and "squawk box" begins right now. good morning welcome to "squawk box" right here on cnbc we are live from the nasdaq market site in times square. i'm becky quick, along with jon fortt and mike santoli joe and andrew are back off today. guys, welcome. a lot to look forward to today >> i guess we've got to fight now, mike. >> exactly right no doubt about it. >> all day, actually >> we're going to talk about marijuana stocks coming up and some wine waiting for us right over here. high times over here, unless you're looking at the nasdaq but the dow futures are up pretty significantly this morning. you're looking at a gain of 116 points we mentioned salesforce. we'll talk more about that in just a moment. s&p futures up by 2, the nasdaq down by about 24 and of course, this comes after

yet another day of gains yesterday. what is that four in a row now? four in a row that we've seen of some pretty decent-sized gains we need to wrap up august as we get into september treasury yields this morning, you'll see at this point, it looks like the ten-year is at 4.1% the two-year still well below 5% at 4.86, and again, that salesforce number really being the big excitement >> yes, certainly after hours, after that economic data yesterday did calm down bond yields salesforce shares are higher in the pre-market, adding about 80 points to the pre-market dow total, earnings of 212 per share, beat estimates of $1.90 revenue rose 11% to $8.6 billion. that beat estimates of $8.5 billion. the company delivered growth in all five of its product categories and it raised its full-year forecast ceo marc benioff says it's leading its customers into the new ai era the stock will make a bid to get

back towards that those highs from july. and it seems what folks wanted to hear, more or less. >> this is like a "c" student in high school who all of a sudden starts pulling straight as you're like, what happened all of this potential was there, especially the gross margins were impressive, right non-gaap gross margins, they had said, maybe next year we're going to hit 30% then they said, actually, this year we're hitting 30% we're going to do even better next year. i think there are some questions, though, about how durable this is. i don't want to give it away this is the subject of, on the other hand, next hour. but mule soft did particularly well and that is like data integration, getting people ready not just for the cloud, but for the zpai era >> what created the margin improvement? was this layoffs of people, was this -- like, what was behind that what got them to this position >> i think the layoffs were a big part of it i also think, i get the sense, they like to spend money over

there before like, they were just kind of, you know, they were buildings, lots of acquisitions lots of stuff was going on where they were spending the money as it was coming in they're not doing that as much anymore. >> develop quickly >> when we're talking about topline growth, and again, we're going to be talking about this all morning, how do they power that topline growth without doing some of those acquisitions, some of which do really well for them, like mule soft, then they spent four times that much on slack you did hear a lot about slack on the call. >> it's also like the "c" student who was like, it's not cool just to slide by anymore? you're not going to give me credit for that? i'm not going to be super popular. because they were popular -- >> and i can work from my potential. >> now it's like, no, no, we're not going to reward you for the bottom line results. now they're managing the company in that direction and so far it's worked. >> it's cool to be smart these days speaking of smart people, elon musk posting just after 3:00 a.m. eastern about the future of

"x," the platform formerly known as twitter he says, video and audiocalls are coming to "x." works on ios, android, mac, and pc, no phone number needed "x" is the effective global address book that set of factor is unique yesterday "x" confirmed it updated its privacy policy to include that it plans to collect biometric data from users. "x" also said it might gather information about your job and education history to recommend potential jobs for you or enable employers to find potential candidates i mean -- >> like linkedin >> i guess >> they want to be linkedin, they want to be whatsapp, they want to be -- >> you have to have everything in there, i guess. >> a lot of those bots are going to have some interesting job histories. biometric data may be -- i don't know most of the people interact on

twitter, i have no idea who they are. so address book, that's like spam is most of the people who are -- right if you have to give your name? that would help. >> address book, but you don't need a phone number to do video and audio chat i'm wondering what problem this is meant to solve, to be honest with you in other words, you can do all of this stuff somewhere else you don't -- >> the problem of getting more revenue in for "x" >> of course, but it's not exactly like that's a font of revenue, people face timing, outside of the device itself >> on your phone, it says spam call when somebody -- but on twitter, you'll have an actual handle, where you can see -- how many of the people who are tweeting at you do you actually want to talk to? >> i haven't actually looked up their numbers, so, yeah, that shows crow >> in other musk news, manhattan federal prosecutors are investigating the tesla ceo's use of funds on a secret project that had been described internally as a house for musk multiple reports earlier in the

summer said employees were working on project 42, that included plans that called for a glass building near tesla's austin headquarters. musk mocked the story on his platform, posting, this is one of the funniest things i've ever heard. where is this house? metaphors don't count! is he throwing stones? because it's a little -- you shouldn't do that in a glass house. but is this a house? i mean, musk sleeps on the factory floor. if he's already sleeping there, is it already his house? >> this is going to be something they dig into, they find more information on it's not like he needs the cash or -- >> i remember "the journal" story when the board was looking entitle. >> the board started the investigation. that's -- their own board started the investigation. >> we don't know the results of that necessarily >> exactly >> it was apparently expensive glass, but had a place for residents, potentially so the question is, did the company report it as compensation or a perk for their ceo? my guess it's probably more of the latter he probably wanted a more

comfortable workplace to sleep in, but who knows? we'll find out what the results of their internal study and then this external government stuff has to do, too and cannabis stocks jumped yesterday after a spokesperson said that the department of health and human services has recommended reclassifying marijuana as a lower-risk drug, which would ease restrictions on the business it's currently a schedule i drug, which means it's deemed to have no acceptable medical use and a high potential for abuse despite that federal designation, it has been legalized for recreational use in nearly half of the states reports say hhs recommended that marijuana be reclassified as a schedule iii drug, which would be defined as drugs with moderate-to-low potential for physical and psychological dependence well, speaking of marijuana, tennis players at the u.s. open complained this week of a strong pot smell, particularly on court 17 alexander xavier, who won his

opening match on tuesday said it, quote, smells like snoop dog's living room. the u.s. tennis association questioned officials and reviewed videos of the match and found no evidence of anyone smoking pot in the stands, but corona park, a public park, is just outside the court's gates and players speculated that the smell was coming from that park. it is legal in new york for adults to possess up to 3 ounces of cannabis and they may smoke or vape it wherever smoking tobacco is allowed >> i was complaining about this yesterday, walking down the street in new york, you run into the smell all over the place the one thing i will say, all laughs aside, there are people who have certain medications they are, if you have seizures or whatever, if you have medications for that stuck, it doesn't mix with marijuana so you could be putting them -- other people at potential for this it's not just yourself i don't care what you do for yourself, but stop blowing your pot my way >> or if you're trying to win a

professional tennis match. >> well, coco golf was explaining that the play was too slow jobs and inflation on the way, the squawk planner is next. futures right now, flattish s&p 500, modestly higher, the dow is up mostly due to salesforce's pop and snasdaq slightly negative and later, florida recovering from hurricane idalia we'll talk to the state's chief financial officer in the 7:00 hour you're watching "squawk box" on cnbc from big cities, to small towns, and on main streets across the us, you'll find pnc bank. helping businesses both large and small, 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.

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on today's squawk planner, several quarterly reports due before the opening bell. we'll hear from campbell soup, dollar general, and hormel foods. and after the report, reports are due from broadcom, dell technologies, and lululemon. on the data front, we'll get initial jobless claims and the fed's favorite inflation gauge this is the big one. core pce at 8:30 a.m. eastern time our next guest says the 60/40 portfolio is up from its deathbed and performing better, but it may be time to trim big tech names let's bring in carol sclif, good morning. it's good to see you it's true that the balance 60/40 pekt fixed income portfolio is certainly doing better last year was one of its worst years in generations

but does that mean you think it's still attractive from here? stocks and bonds have been moving in opposite directions in terms of price i guess that could offset the risk, but does it mean it's an opportunity? >> it does mean it's an opportunity. it was interesting last year, people declaring the death of the 60/40, and it was, as we all know, such a historic year with double-digit declines in both of those markets. but having a balanced approach to risk, whether it mieans the kinds of equities you're buying in your portfolio, meaning you have some conservative, some more aggressive in there, so you're balancing off the risk or plansing balancing the needs in your portfolio, even if the prices are moving around a lot, getting 5 to 5.25% is pretty attractive to a lot of people >> for sure. that has definitely attracted a lot of fresh money in terms of the equity market, what's your read on the activity recently it seems like you could easily frame it as pretty routine, you know, seasonal pullback, after a

nice rally on the other hand, you know, it seems like the equity market is very sensitive to every bump higher in bond yields. and we have not yet quite called off the vigil for potential recession. >> yeah, exactly and if you look really short-term, as in, this week, last week, you've got a lot of bouncing around, which is unusual for this time of year. we used to have a summer lull, which nobody has seen for the last few years but the market volume is so light that you're seeing a lot of pushing around on news. but you've also got a lot of people really focused on every data point, trying to figure out what the fed is going to do next and we are moving into that traditionally, seasonally scary stock market some of our biggest declines have come then there's lots of news coming in september and lots of potential headlines to drive things around so we think keeping that balanced approach to risk and keeping a foot in a lot of

different camps, playing on different potential outcomes still makes a lot of sense >> so, staying balanced, does that mean that you wouldn't just stick with the -- what's been winning so far this year, within the equity market? you mentioned maybe time to trim in tact. where else might be a better place for fresh money? >> i think looking at it, you don't want to not be weighted in tech, especially given the way things are going, intermediate and longer term in the trends in the economy, with artificial intelligence, the fracture rebuild, the greening of the grade. you don't want to be un-weighted in there, but it's important to in calmer times make sure you've set ranges for upper and lower bounds of where you want to own and things that have run up. it's interesting to -- it's probably time to trim some of those gains and looking at other places to put it some of the things that have underperformed are broader markets in general, as we know, through may, there were

basically seven to ten stocks that carried the bulk of the market so looking at some of the other capitalization styles, looking globally, not necessarily being overweight there, but looking deploy globally at some of the other pockets and poking around to see if there are green shoots in some areas we were waiting for another inflation data point here that, you know, people will certainly react to and build into their fed expectations are you confident in this disinflation trend that we have right now, that it's set to continue and the fed can more or less kind of halt here >> we're definitely hopeful that that's the routine we think the last few hikes haven't necessarily been needed from a pure economic standpoint. although, maybe to temper expectations in the markets, they were needed but the fed has given itself plenty of room and the economy has given us some breathing room, if you will, with recent data to have the fed be able to pause and stay

but we still think there's a lot of adjustment that investors need to be, because we're not quite sure they're in the camp of higher for longer and what that longer period looks like. >> right we're starting to adjust to this idea that maybe it's not going to be a quick round-trip back to much-lower rates carol, thank you very much appreciate the time this morning. >> thank you when we come back, inflation on the grapevine we'll talk about the rising price of wine right after this break. and later, we will talk food inflation and labor trends with the ceo of the fast-growing sandwich chain, jersey mike's. "squawk box" will be right back.

