two hours. it's wednesday, october 18th, 2 2023, and "squawk box" begins right now. ♪ good morning, everybody. welcome to "squawk box" here on cnbc. we're live from the nasdaq market site in times square. i'm becky quick along with andrew ross sorkin and joe kernen. good to see you. yesterday the dow ended up for a third day in a row but you saw the s&p slightly lower and nasdaq as well. this morning there are some red arrows as we start things off. right now the dow futures are off by 85 points. the s&p futures off by 15. it comes as treasury yields continue to climb. we were looking yesterday. the 2-year yield was at its

highest level since 2006. so we're going back an additional year than what we have been looking at recently. 2-year is down 5.18. the 10-year note is yielding 4.8% and the 30-year has ticked a little higher at 4.95. meantime president biden landing in israel early this morning and met with israeli prime minister benjamin netanyahu. nbc's jay gray joins us this morning from tel aviv. jay. >> reporter: hey, there, good morning, guys. yeah, the president meeting with benjamin netanyahu as you talked about and later today with the war council. who he'll not be meeting with is his arab allies. there will be no trip to jordan. that was something that was planned there. that was considered a pretty important part of the visit in that the president had hoped to talk about tamping down concerns that are growing right now over this becoming a much wider

military conflict. you know they're already growing escalation alord the border of lebanon. there have been casualties of soldiers on both sides. israel and hesitazbollah on the border there and troops moving in more equipment. that's a big concern regionally and something the president had hoped to discuss. he plans to make phone calls with those who had planned to be part of the summit on his way back to washington,but, again, no face-to-face meeting. that's the result of a hospital explosion overnight that left hundreds dead. you've got hamas blaming israel saying it was an air strike that caused the blast and israel saying it was a failed rocket launch by the islamic jihad that caused the deaths of hundreds there. it's really changed the perception of not only here but worldwide and that's something that has changed the president's visit as well. he was also planning, guys to

really focus hard on humanitarian aid for those in gaza, those who haven't had any food, water, medical deliveries in the better part of two weeks. it will be interesting to see how that plays out in light of all that's going on right now, but the white house has said repeatedly that every conversation he had, every stop he made was going to be dealing in some way with that humanitarian aid, and now that like so much is in limbo right now here. >> jay, we appreciate your reporting as always. i'm sure we're going to be talking to you a lot over the next coming days. thank you. we'll get more understanding of this united story. united airlines shares are over. 365 this time. it was 30 cents above estimates. revenue is in line with expectations, but the airline warned, a, more expense" jet fuel, up 20% since mid-july, and

the fuel bill is going to increase by 11%, the company says, in the next quarter, but also a halt to flights to israel and there may be more that's going to eat into profits. 1.50 to 1.80 and that's versus estimates of 2.06. 2.46 in the year ago period. we're going to talk to scott kirby at 7:45 a.m. eastern. the reason i'm thinking about it, there are signs of some softening domestic travel, and i'm just wondering overall -- i know the retail number was good. it still seems like things are good. we're going to talk to procter and gamble to see if trade is down. >> we had the delta ceo last

week, and he talked about some of the same concerns, the jet fuel cutting into thing, cutting into their profits. when we asked him very specifically are you seeing signs of weakness in u.s. travel, he said no, because i was trying to get to that same point, is this something we need to worry about from a domestic fi picture. the internagtional flights are some of the more profitable ones. the big carriers with international travel are more expensive and much more profitable flights. if you're talking about some of those shutting down, my thought is are you seeing americans not wanting to travel to international places, not just tel aviv? >> united has the biggest exposure to israel, and this will cause capacity to go down. as a result, that is going to be higher costs when you have less

capacity. fixed costs go up when you're flying less. all those things are -- we'll talk to scott kirby about it a little bit later. in the meantime chesapeake energy has approached southwestern energy about a possible acquisition. if the companies combine, they would form the largest natural gas focused exploration and production company in the united states by market value, passing that of eqt. you can see the shares are up just slightly from both of those companies, chesapeake by a few cents, southwest energy by about 1.25%. apparently they've been in talks potentially for months. there's been interest in this for months and shares of southwest energy jumped significantly on this news. carl icahn has sued the board of directors. he told the investor conference in new york yesterday the lawsuit pertained to illumina's

access to grail. we talked about that transaction for a long time, in part because of the ftc regulators around the world were looking at that. they purchased grail despite opposition. icahn pursued it. he fought to keep grail. he said they would divest grail if it doesn't win the legal challenges. the former ceo or what was is also a member of disney, effectively ousted, pushed out by carl icahn. >> right. carl all along has been opposed to this deal, has been very angry about it. it's just an interesting move. he got him out. >> where does the lawsuit take you? >> is steve mcmillan there now? he used to be at striker. >> yeah, he used to be at

striker. >> i'll have to take a look. >> remember, we have -- i don't think it's this one, though, is it? >> jacob chasen. >> is he on the board or am i making it up? >> he's on the board but he's running another company. >> i might be confusing that. >> we had him on talking about that. it's not -- striker -- >> logic. an update right now on the $7.8 billion on a hospital did by choice hotels of wyndham. they reviewed the proposal and felt it was not in the best interest of shareholders. it involves a regulatory timeline and the outcome would be uncertain. it's also concerned about leverage levels. yesterday the ceo of choice told us that they took the offer

public after six months of negotiations because wyndham broke off the top. wyndham said it has discussed concerns with choice but were unwilling to propose any mitigations to address those concerns and that's why wyndham rejected the offer. you can see wyndham hotel shares down by 74 cent. when we come back, jim jordan's first speaker vote fails but he tries again later this morning. we get the latest from jake sherman of punch bowl right after this. former speaker khem joins us live from washington. you're watching "squawk box," and this is cnbc.

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welcome back, everybody. the house is expected to vote again today to elect a new speaker after congressman jim jordan fell short in the first ballot. joining us with the latest is "punchbowl news" co-founder jake sherman. he's also an nbc news and cnbc contributor. any idea what's going to happen today? >> i don't think jim jordan is going to make it. it's plainly obvious for those paying attention in the capital, to be honest with you. the big question is does he go the third round. you have 20 opponents on the first round. he's expected to have more than 20 on the second round. some of his supporters only committed to a first ballot vote

for jim jordan. where do we go from there? if he goes to a third ballot, i think he's going to bleed a lot more support. that's the reality. the next question is this. does the house move, and i think they will, and we reported this this morning in our a&m edition that it will move to install patrick mchenry as the speaker until the end of 2023 or sometime in 2024. the question is will democrats support that? they will be needing to support it because a lot of people on the right are not going to like that. then the larger question and this is a question you will probably have for kevin mccarthy when he's on your show later, does he try to make a comeback? i don't think he -- i think he would struggle, to be honest with you, to get the support he needs to become speak e again. all of these are open. it's absolute chaos. the larger question becomes how do they put this back together again? the congress is deeply, deeply

divided. et a lot of bad filings, division among the republicans right now. >> i think one of the craziest tidbits i read in all of this came through axios, kind of quoting what happened on cnn. they pointed to representative kennebunk who voted for house majority whip tom emmer in this. he was the only republican to vote to oust mccarthy as speaker while also opposing jordan on the first vote, and cnn spoke to him and said do you really want emmer for the job? he said, no, i don't. i don't like tom emmer. i figured this would be the worst job in the world. mike roe maybe would do it for the tv show "worst job in america." i don't think there's anybody on either side of the aisle who's going to be able to do it within their own caucus.

it doesn't matter who you are. you can't do it if you're hakeem jeffries. you can't do it if you're any of the republicans at this point. it's going to take a bipartisan coalition. >> at this point it probably will. i don't think there's any single republican who could get 217 votes to get the job on their own. to put it in context, that's stunning. that never happens in the house of representatives almost always, going back 100 years. people get elected to the speakership with their party and their party only. there's not a single republican who i can think of that will get 217 or 218 depending on the attendance on their own including patrick mchenry. hakeem jeffries has helped to get 212 democrats on his side. >> 217. >> nope, nope, nope. when hell freezes over. >> it's not going to happen, i agree. >> here's what i was thinking jake. let's say you did a vote count. jordan missed 20.

what was -- mccarthy was eight, right? you've got gaetz and the over seven. eight is better than 20. so he had 96%. if it was purely just percentages, he might be considered to be able to wrangle the most, but still be missing eight. any way that you could shear off -- nancy mace, i don't know what her thing was. she must want to be president. they get criticized so much. maybe that would -- it seems like mccarthy has more support than jim jordan. >> mccarthy has infinitely more support than jim jordan and more people like mccarthy over jim jordanful you could definitely take two away from that. i think there's a couple of people who are soft-nosed on mccarthy, and after three weeks of doing this, i think you could probably eat away at his

opposition. i don't know that you could get four. the larger question is can mccarthy cut a deal with democrats to take away this emotion debate gate which is an anvil hanging over his head because that's the only way he can survive. i don't know the answer to that, quite honestly. the democrats have not been willing to cooperate. listen, i will say this to everyone. mccarthy knows this. this is his fault in that he let this provision stay in place when he was negotiating back in january. he knew it would happen to him at some point and he knew, quite honestly, he wouldn't be able to beat this back. the only way i could see mccarthy wanting to be speaker is to get rid of the motion of eight. yes, this is the system of governance we have right now, joe, is that eight republicans in a narrow majority. six republicans, five republicans could boot the speaker out of the job and make it difficult for the 96%, 97% of

the conference. >> i've seen another place do that. you get a certain amount of chips to bet on who's going to get the nomination or whatever. i mean how would you do it right now? to be the eventual speaker? i would say mccarthy gets at least 33% chance maybe and then jordan probably -- you'd probably give less to jordan. what about patrick mchenry? he probably doesn't even want it. steve scalise is out of the picture. is there somebody else we're not thinking about? >> patrick mchenry doesn't want it that no one wants this job. it's like someone said the other day, it's like being mayor of a city that was just nuked. >> you've got 100 bucks. what do you do? you've got 3:1 odds. >> mchenry. >> mchenry? >> until the end of the year or until january. to me, i would add one thing here. i think mccarthy's opposition

has probably grown beyond that eight, to be honest with you. a lot of people have gone soft on mccarthy. >> yeah, probably, but you could peel off a couple, you're right, but then you probably get back to eight. the original eight, but then you have to add some in. >> that's right. >> jake, thank you. >> thanks, guys. >> coming up, the survey on the u.s. economy. i think it's all americans -- >> all america. >> all america. >> yes. meaning all of america. >> not the athletes. >> yep. >> anyway it involves -- plus we're going to have a huge lineup including the ceos of procter & gamble. you know how you call former house speakers speaker, i don't think we want to call mccarthy speaker today. we call him congressman. >> former speaker. >> former house speaker kevin

