you deep fry them. it is monday, september 11th, yes, it is. 22 years. "squawk box" begins right now. good morning. welcome to "squawk box" here on cnbc. we're live from the nasdaq market site in times arsquare. i'm becky quick along with joe kernen and andrew ross sorkin. looking at dow futures which is up 107. s&p up 22 and nasdaq up 100. this is after the down week for the s&p and nasdaq. the first time we have seen a negative week for those two averages. sharply higher moves this morning. if you are watching the treasury

market, you will see it looks like the 10-year treasury is sitting just at about 4.29%. the 2-year treasury is below 5% at 4.99. last week, the transports did see the worst week since march. if you worry about things like that, the downturn, the russell 2000 broken. the dollar is now looking at its longest winning streak in terms of weeks. weekly winning streaks since 2015. a lot of things to watch this week. we are watching shares of alibaba, talking about kicking things off, after the company said in the surprise move its ceo daniel zhang planned to step down this month. stepping down as chairman and ceo of the cloud business in june. alibaba said he was going to be departing as the ceo of alibaba group to focus on the cloud unit which the company is spinning off as a separate company. now the co-founder eddie wu was

set to take over from zhang this month. he is now going to be taking over the cloud iunit. joe tsai will take over alibaba. this raises questions of the spinoff and how unhappy he was from that role to this role. we talked about this at the top. i guess it matters -- the expiration date. old twinkies aren't good. >> i don't eat 17-year-old ones. i haven't had a twinkie in ten years. >> the -- what are they? >> preservatives. good in a szombie apocalypse.

>> hostess makes other things. >> ho-hos. >> none of those contain -- i'll not say it. there are some natural ingredients. hostess is nearing a sale to jm smuckers which could be f worth4 billion. they survived the deal with general mills. hostess went through two bankruptcies. a profit group bought the com company. hostess returned to the public markets in 2016. we have all date on the story we told you last week. ro robert isaacson posted last

night over the description that elon musk secretly told his engineers to turn off starlink coverage within 100 yards of the crimea coast so they could not attack the russian fleet. he tweeted to clarify. the ukrainian coverage was enabled to crimea. it was not. they asked musk to enable it for the drone attack on the russian fleet. musk did not enable it because he thought it would create a major war. musk retweeted it. much appreciated. it is different than if i refused to act upon the request over the decision to thwart ukraine. walter will be joining us tomorrow to talk about the book which is getting lots of headlines. >> we said that on friday. on friday, elon had tweeted that it was never turned on in the

first place. they did not ask him to turn it off because it was never turned on. he said that on the show. walter isaacson acknowledging that. >> the other piece that is important in this is elon musk, to his credit, decided actually in large part because of the power he had in this circumstance that he didn't want this power in the future. he is building a separate version of starlink for the u.s. government that will be controlled by the u.s. government so he will sell that and the government will make those choices. >> those are the choices the government has always made. it is impossible for a single individual. >> it is tis true to his credit. we will see walter tomorrow. in the meantime, a big price target upgrade from tesla from morgan stanley. the super computer effort dojo

saying it can add up to $5 billion to the tesla enterprise value. that stock up 6% this morning at $262. and novak djokovic won the u.s. open men's final yesterday. defeating daniil medvedev in straight sets. it was his 24th grand slam title and fourth u.s. open title. on saturday, we saw coco gauff win the women's open. >> it was awesome. >> you see brad? his fingernails were down to here watching. brad gilbert. gauff has one five singles titles, but this was her first title in the grand slam. both matches were amazing. star studded. i'm surprised you weren't there. >> i was watching on tv. >> leo and nicole and keith. >> it was great.

it was great to watch her win. didn't you love that? >> i did. her opponent hits the ball really hard. she is the fastest and greatest defender. she likes to play offense. she did in the last couple sets after losing the first one. i was worried. you could see brad was a little worried. yesterday, medvedev, did you see it afterwards? he is a classy dude. i really like him a lot. i felt bad for his wife. it was his anniversary. he won two years ago on the same day two years ago. >> i thought djokovic was a classy guy. i would have thrown the game if i had known it was your anniversary. >> he also said, happy anniversary. i'm not saying that as a slam. of course, he had the mamba. that was his 24th tournament.

he and kobe were close. i can't believe novak djokovic needed someone to give him the winning mentality. he has the all-time mental aspect. >> kobe bryant may be the best i've ever seen. how he talked about the mental toughness. >> maybe it added to what djokovic or mcenroe is back. i didn't need another four hours of whoever the guy is. he is okay. mcenroe is great, obviously. he is ready to call novak the g.o.a.t. he loves federer. his idol was rod laver. no one is close to this guy. when we come back, it is a busy week for inflation data and ecb decision and high profile hearing on capitol hill with big

names. we have the "with squawk planner" next. we have an interview with wally adeyemo. he will join us at 8:00 a.m. eastern time. you are watching "squawk box" and this is cnbc. youn >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. i watched my mother go through being a single mom. at the end of the day, my mom raised three children, including myself. and so once the client knew that she was heard. we were able to help her move forward. your client won't care how much you know until they know how much you care. ♪

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on this week's "squawk planner," we have key inflation data. we have the consumer price index on wednesday. that is followed by retail sales on thursday. we will get import and export prices on friday. also on the calendar, apple is holding an event at 1:00 p.m. tomorrow to unveil the latest iphone models. on capitol hill, they will look at artificial intelligence. among those scheduled to attend the closed-door meeting is elon musk and satya nadella. on thursday, the latest interest rate decision comes from the european central bank. it will be released at 8:15 a.m. eastern time.

that will be followed by the conference by christine lagarde. auto workers will be in focus thursday night and friday morning. at midnight is when the contract with the big three automakers expires. you could see a strike at the least one of those automakers if there is no deal in the next few days. by the way, they are far apart at this point. joining us now is sylvia jablonski. sylvia, the big number is cpi and ppi. looking at the inflation numbers will tell us what we will expect from the fed. how much is riding on that? >> i think so. good morning, becky. a lot is riding on it in the short-term market and how it reacts to it. do we have a pull back from last week or do we resume the rally

from the first half of the year? i think the bigger picture doesn't matter what happens in one particular read. we know inflation is coming down. it has come down quite significantly. if we keep going in that direction and the economy is holding up, overall, it is not as big of an issue as months prior. >> do you think the fed will likely be sitting on its hands or they act in november if they see more trouble signs pop up? are they happy at the moment? >> i think the fed is likely to sit on their hands and take in the data they see in the coming months and see where that gets us. i think they are likely to hold rates higher for longer than we anticipated. i don't anticipate major increase to the rate hike intentions. what the fed does is important to the future of the market. i think we are set up to have a rally to the end of the year. what can turn that around is the

fed unexpectedly raising rates and deciding inflation is stickier than they hoped it would be. >> let's talk about the other he ve -- events this week. uaw. whether i heard earlier is if they go on strike for ten days at the big three, that would be enough to send michigan into recession. less supply on the markets would bring prices back up for cars after they have been coming down. this is important after the inflationary read. we have oil prices which are higher, too. could something like that extended strike be the issue that pushes all the way back through and changes the fed's mind? >> i think it's a storm that can certainly brew and turn into a disaster. it is interesting to see what happens with that. i would flip that and think more

about what that could mean in terms of electric vehicle demand and electric vehicle production. you know, it is interesting to see what happens with the prices of oil becoming more expensive and imp mpacting the price of vehicles and supply and demand issues. you may see car buyers look at evs where you don't have the is issues. >> sylvia, what are you telling investors? august looked to be a rough month. things ended okay in august. we had a down week for the nasdaq last week. futures are indicated sharply higher across the board. >> i think overall broad based dollar cost average, you get the ride with the rally toward the end of the year. i love the ev trade value. the upgrade on morgan stanley

that we talked about earlier in the show. dojo with tesla. the top five electric vehicle makers are set to rally in the next for months. that is a 5-to-10 year trade. i think that is a great opportunity right now for investors to get in. >> sylvia, thank you for being with us today. >> thank you. have a great day. coming up, meta platforms is reportedly ramping up the artificial intelligence plans. details after the break. later this hour, an update on disney's dispute with charter over cable fees after a busy weekend of sports. wow. matt is so young. sports that spectrum customers could not watch. some sports i wish i had been

unable to watch if you are a giants fan or bengals finance. $55 tmillion a year. burrow. neither team could catch a ps.as we will talk to puck news' matt belloni when "squawk box" comes back. what do you see on the horizon? uncertainty? or opportunity. whatever you see, at pgim we can help you rise to the challenges of today, when active investing and disciplined risk management are needed most.

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the morgan stanley client experience? listening more than talking, and a personalized plan ♪ to guide you through a changing world. ♪ we have news just out. instacart's ipo is happening now. leslie picker has the details. >> reporter: andrew, it feels like we have been talking about this for years. instacart kickingo off the ipo today. the company plans to market

share between $26 to $28 a piece. that implies the valuation as high as $1.3 billion which includes restricted stock units in the share cart. that is a quarter of the $39 billion valuation from two years ago. it is below the valuation from the recent round at the end of 2022. a more conservative the valuation is a sign of the uncertain times for companies looking to go public. instacart said in may of 2022 it filed for an offering, but punted the offering as tech companies sold off. a.r.m. is planning a smaller ipo than it originally considered. instacart intends to sell shares in the i ppo in $16$16 million e

high end. investors indicated they plan to purchase shares up to $400 million total. pepsi has a private placement in the current offering. it will trade on the nasdaq and is expected to start trading next week. guys. >> leslie, in terms of the scale down in the offering, the question is what do the company's sales look like and how sustainable is it and what is the margin? what is your read on how investors are reading that >> reporter: investors i spoken with since it became public, they were pleased with 31% of top line growth for the first half of the year. this is a profitable company. the one concern i have been able

to pick up and speaking with investors is the gross transaction volume value is 4% higher during that period. they would like to see that more in pace with revenue. the reason revenue was higher is because they were diffiversifyi into advertising. that is why you see a bigger pick up on the income statement than with total gross sales. >> leslie, thank you. time for the executive edge. meta is looking to ramp up the artificial intelligence efforts. according to the wall street journal, the company is working on the a.i. system as powerful as the most advanced model offered by open a.i. the planned system would help other companies build services to build sophisticated texts and analysis and other ovfferings. this is the part of the mark

zuckerberg push to establish meta as a major push in artificial intelligence. for some reason, this makes me happy. don't you want everybody working on this in the best minds? we want to win in this country. i think, we're hurdling toward an uncertain future with a.i., but we may as well win. guys at met a have money and minds and innovation. >> they are planning to do it differently. a question if it is better. one is an open source. he wants to have an open source approach and all of the others are effectively closed. >> even open source a.i.? >> if you have open source a.i., that means you or someone on the street can take that code and build their own a.i. we could argue it is great

competition and opens the field, but it also opens up the field to do all sorts of nefarious things because you have access to such code. if you have that code to hack things, you could do that. if you want to use it for political speech or hate speech or other things, that's where it gets complicated. at the moment, the system that chatgpt put together and google put together and the system that so many other -- two or three others are closed and relatively controlled. you have to decide if you like the controlled version or the open versus. >> i like the open. >> interesting. i don't know. you'll see. we'll see. >> there's an underlining current. >> we can't babysit everyone all the time. it will happen. >> i think from the major companies, he's really the only

one doing it that way. we should find out if elon musk's approach is open. i don't think so. >> the debate taking place is open a.i. is a myth. when you ask technology makers, they will still have that control. >> it will be controlled by big companies. >> there is no such thing open source a.i. that is truly open source. that is a big article questioning these things. >> right. >> we will talk more about this and more. president biden making headlines at the g20 smiumt over the weekend. we'll talk about that after this quick break. >> announcer: executive edge is sponsored by at&t business. next level moments need the next level network. in 5!] copy that. make a hard left down the alley.