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welcome back, everybody. price inflation persists for consumers, including in a classic corner of the american wine industry. get this, the average price for a bottle of wine from napa valley now exceeds $100. the average price. and joining us right now to talk about that and the taste is ray isle he's the food and wine executive wine editor. ray, it's really good to see you. >> it's great to be back >> i'm stunned to hear this idea that it's -- that 108 bucks is the average price. >> it's kind of crazy it came out in a report, recently, from what was silicon valley bank, it has now been -- >> of course >> but that's a different story entirely but, yeah, it's -- so napa prices particularly have gone way up and, you know, it's a combination of factors some of it is inflation, for sure but napa rise -- is rising at a faster rate than any other wine region in the u.s. and it's because it's prestige

it's -- >> it's snobbery >> it's snobbery and it's easily the most famous wine region in the u.s. and it's one of the most famous wine regions in the world. you're seeing this not just with napa, but with burgundy, with top bordeaux the super prestige wine regions are on this rocket incline at the moment and it's kind of weird i mean, because it's -- you know, i got into wine trying napa valley wines when i was a grad student i was not paying $100 a bottle, i can guarantee you that i was saving my burrito money. >> you're not paying 100 bucks a bottle now the idea that blew me away that this was the average >> yeah, but already a lot of people who are and i think the question that's interesting for napa -- >> they're making up for my two buck chuck purchases >> they're absolutely right to cover. they're trying to balance things out there. but the interesting thing for napa is that it used to be the region that you learned about wine from, and now it's more like, you know, the maserati region in a sense. and you're seeing it with prizes

on hotels there, which are up. and the price of even just a tasting has ended up around 80 bucks on average >> it used to be in some places free >> it used to be free. the funny story about napa valley and they're the ones who started the whole thing paying for tastings they did it to slow people down. they didn't think it was a profit center. the problem was everyone was stopping lightning highway 29 and downing everything -- because it was all free, why not? and then they would run into a tree >> okay, that makes sense to actually say, no, you're going to come in and pay something this is not a free for all >> and then they realized, this is actually a pretty great profit center. what's weird, it used to be your tasting room fee kind of covered the cost of goods. now with this kind of exp experiential side, and this is post-pandemic too. you belly up to the bar. now it's more of a restaurant

model where it's a sit-down tasting. someone comes and pours you wine, you learn about the wine, and they charge you more for it, but it's much more of an in-depth experience of the wine, which is cool, actually. you're getting, you're paying more, but getting more for what you're paying, you're not getting that crammed in -- >> that makes sense, but the average bottle of wine up $17, that far outstrips the pace of inflation. that really is >> but that is in napa you're looking at the prestige region if you look at sonoma, for instance, and this like the first one we've got is sonoma's infidel. >> go ahead and describe it. >> so this is from dry creek vineyard, their heritage wines this is 28 bucks a bottle. this is not a crazy wine it's in our september issue. we do a bunch of fall wines in september. it's a lovely wine it's got tons of flavors, blackberries, black cherries >> mike and i have decided that john will be our tasting guy

>> i'll take the pbullet, too. >> and you'll be with us for the next few hours >> try it out, what do you think? >> it's, you know, it's a wonderful wine it's not a $150 wine, a crazy priced wine, but a really good bottle of wine it smells terrific a little bit like boisen berryy syrup. >> do most people buy a bottle of wine and keep going it as the price goes up, or buy a price point so they end up trading down even within napa wine >> this is one of those questions, do you keep your long-term customer base or move your customer base up to a higher price level most people when they walk into a store, they have a price in mind like, i'm spending under 40 bucks, under 60 bucks, under 10 bucks. people when they go to a tasting room, they fall in love with an

experience, fall in love with the wine, join the wine club, they tend to be loyal and follow the price increases. there was a case a long time ago with caymus, they jumped their price by double. they went from $35 to 70 bucks a bottle and didn't lose customers which was kind of crazy. and they wanted to change their appearance to the world. >> try the second one. we're almost out of time >> the second is from paso robles this is an expensive one this is 90 bucks think a sira and linne calodo, they halved their tasting room fees. that may be great marketing. and our third wine, because we needed a napa valley wine, this is from realm cellars, which is one of the pot, culty, hard to

get the wine 160 bucks a bottle not crazy for napa >> and it's the pest one, of course >> it's a beautiful wine this is called the bard. it's their flagship wine gorgeous cabernet. what it makes you realize is that there is a reason why napa is famous and there is a reason why the wines cost a lot of money, because they're really good >> it's reassuring that the market is still at least on some level -- >> a maserati is a really nice thing to way and a napa valley cabernet is a really nice -- >> this $28 bottle one -- i don't drink much red wine. >> i'm a journalist. if i buy wines, i'm the 28-buck zone >> thank you for coming in here. >> ray isle is food and wine's editor and he has a book coming out in the fall. it's called, "the world in a wine glass" out on october 14th. you'll have dto come back

>> how you feeling >> i'm feeling good. it's like "squawk box," you have to sip new data from china shows another contraction in manufacturing activity the china beige book says there may be reason for optimism about china's recovery that story is next and as we head to a break. look at yesterday's s&p 500 winners and losers you can see insulet, all-state, match, and estee ldeaur there in the winners category >> and discover the equilibrium that works for you. at national, you're in control. skip the counter, choose any car in the aisle... and manage your rental right from the app. so you can mix work... with leisure. or leisure... with work. giving you the control to find the perfect balance. go national. go like a pro.

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. good morning welcome back to "squawk box. we're live from the nasdaq market site in times square and we're watching the futures this morning. a little bit of an unusual activity here. dow is up pretty big, up by 135 points versus up almost five points for the s&p and the nasdaq being indicated off by about six points that's because the dow's really being helped out this morning by salesforce it beat earnings expectations and it raised its full-year forecast we'll have more on that stock coming up at the top of the hour, but that is responsible for about 80 points of the gains that you're seeing in the dow.

dow still up by about 133, above fair value a little bit of other things that might be moving underneath the surface, but salesforce is the biggy. china's latest report on factory activity contracted for the fifth straight month in august, but managed to top expectations our next guest has new data that is telling a more upbeat story about the chinese economy. joining us now, china beige book international coo, shahzad cozi. appreciate for joining us this morning, shahzad it's been a pretty steady d drumbeat of somewhat disappointing numbers both on the manufacturing side from china as well as the consumption response to a reopened economy what are your numbers telling us >> yeah. look, in recent weeks, there's opinion a pretty scary consensus building that the chinese economy was on a verge of collapse and the latest data out from our survey is pretty clearly show that's not the case. consumer spending has been much more resilient than markets have

realized, specifically in the travel and leisure sectors, but even retail sales seem to be on track for an august rebound, with luxuries looking good again, car purchases, furniture and appliances and so forth. the problem within the chinese economy seems to be concentrated within the property sector, and that's, i think, overshadowing what otherwise may be a bit more positive of a china story this month. >> is the property sector, though, to the a broader overhang on the economy? i mean, it seems not just because people are concerned about potential leverage in the system, and some of the system issues, but just because it seems like perhaps it's causing less aggression among consumers to spend than it otherwise might. you hear the authorities there trying to stimulate a little more consumption than they're getting. >> yeah, look, the property s certainly a drag on growth this year, but the property market story is going to be with us for, i think, at

least the next couple of years, where we get more bad news, potentially, on the developer front, with potentially more developers looking like they are going to be missing payments, going under, and so forth. and i don't think that purchase sentiment around homes is going to be revived that rapidly so i think this remains a negative china story that investors have to deal with for the next year or so. >> what do you make of the various policy responses it seems like most days we wake up and they're changing rules about stock trading or taxes or attempting to try and speed up the activity there >> what we've seen this year, on the policy front, is continuous support, although, of course, very moderate and modest efforts, as opposed to the market's desire for big stimulus rollout. the impact, i think, will be marginally positive.

it is worth mentioning that one of the clearest places where there has been a lot of policy support all year long, but gone unnoticed is on the monetary side you've seen credit costs falling essentially through the koucoure of the year. the most important thing that's happening now is that companies seem to be coming off the sidelines and looking like they're interested in borrowing. we may potentially be seeing a turn there >> we obviously just were tracking commerce secretary raimondo's visit to china. it seemed like there was a relatively constructive feeling that was left by that, by the series of meetings, and by some of the commentary around it. do you think that there is some kind of more stable trade relationship that is developing at this point and how is that being dealt with domestically inside china, in terms of their investment in export-led growth and such >> yeah, i don't know how much of that will stabilize the trade relationship, which seems to have found quite frankly a new normal, anyway, since the onset

of the trade war, you know, four to five years ago at this point. but i think the most important thing is that on the u.s./china geopolitical front, it looks like the biden administration is basically, we've seen peak china policy coming from them, a more muscular, aggressive action not coming down the pipeline anytime soon that said, there are certainly many pieces of legislation that are making their way through congress, which will, i think, continue rattling markets and keeping investors a little bit on edge when it comes to the geopolitical tensions and the decoupling fears between the two countries. >> we had a guest on yesterday who said that if china slows down, it's not necessarily going to have impact on the u.s. economy, but if shine slows down, it will have some impact on the globe how do you try to figure that out or what are your thoughts on that >> i think that the clearest impact is going to be and will remain on the commodities producing countries. they will be the most impacted

specifically as we discussed, as it relates to the property sector and the construction slowdown out in china. but the big, more mature companies like germany and japan and south korea, they all suffered, because they all have important trading relationships with china, and depend in part on chinese demand. so there's no question about the fact that there's a global -- there are global ramifications of a china slowdown. of course, on the other side of it, the chinese economy is incredibly sensitive to a slowdown in the western economies. we're already talking about a slowdown and recession fears out here, out in new york. so there is that feedback loop that is probably more important. >> do you think the rebound in travel activity in china is going to be sustainable? there was a lot of talk here, of course, that there was revenge travel, it was going to be a brief period, but then it actually has persisted for a couple of years. >> yeah, i think, you know, probably for the year are at

about a peak i don't necessarily expect it to get any better we are seeing quite a strong recovery in that sector. the real question, i think for us remains, can we get chinese consumers to broaden out their spending from things like travel and leisure to a more sustained pace of growth, with things like autos, with things like luxuries, which are incredibly important, and can you start getting buyers to come off the sidelines and move into the housing market later this year as we get into early next year >> for sure. appreciate you running through that with us thank you. when we come back, we are going to run through some of today's biggest pre-market movers stocks to watch is next. and later we'll talk to the ceo of sandwich chain jersey mike's on expansion, food prices, and much more. sq "squawk box" will be right back.

