detroit on this tuesday, october 3rd, 2023. "squawk box" begins right now. good morning. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. here we go again. a mixed picture. nasdaq was flat and dow was down again. if you look at the modest advances. dow up 10. nasdaq up 3. same with the s&p. if you are looking at the major averages for the year to date, dow up less than 1%. the s&p up 11.7%.

nasdaq up 27%. again, the dow has been weak over the last several trading sessions. you are seeing the issues going on and the bigger deal is the russell 2000. it turned negative for the year yesterday. it is a huge pullback with the dow industrials and russell. all these pulling back with the potential for recession. these are the things we watch along with treasury yields and inversion in the treasury yield curve. two-year yield at an 5.1%. above the 5-year and 10-year and 30-year. those yields picking up is what we are watching. >> yields are picking up because the economy is strong. why is the dow and russell indicating otherwise? >> maybe it is so strong that the fed has to do something.

if they do something -- >> that is why. they have to go further. >> here we are. >> dijamie dimon made comments yesterday. he said it could go 7%. he said it is not something he is predicting, but you have to prepare for it. that's what he told his board and clients. prepare for it. don't be surprised if rates are higher. don't get caught unaware. >> i saw these crazy articles. people said our ten-year rates are an issue and going up. >> we can get into the conversation with steve liesman. >> we have kevin mccarthy later as well. congress member matt gaetz

making good to the promise to oust kevin mccarthy introducing to bill yesterday. the motion to vacate is on the floor. the resolution is privileged so it takes precedence over house order. you can look at your watch and we will talk about this at 8:00 a.m. this morning when speaker mccarthy joins us live and i imagine he will defend his position. >> it has never been done. there are 20 guys that complain a lot and sort of caucus, not caucus with matt gaetz, but thought of as allies. when push comes to shove, the question is how much would really vote to do it?

it reminds me of the mutiny. let's get him. when it actually came down to it, i don't know. i'm not really ready. one guy was left. >> what's the plan? >> nobody would step up. the other thing is matt gaetz -- mccarthy was right. he is doing this because i got a couple -- they wouldn't pass what i wanted to pass, my republican colleagues. i had to go across the aisle to keep the government open. if that causes you to challenge me, so be it. gaetz is talking to people like aoc and radical members of the democratic party. >> that's the political spectrum. >> you have to get most of the democrats. for him to get 218 to oust -- he is talking to the same democrats that he criticized mccarthy for

getting. >> gaetz must feel comfortable in his role in that he thinks. >> he is under an ethics investigation. that's why he hates mccarthy. >> i understand that. he must feel comfortable voters continuing to vote for him. >> he wants to run for governor of florida. he has a lot more -- >> the point is there is a political party and audience for this. >> it's the basket. your deplorable basket. >> is it my basket? >> i'm not saying i'm part of it. >> i don't think you are part of it. i think you actually think that. >> did you read john kelly's comments? >> about the voters? >> the former long-time trump chief of staff?

his comments from yesterday? >> i heard his comments in the past. >> you would like it. it would confirm everything you worry about. this is, you know, when you don't allow a conservative bill -- he's not a conservative, he is a populous, matt gaetz. he blocks that from happening. the only resource is a government shutdown unless you reach across the aisle. it was a trap. >> it is ridiculous. if you don't cut spending, we are not standing with you. you don't have the white house unless you cooperate. >> mccarthy was already trying to cut spending more than the deal with president biden. the question is what do democrats want to do? vote present or not show up? you need more than if they did show up. now there's talk about p it. mccarthy has not spoken to

hakeem jeffries. he will know if matt gaetz was there. >> they want ukrainian funding. >> they do. matt gaetz said he had an implied deal to do that. mccarthy said the money is already there. there's nothing in the way of that getting okay for ukraine. that's a weird thing. a lot of republicans want to do ukraine. we'll talk about all this. palace intrigue. ford and gm announcing a new round of layoffs as the uaw strikes enter the third week. late last night, ford said it idled two factories in chicago making parts an d let go 330 employees outside cleveland and sent home another 34 from the

factory in central indiana. all tied to the ongoing strikes. 25,000 uaw members now. one more thing about that. congress member mccarthy from massachusetts said we can talk, but i'm not a cheap date. >> what? this is the reality of politics. this is what matt gaetz and the rest are trying to do. matt gaetz was not a cheap date either. he was expensive to negotiate with to get him on board to be speaker. this is politics at best. >> these guys got fisticuffs on one of the votes. a few things the democrats would like that would be an ousting bargain. >> opposed to the bargain he was just in with gaetz when he became speaker.

five to ten members were calling the shots. >> most of the caucus is behind mccarthy. it was going to be five people needed to challenge the spe speakership. it has still never been done. i guess there hasn't been a vote in over 100 years. >> 1910. >> boehner left. it was mark meadows who was going to do it to boehner. he left. he said i'm out of here. i'm playing golf in ohio and sp smoking cigarettes. meta is proposing instagram platform for $14 a month subscription fees for ad-free platform.

under the proper phoosproposal, allow ads or pay the fee. the price would vary depending on whether users were on desktops or mobile and whether they wanted to include ad-free version of facebook. this answers the question. you don't get anything for free. people talk about social media. this is what it is worth. $14. all right. >> will you pay? >> coming up, the little girl is okay. nothing would ruin my night after that. >> the girl who was missing in new york from the campground. 9 years old. found her. she's okay. >> you have to make sure this guy is not in a position to do this again. we will talk portfolio strategy ahead of the jobs data. later, the trial of sam bankman-fried kicks off today in new york. we will tell you what to expect. you are watching "squawk box" on

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early access begins on october 6th. first on playstation. visit xfinity.com/rewards. welcome back to "squawk box." let's get back to the markets. let's bring in sarat.

the base case now is higher for longer. what we don't know is higher fr longer right now or where we are right now for longer? we could go a point or two higher before this is all said and done depending on the inflation and how the economy is. >> that is causing the volatility, joe. the market is trying to figure out what we are going to go. the first thing you do is sell. you see it in interest rates. you add to it the uncertainty with oil prices and dollar getting stronger and just because we don't have a government shutdown and we kick the can down the road, you could say the same about interest rates. you add that and itis a powerful cocktail to say why should i actually in the short term invest in the market when i can get 5% in treasuries?

shorter term, there is a potential for more volatility. longer term, when it settles down, we see a huge valuation desp des despairty with the big seven. >> i which we knew which di dictates inflation, sarat. it almost seems like as long as the economy holds up, the fed thinks it needs to go higher. it is almost like a catch-22. to accomplish their goal, which is slowing the economy, they need to keep raising. it hasn't happened. that's why the rates are going up now. every strong economic number we get causes rates to tick higher with the notion the fed's not finished. not whether inflation is strong. >> right. it is growth. we're back to the now good news

is bad news. if you get strong economic data, it means the fed is not going to take their foot off the acce accelerator. that means higher capital costs and for balance sheets that are weak to get weaker . we have to wait for the lag. they started this a month ago. you are seeing economic data that is coming that is not as robust as before. it is a timing issue. joe, we go to the flip side. things are getting weaker and what is the bottom when you see announcements coming? whether that comes in advertising or labor or in input costs with the same time commodities are rising. i think sticking with solid companies and balance sheets are going to be important with the diversified portfolio is more important than sticking with the

winners. i'll go back to the magnificent seven. the big seven will not survive with the valuations they have although the balance sheets are strong. >> would you be playing stocks that wocompanies would do well recession? are you factoring that in? we pointed out that the russell is down and economically sensitive stocks have not been doing as well. do you avoid them? >> you see if you are buying secular or buying companies that are going to do well in a downturn. i think there are opportunities in healthcare and halion that will do well in the environment. you see utilities which are sold off because interest rates are going up. when that stableilizes.

you have to hold your nose right now. as we get the have rate volatility, markets are not going to give anyone credit. you woill be better off coming through it. one month or three months? now stagflation and how will the rest of the world do this? you will see that happen and i would say put money to work in the beaten down stocks and sectors. you want to do this when they're out of favor, not when we're in a slowdown then these are the stocks to go to. >> it is october something. what did i say? 2nd or 3rd? >> the 3rd. >> the ides of october. it is not surprising we have been in a sustained consolidation since the first week of august, sarat. do you think there is a buying

opportunity in the next couple weeks? is it another one of those octobers? the dow is up in the morning and it is down almost every day. >> started off strong yesterday. could we get that crescendo in october that we normally get? probably. we are getting into selling season. you will get a lot of window dressing and investors looking at stocks that were down for the year. selling out or doubling up. add that to the mix and absolutely this is where you say where are good quality companies that are sold off? we do get into this year end. we talk about not knowing if the government shuts down. rates are higher and oil is higher. opportunities? certainly. you have to have a strong stomach for it.

sarat sethi, thank you. when we come back, we have a sneak peek of microsoft's a.i. digital assistant. steve kovach has that next. and later, payments resume for student loan debt after a three-year pandemic pause. we talk to former purdue university president mitch daniels. the choice words for putting off these payments and forgiving them. he called it a scheme and c unfair. we will talk about all this and more. "squawk box" will be right back.

