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 forecasts,

bank of america hiking its year-end s&p target to 4,600 it had been 4,300. also ahead, sources are telling cnbc that apple and goldman-sachs have been planning the launch of a stock-trading feature for the iphone project was shelved last year after the markets did turn south. >> could have worked on it mitsubishi >> you worked on it yourself >> no, i'm just going to make up a series of things because that's exactly what's called for. >> we'll get to it with kate rooney in a minute let's begin with the markets ahead of the fed decision later on today are you encouraged at all by some of the action this morning? >> look, i think that if you don't have a -- if you don't have a rate hike, and he talks tough, everyone's okay so, if he talks anything less than tough, then we go back to that scenario where there's that holy 13% you get when they're done i think there's a perspective

that longer, higher, whatever, take off the higher, maybe a little bit longer, but there's a sense that the "don't worry, be happy" s&p target piece by bank of america, which made me feel so good. it was like a gummy. you know what a gummy is >> a gummy >> yeah, i do. >> i decided i was not going to go with an nfl reference >> you could do endorphin drip, something like that. >> okay, i don't know what these are, but i know. >> savita has a way of making you feel like everything's going to be okay >> i read this and i said, this is kind of -- it's not like tylenol extra strength it's better than that. >> oh yeah >> yeah. >> she goes from 4,300 to 4,600. basically, she says you want the spw. you want the equal weight because that's where sentiment has stalled out the most >> let's open this to everyone who hates stocks i've been with probably, i don't know, literally ten ceos, and man am i tired ten ceos in the last week and

all of them have said the same thing. what's wrong with the market i kind of hate it. and this really captures -- this piece is good research, and now, she was on -- >> she was on "squawk box. >> she's very strong strong piece and you know, u.s. manufacturing renaissance, i was talking to the people in the commerce department you definitely have that i still don't like this -- what's happening with the strike if they cave, you got a remarkable situation, and immediately wages go up for a couple hundred thousand people >> did you happen to see the piece today on the productivity of the factory workers, manufacturing, and how it's not been particularly good in the united states versus so many other countries? i thought it was an interesting addition to the debate here as we -- as obviously the back-and-forth continues over higher wages >> that 32-hour workweek >> not to mention ratner in the "times" saying uaw is overplaying their hand >> that's the first guy who said

it, and i think they're really overplaying their hand, because there are options. there are options. these companies are not pitiful, helpless giants. >> no, you've made the point that there are many options, and over time, you could simply move more manufacturing to mexico that's basically what you've been saying. >> look, i was part of a strike unit that came into a textile company in 1977, '78, and we just -- we had them on the run i mean, i was absolutely sure we would get a giant increase, and one day, they said, you know what you guys win, but we're closing the factory. whoa don't rule that out. >> that's an interesting point as carl says, ratner was the car czar at that time, overseeing the restructuring of gm and the old chrysler when the united states, by the way, became the largest single shareholder of both, if you recall. >> could be a pincer move. get shawn fain, and he goes further and further, and then

you find out how much the rank and file really like him and then you say, you know what? we've got a fabulous plant in pueblo it's going to take us two and a half years, but we're going, because they saw, david -- they saw david faber's piece about musk and recognized that as larry ellison said, we have no people i'm changing my whole attitude i listened to larry ellison again. people who don't need people are the luckiest people in the world. >> that's terrible barbara's going to call in >> barbara loves the stock market i love barbara i got to meet barbara once, she -- >> she used to be a fan of the old "squawk box. >> he's the a brilliant person she trades real estate there isn't anything that person couldn't do. she's not from queens, you know. >> no, she's from brooklyn >> thank you >> we don't use robotics as much in our factories either. >> no. >> as, again -- i'm referring now to a "journal" piece today that i just thought was interesting. >> people make mistakes. but i think the more we talk about the strike -- >> by the way, tesla uses more

robotics in their factories. >> no kidding. when i was looking -- >> it was incredible >> the stunning background of your interview, maybe we have a screen shot of it, i didn't see any humans >> there were. and there are plenty >> really? >> yes >> what do they do >> they make sure everything's working properly >> oil me? >> there are plenty of workers at a typical tesla -- by the way, though, their most productive plant is in shanghai. that produces more autos >> they just crossed the 2 million mark >> berlin now. >> you look at what -- i went to the bronco line-up i went to the one that they struck bronco's incredibly popular. everyone that came off was already spoken for, so it's not like they're going after some line that is a waste of time it's not like what disney did when they cut out those network -- those stations that nobody cared about i'm just saying that this was -- it was not an idle strike. people think, it's not the f-150. well, the bronco is an impossible to get vehicle, so

they are hitting, and if they spread it, then at a certain point, i think jim farley says, you know what? my grandfather worked on the line i'm a ford guy you people are not ford people you're not you're some sort of agency that's come over and taken over this union, and you do not represent our people, and then they put it jump ball, and then they just say, lockout now, i've been saying this lockout only because -- >> i know you keep saying it >> it's an existential crisis. if they give, it's 80% increase in what they have to spend and then they can't go ev. what if california says, you can't sell i.c.e. engine in our state? you know you got something on your shirt, david. >> oh. what is it >> i can't focus anyway, i think that what happened -- i couldn't focus what happens is that farley just says, you know, guys, we're --

we can't do the i.c.e. because of california changes and we're out of business. >> all right, well, we don't know when that day comes it's not near. >> right well, president biden's coming out there, and he's going to really stand with -- he's going -- >> he's not, though, is he >> i think the white house is pulling the plan >> going to stand with bill ford for the right to be rich versus labor? no he's on the wrong side of history in terms of, like, what ford's trying to do with ev, and it just is amazing to me that they haven't played the ev card at all not once is anyone playing the ev card, the transition. >> we'll watch it. ford did get a deal with the canadian auto workers, avoiding a two-front strike let's get to goldman and apple, sources telling cnbc they had been working on a stock-trading feature for the iphone kate roonny has that for us. >> apple and goldman, they had been planning that launch of

that stock feature for iphones but the project was put on hold last year when the markets turned south this is according to three sources familiar with those plans, sources telling me and our colleague that apple began looking into this with goldman back in 2020 by 2022, when this was on track to launch, markets took a turn and apple feared its users would lose money in the market so they were worried about potential backlash, so instead they moved to launch that high-yield savings account. representatives for apple and goldman declined to comment on this story the project highlights apple's big ambitions in consumer financing would have added to that suite of existing apple financial products powered by goldman. this was happening in the heyday of goldman's consumer banking ambitions. unclear where the project stands at this point. one source described it as being on ice another tells us the infrastructure is mostly in place should apple decide to

ever go forward with those plans, guys. back to you. >> kate, thanks for that it's a good set-up for discussion about both apple and goldman as we got greens guy in the mix today too. >> my sources -- i'm not going to disagree with that story, but i will tell you that when i speak to people at apple about it, they don't want anything that could cause a loss. they were going with buy now, pay later. they don't have any losses at all. this, conceivably, could cause a loss but it would be put on goldman's balance sheet, but i don't know how seriously this was discussed because when i spoke with them, they didn't think it was an imperative >> meanwhile, goldman continues to retrench as we know the firm is determined to do when it comes to consumer, which never really amounted to much of its revenues but certainly has occupied a great deal of time and effort and questions from the media certainly. you know, green sky obviously purchase that they wish they'd

