good morning. welcome to "squawk box" right here on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with andrew ross sorkin. we are here today. joe is out for the next several days. we have been taking a look at what's been happening with equi. you're looking at green arrows once again this morning. dow futures are up by about 60 points. the nasdaq indicated up by about 51. then you've got treasury yields that i believe have been pulling back slightly if you want to take a look at some of this. yeah, the 10 year is actually now back to 4.56%. the 2-year is back to 5%, 4.96%.

a little of this is flight to safety. >> we're going to talk geopolitics. we're going to the white house. the white house announcing sweeping new rules on what is called a crackdown on junk fees including banking, travel, lease sure, and housing. they're looking to ban businesses from charging hidden fees. that would include resort fees, live event fees, car rentals and more. they would be required to show customers the full price up front. that i would be empowered to secure refunds if the mandate is violated. the white house also taking aim at banks. the consumer protection bureau will require large banks to stop charging fees for basic services like requesting your checking account bans or payoff balance.

it's more of a simple process. this is a big deal. you know what? for consumers, it's sort of hard to think how it's a good thing. i'm sure there are folks on the other side, business leaders, saying, oh, my goodness, this is a whole other level of complication and we don't want to do it or we think it's going to impact our margins. how often have you tried to take a trip, seen what you think is the airfare and realize that it's like, you know, double. >> right. >> cable bills. >> not finding out about these things, i remember reporting on the cable bills and phone bills about this more than 20 years ago when people were focusing on these things. the only thing i would say, this is a good thing. i don't think it's hard to argue against. the biggest thing, if they really wanted do this, do this when it comes to health care costs. if you want consumers to know what they're spending on, that would be it. >> amen. amen, amen, amen. we're in violent agreement.

we're in violent agreement. >> it would be nice if you could figure out how much you're going to pay for a scan or something el before you went in, if that was actually a competitive practice too. we've talked about this in the past. >> yes, it would. we'll see. i hope one day. one day. new overnight treasury secretary janet yellen speaking on the sidelines of the international monetary fund and world bank meetings in morocco. she said some countries are seeing a slow in growth, but treasury does not see any signs of broad spillovers destabilizing the broad economy. so she says her team is monitoring the downside risks of the crisis in israel. secretary yellen said she's watching for economic impacts but at this point she's not seeing the terrorist attacks as having a major impact on the economy. meanwhile the israel/hamas war entering its fifth day. president biden is urging

israel's prime minister to minimize casualties on the gaza strip as they continue their retaliation against hamas. that phone call came after president biden condemned the attacks on israel and vowed support for its middle east ally. we're going to talk to israel prime minister bharat. walgreens has picked a new replacement for ceo rozzer. wentworth will be the replacement. he lead the laencht pbm express grips which was acquired by cigna in 2018. he stayed on to launch cigna eat health circuit and retired in

2021. he told me he was happy to be retired but this was an opportunity he couldn't pass up, to lead an iconic brand like walgreens. he said it's a massive platform, he said. they touch 10 million people a day. they need someone to come in and take the great team that we have but get it focused on a strategy that investors understand, he told me. today's announcement comes five weeks after roz brewer stepped down as ceo. they also had the cfo step down prior to her. just two years on the job, she tried to pivot the drugstore chain toward a health services business model, big investment, primary care service and home service care. it was at a time when covid vaccine sales have lagged and we saw walgreens quarter earnings miss for the first time in three years. it's now seeing its nonunion

pharmacists walking off the job over staffing issues making big challenges for wentworth. he starting officially october 23rd. >> those issues, obviously a problem at walgreens, but not just at walgreens. it's been a huge issue for other pharmacies too. what's the solution? >> any of us have seen it now when you go in for your flu shot. i feel for the pharmacists because they have so much to do. we saw pharmacists at cvs walk off the job across kansas a couple of weeks before and reported will i that inspired the walgreens pharmacists to walk off the job. they're taking a big risk because they're not represented by unions, but they're in such high demand and they feel as though they really need to get more support and more staffing. these companies have tried to hire more. they've tried to pay more. but at the same time, they're facing, you know, pressure because we are seeing that covid

tailwind sort of die down. so they're trying to finding the right mix. with walgreens, they're hoping they can really ramp up automation of a lot of the general pill bottle filling with automation and get that before it gets to the pharmacy to give them more time. but they keep adding more services. they want these pharmacists to be really the front door of their health care services for folks. >> i mean it seems like it was a huge crunch during covid and then when people were going to get their covid vaccines, but this is about them all taking these plans to be just more and more and more and offer more services to consumers there? >> yeah. tim wentworth talked about that. they pivoted amazingly and very quickly to sort of providing all of these services during covid. they were the front line to get us those tests, those shots. now he says that needs to be

re-evaluated a bit and they need to be given more room and leeway to really practice at the top of their licenses. but, you know, this is something that all of the major chains have been grappling with, cvs as well as walgreens because they're such a big point of interest. certainly -- i don't know about you, becky, but every time oi go to the pharmacy, there's just such a long line, and i feel for these workers because they have a lot on their plates. >> yeah. they seem pretty busy every time i'm there too. thank you very much. meantime we're watching shares of novo nordisk after they said they will stop a trial study of ozempic nearly a year ahead of schedule because it was so successful. that was good news. they were testing whether ozempic could delay the risk of chronic kidney disease and diabetes. they recommended stopping the

trial early because of the positive results. they said it was clear from the analysis that the treatment would succeed. add this as another good sign for these drugs. >> miracle drugs? >> it is. that's what it increasingly seems like in so many ways, in so many ways. i know people have rightly skepticism, worries about all sorts of things, but they haven't shown up yet. >> anything that seems too good to be true always worries me, but you're right. the number of things that these drugs could be useful for, the number of things that it curbs. >> both of us, i think, are natural skeptics. we're always naturally worried about these things, but i did talk to a doctor about a week ago not about using these drugs, but he said, you know, andrew, this could be like antibiotics. when antibiotics first came out, they thought it was a miracle drug, but they were worried like maybe there's a along-term

effect. the truth is antibiotics have been one of the great blessings of our life. maybe this will be like that. >> look, there are long-term effects of antibiotics too. they have created these super bugs when antibiotics get abused and used too widely among livestock and everywhere. >> no question. >> if it's like antibiotics, fantastic. it's been a miracle we've been fortunate to have in our livens. l ing. let's hope is eat not like fen-phen. lvmh has been facing k demands. last month lvmh was unseat as europe's most valuable listed company by -- guess this -- ozempic maker novo nor disk, the

aforementioned company. >> there it is. let's bring you up to date on the trial of sam bankman-fried. yesterday we heard from carolyn ellison, his former girlfriend and the government's star witness against him. she testified that she and bankman-fried defrauded commerce. he directed us to take customer money to pay loans. it was an odd moment when she was asked by torn attorneys to identify the room. she looked a under the roar fm 30 seconds and scanned the courtroom multiple times before seeing him seated over there in a suit. fascinating to see all the different elements of what gary said in his testimony and now car caroline. we'll see if ultimately sam testifies or what the defense's

argument is going to be. we've been talking about it from the beginning. this has been a very hard case. >> she couldn't recognize him because, a, he's wearing a suit. >> different hair cut. >> different hair cut. and i think he's lost weight from the reports i've seen too. when we come back, we're going to get you ready for the busy day in the markets. we're going to get you the latest read on the prices and the latest fed meeting. we've got predictions. dow futures are s are up by. we'll also hear from robert kaplan. this is all coming up later right here on "squk x. awbo" >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com.

let newage products transform your garage into an area of your home you can be proud of. modular steel cabinets let you pick and choose the storage solutions

to keep your garage organized, with overhead racks and shelving, slat wall, workstations and flooring that let you create a showroom garage to call your own. designed for diy installation. all you need is one weekend to take your garage from unusable to unbelievable. visit us at newageproducts.com. this is spring semester at over 13,000 us school districts, which have become top targets for ransomware attacks. but there's never been a reported ransomware attack on a chromebook. which is why thousands of schools like the fairfield-suisun unified school district switched to google tools for education. so they can focus on teaching and 22,000 students can focus on learning, knowing that their data is secure. ( ♪♪ ) the power goes out and we still have wifi knowing that their data to do our homework. and that's a good thing?

great in my book! who are you? no power? no problem. introducing storm-ready wifi. now you can stay reliably connected through power outages with unlimited cellular data and up to 4 hours of battery back-up to keep you online. only from xfinity. home of the xfinity 10g network. 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.

all right. let's get to the markets this morning. as we mentioned the futures are higher in the premarket. joining us to talk about it all right now is sylvia jablonski. she's ceo. volatility is the word here, uncertainty, not knowing what's going on. we have seen markets higher for three sessions in a row despite all of the horrible geopolitical news we've seen and concerns about what's happening in washington. why do you think that is? >> good morning, becky, great to be here today. i think the markets are starting to rally for a couple of reasons. the catalyst for that was probably the fed sounding a little more dovish saying long-term yields are doing some of the work for them. it doesn't erase the whole thing and where rates will go for the rest of the year, but that's news the markets like to hear. if we take a step back in that case, we have a strong consumer

who has wages, who can spend. jobs are holding up. the economy is holding up. earnings season should be pretty good this year. i think we got to an all-time high on pessimism again, money pulled out of the markets. we saw it pull back 3%, 4% on major indices. you get fomo and that comes back into the market when things slow down. in terms of geopolitics, that's something that could add volatility into the markets in the future depending on which direction all of that goes obviously. it's a terrible tragedy there. >> so we have seen yields pull back as well. if higher yields are doing the fed job for them, are there points if yields come back down due to flight safety or fewer concerns about additional rate hike or rate hikes would undo that work that, okay, the feds have to be back on? i know the expectation is not

that the fed will do anything or won't raise rates come november. >> yeah. the expectation is that the fed won't do anything. typically markets have an inverse correlation to yields. i think if yields can continue to come down, the markets will go up, although, there will always kind of be that overhang of what if the fed changes their mind on this. the fed's been pretty clear in their messaging whether they're finished or going to hold hikes longer. we're still in the next 12 months expecting a cut in 2024. two cuts actually according to the dot plat. i think the market is sort of establishling adhering to what the fed chair will say. to your point, i do think other things can p ha. we have ppi and cpi and hotter reads than we expect going into the end of the year, i think all bets are off and you have to pull back. however, the way that it's looking, if earning season holds up, that fights inflation fares,

and if it stays steady, the fed will probably hold course. >> what do you think about higher oil prices as a concerning factor potentially for inflation data down the road? that's not going to show up in the core numbers that the fed looks at immediately. but if you're talking high oil prices because of what's happening in the middle east, you'd be seeing things that cause additional pressure, not to mention the labor strikes and the push for i much higher rais? >> all of that pushes the fed. i think in the short term we're going to see spikes in the oil prices because of geopolitical issues. we're already starting to see that play out. that's almost a conversation that will become interesting in terms of just geopolitics and what different countries around the world plan to do to handle the oil swachituation. if we don't see more oil coming

into the market to cater to this, that will be a number that impacts inflation. in that case we'd have to see others coming down. it's certainly a risk. >> sylvia, thank you. coming up, birkenstock is going to be making its public debut to the market later this morning. we're going to get you ready for the first trade. i should have worn some this morning maybe with my socks. later, adl jonathan greenblatt, speak out against hate and signing a workplace pledge against anti-semitism. more coming up right after this.

