good morning. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with andrew ross sorkin. joe is off today. okay, day two of the week. we are looking at some red arrows this morning. this comes after gains across the board for the equity markets. dow is off 55 points at now. the s&p futures is down 8. nasdaq indicated down 22. let's look at the treasury market. it looks like the 10-year treasury is yielding 4.75%. the 2-year treasury is above 5.1%. the 30-year treasury is below 5% at 4.9%.

in the meantime, let's talk about the price of bitcoin. it has been volatile. shot up yesterday in a big way and pulled back after blackrock denied the report, becky. coin telegraph saying u.s. regulators approved the application for the spot etf. everybody cheered and went crazy. coin telegraph later retracted the story and conducting an internal investigation into the inaccurate report. blackrock reported the application is still under review. crypto markets have been waiting news for spot coin etfs which are expected to drive investment in the sector if approved. if because we still don't know. just because blackrock and fidelity are asking for it, doesn't mean the s.e.c. has to give it. do i think there is momentum? sure. >> it doesn't lead to the situation. the company that put out the

story is now conducting an internal investigation which makes you wonder if they suspect somebody was doing this and making trades based on the story. it wasn't how it happened. >> was somebody feeding them the information and trying to do something illicit on the other end? >> obviously, this is a market that is waiting for. this. >> you saw the move. >> you saw it come back down. and congress member jim jordan's bid for house speaker is gaining momentum. he won the support of skeptics who opposed him last week. that includes mike rogers of alabama and ann wagner of missouri. he is only afford to lose four republicans and still win the gavel. the survey by nbc news show there is are several supporting him. a vote is expected at noon today in the house. a lot of options over what would

happen if that did not pass. there is talk of other republicans coming into it or giving more powers to patrick mchenry who is the existing speaker in residence. the pro tem speaker. he does not have a lot of powers at this point. they cannot get legislation passed at this point. let's talk about what is going on every night in israel. this comes as president biden announced he will travel to israel tomorrow. nbc's jay gray is joining us from tel aviv this morning. >> reporter: good morning and good midday here in tel aviv. we are in the area with a lot of businesses and cafes and residential areas. normally packed at lunchtime and which you can see there are not as many people here on a week day. it has been that way since the

tension with the iron dome tested overnight and during the day for the ground assault in the next few days. that is something that has been talked about as you know regularly and has not happened to this point. when you talk to those who are out, most are pleased that president biden is on the way here showing support of the united states not only to the people of israel, but to the world. it is a big deal to a lot of people that he would make this trip during a time of war and show that the u.s. has the back of the israeli people. he will walk a fine line. he will talk and the white house said this is part of the stated mission about getting some supplies, much-needed basics into those innocent civilians caught in the fight.

medicine and food is much-needed. that is the humanitarian aid that he wants to speak to as he makes this trip. you have two ends to gaza. the equipment and preparing for the land assault and that is something that they have been training for and you have up at the other end with the rafah border crossing with thousands who have gathered. 600 foreign nationals looking for a way out. all of those humanitarian aid supplies looking for a way in. right now, neither endof the strip is budging at this point. a lot of people are anxious to see what is going to give next. >> jay gray, we appreciate it. before you go, i was going to note behind you and you commented on this at the top.

it seems so -- it looks like things are moving more normally than before. is that even possible? >> reporter: yeah. i think people have the shock which has worn off. things are moving a bit more like you expect. nowhere near or close to the volume. a lot of the businesses are just closed. they are not open for business. as you move into different pockets and different parts of the city, you find that to be more apparent. buses are running. cabs are out. you don't see a lot of -- as the bus passes by with awe few peop inside. >> jay gray, thank you for the report. stay safe. we will talkin to you soon. we are watching shares of merck this morning. the fda approves expanded use of

the keytruda for lung cancer in patients. andrew, this has been happening over the years. keytruda approved for more and more cancers. it is something that is seen as the top quality of going after it and approving it for more things along the way. >> that's a good thing. more than a good thing. a great thing. >> shares this morning are up 88 cents. and nelson peltz has built a stake in an insurance company. this time at allstate. the report shows allstate has hired investment bankers to see how to handle peltz. allstate has not raised premiums fast enough to cover losses by paying out on natural disasters like wildfires and inflation has

made it harder to replace costs. carl icahn did not publicly push for board seats or other changes two years ago. what nelson will do next is a big question. he is keeping the investment banking business in business at the moment. when we come back, we have earnings alerts for you. we will hear from johnson & johnson and bank of america and goldman sachs. these are all happening this morning. we have other names out there, too. after the johnson & johnson report, we have a first on cnbc interview with the cfo joe wolk. you are wahisqwk b" tcng "uaox and this is cnbc. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com.

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earnings season rolls on. we have more big names set to report today. including the big banks. netflix and tesla are on the docket for tomorrow. i want to bring in kari firestone. the chairman and ceo of areaus management. kari, talk through what is happening in the economy right now. i think you are more outspoken on this than most people i hear from. a lot of people are waiting for the recession. you don't think it will happen any time soon like the last year or so.

>> hi, becky. with unemployment as low as it is and under 4% at 3.8%, it is very hard to go into recession. there are too many people working. they are earning money and spending the money. that has been true for a year now. we also see that while there are some places of soft necness, wi hou housing, it is not the demand has gotten lower, but the costs are increasing. it is not as we are on the brink of recession because things are cracking. that hasn't happened yet. something could happen. it is more business as usual. if we keep moving inflation down, there's no reason for the fed to raise rates more than once. that seems unlikely. we are most of the way there on the interest rate front.

people are working and still spending money sdp. >> having said that, i want your take on the big banks we heard from so far. i think you have been thinking the muted response to the banks earnings is better than expected is probably the right response. most people would say if we don't like the banks, it is because we worry we are headed into recession and that will mean a lot more bad loans for the banks to come as part of this. you don't think recession is here, but not impressed with the big banks. lay out why that is. >> the banks trade for long multiples. between six and ten times earnings. one would say these are attractively priced. that has been true for years. what is difficult is bigger is not necessarily better. it looked for a while last march when the smaller banks were failing that they would be the beneficiary of the banking

system and people would flock to which they did, but loans have not picked up as interest rates have gone higher. the demand for credit has gone down. there's lots of private credit opportunities that all kinds of borrowers can go to. the banking business on the ipo side has been weak. those are two big businesses. lending is weak. when you talk about the i po market, it hasn n't been there. where is the business coming from? they don't get more deposits. the depositors are asking for higher interest rates. that's a problem across the landscape in banking. they can't give people very little money on the deposits. they are demanding more interest. that hurts earnings. >> you wouldn't be a buyer of any of the banks or you must be watching to hear what they have to say today? >> yes, of course, we're

listening. they are a bellwether of how the economy is doing. you can learn a lot from the last ratios and how much of the balance sheets seems particularly stable. we think charles schwab is attractive. that is a stock that has really suffered the last year or so because people shifted their money out of low interest rates into higher interest rates. of course, they do with that cash sorting which is a problem for charles schwab. we think we are at the end of that. that is growing its asset base. >> kari, brian sullivan laid out an interesting stat. you know he does the rbi with the random but interesting fact is if you took out the

magnificent seven out of the s&p, you would be looking at s&p flad flat for the year. those seven have had impressive gains. i know your three big are in the magnificent seven. microsoft, google and the other one? >> amazon. >> those are three of the biggest positions in stocks. are you sticking with that as you think technology continues or do you think the other 493 stocks continue? i guess it is 491 with the two tra tracking stocks in the 500. do you feel they play catch up or does technology continue to out perform? >> it is a very interesting statement. 85% of the s&p return is contributing to the seven. alphabet is the largest holding. it trades at market multiple.

a.i. is helping them. if you look at the 492 other names and average stock is up 1% to 2% this year, there's opportunity in the multiples if the names are lower. yesterday was an interesting day. i think 92% or 93% of stocks in the p s&p were up. that's the first time it happened since june. we need more participation for the market to move higher. if we are not going into recession, and the fed pauses, then we continue to show growth for the fourth quarter and into next year and that means there could be more participation and stocks moving up. you cannot own an entire p portfolio with the fix or six names. they represent a number of our portfolio. we are underunderweight alpha. it crowds out everything else.

>> it is not a reflection of you not liking those stocks. you can't have that much exposure to those few names. >> correct. >> what with do you like outsid that? >> we are positive there is growth in other parts of the economy. healthcare and financials this year. healthcare has opportunities. is protected. some stocks trade at low multiples. all of the midcap names and smallcap names have been hammered. if you look the index, it trades at 13 times index or less. we think there are opportunities and investors should start to look further below those top names. >> what do you like specifically? >> just for example on o'reilly

auto which is a name we have been positive on. this is a stock with same-store growth. you know there's difficulty buying new cars with interest rates and o'reilly does a great business with the parts business and auto repair. salesforce is a name we like because it is a largecap name, but had a tough 2021 and 2022. it is starting to perform better as they seem to recognize they need to cut cost and focus business. the software business is starting to come back for them. it was really weak for a year and a half. we like a name such as ftv. that is an industrial. it is a company that has a variety of applications for technology and engineering in healthcare and industrial.

you see that as positive. there is a range across the spectrum. >> perfect. kari, thank you. we'll talk to you soon. >> thank you, becky. coming up on the other side of the break, data from the census bureau showing work from home rates have fallen to the post-pandemic low. we will have details about that coming up. later, an an in interview w anchrtal swaz on m&a and more as "squawk box" rolls on.

