if there's a recession. >> allright. julie, thank you. those are all things we actually hadn't talked about, so value added. good to have you on. happy thursday. we like thursdays because tomorrow is friday. >> friday eve. >> friday eve. market is not down 200. that's about the best we can say on the dow. i'll see you tomorrow. >> thank you. >> see you tomorrow. make sure you join us. "squawk on the street" is next. ♪ good thursday 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. the post-fed stumble for equities continues this morning as the market comes to terms with higher for longer. jobless claims, lowest since january, not helping. ten-year almost to 4.5%. our road map begins with big deal news this morning. cisco acquiring cybersecurity firm splunk, all cash. plus the end of the hollywood strike for writers may

be near. we'll give you the latest reporting on that potential deal between the studios and the writers. and the fed is holding rates steady, signaling it will keep rates higher for longer. deal of the day, cisco agreeing to acquire splunk. both companies cite what they call complementary capabilities in a.i. and security. splunk's gary steele is going to be part of cisco's executive leadership team, reporting to chair and ceo chuck robbins and both gentlemen are going to join us exclusively at 9:15 this morning in about 15 minutes, jim. >> i think this is terrific, and i will tell you why. what cisco' tried to do for a long time is have a lot of recurring revenue, and splunk is nothing but recurring revenue. cisco has tried to be a major factor in cybersecurity. we know it's incredibly important. splunk will give them the opportunity. they had a smaller division that does cybersecurity. it's not been that much of a winner, frankly.

in the meantime, gary steele has taken the company, and david, you remember, starboard was agitating about splunk. he came in and fixed the company in 17 months and prepared to be able to sell it. that was not what he wanted to do. he was going to come on "mad money," but he has done so much in a very short period of time that i think it makes tremendous sense for cisco to strike right now. >> we can ask the guys, but there was, you know -- there were talks between these companies a year or two ago. >> yes, there were. interesting. >> they didn't get a deal done then. i just wonder what changed. we'll obviously ask them, but do you have any sense? >> i think that gary steele is a deal maker. he's a realist. they were doing terrifically. i think it was a company always for sale. these guys, and they're going to be on, these are two of the most straight shooters i've ever met in business. gary is a man of few words. you got to be careful. gary is yes, no.

how do you think -- how's the new microsoft-azure deal? >> oh, okay. good to know going into this interview. >> i love them. when prove point was doing badly and he would tell you. splunk had totally lost its way. i had a splunk t-shirt and i just kind of, you know, put it aside. no dog named splunk. but in the meantime, they have had this incredibly sticky group of customers, and everybody swears by them. they have observability and terrific cybersecurity. they're on the edge, which is something that cisco has done, and i think we're going to hear an amazing story and in the end, you're going to say, i want to buy cisco because they have the annual recurring revenue which is almost 50%, which had been chuck's goal for a long time. we will enjoy -- we enjoy meeting both of them together, and both of them are really a match made in heaven when you try to figure out where cisco needs to go in terms of growth. >> certainly one of the largest deals of the year without a doubt, and we talked about the

fact that there has been some hope, some optimism when it comes to m&a starting to percolate in both the fourth quarter, which we're not even quite in yet, and next year. you know, i have heard this a number of times. this is the first true example of it, though, of a large deal. >> this is a very large deal. >> certainly even for those who are considering deals that might garner significant antitrust or at least in this environment, antitrust roadblocks, i'm hearing that, you know, ceos are willing to consider things in a way that they might not have previously. >> previously, the atvi. >> and importantly, jim, it is as much about, all right, we think we can win but it's going to take longer and there's a willingness now to say, well, all right, 18 months is kind of the new 12 months, you know? >> i thought that -- david, the horizon -- >> more active m&a environment, but obviously, this deal itself also coming back from previously

at least having tried at cisco. >> we know that chuck was one time interested in data dog. he's always wanted to make an acquisition in this area. i think the textbook bridge too far was amgen horizon where lina khan, i would say go so far as, some people say she made up the reason to block that deal. i would not say that. >> that was quizzical, to use a word that you enjoy. >> yes. yes. do you like the flag behind my head? >> oh, yeah. look at that. >> our great allies. it is funny because i just remember in 1974, they were -- >> you've got a star. >> i just point it out because i think people will look and realize the vietnamese are here today in celebration of the great relationship we now have. >> yeah. well, speaking of stars, you may not see your favorite stars back yet in your favorite shows. >> oh, you broke some news today. >> it was actually yesterday. >> oh, what were you doing on earlier this morning? >> that also.

we are going to be keeping a close eye on the continued negotiations between the writers and the producers, the wga and the producers, face-to-face meeting yesterday did yield significant progress and optimism on both sides. that is according to people who are close to these negotiations. speaking with them late yesterday. and the hope is that today they can finalize a deal, that the negotiators on behalf of the writers can bring back and get approved. there is always and still obviously a possibility that will not happen, but certainly optimism as i was reporting on both sides, that and the fact they can come in today with a relatively short list of things they finally need to do. in fact, i was told there was a belief they could have gotten it done yesterday in the room. but they didn't quite get there, and the hope again is that today will be the day. for the writers to agree with the producers on a new deal that will put them back to work and

then of course the question becomes what follows with the actors. we'll keep an eye on it. 9:00 a.m. pacific time is when that is going to begin in terms of, again, the face-to-face negotiations. >> that's very interesting, david, because this discussion with the uaw has taken a turn that is almost -- it's just irreconcilable. it's interesting at one point the rhetoric for this was pretty heightened. and they still solved it. >> yeah. >> what are you, a message in a bottle? >> looking at this "journal" piece here, david? >> i want to get to this press release about rupert murdoch. >> stepping down? >> he's stepping down. rupert murdoch is stepping down as chairman of both news corp. and fox. i was reading this now. effective as of the upcoming annual meeting of shareholders in mid-november.

murdoch, again, will become chairman emeritus. very simple statement here, obviously, rupert murdoch, perhaps -- well, i don't even think there's much question. the 92-year-old murdoch is certainly seen as the most consequential media executive of our time. love him or hate him. he has had an enormous impact. fox is obviously run by his son, who spends a lot of time in australia, from what i hear, but that is run by lochland, and thompson is running news corp., but he has been chairman of both companies. just trying to see here, guys. >> well, lochland, who has been co-chair, will become sole chair. >> thank you. >> for my entire professional life, i've been engaged daily with news and ideas and that will not change, but the time is

right for me to take on different roles. >> you remember -- did you read "house of morgan"? there's this moment where rupert comes in, just a total brigand, and he had everyone -- he outfoxed everyone, to use the metaphor. >> yeah. listen, rupert has a long history of doing that. extending right up to the seminal deal with disney, which many people would say he got an incredible price for the fox assets that were sold to disney, and i remember when i broke that story, of course, the idea that fox would actually have been a seller, but the way people have described rupert murdoch to me through the years is that he's hyper-rational. >> when he sued me, was that hyper-rational? >> i don't know about that, jim. in the case certainly of a decision to do an about-face and say, this is the time to sell, and you could argue that was a good decision, given -- imagine if fox were dealing with the same things that disney is and

so many others in the content business. he chose, we're going to be news and sports, and we're going to sell at a huge price. we're going to sell sky. so many of the fox content assets. >> i enjoy him. i did have a bit of a legal battle. >> fox news changed the landscape in this country and democracy forever. >> well put. >> wow. >> well put. you statesman. >> it comes not long after dominion and a lot of reflection about murdoch's decision to part ways with tucker carlson and some of the fraught questions that he has had in the business and politics of media. >> david's right. media's never been the same. and wow. the dominion case changed things too. you know how hard it is to prove malice aforethought? and they did. >> big news in media.

when we come back, we'll talk to cisco's chuck robbins and splunk's gary steele about their $28 billion deal. obvious a lot else to get to, central bank news today as the bank of england holds steady.

you've been a real rock star. rock star? what do you know about rock stars? billy idol? i mean where's the skin-tight leather? my shoes are leather. where's the unnecessary zippers? that thing! billy, rock star is just how doug feels when he uses workday. thanks, rory. i'll show you rock star! be a finance and hr rock star. workday. for a changing world. billy idol just stole your golf cart! ♪ ("drumroll" by lónis, little league) ♪ (♪♪)

♪ this just in ♪ ♪ got the keys to what you want and what you need ♪ ♪ something new something sweet ♪ ♪ moving to a different beat ♪ ♪ okay now (what?) ♪ ♪ can i get a (get a) drumroll? (what?) ♪ ♪can i get a drumroll drumroll? (what?)♪ ♪ can i get a can i get a drumroll please (oohh) ♪ ♪ that's nice (yahh)♪ (♪♪) ♪ ya, can i get a drumroll, ♪ ♪ can i get a drum- ♪ ♪ that's nice ♪

