heading to trial this week. it is monday, october 2nd, 2023 and "squawk box" begins right now. good morning. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm becky quick with joe kernen and andrew ross sorkin. guess what? it's a new month. it's a new quarter. it is a fresh start for the markets. >> it stopped raining. >> and it's monday. yesterday was beautiful. let's look at what is happening. we were looking at green arrows across the board, but the dow fell below. s&p futures up 3. nasdaq up 32. it comes after the down week for

the s&p and dow. nasdaq gains which it saw on friday. for the nasdaq and s&p and russell 2000, it was the worst month in the year. for the s&p and nasdaq with the dow slumping 3%. nasdaq down 5.8% for the month. treasuries is the big picture. this is why we see the weakening. treasury markets are picking up. 10-year is now 4.74%. the 2-year treasury is up at 5.11%. mortgage prices are ticking higher. if you want a 30-year fixed mortgage, you are looking at 8%. check out the price of crude oil. crude oil prices with energy back on the rise. up to $91.50 for wti. brent at $93 a barrel.

joe talked about bitcoin. picking up to $28,300. up 4.4%. joe, the reason behind this is because gary gensler etf comments. >> i saw any government shutdown would delay any consideration for the spot etfs that everyone wants. >> because the s.e.c. staff would have been out and nothing gets approved. >> does that mean -- >> i think they are thinking about it. they have been thinking about it -- check your watch. >> that's a big move. andrew has asked why is it at 26. it could be 30. talking about the government shutdown. it was averted over the weekend. the bill provides temporary relief. emily wilkins has been working the phones all weekend.

what's going on? >> reporter: andrew, congress was able to keep the government funded over the weekend after kevin mccarthy did a 180 agreeing to work with democrats to pass a stop gap measure in te 11th hour. this continues the funding at current levels until november 17th and has $16 billion in disaster relief funding. it doesn't include ukraine or funding for the southern border. chuck schumer took to the senate floor and vowed that he would be trying to move forward on funding for ukraine. >> this is a bridge cr. temporary solution. not the final destination. we will not stop fighting for more economic and security assistance for ukraine. majorities in both parties support ukraine aid and doing more is vital for america's security and democracy around

the world. >> reporter: mccarthy said any funding for ukraine in the house needs to be paired with policies that limit immigration at the border. further complicating this debate, mccarthy is facing a treat to the speakership. representative gaetz is frustrated that mccarthy turned to democrats for the stopgap bill for the funding. democratic house leaders have not said if they will back the republican counterpart, but in a statement this weekend, they encourages them to vote on the aid for ukraine. a lot of dynamics here. >> emily, thank you. what are you thinking? >> i'm thinking we need to talk before we talk about who is going to be on. here's what i'm thinking.

mccarthy wanted to pass something that the republicans had no chance in the senate. like the last, he could say i passed. this come to the table. guess who blocked any possibility of that? the same guys. the same guys blocked that. then when that's blocked, he has no other choice. he does this. then they are mad about this. they say you can't do this. we know what these guys are doing. biden's number one issue calling gaetz his favorite republican. the speaker has to promise something for a vote. that weakens his stance and the republican party. the journal calls these guys jacovins. i looked it up. these are people during the

french revolution. the most radical group that isi ushered in the -- there's about eight of them. i don't know how this happens. they would say we're principled and this and that. we're spending too much. it is all true. >> matt gaetz doesn't like kevin mccarthy. >> for a lot of reasons. that's neither here nor there. in divided government, you have to figure out a way to do something. if some compromise as distasteful as it is, for republicans who want to cut spending, that is the way it is if you don't have the white house or senate. >> do you want a government or not? >> i'm going to hold my breath or blow the whole place up.

>> there is this movement to potentially oust gaetz. ethics committee. >> mccarthy will probably lose four. >> the question becomes -- >> are eight or nine. andy biggs and matt rose. >> ricky gervais hakeem jeffrie important person. >> call off the impeachment hearings? ukraine. >> ukraine funding. >> it was pointed out by congress member from florida and it helps democrats by weakening mccarthy further. >> the question is who would replace mccarthy? a year ago, steve scalise. he is fighting illness. >> you have the impeachment thing or another budget.

i don't know. >> the reason you see yields higher this morning on the ten-year is because this gets us down to november 17th. there are a lot of questions as to what happens. it is a huge surprise that kevin mccarthy was able to avert a shutdown. >> i talked to him last week with. i knew it was the only choice. the only thing. andrew, there is a company -- royal a. >> spelled differently? >> you don't know. i think you can say it. how about asshat? that is code word for the full. it doesn't mean anything. you use it in place. >> that's why i don't think you can use it. >> it's cable. it's cable. >> i know. >> we got bernstein coming. >> exactly. >> from the white house.

>> we have that. 8:00 hour. >> bottoms up. middle out. repeat after me. bottoms up. middle out. right. california governor gavin newsom will appointed laphonza butler to fill the seat of senator feinstein. in california, the governor has the power to appointed a senator to serve until the next regularly scheduled statewide general election in 2024. he said he was going to appoint a black woman. that is in keeping with that promise. the united auto workers and big three are still talking following the expansion of targeted strikes.

uaw president shawn fain telling members on saturday not to let messages from ford, gm and stellantis get them to give up the fight for justice. fain making the comments while meeting with workers outside the stellantis plant in ohio. the auto workers are trying to create doubt with the carmakers. bill ackman gettin apprppror s sparc. it is not clear that elon musk is alolooking for a deal with h. other companies that would work with sparc is mature unicorns. we will speak with bill ackman

at 8:00 a.m. it is the return of the spac. this is a different model. this came after the spac. the spac that would merge are universal and blocked by the s.e.c. he ended up buying that universal stake for his own fund. there were the rights that came with that which were different than the previous generation of spacs. this is approve by the s.e.c. we will see what he buys. he has a lot of money burning a hole in his pocket. >> did he get to save that or give it back? >> he gave the money back. there were interesting warrants which we will talking about which lead to this moment and can he go buy a big business. the question is what business does he buy? pe company? he threw out the idea that one day could elon musk take x public without going through the public issues?

that was the benefit of spac. i argue the problem with spac and they didn't go through the issues and this is worthy because we learned so many went public and probably shouldn't have. we will talk more about that. >> the comments he made about x. you do a deal with x and the question is the price. is that more or less than elon purchased? >> we should discuss with bill. there is a vote that has to happen. you have to vote in to the whole thing. i don't think at this moment that anybody is buying x for $44 billion. the question is are you buying for $22 billion or $11 billion or $5 billion? >> you do a deal with anybody and it is a question of price. >> this is him throwing out the idea. no elon. >> nobody is talking to each other. it would be illegal for them to be talking to each other at this

point. no discussions. when you see the headlines about ackman interested in x. he is interested. don't get excited yet. maybe we'll get excited about talking to bill about it. >> we talked so long. we can't talk about beyonce. that started what could be a trend. i was watching last night. >> the jets game? taylor swift? >> watching travis kelce. afterwards. maybe i could. it comes naturally. did you see the ads for the movie? phenomenal. >> smart marketing placement. >> 2:45 for taylor. movie chains can now make movies, but also studios can now own -- >> right.

the anti-trust department guy from the trump administration and he pushed for more competition and more competition like this. >> i can't believe amc is in the driver's seat with beyonce. amazing. >> you can talk about it. >> you want to tell people what you are talking about? >> beyonce is not going to let taylor be the only box office queen. the makers of the concert film of beyonce's "renaissance" world is in talk with amc. they are not commenting and taylor swift's movie is hitting screens on october 13th. the film is expected to top $100 million the weekend it opens. >> nobody wants to run against movies. >> it's crazy. >> it is crazy.

>> crazy that taylor's father -- i'm like forrest gump. rick brings up a question. that's in the history book. very strange. more "squawk box" in just a moment. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com.

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futures right now indicated in the red on the dow. the nasdaq and s&p continue to move higher. initially there is a warm and fuzzy feeling for the government to stay open. it didn't last long. let's bring in our next guest. this is out of the way. temporarily.

now we can back door the other things we have been worrying about. one thing we can -- none of us live forever. you can avoid death for a while, but it is eventually coming. if you have a soft landing, it doesn't mean there is not recession. soft landings only last until the next recession. that is a point you make. >> that's right. we are releasing our guidance to talk to clients. the main topic we are getting is can the u.s. avoid recession forever? the answer is no. the good news, it seems to us, the higher odds of the soft landing the next 12 months doesn't mean there are recession risks. it is elevated with 20% recession odds. that means to us that the third quarter is the high watermark for growth.

from here we slow down and see risks building. the shutdown, it seems, has been avoided for 45 days. we are still talking about it this month. we go back to paying student loans and elevated interest rates. we do expect a softening of the growth pace. eventually for a recession to happen, be it 2025 or 2026. >> and you point out we're at the sticky phase, maybe, of inflation. it gets harder and that means why would anyone think if there is a recession, why would they cut rates? >> that is where we would fade the concerns that inflation is sticky around 3%. we actually think the fed can hit the 2% objective. >> really? >> faster than they think they can. by the end of next year. it will take until 2026 to do so. that is because we expect the normalization of spending and

normalize service prices. then the lag effect is coming through for recent and auto-related prices. auto leases and auto repairs. that is why we are watching the risk of the uaw ultimately, we no longer expect the rate cut to happen in the first quarter. we expect it to start by the middle of next year. most importantly to be faster than the fed expects once it begins. >> do you think there is a chance we go up a point higher as far as rate hikes in the next year? >> based on the data of slowdown in growth and the water mark of 2%. >> do we stay here or go down? >> we hope we stay here this year and we don't do an

additional hike. there is a nearly 50% chance it could happen in november or december. most importantly, we're almost done -- >> higher for longer now? >> i think it is high for longer. not necessarily higher than we already are. in terms of how high is the conversation. 5.4% is not sustainable. >> when you say you look forward to rate cuts. what is the scenario for them to cut rates? will they be smart and say we'll cut before there is pain because we want to prevent a hard landing? i have a feeling the fed will not cut until there is a need for it. >> i agree. i think based on the latest press conference in september, they would be okay being behind the curve. what they want to see is inflation coming down and being sure it is on track to the 2%

