market as the issues continue in the middle east with the israel-hamas war. right now, wti, up by about $1.38. okay, folks, make sure you join us back here tomorrow. it's been interesting. i'm sure it will be throughout the day as well. we're going to hand thengds thing things over to "squawk on the street" but we'll see you back here tomorrow. ♪ good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer at post nine of the new york stock exchange. david faber has the morning off. premarket is holding on to gains despite september cpi running a touch hot. up 0.4% on headline. core was in line. yields are higher, but that ten-year, managing to stay below 4.6% for now as we turn our attention to earnings next. our road map begins with that latest inflation print. hotter than kpexpected for the month. the uaw expanding its labor strike against ford, targeting one of the company's largest

plants. we'll get the latest. and the iae saying the israel-hamas war has oil markets on tenter hooks. the general take means the fed may look past this one. >> well, look, they're struggling on shelter very much because it's rent. they took the housing out in the early '80s, and there's just not enough places built. we had some numbers this morning, i was watching on frank holland's show. it's 1% down in new york. that's not -- that's not going to cut it. jay powell wants to see housing rolled back a little bit more. it's up 40%. rental, you need more apartments built. i think that he wants to see more good numbers in a row, and i can't say this is a good number.

>> people were hoping for a 0.1% and you do have 0.1% if you take core ex-shelter, and people are looking at some of the new rent data and that will eventually get folded into these monthly numbers. >> and i think energy. but i just think that what happens is that you hope that other things make it down and make up for it, and you don't. look, rent -- it is true that there was an amazing number of apartments that were starting to be built after covid, and they should come in line, and then you're going to have it. but why jump the gun? why look and say, you know what? it's going to get better. you have -- it has to be better, because otherwise, what's going to happen is there's a chance that he lowers or does nothing, and then it goes bad again, and he looks weak. so, i think he's going to look at these numbers and decide, i don't know if this is continuity. i think that it should have gone down each month, and instead, it stayed roughly the same. that's just not good enough. >> year on year core did go

down. we got to 4.1%. prior, 4.3%. santelli was pointing out, haven't seen a sub-4% number since may of '21. >> i think there's a big issue here, and the big issue is that he -- this is my own personal view of it, knowing his ethos. look, the average worker can't handle that. i mean, that means you go to olive garden, you go to friday's, and the numbers are too high. it's just true. and you go and you have a drink and the number's too high. so, you stay home and you go to the supermarket, and the numbers are too high. like, nobody's cutting, and nobody's cutting price other than if they're trying to get into costco. so, costco is the great equalizer, maybe amazon. you have amazon trying to do the right thing but you have the ftc coming down on them. i want to know who, other than costco, maybe walmart on the private label, is at the

vanguard of trying to help the working person. it doesn't mean anything to the rich -- powell's not focused on the rich. he's focused on the people who make $45,000 or $50,000. this is not a good number. >> well, that's kind of what delta got to today where unit passenger revenue is down 1.5% because airfares have come in. >> there you go. that's real. but they don't have -- we don't have enough money -- they've come in. these are still small numbers. they're small numbers, and i think if you're jay powell, you're not trying to get things down 1% to 2%. everything's up so much. since the pandemic. but the pandemic's over. and the only company i ever hear that's saying it is costco. costco had two to one. why? because they went into everybody and said, look, the whole charade about the freight, that's all over. and if you want to sell with us, you got to cut price, and if you don't, kirkland signature is going to take you apart, other than coke and pepsi, and i think that's kind of the law of the

land. but the other supermarket, nobody's doing that. no one is holding these producers. no one is saying to the people who build apartments, listen, there's a lot coming on, and people who -- the guys who build the apartments say, wow, we're going to be in trouble. you can't convert the -- it's too expensive to convert the office. we thought that was something that could happen. i just think -- think of the working person. look, i'm very grateful that i do well, okay? i can handle a 4%. but as someone who owned a restaurant, that's too much. >> well, i mean, you're obviously looking past used cars and apparel, which were negative. >> september was up. >> headlines this morning about ikea cutting furniture prices again. it's clearly not enough for you. >> no. because i had carmax on the other day, and september was up 1% for used cars. up 1%. i mean, that's the kind of thing that if you're powell, you're saying, oh, man, if i had moved, and it's up 1%, what did i

accomplish? again, who buys used cars? people who don't make much money. carmax said that on air. who has to pay a giant amount for credit card? those people. those people being our citizens. it's very hard to afford the financing for a car. so, let's stop being so elitist and remember that people go to the supermarket and they go to the drugstore, and the prices are up from four years ago, but why? why? we've got transportation covered. we've got supply chain covered. could chemicals be up? no, we have a surfeit of chemicals, natural gas, liquids. should the surfactants inside be up? no, those are chemicals. should the general stuff that's in the -- in a box of oreos go up? why? cardboard is down. >> aren't you a champion of corporate margins? >> i'm not lina khan, but i am

saying that powell is uniquely pro-working class, and these are numbers that are not conducive to the working class person being able to save any money. >> so, you would hike on november 1st. >> i would, but i'm going to be wrong. >> you don't think they will, but you would. >> yes, because this is too high. >> if that's so, why are equities hanging in this morning? >> okay, i think equities are hanging in -- look at the food stocks. i did this piece last night for no huddle after i was sure that bryce harper destroyed the braves. the idea was that historically, these food stocks have had higher multiples but they're safety stocks. and then i looked at the multiples and other than pepsi, coke, the multiples have collapsed. why? because people don't want to be in these stocks, where it be a gop-1 or because people just say, you know what? the average working person cannot handle these costs. they'd rather buy private label. when you go to walmart private label, people joke about it, but

i defy you to tell me that it's different. kirkland signature -- i've worn a signature tie. i've worn a kirkland tie and kirkland shirt here in the last couple days. did anyone say, oh my god, cramer is wearing a tattered shirt? no. i look darn good. well, that's a little hyperbole, but the tie and the shirt were not recognized as being kirkland. >> i did a whole doc on costco and the efforts they go through to make things as good as any other brand. >> they're premium generic. what you have to look at is what powell's thinking, not what you think. >> we did get some upgrades this morning of kmb and clorox. we saw bernstein making a bullish stand here. >> those are typical of the reset. well, linda randle, i don't know if they finished finding that hack yet. that's kind of a negative kpe citiz existential thing. look at kimberly.

there's not going to be chinese kleenex. there's not. you're not going to put it in. it's got a 4% yield. it's got a 15 pe. i could argue that that pe is a little bit too high, but they have a brand. they have a mode. i think clorox, i mean, go on to amazon and try to find an analog that will clean your whites. clorox tried to merge with procter, and the government shut that down. that's a mote. even though it's the most generic of generics, chlorine has a mote. and i just find that these companies are so low that they look up to me. >> is walgreens also in that camp? >> absolutely. i'm so glad you brought that up. they didn't really kitchen sink it, but tim wentworth is going to shift -- now, 5% of theirs is health care, 95% is lock and key. lock and key being the -- that, you know, i order stuff from amazon in the morning, and it's there in the evening, and it beats, of course, having someone

over. he knows that. he's going to pivot and make that into a health care company. that's a buy. >> we'll talk more about that in a bit. wentworth starts his job a week from monday >> this guy's a genius. >> you said nice things yesterday. >> he's powerful, and he understands. the previous ceo left before the press release was out. suboptimal. this fellow -- i sound like my father -- is so good. what a choice. i love it. >> we'll talk more about that, obviously. it's a big corporate management piece right now. the market's still fielding headlines from the israel-hamas war. now entering its sixth day. we got the secretary of state arriving in tel aviv today, meeting with regional leaders, including netanyahu. kelly cobiella is live on the ground this morning. good morning. >> reporter: good morning, carl. yeah, the government here in israel is not yet announced any sort of ground offensive. they haven't officially said they're going in on the ground,