>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. we have big-deal news today, and david, you know this, this is just really the deal. this says that maybe m&a is back. $28 billion deal, cisco to buy splunk. boy, are we lucky to have the principals here. we have chuck robbins, the ceo, chairman of cisco. and then we have splunk's ceo, gary steele. many times, both of you guys on "mad money." i want to thank you both. congratulations >> thank you. >> and i want to start with you, chuck, in the sense that you have always told me you would like to have the annual recurring revenue be higher and really put it so people understand you're not some old hardware company but you're really at the cutting edge. this gets you to almost 50%. that has to be one of the drivers of this deal. >> it's, first of all, thanks for having us on such short notice. we're really excited about this transaction, obviously.

and you know, this deal, when we close it, it will add roughly $4 billion of arr to our existing run rate of arr, so it will put us close to $30 billion if not over by the time we close it, and it will also put us over $20 billion in swoftware on an annual basis. >> $28.44 billion. >> thank you. that's our current arr. >> it's really big. i'm not -- i mean, i think people have to understand, when you say arr, can you please explain to the doubters about your company that where you have been going for a long time is where this -- is where gary fits in. >> yeah. gary's done such an amazing job with this company over the last 18 months, and you know, if you think about the fact that in year one, it's cash flow positive, accretive for us, and it's -- there's minimal eps impact in the first year but it's eps accretive, gross margin accretive in years two and beyond, well, gross mairgin

accretive in year one. great fit financially, great fit culturally. >> gary, why sell? why now? he just said you're doing a great job. >> i didn't tell him that before we did the deal. >> no, it's -- it's just a great opportunity for us to continue our journey. we made -- i'm really proud of all the work that splunkers have done. we have made tremendous progress, but this really accelerates us on our journey, and it's a great outcome for our shareholders. >> yeah -- >> but it does cap your shareholders. >> oh, come on. >> no, he's making a decision. you guys have talked, previously, about a potential transaction? >> same price. >> there were rumors prior to me joining, but that was before my time. >> okay. >> so, i joined in april of '22. we've been on this journey for 18 months, and i think this represents just a great outcome for our shareholders to be able to capitalize on this opportunity, and frankly, i think the synergies that chuck described are super exciting.

we've got so much opportunity together. it really helps us get to the journey that we've been on, so super excited. >> our collective team members are pumped up. they're really excited about this. our security team, our observability team, our sales organization and even you were talking about your sales leaders as well. >> everybody's super excited about this. we think we can drive a tremendous amount of opportunity in the market. >> i understand that, but i always make the point when it's a cash deal that your shareholders are getting what they're getting, and you can talk about all of the great things that are going to come and that may be for your employee base, but your shareholders are moving on, many of them, in fact, probably selling today. >> right, and i think -- but if you look at it today, if you look at the premium that we're delivering for our shareholders and if you look at our historical stock price, this represents a great outcome for our shareholders. >> okay. you want to -- any specifics you want to offer in terms of multiples as to why? >> i think that just looking at the -- our historical trading values and the premium delivered over that, while we've seen a lot of progress in our share

price, we still have a long ways to go and this represents just a great outcome to deliver cash to our shareholders, and we think it's just great opportunity. >> now, gary, fedex reported last night, and it was a remarkable quarter, and they have tremendous cybersecurity and i also think they have great observability. how much of that is you? >> i think, you know, just like many of our customers, we h have -- we're driving resilience. we underpin these large companies and how they think about our security operations as well as how they think about keeping digital resilience across applications so we're really critical to the global 2000. >> don't want to get too in the weeds, but chuck, you have been -- you have tried to own the edge, and they have graced up the edge. can you explain what that means for software and a.i. too? >> if you think about our security portfolio, particularly our xdr, extended detection and response, so we're basically

extending and helping customers respond to threats. we see more threats than most any security company out there, and they have the sim platform that is the backbone of security operation centers in all of our customers. when you bring that together with all the insights that our customers can see coming out of their network infrastructure, out of the internet connections, out of the home offices, and then you layer a.i. on top of that, we can help customers literally move from detection and response to predictive and prevention -- prediction and prevention. so, we think there's a huge opportunity. i can tell you, our customers are going to see the obvious synergies here and the obvious strategic fit. >> chuck, you're always great about helping viewers understand, even quarter to quarter, where we are in the business cycle and how the business helps frame that. what is the timing of this deal say about that? >> i think the timing of this deal says there are more -- the cyber threats that our customers are facing around the world and the need to actually have greater visibility into their technology infrastructure has never been higher.

and so, coming together and creating more capability for our customers at a time where gary has made so much progress in the last 18 months in this company, and we have actually been evolving our security portfolio and it's in a much better place today, so you bring those two together, and we think we can make substantial progress on helping our customers with all the dynamics they face today. >> chuck, in the release, it says this is going to -- will allow organizations to enhance their digital resilience and will accelerate cisco's strategy to securely connect everything to make anything possible. >> you like that, don't you? >> i do. but i want to understand what it means. you've explained it a bit, but tell us more. >> if you -- customers today, they're rebuilding their entire i.t. infrastructure to deal with multicloud environment they're operating in. they're dealing with hybrid work. they're dealing with home office has become a branch now. they're rebuilding all their application. they're running them in a very distributed way. you've got data distributed at

the edge. you have workers everywhere. so, the threats and the dynamic nature of the technology architecture has changed significantly. so, what that means is that every customer needs to know more about what's going on in my technology infrastructure. cyber threats, application performance, customer experience, all those things, and when you bring our -- the technology insights that we can deliver, and you combine them with the platform, the data platform, the observability cloud that these guys have, we believe we can give customers insights that they just can't get today. >> go ahead, jim. >> both of you have been feeling that the economy is muted. we had the fed talk yesterday about how the economy is still very, very strong. gary, let me go to you, because you did that fantastic deal with microsoft, so you got a great overview. when you hear that the fed says, you know what, things are still pretty hot, and i look at both of you, what you say, it does seem out of sync. is it just your industry that is seeing more macro headwinds than the other industries?

>> i think, you know, as we've talked about in our prior earnings call, we've seen some macro impact, and it's really just slowed down bigger projects, but there still is a consistency and a need to buy the capabilities that we have. i mean, we're underpinning how people think about their security posture, how they protect their enterprise, and as this broad digital footprint continues to expand, people have to buy something to help them get visibility in those apps. while we've seen some macro pressure, it's been -- it's been such that we have been able to operate really well within it. >> let me say something david brought up. you came in, the company was frankly in disarray, and i'm not going to talk about the previous administration, but you came in, and it was very difficult to fathom. and one of the things that you did was you built proof point, and when it was right to sell, you sold. i do agree with david that it's a very short period, talking about 17, 18 months. why not just go for the long haul? >> you know, i think this

accelerates the journey that we have been on, and we made tremendous progress that i think i'm really proud of the team and all the work that's been done. but this really delivers a great outcome for our shareholders. it accelerates that opportunity to drive value for them. and we're being super thoughtful about how do we deliver great shareholder value. >> was it about scale? were you not -- was there some level that you simply didn't see yourself getting to without partnering, so to speak? >> i think it just -- it delivers broader scale. things like the international footprint that cisco brings. we can get to those international markets. having boots on the ground in places that we just haven't yet invested in. and so, it really accelerates that opportunity to go take share around the globe, and we think that this is just a great outcome as a result. >> you going to integrate splunk? how are you seeing the integration? gary's obviously coming on. what is the role going to be? >> gary's going to report to me. we're going to work over the next 9 to 12 months and actually figure out some of the organizational integrations. i would expectthe technology

integrations will begin day one. we already -- we already understand the integration points that we can drive. and our teams are super excited about it. so, we're thrilled that gary's going to stay on. >> chuck, jim mentioned you're going to be chair of business round table, huge, especially going into an election year. is corporate confidence rising, falling, holding pat for now? >> i think brt put out the latest confidence index, i think, a couple weeks ago, so i think it's kind of flattish right now. i don't think it's moved significantly either way. >> and does this -- and this deal, does it fit into at least how you're feeling about the macro or the couple years ahead? >> well, i think that customers, and their spin on technology areas and what we all do together, we're not trying to time a deal on what's going to happen in the next 90 days or next 180 days. the time was right for us. we began our conversations. the synergies and the strategic fit for our customers is right. the financial side of it is

great for the combined entity. the cultural fit is great. so, we weren't worried about what's going to happen in the next 90 to 180 days. this is just a great -- it's a great deal for our customers and our partners long-term. >> let me ask you before we wrap up, did anyone say in the room, you know what, we have an ftc chairperson who is against every single deal, it's not worth doing it? >> i'll comment, and gary you can add, if you like. we think this is a very complementary deal. this is not a roll-up. you know, it's not -- we don't have a lot of overlap in our portfolios, so our general -- the experts that we have talked to are the ones who have given us the 9 to 12-month estimate on trying to get the deal done. >> and no china approval, even though there is a small business there. >> our presence in china is de minimus. >> all right, gary steele. congratulations. >> thank you. >> on turning splunk around so quickly and then selling it. and chuck, congratulations, just doing what you're doing, almost

get to that level where you deserve two multiple turns. >> thank you very much. thanks, guys. >> take a look at the premarket here. still looking at some elevated yields this morning. ten-year is just off the morning highs, but not too far still from 4.5%. more "squawk on the street" when we come back. unpack once and get closer to iconic landmarks, local life and cultural treasures. because when you experience europe on a viking longship, you'll spend less time getting there and more time being there. viking. exploring the world in comfort.

