it's wednesday, september 27th, 2023, and "squawk box" begins right now. ♪ good morning, everybody. welcome to "squawk box" right 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. okay. the good news is we got through yesterday. it was a bit of a route in the markets yesterday. if you want to look at the u.s. equity futures this morning, you're going to see right now some green arrows, as joe mentioned. dow futures up about 57 points. it comes after a down day for the markets. the dow was down by about 388 points. that was its worst day since march but on a percentage basis it was the best performer or the

three major indices. the dow industrial down by about 1.1%, the s&p and the nasdaq down by about 1 1/2%. if you want to look at things month to date, we are on track for the worst month of the year, if you're looking at the s&p, if you're looking at the nasdaq. if you're looking at the dow tr transports. the dow industrial is off by 3.1%. s&p down by close to 5.2%, and the nasdaq is down by about 7%. the russell 2000 has fared much worse, down 7 1/4%. dow transports are down by 5 1/4%. >> you got admit the irony of 90% of the people we talked to finally threw in the towel visiting the october lows, right when this was ready to head back down. >> never mind. >> but they did. >> it's counter intuitive. >> it's uncanny. >> if you could figure out -- >> opposite day always. always opposite day.

>> you could do well. >> you give jason trainer props for sticking with it. >> yes. >> saying he thought things were going to come down. >> because i was so obnoxious to him during the whole rally when he went nuts. >> yes, you were. >> treasury yields, this is a big part of the reason why treasury yields yesterday, the ten-year hit its highest yield since 2007. once again, if you take a look this morning, it's sitting just below 4 1/2% at 4.49. the 30-year was at its highest level since 2011, and this morning it's sitting at 4.63, and the two-year at 5.05. lots of other things that were happening. the dollar is at its highest level since november of last year, and we'll continue to watch how this all plays out. obviously a little bit of nerves, people on edge when we look at the markets. >> let's go to washington right

now because we are just days away now until the october 1st deadline. still no deal in sight to avert a government shutdown, at least in the house of representatives. there's a little bit of movement in the senate. i want to get over to emily wilkins who joins us with the latest. where are we? >> things aren't looking great, but there is progress, the senate came out with the bipartisan plan to prevent a shutdown, but it's not a guarantee that the shutdown is averted or the government is going to remain funded into the weekend. the senate plan would give lawmakers until november 17th for the stopgap funding so they could figure out a way to fund the government in the long term. it would continue current government funding and include $4.5 billion in aid for ukraine. last night we got a procedural vote on the bill, a bit of a test to see what the support is, and solid bipartisan backing. most house republicans said last night they just can't accept a bill that doesn't address the

border. house speaker kevin mccarthy also told us last night that putting funding for ukraine in a stopgap bill was wrong. listen to what he had to say. >> they're picking ukraine over americans. look, i know there's problems out there. what russia has done is wrong. we can defend that. but we also watch what's happening right here in america right now. why can't we deal with the border and our emergencies too. >> house republicans are planning to try once again this week to move their stopgap plan, but it's not clear that they'll be successful. i spoke with several members yesterday who said that there's no circumstances in which they're going to vote to support a continuation of funding. it doesn't matter how many conservative wins are going to be included in the bill. so, guys, as things stand, there doesn't seem to be a very clear path to keep the government funded past midnight on october 1st. >> emily, mccarthy was able to

get a cupouple of things passed late yesterday. are you going to mention those? weren't there are four procedural votes? >> sure. yeah, he did get that procedural win. the one they failed twice last week. >> you didn't mention that. >> we have that, but that doesn't stop the shutdown. >> we aren't going anywhere. >> look, there is some more bipartisan agreement but at this point, how do you actually take that and translate that into something that can help fund the government before this sunday? i mean, what the house is focused on right now is the long-term bills, and their bet is if they focus on the long-term, they can get holdout members to buy in for the short term that they need to prevent the shutdown. the members i talked to yesterday said we need to fund the government. we can't to short term. it doesn't seem like the house is on track to pass any short-term stopgap. >> couldn't even get those

through, and he finally did get those through, the only holdout was mtg. that's a small win, and it's going nowhere because it would die quickly in the senate. >> that's fair, joe. we will give him that. he did get his entire conference together, moved forward on the process. but as you said, you know, it's better than where we were last week. >> it's a shutdown coming. it really looks like it. i was amazed how many shutdowns we have had since 1981. 14 since 1981. no wonder. >> the longest one being more than a month long, costing the economy 11 billion, so real stakes on the table even if we don't necessarily see it in the stock market. a lot of concern here in d.c. >> they're starting to wonder, they're starting to think. >> yeah, it shows that you can't get, you know, this is -- you can't get things done in washington. >> emily, thank you, we're going

to continue to talk about all of this as you might imagine. we'll talk to congressman kelly armstrong, closely involved in the negotiations with leadership to fund the government, and we'll discuss it in just a little bit. meantime, the ftc in 17 states suing amazon alleging that the online retailer illegally protects its monopoly by favoring its own services. the lawsuit says that keeps prices artificially higher, locks sellers into the platform and harms its rivals. we're going to dill into the suit with the person who braougt it. l lina khan is going to join. we'll go through the entire case with her. when we come back, president biden hittingthe picket lines with striking auto workers. we have that story next. plus, a look inside the new contract for hollywood screen writers and the las vegas union that just voted to authorize a strike. and later, don't miss our interview with minneapolis fed president neel kashkari.

he will be joining us on set at u' wchg quk stern time. yoreatin"sawbox" on cnbc. [ weather report announcer ] all flights have been grounded. ♪ i had to escape, the city was sticky and cruel ♪ ♪ maybe i should have called you first but i was ♪ ♪ trying to get to you ♪ ♪ i was dreaming while i drove the long straight road ahead ♪

♪ i drove all night to get to you ♪ the distance is nothing when home means everything. what do you see on the horizon? uncertainty? or opportunity. whatever you see, at pgim we can help you rise to the challenges of today, when active investing and disciplined risk management are needed most. drawing on deep expertise across the world's public and private markets in pursuit of long-term returns... pgim. our investments shape tomorrow today.

welcome back to "squawk box" this morning. after 128 days on strike, hollywood writers can return to work this morning.

union leaders voting unanimously to end the strike after the contract language was finalized. the deal will last until may of, ready for this, only 2026. this could happen all over again. it includes a 5% minimum pay increase now. another 4% bump in may of 2024, and a 3.5% raise in may of 2025. studios won't be allowed to use ai to write or rewrite literary material. and ai-generated content can't be considered source material. writers will get residuals based on streaming viewership. that was a big key in those negotiations, and streamers are going to have to provide the writers guild the total number of hours streamed for self-produced high budget programs like netflix's series "the agreement." like netflix, the agreement also approved writers minimums, also renewed show runner programs,

and wga members will have until october 9th to cast votes on that contract. it's expected to pass in time. the next part of the whole thing is the screen actors guild, and they still have to go here. they're telling cnbc that they have no confirmed date for their next negotiations with studios, so even though this is done, the question is how long that takes, and how much of the language that was just negotiated by the writers either gets improved upon or becomes the boilerplate for the actors. >> i think it would get easier from here. sag sent out a note to all members, don't believe it anywhere if you hear there's something going on because we don't have these confirmed dates. >> the big three is showing us, the uaw showing us how it's done, and the writers and actors have been watching, minimum, baseline, 40% increase, less work. that's my new mantra. 40% more, less work. >> i think you got that deal.

>> i know. we said that yesterday. 32-hour week, no way. >> in fairness, the uaw is coming back. they are actually making less money than they were ten years ago. >> everybody is than they were two years ago. >> when you look at inflation. uaw gave up a lot. >> the auto workers did make a lot of concessions, and then, i mean, really yesterday it was, i mean, it was really sort of a workers unite, ceos of the greedy corporations. this is all the stuff that president biden actually was saying. all of those comments. once again, bad optics that the ceos have made so much money, but the question, if you just look at the future and look at the reality of where we are, you know, 20 or $30 million. what barry said yesterday, the actors are bitching about the ceos when the highest paid

actor, ten of them make more than the ceos they're talking about. the ceo, 20 or 30 million is not going to sink the company. >> but it's not helpful. >> i know it's not helpful but it's not the issue. the issue is whether these negotiations eventually put the company in a position where it can't compete two or three years from now and we go back in again and pick up the legacy costs that were negotiated. >> the government should be on the hook to have to be the ones to bail them out. >> the government is helping them get the deal, and then taxp taxpayers are the ones that have to bail them out. >> the ceos made big mistakes. >> speaking of, why don't we show people this from yesterday. president biden visiting the you recollect aw picket line in michigan. this was the first time this has ever happened, a president going to the picket line, urging the union to stick with it.

>> you deserve the significant raise you need and other benefits. >> let's get it. >> get back what we lost, okay. >> step up for us. >> joining us with more on the strike, tim higgins, "wall street journal" reporter and cnbc contributor. unprecedented to see a sitting president who actually joins the picket line like this. what does this mean in terms of whether or not this is going to get negotiated sooner or later? >> this probably puts a lot more pressure in detroit but not sure if it actually gets a deal any quicker. it makes it harder in some ways for the auto makers to give a deal that the workers are going to be excited about. there's a lot of pressure here for that 40% wage increase, that the uaw has been pushing for, and lots of other things. the companies say they can't afford that. even elon musk weighing in yesterday on x saying that this was a recipe for trouble down the road. but right now, the work force is

whipped into a fever about achieving these kinds of gains. >> that's what we have heard from a lot of different places, including harry wilson who was at the negotiating table in 2007 trying to put things together. you can expect big raises, he thinks 20% isn't enough, that the auto makers should be giving 30%. you get into the structural changes, shortened workweek, returning health care for retirees and some of the programs that had billions of dollars in losses saddled for the auto makers last time around, that's the type of thing that really spells doom for some of these companies down the road. so where is the union on that front? where is the negotiation on that front? can they do this with a pay raise, without structural changes that make it too difficult for these companies to compete in the future? >> shawn fain, the president of the uaw argues that these companies can afford what he's asking for. and that's kind of the challenge

that all uaw presidents have over the generations of negotiating these contracts. they always face pushback saying they can't afford what they're asking for, and there's a balance striking between what's good for the members in the union and what companies probably can be pushed to afford ultimately, but there's something else going on here that is, you know, looming not only for the auto workers, but you saw in hollywood for the screen writers is that whether you're in the paragraph factory or the car factory, there's real concern about where these jobs are going to be in the future as technology changes these businesses to the very core. and that's what the uaw is worried about. those members are worried about, as they transition into this ev future, will there be jobs there for them, and that's something that donald trump is really kind of putting his finger on and really getting his fingers into the vein of concern that the

