good morning, everybody. welcome to "squawk box" right here on cnbc. i'm becky quick along with joe kirwan and andrew ross sorkin. yesterday we saw the markets higher, this morning you're looking at some red arrows, dow futures in particular are down, off by 126 points, the s&p indicated down by 16. the nasdaq down by 45. this all comes after a rebound of the major indices yesterday. because we were looking at yields that finally came down because of the jobs report, you'll see right now for the week the dow is down about 1.1%. the nasdaq is still is in positive territory but treasury

yields the big story yesterday. again, those yields came down as we looked at a jobs market that was weaker than anticipated. this year the 10 year is higher. the 2 year is just above 5%. we'll be watching this very closely. yesterday's story on crude oil prices, investors are worried that higher borrowing costs could dent. people worried that maybe those higher prices are starting to impact demand. this morning, you can see wti at 81 81.30. >> meantime the house speaker's gavel up for grabs for the second time this year, congressman jim jordan and steve scalise considered front-runners. they've been making pitches to

colleagues. now, two house members floated former president trump as a potential speaker, a position that doesn't need to be held a house member, donald trump currently the defendant in a trial. asked yesterday while attending that trial whether he would agree, he would do himself -- >> truth social posted a photo of him holding the speaker's gavel. we'll talk to bill daley about the race for speaker. >> watching a competing network yesterday, somewhat friendly toward the former president from time to time. twopeople, female anchor said,

when they did this story about trump being speaker, i wouldn't wish that on my worst enemy. >> meaning? >> speaker of house or meaning -- >> cthe other anchor, what? she said, oh, no, i meant that's such a bad job i wouldn't wish it on my worse enemy. i wasn't saying, the guy went, okay, just want to make sure. >> still on point. >> very telling. very telling. healthcare workers at k kaiser -- >> what do you make of the gag order on him and these rants that he goes on and when is he going to be -- honestly thrown in prison by the judge. >> do you think that's a good idea? once again? >> law and order doesn't matter. >> once again that adds to his

martyrdom in america. >> sure, at some point you can't run around as party on either side and say you care about law and order and allow these things to continue. it's obscene. it's on scene. it's disgraceful. there's not freedom of speech when you're in the middle of a case. >> that's true. the attorney general did, the last attorney general didn't bring a case, this attorney general said, elect me because i guarantee you i will -- my entire job will be about trump and then it happened. it seems like it's -- it does seem like if it wasn't trump and maybe if he wasn't running again -- >> the judge ruled on that. trump was saying 80% of the charges were past the statute of limitations. they're not. the judge said yesterday that's

not the case. he said he's going to appeal on this. that's not the case. >> he said, i don't know anything. >> there's a very funny i don't know if it's on tiktok. someone has done a curb the enthusiasm thing or seinfeld, they introduce each person and they have the little chyrons. moving on healthcare workers at kaiser are expected to strike for a second time. workers in washington d.c. and virginia are expected to return to work after a planned one-day walkout, while strikes in california, oregon, colorado and washington state are expected to continue today and tomorrow, acting u.s. labor secretary has

met with both sides, her department said she's working to try and help reach a resolution. now to the latest on the auto workers strike, negotiators for uaw and ford signaling progress. amid talks that were described as really active, according to a report that said that the talks have been active with the other auto workers, uaw president shawn fain is expected to update union members tomorrow. with the targeted strikes reaching their third week. later this hour we'll hear from the head of auto parts supplier and industry group about the impact of that strike the uk's anti-competition regulators are launching a new probe into microsoft and amazon. whether the cloud services made it difficult for businesses to switch cloud providers. the media watchdog there stated

that the process, started the process referring to inquiry for further investigation into the competition and market authority, remember the cma, we heard so much recently about them, there's nowhere to really appeal. the head of ofcom told cnbc it wasn't clear that competition was working well in cloud services. clorox disclosed that it was a target of a cyberattack. now the company is warning that the disruption will have a major impact on its sales and profits in the quarter that ended last week. it expects sales to drop 23% to 28%. clorox said the cyberattack is now contained but the damage continues to hurt production. bloomberg reported yesterday a hacker group is suspected to be

tied to the attack on clorox, the group also connected to recent casino attacks. it's very good at calling into helpdesk operations pretending to be an employee to give them enough information to hack into these systems. they say you shouldn't pay the ransom but if you don't you're looking at sales down 28% roughly. >> they ask you for money in bitcoin. says a lot about a lot. it does. >> you still can trace it. it's just easier to do it that way. you can still figure it out. that's the big ransom hack.

i didn't like the morning show the latest version -- >> i haven't watched it. >> the plot involved -- >> i don't want to know the plot. >> can you talk him down? is that possible the ransomware people k you negotiate? >> maybe you can. i don't know. when we come back, we'll talk about this big move in treasury yields. later, congressman brian fitzpatrick will join us on the speaker's race and what comes next and you're watching "squawk" and this is cnbc.

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welcome back. treasury yields pull back from multiyear highs following weaker than expected jobs data. uncertainty remains over what fed's next move will be over the fight with inflation. the panic attack, is it here? is there a lot more panic to come? >> andrew, this is clearly a

panic attack whether there's more to come or not it's not clear and the reason is, it all happened suddenly, there was no development of fiscal deficit, on top of that, we've had pressure from inflation and so it's not as if the bond market has some new information. but the panic attack came i believe because they essentially found that the fed was not responding to the increase in interest rates, there was no statement being made and suddenly they piled up on each other to sell the bonds and it pushed the yield up, but that brings its own end, andrew, after a period of time because this is going to cause a shock like i've been talking about your program, a clear development -- my particular target is the banking sector, you're going to see more flow out of regional banks, but

today, six month treasury bills crow can get 5.6%. no reason why you should be keeping your money in regional banks. that's going to happen. the second is, you're going on have to banks cut back on lending as a result of all of the regulatory checks. so i think if you asked me what's the absolute, absolute peak right now, andrew, i'd probably say 5% but i doubt we'll even get there. >> what do you think, if something is to break, what is it first? the regional banks? >> i hh crisis but much worse than in march. second it spreads to some of the larger banks, larger bank share prices have been under pressure. and what happens with the

pension funds. remember, the uk pension funds in september of last year have an interest rate shot up on the bond yields, had massive losses, so if that happens you're going to have public pension funds in the united states lose money, they have to go to the treasurers of different states asking for higher taxes or reducing the benefits of employees, that's not acceptable. third shock the commercial real estate crisis which we have been talking about is likely to get even worse with the fact that the bond yields are much higher and various interest rates are going to rise as well. >> you told us everything bad that could happen. is there a scenario in which what you have taken place over the last 48 hours or the last somehow reverses itself in short order? >> you ask for good news,

andrew, the good news comes anything like a, will cause the federal reserve to shift. increasing interest rates and quantitative easing, switch to quantitative easing in march when the banking crisis came and remember we talk about the 10 year yield being as high as to was in 2007 and we know what happened that year, that caused a great financial crisis to begin, so all of those -- >> you just told me you were going to tell me the good news. >> that's the good news, you have rally in bonds and you have rally in equities as the fed comes to the rescue and inflation comes down, but something has to break in is system before you get the good news. >> the good news is something that's going to push the market down, to this point every time

yields go up the stock market drops, equities drop because there are concerns about higher interest rates. under the scenario you're describing interest rates would come down but not for a reason that the market would like, that's your definition of the good news? >> it would put pressure on stocks in the short term, becky, but if you had the interest rates come down, and if the markets realize that fed is on their side now, rather than fighting inflation, that's going help equities. think about march of 2009, we had, again, interest rates came down from december 2008 for the first two, three months of 2009, march 2009, march 9th, with the bottom for the s&p index and after that we had rally taking place in equities, so that's what it can do for you.

>> there's a top story on the wall street journal right now online, rising interest rates mean deficits finally matter, that's an even bigger issue in terms of the government and the larger picture. how do you think that plays into it and the potential government shutdown? is this something that's much more specific to the banking system and the like? >> we'll keep talking about it for a while, andrew, but right now, that's important the fiscal deficit is large, that's partly what prompted the interest rates to go up and interest rates going up in turn will cause the fi fiscal deficit to worsen. if you have a shutdown of the government on november 17th the next deadline date, and if there's a total grid lock in government after that, that might help bring some of the deficit down and that might be a

positive as far as interest rates are concerned but it doesn't happen by itself, second thing that's helping in terms of the deficit front is that you don't have a credible alternative to holding u.s. treasuries on a global scale, the euros are not yet big enough, tso if you don't like u.s. treasuries there's not much elsewhere you go. >> you left us with a lot to think about so early many morning. enjoy your time across the pond in london. when we come back, we'll give you a sneak peek at this year's hot holiday toys, this is all coming as we approach the holiday shopping season, that's right, it's october, but people are getting ready for it. as we head to the back right now, check out today's big consumer statistics, 69%, more

than two-thirds of consumers with student loans say they're cutting back on spending. that's according to keybank's consumer survey published this career. the resumption of loan payments remains a significant headwind. clothing, restaurants and travel where boowrrers plan to cut back spending. "squawk box" will be right back. tending hives of honeybees, and mentoring a teenager — your life is just as unique. your raymond james financial advisor gets to know you, your passions, and the way you help others. so you can live your life. that's life well planned.