but that is clearly the direction we're headed, and it could come -- when you look at the number of troops and tanks amassed on the ground at the border with gaza, more than 300,000 reservists, some coming in from abroad, getting ready, preparing for war, for what will be, if it does happen, a very long and difficult war. the conditions inside gaza, absolutely horrific. you have a lot of infrastructure that is damaged as well. so, it will not be easy for heavy equipment to get into gaza. today, secretary of state antony blinken was in tel aviv. he did meet with the prime minister, benjamin netanyahu. he spoke to reporters afterwards. he pledged the u.s.'s ironclad support for israel. he described some of the horrific scenes that have been uncovered in the kibbutz and other communities in the south saying there's no excuse for the

atrocities committed by hamas militants. he also said the u.s. was working closely with israel to release hostages in gaza, and he said there is intensive diplomacy happening right now in the region to make sure that this does not expand into a wider conflict. those air strikes are bombarding gaza now almost around the clock. it is relentless. aid workers inside gaza describe it as catastrophic. they say hospitals are absolutely overwhelmed and overrun. people are huddling near hospitals, hoping that that is a safe place, and the fuel for generators to operate them may run out, aid workers said, within a matter of hours, not days now, but hours. israel, still standing by its blockade, saying no fuel, no humanitarian assistance will get into gaza as long as there are hostages still there. that, at least, according to one official here in israel.

there is concern, of course, for the hostages inside gaza. the u.s. says some hostages are american, a very small number is what we've been told. no more clarification on how many of those hostages may be americans today. but for the first time, we did hear from an israeli spokesperson saying that they have located some of those hostages inside gaza. he didn't say how many. of course he didn't say where because of security and operational reasons, but it's a first indication, carl, that they are now getting some sort of intelligence and finding out where the hostages are. >> kelly, thank you for that update. kelly cobiella of nbc news joining us today from israel. take a look at the premarket here. market going to be whrestling with those headlines. we will get to corporate news, of course. dive in on delta, dominos, the actors strike, ford, uaw, what happened to birkenstock yesterday. vicks still belo16hiw ts

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here's why you should switch it's possible. from chrome to duckduckgo. duckduckgo is a browser you download to your mobile and desktop devices. unlike chrome, the duckduckgo browser has privacy built-in. it comes with a private alternative to google search, which doesn■t spy on your searches, and it blocks cookies and creepy ads. and there's no catch. it's free. we make money from ads, but they don't follow you around. join the millions of people taking back their privacy by downloading duckduckgo on mobile and desktop today. the uaw launching this unexpected strike against one of ford's most profitable plants. our phil lebeau once again working two beats today, has the latest. hey, phil. >> carl, this is a major gut punch for ford. let me put into some perspective just how valuable and important the kentucky truck plant is. this is, by many estimations, the most profitable auto plant

in the united states among all automakers. i've heard this from a number of people in the auto industry. the number of vehicles and the value of those vehicles that come out of the kentucky truck plant, 8,700 uaw workers now picketing outside of that plant in louisville, kentucky. 19.7% of ford's u.s. production comes through that plant, and it is not only ford's biggest plant in the u.s. it is ford's biggest plant in the entire world. 41% of ford's u.s. production has now been stopped by a uaw strike. let me say that again. 41% is now stopped because of uaw strikes, and when you look at the kentucky truck plant, this impacts not just that plant but 13 other ford facilities upstream as well as downstream, the stamping facility, the stamping is not just for this plant but for other plants as well. so, it's a major hit to ford, and to the bottom line depending on how long the strike lasts and

how much production is lost. by the way, this truck plant generates about $25 billion in annual revenue for ford. that is 1/6 of its annual revenue. guys, you cannot overstate the significance of this move by the uaw as they are sending a clear signal when they made this announcement yesterday, a surprise announcement, i should point out. this is a clear signal to ford, it is -- it's taking it to another level. that's the bottom line here in terms of how the uaw is approaching things. guys, back to you. >> phil, i wonder whether the impact is so big here that if ford compromises and gives in, whether they'll have enough money to be competitive, to do the transplants, to tackle tesla, and the chinese. how will they do it if they give into this? >> great question. all of this then comes down to profitability. now, shawn fain of the uaw would sit there and say, what's your

north american profitability for ford this year? i think it was going to be around $10 billion or $11 billion, something like that. from shawn fain's perspective, $11 billion or $12 billion, whatever it's going to be, that's plenty of money for them to start spending on the rank and file workers. to your point, jim, ford has already allocated, what, $50 billion in terms of how much it's going to be spending on evs. they've already spent, plus they will be spending over the next several years. they're nowhere close to being finished in terms of that conversion to the electric vehicle and how much they'll have to invest. so, do they have money? yes, they have money. is it endless? no, it is not endless, to your point. >> well, phil, if it's not endless, and they dpagree to th contract, is it possible that they'll have to fire, say, tens of thousands of people? is it possible that they might do a lockout?

>> i don't think they'll do a lockout. jim farley has said, look, we do not plan to have to let go of anybody or not staff facilities with the contract offer that we have put on the table. and by ford's account, it is a record contract offer with 23% wage increase, cost of living adjustments, a number of other enticements, if you will, for the rank and file. so, ford says it's not going to shut down plants. this is not going to be a case where they sign the contract and then say, we can't afford this, we're shutting these two plants down. they are committing to these facilities that they have currently with the uaw at least through the length of the next contract. >> phil, finally, the street's reacting to the news this morning. one of the interesting takes came out of wells fargo today where they argued this news was positive, that it's going to allow the union to demonstrate to rank and file they got their pound and flesh, and it could imply a deal in the next one to two weeks. >> i saw that, carl.

look, that's an interesting take. that would imply that the union believes they're pretty close to a deal, and this is one of those moves that they make and, okay, couple of weeks from now, we might get a little bit more from ford, but we're pretty close to having what we need. i don't get the sense that they're close. that's just my sense talking with people involved or close to the negotiations. it would be great if this analyst note is correct and it gets rawrapped up in a couple o weeks. it's an interesting take, to say the least. >> i thought the same. and phil, your reporting is just amazing on this, but can we just get a little subjectivity? bad will. when i was watching a big ten game when this started, ford was doing these incredible ads about how great they are to the workers and how they're all one. this sounds like, you bring a camera crew to a walkout. this is devastating for what i

thought was maybe good relations between the union and jim farley. >> totally different playbook. the uaw is using a totally different playbook than anything that has been used in the past. and that was shown with this, carl, interms of, look, this was -- they knew. within a couple of minutes of being in that meeting, they said, oh, we don't have a counteroffer from you? fine. kentucky truck goes on strike. i mean, this was not a case where it was over hours and then at the last second, they said, we're fed up and we're going to go on strike. >> no facebook live this time. >> no. >> phil, we'll talk some delta later on this morning. thanks very much. we'll get cramer's "mad dash," countdown to the opening bell. take another look at the premarket here. we're back in a minute.

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♪ dow gainers, wba's at the top. it doesn't move the dow much. in fact, it moves the dow the least of all 30 components. thanks, mike, on that one. but continues to try to bounce off these dedelulo oca-ps wsff earnings. opening bell coming up in just about five minutes.

