dow futures down by about 215 points, s&p off by 30, the nasdaq indicated down about 120. we've been watching what's been happening with yields. we will continue to follow all of this throughout the day right here on cnbc. you see the 30-year right now just 4.05%. >> the bond market is closed. >> the stock market opens in just a half hour. it's time for "squawk on the street." >> good morning.

markets good morning. back here u.s. futures are moving lower, energy prices are ticking higher, investors continue to monitor events. in corporate news, nelson peltz putting that pressure on des any. >> let's begin with the conflict overseas. israel recovering after suffering the deadliest attack. over the weekend immediately i don't know spoke out pledging support for israel. >> today the people of israel are under attack orchestrated by a terrorist organization, hamas. in this moment of tragedy i want to say to them and to the world and to terrorists everywhere that the united states stands with israel. we will not ever fail to have her back. we'll make sure that they have

the help their citizens need and they can continue to defend themselves. >> so, jim, we'll watch the tape for headlines regarding lebanon and other places. might widen the conflict. >> i feel terribly for great ally of the united states. i don't want to talk about -- debate, having to talk about what seems like profiteering on a day like today but we have to do our job. i don't want to say this is overblown in terms of the market, the market is not coming down that much. i just think that when you hear about a long slog and you hear about what's obviously going to be a situation where there's, you know, children, civilians going to have to be on both sides, will lives be lost, i

think that it's hard to factor in. we've been another al lly, thou not as close, ukraine has been for a long time and then went off the radar screen. >> investors have to be concerned about iran's role, what the response is going to be to that, what hezbollah will do in the north. iran and russia have become closer. in these kind of situations thinking about broader consequences, none of which are good. >> no. but that's sort of where the market tend to go. >> do you think it clarifies like an absence view versus --

>> what it potentially does, at least the concerns are that it prestages a wider conflict. >> i think that's right. i think without a wider conflict, carl, we will say this is a damper on the market but not beyond that in a wider conflict. if you go back to '73 where you had the allies of israel give the resupply to israel when israel was going to lose or arguably was crippled, that's what started the oil embargo, which then led to oil going up 300% and which led to a tremendous economic problem for the united states. you could see it happening. that was october to april and i don't want to say worst case because you've got this human

life versus money. that is what happened chuckically. that was opu could they take the price pup? yes, they could. i would not rule out a '73/'74 oil embargo and then it gets ugly. >> there are the moves we've made so far regarding military shifts and aircraft trying to i guess pressure iran not to tell its proxies to widen this. >> right. i don't think that that government bothers to listen to us one bit. hasn't since the shah. i do think that when you look at what happened in '73, '74 until now, we actually export a lot.

the thing i think the president will come under criticism for is the solar -- >> we seem to being making an assumption that the saudis are going to do something. this may have been promulgated in part by iran in order for israel to -- >> i think you're right. >> and so the idea that this would mirror in some way 50 years ago doesn't seem to really fit. >> new york i agree. >> in that sense. >> that's absolutely right. it's this the saudis that led that and it's hard to see where the boycott would come from. i look at what happened in '73, '74. that was the cop kwens. it's hard to figure out how you would get an embargo now.

but that's what brought it home. the saudis seem to be much more amenable other than to continue what they're doing. >> they may have for the and -- >> freedom this morning says that deal's impossible for now. >> i mean, look, any -- we've always known anything's possible. we've known anything's been bob with ukraine-russia. i think that is somebody now if only just because that's hot work between and if they take it to the worst link to iran, i think it's possible. >> we're not experts. i know stocks. hezbollah gets much more

aggressive in the north where they have a lot more rackets than hamas has and then you really sort of have to try and understand what the ramifications are. >> look, some would say who are i'm not sure that he's not up more but he might. even though that our president was actually and kissinger were in which we've watched oil tries come down from new highs to recent highs. we're in the low 90s, still well below that and then we're obviously back to still here in our markets, watching our 10-year yield. >> not today. >> not today. >> though the fed speak is going to continue. logan is on the tape right now,

high inflation remains the most important risk we're going to get. cpi on wednesday and th had. >> you'd be foolish to not wait maybe a quarter, maybe two quarters. he wants to make it so people can a pardon opts given. >> from a two-year breaking point this morning, below 2. >> i do think -- you get a couple of good months where there's deflation and then you get a couple months that it goes up and he will look like, well, what did i do that for? why not just keep leaning on the

idea of solving inflation. >> it was a different world on friday but people were talking about an outside day on stocks and a ground number that seemed to alleviate concerns, some thought the economy was runs too ap that was a very powerful rally. the machines were defrocked. >> well, we talked about it in the morning of just how positive and initially the market took it differently but that narrative sort of took oaf as the day went on. >> then you woke up saturday and new world. >> then you're dealing with somebody does anyone know how to process it? >> quickly. >> if they don't process it, they'll avoid it.

>> we right. 73 it was but you correctly point out the alignmentses in '73 were quite different. >> even the research this morning, you can almost sympathize with the analysts who don't have any better edge than anybody else. this jpmorgan note about cyber security names jim being be in that was just for the cartographer analysis. he does point out something i think is really smart, which there are stocks that will be favored, differing growers, not companies with high kweelds but points out again that the technicals continue it brac he

doesn't dig in his heels but he explains what could go up and you realize the spot i find trifgs and think, man, if the company had good yields -- >> people think if i can get almost 5% and the government borrowing my money her which is that stocks are great you know, unless it's going to 10%, i'm

good. >> if you can hold it for ten years, frp learn and i was going to buy those costco bars and i can't buy candy bars anymore. >> are you on ozempic in. >> i'm on everything honestly. >> vix is still sieb 19. we'll get cramer's mad dash and countdown to the opening bell in a moment. new projects means new project managers. you need to hire. i need indeed. indeed you do.