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the countdown to christmas is on with just about 80 shopping days left. we're counting days now. will the retailers be able to count on toy demand to get shoppers online?

a look at this year's toy trends. >> i've started shop zblg me, too. because i don't want to be stuck at the last minute. >> the holidays are around the corner. this also comes at a time when consumers are fighting through compounding economic pressures it seems like there's another one every day, while total toy sales are expected to fall year over year something consumers find to buy is toys for christmas. inventory is solid. toy prices are down about 2.9 .over last year, many of the hottest toys this season ring of nostalgia, the barbie dreamhouse is on many hot toys list, runs about 200 bucks, though. nintendo super mario game is out

soon. today's updated versions will pop up on many lists this year. then also newer toys like the lol surprise magic flier. walmart and target have increased their shares of toy sales. macy's had success with its toys r us shop in shop. everybody is trying to get a's po of the toy action and bring consumers in. >> when toys r us went under and fao schwarz shut its doors. they came back in iterations. now it's much more fragmented. >> over time, walmart and target started to grow their share of

the market. it's a pretty fragmented industries. there are still a lot of mom and pop toy stores. lot of independent buyers that are coming to look at toys to buy for the next season. >> tougher to figure out what the hot toys are. >> with the exclusive retailers have, if they have the lol dolls in certain color and your child wants it you have to go to that retailer. it makes hard to compare. we ran through, which ones are popping on a lot of them and the super mario game is out soon, getting a lot of reviews and that's popping up on a lot of wish lists. coming up, bill daley joins us next on the turmoil in the house and the candidates so far that could be the next speaker. as we head to break a look at

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good morning. welcome back to squawk box. checking futures right now, you can see we're under a little bit of a pressure, after a kind of a wild day yesterday. it did recover. people watching the 10 year yield very closely and some movement in the equities market. some swings yesterday, finally closing higher after 4 out of the last 5 days prior to that the dow had been down and i guess is even for the year, down a percent, still slightly down for the year. >> relatively flat to just down. watching pretty closely after

having some big gains earlier. we'll continue to see. republicans are hoping to hold the speaker vote early next week. our next guest said whoever the next speaker is will most likely have to shut down the government to prove they'll be tough in that role, joining us mow is former white house chief of staff to president obama, bill daley, who's also vice chairman at wells fargo and bill, 50 different directions i want to take you not only politics, what's happening with yields, the banks, lots of things happening. let's start with what's happening if the house right now. >> kind of reminds me of the movie talladega nights, ricky bobby is running around screaming anarchy. the vote will be going to be next week. steve sc a, will, ise and jim jordan, jordan will win.

i bet on jordan. he has to right before thanksgiving do what mccarthy wouldn't do is shut down the government, or cause the government to shut down because the deal they'll want with biden and the senate. it comes at a time where the economy is lots of different messages going on about how strong it is, getting stronger or getting weaker, the rates, a shutdown that could last for a while would be disruptive to the eco economy. >> what's going on? >> everyone's got an opinion and nobody really know, the rates as the fed has said, they've been very clear, rates will continue to go up, we can all argue and everybody does about how much more but i think there's no question this will be additional rate increases the economy is

overall strong, we have a great economy, but we have to get used to a very different world that we've been in the last 15 or so years after the collapse in '08 and we have to get used to nonzero rates. that is taking a while. we have higher rates than most people have seen over the last 15 years obviously, but historically, they're not that high compared to what many of us have lived through. >> they're not but we're dealing with budget deficits that do start to matter. if you're talking about recession that follows that you're talking about gdp coming down and much higher debt to gdp ratios the question is, that doesn't matter until it -- >> matters. the deficit, there has to be action take on the deficit. rates will go up for a while.

i don't thinkthey're long term. hopefully if things settle down politically, hard to believe over the next 16 months we'll get some reason in this. >> think there's a potential for something to break, the transition period creates the break, something faerlts along the way. the government shuts down in the middle of november. to downgrade our debt more. that creates its own sort of self-fulfilling a problem. layer in the presidential election what you think that means politically for the parties as this plays out. i think by the way for the democrats there was a view if the economy could just hold, you know, the current president would still have a shot. if things get meaningful worse from here and this is the

beginning of that, it gets a lot more complicated a lot quicker. >> as president clinton's campaign showed it's the economy, stupid, it's always the economy. >> the challenge -- there's nothing for the white house to do. >> they're just a side bar to this fight that's going on in the congress, but i do hope that the leadership of the house, when it's settled will realize that that a shutdown that may last a long time could be extremely damaging to the economy right now. >> isn't a shutdown, the political part, isn't a shutdown ultimately worse for the current president than for the republicans? >> well, long term -- short term it's bad for the republicans. long term it could be lbad for the president. >> bill, the idea that the white house has nothing to do with this, they do have something to

do with the massive spending plans they put in place that have led to additional inflation, not they created all of this. a lot of this was supply chain. the packages they're spending right now. >> they don't have anything to do with who's the next speaker and what the deal is that has to be made to make somebody a speaker in the next week. that's what i meant. >> you think the odds of a shutdown have gone up. >> i think they've gone up sub stan shlly. >> 90% chance there's a shutdown. >> 90%. >> i just assume there's shutdown. a day -- >> much longer. >> a month in. >> yeah, at least a couple of weeks until you get to christmas, holidays, the one date that forces the politicians before they run home for the holidays to take some action. so between november 15th --

>> 17th. >> 17th until the 22nd of december, i can see -- >> could you see the republicans, it doesn't help them, extracting something that would make it worthwhile -- >> mccarthy thought he had extracted something that was worthwhile and it didn't work. extract enough from biden to satisfy that? it's hard to see right now, joe. >> impossible to satisfy those eight to 20, whatever. could anything good come from it? i can't understand, i guess for their constituents in the deeply red areas they represent they could earn some credibility there, but usually hurts them, why go with it then? >> it always hurts the party --

>> we got $400 billion -- >> raising the bar again. didn't take a victory, of course mccarthy and a vast majority of republicans in house thought was a victory on the cr, they couldn't take that and pocket that and move on. they could have run in their districts, they weren't going to get beat on that deal and it's befuddle me from a political sense why in god's name they made this fight right now. >> it was 4% decided. the befuddlement with the 4%. >> it will be interesting whoever wins this, will it change the number needed to vacate. newt gingrich pushed out by a similar sort of situation a long time ago and boehner and then

ryan, so somebody's got to get control of the caucus. >> if it was five, they could have -- >> five. >> if it was five they might have had five to do it. >> they could. >> they had eight. >> ten, the crowd of eight is going to say, whoa. >> it all depends on the margins. >> but i think jordan would have more correcredibility with thos eight. >> gang of eight, the one from montana he was paying for a small majority. he was more -- >> very quickly, the cfpb is being looked at now by the supreme court. what's the range of outcomes here that you think is most likely and what happens if the c cfpb gets smacked down.

>> from the argument it seemed from the arguments and again unless you're in the courtroom it's pretty hard, the court was pretty suspicious of the argument saying throw the whole thing out. i don't think anyone expects that. it's pretty, i think it's pretty well a case of you either throw it out as-is or leave it as is. >> having been around at its creation and now working for a bank that would love its undoing? >> i know you won't agree with it, i don't think the bank want its undoing. they want it to be probably more engaged and working with the banks whether they're community banks, middle market or large banks, to be more effective and efficient on behalf of the consumers the consumers are our

customers, we're not out trying to screw them that'sry dig louse. i think it's going to stay and another administration will probably come if not a year or four years they'll change it, they'll change the leadership and the leadership represents the cfpb for the moment. i bet it stays in existence as-is and will continue on to have this great debate whether it's good for the economy and for the banking administration. >> bill, thank you. >> thank you. coming up in the next hour, more on the speaker's race, we'll talk to congressman brian fitzpatrick about the potential candidates, but first the impact of the auto workers strike, we'll talk to the auto parts industry group after the break. "squawk box" coming back in just a moment.