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all-american survey showing attitudes toward israel. also new numbers on president biden's approval ratings. steve liesman joins is now. >> pretty serious stuff.

the americans strongly supporting is rah i will is over palestinians and the military for israel, but a significant share want both sides treated the same, and cnbc finding support for president biden at or near all-time lows. 39% say us raamericans should favor ids israelis. 36% want both sides to be treated the same. a significant number say they're unsure, a sign that remains fluid. democrats say the go. should favor israelis. look at that number there. 57% of republicans want the u.s. to favor israel over palestinians, 44% of democrats want both sides to be treated the same, and that includes 47%

of democrats with just a quarter of republicans jo on the issue of government funding, 74% say military aid for israel is an important priority for government funding. 72% for securing u.s./mexican borders and 72% for foreign human taurean aid. come down a little bit, 51% for military aid for ukraine and 52% for economic/military aid for taiwan. us real is the third spot there. the survey of a thousand americans across the country finals that economic and geopolitical turmoil have cost president biden support, in some cases significant. his overall approval rating, 37%, his disapproval, 58%. that's the highest of his presidency. on the economy, 32% approving.

that is the lowest of his presidency with 63% disapproving, 31% approving on his foreign policy handling and 60% disapproving. among the president's problems, just 66% of his own party approves of his handling of foreign policy along with a slim 20% of independents and 7% of republicans, all of this leading the ur is vai to find former president trump would bead president biden in a head-to-head race by four points, 46% to 42% with 12% unsure. we're going to have full coverage, guys, with america's news on the economy including an in-deafth look with what's troubling americans. we'll have that on friday. >> wow. it took you a while to get to the last one. i don't know if that's a lede or not. crazy. what u did notice there, steve, was in gin real, both parties

are kind of in sync on israel, ukraine, but there are significant differences. americans definitely more comfortable giving aid to israel than ukraine. >> they don't care about the southern border? >> their number is below it. joe, you know, one can look at these numbers and say, wow, these are tremendous differences, or one can look at these numbers and say, you know what? this could be the source of a compromise. >> that's what i mean. >> in general. but there are differences. in general, everybody wants to help ukraine and israel and probably do the border, but there are significant, like

20-point differences. >> right. joe, i want to make one comment on the trump numbers. i want to make one comment real quickly, which is both are republican and democratic pollsters. one thing they can say for biden, given how lousy his approval numbers, it's hard to believe trump has only a four-point lead. >> yes and no. >> i'm just saying. >> think about what we're talking about. think about what we're talking about. >> it's the battle of the lower negative in the situation. >> the lower negative. trump has his own problems, but given these numbers, you would think trump could have -- or the republican contender could have a much stronger lead. >> there's two ways of looking at it. you've got a guy where we don't know which of the five trials -- some are starting here, some are starting there, and he's still somehow up. it's so bad for biden when you

have a guy who might be -- >> no doubt. >> -- i don't know where he could be. he could be incarcerated. i don't think so, but it's possible. it's so bad for biden that he's still up four points. >> right. you could look at it that way for sure. >> all right. all right, leis maniacs, they're satisfied. they got their fill. see you later. coming up, coalition of colleges speaking on support of israel. we're going to talk to one of the coalition's founders. we're going to do that next.

good morning, everybody. welcome back to "squawk box." we're live from the nasdaq market site from times square. we've been watching the futures. dow futures now down by about 128 points. s&p futures are off by 20. the nasdaq indicated down by 83. andrew? >> meantime a coalition of colleges and universities coming together in support of israel against hamas. the coalition includes faith-based schools, historically black colleges. joining us right now is the founding signatory rabbi ari berman. good morning. >> good morning. thank you so much for having me. tell us about the effort in the context of what we're seeing

around the country frankly at universities. i fear it may be underneath the surface even as companies given the world business network going on and the conversation about donations to these universities and the like. but let's start with what this really is aimed to do. >> sure, sure. there's definitely a controversy on college campuses now with college presidents. some people think that college presidents should. say anything about any issue. others think they've spoken too little about this issue. so let me give you a little insight on what college presidents think as a college president and someone who speaks regularly to my colleagues. college presidents are concerned about their jewish students and their muslim students, and they're concerned about roiling their campus. so what we've dub with this broad-based coalition by supplying the statement is to give them a tool. we call it the truth.

and the truth has two elements to it. the first is that hamas is a terrorist organization. this is an organization whose mission statement is to destroy the jewish state and kill the jewish people. you know, moo i wife, who's back in israel, just told me the story that one of our neighbors volunteered to perform to be part of the last rights of a ritual, burial ritual with their last rights and she volunteered for the victims of the south and she just told my wife that you can't believe the state of the bodies. that i didn't just rape the whims. they brutalized, butchered, decapitated children, burned children alive. the salvvagery, the likes of wh we haven't seen since the holocaust. this is an expression of hamas. they're not interested in the

two-state solution. they're interested in the final solution. the first truth is hamas is a terrorist organization. the second truth is that the palestinians are not hamas. this is essential. the palestinians are not hamas. >> the palestinians are the ones dying now. this is where things get complicated. we heared from steve liesman. it's not just college campuses or corporations. the survey that he just ran on all america shows that 36% favor israelis over the palestinians. or 36% want them treated equally. 39% want israelis. that's a public perception. what do you do? >> for me it's important to differentiate because the palestinians like all our arabs

and muslims -- hamas is evil. i came back from israel, they have an abraham statehouse, a family house. they invited the presidents of the jewish universities to speak. after we met with a very high-level official, iranian official, he told me that he was in michigan during 9/11 and his father called him and said to him, you need to come home. and he said, why do i need to come home? he said, because they're going to turn on you. he said, i'm not a terrorist. he goes to class. he said the class raged against him. there were two women who stood up for him and they were two jewish women. he said from that point and on he had a real affection for the jewish people. what it my lights for me is the importance of separating people

-- >> rabbi, the question i have about universities in the u.s., your people on the campuses of the university of pennsylvania, for example, i saw it yesterday, a video of somebody literally screaming out genocide to the jews. genocide to the jews. this is happening in the united states that they're saying this out loud. it has been normalized. then the question is in a world where universities are talking about having freedom of speech -- and iit that in the context of hate speech clearly, do those students deserve to remain students at that school? are they supposed to be expelled? is the university president supposed to actually speak out and say we can't have this? what is supposed to happen? >> it's great. thank you. the university president is certainly supposed to speak out. this is essential, and this is missing. this little piece is sometimes missing in the conversation. campuses need to be bastions of free speech. but free speech needs to be

built on the truth and sometimes the truth is ununequivocal. we read last week god said let there be light and there was light. sometimes you have to speak and create the light. >> would you support expelling the students? do you support the lawmaker that has rescinded job offers to students who participated in some of these protests? do you support the view that he should be able to dough side whether he wants to hire or not hire the harvard students who signed on to those letters? what is that answer because that is the thing that so many people watching you right now are trying to figure out the answer to. >> there's no question that the world notices when people support baby killers, there's no question about that. what where we're coming with this statement is to help give a tool to calm waters down on college campuses and to enlighten. that's really what is key.

what inspires my work is martin luther king. when he says darkness cannot draw out darkness, only light can. hate -- >> are students supposed to be able to say those things on campus? >> what we're supposed to do is bring the education, teach first our basic training. hamas is a terrorist organization. no one can support that. >> i'm not disagreeing with you. you know where i stand. i'm asking you what's supposed to happen to the students and the president of the university of pennsylvania, which, by the way, when i look at the situation, i think to myself, your entire job is to get donations, frankly, from the alumni. the whole of economics breaks apart when a lot of the wealthiest donors say i'm closing my checkbook to you. i don't understand how that's a long item tenable situation to the yuniversity.

do you? >> what i'm happy to share with you and you see this in the broad-based coalition, my peers are willing and able to do it. the moral courage that they have, if you look at my coalition partners all across this country, and we have already people signed up from california, texas, and new york, all different states, the public and the private, hbcus, we all come together to establish that hamas is a terrorist organization that we condemn and the palestinians are not hamas. >> i've got to ask you to level with us straight, though, on what we're seeing. what i specifically said to you about the university of pennsylvania, i want your actual opinion, your personal opinion. should the president of that university still be the president of that you vernts? should the students who said on the campus genocide to the jews still be a student of that university? it's a yes or no question? >> you know, where hamud is -- we don't do yes-or-no questions.

it is true that there needs to be consequences for people that are bad actors, there's no question about that. and each university system has to think about what those consequences are. >> right. >> for me, what's more important -- because i don't think they're bad actors. in many cases i think they're misguided and misinformed. if we bring the light of education to it, we can actually create a base on which intellectual real conversations can happen. >> do you think this is new, or do you think this has been underneath the surface for a very long time? and do you think this is a problem at universities or a problem throughout the country and this world? >> it's not just this country -- i think it's worse in other parts of the world. >> how does someone who feels empathy for the palestinian cause, how do you express that and not support a terrorist organization? they have nowhere -- it's almost like do any of these students -- are they walking a fine line between not supporting hamas and

trying to have empathy for the palestinians? >> that's what's essential. we need to differentiate. >> this one big demonstration -- they don't have their own demonstration. >> to that point, i'm a university president. i have to say, i know university presidents shy away from making collective statements. this is an opportunity to have a broad-based coalition across the country. it's an inflection point not just for the state of israel. this canan inflection point for higher education in our entire society. we can wrap around the basic truth, which will be the bedrock of future intellectual conversations that hamas is a terrorist organization and -- >> hamas is also the elected leadership in the palestinian territory. not anymore. >> elected leadership. >> but they were originally. >> 70% of the palestinians do not want hamas ruling gaza. mohammed abbas himself said they

do not represent them. we need to separate that and understand, and the college president to do that, because that will enable their whole campus to come together. the campus is roiling. they can set the tone. >> we're going to run out of time. i have one final question. for ceos listening to you -- do you put out a statement? not put out a statement? some of this has become politicized. there's a concern they could put out too many statements after george floyd was issued and lgbtq issues. now -- and i find it disgraceful -- they're not willing to put out statements about this. the question is with the university of chicago -- a lot of ceos are maybe thinking i shouldn't do it or do you think essential truths supposed to be

spoken about. on moral issues, are they always clear? on this one i would say it's clear. should actually leaderss be putting out statements across the board? >> some statements are critical. we need to be puts statements on t these truths. i believe ceos, colleges should look at our staumts, take it, adopt it, use it for their companies. i would love all ceos to take it, cut out presidents of universities, all should stand in support of israel and the palestinians suffering under the cruel rule of hamas in gaza. tnk you for coming in this morning. appreciate it. >> thank you. "squawk box" returns after this.

