dow, 14 or so on the nasdaq and about 5 point, as you can see, on the s&p. there are yields. we didn't trade yesterday. this is the first data point of the week for the ten-year and the two-year. make sure you join us tomorrow. right now it's time for "squawk on the street". good tuesday morning. welcome to "squawk on the street." i'm consistent with jim cramer at the new york stock exchange. david faber has the morning off. equities trying to build on monday's bounce as the tragic headlines out of israel are offset by dovish fed speak. ten-year drops to 4.66. our roadmap begins with the israel/hamas conflict entering its fourth day. israel says its border with gaza is now secure. pepsi rallying in the premarket posting a beat on earnings and

revenue. more labor strikes to come. thousands of hospitality workers in vegas planning to picket this week after another round of failed negotiations with the casinos. let's begin with the markets trying to build on yesterday's rally, jim. were you surprised at all by what stocks and oil did? >> yes. actually i started my show last night by saying a little counterintuitive you could have both at the same time. if you take a look at the same time, obviously, vice chair jefferson speaks and boom, 1:30. they couldn't take the oil stocks down because of what's going on in the middle east. they didn't have the bonds because of columbus day. it was a three-pronged oddity that the s&p could roar and we didn't have the bonds to key off of and set up a picture that i think was counterintuitive to most people. >> you had logan and then jefferson talking about higher-term premiums and being mindful, they said, of the impact of higher rates. >> yeah.

i also think you had the note from edgar din any. he's always distinguished himself. he's an old friend. he's in the camp of we've got to be more careful. that seems to be winning people over. i do think that it is overblown that the mid east could hurt the u.s. versus, say, 73, where you got an oil embargo which really hurt the u.s. i also recognize that, if you try to define how far this thing goes, you could be wrong 48 hours from now. >> far din any takes recession ends from year end from 25 to 30, bullish on inflation, productivity. >> yesterday we mentioned mike goals. i appreciate his work. it wasn't like he shifted from bullish where you had one of the greatest rallies to bearish. yar din any, tremendous bull through this period. i read him every morning because

he's a must read. it felt like, are we going to lose yardini. it reminds me of the great late marty zwie who used to be on wall street week where you're like, ooh, wow, i'm on the wrong side of that trade. >> meanwhile you've got the imf warning about a stubborn global economy they say is limping along. they cut their forecast for china. they cut their forecast for the eurozone. moments ago on "squawk," you had tudor jones. take a listen. >> it's a very threatening time. so that is also happening at the same time the united states is probably in its weakest physical position since certainly world war ii with dead to gdp at 122%.

it's a really tough time for the moral voice of the world, certainly been the leader since world war ii. >> he says recession probably begins q1. hard to like stocks. likes gold and bitcoin. >> right. i like paul very much and have followed him and contributed with him. his causes are excellent. i think he does raise a risk that everybody who has been around for a long time raises which is the deficit didn't really afford anyone an opportunity to make money which watches us unless you want to do gold or bit coin which don't do well. i'm not criticizing. i'm saying, once again, someone who has done well is cautious. that fits the you only need to get rich once, the talk into used to give to the eagles when andy reid was coach, when i explained after they got these big contracts, they only need to get rich one and tried to get

them not to do crazy things. that's him. you be with someone who is a running back who just got a big contract and he's trying to figure out what to buy. i said, buy municipal bonds. i was in the same position he is, guys, there's no upside here because you're already rich, except for a lot of our viewers aren't rich and you have to find something that helps. >> this is part of the dynamic that after flikts the very wealthy, the number of things they have left to worry about are intractable. >> the conversation with my wife, should we be in the five-year or ten-year? wow, really raising the whole bar. a lot of the people who watch us, the vast majority other than hedge funds, are searching for ways not to not lose money but to make money. i can't go out with gold or bit coin. i can't be in something where mr. bitcoin is about to go down big. i'm stuck here trying to find the pepsico after the big

decline because hugh johnson gives me nice background. i know that's not his job. none of the billionaires who come on, it's not their job to help people make money. what they do, they default to look. it's not a good time. it's never been a good time for a billionaire ever, ever. this is completely lennon. i'm a great follower during the strikes. i like trotsky because people united will never be defeated. no. actually the worker united. people forget the chant. lennon is right. if the rich are unhappy, it's their own damn fault. i'm not against the rich. wren none had kind of a radical view, but i do find myself saying, oh, okay, let's just not help people at all because we don't have to work hard and look up things. >> but has the -- have the events of last weekend changed your overall risk profile, or do you think the market is going to be able to thread through this? >> obviously there's an

existential threat. i remember when i was at goldman sachs and we had chernobyl, and i was saying we've got to buy mcdonald's because it's down big. a person far senior to me said this could be the equivalent of thermonuclear war. i said, okay, maybe we should switch to tyson. >> i don't think you've ever told me that story. >> look, i think we could very easily -- it is no problem for me to come in every single day of my life here -- i've done well. i'm very lucky -- and say, i recommend nothing. why? because i've done well. it's a perilous time since world war ii, world war i, 9/11, the korean conflict. i've got a lot of them. 53,000 guys dying in vietnam. tech. i can't buy that because our viewers don't want that. paum doesn't exist in that world. that's not him. and he shouldn't. but i can't come out here every day and just say, you know what,

there's coca-cola signing home depot, i don't like them because they're equities. it's not time for equities. it's time for the 20-year. i'm not going to play that game. that's not what our viewers want. they don't want us to say, you know what, i can't buy pepsi because it's not an equity. our job is to find something that works. >> how are you sharpening your screen right now. >> i think there's a big backlash led by hugh johnson who says i'm going to give you a 2024, basically saying whatever the hell walmart said isn't right. now, i could say pepsi is an equity, send me to celsius, they own celsius, they've got a double. i am right there being jocular. we have a job. our job is to look underneath the s&p 500. these guys never look at stocks. they run too much money. you think they care about home

depot versus lowe's versus black & decker, floor and decor? why don't they? disney is too small. i get -- occasionally i get upset because i spent all the god damn -- excuse me -- spent all last night trying to figure out what to do here, i can come in and tell carl, i'm starting to look at those munis and then end the discussion because they're gos and give you the heisman. or i can say, wait a second, i've got a charitable trusti run and i'm forced to try to find something. people don't want me to say, listen, the s&p 500, no. it's time for ethereum. >> we have some variation of this conversation every time there is a dark -- >> look, it's been dark so many times in my life. i remember when i had to cubbyhole i had to stick my head in because the russians had the thermonuclear -- they had

devices. they had stolen the h bomb so i had to put my head in a cubbyhole. i don't think that would have been necessarily what would have saved me with thermonuclear war. i don't know. >> that said, we are going to stay alert to the developments in israel. the country does say its border with gaza is now secure four days after that surprise attack by hamas. nbc's kelly cobiella is live once again in tel aviv. hi, kelly. >> reporter: good morning, carl. we're actually at a hospital, the largest hospital in israel here in central tel aviv. what you see behind me is a massive blood drive. people have been lining up, waiting for hours in some cases to give blood here. they're also opening up an underground hospital, a secure hospital, turning a multi-story car garage underneath the hospital in a place where they can take care of patients where patients can be safe in the worst possible case scenario according to the ceo, in the

case of a multi-missile strike on tel aviv. on the ground, the israel defense forces are continuing their counteroffensive against gaza, something like 200 strikes on gaza positions into today. israel says they're targeting all sorts of key operational positions for hamas and islamic jihad including a command center in a mosque and weapons storage also hidden in a mowing. the effect on the ground for civilians in gaza is absolutely catastrophic. the u.n. saying 180-plus-thousand people have now been displaced inside gaza. there are hundreds of homes that have been destroyed. apartment buildings have been caught in this, no matter how precisely the israelis say they are striking. it's sort of inevitable in gaza that civilians will be