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>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. time for cramer's "mad dash" as we count down to the opening bell. >> people starting to put some numbers on paper about the exxonmobil pioneer deal and i think the best piece i've seen so far is from truist, which upgrades it and just talks about, it's the right m&a fight. if you go through the deck, you'll see there at 150,000 barrels a day and there's a billion dollars in synergies that this will help pioneer get to its carbon zero footprint, and it's rather remarkable. now, i was -- i'm not saying i was against it. my travel trust had a huge position. if you like exxon, you like the

combination, you're going to get more. this is a very thoughtful piece, which really, i think, would be ammo against something if lina khan wants to go from the ftc because it really says, there are so many benefits. what you would have is maybe a lower gasoline price, which everybody in america wants. >> i haven't heard you or david suggest there's a lot of risk on this one. >> i didn't think there would be on activision-blizzard, and i didn't think that we would have a lot on horizon amgen, and i was wrong, so i'm not going to just say that she's going to -- i mean, those deals just seemed so clear-cut and positive, and the judges report from northern california on activision blizzard was such a cslap in th face, and the fact that they agreed to something the amgen ceo put out beforehand tells me they're on the run, but i don't trust them. >> by the way, we just saw that graphic, david's documentary on exxon from a few months ago, going to run again tonight.

great profile of what exxon is doing all around the world, and that was a big part of the commentary from woods yesterday. >> yes. people should recognize that -- not have the technology to get to zero on its own. sheffield said a couple weeks ago that -- the one thing is that i introduced the new ceo on "mad money," and he will not be the ceo. i was hoping for -- that they would get to the highest price that it's been. they did not. but scott's a very earnest man, and i salute him for what he's done >> there's a look at the open here, just south of 4,400. at the big board, it's vanguard, celebrating the 13th anniversary of the vanguard s&p 500 etf. at the nasdaq, it's microsoft commemorating hispanic heritage month. microsoft also in the news today, jim, on this report that there's a tax dispute worth $28 billion in back taxes, perhaps. >> yeah.

i would say that when i read it -- amy hood is the excellent cfo there -- i felt that i -- i know irs, you're guilty until proven innocent. the only part of the government that's like that. but the government may have met its match with amy. she's that good. >> yep, yep. >> and that earnest again, and that honest, and i just -- this one's hard for me to swallow or believe. as for the overall indexes, nice note out of the goldman desk, just looking at the short position, the notional short flow close to ten-year highs. they think this squeeze could continue, and it kind of explains in their view why the market has not freaked out on geopolitics. >> yeah, and they have a tactical list of great stocks that you should buy, and they're, of course, one of them probably would be goldman now that they off to green sky. i think they're grudgingly saying, we better get on board, recommend some stocks here, be a little more positive, because it

doesn't want to go down. now, against that is, it's the megas that don't want to go down. i could show you plenty of companies in the food and drug that want to go down. the utilities want to do down. retail wants to go down. oil and gas wants to go down, so, yes, you're reacting to mark zuckerberg and reacting to andy jassy and people who are just -- to jensen huang. there, i'm talking about meta, amazon, and nvidia. and these are the companies that move things higher. anything that's in the sights of glp 1, even by the most fanciful, and this is wegovy and maunjaro. that's the thread. i think there's a piece today talking about res med and how it made -- sleep apnea may not be that bad. the problem with all these is that, look, let's say diabetes. it's absolutely true that if you have diabetes, you're going to take the libra -- the monitor

from abbott, but if you're prediabetes and overweight, maybe you get your weight down and don't get diabetes. it's the populace that might not need any of the drugs or devices, and it is the, i would say, the people who, in the future, have drugs that they take, and they never talk about this, but they really should. there are a lot of drugs, 15 million people between 5 and 15, take drugs that put on weight. they usually don't take it because they put on so much weight, and they are the ones that i think the health care company, the insurers are going to just give it to immediately, because you can put on so much weight with drugs, and therefore you don't take them, so you have problems. i think ultimately, when you look at eli lilly, it's correct what's going on. >> right. it doesn't seem to have buffeted dpz all that much, although revenue miss today. >> right, but what i thought is interesting is they -- you say, okay, why isn't that stock down

more? and the answer is, it's up, because you know, russell, the ceo, has figured out a lot of stuff. remember, we were facing quarter after quarter of decline, and we couldn't figure it out. this is a quarter which just says, you know what? we're willing to tolerate some down quarters in u.s., the international is still good, to figure things out. it seems like they're slowing the franchises. but i was very proud of what this company is doing, because now they're going to have -- they have uber eats. it's going to be on the menu. i look at them, and i say, they are very forward thinking. they're very forward looking. the cost of a pizza doesn't mean as much as the opening of franchises. i was a little disappointed they didn't open more franchises but this stock is up because people recognize there's a new sheriff, and i think wiener is great. he was a vendor at yankee stadium. >> you're kidding. >> no, no, he was a good guy from way back, and i think he's

rigorous. i think he's tough, and he's surprising people. and it's really good. >> that's interesting. chipotle is sort of in the same universe. there have been reports this week of further price hikes, jim, but the damage to cmg is not nearly what mcdonald's has suffered, i think. >> they're talking about four different price hikes. i'm not sure whether chipotle may exactly agree with that, but i would say this. i think the stock is going to $2,000. i think that brian niccol has -- is bringing the best technology in. mcdonald's is a case of the franchisees being angry. if you want to know who's in the crosshairs of glp-1, it's mcdonald's because you're not going to have a double. you're going to have a single patty, because you can't finish it. so, why bother to get a double? and then the other thing is that why aren't they doing what wendy's is doing? maybe they are. >> the lettuce stuff? >> no, but you don't need that person who's on the drive-thru. >> yes. >> because the person is not as smart as what jensen's come up

with. so, then, you make the person -- you don't fire the person. you put them on the make line, and you save about a minute, and then i'm more inclined versus wendy's where my wife's in charge, and you know, if they had a triple burger with bacon, holy cow. you know? pound it. maybe i shouldn't have said that. >> that's okay. we know she doesn't watch. lot of curtain raisers on the banks today. one's on goldman. you mentioned green sky. is the deal environment rich enough to have the quarter be good? are you making moves? have you been interested in b of a? >> i wish they hadn't done birkenstock the way they did. that was greedy, and the deal breaks down, it kind of stops the engine. as long as lina khan remains at the ftc, you won't get the mergers that you want. but when you cut out the extraneous things, say, at goldman, you could do well, and bank of america is very cheap. that historically has not been

because the regulators are still in charge of the banks. i don't like the banks. i look at -- you look at huntington bank shares. look at key. key is 7.7 with gorman who's running it and he's a fantastic ceo. he's done a great job. key dominates its areas in cleveland, and it doesn't matter. now, how could that be? 7.8% yield. first horizon was not able to complete a $25 bid from td because of problems with td, and the stock's at $10. i mean, i justice think these regionals -- someone calls on the lightning round and says, what do you think of these regionals? i don't know what makes them higher. >> and that comes from someone who would hike rates on november 1. >> yes, i would. i'm with powell. you raised the issue, don't i want higher gross margins? for our viewers, yes, but i do fret about the working person because a 4% increase is gigantic for them. look what's happening in ford. i think ford has gotten a little

aggressive, but ford had underpaid because of the old contract. but i just think that powell's right. he wants to see 4%, 3%, 2%. he wants to see what part at costco. >> a.p. has a piece this morning on public approval of either the automakers or the unions. you want to know percentage that favor the automakers? >> oh, my. >> it's like 6%. 9%. below 10%. >> i was shocked at that. i thought perhaps there would be people who say, you know what? i have an f-150, i love it, and they do a great job, and the workers are being greedy. no. the workers win. >> that kind of brings us also to the actors guild as talks are now spuspended. long thread on x from the union alleging bully tactics. the gap is just too wide on pay. >> these are amazing. wherever there are unions, it seems that the unions are basically saying, listen, we haven't done as well as you thought. now we're going to get the make-up that we haven't made,

and i don't see much backlash. frankly, i think it's rather amazing, carl, that there aren't people who just say, will you give me a break? i feel that you're making too much money as it is. but no one's saying that. and i think that they're looking at the amount of money that the ceos make and the disparity in this industry, which is the largest of any industry i follow, and just saying, are you kidding me? i just really think that it is a travesty how much they make versus how much the people on the line make. that's not the case in the autos, but it doesn't matter. >> you think it's interesting that the airlines managed to get through a lot of negotiations without too much drama? with the pilots, the -- >> what a great question. i have found that the airline ceos, and i interview a lot of them -- i'm not saying they're better than anybody else, but i am saying that they seem almost more sympathetic and a team, and it does seem that the workers money more proud there. i'm shocked.

