monday, september 18th, 2023. i told you monday would come quickly. i told you that on friday. "squawk box" begins right now. ♪ good morning, everybody. welcome to "squawk box" right here on cnbc. we're live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. it's monday. it's raining in new york city. you've got the u.n. here. there's no chance anybody is getting anywhere if you're trying to get through traffic this week. yeah. that's what mondays will do to you. well, let's check out what's happening with u.s. equity futures. >> nothing. >> mostly green arrows. >> nothing. >> but the dow giving back what had been green arrows five minutes ago. s&p futures up by 1.5.

nasdaq up by 10 points. halfway through the trading month of september, the dow is down by .3% for the month to date. the s&p 500 down by 1.3% and the nasdaq down by 2.3%. and treasury yields are pretty important because you do have a fed meeting this week. right now the ten year is sitting right at 4.34%. the 2-year just above 5% and we will see what the rest of the week brings. talking about what the rest of the week brings, here it is. squawk planner for the week. the fed is the big story. kicking off a two-day meeting starting tomorrow followed by a news conference which will happen by jay powell. wednesday expected to hold rates steady but planning to focus on the guidance, both economic and projections and forecasts for the rates at the end of this year. few earnings of note, we're going to hear from general mills and also get fedex and kb home and darden will announce its earnings on thursday. right now we want to get to

the autoworkers strike, as joe mentioned the uaw not making much progress, rejecting the latest offer from stellantis over the weekend. phil lebeau joins us right now from toledo with the latest. phil, good morning. >> reporter: good morning, becky. still a big gap between the uaw and the big three when it comes to proposed pay hikes over the next 4.5 years. as we have been talking about for a couple weeks now, the uaw wants 40%. there's been some talk about maybe they'll come down into the mid 30% range. that's nowhere close to where the big three, what they're offering over the weekend stellantis raised its offer to 21%. ford is at 21% then you have gm at 20%. for ford, the talks over the weekend were deemed reasonably productive. not a huge endorsement but that's what the uaw said about talks over the weekend. they are in the process of laying off 600 workers at the michigan assembly plant because work cannot be done due to the strike going on there. so as a result, ford says those

600 people we have to lay them off. similar situation with general motors. it expects to lay off 2,000 workers at its fairfax, kansas plant where they build the malibu, the cadillac ct 4, the gm missouri plant where the uaw is striking, provides stampings that go to the fairfax plant. if there's no work in missouri, there's not going to be much work for much longer at the kansas plant for general motors. so that is expected to happen this week. and finally, as you take a look at shares of stellantis, one interesting issue here is the future of the company's belvedere plant which is just outside of rockford, it's been idle since february. originally they talked about reopening it as part of the negotiation, then they apparently took that back off the table. that raised the ire with the uaw. guys, this is front and center. the uaw wants guarantees in terms of production and in terms of that plant in particular stellantis. not a lot of progress here.

they're still pretty far apart. >> phil, when you said that the ford talks were deemed reasonably productive. i mean -- >> reporter: yes. >> same level 21%, what are they willing to give besides pay increases that makes that a different situation than the other talks. >> reporter: a lot has to do with dropping the wage tiers. just to explain how the wage tiers work. they were put in effect back after the bankruptcies at gm and at chrysler coming out of 2008/2009. the auto company said, look, we cannot pay everybody who we hire the top rate. we have to adjust it. so you come in at a lower rate and then over a number of years you move up to the top pay rate. well, the uaw has said, for many years, this is ridiculous. somebody gets hired in at 18 or $19 an hour, it takes them 8, 9 years to get up to the top pay rate. you shouldn't wait to get to 28, $39 an hour. whatever the top pay rate may be. so they want those mightily

condensed or eliminated all together. the automakers believe that they can make movement there, but that's one of the key areas. >> last week gm i think cut the number of years from eight to four in their offer. is ford willing to cut even more than that? >> reporter: you know, becky, now you're getting into some details here that are -- it's literally changing by negotiation day by negotiation day. so it's hard to say, well, ford is going to do this and gm is going to do this in terms of wage tiers. not all the wage tiers are exactly the same because not every contract is exactly the same. so, there's some movement within there. whether or not ford is eliminating it completely or going down to one, i can't tell you because that is shifting day by day. >> phil, stick around. we have more to talk about with this. we want to bring in tim higgins, "wall street journal" reporter and cnbc contributor. in his latest column, tim says that regardless of the strike's outcome, elon musk has already won. and tim, thanks for being here. that may be a little self

descriptionary, easy to understand from all of this. elon musk is not dealing with unions in the same way. he doesn't have any unions. >> yeah. he's not at the table but his presence is looming over. it gets down to the labor costs. the uaw workers at these detroit automakers on average all in about 66 bucks an hour. that includes benefits. at tesla estimated at $45 an hour. so from day one, when they start talks and talking about spending more, elon wins because tesla is cheaper to make cars over there for those electric vehicles. and it's not just cheaper, it's also they're working to cut costs even more in the future. they have already talked about slashing manufacturing costs by 50% for the next generation vehicle. so the ua wx would probably say it's a race to the bottom, but it's a race to make electric vehicles profitable and tesla is doing that. where as the likes of ford are not. >> the biden administration is going to get involved, tim. i'm trying tofigure that out.

calls himself the most pro-union president in the last 50 years. how does that -- when they go in to try to mediate, how does that work? i remember corzin was the governor of new jersey and negotiating with the public unions. and he was giving a speech saying we're going to get you a great deal. so that's the perp thson trying protect new jersey taxpayer's dollars from being -- from giving too much, too many concessions to the public unions. he was also the governor negotiating. reminds me of the same thing. what line will the biden administration walk in this? are they going to twist the arms of the big three? >> well, it's definitely a challenging position for the president politically, a, a long, self described car guy,

labor pro, but the president is frankly frustrated with the biden administration, feeling like the biden administration has been pushing these automakers towards electrification of the automobile, putting money to incentivize that and yet worried that the worker is going to lose out. estimates of 40% less labor needed for electric vehicles. this isn't just a concern for detroit. this is a concern for all automakers around the world. when you're talking about electric vehicles it's less complex motors and less complex building that's needed. so, where do they sit in that new world order? >> phil, let's talk just a little bit about -- phil is still here. >> oh, you're going to talk to phil. we have tim. >> tim and phil are both here. >> that's confusing. >> phil, let's go through again just the idea of what happens -- gosh now i lost my train of

thought. >> it's our fault. >> what happens in a scenario. we spoke with harry wilson last week. he was at the table back during the auto crisis back in 2008. and was negotiating with them to give up a lot of things that the uaw is now trying to win back. phil's point was that, hey, this all makes sense if they want to get much higher raises. he thought the offers from the automakers were incendiary when they started out with the offer of 7 and 8% increases that they should get something closer to 30% but all the other things, pension benefits and some of the other issues that the uaw is trying to put back in, 32 hour workweek, he thought that was a no-go. >> reporter: yeah. >> is that sort of frame of mind something that's there? i asked if they called harry to get back to the table because what he was talking about made sense from the longer term perspective of what was lost, what they should be getting and what would be so bad that it would put the automakers out of business. >> reporter: well, the 32-hour

workweek is one that the automakers will fight tooth and nail because their feeling is, look, you want to talk about pay increase, let's say you're going to increase the pay and i'm just throwing out a random here, ultimately settle at 25%. you want to cut the workweek down by 20%, that's another 20% raise on top of that 25%. and in addition to that, you take a plant like kentucky truck plant for ford. it's not going 24/7, but it's pretty darn close over the course of the week. you move that down to 32 hours a week for the workers there, they will have to hire more people in order to continue production at the rate where they are right now. that's the most profitable plant within the ford system. so, if you are ford, you don't want to hire more people. you're in the process of trying to become leaner and more efficient. that's the rub there when you talk about the 32-hour workweek. >> i don't know, either tim or phil can answer this. i'm curious if it's a function of the stock.

this actually goes back to tesla, talking about tesla being the winner in all this. for quite some time there was a period of time, at least, where it looked like tesla employees and those working in the factory floor were actually making more on an hourly basis than the unionized workers at gm and other places. this clearly appeared to be true two years ago and almost one year ago. may not be true today and has become a talking point. have you heard this? and i assume this is a function of the stock price of tesla not being what it was a year and a half, two years ago? >> you know, it's an element of the upside. traditionally the uaw wants to in essence guarantee what they're going to be getting. they have been persuaded to go with contracts that have bonuses tied to the profitability of the car company. but in the past, we have seen reluctance to go with stock

options that are perhaps more spectacle, speculative in nature. they want to be tied to the dollars and cents of the company. a tesla is more like a startup. that's how workers at the company from white collars to the assembly line have largely been compensated. and that's kind of the silicon valley mindset. >> tim, my question -- we're going to have someone used to be at the nlrb on later. you need to understand the economics of the union's proposals that they gave -- in 2007, they accepted a lot of concessions to sort of pitch in. she goes on to say now that profits are booming, they want a share. and how long do you think profits are going to be booming? here is "the new york times" today. they were talking about biden cracking down not necessarily on car emissions but just the overall industrial emissions. but there's going to be all

kinds of emission standards, transition to ev. do you expect profits to continue booming for the next couple of years for the big three? >> well, that's really -- >> reporter: joe -- >> you're hitting at this idea of the cost of evs for these companies is a real headache for these executives. in some ways they are funding that development from the profitability of their suvs and their trucks. if you look at that mountain of money that they're doing from those vehicles, it has to pay a lot of mouths, right? that development of evs but also workers. >> go on, phil. making all your money with the big gas guzzlers, that's going away to the make the evs. >> reporter: it is going away eventually, joe. it is going away eventually. the question is when, joe. right now the average transaction price for each of the big three, somewhere around 51,000. gm is at the highest. over $51,000 per vehicle.

the thing to focus on here, north america. you know, i hear people say all the time, well, how much are they making in china or how much is ford making in latin america or with their pro division in europe. that's not the concern of the uaw. the concern of the uaw is what are you doing here in the country where we are building vehicles? and profitability has never been stronger in north america. record profits in north america. that's why the uaw feels that it has leverage right now. >> all right, phil, tim, want to thank you both. i get the feeling we'll be talking to you a lot in the days and weeks to come. another strike. keep talking about strikes. talks between the writers guild and hollywood studios are set to resume this week. the two sides haven't even been at the negotiating table since august 18th. what's today? september 18th. >> yep. a whole month. drew berry more is backtracking.

he announced yesterday that her talk show would not return following blow back from her decision to resume production without writers. and she said she's pausing the show's premiere until the strike is over. and after berrymore's announce, including "the talk" and the jennifer hudson show. wow. jennifer hudson show. said they would also postpone their premieres. i thought of drew last week when i saw those aliens down in mexico. they looked just like -- >> like "e.t." >> plaster of paris mexican aliens. >> their heads were a little smaller and their bodies weren't quite as big. >> they were e.t. they looked like the -- whatever steven spielberg put together when they're doing a show board or whatever it is, they stole those, sent them down there and said these are real. that's what i thought about. she saw them and said, oh my god, those are real. coming up, yeah, she got in

trouble for trying to start up again, right? is bill maher. >> bill is. >> he's on. >> he says he's doing it. did he start this last week or starting in a week, i think. >> he's an enigma, he's an iconiclass. update -- unpredictable, isn't he? which side? update on the looming government shutdown. >> you like him for all those reasons. >> i do. i like him more. i like him more. house republicans putting out a new bill to extend the deadline. details straight ahead. a programming note, don't miss treasury secretary janet yellen today on "squawk on the street." i was told she was at a restaurant friday night. yep. the interview is coming up at 10:00 a.m. eastern. you're watching "squawk box" on cnbc.