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i don't know what this means. the next guest says markets have been remarkably resilient give b en the market headwinds. jason trennert is here, of strategas. it is the opposite for the bond itself. you're surprised that the yields aren't even higher than they -- than they are right now? >> no, i'm really surprised there has -- yields aren't lower. >> you're saying you're surprised that bonds haven't rallied? >> right. >> so the person -- >> okay, i think there would have been a flight to quality given all the things that -- >> that's not what you're

saying? >> it's not what i'm saying. >> okay. >> there should have been a flight to quality, but by the same token, wars are inflationary, and we're -- i think we're reverting back to the meme as far as buying yields. >> you're not turning bullish on stocks, are you? >> i'm more cautious. i had a re-evaluation on the recession this year because i do think if i miss something, it may be just -- it is clear that the labor markets are much more resilient than we might have thought and that might be because we're short of labor, working people, entry level workers. i just think we don't have enough of them. so, despite the fact that profits have been a little bit lower, and profit margins are lower, companies have been loathe to lay people off. the unemployment rate is at 3.8%, you're at full employment. so it is hard to get a recession out of that. but it also is hard to control inflation. >> you think the relative

stability you're seeing in equities is masking some underlying weakness as yet to be realized. are we on a precipice or is this really showing the underlying fundamentals are still good? the world is -- i mean, i have seen jamie dimon on the set, i've never seen things more concerning, the geopolitical, the economic backdrop, it is really frightening, even more so than normal. >> i think he's right. i think there is a lot of things that are frightening. the thing that frightens me the most right now, from a market perspective, is bond yields and the fact that without -- in the absence of quantitative easing and the fed buying treasuries, treasury yields will move higher and that's because our spending is out of control, running a budget deficit that is 5.5% of gdp at full employment. we looked over the past 70 years, we never have run a budget deficit of 5% of gdp when the unemployment rate wasn't

above 7%. >> people have pointed to a lot of these concerns for quite a while. and then government steps in and does something to change it. >> that's right. >> what would stop the fed if things get really out of control from bringing back qe? >> it is a great -- listen, we brought back qe for a short period of time after silicon valley bank failed. >> right. when i say this, people are, like, that's not going to happen for a long time. we switched course this year. >> it is debatable whether -- i personally think it is a decent bar bet, no one would ever know, but if we let silicon valley bank fail, i'm convinced we would be in recession already. but we didn't. the fed flooded the system with $400 billion of assets, we essentially backed every deposit. >> how do you convince there is not one? >> i think the only difference now is that two things that are different, one is that inflation is a binding constraint. in many ways, i said before

here, the fed is fighting the federal government to bring inflation down. if you're serious about bringing inflation down, it is hard do it if you're running massive budget deficits. that's the first thing i would say. the second thing i would say is that interest expense on the debt is now spiraling out of control. so, again, the fed could step in and buy treasuries, as they have done before, but it is -- something else will pop out some place else and handle the inflation. there is nothing stopping the fed from doing that the fed put. >> pressure will be huge. >> it is very hard to get it all set so that you have high growth and low inflation. >> we have our political act together. couple of great candidates. >> at least we have great leaders. >> the politicians are going to throw them out on -- from either party. show me the next president who doesn't do that and they'll scream at me because we're out of time. >> i feel very strongly this idea that the fed was the only game in town.

i believe frankly it was unconstitutional. i think it was -- i think it was a great error of the fed. >> they're playing us out. there is also pickleball. >> there is pickleball. >> the only two. i see ppleoe playing. wee. okay. do you play?

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speaker fails, but he will try again today when the house takes up a second round of voting. former house speaker kevin mccarthy will join us live. earnings from procter & gamble and nasdaq are hitting the wires. we'll hear from the ceos of both companies. and united airlines says pricier fuel and war in the middle east will weigh on profits. we have the ceo scott kirby joining us for an exclusive interview. the second hour of "squawk box" begins right now. good morning and welcome back to "squawk box" right here on cnbc. we're live at the nasdaq market site in times square. i'm andrew ross sorkin along with becky quick and joe kernen who is here, back at the table. u.s. equity futures at this hour, 118 points off on the dow right now. nasdaq looking to open down 90

points. s&p 500 also off about 20 points. treasuries right now, ten-year, maybe should look at the two-year, two-year still over 5%. now up at 5.173%. the ten-year, 4.824%, becky. >> dow component travelers out with its earnings this morning. the numbers are a miss on the bottom line actually. big miss actually. $1.95 is the diluted earnings per share on core, compared to $3.01 the street was looking for. a very big miss. however, revenue came in better than expected. it came in at $10.6 billion and that's better than the $10.3 billion the street was expecting. want to know why? it is because they had very big catastrophic losses during the quarter. this is similar to what we saw last quarter. strong numbers, strong premiums that were there, but very big loss because of some storms that took place across the united states. in this most recent quarter, they had $850 million in pretax

losses from those cat losses. that compares to just $512 million in the pretax the prior year. now, net written premiums, $10.5 billion, up 14% over the prior quarter. prior year quarter, i should say. and net investment income. this is the good story for all the insurance companies out there, they're making more money when it comes to fixed income and that's been a huge issue because you're finally getting some return on those treasury bills that they buy. ne net investment income up by 30%. much bigger catastrophic losses than expected. that's why you see the big miss. the stock is down, but only by about .8%. in washington, jim jordan's bid to become speaker of the house failing in a first vote yesterday, but another vote expected today. and emily wilkins is there with the latest. what is going on? what do you think the chances are? most people think it is very little. >> it is not looking very good. i mean, let's just talk about

the math. jordan yesterday, he could only afford to lose four republicans. he lost 20. that was more than a lot of his allies were expecting. and, yeah, he's still trying to work folks who are holdouts trying to convince them to come on board. but at this point, folks are starting to talk about what republicans' next move will be. house democratic leader hakeem jeffries has repeatedly offered to make a deal with republicans to get a speaker elected or get someone in the chair who can actually pass legislation. and jeffries said last night that bipartisan conversations were happening. >> informal conversations that have accelerated over the last few days, my hope, now that it is clear jim jordan lacks the votes to be speaker, that those conversations will accelerate this evening. >> another option gaining a lot of attention is for republicans to give patrick mchenry, who is currently the acting speaker, the ability to pass legislation. and this is just a temporary

thing, maybe for a month or two, but that would allow the house to move on issues like israel funding and government funding. you're seeing this idea get some traction. former speaker newt gingrich came out last night in an op-ed suggesting that this should be the path forward. and then you saw former speaker john boehner actually retweet that and say, yeah, we should have empowered patrick mchenry to go forward. not everyone is on board with this idea. i spoke yesterday with congressman derrick van jordan and he was not a fan at all. >> we should not be changing the constitution or altering powers for a constitutionally vested office for convenience. we should never do that. >> the house is scheduled to vote at 11:00 a.m. the second vote for speaker with jordan as the nominee. andrew, we'll have to see today whether jordan winds up shrinking or growing the amount of no votes. >> okay. emily wilkins in washington, we

will see. we should mention that at 7:30, former house speaker kevin mccarthy will join us live right on the broadcast to discuss today's vote, the chaos in washington, and even though he says he's not in the running for the role, maybe whether he'll be back in the running. procter & gamble results just out, earnings 17% to $1.83 a share. that topped estimates of $1.72. revenue $21.9 billion was also ahead of expectations, down around just under 21.6. joining us to break down the report, john mueller of procter & gamble. when did you -- we had you on, you're the cfo for a long time. when did you take over the top spot? how long has it been? time flies. >> it was announced in july of '21 and effective in november of '21. >> '21. >> around two years. >> the reason i bring it up is that this looks like a good number. i want to talk organic sales.

that's what we always talk about. it looks like it is above what the forecastyou gave. last time you were on, maybe you gave conservative forecasts or maybe you're pretty good at this. the reason i'm saying that, have you missed yet on a quarter since you came in? have you posted a quarter that was below analyst expectations? >> no. and you're right, this is a very strong quarter. 7% organic sales growth, every category growing, personal healthcare, double digits, home care in the teens, feminine care, fabric care, hair care, laundry, grooming, high single digits, and you see that flow through to the bottom line. we invested significantly and continuing to build their brands and bring innovation to the market. at the same time, we're able to deliver significant earnings per share growth as you said, 17%, which is 21% on a constant

currency basis. free cash flow productivity, 97%. we returned $3.8 billion to shareowners. it really sets us up well. this is first quarter of our fiscal year. and it sets us up well to deliver against our guidance and potentially deliver towards high end of that. >> yeah. maybe you can be more specific about what whether you need to raise guidance and what that -- the point i was getting at, and it is my hometown, i followed it for a long time, you had ag, and he was -- everybody thought ag was the greatest thing -- he left and you had, you know, a couple of guys didn't quite cut it. and then ag had to come back. weren't you cfo through -- there you were. there was the guy sitting there the whole time toiling in obscurity and maybe the right guy -- would you say the right guy was right under the board's nose at the time, john? >> i've worked for four different ceos, if you include ag, two different occasions.

i admire and respect each of them. they each contributed a significant amount to where we are today and the strength of our position. this doesn't just happen overnight. and but i'm happy that i get to contribute at an even higher level now. >> all right. what about -- i was just saying, you know, stock looks good. it looked all over. and you were on "squawk box" a lot and that probably didn't hurt just the whole -- let me ask you about the consumer. are you seeing trading down yet? we had retail sales yesterday. nothing -- are you confounded by how this is happening and how strong the consumer remains at this point? >> well, i focus, as you would expect, primarily on our business and i'm not confounded. we have invested a lot in improving the superiority of our products and categories where performance drives brand choice. we haven't seen a lot of private label progress. if you look pre and post

pandemic, in the u.s., the market share number is 16% in both periods. we have built share throughout that period, including the last quarter. if we look at volumes, as an indicator of consumer strength, the last four quarters as we took pricing, volume was four quarters ago was minus 6 and then meinus 3, a little over 1 and now the united states plus 3 and western europe plus 2 and the large enterprise developing markets like mexico, bra dzil, india, strong volume growth. that doesn't surprise me given the strength of our offerings and how they improve consumers' lives. >> tell me about inflation on -- how would you characterize it versus last quarter and versus your expectations? >> it's pretty much in line with

our expectations. we expected about $800 million in commodity help going into the year. we still stand at about that number. on the other hand, foreign exchange has gotten about $600 million worse since we went into the year. that's about a billion dollar headwind. and, of course, we have the interest rate headwinds that we're dealing with as well. but, if you look at that in totality, and compare it to where we were a year ago or two years ago, it is a much better situation. >> you talked about volume, you talked about organic sales, it puts net sales at 6%, organic at plus 7%. but what about price increases? are they sticking right now? does that account for some of the gains you had? will you be able to continue to do that or is that going to eventually dry up? >> well, pricing did contribute 7 points of growth to the top

line mix. it was a point of benefit and i mentioned one point of volume decline. that's how you get to the top line numbers. and, you know, as i mentioned, we're building share. if you look at the u.s. in the quarter we completed value share is up 40 basis points, volume share is up 50 basis points, so that's definitely indicative of all of this kind of working. for obvious reasons we don't comment on future direction of pricing, but i will tell you that we're happy with where we sit currently. >> jon, i can push further on that? i know you can't give us too much on it, but there are a lot of questions from investors. they want stocks where you can continue to see pricing power. they're worried that has run its course and most companies aren't going to be able to eek much more out in pricing power.