i was on the bronco assembly line for a day at ford and i thought the people were like, yeah, man, i'm making broncos. my daughter has abronco. they all wanted pictures. well, no. i mean, shawn fain has got them riled up, and the bronco looks like, you know, it's shut down and now the -- geez, the super duty. i mean, the super duty is america. and you know what? america is saying, jim farley, you're a great guy, but uh-uh, we're going with the workers and it's really tough. there's so many people involved. if you shut that down, jay powell is going to have to do something. he won't be able to be raising because the ripple effect's gigantic. >> we're not going to have used cars to lean on. >> no, used cars are not going to be up 1%. carmax does a really good job. it's a really good company, and when they talk about the costs not going down, they have the best look-see to any company on

earth. >> on the calls this morning, jim, target is interesting out of b of a. >> that's one of those that's like, okay, i went there and there are still a lot of people. i realize -- it's kind of weird that a place that we all like to shop at, and i'm putting it out there. i shop there constantly. it just seems like they are the odd man out. they can't make it in food. that's walmart. they can't make it in clothes. and that's totally untrue. they have so many private labels, and i think it's theft, and i don't want to -- brian cornell has been the most out front about theft and i was in a jailbreak theft on mission where there was a -- >> you happened to be there? >> i happened to be there for a jailbreak theft, and what that was, someone dropped a lot of change, so the cashiers are so giving and thankful, they all were picking up the change, and that was the signal to carry out everything that you could find, and i almost got hit by a giant bottle of cranberry juice.

i wouldn't be here if i was, because that would be like -- i would be in concussion protocol. >> yes, yes. >> but it was amazing, and i told brian cornell, and he said, look, the cashiers are not like armed guards, but the breakout was incredible to watch because it was so organized, and it was pretty much any -- i felt it was any item that was not under lock and key. >> right, was being carried out. >> yeah. >> cornell is one of the ceos meeting with the president today about the economy. arvin is going to be there. ken, formerly of axp, talking about sort of how corporates are viewing the economic environment right now. that will be interesting. >> i think that we're getting into the -- a serious have/have not. amazon has no theft. costco has no theft. we don't know about walmart, but they really haven't spoken about it, but these companies, if you want to know -- i mean, look, is walmart a monopoly? no. they're doing a great job. they're a price cutter, not a price raiser, and costco is able to keep prices down.

but you have albertson's merging with kroger, and they need that. that's existential if they're going to go against these companies. if you take a look a at the charts of all the companies i just mentioned, they are up charts, and the reason is that they don't have any theft, and theft is the -- theft is the destroyer of margins, and there was a great story about a ring that was found at a home depot, and you know, i just think that anything that's not nailed down -- and there were terrible couple shootings of people who tried to stop. so, you can't stop them. the only way you can do it is to put people in jail who steal more than $1,000 or to break the ring. find the ring of fences, because this stuff is not -- maybe the cranberry juice. that may not be. there's no store set up. but it was on mission street, and brian said, listen, what am i supposed to do? i'm committed to that neighborhood. i'm the only guy there. the store manager's great. medium don't understand brian cornell. he was so proud after george floyd that there were people who

ringed the targets in brooklyn because they were hoping they'd stay open. but they started to close stores too. >> for sure. >> and i think anyone who talks to brian knows he's so committed to neighborhoods that you wish that people knew, don't hit target. but uh-uh. >> on some industrial names, jim, i got a downgrade of carrier, again, this time out of wolf. >> what? people just think that dave has fallen into a trap with this german company and the fact that europe is too weak to be able to make it so that everyone will convert to these -- to better pumps. but europe has all the money in the world for the environment. it's everything else they don't have the money for. but i know dave's research. dave's been on a couple times. i'm with dave, but i also understand there there are a series of analysts who simply don't believe that europe has the money to make everybody convert. i disagree with that. >> right. fasten-all is the biggest s&p gainer today, despite some

comments that there's still some challenging dynamics to this environment. >> granger is doing well. cintas is doing well. there's all these companies that are really aid small business to medium-size business, and i think that's one of the great -- i had intuit on last night. fastenal is more just a general. intuit is about making it so you don't need costly help anywhere. look at that. look at that chart. that's a chart of small business. when i had paychex on, new guy, john gibson, he's terrific, they just talked about how there's a continued growth in small and medium-size business, and i think that's adobe and intuit. they're the rubric, because my daughter's website -- >> i was just thinking of her. >> she's trying to expand to similar businesses, but you can use the website and, believe me,

you're better than any of these companies that's going to be chatgpt'ed and better than you're going to be in the -- you know? you got them all there. wegovy. but it's true. you can do -- the people who do chatgpt who are big aren't doing it any better than people who are doing it small. that's really important. >> you mentioned, briefly, birkenstock, which this morning has broken $40 briefly. >> yeah. sometimes you just get had. you got had if you bought that one. they played it too high. they were too greedy. that was dumb, because they could break the streak and then gina, our person, put out an amazing piece yesterday. i'm trying to get her to isolate the chinese companies. there's some bad deals and some good deals, but there are a lot of bad deals. >> do you buy the headlines that argue this deal's dealt a blow to the budding ipo window? >> yes, because the bankers got greedy, and the company, the pe

company, got greedy, and you wrecked the narrative. birkenstock, come on. we did a piece that said it was really expensive in the 40s. >> relative to what? crocs, nike? >> yeah. look at that survey that piper does, and you can see, by the way, that nike has this tremendous -- they have 60% mind share, and birkenstock, the only company that is -- i love nike here, by the way. i just think it's so overdone on the downside. their china numbers are good. they know -- it's really vital for foot locker, which i know is a pathetic, helpless giant that if david were here, he would say, how can you own that stock? >> he would boeing you. >> he would crush me like a bug on a windshield. but i do think -- look at that. people are betting that there's something going on, and you keep betting. my trust owns it. just keep betting. taking the under on that right now. but nike's doing really well, and i think that's cheap, and trade where you go long -- i don't recommend short but you go long nike, short birkenstock,

probably going to be good. the only shoe company that is worth more is federer. they really hide federer. they shouldn't because he's a greet guy. on holdings has a big short position and a lot of people don't believe in it. i think that, look in my closet. prosecution rests. >> yeah. footwear has been a big story this week. we'll go to break here. the ten-year did crack above 4.6% and with that, you did have equities give up opening gains. cpi is now under our belt, and we will turn to the banks that we'll get tomorrow. >> sure. i'm ready for them. >> 4.62% at the moment.

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let's get to jim and stop trading. >> one to watch, vm ware. the ceo, has been saying over and over this deal is going to get chinese approval by october and by the end of october and a lot of people felt that that is fanciful. but that could happen and if that happens, then broadcom, the travel trust in, you would raise numbers dramatically, which is why we bought it. they could buy back or raise it. it's bad day for the market because jay powell is a forgiving man and doesn't -- he's worried about the working person. this is -- it's a secular they are really huge, by the way in ai, they partnered, put air quotes around that, with -- with -- with jensen huang and nvidia. no more than marvel technology.