effective. we've seen video of children being taken out of the rubble and into ambulances. the united nations say more than 100 children have been killed in gaza. the numbers continue to rise there. the humanitarian situation there is really reaching a crisis point. apparently fuel and medicine supply is running low. that fuel is used to keep those hospitals somewhat operational in gaza. here in israel we're still hearing air raid sirens today. we heard one just a short time ago while e were at the hospital on our way to try to interview a patient. it's simply a case of everybody gathering into the one safe space they can find on that floor in the hospital. for us it was right next to some elevators with about a dozen women who were all in the hospital because of high-risk pregnancies. the doctor says we don't really have a shelter on this level, so this is what we do every time an

arp raid siren sounds. this is the kind of thing that's happening in tel aviv, in other parts of israel today as their air raid sirens continue, as the counteroffensive continues in gaza, carl. >> kelly, we appreciate it. wet expect to hear from the president this afternoon with some more remarks on the situation. kelly cobiella of nbc news. we'll take a quick break and take a look at the premarket. we should get to market activity as well. pepsi kicking off pre serngs season. futures still solid and "squawk on the street" comes back. is it possible? with comcast business... it is. is it possible to help keep our online platform safe from cyberthreats? absolutely. can we provide health care virtually anywhere? we can help with that. is it possible to use predictive monitoring to address operations issues? we can help with that, too. with the advanced connectivity and intelligence of global secure networking

from comcast business. it's not just possible. it's happening. with gold bond... you can age on your own terms. retinol overnight means... the smoothing benefits of retinol. are now for your whole body. plus, fast-working crepe corrector diminishes wrinkled skin in just two days. gold bond. champion your skin.

nice footwork. dimman, you're lucky,kin watching live sports never used to be this easy. now you can stream all your games like it's nothing. yes! [ cheers ] yeah! woho! running up and down that field looks tough. it's a pitch. get way more into what you're into when you stream on the xfinity 10g network.

let's get to pepsi this morning. a beat on third quarter earnings and revenue. the company raises the profit forecast, pretty decent organic. jim was interested in the comments about glp-1s. here is what hugh johnson said on stock. >> we're studying it closely, but we don't see it at all in our numbers right now i think to the degree this gets adopted, it will likely get adopted slowly over time. that will give us time to increase our portfolio. my expectation is just like we did with zero sugar, we'll be able to adapt to this as time goes on. >> satisfactory answer?

>> i thought so. the issue is when you speak to walmart, they were pretty definitive. when you push back and say, look, i really can't buy that, they keep coming at you. he has walmart numbers. they show no diminution. there was an outfit called accolade. they did a survey and say 43% of employers intend to offer coverage for glp-1s. now you're talking 15 million people if it's like that. that's a percentage that would hit walmart. i think, carl, there's also -- there is a private pay issue right now which is $1,000 a week for these drugs. the people who are doing that are obviously -- they want to get thinner and they might not have been eating this stuff to begin with. there's not this big overlap. i know hugh, he said 55 straight quarters and he's never missed. there's no reason for him to stick his neck out and give us a

2024 forecast because then he'd have to cut the darn forecast. the forecasts there are very serious. it's a rigorous place, pepsico. i'm going to side with him just because there seems to be no side. doritos, by the way, completely on track. potato chips, boom, exactly on track. celsius, they took a stake in celsius, $500 million. i think the only interest is how much is coffee being -- dropping because of celsius among younger people? >> frito lay north america up seven. we'll start slicing and dicing pepsi's data. that's for sure. >> we are. the walmart note was a serious note because the first time i saw it, i thought, i've got check this out. this is like, come on, these couldn't have played that much of a role. now we have to analyze again, well, if it's not pepsico, who is it? it's not like frito lay and

doritos yet are done in a low calloway. >> to the degree, it's rates, slowing consumer. >> right. now is the empire strikes back. rates are done. the numbers are really good, inflation is really good. >> johnston said gas prices haven't been an issue for them. >> i think this is a company incredibly well run. against that is do we just have one day respite on interest rates. summer will be hurting more than others. now i'd like to hear from costco. i'd like to hear from amazon web services because they have a lot of potato chips. but i would say that hugh was as definitive as i ever heard. i came out on him hard.

i said, hugh, come on. the accolade survey should be read, bank of america. >> good to hear from johnston, great granularity on the quarter. we'll get cramer's "mad dash." "squawk on the street" is back in just a moment. in the u.s. we see millions of cyber threats each year. that rate is increasing as more and more businesses move to the cloud. - so, the question is... - cyber attack! as cyber criminals expand their toolkit,

we must expand as well. we need to rethink... next level moments, need the next level network. [speaker continues in the background] the network with 24/7 built-in security. chip? at&t business.

there are some things that go better... together. burger and fries... soup and salad. like your workplace benefits and retirement savings. with voya, considering all your financial choices together can help you make smarter decisions. voya. well planned. well invested. well protected. let's get cramer's "mad dash." >> a meeting this morning for honeywell. really step one about what he intends to do. aerospace, industrial, building automation, energy sustainable solutions. a lot of people feel he's going to make a big move somewhere.

the most important thing i heard was they are going to be within or above expectations. it's a heavily shorted stock of late. people feel it's lost its way. i don't know why people feel that way. you've got a new ceo and he's going to take action. this is a big travel trust. i have voted ever since -- i think it's very important to recognize that this has a lot of what people want right now, whether it be defense, aerospace, climate change, very important. >> is aviation the crown jewel? >> absolutely. that's where they built up. that's where they spent the money. everything is tainted by how boeing is doing. boeing stock is really one of the worst stocks. >> the shame is real. >> boeing is mystifying to me because there are only two companies in that industry. it's hard. if there's only two companies, you kind of figure, well, you've got to do okay, but no.

>> if you're in climate control, wow. although, i've got to tell you -- because of the acquisition in europe. >> we had the downgrade last week. dave kit lynn has done a remarkable job. this acquisition i think makes a ton of sense. people want domestic. honeywell has the ability, if they wanted to, to get rid of sustainability solutions or industrial awed! . the new ceo likes to shuffle the deck. if they shuffle the deck, i think it's almost always viewed as positive. i don't know. this thing, you can't kill it. these guys came in and said bad acquisition, bad acquisition. kitlin is a winner. those who want to vote against

get lynn, you know where to find me. >> obviously honeywell will be a name to watch at the open. you can catch us any time anywhere, listen to and follow the "squawk on the street" opening bell podcast. we'll get the opening bell in about five minutes.

icy hot. ice works fast. ♪♪ heat makes it last. feel the power of contrast therapy. ♪♪ so you can rise from pain. icy hot.

