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

and currencies ahead of europe's close. speaking of m&a, a massive deal in tech. why cisco bought splunk and what it might mean for more m&a in that space. topping the tape, higher for longer. are stocks setting up for a test of the august lows? senior markets commentator mike santoli is with us. does feel like stocks are playing a catch-up to bonds, which were ahead on the higher for longer. >> to a degree, yeah. we're sort of arguably in that test that's under way. the s&p 500 about 0.50% where it bottomed out in mid-august. it's also the lower quarter ep end of stocks are waiting to see if longer term treasury yields were, perhaps, topping out around those october highs. now weave clearly broken higher. what happened with the fed yesterday, even in broad strokes, as we've been saying, not a radical change. they're done or near done. any moves come slowly, they'll

be careful. they did remove those potential rate cuts, however anything longer than six months is all kind of hazy on the horizon. what it did do, though, powell said, we don't know how restrictive we are. he doesn't want to get dirty with the neutral rate. you know when you see it. how do you see it? when the economy slows down. that's the message the economy is taking away. the higher yields are rubbing against the main raw nerve in the market right now, which is can the consumer handle what's already happened in rates? obviously energy prices and all the rest of it. to me the worst case scenario is not the economy won't quit, it's running at a higher metabolism, rates have to stay higher for longer. it's we've already gone too far and the lag effects are going to catch up with us. >> small caps on the cusp of losing gains. >> small caps have broken down. they haven't been a great guide or bellwether.

the equal weighted s&p is struggling. the cyclical groups are more crucial to the outlook than mega cap growth stocks. they are down a fair bit because that's where all the profits are and valuation concerns and, yes, people worry about yields in the context of valuations. they're no cheaper than the rest just safer. to me the consumer cyclicals have been struggling. as i said, the august lows, maybe we just got to get a little more oversold and the seasonal weakness runs its course. we'll see if it can turn. >> do you think the outlook for the market and the outlook for earnings growth depends on when the fed cuts next year? >> i don't think it most immediately depends on that. i think the psychology is very dependent on, can we see our way clear to when the fed is going to be easing off, before the economy buckles. to me it's this late cycle psychology -- >> it's that the market kind of

assumes that once the fed is done raising rates, the next thing we look forward to is a cut. and the sooner that happens, that will be a big relief for stocks. >> i think my -- my take on it, we're going to have a few quarters of earnings. almost no matter what before the fed cuts unless something really blows loose in the system. we're not wishing for that. we want to see earnings progress from here and support equity valuations in the context of where the economy is before we get to the point where the fed's going to cut. i think powell told you yesterday, they're not going to be pre-emptive about the cuts. they're not going to be very didactic -- >> price early. >> yeah. they don't want to just trust what the neutral rate is and say inflation is going to come down because we're restrictive relative to the new utral weigh it's -- >> it's in emergency, break glass? >> i think it's going to be, we'll know it when we see it. inflation is going to come down. if inflation comes down, that gives the green light. other than that you don't have an escape hatch from the late

cycle feedback. >> i love the post-powell psychoanalysis. thank you, mike. our next guest is out with a new report saying it's unlikely rates will revert to levels we saw in the post-financial crisis era. the reason? policy lags, fiscal deficits, ambitious capital spending plans, particularly tied to the energy transition. joining us is carlyle group head of global research, jason thomas. >> thanks for having me. >> thanks for being here. what's your outlook broadly for rates? what's the view from carlisle? >> well, i think that we've been locked in this period of time where we've had this hard versus soft landing debate. and, you know, i think, first of all, the hard versus soft landing is ill-defined. there's certainly a wide range of macro economic outcomes that don't fit neatly into either bucket. secondly, the question of when the landing occurs. there's no specified time hor horizon. we could be a year from now with the economy continuing to grow, inflation above target.

would we still be debating this question? i think the real lesson of the past year has been that there's some potential for a more permanent or more enduring upward pricing of capital and longer term period of higher rates for a number of reasons. >> like what? is one of them that the fed is just not going to be able to cut? >> yeah. first and most obviously, you have total spending in the economy that remains above levels the fed believes is consistent with 2% inflation level. consumer liabilities are overwhelmingly fixed rate. the bulk, of course, mortgages. the average interest rate paid on the outstanding stock of mortgages is still 3.6%, lower than it was in 2020. so, there has not been much of an impact from rates on household cash flow. secondly, you have extraordinarily large fiscal deficits. 6.2% of gdp at full employment. this leads to after-tax incomes of households and corporates.