do you feel like you're pushing up against a wall at some point, that consumers aren't going to be able to continue spending more? >> i don't think pricing is an endless well. and we're pricing just to not even fully recover commodity costs. but, there are other elements of top line growth that i'm very excited about. our innovation program has never been stronger. look at something like dawn power wash, which has grown -- the category, 90% since it was launched. and it has grown the dawn business 50% since it was launched. as a stand alone brand, it would be the third largest brand in the category. so if we can continue creating value, for consumers, through innovation, if we can continue holding costs with our productivity programs as low as reasonable, we should be in very good shape. >> all right, jon. try to give you a compliment.

i got nothing with sports. the reds didn't make the playoffs. bengals in last place in the -- you know what i got? travis kelce, went to the university of cincinnati. that's all i got. that's all i got for you. >> noted. >> are you a taylor swift fan? you look like a taylor swift fan. are you a swifty? >> i like her music. >> okay. that's good. you've been to the eras tour, the movie or anything? >> i have not. it has been a busy summer. >> you're busy making p&g great again, i guess. jon moeller, hope springs eternal, bengals have on two straight. good to have you on. congrats. we'll see you again soon hopefully. >> stthanks, joe. other stocks on the move, plus nasdaq ceo adina friedman on thepo i market and quarterly results. "squawk box" will be right back.

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welcome back to "squawk box." i'm frank holland with this morning's premarket movers. airline industry, shares of united down almost 5%. almost 5% right now. under a lot of pressure this morning despite a beat on revenue and eps. soft guidance is weighing on the stock after united warned higher fuel costs and pause on flights to israel would hit current quarter profits. and ceo scott kirby will be here on "squawk box," with a first on cnbc interview coming up in just about 30 minutes. moving on to the chips sector, asml falling after a miss on revenue and beat on eps. shares down over 2% right now. however, it is really guidance that appears to be weighing on this stock. forecast is for flat growth in 2024 with the ceo calling it a transition year. the cfo added customers are getting more cautious with orders. shares of asml down 2% right now. all right, third, we have a possible deal in the retail space. some movement in the retail

space, vf corp. down half a% percent in the premarket. but yesterday up 14%. you see the big spike right there. it is moving higher on news activist investor engaged capital took a stake in that company. andrew, back over to you. >> okay. coming up, adena friedman joins us in a couple of minutes, former house speaker kevin mccarthy is going to be on the program to discuss the speaker impasse, the situation in israel and so much more. "squawk" returns after this. >> announcer: time now for today's aflac trivia question. where is the world's oldest and longest boardwalk? the answer when cnbc's "squawk box" continues. . and he's using it to send out medical bills. good hands! hospital bill for prime?! gaaaaap! did you just say gap?! he's talking about expenses health insurance doesn't cover. good thing coach prime knows about...say it one time! aflac! because aflac gets you money to help close that gap! now how do we get this goat outta here? (whistles)

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[ heavy breathing ] doesn[ lights buzzing ]com. [ music builds ] [ screaming ] >> announcer: now the answer to today's aflac trivia question. where is the world's oldest and longest boardwalk? the answer, atlantic city, new jersey. it opened in 1870 and has a length of 5.5 miles. welcome back, everybody. nasdaq third quarter results are in with a beat on the top and the bottom line. for a closer look at the numbers, plus the tech rally,

the ipo landscape and more, we want to bring in adena friedman, the nasdaq ceo and chair. good morning. good to see you here. >> great to see you guys. >> look, people look at it and say, fewer companies becoming public, that's going to be bad news, but you've been working hard to diversify and that's showing up in the numbers. you had strong results that came in from some of the new things you've been branching out into, including the antifinancial crime unit and revenue from the index revenue, the numbers -- those came in really strong too. >> i'm really proud of the team and proud of our results. we had 6% overall revenue growth, 9% in the solutions businesses. the highlights, 15% growth of our index business. but $25 billion of inflows in our index business over the last 12 months. and then also we had about 21% growth in our antifinancial crime business. we're continuing to show that we are signing a lot of new clients and clients are looking to tap

into us to leverage our expertise and helping manage our crime. >> the money that is going into the index funds, where is that coming from? who is your customer? >> our customer is retail investors, primarily. our indexes are all over the world. we have a lot of different index products, but we also have products that are listed all over the world to allow retail investors to invest in great names, great innovators. >> you're competing with a whole new group of companies than you ever have been before. this is not like competition with the ice or the nyse or somebody else. you're competing with real financial power players. >> we compete with some technology providers in the space. we compete with other big index providers, data and analytics businesses. but we feel like we carved out our space. we're number one, number two on pretty much everything we do across the world. we're proud of that. and i think that one of the things that our team really focuses on is how do we go a little bit further to meet our clients' needs. we're bringing in new technology like cloud, a.i. we have our first s.e.c.

approved a.i. driven order type that we got approved by the s.e.c. this quarter. and in financial crime management in particular, we're really using a lot of advanced a.i. there and have a generative a.i. capability that we're introducing into the work flows this coming quarter. >> tell us more about the antifinancial crime. we know all the time about these attacks. your identity is getting stolen, cybercrime is out there. what does this go after? >> this goes after two key things. one is fraud. as you said, criminals coming in and trying to convince you to give them your money. or actually really much more nefarious criminal networks, work and rooting out whether it is human traffickers, drug traffickers, terrorists out of the financial system. so, our technology, we pull all the data across 2500 banks to look at every transaction that occurs within those banks, to look at payee/payor and use patterns and practices of behaviors to look for and root out criminals and we alert the

bank as to this might be a criminal activity and they go in and investigate it. >> the banks are pretty good at this. the big banks. are you helping out the smaller banks? >> we started off the business -- the business started off supporting the smallest banks. we have been moving up market. now we are providing technology to the largest banks as well. but the 2500 banks we serve across north america include small credit unions, all the way up to the largest banks in the world. >> let's talk about listings. listings were down. i think 87 companies that listed in the quarter versus 98 from a year ago. is that just the uncertainty of companies kind of looking around, waiting to see uncertain market times volatility? >> i think it is a tough time. if you think about investors, how do they invest in the future when they don't quite understand what the future is going to hold? i think over the summer, investors started to feel more confident and understanding how the future of the economy might unfold. and therefore they were ready to underwrite more risk and we saw some great ipos in the quarter

with arm and others. but we also had about 35 operating companies go public in the quarter. that's the number we tend to focus on. we had a 95% win rate. so we're proud of that. but now we're starting to see more macro factors coming into the markets again, putting a little bit more of a pause on the ipo market and we have a lot of companies in the pipeline, very strong pipeline of companies looking to go out, but a lot of the conversation, many of the conversations are about next year, more so than this year. >> how much of that is tied to the macro -- the geopolitical situation, how much of it is just the markets kind of peaked back in july and seemed like a great idea when things were running up and, wait a second, geopolitics is reflected in the stock prices. >> i think it is -- the markets tend to manage through geopolitical events pretty well in terms of they really do look through it and say how does this impact company earnings? but the macro economic environment and the interest rate environments, looking at how different economic signals are coming out, are just making

it harder again for investors to predict what the future is going to hold. if you think about what is their job, it is to underwrite the future earnings of a company, hard to do that. therefore you're starting to see them put a pause yet again on underwriting significant risk. now, having said that, we have some really interesting companies that are look to tap in the fourth quarter, and assuming the market starts to demonstrate a little bit more resilience, i think we'll see some good interesting companies come out, but majority of companies are looking at next year. >> we talked about the things you're excited about and where you're seeing some growth. what are you worried about? what is your biggest concern? >> i think that i actually worry about making sure that we, number one, honestly, that we adapt to new technologies fast enough. that's something i spent a lot of time working with the team on, how do we bring more of these emerging technologies into the company, how do we continue our cloud journey. and then the second thing, i think, is the world around us. it is definitely a very, very precarious time in the world. and what does that mean over the

long-term in terms of the overall health of the economy, the global economy, and the overall health of the political environment. >> adena, thank you very much for coming in. >> thank you. >> adena friedman. good to see you. thank you. >> already here. >> it is a pretty easy trip. >> an easy trip. has to make sure she's ready to go to come on with us. still to come, results from morgan stanley. plus, congressman jim jordan failing to win the house speakership on his first bid. just getting started. one. 15, 20, maybe. we'll talk to former house speaker kevin mccarthy who knows something about that. and united airlines ceo scott kirby on the airline's third quarter results and the outlook. stay tuned. you're watching "squawbo"k x. this is cnbc. and we're at the nasdaq. a competitive advantage. ♪ it's raising capital to help companies change the world. ♪ opportunity is making the dream of home ownership

a reality. ♪ ...and driving the world forward to a greener energy future. [applause] sometimes the only thing standing between you and opportunity is someone who can make the connection. at ice, we connect people to opportunity.

all right, morgan stanley results are out. leslie picker has those numbers. leslie? >> hey, becky. here what i see, a top and bottom -- beat on the top and bottom lines for morgan stanley, reporting eps of $1.38 per share. that's about 10% above estimates for the bottom line. revenue coming in above consensus as well at $13.3

billion for the quarter. and looking at its individual businesses, institutional securities came in around $5.7 billion. that beats consensus of $5.37 billion. that was lower, though, than the same quarter last year. banking, lower, which we have seen across the street for the last few quarters now. banking came in equities trading higher at $2.5 billion. fixed income coming in at $1.9 billion, which was slightly down from the year -- a year ago. global wealth management business, a slight miss at $6.4 billion versus estimates of $6.6 billion. the margin 26.7% and a quarter. investment management revenue was $1.3 billion, which was up 14% from a year ago. although a slight miss relative to consensus.

operating expenses for the quarter, a little under $10 billion, which was slightly below what the street was expecting here. and ceo james corpsman talking in the note about delivering solid results while the market environment remained mixed for the quarter. guys? >> okay. just trying to see the characterization here. profit shrinks as deal slump lingers because stock is down about 3%. we'll look more closely at that. to our next guest, a race to find a new speaker of the house continues. our next guest knows this all too well how difficult this race is. joining us now, california republican, that's crazy enough, almost an oxymoron, and former speaker, congressman kevin mccarthy. congressman, it is good to have you on this morning. welcome. you are welcome. you know about wrangling, about whipping, all these things.