never made and now we're in the process of selling unclear where it's going to end up bloomberg and the "journal" reporting a handful of different names. i'm hearing apollo, perhaps, maybe a blackstone also had some interest we'll see where it ends up that's not really the key part of the story what is is, of course, this continued retrenchment i asked david solomon about it and he was very blunt about and trying to defend, essentially, saying, hey, we try something, it doesn't work, and we move on. take a listen. >> we made a decision, you know, six, seven, eight years ago when we started this, seven, eight years ago, to also get into credit for consumers, and a variety of things that have changed, but we think that we shouldn't enter that space as aggressively >> what are some of the things >> i think the regulatory environment has changed. i think that scaling those businesses, you know, in this environment is a little bit harder than it might have been in a different environment and so, we made the decision to

pare it back what i hear from most of our investors and shareholders is they admire that we tried something, and they also admire that we quickly made the decision that we didn't think it was working the way we wanted to pare it back and make a change, so we made a change. we're very, very focused on our core business of banking and markets, which we've grown really nicely. >> there you go. >> it was just the first loss is your best loss because when it was first -- they didn't buy green sky that long ago. couldn't have lost that much value so quickly >> you would imagine they didn't i don't know where the numbers are going to end up here fairly robust auction, at least. some interested parties, some groups >> i've confirmed that story is accurate, but what bothers me is that what kind of -- i mean, are you in that much of a hurry to prove that you're not what you went into, that you couldn't get a better price >> if you made the decision to get out, get out why wait >> it might be worth more. i'm not saying that they

should -- i'm saying that maybe give it a little time. david, there's an outfit ringing the bell and there was an outfit that came public yesterday >> klaviyo is ringing the bell and going public today >> whoever buys green sky, they merge it with some other -- some lending company, and it comes public and we can't hear from 9:28 to 9:42 because they bring people from outside and everyone's so excited, and we call it sky's the limit.com. >> i like it >> i'm saying they wanted it off so badly, and they offset with gains. but whoever buys it, we're going to have to sit here and say, wow, did goldman ever get fleeced. maybe it doesn't matter. mayor they're making so much money and they wanted to change the profile. >> they're making more money now and certainly will in the fourth quarters, capital markets seem to come to life. the private markets are very important for goldman. m&a is still in the doldrums, although i am starting to hear real signs of life

but besides the ipo market, they were lead on arm, they were lead on instacart, and klaviyo too, right? >> it's interesting, they bring these deals, and i don't know if you notice, instacart opened at a high and has come down >> cinstacart, what do you think of that trading yesterday? >> suboptimal. >> you called the company superfluous yesterday. >> it is superfluous food prices are really high, so all i want to do is tack on a little more. general mills. cereal's going up. >> not another blue apron, though, is it? >> they split the stock. that was like 180 for 1. >> we had the ceo at this desk and after a while, i think he kind of gave up after he asked him -- >> he gave up. he said, you know what you're right it's kind of a green sky like, green sky. the guy who sold green sky got a lot of stock for them. there's a guy who did well right? fool me once you were at goldman. i mean -- >> excuse me >> you did the character story

you did the great interview. >> oh, thank you. >> you didn't do -- you mentioned it you took a beating from this guy. >> yes, they will have taken, most likely. we'll see what the price is. >> $500. >> $500? >> no, it's what you said. >> wait, what? >> i'm saying the story this morning is accurate. that's what i'm saying >> i know it's being sold. yes. >> no, the price is accurate >> okay. >> we're going to watch certainly cart and arm and klaviyo, ringing the bell this morning. we'll talk some oil. got some reactions here on where it's headed from goldman, jpmorgan, and of course cramer last night we'll get to comments from the b of f ceo on the consumer, general mills and cody, and calls on disney, pins, and dollar general 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

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the bottom line, the charts interpreted by carl garner suggest oil could make a run for the low triple digits if it clears this final hurdle around 92 bucks but based on everything else she's seen, she doesn't expect hundred dollar oil to be particularly sticky. in fact, garner would turn bearish the moment we hit $101 plus a month from now the seasonal pattern turns against crude so as she sees it, there's likely one last link higher before the relentless oil rally finally fizzles. i'm concerned because i think that's going to cause a lot of chatter about how we're about to go finally right through the moon these bulls can't take it. these different analysts at all these firms, all of them are going to come out of the

woodwork and say we're going to $150 >> there was jim last night breaking down the path for crude. kind of rhymes with what jpmorgan and goldman are saying there. >> look, carly garner, just so you know, she's a great technician, and she called the top exactly last year, so i went back to her, and she said, look, we're going to revisit that top, most likely, because there's still a lot of buying going on by big speculators who do matter the united states is still not providing the additional oil, but what happens is the cure for higher prices, high prices, is higher prices. >> right >> and so you will see these guys break ranks, typically, at this price >> yeah, we had kaplan on, the old fed -- he's not old. >> he's very smart >> the former fed texas -- dallas fed he was talking about, you know, the energy transition, which of course they talk about a lot down in texas, especially. remember being with exxonmobil

during the period of time when i was doing that, and how long it's going to take and the fact that we're going to be undersupplied for a longer period of time >> we are. >> even though we're at highs in terms of production, we could be doing more, at least that seemed to be what he was saying >> we're certainly not drilling more, because everyone's trying to -- the discipline in the permian is incredible, that these guys aren't breaking ranks and starting to drill more, but they pretty much had their fixture of what they were going to spend and they're not going to spend more, but they can go after -- there's certain already-drilled wells that they can start selling. in the last three weeks, the data from the international agency shows there is pickup but not enough and it is incredible to me that the saudis, it's like, do they want to elect a republican because the saudis are making -- they're the ones that i would say are keeping the oil too high do they want to elect trump? good answer. on the podcast, you'll

absolutely shut me down. >> i mean, ex-recession, they're holding back on production by the most in a couple decades >> i think it's extraordinary. and they -- look, this is an election issue i mean, gasoline is historically been an election issue, so it's something to monitor, but i thinkoil's going higher. >> it will be an issue soon, politically, if not already. we'll get cramer's "mad dash" when we come back, talk a bit about the effect of higher gas prices on the consumer 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.

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i'm maría alvarez, owner of maría's cakes. and i'm axel, proud to be her state farm agent. her baking superpowers have brought sweetness to our community. i make delicious cakes to make special occasions even better. maría doesn't just bake; she also creates opportunities. small businesses like maría's, open doors for communities to thrive. support your community. support small business. welcome back time for a "mad dash." we've got an opening bell six and a half minutes from now. it's going to get loud here, by the way, with all these employees from klaviyo i think they have at least a third of the employee base here.