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israel in 50 years as the death toll now is about 1,100 plus. an ongoing hostage crisis. the state department saying that nine americans were killed, the nysc and the nasdaq today extending their sympathies to those affected by the ongoing action. a moment of silence here by nbc and nasdaq.

we continue to monitor the conflict in israel. we go live to tel aviv for the latest on the ground. good morning, kelly. >> carl, good morning to you. a developing situation in the north of the country now, the israeli defense force saying they killed a number of militants who crossed the border from lebanon into israel just a short time ago. hezbollah has already reacted to this saying it wasn't them, they have not started any sort of ground invasion in the north

with the israeli military active in the north now, telling people to shelter in place there. this as what the military calls an extensive operation in the south in gaza. they say they're hitting a number of hamas operational centers in gaza. we know after this unprecedented attack over the weekend that hundreds are dead, 260 killed at that music festival alone. some people are missing. we don't know how many. family members have said that they have simply lost track of their relatives after the chaos at that music festival with militants opening fire and taking people hostage. there is will brave concern now for civilians in gaza as these military operations continue.

ten and there is also an unknown number of taken from israel into gaza over the weekend and their whereabouts and well being is unknown. today hamas is claiming that at least four of those captives were killed along with their hamas captors in some of these struks on gaza. israel israel is worried about taking that at its word. we quite frankly because we're not on the ground there and we've seen no video proof it have. but certainly things are continuing to evolve very quickly here in israel. carl. >> kelly, thank you for that. we'll continue to monday fer with your help.

. stateside, well, i think we were convinced last week that there, they had lend certain herbs to each of it. i think at the same time, there's a split in the crip about whether ukraine should be helped. and i think the split is more related to why don't the europeans do more and there's no ins if they saw what we do. >> although to be fair on ukraine, i think they are actually contributing a good amount. it's not clear if there really is a full division. you are talking about certain parts of the rab.

>> at republicans. >> well, i'm just saying -- >> it could prevent mccarthy and all the democrats together. >> i think there's a time where everyone would think you take the side of nothing, of neutrality. >> it doesn't help this sense of things being a bit out of control when we don't have a speaker of the house right now, whether it is israel or ten. it was okay. the usual chaos was going to be? would lon-terp yields in

bloomberg. i don't think anyone feels confidence about how the government has financed for the longest time. i'm still waiting i know that they're risk free. at the same time there is a jum eye. >> you mentioned the heartless nature of trying to predict acceptors in this world right now. >> obviously a. >> because of ukraine, i think that we've held back many things that we could give the ukrainians.

but this they're going to say the attacks would be shored up to go into gaza. >> let's see how equities handle this. . it's a big one today, veralto. the first pakistan based company to list the u.s. i think veralto will challenge us. but extraordinary client.

and people hud. it certainly that's pruty start and that move is just to israel, did it matter? >> no. but it did get that upgrade that microsoft is supposed to be come after them. it's a belief microsoft doesn't wa -- >> understood. >> thank you.

>> we spent a large time talking about exxon mobil buying pioneer. on friday from people who were familiar or it's no farther along, bev the and that said, typically leaking look that do. >> csx chairs are off. the first oil is up as we stused this morning. . in okay, a lot of that song, stop. >> as you pointed ou on.

tlfrm and we had an opportunity to watch, map tch up p they did use all-stock there. is this expected here in terms of what will it look like? i've heard nothing that indicates this thing is not in line still to retoo jim. often toombs when you see a journal sto p -- >> this is my own editorial analysis. to see what i seb prm so i thought there should have been

more circumspect in their frm without a taught. without a doubt. >>. n i think surprised my son is willing to accept certainly in the 270, 280 range. >> you think it worth more? caller: i didn't i it nrm but fwen, if you do believe in pros prm and you to ge to damp frng and we talked about the lowest technology. >> it's $50 all in. >> that's right. and israel recreasing the republican values on the wells and ps frfrm and has made a

close, if if you want to see something that under kate no one cares what iswe have a dollar. no kprnl frnl and exxon more reporting on disney and the prospect of activism yet again, perhaps trying to nom nat just himself for a board of directors but a slate. my understanding is forecast and i reported on them in the past and management or iger at lease

a and so we are potential will set up for another proxy fight, you know, fat sore reform snz frfrms frfrm frchl m this is the conversation they're telling what people ((did you happen to

listen to biography iger's interview we did a couple of months back? he's disrupting everything. obviously cost cuts, getting rid of people, abc, potentially not core, tienl part nrs very different when pelt was commonwealthing. 30 billion and you plus i think no. and u barks pup. again p. >> again, woe narmt around tell us what the plan is this time and why disney and their shareholder would benefit from

had flm flfrm i would think he would say dwr twrp prchl n my. i've got 10,000 acres oum still sitting on but my wife want to take an option on. >> you would think in some ways disney would just say fine, fine. just go on. >> like okay? >> because everything else going on, the disruption and distraction from a proxy fight just add to it.

but they're not going to do that. >> no, no! >> would that inflate if he does present a slate of directors? i'm told that he'll do that that he go nt ffrm ffrm and everything has been put into at least some form of just because we're doing this this way, we're not going to continue to. that said, these things take time. and maybe shareholders -- >> a win would be a tie-up loan, i would want a hot loan if you can find one. i guess they're hot and they're too hot.

>> speaking of apple, bern steen and he said it's possible the house rules against alphabet. >> then we can get duck, duck, goose, goose. that's what we want. >> how about chat? do we have june chat gpt for you? >> i think this makes a lot of sense. >> that's absolutely right, jim. i think that's fantastic. you know why? they don't have any fresh ideas.

