supposed to be him -- and expectations for the trial today. it is friday and "squawk box" begins right now good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick with joe kernen and andrew ross sorkin wow. what a week. we did see weakness across the board yesterday. you saw the s&p down below 4,150. 4,126. this morning, you see green arrows across the board. s&p up 20. dow up 55. nasdaq indicated up by 133 let's check on the treasury yields that has definitely been driving

the equities ten-year yield is below the 5% we have been crossing over earlier in the week. two-year yield an above 5% oil is another interesting picture to watch wti has been trending up this morning after being down for the week down by over 6%. let's bring the developing story from the middle east fighter jets launching a strike in two locations in eastern syria. the pentagon says this is linked to the iran revolutionary guard over attacks on u.s. bases that began last week killing one u.s. citizen and injuring 20 more the pentagon says the u.s. does not seek escalation of any conflict and describes this as a separate issue from israel and hamas. you have to think the issues which emerged in israel with

hamas have inflamed the situation. >> this is the iranian revolutionary guard with the attacks. it is hard to separate one from the other with iranian revolutionary guard proxies with hezbollah and hamas. >> if you watch the news and every time you watch it, you say this is the 17th attack since october 7th on u.s. forces in the middle east. you know -- >> what's driving it >> you have to answer it you know the biden administration is under pressure the big question now is whether biden's red line with iran will go the same way. i assume it will go the same way with obama's red line with s syria. we will not do anything. no way >> the concern is what happens if this becomes a larger issue >> i think they know that. >> they have been testing. wti up 2.5% this morning because

p market this week was trading as if this was contained to gaza. some concerns reversing. >> little bit. $85. >> we were down 6% as of yesterday. >> 5% growth rate. shares of amazon are higher. earnings of 94 cents a share beating estimate revenue of $143 billion came above $141 billion expected. those profits tripled. amazon web services below estimates of $23.1 billion revenue. advertising revenue above expectations at $12 billion. staggering numbers that's up 26% from a year ago. it eclipses google ad growth of 9% and meta's ad growth of 23%. intel shares are jumping 41 cents a share beat

expectations of 22 cents revenue beat estimates, but fell the 8% from a year ago current quarter revenue guidance came in higher than expected and the company told investors it expects rs revenue to grow in te current quarter. pat gelsinger spoke to jon fortt last night >> that was one factor that improved the financial performance this quarter as we are adjusting the factory loadings we had to work off the inventory and under load charges that is now a tailwind that improves the gross margins significantly for us this quarter as one of the factors. overall, everything is working better >> gelsinger said the company would cut costs by $3 billion this year. we will bring you more with the interview later in the show. that stock up 7.9% this morning. still over the three-year period

that we are looking at right now, it is down 23%. a lot of questions if you can turn this around and what will happen with the foundrys they are building. and shares of ford are sinking. earnings of 39 cents per share missed estimates r revenue lower than expected. ford withdrew guidance over the tentative deal john lawler blamed the earnings miss on the strike and quality costs. the strike cost $1.3 billion in l lost production. north america customers are unwilling to pay a premium for evs. and now a postponement of $12 billion of ev investment some sales numbers were lower than expected. not just that, but the uptick in the goal line as they talk about

moving the goal posts. >> refuse to pay a premium for ford. >> tesla is bringing down prices, too. >> i know. they are still everywhere. i don't see ford evs i don't see any big three evs anywhere >> in that is the reason elon is bringing down the price. he doesn't want to lose market share. >> if people are willing to pay a premium for tesla, you say yes. you don't pay a premium for the big three. by the way, 4,577 on the s&p >> it was below 4,150. >> 4,137 9. 9.6%. >> we're almost in a correction territory. >> nasdaq already is on it

the s&p -- up to date. we're very close i'll round that up speaking of evs. hertz pumping the brakes on the fleet to evs after repair costs came in higher than expected after tesla's price cuts reduced the resale value of the majority of evs in the fleet to one-third. the ceo last night on "mad money. >> depressciation went up becau tesla took price down by a third earlier in the year. the price difference is expressed through depreciation the opportunity to dump the car is not one that is available to us it is not one i would take there's positive margin to be had in the existing fleet of cars we'll buy our price down over

time >> hertz will not meet the target of 25 electric fleet by 2024 as it hoped previously. shares dropped 10% yesterday after the mostly positive earnings report. tesla shares fell by 3% during yesterday's session. what happened to ford's blockbuster billions that caused them to give 25% increase? what happened? >> they still had big profits. >> profits up. >> it is a relative term compared to expectations and everything else. durham points out that president biden praised it as a historic tentative agreement. one reason tesla can still make money is the increased of automation and they don't pay as much in the end, if the administration is forcing everyone to make the evs causes the company to be less profitable, there is more automation and uaw long term

will be hurt by this agreement >> will mean less evs which is why ford is going to invest $12 billion less in evs. that's where they will make it up for now. >> any normal company will not do something to result in higher profits. we are watching shares of apple this morning as well u.s. federal agency found that apple violated the patent of the rival tech company the ruling could lead to an import ban for models of the smart watch starting on christmas day. the company said apple violated the patent with the blood oxygen levels apple poached employees to pursue the pulse oximeter. apple said the device copies its

products the company found apple was in violation of the u.s. trade law. the commission ordered a ban on appar apple watches that contained the technology apple hopes the decision will be reversed on appeal shares up 50 cents right now in the meantime, jpmorgan chase ceo jamie dimon with the s.e.c. filing saying dimon and his family will sell shares in 2024 citing diversification and tax planning it is the first such sale since taking over the position his family holds 8.6 million shares he believes the prospects are strong and plans to retain a significant stake. >> he's been the ceo a long time.

>> that adds up. if you add it up, that's real money now. $140 stock he's not a founder he did enough to be almost considered a builder of that business >> that was the thing for a long time >> a chicago guy and then -- >> a new york guy. >> bank one was columbus then chicago and it turned into jpmorgan chase before we head it to break, a long time guest of "squawk box" and friend of the program buy byron wien has died. he was the chief u.s. investment strategist at more sgagan stanl.

byron said it was about his life lessons. there were 20 of them. he delivered of the last with good humor never retire if you work forever, you can live forever byron wien was 90 years old. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com.

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whoa that's one way of phrasing it. french drugmaker sanofi taking a hit this morning down 16% following the release of quar quarterly earnings and maybe more importantly the guidance of 2024 and the spinoff of the health consumer business joining us for the interview on the day you need to do the interview. paul hudson from sanofi. anyone can take a victory lap, paul this is the day you need to explain to shareholders what your view is of the company's prospects and whether the stock move is warranted. we'll get to the earnings for the last three months in a second for the outlook, you have tax changes, global tax changes and a big increase in investment for

r & d. which is more troubling or shocking to investors, do you think? >> let's take a step back. the results announced today, great results for q3, of course, but we witannounced bold moves & d. that is where people were not expecting us to be quite am ambi ambitious. we can create more shareholder value and doubling down on science which is matured and set up well. we didn't want to make a tradeoff we take the long h-term view wi today being unsettled today. we have the earnings calling today and the r & d later. we will start goatto get back to where we need to be. >> maybe the notion you have to

spend more is troubling to investors because of the state of the business right now. third quarter net sales did fall to 11.96 billion euro. all drug companies lose excessive of products. that is wegovy >> you know, i'm glad you raised it the last major loss this decade. we are one of the least exposed companies in the entire sector which is one of the reasons we're able to double down on science. we had three major launches this year, not least for rsv and diabetes we shared confidence in our earnings numbers it is an important moment. we have such a rapidly growing pipeline of best in class

assets we have a choice to make do we go after them and try to show what we are tape able of do -- capable of doing and change the trajectory of the company or pull punches we have to go all-in on science. we are confident of what we are doing and confident in our launches we think short-term disappointment as we bring clarity for that and people will understand we are proud of the progress we made, frankly, since we laid out the strategy in 2019 we knew this moment would come it is an important moment. on the journey to be a pharma company, we will separate our consumer healthcare business another declaration of commitment to focusing on science and value creation >> you know, you have given back almost a year's worth of gains with the stock 20% year over year and down $16

to today. if you exclude the tax rate change, it's flat. if you include the tax changes, which are interesting, and why wouldn't people know about that? tax rate from 21% to 19% if you include that, you will be down eps in 2024 low single digits. it takes faith and clarify tore -- clarity to say you are benefitting in 2025. $2 billion in cost cuts, not the payoff from the investments. through 2024, you are cutting exp expenses >> what with e announced today a 2 billion euro spending -- sorry, savings plan. we will reallocate the majority to r & d we will reallocate to the most important projects

that will create more value that way. the tax piece is known, but you have to declare what you think it will mean for you for the up sdls upcoming year. that's helped navigate us safely through difficult times for the sector and all sectors in fact what we said is, you know, watch our eps. it will be broadly last minus the tax next year. we will rebound strongly in 2025 the statement to be able to say that means we increased our flexibility to go after organically and inorganically the right type of science to create the most long-term value. if we stick where we were, there is a chance we let opportunities go that's not the right thing to do for patients those with difficult diseases to treat. it means we will create the most long-term value as possible. we are well positioned for that.

for those that join the researc and development, you get a f flavor for that we like things to be better, of course, in terms of stock market reaction, but with clarity and information, we are in a good spot >> paul, they're wrapping me up. what caused the rise in the tax rates? a global thing based in france. can we glean anything from that? i would rather you spend that 2% at 19% to 21% and i would rather you have that go to r & d. this is kind of an example of why drug companies argue that the long-term benefit, you can generate more from the capital than maybe pay taxes, corporations need to pay taxes this is impacting your ability to invest in the business. >> let me be clear we are running a more efficient

business we made 500 bps improvement. >> who raised the taxes? >> this is just a global harmony change of the rules. this is getting to a global tax rate our guidance we have given is to say despite the headwinds, we're confident in science and where we're heading, we will power through. we are well set. we are really well set for the rest of the decade >> we'll keep an eye on it and see improvement in the shares throughout the session i appreciate you coming on paul, thanks >> thank you chevron just out with the quarterly numbers. energy giant reported profit of $3.05 a share. that is below the consensus estimate of $3.75.

looking through the things, revenue number at 51.9billion. above expectation. it was below the year ago number with $63.5 billion. oil prices came down year over year for that quarter. when they talk about what happened with this, they say the lower profit numbers over a year ago not only lower oil prices, but also lower realizations. lower margins they saw on refined profit sales product sales. cap x in the third quarter up 50% from a year ago. d distribution is 2.6 billion dollars. $3.4 billion in share buy bback. they were down year over year with restrictions related to acquisition to the pbc energy. you see the stock down $1. >> buy more oil assets they need to >> good idea

>> they had the ak ri signi -- acquisition of hess and pioneer. we are watching exxonmobil here is where chevron stands numbers down year over year, but up quarter over quarter with profit and revenue when we . when we come back, we have the highlights of sam bankman-fried on the witness stand. we also have the first on cnbc interview with darren woods. "squawk box" will be right back. ameritrade is now part of schwab. bringing you an elevated experience, tailor-made for trader minds.