let's talk a little dollar general. yesterday, we mentioned target, which has been quite weak in terms of as a retailer and the stock price. this thing has been ugly >> now, matt boss, went to talk with him, and david, they had a fireside chat. they went from hold to sell. highly unusual this is dollar general's core low-end consumer is already at a stress point the middle income is not going there. >> now you tell me, jim? now? >> okay. if you talk to matt, he's not been really recommending the stock. like, you know, did he have a sell on it no he was saying, this is not one of my favorites. it isn't like he was pushing you in it and now he changed his mind >> but now he's saying, actively avoid it, maybe even short it? >> look, i think if you're a hedge fund manager and you got this report, you would short it. >> what's the issue? >> their customer base

their customer base is just really, really hurting and they're just not delivering anything that i think is that valuable, but materially elevated levels of shrink. this is the stealing thing again. >> they got the stealing thing why is their customer base hurting? people are employed. >> because of the student loan comeback it's very interesting you say that, because higher fuel prices are being pointed out as something that is hurting their bottom line. student loan repayments is hurting their bottom lines excess savings for the middle income cohort on pace to be depleted by the owend of fall '. that's different from the mastercard data that shows that won't happen, but this is a really bad situation okay and i -- i don't know what to say. >> well, you don't have to >> i've known that for many, many years and i've not seen that go point-blank and say, sell >> wld gt too. iou not own this after --

i'm not -- >> we got to go. we got to go

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got another ipo to watch today. marketing automation company klaviyo going public here at the new york stock exchange. pricing at $30, around a $9 billion valuation numbers that kind of sound familiar this week, jim. >> well, look, this is enterprise software, and there are hedge funds that have made their careers on enterprise software and buy every one of them to me, this one feels a lot like salesforce meets -- when salesforce put exact target in indianapolis and merged that with cap low, and then throw in twilio for messaging it's a one-stop shop it doesn't matter. that's the whole point get three in a row, price how it works. david, it's important for everybody's numbers. >> it's going to be very hard to hear each other. [ cheers and applause

>> let's get the opening bell and the cnbc realtime exchange at the big board, as we said, marketing automation company, klaviyo. celebrating its ipo. we'll talk to the cofounders and ceo in less than an hour at the nasdaq, sigma lithium, maker of ev batteries. [ cheers and applause >> "squawk on the street," "squawk on the street," "squawk on the street. what do you think? no all right. general mills. i want to talk about general

mills for a second it's really important. there is a trade -- i don't care i'm going to talk over this because i know people can hear me there's a trend that is out of control now about people not spend on their pets. they're not spending on premium food now, we saw the good people at smuckers sell part of their pet food we saw a note last week. there was a downgrade, david, you want to talk about downgrading low? of chewy today and general mills is saying that the consumer's buying value or, you know, price packs. now, what i think is most interesting is that i'm not hearing a whiff of complaining by the dogs. not one. david, the dogs have not complained they're hungry, and they don't care >> right general mills has benefitted from raising prices overall, correct? >> and a lot of them are

sticking but you know what? they're sticking right now costco has gone after every company, is going after every company that hasn't rolled back prices, and i think, carl, other than coke and pepsi, they have been able to duplicate what everybody does and charge a premium for it because they make premium food, and it's still underneath them. so, i've got to tell you, if you're going to sell to costco, i would be very concerned about not rolling back prices. you better roll them back, or you're not coming to costco. >> it's kind of hard to talk about anything other than klaviyo at the moment. if we were judging the ipo window by volume -- >> it's obviously a 12th man situation, the bell ringing. >> a 12 what >> this is a seahawks situation. 12th man >> the crowd noise, yes. >> this crowd is very, very good the 12th man, by the way, when the cardinals played the giants, it belonged to the giants, which

i thought was interesting. but again, enterprise software, i'm a -- literally, enterprise software, i'll buy market buy i'll take one fifth. now, david, this anchor tenancy, that usually was a mall concept until the ipos, the bankers decided, let's make them work. >> we saw it with arm, with some -- what they call these cornerstone investors. we saw it again with instacart to some extent in fact, we pointed out with instacart many times much of the offering was already going to those, and therefore, you only had $200 million of stock being sold broadly by the way, that changed hands yesterday numerous times, given the volume and the actual stock that was available you can see what's happening with instacart, though >> well, it's not. >> after that first trade, it's been nothing but down, jim. >> i told you that this is not the right time to have an expensive service that makes it

so that you're paying more for food when a name you referenced by the fed today, how much food prices have just -- as you pointed out, david, they've not gone down. >> well, the -- the general mills and mcmillan and kroger have all talked about moderating inflation. >> the thing is, when you look at the store brand from walmart, which i know, david, when you buy it, it's every bit as good like, when you get those canned string beans that my mom used to serve, david, we could do a taste test you would never know the difference >> between them and the -- and just string beans that i would buy and cook on my own >> yeah. >> i see >> tradedown >> why not what, are you embarrassed when you get in line? i wasn't embarrassed not like when i was shut down for my kohl's credit card, which was completely embarrassing. >> that's one of my favorite stories. >> i couldn't get kohl's cash. it was like confederate money for me >> that was embarrassing for all of us, jim

>> it was. notice, did you see the mortgage application, david, today? plus five. >> little refi coming back >> go back to lennar too refi, absolutely >> with a 30-year fixed at 7.31%. i think there's -- i know. well, one of the things that lennar was telling me is that the consumer is ready to pay more, and understands they have to pay more. at the same time, they only build 1.2 million houses that's like a fraction of what we need. we need two million houses in order to get the price down. we're missing 800,000 houses but there just isn't enough land the environmental issues david, it's hard to build a home in this country. >> it is interesting "journal" story today that it's also -- even those big institutional owners of homes, invitation homes being number one, i think, having a hard time these days buying new ones and in fact, have been selling some out of their portfolio because it makes sense to do so. because you can sell at a so-called cap rate that's very low. >> what's happened is that, let's say you bought a

hundred-acre parcel, and you would do ten-acre single family, which is huge. the hold-up is endless endless. >> yeah. >> so, i mean, this is not something -- i think people just felt they could turn on the spigot these companies really understand how to get through the loss, and it's just taking forever. so, they're not able to capitalize off what's happening. they just can't. >> all that said, the cfo of bank of america spoke today, said it's hard to see a recession when consumer spend is still growing four-plus year on year not seeing any asset quality issues yet loan growth has been a little disappointing. take a listen. >> right now, when we look at our credit card and our debit card payments, people buying things in their everyday, we can still see elevates the consumer buying behavior up 4% year over

year that's come down very considerably the fed is having a desired effect it's coming back to something that we would view as being more long-term trend, more normal and the consumer spending, 4% more year over year. that said, it's difficult to see a u.s. recession when the consumer is spending 4% more year over year so, you can sort of see why people talk about pushing out the recession longer in the united states. consumer's still in very good shape. commercial's still in good shape. and there's some signs of slowing at the margin, but the economy's still in a fine position >> they're spending on amazon and walmart, not a lot of other stores they're still going away, but not as much as they were going away it's not as easy to find where the spend is, but david, it's important that you understand that alastair borthwick is an insane eagle fan >> i have heard that

i've heard that he's as big as or bigger eagle fan than -- >> i'm not going to disagree with that. he's also an incredibly cool guy. i said, this is the new rap. spend is okay, but we can't find out where they're spending we look for it is it carnival is it -- i keep coming back to amazon and the number of people they're adding amazon is just where -- amazon has become the de facto, and when i saw the dollar general sell, i would have thought that with the tradedown, they would be the ones. no i just think it's just amazon and walmart and costco >> amazon adding 250,000 more workers. >> more than last year >> target added 100,000, similar to last year >> but amazon -- >> quarter of a million people even if it's only for a couple months, that's a big number. >> i don't know. where's amazon where's jassy going to find them >> i don't know that jassy's out there looking specifically

