we have the latest. it is friday, september 22nd, 2023. "squawk box" begins right now. good morning. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen. andrew is off today. it is friday. a lot of people glad we made it to this part of the week. not just us, but investors at this point maybe done with the week. >> terrible day yesterday. >> s&p had the worst day since march. if you looking at the week to date losses, the dow with modest advances. up 21. nasdaq up by 64. if you are talking week-to-date, s&p is down 2.7% for the week.

it is better than the nasdaq which is down by 3.5% for the week. dow down 1.5%. yesterday was a rough day. >> it was yields. the next board that we will show on the back of everybody's minds. >> investors. >> normal people are not saying oh, my gosh. 30 more basis points. we are sitting up and taking notice of the 10-year treasury now. how low we were for a long time with the back-to-back crises. >> right. if you look at the steep curve, that tells the story from the lows. the 2-year treasury is the same story. japan's central bank maintaining the ultra loose

policy. bank of japan citing uncertainty with the economies and financial markets at home and abroad. this is a big deal. the yen has been vehweak. there have been expectations to raise rates. governor euda indicated that would be the case. as soon as the end of the year, they would talk about finally ending negative interest rates. that has taken place for a long time. yesterday, ashley spoke with the prime minister of japan. we will show you that in a few minutes. he was speaking in japanese. we'll show you some with the quick interpretation. i'll give you the back drop. >> speaking to the interpreter with that. good idea. >> very interesting. this primary is trying very hard to get things up and running again. you have seen the nikkei out performance do very well.

we spoke to the economic club of new york yesterday. he said japan is open for business. they want foreign investment. >> everybody does. watching the saudis interview on one of our competing networks with mbs. i don't like that guy although i know all the bad stuff. he is engaging. >> they -- >> nefarious. think of the question. some guy posted something online that the country didn't like. he has the death sentence for saying something online. are you going to go through with it? he said i have to get rid of laws on the books that judges enforce. hundreds of antiquated laws on

the books that don't seem to fit in with the way we view the world. you need to get rid of the laws. what's the judge supposed to do? >> you are in a different country. jamal khashoggi. >> in that country. >> tom freeman has given him huge props in opening up society for women. trying to look at that and bringing the society forward and p find other ways to help society instead of relying on fossil fuels. he has done a lot to open those markets and try to change things. it weighs so heavily. >> go east of there. just as much brutality. we are asking questions now, but we certainly have let china do what it wants and traded with them. >> a new report in the

"washington post" today that looks at american companies that comply with the uyghurs. we are looking at other things and asking questions. >> you were talking about the ten-year and two-year. we know how -- we have an editor. the story with the headline was we may already be in recession and we won't know until six months from now. i don't see anything that indicates that in terms of labor. we don't know at this point. recessions do come on like that. we have a contingent of people who come in here to say here is what is happening under the surface. >> including yesterday.

we spoke to the duke professor. >> right. we had people saying here are the two risks. let inflation get out of control or staying too long and staying tight for too long and causing not a soft landing, but a recession. >> unnecessary recession. if you waited and waited for the lag effect. it is what dan was talking about yesterday. do you believe the effects of the higher interest rate play out quickly or more lag effects? he think there are more lag effects. >> you have all of the other things. $90 oil and a couple of strikes. now to washington with the possible strike, if you will, over the government. nine days before the government shutdown. kevin mccarthy hitting a dead end and sending house members home for the weekend after the faction of gop members blocked

proc procedural vote on the key spending bill. the white house is set to tell federal agencies to prepare for a shutdown. later this hour, we talk to arkansas republican congress member french hill. he is staying in washington to try to work out a deal. the clock is also ticking toward the uaw new deadline for what they are calling serious progress from ford, gm and stellantis on contract negotiations. if they don't get it, they he are threatening to ramp things up. 13,000 of the members have been on strike of the 150,000 members. the strikes could be expanded this afternoon. in a statement last night, gm says it is now clear that the uaw leadership has always intended to cause months long disruption. uaw leadership needs to put the interests of the members and the country over their own

ideological and personal agendas. gm has put five offers on the table and ready to bargain in good faith. it doesn't sound like progress has been made. we know the goals of the automakers are offering and the uaw needs are still wide. >> i don't think you will get 40. when i hear the management say these are record offers. all right. for 10 or 11 years, you were beneath. after the last ten years, a record offer doesn't mean it is as much as what they will settle for. >> if you understand what they gave up in 2007 -- i still go back to harry wilson who has been our best guest explaining what happened in the past and what he thinks needs to happen. a former republican at the negotiating table in 2007 said they gave up a lot.

he thinks it was insulting with the automakers started with a gain of 5% or 6%. that set the tone for this. they came in tone deaf and undercut the offer. he thinks the auto union is now asking for far too much and it has gotten to beyond a battle with god. harry said go for 30%. >> he worked in the obama administration. he has stockholm syndrome. things started seeming normal to him that would not have been normal if he were surrounded by -- >> he said a 30% raise would be fair. you cannot offer the legacy programs they ended in 2007. there is a way to do this to try to apiece all sides. >> record contract.

record offers. we use "record" loosely. i'm not impressed. you need to deal with inflation and if they are making 20% less than they were 15 years ago, then do it. early this morning in london, the uk competition regulator said the microsoft structure takeover of activision blizzard opens the door to the deal being clear. the cma blocked microsoft's first deal in january of 2022 on concerns it would restrict competition in the emerging cloud gaming sector. microsoft then revised the deal offering to divest cloud rights and new games published for the next 15 years. the regulator says it still has concerns, but said microsoft put forward remedies that the cma

concluded should address the issues. microsoft says it hopes to earn approval to close the deal before the october 18th deadline. this is a big deal. if the cma says you can't do it, you can't. there is no way of getting around it. convincing them to change their mind is the only way. activision shares up 1.3%. microsoft shares up .50%. >> you need to get with the program. probably get with the monarchy. there are a few things they need to deal with over there. news out from amazon. the company says starting early next year, prime video shows and movies will include ads. you get a break on what it costs? no. they are not making changes to the price of prime membership. they are sticking ads in there. you can get an ad-free tier for

additional $2.99 a month. no ads up to this point. >> we knew this was coming. >> streaming is worse than -- so many analogies to entertainment and the -- it is like selling ev cars. it's not working for the big three. streaming is very difficult to make money. first guy to figure that out. zas. i think he got in there and looked around and said how much with cnn? people are not watching. >> don't drag me into this. coming up, media news. we will talk about the writers strike negotiations in hollywood. rupert murdoch stepping down. what? he's 92. hold the presses. fox and news corp chairman.

supposedly totally robust health. new romance. >> he is still involved. >> i don't doubt him. later, former house majority eric cantor will weigh in on the washington shutdown. he had his issues with the republican party and the challenges ahead for speaker mccarthy. would you come on if you were kevin? >> yes. >> you areatin wchg "squawk box" on cnbc. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. (sean) i wish for the amazing new iphone 15 pro! (jason) sean! do you mean this one - the one with titanium? switch to verizon, you can trade in any iphone, and get the new iphone 15 pro on them.

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(vo) trade in any iphone in any condition for a new iphone 15 pro on us. only on verizon. (♪ music ♪) (♪ ♪) the walking tree is said to change its entire location in pursuit of sunlight (♪ ♪) where could reinvention take your business? accenture. let there be change. 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. 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. rupert murdoch announced he will step down as fox and news corp chairman in november. our next guest says he doubts the 92-year-old media mogul is really gone or leaving the scene. joining us is semafor chief ben

smith and author of the book "traffic." ben, i cannot take the other side. i agree with you. it is hard to imagine the guy who said you have to carry me out of here in a box is leaving the building. >> it is strange. his son has been running fox corp for a while is now really in charge. rupert murdoch's style of running the company with a lot of emails in late hours and wanders the office. he never was a traditional corporate manager. he was a massively influential figure. i don't expect that to change. >> why do this? he set up everything that is being signalled. >> he is 92 years old. he will at some point leave the building. >> he is in love again and on beaches. look at some 80-year-olds.

he is not the average 92-year-old. >> i think billionaires don't die any more. >> i need to separate "succession" from the real life. >> good luck. >> i know. i get confused. i need to bring myself back into the real world. so much of it seems like playing out like fiction mirrors reality. i guess they try to do it. >> the background shows the struggle for control and "succession" and the four kids. the oldest son lachlan is the one in charge. when he passes away, there will be a fight for control among the four. lachlan appears to be in control. >> this sounds like "succession." >> it isn't a character like

lachlan. >> composite. >> i think he is a very nice guy. he does not appear to work quite as hard as the character in "succession." he is running the companies from australia. when he was in los angeles, he was perhaps known for installing a rock climbing wall in the studio lot. he bought an incredible house. "beverly hillbillies" house. not cheap. he is running the company from australia. midnight to 8:00 a.m. that is something that is not happening. >> i thought it was like kendall because of walter. his thing was quiby or tubi. didn't that get written down? >> tubi. not supported ad digital.

>> what is it worth? >> i don't know. the problem is the strength with fox corp is the deal to sell the movie business at the peak of its value. great deal. there is not that much left of the company. fox news, bit of sports, other stuff. it is not really a competitive media company in the landscape of giants. it is hard to figure out. >> what happens to the company? what is the ultimate? does it exist on its own or bought up into something else? >> he put his son in charge of fox corp and news corp. he would like to bring the family assets back together. it doesn't seem shareholders want this. there are two companies adrift and it is not clear putting these two together solves that. >> it is a juggernaut. what will happen with

smartmatic? tucker. now a dip. now ratings are back to where it was. stock is back before dominion. >> fox news remains with enormous cash. >> it is the only one. >> it was the only one a few years ago. it is reckoning with the changing landscape. daily wire. megyn kelly. >> if you are in the group ththat does see a problem with the pov, fox is it. i'm not saying i'm part of that. >> they are dealing with the same thing that everybody is. fragmenting and their share is chipped away. the people who are paying bills are the people who have the cable cord.

that number is diminishing. like all of us, they have to figure it out and figure it with that one asset. they launched fox nation which is supposed to be the digital future. you have extra crazy. that didn't catch. >> there are some things on it. i thought about it a few times. jef jef jeffery dahmer? >> i don't want to see that. >> pier morgan interviewing serial killers. i might want to watch him. you are not a fox news? "cops" is on there. bad boys. >> pier morgan. he is in the news corp part of this doing tv for the times of london. you could imagine sticking this back together. >> he is on fox.

piers morgan is on fox a lot. he wanted him to take over for tucker at one point sdp. >> news right here. you imagine sticking this together. this is getting bigger. it doesn't seem like the boss' son living in australia will come in and takeover. there was a new york post story today. >> i read it. >> you pointed out to me this morning. >> the dashing young man will be taking over. >> the power behind the genius. >> now stepping in. it sounded like the kendall release. >> the core thing his tenure is known for is he took his eye off the ball and they drifted into the unbelievable plot around the election and mishandled the legal claims and settled for a massive number. >> he is getting farther along.