rank and file have about what's going on in the grander scheme of detroit. >> the rank and file also realized that while president biden is there, it's his policies that are pushing them more towards ev? >> exactly right. you know, president biden invoking kind of the work that was done in the great recession to save the auto industry has made him at times a hero among detroit, but he's also in more recent years pushing that ev transition, pushing these companies to make that transition at a time that not everybody is convinced that people actually want to buy electric cars. there's a lot of skepticism and places around the country that ev is not the future and that puts the workers in concern. they're concerned about their place in that world. >> any chance that president biden looks at that and says, okay, we need to roll back some of the federal regulations we're pushing on this front, or is that off the table because it would raise the

environmentalist. >> it's a tricky position to be in. part of his party in parts of the country, california or perhaps more liberal places really see this transition as being a key thing in their world whereas some places, there's a lot of skepticism in what donald trump, you know, perhaps, you know, the likely front runner for the republican party, 2024 is really doing speaking to that concern, you know, of the little guy, worried about where they're going to be as kind of the companies make this transition. evs need perhaps 40% less labor, and that is a concern not only for detroit but in stuttgart, places that are making cars in europe, concerns as we look to china, as they expand their ambitions with ev's globally. it's a global concern. >> tim, very quickly. you look at a situation like

this, and the strike fund is a very rich strike fund, but they're doing this in targeted ways so they can stretch it out, and not deplete as quickly. not like they dwget a whole lot from the strike fund, not anywhere near what they would be making if they were working. how long before you really see some strain, and some pushback from the workers saying, hey, we can't keep doing this? . >> the benefit of this targeted strike gives them a great deal of more length to do this. you remember the last time, 2019, gm went for something like 40 days before they got a deal. this conceivably kcould go for much longer as they hold back that powder, so to speak. >> all right. tim, thank you very much. tim higgins. >> thank you. coming up in the 7:00 hour,

elon musk tweeting, xing that the auto workers' demands we just referenced could drive the big three auto makers bankrupt. i figure he might like that. no, we're going to talk to musk biographer, walter isaacson, but first, target is closing nine stores in major cities, krcitin retail theft and organized crime. details after the break.

♪ [man struggles] i need some sleep. ♪ [man relieved] if you struggle with cpap, you should check out inspire. inspire. sleep apnea innovation. learn more and view important safety information at inspiresleep.com

rich, velvety... coffee. cafe-quality... espresso. one high-pressure system... that can do both. brew to your heart's desire. ...with the l'or barista system. now brewing peet's coffee.

♪ is it possible to fall in love with your home... ...before you even step inside? ♪ discover the magnolia home james hardie collection. available now in siding colors, styles and textures. curated by joanna gaines. welcome back, everybody. target says that it will close nine stores in major cities across the country citing violence, theft and organized retail crime. it's going to be closing one store in new york city's harlem

neighborhood, two locations in seattle, three stores in san francisco and the oakland area and three more in portland, oregon. what does this all have in co common? yeah, the places where they have seen organized crime and places where you don't get prosecuted to the full extent of the law. d.a.s look the other way. theft and organized retail crime are threatening the safety of our team and guests and contributing to unsustainable business performance. the company went on to say before they made the decision, they invested heavily in strategies to prevent and stop theft, things like adding more security team members, using third party guard services. implementing theft deterrent tools across the business. the ceo said in may, they believe that theft and shrinkage, is what they call it, theft and shrinkage would be $500 million worse this year than last year. half a billion dollars lost to theft and other issues like this. shares of target are down more than 25% year to date.

>> organized crime doesn't -- it just has a connotation of, you know, you see like the guys over in brooklyn hanging out. >> tony soprano. >> that's not what we're talking about, motorcycle accident, the cops, there's so many that the cops are overwhelmed. >> they know exactly what to walk in and get. >> organized in that there's a lot of people. not organized, there's not any capos there. itst -- it's not that. >> they know exactly what they can get the most money for. what target says they're doing is hosting store walks with members of congress, state legislature, city officials, district attorneys, law enforcement and local community partners to try and educate them on what they're doing to combat organized retail crime. the nrf, national retail federation says this is a huge issue for stores around the country, and they have been pushing for a long time to change rules, get pushback, change laws and make the laws

enforceable to prosecute people who are doing these things. >> doesn't look organized. looks like mayhem and a mob. costco shares are under pressure. revenue increased by more than 8% year over year. the company said retail theft in this case is not a major issue at its stores, and any incidents of shoplifting are largely confined to self-checkout, that i get scared of sometimes. i have it in the cart, and sometimes, you know, i do the bottom of the cart and i put it back in. and i'm afraid that i'm going to forget something sometimes. >> i'm just not always sure, you got to be careful and make sure it goes through. >> you got to be sure. >> if i get ten yogurts, i do the same one ten times, and it looks like i'm -- >> i've walked back into a grocery store to say i accidentally walked out without paying for this. >> it scares me. >> i know people must be doing

it. have you ever seen where the thing says that says get help, that item didn't -- and then they come over, and you see the video of you doing it, so there are videos. these are all tips you can use. if you venture forth. >> i don't. how much does a gallon of milk cost? >> $6.89. >> we talked about this. i do less instacart than i used to do. >> have you ever done self-checkout? >> yes, all the time. >> i like doing it because i'm good at it. >> do you? >> yeah, i'm good at it, really good at it. >> you know what else? i have a kings app where i get coupons, i never used coupons my whole life and i never understood why people carry all of those. and now i just dig it. do you do that? >> no. >> do you get coupons?

coming up new survey data on where the market participants are putting their money to work. we'll talk about it next. "squawk box" come right back after all of this, some green arrows this morning on the green. screen. in the u.s. we see millions of cyber threats each year. that rate is increasing as more and more businesses move to the cloud. - so, the question is... - cyber attack! as cyber criminals expand their toolkit,

we must expand as well. we need to rethink... next level moments, need the next level network. [speaker continues in the background] the network with 24/7 built-in security. chip? at&t business. at ameriprise financial, our advice is personalized, based on your goals, whatever they may be. all that planning has paid off. looks like you can make this work. we can make this work. and the feeling of confidence that comes from our advice? i can make this work. that seems to be universal. i can make this work. i can make this work. no wonder more than 9 out of 10 clients are likely to recommend us. because advice worth listening to is advice worth talking about. ameriprise financial.

welcome back to "squawk box." take a look at futures, we have some green, 77 points higher on the dow. nasdaq up about 58 points. the s&p 500 looking to open 15 points higher. meantime, a town thnamed tomorr, cnbc's delivering alpha is going

to be tomorrow, but alpha quarterly stock report surveyed 300 top market participants over the past week ahead of the big event and 27% said the best returns for the remainder of 2023 would be short-term treasuries, and 23% said the s&p 500. joining us putting his money to work right now is john mora, cio and senior portfolio manager at nfj investment group. in from texas. good morning, sir. >> good morning. thank you. have you been bearish or bullish? we have been having this debate this morning. >> we got bullish in the second and third quarter of last year. three negative quarters, first quarter, was negative, second, third quarter was negative. energy was up 40, and during the second and third quarter we got optimistic because valuations were depressed, particularly in technology and industrials. what's interesting today is we have been shedding a lot of that exposure, reducing technology,

reducing industrials. we have been adding to reits, adding to banks, adding recently to utilities. all of these areas are tied to interest rates. >> is that a defensive play for you? >> it's interesting. i would say that it's more valuation call. but it's definitely looking more defensive because we're moving away from some of the more stretched areas in tech and industrials and home builders that have benefitted tremendously. >> if you like real estate investment trust, if you like the reits and it's an interesting rate call, you think it's coming down from here? >> the curve iss inverted and people are worried about what happened in 2007 th. the big difference is you had valuations high for banks and reits, coming off the depressed rates for the tech bubble. now you're in a situation where you have significant dislocations in those valuations with the inverted yield curve which is much more similar to 2000. >> let's talk about what this really means in reality. if you've got a real estate investment trust and you have a lot of buildings that have to be

refinanced, you're hoping that rates come down so you don't lose your shirt. you think that's what happens? because now there's all of these people saying higher for longer. if that's the case, there's not going to be redemption at those levels. you know, you're not going to get relsolution if you can't refinance. >> the curve is not going to stay inverted at this magnitude in perpetuity. we already, in terms of duration are getting there to one of the longest we've seen. we're not going to keep it that inverted. that will begin to unwind. that will benefit banks and real estate. particularly to your question, there are plenty that are in trouble. some of the smaller ones that have office exposure, people have relocated. that is a trend that has been an issue for many of these. i would say if you look at some of the more specific names, whether it's industrial reits or alexander realty, which is an office reit, but caters to the pharmaceutical companies and the biotech companies, they can't relocate easily, and they have high collection rates and don't have near term maturities.

you have to do your homework. it's not all. i'm an active portfolio manager. we're looking for specific places to target. what i think is that the areas washed out because of negative sentiment around reits, and the reality is you want to be stepping into real estate when capital is turned off. that's the irony because i find it ironic, real estate fwas expensive when rates were at 0. you can't have it both ways, and the other thing i would say which i find interesting is everyone says, okay, technology is great now. nasdaq is up 35%. didn't they sell the nasdaq because rates were high. they have forgotten the long duration equity stories and now they're not focusing on banks and real estate. >> go back to the tech piece. you said you actually had bought tech and started shedding over the summer? >> correct. we got very overweight. until the second quarter, you had the mortgage rates hit 7%. home builders were trarkd. trashed. we added to those.

it was chips for chips. h everybody wanted defense. nobody wanted cyclicals. now we have been decreasing that because many of those names had the a lot of multiple expansion. >> is there anything in tech land you like? >> there are areas we like. i would say application software names look relatively interesting to us, but in aggregate, we are under weight technology, we're now under weight semis, hardware names. i see less interesting opportunities relative to the landscape we're seeing. >> what about energy, you based in dallas? >> yeah, i'm based in dallas. >> what's with the cowboys? >> they're doing okay. >> what about the last game. >> we're just getting started. >> what about energy? >> here's what i will say. texas, we have a reputation, don't we. so in the first quarter, energy

was up 40% of last year. energy got very expensive. okay. you can't value energy on price to earnings in just those traditional pe metrics. people say energy is cheap, that doesn't make a lot of sense because when oil was at 0 and the p was high and the yields were low. that was the best time to buy those. they did better than the tech names. to answer your question. we have been reducing energy exposure, we have been reducing refiners, we don't think those are particularly attractive. they are trading substantial premiums on price to book, which is our preferred metric when we look at the larger integrated. >> 0 was a buy. remember? >> what's that? >> we know oil at 0 was an unbelievable buy. >> that's the irony with real estate right now, reit capital is turned off. the other area i would put it to briefly is i think emerging markets are big time on sale. you have the biggest dislocation in the emerging markets? >> where?

