good thursday morning. i'm sara eisen with carl quintanilla live from post 9 of the new york stock exchange. netflix and tesla moving in opposite directions from the earnings. what went wrong and right for each. san francisco's president larry bair is live from oracle park. he'll joining us with his plans to revitalize san francisco. we have a first on cnbc with the ceo of novis. we talked about the ten-year yield getting close, within two basis points of 5. meanwhile, holding by one point. a lot is still headed our way as we get a ton of fed speak over the next, say, ten hours. >> the ten-year and 30-year

yields continue to march north. let's dive into the markets as we await jay powell's speech in an hour. those yields on the rise. our next guest reiterating her cautious but not bearish outlook saying the risk/reward for equities is not very compelling. joining us is holly newman kroft, ranked by barron's as one of the top financial advisers in the united states. welcome back. good to see you. >> good to see you both. >> these yields continue to rise. i think it surprised a lot of people. how does that impact the way you think about managing the portfolio? >> i think the way we position portfolios is we have to take advantage of the gifts the market is offering us today and also protect against risk. as yields march north, our clients can get a really attractive yield in fixed income. we're able to reposition client portfolios to get almost equity-like returns with a muni

portfolio. that takes risk and volatility out of their portfolio and also positions us to take advantage of when the market comes down being positioned to do so. >> we just haven't seen the kind of drawdawn that you would like to see to get excited about stocks. >> we're not excited about stocks, especially when you can get these returns in the fixed income space. you know, i spoke on your financial adviser summit last week and the question was, is the 60/40 portfolio dead? i would argue it's more alive than ever but modernized to include the alternative asset class space. with with the democratization of the asset class, it's available more widely to investors. it offers higher yielding returns than equities. and so we can be overweight alternatives as we have been all year, overweight fixed income. we maintain a neutral position in our equity space. and just sit tight. >> what percentage of your

portfolio should be in alternatives? >> that depends on the client and on the investor and their risk profile. also their income needs. in the alternative space, you're sacrificing liquidity for higher return. so, you have to be very clear with the client about what they're investing in, how illiquid it and and make sure you're managing on the other side of the portfolio for any income needs they might have. >> is 5 or 5.2, or whatever shoot we get, market buy? >> it might be. we would like to see inflation come down. there's some debate even if we're going to hit that 2% number. if we can see inflation come down to 3% and economists give some credibility to the fact that these higher rates are going to cause an economic slowdown, the market has been buoyed by the consumer all year. and i think these higher rates are going to be punitive both to the consumer and to stocks.

so, we're going to see -- when there's some credence to downward pressure on the equity market, we'll start to think about going back in. >> has any of the early evidence in whatever it is, airlines or travel or -- been compelling to you so far? >> not yet. i just don't think we have to take the risk. there's so much uncertainty in this market that the leading indicators remain negative. there is some suggestion that maybe it's such an unusual market that you can contradict all of history. but i just think it's not worth the risk today when you can capture other returns -- higher returns in safer asset classes. >> are you surprised we haven't seen more of an impact on the markets from what's happening in the middle east? are you fielding a lot of questions about this? >> we're fielding a lot of questions as to why the market hasn't had more of a reaction to the middle east. i think the market is desensitized to conflict, middle east tension. i think that's something that we

see. this time might be different. since october 7th, since that terrorist attack, the market has been flat. the risk to the market is if this war escalates to include other countries, becomes a much bigger political, geopolitical risk on the system. but for right now it's contained. president biden was just there. western nations are trying to keep it contained. and we'll just have to see how that plays out. >> is there a hedge? i mean, when people ask you, okay, this is the world we're looking at, should i increase allocation to gold or oil? >> i don't think that this -- what happened on october 7th is repositioning client portfolios. we've had geopolitical risks all year. the war between russia and ukraine, china has slowed growth so dram technically when they were responsible for so much of the s&p returns in the last decade. so, we've been cautious anyway around international exposure and we focus more domestically. so, this just reinforces that view right now.