...in real time. (jen) so we partner with verizon to take our operations to the next level. (marquis) with a custom private 5g network. (ella) with verizon business, we get more control of production, efficiencies, and greater agility. (marquis) so our customers get what they want, when they want it. (jen) it's not just a network. it's enterprise intelligence. (vo) learn more. it's your vision, it's your verizon. you got this. let's go. gobble gobble. i've seen bigger legs on a turkey! rude. who are you? i'm an investor in a fund that helps advance innovative sports tech like this smart fitness mirror. i'm also mr. leg day...1989! anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. i go through a lot of pants. before investing carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com.

rich, velvety coffee. café quality espresso. one high-pressure system that can do both. brew to your heart's desire with the l'or barista system. a masterpiece in taste.

now an update on the looming government shutdown, which could happen at the end of the month. house republicans released a bill after two factions, the freedom caucus and the main street caucus reached a deal. the bill would keep the government funded through october 31st. scary, isn't it? halloween. and includes cuts to domestic spending. those spending cuts as well as

immigration provisions would likely make their bill a nonstarter in the senate. which is led by the democrats. the compromise, though, the deal could help speaker kevin mccarthy pass defense spending bill this week that's been tied off in a standoff between republican leadership and the party's right wing. and f words were coming fast and furious, supposedly, from -- >> f bombs. >> from gaetz and speaker mccarthy and -- >> really? >> behind the scenes. oh, yeah. and i don't think they were f- f-r-i-g-g-e-n. the full on. >> wow. let's talk about what happened on "meet the press" yesterday. the new host kristen welker sat down with former president trump in a wide-ranging interview. here is what he said about a potential government shutdown. >> do you think republican hardliners should abandon their threat to shut down the government over their spending

priorities now that there is this impeachment inquiry? >> no. if they don't get a fair deal. we have $35 trillion in debt. we have to save our country. >> you would support a government shutdown? >> i would shut down the government if they can't make an appropriate deal. absolutely. >> pretty good interview. there was a lot of sort of different pieces to it all. >> trending 50,000 trends. she apparently referred to him as mr. president. and that made a lot of people very angry. i saw some other things that just said, so, meet the press, trying to get ratings. s saw fit to interview a rapist, trade ris -- even to put the guy who is leading -- i don't know whether it's good or bad that he's leading the gop primary. he has like 60%. so it's newsworthy to put him on. it almost reminds me of anderson cooper who said, i can understand if people never watch

cnn ever again after we had donald trump on. so that's -- but, how does kristen walk the fine line between -- there's people mad at her for not conceding about something about abortion. >> to compare that to the situation that happened on cnn is totally different. it's a different situation. >> you thought he was coddled on cnn. >> no. because it was a live format. >> is isn't that good? isn't both of them okay. >> no, actually no. i think it's very hard -- >> to fact check him. >> i think it's very hard given who he is and what he says to air him 100% live all the time. by the way, i think that's the policy of nbc news. i think i can say that straight up and down. am i correct? >> you think it's okay to interview president biden. everything he's saying is -- should that be fact checked maybe? >> i think there's a difference -- look, it's impeerically raining outside right this second. >> you always come up with this. >> i said before. >> the things trump say are not

factual but the things biden says are stretching? >> but i think -- >> stretching the truth a little? >> if you're going to sit here and criticize how journalists are approaching this, we have to have a larger situation. >> i'm criticizing that anderson cooper said i can see why you would never watch cnn just for having a guy on town hall. >> i don't think it's about having somebody on or not having somebody on. the format how you do it. >> there are people who don't want trump on at all. >> i know. people think that -- >> kristen welker did a very good job. >> she did. >> platforming issue. >> can i also say what trump just said what former president trump just said about saying he would say -- >> he wouldn't do it if he were president. but he wouldn't do it when he were president. but when he was president he wouldn't have done that. >> mulvaney last week said he wanted to shut down the government. he's not total whack job. >> kevin mccarthy himself says he doesn't want to shut down the government. if you have issues about trying to fix security at the boarderb

you're not doing it if you're not paying border security guards. same thing, issues about the country, not paying the defense department and their bills. he has big issues about that. people who look at this seriously don't want to shut down the government. you may want to negotiate for a tough deal, but ultimately shutting down the government does not get you to the point you want. >> there are people -- there's a whole contingent that thinks that's an effective way to cut -- >> kevin mccarthy doesn't, though. >> he doesn't? i hope he gets to keep his job. >> i think most rational actors don't want to shut down the government. >> i would say that's probably true. it's not a good idea. most rational actors don't want to get to 180% of debt to gdp by 2030. >> i think you have to weigh how this all works. i'm not saying you want to get there either. trust me. but i the idea that we sort of say shutting down the government is sort of a normal course of action is crazy. >> we shut it down before. doesn't stay shut down for long.

if you extract some spending cuts, not the end of the world. people get paid eventually. >> it's a tactical strategy that has been used. >> i can imagine there are certain issues where the other side would think it's necessary to do that. depends on the issue. we have to go. when we come back, ipo news we'll get you ready for instacart's public debut. next "squawk box" returns after this. ♪ i find that many latinx grow up in america trying to fit in. and fitting in is very different from having a sense of belonging. this country is what it is in big part because of our contributions. so, owning that, being proud of that and then looking up to those who have achieved their dreams. it is bipaa g rt of leveraging

our hispanic heritage. ever since she was a little ki, all maría wanted to do was bak. i'm maría alvarez, owner of maría's cakes. and i'm axel, proud to be her state farm agent.

her baking superpowers have brought sweetness to our community. i make delicious cakes to make special occasions even better. maría doesn't just bake; she also creates opportunities. small businesses like maría's, open doors for communities to thrive. support your community. support small business.

♪ is it possible to fall in love with your home... ...before you even step inside? ♪ discover the magnolia home james hardie collection. available now in siding colors, styles and textures. curated by joanna gaines.

welcome back to "squawk box." instacart planning to go public this week. on friday it raised its ipo price range from 28 to $38 a share. plans to offer 22 million shares could raise up to $660 million. pepsico has agreed to purchase 175 million in a concurrent private placement which provides a bit of a floor on that ipo. of course, that was a company that had a valuation of

something on the order of close to $40 billion at one point. and given the post-pandemic world we're now living in, both in the university of tech and just how people are using these things. but instacart, interesting business because we all think of it as something that's a delivery business. that's really not actually where so much of the income now comes from. >> 30% of the revenue is from advertising. >> advertising business but also an enterprise level business. they have become, if you will, the open table sort of back end enterprise software for supermarkets and other kinds of grocery stores and others around the country. so, it's an interesting business to pursue. we'll talk about this week. >> $39 billion valuation was 2021, right about the time you saw airbnb and doordash going public. obviously fell drastically since that time. you look at the other stocks they have fallen since then, too. but they have slightly inched up the valuation i guess by about 8 or 9% just over the course of the last week or two y in other ipo news, klaviyo is raising its

ipo target. the software maker is now set to price shares somewhere between 7 and $29 a shab up from 25 to $27. that public debut is expected on wednesday. news alert now we're announcing it to you first before we tell you what it was on clorox. cybersecurity attack it suffered last month will have material impact on first quarter financial result. the breach damaged portions of the company's i.t. infrastructure, wide scale disruption of the its operations. it is still valuuating the financial impact. >> when you said breach, all i could think of is you meant bleach. when we come back, it's fed week. we'll get you ready for the central bank's decision. former fed vice chair roger ferguson will join us next.

lar,te we'll be talking to former kansas city fed president esther george. "squawk box" will be right back. [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. there are some things that go better... together. burger and fries... soup and salad. like your workplace benefits and retirement savings. with voya, considering all your financial choices together can help you make smarter decisions. voya. well planned. well invested. well protected.

the not-so-secret to our success? earn and keep trust. build and maintain financial strength and stability. deliver solutions that meet complex needs. do right by customers, clients, and policyholders, always. repeat daily for over one hundred and seventy years. massmutual. partnering with financial professionals, benefits brokers, and institutions. ♪

another one. the fed kicking off another one of its two-day policy meetings tomorrow. widely expected to hold rates at current levels. joining us with more on what to expect, former federal reserve vice chairman and cnbc contributor, roger ferguson. i think we get a lot of news, roger, since last time you were on. i was trying to think of all the things that have happened that could inform your opinion and maybe the fed's opinion. here is a couple of them. $91 oil. i don't know whether that makes the fed more hawkish. it's a global tax which you think would help the fed if it's trying to slow the economy down to some extent. the ecb raise rates but say that's probably it. and you had a couple of inflation numbers that were, i guess, i wouldn't call them

friendly but they weren't just horrific. so that has caused some people, roger, to say, no increase this time and maybe we have seen the last increase. are you there yet? >> i'm not there yet. you're right to say there's been a great deal of data. i think roughly the way you described it is right. one little nuance i would make is the core inflation number ticked up on a month over month basis for the two readings we saw, which i think will raise a few eyebrows. so where i am, i think there's likely to be a pause here, but a clear possibility that the november meeting is, as they say, a live meeting. i don't think they're ready to say we are now done. and partly because some of the factors, as you talk about, such as oil creeping up shows that while there are slowing in general, there still could be some things that drive inflation pressures in the wrong direction. so i think this meeting is a pause, but with the possibility of one more rate hike.

and they'll tell us because they're also going to release their summary of economic projections. we'll see what they're thinking as well. >> has china bottomed, do you think, roger? and again, i'm thinking about oil and how that's going to impact the fed. it definitely does filter through to everything we do you would think. it's inflationary. then again with china weak, maybe bouncing, and oil, you know, they buy in pet row dollars, too, i think. it's expensive there as well. so, those things could be deflationary or inflationary. >> you're right to talk about the double edged sword of things such as china potentially slowing. i emphasize potentially because they are going to be working pretty hard to keep the economy on track. they have fewer tools than we do in the u.s. so i think the reason the fed is being, quote, data dependent and as powell said in his speech at jackson hole, will proceed

cautiously is because the incoming data is not all pointing in one direction. as he said in his speech, there's disinflationary process under way but inflation is still clearly above the 2% target. labor markets which they have been focussed on absolutely softening, but we still see, as you have been reporting, a lot of restedness we call it in the labor market. so i think this is a time for the fed to proceed very cautiously and in no way should they say we are completely done because i don't think they really know that just yet. and i think they want to be flexibility to do one more if need be. >> but roger, just one more? because most of the market commentators we speak with around this say okay, it's basically the same thing. either they're done or another 25 bases points. that's not going to tip the scale too much. >> i think that's part of the story here. but because indeed i've seen a few economists that are even talking about a couple more. i don't think the data -- i think the data are really showing they're getting the

kinds of impact that they want. but yet, as we have seen, there can be some upside surprises. that's why i'm thinking a pause here, open to another 25 bases points and as you point out, becky, the probability of 25 bases points is going to tilt us dramatically one way or the other is not great. but, given the fact they started late, i think they also want to be careful not to stop too early. and so i think that's another thing that's factoring into all of this. >> we have seen some meetings in the past where the fed chair seems to -- not saying he tries to satisfy all people at the same time, but when he doesn't hike, sometimes he's hawk irk. when he does hike, sometimes he seems to be dovish. he kind of tempers things. i saw one headline and one of the financial websites that said, jay powell doesn't have to hike rates this time do derail the stock -- the tech stocks, which means i guess they're expecting him to still be somewhat hawkish.