target before they begin to cut rates. that is the beginning or middle of next year. it also means if you are late, you have to cut faster than you project. >> more damage in the meantime. >> perhaps. that's where, for us, one of the asset allocation questions we get is why not stay in cash? we have 5.5% cash rates nearly. for us, that's a dangerous place to be having too much cash. especially because yields are forward looking to the growth slowdown and inflation coming down and faster rate cuts. we really look to take opportunity of the ten-year at 4.6% because yields peak at three months after the last hike. we can lock in the yields now and benefit from the price appreciation and you could talk about double digit returns from

core fixed income. it is a unique opportunity. >> unless they hego higher. >> we are at the high water mark. they won't come down too much. we have to keep an eye on the value. >> gabriela, thank you. >> what do you think the mortgage rates are going to look like? i'm not trying to buy a home. >> i'm trying to buy a home. we mentioned 5.6. all of the discussions of the shutdown and dysfunction in congress are important because it means we're not going to solve the high deficit issue. it means there is a higher term premium. we don't think the ten-year comes down farther than 2.75. it is 80 basis points. >> that's where it has been for a long time. >> for a while. until we get a recession and the fed is forced to cut below

neutral. >> good news. >> i'm certainly not looking forward to it. >> nice to see you. thank you. coming up, a high profile tech ceo about to take the stand in the anti-trust google trial. and ftx sam bankman-fried about to get his day in court and those victims are speaking out. that's next on "squawk box." powering sustainable growth in a changing world. powering financial solutions that transform industries. powering innovation with access to capital. powering critical decisions with precise data and insights. powering seamless execution in evolving markets. we deliver our entire global bank

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dominance. there are questions if it could have gotten on apple if it offered more money. it will play into a lot of things we are watching closely. we are going to talk about sam bankman-fried with kate rooney in the room on her bir birthday. you will be here? >> i'll be here six weeks for the trial depending on the testimony. >> let's talk about the next chapter in the failed exchange ftx is starting tomorrow. sbf's trial is getting under way and now some are telling their story to kate rooney. >> great to see you. harrison resigned from his position at ftx two months before the implosion. he krdescribed a tense relationship with sbf.

i asked to describe the company's financial health when he left. >> i had no reason to suspect that ftx wasn't anything other than profitable and in great shape. sam was, you know, embarking on fund raising again. he said both on some internal all hands and extensionally that ftx.com had $2 billion in excess capital with the result of the raises. ftx had $600 million and in amazing shape. you think ftx is going to eat the world. >> some of the top employees at the time at ftx didn't have a sense of the actual financial health of the company? >> i can only speak for the people on the u.s. side. we had absolutely no clue. >> how is that possible? >> look, imagine yourself in our position. you are in a high ranking position, but not the ceo, do you think sam has made all of the public and private reporting

of the finances of the company. i should get all of the bank statements or access to all of those and run through those and see if i agree with the accounting. sam testified in front of congress he is getting public accolades from the top firms. should i distrust everything he is saying in those forums? i think everyone in that position would be a time to suspect something is wrong? >> if anybody knew the real financial health of ftx, who would that have been? >> i would have to think the closest inner circle, the people in the bahamas, and other founders had to know. >> we now know four people in that inner circle harrison describes have pled guilty to the chance of ftx. sbf has pleaded not guilty. you can understand how the warning signs went unnoticed. harrison was in the dark.

harrison is also one of the only ftx executives who pushed back on the leadership style of sam. a lot more on that in the documentary "the collapse of ftx insiders tell all." you can watch it on cnbc.com. >> he pushed back. what bothered him? >> the insular nature. sam had a group that lived with him in the bahamas. he felt like an outsider. he did not have access to sam and he felt he could not push back. when he did, he was silenced. he was one of the only vocal executives and left the company a couple of months before the collapse. >> i get it. this is fascinating stuff. we will watch this week. kate, thank you. >> thanks. >> i'll watch. thank you. coming up, kicking the can down the road at the end of the

day. government shutdown may have been averted, but we'll be in the same situation a few weeks from now. what's next for capitol hill? a big lineup today for "squawk box." peter orszag and bill ackman and mohamed el-erian. as we head to break, here is a look at yesterday's winners and losers. >> announcer: executive edge is sponsored by at&t business. next level moments need the next level network. and more business 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.

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all right. the government shutdown crisis is averted for now. the snenate passed a bill on saturday night to keep the government funding for 45 days. we have jake sherman with the latest here from punch bowl. jake, we left on friday and thought it was a foregone cl conclusion. this is a habit out of a hat that kevin mccarthy could do

this. we are looking at yields which are higher and that is because this is a 45-day reprieve. we don't know what happens to the speakership or a lot of the questions in the meantime. how are you positioning all of it? >> a few things to think about. number one, mccarthy said he could not pass a funding bill without something on the importborder and spending cuts. he passed a bill without anything on the border and no spending cuts. leaving spending for the next 45 days flat at 2023 spending levels. that's how he avoided the shutdown. over the next 45 days, or so, there is a lot of uncertainty around government funding. whether it is funding the war in ukraine or general government spending, it will be incredibly difficult for congress to come up with some sort of agreement with the senate. now, this all ties into mccar

ty's future. mccarthy probably cannot stay speaker with republican votes only. he will need democratic votes to keep him in the job. how that impacts the next 45 days and government funding going forward remains to be seen. it could pave the way for some bipartisan agreement between republicans and democrats leaving aside the more fringe members of mccarthy's party to make sure government funding is extended in 45 days without much fuss. >> hakeem jeffries is going to have a deciding -- he will would be the decider, so to speak. if they don't support mccarthy who finally told the extremists in his party to forget it and he is the adult in the room, what happens with all this? what do you think the democrats are thinking about this? >> the conventional wisdom for months is the democrats would

help mccarthy taccidly look at the other side. whatever comes on the other side of mccarthy is not as good for democrats as mccarthy. that is the general consensus. all that said, mccarthy doesn't have a lot of trust with democrats. he has built a good rapport with jeffries. among our sources, and the people we talk to, mccarthy has to give something up to earn democratic support. whether it is changes in the rules or something like that to make sure democrats have his back. there are a lot of ways for democrats to have his back without actually voting for him. they can vote to table the motion and procedural stuff which is not interesting. jeffriess has the biggest decision of his leadership.

one of the biggest decisions of his career. democrats are split. they don't need every democrat. they need 20 or 40 to take a walk or vote to table a motion to get rid of mccarthy. gaetz and the hardliners have said if democrats do that, mccarthy will be a speaker propped up by democrats. that is a sign there's not much cooperation in the republican ranks for the next year or so. >> are we going to be looking at bipartisan moves to get things done? i think part of the reason mccarthy reneged on the early the deal is because he could not get anything done with the caucus. i understand why he got to the position he did along the way. >> mccarthy has 200 people he can count on any day of the week. you need 218 to pass anything.

he can work with the hard right or democrats. he has tried to work with the hard right. it hasn't worked. they passed some the strict in congress because the hard right did not like it. he has to work with democrats or them. he tried the right. it hasn't worked. he can try moderate democrats. i don't know about bipartisanship. that is the chaoices faces. >> it is classic. they wouldn't let him pass the republicans version. when they blocked that and he does the only thing left, they say what are you doing? it is a catch-22. tough position to be in. it took 15 votes, jake, to get the speakership in the first place. maybe it makes him stronger. >> matt gaetz said -- >> when was the last strong gop speaker? gingrich? >> it wasn't paul ryan.

it wasn't boehner. gingrich had his problems. gingrich shifted with the winds. >> that, too. >> jake, thank you. >> thanks, becky. side note. guitarist al di meola from return to for offforever, is reg after suffering a heart attack on stage. h he expressed thanks for his fans for their support. he has been my idol since high school. almost since 50 years. i went to a russian federation party where he was performing in davos. he grew up outside inglewood

cliffs outside cnbc. he lives in new jersey. i spoke to his wife over the weekend. he is doing well. as well as expected. it is good he was on stage. he got help immediately. it was a serious heart attack. 69 years old. he's a young guy. the way he plays guitar, there's a lot going into it. we hope he is touring again. you were in davos sdplc. >> you introduced me to him. >> we were all there. >> a shocker when i saw that. we ran into him in munich with the family. liesman and i saw him. steve's a guitar player. he is a phenom. good luck. >> all the best. >> quick recovery. coming up, the irs found that leak that exposed tax returns of the thousands of

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and more in prospectus at invesco.com. after a two-year investigation, a suspect has been charged with leaking tax returns of wealthy tax returns. robert frank joins us with more. people are too much? >> the leak in the article has a lot of attention. federal prosecutors charging the irs contractor with leaking tax returns of thousands of wealthy tax taxpayers. charles littlejohn of washington, d.c. faces five years in prison after unauthorized disclosure of tax information. he stole returns between 2018 and 2020 while working on a contract. names were not released in the filings, but propublica field a

st filed a story as well as the new york times. ken griffin, the ceo of citadel, sued the irs after his taxes appeared in one article. that suit is still active. griffin is saying, quote, he continues to be frustrated by the irs failure to protect personal data. the irs saying in a statement late friday any disclosure of taxpayer information is unacceptable and it is improving its technology and data protections with the new money from congress. >> does this change that suit? does it make it stronger for ken griffin? >> what ken said is the irs had been named for years as having inadequate protections for taxpayer data. that fact stands. >> by default, his information was disclosed, as were all of the others. do the other people bring cases

as well? >> that's the lead case. you know, the question now is what is the irs do with the $80 billion they are getting from congress to better protect the technology? this is an agency that still uses microfilm. they have over 10,000 contractors. he worked for an independent contractor. not a lot of good data protection. how do they improve that? >> a leaky couldrin. the trial of sam bankman-fried starts tomorrow and we will bring you the latest on the role of his parents. when "squawk box" returns. (♪♪)

