2023. "squawk box" begins right now. good morning. welcome to "squawk box" here on cnbc. we're live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. the fed holding rates steady as sp expected, but the door remains open for future hikes and levels remain elevated to tamp down inflation. the central bank saying the economic activity is at a strong pace in the third quarter. steve liesman will be with us to break down oall of the numbers.

the s&p and nasdaq adding 1% after the conference. the nasdaq was up 1.6%. the most interest rate sensitive of the indexes. if you want to look at where things stand in the market. u.s. equities up again. triple digit gains for the nasdaq which is up 108. dow and s&p up 20. the yield curve is seeing pressure on the ten-year yield. the ten-year yield at 4.71. two-year yield is 4.79. >> the fed's powell hinted, hinted, hint, hint, hint, might be done. that's the headline. do you see oil? $80. >> all the way down? >> i don't know. cross currents. >> not with the tensions in

middle east? >> that hasn't been it. it is demand, isn't it? not supply? >> we are talking about the strong third quarter gdp print here. that's the strongest in the world. you can't look anywhere else and stan druckenmiller laid out the fiscal spending. >> opening up my wrists listening to him. i don't know. we'll see tomorrow. it's like 400 or something. can't be. >> adp was lighter than expected. >> not a great job on that, by the way. where's liesman? >> apparently he was in lockup. >> what does that mean? >> lockup ahead of the fed meeting. they give you information. they won't let you out to make sure the information. >> physically in lockup. >> not like -- i forget how

these terms sound to a layperson. let's talk about the very active earnings calendar today. we will get news from eli lilly and moderna out this hour. we have interviews with the ceos after the numbers are released. don't go anywhere. we will have starbucks this morning and after the bell is apple which is dominating the headlines. the stock has been quite awry. it hit the 52-week in july, but still up 34% for the year. the man of the hour is the star of the liesmaniacs. helping power to rally stocks and bonds. 200 points on the dow. steve, that's a rally. i don't know. it wasn't 1,000 points. it was up the day before. a bit of an all-clear? >> the question is, joe, would

you bail me out? >> what are we talking? will you wear one of those things on your ankle? >> what do you mean? a bracelet? >> i don't want with you leaving town. maybe you better stay like sbf. another thing that happened, steve, quickly, did you see bit bitcoin? people are waiting for the fed to go back to printing more and easing. that took off yesterday. wasn't it thought of as dovish? >> i don't know, joe. don't get me started. i'll give you a quick word on bitcoin. it is a risk asset, not a currency. >> everything else is going down. >> dogo ahead. >> none of us are saying it is a currency. it's like gold. anti-fiat proxy.

>> my take on people who buy and sell cryptocurrency is they don't know what a currency is. i think they are buying and selling a risk asset, but as an alternative to a currency or dollar, that is not what it is. let me talk quickly about this. i want to play one side here from powell. of course, leaving rates unchanged for the second meeting in a row. 5.25% to 5.5%. what is important here is jay powell said rates were restrictive and didn't say they were sufficiently restrictive. he suggested they remain at a coin toss over the next meeting. >> we have come far enough that the risks have gotten more two-sided. you can't identify that with precision. it feels like the risks are more two-sided now. >> he said there was still a bias to hike if the economic data did not improve and if the fed was not considering rate

cuts. he underscored the two-sided risk. inflation remains elevated, but tightening financial and credit conditions with financial being the new word, is likely to weigh on the economy. look at the ten-year yield. three reasons it went up. treasury funding announcement in the morning. it was not as bleak as the one in august. weak economic data at 10:00. i guess you call it an even-handed statement. the ten-year yield rally gave it a green light. no certainty the fed will hike again. after this, it is willing to p give the economy a chance to cool and bring inflation down with it. that's my take. joe, i'll go back. >> for him to pivot to two-sided after the jobs number and after hot inflation numbers and retail

sales have stayed hot. he doesn't have any reason to say it is more two sided. it hasn't happened yet. >> that's a good point, joe. what they are doing now is they are working a little bit on their forecast. their forecast of the economy is it will cool. i don't want to get too excited about this. we had the atlanta fed which you know is volatile and tends to be wrong at the beginning of quarters. they went from 2.3 in the first quarter down to 1.2. we have the wrap up in the fourth quarter in the 1.5 range. don't forget the rise in the ten-year yield, joe. that is the big offset here that he's talking about. the idea that it has worked its way into the statement and into powell's rhetoric and talk here and that is something that is offset here and they expect that over time to weigh on the economy along with what is happening with the banking

sector and tightening financial conditions. >> i'm glad you are out, steve. anyone recognize you? no trouble, right? >> no. no, i didn't. when i went to the hunger benefit after d.c., some people did recognize me as the guy from the stellar blues band. not from cnbc. i was at the brooklyn bowl for the benefit. >> not from the other bad hud crutcher? >> when wii go to music, they recognize from me stella blues band. >> okay. thank you. we have news crossing on starbucks. earnings of $1.60 a share. 9 cents better with revenue up 11% to a record that is $9.4 billion. also better global sales growing

4% driven by the average pieces. the stock has not performed well lately in part because of china and, if you remember, despite the success they were having, they did not raise guidance. a lot of folks were sitting around saying are they beating? >> it is up 7% this morning. >> things are moving in the right direction for them. another move in the battle for streaming dominance. disney buying comcast stake in hulu. paying $8.6 billion. the initial payment due before december 1st. then there will be an ongoing negotiations to continue the full value of hulu and any additional payments to comcast via the arbitration process of sorts. >> if they can't agree on the

10% of value, they go to arbitration. that happens with the split from the majority owner. >> only unusual as far as there will be a payment made first and they figure out the rest later. disney acquired the majority of hulu in 2019 with the fox acquisition. we will havemore on what this means for the streaming wars later this hour. comcast is the parent company of our network. >> that is the same situation with berkshire and pilot. you want to call that -- comcast decided they get to call the option on that. pilot can do the same thing. if they disagree and it is not within 10%, you pay 90% and go to arbitration and figure out the value and figure out via the

third party. >> it is worth more than that, but i'm glad there's a floor. >> right. >> you see what happened in streaming. it is worth a lot more to disney than it is to comcast. we have adult entertainment. >> i reiterated that in august. i said this is very important they want to get to as many people with as much content as possible. they have said hulu is important to the strategy. >> squeeze disney. won't you like to hold out? they want it. what? that's business, right? >> i try not to take a position on squeezing. >> you are not a comcast loyal. i see what you are saying. disney has been -- i'm sour on disney. >> you have been sour on disney forever. >> i have. ever since comcast tried to buy them and they said no.

and the seven magical creatures. i know. i know. under pressure to just back it up a little, bob, on the w wokeness. please. >> they are redoing all of that. >> i hope so. >> half of the old movies are canceled. >> ayou can't watch them a any more. >> go back to dumbo. there are racist stereotypes there. >> you can whitewash everything, i guess, in history. it doesn't mean it didn't happen. >> no. i've gone back and seen "dumbo" before and thought whoa. the crows scene. >> "seinfeld." if you see that, it should be canceled or suspend psuspended. the lowest rated world series.

they wanted phillies and houston. they got texas and arizona. where was arizona last night? evaldi is a great pitcher. this morning, the texas rangers are celebrating and they are champions. winning the first championship in franchise history. defeating the diamondbacks in five games. rangers winning despite being no hit all the way into the seventh inning by zack gallen. corey seager was the mvp. he was the 2020 mvp when he played with the dodgers. >> they did something that's an never been done in history. they won 11 teamsimes in a row the road in the post season. >> all of the road teams did much better. now i'm back to philly. back to mid-atlantic conference

football games to bet on now. all state. ball state. >> i lived in bowling green for five years. just bowling green. not kentucky. bowling green, ohio. rutgers is playing ohio state which is number one. >> i know. i'm sorry. guys are calling in sick. when we come back, target ceo brian cornell's first interview in months. first broadcast interview since march this past year. he comments on the state of the consumer and pride backlash from the merchandise in the summer. this is "squawk box" on cnbc. you know when you have those moments?

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welcome back. i spoke to target's ceo brian cornell for the evolve global summit. we will have the discussion in the 7:00 hour today. i asked what he is seeing from the american consumer. cornell says this is a nuanced picture. >> we look at overall retail spending just with the top line which is a healthy consumer. they are spending. even in food and beverage categories, over the last few quarters, the units, number of items they are buying, is declining. they are tightening spending in the categories.

in discretionary goods, we see growth in dollars and units declining. you are buying less apparel or items for the home or fewer toys. you see the pressure in the categories. >> that nuanced picture is something cornell has tried to make clear to the cleerleaders e country. he said this is a situation they need to watch more closely and not a gang busters economy. we have been in a goods recession for seven months. that is something to pay attention to. this is the first broadcast interview from cornell in march. he has not brought up the backlash from the pride merchandise. >> becky, what i saw in may is store members saying it is not safe to come to work. >> what was happening? >> aggressive store behavior.

lots of product destroyed. point of sale disrupted. when we started to hear that, we knew we had to take action. we had to prioritize the safety of our teams. i knew this was not going to be well received. we had to prioritize the safety of the team. >> we will have more of the interview with brian cornell at 7:30 a.m. eastern time. when we come back, more on "squawk box," it is a crisp morning in new york, but warmer for the sunday's anmarathon. next, brooks running ceo jim weber will join us when "squawk box" returns after this. constant contact's advanced automation lets you send the right message at the right time, every time. ( ♪♪ ) constant contact.