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welcome back. johnson & johnson just reporting earnings. the stock is now up 1.5% after they came in with earnings on adjusted basis of 2$2.66 a shar. that is 14 cents better than the street was expecting. revenue was up 6.81% to $21.35 billion. that is ahead of expectation. if you look at the guidance that the company is offering, this may be the biggest reason for the jump you are seeing in the stock price. the guidance is higher than they had been given before. they are saying because of strong and growing demand for the cancer treatment and drugs like carvital and because of the stronger demand for the cancer treatments, they are looking at additional expectations for profit. the full year is adjusted profit

of $10.07 to $10.13. that is compared to $10 to $10.10 a share. if you look at the street expectations, they were $10.03. this is a bit higher than they had been expecting for the year. the stock is up 2%. we will breakdown the quarter with johnson & johnson cfo joe wolk. that is coming up later this hour. andrew, strong demand for the drugs and new breakdown with the new johnson & johnson. we will look at what is happening. we will go overall of it with joe wolk with all of it. absolutely. we will have executive edge and come back. take a look at this. i don't know if this is surprising or not. may be surprising if you are thinking about this two years ago.

the push to get back to the office is working. the data is showing fewer than 26% of u.s. households have someone working remotely one day a week. that is down 37% from early 2021. the census data showing that workers are seeking remote jobs at a higher rate than companies offering. washington, d.c. and seattle the and boston and san francisco all had rates near or above 40% t. -- 40%. it is a total shift. the idea of zoom cities during the pandemic and people thinking the population would live in park city, utah or live in different partsmoremotely. that appears not to be the case. remote working is in certain cities like seattle or san francisco. >> i guess that makes some sense

especially companies brought people back may expect you to be there once or twice a week. if you go in more than once a quarter -- >> you have to live there. >> which exacerbates the issue of an 2ffordable housing. the home builder said it was great to move to the locations with more homes built. if you are living nearby, it is not helping with the additional cases. >> this is what steve was trying to do to set up towntowns. >> they had success. >> no question. this was supposed to cat pucatat more. now more workers want remote work than is available. >> who wants a commute?

if you are young and want to meet people, that is one thing. >> you need to number the city. >> if you have kids and you have a couple hours commute, that is difficult. if you are a parent, you are a chauffeur to get kids everywhere. work/life balance. i get it. we will talk about the escalation in the israel and hamas war. as we head to break, let's look at yesterday's s&p 500 winners and losers. >> announcer: winners and losers is sponsored by state street global adivisorse bigges.

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good morning. welcome back to "squawk box" here on cnbc. we are live on the nasdaq market site in times square. we have red on the screen right now. dow off 91.5 points. nasdaq looking to open down 41

points. s&p 500 off 13 points. let's talk about the middle east right now. fears of escalation rise in the middle east and president biden is set to visit israel today for the sign of unity. we will bring in admiral stavridis to weigh in on what this means. admiral, let's start there. what does this mean? how important is this visit and speech? what are you expecting to see? >> it is a big vote of confidence in israel. it is a signal to both the united states and also to the israelis of absolute rock solid support. number two, andrew, this is a warning signal to iran. the president has been vocal in the last week or so pushing against iranian escalation in the region to your original

point. that's why the president, in addition to going himself, has ordered not one, but two aircraft carrier strike groups and 2,000 marines headed toward israel. it is a powerful show of force. >> admiral, let's talk about deterrence. what do you think the risk is right now that this war expands? >> i think it's actually small. i think it's 10%. that's high in one sense. uncomfortable. i think there is an 80% to 90% chance, let's put it that way, andrew, this will be contained in and around gaza city that hezbollah in the north will not lash out. the reason i think that is because the fundamentals. iran doesn't want a war right now. they are not looking for a regional conflict that will completely degrade their own

economy. israel doesn't want a wider war, obviously. they will have their hands full in gaza. above all, the united states really doesn't want a wider war. hence all of the forces moving there. while not negligiable, this is in the 10% range. >> when you look at what is happening in gaza right now and what israel is doing to try to both hold hamas accountable and try to return those hostages back to israel, how do you assess the progress and what does it look like to you? >> i think they have made very strong progress as follows, they have mobilized 350,000 troops. think about that for a minute. just the logistics of that. get ting everybody in a uniform and armed and everybody fed and getting everybody to a new destination. 350,000 on a total population in

the country of 10 million and only 7 million jews in that population. this has been a big undertaking. they he have done it quite smoothly. secondly, special forces infiltrating and moving through gaza. you see flickers of this and, thirdly, andrew, the precision guided strikes. there has been no big collateral damage event. israel created the conditions, as we say in the military, to push forward if and when they choose to do so. i give them high marks for how they are reacting now. low marks for the intelligence failure which led to the initial attack. >> admiral, where do you put the odds of this expanding and becoming more of a regional conflict with another front opening up in lebanon and other areas? i realize that the president going there, president biden going there today, is to show

support, but it feels like someone calling it a bear hug to make sure they use extreme caution and are surgical in the strikes to protect civilians so as to not conflate things. >> that's precisely right, becky. i think that very quietly subrosa off stage with antony blinken, secretary of state, lloyd austin, secretary of defense, and the president himself are privately counselling the israelis to go carefully here. you don't want to flip the narrative at the moment which is the brutality or horror of what hamas has done. you don't want to flip that narrative and end up with heavy-handed israel overreacts. yes, the israelis are getting that kind of quiet counselling

in the midst of the full-throated public support. >> admiral, isn't that the conundrum or trap that hamas has tried to set here? how do you see this playing out here over the next several weeks? by and large, you have to imagine it unless you believe the palestinians and others will end up going to egypt or other places that you could end up having at the same time as this terrible and disgraceful situation that hamas has credatd a separate humanitarian chrrisi? >> this is why the israelis have moved the massive force to gaza, but paused that ground assault. that is why they are using extreme caution in the precision guided strikes they are using. that's why they are doing everything they can to encourage egypt, with whom they have good

relations, to accept the gazan population. that is why the kingdom has accepted willingness to fund all this. i think that will already happen and 600,000 have left gaza city. more will follow. it will give the israelis a chance if they go in and do it in a measured way. >> admiral, quickly. we have to go. the relationship with israel and saudi. how does this play out? i will give you another back drop to this. a number of major american ceos planning to be in saudi next we're with the big conference every year. financial ceos. lots of behind the scenes talking about whether folks should go or shouldn't go. what do you say? >> i say go. i think there will would be a resurgence in the israel-saudi

arabia partnership. there is an inn evident ability of that. you will gain confidence at the carlisle group where our teams are moving forward. >> admiral, thank you. >> you bet. when we come back, congress member jim jordan speaker bid is gaining momentum ahead of the vote. we will take you live to washington next. later, the wharton school's jeremy siegel says the markets are poised for a year-end rally. "squawk box" will be right back. endless hardie® siding colors. textures and styles. it's possible. with james hardie™.

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congress member jim jordan getting closer to become the next speaker of the house, but some holdouts are still there with the vote expected at noon. we have emily wilkins joining us from washington. what are the hurdles? >> the biggest is can he get to 217? jordan has more momentum and lawmakers came out and said we were opposed to him on friday and now we're supporting him. it is not clear at this point he has enough support. there are still a number of

members who have concerns about jordan. we will find out at noon where lawmakers head to the floor to vote on the record. the first time we are seeing that in two weeks since kevin mccarthy was ousted. a number of republicans said they would never vote for jordan last friday are now supporting him and saying there needs to be unity within the republican party. of course, there's also concerns among some of the moderate members. jordan's message last night as he told reporters was that they needed to elect a speaker as soon as possible. >> we need to get a speaker tomorrow and the american people deserve to have their congress or house of representatives working. i felt good. we have a few more people we will talk to and listen to and then we'll have a vote tomorrow. >> reporter: jordan can only afford to lose support up to four republicans and it is clear at this point there are more that oppose him or we don't know

where they stand. of course, without a speaker, the house is not able to pass any legislation which includes the white house request for humanitarian and other aid for israel and we're now a month out from when government funding is set to expire and republicans have to figure that out as well. becky. >> emily, thank you. emily wilkins. in the meantime, let's talk bank of america. they are reporting their earnings. let's get to leslie picker with the numbers. leslie. >> reporter: andrew, shares moving a little higher on the numbers this morning. posting a beat on the top and bottom line for q3. you see shares up .7%. revenue at $25.3 billion. a slight beat on the fully taxable basis. eps beat by 8 cents per share. coming in at 90 cents per share.

net interest income for loan making rose to $14.5 billion. deposits were higher at $1.9 trillion. still one-third above pandemic levels. q4 2019. expect to get attention on the updated marks of the held to maturity portfolio. thr those are $131 billion in unreal eyesed losses. this is the deposits that they accumulated during the pan democra demic. the size and scope of the portfolio has caused the stock price to lag peers. executives say the losses won't ever be realized. credit costs with bank of america taking the provision expense of $1.2 billion. up from q2 and slightly higher

net charge-offs. still lower than estimates. we saw this trend last week as well with the big banks reporting. as for the individual businesses, sales trading revenue up 8% with gains of fixed income and kmotds commodities and equities. investment banking is higher in the quarter. guys, shares up .50%. >> we will dig into those numbers as the program continues. leslie, thank you. when we come back, johnson & johnson shares this morning are up by .75%. it is a gain of $1.17 after the company's earnings report that showed better than expected earnings and sales for the current quarter and also raising guidance for the full year. we will bring you the first on cnbc interview with the cfo joe wolk. that is next. reminder, you can watch or listen to us live any time.