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

carbon foot fingerprint print there in times square. u.s. equity futures at this hour are a mix. the dow's now down, the two others up about 26 points or so. the s&p is flat. we'll take a look at treasuries, which i guess if the government shutdown is -- you could see that either way, it means the economy doesn't slow. so maybe rates stay high. 61 on the ten-year, and 5.1 on the two-year. oil was right around 90, last i looked. 91, it's up a little now. up a percentage point, and then bitcoin started yesterday during the day, it was down in the low

27s now, and you can see above 28,000, up almost 4.5% this morning. >> nbitcoin, the criminal triem of sam bankman-fried set to kick off tomorrow. the former ceo facing seven counts of fraud. the next guest has been following the fallout closely. it covers the unique relationship between bankman freed's parents and how they played a role in all of this. a preview of what to expect when the trial begins. good morning to you. >> hi, good morning. >> it was a fun story. you talk about the role of the family and you talk about the role of these parents. they have not been charged in this case. i've always been curious, do you think that they would be, or what do you think their real role was in this? there was a suggestion in the piece that they had some kind of

role but not necessarily that you've put it all the way there? >> well, i think their role, their most important role regarding sam was the way they raised him, which was pretty unique and interesting. he was treated as a genius, very special intellectually precocious kid from the beginning, and they are both very accomplished themselves. they're professors at stanford law school, huge bodies of academic work that both of them have produced. and they really went out of their way to cultivate his intellectual gifts as a kid. he ended up growing up in an environment where he felt that he was very smart, the world would care a lot about what he had to say, what his contributions would be. to be perfectly honest, i don't think they intervened too much with what he was doing, certainly at the beginning of his career, they really felt confident that he was going to find some very important calling and pursue it. so i think you could make the argument that maybe they should have intervened more early on,

and -- >> well, the question is should they have known to intervene and could have they. you went on a walk or a hike with his mother. if i remember there's a quote in the piece that suggests that she could never really see him doing anything wrong. in some ways you describe the way you like a lot of parents to make their kids feel in terms of making them feel special, everybodimy wants to feel speci. >> sound familiar? >> when does it go too far. >> that was one of the most powerful moments i experienced with his parents. i'm a parent, probably most of us are parents. we've all been shocked by things our kids have done. i certainly remember as a teenager my parents being startled to discover certain things i was doing. yeah, when i first read about this i was stunned. i went to my son, and i said, you know, like, sam, is any of this true and you know, it was remarkable to me that she told

me she never even had to do that. she never confronted him and said, did you do any of these things? she told me -- >> but they also benefitted financially, which is the other issue. all of may have been surprised by thing ours kids have done. none of us has benefitted enormously financially from those same mistakes or outright fraud. >> you are right. they certainly did benefit financially and socially and in their other activities. barbara had a political action committee that was very successful. that received support from sam and his co-workers. joe was directly working for the company at the time. to go back and time, i do think at that time they felt that their son was this incredibly successful multibillion dollar tech mogul and the idea of taking certain things from him was perhaps not completely outrageous. >> we're going to have to run. it's a great piece. my question to you is do you

anticipate either sam and/or the parents testifying in the trial? >> i think there's a strong chance sam himself will testify. i mean, he's in a little bit of a losing situation either way. if he doesn't testify, his cooperators are going to testify for him. and if he does, we can imagine things getting very spicy. >> what about the parents? i certainly have heard no indication that they will be called to testify, but they are not out of legal peril themselves. >> sheila, it's a great piece. ns last week's "new yorker." you can get it online and anywhere you buy "new yorker." thanks. coming up this morning, peter orszag taking the helm of lazard as the ceo. he will join us for an exclusive interview. that's next right here on "squawk box." ♪ discover the magnolia home james hardie collection. available now in siding colors, styles and textures.

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good morning, everybody, stocks set to kick off a new month and a new quarter after the s&p 500 notches its worst month of 2023. we'll hear from lazard ceo peter orr sa. what's next for washington, the 2024 presidential race and much more. and the united autoworkers and the big three are still talking following the expansion of targeted strikes. shawn fain's new message for those on the picket line is coming up. the second hour of "squawk box"

begins right now. ♪ good morning, and welcome back to "squawk box" right here on cnbc. we're live at the nasdaq market site in times square. i'm andrew ross sorkin: show you u.s. equity futures at this hour. if we opened up, we'd open down on the dow off about 15 points. the s&p 500 up marginally, nasdaq up about 27 points. let's talk treasuries right now. we were talking about mortgage rates a bit ago. the ten-year sitting at 4.633, the two-year at 5.106. most of the mortgages i've seen have been over 7 these days. >> i saw l8%. even for people with a decent credit score you can land at 8% for a 30-year fixed.

>> energy complex, wti at 91.57. >> and a fire alarm going off notwithstanding, congress was able to pass a stopgap funding bill to avert a government shutdown. em em emily wilkins joins us now with more. >> absolutely crazy weekend at congress, the fire drill, the s shutdown. at least for now, the government is funded, but this is only going to go until november 17th, and so congressional leaders now have to race to pass those 12 bills that fund various sections of the government. right now the house has only passed four of those spending bills, and of the remaining eight, one failed in the house last week, and two have yet to finish clearing committee, which is kbbasically the first step f any of these bills. all the bills in the house are packed with a lot of conservative priorities meaning that speaker kevin mccarthy is going to have to keep his

conference united to pass these pieces of legislation. in the senate, all 12 spending bills are bipartisan. they've all passed committee, but none have passed the floor. going back to the house, progress on the bills could be delayed as congressman matt gaetz has vowed that he's going to move to oust kevin mccarthy from leadership. now, we know about a dozen republicans have indicated that they will also move -- move to remove mccarthy, but they're only going to be successful if democrats join them, and we don't know yet what democrats are going to do. mind you, mccarthy still has the support of the bulk of his conference, and lawmakers like republican congressman brian fitzpatrick told nbc over the weekend, that spending time fighting over whether mccarthy should be speaker takes lawmakers' attention away from bigger priorities. >> it's going to grind operations here to a halt. we have a lot of threats. china, russia, iran, we have internal challenges here in the united states with our border, with inflation, with crime. that's who we should be focusing

on, not this. >> it remains to be seen what happens with mccarthy's speakership and government funding, but there is a real possibility that come mid-november we're going to be right back to where we were last week with lawmakers needing to move another short-term funding bill. guys. >> yeah, unscheduled fire drill, emily. here's the post's take on it. does this look like a door handle? congressman from the bronx said he thought that would open a door. he was a high school principal, a school principal that actually did have fire drills. so he probably -- that probably isn't a real light, not exactly what he was trying to do, i don't think. >> terrible. it's atrocious, it's disgraceful. >> against the law. >> just say it, it's disgraceful, it it is what it is, what it looks like, disgraceful. >> right. >> coming up in just a few minutes. maybe we'll ask governor hogan about it, former governor larry

hogan joins us to -- wow. joins us with what's next for congress and much more. he has a different hair style, shall we say at this point, but we'll introduce him as larry hogan so you know who he is. he doesn't really look like that now. we'll talk about what's next for congress and much more. let's get to frank holland with a look at this morning's premarket movers. >> good morning, becky, good morning andrew and joe. we're going to start with rivian getting an upgrade from evercore. it has the vertical integration to potentially compete with tesla. they combine hold about 40% of the global ev market. shares are up 40% right now. a price target $30, about a 20% upside from where it's trading r right now. nvidia called the top shovel supplier by analysts and goldman sachs. they're adding the chip maker to its conviction list and saying data center demand is a major

tailwind. it also says nvidia has a wide mote with ai chips. shares are up more than 200% year-to-date. we're also looking at fedex getting an upgrade to positive by susquehanna. analysts are bullish on cost cutting efforts and save pricing power for e-commerce remains strong. you can see fedex shares are up almost a half a percent in the premarket. they're up 2% since u.p.s. announce add tentative deal with the teamsters. becky, back over to you. frank, thank you very much. we'll see you a little later this morning. >> thank you. hedge fund billionaire bill ackman getting approval for his special purpose acquisition rights company. it's called spark, and he's looking for a deal. according to "the wall street journal," ackman's pershing square showing some interest in an investment deal with elon musk's x corp., formerly twitter to take that public. we'll see. other companies that would work

for spark include private equity-owned businesses and mature unicorns and we should say there have been no talks. this is just bill saying aloud that that's the kind of company he would like to buy. we'll ask him directly about all of it is and more when he joins us at 8:00 a.m. eastern time. >> he could give a quick yes or no response for any company. >> the benefit of any spac or the old spac was that you could say, yes, no, we can just do this, and in fact, the way this is structured, not only can you say yes or not, the whole thing either happens or doesn't happen, and we can talk about sort of the specifics of it. but that's ostensibly the benefit of the program. >> do you need a certain percentage of the rights holders to vote? that's the thing some people run into trouble with, getting people to vote, not just vote yes but vote. >> we got to talk to him directly about specifically how it works. it's a little bit more complicated than just that, i think, but i don't want to

misspeak. when we come back, lazard ceo peter orszag joins us to talk market, fed, and so much more. squawk returning from times square after this. >> announcer: this cnbc program is sponsored by baird, visit bairddifference.com. - [soldier] take a look at this! - they've left us a gift. - [soldier] i think we misjudged them. - i love horses. (birds chirping) - [soldier] we should open the gate. - let's see what charlotte thinks. - [narrator] at crowdstrike, we monitor trillions of cyber events to detect threats and prevent breaches before they happen to keep your business from becoming history. we stop cyberattacks. we stop breaches. we stop a lot of bad things from happening. crowdstrike. protection that powers you.

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lazard, our next guest will now head the firm, he's promising to double the company's revenues in the next seven years. details of which he laid out in a public memo to employees a couple of weeks ago. here now with an exclusive interview to discuss his new role, the state of government, the markets, the new ceo of lazard. and former director of the office of management and budget of president obama. will you always have that as a title or we should just call you head of lazard? >> we can do it either way, but i'm the head of lazard, and that's exciting going forward. >> immediately did the rule of 72 in doubling it in seven years. 10% a year growth in revenue. >> he's got the math thing. >> he's got the math thing. >> that sounds good. i don't know if that's aggressive. i think that's doable for you with your smarts. >> how doable do you think it is in the next -- what do you think the next two or three years are going to look like given where we are in the economy and what seems like a challenge ahead? or do you think actually not?