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>> announcer: executive edge is sponsored by at&t business. next level business needs next left network. microsoft will sell the a.i. tool called copilot for $30 a month starting in november. will this product live up to the a.i. hype. steve kovach is joining us with more. >> people are asking can anyone besides nvidia generate sales from a.i.? microsoft is about to try a month from now with the launch of the a.i. assistant copilot for business customers. it costs $30 per user per month. double what companies are paying for microsoft 365 with teams and outlook and word. the question investors have been asking is is it worth that price? some have been testing copilot ahead of the launch.

i spoke with kate in charge of the lumen technology. here is what she told me. >> what i seize is the potential for breakthrough productivity. i feel with the pace of diffuse of a.i., it is now or never. you wait and you will get left behind. >> i also spoke with one lumen employee who told me it allowed him to be in two places at once and catch up on the meetings. >> before i was using it, it would take me a couple of hours. it took me three minutes to interact with copilot in the teams meeting and bring that information current. >> the pressure is on to sell that experience to the more than 300 million users across microsoft 365. especially as companies are tightening i.t. spending. i caught up with microsoft's vp in charge of the business on how

he is pitching copilot to customers. >> we don't think of this as addition to the i.t. we say think of it as revamping processes in the company. most customers are interested in productivity gains and very interested in creating value. we will start there. >> more competition is coming. google tis working on something similar and it will cost the same as copilot. microsoft has an evntrenched led over google. >> i believe google will be the leader in search and microsoft to be the leader in the productivity tools. i don't think this so much compels switching as it locks customers in. >> we will see what happens a month from now.

microsoft says sales won't kick in until later next year sdpyear. >> what did thewoman from lumen say about this? will she pay? >> it sounds like it. i asked her when it is generally available will you go from 300 to 30,000 employees? she said it depends. they have workers in the field fixing equipment and they don't need this as much as someone in the office. >> what about the guy who was in two places at once? >> this is happening through teams. let's say you have back-to-back meetings or late to a meeting. what copilot can do is -- >> double the number of meetings? >> you had overlapping meetings. >> i'm glad when i miss one. >> what if your boss asked what happened in the meeting that you missed. that guy was able to ask copilot what happened. >> that is a transcript or

summary. it is a transcript or summary of the meeting, which is valuable and timed to the meeting. it is not -- it is interesting. the other question is for all of that to work, it does require recording everything. >> intet has to record everythi and looking at emails. it is contained. >> privacy concerns. >> teams. it does things with outlook. y >> this will be a boom for lawyers. everything in email is evidence mail. now every meeting and every word recorded. that is a bonanza for lawyers. >> you do this on anthropic, but feeding it a pdf and say summarize it for me.

give me the protein of this and it does it. >> hold on. i heard the vacation email thing. that is actually a valuable feature. >> you come back from vacation and 6,000 emails you misesed. the way they are pitching it, it weeds out the garbage. >> that could buy you a day or two. you come back from vacation and have a lot of email. >> just read them all at once. what is a meeting? >> people get together and talk to their computer screens. >> no, no, no. >> like this. a meeting. >> this is the only meeting i'm willing to attend. we have a three-hour morning meeting. i'm meetinged out after this. have you learned how to put maybe so it goes away and you

never have to look at it again. >> i know you respond to it that way. >> and it adds to your calendar. >> maybe. it goes away and you never have to think about it again. >> is isn't still on your calen? >> don't. what's it called? >> we got to go. thank you. coming up on the other side of the break, we will talk about the government funding deal and ouster vote that speaker mccarthy faces from his own party. that is next. 8:00 a.m., speaker mccarthy will join us live from washington to defend his role. as we head to break, here is a look at yesterday's s&p 500 winners and losers. . >> announcer: winners and losers is sponsored by state street

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good morning. welcome back to "squawk box."

we're live from the nasdaq market site in times area. futures are in the green. the dow was flat and the dow indicated up 25 this morning. nasdaq up 23. let's talk about matt gaetz. he is launching his bid to oust speaker mccarthy. introducing a vote to oust him after narrowly avoiding a shutdown with the short-term funding bill. jonathan, we have been batting this around all morning. just handicap it. what happens from here? what are the chances that this were to happen in reality? >> andrew, matt gaetz is very optimistic he has the republican votes necessary here. by the way, it is not that tall of a task. he needs half a dozen given how narrow the gop majority is in the house. this is a question of how many

democrats gaetz can pick up and whether the democrats ride to the rescue of kevin mccarthy. we will know a lot more about mid-morning because that's when the house democratic caucus meeting breaks up. we will see what marching orders they get from their leadership. >> reading the tea leaves on the democratic side right now, are there democrats who want to save kevin mccarthy? >> i think there is little appetite to save kevin mccarthy among democrats. at least absent so negotiations about a deal. >> what do you think has to be or will be on the table if that's what we're talking about about? >> i think procedure in the house. i think the upcoming spending bills with the congress punting to november to keep the government open, but they have to come back in november and fund the government for next year. i think also the question about

impeachment. is the house going to pursue impeachment of president biden? kevin mccarthy is going to loathe the deal on any of these things. it underscores his weakness and he has effectively become a figure who is leading a gop democratic coalition in the house rather than the gop -- >> god forbid he is not aligned with the 20 andy biggs -- he cannot fall back on that, jonathan. i saw the quote. if you are going to try to oust me because my only choice to keep the government open was to get a couple of democrats, then go ahead. what you just said was funny. you said he would be left with not just appeasing the hard core 20 guys, but have to have support across the aisle.

that is not the worst thing in the world? >> to the audience, that sounds fine and for americans between the 40 yard lines, that sounds fine. i think mccarthy doesn't want to see his wings clipped by his party and have to be the compromise. >> that comes with the job. on the 15th vote, that was already -- he knew what he was getting into. we knew it was only a matter of time. matt gaetz said this is the first time i'm going to keep doing it. he is getting -- i looked through. a lot of pictures of matt gaetz. he's everywhere. his profile is what he wants if he is running for florida governor. >> is that the end game here? >> gaetz is running for governor in 2026 in florida. that's what he is up to. that's not been a secret for long. it is now, obviously, an open

secret. >> is this a winning effort for that? >> this is a matter of when for kevin mccarthy. a lot of his friends wondered why he wanted the job. it is a tough stretch and this day was going to come. here we are. now this is a fascinating test of mccarthy's dexterity with the democrats. can he get enough with him before giving away the store in a way that humiliates his final year of speakership. >> what does this is a about the v -- what does this issay about e voters in florida? >> this is a subset of the elect tor orate down there. it depends where the gop is in three years. if it is still where it is now,

radicalized by trump, it could hold stead. certainly in today's party, yeah. >> jonathan, it is good to see you to get your perspective. we will talk to you a lot more as this progresses. we will talk to speaker mccarthy at 8:00 a.m. eastern time live from washington, d.c. coming up, the trial of sam bankman-fried begins today in manhattan. a lot of trials going on in manhattan. we'll tell you what to expect next. later, ev maker rivian reporting better than expected deliveries for the quarter. the company's ceo will join us in the interview in the next hour. "squawk box" is coming right back.

jury selection in the criminal trial of sam bankman-fried kicks off at 9:30 a.m. in the manhattan federal court downtown. sam bankman-fried has been in jail since august after the judge revoked his bail for alleged witness tampering. he faces seven criminal counts related to the implosion of the crypto empire he built. wires and securities fraud and money laundering and the combined prison sentence could total more than 100 years. the former ftx chief misused billions of dollars of customer money for personal purchases like buying more than $200 million of luxury real estate in the bahamas. the government also contends that sam bankman-fried was using these customer deposits to cover bad debts he made at the hedge fund alameda research and make $1 010

10$00 -- $100 million of campaign contributions. sam bankman-fried pleaded not guilty to all charges. did you see one of the things? i barely look at it. it does say that sam bankman-fried in 2020 would offer $5 billion. >> it was on "60 minutes." >> how long is that show? >> 60 minutes. >> how many stocks in the s&p 500? >> more come indicatecomplicate russell 2000. >> how much states in the united states? >> 57. >> i know obama visited 57. when we come back, student loan payments returns after a

three-year pandemic pause for 40 rmanion americs. foer purdue university president mitch daniels will join us to talk about p that next. ( ♪ ♪ ) ( ♪ ♪ ) ♪ (when the day that) ♪ ♪ (lies ahead of me) ♪ ♪ ( seems impossible to face) ♪ ♪ (a lovely day) ♪ ♪ (lovely day) ♪ ♪ (lovely day) ♪ ♪ (lovely day) ♪

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million mis of americans wi resume payments on student loans this month. 40 million people owe more than $1.6 trillion. for more on student loan forgiveness, we bring in mitch daniels. he is a two-term republican governor of indivisana and recey served as president of purdue university. he commissioned a series of tuition freezes after a number of increases.

mitch, thank you for being with us this morning. i know you are hugely opposed to the debt forgiveness program. i was talking about it earlier and people on twitter started writing in saying this is a 1% issue. rich don't want to pay for the loans smothering us. what is your response? >> i think it is a complete misreading. this remains the least defensible domestic policy suggestion in memory. this is a reward to the afteaffluent and that is one of the many flaws. it is unfair to those who paid their money back. i served a school where 990% pad it back. the moral hazard s are obvious.

it will exacerbate the college cost problem. we know subsidies are largely pocketed by the schools. it still has the constitutional flaws it always did. it is an attempt to spend unbelievable amounts of money without the approval of of con. give him points for persistence for trying again, but a terrible idea remains a terrible idea. >> it's not loan forgiveness, and it means the borrowers don't have to pay the money back but taxpayers do, but -- >> yeah, including as i just said, millions who accepted the obligation they had taken on and paid it back. on top of all that, becky, you know, a nation that is $31

trillion in debt and rising fast should be doing everything it can to slow that growth and eventually flatten it and not exacerbate it as this would, so i think it's a pretty transparent exercise in vote buying, and i hope the rest of america sees it as that. >> you bring up an interesting point, the idea that colleges and institutions are doing well by this because they are able to continue to raise tuition prices, if the loan is for given and not have to deal with some of the tough budgeting choices that you did when at purdue, and you had to institute a tuition freeze. >> as a community, the purdue family decided remaining

accessible and affordable to students of all socioeconomic levels was job one, and it was not that hard with everybody pitching in, avoid gold plating of capital, and as the years went on, you are right, tuition is still less expensive, and i was on campus last weekend and for the countless numbers of times, med students from california and illinois and other places were eager to tell me it costless to come to purdue than it would have to stay home, so there has been a 30% surge in enrollment over the term of the freeze, and, of course, that has played a big role, a material role in keeping the costs where

they have been. >> what was getting out of control before? was it faculty costs? expansion costs trying to add fancy things to the dorms? you know, another school said the reason they had to keep raising rates when purdue didn't is to make sure they are still a top tier school. what is your answer to that? >> my answer is purdue's rankings have skyrocketed, and that's a misreading of the situation. people in higher ed, they could raise tauition to match their spending, and they were able to

have a steady increase year over year until the market began to speak. it's not as hard as people say it is. and look at the explosion of administrative cars. there are schools that have more administrators than students. there's no question there has been a lot of -- i'll just say expenditure that are not core to the mission of the teaching and research, and if you focus on those things every day about how we can keep the cost of what we are doing here within the reach of ordinary families, you can have more success than people imagine. >> we have speaker mccarthy joining us this morning, and what do you think?