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welcome back to "squawk box. some stocks to watch shares of chewy are lower this morning. the pit retailer reported surprise second quarter profit and sales that beat expectations, but the active customer count and the company

held its full-year outlook steady on the call, the company said they expect the industry to cut prices as consumers become more discerning about what they buy they noted a change in consumer behavior, including a shift from wet food to cheaper dry food pet retailers have had it tough. down 6% for chewy this morning >> i always wonder how much is it the consumer feeling the pinch, or pandemic effect, you were getting more pets, you were spoiling them a lot more, people bar back out >> opal, my cat, is eating more dry food just because she's taking more time to eat it >> my dog likes it my boy cat likes it better -- i think of him as a dog. >> i think to your point, different categories have had really long-lasting revelation about how much pull forward there was in the pandemic. dick's sporting goods, there were downgrades on, it looked like people bought a lot of

athletic and fitness equipment in the pandemic, and it still wasn't quite quantified. >> all the boat makers are down bigtime, because people aren't spending the same. they're offering big discounts i don't know if that's a reflection of the consumer not having as much money, or everyone who wanted a boat got one. >> spend it on wine. >> $108 bucks for an average bottle of wine >> and chewy is delivering you really heavy stuff it's not necessarily -- if you're just getting the basics -- >> it's that kitty litter that gets you shares of five below are down this morning. earnings of 84 cents a share beat expectations by penny revenue was in line, but the company's current-quarter guidance came in below expectations it adjusted its guidance for the full year to account for an anticipated increase in shrink or the loss of items because of theft, fraud, or employee error. that's what we've heard from so many of these retailers, high-end, low-end, all over the

place. low price point, i guess really portable stuff somebody upgraded five below in the last couple of months based on the barbie effect because they felt as if there would be so much >> i don't know. it's a serious issue if you talk to a lot of these retailers, they are talking about very serious i think different retailers use it to a different degree >> i'm not saying it's not a thing, it's just not what we're seeing -- >> but they will tell you that it's especially bad in states and cities and regions where they have loosened police protections or where they have loosened what they will go after and prosecute you for. if they know it's 800 bucks or less and not going to get prosecuted, they know that they'll walk in and steal up to that amount. it's a serious issue a lot of these retailers are having to think about whether or not they're going to close stores in some of those areas, too. i think you're right >> and self-checkout >> right

self-checkout with some of these things but i do think that some of them use it more than others as an excuse we're also watching shares of costco. the company said same-store sales rose again from july, as a result of what they're saying was strong performance outside the united states. comp store sales were up by 3.4% in august year over year, after a 2.5% increase in july. the u.s. showed costco's weakest sales growth up just 2.8% versus a 7.3% gain in special markets and that stock up right now by about a quarter percentage point. >> shares of crowd strike are higher the security software company reported earnings of 74 cents a share, beating estimates of 56%. revenue also beat. the current-quarter forecast came in slightly above expectations and the company slightly raised its full-year forecast and also in the security realm, big jump for shares of okta. earnings of 31 cents a share beat estimates of 22 cents revenue of $556 million beat

estimates of $535 million. the identity management software company said it saw signs of stabilization in i.t. spending, which is a theme that we have heard, not a v-shaped type recovery frank slootman of snowflake told us this as well as george currian of net happen. but it's stabilizing and rising a bit as large customers in particular get more confidence >> pback really quickly to what we were talking about with chewy, the term they use is pet household formation is down. you're right, people aren't getting new pets where they need all of the equipment, the beds, the toys, all the things you would get in the beginning and that's probably the more profitable stuff >> they're less lonely up next, new data from flight price tracking service hopper next. and a reminder, you can watch or listen to us live anytime on the cnbc app. we'll be right back. ♪ opportunity is using data to create

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welcome back to "squawk box. inflation is not scaring consumers who want to get away this holiday weekend let's talk about travel trends according to travel tracking firm hopper, about 20 million passengers are going to depart from u.s. airports this weekend, with tomorrow being the busiest travel day that's up 14% compared to this time last year joining us now to talk more about travel is hayley berg, hopper lead economist. good morning so, we hear a lot about a shift toward international travels is that still happening even over this weekend, or is that too short a trip >> labor day weekend is typically a domestic heavy

holiday weekend. we see that in the most booked and the highest demand destination, las vegas, atlanta, denver we are seeing some demand international, capacity was added back on international routes as well as domestic this year but labor day weekend, it is short, most people go for two, three nights max, so very domestic heavy. >> we're not talking as much about gas prices this time around in the inflation picture. how is it looking with rental car prices so if you got the option, you probably already decided you're not doing a last minute trip and deciding between plane or car, but car has gotten a little more convenient, right? >> tremendously less expensive average car rentals are about $41 per day across the u.s a little bit more expensive in smaller cities but combined about 11% savings on car rentals with lower fuel prices overall road trip is a lot less expensive than last year or 2021. >> i don't know if you have data on this, but i feel like i drive

down to the d.c. area, my parents are still there, that's where i'm from it used to be that, you know, there was this rush hour effect, you would hit traffic after 5:30, 6:00 p.m., up until around 8:00, but maybe this hybrid work trend changed things, maybe even especially in holiday weekends where people are leaving on thursdays, fridays are more staggered, maybe are you seeing this new way of working affecting the travel patterns and maybe even people's willingness or flexibility to travel >> we're absolutely seeing remote work, remote work flexibility impacting travel patterns, not just in driving, but also in flying and hotel stays. it is true we heard it from many sources that traffic patterns into and out of cities have completely changed mondays and fridays, not big traffic days because most folks who can work remote are. same for flights and hotels. historically thursday and friday are the busiest days it depart on a weekend get away.

sunday, the busiest day to come back that hasn't changed fundamentally, but you're seeing huge increases in travelers departing on wednesday night or coming back on a monday morning. so, those days are typically less expensive, so the flexibility that remote work is giving travelers is not just allowing them to beat the crowds, it is also allowing them to tap into lower prices that are available on the low demand check-in or departure dates. >> let's talk travel hacks for a bit. my dad used to like to leave at 4:30 in the morning, right, to beat the traffic getting up, bleary eyed, piling into the back of the car in air travel, it seems like middle of the day is a lot worse than it used to be just because maybe the personnel aren't there, you have flights and delays stacking up waking up early as my dad's method back? >> it pays to get up early for a flight not only are you going to see typically shorter lines for

those very early can6:00 to 8:00 a.m. departures but you're less likely to be disrupted a lot of the delays because of late arriving aircraft or tarmac-related delays. someone gets canceled or delayed in the morning and it impacts all of the flights for the rest of the day so if you can depart before 8:00 a.m., you're about 50% as likely to be delayed as you are later in the day, so take that, that discount on your percent chance of being disrupted, leave before 8:00 a.m. and it will pay off. >> how do make money at this giving up my seat, can i make money off delays, what's the way to take advantage of the issues out there? >> we are expecting disruption this weekend it is a busy long weekend, so there is always going to be an increased chance for delays, cancellations. throw on there that we're seeing a hurricane in florida, georgia, south carolina, disruptions are going to happen this weekend if you're flexible, oftentimes

airlines will offer you financial compensation to switch to a different flight. and that might look like future flight credit or something like a visa credit card with the cash on there that you can use immediately. so if you are flexible, check your app and check with the gate attendant to see if the flight is overbooked or if they're looking to get staff or other passengers rebooked on your flight, you might have an opportunity to cash in on that next vacation if you got a little bit of extra time. >> all right, depends how much you really want to see those people who you were going to see. hayley, thank you. coming up, shares of salesforce lifting the dow after an earnings beat and raised guidance details on that straight ahead and later, the fed's favorite inflation gauge is due at 8:30. we'll get core pce price data and personal income and spending as well as weekly jobless claims "squawk box" will be right back. it needs the right ai for your business. introducing watsonx:

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good morning wall street notching a four-day winning streak and this morning fed speak and inflation data in focus. we'll find out what you need to be watching ahead of the opening bell here on wall street. salesforce stock ripping higher, fueled by quarterly results in the a.i. boom

closer look at the future of cloud-based software company and its profit picture is straight ahead. plus, insurers now bracing for claims after hurricane idalia rips through florida. florida's cfo will join us with an update. the second hour of "squawk box" begins right now good morning welcome back to "squawk box" here on cnbc we're live from the nasdaq market site in times square. i'm becky quick with jon fortt and mike santoli u.s. equity futures this morning are a bit of a mixed picture you're going to look at a very much stronger picture for the dow future up by 120 points above fair value this comes after gains for four days in a row. s&p futures up a little bit, three points the nasdaq is a little bit

weaker the real issue that has been helping the dow is salesforce and we will talk more about that in a moment. you can see right now the treasuries picture, yields a little weaker. ten-year at 4.1% the two-year at 4.86% and oil prices, which had been above $80 a barrel, let's look now, you'll see wti at $82.16. that's up another 50 cents or so ice is at $86.50 a barrel. crypto prices, which had gotten some real help earlier in the week after that ruling from a court in d.c. and the circuit of d.c. actually ruled against the s.e.c. in favor of gray scale and its ability to bring that bitcoin etf to market, you can see right now bitcoin prices 27,201 >> that's good for bitcoin let's going to frank holland with a look at this morning's premarket movers. >> having a fun morning. wine a short time ago. now a little cannabis. cannabis stocks are surging on reports that u.s. health

officials, they're recommending that cannabis be reclassified as a schedule 3 drug. cannabis is currently schedule 1, the same as heroin. canadian cannabis tilray moving higher you see shares are up 4% tilray up 3.5% the biggest beneficiaries are u.s. cannabis stocks not showing them here, closing double digits higher but trade over the counter so they don't move in the premarket. up here up top is the msos pure u.s. cannabis etf trades on the new york stock exchange, up over 1.5%, something to watch if you want to invest in u.s. cannabis stocks okay we also have earnings movers talking ubs, the bank surging after its biggest quarterly profit ever in the second quarter. shares are up over 5%. ubs benefitting from its takeover of credit suisse.

