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 and andrew ross sorkin. the gang's all back together. >> barely. >> we are all here let's look at what is happening with the u.s. equities at this hour you will see right now some red arrows across the board after the gains from the close yesterday. dow futures are down 154 points. s&p futures down 23. the nasdaq down 87 if you look at treasury yields, this could offer insight as to why we're seeing the declines today. that has been driving things for a while. the 10-year treasury at 4.51 the 2-year treasury at 5.12. it has been higher yields to this point that have been putting pressure on stocks over

the last week or two. let's talk about what minneapolis fed president neel kashkari has been saying because he was speaking at the wharton school of business kashkari saying if the economy is stronger than we realized on the margin, then that tells me rates would have to go a little bit heiigher and held higher to cool things off. we will talk to him about that directly he will join us live in the 8:00 hour >> he sounded more hawkish. >> he is sounding hawkish, but maybe we got to be hawkish given how strong things seem >> how they seem who knows? >> and jpmorgan chase ceo speaking to cnbc in india overnight. here is what he said about the economy and fed policy >> so, if you have higher for longer and good growth and inflation is contained, that's

good you have more fighting for capital and payment for capital. the world needs it for the military and green economy and i.r.a. act and chips abs act an deficit spending right now, it feels good fiscal stimulation was extraordinary. that was a global phenomenon more in the united states than everywhere that is a little bit of a sugar high that will do away. -- that will go away you have ukraine, oil, gas, disruption of trade flows, wi winter good leadership on the part of america and india and china and europe could make sure the negatives don't happen i put myself in a cautious category >> the negative could happen if the government shuts down. we will talk about that in a

bit. >> and what would happen if the world got to 7% interest rates the world is not prepared for it i don't think that is something he is anticipating, but that is the worst-case scenario. >> he said i'm cautious at the very end i would listen to him. i'm glad i learned that express gradually all at once. i think a lot of people think that will happen the nfed doesn't know the lag effect of 500 basis points how long does that take? you have the lag effect of the inverted yield we are right where that is supposed to be 14 months or 15 months >> he said december. he came up with that model. >> predicted eight he said no it has been correct every single the time >> could you fathom them lowering rates next year

does that make sense >> the people like gundlach say that was it. you can't tell a pause from the last one until it happens. i don't know the whole question is whether with we are actually restrictive right now. are we in restrictive territory at 5.5 >> the question is have you tamed inflation. some of that is out of our control. i read through the issue in jamie dimon. he is blaming politics on it the energy prices and food prices what you may see coming from that his comment is if they will have lower volumes and higher rates, meaning lower volumes of energy and higher food. there will be stress in the system he he said warren buffett says you see who is swimming naked when

the tide goes out. politics is his biggest worry. >> we will see what deal the president can do if he gets the auto workers president biden is going to join the uaw picket line i think his possible rival in the 2024 election was ready to do it, too both of these guys >> this is what pushed him donald trump was saying he will go there if you lose michigan, you will have a tough time winning the election the first time in over 100 years -- first time ever -- we had a sitting president going to stand on the picket line his chief rival was threatening to do. we had debbie dingell on last week she said he could lose she told me off camera she said he could lose michigan because trump resonates with the auto workers and the people there. >> it is a tough situation

there are positives and negatives. inflation is the reason people are sour on the economy. he is standing -- he is doing this -- in his words solidarity with the uaw. shawn fain will speak out. phil lebeau will be there watch withing the picket lines in wayne, michigan. note, brian sullivan will host "last call" live from wayne, michigan at 7:00 p.m >> it is fraught with many moves. he did not stand in solidarity with the railroad workers. if the strike goes on for a long time and it starts to impact the economy of the united states, the economy of michigan, you could have it back fire in an

election year. it is an unusual move that people are watching. shawn fain from the uaw has been reluctant to say they will support biden. he has proclaimed he is the most union-friendly president in history, the head of the uaw is pushing that. >> all of this is with ford pausing construction of the battery factory in michigan. the company did not say if it is connected to the ongoing uaw strikes. said we will limit spending on construction until we are confident about the ability to run the plant. ford was planning to operate the plant in partnership with chinese based catl, the world's largest ev battery maker, with shares falling in overseas trading. i figured that out they are not making diehards batteries to start your ice car.

>> this is a situation where republicans have been pressuring the company to not do this with the association with china i thought the same thing i could not figure if this was union or caving to china hawks >> a lot of money. they are losing money at this point. it's early everything that the f-150 makes, a lot of what the profits are going to will transition and they are losing money. are people buying evs en masse not yet. when they do, they are not buying big evs >> the uaw should get big pay raises the ceos messed up by paying themselves too much which is lousy. he thinks the federal regulations need to be rolled back because the big three automakers cannot be profitable with the heavy regulatory push

toward ev. >> i have seen cool evs. they are not tesla ionic. there are cool ones i have not seen a nice big one hyundai or kia both have nice evs. of course, kia >> the kia looks cool. >> that's what i'm talking about. ionic. >> rivians are cool. lu lucid is cool, but it is expensive. polestar >> thank you, god. i think -- no, i was talking to my producer. voices in my head. >> a lot of voices in your head. the countdown to the government shutdown and moody's now warning the shutdown could lead to a negative outlook and

downgrade. the company says this is how political polarization is weakening policy making. moody's rates the u.s. government aaa the last of the big three a agencies to have a aaa rating. it is the last agency to maintain the rating like this after fitch downgraded the government by one notch in august s&p gloebal downgraded it in 2011 fitch did it and saying this was the wrong time and did not make sense. part of what fitch said is there is polarization that things won't get done this is not the same as the debt default. moody's is saying this is signaling that there is no way politics wis working. coming up, we will talk about the strategy of the trading day which doesn't look good at this point down 145 points. not a great week last week either in a bit of a consolidation or

correction mode here probably based on interest rates and maybe oil. $150 possibly. don't miss the interview with iac chairman barry diller. he joins us on set at 8:00 a.m. eastern. you are watching "squawk box" on cnbc it takes years of dedication to get to this milestone. the new york stock exchange is a symbol of what america is all about, the potential of an american dream. it is day one. a lot of work has happened to lead to this historic moment. the only way you can move a society forward is a true expression of freedom.

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more than 100 points 137 points nasdaq is weak as well for more on the markets, let's bring in a. jj. odom. after that move off the october lows, we're in a back filling or something more substantial >> i think the volatility is concerning about lately we heard the idea of recession. if we look back to the fed meeting, it seems like a soft landing is in play for them. it seems the market is concerned that it is possible they can potentially go further with rate hikes. it seems like a dpgoldpold golds scenario with the s&p. >> it should be happy with the

soft landing scenario with the s&p. that is the paradox we find ourselves in the fed hasn't done enough >> you heard jay powell or chairman state it. expectations rising and the consumer is not fazed by prices. that is the concern with the soft landing turn into no landing and if they raise rates higher if you are in that scenario, we move into recession. we are moving into the next phase and how the fed navigates rate cuts or do they cut before hikes? >> what do you think will there be more hikes your heart of hearts >> i think we have seen the last of the hikes in this cycle >> you do? >> yeah. rates are fairly restrictive at these levels if you look at the forward thinking measures on inflation

and what is coming out for september and you see that sticky inflation expectations are 4.1% for september we see that continue to move in the right direction. oil prices are a concern and how that impacting headline inflation. we feel that is short term in nature for now. >> you worry about the system with wage increases on the horizon. we have unions still at 8 t%. they have been rising. that could not add to the weight diffe differential if it is everyone wanting more because of inflation, that could turn into one of the spirals. i need more money. they need more money we have seen that movie before. >> average wage growth is 4% 3.5% is indicative of 2%

inflation target that the fed needs to get to. to your point, there are headlines out which are concerning to have an impact on the long term. the fed is pushing out to 2026 a little further is a bit concerning we will see how that plays out i think some of the headlines are showing pockets here and there. you hear about lower quit rates and it will be interesting when it comes out in the next couple months. >> suddenly 2024 is not a great year for s&p earnings growth is this the rebound we are looking for after the flatt yea? >> we see it in mid 2024 that is the soft landing base case you believe the fed will pivot the market should rally from there. we see positive earnings revisions in the last month. we look poised to perform quite well as the fed looks to pivot

you look at 88% of the s&p consumer discretionary companies beat expectations. the s&p is continuing to push higher. >> is it possible rates don't go up enough for multiples to contract multiples say where they are and earnings grow 10% to 12% and it is reflected in the stock price? >> yes, definitely i know there is a concern of a consid contraction and that impacts earnings i think in the no-landing scenario, you would see a contraction. you should start to see higher levels or us able to reach the all-time highs on the s&p. >> as far as multiples do, they

are not cheap. >> no, but back out of the magnificent seven and the equal weight is 16 times erarnings as opposed to the magnificent seven. some of the air coming out means there is room for valuation across the bhe board >> those are the ones you want to own >> you can get that bounce back and a little bit more bang for your buck and look outside of the seven names. i know clients love them because that's how they got to where they got in the portfolio and concentration. there there are other opportunities outside of the seven. >> gold or bitcoin if you did bitcoin, would jamie come and see you and say x-nay on the it-coin-bay

>> very good >> we are looking at new technology i think we have not seen enough with the history of crypto in general. we tell them and we cannot advise on allocating don't put more than you are willing to lose in that position you look at the regulatory h headwinds there. >> you look around if jamie is there? >> we have a target on gold. i think a lot of portfolios are diversified. >> gold has held up. it has been at $1,900 forever. a.j., thank you. when wite come back, chatgpt is getting smarter it can now see, hear and speak we have details on that after the break. a programming note join us thursday for the delivering alpha conference here in new york.