that's about $1.2 trillion larger than we would expect at this point in the cycle, which also, of course, supports spending, making it harder for the fed to cut rates in the near term. >> jason, if you're following along at home and higher for longer is the message hammered over and over again from the fed and also it sounds like you very much buy into that idea, should you be reducing your exposure to stocks? >> well, i think there's actually a lot that should be encouraging about this. as we move past this hard versus soft landing debate, and, you know, people stop waiting for the landing, you're going to start to see a pick up in capital market activity, which has been paralyzed by this sense of waiting. i'll wait for the landing if i'm a seller or issuer to get top dollar. i'll wait for a hard landing if i'm a buyer waiting for better prices. so, i think the signs of deal volumes increasing, the signs of ipos is actually something that should be very encouraging. of course, there are parts of

the market that i would say, you know, do look, you know, pretty expensive given the expectation that discount rates on those future earnings, maybe it's somewhat higher than people had been anticipating. >> right. are those areas that everyone talks about being expensive? is it obvious? >> yeah. i think it is. you know, again, as we mentioned, there is a lot of defensiveness in some of these companies just in terms of the sheer volume of cash flows they generate. and just the fact their growth generally persists through cycles. you know, however, i do think that people are misplaying the a.i. revolution. because they're really loading up on those high beta stocks, related to the hardware and infrastructure. when, in fact, the revolution, most of the earnings growth and productivity is going to be downstream and accelerating drug and therapy development, ex accelerating software

development. that's an area where the hype is real, but, perhaps, people have not correctly mapped that reality into income statements. >> for sure. part of that is just the difficulty and timing the delivery of these use cases, which i don't know, is q1 too ambitious to think we might actually start to see the rubber hit the road on some of those ideas? >> i do think that we have seen already 25%, 30% increases in productivity related to software development. i think we're at the earlier stages as it relates to pharmaceuticals and therapies. there are some use cases that we are talking about a 2024 phenomenon. much of it, of course, is further downstream. again, getting that timing right is critically important when thinking about the price at which you want to enter those stocks. >> we'll leave it there, jason. thank you very much for joining us. with some of the commentary from carlyle. meantime, broad com is lower

on reports that google wanted to drop it as an a.i. chip supplier. our kristina partsinevelos has more on that story from the information and some of the pushback today. >> broadcom not only builds google a.i. chips which also provides specific ip that allows chips to talk to each other. google is broadcom's main customer -- custom chip customer. if that relationship were to end, it would deal a huge blow to broadcom's earnings which is why the stock is down 2.5%. this may be an overreaction for two reasons. first, this could be a negotiation tactic. google doesn't like how much broadcom is charging for the chips and considering switching to marvel, who also makes custom chips. google may just want broadcom to cut prices. broadcom provides that specific ip that allows chips to talk to each other. it's not easy to replicate or build at scale at cost. broadcom is making news in south korea after antitrust

department, tim to the ftc here, said they would fine broadcom for $14 million for an unauthorized deal to samsung. on a positive note, broadcom is inching closer to the vm acquisition which would help further diversify broadcom from large chip customers like google and apple and add to its future earnings potential growth. analysts at wedbush, evercore, bernstein, they all defend broadcom despite this information report and saying this stock drop could be a buying opportunity. >> meanwhile, this remarkable piece in the journal about what they're calling apple's spectacular failure in building its own modem chip? >> just a few weeks ago, like you said, apple had to succumb and sign another contract with qualcomm because they couldn't create their own wi-fi chip in house. it was too difficult to replicate within this period of time. this shows, though, the larger trend the hyperscale companies,

google, amazon or aws, i should say, even meta, they're all trying to vertically integrate, create their own chips, move down the supply chain so they should push out the chipmakers. this could be a threat to many chipmakers, including nvidia, in the near term. what we see today with broadcom and google is an example of it, even if it's not true right now. >> just shows how hard it is when some of the best have trouble making it happen on their own. thanks. kristina partsinevelos, a ton of chip news. still to come, the street's growing increasingly bearish on the consumer. why that may lead to more m&a, especially the food space. the co-ceo of blue owl and the overall market sentiment. "squawk on the street" will be back. the dow is down 172 points. s&p down a full percent. i was just frustrated... i almost gave up.