do you expect that in his commentary? >> actually i do. i think what i expect the pause, as i said, a couple times. i expect him to be clear that we're not -- that they are not done, still data dependent. i think he'll point out places where they want to see more progress and clearly leave open the possibility of one more hike in november. i think it may sound -- >> sorry, roger. i was just saying recession next year, first half of the year, second half, no recession? slow down? labor weakness? does it ever come? >> i think we certainly going to see continuing slowing. and i think whether or not that will be a recession has become more of a close call. those that are expecting a recession are pointing to the fact that consumers are weakening as well. and that we don't know yet the full impact of the dramatic

hiking that's gone this far. so i would say recession still possibly on the table, though the odds have decreased. slower growth certainly on the table. and you know, let's hope, fingers crossed, that in fact, the elusive soft landing does actually occur, but not a done deal yet on any of those points. >> roger ferguson, checking in on monday. good idea. but expect to see you -- what are we doing, about every two weeks? >> i think every monday practically. >> were you on last monday? >> great to see you every monday. helps us launch the week. >> sit really every monday? were you on last monday, roger? >> i don't think so. i think i'll be on the fed meeting this week, though, to try to wrap up analysis exactly what they did. >> okay. we'll see you then. we do have much more on the fed meeting ahead. former kansas city fed president esther george will join us at 8:30 a.m. eastern time today. and reminder, folks, you can

get the stbe of "squawk box" on our daily podcast. follow squawk pod on your favorite podcast app and listen any time. we'll be right back. and relentlessly work with you to make them real. ♪ since my citi custom cash® card automatically adjusts to earn me more cash back in my top eligible category... suddenly life's feeling a little more automatic. like doors opening wherever i go... [sound of airplane overhead] even the ground is moving for me! y'all seeing this? wild! and i don't even have to activate anything. oooooohhh... automatic sashimi! earn cash back that automatically adjusts to how you spend with the citi custom cash® card.

[mind blown explosion noise]

welcome back. u.s. equity futures at this hour, woo-hoo, green across the board now. okay even more green. up a little over a point. not a lot going on. crude prices 91 and change.

bitcoin is up this morning. pretty good move. we don't -- never know when to put that up and when not to. i think it's 27, what is it, 27.120 up about $600. had a good day on thursday or friday. meantime, let's talk about roark capitals $9.6 billion deal to buy subway. it's on regulators radar. the ftc officials taking a closer look at the possible deal and anti-trust implications in particular the way subway defines competitors. now atlanta based roark owns dunkin', jimmy johns and more. adding subway would create a company with more than 40,000 restaurants nationwide. that's three times the size actually of mcdonald's. gives them market power when it comes to employees and other things. typically firms owned by private equity firms have not been subject to historical sort of anti-trust regulation. >> this is a bit of a stretch,

isn't it? >> i don't know. >> look, i know subway has more stores effectively than mcdonald's. that's because a lot is a store within a store or small sort of pop-up places. it's not full on stores when you look at it. my guess is they have said they're not competitors but the ftc said somewhere in their own documents it says, yeah, we compete with a jimmy johns or some of these other companies. >> and the question is, what do they do on labor? what do they do on -- look, in certain markets -- everything is local. in this kind of business, everything is truly local. but if you were in a small town, and the only two restaurant chains were a jimmy johns and a subway, that's actually not great. and it's owned by the same people. >> doesn't it feel like a stretch by the ftc? >> seems like. >> anti-competitive stuff. just more of what they are trying to say. >> seems like it. they do have a huge market. huge market share. that has an impact -- look, in new york city it has no impact. but if you are in a town where every single restaurant chain is

owned by the same company, that's a thing. and you have to think about what that means. >> quarterbacks love subway. patrick mahomes is constantly got a new -- justin herbert. across the board, they have all these guys, man. they go crazy. a lot of quarterbacks apparently really love subway. >> maybe they're getting paid by the endorsement. >> you think? >> that might be. when we come back now -- >> jared is not there. >> we'll take a closer look at -- >> he's not available. >> he's in jail. >> we'll take a closer look at china signs of economic recovery and restricts on mobile devices. reminder, watch or listen to us live any time on the cnbc app. beautiful shot of the capitol there on what is otherwise a gloomy day. but light coming right from the rotunda. ssues? 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. power e*trade's award-winning trading app makes trading easier. with its customizable options chain, easy-to-use tools and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are. e*trade from morgan stanley. power e*trade's easy-to-use tools make complex trading less complicated. custom scans help you find new trading opportunities, while an earnings tool helps you plan your trades and stay on top of the market. e*trade from morgan stanley. (dad) oh yeah! (mom) bringing in a new roommate to save money?the market. is that the plan? (dad) well we gotta find someway to save. so say hi to glenn from work. (glenn) hey! that's my mom. (mom) yeah... i think i have a much better plan. we switch to myplan from verizon for just $25 per line. (daughter) and that price is guaranteed for 3 years. (mom) all on the network we can count on.

(daughter) it's a good plan. (dad) it is a good plan. glenn looks like we're not going to be needing you. so, i'll see you at work? (son) uh later, glenn (vo) save big with myplan. starting at... just $25 when you bring your own phones. guaranteed for 3 years. its your verizon. 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. ♪♪

welcome back to "squawk box." u.s. national security adviser jake sullivan and china's foreign minister met over the weekend to discuss the possibility of a meeting between china's president xi. joining us, peter, founder of zban advisers. i can't figure out where these discussions are supposed to lead at a time when it seems politically at least in this country that there is no political appetite for greater cooperation? >> oh, absolutely, and might i add greetings from shanghai. first of all, discussions are good no matter what level they may be at, especially over the

course of the past year, but i think it's very fair to say that right now the only bipartisan issue that both sides of the aisle are agreeing on is that china right now is to be contained, and the chinese are pretty much well ware of that. as things move forward, it's going to continue to be a contentious issue, especially given that we're heading into a hotly contested shall we say 2024 presidential election. >> but when you think of the current risks out there, is it -- is the risk to american or multinational businesses doing business in china, is the risk the way the chinese government is going to approach this or, frankly, you talk to a lot of american businesses, they worry more about the pressure they're going to be receiving from u.s. lawmakers? >> oh, i think it's clearly coming from the u.s. lawmakers and the likes of mike gallagher, a representative for wisconsin and the select committee, and

you know, there was comments made just last week where, you know, there were organizations that wanted to speak and representative gallagher made it a point to say, oh, they only wanted to speak anonymously, and given the fact of how the select committee has been structured, there's no question why they would want to speak in such a way. but from the risks related to on the ground in china, the advice we've been giving to all our clients is twofold. the risks are not materially different than they've been in the last two or three decades. >> two or three decades. >> two to three decades, yeah, ever since w.t.o., right? >> you think there's no more risk today than there was before. >> i didn't say no more. i just said materially not as much, and that essentially the likes of -- and i've heard you on tv before talking about like w what advice would you giveto

nike and starbucks and the like, just keep doing the business that is the business. that is what got you to where you succeeded in china. i do believe there should be pushback, we're talking about the first and second largest economies in the world that are quite frankly different. there's no nuance. it's just that we're talking very different markets with very different, you know, rules of engagement in terms of the local operating environment. >> i think the bigger question, though, is these multinational businesses are by default trying to diverse fay way from china in relation to supply chains as we know as relates to chips when it comes to tie an. part of that's a national security issue. part of it's a business issue, but the question is the more they do that, how does that change the relationship with china? >> well, again, i mean, it really comes down to exactly what is happening in terms of

the divestment. you know, there's a lot of conversation about moving to india these days. five years ago it was all about moving to vietnam. is that actually taking place or how much of the reshoring back to the united states is underway. you know, we had foxconn in wisconsin. big deal was made of that. it never really came of anything. there are struggles in arizona with tsmc. and i think there's a drastic unfortunate under estimation of just how strong china has built its ability to manufacture within the mainland, and these organizations are just having to figure out how to navigate within what i think is existing currently and to a certain extent on the margins look to elsewhere to where they can, you know, expand or move. >> peter, we got to thank you because we have some breaking news and we're up against a hard break. i want to talk to you again very

soon. peter coming to us from shanghai this morning, thank you. >> all right, thank you. some of that news on tesla, "the wall street journal" is just reporting that saudi arabia is in talks with the ev maker about setting up a manufacturing facility there. the report says that the talks are at a very early stage and could fall apart. saudi's public investment fund is the majority owner of the rival ev maker lucid. we're going to talk a lot more about this. it's not just saudi arabia interested. also erdogan from turkey had ke conversations with elon musk yesterday. we'll tell you more about what they are pushing. "squawk box" will be right back. by automating tasks. when you watsonx your business, you can build digital skills to help human resources spend less time generating offer letters, writing job reqs, and managing schedules... and spend more time on humans. let's create more time for your business

...with watsonx orchestrate. ibm. let's create.

let newage products transform your garage into an area of your home you can be proud of. modular steel cabinets let you pick and choose the storage solutions to keep your garage organized, with overhead racks and shelving, slat wall, workstations and flooring that let you create a showroom garage to call your own. designed for diy installation. all you need is one weekend to take your garage from unusable to unbelievable. visit us at newageproducts.com. gold isn't merely a commodity. it's an investment in people and communities. at osisko, we strive to build modern, safe, and sustainable mines that benefit all. think big. shape tomorrow.

osisko. good morning. the fed's september meeting in focus for investors this week. we'll tell you what to expect on interest rates where you should be putting your money to work right now. the white house dispatching a team to try and help resolve the strike between the big three automakers and the uaw, a live report is just ahead. and house republicans releasing a bill after two factions, the freedom caucus and the main street caucus reached a deal. can a shutdown be averted?

we will hear from two former senators 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 low with becky quick and joe kernen. a gloomy monday morning in new york city. lots of rain as climate week begins, u.n. assembly. dow up about 15 points higher. nasdaq up about 12 points higher and the s&p 500 up about 3 points. let's show you treasuries as well. the ten-year note sitting at 4.35, but you're looking at the two-year over 5 now, 5.060. oil when you think about wti crude you're looking right now at 91.98.