>> china is the most interesting area. >> really? >> everyone loves to hate on china. >> contrarian on china? >> kyle bass down there? >> i've seen him. i haven't gone to lunch with kyle bass. >> it's unpatriotic to invest in china. >> if you under weight china, china, hong kong, are 15% of the emerging market opportunities. >> you're not worried they're going to tell you you can't invest in china. >> i feel like there's a lot of fear and narrative. did you know china is outperforming the s&p off the halloween low by 1,200 basis points, did you know that the emerging market index is outperforming the s&p by 250 basis points since halloween. no one talks about this. it's a negative narrative. if you stepped in and bought -- >> it's cheap for a reason. >> i'll share this, if you stepped in in october of '01,

very unpopular time to buy the emerging markets, you are beating the s&p 500 by nearly 75 basis points per year since october of '01. and you are back to the exact same valuation multiples. you have very similar things going on with a strong dollar. >> john, we got to run. we're out of time. thank you for coming in. >> yes. we have news out from china. a regulator says apple hasn't complied with the app store rules. we'll take you live to beijing next, and a programming note for you, tomorrow, cnbc's annual delivering alpha conference, we will convene investors and leaders to provide insight, and analysis to help you balance risk with maximized ncnscoer. go to deliveringalpha r.com rig now to register. we'll be right back.

hi, i'm sally and i lost 52 pounds with golo in a year and a half. i struggled with my weight for a long time due to my thyroid issues but since being on the golo plan and taking release, the weight has not come back. (upbeat music)

(♪ music ♪) (♪ ♪) the walking tree is said to change its entire location in pursuit of sunlight (♪ ♪) where could reinvention take your business? accenture. let there be change.

china's cyber watchdog is tightening the leash on app stores. eunice yoon joins us with more. what does this mean? >> well, becky, people here are trying to still figure it all out, but the cyber regulator as you said just named 26 companies that it said is part of a first batch of companies that have indeed filed business details to comply with the regulations. as you pointed out, apple is not

on the list so far, however, there are some very familiar chinese names on the list. say huawei, for example, as well as ten cent and alibaba's ant group. the purpose is to tighten oversight of app stores. it had come up with some regulations earlier this summer and said that companies would have to register with the government, adhere to chinese socialist values, and there would be special attention paid to news, education, publications, film, tv, and religion. apple hasn't responded to cnbc's request for comment. however, the impact is expected to be pretty big, at least that's what analysts are concerned about, the potential there for the business impact more broadly. not only for apple but for other foreign companies as well as private companies because in effect it would force global apps to establish a chinese

entity or work with a local partner. also, it could potentially restrict the number of apps. there have been a lot of foreign-branded companies and developers who have enjoyed being able to be accessible in china through apple's app store, but they haven't had to actually provide any documentation to the government here. there's an expectation that this is going to hit small developers and then it's also going to potentially affect the availability of some of the band apps. such as x or facebook or instagram, which are actually listed as available through the app store of apple, but you just can't access them as a chinese citizen, so if you go overseas, for example, and travel, you could access them that way, it looks like the apps will be taken off the list, a lot of scrutiny, still, becky, even though the tech regulatory environment at least people think it's eased off a little

bit. >> yeah, i mean, i guess it sounds like this is enforcement of things that were kind of already out there, it's just much more heightened scrutiny, much more enforcement than we have seen to this point? >> the overall environment is such that people kind of understand the lay of land here. they feel as though they need to comply when it comes to, say, the threat of having what's been described as illegal content. nobody really knows what would be considered illegal, so there's a lot of decision making behind the scenes at companies. just to not put anything out there that could potentially be risky, but, yeah, i think what we're seeing here is a more systemic, you know, way to be able to make sure that beijing approves of all of this content. >> eunice, thank you. coming up, the latest on negotiations in congress to

avoid a government shutdown. we're going to talk to congressman kelly arm strong, he has been closely involved in the negotiations with the leadership to fund the government. and he was a key player in the last negotiation. from north dakota. fargo. not from fargo, but that's where fargo is. i have to check again. it is not in south dakota. minnesota. and a reminder, watch or listen to us live any time. we do it live from the cnbc app.

♪ (upbeat music) ♪ ( ♪♪ ) constant contact's advanced automation lets you send the right message at the right time, every time. ( ♪♪ ) constant contact. helping the small stand tall. ♪

if you struggle. ♪ and struggle. ♪ and struggle with cpap. you should check out inspire. ♪ no mask. no hose. just sleep. inspire. sleep apnea innovation. learn more and view important safety information at inspiresleep.com

the senate unveiled a

bipartisan stopgap bill that would keep the government funded through mid-november. still, there is no guarantee the bill will be able to pass the house. joining us now on the latest including some procedural moves last night is republican congressman kelly armstrong. he's been working closely with leadership on negotiations. and, i noted earlier, congressman, good to have you on, that i don't know where any of these things in the house we just mentioned the senate, i don't know where things go in the house because a lot of those priorities that you did move finally, early -- what time did it finally happen last night? i know you -- you look okay. did you get some sleep? when did it finally move? >> we got a real vote last night around 7:30 and started working on amendments for appropriations bills. we should get through those sometime today or tomorrow and we'll take the final vote on four appropriations bills which make up 73% of all government funding.

>> right, and you finally got -- it is a tough road to hoe. i think 216-212, you lost one republican, but it was tough getting for the speaker to finally even get that done. but it finally happened. >> yeah, absolutely. we talk a lot about math. we're running $2 trillion deficit. we're not at war. we're not in a pandemic. $33 trillion in debt, but the math we need is 218 to get these things across the floor. and even if we get it moved, i don't think anybody thinks we're going to have 12 appropriations bills reconciled with the senate by friday. i've always thought the position as a conservative cr put house republicans in the best position possible. i think the border is the fight we should take. we have a rare opportunity as republicans in d.c. right now to win both politically and policy on an issue and i still think that's the best path forward. >> congressman, maybe the only thing that could turn american

public opinion against doing something about the border is closing down the government. it always seems like, you know, you're going to snatch defeat from the jaws of victory again. does it ever help the republicans in the next election to be responsible for closing down the government? and it is going to happen, isn't it? >> yeah. i don't think so. that's why we work so closely with our friends from the freedom caucus over the last two weeks to negotiate what we thought was a really strong position, 8% cut to nondefense, nonveterans discretionary, funding for 30 days and implementing hr-2 provisions which would immediately give our u.s. officials and law enforcement at the border operational control again. this is a fight that is going on in chicago and new york and massachusetts and new mexico and you don't have to take republicans' words for it. it is where we should go. the american people are with us. >> if you were king and i think speaker mccarthy does not want to shut down the government. you don't want to shut down the government, do you, that's not

the outcome that you want. but that's probably going to happen. and the senate bill, that's going nowhere. and this bill, if you finally get to one, has no chance of passing the democrat-controlled senate. >> no, i mean, if i was king, i would build a delorean, go back in time a week and get a conservative version of this so we can get to the negotiating table and say you have a choice, you can shut down the border or shut down the government. every time we get closer to a shutdown, the leverage goes away and it is frustrating because i want us to pass our appropriations bills. these are the most conservative packages that have come off the floor of the house in my lifetime. but the reality is is we are heading toward a continuing resolution, whether to stave off a shutdown or reopen government and i just don't know why my conservative colleagues wouldn't want us in the best negotiating position possible. >> i think you're pointing in the right direction now. are democrats right when they

say, what was arrived at a couple of months ago, they were on board then and they reneged and not even agreeing to -- they want another how much cut, another trillion cut or something? they're mad about the last one, so they're going to take it out on this one? >> yeah, i think it is important to recognize we talk about the debt ceiling negotiation, but both sides blew that up almost immediately before the ink was even dry on that. senate democrats were talking about massively going over the number for supplemental packages, and at the same time, we had people on our side that wanted to go back to the limits. i think we always end up at the negotiated debt ceiling deal. when we get there, that's the reason with divided government, but a good friend of mine who has been here a lot longer than i said, you know, the pain is inevitable, the suffering is optional. we're working our way towards that. and i just commend the leadership with trying to get us something to get us at the negotiating table. >> nobody wants the government,

whether it stays open or not, to be like that speaker vote. no one wants to watch that. remember the 15 -- and then it just looks like -- it looks like republicans are in charge and it looks like they can't really govern when this happens. right? >> and we have two air force bases in north dakota. this isn't a political issue when our airmen and women start missing paychecks. that's a real problem and has nothing to do with politics. >> okay. all right. i'm not going to do any fargo speak. did you at least see "fargo" a couple of times? have you seen the movie? >> i think it is a fantastic movie, the tv series is good too. it is interesting. >> you betcha it was. >> we have the wood chipper -- we have the fargo wood chipper at the fargo visitor center. >> that's great. congressman, good to have you on. we hope to have you on again soon. i love your state. i'll have to visit there. thanks. an invite. >> coming up on the other side -- i don't know if you get an invite -- a look at this

morning's movers. two big interviews this morning. get set. we have minneapolis fed president knneel kashkari on th thf te hikes. plus, the ftc chair, lina khan, the day after her new lawsuit filed against amazon making headlines everywhere. we'll talk to her.

good morning and welcome back to "squawk box" here on cnbc. live at the nasdaq market site in times square. i'm andrew ross sorkin with becky quick and joe kernen. a number of big interviews. take a look at u.s. equity futures at this hour. we open up higher across the board. dow would open 83 points higher, if we opened up now. nasdaq up 57 points. s&p 500 up about 15 points. treasuries, we'll talk to neel kashkari in a moment. he thinks, well, he thinks rates may still have to go higher. we're in the ten-year at 4.5%, two-year at 5.058%. we'll show you oil. move out the energy complex, wti, want to buy it by the barrel, $91.77 this morning. >> lawmakers in the house and the senate are on two divergent paths with no clear plan to get on the same page and prevent a

government shutdown. republicans in the house, on the right, want significant spending cuts. and conservative policy provisions, including more funding for the border. and any bill passed with those terms probably dead on arrival in the democrat-controlled senate. meanwhile, senators passed their own bipartisan stopgap measure but that would likely hit a brick wall in the house. and after 148 days on strike, hollywood writers can now return to work this morning. leaders voted unanimously to end the strike after the contract language was finalized. the deal will last until may of 2026. and speaking of strikes, no, i'm not going to the big three, because i've got plenty others that we can talk about. in this case, it is hospitality workers in las vegas voting to authorize a strike that could impact more than three dozen hotels and casinos. the culinary workers union hasn't gone on strike in more than three decades. the union is continuing to bargain for better pay, benefits