you got this. let's go. gobble gobble. i've seen bigger legs on a turkey! rude. who are you? i'm an investor in a fund that helps advance innovative sports tech like this smart fitness mirror. i'm also mr. leg day...1989! anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. i go through a lot of pants. before investing carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com.

all right, let's squeeze in a "mad dash" before we get to an opening bell. >> i want to talk about broadcom. this morning, the stock is down hideously, almost 10%. i believe that the story that came out and the information is patently false. >> really? you want to tell people what it is? >> it is the idea that google, which is actually google cloud services, led by thomas curry, who's one of the great people in this industry, the -- my

understanding, and obviously these -- broadcom does, a lot of people feel, charge too much, but a lot of people feel nvidia charges too much because they're a.i. and they have proprietary technology that's very hard to duplicate. the story i understand is patently false. the relationship is deep. multiple years, and i think that they are actually good strategic partners. total cost of ownership is good. you may say this is qualcomm-apple. all i can tell you is that the story as i understand it is patently false. >> the story itself is that google wants to basically replace these tpus that they buy from broadcom right now and replace them with their own. >> right. >> homemade chips, so to speak. >> just so people understand -- >> there's an interesting story today in the "journal" about apple's failure to create -- >> that's where i was going. let's understand, these are not off-the-shelf chips. these require a tremendous

amount of intellectual property. i know that these companies have been and had a long-term relationship. strategic, complex a.i. solutions. patently false. >> let's get the opening bell here in the cnbc realtime exchange. at the big board, it is the prime minister of vietnam here in new york for the unga. at the nasdaq, it's the wnba, the semifinal series begins this sunday as jim, we're going to flirt once again with 4,400, actually just lost it. >> yep. larry williams, my favorite historian of the market, also just to work for when i was in diapers, which is not when i was 10, despite what you would probably say. what i will tell you is he has been incredibly negative on this market, and is covering this -- saying it's time to cover the shorts. i actually like that. this is, i think, an overreaction to a fed that is doing what everybody thought they were going to do, which is that you have a strong economy

and they have to continue to do this. david, i would point out that there wasn't anything in the statement about 2% that was different. there wasn't anything in the statement about how the economy isn't still hot. i mean, look, you can look at kb homes, right? home prices are up 40%. kb home prices were down a bit from last quarter, but they say they're going to go right back this quarter, so we have a situation where we do not have enough weakness in the economy, whether it be by cost or whether it be labor, to justify staying flat. we're going to get rid of the inverted yield curve but not the way people want it to be. >> right. >> and you know, you want to sell the market, go ahead. september's a bad month. knock yourself out. sell now. remember the other day you were saying we were looking at stocks and the stocks were up here and then why sell now? i agree with that. why sell now? and i just think that this market is fulfilling the september rosh hashana, y

yom kippur. >> let's not forget the federal government is flooding the market with infrastructure at the same time the core group of people between 35,000 to 45,000, which is incredibly in this country most of the country, does -- is struggling. and struggling because of inflation. there's something that i wish that jay powell had said, which was on the lennar call, stewart miller's a brilliant man, he understands -- he's the dean of the housing group. he said, people respect that a house is going to cost more, so they have to act now. he has to break that, powell. he has to make it so you feel like, you know what? i better sell now, it's going lower. right now, it's, i better buy, it's going higher. and until that ethos changes in our country, you are not going to see a fed that is a dove. it's going to stay a hawk. >> that's interesting. you've talked a lot about food inflation this week. >> terrible. >> callan with a note today about udson, smucker and campbell, about why volumes are not going positive and they're

making up for it on price. >> good luck. costco is kind of wrecking the price structure. a lot of these branded products, with the premium brand, which is kirkland, and i feel like walmart, costco, and amazon are price cutters here. by the way, fedex, price cutter to some degree, and yet still takes a lot of share because 400,000 packages today because of the u.p.s. strike. didn't strike. sorry, the negotiations. that's why fedex is doing so well. you know, carl, the idea that the fed was going to come in and be dovish when they have so little to be dovish about just shows that there's a level of ignorance at the macro level that is completely different than what the microlevels say. >> you mentioned the teamsters. if david's reporting on the writers, and we got some chevron progress in australia on the lng, nat gas down in europe this morning i morning. >> nat gas is an international market. never used to be. my travel trust owns coterra.

that's the one saving grace in this entire complex, which is natural gas used at home, is not up big. gasoline is up big. i think one of the things that people are focused on endlessly is why are the saudis not helping us? >> all right. what's the answer? >> i wonder whether it's political. are the saudis -- do the saudis want to elect a different party? >> you mentioned that yesterday. >> i can't understand why they're not helping. they are the swing. we're not. we should be. now, we're producing a little bit more, but you saw the recount. our companies just have discipline and they're not going to violate the discipline, because they want to make a lot of money. >> speaking of which, the spread between our b.o.b. and retail gas is, what, $1.30 at this point? the spread there is amazing. >> yeah. valero. interesting. although, some downgrades to the refiners. i don't trust that. i think the refinders aers are a lot of money.

the most aggressive buybacks of the entire market are the refiners. i think the only thing that has been brutal is the ipo market, and when i'm looking at these ipos, they're not really holding up. the first day seems to be good or the opening. >> arm had a very good first and partially second day. instacart, really, intraday, faded quick. and calio did not perform particularly well after the initial exuberance. >> the shopify relationship was hopeful. >> arm is still above its bid, up $51. >> this anchor tenant, i mean, anchor tenant, what is that? what is that, federal realty? >> you're talking about these cornerstone investors who both came in, in arm and instacart. >> all that means is companies

that don't have to worry about what multiple they pay, so they take the float down. is it market orders that is driving these opening prices? >> i don't know. i mean, instacart is now only a buck above where it was offered. calio also came to market at $30. >> cava is down so much now. first trade, $42. now $31. i guess they could say it's still up. >> klaviyo, right? klaviyo. >> it's a bit of an oddity. at what point do we start calling instacart maple bear? what is that like a "sesame street" -- oscar, maple bear. >> do you understand the genesis of that? >> the genesis? >> yeah. >> not at all. >> okay. i do. i was saying calio but it's klaviyo. >> you say klaviyo, i say klaviyo. let's call the whole thing off. they are calling the whole thing off. have you seen that deal? look, i mean, still, if you're goldman, goldman-sachs, which

you're not, remember the other day i said when you were down at goldman, and you were like saying that i meant that you worked at goldman, which i wasn't, but goldman's got to be still happy the deals are getting done. >> got them done. they're still above where they sold them. >> and morgan stanley got this splunk-cisco, so there is kind of a -- >> morgan stanley did, and a very small new investment bank was actually cisco's lead advisor as well. somewhat surprising. a true boutique. >> is the mojo back? >> i think the mojo is starting when it comes to m&a. i don't think it's back. it's too early to say it's back. >> pipeline? >> $28 billion deal like the one we were just discussing with the two principals behind i want and it certainly gets people's attention. no doubt. all cash. by the way, i still don't -- those explanations from gary steele as why he sold were not sufficient in my mind. >> not sufficient? >> no. were they to you? >> i thought that he would have -- if he had stayed there

another six months or year, i think the stock would be higher. >> i understand that you think your business is going to be enhanced by cisco, but again, when it comes to shareholders, you're selling at $157. that's it. it's over and done with. >> maybe you should be a buyer of cisco, because it's a cash deal. why not buy cisco? it should have a higher multiple. it's much more software. >> i would have liked to hear a little bit more in terms of what it was that he saw in the future they felt like, okay, i'm willing to take a 30% premium. by the way, you go back two years, the stock price was higher. >> yeah, but you also had this disarray because doug merritt left. he just left. it was like they photoshopped him out of the picture. adobe. how's that doing? >> we'll find out maybe in a year who got the better deal. >> but i do like cisco on this. my travel trust sold it incorrectly. i did not think it could continue to go up, because i didn't count on cisco having such a blowout quarter. it was a fabulous quarter.