so continues to move higher and then crypto to the extent that that's a barometer of risk on or risk off, you're looking at bitcoin sitting at $27,000. it's actually continuing to make a move higher quite recently eth up as well. a couple of quick headlines, instacart plans to go public this week. on friday it raised its ipo price range to 28 to $30 a share aiming for a valuation of up to $10 billion. it plans to offer 22 million total shares and it could raise up to $660 million in that ipo. soft bank is reportedly looking to invest billions of dollars in artificial intelligence following a windfall from the blockbuster ipo of its chip business arm holdings. reports say soft bank may strike a broad partnership. and clorox said a cyber attack it suffered last month will have a material impact on its first

quarter relesults. it caused wide can scale disruptions of its operations. clorox says it is still evaluating the extent of the financial and business impact from that attack. the stock off by about 2.2%. >> the bleach breach. united autoworkers president shawn fain rejecting a 21% pay boost offer from stellantis calling it and other offers from ford and gm a no go. phil lebeau joins us now with the latest in the middle of a bunch of beeping horns. hey, phil. >> reporter: hey, joe, we're outside of the jeep plant here in toledo, ohio. we've got about a dozen uaw members who are picketing at this gate. there are several gates here. these are not the only people picketing here at this plant. this gives you a sense of what we've seen every time we go to one of these plants. here's an update in terms of where things stand. stellantis did raise its offer and didn't get much of a

reaction from the uaw. the president said on the morning news shows, the uaw president said we're ready to amp this up if there's not much progress. meanwhile, the white house is sending a team to detroit not to mediate talks but to keep the conversation going and perhaps generate more conversation and move towards a resolution. the big gap in pay offers is what's getting the most attention. we've talked about the uaw at 40% over four and a half years. stellantis's most recent offer 21%, same with ford at 21%, and then you've got a gm at 20%. you mentioned that the 21% raise offer over 4.5 years by stellantis getting no reaction from the uaw. president shawn fain said it's definitely a no-go, and then he also said yesterday the membership is fed up as you take a look at shares of ford and stellantis. they will be back at the bargaining table today. those talks will continue. as for general motors, the uaw met with them yesterday issuing

a very simple statement, we met with general motors. hard to say there's much progress when that's the statement you get from the uaw. guys, we're going to be monitoring it all day long. i think we'll hear more from shawn fain. i know we'll hear more from shawn fain over the next couple of hours doing some of the morning news shows. we'll see what he has to say about the state of negotiations. >> so a lot's been written about the differences between this strike and previous ones, and the element of surprise and striking all three at once, but able to open up new i guess avenues, strike other places. when is the next -- do you expect something like that to happen to keep the big three sort of on their toes later this week? >> reporter: well, who knows when it's going to happen, joe. they haven't said we will make an official announcement at this time and this date. they have said that they will do it the same way they did it last week, which would be a facebook presentation, a facebook live

presentation at 10:00 eastern time. so if we get a press release sometime during the day saying shawn fain has something to say at 10:00 tonight: it's a pretty good bet you're going to hear him announce further locations, whether he does all three, maybe one, maybe two, that remains to be seen. again, there's no time frame for when we may hear about more strikes. >> could the automakers afford 30%, phil? >> reporter: could they afford 30%? that's a relative question, joe. are they going to go bankrupt at 30%? no. but if you say give us 30%, also a 32-hour workweek which is essentially another 20% raise on top of that in addition to cost of living adjustments that would take where they are right now, 62 to $65 an hour all in for a line worker, that would move it way up. you have to think about from gm

and ford and stellantis's perspective, they have to look at how do they measure up against their competitors this north america. foreign automakers are at $55 an hour, tesla is estimated to be at $45 an hour. that gap gets to be substantial if you go up to 30% and you give some of the other things that the uaw is looking for. >> both sides need to take -- wherever they are with a grain of salt as to where we finally end up. i guess that's the way it works. but i don't know. shawn fain certainly is definitive. i wonder. i woender how it finally resolvs itself, phil, you'll let us now. thank you. >> reporter: we will. >> that's when you heard from harry wilson last week. harry wilson, one of the negotiate tors back in 2007 to try and figure out how to get the two sides together and get some concessions from uaw. he says shawn fain has been masterful how he pulled this

off, but now the talk that he is using doesn't necessarily leave an off ramp for finding a deal because he is digging in in such a deep way. so we'll see. in the meantime, the fed's going to be beginning its two-day policy meeting tomorrow. the markets are widely expecting the are central bank to keep keep rates unchanged. we want to bring in the president of sri kamar global strategies. you've got a pretty stark concern about what's happening with the economy right now. you think we could be in full-fledged recession by the end of this year. >> that is what i expect: i think you have a recession that's been delayed by an enormous amount of stimulus coming from the fiscal side and monetary side. that can delay a recession, but u cannot denial it. the signal is coming very clearly from the bond market, especially the treasuries yield, the two to ten-year yield curve

being inverted starting july of last year, so we have been inverted for quite a while. i face the question from clients from time to time, if that has happened and it is 14, 15 months ago, why haven't we seen a recession yet. >> right. >> the change that we have this time is we have not had enormous amount of stimulus at the same time as in the past cases. so that's why i think it is getting delayed, but clearly the signs are that there is an exhaustion in terms of the economy, and that is going to show itself in terms of a recession. >> what signs are you pointing to? because a lot of economic indicators right now are pretty strong, if you look at the jobs market, if you look at across the board places, it looks like we have seen inflation maybe come under quite a bit more control. that's why we think the fed may be almost done if not completely done at this point. what do you see besides the two-year, ten-year, and the bond market. >> let's look at other things. the manufacturing growth has

been down: it's been negative for about fiver or six months i a row. the s&p global expectation of the economy has also been down. the consumer sentiment coming from the university of michigan, latest number was down, which is also not expected. and so what it suggests to you, is that the consumer on which we depend for 70 % of gdp is finaly going to find the end of the rope in terms of spending, and that has taken a while in time. it's been so much in terms of the government money in the consumer hands and that's going to change. those are three different farce. then you talked about inflation. yes, inflation is down, but the core inflation may be down, but the headline inflation is headed up. that's my key thesis. the central bank focuses on the core inflation rate which excludes fuel, excludes energy and food, but then in this case

we have domestic price of gasoline starting to rise with the brent and the wti crude that andrew spoke about a few minutes ago skprgs thand they're going continue to go up, and that will be reflected in the price of gasoline and the headline right. >> what's the fed going to do? if they're facing a downturn in the economy but also facing inflation that's coming back on a headline level at least? will they stand pat? will they raise rates? will they have to cut rates as they're looking at a declining economy? >> that's a great question. the european central bank has one mandated inflation. the fed has two mandates and it's illogical. you can't deal with both at the same time. you have to giver up on one of your targets. because of the fact you may have a recession plus inflation staying high, the fed has to decide what to give up. and in my latest writing i've been saying with elections being just over a year away, the fed

simply gives up on inflation. how do you give up? you can't say a 3.5% inflation rate is okay for me and we have succeeded. it affects credibility. so instead of pausing just in the month of september, you increase in november let's say and then december through the first few months of 2024, there's an extended passm. you never raise rates again. my expectation is it's a pause and after which the rate wills come down. it also depends on when the credit even happens, if something breaks in the system, then you're going to see a rapid reversal, and we saw that in march with the banking crisis, the quantitative tightening came to an abrupt halt, and in 15 days, the fed's assets went up to the level of last november. >> so your message is listen to the bond market, not what fed officials are saying at this point. >> exactly. listen to the bond market, and also one more, don't lizsten to

the equity marketment look at october of 2007. the s&p market hit a peak record level, but the bond market was suggesting a recession, and in the case of the economy, the bond market is a better predict than the equity market has been. >> that gives us a lot to think about. >> thank you very much for having me. later we will be talking to former kansas city fed president esther george. >> when we come back, legendary golfer, 24 time pga champion and philanthropist gary player joins us after the break. "squawk box" continues after this. [due at target in 5!] copy that. make a hard left down the alley. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. , bac. 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. the first time you made a sale online with godaddy was also the first time you heard of a town named dinosaur, colorado. we just got an order from dinosaur, colorado. start an easy to build, powerful website for free with a partner that always puts you first. start for free at godaddy.com

the gary player invitational on one of the world's leading charity golf series begins today in glen arbor club in bedford hills, new york, benefitting pancreatic cancer research. dom chu is there and has a very special guest. how are you doing, dom? >> joe, i couldn't be better. the weather is starting to break a little bit right now. here at glen arbor, the gary player invitational is getting ready to kick off. i am joined here by gary. thank you very much for being with us on cnbc.

>> dom, it's an absolute pleasure, and you know, it's raining, but the day is what you make it, so we're going to get out there and have fun, and when you think of who benefits from this day, we got a great sponsor in baronburg, they put up a lot of money, bringing pros, ladies and men and businessmen who come here and contribute at the auction. in the last few years, we've raised 700,000 for pancreatic cancer, and you have all the scientists and people from nebraska, the university of the medical center of nebraska here. i've been down there. they're so sophisticated and do a great job at trying to cure cancer. so also if you look at this golf course, dpglen arbor, what theye doing for the young people at this club, not enough golf courses encourage young people and give them permission to play. these young boys are coming here from college getting scholarships, improving their education. we've always said if somebody out educates you, they're going

to outdo you. and so it's very important, i'm such a believer in good education, good manners, and bringing the children up correctly. after all, you live in the greatest country that has ever existed, the united states of america. teach them to honor the flag and to honor this great country. so coming here is a pleasure, glen arbor, of course i designed one of the 140, and really i'll tell you they've just been given the award of the metropolitan golf riders association, and this club richly deserved because they have a sanctuary here, not cutting down trees. dom, it's becoming a disease in america. these golf courses are cutting down trees. they should stop them. in india if you cut down a tree you should go to jail. every golf course is right on a highway, all the pollution is coming across. you can't cut trees. you plant more. i plant tree. i will never see the shade, i

will never be able to use the timber in building, he said but i'm leaving something behind: that's what we've got to do. these courses, as soon as they have a tree, down it goes. a tree that's been there for 50 or 100 years. they've got the best greens ke keeper in the world at dallas, texa texas, prunes it out, gets the light in, the oxygen. we've bot to stop this. >> can you take us through why pancreatic research, why the university of nebraska medical center? what was the impetus, and what was the driving force behind why that was the charity you decided to choose to be the beneficiary of the funds you raise here? >> that's a wonderful question because if you take today in the united states, one out of two and a half people will get cancer or heart attacks or diabetes. so america's a very unhealthy

nation. they're the most obese nation in the world, 80% of the nation is obese. so this is something we've got to fight, but my wife, the main reason, my mother died of cancer, my sister died of can cancer. i said my wife. my nieces had cancer. my daughter's had cancer. every you meet has had cancer, so with my wife dying of pancreatic cancer and i was with my wife for 72 years, an incredible woman. she helped me become a world champion, and so i thought that was most appropriate with a family that's had a lot of cancer, and with so many -- everybody you meet, they've got a brother, a sister that has died of cancer. you've got to make sure we do other things and rely on technique. we've got to exercise, make sure we don't eat too much. we've got to make sure we sleep. make sure we laugh. there are lots of things that combat cancer and this has got to be taught at schools, but

it's not. the school system in america is not to be admired. they're not in the top 20 of the world. in south africa our kids speak fiver languages, dress well, honor the flag. it's very important to educate people whatever the subject may be. >> i think joe has a question for you as well now, gary. >> just talking about fitness, you're amazing, mr. player. a thousand push-ups asknd situp still every morning. is it really a thousand? do you have someone counting for you? how do you do sthat? and even in south africa, you put your steps in your backyard. you've got 200 steps to run up and down in the morning in south africa. obviously exercise is a huge part of why at 87 you shoot your -- when's the last time you didn't shoot your age, gary? must have been because you first shot it in the year 2000, i

think, you were 64. you shot your age 23 years ago: >> well, i've beaten my age 3,081 times in a row. and trevino said what's so good about that, i'm almost 88, i've got one month to go to 88. he said you've got to shoot 16 over par to break your age, that's not very good, and he's right. but exercise, now i can't do a thousand situps anymore: i probably do an average of 150 to 200. i've still got this like a plank, and i'm in very good shape. i always walk upstairs in airport as and i live in airpor. i keep exercising. it's imperative. and i sleep well. i laugh a lot. laughter is a great medicine. so all these things. i read, i keep my mind sharp. i've traveled more miles than any human being ever. i'm traveling around the world to a great extent representing