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welcome back to "squawk box. sam bankman-fried taking the stand in his defense without the jury present a dress rehearsal, of sorts, in the landmark cryptocurrency

fraud trial. kate rooney is here with more. >> the jury left halfway through the day. detour yesterday sam bankman-fried did get up on the stand, but no jury in the room this was so the judge could decide if topics are admissible and including the corporate lawyers. he was wearing a gray suit and shorter hair defense team kicked it off he tried to blame the lawyers. that the point, sam bankman-fried seemed calm and giving concise answers not the case with the prosecution started grill him. he stalled and took multiple sips of his water bottle and could not remember certain things he would say i would not classify that as particularly what happened. that was one example of an answer the judge was frustrated with the diversions he repeatedly told him listen to

the questions and answer the question directly. he noted sarcastically that the defendant has an interesting way of answering questions sam bankman-fried will continue that testimony today and in the coming days facing more cr cross-ex cross-examination. if the judge suggests he lied in the testimony, that could add years to the sentence. we expect the judge to rule on what the jury can hear this morning. they are back in the courthouse in a few hours >> i have a couple of questions. a moment where i was reading the transcript where there is an objection. the judge sustained. he answers the question and his lawyer says what are you doing haven't you been here? >> his lawyer said we are going to the next question and tried to coach him up there. that was fascinating >> what do you expect? this defense, which is largely around the idea that he had

lawyers that were advising him to do some of these things or with the advice of counsel a bit of a trumpian defense, to be honest with you do you think judge kaplan will go for it? >> he used the hypothetical situation. say you robbed a bank and if you use that money to buy an apartment and you had lawyers work on some of the documents for the apartment, the lawyers are not libel, they did not know about the bank robbery he did not come around to the argument it was the lawyer's fault. >> what do you mean oversized gray suit? >> he got a haircut. >> he had to go to goodwill for the suit >> he didn't have nice clothes >> it is weird oversized suit >> it was the detail you need, joe. >> i know. i can't tell from the drawings >> that looks like norman scott.

>> he was known for having big hair and now -- >> he looks like he lost weight. >> the judge is not buying any of this? he will not let him testify because he won't tell the truth? >> he will testify, but not about this >> he'll let him testify, but he may not let him talk about the lawyers. the other thing -- >> guys, he was the ceo. stop blaming everybody else. >> he was getting grilled by the prosecution. i wasn't there i don't recall different from the top lieutenants who said i committed fraud and did so at the direction of sam bankman-fried the tone is different. >> okay. let's ask a different question i was down there and watched some of it all three of them have deals in place. >> yes >> did you find them all

credible >> good question honestly, i think from a jury perspective, caroline ellison was credible she was the most heartfelt and emotional up there i think the other two got up there and were a little more stoic, i would say, and less emotional. i think caroline ellison had a lot of credibility especially with the romantic relationship despite the fact they have a plea deal. too soon to tell it will probably wrap up next week it is moving quickly all things considered >> kate rooney, thank you. exxonmobil out with numbers. let's run through this quickly exxon came in an adjusted eps of $2.27 a share. 10 cents below the forecast for things the company had a lot of metrics. one is the operate bing cash fl.

$16 billion cash flow. $1 billion ahead of what was expected increased $3.4 billion they are touting the best ever third quarter global refinery at 4.2 million barrels a day. darren woods made comments about that they added 80,000 barrels a day to support global supply people have been pushing on the big oil companies for not producing more in times of need. we can talk to him about this when he he joins us later. the stock is down. the miss by 10 cents on the bottom line on the adjusted earnings per share off 60 cents >> 3 cents 3.6% yield. >> i thought it was 4 cents. did i get that wrong >> from the 91 to 94

i don't know 3.3% to 94 cents. >> i have 95 cents on the release. 95 cents a share which is up 4% overall. we can talk to him about that. the release says 95 cents. >> the release is a highlight. >> we'll continue to look through these things and joined by chairman and ceo darren woods in under an hour's time. "squawk box" will be right back. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. es like never before. inspired by french artistry and elevated by high pressure,

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good morning welcome back to "squawk box" here on cnbc we are live at the nasdaq market site in times square we got earnings from exxonmobil. we will check the futures before we get there dow up 27 or 28 points nasdaq up 125 points s&p up 19 points exxon and chevron trading lower after earnings joining us to talk about that in the big tech movers is stephanie link from hightower. we were talking about how we might be already in correction territory, stephanie

are you in the category there is a lot more wood to chop here you want to be in this market? what do you want to do >> it has been a wild week, andrew i think it is setting up for ideas, right, and some opportunities. i think especially in the technology field especially when you look at the quarters amazon with really good numbers. meta is a really good number i added to google this week because i thought the numbers were better than the reactinons in the share price down 10% on the day when they reported i think one more week or two more weeks of choppiness and we set up for a year-end rally. that's why i want to be buying stocks on weakness >> what is the turning point or inflection point that creates this shift in what has clearly been a dower mood

>> guide aance is coming in betr than expected. >> so many are getting worst than expected. i should say the guidance is worse than expected. >> i think the earnings especially on the technology stocks, if you go through the details, companies are reporting pretty good numbers. certainly they conservative as they should be i think when you look at the fundamentals and year over year growth rates and margins and upside, i think the revisions are going higher eventually, andrew, stocks will follow higher profits. i think there's opportunity. >> tech is obviously unloved and energy has been loved. do you still love energy later on, what's happening in the middle east and conflict

there. i shouldn't call it a conflict war. how does it play into your thinking >> i still like energy i like the favorable supply/demand metric on chevron and exxon, you don't play into the metric you look at the production levels, especially with exxon and chevron. i think the conference calls will all be about m&a is creative for both companies. obviously, middle east is a hot topic. rec chevron has an australian strike i like what they're doing with the free cash flow it is not only returning to shareholders, but now looking for growth for the long term

i tha i think that say positive. >> thank you, stephanie. coming up, interest take away from chipotle's results, including the ceo's view of weight loss drugs like oz fireozempic and how to overcome the rise of minimum wage in california we'll be right back. s. ♪ when better money habits® content first started coming out, it expanded what i could do for special olympics athletes with developmental needs. thousands of bank of america employees like scott spend countless hours volunteering to teach people how to reach their financial goals. it felt good. it felt like i could take on the whole world.

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shares of chipotle doing better this morning. the restaurant chain reported earnings of $11.36 a share revenue was in line, but comp store sales rose 5% which was above expectations chipotle said the menu price hikes helped drive profitability. last quarter was offset this quarter by rising cost of beef and queso. as a result, it raised menu prices earlier this month for the first time in more than a year i heard frank say something about carne asada. they brought that back >> i thought it was beef carne. >> yesterday on "closing bell"

brian niccol said when it comes to weight loss drugs like ozempic is not a concern. >> the more we study it and understand it, this is a place where we are positioned well our food is clean and customized if you decide to go on the drugs, you can get exactly what you want to eat. >> chipotle said customers in california can expect to pay more next year the company will pass along the higher labor costs which comes from the bill which raises wages for fast food workers all the way up to $20 an hour in april >> newport beach that is the beautiful shot out his window i was trying to figure out where he was hanging his hat >> carne asada can include beef abbeef lamb or chicken. >> meat. >> google. >> yeah.

a mystery. like when i go to taco bell. i still love it. i like it. i'm not sure what i'm eating whe . when we come back, we are talking about the deal for ford and what is next for gm and stellantis. reminder, you can watch or listen to us any time. just go to the cnbc app. >> announcer: executive edge is sponsored by at&t business next level moments need the next level network. move to the cloud. - so, the question is... - cyber attack! as cyber criminals expand their toolkit, we must expand as well. we need to rethink... next level moments, need the next level network. [speaker continues in the background] the network with 24/7 built-in security.

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shares of ford are sinking this morning you're going to see right now, down by 3.5% earnings of 39 cents a share missed expectations at 45 cents. revenue also came in slightly lower than expected.

and ford withdrew its previously announced guidance because of the work stoppage that concluded this week with a tentative deal. joining us right now to talk about ford's deal with the uaw, the implications for gm and stellantis and what it means long-term for all the companies is harry wilson of mava group, previously a senior member of president obama's auto task force. and, harry, you joined us before and said if the auto companies were to give what the union was asking, it would put them back in a terrible position they wouldn't be able to be profitable does the deal, the terms of the deal you know so far with ford, does that put ford in a competitive position or not? >> yeah, good morning, becky i give ford a b minus overall. the wages, which i think are the most important part of the deal on both sides landed about where i expected them to land. but they also, one thing we talked about in the past is making sure they did not make concessions around long-term structural costs that inhibit their long-term competitiveness and they did do that

first time in history, they gave up on the right to strike for a plant closure which limits their flexibility, and the company with those two things does inhibit their flexibility going forward. >> they're not allowed to strike anymore? explain that >> nford decides there is a -- car demand is down, they want to close the plant, they didn't trigger the right to strike. now for conceding that point for the first time in uaw history, which given the dynamic, the capacity needs, i think that was a big mistake. >> so you think that this is going to hurt ford long-term because they are not going to be able to be competitive and flexible >> yes, i give it a b minus, not a d or an f. on the wage side, it was fair.

but i think they really need to be vigilant around long-term competitiveness and that's where they came up short. >> that sounds look a bigger issue than a b minus >> well, i think it is not like they have given up everything. they didn't give up on the job bank, the 32-hour workweek, medical and pensions, that would have earned it an f. but it is a balance and i think they came short of the balance >> what do you give the union marks in this? do they get an a or a plus >> i think on behalf of their members and the short-term they get an a the long-term structural competitiveness issues cuts both ways i think that's where the union overreached. >> i want to read this to you, ford appears to have made the calculation that the high prices worth labor piece, op-ed piece, but the collective bargaining in

this agreement is going to take a while to see if the labor piece helped ford or makes it harder for ford to pump the capital into the money-losing evs which the government and states are mandating so, i mean, when -- there must be some level of equilibrium you think will hit you see how many of the big three have already said, yeah, no way are we making our goal -- they're not going to hit the government goals for investments either if no one is buying them. you expect things to -- we were discussing the things that need to be done for these to become mainstream, you think that catches up and things happen more quickly in terms of infrastructure and consumer sentiment and everything else? >> i think there are two separate issues. in terms of does this deal affect their ability to be successful on evs going forward, not necessarily. the issues, it does reduce

flexibility. but it amounts to like .6, .7% of revenue that's a manageable amount the broader problem that you're highlighting is that they're nowhere near being competitive on evs in the last quarter they announced this week, they're losing $36,000 for every ev they make, which is up -- >> they need -- tesla has automation and lower labor costs. so that -- automation means that the uaw long-term, this deal could end up shrink the ranks significantly. so that ten years from now, the uaw might be half the size because you don't need it to make the cars. >> i think there are two parts to that. one, there is no question that the deal creates long-term structural headwinds so, that's definitely a problem. i agree with that. i think the other piece of it is they haven't succeeded in cracking the product code. they don't have good ev products that attract the consumer. when ev demand right now is