cisco's doing quite well, and i think that's a terrific opportunity to buy it, despite that david said head and shoulders pattern and he stayed away from those. >> you know i have. look at that. yeah. by the way, you can go back. remember when cisco was one of the -- at the turn of the last century -- >> when it was at $400. >> half a trillion dollars for a brief period, the largest market cap company. there was ge and cisco. >> yep. >> and exxonmobil. >> when did the other cisco pass this? >> jim, you briefly mentioned fedex. they crushed by about 20%. they raised the low end of the guide. you mentioned the split between fedex and u.p.s. year to date, jim. by the way, fedex is going to put in some year-to-date highs here, i think >> fedex didn't -- fedex got 400,000 parcels in the u.p.s. deal. and i can tell you that the -- what they got was sticky. they went for long-term

contracts. raj, i can't say enough about him. he got contracts from yellow freight, only about 5,000 a day. but you can have express revenues down 9%, and yet you still had operating income up. that was thought to be impossible. the planes are updated. they're getting rid of the md -- remember the 11s that you were worried about that were burning fuel. >> i was? remind me of things that i don't even recall myself. you're like my back-up memory. >> i am. you're d-ram, but i'm western digital. i have a hard drive. >> right. >> now, one of the things that i think is amazing, carl, is that this company, in the old days, i happen to think that fred smith gave raj a great hint but he's going for one fedex. in the old days, when you had the conference call, there was freight, which was different from ground, and different express, and it's going to be one fedex. they are saving $1.8 billion. the costs continue to come out. this is remarkable.

he's doing a fantastic job. i got to tell you, he's got a tough opponent here. the most profitable quarter ever for ground. i mean, they should be losing a lot of money >> yeah. >> so, anyway, pretty good. >> last week was the anniversary of him telling you we were going into worldwide recession. >> he's sticking with that, but i will tell you if this is what they do in a worldwide recession, who knows what they can perform if things get better? this is the same thing. gary steele's been talking about macro headwinds, chuck, macro headwinds, fedex, macro headwinds, so people at home must think, what is jay powell thinking? jay powell is thinking about the $6 annie's macaroni and cheese. he's got a sense of the common person touch. >> guys, i want to hit a few things that we haven't got to yet. all the -- many of the content producer stocks are up. we've got a lot of news this morning. disney's up, fox is up,

paramount, warner bros. discovery, netflix all up, perhaps on my reporting from last night and this morning that, you know, the end to the writers' strike may be near. we'll see. 9:00 a.m. today pacific time is when they meet face-to-face again. my understanding is based on conversations with people close to the negotiations, there were very few remaining points. that certainly seemed to be the hope. however, if, in fact, that should change, and the writers show up with more asks than had been anticipated by the producers, then you might have a different outcome. there was a good amount of optimism about the possibility they could finalize a deal today, and you can see what's happening there. separately, we got rupert murdoch stepping down as chairman of fox and news corp., and then we've also got this other story that we haven't gotten to, but it's a company that i follow somewhat closely. tko. it was only a week ago that i sat down with the duo who run that company, remember, it includes wwe and ufc. there's a new deal involves our parent company as well.

they are moving smackdown where the rights expire on fox to nbc universal, to peacock, to usa, to all of the various ways that we have to distribute it. also, they'll be producing four primetime specials a year that will air on nbc. so, "smackdown," i'm told it's for -- similar rates, about a billion and a half, but the market doesn't like this deal at all. you can see. i want to understand a bit more behind that. you've got "raw," which my understanding is may be paired with ufc in some fashion for a new tv rights opportunity, but jim, looking at the reaction in the marketplace to this new deal, and again, i'm told a billion and a half, but i want to make sure i understand everything else behind it, they don't seem to like it. fox had the rights. apparently didn't potentially compete for "smackdown."

coming again back to usa, and that's -- i think it's going to be a five-year deal. >> well, that's rather remarkable. again, they're my agents, so i'm reluctant to opine on it. carl, it's a no-fly zone opining. >> no, no, no. >> i'm the only one who can opine, the only one who's allowed to interview ari as well. >> what a terrific time to talk about the 20-year. >> i'm going to -- well, i'm going to opine a bit, but i want to do some more reporting and understand why investors would decide to take the stock down as much as 13% at one point based on the information we've got at this point. a press release is out. there's some reporting on it. they do not have the economic terms in here. again, i'm hearing a billion and a half. and that the pricing went up, but we shall see. >> in the meantime -- >> how about that rupert murdoch? i'm kidding.

>> oh, i see. segue there. >> you want to talk about tesla instead? it's down 2.3%. >> "the atlantic" story? >> which story is that? >> never mind. check it out. >> the u.s. attorney in the southern district coming after him for his glass house. >> don't throw stones there. >> he's everywhere. >> the neural link is very interesting, because if you put a chip in your head and there's often an antenna coming out of your head, you have a 5% chance of death, but you have to typically sign statements saying that you were willing to kill yourself and that's why you're able to get it. >> you have an antenna coming out of your head? >> right here. >> meanwhile, if you are fully paralyzed and can suddenly -- >> no, no, it's fantastic. i'm just saying that the people who want this, you have to understand, there's nothing for them, so it's great hope. >> yet another musk-related company, obviously, after tesla and spacex. but not unimportant what they're

trying to accomplish there. >> you know, it's hard to find anything that's up today. >> what do you mean? i told you everything that's up. disney, comcast. >> managed care is up, and crowdstrike is up. fedex is up. okay. >> so -- >> bristol-myers is up >> we didn't mention darden. comps up five. olive garden up six. they are seeing, jim, seeing it much easier to hire labor than they have in the last few years. >> i'm surprised the stock is down, 3.5% yield, i like the numbers but there are always people who hate everything. can i just say, having been part of the, when i was in college, when the war was raging between our nation and the great nation of vietnam, it is incredible to see that star behind me and that we are allies and president obama's been there, and i just want to point it out. having just read "the battle for the imperial still" and understanding what nixon did and what kissinger did, and it's

behind me, and i just -- i think you have to point it out. that's just not a usual flag to see, and our countries reconciled, it's really extraordinary. >> it's extraordinary. >> they do love americans. i did some work there a couple years ago, supply chain. >> you spent some time there. >> they love america. >> i can't believe -- look, anything can happenif our countries love each other. just pointing that out. i don't know. i mean, you -- hey, "smackdown." >> how about "smackdown"? love jon cena. >> he's brilliant. i think he's a brilliant actor. my wife things he's a brilliant actor. >> he's great. >> is he in "the morning show" yet? >> you -- i'm surprised there are no football references. >> oh, now you got to remind him? >> by the way, this thing, the 14 pro, antique. you're going to see me 15 pro, partner. >> you got a star cameraoming o your head. look at that.

>> it's like a crown, a golden crown. >> stay right there. >> king cramer. >> ho chi minh city. my draft number is 364. what can i say? >> you can always get in on the cnbc investing club with king cramer, just sign up and find out more at cnbc.com/jointheclub. >> we had our club meeting today at noon. >> very nice. >> take your star with you wherever you go. >> bond report. some relief in yields, but the two-year, still 5.15%. dollar index above 105. we're not done with data, by the way. existing homes and lei coming up in about 12 minutes.

(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.

the one thing we can never get more of is time. or...can we?

this is watsonx orchestrate: ai designed to multiply productivity by automating tasks. when you watsonx your business, you can build digital skills to help human resources spend less time generating offer letters, writing job reqs, and managing schedules... and spend more time on humans. let's create more time for your business ...with watsonx orchestrate. ibm. let's create. - it's polite to thank someone when they do something nice for you, isn't it? well, how about when they do something brave for you? let's show veterans our gratitude. ask your local veterans affairs office how you can help. the more you know. . another day of not a lot working including tech names. look at nasdaq 100 laggards. broadcom at the top as we talked about that story from the information which jim thinks is maybe not quite right. we'll watch that.

the dow down 150 and 4362. stop trading with jim is next. is it possible? with comcast business... it is. is it possible to help keep our online platform safe from cyberthreats? absolutely. can we provide health care virtually anywhere? we can help with that. is it possible to use predictive monitoring to address operations issues? we can help with that, too. with the advanced connectivity and intelligence of global secure networking from comcast business. it's not just possible. it's happening.