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kd home lower after orders missed and q4 margin guidance missed. management saying they continue to see strong demand despite higher interest rates. the entire sector is under pressure on the back of these results. existing home sales, which was a miss. tin creasing worries about housing affordability as we continue to see treasury yields go higher, mortgage rates follow. that puts pressure on consumers. >> 24 consecutive months of down year-on-year. pretty amazing. the fed and the bank of england may be keeping rates steady but with high inflation in place, u.s. consumers are feeling the squeeze. barclay's sees retailers moving down, says headwinds range from the savings draw downto student loan repayment. ubs says if $10 billion shifts away from soft goods to repay loans, it would mean a 2% overall headwind on industry sales. then there's piper finding

student loan survey, 34% plan to cut back on grocery once repayments resume. and speaking of grocery, td cowen held a summit with package food, walking away with one theme, forecasts for next 12 months need to fall. the analyst joins us. fascinating discussion where you say, not a lot of conviction as to when or how. >> yeah, that's right. and i think the part of the issue is when you try to break down reasons for why volumes have been weak and why sales are decelerating so sharply, you come up with five different reasons. delayed impact of elasticity, reduced snap funding, a long list. the problem is you can't really focus on one big reason for it that's transitory.

as a result, i think that it's too premature to assume that food -- that consumers will just slip back into normal shopping president earns, say, in september when they stop traveling and go back to school. and i think there's a lot of scratching heads going on. not a lot of conviction from the companies themselves as to what the driver is for sales growth to stabilize and return to positive. >> but, robert, isn't that why the stocks have been so weak? food stocks have really underperformed. how much is already baked in? what are the expectations? >> yeah. i think that's a very fair question. i launched coverage here a week ago. the reason i didn't have more underperforms is i performed a sensitivity analysis to try to look at, you know, what happened the last time that food companies had to reduce price, reset margins in response to weak volumes? that was like 2018 and '19. when you put it through that and

you assume that valuation multiples kind of come close back to normal, you don't get a lot of downside to the stocks. so, as a result, i have more neutrals than normal. i normally have a lot of underperforms but not at this time. >> so, is m&a bolt-on the answer from here out? is campbell's svos a major tell? >> absolutely. a major theme from our summit, especially in light of smucker buying hostess as well, the pattern is when food growth slows, the big companies accelerate m & a in order to buy growth and improve their portfolios. this is a time when you have more capacity to do it. they paid down a lot of debt since the pandemic. so, a lot of our outperforms are on digestible, higher growth companies like fresh pet, lamb west and i don't think they'll get bought out tomorrow, but i do think that they are in play

longer term. >> you think lutz is in play as a takeover target? >> over time, yes. it's still family controlled but you have a board that's very diverse. and any -- i would argue, not entrenched. i think realistic. but they have a lot of wood to chop. they want to improve their operational efficiency and they have a great runway to do that. i'm a big fan of their new ceo and i think he can get it done. >> he comes on the show a lot, off earnings. you also like smucker, which i'm sort of surprised about because i feel like it's been hated and underperformed even worse than some of the food companies. marco isn't thrilled about the hostess deal. not sure how that's buying growth, to buy a company that's multiple hundred years old. why do you like smucker? >> yeah, i certainly got a lot of pushback on it.

it is a -- a lot of questions about why now? i like smucker for two reasons. one is, this is a company that has truly changed its commercial model for its core business. i think that's underappreciated by the street. they have inbested more in data analytics and management category and that improved their biggest customer, walmart. walmart is the fastest growing customer out there because of consumers trading down. smucker has improved their relationship there, gained category advisership and now walmart is 34% of their sales. secondly, look, i'm going to take the other side of concerns that people have about indulgent snacks like hostess. i think consumer demand is resilient and will continue. there's a lot of worry that those drugs will penetrate as

much as 30 million consumers. i've worked with the td pharma team here, which is excellent and forecasting something much lower than that. and i think that's more realistic. i think the reality is different than the concerns on gop1s. >> there's a lot of theories floating around how it's going to change consumer habits. ro robert moskow from td cowen. the ipo class is struggling to hold onto gains seen on the first day of trading. earlier trading, arm fell below the $51 offering price. we'll talk more about what this could signal. meantime, fedex, big earnings beat, stock close to year-to-date highs. more about that quarter on cnbc.com this morning.