>> you love the back talk. >> i love chatgpt. every day i wake up it tells me how smart i am. >> is that what it does? i used it a lot initially and i have not used it lately. >> i want you to try it. i want you to try it. use it to summarize documents you don't want to read. 150-page deck on some company. chat's great at that. >> i do need to start using it for that. >> do you think it would be good for the trial going on right now, ellison? >> sam bankman-fried. >> i was going to say things do not look good -- >> the defense rests.

the defense rests. >> when your best friend and your girl friend and everybody who worked with you is testifying against you and saying that they knew they were committing fraud -- >> where are his folks on this? hichlt that's not good. >> and how many times has jeff's -- invoked the bail for like literally bad people. but maybe not just a good look with him. just avoided one for jury duty. there were a lot of people there who really are out to convict people, although this is a civil case. it seems like people say i'm going to convict. >> we'll be updating on sam

bankman-fried. >> bristol myers,'s onkol ji company, stack was up that had soon and focus on a franchise in on ecology where inbut it did move the stock up. hence when you got the deal, today it's not -- the deal itself does include a cdr. contingent value. at least if -- >> how about the sell sheet? >> the big one haven't typically returned what they said in the

and it's a fantastic drug very early in trials and could be worth as much as 12 bucks, talking about $5.8 billion. it could be wor but bristol, jim, has got to keep doing this because el quist is coming off path. they were remember certain drugs. >> because they were nailed. >> they were failed. the expectation was this is the first of what may be a seriesias. >> i they're going go to do a lot for them. >> i held off.

although we had a great pam. >> david, the who arizon formant yrnl do you think the lawyers just say you know what, the ftc, we kind of rp rp but a deal like this where in that norm less concern perhaps. andrea, from these targeted therapies in terms of specific sells in specific areas use rrk use these drugs with key

interested frrnl but that's where crystal i fwes, from these stories that they're running about how they might be lon fmg frrngs and -- >> yes. >> brendan: dow down about 26 points here. >> that's why it's hard to, again, the market doesn't know how to factor in this and they don't have the bonds. when i polled people this weekend about the bond, half said, oh, wow, and then after it said flights tore me o "pb have been through the mill because

there's been less npg and general am i don't see faechks and we would know how much -- yes, if there were aerospace. rtx was pup. it one of those companies so challenged because of commercial airline problems. lockheed martin i think would be one day james, who is so smart would have a vision. he has a military background. >> g.m. was the story on friday as they were spared some further strikes. did seem to suggest some progress. we got mack works ers i think struck this morning at 7 a.m. this morning. >> i keep hearing ford may be

best in final. >> where do we end there? >> and in the nfl when you have a contract and it's not all guaranteed. >> right. so performance related -- >> just there's lots of different, you know, you have a base pay and then you have all these things regardless of -- you have temporary workers, first, second year and, remember you know, jim farley is not saying they don't deserve any abuse. highs not saying, if prks

personal i think he kind of feels like why is there no difference between what i'm doing and the other guys, which doesn't sit well? >> there you go. >> we're watching the action here. obviously not too far this morning. still from 4300. oil and defense are the winners. the dow down almost 50. the nasdaq down about half a percent. don't go anywhere.

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i built this. and it was easy, with a partner that puts you first. godaddy. haven't mentioned arm quite as much since the initial ipo but a bunch of initiations out of barclay, bofa, citi, deutsch, rosenblat, all buys or overweights. targets range from 60 at deutsch to 85 at rosenblatt. we'll keep our eye on that an get stop trading with jim in a minute. were talking to her. i just could not hear. i was hesitant to get the hearing aids because of my short hair. but nobody even sees them. our nearly invisible hearing

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let's get to jim and stop trading. >> those looking for bull markets which most have been elusive as of late except for the health insurers, look at cyber security. palo alto is the king, doing amazing job. our travel trust owns it. people say all right, on any sort of turmoil, someone is going to try to take advantage.

last week, clorox their statement did not indicate they were basically through with it. they're getting further, but you want something -- let me go to somebody else. between this and somebody else, they have palo alto, let me go with the other guy. that's a great thing that they have done. >> yeah. >> good. >> clorox was interesting. never talked ability walmart either the action, worst performing dow name. >> look, i think that walmart, they made the statement saying there's been a slowdown related to the week ago and to moun jur ro. i think they wish they had been specific, saying we got weakness, but not sure which way to go, because it's not like you can sell the debbie doughnut, whatever they do, you can switch. you can switch. i was -- my wife was in a store that had an aisle of tasty cakes. i would switch that up to rice cakes.

>> how about tonight? >> we'll talk about how larry williams is saying look out, this is a big move up. yep. >> following friday's action? >> yeah. >> david. do you think they should have cardboard or rice cakes in terms of taste? >> you can't tell the difference. >> you can put -- cardboard it doesn't go through it. >> true. >> it won't kill you? >> living in the car. >> i ate jack daniels. it's filled with vitamins. >> grains. >> "mad money" tonight at 6:00 p.m. eastern time. watching the markets on the heels of the weekend. back above 4300. don't go anywhere.

(swords clashing)

-had enough? -no... arthritis. here. aspercreme arthritis. full prescription-strength? reduces inflammation? thank the gods. don't thank them too soon. kick pain in the aspercreme. good monday morning. welcome to another hour of "squawk on the street." i'm carl quintanilla with david faber and leslie picker live at post nine of the new york stock exchange. sara eisen has the morning off. stoox trying to digest the attack on israel without the help of the bond market closed for the holiday as we get set for a crowded calendar.