313,000 evs sold in the second quarter, in the zip code of 7% or 8% of total sales, you see pressure on that growth rate because given range anxiety, the other issues, there is a practical limit of how many people are willing to buy the ev that's running head long into higher rates and reduced consumer demand. >> hopefully the government still has your number for the next time you got to go on and do a workout >> well, i don't think we're going to do that anytime in the foreseeable future hopefully not ever. >> some people do. >> he says hopefully not harry, we have to run. we're out of time. we'll have you back. i wonder what this means for the other two big automakers and we'll have you back to talk about that because this is continuing thank you. >> expect a gm deal very soon. >> okay. gm deal very soon. okay coming up, roger altman is going to be with us. we haven't talked to roger in a

long time. we'll talk about the economy, the markets and so much more in a little bit plus exxonmobil ceo darren woods c going to join us in a first onnbc interview. that company out with its quarterly results. talking about consolidation in the industry, two big hours ahead. "squawk box" rolls on. in the u.s. we see millions of cyber threats each year. that rate is increasing as more and more businesses move to the cloud. - so, the question is... - cyber attack! as cyber criminals expand their toolkit, we must expand as well. we need to rethink... next level moments, need the next level network. [speaker continues in the background] the network with 24/7 built-in security. chip? at&t business.

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♪ explore endless design possibilities. to find your personal style. endless hardie® siding colors. textures and styles. it's possible. with james hardie™. good morning stock futures rising this morning after a number of positive earnings results. we will show you what stocks you need to watch ahead of the open.

newly appointed speaker of the house mike johnson has a plan to avoid a government shutdown we will get a live report from washington and exxonmobil reporting results in the last hour the chairman and the ceo darren woods joins us live in a first on cnbc interview. the second hour of "squawk box" begins right now good morning and welcome back to "squawk box" right here on cnbc live at the nasdaq market site in times square i'm andrew ross sorkin with becky quick and joe kernen u.s. equity futures this morning in the green about 8 points, 9 points higher on the dow s&p 500 up 15 points the ten-year note at 4.866%. the two-year at 5.05%.

joe. >> from the middle east, u.s. fighter jets launching an early morning strike in this case on two locations in eastern syria the pentagon says both were linked to iran's revolutionary guard. the move is in response to a string of drone and missile attacks against u.s. base and personnel in the region that began early last week killing at least one u.s. citizen and injuring at least 20 more. the pentagon says the u.s. does not seek any escalation of the conflict and described these strikes as separate and distinct from the ongoing conflict between israel and hamas but you have to think it is somewhat related and have seen a change in tone from the biden administration on whether iran -- how directly involved iran was in the hamas atrocities. >> they are saying, with this attack, with this planned thing they went through with this

strike that it is not related. >> i don't believe it. >> i don't believe it either but they're going out of their way to say it is not related because they're trying so hard to keep this from expanding. but they also have to protect the troops. >> talk about nikki haley yesterday, she's a hawk. she is a hawk, andrew. there is a real question -- there is -- remember the neocons? didn't take much for them to think we could fix things with shock and awe campaigns. >> never worked. >> no. now we're back to arguing from the other side that an america that isn't around causes these things to happen if they know we're not there to keep -- >> i'm not sure that's the answer either. >> i know. that's why the discussions are ongoing, shall we say. we'll see at the next election, there will probably be some choices as to how involved you want to be in ukraine. >> i also think there is a

question mark about how much all this costs, right? we spend trillions and trillions of dollars talking about getting to the pile and then what do you have for it? right? >> that's what -- i don't want to be flippant about it, but what did afghanistan cost? and where are we now on that whole -- >> no question there is no question >> maybe lesser extent iraq, but costs a lot. costs a lot with very little payoff >> the questions then become what do you say to an israel, what do you say to ukraine when they're asking for aid and for help >> there is a difference. >> they have been attacked by somebody else who came into their own sovereign territory. >> the real cost in iraq and afghanistan weren't monetary either that's not the case yet with any of these other conflicts >> let's get to frank holland with a look at this morning's premarket movers frank, good luck following that up. >> yeah. >> good morning.

joe, becky and andrew, great to see you, happy friday. let's start with movers this morning. intel, shares moving almost 7% higher, popping after a third quarter earnings beat on the top and bottom line, even as sales fell year over year. intel offering some upbeat guidance for the current quarter saying it expects to return to growth also plans to cut $3 billion in costs this year. shares up almost 7% right now. ford shares under pressure this morning after missing q3 estimates following a nearly six-week long labor strike that cost the company $1.3 billion. ford also suspending guidance until the ratification of the tentative deal with the uaw, offering a 25% pay increase with a cost of living adjustment. shares you can see here they have fallen almost 14% since the strike started last month. pretty steep and steady decline here ford added, it will be delaying $12 billion in previously announced ev investments those shares down more than 4%. on the other side of the coin, amazon moving higher this morning, powering the nasdaq

futures. you see up more than 6% after top and bottom line beats. profits 62% above estimates as net income just tripled year over year. the e-commerce business grew 7% year over year aws, cloud, that was just slightly lower than estimates, but a very slight miss and also here, you can see the pop after the earnings report, also an additional upside move about here during the talk about artificial intelligence during the earnings call. shares of amazon up more than 6% joe, back over to you. welcome back joe sent me a very detailed look at his trip to go see the taylor swift movie. >> that was two weeks. i was at the nixon foundation since then. >> he sent me links with pictures of him in different places. >> you said, i hear maybe you had something -- i go, yeah. and i don't know -- i'm surprised you didn't see it -- one article, the ft. i want some credit there, frank. i'm not getting any finder's fee. i could get some credit. >> i'm giving it you to right

now. you sent me a very detailed list of your links where you were and what you were doing. full credit. >> i could be a suit model, people said, from that one shot. >> hand model? >> a zenya model >> it is a real thing. >> bring in roger altman, founder and senior chairman of evercore we don't need to go into what we were talking about thank you for the whole relationship you were a swifty long ago, before any of us were. right? 15, 20 years ago. >> i'm a huge fan. i love her she's amazing. >> she is. interest rates, the fed, wars. is this a time to be -- some of the best money managers we know have said this is just really difficult right now. >> well, step way, way back for a minute imagine the four of us on this

set had left the planet for two years, had no connectivity, and just returned. and we look at the structure of open market interest rates, medium and longer term interest rates. >> may not be first thing i looked at. >> well, maybe you look at the path of monetary policy, the fiscal trajectory of the united states and geopolitical risks right now and you say to yourself, are these four factors conducive for investing, for equity investing and the answer is no. >> when was biden elected? >> well, biden took office in may of 2021. >> exactly two years ago you're not making a good case for your side. >> three years ago but if you go for each of those factors, there has been a sea change quoting howard marks in the structure of interest rates. i think we'll look back at the last 15 years, beginning with 2008, as an anomaly and that what is going on now is essentially a reversion to normalcy but it is tremendously important

because in total rates of return are going to be declining, whether corporate or sponsor rates, incentives for investing at the margin are pro fixed income and it is just -- it is just like a huge change and then three or four months ago, six months ago, we would have been talking about prospect for cuts in the federal funds rate market thought there would be cuts, multiple cuts, actually, starting around now, and, of course, that's gone. you look at this absolutely stunning third quarter growth figure, 4.9%, that's mind blowing, i think and obviously the fed is going to be higher for much longer i don't think that this coming week we'll see an increase, but i think it is going to be steady as she goes for a long time. >> something interesting, though, and that was -- >> just one thing? >> when you talk about the

current interest rate environment that suddenly it favors fixed income, we did fine in equity investments for 20 years with rates where they are, or even higher and equities were more attractive and you had better returns something must have changed for you to now say that some 5% is suddenly really, really competitive for long-term. versus equity. >> it is just at the margin. but, i mean, it impacts asset allocations. >> didn't we used to do pretty well we would have given anything for 5% during the '80s and '90s. >> we're in a different environment now. >> how what changed >> look at where we were a year and a half ago. >> i know. it is the change, not the absolute -- >> i believe it is affecting asset allocations. >> because of the change and it is kind of disrupting -- not the absolute level, though. >> well, but then when you juxtapose it against the other negative factors, there is an incentive and i think i'm seeing it that to park some additional

money on the fixed income side. >> there is additional risk which caused people perhaps to like the safety of fixed income more than -- we didn't have to worry about these things in the '80s and '90s. >> the other factors i mentioned, plus some others, were favorable, perhaps we would be steaming right through this >> how much with what corporations have set up they have gotten used to zero interest rates too. >> returns are going to be -- in the process of return expectations of declining. just think about financial sponsors i saw the other day that 45% of overall transactions in some measure over the past year were financial sponsored. the structure does not allow the amount of leverage that they were using a year ago, two years ago. >> the activity is coming down. >> and so forth. and the incentives for folks to

put money there with them, i mean, at the margin, are diminished a little bit, but private equity is very successful but i think also if you add in the geopolitical risk, wow two active wars, minute by minute risk of a wider war in the middle east, any minute, it could be and deceleration in china. a lot of people think the relentless upward march of chinese growth is over i happen to think that and you add all that up, it is a pretty negative picture. >> yeah, you got just iran is just this huge elephant in the room, near term, and then it could be swallowed up by the chinese elephant long-term got both of those. >> that's not a good thing when you break up and read the russian deputy foreign is meeting with the hamas leadership. >> iran and china are in cahoots now, like this hideous threesome with russia. >> well, that's why we're

hearing the term axis of evil again. >> we are. do you dispute that term >> no, i don't no, i don't. >> they reminded us there is evil in the world. we probably need to spend some money to fend off future evil for the country. >> one of the things i think has been very disappointing is since the onset of the ukraine conflict, so much of the world has not come to the defense of ukraine. we all think about the united states and the european allies, but so much of the world has either been neutral, like india, or actively opposed, like china. >> putin is -- the fear of putin is also taking a back seat to the fear of iran and china. >> yes, right this minute. >> they're all helping each other too. so axis of evil. roger, great, thanks. >> there is always taylor swift. >> there's always friday and you can listen to some taylor swift and "1989." did you download that already? >> not yet >> it is on my phone

family sharing i saw it this morning, what is this i'm going to shake it off. >> good for you. >> coming up, we'll listen to joe singing shake it off exxonmobil ceo darren woods will join us after the oil giant's latest quarterly report. up next, newly appointed house oieaker mike johnson's plan to avd a government shutdown. we'll talk about that. "squawk box" returns after this beautiful live shot of the capitol this morning only the sleep number climate360 smart bed lets you both sleep up to 13 degrees cooler or warmer on either side, and at your ideal level of comfort. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. our new sleep number smart beds. sleep next level. shop for a limited time only at sleep number. meet gold bond daily healing. a powerhouse lotion that moisturizes, heals, and smooths dry skin. with 7 moisturizers & 3 vitamins. and... new gold bond healing sensitive. clinically shown to heal & moisturize dry, sensitive skin. gold bond.

