of the border. we'll bring you the latest on the strike we have down in the u.s. it's wednesday, september 20th it says here i'll take their word for it. 2023 "squawk box" begins right now. ♪ good morning, everybody. welcome to "squawk box" here on cnbc we're live from the nasdaq market site in times square. i'm becky quick along with joe kernen andrew is off today. so far you've got green arrows these are moderate advances. dow futures thisern mooing indicated up by about 56, the s&p up by 7, the nasdaq up by 30 as joe mentioned, you've got that fed meeting coming up today, the fed decision coming upping and that's what everybody

is waiting to see, even when you look at the market it looks like the 10-year is sitting above 4.3% the 2-year well above 5% then you've got crude oil prices that are creeping closer and closer to $100 actually this morning they're off by 1%, back to 22. it was around $93 yesterday. a lot of concerns over at goldman sachs. they're suggesting they they 12 months from now the price will be $100 for a barrel of wti. >> we've been talking about this it would filter through, but the -- you know, it depends on how you believe. there's two sides to everything, it seems like. i could debate either side it does hurt demand. we're going to be about $4 a gallon and that may cause people

to rein in spending on other things it's deflationary and inflationary i could see both ways. >> it works its way into every single thing from items that have to be delivered to manufacturing. the one thick we did see from bank of america, remember we had them in and we talked about what they saw over the last month much more went to energy and it came away from goods. >> zero sum gains when you argue with the government or zero sum about it with certain people there are zero sum things about what you have per month if x amount -- there are people who shop -- i go to the grocery store every day. i don't know why. >> because you like it. >> i don't like pushing that cart because there's a lot of congestion and trachlk i use a thing. >> a basket. >> i watch them. i'm like, they're going to be at

the checkout line for an hour. they have $200 to to a week's worth of shopping. as far as the yield curb, remember we got unsettled three months ago we had those hot numbers it seems like basically we went up a quarter point so you have to say it's been kind of orderly, haven't it? we were probably at 3/4 on the 2-year now we're on 5 >> it's been orderly, yes, and if you think the fed is going to pause this time, which is the overwhelming consensus, but when you start looking at the mortgage prices at near 8% mortgage prices at 7.5, 8% -- >> they don't tell you

that's why the market has not given back some of the early meetings. >> you've got bank of england, bank of japan. in england, they saw inflation that was below expectations, but still north of 6%. when you talk about stopping and they're north of 6%, it's all different. >> if you subsidize unionization, long term a lot of costs are going to go up for businesses in the united states, if you subsidize it. >> with taxpayer money, you mean >> yeah. subsidize it you can't blame it on unions you see whether it's green or chipped or whatever it is. why can't i have some if i'm a worker spread it around

it's going to make it less con pettive than it was before it does raise costs. it would always be good to have markets set price, which it rarely does. the federal reserve has been setting praises for too long. the squauks planner. who's in charge? >> i don't know. >> don >> i think it's dave evans it's thing that deserve to be on there. the fed with its latest rate at 2:00 p.m. eastern. most lick likely he's not going to raise as far as earnings, we're going to hear from general mills before the opening bell. after the open bell, fedex and

kb to avoid a strike, which would have been on boit suit of the border the canadian union then plans to use that ford deal as a framework for negotiations with gm and stellantis. in the u.s. the biden administration is no longer sending key officials to detroit this week to help broker a deal between the author mane. he said hoe would is sem them. the uaw mutually agreed it would be better to speak virtually via zoom uaw president shawn fain said he does not see a major role for

the white house. the other morning we had an official only. she kind of snapped when i said the white house is sending so peek -- >> this is where the rub came in because sean feign has been talking about it president biden has called himself repeatedly the most labor-friendly president in the united states and he still fws p. they don't want him involved >> and trump a republican might g and start walking the picket line as a populist, that would not be out of the question to see

something those. >> michigan was an important sbing state and trump performed well. >> she kept using the word "fair. we want everything to be fair. egalitarian? i don't know you need a fair opportunity. >> everybody keeps -- >> i know. if the ceo keeps making too much -- it's like taxing the rich one ceo making $20 million isn't ee equivalent to billions of dollars. >> but the objects matter.

when you see people on the nrlb, then you know. >> it's all appointed. >> right which is why voting matters. let's get to this wick's big ipos instacart finished high, still above the ipo price. leslie picker joins us with more how did it go? >> it's kind of an odd and co common thing it's still higher than the $30 per share ipo price. you can see now down above 5%, hovering $2 above the ipo price.

so what happened there wasn't as much investor conviction at the $2 share opening price and willing buyers came in at a lower price it's kind of like what we saw with arm since then arm has tumbled at least 4% in the three subsequent days from its ipo even though arm and instacart are two separate businesses. it certainly didn't help perhaps the biggest indicator of whether it can truly open or not is clav owe. it's set to debut today. it's part of a s.a.s.s. model.

we'll see if it has stronger support than either arm or instacart, guys. >> this is really important. we had alexis oh on yesterday. we asked if it was indicativend h sarkd we'll see. that's funny as everybody is watching it. f free issue anances are really important. >> yeah. then it quickly turned south

and i think it's a fact the prices have been bullish, boosting the range all of these ipos have had characte char characteristics. i think it's too soon to tell. >> they had people who invested for 11 years who were looking to get out of some of those -- flip some of their shares as well thank you very much. by the way, folks, instacart founder apoorva mehta will be with us at 7:30 a.m.

he started out doing the deliveries himself even though he didn't drive, he would take an uber coming up, we're going to get the fed decision later, a crozer look at the futures am the begin if a deal isn't reached, you could see this sprefrp you're watching "squawk box" on cnbc >> announcer: this cnbc program is sponsored by baird. visit bairdifference.com ance 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.

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a 2:00 p.m. fed meeting. joining us now, director of global macro at fidelity investments. reading all your comments, i was nodding and agreeing with everything, but, you know what it got me absolutely nowhere in agreeing with you in terms of what i would do, and a lot of your questions are almost -- they're not rhetorical they're almost like questions of

life like we need to -- to know what the fed's going to do, we need to know what theether the curre policy is restrictive or not we don't know where inflation is headed we don't know. a lot of times after the fed gets to a certain point, they need to wait to see what the lag effects are. we don't know. is it restrictive? you don't have the answer to that. >> we don't have -- i mean it looks restrictive, right we look at the tips curve. it's about 2 1/4, 2 1/2, as far as the eye can see if it's 1%, you add inflation to it the fed looks to be restrictive. then you look under the hood you look at the liquidity indicators, the reverse repo and tga and that's been going sideways for a year and you look at financial conditions. that's been going sideways for a

year liquidityishes haven't gotten that much more restringctive ina while. the tips market hat gone 2.25 where we have another labor strike and the pendulum is beginning to swing around. it may not be as restrictive as we all think. >> with that in mind, you try to figure out if you like stocks or bonds. i point this out all the time. with bonds, you know, if you look at 4%, all right, it's okay, but if interest rates are headed up, you're going to lose principle. you've got to figure out your duration if you stay short and interest rates come down, you can't reinvest so either option stinks to get a grabby 4% in the first place

it would be better to buy a 2.5% yielding stock in a company that has great prospects, wouldn't it >> for the 60/40, i still like it warts and all i think the bond market looks squhat compelling here. >> for safe money, for a base in your portfolio. >> yes, exactly because, you know, let's take the barclays aggregate index. it has a duration of six and a yield of five. if yields go down 100 basis points, if that long elusive recession ever comes, you make 11%. six plus five. if it goes back up, you lose 6 but only lose 1. but the risk rewart,'ve phen the yields go up or more is pretty compelling i would take those odds in the stockmarket any day of the week. >> especially when you think we're in the twilight of a

secular market you might prefer stocks to bonds on a risk/reward basis. >> we got a 7% annualized return in 2021. that's likely coming down. if inflation does become more structural at 3 or 4 instead of two, that's going to knock valuations down, so i do think there's a valuation headwind that doesn't mean the market goes down. it means earnings have to do all the heavy lifting. it's mostly a matter of setting lower expectations because we did get very handsome double didn't returns for quite a few years since the financial crisis. >> all right i don't know you gave me a lot, but none of it is that great. >> investment is making real

time decisions with imperfect information. testing our assumptions is something we all need to do, and the inflation effect is what we need to do. >> risk management it would be nice to hold onto what you get and not blow it on returns. i understand you're right good advice, thank you that's wi-fi dealt's got like a gazillion dollars. >> and then some. >> and then some. when we come back, much more on the fed decision. in the 8:00 hour we'll be talking request "the wall street journal" chief correspondent nick timiraos. and also the up yat on the brain implant clinical trial. >> when can i get that

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elon musk's brain implant startup neura link is looking for patients for a clinical trial. they're looking for patients with quadriplegia, spinal cord injury, or als it's allowing people to manipulate external devices with their minds. they were granted early approval back in may and the company has received approval from the hospital where it will perform the first surgeries, but it did not name the hospital. >> i mean rockets and evs. >> brain surgery.