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welcome back bg everybody. johnson & johnson's with its results, and joining us is j&j's cfo. joe, first of all, this is the first breakout of earnings since the ken view spinoff, and the stock is up by .75 of a percentage point. hopefully you can break down the numbers. >> it's a pleasure to be with

you this morning. yeah, we had a strong quarter in 2023, and it's shaping up to be a strong full-year projection. sales were up about 7%, and earnings up about 14%. the way we executed the ken view transaction, and eps is up 19%. we are seeing strengthening in what we are calling the innovative medicine group in oncology, and we introduced a new product, talvy, and stelara performed extremely well. in treatment for depression, we had a great performance. on the med tech side, it is

growing 20% a quarter. we have new products coming out next year, with data readouts. and -- >> yes, that was a strong part of the med tech. >> yeah, we have great data readouts happening as early as this week as the european society for bladder cancer, and later in the coming weeks, we will have readouts on ra, rheuma rheumatoid arthritis. >> if you are so confident about the future, why not raise the guidance even more? i realized you raised guidance, and you are talking about $10.07 to $10.13 for the full year, and before that the guidance was $10

to $10.10, and you raised the guidance by seven cents, and you are not raising it enough to reflect the beat this year, and do you think you will continue to beat in the quarter to come? >> it's a good question, becky. some of the difference is the currency rates, and now it's at 1.05, and much provides a headwind for us. quite frankly, it's a 10-cent raise. what we challenged the teams with is finding ways to invest in commercial capabilities so we can bring the great products to the market even quicker. >> let me also ask you about international versus u.s., and you had strong growth in the united states, i think it was

something like 11% versus -- was it 1% up internationally? is that the strong dollar or something else happening there, too? >> a piece of the stronger dollar, but a bigger part is some of the vaccine revenue, and those sales were minimal, and it was not for profit business. when you see the quarter results, that's the big change in terms of ous performance in the big quarter. >> we heard from pfizer that the covidvaccines are not getting nearly as much demand as anticipated and as we had seen in the past, but it was not a big part of your product line? >> our success was never dependent on the covid vaccine.

>> what is the car vick tea drug? >> it uses the patients' own cells, and it's very intensive. we have two new biospecifics that are easier for patients, and it's recently been launched. we have got the complete regimen. we found out myeloma is a very specific disease to the individual, and we have a number of options. we are hopeful, when we talk to our scientists some of the combinations could lead to a cure some day. >> let me talk about the spinoff of kenview, and you say that raised 13.2 billion in proceeds,

and 180 million shares of that stock that you kept, and that gives you flexibility to do what? you can sell it to raise funds, or what do you do with it? >> at the time of the tender offer, we felt good about the prospects -- and still do, about the success they will enjoy. it provides flexibility down the road of investing in our open pipeline, and maybe doing a deal or two or raising the dividend as we have for 61 consecutive years. >> thank you for being with us. and we are looking at kenvue shares -- yeah, and johnson & johnson, thank you. >> thank you. we are going to talk about potential risks to the energy market with rick perry, former

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welcome back to "squawk box" here on cnbc. as earnings parade continues, we

are live in sometimes square. i am andrew ross sorkin along with becky quick. joe kernen is off today. the dow is opening down about 62 points. the s&p off about ten, 11 points we are will call it. the ten-year sitting at 4.763. oil, and we will talk about rick perry about energy in just a bit, but the energy patch, if you want to buy oil by the barrel it will cost you. bitcoin has come down, $28,528. israel destroyed more than

200 targets in gaza overnight, and president biden announced he will travel to israel tomorrow. thousands of people gathered at the border with egypt. megan fitzgerald joins us with more on what is happening on the ground. what can you tell us? >> reporter: good morning. what we know is the secretary of state, he is looking about the safe passage for americans that want to cross into egypt and to get humanitarian aid across the border and into gaza. we know we had a more than six-hour conversation in israel with prime minister netanyahu along with the war cabinet, and among the things they discussed

was opening up the border. the israelis have agreed to develop a plan that would allow for humanitarian aid to get americans to cross safely over. we know there are loads and loads of humanitarian supplies waiting not far from the border to try and get in, and we are talking over 150 truckloads of life-saving supplies to get in there, and it's a race against time. the situation on the ground in gaza gets dire and dire by the day with more than 2 million people running out of food and electricity and needed supplies like water. we know that according to our producers on the ground people are being forced to consume dirty and contaminated drinking water. doctors are warning of the health care system on the brink of collapse, that they are running out of electricity. the only oncology hospital in gaza is warning they only have

48 hours left before they will be forced to close down because they are running out of electricity. we know the death toll and the injured just continues to rise with nearly 3,000 people dead in gaza, and 10,000 people injured, a majority of them, women and children. >> megan fitzgerald from cnbc joining us from cairo. thank you. let's talk about breaking news. choice hotels coming out and launching a hostile bid to acquire wyndham hotels, and $7.8 wyndham, and wyndham stock up 16% with the news. choice said it's making the talk public after wyndham decided to end the talks after six months.

choice hotels says they are surprised and disappointing that wyndham decided to disengage and they said they were in a negotiable range with price and consideration with wyndham a few weeks ago. again, making this hostile bid public after negotiations between the two fell apart. choice hotel stock down 2.3%, and wyndham hotels up by close to 16%, and we will continue to monitor this. >> it's an interesting transaction, and just the cost savings created and the loyalty programs. i wonder if those kinds of programs matter as much for these kinds of hotels, which are considered more middle tier. it's an interesting development and we will keep our eyes on it throughout the rest of the broadcast. in the meantime, let's get

over to frank holland with the premarket movers. >> bank of america shares are up after they beat on revenue and profit, 10% above estimates. and better than expected on the other side of the ledger, bank of america reported 131 billion in unrealized losses. shares are up 1%. the bank of america ceo will join us on squawk on the street at 10:00 a.m. this morning. and johnson & johnson stock up 1%. profit came in at 5% above estimates. j&j reported a $21 billion gain from the spinoff of its consumer unit, and shares up over 1.35%

now, and microsoft is being initiated by loop capital as a buy with a price target of 425. shares are down right now about.25%. and then microsoft has been an out performer in q4, and shares are down right now. andrew and becky, back over to you. >> frank, thank you for that. in the meantime, let's talk markets and how investors might want to think about the conflict in the middle east as well as some of the earnings reports. our senior investor strategist from edward jones, good morning to you. a lot of folks are trying to figure out which way this market is headed as a result. >> yeah, it has been a harrowing

week and a half in the headlines, and our hearts go out to the tragedy unfolding in the middle east. what we say from the market perspective, when we look historically, geopolitical crisis tend to be short-lived in the investment crisis. we do see markets actually out performing and back up above where we saw, you know, when the crisis began. what we would say more broadly, as we entered the last week and a half, we saw glimmers of optimism, and that came as the treasury bond space offered much-needed relief to investors in the weeks prior to the crisis. that was jone good piece of new. we are at an inflexion point of earnings, and the last three quarters have been negative, and

could be the first positive quarter. >> we have seen nice earnings reports, and i don't want to be negative nancy here, and the real question is what you think these earnings reports are going to look like 12 months from now, and that's the part harder to figure out, even putting aside in your head, if you can, what is happening in the middle east, and if you believe or don't believe a recession is coming in 2024. >> what we have seen is a tremendous three quarters of 2023, and we have seen that above trend growth, and not negative growth or 0% growth, but still growing and at a slower pace, and that comes as the consumer faces more pressures. we know they are facing higher

interest rates and mortgage rates, and they are also looking at an environment where bank lending standards remain tight. there are headwinds facing the consumer which are extremely resilient. we do think that may be welcomed from some perspective from the markets because it keeps the fed on the sidelines, and we see some of the inflationary pressures, especially core inflation starts to ease. we think it will not come as a surprise. there's going to be a period of slowdown in the second half of 2024, and we think that's a credible scenario, and it also coincides when the fed will start to signal the rate cuts they have been talking about in the back half of 2024. >> what would you be buying right now? >> we continue to see a broadening of market

participation. we think the valuations are pretty compelling outside of cap technology, and not only in the cyclical parts of the market, but areas like small caps over time. then, of course, on your bond portfolio, we think a little longer duration cost averaging in over the next few months ahead of the potential pivot from the fed is a compelling opportunity. broadening in equities, and the artificial intelligence technology space, and we are waiting for better valuations. >> appreciate it. thank you. >> thank you, andrew. this choice wyndham back and forth, this choice hotels now with its hostile offer, really interesting reading through the tiktok on it. choice first send the letter to

reup wyndham and offered $80 per share, and they raised the proposal to $85 per share, and then the final offer was $90, and 55% cash and 45% choice stock. in september, the two were still talking about this but then they cut it off. >> i don't know what kind of regulatory problems they would have, but in august the stock was trading basically close to $80. >> yeah. >> and you go back, and 77, 78 bucks in the end of the july, so if you are the board -- >> you think it's your best -- >> if you are the board of wyndham and you are sitting around going okay, the first shot across the bough was $80 -- you said they came in april, right?

>> yeah, april of 2023. >> in april of 2023, stock is looking at $60, and $80 doesn't look bad. by the way, 68 bucks, in the middle -- or 66 bucks in the middle of april, was, i don't want to say an all-time low, but on a relative basis, you look at the stock in five years -- will, five years is a different story, but one year was low. i don't know. this is clearly the beginning of something, but -- i think this has to be a 95 or $100 deal if you are going to do it. >> wyndham shares at 80 bucks, and up 15% on this news. wall street betting the same thing. when we come back, the crude market on edge as the crisis in the middle east grows and could eventually endanger crude flow. we will speak to rick pey,rr

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risks to the middle east oil reserves could present a potential problem the longer the israel hamas war goes on.

and joining us now is rick perry, and he served as the energy secretary under the trump administration. thank you for being here today. obviously the situation in the middle east has a lot of people concerned about what it means on a humanitarian level, and we are watching it from a financial perspective with what it means for the oil markets. what is your take on this? >> exactly. when you think about what this administration started 2 1/2 years ago, sending the message to the fossil fuel industry, stopping the canadian to the texas -- the keystone pipeline, and even of late, shutting down major areas in alaska that the

people in alaska had been counting on, and all of that, becky, sends a powerful message that we don't like the oil and gas industry, and we are going to transition with exspa dishen, if you will, to all of these renewables. we saw in texas where you start relying too much upon these renewables where your reliability gets put in jeopardy. you have bad messaging and bad regulatory messages out of washington, d.c., when you have what is happening in ukraine, when you have that complicated with israel and that tragedy that is going on there, and the messaging to the iranians. this is key, i think. the messaging to the iranians, we will let you have the $6 billion and let you go forward on your programs over there dealing with the nuclear power,

and we know what that turns into, it turns into nuclear weapons, and all of that collectively really puts the oil and gas industry not only in jeopardy, but very nervous, so instead of sending a good positive message to our friends, which from my pertive, our friends, the fossil fuel industry, the oil and gas industry, you are sending messages to our enemies that is shoring them up. this is not only a dangerous messaging, it's dangerous policy that is putting peoples' lives in jeopardy around the world. it's also driving up the cost of power, cost of energy and the cost of gasoline. all of that together, you are enriching your enemies and causing, what should be your friends, to suffer economically. i am, obviously, not a fan of

that. >> we are looking at wti trading just below $87 a barrel. we have seen it pick up 6% on friday, but oil prices were down before that because of concerns about demand around the globe, and are you surprised to not see the prices higher at this point given all that is going on? >> to be honest with you, i can't put my finger on that. at the end of september, it was a 92, $93 a barrel, and that's not a snapshot in time. we have wars going on that affect the production of oil, obviously what is going on with ukraine and russia, and in the middle east, there have been no events that disrupt the middle eastern production. that has been a blessing, but, who knows how long that goes on.