and working conditions with the top casino employers on the vegas strip involved including mgm resorts, caesars, and wynn resorts. >> i think we need a strike reporter at this point, a strike beat. there are so many strikes that we're talking about. we start the show every day running through a laundry list of all the -- >> i feel like i was talking about a strike when i was talking about the democrats and the republicans. they're not striking, but they're two -- >> refusing to work. >> it is divided government. it is ugly. but we seem to eventually get things -- >> tell it to the workers who won't get their paychecks for a long time. tell tsa agents they got to go in and work and you're not going to get paid in the meantime and we're going to keep things running. it is messy. fed officials keep telling the markets to expect rates to remain higher for longer. our next guest says this offers the best opportunity in the last 30 years for fixed income investments. joining us right now is mel

lagamasino with lee family offices, the ceo there. she also serves on the boards of disney and coca-cola. and, mel, let's talk this through. we had on jim grant yesterday and he said he thinks this is the beginning of a long-term bear market for any interest rate investments you're looking at when tied to treasuries. why is this a great time? >> i think if you think about it from the investor perspective, think about people who have big amount of financial assets, you have a situation where on the one hand, you have all of this great opportunity with the new technologies and the new businesses and the productivity that i think is going to be unleashed with new technologies. on the other hand, which is high risk, but high opportunity, and the other hand, these investors haven't been paid for their cash at all for the last x amount of years. today, they're being paid 5%, et cetera, for treasuries. as we start seeing an end to the

hikes in real estate, they're going to be able to lock in 6%, 7%, 8% for the next x amount of years and anchor their portfolios. so it actually gives them more opportunity to invest in the higher risk new technologies. so i think if you think about the portfolio for an investor, it is not all about one thing. it is about how do you make sure you have the cash flow that you need over some period of time and i think fixed income today and as you go a little farther out, because after kashkari's comments frankly yesterday, i think we need to hold on a little bit in terms of spending duration. it looks like it might not just be higher for longer, it might be quite a bit higher for longer. >> right. so wait to go long. wait to go -- >> but be ready. >> what is your duration -- what would you do right now? when you decide, now it is time, would you do 30 years? >> no. >> 10? >> not even. >> 5? >> intermediates. >> only intermediate, ever.

you go out the curve, though, to corporates. munis. high yields? >> i'm still kind of negative on high yield because i do think that the recession is definitely coming. i think the cost of capital has gone up significantly. and i think at some point we'll see a recession and i think that will really affect -- >> you did say to anchor your portfolio. you're talking about a certain percentage. >> liquid. >> and then do something with the rest? >> but if you think that a recession is coming, and rates are still going to be higher and potentially much higher, you think a recession is coming but inflation is not going to be beaten down so the fed won't be able to lower rates? >> i think that that was kashkari's comment yesterday is that while you have inflation coming down around the manufacturing sector and the product sector, service inflation is going to take longer. you look at the strikes, the cost of labor is going to go up, the cost of capital is going to go up.

i definitely think that -- i do think the fed is focused on fighting inflation. so i think we're going to keep rates as long as they have to do get inflation down. >> you think that can work? we'll talk to kashkari about this. that's the other piece of this. >> i think the big boogieman out there is stagflation. we get to the period of high inflation and low growth. >> not good for anything. not good for stocks or bonds. >> no. >> but it is less painful. >> i think it is a big risk. >> do you -- if you venture into equities, do you like yield stocks? you seem fixated on getting paid. would you go into the magnificent seven and really try to hit a home run? >> i think the magnificent seven have a place in your portfolio over time and there are long-term holds. we don't try to time the market. i think that these companies have such monopolistic hold on -- >> don't say that.

we have lina khan coming on later. we're going to play that sound bai bite and she's going to go, see. given growers over time, 2% now, they go up 10%, 15% a year, no, boring? >> well, for certain kinds of investors, i think it is good. but i think you can do actually better in the fixed income market without taking the volatility. >> really? see, i thought the opposite. if you can get -- you only go five years, but in ten years, if you get 15% div diidend increasa year, end up at 7 or 8 with the capital appreciation. >> there is a place for everything in your portfolio. the question is what are you trying to solve for. if you're trying to solve for cash yield, people have had to go out very far on the risk and liquidity space in the last few years to be able to get that, and today they don't have to do that. >> that's an interesting point, to make sure you have the cash you need without having to cash out stocks. let's talk about media. you've been on the board of

disney since 2015. you can't talk about disney's specific issues, but let's talk about the strikes you've seen there and the media businesses overall. the media business is facing a lot of difficulties because of just the changing ways that consumers consume. they're not going to the movies the same way, not watching on television the same way, they like things streamed to them, but that has not managed to find a way to be nearly as profitable. how does this work out and how do the strikes kind of play into that? >> i think the strike almost was predictable. you have a new technology -- you have a complete change in the business model. you have a new technology, the minute netflix came into the picture, basically they disrupted the whole media business. and so i think you'll have a new technology, you have people obviously worried about and anticipating what is going to happen with this new technology, how is it going to affect the business model. we're all already trying to figure out how do we go and do what the consumer wants us to do, which is to access

everything anytime anywhere in any way and get paid for it. and i think it is kind of normal if you think about it that labor is going to say, well, what about me, what happens now, the rules of the game are changing. so i think the business models are going to have to get -- >> i don't know if you saw barry diller yesterday, he made a provocative argument i think that everybody who leaned into what may have been a fevered dream to chase netflix made a great mistake and if everybody had taken their best programming, and decided, you know, we're going to lean in and try to make the bundle a fabulous bundle or maybe we'll streamline the bundle but we're going to be in the bundled world, we're not going to actually try to silo ourselves and try to go either direct to consumer in the same way. what do you think of that? >> i think it makes a lot of sense. barry is always been an incredibly strategic, forward thinker. and i think that we're not going to be able to have all of these

separate streaming services where we're going to be paying six, seven, eight and it is hard to get the programming you want and find it, whether we're talking about sports, right, or we're talking about entertainment. >> disney and coke. so, we could have you on for an hour. we could -- both of those companies are always -- go woke, go broke, that's first companies they mention. i don't know what you think of that sitting in the board room. and then china. you're woke here. but not so woke in terms of doing business in china. you're glad the interview is over, i think. maybe we'll talk about that -- will you come back? >> sure. thanks for having me. >> now she won't. >> now she won't. >> by the way, we should mention that mel is going to be a panelist at cnbc's financial adviser summit, coming up on october 12th. if you're interested in attending, scan the qr code on your screen to register. mel, thanks a lot. >> thank you.

don't go anywhere because you know -- joe is looking at me, i know what joe is -- elon musk weighing in on the uaw strikes and we'll talk to the author walter isaacson about that, possible shutdown in washington and so much more in just a little bit. this cnbc program is sponsored by baird, visit bairddifference.com. the two most important things in golf are your swing and your style.

dick's sporting goods has everything you need to upgrade both. find top-rated drivers and irons from callaway, taylormade, titleist and ping. tour balls from your favorite brands. and the most dapper styles from travismathew and walter hagen to calia and lady hagen. you handsome devil. select the best golf shoes like footjoy, nike and more. and get back on the course with one-hour pick up. look good and play great with gear from dick's sporting goods.

you're probably not easily persuaded to switch look good and play great mobile providers for your business. but what if we told you it's possible that comcast business mobile can save you up to 75% a year on your wireless bill versus the big three carriers? it's true. plus, when you buy your first line of mobile, you get a second line free. there are no term contracts or line activation fees. and you can bring your own device. oh, and all on the most reliable 5g mobile network nationwide. wireless that works for you. it's not just possible.

it's happening. next guest has some updated data on the significant role the latino community plays in the u.s. economy. let's welcome global business executive sol trujillo, chairman of the trujillo group and the latino donor collaborative. the organizations at 2023 charts the financial power and influence of latinos in the u.s. and we talked about it a lot last year in san diego at the last conference. you're in miami now. the numbers are crazy. the one that gets me is a -- if the u.s. latinos were a country, they would be the fifth largest behind u.s., china, germany and japan. >> that's absolutely correct. and the new study that we're unveiling this morning says that

it continues. the gdp has gone from 2.8 trillion to 3.2 trillion. but we're also introducing new numbers relative to incomes and purchasing power and some of the other capabilities that are reflective in the study. joe, i have to say, first of all, we miss you here. it was a lot of fun having you here last year. so we're expecting, you know, next year it will be back in san diego, but -- >> oh, yeah? >> the excitement is here. the numbers are here. and the growth is here. the only thing that is missing in this report is capital flows. and that's a big point i want to make. we have essentially the fifth largest economy in the world right here in our country. and the data continues to show and it is only going to get bigger as a percentage of total. but, you know, the study that we talked about last year, in terms of the bank, it showed less than

1% of all invested capital has flowed into this cohort, says there is a lot more growth that we can go after. and a lot more innovation, entrepreneurship, other things that are part of the conversation here at latitude this year. >> you don't need charity. it is in the self-interest of the people that have the purse strings. that's what is weird. and if you -- i didn't know it was lpp, but i'll start using lpp. latino purchasing power, $3.4 trillion. so, why wouldn't the capital be finding that opportunity? why isn't it happening organically, sol? >> well, that's the mystery right now. so, we're going to have -- you had mel on your set earlier. we're going to talk about making capitalism work in the 21st century. as you know, i'm a capitalist at heart. i believe in capitalism and i do

believe the principle that says capital should flow to where the growth is. just like we thought about growth in china 30 years ago, india, 20 years ago, right here inside our country we have a massive economy that is underinvested right now, underengaged, and that's nan opportunity. we're having conversations about structures. fund structures and other things that can be put in place by those people that you have on your show all the time, and it should be a question you ask. how are you going after this growth and have you created new fund investing structures just like you did for china, india and other sectors, even tech, you know, which i lived in for 30 plus years? there is always ways to go after things as a capitalist, but you have to be entrepreneurial, you have to think about new structures, and you have to evolve. and the rest of this century, this cohort is only going to get bigger and bigger, so, those who

want to get in early, think about it, think about capital, and fund structures that could flow and that's why last year, joe, you and i talked about the fund that i created called latitude ventures, where we raised $100 million, just to show there is a prototype and this year we're going to feature some of the companies that we have invested in, within the last year, that are cut across various sectors in our economy and they're going to be growers. they're going to have great returns, but until we had our fund, people were not investing in them. so now i'm just saying, big opportunity, big numbers, it is a logical thing, it is capitalism at work, and let's make it work. and we just need to talk about it and you all, by having this conversation with me, brings visibility. but there needs to be more. we need to have a special conversation about capital and structures and how we can really grow our economy. >> remember last year, sol,

looking for something where the latino cohort on a relative basis wasn't growing more quickly than other demos, and i don't think i found any. and i'm seeing it again. and i remember most of what we talked about, but not everything, but just in terms of population growth, education attainment, just across the board, you know, either percentage or a multiple facet than most other cohorts which also plays into the point that you're trying to make. how can -- how is it being overlooked? >> i think to be quite frank there hasn't been enough media coverage on it. think about it, if italy, all of a sudden, became the fifth largest economy in the world, growing faster than others, it would be a headline story and all publications, all news platforms, et cetera. but this story has not been told and cnbc, and give you credit, have been telling this story,