>> neura links to use thoughts to control movement. >> i didn't realize they were looking for patients with als or spinal cord injuries >> if you're asking for volunteers for a brain implant, you have to have a need. but it's so amazing. in walter's book, when we run out of planet, he wants to have a new place for humanity to be able to move in addition to -- >> -- cars. >> -- cars, yeah. >> and the ability to shoot rockets up and reland them, which makes it more affordable. >> remember what we used to -- on the simpsons, hawaii, i have an ev, it goes zero to 60 in 1.9

seconds or something it's pretty cool. phillip morris is considerig actions in its push around health care. the tobacco giant is looking at options for pharmaceutical units. it's part of a plan to diversify from cigarette sales which, i don't know i'm like j.r. ewing at this point. i see someone smoking, i'm like what is the story? who still smokes in the united states >> fewer and fewer people. >> like a handful? >> but they got addicted to it. >> stop. i'm just telling you stop. coming up, the latest on the autoworkers strike we'll tell you which factories

the union can target if a deal isn't made ja a look ahead at winners and losers (s >> announcer: winners and losers is sponsored by state street global advisers. the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪

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good morning and welcome back to "squawk box" live from the naz sdaq and market square it could all change at 2:00 and the outlook in terms of f how the fed views the near term and medium term. nasdaq is up a little and the s&p is up by 6 points now. phil lebeau joinsous which factories could target for strikes if a deal isn't reached by friday's deadline phil, good morning.

>> if it's not reached i don't mean to correct you on air. if there is not an agreement -- i shouldn't say an agreement serious problem by noon on friday we'll talk about this in a little bit it may announce further strikes. the most damage would be those in terms of finally assembly are the biggest in the united states and those that make full-sized pickup trucks or the high end suvs in the case of general motors we're talking the ford kentucky plant and gm's arlington plant and then stellantis has its truck plant in sterling heights, michigan these are the biggest plants in the earlies of volume. not the biggest in terms of employment, but they're pretty darn close to the top. the uaw is not showing any

indication that there is enough progress that we could see this ending any time soon in fact, shawn fain says they want to see serious progress by noon on friday in order to not call for further strikes if they don't see that, they may call for a strike at one automakers, two awe though maker. that remains to be seen. as you take a look at general mo motors it remains to be seen. if there's another strike, it's figuring out how mump they can keep production going at the koois plant. about 2,000 workers are expected to be laid off this week because they can't get stamping in st. louis where the union is on strike one piece of news last night, ford reached an agreement with the uaw's counterpart in canada.

they have reached a tentative agreement. ford dodges a strike in canada now they'll look at gm and stellantis who have facilities up there as well. >> did the deal in canada look like anything the uaw -- >> we haven't gotten the full detail yet i think they were not being quite as aggressive as the uaw they talk to each other. they understand the dynamics here also you have to understand canada has a much smaller foot print. still important, but a mump smaller footprint. >> much smaller footprint meaning it's not going to cost as mump? >> it's going to be costly, oh, absolutely, 100%

i think the uaw is pushing for a far richer deal than what you see. >> thank you we'll see you in a little bit. in the meantime our next guest estimates the strike could go on for 45 days which could lead to more strife. colin. this is different than what we had seen in the past they're striking all three at the same tame. 45 days if it lasted that long, would what but catastrophic? >> you're absolutely right it's never been seen before. right at this point, it's kind of an underwhelming start. i think phil is right.

the next wave is coming friday you're not cutting out the volumes. but full-size pickups could be two-thirds of north america's profits. they're hitting them where it really, really hurts it could escalate in the next several weeksful you didn't start with the most profitable vehicles, but it could be the next profitable. >> what does it mean if they strike for 45 days >> 2$2.5 billion to $3.5 billion similarly for stellantis it's big dollars >> what does it mean >> you're talking the wage demands are 2.5 to $3 billion.

>> the offers they already have? >> the demands they have the offers they have today are ore a billion dollars that they put out the 21% wage increase. there's a long way to go they're talking about the fixed costs too. that's the real painpoint for the automakers ford's guidance is 10 or $11 billion. material numbers for these companies, this is why they're fighting. >> 7 or 8% are you taking into account 32 hours? you're not taking those into account. >> you hear shawn fain say it's a small percentage what do you call that?

disas disassembly? >> margins in the industry are pretty thin. a percent here or there is very material so if you're going from 6% to 8%, you've cut out a ton. >> you say the co o'es are talking $6 million give them a little less, four or five wouldn't that be better? how about this some of these are subsidies, and if i were an autoworker to get the money, the tax credits, you need to pay prevailing waged

it's involved in you being able to take the money from the i. rch r.a. why wouldn't you do that with everybody? wages would go across the board. you're talk 2.5 -- probably $1 billion, $2 billion. >> is the ev transmission going to be competitive? are all these things going to be difficult, and if ho% was adwreed on, who's going to end up paying that 40% do you disagree it's going to be taxpayers? >> at the end of the day

you bring up a couple of good points i'm not sure where to go first would be the jobs. >> right they'll have their hands out during existential issues. remember a guy named lee ee coka we have seen this authentic before it. i think they're negotiating at peak profitabilitilet they have pricing coming down. then you bring out evs evs are very unprofitable. the economics are very challenging. so as they ramp these vehicles, it's going to dilute their marys we're funding them and we're funding their own demise of the profit center which is layle

them >> i think you're right. when i was starting 15 years ago, industry was looking at how many cars to sell. i think we're moving to a period where they're going to have to look at how many evs they're going to have to sell. the dynamics are not good. >> when you say you're underweight, these stocks. they took some serious haircuts but shareholders got wiped to ziel or underweight is your flashing sell sign? >> they ended up in bankruptcy they have $40 billion in liquidity. they're unfortunately heading in that direction, right? a lot of the pressure in terms of regulatory, you need to sell evs, pricing coming down, and now we have labor inflation.

i would be very concerned if some of the concessions coming back retiring health care pension for workers can be very costly reinstatement of things like job banks. reduce their ability to downsize as you need to there's always ups and downs in the economy. you want to be able to do that these things are big issues if they were to top them. they're nonissues, that's. that's kind of the magnitudes of the demands you asked for here. >> coming up. >> we look at documents inadvertently posted on a court website next and later we'll speak with savita subramanian and why she's

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we're learning more about microsoft mobile growth. they said gaming growth would come from advertising over the

next several years they predicted it would double compared to an $18 billion forecast for 2022. that information was included in a presentation that was posted to a court website until microsoft told the court those documents retain nonpublic information. a separate file listed features of a kirchlt xbox series and updated controller all slated for 2024 in a post on x, microsoft's gaming ceo said it's unfort senate the company's work was shared in that way because much has changed and there's much to be excited about and in the future he said, we will share the real plans when we are ready. i would say that too p. >> i don't like calling it x

i like twitter can't h do the overall thing -- >> if you loon a post on x. >> i still call it google rather than alphabet. >> you can't say -- >> he whose name shall not be spoken. >> a post on x we're talking about twitter. crude holding above $90 a barrel we're going to talk more about the impactof higher prices on the consumer next. a reminder you can watch or listen to us live any time on the cnbc app. >> the bad thing is you should say x, the company formerly known as twitter i'm not saying that every time

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well, prices sticking above $90 a barrel after hitting ten-month highs. crude surged more than 27% over the last three months, adding more fuel to the inflation worries. joining us now to talk about the impact of oil prices on consumers, patrick duhan, gas buddy head of petroleum analysis these prices aren't anyone's buddy. you need a new name, patrick do you have all the states average prices at your fingertips is it $3.90 now across the country? >> well, it is pretty close, joe. we're at about $3.35 a gallon. in california, refinery issues, we're at $6 a gallon in l.a. the california statewide average, as you bear with me, california is now at $5.69 a gallon washington state at 5.01 we're seeing high numbers as we deal with refinery issues.

we made the transition now in 49 of the nation's 50 states for cheaper winter gasoline. that will help give consumers some sort of break in the next couple of weeks as we kind of work through those refinery issues in the west coast, previously there were also refinery issues in the rockies and the corn belt. we should see a breakthrough in gas prices, but for diesel, bad news, price of diesel at $4.57 a gallon last year, spiked over $5 a gallon in the fall as we started to see heating oil tanks be filled up. the same possibility exists this year for diesel which could feed into a higher inflation numbers. >> patrick, i keep hearing about the refining issues in the west, especially in california are these short-term problems or are these long-term problems is this just reality for now >> they are short-term issues, we had this kind of same scenario almost exactly a year ago in the fall as well. that refinery maintenance when coupled with unexpected outages can basically crimp any available supply and breathing

room in a market very quickly. these issues are temporary in the west coast california, though, unlike the rest of the nation doesn't make the transition back to summer gasoline until the end of ob october. so the higher oil prices are heating into what we expected for consumers getting a break. they're not getting much of one. with oil prices down to $90 a barrel after hitting $93, we'll have to see if this is a short-term blip or a trend >> why is california always so much more expensive than the national average >> joe could touch on this too, high taxes, carbon management program, its own blend of gasoline california is basically a league of its own >> carbon management programs. nice >> cap and trade, yes indeed. >> not enough of those around. what i love, patrick, are the carbon offsets like bill gates. when he flies that 747, once you offset it, it is like it never happened it is like he's fine, right? how does it -- that doesn't seem right to me, i don't know.

