with leverage but values dropped because of the interest rates. >> 1.5 trillion. obviously it's a different world than when the loans were first written. i think in your view, you know, it's going to hit some of these banks. they are not going to be able -- you say they are not going to issue stock, and you are going to see loan sales at below market -- well, not below but at market prices, but you will be below what they were issued at? >> yeah, there's a lot of capital lined up and salivating over the issues. banks don't want to sell big blocks of loans into the market, and they have been disciplined and there will be loans that have short finance and loans will get downgraded and the more

capital that gets put against those loans make them unprofitable. and i think they will do it in a more surgical way where they will look through their book and make sure that they are not going to be tkdumped into the market. i think right now, the spv or signature, they have gone into the market to be sold. banks are going to be more thoughtful and sell them in a one-off in small batches. that's what we did in an eight to ten timeframe, and it worked out well. >> the fed's job might be easier because this will cause credit contraction, and it's not that serious as an issue it sounds like. we talk about it like it's a looming titanic-sized iceberg

that the economy will hit. you don't think that? >> no, i think we are in the early innings of it. banks, you think about the failing in march, and the fed had to look at the guidance in the second quarter, and banks are trying to get their arms around it right now. the typical and larger regional banks, and banks across the board, they are commercial loans, and most regional banks are at or below that amount and they have loans to sell but it won't jeopardize those banks. in the terms where you had the immediate shotgun marriages between the banks, and the larger banks that won't be the case, and the smaller banks, $75 billion. >> we have to go, but you are licking your chops and you will make a lot of money in the next

year? >> i think we are focused on taking care of our investors and banks. there's an opportunity to be a trading partner for banks. >> are the browns any good this year? >> well, we will see. >> the bengals suddenly are looking a little better, the dominant team in ohio. thanks for being here. coming up, the white house set to announce the first ten prescription drugs selected for medicare price negotiations. we will bring you the news when it breaks. plus, former counsel of plus, former counsel of economic adviser (vo) while you may not be running an archis joinal firm,s us wh "squawk box" comes back. ves of , and mentoring a teenager — your life is just as unique.

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the information reporting that the venture fund social capital puts stakes in 258 companies up for sale in june. those stakes for sale were reportedly worth $312 million in total, though it's unclear if any of the stakes were actually sold. joining us for more on this is the reporter that filed that story, maria heater. welcome and good to see you this morning. >> nice to meet you. >> what is going on? what is this indicative of? what is happening? >> i think it's an interesting story just because it shows a

broader trend of what is happening in venture capital right now. typically venture firms would not sell stakes in early-stage startups. the way to think about stakes in early-stage startups is they are like lottery tickets -- >> yeah, maybe they hit and maybe they don't. >> yeah, and venture capitalists usually make money off their biggest hits. it's pretty unusual -- or it would have been unusual for them in the past few years to sell off individual stakes, but we are seeing that is happening more broadly, and our reporting is showing that that is, and we reported last week that the crossover fund looked to selloff, and they have been, like, publicly selling off individual stakes. we wrote about them selling a stake in a startup called co hear, so --

>> why are they doing this? what causes somebody to sell these large tickets? >> well, that's a great question. there have been a startup trend of startups staying for longer, and that means the older funds, which we reported earlier, these sales are coming from an older fund, so it -- it's basically -- they have not been able to exit a lot of these positions because startups have not been bought and have not been public and are not going public anytime soon and if they are being sold it's not for lot of money. >> do i need to think of this is as scratchoff ticket that already has been scratched off and we know it's not a winner? >> this is a good time to be buying. we are definitely seeing investors come in and start to say, like, i can take this from a venture fund that might

actually be looking to fundraise now, so they need to return money to their investors or their limited partners. a way to do that is by selling stakes directly, and this is a way to show some return. it may not be what they were hoping for but it's at least something. >> well, they were focused on the special acquisition companies, and a lot of investors did not do all that way in getting into those. how do we put that piece on here? >> well, the important context is social capital transitions from a traditional venture model, which was answering to outside limited partners or outside investors, and it transitioned to more of a family

office model. these are older funds that have not yet been realized. it's a sign that they might see buyers come into these startups, or maybe they are just looking to clear those positions? it's unclear, but we are staying close to the situation. >> we don't know if any of the funds were sold and whether there was a buyer at this point? >> it's unclear at this point whether they were sold, but we are seeing, again, more broadly with the tiger global example, there are just generally in venture capital, a lot of the shares are trading hands but there's difficult in finding that out because it's so private, and as we just talked about, it's not usually -- it's not typically for them to sell out stakes they are backing, and it's a reputation we are talking about, are you behind them until

the end and that's why they are done secretly and not as public. >> thank you. maria heeter. >> thank you so much. the white house set to announce the first ten drugs for the price negotiations. i don't know if you want to be on this list. stay tuned. you're watching "squawk box." we've got your back, road warriors. because we know you're picking up the pace, steering life at 10 and 2. you're hitting the road...

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. the white house announcing the first ten prescription drugs selected for medicare price negotiations. bertha coombs joins us with more. hey, bertha. >> yeah, this is a landmark day. medicare always set rates for doctors and medical care but under the intphraeubgs reduction act for the first time, the agency has not been given the authority to negotiate drug prices. the first ten drugs for negotiation under medicare part d prescription plans this morning, and some of the names were some we were expecting. ella kweus, that's a blood

thinner. j januvia, intres yo, and empwreul which is for diabetes, i believe. and stau laura, and then a number of diabetes drugs there as well. the company says the selected drugs accounted for $50.5 billion in total part d gross prescription drug costs, and 20% of the total programs between june 1st, 2022 and may 31st, 2023. so essentially the second half of last year and more or less the first half of this year. the process now begins with the october 1st drug companies, they will have until then if they want to respond into negotiations, the actual negotiations, the back and forth

discussions will begin in february and last through august 1st, and then a year from now, september 21st, 2024, they will name what they call the fair market price after those negotiations. we know a number of these drugmakers on the list suspecting they would be on the list have already filed suit against the biden administration saying they believe this is essentially not really a negotiation where they are being handed an offer they can't refuse because if they choose not to negotiate, they face onerous fines or may not be able to sell any drugs into federal programs like medicare and medicaid. no doubt we will start hearing from them today as it goes. the chamber of commerce joined in with a number of those drugmakers and has actually asked the courts to issue a stay for that october 1st deadline,

before that kicks in the negotiation process. joe and becky? >> that's a good point, bertha. it could be years, i guess, in the courts. >> it could be years in the courts. it could go forward. these first ten drugs are just the first. this goes on over the next several years, so these first ten drugs will be implemented, the prices on them, the negotiated prices in the 2026 part d medicare plans, and the following year another ten part d drugs, and then the following year they introduce 15 part b, and those are the drugs like what has to be applied by a physician or clinician, part b and part d. by the time we get to the end of the decade, up to 60 drugs will have been negotiated under this program. >> negotiated. can we call them price caps,

price controls? is that really what we are talking about? >> in a sense. but these drug -- the proponents argue the drug companies negotiate with other countries that have single payer, and the results what you have seen in some of the other countries, for example, ozempic, just for diabetes, and here in we are paying more than other countries that are not necessarily countries that are poor. >> bertha, they make the point, as you pointed out, that these drugs made up $50.5 billion in the total part d --