himself. >> he's out there trying to watch a giant game maybe he's got the package, because you can do that four box. >> it took a while, but we got to the nfl references. >> we got the football >> in abundance. >> we threaded that needle >> it took about a half hour and then they started coming >> maybe, jim, they're spending at wing, upgraded today by wedbush. maybe pins, two upgrades today >> that's why i have wings top one tonight. what people don't realize is wing stop -- a lot of people are talking about they know how to moderate the price of wings. wing is franchised you've got to come back to planet fitness what happened at planet fitness? apparently there wasn't a lot of growth in franchises now, i once asked wingstop whether i could have a franchise. and they said, sure. show me the other ten franchises that you run they are -- you've got to have a really good record at a mcdonald's or a burger king in order to get a wingstop franchise, and i don't think people realize how lucrative they are, plus they're putting ads behind -- i wanted to say

where they're putting ads behind, but now i can't. where they advertise a lot >> why >> because you're going to get mad at me. >> football. >> oh, gosh. football >> you broke him, david. >> i know. now i feel terrible. >> i'm housebroken like a pet. >> it's okay it's okay. the eagles are 2-0 >> thank you, blue buff. i'm not kidding, borthwick sat next to me he's got a british team or something. he was hard to hear over >> jim, on chips, we got the upgrade of micron the other day. today, two bullish notes on western digital. >> we have the intel meeting yesterday. >> that's right. >> that didn't go well, frankly. >> well, they scared people about margins to a certain extent >> that's all they care about. >> did an interview with jon fortt later in the day yesterday on cnbc. gelsinger was still talking about staying on, plan for the next generation.

>> he bought a lot of business that's an expensive proposition. >> what does that mean >> listen, we'll sell it to you for much less than amd western digital, periodically, either there's a takeover rumor, david, since, what, 1998 >> '90s, yeah. >> i mean, you know, it's going to get taken over. >> one day, it will. >> when you're a hedge fund, this morning, western digital this weekend it's like, i remember western digital at the end of the year on, like, december 31st at 5:30, they preannounced the bad number what quarter does that belong to the next group of lps or this group? do i like the semis? i think the semis are all prepped for the end of the worst pc drought in 30 years, which is rather amazing >> i'll tell you one thing we started the hour talking about the b of a target upgrade. a lot of that's based on

investment, a.i., and infrastructure and caterpillar, one of the best-performing dow names today after that deere downgrade yesterday. >> and the deere downgrade was interesting because we were supposed to have a super cycle in food. david, when you hear super cycle, remember that one two out of three went bankrupt the kohl's super cycle all three went bankrupt. the food super cycle, because 13% of the calories were taken out because of ukraine and russia it turned out to not be a super cycle. >> no. beware the word super cycle, i guess, is thel lesson from today's "squawk on the street. >> absolutely. but caterpillar, the short position in caterpillar, you know, jim uppalby, see where the "j" is that's where jim came to a -- actually to a broker that had a neutral on it and basically said, guys, you're going to be dead wrong the infrastructure money that's coming, that's what matters, and look at that look at that

you have to believe. >> meanwhile, isn't it all about a.i., a.i., a.i., a.i. >> not with them >> but in general, for this market i mean, carl mentioned it in terms of the b of a outlook and it comes up so often for so many companies that are not at the heart of it even at this point but that are looking at generative a.i. and what the implications will be and how it can aid their productivity and when they're going to be able to commercialize certain products associated with it and/or use it internally >> let me give you the use case that i keep hearing. so, you're -- i don't want to use a particular bank. you're the bank of cramer. community bank of cramer you can go in and you can say, all right, look, i want to lay off people i don't know who to lay off. i don't know what levels to lay off. here's my table of employment. and it will come back with a number and what you should -- who you should lay off it has that. >> right >> that's a pretty good use case, because efficiency matters tremendously >> efficiency does

at some point, you're going to be able to have a personal assistant that really knows how you think about everything >> it has it right now it has tremendous data, and i think that if you're a major banker, and you're trying to figure out how to get that ratio good, boom, a.i. will work for you, and i think people don't understand, that's happening right now. >> you're into the long-term productivity bull story? >> absolutely. >> that's yardeni 1.0. >> they have all the data. they have the training data. you can ask low code/no code, ask, as i just asked, and you will get an answer, and you will have a benchmark of who you have to fire, and it will -- it's based on everybody else. i don't think salesforce would disagree with that, and they work with a lot of the big banks. so, yeah, i mean, the use case is rather amazing, and it has to do with finding out what everybody else is doing without -- it's anonymous and doesn't say, listen, bank of america is doing this, but you have the right data, and the data says you can fire all these people and you'll be fine.

i think it's pretty imperative that banks do it >> my understanding of the banks -- a couple of the big banks that i've spoken to, they're testing generative a.i. internally at this point, but they have yet to really roll it out to be something that's part of their daily -- >> but i think it's happening now. they're all looking at it. >> yes, without a doubt, they're looking at it. >> no one's ignoring it. >> everybody's experimenting with it, which all goes back to the case for why the market may ultimately be big enough to accommodate nvidia and amd and even one day an intel. >> you know that the rap against nvidia is that they're charging a great deal >> well, why wouldn't you? >> exactly right that's what i said but i saw frank slootman from snowflake getinto it at his investor conference with jensen, basically saying, look, we're charging too much, and jensen saying, we have to get our investment back. and then, frank saying, well, how about a coupon >> listen, i mean, i'm the only game in town right now, you

don't like it, sorry you're out of luck >> what if they come up with something? >> then nvidia's going to have to lower price or they're going to start to lose share >> well, look -- >> that's the hope, right? >> nvidia is down a hundred points you spend a lot of time trying to figure out why, and the answer is that there's a lot of people who are upset that they charge so much, but why not? >> yeah. amd, by the way, is the best name right now on the mdx. that's interesting to watch. jim, cody, we haven't mentioned raising their sales growth guidance for the first half of next year. they wigo to 10 to 12 there's another bullish vote for the consumer >> i agree, but last year, e.l.f. was down the most it's been in ages estee lauder was down a great deal, and a lot of people feel that was related to china, so coty is actually the outlier >> we didn't really mention, uk cpi coming in quite light, and now we got some different odds on bank of engd. >> i was watching frank holland

today, and i said the opening has been so controlled by europe, i think we can get a pop just off of england, and people don't realize how much the first hour is controlled by the book being sent over, but it was very, very positive, and when we get, like i say, the semicap equipment, which has been a real dog business, well, it's doing well we need aerospace to do well, david. we need infrastructure to do well >> okay >> we need banking to do well. >> okay >> we need tech to do well, and then we're off to the races. >> anything you missed there >> it's a good early cycle playbook >> exactly right and if you read the bank of america piece, that "don't worry, be happy" piece, you would feel so much better than you look, certainly. >> thanks, jim >> you'd be feeling as good as, say, the dolphins. >> right what exactly are you wearing >> i'm wearing jeans and a very

sporty sport jacket. >> it's a great blazer i like it. >> maybe he's been to the bur burlington at coney island 42 t-shirts for $5 >> that's ridiculous that's a waste >> it's called hyper-bowl. >> yeah, well, you would know. hyperbole and you? really >> the burlington and the wendy's, that's the best wendy's i've ever been that's the one where i gave my name as beethoven and my wife was very embarrass i never want to use my real name that's your chance to be mozart. don't you want to be somebody else you can pick who you want to be and no one's ever going to dispute it >> got it. >> not kidding as we go to break, let's check bonds, awaiting the fed decision this afternoon and the presser and the dots yields are down across the board. not by a lot, though two-year still above 5%. ten-year, 4.33%. we'll be right back.