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this is american infrastructure. megawatts of power, rails and open road, and essential services of every kind. all running on countless invisible networks, making it a prime target for cyberattacks. but the same ai-powered security that protects all of google also defends the systems running america's infrastructure. for these services. for the 336 million of us living here. ♪ welcome back. the new york city marathon takes

off on staten island. we have jim weber of brooks running with us. >> the industry gathers this week. almost 50,000 people running the marathon. one of the largest in the world. it is a running week in new york. lots of retailers in town and athletes in town. what is exciting, we were the number two shoe on course. we willhave 10,000 people running in our shoes on sunday. we'll cheer them on. >> you are a hardcore brand. you talked about the news trend with wearables. you want shoes to look good and you can walk around town in. >> we have very serious about great footwear. people who need best shoes are new runners or fitness runners. injury is there and comfort is universal. everybody needs great shoes and performance. what has happened is the performance running silhouette

is great materials and fit, fit, fit. it is spreading out into walking and active lifestyle and gym. the color proliferation is getting more wearable. >> more subdued? >> i call it an airplane shoe. i can wear on the airplane and casual dinner and go out and run on it. casual colorcolors. >> andrew was asking about the one you are wearing. i don't know if you would stick your foot up. >> i would love to stick my foot um. nitrogen injected soles. the fit is amaziamazing. i'm wear it ing it with a suit today. >> we talked to brian cornell, the target ceo, he said the last few quarters have been down. is that the same with shoes? >> our category in run is up

about 5%. here is the key. the premium segment is $100 and up which is up 17% year to date. this category is healthy. it just reflects of the fact the silhouette is sought after. one is solid and the customer has assets, they are spending. we are seeing strong demand. >> andrew was asking about the plate. >> that's the running shoe. that's the race day shoe. >> a lot of innovation in the category. speed and having race day shoe to help you go faster carbon plates in the shoes helps. you have to have them to be competitive. >> it is not just it makes you go faster. it is less energy used for each step. if you are not trying to go super fast, it makes it easier. >> it has a spring in it. a spring under your foot.

2% to 4% faster. >> how is that legal? >> the governing bodies set rules for stack heights and plates we all have to abide by. it is like the golf ball. >> ever since nike put this out, it changed. you have seen the numbers change. the times on races have changed in the whole game. >> absolutely. records are being set across distances in the sport. >> i could run, maybe a 14-minute mile instead of a 15-minute? >> that potential is there, joe. >> that's an idea. i need all the help i can get. >> i think what is cool is shoes matter. we always built shoes that way for comfort and stability. a o some of the universal attributes. >> we talk about a.i. with every company that comes through. i remember sizing fits for 25

years ago where you go in and they would say we will measure your body and use computers for clothes. you are saying shoes. has it gotten better? what i remember doing was lousy stuff. >> it has gotten better. millimeters matter especially at mile 20. we are using tools forfeit. for fit. we are using a.i. to push design forward in the early stages. >> where are you making these? >> in asia for our industry. athletic footwear is mostly vietnam. we left china four or five years ago with the tariffs. >> an opportunity to differentiate? >> absolutely. we are working on process innovation.

3d printing and the like. we would like to be regionally sourced around the world. that's the vision. >> you don't like to talk about competitors. the two shoes i assume have come on the hottest that you now must think of as competitors is ong. a shift in the landscape. hoka has developed. who else is interesting? >> all of the athletic brands are investing in the category. you will see new product coming from all of them. outdoor industry on the trail side. all of those brantds are coming and fitness. it is competitive. what is cool is the premium side is the growth and i think the brands you mentioned in brooks is the growth in the last five ye years. >> how elastic is selling? >> our ghost and adrenaline.

the frequent runner is buyingir. we have a good assortment at every price point. will the consumer stay at $160? >> you have $180. you could go higher. >> absolutely. for the every day trainers, i'm skeptical about that for an average running two or three pairs a year. that's a lot of money. >> jim, thanks a lot. are you running? >> i will not be running on sunday. i'll be at the warm-up run on friday. we will take a group to the park. >> is there a collectible in your direcollection? >> i think great product becomes iconic. our adrenaline is on the 25th cycle. there are a lot of people would love us to come out with the 3 or 4 version. you earn that. we try to earn it every day. thanks. coming up on the other side, we will expect results from eli

lilly and moderna. plus, another turn in the battle for streaming comedomina. we will get into that. you are watching "squawk box" and this is cnbc. >> announcer: squawk ceo call is sponsored by truist securities. experience, expertise, exe execution.

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welcome back. moderna just reporting.

the company lost $9.53 a share during the quarter. it is unclear if that is comparable to 1.93 the street is expecting. maybe the charges they took during the quarter were more than the street anticipated. that came in on $1.83 billion which was better than $1.4 the billion the street was looking for. the company said the u.s. market share for the covid-19 spiked in 2022. moderna expects 204 24 revenue miss. this is a quarter they are looking at as a covid reset quarter. >> what was the charge for downsizing? >> $3.1 billion of the non-cash cha charges. $1.3 billion was write down of

inventory. the moderna ceo is calling this a post-pandemic reset to slash costs. they think they will be profitable. we will have more information from him coming up. he will join us later this hour. >> i am in awe, shock and awe, of the long-term chart of lilly. lilly has a $500 milbillion mar cap. it is above johnson & johnson. it has been on a roll of all rolls. davi david ricks will be on later. they posted a small profit of 10 cents a share. a lot going on in what lilly is doing as well.

the yearly adjusted range now 6 opi6$.5 6.50 to 6.70. we will talk to david ricks about all these things. you know, these companies have to manage a lot of stuff that other companies don't have to manage. when drugs go off patent and the biggest selling drug gives you 50% of the revenue and next year it drops. >> it is about what is in the pipeline. >> and what you are losing for eli lilly. it should be interesting. 550. the rest of them, merck and pfizer are all bonds with upside. they all have high dividends. you don't see appreciation like in the shares of lilly.

it is not a yield. the yield on this is .8%. >> the weight loss drugs? >> i think that helps. right? >> yeah. the hope for the future. the maker of ozempic. >> we'll talk about that in a moment. disney buying comcast stake in hulu. paying $8.6 billion for the third of the streaming service it doesn't already own. negotiations will continue to determine the full value of hulu and additional payments to comcast. joining us to talk about the streaming landscape is matt bellomy. matt, this is not a surprise, but the surprise is a deal or final number has not been reached on this asset and what it's worth. what do you think the answer will be?

>> i think it will be higher than the price that disney put out yesterday. the question is what is hulu worth? it is worth at least $27 billion. that's the floor. disney, essentially announced yesterday, they heare willing t pay that price for hulu or the share of hulu. there will be a process over the next year or so where both sides, comcast and disney, will value the asset and they will come close and split the distance. if if they are not close, they will hire a third to name the asset. i am betting that hulu is worth more than that floor. i think comcast is pretty confident it is also going to be worth more. >> i think, matt, the question and i agree with you is is it

worth $20 billion or $30$30 billion? what multiple is fair to apply in the marketplace? when you look at the multiple, what numbers are you using to capture that multiple? >> right. i think the question there is how has that changed? obviously, since 2019 when disney acquired this controlling share from the fox transaction where it bought fox, it has been a roller coaster in streaming. valuation of the streaming services by the street was higher a couple of years ago. they have since come down or the market is valuing them not as high as they did. netflix has pulled away in streaming. hulu, on the other hand, has been chugging along and has an expertise in sales and advertising.

it has 50 million customers in the u.s. on the ad tier and straight subscription tier. that is very valuable. the question is how do you value that. that's why the system is set up where both sides have to value it. >> the separate piece of this is how do you value that in the context and does the context matter? i think becky or joe made the point earlier that it is true that this asset is worth more to disney than anybody else, in part, because it is packaged with disney plus and often w wiwith espn plus and can you separate that package, if you will, as the thought process goes around modelling out how much this thing is actually worth? >> that's a good point. the other point is what is hulu if not for the content on hulu? it is distribution platform that is dependent on the content.

many of that content comes from disney, of course, but they also license from other people and that's another factor in putting in. if you take away the licenses, which can always go away, what is hulu worth? that is another good question. >> looking out a year from now, what do you think disney will do with this that it could not before? there was a few that disney didn't want to ultimately invest in this product in the way that it might in the future if it didn't own the entirety of it? >> it is bundling. disney has danced around the disney bundle where they sell disney plus and hulu and espn plus together as a bundle. with full control, they can further put hulu together with disney plus potentially into one product into the disney plus

banner with hulu becoming a tile on disney plus for an up charge. >> matt, do you think that approach devalues the entirety of hulu? >> potentially could, but it depends how well able they are able to transition the hulu subscribers for people who pay for the up charge on hulu plus. they can successfully do that. it may be additive to disney plus which is struggling to get advertising on disney plus. they make more money when people take the ads than straight subsc subscription. hulu can help bring ads to the ecosystem. there is value there as well. >> matt belloni, thank you. >> thank you. still to come, a company recover from the cyber attack with stronger than expected

results. and target ceo brian cornell speaking out for the first time in many months. we have that interview coming up. "squawk box" will be right back. >> announcer: currency check is sponsored by interactive brokers. the best informed brokers choose interactive brokers.

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shares of clorox are soaring thismorning. the consumer products giant is reporting $1.4 billion revenue c topping estimates. clorox reported a surprise profit against expectations of a loss. the company is rebuilding inventory as it recovers from the august cyber attack which

lasted into september. we're going back to break. we have to think about this. coming up, moderna releasing quarterly results moments ago. ceo stephane bancel will join us about the quarter and guidance. it says here future guidance. reminder, you can watch or listen to ivus le any time on the cnbc app. >> announcer: executive edge is sponsored by at&t business. next level moments need the next level network. move to the cloud. - so, the question is... - cyber attack! as cyber criminals expand their toolkit, we must expand as well. we need to rethink... next level moments, need the next level network. [speaker continues in the background] the network with 24/7 built-in security.