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incarnation of the a.i. bot. >> they didn't use real a.i. >> they didn't if this can see, hear and think, you are getting closer to -- >> what? >> the most "her." >> i did see that. same thing >> yeah. >> the big deal is not the voice st stuff. >> it is the thinking stuff. >> it is the image stuff idea you can feed it an image and it will tell you everything in the image and fix it and work it >> it breaks down security pro protocols? >> it is a totally different approach the mind blowing part is the issue with you talk to it with siri and alexa you saw amazon made the investment in anthropic.

that technology will end up on the other side of alexa or other ser services >> they said it will help give smarter recommendations for shopping it is that level stuff with alexa which is scary by itself when we come back, we talk about scary. government shutdown looming. latest on the efforts in congress to avoid it and the consequences if it happens as we head to break, a look at yesterday's s&p 500 winners and losers >> announcer: winners and losers is sponsored by state street global advisors.

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good morning welcome back to "squawk box. we're live from the nasdaq market site in times square. let's look at futures. dow futures were down a half hour ago and we are indicated

off 135 points s&p off 20 nasdaq indicated off by 70 appoi points this comes after the down day yest yesterday. if you want to see what is happening with energy prices, it looks like crude is dipping below $90. brian sullivan asked chevron ceo mike worth about the energy prices on "last call." >> we see a global economy which is continuing to do well we have seen production cutbacks in the opec countries come on top of the market which was showing signs of tightening. it is fundamentally supply and demand sur prices have been firming here for weeks. >> meantime, goldman sachs ceo david solomon spoke at the same conference he defended the issues and

demand the investment in the sector solomon said traditional energy companies are important to the economy sachs. in the meantime, we are in the last days of september and congress has four days to fund the government to avert a shutdown before september 30th that's the deadline. joining us with more punch bowl news is jake sherman good morning to you. how do you handle that after i read your newsletter this morning? we should talk about the ukraine piece of the aid that is a sticking point >> andrew, the senate has been on the sidelines so far with the government funding fight is starting to move on their own stop-gap measure they are trying to keep that very clean meaning little or no ukraine

funding for 45 days. a little bit of disaster relief. the only question is can kevin mccarthy who promised to fund the border and institute border policies and cut spending. can he put that on the floor the question is if senate passes this bill is should he upset the right flank of his conference to avert a government shutdown? if he puts this on the floor, he risks one of those snap votes on his leadership which would be very difficult for him i'm not saying he can't beat it, but they could challenge his speakership. that would be tough for mccarthy as we tick toward sunday, andrew, sunday night, the government shut shuts down. we will speak to mccarthy today. >> what is the chance there is a vote on his leadership

is that effectively going to hold him back from doing this? >> i think there is a good chance if he puts a clean cr on the floor that there will be a vote on his leadership he has a slim majority you have to assume he loses it or democrats back him up and vote with him because they don't want anyone to the right of mccarthy that's the first question. the larger question he here is i would say on the ukraine piece, andrew, which is in a month, can congress come together on a ukraine package if they punt now? there are big questions about that and is this the reason he won't put it on the floor? i don't want to pretend i know everything mccarthy is thinking, but he said government needs to cut spending in the short-term package. he said that congress should put in place new border policies

all of those things on the table would be difficult for him to put a clean spending bill on the floor. >> jake, he also won't put the compromise that's come from the problem solvers that they come up with because that would be cooperating with democrats the problem solvers have border spending as part of the program. at some point, someone has to bring a vote about his leadership what leadership does he get when that small group of republicans is running things anyway that is frustrating. >> it is a fair question you are seeing the moderates, the 18 or so republicans in the districts that joe biden won, get frustrated with the mccarthy leadership they don't want what is on the other side of mccarthy there are two phases here. before the shutdown and after the shutdown before the shutdown, mccarthy

doesn't have wiggle room after the shutdown, he might have the leeway to get something on the floor from the problem solvers caucus or the senate i think that's a different scenario once the government is shutdown. >> why does he have more leeway once the government shuts down >> this is a stupid decision for republicans. period i'll say that flat out joe biden is not doing as well as democrats would hope. there are a lot of things republicans could talk about joe biden on whether it is the border or any host of things, and republicans holding one branch of the process. they don't hold the senate or white house, but they will shutdown the government. shutdowns don't work 2013 and 2018 and 2019 they don't work.

mccarthy hopes people realize after the government is shutdown and he has more leeway to help republicans get out of it. >> jake, can i switch gears to get your take on president biden going to stand with the uaw or not and this idea that trump was going to and what is really happening there. do you have a perspective or view >> i do. listen, democrats were on him hard about not going to detroit and not standing with union workers. he says he is the most union friendly president ever. he has not been out there. there have been a lot of members of congress and public officials who have walked the picket line with uaw i think president biden had to do it. some democrats will say he is too late to it you have hakeem jeffries and many senators wondering where biden was. >> was this spurred on by trump?

>> i personal don't think so listen, the union has made clear that trump is not welcome and not be a positive development. i really don't think this was pushed by donald trump. >> jake, always great to see you. appreciate it. >> thank you, sir. coming up, why is the senior apple secretary executive touto testifying in the google lawsuit? we will talk with mozelle thompson about what to expect. you can get latest from "squawk pod" and listen any time we'll be right back.

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now to the anti-trust trial against google eddy cue will testify today likely about the deal that made google the default search engine on the browser steve kovach has more. >> reporter: eddy cue is testifying today you may ask why is eddy cue at the trial against go against go? he is in charge of the apple tv

plus and the billions that apple collects from google to keep google the search engine it is alleging deep pockets to be the default search engine i'm told by sources familiar with the testimony today, he plans to defend the arrangement with google. he believes google is the best and users have the options to switch he will say apple doesn't make theirs and google is the best and they don't need to allocate research to create their own those google tpayments go to the services segment and according to analysts at bernstein in the note last week, google pays

apple 19 billi$19 billion this year the testimony is likely going to be closed today. another apple executive testified last week. his was closed as well we will find out more later this morning, guys. >> something major happens and you will let us know >> absolutely. >> what is a surprising outcome? >> first of all, if it is open apple and google have fought to keep testimony under seal. a lot of trade secrets are passed around in the trial what everyone wants to know is how much is google paying apple? $19 billion estimate in court. an estimate from $4 billion to $7 billion apple refuted that we never have gotten the actual number. >> steve, last week, we had tim wu on this he was the architect on the anti-trust policy.

>> he left recently. >> he is talking he joined us last week he said that he thinks and this is a really strong case for the government i said this is equivalent of someone selling the end of the aisle at the grocery store if another bidder comes in and pays more, how is that anti-competitive >> they could if they wanted apple keeps towing that line becky, you have tim cook coming out blasting the business models on the privacy front for google and facebook and choosing google to keep the search they say it is the best. maybe they believe that. they also believe that $19 billion a year that we keep talking about is important to them google tloses this and that's ba for apple. >> i wish you had been here for that conversation. he said everything lina khan has

done is a harm he kept falling back on healthcare sector. >> healthcare is one thing technology is different. >> and the article was a hedge fund that's made so much money betting against it >> the whole thing with scrutiny with big tech. where is the consumer harm the developers and people behind the scenes we're still paying $10 a month for spotify sdp >> perfectly reasonable to see what sticks. we will assume this is bad >> by the way, they are still fighting the activision deal we thought it was over it is not over. >> you assume every merger is bad. it is the opposite of innocent >> it is not criminal court. >> what is interesting is lina khan suing, one case is she is

winning that part of the argument you see the overall case she has lost, but within the ruling there is new law built i'm not saying it is good or bad. for the anti-trust legal community, new thinking is emerging in some of the rulings. if the overall ruling is a loss, there are things that can get used for the next case i'm not sure it is appropriate, per se, to go after a company especially if you were to know you are going to lose to get one point to use later that seems problematic >> ted doesn't agree with that there is a cost to continue to lose this is different from the obama administration where people were frustrated they would never bring any case. >> i said lina khan would not make a major league baseball team with her batting average.

she is not batting .500. she is batting -- >> way less than that. it is not a perfect comparison it reminds me of the abortion cases. we saw chipping away and chipping away until we got the result last year you see this being a longer-term play chip away, chip away >> do you get some huge pendulum swing with a new administration? >> yeah. >> another trump term? does this go out the window? >> trump brought some of the cases. >> true. a lot of this started under the trump administration the doj case >> the nlrb. the former head. i'm sure she is on the line picketing. >> in the end on this apple case today. have you played with bing? it is not google >> it is not bad >> bing!

>> that's apple's stance we use it because it is the best best for users we cannot create a better one. >> if it is the best, why pay $19 billion. wouldn't you want the best >> do it for free. >> if it is the best, it is the best >> this is the reason why it is on certifiservices business. it is based on usage more people clicking on google t the more money apple makes >> you are mr. tech. you let him fix my phone >> i was watching in the control room >> higher. you don't want a flat tire number two, no apple music entire library disappeared >> everyone thinks that. >> no captain & tenille.