>> finally, we're about an hour away from powell. and i want to ask you about what you expect him to say, but collectively, has the sheer volume of fed speak been constructive in any way? >> there's a lot of fed speak we're hearing. i don't expect powell to say anything unexpected today. i think he's going to reinforce the fed's commitment to combating inflation. i think we are at or near the highs. i mean, if they have another 25-basis-point hike, i don't think it's going to have a huge impact. i just think inflation has proven so sticky and the consumer has proven so strong, especially in the united states, because we are a service-based economy. we're going to see that start to turn. it's not a question of if but really when. >> i notice you said within fixed income you're putting people in munis you prefer over treasuries. are treasuries riskier? >> munis you can capture higher

equivalent yields. we want to capture the best return for our clients on a risk-adjusted basis and still, of course, always taking into consideration their income needs. >> thank you. >> thank you. >> good to check in with you. and with that, let's turn to the latest in israel. president biden now back here in the states, expected to address the nation tonight in televised remarks at 8:00 p.m. the timeline for potential ground invasion in gaza still unclear. we're joined at post 9 by former secretary of defense, mark esper. secretary esper, it's good to have you here. >> good to be here. >> what do you think we'll hear from the president tonight? >> i think he'll speak to the state of play in israel with regard to the attacks by hamas into israel and the expected incursion by israel there. i think he'll speak to the humanitarian concerns that is ever present. and i hope he will speak about iran and what it may mean for an expansion of this conflict once

israel begins that incursion into gaza. >> what does it mean for iran at this point? >> well, look, i think given the messages we've seen from iran, we hear from hezbollah that if they go in, i expect that you'll see a widened conflict on the southern lebanon border. we hear reports today of more m missile attacks into israeli communities. less reported attacks on american bases. you see some of the rhetoric coming from tehran and rhetoric from other parts and still at play are the 200 some hostages that hamas has threatened to execute if israel comes in. it seems likely this is going to widen some. when that happens, the u.s. military will be involved. >> to what degree? >> i think if hezbollah crosses the line, not these tit for tats but begins a rocket barrage, things like that, then i think given our rhetoric, two carrier strikes soon in the eastern med,

we'll have to have tomahawk strikes, otherwise our position on deterrence looks weak. it looks like we're not following through. >> boots on the ground? >> i don't believe so. we obviously have u.s. military in israel right now helping. you could see boots in the ground in hostage rescue operations involving americans. but in southern lebanon, northern israel, no, i don't see that right now. >> i mean, the -- it's a risk for iran, certainly, if they were to do this given how much the u.s. has come out and backed. you do not think they'll be dissuaded by the ships in the mediterranean? >> i don't know. that's the unknown. you see the rhetoric coming out of tehran, the attacks on u.s. bases. you see what they're saying. you have to expect the worst. once the conflict begins, it can unravel very quickly. i don't foresee boots on the ground in northern israel, but what happens if an american pilot gets shot down? what do you do then? these things can escalate very quickly. i think it's right to be talking about deterrence, moving troops

in. i think those are smart moves. i'm hoping to hear more from president biden about the role of iran in this process and pushing back, sending a stronger deterrence message. if it expands t will affect the market like your previous guest said. this is not good for the regional economy, not good for energy. there will be a lot of spinoffs and affect more people broadly. >> nypd put out a statement saying the city as an example is on heightened security stance. what is the likelihood of an attack on the homeland? >> well, look, we have members of these groups in the united states. that's not a secret. and you see the unrest in cities, on college campuses, you see the outrage on arab streets. don't expect arab leaders to tamp that down. you'll see that proliferate over time. of course, we have russia stirring the pot there, disinformation, because this helps their situation in ukraine. these tentacles reach out far and wide. >> china and russia aligned

against the u.s. we saw that on full display. what about their relationship with iran, do they come in to support iran? >> i don't think they'll come in much to support iran, but you see china lining up with the arab states because they want to fill that vacuum. on the back side of this, they want to seem aligned to the arab states. that helps them capture, you know, if they want bases in the middle east, particularly in the gulf. that helps them a good deal. expect them to stay there. russia will continue to support iran because, of course, it gets a lot of its drones and support -- military support, munitions from iran as well. >> meanwhile, how would you characterize ukraine's ability to make some forward motion, be on the offensive at all? >> you know, the counteroffensive has slowed down. there's been a lot of movement by russian forces in the north that's being underreported. look, i think part of the problem has been we have been too slow to provide ukraine what it needs. the tanks are just arriving, the f-16s are months away.