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recapping moderna's quarterly results. net loss of $3.6 billion compared to the net income of $1 billion last year. driven by non-cash charges. $3.1 billion related to resizing

manufacturing. also tax allowances. that was on revenue of $1.38 billion. that was better than the estimate. this is all post-covid. joining us to break it down is all post covid, obviously. joining us to break it all down is the ceo, stephane bancel. moderna ceo. this is life after covid. these are just numbers that i guess you expect. i don't know if anyone can really plan for it, stephane, but you're taking the necessary steps as a company to operate completely differently in this new environment. >> exactly, joe. good morning. indeed we resize manufacturing, during the pandemic we were obsessed about scaling up manufacturing to make as many doses as we could to help as

many people as we could. and now that we're moving into an endemic setting, it is important to resize the company. and so we announced quite a number of mergers. mostly known cash, to right size manufacturing so the costs of goods moving forward can be consistent with 75, 80% customer good. the piece i'm happy about is the sales of the quarter, $1.8 billion. and in the u.s., we actually have recent data we have been actually gaining market share. if you look at last year, market share in the u.s. was around 36%. and this year, season to date, the data we have to date, we have 40% market share and last week we were at 51% market share for the week. so i think that's really important because if you think about moderna, you seat e the sy about new product launches. we have rsv and the review by

fda right now. we have very, very high probability of success because they use technology as with covid vaccine. it is all about product launches for us. so resizing manufacturing, many product launches and we're able to take market share which i think is an important point for company that is more recent. >> you're back to being more than a normal company now. i wonder how you get to the -- the moderna that we were thinking about with this new platform that you have, this messenger rna platform and all the -- we talked about all the different uses that you're investigating. but just to be totally honest, that shows 200 as the high. you were almost 400. your stock was almost $400 a share. 375, 380 at one point. so the post covid world is -- you have to go back to the

basics, i think. that was a one-time event that isn't likely to repeat. >> again, you're right, but it is going to take us to much bigger highs over time because the platform they show what we do. as you know, in this industry, how this thing is to come over the next drugs. well, we have a platform, if you think about it, we are five vaccines in phase three. we have rsv, a new flau vaccine with good data. and cancer, you know, we have some exciting new data, the three-year survival data coming before the end of the year. and as we say, this could launch as early as 25, pend nothing reg

pending no regulatory z discussions. we're focusing on the pipeline. >> the cancer proposition for your company i think is incredibly exciting for patients, for anybody who has been watching any of these things. but i wonder if there is so much concern about vaccines in general at this point that vaccine avoidance because of everything that happened during covid that that is what raises investors' questions about these things. if you have a flu vaccine, great. i don't no how popular flu vaccines are right now or how much of the population will take any vaccine. how do you address that? >> i think that is a good question. from what we're hearing from doctors, this is not a concern. the phase three right now is working faster than planned because the data is so strong. if you remember, we're showing that compared to a great drug, we reduced by 50% and it is an

incredible performance for cancer products. this is given when people have cancer, not ahead of cancer to prevent cancer. it is your immune system. but it is a treatment. and so i'm not aware of people not wanting to take the product. as you have cancer, what one wants is the best option to save your life and to live. and so, we think this is not going to be an issue. >> stephane, is the demand projected in your view to be there every year for a new covid vaccine that is customized to the variant or is it not? it doesn't -- it doesn't appear to be helping -- we keep talking about the share price, but i think there was a -- at one point we thought that every fall we were going to be getting a version -- like a flu shot, a new covid shot. and unless you have a lot of

underlying, you know, co-mortality, i don't think you're going to do that. >> so, if you look at the data, joe, we believe that this season seems to be and we have to be careful with december, but seems to be on track with last year. a little bit ahead of last year if you look at the weekly data. we are projecting next year around $4 billion sales. we'll have the same thing from over vaccine player in the covid space. and that's why the regulators and the public health officials are indicating, which is this virus is not going away, it is going to keep mutating, we're going to do every year updates. so i think that 15 million market, which is what we saw last year, which is what it is turning into this year is something we repeat again in 2024. >> that's not that big of a market, obviously. and, you know, natural immunity, i think most people are saying, look, i'll take my chances at this point with some of the issues that becky was talking about.

unless you have a co-morbidity or somewhere underlying or 80 years old or something like that. so, i don't think we're going back there. the hassian days of what moderna did so well providing for the world, that may not happen from covid, hopefully it doesn't happen from anything else either. >> i agree with you, we're not going back to covid, we're resizing manufacturing. but when you look at the pipeline and all the products we are launching in '24 and several products in '25 and more in '26, we're talking about up to 15 products in the next five years and quite a number of them in '24 and '25. that's how we drive growth again, the products. >> we'll see. >> right. everybody's work on cancer and hopefully it makes some progress there. 497 was the all time high. stephane, we got to run. hope to see you again soon. "squawk box" coming right back. smart bed is only $899.

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(♪♪) our therapists give their all each day. and while we're in the business of taking care of others, it's important to make sure our therapists know that with benefits from principal, they're taken care of too. (♪♪) stocks looking to extend their best three-day gain since march. the futures are higher ahead of the open. global markets still digesting the latest rate decision from the fed and powell's comments about future policy moves. and eli lilly ceo david ricks joins us after reporting quarterly results. the second hour of "squawk box" begins right now.

good morning. welcome back to "squawk box" right here on cnbc, we're live at the nasdaq market site in times square. i'm andrew ross sorkin with becky quick and joe kernen. u.s. equity futures, green on the screen. 19 points higher on the dow. the nasdaq would open up 116 points higher. we'll show you treasuries, the ten-year, the two-year, here's where things stand. the ten-year at 4.703. the two-year at 4.943 on the back of jay powell saying he's going do nothing. palantir reporting its results. over to frank holland who joins us now with some of those numbers and comments from the ceo alex karp. >> good morning, andrew. we're looking at palantir shares after a beat on the top line and beat on the bottom line. profit was 7 cents compared to

estimates of 6 cents per share. shares up just about 5% right now. current quarter guidance also basically in line. this is also palantir's fourth quarter profitability, qualifying it for inclusion in the s&p 500. it is very important to him because it makes the company more accessible and also widely held as it would then be included in the spy etf. he says palantir continues to work with the u.s. government, emphasizing his support for israel and confirmed palantir works with the israeli government. he added this about demand and outreach from governments. he said the rise in terrorism brings security to the forefront for america and its allies. the only way to effectively and ethically deal with terrorism in combat is to use software. those alex karp's words. commercial is the focus, u.s. commercial revenue jumped by 33 pf 33%. he said in part, we're now helping manufacturers bring manufacturing they would have

done in asia back to america because with our product you can build a factory in america, just like it is built in asia. again, palantir shares moving higher after beat on bottom and top line. fourth quarter of profitability in a row. one other note, he said the summit today, he says senator schumer's office reached out about another meeting with u.s. companies on u.s. a.i. regulation. back over to you. >> frank, it is a big switch for this company, because for a very long time people were worried about whether they were going to continue to lose money. this has been, as you said, now four quarters of it. but i was really struck by that last sentence, in that letter he wrote, you mentioned it, but just to detail it, he says we're one of a few companies in the world to stand up and announce our support for israel which remains steadfast. palantir stands with israel. a very different remark and comment than a lot of other ceos

in the west, some have condemned hamas, but few have come out publicly and said they support israel as a country. of course, palantir run by alex karp, but backed by peter teal and so many others. >> you can imagine that palantir is not doing business with hamas, helping them -- >> that's for sure. it makes it interesting -- >> they work with the israeli government and he is steadfastly standing by israel and he made it very clear in his statement to me he considers hamas a terror group, as does the u.s. government, to be clear. >> but what makes it so interesting is they also work with governments around the world, some of whom historically have been considered allies of america, except that they in -- at this particular juncture and moment some of them are not supportive necessarily of what israel is doing or of supporting israel per se, right? i think we have seen a number of u.s. allies not be allied on this particular issue and so it

is a very interesting thing for him to come out as publicly as he has. >> though you heard that what they say in public versus what they're saying intimating in private, saudi arabia, for example, i think they say certain things and i think they might be less strident when they're talking to us. i think the talks could be on track still with saudi arabia. we're hearing, right? >> on track with saudi arabia to have a new partnership with israel. >> with israel and abraham accords, et cetera. i don't -- >> you can imagine they -- >> public commentary and private. this is great for palantir to have the -- i mean, there has been other times where i say stay out of things, but on this, i think it's go, alex. >> meantime, as widely expected, the fed catches interest rates unchanged. the central bank did keep its options open to hike again down the road. joining us now is kelsey barrow,

fixed income portfolio manager. so, he said nothing. i don't want to say he said nothing. what did he say? underneath what he -- underneath doing nothing, he said what? >> so i think there is a couple of things that i really took away from what chair powell said at the press conference. there was no change in the rate. we're still at 5.25% to 5.5%. he said they made no decisions about the future. but i think it is all about the risks. he said the risks now are more balanced than they have been in the past. and why? because financial conditions have tightened. and that was the one small tiny change they made to the statement. mostly they didn't even really need to have a meeting because they barely changed the statement at all. they made one small change that they highlighted that tightening in financial conditions as well as that tightening in credit conditions. and that's giving them confidence that if you look forward, we're going to see slower growth in the fourth quarter, and inflation is going to continue to come down, and

ultimately i think the policy setting that they have is tight enough. just look at home affordability, it is the lowest on record, back to 1986 -- >> i don't mean to sulggest he said nothing. let me ask you a different question. tom lee was out last night, saying that he thinks that this -- they have said we're no longer data depoendent. do you believe that? >> i think they're very data dependent. the payroll report on friday is very important to them. what they're trying to understand right now is we had some strong growth, we had some better payroll reports. is this going to derail their objective, which is ultimately price stability above all else. >> the future data dependent. i think tom lee is making the point that nothing -- we made that point earlier, nothing in the recent numbers would indicate that they have -- it is mission accomplished for slowing the economy down. you point out that the tightening of credit conditions, you can expect that to be the result of what we have seen.