fed speak and beginning of q3 earnings season. >> 30 minutes into today's trading session and three areas of the market we're a watching. the growing israel hamas conflict, commodity on the move. gold and silver moving higherp and natural gas hitting its highest levels. several carriers from united to american suspend flights to and from tel aviv. keep an eye on lockheed and northrop and general dynamics. each up 8% this morning. >> fighting in israel entering its third day. the latest reports are more than 1200 people have been killed following surprise strikes from hamas saturday morning with close to 5,000 people injured. palestinian militant groups claiming to be holding more than 130 in gaza who were captured in israel. here with the latest out of tel aviv, washington, and the intelligence community today, nbc's kelly cobiella and emily

wilkins and eamon javers. kelly, good morning. >> reporter: good morning to you. the headline this morning is that israel, the military is working on two fronts this morning in the north and in the south. the israeli military saying that they've killed a number of gunmen who crossed into israel from lebanon. this just in the past hour, hour and a half or so. they warned people in the area to stay inside in one city people were warned go into shelters and stay there until further notice. one hezbollah official says that there has been no action, no operation, mounted by israel by hezbollah into israel in the north. meantime in the south, the israeli military has launched what it calls an extensive operation against hamas sites in gaza. people here really still in a state of shockover what happened over the weekend. this unprecedented attack from

gaza into the south of israel. these videos shown online showing -- shared in social media showing people absolutely in terror. some people being killed. others being held captive and taken into gaza. some families taken by gunpoint out of their homes and moved into gaza. israeli soldiers among those taken hostage as well. many people are still looking for their loved ones at this hour. i spoke to a number of people last night and in the late hours who said they couldn't find any information. they didn't know if their loved ones were alive or kidnapped. meantime you have a very difficult situation unfolding in gaza itself. some more than 70,000 people, according to the united nations, are taking shelter in schools there, as israel continues this operation against hamas sites

and hamas is claiming that at least four hostages have been killed, along with their hamas captors, because of those israeli strikes. israel is pushing back warning not to take hamas at its word, and quite frankly, we cannot verify those claims at this hour. certainly a worrying situation in gaza, particularly for those people who know, who have tracked their families and know that they are there being held by hamas. carl? >> i'll take it, kelly in tel aviv. thank you. to eamon javers now we'll get more on what he's hearing from the intelligence community. eamon. >> good morning, david. that's right. we're here in sea island, georgia, for the cipher brief intelligence conference. i spoke with a cia officer with extensive information in the area, who said the information war over the next 24 hours will be key.

he expects hamas to try to bait the israelis into large-scale strikes in gaza that cause civilian casualties that hamas can publicize on social media and says the saudis will be watching that information war carefully to see if they can still proceed with their talks on that normalization deal with israel, which at this moment at least, is seen as something that is still possible. i also spoke with a former cia officer norman rule, who ran the agency's intelligence on iran until as recently as 2017. he said gaza presents enormous military challenges. >> a land attack by israel into gaza will be an extraordinarily difficult operation. there are no military targets. in essence, there are no uniforms for israel to target. we're looking at a very dense civilian area with high rise buildings with a door-to-door fighting requirement that the

u.s. and the british saw in iraq and afghanistan and, frankly, in which the israelis far less experience. >> and guys, the focus here is very much on u.s. assets that are headed to the region and the question of whether american forces would be called on to rescue any american hostages that have been taken in the course of this attack by hamas, the expectation here is that difficult days and difficult decisions are coming. back over to you. >> that's an understatement. thank you. the pentagon announcing it's sending additional munitions to israel and moving warships closer to the country in a show of support. let's get to emily wilkins with the latest from washington. >> leslie, congress is starting to work on a response to the war in israel, but it's difficult to go ahead right now. there's a lack of a speaker in the house, the house is paralyzed and can't move legislation. the senate isn't in d.c. this week, making it unlikely anything will move until next week. congress is trying to get work

done. over the weekend a senior administration official says there will probably be a role for congress to play, but the white house hasn't made a request yet. members of the house and senate received briefings and both are trying to work on legislation to support israel. again, the senate is back in session next week, but it could take much longer for the house to be able to move anything. they need to get a speaker in place. house republicans will be meeting today and then tomorrow they'll meet again from the two lawmakers running for speaker, steve scalise, the majority leader who was mccarthy's number two, and jim jordan, chair of the judiciary committee and led the gop attack on the biden administration. republicans really want to avoid those 15 rounds that they went through in january to select a speaker, so the plan is they will first vote behind closed doors on wednesday, keep going until they reach consensus and only then they'll be able to go to the house floor. it's not clear how long that's going to take and, of course, it's a big question then how long congress remains frozen and unable to assist in the war in

israel. >> we haven't mentioned schumer and xi. emily wilkins in d.c., thanks. oil prices are rising on the conflict in israel as opec releases its annual forecast this morning, raising world oil demand forecast for the medium and long term. joining us at post nine, rbc's managing director, head of global commodity strategy and middle east and north africa research. great to have you. >> thank you for having me on. >> what needs to happen to make sure there's not more destabilization? >> clearly the concern right now is how does israel get the situation in gaza under control? talking about this is a very densely populated area a ground invasion of gaza will be difficult for israel, so the coming days and weeks will be challenging for israel to stabilize the security situation. for oil markets everyone is watching what happens with iran. iran's involvement in this attack, what does it mean for iranian oil on the market and do we see an expansion of the war to involve iran?

>> did the journal story suggest a smoking gun or not? >> i know one of the authors of that story, has deep contacts in in iran. that is the biggest concern for the biden administration which has looked to stay out of a war in the middle east, which has tried to pull israel back from attacking iran. the fact that you have a newspaper out there saying that the irgc planned and coordinated this attack, that is very, very difficult for the administration if this proves to be true. >> the administration actually ask not confirm those reports at least. >> yes. >> when you think about potentially war with iran, i don't even know if you have models that would look at what the price of oil might go to, let alone everything else that would occur as a result of something like that. >> we're not there, but even if the administration is saying that there's no smoking gun yet, what we do know is that iran does provide weapons to hamas. they are financial sponsor of hamas. the question is, what is the actual role? is it facilitating the attack or

was there direct coordination? that will be important to see if this conflict expands. iran is a major oil producer. there will be concerns in the market about the $3 million bairls of iranian oil go off the market, what does it mean for the straits of hormuz. even if we do not get to this outcome, the u.s. has allowed a softer approach on sanctions since the 00,000 additional iranian barrels on the market. are we going to have to tightenen sanctions and pull the barrels office market to essentially defund iran's support for groups in the region. >> >> what about the other potential wild card here which is saudi arabia? the u.s. has been leading an effort to, you know, give the saudis a diplomatic reset with israel. amid this conflict many have said that is now off the table. do you agree with that and what happens, you know, kind of once hope hopefully evenly we see the other side. >> extremely challenging for the normalization track to proceed