>> there was other criteria. these had to be drugs that were on the market in terms of basic chemical drugs, if you will, for ten years. those that are self therapies have to be on 13 years and not have any competition. so humira, which has been in the top ten often is not on the list because it has eight competitors, and next year there will be 12, which is the generic version of self therapies. these are drugs that don't have any competition at the moment. >> just to make the point, look, symbicort, not on the list. that's one that we thought would be. it's a copd and asthma drug at astrazeneca. and farsega did make the list,

and that's a diabetes drug. >> the fda gave them advice, and there has been a lot of study and it's not just about price that they are looking at. e al akweus is the top drug, and everybody was pretty sure that was going to be on the list, along with zarelto. >> okay. i don't know what those drugs do, but we have an aging population. on the face value, it will be a positive if the prices are cheaper. >> it could be, joe, although --

the question i wonder and i keep asking people, the congressional budget office says we will save somewhere over $270 billion over ten years on these drugs potentially, but i wonder if there will be cost shifting in terms of medical care, and individual plans and commercial plans we play 1 1/2 or 2 1/2 times the medicare rate. will the drugmakers shift and charge more to commercial plans, or will they knowing they have a shorter runway, if you will, start the launch prices even higher? >> there are unintended consequences, there always are. it's like trying to squeeze a balloon and you see things come out places you were not expected. >> yeah, so that's for

psoriasis, and -- >> one is an inhaler. i guess i heard of that one. god, people should have never smoked. >> yeah, copd. >> bertha, thank you. key inflation data and the monthly jobs report, and joining us is the former chairman of the counsel of economic advisers. what is somebody gets hired late thursday night? how do they do it? don't tell me it's a model. they have a model for the jobs number we will see on friday? they are releasing it before the month is barely -- it's still warm, the month of august. >> there's a surveyed day or a survey week, and so they don't survey every day. >> and it can be off by 300,000 jobs? that's the standard deviation from the meme, anyway.

what are you expecting? we are looking for a data point that tells the fed the lag you are waiting for is here, and the pause that you took and the caution you expressed over the last three or four months was warranted, or are we back hiking? >> no, i think the hike something coming again. there are a lot of real-time measures, and the quarter gdp is at 5%, and we are looking for a top line cpi of .8 or so. the fed will have to start talking about hiking again, and the markets have not tpfully digested that, and jay powell was warning about, saying we have to be mindful of risks. if the fed is being mindful of

risks, it's wondering if everything that has been signaling is incorrect, and it could be a reversal because the data is so strong right now. >> the economy needs to actually -- do we need a recession for the fed to breathe easier? give me a fed funds rate that would bring on a slowdown that they think is essential to get the 2%? how high is that? we are thinking 25 more bases points. is there more we are not factoring in? could it get back to 6 or 7%? >> for sure 6. the taylor rule, after my colleague at stanford, john taylor. when i do the taylor rule, i am getting it should be about 7%, and john thinks i am a little high. i think when we communicated about it, he thought it was more

like 6. but the facts and think about it, joe, we are more likely -- it's possible there's a 30 and 40% chance the gdp growth is greater than the interest rate. there's no way inflation is going down when you get something like that combined with deficit spending, and that's absolutely insane. massive spending and the gdp growth is high, and it's inflationary, and i think the fed will have to hike quite a bit more. >> how much of this is fiscal with what the fed -- sorry, with what the biden administration has done? it used to be pandemic relief, and then we switched to we got a lot of money for infrastructure to spend and a lot for the chips act, and the ira -- it's just so funny what it's called, but there's over $1 trillion in green subsidies or green initiatives. all that is going to -- isn't that what is happening right now

or just a solid underpinning? >> yeah, and there's a simple way to think about it. if you look at what nominal gdp is, if they spend an extra 5% of what gdp is and what they are doing, and if you don't have the supply to match that you get inflation. the numbers make quite a bit of sense. inflation is hanging out in the 5% range and they are doing so because of the models of inflation -- >> yeah, that would make sense to me. everybody is thinking 25 or 50 more basis points, and if they are wrong, it could be rates stay where they are or go down, or it could be the other thing, that the economy just stays strong and they have to go much higher than what we are thinking. a recession is not -- it's not that it's never going to happen, it's just not going to happen

this year or early next year, but they will have to keep raising until they bring one on, and it could be next year or the year after that. >> yeah, and because we have a recession, it doesn't mean inflation is over. >> yeah, that's even worse. >> and that backs off and inflation goes back up again, and we will see a saw tooth inflation cycle, and it will be like the covid waves and then it's under control and then there's a new variant, and we are going to see a new inflation wave stimulated by growth and -- >> don't tell me jay powell is like fauci. we will be in trouble. kevin,that's not good. nothing you said is good. nothing. can you say something good? >> good morning.