is that how it works >> there is a l lot of sustainability solutions out there. the 747 is still going to be burning jet fuel and somebody else is going to be offsetting that with something else, whether it is planting trees or clean energy >> great patrick, we had someone on the other day say that this is not demand related, $90 oil. that it is supply related. do you agree with that completely or is that -- it must be a -- it always is a little bit of both. is it always a supply constraint world we're in right now with the saudis >> i think to your point, i would mostly agree with that you look at demand from china, certainly depressed and now you have russia and saudi arabia, this war on the low price of oil that has been brewing over the summer months, and arguably now they have tipped the balance into a deficit where demand is outpacing supply and that's what the market is getting a little bit nervous about, especially if you sprinkle some turmoil or

geopolitical issues in here and there, the market could go up much quicker if one of these issues developed or if mother nature doesn't help us or if we get a hurricane. there is a lot of caveats in the way of lower gas prices that we could see, especially since hurricanes are still churning out in the atlantic. we have made the transition to winter gas and we haven't seen much of a decrease yet in gas yet, joe, but there should be some relief toward the end of the year, but that relief is far short of where we're hoping and the bigger reason for that is the price of oil led by saudi arabia and russia's production cuts >> and when i think of california, i don't think of mass transit much. i know they have some now. they didn't have any people, one person drives every car out there and they're all stacked up in six lanes and it is $5.50 a gallon. >> you think about l.a., you don't think about mass transit where are the trains nobody wants to get on a bus. >> i've seen them. they have some i was never on one but i've seen them down there

near the airport >> when you have a ten-lane highway, that's a little bit more conducive to getting where you need to go, but you have to pay $6 a gallon. by the way, this morning, l.a. is now hitting that $6 a gallon mark on air, we tipped the $6 a gallon mark for the l.a. metro area. >> that's like 100 bucks on a suv to fill it up. patrick duhan, thank you whether n we come back, an exclusive interview with instacart's founder after the public debut and jim stewart from "the new york times" joins us to talk about disney's plans to ramp up investments in its parks and cruise businesses, and the potential sale of abc. "squawk box" will be right back.

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[north corridor, hurry!] -coming through! -or 3, let's go. the network more businesses choose. transplant received. at&t business. good morning the countdown is on for the fed decision at 2:00 p.m. eastern time today we'll have a preview of what you can expect and where you should be putting your money to work. plus, the looming government shutdown and the gop's budget blueprint. senator rick scott will join us live and will instacart deliver for investors? we will hear from the company's founder and largest independent shareholder as the second hour of "squawk box" begins right now.

good morning and welcome back to "squawk box" on cnbc live from the nasdaq market site in times square, i'm joe kernen along with becky quick andrew is off. carrie firestone is here you've come down from -- did you come down from -- you're not headquartered here, are you? >> i'm in boston. >> you are >> you came down to be on the set with us? >> i was here yesterday. i was here for "halftime report." >> did you fly, did you drive? >> no, i flew. >> you did fly >> not myself personally, but -- >> your arms would be so tired >> not that strong >> u.s. equity futures -- yeah, boy, are my arms tired -- u.s. equity futures are up a little bit before the fed news comes

out at 2:00 and the treasury is not a whole lot -- not a whole lop happening in treasury or crude. crude at $90 we are in the countdown. the countdown to the fed rate decision is on senior economics reporter steve liesman is going to join us with a senior moment now from washington with what investors can expect hey, steve i don't know about the whole senior thing might be a better name for that. >> yeah. not quite senior yet, joe. got a few years. as when i look at you, joe, you have a few years left too. we're both getting those aarp junk mail, aren't we >> we certainly are. >> so here's what's going to go on now, if i can remember what it is i came here for, oh, yeah, the focus will be on how fed chair jay powell is thinking about the recent economic challenges the autoworkers strike, higher oil prices and potential government shutdown and then, of course, we focus on what the fed signals through its forecast for

rates and the economy this year and next the biggest expected change that the fed underestimated growth this year with gdp averaging around 2%, that's the left side of the screen there, and it could go higher. but the average beneficial is 1% so we higher gdp than forecast, somewhat faster progress on inflation, assuming that progress continues, about right on unemployment, and close on the funds rate we got one extra rate hike still hanging around evercore isi writes the fed will leave rates unchanged in november, strike a stern resolute tone, and a high bar for future cuts, but will not exercise the option to hike unless progress on inflation or the labor market stalls out amid stronger growth. wall street's collective power will focus on gaming out how restrictive the fed expects to be on a real basis the current real rate, the fund's forecast minus the inflation forecast, averages about 2.4% per year.

that's this year that's the middle -- the third set of bars there. 2.1% still high next year, compares to a long run neutral rate of 0.5% the fed still expected to release the june forecast to be stepping on the brakes may not be hiking today and it may be done, but it is likely to signal its battle with inflation is not over for the rest of this year and well into next year even if the forecast cuts, it does not see itself essentially as easing, joe >> all right steve, so you -- you're in d.c you're going to be there, i guess, huh you're just -- >> yeah. >> huh >> yes >> okay, so we had someone on earlier and it -- i always get new thoughts it is nice to get new thoughts once and a while, steve, things i had not -- i don't know if we're restrictive or not how will we know, how will the fed know if it is restrictive? and if it did, it didn't have to

make any decisions. >> it doesn't. >> nobody knows? are we in restrictive land >> only looking in the rear view mirror, if you put up that second wall that i had up there, you can kind of see how it sees itself as restrictive. one way to look at it, john would be mad at me because i'm not using the correct deflator here, i'm using a simple rule of thumb here, take the funds rate, subtract the pce on left, get the real rate, compare that to what you think the neutral rate is and that's how you judge if you're restrictive on a numerical basis. you look at the economy. is inflation coming down, is it not coming down, is gdp slowing, is it not slowing? those are the ways you tell if you're restrictive and if you ask me how you -- >> we don't know we don't know what the basic point is going to be because you're looking forward, trying to figure out and guess -- it is guesswork. anybody who is being honest will tell you it is guesswork. >> what you're trying to do is

steer a $21 trillion economy to think this is anything but guesswork and, by the way, the sets of data we have to gauge the economy are not very robust, i would say. we're trying to use the high frequency data, there is lags in the government data, revisions to the government data you remember in january this year, the fed thought it was well on the way to vanquishing inflation until february went the other way and they revised all the progress in november and december so, look, i will say one thing, i don't know about good or lucky, this is an awfully good time for the fed to be pausing and have signal to pause there is a lot of stuff to go down in this economy and i think if i was doing this, i would want to be waiting too >> carrie brings up a good point too, looking at mortgages. >> yeah, you know, we know it, over 7% people get worried about a 7% mortgage. they have never seen that in their lives. >> and carrie, the other thing to think about is just how much that -- diane has been talking about this -- just how much the mortgage rate is over the ten-year treasury.

money is not just expensive. it is more expensive than it ought to be relative to historical norms you got extra percentage point or more in those mortgage rates, which tells me there is scope for things to come down if the fed provides at least some guidance that it is not going to go substantially higher. >> okay. steve, thank you we're obviously going to see a lot of you today we'll check in in a little bit first to squawk picks with carrie firestone carrie, before we jump into the actual picks, just very quickly, you said something that i heard from a lot of people recently off camera, the market is a little boring right now. it is. there is not the same volatility or movement or action. we're waiting for the next catalyst what do you think it is going to be >> yeah,we're treading water i think we're waiting for earnings we don't have far to go. in a few weeks we're going to start to hear the financials and the banks are going to give us some idea about their lending. i think there is activity picking up on the banking side we haven't seen ipos

we just have seen a couple, instacart and arm in the last week there are going to be more coming so that's working for the banking system and i feel as if there is a bit more enthusiasm about earnings up until last week, expectations for this quarter were down versus last year and now they have moved positive so, we will start to hear more and, remember, a name like salesforce, which is one of those july reports, it is offer the calendar year, they had a good quarter, because they pointed to some strength that they're seeing in a rebound in bookings for, you know, new subscriptions on cram systems and that was a good sign it gave us an indication that things were picking up. >> you sold some of your -- trimmed some of your positions is how you would put it. you've gotten a little worried. >> i think what happened is we had this huge move from last october. so names like adobe, salesforce,