in the midst of a counteroffensive the israelis launched. the saudis indicated they wanted concessions from the israelis to the palestinians. it's very hard to see benjamin netanyahu able to make the type of concessions now. it looks like a stalled track, maybe it can resume, but for the biden administration this was a huge priority and there have been discussions last week, some of the softness in oil last week was the sense that diplomatic deal was going to get done and the saudis would provide additional administration relief for the biden administration. all is in question right now. >> a lot has been written about what they're calling an intelligence failure in israel. does that mean their response has to be more forceful to regain credibility? >> it's going to be a challenge for the benjamin netanyahu administration. it's going to be a look at who knew what, why was this missed? was there an overreliance on signal intelligence, not human intelligence. it's going to be a conversation

in washington, what did the cia know? i came out of the intelligence community. i was there after 9/11 and there during iraq. there will be a deep investigation both in israel and in the united states about the intelligence failures. >> and a lot of questions about the israeli distraction and division going on there as a result of the judicial proposals of the benjamin netanyahu administration. hezbollah, how important is that they do nothing and how closely should we be and others be watching that as a sign of a larger -- >> 100%. 150,000 hezbollah rockets is a concern for israel. lebanon is in a disastrous economic state. the leadership does not want a full-scale war, but controlling hezbollah is very, very difficult and so the question is, if we have very, very difficult and emotional footage out of gaza, does hezbollah feel compelled to have to enter this conflict? >> or has iran accomplished what it wanted to derailing the

saudi-israel peace negotiation? >> this will be an interesting situation for iran. if it comes out iran was complicit in the planning of this, iran potentially does face not only significant retaliation from israel, but the united states will have to come in potentially and support israel in whatever action they want to take f there is the clear smoking gun of iranian involvement in this. >> any point in adjusting your oil forecast? >> we simply do not know. we've always highlighted from the start of the year the risk of a confrontation in the middle east. once benjamin netanyahu returned to the stage in israel, he was very clear that he was deeply worried about the iranian nuclear program in the wake of this attack, there's going to be hard questions asked about what type of support iran provided to hauls. -- hamas. >> thank you for coming in. as we go to break let's get a check of our road map. tom lee has a note on all the risks facing the markets and

where he sees stocks going. >> a week for the fed and the economy. a lot of fed speakers on hand and minutes of the last fed meeting and key inflation data. former st. louis fed president jim bullard will join us to talk about all of that and where he sees deals headed. >> nelson peltz putting the pressure on disney and bob iger ce ainonga. we'll explain. big show still ahead. something amazing is happening here. students are inspired and engaged. that's because school districts consulted with cdw

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welcome back to "squawk on the street." our next guest expects markets

to initially react to caution with the conflict in israel but the macro data is a busy week this week and will take center stage according to tom lee who joins us now. thanks for being here. so, you know, why do you believe that it's really the macro data that market will focus on, and why do you think the markets had somewhat of a muted impact to the conflict abroad? >> it's a great question. i mean, i guess the way i would like at it, the stock market reaction is telling us that they are viewing the conflict as ultimately limited in time and scope. if there was a bigger sell-off i would think the market was smelling something much more dangerous and engulfing. i know people are focused on oil and the fact that bond markets are closeded, but we can see what interest rates are likely to do tomorrow by looking at etfs like tlt and looks like

interest rates are falling. that's a singular impact on stocks anyways. >> what do you think the ultimate impact would be? you said interest rates should decline sharply when the bond market reopens on kind of this risk off sentiment breaking the higher for longer fever that's existed for a while now. if that does happen how much support do you think it does provide for stocks? >> i think it's going to be substantial because if we look at investors they're looking at an economy that's been stressed and then now under increasing stress because long-term interest rates have really pushed up. i think we're seeing fed governors starting to push back -- push back is not the word -- but realize if it's term premium rising that's acting as a huge drag on the economy. now we have a conflict that could undermine consumer confidence and so as a result, i think it's changing the calculus and the fomc and the fed are more likely to pause. to me, that's probably my big takeaway and i think that takes

away a downside case for equities and also makes it harder for interest rates to keep pushing higher which is something that can break the economy. >> that was logan's point about term premium and been known as being hawkish, couple that with the volume on tlt last week, are you willing to make a call that rates have peaked? >> i would love to be able to say that. i think bond markets are tough to call, but, yeah, i mean it looks like if you're not seeing rates push up higher today, tlt is down, well, you know, we're -- you might be running out of reasons for interest rates top keep going up, and as walter says, you know, when a parabolic move like this is it's not taking the escalator, it's going to come down sharply. >> what about the oil impact here? we've seen oil skyrocket. the dynamic is different today than historically. we can't make a direct analysis there, but, you know, are you

concerned at all about the potential for oil to go above $100 a barrel and the implications therein for inflation to resurge? >>, you know, oil should have been up more today if the market was worried about disruption from production. i think oil really weakened. we've had supply cuts all year and oil has been weakening because we know that demand is quite weak. i don't think demand is picking up and, you know, at the end of the day, i do think if it was going to make its move it should have made a bigger move today. again, interest rates and oil are hard to predict, but to me it's a muted move in oil. >> interesting. well up about 4% for brent currently. we'll keep an eye it. >> thank you. activist investor nelson peltz taking aim at disney again. this is as shares sit at what is roughly half of where the stock was in 2022.