>> a good friend. >> ben, thank you for coming on. when we come back, bang of japan holding interest rates steady overnight. we have comments from the japanese primary on the economy and attracting foreign in inve investment. plus, ww, formerly known as weight watchers, shares are holding steady after oahpr made negative comments about weight loss drugs. we will have more on that stock when "squawk box" comes right back. 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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the bank of japan leaving interest rates unchanged overnight. japanese primary fumio kushima spoke yesterday at the economic club of new york about encouraging the asset management industry in japan and attracting more foreign investors. primary kushima led the session

with him yesterday and i asked about the negative interest rate policy. >> politically speaking, if they did end zero rates, would that make your agenda more difficult with the shrinking liquidity or would it strengthen the yen? >> translator: by government is monitoring the foreign exchange market with the high level ofvof vigilance without ru ruling out options. >> the bank of japan kept rates steady. the governor suggested by the end of the year, they do could e away from negative interest rates which has mired the

japanese economy for decades. you have seen what has happened for years. they need to get out of the negative interest rate policy to convince consumers to spend money and reinvest in stock markets. they need to find ways to see growth. they were making more in wages than americans in the 1980s. they are making 40% less than the americans. they have a huge problem with the death rate higher than the birth rate. they have 10% of the population are aged 80 and older. 29% of the population is aged 65 and older. that is the oldest in the world. great longlongevity. he is very aware, the prime minister, of the problems. he is talking about a new

capitalism. he wants to redistribute money to the middle class. he is aware of the demographics program. he is talking about the program to make it easier for working moms. they need stay-at-home moms to get back to the work force. >> i remember the yield curve and interest rates with which look like the trade. it is not over yet. you can still borrow. >> they did say that not just negative interest rates, but the yield curve and they may release all of those things by the end of the year. that is why the yen is picking up a little bit recently with the comments he made earlier this month and again today. that's the question when they can get out of this. back here, coming up, the latest on the auto workers strike noon deadline.

you need to see substantial progress by then according to shawn fain. it is looming. we will take you live to detroit. it has a great airport. newark is last? that's good. as we head to break, a look at s's&p winners and losers from yesterday. >> announcer: executive edge is sponsored by at&t business. next level moments need the next level network. 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. you know doug, ever since switching to workday

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good morning. w c welcome back to "squawk box" live from the nasdaq market site in times square. there is not a lot of action yesterday. dow futures turned negative. off 3.5%. s&p futures are up by 6 points. that comes after the s&p's worst performance yesterday. nasdaq is indicated up by 53 points. for the week, the nasdaq is down 3.5%. it has not been a great week for the markets. all right.

we promised we would talk about the auto workers strike. shawn fain is set to announce more strikes if substantial progress is not made by noon today. phil lebeau is joining us with more. is substantial progress being made, phil? >> reporter: ha, no. if you see the leaked messages from the uaw overnight. reports of the message ans sayi they want to drag out the negotiations. i would say they are as far apart as we have seen them in some time. let's update you on what we will expect to happen and we will talk about the leaked messages from the uaw and reaction from the automakers. shawn fain will have a facebook live at 10:00 a.m. eastern time. he will update the talks. as you mentioned, joe, if it is

not substantial progress, serious progress, they are expected to announce more walkouts. the walkouts would begin, if they are announced, would begin at 12:00 p.m. there are just under 13,000 uaw members currently on strike at three assembly plants. one in michigan, ohio and missouri. they have been getting $500 a week. that is the strike pay coming from the uaw. it is in the strike fund, if you will, to pay for those on strike. now to the leaked messages. these were messages that came out late yesterday and this has infuriated people with the general motors and ford and stellantis. they are saying drag it out. keep it going for as long as we can. create operational chaos at the automakers. one message says the beauty is we laid it out all in public and

they, the automakers, are helpless to stop it. by the way, we reached out to the uaw to see if it has a comment regarding the messages. we heard from the big three. from gm, ford and stellantis. they are furious with this. they are saying, this shows a callusness and lack of being serious. if we are not going to negotiate, then why say let's get to the and talk. is there true bargaining going on? that is the state of negotiations, guys. again, we do not expect any progress to be announced at 10:00 a.m. i could be wrong. there could being progress by sha shawn fain. >> i get it, phil. seeing it in print would cause the big three to be angry. that's the point of the strike.

we know why it happens. to shutdown operations and cause chaos. >> reporter: joe, you are 100% right. the issue is we have heard from a number of executives. we heard from jim farley and general motors and stellantis. all have said the same thing. let's sit down. quit the theme about they are not negotiating. one of your aides to shawn fain said this is the plan all along. >> i get it. strikes are acrimonious. they are ugly. we got rid of bananas here because of the flies. it's back. thank you, phil. >> reporter: you bet. >> tim higgins. you see it. >> it's still on your head.

>> tim higgins, wall street journal reporter. i'm glad you are not here in the studio. we're getting attacked. you saw the emails. did your eyebrows go up? >> you know, detroit executives are frustrated and flummoxed. what is more frustrating is there is no predictability here. over the course of the uaw talks in the last generation, there has been a pattern or predictable things. you start with a handshake. they progress. they get down to the wire. what shawn fain has done is thrown out the playbook. that is part of his strength and the automakers did not appreciate until now. >> any progress? what happens at noon?

what are you expecting? nobody knows. >> at this point, it looks like the strike will be extended. i'm looking for what factories will be striking. so far, the uaw has been selecting that is not harmful to the bottom line. maybe the hit is 50 million ebit so far to each company. that is not a lot, but it could be over time. if they go after the f-150 or esces can -- escalade, then it gets painful. >> i cannot think of a positive outcome for all of this, tim. i guess i'm worried about the big three's future given the

constraints they're under in a difficult transition to evs and how it is going so far. tesla's possible competitive advantage. if i were a worker and i saw how much subsidies in the i.r.a., i would be concerned. it doesn't work well in terms of making it a profitable endeavor in the united states. >> this is one of the challenges of the workers. it seems the detroit automakers did not appreciate the frustration in the rank-and-file class. not just frustration with the wages, but the changes that is going on to the economy and the industry. s also frustration with the rank-and-file with the previous

leadership with the fraud in the recent years. shawn fain has really used it to his advantage to rally the troops and whipped up wanting something big and a contract that is changing for their lives. that has detroit executives nervous because they are looking at the bottom line and the cost of that transition as the likes of that's raeally eating their lunch in the ev future. >> tim, thanks. phil, too. he is probably out reading more emails or texts. thanks to you, both. >> we will talk more about it today as we get closer to the deadline. when we come back, countdown to shutdown. republicans blocking a procedural vote raising doubts that congress can pass a bill before next week's deadline.

the house is now adjourned for the deadline despite what mccarthy said. congress member french hill will join us with more straight ahead. (vo) while you may not be a pediatric surgeon volunteering your topiary talents at a children's hospital — your life is just as unique. your raymond james financial advisor gets to know you, your passions, and the way you give back.

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box." i'm dominic chu with sectornomics. if you look back over the course of the last year fully, that gap has widened a bit over the course of the last six-to-nine months here where it is starting to track closely. rising interest rates is part of the story taking the allure away from the consumer staple stocks. we asked the data team over about which of the consumer staple stocks tends to underperform or outperform in

the fourth quarter. we looked at the average performance over the last ten years. according to that data, if you look at the underperformers in the last ten years, kellogg's is up 2%. phillip more ice is up 3% and general mills up 4% and colgate up 4%. the average in the last ten years. as the outperformance, check out land west up 14%. dollar tree up 12%. kroger up 11% and monster beverage up 10%. averaging in the fourth quarter in the last ten years. look at these to see the trends for the names, especially with the dollar stores. consumer staples for the sectornomics. we have more "squawk box" coming up. we have more on the potential of the government shutdown. see you in two minutes.

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house speaker kevin mccarthy spending lawmakers home after lawmakers avoid a stop-gap

agreement. some conference members plan to stay in washington to work on a solution. our next guest is one of them. joining us now, arkansas republican congressman french hill. what does -- what would just the outline of a deal look like, congressman, in your view, given the players that are involved? and you know most of these ladies and gentlemen. >> well, joe, it's good to be with you. we're at a stalemate this week and it's from us thating to the house majority conference because since the debt ceiling was struck where kevin mccarthy offered a proposal, limits save grow and president biden negotiated and we got the first proposed spending cut year over year in decades and reforms, we've been trying to pass the appropriations bills one at a time over the house floor. the senate got their job done.

but we have not gotten our job done here in the house. that's very frustrating because those bills are written at a spending level lower than the biden/mccarthy number and have conservative policy proposals in each of them. yet we can't get our republican conference on the same page to pass those appropriations bills. that's the most important thing. second thing, we need to have in our pocket a good, solid, resolution proposal supported by 218 republicans as well. i think that, joe, will center on border security. our phones are lighting up here with the continued look of security on the border and the immigration crisis that's made every state in our country a border state. >> we had a former house member from, i guess it was oklahoma. he was willing to single out some of the members in the house, some of that faction.

he actually just said they're in it for their own self-grandisement. i don't know if you would go that far but we just saw some emails from uaw participants of exactly what's going on. do you think there's part of that faction they like to watch the world burn? it never helps republicans when you shut down a government. it never helps. then you read the papers. you give the -- you give hakeem jeffries and other democrats, they just love this. they point, they laugh, they laugh at poor speaker mccarthy and disarray. the majority party is unable to govern in the house. some guys don't -- you know, part of that faction seem to relish in this. >> yeah, i think there are some people who like being in the

permanent minority, no doubt about that. when congressman boehner was speaker, bring bills to the house floor that have the majority of the majority. well, we've tried to do that. we now have the tyranny of the tiny, this handful of people that are blocking the majority of the majority from bringing up conse conservative policies that are more conservative in design and price to the biden/mccarthy debt ceiling deal. and that same majority of majority wants in their hip pocket a very conservative continuing resolution for four weeks that they believe they can get senate support on that will help secure our border and yet let us finish our appropriations bill work. we need the majority to win the day as we continue these discussions. >> they can always claim the high ground at what they are really interested in. and there's some truth to it.