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good morning. welcome back to "squawk box." we're live from the nasdaq market site in times square. futures are higher across the

board. dow up triple digits. 100 points. nasdaq up triple digits up 102 right now. the s&p is up 25. the economic downturn from china could bring about an invasion of taiwan. >> i think china has a difficult economic problem right now for a range of reasons that relate to international growth and lack thereof. the policies that china has followed. i don't think it will cause china to invade taiwan. as a matter of fact, the opposite. it doesn't have the same p capacity it had before. as i said, we're not looking to hurt china. sincerely. we're all better off if china does well. >> those remarks come following high level talks with the chinese premier in india.

i want to bring in admiral james stavidris. we are all trying to understand what the relationship with china should look like at this point with the u.s. where we are rooting for their successor no or not rooting forr success. what do you think? >> i think it is not black and white. there are different issues. sure, we want to see success on both sides of the table. i'll give you an example on climate. we want china to work hard on the climate challenges. with we want the world to do so. we want to cooperate on humanitarian activities around the world. we want to see a functioning global economy. i don't need to tell the audience why that's important.

on the other hand, we have significant differences with china. in cyber. in a.i., which you discussed a moment ago, we are in a foot race. in thing south chw -- in the so china sea. i would say we need to confront china where we must. we are not going to give up the south china sea or allow them to ride roughshod over taiwan. we need to cooperate where we can. >> admiral, everyone wants to be nuanced. the idea that somehow we can have it both ways, basically. we can be friends on these things, but these things, we are not friends. that's not how the world works. we talk about that every day as if that is a plauappplausible ao

this and you see the rhetoric. >> let's go ahead and look at the counter factual. we don't have to imagine what it would look like if we decided to decouple with china. we don't have to guess what it would look like. it would look like the cold war like the united states and soviet union. you can say decoupling and what p pres president reagan did was worth doing. globally, we would suffer in the face of the decoupling. we need to imagine this as an off/off switch.fully engaged wih china and we want them to win or we decouple and go back to the

cold war model. it is to the an off/on switch. i argue china is dangerous. we have to bring in caution and skepticism. at the same time, there are zones of cooperation, including business. >> admiral, i was surprised by president biden's comments and just talking about china overnight. just the idea -- it sounded like an honest assessment of how he sees things. if he were in the sameeconomic troubles they were in, he might rethink the question of overtaking taiwan. having a u.s. president saying that out loud was like poking the bear a little bit. why tempt them in that way? >> poking the dragon. we think of the bear as russia and china as the dragon. it is a good image. it does do that a little bit. what -- what he is

recognizing is xi jinping floundering and trying to decide whether you might want to think about attacking taiwan, i don't think you are going there. i think you say i wonder if any generals are as bad as the russian generals appear to be. i wonder if the taiwanese will fight like hell the way the ukrainians have. i wonder what with the global response would be if we invaded and took over this democracy by force? you have a ton of uncertainty. that is before you get to the president's point which is the diffi difficulties internally in china which are a sputtering economy and terrible demographics with many more men than women in aging society with a need for environmental remediation. if you are president xi, you are not waking up in the morning

thinking about invading taiwan. >> in the last piece, we talked about the security of telephones. iphones in the united states. state governments and federal pieces as well around whether you should have tiktok on your phone. in china, it has gone further. they are saying you cannot have one of the phones, at least, at the office, on a personal basis. how does that manifest over time in terms of other things that breakdown? i'm thinking about technology. if starbucks is there and disney shanghai parks is. there do you imagine a day where you can't go there or we need you to have a partner now? you need a chinese partner. some have chinese partners in some of the businesses. do you see that evolving? >> this is, of course, the soe model that concerns have to go through. yes, i think your point is

spot-on. this is an authoritarian nation. it is always going to bias itself in that direction. that is going to put sand in the gear for enterprises that come from, shall we say, more enlightened backgrounds, including those from the united states of america. yes, it is a concern and i'll close with this. back to artificial intelligence. watch for china to take a very authoritarian approach here. more so than the united states. believe me, they are not thinking about open a.i. they will look for controls in artificial intelligence, facial recognition and quantum computing. anything that touches national security. your point is spot on. >> we will leave it there, admiral. thank you. still to come at the top of the hour, morning movers and a jump for tesla. we have more on that story

ahead. later, congress member buddy carter joins to us talk about everything from taxes to the budget and much more. reminder for you, you can get the best of "squawk box" in n r "squawk pod" you can liste any time. "squawk box" will be right back.

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you are looking at a live shot of the reflecting pool at the 9/11 memorial in downtown manhattan as we remember the terrorist attacks of september 11th. 22 years ago today. more than 2,900 people died on that day. the new york stock exchange and nasdaq will hold a moment of silence today before the opening bell. officials in morocco say more than 2,500 people have been killed by the 6.2 magnitude earthquake which hit friday night. the search for survivors continues. antony blinken said the u.s. reached out to the moroccan government and made it clear we are ready to assist. and coming up, the latest of carriage fees with disney and a

charter and why the recent success of hulu may look to buy out that streaming service. matt belloni will join us next. reminder, you cawan tch or listen to us live any time on the cnbc app. good night! hey corporate types. would you stop calling each other rock stars? you're a rock star. you are a rock star. no more calling co-workers rock stars. look, it's great that you use workday to transform your business. but it still doesn't make you a rock star. so unless you work with an actual rock star. hi, i'm ozwald. hello ozwald. pam, you are a rock- i wasn't going to say it. ♪♪

we welcome back.

we are in the green. we have been down a bit at the end of august and now we're in the zone up 99 now on the dow. nasdaq up 105 points. s&p is gaining a little. we'll take a look at treasuries. waiting for a lot of data this week. we should get an idea of inflation data with the indicators of how the economy is faring. 10-year treasury at 4.29%. bitcoin is in the mid 25,000 area right now. down a little. crude has been something you want to keep on your radar screen. wti up at $87. let's get to the latest media and the dispute with

disney and charter over cable fees. joining me now is matt belloni. founder of puck news. matt, we want to talk about hulu. the stories are related. disney benefitting or hulu seemed to benefit from the charter situation. that is not necessarily good for disney because it means it could cost more if it wants to buy hulu from comcast. >> not a lot of good options for bob iger at disney. monday night football. tonight's the night. typically we see these carriage disputes resolved by the time the nfl season starts on the network. if there is no espn monday night football tonight for spectrum customers, they will lose those customers. it is d-day for the pay tv bundle the. we will see which way it goes.

>> we had that discussion last week about nfl still at the top. tonight, our discussion focused on match ups and how important they are. aaron rodgers in his aaron rodgers in his debut with the jets in buffalo who people -- you know, buffalo any year could be there. you know, we forget about them sometimes, talk about other teams. this is a huge game tonight. i can't imagine. i'd be furious if i couldn't watch it. >> and a lot of the spectrum customers are in the new york area, and now we're in a situation where typically the ratings for a monday night football game involving the jets would be high. the first game with aaron rodgers is going to be super high, so we'll see what disney does here. i mean, i know they really want a deal, but charter has really dug in their heels. this is really a dispute about

the future of television because they are not getting in. >> if you don't, you know, want to be a jets' fan, you could always switch over to the giants indeed, a giants fan. >> not after last night. >> yeah, 40-0. >> i'm trying to figure out what you think a deal would actually look like. i don't think there's even a sense as of the reporting i was doing over the weekend that there's actually a deal to be had that's on the table that either side would be particularly happy with. >> right, and i think charter wants the kind of concessions that disney sees as existential to the cable bundle. if they start packaging up disney plus and the other as much ass that is a potential revenue killer for other cable are providers. remember, a lot of these cable providers are going to come out

of the wood work and say we want a charter deal. we want whatever you gave them. if they cave on this, that all the others are going to want it and could potentially destroy or at least accelerate the decline of cable. >> streaming and the way we view it, is it -- so are we bouncing off the lows for streaming again? is that -- so hulu, what was the low valuation of hulu? what's it worth now do you think? >> the floor is 27.5 billion, i believe. and comcast's ceo brian roberts said recently that he thinks that's low, that they've really added a lot to hulu and the valuation. it's one of those interesting situations where if they can't agree on a price they'll have neutral arbitrators do it. that's a wild card. for disney every dollar matters.

i think a lot of the choices they've been making lately are in anticipation of this big check. for a third of hulu they could end up having to write a $10 billion check. i don't know how that works, $81, that's a level in the stock we haven't seen in quite a while. what about the strike, the strikes, and why is it taking so long and could be next year now people are saying? >> yeah, on friday there was a troubling back and forth where the writers side essentially suggested that the studio coalition break up because they were willing to make deals with individual members of this coalition that negotiates together, and that coalition just put out a statement the same day saying, no, no, no, we

are united and we're going to see this through. we'll see if that's true or not. there are rumblings around hollywood that a couple of members of that coalition are willing to break away. if that happens, there could be chaos where the guild does a divide and conquer type thing where they do deals with certain studios or streamers and use those to leverage the others to agree with it. that's what happened when they had a fight with their agents a couple of years ago and they did that. >> what are the studios that would be willing to go ahead and cut a deal because they're in a different position? like which ones are saying, forget it we're not going to negotiate, versus which studios are going to say, yeah, we're getting ready to go back to work. >> there's been some reporting that says netflix has said we'll do this deal. we will do what you want. that has not been confirmed by net netflix. it would make sense that netflix

is in the best financial position. netflix's streaming division is are profitable, and i think they are looking at this and saying perhaps this could be a differentiator for netflix where maybe if they had a deal and the others didn't because the other companies are so challenged that they could pull away in the streaming race. that's not confirmed, but it would make sense that they would be interested in doing that. you know, and the others are -- i'm not in the meetings so i don't know exactly what they are saying to each other. but we've heard that the studio side has very different approaches to this because they're all in very different businesses apple is not in the same business as nbc universal. they're just not. >> matt, but there's sort of a prisoner's dilemma. arguably netflix can do this and pay the most, but they can also hold out the longest, right? in some ways -- >> i'm not so sure about that. >> in some ways there's a view

that disney and, for example, warner media, you knows need more -- come '24 going into the summer, they're going to need to have some films and tv shows up and running, whereas netflix still has something in the -- that's the argument. i don't know if you believe it. >> that is the argument. you hear that a lot. i'm not so sure about that. netflix ultimately is in one business, and it's in the business of providing you a steady stream of content to watch on your service. they don't have theme parks. they don't have all the other things that these companies have. they don't have a financial news network that can make money for them if they don't have summer movies. >> god bless you. >> it's not that easy. when "stranger things" is not on the air. >> if that's their job, they're failing. i'm trying to watch unbelievable, but they're failing. i need more. can movies come out without the stars being at the premier?