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from hollywood getting this julia ormond is suing harvey weinstein for sexual battery but also suing caa, disney and mir max, alleging they all enabled weinstein's behavior the lawsuit was filed yesterday in new york, that weinstein sexually

assaulted the actress in 1995 after a business dinner, she informed her agents at caa, and they both cautioned her against speaking out, because weinstein in their view was too powerful and it didn't make sense. she's suing caa for negligence and also suing miramax the company weinstein co-founded and disney, which owned miramax in the '90s. weinstein's been convicted of r rape in two jurisdictions. he didnys ormond'sllegations. caa called the claims baseless, says it will vigorously refute

them in court. they received a demand from ms. ormond's attorneys back in february she wanted $15 million in exchange for not making these allegations against caa public. almost seems like a shakedown and caa rejected that demand immediately and actually out of the courtesy and respect from ms. ormond, caa then took it to paul weiss who found no evidence that it had happened and they deny the claims. so we'll see what else somewhat interesting just last month caa was sold to one of the richest man in the world, the controlling stake that they had previously owned. coming up, we'll talk to head of the auto parts sup suppliers. reminder, you can watch or listen to us live any time on

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the motor equipment manufacturing association is the leading trade group for trade group suppliers and has a new survey out detailing the impact of the uaw strike. if you key takeaways. 30 % of the surveyed suppliers laid off employees. 60 % expect to have layoffs next week vehicle suppliers employed more than 900,000 workers. six times more than

that uaw workers. joining us now is the president and ceo. we heard maybe some positive news this morning. what are you hearing about what this does ? we heard what would happen for goes a certain amount of time and things could get worse in terms of your group with layoffs et cetera. is there progress being made are you hearing ? >> welll, we do see back and forth occurring. that is positive news. but, the challenges still exist in terms of the fiscal capability of suppliers. we are very worried about their ability to sustain during this time period of time. >> what would you say is that drop dead date. how long ? >> it's hard to predict. we don't know exactly week by week what will happen in terms

of additional strike targets. i would say if we get to mid october, we will see the suppliers in a very difficult situation. >> obviously you represent both management and employees. is there some empathy along the employees ? are they willing to take one for the team ? are they aligned with the workers at the big three. this is something that is just -- they may be caught up in it ? >> i think they are in the middle of the situation. the challenges exist for suppliers in terms of all of the costs they have incurred during the past few years. covid, chips, inflation, raw

material pricing. very difficult time for suppliers. i think everyone in the supplier community is concerned about the long-term viability of their companies and they want to make sure that is sustained. >> we are undergoing what will be perhaps a difficult and painful transition to ev's. what does it mean for your group ? we know significantly fewer workers are probably required by the manufacturers themselves. how will it affect the suppliers you represent ? >> one of the biggest things we've been asking for is the government to support some retraining programs for workers. different skills are needed to manufacture these components. we think it's important that we begin that retraining process now in order to accommodate the

change over. >> you are asking for help from the federal government ? >> absolutely. >> you will need that. >> yes, i believe so. >> how would it change -- i mean the workers need to be retrained. doesn't everything sort of need to be retrained with the parts that are necessary for an ev versus and ce vehicle ? >> yes. that's another point we are pushing hard on. we believe that the domestic manufacturing conversion grants that the total project value needs to be decreased and that's part of the ira. that is to be decreased so more suppliers can take part on in it. currently is a $50 million

project requirement. that is simply too high for suppliers, many suppliers to participate. >> that's interesting. a lot of people want a piece of that ira, i think. you don't feel like the suppliers weren't necessarily treated as fairly or favorably as other people that ill receive subsidies. >> we've been asking for that lower number in order, particularly for smaller supplies to take advantage of the program. it's very difficult for a supplier that has one or two facilities to take advantage of a program with a minimum project value of $50 million. >> think of your total employment base on ompanies you represent. do you have an estimate that would be necessary if we were fully transitioned to ev's ? would it be 30 % less ? it's

going to be difficult. it's going to be downsized to some extent. >> it's tough to talk about it from the standpoint of a to be. look at the other industries that will come into place for bev production. we need to talk about batteries, infrastructure, there's a lot of aspects that are going to increase. we need to look at the total jobs. not just the particular focus on the current suppliers. >> right. impasse transition, nobody knows how it will work. maybe it won't be bad or maybe it will be positive we hope soup thank you, julie. >> it could be.

>> thank you. >> thank you. coming up, j.p. morgan head of global head income will join us next. will talk about the big move in the markets. the future is this morning and the red at this point. the dow indicated down 80 tsct. pe futures off by six. squawk box will be right back.

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good morning, everyone. stocks coming up as the surge in treasury yields takes a break. we have a look at what's moving markets. that is straight ahead. the race is on-fill the speaker c. will talk about the front runners in the future of the republican party. elon musk ditches his integrity team after saying it would expand. we will talk about the movement matter for the 2024 presidential election. the second hour of squawk box begins right now. good morning. welcome to squawk box here on

cnbc. equity futures at this hour. let's look at what's happening right now. we've got a mixed picture. the dow down 63. the nasdaq up three and the s&p 500 off five points. we've been watching it the story with the treasuries. looking at the note of 4.716. to year at 5.027. >> talk about speaking frankly. let's get over to frank holland. let's look at the premarket movers. this morning, we are looking at amazon and microsoft. shares in both companies are moving lower. the competitive regulators are launching a new probe over market dominance in cloud computing. microsoft shares have moved higher but amazon shares down a quarter of a percent.

it's all about making competition balance. these regulators estimate microsoft and amazon have 70 % of the uk cloud market. amazon under pressure. microsoft moving higher in the premarket. to the energy market. exxon shares were moving lower after guiding for q3 profit to $1 billion due to higher gas and oil prices. the oil giant said seen bigger margins in the chemical business. exxon shares down one and half percent. rypien shares are under pressure despite estimates coming in land with forecast with $1.3 billion. shares are down nine and half percent moving lower in the premarket. what appears to be weighing on the stock is the low end of guidance came in below estimates. also announcing $1.5 billion in convertible notes that will be due in 2030. shares of rypien down nine and half percent.

this week we saw the 10 and 30 treasure yield rise. yesterday seals did drop after adp reported a week of unexpected jobs report. we've got bob michele. j.p. morgan management chief investment officer and head of global fixed income. for a long time there's a disconnect between the fed and where rates were. why is this ? treasuries are still popular around the world. we still have a good risk adjusted yield. suddenly it moves and the fed goes up a quarter of a point in the tenure moves a point and a half. what happened ? what changed ? supply ? >> for a long time the market.the fed was racing rate at a pace that something would

right. it did. the regional banking system. the feeling was at some point the fed would have to pause otherwise they would run us into recession. you want to by every backup in yields per coming out of the last flm meeting, i think that's when the bond market broke down because everyone looked at the dots and saw they took two cuts out next year and the rhetoric coming out of the fed the last two weeks has been uniform. it's not only higher for longer. it sounds higher forever and it sounds like when you listen to susan collins a rate cut isn't even on the table. it will be another rate hike if they do anything. the holders are saying why do i want to give yield to hold the long end of their not want to cut rates anytime soon. i'm out of there. i'm going into the front end. the fed is getting what it wants. getting the long end to rise.

