2023 happy birthday to my wife, p penelope still bewitched and bewildered, i am "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we're live from the nasdaq market site in sometimes square i'm becky quick along with joe kernen and andrew ross sorkin. let's look at equities it has been a difficult month. they are looking at the markets down for the month yesterday was an up day. dow fooututures indicated up ths morning. treasury yields with the fed meeting.

ten-year note in focus at 4.5%. the world bank out with the warning overnight. oil prices could surge to $157 per barrel if the israel-hamas war expands beyond the gaza strip. that would shrink the global oil supplies by 6 million per day. that is the large disruption scenario and the estimate is for oil to rise to $90 per barrel in the current quarter before falling to $81 a barrel in 2024 as economic growth slows globally you have the extreme cases >> a lot of ifs. i don't see anything slowing this thing down. that's what they said. if the war were to continue. >> escalates we had stavridis on yesterday.

he said he would put odds of escalation of 20% yesterday versus 10% two weeks ago then you heard overnight, from netanyahu, saying no cease-fire. that is not going to happen. it is not in the cards he will not resign >> that's just if it sticks to ga gaza iran is the wild card and if it stirs up, it could drag us into it >> hezbollah news from japan overnight. the country's central bank is la allowing more restrictive concern after the bond yield at 1% p it will not be capped at 1%. the bank will view 1% as what they call a reference. the change is an effort to limit large side effects that was confusing

a lot of people are trying to figure out what to make of it. it is not what some expected to be where they get rid of the yield control. it was a muted message the yen dropped against the dollar after the boj tweak. shares of bp came in at $3.3 billion profit against $8.2 billion in the same quarter a year ago it was an increase from the prior quarter. still, the profit figure was $800 million below expectations. weak results in gas marketing offset the strong performance in oil trading. funny. we sit on that gm big three strike story until it gets out of control >> it happened yesterday >> as soon as the show was over, the news was crossing. >> shawn fain. did you see him?

crowing. victory lap. got everything we wanted >> a fascinating article in the journal about how they did it and the team they built to do this >> i read it >> it was unique this was different from how they approached this before it was the small team of people who were not historically part of the uaw >> some are former bernie bros they did so many things differently. they were talking about it for a while. former bernie sanders' campaign managers they divided the big three instead of negotiating with all three at the same time picking them off one by one. they ramped them up to put the max pressure on it different way of going about it. now they are saying tesla is down overnight

now it will be the big six the next time around >> president biden is ecstatic about it we will see whether this is something that comes back to haunt the industry or the workers. let's talk about what is happening overnight with wall street reporting that nvidia may be forced to cancel billions of orders for advanced chips to china because of the u.s. export controls nvidia has finished delivering a.i. chips to china this year, but pushing for 2024 orders in advanced before rules in mid-november the report says the government told nvidia in the last letter last week that the new export restrictions on high-end chips were effective immediately that could impact $5 billion of

orders including alibaba and bytedance and nvidia the export controls will not have a meaningful impact in the near term. there is the debate of what it means. >> you alternated. i like this. this time, we'll do both >> what was that >> alternated. >> nope. i didn't notice. >> you're welcome. >> thank you >> good to do both that way we don't have to decide hedge fund manager stanley druckenmiller making conversation after the conference held last week and now comments circulating on twitter. in it, druckenmiller slammed janet yellen for failing to lock in low interest rates.

he said she was issuing two-year notes at 15 basis points she could have been issuing ten-year bonds at 70 basis points or 30 years at 180 basis points he called it the biggest blunder in the history of the treasury going back to alexander ha hamilton druckenmiller will join us tomorrow in the 7:00 a.m. hour i speak to him frequently. >> you saw what steve liesman said >> i don't know. i was talk to druckenmiller about it he was so geared up to talk about yellen he said every single person he has spoken to, everybody else extended their mortgages everybody else the most sophisticated -- >> this is steve last night

tweeting about druckenmiller he said the only time my records regarding druckenmiller's comments, the only time my records show the ten-year at 70 was under steve mnuchin. perhaps he committed the biggest blun ader in history i don't think so he built it up from the pandemic induced low, yellen brought it back to 72 months. average during her tenure. above the five-year average. in covering five administration everyone has told me the primary objective is to be reliable and predictable. specifically with the aim not to gain the market when rates are low. perhaps it would have been best to trim out the debt it needs to be weighed on the impact of the market and buyers and longer term needs of the

government >> we will read that to him tomorrow >> we will the point is this is now floated around with the unique criticism of yellen. i went back to fact check steve. i was curious. the truth is the lowest rates were not under yellen. yellen, it is hard to look at that and say she is the culprit. the true culprit was to become the political football it should not be a political football there is the secondary issue of when you trim out the date >> he told robinhood that he had full employment. we did $2 trillion >> druckenmiller has been very, very concerned about the debt and deficit and has been a hawk

on the issues for a long time. >> last time with delivering alpha, the one thing that got the most coverage was the ten-year under performance that was two years ago and the markets are where they were two years ago. >> there have been calls for the u.s. to issue longer term bonds and go to a 50-year bond >> i'm sure in the last two years when she was treasury secretary, she had time to even extend the maturity rate you should not do what an average fed had done when rates were low she was treasury secretary for a year when they were low. >> yes >> she could have extended. >> she could the secondary question that steve raises and we will talk to druckenmiller about it tomorrow. if you extend these things out and sold a ton of debt out on a very long-term basis, what would

that have done to the cost of the debt what would it have done to the markets? what would the signal be about where we were? >> larry summers was doing that for ten years. >> mnuchin was figuring the 50-year bond they were considering it from 2017 a lot of questions >> most of the treasury secretaries have never done it >> it would have made sense to move the whole portfolio out a lot longer it will come back to haunt us. that is druckenmiller's point. we are going -- we'll let him talk about it tomorrow i think of crowding out is when the government doesn't have any money to do anything we'll talk to him tomorrow the government only exists with private sector generated tax revenue. that is the government you really, if you crowd out the

private sector, a lot of what we are hoping to accomplish across the board, the private sector gets crowded out from taxes going up we don't do innovation we end up stuck like japan in a malaise. >> the yield curve control from japan. we'll have a druckenmiller on tomorrow more to come apple hosting a rare nighttime launch we will have the refreshed mac lineup we'll talk about that coming up. former dallas fed president richard fisher will be here to discuss the fed conference moow u e watching "squawk box" on cnbc >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com.

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welcome book app back apple revealed the new pc and macbook event last night looking to boost sales ahead of the holiday season joining us now to breakdown the tricks and treats is joanna sterns how spooky was it or how fast should i say

>> it was spooky in the sense it was held at night. i think they should have called the event scary similar instead of speedy scary. too many scaries the systems are similar to what we have seen in the past yes, there is a major chip refresh across the macbook and imac line which is good for people who are starting to buy the systems for the first time apple was interestingly noting the comparison in speed against the m-1 chip, not the m-2. now they are comparing m-3 to the m-1 chip they are comparing year over year improvements. most don't upgrade every year. >> so, as the personal computing co columnist that you are, will you tell people to go out and get

it you can get it now in matte black. >> the black color is very cool. the story here is if you need a new computer, these are great choices. apple made a point to highlight people who are still on intel systems. they are highlighting people on mac systems which they have been phasing out. the mac chips are superior to intel. they are quieter and cooler and faster everything is better about these, but, again, if you haven't needed a new lap plaptoo haven't run out to get one these are new choices, but you are not upgrading every year >> is there any benefit on battery life that is still the vain of my existence. >> sadly not if you are coming from a different system, yes.

if you are coming from the macbook, you will not see major battery life i harp on 22 hours of battery life you have to have extreme conditions you have to watch video and turn offer wifi and turn down the brightness you have to do pretty extreme conditions to get 22 hours of battery life. >> what does this mean for intel and for all of the other pc makers how much faster are the computers going to be and how long will it take others to catch up if they are going to catch up >> it is still catch up from the pc manufacturers windows makers in terms of what they are using in intel. that pushed the industry and new m chips pushed the industry to look at chips which are quieter and faster and also again, in many cases, similar to the mobile chips in smartphones.

qualcomm and nvidia and all of these people are in that game to get up to speed for the pc manufacturer dell, microsoft, hp against intel insinside. >> joanna, thank you happy halloween. we appreciate it you have a very good camera. that's not a laptop camera >> it's an iphone. >> in portrait mode iphone >> it has the blurring effect. i have the iphone mounted to my laptop >> thanks. happy halloween with >> happy halloween. when we come back, sam bankman-fried facing tough questioning on the witness stand yesterday. kate rooney was there. she will join us with the latest. and breaking target ceo brian cornell will

join us thursday morning in the exclusive discussion we will talk about a lot of issues out there with the consumer and backlash the company faced on multiple fronts and everything that happened with the pride merchandise that they put out earlier this year you can register for cnbc's virtual evolve summit. just scan the qr code to register or visit cnbcevents.com/evolve. we'll be right back.