>> well, we're obviously in a quiet period for immediate quarter, but looking forward, we picked 2030 on purpose because it will take some time for the market to come back, but we do think -- i was on this channel maybe a month ago saying that we think that m&a market is bottoming out. there will be a lag before there's more announcements, and then there's another lag before the announcement becomes revenue. >> what's the biggest shift you're making? >> we're upping our ambition and so on both sides of the business, more of a focus on growth including relevance, revenue, and returns, and i think there's a lot of opportunity on both sides, both -- >> what does that mean in terms of fundamentally changing the company. >> first focus on culture, being commercial and collegial is the key, but it means that we are looking for opportunities on both sides of the business to expand what we do. >> and who do you think your biggest competitor is? >> it depends on the asset management side of the business.

there is no one else that is like lazard. on the advisory side of the business, we compete not only against the top tier, but there are, as you know a searies of nw independent firms. there's no one who has our combination. >> so -- >> or our history for that matter. >> we've been talking a lot this morning about the government shutdown. that didn't happen, you've spent a lot of time with government thinking about that. did you think we were going into a shutdown this weekend? >> i did. i think this is a gutsy move by mccarthy to -- i think it must have been that he judged that he wouldn't be any better off after a week or ten days of a shutdown and may as well bite the bullet. what's interesting here is there's at least the potential -- i don't say likelihood -- but the potential for a bit of a new era of depolarization if he has to rely on democrats to keep his job. you may see a bit more of the

middle governing. >> that would be nice. >> could he be a speaker of the house instead of a speaker of the gop? what a concept. i think he needs to be -- i have a personal relationship and he thinks long and hard about things, but that took a great personal risk to do it that way. >> it was a gutsy move. >> but it had to be done. >> yes, yeah. and look, coming back to the point, let's hope the country obviously has -- i just saw paul ryan last week and reminded him he introduced me at my confirmation hearing as budget director. can you imagine that happening today? not him personally but a republican congress -- >> what do you think the chances are that mccarthy gets voted out, though is this. >> again, it's hard to tell. what i hope happens, though, just to be blunt is i do hope this democrats step forward and keep him as speaker because -- both because i don't think there's a better alternative right now, and because there's at least the potential --

>> he doesn't want to be their lackey. >> this is what moodies says, they may downgrade the debt rating for the united states if we can't have some sort of cooperation in -- a government that actually governs, you know. this would go a long way if you can actually get things done towards appeasing some of the credit rating agencies and the problems they see with us. >> would you -- would you advise the democrats not to just rake him over the coals with concessions for what they want, or fish got to swim, bird's got to fly, they got to do that, right? >> personally, i think -- i'm not in government anymore, it's their job, not mine. >> from my perspective, i think this is a moment to be bigger and not demand -- >> that will never happen. >> let me ask you a serious question, how would you think about funding on the ukraine issue? because that's sort of a fundamental -- >> or the border. >> sort of at the middle. >> or the border, both. >> by the way, there's more

bipartisan support for the border than ukraine at this moment. >> on both issues, let's talk about ukraine for the moment. crucially important, our standing in the world in my opinion, relies in part on our continued support for the effort there, and i am hopeful that as part of the machinations -- again, i'm one step removed now -- there were also discussions as i think there were about how to get funding for ukraine done over the, you know -- >> in the next 45 days. >> the next 45 days. >> what about at the border? >> i'm not as sure on the border but we'll see. >> jay powell at this point, what is the house view at lazard about what he's going to do over the next 12 months? >> i don't think it's the house view. i think he's said pretty clearly he's not -- he's going higher for longer. as i think you may know, i think that's a mistake myself, but i think he's been very clear and the markets are now only -- only now starting to believe him.

he's just going to stay there. >> if he stays there, by wait, doesn't this make your job, now that you're running lazard, that much harder? this is where i was going about what the next year or two looks like. if he really is that high, it's going to impact equity prices. it will impact the confidence issue you deal with when it comes to m&a, ipos, the whole sort of gamut. >> agreed, although, i think the bigger headwind has been the uncertainty over the rate path as opposed to the level. if rates were high but steady, it's not as good for deal activity and other forces as if rates are low. but if they're steady, that's actually -- >> but if they're steady and they stay high, do they ever break something? that's the other component part. we've had a number of guests come on and say at some point, even if they're steady, if they remain at these level offs on a persistent basis. we're talking mortgages this morning, the commercial real estate deals. >> holding maturities.

>> the ten-year that all of a sudden roll off. >> this is what we need to worry about with regard to the economy. the consumer has held up to date. the impact of -- the lagged impact of all the rate increases that are still yet to kind of hit the economy because that takes some time is what we need to be watching for. in addition to what you've identified, you are seeing an increase in delinquency rates across a variety of different credit classes, and that's something to watch for, and the savings rate, that covid savings buffer for the bottom 80% of the population, that's gone. so the real question becomes over the next year or two is how well does the consumer hold up? >> so what do financial services companies look like in a presidential election year, historically, i'm sure you've looked at stuff like this before. i'm sure there's some people who say i'm going to wait this out. i was thinking about doing a deal. i don't like this regulatory environment. maybe i get lucky and somebody

else is in this office a year from now, or maybe i'll take my chances, do a deal now, see what happens in court, et cetera, et cetera. how do you feel about that and just the confidence -- talking about urn cencertainty, are we moment of uncertainty? is a second term different than when there's the potential of a full rollover. >> the historical precedents aren't necessarily that infor informative. today's political environment is much different than what we've seen in recent history or at least post-war history. on the regulatory front, i think there's at least the potential that what we're seeing is a more targeted approach. it's not necessarily that much less aggressive, but it's more targeted, and i think boards and ceos are starting to realize that many of the previous deals that would have been approved that have been challenged in recent years either the authorities are now kind of more

focused in letting these go or they're going to litigate them and win because if you look at microsoft act vivision, if you look at the amgen horizon case, et cetera, there's at least a little bit more clarity that some of the vertical deals that have been challenged in the past are either not going to be challenged or you're going to litigate and win. >> what do you tell clients, should they approach this, like, microsoft who said we're going to do whatever it takes to get this deal done. we will make any concessions to the regulators, or do you approach it like amazon is now approaching things with their case. we're not making any concessions because that just weakens our hands. >> i think it depends on the facts and circumstances, obviously. there are -- i think there's a growing willingness to litigate given the track record now -- >> ftc doesn't sound like -- you can make any concession. it doesn't sound like it's going to matter to them. >> is the private sector -- do you think that lina khan and her

appointment has been a positive thing for humanity long-term? >> that is a big philosophical question. >> what do you think? guilty until proven innocent, but for every -- it's a new way of thinking about things. throw so much up against the wall, maybe someday you win a case. >> i think again, what needs to happen, i think it is happening, that deterrence effect if that's what you want to call it gets weakened if you bring too many cases and lose them. >> a negative, even though she's -- >> so i think we're at one of those moments. i think we're at one of those moments where the deterrence effect is changing. >> peter orszag and the new head of -- we're not even talking about omb anymore, it's over. lazard is it. >> there we go! and you want to pay attention to this next store y, peter, you'ra birken stock guy. >> you owned a pair, right? >> by the way, they're now fashionable. >> when i owned them they weren't. when i owned them they were not fashi

fashionable. >> they are fashionable in boulder in the '70s. breaking news, yep, i've given it away, about bier birken stock. >> are you wearing them with socks or not? that is the question. >> oh, yeah, i'm a big sock birken stock wearer. the moral of the story is don't throw anything away. the early 2000s are cool again, i'm not a passion person. i'm an ipo person and this company has moved ahead with its ipo with an amended -- that kicks off its road show. these new documents reveal that birken stock and its selling shareholder will raise as much as 1.6 billion by selling 32 million shares between 44 and 49 apiece and more than $600 million of that deal is already claimed by cornerstone investors who have indicated they'll buy in at the ipo price. at these levels birkenstock's

valuation will be as high as $9.2 billion in an ipo on a nondiluted basis. today's road show was almost th thwarted by the government shutdown. when the process of an sbc closure looked like it would happen over the weekend, they tried to move it up to friday but weren't able to get those final t's crossed in time. that's according to sources familiar with the matter. but when congress averted the s shutdown birkenstock was able to move forward with its original plans. the company traces its roots back nearly 250 years, but only two years ago birkenstock was acquired by the private equity firm el catterton and the family office, the founder and billionaire of lvmh birkenstock showed top line growth of 21% for the first nine months of the year, although proftds did decline, i am told the company is targeting a listing day in

the middle of next week from the nysc under the symbol b-i-r-k, birk. >> thank you very much. when we come back, microsoft's ceo sasha nadella is set to testify as a witness in the google antitrust trial. we have the details after this break. stick around if the 8:00 hour, we have hedge fund titan bill ackman, he will be our guest. he's looking to do a deal with privately held companies telling "the wall street journal" that he would consider a transaction with elon musk's x. kind of threw that out. andrew's going to push deeper into what he means with all of that. we're going to hear all about it at the top of the hour. "squawk box" will be right back.