companies, and i'm meeting 30 people a day on different subjects, different topics, so it keeps my mind sharp, and i think you can avoid alzheimer's to a degree as long as you exercise this as well as your body. >> all right, dpagary, before w let you go, there's one thing i'm curious about, the longevity aspect of your life. it's obviously diet and exercise, there's a lot of technology that can go into extending people's lives as well. do you think that artificial intelligence is going to be something that improves humanity in the coming decades? >> well, like everything there's good and bad, and i think ai is a tremendous invention, but as long as we don't take it too far. and with the human being, will we? you know, here everybody's inventing atomic bomb, you know, i mean, are we going to stop with ai? that concerns me to a great deal. longevity is something that the schools are not teaching

children without being repetitive, under eat, exercise, laugh a lot. read. how many kids read and write anymore. that's the thing. so there are secrets, they always use the word luck in everything. luck is the residue of design: look at a man like djokovic, he's my sports hero. he was the most unfair treated. he was barred from playing in three tournaments. i was barred being a south african for years. had i lived in america and not been barred, i would have won a lot more majors. >> gary player, thank you so much for joining us here on cnbc, and becky, i just want to let you know that i walked through the breakfast line and gary has always waved me away from the eggs and bacon and told me to go right to the juices on the other end of the table. >> he eats like it's last supper. i'm going to say one thing quickly if i may, one thing quickly. arnold palmer and jack nicklaus and i traveled the world for

years promoting the game of golf, so whatever the new system is that they're coming up with, it's going to benefit world golf, which is important. >> all right. becky, gary player, probably one of the most storied players in golf history through hundreds of years, a real pleasure. we'll send things back over to you. >> what was it nine majors, nine majors and had he mentioned had he been here born in america. >> when he tees off at augusta, he hits it past everybody else, jack and watson, he still pipes it every time he does it he swings so hard. does he hit it past jack? >> his grip. he's got a strong grip. he's got a really strong grip. >> and gary, you end up in your divot, which you don't see that very often. he ends up standing in his divot he swings so hard. right? it's true. >> they said that to sam snead, they said, you know, ben hogan ends up in the divot from yesterday's play. he says if he's that damn good,

why doesn't he hit it to the left or the right of it? >> you end up in the divot from today's play, that's the thing because you're moving -- i remember you told me that. anyway, that's great. >> well done. and thank you, dom. avoid the bacon, especially. >> got 150 situps to go, i think if he does 150. >> me too. when we come back, is the diesel market flashing warning signs for consumers? we have that story next. and later, key factions of the house republican conference reaching a tentative agreement to keep the government funded m temporarily and avert a shutdown scheduled for the end of this month. we'll hear from former senators evan buy and judd greg about the looming shutdown. "squawk box" will be right back. (daughter) it's a good plan (dad) that is a good plan. glen looks like we're not going to be needing you. so i'll see you at work. (son) later glen. (vo) this week. new and current customers... get a free samsung galaxy s23. plus galaxy watch and tab.

all three. all on us. that's a savings of over $1800 offer ends soon. it's your verizon. (vo) while you may not be a pediatric surgeon volunteering your topiary talents at a children's hospital — your life is just as unique. your raymond james financial advisor gets to know you, your passions, and the way you give back. so you can live your life. that's life well planned. how's the chicken? the prawns are delicious. oh, i have a shellfish allergy. one prawn. very good. did i say chicken wrong? tired of people not listening to what you want? it's truffle season! ah that's okay... never enough truffles. how much are they? it's a lot. oh okay - i'm good, that - it's like a priceless piece of art. enjoy. or when they sell you what they want? yeah. the more we understand you, the better we can help you. that's what u.s. bank is for.

huge relief. yeah... ♪

diesel prices rising steadily this year, and consumers are starting to feel the pinch in what could be considered a hidden tax. c cnbc's pippa stevens joins us now. >> diesel prices are surging and that is bad news for consumers since tankers, trains and trucks all run on diesel. so when the fuel price rises it's often passed along to the consumers and it is almost like a hidden tax on the delivery of all goods.

oil hovers around a ten-month high following production cuts from opec and its allies. the loss of saudi and russian crude is hitting the diesel market especially hard since their medium and heavy grade oil is more distillate rich. you can see this reflected in prices. heating oil futures are up 30% in the last two months. and at the pump, while regular gasoline has held steady over the last month, diesel prices are up $0.23, and there's no sign of any easing on the horizon. in the u.s., inventory levels are 11% below the five-year high and with refinery maintenance season coming up, it's unlikely we'll see any type of meaningful restocking of supplies. and we've already heard companies start to warn, most notably the airlines about what the impact of those higher fuel prices mean s. >> so what do you think that hidden tax e qualls? >> that is a question for someone who has economic background. diesel transports every single good we buy at the grocery store, all of our flights

everything runs on diesel. it is the work force for the economy. it filters through to every aspect of our goods. >> pippa, thank you. appreciate it. still to come this morning, a government shutdown lookming over washington. 's> talks between the writer guild and hollywood studios set to resume for the first time in a month. we'll get the latest on where things stand. you're watching "squawk box," and this is cnbc.

right now let's get an update on the looming government shutdown that could happen at the end of this month. house republicans release add bill after two faction, the freedom caucus and the main street caucus reached a deal. emily wilkins joins us with more on that front. emily, good morning. >> good morning, becky, there has been an agreement, but some republicans are still opposed to it, meaning a shutdown is still on the table for the end of this month. that agreement would fund the government until october 31st, giving lawmakers more time to work out the details in a longer term spending bill: the temporary solution would also cut most domestic programs by 8%. that's with exceptions for military and veterans' programs, and the short-term agreement also includes the gop-backed

immigration measures like resuming construction of the wall at the southern border and redist restricting the right to seek asylum in the u.s. not included in the package, a provision requiring employers verify their employees are eligible to work in the u.s. while the agreement is a major step for house speaker kevin mccarthy, lawmakers aren't out of the woods yet. that handful of republicans have said they oppose the stopgap measure and plan to vote against it. congressman matt rosendale said the package would be, quote, a continuation of nancy pelosi's budget and joe biden's policies. he also called the temporary measure a gimmick and called on congress to move all 12 individual spending bims. the house plans to vote on the stopgap legislation on thursday, even if it does pass it is likely dead on arrival in the democratically controlled

senate. it's not clear both chambers can reach an agreement before september 30th. >> we're going to discuss this further, emily, thank you. joining with us more on the headlines out of washington, former senator and new hampshire governor judd gregg and former indiana governor evan bayh. we've had people on saying a shutdown can be an effective way to get a point across in terms of spending. would you under any circumstances ever say it's justified, judd? >> no. if you look at history of shutdowns, i went through threw they accomplished virtually nothing and significantly impacted the house membership by having people in swing districts lose their elections. for republicans, shutdowns are essentially playing russian roulette with all the chambers full. we always lose on this exercise. and it isn't necessary. that's the point. you can do so much to get this

government spending under control and the deficits under control just through reaching agreements on key elements of what's causing that spending, and that would be a comprehensive agreement on social security, for example, kp comprehensive agreement on medicare. if you put every van and i in a, we could make a dramatic. evan's too conservative for his party, and i'm too rational for my party. you've got this movement that basically doesn't want compromise and doesn't want to govern. >> evan, when the contingent in the house, whether it's the freedom caucus or the most -- i don't know what you'd call it. i don't want to say they're extreme far right because do you ever hear extreme far left when they talk about bernie or aoc. >> yes. >> or elizabeth warren, i don't hear it. not from most people, not from most reporters.

but those guys and gals, they think it's almost like a fool me once, fool me twice. they see 33 trillion. they see what's happening, okay, go back eight years if you want, but they see what we've done and where we are and say we're left with no other recourse other than something like this to get people's attention. >> well, it's an emotional reaction to a difficult situation, and first, i'd like to say i think judd was spot on in his analysis, and one of the difficulties you're having this morning, joe, is you've got two hopefully rational former senators and governors trying to explain the internal politics of the house of representatives. you m they're trying to make a point. you have problem solvers, people like judd, myself, and there are others there who are elected to try and reach principled compromises to solve the great issues that face our country.

and this massive budget deaf skpit deficit and growing debt is a big problem for ourselves, our children, and our grandchildren. you can get people in a room, which used to happen, and solve the problem or at least make progress. the problem is the american people have elected a divided government, and the house in particular is very narrowly divided. so a few radicals on either side -- and there are some on other side whatever you want to call them, joe -- can bring the process to a halt. and these people don't think they were sent there to solve problems. they're there to make outrageous statements to get on cable television and that raises the money frlt there's a small sliver of the american people who will send donations to these people who say i'm here to fight and i'm going to bring the whole house down. for the vast majority of americans they look at this and they say we elected these people to solve our problems and they're actually creating another problem, and that leads to more disillusionment with government, which then leads to

frustration to vote for autocrat a s and demagogues and brings our political process into great ert disrepute. if this does pass am i the only one that finds that ironic that the problem would be pushed to halloween? >> yeah, october s31st, that's pretty spooky. it can be a great day, my wife's birthday, and judd, i thought it was interesting, the three shutdowns you went through were all republicans. did you say that? >> they were all -- by the house of representatives. >> but you didn't like it because it hurt -- not because they did it, but you said they ended up losing seats because of it. this wasn't your only point. >> and spending was not reduced. >> and spending was not reduced. >> to address the underlying structural problems which are creating this deficit, and it hasn't happened to be 15% of the budget, which is discretionary defense spending. that's like arguing over angels dancing on the head of a pin.

what's driving the fiscal problems of our nation are entitlements, and pretty soon interest on the debt, but the thing that we can actually address, which would change that, is the entitlement accounts. interestingly in the house they have that problem solving caucus, which is bipartisan. they came up with a comprehensive and thoughtful approach to how to get the full deficit issue before the congress and actually address it, but it's been ignored, and instead you have people who shout from the corner asks really don't want to get in the middle and mix up and get something done, which is not the way you govern in our system. our system requires that you get in the middle and mix it up and reach an agreement and then you move forward. that's not going to happen with this house bill. i give the house credit, if they actually pass this bill and send it to the senate, the hot potato's in the senate's hands. i don't think it will be something that mccarthy can ha handle because he'll lose his speakership or be challenged if he tries to put on the floor

whatever the senate sends back. >> evan, if you were speaker mccarthy, how would you -- i m mean, we know about wrangling cats and all that stuff, but how would you approach this if you were him? >> it's a true dilemma, joe. in the short run he's got to placate that small sliver on his far right, other side he can't get anything passed, and they might bring down his speakership here in the next few weeks: in the long run as judd pointed out, we've seen this before and the party that causes a shutdown tends to not fare very well in the next election, ask that could defeat the number of moderate republicans in swing districts, which would bring down his speakership. my guess is that you try ask live to fight another day so you do everything you could to try and kick it over to the senate and maybe rational heads will prevail. two things, we need to get through the next election. we don't need this on october 31st. we don't need the middle of the

election cycle and then have a national conversation about what we're going to do about this problem. hopefully the candidates of both major parties would address it. at least we could try and get a national consensus on the difficult decisions, and they are difficult, that have to be done for the best interests of the country. the temptation is to play politics in the short run. there's always an election coming up. long answer to your question, do everything you can to pass it through the house. kick it over to the senate, and hopefully the senate will come back with something that can be a template for actually getting the thing done and would convince the 6 to 10 to 12 radicals in the house caucus that that's the best they're going to do and they should take it. >> judd, is there any doubt in your mind that we have the best system in the world of governing, this is what we have, right? >> well, we do, but the system is under great stress right now skps and it's under stress because of this massive populist movie of both parties, which i don't think madison ever

anticipated would be so dominant. basically these movements do not tolerate compromise, and madison structured a government of compromise. that's why we have three branches of government, and that's why they're different in which party controls them. it's really not functioning in the context of the way it was supposed to function today, but it will in the end. we always solve our problems. we always address them. we get laeeaders who are willin to make the tough decisions of stepping on the toes of their own people in order to get things done. i'm fundamentally optimistic about the future of this country, and i'm not going to worry too much about the fact that they want to cut 8% out of a discretionary account, which is really marginal evgt on any effect on anything. i'm more worried about the fact that nobody seems to be stepping up to the table on the issue. >> judd gregg, thanks, evera bayh. >> thank you, joe.