>> well, we see it on both sides now in our, sadly, polarized parties. completely irresponsible, of course. the nation has to pay its bills, and having done so the nation has to get serious about the debts we are about to dump on coming generations. the federal government is borrowing half of all the debt for the whole country, and it's not a formula for keeping inflation under control. >> that's why matt gaetz says he's doing this is because kevin mccarthy has not stayed true

to -- >> totally stumped him. >> no, it was a technical -- he's back. >> well, there are better ways in a situation in which the people involved represent a small percentage of congress and the other party is in charge of most of the government, so if for now this is the probably worst way. >> thank you for your time, the former president of purdue university. we appreciate it. coming up on the other side of this, house speaker, kevin mccarthy, facing an ouster vote from the right wing of his

party, and he will join us live at 8:00 a.m. here on "squawk box." you got this. let's go. gobble gobble. i've seen bigger legs on a turkey! rude. who are you? i'm an investor in a fund that helps advance innovative sports tech like this smart fitness mirror. i'm also mr. leg day...1989! anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. i go through a lot of pants. before investing carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com.

goodmorning.

a and bankman-fried we will talk about the case and what it could mean for investors for the sec chair, jay clayton. the second hour of "squawk box" begins right now. good morning. welcome back "squawk box" right here on cnbc. i am andrew ross sorkin along with becky quick and joe kernen. u.s. equity futures at this hour, the dow off about 27 points. the nasdaq off 15 points and the s&p 500 down just marginally

right about now. >> i heard these guys arguing, and you kept saying coke and you said pepsi, and it got ugly. rick and steve are here. are we going to be able to get you guys going? we had to clear this to get you in the same room? >> no, we are getting much more sim pottic on things. >> you think the rate hike is in? is it in? >> i was wondering, and -- >> an honorable man here. >> you wrote something? >> i did not. there will be a large -- oh, yes, i did, and there will be a large delivery of burgers when white castle -- >> wait, what was the bet?

>> rick said there was going to be one more hike, and i said there was, and -- >> wow, way to pay off. that's a good payment. >> 150, i believe. >> i am being told to report? >> by who? >> somebody who matters. >> well, i like matt. >> we are going to talk about the risk in the risk free introductory, and i was going to say you only have to look at 7% in indices. when rates move the wrong way, losses can mount in a hurry, and yesterday we spoke to some of the biggest bond managers, and the list wrist is inflation is still a material risk, and debt levels are very high, and the

economy has been strong. all that has been the recent selloff, and there's not tremendous confidence, and duration is the pimco bond funds, up to 4.7 years, and still low. many sitting in cash and short-term bonds may not have thought about rollover risks. those juicy money market appeals could cut just like that if the fed decides to cut. i talk to john croke, and he said cash relative to the long-term allocation -- in other

words, staying short is market timing and it's a call on timing. he said it's better to make choices about that now, and while there will could be further losses they are only losses if you sell. the biggest risk is the behavior investors that abandon their long-term strategy because of short-run fears, and they realize losses instead of -- >> yeah, if you had gone into a 10 or 15 -- >> right then. >> at 3.5, you would be looking at 70 cents on the dollar. we understand there's reinvestment risks if you don't go along. everybody knows that. if you had gone in the last year, because we are at the highs now, and you are down on every single long bond you bought, you are down. it definitely cuts both ways. there's no upside. why would they cut, though? they are not cutting anytime soon? >> i don't see the cut.

i know we can look at fed fund futures and draw conclusions, but i have been a big advocate if you look beyond one or two meetings in fed fund futures, you are in more of a fairy tale than reality, and you need to pay attention to how much change can happen. it's a fansy one-month t-bill maher market. they will bring rates higher because everybody else looks towards the west treasury market. >> i guess we didn't realize what we had when we had 7 and 8%, and we had that forever, and nobody got excited. >> there were guys on the street that told me it would be ten years after, you know, the volker years. they would look at the portfolio

and see a bond that was at a 12 or 13% bond, and they would say, what is this doing here? you could be clipping coupons to put your feet up and retire, but these are somewhat better yields for retirees. this is a gift to the baby boom generation -- >> you have to lock it in. >> i have to redirect what the guy was saying. you are not rick santelli out there, and you don't understand the bond market the way he does, and his wife complains to me that he's talking in his wife about the change, and you are not an expert. you have to sit down with your adviser and say here's the amount of money i need over x time, and maybe there's some threes, fives or sevens.

ka keep the duration short. yes, you will have losses, but some -- >> well, you get your money back if you hold it. you will be underperforming for ten years if rates continue higher. what are you doing calling his wife? >> she's calling me to complain. >> i said that red light blinking on the answering machine a lot. >> you know, joe, yes, you are right. >> yeah, i do. the idea that, hey, it's going to mature some day. try that with a 100-year bond. >> i look at my monthly charts, and if markets set up in a certain fashion, i think 13% would be my ten-year call. >> is that a shocking number. >> yeah, it's shocking. i went back to 1980, a 10-year

n note, and there was a six or seven-year cycle that could bring us in 7% rates, and if that happens it would signal the next move. >> fundamentally what would cause that? >> that's easy. >> 200 debt to gdp, and -- >> military budget and servicing the debt right now or fighting it out to see is in the lead, and imagine what that will look like in two or three years. >> and that didn't work -- >> well, it worked if you are a democrat and you like to spend. >> the reasonable and rational thought about nmt, when your

growth rate is above your payment cost, then you can invest in stuff that has a return, and that's a growth rate above your interest rate costs. we are not there any longer, and we are about even depending where you want to put it. >> where does the government get the r for returns? >> growth, and -- >> well, surpluses -- >> we didn't have surpluses in the '50s and '60s. >> you are right. >> the return is defense, and all kinds of things the government does that are positive amid all kinds of reasons to roll your eyes because it's the government, and at the same time you look around the world and you say, where would i rather be living? america is not a bad place. >> i agree with you, and i take it back. it's not just democrats, but it's both sides of the aisle.

how disappointing are both sides of the aisle? >> steve? >> i am not disappointed when government works. >> but they are doing things -- >> oxymoron. >> you look at the way they are involved in our lives, and do you think that's worth the money people are spending. it's an inefficient way to spend tax dollars. >> which part? >> all of it. >> all of it is not an answer. >> we are not going to solve anything. when our kids are paying 70 cents on the dollar for their taxes in ten years, then talk to me. >> i agree about that, and i am very disappointed in janet yellen and the treasury. i think they should have done a better job -- she should have done a better job of trying to reign in the spending. >> didn't she issue long bonds a couple years ago, and maybe a

lot more? >> i think that is one issue, and you would have rick complain -- or people he talks to complain, and he didn't want to have the government -- >> i don't like the government trying to time the market, but i think the alternative might have been worse. >> so the treasury has long between different administrations their objective is to be predictable, and the idea is that -- >> did you have a floating rate mortgage when rates were 2 to 3%? >> i still have a floating rate? >> really. >> yeah, it has two to four years for the -- >> imagine all those 10, 20 and 30-year bonds, how much better off we would be. >> we think the fed is getting out of the game of buying

things, and we talked about it earlier in the week, is the fed going to continue to h quantitative buying. >> interest rates don't conform to the 1987 model where they start to go down, and their balance sheet is, still, what, in the $8 trillion? >> no, it got a seven in front of it now. >> are you team gaetz or team mccarthy? >> i am team mccarthy. >> i had a naive day dream where you would have a speaker that would run a bipartisan policy, like, and this is my criticism of biden as well, and you get in with a 50/50 vote, why do you run like you won by 100%?

>> yeah, and -- >> you made a lot of remarks in the 6:00 hour -- >> no way. no way. i have to rethink what i said. >> i thought what you said about criticizing the conservative wing. >> what team are you on? >> team mccarthy. >> he will be here today. give him my regards. >> qt, there's one point where we may not be at the point where we are at the binding level. qt may not have heard, and there's a lot of frothe that money markets are not holding enough. >> if you need a buyer for your debt, guess who the ultimate buyer has to be? >> yeah, and we are not there yet. there's $6.5 trillion in money market funds. that's the money i was talking about earlier that at some point will have to scramble into something else. >> yeah, if it hits the

marketplace, buckle up, baby. >> i am talking about the rev rev reverse repo market, buckle up, baby? >> do you drive to work? >> i take the train. i am on my 44th year of taking the train. >> be careful. a lot of great things in illinois. coming up, when we return, an out look of myrrh ergers and acquisitions. and then the ceo of rivian will join us. we're coming back right after this.