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welcome back we will get the latest on the trial of sam bankman-fried he was on the witness stand yesterday. kate rooney was there. >> he seemed aggravated on the stand.

the prosecution called his credibility into question. he said one thing in public, but something different behind closed doors they used his media appearances against him. he told me there were no conflict of interests with the hedge fund and crypto exchange attorneys presented him with a book about the cryptocurrency and the collapse sam bankman-fried said he could not recall some of those things. he was asked directly about private messages with the journalist in which he said, f regulators that is after he had been lobbying for crypto in d.c they had him read allowed where he called crypto traders, dumb mother f-ers he assured customers that assets were fine, but behind the

scenes, the government showed going the meta data that he had seen the hole in his company that cross-examination k continues. >> they were able to show he was able to open the data? >> he opened the data and interacted with them they would show him documents and said he had never seen that. they has shown his email address interacted with that document suggests he had seen it. >> they are looking at the journalists misquoting, but not the stuff andrew or you said because he was an tape >> that was your testimony is you didn't say that. he would say i don't quite he stopped short of calling the journalists liars. there were multiple examples and pulling up article after article

saying you are quoted as saying this exactly he would say he was in the trap where he couldn't say folks were lying. he was on camera for some of it. >> andrew, the key thing he told you? >> i believe the question he was asked about the commingling of funds. he said a year ago or tried to say there wasn't commingling of funds. obviously there was. >> that was one topic. other was a conflict of interest with the hedge fund. then the relationship with alameda and in the book, he goes through what squawam bankman-frd at the time and he had to extend the credit line. he denied that on the stand. he has based on the conversations a lot of details that contradicts >> the credit line to alameda research was $65 billion the next largest credit line was

$150 million >> they laid that out and to put it in context, this is $64 billion higher than the next biggest line of credit it was in the hundreds of millions >> one of the things about this and i have gone back to look at this and his defense is i don't think he mounted on the stand or i would have is most of the questions people asked for years and this is prior to the implosion of ftx about the conflicts. it was the idea that alameda was a high frequency trader trading ahead of the clients the conflict wasn't that people thought they were sigh phensiphonin off the money, but people speculated for years and in advance, they denied it. citadel runs a market maker and the idea the exchange and people with the hedge fund are trading ahead of the customers

that was actually always the worry. if you ever look at the way most people questioned him, the conflict of there was never conceived that he was taking the money off the exchange it was he was potentially trading ahead of the clients if you look at how he answered the questions, it was in that regard nobody was asking him are you stealing the money it is are you doing something different? >> he was front running trades within the crypto community, there were others that accused him of front running he was that is one of the many conflicts of interest. >> that is a lesser evil than stealing customer funds. >> the market maker used to make a higher percentage of trading volume it was 4% of trading volume at the end. >> i wasn't skimming, but just stealing >> right >> it is an interesting thing.

if you go back and look at the way the questions were asked, he wasn't answering the question we all now would have been asking if we understood what was h happening. >> frontrunner thing was happening. he was front running trades? that is something he had been accused of doing all along he owned 90% of the hedge fund talk about the conflict of interest he wanted to make more money for the hedge fund it went to his pockets they talked about shutting down alameda to have another hedge fund step in and take the role of market maker. he was majority owner of that hedge fund he didn't want to be seen as having the relationship with the conflict of interest >> the program that says you opened the email suggesting -- no, i just opened a couple here.

i did not see what's in it you do this now. you find yourself trying to open it up -- >> you know what i do? for us who can't see, i screen shot the email and blow it up and zoom it up so i can see what is happening >> i turn it side ways and see what with is happening >> that's why you cannot say if you open an email that you saw it i don't see the emails i opened it, but didn't see it >> showing him interacting with the spread sheet. >> i can tell you. you need glasses >> for certain things. if i have the screen on super bright. >> what about here >> if it is super bright it is the brightness >> why does that happen? >> age age. >> i know. i'm not going to wear one of those. >> i have them readers. >> i'm taking screen shots

delete no save go there >> there has to be an easier way. >> glasses >> get a bigger screen >> or front. >> bigger screen >> bigger font less on the screen >> i can see this fine >> far away. coming up, investor mark mobius will talk about interest rates and where he is putting his money to work. i'll give you a hint it is a place that has the most people which recently exceeded the other country which has a lot. here is a look at yesterday's s&p 500 winners and losers >> announcer:ners and losers is sponsored by state street global advisors.

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welcome back caterpillar just out with adjusted earnings of $5.52 that was above $4.79 revenue up to $68.4 billion. 16.59 was the estimate stock is up 3.25% right now. the sales was driven by higher sales volume

big part of this is the strong infrastructure investment in a lot of places. part of that is the united states and other places which is government spending on the infrastructure caterpillar lifting the dow futures. dow futures up 200 points. we started the morning off up over 100 points. now up 192 >> crazy >> yeah. big gains from caterpillar >> people were talking about oversold it looked like oversold bounce big one yesterday. >> bob pisani was talking about the average stock is oversold by 5% >> talking about the katie stockton how many of the s&p were below the majority were below the average. i think she was making a good case for it. global mashrkets prepare fo the fed persistent inflation has

investors on edge. let's bring in mark mobius founding partner of mobius capital partners he spans the globe looking for opportunities. you have feeling about what is going on in this country as well, mark we teased it you will talk about india and how bullish you are on india you think, just bringing it home for a second, you think interest rates and the cycle of higher interest rates is peaking in the united states right now? >> i think so. if you look at the inflation situation, we're probably at the peak if you look at the money supply, which is tapering down, but the growth of supply which has come down dramatically means inflation would be easing. of course, the big provision of that is with all that's going on with israel and with ukraine and

the pumping up of defense spending in the u.s., that may put a monkey wrench into the situation. i do believe, generally speaking, we're at the peak and coal c coming down now >> we all would like to spend more on butter than guns the world is frightening you look at a shell or ammunition or whatever you want to talk about for defense, it takes a long time and a lot of effort and labor and materials to do that we need probably to do that. we can't all of a sudden decide on a weekend to do that. it takes a while we're running out. two wars >> right you know, it is interesting where i tell people in this situations, there are winners and losers if you look at the defense stocks in america, they're the

winners in this situation. the demand for all kinds of military equipment is coming from ukraine and israel and they are ramping up in the pacific as well probably one of the reasons why the u.s. economy is doing so well is that kind of spending that is taking place it will be interesting to see how this moves forward i'm generally bullish despite the high interest rates. i'm not saying the u.s. market will go up a lot, but interest rates will certainly be a factor that we have to look forward to. there is a kind of a great sucking sound in some of the markets because with fed rates going up, everybody has to follow if you look at japan, they will have to follow with higher rates. in almost every country around the world, they can't allow the currency to be devalued to such an extent. they have to raise rates in line

with the u.s. >> is it too simplistic to say india is a beneficiary of a change of the second derivative with the trade with china? there is onshoring happening there's political pressure and security issues. all these things make china less attractive i would think india with 1.4 billion people and the most populous nation on earth, that they would be a natural beneficiary. is what that you're thinking >> i'm speaking to you here from mumbai in india. i feel the optimism you have here i think now with -- by the way, i don't know about pakistan and the investigations in china about tax evasion or foxconn this has to worry the apple people they have to start thinking

about expanding in india they need another big supply base i think india is benefitting from these developments. >> it is a complicated country in terms of the democracy and various cross currents you see with modi. net, you think there are positive things in terms of bureaucracies or whatever it is corruption in countries. there have been worries of freedom of the press and if it is truly able to sustain as a vibrant western-style economy. is it? >> you have to turn on the tv set. there are 20 channels and many in different languages they are free and open dialogue. very vorciforous

i came back from another city and it is a different environment here in mumbai i'll go down south annd you will have a different culture i don't call it india. it is the united states of india because of how varied in each state. states rights are important in india. the great thing is the incredible culture and creativity you have here i highly recommend if you want to see this vibrant culture, look at the bollywood movies some of the older historical movies it is quite interesting to see what has happened in the past here s here. >> mark, can i ask quickly what you think of the japan move of loosening the yield curve control? it wasn't a full-on go ahead have at it message how do you interpret

>> the japanese are cautious and slow clearly, with the yen and where it is now, they have to do something. we can see the yen going to 200 if they keep with the low interest rate. again, this is an example of where the u.s. fed policy is having a global impact the japanese will have to raise interest rates in order to hold the yen at this level at 150 or maybe bring it down a little bit. strengthen it a little bit otherwise, the yen will be in real trouble >> that is interesting that is really interesting it's a big move. mark, thank you. we would like to have more time to talk about taiwan and other issues as well china is not going away, obviously. we appreciate your time, mark. thanks. >> thanks. when we come back, a new report out on the valuation of x. the company formally known as

twitter. we'll tell you what the number really is. later, we'll talk to chris coons with the lesatt push for the aid for ukraine and israel we'll have that and more after this 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. your sleep number setting. and now the new queen sleep number® c2 smart bed is only $899. sleep next level. shop now only at sleep number

welcome back to "squawk b box. we should talk about x now telling employees it is worth something we have come to know, but maybe the numbers will surprise people. officially saying the company is worth 19 b$19 billion. offering $45 a share stock price. that equals 55% below the $44 billion takeover price a number of some of the big investors and others alongside musk had written down the stock to the 19 billi$19 billion. would you actually get $19 billion today? pfizer just reporting. the stock is okay. remember, it does have a 5.4%

yield. it has been in a post-covid drop that might as well be zoom, almost the company reporting a narrower than expected loss because of $5.6 billion of non-cash inventory writeoffs. figure that out. 17 cents was the loss. 34 cents was the expected loss it is about half of what was expected then for the outlook for 2023, $1.45 to $1.65 include where is the range is with analysts at $1.59. >> that's the high end. >> $1.59 above the midpoint >> revenue is $58 billion to $61 billion. revenue in line. they do say with the current financial guidance, they don't

anticipate share buybacks in 2023 two months left. >> this wasn't as much the paxlovid writeof inventory. dealing in the post-covid world. right there and the stock not indicating it will have an annuity every september or fall with the variation of covid. >> talk about the non-covid growth at 6% to 8% when we come back, it is jobs week in america we will get new data on small business hiring from paychex after this break. reminder, you can watch us any anyt time. just check out the cnbc app. >> announcer: executive edge is