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watching shares of snap today. the company announcing its snapchat plus subscription service has reached more than 5 million subs in over a year since launching, up from 4 million in june. shares down about 4% this morning in what is admittedly a tough tape today. >> european markets set to close in just a few moments. negative across the board as well, across a flurry of central bank decisions. in england, sweden, norway and turkey. of course, we're watching all of them. the one catching everyone's decision is the bank of england's decision to pause after 14 straight rate hikes. the boe monetary policy committee narrowly voted 5 to 4 to keep chief policy rate at

5.25%. the minority was inclined to raise is and a lot of wall street firms expected that to happen. they paused. ecb govring councilmember saying he expects rates will most likely stay stable at the next meeting in europe. the swedish and norwegian central banks both opted to hike interest rates. the pound is falling against the dollar by about 1% post-announcement. it's come back a little bit. ubs says it looks like the end of the rate hiking cycle. so, it was a surprise. it's one the market would welcome normally but it's interesting that everything's lower because they're teeing off the fed. as far as bank of england is concerned, look, they saw a dip in inflation yesterday. that was good news. if you look at core, what central banks are targeting, it takes out food and energy. 6.2% is still a very elevated level away from a 2% target. yes, it's better than the 6.9% they saw in july to get 6.2% in

august but it's still high. it's not fully clear the central banks are done or that they're going to be in cutting mode any time soon. >> what's the phrase, sufficiently restrictive for sufficiently long. >> we know it when we see it, is what powell said. they don't know if they're there. let's get a news update this morning. kristina partsinevelos once again. hi, kristina. the federal government is responding to desperate pleas from new york officials to help with the city's migrant crisis. the biden administration said late last night it will allow nearly half million venezuela already in the united states to live and work legally for 18 months. the decision waves a month's long process to secure employment authorization and only applies to migrants who arrived in the country after july 31st of this year. alex murdaugh entered a guilty plea for a financial crimes. the judge accepted his plea but

did not set a sentencing date. rupert murdoch is stepping down as chairman of the board of both box and news corp. the companies announced the move will be official in november. the 92-year-old media mogul will be appointed chairman emeritus of each company and his son will be sole chairman of news corp. and will remain fox corp's executive chair and ceo. >> thank you. kristina partsinevelos. the co-ceo of blue owl is coming up next. we'll look at where they're putting $150 million to work. plus as cnbc celebrates hispanic heritage, we're sharing stories of influential hispanic leaders, like this one. >> to me it's very important to celebrate the hispanic heritage month because ultimately diversity matters and matters a lot. in cannot be the flavor of the month. ultimately is something we have to do on a daily basis.

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want to you consumer discretionary sector hitting a four-week low, not far from the lowest levels in june. down 2%. concerns about higher gas prices, about the resumption of student loan payments, higher interest rates lasting for longer. it's all hitting some of these consumer stocks that are tied to spending and the economy. the biggest losers in the past month, las vegas sands, etsy, bf corp and tapestry. a lot of retail losers. this is the cyclical part of the market mike santoli was telling us is starting to break down. now let's get post to post with bob pisani. >> sara has a great point.

these higher rates are weighing on the consumer discretionary sector, particularly where you borrow things like auto and home builders. kb home, that's a consumer discretionary, down 2.75%. this was -- look at this, 46, this was $55 a month ago. the whole group is starting to pull down. they trade etfs here on the electronic exchange. let me see if -- here it is. s&p home builders. this is the etf for home builders. that's down rather noticeably today. this was 85 at the start of the month. it's now 86. you can see this is not just happening today. it's down a lot today. we've been knowing about the higher rates for a while. another group that's been struggling with the higher rates recently are the real estate investment trusts. you know about the apartments, so they've been struggling for a while. that's been a subsector of the reit. here's crown castle. this is not apartments. crown castles is a big reit.

they do cell towers. this is at say new low. it's rather surprising because that was a sector a year ago, this was $200 stock in the middle of last year. it's been cut in half. another really forward popular subgroup of reits was public storage. a couple years ago this was a monster company that did really well. this was $400 last year in the middle of last year. $264 now. that's a new low today for public storage. again, really used to be super popular subsector, the storage stocks. reits, home builders all having a tough time on the higher interest rates. what's doing better? very little momentum in september. living up to reputation of poor month. you got oil at new highs. valero is at a new high overall. it's tough dealing with higher oil. tough dealing with potential for inflation higher for longer. back to you. >> bob, thank you.