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only from xfinity. home of the xfinity 10g network. new house speaker mike johnson has a plan to avoid a government shutdown as the deadline approaches next month emily wilkins joins us now with more on that front good morning >> good morning, becky happy friday mike johnson's first real test as speaker is coming up on november 17th, seeing if he can avoid a government shutdown. now, johnson did lay out a plan to his colleagues little by ea bit earlier this week. they need to pass the remaining seven bills to fund the government through the next fiscal year. and then they can pass that stopgap funding before the 17th that will avoid a shutdown and give the house and senate time to negotiate now, johnson already has his plan in action yesterday, lawmakers in the house passed a bill to fund

parts of the government dealing with energy and water. but, still, this is a really ambitious schedule and there is no guarantee that all republicans will be receptive to a short-term bill tim burchett is keeping an open mind under the new speaker >> i'll address the cr when it comes to us. and crs are, from what i understand, were for emergency type situations, not to say this couldn't be an emergency type situation because of the delay in the speaker, getting a speaker and a speaker's vote i'll read it when it comes to us and, but the key thing you said was work that's what we're going to do. >> burchett was one of 21 members who opposed a republican stopgap or continuing resolution, the cr he mentioned, earlier this year. several other members who also opposed that last stopgap said that johnson should be given a little more leeway as he steps into the speaker role.

but all the members i spoke to, they're also keeping their powder dry while they watch what johnson does in his first few weeks of the speakership becky? >> emily, couple of questions. first of all, how long could the next stopgap last? >> that is a great question. the plan that mike johnson laid out said, it can go through january 15th or april 15th, the conference can decide on that. two key things with those dates, number one, it means that lawmakers aren't going to have their backs up against the wall on the christmas holiday, which is a -- become a regular feature in congress on the spending bills. and number two, if they go to april, then you potentially risk triggering that 1% cut across the government, this was a feature that was in the debt limit agreement signed over the summer, supposed to be an incentive for folks to get their work done. and so, of course, we'll find out within the next few weeks whether they want to go to january, april or whether some third option pops up. >> okay. emily, thank you we're out of time. i'll save my next question for the next time we see you

bye. coming up, exxonmobil ceo darren woods is going to be with us plus, singer, songwriter and philanthropist will i.am is helping students we're coming back on this friday morning. >> announcer: time now for today's aflac trivia question. how often does a full moon take place? the answer when cnbc's "squawk box" continues ousand bucks?! gaaaap! did this goat just say 'gap'? he's talking about expenses health insurance doesn't cover. but with aflac, you can get money to help close that gap. aflac, huh? -aflac! -ahhhh! okay! oh! duck - 1, goat - 0. get help with expenses health insurance doesn't cover at aflac.com -you want to race? -for real? with cirkul, your water is deliciously flavored at the turn of a dial, with zero sugar and zero calories. and cirkul has over 40 flavors, so your water can be as unique as

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. >> announcer: now the answer to today's aflac trivia question. how often does a full moon take place? the answer, approximately 29.5 days tomorrow's full moon is known as the hunter's moon, based on when hunting season for many game animals traditionally begins welcome back to "squawk box. s.t.e.m. education program first is gearing up for its annual fund-r fund-raising its corporate sponsors include tech and engineering giants like lockheed martin, nasa, 3m, apple, google and others as they try to instill some more s.t.e.m. around the country. it was first founded by dean cayman of segway

>> it transformed my community we sent kids to brown, to dartmouth, to stanford, we have amazing scholars, amazing engineers in the field of science, technology and engineering and mathematics. i have seen how it transformed my neighborhood. it should be in every single school across america. we're entering this new realm of generative a.i. and a.i. everything, a lot of jobs rendered obsolete because of it, but new jobs, new industries, new careers are going to be created. and the folks that are part of first like the ceo founder of a company called luminar, he is, like, the poster child of what, you know, comes from a first education and involvement in building robotics.

>> dean, where i was going to go on the a.i. front, now that will.i.am raised it, in a world of a.i., where does that -- where does that lead us to from an education standpoint in this country, not in this country, in this world, in the future, when it comes to trying to find engineers, what kids need to learn, how they need to learn, what kind of jobs they're even going to have? >> i think like every new technology, really new technology, you get the same response you get the optimists of the world that see this very naively solving every problem there ever was like when electricity became available, when nuclear power, you name it, steam engine, industrial revolution. and then you have the pessimists that think it is going to wipe out what we are comfortable with and all the jobs will go away and i'm sure the steam shovel was a nightmare to ditch diggers. there is not a single example of a new technology that didn't create new jobs and wiped out -- didn't create better of life,

higher standard of living, solved all sorts of problems, but the problem with this one is it is going to come on so quickly that unless we can train enough people to fill all those new jobs, it is not only going to be a problem that we can't fill the new jobs, but as we fill them, it will wipe out the ability to stay in the old jobs, so in this case, both the optimists are right, it is going to be unbelievable, and the pessimists are legitimately concerned that there will be a shortage of good jobs because we don't have people to fill them and real problem for the unemployed whose other jobs went away. >> will.i.am, using a.i. these days with your music, with other parts of your life, with your business >> in business, yes. in creativity and expression, no the company that i created fyi uses generative a.i. at the core of the product to allow folks to

help folks be super charged by the field and the tool but for me, as a creative, it is therapy for me writing songs is therapy i need to do it. i can't -- there are certain tasks you can't hand off. >> what about the possibility one day that a.i. will sing the songs for you, maybe -- or take your voice and do something with it, you probably saw, you know, kendall jenner or tom brady got involved with meta, where they have become bots it feels like it is them, even though it is not them. would you ever have the will.i.am bot? >> i will have that if it was my data and i owned it. right now as far as loaning your likeness to a company grow their, you know, their gravitas even more by not addressing

their business practices to where it is more humane to people's civil liberties, privacy and democracy, we have seen what happened with social media in the misuse of that and no regulations around that so with that, no, unless a company has, you know, clear business practices that intends to help society as a whole >> dean, are you as -- as a great inventor, are you usually in favor of regulation or not? >> i'm in favor of regulation that makes all opportunities equally available to all the competitors in a given space i'm not in favor of regulation done by people that are simply in fear of the unknown, that think that they can stop the development of technologies because they're afraid of them because for one consequence of that, that it will only be the bad guys somewhere else that do

develop the technologies and then fears will come true. >> i also asked him what role art and education can play in times of war >> after running first with first 15 years which now makes it about 15 years ago, we started getting teams out of israel and finally about ten years after that, israel had over a thousand first teams and the honorary chair over there, and little israel, a thousand teams, i got a call from shimon peres, who was nearly 90 at the time, who said, dean, i have seen first not just in israel, but in gaza, among the palestinians, teach these kids they all have the same issues, they all are facing global w warming, they're all facing the same issues and if we can get to these kid before their parents teach them how to hate each other, which they have done for a thousand years, we can use science and technology to bring them all together and break the cycle of self-destruction.

>> if there is a song to be written, i think the song applies to what is going on right now is where is the love >> where is the love we covered a.i. regulation and so much more, even the story of how the inventor segue met the front man of the black eyed peas and you can catch all that and more in our daily podcast, squawk pod, available wherever you listen to your podcast, joe. still to come, exxonmobil chairman and ceo darren woods on the company's latest quarter consolidation in the industry and really fresh face there. consolidation in the industry and much more. we'll be right back. when you think of investment risk, do you consider climate risk? >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. and the value of businesses large and small. this can mean disruption to supply chains, changing demand for products and shifting regulation. what does this mean for your business,

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welcome back to "squawk box. look at futures. we got a bit of a mixed picture right now. dow was up, now down 71 points the nasdaq up about 102 points the s&p 500 up about 9 points, becky. >> and shares of french drugmaker sanofi taking a hit this morning, a big hit, following the release of the company's quarterly earnings and maybe more importantly the announcement of a plan to spin off its consumer healthcare business sanofi ceo paul hudson joined us in the last hour >> what we announced today was that we would create a 2 billion euro spending plan, sorry, saving plan.

within that we'll reallocate the vast majority to r&d and to most important projects that's our job but we think we'll create more value that way >> shares of sanofi right now down by 17.5%. joe, i think some of the big questions are where is the pipeline now this big need for r&d and what to do with it. >> yeah, he didn't -- kept talking about how positive all the future was, but i don't know investors are having a hard time, i guess, visualizing it. 2024 is not going to be a great year and so it takes a leap of faith to believe that by -- and a lot of it is cost cutting by 2025, not necessarily that all the new r&d pays off you know how long drug development is and the tax rate. trying to get at what the global harmonic tax rate is and i'm just -- it went from 19 to 21% and said a lot of the money that we would have been

spending on r&d will go to -- it is a french company, we made that point again and again european drugmakers have not had the innovation we had here for a lot of reasons >> it is also what you will pay for drugs on the other side of things too >> right to cap prices, make it much harder to make enough money to reinvest, it just -- i don't know comes back to haunt you. coming up, exxonmobil chairman and ceo darren woods and select committee on china members ro khanna and mike gallagher join us to talk a.i. and other policy issues in washington later, falling crypto king sam bankman-fried taking the stand in his fraud trial in a manhattan federal court yesterday. we'll speak to former s.e.c. chaijar y clayton about the case and much more. get your tweets ready for jay clayton, can't wait. "squawk box" will be right back. >> announcer: this cnbc program