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let's take a look at shares of caterpillar the stock reported in the last 20 minutes and immediately was up by about 3.50%, with a gain of more than $8. it's reversed course steadily, and the company did beat expectations and came in earnings at $5.52, and revenue beat, too. they are talking about how they

see 2023 adjusted operating profit margins slightly above the targeted range relative to the expected level of sales and see fourth quarter sales and revenue slightly above the year ago numbers. >> i am reading the headlines. caterpillar stock jumps as higher prices and volume beats revenue -- >> i saw that 25 minutes ago >> 16 minutes ago. >> i am just looking, and the latest headline i see is they see adjusted profit margins -- maybe this is it, profit margin below the third quarter and fourth quarter sales above a year ago actually, okay, maybe this is it oh, wait, i want to look at the

sales and revenue number i don't know >> unless there's a conference call, this would be -- people scour the release. >> the comments in the release were limited they didn't say much of anything >> the conference call has not started yet. >> but the comments were thin. >> it could have been thin trading. >> let me look at this they say their fourth quarter sales expected to be slightly above a year ago and the estimates were 17 billion -- maybe people are reading into that that they will not make those sales numbers. what time is the conference call >> i doubt it's this early >> yeah, 7:30. >> small businesses across the united states is growing at a slower rate than a kpwyear ago,n

joining us is john gibson, he's pay chex ceo. >> it's great to be back with you. i would tell you we see our small business index continues to show moderation both in terms of the job growth and wage growth really, this has been a trend we have been talking about for a year and a half. when you look at it the labor markets are settling down, i think, from the shocks of the pandemic, and when we look at the big picture, the economy continues to look strong in the internal numbers as well as external data, and we see wage rates cooling. >> but up 5.6% up, and that's

higher than the fed would feel comfortable with when you look at what it means for the inflationary prospects down the road >> yeah, powell said the 3.5% reported last month is where the inflation rate could eventually go what i would point to is the trend. we have seen a trend line for under 4% for four straight months we talked about the leading indicator, the one month annualized that we watch has been under 3 for time, and it was down to 2.7%, and that's the lowest we have seen since 2020 what we see is continuing cooling in the job market as well as the leading indicator that we look at telling us we will continue to head that way we have seen stabilization, and that was a big driver. if you remember, when i was on your show talking about three

months ago, that was at 6.5%, and it's now under 4%. >> john, thank you john gibson, always great to see tu and thank you for your time toy. >>hank you, becky. "squawk box" will be right back why choose a sleep number smart bed? because only the sleep number climate360 smart bed lets you each sleep up to 13 degrees cooler or warmer on either side, while you both sleep at your ideal level of firmness, comfort and support. your sleep number setting. and now, our all new next gen smart beds have temperature benefits, so you sleep better night after night. and now the new queen sleep number® c2 smart bed is only $899.

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good morning and welcome back to "squawk box" here on cnbc we're live at the nasdaq market in times square. i am andrew ross sorkin along with becky quick and joe kernen. we will see how stocks move around, and the dow up around 19 points higher, and nasdaq looking to open nine or ten points higher, and s&p looks to open about nine points higher. the two-year is sitting just at a little over 5. breaking news. a dow component -- that's not the breaking news. amgen just reporting shares up 4.96 a share versus 4.67 the company is raising its earnings in revenue guidance for

the full year. in one quarter, $1 billion for that arthritis drug. $28 billion fiscally -- i remember when the company was founded, basically, and now $28 billion for fiscal revenue adjusted 18.20 to 18.18, so base your multiple off that the fed will kickoff a two-day meeting, and are pricing out any future hikes but extending for even longer of the time, and steve liesman joins us >> expect no additional hikes,

and they fully embraced the higher for longer, so no rate cuts are expected until the third quarter of 2024. here's the fed's expectations chart from the survey. they say the rates will be unchanged this week, and 5.29% holding for 10.4 months until september. it had been july and even earlier surveys suggested the fed may cut at the beginning of next year, and that's now september 2024 the 31 respondents include fund managers and economists, and they put a 42% probability on their being a soft landing and a 49% probability on a recession interestingly, that's below 50%. 5.38 is the current number 5.42% for december, and some believe there are cuts but not

as many as what was forecasts, and then normalization in december of 2025 i believe powell and company can be patient and sit back and see how the tightening has taken place will play out, and it will playout as they continue to squeeze more and more households and it does go down next year, but notice 2025, by the end of the year forecast, still 60 basis points the growth is not hitting the target, the slowdown that they are supposed to hit is now forecast to hit next year, and they had to bring that 2023 forecast way up. there's the way below 20% before

normalizing in 2025. you have a 13% rise from the current rate by the end of 2025. joe? >> steve, thanks i am looking back. i know we are going to talk about whether we should have issued more debt when rates were low. do you remember larry summer saying rates are low and we need to issue debt -- to pay for everything we need to pay for, we need to issue it. time flies we are getting older you know what year that was? >> i don't >> 2012. 11 years >> i thought you were going to say like 2017 -- >> yeah, we may argue whether yellen should have done it can we at least agree on that so we don't have to point fingers

if it's a democrat or a republican >> i don't know. >> you don't think we should have gone longer >> let me say this, first of all, if you look at the average duration of the debt, it crept up marginally, and that's as you read in my tweet, because the government doesn't like to play a whole lot of games with the average maturity of the debt, and it's 70 months or so which is an an all-time -- a 20-year high, at least the broader story is this, joe i get where stan is coming from, because stan is a hedge fund manager and he would like the government to act more like a hedge fund and you have to ask yourself if that's what you want the government to do >> hedge funds have to be right, and the government never has to

be right, and i wish they would act like a hedge fund where they have to account for their mistakes >> so you want the government -- if you want the government to act like a hedge fund, which means it's willing to go out of business if it screws up >> every day it seems to be willing to go out of business with no accountability, but it doesn't, and that's the problem, and we are stick with it >> i don't know about no accountability, joe. the treasury goes to the market every week a couple times and sells enormous amounts of debt and it's to the point where the u.s. bond market is the deepest, most liquid and most reliable market in the world. i mean, who do you want -- >> steve -- what is our biggest fear right now it's that we are going to have to pay a lot more for it for

people to take our stuff the accountability could come from the vigilantes which could come back with a vengeance we're in the middle of it. >> there's accountability in the market every day, and these guys try to figure it out, and they have a trees revise committee, and these are guys that i talk to frequently, and there's a tremendous debate about how much the extent to which the maturity of the u.s. debt should be raised figure out what stan is talking about. by the way, a person i have tremendous respect for at the time he is saying the treasury should have been with more long-term debt, and the fed was trying to lower interest rates at that time, and what we are talking about is a specific policy of the treasury to work against the fed. there's a lot of papers that

have been written, there's a great piece in the touchins library that talks about whether the treasury and the fed ought to work more in concert. we need to be careful about asking the government to act more like a hedge fund >> they have been working in concert, and that's the problem. way too much the fed and congress we will talk more about this stan will be -- we will have him on as long as it takes to hear exactly what his opinion is. >> just ask him where they should have put it, how much it should have been joe, if all of that long-term paper was out there, what would be the losses on the banks right now in the period of higher interest rates >> all good questions. in fact, we can talk about it more now with an interest rate genius, right? >> yeah, joining us is the

president of the globa strategies what do you think on the entire debate >> becky, i would agree with miller on that i think it's the treasure's responsibility to lengthen maturities when the interest rates are low, and whether you think it should have been mnuchin or yellen, they should have done it when the interest rates were very low, and if they should have increased the duration, they would have done the country and the treasury a great service. they failed to do that it's no doubt at all, in my mind, that is part of the treasury's responsibility to manage the duration of the issuance, and they should have -- >> i am not sure economists are going to be the ones thinking of it from that same perspective. >> but then the position, the

secretary, he or she is head of the department in terms of deciding which way it will go, and that was not done, becky >> but asking people to do that requires probably that they have pretty extensive market knowledge and market experience, and can you look at different treasury secretaries mnuchin did have market experience, and there was a time when things were freezing up during the great recession, and should the requirements for a treasury secretary be different if you are asking them to basically be making massive market bets like that? >> clearly mnuchin and paulson had more market experience compared to janet yellen, and

she comes after having been the fed chair. >> right >> i don't think the fact that she was not activity a portfolio manager before exempts her from having to deal with it and deal with the maturity, becky >> i think of it as the same as the spr, and should we b thinking about the spr in such a way or use it as an emergency valve that should only be tapped during times of crisis >> i think your comparison is apar apt, building up oil prices when it's order, and even if spending money to do that at that time, that market would be more comfortable. a lot of times --

>> the short-term political pressures on these things, and i think of professionals that do this and get it wrong. >> all the time. so when you ask the government to do it and they get it wrong, and what would have happened if we moved to negative interest rates. >> look at japan let's layer that on to us, what you heard from japan today we heard earlier that it was forced on japan by the united states, keeping interest rates higher and raising them faster where everybody around the world will have to follow suit or they will get crushed what do you think about that >> he said the bank of japan was forced to move because of the federal reserve and u.s. bald yields moving up what i think he did not mention or put enough emphasis on is the japanese inflation, and particularly the tokyo inflation rate has been much higher than

anticipated. there was an expectation in the market that it would move more than it did, and they thought they would move it up, which it did not yet. history wise, the last time the united states tried to control, you know when that was >> when. >> late 1940s into 1951 or 52. the reason is we didn't do that is because it didn't work. we did that in the late 1940s, and suddenly the federal reserve found they could not support the interest rate and gave up, and it was called the yield on the long bond shot up. so it doesn't work the japanese government -- i have been expecting for a while the bank of japan would give up on this, and today is the first

move and there will be more coming from the bank of japan and it will have an impact on the rest of the world. >> thank you for walking us through all this we didn't get to some of the things we were going to talk about, but we will have you back soon >> thank you, becky. coming up, jetblue and spirit, and we will have details about that next moving from ough autos to airlines. wnhaand then we are breaking do wt the rules of ai will mean for you

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it was a $10 billion market cap company and you can see it's down 40% today in a trial the primary end point was not achieved, but it goes on to say that there was positive efficacy outcomes, and it says the results still support the submission of an efficacy supplement to a bla, which was a drug application they are now saying that it's a setback. >> that's pretty important what you just said, the idea there's efficacy for this, because a 40% drop -- the build up -- this was the idea of gene therapy and rolling that out to a lot of different issues, and if they did see efficacy, perhaps that suggesting they can go back and work on it

it doesn't sound like a complete failure. that's a different story than having no efficacy >> i can remember talking about muscular dystrophy -- when we not here the gene is long and might have different things that get spliced together, and something fell off and was not a complete copy to be made with the protein. it looked like it would work >> honestly, and i know this from family experience with some of the issues with similar -- well, not -- >> it hits a bump. >> a genetic mutation, it stops producing the protein, and a hope is to find a way to use jean therapy so you can use the right amount of protein for a lot of different diseases out there, and that's why there's so much hope built around this.