>> and thanks to my hoosier come pate yacht becky. dwe're going to get the latest on the writer's strike and the impact being felt by studios. take a look at futures as we head to that break. hings about to turn negative, dow now off about 47 points, nasdaq down about 54 points. the s&p 500 off now close to 10 points. we'll talk about it, "squawk box" returns after this.

you know when you have those moments? that time to reflect. to be like wow... what did i do to get here? (city ambient noise) right. work. you worked hard and it's time for a bank that'll work hard for you. everbank brings security and a guarantee. that you'll earn a yield in the top 5% of competitive accounts. going, got you where you want to be. we're the partners for your next move. everbank. advantage, you

the citi custom cash® card automatically adjusts to earn you more cash back in your top eligible spend category. hi. you don't have to keep tabs on rotating categories... this is the only rotating i care about. ...or activate anything to earn. your cash back automatically adjusts for you. can i get a cucumber water? earn 5% cash back that automatically adjusts to your top eligible spend category, up to $500 spent each billing cycle with the citi custom cash® card. i love it.

some tesla news for you this morning, "the wall street journal" reporting that saudi arabia is in talks with the ev maker about setting up a manufacturing facility there. the report says that the talks are at a very early stage and could fall apart. saudi's public investment fund is majority owner of rival ev maker lucid. reports say musk has spoken with india's government, ask yesterday he met with turkish president erdogan in new york and was invited to build his next factory in turkey. erdogan offered collaboration opportunities between spacex and

tu turkey's space program and invited musk to techno fest, that's turkey's aerospace and technol technology. contract talks between studios and writers expected to resume this week, but can a deal be reached? we're going to talk about that after the breakm. we don't know but we'll talk about it. later we're going to talk to former kansas city fed president esther george. "squawk box" will be right back. with the l'or barista system. a masterpiece in taste.

welcome to ameriprise. i'm sam morrison. my brother max recommended you. so my best friend sophie says you've been a huge help. at ameriprise financial, more than 9 out of 10 of our clients are likely to recommend us. our neighbors, the garcias, love working with you. because the advice we give is personalized, hey, john reese, jr. how's your father doing? to help reach your goals with confidence. my sister has told me so much about you. that's why it's more than advice worth listening to. it's advice worth talking about. ameriprise financial.

welcome back to "squawk box." in a change of plans, the "drew barrymore show" has decided to reverse their decision to have shows during the strike. matt, let's talk about that and let's talk about what you have in the newsletter this week which is this idea that drew barrymore but the power of social media has helped the writers and the writers union. >> absolutely. that's been a big differentiator in this strike, versus what happened 15 years ago pre-social media. the writers have galvanized each other and the public on their

side. it was a big factor in the drew barrymore decision. she got absolutely destroyed online when she announced she was going back, even though there's no agreement. >> how do you think about the drew barrymore piece of it -- we were talking about bill maher a little bit earlier and his decision to come back? >> bill maher sort of hovers above all of this. his brand is anti-establishment and i think he likes that everyone in hollywood is angry with him and there may be picketers outside his show. but that's not drew barrymore's brand at all. she's the nice friend next door. that's how she gets guests on the show and why people like her show and she's become a villain of the strike. she does have wga writers on her show. it wasn't enough in this

climate. when the social media mob comes officer like that, it's really hard to put up a fight. >> so there will be a meeting scheduled this week at some point. do you look at this as a thaw in the dialogue? >> i do. i think the fact that the writes are initiated, this they went to the studio and said let have a meeting on this. i think it does mean they're willing to at least engage in some of the issues that they have put forth in their proposal. it doesn't mean we have a deal or that there's any actual momentum here. it just means they are willing to talk but in this strike, that is actually a big deal. >> how do you think though, matt, there's also been talk that there's been some kind of back channel negotiations around the actors' side of this? is there any benefit to the studios to try to get to the

actors first if that's even possible. >> i don't know that that's possible. i think the actors are sitting back and saying the writers are being pretty aggressive here. we're going to let them go first. we don't strike first and whatever the writers achieve, the actors will try to improve on that. >> i don't think it's the pay increase that's going to be the problem, the difference between the 4 and 8%. it's the bigger issues, what you do about a.i., what you do about keeping writers employed. which side has to give more? >> it's the transparency issue. they're very adamant that they provide more data about who is watching what shows. and they want a metric for success. you get paid more in success. the studios have been reluctant

to agree to that, but i think that's where they're going to give and where the writers and actors are going to get big gains is on this transparency issue. the writers room thing where they want more writers in the room, we'll see if they get that. and the a.i. thing, i think the studios are pretty much aligned with the writers at least on that one. they have a few things to hammer out. the actors have separate issues on a.i., their performances, they want to protect that, but i think the transparency issue is where the studios have to give and i think ultimately they will. >> timing-wise -- we got to go but what's the earliest you could see the writers' piece get solved in. >> the earliest would be this week but early to mid october is still the goal. that's where you could salvage some production by the end of the year. after that i think we're looking at early 2024. >> okay, matt.

thank you. i'm sure we'll talk to you more about it all. thanks. >> when we come back, we're going to talk to former kansas city fed psintrede ester george. and the latest on the auto makers' strike including the hit it could have on the economy. "squawk box" will be right back.

every day, businesses everywhere are asking: 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.

esther george. good morning. ready to amp things up. it's currently day four of the strike. >> and it's fed week. investors standing by for the latest interest rate decision. we'll talk about the key factors central bankers are weighing. and we'll speak with esther george. the final hour of "squawk box" begins right now. good morning and welcome to "squawk box" here on cnbc, live from the nasdaq market site in

times square. eye joe kernen, along with becky quick and andrew ross sorkin. the market since the beginning of the show we were green across the board, just fractionally in the dow and now the dow is down about 50, nasdaq is down about 57 points. it was a rough session on friday, which followed a really good session after the cpi and ppi were both in. >> plus it's raining today in new york. >> and it's monday and it's september. you know, it's coming up, i think fall is coming like any day, isn't it, three days, something like that? it felt like fall over the weekend a little bit. there's the 10-year. we'll talk about that and the 2-year is above 5 now. oil continues to be on people's radar screens, about 91.

that's the question, is it the high end of a range of 70 to 90 or is it on the way to 100? i wouldn't be surprised if either at this point. >> ford and jeep maker will be back. stellantis raised its offer. uaw workers want 40% raises over that time span. he says his members are ready to amp things up. the white house is sending a team to detroit to help keep conversations going. >> i don't know how that's going to improve the state of affairs. >> a group of conservatives and more moderate leaders in the

house announce a bill that would avoid a shut down at the end of the month but it includes 8% budget cuts for most agencies. lawmakers may very well have to go back to the drawing board to avoid a shutdown. meantime, saudi arabia is speaking with tesla and elon musk about setting up manufacturing companies in those countries. they say they have been floating the rights to buy minerals and paper. turkey's president asked elon musk to build a factory in his country. also telling musk his country was open to communication between a.i. and satellite services. >> let's bring in mike santoli. what are you watching this monday morning?

>> you mentioned it was a tough friday for stocks. that was a big quarterly options expiration date. a lot of times volatility can expand after that and we're in a tough seasonal period. mostly what i see in the s&p is an indecisive take. we've actually hugged the 50-day average within 1 or 2% of it for one of the longer stretches in recent years. you mentioned oil prices, maybe bond yield. on the other hand earning estimates moving higher. it's really now qualifying its decent, prolonged consolidation after that very strong move into the end of july for the s&p. but it also has not been the the

most broader, inclues itch rally. look at the russell 1,000, equally weighted. on a one-rear basis we still kind of have an up trend in place but it's in the middle of the 2023 highs and lows, not really decisive. yields matter more on the small cap side of things. and xle, with oil prices going to above 90 and the castros looking pretty good for a while, this is a three-year stock. looks like either top of the range or potential breakout. seems like people are pretty bullish about energy and feeds into that late-cycle psychology. you think it going to be how much more is left in this expansion, joe. >> we're going to continue and

whether we really are moderating at this point, some think so in terms of economic activity. joining us is president of yardeni research. ed, welcome. you think we go from a 4% gdp growth and that gets cut in half. we're headed for 2% for a variety of reasons. >> that does mack sense to me. it looks as though we had sm, particularly the strength of the consumer was -- very popular movies. but we are seeing some slowdown in consumer confidence. this increase in gasoline is unnerving to consumers. it's a price that everybody can see as they drive down the road and seeing it going up again i think could weigh on consumer

spending. >> you got uaw strike, you got -- >> yeah, i i think we got to throw that in. >> possible shut do you, europe in recession. it's just a lot of things. so you think the fed's done. there will be a pause and then there won't be any hype next time either. >> i think federal government officials that the federal funds rate is restrictive enough, it will slow the economy down and bringin plaugs so i think when we see the dot plot, the summary on went from the fomc, i think they are going to show they aren't going to raise your federal fund-raiser during the last meeting. i think an increase in november is still possible but you you

this big change will be an increase in the fed fund's an implied decline but much less than maybe they were forecasting last time. last time they forecast a 100-basis points. i think now they might go for more of a 50 decline next year. >> you still have 4600 by the end of the year on the s&p and then you think better next year. you think there can be new highs, i guess, 5,400 by the end of 2024. >> i know that generally speaking fed watchers like to criticize the fed and suggest that they're always wrong about their forecasts and what they are doing, but i think they're actually getting it right this time and we may very well have immaculate disinflation where inflation comes do you without an economy-wide reing and, if

so, i think earnings will continue to improve next year. i think this year i was expecting 4600 by year end. we got there by july and i looked away at all those issues you. and these yields that we're going to be left with are basically where we were prior to the financial crisis. you see this as almost a normalization. and life goes on. >> shut absolutely to the great financial crisis is behind us and i think we are normalizing again. before the crisis, the inflation premi

premium was around 2 1/2%. >> energy love. still overweight energy, i.t., even financials and then materials. >> yeah. yeah. again, i'm not looking at this as sort of a trader. i'm looking at it as where you want to overweight over the next 12 to 18 months. and i think as some of these short-term problems get resolved, the economic performance would be pretty good. i'm actually looking for productivity-like growth over the decade. i'm fundamentally bullish for the outcome of the economy and the stock market. zp >> you mentioned it and did that really happen? financial crisis and the great pandemic and then a horrible war. russia invades a neighbor. i mean, the only thing that's left is like the zombie apocalypse. >> would you bite your tongue

and then all better off if there's a zombie. you don't want to hold any assets in that environment. >> what's left is a risk, i could be wrong. inflation could make a comeback here, sort of a twin peak situation. the bond market would go to 5, 5 1/2%. >> be glad that are not,ing. >> thank you. good day to have you on this morning. >> always a pleasure. >> and on that cheery note, when we come back, we are going to talk more about fed week, investors gearing up for the u.s. bank as latest with former kansas city fed president eis it. prepare for take-off.

that company is working on lek truck air telecommunicationies. don't go anywhere. we'll be right back. old school meets bold new thinking. ♪♪ at 87 years old, we still see the world with the wonder of new eyes, helping you discover untapped possibilities and relentlessly working with you to make them real. old school grit. new world ideas. morgan stanley. i'm so glad we did this. i'm so glad we did this. i'm so glad we did this. i'm so glad we did this. i'm so... ...glad we did this. [kid plays drums] life is for living.

let's partner for all of it. i'm so glad we did this. edward jones nice footwork. i'mman, you're lucky,is. watching live sports never used to be this easy.

now you can stream all your games like it's nothing. yes! [ cheers ] yeah! woho! running up and down that field looks tough. it's a pitch. get way more into what you're into when you stream on the xfinity 10g network. nice footwork. man, you're lucky, watching live sports never used to be this easy. now you can stream all your games like it's nothing. yes! [ cheers ] yeah! woho! running up and down that field looks tough. it's a pitch. get way more into what you're into when you stream on the xfinity 10g network.