( ♪ ♪ ) ( ♪ ♪ ) ♪ (when the day that) ♪ ♪ (lies ahead of me) ♪ ♪ ( seems impossible to face) ♪ ♪ (a lovely day) ♪ ♪ (lovely day) ♪ ♪ (lovely day) ♪ ♪ (lovely day) ♪ a bank that knows your business grows your business. bmo.

it's time for jim and stop trading. >> new ceo over at starbucks

continues to the policy of raising the dividend 4 cents. look, it doesn't sound big. i mean, but i will tell you this, the thing that matters about starbucks it's become a hated stock and that's the mistake. there's a new starbucks every 7.5% increase in the dividend. new starbucks built every nine hours in china. that's not slowed down. china does have -- you buy china. china needs people to hire starbucks does it. i've not seen anything that shows starbucks nurse china. america did $28 million more. i'm looking forward to luxman being the more than just the operator, the face of starbucks. i think he's going to do a good job. wish him well. i think people should stop give up on starbucks in china. >> not worried about the threat --

>> not as much as people say. they have so many more starbucks they can put up. starbucks is like apple. people are still buying apple. the perception the our country, which has become so gloomy about anything, is that starbucks is doing badly in china. >> i hear you say it's a hated stock. >> it's hated. it is. >> oh. >> now you have -- move a little. what is it? >> there you go. what is that? >> anyway, my travel trustest on starbucks. we'll be talking about it. there are stocks that have become pariahs that i think shouldn't be because they have some sort of taint that has to do with the communist chinese, let's call it that. i think it's probably wrong. >> tonight. >> we have one of the most exciting companies out there. i'm pro nuclear. put my cards on the table ta. constellation energy, the cleanest energy in the country.

joe dominguez will put it in context. people better realize you got to get rid of coal. eventually natural gag gas, even though cleaner but it has methane. by the way, southern's nuke plant is working. anyway, constellation is interesting. can't wait to talk about it. >> the uk and some of their net zero u-turns getting a lot of attention in europe today. >> how is ford doing with those? >> jim. we'll see you at 6:00. "mad money," 6:00 p.m. eastern time. a lot more on rupert murdoch stepping down as chair of news corps and fox also pal len tear's alex karp on his company's a.i. push. >> he's gotten polite. he's a statesman! >> energy barely hangingn. ckn mont.o copy that. make a hard left down the alley. network's got you covered. [please confirm requesting back-up.]

-changing route. -go. roadblock ahead. ...back up, back up... reverse! reverse! next level moments, we're 30 seconds out. need the next level network. [north corridor, hurry!] -coming through! -or 3, let's go. the network more businesses choose. transplant received. at&t business. ♪ opportunity is using data to create a competitive advantage. ♪ it's raising capital to help companies change the world. ♪ opportunity is making the dream of home ownership a reality. ♪ ...and driving the world forward to a greener energy future. [applause] sometimes the only thing standing between you

and opportunity is someone who can make the connection. at ice, we connect people to opportunity.

your record label is taking off. but so is your sound engineer. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire good thursday morning. welcome to another hour of "squawk on the street." i'm sara eisen with carl quintanilla and david faber live for you as always from post nine of the new york stock exchange. take a look at stocks, more fed

indigestion. the s&p down a full percent. the nasdaq down 4% and the dow given up about 200 points. you have every sector right now in the red. it's being led lower by consumer discretionary, materials, real estate and technology. energy faring the best almost flat on the session. 30 minutes into trading. big movers we're watching. deal of the day, cisco buying splunk in a deal worth $28 billion. more on what that means for both companies, investors and the rest of technology later this hour. kb home under pressure on the back of its latest results, beating estimates, but the number of homes delivered and average selling price fell in the quarter. fedex rallying after cost-cutting measures helped offset, quote, ongoing demand weakness. more on that story in a moment as well. >> let's get back to rick santelli on a busy morning for data. hey, rick. >> absolutely, carl. leading economic indicators for

the month of august down 0.4%. that is the 17th consecutive negative month over month change in a row. last month was revised from minus 0.4 to minus 0.3. why is that note worthy? that's the highest or smallest negative number since this was positive in march of last year. we're expecting august existing home sales and everybody waiting with bated breath to see if it's under 4 million units which it has not been the ten years. how does it look, diana olick? >> existing home sales in august fell 0.7% from a seasonally adjusted annualized rate of 0.04 million units. that's a miss. the street was looking for a slight gain. sales down 15.3%. this read is based on closings so contracts likely signed in june and july when the 30-year

fix in the high 6% range and moved to % and stayed there. inventory isn't getting better. 1.1 million units for sale in august, down 0.9%. down over 14% year over year. inventory at a 3.3 month supply. 6 is considered balanced between buyer and seller. tight supply turned prices higher. median price of a home in august, 407,000. the realtors say supply needs to double to moderate these price gains and sales continue to be weakest on the lower end where there's no supply and sales down across all price points, nearly flat in the million dollar plus range and in that range they were higher in both the south and midwest. i would just note that the 10-year yield on a tear today and that's what mortgage rates follow. >> yep. sales follow that. thank you. diana olick. another important data point that i wanted to mention today

because it's thursday and because it was kind of a wow number, even though we have been getting used to the strong numbers, jobless claims, another dip in the number of americans filing for jobless claims down to 201,000 for last week. it's a low number. in fact, the lowest since back in january and maybe there's some noise in there around labor day, sure, but continuing claims also backing up the trend. that's a proxy for the number of people that are basically staying and receiving unemployment benefits. another decline in the lowest level since the start of the year. so if the trading today and feeling today was all about absorbing the powell message of higher for longer, which i think he leaned a little hawkish yesterday, more than expected, and certainly got that backed up by the forecast from the other fed members, this is not the number the markets or fed want to see. it's great we have fewer layoffs and americans filing for unemployment claims but it also makes the question about sticky

inflation persistent. they've shown that they're willing to do more about it. here was a money sound bite i thought from powell yesterday that just summed up the entire press conference. listen to what he said. >> we're prepared to raise rates further if appropriate and hold policy at a restrictive level until we're confident inflation is moving down. >> it's not necessarily new. we've heard the message from him before but he hammered it pretty well and as a result he got what he wanted which is the tighter financial conditions. yields are up, dollar stronger and stocks are lower. >> i'm thinking about lags. that's all i think about is lags. >> you're not wrong to be thinking about lags. the problem is nobody knows how long the lags last and how severely they are felt. >> the market continues to believe they will be because

we're talking about cuts next year. >> not as many and later. >> that's the other headline. we have a dot chart, plot chart, the dot plot chart, augs always funny look like video games but here's what's shows. 2023, there's the rate. and basically what you need to know is that most of the members of the fed, all their forecasts of where they think rates are going, they can raise rates again this year november and december. there's '24 and what that shows is that they're lowering rates a little bit but not as much as they had back in june, in other words they expect rates to stay higher for longer and they don't expect to be cutting much next year. there's a disconnect of where the market thinks there's going to be a cut next year and the base line rate lower than where the fed is and that adjustment starting to happen and the market will catch up with the fed. the truth is the dots are stupid because they don't know what's going to be happening this time next year and needing to cut

because they think unemployment will barely right and gdp going to fall. if you think about the soft landing what's the argument for cutting. >> we have england. >> both hiked. the uk that was a close call 5 to 4 vote. they thought we should be raising rates and they still have a strong inflation problem and worse than ours. they took comfort in the weaker than expected inflation numbers and want to see lags and see that policy is starting to work in terms of lowering inflation and weakening the economy. they don't want to do too much damage, central banks now are in let's try to do no harm let's wait but ready to stand guard because we don't want the market to think we're not vigilant on the inflation story. >> showed the chart yesterday in terms of how much the cost of everything has gone up in terms of paying for credit.