(woman) what would the ideal weight loss program look like? no hunger, no cravings, no isolation, more energy, lasting results, and easy. is that possible? it is with golo. these people changed their lives with golo without starvation dieting. whether you have 100 pounds to lose or want to shed those final 20, try golo for 60 days and never diet again.

(uplifting music) our future will demand more energy than ever. and with innovations in natural gas and oil, america can deliver. but washington keeps pushing extreme policies that limit america's energy. their plan? restrict oil and natural gas produced in america. government mandates for how we fuel our cars and cook our food. a future where energy could be less reliable and more expensive. tell washington - stop the extreme policies and let american energy deliver. welcome back to "squawk box." leslie picker joins us with more on birkenstock. are you going to show us what's on your feet first. >> i'm not going to show you that, andrew.

unfortunately today it is not birkenstocks. it's currently a pair of sneakers, but that's the secret of tv that we can do these days in the mornings. but for birkenstock, that $46 tag implies the $46 on an offering size of $1.5 billion. er they intend to buy more than 40% of the offering at the ipo price. the company is raising proceeds for about a third of the offering. that's to repay their debt. the remaining two-thirds is being sold by entities being sold by the consumer private equity firm. they took birkenstock four years ago. even at the mid point pricing of the range that offers a value price of 80% higher thereafter where al caterton took

birkenstock private. it's aiming to market at a time when birkenstocks are back in style. they're showing a top line growth for nine months this year after a cameo in the "barbie" movie. they've been weighing on the markets including a government shutdown. there was a war in israel that started over the weekend. but tomorrow's debut will mark a fresh test especially as so many private equity companies sit on the sidelines. they want to be ipo'ing guys. a lot will be watching this one closely. >> leslie, one of the critiques of this company and sort of comps that people sort of sometimes say, people that are worried about this, think about it as canada goose. i'm curious where you stand on this. i ask because canada goose came out of the gate at 40 bucks, up to 70 bucks.

it was the hottest, most fashionable thing around and for a period of time it really was. it was growing like crazy. then you have this situation similarly. there was a period birkenstock was fashionable, unfashionable, then fashionable again. how much does that play into the price right now? >> when you look at investing in these brands, on one hand you can say, look, this is a story brand that's been around for 250 years. talk about trying to be able to forecast cash flows, there are all sorts of noesen aspects directed to the consumer, for example. you have to make sure you're hitting the trends correctly. it's not just invefgt and looking at the fundamentals of the company, but will consumers want to be wearing these shoes in the future? i think that was part of the canada goose story as well. once you buy a canada goose,

you're not going to buy one next year. you have it for a very long time. birkenstock has a similar story. the price point is certainly lower, but trend following in the true fashion sense is critical when you look at investing in these brands as ipos. >> do you own a pair, leslie? >> i don't. i don't. i'm remaining unbiased. i did. i did like ten years ago. >> there are the ones with the fur in the bottom. then if you get the colored fur, your feet get colored? >> i believe there will be some birkenstocks on the floor of the nyse today. we'll see. we'll be there covering it. >> the ceo of birkenstock is going to be joining the gang on squaec on the street later this morning. coming up, the speaker race ter former house speaker kevin mccarthy told supporters last night not to nominate him. we've got the details next.

that first time you take a step back. i made that. with your very own online store. i sold that. and you can manage it all in one place. i built this. and it was easy, with a partner that puts you first. godaddy. (♪♪) business can happen virtually anywhere. (♪♪) but there's nothing like being there. at national, you can skip the counter...

and choose any car in the aisle... even manage your rental right from the app. so you can give some quality time to a quality cause. swing by to see one more customer... [audience cheering] and really get down to business. go national. go like a pro.

good morning and welcome back to "squawk box." take a look at the futures. we've got some green on the screen. dow up 66 points, the nasdaq up by 40 points, s&p 500 looking to open higher, 9.5 points higher, becky. there's breaking news. a deal has been speculated about for months. exxonmobil is buying pioneer

natural resources. this is going to be an all stock transaction. the offering price, this is a $59.5 billion deal, which would be the largest purchase for exxonmobil this century. it's the biggest purchase since the purchase of mobil back in 1998. it looks like this is a deal -- terms of the deal, pioneer will be receiving 2.32 shares of eck nom mobil for every share. they're valuing this based on the closing prices as of last week on thursday, the 6th of october. that's because while rumors for this deal have been going back six months, march or april, things picked back up on friday when there were reports this could be happening. at this time you saw stock pick up. taking a look right now at what they saw on this, they say they

think this deal will sharply help things, they think, from a u.s. energy security process. they're talking about exxon bringing their own technologies to bare on this with pioneer natural resources, which is by far the largest producer. together the two of them are going to be even larger. pioneer was already number one and exxonmobil was number five. this is a big catapult from exxon to boost their permion basin. part of the reason they want this is the land that the two of them own, very close to each other, i think it's contiguous, close to each other, which will mack it more efficient in terms of deploying somg of these things. the question of how big it is could bring regulatory oversight. it's clearly going to be the largest. exxon going out of its way in

this release this morning to say this is an opportunity for greater energy security by bringing technologies and financial capability to an important source of domestic supply. they do say that their technologies, they say, will be able to get more out of the ground by this. the companies will have a combined estimate 16d billion barrels of oil resource at the permion. at the close, exxonmobil would have its production volume double based on the 2023 volumes and they expect that to grow to about 2 million oil equivalent barrels per day by 2027. a lot of questions that will be asked about this, but this does look like on a big bet from exxonmobil, they don't think fossil fuels are going away any time soon if you wand to be tied. >> interesting to say they're accelerating their net zero in the permion, meaning how much is driven by -- i don't want to say the optics of that piece of it

the. >> it accelerated pioneer. >> it's more pioneer's than exxon, but we'll see. we're going to be joined by the ceo, exxon ceo darryn woods and pioneer ceo scott sheffield. they'll be joining us live coming up in the next hour. we'll be talking a lot more about all of these transactions, but it's a huge deal and one that very likely will kick off other companies scram pling to make sure they have permion bases as well. exxon shares down by 1.4%, pioneer natural, 2 pnlts 3%. again, the bidding price for this is $253 a share based on exxon's closing price back on october 6th. t ateer natural, $241.81. buth stock has been up since friday when rumors started circulating again. "squawk box" will be right back. e

also defends these services for everyone who lives here. ♪ ♪ (upbeat music) ♪ ( ♪♪ ) ( ♪♪ ) ( ♪♪ ) -awww. -awww. -awww. -nope. ( ♪♪ ) constant contact delivers the marketing tools your small business needs to keep up, excel, and grow. constant contact. helping the small stand tall.

time now for the executive edge. shares of samsung rose in south korea overnight, the company releasing guidance for a 78% year over year drop in operating profit for the most recent quarter. still that's more than triple the profit for the prior quarter and slightly higher than analysts had been looking for. revenue guidance came in slightly below expectations.

samsung releases its guidance a few weeks before the report is due at the end of the month. you can see shares are up by 2.7%. meantime house republicans readying a new vote for speaker. i want to bring in capitol hill reporter julia grace. good morning to you. i'm trying to understand what you think can happen today, this week, next week, or any week at this point. >> well, lawmakers are definitely bracing for a chaotic day today. republicans heard from both candidates jim jordan and steve scalise last night. they're going to have their votes this morning, but they're going in with no clear front-runner and a push for a rule change that would require 217 members for a candidate that ultimately prevails ahead of going to the floor.

>> who do you think is in the lead? >> they're voting at 10:00 a.m. i don't think there's a real clear front-runner. scalise is doing well and the support with jordan received from trump solidifieds conservative votes. >> how do you think this plays into the larger conversation we're all having about a potential government shutdown. i haven't been counting the days, but we're obviously going to get closer to that. and then you layer in what's happening in israel right now. >> absolutely. i've heard a lot of support, wanting to be able to pass an aid package if needed. they want to floor the gas on rallying behind someone, but you've got other members saying because of the circumstances

right now they need to take their time and get things right. there's definitely a divide over that. >> what about democrats? is there a democrat that's going to go along with any of these candidates? >> i talked to some republicans who had concerns about the 217 house change saying they don't want to handcuff to each other where they might need democrat support to where ultimately maybe another candidate prevailed with democratic support, but i know democrats are going to want something in exchange for that and what republicans might be willing to accept if it gets to that point kind of remains to be seen. >> there's no wild-card name out there that you think will emerge since it feels like the candidates -- candidates -- names on the table seems there's an enthusiasm gap around it? >> i've heard of other names being put out there. house rules chairman tom cole's

been another one. whether any of these guys want it is also up in the air. given the small majority and how things have panned out with the last couple of speakers, they have no interest in the roles. we'll see if the other two can't make it steps up there. yeah, it's going to be an interesting few days. we'll see. >> okay. final question. kevin mccarthy, any chance he returns to the seat? >> i don't see those eight that ousted him backing him. so unless he strikes a deal with democrats there, i feel like the probability of that's highly unlikely. that being said, i do think that he'll probably get some votes in conference. we've heard from a handful of members who said he's the only person they would vote for. we heard last night the push to not nominate him, but i think he'll state get some can support. >> juliegrace, thank you so much. appreciate it. >> thank you for having me.

when we come back, our big breaking story of the morning, exxonmobil is buying pioneer natural resources. exxonmobil shares down 1.7%. pioneer up a little higher, up about $2, a gain of 0.2%. the deal is $59.5 billion and it values pioneer shares at about $253 a share. it's an all-stock deal. that would be based on exxon's closing price back on september 25th of 2023. we have the companies' ceos joining us in the next half hour. "squawk box" will be right back. >> announcer: executive edge sponsored by at&t business. next level moments need the next level network. - 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.