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a number of deals sparked optimism and dealmakers are seeing easier financing and pent-up demand for buyers ready to make acquisitions. the global head of mna, and the sole head of mna at this point, i should point out. people got worried and there was a lack of confidence.

where do things stand right now? >> things are mixed today. normally the global mna market is about $4 trillion. the happiest was in '21 when it was 6, and right now it's about 2 year to date. by year end, where we would be? i don't know. 2.75, something like that. that looks grim. what causes optimism if you can't have that is if you have more certainty, because the biggest thing which i think is holding people back today without sponsors, is the uncertainty. i don't know where rates are going to be. i don't know when inflation is sorted, and i don't know what sorted means. 2%. government continues to be inflationary, and i don't know what the new normal for the consumer is? what is the new normal consumer

pattern going to be, precovid? there's too much uncertainty. you go and meet every company, and that ceo says my business is doing great but i am worried about the future. >> are you scared of trying to do something because of the fdc -- >> they don't want to look stupid for paying the wrong price. >> yeah, if you are a strategic buyer and you have a lot of crash and your company is doing well, and growth still matters, and the market is giving you a preevaluation because of growth,

and maybe margins -- >> how much of this is a function of private equity? how much do we think the private equity is the smart money or not if so far as they represented 40% of the market, and that's a big chunk to take out of the mna space in terms of a strategic -- >> i have been asking all the private equity guys across the globe, really, the same question. is the same people in 2021 pre-emptive -- >> the cost of capital just went up by a lot. >> sure, but the valuation also came down. if you were willing to pay 18 times in that market but not willing to pay 9 times in this market, and people tell me curious things. if you made a mistake in '21, it's okay because all the coke

heads were doing it -- >> right, because the pension funds, and life is relative. >> yeah, everybody was investing and i was too, and today i have to take a mark on it. but today you are probably staking your career if you do a deal, and the simple answer is just wait. you ask people, what are you waiting for? certainty. when and how is that going to come? >> what would boost confidence? >> most people say knowing the fed is done and seeing the beginnings of rate decline, and you have to have conviction, and if you have conviction how does it matter how other people are looking at it too. am i the only one? it feels weird in 2021 more people were willing to deploy capital, because you are talking

about smart money. >> and that would have been dumb money. >> yeah, and i am not an investor, but i am a banker -- >> yeah, when there is no confidence they should be doing the deal but they don't do the deal. >> moral courage and conviction, and you have the ability to put very smart deals. >> i didn't hear you say once prices are too high. we have watched the market run up significantly and that's not an issue that comes to mind? >> there's still an issue of seller/buyer valuation mismatch, and useually it's solvable by structure, and we are doing more negotiated deals, and it's a market that is unsolicited, and i would say it's a decade-high

of uunsolicited -- >> rates are peaking and starting to come down? >> correct. in tw'22, people said there was lot of adjustments. many of the sponsors, old companies they have invested in that need to get monetized. the ipo markets are showing signs of hope, and not ever company, and it feels like in february we are going to have a massive backlog that we have to bring to market. >> the i pos?

>> how many people can have the story and growth and so it's not a lot of people that fit that playbook, but at some point in time people need companies to invest into, so the ipo market will come back, and will be able to more companies. you will be silly not to look at a dual track. >> you are ignoring her because you don't think she will prevail? >> no, i think especially with the elections coming up, right, especially if it's -- you have to think about biden regime or a trump regime, and both are unknown in some ways -- >> neither was that great. >> exactly.

neither one was that great. in one, it was how do you protect the franchise for a period of time, and today in this regime it's much more about willing to litigation, and how much money will you set aside for litigation, and can you hold the selling company's franchise together for that period of time? it's a different calculous, but neither of the past, you know, two administrations have been that great for -- from an antitrust perspective. >> it's going to be one or the other in 2024? really? you just said that, it's going to be one or the other? >> hope springs eternal. >> i am hopeful, too. >> 75% of the people want it to be a different choice, don't you think? >> yep. >> not going to be? >> i don't know. >> all right. >> thank you for coming in. >> thank you. good to be here.

coming up, bankman-fried, the founder of the now defunct exchange, going on trial today in what prosecutors are saying it's one of the biggest financial frauds in u.s. history. "squawk box" is coming right back.

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welcome back to "squawk box." the futures this morning have taken a turn down. we are now looking at the dow futures down by triple digits, actually down by 98 points. nasdaq down by 87 and s&p down by 13. it begs to question what is happening with interest rates? every time you see the yields go up, you see stock futures going down. we will keep an eye on that. the 10-year is at 4.73. >> as promised, rivian is coming up after reporting better than expected quarter deliveries, and what will it take to buy into a ev future.

we are joined by the ceo in normal, illinois. is anything normal in illinois? >> central, joe. you have your r1ss, and better than expected deliveries in the third quarter. are you seeing any weakness or areas that give you cause for concern with the consumer right now? >> in q2 and q3, we saw a significant step up, and deliveries with a step up in production, and it's because of the products we are building and as we look at the long-term -- what we talk about, if somebody is pwbuying a new car, a truck, and they are thinking is this my

last vehicle, and our future products are what we call the r2 platform. we fit in nice with the growing demand. >> i am not looking for a specific number, but you have a high transaction price, well over 80,000 per vehicle. we know we are going into price cutting mode with the ev industry. are you noticing any erosion? >> we have maintained our pricing. the demand for the product is strong and we have been able to keep that consistent with what we had in the past. >> you have an average loss of almost $33,000 per vehicle, and the journal asked when are you going to be profitable with every vehicle? you said next year. are you seeing an acceleration in bringing down the costs? >> our q2 results showed a loss

of $30,000 per vehicle, and now we are seeing significant progress. what we are going to see going forward is a staircase set of steps that gives us to the profitability in the business. >> you have $9 billion in capital on hand, and you have enough to get to r2. >> well, building our surface infrastructure, and parts distribution, and making sure we deploy capital, and the growth issues is the next set of products in r2 in atlanta. we have not commented on how we think about the capital markets. >> but still comfortable with your last guidance? >> we are very comfortable with

the fact that we have maintained a strong balance sheet. that's something we will continue to do. we don't want to be in a position where capital -- to not be able to grow. >> when you look at the r1t, and the cyber truck is coming at some point next year, and ford's next generation lightning is coming. is there too much saturation coming when it comes to the electric pickup truck? >> if you were to look at the different products coming out in the truck space and the electric vehicle, and there's not going to be a lot of overlap between customers buying a cyber truck and somebody buying an r1t, and we need that across all segments

and price points, and competition is valuable for the mass scale electrification. >> one day after they reported butter than expected deliveries. back to you. >> thank you. when we come back, congressman matt gaetz triggering a vote to oust speaker kevin mccarthy. and kevin mccarthy will be here at 8:00 a.m. eastern time with his response to the big move. we're coming right back.

this is "real time insights." i am here with dave burg, with cyber security. 78% of business leaders are increasing their cyber security spend over the next six to 12 months. why? >> two factors. manufacturing environments are now in play. companies provide on third parties to provide a variety of services and that increases the attack service. >> how has the cyber security role changed? >> it has changed in two ways. we are working with our clients to embed cyber security in everything they do, and we have multiple generation workers that have different perspectives on what cyber security really is. >> how are you working with clients? >> we do everything, we work

with them to protect 30 manufacturing sites around the world, and we put in security controls that help us find bad actors within the environment, and we saved one company over $42 million, just a great return on investment for them. >> thank you for sharing your expertise. >> thank you. time to check in with frank hol holland. >> now, apple moving to the number two spot.

shares are down half a percent right now. the company is seeing an 8% slide over the last month on concerns about china restrictions and regulation impacting a major resource for alphabet for making google the default browser. and nvidia moving higher this morning, up fractionally, a 66 upside from where the chipmaker is trading right now. this morning we are also watching stocks for the big three u.s. automakers. ford and gm announced additional layoffs yesterday as the uaw enters the third week of their strike. ford set idle at two factories, and they laid off roughly 330 employees as the negotiations and talks continue.

back over to you. >> thank you very much, frank. we will see you later. coming up, today is day one of the criminal trial of former billionaire, bankman-fried. and kevin mccarthy is under pressure to vacate his position as house speaker, and he will join us at the top of the hour live on "squawk box." it's an interview you do not want to miss. we will be right back.

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welcome back to "squawk box." futures, as we have seen so often, started in the green and now the dow is down 141 points. it has been down four out of the last five sessions. really the markets have been in c consolidation phase since the first week of august, and we're in october? >> october, my friend. the 3rd already. and now microsoft ceo testified yesterday that google's dominant market share and online search show that it's harder for competitors like bing to get a foothold. in court, everybody talks about

the open web but there's the google web. the government argues google had exclusive deals with browser and phone makers to be the default choice, and bing was the browser in 2010 and was met with criticism. the trial of ftx founder, bankman-fried, beginning today. he faces multiple charges of fraud and money laundering. here to tell us what to expect, the former chair of the fcc, and also a cnbc contributor. good morning to you. >> good morning. >> can you imagine an outcome? >> given what we have seen, it's difficult. let's talk about what to watch here.

becky just did a super job laying out the narrative in the government's case, and what is the government's narrative, and what to watch is the narrative the government will layout, and they will layout the narrative, okay, i will take your money and do a with it, and when, in fact, ftx sam, whoever, took it and did something different, something for their own benefit. that's the narrative. how do you establish the narrative? you tell what it is and then you have evidence, the witnesses and the documents. >> let's talk about state of mind, though. i believe one of the things you will hear from defense, the whole idea of mens rea, and the whole idea as a jury you have to believe that sam knew what he was doing, he was breaking the rules, right? >> uh-huh. >> the question is how you establish that?