working with me and others on this, but now we have to get it in -- when you have your conferences, with ceos and financial investors and others, to ask that question. say, how are you exploring this market that is right here, you don't have to worry about, you know, regulatory changes, political changes, other than our own domestic, and it is an opportunity. and that's all i like to say, it is an opportunity that is only going to grow and it is going to last for the rest of the century, at least for sure in the next three, four decades. the average age cohort, the most popular age cohort is 11 to 14 for the latino cohort. think about when you -- any of you here, 19 years old, and thinking about the income you were earning then versus 29, versus 49 and on and on, there is only growth available. the percentage of new businesses created, employer based

businesses created, and also the technology evolution is just amazing, and if you were here at matchup this year, you would see companies that are now competing for capital, millions of dollars, we're going to invest in these companies, and they're going to be growth oriented companies for the next two or three decades. >> the cohort is very comfortable in the private sector, sol. but is there anything that you would like to see, maybe not specific to the latino cohort, but what do you want policymakers to do to try to help you along, to get to where you want to go? what should washington be doing? >> well, i don't know just about washington. i'm not a believer in big government. so it is not so much about washington, i think even state by state, take, for example, the state of california, they raise money from the people that live there, and they really don't

invest in the latino cohort, the dominant cohort in the state and they're creating jobs, they're treating whatever. if you want to grow your economy, you have to invest in the cohort to stimulate it even faster. it is catalyzing. and i would say texas, i would say florida, i would say if you look at the charts now that we have in our study, 48 out of 50 states, their growth is tied to this cohort. the labor force growth rate. the last thing, joe, i would say, and i don't want to get into too much politics here, but we have a zero percent labor force growth rate as a nation. as a nation. we are doing a session here with accenture talking about reshoring our supply chains. there could be 20 to 30 million jobs that could be created, but right now we don't have any workers to be able to bring those back and so we have to solve this issue. and i call it smart immigration. there is things that we could do

smartly as opposed to the old, you know, conversations that have existed for the last couple decades, i think there is a smart way to do it and that's what washington needs to focus on is we're going to run out of gdp growth with no labor force growth rate. so we have to do something. and we have to act now. >> a good point. just what i heard was, yeah, we don't need -- we really need to -- to get out of the way except for maybe just on immigration and this and that. that's the way it should be. let the private sector do its work and you'll take care of yourself. it would be nice to have some -- thank you. next year. >> all right. >> i could have been on the same time zone in miami and i'm hearing miami might be the best nfl team too. >> let's get a check. good luck. >> we need to rotate. >> okay. >> you're right. you need both. get a quick check on the markets this morning.

you see the futures, triple digits higher, only getting back about a quarter or a third of what we lost yesterday in the dow. and that was the best performing market on a relative basis. "squawk box" will be right back. time now for today's aflac trivia question. who did mijae dimon succeed as ceo of jpmorgan chase? the answer when cnbc's "squawk box" continues. gaaaap! did this goat just say 'gap'? he's talking about expenses health insurance doesn't cover. but with aflac, you can get money to help close that gap. aflac, huh? -aflac! -ahhhh! okay! oh! duck - 1, goat - 0. get help with expenses health insurance doesn't cover at aflac.com -you want to race? -for real?

now the answer to today's aflac trivia question. who did jamie dimon succeed as ceo of jpmorgan chase? the answer, william harrison. welcome back to "squawk box." president biden rallied the uaw workers in michigan. this happened on tuesday as the strike moves into its 13th day today. and now tesla's ceo elon musk weighing in on what is taking place in detroit. criticizing workers' demands as a sure way to drive gm, ford and chrysler bankrupt in the fast lane. for a closer look at that fast lane, let's bring in walter eisen, author of the new book

"elon musk," an advisory partner at tulane university and cnbc contributor and i believe the book is number one on "the new york times" best-sellers list. >> not because of me, but because of the interest in musk. >> congratulations. >> thank you. >> let's talk about this. do you believe -- i guess what do you believe, a, is the right answer for the uaw and the automakers, and, do you think elon's right? >> i think this is not just about the wages. it is about the fast move we're doing to electrification, evs. that changes everything. if you're building an ev, it is at least 30% and will soon be 50% less time on the assembly line, less work to be done. likewise, the batteries. so as you make this transition to electric vehicles, it is very disruptive. for musk, he's trying to bring out a $25,000 global car, compete with byd.

he's going to do it both in northern mexico, but in austin, this new line. and i think if the legacy automakers don't figure out how to make this transition, that's what the strike is about, is figuring that out. >> when you see president biden standing with the uaw workers, do you say that's right, that's wrong, given where we are? i think there is two issues here, we're at a time where he's pushing evs, which makes it that much more difficult, at the same time we're saying we want to be a country where everything is manufactured here. byd, what do they pay, $7 an hour? >> right. and the uaw is now, what, $65 an hour. so $110,000 a year, which would go way up on the strike. this is a complex thing you debate all the time here. but if you can do $7 an hour in china, and $65 here, that's going to be a problem. likewise electrification is a problem. so in some ways it is a bit

like, you know, whaling against the tides, you got to figure out where the tides are going to hit. >> how concerned -- maybe this is true of tesla or rivian or the other automakers, there is a knock on effect. even those those are companies that don't have unions, if in fact these unions capture much higher prices, it does press the price higher everywhere else. >> absolutely. tesla work, they made $45 an hour. but they get stock options. and that's confusing if the stock is at 100, then 400. >> there was a period of time where clearly workers were getting much paid than the unionized workers were at gm. having said that, there is a period of time where the stock was at a different place where it is today. >> yeah. i think there was a period of time where a worker at a tesla plant was making more than you because the stock was -- >> no, no, no.

>> but that is a complicated thing. do you want stock options. musk got in trouble at one point when they're trying to unionize a plan at the fremont plant, you might lose your stock options and that was considered unfair labor practice. i think that your initial question is, yes, it is going to put pressure on tesla, rivian and everybody else if there is a significant wage increase for the uaw workers. then there is going to have to be that for the tesla workers even if -- >> did they ever unionize the plants too? >> that was a big -- no. i don't think any electric vehiclemaker plants are unionized. no tesla plants are. there was a big push to do it in california and it failed on this vote. but there will be another push. i am absolutely sure that the uaw at some point will be trying to unionize -- >> they lose the whole -- >> but batteries, by the way, are not included generally in the uaw contract. >> that's a big sticking point.

>> no more engine to build in an electric vehicle. >> ford infuriated the uaw yesterday, the day before, when they said that new plant with china, they were just going to not build it, the battery plant there because of these very issues. on the right there are -- it is a project with china, so china hawks are mad about it. the union is mad about it. it is not going to be -- >> by the way, the automakers are getting left behind. like 90% of these new vehicles, evs, tesla, tesla sold more than a million, i think in the first six or seven months of this year. so it is leaving the older automakers behind and with ford once again saying we're not sure we're in this business, we're not sure we're building batteries. this is a larger mess that surrounds uaw. >> the mess could get even messier and i don't -- i understand there is an election coming up and you would like the working class and trump was going to go there anywhere. i understand that.

i understand student loan forgiveness. there is things you do. but one thing that i've always complained about with public unions when a democratic governor says we're going to get you a great contract, the governor is there to protect the taxpayers' interest and not to let the state get overwhelmed by pension costs. and not to promise the moon to the public employees that he's fighting with. and they usually contribute, the unions, to getting the same guy or gal re-elected again. this was similar to me. if biden is there saying -- president biden is there saying i'm -- you need to get this deal, you need 40 -- if he bankrupts the big three, taxpayers are once again going to be bailing them out. >> well, this was musk's point, you bankrupt the big three. >> with the help of the guy who is supposed to be protecting the taxpayers of -- >> i'm not -- >> i know you never do, but -- >> it is true that working --

that union workers and the workers are not keeping pace with the -- >> i understand that. but should the president be there arguing on the side of the workers when he's representing everybody? he's representing, you know, corporate interests, he's representing -- >> it is not my field of expertise. >> you always punt when you -- >> you could say something that is right in front of your face. >> biden is fighting for the people on the assembly line whose wages haven't caught up. >> who could lose their job because they bankrupt the company in the end. >> that's what musk said, if you bankrupt the big three, as happened two out of the big three in the past, then byd will come in with its cars, tesla will be making a -- >> i don't think we can look away and not confront the real issue, walter. we could stop it from happening -- we can do some good. >> yeah. >> what do you make more largely of right now just the power that it appears that workers have across the country? you see it in hollywood, we saw

it with u.p.s., we're seeing it with the uaw. what do you make of that? as somebody who has been a student of history, what is this? is this an aberration? is this -- or was the last 30 years or 40 years an aberration in terms of unions? >> the past 30 years has seen a decimation of unions. also a decimation of the median wages of working class people. especially compared to the very high income. we had a growing wealth gap and that's been for reasons that you have written about and you're going to write about, which is the way our economy worked in an era of globalization and free trade and whatever. at this point, you're seeing a resurgence in the power of unions, and you're seeing a resurgence in wage growth and that's probably a good corrective to what is happening in the past 30 years. >> you would support then the workers? >> yeah, i do think, though, joe is right. if you bankrupt the big three

automakers, if you send -- and this is the most complicated thing we face in the world today. does automation create more jobs in the aggregate or does it destroy jobs? and what we know is it will decimate assembly line worker jobs, even if it might lead to a more productive economy. >> and add a.i. on top of the automakers? >> automation and tesla is building opt muss the robot that just this week showed it can walk across the factory floor, find a valve, find a wire, pick it up with its hands and know where to bring it. so when you have robotics that way, it is difficult to see how the tides of rising assembly line worker wages are going to clash with that. >> are you of the view that -- let me ask it this way actually, what does elon musk think about this issue of unemployment

long-term as a function of a.i. and robotics and everything else? we talk about ubi and sam altman has particularviews about all this. where does musk land? >> in the tesla factories, when optimus was being unveiled, walking across the stage. this is a robot, as you know, that is supposed to be able to work in the factory floor, have real world artificial intelligence. and he came out and said, look, this is going to revolutionize things. work is not going to be a necessity and, yes, he was in favor of ubi. he said we have to have universal basic income. as a historian, i note that every time there is an advance in technology, people think it will destroy jobs, it actually creates a more productive economy and more jobs. so i'm not sure i agree that it destroys jobs, but i know he's in favor of creating artificial intelligence, robots, automation

and having universal basic income. >> walter isaacson, good to see you. congratulations on the book. it is everywhere. >> thanks. more big guests still to come this morning. roberto reed will talk about target's decisions to close stores because of thefts and what he sees in the consumer right now. minneapolis fed president neel teshkari will talk interest ras, inflation, how long he thinks rates will have to be high. plus, a special interview with ftc chair lina khan. "squawk box" will be right back.