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the writers guild and hollywood studios reached a tentative deal to end the strike joining us now to talk about what it means for the media stocks is bob o'donnell. chief analyst. the strike is over and they will be paying more, but they get the content back how does this wash out >> we have to think about long-term and short-term, becky. obviously, they have been having to pay the production cost for a long time, and that's helping the bottom line, and then all of a sudden people realized they will have to start paying again. like the music business, you have to have new content and fresh stuff. actors still have to come together, too, and let's not

forget that before any of this happens. at the end of the day, let's not forget, we're in the golden age of television, and there are more shows now than ever before, and there's a bunch of people that i know, and they said i could catch up on the series i couldn't watch before, and at the end of the day it's about leveraging the library you have companies with different-sized libraries that can leverage it in different ways, and all of these companies have been jockeying for years to get access to the rights and the content they want to have, but they have to refresh it. the question is, given how much they currently have, do they need to refresh it as much do they need as much new content

as they have been creating perhaps not. >> that's an issue you can only be as smart as your dumbest competitor, and if your richest competitor or dumbest come competitor is kicking out new content, you have to do that it's been a losing expenditure for most of them, and is there anything in the contract to get to profitability we have not seen anything but heard what is probably in this, and increased transparency, does that give away the keys to the kingdom, because they were going to get transparency and get

royalties back in the new digital world? >> clearly all of those things of true. all of those things are going to be impacted because of the fact of the matter the writers will be getting more for streaming, and that is going to be a long-term challenge for them if anything, as i said, in the near short-term you have the hits these companies are going to take. they are going to have to figure out longer term, how can they leverage things into other areas. i was talking about the library, but in addition to the library there's other times of content that can be leveraged, from video games and parts, and what are the things they can do to leverage these things. for pure streaming purposes, it's continuing to be a bloodbath and will not change.

they are going to have to get smarter about how they can leverage this content, their libraries across the board there are no magical bullets that will solve the problems with the issues you described. >> thank you for joining us. >> thank you when we come back, two big hours ahead. you don't want to miss this, an extent the interview with iac chairman, barry diller he will join us at the table this morning at 8:00 a.m. eastern time don't go anywhere. brew to your heart's desire. ...with the l'or barista system. now brewing peet's coffee.

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chip? at&t business. good morning stocks under pressure this morning as investors weigh a looming shutdown in washington, labor strikes and the fed's warning of fewer rate cuts next year the ftc expected to file another lawsuit against amazon this week, and we will discuss if whether or not they have a strong case and what the ftc needs to prove the second of "squawk box"

begins right now good morning welcome to "squawk box" here on cnbc we're live at the nasdaq market live in times square i'm andrew ross sorkin along with becky quick and joe kernen. the dow is off about 100 points. the s&p looking down at 16 points the treasuries, the two-year, 5.119. let's look at oil as well. crude, you can buy it by the barrel and it will cost you $89 and a penny.

joe kernen, what are you look at >> a lot of headlines. i am reading about another possible strike. good luck. video game voice actors? oh, gee, what will i do? president biden traveling to michigan to join the uaw picket line the uaw president is expected to join, and here's what i am talking about, there could be another strike hospitaling in hollywood. video game voice actors and motion capture performers authorized a strike if negotiations on a new labor contract fail, and the sag-aftra union voted in favor of

authorizing a strike, and it might not affect my life -- >> i would like to know how many voted in that, 98% voted -- they have emailed me because i am a member of sag. i would like to see how many people voted for that. > kashkari said rates probably have to be go higher and then be held for higher, and we will ask him about that -- oh, it's tomorrow when he will join us live in the 8:00 hour.

in the meantime -- i'm looking at you because he stayed pessimistic, and it was hard for you. let becky introduce you. >> a long-time friend of the show, chairman and ceo of a beared company it's higher interest rates putting pressure on the market >> yeah, we got bearish last march of 2022, and we stayed bearish this year, and largely because of the wrong reason because we were expecting a recession. we did expect -- i do think inflation is sticky and there are elements of inflation that is structural, and that means long-term interest rates should stay higher, and we got that part right if the claims of the

unemployment rate is the still at 3.8%, so there's still tightness in the labor market that is important for the fed because that's big input into the way they look at inflation and interest rates >> we spoke with somebody earlier that pointed out the jolts rate is not the same, and that's seeing impact where you don't see people as willing to quit, and that's an indication the job market is getting a little tighter >> yeah, it should get tighter because the profit margins are under pressure for three quarters in a row. a theory is there's job hoarding on the part of companies, and despite the fact that profits have been down, albeit modestly, and normally companies would lay people off, and now they are holding on to them, and they are saying, gee, it was hard to get

them in the first place, we will hold on to them. now, quarter after quarter if that starts to happen, you will start to make different choices. >> what does that mean you are do you think we are going to -- if we are getting to that point where companies are willing to actually fire people because margins are getting squeezed, is that good news or bad news do you want to see a labor market that is a little looser and so then you don't have the fed continuing to raise rates and you don't have the same pressure on wages? is that what you are advocating for? is that good news? >> so sometimes there are profit recessions without there being an economic recession, but it is never the other way around, if you have a market recession, it

gets tagged. the issue, though, is i think there are changes in the labor market and the global economy that mean that inflation could stay higher for longer even if the economy slows. you have had an even ed to globalization, which i am convinced will keep prices higher you have environmental policies, in my opinion, keeping energy prices higher for longer then you have a federal government that is running budget deficits of 5% to 6% of gdp, and 65% of the government spending is indexed to inflation. in some ways the federal government is fighting the tkpget the inflation down, and so it will be a challenge for investors. it does suggest you want to be

more towards companies providing profits, cash flows, you know, you want to stay away from the long duration assets >> and the 10-year is at 4.5 so you were wrong for the wrong reason does that mean you were right? two wrongs don't make a right. i am confused. >> the fact of the matter is -- i have to say, joe, i think the chances for recession are still high >> it means the fed has to go further to cause a recession, which is playing into your negative scenario. >> i think so. i would have expected to see one now, but right now if you look at the thing called the taylor rule, and it's a wonky thing, and it would say if you want to get inflation to 2, you have to

get the fed funds to 8.5, and the fed would be a department of the treasury department. >> we want to remain independent so we will not do what will make you mad -- we will not do what we would like to do, which would make you mad >> maybe you were wrong for the right reason >> i'll take it. >> i pushed you pretty hard and you stuck to your guns and never threw in the towel >> it's no victory lap here. >> it seems like the market at this point does have a case of -- >> nerves. >> do you ever try gee the butter >> i am doing yoga, and holistically, i'm good

>> is that good for the pipes? >> apparently, it's like nature's cure, and clean living, too. and positive mental imaging -- >> that's what you are selling >> not kidding i will tell you off camera people don't need to hear this >> is there something you won't discuss on camera? it has been 20 years >> that's a great thing. >> what? >> athletic greens >> melatonin makes me too groggy in the morning >> probably taking too much. oure right this is too much . with its customizable options chain, easy-to-use tools and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are. e*trade from morgan stanley.

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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. welcome back to "squawk box. the ftc is filing their fourth lawsuit against amazon, and our next guest says this will not be easy to prosecute and would likely take years. the former ftc commissioner under president clinton. good morning to you. do you think this is a worthy case or not? >> i think it's an interesting and hard case. i think the ftc wants to send a

message to big tech about their practices and to give them some guide posts, and at certain point, if you are not successful in prosecuting it sends the opposite message that will be a challenge in this case there are positive features amazon provides to people, and i am sure they are going to raise them, positive benefits to consumers. the ftc is going to have to navigate what they think the harms are. >> let's talk about what the case is going to be or what you expect it to be? >> one, they will focus on amazon prime and they are going to focus on the fact that amazon prime links delivery services and other services with amazon prime. now, competitors may feel that's a threat to them, but for consumers they feel that's a benefit because when you buy a

product it's easy to get things delivered. the second thing i think they will focus on is whether there is some sort of advertising link to this that pops up in amazon that favors their own brands or other brands that they have a financial relationship with. they will look at that i think those are going to be interesting challenges >> the thing that i can't figure out about this is for years, you go to the supermarket or go somewhere, and people are paying for shelf space, and that's equivalent to the sponsored ad or product that pops up first in the carousel when you search for something, and you see those sponsors items, and that's like seeing what is at eye level if you were to walk into a supermarket, no? >> a bit like that i think the ftc challenge is going to have to show why this is different than what you have

to show in the supermarket >> what will that look like? >> because amazon has a dominant place, and customers don't get to see alternatives, and that's the challenge, there's a potential benefit consumers are not getting. >> first, they have to define the marketplace, the entire marketplace. >> that's right. >> the question is whether you think the judge will look at the marketplace as the overall retail space, and amazon will say we're a baby over here, we own less than 5% of the overall retail business in the u.s., or they will say this is electronic retail space, and you are probably in the 30s and 40s, right? >> you still have people like walmart.com and other competitors out there. >> but, if you are inside the app, obviously, or on their web

page, you are at 100%, if that's the market we never defined the market like that before, have we >> i think you are right you are absolutely right that's going to be a challenge, defining the marketplace and defining their role in it to show they have dominance that there can't be any other competition. the interesting challenge is, there are other competitors out there. walmart is doing very well >> you know, it strikes me that the ftc doesn't really care what amazon says, and amazon already said they are not going to offer anything to try and reach an agreement or a settlement. they are just diametrically opposed on their view on these things i guess they kind of watched what happened with microsoft and activision, and microsoft said we will do whatever it takes to get it passed and nothing has