you know when you have those moments? that time to reflect. to be like wow... what did i do to get here? (city ambient noise) right. work. you worked hard and it's time for a bank that'll work hard for you. everbank brings security and a guarantee. that you'll earn a yield in the top 5% of competitive accounts. going, got you where you want to be. we're the partners for your next move. everbank. advantage, you

the upward movement in real yields may reflect investors' assessment that the underlying momentum of the economy is stronger than previously recognized, and as a result a restrictive stance of monetary policy may be needed for longer than previously thought in order to return inflation to 2%. >> that's fed vice chair jefferson yesterday talking about longer term, higher for longer. actually sheila bair has an interesting essay saying you want a period where money costs

something. otherwise you end up with huge inefficiencies. >> oh, yeah, i also think we have an ftc that won't let companies combine. no company can fail. almost like too small to fail. i don't understand how we have an antitrust kind of way of doing things right now which would make it so that, if you're a large company, you want to buy a company that's failing, your lawyers are telling you don't bother, ftc will block it. what you have is this kind of -- the wlael is not swallowing the gup pi and the gup pi stays alive. i talk to a lot of people in that business, the legal business and they're all afraid of her, this lina kahn, because they don't know, even though they -- microsoft was able to buy activision blizzard, they're afraid to be able to make a deal without thinking, well, we're going to look like fuels. >> we're still getting m&a

announcements. >> i think people are feeling more emboldened after the amgen/horizon which is seen lina kahn said absolutely not, they're doing things defeatful, the ceo. [ bell ringing ]. >> we'll see if that marks a turn in the m&a landscape. let's get the opening bell at the cnbc realtime exchange. entertainment company falcon's beyond global celebrating its recent listing as we're trying to maybe target 4350, jim. >> pepsi is up so much that there's a belief there could be other pepsicos lurking. that's right. the group has been tarred and feathered as if the group is

going to fall off the cliff. why bother to give it if you're worried. >> are you bracing for delta, blackrock, jpm, wells? >> i'm eve doing a piece tonight about one of the reasons people don't like the number is because all you do is get number cuts for the banks. we're used to seeing blackrock and jpmorgan being leaders and they're just not. what i worry about is they keep setting the darn tone. they come first. they don't really give you anything that is positive and you end up thinking, okay, i guess it's not going to be a good earnings season. it happens friday. it's weird. it's kind of like a baseball game, a series. you go in. if you lose the first one, that's bad. it's a three-game series. now this is a five-game series. citi has been here for so long, your head is spinning. bank of america is so low. >> i was going to ask you about these reports yesterday, that

their treasury holdings are starting to cause finger-pointing within the bank, according to some reporting. >> look, i just know that -- i don't understand citi's tangible book value versus where it's selling. >> what's amazing is someone from the fed doesn't say, you know what, i want to look and see if this isn't cal fed glenn fed. those were savings and loans selling at book value. book is 50 and the stock is 30. citi is not going to have that happen, but there is a drep seep between the book value and the common stock that can't be reconciled from just looking at the financials. you do want to know why it's so different. >> truist is leading the s&p at this point. >> that's the one i'm going to talk about. someone called me last night on truist. i said i've been so depressed about truist because i think it's such a good bank. you know what?

let's see what happens. impressed by huntington bank. that's a good one. someone came up with a positive note on zions today. they have an envelope that says in the event of a nuclear war, open this. it says zions should be bought. u.s. bancorp is another one, a good bank. >> is this all from the fed speak? >> a lot of these have the so-called wrong bonds, but nobody is saying you have to redeem them, but it doesn't matter in the end. they -- what they have to talk about, credit issues, not making so much money on the interest margin, the whole dialogue is bad. enjoy it while it lasts. how about that? >> i know the ecb did put out a bulletin warning about cre risks again and this ongoing discussion about what breaks if

the rates stay high for how long. >> the risk is with the insurers. the banks lay out everything cre and you just don't have anything that says, wow, they really screwed up. the insurance companies do not lay everything out. that seems to be where a lot of the problems are. i think that i would avoid those stocks like the plague. i told people who call in that those are not to be trusted because we don't know what they owe. >> kind of the inverse of yesterday's action in that all sectors are green except pretty much for energy. do you believe -- do you believe energy is topped out here despite what we know is going on in the middle east? >> i'm waiting for pioneer. remember the "wall street journal" had a piece saying pioneer was going to get a bid. the journal continues to tell us they're going to sell. i find it's perilous for the journal to be this wrong twice. so i'm betting that once

something -- they should be a little more shy, but there are things happening in the war in israel that might be -- might derail things. >> so you've got energy lower, and then the requisite reaction is delta is higher, jim. the cruise lines are higher. >> initially travel takes a hit and then people come back and say, wait a second, we can still do things. i do think that the resupply of israel by our companies is bullish for a company that's been very, very hard to own which is raytheon technologies. >> you mentioned this yesterday. >> that seems to be trying to put in -- desperately trying to put in a bottom because of the engine problems that they have. i do think that l.a. checks is another one. they bought arrow jet. arrow jet is how you propel a missile. so waiting for oshkosh. nothing there. met with them last week. i do think if this is like

1973 -- israel is much less dire now. israel back then, nixon and kissinger got together and said, listen, 36-hour resupply of everything you need, saved them in the golan heights, saved them. that's not what's going to happen this time. >> kirby was saying the first trench of supplies from the u.s. is now en route. they're obviously going to be requesting more. we'll hear from the president this afternoon. >> iron dome apparently doesn't have enough missiles. that would be rts. >> among some of the laggard include corvo, skyworks hit with a downgrade. >> i think it's late in that game. they're setting on chinese. there's also a note about pcs by bern bernstein. pc market data. we passed the bottom but we ain't roaring back.

he finds the lead lining, the radioactive lining? >> juniper is in there as well. jpmorgan goes to neutral, 29. >> yeah, i know. time to buy service now. it's ridiculous they're down. they've got good ai products. what the heck is that. >> fairly constructive call on ea. bofa goes to buy 150. five-year trough evaluations. >> i thought that was a very interesting note. they've got some contracts that are up, and i know it looks like they're going to get them. i thought that was very positive. i also -- look, i think the gaming business is very, very good. it's taken a turn for the better. i like take 2 very much. now, the one that is really interesting is unity. here john rig tell low gone. stock is acting well.

is it acting well because he's gone? harsh judgment. the man who has come in as interim ceo is jim whitehurst. always a favorite of "mad money." they didn't even give you to spend time with family. the sec gives you that. if you're in trouble with the sec, they let you spend time with your family. why not? >> is this about some kind of controversial price hike? >> i don't know. i like rick tell low a lot. i think he's a great guy. you never know what these situations are. i'm not going to find out. i like the fact that whitehurst is in? whitehurst is going to do whatever is necessary. willing to sell vmware -- not vm wear. i'm sorry. selling red hat.

vmware is going to go to -- it's interesting to me. >> if we got vmware, microsoft activision, amgen, you'd be cleaning up a lot of clutter in the m&a space. >> yeah. i think the best one right now to look at is albertson's, kroger/albertson's. they are lined up people to buy the ones that are overlapped. but both justice and the ftc has said over and over again you can't cure overlap. that's because they're reacting to the botched safeway deal where safeway put some stores with an outfit called hagan and they were bankrupt within a few months. >> palantir, new army contract worth about $250 million. that's going to be the highest since august. >> i happen to like palantir very much.

i bumped into the cfo. he said, boy, you finally got on board. i said, look, the stock fell big. it's okay. your quarter was really remarkable. plus there was no cursing on the call. i thought that was an upgrade. they like to curse. i find -- i want a bleep call. it better be musk if you have a bleep call. he's allowed to do it. >> speaking of musk, jefferies today cuts tesla. they were at 265. they go to 250. they actually questioned whether or not their pricing advantage is after femoral or somehow longer lasting. >> why are they taking him on? i think he'll come up with -- he's a by any means necessary guy. i think betting against him and all these price cuts, he's a share taker. right now he has to wipe out ford and gm. it's existential with ford and gm.

he figures out the price and says, listen, i can take them down. he's a capitalist. i think he feels bad for ford and gm. >> i don't know if you read the morgan stanley jonas note about tesla and to what degree the phone and the car sort of combine. in other words, you take part of the car's operations with you at all times as tesla drivers now know. >> that's true. jonas is very thoughtful. i think that sounds good. by the way, honeywell is down which i think people expected more -- i think -- give me a break. blowing up the company on day one? carl, i revert to taking stocks with teams -- sandler. >> here we go. >> my colleague ben stoto. >> like christmas in october. >> it is.