you have a very unstable region with hamas, with the iranians, and with other bad actors in that area that could disrupt the production very quickly. >> the other thing that we have seen is just this past week or so exxonmobil buying pioneer resources and making a big bet in the basin in texas, and we spoke with dan urgan yesterday, and he said the difference this time around. the united states is now the top producer of energy, so we are in a better position than we were 50 years ago when we were so reliant on middle eastern oil. there does seem to be just some real money that is going to be put to use in terms of making sure that that is continued to be shored up, you know, and exxon, again, betting on fossil fuels and continuing with the

biggest purchase they have done in this century. >> yeah, and dan is a brilliant futurist, from my pertispective the brightest in the oil patch of knowing what will probably happen in the future. american technology is why we are where we are now. it was our ability to stay focused, george mitchell, and what he did with hydraulic fracturing, that changed the world, literally. america is sitting in a good position, and with that said we have to have an administration that support the industry and understands that american energy independence is very important to the future of this world, and not just to the united states, and that's not what we hear. we have an administration that is driven by the radical left

environmental extremist that says let's do away with tpfossi fuels and go to the renewables. until you see small module reactors, and we are years away from the educational process that this is walkaway safe technology, and until that happens we are going to be continuing in the conundrum, if you will, with those that drive the climate and that threat, which is not, but they won the public debate and it's the education that matters here. >> do you believe the u.s. is energy independent? >> yes, we are -- well, we were. let me put it that way, until this administration came in and said, you know, we don't like

tp fossil fuels and we are stopping the pipelines -- >> we export more than we import, correct, even now? >> yep. we are importing a substantial amount of it, too. that's a very fluid market out there. >> before we let you go, i hope you would weigh in on the uaw strike, because this is related to future of automobiles and future of evs and future of combustion engines. you saw what is happening at ford now. what is your take? >> yeah, i think those workers, number one, they understand that this out of balance focus on all electric are moving so dramatically towards electric will really impact their livelihoods, and so again, what

historically had been partners to the democrat party, and partners to the biden administration, i think they may be looking -- they being the workers, are looking over their shoulders going, wait, is our future employment going to be negatively impacted by all of this push to go electric, and go electric way too fast and without thinking about the impact on infrastructure, charging stations, and all the different things. so an interesting balancing act by the current administration and a long-time partner politically. >> okay. >> secretary perry, thank you very much for joining us today. we are going to leslie picker right now. goldman sachs numbers just out. >> yeah, eps coming in at 547

per share, and that's a decline from the same quarter last year. that there an 828 million impact in the earnings from a few selected items as well as small hits from the sale of personal financial management. goldman, if you recall, they announced the sale of the sepl sky to a consortium. banking and markets, though, generated revenue of $8 billion for the quarter. beating estimates by a billion for this division. it was also 6% higher than a year ago, and much of that was driven by leading roles on three

major ipos in september, and they were offset with fewer deals completed in the third quarter. and the ceo said in the release, i also expect a continued recovery in both capital markets and strategic activity if conditions remain conducive, and hopefully we will hear more about that on the call today. the firm had a financing revenue quarter, and there was revenue from asset and revenue came in, and a lot of it was due to losses in largely real estate assessments and net losses in public equities, and the management fees were up 7% due to higher assets. we did see inflows during the quarter, guys. >> thank you for helping break

that down in real time. the stock has not moved much, marginally down right now, and we will be getting more reaction in a moment from this morning's big bank earnings. we will talk about that, becky, in just a little bit. also, we will talk about human jobs. the vice chairman of corn ferry. "squawk box" returns after this.

welcome back to "squawk box." >> a beat for martin earnings of 6.73 per share, and free cash flow, $16 billion. and lockheed's back order. the u.s. punishes its own

stockpiles, and meeting demand has been the challenge across the industry post pandemic. and coo, frank st. john, says they are hoping for a rapid restoration of security in the region with minimal loss of life of the israel and hamas situation. they don't see any issues with the impact. lockheed shares up 10%, and analyst argued it's unlikely to affect sales materially at this stage for the defense contractors. with the capacity already growing, he wouldn't expect any change to lockheed's projections for the next few years. this is a quarter company.

and executives telling me they are expecting between april and june complicating the entire defense picture, though, is the u.s. government, operating on continuing resolution, and that expires september 17th. if it's all resolved relatively soon, the longer it goes, spending doesn't increase for particular prapograms, and to t extend we are reliant upon that in the financial forecast, that can become problematic. you can see shares of lockheed with the top and bottom line beats up fractionally right now. becky? >> thank you. still to come, we have reaction to this morning's big bank earnings, and ai is the threat to human jobs. the vice chairman of korn ferry will weigh in. "squawk box" will be right back.

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welcome back, everybody. a quick recap of goldman sachs that just reported earnings, and it was a beat on the top line

for earnings. revenue also beat expectations that came in at $11.82 billion, and that stock off by 0.9 of a percent. and joining us for reaction is gerard cassidy, the head of u.s. bank equity strategy. what do you think of bank of america and goldman sachs with what we have heard so far today? >> becky, one of the common themes we are seeing today is the credit quality picture for the banks on friday as well as today with bank of america, and the numbers are very convoluted because of the sale of green sky, and, yes, we are seeing normalization but the costs associated with credit are lower than expected. the other big piece of the news, of course, is the net interest income that is a big driver for bank of america is hanging in

there, and it didn't go down as much as expected. overall, the numbers are coming in slightly to better than expected for most of the banks. >> i guess the big takeaway from that is the economy is still hanging in there, especially when it comes to the consumer, and even what businesses are feeling at this point so that means a downturn or recession is further off than some are predicting? >> becky, you are spot on. we thought we would have a slowdown by now, and we built-up the reserves for the banks' models, and we are increasing our estimates for this year as the credit costs lower, and we are moving more of the costs into next year. i would emphasize, this is a normalization process and not a deterioration. deterioration could happen in a hard landing but if we have a soft landing, it could be --

>> the banks under performed substantially from the broader markets. is this a buying opportunity? >> i think it is, becky. you are right. the stocks have greatly under performed and we think it's because of the unrealized bond losses, and bank of america, it's the biggest albatross around their neck. when it comes to if the economy next year is not going into a hard landing or a real recession where unemployment exceeds, you know, 6% or 7%, and the unemployment number creeps up to 4.5% next year, this is a good opportunity to oepwn the banks, and in the last four tightening cycles, that has been the catalyst for the bank stocks to work. >> it's a tight enough needle to

say we are going to have a soft landing in a downturn but not a terrible downturn, and that's difficult enough, but if you have to do the second derivative and say on top of that, it has to be a soft landing and the fed has to lower rates so all the losses on the bond portfolios melt away, as you say, that's trickier. they are not going back to that place. then you would have the continued losses on the back. how do you debate that and figure out where to go. >> now, how to triangulate that, that's a good point. you have to go back to '94, '95. it's a threading of the needle, and the critical part for the banks is they can live with the unrealized bond losses because we know over time they will come back, and the critical factor is the credit and if we have a soft

landing, the combination of those two factors wouldout outwh the unrealized bond losses, and they are under owned by the institutional community. i would say from a valuation standpoint they are very inexpensive. >> the other issue you have, if the portfolio, the bond losses are not a big deal if you can carry that out for longer and longer, and you have smaller banks dealing with the issues of commercial real estate losses. if rates don't come down, they can't refinance those loans either. is it an issue where you look at different tears of banks, big banks versus small banks, or are there banks that are better operators than others, and which stocks do you like the most? >> it's a good question. commercial real estate is obviously a big loan category for the smaller banks in the country, and the banks under $50

billion in assets, and the larger banks, the exposure to commercial banks is low, and what is interesting, though, becky, is the borrowers will work with the banks, and they are working with the banks and the customers, and if the properties are fully leased and it's a issue of higher mortgage values and if the properties are 40% vacant, you have a serious problem. for the banks, most of that problem is in the shadow banking system. in terms of banks to potentially own, bank of america is one of the bigger banks, and some of the bigger banks, bnc and some reporting this week, it's a way

investors could own banks go into the end of the year. >> thank you. coming up, we have a big deal in the hotel business. we will bring you the details. it's a hostile transition after the break. and then linkedin, we will talk about that. and jeremy siegel talking about markets. do not go anywhere. the earnings parade continues.

this is realtime insights. i am here with ey america's vice strapblg de. how are you seeing this play out. >> we are seeing an adoption of artificial intelligence and today's deals, you have more data than time so we are using ai to catalogue and query data to make sure no stone is left unturned. >> what does that look like in practice? >> if you think of target identification. we use ai to understand the full competitive landscape and who is buying who, but it's not just about buying your competitors, and case in point, 2,000 tech deals and many were not tech companies. >> talk to me about how it's benefiting your clients? >> we are able to use advanced

algorithms to analyze massive amounts of data, and there's market preferences and financial performance. these things were never possible in the past. >> thank you so much for sharing your expertise. >> thank you for having me. okay, updating and recapping the news out a little earlier, the hotel news out this morning. choice hotels is making an offer to buy wyndham hotels and resorts at a roughly $7.8 billion takeover, and this

is a hostile deal. choice going public today because negotiations fell apart. you can see wyndham hotel shares up by 15%, 79.15, and choice hotels stock off by 15%. if it were to happen, it would combine two of the largest offerings in the hotel space. choice says it took the bid public after wyndham's decision to disengage in talks after a six-month dialogue. right now the dow futures is down by 72 points, and the nasdaq off by 48 and that comes after a strong day of gains yesterday for the equity markets. you can get the best of "squawk box" in our daily podcast. you can listen anytime. "squawk box" will be right back. . but the same ai-powered security