been enough, and they satisfied the uk but can't satisfy the ftc. >> i think there will be a point when they want to offer some sort of litigation, but now that they are in the middle of the litigation, you are not much upside to doing that >> you are just showing your happened >> right and the ftc has been clear about wanting to seek remedies that are harsh, and there's a wide range of remedies saying you have to do something, and that's why this case will go on for a very long time >> why do you think it will take so long? it will be appeal after appeal the case will take a long time >> the case itself will be hard. you have to prove, for example, what the market is second, their dominance in the market there's a lot of factual information involved you will have to show where the

consumer harm is then there will have to be a counter showing of what the consumer benefit is and to weigh that out >> you are saying the prepare for the case is how long >> oit has been going on for quite a while now, but it will take longer. >> once you bring a case, the judge will say it's in the public's benefit for it not to -- >> how long did microsoft's case take >> a long time >> well, you have other people involved here. the ftc has gone out to seek the state attorneys general to be involved, and they will want a piece of the action, too it will take a long time >> we will see i am sure we will be talking about it given how long it will take thank you for coming in this morning. >> my pleasure when we come back, president biden expected to hit the picket

lines. you can join us every day for the latest headlines no matter if you are at home or on the go, just head to peacock.com. for somebody that immigrated from latin america, my family is originally from aurrgentina and peru, and embrace yourself and know where you come from knowing where you come from is critical to pave a path of success.

president biden expected to hit the uaw picket lines to show his support for the union, the uaw, and the labor battle with the big three. and phil lebeau joins us now from wayne, michigan >> reporter: it will be five hours from now when we will see president biden outside the michigan assembly plant in

wayne, michigan. it's unclear if we can ask him questions, or if it's more of a photo-op so the white house can say he's a pro union president and here's a shot of him with the picketers. here's what we expect when the president comes a little later today. he will meet with the strikers, and they said he will walk the picket line, and not sure he will walk the picket line but he will talk with them, and the mess sing to support those who are picketing. remember yesterday when ford said there are significant gaps between itself and the uaw if you look at shares of ford, one interesting headline came out yesterday late in the day. ford said it would pause construction on the $3.5 billion ev battery plant just west of here, and the company said -- not go into great detail, but it

said it's unsure if it could operate the ev battery plant, and then the uaw said it was a shameful threat, and we are asking for a just transition to electric vehicles and ford is doubling down on their race to the bottom you know that's a sticking point right there, and clearly the uaw would like to see those jobs represented by the union, and ford is probably fighting them on that. we will find out more today, and we will look at the shares gm and stellantis, keep in mind they are still talking with the uaw, and right now we are looking at 18,000 uaw members on

strike in the united states. that's 12% of the uaw membership it's a limited strike at this point, and one the big three would like to see resolved that's where we are as we await president biden later today. >> that sounds like the ghost of christmas future to me almost. if they get everything they want and make it that difficult, and then evs take fewer people on the assembly line, it seems like it's a shrinking business. >> reporter: joe, not to get into the details here, but a lot of this comes down to whether or not the union will represent workers at ev battery plants a number of these plants being developed and built are going to be joint ventures. they are not under the master contract of gm, ford and

stellantis the union would like them to be. and the uaw, and this is just my sense here in reading the tea leaves of the statements, and the union is saying wait, if you own it and it's not a joint venture, it should be under the master contract and i suspect ford is pushing back and saying we are not ready to go there yet. we will find out more in a day or two >> it's not the china hawks that don't want ford to open the plant, it's the talks with the uaw, and we were talking about that a little earlier, phil. >> reporter: the china component of this is a significant part. there are more than a few critics out there saying, remember, they are licensing the technology for the batteries within this plant from catl, and that has a number of people in washington saying, wait, what is the relationship here? are these truly going to be ford employees or will they be catl employees as well even though

it's a wholly owned subsidyairy by ford. this is a tough plant for ford to first announce and then get built. they are in the process of having it built. they originally wanted to do it in virginia, and governor youngkin said i don't want anything related with the chinese auto industry in this state, so they put it in michigan >> the big three can't move to the right to work states, and that would be too hard are there proposed new ventures, and they could go right to work states >> reporter: yeah, they are joint ventures they are set up between a american automaker and the korean battery maker and ford is working with catl out of china, and they are licensing the technology and that has a lot of people saying in washington they are not crazy about that

>> you will witness incredible things today with the president there on the picket lines, theoretically. thanks a government shutdown is looming, and we will talk to a member of the ways and means committee. and then barry diller will be at the table this morning at 8:00 a.m. stay tuned you are watching "squawk box" and this is cnbc rich, velvety... coffee. cafe-quality... espresso. one high-pressure system... that can do both.

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welcome back to "squawk box. now for the latest news out of washington, and what looks like a looming shutdown, and we want to get to emily wilkins who is in d.c. this morning good morning >> morning, andrew the house and senate are back today and the house has a critical vote on whether to move forward with four major spending bills. this is important for overall negotiations but let's be clear, none of these bills will prevent the government from heading towards a shutdown and they are working on the bipartisan stop gap bill since last week, and it would fund the government for 45 days is what they are negotiating on right

now, and it still has to go through the house. remember, there's the handful of republicans that threatened to remove speaker kevin mccarthy from his leadership role if he works with democrats to end the shutdown a lot of complexities there, and the blame game on the shutdown already started. president joe biden said yesterday it would be republicans that would be to blame over spending bills not being passed republicans should have to pay the price in the 2024 elections. >> funding the government is one of the most basic fundamental responsibilities of congress, and if the republicans in the house don't start doing their job, we should stop electing them >> meanwhile, donald trump is encouraging the group of republican holdouts on truth social telling them unless they get everything they demand, they should shut the government down. and he said president biden would be blamed for the shutdown and now the question is will

there be a shutdown to how long it could last. >> we will keep our eyes on all of it. thank you for that report. let's bring in our next guest. a democrat representing wisconsin, and a republican congressman from arizona, and both are members of the ways and means committee. i just want to hear from con congressman from arizona, do you think it's the nuclear option with the government shutdown, and are you for that >> i wouldn't call it the nuclear option, but it's not particularly useful and helpful. the battle is the deficit, and we will hit 9% of gdp this year, and we may come in as high as

2.4 trillion in the current fiscal year. for those of us that are in the battle of how do we get fiscal sanity to understand the numbers, almost nobody listens or nobody is really willing to deal with the reality of how ugly the numbers are until you get up against these stressors the problem is this is really bad leadership on our part and we need to actually get through this in -- but it is about the money. >> congressman, bad leadership what would you do to get matt gaetz or andy bigs or any -- now they are famous. they are famous names now and not saying it's solely due to this >> but it's part of it >> let's say you are leading, what would you do right now if you were mccarthy? >> one of the great difficulties

the speaker has are the motivations solely truisic, and that's the nature of the body when you have 435 people who all represent -- >> well, you just said it's bad leadership >> well, that's not what i am saying what i am saying is you can actually in many ways only work to each individual's iden idiosyncrasy we have had a couple members change their mind from day-to-day >> congresswoman, in a different vein, let's say we kick the can down the road again, and what

should democrats do to be willing to address some of the the congressman's concerns about how much we are spending in debt service and everything else that can choke off the government from doing all the things it would like to do >> well, good morning. of course, the representative knows he's one of my favorite members of the ways and means committee. >> i'm worried >> get worried >> yeah, something bad is coming >> he's also the house chairman of the joint economic committee, and i am telling you a shutdown would be devastating to our economy. i think that he protests too much about the deficit considering that the deficit went up by 39% under president trump with his help. of course, he's prepared to make permanent those tax cuts that we provided through the tax cuts and jobs act i was not on the committee at

that time, and that basically went to corporations and to, really, the spending that he is complaining about would take it out of the hides on people on snap and food stamps and take it out of the hides of wick and babies and the poorest of the poor i think that democrats are willing to help prevent a shutdown, but i don't think it's sustainable to say that after the agreement that republicans made to cut the deficit by almost $1.5 trillion they want another $120 billion on top of that, in addition to all the other extraneous things that may show up in a bill. we have to impeach joe biden, and we have to put abortion writers in, and we can't provide funding for ukraine. i do think the deficit is a concern, but i just want the

representative to be very, very transparent, you know. number one, the deficit, will you consider george w. bush and donald trump, no other president has increased the deficit as much as he had not withstanding the deficit, and he had the greatest increases because of the propensity and need to cut taxes to the very wealthy, and then lie about how he is going to somehow have it trickle down to regular people >> congressman >> look, i love gwen, but those are the classic talking points we get into, and then we, on my side, we will talk about the economic growth and then the democrats with the inflation reduction act. the number one driver of the deficit is demographics. we're uncomfortable telling that

truth. we got old it's what happened in society. you look at today for the next 30 years, the $130 plus trillion of borrowing that is coming and substantially driven by medicare, and if we choose to back the social security remember, social security, the trust fund is empty in nine years, so this year we are going to borrow as high as about 2.4 trillion is what it looks like by my math, and that's 9% of gdp we are hitting numbers that should put us all into a panic the market -- >> you mentioned a lack of leadership now that does apply, because you can't get potentially either party to talk about entitlements, and they are off the table on both sides. >> and that's the point. you heard hit here first, folks. they want to cut medicare and social security in order to balance the budget on your