>> we'll watch that one. interesting headline. china invited our defense secretary to their defense forum which jpmorgan said biggest olive branch of the year? >> absolutely. i think there's movement. i think there's some movement because i think that there's a recognition that maybe things are getting out of control. i still think that kissinger's talk must be watched. because -- this is -- kissinger more with it at 100 than most at 50 and basically saying is, there's got to be some movement here. and i think that's movement. i want movement. i've been very -- only because i want movement. not because i don't like the chinese. my father worked for the chinese for years and i think they're fantastic. >> what's on tonight? >> i'm doing -- we've been doing crazy stuff. it's going to be a surprise. ben soto doing it. a lot of people feel ben soto who helped me write the piece about birkenstock saying it's too expensive, he killed the

birkenstock deal. not true. sellers did. the sellers killed it. >> jim, look forward to tonight. we'll rest up for tomorrow. going to be a big finish to the week as we get some of the bank earnings and kick off the q3 earnings season. some of today's big earnings movers. a look at delta higher despite the narrowing guidance in the 6 to 7 range. >> they tell a good story. i think that company is very good. one i've been recognizing. >> we're back in a couple minutes. place benefits and retirement savings. with voya, considering all your financial choices together can help you make smarter decisions. voya. well planned. well invested. well protected.

good thursday morning. welcome to another hour of "squawk on the street." i'm sara eisen with carl quintanilla and david faber is off today and we have mike santoli live from post nine of the new york stock exchange. taking a look at stocks, little sell-off this morning. the s&p is down a quarter of 1%, dow down about 111 points digesting the cpi report comes in a little bit on the firm side, number of sectors on the move there. most of them lower with the exception of energy and technology. everybody else is in the red. staples, real estate,

industrials and financials. what's happening with treasuries as well. the pattern over the recently days has been buying of bonds with lower yields, a reverse on the back of the hotter number. the 10-year yield below 4.6 yesterday. clearly equity weakness tied to higher bond yields. we're 30 minutes into the trading session, three movers we're watching, walgreens reporting a miss but shares are higher. lack of demand for covid vaccines and tests weighing on the numbers. the company saying that impact of recent cost cuts won't be felt for a few nor quarters. delta airlines on the move profit rising 60% thanks to strong international travel demand. stock is unchanged. target getting a boost on an upgrade from bank of america. the analyst saying despite the recent slide, margins could improve in the year ahead. let's talk about inflation, guys, and that number that came in a little bit hotter than expected. it's not what the fed wants to

see, and continues to come down. core which the fed is watching, takes food and energy, energy had a bump and the headline number was stronger. core matched expectations 0.3% jump in september from august. that was what economists expected. year over year, slips to 4.1% to 4.3. it's progress, but, you know, is it good enough for a fed if you went through the minutes yesterday doesn't sound like they're fully convinced inflation is going back to 2%. but they're proceeding with caution. i think that's the big mantra. do i think it changes anything for a fed hike no. i think they're pretty much on pause right now. they feel like they're restrictive enough. there are, you know, we're watching it. i like what economics said, they said it's more on the longer side of the longer than the

higher side. reinforces keeping rates high for a long time. >> fitch wrote a few minutes ago, not going to change the broader messaging from the fed. trend is encouraging and may want to extend the pause to december given the increase in long-term rates. >> the market cannot fully relax, and it has not fully relaxed about the inflation picture and it's taking its cue from the bond market which was below on the 10-year, below 4.55 so it's adding back losses. these are pretty sizable swings showing you that it is wound pretty tight still. bigger picture you can still say disinflation is the train. slice up the core numbers clixdsing shelter and the d excludeing shelter. in terms of -- there's not enough time to change market expectations about november 1st. i don't think the fed has the motivation or interest in doing

that, it's about how this economy proceeds. decent jobless claims again. >> very low. >> nothing pulling you too hard away from a soft landing until otherwise proven at this point. you can't relax about this. >> if you wound down the goldilocks theme the jobless claims provide fuel for that argument. not seeing mass layoffs in this country, and that would be a precursor to weakness and this is the week before the survey week on payrolls and it was another low number indicative of what's going on. to your point about what the fed is slicing and dicing in the numbers, two more stats to throw at you. the super core which the president fed pays attention to 4.61%. a step down from the 0.5 we saw in august. there's stubbornness there in terms of inflation. then here's the lael brainard number which is the three-month core inflation rate. three months. 3.1% versus 4.1%, lowest year

over year since september 2001. if you squint hard you can see progress on the numbers but there is the nagging feeling t fed and in the market that these numbers will remain high for long. inflation that is. and does it reinforce fed's higher for longer or just longer at the high levels? >> i think they're satisfied and they think policy is pretty restrictive at this point. they don't have the inflation rate getting down to their target until year after next. you're still able to say first of all the volatility of the inflation data has come down, so, you know, we're talking about one tenth on headline. a year ago, it was percentage points away from the consensus. so i think that's something that's another explanation for why the broad market has remained okay. s&p up 3.5% since the low last week and you've had a lot of things taking off it nate terms of worries. -- plate in terms of worries.

$100 oil does not seem a foregone conclusion. even the dollar eases back and we got a good jobs number that also came with the decelerating wage growth. things fell into place inp an oversold market ahead of the better seasonal period and why the stock market is willing to try to put on a brave face about a slightly hot headline. >> we'll find out. our next guest says he thinks the hiking cycle is finished, policy restrictive, former pimco economist paul mccauley joins us this morning. always good to check in with you. some of the comments were prior to the print. did this morning change anything? >> it didn't. i'm very much in the amen chorus with what sara and mike were just talking about. i think really the bottom line after this number is solidifies the notion high for longer, not higher for longer, but high for

longer and that's what the market has to get its arms around and embrace. from a starting point of an inverted yield curve, that's not warm and fuzzy for duration risk, and therefore, is going to have negative knock-on effects for stocks. not big time, but the fundamental issue is high for longer. >> do some of the risks that have developed say in the last week certainly potholes we've been on watch for for q4 strikes and student loans, does any of that weigh on the hawkish side? >> yes. i think it does. it increases uncertainty and increases uncertainty on the softer side for the economy after this incredibly strong third quarter. so i don't think it's a big deal from the standpoint of the numbers per se, but clearly i think of it shifts the skew towards risk on the downside which put reinforces the

proposition that the best course for the fed is to sit and watch and be comfortable that they have reached a sufficiently restrictive level. they're in a good place. >> the sell-off on the back end of the treasuries how impactful is that on things like cost of capital and asset prices and growth relative to a rate hike? in other words, they say that's doing the work for them. that is true? >> i think it is doing the work. i think it's hard to be precise on these things. you have to be very much ballpark and i think president logan from the dallas fed did a fabulous job in that in her speech on monday, so the direction of pressure on the economy is the clear reason and just, you know, back of the envoel lep for me, i would say what's happened in the longer end of the curve in the last 60

days is actually more than at 25 basis points hike on the fed funds rate. >> paul, i suppose part of the increase in yields on the long end has been the market absorbing the higher for longer message and maybe not at least in terms of the pricing anticipating rate cuts, but the market just kind of rolls that ahead a few months and says at some point if there's going to be an inflection, it's going to be a cut by the fed. does the fed have to work hard to try and convey their message more forcefully to the market or is that okay for it to be perpetually out there two quarters away? >> i think it's okay for now. i don't think the increase in the long end of the curve is just the reassessment to a higher growth path. i think that's part of it, but also think very much part of it is an increase in what is known as the term premium or what

should be the normal risk spread between the front end of the curve and the back end of the curve, so i think an increase in the term premium is significant and works very much in favor of the fed being on hold at a high level. it's not just, you know, changing the dot spaces on which meeting will they start easing. it's adjusting market pricing to a higher term premium. >> finally, paul, fitch this week said for the first time the nominal amount of speculative grade sovereign debt is more than the amount of triple a rated sovereign debt. we have all kinds of dire warnings from the ray dahlia of the world unearthing their long standing thesis. do you think we're reaching some kind of moment? >> i don't think we're at that moment at the aggregate level, but i think it does point to

risk in the emerging markets and points to caution, not just to the fed, but to central banks around the globe, not to overdo this process. yes, we have to get inflation down, but there should be patience and caution in the light of the fact that emerging markets always are whipped harder by a tightening cycle. >> paul, a lot of people looking for guidance on what this morning's number meant. appreciate your had help. talk soon. >> good to see you. >> the united autoworkers union stepping up its strike against ford expanding their strike to hit the company's largest factory this morning. to phil lebeau with the latest. what's the impact here? >> it's going to be huge, sara, when you take a look at the kentucky truck plant. as one person said to me in the auto industry, this place prints money. it is the most profitable auto plant among the big three in north america, so this is a