google, these were all up over 50%. and they're still big positions for us, but just because of the weight, we felt, it is a prudent thing to do to take off some of the position, hold the rest. but we're still there. >> and you're buying other places too one stock that you bought recently, epam it is not something i'm familiar with. >> it is not a name that is very familiar it is mini accenture, a consulting company that focuses on digital transformation. down a lot because of many of their workforce was in ukraine they transferred them to other locations. but the stock was down over 50%. >> okay. other stocks that you like right now, unh, united healthcare. why? >> unh is both defensive because it is a big healthcare provider, that's not early cycle it has a great business that is based on insurance for employees. we know that the employment numbers have been strong the economy is growing we're not in a recession

and so we think that unh with a decent dividend, it is below market multiple is a good buy right here. >> you like blackstone too is that because it is being added to the s&p 500 or other reasons? >> we owned blackstone for years. we have been expecting it to be added for the past six years, i would say. so, it has picked up the pace. the private equity business, which has been in a slump is starting to improve. if interest rates aren't going to continue to spike, i think that's good. the real estate market which they're invested all around the world, not in office towers, but other forms of real estate we think is looking better. and, again, it is not an expensive stock with a nice yield. >> and, again, you mentioned all these ipos, the deal market is maybe opening up if that's the case, you got a play for that too? >> we're not buying any of these ipos yet there is something important that we're seeing, which is these companies have to have earnings both arm and instacart, they produce a profit, we're not in an era right now where anyone wants to pay a huge multiple of

sales with no earnings for several years to come. that's different from what we saw a couple of years ago and i think it is healthier for the market. >> but as a result, you say, oh, okay, i'm sorry, the debt deal market is opening up that's good for -- >> both. the debt and equity. debt on s&p global is one of our names and that's been in a real slump because no one was borrowing because interest rates were going up. now you have to go do it, you can't just wait forever. >> kari, thank you for coming in. >> thank you for having me. an update now on the autoworkers strike late last night, ford reached a deal with its canadian labor union to avoid a strike on both sides of the border. the deal must still be ratified by the union's 5600 members employed by ford in the ontario province the canadian union then plans to use that ford deal as a framework for negotiations with gm and stellantis. in the u.s., the biden administration is no longer

sending two key officials to detroit this week to help broker a deal between the automakers and the big three auto companies. president biden said last week that he would send senior adviser gene spearling and juli sue but they said it would be better to speak virtually. does this sound familiar uaw president shawn fein told ms on mo msnbc on monday he does not see a role for the white house on resolving the dispute. the potential for a government shutdown. senator rick scott will join us. instacart delivering for its investors in the nasdaq debut, giving some of the gains back early this morning instacart's founder and largest ht wpendent shareholder, apoorva mea,ill join us to talk about the company's growth prospects. all coming right back.

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he also questions why so many u.s. officials need to travel to china at the expense of u.s. taxpayers. joining us now, republican senator rick scott, a member of the budget committee and that goes against what i've been reading and hearing about, senator. i know you've seen the same things why do you say that this shutdown should be put at the door of majority leader and the president when most people say that speaker mccarthy has 12 or 13 guys on the far right that he just can't control and, i mean, we have seen it, it might come to a head at some point as they try to pass some of the stopgaps. >> well, first, joe, we shouldn't be doing this in september. we should be doing this in the summer we ought to be doing these budgets early. we don't actually have budgets yet. here is what i'm working on with the house. then we're going to the freedom caucus in the house, actually committed to not having this government shutdown. and do what they promised the american public is getting inflation down, interest rates

down by balancing the budget, so securing the border. they're working on a bill, we would never shut down government again. it would prevent government shutdowns. we'll have a continuing resolution it is not the perfect solution, but we ought to stop this idea that we're going to see government shutdowns we should never see government shutdowns again. >> senator, i'm sorry, just to clarify on this, that sounds like breaking news if the house freedom caucus is saying they're making sure they're not going to shut things down is that the case last i read there with ten house republicans that would not go along with this that would shut down the government and i think the speaker can only lose five is that the difference between the house freedom caucus and some of the others that are out there? explain that because the latest we heard is that it is very likely you see a shutdown >> sure. well, first, i don't think we'll have a government shutdown i think what is happening is the

freedom caucus is saying, we committed to the numbers, to start the process to balance the budget, we need to follow through on those numbers, and also secure the border so, my conversations late last night, members of the freedom caucus, they're committed to getting to a deal that does these things start bringing in the wasteful spending, and secure our border. i believe it is going to happen. >> tell me about how we should be -- you're a china hawk, i know so why would you not be engaging to try to figure out how to deal with this major superpower and trading partner in the future? you don't want as many people going. is it really a question of expenses, senator? >> well, look, i agree with you. and what we ought to do we ought to engage everybody we can and have a real conversation you watched china, you don't

have a real conversation with them everything they tell you is a complete lie they never follow through on anything whether it is a trade deal or following the rules of the world trade organization or whatever these things they never follow through. so, in that case, there is no trust, you can't do a deal with them so, i don't think we shouldn't be traveling over there and saying, oh, gosh, you know, how do we work with you when all they do is they sell fentanyl across our southern border, kill 70,000 americans, never comply with our trade deals, don't comply with the wto, they steal our technology the latest we have supposedly an antichina bill that allows companies like intel to expand in china, so it seems like that was the pro-china bill so i think why would you engage in somebody that just lies and cheats and steals? >> the future, though, is coming, whether we want it to or not. and companies like apple, companies like disney, take your

pick, we have multinationals that are dependent on china. there is no easy way out at this point. can we -- if we engage china, can we prevent the worst case scenario, whether it is taiwan, whether it is, you know, continued, i don't know, you know, when we get our trade secrets stolen, there is all kinds of bad behavior. but how would you handle that, senator, other than engagement and dialogue >> sure. well, first off, i actually really agree with you. we need to have engagement but, i mean, you -- when somebody is a bully, you don't appease them it never worked. i've never seen anybody succeed by appeasing a bully he threatens everybody, he lies, cheats and steals, that's what he does. how do you work with somebody like that? i think we have to understand that china is decoupling from us and if we want to continue to build american jobs, we got to figure out how do we buy american products, how do we build american companies, how do we stop supporting investment in

china, how do we support investment in this country >> senator, how do you think the election is going to play out, just shifting gears completely this has nothing do with china, just has to do with 2024, you're in an important -- you represent an important state, with an individual that at one point looked like you could challenge for president trump. how do you think it is going to play out is it going to be the two leading candidates at this point in your view >> if you look at the polls, you clearly would say it is going to be election between biden and trump again. i think the election is going to be about, you know, is the biden economic program working for you? and it sure doesn't look like it is you look at what has happened with inflation, look at mortgage rates over 7.5%, look at, you know, interest rates on car loans, highest in 23 years, high interest rates on credit cards

if you look at the job market, if you look at the, you know, the different surveys, it is not growing. they have -- even on the best survey for biden, they have to revise the numbers every month so it is -- this is not a great economy. i think that's what the election is going to be about when trump was in office, the economy was a lot better we weren't at war and we had a secure border. i think those are the issues that are going to decide the election. >> so you -- at this point, don't expect anything between now and when we know the two nominees, you think that it is pretty much settled, just from the numbers we have seen in the past, i know you were around -- >> well, you look at trump's pretty defined, biden and trump both defined, trump's way ahead in all the polls so like to say, okay, what's going to change? there is a lot of great republicans running and they all would be better than biden but right now, trump's ahead in the polls and have to say, all right, how are you going to have a better economy than trump, how do you do a better job securing the border, better job at

preventing war and those things are happening under trump and not happening under biden. >> well, all right, senator. other people think that there is, you know, a lot of overhang with both candidates and wonder, i don't know, how -- maybe out of 300 million people, a lot of people could be president. you're not headed that way, i guess. not at this point, anyway. >> no, i'm running for re-election in the senate. i'm running for re-election in the senate >> all right appreciate your time thanks, senator. in the next hour, we'll hit another topic impacting washington and wall street, a.i. intelligence and we'll have a senator from the other side of the aisle, senator mark warner will join us when we come back, the founder of instacart on the company's public debut and competition in the food delivery space. this is the guy who built this company, starred over 11 years ago. we'll talk to him. he's a newly made billionaire after yesterday's launch and later, disney doubling its investment in theme parks over the next ten years.

we will talk about the company's transformation initiative, the possible sale of abc and strategic partnerships for espn. we'll get to all of that with jim stewart. before we head to a break, though, let's take a look at the markets this morning so far you still got some green arrows, dow futures indicated up by 65 points s&p 500 up by 9, the nasdaq up by 33. "squawk box" will be right back. time now for today's aflac trivia question. what state is home to the biggest u.s. casino? the answer when cnbc's "squawk box" continues ok over our offic. and he's using it to send out medical bills. good hands! hospital bill for prime?! gaaaaap! did you just say gap?! he's talking about expenses health insurance doesn't cover. good thing coach prime knows about...say it one time! aflac! because aflac gets you money to help close that gap! now how do we get this goat outta here? (whistles) aflac! meet one of my new homies! gaaaaap! get help with expenses health insurance

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now the answer to today's aflac trivia question. what state is home to the biggest u.s. casino? the answer, oklahoma the winstar world casino in thwackerville has a gaming space of 519,000 square feet general mills just reporting earnings coming in at $1.09 a share, a penny ahead

the company said higher prices during the quarter helped offset lower volumes. general mills also affirmed its full year guidance as inflation moderated somewhat supply chains stabilized but an increasingly cautious consumer has remained resilient. still to come, with e're going talk to the founder of instacart after the company's public debut. disney will double its ten-year investment in theme parks, cruises and resorts in a big strategy shift that sent the stock lower. we'll bring you much more on that and the future of the media giant. stay tuned you're watching "squawk box" and this is cnbc ( ♪♪ ) morgan stanley is partnering with the women's tennis association to remove boundaries... ( ♪♪ ) because this game is for everyone. people are excited about what ai will do for them.