backs. they don't want to -- >> that's absolutely not true. it's not true. >> what about these rich people who avoid taxes? knock it off >> and the president made it so we are not allowed to talk about it, and he said that during the state of the union being the previous ranker on social security, and the first year is a $16 billion shortfall, and the democrats' proposal covers 20% of the short fall >> congressman, the problem is both parties have -- both parties have signed off on this. former president trump from the republican party basically said the same thing, there's not even a debate on the table when it comes to entitlements, because both sides are afraid of being accused of what representative morris is just saying. >> and there's just a few of us out there, and i get up on the

floor every week and try to walk america through just how devastatingly ugly the math is, because the math will eventually win here >> well, you know, one of the things that can help the math that you voted against is providing more money to the irs to collect, you know, not -- tax evasion is in the billions of dollars. we know from history that -- that the gop between the wealthiest people and the poorest people is not healthy for our economy. to say -- >> gwen, you and i agree on the income equality being the destabilizing issue in society instead of an update of technology, turns out many of us

on the republican side are moving the irs to use ai and that will be dramatically more effective in tax collecting. it doesn't produce tens of thousands of unionized government employees, but this is much better -- >> unionized -- we know how much they make. >> and we are borrowing $72,000 every second right now >> congressman, are we stipulating on the record that you are in favor of updating, upgrading and effectively collecting more in taxes in terms of enforcement when it comes to the irs >> in some ways it's not more taxes, but it's doing it fairly and appropriately, but it's using technology to do it because that way you don't have the human element, where we are seeing where some things seem to be favored and some things don't. it turns out -- >> but you would only do that to

properly collect more taxes that are otherwise -- that the government should have been getting to begin with, correct >> that's fine once again, back to my point, that's a rounding error. we go into these offsets because it's a great talking point -- i mentioned a second ago we are borrowing $72 billion a second i continue to be sort of shocked that the markets -- you look where the ten-year benchmark is right now, and you are seeing the bond market demonstrate the quality of the stressors >> okay. >> i don't think that $500 billion a year in tax evasion is a rounding error but, you know, again, i am not that great in math but i don't think that's a rounding error. >> well, it's actually a fraction of that if you owe the money, you should

pay it it's that simple >> right >> but once again, we are going to borrow close to $2.4 trillion this year, just this year, and that's more than double the worst projections we had a year ago. >> representatives, thank you. we have to pay some bills now. "squawk box" will be right back. - i love horses. (birds chirping) - [soldier] we should open the gate. - let's see what charlotte thinks. - [narrator] at crowdstrike, we monitor trillions of cyber events to detect threats and prevent breaches before they happen to keep your business from becoming history. we stop cyberattacks. we stop breaches. we stop a lot of bad things from happening. crowdstrike. protection that powers you.

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coming up, we will talk technicals and what investors can expect for the rest of the month. at the top of the hour, you don't want to miss this, iac chairman, barry diller, never wanting to hold back he will be here at 8:00 a.m. eastern time and a programming note, join us on thursday, the alpha delivering conference. it will help you balance risks and maximize returns scan the code right now, or go to alpha.com to register

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. welcome back the s&p 500, can you believe it, yeah -- viewers wouldn't believe it if we told them what we were talking about. >> let's not keep going we have a wonderful guest here -- >> if we want to keep working at cnbc, we have to keep written driving tests and both of us flunked it >> they don't even make me take it, because -- >> like i said -- >> no, because i'm a good driver two idiots >> it's idiot proof and we both -- >> let's talk technicals and what the charts are telling us steven setmeyer, and i feel a little better after looking at your notes, actually, steven

not to worry, seasonal corrections occur during this time nothing that you see right now tells you it's anything more than that. >> right >> which an upward trend could resume in the next good time, which begins in november >> if you follow season ality in the market, you typically have summeralty, and after that you typically get the fall correction the best period tends to be june through august, the worst tends to be august through october >> are we through the worst? >> good point. some of the tactical sentiment indicators, we have some important support levels we're at now, with around 4300 on the s&p. but if you look at something like the put/call ratio or the three-month knicks versus vix, they're coming down, but not climactic yet. so i actually think a low could happen, below this 4,300, maybe towards 42, with those

indicators triggering. meaning three-month vix versus nix, below one and the five-day put/call somewhere in the 1.12 to 1.25 range. which is where it occurred, march, december, october, and june of last year. i think we have a little more on the downside here. >> i know it's been a while, but we never re-tested october lows and never got a capitulation or any of the things that you just said, we never got at 3,600. so now you're talking about 4,200 as being the intermediate term low, and you just totally took those old lows that everybody was looking to retest. why didn't we have a capitulation at that time? not a quick one, but a "u" instead of a "v" >> first and foremost, a low in june of last and we retested that low in october. you get some capitulation.

right around that time frame >> the vix never got around 20 >> the vix is very strange it's not really working the way it used to that's why i use that ratio. and the other thing that's very interesting about last year is that when you look at aaii bears, they got above 60 in late september, around this time last year, which was the highest level that's seen since 2009 >> if you looked for it, it was there. >> it was there. and you know, we wrote about it at the time. and everyone kept saying, we didn't get capitulation. i'm like, you got it from these two indicators, not from the vix. >> you should have called me you got it you just didn't get it from the indicator most people are looking for it in, and that is normally what the market does. >> you don't see credit strain or any of the scary things that would indicate that this is more than just a correction >> at this point, no if you look at the option-adjusted spread on high yield, it's not expanding aggressively >> i don't, but thank you, you do that's why you're here >> the option-adjusted spread on

high yield, high yield corporate bonds. >> have you looked at it >> not this morning. >> and then corporate baa of ten-year spreads is another important one. that's below 2 when you get below 2.5, that's a problem. and it recently hit another cycle low, around 1.7 or so. >> how quickly do those metrics change when you're getting into a bad time we've been talking about how the economy looks great, until all of a sudden it doesn't how about those metrics? is that the same thing it looks great, but it can fall off a cliff? >> the beautiful thing is sometimes these indicators do have divergences if we were looking at late 2021, for instance, a lot of the indicators we're talking about now had their best levels, bull market levels in the summer. and right now, they still have their best levels here, so there's no real divergent at this point but if all of a sudden the one standard deviation event turned into a two-standard deviation event, you would think it would show up in these credit spreads. but, i mean, again, the market

has a cyclical uptrend, and if you keep it really simple, 40-week moving around around 4200, that's the cycular trend maybe we're getting towards the later stages of that but the big level is that 200-week moving average, around 3,900. it's not nounusual during these seasonality periods, and it's p happened on past pullback. i look at the 40-week, because i like to eliminate the daily noise. and that would argue that a perfectly normal thing to happen in a bearish seasonal period is to test some of those longer-term moving averages. >> he's got the technical analysis meme, apparently. you have two copies of that or just -- you were rich? >> yes, of course. >> when you walked in, i was like, who the hell are you i was looking for your father. but he's doing well --

>> oh, yeah, either that or he found the fountain of youth. the fountain of middle age he said he taught you everything ewe knew, but only 10% of what you know steven, appreciate it. >> thank you very much coming up, our exclusive interview with iac chairman barry diller we'll talk ai and all things ahead. a quick check on the futures 'sis morning it a little rainy outside and a little rainy in the marketplace right now. some red arrows. we're coming right back. with comcast business... it is. is it possible to help keep our online platform safe from cyberthreats? absolutely. can we provide health care virtually anywhere? we can help with that. is it possible to use predictive monitoring to address operations issues? we can help with that, too. with the advanced connectivity and intelligence of global secure networking from comcast business. it's not just possible. it's happening. i wouldn't have my business if it wasn't for my website.

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good morning the markets in the red right now. lots of fed speak going around and comments from jpmorgan's jamie dimon. we'll break it all down for you in just a moment meantime, uaw strikers will be getting a special visitor today. president biden heading to michigan we are live on the scene and did hollywood avert disaster after nearly five-month strike media mogul, the one and only ba barry diller at the table getting ready to sound off when he joins us in an exclusive interview in just moments. the final hour of "squawk box" begins right now

good morning and welcome to "squawk box" here on cnbc. live from the nasdaq market site in times square. i'm joe kernan along with becky quick and andrew ross sorkin and u.s. equity futures, they're down a little bit. it's very similar to what we've seen really for the last month or so. we had -- and we were just talking about it we saw some good action at the beginning of the summer in terms of a little bit of a bull run. and now we're in either a consolidation, a correction, a backing and filling, maybe due to what we're seeing in yield curve. i saw 4.5 on the ten-year earlier. remember, rewe stayed right arod 4 for a long time. the two-year had been under 5. now it's solidly above 5% at this point the question is, is the fed done

or has it got a couple of more hikes in the cards and it's all data-dependent on how strong this economy is >> timaros has a new story out, what liesman was talking about yesterday, if we go into a government shutdown, the fed will not have any of the data to try guide it when things are blind. add that to the list of things -- >> all of that great predicting ability they do have when they have the data, it will be gone >> let's get you caught up on some of today's other top stories. moody's raising the rating flag. a potential government shutdown could lead to a negative outlook and potentially a downgrade. moody's says it would be further evidence of how political polarization in d.c. is actually weakening fiscal policy making eddie q is set to testify at the department of justice anti-trust trial against alphabet today this comes after apple's ai head testified last week, where he said apple's browser does not