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exxonmobil reporting its third quarter results with adjusted profit coming in tencents below what the street was expecting, $2.27 a share was

that number. joining us to break it all down is darren woods. welcome. good to have you here today. >> good to be with you, becky, good morning. >> let's talk about what's been happening with the broader environment. your numbers were down from what the street was expecting down year over year, but up quarter over quarter part of that, you say, is because of higher crude prices in the third quarter and industry refining margin environments what is happening? what are you seeing right now? >> it goes back to what we have been talking about over the last year, the pandemic and the impact that it had on the supply supply continues to remain fairly tight and so you will see margins and prices move pretty dramatically with changes in demand so as demand settles down, we see the margins and prices come off, if demand spikes back up again or begins to rise, there is not a lot of additional capacity to respond. so we'll see margins and prices move my expectation is we're going to continue to see that level of ups and downs as we move forward

until additional capacity comes on to the marketplace, which is still a couple of years out. >> the demand picture, we got u.s. gdp much stronger than a lot of people had anticipated, 4.9% that's the u.s. though what are you seeing in terms defend m o demand around the globe? >> europe has its challenges, particularly with their energy supply and the impact that that had on their competitiveness so we have seen the economic growth in europe basically come to a halt. and then china, i think, is slowly coming out of its challenges that were coming out of the pandemic and the lockdowns. that's still, i would say, tepid growth there, but some signs of improvement. and then, of course, u.s. is looking at fairly solid. >> in terms of headwinds that you faced during the quarter, you listed a couple of things. one was weaker chemical margins. the other was an unfavorable dr derivative market to market

impact what derivatives do you have >> we see this when we're training in a market with rapidly rising crude prices. we often see the earnings and the booking of our earnings manifest themselves with time while the cash shows up with the activity in the quarter. we saw this, this quarter. very similar to what we saw first quarter of last year the earnings manifested themselves and unwind with time. but the important thing is the cash comes in the quarter with the activity and we saw that in this quarter one of the reasons why we beat consensus on our cash by a billion dollars is the activities that we had in trading and, frankly, the performance of the overall business. >> operating cash flow was $16 billion, up by $3.4 billion and a billion dollars more than the street was expecting what else is happening in those numbers? >> i think it is just underlying performance of the business. we have been growing our performance products, refining facilities very, very well with reliability. we're bringing on new projects

and they are operating extremel well as we move through the quarter and our organization delivers some very significant projects, those begin to impact the bottom line so we're going to continue to see that as you know, we got a pretty good portfolio of projects and opportunities across all of our businesses and our products organization h has been delivering those pretty consistently and operating very, very well. i just add that that projects organization that we put together in 2019 is actually an extremely critical enabler to what we're trying to do on our low carbon solutions business. if you look at the challenges of starting a brand-new value chain, a brand-new industry of carbon reduction, piecing together the pieces of that value chain, from end to end, and building the capacity to

handle the scale of the emissions that the world needs to reduce, that projects organization is a critical enabler and differentiator for us versus basically any other player in that market right now. >> let me ask you one more broad question, just about what is happening in the middle east we had roger altman on with us a little bit ago and he was saying that we're watching the middle east minute by minute, it could erupt into a broader war there. how do you prepare for that at the board level, at the -- in the ceo position in terms of what you can and can't prepare for that when it comes to oil? >> i would say what is happening in the middle east is tragic and frankly it goes well beyond our industry hasn't had a specific impact to date, and we're keeping a close eye on it. i would tell you more broadly for our company, we recognize we got these geopolitical impacts on our business and one of our strategies, long-standing

strategies to make sure we got a fairly diversified portfolio of supply and projects and facilities around the world so that we can try to mitigate through diversification the impact of any one particular area on our company. obviously that area is pretty critical to the industry as a whole. and therefore would have some more significant implications for the global markets if that was to expand. as a company, our strategy has been to try to stay fairly diversified and that has been -- that has helped us through a lot of challenges in the past and our expectations that will continue to be a really important risk mitigation mechanism. >> have you had to shut down any projects or move any employees to date? >> no. we have got some businesses in that area, but none specific or close to what's currently happening there. those facilities we're watching very closely, we got raised security protocols where it is appropriate, managing our

employees, travel and so basically keeping a close eye on that and making sure we're keeping our employees and our operations safe. but no direct impacts as of now. >> have you had the chance to talk to a lot of shareholders, i would assume, since you announced the pioneer deal stock is down by 2.2% since the day it was announced i think your stock tends to track more closely with wti. what have you heard from the shareholders you've spoken with? >> i think there is a lot of support for the strategic fit of what we have done with pioneer if you think about -- go back in time what we started focusing on in 2018, to drive our key core competitive advantages, and then at the time, i talked about in the permian unconventional space, we had a lot of independents playing a short game, long ball hitters, let's bring the long ball game to the unconventional space we have been working to do that. that basically means doing it at scale. and driving technology into this resource and to raise the recovery rates, drill more efficiently. we have been very successful

with that. we're now drilling more productive wells, lower cost, higher capital efficiency and getting more recovery and that's a huge opportunity now for taking the work that the organization has been doing to grow competitive advantage, grow our capabilities and skill sets through technology and our development approach and now apply that to premiere tier one acreage in the middle and that pier in developed. they got a great organization with great people who really understand that resource base. we bring a lot of the technology and development approaches that leverage our experience all around the world, putting those two things together means we're going to basically go for more -- get more recovery and grow more production, do it at a lower cost and reduce emissions at the same time that is a win-win-win proposition. good for our shareholders, good for the u.s. economy, good for u.s. energy security and it is good for the environment, with reducing emissions that is as close as to magic as

you can get in this industry i think our shareholders recognize that they want to see us demonstrate that performance the thing that people tend to miss is we have been delivering very similar results to pioneer with much poorer quality acreage. when we take the improved a acr acreage, we'll see significant improvements and that underpins the synergies. >> that deal was the biggest you all have done in this century, since you bought mobil a few days later, a week or so late, we saw your big competitor chevron make an offer for hess, a deal they're putting together. you look at that, and look at the two deals, that was a pretty huge deal too. they got the diana oil that they're going after too. you look the at that, do you let pur like the purchase you made or what they made

>> i think that is a great resource and one that we're very proud of and we have been developing it frankly at industry leading pa ing pace, oe cost efficiency of that, we're bringing those production units on ahead of schedule and below budget and running them at rates higher than what our investment base was so very successful opportunity or development and chevron's primarily buying into that and the capabilities we built there. frankly what we're trying to do in our acquisition is bring a unique capability to a unique asset and grow the value to something bigger than either company could do on its own. frankly, that, to me, is the -- what is the fundamentals around value creation for shareholders, finding where one plus one equals three or mour frankly the deal we have done achieved that. so i feel really good about the deal we have put together with pioneer. that's going to with time have a

significant value creation for our shareholders and, like i said, for the country. >> thank you for your time today. darren woods, chairman and ceo of exxonmobil. >> thank you, becky. up next, the latest on the a.i. race with china and let's check out the futures. haven't looked at them in a little while right now, dow futures down by 100 points s&p up by 7, the nasdaq up just over a hundred shk "squawk box" will be right back.

welcome back to "squawk box. president biden reportedly ready an executive order mandating assessment of a.i. not els for a closer look at the a.i. race with china and other policy issues on capitol hill i want to bring in congressman ro khanna of california, member of the select committee onchina thank you both for joining us right now. i will go to congressman khanna first. you saw what president biden is now talking about when it comes to a.i do you think it is realistic that the u.s. government is going to actually be able to understand what is even under the hood of some of these programs >> yes, it is. i mean, first, the export controls, export restrictions on these chips are really important. we should not be letting advanced logic chips, nvidia chips into china, and they need the advanced chips to do a.i

the second thing is the united states has a huge advantage when it comes to hachlt y a.i. china tells the a.i. models don't talk about the tiananmen square massacre. you are not going to get it to work effectively when ccp is regulating the input the final input is we need more technologists in washington to understand the safety mechanism, but my view is we have a lead over china >> congressman gallagher, are you satisfied that we have the right protections in place to prevent some of these chips from going elsewhere? do you believe that actually secretly some of the companies are actually knowingly providing these chips to places like china? >> i think these companies face a bit of a dilemma they want support and subsidies from the federal government, but at the same time they have business in china, low-end chips that they don't want to jeopardize i think it is a reasonable area

where we on the select committee on china and other committees can ask hard questions i agree with a lot of what ro said about the importance of export controls. we need to get those right we need to bring along as many allies as possible above all, when we look at this space we need to understand that a world in which the chinese communist party dominates critical technologies, particularly artificial intelligence, is a very dark and dystopian world and one we don't want to live in. while i agree we have a lead in this space it is very narrow, and it is something we need to actually increase. we don't have the luxury of pausing or stopping. so getting that balance right, that balance of guardrails so this technology isn't used for dystopian purposes while at the same time doubling and tripling down on innovation, that's the challenge. that's why i look forward to digging into this executive order and why i'm so fortunate to be able to work with my colleague, ro khanna, who is thoughtful on these issues >> congressman gallagher, you

talked for a long time, both of you have talked for a long time about protecting taiwan from china. that has now been sort of looped into a larger conversation about israel and now -- and ukraine, all three of them together do you think that they should all be put into the same bucket? >> well, the bucket they are all in or the thing that they have in common is that we need to make a generational investment in our own munitions industrial base all of the long-range precision fires that are critical not only for the indo-pacific, critical to preventing a war with china over taiwan, but also have applications in the middle east and in eastern europe. in terms of the legislative strategy going forward, what makes the most sense to me is to take aid for israel, put that on the floor next week, potentially package it with a more robust aid package for taiwan because if you look at the supplemental request from president biden, the taiwan portion, indo-pacific portion

was woefully insufficient. it was about $2 billion all things considered. the actual number is probably closer to $10 billion. then launch a parallel track linking aid to ukraine for some common-sense compromise on the border that to me is something i think could actually pass in the next few months, but the reality is our munitions industrial base is broken it is brittle. we need to fix that. >> congressman khanna and then, congressm congressman gallagher, you can weigh in on this governor newsom, first governor from california to head over there, they looked like these guys really liked each other i don't know exactly what they were talking about, but i mean we know about china and the relationship that xi has with putin. were there political overtones to why gavin newsom was overthover there glad handing with president xi does it look good to anyone, ro?