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keep an eye on shares of disney, they are up as you see less than 1%. reports yet again from the journal and us as well that nelson peltz is putting pressure on the company and, of course, its current ceo bob iger, who is in place in that role until 2026. yeah. we've seen this before. it's like a rerun or at least chapter 2. about a year ago peltz was gearing four a proxy fight to get one board seat, put himself on the board of directors. at that point disney was not interesting on seeing mr. peltz on the board, but after a bit of back and forth and then when mr. iger joined me for an interview on the 9th of february, people may recall that peltz said proxy fight is over having heard of cost cuts and iger not back quite a year in the job at disney after taking over from

bob chapek unexpectedly. what's going to happen now? it appears that peltz has increased his stake significantly to $2.5 billion stake on a percentage basis given a fallen market value is significant for trient, his firm and what remains unclear is what he wants other than a board seat for him and perhaps what we've been hearing a slate. disney hasn't seen or heard about it. there has been conversations in the past between peltz and iger in which he said, i want that board seat. come on. let me have it. and i guess iger said no. that continues to be the case. for their part, disney will make the case you want disruption a, what we're doing right now is as disruptive as can be. the criticism might be too disruptive, with my interview on july 13th of this year. abc may not be core, the linear business is declining faster and

we have to figure things out. espn we're looking for a partner, focused on getting dtc from profitability and on from there. their contention would be as you look at video from that interview, we are disrupting as much as possible. we're cutting costs. what exactly is it, mr. peltz, that you would suggest we do beyond that? obviously, these moves are going to take time is what disney would also say, and they want that time. leslie, they're not interested in mr. peltz's help and we could be set up for another battle which, of course, as you well know, is distracting for management, particularly in when it comes to what they're trying to accomplish right now, which is a lot of different things at once. >> you bring up a good point and the point of just the overall size that this has in terms of trypen's overall portfolio, about 30% of asset under management. the stock price has declined 26% since he first withdrew his nomination.

i don't know if you've heard from the market on this, but at that time, you know, he must have had a sense that a proxy bat mail not have been successful and therefore when they did announce cost cuts he decided to withdraw, maybe he would have been successful but you have to think, there was some kind of consideration there. i have to wonder what has changed in addition to the stock price, that makes him think that a second attempt at this would lead to some board seats. the idea that there are multiple seats at stake potentially that he would be seeking may have something to do with this. >> disney would be happy to review or at least, you know, from what i understand, happy to take a look at potential nominees if he were to present them. what has changed as you point out, is that, the stock price is down more. that would be more frustrating to shareholders but it goes back to what is it that he would do and/or suggest they do that is not being done by the current management team under mr. iger? that remains unclear, although

for his part peltz can say i can be his ally and get change to happen more quickly. that's conjecture on my part. we'll watch of it, because it is two high-profile people in the form of mr. peltz and iger it will in disney. up a bit to uds. >> nomination window opens december 5th. >> i believe so. then you would go to the meeting in the spring. this would play out over some period of time. we'll be watching. no more really to share at this point in terms of who would be on that slate, for example. >> which is critical with a universal proxy which you can pick and choose which slate goes on to the board. >> great point. >> general mark kimmette, former secretary of state under george w. bush his read on the growing inusel-hamas conflict when he jos next. we're back in a couple minutes.

uniquely american. it was initially created as hispanic heritage week by lyndon johnson. later it was extended into a month by ronald reagan. it's a unique opportunity to celebrate our diverse set of cultures. it ties us together. not only through our hard work, but through our communities and more importantly, through our families. hispanic culture defines the american experience. welcome back. i'm silvana henao with your cnbc news update. while many airlines are suspended service into israel as violence escalate with hamas, the country's national airline is launching flights. a spokesperson said today's flights to israel are full with many reserve vists traveling back to the country to help the troops. u.s. air carriers, united, delta and american are among those who

have suspended direct flights into israel. robert f. kennedy jr. expected to ditch his democratic bid for president and run as an independent or third-party candidate. the anti-vaccine activist is speaking in philadelphia where he's widely expected to make the adjustment. union workers at volvo owned mack trucks went on strike after rejecting a five-year contract with the company. the proposed contract for the 4,000 workers in pennsylvania, florida and maryland, included a 19% pay raise and increases in health and retirement benefits. the uaw says nearly 75% of the workers voted to turn the deal down. carl? >> thanks very much. watching markets today. stocks with relatively muted action. the bond market is closed so that's a clue that emerging markets dequity market does not have. the lion's share of the winnings, consumer, materials, transports are down, the braank

are down, the airline index worst day since may. to dominic chu with more. >> we are tracking a number of impacts in the market from the conflict in israel and palestine today. oil prices as you pointed out have spiked in response to that. up with of the etfs oih on pace for its best day since july with all higher today. that's having an impact on the travel stocks as you point out. you have delta, united, american airlines, all firmly in negative territory today. those companies and others in the travel space have been warning about higher oil prices in recent months. shares are especially sensitive to the fluctuations. many airlines suspending service as silvana henao points out that led the conflict including delta, united and american. then shifting gears to some of the major defense contractors out there, like lockheed martin, raytheon, general dynamic,

northrop grumman among the names moving higher. the aerospace anddefense etf ita is on pace for the best day in nearly a year as the conflict is seen as raise degree mand for weapons on the other hand instruments of war. again, some of the interesting reverberations happening, but it's focused tension on geopolitical risk. back over to you. >> the market tries to handle. thank you. dominic chu. israel is retaliating against hamas. hundreds of air strikes in gaza as the death toll continues to rise since the start of attacks on saturday morning. the u.s. now sending military aid. joining us to discuss, former assistant secretary of state general mark kimmitt to talk about that. thanks for the time. good to see you again. >> good to see you, carl. >> what do you make of israel's responsep and how forceful could it get? >> it could get extremely forceful. i think at this point we're a seeing the first preparations for a further action.