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godaddy was able to provide everything that i needed. the whole image of who i am and what empire is is presented through my godaddy website. ♪ microsoft's ceo saasha nadella set to testify. >> good morning, joe, we don't know what microsoft's ceo zach ya nadella will say today, but we do know what the u.s. government hopes he will say that google is edging out search engine competitors like microsoft's bing to make the case that google has come to dominate the search department

illegally. the department of justice is going to need nadella to have a good outcome. google is arguing their search product is better than the one microsoft offers. the ceo of duck duck go he's already testified in the case arguing that google is, in fact, a monopoly and that duck duck go was unable to negotiate with companies to make its search engine a default because of the enormous payments from google to the companies duck duck go was trying to negotiate with. now, one of the biggest points of contention in this trial so far has just been the enormous amount of secrecy in all of this with much of the testimony and many of the exhibits being kept out of public view. "the new york times" reported that before opening statements began on september 12th, google filed 35 motions and responses in the case and nearly two-thirds of them were l not public. the biggest and most important number in this case, the exact number of billions of dollars that google pays apple to be the default search engine is going to be kept secret too.

it's hard for the public outside looking in to get a sense of what's really going on here. pay attention of course to the irony of a microsoft ceo testifying in an antitrust case. remember the big microsoft case from the '90s, now microsoft testifying on behalf of the u.s. government. back over to you. >> you know, we heard recently from steve ballmer who thinks he -- he's still the largest shareholder in microsoft, lived through when microsoft was being investigated for antitrust. he said he thinks there's a very good case on some of these issues. do you think nadella is going to be outspoken or do you think ballmer is always more outspoken because he's very clear about telling his perspective. he's not in a position of running things in a management position so he has the freedom to do that. >> ballmer is obviously an outspoken guy, just his personality, that's how he is, and he's got the freedom to do that now. nadella, he's going to have to be a little more cautious.

a lot of corporate lawyers have pored over everything he's about to say. i would expect an approach a little more cautious. we'll have to wait and see. we don't have any sort of inside heads-up from microsoft as to where they're going to go with this. we'll wait and see. we're going to be down at the courthouse later this morning. we'll try to talk to him as he arrives. we'll try to talk to him as he departs and get a sense of what his thinking is, imagine microsoft's position here. they definitely want to open up the google monopoly if it is that. at the same time, you know, you don't want to empower the government too much on these things. then, of course, you could face the consequences as well as microsoft already has a couple of decades ago. >> eamon, thank you. we'll be watching later today. still to come today, congress passing a last-minute short-term funding bill to avoid a government shutdown. we will talk the latest out of washington with former governor larry hogan. don't miss our interview with bill ackman coming up in the next hour.

stay tuned, you're watching "squawk box" and this is cnbc.

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congress taking it down the wire sending a government funding bill to the president late saturday just before the midnight deadline, but the

agreement only providing temporary relief. joining us now, former maryland governor larry hogan. governor, it's good to see you. >> great to be here. >> if we spent all our time talking about shutdowns, i guess we sort of missed the bigger point, and that is the environment that we find ourselves in right now. what did you make of the solution that speaker mccarthy came one, and what does it mean for his future as speaker do you think? >> i was really pleased that speaker mccarthy actually showed some leadership and worked hard to try to avoid the government shutdown and worked across the aisle with democrats in both the house and the senate. you know, these kind of handful of renegade republicans led by matt gaetz, we're really trying to, you know, drive the car off the road, and it's not great for the republican party or for the country. i mean, this is something that happens seemingly over and over and over again, republicans and

democrats can't get their act together, but they're threatening to get rid of him if he works with kdemocrats it's ludicrous. 70% majority of democrats in both houses, we balance the budget every single year. you have to work across the aisle and try to reach a compromise. so i thought mccarthy did a good job. it's only temporary for 45 days. it took us away from the brink, but we're still dealing with the underlying problem, and you know, you got this kind of lackey guy that seems to want to ruin the republican party and the country. >> there's some personal animus there, you talk about matt gaetz, obviously, there's some personal things there too, but the other gentleman can always fall back on the high minded principle that we're at 33 trillion and my constituents elected me to do whatever i can to stop the -- what they view as just out of control spending. >> it's absurd that we haven't passed the budget in so long that we continue to kick the can

down the road. this is no way to run a railroad. however, it's better than the alternative of shutting down the government. i agree, the underlying problem needs to be fixed, and somehow, some way we've got to actually have honest, real discussions about what we do about this deficit. you know, i came into my stay with a $5 billion deficit, turned it into a $5 billion surplus working with democrats. >> how? >> we had to make some really tough choices on the budget, cut back on some things that were not that comfortable to do, but also we generated more revenue. >> how? >> by growing businesses. >> by raising taxes. >> we cut taxes eight years in a row. >> how can you cut taxes and raise revenue -- that's called trickle down and that doesn't work. >> it worked really well. all the businesses, jobs, and taxpayers that were fleeing the state started coming in. >> i'm devil's advocating. >> i got the sarcasm. >> by the way, it works on a state basis. doesn't always work on a national basis because you can --

>> that's all we got. >> entitlemented. >> >> you got trickle down in the private sector or trickle up. >> what we really have right now is divided, divisive toxic politics in washington where nobody ever seems to get anything done, and most americans are fed up with it and they're concerned about this election coming up. they don't really think republicans or democrats are working to solve problems. >> what's the fix, though? does this have to be done in the primaries before hand? how would you send a different message? >> one of the most strange and interesting political processes i've ever seen, but both parties seem to be losing touch with the average american, you know. for example, joe biden's messaging about bidenomics and there really is no inflation problem, the average american doesn't feel that. they feel like, hey, housing costs are up. the cost of groceries is up 25%. >> people are now saying -- -- >> they're telling them everything is great. >> they hate the fact that nobody will work together to

even try to come up with bipartisan common sense solutions. there's no easy answers. but they've got to -- you know, they elect people to go down there and do the hard work ask they're not doing hard work. they're playing politics. >> can you explain the popularity of president trump? >> you know, it's hard to explain. people come up to me, can you explain why this is that your party's off the rails? and i say, no, i really can't explain it. it's about half of the republican base that still likes trump. 35% are completely locked in on trump, won't even consider anyone else. >> what do you think that's about? >> i think it's about, you know, trump -- they like the fact that he rails against, you know, the swamp and the deep state and he doesn't talk like other politicians. they think he's standing up for them, but about more than half of the republicans want to move on and find another candidate. the problem is they've got 11 choices. >> it was unfortunate in the last election, unfortunate in the midterms that the door is open for conservatism and republican policies because of

biden's weaknesses across the board, and the democrats had the same problem. they had bernie in the lead, cliburn decided that's never going to work. so they marry this elderly gentleman at this point, and they're stuck with him without -- and kamala is waiting in the wuings. >> biden and trump are the two least popular presidents in american history. 70% of people do not want either one to be president. they do not want a rematch, and that appears at this point to be the likely scenario. i don't frankly think that democrats should nominate biden and i don't think the republicans should nominate trump. >> supposedly glenn youngkin is meeting with big donors. if he -- it's a weird election down in virginia on an off year, but if he secures the state legislatures for the republicans, does that open up -- >> he's only been in office -- he's only been in that business for two years. is that good or bad? >> we've got 11 candidates to

choose from, six of my former gubernatorial colleagues. i don't know that a seventh governor or a 12th candidate is going to make a dudifference. i'm hoping he's going to be successful, but i don't think there's any chance that he runs. the filing deadline for the first state is october 9th. a lot of talk about after the election or this and that, i'm not sure him getting in the race will make a difference. >> the question is whether the republicans could run another candidate that could win in a general election if you lose all the trump supporters. same for biden, if somebody else runs, both of them have kind of taken extremes and tried to marry them together to have a coalition. >> that's why i didn't run for president, even though i had the highest approval rating of any governor in america and successfully won over independents and democrats and republicans, i didn't want to be part of this multicar pileup. and i didn't think one person could take on the trump numbers. i'm hoping we can narrow the field down to --

>> who do you like? >> a couple. i think governors have the best training ground for being president. there are six of them in the race. but i think -- i want to see somebody stand up and show me something. >> do you like the bergum. >> he's a smart business guy that made a billion dollars. >> nikki haley? >> i don't think he could win. >> nick do you think nikki haley could win? >> nikki haley had a really strong first debate, and she looked good. stumbled a little bit in the second debate. she's dropped rather than gone up. she started to go up, came back down. >> ron desantis, possibly? >> i think delawareesantis he's five or six reboots of his campaign. he started with the advantage, name i.d., 24 hour fox coverage and he's continued to stumble. i think it's getting to be close to over for -- >> i imagine you'd like chris christie even though his numbers -- >> christie's a great friend.

i like him a lot. i like it that he's throwing out the punches. he's the only one prosecuting the case against trump. it's reflected in the numbers. none of them are really getting traction and that's frustratiin to me. >> we're just hurdling towards that -- those two candidates, we really are. >> i'm just hopeful that something happens. i can't tell you what it's going to be. if you look back in history, six months is an eternity in politics. hillary clinton was going to be president at this point and barack obama won iowa. >> almost up to that night it seemed like. >> you're talking about -- >> on the primary. >> barack obama and hillary clinton. >> it's not looking great. >> governor, thanks. >> thank you. >> but you're out. what'd you call it? a multicar pileup. >> multicar pileup. that's what happened in 2016. people wouldn't get out we felt got to get some people out. >> thanks for being here today. >> thank you very much. great to be with you guys. when we come back, talks between the uaw and detroit's

big three automakers continued over the weekend. we've got the latest from the ck lines. that's next. "squawk box" will be right back. (vo) while you may not be running an architectural firm, tending hives of honeybees, and mentoring a teenager — your life is just as unique. your raymond james financial advisor gets to know you, your passions, and the way you help others. so you can live your life. that's life well planned. this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq,