favor google search as much as the department of justice claims and the fcc is reportedly turning its attention to net neutrality, with plans to reinstate rules around broadband providers. according to the reports, the agency will announce the initiative today the rules barring broadband providers from unfairly interfering with internet traffic were overturned by the fcc under former president trump. >> meantime, the inqwriters and studios reaching a tentative deal to end that strike. five months it has gone on for. we have the perfect guest, joining us right now to comment on that and so much more, including those fcc rules and everything under the sun barry diller is at the table good morning, sir. >> good morning, all so we've been talking for five months about this strike you've been pretty outspoken who's the winner and who's the loser in all of this, as you -- >> strikes are always like a miscalculation between both sides. this one is almost like the crew of the "titanic" ten minutes

after the iceberg hits, decides to strike. meaning that this is not -- given the convulsions that are going on, the time to strike was not particularly now and the issues, go try and solve the existential issue of artificial intelligence and how it will be used. they spent like months, whatever, trying to craft words that would protect writers from ai they ended up in a tortured paragraph or two that actually does nothing for no one, because nothing really could be done so i -- >> i thought you were describing the uaw strike for a second, because there are so many similarities another industry facing all of these upheavals, and now they're striking -- >> because that's when the contract was up. >> but -- >> listen, the writers, they could have -- the economic

issues were very, very minimal they're not big issues they will not -- they will have some benefit, as these things, when you cover a new contract. there are upgrades in certain areas. there are some protections that they've gotten they've certainly got on some things fine, good they could have gotten it all in the first ten days >> but you don't think the economics are that much better for the writers than what they're used to. >> than what they had? >> than what they had. >> they're a little better they're not profoundly better. it's not like you're going to see -- the issues for -- the issue for writers is the issues for the industry you had this post-covid thing where -- and netflix thing, where you went from a hundred series to 500 series, 500 shows within a couple of years so everybody was working really perfectly well and lovely. >> don't talk about it -- it's not -- >> that would be a joke. now something that you would

definitely fight as well is that there is a re-look at executive compensation at the top of the firm in hollywood. >> what's this -- where's this relook >> i'm saying that that was -- >> you heard it over and over and over >> during the strike >> you mostly heard it from the head of s.a.g. the people that criticized the top ten people which i said, well, you know, the top ten actors make more than the top ten executives for sure by the way, that doesn't justify anything but making these relative value kind of bimbo statements also doesn't really do anybody any good what is the issue? about, you know, compensation? compensation for a long time in media has been outside the compensation limits in any other business i don't think it makes economic sense. but there it is. >> what about the transparency argument, that in digital, in streaming, you wouldn't get paid

for a series the same way you would have in syndication? and it took a lot to get netflix to the table to say, okay, we're going to pay for performance on that >> well, they're not -- yes, they did get some residual relief, which they should have gotten the thing is, netflix, in one of its endless genius moves said, there's no transparency. we do not -- entertainment business was founded on the idea that if you got audience in the seats, you got paid per seat >> you should get paid per performance. >> you got paid by how many people looked at your stuff. netflix came along and said, no, we're not going to tell you that we don't want you to know. >> barry, play out the chess board now in terms of what you think the media landscape looks like we were sitting here, i don't know, three years from now and i don't know what you think is going on in the regulatory environment, we'll talk about this amazon case, google, and the like, but what do you think happens? bob iger has already said that he plans to -- i don't know if

he's going to split the company up, but sell off abc >> i hope not. >> you hope not? >> listen, i understand that the studios, when netflix revolutionized, their business went digital streaming said, we've got to go into the streaming business, direct-to-consumer but to go in at the cost level they did was unrealistic so if you push this forward, the thing that has to happen is they do, they are cutting their costs, they will reduce their expenditures they will reduce their so to speak play in grabbing digital consumers, and the result will be, there will be smaller entities they'll be profitable. i'm not saying they'll go away or whatever, but what i do think they ought to do is they have this that reach, not but 66 million or whatever the malice

are that are still, say, 47 million sor so on cable profit networks reach everyone why not put some of your good shows, instead of putting them here, put them over there. you control that, but you don't control this you have a competitor that's already won the game called netflix. so invest in that. figure out how to make that cable bundle, which by the way, the reason the cable bundle was destroyed was not really because of netflix coming in on its own, it was destroyed because for ten years, the producers kept jacking up the costs of each of their programs beyond anything that was realistic the result is that when an alternative came along, people said, pull it. >> let's pivot, if we could to ai that was a piece of the strike -- >> you didn't like the last answer >> i loved the answer. look we're in the linear business i think it's fabulous if we can keep the bundle together

>> of course attempts should be made to take their old assets and look to revive them. they can be revived. >> horrible shows -- >> because they took, they said, okay, we're only going after streaming businesses that goose already got, netflix got it it's not that it won't at some point be a profitable business, but it's not a business by -- >> the streaming stuff -- stop streaming the -- stop funding the streaming stuff at the expense of the old stuff is that -- >> by the way, fund both don't simply say, we're putting all of our great stuff in order to get subscribers, because that's that goose. you have a network, again, a network that is profitable, that has declining viewership

and why does it have -- because you don't put any hit shows on >> what do you about the sports piece of it? you have the traditional legacy companies that need sports and toed by against apple, amazon, google how does that play itself out when there are going to be companies that can afford to pay more and maybe rationallrationay >>higher entertainment world until tech came along and they ain't buying it.

so you have players, netflix, amazon, and apple, in vastly more resources than they ever have >> and that's the end of it? >> yes so if you're bob iger with espn, what happens >> it doesn't mean there's not competition, that you can't compete. you can. but you have to find other ways to compete >> does this mean the same things for movie lately, every studio, they make movies to put on streaming and suddenly, i'm thinking, amc, i'm thinking i would like to go to, i was just in tellutellurid. i love the movies, i want to go see them and i don't think they all -- >> terribly most expedient thing happened is when warners and jason during covid, they had all of these movies and he said, i'm putting -- i'm not putting them out theatrically, i'm putting them on streaming. he taught the audience, you don't have to go to movie theaters anymore >> and they're still in that mind-set, because people are

going again? for the top -- >> to some degree. not a lot. not anything just to -- >> just mention one other thing. a personal anecdote. so let's say you're taylor swift. they wanted to do this concert and they go to the studio, all the studios are so in love with streaming and jonesing so much to get that working, that they said, we've got to do it on streaming, so they totally went around the studios and went straight to amc to do it, because of the obsession with stre streaming. >> yes, i think it's -- >> and netflix has already won >> let me ask about ai, you have been quite public about -- ai -- you were ready to sue? >> oh, no. >> you know, the gobbling up of every piece of noise about ai

infecting your toenails is not that it is not transformative, it certainly will be over time, but i'm just tired of hearing the -- kind of this hype noise as to litigation -- >> you were trying to put together a group of publicists to sue chatgpt and others. >> no, what we want to do is a very simple thing copyright. copyright law has something in it called -- am i boring you -- has something called "fair use. fair use means you can take an excerpt thing, something, and not pay for it fair use needs to be redefined because what they have done is sucked up everything and that violates, we believe, the base of the copyright law. all we want to do is establish that there is no such thing as fair use for ai, which gives us

standing once we have standing, then, depending upon how this works out over time, there is at least status right now, we have no status they got all of our stuff. >> how do you do it. >> most companies have now said that we have our largest publisher, we've said, you can't do this anymore. and they won't from now on >> do they have to pay for you for that >> if, in fact, if you violate the copyright law, like, you right something, you make something, and somebody takes it, with literally appropriates it, we believe that is simply wrong. that's in the copyright law. once you get that, then at least you have standing. that's all we want >> but do they have to pay you for that how you make the ai learn -- >> let me ask you a question >> i think they should, but -- >> if you have copyright on something, there's some kind of exchange right now, all these

conversations we're having, they say, yeah, we're happy to make arrangements what percent of zero would you like because there's no -- >> i was going to ask you, you've had conversations with sam altman, a friend of yours, he's also on the board of expedia. so -- >> we let him off. >> you let him off the board >> we let him off after he done us a number of great services. first of all -- >> in terms -- also helping you with ai. >> he helped us enormously, frankly. and you think of the next thing to pay attention to on ai is not search and chat and stuff like that it's when it goes from research to action. when it can autonomously get things done for you. think of travel. being able to say, i want to go to istanbul. it knows enough about you, enough about all of your preferences, that it can basically ask you one or two questions and then actually go

and execute the transaction. right now it's research. when it turns to action, everything changes >> where i was going to go with this, though, if you can't get a deal with dan, who can you get a deal with? >> andrew, we could make deals and several deals have been made they are meaningless there's no revenue until you establish the thing that sam and i disagree about and have talked about is he believes that fair use allows him to take all of publishers' stuff. we believe it doesn't. we think that could be adjudicated. once that's done, everything changes. >> can i ask you about big news that i think surprised all of us last week. rupert murdoch announcing that he's stepping down >> he's not stepping down. >> well, okay -- >> he's not stepping down -- >> announcing he's out of it you've known it forever. >> he has 100% of the vote until he dies, his children can