will they not do that sth? they want to promote it the best they can. will they wait or finally just say, eff it. >> they're delaying some. you're seeing some of the movies that are being delayed. i'm at the toronto film festival, and typically that would be a star driven affair. >> that's a long one. >> and the movies are mostly here without stars. >> that's a long one, a couple of weeks or something. >> have you seen anything yet? >> have you seen poor things? >> i saw dumb money on friday night, which is the gamestop movie, and our friend andrew is in that movie a lot because they use a lot of clips from the gamestop -- >> from the meme. awesome. what about -- all of us strangers or we're all -- i've seen like 11 movies, i want to talk about them all. i can tell you about all of them. they're all good. anyway, we're over. matt, thanks.

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charge, an influential analyst upgrading the stock. the new details on the upcoming instacart ipo, as the second hour of "squawk box" begins right now. good morning, and welcome back to "squawk box" right here on cnbc. we're live at the nasdaq market site in times square. i'm andrew ross sorkin along with joe kernen and becky quick. the s&p 500 up about 25 points. the nasdaq looking to open about 111 points higher. let's show you treasury yields as we speak, looking at ten-year note just about 4.296, the two-year at 4.995. take a look at oil as well. we're talking about the energy complex and right now the wti crude 87.07.

i don't know if you guys buy any gas this weekend at all. >> 4 bucks again. >> i was about to say, it's getting up there. crypto, bitcoin at $25,702. that's not really budged. it's been sort of holding steady. >> it hasn't really reached 25. people say under 25, i forget what katie stock had said the next level is, but it's -- >> oh, next. >> below 25. it's like well below. let's see. let's get to dom chu with a look at this morning's premarket movers. what's next, the ryder cup? is that -- >> a couple weeks there. >> what should new york fans do? >> everything's on the jets. mets, yankees, giants, i mean, you got aaron rodgers, i hope he has broad shoulders. >> so i mentioned this on worldwide exchange this morning. i don't think that there are that many things that you can read in right now if your a

giants' fan, a bengals fan, a chiefs' fan, a seahawks fan or a steelers fan about what the rest of the season is going to look like. i'm happy that my niners really put abeat down on the steelers because i'm a niners fan. >> i think as a bengals fan i've seen this movie before, prime time, it was like oh, my god, it's on. i can't believe it, it's on. it's going to be great. it was -- i'd rather put needles in my eyes. >> i paid for the sunday ticket this year because i finally was able to -- now that it's not on directv anymore. here's what happened, i have joe burrow as my fantasy quarterback in one of my leagues. i also have travis kelce as my tight end. you can imagine how good of a week i've had. so let's get your morning movers set up for the new trading week. this stock is definitely helping to drive the premarket positivity. it's tesla up 6.5%.

it's over 2.3 million shares of volume so far this morning. the electric vehicle maker is getting upgraded to an overweight rating. the target price goes all the way up to $400. it was 250 before. so what's new for jonas and that team for autos over there, is this opportunity for tesla's dojo niinitiative. they think it could add half a trillion dollars to tesla's in enterprise value. tesla shares up 6.5%. a deal could be in the works for food. jm smucker's is closing in on a deal to buy hostess brands. it could be announced as soon as today. that hypothetical deal would bring together smucker's jelly, jiff peanut butter, with pastries like twinkies, snowballs and ding dongs.

let's get a quick check on shares of oracle. they're up about a preseercent so. it's been a huge outperformer, up 56% so far just this year, 2023. and by the way, the options marks is currently pricing in what could be an up or down 5% move in the stock on the heels of the report, and of course traders and investors will be closely monitoring any artificial intelligence related commentary from oracle tied to that report in the conference call, becky. keep an eye on oracle shares. the big report of the day. >> my son had jalen hurts in his fantasy league. he did pretty well yesterday. >> i have one of my other leagues has josh allen, so i'm pinning all of my hopes here because of my failed effort on my one fantasy team with joe burrow and travis kelce. i know that that puts me at odds with jets fans out there as well. i'm going to stay measured about

it. >> you watched the bengals, dom, or no? >> i caught part of it. this was the first season i had the sunday ticket so i could toggle back and forth. red zone can do that too. i bought the game obviously as a niners fan out of market in the new york area, and it just so happens that of course the first game of the season for me is the national televised game, right, across the country so i kind of didn't get my money's worth. >> it was raining. glove kept going on burr ow. he he was so worried about not throwing an interception, not a singl single ball was thrown that either team could catch. >> i would say the timing was a little rough. you're just hours after signing the biggest deal in nfl history for compensation. >> yeah, yeah, yeah, he's got some of those nice suits he

wears, leopard colored with the chains. >> brim hat. that's working for him. >> all right, thanks. got it. >> fair-weather fan. >> i know. i'm done. i'm a jets fan. >> don't do that. a big week ahead for investors with key inflation and retail sales data releasing this week. we've got wednesday and thursday the cpi and then the ppi. so we want to talk a little bit more about the markets and what the reaction might be with cameron dawson, she is chief investment officer of new edge wealth, and cameron, you think that the fed's not going to raise rates basically no matter what we get with the cpi or ppi. >> certainly if we had a big upside surprise to the cpi that could push the probability of a rate increase next week from the fed. right now there's a very, very low probability that's priced into the bond market. it is expected by consensus forecast for cpi you will see an uplift in the headline number coming from higher energy prices and it's quite a bit of an

acceleration up to 0.6% on a month over month basis. that's likely enough for the fed to hold for another month. really then it's a question of what happens to the 2024 forecast because wedo get an update to the dot plot at this september meeting, and the fed has 100 basis points of cuts already baked into the 2024 forecast. if we continue to see cpi remain elevated above their target and growth remain robust, it really does raise the question if that forecast is far too aggressive. >> yeah, that's what a lot of people may start wondering. the fed, if you talk to fed officials, most of them keep saying higher rates for longer. the market may be ignoring the for longer part of that because the idea of rate cuts anytime soon, that may be a fantasy. >> and then it's a question of course if that matters for the equity market because what we've seen this year is effectively that same thing play out meaning

that we have had higher rates for longer. if you went back to the forecast for the fed path at the beginning of 2023, we would have already been in an easing cycle right now, meaning that there were cuts priced in to start in july. of course that hasn't materialized, but at the same time you've seen a big uplift to equity markets driven by valuation expansion. if we don't get the easier, kinder fed in '24, will that matter for equities, and i think that's probably the biggest question facing the equity market going over the next few months. >> what do you think the answer is, what would you tell people to do right now? >> i think that as long as earnings hold up that there can be a floor under the equity market. i think it's one of the reasons why we have seen resilient trading. we saw that short shallow correction back in august, but we are starting to see earnings estimates get revised higher in the past couple of months. now of course it's then the question of how much uplift can you get from a valuation side of

things, meaning valuations for the s&p 500 back in july reach 20 times forward for the nasdaq, 31 times forward. that seems to be a ceiling of how much we can press valuation. so in a better growth but tighter fed environment, it likely points to lower returns, doesn't necessarily mean big down market, but not huge upside because of that valuation ceiling. >> real quickly, ask you about what you expect with the dollar. the dollar has had this great run, i think the longest weekly winning streak we've seen since 2015, but there were a lot of comments over the weekend about japan, they might end negative rates by the end of this year, and that could turn things down a little bit. you to see the dollar index weaker this morning. >> it certainly could. i think in the short-term from a technical perspective, the dollar did get overbought last week. it will have that extraordinary

run like you said, so on measures like the rsi it got oaf bought that suggest it's going to have a little bit of a period of consolidation. of course if you were to see a big policy shift by the bank of japan, meaning the end of yield curve control, which is still something they're not contemplating until the end of this year, that could put downward pressure on the dollar. it really is remaining to be seen if we're going to see the bank of japan shift that policy. if it does, it could mean a weaker dollar. >> cameron, thank you. >> ungthank you. is the u.s. auto industry about to come to a grinding halt? a strike deadline looms as they try to make a deal. we're going to check on the progress and the chance of work stoppage that could happen later this week. we have new details on the highly anticipated insta -- all that and more when "squawk box" returns.

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welcome back to "squawk box." ipo road show today with a scale down, market shares between 26 and $28 apiece. that's according to an amended s-1 out earlier this morning.

it implies valuation of as high as $9.3 billion, on a fully diluted basis. that's a quarter of instacart's valuation in a private funding round two years ago. it plans to list its shares on the nasdaq under the symbol cart. and expect its to start trading next with joe. it's been a summer of strikes and the next one looming is the uaw. gm, ford, and sta lantus laid out contract proposals. the offer from the automakers falling short of the union's demands. joining us is tim higgins a wall street jushl journal reporters. the recent jobs numbers are good but beginning to show some signs of weakness. i wonder if these devicguys, th might over play their hand. you've got gm offering 10%.