if they would have had these things in the summer, i think you would have seen a more successful counteroffensive. >> this is a narrative, this is not a political question although it gets politicized, there's a narrative this is all happening because nations are hostile to us smell weakness. that the u.s. is weak. we don't have a speaker of the house. the global winds are changing and the international order. is that true? >> i don't see that as much here. i mean, clearly people point the finger more strongly to biden's withdrawal from afghanistan as the reason why putin unvaded ukraine. i think there's some weight to that. i think we need to speak out more strongly about iran and more nations aligned, put are more pressure on iran. just yesterday the sanctions on iran's ballistic missiles and drones that was part of the nuclear deal expired and there was no action at the u.n. to reinstate them. now they're free to export drones and ballistic missiles, which are the biggest threat to us in the region.

i think what prompted hamas and iran is facts normalization talks between saudis and israelis was moving forward. if that will happen, it will undermine hamas, strengthen the palestinian authority to their detriment and, of course, align the arab states with israel against iran. >> can that still happen? >> i hope so. i don't think any time in the near term. we need to get on the back side of this. look, anything iran and hamas opposes, we should support. that's in the interest of more peace and stability in the region, particularly as things line up against iran. iran's been strengthened the past couple of years. its support to russia, russia's support to iran. it goes on and on. we need to recognize the threat here. kind of dropping sanctions, talking nice to them is not going to change iran's goals and their behavior. >> certainly that's what netanyahu argued today, they saw normalization happening. i wonder how durable you think his tenure is given what some argue is a big intelligence

failure? >> i said it the morning it happened, the morning we woke up and said, will this result in immediate destabilization, the netanyahu government, or will the nation rally for some time and deal with it later? i've argued it's been both a security failure and military failure. where were the guards along the border fence that could have stopped these incursions from coming in? i think there's a double failure. there will be time for forensics later but it will call into question down the road what type of government do the israeli people want when this settles down. we won't see that, i think, for months. >> if you were still in the defense department as secretary, what would you be advocating for? you warned us last week the u.s. really needed to boost its munitions and defense tending. is that going to happen? >> i think the immediate moves make sense with the carrier strikers. i would be beefing up our presence on the arabian peninsula as well as safeguarding actions from iran, the biggest of which is ballistic missiles. i think we should be aligning our allies and partners to deal with what could emerge here. i also think we should continue

to provide strategic intelligence. you're right on the munitions into the defense industrial base. we do not have the depth and capacity right now to sustain a war in ukraine, a war in support of israel, and a possible conflict in northeast asia with china. we really need to double down our efforts. we're just not there yet. it will take years, frankly. >> i feel so much worse after hearing from you. but thank you. >> sorry about that. >> a lot of pots boiling. >> absolutely. >> thanks. tune in tonight for special coverage of the president's address to the nation. "last call" is going to air that beginning at 8:00 p.m. eastern time. later this hour, a check on the regional banks. the ceo of synovis is with us. a look at netflix, tesla and at&t. some big post-earnings moves. stay with us. ♪ ♪ every day, businesses everywhere are asking:

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earnings mover of the morning goes to netflix serving double digits. big beat across the board. the big number was subscriber growth, 8.8 million added last quarter. the highest since the height of the pandemic when everyone was going online. netflix said it would raise prices on some subscription tiers. street loving the results. morgan stanley, key bank, truist all upgrading the stock. the forecast, carl, that next quarter would be similar type subscriber growth pleasantly surprised everyone. commercial real estate under pressure. msci reporting distressed commercial real estate value in the united states has hit the highest level in ten years with office properties accounting for 41% of the at-risk assets. one major global real estate player stepping up presence, cambridge establishing first business presence in the u.s.