you look at $33 trillion, what's been spent the last couple of years. they can always -- it will resonate with a lot of people that this is just out of control, drastic measures need to be taken. we're just -- we don't want any more spending. we can't do it any other way. we're left with no choice. they can always fall back on that, but i wonder what their real motivation is sometimes. because -- >> well, i think -- >> perfect can be the enemy of the good. >> right. reagan himself said when you're with me 80% of the time, you're 80% my friend. you're not my 20% enemy. we don't want to eliminate the good because we try to seek the perfect. i wish we had $4 trillion of spending cuts this year based on biden's avalanche of spending that's fueled inflation and uncontrollable border situation. but we've got to be able to get through the house something we think can be signed into law and that's what we're trying to do. we want the most conservative

policy out of the house because we know we have to negotiate with chuck schumer's senate because we have to negotiate with senate and to joe biden's desk that's conservative and responsible. that's what we did with the debt ceiling and that's where we're trying to end up this year that is not leading to an omnibus led by joe biden and chuck schumer. we don't have the authority to negotiate like we should and we end up with the priorities of chuck schumer and not the priority of house republicans. >> all right. congressman, more to talk about here, but -- >> more to do. wee ck a'rbat it. >> thanks, joe. >> "squawk box" will be right back.

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hey, john reese, jr. how's your father doing? to help reach your goals with confidence. my sister has told me so much about you. that's why it's more than advice worth listening to. it's advice worth talking about. ameriprise financial. good morning. stocks trying to bounce back after their worst day in weeks after the back of surging yields and a skyrocketing dollar. the clock is ticking on the big three in detroit to up the ante in talks with union leadership before more workers hit the picket line. a broader strike is seeming all but inevitable. and sticking with strikes,

two days of fresh talks and still no deal between hollywood writers and studios as those walkouts could last throughout the end of the year. rich greenfield will join us for what it means for investors. the second hour of "squawk box" begins right now. good morning. welcome back to "squawk box" on cnbc. live from the nasdaq market site in times square. i'm joe kernen along with becky quick. the futures aren't doing much, but der-- >> along with becky quick. >> no. i'm just thinking, strikes, $90 oil, ukraine, possible government shutdown. what happened in the '50s. do you remember the '50s? >> no, i don't. >> i don't either but i remember

"leave it to beaver" but they didn't have all these problems. eddy haskell was the biggest problem. interest rates are going up. the bond market is going down. >> happy friday. >> that's the only good thing. think about all -- lucky we're in the news business. >> well, lucky, except you get a front-row seat to all these problems. maybe that's the problem. >> strikes at hollywood. strikes at uaw. this is a serious one at uaw. >> and a potential government shutdown. >> no pandemic. for now. we have that going for us. interest rates are at 14-year highs. mortgage getting more and more expensive. groceries, if you can't pay your rent, you can't buy groceries. >> gasoline. >> gasoline. you see what i'm saying? >> and there is no pandemic. >> you're going to fall back on having a couple of days off. >> something to be grateful -- >> we did. >> the fed intends to keep

interest rates higher for longer, creating new challenging for equity investors. steve liesman joins us with more good news. hi, steve. >> i'm smiling because that's exactly the problem. as if equity investors didn't have enough to worry about. strikes and higher rates and government shutdowns. the fed has put two risks on the table. first, another possible hike and tighter next year. second, a higher long-term or neutral fed funds rate that could make stocks less attractive or more challenging in the long run. here's what fed chair jay powell said on wednesday at the press conference about the neutral rate. >> stronger economic activity means rates -- we have to do more with rates. that's what that meeting is telling you. in terms of what the neutral rate can be, you know, we know it by its works. we only know it by its works, really. >> yesterday on the exchange renowned economist john taylor,

a leading expert on the neutral rate, said it could be at or just below 4% compared with the fed's current estimate of 2.5%. >> it's creeping back up again. at least that's what the fed is saying. if that's the case, then we're going to see a normal interest rate, 2% inflation, 2% real, as 4%. maybe that's where we'll be eventually. maybe a little lower than that. but i think that's what people should think about. probably that's what's going through the markets right now. >> all of this hawkishness prompting criticism of the federal reserve. bernard bamell writes, they're behaving as if we cannot possibly have a sustained period of declining inflation and simultaneously enjoy healthy economic growth with low unemployment. of course, the fed's forecast will almost certainly be wrong. the problem for investors is while the fed may not be the best forecasters, they are the most important forecasters. its outlook needs to be central

to investment plans. it's something you have to think about, becky, when you consider what stocks may sense, which stocks don't make sense and which investments make sense. because if that hurdle rate is higher, it has to be factored in. >> we're not in a recession right now, are we, steve? >> i don't think so, joe. it's hard to look at the data and see that. >> that's what i mean. yesterday we had an academic on, i don't know if you were watching, the guy that came up with the yield curve -- >> inverted yield curve. >> yeah. he said they shouldn't raise, they should definitely start cutting because it's coming. i saw the piece today some business journalist wrote we could be in a recession already and not even know it. that has happened before where we backdated it and found out there was negative growth, but what are the chances, 10%, and you're 1%? >> no, the fed survey is at 48% -- >> of one coming.

we're not in one right now. >> recession is always backdated. it's always possible we're in one now. looking at the key data the national bureau of economic research looks at, it's hard to see we're actually in a recession right now, but of course, that could be. i think the issue, though, joe is the extent to which the fed felt it needs to be more hawkish. i have been relatively upbeat on the ability of the u.s. economy to not have a recession. i guess i start to worry now when i see these yields right now and i see it's going to remain and be more hawkish over time. it's a reason to be concerned. >> okay. >> and just -- the yield curve inve inversion, the inverted yield curve, it's usually a signal that takes 13 months to catch up and 13 months is coming. you know, it's been inverted for a while. >> you remember i did a story not too long ago, the time for the inverted yield curve to be

right is running out. it's close to that edge when it has already created a recession out there. plus the idea being, becky, that it's not the inverted recession, it's stuff that happens as a result. that's why i'm looking closely at corporate delinquencies, credit card delinquencdelinquen. those are the things that create recessions, of which the yield curve inversion is a sign, not necessarily a trough. >> trouble to come. thank you very much. we'll talk to you later. >> pleasure. our next guest says there has been a sentiment shift to the downside in the markets and that she's seeing a rise and desire for hedging. we'll bring in amy woo silverman, head of derivative strategies at capital markets. amy, you used the pool analogy. everybody was jumping in. it's september, it's getting

cold out and now everybody is out of the pool and it's closing. >> that's exactly right. if you looked a few months ago, i think we were at peak tech exuberance, folks were hungly buying call options. we couldn't get enough of it. i think the one nuance in options, becky, is not just that it points to whether a sentiment is positive or negative, it's also a little tail that wags the dog situation. when those calls are purchased in the market, it actually exacerbates upside. but the same thing happens on the downside. we lost the tailwind now from options being bought. we're seeing more headwinds from put options being bought on the magnificent seven and overall. >> do have any idea what changed the sentiment? >> i think it's that they jumped in the pool. it's the participation, the fo am.

fomo was not there before we talked about this lack of positions. there is overwhelmingly bearishness in the market. the market surprised everyone. so, there was this catch-up train that happened. i think that happened and now from a positioning perspective, you went from having nothing to needing to participate to having something to hedge. that's the difference we're seeing in the market. so, the drop in all of this activity, what are your observations from that? what happens next? where are things headed? >> it's interesting because we're not seeing this overall, you know, pick up in volatility hedging levels. folks aren't saying, i need to get protect on the market. we're seeing a very stratified response. we're seeing folks say, i'm really nervous about china. you're seeing that in fxi and the etfs related to that. you're seeing that in apple which has far more exposure to china than amazon or meta. you see these responses but they're definitely there in the options market. that's what you get in this

muddle through for the next few months. >> it's not seasonally unexpected, right? as you get closer to october, you tend to see more volatility like this, you tend to see swings just like this. >> if you look to the past two decades, there's always this pick up in vix, if you want to use a normalized return in october, that happens. then we have these slew of catalysts, as joe was saying. we have the strike. we have the geopolitics. we have the debt ceiling. the last time there was a debt ceiling debate in 2011, vix was 2045. we're under a 20 handle now. i'm not saying we could hit that 45 but there is historical precedent for it. that overall nervousness is something that will keep that headwind going. >> china is -- it's not just china, it's canada. you've seen concerns around canada with its housing market. what's been popping up? >> it always feels a little weird working for a canadian bank, the downside in canada. >> be careful.