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welcome back to "squawk box." linkedin announced it cut almost 700 jobs. joining us to discuss this and how to position yourself best against ai is korn ferry vice chairman. this is real and it's especially happening in the engineering world. coders may be the first -- i hate to say it -- on the firing

line here, alan. >> when you think about ai, it's a hot topic. when we think back to the industrial revolution we have seen a lot of disruption in terms of how work gets done, and then we have the internet rev challenge jobs where cognitive tasks are valued. previously, often, innovation challenged jobs where manual tasks were performed. so, yes, definitely, engineers and various others will have to see this as a potential threat for displacement or ideally, a tool that will let them do higher order work better. >> right. but how do you -- how do you decipher between higher order work and what that challenge is? and the reason i ask is, if you are in the coding business, for example, and chatgpt can do a pretty extraordinary job of drafting, especially early code,

with then can get tinkered with, if you will, afterwards, you're a young coder, young engineer out of school. they're going to put you in the job. what you used to do was actually draft those -- you know, that sort of first level of code before some of the more senior folks got in the door and started playing with it. how is that supposed to work -- and if that leveled -- separately, if that level disappears, right, then you have the whole concept of how people work their way up the ladder, what apprenticeship looks like, and ultimately, actually, how smart and thoughtful the folks on the senior levels ultimately look like. >> those are all real dynamics. and the net of it is, we'll have to figure out a different way to develop people whose jobs may be displaced at lower levels of the work flow. so, for example, upscaling those junior coders faster, through formalized training, replacing what used to be on the job training.

so, you know, where there's a will, there's a way. and where there's a problem, there's always a way to address it. statistically, about 19% of jobs are argue apply threatened by or enhanced by the onset of ai in the workplace. that's pretty much the conventional research. so let's look at it another way. 81% of jobs are not threatened by this. manual task jobs other than the robotics component of ai are really not under the gun here. so, over a period of time, yes, we're going to have to find ways to upscale people so they can do higher order work faster, and quite frankly, that does all kinds of things, like promote economic growth, efficiency, you know, i think back to the internet in the mid-90s. remember when people actually printed out an email and then read it and put it in their outbox with their administrative assistant to put it back in and email it out. it took about nine years before

people got to the point where they didn't actually over, you know, over a period of time, do that anymore. so these things enter the workplace, they're threatening, but they don't get adopted instantaneously. there's time to basically adjust. >> allen, i want to have you back on the broadcast so we can continue this conversation, because i think that adjustment is the big question. how you adjust what that's supposed to look like. unfortunately, i don't think we all have the answers just yet. i know you have some, and we look forward to talking to you again very, very soon. >> happy to come back, andrew. appreciate it. we do have some hotel news just out this morning. choice hotels making a hostile offer to buy wyndham hotels and resorts in a roughly $7.8 billion takeover that would combine two of the largest operators in the budget hotel space. choice is offering $90 a share in cash and stock and says that it took its bid public after wyndham's decision to disengage from talks after six months of

dialogue. pace ceo patrick paces joins us right now. let's talk through what happened here. you've been speaking with wyndham and talking about a potential deal for six months, going back to april of this year. you started out at $80 a share in cash and stock, raised it up to $85 in cash and stock, and now come up with what you say is your final and best offer at $90 a share. what happened? then they ghosted you? >> we engaged back in april. we've had a good five to six months worth of dialogue. and in early september, we thought we had a really close agreement on the terms and the consideration and the price, so for about a three-week period, we thought we were going to engage in a little bit of one-way mba, allowing them to diligence our company. and then at the end of september, about three weeks ago, they elected to disengage. so what we really wanted to do

was to have their shareholders take a look at the offer and we're asking the wyndham board and management team to reengage with us, because we feel like, this was a really compelling offer for their shareholders. we think it creates a leading hotel platform that really brings a lot of value to our franchisees and to our guests. and we think it's a real opportunity for both sets of shareholders. >> in your release this morning, you say that they raised some questions about choice stock. i guess that is deal that is, what is it, 55/45% cash and stock. secondly, how you would finance the cash portion of that. so how would you finance that? you would be issuing how much debt? >> we've been in conversation with two bulge bracket banks and we feel confident in our ability to finance the deal at a 55% cash offer. we also wanted to provide the wyndham shareholders with an opportunity to participate in the combined company on a go-forward basis. i think it's important, becky, to realize, these are two really

high free cash flow businesses, with a really high margin, which gives us the opportunity to delever pretty quickly. we've demonstrated that in the past. our balance sheet today is only at a 2.6 times net leverage ratio today. and so we have a very healthy sleet. so we believe that putting these two companies together will allow us to realize these synergies on a very quick path and dlelever the company back t our normal target range. >> patrick, can we talk about the $90/share price. and the reason i raise it is, clearly you went in at $80 when they were at not an all-time low, clearly taking advantage of a particular moment in time back in april, when the stock had fallen quite -- i don't know, quite dramatically, but it had fallen. but then, by the way, was back up at $80 over the summer, practically. and so the question is, as you say, $90 is your final price. i think there's probably a lot of shareholders who have been in

this stock, including this board, that are sitting there going, $90 doesn't make sense. >> i think, andrew, it's important to note that there was a leak in the "wall street journal" back around may 22nd, which really impacted the price of both company shares. but if you look back in the long-term, over the past five years since they've been a separate stand-alone company, we've had effectively a two-times multiple advantage over their business. and so the shareholders have sort of, in their world and in our world, seen that difference in the gap of the earnings multiples that we've had. what we're offering is actually to pay them something very close to our historic multiple, not theirs. so we feel like it's a very compelling offer for their shareholders, and we would like them to reengage in a conversation with us, to reopen the books a little bit, due diligence each other, and see if we can get to a common understanding on price. >> why do you think the talks fell apart? >> that's a question for the

wyndham team, really. we're well advised on what we think the opportunity here is for both us and for them, for both our shareholders and our franchisees. and we really feel like it's a really compelling time to do it. there's a lot of things that are happening in the hotel space right now, where costs for our franchisees are rising. and so by bringing the two companies together, we believe that through our awards program, we have an opportunity to franchise the value of their assets and the return on investment. >> patrick, i want to thank you for being with us this morning, jumping on the zoom call to get us up to date. patrick pacius with a hostile offer for wyndham. thanks for your time. >> thank you, becky. coming up, the wharton school's jeremy siegel joins us next on why he says markets are poised for a year-end rally. "squawk" returns with that after this. wow... we can make this work. it can help you reach them with confidence.

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good morning. another big day for the banks. earnings rolling in from bank of america and goldman sachs this morning. we'll take you through all the numbers. >> and can the house find itself a speaker? we look ahead to today's expected vote in washington and whether the gop can finally come together.

and a big potential deal in the hotel sector. choice hotels going hostile this morning, in a bid for wyndham. we'll bring you the details on that as the final hour of "squawk box" begins right now. >> good morning. welcome back to "squawk box" right here on cnbc. we're live from the "options action" manasdaq market site in times square. i'm becky quick along with andrew ross sorkin. joe's off today. we've been watching what's happening with the markets. dow futures down by about 65 points this morning. s&p futures off by 11.5. the nasdaq down by 44. this does come after a pretty strong day of gains across the board yesterday. treasury yields have been higher this morning, too. and that could explain some of the red arrows when it comes to the equity markets.

the ten-year right now is yielding 4.76%. the two-year, well above 5%. it's at 5.11. >> meantime, another big morning for the big banks. i want to get over to leslie picker who joins us now with an earnings rwrap-up. we've heard from bank of america and goldman sachs as well. >> the market's still really digesting this morning's earnings. both bank of america and goldman sachs showed beats. bank of america has been the biggest laggard among its larger bank peers over the last year. you can see they're down more than 19%, in part, though, due to some sizable unrealize id losses in its cash and securities portfolio. today's presentation showed that figure is now $131 billion. b of a and executives there have said that they never intend to realize those losses. the valuation has matured 13% over the last year as mortgage rates ended the quarter at the

highest level in almost 23 years. the firm said today so those rates also having an impact on goldman as well, amid reporting quarterly earnings of $2 billion, there was an $828 million impact to net earnings from a few selected items, mostly commercial real estate exposure and green sky, as well as and the sale of personal financial management. gold sky extends loans to consumers for home renovations last week to a consortium led by sixth street. operating expenses at goldman were higher due to compensation and a write-down of intangibles. but goldman's banking and markets division, as i was saying, generated revenue of $8 billion for the quarter, beating estimates by $1 billion just for that division alone, and coming in 6% higher than a year ago. for bank of america, sales and trading revenue was up 8% thanks to gains in fixed income

earnings and commodities and investment banking was higher in the quarter despitean overall muted environment. so i think there's going to be a lot of conversations about green shoots. we'll see if at least in goldman's case, if green sky takes over some of the conversations on the call later. >> clever, leslie. we'll see you a little later. let's get back to the broader markets. our next guest says that he likes stocks right now and thinks that equities are poised for a year-end rally. joining us is jeremy siegel, he's professor emeritus of finance at wharton school of business. and professor siegal, first of all, thank you for being here. let's talk through your thoughts on this. some people think, oh, boy, we were due for a much bigger pullback. we've seen the pullback and you think it's over. you think it's uphill from here that equities prices are on the rise. why is that? >> let me tell you why, becky. a lot of people say, look at how much bond yields, aren't they real competition now for stocks? first of all, stocks are just

selling for 17 times next year's earnings. if you take out the tac, it's like 14 or 15. if you go to small caps, it's 11. and i know there's reason why, but those are very low valuations. but more importantly, why have bond yields risen so much? it's not just the fed. it is faster growth than anyone thought. that's good for stocks. you know, promise of ai, the third quarter is going to be a real strong figure and i don't see really any real weakness in it. but more importantly, and i think this is a major reason, bonds have been harmed by proving to be a very bad hedge against inflation. i mean, bonds are great hedges against geopolitical risk, financial crises, but very bad against inflation. we didn't have inflation for 40 years, so everyone sort of forgot about that, you know, bad inflation outcome.