i think the future data, that's the way they should have always been, future data, can't use coincidence indicators to set policy. >> right. q3 is in the rear view mirror now and they're trying to understand what is going to happen in the future. i think what we're seeing in the leading indicators is that you should be expecting growth to slow down. the consumer is being challenged by higher interest rates. it takes longer for it to happen, particularly in an economy where you have a lot of fixed mortgage rates, but it is happening. and i want to say one key thing too. it is not just about what has happened, but what is the market, the bond market pricing? the market is pricing now, if you look at the forward curve, a fed funds policy rate that never goes below 4% in the next ten years. i think that's a very optimistic, fairly sanguine view of if the economy can really handle these high rates. and what does that mean for a bond investor? it means yields now are very juicy. there is a lot of turn premium already priced into the bond

market. >> did you hear gundlach yesterday. he has a view that it is not that there is going to raise by 50 points, he thinks they're going to go down by 200 basis points. >> he said a recession by this year, last time, a couple of months ago. >> right. where do you stand there? >> this is all about the risk-reward. there is a risk they go another 25 basis points, but there is another risk, the larger risk that is that they're done and when they start cutting, we know the fed when they start cutting, they start cutting a lot. they start cutting quickly. so the risk-reward here i think is very attractive. fixed income for that reason fits into a number of different portfolios. you're looking at it from the equity perspective, right? high yield now is yielding 9%. you look at what long-term equity returns historic and expected should be, i mean, high yields is providing a very attractive opportunity and for a lower unit of risk.

if you look at it from the other side, sitting in cash now still, which is that 5%, why not lock that in for a few years, and, again, that's the story again of that risk-reward. you can get a little higher in yields, but it also comes down a lot. >> if we're going into a hard landing, you don't want high yield. >> of course. i mean, you need to think about these things, but i think fixed income fits into a portfolio -- >> you think it will go longer? 5, 10? >> i would say that we would be encouraging investors to step out of cash and lock in those yields because -- >> how long? >> it is reinvestment? >> ten years. >> five years, ten years, seven years, it depends on the client. we are ready for the fed to be done. we don't think they're going to be hiking again. and so that means that the next move, if it is not up, it is going to be down. >> kelsey, thank you. wow. well, it is a long conversation. thank you. thank you. when we come back, eli lilly

reporting a short time ago, the ceo david ricks joins us to discuss the numbers and the company's outlook. and later, target ceo brian cornl t ste oelonhetaf the consumer, the backlash surrounding the company's pride month messaging and much more. that interview is still straight ahead. "squawk box" will be right back. in the u.s. we see millions of cyber threats each year. that rate is increasing as more and more businesses move to the cloud. - so, the question is... - cyber attack! as cyber criminals expand their toolkit, we must expand as well. we need to rethink... next level moments, need the next level network.

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eli lilly reporting its third quarter results in the last half hour. the drugmaker earning 10 cents a share, versus an estimate of a loss of 13 cents. revenue also above expectations at $9.5 billion. we're going to talk about the company's outlook for adjusted full year results, but i would like to welcome david ricks in now. i was checking it out, david, time flies. is this right? when you became ceo, seven years ago already, in 2016, is that right? >> that's amazing, but true. it is true. this is my 28th earning call, yeah. >> we love having you on. we had frank on so many times, frank lickliter, louisville, went to st. xavier high school in louisville. this show has been on so long. we used to have sidney terrell on, i'm trying to figure out who got this to be the most valuable drug company in the world.

and if you go back to 2016, i think you look too young to have been able to orchestrate this, david. did you do this? let's look at a long-term chart. >> it is a team sport, joe. we got a great team here. >> that's what you guys always say. what an amazing -- there is the chart. and while some of these other companies -- i mentioned it, merck, pfizer, they're seen almost as bonds with a little bit of upside with their yield, you're not a yield stock. but you have been a huge outperformer from the space. how did you do it? and then we'll talk about the current quarter. >> well, the story is investing, innovation against diseases that are common and afflict a lot of people and we have been fortunate to have great scientists who have come up with amazing inventions. so, of course, you can't have an interview with our company without talking about obesity and diabetes and neuroscience diseases like alzheimer's.

i think the world wants cures and answers to these terrible conditions that afflict a lot of people. and they want medicines that are safe and effective and can be scaled. i think whethen we hit that tar, we can create a lot of value in society and ourselves and our investors. that's what we have been doing. >> you -- there is some confusion about your outlook on an adjusted basis, 650 to 670. did you have prior guidance and is that below? >> here we have to talk about the accounting treatment of what we call in process r&d. we make acquisitions, the new rules are we put those through the income statement, we don't capitalize them. so in this quarter, you have about $3 billion of capitalized in process r&d. this is essentially the future value of business development deals we have done and we have five we're announcing in this quarter alone and there will be more because we have announced two more this quarter with point

and beam. so, that's -- i think if you take that away, joe, you look at the top line, core revenue, and not including business development, is about 24% growth. margin looks a little better at the gross margin line. we're spending a little more in r&d than we thought, but that's because we see great promise in the medicines in our pipeline. >> how much -- not saying there is any excitement or fluff in this stock, but how much of this is the weight loss, mounjaro. mounjaro results were above expectations too. this has -- i saw krispy kreme doe doughnuts is worried about its outlook because of the weight loss drugs. >> i heard that. i'm not going to speculate on those things. people who are using mounjaro are now using it for type 2 diabetes. we have an application on review at the fda. we expect action on this quarter for obesity and when they're on their medication. we know people do eat less. that's how you lose so much weight and in our studies,

reminder, people lost on average 48 pounds of weight in a little over a year. that's a life changing and health changing event for people. so we're focused on getting that application out. the mounjaro sales in q3 were mostly in diabetes. and i think beat expectations and had a really strong quarter for us. so, excited about that upcoming approval, we hope here in q4. >> do you have -- is there news this morning about your alzheimer's drug? >> yeah, there is. you may recall we had submitted that under priority review process, exaccelerated approval back in january. the fda said, let's wait. when you submit under regular approval, want to make sure about the safety. we did that in q2 and then they recently asked us for a short extension on that to get through all the data. it is a big package, one of the biggest ones we ever submitted. we now expect approval in q1 for

that. but no concerns about that. it is more the procedures taking a little longer from their end. >> is that a -- would you say that's a big lever for the stock at this point? is it trade based on that or mounjaro? >> i think a lot of the news is about mounjaro and we have half a dozen other weight loss drugs, including one in phase three that could have as much as 30% weight loss in obese individuals. so, you know, we're a serial innovator in obesity. we're also a neuroscience company. and there is no revenue behind alzheimer's, but it is a huge problem in society, and our candidate has shown to slow the disease by 35%. and in earliest patients, people who are just beginning to see symptoms as much as 60%, so, you know, that's a breakthrough and we're excited to get that to patients too. >> so, just trying to figure out

who was around when a lot of these things were in development, you obviously have been a key driver of certain things, but lickliter, did he begin some of the projects? he was there for eight years, wasn't he, for ceo? >> eight years. sidney before him, ten years. i've been with the company 27 years. we have 39,000 people around the world. we're all working to make great medicines and make the company more valuable. i worked with all those gentlemen and i'm lucky enough to lead the company now and there is people who work with me who are also responsible for a huge part of this success. so -- >> what do you lose next year in terms of exclusivity. >> that's a big part of our story too. we don't have patent losses for the next three or four years. i think our next one will be a partner product called jardiance. >> $1.7 billion in quarter for

trulicity. >> that's for diabetes. that's three or four years from now. we have others like mounjaro, ggg, others coming that will offset that loss and then some. so i think we have a great outlook for the rest the decade. we expect strong growth and with that growth we want to invest in both business development opportunities like we saw this quarter, five new deals of small size but making medicines for the future that could be really impactful, and then in our own p&l, our midrange is $9 billion in r&d this year. i think investors should read that as huge excitement for the lilly portfolio of the future. >> more than coincidence that you're the most valuable drug company and novo nordisk is second. both have these obese -- it is -- it is a major problem, and obviously it is going to be a lucrative franchise for both of you. but i would think eventually

that whoever can handle alzheimer's, that maybe that company would be the most valuable, that could be a trillion dollar market opportunity. >> yeah, in other forms of dementia and brain disease, right? brain is the last frontier of understanding biology. we're starting to crack that code. and i think the companies that can look at parkinson's, als, these are terrible, terrible conditions, we're working on all of them, so are other companies and that's the value proposition of the industry, go to the next frontier and solve the next problem. and lilly aims to be at the front of that. >> amazing. yeah. how long we have been doing this, go all the way back to i think randall tobias. he you know where he went to school? >> no. >> where did you go? notre dame? >> purdue. >> purdue. >> i went to purdue. >> my parents went there. >> she loves -- >> my cousins. >> she loves purdue.

david ricks, we appreciate your loyalty. always bringing us -- >> thanks for having me on. >> you're welcome. hope to see you next quarter. >> take care. >> okay. coming up, it has been a tough year for target investors as the stock is down 27% so far. coming up, ceo brian cornell talks to becky about state of the business, the consumer, inflation and exclusive interview at 7:30 eastern time. and then doordash popping in the premarket, this after beating expectations. does the company have what it takes to become a delivery powerhouse. jon fortt will weigh in on the topic on this week's "on the other hand" segment. >> announcer: time for today's aflac trivia question. dutch engineer lou oens ttwas the inventor of what item that changed the way we listen to music? the answer when cnbc's "squawk box" continues. gaaaaap! did you just say gap?! he's talking about expenses health insurance doesn't cover. good thing coach prime knows about...say it one time!

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welcome back to "squawk box," everybody. another move in the battle for streaming dominance. disney buying comcast's stake in hulu, paying at least $8.6 billion for the third of the streaming service that it didn't already own. that initial payment is due before december 1st. negotiations will continue to determine the full value of hulu and any additional payments to comcast. disney acquired majority control of hulu back in 2019 when it purchased fox entertainment assets. the service has nearly 50 million subscribers and this is something we have known was probably coming for quite a while. >> those are $81, multiyear lows on -- close to them anyway on disney. still to come, brian cornell on the state of the consumer and much more in an exclusive interview that you don't want to miss. then later, senator jerry moran joins us to talk about the biden administration plan toen sd aid to ukraine and israel. from the great state of kansas.