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. we're here today to set the record straight about dupuytren's contracture. surgery is not your only treatment option. people may think their contracture has to be severe to be treated, but it doesn't. visit findahandspecialist.com today to get started.

the israel/hamas war. joining us with the latest is former u.s. assistant secretary of state mark kimmitt. mark, thanks very much for joining us, general kimmitt. overnight i think hezbollah has started attacking from the north, attacking an israeli post in the very northern part of the country. that raises the question about whether this will expand, whether this is more than a situation involving hamas and gaza and the west bank. what do you think? what's the latest that you take out of this? >> well, i think that was a clear message sent by president biden last night as well as the fact that we're putting an

aircraft carrier and other assets in the region. he said this was not to go against hamas but to send a clear message to other potential adversaries not to get involved in this. if we get involved in this, west bank militants pinch al qaeda inside, we're taking this conflict to a completely different level than it is right now. it will be very dangerous. >> but with hies hezbollah alre firing this strike into the north, is that surprising anyone? is it one thing or would it be different if they had ground troops that came in as well. >> well, my personal view is there are a limited number of rockets. hezbollah had to show its own members they were showing support. at this point, there hasn't been a serious ground incursion, no more than a few rockets.

israelis did go in and attack a couple of palestine jan/jihad/islamist units. rye now we're hoping it's a demonstration, not a sign of great military effort to come from them. we'll know in the days ahead. >> do the israelis see it the same way? from all reports it sounds like the israeli defense forces are incredibly angry, incredibly fired up, and ready to go. so will they sit back and say, okay, this is not a huge incursion, too, or will they see it a little differently? >> i think their major focus is on gaza. they would not want to get into a two-front war. gaza is in the south, hezbollah in the north. that would do nothing but draw more forces away from the fight with gaza. no, israel does not want to see it, and, candidly, neither does

the united states. i think all we can do is hope and cross our fingers that the northern front does not roll up. but right now the focus is on gaza. >> what can you tell us about that focus in gaza, where things stand? >> again, i think one of the problems as we continue to talk about potential ground invasion, a war, conventional operation in g gaza, i think we need to be looking at this more as a hostage rescue operation than a war. the israeli military units are sort of twitched in between. if they go in too hard, they risk the lives of the hostages, but if they go in too soft, failure of the mission. so this is a very, very complicated operation. hamas knows exactly what it's doing. they know the policy of the israelis toward hostages, and they really in many ways have the israeli military -- ground military forces in a conundrum.

>> we've heard about the situation with hostage takings. in the past israel has been very open to exchange hostages for prisoners. in one case, i think back in the not-too-distant past they gave more than 1,200 palestinian prisoners in exchange for one he policy just because of the idea that it motivates the idea of more hostage taking? >> yeah, that's a very good question. up to this point, of course, predominantly the hostage taking was of the military. and there the israelis always had to consider what they call the hannibal policy, which is what is more important, the mission or the lives of the hostages? that's a completely different issue here when you're talking about women, children, civilians. i don't think that israel is going to change their hostage policy in the near term because of the fact that the hostages are civilians. they may relook at it in the long run, but i think in the

near ternm, they're probably going to stick to their hostage policy, which is whatever it takes. >> general kimmitt, in terms of this spreading beyond, it is not just hezbollah people are watching. it is also iran and whether iran was behind this. "the wall street journal" reported earlier several days ago that iran did plan all of this, green lighted the operation, and helped them with their planning for the entire situation. that has not been something that the united states administration has said that it found evidence of. where does this stand and what will that process take place, because if you talk about really expanding things in the middle east, this would be it. >> well, reuters reported that as well. i think that the administration may be trying to be too clever with their words. they're saying they do not see any direct involvement of iran. they are interpreting that, i think, or trying to suggest that there were no iranian ground troops involved in this mission.

but, look, this was an incredibly sophisticated operation, something that before this time was seen to be well beyond the capacity of the planners inside of hamas. on the other hand, the iranian revolutionary guard score, who has been operated -- operating in the region for years, this is -- this is old hat to them. so to think that somehow the irgc of the iranians was not involved in this, this mission has their fingerprints all over this. >> general, one other question i had was just the idea of whether you think there could be a second or third or even fourth wave from the hamas side of all this. all this happened in one sort of big early wave and then you have seen israel retaliating. but what happens sort of on the other side afterwards, or have they used all of their ammunition and all of their people? >> well, they have not used all their ammunition or all their people because those are the ones that are waiting for -- to

come in. there is plenty of small arms ammunition that can be used in the streets of gaza. they have hundreds of thousands of willing civilians and hamas members that will fire at any israeli soldier that comes into gaza. it may not have as many rockets. there may be a second wave, they probably don't have the number of rockets they did in the beginning. they certainly have enough small arms to fight in the streets of gaza. >> to fight in the streets of gaza, but not necessarily to endeavor to make a second incursion into israel? >> yeah, you don't know if they have got the capacity to do that. i think now that everybody, as the military expression, everybody's guns are up inside of israel, the reserves are activated, there may be a couple of small attempts to get in, but nothing on the scale that we saw in first operation. >> when you start to think just about a timeline for how this hopefully could end, one way or

the other what does that look like to you? >> i think that's a political decision. the political decision in israel has got to be simply do we want to do as was said in the day after, which is throw hamas into the water, make sure they're never aligned as an organization again, that's a long war and bloody war. are they going to move to some sort of negotiations, we'll see. is the international community going to step in and try to mediate? we'll see. but if israel wants to stick to a military operation, to rid gaza of hamas, that's months, if not years. >> general kimmitt, your thoughts about what the united states is doing. obviously president biden came out very strongly in support of israel last night. will that be followed up with additional weapons and what has to happen first? is that a situation where you need a speaker of the house to be nominated and things to go

through congress? >> two things. first of all, there is the war reserves that are kept inside of israel. that's $1.8 billion. so i think that will tie the israelis over for the near term. but certainly as has been said, they need more air defense weapons and ammunition. air defense ammunition and straight ammunition. sadly i saw that secretary austin was at the contact group in ukraine this morning, gave a speech, and he said we're ready to support you with more air defense weapons and ammunition. the very logistical requirements that are needed for the israelis are also the same ones that are needed for the ukrainians. so we're in a bit of a logistical tie-up there. >> so we asked israel to release some of the stockpiles to ukraine in the past and they said no, for exactly this reason, i suppose. >> yeah, but they released some of the artillery ammunition, the dumb bombs, so to speak. they certainly, as i understand, did not release the precision weapons and those are the ones

i'm talking about, tiding them over until the u.s. can get some more over there. >> general kimmitt, thank you for your time this morning. >> thank you, becky. coming up, much more on israel's response to the hamas terror attacks. we're going to talk to former h israeli prime minister ehud barak. also the ceos of exxonmobil and pioneer national resources will join us in a first on cnbc interview after they just announced their merger, just happened literally moments ago this hour. "squawk" returns. two big hours ahead.

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.

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 morning. futures in the green right now. the markets waiting for the first of two big reports. we have got the producer price index coming up at 8:30 a.m. and a megadeal in the oil path. exxonmobil acquiring pioneer national resources in a deal valued at nearly $60 billion. we'll speak with the ceos of both companies. first right here on cnbc. and israeli forces continue with air strikes in the gaza and lebanon. the military also preparing for a larger ground campaign. we will have the latest as the second hour of "squawk box" begins right now.

good morning and welcome back to "squawk box" right here on cnbc live at the nasdaq market site in times square. i'm andrew ross sorkin with becky quick. joe is off today. look at u.s. equity futures, a lot of news going on. a big exxon deal we're going to tell you about again in a moment. and then the ceos behind that transaction. right now the dow up 82 points. the nasdaq up about 61 points. the s&p 500 up about 11 points. also want to show you treasuries, talking about the ten-year for a very long time now. that's been our indicator for everything. 4.58. this morning, the two-year at 4.959. and wti, 85.59. update on the israel hamas war, the conflict entering the fifth

day as israeli forces prepare for a larger military campaign, tanks and troops lining up along the gaza and lebanon borders. israel continues with its air strikes, hitting hundreds of targets in gaza. president biden condemning the attacks as pure unadult rated evil. white house officials telling nbc news that president biden in a private phone call yesterday urged israel's prime minister to minimalize -- minimize, i should say, civilian casualties in the gaza strip. we're going to talk to former israel prime minister ehud barak in a little bit about the entire strategy and everything else. a little bit more about that exxonmobil deal. exxon announcing it entered an agreement to acquire pioneer natural resources. this is the largest merger that exxonmobil has done this century. it is the biggest since the 1998 acquisition of mobil itself. an all stock transaction valued at $59.5 billion or $253 a

share, based on exxon's closing price back on october 6th of last week. exxon shares have been up since then. you are talking a deal that at this point would be over $60 billion. together those companies will have an estimated 16 billion barrels of oil equivalent resources in the permian basin, a huge play. pioneer is the largest producer in the permian basin. exxon has been number five to now, but this would make an even stronger number one position. i think the second position would be occidental, and it would be a very distant second, which is crazy to think, because it is a huge producer in the permian basin too. but together these two would make up about 15% of the production in the permian basin. occi makes up 8% of that. you're talking about half the production. exxon says it intends to leverage its permian greenhouse gas reduction plans to accelerate pioneer's net zero emissions plan by 15 years to 2035 from 2050. the deal is expected to close in

the first half of 2024 and if you look through, they think that they can do even more in terms of production because exxon does have technologies, they call them proprietary technologies, they think they can get more out of the ground. they point to the expertise that pioneer natural has in the permian basin because they have been the biggest and the earliest for a very long time. so they say between the two of them, they will be able to really get a lot more out of the ground, even on the wells that are there. it is a huge stake of land. the land tends to be pretty contiguous, close to each other between the two. they also say it will be easy for them to ramp up some of the efficiencies, with the work they would be doing on the two different parcels of things. exxon shares this morning down by 1.3%. pioneer natural shares up by about 2.3%. and we will have both exxonmobil ceo darren woods and pioneer's ceo scott sheffield joining us first on cnbc, right here in less than half an hour's time at 7:30 eastern. we want to get to dom chu with a

look at this morning's premarket movers. good morning. >> good morning, becky. good morning, andrew. walgreens shares in focus now on a c suite change. the chain is higher by maybe 1% or so, around 15,000 shares of volume. the dow component named tim wentworth as the new chief executive. he was formerly the ceo of express scripps, bought by cigna in 2018. but wentworth starts effective october 23rd. the walgreens shares off their premarket highs by a percent or so. sticking on the healthcare front, check out shares of novo nordisk. higher by about 3% so far on around 85,000 shares of volume. this is the drugmaker behind the big blockbuster diabetes and then weight loss drug ozempic. there was a study out that tied its use to kidney failure and it actually showed positive results and possibly reducing the chances of kidney failure.