. welcome back to "squawk box," everybody. we've been watching the futures this morning. we started out in the green. we ended up in the red, at least at 8:14 in the morning. still a little while to go before the opening bell, another hour, 15 minutes. nasdaq indicated down, s&p futures off by close to 10. we're paying attention to the small cap russell 2000 index. it lost 1% on friday and is down six out of the last seven weeks. you can see this morning here's where things stand. 1847. >> and meantime, electric air company announcing plans for its first electric --

>> the commonwpany announced it going to be building a manufacturing facility. thanks for joining us this morning. i'm curious, why dayton and why this location? >> good morning, phil. it's incredible to be with you. i'm here in the wright brother's home. the wright brothers made the impossible possible and brought aviation to us all. it's incredible to be here in dayton to be selecting ohio for our first scaled manufacturing facility. dayton is home to wright patt patt patterson air force base. it's home to an incredible aviation workforce. ohio provides more parts to boeing and airbus than any other state. it's third in the nation for manufacturing. and that's really critical as we look to where we're going to

site our manufacturing facility. and in addition the incentive package that both the state and lot community provided was really spectacular. and finally, our key partner has its largest northern manufacturing location just down the road for us here. >> all good reasons. it wasn't long ago you guys received faa certification to begin flight testing with your prototype. how often are you doing these test flights and what are you learning so far? >> we are flying regularly and making really spectacular progress and since we last talked, we rolled our first aircraft off our pilot manufacturing line in marina, california. it really demonstrates the momentum that we have as we are scaling this technology and we're so excitedabout the

progress we're making on certification with the faa. the faa is really hitting its stride and providing time lly responses. as a company we are leaning into the next fphase of certificate f i have case, which is testing. >> you have commercial service slated for 2025. do you still expect most of the early air taxi rides, if you want to use that term, to be to and from airports or in other urban locations not necessarily going going to an airport? >> the airports are the pillar of our service in any locality.

we have a partnership to provide app experience, washdelta has invested more than $10 billion to best in class air infrastructure and we're really excited to be working to leverage that infrastructure and build our on take-off and landing locations a the those delta locations. >> but there have been more than a few critics in the last six months to a year that say for the projections that joby is putting out there, we think they're too optimistic and we don't think this will be as widespread as they're projecting. what do you say to that? >> we're taking a very incremental approach. we're going to take this step by

state police and grow this into something that can be part of people's daily lives. we're so excited about it. >> does that mean you're going to produce your projections in terms of daily flights? >> we are very excited about what this can deliver for customers and, no, we're not reducing our projection. on a big day, the founder and ceo of joby, as you announce breaking ground in dayton, ohio. i will send it back to you. >> all right, phil lebeau, busy. you're all over the place. get back on that strike. we got much more on the united auto workers. we'll speak to an official if

the u.s. chamber of commerce and much more under president biden and president obama. it will be interesting, though, another march requestspo -- i we'll tell you what to expect we'll tell you what to expect afte r insting routa cart-go. if you don't know you're watching "squawk box" on cnbc. 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. ♪ ♪

connecting to opportunity is just part of the hustle. ♪ ♪ opportunity is using data to create a competitive advantage. ♪ ♪ it's raising capital that helps companies change the world. it's making complicated financial concepts seem simple. opportunity is making the dream of home ownership a reality... ♪ ♪ ...writing new rules and redefining the game... ...and driving the world forward to a greener energy future. (applause) ♪ ♪ opportunity is setting a goal... ...and charting a course to get there. sometimes the only thing standing between you and opportunity... ...is someone who can make the connection. at ice, we connect people to opportunity.

welcome back to "squawk box" and welcome to our studio audience. leslie pick are joins us now on instacart. today is the big day, leslie. >> hey, andrew. yeah, it's going to be a pretty busy week ahead for ipos. instacart set to finalize its price after the bell today. after hiking the range, it's expected to opt to something at the high end or above the high range. that means it is likely to have a valuation around $10 billion or above by the time it starts trading tomorrow. marketing automation platform clavio opting to increase on

stronger investor demand and they're expected to set its price tomorrow afternoon and start trading on wednesday and both of these come on the heels of the biggest ipo, arm, traded up 25% on day one last week. the u.s. ipo market reopened in dramatic fashion goldman said in a weekend note. the firm said its barometer is more consistent with a normalized back drop with new issuance thanks to a jump in the s&p 500 this year. but this product coming to market is pretty dissimilar to that in the most recent cycle peak in 2020-2021. they will do a down valuation. goldman argues the hyper

valuations from that ipo class of two to three years ago made for some pretty poor aftermarket performance. a third of the backed companies in 2021 came to market with valuations exceeding 15 times sales. none of them outperformed the russell 3000. >> goldman sachs leading this particular ipo, the instacart ipo. my question to you was going to be whether you think they could actually increase the valuation again tonight. >> well, they could increase the valuation by pricing above the range. i believe sec rules dictate you can't price it above the range more than 20% from the high end. so, yes, they could raise the valuation by pricing above the range but only within a certain window. >> leslie picker, we'll see what happens tonight and tomorrow morning when this thing goes public. >> when we come back, a lot more

on "squawk box." former kansas city fed president esther george will be joining us. plus, what is ahead for the rest of the year. you don't want to miss an interview with treasury secretary janet yellen. that's at 10 a.m. eastern time. you don't want to miss it. stay tuned. "squawk box" rolls on after this. to take our operations to the next level. (marquis) with a custom private 5g network. (ella) with verizon business, we get more control of production, efficiencies, and greater agility. (marquis) so our customers get what they want, when they want it. (jen) it's not just a network. it's enterprise intelligence. (vo) learn more. it's your vision, it's your verizon. people are excited about what ai will do for them. we're excited about what ai will do for business. introducing watsonx a platform designed to multiply output by training ai with your data. when you watsonx your business, you can build ai to help

coders code faster, customer service respond quicker, and employees handle repetitive tasks in less time. let's create ai that transforms business with watsonx. ibm. let's create.

welcome back to "squawk box" right here on cnbc. if you're watching the futures this morning, we have turned into the red. dow futures down about 15 points, s&p off by 6, the nasdaq off by 44. the treasury market is looking at a two-year above 5%, 10-year back about 4.3%, too. you are looking at higher yields. crude oil has been pushing higher. that could be a big concern, especially with what to think about inflation. wti up another 1% to $91.68 a barrel. investors are looking ahead to wednesday's rate decision from the federal reserve. most are expecting the central bank to stand pat but obviously

we'll be listening closely to any new commentary from chair jay powell. joining us is federal reserve president and krceo esther geor. many think there's only 25 basis points. is that the right way to be thinking of things? >> the fed has not yet achieved its targeted inflation rate of 2%. the chairman and fomc members have been clear about their resolve to get there. i expect at the conclusion of this meeting there will be more in insight offered about where they are, how close they are and that might include keeping the higher rates.

>> a previous guest says he thinks we could be heading into a recession. sometime in the next few months he thinks we'll be in a re recession, and it's going to put the fed in a pretty tough position. he's basing this not only with the 10-year and 2-year spread but manufacturing and consumer sentiment turning down. does that sound like a plausible situation? >> i think that should be among the scenarios that markets and all of us should be thinking about. it would be very unusual to see a tightening cycle that has not resulted in a recession. what magnitude i think clearly you could come up with a variety of assumptions to try to determine that. but i think what we've seen so far is the economy responding to those higher rate increases and then it really a question of how durable, how resilient that

economy is to adjust to the rates in process, whether the federal reserve will feel like it has to do more. so too soon to call a recession, i think, just like it's too soon to call a soft landing. >> it does, though, put the fed in a bit of a quandary. it's got a dual mandate. one, it needs to worry about inflation, two n, it needs to worry about -- what's more important right now. >> i think the price is clear, they have to restore pricing of the common and we've heard that their focus is returning to a 2% target on a sustainable basis and i think in line with not ignoring the employment mandate for sure but understanding that the cost of high inflation

bringing it down could result in impacts to the labor market. >> but don't you think in terms of getting to 2% that they've got time, a lot more time than perhaps the market even expects? i think there's a sense that somehow they're going to race towards 2%. now if it takes them another two years, maybe that's okay. >> well, i think this is where it's important. and the reason that you would see a committee pause at this stage is because they want to see the direction of the data. they want to see what momentum is behind, the disinflation that we've seen so far and to know what that trajectory is. i think it's hard to see without much clarity. they don't have to race to the finish line just yet but i do think they will have to get growing confidence that they see the numbers moving in the direction that helps them meet their mandate. >> high oil prices can be

inflationary and deflationary, i think. net-net, how do you think -- it slows down economies around the world i would think but also filters through to just about everything. if you throw in the uaw strike and a possible government shutdown, isn't there a lot? it's kind of like tale winds for the fed in slowing the economy, isn't it? >> could be. and i think particularly energy prices are so salient for the consumer. you see them every day, you experience that when you're filling up your gas tank in particular. and so those higher prices can affect demand. it can also affect, though, people's expectations for future inflation and i think that is a place where the federal reserve is going to be very mindful of what impact future inflation does the effects of higher wages and things like higher gas prices have on the task ahead of

them? >> obviously things have gotten a lot trickier. if you were still a voting member on the fomc, how would you be voting this time around and in november? would you be more inclined to a hike for more inclined to wait and see. >> i think i'd be comfortable waiting a the at this point and i've learned not to second goes my colleagues were i'm on ahead of them in terms of loolk being at the data, understanding you a and so today's meeting an important one as always in terms of hearing, how their discussion went and how they see the future of the committee's action. >> what concerns you the most at this point? would it be energy prices hiking back up, would it be consumer spending slowing down a bit? would it be the potential for some sort of a credit issue,

things we haven't learned about yet, weakness in the banking by this quick move in rates. >> i i thought about the impact of these hyper rates for some time on the banking sector. even though we saw some early reactions from a few banks, the issues of adjusting your balance sheet to these higher rates i think has yet to fully come through. so i would keep an eye on the banking system, even though there are no obvious problems there but there are unrealized lossesin that and those looking for other signs of credit weakness into how that translate

into the. if that's the concern then the market maybe is right in thinking that the cuts to the interest rates are coming sooner rather than later because if there's a shock, that's basically the fed's only tool. >> well, certainly if there's a shock, if there's something that hits the economy that's unexpected, it is the fed's only tool and you will likely get a reaction. but i think in terms of looking at rate cuts out into the future, the commitment they are getting to their target for inflation. so either one of those scenarios could cause a reversal of the policy we've seen but you just really can't know at this stage. >> eis the former president of the kansas city federal reserve bank. it been great talking to you today. >> coming up, an update on that uaw strike.