and then suddenly, you know, after the pandemic, it reared its head, and went we looked forward, the next 10, 15, 20 years, people are saying, you know what, there may be more inflationary episodes. do i really want to be in bonds? and we know stocks are really assets, just like real estate are real assets, and i think that's one reason why people have shifted. so bond yields, yes, have come up to be sure, but that's because they've been damaged as being seen as the ultimate hedge against stock risk. >> professor, let me ask you a question. maybe i'm just not understanding this. if you think that there could be more inflation to come, that means that rates would go up even further still. and that's been a big issue. every time yields go up on the treasury market spectrum, you watch equities come under pressure, just as people get concerned. and again, they look to this as being maybe, if you think there's more inflation, that yields will go even higher, that's why bonds are a bad place to be, but ultimately, that could be bad news for stocks,

too. >> i think, actually, inflation a is on its way down, right now. but becky, stocks in the long run, and i've done all that long run data, are excellent long-term ledges. you're planning a 10-year portfolio, a 15, 20-year retirement portfolio, stocks do beautifully against inflation. bonds do no. so, you know, yes, i think inflation is going down right now, but when we look ahead at the deficits and all the rest, could there be another inflationary episode? and then, what do i want to hold? do i want to hold real assets or do i want to hold paper assets? and i think that's one of the reasons why those yields have gone up. >> you're 100% right, at least historically, that over a 10, 20, or 30-year period, that is the case. the question that i would ask is, let's say you're in a different situation and you're looking at your accounts and the balances matter for the next decade. let's just make it a decade. what do you think then?

>> i would still be in stocks. i mean, you're talking about ten years -- >> ten years. ten years. >> you know, if i think that there's going to be some more, you know, i think rates are going to come down, but maybe three or four years hence, there'll be another little episode of 6, 7, 8%. do i want to be in paper assets? do i want to be in real assets? don't forget, we had 40 years -- i mean, from, you know, basically 1980 when we came down after volcker, all the way until the pandemic, where we didn't have an inflationary episode. and that's one reason why bonds kept on going down, down, down in yield, because people said, oh, yeah, they're great hedges against pandemics, anything that you want, except inflation and people forgot about that. they thought the fed would never let inflation go this bad, and they're now as confident about that going into the future. ten years for me is enough time i want to be in real assets.

>> i agree with you, so i have a hard time arguing and playing devil's advocate in this journey, but let me tell you about a couple of other arguments that have been thrown out, just in terms of valuations for right now. there are those who say, look out. we are at very high valuations given some downturn that's expected to come. how much of what you're predicating your thesis on is that we'll have a soft landing and that there's not going to be a big downturn? >> well, soft landing probabilities have definitely increased. you know, it's interesting, if we have a recession, yeah, i think stock prices will go down. but one thing has always been true. they go down too much in recessions. and they prove to be unbelievable buying opportunities. people get really scared and then once -- and listen, we've gotten out of every recession the last 200 years, we'll get out of the next one, and then we'll see soaring -- you're

planning a ten-year portfolio, i wouldn't worry about a recession. if you're a timer and you think there's going to a recession, yeah, i would wait. but you acted -- what -- you're going to play that game or not? you know how hard it is to play that game p. i would rather, you know, concentrate on long run. and as i said, 17 times earnings and that's including all the tech, ex-tex, 15, 14, times earnings, even on a long-term historical basis is cheap. >> hey, professor, before we let you go, i have a question unrelated to the markets. we had mark rowan on the broadcast last week. you've had a long, multi-decade association with the warden school and the university of pennsylvania and i'm so curious what your take is on what's happening on that campus right now and mark rowan's efforts to effectively oust the president of that university as well as the lead trustee of the

university. that meaning she put out a note over the weekend, but i would love to get your comments and thoughts and context and perspective on it all. >> yeah, very difficult. it's not just penn, we know it's harvard. and the truthful is, it's truly of a lot of universities on what's happening. you know, it used to be free speech and then, we get to a situation where certain types of speech are already and others you can't touch them with a 10-foot pole. and do we need to bring more bounce and an actual statement about what can we allow at the universities. yeah, it's very upsetting. this could be a major impact on funding, not just on penn and not just on harvard, but on many many universities around the country. yeah, it's a source of concern. >> are you happy, though, with

the leadership at penn and do you have a message for them about what you think should happen? i'm sure this is the conversation happening on your campus. >> it is a conversation happening on the campus and i think all universities have to re-think how they are going to approach speech, free speech, and put out a definitive declaration and i think you get into this trouble when you sort of ignore some things and not others. and they're going to have to work really hard on this issue. >> professor siegal, we appreciate talking you, as always. and i also appreciate you engaging on this topic, as well. >> can i ask one more question. >> sure. >> this is such an interesting conversation that people are taking. is this a situation where you think universities need to stop going after micro-aggressions and saying that that can't be handled or this a situation where you think it needs to be equally applied for if you feel

safe safe? did you swing too far? >> i remember about 25 years ago, i was at 45 years at warton, and one person called another person a water buffalo, and it blew up into one of the biggest things, the person said it was an insult and the person was expelled, and then finally brought back in, and all of that. and then, on the other hand, you have people coming in with, you know, hateful speech and, you know, advocating violence. and that seems to pass. and you know, why is one blown up and the other sort of passed through and that's why you need a real consistent philosophy and i think that all universities, i don't think it's just penn, i think all universities have to have a philosophy. and some people have even said, you know, the universities

should not make a comment on every geopolitical event. and they make too many comments and then it's, which ones do you want to -- do you make and which ones do you not make? and some people say, maybe the university should just absolutely clear away from that. and -- but it is a tough issue. i'm glad it's being confronted and i hope to bring these donors back to the university and i think if there's going to be a policy that is, you know, acceptable to all, they need to work on it. that that will happen. but that's my hope. >> do you think they can do that and bring the donors back with this leadership, this current leadership in place? >> i think that that is possible. you know, i know the president has already sent another email. i received it that was more apologetic to not -- that we

should not have had the palestinian writer's group here, but we have to be monitoring this and spoke out against the hamas situation strongly. can they do that without, you know, resigning first? i hope so. i hope so. >> okay. professor siegal, we appreciate you, as always, and thank you for addressing this issue, as well. thanks. >> thank you. when we come back on the other side of this, guggenheim partners executive chair alan schwartz will be joining us for a conversation about the markets, rates, and so much more. don't go anywhere. you are watching "squawk box" and this is bc cn.

c'mon, we're right there. c'mon baby. it's the only we need. go, go, go, go! ah! touchdown baby! -touchdown! are your neighbors watching the same game?

yeah, my 5g home internet delays the game a bit. but you get used to it. try these. they're noise cancelling earmuffs. i stole them from an airport. it's always something with you, man. great! solid! -greek salad? exactly! don't delay the game with verizon or t-mobile 5g home internet. catch it on the xfinity 10g network. welcome back, everybody. a vote on congressman jim jordan's bid to become speaker of the house is expected around noon today. the ohio republican has appeared to gain support, but it is unclear if he can clear the 217-vote threshold that's necessary to win the speaker's gavel. joining us right now to talk about the race and everything d.c. needs to get done, a pretty long list, we've got andy blocker. he is invesco's global head of public policy and strategic

partnerships. and andy, first of all, what are the odds that you think he gets through. and if he doesn't, what happens next? what are the other alternatives. >> so, becky, look, i think right now, if you talked to me last week, i would say it's a very slim chance that he had 55 votes who voted "no," but since then, he's dpgained a lot of momentum, and right now it's a better than 50/50, maybe 65% chance that he gets it. if he doesn't get, you're back to square one. you'll have to look, can we find a consensus candidate? i'm not sure there's one out there, and then you're back to patrick mchenry who's in the seat right now. >> and they have to be feeling the pressure at this point. there's no legislation that's been able to go through. there's some huge events that are taking place. the war in israel, funding for ukraine, what's happening at the border. not to mention that we are up against the deadline for another government shutdown if we can't get some budgets passed. >> that's exactly right. the last two weeks, even though it's been embarrassing for the

party to have -- not have a speaker, it hasn't made much of a difference, because the last two weeks, they would have been on recess anyway. but over the next few weeks, as we head towards november 17th, which is the potential government shutdown, as we have the events in israel and the horrific terrorist attacks there, there'll be a need for aid. all of this is putting pressure for them to get their act together, get a speaker in place so they can do the work of the american people, which is actually jordan's message. he's saying, look, just elect me now. we need to get back to work. that's his primary message. >> so what are you telling investors at this point, who are looking at this docket and trying to figure out if we're going to be up against another government shutdown, what that would mean narcotics. >> interestingly, it's strange. it's basically, even though jordan has been in the past someone who hasn't supported a cr, part of his message has been, look, i want to keep the government open. we need to keep the government open. and so so if he's elected speaker, i actually feel very bullish that they'll keep the government open. the interesting thing is, if

they don't have a speaker, that puts us in a precarious situation we haven't been in. you know, what's the powers of a speaker pro tem? are they able to come up with someone else? so that puts a lot more uncertainty in it. so actually, in an interesting way, a speaker jordan actually is bullish for avoiding a government shutdown. >> what do you think happens with the rules? because the speaker, the last speaker, kevin mccarthy, was so weak, because they changed the rules to the idea where one person could call for a vote to kick you out. it's such a thin majority at this point that if you lose five votes, you lose. will those rules be tightened up, or will this still be a pretty weak leadership? >> so there hasn't been much talk out of jordan's speakership about changing the rules. and so it cuts a number of different ways. first, i think that jordan because he's one of the original freedom caucus, he helped create it, he will be given a little bit more room, at least in the beginning. but ultimately, he'll be under

that same gauntlet of, hey, any five members can vote to kick me out of this spot, and so it's going to be in that same situation. look, this rule actually, if you look historically, has been there for some time. it's only the democrats who changed it in 2018, and they mostly changed it because they realized that the political landscape is different. no one would ever bring a motion to vacate back when the speaker was powerful and people were dependent on the infrastructures of the party. today, you don't need the infrastructures of the party to get re-elected. you have social media, all of these other ways to raise money. you can have one person standing up saying, hey, i object. so i think going forward, it would be wise to have that, but right now, we're not sure that's going to happen. >> andy, thank youfor your time today. >> thank you. okay, coming up next, a preview of the cnbc documentary "crypto 911," exposing a bitcoin billionaire, which provides a never-before-seen look into a $3 billion bitcoin heist. we'll show you that and you really don't want to miss it.