gene therapy has been a target for what people thought there was not a possibility, and this is a big stepback and the idea that it did have efficacy speaks to the potential hope that is still there. >> this was using the gene therapy protocol >> the stock down by $40 jetblue lost 14 cents more than the market expected, and that was shy of what the street was expecting. jetblue is warning for a wider than expected fourth quarter loss, and that stock is down by 7.6% this morning, and they talked about staggering weather delays that came in and they said they would be reducing their schedules during off peak hours. they are talking about getting

more strategic with what they are doing with some of these saying they have overdone it on the domestic flights, and they are still going to be increasing the capacity for international flights and international flights is where all the profit comes from but their stock is down. >> the drug is already approved, and the study -- the study, when you have a drug that wins accelerated approval you have to do the follow-up study to confirm the testing -- >> does that mean they will pull the drug >> no, they point out it will be harder in europe to get approved use, and -- >> if there's efficacy and the drug is approved and the patient population is going along witness, they will find ways to approve it, and that's different than having a failure -- >> yeah, it's already approved

>> doesn't take it off the table, though. in the meantime, let's talk about the oral arguments that will take place today in the antitrust trial, and it starts today in boston. phil joins us with more onthat phil >> andrew, the importance of the case is that it's there. everybody in the industry is focussed on this, and for a couple reasons, and one for the airline industry, it could create the fifth largest carrier after delta, united and american and southwest. their market would be substantially less than the big four as referred to in the airline industry n nonetheless, if this is rejected by a judge and you see them and they do not have the approval, then you are looking at going back to where it was before. when the jetblue and spirit merger was proposed, immediately

you heard the doj come out and say, look, this is going to hurt competition. that's the main argument you have from the doj. they believe that jetblue and spirit, it sops up the competition in so many markets their argument is we agreed to divest slots, routes, and we have made it so that in certain markets whether it's ft. lauderdale, or the new york and boston area, there's kpwacompeto there. the verdict is expected next year keep in mind, jetblue agreed to buy spirit for $33.80 a share, and look where they are now. that gives you an idea how all airline stocks are under pressure right now

the antitrust implications and the fact that the doj, you know, their track record says a lot of what has happened over the last year in terms of antitrust suits, whether or not they win this one will be closely scrutinized by a lot of people >> what is your handicap you think because the doj lost a lot of these cases, this would be another one of those situations >> my handicap is -- no, i would not say that i think that there are some strong arguments on behalf of the government in terms of it would hurt competition now, jetblue -- when we talked to robin hayes about this in the past about the proposed merger, they believe they will bring down fares as they continue to grow as a network. i know i am trying to play both sides of the fence here, but the government comes back and says you will have fewer players in the market, and in their opinion

that means there's less competition. >> okay. let me ask you about your reaction to the jetblue results we just heard about? >> not a surprise. they added a lot of capacity there was so much capacity that was added. you had domestic down, and yes, they had weather implications in the northeast. this was not a huge surprise yes, a surprise in terms of it was worse than expected, but the guidance in terms of what they are saying about the fourth quarter and the capacity, that says it all. yes, they are trying to grow internationally and they are growing internationally, but they are on a small footprint relative to american, delta and united domestically they had so much capacity, and a lot of that capacity has to come out we will do that with the off peak hours, but that's what we are seeing here. >> phil, thank you for that report >> phil, did something happen at gm yesterday what the heck happened >> it's done it's done, joe >> we're going to -- no, we are

not going to miss it but it has been a while since we had a big huge uaw strike like that, right? how many years i guess we had a smaller one -- >> four years ago they had a 43-day strike against general motors, but this was a big win for the uaw. >> huge. what was -- okay what was the average increase across the big three >> 25% >> that was the average? >> yeah, probably even a little higher, right? >> yeah. >> phil, thank you, sir. we have a lot more coming up on "squawk box" this morning stocks to watch ahead of the opening bell take a look at the futures the nasdaq looking to enop 28 points higher. we are coming right back after this enjoy richer, bolder flavors complete with velvet smooth crema.

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welcome back to "squawk box. i am dom chu we will look at the premarket movers we will start with what many start to be an economic bellwether, caterpillar. those shares are down right now,

and here both profits and revenues at cat came in better than expected in all of the key operating divisions led by 12% sales growth inthe constructio sales group, and some of the reaction to the downturn could be tied to the forecast, and the revenues slightly higher than a year ago and operating margins will be lower, and so the shares off about 4% then you have shares of pfizer, and it's down premarket, just around 60,000 shares of volume moving between gains and losses. those results were mixed smaller than expected loss per share. in this case, much of the bad news of the stock and reaction already came a couple weeks ago when pfizer lowered its guidance in part of the weaker demand for the covid products those shares moving between gains and losses

and then we will end on bp shares down about 3%, roughly 140,000 shares of volume profits missed analysts forecasts due to the refinery profit margins bp did extend its stock purchase plan for the next quarter or so so on balance. icstk around, more news coming up after this commercial break. with gold bond... you can age on your own terms. retinol overnight means... the smoothing benefits of retinol. are now for your whole body. plus, fast-working crepe corrector diminishes wrinkled skin in just two days. gold bond. champion your skin.

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as speaker, mike johnson, gets settled into his new role, our next guest says many are discounting the -- i saw some of your comments on 2024, and i just think we ought to talk about that because this is historic there never has been an election like this if what you say actually comes to past you think we know the nominees >> well, i think president biden will be the nominee for the democratic party we have heard from a lot of clients, questions about whether it's going to be gavin newsom or jamie dimon, and i have to break it to them it will not be either of those candidates, and it's because of the filing deadline

to get on the ballots passed we know the field very much for the democratic party i think the republican party is set as well. for all intents and purposes, these are the candidates we will be dealing with. president biden is likely going to be the nominee. as i said, and i know what you were referring to, if the primaries were held today it would be president trump 70% of the americans according to the polling don't want either of these candidates, but at this point that's where we are headed >> it looks like this is unprecedented, and it's kind of surreal to be in a situation like that. i did see comments yesterday from one democratic operative beggingother democratic operatives to stop questioning president biden's standing as the nominee of choice. just give it up. stop even saying that maybe

there's another way to do this, but that tells you that that's still out there. >> but if it's too late to get on the ballot? how many states is that the case >> new hampshire and nevada, both of those deadlines passed and a whole slew of deadlines coming up next week. >> what about efforts to keep former president trump off of the ballots? >> yeah, in colorado, and i am not a legal expert so i will not opine on any of those legal cases. looks like at this point, for the democratic party, most certainly -- but a lot can change as we have seen in iowa and new hampshire in previous elections, the candidate pulling ahead at this point in the cycle doesn't always win those two states what we are guiding clients to is if president trump wins the

first four in the nominating contest, iowa, new hampshire -- >> none of these things, it's all sort of a side show, ron desantis -- >> well, we don't want to prejudge the outcome, but if the primaries were held today this is what it would be. >> so newsom, did you see the video of him yesterday of him running over that poor kid to the basketball court >> i did not see that. >> yeah, he tried to make it -- >> yeah, that's the operative term, he tried to and he was hugging the kid. >> it was an accident. >> yeah, it was a basketball move he had no business making, and it would have been a charging foul because the kid had the position on him, and he should -- you have to find it. >> i think to your broader point, though, i think the real risk here for both, if it's a

trump/biden election, and again, a lot can change, what have you, but if the primaries were held tomorrow that's what it looks like the election would be, and there's a risk that it's a low turnout, and there are a lot of americans that feel the way you do, where they don't want to see this movie again they will stay home. the other risks, particularly to president biden, is if there's a credible third party candidate if you look at the numbers in the swing states in 2020, president biden's campaign was held up because there was not a real viable candidate. you are seeing that on the democratic side, they are trying to tamp down that side of it the senate map is difficult for democrats. they are defending 23 of the 33

states up for re-election, and of those 33 a bunch are in red or purple states, and the senate is controlled by democrats by one vote at this point the house, however, is kind of a different ball of wax, so to speak, and that's because of redistricting. we will have to see what happens here in new york what has happened over the last three weeks has not been an endorsement for the republicans, and the 18 republicans are in biden districts. there's a chance we will see the senate flipping to republican control and the house flipping to democratic control, and we're a year out and it's too early to say anything >> okay. well -- >> yesterday was important, an important signal here in terms

of what johnson is planning to put on the floor as it relates to israel aid. he will not require an offset, and a lot of people in the markets think that would be making sense to offset your spending, and he's going to be offsetting it by touching the inflation reduction act. he knows -- >> it's the irs. >> yeah, it's part of the government, and in the scoring by actually cutting the spending of the irs, it cuts the deficit. >> well, it's two birds with one stone for republicans. >> yeah, from a scoring perspective, it's not going to achieve what they want to achieve. >> more importantly, does this mean we don't get aid to israel or ukraine as a result of this >> it will definitely be slowed down, becky, and the broader point to your question about a government shutdown, it shows you where speaker johnson is

he wants to unite the republican caucus, which is great if you are a republican i think it does put at risk this ability to work with democrats and get something done and fund the government by november 17th. i think what we saw yesterday, and joe, you are right, it's a side show for the markets given all that is happening. >> yep >> but i think it increases the risk of a shutdown being that he is pursuing a partisan side show >> that's a really red dress you are not saying anything by that, are you? >> not talking through clothing here >> not sub pwhreupl null -- >> i was going to wear my broncos jersey -- >> that was unbelievable >> yeah, i have been a broncos fan since 1981 >> yeah, the nemesis, the chiefs -- >> yes, my 12-year-old kept reminding me, 16 games the

broncos lost against the chiefs. so a remarkable game >> the demise of russell -- >> well, we are going to take it a win is a win >> a win is a win. that was something to behold i lost money >> talk about two birds with one stone. >> yes, thank you. and stocks of tesla, closing at the lowest level in five months after the news from panasonic, that it kill cut down on its domestic ev battery manufacturing, and that was enough to put pressure on the shares 5%ght now the stock is off by 1. "squawk box" will be right back.