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marketing automation company clavio set to list shares on the new york stock exchange. the public offering is price at $30 a share, above the indicated range. blackrock and alliance bernstein agreed to buy up to $100 million worth of shares each that accounts for a big chunk of the ipo proceeds and the co-founders of klavvio will be joining "squawk on the

street" later this morning. instacart making its wall street debut, opening at $42, and came back down closing just 12% above its offering price of $30 a share. joining us right now is instacart's founder and its largest independent shareholder, apoorva mehta. and, apoorva, first of all, congratulations. this has been a long time coming, more than 11 years in the making i know that you're a billionaire now on paper, and i want to talk about all of that, but before we get to it, let's go back to the beginning and how you came up with the idea for instacart. you've been working at logistics, you quit your job and moved to san francisco and then what >> good morning, becky excited to be here after i quit my job at amazon, i -- the reason i quit my job at amazon is because i wanted to become a entrepreneur. and i didn't know what my idea was going to be so i moved to san francisco and i started about 20 companies

and unfortunately, all of them failed one day i was in my apartment in san francisco when i realized that all i had in my fridge was a bottle of hot sauce. and i love hot sauce but you can't make it a meal and so this was an ongoing problem for me and i figured i couldn't be the only one who suffered from this problem. this was 2012. and we were ordering everything online except for groceries. so i decided i was going to change that. i started coding the first version of instacart app and three weeks later, instacart was born >> when it was born, it was kind of a rough prospect at that point. i think you were doing the deliveries yourself? >> that's right. i was -- i was the coder, i was the delivery person, i was also the customer service person. i remember one time while answering the phone to help troubleshoot a customer's issue,

i totally had forgotten that i had a pot of chicken wings on my stove in my kitchen. and fast-forward 30 minutes later, unfortunately my kitchen had burned down and my entire apartment was flooded. so instacart's early days were very crazy but these were temporary setbacks and we continue to focus on building a great business >> okay, let's fast-forward to what we see today. the pricing came out, raised a couple of times to come out at $30 as we mentioned. the stock actually closed up 12% from that. that values the company at 12 or $13 billion. that's a big number but far below what it was valued at a couple of years ago had you took your last founding round it was then $39 billion there are a lot of questions asked, people wondering why did you go

public then. s they that's when you saw airbnb and doordash go public and both of those took off. >> all the markets have completely changed from a couple of years ago the macro environment has completely changed and that's also something that we do not control. what we do control is building a strong business with -- that is very durable and that's what we have done here i'm happy the company went public yesterday and i'm excited to see what the markets think of it in the future. >> apoorva, i'm asking because there were some investors like sequoia and others that were a little agitated by what has happened and by the fact that you didn't go public sooner i think michael moore from sequoia was one of the ones who was very agitated by all of that why didn't you go public two years ago? why did you decide to wait >> this was the middle of covid. our growth, we had gone from doing about $78 billion in sales to doing, you know, to growing over 400% year on year this meant we had to completely

reshape our infrastructure, we had to onboard half a million people in a matter of a few months to pick and deliver groceries. and this meant that we also -- we didn't have a cfo at the time, i didn't think it was the right idea and the rest of the board didn't think it was the right idea and very happy that we went public yesterday and excited to see what the company does in the future >> what does the future look like for the company and by the way, we should point out, you're no longer the ceo, you decided to step down a year ago. there have been some reports that there was pressure to step out. what happened? why did you leave that position and why are you leaving the chairmanship position at this point? >> so, i was not pushed out. i decided to leave on my own and i decided to step down because i'm a entrepreneur and i want to build another transformational company and i brought on the right

person to be the ceo of this company at this stage. i believe in her leadership. this allows me to really focus on my next venture that i'm very excited about. >> it is a healthcare venture? what are you working on? >> that's right. healthcare is, as you know, a very large industry. $4.6 trillion, incredibly complex but underpenetrated. when you think about it from an online penetration standstandpot it is similar to grocery, but it allows me to still have the beginner's mindset but today is about instacart, and more to come on the healthcare venture another time. >> we mentioned at the top you're officially now a billionaire on paper do you plan to sell some of the stake? what do you do with your shares? >> i'm the largest independent shareholder at instacart i'm proud of my position there proud of the company and i'm

excited about the vision and what the future holds. i won't get into my financial details at this point, but i'm excited about the direction of the company. >> what is the biggest lesson you took away from this for future ventures? this was 11 years in the making. my guess is it probably felt more like 50 to 100 years. what is the biggest lesson you took away? >> perseverance. i remember when amazon bought whole foods, this was 2017, 2018, and all the headlines said that instacart was dead. and -- because it sort of -- i understand where they're coming from, given amazon was our biggest competitor and whole foods was our biggest partner, our biggest competitor now owned our biggest partner. it felt like a gut punch i remember calling an all hands and bringing together the whole company and telling them that we

were now in -- that meant the only thing we would focus on is bringing the entire grocery industry online and bringing all -- virtually all the major grocery retailers online and over the course of the next nine months, the team launched thousands of new markets, launched instacart enterprise, and by the time whole foods finally left the instacart platform, we brought on virtually all the major grocery retailers to the point that whole foods was less than 5% of our revenue. and we learned a lot as a team during this time, and we learned how to persevere i believe it is just an incredibly important skill as an entrepreneur. >> apoorva, thank you very much for your time today. it has been great talking to you. congratulations on the ipo apoorva mehta. >> thank you thank you. >> thank you when we come back, james stewart will join us to talk

about disney's latest moves to streamline t bins.heuses "squawk box" will be right back. (ella) fashion moves fast. setting trends is our business. we need to scale with customer demand... ...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 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.

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climate week continues in new york city with a heavy focus on decarbonizing real estate, which means going electric diana olick joins us right now with more on the goals and on the grid diana, good morning. >> good morning, becky yeah, it is all about the energy transition this week who better to talk to than the ceo of edison international, owner of southern california edison i asked him given what we saw in maui and midwest if investing in electric isn't too risky right now. >> we understand the risks we already are making the investments needed to address them and we have a framework for doing that within the regulated compact. so i would say to investors, i do this all the time, right, that we do have that framework for sound investment we have a plan for what we need to do. and frankly we're leading the economy in terms of getting ready for climate. >> now, he said edison invested

$6 billion this year alone to strengthen the grid and make it more resilient to climate change one thing he can't fix, though, is the impact of higher interest rates on demand for renewable energy >> all sectors of the economy are being exposed to higher interest rates i would focus back on what the federal government has done already to try to help with that the tax credits that are embedded in the i.r.a., you know, provide good support and, yes, you know, interest rates are going to have an impact but we need to think about this over the long-term and so the fact that there is nearly $300 million that is being invested in the clean energy transition to the i.r.a. to provide support >> and he said the biggest obstacles are permitting and to get what he wants done in the areas he wants to do it in. >> just with interest rates, all investment is much harder. it is not free money, not easy money and that makes any sort of new development difficult. >> exactly and even retro fitting older development like here in new york city with local law 97, you have to decarbonize all the

office and apartment buildings, higher interest rates are making that much more difficult than devaluing the buildings. >> i guess the reason they're pushing for that, we heard this earlier in the last week when we were talking, one real estate developer, the thing they asked for is help from the federal government >> right it is helping. new york state has a lot of tax credits but it is a lot to do obviously. >> it is diana, thank you very much good to see you. all right, coming up, we're going to talk disney with jim stewart and b of a security strategist will join us with her new call futures ahead of the opening bell and ahead of the interest rate decision, they have ticked up a little, up about 83 point s. (sirens) [due at target in 5!] copy that. make a hard left down the alley. network's got you covered. [please confirm requesting back-up.] -changing route. -go. roadblock ahead. ...back up, back up... reverse! reverse!