with a new york office as it seeks to build up its $28 billion u.s. portfolio. joining us ceo natalie is with us. it's great to have you. welcome back. >> thank you. >> what do you see? opportunity here? >> first, i'm very happy to break the news of the opening of the office in new york here on cnbc. i think it's big news and it's realistic about what's happening on the market. if you look around, it's not just bad news and good news, obviously, it's not as minor as it is, but nevertheless we have a lot of issues, challenges and we have to be close to the assets. that's why we're here. >> do the bargains exist today or are you trying to get in place for when they do appear? >> we have to be ready the day interest rates stabilize, even if it's the highest level. what we don't like in investment usually is uncertainty. those days it's a lot about that. but i think the long-term trends will prevail. >> does that stabilization seem

like it's close? >> it's not me, it's not for me to say. i know jay powell is talking a little later, so that's very tough for me to talk just before him. but that's not my job, in fact. i'm not here to bet on interest rates. i'm just here to invest smartly, to make the right choices and to prepare the future of real estate. >> how bad is office right now? >> office is -- was bad already, i would say, at the beginning of the pandemic. the acceleration today. it's not just about bad assets. it's also about bad liabilities. so, when you have bad on both sides, that's where the problem starts. but if you have liabilities you are not forced to reimburse, for example, if you have good partners, you can be patient. >> would you invest? would you be buying office buildings right now? >> it gets to what i said about bad assets. there are bad assets. i have been talking about that for a long time.

i think we were probably among the first investor to say, there's a secular change at stake. it's not just a simple cycle. it's something deeper than that. it's what we're experiencing right now. >> how high -- i wonder if you think vacancies have hit a high. there's been a lot of reporting about employer efforts to get people back in office. some argue it's paying off. others argue there's this ceiling they're bumping their heads against. where are we on vacancies? >> there's a survey just released by kpmg about the feeling, the sentiment of ceos. last year they said -- 32% of them said within three years everybody would be back to the office. and now it's 67%. so, it doubled within years. you see it's not -- it's not -- we have not landed where we're going to be. if i can be disrupted, i think we should just stop counting the number of days we're back to the office. we just realizing it's about

productivity. it's about sustainability. it's about responsibility as leaders. >> what about commercial real estate in general. everybody's been sort of the -- we've seen in the bank quarters that the provisions for bad loans have gone up around commercial real estate. everyone is waiting for the shoe to drop. we don't know whether it will have systematic risk to the economy. what's your take? >> we have heard this morning some regional banks talking about their situations. we see that they're tackling with that. we don't see major cat stroefic coming from there. we have to be patient. we don't like what's happening currently at all. but again, we did real estate in the '90s when interest rates were very high. it was possible to make profit. so, i think we're going to get back to that. that's true. that for the time being the

capital market especially is not able to make a difference between what's good and what's bad and what you can finance and what you can't. again, i really think that the long-term bets, and that's why real estate is a long-term investment, would really show what it's about. >> finally, what's more interesting, the cities some argue are really challenged, like portland and san francisco and some others, or the ones that saw growth but overbuilt, some argue, like austin, for example, where there's a bunch of new supply coming online? >> that's true. you know, i think that, again, if you look back, everybody would have been focused on what we used to call the cbd, like the single tenant towers. we've talked about that already. and today what we see really working very well is the mixed use. maybe it's what's going to happen in the city like new york when you would think maybe it's going to work 24/7 at a point.

so, not just big office buildings, but also residential and housing and housing, as you know, is really the crisis of the moment. we have to solve that. if you look around in -- globally and if you compare the united states to some other cities, you can pick tokyo. tokyo is a good example. you think it's a dense situation but it works very well because it's both real estate dedicated offices, housing. that's why it works well, which is not the case of san francisco. >> and zoning is a huge challenge. we're working on that in midtown here in new york. that's for sure. >> definitely. and, you know, i think that politics is more than ever involved in real estate right now. and that's true that we are very dependent from what's going to happen in terms of permit, in terms of zoning. we really need those public partnerships to really improve the situation and bring solutions, especially for

housing. >> natalie, thank you for coming in. it will be good to have you closer by. appreciate it very much. >> you're at the fox building where you have -- >> yes. up next, more on the street's reaction to those tesla results. right now on pace for its third down month. the stock is down 9.5%. and we go live to san francisco, talk to the president of the giants, launching this new campaign to try to revitalize that city. stayitus wh . is it possible to fall in love with your home... ...before you even step inside? ♪ discover the magnolia home james hardie collection. available now in siding colors, styles and textures. curated by joanna gaines. power e*trade's easy-to-use tools, like dynamic charting and risk-reward analysis