the -- he lost 20, talking about congressman jim jordan. he lost 20 the first time. the betting is that he could lose more on this next one because there were certain people that said they would go once, but maybe not after that. do you know anything that we don't know? what do you expect? >> look, it is a difficult job to win, even a harder job to govern. think about for one moment why we are here. voting to keep the government open was the right job to do. could you imagine what the world would look like right now if we were not paying our troops, like, we have chaos. the chaos was created by this crazy eights that are led by gaetz and every single democrat. so now they voted to stop one branch of government, we're electing a new speaker. jim jordan is prepared to do that job. i lost about 20 on first round too. coming into the second round, the thing i would look at, making sure that vote number goes up. if he can hold the votes and the

number goes up, i think he can get there. i believe that's exactly what will happen today. >> there is three factions, i think. people that wanted congressman scalise. people are still voting for you. and then there is people that are in districts that biden won and i guess they're worried about, as they always are, every two years, worried about getting re-elected. those are three different factions. i'll point one thing out, former speaker, that is that i think you got 96%. if jordan doesn't get to 8, if he doesn't get that low, and you still would be, like, you would be the person that had the most votes. is there any chance that you would be the default candidate and say, look, he's still got 96, maybe we leave gaetz and, i don't know who are his hardest dead-enders, are there three

other ones? what if you got the other four? you could theoretically get back in. >> yeah, there is not very many occupations in the world you get 96% support and somehow you are thrown out for that. it is unique. but also, got to think, every single democrat voted to shut down one branch of government. this is something none of the leadership in the past, they always fought against this. not to do that, to be able to continue the continuity of government. >> fish got to swim, birds got to fly. i like mixing metaphors, hot butter through a knife. >> that's good. >> let's talk about what's really going to happen. how about mchenry? should we do that? should we make a special exception, let him do something for six weeks or two months? >> i think you -- you give jim the opportunity. i went 159 r rounds. he's got one round. he spent time talking to a

number of people. let's see as we go here. after 9/11, how it works is and why mchenry is there, i selected mchenry if something was to happen to the speaker, you select who would be speaker pro tem, but i always believed whoever you were selecting as speaker pro tem would be able to do the job until you elected a new speaker. you want the continuity of government. unfortunately it was the democrats who went out at the beginning and said this person does not have the power. we want to make sure government can actually work. we kept government open. but unfortunately gaetz and the crazy eight decided that was the wrong thing to do. can you imagine border patrol agents, those who are in our military sitting on the aircraft carriers have to defend what is happening in the world today, but wondering if they're going to be able to pay their rent or car payments? this is where we currently are. and i believe that we can get this done, get back on track to be governing for the american people. >> kevin, you had to deal with leading this congress and trying to figure out how to govern through all of it. what are the back room deals

that are likely to be cut? we have been reading about stuff about jim jordan taking a hard-line and trying to do difficult negotiations. is there some sort of a way he can lure in some of those voters or is there an outreach to the democrats to convince them to get rid of the rules that would allow one member to call for the speaker to be vacated in the speaker's position to be vacated? >> i don't think the democrats -- they like this chaos. they voted for that rule. they apparently like to keep that in. look, each member wants to come in and look at the speaker and have an understanding of what they're able to do. are there some members that ask for things, just personally for them? they want some office space, something else? a lot of them will ask that. i'll tell you at the end of the day there is not places to give away. what you have to find if you want a team that can govern is a team that is ma focused on amer first. there is talk, i gave something away in the process. that wasn't the case. the rule package i put forth was the same rule package that we

ended up voting on except instead of five people could move a motion to vacate, we could go to one. look what we were able to accomplish. you talk about from hr-1, to the debt ceiling, cutting $2 trillion, doing work requirements, you could achieve a lot if you worked together. right now i feel we're very broken and so we got to find that ability to bring us back, you got to give jim the opportunity to do that. and i think people are frustrated in a number of different ways because of these eight. they're expressing that. but i think at the end of the day if you're able to bring them all back, you can be strong in getting the rest of the work done. >> the democrats are mad at you for a lot of different reasons. i know that. but you are considered to be much more centrist than congressman jordan and you had 15 rounds of voting. i don't know whether this happens because even some -- maybe some moderate republicans

would be worried about that. i don't know whether he gets to where you got. what if, you know, democrats finally figure out maybe the devil they know is not as bad as the one around the bend? do you think there is a deal that could be made to get rid of the one vote to vacate the speakership and that -- do you see any path to where you could be the default candidate? i asked that earlier and you -- >> i have a lot of democrats who come to -- that has remorse, that said they would support. i think the democrats will remove the motion to vacate if they're in power. but i think they like to keep it and create the chaos now. the one thing, really, the democrats had a meeting, their main purpose to vote to get rid of me was ever since i've been leader, we have one seat. we won five seats in california. we won five in new york, we won in oregon, we won in arizona, places nobody else. we expanded this party, elected

the most women ever for the republicans, the most minorities ever for the republicans. so, i mean, the conversations they had directly was they're making a political decision, nothing about governing. they wanted to make sure based upon the ability to win, based upon the ability to raise resources, they thought taking me off the table that somehow would help them win the majority. they would rather bring chaos to this country than govern. that's a real concern to me. i had the ability to move a motion to vacate against nancy pelosi, but i never would. i don't believe that's good for government. >> how much damage is done to the party at this point? the reason i ask, we had steve liesman on earlier with the latest survey. and you look at former president trump, and the headlines we had. he was up over biden by 4%. after all was said and done, he is still up. i'm wondering, no one likes watching republicans fight with

each other. but i'm wondering whether, you know there is just so much chaos. i'm not sure whether there is anything lasting here or not. if republicans can get their act together this week maybe. >> republicans were in no better time from a pure political nature to win the white house, the senate and the house, to gain more seats in the house. we have the best recruits out there. we're ahead in resources by more than $20 million. we have got a president that has brought us inflation. we have got war, again. we have got embassies that have to be evacuated. we have got gas prices at the highest. we have got every element that you look from every issue republicans win on. i don't understand why we're putting ourselves in this position when we have the chance to be able to govern in a conservative manner to make america stronger. it is a self-inflicted wound by eight people for personal reasons instead of looking really at the people that they need to govern inside america. >> well, if you can only lose

four, i just don't see how you -- will he get those eight and lose other ones that total five or six? >> i got there, it took me 15 times. it won't be the same as when i was running because when i ran in january, we didn't have rules. democrats kind of controlled the floor. you had to be able to get off the floor. we control the floor now. we don't have to vote four or five times. i think this next vote is important for jim. i would like to see those numbers grow. got to be able to hold your numbers, continue to talk to people, and bring people around. at the end of the day, we had a four-seat majority in january and were able to put it together and we were able to accomplish things more than most majorities were able. it is first republican majority to pass a bill to secure our border and we did that with the smallest majority yet. >> congressman, if these guys were worried that you call them the crazy eight, i like that, it's good. >> it is the crazy eight led by gaetz. remember what it is. >> yeah.

that's right. because that rhymes too. but they were worried about omnibus and governing, and no budgets. we're hurdling, because of this, and the chaos, we're hurdling toward another omnibus. if they really cared about what they professed to care about, and that is the fiscal -- the dire fiscal situation that we find ourselves in, we're going to end up with another omnibus from this inaction. >> but, joe, this was never about spending. we cut more spending than anybody in the past. for gaetz, this was all personal, worried about an ethics complaint he had in the last congress. i don't know what's in it but he must be serious. he's more concerned about putting emails out to raise money online. it is nothing about the country, nothing about the party. what is so unfortunate is the damage he's created, the chaos that has gone on and those who had followed him. so, what we need to do is get in the room, make sure he is no way

leading this in any shape or form and put this country back together and make sure this party is able to lead that we had been leading. >> i just wish we could all get along. that's not going to happen, though. we do have some -- not just the -- what we're talking about with the government shutting down, but we need things to do with the border and with israel and ukraine and everything else, congressman. so -- >> there is too much happening in the world. >> there is, yeah. >> we need to get our act together. we need to make america energy independent, tackle the inflation we have, secure our border. i'm concerned about what type of cells do we have in our country today? as we went to air, we found one way drones coming into attack our bases in iraq. we watched our president sitting in israel wondering -- looking at a world we haven't seen since the 1930s, this new axis of evil from iran, russia and china together.

we have got a challenge on our home base to be able to support our allies stronger from energy independence. we got an economy that is weakening in the bases that you report on every single day. this is not a time to play political gamegames. this is a time to sit down, put the country first. i will never give up on this country. and if it costs me my job to make the decision to do what's right to pay our troops, i would do it all again. >> all right. we haven't seen you since all the -- all that happened. congressman, good to have you on this morning. thanks. >> thank you, joe. >> you're welcome. >> former speaker kevin mccarthy. up next, united ceo scott kirby joins il lphebeau. we'll be right back.

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beautiful live shot of manhattan. coming up, united ceo scott kirby will be with us in a little bit. at the top of the hour, galaxy founder chairman and ceo michael novogratz to talk markets and so much more. broker shares are lower, the company reporting a more than 40% increase in earnings, and 45% rise in sales compared to a year ago. that company's founder and chairman is going to be with us a little bit later in the broadcast. look at the futures now. dow off 100 points. nasdaq opening down 85 points.

s&p okloing to open off 20 points. we'll come right back.

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you're probably not easily persuaded to switch mobile providers for your business. but what if we told you it's possible that comcast business mobile can save you up to 75% a year on your wireless bill versus the big three carriers? it's true. plus, when you buy your first line of mobile, you get a second line free. there are no term contracts or line activation fees. and you can bring your own device. oh, and all on the most reliable 5g mobile network nationwide. wireless that works for you. it's not just possible. it's happening. welcome back, everybody. united airlines says more expensive jet fuel and war in the middle east will weigh on profits. that stock is off by more than 5%. phil lebeau has a special guest. phil? >> good morning, becky. let's talk about q4. your guidance, q3, yes, you

beat, but q4, guidance is lower than expected, higher costs. what's the issue here? >> two issues. higher fuel costs since the -- >> even excluding fuel. >> there is cost pressure everywhere in the industry. two things driving that. one is much higher labor costs than any of us expected at the start of the year. the second is all the supply chain challenges impacting everyone, engines, spare parts, air traffic control. this quarter we're taking 15 fewer aircraft carrier deliveries than we were expecting. but we were expecting those to be -- we have the expenses with those airplanes but aren't producing the capacity. the supply chain causes cost pressure for all airlines. >> speaking of capacity, how much is the overcapacity, especially on the lower end, with the low-margin carriers, the low-cost carriers? how much is that distorting the market overall? >> i wouldn't describe it as

overcapacity. to me the most remarkable statistic this quarter is probably united and one other airline in the country, out of ten publicly traded airlines, two will account for 98% of the revenue growth this quarter and over 90% of the profitability. there is a seismic shift in the strung chur of the airline industry. that's changing. the revenue business models are succeeding, but that's putting pressure on everyone else. >> what happens with the low-cost airlines? >> with united doing what we're doing, a great product, it's a much better product, we're able to accommodate that demand. the other thing we've done is with product segment, we have the base economy working well. we have revenue diversity. >> within the industry, i hear from other executives saying, look, something has to change here because you cannot get as

much capacity as we've seen on the lower end without something eventually breaking. >> it's already broken. two airlines will be about 11% profit margin. we're 15 to 25 margin points, not basis points to, ahead of the low-cost guys. it has broken on the low end. it's just a matter of time. they have to change significantly in my view to survive. that is already happening. i don't know the exact timing. that's on its way to happening. >> joe has a couple questions. joe, go ahead. >> scott, it almost sounds like it's labor costs which are -- we heard about tel aviv, and you are the biggest carrier, i think, to israel. i'm trying to understand that. so, capacity goes down when you're not flying there, and maybe some other places.