that's historically much higher than you'd normally see and ford 9%. the uaw asking for 40%. >> yeah, yeah, 40%. >> that's far apart. >> they want a 40-hour workweek and only work 32 hours a week. they want to return to pensions. they want a lot of things, and the big question is if they got everything they want, detroit's hourly compensation would go from $66 an hour to more than double that according to bank estimates, and the question is can they afford that? can they afford that long-term, can they afford that going up against the likes of tesla, which their labor is estimated at something like $45 an hour, and elon musk is pushing to cut costs dramatically in that next generation vehicle by 50%. when you talk about a future of ev for these companies, the question is, you know, what's a

affordability going to be. >> americans actually buy evs made by tesla. it's already much more expensive for these guys to make an ev. >> absolutely. >> if an ev does decide to buy, how much more is that going to cost? what are the margins going to be compared to tesla? >> ford, for example, is trying to improve that. they're losing a ton of money on the sale of each of their electric vehicles. they have plans to get to profitability. the question is how big of a lead does tesla have, and then you've got the union who has seen these record profits in the past ten years, and are saying stuff like record prorfits shoud make for record wage increases. they feel like they've given. go back to 2007 period. i was on this show, and i talked about how it was hard to imagine a strike then. and there was a strike, but that

was like a totally different time for the car companies, you know, close to the edge of the abyss, right? now huge. >> by selling f-150s and gas guzzling suvs. >> exactly. >> that's why they have big profits. >> totally. they're making the money on the suvs and the trucks and that transition to evs is very unclear and scary, and it's not only scary to the uaw but it's also scary to the engineers and white collar folks, who have made their money on gas guzzling cars. >> if they went on strike at all, three of the automakers, $5.6 billion hit to gdp just in the first ten days. does the president actually get involved? he's notoriously been hands off and said this is going to be up to the unions. the uaw is warning him to stay out of it. what happens? what's actually going to get these guys to the table? >> that's a good question. they've kind of withheld their

endorsement of him. >> the uaw withholding its endorsement. he's saying he doesn't think there will be a strike. the union wasn't happy about that statement. it looks like strike is in the water. the question is do they strike all three at the same time or go to the tradition pattern of picking a starting and going after them. >> and what do you think is the more successful route? >> with this new president it seems like there is a call for so drama, a call for something new, so perhaps we do see an idea of a three-way strike. there's a theory going around that perhaps it's a short strike to generate a lot of attention and then a pullback and pick one target like tradition. that's all just game theory at this point. you know, ron get l finger, the old uaw president would say those who don't know say, and those who say don't know, and we're in the final moments here. >> how much of this do you think is a fight effectively against technology?

we were talking about the fight in hollywood against ai. people are so worry their jobs are going to be lost. that's ultimately what's going to happen here. and if you talk about what yl elon's. >> it's a fight for what that future is going to be. not just detroit autoworkers, you see it in europe, you see it around the country in this kind of movement, really supporting the idea of unionization and these kind of summer of strikes really. >> and it's almost like the writers and actors waited too long because streaming is no longer this cash cow where you can share all the profits, there are no profits with everyone. and they're striking when gas powered cars are going -- theore theoretically, like the timing's not great. they're hitting the mouth that feeds them or whatever, the hand that feeds them is in precarious position in both of these

industries. >> it's a precarious position but there's also a feeling they have given, they have helped these companies get to this point where they are making huge sacr sacrifices. >> profits can go away quickly. >> the president did not call the union dog face soldiers, at this point, did he? >> i don't think so. >> that might be coming. >> tim , thanks. when we come back, the court rules the white house overstepped its bounds when contacting them to remove content out abcovid-19. this ruling could impact big tech and big government when "squawk box" returns. you know doug, ever since switching to workday you've been a real rock star. rock star?

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welcome back. the u.s. fifth circuit court of appeals has partially upheld an injunction restringting the way the government can coordinate with social media companies. saying the administration's efforts likely amount to a violation of the first amendment. joining us right now with more on all of this is aneesh chopra, the former chief technology officer at the white house under president obama. he's currently president of care journey. good morning. >> good morning. >> we've had this big debate. it's been going on around this table for quite some time kpt public square as well.

some people think it's not happening enough afternoon the public square. do you think first amendment rights have been quashed or otherwise blocked by this communication, if you will, between the administration and these technology companies? >> look, my personal view is that we want to have more open and free speech, but in the midst of the public health emergency we went through, there was a moment where we needed to have a bit more understanding of a new threat that hadn't been understood, and that is the rise of disinformation on social media. i don't begrudge decisions that were made in the past. the ruling just sets guardrails so we have clear perspectives about what to do moving forward. give guidance, provide expert judgment, flag content but maybe not go so far as to say this must come down, you must remove this account and so forth. >> what do you think about the idea of preventing that kind of communication between an administration and we'll do this

on all political sides. you also saw it are from other parties as well, communicating with the technology companies? >> yeah, the root cause of the problem is that we didn't honor up section 230, the sword and the shield. we gave folks a liability protection on social media platforms for the content that runs through their systems. they were supposed to step up and have some efforts to mitigate harms to society, what this is really a symbol of is that the frustrations and the black box of content moderation viewed by both sides of the aisle frustrating everybody, and to some degree that feels like a problem of the past as more and more of the content moderation practices move to this evolving concept of standards based and to some degree more -- >> what's the answer then? we talked about transparency. for example, should every communication -- and frankly, every communication at least over email and the like that goes from the administration to a tech company or anybody else typically can come out later in

a freedom of information act. should it be immediate? should people see the dialogue happening behind the scenes? and is transparency always the best disinfectant? are there times you'd want to be able to make that phone call, we talked about it in the context of reporting in journalism. i've gotten calls from all sorts of administrations trying to bend my ear on any particular issue and then of course it's up to hopefully myself and the organization and institution to try to do right. >> yeah, transparency in this case is of the al fgorithms tha address content moderation within the systems themselves. once those become more understood, then professional processes can be put in place. look at cybersecurity, one of the charging in the original ruling, that was the notion on cybersecurity flags, something is seen as a national security risk, sis is a, the federal agency tasked with making those communications more routine,

they don't require white house involvement or emails. these are structured formal communication that got process and transparency to how the platforms respond. many take actions immediately to mitigate security risks. we want to move towards more of a rational form of communication from federal agency with accountability on the platforms, but that requires the platforms to have a bit more clarity as to what the input is they want and how it feeds into their algorithms, the twitter's decision or x's decision to release the code open source makes that a lot easier. you don't have to deal with the -- pick up the phone, there's some urgent issues, something's not working quite right. that's a yesterday problem. we've got to move forward. >> do you think that facebook is going to follow elon musk's lead? >> maybe not in the open sourcing level, but i do think there will be questions made like monetization. do the algorithms promote viral

content good or ill because of the economic benefits to facebook, and that may create harm. so you'll see -- follow the money, okay, if the economics in these black boxes result in some effect, there will be more scrutiny of whether or not that should be mitigated, and you see some efforts in the multistake holder world to get recommendations of what considers to be, you know, inappropriate or unsuitable content for monetization. >> we're now coming up on an election year. how do you think this plays out in that regard now that be twi twitter's model is going to be open. i don't know what we'll see, i should say on facebook, and on youtube and the like. >> the bigger 80/20 rule of the threats in this election cycle are going to be about ai generate content. the white house secured commitments from the large frontier ai model to start water marking content, which will make

it easier for community notes or other mechanisms to highlight that this thing that's getting you rooiled up was generated by ai. i'm more anxious about ai generated content than i am particular accounts that say first amendment style comments that may become viral because people are frustrated, they need to hear that information or learn more about it. >> fair nuf. we're going to leave the conversation there. appreciate it. >> still to come, the irs launching a new crackdown on wealthy tax evaders with the help of ai. "squawk box" is going to be right back.

we have breaking news from qualcomm, stock's up about 7%. kristina partsinevelos joins us now with the details. good morning. >> i guess it is good, we're calling it a win for qualcomm. after much concern that apple was going to ditch qualcomm chips using its iphones. today we find out that's not the case. qualcomm announcing it will continue to provide apple's 5g mod dem chips. that's why you're seeing the stock react positively.

apple is designing its own chip. it bought intel's modem chip business in 2019, but the fact that apple continues to partner with qualcomm for the next three years shows how tough it is to make those chips. at this point apple still hasn't figured it out at scale. popular supply analyst ming she quo suggesting the modem chips won't be ready for another two years. ubs statistics show androids like samsung contribute 54% of that pie. apple alone contributes 23% of total revenue. this announcement implies that revenue stream should continue for the next few years or so. since this is material information, qualcomm wanted the news out today, even though it does fall one day before apple's

big iphone event tomorrow in san francisco. as you can see, qualcomm shares up over 7% right now. >> it was $185 stock not too long ago. qualcomm. does this have the worries and concerns about this have hurt the stock? >> no, not just about apple. there's been other concerns too. just in jgeneral. you have the cyclicality. >> qualcomm's ceo had warned they weren't going to supply apple chips in 2024. he said at the last earnings call, the earnings call before that. it definitely did have an impact. >> apple's a pretty good customer. >> 23% of total revenue and there's been a lot of tradrama between both companies for quite some time. >> was that just tough talk when he was saying we're not going to be a partner? >> i tried to get details about the drama. he said it on the calls. he said we will not supply, and to your point the stock did react negatively. i don't know if this is apple turning around and saying

finally, you know moving back a little bit and saying maybe we can't do it after all because it seemed like he really believed that, and that's why they put so much emphasis on the android business, which is over 50% of their total revenue. it is a pivot for apple to do this and go back to qualcomm. >> apple does a lot of amazing things. if you got a really good supplier, like, if i had to make my own chips, forget it. >> if you're saying that about apple you can say that about all hyper scaler and chips. let's see hoe successful they are to beat out nvidia or other chip makers. in this case we see it didn't work. so far. >> kristina, thank you. >> thanks c. the tax man going high-tech, the irs about to unleash artificial intelligence to catch wealthy tax cheats. we'll have that story, and we will hear from a budget committee member that wants to radically change the nation's tax system. plus, you can get the best of "squawk box" on our daily pod