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the miss for tesla is sending shares lower. these are the lows of the session as price cuts weigh on profit and the macro environment weighing on sentiment. elon musk said on the call, quote, i'm worried about the high interest rate environment we're in. i can't emphasize this enough. the street also concerned about the stock. bernstein did reiterate its underperform today while goldman, morgan stanley all cut their price targets. we're watching that as the debate continues as to whether or not you value this as a tech company, more software, or a legacy car company, more hardware? >> i keep thinking of dan ives in ways he could only say. when you look up the word disaster in the dictionary, there should be a link to this tesla conference call, but he still likes the long-term thesis. we're getting news on the house speaker vote out of washington. emily wilkins has that for us. emily? >> hey, sara. there's a new plan. initially they were going to be voting on jordan again for speaker, but now jim jordan is throwing his support behind

temporarily em poiring speaker pro tem patrick mchenry to pass legislation. we're told at this point mchenry will be empowered to pass things until january. there might be restrictions around that. republicans are meeting as we speak right now, trying to figure out exactly what the path forward is, how much support this has. i was talking to members as they were going into the room today. some said, hey, we still have concerns with the idea of temporarily empowering a speaker. they want to keep going with jordan. jordan himself said he's still going to run for speaker, he just needs more time to make sure he's getting the votes. we might not actually have a speaker speaker until january, but the republicans want to make sure they are able to move legislation. that includes funding, of course, for israel as well as funding the government. we are less than a month away at this point from a potential government shutdown and really at this point, republicans don't want to go through that process again. they want to fund the government. of course, we'll get more details as they come out of this

meeting today with exactly what the plan is going forward. >> i guess progress. i guess it's good if they can actually legislate even with no formal speaker. thank you. we're about two hours into trading. let's go post to post with bob pa san? i for a look at what's moving. recovering but still down. >> and musk had the tenor right. everyone is worried about the interest rate. two sectors we're trying to figure out a bottom for. first is food stocks. it's been relentless. smuckers right over here. we were 140 -- just a short while ago, 140 a month ago, now 114. still dropping. you heard about private label pressure on the food companies. you heard about weight loss drugs, potential pressure on them. you can look anywhere, conagra, kellanova. the other is the airlines.

everything has been cut by a third since the middle of july. delta was are 45 in the middle of july. most of the airlines are down a third since then. you talk about higher fuel costs, we've heard vague concerns maybe consumer travel might be slowing down but we're not hearing that in a big way from the companies themselves. it's just relentless, though. today a little more stable. let's see if we can get a bottom. >> a couple sectors moving up. insurance stocks, progressive missed on earnings, but the one thing that mattered, premiums for the car and home, all much higher. that's what matters. 142 on friday. look at this. 158 today. that's a big, big move. these are low beta stocks. they don't normally move that much. the competitors also moved on this as well. allstate, for example, also moved up. again, premiums, not good news for us, obviously, consumers. other one here, big -- nike, big dow stock.

remember what happened to nike, lamenting on going 105, it was, in the middle of august. and then dropped down to 90. the day of the earnings a couple weeks ago, the earnings report was just generally much better than expected. they had leaner inventories, better margins than people expected. it was 105, goes to 90 the day of its earnings and back to 105. it's a perfect v-shape in the last couple of months for nike. a lot of investors in that stock with their heads spinning around. back to you. >> thanks, bob pisani. let's get a news update with contessa brewer. >> the fbi is seizing $1.5 million and 17 names in an investigation into thousands of north korean i.t. workers secretly working for u.s. companies to fund its weapons program. authorities say kim jong-un's regime dispatched i.t. workers to hide their identities and work remotely in the states to earn the money. officials did not name the companies that hired those