>> if you are the defense, you lay down the narrative, and the defense will say a and b are similar, and they are very close, and sam thought that he was -- that he was doing a, and it's up to the prosecution to say, you know what, nobody could have thought that. that's when you bring in witnesses and documents to say this establishes -- >> i am curious what you think about the credibility of the witnesses that have taken government deals, because most of the witnesses, i believe, are witnesses that have taken some kind of plea arrangement with the government already, in charge part because the government said if you say he's terrible and did all of these terrible things, we will keep you out of jail. if you don't, you know, you will end up in jail. i always wonder how you think a jury in a white collar case considers that? >> before the jury gets to consider it, the prosecution grills those witnesses to make

sure that everything they are going to be saying in court is unasalable. yes, i did things wrong or was sloppy and all this, but everything i am saying today is accurate. the biggest risk is when you have a witness that is impeached on what they are say. >> is it is a problem where virtually almost every witness in this case, the likely important witnesses, would have been witnesses that took deals? >> of course. but that's -- >> that's not all the evidence. there's lot of other evidence. >> yeah, there are documents. it's tying all the evidence together, witnesses and documents and all of those things to have come together in a package. >> how strong do you think the case is? >> i have not gotten into all the evidence, but from what you read with the evidence and the like, it looks like a strong case. >> we were talking about the

price of bitcoin moved a little higher, not as it relates to this but as it relates to maybe the government will stay open and the comment that gary made, had there been a shutdown, there's no i don't know if young there's a better chance of a government etf now that the government is open. >> two things on crypto. one is that this trial at a macro level demonstrates how important our regulatory vi environment is. all of those things are designed to prophylactically prevent what is alleged to have happened here. >> but the other piece is this is a company that was doing its entire business offshore. interestingly, one of the things that has happened, this is an argument that a brian armstrong would make from coin base. you're looking at them opening up elsewhere. they're doing a lot of business in europe, in other countries, in large part because we haven't really figured out what this is

supposed to be. >> this is why i think the next step. so we recognize that. the next step on crypto is incremental. kcrypto is a technology. let's see that technology in our financial ecosystem, in a place where we're confident it's totally safe. so i believe that stable coin, a well-constructed, well-regulated stable coin, is one of those places. i also believe that we've decided every legal question around bitcoin. it is relevant. so, as i've said before, that would make you think that a bitcoin spot etf is inevitable. we know it's not a security -- >> here's a question, though. you were the chair of the s.e.c. what happened between the time that you were the chair of the s.e.c. and now where you could stipulate to the idea that we know all the facts around bitcoin. what are new facts that came to light in the past, since you -- >> there were -- the classification of bitcoin, when i was chair of the s.e.c. had already been decided when i got there. that it was a commodity. that the cftc had regulated it

at a commodity. i was very concerned that the trading of bitcoin around the globe had a large amount of fraud going on. and i was not comfortable -- >> by the way, you were proven right. so what's changed since then? >> there are al of people who do surveillance and the like who are confident that the bitcoin spot market is what i would say is -- has much greater efficacy than it did three or four years ago. >> because you've cleaned out the sam bankman-frieds of the world. >> it's a number of thing. but in the applications -- what i would say is, well-respected financial institutions, new financial institutions, or new financial providers have submitted to the s.e.c., they lay out the case for why trading and spot bitcoin is more efficacious than it was -- >> the washington insider, what's going to happen with mccarthy. you are a washington insider. you know the players, you know everything. >> you know kevin. >> yeah, i like kevin. >> you know gaetz. >> i do not know gaetz.

>> you know any of the freedom caucus guys? >> can i tell you how i look at this? >> tell me. >> if you're on a team, if you're on -- there's always one or two people who don't like the captain. and they are always agitating for getting rid of the captain. like, we don't like where this is going or the coach. the problem is, what do you do day two? what i don't like about this narrative, what's next? what's next for the republican party. and i think kevin, one thing i really like about kevin is he tells you what he wants. if you have to have bipartisan engagement in washington, you can't have it unless you know what the other side wants. >> i mentioned the kane mutiny. everyone was raring to go, until they thought, like you see the reality of what's going to happen, then y'all go on trial and half of them are like, i didn't want to do what i said i did. do you think any of the 20 during the 15 votes, you saw, he which i chipped away and got down to i think 15 finally went with him,

i think. does that happen again this time? does he need democrats to stay, or do you think he'll be able to stay just with his own caucus? >> i would hope that he could stay with his own caucus, right? >> i don't know. >> well, ask anybody in his caucus who's going to go the other way? what's next? what's your plan? >> they don't care. some men like to watch the world burn, from bathmman. some men like to watch the world burn. >> that's good for the movies, not good for reality. >> so you don't have a problem with the way he was able to get the extension for 45 days? you thought that was already? >> looking, shutting down the government, we shouldn't be doing that, okay? and clearly, clearly, at the time that the decision, there was no alternative. there was no deal on the table. >> because the same guys wouldn't let him pass the conservative side of thing.

and when you can't pass that, what -- >> that makes a lot of sense, doesn't it? >> but what do you think the democrats will put on the table now? they'll have to -- end the impeachment trials? >> it's not a trial, it's an inquiry. >> okay. >> look, of course, that would be a huge win, right? a huge win. >> you couldn't do that. >> yeah, i don't think you can do that. >> you think he should? >> no, i don't think that that -- i don't think that that should be decided. >> if you don't ever want to know what was going on, you shouldn't -- a lot of people don't want to know what was going on. but you have subpoena power and everything else in an inquiry. >> i think the american people should see the facts in all of these cases and then i believe in the ballot box. >> all right. >> even mail-in? kidding. all right, thanks, clayton. good to have you on to talk about whatever we ask you, basically. are you not a washington insider? you are, at this point. you know everybody, don't you? >> i don't know.

i don't want know. >> so you think maybe he prevails with just republicans? >> that would be the logical thing. coming up -- do you want to stay? coming up, house speaker ken mccarthy joins us for the latest out of washington. after avoiding a government shutdown, that was -- that's so 2023 in september! now we're in a new crisis! the futures at this hour have worsened. we're getting close to 150 points or so on the dow. "squawk box" will be right back. ice works fast. ♪♪ heat makes it last. feel the power of contrast therapy. ♪♪ so you can rise from pain. icy hot.

good morning. stock futures pointing lower as treasury yields tick higher. the ten-year now above 4.7%. meanwhile, house speaker kevin mccarthy facing a potential ouster brought on by that deal to keep the government running and instigated by a member of his own party. in just moments, we are going to speak with mccarthy live. and it's been nearly a year since crypto exchange ftx imploded. today, sam bankman-fried goes on trial for fraud and conspiracy. we'll are a live report from outside of the courthouse as 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. i'm joe kernan along with becky quick and andrew ross sorkin. as we just noted, the u.s. equity futures week again this morning. it's all about that ten-year, highest level since 2007. every time we get through another new high in yields, it's like, indigestion for the stock market. the dow has been down four out of five days. now 473 on the ten-year. those are the highest numbers we've seen, i think, in a while. house speaker kevin mccarthy helped get a short-term bill to fund the government passed over the weekend, but now he's passing a challenge to his lead

leadership. last night, the speaker tweeted, bring it on, a short time later, gaetz replied, just did. joining us now, speaker of the house, kevin mccarthy. great to have you on, speaker, on a day where you can answer and tell us exactly what's happening. we know, and you've pointed out many, many times you're an optimist. we also know and you have pointed out that your demise has been greatly exaggerated many times in the past, and you will never give up, as you said. do you expect to be able to keep the speakership at least for this next week? >> yes, i do. i go week-to-week. i was just on here last week and you thought all government was going to shut down. and i said, you know what, i'm an optimist and i put my money on myself. i still do, to this day. >> will it -- will you keep the speakership. and we just had jay clayton on, and i know you know jay, but will you be able to keep it purely votes from your caucus, or will you need help from the

democrats, whether some of them vote present or don't show up or actually vote to keep you speaker. will you need that? >> you're asking the question the wrong way. >> all right. >> ask it then answer it. >> will i get removed because four or five republicans join with all the democrats? that's the question here. if 98% of the conference wants you to be speaker, but you create a congress where four people can determine if they work with the other side, how strong is the continuity of your government itself. and think for one moment, last week, we were hemorrhaging on whether we would shut down or not. i made a decision to take a risk to keep the government open. at the end of the day, if i am removed from speaker because i kept the troops from getting paid, they're able to be paid and the border agents are able to be paid, that's a fight worth fighting for. i've always said, i will fight for the american public, and

that's exactly what i'll do and i'll continue to do that. and let the chips fall where they may. >> hakeem jeffries, leader jeffries said that he hadn't spoken yet, but he does -- he will speak to you at some point. have you spoken at this point this morning, have you spoken to congressman jeffries? leader jeffries? >> hakim jeffreys and i have a good relationship. the first thing i did when i became speaker was, i said i was going to treat jeffries the way i wanted to be treated. that doesn't mean that they're going to vote for me. i understand where the democrats are. i'm not asking for any special deal or anything else, but i firmly believe, just like the past speaker, the past speaker was the only speaker who had changed this rule. and it hadn't been used outside of the boehner proposition. i don't think it's good for government. i don't think it helps solve the big problem, especially when it's used by individuals for personal reasons instead of for

ability to keep moving forward. the democrats will have their caucus. their going to decide what they're going to do. and we will live with whatever happens. >> that's at 9:00, i think. and you've got to decide, you're going to have a closed-door meeting, your caucus as well. during the 15 votes to make you speaker, i think you went from -- what was -- at one point, did you have 20 that were against it and you which i happened away during the 15 votes and you got it down to where obviously you're speaker. where are you right now in terms of what are the numbers? do you know, what's been whipped? is it 20? is it 15? is it 10? this has never been done, mr. speaker. this has never been successfully done. it's rarely even attempted. >> it's only been used one time. it's been weaponized now. listen, matt gaetz had planned to do this from the very beginning. he never voted for me. he's the one that challenged. he's the one that wanted to have this rule. he told the conference he would

never use it, but he was going to use it regardless that never happened. he has personal thinlgs in his life that he has challenges with. that's fine. but i think from an ability that we're able to keep government open, keep paying our troops, this is just confusing in the process. but i'm focused on making sure that -- >> he says it's not that. jake tapper, i think, over the weekend, said he had seen evidence that that is what this is all about. other people say it's about becoming florida governor. but you think it's totally about this ethics investigation into -- >> oh, he knows exactly -- he's been blaming me for an ethics complaint against him that happened in the last congress i have nothing to do with. he wants me to try to wipe that away. i'm not going to do that. that's illegal. and if some way i lose my job, because i uphold the law, uphold the continuity of government, so be it. i'll do what's right for the american people and keep working towards that direction. >> speaker, what are the

democrats asking you for? as you try to build support, i imagine, from democrats in this case, i imagine they'll try to drive a hard bargain? >> they haven't asked for anything and they're not going to provide anything. let's be clear, when nancy pelosi was minority leader, she would always come in and she told boehner and paul that she didn't believe in them utilizing this, how they removed boehner. that she would always vote it down, not based on saving an individual, but based upon what's good for government and what's good for the institution as a whole. and that's the question it has to be. are we now in a situation in our government that we just provided keeping government open, that we're going to play politics with how you become speaker? if that's the case, i think we've got real problems. >> has hakeem jeffries said that he agrees with nancy pelosi's view on these things? that you don't want to let a small minority of four or five members kind of push the rest of them around?