>> i know, right? this is a theme investors have tried to play out in canada the whole year. part of it is the argument that canada tends to go quicker than the u.s. it's sort of a leading indicator. there's been this concern, to be fair, on canadian housing even since the end of last year. it hasn't capitulated yet but we are seeing more pressing through of the efts, which are proxies for the canadian housing market. there's very different durations in the housing in mortgages in canada than united states. >> amy, thank you for coming in. would you say overall you're more pessimistic just based on what you're seeing in the markets, too? do you not sleep quite as well as night? >> i have insomnia anyway. but from a positioning perspective, when i was speaking with you guys a few months ago, it was very noticeable that the

fomo train would ontinue. that having lapse in the market is something that concerns me. >> money is tight. and when you raise interest rates, everything -- everything cost more, in addition to what you're already paying at the grocery store and gas station. now mortgage -- >> mortgage payments, rent, credit card payments. >> pretty soon the consumer won't be as flush. >> i just think daniel is right, there are more lag effects. you don't see the instantaneous reaction from higher interest rates. it takes time. >> and the opportunity cost becomes higher with rates higher. >> amy, thanks again. coming up, the latest product lineup from apple, including the iphone 15 go on sale today. we'll speak to an analyst about the -- after the break about expectations for apple. "squawk box" will be right back. at morgan stanley, old school hard work meets bold, new thinking,

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apple's latest iphone is on sale today, coming as the mega cap company faces mounting concerns around china. joining us, dan flax at neuberger berman. separate issues, i guess, but makes a difference on what happens to the stock from here, dan. what will -- the reception for the phones, i hear the 15 is

amazing. >> good morning, joe. great to be with you. the iphone 15 pro and the pro max have changes to the industrial design, the titanium makes them notably lighter than their predecessors. you're seeing improvement in the silicon, the camera, which helps drive better gaming, photography and video experiences. so, i think those people who have phones that are two, three, four years old will see quite a significant improvement relative to what they have today. to your question on china, i think china remains a risk in terms of the geopolitical and the trade tension, but the chinese customers want the best. apple has done well in the country over many, many years by investing, empowering chinese developers and i think they have good opportunities to grow over time. >> would you say something like taiwan or, you know, the worst case scenarios for you, do you spend a lot of time thinking about those when you talk about buying a stock or not or is that

really like a black swan? if that happens, all bets are off. it's not zero, the chances of something like that hitting. >> we spend a lot of time assessing the implications of supply challenging that could be a factor in the case -- in the case of taiwan. but we're seeing this from apple and all other companies that are looking to diversify. you're seeing increased semiconductor investment in the united states. for apple you're seeing them invest more in india. i think taiwan would -- an issue there would be a challenge broadly globally but with each year companies like apple will be able to mitigate the impact. for apple it's about the innovation and the product cycle. >> if you couldn't sell into china, let's say the worst case scenario happened where something like, we don't do -- we try to not to do any business with russia.

if something happened with taiwan, would that be -- that would be material if you lost sales to china. >> china is about 19% revenue for the company. if that went away, you'd have the impact on the free flow for the company and negative for the stock. i think after that were to happen and the market were to price that in, the question on a go forward basis would be how well could apple continue to do in its existing markets, the united states, obviously europe, and newer markets like india, which are very, very early for apple could become significant over time. yes, it would have to grow off that lower number, but i still would expect them to innovate. >> dan, i would say, look, it's probably not as big of a deal in terms of what they're going to lose based on what we've heard to this point. if taiwan happens, not only would they be losing the market but the manufacturing capabilities as well, i assume. >> that's right. manufacturing would be impacted.

for example, partners like taiwan semiconductor and others who have been investing in different geographies with time, i think, they would be able to scale that production. clearly all of the competitors it, not just apple in the smartphone market and other markets would see the impact and so broadly speaking, we'd have to see how some of that evolves. it is a risk. >> can't believe apple couldn't figure out how to do this chip and get rid of qualcomm. an interesting story in the journal today. so, they're not perfect, i guess. >> nobody's perfect. >> some of this stuff is hard. it's hard work. >> right? >> notice, technology and investments in silicon are incredibly challenging. qualcomm has a lot of intellectual property. we'll see how apple does with the modem over time. >> thousands to try to figure that out. thank god for engineers. if i drive across a bridge, i'm

glad a journalist didn't design it. thank you, dan, good to have you on today. >> doctors -- >> heart surgery. hi, i was a communications major. when we come back, we'll take a look at premarket movers and later the uaw's negotiation progress. that deadline will hit at noon. will there be more strikes on the way? phil lebeau brings us the latest on that. let's get a check on markets. not much to look at in the moment. dow futures flat. s&p futures up by 5. nasdaq up by 48. we'll be right back. >> announcer: time now for today's aflac trivia question. in honor of national states and capitals day, which city was designated the first state capital of new york in 1777? the answer when cnbc "squawk box" continues. to send out medi. good hands!

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the answer, kingston. news from the white house early this morning, the commerce department announcing final rules for firms that are seeking government aid to build chips on american soil. if chipmakers want funds from the53 billion chips act, they have to not expand chip manufacturing beyond 5% in countries of concern, including china, russia, iran and north korea. once chipmakers receive funding, they will have to comply with that for a ten-year period. and chipmakers can't engage in any joint research or licensing that could threaten u.s. security. if they violate any of those, the government could claw money back. you see nvidia up, across the board for other chipmakers as well. let's get to dom chu with a look at premarket movers. happy friday. >> for sure. if you check out some motions we

are seeing right now, we first want to get you some news. first of all on what's happening with mcdonald's. mcdonald's shares up a half of 1%. that's better than they were at one point so far. all of this is happening because mcdonald's for the first time in nearly 30 years is going to raise the franchise fees, the royalty fees it charges for newly installed franchisees coming from 4% to 5% so, that's an interesting move there. so obviously mcdonald's getting a little positive sentiment boost there overall. the fee raised, by the way, it only applies to new franchisees and buyers of company identify owned restaurants. it won't affect existing franchisees who maintain current operations or who buy another franchise location from another operator. first time in 30 years mcdonald's is raising that royalty fee. acti activision blizzard, shares up 2%, around 1 million shares of

volume. responsible for big names like call of duty, candy crush is possibly one step closer to getting a deal done to be bought by tech giant microsoft because uk regulators have opened the door for a possible approval of the deal given some proposed concessions, including divesting of certain video games to french game ubisoft. we'll end with a check on that recent slate of hot ipos. semiconductor arm holding, instacart, klaviyo. arm went public at 54 bucks. we are starting to see some analyst coverage trickle in for these names. arm holdings above that $51. instacart and klaviyo above $30. we'll see if that sticks. >> what did you have for

breakfast? >> i feel like this is going to be a thing for now on. >> you started with mcdonald's. right out of the gate, let's talk about mcdonald's. coincidence? i don't know. if gary's watching, gary player. >> what we found in cable news, guys, is a lot of folks like hearing stories about food. we tend to put those out there. just like they like stories about apple and tesla. >> i think you're right. who are we to -- >> give people what they want. that's what tyler maths tyler mn told me. give people what they want. working to avoid a government shutdown next week. we'll speak to republican josh gottheimer for the latest. studios and writers apparently heading back to the negotiating table after failing yet to reach a deal. . we'll have the new dedetails on what to expect for a possible

end to that strike. whether that's still in e th cards. stay tuned. you're watching "squawk box." in is krbs cnbc. the first time you connected your godaddy website and your store was also the first time you realized... well, we can do anything. cheesecake cookies? the chookie! manage all your sales from one place with a partner that always puts you first.

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congress heading home for the weekend after disarray among

republicans in the house. the bipartisan problem solvers caucus says it has come up with a proposal in hopes of avoiding a government shutdown next week. joining us with the details is new jersey democrat congressman josh gottheimer. he co-chairs the problem solvers caucus, which is a bipartisan group. congressman gottheimer, welcome. what do you have in mind as a way to try to avert this shutdown? >> the problem solvers caucus, a bipartisan group of 64 members, 32 republicans and 32 democrats. we agreed on a plan this week, which would keep lights on in the government, which is critical through january 11th. it gives a continuing resolution to avoid a shutdown, which we believe makes zero sense for the country. it would be very damaging to families, our military veterans, seniors. anything we can do to make sure we have this debate properly instead of shutting government down, it includes resources for ukraine as the president requested as well as disaster relief. it includes a debt and deficit

commission and bipartisan border security. we believe this is the best way forward to actually get democrats and republicans together. as you know, we need a bipartisan solution given we have a divided government. right now it's clear the far right is just trying to steer us into a path of oblivion. as kevin mccarthy said, they're literally trying to burn the place down. that is not what's best for our country. >> some of the things you just mentioned sounded like some of the plans that were in the republican plan to begin with. whether that be some of the border control issues shg the debt and deficit panel to excuse all of this at a later date. it does sound like you're mrending the two sides. is there a chance you could get leadership from either side on this? this would require somebody agrees to bring it to the house floor. would speaker mccarthy do that? >> that's the real question overall, right? is he willing to bring something

to the floor that can get both sides. which is essential if you're going to get a piece of legislation out of the democratic senate and democratic white house. you have to bring a piece of legislation that can get democrats and republicans, just like we did with the debt ceiling which i was involved with. you brought both sides to the table. that's the real question. right now the speaker has not been willing to bring a more bipartisan measure to the floor. we have a bill we hope to get to the floor next week, get the votes necessary and actually keep the lights on and the government functioning instead of putting our military at risk and veterans at risk and seniors. >> but if he brings it to the floor, does he risk losing his job? >> i think what's very clear by the extremists on the far right, they don't want the job anyway. they'll keep coming at him anyway. the question the speaker has to consider is do you want to govern, do you want to keep our government functioning or keep

pandering to it the extreme right? right now it's not a great option for him. they held him up 15 rounds when he became speaker. all they do is threaten him every single day and put our country at risk. that's really the question. is he willing to bring to the floor something more reasonable that with common sense or do something that's extreme and keep blocking reason? in the last couple of weeks they have voted down the extreme right and blocked the defense appropriations bill. to support our military and national defense. that's how extreme they are. he has to make a decision if he wants to get something done here or keep letting them block progress. >> do you think there's a risk that -- i mean, if speaker mccarthy were to work with democrats, i mean, i have s seen -- satisfaction is a nice

word for it. sometimes democrats enjoy watching something like this play out. i keep reading comments from leaders from both the senate and the house on the democratic side. obviously, it's kind of enjoyable for them to watch mccarthy twist in the wind with things like this. by the time he finally does come to democrats, are you going to give him anything or will you just make it almost impossible, will democrats make it almost impossible for him to say it's bipartisan? you're in the driver's seat. i think at some point some on the left wouldn't care if the government shut down if it really hurts the republicans a lot, they'll be fine with that. >> let me tell you this. it's a great point you're making. the only people right now enjoying watching the government come to a screeching halt is his own party on the far right. i want the country to succeed and put the country first.