>> i have no problem with him going there. i would have taken a different tone let me say the most bipartisan work taking place anywhere in congress is on the china select committee, and that has a lot to do with mike gallagher's leadership here was the challenge meet with xi jinping, but the first three things should be what is happening with the uighurs and the human rights crisis >> right >> what is happening with our trade deficit? why do you have a trade deficit not just with the united states, a trade surplus, but with india, japan, south korea that's got to stop we want our jobs back. what are you doing in terms of ratcheting up the tension on taiwan let's be very clear, you're not going to have any support and you will have huge deterrence and opposition if you make a move on taiwan that needs to be the conversation >> yes congressman gallagher, there was none of that, was there? did you have -- what is your side saying about that photo-op? >> well, at the risk of making this a bipartisan love fest, i

agree with everything roe just said >> it seems reasonable >> exactly this is cable, gallagher, come on tell ro, he is supposed to take the other side >> that's right. i'm not trying to meddle in california politics either but there's a view we can compartmentalize our relationship with china, we can have tough export controls and then seek a cooperative relationship on climate change the china communist party tends to reject that more to the point, in our efforts to sit down at the table we tend to delay necessary defensive action obviously i think governor newsom wants to be president of the united states. >> right >> and part of that effort -- >> if he opens that, ro, a challenge to biden, he has to get in line because you know what is first, ro/joe ticket >> gallagher has to be secretary of state on the ro/joe ticket. i don't want the top job, i want to be the veep

you are the top of the ticket. >> thank you >> congressman khanna and congressman gallagher, thank you guys appreciate it. have a great weekend coming up in the next hour, the fed's favorite inflation gauge, pce data, will be released at 8:30 "squawk box" will be right back. r on either side, while you both sleep at your ideal level of firmness, comfort and support. your sleep number setting. and now, our new next gen smart beds have temperature benefits, so you sleep better night after night. and now save up to $500 on our new sleep number smart beds. sleep next level. shop for a limited time only at sleep number. in the u.s. we see millions of cyber threats each year. that rate is increasing as more and more businesses move to the cloud. - so, the question is... - cyber attack! as cyber criminals expand their toolkit, we must expand as well.

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good morning we are counting down to new inflation data the fed's preferred measure hitting this hour. meanwhile, earnings in focus we will bring you new numbers. exxon and chevron reporting. we'll take you to highlights from amazon and intel as well. then there's this. sam bankman-fried set to testify at his fraud trial today something of a practice run yesterday. we will explain. today he's expected to face the jury the final hour of "squawk box" begins right now ♪ ♪ ♪ ♪ good morning welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square i'm "joker" then along with becky rice and andrew

ross sorokin we had good numbers when it started, still with the nasdaq, but the nasdaq was up well over 100 earlier in the pre-market session. the dow at one point was up 100. >> and it was up at one point earlier this morning by 8% or 9% when we started. >> now down. it is not our fault. we're not taking that. the s&p was indicated up 27. i at least saw that when i first checked it now it is up only 5. we have pointed out high -- the high in the s&p to where we are now, about 9.6% in terms of coming down. so that's just -- just almost a bona fide correction which we have seen in the nasdaq. treasury yields, whether that's part of the issue for the week that we're now seeing. ten-year, 487. when it gets at about five you do see some headwinds, but it is not -- today, of course, with

pce number i might not want to go into that position if i were a trader >> right, right. another big mornings for earnings, too. frank holland has been rounding them up and he joins us right now with some of the headlines obviously we heard from big oil companies this morning, too, frank. >> we will start with the big oil earnings we will start with exxon, beat on revenue but miss on eps you see shares are still up about a quarter of a percent you had the ceo on the show in the last hour. here is what he had to say about the quarter. >> the important thing is the cash comes in the quarter with the activity, and we certainly saw that in this quarter one of the reasons we beat consensus on our cash by about a billion dollars is the activity we had in trading and, frankly, performance of the overall business >> all right another big oil company reporting, that's chevron. you can see shares down about 2.5% after a beat on revenue but a big miss on eps. profit was 19% below estimates you can see right here chevron shares down 9% since announcing

a $50 billion deal to acquire hess also we have another earnings mover, that's sanofi plummeting. dropped 25 targets after announcing a plan to spin off the unit that ceo on "squawk box" earlier this morning >> we take the long-term view today may be a little bit disappointing but we think as the dust settles and people get more familiar with our story, we have earnings call later, rnd later in december, stocks will start to appreciate the value, i think we will get back to where we need to be. we are well-positioned for the long term and i think we are starting to show that. >> following today's report, sanofi's share, they're negative yea year-to-date on the drop, down almost 10 percent year-to-date after the earnings report. those are the movers this morning. joe, back to you >> ceo to his credit did come on, frank, as you just saw a tough day. tough day, but that's the day he

has to come on to try toexplai things >> you certainly want to take to investors on a day like this where you drop your target, announce plan to spin off a target and you miss on top and bottom line. a lot to talk to with the shareholders. >> the outlook would be hideous. that's the gain for the year, up 20% for the year and now down 18 that's a lot of work reversed in one fell swoop let's talk more about the broader markets and the week we've had so far with liz young, head of investment strategy at sofi is the s&p going to get into an actual correction, do you expect that it is down about 9.6% on the highs now, liz >> well, i think there's been a decided tone shift in markets where you have got more investors looking for reasons to sell than reasons to buy yeah, any time you even see -- look at what happened this morning in the premarket enthusiasm for buying, it sort of wanes either throughout the intraday session or in the premarket before we open so i do think we probably get

the correction territory we are not far from it right now. it may not happen today, but i don't think we're far away and because we've blown through some of the levels of support that people were looking for a bounce at, i do think that it probably goes lower. >> and given the 4.9% hot gdp number and the geopolitical backdrop, liz, maybe we should be surprised that things haven't been -- you know, it hasn't been even weaker. what's the next positive data point that could turn things around or is it going to be more of sort of this drip, drip, drip of negative news >> i think a lot of people are surprised it hasn't been weaker. one of the interesting things that investors should watch today, we are going to get the pce data if you look at just the expectations for core pce today, which as we know is the measure that the fed watches most closely, expected to come in at 3.7%, the projections that the fed has for the end of this year

are 3.7% so even they don't expect it to come down much further from here so i do think many investors and economists and strategists have been surprised that things haven't been weaker already, but i do think we are seeing cracks. to answer your question about what's the data point that would change it and turn things around, i think we would have to see that the consumer did stay strong so far that has happened but we are seeing some weakness and you are seeing things like auto loan delinquencies rise, credit card delinquencies rise there is concern that the consumer is starting to pull back, not to mention that the market has sniffed it out to some degree where you have cyclical stocks down, retail stocks not trading well, bank stocks, particularly ones that are exposed to consumer lending, not trading particularly well. i don't think anybody is entirely confident we are not going to hit a period of contraction at least in consumption. >> listening to you, i just have a feeling when we see consumer

data that there are some people that wish it wasn't as strong for the market, some people that are -- that want to be long that think the strength of the consumer is actually one of the things causing the fed to stay higher for longer and maybe it influences long rates. it would almost be a relief. we almost look for weakness in the consumer so we can stop worrying about interest rates going to 5.5% or 6% on the ten-year >> well, our economy as we all know is driven 65% to 70% by consumption, and the fed has said over and over and over again that they need to see a period of below-trend growth in order -- >> what do we want what should we hope for, that's my point >> in order for the fed to be satisfied with the job they've done and where inflation is, we have to get to the below-trend

number 4.9% gdp growth is far below the trend. we would need the consumer to cool >> when you said the next important data point for what could turn things is the consumer, you mean the consumer slowing? is that a positive if the consumer is slowing? that's what i'm saying >> in some regards it would be a positive >> okay. >> just in the sense of bringing some of that consumption down to a more manageable level. >> i agree >> in order to get supply and demand back in balance the trick is, and this is the part people are worried we can't pull off is that the consumer doesn't slow too much. the other piece that we haven't talked about is the labor market, and the consumer will keep spending as long as they're employed if the labor market gets hit and we are hearing companies talk about cost cutting, if the labor market gets hit i think it will slow much faster than we want it to >> okay, liz thank you. it is still friday no matter what >> we still got that >> yeah, we still have that

under our belt thanks >> friday. ♪ i'm in love ♪ >> we have to sing it ourselves. >> we do not allowed to play it >> when we come back, pce inflation numbers are out at the bottom of the hour next, the latest in the sam bankman-fried fts case the former crypto ceo expected to take the stand today. jay claytowin ll join us on that stay tuned you are watching "squawk box" and this is cnbc i'm so glad we did this. i'm so glad we did this. i'm so glad we did this. i'm so... ...glad we did this. [kid plays drums] life is for living. let's partner for all of it. i'm so glad we did this. edward jones ♪ ♪ every day, businessess. everywhere are asking:

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welcome back to "squawk box. we will talk about morals right now. sam bankman-fried taking the witness stand at his fraud trial. this is hours after the prosecution rested his case but the jury wasn't in the room. it was an unusual situation yesterday. the judge sent the jurors home so he could decide which parts of bankman-fried's testimony would be admissible as evidence. sam bankman-fried effectively almost did a dry run of at least some of the testimony in front of the judge so he could decide which parts he wants him to be able to be questioned about in front of the jury. well, today bankman-fried is expected to be back on the witness stand with the jury, and we will see where the judge lands this morning on some of that testimony joining us to talk about the case and so much more, jay clayton, former sec chairman and cnbc contributor what did you make of this unusual sort of dry-run, dress rehearsal,

i-want-to-see-what-you're-going- to-say first, what did you think of it? >> you had a remarkable interview i think less than a year ago in the bahamas, not knowing what is going on in less than a year we are at the final stages of the trial here with what i would say is a very competent judge you know, incredibly experienced. a prosecutorial team and a good defense lawyer this is the way our judicial system should work we are here, we are getting results in a very short amount of time. what was going on yesterday? if you are a defense lawyer, your job is to sow doubt in the mind of the jurors, doubt there was really in this case intent here >> right >> what is a way to do that? is to say that, you know, on the intent to defraud, on the intent to use funds that there was a reliance on others, and here the reliance on the lawyers. that is a legitimate defense if you actually got legal advice

about the actions you took >> right >> i think what the judge is trying to assess here, is there enough indition that sam sought advice from the lawyers, that he was told what he was doing was permissible, there's that defense. >> there's how much the lawyers knew, right. there's the second issue, specifically that's the question the judge was asking yesterday, if you rob a bank and talk to your lawyer and say, i need you to help me move the money here to there, if you didn't tell the lawyer prior that the money was from the robbery that you can't really then claim that you relied on the lawyer however, if the lawyer was involved with the original robbery, and in this case the suggestion is such, i think, if you believe that it is a robbery at all, and i know that's a question of this whole case, then would you allow this legal piece of it in the other thing, it seems to me,

is that the lawyer that is in question, nobody seems to want to call for this case because then you also then have to open up all sorts of other issues >> so neither side wants to call the lawyer >> thus far i don't think -- prosecutors clearly did not want to call the lawyer, and it doesn't appear they want to call the lawyer >> we'll see but you cast this in exactly the right way, which is are there enough questions, did the lawyers actually know enough facts where there was real legal advice that you could rely on? from what i saw in the transcript, there was not that type of indication you expect deep engagement with your lawyers on whether i can take my customers' funds and go do something completely different with them. >> the only reason that door might open is that it appears that the lawyer was the one who wrote the terms of service with some of the language that appears to allow for wild things