>> you know, hakim runs his conference and east going to have a conference and everybody will talk about it. and i'm not going to put hakim in whatever position at all and i respect every decision that every person makes. i can give as good as i get. i know the place of where i'm at. i didn't get speaker on an easy round. it hadn't happened in 150 years, it took me 15 rounds. i will never give up and that's the basis of where we are. what's really difficult here is, how do you run a conference, when we try to pass the most conservative bill that secures the border, and 21 vote "no," they don't allow you to move forward, i move forward and make sure government stays open, and they get upset about that. they're the same individuals that stopped us from passing any appropriation bills. i believe i'm a conservative that wants to get things done. i have some conservatives that don't want to do anything. that is a challenge, by that's the life and what we lead. your viewers get to hire and fire who works for them. somebody else hires and fires who works here.

you know what? i just have to inspire them. and i'll do the very best job i can and we'll live with the consequences and try to focus the public on doing what's right. >> it was almost a trap. if you are the same group that votes against you trying to get something passed in the house and then you have to, you know, go to the other side to keep the government open, they precluded you from being able to pass your bill, and i don't understand what they -- i mean, it almost looks like a trap. it's almost a catch-22. there was no way to prevail, than what you did, unless you shut the government. >> watch the history. after we got through the debt ceiling, the first thing these few individuals did, matt gaetz and others, shut down government. and they started shutting down our ability to bring individual appropriations bills up and they said it was going to be a mccarthy shutdown, because they thought government would shut down and they denied us the ability to have a conservative bill to keep it open and

actually secure the border. and when i kept government open, now that's my fault because democrats voted with me. he just voted with all the democrats to try to get government to shut down. if he is successful today, he would be voting with all the democrats. so you know what? it is what it is, but i have to be focused on making sure can i get the best conservative bills passed to run this government. >> have you heard anecdotally that he's been -- i don't know, talking to even left-leaning members of the other -- of the democratic caucus, to make sure that they go along with him? has he had the same type of conversations that you had to have with, i don't know, you had to -- you needed democrat votes to pass it. has he opinion doing that, do you know? the same people that he -- >> the real challenging part is, he's been offering them subpoena power. i don't know how he has the right to do that, but he's worked it hard. he's worked hard at trying to make this happen. he's focused on doing this. i would rather people focus on solving problems for the

american people. >> will you be able to table it in the first vote, do you think? will that happen? what is your -- >> well, that will tell everything. i mean, you always want me to handicap everything. and i keep giving you the same answer -- >> you're an optimist. >> i'm an optimist. you know what, these are opportunities every challenge before you. and i think if people ranked how many times they would have killed me in the past, i would have been done long ago. but the one focus of why we continue to survive is, what do we focus on? and you know what, i don't think the clock ever runs out. if there's an obstacle, find a way around the obstacle. >> do you have any idea who those -- what do we call them? the gang of-- >> the gang of -- it's halfa dozen? five. we don't know. >> if we knew whether it gets tabled or not, we don't know how many there are. but do they have any idea -- would anyone else take this job? nobody else wants it? >> somebody will take the job?

>> scalise? who would matt gaetz suggest? do they have a successor in mind? matt doesn't have anybody. matt's focus is to trying to just remove me. which is difficult where we have 45 more days to be able to fund government and secure our borders, eliminate the wasteful spending. you report every day on where the ten-year bonds are -- >> there was no deal to fund ukraine, mr. speaker? he said he cut some side deal? >> that's just gaetz with a new attack. he's very good at that. >> gaetz being gaetz, okay. >> yeah. >> all right, i know you've got to run. i don't know what you have to do, but, yeah, we're told you don't have as much time as we normally would. but, mr. speaker, we'll be watching. >> all right! thanks for having me on. >> you're very welcome. thanks for coming on. and bringing us up to date. appreciate it. when we come back, we are going to talk markets on this second trading day of the fourth quarter. right now, the futures are under some pressure this morning. we've seen the dow futures now

off by about 156. started out in positive territory, but as yields have picked up, we have seen declines across the board. s&p futures now down by 22. the nasdaq off by 90. a little later this morning, we are going to get into the impact of microsoft ceo satya nadella's testimony at the former google rm benrust trial. foerid white house antitrust adviser tim wu will be here with us. stay tuned. you're watching "squawk box" and this is cnbc. but the same ai-powered security that protects all of google also defends these services for everyone who lives here. ♪

welcome back to "squawk box," everyone. we are keeping an eye on the markets this morning. as we showed you, futures are under some pressure. you can look to the treasury market to the blame. treasury yields continue to tick higher. right now, the ten-year yielding 4.73%. the two-year is up at 5.21%. that inversion continues across the entire spectrum for those 2-year to 30-year s, all the wa through. the stocks that are putting the most pressure on the dow right now, if you want to take a look at the laggards, intel the biggest drag.

same story with salesforce, you might anticipate technology under some pressure as you see higher yields. nike is also down by about 0.8% and then you've got microsoft. we'll continue to watch this, though. the laggards in the s&p, actually, it's a property trust. essex property trust that is weakest performer. it's down by about 11%. and then we have energy names there. carnival corporation, also one of those laggards. >> meantime, as investors grapple with the idea of fed keeping rates higher for longer, our next guest says she thinks it's going to be higher until something breaks. i want to bring in emily rowland at john hancock investment management. what's the number at which it's a tipping point. when does it break, emily? >> well, we're certainly getting closer and closer. of course, it's hard to identify the exact number, but we continue to see this sort of unrelenting backup in rates, and a lot of it's based on no news. you know, we see this six basis point backup in yields this

morning. i'm combing through the news overnight to figure out what's driving it higher, and there's really nothing fundamental there. we are seeing a lot of momentum here, a big shift in sentiment. there may be some technical factors at play here. but at some point, this is really going to start to challenge the equity markets. we could be looking at some kind of exogenous shock that continues to put pressure on stocks from here. >> what would that be? i guess we're all trying to figure out if and when that moment were to come. and the question is, are we just waiting for the fed for another hike? is that your expectation? or do you think they're not going to touch anything to try to avoid this situation? >> yeah, i mean, potentially. we think the fed's probably on hold from here. maybe there's one more hike coming up in november, but there's quite a bit of data between now and then. when you see this amount of liquidity being withdrawn from the system, it's such a rapid clip, there tends to be a liquidity issue. we never know exactly where it's coming from. i think there are a lot of

candidates out there that have been talked about on the program, whether it's commercial real estate or crypto or spacs or the chinese property market, i think there's a lot of areas that are overlevered in the market today and we'll have to see where that comes from. but i think the key from an investment standpoint today is to minimize exposure to those area that need to rely on leverage, that have to issue debt in this market, and screen for stocks that have great balance sheets, more sustainable earnings, better return on equity. >> but it sounds like under your scenario, you're going to see -- i would imagine, you're calling for equities 12 months from now to be lower than they are today, which in this case, why wouldn't you just be sitting in cash or doing something else? >> it's a time frame thing. 12 months from now, we could already be seeing equity markets rohr. but i think over the shorter term, absolutely. there's one area of the market that's really not priced for a recession unfolding, and that is

high-quality bonds. i know it's scary right now to lean into high-quality bonds at a time where rates are rising at this clip, but there has been a ton of value unlocked. we're seeing the highest yields at over 16 years. investment grade corporate bonds. >> but the highest yields for a reasons, right? >> yeah, i think so. but again, when you see a momentum trade like this, it works like a pendulum. it often shifts the other way pretty quickly here. and i think if we do see prospects for a liquidity event perking up here, you're going to see a bid for treasuries. we're not seeing it right now. it doesn't feel that way, but ultimately, as bond markets re-price for a recession, that fall in yields could be precipitous. we're expecting there to be a lot of value unlocked in high-quality bonds, and even the income there is enough to potentially overcome some choppiness in rates from here, as we wait out this very sentiment momentum-driven market. >> when you say short-term, war

you thinking? when you say long-term, war you thinking? when you're talking about the market maybe recovering longer term. >> three to six-monthish would be short-term. we look at things like the leading economic indicators index, which have been negative for 13 months in a row. the longest we've ever seen that happen without recession unfolding was about 16 months. the yield curve has been inverted for 14 months. we've seen that happen for up to 17 months. so it's not a perfect science, but you know, you could see a period in which recession, maybe q1 of 2024, we move through it, and then we get started on an early cycle, and we think that's going to be a great buying opportunity for equities. >> but you think it's going to be a shallow recession, right? >> i think that's sort of what everybody's hoping for. you know, we don't think it's 2008, but we don't necessarily think it's great. so we're going to have to see, you know, unemployment is likely to go up here. we're seeing those cracks in the labor market forming.

we want to be mindful that the unemployment rate rising is the last shoe to drop here. >> my one problem with all of this is, if you're suggesting 12 months from now we're actually on the other side of this, nobody's good at timing. yes, it may get worse in the next couple of months, but if you really genuinely think that things are better a year from now, wouldn't you just stay on the same track? >> yeah, it's a great point. and we all know that equities are a powerfulcompound er of wealth over time. and these can feature big moves higher in risk assets. we want to be there and participate, but it's about owning hire-quality stocks. we're finding that in mid-cap equities, that are trading at the steepest discount to large-cap equities since 1999. we're actually looking at defensive stocks, as an area where the baton can be passed, as we head into next year. so we want to be there.

it's just about managing risk and letting bonds do a little bit more heavy lifting many portfolios, as we ride out what i think will be a challenging environment through the next three to six months. >> fair enough. emily, thank you for joining us this morning. appreciate it. >> thank you. >> coming up, we are going to take you downtown here in new york where the conspiracy and fraud trial of one-time crypto king sam bankman-fried kicks off today. first, as we head to break, here are a few of today's top free-market stock movers. price target changes for tesla, jpmorgan upping its target to $135 from $120. and goldman sachs lowering its target to 252 from 265. key bank downgrading airbnb to sector wait from overweight, saying it sees risks following leisure travel's recovery and a significant margin expansion. and bank of america adding fedex to its u.s. 1 list.