workers. the biden administration is temporarily lifting some restrictions on venezuela in a sign of support for democracy in the country. the us suspended sanctions on the country's oil, gas and gold sectors are a response to venezuela's government and an opposition group agreeing on conditions for the next presidential election. and new york is suing the winklevoss twins led crypto exchange gemini along with genesis and its parent company, digital group, or dgc. the state claims those firms defrauded investors of more than $1 billion, in part, by failing to manage the risks associated with exposure to sam bankman-fried's bankrupt crypto firm ftx. gemini says it disagrees with the lawsuit. dcg has not yet commented. the fallout continues. >> yep. thank you, contessa. the ceo of regional bank synovus is coming up next. that stock getting a boost following earnings. oua tu tstc ng its optimisti

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plenty of earnings movers today. let's get to another one and get a check of regional banks. synovus up 2% after reporting higher than expected net interest income. joining us for a closer look at the quarter in an cnbc exclusive is synovus ceo kevin blair. good to talk to you again. >> likewise. it's good to be back with you. >> i hope you don't mind if we just dive into credit quality, talk about some of the chargeoffs and the degree to which this is going to be manageable going into this cycle. >> well, i think you used the right word, it's manageable. we've said for several quarters that when you're coming off five-year lows in both credit cost and some of the credit metrics there's only one place for the metrics to go and that's up. that's what you're seeing happening. your word of manageable is how we like to talk about it. when we look at full year of

chargeoffs it's below 30 basis points. that's within our expectations. and in many ways, just like your previous guest, we looked a lot in our individual asset classes. we've seen some improvement. we actually saw our nonperforming loans in commercial real estate decline quarter-on-quarter. even though there's some pressure and credit card rates will drive interest higher, we believe it's manageable. >> does it feel like the kind of environment you were hoping for coming out of the industry mess in march? >> well, here's what i feel. i feel like we're focused on controlling the things we can control. what's happened this quarter is we're starting to bring uncertainty into areas that were uncertain. to your first point in march of this year we had bank failures and there was a lot of questions on whether regional banks could weather the storm and remain solvent. i think we can close the chapter on that narrative. we've actually grown deposits two quarters in a row. good, core deposit growth. we're able to return to normal

liquidity environment so we closed that chapter. the other question mark around higher rates is what's going to happen with bank margins. yes, we're continuing to see our margin contract, but if you look at the last two quarters, last quarter 23 basis points, this quarter nine basis points. we're actually projecting the margin will hit a trough in the fourth quarter. we have about $30 billion of fixed rate assets so that we'll begin to reprice in '24 so the margin contraction will actually turn into margin expansion. i think we're bringing some certainty into areas that were uncertain. we haven't eliminated some economic risks or volatility but i think it's becoming clear for us. that is going to allow us to return to a more normal position of growth. >> even with the higher for longer mantra that continues to reverberate? >> yeah. rates being higher for banks, we're asset-sensitive to the long end of the curve. as i mentioned, we're going to see a lot of fixed rate assets

start to reprice, which will drive up or margin. it does have the impact of reducing growth. so loan demand will be muted just like it is today, given some of the uncertainty. sara, let me share with you a survey we do every quarter. we ask our commercial clients, and i think this quarter we had 700 respondents to the survey. we asked them, what are the prospects for your business over the next 12 months? during the second quarter, 71% of those clients said they expected their business to be flat or greater over the next 12 months. and even though rates are higher and there's a greater deal of uncertainty this quarter, we had 66% of our respondents come back and say business would be the same or higher. so relatively speaking it's starting to decline a little bit, but it's still very positive in ai aggravation. >> i'm curious what you're projecting. tim spence told us from fifth third last hour that the plan is to take share. what do you project for loan growth in the coming months and

into next year? >> well, what we've said for this year, we'll have around 1% to 2% loan growth for the year. that's a function we've had some asset sales. we've downsized certain portfolios. if you think about synovus, we're in the southeast. what we've said through a normal cycle, we're going to grow loans faster than what the underlying economy is growing. if we're expected to see the economy grow at 2%, 3% in the coming year, we should expect to grow in that mid single digit level above that. and we have businesses today that continue to grow in mid-signingle digits. some middle market banking, corporate and investment banking and some other special areas are actually growing mid-single digit today. when you look at pipelines, things like cre, pipeline is off 90%. when you think about specific asset classes, we're still growing mid single digits and in