let's get to the state of the private credit markets. our next guest oversees $150 billion in assets under management and says the space is in the process of disrupting the traditional lending model becoming a first choice for borrowers and increasing market share from banks. joining us is blue owl co-ceo. >> great to be here. >> is that why your stock outperformed, it's a play on the boom that's happening in private credit? >> our stock does reflect the secular trends towards private credit and really private assets generally. and across all blue owl, direct lending included. our business is about delivering investments that are stable, predictable, generally yield oriented. i think all of that in today's more uncertain environment is in favor. as a business, blue owl the manager, all of our revenues are fee-based. that makes our model very predictable. we're growing and growth is very visible to people. >> talk to us about how you're

taking share from banks. is it because banks are being more cautious? is it because the basel 3 endgame rules have been announced, are you licking your chops? does that mean for opportunity for private lending? >> the reason private lending is working for the most part and working and gaining share is we're delivering a solution that works. which is to say, at the end of the day we deliver for investors a really attractive risk return and for the users of the capital, we deliver a predictable private partner-based solution they like. and leak any product, you have to have a product that wins, a product that provides value. with regard to the banks, we're fundamentally in pretty different businesses. we're in the business of lending capital for the long term, making a decision about here's a commitment, we're willing to make to this company to support its growth for the next five, six, seven years. the banks are for good reason, largely inthe business of

moving as posed to storage, right? at the end of the day, they're underwriting and syndicating loans. they'll be back. the banks will be back in business. i hope so because we need that for a functioning xapt market, a functioning economy. private credit is a meaningful part of the marketplace. and will continue to be a meaningful part of the marketplace. >> do you see the weight balance between private and the banks in terms of credit? is it lopsided right now or how far before you start worrying about it being lopsided? >> today it's a favorable environment for what they do. we're happy to provide solutions and earn great returns doing it. and the banks, for reasons that make sense probably today, given the uncertainty, think about where we are with interest rates, think about where we are with market sentiment. if you're in the business of underwriting and trying to sell on that risk, it's not a very attractive time to take that proposition on, where for private lending we're making long-term solutions, delivering long-term solutions for great companies. so, it's a very good time for us

to take that on. we get compensated well for it. >> i believe you just had a big commitment from a large, middle eastern sovereign wealth fund. how are you deploying it? what's happening with the overall fund-raising market? >> well, we're very fortunate to be partnered with an exceptional organization, with extraordinary amounts of capital, and i think they and we alike see this opportunity to lend capital in this market to take that long-term view to do to private credit which is create a durable marketplace where we can provide long-term solutions. in particular, they and we alike are focused on the opportunity in software, in technology, the secular trends behind that industry and the quality of those businesses, which has been an area of great focus, particularly for blue owl. we have over $20 billion of assets invested in software businesses. as a result, i think we and they

together can continue to create solutions for a really attractive set of borrowers. >> higher for longer is the mantra de jour from the fed and now the markets have taken that message to heart, i think. higher interest rates stay high for a while. what does it mean for your business and for the trajectory of earnings in the coming year? >> so, we provide senior secured floating rate. at the end of the day our loans adjust continuously for the current environment. so, i always start with this statement, i'm glad i don't have to guess which way rates are going to go because our product works both ways. our product is just that. it's a floating rate. with what you just described, the higher for longer sentiment, well, that's good for us. at the end of the day we get paid more in a higher interest rate environment. so, that is reflected today. when we make a loan to a typical borrower is a large company, very durable and we're getting paid today probably 12%, 13%

interest rates on those loans. it's a very compelling proposition. >> geographically is the u.s. your favorite playground? >> no doubt there's great opportunities around the world. we particularly focus on the u.s. it's a strong economy. it's a strong set of credit rules. and wonderful set of companies to lend to. >> there have been some reports about in-fighting at the top of blue owl. i'm just wondering if there's anything you can tell us about that and whether it's resolved? >> fully resolved. frankly, as is often the case, misperceived. we've been growing as a company, than thankfully, a large market cap company and we've continued to grow our management structure. everyone is excited about the future of the business. i know i am. >> the future of the business, i ask you every time to reaffirm the dollar per share dividend by 2025 that you're still on track for that? >> keeping our eye on the prize

and that remains. >> thanks for joining us. still to come this morning, a look inside cisco's $28 billion cyber security deal for splunk. could the valuation be signaling more m i&as on the horizon? we'll talk about that after a short break. ng each other rock stars? you're a rock star. you are a rock star. no more calling co-workers rock stars. look, it's great that you use workday to transform your business. but it still doesn't make you a rock star. so unless you work with an actual rock star. hi, i'm ozwald. hello ozwald. pam, you are a rock- i wasn't going to say it. ♪♪ (swords clashing)