you're watching "squawk box" and this is cnbc.

welcome back to "squawk." for nearly a decade, it was one of the biggest mysteries in crypto. who stole 50,000 bitcoins, which would ultimately be worth more than $3 billion from a dark website called the silk road. no one knew until the man behind the crime made a costly mistake. and now a new documentary "crypto 911" exposes never before seen video and the story behind one of the biggest heists in history. eamon javers has this story. >> jimmy, how do you feel after today? wid why'd you steal the money, jimmy? >> a spectacular crime. >> this is going to be a huge

case and there's a lot more money that we don't know about. >> in a small town. >> shocked. i was shocked. i was so surprised. >> why? >> a 28-year-old secret bitcoin billionaire, his private jets, wild parties, and dark secret. >> it was just a surreal feeling. and with jimmy, there were no limits. >> this is the story of one of the biggest crypto heists of all time. >> he's living this party monster lifestyle and with no visible means of support. >> right. >> with clues dating back to the earliest days of bitcoin itself, in a story that reveals a dark truth about the hackers and coders who created cryptocurrency in the first place. >> a huge amount of bitcoin is leaking out of the system and you have no idea where it's going. >> it's a huge question. >> and the man who could have gotten away with it, except for one phone call that led to an abrupt end to a nearly decade-long manhunt. >> clark county 911. what is your name, sir? >> it's jimmy zhong, z-h-o-n-g.

>> and that's just a sneak peek in this documentary, irs criminal investigation, the agency that investigated the case takes us behind the scenes and shows us how they cracked this case. we also get a detailed look into their interactions with zhong and a look into his bizarre life. you can check it out now on cnbc.com or scan the qc code for the link to the full documentary, which is about half an hour. >> just, though, i don't want to give too much away, but give us a little bit about who this guy, jimmy is, at the center of the story. >> yeah, so at the beginning of the story, gyjimmy zhong is a local party boy in athens, georgia. he's a former university of georgia student. he majored in computer science. he's hitting all the bars. he's that guy that's hanging around the college town a little too long, getting into his late parties, still partying at the college bars, buying rounds for everybody, taking people on trips, buys a lake house, and

someone steals from him and he calls 911. that's the 911 call you hear at the beginning of the documentary. and then things unspool from there. and his life really unravels. and in the end, it's really the all-too-human story of a hacker who had access to multiple billions of dollars, thought maybe it might change his life, and found out there are some things that money just can't buy, andrew. >> eamon, we are looking forward to that. it is quite a project. i know you've been working on it for quite some time and i hope the audience makes its way to find it and view it. thank you so very, very much. we are seconds now away from september retail sales data. i should say, about 45 seconds away from that data. before we get there, let's show you futures real quick. right now, things are opening down about 67 points down on the dow. nasdaq off about 56 points, the s&p 500 off about 14 points. the ten-year note, let's show you the ten-year, and the two-year, but 4.765, the two-year at 5.126.

and our good friend rick santelli is standing by at the cme in chicago. you've got a little bit of time, because i know you've got some thoughts ahead of it, rick, and then the numbers, of course. >> yeah, well, my thought is, we're staircasing in interest rates. all treasury yields yesterday traded higher than friday's highest yields. today, they're trading higher than yesterday's highest yields. that's called the staircasing, when you're a technician. and it means that the markets are what i call guns hot. you want to be very careful. interest rates are on the move. and that move is higher. retail sales hitting the wires for the month of september. expecting up 0.3 on headline, more than double, up 0.7%. to find a higher number than that, you have to go back to, when we were up 2.8, although we had another 0.7 read in may. if we look at it in ex-autos, still very strong. up 0.6. up 0.6, well, in comparison, if you look at july, july was up 0

p.7, so you could see that's where it comps. you've had back-to-back up 0.6. if you strip out autos and gas, it still remains very strong, up 0.6. and if you look at the control group, which goes into other numbers up the economic food chain, it is also up 0.6. now, revisions are coming in. if you look at headline, which was 0.7, last month, 0.6 moves up to 0.8. ex-autos, 0.6 last month moves up to 0.9, ex-autos and gas goes from up 0.2 to up 0.3. and that control number which was up 0.6 in the current read moves from up.01 last month to up 0.2. we have much stronger number for september. august saw positive revisions across the board. yields are moving higher. we're getting very close to challenging for 80 in a

ten-year, currently at 478. it's up seven basis points on the session. two-year, which is moving, but not nearly as fast, which means we're taking some of the inversion out of the yield curve, put more steepening back in, currently trading 5.14, that's up four basis points. so we want to continue to dkeep in mind that all maturities are trading higher than yesterday's yields, and should we close above 4.75 today, you'll see more follow-through on a ten-year for the rest of the week. andrew, back to you. >> thank you, rick. meantime, our friend steve liesman has also been monitoring these numbers, making -- trying to make some sense of -- trying to make sense of it. help us, steve. >> shaking my head here, andrew. this is a wow. i want to give you a little tech here. it was the strong sconsumer spending numbers from june, reported on july 18th. if you look at the ten-year going back to that, that was the

beginning of this surge in bond yields. this re-assessment of third quarter growth that all of a sudden, we were going to pop here in a big way, and we did. and it has been maintained. for context here, the consumer didn't have to do anything in the month of september to still have that 3 or 4% growth rate. now that number is even higher, the way it worked, june came up and it was a good number. july just had to be steady, august steady. instead, it keeps going up. they revised up the prior. this is the consumer that just won't quit for reasons people are just not capable of understanding, and it was not gasoline station sales, which we expected some strength there. instead, it was just, what was it, just 0.6, i think i saw. 0.9 on gas station. people expected more than that, but across the board, i'm looking at relative strength, motor vehicles and parts up 1%. and that was expected, maybe even a little bit light, guys.

retail sales, the internet sales were strong, so we don't have a consumer that's going to quit here. and i just have to wonder how much of a problem that is for the federal reserve. while i do that, i'll look at what happened to the probability of rate hikes. they are a bit stronger for december. and by the way, the new development here is that people are starting to take a small gamble that if the fed doesn't hike in december, it may hike in january. again, those are -- these numbers remain below 50%. but what i'm noticing now is the probability of a hike is now higher in january than it is in december and almost nothing for november. i expect these gdp tracking forecasts are going to be higher as a result. and we were already near 3% on the average. the atlanta fed was near 5%. they may go up further forwards

5.5 or 6%. one other question, there should be a falloff in the fourth quarter. the question is how much of a slowdown there is. andrew? >> steve, thank you for that smart analysis on the fly. appreciate it. coming up on the other side of this, guggenheim's alan he loto will join us live. weava t talk to him about when "squawk box" returns after this. golo has really taught me how to eat better and feel better. as long as you eat the right food groups in the right amounts, that's all it is. it's so simple and it works. golo was the smartest thing i ever did. ♪ (upbeat music) ♪ ( ♪♪ ) constant contact's advanced automation lets you send the right message at the right time, every time. ( ♪♪ ) constant contact. helping the small stand tall. 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

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choice hotels offering to buy wyndham hotels and resorts for $90 a share and a mix of cash and stock. that would value the deal at about $7.8 billion. so far, they had been talking back and forth, it hasn't been working out. choice ceo patrick pacius joined us in the last hour. he said he thought the two companies were close a deal a few weeks ago, but wyndham decided to disengage. now they're bringing that deal straight to the shareholders. >> we believe through direct bookings, lower operating costs, and a much more robust rewards program, we have an opportunity to help our our owners of our franchises really improve the value of their assets and their return on investment. >> again, these talks have been taking place since april of earlier this year. you do see wyndham hotels stocks up. it had been up earlier than this morning. 77.55 is the last tick. choice hotels down by 4.7%.

this is a cash and stock deal, 55% cash, 45% stock. the valuation changes based on the price of choice hotels at any given point. but again, you see wyndham hotels up by about 12%. coming up, can't afford to miss conversation, right now, alan schwartz, right after the break. executive chairman of guggenheim partners. we'll be back with him in just a moment. but as we do head to that break, take a look at shares of johnson and johnson following the better than expected third quarter results and raised guidance. the company's ceo joe woke joined us in the last hour on the program. >> while the quarter was strong, we're even more encouraged about the future. we've got some great data readouts happening as early as this week at the european society of medical oncology, for bladder cancer, for small cell lung cancer. later on in the coming weeks, we'll have readouts on ra, rheumatoid arthritis. so we're very well positioned, not just for the balance of this year but into 2024 and beyond.