major blow to ford with 8800 uaw workers walking out. taking a look at the strikes around the country, now there's a lot of facilities that have been hit, many are parts and distribution centers. a total of six final assembly plants. there are approximately 33,000 uaw members who are now on strike and they have brought down production at about 29.8% of the big three's u.s. production. that's how much is gone. it has been shut down because of uaw strikes. what does wall street think about the move from the uaw? john murphy at bank of america writing, further concessions appear financially unrealistic. this strike represents a serious blow to ford's north american operations given the profitability of the plant, and its importance to ford's production ecosystem. thenyou've got eta who writes, ford did build some inventory in september which provides some

buffer, but given the production rate at kentucky truck, making up lost volume could take time. this is a three-crew plant. there's no overtime they can add it. 20 hours a day, 10 on saturday and sunday. this note from colin, escalation likely positive. uaw leadership likely needs to strike fords a most profitable plant to show the rank and file they are extracting the most from the automaker. we think this escalation is a sign the uaw could be close to a contract proposal with ford in the next one to two weeks. take a look at shares of ford, keep in mind this is ford's largest plant in the world. we can't stress enough this is where they make the f-series super duties, f-250 through 550, profitable trucks, expedition at the kentucky plant and the lincoln navigator. bottom line, this is a major blow to ford. question is whether or not this is the kind of pressure that uaw

can extract on ford that can push ford to go forward in the negotiations. that remains to be seen. >> phil, to that point you mentioned colin suggesting that this is what you do maybe when you feel as if the process could be culminating soon. is there another -- >> yes -- >> more impactful move the uaw is likely to make after this. >> sure. >> before having another good go at a negotiation? >> absolutely. they could add the pressure. want to add pressure to uaw, take down the f-series production in deer borne, f-series production in kansas city, take down the transmission plants. they could extract a lot more pain on ford. by the way, they can do the same thing to general motors and to stellantis. i think it's an interesting point that colin makes. i'm not sure that i buy it. based on everything i've heard from people close to the negotiations these guys are not close to an agreement.

i could be wrong. i think people in detroit are hoping that we're wrong about that and that this gets wrapped up within the next one to two weeks. i don't get that sense at this minute. >> finally, phil, i know you did bastion on delta earnings in atlanta, you asked about guidance. what do you think that means the narrowing of guidance towards the low end of the range? >> you'll see the full impact of higher jet fuel prices in the fourth quarter. remember, there's a six-week lag and they also got benefit in the third quarter from their trainer refinery in pennsylvania. they'll see more of a hit on jet fuel in the fourth quarter and their maintenance costs. this is overlooked within the airline industry, guys. do you know how hard it is to find new parts for engines that are going through maintenance? it's incredibly difficult. that's adding costs and the supply chain impact that airlines are feeling and that's one reason why you see them narrowing their guidance at delta when it comes to the full-year earnings. >> phil, appreciate that. busy morning as always.

phil lebeau on autos and the airlines. as we go to break take a look at the road map for the hour. oil is moving higher after the iaea cuts its demand outlook. where prices might go. >> where to find yield in the market with the cio of one of america's biggest pension funds with over $315 billion under management. >> exclusive with david beckham on all the takeover drama surrounding manchester united. shares sitting nearly 30% off their highs of the year. g owhose deal talks continue. bish still ahead. don't go anywhere. ng punches? -unnecessary! -check reversals? -unnecessary! -time sheet corrections? -unnecessary! -unentered sick time? -unnecessary! -go! -unnecessary! -go! -unnecessary! -when you can take this phone, you'll be ready.

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get way more into what you're into when you stream on the xfinity 10g network. welcome back to "squawk on the street." the international energy agency cutting its forecast for growth and oil demand for 2024 saying the middle east is fraught with uncertainty. in the u.s. gas consumption fell to two decade lows based on data from september. joining us at post nine, rbc markets managing director head of global strategy, good to have you on a day like today. so have your views about the trajectory of oil changed? >> we have to watch what happens in the middle east. i mean, the real question is, will this war expand beyond gaza? will we see key players like iran involved in any type of expansion of this conflict? the oil market is watching very closely what is happening in a region which is still the most

prolific production zone. >> without the more blatant iran involvement here in this current war does it matter for oil prices? >> this is an interesting question. even if we don't have the expansion of fighting or air strikes on iran, there's going to be pressure on the white house to tighten up iran sanctions. exports have risen to five-year highs. they're at pre-2018 levels. will the white house, as they announced they're tightening up price, that's a significant amount of barrels. the macro backdrop continues to weigh on oil. >> what is the price action in oil since the weekend suggest was in the market in terms of anticipated maybe incremental supply from saudi or anything else that maybe is moving around given the situation? >> the incremental supply from saud was a story last week. we had the opec meeting where they announced they were keeping

the policy in place and yet the market was soft because of a gasoline build in the united st states. in the backdrop saudi would be putting more barrels on the market as part of a broad reset with the united states and israel normalization. that looks like on hold for now. the question is what's going to win out this year. this broader concern about the macro backdrop, potential demand softness, or questions about the security of supply. >> meantime i'm curious to know what you thought of exxon pioneer and what that does to the giant ability to be nimble in a global economy that continues to be uncertain? >> the shale play as we look at the market what is the role of shale in balancing supply? shale has grown. u.s. production has been on the rise. the conversation comes back to what is opec going to do? >> what is the saud policy going to be? opec and saudi remain in the driver's seat.

>> what about on the demand side. we've been talking about on supply r demand forces changing too? >> the number last week on fwl gasoline did catch the market by supply. is that an indicator or is it a story about refineries? refineries running very hard to produce diesel, other products that are in a lot of supply-demand and the question is, is there too much gasoline as a byproduct of that? we're waiting to see really was the build from last week indicating a significant slowdown in demand in the united states. >> the api invoking the idea of demand destruction right in gasoline, but we just barely touched $4 a gallon and seems we've been there before. >> we have. there is a lot of gasoline on the market. refineries have been running had hard because there has been demand. the question is, what does the data look like this week from. we'll look to see gasoline data,

11:00 for the crude inventories. that will give us a sign of where we're headed. >> opec did raise their non-opec supply forecast. is that material? is that a marginal number that's important? >> it is important. i mean, u.s. production has been growing. that has been a story. it leads to the question about what is opec going to do next year. the saudi unilateral cut has been extended through the end of this year. if it's a softer q1 will that cut extend beyond this year. >> your guess is? >> my guess is if we are still concerned about the macro backdrop, still concerned about demand it's a significant chance that saudi cut rolls over. >> you're a middle east expert here, and i'm just curious what you think happens to saudi arabia, the u.s. relationship with saudi arabia from here, the israeli relationship with saudi arabia, that was such a sort of swing factor in the geo political landscape. >> the u.s. is still trying to

get the israel side of normalization to proceed. it was interesting over the weekend. >> the saudi statement didn't help. >> it's difficult to have this process of normalization continue alongside a war. what happens in gaza? what happens over the next couple weeks and months? that will determine, i think, any hope for a reproach. >> thank you. >> thank you. meantime another interesting day of testimony in the trial against sam bankman-fried. kate rooney was there and will join us with headlines later this hour. 4375. don't go anywhere. know. like...where to find the cheapest gas in town. and which supermarket gives you the most bang for your buck. something else that's good to know? if you have medicare and medicaid, you may be able to get more healthcare benefits - through a humana medicare advantage dual-eligible special needs plan. call now to see if there's a plan in your area - and to see if