>> all right, kevin. 7%. did you hear that? 7%. >> good morning. that's good. >> yeah, that's another 25 basis points. moments ago the white house announcing the first ten prescription drugs -- this is like the nfl draft or something. >> yeah, going through what all of them are and what they do and who makes them. and bristol-myers, $16.5 billion. >> price control. communities and the people who live and work there grow and thrive. we're proud to call these places home too. they're where we put down roots, and where together, we work to help move everyone's financial goals forward. pnc bank. ♪ opportunity is using data to create

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the list of the first ten prescription drugs targeted for price relief announced just moments ago, and there are drugs from leading drugmakers. jeffries equity analyst is here to break it down. everybody gets hit. anything that really surprised you here? >> well, good morning, becky. good to see you. i think what is important for institutional investors in, quite frankly, we are not surprised. this list has been known to be coming and it has been talked about since ira started up, and

now that it's out, it's like, now what? more importantly, we are telling our clients that this is in some ways a overhang removed as we go through the process. six of the biggest pharma companies already initiated litigation. they expect to bring this through the courts and we predict a possible chance it goes to the supreme court. so this is just the first step, but actually something that's been for us known for a while. >> how long is the litigation process take? >> well, the litigation process is going to work its way obviously through state and federal courts. ultimately, you know, it could take years to get to the supreme court. this is a process that while the drugs are announced today, doesn't start until january 1st, 2 2026. so obviously there are delays, could be injunction processes, et cetera. but obviously for investors, has

been known. obviously, the big pharma companies are standing up to it due to the ideas of unconstitutional principles, which we don't probably need to get into on this morning's discussion. but let's wait to see this through the process. and again, i think actually as bertha mentioned just a few minutes ago, you know, i think there could be unimpntends consequences. on the other side, prices coming down here, are there prices changed on the other side. it might not as easy as people think to slash prices 36%, save $96 billion, poof, like magic, and it works beautifully. >> does this put pressure on all of these companies to rye to do their best to find other ways to say, hey, we are offering lower list prices, we are offering discounts, we are doing these things. what's -- i mean, i can't imagine, like, okay, say you went through the core process, you've still lost in the court of public opinion if nothing changes. >> well, look, i think in the court of public opinion, you know, we could obviously argue

that the biden administration is doing this much like the trump administration, tried to bring down prices, and we're not against bringing down drug prices. what i think is that this process actually in two ways, one, let's sigh how much the price has actually come down, let's see it go through the core process. two, obviously, these companies from an investment standpoint, which i think here is the focus, we believe could actually drive large pharma companies starting to move up, since this has been an overhang. the stocks are trading at very low multiples, and three, could be good for the rest of the biotech sector, so outside the small companies, as these companies look to acquire new drugs to offset any of this uncertainty down the road. so i think there's certainly an investment thesis around this. we actually think it's positive for the stocks. and some of this is going to go through the works. >> michael, thank you. michael ye. well, best buy reported

earlier, the retailer joining us now, sue corrali, what can we glean from this about the company itself and about the consumer? >> and how flush they are, trading up, trading down, what's in the report? >> so, yeah, it looked like best buy's numbers were better than they were last quarter. the comp store sale decline was in the mid-to-single digits in the last several quarters, it had been in double digits. so, that's an improvement. but the bigger issue is that this is really a story of inflation. when you look at the overall category numbers in consumer electronics, we're looking at sectors like mobile phones or pcs. their price declines, on an annual basis are anywhere from 10 to 20%. so that's pretty substantial. we are seeing declines in companies like apple, samsung, hp, so, it's not surprising that

best buy's numbers are down. what's the silver lining in the cloud is that they're actually pacing better than the rest of the industry, which suggests that they're probably seeing some volume increases, they're probably able to offset some of price declines with increases in promotion. they talked a lot about that last quarter and i expect to have them talk more about it this quarter. >> do you see any -- what about the consumer. what can you glean from that on this? is there high-end versus low-end at best buy. is there shrinkage? did they mention shrink at best buy? are there smash and grabs there? you can't carry out a 0-inch tv set, i guess, can you? >> i think you can probably carry anything out of a store. >> if no one's stopping you, i guess. >> right, exactly. and especially in these urban markets, where it seems like the biggest issues are. i haven't heard them talk too

much about shrink. shrink generally industry wide in retail is 1 to 2%. and honestly in the lower ticket categories. the bigger issue for larger electronics isn't so much their size or price, because they are very liquid, but rather their serial numbers. they often have individual in.ds attached to every item, it's pretty clear which one has been stolen or fenced or is a gray market good. that makes it harder for electronics, not that it's impossible, whereas when you're talking about ticking razor blades or some other item that doesn't have a serial number attached, that's going to be easier to resell. i haven't heard about shrink increasing as a result of a lot of these stores like best buy,

but i think in their case, it really is an inflation issue and the fact that the consumer is just not purchase ing at the pre levels they were during the pandemic before. >> pretty interesting. even the people -- the perps know what has a serial numbers. that's unbelievable. but not, i guess, not that surprising. they're good at what they do, i guess. >> yeah, yeah. they're pros. >> they're pros. great. thank you. >> thank you. >> did you know that? >> no, i didn't. >> but you know, we've talked about how everything ends up on amazon. if it's got a serial number, i guess you can't do it. >> well, except for that, you really can't track the stuff. there are brands that are exclusive to home depot, look it up, there are brands that are exclusive to home depot that you can find on amazon right now. i did it last week. >> you bought some? >> i was looking. someone was like, how do you know? i was like, these are the brands

exclusive to home depot, and if you find them on amazon, they're not there legally. it's pretty easy. when we come back, we'll take a look at where retail investors are shifting their money to with former td ameritrade chairman jeff mogul. the futures are in the red. we started out in the green. we had big gains yesterday, big gains on friday. this morning, dow futures off by about 27. s&p futures down by 3. nasdaq off by 11. "squawk box" will be right back. like dynamic charting and risk-reward analysis help make trading feel effortless. and its customizable scans with social sentiment help you find and unlock opportunities in the market. e*trade from morgan stanley. with powerful, easy-to-use tools, power e*trade makes complex trading easier. react to fast-moving markets with dynamic charting and a futures ladder that lets you place, flatten, or reverse orders so you won't miss an opportunity. e*trade from morgan stanley

good morning. the biden administration revealing a list of drugs that medicare will target for price negotiation. we're going to show you which pharma stocks are moving. and by negotiation, we mean, basically, take it or leave it. price control. we're also awaiting news on bank regulations. the director of the consumer financial protection bureau will join us on the headlines for regional banks. and another big morning for retail best buy results are out. we'll tell you about the old-school trend that's in vogue for back-to-school. the final hour of "squawk box" begins right now.