>> right. without doing anything and longer duration holders are asking for more. you have to pay me from taking that chance. >> absolutely. you only go the long end if you think the fed is about to cut rates. >> does it make it more lightly that the fed will cut ? that causes people to not by in longer duration and yields go up. they need to cut because the economy will be slower. >> we are doing their dirty work. if i go back to 2005 -- you go back to the greenspan conundrum which is i'm racing rate in the long end is anchored. what's going on ? what he did is raise rates a lot higher. this fed doesn't want to do that. they want the long end to go up in using the words to get it up. their tightening financial conditions. >> bill gross said yesterday on bloomberg he thought this was the retail investor jumping on board and selling also. he called them bond vigilantes.

they're getting involved. that implies this is a short- lived increase in interest rates. do you agree quick >> no, we see every kind of investor and the one consistent inflow we are seeing is from our wealth management platform. is yields have backed up, we are seeing an escalation in new accounts that are opening. today, i've got three calls lined up with wealth management platforms to get into this market. it's the institutional investor, it's the plan sponsor, the pension fund that stepping back. there were to see if they get a chance to buy the long end of the market closer to 5 % to five .25 %. >> will they get that opportunity quick >> i hope not. that feels like the worst case

to us. we can see in the cycle. the entire yield curve going above the fed funds rate. we've done 150 basis points. what's another 40 basis points ? >> would you call long rates too much to say they are on anchored quick >> that was two weeks ago. i want to see the employment data. if it comes in around expectations and the market rallies a little bit and sells off, that tells me there's more of a shot yet to come. >> how long have you been doing this ? >> too long. >> you probably have a lot of money after this. would you bet the house we don't see 8 % ? you are taking a long time. >> i am so grateful the head of our bank is not drawn into my world of trying to guess the next 50 basis points. >> is it completely impossible

the next five years we go significantly higher quick >> not at all. certainly that was a stress test to the market and the bank has to be prepared. >> when do things break ? >> well, i think we delivered another great shock to the system. i don't know about central business district, commercial real estate. >> are we there already ? is there stress we don't know about under the surface ? >> we knew six months ago the rates at those levels took out the regional banking system. definitely these rate shocks create stress. i'm all on board that the last 15 years were not normal we are going back to something that's pre-financial crisis. i don't know if you get there all at once. it took 27 years to get from 20 % down to 0 %. the fed has raised rates high enough here. recession is in the frame

around year end into the first quarter. i think they will cut rates to 3 % over the next few -- >> your being very definitive. have you brought it through quick >> i have to. >> you say recession are in the cards and there will be a cut next year and they are done racing for now. >> that's the way it looks to us. inflation is at their target. do you take consumption expenditures the last three months and analyze it. that's your current run rate 2.16 %. >> you have a boss ? you are taken to the wood shed. bob, what are you thinking ? those are the conclusions what i was thinking. watching the tenure makes me think cuts are in the cards. i didn't see why there would be cuts prior to this. >> they have titan financial conditions dramatically that

will have an impact. we are already seeing the housing market is completely unaffordable. it's at the lowest level of affordability since they started looking at the data going back to 1986. >> jamie said you can't write off yet. you have 7 % interest rates and should be prepared for it. you have to be prepared. >> that's why i went to 8%. >> i'm happy he's prepared. >> thank you, bob. a lot more here on squawk box. the battle for the house speaker is heating up. we will speak from heidi and the former committee chair. we will do that next. the live shot of the capitol. before we head to break, et's look at the markets. 83 points down at the dow

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welcome back to squawk box. the speaker battle is heating

up. jim jordan and steve scalise the front runners. possible vote to come next week and a look at this and other dc politics political headlines. i want to bring in the former senator of north dakota. she's the director at the university of chicago institute politics and cnbc contributor. also the chairman of the house of financial services committee and chair of the house republican conference. thank you, both for joining us. >> he knows. >> apparently, you remember. >> i do. i don't like what happens. your name is j eb. i was going to start with have -- heidi but let's start with jeb. i'm so curious what your first

reaction has been but also who you think should or should not be the speaker ? >> at the moment i'm not sure why an republican would want to be speaker. felt like we are handing out who was to be socrates. we have two who wish to be speaker. i'm not convinced that we won't necessarily see someone else. i'm not sure i care to get into it who will be best. between steve scalise and jim jordan, i would give the edge to steve scalise. bless his heart. he's been through a lot. he says he's fit. bless him. he has to make that decision. i think some members will question this is a tough job as we've witnessed. he will have to answer those questions.

jim jordan obviously the cofounder of the freedom caucus has managed to rub people the wrong way. he's gotten high marks recently for his work on the judiciary committee. i have to tell you if you look at history, it could be the speakership will go to somebody who made not actually want it today. they may want somebody that doesn't want. >> very quickly before heidi. here's the most important thing for our audience. how do you handicap the possibility of a government shutdown in november. does it change if you have a steve scalise or jim jordan and politically is it good or bad for your party ? a government shutdown could for an extended

period of time is bad for the economy and bad for the economy would be good for the republican party in terms of getting the white house next year. >> i would say keep your eye on the ball of what will happen to the rule dealing with a motion to vacate. you have member saying i'm voting for no one for speaker unless we modify this motion to vacate. to answer your question you have to know what will happen there. if there is o modification of the motion to vacate the one member rule right now threshold, if you will, i think it will be challenging to avoid at least a short-term shutdown. as we know, there are willing and it can be very bad for individual families. i think there's been two dozen of these since i've been walking on the face of the

planet. do i think it would go to the benefit of republicans or democrats ? when the democrats controlled the white house they control the senate. it's hard to win that messaging war 2-1. i don't think there would be lasting applications for the macroeconomy. >> let me go to heidi with the same question. >> everybody is looking at matt gaetz and blaming him. there were seven other members. i think there are some contrition going on given how mad everyone is. if you are speaker, you should be talking to not matt gaetz to talk to the other seven. say we cannot have this dysfunction. it looks bad. i think steve scalise is a dealmaker. he's much more respected then jim jordan. i put my money on steve scalise. i think my good friend did great work when i was banking and he was on financial

services. we are proud of the work we did together. let me tell you those days i hope come back when a member in the senate and a member of the house can work together. i think steve scalise is the guy that can pull that together. >> heidi, to the question about a potential government shutdown and not just for a day or two but something longer that sustains for a longer period of time of time but most importantly that models the markets, rattles the bond markets, rattles agencies. that's the bigger picture here. >> i should have pose the loop on my comment. that is as long as he can bring whoever the speaker is, he or she can bring along seven other members and explain we cannot have dysfunction i think we have a chance not to shut down the government. right now, if you are betting, you are betting we are to shut down government in november. that will anger a lot of folks. we've got strikes happening right now.

we've got interest rates. you heard how the housing market is in. we need to not rattle the economy with the shutdown. >> how does this shake up the presidential election if it does ? if the economy turns negative and right now there are people who debate with this economy really is, i don't know if there's a debate. if it does go negative, that would be bad for president joe biden's. >> biden co. has been talking about the economy is functionally pretty good. guess what ? people don't believe that already. if you end up with rising employment rates, if you end up with inflation, if the interest rates triple people's ability, we know people in some ways are

spending beyond their means. that will come home to roost anytime there's a bad economy it's bad for the sitting president. the tee leaves are not good moving in that direction. >> jeb, that may be the way the tee leaves are going. there's a case in new york right now as it relates to the former president. president donald trump. do you see -- we had chris christie on the broadcast yesterday. do you see any candidate beyond trump emerging ? >> here's the way i look at it. this race is over because trump is at 50 %. 99.9 % of republican primary voters have voted for him twice and half of them say we don't want to do it again. if you look closely at trump's support, a third says we love the guy we like his record but we are not sure he can get

elected. he told us we would get tired of winning and the truth is we are tired of losing. at some point, republicans -- there will be somebody else besides donald trump candidate. i don't know who that will be yet. i don't know if that will be vice president mike pence, governor haley, senator scott. somebody will be that candidate. if the race dwindles down after iowa and new hampshire, i think you have a real race. every time the president makes another court appearance or gets indicted, his numbers go up in the primary and go down in the general. if i was the head of the democratic party, i don't think i would have asked for a better outcome. >> jeb, heidi, we appreciate your perspective. we will see where it lands and talk to you again soon.

thank you. we can tell you in the next hour ryan fitzpatrick will be our guest we will ask him about the future of the problem solvers caucus and who he thinks should be the next speaker and lay down the number of the same questions we had to jeb and heidi. >> it doesn't help if were referencing conversation about a gag order. white they enforce that. he seems to be not paying attention to the gag order. at some point you have to draw a line. >> they all run together for me. >> i don't know. getting into the martyr situation. >> two separate systems of justice. >> it helps in the primary but hurts in the general.

that's interesting. >> when we come back, we will talk more about what's happening in the markets. check out the futures right now. dow futures down by 60 it. s&p futures down by six and nasdaq down by 10. we will talk about oil prices. they have fallen amid demand fears. it was a report that showed gasoline rose. instead of work being -- warning about the supply-side we are not worrying about the demand side. that has driven it down to $82 a barrel. >> time for today's aflac trivia question. l at is the largest powerbal jackpot in u.s. history ? the answer when cnbc squawk box continues. health i ance doesn't cover.