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disney along the dow laggards, not by much but the second day in a row. a bunch of reactions to the cap x allocation yesterday at the parks. most notably b of a, which cuts from 135 to 110. a number of iger's initiatives could take several quarters if not years in their view. >> when you're in a troubled -- look you can put your money in media, everyone think it's a terrible business so he's putting it where the parks are, which is a great business. it's supposed to happen this quarter? that's where they went wrong with disney plus, trying to say we're going to have the best mo movies and blah blah blah. no is he looking at the next quarter? >> it's the key growth driver now? no longer streaming. >> that's where the money is the one thing we all worry about, and david you're closer to it than anybody people are saying how can we do

this ahead of paying what could be humongous amount of huhulu. >> we'll follow the assessment of hulu closely. that will play out in the fourth quarter. >> we'll get to stop trading with jim in a minute re a rock s. you are a rock star. no more calling co-workers rock stars. look, it's great that you use workday to transform your business. but it still doesn't make you a rock star. so unless you work with an actual rock star. hi, i'm ozwald. hello ozwald. pam, you are a rock- i wasn't going to say it. ♪♪

let's get to jim and stop trading. >> i thought toll died years ago but this is from war and peace. kindrell is trade at a discount to its peers ibm has done well since offloading it. this is a piece that explains why that is. it's a powerful piece and ibm is inexpensive so you can bet it's off to the races today this is a positive piece, people aren't focused on ibm, they can do the sum of the parts this is

the way to get on the cloud. remember they have hybrid. it -- >> they do, yeah. >> this is a very smooth story i like it. i like anything i can buy something for ten times 2024 earnings pretty expensive that's the same you put on a steel company. >> yeah. >> tonight i have jwingstop and then trex is the kind of faux wood. i have to find out what the consumer is doing because where is -- alistair says they're spending i have to find out where. it's not just on a cold beer. >> see you at 6:00, jim. mad money on cnbc. when we come back, founders of klavo iniygog public today back in two.

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good wednesday morning and welcome to another hour of "squawk on the street. i'm sara eisen with carl

quintanilla and david faber live from post nine of the stock exchange stocks marching higher on a fed day, 2:00 p.m. news conference live on cnbc, 2:30 p.m. eastern time we are seeing stocks higher, s&p up a third of one percent. most are up. industrials are leading the charge today for a change. nasdaq up about .2%. still negative for the week. 30 minutes into the trading sec session. dollar general one of the biggest losers j.p. morgan downgrades the name to sell saying the low end consumer is already quote acting recessionary today shares at the lowest levels since 2019 been weak for a while. winds coming out of the sales of arm and instacart as klaviyo looks to go public told after pricing the top end of the range. we'll speak to both co-founders and the ceo in a moment.

and general mills reiterating the 2024 outlook more on those numbers what they tell us about the consumer later on it's a fed day, start by looking at the bond market as we have every day lately and a little bit of alleviation in the bond yields maybe helping stocks today but the two year note yield it's above 5% yesterday got to the highest level since 2007 nobody expects the feds to do anything on rates today, the consensus is more of a hawkish pause. they're not going to move on rates but the dots they'll signal one more rate hike but cut next year not as much as the market expects the bottom line is they don't know they don't know for november and

december, that's why the market is 50/50 on november and 50/50 on december. depends on how the economic numbers come in. >> doesn't it always >> does anybody know >> how are you supposed to know? >> here's something you can look at how much of an impact the fed has had. we say the economy is holding up really well. here's what consumers are feeling. we have last year's number on fixed rate mortgages, 4.29 now 7.3. credit cards go from 16 to more than 20% these -- this is how fed policy works in higher rates. and this is why people say we're just starting to feel the lags >> the lags. >> if you're a borrower and going out, you're going to feel this and it's going to have an impact on the economy. it's not having as big of an impact as expected but that's something the fed they know these numbers and know

they're a lag. and that's why they've changed their posture along with signs of moderating inflation and more willing to be patient. the question is, are those lags enough to really kill off this inflationary problem we have. >> nobody is taking a five-year fixed personal loan in 20% nobody. >> no. >> that's why loan growth has been, quote, disappointing as they said at b of a. >> you can do better down the block from whoever it might be. >> the shadow banker down the block. >> yes. >> and inflation in the uk, a big miss, which is a good sign since it's been hot and sticky but then yesterday, canada was hotter than expected >> it can never be clean it has to give you the "yes but". >> i think that's why yields have moved high and stay there

there's questions about inflation remaining sticky and flaring up again even if that doesn't mean higher rates from the fed. >> what do we get from powell today in his press conference? what language? >> similar to jackson hole i think. where he welcomes the moderation we've seen in inflation. but says they're data dependent and they'll do more if they see inflation become a problem they're watching the softening in the labor market and the overall economy. but again data dependent and it's been resilient. because he doesn't know. because they just don't know so that's the -- hence the data dependency. >> our next guest does see risks to the inflation outrisk with higher prices from oil extending to the broader economy, maybe goods as services as well. thomas honig joins us this morning. good to have you back, curious if you're listening to the conversation and what's most

interesting today, the dots or the color framing or something from the chairman himself? >> i think the dots will be important in the sense it describes the mood because there are some new members on there. people will be looking to how they're thinking because there are differences. some wanting to hold more permanently, others wanting to get the rate higher to get the inflation down and given the amount of i'd say, strength in the economy because of the tremendous fiscal expenditures, that's just wearing out. so they're going to be talking generally about the future and, as you said, they don't know so again, i agree with you they're going to be talking about we're going to be very diligent we'll look at this very carefully. we'll watch the inflation numbers and then we'll decide later is how i see it coming around on the conversation today. >> this whole cycle has been about core

and we've seen a number of takes lately that oil will have limited impact, at least passed through to the core. do you agree with that >> not necessarily because if the energy stays high not just higher inflation but if it stays high, it's going to further affect transportation costs and costs related to that, which is already pretty high inflation. that's going to affect other goods in terms of the cost of delivering those goods and consumers having to pay higher prices for that so that's going to put upward pressure on inflation unless the energy comes down quickly and i don't see that happening at the moment so i think inflation will stay more elevated than some expect, and that's what they're -- they have -- the fmc is also concerned about. they're going to explain themselves by saying the core has come down. but they're also going to say we want to watch it, as you described earlier in this

conversation >> definitely will filter into air fares and other parts of the economy and inflation that have remained sticky. my question is on the consumer we've seen the consumer hold up relatively well which maybe has kept inflation hot but we are facing the resumption of student loan payments excess savings are starting to be drawn down here do you expect a change towards the end of the year with the consumer and the economy and therefore the inflation story? >> i think the consumer is going to be backing off as we go forward. not just because of the student loans but because the economy itself is slowing. and they're seeing that. so you get more conservative when that happens. that's what i expect i also expect upward pressure on rates. timing is not discussed enough but as the excess liquidity runs off, that's going to put

pressure on interest rates and further discourage the consumer and some businesses. so i think the risk of a recession is high. and the fmoc knows it and that's why they're coy in their statement today. and i think the chairman will be pretty coy in his press conference >> appreciate that very much see what happens this afternoon. hopefully get your take on the other side see you soon >> see you, thank you. what's ahead for this market as we do await the fed's latest forecast our next guest helps oversee more than $300 billion, shifting his starategy a bit towards equities, joining us is christopher ailman head of the second largest public pension fund good to see you. since we've been talking fed and the economy give us your take on things today and the chances of