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target ceo brian cornell sat down for his first television interview since march to talk about some of the challenges facing the retailer. everything from the backlash around pride month merchandise and messaging to the crunch that consumers are still feeling from high inflation. we started with what cornell learns from shoppers' behavior. >> they're managing that budget really carefully. and it certainly is pressuring discretionary spending. >> they're buying less stuff. >> they're buying less stuff. even within food and beverage. we look at overall retail spending, just look at the top line and say, really healthy consumer and they are spending, but even in food and beverage categories, over the last few quarters, the units, the number of items they're buying has been declining. so, they're even tightening up their spending in those categories. in discretionary goods, we have seen seven consecutive quarters

of both dollars and units declining. so you're buying less apparel, less items for your home, fewer toys, you're seeing some of the pressure in those categories, those cycles are going to clank a change and you've been reporting on categories like toys, significant declines, but the other trend we're seeing and we have seen really for several years now is the american consumer is enjoying those seasonal moments. halloween or the summer moments going back to mother's day and father's day, they're still enjoying those moments and they keep looking for newness. >> what you're describing of sales of goods being down seven quarters in a row, that's goods recession. we see places in our economy where things look great. the gdp came back up 4.9% for the third quarter. but what you're describing sounds like a recession in certain areas of the economy. >> i think it is really fair.

i think it is why it is so important not just to look at the top line, but to double click and sway what is happenin in different categories what is the pressure of the last three or four years of rising costs to how americans are budgeting each and every week and what are they trading off? for seven quarters, they're buying fewer discretionary items. and they're not buying the goods they were during the pandemic. now, that will change over time. and we're certainly planning conservatively in those categories. >> but your inventory is under much tighter controls and much tougher management than it had been during the pandemic when you guys were basically trying to get your hands on anything you could because consumers were buying anything they could buy. >> we had several years where we were just chasing demand. you and i were meeting during those quarters. we had comps up 10, 15, 20% and driven by americans who were buying all those discretionary items because they were at home. and they were entertaining their families and decorating their

homes and buy things for the outdoors and leaning into toys. well, we fwhu thknew that wasn' to go on forever. we had inventory challenges we had last year and we had a much more conservative approach in planning inventory this year, but we're going to lean into the big seasonal moments and play to win. but we know the consumer is looking for something that is new, looking for affordability, looking for that special item for the holiday season. >> let's talk about something that you have been on the forefront. theft. when it comes to the stores. you can call this shrinkage, whatever it is. but what it is is organized criminal theft rings that are coming through. this is affecting every retailer. i think $112 billion that it was assumed -- >> that's the number. >> but you've been -- i think the most vocal -- the most vocal critic of what is happening and saying that something needs to be done. we walk around the stores and you'll see there are now signs that say you can't check out more than ten items. you see some items locked behind

glass and you have it wave your hand over it to bring someone over to get things open. you've taken a lot of steps to combat this. where does the problem stand right now? >> we felt the need to use our voice to elevate awareness around this topic. at both the national level and the state level and the local level. and sitting here today, i feel really good about the progress being made. big thanks to matt shay, brian dodge, we have elevated the conversation. and i think we're starting to see real progress. the inform act which was passed earlier this year will make it much more difficult for these groups to monetize the goods that they're stealing by putting more focus on identifying yourself before you can sell in the marketplace. we're really pleased with how some of the local d.a.s responded. and our teams and other retail teams have been walking in stores with local d.a.s to make sure they better understand the challenges we're facing. >> d.a.s who weren't necessarily

prosecuting the crimes before? >> in the past. >> this is left up to them to say you got to prosecute these things. >> and make sure they understand the challenge. we talked about the overall financial impact, and you used the latest nrf number. it is a significant issue. but beyond the financial impact, i think there is a societal impact here. so, you look at certain cities, where stores have been closing, those jobs go away, the tax dollars are gone, but importantly that local consumer doesn't have access to the goods that they need. so, that impacts everyone in that community. and i think as we educated at the federal, state and local level, here is the true impact. yes, it is a financial issue. there is also a safety issue for our teams and the shoppers who are in a retail store, when these gangs come in. but we're building awareness. >> it is not just your voice. you've taken action and i realize you're closing and

opening stores all the time, but you made a move earlier this year to say you were going to close nine stores in urban areas to say we're closing these stores because we can't deal with the shoplifting and the theft that is going on here. and we don't feel like it is a safe place for our employees. that was a move you said you didn't want to make, but you were very vocal about doing it at the time and picking those stores. why those stores? what happened there? >> they were stores where we made big investments in additional asset protection, working with third party security, we used other devices to try to control theft. but we closed those stores because we deemed it wasn't safe for our teams to continue to operate in those environments. and it is really hard to make a decision to close a store. we like to open stores. we opened up 20 new stores this year. we like to be opening stores and expanding our presence. but when we're not seeing the progress, when other stores are closing around us, and our teams don't feel safe, we had no choice but to say these are stores we're going to close.

and we're going to make sure we highlight the reasons why, but we don't have any plans to close additional stores this year. >> let's talk about an issue that we have not discussed in an interview since the backlash that came through following the pride activities. what was happening in the store from a merchandising perspective, messaging perspective. there was a huge backlash against target. what happened? can you lay it out? you and i haven't had a real conversation about this yet. >> well, why don't we step back? so, this is my tenth holiday season at target. you and i have been talking almost every quarter during those ten years. and, you know, i've seen natural disasters, we have seen the impact of covid leading to the pandemic, some of the violence that took place after george floyd's murder. but i would tell you, becky, what i saw back in may is the first time since i've been in this job where i had store team

members saying it is not safe to come to work. >> what was happening to them? >> very aggressive behavior at store level. lots of threats. product being destroyed, point of sale being disrupted. and when we started to hear that, we knew we had to take action. we had to prioritize the safety of our teams. and i knew personally this was not going to be well received. we had to prioritize the safety of the team. and we made some changes. the locational product, we curated the assortment, we addressed some of the products we're getting the most attention. >> when you say safety of the team, and aggressive behavior, what were some of the examples of this? these are people who did not like that you had pride merchandise that was out and they came in and said what? >> well, they were very, again, aggressive with our team members. >> doing what? >> yelling at them. they threatened to light product on fire. >> in the store?

>> in the store. so, you know, very aggressive behavior. we have been celebrating heritage moments, like pride, for over a decade now. we have never seen that kind of response. >> let me just tell you from the outside, for somebody who is not here, people said, look, there are bathing suits that are transgender bathing suits being targeted and marketed to kids, there is a guy who you're working with, a designer, who, you know, i don't know, was a devil worshiper. what would you say back to some of those criticisms? >> you and i both know those weren't true. but in the moment, we said the best thing for us to do is address the issue, we can't combat each and every statement being made and do the right thing for our team, take the learning as we go forward, but it was a difficult time. but in the environment we said, look, let's focus on de-e de-escalating the issue, taking care of our team, celebrating the moment, and take the learning as we go forward. and we talked during our recent

earnings call. we'll manage these moments very differently. these heritage moments, whether it is pride or hispanic heritage or black history, we'll time them differently. >> let me just ask, though, and i know you're in a quiet period and can't say specifically, but bud light, we know the sales have not come back to budweiser for a lot of those things. you to feel like you have weathered the storm and how much of the concern you see in consumer do you think is related to this, how much is that was a moment and we're through it? >> yeah, one i think it is a moment and we're through it. if you look at our most recent results, and we talked about the fact there is a lot of different variables. how consumers are spending, the tightening of their wallets, the change in discretionary spending, last year we were overlapping a lot of inconinventory actions, promotional actions. it is hard to tease out the impact. but when we talk to guests which we do all the time, when we get up now and start walking around,

there are guests shopping in this building that are going to say i love target. and target is my happy place. and our focus on making sure each time you shop, this is that happy place, you come in for great inspiration, ease, convenience, that great interaction with our teams, and that's going to be our focus going forward. >> what is your message to wall street because the stock has been under pressure, if you look back for the year to date, if you look at the one-year, it has been a dropdown since i think around 180, $181. what do you say to wall street because you dealt with the inventory situation, got that under control, we're ready to go. you've had some other hurdles along the way. now what's the message. i read analyst notes, they're pretty cautious. >> well, it starts with playing the long game. and i think we got a very unique strategy. we have almost 2,000 great stores we run each and every day. we have this unique set of fulfillment capabilities, whether it is pick up or driveup or delivering to your home. we're continuing to invest in our business.

we have 450,000 team members that are dedicated to providing great service. we're going to continue to play the long game, make the investments in our business. these cycles will change. i wish i could tell you when. but i know consumers are going to come back and start buying new apparel, they're going to start investing in their home again. they'll be looking for new kitchen appliances, they are going to buy toys during the holiday and i think we're so well positioned now as a $100 billion company that made big investments that long-term i know that we're going to be one of the winners in retrail. >> does the stock price frustrate you? >> i look at it from time to time, probably every day, and i think it just shows there is lots of upside, but we have to prove our way there. quarter after quarter, consistently executing, running our business, i think if we do those things and we take care of our team, we'll be in a much better position, 12, 24 months from now. >> part of what cornell spoke about is the changes they're going to take with pride month in the future. they say they are not going to

be putting out the merchandise as early. they put out a lot of that merchandise in the beginning of may for pride month that starts in june. they said next year that will start on june 1st, they have product out there. i think brian cornell thinks they were targeted in part because they were one of the very first retailers to put out merchandise, not only put it out early, but put it out at the front of the store. he said they'll move it back. these are lessons they have taken away from what they have learned this time around and this company doesn't want to be in the middle of any sort of a culture war. you can hear more from our conversation as part of cnbc's evolve global summit coming later today. there is still time to register for the virtual event and hear from a number of business leaders. just scan the qr code to register or visit cnbcevents.com/evolve. >> i think it is so -- i'll say one thing. i think it is so terrible this company and other companies have been held hostage effectively by an extreme group of americans, that's what they are, that have -- that would come into a

store, claim they're going to burn something, scream at the people. i know there are people who disagree with lots of things in the country. i think what happened here that is so horrific, talk about marginalized people, anti-semitism in america, what is happening here, the idea that people actually can't stand up to this, and have any kind of backbone, i'm glad they're going to continue to sell some product, but the idea that they're so scared that people are going to -- that there is going to be some fringe element that is going to announce there is a problem and they're going to get targeted and we have seen this now happen repeatedly. it is a small group of people that are targeting folks. it is not most of america. most of america does not think that these -- these are bigoted people who have these views. >> huge part of the problem, though, is he has 18, 19, 20, 21-year-olds working there and he says we can't take this anymore. >> what do you think happened with bud light? how many people do you think -- to have sales go down 40%, you think that's a small group of terrible bigoted people? >> i think that what -- i think in that instance there was an

extreme -- these are organized campaigns by people who have relatively -- i -- look every company in america is susceptible to this at any moment in an age of social media when some group of people decides they don't like something and they are going to try to create a movement, if you will. and i don't believe that every single person who participates in these things is a full-on bigot, but i do think that what happens is you have a group of people where this starts, where the goal is to marginalize people. that's what we have seen over and over and over again. >> the problem was there were threats that came after target after they made -- >> i accept that -- the threats continued. and why do we as a country -- >> they came from both sides. >> invariably but that happens -- it is always going to happen. there is always going to be people -- so this idea everybody has to play -- not play it safe, but pretend this is okay, that's the -- that's the part i think is actually so troubling.