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markets. x slashing its information and integrity team ahead of the 2024 election. we will talk about the move and much more. squawk box coming right back.

welcome back to squawk box. prices tumbling five dollars a barrel on wednesday. wti is down 10 % after hitting a 13 month high last week joining us is our strategy and

cnbc contributor. energy and the energy patch was the place to be. the big question is is it still ? >> certainly concerns of the broader macro backdrop. rate hike's have been a persistent problem from opec but adding to the worst yesterday was a large gasoline bill in the united states. oil is having a tough moment. the interesting question is to we see a response mechanism from opec. they don't want to sit back and let a macro storm bring the oil down. >> what you think the answer is ? >> opec is a different opec then 2015. in 2015 they were very passive saying we will see if shell breaks first and carried into the 30s. the lesson from saudi arabia is you get in front of these selloffs.

i would anticipate if we continue to a sharp selloff plunging into the 70s. we will hear clear statement from opec. >> are we now moving into the 70s ? three eeks ago there was a straight shot to $100. >> we have to watch the coming days. i think the fundamental backdrop for oil despite the gasoline bill yesterday remains strong. we did have crude draws yesterday. gasoline is a problem. refineries have been running hard to produce gasoline. we've got this gasoline surplus. the question is, do you have a macro store i can bring oil to a place that fundamentally would not dictate. >> do you think we are about to enter a demand problem ? this

is what j powell mate wants even though he doesn't like to include energy in his calculation. that may be part of this. >> i would say that fear of powell has been a drag on the market. if you look at the man, the numbers from china have been strong this year. command has been better than you would believe because of the macro stories. the gasoline number is causing concern and that's why i would say the next thing to watch for would be statements from opec about the willingness to come back into this market. >> let's say you get that statement, does that stabilize things and what would it stabilize and set at ? >> again, i think this market remains stronger than the selling action would have us believe. the question is, what would be

the size of the reduction. all these factors are in play. i would say the next thing to watch is what would opec do. we were on a path to 100 a week ago but a macro move can take you south quickly. i don't think opec will want to sit back and let this continue. >> last question. what are the chances we go back toward that $100 trajectory ? >> in the next six months, we get to year end. we haven't opec meeting. what do we see the path on rates ? where are we in the macro back drop ? part of the recent will was moving in a better direction is these broader macro fears were seated any focus on the fundamental outlook. the outlook still remains quite strong. right now, we are in a macro storm. >> thank you for walking us through this this morning. still coming this one, a growing money laundering

scandal in singapore. we've got the details after the break. a reminder. you can get the best of squawk box in our podcast. you can listen anytime. that's on squawk pod. circulon with scratchdefense. built from three layers of nonstick to withstand over 350,000 metal utensil scrapes in laboratory testing. 130 times longer-lasting than the competition.

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welcome back to squawk box. the futures have improved significantly. nasdaq is up. rapidly growing money laundering scandal in singapore is now turning to china in privately held family offices. robert franks joins us more with more. >> singapore authorities freezing assets worth $2 billion in a money laundering probe that is quickly expanding. they've seized 152 properties, 62 cars, lots of old cars and jewelry. 10 people have been charted laundering proceeds from illegal gambling and other operations. the suspects are all from china or have links to china. the scandal has exposed a dark

side to the massive wave of wealth flowing out of china into singapore. $1.5 trillion has poured into singapore last year. singapore depends on its reputation for a clean and well police financial system. authorities working with the big banks to figure out where the gaps may have been. officials looking at the potential role of family offices. those of the private offices of wealthy families. different offices registered in singapore has tripled during the pandemic to over 1000. family offices have minimum disclosure requirements and they paid no taxes on investments. singapore became a global hub for these family offices. the question now is do they crack down or were they

involved in this money laundry. a huge number of family offices >> why would family offices be formed in singapore ? i think of bitcoin, operations and places of singapore. why would you put a family office there ? >> singapore wanted capitol. there was no taxes on capital gains if you had a family office which is all there gains. they made it easy to register. there were minimal disclosure requirements in terms of who you were, where your money came from and they wanted professionals managing the wealth. they thought would be good for job creation and that inflow of capital which could flow out. >> so now the new switzerland quick >> exactly. hong kong battling for that as well. dubai is a big family office capitol. all these big cities around the world are vying for that money. the question is do you need more regulatory disclosure

around it. >> what happens to u.s. the tax authorities to say your family office made be there but you are not. >> if you are a u.s. citizen you are global income is still taxed. it's beneficial -- most of it was chinese wall those grading family offices in singapore moving the money there. chinese authorities cracking down on that we saw the disappearance of a banker in china whose setting up a wealth management firm. >> a lot of russians have set up family offices in dubai and europeans. a lot of the money going to dubai in singapore. they are the wealth capitals of the world when it comes to family offices and wealth. >> switzerland is also ran ? >> now that the u.s. has better disclosure around those accounts -- >> what does that tell you if you're going somewhere else ? you don't want them knowing how much you are making.

>> wealthy people love to hide money and they go to whatever country will be the most friendly. singapore knows everything. they serve ale you. it was surprising to me this money laundering scheme got as large as it did and went on for as long as it did. some people said china urged them to crackdown. china was to keep capitol. >> interesting story. thank you. >> i'm sure the luxury accommodations in dubai -- i'm just saying. >> dubai, singapore. it $600,000 to join a golf course in dubai. >> are they nice ? do you know anything about it ? 18 holes. >> for that amount, i would

hope so. when we come back, x which is the company formerly known as twitter slashing its disinformation and integrity team ahead of the 2024 election. alex stay most will join us next. take -- check out the price of tacuenesci. bitcoin is trading at 27,007 71. stick around. we will be right back. ( ♪ ♪ ) ♪ (when the day that) ♪ ♪ (lies ahead of me) ♪ ♪ ( seems impossible to face) ♪ ♪ (a lovely day) ♪ ♪ (lovely day) ♪ ♪ (lovely day) ♪ ♪ (lovely day) ♪ a bank that knows your business grows your business. bmo.

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the anti-defamation league set is preparing to resume advertising on x. the platform formally known as twitter. they criticized elon musk to stem the rise in hate speech. in a statement the organization said it appreciate translates intent over the last few weeks to address anti-semitism and hate on the platform. also says it's helpful to continue to engage with x but at the same time the adl took issue with elon musk's claim he tried to damage the company by calling for an advertising boycott. musk threat to suit the adl and

lost business. >> the adl is starting to advertise for other people to advertise ? >> i listened to a fascinating twitter space or x space with elon with rabbis and other officials and leaders in israel. it was fascinating. calendar to its was on a talking about israel and anti- semitism. it was interesting to hear elon wanting to listen. it was an effort for him to say i'm listening and trying to figure out how we will do this and do it better. i think he was meaningfully trying to figure it out, if you will. probably other people who listen to the same thing who may think differently. it appeared that way. >> x/it's disinformation and election team before the 2024 election. elon musk confirmed that news

in a post and took a swipe at the unit for what he said was undermining election integrity. look at the potential implications for next year's presidential election and beyond, we bring in alex stamos. he's the director of let's just talk about this. getting rid of that group and saying they were doing it i believe because he thought it was a one-sided situation where he would be only policing one side, what do you think happened here? >> i think it's a really bad idea. i think unfortunately overall we are in much worse shape for 2024 than we were even in 2016 because the protections that companies put in place have started falling back from a peak in 2020 and 2022, but the problem is there's a lot more countries and a lot more groups have gone into the trolling and

russian situations that we saw in 2016. >> u loyou're looking at russia who else? >> the problem is we're stuck in this 2016 mutuaind set that trog is only by russia. it was always a much more complicated situation what happened in 2016. it's what democrats glommed on to and the media glommed on to and trump had the idea that he benefited and that has been untrue the last couple of years. all these countries watched what russia did in 2016. a couple of things drove this. first, the chinese really had trouble in hong kong in losing the information war globally who were hong kong teen-agers, who

could speak english, did their tiktok and realtime videos to show what was going on while the chinese bureaucracy was slow to respond. and the fact that they had these massive lockdowns and question the decisions of the chinese communist party meant they needed to defend themselves and shift blame. because of those two things, the chinese have massively invested. in august of this year, air force base, which still has a team that does this released their adversarial threat report of the largest fake account network they had ever found and it was from china. the idea that they will be pro-republican is just foolish. the idea that we disarm doing that work because it favors one side i think is wrong. >> what do you think is happening at twitter?