a soft landing >> today is an awkward meeting, he's data dependent, watching the sta tis ikss the street is clear they're going to pause, which they should for today and then keep the cards hidden and the options open for the future. >> what's your sense of what should be done and what you're seeing on the ground to the extent you have an opinion here? >> david, i do you know, the fed only has short-term interest rates as its tool to fight inflation. inflation slowed this summer but i think it had to do more with commodity prices as our last speaker said with oil trickling through the economy. oil is back to 90 and appropriately the bond market is reacting ahead of the stock market i said through all of this we have to take our clues from the bond market. a.i. has boosted the stock market i'll grant you that, but

it's recognizing we're in a higher for longer environment and the fed has to use higher rates. they haven't slowed the economy. they really haven't slowed inflation. >> yeah. at the top i introduced you, talked about your weighting towards equities and bonds is there a change? i want to get this right in terms of how you're benchmarking things right now at the second largest pension fund in the country, public pension. >> you're awesome, i'm a fan of yours, david we changed our benchmark this was intended for the public and teachers to understand our portfolio. it's simple, a 70/30 the portfolio is diversified an complex we're not adjusting the equity weighting at all, 15% in real estate and 15% in private equity we use the private markets to help diversify that risk and also see growth.

right now the markets are shutdown due to climate interest rates. but we see opportunities we finally had an ipo yesterday maybe we get a few more before year end and maybe '24 will be more open. >> i hear so much these days private credit you're talking private equity it's been hard to come by given the rise in rates. but credit, double digit returns available and asset managers are moving into it aggressively. >> they are. we have teamed up with a couple and helped create products for that market. i like it. it's not a separate class so you can't pull it out easily we're 3% in private credit and growing that you have to do your homework and look underneath the hood and get into those underlying credits if a recession is coming. so private credit is very attractive fixed income has a return. even cash has a return now you have to pay attention to that in your asset allocation.

>> what about real estate? how much exposure do you have to the office market and have you had to have write downs? i'm wondering how that's affecting the overall portfolio in your returns? >> real estate has been flat the past year. we have about 15% of our portfolio in all four categories of real estate yes, we have an office waiting we do expect that to be written down you've seen a few cases where very big firms have thrown the keys back at the banks and said we're not going to refinance then it's pretend and extend and they restructure i do expect and i expected that market to probably come down 20%, on average, there's class a to class c properties. but you're going to see that market eventually reprice down but there haven't been any transactions so the appraisers aren't writing it down but cap rates have got to adjust to where interest rates are. so yeah, that's a soft market and it will continue to be soft.

>> your public portfolio and equity you're in all the big tech stocks that have been winners overall, i'm curious how have returns been? are you beating the benchmark? >> yes in u.s. equity and barely in global equity. we're basically an index fund. with the msic structure you own the winners and don't invest in the losers so you're not owning the low stocks i love jim cramer, he's fast money i'm slow, patient money. i'm holding the whole market that does me i'm in the big nine stocks it doesn't mean it's not an active decision. but we hold the u.s. market, the nonu.s. market roughly equal weighting to the indexes and ride up and down on the markets. >> 7% has been the big boeing

out there. you -- 7% has been the been bogey out there p. you're beating that. 7% is no longer a stretch when you can get 5% on a two-year. >> think about the people who started in the business the last 20 years and they think that zero interest rates is a normal environment. when i went to school, zero interest rates was not in the textbook, wasn't supposed to happen we are in a different world. i remember the '80s, and '90s, not going back there, but fixed income has a return. i think bonds are worthwhile for retail investors to look at. i wouldn't trade them. it's going to be a tough environment with the fed to trade here but buy and hold you can get great returns in 10 year, 20 year corporate paper and people can find opportunities to diversify their portfolio finally. >> finally, yes.

chris good to have you, thanks for your time. >> thank you, always a pleasure. as we head to break, the road map for the rest of the hour huge day for the fed and markets. donny fine joins us on where rates go from here. and ramore out of general mills. and klaviyo going blpuic today. both co-founders and the ceo will join us in a moment

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on the heels of arm and instacart we await klaviyo's first trade. the marketing automation company to trade here at the nysc under ticker kbyo. joining us on set for a first on cnbc interview is ed hallen, and andrew bileki. welcome gentlemen and congrats on the big day. >> thanks for having us. our customers, partners, everyone around the world, thank you. 11 years we've been working on this thing and what a moment. >> back to 2012. i think you have to first explain the name >> sure. >> which now we can pronounce correctly klaviyo. >> ed is a big outdoors guy, got me into that, and klaviyo, it's all about climbing mountains so ed and i we love building software that helps businesses take on challenges so we want to be the revenue growth engine we fell like we give them the tools to grow

their business >> it's not a household name like instacart for those new to the company you cater to the enterprise and help on marketing and targeting consumers. how does it work explain what you do. >> we power smarter digital. so we started working with small businesses and now we serve businesses of all sizes. and we fundamentally klaviyo is a crm for consumer businesses that helps them build more personal relationships with consumers and treat them like people. >> it's really just shopshopify? it's 80% of your revenue is their service? >> we love working with the market leading platforms when we decided in the early days we were going to focus on retail businesses, consumer businesses first, who are the best platforms out there the most innovative and

obviously shopify is at the top of the list. >> is it a risk so much is concentrated there i know they're an owner of your company as well. >> a bunch of product development, a bunch of marketing together we do it with other platforms, retail and outsider retail we loved working with other software companies that compliment klaviyo they provide that payment, the back office, and we try to help with the customer experience on the front end. >> it's been all about ecommerce so far but i think investors looking for the next growth story are wondering about other verticals and whether you can grow there >> from the start we had the first customers, a good handful were not ecommerce so we leaned in to help us grow we started signing more partnerships with other platforms. for example, there's a beauty appointed business called glow day in california where they manage their appointments and

bookings through klaviyo so we're excited about the possibilities for any relationship. >> marketing looks to you as a tell for the capital markets and ipo window can you describe how it feels to you and how the timing worked with the original plans? >> we have been building durable companies. we think companies should be profitable that way you can be in control of your own destinies. klaviyo is about partnership and being in control we're excited, a lot of momentum as a business now is a great time for us to go public especially as we move up in the enterprise as ed said. you have durable growth -- >> to the degree there was pressure was it to wait longer or go sooner >> there really wasn't any pressure at all. the business has a lot of momentum i think coming out of the last four or five years a lot of customers have come to us now even when it's harder to grow your business, people lean on us

because the return is so good. a great way for business to grow so yeah, the time is right. >> speaking of control you guys will have control still of the company growth is what obviously the market is looking for specifically how does the economy figure into this new business formation? the consumer it's not an insignificant concern i would think. >> yeah. the great part for us, if you think about a consumer business, tons of customers, a lot don't have a relationship with that customer walk into your store, by something you have no idea who they are we help bibuild digital relationships. what's cool is i think there's a megatrend of businesses building digital relationships. so everybody now we're connected to the businesses and brands we buy from connected to them directly with klaviyo you have the opportunity to build awesome experiences that basically they replicate what you get in person. >> you are raising primary