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welcome back to "squawk box." cnbc launching a new initiative to recognize women that are making waves in the business world. senior media and tech reporter

julia boorstin is here with that news. good morning. >> good morning, andrew. i'm excited to announce that we're launching cnbc changemakers. women transforming business. this is a new franchise in an annual list of trailblazing female leaders. the list will be unranked. it will focus on accomplishments in the past year and feature women from across all sectors of the economy, including philanthropic organizations. and we'll be publishing this list in january. we have put together a stellar advisory board, which will be joining me and the cnbc editorial team to help determine the weight of qualitative and quantitative criteria. the list of advisers includes sheryl sandberg, lorraine jobs, kris jenner. applications are open as of today at female leaders in private companies and organizations including philanthropic organizations with at least $25 million in revenue in at least one of the past three years or an enterprise

value of at least $100 million. women at public companies with a market cap of at least $250 million. for more information about our inaugural list, you can find the nomination form at cnbc.com/changemakers or you can scan right here to apply. so andrew, i'm very excited to help service the stories of new icons of innovation and their leadership approaches that can really inspire anyone. >> and of course, you wrote a great book about women and female leaders. we had the cnbc disrupter 50 list for a while now. something that you also created. what inspired you to create this list? >> well, it really was my book, andrew. i wrote, when women lead. it came out last year. what i found in not just reporting that book, but in book tours around the country, talking to women and men in all sorts of different companies is that there's a real interest in demand for content, not just about the few women who are running the big fortune 500 companies, because women are

still very much underrepresented, running just about 10% of the fortune 500, but really to learn about the women who are changing business at start-ups, at divisions of companies, and really having a real impact on what the future of business will look like. so i hope this will surface a lot of new names, fresh faces, people who we can learn a lot from, though we may not be familiar with them right now. >> what are you going to do about private companies that don't publicly disclose their revenues? how's that cutoff going to work? >> andrew, luckily we have a lot of experience with the disrupter 50 list. and 11 years ago, i helped create the disrupter 50 list, so we have a form that applicants can fill out, where they can submit information about their private companies and they can submit information about sort of the range of revenue or growth rate or et cetera that they're in, so day don't have to publicly disclose anything. so the template that we have for disrupter 50 to really create a

really rigorous evaluation process has been fantastic for this. >> okay, we've got to go, but i'm looking forward to january. why no ranking? people always love, you know, a letterman style top 10. >> well, we're not going to rank it, andrew. we think it's important to surface all of these women, and if they're worthy of being put on the list, we're not going to put them in order. >> julia boorstin, we look forward to seeing you a lot before then, but in january. up next, former biden administration tech adviser tim wu is going to tell us if he thinks google is currently in trouble or in the clear, just based on their testimony so far in the company's anti-trust trial. we'll get his thoughts on what the government's larger plan is here. also, a reminder, as we head to a break, you can get the best of "squawk box" in oufarir vote podcast. just follow squawk pod and you can listen anytime. we'll be right back.

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welcome back to "squawk box" on cnbc. futures right now down 150 points, right about where we've been for the last hour or so. we started in the green, as it

happens frequently in recent sessions, we're now down. dow has been down four out of five days, could be five our six today, but we won't know that until 4:00. >> let's get you through some of the big headlines. meta could soon begin to charge european users for ad-free access to facebook and instagram. "the journal" saying the price for mobile users would be about $14 a month with sources saying that europeans could either pay the fee or continue to access facebook and zbram for free, only with personalized ads. it's an interesting sort of workaround. meantime, gm and ford saying they're indefinitely laying off more workers at four midwestern plants. that's thanks to the ongoing auto workers strike. the furlough was affected by 500 people at facilities in illinois, indiana, and ohio. gm saying it met with united autoworkers leadership just yesterday. the uaw issued a counterproposal last month, but the automaker said significant gaps remain

between the two sides. and the supreme court set to hear arguments today, challenging the funding structure of the consumer financial protection bureau. the bureau was created during the obama administration, in the aftermath of the global financial crisis. it's been a perennial target of those on the right. this is a key case between the high court could rule against the cfpb. it could threaten funding for other government agencies like the s.e.c., the fdic, and even the federal reserve, and to make it even -- i don't know, i want to say crazier, but to explain how big a deal this is, it is possible that if the court were to rule, that the cfpb shouldn't even exist. it could also rule that every decision the cfpb has made, including fines and the like over the last dozen years, could somehow be upended. i think that's unlikely, but if you actually read the decision that is being appealed to the supreme court, there is language in there that suggests that that

is potentially up for grabs. >> hope springs eternal. >> it would literally be like putting yourself in a time machine a dozen years ago. >> if only. >> and wells fargo would be, you know, thrilled with this. i know you want to go back to -- >> if only. >> but think about all of the banks that have paid fines and other efforts to -- >> it would be a lot to unwind, but yes, a lot riding on this court decision. >> the chances of that i think are low, but we'll see. >> microsoft ceo satya nadella says that google's internet search dominance leads them to shape their own requirements to google's requirements. that puts competitors like microsoft's bing search engine at a disadvantage. that della made those comments at google's antitrust trial that was brought by the u.s. justice department. for more on this, let's bring in tim wu. a columbia law school professor that served as an adviser to the biden administration. he's known as an architect of

its antitrust policies and has been closely following this google antitrust trial. tim, what do you think so far of what you've heard in terms of what this means for the government's case? >> i think the government is doing pretty well. i thought yesterday's testimony was very strong. i feel that they're making a strong case that it was an uneven playing field and goggle is using its money to make itself win. >> yeah, that's definitely the case that they're laying out. one of the throwaway lines we heard was that satya nadella had to admit that the most searched word on bing is google. when bing comes up, people try as fast as they can to get away from it. what does that tell you? >> i think they scored some points in cross-examination, but the main question here is not whether people can switch from google, is whether they do. and i think they have very powerful is that google for it's whatever $18 billion a year was getting something. there's this huge payment. is google just doing this for

fun? >> i almost looked at the other side of it. the argument that's come back is that they're the best search engine and that's why we kept them there. if they're the best, why are you making them pay? and if you're paying to keep it, it means that somebody could come in and i a higher price. >> think about cable news networks, who pays who? it's all kind of backwards here. >> what i also don't understand, why behaviorally, there's a behavior issue here, which is you're arguing the government is arguing that somehow this is a monolith and that the switching costs are very high, that users just don't do it. that's almost like a behavioral science issue. by the way, you could argue that lina khan's case against amazon, and suggests that you're living inside this amazon world and you can't get out of it and you're stuck inside of it, to me seems slightly challenged insofar as very technically, it is much easier for me to go from google to bing or amazon walmart than it is for me to go from that

store across the street to the other store. i bhmay not want to, but this i like -- technically, super simple. the fact that people don't do it, who's fault is that? >> yeah, i think that is the core of the defense. but i think that the tech companies have been very smart nun in understanding, if you set up absolute walls, if you have contractual restrictions, you'll lose in court and make people mad. it does depend on this idea, the illusion of choice. and i feel like they know this. it's a strategy. >> but is it an illusion or is it real. i think i can go from google to bing pretty quick if i want. i may not remember to. >> you could technically change your bank, for example. how often do you actually do it? you know what i mean? >> but the point of -- for changing a bank account, from one bank to another and going from google to bing are like night and day, because it's so much easier to go from google to bing. that's sort of the point that they would be making.

>> your word choice was sb interesting to me, the illusion of choice. not really a choice. >> you chose that carefully. >> you also have the technical possibility of choice. i think these companies are strategic, they understand behavioral exhibition, they understand humans, they understand what we respond to. and they have exploited those tendencies to maintain their monopolies. it works. and in the old days. >> but isn't that what companies do, too? >> sometimes it's anti-competitive. in the 19th century, they used contracts, much -- >> anticipate what my customers want and try to satisfy that. they're doing that to try to be better than the competition. >> either buy them out or use behavioral tactics to try to make sure they don't switch. >> and that's stuff that the government had had on its side is the former google employee who basically said, yeah, we had such a lock on things, you could make -- rip up the monopoly books or the exhibconomics book because we had a virtual

monopoly, because they could go and do this and behave however they wanted because nobody could get a leg up on them. >> i think that's the evidence. >> the issue we know, we always talk about that, it's not illegal to be a monopoly, it's illegal to -- it's potentially illegal in how you create that monopoly and it's potentially illegal what you do to try to maintain that monopoly. this, i imagine, is in the maintenance category. >> yes, wthat's right. >> right? >> yes. >> so if they didn't make these payments, what do you think would happen? is it the number? if it were a lower number, would that be better? >> i think it would be relevant. if you disabled all of google's tactics, which are anti-competitive, like many other markets, there would probably be two or three, kind of. i think bing would have probably hit scale. maybe some others hit scale. it's like light beers, you have two or three rental cars. i think it is a little weird that google has this monopoly for a long time. you dig underneath, you find out

they're spending tons of money to keep it. with amazon, they have a monopoly, okay, fine. what they do is they punish people who are trying to sell for less than other platforms. so you're trying to sell your widget for less on, i don't know, best buy or something. they punish you. and so -- >> but don't walmart and other ex competitors do that, too. we're promising an everyday low price, we want to be the cheapest -- >> everyday low prices -- low-price guarantees are actually very anti-competitive, even though they sound good. because it means they're preventing you or punishing people who are trying to discount -- >> i'm the consumer. i'm cool with that, though. >> the consumers are actually getting fooled. when hotels.com says guaranteed best price, that means they're preventing the hotel from discounting for 30% to get rid of that hotels.com margin. you see what i mean? so actually these guaranteed lowest prices -- >> that's a tough case, to convince people that they don't realize that they're getting ripped off -- >> you need to convince the

judge that it's an a anti-competitive -- the airlines can say, you can switch for 24 hours, that's because we force them in the federal government. >> back to this idea, though, that the most-searched-for-word on bing is google. that means that consumers even when they get trapped on bing, they want to get away from it. >> it is a damaging fact that i also i think that it reflects the fact that bing has not been able to get to scale. that is part of their problem. google has kept these guys -- >> do you believe they haven't been able to get to scale because the product is just as good, do you believe that google's product is better because more -- i mean, there is an argument to be made that google's product is better, because more people use the product, therefore the data and information that they're able to collect makes their product better. >> it does make their product better. but at some point it starts to plateau and the main advantage to them is denying scale to others. that has been the number one offensive weapon in silicon valley the last decade, is denying scale.