you have to pay if you want a blue check mark. has that helped or hurt? >> that has hurt a lot. the pain is fine. the problem is is they not only started charging for the blue check mark but they got rid of any verification. back in the day when you had a free blue check mark, they will check your name, who you are and verify you're who you're saying you are on twitter. now a vanilla gift card is good enough to buy a twitter check mark. >> and they get amplified. >> so if i'm the chinese, if i'm the chinese communist party's propaganda arm, $8 a month is cheap. running 10,000 accounts would only cost 80 grand. that's nothing compared to any

propaganda and i expect a lot of these blue check marks that have sprung up in the last year and have extreme positions are being run by foreign adversary. at the same time x has cut off access to any researchers like mine to check anything. >> is china is not necessarily for republicans on this because anti-china sentiment is the one bipartisan issue in washington at this point, how will this play out in the elections? >> so it's hard to tell. one thing that's happening is we've had this great scattering of political content online. the first part of that happened after january 6th when twitter in facebook in particular and a bunch of conservatives moved on

to other platforms. and now liberals have done the same. and it moved on to blue sky and all these other platforms. >> is it nothing left than the bots and the government programs? >> it's hard to know who are the real folks left on twitter. there's enough journalists and politicians. if you look at the way politicians interact, especially republicans now, they do look like they seem to think twitter does represent some kind of real ground swell of support to me. that is concerning to me. if you consider putin's only path to victory in ukraine is to get the united states to stop supporting them, that would be a cheap praying to try to manipulate americans to think that americans are no longer supporting them. after that august of report,

twitter did nothing. you used to see twitter and air force base wo-- facebook teams work together. >> have you reached out? >> the last time i interacted with elon musk he called me a propagandist and i got death threats so i do not. >> i only ask because elon musk has been quite vocal about that particular issue as something that he cares deeply about. >> why do i say it?

because we have the hard empirical evidence. we did a big report on child safety. >> do you believe they have not tried to address that since? >> they have but we just did an update and a bunch of the stuff we reported are still up. some of the pedophiles, all they had to do was add an emoji to it and it still works. alex, thank you. >> beer, wine and spirits make up constellation brands. just reported earnings of an adjusted $3.77 a share topping 3.36. revenue above, delivering double-d double-digit net sales, holding

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good morning. futures mixed as investors try

to gauge the impact of higher bond yields. major averages bouncing back yesterday following tuesday's selloff but only the nasdaq is positive this week. this hour we're going to get into what those high rates could mean. the fed's interest rate path as well as millions of retail investors trying to make sense of the market. and the fall-out from the ouster of speaker of the house kevin mccarthy reports say could lead to the dissolution of a key alliance. the final hour of "squawk box" right now. good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square. u.s. futures have steadily been improving and narrowing the

losses in the dow. last time we checked, the nasdaq had turned green. now the s&p has actually moved across the flat line and is up a little. the dow is down triple digits in the premarket session. treasury yields, everybody's been watching the 10-year gain importance as some say it's become untethered to what the fed is doing at this point. 4.71 wouldn't really throw up any red flags. i think 4.9 and 5 when we get there, that's going to be tough to see the market easily digest that. >> especially if that happens any time soon. one of the stories we're following closely today. clorox warning its sales and profits took a big hit last quarter largely because of the

impact of a cyber attack. the stock is off by about 3.3% after clorox said it expects net sales to drop by 23 to 28% and gross margins to be off last year. that forced clorox to go manual for a lot of operations that was done by computer before. production is still be hurt. bloomberg reports a hacker group tied to one of the recent attacks in the las vegas casino games is a suspect. treasury yields coming down from 16-year highs yesterday. they say the yield could hit 5%. and crypto currency former ceo

and manager joins us. it very well may be the bond market will have an impact on crypto. what does the next 12 months look like to you given what we didn't see in the last week? >> i think we have a failure of imagination, that all working people have never traded in a rising rate environment. everything gets bailed out by the fed lowering rates by the last 40 years. we're in a different regime. the rates two years ago i predicted when fed funds were zero and the 10-year was 1.5, they both go to 5 at least. i think they're going higher. the normal real rate for the fed is 1% over inflation. we're not even there yet. wage inflation is double the fed's target. we have record labor strikes going on right now.

so the fed has to keep doing more and the 10-year note is right now where it's flat to fed funds. it's typically a premium. >> earlier today we had a guy on that said that -- what are you saying inflation is now? what number are you using? >> core inflation is 4.4, which is more than double the stable prices -- >> he said inflation is already at point where rates are too high. >> they're supposed to keep it under 2% and it's at 4.4 and wage inflation is at 4.5 and increasing. >> a barry sternlicht, what he would call real inflation, he would say we're already there. the question is whether you think the fed already thinks we're already there or you even think that's real? >> at 2%? >> yeah. >> there's an owner's equivalent rent thing and inflation and it takes two years to fully play

through. even if houses stay stable, it will still go up 1.1%. there's still a lot of inflation from two years ago piped in. >> if you're right, we're talking about increased rates, nobody lowering rates in the next 12 months. >> yeah. and maybe for several years. i think that's what people are having a hard time thinking about. rates could stay up for five years. >> if that's true, then equities are wildly overvalued. >> that's true. >> that is true. i would think that crypto would be widely overvalued, too. >> equities probably are over valued pe is the same rate as when rates were crashing and now rates are much higher. if you took the normal risk premium on to a 5% 10-year note. >> equities should be 20% lower?

the s&p? >> yes. >> i'm not say 43% lower is going to happen but there have been two 13-year periods the equities didn't go up. we could see that. >> you think 23% is going to happen if not 43? >> i think equities are going to go down for the nbs few years. it's not tied to interest rates. >> it is tied to risk. >> you need the feds opening the spigots -- >> the feds opening the spigots in 2021 didn't -- it was very risk on asset until the middle of last year but i think that was connected to a lot of super highly levered things like ftx, celsius. those are once in a generation

weird occurrence. they're in the past. and this year the correlation to s&p 500 is only 0.2. historically it's 0.1. >> what is it core el eighted to? what is it correlated too? >> i think people are waiting for a cut. every time they think there might be a cut and the fed starts easing again, that's when bitcoin goes because it's fiat gets less valuable. >> it's definitely cyclically affected by things like that. we're in a second year and it does skiiquiggle a little bit. >> stom people would say there's crypto and then there's bitcoin and that they are completely

separate. do you believe in that? >> bitcoin has worked for 14 years, 24/7, no down time. we just heard about clorox being hacked. bitcoin's always worked. it has about 50% of the entire market cap, but the or crypto. they did an emerge last year. they changed software for 2.5 million people overnight and it all worked. nobody wants to talk about that. >> do you think that equities should come down? where do you think bitcoin should be valued? >> it's a great question. we talk to asset allocateors all the time. if you put money in bonds, it's probably dangerous, equities i think are overvalued.

that does leave real commodities and block chain. block chain is a trillion dollar asset class. they should dial it up to a couple percent. >> which gets bit con to what level in. >> that's my general forecast. every year it will more than double. >> every year it will more than double. >> it's been doing it for 14 years on average. >> if it's digital gold when does it become like gold and -- >> in luke 20 years when everybody has it. right now most institutions really have zero exposure, very, very small. >> and how much of this is dependent on etfs and other financial instruments fedly approved. >> we launched the first crypto

state ten years ago. it's been more than a decade, which is way too long with entities like fidelity and block rock applying, i think it's pretty likely. there as a lot of investors but if you had a blackrock or fidily etf, that brings positive money. and the grate scale trust earn tens of millions of dollars. >> they did. >> have you ever thought stock to flow makes sense to value -- >> it does, yes. >> what does that indicate? >> every four years they cut the supply of bit coin about half the markets rahal ood very big

before the halving and the next halving is april of next year. >> it almost sounds religious. but it is coming next year in april. >> it would be great if the fed were halving the amount of money it prints. it's nice to have a currency that would reduce the supply. >> remember the guy that was on talking about the little bit -- even if it fluctuates, use little tiny bits of bitcoin to send things. >> if you always think it's going up, you're not going to use it. >> but if you have little bits of day -- >> >> i remember when we said that but i don't -- >> i don't know. you'll never be convinced.

you like the stock market yet? you don't like anything. coming up, house solving problem caucus. >> you like the market at this point? call me. >> i don't know. we have different opinions. i don't know if it's going down 43%! co-chair brian fitzpatrick, problem solvers. hey, guys, thanks for helping out the other day and and we'll talk about the fallout of kch stay tuned. you're watching "squawk box" on cnbc. travis, did you know you can get this season's covid-19 shot when you get your flu shot? huh. two things at once. two things at once! ♪ two things at once. i'll have the... ...two things at once, please.