this is "real time insights." i am here with ey america's vice chair. i know you spend a lot of time in board rooms tell us, what are the biggest challenges facing boards right now? >> boards are really focused on scenario planning given the geopolitical economic uncertainty and how different outcomes could impact strategy and growth, and they are thinking about enabling innovation they want management teams to look at their processes and models and think about how models, including ai, could put them ahead boards needs companies to move with pace and companies that

have good risk management work, assess the risk and it's important for key stakeholders have confidence in the company's astrategy. >> shareholders, what is top of mind for them? >> financial data and disclosures. i will give you an example cyber risks, companies spend $4.5 million preparing for the breaches >> thank you so much for sharing your expertise >> thanks for having me. welcome back to "squawk box. the futures right now 90 points

higher on the dow, and the s&p 500 up about 10 points got a whole bunch of things going on, joe, including the apple event last night >> yeah, unveiling two mac book pro models, and a desktop powered by the master m3 chip. it starts at $1599, cheaper than the previous version and the 24-inch mac starts at $2499. alphabet ceo defending google's agreements to make its search engines the default on web browsers on phones, and he says he sees value in keeping

users loyal. in the historic antitrust trial yesterday, he called the correlation pretty clear to see. any thoughts >> i think the issue is not -- as we always said, i don't think it's the payments themselves but it's what it has done to apple building its own search engines, and if it had, and the payments are preventing that -- >> if it's explicit or implicit, it's not enough to take it out of the contract as a line that you will not be able to do this. >> if apple says they were planning on one and then say, well, maybe we are not -- well, it's hard. there's a hard line on that. it's tough to say if apple had built one, and maybe we will see that, by the way, with whatever they are building on ai, they

will invest a billion on generative ai, and if they did google would have meaningful competition -- >> it's weird for the government to say you have to build this, you must do it >> yeah, no, and if you could demonstrate they started building something and one of the real reasons google was paying the money was to stop them from building something, that actually is a problem when we come back, what president biden's new executive order could mean for the future of ai. later, senator chris coons will join us to talk about the latest developments in the israel-hamas war stay tuned "squawk box" will be right back.

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back back to "squawk box." president biden signing his first executive order aimed at regulating artificial intelligence, like creating water marking standards for ai-generated content joining us is chris krebs, the former agency director, now krebs stamos group partner. you saw what the administration laid out yesterday there's been a lot of public discussion about the need to regulate this. but in the private discussions i had yesterday with the folks in this space, there was an undercurrent of, oh, my goodness, is all of this going to go too far now. are we going to be getting

subpoenas and requests for all sorts of information that we didn't anticipate or expect and this is going to slow things down did you have the same conversations i had yesterday? >> i had some, and there was a little bit of, hey, this is really happening, particularly when you think about the fact that chatgpt's first version wasn't publicly released until about 11 months ago. so this has all happened quite fast the executive order itself, in terms of the requirements and some of the demands that may be coming to companies, i still think they're a bit far off. when you look at some of the reporting requirements under the defense production act, that's really the heaviest or weightiest part of the eo, it applies to models that practically don't exist yet. it really is about future frontier models, and everything that's in existence right now has, you know, much less rigorous requirements. >> well, the defense production act piece seemed to be the most extensive, or at least would give the government access to

things that it might not be able to access in almost any other context. so what's the important takeaway there? >> you know,i was a little taken aback by the dpa requirement. the dpa, the defense production act applies to national security to what the pentagon can access when and where, was also homeland security and fema you tend to see it in hurricanes, in ramp-up for military action. and i think that's a bit of the risk right now, is that you could see some challenges under the dpa, when frankly we need it most, when what you're seeing in ukraine and the middle east and potentially in the buildup for the china invasion of taiwan it's a risky time, but nonetheless, i do think that it was a fairly surgical use of the dpa rather than some of the other tools that the administration -- >> what do you think the dpraets r greatest risk in terms of ai is right this minute, the generative ai and how it's being used, is it context of what we're seeing in the israel/hamas war, and social media, things that are being pushed.

is it something else what's your concern? >> you know, the eo actually calls it out to your point about some of the labeling of ai-generated content and the lack of discernment and the ability to tell what's real and what's not, that's obviously a concern to the administration. i'm not sure that their requirements are going to work, because bad guys don't play by the rules anyway the second is, if you look at the model weights that they call out, for the dpa, the defense production act requirements, they specifically talk about biological sequencing data so they are worried about biological weapons being able to be generated using some of these future tools and i think that's probably the nearest shark to the boat in terms of the most significant risks in ai right now. >> chris, i don't want to go too far down a rabbit hole in terms of how ai and generative ai language models work, weighting it one of the things if the audience don't know already,

when these models are built, one of the most critical components is how certain data points and how certain things it's reading are weighted, if you will, in terms of what's considered more important than other things, and that's what makes one model different than another model those are considered, those weighting -- those sort of weighting indexes, if you will, are considered some of the most important, if not competitive components of these models meaning, how open ai weights things compared to how, you know, google weights things, compared to how meta weights things, that's a very important sort of competitive component. how -- what is the risk to the various companies that those sort of weighting issues become public in some way >> once you get past the compute power and the networking speed, it's the weights that are the entire ball game and so the executive order requires red teaming, which is a security phrasing for checking

on the security of the systems around those weights, to ensure that they can't leak out, because if they do leak out, once something's on the internet, it's on the internet forever. and we've got to protect those weights, because if they do get into the wrong hands, that's going to be a significant capability in those that we may not trust with that information. >> chris, you're so smart on all of this stuff, we really appreciate you joining us this morning. we hope to talk to you again about this, i'm sure, very soon. it's an issue that is not going away >> yep, see you soon >> when we come back, member of the senate appropriations committee chris coons will talk to us next -- will talk about what to expect from president biden's push for aid from ukraine and israel plus, former dallas fed president richard fisher on what he sees the fed doing as it kicks off this two-day policy meeting. stay tuned "squawk box" will be right back. to find your personal style.

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good morning and happy halloween. it's been a scary month for stocks the dow and the s&p now on pace for their longest monthly losing streak in three and a half years. meanwhile, it's a big morning

for earnings new results out from dow components caterpillar and amgen, plus pfizer, bp, and jetblue. if that's not enough, the fed kicks off its latest policy meeting today. we're going to ask former dallas fed president richard fisher what he's expecting from j. powell and company trick or treat the final hour of "squawk box" begins right now. good morning and welcome to "squawk box" here on cnbc, live from the nasdaq market site in times square i'm joe kernan along with becky quick and andrew ross sorkin you didn't think about the orange you thought about the orange and you didn't do it >> i thought about it and didn't do it. >> i wore the blouse about a week ago >> i thought about it and didn't do it. >> i'm aware of halloween. and you know why

>> yeah. >> because it's penelope's birthday happy birthday, penelope >> his wife's birthday happy birthday we got there before you did on tv >> yeah, happy birthday. 364 days i worry about the next birthday >> so this tie is -- you keep this on a special hanger -- >> no, i've got a few. >> it's call the birthday -- >> i'm trying everything, just throwing a bunch of stuff up against the wall and hoping something sticks u.s. equity futures -- >> by the way, if penelope is watching, this has been his obsession. >> it's hard to do something for the perfect spouse >> the perfect spouse. >> u.s. future equities at this hour are indicated up about 55 points they would be up a lot more than that if it wasn't for cat, which i think -- and not a black cat that's what you think about on halloween, but a -- what is it -- what are their colors? yellow and black >> yellow and plblack,

caterpillar. i bet you dom chu mentions it. treasury yields, 481 or something, 482 on the ten-year let's get right over to dom chu. he looks at some of this morning's top pre-market movers. numbers came out caterpillar was up eight bucks, dom. it's not anymore >> it is not and like you pointed out, it's a big drag on there. i thought about the orange and wore the orange and also happy birthday, penelope, as well. >> dom, thank you. >> you're very welcome and again, happy birthday to penelope >> appreciate the support. >> and i wore the orange it's a red cat, if you want to look at it that way. if you take a look so far this morning, the earnings headliner of the morning has to be right now caterpillar, dow component, economic bellwether. it's down 5% this is near session lows at this point so the construction and mining equipment maker is trading on roughly 115,000 shares of volume at this point. it actually reported better than expected profits and revenue to

joe's point, which is why it initially went higher. it was driven in large part by sales growth at all of its operating divisions, especially in construction industries, which is benefiting more from infrastructure spending here in the u.s. but the downside pressure may have to do with what's being seen as a weaker than expected current quarter sales outlook, which cat says will be slightly higher than it was a year ago in the same quarter operating profit margins, by the way, will be lower than last quarter, sequential. so that mixed together might be driving what's now a 5% downside in caterpillar shares and what is now a one-point drag on the dow. we're watching in action if pfizer, which is swinging between gains and losses in this case, a lot of the bad news and stock reaction came a couple of weeks ago.