and i think it results in just having mono products for a lot of areas where in some other areas you have two or three and i think two or three is better for competition, or at least so the law suggests. >> can i go back to amazon for a second? >> sure. >> when you think about this idea of them charge organize saying, look, if you're going to be on our platform, we want to offer the best price on our platform. by the way, seems like a rational act, right? that doesn't seem irrational. before you even get to the point of whether this -- there has to be proof that this is a monopoly for this to be a problem, right? if i had a little shop in the corner over here and i was doing this, nobody would -- everyone would think that's very rational and normal. the question is, how do you actually define the market that is amazon? again, this goes back to the switching costs. amazon would claim they own 4% of retail, right? so they take the pendulum and put it over here. the government right now would put the pendulum all the way over here and say, it's this thing called a superstore,

which, by the way, i've never even heard of that as a market, like a singular market before. it's probably somewhere in between, no? >> right. this is the challenge. the way the ftc is approaching this is to rely pretty heavily on direct effects of market popour power. if that little store in the corner tried to say, hey, if you sell for less anywhere else, you're out of here. people would laugh at them. a lot of what the government is relying on is direct affectability of amazon to get this out of people as proof that they have monopoly power. it's a technical demonstration, sw we'll see how it goes, but it's clear they're relying on this direct theory of market power. >> if the government wins its case, either with google or with amazon, what do the remedies look like? you're not talking about a breakup, potentially? z . >> of course we're talking about a breakup. you have to start by talking about a breakup. >> really? >> yes. >> to that point, don't you think the government is on them

to say what they want? they have not stated that they want. >> it's baseball season, you don't reveal your roster until the last minute. i think -- >> but that's what they want? >> baseball? no. >> that's what the government wants -- you understand this, you are an architect of all of this stuff and the goal is to break up the companies? >> we are not taking structural relief off the table andbreakup s have historically been the most effective remedy. so that's where it starts. divestiture is what we're talking about. chrome browser, does google need chrome browser? does amazon need to own amazon fulfillment. there's a question. would you have more competitive markets without these? >> would you break off aws, amazon web services or just the fulfillment and you can't be both sides of it? >> i think it depends what the facts reveal. >> and if you break off amazon fulfillment, does that mean that every ecommerce company or every retailer can't have an ecommerce side of things as well with their own fulfillment? do you the same with walmart? >> no, it depends if you're a

monopoly and engage in monopoly maintenance. that would be the argument. >> wow. >> but you start with structural relief and work backwards. >> okay, tim wu, thank you. that's eye opening. that's more than i anticipated. >> i'm afraid. be very afraid. tim, i look your beard, dude. it's super wuster. >> yeah. >> i can't believe that. he said he doesn't like it. i like it. when we come back, ftx founder sam bankman-fried goes on trial today in a case wall street and crypto investors alike will be watching closely. and kate rooney is outside the courthouse in lower manhattan and is going to join us next. kate, what do you have coming up for us? >> joe, u.s. prosecutors have said that this is one of the biggest financial frauds and crimes in u.s. history. today, the defendant, sam bankman-fried, gets his day in court. trial kicks off today. we have jury selection. we'll have all the details coming up when "squawk box" returns.

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welcome back to "squawk." the one-time crypto king sam bankman-fried going on trial today to face fraud and conspiracy charges. kate rooney is at the center of the action in lower manhattan right now and joins us with the latest. good morning. >> reporter: hey, andrew, good morning. so this trial today will decide whether or not the former crypto billionaire's blow-up amounted to fraud or if this was just a

case of failed risk management, as he argued. the trial starts today in lower manhattan, where we are right now. this morning, we have jury silicon valley kicki selection kicking off. it's going to be roughly a six-week trial and it's kicking off this morning. a busy line of media lining up behind me here. sam seven counts of fraud and conspiracy. to get a sense of the scale of this alleged fraud, investigators said the time of the collapse, $8.9 billion in customer funds were missing. prosecutors have accused bankman-fried of syphoning money to his sister hedge fund called alameda and using that to enrich himself and other insiders and also main campaign donations. all this started when he resigned as ceo. the company quickly filed for bankruptcy. he was arrested inthe bahamas in january. he pleaded not guilty.

he was out on a $250 million bond. in august the judge revoked his bail after he says bankman-fried violated those conditions. he's been in custody and is expected to arrive in court this morning. he's arguing he didn't know about some of the financial issues at ftx. prosecutors need to prove intent on the side of bankman-fried. four of his top lieutenants have pleaded guilty. legal experts tell me it will make that case especially challenging. at least three of those executives plan to testify. caroline ellison is bankman-fried's former girlfriend as well as ceo. she already said she knowingly misled investors. >> kate rooney, we'll be watching all of this and i know we'll be visiting with you many a times throughout the trial. thanks very much. joe, i don't know if you saw this -- we actually published it

this morning. the questions for the jurors, tell me if you think you can be an impartial juror. do you have a negative opinion about cryptocurrency? i think you're going to say you like cryptocurrency. >> prime. >> if a company involved in the crypto industry or financial industry fails, do you feel that only the owners of the company must be to blame? >> throw away the key. i don't want to sit on a jury. these are the answers i give when they ask me to sit -- >> do you have negative opinions about amassing wealth to support causes to help others? >> i don't know. what? >> finally, the defendant in this case has adhd which might affect things like his physical behavior, body language or eye contact. please raise your hand if you have never had any personal or professional experience with adhd? do you have any opinion about the fact that the defendant may have adhd. >> is that what he has?

>> these are the questions asked of the jurors. >> i think asd almost? >> he has a whole bunch of other medical issues. these are among the questions. >> i don't want to serve. >> i know you don't want to serve. >> it's going to be a long trial. >> have you seen the show "jury duty" yet? >> no. but i get called a lot. >> on amazon, do you not know about that show? >> i don't want to watch it. >> it's hilarious. do you not know about this. it's the ultimate truman show. basically one person has been brought in to be a juror. everybody around them are actors, and they have no idea what is going on, and the whole thing is a farce and they're like completely out to lunch. there's a hilarious scene early on. i won't get into it. those who know the show know what it is. this is one of the most popular

shows now outthere. >> it's like a punked thing. the poor person in the middle -- >> so funny, but all has to do with jury duty. >> if you've served on jury duty, you know it's probably not too far from the truth. >> you've got to watch it. anyway, joseph. >> coming up, we'll talk markets and get you ready for the opening bell on wall street. throw away the key. you can always watch or listen to us live using the cnbc app. stay tuned. what's that movie? hang 'em high? stay tuned. "squawk box" will be right back.

a little more than half an hour until the opening bell. joining us is joanne feeney, partner and portfolio manager at advisers capital management. how many times do you say interest rate or the fed every day, joanne? anything else pertinent? >> far too many times, joe. it's obviously the key topic for the macro perspective on the markets. obviously, we like to do, since we're selecting individual stocks for our clients is look at the companies themselves and figure out in this market, in this environment, which companies can still do well.

as i like to say, let's make sure we recognize consumers are facing more challenges and own a company like a tj maxx or mcdonald's for example. >> don't you have to decide whether you're going to tighten too much and cause a recession? you need to try to figure out exactly where we are in the economic cycle. do you think what's happening in the industrials or other indicators show you we are headed for the recession that i guess was taken off the table about three months ago? maybe it's back on. >> it's still up in the air. we don't know how much more work the fed has to do to get inflation all the way down to its target. there's still chatter of another rate hike this year. we don't know. clearly the consumer has been a lot stronger than expected, probably because their real disposable income has risen as inflation has come down. they're able to buy more stuff. the higher rates are a bigger

concern for not just the consumer to buy the next car or next house, but for firms, how much they're able to invest in new factory equipment. we like companies that have cash on their balance sheets, do their own investing without having to borrow right now. we also like to lock in dividend yields for our clients because that's one way to wait out the turmoil we think is likely to persist a little while longer, whether that's a cisco or a broadcom. look for companies with solid balance sheets to be able to ride this out better than others. >> would you ever tell your clients to put a lot of money in bonds, long-duration bonds? or do you just like stocks all the time? >> no. we do both here. i help manage the balance strategy. clients with their adviadvisers whether in-house or with advisers are able to select their own equity fixed mixture. right now our fixed income team is having a lot of opportunities

that they're finding doing their credit analysis. we're not long duration here. we're actually maybe duration of three, four, fivish years. right now you don't want to go too long because interest rates are going to come down at some point. that could be a good thing. you want to lock in some yield while you can. so that sort of duration a little shorter than the average corporate bond is a good opportunity. >> got to go, joanne, thanks. time for "squawk on the street." make sure to join us tomorrow. ♪ good tuesday morning. welcome to "squawk on the street." i'm david faber with jim cramer. carl has an assignment today. he'll be back tomorrow. a look at futures before we get started with trading 30 minutes from now. we're set up for -- >> yeah. >> a little open. >> let's not be too negative. >> okay. let get to our