ubs confirming it will integrate the businesses of credit suisse by next year and then we have our big stock story of the morning. salesforce, accountingfor the major of dow future gains. shares now up almost 5.5%, beat on revenue, beat on eps profit, 11% above the estimate, raise in full year guidance partly because of the 9% product price increase that began this month salesforce also offering monthly subscriptions for its generative a.i. offerings i was listening to the call, i counted right around 50 mentions of a.i. on the call. that was even before the analyst kwa q&a. shares up 5.5% back to you. >> benioff has the swagger back just in time for dreamforce, thanks now joining us for more on the markets, kara murray at castra investment management. pce coming up shortly here how closely are you watching this key inflation gauge what are your questions in it and how are you going to respond

to it? >> inflation still remains incredibly important question for both the economy and the market and what we have seen is a lot of the work has been done. all of this incredibly fast and sharp rate hikes that the fed has engendered has brought inflation down as we say, that last mile is kind of the hardest. so, you know, no one number is going to determine the trajectory of where inflation goes but we're going to need to continue to see these numbers ease in order for the fed to have confidence that we're heading towards this 2% target >> how much do you think we have already seen the impact in the economy of those big hikes last year takes a while to move through the economy. i think it is a big question is how much help what has already been done will do for that last mile and bringing inflation down closer to the fed's target >> it is really hard to say. so, central bankers talk often about these long and variable lags of monetary policy. and we're seeing exactly that

happening right now. and this cycle is particularly interesting because we had more than ten years of ultra low interest rates, so large areas of the economy have had the opportunity to really inoculate themselves against these higher rates. so, think about homeowners who have fixed rate mortgages, or companies who extended out their debt and moved from floating to fixed rate so all of these things mean that as interest rates go up, those folks haven't really felt the pressure now, other areas of the economy that do have interest rates reset, we are starting to see stress so think credit cards, where, you know, credit card balances are now above a trillion dollars, we're also seeing delinquencies now that are at their prepandemic levels we're seeing corporate bankruptcies on an annualized basis this year at the highest level we have seen since 2010. now, these levelsare not at, like, hugely stressed points but they are increasing and they're showing that this

monetary policy is starting to finally sink in. >> yeah. if you have assets, if you've got low debt, if the debt you have is locked in, you're feeling this inflationary environment a lot less and if you're spending, spending, spending or having to. we got one trading day now in between us and the jobs report i know i'm going to be watching the wage data, particularly closely because of inflation, these issues we have been talking about. what are you looking for from that report and how do you expect it to affect the markets? >> the labor market is a good example of a part of the economy that takes a long time to start to feel these effects of tighter monetary policy. so we have been waiting, looking really closely for signs that the labor market is loosening and it has taken quite a while we're starting to see a number of different points of evidence that suggest that loosening in the market is actual happening job openings are down. we're seeing consumers who are

less confident about finding a job and company ceos saying they're less interested in hiring going forward so you put all of these different pieces together, i think that will translate to the lower payrolls number tomorrow, and this is a point where bad news is good news. we want to see that softening. as you pointed out, it is the wages ultimately really important because that's the impact for inflation and, again, there is a lag between when those jobs come down and when wage inflation comes down so we'll have to see how long it takes before that starts to really kick in >> yeah. we'll see what the uaw has to say about that too kara, thank you. >> thank you coming up, hurricane idalia now a tropical storm, but not before leaving a path of destruction across florida, georgia and south carolina and now insurers are bci frangor claims we'll speak to florida's cfo jimmy patronis about the damage and the struggling insurance market "squawk box" will be right back.

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and it's all right here. streaming was never this easy, you know. this is the way. you really went all out didn't you? um, it's called commitment. could you turn down the volume? here, you can try. get way more into what your into when you stream on the xfinity 10g network. insurers are expected to face claims for billions of dollars from hurricane idalia. and that could result in higher premiums for customers contessa brewer joins us now with more. good morning >> good morning. it is still really too early, becky to have an accurate handle on all the damage idalia delivered, but florida in particular has been in a peculiar insurance environment p

hard-hit by hurricanes, laid low by litigation and floundering in fraud, many insurers have folded or fled over the past few years. they just could not make the numbers work there the state insurer of last resort, citizens, saw a boom in customers probably because they couldn't get policies elsewhere or could not afford them according to the insurance institute, the average insurance premium for homeowners in florida spiked by 42% year over year to an average of $6,000 now, the state went in, tried to prevent the collapse of the industry with a new law to address some of the more egregious abuses the state says, look, it is working. it has now approved four new companies who have come in to apply to offer insurance in florida, but certainly it is not a one size fits all solution, becky, and there is still problems ahead >> contessa, thank you very much i know you cover this closely and will bring us updates as we see more contessa brewer.

for more, we want to bring in jimmy patronis, chief financial officer for the state of florida. we have spoken with you in the past about some of the issues you're facing there with insurance companies having a hard time making sure that people there actually can get insurance and when they do, it is going to be quite a bit more expensive. what is the situation with the idalia how are things faring there? what have you seen in terms of people at this point and any potential damage >> sure. thanks for having me, becky. in the state of florida, i wear a few different hats i'm the state fire marshal we're still coordinating urban search and rescue missions now 80% of searches have been completed in the affected counties the silver lining to this is idalia went through one of the least-populated areas of the state. it was a very narrow part of the state, but it was also a very fast-moving storm. so fast-moving storms don't have an opportunity to dump as much rain the flooding has a different effect when the water has to go

somewhere. if there was a path that idalia could take that was the best output for at least the insurance market in florida, it took it, and i'm grateful for it. >> yeah. we're grateful for it and thankful to hear that news the broader problem, though, just what's going on, this is the beginning of hurricane season you got several months left. the waters are very warm right now and there is potential for more where do things stand as contessa mentioned, you have taken steps to try and ensure there is less fraud taking place and it is a lot harder to scam things through the legal system. that's good news but if you look, some insurance companies have pulled out, citizens, which is the insurer of last resort, i think, now has 1.3 million people or homeowner policies on it, versus something like what was 400,000 back in 2019 that's a real issue. how do you assess that situation? >> sure, so the florida market

with citizens, it swells and grows over the last ten years. you go back and reflect on 2010, citizens was actually bigger in size than it is currently right now. so, right now citizens has requests for 300,000 take-out policies, that's all good news most of those carriers, though, that are coming into the market, the new carriers you mentioned, they're interested in coming into the florida market in october, november. and, look, if you're an investor, you can't blame them they're going to wait and come in at the tail end or the end of hurricane season just less liability if you book a business so, those trends are there what we also learned is 70% of all litigation that originated nationwide originated out of the state of florida, yet only 7% of all claims originated out of the state of florida so that's why we had to fix our insurance market, that's why we had two special sessions as we closed the litigation

loopholes that existed, it also is going to have a dramatic effect on the fraud that was gaming the system. >> the other problem, though, is that citizens, look, i get it, you have to make sure that homeowners who can't get a policy elsewhere have a place to get it from what i read, citizens rates are about 40% lower than the rates that are charged by the private insurers the problem is, if they go belly up, if they doe bgo bankrupt an out of funds for things, it is a fee charged, an assessment on all insurance companies in the state of florida, so that if you're somebody who, you know, assuming the costs get passed on to florida consumers, if you're somebody who has a car and is paying for auto insurance in the state of florida, you can't afford a house, you're fees that get passed on to all the insurers and there were ten years of assessments that got dealt with to deal with the ten hurricanes that had hit during that season. that is a little bit weird too

i know citizens is asked to increase rates, i think they got turned down for an increase that they were seeking. >> and you're spot on. when you got a florida legislature that plays into the policymaking process of the insurance of last resort, they get their buttons pushed by their constituents so there is a path in place that allows citizens in order to try to get the rates that it needs, and, look, it is kind of a -- it is a happy medium. you got to be able to strike, but the trends that i'm seeing are there. the trends i'm seeing are good there is interest coming into the florida market and this, again this is not the first time we have faced this exact same scenario other things that have happened is hurricane cat fund, it has more cash in it now than it ever had. we still put those systems in place. we learned a lot of lessons after the storms of 2004 and 2005 after hurricane andrew and we have to keep the bigger reserves in order to help the

state of florida be able provide an affordable insurance. we have a aaa bond rating for the last five years in a row by all three credit rating agencies they wouldn't give us that if we weren't doing the right things financially and citizens can be a liability to the citizens of the state of florida, to the government of the state of florida but i'm sitting on $20 billion in reserves, it typically has been about $4 billion in reserves. >> jimmy, how are the conversations going with private insurers there were insurers who pulled out and said we're not going to do business there anymore because it is too risky, we don't think we'll be able to get return how are your conversations going with those private insurance companies at this point? >> well, look, i think we have talked about it before i beat up on farmers i'm frustrated in how they handled their exit from the florida market i was mad of how they let agents with no products to sell but they got bigger problems to deal with than florida they're cutting 2400 positions right now as we speak. so, again, i'm optimistic simply

because my phone has been ringing because capital wants to come to the florida market 400,000 people moved to the state of florida last year alone. that's new residents when you're seeing a mass exodus of other states, there is a market growing in florida. and, again, we continue to try to create the environment through litigation reform, through closing loopholes, which ultimately, it fixed the fraud problem. the fraud is this area of gray and, look, yesterday i went and cruised the parking lots of taylor county where the storm made landfall and i saw a lot of shady looking characters already prestaging in their rvs and campers going door to door and i go door to door with those people also with our lights on and say the games you're going to play in the florida market after the storm when people are vulnerable are not welcome and we'll run you off. >> what are you hearing for the rest of the hurricane season >> well, again, i was on facebook last night, sometimes i

got to vent. and i don't know what it is with the state of florida and hurricanes that start with the letter i i'm glad i has passed us, whether it is irma or ian or ivan or now idalia, it seems like this part of the year, this storm, you know, definitely creates trauma for the florida market the silver lining to all this is what we saw that took place. there is an active set of systems right now in the atlantic as we speak so we're monitoring, but, look, the governor is leading, kevin guthrie is leading we have good folks being prepared, but it is florida, florida is going to be susceptible to storms. we're not going to be able to change that. we can continue to harden our homes and increase building codes to make sure our homes are more resilient and we handle the litigation environment the insurance companies and the carriers we met in new york last year, they said, jimmy, we can model for hurricanes, we can't model for your litigation environment you got in florida this is exactly, exactly why we had to have the special

legislative session last year. not one, but two, in order to fix those challenges in the market >> jimmy patronis, the chief financial officer of florida jimmy, thank you for your time good luck with the rest of the efforts dealing with the remnants of this storm >> sure. thank you so much. and, look, visit volunteerflorida if you can help us out we have people hurting we would love to have support of the generosity of your viewers and becky, you got your a-game on, thank you for having me. >> take care. coming up, a dive into salesforce earnings. that's next. speaking of salesforce, look at the futures. it is helping the dow at this point. most of what is helping the dow, you can see it is indicated higher more than 100 points. s&p about flat nasdaq as well "squawk box" will be right back. time now for today's aflac trivia question. what publicly traded company owns the ice cream brand ben & jerry's?