>> there were reports at the time and brian cornell said he didn't know who the bomb threats came from when i asked him about this. there were bomb threats against them when they took the step of saying we're going to remove some of the merchandise and put it back further. then there were bomb threats that came into some stores. he says, again, he doesn't know who it was, but "the wall street journal" and others reported that these were people who were angry about them taking those steps to remove some of it too. none of these companies want their people to be on the forefront of fighting these battles and being in a situation where they don't feel safe. you're right. it is horrific. >> situations happen. but when you see how they happen, and i have no idea about the bomb threats and who is doing what, but my only point is these are starting from one side of the -- >> it all goes back to -- you always want corporations to take a stand. it all goes back to michael jordan. republicans buy sneakers too. stay out of it. stay out of culture issues.

whether it is abortion, whether it is this or that. >> what is so wrong about -- >> you're pointing at me. >> if you look at nike, if you look at nike, they have taken an approach that is arguably the most socially progressive across the board on every issue, whether colin kaepernick on down, and they have done that successfully. >> they had their issues with that too. >> no, but they leaned into it and they succeeded on the other end because the truth is what they have always said is that their -- not their customer, but their brand is about athletes. it is about athletes. and by the way, all the customers are not athletes. people are walking around in nikes, they're walking, not running, they're not athletes. but it is central to who they are and they have a core and mission and moral code and all i'm saying is that there are too many companies right now that are susceptible to this -- too this extreme views which are --

which are what they are. >> it is not an extreme view to not appreciate someone who wears socks with pigs on them that are policemen. i didn't like that. i'm sorry. for me, i didn't like that. there are certain things about colin kaepernick kneeling and i have a right to have a problem and i have a right to not buy nike products. >> nobody is saying you can't buy nike products. you can buy what you want. it is unclear to me that a ceo should -- >> that's where you stand on all op he ffinsu. peleavdierg viewpoints and they're allowed to have them and they're not bigots if they have them. >> they're totally allowed -- >> they're not bigots if they -- >> i think those going into stores and threatening employees -- ♪ ♪ be ready for any market with a liquid etf. get in and out with dia.

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welcome back to "squawk box." doordash shares trading higher after beating quarterly expectations. can they become a growth powerhouse or is growth about to hit a wall? jon fortt has more. >> the concession was people would kick the delivery habit and people would make food at home, but that's not happening. last quarter, orders rose 24% year over year, so did customer spending. despite signs of consumers running out of stream, doordash expects another strong quarter of growth with $17 billion worth of orders and record operating profit. this is not growth about u.s. restaurants. doordash is expanding into

international markets, convenience and grocery. the non-restaurant business is more than 100,000 stores and doordash is operating in 27 countries outside the u.s. investors should think of it this way. doordash's superpower is high frequency delivery of lightweight items. doordash's combination of category expansion, operational discipline and product improvement is moving ahead of the pack. >> so, big question, what happens if consumers spending really takes a hit? isn't that door dash's whole business? it's discretionary. it's a discretionary business. >> well, on the other hand, doordash's growth is bound to hit a wall soon, though it's done a good job expanding. the core business is still restaurant delivery. that's highly discretionary in a u.s. economy where inflation and high interest rates are tightening a vice on consumers who continue to spend thanks to high employment levels and debt balances. that vice is about to get

painful. over the next few months, the accumulating effect of higher living costs and student loan payments will combine with lower spending power from ballooning credit card balances and a softening labor market. don't get me wrong, doordash has an impressive business model, it's just likely to slow down for a while when the consumer finally cries uncle. we're seeing the economic stress fractures this season where cost discipline is driving upside far more than top line growth is. labor deals and rising wages are taking away those operating levers as demand is taking another leg down. in january, that will probably force companies to cut workers after a tepid holiday season and there will be less eating out. >> like mcdonald's was exactly -- their revenue rose exactly the amount of the price increase. i don't think they sold one extra thing. >> with credit card balances increasing, they have to do that. we already had the argument,

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the markets are in the green following the fed meeting. will the bulls run the rest of the year? and earnings all over the place from eli lilly, poleton, starbucks and more. and lawmakers wrangling over providing billions of aid to israel, ukraine and border security. a member of the appropriations committee will be our special guest. final hour of "squawk box" begins right now. ♪ good morning. welcome back to "squawk box" on cnbc live from the nasdaq market site in times square. i'm joe kernen along with becky quick and andrew ross sorkin. u.s. equity futures are green adding to some of the grains that we saw yesterday following the comments from jay powell where just a hint that it could

be the -- we may have seen the last increase. i think it was construed as somewhat dovish. we got a 4.70 ten-year all of a sudden. yesterday things were in sync. bitcoin moved higher as well. also we got oil at $80. maybe we're seeing a few signs that the fed has been successful in terms of both inflation and perhaps in cooling things off a bit in the overall economy. let's get over to dom chu, he has the stock movers. what's at the top of your list? >> all right. so we have some of the earnings stories driving the pre-market action so far this morning. if you look -- we'll start with shares of eli lilly, down fractionally. maybe just about flat. 70,000 shares of volume. the pharmaceutical giant expected better-than-expected revenues, and lilly was helped by stronger performance from its

diabetes drug. on the negative side, lilly cut its full-year profit guidance due to charges in recent m&a activity. those shares down about a quarter of a percent. starbucks up about 7.5%. the coffee giant reporting better-than-expected profits and revenues helped by better sales growth at established restaurant locations around the world, but especially in north america and the domestic u.s. starbucks saw customers spend more on average per visit and saw an increase in overall traffic at its cafes. starbucks shares up 7.5. ending on qualcomm, up 5.6% at this point. around 175,000 shares of volume after the semiconductor company

exte showed better-than-expected profits, perhaps showing the chips used in smartphones indicates better smartphone trends and smartphone sales going forward. joe, those qualcomm shares getting a lot of attention. a lot of traders and investors like using those semiconductor companies as possible leading indicators for the rest of the tech trade. we'll see what happens with that. >> a risk-on trade. thanks. steve iseman is a portfolio manager at neuberger berman. you said no, do not invest in banks. what i interpreted that to mean is that credit conditions were tightening even though the fed had not made any moves recently. we saw the ten-year move up above 5% in the absence of any fed hikes. which is sort of the market doing the work for the fed.

is that true? >> kind of. >> okay. >> i said many times the banks right now are uninvestable for three reasons, they're losing deposits. interest margins are going down. loan growth is tepid at best. and regulators have raised capital requirements again and that's not even hit returns and it won't hit returns until sometime next year or the year after. we have not had a credit sky cal yet. >> does this all indicate to you that it's only a matter of time before something else breaks? like six months ago or whenever that was, is that on the horizon? >> look, if i knew it would break, i would tell you. >> does jay powell think it's possible? >> i think the most interesting part of this earnings season was comparing visa to trans union. visa showed the consumer is still spending, didn't beat volume, didn't miss volume. it was exactly in line.

so the consumer in terms of his or her spending is fine. trans union came on and basically said that loan volume on the consumer side has collapsed. that the bank tightening, the higher rates have caused -- is causing loan volume really to go down a lot. the fact that trans union was down 25% in one day is shocking that a company like that could be down that much. that hasn't hit the economy yet. the yin and yang is that the consumer is still healthy but they can't spend money on big ticket items because they can't borrow, so maybe that's why starbucks was so good. they're spending it on coffee. >> what i'm hearing, if loan growth slows, it's not necessarily because demand is slowing with people who want loans, it could be that deposits have fled -- >> the banks are tightening and you're not buying a house at an 8% mortgage because you can't afford it.