>> paying for credit. >> five-year personal loan is 20%. >> credit card loans 20%. mortgage rates starting to see the impact on housing oo, borrog now is expensive and will have an impact on the economy. the bigger question why hasn't it had an impact so far on the economy and a lot of stimulus out there and a lot of pent up demand and a lot of covid quirks and nobody knows if that's going to end next year. >> yeah. >> a lot of cash. >> lot of cash. >> adam parker with us at president biden to talk about this and a lot more. >> i was listening to you. the dots are stupid and the lags. hard to know what data point will matter when, right. if you listen to santoli, there's 17 data points and the stock market is ripped for the last 12 months. i don't know if we need to use that data point as predicative.

the dots we knew there were too many cuts in the price the last 6 to 9 months. has he said anything dovish ever this cycle. you don't know when people will react. i did meetings in the midwest and new york the last two days and the number one question i get is about the same market breadth question. what do i do with the big seven. how do i sort of triangulate around my exposure to google, apple, microsoft, et cetera and what's the case for maybe a broadening out. some m&a is a good sign. that usually means there's some activity in value. i think the case comes down to margins expanding for more companies and i don't think that's likely. the big seven do well relatively. i don't think we're going to get the rally that everyone is calling for. buy small caps because they look cheap. >> you need to believe the estimates are more achievable

and expand more. look at what the big seven are reporting. i don't think they're reporting disappointing numbers. when i look across, maybe microsoft will take longer to get their stuff working, maybe google probably has stuff that could be better than people think. nvidia bet against their numbers net. you look across the big ones and don't want to say they're worse than everyone pems the case for broadening is labor costs come down a lot. i don't think labor looks like it's weak. materials are up in the bottom. they've come down but they're up. i don't know if that headwind to tailwind is going to be that awesome for those companies. i think, you know, my observation will be breadth is not that likely. the second thing from the recent meetings, i don't know one person who is like i looked at equities versus bonds at the beginning of the year and decided equity is garbage, i was over weight u.s. equities and owned a ton of nvidia. i think the point is people are going to chase.

most people's numbers are not where they should be when you type in the s&p or the cues and flows coming in rally year end. like last year where the first or second day of the year it reverses and people figure out what worked this year that they sell. that's where it feels to me from, you know, the 1012, meetings in the last couple days. >> is the earnings season going to be encouraging? look at consensus, doesn't sound that great. >> you know, two or three conferences on industrials and health care and data out of those and talk to people and read what companies say. we do it all systemically. i think generally mixed to slightly positive is the news. i didn't see any -- maybe eaton saying the backlog plateaued. a couple data points where things slowing. i think you have to be worried about companies like that that have high inventory. across the economic sensitive, i think we always get torn is the s&p 500 is not the economy. the s&p 500 is a list of awesome

companies that are like the best of the economy, right. you aren't necessarily going to have earnings collapse. that's where we all get torn with. so sure, we're going to, you know, react once in a while when hawkish. i think this is part of that goldilocks of transitioning to lower growth and i don't think the fed is going to, you know, ruin any of the -- >> no, no. i'll take the other side which is that even if the fed is done raising rates, which it's not clear it is, so the expectation is they don't cut early next year, there's still a lot of tightening going on. that's significantly higher rates, still qt happening. i mean all of that should hurt financial conditions and as far as the earnings outlook, raises the interest expenses for companies. >> sure. everienutional investor for months is trying to figure out who has debt due any time soon. very few stocks people are like i didn't know they had a -- i mean it's more about what's in the place now.

i hear you, i think in years three through ten you don't want to say i paid 20 times forward for equities when bonds are high. in the next six to nine months it's hard to make that call. we could have made the argument january 1st, earnings are -- 2023 earnings expectations are higher now than in mid february and that's unusual. typically analysts are too optimistic and things are rolled. i think the debate comes down to what do we think happens to earnings next year. if up versus this year maybe the stock market can do okay. if people think they're flat or down we have a problem. i might -- my bias 70-30 fwlish terms of thinking about it because i don't think many people are like pro participating and psyched about their alpha and had the correct allocation and i don't think earnings season is going to be bad. i think it's going to be okay. remember we have like the highest nominal gdp in our lifetime and it's eroding from that level. it's not, you know, so i think it's slightly better than people

think. the only thing i worry about people think we're going to end the year higher. you get nervous when singing the consensus tune. >> next time we'll talk about whether or not strikes or shut downs can interrupt a chase going into year end. >> i'm going to make a mental note to not come downtown during u.n. ever again. >> oh, boy. >> i did -- >> i did the subway, of course, but walk in meetings midtown reminded me i have to be on the road during the two weeks. good to see you guys. >> thanks. >> the drotsz stupid. that is what it says? >> do you not agree. >> it's a crowded call. >> i have never been a fan of the dots. they use them to send a signal. but they don't know what's going to happen and they change. >> tmi. >> it's tmi. >> i think the point. you know, you go to try

variant's website, type in powell, zero search results. why would anyone add value interpreting what's going on when they don't know what's going on. we do work in the price because that's where we can add value. why listen to me or anyone. >> thank you. >> my website -- >> i like, like put names on the dots too. like -- >> that's part of the fun. >> when in school who made the team and who didn't. let's get -- >> greenspan would hate the dots. anyway, thank you. >> good to see you guys. >> as we head to break our road map for the rest of the hour. huge deal in tech today. cisco buying splunk. what it means for shareholders. >> more rate hikes and higher for longer. what the fed hawkish stand means. >> and palantir's alex karp joins us, his first television interview since the a.i. summit last week in washington. a lot more sk"squawk on the street" continues in a moment.

rude. who are you? i'm an investor in a fund that helps advance innovative sports tech like this smart fitness mirror. i'm also mr. leg day...1989! anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. i go through a lot of pants. before investing carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com. ♪♪ we're not writers, but we help you shape your financial story. ♪♪ we're not an airline, but our network connects global businesses across nearly 160 markets. ♪♪ we're not a startup, but our innovation labs use new technologies to help keep your information secure. ♪♪ we're not architects, but we help build stronger communities. ♪♪ we're not just any bank. we are citi. ♪♪

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

when we close it it will add roughly $4 billion of arr to our existing run rate of arr and put us close to $30 billion if not over by the time we close it, and it will put us over $20 billion in software on an annual basis. >> look at it today the premium that we're delivering for our shareholders and if you look at our historical stock price this represents a great outcome for our shareholders.

>> cisco's chuck robbins and splunk's gary steele speaking about their deal and why it makes sense for investors. we've talked about how we tried to get answers from them on how the deal fits into the business cycle, the macro and splunk's motives for getting out at this level in cash. >> cisco, listen, he explained to a certain extent the business rationale behind it in terms of what they're going to be able to do in securing so much of the work flow data and so much for their customers. i think there are shareholders who may be questioning why now when gary was talking about the great prospects for the company that he believes they had. if you believe there was great prospects why did you sell? that said they did so at, what are the numbers now, their advisories tell me 38% to the 30-day and 68% to the last 12 months, volume weighted average closing prices and multiple was

seven times the next 12 months. seven times revenue, about 29 times free cash flow. those are not bad multiples, but they didn't get their all-time high, that's for sure. even going back to a couple years on splunk. we'll see about execution, integration. he's staying with the company. or i should say gary is staying with the company and they see it close in the next 9 to 12 months. >> dan i hves ives says it's a across the board and we'll see more m&a in software and strategic. >> we are i think m&a is coming. this was -- i had no idea that this one was out there. it has been a perennial takeover candidate has been splunk, and there were talks prior actually to the current ceo taking the reigns, but with -- with cisco,

but generally speaking i am starting to think we're coming off a low base but things are going to potentially heat up. this is an important deal, and one of the largest of the year. >> yeah. cisco is the worst performing dow name below the 50 day since may. splunk not the only name on the move today. to dominic chu with a breakdown of more. >> so to the point of that discussion other bigger cyber security stocks like crowdstrike, palo alto are mixed in early trading on the heels of that deal. splunk driving the upside for crowdstrike, not as much for the bigger names, the hybrid side of things like pal la al to and fort net down. the technology side of things the computer chip stocks broadcom down on information that alphabet and google trying to ditch broadcom as an artificial intelligence chip supplier to move that effort in house. looking to replace broadcom with

marvel technology for the networking interface chips that it uses in data centers. now broadcom is in the s&p 500 tech sector and down 3.5%. of course alphabet is a mega cap s&p 500 services stock. marvel up 0.3%. in the in the s&p 500. keep an eye on those names. back downtown to you at the stock exchange. >> all right. dom, thank you. i thought of another synergy between ciscop and sflooung tell me. >> they are both sponsors of the mcclaren f1 team together. teammates. >> really? >> as is cnbc. anyway, i'm sure you asked him about that. >> that was our first question. >> yeah. fed holding rates steady but pencilling in another hike before year end and higher for longer. what that means for the housing market that is showing cracks. data to chew on. we're back in two minutes.

good night! hey corporate types. would you stop calling each other rock stars? you're a rock star. you are a rock star. rock stars. please! do you know what it takes to be a rock star? i've trashed hotel rooms in 43 countries. i was on the road since i was 16. i've done my share of bad things. also your share of bad things. we know that using workday for finance and hr makes you great at your job. but that don't make you a rock star. ted! ted! ted! oh ted in finance. you're a rock star!

hey liz in hr? can you do this? unless you work with an actual rock star. you are a rock star! thank you! who's the new guy? hi, i'm ozwald. hello ozwald. give it up for pam. pam, you are a rock- [silence] i wasn't going to say it. ♪♪

fed schar jay powell indicating more rate hikes

potentially ahead but a higher rates for longer stance. here to break down what that means for mortgage rates and the overall effect, robert refkin ceo joins us now. feels like housing is taking a turn for the worst here with mortgage rates making new highs. are you seeing that? >> we still have more buyers than sellers. you can see that from multiple offers. looks like inventory levels have hit their low. we saw last week the largest increase in the inventory of the year and that has been the constraints. >> what does that reflect, the fact that inventory has bottomed? >> what it reflects is you can't stop the five, diapers, diplomas, diamonds, divorce, and death. these life events create movement. this past sunday i was at an open house 47 mercer, prime soho, multimillion-dollar renovation, but this family would have never sold but got married and had a baby. >> the train moves on.