novo nordisk shares getting a bid on that. check out the ripple effects here because kidney dialysis providers like davita, fresenius, baxter international are lower given the positive benefits of ozempic on that side of the kidney scene, so healthcare stocks in focus there. and a call on this year's hot stock, exchange operator cvoe holdings. analysts have downgraded the shares to a hold, given that recent run-up in the stock you can see here. up 29% year to date. they think the stock is reflecting growth prospects. they're still longer term positive on the fundamentals. shares sit just around record highs right now as investors have been looking towards more market volatility driving demand for things like options trading. so, you know, when it comes to, becky, andrew, cboe holdings, we can talk about the market reverberation, but the options trade has been a beneficiary. back over to you. >> volatility is the friend of

options trading. >> for sure. >> dom, thank you. consumer spending for the month of september remains robust despite concerns of consumers pulling back. that's according to bank of america's monthly consumer checkpoint report. credit and debit card spending rose .7% year over year. that was up from august. and while card spending increased, so did child care payments. up 32% from the averages back in 2019. obviously that poses a threat to female employment, which increased during the pandemic. joining us right now to break down the report is liz everett chrisburg, the head of bank of america institute. it is good to see you again. >> great to be here. >> a little surprising to see card spending actually up. is that -- how much of that is inflation, how much of that is consumers feeling pretty good and spending more money if they want to? >> i would big picture say that consumer spending is moderating, even though we saw the card spending go up last month. but to really understand what is going on with the consumer, i

think it is important to look at the labor market. the labor market is going to be key here. and jobs number on friday, unemployment rate, all the official data is definitely sending the signal. >> did that surprise you, the stronger than expected jobs number or were you seeing the same thing in all of the accounts you have? >> it did surprise me. in aggregate, the bank of america data is substantiating it is an aggregate labor market that is very strong. if we peel the onion back and look at the details, there are differences between groups. and in particular, what i would say is the hiring from the consumer, they're seeing the wage growth be significantly slower than lower income households. they were only up in september by .1%. where as lower income consumers were up 2.4%. there is differences. in aggregate, the number is strong. when we looked at the jobs number, where were we seeing the job growth? lower wage industries, restaurants, not necessarily in

finance and technology, which were only up 3,000. >> that makes sense. what does that mean in overall terms of what the consumer is spending? if your higher end jobs are not paying as much, does that mean those consumers are pulling back? and the consumers who are at the lower end of the spectrum, look, they need more money to be able to keep up with inflation on the things they have to spend every month. >> the data sort of aligns very nicely, more than i would expect. if we look at spending as we said, moderating overall, even though up on the card spending, in september, but when, again, we peel back the onion and look at who is spending where, the lower income consumer is actually driving, even when you look at it ex-gas. so one of the other things we noticed in our spending data this month is that you're seeing a convergence of goods and services. so goods were up half a percentage point. a lot of that driven by gas. services down, slightly by just a tenth. but you would have thought and what we originally thought was the lower income consumer is

going to be disproportionately impacted by the rising gas prices, right? in fact, when you look at spending, card spending, ex-gas, lower income consumer is higher than the higher end consumer and i think part of that goes back to how are consumers feeling, what are they seeing in their wage growth and the high end consumer is essentially flat, low income consumer still has a strong job market, still can continue. >> meaning people are going to be spending less on travel, spending less on entertainment than they have to this point? >> travel is doing okay. on the services side, what i thought was interesting when we looked at our data within restaurants, there was a dislocation between quick service restaurants, which saw an uptick, that's fast food. as opposed to casual dining where you're sitting down, that came down. that suggests to me you are seeing consumers making different choices, trading down, thinking about where they're spending their dollar. >> what is this piece about child care spending? that's a massive increase if you're looking at over four

years. >> the child care thing is something we have been paying attention to. i think one ofthe great stories of the past two years is the uptick in female labor force participation rate. and what really stuck out to us this month is there was really a sharp decline. the question is why is that? and when you looked at our data, what you saw was child care spending up 32% versus 2019. now, if you look at it in the c p.i. -- >> 2019 before the pandemic. >> before the pandemic. it is a long period of time. if you look at cpi, it is up 5%. you got to remember, not every household pays for child care, right? and two-thirds of the households that pay for child care are spending more than 20% of their income on child care. so, it is a big piece. and i think what is happening is if that continues to increase, you're going to see families starting to think about, okay, am i going spend more of my money on child care or take away from other discretionary -- >> what percentage of families

have that situation, do you think? >> that is a good question. let me come back to you on that one. i don't know. it is a relatively small group, right? because it is only those with young children. >> 10% of your customers, 20% of your customers, it is a meaningful problem if it is 50% of your customers. >> yeah. it is not -- it is not 50%. but who is it impacting? disproportionately it is going to impact women workers and disproportionately prime age workers. our families are going to decide they need to essentially either pull back on work or leave the workforce altogether. >> liz, thank you very much for coming in. >> great to be here. thank you. >> great to see you. thank you. coming up, we're talking about israel at war with hamas. former israeli prime minister ehud barak is going to be joining us as our special guest. he served as military intelligence chief and defense minister. he has insights on israel's strategy of what's going on inside the government and what

comes next. "squawk" returns with that in a moment.

you're probably not easily persuaded to switch mobile providers for your business. but what if we told you it's possible that comcast business mobile can save you up to 75% a year on your wireless bill versus the big three carriers? it's true. plus, when you buy your first line of mobile, you get a second line free. there are no term contracts or line activation fees. and you can bring your own device. oh, and all on the most reliable 5g mobile network nationwide. wireless that works for you. it's not just possible. it's happening. the power goes out and we still have wifi to do our homework. and that's a good thing? great in my book! who are you? no power? no problem. introducing storm-ready wifi. now you can stay reliably connected through power outages

with unlimited cellular data and up to 4 hours of battery back-up to keep you online. only from xfinity. home of the xfinity 10g network. meet gold bond daily healing. a powerhouse lotion that moisturizes, heals, and smooths dry skin. with 7 moisturizers & 3 vitamins. and... new gold bond healing sensitive. clinically shown to heal & moisturize dry, sensitive skin. gold bond. welcome back to "squawk

box." live shot of capitol there. joining us now is ehud barak, the former israeli prime minister, former israeli defense minister, former israeli military intelligence chief and we very much appreciate you being here this morning. i think we're all trying to make sense of what has been a senseless situation. but really trying to understand what you think actually comes next right now. >> we suffered a major blow, failure of our intelligence, of our operational steps. we recovered, we're defiant. we have a tendency to unite and we're operating quite intentionally, mainly air force,

and preparing our ground forces for any possible development. israel mobilized several hundred thousand reservists, forces. all the options are on the table. we are determined to paralyze hamas from its military capabilities and it could be done in more than one way, and the armed forces consider the wide combination of it. so that's the next step. >> so, given this hostage situation, though, i imagine there will have to be forces on the ground. what does that look like to you?

>> well, what will the ground force operation look like? it is a column of tanks and infantry, taken over most of the gaza strip, the city itself could be taken over in a few days. and the city itself, it is more complicated with ground forces because you have to go from building to building. it might take several weeks, but basically israel is capable to take over the gaza. they now hold some 150 probably hostages, about a quarter of them has not just israeli passport, but other type, few americans, i believe, and but most of them are israel, but many of them are civilians,

elderly people, babies and women and so on. so that's one constraint. and the other constraint, what do you do after, okay, we took it over, but we took over the whole gaza strip, now it was quite natural to give -- some force that will keep it until the palestinians take over. i'm not sure those powers that they mentioned are ready for this consideration. so that's another constraint to make clear what we are going to do with it. >> i was going to say, how satisfied are you with the support that you're getting from the u.s., from the administration, the president was quite outspoken in support of israel, but there was also a report on nbc news that he did have a phone call yesterday with netanyahu and talking about

minimizing civilian lives lost, obviously, everybody wants to minimize civilian lives lost, but how that plays out over time. >> you know, the speech of president biden was a great statement, very -- almost inspiring for israel, very moving. i happen to know president biden for more than 40 years. and it was the most kind of supportive kind of backing that israel can dream of. and even the sending of part of the aircraft carrier group to the eastern part of the mediterranean is very important in this part of the world.

people are seeing this as an effective backing, not just words, but in deeds. we already have a first plane landed in israel with munitions or other equipment that we need for a long time, especially needed for hezbollah in the north. and that's very encouraging. we cannot expect more from anyone and we are extremely thankful to the president. >> what is the risk -- >> the speech, the president mentioned that they expect israel to act upon the international law, the laws of war. and i believe we will do it because that is a difference between us and -- the group that

attacked was unheard of, kind of crimes against humanity. >> what is the risk that this spreads, that this war spreads into something larger? that iranmeaningfully gets involved and i'm curious about your role of iran in all of this and how this -- saudi and just the entire middle east complex? >> i think that the saudi, american, israeli deal is delayed for the future. i cannot predict for how long. it is not on the table anymore. and i think that on the other side, i believe that hamas can get -- a week ago, two weeks

ago, to get from the iranian from -- i don't believe it is true. iranians are involved with back them with some equipment, with some operational idea, some equipment, but i don't believe that they ask for any approval of the iranians. they don't need it. they act upon their own. but it is true that iran thinking for long time how to encircle israel with hamas, with hezbollah, equipped with iran on the other side, some iranian presence, some militia in the golan heights on the syrian side. and then some deployment in syria and along the iraqi civilian border. they dreamed about attacking israel from all directions. we are not, you know, israel is not under -- the whole city will

act together with american backing, even on its own, israel is strong enough to send these challenges and we need supply with munitions, some other kind of -- and diplomatic support is important,but we can fight it and we will, however long and painful it will be. there is quite significant probability it will develop into a clash with hezbollah as well. i would not comment to hezbollah, to lebanon as well. because they will have to pay a very high price for participating. but you asked of the objective situation, it can end up having hezbollah as well.