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disney will nearly double its ten-year investment in theme parks, cruises and resorts to around $60 billion the move underscores the dramatic shift in the company's business model, which used to rely heavily on media and entertainment. disney stock is down over 24% since january. joining us now is jim stewart, "new york times" columnist i mean, i guess they're going to sell other things, jim, so the rumors are true, we don't know to whom or when it happens >> or at what price. as iger sort of shocked everyone on this network when he made

those comments at sun valley where, you know, suddenly he put on the block the core of the disney media empire including their once, you know, incredible cash cow espn. so, the question is, you know, we saw not too long ago that paramount pulled back and stopped trying to sell the b.e.t. networks. there doesn't seem to be a lot of demand for the legacy channels espn is in a category of its own. not clear they want to get rid of it entirely, they want to bring on partners and grow more of the sports gambling thing there is a lot going on there. but unfortunate bottom line here is that they're all diminishing assets they're deteriorating, i think, now faster than many analysts had thought as people move increasingly to streaming and as disney and its competitors still struggle to make money out of streaming. >> that's what occurred to me,

jim. they're not saying we're going to sell these legacy media assets and invest in streaming they said we're going to sell and invest in, like, physical experiences, cruises, and theme parks and everything and everyte so what -- how -- just media entertainment in the future, disney has no idea what we want or how to go about it. i'm not going to a theme park. i turn on my tv and look for entertainment. >> it is kind of a shot we're looking at theme parks as a part of future growth nobody has focused on theme parks for a long time. they have profited immense i

f immensely from the post-covid bounce back. a lot of families' top priorities were to get their kids to one of the disney theme parks and they have become much better at exploiting demand and adjusting price but they pushed prices up a lot. the anecdotal evidence has been recently that the parks are not full what do they do to make money in theme parks. you have to stoke demand, increase supply or raise prices in all of those so they're pushing on those levers but it's hard to see where they're going to go. they probably shouldn't have had a "frozen" attraction in there now. the crews ship business seems to be growing but team parks are not going to be some kind of perpetual

double-digit growth strategy what about streaming it's not looking good there. >> nothing's looking good. and if becky quick had ten things for a growth future, cruises would be like dead last, wouldn't it, becky >> i'm not everyone. >> she thinks there's noro virus on every surface >> i do! it's the same water! it's what's already there and there's 4,000 people >> parks i don't get but cruises -- >> parks you need to feed the beast with the new simpson's ride you can't use any of the old disney content because us all cancelled -- i'm plugging

universal. they're going to continue to feed the beast with new contest. is it lost >> i'm not going to go that far. with you they are confronting, you know, an incredibly difficult, you know, broad environment. and you mentioned making more mochies, more product. that's another challenge they've got. there's a lot of concern in here that the super hero formula has been getting stale, going on now for decades but that it recently hasn't done that well. so the the streaming division is also now in trouble. it's like there's nothing on their spectrum >> that's why it's $80 down from

200. do you remember when comcast bought universal from nbc, it was almost like the theme parks were like, yeah, we're going to get that, too. it turned out to be a great asset there were a lot of quarters where that was like a profit center, but it wasn't the rational for buying it in the first place and it's just so weird that disney will place all of their bets there. >> disney didn't buy espn either and espn was a great growth diver for many yoors and universal made the brilliant move of getting "harry potter" into the theme parks and disney left that slip out of its grasp. think marts is a solid business and it's good they've got the cash flew given the situation in

streaming. i think in both areas you canny them that willing with that's what that your wrestling with, the both topping off there but the fall-off as the streaming suggests that they're kind of hitting a ceiling there, too. >> i just don't know how we go from the golden age of content and it was going to last fref and every talented writer and everyone out there was just -- it was going to be the good time wore really and now their streaming doesn't work, legacy media doesn't work, everyone's on strike because of i.a it's a mess, isn't it? >> it's an industry upheaval we've been talking about this

this is one of the great disruptive forces in business history. it is a massive shift in this industry and that golden age was great and i think that's were the writers are upset now, that gravy train has left the station. it businessic economics and business you can't lose billions of dollars quarter after quarter. those numbers were staggering. i was kind of surprised that wall street was slow to react and they were racking up losses at billion as quarter, disney being on the forefront of that netflix is making money and i don't think we vet p have yet see them navigate to this much more tech-rhythmar

the demand is there. consumers love it. >> it's not like the auto history but you think are funding the transition to evs which nobody wants except for texas. and sooner or later you're getting rid of something and monetizing it and that's gone but the future doesn't look so great. you can definitely screw it up it's like the same thing >> it's like the i still love my cable, jim i p and i want i dough another book here. there is thank you.

get a.i. to do it. >> when we combae ck, why she's raising her year-end s&p target. "squawk box" will be right back.

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well, it's final liply hered day. wall street will be watching closely for any changes in the fed's economic outlook and it's projections. ahead of the opening bell, the futures are higher we're paying special attention to the 10-year, close to its highest level in yield in more than 15 years. and the ipo trifecta expected to debut this week, as the final hour of "squawk box" begins right now. good morning, everybody. welcome to "squawk box" here on cnbc we're live from the nasdaq

market site intimes square i'm becky quick along with joe kernen andrew is off today. here we go, it is a fed day. we're going to be getting this decision at 2 p.m. eastern points treasury yields at this point lock like they're basically where we've been for a couple of days the 10-year is at 4.34, two-year at 5.07. >> klaviyo, it will trade. ipo is priced at $30 a share, above the targeted range it's now valued at $9 opi.2 miln it specializes in making

automated business transactions. >> insta cart raised $620 million in that ipo. and neuralink is looking for participants in human brain implant trial. >> let's bring in senior commentator mike santoli what do you think of this it had. i think it's heathy they've managed to get out there and are decent pricing i do think it shows a general lack of conviction.

>> for the entire third quarter effectively you've been around the current level in the s&p plus or minus 3 1/4% now some things people are focused on is you did have this up trend since march, since the svb failure lows we've broken below that a little bit and maybe lost some momentum on that front. folks would look for something along the 430 level to say this was more than a standard, seasonal pullback. that would be just under where we bottom in august. other things we're watching, all the talk a oil general commodities, the move has been hired in the index, heavily influenced by energy we're not toward the 2022 high an aggressive move at the high

tend end of the arrange, such as treasury yields, ous prices, up. they're really focused on poor non-housing services inflation to see if that's going to continue to come down and help out their cause. now, the two-yield, that's where they get priced. this shows you the story in the economy for this year. remember the hot january economic data? everyone said, oh, no, the fed has to come a long farther about 5:60 in yield and. >> we've rebuilt expectations. we'll see today how they adjust that outlook and maybe

how many cuts they still project by the end of next year, assuming there still are some in there, becky >> okay. mike, thank you. obviously a lot riding on this before 2 p.m. but especially when you get the 2:30 conference call how are things had you hear from jay powell >> from the start of his tenure, they've been weaker than most ot others from the market the market-impolice department move was less than half a percent. so that's a small move on a fed day. i it also know that almost after every meeting since the fed started hiking in march of last year, the ten-rear later -- >> you're like a.

>> i don't think i've ever asked you a question that you don't have the answer to >> i'll make it up so that doesn't happen >> let's continue the market discuss. our next guest just raised their year-end s&p from had 46 and is veet a are you acquired to have price targets at your job at the -- >> i don't know if it's written into my contract but it's a great question we usually. >> it going to be raw. >> it says it's oot 4450

you need to raise it at this point. but you're 4300. was that from november of -- >> no, no, no. that was -- >> when did you go to 43 were you dragged kicking and screaming to 4,300, too in. >> no, no, no. we started the year more construct uf on stocks we raised it once during the year to catch up with the. >> where haven't you been? >> 236 -- >> no. >> you were above 4,000? >> we were above where the market was trading for this. so we were expecting a positive return but we didn't estimate the strength of mega cap tech. so that was our fail this year >> let's assume 4600 is what you see as fair value, it might be

good idea to stay at 4,300 so this is a choice you're making >> this is a very concerted choice because i feel bullish indicate toors for mid every day a new bearish narrative emerges, i any this are a that should be in mid caps stocks rather than bonds and other asset classes. one is productivity. i think that that has -- this a.i. theme is not just about a.i. and seven tech companies. it's about a broader efficiency-drurch earnings power for the s&p 500 that we haven't seen in a very long time >> good for companies but good for workers? >> if is dpd for workers think about it right now weep also have this

mini manufacturing renaissance going on we've spent ten years woefully underinvesting in manufacturing, but think about the grid, the infrastructure, all of the towers, all the spend that we need to support this a.i. boom that everybody's talking about that's stuff on the ground that is bullish for industrials, it's bullish for machinery, bullish for oil. even getting to net zero and decarbonization goals along the way. i think we're in an environment where we're all underestimating the bullish themes for the economy and stock market and just focused on the fact that you can get 5% on cash >> those productivity. >> who care. >> you have four more? >> i have four more and i hope i remember them up a and did -- >> you may have a rick perry move >> you're inform supposed to illuminate what is sentiment? sentiment is still very negative

on entities except for these mega cap tech companies. everything else is kind of neglected. i think what's interesting is the magnificent seven now take up over 40% in almost every fund manager's portfolio. >> how much of a risk is that for the broader markets, though. if that was the thing you got wrong about those being strong -- >> six out of seven of those companies we have buy ratings on these are fundamentally attractive companies, a i cording to our analysts. they are people who can make money and they can return cash in if he don't have as much growth i think what we saw with meta is a bullish sign for s&p duration

risk i was worried a lot of the stocks of back loaded. meta cut a bunch of costs, fired a bunch of people, did a huge buyback and pulled a lot of cash forward and returned it to investors. i think that's the saving grace of stocks is that companies have options. they can navigate. >> they responded to the changes. >> they responded to a change in macro, exactly that's what's really exciting about corporate america, they're adopting and spending in the face of higher inflation now. >> you also have strength from unions, though, two. >> uaw and -- >> so this is the negative headline that everybody's focused on but what this actually says and points to is an underlying shift from just financialin asset inflation that benefited luxury goods and markets to an environment where

we seeing a broadening of income, which is actually bullish for the cyclical companies in the s&p 500 consumer discretionary factor. luxury is your up. those stocks have done really well now come back to the u.s. and buy some middle-income spend manufacturing drives jobs pip feel like i sound a little bit like a politician but i think there are positive teams right now beyond. >> i like all of them. >> who got the energy department >> excuse me i foregot the energy department. >> i do think we're at a point where the market's hated the equal mark is pretty cheap