they reiterated that same forecast during their earrings release this morning that stock just about flat moving now to shares of amgen. shares of the biotech company, also dow component, up now in early action, just about 2.5%, roughly 10,000 shares of volume. it reported mixed results, better than expected profits, weaker than expected revenues. it also raised the lower end of its full-year range for profits. amgen was helped along by growth in key drug franchises tied to things like cholesterol and arthritis management and we'll end with shares of jetblue, down on 165 shares of volume the budget friendly operating volume expected weaker than expected revenues. and cut its full-year outlook. and interesting commentary from jetblue. they still see holiday demand trends being positive, but that industry capacity is outstripping demand, so a little right-sizing of the flight schedules might be in order for a lot of these airlines, becky >> they said, i think, that they would be focusing more on international, less on domestic,

cutting back in some of the non-peak hours so maybe that just shows you, too, international is where the money really is, and that's where a lot of these companies have wanted to focus, because that's where the profits are >> and becky, anecdotally, i took a flight on one of their newer jets not too long ago, a couple of weeks ago, one that does the kind of transcontinental and transatlantic routes they have legit first class cabins now you can see some of those longer howl routes, trying to get premium seating in there it could be one of the reasons they're focusing on those longer haul flights >> dom, thank you. see you later. among the other stories we're following this morning, pinterest shares jumping on third quarter results. the social media company beat analyst profit and revenue expectations the number of global monthly active users rose by 8% from a year ago and it topped the forecast by 9 million users. you can check that stock out it's up by 16% this morning. and by the way, don't miss pinterest ceo coming up on "squawk on the street" later this morning

and in the meantime, chip giant nvidia may be forced to cancel billions of dollars in chip orders meant for china next year because of new u.s. export controls, that's according to a "wall street journal" report it says nvidia has already completed china's advanced chip deliveries for this year, but it was told by the u.s. government last week that new export curbs were coming into effect immediately. the stock not reacting much. it's down by about 0.6%. then there's apple, unveiling more powerful homemade semiconductors the m3 chip will help power a new lineup of macs, including macbook pros and imac models those will go on sale next week. we'll talk more about this story later this hour with cnbc's very own steve kovach >> let's talk markets right now. broader markets as the fed begins its two-day policy meeting. good morning what are you expecting we're going to hear tomorrow and what do you think it portends for at least maybe the rest of the year, in terms of

where equities and bonds go? >> i would be surprised if the fed surprises the markets. i think it's been pretty well telegraphed, they'll stay on hold for this month, but i think they will keep the market on its toes and investors on their toes, because they just don't want financial conditions to loosen up too much they'll stay on hold they have hiked a hell of a lot in the last 18 months. money supply growth is shrinking. the disinflation story is playing out. but i think they won't be convinced with inflation being at 3.7%. it's very -- >> you still think we're on our way to a recession >> i think a mild recession is in the cards for 2024. look, the u.s. economy has surprised on the upside consistently this year, despite this hike in interest rates. you've had gdp growth go from 1.5% to 2% to almost 5% in the third quarter, but some of the engines of the growth are now fraying at the edges you look at the consumer, i think they're stretched, especially the low-income consumer is stretched, the

rising gas prices, food prices is hurting them. you see credit card delinquencies going up, auto loan delinquencies going up as well real rates are at 2.5%, which is arguably pretty restrictive. we haven't seen those levels in about 15 years and the yield curve is still inverted >> you like bonds more than equities >> we do you know, we're long-term investors. >> that's what's so interesting to me. if you were a short-term investor, i would understand the bond story but as a long-term investor, you're saying bonds are it >> i think the expected return of bond markets has improved quite a bit. first of all, this is going to be a very choppy period over the next couple of months for the markets, so clients should stay invested in the long-term asset allocation we prefer bonds over equities, because go back to that 2.5% yield story for fixed income, and if you construct the fixed income portfolio, which is pretty much diversified, you can get 6% quarter return, which is pretty competitive with equity returns. >> when you say you're a

long-term investor, if you were applying this as a ten-year story, you would still overweight bonds relative to equity >> wouldn't be i think in the very near-term, we would be overweight fixed income, and underweight equities, which is a position we're taking but over the long-term >> so -- >> so i don't know what you want to make your duration long-term, but i would say, decades, you know, fair is a long-term way to look at it would you be -- >> probably would not -- >> you would be an equity person >> we would be in equities the reason for that, we're very optimistic on the long-term potential of the u.s. economy. think about the growth drivers for the next cycle in terms of the millennials. >> but if you're a long-term investor, why are you not just backing up the truck if that's what you think is happening. >> we think there's some market volatility to equities back in the summer, we felt like equities were frothy they weren't pricing in the higher for longer interest rate environment. now they are p\e multiples are much more reasonable, but however, the profit growth story for next year, which is quite optimistic, is still not priced in

consensus is still expecting about 12% profit growth next year we think that's likely to be disappointing. as the choppiness comes through in the economy, all of the clients who are sitting in cash, which is a viable asset class, should first look to go into fixed income, and then edge into equities, because the long-term story is pretty good >> and for those that are right to put together a bond portfolio that you say can get a 6% total return >> yeah. >> what are you doing to do that >> well, you stay mutual duration that's an admission of the two-sidedness of the five year, five to seven-year kind of time frame for fixed income >> but not high yield. >> not so much high yield. investment grades, corporates would be for the most part -- >> some governments, too >> definitely some governments in there high yield is a very different story that's done well this year, but the technical issues have played into that. >> can you give me 6% tax free that's what we're looking for here >> i want 13% tax free >> that's going to be -- that's going to be hard

>> round ones. >> generally speaking, higher yields you warrant, the more risk you have to take, either outside, you have to go out in the curve. >> i've heard you have to take more risk if you want higher return they've told me about that >> you've got to buy things when they're cheap and sell when they're expensive. >> that's right. >> somebody mentioned that to me once >> works again and again and again. >> neal, appreciate you being here >> thank you still to come, much more on the kickoff of the dallas meeting. richard fisher will join us. but next, president biden wants congress to okay tens of billions of dollars in aid for ukraine and israel can that request make its way through the house and the senate after a break, we will talk about that with lare satdewaenor chris coons. stay tuned, you're watching "squawk box" and this is cnbc. move to the cloud. - so, the question is... - cyber attack! as cyber criminals expand their toolkit,

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israel says its forces attacked hamas gunmen inside gaza's tunnel network today. late yesterday, prime minister benjamin netanyahu rejected calls for a cease-fire, which he equated to a surrender to hamas. here in the u.s., this morning, defense secretary lloyd austin and secretary of state antony

blinken are scheduled to testify in front of the senate appropriations committee, making the case for president biden's $106 billion supplemental budget request. a good portion of that funding would be ear marked for israel and ukraine. joining us now is delaware democratic senator, chris coons. he serves on the appropriations committee, and traveled to the middle east a little more than a week ago with a bipartisan group. senator, is october going to go down as one of the worst months in history what the heck happened in that month? the entire world, for so many reasons, looks -- so many unexpected things have happened. do you look around and wonder, are we in some type of twilight zone i'm not talking about just the terrorist attack, but everything that's happened since then >> joe, this has indeed been a very tough month and i'm glad to serve here in the united states senate, where a bipartisan group of us, five

republicans, five democrats, were able to quickly put together an effective trip last weekend to israel, to saudi arabia, and to egypt, to engage with our critical partners, to meet with the families of american hostages held by hamas, to meet with senior israeli leaders, and then to have direct conversations with crowned prince mohammad bin salman in riyadh, saudi arabia, and with president el sisi in cairo we have to be clear that hamas is a terrorist organization, akin to isis, that does not deserve support of any kind. and support israel in their campaign against hamas, but still hold on to the possibility of peace i think and our delegation thought a key reason why hamas carried out that brutal and horrific attack on october 7th was to prevent saudi arabia and israel from recognizing each other, from becoming closer, from building on the abraham

accords' progress of the previous administration. and the hearing we will have today, joe, on the appropriations committee, where we hear from the secretary of defense and secretary of state, is about the funding required both to support israel in its fight against an iranian proxy, hamas, and to support ukraine in its fight against russian aggression the higher point here is that russia and iran are tied at the hip. they are supplying each other, they are coordinating with each other, and if we aren't a trustworthy and reliable ally, november will be worse than october. this is a challenged moment for the united states to show that we're still willing to stick and to fight alongside our allies who are putting their shoulder to the wheel in the fight for freedom. last point, joe, we also have to provide humanitarian support to the folks inside ukraine, inside gaza, and in a dozen other countries who are being impacted by these two wars, as the price of food and fuel and fertilizer

are going up and we need to deter iran from widening this war in any way that might cause a global economic and energy shock. >> such a difficult situation, senator, to back israel 100% in its efforts to destroy hamas, at the same time be asking for humanitarian aid to remedy some of the situations that you just caused it almost seems like they're diametrically opposed. but how do you do it >> here's how i make sense of those two things hamas isn't going anywhere hamas is in gaza and they're not leaving. they're not going anywhere israel has engaged on the ground forcefully, and there is the possibility of a humanitarian pause to allow for the release of hostages for the international, the folks who are

american citizens and citizens of other countries to get out of the south of gaza, and to allow vetted supplies to continue to go in through the egyptian entrance at the south of gaza. israel is expecting every single truck. it's been a trickle so far, but the amount of humanitarian supplies going into the south of gaza, i believe, is on schedule to go up and up and up from 20 to 40 to 60, to even more trucks a day. i do think that it is possible for israel and egypt in partnership with the united states to show that we can distinguish between innocent palestinians who need water and who need food and who need medical supplies, and hamas who are terrorists, who israel should continue to fight >> did you get the -- could we be optimistic at all that the saudi deal or that any of the things, any of the progress that we've been making, it almost seems like it's tough to put humpty dumpty -- i hate to use

any analogies, but to put this back together again after this seems exceedingly difficult. did you get the notion, at least from the saudis that it was still possible that iran would be thwarted in what its intention was from the start here, to scuttle that? >> it is still possible, joe and look, i frankly think that our president, joe biden, did exactly the right thing in getting on a plane, going to israel, embracing israeli leadership in this shattering moment that for israeli society was greater than our 9/11 experience and deploying two aircraft carrier groups to the region and now saying, through his secretary of state and through our delegation and others, to regional leaders like the saudis, the jordanians, the egyptians, on the other side of this conflict, there has to be a plan for the path forward for gaza we can't have this war go on with no plan, for who's going to

represent the palestinians, for how they're going to be governed, and for what that future will be like. so there is very important work going on that exact topic. it will be very difficult to get to a two-state solution. prime minister netanyahu, let's be blunt, joe, has not been a fan or a supporter of a two-state solution and to ask israelis to grant anything to palestinians in this moment is a difficult thing, but the path to peace, regionally, is for there to be recognition and end of the arab/israeli conflict and huge investment in rebuilding the west bank and gaza under new leadership that is not aligned with terrorism, and that does recognize israel's right to exist >> senator, we are also helping ukraine, and i think you can make a case that it's not just tied in terms of the $108 billion, but it's just tied in terms of standing up for freedom, standing up for what's right, good versus evil, et

cetera, et cetera. but, it's a lot of money do you think you feel differently about defense appropriations at this point, given -- i don't even know if we have -- we could run out of stuff, eventually. it takes a long time to make some of these things big, heavy equipment and ammo and all of these things. do you feel differently about how we split up guns and better at this point? do we need bigger defense appropriations, given recent events >> joe, a big part of the appropriations that i intend to vote for will be funding tens of billions of dollars of expenditures for defense, here in the united states, for standing up and running new lines that will produce more 155, artillery, ammunition, more missiles that will help defend both ukraine and israel from rocket attack. we will be investing more with this supplemental and american manufacturing, american jobs, and the american defense industrial base.