probably even somalia might raise their head, but as i said earlier, we can deal with it and we will win. there is a need for certain kind of deep understanding of how war is won, but i think that with proper modification in the cabinet we can do it. >> mr. former prime minister bar barak, thank you for joining us this morning. we look forward to talking to you again soon. next half hour, we're t talking about fighting anti-semitism in the workplace. jonathan greenblatt will tell us about a new campaign he's working on to get corporate america to stand up to hate. coming up, a megadeal in the oil cache just announced this morning. exxonmobil is going to be acquiring pioneer natural resources in a deal that is valued at nearly $60 billion. this is the biggest acquisition

for exxonmobil since the acquisition of mobil in 1998. the ceos of those companies darren woods and scott sheffield will joining uass 7:30 a.m. eastern time. don't go away. "squawk box" will be right back. . good hands! hospital bill for prime?! gaaaaap! did you just say gap?! he's talking about expenses health insurance doesn't cover. good thing coach prime knows about...say it one time! aflac! because aflac gets you money to help close that gap! now how do we get this goat outta here? (whistles) aflac! meet one of my new homies! gaaaaap! get help with expenses health insurance doesn't cover at aflac.com. elephant would've been scarier.

up next, exxonmobil striking a deal with pioneer natural resources. we have the ceos, exxon ceo darren woods and pioneer's scott sheffield. they're going to tell us all about this deal. it has been out there for months. speculation about it. we'll find out what actually brought it and made it happen and we'll talk about where they see things down the road. they'll tell us alabt l outhe deal, first on cnbc, right after this break. 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.

let newage products transform your garage into an area of your home you can be proud of. modular steel cabinets let you pick and choose the storage solutions to keep your garage organized, with overhead racks and shelving, slat wall, workstations and flooring that let you create a showroom garage to call your own. designed for diy installation. all you need is one weekend to take your garage from unusable to unbelievable. visit us at newageproducts.com.

welcome back, everybody. exxonmobil announcing that it has entered a definitive agreement to acquire pioneer natural resources. the merger is an all staff transaction valued at $59.5 billion or $253 a share, based on exxon's closing price last friday. joining us right now to break it all down in a first on cnbc interview is pioneer natural resources ceo scott sheffield. and exxon's ceo darren woods. gentlemen, welcome. thank you for joining us this morning. >> thank you, becky. good to see you. >> thank you, becky. with jim, brian and david, first time on your show. >> we welcome you to the program. we appreciate it. gentlemen, this is a deal that has been out there in the ether

for a while, a lot of speculation about this, reports that this had been happening. in fact, darren, we asked you about some of the reports back in april and at the time you said, you know, you wouldn't believe too much of the rumor mill out there, you had a lot of cash on hand, but it wasn't burning a hole in your pocket. i think your point was you could do something, but it would have to be at the right price. what happened between then and now? how did this deal come together? >> well, i think what -- when talking about a deal, we talked about we have to find an opportunity where the combined entity offers more than any entity separately could do. one plus one has to equal three equation. so, the challenge that we have been focused on and looking at opportunities is where can we bring the unique skills and capabilities that exxonmobil has to bear with another company that has skills that complement that. and then together create industry leading value and i think with this deal, we have been working hard in our own business to drive technology, to drive our approaches in improvements and finding opportunity to partner with

scott's organization, their capabilities, bringing that in, their tier one acreage, our technology approach brings higher recovery at lower cost, and the opportunity to reduce emissions. i think that that kind of came around, just roughly the last few weeks as we were talking about the opportunity set. >> scott, you are not just the ceo of pioneer. you're also the founder. you came back to rrun the compa again and people speculated it may be you putting together a deal, capping off a great run with this company and what you've done. why exxonmobil? >> yeah, obviously over last -- i've been here 45 years, becky. i had two offers for the company. first offer in 1985 when the company sold for about four years and then darren approached me with an offer a couple of weeks ago. and this is the best company to

take 100% stock in the world in my opinion. what darren has done with this company over the last few years, in turning it around, they outperformed all the majors across all indexes. they have great potential with the permian now becoming the largest permian producer with gu guyana, with papua new guinea, it is the best stock to over over the next several years. >> as a founder, you have a lot of stake in the company, stock in the company too. are you going to keep the exxonmobil shares? or will you sell? >> no, definitely. i'm going to keep it. they have a great dividend, one of the highest dividends in the s&p 500. so, i'm very excited about that. >> darren, is this a bet that fossil fuels are here for the foreseeable future, that despite all this talk of people trying to transition completely off, this is a pretty major bet, the biggest deal that exxon has done since it acquired mobil in the last century.

what does this is a about your future and the future for fossil fuels? >> i think as i said many times before in the past on your show, becky, i think fossil fuels as the world looks to transition and find lower sources of affordable energy with lower emissions, fossil fuels, oil and gas will continue to play a role over time. that may be managed with time. the rate of that is not very clear at this stage. but it will be around for a long time. this is really around -- this is betting on the capabilities, the people of our two organizations, the technologies we developed to basically more efficiently recover resources at a lower cost, and a better environmental footprint so that we are actually advancing the ambitions of the lower emissions future, by driving down, using our combined capabilities to drive down emissions, produce lower carbon intensity oil and gas,

and basically push -- continue to be the most responsible operator for providing oil and gas for as long as the world needs that. it is more of a bet on our people and our capability and our technologies than it is about the future of oil and gas. >> and, darren, hoping you can address the issue of regulators in all of this. and how you think the biden administration is going to react to this transaction. we have seen a number of big headline grabbing transactions, of course, catch the ire of this administration and the department of justice. have you had conversations at all with this administration? >> i think, andrew, you know, the context to look at this deal is the size of the oil and gas industry. and so while we talk about this being a large merger, a large transaction, you look at it in the context of the overall oil markets and gas markets, even if you look at it in the context of the permian production, together while scott and i will have a

large business together, it will still be less than 15% of production coming out of permian from a scale standpoint, we're still a small player in what is a very large market. we don't anticipate any regulatory issues here. >> gentlemen, let's talk about what your production capabilities would be when you put this together. you mentioned 15%, darren. but i think you also think that with your technologies you're going to be able to get more out of these wells than otherwise. is that the case? >> so the work we have been doing and i talked about quite a bit in the past is challenging our technology organization to double the recovery rate. today, if you look at unconventional resources, recovery rates are fairly low within the industry given the challenges associated with fracking, extracting that resource out of the rock. we made a lot of progress in that space and we got a lot more progress to come, there are a number of emerging technologies that we're trialing in the field that we think will continue to

improve the recovery rate. we got a lot of work we have been doing to reduce the cost of that recovery and so we have a double benefit here as lower cost to drill and to complete the wells and hire recovery. with the acreage, the best that midland has to offer in scott's port portfolio, we can more effectively recover resources, recover more resources, do it cheaper. as i said, with the additional technology we brought to bear around monitoring methane emissions and the technologywe' scale and to moderate essentially across all operations to make sure we're focusing on the areas of emissions and reducing those brings that lower emissions footprint. there is a lot of benefits to this and a lot of it is based on the technology that we have been working on developing. today we have separately as two companies very similar plans in

terms of growing our production. this will potentially add to that. we'll certainly lower the cost of it. >> scott, are you going to be sticking around to help with the transition at all? >> i am still retiring at the end of this year. i will be a director of pioneer and then exxon as part of the deal will be adding two directors and i'll be one of those directors. >> okay. >> i'm excited about that. i'm joining the exxon organization. >> darren, part of what you all have said in this release is that you expect that you have a cost of supply of less than $35 a barrel from the permian. is that -- if the deal were to go through today or does that include all of these technologies and other things you talked about? because that is a pretty decent return on profit, when you look at oil where it has been recently. >> that's where we're at today. if you look at the portfolio we developed, our cost of supply is less than $35 a barrel and scott's got, again, an effective organization, they have driven their cost of supply down. you put those two together, that

is below $35 a barrel. it is a very competitive source of supply, which is good news frankly for the economy. because as you know, it is a commodity market, supply and demand and marginal cost production sets this market price as producers reduce their costs, and then more and more producers reduce their costs, that translates directly into lower cost for consumers. >> gentlemen, let me ask you both, we were looking at some pretty wild swings in wti prices, in oil prices, in the days leading up to this transaction. we looked at oil prices down $10 and about ten days, that was concerns there wouldn't be as much demand going around. now we see picking up because of things in the middle east and the concern that supply will be constrained with what is happening in the war there. what would either -- both of you say in terms of your expectation for oil prices, what the

israel-hamas war means for things and what you're seeing globally in terms of demand. darren, you first. >> i would say we know prices are going to move around. we have been seeing that. i think it is a tough game to predict for prices and things are going to go. i said since the pandemic frankly that the industry has been leading into the pandemic was under investing, the pandemic drove that investment even further. and we still have it as an industry as a whole completely recovered. i think from a supply standpoint things remain fairly tight and so as you see these disruptions on the margin, you're going to see the prices swing around because there is not a lot of excess capacity in the marketplace. but i would say more broadly stepping back from that, the real challenge we have i think as a company and industry is to make sure that we're developing these resources in a very low cost to supply. irrespective of what happens in the marketplace and the turbulence and volatility and the pricing that we have a competitive business and the business that generates returns

even in the low part of the cycle. and we built that business today. scott built that business with pioneer and the combination of the two of us having a stronger business with lower cost of supply. so we're basically indifferent to where the prices go, making sure we can supply cost effectively whatever the market conditions are. >> scott, how about you? >> yes, becky. the last earnings call i stated i thought brent is going to trade 80 to $100 range. saudi reduced production a couple million barrels a day. they focused of keeping that in that range. the effect of the war, interesting point i was raised in tehran, so i've been following iranian politics for a long time. the big question is whether or not iran is behind this and whether or not iran enters the war. if iran enters the war, we're going to see much higher oil prices obviously. >> what do you think the odds are that iran enters the war? it is a tough question to figure out at this point.