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and more in prospectus at invesco.com. (sirens) [due at target in 5!] copy that. make a hard left down the alley. network's got you covered. [please confirm requesting back-up.] -changing route. -go. roadblock ahead. ...back up, back up... reverse! reverse! next level moments, we're 30 seconds out. need the next level network. [north corridor, hurry!] -coming through! -or 3, let's go. the network more businesses choose. transplant received. at&t business. welcome back, the irs turning to ai to crack down on those trying to avoid paying their taxes and guess who's here for that story? the one and only robert frank who knows all. >> good morning, andrew. good to see you. the irs announcing a sweeping historic effort to restore fairness to the tax system using

billions of dollars from congress and new ai technology tools. the irs is launching a crackdown on those wealthiest tax evaders. there are trhree parts to this. it's going to target 1,600 millionaires who owe more than $250 million in unpaid recognized tax debt. that's taxes they agree they owe but haven't paid them. secondly, they're going to use ai and machine learning to target the 75 biggest partnerships in the u.s. those have an average of $10 billion in assets. that's going to be hedge funds, real estate partnerships, law firms and others. the agency said ai is going to help them identify patterns of avoid dance and the most complex returns. next month they're going to send compliance letters to 500 large partnerships that have discrepancy that could point to underreporting of income. the audit rate for those earning more than $10 million has fallen

from 21% to 4% over the past decade because of under staffing. though the audit rate for the wealthy is eight times higher than the overall taxpayer base. the irs commissioner saying no one making less than $400,000 will see an increased audit rate. they haven't told us what that audit rate will be, but they say that they're not going to be audited at an increased rate, just targeting the wealthy. >> we were using avoidance. >> evasion are very different. >> we used it for those trying to avoid. >> that was not me. >> okay. >> >> everyone tries to avoid taxes. >> what would happen if you just said the irs is only going to be examining folks over name your num number. >> what do you make, over that is what you'd like? >> that isn't me. is there a number, though, who you would it change the dynamics? >> my view is why should there

be just saying we're only going to audit people above a certain -- look, there is tax evasion at every level of the income ladder, especially with all the payment services that you have now, the contractors, all the gig economy that is avoiding taxes. why are we just saying everyone under $400,000. i mean, they're still reqgoing be audited but i don't believe you should set an arbitrary number saying everyone above that should be the target. >> everybody should follow the rules. that's the basic -- >> i think we should put a target on those wealthy people. i do. they're horrible. >> how about do it for things that are not w-2? >> that would probably make more sense. it's harder to cheat with a w-2. >> this is a back doorway of effectively raising taxes on the wealthy. they couldn't do it legislatively, so they're saying, look, the irs -- and it's not to say the irs they should go where the money is, which is at the top, and there is evasion at the top, but i think there's evasion

throughout. the crypto crowd, based on what they found, there's 75% noncompliance in the crypto crowd based on arbitrary john doe letters they've sent to the crypto exchanges. there are all these other places, some of those are wealthy, but just to say we're only going to look at the top and all our ai tools -- >> we're going to talk to a republican in a moment who says we don't want to give more money to the irs because we don't want more people to be taxed or audited. and what i'm saying is if you said that 90%, 95% of america is not going to be touched, i think that would change the dynamic in terms of how -- >> you're right, and the commissioner on the call on friday said if you're a hardworking honest american taxpayer there's nothing to worry about, and that's exactly what they want. that's the message they want to send. >> robert, thank you. >> thank you. >> joining us to talk more about it is republican congressman buddy carter. he serves on the budget committee and introduced the fair tax act that would

essentially abolish the irs, you'd get rid of taxes on income but you would be talking about taxes on everything you buy, right congressman? >> absolutely. first of all, let me say -- >> congressman, i'm sorry, we're taking hits on everything you're saying, we're not hearing it clearly. maybe we can hold off for just a minute, try and get the audio fixed. >> we got to start over. >> i didn't hear a word of that. >> congressman, try again, let's see if maybe we got this fixed. >> okay. what about this? >> that's good. start over, though, you said absolutely and then you went on. >> okay, well, first of all, you know, to those who are mourning the loss due to 9/11, thoughts and prayers to them, but look, i'm not opposed to the irs being more cost effective or more efficient. that's what they should be doing. here we have another example of where technology is being used against the american people as

opposed to being used for the american people. look, tax cheats, they should be prosecuted. no one should be cheating on their taxes. but at the same time, we don't have a revenue problem here in america. we got a spending problem, and here's an example of the government using their resources to go after the american people instead of helping the american people. look, i was a small businessman for 32 years, and i can tell you, it's a harrowing experience to go through an irs audit. i went through two of them. you almost have to make a decision early on, is this worth it financially? is this worth it emotionally or should i just go ahead and concede and let them have it? this is another example of the american government using and weaponizing issues like this. and that's what we need help. what about the shoplifting that's going on in america. over $90 billion in shoplifting last year. why can't we do that?

why can't we address that with our resources? and i tell you ai is a hot subject right now in america and in congress. we're trying to get our arms around it, and we don't -- we're not there yet. i will tell you that. >> no argument there's a lot of issues that need to be addressed including the shoplifting and the theft that's taking place in stores, but let's talk about your proposal, the fair tax proposal. there's been a lot of criticism of it, i know you're trying to simplify things and just say that we will be charging a tax at 23% on everything you buy. the problem is is that really hurts lower income people because they're spending their entire paycheck on things. i realize there is a rebate at the enofd of the month, that ses pretty complex too just like the system now is complex because it includes all kinds of exclusions and things that make the tax code very complicated. if you were doing straight on income that would be one thing. if you were to just do this at

23%, again, it seems like it's pretty rekbgressive and hurts people that don't make much money. >> that's why we have the prepay. is the fair tax perfect, it's not perfect. i would submit to you if my colleagues would help us and come up with suggestions instead of criticisms, then we can make this better. look, people don't like to pay taxes. we all know that. however, given the choice between a property tax and a consumption tax, they would rather have a consumption tax where they're in control, not where the weaponized agency of the irs is in control. >> would you exempt anything? what about health care taxes? if someone goes to the hospital and has $100,000 bill are they going to have to pay $123,000? >> that's the kind of thing we need to be talking about. look, government's supposed to be about big ideas. that's why we need to be discussing this. is that something? and this would be an opportunity for us to help sectors that need help like this. certainly health care costs are

major among the costs that people are facing now. we've seen that. i serve on the health subcommittee of energy and commerce. we've seen the impact that health care costs have on people. it can be devastating, so there's an example of where we can address this situation. >> it then becomes complicated like the current system is very complicated if you start having exemptions. there's also been indpependent studies suggest that it would have to be closer to 30% to wring in the same revenue as we're bringing in today. >> i would submit to you, we don't have a revenue problem in washington, d.c., what we have is a spending problem. that's what people were so frustrated with is the fact that we're going after them when we should be held accountable, when government should be held accountable for our deficit spending that has resulted in $33 trillion in debt. >> all right, congressman, appreciate your time on this. i know that this is a plan that's come around again and

again, 1999 is the first time it came out. we'll see if it gets more traction this time around. congressman carter, thank you for your time. >> thank you. coming up on the other side, we're going to talk about building a tool to make bitcoin transactions faster and more scaleable. former paypal and med executive david marcus running pmeaynt startup lightning network. he's going to join us next. don't go anywhere. "squawk box" is coming right back.

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you could ask them for an email

address and email them easily the next minute. you could text them, add them to a group video chat, but if you were to send them money if they were not a u.s. citizen here in the u.s. using one of the same fintech apps you're using, you wouldn't be able to do that. we're still in the fax era of global payments, and that's what we're attempting to solve. >> why is that so important, by the way? the truth is, i can use venmo. others can use services that are connected to each other. why is that such a terrible answer? >> let's double click on that for a second. you can use venmo, but if someone is not using venmo or is an international tourist walking right outside -- >> right now, if i have an iphone and i want to message somebody -- if i don't have whatsapp and somebody wants to whatsapp me, they have to whatsapp app. >> you have text, which is universal, which you can communicate with one simple addressing scheme, which is a phone number, which is human

readable, and you can't do that with money. there's no universal protocol for money on the internet that actually enables value to be transported through the internet, so if you were to want to send money to one of these people, you would probably need to ask them for a bank account number. the bank account number would be in different format, depending on where you are in the world. you would have to walk to a branch and pay $50 to do an international wire, and if it's after friday, 5:00 p.m., tough luck. >> and how big a business is that? >> it's ginormous, millions o transactions through swift and other payment networks. >> let me ask you another question around bitcoin. we've all been questioning, where does this go, and does bitcoin ever really become a currency? do you think the value of bitcoin needs to or can move up if it's actually the currency? meaning, i've always made the argument the currency problem is if you think bitcoin is going to

30 or 50 or $60,000, there's no way i'm going to spend it on a pizza or on anything, frankly. if i think it's going to go down, i might spend it immediately. >> our view is that bitcoin is not the currency people will use to buy things, but a fragment of a bitcoin on top of lightning is like a small data packet on the internet, only for value. you can exchange at the edges of the network and send dollars to someone who will receive yen on the other side or euros. the actual net settlement layer that is used is basically bitcoin, lightning, and it settles at a very low cost. >> one last very technical question. there's always this idea of being on chain, meaning everything is seen on the chain. you can see where everything is. that's one of the great arguments about the benefits of bitcoin. for this to work, my understanding is that you are effectively on the chain, then

you go off the chain, and then back on the chain. the second you're off the chain, doesn't the entire sort of credibility and construct of the integrity of the system get upended? >> not at all, because transactions and payments typically are private. a merchant wouldn't want to have their competitor know exactly how much they were making in sales, and so payments need to be private. lightning brings privacy but compliance at the same time. and then it's built on the core trust principles of bitcoin because you can close the channel on layer one and everyone is settled. >> this is mr. bitcoin over here. >> if it was 60 or $25,000, it wouldn't matter with your little packet on top of the network. >> it wouldn't matter. >> because you can do it, at that given time, so you don't even care where it goes as long as it's still -- >> correct. the volatility is not a problem because you settle the transaction in sub one second. >> really cool. i like that. >> for the purpose of it actually being used to buy things, and he's not saying you're using it to buy things,

you're just saying you're using it to transfer value. >> nothing does that now. >> think of it as neutral internet money. >> the whole story of only 21 million and it's going to be mined -- that doesn't matter if it's $500,000 per coin. you'll still do it the same way with the little packets as you would at $25,000. >> i think the algorithmically programmed supply of bitcoin is massively important for the trust of the underlying system but not the price. >> i like it. david, thank you for being here. >> i'm sorry about that whole goldman-sachs fiasco. >> that's not me. >> all right. what a screw-up that was. no, that's not you. coming up, deputy treasury secretary wally adeyemo joins us next to talk the state of the ony. in avoiding a government shutdown and much more. constant contact's advanced automation lets you send the right message at the right time, every time.