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phil lebeau joins us now with more. time's flying by, phil. >> and i think it's going to continue, joe. i don't think we see a resolution anytime soon. what we saw on friday was just how far apart the big three are relative to the united autoworkers. so you had gm and ford both having new plants that the uaw said, you know what? walk off the job, which is what workers did at noon. there are now five u.s. final assembly plants. two for gm, two for ford, one for stellantis. keep in mind, the most profitable lines in terms of the vehicles being produced, those continue. right now there are approximately 25,000 uaw workers who are now on strike. they're spread out across the country. most of these facilities that you see aside from the final assembly plants, they might have 100, 200 people at parts distribution centers. use look at the shares of the big three automakers,

stellantis, the parent of jeep and ram and dodge, you look at them right now, they have averted or avoided another strike. that happened on friday when they came to the table at the last minute with an offer that included adding cost of living adjustments to any deal that's ultimately reached doesn't mean that we're going to see a deal anytime soon. they avoided being called out on friday. gm and ford, oh, man, friday was a day of gm and ford saying these guys, they're not in this right now to solve this. the implication is that this is premeditated, that the uaw has dragged this out, they're not at the table, and what happened when the uaw leadership turned around and commented on it friday afternoonm, shawn fain said jim farley is a liar. we're at a point where they're calling each other out publicly. we're nowhere close to this being resolved. >> yeah, it's -- i guess it's never nice, goes back and forth

in these situations. that seemed to be descending into -- into some, i don't know, acrimony as you said, liar, huh, phil? >> yeah, he said he's lying. he called him a liar. that's basically it, and he didn't flinch on that. i mean, he basically said jim farley wasn't at these negotiations after jim farley said, hey, i've been here. so you know, that's where we are right now. >> does not sound like room for a deal when you've got them calling each side liars. >> no. >> becky, i've said this for some time, i don't think we're close to a deal anytime soon. and that's not a reflection on the desire of some of the big three executives. i think they want to get a deal done. i think shawn fain realizes he has leverage right now. he can push them further. he now has stellantis saying, okay, we'll do cost of living adjustments. >> why is shawn fain saying don't let the big three come

between us, between the membership and the union. he must be feeling some pressure from some of the workers saying hey, this is a pretty good deal. why are we continuing to push? >> he also said that on the line in toledo. some of those people have been walking the line now for three weeks. you would say that. they want a deal, they want to go back to work. >> a 30% raise would get back to work. >> yeah. >> all right, that's where we're at. >> where we are. all right, thanks, phil. coming up, bitwise launching two regulated ethereum etfs today, we'll speak to the chief investment officer about the new products in the digital currency market next. and then at the top of the hour, pershing square's bill ackman joins us in the loosest sense of the word, "squawk box" will be right back.

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but you get used to it. try these. they're noise cancelling earmuffs. i stole them from an airport. it's always something with you, man. great! solid! -greek salad? exactly! don't delay the game with verizon or t-mobile 5g home internet. catch it on the xfinity 10g network. welcome back, everybody. the largest fund in america has two etfs that will start trading today. they are an equal-weight strategy etf. joining me is matt hogan. this is a huge shift for the sec. they've been pretty hostile to any offerings that come along with digital assets like this but they lost the case and this is a result of that.

>> it may be the result of that, it may be the result of the passage of time butch it's absolutely true that they've changed their tune. we've had really constructive dialogue with the sec, giving investors their first ever access to ethey reum. >> the beautiful things about futures exposure, a, it's regulated, and it's highly correlated with spot designations. it's really a great tool for getting exposure today. >> why would somebody own this

instead of owning bitcoin or ethereum straight out? >> a lot of people want the convenience of buying it in their brokerage account right next to their stocks and bonds. it's particularly important for financial advisers, ira and investment officials. an ira can't buy it for a client but they can buy it in a wrapper. it's a major unlock for those people money. >> what about the bitcoin etf? there are at least ten companies who have applications pending. who is going to get it first? the first mover advantage is expected to be pretty significant. >> it is massive. bitwise has a filing but i do

think we're making progress. i expect we'll see a spot this calendar year. that's not a guarantee, not a promise but the dialogue with the sec is improving. two years ago we had no crypto atf. the next stop is spot bitcoin. we're going to get there and the progress is accelerating. >> there's only a few months left in the year. do you really think it's that soon? >> i'm hopeful. i think there's a real chance. if not this year, then next year. we just submitted 40 pages of research to the ftc answering their questions. this is an opportunity for investors to invest today. >> you're going to being going up against some very well-known names, companies that have lots of client assets. >> i think it's great those big players are coming into the market. the thing that's different about

bitwise, not only are we the largest crypto fund in america, but every day 60 million people wake up and just think about crypto. maybe they have a new person from college who got really excited about crypto in school but we cover it every moment. >> the trial, is it good news or bad news, the fraudulent claims against him? >> i think it's old news. there was a lot of chat are until the day black rock announced it was trying to launch a spot bitcoin etf. >> would they go with the black rock instead of a company that sounds like ftx, a new company that's supposed to be an expert. >> we have an incredible track record. we never invested in ftx, we

never invested in luna. i welcome black rock in the market. i think they'll get their share and we're in the market today launching these ethereum etfs. it's exciting. >> we're about to talk to bill ackman. and jared bernstein will join us live for the latest out of washington. bug hour ahead in just men aomt. with powerful, easy-to-use tools, power e*trade makes complex trading easier. react to fast-moving markets with dynamic charting

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good morning. it is the first trading day of the fourth quarter. the s&p 500 coming off its worst month of the year. congress dodges a government shutdown with an 11th hour deal, but will we be right back here in a month and a half? we'll ask the chair of the white house council of economic advisers. and bill ackman says call him if you want a less risky path to a public listing. we'll talk about his just

app approved squeak. the final hour of "squawk box" begins right now. good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square. u.s. equity futures at this hour are down. almost across the board. nasdaq is up a little bit. we did have triple-digit gains in the dow when we first arrived this morning based on keeping the government open, that deal that speaker mccarthy struck on saturday but slowly some of our other issues maybe seeped back into the consciousness of us, the interest rates, inflation, all of our normal worries. i mean, keeping the government open isn't going to solve those. it might make it worse.

i'm kidding. 10-year 4.62% and the 2-year 5.1. u.s. regulators approving a unique acquisition from big ackman. instead of a spack it's become called a sparc. and dill ackman made a lot of news over the weekend. he is founder and ceo of captain management floating possibly taking x, former i twitter. this structure was approved. one of the names that's been floated i believe by you we talked about in the 6:00 hour was the possibility that you might want to take x public via

this fund. >> maybe we should back up a little. >> okay. >> if you think of a typical ipo, you've got to expose yourself to the world with a perspectus, stars align, you raise your money. you don't know what the price is, it gets done. that's the typical deal. but we reversed the process. imagine you sit down with an investor, investors likes your business and likes the management and says i'll invest a balance and a half dollars regardless of what the market does by the time we file with the sec. what do you say? every ipo investor would say that sounds like a pretty good deal. we'll guarantee you a balance and a half dollar and a fixed price and if you need more, we

have a whole lot of other investors and they're going to get to invest at the same price. that's what we're call persian square holdings. >> you call it a structure. >> yes. >> let's talk about the history of the structure because it really came out of a spac, dare i say a challenged or failed spac, an effort to buy universal music, effectively blocked, you ended up still buying that stake in your fund itself, which i believe has been a successful investment. >> it has been. >> explain the spac to sparc because -- >> it's got a bad name. >> yes. >> we set out to make a much better version of spac. we had 12 million demand and we had a who's who of investors.

two years later we were not able to deliver because the sec did not approve the somewhat usual structure of the universal music transaction. we said, look, apologies, not a great outcome to us but we're going to give you a ticket to a new party, we have a much better idea -- >> you returned all the money. >> returned the money. >> and gave them a ticket. >> a ticket. and it said when we get this approved, what we're calling sparc, you are get to be the first in loon. the approval that happened on friday enabled us to distribute these rights to shareholder. and we commit -- persian square fund commits 5 billion, want to raise another 4 billion, we set

the price at say $35 a share. the company now knows they're going public, they now know the price so the first public disclosure is we're going public, we know the price, we're raising the minimal amount of capital we need. we file with the sec, get the p prospectus approved and there are no underwriting fees and risks of a typical ipo. >> you told "the wall street journal" you would be open absolutely to using this vehicle, if you will, to take x, formerly twitter public. >> they had been running an article about my tweets. they asked me would we use this vehicle to take x -- >> how interested are you in taking x public? you invested in twitter when

elon musk bought it, correct in. >> the persian square made a very small investment. >> would you like to buy it in. >> i have a lot of respect for musk. i think twitter is a really important platform, he's made tremendous improvements in the platform and i think it's a unique, very difficult to disrupt kind of asset and one that could grow into different lines of business. so i think it quite interesting. i don't have information on how the business is doing. i have no idea whether he has any interest in doing something. >> have you spoken to him about it? >> i have not. >> this is just -- >> you asked me a question, would you consider it? the answer is absolutely. i like musk, i think it's important. >> he's got a lot of debt. >> yes. >> 13 billion. >> we could commit persian square $2 billion to a

transaction, set the rights price at $100 a share and announce a transaction. he knows he's going public and rauzing 2 billion, which certainly helps and then we tell the sorry and then the rights holders have a chance to decide whether to invest. as long as the rights have positive value, they're all going to get exercised and the ipo raises $13 billion and the investors, if you go back and look at the people they raise capital from, it's a who's who of institutions, family offices as well a retail -- >> musk paid $34 billion for the asset. what do you think it's worth today? >> i don't know. i have no information. >> i know but would you buy it at $22 billion, $10 billion, $5 billion? >> you are a user in a peter

lynch form of investing. >> the product is vastly better than it was before. the cost structure is vastly improved versus what it was before obviously. the rate of innovation, the pace of i ovation is much better than before. where they've been harmed is they've lost a lot of advertisers and i think the advertisers are likely to return. i've actually bought stuff that i've seen advertised on twitter. so it actually sort of works. it also an audience that's quite difficult to reach. i don't really watch tv. i read perhaps ft journal, those kind of newspapers. but it's a unique way to reach a lot of very good answers. >> if not x, you would buy a classic sort of business owned by private equity firms. >> i think that's the easiest transaction. a lot of private equity firms would like to ring the bell, return capital to their

investors, show progress on a business outcome. we're kind of a very simple solution. but they don't want to file a prospectus, get the employees all excited, distracted and a deal not happen. the or problem is, fine, you sell 10% of the business. we could buy an entire company, 100% of the company with this structure. >> i mentioned one of the difference of this structure is you don't have to go through the quote rigmarole of the process. but there's some value insofar and we look at a lot of the transactions and the spac deals that went through and say they didn't get the spotlight they should have where people could see what was really happening? why do you think that all of these spacks were such deals?