some double digits based on our positions and opportunity. >> it is a real comment on the growth of the southeast, that's for sure, kevin. it's a far cry from the conversations we were having about six months ago. thanks for the time. good to see you. >> great being with you guys. coming up next, the president of the san francisco giants on a plan to revitalize that city. we'll go live to oclpa ensquawk on the street" comes back in two. e your healthcare should evolve with you, and part of that evolution means choosing the right medicare plan for you. humana can help. hi, my name is sam davis and i'm going to tell you about medicare advantage prescription drug plans that can provide more coverage than original medicare, including prescription drug coverage, all wrapped up into one convenient plan. with original medicare you're covered for hospital stays and doctor office visits, but you have to meet a deductible for each. and then you're still responsible for 20% of the cost. next, let's look at

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san francisco making a big push to try to and attract business back to the city. our kate rogers is at oracle park in san francisco with a guest who is playing a key role here, kate, in this new campaign. >> reporter: hi, sara. thank you so much. we are joined today by larry baer, president and ceo of the san francisco giants. thanks for join, us. >> it's great having you here. welcome. >> you are part of an organization called advanced sf and you're launching a new campaign. it all starts here. when you're in the city, people who live here, people who love the city, there's still a lot of pride despite all of these

headlines and a lot of the stories that have dominated, quite frankly, the news cycle of late about san francisco. tell us about the campaign and why now. >> and i think there's a lot of narrative out there about the city and there are issues in san francisco but there's a lot of great things happening in san francisco. it all starts here, refers to the innovation economy, which we're on the forefront of and have been for quite some time. within a few blocks of where we're sitting, the headquarters of airbnb and salesforce and uber. visa is building its new world headquarters in the shadows of the ballpark here. a.i. is coming to san francisco with openai taking half a million square feet, just a three-block walk from here. lots going on. there are issues to address but we think the narrative really is the national and international narrative, which can be a self-fulfilling prophecy is not

fair. there's a lot going on. a lot going on in the neighborhoods and people have pride. so, we're working hard to kind of defeat that narrative and tell people what's happening in many parts of san francisco on the ground. >> this is a privately funded campaign. can you tell us how much has been raised and how you're planning to allocate the funding? >> we're going to do an advertising campaign as well as media. we've raised bock fisher, chairman of gap, and chris larson of ripple, have been very generous donors to the campaign. we have three dozen businesses involved as well as somesmall businesses and cultural institutions all coming together. it's exciting. san francisco really is in many ways on the move. it's a resilient place. there have been earthquakes, there have been times when san francisco has been down and has come back. and we're seeing that now post-pandemic. >> and you mentioned, obviously, a lot of civic pride and the attempt to rally that. there are real issues here. homelessness, drug issues, retail theft, businesses

leaving, workers leaving. there are many big businesses involved in this campaign. how and why did you get them to buy in? >> we're attacking those issues. it's not going to be overnight. it's going to take some time. there's a lot coming to san francisco as well where we have to be prepared to make the street scene street scene better than it had been during the pandemic and it's starting to get better. there's a big conference coming, apec, which is asia-pacific economic conference in november, 45 leaders from around the world are coming to san francisco. it's the biggest conference here since the united nations in 1945 of world leaders including president biden. there's a good movement. there's a lot of forcing functions to make this happen and we're work with city leadership and think things are on the move. >> you are part of something so many people in the bay area are part of in the san francisco giants. what is the biggest thing that needs change here? >> we need -- some of it is psychology and we need to work