capital in addition to selling shareholders what's the main use of the capital you're raising? >> a ton to build. customers, over 100,000 have bet on us since day one. we are very excited about what we have to build next. >> what does that mean what are you building next >> we are heavily invested in building out data infrastructure, more applications for businesses. the whole team, artificial intelligence around helping our software use itself. we want to help any small business, large enterprise if you want to connect with your customers, we think we've got the platform to do it. >> 54% revenue growth in the first half is that a realistic expectation for full year and repeatable from here? >> we'll see i just believe in if you focus on a customer you build things they love, then you know what, the growth takes care of itself. >> you've also been profitable, that's more recent, have not in the past i wonder if that's a sort of

temporary phenomenon because you have to spend a lot to get the customers and the recurring revenue. >> i believe in software companies that if you get customers that love you, you get this viral effect. they'll bring each other to the table and you have great platforms to work with like sho shopify, we have over 5,000 partners it helps with the customer acquisition costs so i think we have a great business model, excited to see what happens next. >> the valuation we just showed, not far from what you raised in 2021 in the private markets which was more bubble luscious than we see right now. so where did you get with the valu valuation? >> it sort of sorts itself out because we've had, you know, control of our own destiny as we built our company we try to find investors that shared our long term focus and honestly we've never tried to top tick price. and that's p what i'm excited about for the public markets we want to find investors that want

to go long with us >> there are other chompetitors what do you define as your core come penty ahead of them. >> we power smarter digital relationships we'll take the data and apply it to more applications what we hear from customers is that's what they want. they want software that's smarter and allows them to build better experiences and with machine learning, been at it four or five years, we have algorithms that run our software for you that idea of software that makes you smarter, better as you go, that's the future and that's what we'll work on. >> thank you very much for joining us on this big day today. we appreciate the time talking to our fviewers. amazon kigincking off a new product event this hour. quick programming note as we go to break. a week from cnbc's delivering

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keep an eye on amazon today, company hosting a devices and services event with many expecting the next generation of its echo device. morgan stanley calls it a top pick on the heels of a big seasonal hiring announcement yesterday probably saw the numbers around 250,000 see how much of that happens they have such large scale those numbers may be less dramatic than we think but we'll see. >> you see it as a high demand going into the holiday season. not helping the nasdaq which just dipped. time for a news update contessa brewer. >> reporter: three of donald trump's co-defendants in the georgia election case are asking a judge this morning to move their case from state to federal

court. they're accused of acting as so-called false electors by pledging for trump in swing states won by joe biden. the judge who's hearing their arguments earlier this month denied an attempt by mark meadows to move his case to federal court. india warned citizens to exercise caution if they're traveling to canada. canadian prime minister justin trudeau went public this week with claims india orchestrated the killing of a separatist leading in canada. and the fda rejected a request for a needle free al alternative epi pens the company is going to appeal

that denial. treasuries hitting 16 year high as wall street braces for a decision from the fed. donny fine is joining us we'll tell you what he does. back in two. o you know about rock stars? billy idol? i mean where's the skin-tight leather? my shoes are leather. where's the unnecessary zippers? that thing! billy, rock star is just how doug feels when he uses workday. thanks, rory. i'll show you rock star! be a finance and hr rock star. workday. for a changing world. billy idol just stole your golf cart! (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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it is fed day. many expecting the central bank to hold rates steady in a few hours. let's get to steve liesman with the latest from washington. >> the fedex pected to hold rates steady but the focus is how jay powell thinks about the recent strikes and the higher yields and potential government shutdown beyond that they'll focus on what the fed signals for rates in the forecast. let me show you high level math. they'll focus on gaming out how restrictive the fedex pects to be on an current basis the forecast minus inflation

forecast the second set of parts to check the first, you get the third average out to 2.4 rate last year that's compares with the last set of bars, .5. it means the fed is expected to keep the brakes on the economy the 5.4% implied rate on the january contract shows a 40% hike probability but the news has been how much in the way of cuts the market has dialled out next year. 200 basis points higher they did in may the upshot, the fed is convinced markets are up much higher for far longer i think it's unlikely the fed gives any reason the reckoning whether the fed is too high next year can happen,

guys, next year. i was amazed at how much tightening has been dialled in next year. >> they keep saying higher for longer maybe the market comes along where is the scope for surprise today? because everyone is expecting this sort of hawkish pause already. >> so i'm going to do the math and that's where i think i'm going to be surprised. i don't think it's possible to game out exactly where the average comes out. but i'm interested to see if they keep that real rate expectation for next year up near 2%. in other words take their funds rate forecast, subtract out their inflation rate and see how tight they have to be. you remember from jackson hole, the discussion could change the long-term trajectory but it's interesting watching the two year and then you have the addition of the fed hiking rates and then you have this higher for longer somewhat stronger economic growth all of that has led the market to dial in more tightening or

less cuts for next year than they originally thought. >> although bullard won't be there so the outlier crazy hawkish dot will go away. >> that's an important point what's it replaced with? we don't know. if it comes in with the person taking bullard's place, i don't know if he puts on a dot, that could buy things downward. we have to do a pro forma on that. >> pro forma on the dots steve, thank ou. as we await the fed decision, the yield on the 10 and 5 year treasuries hitting the highest since 2007 with real yields elevated no reason to chase assets, according to dojohnny fine, welcome back what will you be watching this afternoon? >> the last time i was on with you was fed day a few months back and i said that was going

to be one of the most important meetings we had for the cycle in one is one of the least important for the cycle. the pause is what we get i expect there to be a limited degree of market movement for pricing for the rest of the year into next year >> but it's a coin toss now for november and december. >> i think it's probably about right. markets pricing in roughly 50/50 in november or december. we'll be data dependent, see what things look like in the coming four to six weeks that will harden or soften the approach to whether there will need to be another hike. our chief economists in the u.s. and globally view we're at the end of the cycle now and will move into a cutting phase into next year. >> does that mean we've seen the highs on treasury yields >> not necessarily there are a number of headwinds the treasury cycle faces we have a sharply inverted yield

curve that's not normal. in the last 20 years on average the spread between funds and the treasury yield has been just over 100 basis points. we're now 125, 150 basis points inverted, and there's a lot of work that i think we need to see done just to get to flat that may happen by the time we get to next year but that along with an increased amount of government borrowing to fund the deficit will weigh on long end yields so if anything there's more pressure on yields from here >> what are we seeing overall in the activity when it comes not to just investment grade buff high yield i assume you can weigh in as well setting up for a busier fourth quarter? >> i think so. i think we've seen a soft opening of the ipo market with well telegraphed deals. >> yes goldman sachs led many of them. >> we have proud to do so but the leverage loan market is in a better state of health.