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good morning. futures point at gains for the major averages as we get ready to kick off a week featuring new inflation data, and congress's full return to washington. and ipo news out this morning. instacart out with details about its upcoming offering in a rundown of the expected price and company valuations for you. and then, this hour, we've got a special interview with the kanter fitzgerald ceo howard lutnik on giving back as the nation marks 22 years since the

9/11 terror taattacks. the final hour of "squawk box" begins right now. ♪ good morning, and welcome to "squawk box" here on cnbc live from the market site in times square. the u.s. equity futures, take it on a monday starting off in the green. not quite what they were when we began, the nasdaq still up triple digits. the dow had been up a similar amount, up now 56, and the s&p up about 21. treasury yields, i saw 4.30% again on the ten-year. 4.30%, just above that, and the two-year, closing in on perhaps that 5%, although we should probably always look at oil at this point. i think it's $87 now even though down a little bit today, but i think $87 on -- $87 exactly on

wti. you caught up on some of today's stories. instacart out with new details about its upcoming ipo. the company planning to market shares between 26 to $28 apiece. that implies a valuation as high as $9.3 billion. that would be well below the $39 billion valuation from a private fund-raising round just two years ago. shares of qualcomm popping after the company says it will continue to supply apple's 5g modem chips through 2026. speculation recently has focused on the possibility that apple would stop using qualcomm's chips in its iphones. as we just heard from kristina partsinevelos, the qualcomm ceo said as much. qualcomm shares are up by about 5.6%. apple shares up over 1%. shares of chinese internet giant alibaba falling on the surprise news that the outgoing

ceo will also be stepping down as the chairman and ceo of the company's cloud business. the stock has recovered somewhat from the lows of the session. june's announcement that he would leave his post was also seen as a surprise. the stock actually right now down by less than 1%. president biden departing asia following the g20 summit and a visit to vietnam. president said the u.s. and vietnam were deepening ties in cloud computing and a.i., and the white house unveiled a nearly $8 billion deal for vietnam airlines to buy 50 boeing jets, and speaking about his time in india, the president said he met with president xi jinping's number two, but she was notably absent from the gathering. joining us to talk about the china-u.s. relationship, deputy treasury secretary wally adeyemo. secretary, good to see you. >> good to be back. >> we should never be surprised

that things were not expected, but 3% gdp for the near future, five years for china, was not something that i thought, i don't know, we'd get used to. that nation, accounting for 35% of global growth, and we can't count on that anymore. >> yeah. they have a bunch of headwinds in chinese economy, but as you know well, joe, they have a bunch of resources. the thing we should be worried about is the long-term structural challenges china has. bad demographics, high debt. ultimately, the challenges china has, they can solve, but it requires them to put in place reforms we've been calling on them to make for decades. >> no one thinks that president xi is threatened by what's happening, but is he the right guy? he's not as powerful as he used to be. one of the lead stories in "the journal" today is that he's -- his consolidation of power means he's not allowing stimulus. i've always pointed out that his backtracking on a lot of the private sector modernization

that we had seen in china, we've seen that, and that's partially responsible for some of the problems. >> i think you're right. when you think about it, one of the things the chinese haven't done is open up to the private sector, and secretary raimondo was there and made the point that opening up to businesses would be good for china because it would create competition in their economy and not just american businesses but european businesses and businesses around the world. as you all know, chinese businesses are able to do business here, sell things to american consumers. we want american businesses to be able to do the same in china on a level playing field. china doing this isn't only good for our businesses and workers, it's also good for china. >> we know that china probably wished that the recent trip by the commerce secretary would have ended in a relaxation of some of these new rules, and that didn't happen. she didn't backtrack. there was a lot of hawks that don't want her to, but we're partially responsible for china's slowdown, aren't we? >> no, i don't think we're

responsible for china's slowdown. we've really targeted a narrow set of things when it comes to china that affect our national security. china's responsible for china's s slowdown. they made a set of policy decisions coming out of covid that were very different than the decisions we made. we invested in our people. china did the opposite. you're seeing the repercussions. >> here you are telling folks, i think, china should open up, and american businesses should try to go there if, in fact, they were to open up. at the same time that we're basically saying we're closing down to them in many, many ways. >> preempt lively. >> i don't understand -- i sort of don't understand the messaging, which is, to me, either -- and i hate to say there's no nuance in it, but either we have a view that there's a real problem in china, and we shouldn't be doing business with those folks or not. >> i think you're right that the key is the nuance. what we have said is that we are

targeting a narrow set of things in china that we're not allowing them to get from the united states. but fundamentally, chinese businesses are able to do business here in the united states, to be able to sell things in america. we want to make sure that american companies are able to do the same thing on a level playing field, and the same with our allies and partners in europe. >> how concerning -- to the extent that china's economy is struggling or going to be challenged, how concerned are you about president xi acting out, if you will, whether it be geopolitically around taiwan or potentially talking about our fr treasury, if you want to boost the yen -- i mean, if you want to boost the rnb, do you start selling treasurys, for example? >> china's going to do what's in china's self-interest, and i think that while they have headwinds, they have the resources to deal with it. they have $3 trillion in reserves, and they have the ability to make investments in their economy. the question is what choices they're going to make internally, and i think they're going to be internally focused because that's where they have to -- >> how concerned are you about

the external choice of selling treasurys and what that means to our market? >> ultimately, there's no better resource for the chinese to hold than u.s. treasurys. deepest, most liquid market and that's why countries and individuals around the world continue to hold them. i'm more kshd concerned about what china's slowdown means for their neighbors and europe than i am about what it means for the united states. >> i think, wally, you do believe that it's a nuanced world. we deal with saudi arabia. we deal with, i mean, we have to hold our nose and deal with all kinds of bad actors in the world, but i'm just trying to figure out what some of the -- take apple, for example, or disney. there are companies that are so deeply involved with china, i just don't -- we must assume that they're not going to move -- that xi won't move on taiwan for another 20 years because it would -- everything would be -- all bets would be off if that happened. >> i think, you know, when you talk to ceos, something they have learned mostly from covid, frankly, was they need better

supply chain resilience. they can't have all their supply chains in china, and you're seeing a number of these companies from apple to companies throughout the economy build supply chains in china, mostly for their chinese businesses, but also looking to build supply chains in places like india, in mexico, that give them resilience in order to make sure that if one country decides to shut down their borders, they still have the ability to do business, and i think that's what you're going to see going forward. ultimately, companies are going to make the decisions that are in their self-interest, and i think that's why you're seeing a bunch of investments around the world in building up more diverse supply chains. >> have you spoken to anyone today about budget problems that are coming? do you have anything new for us on how this is going to play out? here we are again. >> i don't have anything new for you. but i think the key thing to remember is that we cut a deal this summer, and the people who watch your show, the ceos, the investors, when you cut a deal, the thing you expect is for the other side to fulfill the terms

of that deal, and part of that is we expect the budget to get done. democrats all agree here. our hope is that the republicans find a way to get us to a place where we can get a budget done. >> how are you concerned about the potential for a uaw strike, and what role do you think the administration should or should not play in those discussions? there seems to be sort of a mixed view about what the uaw even wants from this administration. >> so, what i know is that the uaw is an active conversation with the three out companies. our expectation is that they're going to get to a deal. my colleagues, gene sperling, and the acting labor secretary, are engaging in those conversations as appropriate, but ultimately, the conversation right now is so different than the last time i was in government during the financial crisis that those auto companies are having. they have profits. the question now is how do they make sure those profits are divided amongst the companies and labor? >> how do you think about the complication of technology,

which is to say, we're about to move into this new universe, if we haven't already, where so much of the manufacturing can be done effectively by robots. this is, by the way, similar sort of a.i.-ish conversation happening in hollywood right now when it comes to that strike, and folks trying to effectively protect jobs that ultimately technology may very well upend. >> and i think the truth is that technology already plays a huge part in building every car. i was at a ford facility in 2012, and you had a bunch of technology, but ultimately, they still need people. >> sure, but does it make sense to require -- i mean, this goes back to the issue we're having in hollywood, which is the writers' room. should they require eight or ten people in a room if two people can do the job? >> what i know about each one of these companies is they're going to do what's in their economic sense and what they have made clear to everyone is that it's in their economic sense to have these workers and to have labor union. >> if there is a strike, it's been estimate it would be a $5.6 billion hit to the gdp of

the united states within ten days if there's a strike at all three. do you have contingency planning for that? is this something the administration's thinking through? >> so, i'm not going to talk about the hypotheticals, but what i can tell you is that ultimately, both sides want to reach a deal because it's in their economic interest, and they're talking about how they're going to divide up an economy that's growing for the auto industry because of a number of choices they have made but also the investments we have made like the i.r.a. they're well positioned to cut this deal. that's what we expect them to do, to be in a position to grow the u.s. auto sector and by doing that, we continue to grow the economy. >> $33 trillion in counting, i guess? and i think $2 trillion this year added deficit? we hear the president consistently and a lot of his people bragging about having cut the deficit when it was a trillion last year and it's at $2 trillion this year. are you concerned? what about next year? should we not be, like, perhaps

misleading the public about how we've done with the deficit and start tackling it? >> i think the truth is that we cut a deal with republicans. >> no, i know. i just mean, big picture, what are we doing? another $2 trillion. we haven't cut the deficit this year. we doubled it from last year. >> the goal has got to be that we take steps to make sure we have fiscal sustainability. the president's laid out a plan that includes $3 trillion that will bring down the deficit. i think the question is really what is the oerther side proposing? we've proposed increasing funding for the irs so we can collect some of the money that people don't pay. we have a gap of about $600 billion a year. if we close that gap, that's -- >> it's not how much we spend? it's how much we're taking in? >> the president has also called for certain cuts and making sure we're in a position where we can reduce the cost of health care, which is a huge cost on our economy, by cutting the cost of prescription drugs, looking at

ways to cut subsidies to the oil and gas industry. you've got to have the other side be in a position where they have proposals that are credible going forward, and the pre president's willing to and committed to having that conversation to try and make sure that we're on a fiscally sustainable path. >> secretary, thank you. love having you onset. we got bigger things that we got to talk about. twinkies. i think a deal might be -- >> always good to be here. >> thank you. on that twinkie update, that deal we told you about earlier is now official. jm smucker is buying hostess brands for $5.6 billion in cash and stock. that is a 54% premium to the closing price from august 24th, which was the last trading day before the possibility of a deal was reported. you see smucker shares were down just about 10% on that. let's bring it back. take a look to the hostess, but smucker is down about 10%. hostess brands up by 17%. coming up, a very special interview with howard lutnick

and his firm's tradition of giving back as the nation marks eainhe september 11th attacks.