the answer when cnbc's "squawk box" kins.

salesforce ceo marc benioff

yesterday had earnings results that beat on the top and bottom line and said the company will also meet next year's profitability targets a year early. has salesforce transformed into a growth and profit machine? jon fortt has an opinion on this >> yes yes. i have two salesforce is clearly firing on all cylinders again, revenue is up 11% operating cash flow is up 142%, remaining performance obligations up 11% too, suggesting there is momentum here it is an important moment for salesforce because at the end of last year, the wolves were circling hedge fund starboard value took a stake in salesforce saying growth and profitability were subpar inclusive capital and others piled in in november, brett taylor quit benioff vowed to slash 10% of the workforce, then cut more well, now faster than almost anyone predicted, salesforce has its swagger back shares are up 60% in 2023 and

not just because of the cuts on the earnings call benioff telegraphed he's gearing up for a big artificial intelligence push at dreamforce, the conference in two weeks. a case he's building for the growth side of the equation. he's calling for an a.i. buying revolution, foundation is clearly already laid for that. mulesoft, which salesforce acquired, is helping them ready customer data for that a.i. surge. >> so it is as easy as that, jon, disciplined version of salesforce is what we can expect from here on out >> well, on the other hand, mike, it is way too early to call salesforce a growth and profit machine the profits are nice, you can get that from a 10% workforce cut, but benioff said on the call he's not planning to do that again he also said 30% nongap gross profit margin should be the floor, not the ceiling salesforce needs to continue to grow the top line at a healthy clip and benioff tended to rely on acquisitions to help that

happen mulesoft, hero product of the quarter, salesforce bought it for $6.5 billion in 2018 benioff paid four times more for slack two years ago and slack was not the hero of the quarter. so, are investors going to trust benioff to start an a.i. acquisition campaign to get revenue going above 11% again? just a year after he got religion about cost controls i got my doubts. either way, a slowdown could be coming north america was the weakest market for growth last quarter and it was manufacturing automotive leading salesforce's industry momentum. that's the same automotive industry that could be facing a massive strike soon. so, we'll see if they keep on it. >> for sure. i guess it is debatable whether this is a really good environment for a big company like salesforce to be on the m&a trail. you have a lot of companies, two years ago, that were big, exciting, new entrants into the market now their valuations may be moderated. >> things that are a.i. startup

specifically are still pretty darn expensive we're getting the headlines about open a.i.'s billion dollar years. they're bringing in some -- i don't know maybe benioff will be able to talk them down there is also a lot of data industry pipeline stuff, muleso mulesoft-ish he may want to buy. >> i guess the question too is the market going to be happy as you mentioned if he goes at that route? what they really want you to do is sit there and harvest the cash flows. >> exactly eventually they also want to see that topline growth. we heard that on the call. >> can't be a giant company and not have an a.i. play that is going through at this point? i think investors want you to do everything but if you're not falling down the a.i. path, i think you'll get burned in the not too distant future. >> oracle has been good at that. and benioff used to work there i got to plug the on the other hand newsletter. let's put the code up on the

screen or if you don't want to take your phone out and scan that code, type in cnbc.com/otoh, see easy access to the weekly poll on linkedin, which i'm about to post you can weigh in, let me know which side of the argument you agree more so let's get the results from the most recent topic. is nvidia benefitting from an a.i. bubble or are its blowout quarters signs of steady demand? 42% said bubble. 58% steady demand. there is some stockpiling going on out there. >> yeah. >> that's hard to say. a.i. bubble or blowout five times fast. >> a little bit of wine. >> good. >> still to come this morning, it is a crucial 24 hours for the fed. steve liesman joins us to explain just what you should be looking for, what they're looking for, over the next 24 hours. plus, the founder and ceo of jersey mike's subs will join us to talk food inflation, customer traffic and the state of the fast food business and later, investors will get

some key inflation data. we have the numbers and the market reaction a little over an hour away. "squawk box" will be right back.

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going to be a big part of the fed picture, looking ahead michael pawn is here to talk a bit about the inflation and fixed income outlook and the economy. michael, good to see you we obviously are expecting based on the consensus just a little bit of a pause in this disinflation move in terms of core pce that we have seen for a while. we also have atlanta fed president rafael bostic overnight in a speech essentially almost declaring victory saying if he took out the lagging shelter components of inflation we're almost at target in terms of core pci.

>> we think it will pause. we think we'll get a bit of a stronger number in the core pce, especially in the super core so stripping out shelter within services we actually think it will come in at a fairly strong .5, which is not going to leave the fed with an impression that they're making continued progress. inflation, while down from its peak, is still too high. so even atlanta fed president bostic's comments, while the market is taking it as a bit dovish, he indicated he thinks, again, he's one of the more dovish members, he thinks they'll be on hold at a high level of rates for quite some time the market is pricing in cuts as early as the beginning of next year we think the market is still bearish, relative to the outlook and not fully getting the message that the fed is keeping at it. that's really been the message since jackson hole 2022 that was

reiterated at jackson hole 2023. we think the fed will remain on the hawkish side until inflation really does come down much further toward target. >> i grant that the fed funds future market does start to price in some cuts out there does that in your mind mean that most investors genuinely expect there to be cuts or is that just kind of the way we manage risk in this economy, the fed is almost done, so the next significant move is likely to be a cut or at least we want to have a just in case trade on in the event that does -- that the economy weakens? >> i think that's a really important point about how markets price. markets don't just price for baseline scenarios, and if you -- just above 5, if you think there is a chance of zero by the end of next year because of some absolute crisis, well, there is probably not much of a chance of 10%. so, are rates going to be 5%

higher or 5% lower, chances are they'll be 5% lower, but we think the market is still priced for too much confidence, too much risk of that downside scenario and we think short end yields are poised to continue to move higher as they have been. >> right what do you make of the fact that we did see a pretty significantrally in treasuries yields coming down for a couple of days. based on some secondary economic inputs, right? the jolts number, which is widely watched but never was front of mind and then the adp payroll data does that tell you we were wound pretty tight expecting a hotter number >> yeah. the market did sell off pretty hard over the prior weeks. and so it was probably due for a bit of a pullback. but today and tomorrow, especially tomorrow is the main show when it comes to the data adp and the jolts data are good at leading indicators, but

tomorrow's employment report, payrolls, but also average hourly earnings, wage growth has been strong, we think it will be -- continue to be strong in tomorrow's number. up .4 and that payroll growth will continue to be too strong for the fed to believe that inflation will come in consistent with its 2% target. we're expecting 200 print on the headline payroll print tomorrow. >> right so, keep the pressure on most likely michael, thanks a lot. appreciate the thoughts today. >> absolutely. thank you for having me back for more on the fed, we want to get to steve liesman. steve, this is a pretty key 24 hours for the fed. what are you watching, what are they watching? >> yeah, well, let me ask you a question, becky. what did jeff bezos, taylor swift, barbie and oppenheimer all have in common >> are you serious in. >> i'll give you the answer. >> barbenheimer, i don't know -- >> and prime day they all look to have combined

the power strong july consumer spending, which we'll get in under an hour now. americans went with enthusiasm to the movies, to concerts, spent on prime day in strong numbers to power robust consumer spending the spending number at 8:30 one of the critical set of data as you said, becky, come the next 24 hours of the fed and markets all watching closely here is what we're looking for consumer spending, strong 0.7% after a strong 0.5% in june. personal income up to 0.3% core price of 0.2% same as last month and the year over year core price is up a little bit, i'll explain why, on inflation that fed preferred inflation indicator that is out there. it could be boosted by this one time rise in financial stockbroker commissions. and that's going to create an irony here if stocks fall on an inflation surprise, caused by a rise in the stock market markets will focus on the pce price index, which shows that

headline inflation has been falling. but core service inflation, that's the indicator watched by jay powell, takes on housing, has been falling more slowly i talked to alan blinder of the federal reserve, he tells me his work shows this indicator, core service inflation is falling at the same pace it fell under volcker in the '80s. it just tends to fall slowly from spending and inflation, tomorrow's focus to jobs and wages where the consensus looks for 170,000 jobs and wage gains of 0.3%. atlanta fed president rafael bostic saying overnight from south africa he thinks the fed funds rate is appropriately restricted didn't say sufficiently. appropriate. maybe that's enough. unclear if powell and the rest of the fed have the same idea. but the data the next several days tomorrow, today, could help hone those views becky? >> i'm still trying to think of what those four have in common outside of that. the only thing i can think of is

all four of them made a whole lot of money was jeff bezos in new jersey this summer? all three of the other three, oppenheimer, barbie and taylor swift came to new jersey the movie made a lot >> the individual -- >> becky, you're thinking too hard it is very simple. you got it barbenheimer and then you have this prime day in there. look, people were induced to spend because they had a product out there that people wanted to go for and they went for it. and that's, you know, the kind of thing the other thing that is kind of interesting i'm puzzling over is yesterday the report we had for the second quarter of the revision showed a massive upward revision in real as an inflation adjusted disposable income everybody keeps talking about the consumer giving it up. and we have seen some softer data in late july and in august, but that may just be because you didn't have barbenheimer and other things and taylor swift and i would add dead and company, a big part of the june,

july tours that were out there, you didn't have those things inducing people to spend we are hearing, i guess, some additional spending on overseas trips to europe and that kind of stuff. so that will show up as well but you could have a slowdown in august, maybe not because people don't have money, but there wasn't anything to induce them to shell out the bucks in their wallet. >> did you know taylor swift came to the beach town i was staying this summer. we heard she was down the street we went running down, stood outside with 200 people and watched her come out of the restaurant we were swifties >> they didn't charge you for that >> no. it was free. we were just annoying people standing outside all of it. >> it is a wonderful phenomenon. what we're seeing is we're seeing tremendous production value, people are shelling out more money than they ever did to go to those concerts, but they keep going so whatever it is, they're doing it right >> it is working >> i like steve putting dead and company --