>> in that case, it is -- >> part of the economy that is the most worrisome right now is anything that's a large ticket that the consumer needs to buy. house, auto, solar panel, et cetera. everything else seems to be doing okay. >> when we try to -- we've also heard and had discussions today about coincident versus leading indicators versus the rearview mirror that the fed uses. do you think the fed is trying to look ahead now and finally trying to anticipate rather than react? >> yes, i do. but i listen to powell's press conference, i think he's just as confused by the different data points as everybody else. maybe that's why he wants to pause, he doesn't know what to do. >> will there be another hike? >> no idea. what would you do? >> i'd wait. see what the data says. you already raised rates so much, another 25 basis points from here is not meaningful. it's more messaging. >> are you expecting that a year

from now he'll be lowering rates? >> no, i don't think we'll -- unless we have a bad recession, i don't think we'll see the fed lower rates. i think powell is still petrified of volcker and what happened in the '80s. >> those people that say buy bonds now, buy ten-years, you don't think that's the case? >> i think it's way too early to make that prediction. >> you think he's terrified of what happened to volcker and he lowered rates -- >> and reinflation resurged. that would be the worst possible outcome for the country and his reputation. i think he lives in more fear of that than recession. >> couldn't you start buying banks now? they have come down a lot, right? still don't touch them? >> one thing i learned in my career over the years is buying something because it's cheap is a value trap. shorting something because it's expensive is a death wish.

yes, the banks are cheap by any metric, so what. the opposite of love is not hate, it's indifference. right now, people are indifferent to banks. maybe that's a good sign to buy them if you have a long-term time horizon. the thing that bothers me the most is that returns will go down because of the increase in capital requirements. what's the rush? >> is there anything to you that indicates that we avoid a recession or go into the a recession the next year? >> right now, i'm still surprised by how strong the economy is given how much rates have gone up. i'm not willing to make any bet that we're going to go -- >> kaplan is on later today, isn't he? >> yeah. >> kaplan, former dallas -- >> i know him personally. >> i had an awakening when he said we're spending a lot of money fiscally. as long as we're doing that, the economy will not slow. is that -- >> he could be right. >> that's part of it. >> the fiscal stimulus from all

the infrastructure stuff has not even hit. it's not going to happen until next year. >> before you go, i wanted to pivot the conversation one second, i know you're a major benefactor to the university of pennsylvania -- >> i wouldn't say major. >> you're a significant benefactor to the university of pennsylvania, i believe you got involved in this larger debate about what's happening at universities right now. >> yes. >> what's going on? >> your interview with mark rowen woke me up a bit. my history with the university of pennsylvania is pretty deep. i went there, my wife went there, we met there. my sister went there, my brother-in-law went there and met there. a lot of members of my family have been there. i've gone back to the university many times to speak. after -- after the interview, i called my contact person at the university and i said, you know, we have a small scholarship that we created about a dozen years ago. i called my contact and i said i

wanted our names removed from it immediately. i do not want my family's name associated with the university of pennsylvania ever. >> what was the response? >> she was very nice. she understood. she's gotten a lot of calls like that. she said she would take care of it. >> is there anything they could do to change your mind? >> yeah, fire the president and the chairman of the board of trustees immediately. >> i believe they're having a board meeting today. >> i doubt they'll do anything. that's the only thing that would even move me at all. >> go ahead. >> i mean, this is something that's played out again and again. larry summers pointed to a leader that came to the association of university heads of israel today with a long letter they have out talking about how there should be no moral equivalency when you look at a nation defending itself versus terrorist attacks that come through. >> let me say one thing, one of the things that the protesters are saying -- one of the things i really sincerely believe is

when people tell you who they are, you should believe them. the protesters -- their slogan is free palestine from the river to the sea. the river is the jordan river, and the sea is the mediterranean. free palestine from the river to the sea means get rid of all the jews. you know, the nazis had a different way of saying it. no jews. what we have in the protesters right now is dressed up in the clothing of progressivism is pure hatred of goos. any -- my view is any student who holds up a sign that says free palestine from the river to the sea should be expelled. that's not free speech. that's calling for murder. >> i agree. totally. thank you. >> thank you. >> steve, thank you. when we come back, a lot more on "squawk box." lawmakers going back and forth over billions of dollars in aid to israel, ukraine and border security. senator jerry moran is drafting

ouplan on where that money shld go. we'll get his perspective next.

an aid package to israel but the

bill is caught up in a debate over how to pay for it emily wilkins has more on that front. what's happening? >> the house is planning to vote today on spending 14.3 billion in support to israel in its war with hamas. but the funds, no surprise in d.c., have gotten caught up in politics. the house bill as proposed would not include any aid to ukraine, taiwan or to the southern border like the white house requested. and the house bill has been deemed on arrival in the senate, it's not just the democrats that have an issue with it, republicans including senator lindsey graham have raised concerns with the house bill. >> i see ukraine as part of a greater struggle because if you let putin invade ukraine and dismember a sovereign nation, he will not stop there. >> in addition, speaker mike johnson is taking the unusual step of offsetting emergency aid by cutting 14.3 billion from the

irs. specifically from that 80 billion that was given to the agency under president biden's signature tax, environment and health bill that passed last year. even though that's a cut, the move is actually expected to increase the deficit by 12.5 billion. remember, this is because that funding was supposed to go after tax evaders and ultimately bring in more revenue. some issues are lingering there with that bill. even if it does wind up passing the house today, it clearly has a long way to go before israel might see any actual aid. guys? >> emily, thank you for that. it's fascinating. we'll continue this conversation right now. joining us to talk about the aid packages going around the hill is senator jerry moran, a member of the senate appropriations committee which is drafting its own israel, ukraine and border supplemental. given what we just heard and the debate happening on the hill, what do you think the chances are that one of these bills gets

support? >> i certainly consider it part of my responsibility to see that i do everything i can to see that aid bill does pass. i think americans should know, members of congress should know we're in a challenging time in this world. our national security is hugely important. it's our primary responsibility as a congress, as a federal government to defend the nation. i look forward to making sure we put a package together, different than what the white house sent to us. in fact, i asked for the hearings that we had this past week and will have again on tuesday so that we could consider that congress could do its job. the appropriations committee could do its work to make sure we get a bill as good as we can get and will pass both the house and the senate. this is important. our nation's future, our freedoms and liberties are at stake. i think this is one of the most consequential votes me and my colleagues will have to address.

>> can you speak to the bill that mike johnson put together as it relates to its support for israel, but it's effective defunding of the irs and that score that says you're going to be bringing in less money, not more. >> well, congress has overspent, the president has proposed way too much spending over a long period of time. it's not going to be solved in this bill, and if there are offsets that make sense, they ought to be reserved for our normal spending process so that we pay for the things that are occurring in an annual appropriations process and not now at the moment in which, again, our country's future is at stake, our role in the world is determined and if that's a good offset, save it for all the other things that we could offset at a later date. my best guess is that if a bill does come from the house, that it will be replaced, there will be a motion to amend, to substitute, and a senate version

of the bill will be -- will replace the bill that comes from the house and our bill will be much more all-encompassing. at the moment, the issue that we're most directly involved in is making sure that there are policy changes at our border, particularly our southern border, not only just resources but to make sure the actual laws change so we don't have the continual demand for people to cross our border illegally. all this needs to go together with the package that includes ukraine and certainly replenishing our own military supplies here as well as strong support for israel. >> senator, that's the big question. how clean, if you will, do these bills need to be to get the support? some people looked at connecting the irs issue and israel as something that was being conflated or taken advantage of. then the question of putting ukraine and israel together. and if you add immigration, you

could make an immigration argument around safety in the united states. maybe that actually makes sense. how do you see that -- those sort of lines in this debate? >> my view is that there will be, can be more than 60 votes in the united states senate for a package that includes all those things. i would say that border security that you mentioned specifically, it is a national security issue. it's also an opportunity for the politics to come together to get the 60 votes in the senate and potentially pass in the house of representatives. so the border issue has national security importance. the border issue also has political opportunities for more republicans in particular to vote for this piece of legislation, this appropriation bill. and i'm of the view that we are facing a challenge. we should not walk away from ukraine. republican colleagues including me criticized the biden administration for the way they came out of afghanistan and the message that it sent to our adversaries, messages it sent to

our friends that we're not -- that we're not committed, that we're not faithful. boy, not doing something for ukraine now and quickly along with israel sends a message to the world that the united states can't be trusted. >> senator, do you think there's going to be a new conversation after all this -- i don't know when after all this happens or what that means -- about entitlements, about spending on a broader level? we as a country seem to go from crisis to crisis to crisis to crisis. we never budget for a crisis of any sort. then we spend because we feel we have to. we don't seem to find a way to offset that spending and that conversation always seems to get kicked down the road. >> my role as an appropriator involves about 30% of what we spend as a federal government. and pleasing to me, we reduced this year's spending, fy24 is less than fy23.

so we're bending the curve, we're headed in the right direction. the reality is as you say it, until we deal with entitlement spending, mandatory spending, which is the other 70% of what the federal government spends, it's impossible to solve our budget deficit problems. we talk about national security. a strong economy with a more balanced set of books is a component of our national safety. our ability to play in the world, to defend the world and our western values. it is important. it takes leadership, it takes a white house, it takes a president and leaders of congress who are willing to put in the time and effort to explain to the american people why those issues must be addressed and must be addressed sooner rather than later. >> senator, ultimately to solve the debt and deficit, we'll have to lower our costs in some meaningful way, but we'll have to raise some form of revenue. where do you stand on the idea of defunding, if you will -- i don't know if that's the appropriate word -- the irs as it relates to what mike johnson

was saying, even if that's a separate issue in terms of how that's looked at later? >> my view is that irs employees are important to collect taxes, but we want to make sure -- it's not necessarily the number of employees, it's what the employees are doing. if they're out there searching in a political way, as we've seen evidenced in some past administrations, in which they're looking for an opportunity to attack someone and their taxes because of their political contributions or views, that is absolutely off limits. >> absolutely. i think it's hard to disagree with that. the question is is there a way to have enough folks in the irs to collect what we're properly due without a critical overtone. >> senator, have you heard the expression, show me a man, i'll show you the crime? that's what i worry about. if you get 80,000 of those guys, they'll be done with the billionaires quickly. then it will be everybody else. they'll find something.

>> we can't have too many reasons to justify their existence. >> you know who said that, the head of the soviet secret police. show me a man, i'll show you the crime. we don't want that. >> appreciate having you. "squawk" is coming right back after this.