my colleagues and those in the problem solvers caucus and those i work with want to make sure the country operates and we help people and our military gets paid and our veterans and seniors and children get what they need. i don't think watching the country suffer is anything my colleagues want. this is why kevin mccarthy talked about his own party, saying they were trying to burn the place down, the extreme right. maybe that's what they want to do. they want to see our country fail. the only people who win in these instances are the government of china, russia. they like watching us fail. as far as i'm concerned the only thing we should be doing is getting together, democrats and republicans, sitting at a table and trying to figure this out. that's what we did this week in the problem solvers caucus. now we need the speaker to bring this to the floor, vote on the bill, keep the lights on in government and we can have the debate all day long. we did it with the debt ceiling and came out with a good bipartisan solution. we agreed to the levels of spending for the country. now all you've seen happen is the extreme right block every decision we've made, every

agreement we've made, and literally try to, as kevin said, burn the place down. >> who would step in if it wasn't kevin mccarthy? is there some clear choice? have you gamed that out? >> that's for them. i'm focused on just making sure we get this agreement done. >> you're supposed to say hakeem's ready at the drop of a hat. >> hakeem is ready. as soon as we win the house this november -- >> no, no, before. >> right now? i don't get into their politics. i'll just tell you the only politics i'm focused on is getting this done. >> you've got 64 members of the problem solvers caucus, 32 republicans, 32 democrats. do you have support outside of those 64? what are we talking about? >> yes. when we put our proposal out yesterday or the night before, we got huge amount of support

from both caucuses, saying this seems reasonable, this seems to actually give folks what they need to actually have a vote and move forward. you're not going to get everyone. obviously you're going to lose people on the extremes. i'll tell you this, i think this is exactly the kind of bill that can get out of the house, get to the senate and get on to the president's desk. we're going to keep doing this every day until we actually get this -- >> again, this sounds like something kevin mccarthy is not going to want to do unless he has absolutely a solution. do you think it's something he would consider after a government shutdown -- >> he seems to be out of solutions, right? he sent everyone home yesterday because he seems to be out of options. i think we're at that moment. you're eight days away from a government shutdown. and procedurally there's a lot that has to get done. we don't have a lot of time at all. listen, the senate the by the way, could send us a bill next

week. kevin's got this -- kevin mccarthy has this side if he wants to bring that bill to the floor. those are our real options. you want to pass something bipartisan, the problem solvers caucus to stop a government shutdown or the senate may send us a package and the speaker has to decide if he'll bring that to a vote. those seem to be our real options. our military projects, our veterans, our seniors, that seems like a completely crazy option to shut the government down so these are our choices right now. >> congressman gottheimer, thank you. >> we have to work until we get this done. >> let us know if you have any updates, any changes. anything you're hearing, let us know. >> i still can't deduct my new jersey taxes. >> by the way look at your republican friends on that. even though we're ready to go on that, they won't bring that to the floor. >> there's some pushback -- >> you promise. you promise. solve my problems, will you?

>> we passed it four times out of the house. i can only do my job. i only work over there. i'll keep doing it, though. >> are you going to vote for him again if he doesn't do -- >> i will not tell you who i vote for. josh gottheimer is my congressman. >> by the way, whoever you vote for, i'll be working for you, don't worry. >> thanks, josh. we appreciate it. coming up at the top of the hour, moelis vice chair eric cantor will join us.

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the uaw is set to expand strikes today if progress with the big three isn't made by noon. phil lebeau joins us with the latest. phil, doesn't seem like there's much question at this point that there's going to be an expansion of this strike. >> becky, there's very little question these guys remain very far apart. that said, shawn fain may surprise everybody and say, we see what we consider substantial progress. we're not going to have any more strikes. but the expectation is come 12:00 p.m., we'll find out which places will be walking out. we'll find out at 10:00. the strikes will start at noon.

i say there's very little indication of progress because of leaked emails that came out over night. these are internal messages within the united autoworkers from one united autoworker executive or somebody who was an aid to shawn fain to another person within the uaw. this basically sums up the frustration that the big three have with the uaw. in the message, it says if we keep them wounded for months, they don't know what to do. talks about operational chaos and keeping the big three guessing. essentially, we're not going to really get a deal any time soon. let's keep them moving around. that caused this response from general motors. it's clear the uaw leadership has always intended to cause months-long disruption regardless of the harm it causes to its members and their communities. we will hear from the president of the uaw, shawn fain, he will announce new strike locations. that's supposed to happen at 10:00 a.m.

the strike is supposed to happen at noon. as you look the shares of gm, ford and stellantis, we already have three plants shut down, just under 13,000 workers currently on strike. and as we see this strike expand today, it will take down more production of the big three here in the u.s. right now about 15% has been taken out. we'll see how much more comes out when these new strike locations are announced, if they're announced later on this morning. guys, back to you. >> there's been a lot of talk about how the union was smart to start with just 13,000 workers instead of putting everybody on strike at once because they have a strike fund. they have to pay $500 a week to every member who's out on strike. the strike lasts longer if you only have 9%, 10% of your workers on strike versus everybody. how deep is that strike fund? what happens if they extend this? >> it's about 825 million, becky. it's about 825 million. the expectation is that you will

deplete that fund -- if everybody were to go on strike, you would complete that five, six weeks. remember, that's not just $500 a week for everybody who's done strike. they also can make claims for having their insurance covered because once these people are not working, they obviously don't have insurance. so, there's more than just the $500 a week. so, part of this strategy is, you don't want to complete the fund too quick. the other part is, by announcing there's going to be a new strike in a new location, it keeps it front and center and gets the base worked up. that's a big part of what shawn fain does. he has to keep these guys motivated. >> for the people right now with the parts -- i guess the stamping process where some plants have been forced to close down. i know at least one was forced to close down and lay off workers, they go on the government payrolls, right? they go off and file for unemployment. >> one of two things they can do, becky.

the uaw has said, if you rn laid off, you are a uaw member, you can apply to the strike fund, which is $500 a week. or you could go to the state government and say, i want to go through unemployment insurance. kind of depends on, do you want to go through the whole process? is it easier to go to your uaw local union hall and say, i got laid off? they know who's been laid off and say, okay, i'll take the $500 a week. >> do the big three or the union do any polling? i think at this point it seems like we're at a point in time where the public is kind of with -- even people you wouldn't think would necessarily be with the workers this time around. at least the narrative about all the concessions during the financial crisis. even 40%, and maybe that might get an eye roll but i don't know. could the public eventually turn on the strikers or -- because at

this point it seems they're doing pretty well. they just crowed how well they're doing with the public. >> i think they have a lot of public support. look, we're here in michigan. you're going to see a lot of public support because so many people are attached to the auto industry, either right now or maybe in the past they had a family member who worked for one of the big three. so, it's a little bit jaded in terms of the public opinion here. nationwide, i think a lot of people support the fact they should get a healthy raise. >> could end up with the same problems the legacy makers have had again and again and again, if they were concessions that do great. we'll be right back in the soup with taxpayer bailouts. >> that's the argument, you got to be careful about what you give away in these negotiations. >> all right. >> phil, thank you. "squawk box" will be right back.

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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. writers guild of america and warn er bros. and netflix expected to head back into the bargaining table today. joining us with more of the impact of the strike, chances for an agreement, rich greenfield. tune anything that everybody else doesn't know at this point, rich, about what happened yesterday, what is likely to happen today?

>> sounds like there are still a couple outstanding issues. they have made progress. it is good that they are finally talking. this is definitely getting close. i wouldn't be surprised to see a writers agreement sometime over the next week or two. but remember, that is just one of two. that helps gets scripts back in action, but you need the s.a.g. strike over with as well, that could also take some period of time. so it is still looking pretty dim. you me ae may get a little production back, but you get into the holidays and there won't be a lot happening before year end even in a best case scenario. i think that hollywood to be back full steam ahead, you are still talking about beginning of the year. >> a lot to talk about. and there is a piece in the post today that says sources say abc hasn't -- or disney hasn't even hired bankers. that not only -- that approaching that idea may be

down the road, but there isn't enough money, no other buyers around. what is abc worth? what would it go for? >> you're missing the bigger problem. the bigger problem is espn and abc are intricately connected. when you think about the nba, games air during the season on espn. finals air on abc. you know, when you listen to the espn management team and disney management team, they talk about how the majority of their sports rights deals, when they are cutting deals with sports leagues, there are specific parts of those agreements that require broadcast tv, you know, airings. so they have to put content like monday night football, certain games, on abc. in fact this season they are putting even more than that about an. >> so are you saying it is not going to happen? >> i think it is too difficult to separate the two assets.

and long term how would espn acquire sports rights without having the broadcast business that they needed? it would be like increases only having usa network. >> and we'll keep going on these quick hits. maybe lachlan murdoch will buy abc. what do you make of that news? i'm just kidding, but -- >> this has been a crazy week in terms of the media space. rupert retiring, everyone trying to read more meaning into it. i think unless rupert is sick or some change in who owns fox and news corp, nothing has changed. rupert is the owner and lachlan for years and before that james and lachlan have been running fox for years and years. i can't remember the last time ruet was on a conference call or i sat with a meeting with ru rupert. i don't think any invest tour believes that is he running the business every day but he is

still owner making critical decisions. >> back to the actors, do they follow the writers, does one follow the other or is it a totally separate and distinct issue that could make -- could one drag into 2024 and the other get settled? >> look, my guess is -- i think thebeing a screen actor was a l closer and sort of the writers drumbeat got louder. i don't expect screen actors to take that ever longer after s.a.g., but i think the other big topic this week is not just the strike situation but also the sports rights situation. you have the wwe deal that your parent company signed yesterday that has had a lot of implications for this sector and i think there is growing concern about what happens to the world of sports rights. >> yeah, people have -- the whole media landscape, i wouldn't know where to start to try to -- it is daunting and i

don't know where it is headed. everything is digital nickles. we don't have any analog dollars yet. streaming is no good, legacy is no good. this is like a low point. it is a crappy time to be striking too. >> yeah, but look, i think the reality is if you look back, there haven't been -- there is major players growing. amazon just announced that they are getting ads over to prime video. obviously netflix does that last year. i think streaming is certainly getting stronger and i think -- look, i think obviously disney, we talked about they are trying to sell abc or what do they do, do they split off espn and abc. i think everything that you are hitting at is why there is going to be tremendous structural change in this industry. and i think when it comes to sports rights one thing that we'll be looking for, are emanuel pull a ran pit out of

his hat. can he do that with wwe. >> out of his hat or somewhere else. thanks, rich. we got to go. when we come back, admiral st stavridis will talk the risks in taiwan. mlb chooses t-mobile for business for 5g solutions... ...to not only enhance the fan experience, but to advance how the game is played. now's the time to see what america's largest 5g network can do for your business.