tjx, they like the price because inflation is racing. vf corp very bad. i think what's most important -- let's cut to the chase. are people worried about graham? let's look at carbon footprint. do you pay attention to your carbon footprint? 16% say yes. 51% no. 33% what is a carbon footprint. >> there's a lot in there this year. i notice number one brand is nike again. number one restaurant brand chick-fil-a. number one cosmetic brand elf. number one e-commerce -- >> number one favorite celebrity

is not even in the game. hint, travis kelce. number two is a shocker, adam sandler. i've been hitting up a.s. all day. this is so much fun. i'm depressed that ryan reynolds is fourth since he's my fave. >> ever since he came in -- >> i'm just a lap dog. i'm a lap dog. i do think you should take notice at tjx, burlington and ross are incredibly strong and that off price does say something. this is a group that traditionally has not been all that sensitive to price. and there is just real fear of inflation because it bites people, bites people at the supermarket. honeywell is down $1.80 now. isn't that just horrible? i think when i look at dollar stores, i'm very suspect at dollar stores because the sizes aren't as good. people should join costco if they can afford costco.

the problem is costco is the bulk. if you have a very small apartment, costco is not that valuable. >> there's a ton of news, jim, in labor today. in australia chevron going to resume mediated tanks with their l andg unions. culinary workers are going to sfriek in vegas or picket at least. gm facing now some roadblocks in negotiations with the canadian labor union. we're watching uaw and the big three. >> look, all these are negative. when you have just outright labor strike that puts you in another era -- you don't want to go back to '73, '74. you don't want to go back to 1950 where the unions were really big. it almost seems like every area where there is a union is a problem. i'm waiting -- and i don't know anything about this and i have not checked. i'm waiting for the machinists to throw in a wrench right now.

they have not. i'm concerned about the supermarket people, that could be another one. anything that could be union. >> that's what the uaw says happened at mac. if the uaw expands, it goes to 545. that would be a 40-year high. >> when you speak to rodney mcmullin who runs kroger, look, we're going to be -- if you merge the two, albertson's, you'll have the best union shop. he's very, i would say, supportive of the union. jim farply was supportive of the union at ford. this has been one of those moments where a lot of people want to play catchup to the infl inflation. i don't blame any worker who is stuck with the same contract when inflation makes it so when you go to the supermarket, it's ridiculous. >> overall, casinos obviously

have the travel envelope wrapped around them, too. >> my travel trust owns wynn. i have to talk tomorrow. we do our club talk. wynn is a very cheap stock. we're waiting for the stimulus to hit china. they do a lot of stimulus over there. stimulants. let's thend them a pallet of celsius. there's stimulus. >> i'm glad you mentioned china. the wires have a piece about china considering sovereign debt sales to fund infrastructure stimulus, maybe an announcement as early as this week or this month. >> a huge seller of our debt. look, i think the people with china are pessimistic. i think you look at the growth rate they're pessimistic. when you look at the hope you don't see a lot of people. that's been a great gauge of family creation. look, president xi, we don't know what happened with schumer.

it just seems that this axis of evil is developing to quote ronald reagan. you have russia, iran, china. these are not allies. >> that was tudor jones' whole point. nuclear powers run by sociopaths. >> that was unbelievably good. i love him. i feel like you have to -- we have to search. now, you can say, listen, it doesn't matter, you can never find anything. i can find things on the tape at any given moment that seemed to be incorrect. i came out yesterday and said on one of the -- i do a home stretch and i do the morning meeting, that pepsi strikes back. that's what they're going to do. they're going to say there is no glp one. it's going to be a different quarter. i'm not a genius. that's pepsico, 55 straight quarters where they don't miss. our job is to be very granular, our job is not necessarily to

watch green bay/raiders. although they would have to pay me to watch that game and i'd do this for free. that's a painful game. >> i did watch. they were moving the ball. >> i was going up against jakobi meyers. i never lose to a law firm, ever. >> is it a surprise to you that coke is leading the dow in light of what pepsi said? >> no. i think it's really -- james quincey doesn't miss and the stock has a 3.4 yield. i do like pepsi more because i believe when i speak to hugh johnston, the cfo. pepsi the beverage is doing incredibly well. international is doing well. who is drinking soda water? the answer is lots of people. one of the things that hugh points out, we have buyers, people like our stock. when you speak to somebody about glp one. jim, people like potato chips. no, i've seen the data.

what data? 15 million people may or may not spend. people will spend $1,000 a week to not beat doritos. you can't eat 10,000. >> it seems like a story that's stretched. >> yes! i'm looking at tyson. if tyson were to run well which they clearly aren't, people need protein. >> mild gains up here 34. the vixx back below 18. a lot of fed speak today. we've got boss tin. we'll get waller, kashkari. ten-year topped out at 4.88 in the last two weeks. this morning back to 4.7. take a look at the bond curve in a bit. we're back in a moment.

a few moments ago, caroline ellison, former ceo of alameda research and former girlfriend of sam bankman-fried arriving in court. we expect to hear her testimony later on today. we'll get you up to speed on the recent developments in the case as soon as we can. in the meantime stocks opening with some modest gains. back to 4346 on the s&p. the dow up almost 50 points ahead of a very busy session as q3 eniarngs heat up an the fed speak continues. don't go away. is it possible? with comcast business... it is. is it possible to help keep our online platform safe from cyberthreats? absolutely. can we provide health care virtually anywhere? we can help with that. is it possible to use predictive monitoring to address operations issues? we can help with that, too. with the advanced connectivity and intelligence of global secure networking from comcast business. it's not just possible. it's happening. (all) ♪ toooo youuuuu! ♪

(sean) i wish for the amazing new iphone 15 pro! (jason) sean! do you mean this one - the one with titanium? (sean) no way i can trade this busted up thing for one. (jason) maybe stealing wishes from the birthday boy is not your best plan -- switch to verizon and trade in any iphone and get the new iphone 15 pro on them. (sean) what!? (jason) yup, and on an amazing network (sean) and i don't have to ruin anymore birthday parties! (jason) yeah, that ship has sailed... let's go get you the iphone. here we go, come on hon. (vo) it's your last chance to trade in any iphone for a new iphone 15 pro on us. only on verizon.

it's time for jim and stop trading. >> want to talk about disney for a second. nelson peltz bought 30 million shares. there's a little nonanimosity here. what i look at, this stock was at 200 in march of 2021 and it's now at 84 and i think that nelson peltz crafting notice that the stock is down huge and that that's probably not right. the idea that it might be iger, that it might be chapek, doesn't matter. the fact is the stock is down big. if we were in anything else say in sports, what have you done for me lately? absolutely nothing. i know that there's blowback when you say listen, the stock

is awful. but, you know, you are what your record says you are. >> well, at least we got a sag-amptp meeting and they'll meet again tomorrow. another joint statement. people take that constructively. >> yeah. i think that that -- i understand when you see a stock down that much you buy it. you want to know what's wrong. >> how about tonight? >> carmax. they rarely due tv. and then damond john from "shark tank" who invests in a lot of companies and have great vision at all times. kept me in apple when it was at 30. >> see you tonight. >> thank you. >> "mad money." 6:00 p.m. eastern time. an exclusive with the ceo of mgm, first on air interview since the company suffered the cyberattack last month. stay with us.

hey you, with the small business... ...whoa... you've got all kinds of bright ideas, that your customers need to know about.

constant contact makes it easy. with everything from managing your social posts, and events, to email and sms marketing. constant contact delivers all the tools you need to help your business grow. get started today at constantcontact.com constant contact. helping the small stand tall. here in hawaii there is always time. there's time to spend with family, time to enjoy with friends. there's always time to listen or lend a helping hand. here we have all the time in the world, but no time to waste.