>> the train moves on. >> there's been redfin data that suggests one out of ten sellers is selling because they have been called back to the office. >> return to office has been a catalyst for us. we see it across the country. we talked about san francisco as being a buying opportunity because because had moved back to the office. we saw after 12 months of year over year declines in prices, last month the first increase. >> is that a moment? is that worth highlighting or just sort of a blip and, you know, we go back to normal? >> i was just in san francisco in the bay area on monday and tuesday, and speaking with the agents they're seeing either neutral to positive. we're a not seeing things get worse. >> are people just dealing with the higher msortgage rates or putting more cash. >> unless mortgage rates go to 8% we'll see buyers accept these rates.

more all cash offers. in new york city 60% of purchases were all cash. in the country has been around 24, 25%. now it's in the 30s. >> 8% you think is a breaking point. not 7. that would suggest the fed has more work to do. >> he doesn't want to say that. >> don't want to say that. i think 8% will be a shock to people. however, this rate 7.5%, i don't think we're going to see any big change in demand at.5, 7.75. >> prices? not coming down? >> although we saw exist home sales down year over year about 14% this past month, prices were up 4%. >> higher for longer can't be good for your business. >> higher for longer isn't good for the real estate market. it looks at 4 million seasonally

adjusted of annual homes sales, you see that is the bottom given that people have to move. >> wow. robert, thank you for joining us. appreciate it. >> thank you. >> reality check on housing from compass. still to come here, we'll have an interview with palantir's ceo alex karp, talk about the future of a.i. and why pausing that technology is a bad strategy. first a quick programming note. a week away from cnbc's delivering alpha investor summit. scan the qr code, visit cnbcevents.com/delivering alpha for more. we're back after this. is it possible? with comcast business... it is. is it possible to help keep our online platform safe from cyberthreats? absolutely. can we provide health care virtually anywhere? we can help with that. is it possible to use predictive monitoring to address operations issues? we can help with that, too. with the advanced connectivity and intelligence of global secure networking

from comcast business. it's not just possible. it's happening.

welcome back. i'm kristina partsinevelos with your cnbc news update. ukrainian president volodymyr zelenskyy arrived in washington this morning to meet with members of congress. he is set to sit down with president biden later today as the president tries to get congressional approval for $24 billion in aid to ukraine.

india suspended visa applications by canadian nationals as the diplomatic crisis between the two escalates further. this week canada claimed india was behind the assassination of a sikh separatist leader on canadian soil. india made the visa announcement hours after canada's high commission said it would adjust staff presence in the country because of social media threats. boston college issuspended men and women swimming and diving program for hazing. just weeks before their season was supposed to begin. the university didn't release any details about what sparked the suspension but said it does not tolerate hazing in any form. >> thanks. kristina partsinevelos. let's get to steve covac with a news alert on microsoft putting a date on the rollout of co-pilot. hey, steve. >> carl. satya nadella was just inside here and announced that co-pilot, the a.i. assistant that is coming across a bunch of

products and services from microsoft, that's coming out for windows 11 that means anyone with windows 11 machine can use co-pilot next week. september 26th. a date that will be included in a free update to windows for the current users. if you don't have windows 11 you will not be able to use it but update it. they're going over the features and incorporated in everything from your outlook e-mail to paint and to your cell phone. it can take in text messages from your cell phone and interpret those and plan your day, and it things like that. they're going over a ton of features that co-pilot will be able to do. there's more to come. we're expecting new hardware, carl, this is their surface event so laptops and tablets on the way too. back over to you. >> steve, i don't want to stop you from getting back in and hearing about the features but put it in perspective. this is a moment in terms for generative a.i., $30 a month i think is that the price point

that's been discussed for co-pilot? i am curious how it's going to help you in your daily life? that is interesting. that is for -- they haven't announced for the enterprise version, the version for microsoft 365, $30 per user per month. i haven't heard them announce the availability for that yet. this is for windows 11, david, so when you fire up your windows machine you will be able to use the features. as far as that enterprise version we're still waiting to figure out when other companies can go in and buy that. they haven't announced that yet. >> all right. we'll let you get back in there. more to come there. important moment for microsoft and co-pilot. >> quick update from me involving the writers strike. face-to-face meetings yesterday and you can see the stocks are reacting to our reports that they're close. 9:00 a.m. pacific time when they get back together to try to what i have been told by a number of

people familiar with and close to the negotiations hammer out a final agreement between the producers and the writers that would end the wga strike. again, always unclear until you're there, but the hopes were and the optimism seemed significant yesterday on both sides they were down to a few enough issues that they might be able to conclude yesterday, although again that remains unclear and the hope is they can come in today and hammer those out. we'll keep you apprised if there are developments. they don't start until 12:00 p.m. eastern, 9:00 a.m. pacific. rupert murdoch stepping down. we'll bring in julia boorstin. hard to argue he is not the most significant man of media over the last let's call it 40 years i think in terms of the influence that he's had.

>> yeah. certainly had a massive impact on the media landscape. if you look at the way he built ap empire and split up the empire news corp from fox and selling off the entertainment assets to disney for $71 billion, really shaping the landscape that we're in today focus in on live news, many sort of questioned that wondering how much potential there was there. in light of cord cutting that is seen as valuable and i just have to say, david, we should not be surprised he's stepping to this emeritus role. he is 92. it does mark the end of an official era at news corp and fox. >> stepping up of -- i mean lack ylan is running fox, but he's chairman or cochairman. does it mean anything in terms

of lackland's overall responsibility. he's not overseeing news corp but that is a murdoch controlled company as well. >> yeah. i think that these -- this change in title for rupert murdoch may not change inch terms of the day to day but look at the future of the two companies you have to see news corp which was a newspaper company increasingly becoming a data company. becoming a company that's focused on sort of digital content and whether it's for real estate information or sort of the digitalization of the subscription business of the "wall street journal" a shift there. when it comes to the fox business which lackland murdoch is running, the question of how there's going to survive in the new streaming landscape they own an ad-supported streaming service. i suspect rupert murdoch will be involved. he has the emeritus title. the facts that lackland murdoch has been running fox so long now

i don't think there's going to be that much of a change in terms of the day to day. >> this is one that transforms media and wall street because murdoch's impact has been felt across the political landscape in the u.s., in the uk, and australia. >> yeah. there's no single figure you could argue has had more of an impact in terms of the way news is distributed and -- >> the original -- >> certain -- i know it's funny i did have an opportunity to ask him, is "succession" based on you, he said nah. >> totally. >> rupert said that. >> rupert said it's not. really? do you watch it? he said no. my daughter does. >> julia, thanks. >> palantir kicking off a summit in d.c. stock on a tear this year and alex karp will join us after a short break.

welcome back. palantir kicking off its inaugural software for government in washington, d.c. today focused primarily on a.i. and emerging technologies. frank holland is down in d.c. and joins us with a special guest. good morning, frank. >> good morning, carl. that's absolutely right. i'm here with the co-founder alex karp. thank you for being here with us. >> i'm delighted to be here. >> you're kicking off this inaugural summit today. a lot of u.s. leaders here in government and the defense and other areas of the government. right now today so much focus on a.i. and the potential of a.i., what is palantir's focus when it comes to its work with the u.s. government? >> there are two things. one is palantir related but more

importantly, the u.s. has every major provider of a.i., which in every other industrial revolution you've had diversity of countries that had the talent and the products. this evolution they're in america. how do we get the u.s. government to use innovation from providers, very few of these providers work with the u.s. government. in part because many providers have had a somewhat timid view of helping the u.s. governments the silicon valley motto, i get rich, you get nothing and, obviously, they extended that to the u.s. government. so my focus and our focus in d.c. is one to basically embarrass other people in a.i. to work with the u.s. government. it's like we're doing well here, you should also get involved. to talk to legislators, to explain to them that way too few of our dollars are spent on a.i.