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good morning. welcome back to "squawk box." we're live from the nasz daq market site. andrew is out today. it is just about 8:00 a.m. and apple store on fifth avenue here in new york is about to open and start selling the iphone 15. let's get over to steve kovach who is on the scene. >> reporter: hey becky. and the cheering is starting. i got here a little before 5:00 a.m. and people were already lined up. the first guy in line got here at 8:00 p.m. last night. and this is for the iphone 15.

the doors are about to open. and look, pressure is really on for the iphone 15 pro to sell. that is the more expensive phone. and there is tim cool bk behinde doors. doors are about to open. let's take a minute and listen to this. here we go. and look, these are the customers, becky that are going to be buying those iphone 15 pros anyway. what tim cook really needs is the rest of the country to really get in on that because smartphone demand has fallen quite precipitously. they need to sell the more expensive phones to return apple to that top line growth after three quarters in a row of declining sales. there he is. d doors are open. there we go.

the crowd cheering. >> so people are filing in. the guy there since 8:00 last night, was it because he wanted to be the first to buy an iphone or because he wanted a sighting of tim cook? >> both. he was late to the pre-order process. and so if you want the phone today, you are going to have to wait in line if you missed the pre-order process last week. and he told me he is buying the max phone. i said why. i want the best technology that i can get. and that is exactly what apple is hoping for. because they put the best technology, newest features into the pro phones that costs more money, raised the average selling price of the iphone, help boost sales for top line

revenue growth that apple needs to return to. so that is the perfect example. first guy in line, apple wants to see many more customers just like that. again, this quarter will be a little iffy, expecting another down quarter. but comparisons get a lot better in the holiday quarter because of all the problems they had producing the iphone 14 last year. so big expectations this quarter. but even more so for the holiday quarter where they do most of their sales. >> and "wall street journal" tweeting that i can't believe apple is marketing this as a feature after she and another had done stories about how they are being used by thieves to permanently lock victims out of their accounts. so if you remember yours password, it is easy to reset and now there is an emergency download that people are supposed to be doing? have you been following this

story? >> yeah, joanna has done a really good job covering that about this security issue where people can kind of glimpse at your pass code and once you are in the phone, these people can go in and get into your bank account or apple i.d. and reset everything. so that is another issue that has to be worked out. yes you have the face i.d. and thumbprints and pass code, but it someone gets the pass code, they have everything. so there is an extra layer of security that people have been asking for. >> is that what this new download will be putting in or is that something else? >> no, no, the security -- are you talking about the one from yesterday? >> yeah. i'm mixing two together i think. >> yeah, so yesterday there was a security update. it is one of several that have hit this year. it is called sfzero day vulnerability. meaning someone could get into the system sometimes by send being you a text message,

sometimes by directing you to a link at a different website. so if you woke up this morning and your iphone said we just updated your ios automatically for you, that is why it is a secure emergency security fix that they pushed out last night. it is also for the apple watch and ipads too. >> looks like a lot of people are taking selfies with tim cook. he is definitely the celebrity draw there. >> he is. this is the routine we've been going through for 17 years now. or 16 years now since the first iphone launched. and people are still lining up, still want to take selfies. i'm reminded just a few months ago when the stores opened up in india, tim cook was there, first two stores in that country. and people were lining up to see tim cook just as much as they were to buy a new iphone. >> that is really a feat to be a ceo who has achieved that level stardom. steve, thanks a lot. i know you've been hanging out for a long time with all these

people. we appreciate you getting up early. >> thank you. >> did you get a single selfie request? i feel bad for steve. maybe a couple? zero? don't answer that. i'm sure there had to be a few. breaking news, united airlines promoting vice president of corporate development and investor relations to chief financial officer. he will also join the airlines executive team. in a statement united ceo scott kirby praised his two decades of experience on wall street and said that the gentleman is best person to help us drive a culture within our finance team that is focused on moving fast, hitting our targets with no excuses and being disciplined about capital and cost decision making that supports our united next plan. that is a lot on a new cfo.

>> yeah. all right. house republican leaders sending their chamber into recess following a failed rules vote for a pentagon funding bill. house speaker kevin mccarthy expressed frustration with some of the hardliners in his caucus after that vote. although nothing certain, it is now more likely that we will see a government shutdown at the end of next week. and joining us now on that as well as the state of m and achla and the economy is eric cantor, now vice chairman and managing dret tore at molis and he company. you've seen this a lot of time, but it definitely feels like there is no way out. >> increasingly the window seems to be closing on the possibility that we can stay open and see washington continue to function and not have a shutdown. increasingly what you are seeing now, the faction in the house which just won't accept the reality of divided government. when you have divided government, by definition you are going to need bipartisan

consensus on a spending bill. period. the rules of the senate and fact that senate controlled by the democrats means bipartisan. and it just is amazing how people think somehow you present to the other side and the idea that they don't necessarily agree with and then you tell them that if you don't agree with me, i'm going to shut down the government until you do. >> seems like they have massively overplayed their hands and there is no way that you can ever appease this group or deal with them. >> you see what is going on with the apple store today and all this celebrity era and the selfies. the incentive for people to get up, go there and take a selfie is that they want to post it to their account and get more attention. this is what is going on in washington too. the more these individuals make a statement -- >> we said that the other day. matt gaetz. is that who you are talking about? >> matt gaetz is certainly one

of them. there is a lot of incentive for him. he has the no cr crowd and shut it down crowd online that is increasingly having -- >> good for matt, but republicans have been tarnished in the past from shutdowns. but what gets me, have you been watching the border? they are laughing at them for the government shutdown and no one is talking about the border. >> well, problem solvers caucus between 32 republicans and 32 democrats who have come to consensus -- >> i'm talking about republicans aren't -- >> it is including border safety as part of that. but mccarthy will lose his job if he takes that to the floor. sg . >> and again, you have like a small faction -- >> like ten people. >> but the democratic party are the winners. >> this is what defies logic

here. we went through it with obama. when we wanted for stop obamacare, a small faction said we have thave to shut the gover down because that way we can beat obama into submission to agree with us. >> and nancy pelosi had some far left wingers that she was dealing with and she managed to shut them down. what is the difference? >> it is an interesting question and i'm not sure how the discipline comes on the democratic side and just reflective of maybe a cult mentality. where as on the republican side, we have just sort of this freedom entrepreneurial thing that people see incentive that they themselves can gain. >> and once again they could end up snatching defeat from the jaws of victory. >> and there was a negotiated settlement, negotiated deal on the spending. kevin was able to pull a ran built out of the hat. he got president biden to agree to spending cuts.

and yet now this crowd said that is not enough. we're going back on that deal. it doesn't make sense. >> joe is right, they are shooting themselves in the foot. >> they are shooting i think the country in the foot, they are shooting the republican party in the foot -- >> because they don't want to -- they love what is happening. >> oh, they love it. the democratic whip this morning or yesterday said that it is their price to help kevin if it comes to that vote to vacate the chair, their price on the democratic side is to insist he get rid of the impeachment inquiry, which again, that is exactly what the democrats want. so they are very transparent about it. >> and for give kneeve me for b a bad mood. on top of all this, we have the strikes left and right. what do we do with ukraine?

and that plays into this whole dynamic. people think if you can't protect your own border, why are we worrying about ukraine. >> there is just a lot of anger right now among the populous. and at some point, and i think it has a lot do with the fact that we're going through a political realignment in our country. you start to see republicans in the senate like josh hawley coming to with an elizabeth warren on a bill. you see a marco rubio getting together with sherrod brown. these are alliances that didn't used to happen. >> when you say this is a new alliance, where do we get at the end of this? because we're still looking at the same presidential candidat s at this point. >> one common theme is populism. we've been on this anger detour for a while, sort of my unscheduled departure and i look back and see, it was beginning of sort of this populist rage. we'll get to a consensus at some

point, but this consensus that the country was operating under for several decades i think ended with donald trump and now we're trying to figure out where we're going to be. so i think that is a lot of uncertainty and what is behind some of this. >> what do you think happens with the government shutdown, will we see one? >> i think that more likely you will see a government shutdown. the question is how long. how long will the government shutdown last. if the strategy is in the house that they want to pass single purpose appropriations bills, you have to assume that they are not going to be able to pass those so easily because you have folks in -- republicans in biden districts that don't necessarily want to cut spending another 8% beyond what was agreed to. >> have you talked to kevin? you are close to him. >> yeah, i talked to him, but i got a day job now, so -- of. >> well, you're in such a good mood all the time. you've got a big job there,

right? >> well, we're in a deal environment where for the last, 15, 18 months, it has not been the easiest. >> so let me ask you this. former president trump, likelihood that he is the republican nominee is what? >> oh, it is well over 50%. >> 50%? okay. so only 50%. president biden -- >> i say well over 50%. >> president biden, likelihood that he will be the nominee? >> i'm one that believes that he will be their nominee. >> does the senate go -- now they are saying the senate might go republican and house might go democrat. is that -- >> listen, there are these cases, these court cases that have struck down some of the districts in the south and under the voting rights act. so you will see maybe some shift there. again, remember, there is like five votes, five vote maneuvering ability. so the house will be close. i do think though the country

has demonstrated since obama that it swings all the way and then comes back the next two years. so i do think that there will be unified government. i think more likely unified republican government if '24. >> and donald trump will be president again. >> i think so. >> so you talked about a significant realignment. i had to laugh. we got the same two guys as 2020. that is not a realignment. how did that go in 2020, did that work out well? >> i'm talking about policy and political alignment. we used to be coming off of sort of the keynesian nixon era and into the reagan era. we dispensed with all the regulatory overlay, hiregher taxes, stronger government. and when bill clinton said eefr are a of big government is over, right? that was -- >> if it wasn't trump, who would you like? >> oh, listen, we'll have to see. i got plenty of friends that are

in that race right now. i think that you have to watch virginia. this is where it is interesting. >> because they got an election. >> the shutdown because if we win our majority in the state assembly in richmond, glenn youngkin could very well hop into this race which would be a new -- that would be new. so you askask me who could be president, i think he could be sgr. >> how about if president biden bows out? >> then you will see turmoil on the democratic side. i don't know would who it would but -- >> vice president harris is waiting in the wings. >> but you look at how joe biden got the nomination. he got it through jim clyburn of south carolina. that shows you how powerful the african-american electorate is and how important they are to the democratic process. so you sort of watch jim clyburn and see what he is doing and i think that will tell you what

maybe could happen. >> eric, thank you. >> a pleasure. >> don't mess with me, what was the quote? >> no, i said i won the election, i'll do it my way. >> and he said don't push me or -- >> that was a longer story. coming up, what is at stake for google in the big antitrust trial. and is $100 oil the next level to watch. we'll talk about that and impact of a temporary gas and diesel ban by russia. people are excited about what ai will do for them. we're excited about what ai will do for business. introducing watsonx a platform designed to multiply output by training ai with your data. when you watsonx your business, you can build ai to help coders code faster, customer service respond quicker, and employees handle repetitive tasks in less time. let's create ai that transforms business with watsonx.