>> yeah. >> therefore your fixed costs are a bigger percentage when you have less capacity paying for, you know, generating revenue. fuel costs are always all over the place, but it sounds like you're saying that labor costs across the board are much higher. i look at your stock price, and something is going on there that we didn't understand. >> yeah. so, look, on all that, first, israel is a big impact, but it's transitory. you know, essentially it's 2% of our capacity. we have most of those costs that are set in the short term, but they're not set over the medium term. if we were going to fly to israel, we'd fly airlines to other places. that's a transitory issue. labor costs are higher across the board in the industry. at united, we're mostly able to -- we have been able to pass that on to the consumer. just take one step back. it's not reflected in our stock price, trading four times

earnings for this year, but we also, if you went back to the start of the year, we're going to wind up this year, even with everything that's happened with israel and higher fuel prices in the fourth quarter, we'll earn double what the consensus was at the start of the year. we say the world is developing almost like we thought it would, both for united and for the rest of the industry. that development, frankly, the stress that's happening at the low end of the industry, is going to lead to changes in the industry in a restructuring that's going to leave us in a much better sustainable, much more structurally profitable industry. >> do you think those low-cost carriers will have to raise costs? i'm trying to follow what you're saying. it's broken at the low end. they'll have to raise costs, and that means more profit for the rest of you? >> well, i think that consumers have voted. as long as united has seats in the market, people are not going to fly frontier or spirit. they have to change the business model to make it attractive for customers or they'll go out of

business. >> in terms of the consumers, bookings were stronger in august and cement. are you seeing any slowdown in the consumer at all? >> we're not. second quarter, third quarter, fourth quarter, again, it's a little different at united, there are two airlines with 98% of the revenue growth, if you're in the 2%, it makes it difficult. united is strong. >> scott kirby, ceo of united airlines. they posted better than expected earnings but shy of expectations for q4. that's the guidance at this point. >> thanks, scott. coming up, we'll talk about all things crypto.

to good morning. president biden landing in israel amid an active war with hamas, biden commenting on yesterday's deadly hospital strike in gaza, saying it appears militants are to blame. another big morning for earnings. new results out from morgan stanley, procter & gamble, and insurance giant travelers. we'll bring you all of the highlights straight ahead. and bitcoin's wild ride. it was up, it was down on an apparently false report of an approved etf. we'll talk about what's next for the cryptocurrency with investor mike novogratz. we'll talk macroeconomics and everything else.

the final hour of "squawk box" begins right now. good morning, and welcome back to "squawk box" on cnbc, live from the nasdaq. u.s. equity futures are in the red, a little bit of selling pressure this morning. you can see down about 80 on the nasdaq, 17 on the s&p. treasury yields once again kind of casting a pall over the markets. you would think with the 10-year near -- how long it's been, i think it's 2006 we had been saying -- >> to for the 2-year. >> the 2-year. >> we had been saying 2007. >> but who's counting.

5.18% on the 2-year. crude has kind of been well behaved, but when that happens, it makes you wonder about the global economy. if it's not a supply issue, maybe it's a demand issue. 8 88.50 is not cheap. morgan stanley beating profit and revenue expectations for the third quarter. better-than-expected trading revenue helped the bank's results, although the profit was down 9% from a year ago. the stock is down by about 2.9%. then you have consumer giant procter & gamble beating expectations with its latest quarterly results. volumes were down for the sixth straight quarter, but the shares are higher here. a lot of that is because of pricing power. they've done well with that. stock up about 1.8% right now. the ceo, john mueller, joined us

earlier on the show oop oom. >> strong quarter, 7% organic sales growth, free cash flow productivity, 97%. we returned $3.8 billion to shareholders. it sets us up well. this is the first quarter of our fiscal year. it sets us up well to deliver against our guidance. >> finally, check out shares of insurance giant travelers, a dow component. they beat revenue expectations, but it missed pretty badly on the bottom line. the culprit there was travelers looking at some big catastrophe losses during the quarter. that was because of a lot of strong storms across the united states. it's pretty similar to how things played out in the last quarter too. higher-than-normal catastrophe losses, big storm, winddamage, hail damage. that can happen even when there's not a hurricane or tornado that takes place. it did do better with fixed income. the money they were making on their portfolio was up pretty

significantly. the stock is off by about 0.7% right now. a busy week for bitcoin. close to $30,000 on a report that u.s. regulators had approved blackrock's application for a bitcoin etf. then blackrock, if you remember, denied that report. the publicist retracted it. bitcoin still up about 6% this week. joining us right now with more on that, mike novogratz, galaxy founder and ceo. mike, start with this report. let's start with all of the excitement/hype/i don't know what about the fact that not just blackrock but so many others have attempted, at least, or have applications in to try to get a bitcoin etf going. the question is whether, just because they're asking, is it going to be approved? >> it will get approved. we're partnered with invesco on an application.

we think it happens this year in 2023. all the indications of dealing seemed to be heading in the right direction, and that's, you know, from -- >> mike, though, because i don't want people to -- people are going to say he owns a lot of bitcoin, he wants this to happen, obviously. what would you pinpoint and specifically suggest that you're seeing around the approval process that is somehow different today than it was a year ago than it was two or three years ago? >> the most significant piece was the s.e.c. lost in court, right? the judge said, what are you talking about, sec? you have a futures etf, and you're saying you can't have a past etf. that makes intellectually zero seasons. i think that put the sec on the back foot. i think gansz ler needs a win. there's a tremendous amount of pressure to do something that is rational. the american public wants this. blackrock is the largest asset

manager in the world and is out publicly saying we're going to get this done. i can't talk specific about conversations that guys are having. you know, that's on the invesco side. but talking to all the other people, it just feels like the dialogue with the sec is all heading in the right direction. >> when you say the dialogue with the sec, have you seen a shift, a fundamental shift in the way the sec anecdotally, i imagine, would have to be the only way you'd know this, has changed the approach to thinking about this in light of that lawsuit? which is to say, lena khan has lost lawsuits before in her agency at the ftc. that hasn't shifted the way she thinks about antitrust regulation in the united states. >> just the public filings back in court and the comments you're reading, people's comments are much more constructive. when you go to the comment period, what they're asking about all seems much more

specific than general. that seems to be a good sign. we'll see. i don't have a crystal ball. this is my intuition. >> right. by the way, do you have any thought on what happened this week and how that report came about? i know that they're planning to investigate how the report was written. but some people are anxious or worried there's manipulation at play. >> the last day for the sec to file an appeal on that suit came and went, so there was some expectation or excitement. and, you know, telegraph put out an errant report. we were sitting on our desk thinking i don't think telegraph will be the person who breaks this story. i think the sec probably has other sources if they want to break a story. so, i was a little skeptical myself. what it does tell you is the market will head higher on any

positive news, right. you're going to have invesco salesforce, cathie wood salesforce, all out selling bitcoin. bitcoin has always been an instrument that is sold, not bought. it's getting people in the first time, explaining to them what it is. i think by far the most bullish thing that happened was larry fink on tv saying, don't worry about that rumor, bitcoin is going up because people see it as a stored value and it has a flight-to-quality asset. that's the largest asset manager in the world. it's no longer talking about why it works or how it's important. it's just a recognized macro asset. that's a huge psychological shift. >> do you find it strange, odd -- i don't know. we watched for many years larry fink saying bitcoin was not a thing, would never be a thing, stral banks would not allow it,

regulators would not allow it. and now him becoming an advocate of it at the same time he is trying to build a business around it. >> i think he did his homework, he spoke to a lot of guys in the community. he looks at the state of our fiscal balance sheet in the u.s. and abroad and was convinced it was right, then decided to build a business around it, right. don't get it backwards. you're not going to build a business on something you don't believe in. so, you know, the bitcoin term is orange pill. he got orange pill. that is happening all around the world. you look at the richest man in pennsylvania, he's a bitcoin believer. the richest woman in massachusetts, abby johnson, is a bitcoin believer. these are not flights. these are people that run big, serious businesses that have done their homework and believe in bitcoin as a stored value for a place where populism was taking over and were running

25%, you know, fiscal spending when we should have been running 20%. m we have a fiscal situation in the united states that is a debacle. next year, the total fiscal, you know, issuance is $6,000 an american. that's why the bond market is selling off. >> speak to, though, the flow to bitcoin but as it relates to what we're seeing both happening in the middle east or seen happening to the 10-year, the 5-year, how you think all of that impacts bitcoin. because for a very long time, people thought if inflation -- or rather interest rates weren't going up, or if they were going up, that would be bad for bitcoin. yet, here we are. >> listen. that tells you there's two vectors in bitcoin. one is adoption, and the other is the macro. high interest rates are not good for bitcoin, they're not good for gold. the curve is saying we're losing faith, we're losing trust.

and, you know, you're seeing the curve is steepening. it will be at 150 basis points positive from whatever it is minus 25 right now. just look at the 30-year chart. that tells you at one point the economy slows. now, waiting for a slowing economy is like waiting for godot. but the 2-year at 5.25, it doesn't have that much more downside, right, so you're seeing people selling the back end. if that front end starts going, if that 2-year gets to 4.75, 4.50, you'll see bitcoin a lot higher. >> mike, always appreciate your perspective on all of this. thanks. >> thanks, guys. coming up, the latest headlines from israel and a conversation with form toer undersecretary of defense.

and later we'll talk about america's response to the israel/hamas war in campaign 2024 with south carolina senator m ottisct. here in hawaii there is always time. there's time to spend with family, time to enjoy with friends.

there's always time to listen or lend a helping hand. here we have all the time in the world, but no time to waste.