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amazing team that will guide you through the right steps to be successful. and that's what bank of america was for me. israel-hamas war entering its sixth day. the secretary of state there arriving in israel to meet with regional leaders including netanyahu and pledge u.s. support. ellison barber is live on the

ground today. hi, ellison. >> reporter: carl we're on the outskirts of ashkelon not far from the border of gaza. within the last hour or so we were headed down in this direction on the road when we started to see a large number of israeli military tanks and we stopped on the side of the road and watched as in a span of ten minutes a number of them, three or four, just came directly by us, heading into the woods. we don't know exactly where they are going but presumably headed in the direction of gaza. this is the second day where we have seen what appears to be more movement, more of a build up, of israeli military equipment, tanks, headed towards gaza. yesterday when we were driving towards the area of the northern border of gaza as well, we were stopped by israeli military and told we couldn't go further, but

we did see through the trees what looked like at least 100 tanks and military vehicles lined up seemingly in preparation for some sort of ground assault. we don't know when or 100% sure if that will happen, but israeli military commanders, the prime minister, they have said they have moved 100,000 -- hundreds of thousands troops along the border with gaza and one of the israeli commanders just the other day said that they are ready to do what is necessary and to focus on gaza by land, air, and sea. we believe there could be some sort of ground assault any minute now, that it is imminent and we're seeing activity here that suggests that everything is still headed in that direction. if that were to happen a ground assault into gaza is something that is unprecedented in modern times. the concern, this is something we heard secretary of state

aliba antony blinken say, what it could mean within civilians within gaza. millions still stuck inside there because there is a blockade, not a safe exit for them to get out. some of them, many are sheltering according to the u.n. in u.n. run schools an hospitals. we have seen images from inside gaza where blocks and blocks of homes are completely flattened, decimated. if israel does move forward with a ground assault there could be a high civilian casualty toll. we heard secretary of state an tony blink been talk about that in speech and press conference with benjamin netanyahu saying while the u.s. supports israel entirely and believe israel has the strength and the resources to do what is necessary, that u.s.will support them and give them whatever they need to help support them in that direction, we're hearing some booms over here right now, this is an area where there has been -- we've got rockets. rockets are being fired where we

are here. those low thuds of boom, that typically is going to be the air defense. you'll hear a larger crash explosion if we think that it doesn't hit. you hear already and our crew will get down here so they can stay safe, but if you stay with us for a minute we can show you more of what's going on on the ground. how quickly the situation can change in this area because we are so close to the border with gaza. you keep hearing the booms. again, that's like a thud-like boom that tends to be air defense intercepting missiles that have flown oftentimes if they haven't been intercepted you will hear more of like a crash explosion sound. we didn't hear that right now so it's possible that those were intercepted by israel's air defense. this sort of thing the back and forth, the tit-for-tat air strikes is happening just constantly, particularlyin this region and since yesterday when the news broke that the israeli government had formed a unity

government, it feels like from where our teams have been, this sort of thing is escalating. we expect it's only going to get worse from here. we're still hearing booms in the distance and the reality is civilians will be caught in between this likely on both sides. back to you. >> they already have been. thank you. amazing coverage. stay safe, of course. as those rockets fly in israel. ellison barber. marc rowan the ceo of apollo global management, graduate of university of pennsylvania and chairman of the board of advisors for penn's wharton business school is coming out and urging alumni to halt donations to the school until two key leaders resign. at issue, a university hosted event last month called the palestinian right the festival. rowan is urging the university to condemn the hamas attacks on israel. here's rowan speaking on "squawk box" this morning.

>> this is not an issue of woke or anti-woke. this is an issue of right or wrong. this is a group, hamas, that believes that the jews should be killed. read the charter behind every rock you should seek out the jews and kill them. this is what we're talking about. not a political solution or disagreements over how israel has treated palestinians in the west bank and gaza. this is a group that is a terrorist group. the inability to actually say that, is morally confused and bankrupt and some have gotten it right. >> in response to a question andrew asked about ceos and companies being more afraid lately to speak out on issues that are divisive or political. university for its part didn't respond to rowan's demands but did address that controversy over the festival in a statement last month saying we unequivocally and emphatically condemn anti-semitism to our

newly values. as a university we support the free exchange of ideas. this includes the expression of views that are controversial and those that are incompatible with our institutional values. interesting to watch from our vantage point, an investor and leader go activist on a university as the universities have unfortunately become is tions of anti-semitism in th country. more "squawk on the street" when we come right back.

welcome back. i'm contessa brewer with your cnbc news update. the white house said this morning there are currently no plans to put u.s. boots on the ground in israel for hostage rescue operations. officials say hamas is currently holding between 100 and 150 people including some american citizens following saturday's surprise attack on israel which sparked that country's declaration of war. u.n. officials said today more than 90% of people killed by an earthquake in afghanistan

last weekend were women and children because they were more likely to be at home at the time when the quake hits. the taliban says saturday's 6.3 magnitude quake claimed more than 2,000 lives. social security beneficiaries will see a modest cost of living increase in 2024 following this year's 8.7% boost. the social security administration announced more than 71 million americans who received benefits will see a 3.2% increase in the new year. it comes out to about $50 more per month. carl? >> thanks. contessa brewer. it's been a year now since the s&p bottomed with a close of 3577. the index surged 20%. our next guest who manages the country's second largest pension fund expects equities to be mixed. joining us this morning california state teachers retirement system with over $300

billion in assets under management. interesting to mark the anniversary as bull market recovery go, this has been the softest since the '81 crash. >> that's true, carl. a very solemn day. i can't believe i'm following the news stories we've seen. that's what i think the future is going to hold. real uncertainty, geopolitical risks, climate extremes. it's going to be tough for the market i think to move ahead. mostly because of higher interest rates. >> with that backdrop, how do you characterize your appetite for equities and what kind of -- how do you make hay with this environment in fixed income? >> you know, it really is all about asset allocation and diversification. you can make a hedecent return fixed income. while bonds are backing up you can get 5% on the short end of the curve and almost 5% on the long end of the curve. so the curve is flattening which is a good sign for moving ahead, but i agree with what paul said

at the top of the show. higher sort of higher for longer, just high for longer, and i'm going to add, high for much longer, doesn't sound as catchy, but i think interest rates are going to stay up in this 4 to 5% range for a long time because inflation as you saw today is spotty, very persistent. >> chris, that certainly is the intention it seems of the fed, so try to keep rates until inflation is rung out. as a bond investor don't you have to anticipate the possibility that path could be different whether the economy buckles, some kind of a shock, and i wonder if that would make it more attractive as a long-term investor to lock in longer term rates at these levels? mike, you're spot on and you have to do your homework and be in both ends of the curve. interesting high at the short

end and a bit higher at the long end. the belly of the curve is inverted. but it's a time where you've got to be diversified. geopolitical risk is higher than we've seen it in many, many years, and i keep -- i just really want to emphasize inflation while it's lower, as we saw today, it's spotty and just darn persistent. i think by doing your homework, you've got to know your credits. we may actually -- this may be the soft landing. it doesn't feel good, but maybe this is what it is, we muddle along for an entire year and the market stays range bound. you'll have seven stocks do well, but not all the stocks are going to do well. >> have you changed your thinking in exposures to big cap tech. >> sara, we own the market and exposed to big tech, big cap tech, and it's the top weighting in our portfolio because we own the u.s. market as one whole

block. what we changed our thinking on is diversification. we're increasing our exposure to fixed income. we like private credit. the real estate market, private equity market, are locked up right now because of these higher rates. people have not readjusted. we're in equity, global equity and mostly in the large caps. small caps look interesting but don't do well in this high interest rate environment. >> private credit, there's been something of a rush into that area. is that just because at this entry point with yields at these levels where you can originate new loans is attractive or has it been the case along the way, if you've been in that area and confident it can weather the turbulence now? >> i think it can weather the turbulence if you do your homework. i have to emphasize do your credit analysis. you don't want to buy blanket pools of private debt.