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support small business. 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. 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. bill ackman making headlines with along post. he said he believes long term rates will rise firt from here and says that he remains short bonds through ownership of someone swaps. he says inflation is one of his chief concerns. and we'll hear more from him next week in new york city. scan the qr code on the screen to register or you can go to

delivering alpha.com. wti crude back above $90 a barrel this morning. earlier this week it was as high as $94. joining us now to talk about the recent rally and whether we're likely to see $100 a barrel anytime soon, the energy aspects founder and director of research and supply. most important of the two now between supply and demand. or will demand eventually reassert itself if a slowdown and based on china, et cetera? >> i mean, it is never one or the other. i'd say the reason we're here today is definitely driven by demand and of course open policy. i think that i would say that opec+ is firmly in control of the market. it has managed to drawdown even stories pretty much everything that we built over the course of the last year. but the point you make is precisely why saudi arabia is being cautious about bringing barrels back because they are concerned about a slowdown in

the world economy. u.s.-led. but potentially china. that is kind of where the supply/demand dynamics kind of come together. because the demand concerns is what is driving a lot of the supply policies right now. >> and mbs doesn't speak much. do you see a lot of that interview on a competing network, did he say anything that informed you about the future plans for output from the kingdom? >> i would say in terms of the energy policy, it is about stability. and we've also talked about that ultimately they remain revenue optimizes, right, by cutting production if they are getting higher prices and higher revenue. they will continue to do that. and i do think that that is something that the west tends to make sticky talking about market share and i think that is kind

of one of the things that has come out of the kingdom in terms of being in charge and being a bit of a central banker for oil markets. i think that would be my biggest takeaways. >> does $90 oil cause domestic production to increase, will we exceed the levels from -- record levels from a couple years ago, have we done it yet? >> we are already on track. whether it is $90 or $80, those prices, it is almost immaterial. they are high enough for u.s. production to grow. i think the challenge for a u.s. production has been around shareholder pressure and best quality acreage for oil having been drilled and you are starting to see slowing production growth in a lot of basins outside of the permian. and next ewe think permian production growth will slow regardless of the price. >> is $100 next, is that the

top? do we go back to $70 or below? >> calling $100 when it is already $95 is hardly a call. we've been calling well into the 90s through the end of the year and i think that is materializing. could we go above $100? absolutely yes because ultimately takes number and we do have a lot of positive financial flows right now that should support prices continuing to go up especially given fundamentals are so tight. i think to go back down to 70s, demand would have to take a material hit and we've have to be in a recessionary mode. demand will show down next yeyeear, but we're just expecting more like a mild recession in the west. >> all right. thanks. what is the all-time high and when will that be exceeded in wti? >> if you are talking about all-time highs, you are talking

about 2008, $148. i don't think that we're getting there right now. that is for sure. >> all right. we'll see. thank you. >> thank you. when we come back, the privatization of new york's high society. clubs for the rich took off after the pandemic, but are there now simply too many of those clubs. robert frank is in midtown and we'll have that story. robert, really? >> yeah, really, becky. good morning. the "power lunch" is going private. dozens of private clubs opening up here in new york. we'll tell you what is behind the trend, how much they all cost, and we'll give you the first ever look inside the new core club here which has its own wine library and an anti aging lab. that's coming up after the break. we need to scale with customer demand... ...in real time.

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america's wealthy have been fwl flocking to a new breed of private club but now supply may be outstripping demand. robert frank is joining us live just a few blocks north of here. trying to figure out where you are. >> yeah, i'm on 55th and 5th. and this is kind of the new arm's race for the wealthy here in manhattan. more than a dozen private clubs opening up since the pandemic. and this is really a new breed

of private must be ship club where the wealthy and the business leaders can network, can hold meetings, can dine, can socialize, can workout, all outside of the public high. and the privacy comes at a new higher price. here this club charge as membership fee of $200,000. and in addition to $15,000 in annual dues. if you look downtown, zero bond is a fair of mayor adams and kim kardashian, more reasonable $4,000 annual dues. but the new entry is core, they are about to move into a new 60,000 square foot space here in midtown. >> we curate people, spaces, ideas and culture. and a community of relentlessly curious unlike minded people from across the spectrum. so people can intersect with

people from media, sports, fashion, finance, science, technology, design, and beyond. >> all with a lot of amenities. the new space has 11 ohotel rooms, three dining areas where famous chefs will cook for the guests. it has work spaces and wine library and anti-aging institute. they proper to take ten years off your skin. and the price of all this is about between $15,000 and $100,000 just to join. and then the annual dues are between $15,000 and $18,000 a year. and joe, if you think people watching at michael's during lunchtime is good, you should come here when they open in mid october. >> i'm so out of it. i thought the core club was like a pilates place. it has nothing to do with -- >> they do have a beautiful gym.

and they do have a pi lalates class. but it is a lot more. >> so we're not talking about my fleshy core. >> they could help you with that. >> i'm good. i'm doing a little better. so i don't know. attraction is you see other people that are rich, is that why people like to -- >> and some you don't see. >> what does that mean, curating people? >> part of it is networking, part of it is the whole lines between work and play and socializing are becoming blurred. and they also have more than 150 cultural events every year. so that is guest lectures, performances, art exhibits. and so it is also this huge sort of cultural channel where people can come and learn and -- >> and not have to eat with the peasants. >> exactly. and without people with their cellphones in front of them all the time.

>> i get it if you are taylor swift and you don't want a selfie in your face the rest of the time, but basically everybody else -- >> exactly. no one remembers groucho, i don't want to join a club that would have me? now it is the opposite. i don't know. not going to do it. saving my money. i'm richer for that. >> so is the rest of the club. coming up, we'll speak with former supreme ally commander of nato about the latest tensions between china and taiwan and including more flights near taiwan, like dozens by military planes. why. stay tuned. listening more than talking, and a personalized plan ♪ to guide you through a changing world. ♪ this thing, it's making me get an ice bath again.

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welcome back to "squawk box." futures this morning are now about where they have been. in the green a little bit. nasdaq higher up about 91 points. and s&p 14. all three majors three days in a row of decline or was it worse?

>> i know yesterday was the worst day for the s&p since march. and you had some pretty significant declines for the week if you look at the s&p or at the nasdaq which was down even more. >> and highest ten year yields in 14 years. >> yeah. >> like the financial crisis. >> here we go. today taiwan's defense minister called recent chinese military movements around the island abnormal. taiwan has reported an increase in these types of activities including fighter jet, drones and bombers. joining us now to talk about the current state of tensions and the risk of a political conflict in that region is admiral james stavridis, former supreme court allied commander of nato and also analyst for nbc news and msnbc. and sir, looking at what is happening here, it is different than what we've seen in the past, maybe you say because of the violence. do you want to explain why this is different and why this is

perhaps more threatening? >> it is a bit of geography going on here, becky. the taiwanese are used to and what we've normally seen out of china is flying oorn on the western side of the island, that stretch of water about 100 miles in between taiwan's west coast and china's east coast. that is normal, if you will. what is new here is those aircraft are kind of encircling the island and moving around to the east side of the island. back of the island from china. why that matters is because on that eastern portion of the island of taiwan is where the taiwanese have built up most of their bases, most of their capability to kind of protect it from china which threatens on the other side. so this is kind of a new wrinkle, it is a bit disturbing. and yet we're not hearing either side trumpeting it a great deal.

all of that leads me to believe this is one to watch. i'll close here, i don't see it flaring up into a big attack scenario. china is slowly trying to make taiwan used to this encircle. piece. >> almost sounds like a dog marking your tear torritory and saying we're not just playing in the strait between it. >> indeed. and there is military tactical utility here as well. because when you swing around behind, you can use those shorter range missiles more accurately against the taiwanese. and wrt poorth pointing out in of pure numbers, china has 4,000 military aircraft, taiwan about 400. so at the end of the day, this is a very challenging scenario for taiwan. certainly has the attention of

the military leadership on the island. >> how would you boil that down and tell business leaders who might be watching this, those who have business interests or potential business interests in taiwan, in china, what does it mean for them? >> i don't think that this is a significant change, becky. and at the carlyle group where i'm vice chairman for global affairs, we remain long on china. we believe that the u.s. and china will find ways to work through the relationship. but there will be spikes and tensions as we go. probably the next one to watch for closely will be in january when taiwan has a set of elections if the new president of taiwan is more aggressive toward china, that would be a spike. but longer term we continue to believe u.s. and china are going to work through this. final thought, president xi and

president biden will be getting together face-to-face in san francisco in a few months. that will be a good point i think to balance again some of the spikes that we will see from time to time. >> admiral stavridis, part of any sort of negotiation or dance with this is just the basic understanding of know your adversary. what would be more effective in your opinion when these meetings come up between president biden and president xi, is this a situation where you stake your ground and say don't cross this line, or is it a situation where you try to downplay the tensions and find ways to work together? >> it is a bit of both. and if you were going if boil it down and really summarize it, i'd say in dealing with china today, the u.s. ought to take an approach of confront where we must but cooperate wherever we can. so we need to confront china on their claims of ownership for

example and the entire south china sea. vast sea space half the size of the united states. we're not going to simply turn that space over to china. on the other hand, where can we cooperate. perhaps in climate. perhaps in humanitarian activities around the world. perhaps in medical diplomacy. there are areas of cooperation. and i'd park our world of business that we focus on squawk kind of right in the middle. there will be parts of the business world where there will be tension. cyber is another area of confrontation. but certainly there is a great deal of trade that is going to continue between these two nations. i don't see a big decoupling coming out of all this. >> prime minister of japan was in new york and speaking with different groups about trying to stress the frns for of having

allies. united states, south korea, japan, he intentionally has reached out to three to ease some of the troubles with japan and make a stronger relationship. same thing with the united states. because he sees a huge threat from china and from russia. how important are building those allied relationships? >> greatest comparative advantage to the united states. and we have many advantages from our innovation systems to our capitalism, to our younger population. we have many advantages. i would argue that our greatest is this glittering array of alliances around the world. and to what you just mentioned, i would add australia, new see la xi land, singapore and increasingly india. this idea of a quad between the united states, sjapan, australi, india, balancing china. let's try to pull south korea into that. let's make that quad a quint.

that would be pretty smart strategy. i think that you will see that in the months ahead. >> admiral stavridis, thank you very much for your time today. >> thanks, beck i. > coming up, what is at 125ik for google in the current antitrust style. and tim wu will join us next. st rs there are some things that go better ther. burger and fries... soup and salad. like your workplace benefits and retirement savings. with voya, considering all your financial choices together can help you make smarter decisions. voya. well planned. well invested. well protected. (sirens) [due at target in 5!] copy that. make a hard left down the alley. network's got you covered. [please confirm requesting back-up.] -changing route. -go. roadblock ahead. ...back up, back up... reverse! reverse! next level moments, we're 30 seconds out. need the next level network. [north corridor, hurry!] -coming through! -or 3, let's go.