15 times that's not crazy expensive so i want to give you guys an example of a period that was great for equities and accompanied by very strong productivity gains if you think about the market from 1980 to 2005, we had massive labor efficiency gains we saw companies get very labor light, automation of the theme and over that period the mash returned 15 percentage points of total return per year. real rates were 3 1/2% on average. right now we're at 2 and people are stinging ut. >> and it's good that money has

a cost it removes all of the fake zahnby companies drifting into the. when we come back, mark warner to join us to talk about a.i., fresh off one hearing yesterday and one scheduled for today. we'll about a.i.'s implication for national security. future are still in the green. you're washing "squawk box" and this is cnbc that energy cannot be created or destroyed. (♪♪) but it can be passed on to the next generation. (♪♪) every day, businesses everywhere are asking:

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mark warren is urging the biden administration to boost the technology workforce as a.i. challenges become more widespread and yesterday the intelligence committee held a hearing on a.i. senator, i think you are right to think we need to have people who are better qualified, who have more experience in a.i. in

terms of helping out government and trying to make sure we're on top of all of this this is a serious problem in industry where they pay a heck of a lot more money than they do in government. how do you get the best and brightest to help coming up with these complex decisions and a policy that the tech owners can't agree on >> it was a pleasure to see all the tech leaders of civil society all saying there needs to be some level of government guardrails, maybe not full-on regulation so there was agreement there secondly, we're all kind of in that i think we may need to kind of monday shot-type experts all to come together to get this right. i can't think of an issue where the economics is changed more dramatically in the last ten months it used to be who had the most

data on the big compute with win. that meant countries who had very offensive tombs they could use with a. and we've seen even that model change. uae has built a large model for pennies on the dollar. this is a constantly changing field. let me quickly mention the area that your audience would be most interested in, the two areas where a.i. could have the moe. our honored public elections, the kind of doop folk and manipulation that can take place. the other is disruption in our public markets when we think about disrupting our public market from deep fakes and other tools, do we need a new law or do we simply need the weight over penalties this may become the

jenlts or low are and the example i if you shoot someone with a gun murder is an extra crime if it happens to be terrorist-caused murder not a perfect analogy but i do think we need to think about public trusts in markets and elections look, i hear you on the oppenheimer effect i think everybody is thinking more broadly about what a.i. could unleash, just like nuclear weapons unleashed around the globe. even if you get all the tech guys, haven't gotten anything

done even if we can get our political and political agree to we can't control what's happening outside our borders. how do we do this making sure we're not following behind and we can compete >> great question. as some of these people erase these models, they are duplicated by other nation states whan has for their do, the japanese have a completely different approach, for example, but on depp drop good morning. there are questions around bias and copyright that are huge. you're right, stow tar

maybe where woo on our public elections. you think most investors probably could and maybe we could start with those go as a starting point >> the question i would have, senator, in illinois are we allowed to have a cash bail for the terrorist murderer and not for the murderer or do we have no request do we both let go >> you are the expert. i'm not gsh. >> you can't ask for ksh anymore. >> it's a huge attack on the

market i'm saying there may be a need to jofr watt in where what's the there there? is there no question in terms of overwaiting in terms of extra penalty and i don't know but i do know that doing nothing is probably not a very good opg >> mark, while you're here, let's talk about a couple other issues first up, the potential for a government shutdown. do you think a shotdown happens in we had a report are who pg and you do get a shutdown for a period of time because of what he's hearing m the house >> yeah. i don't see -- i haven't seen this movie that frn so not only

are young people not working, but they're ultimately going to be paying, as well the folks who want to use our mags parks, shut down on medical research i do not get the notion of some of these house republicans who want to shut down the government and obviously virginia's were going to be hurt one of the most it like this sam at the very moment -- >> any redikss on your state in the elections coming up? glen youngkin wants to turn it red. >> i think we've rattled the coax on my or. >> and you are a form are ps

manw negotiations with the big three automakes are. we had an analyst come on this morning and said that he's underwait, at least two of this many he was upd he was saying, okay, the ask right now from the uaw, if you added the 32 work week, the reinstatement of retirement forecast and where around nearly $6 billion a year. so you're talking about negotiating if and it 1 1/2 to $2 billion he's worried between that and what the admission standard that they're going to be back in the

same position in 2007 when the government had it step in and that will many but the fact that if -- they workers did give up benefits we have seen great growth from the auto industry the last four, five years, we've fiend. and you've seen your salary increase about 6% i think there what it if and it also creates a big are question, which is something eye if right now we have a tax accounting and reporting system. you pend $5,000 from a poos of equipment, your piece of

equipment and they spent $5,000 training to train two machines to be better than ma ma frnl and in balance we still have our system where as always, capital gets precedent over labor. >> thank you for your time >> thank you >> coming up, we're going ask what could be standing in the way of a soflaint ndg by the u.s. economy wool be right back 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

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welcome back, everybody. we have news on apple and goldman sachs this morning kate rooney joins us with that we're learning what happened is apple and goldman sachs had been planning the launch of a stock trading future for iphones but that project was put on hold last year as stock markets turned south this is according to three sources familiar with those plans who asked not to be named because the discussions were confidential, sources telling me and our colleague that apple began looking into this in 2020. soaring retail investors were flocking to trading apps like

robin hood but markets were hit by rising rates and apple was nervous about potential backlash this was happening before goldman backed off from near live all of. bank's consumer efforts. so it's unclear where this project stands a the this point but a source did say the apple trading infrastructure is mostly in place should they decide to go forward with those plans. and instead of going forward with stock trading, apple and goldman moved to launch and the stock trading project underlined some of apple's ambition in consumer finance it would have added to the sweet of existing apple financial products powered by goldman. apple first teamed up to after that credit card in 2019 and now the savings account well

representatives from gold naup declined to comment on this. >> what's the relationship as something that's productive, or is this is a pretty strong relationship and one that they both value a couple of years ago there was a lot of fanfare around the credit card, consumer lending, buy now, pay later at this point you've seen a lot of the reporting that that relationship as least has slowed down in part because goldman has completely retrenched from the consumer banking business. going forward that begs the question of what happens to something like stock trading if it was an ambitious part of this plan that is no longer in the works, that has and is a

threat to names like robin hood sf squared >> kate, thank you good to see you this morning >> thanks. >> when we come back, leslie pickler join us on highlights of insta card's first-day of trading. and don't mus "clafio"'s co-founders. they will be live in the 10 a.m. eastern hour of "sawk quon the street." we'll be right back. stay tuned 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.