>> i do too. >> i'll let you finish, steve, but one of the biggest tours of all time this summer yeah >> all right steve, thank you >> see you at 8:30 >> okay. coming up, fast food restaurants are on the rise. and jersey mike's is taking advantage of the situation to make some bread. the ceo joins us in just a bit to talk about food inflation, growth prospects for the sandwichmaker and much more. and another reminder here, you can get the best of "squawk box" in our daily podcast follow squawk pod on your favorite podcast app, listen anytime. >> i'll tell you who else i saw at the beach scott gottlieb was there i ran into him at fantasy island. >> was he with taylor swift? >> i saw him the same week and i saw steve grasso stay tuned we'll be right back. here's the skin-tight leather? my shoes are leather. where's the unnecessary zippers? that thing! billy, rock star is just how doug feels when he uses

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( sfx: stock exchange bell ringing ) welcome back, everybody. the new ford battery plant coming to michigan is what president biden was hoping for when congress passed the inflation reduction act. emily wilkens joins us with a new series we're calling the money trail. emily, good morning. >> reporter: good morning, becky.

well, yeah, when ford was looking for where to build the new electric vehicle battery plant, it considered sites in canada and mexico. thanks in part to a new federal law passed last year, it chose to build in marshall, michigan marshall will be home to a 3.5 billion battery plant and 2500 new jobs and ford will be able to take advantage of new ev and battery tax credits under the inflation reduction act. the owner of the living michigan store in downtown marshall said even though construction has only just begun, the economy has already benefited. >> already a huge impact we have a lot of construction workers that will be over here in the marshall area and that will create throughout the county for the next three years. and that's huge because they're staying at our hotels, supporting our local restaurants. >> reporter: not everyone in marshall is excited, though. there are concerns about the factory's impact on the

environment and that ford is collaborating with the chinese battery company contemporary technology to help create the batteries. ford has received more than $1 billion in subsidies and tax breaks from the state. becky? >> you know, what are you thinking in terms of what the residents there is a about all of this too, emily two sides to this? i'm looking up stuff that talks about how the judges are weighing back and forth about whether to stop the -- halt work on some of the battery plants there. what is the argument against it? >> reporter: i mean, there are a couple of different things there are people who have environmental concerns, and there are people who are just worried that marshall is a smaller town, it is rural, it has a certain charm to it and worried a big industry coming in could change some of that. ford said it is going to be working with residents on some of their concerns, trying to figure out ways to preserve the environment. and the vibe of the town, if you will but some residents told me that, look, they're just going to have to wait to see what actually happens when this factory comes

up in 2026 that's when they're really going to have a good sense of what it will mean for marshall >> how many jobs is it expected to bring >> reporter: 2500. and people have said those jobs are very much needed, but they're questioning why they need to be electric vehicle jobs i spoke with a few individuals who said, look, we're not sure that evs are the way to go we feel like the government is kind of trying to get -- weigh the scale in their benefit, and they're still not really sure that that is the future of michigan >> emily, thank you. all right, a couple of stocks to watch. shares of retailer five below are falling. earningings of 84 cents per share beat estimates by a penny. revenue in line for the latest quarter, but the company's current quarter guidance came in below estimates. said adjusted for the full year to account for an anticipated increase in shrink that is the loss of items due to theft, fraud or employee error.

and shares of crowd strike are higher premarket the securities software company reported earnings of 74 cents a share, beating estimates of 56 cents. revenue also beat. current quarter forecast came in slightly above expectations and the company slightly raised its full year forecast as well coming up, jersey mike's subs founder and ceo peter cancro on food prices, the state of the consumer, and the boom in subs and check out the futures before we go. you see the dow now indicated up 174. that's strength in the last little while salesforce is probably a little less than half of that gain right now. the s&p up 11 before that. >> did you say the boom in subs? in submarine sandwichs a big boom

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. all right. campbell soup just reporting earnings coming in at an adjusted 50 cents a share, exactly as expected, on revenue of 207 billion just ahead of expectations they expect to come in at a range between the 3.09 or 3.15 a share. is that for the quarter or the full year? it beats expectations, revenue growth to revenue minus, analysts are looking for an increase of 1.2% the stock right now up by34 cents. and what goes better with soup than sandwiches.

the labor market and fierce competition for consumer traffic. joining us right now is jersey mike's founder and ceo and they have 2,400 stores across the country and is looking to grow that by even more. peter, thank you for joining us today. >> the boom in submarine sandwiches, i heard that >> is that true? >> the original store opened in 1956 i got involved in '71 and bought the store in '75 from a football coach of mine that financed me, backed me. it's growing across the country. it's a healthy alternative, if you will, to fast food >> and i will say you guys -- i'm a fan. you guys use fresh stuff it's a lot better than some of the other submarine sandwich

shops than i've been in. >> we're the only ones on a national level that like when you grew up in your old hometown deli, they made it fresh to order. so that's what we do and then grill the steaks fresh to order and no one is doing that on a national level >> how did you get danny divitto involved in your marketing >> we always said we'd never use a figure head like that. but unbeknownst to me, he grew up in in asbury park people see and they sort of smile that -- >> let me ask you what you're seeing in inflation. we were talking about it earlier this morning what are you seeing in the input that you use that you need for all the food that goes into prep

here >> sure, it's funny how i looked at all the numbers that keep showing from like '74 the inflation was typical for what's happening now. for us i think they come in more to our shops when the inflation level hits because of the value of the product our pricing and everything has really come back in line because of supply chain and everything is really regulating inflation is there, the labor is hitting everybody but for us, we're 12 to 15 people on the roster so we kind of avoid that labor crisis because we have, as you know, that assembly line process, the slicer, sprinkler, wrapper. we get a lot done with less labor. >> and we've seen kava and others come into market. why not go public to help the

financing of that growth have you thought about it? >> well, i think you guys -- i'm going to talk to becky first if we decide to go public yes, we have thought about it but now we don't really need to but maybe it's a good time to do that, when you don't need to the public always loves philanthropic companies to give. so i remember chipotle when they went back, they were 1.2 million in sales and after they went public, it went to 2 million so it could be a benefit >> are you making a case against, too sounds like you're saying you're thinking really hard about it. >> well, it's something that everybody talks about. so obviously you have to manage the company differently, but it's nice being private. we always say it's a matter for the committee and i think we have a small group that's the

committee. >> if you're going to get that kind of growth, though, you don't need the money because why? >> mostly franchising. owners put up the money and the capital and we mentor and coach them we have our own corporate stores we're opening more and more of those. if we were going to shift, that's when you go public to get the capital to do that it's about 400, 450 to open a corporate store. you would need the capital >> where are those stores? >> we're all over the u.s. we just opened in alaska we're in all 50 states now we have to grow. and our growth has been about 13% to 15% unit growth and that's what we're trying to sustain. that would mean next year we would open about 350 new stores and that's kind of what we're on

target for and then it escalates. but it's not too fast. we have the area director, a good structure across the country that is handling it. >> thank you for joining us. and my favorite expense that you have is rutgers. >> we beat the number one team, purdue the first weekend that we sponsored them, it was pretty good >> it was. >> and coach schiano this year, the program looks strong september 9th and 10th, we have that tennis thing with chrissy everett, keep raising money for charities. >> thanks. >> and coming up, cheating in the classroom. we'll talk to one company helping to detect that and the fed's preferred

inflation gauge. d tuare headed higher across the board, especially the dow. "squawk box" will be right back.

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the dow outperforming the premarket, thanks in part to sales force. and in 30 minutes we get the new reading on the fed's preferred measure of inflation and also the back-to-school fight against a.i.-generated cheating look out, folks. going back to school, you better watch out. final hour of "squawk box" begins right now good morning and welcome back to "squawk box" right here on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with mike santoli and john ford. joe and andrew are off today been keeping track of what's

been happening with the u.s. equity futures it's green arrows across the board. dow futures are up by 167 points, s&p up 10 points and treasury yields have definitely tamed from last week right now lower from yesterday the 10-year now below 4.1%, the 2-year well bowelow 5%. >> and raphael bostick laying out a case against further central bank interest hikes. he said he thinks fed policy is currently restrictive enough and he favors letting rate hikes filter through the economy, though he said he doesn't think the fed should ease policy any time soon. sales of sales force popping and gave third quarter guidance

above estimates. it's by far the best performing dow component beating out apple at 37 percentage points. move says it will unbundle its teams app from office and make it easier for other company's products to work with its software about a month after there was an investigation of the linking of office and teams. let's get back to the broader markets and the four-day winning streak for the major averages at this point mike's been looking into that rally and the question of whether it's put the bulls back in charge. what do you think, mike? >> i think coming into august the bulls had pretty much won the benefit of the doubt back with that rally from the october lows, more or less retained through the august pullback.

it did bring us below this 50-day moving average but we've moved back above that. we keep tracking that two-year-ago level in the s&p 500. you see almost exactly flat. we've been going up in lock step this rally has been mimicking those in 2021. it might mean we always have more in september. you don't always have the first swing always hold. take a look at the comparison of sales force with this rally. we've seen two microsoft you go back six months and that vertical jump in sales force was when the additional activist investors got involved, the market said changes on market share. now over five years, microsoft has tripled and sales force is up by 40% so as john said, a lot

more ground to make up but it has locked into a similar mode we have pce coming in less than a half hour. take a look at market-based inflation expectations this is the break even inflation rate that the market foresees over the next ten years. you see it's about 227 and you'll also see this radical decline in market based inflation expectations and not too far above what were typical before the pandemic. by this measure, the market is not too alarmed that we have persistent inflation in training it's not a perfect predictor of what happens with inflation but it shows you we're long along the path of basically taking care of the longer term inflation problem. the question is is the fed going to be happy with that. >> i'm trying to think what would change sentiment there's pretty strong momentum for the bulls if you've just

been watching recently the expectation is that the fed is kind of done and wrapping things up. would it take a shock from the fed, some other exogenous factor we're not thinking of, exogenous shock? what would it take to shake people out of this mentality >> what i'm more alert to now is perhaps a scare that comes along that maybe growth is going to falter in the economy. we've raphael internalized the economic resilience story, we assume if the fed is just about done that's going to leave the economy in the clear if we start to see evidence the fed has already gone maybe too far or tightened more than we think they have, i don't think we see it in today's numbers that's what i would watch for in the coming months to see if everybody got comfortable with the soft landing just at the moments when chances of a hard landing pop up again