to happen. >> yeah, and then there were -- just reading the transcript, there were all sorts of questions about whether sam asked about that >> right >> yeah, what did the terms of service allow or not that was the back and forth about whether messages --. >> let me say this, the betting line, of course, is he will be convicted of at least some of the counts if not all of them. i imagine they will try to appeal the case. these cases are very, very difficult to appeal, but given how limited the defense has been, meaning the judge has limited this defense on a lot of different issues in a sort of -- i think people would say in a unique way do you think that is going to make this case a more appealable case >> that's really the question is judge is going to grapple with this morning, which is, you know, is this something that although -- and you saw his skepticism away from the jury, which is although it looks like a fairly speculative defense, should i allow it in, you know, as a matter of -- you know,

based on good administration of justice. >> just before -- coming back to this, bitcoin was hit 25% in four days, and we had the sec -- >> going next, go ahead. >> sec said it is crazy to me that we haven't -- that the sec hasn't okayed this spot -- but she also said these other three people -- basically said were never going to do it so people that the rorschach, one side saw her say it is insane it hasn't been okay the other side said these people i'm working on this with are not going to do it why is it up 25% and is it still inevitable this year >> i said it was inevitable. >> this year you should never give it time and -- >> right, i'm learning from you. >> don't give a time and prediction >> no, the issues that were in

doubt, you know, is trading manipulative, and for a time period people thought 90% of trading in bitcoin was wash trading, lateral trading or otherwise -- is there enough data about trading all of those questions in addition to what bitcoin is classified as which is a comm commodity, they've all been decided. so the questions that sowed doubt in my mind, look, i was not comfortable approving a bitcoin etf when those questions were open. but i think now they've been decided -- >> you would echo what she said, it is totally logical it hasn't been done? >> right, i don't know whether bitcoin will be worth a lot or a little but we are at a point the market can decide. >> that's interesting. >> jim, let me ask you this. are you of the view that what you are seeing here because we have block rock on the docket and fidelity and some of the big names, i think a lot of people seem to take great comfort in the idea black rock is the one asking or fidelity is the one

asking and it is not gray scale, which is a smaller firm that's been asking for this, that that somehow is a distinction and somehow the sec is going to look upon them more favorably because of who they are or because they have relations with -- how does that actually work in practice do you get this application from black rock and go, geez, because it is coming from blackrock i should probably do this or do you say it doesn't matter that you are blackrock or the lovely guy behind here that served coffee outside >> let's give the sec some credit that's not how they look at it what is the blackrock and fidelity indicating? a deeper exploration of the issue we talked about. there's been back-and-forth dialogue with people that have applications, demonstrating the trade is efficacious, demonstrating people can have the data, demonstrating there's a way to hold this so theft and the like are reduced >> right >> so many people coming in and

saying, yes, we looked at this - >> one quick question. your shift is apollo and a number of other companies you're involved in, involved in bitcoin at all >> not to a great extent >> they have to hurry because you know it is coming, right before the reckoning >> what's the reckoning? >> that's a bigger deal than the having >> what are you talking about? >> the hasslving is coming in a year then after that is coming the reckoning. that's when we all go to heaven or something what is it >> day of reckoning. you are the one talking about we separate church and state here >> all right but halving sounds like the reckoning, almost cultish. >> i don't want to be left behind >> we'll see >> i want to make clear, i give advice on where i think the world is going >> right >> i have been right, i have

been wrong but, you know -- >> no, no, i - >> but if you were in the chair you would have decided >> yeah. >> to bring it by now. >> you think by now you would? >> yeah. >> that's a shift. that's interesting >> but i -- many legitimate reasons why it has taken a favor amount of time to get here >> fair enough jay clayton, thank you >> thank you >> apollo. coming up, breaking pce data next, john ford brings us the highlights of his conversation with intel's ceo following third quarter. "squawk box" will be right back.

intel shares getting a nice pop after beating expectation. revenue fell 8% from a year ago but the company said it expects shares to grow in the quarter. up about 6.6%. john ford spoke with the ceo and joins us with more hey, john. >> hey, becky. i spoke with scott gelsinger and asked about the moving competition from competitors for qualcomm and by perhaps nvidia >> by the time others are delivering the first generation, we will be delivering lunar light, a staep up. we expect to deliver over 100

million pcest a.i. enabledfall we announced a.i. accelerator for the pc platform. over 100isvs are participating in that. they're not waiting for the chips to come a year or two from now. they're jumping on the intel platform right now we would also say that arm-base clients have been low-end, low-margin of products never made that much of a difference in the pc marketplace overall. so we feel like, you know, if we execute well around the x86 ecosystem that we have so much ecosystem momentum to benefit from that we will do well. >> bigger picture, becky, the execution in this quarter was the stand-out. pat told me of his nine quarters as intel ceo this was the best one. >> yeah, it is probably true of the stock reaction, too, right, john >> it is and really i think this quarter is pivotal we were talking about it yesterday on the other hand.

this is pivotal because now the calculus that intel can actually pull off this foundry strategy, fixing manufacturing and fixing design at the same time, it gets so much more likely because how close they are to having to turn in the results and actually being on schedule and ahead of schedule in certain things the analyst commentary post this print and this call is shifting quickly. >> yeah. and year-to-date that stock up 31%. john, thank you. jon fortt. >> coming up next, breaking pce inflation tada we will bring it to you. don't go anywhere. "squawk box" coming right back on this friday morning

♪ ♪ all right. welcome back to "squawk box", everybody. here we go, a friday morning and we are just about an hour away from the opening bell. you can see the dow futures down by about 35 points right now s&p futures up by 10.5 the nasdaq up by 91. we saw better numbers two and a half hours ago d we have data hitting right now steve liesman is standing by with breaking inflation data steve, what can you tell us?

>> personal income, 0.3%, becky, a miss on the 0.4% that was expected expenditures, a big jump there 0.7%, above the expectation of 0.5% on the important price indices, headline at 0.4% and food and energy at 0.3% that's right in line, the core people are interested in year over year the headline ticks down looks like .1 to 3.1% and the core at 3.7%. really in-line numbers, becky. there had been talk about whether or not this number would show something of a tick down below expectations because of the data yesterday or the positive core pce data in the quarterly gdp report we got yesterday. it was not the case. a touch light on income. i have to figure out where that

came from, but the spending number was strong. i will have to look. my guess is that the personal savings rate, yes, it did guess right, fell to 3.4%, running well below the average of 5%, 5.2% is the average of savings over the last several years. it is down people are running or using savings to keep up with their spending whether or not it is a smart choice or not, i guess it is up to the folks that are doing it prices for goods are up 0.2% services, strong, up 0.5%. one of the things we will be doing as the morning goes by is calculating that .csuper core number that fed share jay powell looks at i don't have that yet, becky >> let me run through. if you have people spending money faster than expected even as incomes are rising slower than expected, taking down their

savings by more than anticipated to keep up with savings, that could tell you one of two things either people feel pretty good about the economy or they're forced to tap into savings to keep up with inflationarycosts that are rising at a faster pace >> right just to make it more confusing, there's a third possibility which is that both things are true for different cohorts of people there could be a lot of stress, for example, at the low income trend. you could have folks on the upper income part that are feeling comfortable with what they're making the job security numbers we've seen, becky, for example in our cnbc all-american check survey have been pretty strong. people feel pretty good about their jobs and job prospects among seven financial areas of stress we polled about, job security was the least stressful or the other one, people were most comfortable about it. in that context you might be spending more of your income, more of your savings in that regard

we also don't know the level of savings that people have so it could be that people feel like i've not the money for the rainy day and therefore i'm okay in this month spending a little bit more of my income. it is not to diminish the stress part of that explanation that you put out there which is, indeed, people could be stretching to make things work you still have relatively high inflation. not only high inflation but you have a relatively, you know, high price level people are not quite used to that price level yet, although one of the things, just to contradict myself very quickly here, one of the reasons put forward, why are consumers out there spending prices for some things may have come down, that may have induced some to come in and do some spending that they may have held back on. >> yeah, although gas prices are up, other things, too. steve, stay with us. let's widen the conversation for more we want to bring in betsy stevenson, a university of michigan economics professor also, e.j. antony who is an economist at the heritage

foundation becky, let's start with you. which of the three scenarios do you think it is? >> i think you want to start by remembering that the fed surveyed finances showed net worth was up 35% over 2019 that's a whopping increase i think it has been great we haven't seen households really dipping into that giant increase in net worth to spend, but it is not surprising, is that you will see savings level off because there's been a lot of savings accumulated. you know, one of the things people want to use their savings for is to be able to keep their consumption strong even if their income dips down the question will be, you know, does -- at some point where does that all level off but the labor market is incredibly strong. it gives people a lot of confidence that they're not going to get laid off, that their income is going to keep coming and there are other opportunities out there. perhaps they see a promotion on the horizon or a new job opportunity they might take. >> e.j., what do you think

>> well, respectfully, i think we need to keep in mind that the net wealth -- net household wealth number from the new york fed is nominal and it is not inflation adjusted once you do adjust it for inflation, you find that almost all of the gains we have had over the last two-and-a-half, three years have simply been inflation. it is not an increase in real value. furthermore, if we look at the income number we just got, if you again adjust for inflation you find we are down about $1.6 trillion today compared to the first quarter of 2021. so i think it is pretty clear what is happening is consumers are increasingly having to deplete their savings and go into debt. we have over a trillion dollars of credit card debt in this country despite the fact interest rates on the credit cards are at a record high people are struggling to make ends meet. if we go into the details of the monthly bls job reports, what we find increasingly is people taking on second or even third

jobs in order, again, to make ends meet. >> betsy, i will say the balances people are carrying on their credit cards, especially when you look at rates that are 20%, maybe higher on those credit cards, that that is a little shocking and you wonder when it is going to catch up with them if they're paying the minimum on that. >> you know, absolutely, although, again, you know, what we saw was credit card debt coming down and now it is starting to go back up i think the question will be where is the normal number look, you know, you you said let's compare savings to the first quarter of 2021. that's a funny month and quarter to pick because what we knew is going into 2021 households had accumulated nearly $3 trillion in excess savings. of course, we expect that to dissipate. we might expect the excess savings number to go all the way down so the fact it is roughly halfway down or two-thirds of the way down is not a big shocker or surprise to me.