they're doing precision bombing strikes. they have intelligence assets inside of gaza right now. they're bringing in the front line troops get ready. i think they're prepared but i don't think they've made the political decision to invade gaza right now. >> that kind of urban warfare would be incredibly dangerous and difficult. what are the arguments for and against? >> the main against is not only urban warfare, but urban warfare and gaza holds about 100 israeli and american hostages. anything israel does could be completely set aside if, in fact, hostages are put at risk because of that. even if they do conduct an invasion, it is well known that hamas will use the hostages as human shields, so i think that's the major constraint on this entire operation. the presence of over 100

hostages held by hamas. >> in the past, general, they certainly have not wanted to occupy gaza. i mean the most bellicose prime minister they had is the one that pulled out. is it still hard to imagine or do you think circumstances have changed so much the israelis would consider occupying? >> at the political level they're talking about ridding gaza of all hamas leadership and reoccupying. i think the military is probably fighting hard against that. not only is urban warfare tough, but when you're conducting an occupation among a hostile population, that's just prescription for long-run disaster, both at the military level and at the diplomatic and regional level. >> and general, one of the biggest criticisms of the events that unfolded over the weekend was just that, you know, you have the, perhaps, best resource, national security apparatus in the entire world, that had a clear breakdown that

led to vulnerabilities allowing the attacks to take place. what is your expectation in terms of their ability to wage, you know, a counter attack in the region in a pointed manner? >> well, i don't think the counter attack in the region. i think there will be a counter attack in gaza. we're going to do everything and israel is going to to do everything to make sure this does not become a regional conflict bringing in military groups from syria, hezbollah from lebanon, west bank militants and al qaeda in the s sinai. you can be sure that israel is conducting nothing but intelligence operations, what we call intelligence preparation of the battlefield, alongside the precision strikes on key hamas headquarters. >> speaking of a larger potential conflict f iran is found to have aided and abetted this attack definitively, you know, what to we do as the u.s. and what does israel do and what is the likelihood that you have

significant hostilities with iran? >> yeah. that's the million dollar question, david. look, the iranian revolutionary guard corps has been using proxy operations against the region and against the united states inside of iraq for years and years. they're experts at this. they operate inside of iraq. they operate inside of syria, yemen. this is old-school work for the irgc and that's why you see what a success this has been from hamas into israel because of the advisors that nobody will admit yet, but certainly everybody understand were advising hamas. whether this reaches the level of direct attacks or confrontation against iran is yet to be seen. again, back here, that's a political decision certainly not a military decision. i don't think any military officer would want to take that order, but they will fulfill it if given to them. >> how are you thinking about

how this ties in to our commitment to continue to fund operations or at least aid the ukrainian effort? i wonder how you read xi's lack of response regarding all of this out of china as they were meeting with schumer? >> well, china's never going to, quote, get involved in internal affairs of other countries. now, with regards to supporting ukraine, there is a presidential draw down authority where the president can take existing stocks and send them to a foreign country. [ inaudible ] when it comes to israel because he has used it all up in ukraine. there still remains $1.8 billion in war reserve stocks that are held inside of israel so that should tide them over until we see some sort of resolution from out of congress some appropriations. so i don't think it's going to directly affect ukraine operations in the near term, and

i don't think it will effect israeli operations in the near term, but if this was going to be a long war, in both ukraine and israel, we will need to see some congressional appropriations to resupply and re-support our allies, which is probably why you see the defense stocks going up today. >> finally, the efforts to normalize israeli-saudi, that u.s. brokered deal, did you hold out hopes for that prior to saturday morning? at this point, are you willing to write it off? >> i'm not willing to write it off. you had dan seenor on a couple hours ago, and he explained it's still the motivation of saudi arabia to do this. the leadership cannot continue this as long as the palestinian conflict is going on. otherwise, it could very well be they're overturned by their own people. in the long run, i believe that we're going to see saudi and

israel normalize, but not in the short term. it's not just the saudi-israel normalization that will be affected by this. all the diplomacy in the region, trying to stabilize the region, for the near term is kind of out the window. >> yeah. despite some amazing oeefforts. we'll see. thank you very much for your time and guidance. >> thank you. still ahead, more on the markets and what a growing israel-hamas conflict could mean for the fed. former president jim bullard joins us with his take and the big week ahead with fed minutes, inflation data and yields at 16-year his. nd market still closed but don't go away. we're back in a moment.

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let your employees do their own payroll. don't go away. fairly narrow range for the s&p this morning at least as the premarket hinted. s&p gainers i would say the top

15 or 20 are all going to be within oil or defense. losers are going to be mainly in the travel space. we mentioned the airline index having its worst day since may, but you'll see cruise lines in as well. carnival the worst laggard at the moment. >> stocks a bit lower amid all the geopolitical unrest. fresh fed speak, dallas fed president logan saying that the recent surge in long-term treasuries could mean the fed is done hiking rates for now. let's talk about it with former st. louis fed president james bullard, purdue university's dean of business school. bond markets closed today but we've been talking about the 10-year in particular, the move up in the yield, not perhaps only reflective of fed policy, but of this idea that supply and demand has become important to the movement of bonds. how do you think about that, in particular the deficits that we are funding right now, and are going to have to continue to fund for some time? >> yeah.

it's an issue, but i don't think that's the main dynamic here. i think the main dynamic you had svb, about 200 days in the past here, and people predicted recession ahead because of svb that has not materialized, so the market has had to reprise and that's where the higher yields are coming from, think. >> you're not as concerned that we're really just talking about an endless series of issuance that is going to tap out -- >> there's plenty of issuance, yes, but i don't think that's the main dynamic here. i think that the story that the u.s. was going to go into recession with high probability in the second half of 2023 is not materializing and that has mainly what has caused the 10-year to go back up. close to 4.8. >> that's right. and -- all right. ob friday we got a very strong jobs report -- >> i think that confirmed that, the story that, you know, you've got, if anything, a