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striking a deal to buy cyber security company splunk. $157 a share and cash as part of its push into a.i. that is the focus of today's "techcheck" with deirdre bosa. what do you think, dee? >> several different angles baked into this deal. there's what it says about cisco and legacy tech, what it says about enterprise software valuations, and, of course, implications for the m&a market. cisco at $28 billion, splunk is its biggest acquisition. it signals where the company wants to go. at its core, cisco is still a legacy tech hardware company that's trying to pivot to software and services, bringing splunk into the fold.

that will not only help with top line growth but it gives cisco more heft in cyber security and artificial intelligence, two of the buzziest subsectors in tech right now. we've seen other legacy tech use the same playbook, like ibm and red hat. two, the deal could suggest enterprise software has bought them. splunk touched nearly $200 in 2020 and corrected aggressively with the rest of the space at the end of '21, falling to about 75 bucks a share. the $157 cisco was willing to pay, that could get other companies to perk up and think, hey, maybe we could get closer to peak valuations, too. or, this brings me to the third implication of the deal, they could be encouraged to do deals of their own. between a new wave of ipos and capital markets are signaling they're open for business. one analyst writes, cisco/splunk, quote, speaks to massive m&a on the horizon over the next six to nine months and big tech shows they're not

sitting back and letting them lead the a.i. platform. they will push regulators or find creative ways to do so. the last point i want to make is this deal could also be a sign that investors are starting to look for growth again, and that drive for profitability we've seen over the last few years is bearing fruit. splunk is still unprofitable on a gap basis but it has narrowed losses after it came under activist scrutiny last year. likewise, plavio came to market yesterday with narrowing losses, trading higher on its debut. we zoom out even further. look at the whole enterprise software space through etv etf, outperforming the broader nasdaq. >> that's what was so curious about the deal, that as management had a little bit of momentum, stocks obviously had momentum, last couple of quarters have been solid.

the question this morning is, why now? >> exactly. it speaks to the idea of valuation disparity we've been talking about over the last few years. the enterprise tech space is trying to figure that out. a 30% premium that brings me back to $157 a share. i mean, splunk hasn't seen that since 2021. arguably the peak for enterprise software, though not its peak. that's why it has important implications. there could be ceos in private and public markets, is there appetite for not just enterprise tech companies but still unprofitable ones narrowing losses. the timing is really, really interesting for a lot of enterprise tech companies. it could be a question between private equity and strategic acquisition. there are few big firms able to do a deal the size of a splunk. but there could be strategic m&a. this brings legacy tech into the picture. those companies are looking to reaccelerate top line growth. >> yeah, cisco, i.e., cisco.

thank you, deirdre bosa. cnbc's david faber reporting the hollywood writers strike could end today. his reporting coming up after the break. of course, don't forget about delivering alpha, one week away. still time to register. just scan the qr code on your screen. we're back in just a moment. ♪ ♪ every day, businesses everywhere are asking: 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.

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it's a pitch. get way more into what you're into when you stream on the xfinity 10g network. news alert out of washington on the government funding bill. emily wilkin has that for us. good morning. >> reporter: good morning. for the second time this week, republicans have fail to move forward with a procedural vote

that would eventually lead to voting on funding for the department of defense. this is really unheard of. i mean, just a rule going down in general is pretty rare as is and for it to happen twice in one week, last night the republicans came out of their all hands on deck meeting. a number of them sounded optimistic about moving forward. they had some new agreements put into place. but today shows it is clearly not enough. and this really did catch speaker kevin mccarthy by surprise. we caught him as he was leaving the chamber today, and he said he did not realize that there weren't going to be the votes to move forward on this, and he said, this is a whole new concept for him of individuals that just want to burn the whole place down and that that doesn't work. at this point really no clear direction on how this is going to be going forward in the house. there was a bipartisan bill released last night that may be a potential way forward, but we are less than ten days right now from the government shutdown, and it's just not clear exactly