welcome back to "squawk box." president biden meeting with israeli prime minister benjamin netanyahu in tel aviv today. >> i wanted to be here today for a simple reason. i wanted the people of israel, the people of the world to know where the united states stands. >> biden saying that, based on information hessing, it looked like yesterday's hospital explosion in gaza was the fault of palestinian militants. the palestinian health ministry has blamed an israel air strike, saying 500 have died. israel saying a failed rocket launch by the militant group was responsible for this. regarding hamas, biden saying that the group does not represent all palestinians and brought them only suffering in

response to the hospital explosion. a meeting between biden and regional leaders was canceled. michele flournoy is the former un undersecretary of defense for policy in the obama administration, and co-found er of a company that owns a majority stake. good morning. >> good morning. >> who do you believe in this whole situation? >> well, i think from what i've heard, all the intelligence suggests that this was not an israeli attack. this was the result of -- whether it was an accidental -- you know, an errant rocket from islamic jihad or an actual operation to create this horrible situation and to put pressure on israel. so, i think it's a classic case of, you know, information operation. >> how does this particular issue get resolved in the minds of the public and the world?

is there intelligence and information that will ultimately get presented by some government or governments that will demonstrate one way or another what the answer is? right now we have a situation that has really inflamed the situation even further now. >> we have competing versions of the truth. i think there's tremendous pressure on both the israeli and the u.s. intelligence apparatus to reveal -- to declassify information and share what they know, you know, share, whether it's tracking the trajectory of the rocket, whether it's rocket debris, et cetera. we may never know, but to the extent we have information, i would hope it would be made public. >> when you think about the various permutations which all of this shows, what does the next couple weeks look like, the next couple of months? >> i think what we can expect soon after president biden departs is some kind of a ground invasion into gaza by the

israeli military with air support to try to focus on taking out the leadership of hamas, their critical infrastructure, their resweapon and capacity to launch future attacks. i think that will take weeks, if not more. but i don't think we'll see a long-term israeli occupation. israel has had that experience before. they don't want to repeat that again. the real question that nobody has an answer to yet is, once they degrade hamas or even destroy its current capability to launch attacks, who governs in gaza? what happens in that situation? and my hope is that this will be the impetus for the arab states, the international community, to come together and try to address that question. >> do you think a ground invasion can be done in a way that is surgical and in a way the global public ultimately supports? >> i think they will make every attempt to make it surgical, but in that environment, no.

i mean, this is the worst urban combat environment in the -- it's a warren of alleyways, small buildings, houses, many of which are booby-trapped, hundreds of miles of tunnels underneath the ground that hamas uses. so, it's the worst possible situation to go into. >> do you see iran getting more directly involved anytime soon? >> i think at the moment iran is milking this for all it's worth in terms of putting prshg on israel and condemning israel. i don't see them wanting to open a second front, first of all because lebanese hezbollah would, i think, earn the ire of the lebanese population if they were to start a war with israel across the northern border. and i think iran doesn't really want to come into the war directly and suffer any cost itself.

>> how about -- they say hezbollah can't decide on their own to do it. >> and i think even hezbollah is hesitant. that said, none of these sides communicate well, understand each other well. the risk of miscalculation is very, very high. the risk of one side or the other misinterpreting action across the northernborder and having that escalate is very real. >> i think everybody is worried about the potential for a broader war, but even without that, you are talking about inflaming populations around the globe. >> yes. absolutely. >> and tensions rising to crazy levels. >> absolutely. i worry about additional terrorist attacks on israel, where it's coming from the west bank or from other neighboring states. >> what do you think about the relationship between israel and saudi and where that sort of sits? just to contextual itz another piece, a number of ceos from the

biggest companies in america, are expected to be flying to saudi sunday night for their financial conference under the guise of mbs, who runs this conference. a number of them are questioning whether they should be going. >> i think phones have been ringing off the hook from ceos, should we go or not. >> should they go or not? >> i actually think they should go because we are hearing quietly from the saudi government that they don't want this to be derailed. they want to renormalize the situation with israel, and they want those discussions to get back on track as soon as possible. obviously, now is not the moment. hamas was clearly trying to disrupt this whole normalization between israel and the arab states. saudis actually want to pick that back up in the future. and i think they -- one of the signs of that is they've allowed

some opinion writers in their own media to actually write articles that were very critical of the hamas attacks. so, i think there's still an open window with the saudis, and i think we want to encourage that. >> the lip service now is the -- >> i think for now it has to be. but i think that one of the things i think will be very important is getting saudis involved in the future of gaza and the potential for a palestinian state long term. they've got to be -- they and other arab states have to be supporting and resourcing any possibility of realizing that. >> one last question. >> sure. >> you speak to lots of ceos throughout the country. do you think they should be speaking out more publicly on this issue around anti-semitism in the united states, what hamas did, and -- here's the question -- using whatever leverage or power they have, for example, as it relates to saudi? all these ceos are going to show up in saudi. you can say that maybe saudi has

more leverage over them, because frankly, saudi is our client, ultimately. but are they supposed to use their bully pulpit, whatever that is, to say to the saudis, look, you have to make a deal? >> it's an individual decision. but i think that the best posture for them to be in is, if they feel compelled to state their views in an authentic way, how they see the situation, condemning any terrorist attacks gen civilians, hoping for a normalized future and more stable future in the middle east, encouraging the saudis to continue to play an important role in that, i think that's perfectly acceptable and, you know, hopefully something that we will hear some of them do. >> okay. michele, thank you for coming in. appreciate it. >> thank you. when we come back, a check on the state of retail investors with thomas peterfy. and we'll talk the chaos in

washington with south carolina senator tim scott.

some breaking housing data. stay tuned. "squawk box" will be right back.

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welcome back. my vocal cords are --

>> i scared you. admit it. >> you did. we're just seconds away from september housing starts. the futures are down about 65 points or so. the nasdaq down 73. the s&p is down a little bit. let's look at the 10-year. that's at 4.84%. mike santoli, you have some numbers in chicago for us. what are they? >> yes. housing starts, joe, for the month of september. interest rates have been hurting housing. 1,368,000, that's the best since july. last month, 1,283,000, that was the worst level going probably back to june of 2020. i haven't seen a revision yet. so, we're basically up in the vicinity of 7% on housing starts for september. if you look at the permit side, which has been running a bit stronger, as we need, of course, new houses and also need

interest rates to be more affordable so people can afford them, 1,743,000, definitely a smidge better than we were expecting. in the rear-view mirror, we have a revision that was already established at 1,541,000, which, by the way, in complete contrasts to starts, was the best since october of 2022. that is a deterioration of a little over 4%. if you look t at the survey this morning, they claim the 30-year fixed mortgage is 7.70%. bankrate yesterday had it 7.9%. it's obvious the dynamics are working against housing. another issue if you're paying attention to interest rates, everything but the longest maturities yesterday made a new covid cycle high-yield close. the previous 2-year note had been 5.18. obviously, we closed higher. we're at 5.19. we're down a couple basis

points. and that level was 4.81 for 10, currently trading at 4.83. that's down one. 30-year bonds did not. they needed to close 4.98 or higher yesterday. they failed to do so. we're really splitting hairs here. many looked at retail sales yesterday, joe, and said, okay, that's better than expected. i don't know, bam, is emeril in the kitchen? these numbers to me sometimes don't add up. we did see yields move higher, especially short maturities yesterday, because maybe that brings the fed a little warmer. for the most part, many think the recent jump in interest rates has more to do with debt, deficits, and maybe what lies ahead with regard to japanese monetary policy. one quick note, if you look at housing starts now and you consider that in may of 2018 the high-water mark for 11 years was 1,357,000, which stood until 2019, my point here is, as

slippery and downtrodden as starts are, they sort of kind of fit into what we were looking at precovid outside of the very last month of 2019 and obviously what happened in 2020. back to you. >> what's the next big data point? it's impossible for you to predict, but, like, should i be sleeping soundly tonight, for example? what about next week? what should i worry about next week? what's coming up that could give us that next leg up in rates? >> we get our first look at third quarter gdp next week. that will be important. but in my opinion, i would pay attention to the bank of japan's next meeting. i really think that there's much context with regard to the weakest link, the most stimulative large economy and what they've been doing to keep their currencies weak, of course, through manipulation of their interest rates and yield curve. that will slowly have to come to

an end, and that is definitely going to put more upward pressure on the entire area of interest rates. i think that's going to contrast with the lingering strength in the labor market and retail sales. in my opinion, the runway is going to be running out at some point. i'm amazed as everybody else it's lasted this long, and i think ultimately in four or five years when we look back, maybe some of the reasons will be a little more clear than they are. >> remember that last -- like, japan barely did anything with the range, and we remember what happened. rick, thank. steve liesman joins us now with more. money never sleeps, pal. you have to be awake. it's on the other side of the world, steve. things can happen anywhere, anytime. >> and it would affect us right here. but, joe, i can tell you, having

talked to foreign trader, they hate the idea they have to wake up at whatever time to get the u.s. jobs report. they say they'll be happy once the trade in india is not reliant upon what happens in the u.s. we heard how global the whole thing is. m these are good numbers for housing. i do see, by the way, a little bit of movement upward in interest rates. i guess rick and i fundamentally disagree on the main cause of this rise in rates here. i see it very much as a response to stronger growth. it looks like every time these stronger numbers come out, the yields do, indeed, pop. yesterday was a good example. if you look back at the 10-year if mid-july onwards, i see it was -- mid-july was when that retail sales report came out for june, and you had that surge then. issuance is definitely an issue, but i'm not saying it's the whole issue. if you go back and look at

housing starts to, say, the 2015 time period, what you'll see is we are not far off right now the averages for that time period. in fact, if you go back to 2015 and take it to the pandemic, the average is 1.2 million units at jeannie ahn yule rate. now we're doing 1.3 million and change. so, it really hasn't fallen that far. what has fallen is existing home sales, and that could be in part because of something that was reported, which is that people are getting help from the builders in terms of buying down or paying down some of the mortgage rates. that may be a sign of where existing home prices are going. existing home prices, guys, will be more sticky than the builders out there, and they are not yet offering the discounts that would be needed for supply and demand to meet. i'll leave it there, joe. >> all right. great, steve. thank you. so, don't sleep. let's get back to the markets and talk about the state

of retail investors. we want to focus on interactive brokers, the company reporting new earnings that beat the street's expectations. but they said customer trading volume was mixed. you had options contracts volume up by 18% in the third quarter. the stock share volumes, though, down by 22%. that stock right now off by about 3.7%. joining us to talk more about it is interactive brokers founder and chairman, thomas petterfy. welcome. let's talk through some of what you're seeing. you beat expectations on the top and bottom line. volume was pretty tricky and pretty volatile. how would you describe what you saw during the quarter? >> so, the stock volumes had been going down for a while, but at the same time, options volumes had been rising. all in all, volumes had been

trading up about low single digits. >> what explains what's happening with retail investors? why do they not want to trade individual stocks but they want to do these options? is that just tied to volatility in the markets. >> well, there's been confusion in the market, is it about to be a bursting of a magnificent bubble. people are on both sides of this situation. so, people have large, unrealized gains in the mag nave sent seven stocks. they are not going to liquidate them, but they are trading options around it. so, you know, especially the options become extremely popular, and they are trading them by the barrel, so to speak.