good morning and welcome back to "squawk box" right here on cnbc. we're live from the nasdaq market site in times square. i'm becky quick along with joe kernan. andrew is off today. u.s. equity futures are a little weaker than they were when we started the show a couple of hours ago. we were in the green then. now we're in the red. these are some modest declines at this point, but the dow is off by about 30 points. s&p futures down by 3.5. the nasdaq indicated off by 12. it's been a couple of strong days on monday, and on friday before that, but it has been a weak month across the board for the major averages. all of them down, dow down by 2.8% for the month. the nasdaq down by quite a bit more, something like 4.5%. s&p is down by 3.4% for the month of august, but of course, that's also on big gains for the year. as you can see, treasury yields

are up this morning. ten-year is above 4.2%. the two-year is just above 5%, too. >> let's get over to frank holland who joins us with a look at some of the morning's top pre-market stock movers, which are -- you didn't have some of these on woorldwide exchange, because things happen. between when you sign off and do this hit. >> that's right. news happens, joe, especially in the financial world. we'll touch on some of the news you just hit on. the biden administration releasing the first ten drugs it will target for medicare price negotiations under the inflation reduction act. here's a look at some of the companies impacted. we're talking merck. its drug keytruda on that list. you can see it's basically flat, down fractionally. also, bristol-myers squibb, its eliquis drug on that list, actually about a quarter of a percent. johnson & johnson on this list as well. we have abbvie with its drug, as

t astrazeneca on this. the government says it will seek to negotiate a total of 30 drugs that will be on this list by the end of 2030. i'm sure you'll talk about this more throughout the day. in fact, the administrator for medicare and medicaid services, chiquita brooks-lasure will appear with you right there on "squawk box" at 8:30 this morning. let's start off with best buy. shares up 1.25% after a bat on revenue and a beat on eps profit, 15% above estimates. they also raised the low and full-year guidance. the demand environment is currently challenged, but she believes we're in the low point of electronics demand. shares up 1.25%. also looking at jm schmucker. those shares moving higher. the maker of jif peanut butter. they benefited from price increases and raised full-year

earnings guidance. you don't want to miss smuckers ceo on "squawk on the street" later this morning. shares up 1.5% right now. becky and joe, back over to you. >> frank, thank you very much. we're going to be watching all of that and we will check in with you a little bit later this morning. for a closer look right now at the markets and the state of the retail investor, we want to bring in joe moglia, adviser to the president at coastal carolina university. joe, good morning. >> good morning, becky. good morning, joe. >> good morning, joe. >> so we're getting through the slower days of august and you've got people who are saying, well, maybe buying on the pullbacks isn't such a great idea anymore. that's what goldman sachs says. i was looking at it this morning, even with the pullback, 3.4% for the month of august, you've still got the s&p at 44.33. it's kind of like, what pullbacks? have we seen any serious pullbacks to this point? >> i think you could paint a pretty good -- you can have a

good argument for why the market should do a little better. you can have a good argument for why the market should dnot do well and you've got to be a lot more cautious. i think there are more reasons to be cautious. we worry about china from a political and military perspective, but now they're having problems with their economy. i think they cut rates last night or overnight for a reason. if they have a problem with their economy, demand goes down in china, it's going to have an impact on our exports, on the multi-nationals like nvidia and apple, that have operations in china. you still have problems with the market, or the economy in europe. you've got concerns with regard to the -- while earnings have been better this year and beating earnings, they're 4.5% less than what they were a year ago, that's not that good. and at the end of the day, we have significant geopolitical issues, and we are divided as we ever have been as a country and there's a question about our leadership. those things add up to be more cautious than aggressive. >> but you do like what you've

been seeing in the retail trading activity reports, from retail traders, just recently this month or so? >> you know, there was a stat that i saw the ore day that surprised me a little bit. i have always believed that pr retail's a lightning indicator in terms of what's going on. but prior to kocovid, retail wa 10% of the entire volume. today it's 24%, a quarter of the entire volume trades on the exchanges are retail. and i think that happened, because during covid, of course, we were remote, you had a quick with the stimulus, you got free trading, and better products, better client service. and an entire of the entire net has never seen that. >> is that because of more retail investori s or pros and so-called smart money is sitting on the sidelines? >> i don't know if there's smart money sitting on the sidelines,

but retail is still -- there's still more money coming from equities in the fixed income. i think more the retail base has taken advantage of 5.5% front end of the curve, and i think the other side of it is, if the only s&p and if they own the s&p, 30% of the s&p is the megacap tech, well, that means the megacap tech is out with the markets. we'll try to give them guidance, discretion is here. >> i'm only asking, because earlier today, we talked a little bit how money on the sidelines is really helping. is that mean retail investors have a lot of money building up there too, or -- >> retail has money on the sideline. that's the reason why they're going from equities into fixed income. and with that, they're aggressive on the front end of the curve. so there is money on the sideline. >> what do you think about the prospect of, you know, any

credit activity versus any equity activity at this point? what do you think the scenario is between the two, risk/reward? >> well, one of the things we've talked about over the span of the last couple of months, i think this is the first time in the last 15 years or so where you get rewarded by being in the front end of the curve. when you talk about asset allocation, you think about fixed income, think about equity, think about cash. but i think we've talked about, the best thing for the individual investor, and i'm recommending that pretty strongly. i'm not saying, it depends on -- you get a 5.5% guaranteed yield there, without taking it virtually any risk. buy 15% in equities or whatever else you want them to be. the s&p 500, where you have exposure to megacap tech and everything else. if the markets go up, you're making a lot of money on your equities, still making 5.5%, but if the markets crack, and you

only have half of the money, you're only going to lose that much, plus you get 5.5%, and you have cash to kick in. i think that that's the safest and most profitable way for an individual investor to play that. i think that's the way we should be playing it. >> joe, i was reading a story last night that just talked about bitcoin. trading volume for bitcoin being at its lowest level in more than four years. and that really surprised me, because we've watched bitcoin prices come back up. but the trading volume itself hasn't recovered from what we've seen since all the way back to 2018. >> i saw that also, becky, and i was a little bit surprised at that as well. we got up to 450,000, 50,000. >> 65. >> 55? >> 65. >> av65! we're up to 65. and the individual investor got involved with that and had a nice ride. a lot didn't get out and a lot got hurt on the way down. then they kicked out part of the way down. and whether or not they got back in fully or not, obviously, they have not got back in fully. and i think they've gotten hurt.