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welcome back to "squawk box." we are joined now on set by a special guest here to share his macro outlook and talk about debt and m&a expectations and so many other things.

guggenheim executive chair alan schwartz is here. great to have you back at table. >> nice to be back. >> a lot to talk about. and i always think of you as somebody who has their pulse on the corner office, if you will. the ceo set and something that's going on in the board room. we're watching the markets play out, a whole bunch of earnings reports coming, but i'm curious how you think that translates or not into confidence, if you will. >> it's a good question. i think in boardrooms and in the c-suite, i think that corporations, the large corporates, public corporates kept their balance sheets very strong, unlike lots of other parts of the market. and so now that they're seeing some of the -- they were kind of out of the m&a market in a lot of cases, because of private capital. so now they're seeing a chance to come back in. because they kept their balance sheet strong. at the same time, the macro environment, especially geopolitical and all these other things creates concerns in the

boardroom as to whether now's the time or wait on some of these things. we saw a big drop in m&a activity, when the capital markets tied up for a lot of the private sales, but now you're seeing a lot of, let's say discussions and activity beginning, clearly picking up from the corporate side, that's seeing their opportunity to come in. but, you know, how many of those will get across the line, we're going to have to wait and see. >> does that signal then that there's a confidence that we're not headed into a 2024 recession or soft landing? what does that mean? >> no, no. i find it's very interesting, you know, they're not sure about the economy and personally, you know, i was in the camp that '23, we would not see a recession spbalance sheets to start out. so we didn't expect higher rates to hit consumption right away for a whole bunch of those reasons. on the other hand, and talking to ann walsh, our cio, we keep an eye on what's happening in

the banking and the financial markets. and what's happened is the duration risk that lenders and a number of borrowers took takes longer to be impacted by rising rates, but it's happening. there's a tightening and condition. so we personally, we believe there's a recession coming. now, we don't know how deep. it's hard to know. going back to your question, just to set that up for that. going back to that question, i think that a lot of companies are looking now strategically for the long-term, and they're really not just looking to consolidate, although certain areas are, they're really looking to get the capabilities and the technologies that they need for the very changing environment they're looking at. so a lot of the deal activity will not be dependent on the economy, unless there's some big, you know, disruptive wave. >> how much of the hesitation is just look, if you're a corporate, you've got to answer for the price you pay. you don't want to pay too much and look like a dummy. and if you're being acquired,

you don't want to accept a bid that's too low. trying to get to that feeling of, i think this is a great deal, but i'll have to justify it. >> you put your finger right on it. i will say, it always happens. sellers say, wait a minute, look at my 52-week high. buyers are going, that doesn't count anymore. look, a number of sectors are pretty far down, too. so, i think that, you know, corporations that feel like they have a strong strategic plan -- and let's say this, that have strong backing from their investors on the plan they're on, they're looking to step in now. they've been telling people, they've been waiting, now they're starting to see the sellers come and say, let's be a little more reasonable. and then, look, the one other issue that we all know is anti-trust. that's having a bit of a chilling effect, but the fact that companies that decided to fight this latest anti-trust wave and have won is giving a little more confidence that if the facts really support this, they should be able to do it,

that they'll go forward. >> does that mean the conversation in the board room is saying, so we're in, what are we -- end of october. mid-october. do they say, let's wait a year and see what the world looks like in terms of a political world a year from now? or let's strike now and see what happens? >> i think there's more strike now. as i say, if you've been sitting there saying, look, we really need these capabilities for our long-term, we really need this technology or this -- so a lot of it's not consolidation, because then the consolidation wave, you'll see a lot of stock for stock, but on that side, i think since they've been waiting, they don't know. they don't want to miss the window. >> how concerned should we be if you consider the smart money, that private equity has effectively stepped away from the table, if you will, when it comes to deal making. when you're looking at -- they represented something like 40% of the marketplace in terms of m&a just about a year ago, and now what is it, 25%, something like that. if you think they know something, maybe a great

opportunity for strategics to get in, so far as they don't have competition. but there might be a reason for that, which may not be very good. >> well, no, i don't think that's what's driving it. i think a lot of the larger private equity have new funds, and they're kind of waiting on the financial side of the equation, you know, interest rates are way more important to their deals. and that's where duration risk is. in the private equity wave we saw, which was a lot of different deals, a lot of them were financed by floating rate debt, right? and so there's a lot of those deals from the past, where you're starting to see delinquencies, you're starting to see bankruptcies, and that's part of why i say ann walsh and i say, we think there's already a tightening of financial conditions. and so that group of buyers is more affected by the tightening of financial conditions than the corporates who have been sitting on cash, who can come in. >> when you look at the banking sector right now, i mean, you know the banking sector inside out. you know the financial sector,

as the former ceo of bear stearns, how big are the banking problems that we dealt with in the bring relative to what we saw back in 2008? do we know everything that's out there right now or do you worry about that? >> i think we know a lot. as i think you know, my partner, jim mill stein was advising the fdic. and there was some staggering duration risk taken by a few banks. but he went through the rest of the banking system, and the bottom line of it is that the regional banks, especially, had to take duration risk, because there was nothing else to do. but they were more cautious about it. so the bottom line, of what's happened with rates clearly is affecting their capital ratios, and so, it's tightening their lending standards. but, you know, it doesn't yet seem like it's going to be a real, real problem in the system. again, the thing we don't know, though, is, what's the duration risk in the borrowing community? obviously, a lot of us are talking about commercial real estate, as one aspect of that,

because of what's going on with back-to-work. but if a lot of borrowers were borrowing on a floating rate basis, and they can't afford to take on a new one, then, what's that going to do to the banks? that's the next wave to watch. but it doesn't feel like it's going to be, you know, a systemic type of it's going to be a systemic type of crisis. >> what you said in the beginning struck me. i didn't want to interrupt your line of thinking. >> there's no line of thinking. >> one of the things you said is you said you think demographics is something people don't pay enough attention to. >> right. >> what is it about it that you're focused on? >> very much two things. one, the baby boom generation as it's hitting retirement age, the number of workers of working age is declining. it used to be five 18-64s, now 3.5 going to 2.75. for the last ten, the over 65s

that stayed in the workforce. then when covid hit, they said it's time to retire. there was just a title labor supply than people realize coming into this downturn, number one. number two, a larger percentage of the population that's living on their savings instead of on wages and borrowing, a rise in interest rates is like a wage game for those people. it supports their consumption. demographics are going to have a big impact, the biggest impact i worry about is on the federal budget. >> fair enough. allan schwartz, thank you so very much for joining us. i was going to mention you're participating in robinhood's investor conference which is taking place next week. folks should check it out on the website. if you have another plug, go for it. >> i'm very excited. i'll be interviewing michael shea and hear blackstone's views.

we have hall of fame investors, paul tudor jones, stan druckenmiller, ken jones, all of the greatest ever. condoleezza rice will talk about the geopolitical. for anybody that cares about the investment markets, this concert is a taylor swift ticket. and then the other thing, the thing that makes it really exciting is anybody that buys a ticket and attends, it's a great thing. but at the same time every single dollar is going to go out on the street to those organizations that are helping the people most in need. so it's a great thing and it's a great event, and people should check it out because they'll love it. >> you've been a longtime supporter of robinhood. check it out on robinhood.org. when we come back, we've got top stocks on the move in the premarket this morning. we've also got some takeaways for another big warning from the big banks. 'lte you all about it when we come right back right here on "squawk box."

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welcome back to "squawk box." the biden administration planning to halt shipments from china as part of a package of measures designed to stop

beijing from obtaining cutting-edge u.s. technology to strengthen its military. the rules will expand existing innings port restrictions to include more advanced chips, chip making tools and more countries including russia and iran. want to stick with the markets right now and talk about the banks, about some of the earnings reports we've seen this morning. j&j among them. let's talk about what's working, what didn't in the last quarter and where this should go. let's just go banks first. i'm curious, jp mfrments, we said bank of america this morning and goldman. >> bank of america, really great quarter. strong interesting, really gaining market share. outperforming in trading. they spent a lot of time in the presentation talking about that. strong credit, strong equity,

strong financing business. deposit stability. that's number one retail deposit franchise is delivering for bank of america. >> how do you like b ofa versus the rest? >> wells fargo did pretty well, build capital as well. citi has its restructuring efforts which we'll see. we think of credit positive, whatever jen frazier is doing. bank of america i would say probably always right after j pfrments morgan and wells fargo -- >> biggest opportunity, is it citi or not? it's either a great opportunity -- >> jane is a fantastic leader. she has a good plan. there's a lot of execution risk. trying to cut committees, management layers. she's simplifying the bank. let's see, but so far so good.

>> where do you put goldman in this? can you even say if what happens at goldman sachs has any impact on morgan stanlly anymore? >> the two banks merged. bought the golden child of citigroup and that's delivering for them. having that 50% wealth management, asset management business is very nice to have. goldman does not have that. they went in a very different consumer strategy as we can see from the sale of green sky. they're an amazing leader in investment banking. ultimately when that market picks up -- >> we had alan schwartz sitting in the same seat. when do you think investment banking does pick up? >> they say backlog is pretty weak still. the delivered finance market is speaking up. a good opening in september, but not great. sponsors sitting on the

sidelines. so it's really 2024. >> 2024. but do you believe a recession is in the offing? >> we had a view of recession coming in 2024, we're basically more into the soft landing camp. the banks, to be honest, are very important to that. banks are tightening. that can be banking -- if they tighten quarter. >> ana, thank you for coming in this morning. let's take a final check on what's been happening with the markets this morning, after all the earnings news, deal news, too. you'll see the futures are lower than where we started three hours ago. dow futures down just 101 points. s&p futures down by about 25, and then you've got the nasdaq off by 123. that's been happening as yields have picked up across the treasury spectrum. if you take a look right now, you'll see the ten-year is yielding, now at 4.82%.

the two-year at 5.16%. you're talking about another five basis points on the two-year in the last half hour or so in part because of the data we got about half hour ago. a quick check on the oil. make sure you join us right back here tomorrow. right now it's time for "squawk on the street." ♪ good tuesday morning. welcome to "squawk on the street." i'm sara eisen with mike santoli. david faber joining us from the 13d monitors active passive investors summit. carl quintanilla is on assignment. taking a look at futures this morning. we are setting up for a lower open. dow futures down 100 points after we gained 1% yesterday on the major averages. the s&p futures digesting

earnings from ba