>> it is going to be up to netanyahu, i believe. depends how much evidence he has that they're behind it. and whether or not he decides to do anything about it. >> scott sheffield, darren woods, gentlemen, thank you very much for joining us this morning and congratulations on this deal. >> thank you, becky. >> thank you, becky. >> okay, a lot more coming up on "squawk box" in a moment. a big news morning so far and a lot more to come including an inflation report that could set the tone for the rest of the trading day. we'll bring you that. that's at 308: eastern time. we're coming right back after this.

when we come back, the antidefamation league wants corporate america to stand up to anti-semitism in the workplace. we're going to talk about it. adl ceo jonathan greenblatt will tell us about that new effort, following this surprise hamas attack on israel. nvsaonn ing to have that coerti ijust a moment when "squawk box" rolls on. gobble gobble. i've seen bigger legs on a turkey! rude. who are you? i'm an investor in a fund that helps advance innovative sports tech like this smart fitness mirror. i'm also mr. leg day...1989! anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. i go through a lot of pants. before investing carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com.

welcome back to "squawk box." in washington, president biden, second gentlemen will be meeting with jewish community leaders at the white house focusing on support for israel. national security adviser jake sullivan will be attending that meeting and we want to dive in more to this topic because the rise in anti-semitism this week following the surprise attack on israel by hamas says the anti-defamation league now calling on leaders of fortune 500 companies and other corporations to sign a new workplace pledge and speak out against anti-semitism. corporations that signed the pledge include adidas, american eagle and many others. joining us now is jonathan gree greenblatt, the ceo and national director of the anti-defamation league. good morning. we have seen you, i don't want to say too many times in the past couple daveof days and a s of where we are unfortunately. but tell us about where you are

on this. >> well, look, i think one thing i would say i think for me and i think for not just jewish people, i think all people of good conscience, i don't think the world will ever be quite the same. i think much like 9/11 i think all of us are just coping with the humanitarian crisis, you know, the loss of life is just horrible. i would also say that what's interesting for me is like seeing the president speak yesterday so convincingly and so clearly about the evil of hamas, about the total unspeakable horror that happened, what's interesting is to see his clarity and then the lack of

moral clarity in so many other spheres is hard to cope with. >> you are now asking corporations to sign this pledge, this document. >> we are. >> tell me what's happening behind the scenes as it relates to this. as a bit of context, there was a period of time in america i would argue after the business roundtable signed their pledge that business was more than just about profits, you saw lots of difference pledges, statements, comments that corporations made. >> yeah. >> and in the last year you've seen a lot of walking back, a lot of silence on a lot of different topics. i'm so curious sort of where things -- how this is playing out for you. >> well, it's interesting. like if we think about the importance of leaders leading and the role that ceos and other public figures play sort of in the popular culture, i'll tell you as i think about corporations, first i'll just mention universities, because i think we saw at harvard the total utter failure of

leadership for days after the massacre and the students who came out with this bizarre, bewildering piece, yale university, the secretary and dean of academic life put out a piece on the 9th which is truly ghastly in the passive voice, we deplore the loss of life on all sides. like this was a massacre of civilians and if yale university, like harvard, like so many others can't speak clearly when they have in the past about -- inappropriately, by the way, about black lives matter and stopping asian hate and climate and so many issues and then we come to corporations, right? >> what does the pledge say? >> it says a few simple things. more than anything it's we stand with our jewish employees at a time when anti-semitism has reached epic levels. in the days after this massacre the report from the interior

minister in france says there was a thousands anti-semitic incidents in the two days after the attack. in england a 300% increase in the attack. the pledge says, number one, stand with your jewish employees. be willing to do that publicly. so few have been willing to do that. and jamie dimon. >> and the ceo of this company. >> brian did, too, for his employees. and tony nary did something from h.p. and ed bastian from delta. >> otherwise lots of silence. >> lots of silence. we're asking number one speak out publicly and say in the face of evil it's wrong and i stand with my employees and in your training, make sure anti-semitism is addressed. that's it. i know that most of these dei programs, they don't include anti-jewish hate.

and if you have an employee resource group, employee fi infinity group, make sure there's one for your jewish employees that that's all. i got to tell you, the bar is so low. it should be easy for ceos to get -- >> are people telling you no? >> we're just rolling it out today. we've just been making quiet calls. i wouldn't say anyone is, quote unquote, saying no but let's see how many say yes. as i look into the camera and say ceos, if you are asking yourself, what should i do, should i speak up? and by the way, the u.s. chamber of commerce, the business roundtable, big umbrella groups have spoken out but if you're a ceo with jewish investors and shareholders, with jewish employees, with jewish friends and family, this is as easy as it gets. just stand with them. >> i've been a little shocked that there hasn't been more outspokenness on some of these

issues because when you look at the images that are coming out of women being raped, of children being murdered, of the fires, i will tell you even in my own small world with this, a mother's club list i'm on, there's only a few hundred moms, there's been a raging back and forth, one woman said let's raise some money, let's do something and not everybody agreed with that and that is a very small group. if you're gotetting resistance, nobody everybody is going to -- >> you're right, becky. dei has become sort of an evil in many places, the world economic forum. i've had executive after executive saying we don't use that word anymore. >> d.i., g.e., most of it. and most companies now would

much prefer to make a statement through a broad coalition like the business roundtable or the council or the this or that because they don't want to stand up and be out there on their own. so the question is does that suffice? is that -- does that mean that these companies have no courage? should you be calling them out? should you not be calling them out? >> these things are always tricky and i'd much rather work behind the scenes quietly than call people out publicly, but i will say -- and i also should say i get why ceo s want to talk about cps, not -- but there are some issues that are political and some that are just moral. this is not even right or wrong. this is good versus evil. so to the mother's group, to the

unfor university students, you just need to say look at what happened. this doesn't require to you a take a position on middle east politics. saying that it's wrong to brutalize the elderly, to rape women, to murder parents in front of their children and then seize those kids as hostages? come on. there is no world in which that's right. and i'll say something else about these students. like, if you think it is decolonization to gun down teen-agers as they're at a peace concert? >> what do you say to black lives matter? >> it's interesting, the black lives matter chapter in chicago -- >> and l.a. >> they put out these graphics that say we're stand with palestine. it is hard to think of anything more sick and twisted. >> one of these -- they're going to kill me because we got to go. one of the issues is after george floyd was murder and a lot of corporations came out and

supported black lives matter and then today they look at that and they disagree with that. they disagree with what black lives matter is saying today and they're questioning whether they should have supported it in the first place because they think that things went too far. the conversation i'm hearing behind the scenes is if i come out and publicly say this is, you know, what i believe and i support this, if then that becomes something else later, i'm not defending -- you know i'm with you. >> i know you are. i know you are, becky, and this network and brian and this network, they are, too. black lives matter is not a political movement. it was 9/11 that was a clarion call for moral leadership. when the ceo says how do i put this into context? this is not black lives matter,

this is 9/11. if the country says after 9/11 we stand against al qaeda, we stand with america, you need to stand with your jewish employees right now because hamas is not only al qaeda, it is not only isis, it is a terror organization which threatens all of us. this is the kind of moral question we rarely face in life and they happen at these points in history. to the ceos, to these university presidents whose equivocation is mind boggling, this is germany, this is america in the 1930s and this is like what was happening in nazi germany. ask yourself ceo or university president, should you have stayed silent in the 30s? i don't know. i think it's pretty easy. >> i know you're asking corporate ceos to sign on to this. university presidents as well? >> every university if you have a dei program and it doesn't include anti-semitism based on what we call the ira definition,

you're doing it wrong. if you're not standing with your jewish standards, you're doing wrong. go to adl.org, they can e-mail us as workplace @adl.org, and there is no excuse to be silent in the face of evil. last point, remember what dr. king said. in the end we will remember not the words of our enemies but the silence of our friends. >> that's a very important message. we blew through a commercial because it was that important. we have the commercial guys over there watching us. thank you very much. >> it is 8:00 on the east coast. we are live from the nasdaq market site in times square. i'm becky quick along with andrew ross sorkin. joe is off today. we've been watching the u.s. equity fultz and after three days in a row of gains we are looking at green arrows once again this morning, the dow up

almost triple digits, s&p up by 12, nasdaq by 67. treasury yields have been coming back down. part of this may be a flight to safety. the other part is the federal reserve saying a lot of work has been done to the market to this point. the 10-year yielding 4.7% and the 2-year is at 2.96. energy prices have been up in recent days. this morning wti is off by about 65 cents, $85 a barrel. >> let's bring in mike santoli d down at the new york stock exchange. what are you following this morning? >> as becky just laid out, you had the pressure come off as oil prices come down, bond yields come in hard and also the u.s. dollar easing back all of those

things, sources of pressure on stocks throughout september. here the s&p 500 did get this relief rally going right at the so-called correct spot, 4200, everybody was watching this level, would it hold? and so you see a nice recovery up about 3, 3.5% from the lows of last week. the question is can we carry higher to actually break out and become more than a bounce? we'll have to answer that in coming days. take a look at the volatility index. this goes back a year and a half. we peaked around 20. this is basically the third time in the past five months that 20 served as a near term peak in the volatility index, which meant a near-term low. you can extend it back into last market's bear market trend where 20 was the floor. 20 was the time to start getting worried about pullbacks in the market and taking some risks

off. it's the difference in today's environment. that was the silicon valley bank panic in the spring. so clearly there's vulnerability there but not being felt at least at this point. take a look at the leverage corporate loan etfs. these are floating rates corporate notes, somewhat risky and you've seen you've got these important lows in the latter part of last year and recall this year and pretty good little up trend, in order,ther words, e willing to step in. so far it's holding in there okay, andrew. >> meantime, mike, wanted to understand what you think the setup is right now into earnings. i know we've been talking about a lot of geo political issues right now but to bring us back to sort of just the numbers themselves and the companies that we're focused on. >> it seems as if the setup is relatively undemanding in terms of what stocks have done in general on the way into the

reporting season. so you've had the bar lowered to some degree based on what the market is done, basically looking for flattish, maybe a little bit up on the consensus. it going to be concentrated in tech. outside energy looks better. presumably this is going to be proof we have a recovery in earnings. pepsico was relatively encouraging, up almost 2%, even so this wasn't a great quarter, they were able to reaffirm guidance. >> mike, thank you. >> let's take a look right now at some key technical levels in the markets. we want to bring in katie stockton for that and a cnbc contributor. katie, all of a sudden there are a lot of different moves. we've got to switch direction in different markets. we've seen three days in a row of gains for the s&p, the dow, the nasdaq and even the

industrials, too. if you're watching some of thievesthese things, has this been enough of a shift? >> it certainly has. we saw a short-term momentum shift to that side in the past few days. our short-term indicators now do point higher and that's across the board for the major indices, even for the small cap benchmarks, which have really been struggling, as you know. with the bounce we have not only improved short-term momentum but also breadth or participation. as a percentage of that, the percentage above 50-day moving averages went from 9% to now about 26%. to the extent that kind of breadth expansion can continue, i think that should add to the longevity of the relief rally. the s&p 500 faces initial resistance and secondary more

important resistance around the 4600 level. that is the real proof for the market, that 4600. if we can see the s&p surmount that, that would be a really big deal. it would be a resumption of the secular uptrend. >> 4200, is that still the case or has it moved up, too? >> it's a very widely followed level, around 4180 up to the two-day moving average. it does encompass three technical factors adding to its importance. we would use that as a bit of a stock loss. we have been recommending over the past couple of days to add exposure. with a time horizon of about six to eight weeks, that's pretty well aligned with the positive seasonal influences we tend to have in october and november and

remaining noncommittal as long as that overhang of resistance was there. if we were to see the s&p take out that support down below 4180 and spending a couple of weeks down there at least just to confirm that. [ down and then we're going to well, perhaps that's all we're going to get. the cyclical is closer to 3920 and that's why we really need to manage risk because of the distance of that next support level. >> when you're looking at other markets, you think oil is a more interesting case study at the moment or the yields for treasuries? >> in our morning note we mentioned crude oil but we also mentioned natural gas which has quietly broken out. so that's of interest to us. we've seen natural gas futures clear $3 and that was a big breakout. for crude oil, wti, we had a gap

up in response to the conflict and it does come within the context of an intermediate term uptrend. so we're looking for crude to retest resistance, which was roughly $94 per barrel. a breakout is likely based on indicators and would target $101 a barrel. and with that we are currently overweight energy in our recommendations but we think we may not be there for very long just given the resistance overhead. >> katie, thanks a lot. >> of course. >> we'll talk soon. >> when we come back, though, the first of two big inflation reports about to be released. we've got the producer price index coming our way. and exxon mobil strikes a mega deal witpieeh onr natural resources. we'll have that and much more when "squawk box" comes right back.