rich, velvety... coffee. cafe-quality... espresso. one high-pressure system... that can do both. brew to your heart's desire. ...with the l'or barista system. now brewing peet's coffee.

power e*trade's award-winning trading app makes trading easier. 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. power e*trade's easy-to-use tools make complex trading less complicated. custom scans help you find new trading opportunities, while an earnings tool helps you plan your trades and stay on top of the market. e*trade from morgan stanley.

welcome back to "squawk box." i'm dominic chu with today's early morning movers in the premarket. we'll checkstart with a check o consumer. costco around 10,000 shares of trading volume premarket. the big box store chain reported better than expected profits and revenues powered in part by more spending by its customers on things like groceries. but perhaps less on bigger ticket items like tvs and appliances and furniture. the average amount of money

spent per transaction fell by 4% globally, even with the 5.2% increase in store traffic. e-commerce sales also dropped by .8%. on to a couple of analyst calls getting some attention this morning. shares of occidental petroleum higher by 1.3%. roughly 20,000 shares of volume. the oil and gas exploration and production company being named a top pick by analysts at bank of america. they think oxy is in a good position to take advantage of nei near term oil price strength. we'll end with a check on denim. analysts at td cowan starting coverage of levi strauss with an outperform rating and $16 target price. they cited amongst other things levi's potential to grow its direct to consumer sales as well as its international footprint and lifestyle products outside of traditional denim. those levi shares up 1.3%, around 3,000 shares of volume. denim, a little oil, also the

consumer, back over to you. >> dom, thank you very much. when we come back, from safety concerns at retail stores to companies getting involved in culture wars, harvard lecturer and best buy ceo hubert joly will join us aerft this. and next hour, neel kashkari giving more clues about the fed's next policy move. he will join us in the next hour. we'll be right back.

gold isn't merely a commodity. it's an investment in people and communities. at osisko, we strive to build modern, safe, and sustainable mines that benefit all. think big. shape tomorrow. osisko. rich, velvety... coffee. cafe-quality... espresso. one high-pressure system... that can do both. brew to your heart's desire. ...with the l'or barista system. now brewing peet's coffee. the power goes out and we still have wifi ...with the l'or barista system. to do our homework. and that's a good thing? great in my book! who are you?

no power? no problem. introducing storm-ready wifi. now you can stay reliably connected through power outages with unlimited cellular data and up to 4 hours of battery back-up to keep you online. only from xfinity. home of the xfinity 10g network. the power goes out and we still have wifi to do our homework. and that's a good thing? great in my book! who are you? no power? no problem. introducing storm-ready wifi. now you can stay reliably connected through power outages with unlimited cellular data and up to 4 hours of battery back-up to keep you online. only from xfinity. home of the xfinity 10g network. welcome back, everybody.

we have been talking all morning about union issues, strikes and a lot of places and now some of them have shown up here on our set behind us. the air transport international pilots are seeking federal mediation, national mediation board to try to help them with stalled contract talks. this biggest. and they got a sign, "it's prime time fo an -- for an ati pilot contract. >> this is something that we're reporting on every hour. >> this dispute, by the way, looks like it's been going on, frankly, since 2020 and they've been seeking help nationally from the aviation board for quite some time. most of this is over, as you might imagine, compensation. >> oh my god, the president is here -- no, he's not. he didn't come to this one. >> in the meantime, target says

it will close nine stores in major cities around the country citing violence, theft and organized retail crime, one in harlem, three in seattle, three more in portland, oregon. shares of target down 25% year to date. and shrinkage has been something that retailers have been talking about. with the busiest shopping season right around the corner, we want to bring in the former chairman and ceo of best bay and a senior lecturer at harvard business school. >> good morning, becky. >> why don't we talk first about how the consumer is feeling. we've seen signs this week that consumer confidence is dropping. how big of an issue is that? >> that's another factor of

uncertainty for retailers and globally. payback of student debt will be a big factor that people will look at. this is a relatively benign environment and the uncertainty. plus is the government going to shut down? >> we've also looked at credit card default on the rise, the highest level we've seen. >> and that means for ceos and leaders, given the number of issues being thrown at you, you need to have the ability to navigate the waters. >> what does that mean, you need to move your workforce, change what you're getting in stock? >> agility on supply chain front so they can replenish more quickly and more flexible would

be an example of that. >> what we heard from target yesterday was that they're actually closing nine stores and they targeted target stores in areas where they have seen theft and crime and they have tried to do things like increase the number of security guards, bring in third party security guard guards and make sure they have all things across stores and it's just not working in those areas. this is something they've been talking about for a couple of years. and so have other retailers. >> the fact that target is doing this is a sign they've tried a lot. it's another sign that our society is seeing a lot of tensions and that's something that companies need to deal with. >> what's to blame here? is this local law enforcement, district attorney, changes in rules and who we'll prosecute

for shoplifting and why and is it organized crime rings and being able to fence it on line pretty quickly? >> the root cause may be beyond my pay grade but when you're dealing with retailers, you're dealing with organized crime. and the guideline that retails are give their workforce is this is just stuff so don't get killed. so people are taking advantage of this, which is sad. so fixing this, you know, i'm not sure about the answer to that question frankly. >> but a societal problem. >> it certainly indicates that we have this liquidity on a big scale, you have a divided society, people are angry. you see that in a whole variety of ways, including around the culture wars. this a divided society, which is really sad. we used to be these great united states of america. it feels like we're disunited.

>> and a divided society of those who follow the laws and those who don't in. >> yeah. >> and furniture, consumer electronics, all the things that people loaded up on during covid, we've seen a drop in demand. people don't want to buy a new tv for the third time. >> i'd have to lead with roller coaster, right, in '20 and '21, demand peaked. we all remember that when we had a third computer and video camera and i think it's expected this year to be the bottom. innovation is going to continue to drive interest on the part of customers and so she expects things to rebound. it goes up and down and then back up again. >> we need to talk in a little bit about amazon.

do you look at amazon and think they have monopolistic power? >> so the question of the last suit against amazon is an interesting one. there is i think -- there's been a book about anti-trust laws and somehow they fell behind the evolution. i think there are some practices of some of these online players that i was looking at. you know, as an example, let's imagine that they have a lot of products. one product is not available and then all of a sudden they lower the price on that because everybody follows each other, that's hurting -- >> but off camera i spoke to you about best buy and the demise was greatly exaggerated because i don't order -- if they told me i got to hook up my ruckus wifi thing, i need the geek squad and i know they'll come over. you've competed against amazon effectively.

they can be competed against. >> and great example, best buy is one of them. and the best version of themselves combining online and offline. i think it's fair that the government will look into. >> if amazon had power and decided to raise their prices on tvs, athletic gear, do you think people would still buy them on amazon? that's the ultimate question about the power. meaning you only have to have monopolistic power if you can raise prices against your customers. i don't see how that would actually happen or work. >> andrew, it's interesting to look at. as consumers and the government will have to prove this. we are prime members. so this is o go-to place. how many times do you check the price of a product on amazon against walmart? right? especially on smaller items. i don't. it's a convenient plan.

it's established -- we think we're so indispensable in our lives -- >> that unto itself is a monopoly. i'm not sure i agree with that. >> check, check. don't be lazy. check to see where you can get the cheaper e.on >> it depends on the price point. if it's a $20 item, you're not going to check. if it's a $2,000 i'm yet, you will.

zon good morning. the markets rebounding slightly after a slide. and neel kashkari will join us. and the federal trade commission slapping amazon with anti-trust charges, as the final hour of "squawk box" begins right now.

good morning. welcome back to "squawk box" here on cnbc. i'm joe kernen, along with becky quick and andrew ross sorkin. we want to get to neel in a second. first we'll look at the markets, which are up a little bit, we bounding a little from yesterday and maybe more importantly for our next interview, we'll take a quick look at treasuries, which 10-year has been at levels we haven't seen in quite a while. it is above 4 1/2%. these are rates that if you've lived long enough, it doesn't seem very high. compared to where we were on a relative basis and we're over 5% on the 2-year. >> cnbc's alpha conference kicks off tomorrow. we asked our panel for their outlook and strategies for the second quarter and beyond. here's what they said about the

fed and interest rates. nearly 80% feel rates should be held steady. nearly 20% see a hike again soon and a small percentage want to see a rate cut. and nearly 60% feel that inflation will fall over the next 18 months. >> and that leads us to neel kashkari. he joins us this morning along with our own steve liesman. you guys were doing 75. another 25 i can handle. what i love about the fed is you can institutionalize words. remember conundrum? and then if you say substantial versus significant. and now what's a lag and can you define it and can you tell me how long it takes for it to happen and the other is restrictive because that's what

i'm focused on right now. are we restrictive right now? >> sufficiently restrictive. >> are we sufficiently restrictive right now or not? >> i don't know. >> all right. >> you're asking the most important question. so the definition of restrictive in my mind is where a long-term real rate relative to the long-term neutral rate? we can't observe the neutral rate. we can kind of estimate it. i thought it was around 0% real, we're plus 200 basis points relative to that now but it's possible that the neutral rate may have moved up. the one thing that makes my cautious is that consumer spending has remained robust, gdp growth continues to outperform and the two sectors most sensitive to interest rate hikes, autos and housing, have both indicated some signs of

bottoming and in some cases are starting to show some recovery. >> but on the other hand, john forte, on the other hand since we don't know about lags and how long they take, when i cook a steak on the grill, i put it in tin foil because when it comes off the grill, you leave it there for five minutes, it cooks more. and you overcook it if you just -- maybe we're already -- >> steaks, lags and monetary policy. >> isn't it possible it's getting more restrictive day by day without you doing anything. >> it is possible. that's why we slowed our hikes. we took a gap, did 25. we didn't do anything this past week. we are allowing the data to come to us and figure out how much of an effect we're having on the economy and whether we need to do more. and as inflation continues to

come down and i hope it continues, if policy stays where it is, real rates get tighter. >> what if oil stays where it is? joe did all the highfalutin questions. >> consumer crowds out other thing that household have to buy. energy prices tend to move around a lot. i wouldn't look at energy price moves and say that's definitive on what inflation is going do but it is something that affects the economy. >> just getting back to where you're seeing rises agains are energy prices being one, housing being another, those are supply issues you don't have control over. you can raise rates to infinity and you might not be able to -- >> but don't. >> i mean, it's a pretty blunt tool to try and fix those issues with higher rates. >> i understand.