i'm someone every year on the appropriations committee fights hard for humanitarian aid, for developmental assistance, and vote for a defense bill. that's part of our work on the appropriations committee, which is one of the more bipartisan here in the senate, is to strike a balance between our investments around the world in our allies, in our diplomats, in our development work, but frankly also a strong defense. without a strong defense, we couldn't push back on china, russia, iran, north korea, at the same time. our global network of allies, joe, relies on us. not just for our strong markets or our economic might, for our great universities or our cutting edge research. they rely on us for our military capabilities and that is a key part of our global leadership. >> public service is, you know, it's a calling, obviously. and i think, you know, go back two, three, four months. it's all tribalism, and you know, we all look at it, and you know, have a low opinion, maybe, of what goes on in washington,

but this is when people like you and you make it on a bipartisan basis, we need you we need you guys and gals and it's so important. and now it all comes into focus, how important what you're doing is and how thoughtful and we need to be when something like this is happening in the world right now, senator so, appreciate it. and we appreciate your time coming on. >> thank you, joe. i really appreciate your comments thank you. >> okay. thanks, senator. still to come this morning, the biggest factors the fed will be weighing when the central bankers meet today and tomorrow to decide on interest rates here in the united states and a programming note for you as we head to a break. make sure you join us on thursday morning for an exclusive interview with target ceo, brian cornell this is his first interview in several months stay tuned "squawk box" will be right back.

coming up, we'll have breaking economic data for you the numbers and instant market reaction when "squawk box" returns after this

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welcome back to "squawk box. rick santelli here, live at cme hq with the breaking news of the morning. our third quarter employment cost index expected to be up 1% is up 1.1% up 1.1%. and if we look in the rearview mirror, the prior month, the prior quarter was also 1%. so it's about equal, but now higher we are expecting one, 1.1.

now, here's the interesting feature. if you look pre-covid at what was the high in the employment cost index, going all the way back to its inception, we were looking at 1.20. the reason i bring that up is that these are very evaluated cost index rates so we want to pay particularly close attention as we see all the metrics of inflation and pricing continue to be under the microscope is there going to be a resurgence is there not going to be a resurgence and with today the beginning of a two-day fed meeting, we want to pay particularly close attention, especially considering that the bank of japan disappointed last night, in terms of how much tweaking they did or actually did not do. the only thing really that changed was a reference point on their ten-year note yields, and if you look at the response in the market place, it's pretty easy to see. the dollar is now at the highest levels against the yen since

1990 we see our interest rates have kicked up a little bit that extra one-tenth on the employment index is the culprit, but we are still hovering at well below yesterday's closing yield, and if you look back, one of the catalysts on a technical feature was on the 23rd, a week ago monday we had an outside session in tens, which meant a higher high and lower low in the yield previous the previous session. those usually imply a trend reversal the trend was no doubt selling off in price rising yield. in the week that has fold, we have been contained. we have not traded above that 5% level, and technicians are going to watch two ends. whether we close above 5%, before we close above 4.75 those are the areas and those have been the levels that have contained the market in this last week. becky, back to you >> joe's got a question. >> ric, did you see all of these big discussions?

do you think any recent government types should have extended maturities on government debt at some point in the last ten years while they could, rick? or no? >> well, i think what -- i think what you're referring to is the fact that janet yellen, of course, is treasury secretary, didn't take advantage of ultra-low yields when most of the public was not using floating rate mortgages, they were locking in mortgages. >> they were smart enough, yeah. >> and the government didn't do it i'll tell you what, i brought this up when we were all out there a couple of weeks ago, when steve and were discussing that we brought it up, joe. it's too bad that we didn't do that i know that the response was hindsight is 2020,but that doesn't really hold water. there's a lot of folks out there that have fixed mortgages that are locked in. they trapped the housing market which is a downside, but the upside is they have competitive rates because they were able to

do the -- >> very average -- >> which was obvious >> non-professionals, average people that weren't hedge fund managers, that weren't -- you know, they never traded -- never did anything in their life were smart enough to figure that out. >> and august of 2020, the ten-year note closed at 0.50, half of 1%, the all-time low the thing that the government didn't look at that as an opportunity, at a time where jay powell had already really, in many ways, passed the point of where no negative rates were going to enter into the u.s. if he could help it, and i was always a big, vocal person regarding negative interest rates around the globe were a really horrible situation for central banks to put banks in, and put economies in, jay powell did a good job by making the u.s. avoid that, at least from a technical standpoint, you could argue that we had rell negative

rates. but in the end, it really was a huge mistake and we are going to pay for it dearly in the cost of debt, and of course, we'll know more about that tomorrow when we learn what the refunding announcement will be for the next quarter. >> rick, thank you steve liesman joins us right now with more on all of this, too. steve, what do you think about the data >> i think the data is a little problematic, in that we're still going at plus 1% the fed has not been all that concerned about the 1% it's just that it's not coming down is a concern that they may have it's something that powell does look at relatively closely i just wonder in this discussion, guys, are we having a debate about how to sell the debt or how much debt to sell? i think if you -- >> both. >> i think the concern that i have had for a long time is that spending looks like it's out of control. the packages that were put forward by the biden administration were too high

now, the question becomes that given that, should the treasury have been selling more longer-term debt and how much longer-term debt? they did sell longer-term debt the average duration did go up but the question is, by how much and should it have dramatically gone up? there are arguments out there that essentially short-term debt is less expensive, because it's more liquid. if you go back and read some of the papers from 2014, they were arguing more short-term debt, less long-term debt. and the question becomes, do you want your government to become a hedge fund in terms of how it else debt? >> steve, all questions we'll dig into tomorrow with stan drukmiller thank you, steve the fed kicks off its latest policy meeting later today later, we'll get the central bank's interest rate decision. the fed widely expected to hold things steady, but it could signal a willingness to tighten further in the months ahead. joining us with his view is former dallas fed president, richard fisher, a former

contributor at barclays and a cnbc contributor i think the big question is more, how long will the fed keep rates high, because as steve liesman was pointing out earlier in our are surveys that we've done, people are now looking for a much longer, higher rate structure. and that could mean a lot of things for the economy, too. >> well, becky, i believe what's driving rates higher and will keep them high for longer is our fiscal policy. and going back to the discussion we just had with steve and santelli, daily borrowing for the next 90 days as we go into this last quarter of the u.s. government, $8.6 billion a day a day! these numbers have gotten horrendously large and if you look at projections for the first quarter of next year, they're even higher. so this is driving the rest of the yield curve. and the fed, as powell hinted very strongly in his speech at

the new york economics club, doesn't have to do much here so the curve is 5% plus, all the way up to five years, and when he saw the ten-year test the 5% level, previously. i believe it's going to happen again. there's just no way you can clear this market that is so heavily dependent on more issuance, more issuance, more issuance >> this is a really interesting point, richard i was at that economic club of new york speech of powell's too. and you know, he left open the possibility that it could be a lot of things, but he did say that he thought part of it was the market kind of believing what the fed was doing at this point. what you just said is very different. what you said is the fed has basically lost control and this is fiscal policy gone wild and now, you know, the market has taken over >> yeah. i don't think the fed has lost control. and i'm a big supporter, as you know, of what the fed has done since they abandoned the

transitory inflationary argument, i think that powell has done a terrific job. and the committee has done a terrific job that decision has already been made they've waited, put the fine points around it tomorrow in the morning meeting. but pretty much when they go to bed this evening, they know what they're going to announce. so, i think the fed's in good shape here it is not the fed that is the problem. that's my point. it's the fiscal authorities that are out of control and as long as that's the case, we're going to live in a 5% world. >> that's what i mean, fiscal authorities, if they're calling the shots at this point and the market's reaction to that is calling the shots, what can the fed do >> well, that's true they can work on the short extent of the yield curve and that's about it. so we'll just have -- everybody that you've had on that i've listened to early this morning, tia, craft, et cetera, they're all expecting to be focused on a fixed income sector, at least

for the time being that's keeping rates relatively low. if they weren't focused, it would be much higher so becky, i think -- and to be fair to janet yellen and the comments that steve just made, remember, she said, you should go big what she meant was, financing long the problem is that the dealers don't want to finance long the treasury talked about 50-year bonds when rates were low. but you can't get dealers to pick that stuff up they don't want to be stuck with long duration. so let's be fair here. >> okay, the 50-year, i understand i know that ti that was looked .