the banks have really stepped away from this marketplace after 08, the capital requirements there's a gap in there in the cap structure that gives private investors an opportunity to loan money, asset backed, people are looking at private loans, be senior in the cap structure and get a very decent rate of return. i think i would say fixed income is back, a place to invest and diversify your portfolio. >> we're in this environment now where we got the biggest m&a deal of the year in fossil fuels. the uk is pushing back some of its net zero targets. some of the solar names are flatter on the year. is esg fizzling as a sector? >> i don't think as a sector. i think the has a long-term business risk and something we would pay attention. i would focus on climate change. that is a mega theme going forward and no, it's not fizzling. this is, you know, it's going to take 20 years and that seems

really long. it's going to take 20 years. the consolidation is inevitable an i think this makes better operating companies that will focus in on they have to operate cleaner and figure out what to do with molecules. we need new energy and cleaner energy. that could be using oil and gas. we don't know. these are the people that canp innovate with it and this consolidation pioneer was a really clean operator in the industry and we think it's going to make exxon better. you had two oil companies, now you just have one, and as you said earlier they're better positioned to take on the saudis. the usa needs to lead this change and the shift to a new energy source and new energy, not rely on the world. this is just inevitable and i think it really actually still alliance with the goal of being net zero by 2050 or sooner. we have to do that for the survival of not just our country but the whole planet. i can't say that enough.

>> that's a good take. a lot of moving parts in the energy sector all around the world. good to talk to you again. hope to talk soon. >> thank you. >> "squawk on the street" is back after this. 3w4r50e i

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. another day of testimony from the highest ranking executive in sam bankman-fried's inner circle. caroline ellison. she's back on the stand. kate rooney joins us with more outside the courtroom. good morning. >> reporter: good morning. she is on the stand. i got out of the courtroom behind me. over the past two days we've heard an explosive testimony from caroline ellison, former head of the hedge fund and his one-time girlfriend.

she arrived a bit of a change from yesterday. she showed up in a hat and sunglasses hiding her face. not today. no hat. holding her head up high. the defense kicked off cross-examination 3m. they're going to try to poke holes in what she told the jury yesterday. it is to have a slow start, guys. they're going through her job role focusing on her wanting to be the sole ceo of that fund and going through the lending agreements. to fireworks yet. bankman-fried has pleaded not guilty to seven counts of fraud and conspiracy. the defense attorneys tried to say what bankman-fried did was bad risk management and not fraud and in part have tried to shift the blame to ellison. the defense team hasn't hit any home runs so far. other cross-examinations we've seen, the judge has scolded the attorneys for bankman-fried for repeating questions, told them at one point to get to the point during some of the questioning around another witness. the ftx co-founder gary wong. in emotional testimony

yesterday, guys, ellison said bankman-fried was very much aware of the hedge fund ilalame sigh phoning money. she broke down crying on the stand yesterday describing a sense of relief when the two crypto companies ftx and alameda filed for bankruptcy in 2022 she said she felt a sense of relief, quote, that i didn't have to lie any more and said she had been living in a constant state of dread every day. there has been some awkward tension between these two in that courtroom. they have avoided eye contact. ellison has pleaded guilty and testifying as part of the plea agreement. back to you. >> it's pretty damming for him her testimony. what does this mean? what happens next? >> so her testimony you also heard an almost identical story from gary wong the co-founder and another top executive, it is going to be tough sledding for the defense team here. this is their big shot at cross-examination and they've

got to make up some momentum here. it's on the side of the prosecution and they have to poke holes in the story. she gave emotional testimony and they have a lot of uphill climbing to do in terms of convincing the jury here that sam bankman-fried did not know what was going on. her testimony has is focused on being very much involved in the day-to-day operations of his hedge fund, which is a huge part of this alleged fraud. >> keep us posted from the courtroom. kate rooney, thank you. up next, an exclusive interview with soccer legend david beckham. what he told me about all those takeover talks on manchester united and his possible involvement in a deal. you'll want to hear what beckham has to say. (swords clashing) -had enough? -no... arthritis. here. aspercreme arthritis.

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dade beckham back on top as netflix hits number one on netflix. authentic brands is the company behind the series production. they also own co-own global rights to all the beckham brand. i sat down with jamie salter along with beckham to discuss the pair's long-term relationship, but first we had to dive into beckham's expectations for manchester united and whether he would serve as ambassador to a sale in the near future. >> at the moment there's been no

discussion of that, but everybody knows i'm a manchester united fan and i've been very vocal about the situation that is happening at manchester united and that's been happening for a number of years. you know, obviously, i grew up at manchester united from a very young age. we have a lot of stability. you know, the same manager, sir alex ferguson, and the same owners. now, obviously over the years, manchester united will always be manchester united. they'll always be one of the biggest clubs in the world. now we need to get back to that for the fans, for the players, for the coaching staff, for the manager, because at the moment there's no stability. and we need to get the talk back on the field rather than off the field. >> you want to see it sold? >> i want -- i want to see an ownership group that will take over that actually will now take it back to what it should be. you know, i'm not saying the past owners have done a bad job because we've still been very successful on the field and off the field. but for me, it's the right time

for somebody else to take over. >> but so it not true that you're part of the qatari deal somehow? >> at the time there's been no discussion with that. obviously, i've had a long-standing relationship with qatar because of my involvement with psg when i played there and we won the championship. so, obviously, there's going to be some connection there and people talking about my involvement in manchester because you put the two together, myself, manchester united, plus psg, and, you know, there's a connection. so, people will obviously be talking about that, but there's been no discussion at the moment. >> all right. that's some news. how likely do you think a deal is? for them to get it? >> i think, you know, something's going to happen. i think there will be a takeover. i think it's the right time. you know, i think we all have our own opinions on who we feel should take over, but in my opinion, it's whoever cares about the club the most and that is going to take it back to where it should be.

>> some news there from beckham on manchester united. there had been a report he would be serving as ambassador to the team if the qataris were able to win this deal. this stock has been way off the highs. about a year ago, november of 2022 when the family actually said that the team was up for sale. the stock spiked and it's been a -- almost a year now of ongoing negotiations, both parties are at the table in terms of buyers. but no decision on whether that sale happens. beckham fully supporting a sale being done, though. he says they need to have some stability to the team. >> $3.3 billion market cap. i guess maybe that's not inclusive of everything. there's probably some embedded tax. it sounds like a low number. i don't know if it's full ownership of the actual franchise as well as as the marketing -- >> you're talking about the market cap -- >> of the public company. >> of the public company, which is not the full company. >> exactly. >> it's family owned. >> this is sort of the ride-along to the value -- >> this is how we can publicly

follow it. and we saw it. it was up sharply, the stock almost tripled when the news first came out they were willing to pursue a sale. meantime, indices are lower, but a little action in energy and in information technology. some of the faang names including meta posting some highest prices of the year so far. explain some of the nasdaq's in.en arrows, up about 19 pots "squawk on the street" continues after this. don't go away. is it possible? with comcast business... it is. is it possible to help keep our online platform safe from cyberthreats? absolutely. can we provide health care virtually anywhere? we can help with that. is it possible to use predictive monitoring to address operations issues? we can help with that, too. with the advanced connectivity and intelligence of global secure networking from comcast business. it's not just possible. it's happening.

good thursday morning. welcome to another hour of "squawk on the street." i'm sara eisen with carl quintanilla live from post 9 of the new york stock exchange. today secretary of state anthony blinken arriving in israel. we're live in tel aviv with the latest on the ground. a member of the elite military turned venture capitalist. adam salipsky, as amazon faces increased regulatory jute any and increased competition. and more from the sitdown with david beckham. the look inside the signing of messi in miami, and new deal with authentic brands and jamie salter. we'll kick it off with the markets following today's firmer than expected inflation, cpi reading. where does that leave the fed and the markets? joining us