>> our next guest says there's plenty of reasons to be optimistic anastasia, welcome does this mean you're looking for more excuses to get into the market now versus excuses to get out? >> yes, excuses to get in. the month of august has been a nice reset for the market. first of all, the fact that the 10-year treasury is convincingly above 4% that's been a big reset mentally for investors. at the same time we did have a pullback in the market, we retraced some of that. nevertheless, we've had a reset. as i think aboutee end, i think of several reasons why i can be optimistic the economy is heading into the third period with momentum gdp is on pace for 6%. that's a lot of consumer spending supporting the economy. and whether the fed pauses in

december or not, i don't think the fed is restrictive yet when you look at the projected neutral rate and where the fed funds rate is, we're maybe just now at neutral and maybe now getting to slightly restrictive territory and so there's no worry for a recession on the economy. we've been accustomed to 10-year treasury averaging 2.5%. for years before that it averaged 5.5%. i actually think this is an economy with can function with this higher level of rates you put all that together and that gives me optimism that after the veet we had, investors should be checking back in >> i want to be optimistic, too look for excuses to get in what do you sell if i got to save something to raise cash >> i don't think you'll raise any cash necessarily >> well, cash so i can buy the

things i'm optimistic about along with you >> a lot of investors have gone into cash. there's $5 trillion or 6 trillion investors will start buying down and buying into things that have dipped i would buy the artificial intelligence >> you have nvidia running near all-time highs what kind of names are you looking at within that trade that you think are ancht i. enough -- everybody claims to be a.i. but a.i. enough >> there's a lot of names in the basket we have to invest and compute. but if you look at overtime what is the biggest beneficiary of

artificial nmgs, it's actually software providing a.i.-driven and enabled services if you look at the something like $900 billion of total addressable market value, the bulk of that is likely to accrue to software companies. but the other thing i would say, john, just because nvidia pulled back and has now rallied quite a bit, what i would say, this massive potential of artificial intelligence is yet to be fully priced in. we're talking about a multi-year theme that's likely to generate trillions in economic value that will generate hundreds of billions of spending on artificial intelligence but the analysts are modelling that a quarter at a time and modelling conservatively the fact that nvidia came out and beat estimates and all analysts had to raise their price target, that's sort of the proof that the model is more

conservative now >> it's more priced into nvidia than other things, i imagine often there's this theer hero that comes out and everybody believes that's a.i. but they ignore other thungs that they haven't heard of >> that's a great point. if you look at earnings estimate revisions, they have risen significantly because the company has guided if you look at the rest of the beneficiary basket, first, second, third year, revisions are up 1 or 2% that's what suggests to me there's more up side to this theme. those earnings revisions will start to creep higher. then you start looking at the stocks and the p-multiple that we have today is not the p-multiple when earnings become higher >> this week we have amazon and

aws later in the year. interesting perspective and optimistic on the market >> thanks, john. >> coming up, breaking inflation data this one is the fed's preferred metric next we'll speak to the ceo of a company on the hunt for a.i.-generated plagiarism in the classroom. morgan stanley downgrading from underweight to equal weight though it did raise price target to 9 from 8. you're watching "squawk box" on cnbc

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a few months ago joining us right now is turn it in ceo and president i've been worried how schools are going to know who is cheating using chatgpt how do we prevent this this. >> historically when schools license our software to check for plagiarism from the internet or other student works are about one in ten papers is highly suspicious once our software is implemented, it tends to drop by at least half, about 1 in 20 papers and 5%. w we are see students using chatgpt for doing research and

it is showing up in student essays our detector was launched about six months ago and we've had about 75 million student submissions and about 12% have some a.i. writings and 3% are written by chatgpt >> that's what i'm trying to figure out what the difference is between getting help and misconduct we had the american university president on yesterday and she didn't give it great answer. when is it cheating and when is it just doing research this is what people have been

doing with wwikipedia, a.i >> we leave it up to the professor. but when it's 80% a.i. authored, that is misconduct some level of involvement most educators say it's okay. when students graduate college and go in the workforce, educators expect students to know how to use a.i. in their writing, and in general some level is considered okay but when the entire paper, most of the paper, especially the core sections on conclusion and critical hinking, that's misconduct in the eyes of most educators. >> what educators are using you? is this high school, college >> we started out in college the majority of u.s. college students use our software beep also have a big presence in eye high schools a majority of schools use our

product for writing, test taking, et cetera. >> the number you quoted before, maybe one of ten use it for some sort of plagiarism and then it dropped by half. is cheating increased with everybody having access to wikipedia or is this like old school, getting someone else to write your paper and turning it in >> it involved into students recycling other students' work thanks to cheat sites and social networks and others writing essays for them. it's original but just not them. this is the new way for students to cut corners in general the problem increased in covid and returned to

home-based learning. it's come down since then. we focus on deterrent versus detection and student punishment it's not replacing traditional forms of plagiarism. >> chris, what's lost when students don't learn to write well i've got my opinions, it's clarity of thought when you got to boil something down and can't it clearly i think a lot of people think, well, if it gets communicated, if you're prompted correctly, that's something can you articulate what you think gets lost when the computers are doing the writing? >> yeah, it's a very timely question i'd say people, again, will use a.i. to improve the clarity of their writing to be even more

coherent and high quality. but writing is a way to demonstrate critical thinking, communication, argumentative skills it's important to use writing as a form of developing communication skills if you outsource that to a.i., you're cheating yourself i believe and educators i talked to believe writing is a core way to express and develop thinking skills which are one of the top things the workplace looks for in college graduates >> chris, schools that don't use you, is it because the service is just too expensive? >> no, our service costs less than a cup of coffee at starbu starbucks per students per year. some schools believe the honor code is all they need. some schools have bigger problems to solve, like just getting kids to come to class

and turn in their work in general more and more use software like ours the goal is not to punish students but to encourage original work from the outside >> what is your growth prospect in terms of bringing in new customers. is there a limit because some schools have much bigger problems to deal with? >> we're seeing a lot of growth. academic integrity, enrollments are dropping in the u.s. but globally the higher ed enrollment is expected to double over the next ten years. so we see a lot of opportunity in the u.s. but also outside the u.s. >> all right, chris, thank you real quickly, if you let's just say had kids in college, high school, what tip would you give them >> yeah, i have four daughters and i say do your own work in the end if you take shortcuts, you're just hurting yourself long term

do the hard work, do your own work, do the learning and you'll benefit long term from taking that approach. >> and look out because you're going to turn your software on them and make sure they're doing their own work we're appreciate your time today. >> thank you >> my toughest college professor you got graded on the revisions. >> how do you make sure nobody's cheating it just seems like for professors that's a tougher and tougher act. we were talking about it, shut off the wifi in the room >> and talk about the paper and the revisions. if you don't know what you're talking about, busted. coming up, is ip logjam at an

e end. stay tuned, you're watching "squawk box.

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welcome back to "squawk box" on cnbc. we're just seconds away from july pce inflation data, personal income and spending as well and initial jobless claims. take a look at the futures they have strengthened over the last couple of hours the dow is on pace for close to a 200-point gain

s&p 500 up a little less than a third of a percent right now it has on a four-day winning streak, the nasdaq also popped into the green as well. treasury yields hovering well below recent highs, 410 on the 10-year note that himselas been down for a fw days straight while the 2-year yield also 4.875 rick santelli standing by at the cme in chicago with all those numbers. >> the data is trickling in. jobless claims, 228,000, that's below expectations of 235,000 and 228,000 is the lightest, well, in the month of august you have to go back to the last week in july continuing claims from the week of august 19, always a week in arrears, 1,725,000, very close to expectations, 1,725,000

actually is the highest level going all the way back to the first week in july now, personal income and spending income up 0.2, 0.1 lighter than expectations if you look at the spending side, 0.1 stronger than expectations, the second best number of the year outside of january where it wasat 1.9%. if you adjust for inflation, real spending up 0.6, that's pretty juicy, also the second highest number of the year outside of january's 1.3 buckle up. the money ball, four sets of numbers, some of the favorite inflation gauges the pce deflator is up 2.1%, exactly as expected. the light water mark, low party mark was .10, back in may and

also in march, in june up 1%, the highest since 1981 we take a deflator year-over-year look, up 3.3, exactly as expected. however, it is 0.3 higher than our last look, which was 3.0 that's never a good thing. high water mark in june. if we look at core deflator month over month, up 0.2 is where we were looking for this to come in the best it's been is it was up 1.17 our last look, rounded to 0.2. 5.41% in february of last year,

that was a 1983 high what is noteworthy here is we have been in this 4% range and many analysts, economists and fed officials have pointed to this as the sticky area. interest rates did move lower. we're very volatile. but we're hovering at 4.08, 4.09 if you're looking at full equities, they are still on fuego. stocks are up how many days in a row? i think we can connect the dots there, what is one of motivating forces of stocks mike santoli >> we want to bring in steve liesman, along with the chief economist and kayla. steve, what stands out to you from these numbers >> well, you had goods

deflation. i'm reading this to make sure i got this right prices decrease 0.5%, services up 5.2%, the year over year for the month, goods prices were down 0.3 and services increased 0.4. so reasonably strong service inflation. i can't tell, mike, whether or not that financial commissions or stock broker commissions pushed up the service sector number i don't have the detail in front of me here but that was the suspicion going in stakt i guess is the way to say it on the service side not making more progress maybe again was pushed up on the core and headline number as well. looks like it was pushed up. i'm not exactly clear what pushed up the headline here. energy prices up 0.1% and food up 0.2 so something else is pushing that up. but the big number i think from a gdp standpoint is the big

spending number, up 0.8% yet you see income coming in below that did not come from compensation, which did pretty well it still does auger for sure for less robust spending in the month of august. but because of the way we start here, mike, the importance of the starting point of the quarter and the way gdp is calculated, i think that still means we're going to be running i don't know what the numbers are 4, 5, 6% on gdp in the third quarter with some expectation that it slows down in the fourth >> that hot july working its way through. lindsey, we have a little bit of a stutter step in the disinflationary progress and isn't it true we've had a general lack of surprises on the inflation data, people seem to have a pretty good handle on the