but if bitcoin continues to at least be stable and start to do a little bit better, but stabilizing i think is the key for the individual investor, they'll come back in. >> you've got to be surprised at -- i was surprised at the article yesterday on all of the fidelity people, the johnsons and a lot of the people, they're totally involved in crypto. there are names, like black rock now. i mean, there are a couple of others, i'm not thinking of -- it's amazing and i don't know what it says, necessarily. do you think there'll be an et -- a spot etf? >> i hope there will be. it's better for the institutional and individual investors. a real nav at that particular moment in time. i think that's better for all of us. i hope that happens. but, you know, in terms of the blackrocks of the world, the fidelities of the world being involved in crypto, whether you're crazy about it or not, it's probably going to be a significant part of our future. if i'm running a brokerage firm

and we're not involved in crypto, there's a significant part of our future down the road, it's already pretty important right now. we're going to get hurt badly by not being there. >> i hope it's not following lemmings off a cliff, though. and i don't think it is, but there are two different ways -- there are definitely a lot of people who think that's what it is. ftx, some smart people were in that, too. remember? >> yeah, no, i remember that. but people in ftx did not do their homework. and a lot of things were going on. ftx was a different story. but i think again if i'm running a brokerage firm, and people at fidelity and black, they're smart. they have a pretty good idea what they're doing. you're not totally all in, but you've got to be involved. you've got to say you're involved. you've got to be able to accept your institutional investors that want to trade and want to get involved with the product. you've got to be ready to go. by the same token, if things blow up, you have to have a contingency plan for that. and i'm sure they do. >> joe, thank you. >> becky, thank you. >> joe moglia, and we'll talk to

you soon. >> thanks, becky. thanks, joe. coming up, this should be interesting. an interview with the director of the u.s. consumer of financial protection bureau and cms, we're going to talk as well, two interesting interviews with the news of the day on this particular one. we'll talk about the new rules we'll talk about the new rules expected for people are excited about what ai will do fo banking r uregular and living wills for those institutions. ss. introducing watsonx a platform designed to multiply output by tailoring ai to your needs. when you watsonx your business, you can build ai to help coders code faster, customer service respond quicker, and hr handle repetitive tasks in less time. let's create ai that transforms business with watsonx. ibm. let's create.

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welcome back, everybody. today, banking regulators are expected to release new guidelines for how regional banks should prepare for their own demise. an area that's gotten more attention since the collapse of silicon valley bank earlier this year and joining us right now to talk about the banks' new living wills and what the government hopes to accomplish with them is consumer financial protection bureau director and fdic board member, rohit chopra. thank you, first of all, for being here this morning. it gets pretty confusing when you start talking about living wills for banks. in a nutshell, what should we expect? what should these rules be designed to do? >> we all know when big banks are on the precipice of failure,

they can pose consequences for the entire system and the economy, but i think what came into closer view this march, it's even those large banks that are just operating domestically. many people hadn't even heard of signature, silicon valley, first republic. but they, too, can pose some serious risks. and the truth is the playbook to deal with their failures can be pretty thin. it's often, try and find a bigger buyer. so what we are looking at is whether there should be more rules to figure out and give more time to the fdic on how to wind them down or how to recapitalize them or break them into pieces for sale, because time is often of the essence. so we're looking at better living wills, just like the biggest banks have to, as well as some long-term debt requirements to give us more time in the event of a failure. >> i mean, that makes an awful

lot of sense, especially on the face of it. you do need more time. these things always seem to happen over a weekend where you have to immediately look around and find a buyer. but that might just be the nature of bank failures. understandably, you want the cushion of being able to say, okay, if this happens, we've got the cash cushion, because these banks have set aside their own money. you're not going to taxpayers, you're not going to the fdic, which is just the banks themselves asking to pay for that when you tap into fdic money. the unintended consequence may be, though, that it means all of these banks have less money for lending. and that's happening at a time that's pretty unfortunate in the cycle of where banking is at the moment. if you have less money available for loans to small businesses, if you have less money available for commercial real estate loans, which commercial real estate could be in trouble at the moment, all of those things mean that there's going to be less money available, and that could really put a pinch on the

economy overall, on what businesses can do, even what some americans, individuals will be able to do as a result. how do you counteract between those two situations? >> well, you know, when credit is also not available, when there's contagion and a financial crisis, i think investors on wall street know that big bank failures can quickly have a cascade on the rest of the economy. so it's important to protect consumers and small businesses and those who really depend on that daily credit that we want to minimize the chance of these big failures, but also, like you said, when they do occur, that there is a little bit more time. we've looked at a lot of data on this, and the truth is, there's a lot of lessons from the mortgage crisis. a lot of lessons from washington mutual, indymac, and including silicon valley bank, and it's very important we learn from

those lessons and prevent some of these failures and the effects that they can have on the whole economy. >> okay. and the word back prosecute banks, are they kind of going along from this, or is there pushback that you've seen? >> well, look, there's no bank that really wants to hold more capital or wants to do planning for their own demise, but banking is too important to our country and our economy and you know, this is using government-insured funds. and there's a lot of public privileges that they get. and that has to come with some real safeguards on the other side. we can't be in the situation where main street and small businesses and households become the victims of, you know, excessive risk-taking and poor management. >> let me just ask you very quickly about junk fees while we have you here. it's been a battle that the consumer has taken up and ready

to go on. it's hard to imagine anybody taking the side of junk fees saying, yeah, these are good, we want to defend these things, but the push has come that it may not be within your purr view. what's happening in that fight? >> it's directly when it comes to overdraft fees and credit card fees and so much more. i think here's what we're seeing sometimes across the economy. rather than be very clear and up-front with the price, there's a lot of stuff stuck at the end. we see it when we buy a concert ticket, when we book a hotel. and if you want a real competitive market, you should put the price up front, it's a bedrock of free markets and capitalism, too. already, the cfpb's work has really gotten rid of billions of junk fees. we've taken wells fargo and regions bank and others to task for their own illegal junk fees and we're going to keep doing

it. >> rohit, thank you for joining us today. rohit chopra from the cfpb. when we come back, an interview with the head of the centers for medicare and medicaid services on last hour's news of the drs athe ugth t government will target for price negotiations. "squawk box" will be right back. wealth-changing question -- are you keeping as much of your investment gains as possible? high taxes can erode returns quickly, so you need a tax-optimized portfolio. at creative planning, our money managers and specialists work together to make sure your portfolio and wealth are managed in a tax-efficient manner. it's what you keep that really matters. why not give your wealth a second look? book your free meeting today at creativeplanning.com. creative planning -- a richer way to wealth.