monetary policy is absolutely a blunt tool. but when we've seen as high of inflation as we've had the last two years, we've seen a lot of progress and we need to finish the job. >> what is the prevailing view in the room about all of these strikes and the union efforts and the increases in wages across the country and what you can and can't do about it and what you should or shouldn't do about it and what it means immediately for inflation and longer term? >> my view is we want to see workers enjoy higher wages. the labor share of income has been declining for 40 years. at the same time we model out what do we think the u.s. means for the u.s. economy. traditionally these strikes are have been storter lived and has not been a big imprint on the economy as a whole. >> when you see the significant

increase that will likely result from at least some of these strikes, do you say that's a good thing because it affects wages? >> something i looked at a year or two ago, i started paying attention to union contracts and whether they were adding in the cost of living adjustments. in the 70s, high inflation was so present everywhere. over the next 20 years, they sort of fell away and then they started creeping back in. so we do pay attention to these contracts for what they mean about the future of inflation and whether or not inflation expectations are getting embedded in the economy or not. >> what i worry about is it looks like the dual mandate, one side of it is totally under control so it gives you freedom to go after inflation because the job market has stayed so strong. so i would say -- you you would say that the risk is that inflation is not conquered at this point. but i think you need all always

in the back of your mind to realize that if we don't need to cause a recession, there's no reason to be responsible for one and stay too long, stay tight for too long. don't forget, and you could be worried about it very quickly and could you stay too long. and you don't have a crystal ball. just like you didn't know inflation was going to -- you can stay tight longer than you need to and suddenly the soft landing is a fantasy that didn't happen. >> so these are the exact debates that we are all having with each other. i can speak for my colleagues. we all want to avoid a hard landing. 100% of us want to bring inflation fwak to 2% and preserve a strong job market and we're all proud of about how robust it's been but we also know we have to complete the job.

hopefully we've done enough but we just don't know right now. >> there's been a measurable change in the tone and the reality, i think, of what's been happening with higher rates and their impact on the economy. every day it seems like in the wall street jourj, in the lead position is some impact of higher rates on the real economy. story today about rollover of debt, yesterday about how it's beginning to bite and hit people. i want to really pick up on joe's question. are you satisfied, was it the intention of the federal reserve last week to give a much more hawkish message that resulted in additional tightens of financial conditions in terms of higher long-term yields? is that what you guys want right now or do you have any concern at all that you have gone too far, that that steak is going from medium rare to well done? >> well, i don't think that it was -- anybody was making a decision to say i want to try to tighten financial conditions

using the summary of economic projections. in a of optimal policy. look at the data. in june the sep had a run of 1% wheel of gdp for 2023. in september the median was now 2.1. that is a monster revision in three months. the economy has been much stronger than any of us appreciated. >> i can argue back with you, neel, the essential mistake you made was gdp doubled and inflation came down so you got the result you wanted without bring gdp down to 1 %. why not let it ride instead of create a recession? >> we're not trying to create a

recession. some areas have been quite volatile. housing is ticking up again. i know, becky, you mentioned supply. no question. but there's also demand. >> there's a lot of pent-up demand. rents are going up and, by the way, everything you do to try to fix inflation. it's a crazy cyclical thing for people who happen to be in a position to have to move right now. >> if we simply said, well, there are all these factors and let's just call it good and all of a sudden we said 2% and now it's 3% and that undermines the credibility -- >> you to take a much higher perspective level on all of these things. there's going to be problems that you don't love but live with to keep your eye and she

cited what you wrote as a reason that she thinks a recession is coming. listen to what kashkari said. is that the intended effect you wanted? >> we have to keep rights higher for longer because the economic fundamentals are stronger than i appreciate. it isn't obvious that means a recession is more likely. it just means we might need a higher rate path to get inflation down to 2%. >> so i heard people say you go back to the great financial crisis. what so maybe we're here. maybe we're here. maybe the next move is a little her but we're permanently.

and you're never cutting. >> what if you don't cut in the next five years? is that possible? >> if the future rahal rate has gone up. what determines the neutral rate is the balance between supply and demand of investment capital. that sets the neutral rate. if there's big demand for investment capital in america, that's a good thing. caller: and it should cost money to get and a lot of investment and that caused it to go higher, that's a good reason. >> so what's your best bet on who is on top next year? >> who are the biggest hawks. who are you arguing with? >> my seat mate, i have a seat

next to austin goolsbee. >> have you been arguing with him lately? >> basically taying it. >> yes, it does. >> why? >> in that scenario we will all look at that and if it makes sense to dial back a little bit to keep restrictiveness constant, we can do that. but you're having to write something down, pencil in a forecast with a lot of economic uncertainty. you can't play out every different scenario and say this is exactly how it's going to play. >> how shocked would you be if you orchestrated a perfect landing, like nadia comenici. >> i wouldn't say it too good to be true a year from now. over the last nine months to a

year, things have really -- >> that would be non-consensus because no one believes can you do it. maybe you will. >> very quickly, target is in your district at home, we've been talking about the retail stores that they're closing because they can't control the theft issues. have you talked to target? i mean, it widespread all across the country, a lot of different retailers and it does come down to local policing and local policies and how aggressive they're being in prosecuting some of these stuff. it a complicated and revielt alization. >> do you hope you're gone by the time we're at 40 trillion national debt? does anyone ever say our

successors are going to have to manage through some difficult times. >> i i'm sure you understand we don't talk about that. >> joe, you want nadia coach neech to land a perfect landing and cook a medium rare steak. >> you know how hard it is. >> if you have a conversation, you're done. >> you know how to do it? >> i do. i grill steak right on coal, directly on the coals. >> and when you do that, do you leave time under the foil for to to get -- >> yeah. >> see what i meant? did you use that analogy before? can you use it for like $100. >> especially at kings where we were just talking about. i don't scan the steak and the

food. still to come, ahead on "squawk box," one big interview to nor the the united states slapping china with anti-trust charges. ftc's linakht "squawk box" returns after this.

welcome back to "squawk box," everybody. the futures are still in the green. now talking about the dow futures up almost triple digits, by 98, the nasdaq up by 56. this does come after a down day for the markets yesterday. the dow has been down five out of the last six sessions and we are on track for a losing month for all of the averages. looking at treasury yields, 10-year just above 4%, 20-year

4.5% and you can see wti now at 29.27, an increase now of 2.b2.% and brent is down. remember, we can get the best of "squawk box" on our daily pod app. "squawk box" will be right back.

we're in such the early innings of how a.i. and especially generative a.i. i would call it the killer app for proceeding. as good as today's large language model is, it can still get better. >> and that was at the code conference. and speaking of a.i., open a.i. is talking to investors about a share sale that would value the startup at $80 billion to $90

billion. the deal is expected to allow employees to sell their existing shares as opposed to the company issuing new ones and one of the great mysterytory is the fact that sam altman, who started the company doesn't own to dom. caller: we'll start with fun and games. mattel share up 2 1/2%, now up around 4%. the target price they say is $27. they think mattel offers some of the best risk returns with better profit margins and free

cash flow in the offing. and next up, xpo. evercore joins the outperform race raitting. and and true. whenny come back, we've got breaking economic news. and then we have a very special interview as the ancgey slaps amazon with a big ant tree trust suit. all that and more after this.

durable goods out moments ago. rick santelli standing by at the cme. what did it say? >> we know these are very, very volatile. last month minus 5.2, month before that, positive 4.3. i think we're leveling out. we ended up up 0.2, which is the best number since the month before last when you're up 4.3,

but not so bad -- revisions hitting now. last months if minus 5.2 to minus 5.6. minus 5.6 brings you to april of 2020. the month before that brings you to may of 2020. my point is we have covid distortion in a lot of these numbers. we should probably start going back pre-covid. and if you look at capital orderer, the approximatity for capital spending. well, defined an equal, you have to go all the way to march of 2022 so march of last year when it was up 1.2. that is good news. yields should move up a little on that. and if we switch from orders to shipments, up 0.7 of 1%.

that's the second highest number of the year outside of january 1.1. all in all these are pretty good numbers, especially the headline number with the negative rescission. interest rates are suffering the high ellest level it i'm surprised you aren't talking about the president throwing a little dirt and the fed endorsing a 40% pay increase. think about it. joe, andrew, back to you. >> meantime the medical trade commission grabbing is accused of illegally using market power to ra and to punish sellers resulting in higher overall prices on the internet.

chair kahn, we very much appreciate you are joining us. in your lawsuit, you say a single company, amazon, has seized control over much of the online economy. it's 172pages. i'm going to ask you the basic underlying question, which is what do you want? what is the underlying goal of this? you don't seek necessarily a breakup or anything else. >> thanks, andrew. good to see you. this lawsuit is fundamentally about protecting free and and they punish their monopoly power and tease what our who will now pay one out of every $2 did to ap gone and that in turn,

unflats prices for consumers, not only just on am sfwlon's own site but across the internet. that's what this case is about is making sure that we're mighting to protect free and fair competition and con to your and the american citizens benefit from it. >> and how do you remedy that? >> we allege amazon has violated the anti-trust laws. one thing we make clear in the lawsuit is that you really have to understand the dynamics of digital markets and in particular online commerce. we quote amazon execs who note in order to really succeed in online commerce, you need to have a certain degree of scale. you need to have a critical mass of either shoppers or sellers in order to really benefit from the

acceleration and momentum that the digital market that once they stopped trying to achieve that stale, it's been focused on depriving rivals the ability to gain similar critical customers. in the way that the harm is also scaled, we want to make sure that the judge recognizes that any remedy. chair khan, let's talk about the single gating factor. before you get into all the other issues in are in this, there's a fundamental question of whether amazon is a monopoly. what is it they control or don't control? they tell you that they are less than 4% of retail in america and

every retailer around in the world. you have defined it in a very unique way. you talk about online superstores, which is a category i have to say i haven't heard about before because it effectively limits you to a very, very specific group and you would have to have monopoly power, not just market power for a lawsuit like this to work, correct? >> that's right. so the idea of a super store has been well established in brick and mortar world. so this case is really applying that context in the online market sense. and, you know, the complaint details why it is we believe that the online superstar market is a relevant market as well as the market for online marketplace services. >> does that mean people at an nl there are only certainty

mentionsof competition. and one other thing i will note, in anti-trust, there are multiple ways to be talking about monopoly power. one is through defining the relevant market, talking about the percentage of monopoly power. can you is he owe so what both with regards to sellers so that it's been steadily increasing the rate but also with regards to quality. so we lay out in complaint how amazon has rolled out a campaign steering them to more expensive

products. so the direct evidence of monopoly powers is something that says that amazon is forcing third-party players to keep prices almost artificially low in earn circumstances against rivals at other stores. and yet and the same lawsuit is suspecting ap zahn a going to. >> yeah. it quite in the we'ds but in short, am sfwlon has a policy that punishes sellers and retailers that lower their price anywhere other than amazon. at the time time time. is f and in practice what that means is that if had you a platform for a retiler was, it