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reports say at least some republicans in the bipartisan house problem solvers caucus are considering quitting the group after all the house democrats voted with eight breakaway gop members to force kevin mccarthy from the speaker's chair. a draft letter from republicans obtained by axios says: joining us now, pennsylvania

republican congressman brian fitzpatrick, co-chair of the problem solvers conference. we watched, congressman. we saw the end result 0-0. were there conversations beforehand and can you tell me what the rational was for supposedly bipartisan wishing individuals in the democratic side of things. what was their -- i mean, i always -- people differ when i call the democrats board. and that's what we saw given. am i reading it wrong? >> well, i don't -- of course we met. we m self toms beforefch a lot

of people are very upset. that includes me in there. this was a golden opportunity to come together and actually oppose a move by the extremists in congress and the whole institution fell short on that day. it's a terrible day for our congress, a terrible day for america. and what's really heart breaking for me, i'll tell you, this all came about because speaker mccarthy put a two-party solution on the floor to avert the government shutdown. that's the kind of conduct that's supposed to be rewarded, not punished. for all these things critically important particularly for the markets, averting a debt crisis by solving the debt ceiling. kevin mccarthy did that and stabilized the markets. government shutdown. kevin mccarthy pulled a rabbit out of his hat for that, at the last minute and it was the senate that's what concerns me. the message is if you reach

across the aisle to put a two-party solution on the floor, that's not going to work and that's the problem. it needs to be fixed. >> i know how things work in d.c. but it's as clear as the nose on your face that you should dissolve that cloup group not even one had the courage to stand up. they just went along with the group and let mccarthy twist in the wind. >> there always needs to be some for ru forum in congress where democrats and republicans talk to each other. >> what use is it, though? when they came together, it was

totally ineffective. >> no one is more disappointed than i am. let's start there. you're not going to get any excuses here. tut me at the top of the list for people that are upset. what we're going to do is we're going to gather as a group, the gop members of the caucus are going to meet next week and we'll figure out a path forward. have things changed with that group? you better believe if. >> your colleagues on the other side, the problem solvers shutdown, does this make it more likely that this happens because there's no speaker in it? so if they stand for the good of

the country, purportedly what they stand for, wouldn't that be an excuse to say for once i'm going to do something and help mccarthy out. would it have killed them? >> that was precisely the point i was emfatly making in the days leading up to this that anybody who votes to vacate the children is voting for government shutdown in 40 days, a voting to abandon ukraine on the battlefield. it max it much more like will you that funding true so let me be clear. nobody is more disappointed than i am. so add me to that list of people that are disappointed. we're going to get together a a, this was always a group to have conversation and was confidence eroded? yes, it was. we're going to figure out as a group how to move forward. >> this has nobody to do with --

>> why can't jefferies -- >> and and mccarthy it was like wrangling cats every single time. what's republicans' problem? they don't want to -- they want to look like fools to the country and not bible to dpof. >> if you want to know why people voted the way they did on friday, ask them that. i voted to protect the speakership, protect the institution, protect kevin mccarthy. by the way, we are going to do no better than kevin mccarthy. my democrat colleagues will do no better that kevin mccarthy. >> are you frustrated with the other members of the problem solvers, the democrats who did not vote, to support.

of course there's frustration. this was a good i don't know tuned to not make things worse. >> will the problem solves are caucus continue to be. >> the republican members are going to meet next week when we're back in session and we're going to have a discussion and we're going to leave it up to the members on how they want to proceed. i will say this, has confidence been eroded? you better believe it has. does there always need to be some forum where democrats and republicans talk to each other? >> yes, i believe there does. here's always guantanamo bay to so that's how i'd answer your question. but i would say this, will own the consequences of that row the

metage that was sent and this is what what in this could be a hakeem jeff ritz or anybody else. if a speaker puts a bipartisan bill on the floor to avert a government shutdown, avoid a debt crisis, and they're punished and not rewarded for it in. >> what did they say in response, your other problem solvers caucus members who were d -- >> we're perfecting the cart before the horse, though. it's the eight republicans. i think there could have been a difference but it's not really their problem. it's the republicans avenue problem. it's such a slim majority that they had. there's no one you can blame

except for those eight guys, right, when push comes to shove. >> so i'm hearing both here. there's plenty of blame to go around. take your choice. do you want to believe 830. there's a whole viewpoint that promises weren't kechts, and we hear it from all tied. >> very quickly, congressman, someone joined us earlier today who suggested that republicans would not have unless that move to be able to vacate with just one member standing up and saying that is removed. are you one of those? >> well, we have to fix it. i haven't spoken to the candidates yet. you cannot function when you have the motion to vacate the chair at one person. and we lost a great speaker

because of it and so you fix that tool, this problem is going to perpetuate. it that. >> well, even if it was five, maybe they wouldn't want to put their name on them. >> why does it need to be 5? >> how many? congress? >> last time it was the majority of congress. >> wasn't it one for years and years and years and congressman, i can't believe you are going to -- go ahead. >> yeah, i just want to say, you no, there as toe of blame to go around for the situation we're in. but i would say everybody ho

voted to protect the institution and to protect the speaker from the people who voted against him. that's who you should be questioning about it. on both sides of the aisle. >> well, exactly. okay, thank you. >> coming up, break being economic data. a new look at initial probabliless claims. that is next when "squawk box" returns. gold isn't merely a commodity. it's an investment in people and communities. at osisko, we strive to build modern, safe, and sustainable mines that benefit all. think big. shape tomorrow. osisko. (aidyl) hi, i'm aidyl, and i lost 90 pounds on golo. think big. shape tomorrow. i struggled with weight loss and weight gain

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welcome back to box"squawk " right here on cnbc. we are just a few seconds away from the weekly jobless report. the jobs picture has been hugely important, moving yields and in turn equities all week. let's get right over to rick santelli. rick. >> yes. official jobless claims expected to be in the neighborhood of 210,000 are 207,000. 207,000. and actually in a perverse sort of way, that is the largest since the second week in september when it was 221,000 and if we look at continuing claims, expecting a number around 1,670,000. very close. we're a little light.

1,674,000. we're really bunching up under 1.7 million. i know that many times we don't pay real close pleau connection exports count for more. they add gdp. as you rock at the tr that is the smallest going back. ant my point here is we're starting finally to get back into the zone where we were precovid. we had very strong consumer demand because we flooded the economy with money and some of that is slowing down. so i think it very important to stay in kr of that. and many were and adp.there can

be many seasonal issues that have gotten off track during covid so we'll continue to monitor these. the other big issue is, of course, we want to monitor all the sides of all the supplies that seem to be one of the linchpins and pay very close a tense to the current lows of session in tens. today we traded a smim becasing and building monday it could be a a light turning day that we've seen on the long maturitying and once again, a double as trick there from becky, back to you. >> i mean, rick, we watched

higher yields again for the first time the 10-year really picking up since we've been on the air this morning. and that pushed right down on equity futures. there was something in this data that people would look at and say this is why? >> no. actually, i would think that imports being slightly on the weaker side. how, imports being sluggish on the weaker side does mean that the trade billion -- i think that the complex of market-driven rates is really starting to feel its own oats and it really is above and beyond any of the fed policy. market rates are exerting an influence and i think that's going tho continue for some time. >> rick, thank you. steve liesman joins us with more on this. your takeaways from this data and what are you expecting with tomorrow's job numbers, too, because that will be very

closely watched. >> so rick has the math right on that. it's pretty important. i want to underscore two things and then pivot to this issue on interest rates. one of the things that's happening the trade deficit is oil it's exporting oil. so when oil prices rise, it used to create a huge surge in the trade deficit because we were importing oil and now we are exporting some oil and these things don't balance the way they used to. if you look at what's happened to crude, it's down about 11 bucks a barrel since it hit that 93 doll after.

and the federal reserve can look through that, which brings me to my last point i want to make. if you look at the 10-year, this surge in the 10-year yield has been caused by the fed. you look at the movement of rates since september 15th, we're up 43 basis points since the fed told us higher for lolong. if the fed created it, it can take it away. if it feels like the ten-year is pushing too much on the it can, even just with why or even suggesting that it has some concern with level of the ten-year at this point. so the idea that it was in part manufactured by the feds suggest it has some ability to put it

back into the internet in nm. >> >> in other words, it can't. i wanted to underscore the tag on what i'm going to say. so far the fed has chosen not to do that. it had opportunities. bostick came forward which said efficiently unrestricted but then he talked about the idea that there were going to be if if i'll be listening carefully to see that. >> you saw warris's piece now. himself problem is that powell is not calling the shots now at the bond market. >> kevin as a real tart lieu.

that has caused the market to reprice the fed's reaction function. >> i don't know if that's the cause and the effect. you know, now people think they're unmoored. unmoored. they not attached in we may never know what caused this thing. >> coming up, the impact that the run-up in bodful. >> we have tim rose? >> he's in the next block. >> no offense to j.j. you're watching "squawk box" on cnbc.