>> only the worst of the companies would interact with a spack. no frictional costs of a spack. so the qualities of the companies that we can transact with is much higher. the fact that they get us as an anchor investors. if you think about a typical ipo, the call the goldman sacks of the world underwriters. but they're not underwriters. we're an investor that takes an anchor position in the company, does due diligence and then offers it to the public. >> part of the problem with the spac structure was you had these sponsors, promoters and they were collecting 20% of the company and they could get out

of the stock within six months to a year yet they were relying on projections that were based on four and five years out but they didn't have to hold for that kind of period. >> of course. >> what about you? >> the opposite of here. one we're going to buy something that we're going to have basically forever. we want something we can own for a decade. that's number one. number two, we're going to invest a billion and a half dollars. we're likely to join the board of the business. this is not a trade where we get someone excited about something and then we dump it. the only differential security we see is a warrant on 5% of the company if the people we distribute the rights to -- >> you're going to get 5% of the company to be clear? >> 20% of the money.

we're just buying common stock in a company. >> how much do you worry as somebody who is not on twit are a -- twitter and we have a following, people loved you during your spack. how much do you worry about investors, frankly you just had a lot of complicated stuff. do you think that they even understand? >> i think they'll have plenty of time to understand. the simplicity of this is no shareholder warrants so it common stocks, they understand that. they understand we're going to buy a billion dollars at $25 a share. we're going to do that in front of them. time will pass. it going to receive the same scrutiny as any ipo. we have to get approved by the sec. then the rights trade for 20 days. so people can say, oh, the rights are trading for a penny,

this is a bad deal, if trading for $3, $4 for a share, okay, the market likes that transaction. >> i want to pivot before woo leav -- we leave you or you leave us, i want to talk about interest rates. you've made provocative statements about where you think the 10-year is going to go. what do you think that ultimately means to equities? we were speaking downstairs about mortgage rates and whether they stay the 7, 8% level and do things start to break as a result. >> two things. one, i think the fed is probably done. i think the economy is starting to slow. i think the level of real interest rates is high enough to slow things down. high mortgage rates, high car rate, high credit card rates. the economy is still solid but it definitely weakening, seeing lots of evidence of weakening in

the economy. our belief when the 2-year treasury was 12 basis points was going to 5. we no longer have that bet on. the only bet, if you will, and it really a hedge at this point is that long-term rates, the 30-year treasury is likely to go higher, go into the mid 5s is our expectation of what happens there. i don't know that the 10-year has to go meaningfully of 5%. we think structural inflation is consistently higher. in a world like that the government shouldn't able to borrow at 4 3/4 fixed for 30 years. i think long-term rates go higher. the spread between the 10-your treasury and the mortgage rate is about the widest it been. you can see -- >> and at some point these seven to ten-year arms are going to roll over and people are going

to have some problems and what happens to regional banks? >> a big portion of the country has mortgages at 3, 4% or less, a lot of companies have fixed rate debt extended for a long period of time. people who have borrowed short term at a low fixed rate and are going to get repriced and you look at a lot of commercial real estate investors that are going to have a very challenging period, that's really the big threat, a very targeted threat that rates will have. >> presidential election, you've been talking a lot about how you want jamie dimon to run. he's not going to run i don't think. >> i've given up on that. >> you've been money to --

>> i think a biden-trump is not good for the country. i'd like a candidate that the world can get behind. >> who do you like the most? >> you know the options. >> well, i don't know them all. >> i haven't met nikki haley. i'm going to do that soon andi met with chris christie. will he have the widespread appeal in order to rise? an early test will be new hampshire. >> you met with zelenskyy. you're a supporter of ukraine. >> big supporter. would you have liked the government this weekend to support ukraine? >> i don't know that musk has a

negative opinion of zelenskyy. i think his view that a forever war is not good for america, nod good for ukraine or anyone. i agree. i'd like to see that war end. it's a black swan risk for the world. thousands of young people and innocent people dying. i'd like to see the war end soon are than later. >> bill ackman, let me know in there's a spark of interest from elon musk and others. >> where there as a spark, hopefully there won't be a fire. >> becky quick. >> we can stick with that a little longer but i like it so far. when we come back, one of the top economic voices in the biden administration brings us his take on the u.s. scramble to keep the u.s. open. aijacil of economic advisers, chr red bernstein will join us. this is "squawk box." this is cnbc and we'll be right back.

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over the weekend, president biden putting his signature on a deal to avoid a government shutdown. things came down to the wire with speaker of the house kevin mccarthy who helped get a bill to fund the government for 45 days. here's the president yesterday. >> enough is enough is enough. this is not that complicated. this has to end. there shouldn't be another crisis. there's no excuse for another crisis. >> joining us is jared bernstein, the chair of the president's council of economic advisers. jared, let talk about this. we have a deal that nobody really expected we'd see so we made it through this weekend but what happens in the next 45 days? >> first of all, good to see you, becky. this is good news for the american people in the sense that an unnecessary crisis that

would have inflicted pretty deep and a wholly unnecessary pain on millions of americans has been averted. that's good news for over 1 million active duty troops, over 7 million women and kids who risk lacking nutritional support, for travelers because of the reauthorization in this bill of the faa and disaster relief also in this continuing resolution, but it did not have to happen. i think what you just played from the president is of course exactly right. he shook hands. he had a deal. in fact there was a law passed with mccarthy back in june, in early june at the end of the debt ceiling debate. that was designed specifically to avoid this. senate republicans, senate democrats, over a hundred republicans in the house and of course house democrats all supported this c.r. well before the crisis that occurred this weekend. so completely unnecessary and we

really need to learn a lesson exactly as the president just said to avoid this in the future, to answer your question. >> the former omb head and the former congressional budget office director under president obama, as you know, was with us earlier this morning. he said he thought that was a bold move by mccarthy to kind of say, no, forget it to a contingency of his party that has been pushing for more. he thinks perhaps there's a way to get no, sir necessarily bipartisan but cooperative agreements that go back and forth. do you think that the house democrats are going to be able to work and support with mccarthy and the republicans? how do you see this playing out? >> first of all, let look at the numbers that underpin that question, what peter was saying. for the continuing resolution, 209 democrats in the house voted for it, 126 republicans. so there were 83 more democrats

who got this bill over the line than republicans and of course you had 90 republicans voting no. so, you know, those numbers kind of speak for themselves and we've been here before and, again, completely redistrictable. we've seen this rodeo way too many times. the numbers aren't there for an extreme minority against a large majorities that actually has continuously at the last minute gotten together and overwhelmingly passed bipartisan agreements, whether it was the fiscal responsibility act ending the debt or the continuing resolution this weekend. i might as well -- >> let just cut to the chase on this. the reason that mccarthy did this is because -- and didn't do it in the past is because he thought he was going to lose his job if he didn't do this. will democrats now support him in this job or are they going to

let her flim flounder? if that's the case, who comes next? >> i'm not going to speculate. joe biden said that's up to the house to figure out how they're going to vote this. i think the numbers speak for themselves. the point i was trying to make is that we tend to think we live in such a partisan era that nothing can be accomplished. well, in fact, after a long and unnecessary conflict here, the last minute this c.r. was accomplished. it far from complete. the president said yesterday we cannot under any circumstances allow american support for ukraine to be interrupted. you just heard bill ackman say the same thing. you've got speaker mccarthy, minority leader o'connell in the senate so that has to be next. >> ukrainian support funding and

what happens at the u.s. border, what comes next? >> we'll have to see about that. the point about ukraine is it's similar to the c.r. and that you have a very large majority both in the house and senate supporting the funding for ukraine. you've got a murderous regime that is actively doing what they're doing in ukraine and it's clear we have to support that funding. again, a widely shared view in congress and we can't let a small group block this support in not just security for ukraine but for all free nations. >> we've been watching the yields in treasuries this morning. they picked back up after a little bit of a relief. people are saying that's because it has to get harkd out. sound like you share that same concern. >> well, i think probably if

anyone expected a relief rally this morning, i can't imagine they're going to see much of it in the sense that the view is that this would either be resolved in a few weeks or not happen at all. so i think we are where we are in terms of that. i think that the interest rates reflecting a lot of the dynamics that you were talking about with bill, we have what he called a solid economy. we still have strong consumers, we still have a very tight labor market and that's driving growth rates that are estimated to be quite significant in the third quarter. so we like the solid momentum we have. we like the fact that we have wages -- have real wages rising and pricing coming down. all those dynamics along strong to me and interest rates reflect much of what is going on there. >> i'm sure you saw axios over

the weekend, they called it the bidenomics blunder. i'm saying tying the president to the economy maybe wasn't the best idea when so many americans don't feel like that he have gotten ahead and so many of them feeling they feel better with republicans in terms of the economy than democrats at this point. trying to keep up with pretty high inflation numbers over the last several years. what do you thinkthat? >> we think bidenomics is clearly working. it's not just about the here and now but it's about that, too. we have real wage gains over the past few months and that consistently supports strong consumer spending, which is leading to a and if you have a healthy consumer and 70% consumer spending economy, we

had and the head lines down by more than half in the cpi and poor inflation close to 2%, the fed's target so we really like the progress there. but bidenomics is also about the future, cheap energy production on our soil, electric vehicles and batteries, domestic, here on our soil. we're pulling in capital at a breakneck pace. >> jared bernstein, thank you very much. >> thanks, becky. >> coming up, a "squawk box" exclusive with tech investor ann winblad. winblad. "squawk box" will be right back. to verizon and trade in any iphone and get the new iphone 15 pro on them.