what is going to happen to keep the government open. >> no, it's -- i mean, this was always going to be the risk with mccarthy and having the vets of his whole party. thank you, emily. we'll continue to follow it. not clear where it goes in the house or in the senate after that. the hollywood writers and studios could agree on a deal today. that's reporting from our own david faber who is back with us. what's happening today? >> they're going to start negotiating about six minutes from now, at least my understanding face-to-face yet again following negotiations yesterday that made a lot of progress on key issues that remained outstanding between the writers and producers. the hope is today could be the day they could reach an agreement. it's the negotiators on behalf of the unions who would then have to go back. the expectation is they are

empowered to get the thing nailed down in the room. that said, if there are more open items than anticipated by the producers, that could have the effect of derailing these negotiations. but, sarah, after a round of calls yesterday to people familiar with and close to the negotiations, as i've reported this morning, a good amount of optimism they can get there and hopefully and likely will during today's face-to-face negotiation. we shall see. >> it's good news for the stocks. >> the stocks have reacted positively to the possibility the strike, which has lasted more than 100 days, would be over. the actors are still out but there is an expectation that would soon follow. we don't know. >> any sense what is in the deal and how they resolve around new economics like streaming or ai? it wasn't as simple as we want more money. >> the residual checks are different than 25 years ago on

successful or moderately successful shows. you're right. key issues remain, can we get transparency, netflix, to understand what is going on with these shows and how successful they are. there was some agreement when they last met in late august. they made some progress on that. to your point, ai as well, they made progress. these are the key issues beyond simply increasing compensation. it really is how do we make sure to create a job that can continue to be well paying for writers over the next 20 years the way it had been previously. >> this notion if they didn't do it soon, it would not get resolved before the end of the year. why? >> i heard from people involved and close to it simply they're very close to the end in terms of what they're able to offer, that being the producers' side, from what i've been hearing. if they are unable to reach an

agreement today, it was unclear what more they could and might have to require a significant cooling off period to once again see what a significant amount of time meant in terms of the negotiating position from both sides. >> all right, keep us posted, i guess. >> yeah, i guess. >> six minutes it kicks off. >> now it's three minutes. >> okay. >> think they'll be on time? >> three minutes left. we have to check on these post-ipo stock prices. >> they haven't been good. >> arm priced at $51 last thursday, trending below that. instacart and klaviyo both priced at 30. cart narrowly holding on to its gains. klaviyo faring better with one full day. bankers certainly are cashing in. leslie picker has been looking at it this morning. leslie? the recent spate of ipos may not be creating much in the way of riches for the public market investors out there but the return of ipos means fees are back on wall street. the three large deals, we were able to calculate the fee pool from the last week.

in total the underwriters made $173 million for their roles in managing the arm, instacart and klaviyo deals. those figures don't include the green shoes for the latter ones yet and would cause the numbers to be higher. it's a welcome source of revenue in a corner of the banking industry that's been largely dormant for a few years now. that's especially true for goldman which led instacart and klaviyo and shared a co-lead role on arm. the firm brought in $43 million combined from those three deals which amounts to 13% of what the equity underwriting group that includes secondaries made in the entirety of the second quarter. jpmorgan, which had prominent roles in arm and instacart, came in second with $27 million haul, and barclays rounding out the top three collecting $23 million. however, the public market demand for the three large deals leaves many wondering whether this ipo window has staying

power which ultimately matters for the future of the bank's bottom lines. >> it brings us to the conversation we've had all week, leslie, the small float here makes it an unreliable proxy for the business model. is there a sense those float sizes may be getting bigger from here if there is more activity? >> i think it's partly the float side but the psychology on the market because they're kind of the guinea pigs, this psychology and momentum in play. they don't have a history in the most recent past, it catches fire. it's kind of trading more on psychology because of the small float sizes than you would see a company in the public market for a few years now. >> hawkish fed. leslie, thank you. leslie picker. and that really is the story of the day today.

higher yields, stronger dollar, falling stocks, even with the fed on pause for now, leaning to maybe doing more and holding it for a long time into next year. >> morgan stanley still looking -- >> dovish? that's a cut. >> a cut in march. now they're ahead. we'll see if they're right. west coast wapner yet again. let's get to "the half." carl, thanks very much. welcome to "the halftime report." i'm scott wapner back at one market. front and center this hour the state of the tech trade after the fed's even higher for much longer stance, the nasdaq hit hard following yesterday's meeting. that selling continuing today. we will discuss all of it with the investment committee including star fund manager glenn kachur with us exclusively right here today. we're excited about that. also joining me josh brown, jenny harrington and jim lebenthal. let's first check the markets as we always do. it's 12:00, noon, in the east, and we are red across the bo