re-acceleration of the u.s. economy in the second half of 2023. you have to price that appropriately. that means higher for longer for the fed. i think, you know, yes, we're getting disinflation, that's good. you've got the pce on a 12-month basis, core pce about 13.8. that sounds pretty good. bit that's double the inflation target. you have to get that down. it's going to take a while to get that down. the fed has to stay higher for longer. the faster growth in the economy is good news. that will slow down the pace of disinflation relative to what otherwise would have been. >> do you think the geopolitical events over the weekend change anything with regard to the rate trajectory for the fed? >> i've been trying to digest it like everyone else. markets hate uncertainty, of course. this so far doesn't look like it's going to cause a lot of problems with u.s. markets. my initial reaction, the u.s. benefits because of flight to

safety, so then you get downward pressure on yields and that also i would argue higher for longer for the fed. >> i always think back to your slide deck from a few quarters ago, which were seen as aggressive at the time, but what were you seeing that suggested you thought the economy could handle those types of rates? >>, you know, i emphasized the 1990s as a good story line for this episode. of course the parallels aren't identical, but we did raise rates aggressively in 1994. we did get a little bit of a slowdown in 1995, but skirted recession. then it set up the u.s. economy for one of the best periods in the postwar era and unemployment went down to about the level where it is today. i think people think we can't stand 5% rates, but look at the second half of the '90s. you had rapid growth of 4% gdp growth for many years in a row,

and interest rates around 5%, flat yield curve most of the time. you got great results. great labor market as well. i think that would be my hope here. we're able to contain inflation, get it back down to 2% and set up a period of great growth for the u.s. economy. >> 200 days since svb and no recession so far has resulted from that. we get a fresh read on the state of banks and lending. how do you think the tighter financial conditions have worked their way through the system, and do you expect any additional lag effects to come out from here? >> on the banks i think weathered the storm well so far. i think svb was a quirky bank and some of the other ones were quirky compared to most banks which are conservatively managed. i think also the largest bangs have not had trouble and even

benefitted from some of the turmoil. we're going to get -- they're under some pressure. their fixed income portfolios have dropped in value and everyone understand that, but they're managing through that. i think it's steady as she goes on the banking side. on the long long and variable l sure, melton friedman talked about that years ago. but i think much more of the transition these days comes through here, through financial markets. and is faster than it would have been in those earlier eras. so, i think the story isn't quite the same today as it would have been in the '60s and '70s. and so that's why i think that story is being overplayed as well, the long and variable lag story. >> and so back to rates, do we go higher from here? we hit the terminal rate and we'll be there for a longer period of time? >> the committee has said maybe one more rate hike.

they'll be sensitive to the data. i think they're being careful, which is appropriate, data-dependent, which is appropriate. but it shows you that the next move could be higher. and i think the risk here, from a risk management perspective, the risk is that the inflation turns around and goes back up over -- core inflation goes back up over 4%. then the fed has to go up over 6% or 6.5% or something. that's the scenario that's not priced in here and nobody's ready for that. so, i think you want to be careful against that kind of problem. if inflation continues to come down and the economy continues to be strong, we can handle all that. that will be great if that happens. >> how is perdue business school treating you? >> daniel school of business. it's a new endeavor to reimagine the business school, so it's been great fun to see all the students and get involved in a great project. i think it will be very

successful. >> they all focused on generative a.i. like everybody else seems to be? >> perdue is number four in the country in engineering and bigger than the top three combined, so we're all over generative a.i. >> we'll talk about that perhaps another day. appreciate it. jim bullard. >> thanks very much. coming up next hour, oakmark stock pick erbil is with us. we'll talk about some picks, why he likes them and beaten down names in a moment. when you think of investment risk, do you consider climate risk? changing weather patterns are impacting the way we live and the value of businesses large and small. this can mean disruption to supply chains, changing demand for products and shifting regulation. what does this mean for your business, your clients, and your investments? ice offers data and markets that can provide critical insight. manage your climate risk with ice. ♪ ♪

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welcome back. chipmaker arm getting a pretty nice reception from the street this morning, despite being off more than 20% from the post debut highs. let's get to dom chu on some of these initiations. >> if you take a look at the check on arm holdings, higher by just maybe getting some steam sheer, by 1%, getting help from analysts across a slate of different firms who have all initiated coverage of the computer chip coverage with generally a buy or overweight or some equivalent rating. can you count goldman in that mix, jpmorgan, bank of america, deutsche, jeffries, barclay's, citi, you get the idea, all saying thematically it comes down to arm expanding market

share and reaching everything from smartphone, data centers, automotive, other applications. arm holdings getting a boost there. oracle, cloud computing giant, up 0.75% or so, now down 0.1%. analysts at evercore upgrading it, price goes up to 135 from 131. they cited the recent pullback in the stock providing a good entry point for buying, given better than expected results from cloud services. and we'll end on rivian, the electric vehicle maker is seeing its stock, you can see they're down about 5%, due in part to a call by wedbush which cut the price from $35 to $32 and kept the overweight rating. they cited rivian's recent announcement of trying to raise $1.5 billion in convertible bond sale. they still think rivian is a winner in the ev industry but some moves call into question whether the strategic element is

there. rivian automotive down about 5% right now. we'll send things back to you. >> that concerned a lot of investors. thank you. before we go, real quick, check of pioneer natural resources. it was a stock we were very much focused on on friday. no deal from exxon, but we expect those talks and/or potential deal still continues. from what i'm hearing an expectation, it could contain a good deal of stock. the next time will maintain price discipline. what does that mean? wel vewa'lha to it and see. "squawk on the street" continues right after this. whatever you see, at pgim we can help you rise to the challenges of today, when active investing and disciplined risk management are needed most. drawing on deep expertise across the world's public and private markets in pursuit of long-term returns... pgim. our investments shape tomorrow today.

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good monday morning. i'm carl quintanilla. the geopolitical and global economic impact of the conflict in israel. y you. resurgence and optimism around private credit. kkr's co-head of credit and markets is here. oakmark out with new picks, new buying opportunities to talk about. bill nygren is going to join us. attacks on israel and the market reaction. let's bring in cnbc senior market commentator mik