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welcome back to box, everybody. the futures are now in the red. we started the show two and a half hours ago with green arrows. now you're looking at the s&p down by about 7 points, dow futures down by 37, the nasdaq down by about 5 points and a lot of that has to be tied by what's happening in the treasury markets. if you look now, the 10-year is 4.63%, almost 4.64.

the 2-year is above 5%. >> when we come back, allianz adviser will join us. we want to bring you today's big consumer stat. a new report from retail finding that 64% of u.s. consumers will kick off holiday shopping this month. that's up from 63% in october of last year. you're watching "squawk box." this is cnbc. not only our customers but those who matter most to them. just like our company does for us. we have great benefits from principal. so i know i'm taken care of. and (pause) not just me. but the ones who matter most to me. ( ♪♪ ) ♪ upbeat music

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. our next guest says the recent government shutdown drama narrows the scope for the type of legislation needed to maintain high economic growth and genuine financial stability. joining us to talk about this in a big week of economic data culminating with friday's job report, mohamed -- like entitlement reform, mohamed or more keynesian programs? what is it precluding, the

gridlock in washington? >> it's precluding a laser-like focus on the supply side, on getting the supply side to be more flexible, joe, and getting the supply side to continue to embrace. very important innovations in technology and life sciences and the energy transition. this is a time when you need the supply side to be more flexible. we have an inflexible supply side. if we don't get there without government facilitating that transition. >> how? i mean, i can see how the government can muck things up in terms of what you just mentioned, the industries that you said need to be, i don't know, more nimble. but doesn't the market force that? isn't it in the best interest of the private sector to do all the things you just mentioned? what do they need the government

for? >> so we have a detail analysis in a book that was published by mike spence who often is on cnbc and gordon brown. look, there are government failures and there are market failures. and when the two come together, then externalities do not get priced into the system. look at our supply chain as an example of that. you need operative solutions to comment problems. there as a lot that the private sector continues doing. and it not just government. i think the fed has a role to plau in this. we have to embrace the notion, which we haven't done yet sufficiently that we're no longer in a world where it insufficient demand and you just throw money at.

that's the old world. the new world is inflexible supply and you've got to work hard to fix it. >> would you exceed that, red tape permitting some of these projects? all the things that the fwcht -- you wanted. most of the private sector failures probably come or at least are informed by the government getting involved. no? >> joe, there's undoubtedly government failures, what economists call overreach by the government. but having said that, the private sector itself fails by not pricing in. the global -- the lack of

resilience in supply chain was fabricated by the private sector. so, yes, both fail and the argument is there is a middle way. i always point to the vaccine, joe, as a perfect experience sector came together and did what do well. and the private sector came in and did what it does very well, which is innovate. once you take catastrophic risk out of the way, your risk-return looks different and incentive goes up. it's not just the government, it's the fed as well, to recognize we are living in a durch economic paradigm. so what type of bieft would you like to so that would address the you so infrastructure

becomes really important and that has to be done in partnership. the government cannot afford -- the one thing we haven't talked enough about is what the high interest rates are doing to the government budget. the scope for government spending other than on interest rates is coming down day by day. you're going to be forced to loo being more imagine any tifl. we have to be very clear what regulations is trying to do. we spent two years thinking about this with michael spence and gordon brown. there as a whole list inform actions that we think are feasible. if we don't do it, joe, things are going to get worse. this notion of cascading crises, where we go from one crisis to another, that is not just a human resilience but a financial

resilience. >> hope springs eternal. maybe that's a start. >> it was 17-0 at the end of the first quarter. >> it was 20-20 in the fourth quarter. >> i did see aaron rodgers walking better than you would have anticipated on the sidelines. is that your hope, mohamed, he's going to be better. >> wow, aaron rodgers was there, too? >> i know taylor swift was there. >> yeah, we got lots of clips of that. >> there should have been abet on draftkings. i got suckered into a bet "feeling 22." all travis kelsey had to do was catch a patch of whenever they have the special, they never

have it. homd. when we come back, we have much more on the markets and technology with investor ann winblad. and rivian delivered over 15,000 vehicles. that is in line with the company's expectations and says it is now on track to deliver on that 52,000 production guides and that was previously given. stay tuned, you're watching "squawk box" and this is cnbc. by the way, rivian shares now down by just over 3%. 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

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welcome back, everybody. the biggest tech stocks were major drivers in the market rally in the first half of 2023 but things did take a downturn for many in the third quarter. here's how far they're off their highs of the year. tesla off by about 16%.

microsoft down by just over 13%, same for nvidia, apple the same and alphabet down by about 5.8%. joining us for an exclusive look at technology is annwinblatt. let's talk about things. i always think of you as someone who does bottoms-up work. you look at private companies, public companies and judging those companies what you think their success likelihood is. at a time like this where things have changed and the outlook overall interest rates are up, the fed, do you pay attention to some of those changing factors, too, when you start thinking about where you put your money? >> it's hard to ignore them. our job is to be optimists. we really have to look at the glass as half full and find opportunities. it's important for us at the

same time to realize we're not immune to the same headwinds as the customers of these companies. we look at market value and that's price to value and priced how the customers will pay. when there are headwinds for the customers, there's headwinds for the companies. at the same time we look to find opportunities to deliver value. that's probably why these companies that you're now calling the magnificent seven are doing so well year to date, maybe not just in september. they're delivering extraordinary value to customers. that's what we're looking for. >> dis that value proposition tougher given the interest rate situation? do you see fewer opportunities now than a year ago? is that just not the case because there's new stuff popping up everywhere? >> i think there are more opportunities. i'm on a university board. i'm on a foundation board. i live outside of the tech world

occasionally. i see how hard technology istor people to use. the ai boom is real in that it delivers much more productivity. we're seeing that in the dev ops for developers. one of our companies did a poll of 800 developers in major corporations. 97% of them are using generative ai. they're also able to quantify that on average they're saving 6 to 8 hours of work week time by using these new generative ai tools. we'll see that bubble up into the productivity tools as well. ai penetrating these companies is not new for us as investors. we have to invest at the almost bleeding edge when we do early-stage investing which is what our funds do. i do see more opportunity. the expansion of technology into space tech is another example.

doing experiments at the micro-gravity level, we're seeing quite a few opportunities. it will take time to build new companies from scratch, but the existing companies that are embracing these technologies in the right places are delivering extraordinary new value. >> how big of a limiting factor is just the talent factor, having ai-trained engineers and computer programs who can do this? >> these companies are about people. they're not really about capital. people make the difference here. you see like in major sports that major people are traded between companies. we have been seeing in the last month that the job boards are increasing in job openings for enterprise software companies as well. that means we're going to be entering a new war for talent. it's a big deal. it's -- we're not graduating enough engineers.

it's a real specialty. it means that you're not just a computer programmer but you're a data scientist. then at the lower level, you can just merely be a prompt engineer. >> can i ask this question, the companies we just listed that you would imagine would be the beneficiaries of this, i wonder if all this ai technology ultimately comes to commodity and ultimately it's built into these companies and it's almost defensive for them from a market share perspective to have that technology. not that it necessarily -- if everyone has similar stuff, how it fundamentally changes. i understand how it can change employment in other businesses that use these technologies, maybe that gives all these companies the opportunity to charge more over time. if it really actually works like that. >> well, it's -- the next week in denmark they're celebrating the 25th anniversary of bluetooth. that's just present everywhere. >> right. >> you can't imagine going into

your car without bluetooth. >> so who is the beneficiary of bluetooth? >> bluetooth was developed by seven founders and goes to a.org. effectively it's patent profits there. things do become ubiquitous. right now it really is the companies -- let's use microsoft as an example. they have 47% of the productivity market. 325 million paid users of those productivity apps. some of those are really hard to use. i'm an expert excel user but i hate doing powerpoint. with co-pilot it's suddenly easy with the ai stuff. i'm a developer, who benefits from that? get hub, that's a big beneficiary. of time some of this benefit might become less valuable. can microsoft now charge $30 a user for the co-pilot? probably. just the same as openai can

charge me $20 a month to use the current stuff versus the old stuff. i think over time it becomes an ingredient but it also transforms things. things are built from scratch, this is a core technology versus just a co-pilot. >> let me ask you about the department of justice antitrust investigation into google. satya mandela will be giving his testimony today. it's interesting behind the scenes to think about what's happening. what do you think about the fact that google pays apple and other places to make sure it's the primary one displayed for its search. has that meant anti-competitive behavior? is that anti-competitive behavior to try to be the biggest? what does it mean for apple? >> it's hard to parse an

antitrust case for me. it's complicated what is normal behavior when you own the platform, which is the goal in big companies, you become a platform that others participate and you cause those people to participate. the weave of partnerships in the tech industry is very complex. no one goes it alone. you only go it alone by building your mote with those -- with even frenemies versus competitors who are cooperating with you. i think it's going to be challenging to pursue this antitrust case without unraveling how the tech industry really works. >> does it change any investments you may make, if you see not on the the department of justice but the ftc take these aggressive stances? it makes it harder to evaluate what a company can and cannot do. >> at the early stage, you have

to look at these companies as to can they address a large market? can that market be fairly unique to them? which, of course, says can i own it all? no, you never own it all, but you can create the market in the beginning and become the lead player in that market. even in search, the dynamics of search is changing with bing, openai, and the ability of search to use things like cookies. how advertising works on these platforms. we are seeing both innovation and regulation change things. at the same time, when we look at new companies, there are open new spaces that may be hard to anticipate that you'll be in an antitrust case. >> ultimately, the ipo market right now, that's something you have to watch closely, too. does it feel like there are signs of life there or will it take more stabilization before you see other companies willing to come out?

>> well, our job as venture capitalists is to create liquidity as investors. either the companies are acquired or they go public. we are hopeful that the public market does take on great companies. we don't have enough evidence that that's a possibility now. it is very challenging for companies that took an overvalued last round. we take care with our companies to coach them that the value of your round is only a step to the next valuation, which hopefully is an ipo. i think one of the reasons that the ipo market is so thin right now is there's a lot of navigation going on behind the scenes on these last rounds which are priced way above what a public offering is and who gets what, how the -- how the

proceeds would really benefit everybody. >> thank you for coming in. always good to have you. lovehaving you in person, too. >> thanks. we are just about wrapping things up here. it looks like the dow is still under pressure, down about 80 points that does it for us today. make sure you join us tomorrow. right now time for "squawk on the street." good monday morning. i'm carl quintanilla with david faber and sara eisen. cramer has the morning off. we kick off the month of october in q4 with a government shutdown averted for now. tons of fed speak this week, a lot of eco beta. our roadmap begins with the beginning of q4, all major indices coming off their first negative quarter of the year. >> we'll keep an eye on a lot of the ev