>> let me guess. you guys are picking that number because it happens to be when biden took over? is that the context i didn't catch the first time around? >> oh, i thought he was just picking it from a high point if you want to pick a number and say, how much has savings gone down, you would pick from a point where we had the most excess savings sort of we've had and that's misleading. let's compare to 2019, which is -- i'm just doing it -- no politics here. let's just think about pre-pandemic and post-pandemic so we have a normalization that's going to have to happen i mean, look, the thing that i will just keep saying on the spending is we see spending happening and we see new business formation happening so as households are continuing to feel confident enough to spend and start new businesses, i think they're just going to keep pushing through this. we do see that wages are adjusting for inflation. i know there was a period of time where they weren't keeping up, but they are starting to keep up now. the fact that we could have a

blockbuster gdp number like yesterday and see our inflation numbers continue to come down, i mean on that we might want to pause and give president biden some credit for an economic miracle. >> steve, you had a comment you wanted to jump in? >> yeah, i don't want to jump in on the miracle idea. what i want to underscore is the notion of what ej was saying yes, there's definitely stress out there but people do continue to spend it is like watch what they do, not what they say in the sense that if people were really feeling that stress and it was widespread, then i don't think you would see the kind of spending and spending on what looks to be discretionary items as well. there's another aspect i will try to look up in a second, but there's been a lot interest income payment out to the population so there's a population right now that not only is getting

decent wages in terms of where their wages previously were when inflation was high, and betsy is right, you have had some catch-up between wages and inflation, but also getting an interest income payment. i'm thinking, becky, it is going to be tough to find a space on one of those cruises because i think the seniors are clipping coupons right now. >> okay. let's pile all of that back into this i against if i had to try to figure it out, where do you all think it is headed next? steve just came out with his assessment for this. betsy, what do you think happens next with the economy, let's say, over the next six months? >> i think the economy starts to slow but i don't think that it necessarily -- i don't think it tips into recession. the labor market is going to have to slow down, but i think we are starting to see, you know, what chair powell called

normalization. people switched jobs but they're in jobs they're much more comfortable with job satisfaction is up we can see -- again, i agree with steve watch with people do, not what they say what they're doing is indicating they're quite comfortable with their financial situation by their spending patterns. i think that's what is giving us the resiliency that we're going to continue to have. >> ej, i know you need to be addressed before you just start talking or anything, but i don't know does a splurge qualify like turning water into wine? is it an economic miracle courtesy of joe biden? >> no, i don't think so. again, if you look at yesterday's gdp report, that becomes pretty clear the fact that business is stocked up on inventories, yes, that boosted the investment numbers but they largely did that because they are afraid that the current surge in inflation is going to continue so they're trying to get ahead of that. it is not increasing fixed

investment which is basically flat over the last 2 1/2 years and fixed investment is where you get the machines, where you get the factories, that's where you get the productivity growth that increases gdp in the long run. we are not seeing that as far as the fact that consumers are still spending, yes, that's true, but who among consumers are still spending it is not by any means an even distribution it is very much among the upper income earners because they're the ones who still have pandemic era savings left the bottom 20% have not only exhausted their pandemic era savings but most of the savings that existed before the pandemic as well. so in the same way the stock market right now is largely being held up by the magnificent seven, you are seeing a similar effect when it comes to these income numbers as far as where we go from here, look, the treasury is sucking all of the air out of the room it is difficult to overstate how much they're crowding out the loanable funds market.

we borrowed over $500 billion just this month, more than twice what we borrowed the entire month of october 2022. forget a $2 trillion deficit we are on track for a much larger deficit by end of this fiscal year. if you look at the trajectory of spending, of borrowing and compare it to gdp and look at history as a reference, there's very good reason to believe the ten-year is going to 8% by the time this fiscal year is over. >> steve, i can agree with your idea that the two scenarios, either people are spending because they have to dig into their savings to pay for things they couldn't afford otherwise, or this idea that people are doing pretty good and they're doing it because they have job security i concur with your assessment it could well be both of those. but what you hear from ej and what you hear from betsy is a lot different story. it is hard to concur with both them what do you say when looking at the future and hearing these two rapidly die verging outlooks in

terms of what you think we should be looking for? >> i say what better channel is there than cnbc to have both of these very smart points of view on television here, and myself hopefully in the middle trying to make sense of it all. i will come back and say the number that i was looking at a bit, becky, the interest -- personal interest income, $149 billion up year over year compared to last year in the month of september so there was an interest flow to americans that is helping. i think ej is right. i don't know the data he is looking at i suspect he is right when it comes to the idea wealthier people have mon savings on this. i will say we have seen decent wage gains when it comes to middle and working class which has helped quite a bit i don't disagree at all about the unsustainablilty and the terrible situation on the fiscal side here. i think the biden administration has been remiss in not addressing that and working with -- well, i guess now they

have a congress to work with in order to try to address that but i think betsy is also right, that i don't think there's a reason to think the consumer quite gives it up here i have been following and, you know, becky these dour forecasts quarter after quarter, they don't come true. i think there's a minus 1% number -- not minus. a 1% number or lower for the fourth quarter i think it might be around trend again. >> all right steve, ej, betsy, i want to thank you all. we'll continue to watch all of this thank you for that instant reaction to the numbers we just got. when we come back we have key drivers of amazon's latest earnings and revenue beat, that stock moving higher in the premarket. we will take a look at that chart in a bit also, we will look ahead to the mega cap of all mega caps. what investors should expect when apple reports the fiscal fourth quarter results next week heading to break, check out shares of the two oil giants

that reported earnings this morning. exxonmobil shares up about half a percentage point chevron shares down by just over 2% stay tuned you are watching "squawk box" and this is cnbc r opportunity. whatever you see, at pgim we can help you rise to the challenges of today, when active investing and disciplined risk management are needed most. drawing on deep expertise across the world's public and private markets in pursuit of long-term returns... pgim. our investments shape tomorrow today. this thing, it's making me get an ice bath again.

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[ heavy breathing ] [ lights buzzing ] [ music builds ] [ screaming ] welcome back to "squawk box. elon musk's compensation formerly known as twitter looking to other areas dominated by other tech giants according to bloomberg, x said

youtube as future competitors. also mentioned possibly creating a news wire service that could be called x wire a source said yesterday's all-company meeting was the first time they have addressed all x employees together it came ahead of the first anniversary of musk's acquisition of twitter as it was known then quickly changed the name to the site x i don't know if you saw the other headlines. he said there would be a banking business behind all of this, that, you know, people would get their paychecks in there, you will be able to trade stocks, move money that's what he thinks -- >> that was always his idea years and years ago. >> that was the original vision. pre-paypal joe. amazon wrapped up a big week of tech earnings the e-commerce giant reported wealth above expectation revenue increased 13% in the quarter. amazon's cloud segment slightly

missed forecast though the company saw better-than-experted ad sales we heard from microsoft, alphabet, meta and apple earnings come next week. join us with a take on what is to come. dan flack, senior research analyst. analyst, you always have such a sunny disposition all things tech was there anything concerning in the outlook or the past three months for any of these companies at this point? or just buy them all >> joe, we remain selective when investing in the technology sector i think what we're seeing is continued pressure from cyclical headwinds, but these companies are navigating that. they're continuing to deliver -- they've been investing tens of billions a year annually in their e-commerce business and delivering value to customers. we continue to like that name and continue to like google,

particularly on this pullback once again, that business is accelerating i'll round round it out with apple. we think they're executing on the product cycles, and it sets the company up well for next year >> would you say, in terms of advertising, to the companies we're talking about now, it means more to come than to orders, but what's the state of the advertising business from what companies said and said about the future >> it's facing a lot of cross-currents in the near term. clearly war and geopolitical turmoil has an impact on budgets, but when we speak to advertisers why they're

continues to invest there, the ability to hone in on what potential customers want is incredibly valuable. that sets of digital advertising nicely as we think about the year ahead it sets this business up, even in the face of these crosscurrents. >> tell us about apple and what we should be paying attention to >> we're going to look for how the apple cycle is unfolding there's certainly concern about demand levels given some of the challenges that consumers are facing china remains difficult, but i think it remains attractive longer term. the other thing to focus on is the acceleration of the services business apple has continually reinvented itself think about the ipod over 20

years ago. iphone, we'll probably learn about a new mac next week. we continue to like the name, driven by the diversification of the growth driver. >> titanium, and jason bateman would i buy a new phone if i put a case on it anyway, just because it's titanium? >> the titanium devices are lighter. it's just this integration, joe, a full package delivered in a secure, fun way. >> my goodness, you're better than common. >> i'm trying to be a realist. i think it's balancing a lot of

the crosscurrents. >> thanks, dan we'll see you. coming up, we'll talk markets. "squawk box" will be right back. you know when you have those moments? that time to reflect. to be like wow... what did i do to get here? (city ambient noise) right. work. you worked hard and it's time for a bank that'll work hard for you. everbank brings security and a guarantee. that you'll earn a yield in the top 5% of competitive accounts. going, got you where you want to be. we're the partners for your next move.

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joining us is mimi duff. hi hey, mimi, talk to us about what we're seeing right now we have watched the s&p as of yesterday's close get to within spitting distance of correction territory, but you are still underweight stocks you still don't like what you see. why is that? >> we think the effects are going to be here for a while just haven't filtered through. you -- but we think also the effects of this consumer strength we have seen for the first part of the year, those are likely to slow going forward. >> if 10% of a drawdown isn't enough to bring you in, what would it take? >> a bit more of a correction,

or if we were to see signs this inflation is really coming from the 3.5 to 4% closer to the 2% fed target, that would give us assurance that the fed is closer to that, but we don't see that right now. >> your skepticism comes in, you just don't think they have inflation under control yet? >> that's right. that's right we think they'll be higher for longer the next leg of this trade will be more difficult. >> things you do like is fixed income >> primarily in the front end, and in tips specifically, with inflation. in the front end, the break evens are around 2.25% if inflation comes in above that, then you'll outperform we also like emerging markets, where we think those are closer

to our own >> when we start looking at some of the problem areas, residential housing, really short supply numbers, but you think the problems will continue what does that mean eventually >> that's an interesting one we think it's -- on the other side, you have a lot of current homeowners in very good mortgage rates s 25%, or close to 25% have the homeowners have mortgage rates below 3%. >> wow. >> 85% below 5%. so the longer-term effect is mobility they have good mortgage rates. the folks that need to buy homes right now are certainly going to be impaired by the 7% to 8% residential mortgage rates on the commercial size, we see it as a bigger problem with $1.5 trillion due for refinancing

between now and 2025 >> mimi, thank you wish you had a slightly different message, but we appreciate your time great to see you have a great weekend. >> thank you that does it for us. make sure you have a wonderful weekend. joins us next week right now it's time for "squawk on the street. good friday morning. welcome to "squawk on the street." i'm david faber along with jim cramer carl has an assignment today as we look at futures to wrap up the trading week, we start 30 minutes from now that's a bit of a different picture. >> yes we'll see -- >> that ten-year let's start with our road map. it starts with amazon, and