the big corporate news of the morning, exxon mobil is buying pioneer natural resources in an all-stock deal worth $5 9.5 billion. this is exxoni's biggest deal since it bought mobile. its production would double to 1.3 million barrels a day.

>> with this deal we've been working hard in our own business to drive technology and drive our approaches and improvements and finding an opportunity to partner with scott's organization, they bring in our technology and development approach. >> this is the best company top take 100% stock in the world in my opinion. what darren has done with this company over the last few years, in turning it around they've outperformed all the majors across all indexes. >> scott sheffield is not only the ceo at pioneer natural resources, he's the founder of the company and has a big stake and he says he's holding on to the exxon shares once it closes and he'll be retiring but he'll be taking a saeat on exxon's board. but there's questions about

size, whether regulators will get involved, potentially the department of justice and exxon and pioneer saying they think this is good news because they'll be doing things to make sure they're getting the most out of the drilling they have there, it adds to u.s. security. the companies say they believe the deal with close in the first half of next year. >> meantime disney raising ticket prices at disneyland califo california. the lowest priced ticket at 2019 prices, $104. the genie access ticket rising by $5 and the cost of parking going up. disney is not raising daily ticket prices in florida where attendance slumped last quarter with the most expensive passes topping $1,400. changes are effective

immediately. when we come back, breaking producer price inflation but next shelley moore capito will join us to talk funding in the war in ukraine. stay tuned. you're watching "squawk box" on cnbc. ♪ is it possible to fall in love with your home... ...before you even step inside? ♪ discover the magnolia home james hardie collection. available now in siding colors, styles and textures. curated by joanna gaines.

welcome back to "squawk box" the israeli death toll now at

least 1,200 and in gaza more than a thousand killed and the war expected to escalate with a hundred thousand troops amassing. joining us is the senator shelley moore capito. senator schumer and mcconnell were very strong in what we think was almost unanimous, not quite unanimous support of israel. i think we would immediately address what their needs would be and also certainly looking at the americans that are still there to make sure that we're doing all that we can do and be

supportive of that. i would expect once we get back that we will have a broader discussion with israel and ukraine and the border being a sort of three-prong supplemental. but at that point that's just now formulating. >> we still have to figure out who's going to run the house. >> i know. >> that's going to be a big issue. and the other question is how you think the dynamic has changed or not as it relates to funding of ukraine for example. that was such a sticking point in what was taking place in the house and in the very idea of a shut down. >> i was in the house for 14 years. i'm glad i'm not there now. but they're behind closed doors today to try to reach a consensus. there there's nothing more emblematic, you throw something out at your speaker. i was a big kevin mccarthy.

you don't have a plan and then something happened and they're leaderless. that sos you you just can't move in a direction where eight people want to go without any way to find a new leader. so they're going to struggle i think. it appears that's what they're doing. and some of the early positions of those that are running for leader was no support for ukraine. that seems to have tamped down a bit. i'm not in the room so i don't know what they're actually saying but i think the realization that we need to look more globally here at what's going on -- >> because of the events this week? >> because of the events this week. i don't see how they cannot be tied together. >> but i mean, this is a larger leadership question about the role of the united states in the world. >> right. >> and we have seen over the last five and six years, if not more, a retreat from that position. do you think that that changes -- that the political dynamic in this country changes as it relates to that?

>> i do think that there will be a change when we get back. >> you think the public has a different view of that because of in? it was very clear that the public seemed to support this kind of retrenchment in some way. >> i think it was quit spending so much money everywhere else and spend it at home. i'm from a small state that's very connected to israel. even though we don't have a large unusual pop laulation, we have a lot of christians that are very much involved and have traveled to israel many, many times so much i think that brings us on to a larger stage. we have to explain it. you just can't assume that people are going to realize that

we need to be super power that we are and with that comes obligations. i think it's incumbent on us to brung that voice and that's why i hope that leadership race wraps up so we can be that strong voice. >> it comes at a time when our national debt and deficit has grown substantially. as part of your explanation of what we give on, what do you say? we have to support this, it means we raise taxes, it means we do what? >> well, i'm on the appropriations committee. and the deal that was struck immediately, pull back on spending, not hugely understandably but at least a step in the right direction. and i think it's about a matter of setting priorities and so i think that as we look at our own homeland security, our security at the border, it's all tied in together. and so i think we have to maybe

relook at our priorities in terms of cutting is always hard but i think that's what we're going to have to do in order to get ahold of the deficit and that was the direction that we were going on until the house sort of blew up on us. >> how do you handle another government shut down at this point and does what happened in israel change that dynamic to you? do you actually see both sides coming together to actually reach a budget deal? >> i'll answer the last question first. i do think the situation in israel will have a marked effect on whether we march to another government shutdown. what if the government was shut down right now? think about the ramifications of that with our dod, our intelligence, our state department, all of these ramifications of a shutdown government would really be felt so huge here this week. you know, we may have to go to

another continuing resolution, which is just as frustrating, but we are set in the senate to go up with what's called a mini bus, which is three different bills. hopefully we'll do that next week. we've got great leadership with senator collins and and senator murray on appropriations. senator schumer says we need to put it up and we'll replace. and to get to your question, becky, how do we set the priorities. >> thanks for coming in this morning. >> when we return, we've got new producer price inflation data, an instant market reaction to that. and we'll ask robert kaplan what central bankers are watching closely. stay tuned. "squawk box" will be right back.

since my citi custom cash® card automatically adjusts to earn me more cash back in my top eligible category... suddenly life's feeling a little more automatic. like doors opening wherever i go...

[sound of airplane overhead] even the ground is moving for me! y'all seeing this? wild! and i don't even have to activate anything. oooooohhh... automatic sashimi! earn cash back that automatically adjusts to how you spend with the citi custom cash® card. [mind blown explosion noise] the first time you made a sale online with godaddy was also the first time you heard of a town named dinosaur, colorado. we just got an order from dinosaur, colorado. start an easy to build, powerful website for free with a partner that always puts you first. start for free at godaddy.com coming up, breaking economic

data next when "squawk box" returns. what do you get from the morgan stanley client experience? listening more than talking, and a personalized plan ♪ to guide you through a changing world. ♪ 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.

welcome back to "squawk box" right here on cnbc. we are just a few seconds away from the september producer price data. this is pretty important. we are trying to watch every single read on inflation, trying to figure out if inflation is actually coming under control and what the federal reserve will or won't do next. we've been watching the futures and dow futures are indicated up about 90 points, s&p up by 11, nasdaq up by 65. this comes after several days in a rove gains. i think it's now been three sessions in a row of gain not just for the s&p, not just for the dow or the nasdaq, also the dow industrials. keeping track of all of this this morning they've been higher because of the treasury market. the 10-year note has come down considerably. you're now talking about the 10-year at 4.589%. the 30 year is back at 4.75, the

2-year has just picked up a little bit. this is after being above 5% recently. again, across the board we've seen treasury yields come down as there has been more of a bid for people going into that market. part of that might be a security bid, trying to get to a safe haven when you look at what's happened geo politically but also the federal reserve and several officials have acknowledged the market's been doing its work by planning ahead. rick santelli is at the cme in chicago. take it away. >> our september read in the form of the producer price index. september read on headline month over month expected up 0.3% is up a half of 1%. that follows a yet unrevised up.07 going all the way back to june of 22. strip out the all important food

and energy components, up 0.3 versus last month up 0.2. strip out food, trade and energy, as expected following up. now the year-over-year numbers on final demand, which is basically the headline up 2.2%. last look was up 1.6 is what we expected fwen. up 2.2, the highest since april when we were up 3.2%. in june of this year, eerp only up 0.1, the lowest year over year since august of 2020. so we've definitely ak certainly rated a little bit. that's also the hottest since may when up 2.8. finally subtract food, energy and trade, up 2.8%.

it's the only one cooler than its last look 8%. boy, you have to go way back in the way back machine to february of 2021. you could see interest rates have picked up and that makes sense to me. this notion that, you know, fed is slaying inflation. i understand that there is a lot of truth to to that. but or if they are, they're awfully sticky in the process. the pre-opening equity have drpd off a bit. flight to safety in my day in the pits was relegated mostly to facilitated. the trend on friday is mieb us 28. the long-end -- having said

that, short military has been roughly and becky, back to you. >> rick, i've been thinking about that, trying to figure out all of this job owning about how the the market doing the fed's work for it, that we've been hearing from fed officials. we've seen yields coming back down. at what point do we go uh-oh, they're. it doing the work of the u.s. government and all the relags in both houses. it certainly seems to me what's that we can't seem to get our spending, our budget deficits under control. i think this notion that mr. bullar was talking about the other day has really been dispensed that much of the

increase prior to this flieft to safety was about the economy overperforming. i'm not sure that many buy that argument. >> you think it's about demand and how much the people industry. but having said all that, i'm actually have and it's going to be a real wake-up call when we see less geo political issues. >> i want to bring in the smbc's chief u.s. economist and steve liesman. steve, are there things you want to pull out from the data we just got? >> yeah, i guess i'll disagree with rick. if you look at how the market has surprised an upside.