what does each side want ant how let's get another check on crude oil, almost 92 now. on friday west texas intermediate closed at its highest level since last november. we're adding another 1.3% today on the gasoline price, coming off a 2% gain last week. gas is up about 10% this year and closing in on $4. you're watchin"sg quawk box," really, everybody eaves favorite morning show on cnbc.

you know doug, ever since switching to workday you've been a real rock star. rock star? what do you know about rock stars? billy idol? i mean where's the skin-tight leather? my shoes are leather. where's the unnecessary zippers? that thing! billy, rock star is just how doug feels when he uses workday. thanks, rory. i'll show you rock star! be a finance and hr rock star. workday. for a changing world. billy idol just stole your golf cart! mlb chooses t-mobile for business for 5g solutions... ...to not only enhance the fan experience, but to advance how the game is played. now's the time to see what america's largest 5g network can do for your business. power e*trade's award-winning trading app makes trading easier. with its customizable options chain, easy-to-use tools and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are.

e*trade from morgan stanley. every day, businesses everywhere are asking: you can stay on top of the market is it possible?ou are. 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.

he's long taken the view that a.i. is the future. he's been talking about a.i. for a very long time. he's also of the view if you just make lots and lots of bets in the same sector, one or two is going to hit it out of the

park as opposed to finding some small company -- >> it's a v.c. view of the world. >> on a much bigger scale. >> and a breach damaged portions of the company's i.t. infrastructure. clorox says it is still evaluating the extent of financial and business impacts from that attack. the stock right now down about 2%. >> in roark capital's deal to buy subway is under scrutiny. officials are taking a look at the deal and possible anti-trust complications a particular concern, the way subway defining its competitors in its own

franchise agreement documents. they already own duncan brands, sonic, jimmy john's, which i think are subs and more, adding subway to its portfolio would create a company with more than 40,000 restaurants nationwide, which is throw times of mcdonald's. when we come back, we are going to talk about the uaw, what's the latest there, what we're seeing. we've got debate going back and forth on that. we'll also talk markets and get you ready for trading. futures in the red, dow down by 34, nasdaq off by 43, s&p down by 7. d can get the best of "squawk box" in our daily podcast. just followed squawkpod on your favorite app and you can listen any time. "squawk box" will be right back.

♪i'm hearing different ways for me to screen for colon cancer.♪ ♪it's time to use my voice,♪ ♪i've got a choice, more than one answer.♪ ♪i sat down with my doc.♪ we had a talk. ♪knew just what to say.♪ ♪i asked for cologuard and did it my way.♪ cologuard is a one-of-a kind way to screen for colon cancer that's effective and non-invasive. it's for people 45 plus at average risk, not high risk. false positive and negative results may occur. ask your provider for cologuard. ♪i did it my way!♪

it's day four of the united autoworkers against detroit's big three automakers. ford announced layoffs on friday. that company and jeep maker

stelantis but they called the latest raise offer a no-go. joining us, a former member of the labor relations board, now with harvard law school and the executive chief policy officer from the executives of congress. the white house correspondents' dinner. >> professor, can i call you sharon now? >> please call me sharon. >> call me to dinner. i don't like to take any amusement or satisfaction out of it but it's fascinating how you would recommend the biden administration to approach this, sharon. we had harry wilson on last week. he was part of the task force

factoring the crisis and he said that the uaw has a point. they shared a lot of the sacrifice after that and have not really participated in the up side that woor seeing. -- we're seeing. so you can understand a number even 40%. but you point out the booming profits. my thought is past performance is no indication of the future. could you think the outlook is bright from the big three for booming profits to continue from here on? >> i certainly think that the outlook will be brighter if the companies treat their workers in a way that's fair. there are a lot of variables that will determine the future of the auto sector. let's remember that labor costs are actually a very small part of these companies' costs. so to position what's going to happen at this bargaining table as determinative of the future

success of these companies is not exactly accurate, but the companies have over these past years have since 2007 when as you recounted, the union did di great concessions to save this industry, the companies have increased ceo pay at a very rapid rate. they have given out billions of dollars in stock buybacks, so to now say, oh, we have to be so careful about the future and ask workers again to be the ones to absorb risk about the future, they'll be most successful if they come to the table in good good faith and negotiate. >> but a hobbled employer doesn't help anyone. we know ford lost $4 billion in trying to do the ev transition.

we know that the biden administration is on the cover of the "new york times" today. the emissions standards are going to be -- in the next ten years, almost prohibitively expensive for a lot of industries. it seems at this point they are facing a very daunting future, the uaw, and it doesn't help anyone with the automakers end up like they did several times in the recent past, and that's what you -- i've heard the 7 or 8% of labor but i've heard it can be quite a bit more. do you think 7% or 8% -- that labor costs for the big three? >> no, it's going to be the lot worse if you look at these uaw demands. it would be one thing if the focus were talking about how we share in the future growth and profit of the automakers, but the uaw is looking for a 40% pay raise. they want workers to be paid for five days when they only work for four. they want to return to defined

benefit pension systems. that is a recipe to put these companies into bankruptcy, and that serves no one's interest. i think the question we have to ask is, why do they feelso emboldened? this isn't the first time we've seen demands like this. it's been the summer of strikes, and this is a bit of a pattern, unfortunately, i think it's being fueled in part by the biden administration and this push for unionization at all costs. and we saw a little bit of that in the presidential march on friday, so we're deeply concerned. we have to restore balance. workers deserve a pay raise, but not the type of things that the uaw is demanding that's only going to result in these companies going out of business. >> june, if this were to actually make it more difficult for the u.s. economy in an election year, do you think that is in the back of the mind of negotiators that are being sent by the biden administration? this doesn't help anyone, and it doesn't help the president in terms of his re-election efforts. >> okay, so, to be clear, first, the president is not sending

negotiators. there are no members of the administration that are going to be sitting at the table. sitting at the table are the company and the union, and i just want to say to question is loyalty of the uaw and their members to the future success of these companies, there's just no basis for that. i mean, again, let's go back to 2007. this is a union, and these are members who sacrificed a great deal to save the auto industry in this country. now, in terms of the sort of political ramifications, i think the best thing for the president's politics is what's best for the u.s. economy, which is to have a thriving middle class. that's at the heart of bidenomics. that is what the uaw has been at the heart of for a hundred years, of building good middle class jobs in this country in manufacturing.

so, i think getting a fair contract is the best thing, both for our economy and for the president's politics. >> neal? >> well, listen, you have the uaw over the course of the weekend saying 20% pay increases are simply paltry. i think, joe, you said it best. the past indication of the last decade isn't a guarantee of future performance. i would be a lot more reassured about the uaw leadership if we were talking about how we expand the footprint of these companies and how workers then share in that. these companies have been sharing quite a bit of record profits with their employees through profit-sharing programs, but that's not the focus of what the uaw wants, and so i think we're right to be concerned, and what we're focused on at the u.s. chamber is the ramifications of this through the broader economy. we've already seen additional layoffs as a result of these strikes and that's just in the auto industry, but think about all the service employees, the restaurants in detroit and around these plants who are counting on these workers being in their jobs.

they're collateral damage in all of this, not to mention the fact that the american consumer is going to end up being paying for these huge wage increases and huge benefit increases. >> that's the thing that concerns me, sharon, is down the road, let's say tesla has a lot of competitive advantages, so let's say that during the ev transition, this makes the big three even less competitive in trying to compete against tesla and bmw and mercedes and everywhere else. you give all these things out. next thing you know, we're faced with where the government events or taxpayers are on the hook for wages that got -- just went up too much and hurt the company's profitability to the point where it couldn't innovate and it actually was bringing on layoffs. you don't think there's any chance of that happening where a company could be hurt because it's not as competitive because of these wages? >> no. absolutely not. again, this is a union and

companies that have bargained for a hundred years to build this industry, and there's just no reason to think that the uaw does not want to have these companies be successful. but they want them to be successful in a way where that success is shared. i'm not hearing a lot of concern about increasing ceo pay, increasing stock buybacks. >> but sharon, that's just optics. if you take the 20 or 25 or $30 million, that's de minimus for what we're talking about at the success of the company. maybe optically, it looks bad, and it's a politics of envy and everything else, but you take a defined benefit, put that back in, 32-hour workweek, a 40% pay raise, i mean, the ceo issue, that's just a talking point. that's not -- that doesn't hurt the bottom line of the company or the future profitability or ability of the company to compete. >> i disagree.

having a company that is committed to building good middle class jobs, to treating their workers fairly, to giving these workers a voice in what the future of the industry looks like and how all of the workers, the companies, the shareholders can win the ev future, that's the best thing for this company. it's the best thing for the workers, and it's the best thing for the communities. when you talk about what the spillover effects of a strike might be, let's talk about the spillover effects of -- for communities when workers aren't paid a good middle class wage. these communities depend on uaw workers making a decent income so then they spend their money in these communities that have stood by these companies for generations. that's the way that you can best grow this economy and to have everybody, again, win the ev future. >> okay. >> i think getting lost in this

is the fact that the -- these three companies have actually put record offers on the table. we're not talking about zero and the demands of the union. we're talking about 20%-plus pay increases. we're talking about signing bonuses. in excess of $10,000. we're talking about increased health care and retirement benefits. that's what the companies have put on the table. clearly there is a cost to all this. clearly there is a point at which if you keep piling on, pay increases and benefit changes, that you actually put the financial viability of the company at risk. if that wasn't the case, why didn't they ask to simply double the wages? there are real costs here, and we're playing with fire. >> neil, thank you. sharon, thank you. we got to run. we're putting our commercial endeavor at risk if we don't leave right now. thank you. appreciate it. >> joining us right now, at least for a little less than two minutes to talk strategy for the trading week ahead, stephanie link. we're going to be hearing from the fed later this week. we got these earnings reports and a lot of anxiety, stephanie.

what would you do? >> stay calm. i don't think that it's going to be a big event on wednesday when the fed does decide. i don't think there's going to be a decision in terms of a change, anyway. i don't think they probably even go in november, but rates are going to remain higher for longer and that's because the economy continues to hum along. last week was really positive with regards to data, industrial production, retail sales, final demand, initial claims, across the board, the numbers are coming in better, but that's leaving inflation higher, unfortunately. so, that's why we have to learn to live with higher rates, but earnings are -- estimates are going higher. capital markets are actually opening up, which is very healthy, and we get a very big key report tomorrow with fedex and their earnings, and i care less about the numbers. i just want to hear what they have to say in terms of what's going on around the globe. >> okay. stephanie, that was beautifully concise and insightful all at the same time. we appreciate your indulgence this morning.

thank you. >> see you soon. >> let's take a quick final check on the markets before we hand things over. futures have been in the red, at least for the last hour and a half or so. we'll see right now that the dow futures are indicated off by about 18 points. s&p futures down by five. got about a half hour to go to the opening bell, so that could all change. we've been watching yields and so far it liooks like the two-year is well above 5% at the moment. right now, it's time for "squawk on the street." ♪ good monday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber at post nine of the new york stock exchange. stocks kicking off the week mostly in the red with plenty to monitor. a fed decision this week, the auto strike enters day four, ipos on deck, oil, nearly 92. our road map begins, though, with the big week ahead for investors. the fed's next decision, front and center. we're going to talk to