simply nod so, he has all of the votes. he's awake if rupert is awake, he's making decisions. full stop. and what do you think he's ultimately going to decide to do with the business? does he ultimately sell fox? what do you think happens here >> i don't think he -- i don't know i doubt he sells why would he sell? who's going to buy this anyway who would bother >> he wants to put them back together >> separating them makes no sense. it was done -- a lot of these separations like cbs and paramount and all of this or viacom or whatever, all of that stuff was just financial engineering. it made no logical sense i mean, newscorp. being together with fox, they're both essentially publishers, in a sense. that's what they both do one does it in print, the other does it on air so why separate them >> let me ask you a different question -- >> that was just a valuation

issue. and it, by the way, had nothing to do with the assets that everybody talked about it had to do with the fact they owned realtor.com and there was an issue on how you value it >> what do you think of the regulatory environment today and i ask, eddie q. will be testifying in this google case you've been after google for quite some time. >> i think google -- >> there's a whole bunch of folks who think the ftc has gone too far. >> they're stupid. they haven't gone too far. but, google, which is an absolute monopoly in search, now maybe this will change because a player comes in and tech comes in, and maybe pulls it away. but by the way, with all of microsoft's great good work and being in the lead with open ai, chat, they've gone from 3% to maybe 3.2% google has 90-plus percent of the search market. i believe anybody who's got that has market power, has to have

regulation they should be regulated >> you see what the ftc is doing. you just say that you think the ftc is stupid. >> i think the ftc is stupid on microsoft and activision a word i don't even want to say, but on microsoft and activision, i think that was dumb. and some of their other pieces of litigation are really quite stupid but i think that regulating google, obviously, regulating ai to protect it, obviously -- >> how do you feel about amazon? >> i don't know what it's about. i mean, i'm not -- i can't comment on it, because i don't know enough. >> you were leading drudge with hollywood is armageddon or something, do you remember that story? you had a very negative view on -- is it just old hollywood >> no, i don't have a negative view at all. >> what were you -- what was the point of -- >> of what >> i don't know, i'm excited about the future for movies and everything else. are you? >> i'm always excited -- listen,

as long as you got somebody in a room with an idea. and they can get access, which now they can they always could, by the way. good ideas do not lie somewhere under a table forever. they get exposed, they get out and if they're good, people come and see them that is true -- was true, and will always be true. >> good. >> so for sure -- >> what makes -- >> there's no downside -- >> -- pessimistic or what's going to change? >> so what happened is, as i said, hollywood dominated media for literally the last hundred years. that is over those companies who did dominate it, the old studios, so to speak, they're not like they're going away, nor should they. they have to go reform themselves, given the environment they're in the environment they're in is absolutely different than anything they've encountered

since they started that's all >> before we let you go, i wanted to ask you about politics you've been a very outspoken democrat for a very long time. and we just had these polls over the weekend that showed either biden being even with president trump or in certain cases, ten points below president trump what do you make of that >> i mack ck make it a very sad thing that here we are talking about -- i'm not against old guys -- but we're talking about two old guys and bottling up all the real talent that's around in both parties and i think that's just a very, very -- >> do you think that biden should not run >> no, i don't think he should run. i really think -- i think -- i thought, for whatever the hell my little voice is worth, which is zilch, i thought when he ran,

he should have said, i am a one-term candidate i'm here to heal the country and get rid of the toxicity from that horror. >> do you think there's another democrat that could beat trump if trump is the ultimate nominee on the other end >> look, an aardvark could beat trump in a open and decent race. i like chris christie because he's in the fight and i support him and i have in the fight. the idea that this man still stands is just shocking to me. i mean, it is so it's a reality and i guess i should pay attention to reality, but -- >> there it is barry diller, never one to hold back >> don't want either one running. >> pardon me >> you don't want either one

running, so that doesn't really help >> i would like -- i would like some new talent in the game. and there is some talent how could you not want that. >> this is great really appreciate it coming up, an update on the uaw strike against the big three. plus, breaking down fed speak and interest rate policy with jim grant, agrt s aninterest rate observer. "squawk box" coming right back are you still struggling with your bra? it's time for you to try knix. makers of the world's comfiest wireless bras. for revolutionary support without underwires, and sizes up to a g-cup, find your new favorite bra today at knix.com

welcome back to "squawk box," everybody. let's get you updated on this morning's market action. we've been in the red all morning long you can see right now, dow futures down by about 115 points s&p futures, 16 points below fair value nasdaq down by about 57. it's all been happening as we continue to watch treasury yields higher than they had been look, we're a little lower than they were this morning, but you can see the ten-year actually just below 4.5%. the two-year at 5.12%. but again, it's been higher yields in general over the last month and even over the last week it's really kind of put the dent into equities at this point. energy prices this morning after

touching $90 over the last week or so just below that is at 8129 for wti. when we return, uaw workers in politics. president biden heading to michigan today we'll check in with phil lebeau. he is on location. and a reminder, you can get the best of "squawk box" in our daily podcast. followed "squawk pod" on your favorite podcast app and listen anytime. we're coming rhtacig bk. i'm kareem abdul jabbar. i was diagnosed with afib. the first inkling that something was wrong was i started to notice that i couldn't do things without losing my breath. i couldn't make it through the airport, and every like 20 or 30 yards i had to sit down and get my breath. every physical exertion seemed to exhaust me. and finally, i went to the hospital where i was diagnosed with afib. when i first noticed symptoms, which kept coming and going, i should have gone to the doctor and told them what was happening. instead, i tried to let it pass.

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welcome back to "squawk box," everybody. president biden heading to michigan today to join the uaw workers on the picket line phil lebeau joins us right now with more. good morning again >> reporter: good morning, becky. it remains to be seen whether or not president biden actually goes on the picket line or if he's off to the side, meets with some of the uaw members. we don't even know exactly where the president will be here in wayne county we are just told that he'll be joining some of the uaw members who are picketing right now. here's what we're expecting. that's going to happen around noon, 12:30, somewhere in that time frame is when we'll see the president here, in what capacity, remains to be seen meanwhile, ford and the uaw are battling over an ev battery plant that is planned for here in michigan.

this is at the crux of their contract dispute and then you've got stellantis issuing a statement last night saying, look, we're all for increasing wages, but we need competitive costs. why is that important? remember, the big three already have higher costs than the foreign automakers who operate plants here in the united states, as well as tesla that's the estimated cost for tesla's line workers it's going to go up for the big three. the question remains, is it going to go up 15, 20, 25% how much higher will that go as you take a look at shares of stellantis, keep in mind that a big part of the negotiation there is the fate of the belvedere plant, which is just outside of rockville, illinois the company idled it in february saying, we don't know the final assembly capacity. uaw want it reopened whether or not that happens remains to be seen there also as you take a look at shares of gm and ford, keep in mind that you're looking at about, at about 15% of the big three u.s. production that has

been shut down the remainder of the production, 85%, continues so i checked with j.d. power what are we seeing with inventory levels largely unchanged since the strike started so while this strike is having an impact, especially for the people who were on strike here, as well as others who lived near those plants where there are strikes, guys, we are not seeing an impact in terms of the availability of models at dealerships. >> okay, phil. yeah, and the situation with ford last week, on friday, the uaw is saying ford is in a different position has that all changed over the course of the weekend? >> no, i don't know if it's changed, becky i think that this is a key issue. this battery plant that is planned for marshall, michigan. it's a wholly owned subsidiary, or will be, of ford. and the uaw clearly wants to see that the membership can transition to jobs there

and if they're uaw jobs, they'll be higher than if you have an ev waiter plant that is a joint venture. and ford has some of those that they've set up with korean battery companies. that's at the heart of this. and from ford's perspective, they need the cost as low as possible it's not just ford, it's gm and stellantis as well and they're already losing money on evs now the question becomes, as they are working on building these ev battery plants, where's the cost going to come in? and clearly the uaw would like to see those jobs be union jobs. and that's at the heart of this. >> okay. phil, thank you. we'll check in later >> you bet all right, coming up, lots of interest in the markets right now. i spoke to chicago fed president austan goolsbee yesterday. minneapolis fed president neel kashkari is making comments. and jpmorgan, the ceo there also chiming in from india. we'll break down the strategy with longtime fed watcher kim grant next

and "squawk box" is streaming live every weekday morning exclusively on peacock as part of the morning news live collection join us every morning on the headlines, no matter whether you're at home or tonhe go, head to peacock.com/morningnews for more information on how you can start streaming. we'll be right back.