it moved pretty sharply through the months of july and august but also the government was surprising the market with issuing debts. i in the discussion, stronger economic grote and as well as more talkish fed talk. when i look at this number today, becky, i seeing about i'm going to get too excited o up side or the and when i look at how the fed funds market has reacted, which is almost not at all, and higher yield, what we've seen is there in not a higher inflation component to it as every speaker and almost every wall street analyst has

noted, these are rise. >> all right, joe. you get to decide who's right. >> no, i'm going to have to go with steve. i would asked one of the factors that have pushed this mild is the aushia relieve. which means if the b.o.j. comes up and they come off that could be beneficial for treasury as it stabilizes the dollar and its selling. but it's really been about real yields. that will hurt the economy. we'll get mortgage threads, more rarts are as i've said many times, the fed's overdone it.

the question is when does the economy roll over? >> and what do you think the answer is to that? >> if you look at the yield curve, it looks like we could -- it would have happened back in the spring but the fed added 400 million in liquidity. but the economy, i would argue again the underlying structure, the foundation of the economy is soft. even if 10--year-old are at 4.50 is city. your equity risk previous has not made a new high in sometime. >> you've got inflation because consumers continue to pend. we had bank of america saying how they saw spending up 0. % in the last month. it doesn't with. >> and we definitely are seeing

robust or resilient consumer fen are sending. but there is and maybe you would say hope that consumer spending is going to start to to then. i think it going to they've run down the lot of savings. for a long time they had excess savings in balance sheets, we've got student loan repayments that are restarting. have this increase in housing prices. that really hurts a budget and then we've got the expiration of the funding for dhield care, which will either push kield care costs up and leave other side whether they can live on one uncome. so you just have a lot of things

all pushing in the direction of consumer spending mess over the next six month. i do think we're going to see that softening in consumer spending. >> steve, i don't know if you saw that interview is that bank of america, they are seeing people trid and to sit down, dining restaurants. they have seen an numbers and people peting out of. >> you know, becky, i did see the interview. i think it was very interesting. i have been collecting one g guacamole for every time a person said the consumer is going to slow. i have a large bowl of guacamole. >> everything betsy says is 100%

right about the concern about the consumer. my concern is this -- i think that economists have overplayed the importance of government assistance and underplayed the importance of wages. a lot of people are employed and some of the raises they've gotten, some of them have not always kept pace with inflation and people seem to be spending that money. the government just drastically rised up what they had in their pockets. everything betsy says is right. there are challenges to the consumer. i feel look consumer is going to dope it do. >> i know it wrong because every dr time because my 13 contributors from the rapid

update had it wrong to begin with. they gave us a 5.3% and then up to 4.7 in june. >> hey, joe, a and also saying we have the recession,s coming and last time it got cut off because things that the fed are doing. is there something the government can do to string this along? >> certainly fall ad, that can and service spending is recovered. it right on and banks are -- you typically finance durable good purchases and all of the strength was in july.

it sandwiched by weak data in june and in august. i do you this hend quip about how go broke all at once. worry seeing in this mod rars, at least in terms of the monthly data and at some point it will snap because soft landings and recessions all look the same until right before the recession start. >> rick, just back to you. your bet will be that interest rates will be higher from here? maybe considerably? you talked about the potential for eight to 12 weeks. >> i think if you take a very long macro view 7 to 15 years, i s i think if there's a lesson to learn with the middle east issue, is that there is always a buyer out there when that two

out of the three panelists here do agree that most likely we are going to see a slowing and maybe it will be in the first quarter. think transitory and set it's just that all the number and on the back side of this, i would be very careful about making statements about the economy and what ultimately affect it is, just like the savings rate being underestimated. there's a lot of things being underestimated due to fiscal doms and, jendy spusing. woe want to thing rick, joe, betsy and. >> and former dallas fed president robert kaplan is about

to join us as we head to a break and pioneer natural resources/exxon announcing a deal to buy them for just over $60 billion in stock. last our darren woods downplayed the side of the commonwealth bound companies. >> together while scott will have a large, larges about together. it stl so we don't anticipate any regulatory issues here.

welcome back to "squawk box" right here. cpi headline coming in above expectation. good morning to you. i'm putting you back in the room with jay powell on this morning. you just saw the numbers. you know the context and background of where we are. what would you be telling him? >> i would still probably do nothing in the meeting that's coming up in november, and the reason for that is we've had a

very substantial tightening away from the fed in the treasury curve and that will serve to tighten financial conditions. however, i do think inflation is going to be sticky. it will be sticky getting below 3% and we have to leave the option open that we ma need to do more in future meetings, but i would did so you stip the november meeting. when you look 12 months out there and you're talking about inflation continuing toin. >> it's still possible that that could happen. we've got a couple of significant structural issues that the fed is working against.

one, we've got decelerating workforce grote. in order, we don't have enough workers at the infrastructure and being many spent thissier andneck year. that is a spim litting their incomes are strong and i think they're likely to stay strong. consumer is going to. while we're trying to make the transition to wind, solar and alternatives, we still got a lot of demand globally and in the united states for foss ul fuels.

workers need usually to drive a car to get to work and they're going to get paid more if that your going to put gas in the tank. >> can you weigh in on this horrific attack in israel and how that wil also the prospect of widening, of escalation, i think it creates a lot of uncertainty, and i think when you have uncertainty and you don't know how this is going to unfold, the wisest thing to do is to stand back and not take action and let it unfold. i think it will -- these recent horrible events are more likely to auger for take no action than to take action. >> i want to bring you back to last friday, jobs report. we had a hot number, total number, in terms of employment

or unemployment, but then, when you started to look through it, people got a little more comfortable with it, because they didn't think -- wage inflation wasn't going up as much. you didn't see a cutback on the hours worked in the way that i think some people had been anticipating. do you take that as a positive -- was that a hot number to you? what number was that? >> it was a number, to me, that showed the cross currents in the economy. away from government spending that's fueling demand for manufacturing and manufacturing construction workers and infrastructure projects, the economy is softening, and if it weren't for the government spending, i think it would have softened further by now, and i think we would be a lot more confident that the fed would be done raising rates, but maybe what's not being talked about enough, we have substantial amount, as i've said before, new manufacturing projects, usually

public-private partnerships with the inflation reduction act, infrastructure projects. they need workers, and they fuel demand for workers, and so what's happening around the country, when i talk to companies, and particularly service sector establishments, they're competing with those projects to attract workers and to keep their existing workers, and so this dynamic appears like it's going to continue through the end of '23 and into '24, and i think these cross-currents, i think, a little bit, were reflected in that number, and you saw the footprint of government-related spending also in that number. >> we had jones at this table yesterday, and he said a recession is almost invariably in the cards. this idea of a soft landing, at least, i think, i don't want to put words in his mouth, i think is just, in his mind, something that is almost a plane that's impossible to land. do you agree with that at this point? >> yeah, i think the issue is

when. and i think, again, without the -- without the large deficit spending, and again, we just have gotten, for the year that just finished, we ran a touch below $2 trillion deficits. that's historic, historically large post-crisis, prerecession. normally, you get those kind of deficits in a recession. we're getting them now, and i think that government spending is kicking the can a bit or forestalling when a downturn will happen, but there's still going to be a downturn, particularly when the government spending dissipates. my only question is, it may happen later than people expect. >> fair enough. robert, always great to get your perspective on all of this as we're all trying to figure it out together. thank you. >> thanks, andrew. still to come this morning, we will tell you what to watch ahead of the opening bell on wall street. and a reminder for you, you can get the best of "squawk box"

st our daily podcast. ju follow squawk pod on your favorite podcast app. meet gold bond daily healing. a powerhouse lotion that moisturizes, heals, and smooths dry skin. with 7 moisturizers & 3 vitamins. and... new gold bond healing sensitive. clinically shown to heal & moisturize dry, sensitive skin. gold bond.

♪ upbeat music ♪ upbeat music

♪

caroline ellison, the former ahead of sam bankman-fried's alameda research arriving at a courtroom in manhattan for more testimony today. yesterday, she testified that she and bankman-fried defrauded customers, investors and lenders. ellison pleaded guilty last december to counts of wire fraud and conspiracy in connection with the collapse of ftx. in her testimony yesterday, she said that sam bankman-fried directed her to do those things. >> joining us right now as we count down to the opening bell, kevin, the president and chief investment officer of henne and walsh asset management. good morning to you. we just had a conversation with mr. kaplan. all the issues we're seeing taking place in israel. wha what do you do? >> i'm somewhat comforted by mr. kaplan's comments because my fear right now is that today's ppi report, which came in above

expectations and will likely be followed by a similar cpi report tomorrow will lead the fed into believing they need to do more. if they do that, i believe that they risk pushing the economy into a deeper and more prolonged recession than would have occurred next year given the high impact of those high interest rates on an over leveraged government and a over leveraged consumer. a consumer that's now facing credit card interest rates above 24%, the highest on record, a consumer who now has got into early delinquency status on those credit cards at the highest pace in the last decade and of course the consumer whose personal savings continue to dwindle. if the consumer stops spending the economy will slow, ultimately leading to a potential recession in the first half of next year, and then the fed is going to have to come to the rescue, perhaps with more

than 50 basis points in rate cuts that they're currently forecasting for next year. >> so, but that also suggests that things get really bad and they have to cut. right now, i think kaplan is saying, things are going to have to get tightened up a little bit more. >> if you look at the fed's own estimate, they believe the economy will continue to grow this year and exceed their earlier expectations, but if i look into next year, andrew, they're forecasting gdp growth of only 1 p.5%, and gdp growth staying below 2% for the next two years after that. they forecast that inflation will remain above their 2% target for the next two years. yet, over those next two years, their forecasting as it stands now, 50 basis points next year and 120 basis points in additional cuts the following year. the fed doesn't cut interest rates if the economy is doing well. i believe investors should start positioning their portfolios,

being more defensive over the next six to nine months, but getting ready for the ultimate turn in the market, because when rates are lower, when yields are lower and if inflation ultimately is lower. our research shows that there's three sectors they should look at. consumer staples, information technology, and of course staples. >> you just hit the bingo card, because we got to go. we appreciate your time and perspective on all of it. becky, this was fun. "squawk on the street" begins right now. ♪ good wednesday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer and david faber at post nine of the new york stock exchange. premarket hanging on to gains even as september ppi runs a bit warm, stirring some jitters about cpi tomorrow. meantime, biggest m&a deal of the year in exxon pioneer birkenstock going public today. our road map begins with ppi coming in a bit hot. investor