>> what's more profitable for you? do you make more money on an options trade than you do on an individual stock trade? >> yes. they make more money on options because option commissions start at 65 cents. they go as low as 16 cents. most other brokers are staying around 55 to 65 cents depending on volume, of course. >> sorry. go ahead. >> it's definitely more profitable for brokers than stocks. >> customer accounts were up 21% to 2.43 million. where did you get those new customers from? were you stealing market share? are these people who are coming back into the markets? what happened? >> our customers come to us from all over the world. they're basically the only broker that is serving customers all over the world in 200

countries. trading generally is not very well accepted yet in many countries around the world. so, there is a huge path for that. >> you have been pretty outspoken in the past about geopolitical events. obviously, you're an entrepreneur, and you came over and created a huge company. but you look to what's happening in ukraine, and you look to what's happening in the middle east right now, and what worries you about these situations? >> i am most worried about china taking van of this situation and going into taiwan. that's my greatest worry. >> i think people look at what's happening in the middle east and are concerned if it expands from the one-front war right now between israel and hamas, that a

similar situation kind of jumps out, that if this expands, that's the case, too. >> there are some worries. there's china and this middle east situation becomes a public relations war more than a shooting war. and that is going to be a very difficult situation for israel. >> anything that business leaders can do at this point? or do you think this is kind of beyond the business community? >> no. i, myself, would not get into it, no. >> i'm sorry, thomas? >> i wouldn't get into this. it's a very touchy situation. >> yeah. i agree. >> better to stay out of it. >> let's stick to what we're seeing in the markets right now, which is your field of expertise. go ahead, thomas. >> yes. we had many customers in israel, but we also have customers in the other middle eastern countries.

so, you know, it's a gray area. this is not good for people. it's not good for business. it's not good for the world. it's not good for anybody's future. it's a terrible situation. and the sooner it gets peaceful, the better off we all are. >> let's talk about your concerns when it comes to the market. the state of retail investors at this point, where are they? how do things stand? >> so, you know, they are basically -- our customers are not as retailers as the schwabs of the world. there are more professional investors, and, you know, there is to some extent shorts on investors because, you know, when they look at the markets as they were yesterday or the day before, our customers are --

they are by far -- many people are short. given that the s&p is trading at 19 times and the earnings growth is only low single digits, that gi gives you something way above what is reasonable for valuation. the magnificent bubble is going to burst. >> thomas peterffy. thomas, thank you. we appreciate talking to you today. >> thank you very much. when we come back, a lot more on "squawk box." south carolina senator and presidential candidate tim scott will be joining us on the latest developments out of israel and the u.s. response to the violence in the middle east.

it's been 11 days since the israel/hamas war began. our next guest just introduced a bill that aims to prevent iran from accessing billions of

dollars in frozen assets that were made available to the country as part of that u.s. prisoner exchange last month. nbc news reported last week that a treasury department official did tell house democrats that the u.s. and qatar had agreed not to let iran access the fund. joining us now, south carolina republican senator tim scott. he serves on the foreign relations committee and isa 2024 candidate for president. senator, good to see you again. >> good morning. >> good to have you on "squawk box" again this morning. i remember the shock, senator. this place has been a thorn in our side and a problem for decades. >> absolutely. >> sometimes, you know, the idea that we need to engage with our enemies, sometimes that seems like the appropriate tack. other times, it's, like, what are we trying to do when it's a

country that wants to destroy israel and wants to destroy us? and we mismanaged it in recent years. >> we have. one of the things that you're seeing in the last couple years is the weakness of president biden with conflict across the world. you hear his comments. it's a small incursion in ukraine might be okay. don't attack these areas from a cyber perspective as he's talking to putin. then you watch what happens with israel. hamas attacks, the bloodiest day since yom kippur. or we have to stand shoulder to shoulder with no daylight with our allies. the world needs to know that we are loyal to our allies, and we will be lethal to our adversaries. that's been missing for the last couple of years, and frankly, the hostage payment of $6 billion -- you know, joe, i said it under the obama administration, when he paid $400 million for hostages, you will only increase the price on

every american life abroad. and now we see $6 billion. is first misstep is paying a ransom. the next misstem is not realizing you cannot make a good deal to with a bad actor. and iran is a bad actor. 90% of the money that goes to hamas comes from iran. after the attack, hamas thanks iran. freezing those assets actually will save lives. we must not only stop there. we must go one step further and have the secretary of the treasury, that's why i'm leaning on this bill, having the secretary of the treasury report on all assets iran has, over $5 million, so that we can target them and then extend, finally, my legislation from may, extend the sunset. we make it permanent. sanctions on the energy sector in iran. they must feel the price. >> plenty of blame to go around.

republicans picked a bad time to, you know, be basically unable to fund israel and, you know, ukraine, regardless of -- i've seen people go back and forth about how much more aid we should give to ukraine. but we're not giving ate to anyone, even to israel at at this point, because of this -- what's happening in the house on the gop side of things, senator. >> yeah, absolutely. one of the things i would suggest if i were president of the united states, i would be calling on my party to have a speaker pro tem so that business can be done in the house. it's, quite frankly, 221 members, republicans, we need 218 to choose a speaker. why don't we get the people's business done by making patrick mchenry at least the speaker pro tem so legislation can move so that the funding apparatus that will be necessary to support israel has a path forward. get it to the senate and let the president sign it. there are things that can be

done as a stopgap measure to make sure that the house continues to function. if i remember the president, i would be at the microphone telling the party, let's remember, the road to socialism runs right through the divide in the republican party. get the people's house in order. then i would frankly encourage a changing of the rules. having 4% of your congress able to eliminate your speaker is probably bad decisions after bad decisions, even into the future. >> senator, you, early on, mentioned frequently, as maybe a viable alternative to former president trump, but i don't know what you need to do. you have a pac. i like the name. it's trust in the mission, but it stands for t.i.m., so your tim super pac, they're not going to spend any more money on tv. they're going to focus on grassroots, but in explaining why they're doing it, they're

not even really blaming you or talking about your prospects. you haven't qualified for the next debate. you're maybe in some of the early states you're as high as 6%, but low single digits nationally, and your south carolina colleague is ahead. they're just saying at this point, no one's focused on ready for a trump alternative, and this is a direct quote from the co-chair of the super pac. "we're doing what would be obvious in the business world. we're not going to waste our money when the electorate isn't focused or ready for a trump alternative." what needs to be done? could we -- could republicans coalesce around one person if there is a smaller field, and do you need to drop out? >> well, obviously, i'm in for the long run without any question. i don't know -- i trust senator cory guardner. i chose him to run the super pac. he's doing a good job. one of the things we've realized throughout the last several days

is breaking through any of the media with any campaign material is useless. why waste those resources when you can save them for the end of the campaign when you will have the opportunity to break through? knowing that and knowing that the number one job that we can do right now is support israel, we know that every news cycle, we're going to focus on our job and our responsibility to lead on sanctions legislation, to lead on closing the southern border or at least let us freeze the assets and provide sanctions to the council of the mexican cartels. these are things that i can lead on right now in this challenging time in our nation. we're using those resources when they will count the most in late december and early january, it's a good decision. my assumption is that is a decision being made by my super pac. more importantly, making sure that america, the entire nation, leans into support for israel is something we should all focus on right now, because it's the only thing that's mattering, and

that's the one thing that breaks through in all the news cycles is making sure that america understands that all of our leads should be standing shoulder-to-should and back-to-back with israel. >> senator, do you -- this is where you get in a tough position. do you think that this would not have happened under former president trump? and if you think that, then kind of like a campaign ad for him. or would you say is there something to the madness of king george to have a regime where our enemies are so afraid because anything's possible from the leader that they don't -- i mean, there is something to be said for that. someone can be so unpredictable that they're afraid to do anything. i don't know if that's a good thing. >> or we could have a president who remembers ronald reagan, peace through strength. it works. you don't have to have someone who's volatile to lead our country. you actually do better with someone who's optimistic and

positive, anchored in conservatism, who understands the reagan doctrine of peace through strength. i would be that president. having someone who has no daylight, someone who's not negotiating with iran for a new nuclear deal, someone who's not talking to putin and saying to him, here's things that we wish you would not do in our country, love, the president. we need strong leadership with a backbone that speaks clearly, consistently, and concisely as it relates to the issues and the topics that will protect the american people and encourage opportunities around the world. >> sounds good. all these things. we'll see whether it starts resonating, senator. we are in crazy times, are we not? >> we are indeed. >> we are. all right, well, good luck. good to have youn aay oaslws, senator. "squawk box" will be right back. but if it's using untrusted data can you trust the results? your business doesn't just need ai, it needs the right ai for your business.

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welcome back to "squawk." a little over half an hour to the opening bell on wall street. frank joins us now. >> morgan stanley, shares moving down about 3% lower despite inline revenue and a beat on eps. profit was 8% above estimate

buzz still 9% lower year over year. revenues of $938 million, well below the estimate of $1.11 billion. wealth management also missed expectations. again, shares down more than 3%. travelers insurance moving lower after a beat on revenue but really actually moving higher now. 1.25% after a beat on revenue but a big miss on eps. profit more than 30% below estimates, catastrophe losses that led the personal line of business, which generates just about 40% of revenue, to be unprofitable. however, that headwind was expected. you can see right here, shares up over 1%. last but not least, procter & gamble shares moving higher this morning. profit, 6% above estimates. 7% organic growth, that beat estimates. shares up 2% right now. the fabric and home care business that includes mr. clean and downy, really, the driver of the quarter. becky, back to you. okay, frank, thank you very much. let's take a final check on the markets right now. the futures have been in the red all through the morning. in fact, dow futures are down by

triple digits at this point. get that loss of about 108 points ahead of the hope. we had some disappointing earnings that came in, including from some dow components, and that could be putting some of the pressure there. nasdaq down by about 109. s&p 500 futures off. we've been watching yields too. right now, the ten-year is at 4.862%. that does it for us today. join us tomorrow. right now, it's time for "squawk on the street." nooelts ♪ good wednesday morning, welcome to "squawk on the street," i'm carl quintanilla with sara eisen and mike santoli. futures under some pressure this morning with bonds yields still flirting with these cycle highs. oil near $90, the president in israel and the market very sensitive to headlines. our road map is going to begin with a big day. p&g