>> if you look at the auction announcement that's will ever been made, there's much less going on at ten years and they're still staying fairly short. the ten-year is the keynote globally when it bops around 5%, it sends a shiver up the spine of the markets. and we saw that reaction now it's come back down to the 480 plus level but be careful here. because i still think there's upside potential on the yield of the ten-year and what i love, becky, is we ought to go back who was so good about the two to ten-year spread, recession is coming, recession is coming. you can go back almost a year and a half and we have to play a tape of those who were saying that was signaling recession we haven't had it yet. >> richard, i think you're making similar point that steve was trying to make as well the question i would ask about the market for treasuries, if, in fact, you were to try to issue more 30-year paper and less 10-year paper, what would happen i ask because we will talk to stan druckenmiller about this tomorrow, and i'm so curious how you think the market forces would behave as a result if, in

fact, that had become the strategy >> first, stan is one of the greats, so i'll listen to what he says tomorrow, also the 20 and 30-year are really taken down mainly by insurance companies, and those that have to match their long-term liabilities. i don't pay a lot of attention to that. i pay a lot of attention to the ten-year it's the key market rate for the entire globe and the key currency for the entire globe, the u.s. dollars that's why there's so much focus on the ten-year, everything gears off of it. mortgage rates, et cetera. and i think that's what we should be watching, andrew the ten-year note. and again, it bopped up to 5, sent a shiver up the spine of the marketplace, and some shrewd investors took it down at that rate we'll have to see what appetite there is >> yellen could have bought a bunch of the ten-year, right could have sold a bunch of the ten-year, right? >> i would suggest that they do

that, but, they haven't. >> if you look at the auction schedule, the at least amount is in the ten-year. we'll see what they announce tomorrow >> now it's too late >> is there pushback on the ten-year, too? i hadn't thought about the brokers and that aspect of it. you can't force the market to take -- >> i think if you do too much, you're going to have a little bit of a hiccup here >> you should have done more >> we'll see what they do tomorrow i bet you anything there's less in the ten-year space than any other space. >> pack when you had a chance, richard. they don't want it, so you have to go up from 80 basis points to 100 basis points now it's 500 basis points. even if you did have to give a little more, they could have done it. i don't understand why you're saying -- >> it's just a price >> you couldn't do it. you could have done it at a price and it would be a hell of a lot cheaper than it is now >> i agree, fully, and somebody just made the point that at the intra-day low in 2020, the ten-year was right around 50

basis points imagine that today it'sen times that. now, why did they do it that way or how did it happen covid. remember, we had that scare that started in march of 2020 it would have been wonderful, and again, for janet's credit, even though you guys are hypercritical, she did say, we need to go long. go big, go long. well, she couldn't sell it with any administration or elsewhere, in the market that would have been a brilliant time to do it. again, 20/20 hindsight >> would it just be enabling the fiscal authorities to do even more >> of course becky, in the next three years, over half of u.s. treasury debt is going to have to be refinanced and right now, it's carrying a yield weight or a cost-to-carry in the two-plus, almost 3% level. it's going to go to five or maybe higher >> i don't see how anybody can

argue that it shouldn't have been extended. so you said -- you're saying the market i think you pay a little more, the market would have done it. you're saying the administration would not have gone along with it >> i'm just saying, it wasn't done someone decided not to do it i don't know if it was the dealers, the administration, but that's history now the issue is, how do you refinance the u.s. treasury debt, which is massive and again, we're going back to $8.6 billion a day in the next 90 days. >> that's insane >> how do you finance all of this at lower rates? that's the puzzle that all of us are trying to solve. i thought you were going to ask me about the rangers and diamondbacks >> i like watching -- that sounds like being there, doesn't it i was going to ask if you were going skiing or golfing or what -- i like the outfit, but that's not -- you kind of look -- no, you've got the cool, casual thing going >> it's 36 degrees here in

dallas it's cold. >> is it really? >> yeah. >> ha-ha, it's colder there! >> holy smokes when's the next game tomorrow >> yeah. and let me give you a statistic that i think indicates how poorly markets project long-term future, one-year out the beginning of the season, the odds of the rangers winning the world series was 50-1. the odds of the diamondbacks was 150-1. it just shows you that a betting market, whether it's that or a fed funds market, if you go on too long, you're never going to be right now we know the odds to be a hell of a lot slimmer than 50-1 or 150-1 so i'm excited for the rangers i think the diamondbacks are playing greatly and i think it's compelling television to watch these series >> definitely. the changes mlb made at the beginning of the year are -- you know what they are they're home runs. >> yeah, home runs

>> i'm mixing so many metaphors -- >> that's a great metaphor >> knocked it out of the park with that one. >> knocked it -- >> let's knock it out of the park -- >> richard, thank you. we'll see you soon >> thank you, guys bye-bye. coming up, a deeper dive into apple's latest product reveals. we'll talk about that and get ready for today's tech giant's earnings shouldn't say today, really, it's coming thursday since apple last reported back on august 3rd, its stock down more than 10%. compare that to some of the other tech megacaps since then, alphabet and meta down about 3%, microsoft and amazon both up about 3% don't go anywhere. "squawk box" returns after a quick break.

welcome back to "squawk box" everybody. we're watching the few tears this morning we've seen a big comedown in the highs. dow futures were up by almost 200 points cat pill hear reported the initial reaction from that dow component was a strong one, up 3.5% gave all that back and now you've got the gains of just about 20 points for the dow. you can see the other futures -- inelections have come down as well caterpillar down by 5% amgen reporting it's down by about 1%.

chip speed a highlighting computation between semico semiconductors is it because it's halloween or did they use the term scary fast >> it's halloween. lots of dad jokes and puns. >> we never do that who are. >> no, never apple revealing its newest chip for mac, calling it the m 3, that's going into the macbook pro and desk top starting next week this is the first time they've lawned three versions of the new generation of the chip there's the base model and then the pro and max with better performance. other than that, these are the same computers they've been selling for the last couple years except the macbook pro comes in this cool looking

color. the mac business has been slumping all year, down 7% in the june quarter we'll find out last quarter's results when apple reports on thursday after the bell. nor interesting than the new computers themselves, this is really setting up a new pc fight with computer chips based on arm designs. qualcomm, the company you know for making smart phone process ors, last week they revealed their first pc chip that will start shipping next year nvidia is doing the same this is all bad news for intel its chips aren't as powerful as the arm-based chips. they give incredible battery life without sacrificing performance. ceo of intel brushed off the concerns saying he doesn't think the competition will be significant, joe. >> amazing, steve. thursday is the day. you marked that on your

calendar >> yeah. this is a very interesting one it's likely going to mark the fourth quarter in a row, a full fiscal year of declining sales for apple. really everyone is going to be listening to the call where apple has been given outlook -- they don't give traditional guidance since the pandemic started. it's going to be the key question, whether or not the iphone 15 demand can hold enough to get back to the top line growth. >> what are you going to dress up as. >> a scary tech reporter >> you could get canceled by somebody for that. you have to go as like an object, like a toaster i may go as -- or a vegetable. >> you got the orange tie. that's good enough >> i got that. >> just leave it there

scare the kids when they come knocking on the door tonight. >> once by accident i wore an orange tie on st. patrick's day. i thought somebody was going to be waiting for me outside. "squawk box" will be right back. bringing you an elevated experience, tailor-made for trader minds. go deeper with thinkorswim: our award-wining trading platforms. unlock support from the schwab trade desk, our team of passionate traders who live and breathe trading. and sharpen your skills with an immersive online education crafted just for traders. all so you can trade brilliantly. that first time you take a step back. i made that. with your very own online store. i sold that. and you can manage it all in one place. i built this. and it was easy, with a partner that puts you first. godaddy. power e*trade's easy-to-use tools, like dynamic charting and risk-reward analysis

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welcome back to squawk we're a little more a than a half hour away from opening bell joining us is burns mckinney with nfj investment group. i don't know if you've been listening to our debate about the bond market and what the treasury should or shouldn't have done. i'm very curious between equities and bonds i don't know if you heard our earlier guest from tiaa who said he'd be in bonds, i wouldn't even be in equity at this point. overweight bonds, what do you think of that right now? >> for the last several years you've had the -- t.i.n.a. discussion, there is no alternative, one "the exchange" that's been a paradigm shift with the ten-year bond yield around 16-year highs, suddenly there's an alternative there's something to be said for making the shift out of equities

into fixed income. the name itself, fixed income, gives a case for equities. a lot of the bond proxy the-type dividend pairs have been out of favor. yulths hit hard, stappals hit hard the thing to look for, especially to keep up with rising inflation are dividend growers where you get that income, but you also have the ability to raise those payouts going forward. >> so give us the names. >> i think one that's kind of interesting, and a lot of people look at the utilities and bond proxies. to zag on that a little bit, agile technologies they don't have a really high dividend, but they basically make measurement equipment and diagnostic consumables used by the drug companies and the biotechs this is a name that right now you're getting at 18 times earnings rarely cheaper than the overall market, cheaper than the med

tech peer, cheaper than its own history. it's inexpensive on every front. this is the kind of story where we don't have to be smart enough as investors to know which drugs are going to succeed and which ones are going to fail it's the consummate pick and shovel play. they're all going to have to use their products in this case you're getting growth at a reasonable price their five-year earnings forecast are 15% per year. so 18 times earnings, that pe to growth ratio of about 1.2 times, i think the overall stock market is about 50% above that. you're actually getting reasonable value there for a company that has the ability to grow the dividend aggressively >> burns, we'll keep our eyes on that we have to cut this conversation short because we've got to hand it over to our friends on "squawk on the street. i'm sure we'll talk to you again very, very soon. before we go, a quick check on

the markets. we've moved around a lot the dow looking like it would open down about 7 points the nasdaq maybe a point or two down a very different territory an hour or two ago now. the s&p up about 4 make sure you join us tomorrow happy halloween everybody. trick-or-treat "squawk on the street" begins right now. ♪ good tuesday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber bulls trying to build on monday's bounce, but futures lost some gains on the back of several earnings disappointments. two-day fed meeting kicks off today on this final day of october, happy halloween our major averages on pace for three-month losing streaks as the fed kicks off that policy meeting. >> legendary investor stanley