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bell on wall street. joining us is chief research strategist and portfolio manager at alpha symplex. what are you basing most of your analysis on right now? is it the fed, interest rates, oil, recession fears, all the above? >> i'd say all of the above, but i'll just tell you i think that everybody is taking a pause today to sort through what happened yesterday. we think that the markets went through a point of recognition. we have been saying higher for longer for quite some time. and what you saw yesterday, it was the market saying wait a minute, the fed is really saying this, yields have to go up. we need a disinverted curve. and we really saw the massive move in yields. and then of course later in the day equity markets responded with fear focused on inflation, focused on what does that mean for equities if we actually really do need to have higher for longer.

>> there is a group of individuals that come on and we have both sides, but some say that we've already -- we're too restrictive already. the lag of the policy moves that the fed has already made will become evident and that we may overshoot and risk now that we do the soft landing is much harder than people are thinking right now. are you in that camp or the camp that inflation is -- you know, that we have a lot more work to do? >> i think that i'm -- unfortunately i see both sides of that argument because i think that inflation will take a lot longer to come down. but i think that this idea of a soft landing when you actually tighten policy that we won't have some sort of recession, some sort of pullback, is a bit optimistic. we've been actually focused much more on the bond market and finding the bottom of the bond market first. and so i think that this move this week is actually the first

step of trying to figure out that next step. so i think trying to figure out what that ultimate goal is actually much harder question, long term forecast. i think focusing on more what the next three to four months would be is actually more what investors need to start thinking about. because whether or not we have a harder landing next year, we need to first see the implications of this policy and how that comes out first before we can actually make the long term predictions. >> you kind of described the worst scenario, stagflation. that is where we have a slowdown inflation still stays high. so does that suspicious you to fixed income, to stay out of -- you think the stock market is vulnerable if that is the outcome? >> well, that is what we've been worried about is stagflation, but i think the interesting part, you've seen growth estimates tick up recently. and so that has actually died down a little bit in the space.

some people have been less worried about stagflation. i think that we're more worried that people are underestimating the impact of higher rates. and that is why this week is particularly interesting. people are starting to say ah-ha, rate cuts are not coming as soon as we thought, we have to get used to having higher yields, what does it mean for cash flows and how we allocate in our portfolios. and when is it going to be a good time to buy bonds again. and i think that that is what we're thinking about, sort of when is the inflection point for bonds. like when do we actually see, you know, that steeper yield curve where you have the duration premium that we all love to kind of -- that we used to have before all this occurred. >> it would be scary to get a real yield curve. if the two year stays where it is, where would the ten year have to be. >> it would have to be a lot higher and nobody really wants to think about that, so i think cuts is a muchizier way to think

about. from our perspective, we'll probably see a disinversion and we need to see how the data comes out. i'm sure the fed is also watching to see what the next course of action is. i think the next step is disinverted curve and a wait and see to see what the impact of policy is over time. >> so we need cuts. some people still think that that is coming -- i don't know what kind of economic drop back would cause the fed to cut next year, but i don't think that it would be pleasant for unemployment and other things. catherine, thanks. it is friday. everyone keeps reminding me of that. >> it is friday. >> so we have that going for us. one good thing. >> i'll sing it to you through the whole commercial break. when we come back, how could the antitrust trial against google set the tone for not just the search giant but for tech at

large in the years to come. professor tim wu will join us next. and as we head to the break, you can always watch or listen to us live using the cnbc app. stay tuned. (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.

google currently defending itself in the biggest tech antitrust trial in decades. this is the end of the second week in that trial. the government alleges that google unlawfully abused its search dominance to maintain monopoly power. our next guest's latest piece in "the new york times" declares that the google trial is going to rewrite our future. i want to welcome tim wu. he served as an advisor to the biden administration and is known as an architect of its antitrust policies. tim, welcome. >> pleased to be here. >> obviously, this is hugely important. there are people watching this from industry on every side, trying to figure out what's going to happen, but for those who haven't been following along from home, let's lay this out. the government's heart of this case is that google was behaving in monopolistic ways by paying apple to be the primary browser that it had on its iphone.

>> search engine. i think that's the heart of the -- >> internet explorer. >> similar case. i think the heart of the case is the idea that google maintains its search dominance, you know, the only -- its monopoly in search by bpaying off people, most prominently apple to the tune of $18 billion a year, which is not quite chump change to split the market. >> we had steve palmballmer on earlier this week, and he said he thinks there is even more to bring in this case than there was with microsoft in the internet explorer situation, and i understand the argument, the idea of buying off your competition, keeping everybody else away, but this is different than the microsoft situation because microsoft was doing it with its own browser on its own software, so it was locking other people out. this reminds me in some ways of a grocery store selling the in-display at the end of the aisle to a particular, you know,

endman's cakes or twinkies or whatever you're going to have at the end. it's hard to be a monopoly if you are acting with another company and you're paying them for the positioning. >> you know, i think if there were only one grocery store, if there were only a couple products, it might be like that. grocery stores are much more competitive market and there's a lot more going on. the difference between this and microsoft, i think, is fundamentally microsoft is more about sticks, and this is more about carrots. microsoft was muscling people down. in this case, it's a big payment, effectively, to split the market. i think the allegation that apple stayed out of search for this reason is also pretty important to the case. they had early kind of makings of a search engine, handling surf traffic. why don't we stay out, we'll give you $18 billion a year or whatever and not compete. >> what if bing, for microsoft, or somebody else came in and said, we're willing to pay $20 billion to do it? would that change the situation if there was another player and

it wasn't locked up with one? >> i don't think anyone was in a position to spend that much money. it wouldn't be as profitable for them to do that. so, i think it's -- i think they've got them on that deal, basically. >> what do you think of what's happened so far in the court case to this point? of the testimony we've heard. >> yeah. from what i have seen and read, i think they're doing pretty well, the government, because they've got, first of all, the big payment. they've got google kind of admitting this has been a strategy all along through its documentation, and they have other companies like duck duck go saying, we couldn't get in there. i think it's going pretty well for them. >> what is the hurdle, though? we've seen some situations where the government has lost some big cases recently. microsoft situation with activision. when you have losses like that, is that the case that you build eventually towards a stronger hand, or is it bad news if you start losing cases left and right? >> i mean, i think this administration, this antitrust

division has taken some big swings, and when you take big swings, like in baseball, you miss some and you hit some. they're rejecting the old approach. >> they're nowhere near winning a batting title. in fact, they wouldn't even -- they'd be sitting on the bench. >> they haven't had many at bats yet. they've won randomhouse. they've blocked a whole bunch of other mergers. i think they're doing all right. the ftc did lose the activision case but that was a tough case to win, i'll say. you know, they're going for it. it's a different kind of approach. they're happy to win -- they're happy to bat .500 or .600. the biden administration wanted to bat 1.000. i was in there, they would say, we'll settle it. obama administration settled a lot. this administration is going to trial. >> it shouldn't be the perspective, and i think sometimes it is with lina khan, that everything is bad and we're not going to let anyone merge, and therefore we're going to

take big swings, but why have that -- why start out with that viewpoint? what's bad about -- >> i think that they want to enforce statutes as written, and the claim act says that anti-competitive mergers should be blocked, and they think -- >> but anti-competitive, even if consumers benefit? i mean, there are times when companies shouldn't be in business because they're not -- >> i think they believe the last ten years, last 20 years, a lot of mergers happened that did not benefit consumers. airline mergers. mergers all over the health care industry. and they're looking back, a lot of hospital mergers, and they're like, look, prices went up, things got worse, we blew it. >> health care is a lot different than technology, though. >> it is, but it's actually worse, i think, some of the merger practices. >> really? where do you think? >> most of the hospital mergers you look at have led to higher prices, worse patient outcomes and have led to workers getting less money. they decided, we really got to

crack down on hospitals, for example. some of the practice group -- lina khan just brought a case against practice group merger where you roll up all the anesthesiologists and they raise their prices. these are not good for american consumers or american businesses. >> the doctors i talk to, my doctors, have complained that they were forced to go into bigger practices because of obamacare, that they couldn't keep up with the regulatory -- if you're a small office, it's a lot of bureaucratic red tape to keep up with, and as a result, many of them wound up merging with bigger groups. >> you don't think the base case should be, let the market decide what happened. the government does one thing, that causes unintended consequences. just stay out of it. >> you can take that argument to congress. congress did pass the law banning anti-competitive mergers. that's a view. second, i think that -- >> congress has done a lot of things that haven't been very smart. >> they do still, as far as i know, control what the law is. i think congress is -- part of

the point is also you got to shake up some of these -- >> congress gave us $33 trillion in debt too. >> tim, i would love to have a longer conversation on this. we are literally out of time for the show, but please come back. you're close and we'd love to have it. tim wu again. folks, that does it for this week. join us back here next week. have a great weekend, everybody. it's time for "squawk on the street." ♪ good friday morning, welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber at the new york stock exchange. stocks trying to stabilize here after the worst s&p day since march. first 1.5% selloff in more than a hundred sessions. busy friday. global pmis, watching for a possible expansion of the auto strike. our road map is going to begin with wall street's no good, very bad week. stocks poised for steep losses. s&p, nasdaq both on track for their worst week since march. plus apple shares are rallying a bit. this as its flagship iphon