good tuesday morning. welcome to another hour of "squawk on the street." i'm carl quintanilla with leslie picker, mike santoli at post nine. sara eisen is on assignment. david faber is off today. trying to sustain the bounce

from monday. early session highs above 4350 trying to balance the headlines from israel, along with some constructive fed speak talking about the impact of higher rates. >> so many cross currents on tuesday morning. here are three movers we're watching. pepsi on the move after raising its full-year outlook telling cnbc they haven't seen impact from weight loss drugs on sales at this time. shares up 1.1% right now. pal len ter getting a boost. the u.s. army singh a $250 million company with the company to test and develop ai and machine learning through 2026. we'll end on shares of honeywell announcing reorganization of its businesses adding it expects strong third quarter sales when it reports this month. those shares down about 0.3% right now. wholesale inventories out moments ago. rick santelli has the numbers. hi, rick. >> hi.

these are august finals, so minus 0.1% remains at minus 0.1%. do keep in mind every read this year, mike, has been negative except for february which was 0. no positive integers. go back to november of last year to find a positivep inti ger. if we look at trade sales up 1.8, multiples up 0.4 and in the right here view mirror 0.8 becomes 1.2. 1.8 equals june of '22 and you have to go to march of last year to find a higher number that was up 2.1%. so sales definitely zooming. we see interest rates are a bit lower after yesterday's closure at 4.98. we're down 10 basis points in 2s and at 4.68 we are down a dozen in 10s. the lowest intraday trade since the 2nd of october. carl back to you. >> thanks very much.

rick santelli. it's a volatile market for investors this week. this is paul tudor jones talking about it on "squawk box." >> really challenging time to want to be an equity investor and you have stocks that's really hard because again you've got the geopolitical uncertainty which i think we've come to live with to a certain extent, but all those have the ability to have a nonlinear outcome. >> earnings season kicks off as you know and our next guest says revisions suggests the profit outlook has stabilized and strategist david kostin with his target of 4500 here is at post nine. good to have you back. >> nice to see you. >> are you looking forward to earnings season? >> we saw pepsi this morning. >> we have expectations coming in for the quarter have been the best we've seen since the fourth

quarter of last year meaning as we're coming into the second quarter, we saw analysts cutting estimates pretty significantly as the quarter earnings season reporting dates began to creep up. earnings have been resilient. that's a positive development. number two, this is the first time we've seen expectations that are not near decline in earnings. so that's revisions as well as the year over year change. we're looking for rates around flat earnings for the year. year over year from the third quarter versus a year ago. margins declining. sales up 2%. margins down a little bit. you basically have no earnings growth. if we take out energy then you have earnings up in the low single digits. that's a positive story. the first time in a year we've seen positive epps growth. >> such concentration in the s&p 500 you note in your note that could pose a risk to the aggregate index because consensus has the seven largest

names contributing more to s&p earnings in 2025, even than they do today and it's a large proportion. what might it mean if there is a miss at one of the seven largest tech names for the overall sentiment and index? >> well, it's a big issue. we talked about this a while. which is basically 75% of the index is comprised of 493 stocks, the other is seven stocks or so. that bifurcation between the median company and overall index is pretty significant. i think you need to see that clearly this quarter. in aggregate no earnings growth but if it's a median stock up around 2%. the expectations for those largest companies are pretty optimistic as we -- kind of rolls out. you won't see them until the early couple days of november. this week it's all about the end of the week. the financial stocks reporting and the narrative and the thought process and our discussions with portfolio managers tends to be around higher for longer, which companies have strongest balance

sheets and more particularly less exposure to higher interest expense. that's an aspect of portfolio management that's really driving a lot of conversations right now. >> david, in terms of the rate impact, there's a lot of focus on margin influence there. if you're a net debtor and what interest costs will do, margins can't stay up here. that seems to be the gut reaction that people have. labor costs going up in some areas. you also have these huge growth stocks, massively profitable, that have a huge influence on the index. where is really the trend of margins going into next year? >> the margins at best are flat. >> okay. >> that's the best story. the best knick othing in our view, you have higher labor expense are going to be headwinds for a lot of companies. we're seeing that in the conversations we've had with some of the companies worrying about 2024 and we've recently

rolled out earnings estimates for 2025, taking out the next couple years. you're looking at this year around $224. we've been flat all year long at $224, estimates coming down, converging around the level. that's number one. 237, $237 for next year up around 5%, and 250 if you look into 225. that's the trajectory of how earnings are along that trajectory as well. rates are higher, more expensive, cash is attractive, all the money going into -- a lot of money going into money market mutual funds, for example. not seeing big net inflows into equities this year. >> then there is the geopolitical question, the latest on the conflict in israel this morning. raf sanchez with nbc news has been dealing with i think some air sirens most of the morning, he's been in front of the camera and away from it. we'll get to him when we can. you can't talk about geopolitics

specifically, but has the environment changed here for the duration or not? >> it's a tragedy from a human point of view, but the -- fundamentally we'll be getting earnings for the last three months, which is, obviously, backward looking and the prospects looking forward are issues pert meant to a lot of portfolio managers. higher oil prices are a concern, up a lot versus a year ago. less likely to have a big impact on a sustainable basis? >> what does that mean for the risk on sentiment for investors? you've got this and paul tudor jones was talking about the overall state of our fiscal house here in the u.s. and uncertainties as they pile together, does it start to have an impact on investor sentiment that could cause them to maybe ignore some of the fundamentals or at least involving consensus in earnings and things like that is this. >> -- >> i know paul well.

risk premium wise it looks like the market has been expensive. unlikely to get a p/e multiple expansion, so you're likely to get valuations around these levels which is why the fundamentals of what's driving the market is earnings. rates going to stay at these levels until the early part of next year which is an impediment to a higher p/e expansion, multiple expansion, going to come down to fundamentals, sales and margins and the economy. don't have a recession in the forecast. expectations are the economy continues to grow at a decelerating rate, inflation lower. positive developments, but cash is yielding 5% and that's pretty attractive in this environment. >> you are still year end target on the 10-year is 4.3. >> coming down to the end of the ye year. s&p 500, little bit upside, 4,700 middle of next year. the next nine months which is modest return, not great return,

not terrible return. trend like market. >> thanks. >> thank you. as we head to break here's our road map. birkenstock set to price shares in a few hours. what's at stake? >> the ceo of mgm resorts joins us. his outlook for the company for the cyberattack which cost around $100 million. >> smells like teen spirit. the latest pulse of gen-z consumers and where they're shopping and buying and some of their favorite brands. some of these relts ghsumit surprise you. when "squawk on the street" comes back.

nice footwork. man, you're lucky, watching live sports never used to be this easy. now you can stream all your games like it's nothing. yes! [ cheers ] yeah! woho! running up and down that field looks tough. it's a pitch. get way more into what you're into when you stream on the xfinity 10g network.