would not actually be able to compete on frm and if they are in any other retail or platform while lowering prices. so amazon's practice are closing off the dimension of price competition, which is incredibly important and gives waves for other firms to be competing on the dynamic. >> chairman khan, just philosophically and a lot of the cases that your ftc has brought, you made a comment that monopoly power can manifest itself in a lot of different ways. there's an old ek and it seems if you have a large corporation, a successful corporation, that you can find something or you will look to find something by the very nature of it being

successful. almost as if you're assuming that they're guilty and they need to prove that they're innocent, which they've done a few times with some of these cases. is there anything to that? is a big, powerful corporation by definition doing something wrong? >> absolutely not. we followed the facts and followed them wherever they lead us and sometimes in the past there have bin stances where enforcers have gone after just small firms and given big firms a pass and we don't think that's right either. there is a you cite an idea that third party sellers are frzed it fourp and especially where you

do this separately and you make the argument that this is a way for them it were and if you look at when they tried, and there was a period of time of when they tried to. that the delivery wasn't up to the standard of fachl these guys wouldn't deliver in two days isn't that a business decision that they should be able to mob. >> they know those sellers often frng i'll be honest andrew. i think is is will. . and we'll be able to fully plin

why zchlkt chair chan, tim woo was here last week. he's been one of the architects to many he said one of the frustrating part of the obama administration was that they would not bring a case unless they were 100% sure that he would win. and he's word that u the. in. >> what do you think about that theory, and if it's a problem if you don't bring a case that you brought. >> we only bring cases when we believe there's a law violation and if we believe there's a law look at the decisions clo they but we think this is an

enormously sfrng just in terms of looking at a calendar and the permy aations this could make, how long do you imagine this case takes in. >> it's in this many anti-trust litigation with be a few years and we think there is enormous urgency here in terms of the harms that the american nfrmt and so we're going to be moving with as much urgency that woo. >> thank you. >> thanks so much. >> still to come, the cnbc delivering out the ton strp also, i rep reminder, "squawk box" is trng as part of husband live collection.

youun trp just head kprchl the mother information on how you, too, can kprn . >> i've been waying for somebody just like you. hoping ♪ together, we built something truly beautiful. 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. how's the chicken? the prawns are delicious. oh, i have a shellfish allergy. one prawn. very good. did i say chicken wrong? tired of people not listening to what you want? it's truffle season! ah that's okay... never enough truffles. how much are they? it's a lot. oh okay - i'm good, that - it's like a priceless piece of art. enjoy. or when they sell you what they want? yeah. the more we understand you, the better we can help you.

that's what u.s. bank is for. huge relief. yeah... ♪ welcome back to "squawk box." the futures right now, we're up double digits, but we're up 99

points on the dow, trying to make back some of yesterday's pretty significant losses, one of the worst days we've seen in recent months. treasuries this morning, pretty standard interview with neal kashkari, interesting. and the 10-year about where they've been. the annual conference kicks off tomorrow at this fancy, schmanzy place. >> i'll be there. do we have those little mics in there? it's cool. we deserve one occasionally. the protesters there -- actually picketers, not protester. leslie picker joins us now with an investing trend that will be the subject of one of the high-profile panels tomorrow.

>> by the way, they're not picketing us. >> they're not picketing us. they love us. they know how influential our viewers are. >> that's right. but i'm all for those fancy microphones that you mentioned, joe. we'll have to talk to someone about that. take a look at the strategy, it managed to eke out change every year regardless of the backdrop. investors are likely to put another $200 billion plus in commitments into private credit for the fourth year in a row according to a new report. the debt is typically floating rates so some are concerned that the longer interest rates stay elevated, the more stress they'll put on balance sheets of borrowers. so for this week's alpha borrower news letter, i sat down with the ceo, who is not

concerned about a major cycle. >> i would expect the rates to tick up but not to high levels. the irony, the stressors are created by liquidity and high rates, not deteriorating cash flow but the debt service continues as rates go up and stay higher for longer. if rates stay high for long, through the end of 2024, that debt service will force companies back to the table. >> i asked him if he's seen any deterioration in lending standard given all these new entrants into the space and he said not really and believes the asset class will be quite resilient. and the panel tomorrow will be discussing the key trends in one of the hottest pockets of finance these days, guys. >> we are looking forward to it. and even if we weren't we'd

still be there rain or shine tomorrow figure. will you send us the exact address, leslie? >> i have it. >> you got me covered? >> >> use the cruise ships. it's great. >> how many is this, do you know, leslie? >> 13, i believe. >> i believe it's 11 or 12. i could have that wrong, though. i should know that. >> it's good. we look forward to. and a lot of food. >> over a decade. before the show, there's a lot of pastries and stuff, right? >> cure up. bring your forks and plates. >> all rhtn.ig thank you, leslie. we're going to get ready for the opening bell on wall street. "squawk box" will be right back.

[ weather report announcer ] all flights have been grounded. ♪ i had to escape, the city was sticky and cruel ♪ ♪ maybe i should have called you first but i was ♪ ♪ trying to get to you ♪ ♪ i was dreaming while i drove the long straight road ahead ♪ ♪ i drove all night to get to you ♪ the distance is nothing when home means everything. ♪ opportunity is using data to create a competitive advantage. ♪ it's raising capital to help companies change the world. ♪

opportunity is making the dream of home ownership a reality. ♪ ...and driving the world forward to a greener energy future. [applause] sometimes the only thing standing between you and opportunity is someone who can make the connection. at ice, we connect people to opportunity.

our next guest says that what we are experiencing in the markets is a valuation correction. i want to bring in megan hornman, chief investment

officer at capital advisers. you want to explain what you're talking about? >> sure. moe most of this year, we've seen valuations rise. not necessarily an earnings-led rally. it's been in technology, growth, ai related names, and this was all banking on the anticipation that the fed would either be done this year, be cutting rates or at least cutting rates into early next year and what we're seeing is that that's unlikely. the fed has reiterated they're going to stay higher for longer. there's a chance they may have to hike rates again this year, and we have been warning that sometimes the catalyst on a selloff doesn't have to be a major event. it can just be a valuation correction where we have to get more realistic on what the valuation outlook looks like. >> you also think that a recession could happen as soon as next quarter? next month, i guess i should say? >> exactly. fourth quarter or first quarter of next year. the consumer is our biggest concern. the consumer continues to be stretched.

the credit card debt is getting outrageous. the rates are at record highs, and we're starting to see softness at all income levels now. this is something that concerns us on how they can continue to spend money in the fourth quarter of this year, especially as we roll into next year and they start to pull back on spending. >> is that almost looking at what the fed has done to this point, they have achieved their goal, slowed things down. do you have any reason to think this is going to be a severe recession or is this just the type of slow down that may be needed to tame inflation? >> absolutely, it's a slow down that has been fed-induced that's been needed. we have been talking about this since the end of the pandemic. we need to slow the demand side of it to bring down the price side of it. the fed is achieving that side of it. the labor market remains stubbornly strong for the fed. it puts them in a difficult situation. it's also one of the reasons why we think the recession that we do have won't be long, prolonged or really deep.

we think it will be able to be short, shallow and a healthy correction in the market to get inflation down. the only other issue the fed has to worry about right now is reigniting inflation with what we have seen with higher energy prices. we will see volatility in the inflation data over the next couple of month ss. >> there is a chance for a soft landing or you think that's out of the question? >> a lot of people talk about a soft landing. what exactly does that mean? does that mean no recession? i don't like to use that terminology. what we see is a recession. we see a short and shallow recession. we think that will be the opportunity where the consumer will pull back. the fed will be able to take their, you know, foot off the gas. the economy will slow. we'll get inflation where we can get it consistently down towards the fed's objectives, but we just don't see it avoidable at this point. there's way too much factors. remember, we haven't felt the full effects of the fed's

tightening cycle and haven't felt the full effects of the tight lending conditions from the banks. this is going to weigh on the economy going forward. >> you say you have been building your cash position all year, and it was the rally and equity markets that was really keeping you up at night. are you ready to deploy some of that capital, and what is it that keeps you up at night now? >> it's getting close. we have seen almost a 10% correction in the broad market, more than 10% in other areas of the market in small and mid caps, so we are looking at two things. we want fundamentals and valuations to come together. right now, we still think that pe valuations on especially the large cap growth might be a little elevated, but the fundamentals are just now starting to really weaken in the market. we're starting to see confidence again roll over. these are things that we want to see them come together before we want to deploy capital. the other thing we would like to see is that earnings get a little bit more realistic for next year. earnings are still looking for about 10 to 12% up side for next year. that's not likely given our

expectation of a recession. what's keeping us up right now at night is the rapid move in interest rates and the rapid move in the dollar. when you see things happen at a quick pace like they have over 100 basis points in a short period of time, it tends to uncover some weakness in other areas of the market, and we can't really pinpoint that at this point. but it does always end up resurfacing. take the banking crisis in the first quarter of this year as one prime example. >> so if you are looking to potentially deploy capital. where are you targeting, where are you thinking maybe near the end? >> we'll look at the large cap growth area. there's a little bit more pe valuation correction there. i think the small and mid cap space, that's always the area that rallies the most coming out of a recession. markets will price in six to nine months ahead. we will look at that area as well. we have seen a bigger correction in that part of the market,

valuations are more attractive there as well. and then don't forget there is opportunities starting to emerge in the fixed income market, whether it's credit, investment grade, high yield credit. these are kind of the boring things that you can look at. but we'll look at both the equities side of the market as well as that fixed income side. >> okay. megan, thank you very much. >> you're welcome. we have a final check on the markets for us. the next time we're checking the markets, we're going to be at the delivering alpha conference tomorrow. i can promo it one more time. but for now, we're still here in the nasdaq. and here are the boards, up 117, triple digits again on the dow. nasdaq gaining back a little from pretty significant decline yesterday, but up 67 points. we'll look at the yield curve, the ten-year has settled, at least for the last couple of sessions. well, now it's not. it's below 4 1/2. 4.49. the two years formerly above 5%. a good year to take a look at

oil. $92 now. up 2% this morning. that's problematic, perhaps. take a look at the dollar for anybody that owns dollar denominated investments, and then the converse of that, some people would say bitcoin, which is closing in again maybe on 27,000. it's held above 26-7 this morning, almost 2%. join us at delivering alpha tomorrow. we'll be there. "squawk on the street" is coming up right now. ♪ good wednesday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber. bulls trying to regroup after tuesday's selloff. yields are lower. the ten-year still pinned to 4 1/2. government shutdown and strikes remain in focus. we'll get micron tonight. futures rally after the dow's worst day since march. s&p's first drop below 4,300 this quarter. >> plus