on the street scene, obviously. what happened during the pandemic is in san francisco, which was, you know, very much a remote work place because of technology, the return to office was slow. slower than most places. that's starting to change. the psychology. the scene on the streets and the way we're dealing with the opioid crisis, drug crisis, homeless crisis, it's moving. it's not moving as fast as we would like but a lot of efforts and resources being brought to it. all of it is conspiring to get san francisco very much back on its feet. one of the world's great leading cities we differentiate ourselves in many ways with the innovation economy and ai is leading the way here in san francisco. it's become the ai hub and happening again kind of like what happened in 2000 in the internet. >> thank you so much for joining us. >> thanks so much, kate. >> carl, back over to you. >> great stuff. thank you. speaking of san francisco business, the hottest start-up,

openai, reportedly looking to luio shares at $86 billion vaatn. get some details on that after a short break. that first time you take a step back. i made that. with your very own online store. i sold that. and you can manage it all in one place. i built this. and it was easy, with a partner that puts you first. godaddy. in the u.s. we see millions of cyber threats each year.

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chatgpt maker openai looking to sell employee shares which would value the company in the league of spacex and tiktok's parent bite dance. deirdre bosa has details in today's tech check. >> good morning. this is just a huge number and what we're talking about here is a tender offer for openai, wouldn't be raising new money and that would continue a trend

that has been building over the last decade in the start of the ecosystem. some of the most exciting ones have allowed insiders to cash out on some of the equity and that relieves pressure to ipo a larger liquidity event with public disclosures, price discovery and a listing that ultimately lets the ordinary investor participate in the upside or downside. openai isn't alone waiting for longer. unicorns like stripe are staying private for longer and you can say uninvestable for longer for the ordinary investor. the latest openai deal putting its value at $86 billion would make it one of the most richly valued startups on earth behind only tiktok parent bite dance and elon musk's spacex. openai offers a new twist on the start-up structure. it is a capped partnership limited by a nonprofit board that means profits in excess of 100 times return will be passed on to an overarching nonprofit

company which will disperse them as it sees fit. six individuals, the board, have control of openai's ultimate profitability three are from of the starting founding team and three entrepreneurs working elsewhere in ai. anthropic has quirks, an independent five. person committee that can hire and fire the board and ceo. in the way that other tech founders in the past like snap and facebook have held on to control passed their ipos through a dual class structure, the biggest ai companies are ensuring they hold on to control earlier in the life cycles and their justification is more moral, the fiduciary duty isn't to shareholders, it's to i will quote from the openai charter to humanity. these unorthodox structures have done nothing to deter investments. our team has done a deep dive into the valuations and put them

in context and against the valuations of the largest public ai plays like nvidia and google, check them out, it is at cnbc.com/weekly. we talk about things like multiples. just how strat spheric. >> that was a good find. >> they took stakeholder capitalism further to humanity. >> exactly. >> is there any talk them going public? >> no. that's part of the manifesto also, right. it's kind of like anti-capitalist, nonprofit companies a small group of people at the very top control that profitability. but like you said, in the name of humanity. so it's a have very different take and unique to generative ai we talk about the risks of it. it is an open question, though, what's the best way to control that? let capitalism do it job or the

top control all of that. the structure too that will be interesting over the next few years because people are enjoying the upside. it's just a select group of investors that are allowed to invest in startups at the earliest stages. if you don't see an ipo the investor may not be able to participate in the promising tech companies of this era. >> absolutely. deirdre bosa. fed chair jay powell set to speak at the top of the hour speaking at the new york economic club. we'll take question and answer. there's a lot of anticipation on this one because we haven't heard from him since we've gotten the string of strong data. it started with jobs, firmer cpi, retail sales, the atlanta fed third quarter gdp is tracking 5.4%. is he going to look at that as a risk they might have to do more tightening to get inflation down to target or as his other

scl colleagues have looked at it, let's wait and see. >> yeah. echos at least jefferson and his vice chair. it has been hard not notice oil has gone green, vix kissing 20. the market going into powell even handed keep an eye on the other metrics as well. frank holland at the half. >> thank you very much. welcome to the "halftime report." i am in for the judge. we begin with breaking news, fed chair jerome powell about to speak at the economic club of new york and let's get to steve liesman. steve, over to you. >> thanks. in a speech or opening statement that turns hawkish, turns dovish, the fed chair says continued economic strength could warrant further tightening of monetary policy. inflation, he says, is still too high. he does note the string of