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news alert from meta just out with details of disinformation efforts it's been facing. eamon javers joins us. hey, eamon. >> good morning, joe. meta, the parent company of facebook, this morning says it's taken down a chinese disinformation campaign it calls part of the largest known cross-platform covert influence operation in the world. the campaign, which appeared to be centrally controlled in china, was active on more than 50 platforms and forums, it says, including facebook, instagram, "x," formerly twitter, and others. the campaign generated positive commentary about china and criticism of the united states. now, meta says it's taken down 7,704 facebook accounts and 954 pages related to this chinese campaign, which they say has been going on since at least 2019, and is known in the business as spamoflage. >> this is an operation where for a number of years,

researchers have been reporting individual clusters of activity under the name of spamoflage. for the first time, we've been able to tie those clusters together and link them back to individuals associated with chinese law enforcement. >> but meta says the operation did not have as much real-world impact as its huge scale would suggest. meta also says it has new information about a russian disinformation campaign that it shut down last year called doppl doppleganger, where threat actors spoofed websites like fox news designed to drive down support for ukraine after russia's invasion of that country. meta describes the russian campaign as agile and able to respond to events in realtime. and in one sign of just how fast these campaigns are moving, meta says that within 24 hours of the launch of their new twitter competitor threads, they spotted and removed accounts related to a known disinformation operation. back over to you guys.

>> all right. eamon. wlo we'll leave it there. thank you. what's coming up? >> actually, when we come back, we'll be speaking with the administrator of the centers for medicare and medicaid services on that just-named list of drugs that federal oiclsffia will target for price negotiations. stay tuned. you're watching "squawk box" and this is cnbc. about three or four years ago, i wasn't feeling as if i was as sharp as i used to be. i wanted to try something that was over-the-counter. i saw the prevagen commercials. after a short amount of time taking prevagen, i started noticing a difference-- that i'm remembering this, i'm remembering that. i stopped taking prevagen and i found myself slacking back so i jumped right back on it. i feel as if it's brought me back to the good 'ol days. prevagen. at stores everywhere without a prescription.

welcome back, everybody. the big news in health care this morning, the biden administration out with the names of ten drugs that medicare will target for price negotiations. these are some blockbusters names, including eliquis from bristol meyer squibb and pfizer and enbrel by amgen. right now we want to welcome chiquita brooks-lasure. and bertha coombs. >> certainly an historic day. i would like to get your thoughts on the process and how did you come up with these ten drugs? >> well, you said it so well. it is an historic day. and the president has made making health care affordable such a key priority in his

administration. we are very excited to make the announcement of the drugs that were selected for negotiation. this is going to be the first time that medicare is able to negotiate drug prices. the law was very prescriptive about the top ten drugs that we were going to negotiate in this first round of negotiation and so we followed the law, which was to look at which are the top-spending drugs in the medicare prescription drug program, which drugs have been on the market for at least seven years, and we're really excited to announce the drugs that have been selected today. >> there are some folks who are wondering about some of the drugs that are on the list and some that are not. ibrance, cancer drugs from pfizer, trulicity, a diabetes drug from lily.

those are not on the list, at the same time, you have a number of diabetes/obesity drugs from novo nordisk that are. >> i can't speak to other methodologies, but the law was very prescriptive about the time po period of the data that we needed to look for, so we followed the statute in terms of making sure that we were looking at the right years. so that's really how the list came to be. these are, in fact, from our data, the top-spending drugs on the prescription drug side and they really are going to make such a difference in the lives of the people who take these drugs. so as you're seeing from the list, these are drugs that people typically spend thousands of dollars a year and thanks to not just negotiation, but other parts of the drug law, people are going to see benefits really starting next year. and in fact, we've already started to see these benefits. whether we're thinking about free vaccines or insulin, which is now capped at $35 for a

month's supply, if you are in the medicare program. >> right. and then starting in 2025, we'll see people have a cap on out-of-pocket of $2,000. you made a statement this morning saying that you want to drive down prices for seniors, but at the same time, continue to drive competition and innovation. and i've spoken with a number of drug makers this summer who are all concerned and they're already starting to think differently about how they develop drugs, because in some senses, they feel that if they're going to have to enter negotiations ten years in, nine, ten years in, it shortens their runway. what do you say to their concerns about the fact that this really sort of shortens the amount of time that they can really recoup the investment in innovation? >> i would say a couple of things. it's really important that we

very much keep an eye on one of our common goals, which is to make sure that people have access to innovative, life-saving treatments. i talked to people all over the country who are making very difficult choices today about whether they will be able to put food on their tables, whether they will be able to pay their rent, or whether they will be able to fill their prescriptions. and it is crucial that we have the tools in our tool box to make sure that medicare is sustainable. not just for this generation of seniors, but for millennials, for the next generation, our children's children. and so what i would say is that the drug industry is one of the most innovative in the world. we're seeing some changes that are going to allow medicare to do what drug companies do every day, which is negotiate with private sector entities for employer-sponsored insurance. most of our coverage today is a

negotiation between drug companies and private insurance companies. they do it with the va. this is a new process, but it is one that is crucial to make sure that people can actually get access to the life-saving drugs that are coming to market. >> the administrator of a lot of these drugs were developed before any of this, obviously, a lot of this happened. and, you know, we take a lot of these life-saving treatments for granted. is thereat least the thought that we want to tread lightly on this, in terms of our system here in this country? and i think you would agree abroad, over in europe, they have had, basically, these are price controls. i know you're saying negotiate, but it's kind of a take it or leave it. there haven't been a lot of these wonder drugs developed in europe with price controls. most of them are developed in this country. so it can put -- you know, it can hurt a company's ability to

have enough money to innovate if they're not able to recoup their investment, it might be billions of dollars. do you think about that? that the future drugs, sure, you can say, seniors are going to get the drugs they've already developed, but what if they don't develop anymore in europe? is there a thought a you don't want to break the system or kill the goose that laid the golden eggs? can you at least consider that possibility in terms of innovation? >> we, absolutely, are very concerned about making sure that america remains a place where we see innovation. the drug negotiation is very much crafted to think about drugs that have been on the market. so the law is very prescriptive about saying that the drugs that we're going to be negotiating are going to be ones that, first of all, are top spenders, are ones that do not have competition and have been on the market for a length of time. you know, my experiences with

the affordable care act and really being in congress and then in the obama administration, there was a lot of concern about how the affordable care act would change health care. and of course, there were times where there were adjustments. but industry will adjust to a change. but your question of, are we being mindful? absolutely. we want this to be a voluntary back and forth with the industry. again, very confident that they will be tough negotiators with us. and we will, again, be very mindful of making sure that we are creating and keeping an environment where innovation flurries, but -- >> just wonder about what that means, negotiation? and i've had people, madame administrator, tell me a pill costs $3 to make and, you know, they charge $1,000 for it, like that's a valid argument, because it doesn't really take into account any of the development costs. it makes no sense.