. oil prices in flux as israel and hamas conflict triggers supply concerns as wti crude comes off the best days since april. joining us is ed morris, citi research global commodity strategy head. good to have you here. yesterday we got that he reflex bid into crude oil up about 4%, only brought prices back to where they had been a week earlier. how does the supply-demand dynamic change if at all with what's going on in israel right now? >> so actually the price dynamic hasn't changed. there's all sorts of scenario possibilities of how it might change, but we haven't seen them unfolding and it's a function of how much this battle is going to be constrained geographically

and how much it might spread. there are a couple constraints on the horizon people think about. as we saw in the price action it wasn't embedded in any risk the market was looking at. one of them is the story of the "wall street journal" of a week ago that the saudis were prepared to lower the price if they get a combination of a deal with israel and a nuclear deal with the united states. it doesn't look like that's going to happen any time soon. that's something that, you know, might have happened by the end of the year and still might. might not. but it's not affecting prices today. the other is, you know, what is the response going to be to iran if the world decides iran was behind what hamas was doing. is the u.s. going to strengthen the sanctions and be a little bit more scrupulous about when to have a blind eye to where iran might be violating those u.s. sanctions. that's also up in the air.

it's a possibility for, you know, x months from now, but nothing at the moment is really changing the supply-demand balance for oil. >> if that's the case, let's say a week ago prior to these events what was your expectation for where prices should go from here? there was a pretty sharp pullback from the recent highs. we never got to 100 on crude. where does it leave us? >> it leaves us in part at the mercy of financial flows. flows were robust in getting us to the price of $97 brent. we had a fem nall increase in the length of managed money from the beginning of the third quarter where the ratio of longs to shorts was 2.6 to 1, very low level historically by the third week of september, that went up to 13.6 to 1, the highest level since before the russia-ukraine crisis broke out.

that was what was driving the upward movement of brent prices. it came off a lot before the hamas attacks, and it's still not growing. we're looking at a market which is seeing inventories beginning to turn around, beginning to grow, on a gross basis and we're moving into refinery turnaround season which would see crude oil inventories building, we're turning into a season with much lower than a demand than the summer. august is traditionally the peak demand month of the year, and it turns ot we didn't have much of a gasoline season anyway. we think that prices were already coming off faster than we expected them to. we're looking at prices now that we didn't expect to be here until the middle of november based on expected inventory builds. i would say we're more in a bearish camp had we not seen the pricehe decline.

>> given the probability you're considering and others are k are you still in the bearish camp given the overall supply and demand picture that you are seeing? are you in the bearish camp? >> we're in a bearish camp because you don't turn off supply coming into the market with just a small turn. we have a lot more supply than demand. our expectations a million and a half barrels a day, more supply-demand next year. nothing has changed our view. there's plenty of wiggle room between growth of supply of a million barrels a day less than expecting to see and that would still be a weaker market. so no, we vice phaven't changed mind on that. this is an unstable, volatile environment and there are plenty of things that could happen

domestically in a country like iran or iraq that could change our mind on supply developments. so far we think opec will struggle to keep prices at the level they want to keep it. >> market seeming to reflect some of that. thanks for the time. >> thanks for having me again. take care. coming up, birkenstock getting ready to sell stock in its ipo after the bell today and beginning to trade tomorrow. what investors need to know before jumping into that ipo. we're back in a moment. ♪ (upbeat music) ♪ ( ♪♪ ) with the push of a button, constant contact's ai tools help you know what to say, even when you don't. hi! constant contact. helping the small stand tall.

welcome back to "squawk on the street." birkenstock set to price its ipo after the bell tonight. reports have said the german shoe maker is eyeing pricing at the top of the range. i chatted with a few sources who said they were wavering on where the final price will be. those decisions ultimately expected after the bell today with the debut here on the nyse tomorrow. at the highend of the range birkenstock would be valued at $9.2 billion on a nondiluted basis. birkenstock selling shareholder intends to raise $1.3 billion.

interest in purchasing more than $600 million of that offering at the ipo price. this ipo process had hasn't been without its challenges. the road show was almost thwarted by a government shutdown and then, of course, the weekend attacks in israel add another layer of uncertainty into the market. birkenstock is forging had ahead here. the company traces its roots back 50 years. two years ago it was acquired by el caterton and the family office of bernard ar no, the founder of lvmh. quick ternaround for them but closely watched by private equity and portfolio companies as a barometer for the market appetite for sponsor backed deals. a huge pipeline for these ipos. it could usher in a lot of activity if it's indicative of, you know, overall sell side demand for these deals. >> yeah. every one of these deals so far

has been a unique either brand or franchise. >> yes. >> this little ipo thaw that we've had, and also with the motivated seller. every one of them it was they had to be soon or they hoped to be soon. this is, though, a unique brand and shoe companies have done very well. they kind of hit fashion window. a couple of its brands hitting and then on running. i know the piper jaffray survey was hot on crocs. birkenstock. i think they will be given more of a look for that reason. it's not like they're selling jeans. >> the boost from the "barbie" movie. especially when it comes to fashion ipos it has to be in style at that moment in time to hit on a certain hype cycle. you say okay, they've only held it privately two years but they're looking to reach a

certain window where birkenstocks are once again in fashion. i am told we should see a lot of birkenstocks on the nyse tomorrow. >> you mentioned the history of the brand going back centuries, but 20% revenue kegger suggests a reinvention. >> it sure does. profitability is narrowing over nine months of the year. 21% growth first nine months of the year on the top line. nothing to shy away from on brand longer than the united states has been around. they've seen their fair share of uncertainties and crises out there. i think they're ready to forge ahead here. >> there was geopolitics going on in the 1700s for sure. charl schwab's bond chief with more on why they see yields peaking and where you might find opportunities. the market reflecting that optimism today. dow up 160. 4362. talking about resistance as yields lower across the curve as well. don't go anywhere.

♪ unnecessary action hero! ♪ -missing punches? -unnecessary! -check reversals? -unnecessary! -time sheet corrections? -unnecessary! -unentered sick time? -unnecessary! -go! -unnecessary! -go! -unnecessary! -when you can take this phone, you'll be ready. -make the unnecessary, unnecessary. let your employees do their own payroll.

welcome back. i'm pippa stevens. a hamas imposed deadline for residents to leave the israel city ashkelon passed. the militant group promised attacks after 5:00 p.m. local time as its military said it regained control of the gaza border. the lethal conflict began saturday after hamas launched a surprise attack on southern israel. the violence has claimed more than 900 lives in israel and 700 in gaza. the first wave of u.s. assistance is on it ways to israel. according to national security council spokesman john kirby. kirby said the u.s. is focussing on making sure the country has munition, weapons and tools it needs to defend itself against hamas. an american journalist jailed in russia lost another appeal this morning to be leased after more than six months in custody. that means evan gershkovich will

have to remain in jail through november. russia accuses "the wall street journal" reporter of espionage. the u.s. government says he's been wrongfully detained. >> thank you. we are about an hour into the trading day. stocks are higher as treasury yields fall. bob pisani. s&p almost at a three-week high here. >> we're working off oversold conditions, up 3% since the close on thursday. the sector, this is the tilt towards the cyclical end of the market that we were talking about that was evident on friday here. banks up, material stocks up, retail up. the russell 2000 has been out performing the s&p 500 since the close on thursday. there's another very good sign. remember markets were very oversold, particularly small cap stocks and certain other sectors of the market like the cyclical group. it's nice to see the universe of consumer names doing a little bit better today. i think pepsi was a help. they were talking about weight loss drugs not having that much of an impact on their business.

that was a relief that got clobbered. coke, kimberly clark, to the upside. the s&p in the last three days, it's important to note friday what looked like headline bad news, market starts down, ends up on the perception, of course, that wage growth is moderating. monday market starts down on the perception of the israeli invasion of -- invasion of israel. market ends up on the upside. fed, maybe this is the time top stop, and starting down and ending on the upside. 3% move on the s&p 500 from 4230 to 4365. so what's been moving the market, of course, is the hope, the belief, that maybe interest rates are going to start moderating and moving to the downside. oil dropping and finally getting into the earnings season. we've been talking about this, mike and i have been talking about it. earnings expectations are stable to improving.