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all right, just five hours and change until the fed's latest decision on interest rates. central banks are are expected to hold things steady. he says there are four things standing in the way. joining us is the chief economic write are at the wall street journal. when he writes it, they listen

you concerned a lot of people recently when you said that, yeah, a soft landing always looks luke that in the even to nail that and that it was pretty elusive. why are you writing about this now? >> you look back to when you don't know if the fed has enough to tut it in. when the ball as in the air, a lat has it go right and a lot can go wrong i think that's where we ar right now. and the piece of just sort of many t what could go i don't think is thattin flig and you should have more concern about

reaction certainly racial onth other hand the fed could be the obstacle in that they're saying they want to stay higher for longer and that means maybe not easing as quickly, you look at the experiences we have. so think those are the two main concerns here. >> nick, don't look now but when people say volcker or had people say remember what happened back in the old days when we went to 21. %. it's different this time because people say, well, we don't have the oil shock. >> wait a second we do have the wang are starring to look a little carry and you

per state police maybe it will start to look not quite as durch as we thought it was in the 70s and 80s. >> that's a great point regarding stop-go. it assumes a certain amount of luck in 1982 inflation of still above 4% when he sort of called the dogs off and said all right, that's enough. he abandoned the monetarying a great counting because he thousand he had done enough. you can it and so i think that

is important what happens in the developments that are outside of the fed's cole could play a role here in whether we get kind of a mild recession. >> nobody's taking another quarter point worst case snare i don't next week we'll probably see a nird very mild ful and so it's hard at this point to compare this to the 1970s or 80s >> so your analysis at this point, is this an argument for the fed to stand pat and wait, look around, see what happens? >> you know, i think so. i think the question here is if you cause a recession here and you're had had because inflation

of my 15 -- >> you can say it's emboldened, too. >> people jewel jazzed vul kerr today because he fixed what would have been a woo, that's different from what woo it do you think that the fed is going to keep rates higher for longer? because there are a lot of market participants who aren't really agreeing with that, who think rate cuts will come as soon as early next year or end of next year >> it's impossible to tell you tell me what's going to happen in the economy. powell puts 50-points on the table and then we have a full-blown raucous the next day later. if you look back to where we've

been onnin in the market expectations new monththat's different. that's really the first time we've seen the market and the fed really on the same side here about, you know, when you hit the peak rate but how long you'll hold. so that provide as little built more tightening of financial conditions which, mortgage-year mortgage operate money in so this is a tinch environment. >> the or thung i'll ais that. in it's kind of like thinking that this isn't an at.

because you've also to the quantitative itsening. it's another they e. will it be interest rates or quantitative hiking? >> they've been pretty clear on this they want the interest rate tool to be the primary weapon here. so i think what they really want to avoid is having people like you and me sitting here before every fed meeting saying what are they going to do with the fed fund rate and what are they going to to with ball street but let's use a different term it's on cruise control we don't want people thinking what are they going to do with this tool and what that tool am, whatever the terms is in reserves with an $8.1 trillion dollar

balance sheet, we're probably not there yet. >> nobody gives yes or no on recessions, they get percentages. whether we have one or not, are you 37 -- >> i'm a reporter. i don't do -- i don't handicap these things it's not my job. it's not my job. >> how many different pronouncers have you heard of your last name i found five earlier >> i've seen tamaro. >> just say it with authority, that i it. if i say nick tem race are you okay with that >> my father might not like it but i always say it.

>> all right we win sfw that's what we thought thank you, nick. we do hope to use your name a lot with in coming up, much more on the macks this morning. the futures rout now up 87, nasdaq up 40 all this in a few minutes when we peak with stay tuned. you're watching "squawk box" on cnbc

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.

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welcome back, everybody. instacart set to make its debut, that was yesterday today is clavio's turn leslie picker joins us good morning again >> it's just day two for insta cart but already in the red this morning after a debut pop that lost steam throughout yesterday'strading day to clos 20% below the opening print. it is still trading above that $30 per share ipo price but the gap is narrowing they're down 5% in trading initiated with a hold rating say, quote, we think the next three years will be more difficult for growth due to penetration grains for online grocery slowing, rising

competition and an ad business that's reached scale and is in the flatter part of its growth curve. it was a little surprising given that the offering had enough demand that the bankers felt comfortable raising the range at the high end but investors didn't see much upside beyond 42 and flipped it pretty quickly. that dynamic didn't seem to have much of an effect on klaviyo pricing last night it priced above its boosting range for a valuation of $9.3 billion on a fully diluted ba basis, a greater than 2% gain would send klaviyo's rating higher than two years ago. klaviyo is a software company still growing at a pretty rapid clip with 54% growth it allows merchants to use data to send personalized marketing emails, text messages, et cetera, to acquire and retain

customers and those insights are generated through advanced a.i. and data science there are a lot of private software companies watching to see how this one does, making this deal a pretty important barometer for overall ipo activity, guys >> leslie, thank you were you wearing red earlier am i imagining things? >> i was i had a baby spit up on it, so i had to change. >> i get it. i get it been there myself. >> you have. i know >> leslie, thank you we'll see you later. >> i'm going to start paying more attention >> not likely. coming up -- i don't know if i had -- >> you may have your own spit-up on that. >> exactly coming up, what to watch when re a t onig bell rings on wall stetndhepeng day as we get set for the fed's decision a. from work. (glen) hey. that's my mom. (mom) i think i have a much better plan.

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as markets wait, our next guest says the biggest pain -- i'm the biggest pain -- the biggest pain trade is a higher terminal rate. let's welcome alexandra wilson, deputy cio of multiasset solutions at goldman-sachs asset

management continue to talk all assets, alexandra, but you are -- you're fixed income, head of global credit at mackey shields for a while. so, you are a bond and fixed income expert. >> yeah, i guess you could say that >> if anyone is, you are i know we use the term loosely i think if i were to just summarize your thinking, we may not necessarily be out of the woods yet in terms of the fed, of the tightening, of the having a recession off the table. >> yeah. you know, very much so like the market are expecting a hawkish pause today, and while you're seeing things be a little bit better on balance, there's an asymmetry in how they're going to approach this, in particular as it relates to being data dependent because we're starting to see things like oil prices come back up we saw what happened in canada yesterday. now, you are also seeing the reverse side of that where you saw in england, surprise to the downside so, yes, it's a very difficult

market to call it's hard to say exactly where they will be going but we do think that they will keep that hawkish rhetoric in place. >> even the news backdrop that we see, the union, the uaw, this makes for bumpiness in the data that the fed is going to try to analyze, but you think that risk is that they need to be more hawkish? >> the risk is that they will be, because the primary asset that the fed has is their anti-inflationary resolve, and they're not going to want to put that at risk, so we do think it's important to pay attention to that, and particular the markets kind of pushed that to the wayside, so while it's not our baseline expectation for the terminal rate to go up materially higher, it's a big risk, in particular as it relates to how people are positioned >> so, the -- so, they have to talk tough and look tough, even though they're not acting tough, but that can be self-fulfilling in the markets the markets can pay attention to

how they're acting and maybe then they don't have to do more? that's very strange. but all markets are psychology anyway, aren't they? >> yeah, there's a huge psychology to the markets. one of the things as it relates to the pain trade that we talked about, and this is, again, it is not our base case scenario, but if you start to get anything in the terminal rate that goes up to 6%, we do think that that brings things somewhat to a screeching halt because of the psychology of that handle of six, and that will cause consumers and corporates to completely re-evaluate their willingness to do things >> and you didn't even breathe the word seven or the word eight, and we had nick on, and we don't talk about volker anymore, because we've decided, no, nothing's the same, and then i'm suddenly looking at oil. i'm suddenly looking at wage price possible spirals, and we don't know we're not going to 7% in two years or three years, do we >> i don't think you can say that with certainty. i think your point is very valid. one of the things we've been focused on is that next year

will be anything but average, and all you've seen is both economists and sell-side analysts reflect back to say probabilities are lower. in fact, we've seen some probabilities that are the long-term average of recession for next year, and for us, it's just hard to square that >> you think it's more likely than average that we have a recession? >> yes >> stocks aren't cheap >> they are not cheap. i mean, it depends on what blends you're looking at it from, but if you're looking at it versus bond yields, you're actually at the hundredth percentile in terms of valuations in the earnings yield gap since 2005 so, you're not getting paid a ton to take a tremendous amount of risk right now. that being said, a.i. could lead to the investment and productivity to really keep things on the upswing, in particular as you start to see breadth across the index >> that's something you didn't think you'd be saying a year ago, isn't it? >> that is very fair but one of the things we -- >> i just mean, suddenly, a.i.

could save us in terms of productivity that's amazing, isn't it it couldn't save us in the '70s or '80s so we really have to think about technology and how that bears on the economy and productivity >> yeah, absolutely. and in fact, we're doing a lot of bottoms-up single-name analysis and when we look to allocate in our portfolios, we're very focused on active management and their ability to do that and really differentiate because you have seen a rising tide lifts all boats, and so we do think the next couple of quarters, you'll start to see some of the rhetoric come out of, we're an a.i. company, and you'll start to see who really is and isn't >> have you been on "squawk box" before >> i have. >> we like having you in studio. >> maybe it's it goldman-sachs finds -- there's a reason they're preeminent. they found you at mackey shields? >> that's where i was before joining. thank you. >> goldman-sachs, that's why it's such a good firm. am i allowed to say that

is it a giant squid? depends on your perspective. >> i think for people who follow the markets -- >> goldman-sachs there's others i don't want to just single them out, get in trouble, probably. good to have you on. >> thank you so much for having me >> it is time to go. watch at 2:00. watch for the rest -- don't change the channel >> make sure you join us back here tomorrow. >> leave it on overnight >> "squawk on the street" begins now. ♪ good wednesday 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 fed day has arrived. decision at 2:00 p.m. eastern, and with it, some optimism for the equity bulls futures are green as yields come off these cycle highs. ten-year, 4.34%, oil is down, uk cpi runs cool. our road map begins with the fed expected to stand pat on rates today. and speaking of