but think if you did say that, it costs $3 to do it, there's a wide range of what you could do, you know, with a $1,000 drug. you could take it to $8.75, or you could take it to $10. it does make a difference for the profitability of the whole industry. what do you think -- how do you arrive at just the right number to get it down for seniors, but where it doesn't hurt a company's ability -- i mean, you do need to make money to stay in business. shareholders need to make money, they're risking their capital. >> absolutely. >> and you need to innovate. i don't know how you get at the right number and hope that you're doing it right. >> you are right to say that it is important to say that we make sure we need to take into account a variety of factors. one of the things that we're starting negotiation is the clinical benefit. one of the first things we're doing and we've outlined that in our instructions, is really

giving patients an opportunity to talk to us and say, this is what this drugs means to me as a person. this is how it's helped manage my condition. the drug companies that decide to voluntarily enter into an agreement with us will be able to submit data. they will be able to talk about their research and development costs and we will absolutely keep that as a factor, as we have a back and forth with them. we are incredibly mindful of making sure that we are giving a fair price and again, there is very specific guidance in the law, as well as, we've outlined how we are thinking about this, and how we want to make sure that it's a viable market for drug manufacturers, because, again, we know that we have the shared goal of making sure that people have access to treatments. and we want to make sure that we have a strong and vibrant drug market. no one wants to see anything

different than that. but we cannot ignore that we are not on a sustainable trajectory, if we do not do something about drug costs. again, i want to be able to promise the millennials that work with me, the children that are going to come after them, that this program will be sustainable and be around for them to make sure that they can have the care that they need. >> madam administrator, one last quick question. what about the prospect of cost shifting? we know that providers charge almost 2 1/2 times medicare rates. do you worry what this is going to do for the private market in terms of drug costs? the law doesn't really draddres that? >> we have to continue to look at all of the factors. we certainly do care about drug costs for everyone. the president is very supportive of further requirements, and as we already saw, a lot of times we see the companies adjust.

so, for example, medicare now with a cap of $35 for a month's supply, for insulin, and we've seen some of the manufacturers do the same for the commercial market. we have inflation rebates that really are encouraging drug companies not to increase their prices. these are some of the ways that we would like to see -- to make sure that people who are not on the medicare program also benefit for some of these reforms. >> chiquita brooks-lasure, thank you so much for joining us this morning. >> thank you. >> all right, thanks, bertha and madame administrator. coming up, resale goes old school for back to school. in the old days, we would have played that steely dan song, "old school," but i don't know. we don't have as much fun. but courtney does, she's live on long island and will join us next. courtney, what have you got

coming up? >> you know, have you ever flipped through the racks and had that thrill when you find the perfect treasure for such a eagrt price? i'll explain why re-sale is going old-school for back-to-school coming up on "squawk box."

welcome back to "squawk box," everybody. the futures this morning, still a little weaker. you're going to see the dow futures off by about 32 points, s&p futures down by 4. the nasdaq off by 23.

best buy moving higher after this morning's beat on revenues and earnings. quarterly profit coming in 15% above estimates. best buy also raising the low end of the full-year earnings per share guidance. the ceo, cory barry saying that demand in the environment is challenged, but she believes that we are in the low point of the electronics demand, and that as a result is part of the reason that you see that stock up 2.6%. joe? >> now to a thriving quarter of the retail world. let's bring in courtney reagan with that story. hey, court. >> hi, joe. you know, consumers are actually really flocking to re-sale, but most especially, their local consignment stories like this one here. this plato's closet in comack, long island. w winmark is the parent company of plato's closet, second time around, and some other stores. the ceo tells me back-to-school is always the busiest time of year for his company, but this year especially so with inflation still high and higher interest rates. if you look at shares of win

m winmark, they're up about 27% in a year, 2022 was a record year for sales and traffic for winmark and these franchise locations, and that trend has continued. >> it's eerily similar to 2008, 2009, and 2010. so we've sort of seen this before. and it's the same behavior that we're seeing from customers that in difficult economic times, they're sort of flocking to our concepts. and i think it's even more tur bturbo charged today because of all of the sustainability benefits that people are aware of about recycling clothing. >> digital resale platform threadup is seeing similar trends for similar reasons, economic and otherwise. >> we definitely see a pop in the back-to-school season, primarily because, you know, resale, threadup works very well under these big moments of transition, in a consumer's

li life. >> and while a consignment store may seem kind of old-school, the business model is actually much more cost efficient than some of these digital apps or platforms. because they have to take in items one at a time, catalog them, photograph them, post them, and then ship them out one by one. now, threadup does plan to be break-even by the fourth quarter, but if you look at the market caps between winmark, the parent company of these consignment stores like the one i'm standing and threadup, there's a strong divergence, and winmark is three and a half times as strong as threadup. >> not too familiar with this. >> i was just saying, our girls go thrifting all the time. it's not something joe does very often. >> no. i'm open to it. do you have a day next week, courtney, you can -- when can we go thrifting? >> thrifting? >> yeah, i've got lots of time to go thrifting with you, joe, but i will tell you, you've got

to block out a lot of time. i'm speaking with the owner here and he says sometimes there's a line out the door. there's sometimes 85 to 100 bags of clothe that he needs to go through, because there's so much inventory coming in. conversely, so much then going back out. it's a really, really popular concept. becky knows it with her teens and many others right now. i think mike santoli's teens are also very interested in this trend. >> i thought you were saying mike santoli was very interested. >> no, i was saying, it's -- i saw it on a commercial yesterday, that i was watching somewhere about their favorite pastimes are, this, this, and thrifting. >> oh, boy. >> it's a thing. >> and i can wait in a car for antiquing, but for this -- i'm not actually in there, but i'm waiting. >> maybe i'll be your stylist. i'll pick out some outfits for you, you can come and see how they it. >> outfits. >> this is my outfit. this is like the game who wore the same outfit for a year.