the trend in earnings not that matters, the trend, into the slightly up. that's always the most important thing for earnings overall here. just take a look here. this is one year since the low. we were talking about this earlier here. here's the numbers, this week the 12th of october, s&p 500 is up 22%. the equal weight s&p up only 10%. the lumpy uneven drfrgts returns and, of course, it's mostly big cap tech where the earnings expectations are higher. average equity etf, only up 11%. there are hundreds of equity etfs. more than the 11 sectors of the s&p. the uneven distribution of the returns. here's the one interesting thing that i find. you want to know where the money is going. this is the one year since the bottom. this is the flows. equity etfs $300 billion, fixed income $203 billion, almost all

is short-term money, one-year treasuries and things like that. look at the money market funds, $1.1 trillion. now that is eye popping. there's now $6 trillion in money market funds throughout. this is a 20% move. is that a little or a lot? it's the largest ever in history since tracking money market funds in terms of move. the question is there's sticky money and what's it going to get to get that sticky money out of there? the answer seems to be a drop in rates somehow to move that money. that's all money competing with the stock market right now. that's the most interesting thing i've seen. >> it's competing. on the other hand it really accelerated within you had the regional bank stress in the spring. the money market assets would be in bank deposits as opposed to every dollar earmarked to flow into stocks. >> my mother, who i made fun of relentlessly in march and april called me saying i'm pulling money out because i got 0.3% in

my bank account and now i got 4.5%. the bank teller friends she has, she was calling from the bank, robert, i'm pulling money. last week should i put more in. it's still -- the point is, it is a substantial competition for stocks. >> yes. >> there are many -- i got many e-mails and viewers stopping me saying, i'm very happy with my 5% here and 2% real return. that's not a bad -- the risk-reward ratio, equity risk premium is so low now that everybody seems to be saying why am i taking this risk right now? >> if you're comfortable with it f you can watch the market go up without you that's perfectly fine, right. as you said, we're up 3% four day up 10% over the year. if you're good with that sleep well. >> the biggest risk i see right now, it's going to be had hard to argue some big multiple expansion. encouraging earnings flat to moving up slightly in the third

and fourth quarter. ta we're going to have optimistic commentary to move the earnings up dramatically and if there's no expansion of the multiple, it's all on the earnings. that's a lot of weight on earnings expectations. >> bob, thank you. let's talk more about yields. the 2-year rebounding after reaching its lowest level since september 8th. the 2-year bond rebounding. 10-year hitting the lowest level since october nd. yields are near a peak for the cycle. let's bring in cathie jones. thank you for being here. peak for the cycle, how long is this cycle, and where do you see yields going from here? >> well, yeah, great question on the cycle because this has been a prolonged long cycle. i think we all were sort of expecting a wrap it and down and we've gotten the drawn out cycle because of the fed's higher for

longer. the cycle will extend into next year, but we think at some point, in second or third quarter of next year we'll see the fed pivot towards easing rates. as they've been talking about in the last day or so, looks like rates have gone high enough to slow the economy and bring inflation down. >> you've got dallas fed president lori logan saying yesterday a sharp rise in long-term rates in october. basically may mean there's less of a need to further hike from here. do you agree the market is adjust adjusting enough so the market doesn't have to? will do it enough that allows for the market to basically say, you know, mission accomplished on this hawkish posture? >> i think so. i think that's the calculation that dallas fed president logan is making. she's been one of the more hawkish members. her shift, even if it's a modest

shift, is significant. she's. referring to the term premium, risk premium in the market for the uncertainty of direction of rates and how that's gone up. when that goes up it does the fed's work for it. we have seen inflation is trending down. if you look at the core pce over three to four months it's already almost at the fed's 2% inflation target, 2.2 on a three-month annualized basis. tightening lending standards at the bank is affecting companies and individuals, financing costs for everything from cars to plant equipment, et cetera, starting to go up and that tightens up the amount of credit in the economy. all that should slow things down. it should result in inflation continuing to trend lower. it's going to be a bumpy ride, but i think the fed has done enough and remember they're

still doing qt in the background. because they stopped hiking rates doesn't mean that we won't see more tightening in the pipeline. that's going top happen through quantitative tightening and by keeping real rates high. >> cathie your mentioned the term premium discussion and it's part of what i call at this phase in the cycle about the abstractions or inferred statistical values or the neutral rate, potential gdp growth all these things you have to make assumptions about. when you bottom line it, what does it mean? is there value in parts of fixed income that there wasn't before, because you have a yield over and above the presumed inflation rates? >> that's exactly the point. couple thing for bond investors. you have real rates. when we look at the tips market and implied, you get 2 to 2.5%.

we haven't had that since pre-financial crisis days. you have cushion there if the outcome wasn't what was anticipated. you have coupon income and this is hugely important when a bond investor. coupon income is what you're investing in fixed income for, and that gives you a lot of cushion on the downside because, you know, your totally return is the income component plus or minus the price change and the price can go down if yields go back up. a lot of coupon income fwhilts. if you're an investor looking for income, you're not only getting it in nominal terms but real terms and should mean going forward the risk-reward is more attractive than it has been for several years. >> fascinating. thank you. >> thank you. meantime day tive of former crypto king sam bankman-fried's trial in new york city court. caroline ellison, bankman-fried's former

girlfriend and ceo of alameda research is due to take the stand today. kate rooney joins us with the latest. >> good morning. so caroline ellison was one of the highest ranking executive in sam bankman-fried's inner circle, at one point his girlfriend. she arrived through the side door of the courthouse about 9:45, hiding under a blue baseball cap. elson was the ceo of the hedge fund which sam bankman-fried owned 90% of and one of his roommates in the infamous bahamas penthouse. accused of using the hedge fund to siphon $8 billion in customer money from the crypto currency exchange. he has pleaded not guilty to seven counts. ellison has pleaded guilty and has not spoken publicly beyond her plea agreement when she admitted to misleading investors. leaked her diaries which resulted in her bail being revoked and put him in jail.

in opening statements the defense team tried to shift the blame to ellison saying sbf gave her sole responsibility of the fund and she didn't hedge appropriately. gary wong, co-founder of ftx pleaded guilty, on the stand, said sbf knew about customer money taken and spent illegally. back to you. >> we'll be in touch all day. kate rooney talking about the trial there. coming up after the break, gaming expo in vegas with the ceo of mgm international bill hornbuckle. a lot to talk about from the cyberattack to labor strike, as the-ekock is trying to bounce to a rewe high. stay with us.

kate rooney talking about the your record label is taking off. but so is your sound engineer. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire

this is spring semester at fairfield-suisun unified. they switched to google tools for education because there's never been a reported ransomware attack on a chromebook. now they're focused on learning knowing that their data is secure. ( ♪♪ ) thousands of workers in las vegas set to picket mgm resorts and ceasars entertainment for the first time in nearly two

decades as they consider a possible strike. this comes on the back of a recently cyberattack on the biggest names in vegas. mgm and caesars down double digit since the breach discovered. contessa brewer joins us at the global gaming pokes as it kicks off alongside mgm's ceo. >> and there's a lot of scrutiny here, carl, on cyber security and what it means for other gaming companies, other vendors and suppliers and who needs to ramp up their own security. bill hornbuckle joins me now the ceo of mgm resorts international. when talking about the hack, we've seen the ak and you said $100 million financial impact that's likely to be covered by insurance. how much of this is in your rearview and if it's not totally behind you, when will it be? >> it is totally behind us. i cannot see how resilient we are. i have to call out the employees, they've been nothing

but great through the entire process. this is behind us. hopefully a one-time incident, knock on something quickly, and we're all moving forward. it had a significant impact as you saw in september. there will be lingering impacts in the first part of october. the balance of the quarter through formula 1 into december is in great shape. we sold out over the weekend, mid-90% occupancy. >> you're left rebuilding. you have to make sure that way that these guys got in, which was a human error, human opening the door and letting them in, doesn't happen again. what has been the impact of the brand disruption? >> it's not ideal, obviously. but mgm, las vegas, our group has been nothing but resilient. all the things we've been through over the last four or five years, this is one more incident behind us. we're a looking forward. there is work to do in terms of restructuring and rebuilding. versus where we were and like to

get to. all that is in play. we feel safe and secure where we are today. looking forward to great quarter. >> the american gaming association is out with a report about the economic impact of gaming, really incredible, more than $300 billion annually of economic impact. in nevada, we're seeing a big influx of convention business. that's up more than 60% last month over last year. yes, business is booming here. you can tell it. but now you have this threatened strike with the culinary union. where do things stand and when does that get resolved? >> we're in dialog with them. i know the other ceos are engaged. we're at the highest level. we haven't had a citi-wide strike in 39 years. it's in everyone's best interest, employees, stakeholders and ourselves to go forward and discuss. we will get through this. it's a critical time. the next two or three weeks something of substance happens and we get through this.