palantir is one of the companies that has produced high demand, so how do we get more commercially proven products into the u.s. government? how do we share knowledge? that's the part we're doing here. we have a lot of clients, many of which are sensitive and they talk to each other about what they're doing and what's worked. >> i do want to ask you a few days ago you were in senate majority leader chuck schumer's a.i. meeting, the press and public not allowed in the room. a lot of big name tech leaders there, bill gates, sundar pichai, mark zuckerberg. what was said there? the headlines it was about regulating a.i. and government regulation and i want to ask you, do you think the public should have been allowed in the room? >> well, so the over arching discussion was how do you advance artificial intelligence,

meaning how do we allow commercial enterprise in america to adopt a.i., develop a.i., and provide it to the u.s. government and enterprise, while simultaneously mitigating some of the obvious risks of a.i., namely, one we don't know where the road is going and what happens if generative a.i. becomes so powerful it's a risk to human kind? so that is a real issue and there's a lot of consensus that we have to have some way of mitigating the risk. there are other discussions of on the way there, how do you have artificial intelligence that has governance, guardrails, can prove it's not discriminatory, and then there's the issue i am passionate about, given the risks we also have to model as one of the greatest risks our adver tarries, russia or china, develop tools superior to ours and change the world order. i thought it was a productive discussion. i guess it's an unpopular view occasionally you have to begin

discussions in private but it is my view, and i'm sure at some point these discussions will be open and no ledgislation. in the end they have to say this is what i really believe -- it's hard to get people to show up and kind of go naked. but they're not going to go naked in public with public scrutiny. there's super hetero genius group of people there from union to tech leaders among tech leaders you have more corporate people then you have the freak show -- >> referring to yourself. >> some understood. we showed video of you next to elon musk and you said how do you get to use a.i. in a way that doesn't hurt humanity. that's a question he's been wrestling with and talking about the dangers of a.i. were there in depth discussions about how to use a.i. responsibly as you mentioned so it's not discriminatory so it doesn't actually hurt humanity? >> that's what we discussed. >> do you have details you can

share? >> i can tell you what i said which is i said look, there are two camps, there's those that think a.i. is safe and dangerous, and i'm in the third camp which it is dangerous and if we don't work on it, our adversaries will and we will lose our human rights. that was my position. and, so i think that is the -- it is what am i doing in d.c., what am i doing every day both as an individual and as the co-founder and leader of palantir is, pushing america to adopt an a.i. with governance in the commercial context. what does governance means? it means you can look at the out product, output of a large language model or inputs into algorithms and say is this something that protects our data, our health records, makes sure they're not used in a discriminatory way. on the battlefield is there human supervision in the chain where we make lethal decisions and where does the data come from, who controls it and can ratchet this back and ratchet it

up and do we have superiority that is so great that our adversaries are afraid to attack us. the standard for the u.s. can't be parody. we're benevolent actors in the world despite discrimination from the comparative perspective, and the best way to make sure that we have a safe world is to make sure that our adversaries know our weapons are far superior to theirs. that's what i'm interested in. >> did you have a chance to speak with senate majority leader schumer and do we need a czar, department of a.i. regulation or something like that? >> we are going to have regulation and there's -- and some forms of regulation i support like what the regulation i support is we must -- the u.s. as leaders control the risk to our civilization of out of control rogue a.i. we need -- it's both a combination of regulation and people who can implement that

are technically and philosophically proficient. it's a rare class of person because you need to be able to in an unbiased way look at what someone is doing and report if there's a risk to our civilization. >> i want to ask you, you don't think the public should be at the early stages with this much magnitude? >> my job is to produce technology that transforms and puts american allies in a superior position and to advocate for government structures. i am doing this in public and in private. what i can tell you is i'm telling you exactly what i tell people in private, whether it's senator schumer or leaders of the world on my employees or people abroad, whoever i'm meeting, i am telling you the same thing. you can be rest assured you're hearing in public what i said in private and what i say in public and private is, there's a real risk here, but the upside is that america will outperform all

other western country because we produce the technology, legal structures that allow us to implement it and the best talent and most innovative. on the military context we're poised to win. we have to win when poised to a. it's great to hear this color and the philosophy behind how we think about a.i. and regulation. i'm curious whattist going to mean for your business because there has been a lot of enthusiasm and excitement in the market around palantir as an a.i. play. what does growth look like from government, from commercial, from international as we adopt generative a.i.? >> i think for us and for everyone, what you're going to see is radical growth in the u.s., slower growth in europe. growth in the u.s. because people are going to adopt the best, most robust, most useful technologies, and very quickly. what you're going to see in the market, and then i'll get to us,

is you're going to see in the market -- you've had a massive interest in a.i. many of these products deliver poetry and will make -- allow me to do -- write an essay maybe i know nothing about. the products are going to do well in the sense that people that are going to pay for them will have output differentials. you'll change the margins of a business, rebuild the supply chain, move a company from individual points-based company to a portfolio may of managing it. those companies are going to succeed in the u.s. market. how are we doing? it's very early days. you know, you don't want to be out there being too optimistic. we're being very careful to move slower than we could. we de facto cannot keep up with demand for our a.i. products. we built precursors but not yet understood.

the customers understand them because they want to make them more precise and change the underlying of my business within days. and what we've seen is, in the last month, a 50%, 50% increase in people using our aip product in a month. so, you know, the other thing about -- >> can i interrupt you for one second? we have another question for you from the new york stock exchange. i want to get some anchor questions in as well. >> alex, it's david faber. i just want to follow up on that. in terms of productivity and what's available to the enterprise as far as the adoption you're talking about, one step down from threat to humanity but threat to workers, where are you as far as jobs will be replaced versus simply aided to go work on higher end things? >> this is a super important question. you know, typically technology is misaligned with the worker.

so, there's obviously a lot of concern among working men and women that radical increase in technological development will decrease both -- lead to a decrease in jobs and put pressure on their salaries. i think a.i. incorrectly implemented. not long ago we had 1% of the u.s. hospital care market. now we have 16%. what is going on with this radical increase? we're making doctors and nurses more effective. we're making factory workers more effective. by the way, one of the most attributes of a.i. that's not been discovered yet and will be discovered is you can take manufacturing that's maybe been cultural specific to japan or korea, we have one company that's a japanese company producing a highly technical product in america just like they produce in japan with american workers. and why can they do that? because through enhanced software, ale gorithms and a.i.e

can control the manufacturing environment for americans as if it was japan. that means america works -- you get the agility, creativity, ingenuity of america with methodologies we have not been able to produce here in the largest and most important market in the world. so, i think -- this is a message that's going to take -- we actually have to show rather than tell because workers are going to be skeptical. but it's actually true. >> we can keep this conversation going on all day. also announcing two new commercial customers in the private equity space. i know you said there's more demand for your products in the financial space as well. thank you. hopefully you'll come back. back over to you guys. thank you. >> frank, thanks. we'll be right back. ( ♪ ♪ )

( ♪ ♪ ) ♪ (when the day that) ♪ ♪ (lies ahead of me) ♪ ♪ ( seems impossible to face) ♪ ♪ (a lovely day) ♪ ♪ (lovely day) ♪ ♪ (lovely day) ♪ ♪ (lovely day) ♪ a bank that knows your business grows your business. bmo. (ella) fashion moves fast. setting trends is our business. business grows your 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. new projects means new project managers.

you need to hire. i need indeed. indeed you do. when you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria. visit indeed.com/hire and get started today.

taking a look at shares tko. wwc gets together and starts trading. the renewell of the smackdown goes to nbc from fox but the market clearly not happy with the number. i'm hearing 1.5 billion. "squawk on the street" cties teth.sonnu

♪ (captivating music) ♪ (♪♪) the first law of thermodynamics states that energy cannot be created or destroyed. (♪♪) but it can be passed on to the next generation. (♪♪)

good thursday morning. i'm carl quintanilla with sara eisen on the floor of the new york stock exchange. why m&a may be a trend to watch and staples and discretionary. later, after 14 consecutive interest rate hikes from the bank of england, a pause today. impact on international equities