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stoday is the 22nd anniversary of the 9/11 terror attacks. a commemoration ceremony is being held at the 9/11 memorial museum right here in new york honoring the nearly 3,000 men, women, and children who were killed in new york, washington, and pennsylvania that day. as well as those who were lost in the 1993 world trade center bombing. several moments of silence will be observed this morning. the first one is a little later this hour, but you can see the scene right now. in the meantime, we want to bring in howard lutnick, the ceo and chairman of kanter fitzgerald and bgc group. kanter, as you probably know, lost 658 employees and 61 euro brokers on 9/11. howard lost his brother. howard came back in and rebuilt kanter fitzgerald and kanter has actually turned this day into one of charity at this point and we want to say, thanks for being here today. we are all thinking of you. >> thanks. it's such a tough day, so what we've done is we've tried to turn it into something

beautiful. all our new employees, they all waive their day's pay today, and our clients get together, and we try to make it special. lots of celebrities come, and we raised, last year, $12 million for charity, and i hope this year, we do better. >> who do you have coming in this year? every year, a lot of celebrities are there. lot of -- every year, you guys have people who are really working very hard to make sure this money is raised. >> so, matthew mcconaughey, nicole kidman, and keith urban. charlize theron, keenan thompson, lots of athletes. the rangers and the knicks are in town. just sort of every -- president clinton always comes by. we cover everything. we do this in london. we do it around the world. and you see these offices behind us, the brand-new offices, so obviously, cantor fitzgerald is on fire.

we're doing great things, and you know, the company's gotten so much bigger. we had to commit to rebuild the company to take care of the families, but now, the company's up to 15,000 employees globally, so it's come a long, long way. >> that's great to see. howard, let's talk a little bit about what you're seeing right now just in terms of where the money goes. has this changed over time, the charity that you're bringing in? and now you're reaching out to a lot of different charitable organizations and giving back some of those funds. >> correct. so, we invite in about 150 different charities. there's a process that they go through, but we invite in 150 different charities. remember, we started by taking care of the families of 9/11 victims. we gave them $180 million, took care of ten years of health care, and made them a part of us, and now we've expanded it. 150 different charities. all the celebrities, they come as ambassadors to a charity, so

they're helping raise money for a particular charity, and we try to give it to the communities where our employees work. sort of be connected to who you are and who we are and let's support the areas where our employees live, where they work, and what they care about, and what our clients, where they live, they work, and they care about, and it makes it a very personal day. tough day, of course, but very personal. >> very tough day. i hate to even bring up the questions to ask just what you're seeing in the broader markets at this point. but obviously, it's something that has made cantor bigger and bigger, as you do some of those things. what are you seeing in the markets? what do you think? >> well, you know, when markets are tough, we need to, you know, i say, embrace the avalanche. so, just this month, like literally just this month, we hired eric schmidt and josh shimmer, two of the best biopharma, biotech analysts in the world. we hired cole bader and a team

of 20 tech bankers. the banking business at cantor fitzgerald is growing. we hired doug harmon and adam spieth. they are liquidating the signature bank portfolio, so just this last week, we announced $33 billion is being auctioned in signature bank loans, an incredible opportunity. you go to new mark, by the way, go to newmark.com/signaturebank, you can bid on those portfolios, and it is amazing. there are 14 different portfolios, and so that's an example. and then our last company, bgc group, which is public also, new markets public, and bgc group, as, think about it, all those treasurys that you were just talking about being issued, the $2 trillion new deficit this year, they're issuing treasurys so much to trade and that business is really doing incredibly well. remember, at zero interest rates, there really wasn't a lot of trading going on. but now with interest rates back

at 5%, 5 .25%, the treasury issuing up a storm, volumes at bgc group are doing great. last quarter, up 13%. so, i feel really good about what we've rebuilt. you can see behind us, these are our brand-new offices, brand-new. i mean, a month ago, we moved in. so, brand-new. >> where are you now, howard? >> we're at 499 park. i'm at 499 park. we're also at 55 water. and if you could see behind us, our employees are back at work. the people who make money on wall street are back at work, back at their desk, pounding away. that's how you build the culture. that's how you collaborate. that's how it works at cross-ccantor fitzgerald for sure. >> we are so glad to see the success you all have had and to see where you have come, howard, and just want to remind everybody about this day and say, thank you, and we are thinking about all of you today. howard, thank you. >> so, this afternoon, at 4:30, we all get together with our

employees, and the families, down at the 9/11 memorial. they host us, and we have a beautiful service together, and all the families are together. the most important day, and we really appreciate your love and support all these years, guys. thanks for it. >> howard, thank you. again, we're thinking of you guys all day. howard lutnick. always, always. coming up, much more on the markets this morning. a big government funding deadline and a cci wk rualorfor apple. we'll discuss it all when "squawk box" returns after this. dick's sporting goods has everything you need to upgrade both. find top-rated drivers and irons from callaway, taylormade, titleist and ping. tour balls from your favorite brands. and the most dapper styles from travismathew and walter hagen to calia and lady hagen. you handsome devil. select the best golf shoes like footjoy, nike and more. and get back on the course with one-hour pick up. look good and play great with gear from dick's sporting goods. ♪"please don't go" by harry casey, richard raymond finch♪ (sfx: ping) (♪♪)

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coming up, the clock is ticking in washington. congress doesn't have much time to reach a new funding deal and avoid a government shutdown, but plenty of sticking points remain. te're going to get into them afr a quick break. "squawk box" will be right back. is it possible? with comcast business... it is. is it possible to use predictive monitoring to address operations issues? we can help with that. can we provide health care virtually anywhere? we can help with that, too. is it possible to survey foot traffic across all of our locations? yeah! absolutely. with the advanced connectivity and intelligence of global secure networking from comcast business. it's not just possible. it's happening. become an aunty. book a flight. stay 4 nights. meet the baby. make the baby cry. give the baby back. fly home. silver tier in a single trip.

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my legs. welcome back. not really. welcome back to "squawk box" on cnbc. the futures are back up a hundred on the dow, so we were up triple digits, and then we were up half that. now we're up again. so, good start to the week, and the nasdaq's picked up a little bit. treasurys, i saw we've been talking about 4.30% on the ten-year and maybe 5% on the two-year. 4.991%. and the dollar is probably where the strongest economy relative to all the others in the united states right now. there are's been doing pretty well. meantime, house lawmakers returning to washington this week. they're going to have just 11 working days to fund the government or risk a shutdown. you can mark your calendar right now, potentially throwing a monkey wrench into the process and the house freedom caucus. that group, likely to use the

threat of a shutdown to try to slash government spending. joining us now, jane harmon. also, mick mulvaney is joining us now, former white house chief of staff under president trump. i think we all understand what's at stake here. i think the real question is whether you think there is a red line here and we're going to go over it or not this time? >> let me say first that it's 9/11, and i was there, walking toward the dome of the capitol as a senior member of the house intelligence committee, and what's noteworthy is not only the heroism on the first responders in new york. kudos to the new york fire department for what it did, going up into those buildings that were glowing red. but to everyone in new york who suffered through this and at the pentagon. but at the end of 9/11, we came together as a country. the members of congress held hands on the steps of the capitol and sang "god bless america" and it didn't matter if you were a republican or a democrat standing next to you.

i mention that because now, 22 years later, we're in a really bad place where a small group in the house is trying to, one more time, shut down the government. we've seen three movies like this, long movies, at least in my tenure. the longest during the trump administration when mick was there, i think, for 35 days, and it hurts everybody, and it will certainly hurt those who want to do it. >> mick, you know this group. are they going to hold everybody up? >> yeah, i think they will, and i'll disagree with jane a little bit, and jane and i have talked before. we get along fairly well. i don't think they're setting out to shut down the government. i really don't think that's the goal. maybe for one or two of them. i think they want to spend less. there's also a group that wants to focus on border security. there's a larger group that wants to focus on impeachment proceedings and so forth, but i don't think anyone goes into this saying, the goal is to shut the government down. they recognize this is the only leverage that fiscal conservatives have. so, do i expect going right up

to the deadline? yeah, in fact, i'm probably close to 100% on some type of shutdown for some short period of time while these issues get worked out. >> mick, i like you, but i really disagree that a short-time shutdown doesn't cause the kind of pain we're talking about. first of all, the defense bill sont floor this week. will that pass? do we care about having a strong national defense? i was a blue dog in the house. we were devoted to fiscal responsibility. that group has shrunk, sadly, but i took the risks that you took for fiscal responsibility. you know, i proudly voted for a balanced budget in 1997. got overwhelming support, and we were talking about how we were going to spend our dividend, peace dividend, whatever, surplus in the early 2000s before 9/11. same point. i don't think these issues should cause us to shut down the government. i think we should work them out, and you probably agree with that

part. >> i do, but jane, so often, washington, d.c., compromise means you agree with me. this is what i hear the fiscal conservatives saying is, look, can we at least maybe get this on border security in exchange for spending this much more money? could we get something on an impeachment inquiry in order to spend this much money? could we spend a little bit less money than you folks want to? that's what bothers me about this debate. everybody in washington says, compromise means you agree with me. >> do you support the idea that we have to keep having these votes to deal with the debt ceiling in this way? i know it's a leverage point if you're a fiscal conservative, but the truth is, it is terrible policy from a global perspective, where the rest of the world looks at this country and says, do these people have their act together? every couple months, they seem to look around and have to question whether they're going to pay people back on time. >> is it really bad policy? keep in mind, this is not a debt ceiling discussion. it's a spending discussion, so it's in the same family, but this is the spending issue.

but look, the debates that we have had, jane just mentioned she was able to vote for a balanced budget in 1997. i'm pretty sure that was the last time we had one. one of the reasons they had that was because they had fights, including government shutdowns. the government shut down under newt gingrich. the death ceiling debates have been productive in terms of getting our spending a little bit under control in the past. is it ugly, nasty, does it look strange to people overseas? yes, but it's the way the system works, and it's always worked. the government shut down for 35 days in 2019 when i was the director and no one seems to remember or care anymore because only about 15% of the government really shuts down and to jane's point about military, and she's right to a certain extent, but jane, you and i both know that a continuing resolution, which is one of the things that's being offered as a compromise, damages the defense department just as much as a shutdown does. >> i'm not for a budget by cr. i am not. that does hurt the government.

our military are the readiness is crucial at a point where kim jong un is meeting with vladimir putin and they're doing an exchange which could lead to more lethal nuclear capacity in north korea in addition to more russian capacity against ukraine. these are scary times, and our government has to show unity, and i think you're absolutely right that when you travel around the globe, people think we're falling apart. our biggest weapon is our political democracy, and that democracy is in tatters at the moment, and kevin mccarthy's holding on by a thread. he made a deal with the devil. i don't mean that these people are devils. but he made a deal that makes his survival as speaker enormously fragile. and i hope he can hold on because i think what comes next could be total chaos, and that communicate to the world that american leadership is maybe not worth trusting, and that scares me to death.

it is worth trusting. joe biden just had a very successful trip to asia. >> why is it worth trusting if you're saying that we're just about to get into a situation where the whole government's going to shut down? >> i'm saying that is the problem. i'm saying american leadership, the things that we do, the values that we hold, the fact that over time, and mick was there too, we were able to work out problems in a civil way and actually listen and learn from each other, listen to and learn from each other, is part of why america has been, as ronald reagan said, the shining city on the hill. >> we got to leave with the conversation there. jane, thank you for coming in this morning. mick, thank you for the discussion. i'm sure we'll talk a lot about it over the next 11 days, if not longer, and let's hope it's not. all right, when we come back, we'll talk about what's at stake for apple and its shareholders at tomorrow's expected iphone reveal. al will be speaking with the top anysts when "squawk box" comes right back. took over our office. and he's using it to send out medical bills.