look at resiliency, look at what our company went through. we're prepared to take anything this brings, but we will all prevail. i think ultimately common sense will prevail here. >> the interesting thing, among the demands that culinary union has, is the way rooms get cleaned. they're tackling part of a change of practice that happened in the pandemic that improves the bottom line, improves the margins for companies like yours. they don't clean the rooms every day anymore. is that something you think is negotiable when it has a clear impact on the profit margin? >> part has to be negotiable. the challenge, we understand this, it's all makeups. when people leave all checkouts are harder to do than during the course of the week. we're running with 15% less employees than we have historically. that's not going to change. whether we take a view on one less credit or not, what property level, whether luxury or legacy brands, we'll make that decision over the next couple weeks. obviously, it will have some

impact, but remember where we were versus where we are there's a subp stantive difference. >> when we're looking at the digital business for mgm, your partners within a european company in bet mgm, it's clear this is two companies, two different parents trying to raise the same baby, but maybe having a different approach. you're brick and mortar and entertainment and rewards points and they're very tech. how long can this last? omni channel works. how long can it last you operate separately? >> look, i think it's a great marriage. define what you just said. things we bring to the table versus the things that they bring to the table. they bring a tech stack, know how and knowledge. we bring the things that you mentioned. omnichannel does work, and we think about the future it will continue to work even more. we just got to single wallet which is a single account, single wallet, a big deal. we're about to get contained in

nevada where people can take money home to colorado or other states and enjoy activity from home and come back and enjoy what we offer. we like the marriage and think it works. >> great to see you this morning. we'll get on stage in a little bit along with the ceo of attain. it should be an interesting conversation before the global gaming expo. a lot of fun. >> great stuff. thank you so much for bringing that to us and have fun out there. still ahead, nike shares more than a quarter off their highs of the year, but could teens be the key to a turnaround. with comcast business... it is. is it possible to help keep our online platform safe from cyberthreats? absolutely. can we provide health care virtually anywhere? we can help with that. is it possible to use predictive monitoring to address operations issues? we can help with that, too. with the advanced connectivity and intelligence of global secure networking

from comcast business. it's not just possible. it's happening. ♪ upbeat music ♪ upbeat music

in a morning rally, the s&p 500 up two-thirds of 1%. it was up the same amount yesterday. friday also up. 3.5% off the lows from last week as treasury yields have come down. obviously, yesterday, the cash treasury market was closed for the holiday, but we did see basically the clues and how the etfs and futures traded. we are seeing a lot of relief on the yield side. of course, oil after just a one-day pop is also in retreat a little modestly and sort of at levels not that scary given

where we were too recently. seems as if the market is settling into the zone of effectively saying yeeltdields been the big challenge for weeks and weeks here. that's coming off the boil. at the same time, the seasonal and oversold effects are moving in the right direction. nike shares have been an underperformer this year. the brand remains strong as ever with teens. let's get to courtney reagan with more on that story. >> nike, the top brand for teens in both apparel and footwear for 12 years running, according to piper sandler's annual survey. converse hangs onto the second, adidas in third, and new balance in fourth surpassing vans. shien moved up to number four and swapped places with h&m. teens say they're spending 1% less than last year. 4% less on clothing and 3% less

on shoes. inflation was second and the economy was fifth. beauty spending up 23% led by a 33% increase in cosmetic spending. e.l.f. is top cosmetic, cerave for skin care and bath&body for fragrance. teens are shopping more at off-price retailers and online, less at specialty stores, discounters, outlets and second hand. amazon dominates with 59% share. shein comes up second with just 7% share. speaking of amazon, today is the beginning of its second prime day deal event this year. while still expected to be a large shopping event, data suggests shopper interest and engagement has waned over time for these prime events. a cnbc analysis of jungle scout pricing data on a basket of products sold by amazon directly

or the brands themselves on the platform found that the best price for electronics and toys is typically during amazon's summer prime sale. for health and beauty, you might want to wait and buy that during black friday. for home goods, this is the prime event that might be your best price. captify saying the top three items this morning are electronics, home and kitchen and toys and games. back over to you guys. >> i just wonder how sustainable that increase in beauty spending might look at this point. is this repeat a trend from prior years or kind of a big substitution effect of beauty products for things like clothes and shoes? >> that's a really good question. we are seeing the highest level in cosmetic spending since 2019. we've seen a higher level in the past, dropped off during the pandemic, maybe when we diplomat have the same places to go and jumped back up. it's hard to say how long this trend will last. when you look across the board in retail, whether it's a pure

play cosmetic sell like ulta or macy's, it's been consistently called out as a very strong category for a number of quarters now. i do find it interesting the e.l.f. was the number one brand. it's really gained a lot of traction. it's a company and its stock has performed fairly well and better price point which makes sense for a teen consumer. if you look at their preferences for handbags, they still like the finer things in life, if you will. not sure they can afford them, but gucci and lvs were way up there. >> it's interesting. we were talking earlier in the hour about the birkenstock ipo and brands that were popular 10, 20 years ago, in the '90s. are you seeing that also in the survey, brands that were popular maybe at the turn of the century that are suddenly having a new life these days? >> such a great question. we have seen a lot of '90s

trends pop back up in the teen survey and past surveys right now with the baggy pants are popular again, but birkenstocks did not make it into the top ten for hottest shoes, which i was fairly surprised about. this teen survey gets an early read on some of these things up. might remember several years ago the ll been l.l.bean boot popul. birkenstocks at least not for the teens in the fall. >> i can't keep up with it. skinny jeans, not skinny jeans. >> i look all out of sorts with my jeans, i'm sure i'm well behind. >> that's okay. love you anyway. thanks, court. one more thing before we go, this is wonderful news. a huge congratulations to our seema mody and her husband, jeffrey, on the birth of their daughter, shauna. she was born 7 pounds, 14

ounces. this is the dual meaning of rose in hindi and year in hebrew, which is a link between seema's origins and cortland, known as the city of roses, coinciding with the jewish holiday. congratulations to them and their beautiful daughter. >> our best to seema and her family. dow hanging onto gains, up 140. "squawk on the street" continues afr is teth. power e*trade's award-winning trading app makes trading easier. with its customizable options chain,

easy-to-use tools and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are. e*trade from morgan stanley. power e*trade's easy-to-use tools make complex trading less complicated. custom scans help you find new trading opportunities, while an earnings tool helps you plan your trades and stay on top of the market. e*trade from morgan stanley. i wouldn't have my business if it wasn't for my website. once i decided to go with godaddy,

the process was seamless. i was able to create my website on my own. to have it be exactly what i want it to be. be able to integrate my appointment app. godaddy was able to provide everything that i needed. the whole image of who i am and what empire is is presented through my godaddy website. ♪

good tuesday morning live at post 9 of the new york stock exchange. coming up, the latest on the conflict in middle east. council of foreign relations and brookings will both weigh in. raphael bostic making headlines. guggenheim on the ozempic phenomenon and future m&a in that sector. we bregin with breaking new out of the new york fed. for that we'll turn to steve liesman. >> new york fed releasing survey of household consumer expectations and sees the one-year expectations rising to the highest level since june. but not that high. the