single b risk get placed in the primary capital markets. clo formation is back as well. so even though i think those markets will likely not see an amazing rush of supply going into year end, i think the soft openings are encouraging there will be more activity. that sets us up well assuming we get insuing performance. that sets us up for 2024 >> if i'm looking at the debt market, i'm not setting up -- >> not really. where we are in the spread cycle is favorable in the rate cycle is less favorable. unless you have a strong thesis that term yields are moving down -- >> you need the money you got to do it. >> yeah. and i don't think that's going to happen. i think there will be a good level of activity. >> why not why won't yields crash, let's say? >> because i think we have

ongoing supply from treasury and an ongoing normalization of the shape of the-year-old curve. the right parallel looking at 10 year yields, for example, let's look at what that market was like prior to the global financial crisis, in the early 2000s before we had qe, alternative forms of monetary policy ten year yields were four half, four and three quarter percent and the economy did just fine in that environment as well that's the right parallel to look at as to where longer term yields might equalize p. >> what about the notion that cuts are a sign of distress, economic distress, a sense that cuts if the they come, you're calling for the second quarter, can be benevolent in a sense >> i think even if the fed were to cut 100 basis points from here they would view the rate environment as being restrictive. monetary policies to be

restrictive. and continue to combat inflation. that's an easy message for the fed to tell. if and when we get to that cutting cycle, that's how i expect the fed to deliver. >> a trillion in money markets doesn't go anywhere until we see a decline in rates >> i think that's right. a lot of competition for risk aleksandr t assets right now whether it's t bills, commercial paper or other short term forms of liquidity they're attractively brpriced that will act as a break on too much froth in the high yield markets, so on and so forth. as we get into a cutting cycle that's an amount of powder that can drive assets. >> we look for early signs of recessionary indications you described it as benign are you in the soft landing camp seeing anything changing that

might be worrisome. >> i am in in the soft landing camp i think the economy has been insensitive to the rate moves we've seen since the beginning of last year that's the structure of our bond, mortgage markets, and how consumers behaved when rates were low in 2019, 2021 so i think soft landing, absolutely i think the market consensus is there too it swings on a pendulum and at some point that pendulum will swing back slightly the other way but overall very much in the soft landing camp. >> johnny, thank you great to have you on a fed day. cnbc's wall-to-wall coverage of today's fed decision kicks off at 1:00 p.m. eastern time from washington d.c. leading up to fed chair powell's news conference at 2:30, which we take live. more on the ipo of the morning, klaviyo, after the

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marketing software company klaviyo going public today price at the top of the range, 30 bucks, indications 34 to 36 right now. let's get to bob pisani, of course, because bob you focus on the ipo market we've gotten these three important offerings. where do we stand? >> well, it's opening slowly but very selectively, there's 800 unicorns that are out there. these are the early ones we elsee early trading is not that great. it's great they're pricing above the range. talking 19.2 million shares, the

stock price was 27 to 29 for klaviyo. prior to that, it was 25 to 27 a few days ago so that's good news getting more prices but look at what's going on with the recent ipos. arm, priced at 51, opens at 56, goes to 69 on the second day and look here, we're at $53. but that's -- nobody got in except the insiders at 51. the average price on the first day of trading, the average viewer cnbc bought it at $60 they're under water. instacart, priced at 30, got to $42 yesterday right after the open and it's been basically down here in the $32 range you say, okay, it's still above $30, there's the initial price but the average investor on the first day didn't buy in on that, they bought in the mid 30s so average investment yesterday still below water. after market returns, they're self-correcting mechanism, people will stop buying these if

they don't work and that's what my concern has been. this has been the concern in 2 2020 and 2021 when the market moved up remember audity tech they did cosmetics july priced at $35 opened at 50, it's now 32. below the price. it traded in the 50s for most of the first week so everybody bought in around $50. how about cava, that first opened the market. we were all agog priced 22, opened 42, went to 50 everyone was buying it at 42 and 50 for the first few weeks it's now 33 so the average investor is below water. i divide the ipo market in two pieces, first day and after that first day of trading this this year, up 19% great news but after the first day it

trades down 7% so the average investor, the insiders are still up, that's true but the average investor is down who bought in this on the first day. so 77 deals so far we have 16 billion raised. is the market opening up yeah, but yeah but only $16 billion the amverage year, we're doing $50 billion. we raised 30% of the average year, three quarters of the way through the year >> it's better than last year, but it's not good. and you seem a little worried about the after-market performance of many of these stocks >> you should be look at those numbers. by the way, on the numbers, put up the area's big ipos, arm, $4.9 billion one third of all the money raised this year is arm. k k kenvue is $3.8 billion so your question is the right one, is it opening up? yes, but it's still pretty moribund right now

we ought to have an awful lot of business in the fourth quarter even to get close to an average year and in my opinion, the valuations are still too high. i want the average investor who buys in on the first day to say, a month, two months later, they're up and this is not -- still not happening! >> you keep talking about this average investor who are we talking -- we're still talking about institutional investors to a certain extent or are you thinking retail >> i'm talking about the viewers who buy on the first day the people who buy in on the first day. they are buying if at the higher prices on the first day. and they don't make money. >> maybe they just shouldn't participate in the ipo market? >> okay! well, that may be the correct -- >> you're still going to get aed by, because the other people who -- the institutions and the hedge funds who line up -- i'm happy that -- >> you need retail for after-market >> i'm happy that goldman and jpmorgan gets higher cprices for their clients. that's what they should be doing. so i like the average investor who watches our shows who don't

get in on the inside price to be able to buy it on the first day or the second day, and still say a few months later -- >> and that trend doesn't work that way so interpretation is, the valuations are still too high for the average investor >> it's been a tricky market, too, bob you have these flare-ups with inflation and the bond yields go up it's not exactly smooth sailing, even though the equity market is higher this year >> we have to deal with the markets as they are. it's true, stuff gets in our way all the time from an average market evaluation. we have these weird events that and weird economic events, but we have to deal with the markets for what we're given so it's -- is it too much to ask, like, this has been going on for years >> bring down the valuation, bob. >> spec craze. >> you bring down the valuation, bob, and these things are way under their last -- when they last raised capital and that makes it difficult for these founders and the others to say, i'm going to do it >> good. let's let, i like the public markets. i don't like people hiding in the private markets for ten

years, now they have they're middle-aged companies like instacart that would have come out five years ago, maybe things would have been different for them let's get younger companies and make it easier for people to go public faster, easier. >> nothing gets you quite as emotional as ipos. >> it's the greatest thing ever to stand here and watch the families and i want to see more of them. >> we love watching you do it. thank you, bob bob pisani coming up next hour, airbnb shares are an outperformer this year and some fresh product news brian chesky joins us to break downhe t business next hour. don't miss it. "squawk on the street" will be right back dow's at 150

general mills is a mover today, reporting a beat on the top and bottom lines this morning. higher pricing again helping to offset lower volumes in the quarter. also, the company reaffirms its guidance for the year. the company's chairman and ceo saying, quote, the external environment is highlighted by moderating inflation, stabilizing supply chains, and a resilient but increasingly cautious consumer. shares are off more than 25% from their highs back in may the story here, guys, is, strong humans, weak pets. because they have a big pet food

business, the blue buffalo business which they bought and they are seeing a decline. they're not alone. we've seen it in chewy and others in buying habits of pet owners, especially in treats, treats went negative, wet food was flat, dry food was a little better but the economics of that consumer is changing a little bit. on the food side of things, higher prices is still helping, volumes were down 20%. the street is focused -- the biggest question for all of these food names is, as prices moderate, first of all, will it hit margins and second of all, will volumes start to come back? they need for that growth. it's one worry of why these food stocks have been weak all year >> price has been key here >> sara, thank "squawk on the street" continues with sarah and carl right after this

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♪ (lovely day) ♪ ♪ (lovely day) ♪ ♪ (lovely day) ♪ a bank that knows your business grows your business. bmo. good wednesday morning i'm sara eisen with carl quintanilla live from the floor of the new york stock exchange stocks are higher ahead of the fed decision this afternoon. guggenheim partner ceo anne walsh joins us in just a moment with the number one thing she's watching from today's meeting. >> and airbnb releasing some updates, including lower pricing in an effort to take more share from hotels. an exclusive with brian chesky is ahead, but the stock up 66% this year. and we continue to await the opening trade of