trend. does that give you reassurance where do you think inflation will be settling >> no, just because it came in as expected, i don't think that offers enough reassurance from the fed which wants to see strong disinflation back to that 2% target. so the fact that we are seeing a reversal with a spattering of price increases, i think this reinforces the fed's message we heard from jackson hole that the fed's job is not yet done and they need to stay focused until that job of reinstating price stability is in fact achieved. i think this will put a lot of pressure on the feds for them to continue to move forward with additional rate hikes potentially as early as next month. i do think this is a step in the right direction in terms of def kleining price pressures from the peak, but when we look at the economy still very robust, the consumer still very resilient and inflation now reversing course, now is not the time for the fed to take a

passive position on the sideline >> granted that certain the fed is not going to step aside or claim that the job is done but you actually think that even after powell spoke a week ago pretty much knowing the core pe/ec came in as it did, do you think they're going to move next month? sfli >> i think they could. it boldens the fact they could take action. the fact of looking out to 2024, we may continue to see a three handle on inflation. if we don't see further downward momentum on inflation in the near term, i think this is going to force the fed to revise higher expectations on inflation and put pressure on the fed to continue to move forward >> what's your take on not just inflation but the economy

itself have we run through a bit of a strong patch in growth and that's going to moderate from here or do you think we can actually keep this up? >> i do expect we're going to see some slowing in consumer spending heading into the fall, particularly look at the data we collect. we do a lot of inquiring of consumers, especially proprietary data and when we see this picture of a resilient consumer, a lot of it has been driven by higher income adults and younger adults a lot of that spending has been discretionary and that's easy to pull back on when budgets come under pressure and i think pressure is coming this fall. we've seen credit card interest rates come up, the student loan pause ending is coming up and i think we're going to see some cooling this fall as a result of

that based on what we're seeing in demographic trends. >> can i ask you, were you more surprised by what we've seen with yields getting pushed down the last couple of days? were you surprised how they ran before last week what feels more natural to you >> i -- it was a bit surprising. it's -- a lot of it i think is moving in response to what we had heard from powell last week. and again, the inflation fight is really going to be the thing driving those markets. and we've said this before and it's been reiterated many times, it's been reaffirmed that that 2% is the target and powell isn't going to stop with the interest rate, holding it as much as he needs to until we get inflation back under control and i agree that getting from 3% to 2% could be more difficult. i'm particularly concerned about that big housing come ent and that that may be actually a

pretty sticky part it should cool in the near term because we nopeknow it's laggedt the home market is keeping it propped up we're already seeing a little bit of recovery in some housing which is a huge component in inflation. >> we talked about atlanta fed president bostick overnight feeling dovish, feeling like the fed should be done >> i think the fed has a very good chance to be done i think the fed's mission is far from complete. i think the core deflator is going to be very stubborn and it's going to be very, very hard to get it under 3% but being done doesn't mean it's going to ease. i think it now becomes the market's job i personally see the market and especially long rates and you can see what they're doing right now. equities are holding the bulk of

the rally but the treasury complex is starting to firm up a little bit i think you're going to see 10-year and 30-year rates, the long-dated treasuries start to reflect more of what's going on with respect to tightening some of the conditions in the market as the fed leaves rates higher for longer >> that certainly seems like it was the dynamic over the prior few weeks than the long end does thanks also to lindsey and steve. talk to y'all soon >> thank you >> coming up, to the lackluster ipo market be ready for a breakout and take a look at dollar general, shares plunging on a quarterly earnings and revenue miss thanks to heavy competition and high inflation stay tuned you're watching "squawk box" on cnbc help make trading feel effortless. and its customizable scans with social sentiment

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it has been a tough year for ipos but there could be light at the end of the tunnel. leslie picker joins us leslie, hi >> we could be getting a little bit busier here. i sad down with the co-founder of 6th street. it has $74 billion under management but this is waxman's first-ever tv appearance sixth street does direct lending

to real estate and sport franchises and even agriculture and has a sizable presence in growth investing having made billion dollar plus investments in spotify and air b&b and whether he expects the window to open soon. he said we're in the seventh inning of the cycle. >> we've already started to see a real pick up in our pipeline as people -- ultimately commerce has to go. can you only extend the runway for so long. and there are growth opportunities out there. i think people are starting to look for capitolal and picking their heads up it gets commerce moving again. our expectation is for 2024 volumes will be higher -- i don't want to say much higher, it's hard to call right now but i would say materially higher than they were in 2023 >> so he says expect to see more

activity in the fourth quarter and into the first quarter of next year. and private credit and as well as whether we're out of the woods on a recession, you can subscribe to the information you see on the screen. >> am i oversimplifying thinking the market is going to open up because there's exuberance in the market >> not oversimplifying it at all. valuation is a really component to this but you have to see valuation stable for a certain period of time and one of the core issues is that there wasn't that valuation component. there were so many startups that said, hey, i could have been valued so much more in 2021 had i gone out then. i'm not going to go out now. now that we have seen some price

stability, people are starting to feel more comfortable and run out of cash and so the ipo market is seen as a higher priority for them. >> better than borrowing at high interest rates i guess the only key to that, though, is if you've seen some stability, that's great. that stability has to continue in order for more of those deals to actually pop up by the time we see the next calendar year. >> exactly and obviously the ipos looking to debut in the next few weeks or so, a lot of startups will be looking at that to see how we do, what the after market trading looks like all of that will make more companies feel more comfortable. so there a bunch of different factors at play. valuation is an important one, reents ipo performance is an important one. without the buy side sitting nice and pretty on their recent

ipos, they may not have an appetite in playing more >> okay. leslie, thanks we'll see you later. for more on the ipo market, let's bring in nick from renaissance capital. they just released its ipo preview, the headline "the tech log jam finally breaks." i'm wondering if there's an asterisk here. and it needs to come public. what will and what will they not tell us about the state of the ipo market and the window being open >> yeah, those are good points and arm is a fairly unique company. it's a well-known name there's not a lot of companies

out there like that, 99% penetration in smartphones instacart is a someone unique ride obviously coming off the covid-19 boom for them, they're in a kind of interesting place i think actually the most useful bellwether for the tech ipo market will be klavio. that looks like the typical ipo we saw in '20-'21. so think how that one does will be a grood barometer on tech ipos >> and we can look into it buying mail chimp as a comparison marketing automation is not

profitable yet it's kind of betting on the future and even the potential of artificial intelligence prompts to make the marketing system better we'll get a sense whether investors are actually buying that and the growth process there, right >> yes, for sure right now they're growing pretty well like you said, they're not quite profitable but they're on the cusp a lot have been shifting to growth at all costs. i think investors aren't going to demand profitability, but they're going to see have you got a hold on your earnings?

>> and what about renting somebody else's car. it reminds me of something inbe inbetween huber lift, which we saw being a great big hope for the market and none of which has really lived that out. yeah, su.

>> value is an important part. it's just how much 2021. bite the bullet, go public if valuations improve later, that will be reflected in the stock price or wait longer and hope that things improve before you come public. we're at a point where a lot of companies feel like they've waited long enough we're in the going to get back to 2021 valuations any time soon.

maybe jersey mike's before too long nick, thank thank you thank you. coming up, what to watch ahead of the opening bell on wall street. join us for the delivering alpha investor summit on september 28th in new york city where we'll convene investors and leaders to provide insight, ideas, and analysis to help you balance risk with maximized return scan the qr code or visit cnbcevents.com cnbcevents.com/deliveringalpha we'll be right back.

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year over year number stronger than what we've seen last month. >> today is no news is good news, even though we had bad news earlier this week this is really a respite trade that we're dealing with right now. we're not seeing upside risks so the market is excited that we're not going to have hikes soon >> what if the fed actually does raise rates? >> well, that would definitely be a surprise. but i do think that they have projected they're looking for upside risk. if we see some numbers move, i think you should start looking at the energy moves right now. things like thatht actually cause us to see some surprises, those are the things that are going to cause us to actually have a hike or if we see stronger labor data later this week that's going to mix the picture, but right now, we're really seeing a situation where we're going to be higher for longer in terms of yields and that's probably something that people need to think about as opposed to hikes as the real issue. >> yeah, you've been bearish on bonds, short bonds, actually, for most of 2022 and 2023.

trade's gotten a little more complicated very recently. what do you think? >> yes i mean, being short bonds was the trade of the year in 2022, and let me just tell you, it wasn't fun this week, and so being short bonds means, in essence, that we think that bonds are not really a good place to be when you have higher inflation, and you need to really focus on the shorter end of the curve until we start to see the yield curve stabilize. so, those of us in the futures markets, we have really been seeing short pressure on the ten-year, the 30-year, and this is really a trade about how long will rates be higher and we think they'll be higher for longer than people think, and that means that that particular short trade still might have some room in it until the end of the year. >> you think yields will be higher for longer than people think because inflation will be hotter or because the fed's going to be pretty persistent about trying to get it down to 2% >> we think that inflation will take longer to come down, because it doesn't come down as quickly as people would like

so, it was easy to get it from peak, but it's harder to get it to -- to get to a level that's at target. let's remember, even though we have cooler data, we haven't gotten to target, and it was reiterated last week that we are going for target, unless, obvious, the fed releases its target and says, we're not going to pay attention to that, but that hasn't been the case. so, i think the real point is inflation is higher, and we're going to stay at higher rates until it's better. >> but you're walking a pretty fine line. you think inflation is higher, but the fed's not going to do anything other than just keep rates where they are, so is there a misstep that could mean that, okay, if your view on bonds is right, that your view on the market has to come down i'm sorry, we have about 30 seconds. >> yeah, well, the point is it's about the curve shape. the curve is still inverted. that's what i'm talking about. look at those long-term bonds, they're definitely underpriced relative to shorter term bonds we think that has to flatten, unless, of course, we see cuts in the near term so there's still a big differential and in

the next few months you're going to have to see that tighten up >> thank you for your time >> thanks. quick check on the markets futures this morning are sharply higher, up from where we started the session. the dow indicated up by about 175 points i want to thank jon and mike for being here today >> it was fun. >> it was. >> folks, have a great day today. we'll see you back here tomorrow right now, it's time for "squawk on the street. good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with sara eisen at post nine of the new york stock exchange. cramer and faber have the morning off. we close out the month of august today with the best week of the s&p since june as july core cpi prints in line ten-year, pretty subdued our road map this morning begins with the fed's preferred inflation gauge, what core pce results might mean for interest rate policy. also