welcome back to "squawk box" on cnbc. the futures are now back down close to the lows, down almost 150 on the dow, nasdaq, and s&p pitching in, trading lower as well in the pre-market jpmorgan ceo jamie dimon speaking to cnbc in india overnight. here's what he said about whether the fed will raise rates ag again. >> i think it's more likely than not. but i think people should be prepared for higher oil and gas prices, higher rates, as a matter of just being prepared. you and i can guess what it will be, but i don't know, you don't know, no one knows i think the odds are higher than that but the geopolitical situation is the thing that most concerns me and we don't know the effect

of that in the economy >> meantime, u.s. president fed president neel kashkari giving more clues about the fed's next policy move. he was speaking at the wharton's school of business and says if the economy is fundamentally much stronger than we realize, on the margin, that would the eme that rates probably have to go a little bit higher and then be held higher for longer to cool things off. we'll talk to him directly tomorrow when he joins us at 8:00 a.m. eastern time >> chicago fed president austan goolsbee told us right here on "squawk box" yesterday that the discussion around race is quickly evolving >> i've been trying to emphasize that pretty soon in here, the question is going to stop being, well, how much more are they going to raise and it's going to transform into, how long do we need to hold rates to feel convinced we're back on this path to 2%? and that's healthy >> goolsbee is a voting member on the fmoc. he also said that soft landing

is still achievable, but he warned of risks that could threaten the fed's path. for more, we want to bring in grant's interest rate observer, founder and editor, jim grant. i say we put you in the camp of jamie dimon, neel kashkari, but maybe with more concern about how long rates are going to have to be high >> yes i noticed that president goolsbee, who just now quoted, said something to the effect that rates are restrictive but his own financial conditions index shows oddly enough that financial conditions as defined are looser than average, even after this kind of 0 to 60 and 3 -- like six seconds of a set of rate increases. so notwithstanding all of that, this is tighter, but according to the chicago fed, not yet tight. >> you are of the fb that we are

in a long-term bear market for bonds, and i guess that means not just rates where they are for longer, but even potentially quite a bit higher from where they are right now >> that has been the form for a century half interest rates are unusual if not unique in the financial me notwithstandingry, because they tend to trend in generational phases i say we just ended in 2021, 40 years, it took 4-0 years of persistently declining rates, which ended in something i think the financial stories will puzzle in, which is negative nominal rates, less to nothing, to the tune of 15 or $16 trillion it so seems to me every big move in financial markets, whether

it's stocks or bonds tends to climax in some absurdity. some valuation excess, like the stock popped in 1999, or negative nominal yields in 2020 and '21. we had 20 years, and before that we had 35 years up, which famously ended in 1981 this is pattern recognition to give it its most dignified term. but this has been the form for many, many years in bonds. >> that happens not because a fed chair or fmoc group decides to change their minds about things, normally, you would think if the economy suffers, they would lower interest rates. if the economy is doing great and inflation is taking off, they would rate interest rates what changes to make that -- >> they don't always control

events the british prime minister, harold mcmillan, was once asked, what might go wrong and he says, but my boy, events events so we have been used, i think to imputing to the fed immense power as a foresight and a control, but oftentimes, the fed, like so many of us finds itself not in the vanguard of actually our taught, but rather, running behind to catch up and the fed can will all it likes to return to the 2% world. it seems to find for itself. but if passed, is prologue the fed will be evolving a new set of narratives to explain the new world. and i expect that to be coming in jackson hole any summer now >> we keep hoping and wishing for -- we keep hoping and wishing for the fed to be able to see into the future

and that's asking too much of anyone i would give it 50 years of try trying you know what yogi said, predictions are hard, especially about the future >> we can at least observe the present and put, and size up the odds that the market is laying on certain outcomes. >> but if you look at -- that's why people get nervous if you look at how long they stayed sat zero, unable to see even six months into the future for what was coming, why should it be any different now? they wouldn't know if they stayed too long or didn't stay long enough right now, jim >> correct they are a bunch of well-intended human beings many did very well on the s.a.t. test but a lot of them would rather have been at nasa doing physical science rather than the science of this, of macroeconomic forecasting. but as recently as the early

months ofe 2022, they were still doing qe we ask too much of them or indeed any of set of human beings >> would any rule-based system work better in your view >> oh, yes >> a grant rule? >> the rule would be that rates should be discovered in the market rather than imposed or suppressed and we have decided over the course of many years to conduct our monetary affairs by a ph.d standard of improvisation. the dollar is uncollateralized so to some extent, we're playing tennis without a net and without base lines and without sidelines. so circumspection in public finance is out the window. >> you cannot be series. >> the federal reserve itself is

showing sizable net equity it would be in the language of the private sector >> we have to run. >> before we do, very quickly, if you're right, any business, any hedge fund, any property owners, any -- like anybody whose hoping that rates will come down early next year or some time right after that and they will be saved what happens >> i think the odds are against it but within this long cycle, i foresee any types of twists and turns. in the '70s, inflation didn't go straight up. there was three phases, so if past is prologue, what we'll see a time of long-trending higher rates with head fakes that will get people convinced that 2% is right around the corner.

as recently at 1984, the long bond was trading at 14%. this is, you know, and people didn't believe it, because they had been conditioned by 35 years of rising rates. so muscle memory is a very big part of what our financial markets operate. condition experience >> jim grant, thanks for coming in >> you're welcome. coming up, when we return, we're going to look at some of the factors putting some pressure on the markets going into the fourth quarter. as we head into a break, take a look at shares of draft kings jpmorgan, upgrading the sports betting company to overweight and upping its price target to $37 per share. jpm says they think draft kings has a strong product, scale, and a brand to allow it to compete against new interests in the online kgambling space ghreoom to run, if they' rit. powering sustainable growth in a changing world. powering financial solutions that transform industries.

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welcome back to "squawk box," today's consumer stat, 444,000. that's the number of holiday hires that have been announced so far for 2023. challenger expects seasonal retail hires this year to sink to the lowest level since 2008 meantime cnbc has learned that

jeff bezos' blue origin plans to replace bob smith with outgoing david lynch. he'll remain with the company until january 2nd. limp previously served as the amazon device and services chief overseeing alexa, echo and ring units, maybe the most important part, their internet satellite business and autonomous car unit returning the space tourism rocket to flight and delivering on a recently-won nasa contract for crude lunar lander a lot going on we interviewed david limp on the program, had him on about a year ago. some were surprised he left the company after such a long tenure he was considered one of the most liked, perhaps even beloved executives at the company. he's now taking this next step to join him.

>> tough name to grow up with i guess. next, we'll get you ready for the enoping bell on wall street "squawk box" is coming right back tts of power, rails and open road, and essential services of every kind. all running on countless invisible networks, making it a prime target for cyberattacks. but the same ai-powered security that protects all of google also defends the systems running america's infrastructure. for these services. for the 336 million of us living here. ♪

as we count down to the opening bell on wall street, futures continue to trade in the red premarket. these are some of the worst levels -- is that a 6? down 165 let's talk more about the markets now with sam stovall, chief investment strat jeeft at cfre research. it's father-son day, sam we had set meyer on, rich's son, and now we've got you on everybody remembers your dad, the great bob stovall. i don't know i don't know whether anyone planned it maybe it's serendipitous that it happened welcome. >> well, good. thanks, joe. nice to see you, too >> i said his dad taught him everything he knew, but only a little bit of what he knew i think your dad taught you everything he knew, right? >> i'm still trying to catch up to his vast amount of knowledge. >> give us some of it.

we heard technically that this looks like a normal seasonal correction and not much more with maybe a low of a around 4,200 on the s&p i don't care if you wanted to do bottoms up and talk about what stocks you like or sectors you like instead of an overall macro view, but where are we >> i agree with you. i actually believe that while fundamentals will tell you what, technicals tell you when and how far. the old adage is that prices lead fundamentals. yes, there's an awful lot of concern out there from higher oil prices, interest rates, the dollar, et cetera. that's putting pressure on the markets which will probably last until the early part of october. if you look at technicaltion, by coming down to the 4,200 level, it then becomes the support of the march 23 low and also is

close to the 200-day moving average. even people are talking about violation of a head and shoulders pattern which will also bring it down to maybe about the 4,100 level. i remind invest ors. not surprisingly october has had 35% more volatility than the other 11 months of the year. i think because we're heading into the favorable fourth quarter, especially of a pre election year, you're probably better off rotating than you are retreating. >> do you think, sam that we see new highs next year in the averages >> we're in less than the first year of a bull market, and we have not had a bull market die before its first birthday, and you have to go back to 1948 to

find one that did not eclipse its second birthday. i would feel fairly optimistic, not a guarantee, that this bull market will continue into 2024, and i think the factors that will come into play are that we don't believe we're headed for a recession. we do think that earnings around the ascent likely to be gaining 8.5% in the fourth quarter of this year, 12% next year, and i think that a lot of the headline concerns that we're experiencing right now will be dissipating. let's face it, with all these concerns, why is the market only down 5.5%? >> we don't need a recession to win the inflation battle we won't need to keep going higher and higher and higher with the fed >> i think that the fed will be raising rates one more time, probably in november i think what's being built into the markets right now is the fed

may need to raise rates two more times. who really knows for sure. i actually think the government shutdown might be good for the markets because we won't have a lot of data to fred over on a daily basis, that by the time the government does reopen, cfras washington analysis group thinks this could rival the 35-day shutdown we saw back in 2018-2019, but that kind of a shutdown could actually allow the data to show that the economy is slowing by the time we get the fresh data once again. >> yep there is a lag we talk about that quite a bit sam, thank you going to leave it there. we're pushing up against "squawk on the street" coming up in just a couple minutes thanks, sam. >> thank you, joe. in fact, let's take a look you can see the futures are at the worst level since we started the show dow futures off by 175, s&p off by 25, the nasdaq off by 83.

if you're looking at what's been happening in the treasury market, that's been the agitator recently this morning we see slightly lower yields ten-year below 4.5%, two-year at 5.11 oil prices at $89.30 that does it for us today. right now it's time for "squawk on the street. ♪ good tuesday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber at the new york stock exchange. futures look to unwind monday's late day bounce. ten-year hit 4.56 overnight but has backed off our roadmap begins with the september slump for stocks s&p on track for the worst month since deese. >> moody's warning a government