>> we were talking about that, how men don't have much ability to be able to kind of -- >> unless you're mac. >> -- get out of your box. >> then you've got to look unbelievable every day. >> we've got to think about, did we wear a collar yesterday, what color was it, was it pants, was a skirt. your life is so much easier, joe. >> i miss uniforms. catholic school was a good thing. take the uniform. >> the only variable is the tie. that's it. bluelulemon pants -- underwear on fridays, i change. >> tmi. tmi, tmi. that's too much. >> thanks, court. we'll see you later. a warning for amazon employees looking to stay out of the office as much as possible. "insider" reports that amazon sea andy jassy recently told workers that if they don't like the idea of coming back to the office, they can leave the company. "insider" obtained a recording of the internal fireside chat held earlier this month. the publication says that in the

meeting, jassy dodged questions about any data that led to his urgent call for workers to be in the office at least three days a week. instead, he reportedly said, it was a judgment call and if workers couldn't commit, it probably wouldn't work out for them at amazon. technical glitch in great britain that led to hundreds of disrupted flights is going to take days to fix. this is according to britain's transport secretary. hundreds of flights were delayed or canceled yesterday after a systems failure that left workers unable to process flight plans automatically. it's a hectic time for flights around the uk. the disruption comes during the busy public holiday travel period over there. >> over here, labor day. president biden approving a emergency declaration for florida as hurricane idalia approaches the state and strengthens. it's projected to grow to a

category 3 hurricane as it approaches florida, expected tonight and tomorrow morning. tampa international airport already said that it was closing and suspending all flights. this storm is expected to move towards atlanta's coastline after it impacts florida. coming up, we're going to help get you ready for the trading day ahead. futures at this little bit but right across the board. fair value on the s&p, in the green. you can get the best of "squawk box." follow squawk pod and listen any time. stay tuned. we're coming right back after a quick break. work trip. earn onekeycash. shake some hands. do not forget to laugh. [laughing] book a get-away-from-work trip. use onekeycash. order some sides. do not disturb. join one key to earn and use rewards across expedia, hotels.com, and vrbo. 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?

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welcome back to "squawk box," everybody. we're watching treasury yields this morning, a little higher across the board. ten years at 4.23%. check out shorter-term treasuries. yesterday the one year t-bill hit 5.53%, the highest level in

almost exactly 23 years. >> for more on the markets, sylvia jablonski, ceo and chief investment officer of defiant etf. where are you based? >> we're a couple blocks away from you, right here in this lovely city of manhattan. >> the pandemic, you couldn't come in on that. i'm happy you could come onset. >> i'm happy to come any time. >> is it like a dream? >> like a dream come true, it is. >> do you have pleasant dreams or are there things that cape you up at night? >> i have very pleasant dreams. i just came back from greece. >> i guess what i'm getting to is higher interest rates -- >> oh, you're talking about markets? >> yeah. >> we've got a jobs number on friday? earnings season was passed. it wasn't too bad. what should we be concerned with as investors right now? >> in the short term it will be

the data comes out. nvidia came out with stellar earnings and the market didn't move on it as much as we had hoped. that was because of the fed coming in saying, higher for longer, uh-oh, things are still too hot. the biggest risk is we may have more rate hikes and rates may stay higher longer. my view is we actually are in a good spot. corporate america is holding up. the consumer remains strong. the consumer is able to spend. i think the soft landing will be achieved. i think we're closer to the end than the beginning which we know, on rate hikes. that will give us a chance to get out of this two-year, peaceful sleepily market and probably get some growth. >> what about a recession? will the fed's work not be finished until it does orchestrate something close to a recession, at least a slowdown? >> i think it's a tough argument. if you look at 2022 and look at tech, for example, i think there very much was a recession in

tech. >> i mean an economic recession. >> yeah. i think we're going to have soft and slower growth for a period of time. i don't think expect a massive recession to happen. >> the atlanta fed is at 5%. >> i think the consumer remains strong, has all this money sitting in reserves. you've got more liquidity, more opportunity in equities, and overall you see growth. if jobs remain steady and consumers remain strong and they continue to spend, it's hard to see that recession coming. can the fed orchestrate it? absolutely. >> would they? do they feel they need to? is it the only way to get inflation to 2%? >> i think at some point we're going to have to give up probably on that exact 2% number. fed chair powell is hawkish enough to keep markets at bay, but dovish enough to say we have to wait and see the data because we are seeing softening across

various inflation measures and things like this. friday we have a jobs number. we have core pce. if these numbers are going in the right direction, maybe it will take a little longer and rates will have to stay higher for longer. i don't see this massive armageddon recession coming our way. >> kevin hassett scared me a little bit. he said the taylor rule indicates 6 or 7% for fed funds to get where we need to be, and that would be followed, i would think, by something close to a recession. then he went on to say that doesn't necessarily mean we get to 2% either. it could be akin to something we saw in the past, like in the '70s or '80s where you get slow growth and inflation, which wreaks havoc, on stocks and bonds. the worst scenario. >> that's the worst scenario. we could get to a point where inflation continues to go down and stabilize. maybe it's not 2%, maybe it's 2.5 to 3%.

at that point, do we have to keep slamming the foot on the gas pedal. >> at that point i think powell would say, yeah, we're going to two. >> he would be pretty happy. >> probably couldn't say it? >> probably not, election year coming, too. >> you never say it. >> that's what he does. >> it's like the secretary saying a weak dollar. they can't say that. >> because it creates havoc. >> and becomes self-fulfilling. >> new highs on the s&p, a all-time highs come what year? this year, next year, year after? 2030? >> i think 2025 is when we start seeing new highs. >> so more churning for another year? >> i think more churning. it will be a slow burn to the up side. i would expect markets to finish upward this year. my target for s&p 500 at the end of the year was 4,600. >> when? the beginning of the year? >> at the beginning of the year. you and i spoke about it.

i said 44 to 46. >> i didn't remember that. i'm going to right your name down. >> money on the sideline, stocks are getting crushed. you have to think at some point the fed is going to stop doing this. that bodes well for market generals. >> in the face of tech stocks. >> they're doing just fine. if you look at earnings, it's hard to argue that tech is going to fall apart. it already fell apart in 2022. ai is real. is there hype? sure. look at jensen. the 2020 view has a real look on what nvidia is going to produce. you kind of have the answer, right? >> you're going with nvidia. we talked -- in-vidia or n-vidia.

navidia is natural to me. i'm polish. >> good to have you in. >> thanks for having me. >> what's not to love? >> just a couple of blocks. >> take an uber anyway? >> city bike. >> ride fast. peddle quickly. >> that does it for us today. make sure you join us tomorrow. right now it's time for "squawk on the street." good tuesday morning. welcome to "squawk on the street." i'm carl quintanilla with david faber and mike santoli. cramer has the morning off. coming off our first back-to-back s&p gains of the month, futures look to give a little back of the open as we await inflation data beginning with jolts in about an hour. our roadmap begins with, as we said, first back to a back gain since july, still on pace for the worst month of the year. th