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welcome back to "squawk box." shares of apple slightly higher this morning, but they took a beating on reports officials in china will face iphone usage restrictions. this comes ahead to the iphone 15 unveiling. joining us now, senior research analyst from newberger burrman. what are you expecting to hear tomorrow? do you think it's baked into the price of the stock or not? >> good morning, andrew. i think we'll see new devices with a lot of emphasis on the

pro where you'll see advancements in key areas like the camera, of course, video, and photography becomes more and more important with each generation. i do think the stock is attractive here. i appreciate the concerns around china, which i think apple will continue to be able to navigate. if we step back, the key really is the innovation around the products, the ecosystem is healthy and the install base is continuing to expand, and so if you put that all together, i think the investment opportunity remains attractive over the coming year. >> dan, there is some question mark, though, about whether people are holding on to these phones for the purpose of the investment side of it, for maybe too long. do you think that's the case or not? >> i think the replacement rates have been lengthening. the key, though, is that if you have over a billion devices in your install base and even if it extends out to four or even five years, apple is still able to

sell over 200 million iphones a year. the other important piece of the equation is that you're seeing customers mix up. more and more customers want the pro or the pro max because of the better capabilities, and that's helped average selling prices. and so putting those two together has led to what is still, i think, a very durable business, even as replacement cycles extend. >> dan, how big a risk do you think the situation in china presents for apple right now? >> andrew, if we look back at the last several years, the chinese government and state-owned agencies have tried to push for chinese-made pcs. we've seen the same in telecom equipment, and so i think this is really a continuation of that trend where the chinese want to see more local products being bought and consumed by their population. if you look, though, what apple has done, you have millions of

people in the apple developer ecosystem, their supply chain, so apple's been a good corporate citizen. i think, sure, the chinese government may look to make it a little more difficult for a lot of foreign-owned technology companies, but ultimately, it's going to be the products and the services that i think will matter to customers in china, who, of course, want the very best. >> but in terms of what is the larger risk to apple? in terms of not just what's happening with the government now but do you see this actually taking even bigger shape? >> i think you're going to continue to see raised levels of tension. you're already seeing bifurcation of supply chains. with respect to apple, if apple is able to continue to straddle this delicate line between beijing and washington, and add value to both the chinese economy and, of course, the american economy, i think they're going to be able to do that. andrew, i wormry smore about thr

ability to execute on the product cycles. it's been driven by the strength of their product line-up. >> okay, dan, we're going to leave the conversation there. we're going to keep our eyes, of course, on apple's announcements tomorrow and all the new products and see what happens. thanks, dan. >> thank you. all right, it's almost not quite 8:45. we're going to check the futures while we still have a chance. we're up about 95 points now on the dow. nasdaq, up about 132 or so. the s&p indicated up 500. i'm sorry. the s&p, 500 indicated up about 26. i'm thinking about where we're headed and it's almost 8:45 here on the east coast. in just a minute, those gathered at the ceremony at the 9/11 memorial and museum in lower

manhattan will observe a moment of silence on the 22nd anniversary of the 2001 terror attacks, and it was 8:46 a.m. eastern, the first time that an american airlines flight struck the north tower at the world trade center, and the hashtag, never forget, i've used it, and it's trending, obviously, and it's what all of us are thinking, and we will never forget that morning, and i remember it so well, like it was yesterday. and it was during the show, as you recall, and maybe mark haines, the late, great mark haines' finest moment. it was very difficult, horrific, and it changed the world. it changed our view of the world. and we all, as americans, share that, i think, that collective horror. anyway, we are going to observe

this moment of silence right now. ♪

♪

welcome back to "squawk box." we are watching shares of tesla this morning, the stock earning an upgrade from morgan stanley. adam jonas and morgan stanley autos team citing the opportunity for tesla's dojo custom super computing initiative that's meant to help power self-driving car capabilities. the analysts think it could add up to half a trillion dollars to tesla's enterprise value. that stock at $264 this morning. meta is reportedly looking

to ramp up its artificial intelligence efforts. according to the "wall street journal," the company is working on a new a.i. system intended to be as power aflz the most advanced model offered by owners openai. it would help companies produce sophisticated text, analysis and other offerings and part of mark zuckerberg's push to establish meta as a major force in artificial intelligence. the shares of rkx, the company formerly known as raytheon, announcing it will buck a roughly $3 billion pretax operating charge. operating profit charge in the third quarter related to its pratt and whitney gtf engines. the aerospace supplier is also cutting its sales outlook for 2023 to a range between $67.5 billion to $68.5 billion, down from 73 to $74 billion previously. market seems to be stuck in a little bit of a typical but

anxious seasonal pullback, according to our own mike santoli, who joins us right now with more on that. this is september, right, mike? >> that's right. it was august before that, and all that fits together, because in mid-july, starting around that period, in the wake of a very encouraging cpi report around the 13th of that month, the market did get a little overheated. you had probably the need for the valuation and sentiment and technical positioning, all that stuff to cool off. that's what's happened and we've been churning ever since. kind of right below this 50-day moving average, we had a maximum of about 5 or 6% intraday, maximum decline, trying to recover some of that. there's been a loss of momentum, and what happens then is especially this part of an economic expansion, people start to assume we're in the late cycle, is anything going to throw us off course? the hard versus soft landing debate has been very much in force. take a look at a couple of worry points. that's feeding into those concerns. which would be the bond market and the oil market. both pushing the upper end of their range.

i have the inverse treasury etf, which basically tracks yields, so you see that on a year-to-date basis, it's been going right along with oil prices. i would argue neither yields nor the price of a barrel of oil or a gallon or gasoline are themselves at critical, absolute levels that the economy can't handle. we just don't know that in advance, so that's why the market is watching them pretty warily. i would also put the dollar in this category today. in terms of the fed, we have another cpi report coming tomorrow. take a look at the one-year treasury yields, one we don't focus on much, but i like to see how this steadiness right around this 5.4 level, so project ahead one year when this bill matures and the market's essentially saying the fed funds rate will probably be roughly around here. and so, right now, at least, the higher for longer type of message from the fed is registering here on the one-year note basis, even though some of the fed funds futures say, yeah, we could get some cuts starting in the first half of 2024.

that certainly remains to be seen, becky. >> that's been a big argument, back and forth, about whether there are expectations for fed chopping rates, come back down. we had a conversation with cameron dawson about this earlier. you think that is baked into the market? >> i don't think the stock market is here at this level and holding up well strictly because cuts are anticipated. i think that the fed funds futures market is saying, well, if the fed is almost done, probably, then what's the direction of surprise off of being almost done? it's probably to cut if something goes wrong or if they feel as if inflation is tame. so, it's really a probabilities game as opposed to people wishing and hoping and betting that we get some cuts in the next six months. >> i like that take. mike, thank you. all right, joining us now for more on the markets, zach hill, head of portfolio management at horizon investments. good morning, zach. it's good to see you. so, fed's data dependent.

thank god, right? so, to try to figure out what the fed's going to say doesn't really matter if we don't know what the data is, does it? >> yeah, i mean, that's the way that we're thinking about it. last year was really about that kind of interplay between understanding what the fed wanted to do and needed to do with rates more so than the market, and you know, as we sit here right now, pretty much regardless of what happens at the september cpi or the august cpi print, the fed's not moving in two weeks. and so, really, what we're thinking about is november and further out, and that's where there's a little bit of dispute, and so going back to what mike was saying, i mean, rates do really matter. that's what we're watching across the board here for markets right now. >> you've been friendlier to financial assets than many. do you still feel that way? i don't believe you think there's a recession coming, but we may not have rate cuts anyway. >> yeah, that's right. we have been more bullish on the economy, and really, that kind of comes down to the consumer

and the labor market. you really need to break the labor market in order to get a recession, a proper recession, that we really care about and all signs point to a very, very tight and very healthy labor market. we think that's a good thing that provides kind of medium term support for asset prices. but you know, right now, as we sit here, entering september, it feels like we might see a change in trend. we're watching markets really, really closely. yields is a big one, and also, you know, the data that we get coming in to kind of see where this next trend that we're going to have before we get to q3 earnings season. >> from data we do know, as a barrel of oil costs $87. do you think that makes -- if you got to go somewhere in the market, you're not sure financials makes sense or even the overall market, but energy makes sense? >> yeah, i mean, we like energy. a lot of the same kind of reasons for liking energy last year, you have structural undersupply, years and years of lack of capital investment, investment overhang kind of from

the community writ large. all those things still apply. the reason that energy really cooled off at the end of last year, beginning of this year, is that we were afraid of a recession. as we sit here right now, we don't see a recession in the next six months, so you put all that together, and energy trades quite well. especially when you have an immaculate disinflation view for the market. it's a really nice hedge with the asymmetry that we have. >> you buy that, though? i mean, if you -- if you don't buy that inflation's under control before oil went to $87, how do you buy it now? >> you know, i think, joe, what we've learned about inflation is just we have to be humble and trust our models, but as we kind of look back and say, okay, where do we get things wrong? where did we get things right? obviously, energy prices matter not just for headlines for also for kind of the broad-based -- it's one of the most intangible things about inflation that we have, what you drive by and see

what the gas station is offering for a gallon of gasoline every day is something that consumers really internalize, and so that's something i think that's really important for us as we look forward and thinking about the reaction function for rates and where the fed's going to go and when they are going to start cutting, which is quite uncertain. >> we only got about 30 seconds left. what inning are we in, in terms of this rate-hiking cycle? >> england we're in the bottom of the eighth, top of the ninth. i don't think it matters quite honestly. 25 basis point hike in november. really, does that change the overall situation when you got rates at 5.5%? no. what we're really more focused on is how strong the economy is, how long we can continue to kind of chug along, and for that, the labor market is what we're looking at. >> it's not going to be extra innings or a double header or anything like that. that's not on anyone's card? >> those are too many analogies for me. i don't know. >> you missed the yankees here.

they were no hit for like 11 innings and then they won. it was the craziest game i've seen. let's get a check on oracle. it's been a big outperformer so far this year. look at this. up already 55% just in 2023. the options market currently pricing in what could be a move of 5% on the stock, up or down on the heels of that report. it had been the sort of laggard, though, prior to that. people hadn't given it frankly enough credit, so the question is whether this continues this afternoon. >> we'll see. let's take a final check on the markets right now ahead of that. you see the futures this morning, we've been in the green all morning long. dow futures right now indicated up triple digits, 109. >> if you need to take over, just let us know. >> jump in for me. >> you're looking at the dow up 1111 points. let's show you the ten-year. the two-year, though, still

right under 5% but sitting right there, basically, 4.995%. >> the dollar's been of interest. it has been the longest weekly winning streak we've seen for the dollar since 2015 but this morning, you can see a little bit of weakness there. there were comments out of japan talking up the yen a little bit and talking about zero interest rates. anyway, folks, that does it for us today. make sure you join us tomorrow. right now, it's time for "squawk on the street." ♪ good monday morning, welcome to "squawk on the street," i'm carl quintanilla with david faber at post nine. cramer's at one market in san francisco ahead of dreamforce, which gets under way tomorrow. futures kicking off monday with some green on the back of this tesla upgrade. very busy week between dreamforce, apple's event, cpi, ecb, some conferences, and the uaw contract expiration. our road map begins with this massive week ahead for investors. lot of economic data. that looming auto strike