>> welcome back to "squawk box," everybody. let's take a look at the treasuries. i'm not sure what in the data caused this but you did see yield move higher pretty instantaneously and now futures are down. this is the first time all morning where you have seen higher yields across the entire treasury board. right now the 2-year is 5.062%.

it back above 5% and that probably is something that had the biggest interfluns on wok, the taz dak down about from joining us right now is the chief economics correspondent at the "wall street journal." his latest article is called "bond selfoff, hopes for the economy's glebl riz vrs. nick, let start talking about this rise we've seen in traits. we saw today that suggestions are that federal reserve if. >> kevin raises a fair point. this looks luke who had you and

it's not clear what the fed with really do at this if ond the one hand this is what the federal had wasn't to see all year, but it a little bit like hitting that glass catchup bottle and nothing ems p comes out. >> and then it comes out of something else. >> all over your shirt. >> at what entitlement is and i don't sfrk you're going to have to see the data weekend or some kind of market accident to get this to stop. if this was fed driven, then fed word could change it but i don't see why they would step in here at this point. >> would they step in or does it

at least mean that they're not going to hike rates again? they don't have to do that because the work's already been done? >> that is just it. so the case for a november rate increase is going down because you've given up 50 basis points in the ten-your trern are and up almost a point in jum. and december is still a long time away, more data to come out. but if we sustain these financial conditions, the market is doing the work of the fed, which means the fed doesn't have to do as much. >> we watch every time interest rate yields go up. you can see the inverse reaction for the equities. dow futures are indicated off by 130. is this simply the idea that, look, the market looks less attractive if you can get a much higher yield on a longer term

investment. >> i think it's that and with interest rate high are. so there is a risk. we do see more of an economic slow down happening but i would say when you look at how you're going to al owe case asset if and you would think it would come down a little bit, especially where we were at a tu days ago. and it takes competition. can you buy a treasury bond, it's tax advantaged and tlook yield in for a long time. that real yield just increases. so i absolutely think it creates work and who can will the are

they relieved that the market is doing its work for it or are you this. >> i think the fed prefers to see things unfold orderly. and obviously market conditions, the traders i talk to say that conditions are orderly. this selloff has been happening in an early manner. but it's rampant. there will be another economic forecast in the cast from the teal book. july of 2013, they're going to get a set of projections about what this increase in yield, if it sustained, if you have a higher profit term premium.

>> it. i'm not suggesting that we're there yet. you don't want to see things happen just a snap of your hand. you'd like to see it happen over a little bit longer period of time. >> do they have the ability to temper market september iment with tlp word? we just were talking to steve about that. >> that's a good question. >> he thinks that they could take 50 basis points off by, i don't know, just even admitting the possibility of a cut at some point in the future. other people that the bakhmut is going to do what they can say. >> i guess i'm not convinced as steve is -- and i respect steve a great deal -- but i am not sure that if this was caused by the fed. they've been talking about higher for longer, about running

off their balance sheet even after they're cutting. so to do something now to change that, it could why would they do that? until if until this is a a group that hiked through a banking convention, all iraq us and rolling. could they provide more soothing word at one point? i guess that's a possibility but it looks are frks so i think they're in a very tricky spot right here in the selloff continues. >> what are you telling people to do right now with did in the equity market are you think

essentially a bargain if prices continue to drop? >> i think it makes some sense to have bonds in this market. on the equity side, i think sticking with high-quality companies that don't have a lot of leverage, that have a high probability of having earnings come in at or above expectations and that have a good solid story in terms of being able to improve profit marm ps in large cap it can like amazon, sales force where valuation is still reasonable. also, if you look in other areas like health care for example, the health care sectors rahal participated in the market recovery that we'von even a company like abbott lapse, the

company is still working through the covid test kits and how they were such a positive and we're now overlapping a period of strength on that side. if you look at the core business, there's still a lot of if and i think maintaining a at this versified port fellio and considering length. considering length. we'll ge so you know all you need for recovery. and you are? i'a pulse. invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you...

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welcome back to "squawk." microsoft and amazon's cloud dominance will face more scrutiny in great britain. media watchdog off com referring an inquiry to the uk's competition in markets authority, saying it's now identified features which it says make it more difficult for businesses to switch cloud providers or use multiple cloud services and it was particularly concerned about microsoft and amazon. i'm surprised about that, only because one of the benefits of the whole cloud system was always this idea that you -- the interoperability, the switching and the idea that actually a bunch of people now use multiple clouds so you have some companies using azure, also aws, and google. >> a lot different than the old

ibm days where you were locked into something. yeah. all right, exxonmobil says that increases in the price of oil and gas will help its third quarter earnings grow from the second quarter. operating profit is expected to come in between $8.3 billion and $11.4 billion. that's a pretty wide range. that would be well below last year's nearly $20 billion, but an improvement over the second quarter of this year. exxon's earnings are scheduled to be released later this month and you can see the stock down right now. of course, that is probably more tied to the decline you're seeing in oil prices this morning than anything exxon is saying at this point. when you come back, when we come back, i guess i should say, you're the ones who leave -- >> they're coming back too. >> are you taking off? >> i'll come back. we're going to get you ready for the trading day ahead. we're going to talk rate volatility and the retail investing crowd. this is "squawk box." we'll be right back.

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all right, welcome back to "squawk box." joining us now to talk about the retail investor and the impact of the recent jump in interest rates is jj kinahan, ceo of ig north america, and jj, looking

at some of your comments, i understand what you're saying, because i think you're right. there's been a shift in mentality for retail. it's almost every tick now in the bond market can cause some fluctuations in the stock market. and i was thinking, how is that different? is it really different? we did go through about 500 basis points of increases in a pretty good rally, pretty good bull market, so something has changed recently, because the market's having a lot of trouble advancing every time rates go up even a little. what's different? >> yeah, i think what's different, joe, over the last few weeks is it went from this macro picture based on sort of the fed meetings and some fed comments between the meetings to now bonds, you know, the stock market is subservient to the bond market in a way that i don't think it was before, and what i mean by that is we really are moving, tick for tick, with bonds. it's unbelievable how -- whether everybody realizes it or not,

over the last couple of weeks, they become a bond trader, and because that's how the stock market is moving, and the correlation has just increased so significantly over the last few weeks, and i think the other really important thing, and i know you guys have talked about it on the show before, but the fact is if you're under the age of 45, you probably have not experienced, as an investor, a rising rate environment, and so i think that's also become very confusing for people, and suddenly, they're like, hold on, i have to pay a lot more attention to the daily moves in bonds, if you will, than maybe i did before. and so, we are seeing this whole thing of, you know, all assets, people are questioning at the moment in terms of, do i really want to hold these or do i have the risk tolerance to hold these through some volatile times? >> the fed didn't do anything last time. all the moves we have been seeing recently are not really from what the fed did. it was weird. while they were going up 75 basis points, market was fine.

now, they haven't really hiked, and that's what i think the is unsettling to some people too. they did make comments, higher fn longer and the dot plot's changed, but they haven't done anything in the ten-year yield is backed up, and that might be disconcerting. we got about 40 seconds, jj. >> all right, i think your first comment, joe, is the one that really has people a little bit and that is, the market's finally accepting that the fed may not do a rate cut. think about how many times we talked about six months ago, oh, perhaps a rate cut in the fall, rate cut by the end of the year. i think the market is fully starting to accept the fact that we may be higher for longer, as you just said. it may go until well beyond the spring of next year before we see any relief on rates, and now, the housing market and everything else has to just to this and because the housing market has not justed to where rates are at all, as you guys have talked about on the show again in terms of supply versus rates. >> all right. you did it, jj, right on time. got a couple minutes.

thank you. we'll see you. final check now on the markets. we were triple digits, and then we almost got to a positive in the dow with the other indexes, but now we're back down almost triple digits in the s&p and nasdaq are no longer in the green. they were briefly there earlier. we will -- is it jobs friday? >> it is. >> tomorrow is jobs friday. >> it's going to be a biggie for the markets. >> and more importantly, it's friday. not just jobs friday. make sure you join us. "squawk on the street" is next. ♪ good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber at post nine of the new york stock exchange. premarket, mostly red here after the dow did snap a three-day losing streak, got some cross currents at work. oil, lowest since august, but long-term yields are higher after claims come in light. five fed speakers today. our road map begins with the drop in oil, coming off their bi