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welcome back to "squawk

box." rick santelli here live on cmehq awaiting some of the early breaking news of the morning. initial and continuing claims, 217,000 on initial claims. a little higher than expected. last week, 210,000 gets advised to 212,000. continuing claims popped over 1.8 million. 1.8 million. we expected it actually to be around 1.8 million. in the rearview mirror, a subtle revision from 1.7 million to 1.783 million. the last time we popped our head over 1.8 million you have to go back to -- let's see. you have to go back to the last week in april. the last week in april of this year. now, let's look at nonfarm productivity. up 4.7%. much better than expected. that's the best since q3 of

2020. these are third quarter preliminary numbers. so, indeed, we will get several revisions and there is usually a lot of room for revisions. now, if we look at the associated unit labor costs, we're expecting up 0.3%, but considering productivity did so much better, the drop turns up being down 0.8. that would comp to the last quarter of '22 when we were down 2.2%. if we take this all in stride, we know productivity is the special sauce, aka alan greenspan back in the '90s. indeed it is. one thing i would caution, if you look at some of the economic output numbers, if we're just considering gdp a whisker under 5%, many would say maybe there's not exactly a big degree of accuracy there. maybe there's some seasonality issues.

maybe there's an overhang of other issues. if the output becomes exaggerated, it distorts productivity a bit. keep in mind as the output in the u.s. economy comes down from levels, it doesn't seem to be cooking in the grease that we see in some of those numbers in the rearview mirror, that will have a direct effect on productivity. interest rates have moved down steadily over the last couple of hours. weight now we're at the lowest intraday levels in a ten-year note yield hovering around 4.67% since the 16th of october. and on the 23rd which was a monday, we had an outside session. that was the day, the only day we had that violation above 5%. point of the story is outside days mean trend change, it's worked like a charm. joe, back to you. >> rick, you ended up paying off our next guy i'll intro right now. in my view, you were still

right, kind of. wasn't your -- you said that we wouldn't get another hike, i think, or you said the highs were in or something. then the market took us to new highs on -- but you -- this happened to me with el-erian. i told him we wouldn't go near the october low. it was 3,600, it went to 3,595 for two minutes. i had to pay off because we breached that. it's the same thing happening with you, didn't it? you were right. liesman was wrong, in my view. >> well, listen, liesman definitely had the opportunity to enjoy some delicious cheeseburgers and indeed, i did say there would be no more hikes, there was one more. i understand the thought process you're going through. i do agree. >> let's see what steve says. i knew he was coming up. steve, you kind of -- i don't know. you had to feel a little guilty about accepting those burgers.

>> i realished every bite of every cheeseburger i ate. and we passed them out to the office. i wish i could show you some pictures. rick made a lot of people happy. rick santelli is a man of his word. a man who doesn't change the rules midstream, when he loses a bet he pays up. he bought like 100 cheeseburgers for the newsroom. you, joe, i don't know what to think about you. you change the rules. you lose, you won't -- joe -- take a loss. >> now you're -- now you're wrong. you know that i took el-erian -- >> take a loss, joe. >> i took el-erian to the jets game and he met joe namath. >> that is pretty good. i got cheeseburgers. >> i'll show you a picture of el-erian with joe namath. >> i think el-erian got a better deal. >> i know. >> i didn't pay austin

goldstein. >> can we talk real quickly. this unit labor cost number is jumping off the page at me. if i'm powell, i think i'm happy about that. that's part of the thesis of why you can be on hold. i think rick should be a little more excited on the bond market. i think what's interesting is the market woke up this morning and didn't regret, like when we were in high school, what we had done the night before, right? they confirmed or affirmed what they did both in the stock and the bond market. and there are guys out there, gunlock who suggested with wapner yesterday that suggested maybe this is the beginning of a rally which is a clairia call f takers to go in and look at the long end which has been so shunned across the spectrum and maybe there's gains to be had

there. i will point out, rick had that top there on the ten-year and he was right about that. i know he thinks longer term they may go higher, but short-term -- i'll let it sit there. the idea that we hit that 5 point, we saw it, it went away, now we're back down to 4.67 right now and we're holding on to the gains of yesterday. while powell tells me the bias is to hike, i think the bias is to stay neutral and the fed has to be convinced to hike. i'll leave it there. >> steve, real quickly. i want to bring up two things. first of all, i think the fed has done a pretty good job of cleaning up their own mess. "a." "b," the other issue is $307 trillion of global debt, a new record that was hit in the first half of 2023. does that figure into any of the fed or your strategy as to are we being a little too myopic about what we're doing with

rates when we have that overhang of debt? just wondering. >> you know, here's what i need to do, rick, i've been trying to do this but treasury hasn't been helpful. we have known for a long time that entitlements would be an issue. we have also known for a long time that deficits would be larger. what i'm super interested in is what do we know now that is new? druckenmiller came on and his numbers are right. but how long have we known stan's numbers? gunlack yesterday talking about trouble with interest. what's new here? i think what's new is the interest expense. i think there's some revenue things we don't know about. i want to try to get to the bottom of what we know that's new. i'm not saying that what we knew was old was comforting, it's not. it's just that there's been a reaction. sometimes the market gets to a point where it realizes what's been around for a long time but also there are new things. it matters to the fed. the fed is watching it. i don't think it changes policy.

>> all i'm hearing is wrap and go straight to break the entire show. meanwhile, rick, 4.67. 4.67. you were right. i would feel guilty about paying -- if i were steve, accepting that bet. got to say good-bye to both of you gentlemen. >> love a cheeseburger. all right. let's bring in former president of the federal reserve bank of dallas, robert kaplan. robert is the co-chair of the draper richards kaplan foundation. let's talk about one thing that rick just said, he said he thinks the fed has done a great job of cleaning up its mess to this point. that is something he's giving them kudos for. you have concern if the fed can clean up the rest of the government's mess at this point. you want to talk about your concern about what the fed is fighting and maybe how the rest of washington keeps creating that problem? >> yeah.

i agree with rick. i think the fed has done a good job. once it reversed course, getting on the right path. the issue is and the challenge that they're dealing with is we're running a very large deficit, in excess of 7% of gdp this last year and probably higher next year. the fact is that accommodative fiscal policy blunts, to some extent, a very restrictive monetary policy. and the reason i think jay powell did the right thing to leave the option open down the road that they may have to do more, i think there's uncertainty about the effect of continuing to run these large deficits and very accommodative fiscal policy. then there are other factors like the fact that we're structurally undersupplied on fossil fuels globally and will that vulnerability turn out to

raise costs also? so, there are issues like that. but, as we move -- as the saga moves away from focus on the fed, i think we should realize the issue with very large supply of treasuries for years to come and potentially having to pay higher rates and certainly higher interest expense at the federal government government level as that debt reprices, that issue will be with us for an extended period of time. >> how long? is there anything the fed can really do about it? what should they be doing? >> well, so it's interesting. the treasury yesterday announced a restructuring in the maturities that they'll offer. they're trying to manage through this. but there's limits to what the fed could do. i would say this -- the federal government is very sensitive to how much longer the fed keeps

rates higher. and i think the fed is going to need to keep rates higher for -- into a meaningful part of 2024. but as they're doing that, the federal government keeps repricing these maturities and we'll go from 620 billion of interest expense into 2023 to, say, 750 in 2024 on our way to a trillion dollars. that's a real structural issue at the federal government level on how do you spend for entitle ent entit entitlements and know the fed can't do a lot about that. when the fed is able to ultimately begin lowering rates over the next couple of years that will give some relief to the federal government, but not until they do that. >> robert, the latest gdp number, the jobs number, it's

been posited that we're the stronger on a relative basis, one of the strongest economies on the planet. the best to come out of covid. we came out most quickly. that makes me happy, i want to believe it. it's a problem for the fed obviously. is it real organic strength in the economy or is it -- you said it last time how much we spend. is this purely a function? eventually you have to pay it back, higher interest rates, and it becomes a problem and you end up behind where you started sometimes. is that what we're doing or are we doing really well? >> we got naturally a strong economy. we have the strongest companies in the world. we have lots of innovation. >> yep. >> but there's a reason whoe've outperformed the rest of the world, we did a large amount of fiscal stimulus and monetary

expansion. the fiscal stimulus continues. the organic growth rate of the u.s. economy is probably lower than it appears. and we probably won't see that until we start moderating some of this fiscal spending. but we should be aware, yes, some of this is artificial. the bond market has been politely or not so politely pointing that out by saying we'll charge you more for the debt because you're running such large deficits. >> do you think that message is being heard in washington? that's not the feeling i get. >> well, it is a sensitive subject. obviously we're heading into an election year. the one thing all this fiscal spending does, it makes it less likely that we're going to have a more material slowdown in the economy. the fed would like a slowing economy. the fiscal spending keeps the economy more resilient. but the fact that you saw

yesterday the treasury very explicitly change the nature of its issuance and the supply and the maturities tells me they're very aware that there's a sensitivity in the bond market for how much supply is coming. >> all right. robert, thank you. i think this is a conversation we'll continue. we'll have a back. >> congrats, too. that was a beatdown, robert. the rangers. >> yeah. coming up on the other side of this, the trial of sam bankman-fried is about to wrap up. his fate about to be in the hands of the jury. and check out shares of p palantir this morning. beating in a big way and raising its sales guidance for the full year. the stock now up 17. aos5,lmt 18% right now in the premarket. "squawk box" coming right back.

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welcome back to "squawk box." look at futures right now. up about 211 points on the dow. nasdaq up about 200 points. s&p 500 up about 38 points. a headline for you, uber and lyft will pay a combined $328 million to settle allegations made by new york's attorney general that they unlawfully withheld wages from drivers and failed to provide mandatory paid sick leave in the state. uber will be paying $290

million, lyft $38 million. driver also receive minimum guaranteed hourly rates and paid sick leave. it is demonstrative of what the market looks like in new york in terms of how big a share uber has relative to lyft, if you just even look at how that settlement broke down. closing arguments in the trial of ftx founder sam bankman-fried is wrapping up, almost done. it will be in the fate of the hands of the jury when they kick off deliberations later today. kate rooney has been covering the trial from the beginning. she joins us now with more. we have the final final closing. >> we'll be on verdict watch as soon as today. yesterday we got two different portraits of sam bankman-fried during closing arguments yesterday. on one side, a secretive villain, on the other side, a naive entrepreneur who had good intent. the prosecution called this case

agreed, fraud and a pyramid of deceit built by the defendant. the assistant u.s. attorney told jurors that sam bankman-fried lied to them on the stand and said he can't recall more than 140 times and evaded questions. they called his of his crimes, saying, "to believe his story, you'd have to ignore the evidence. you'd have to believe the defendant, who graduated from mit and built two multimillion dollar companies was actually clueless." they claimed he gambled with customer funds. bankman-fried's lawyers saying he was acting in good faith. they say it's not a crime to have bad risk management. they told the jury that the collapse of ftx was a lot more nuanced. they said, it's not a movie, and sam is not a villain. bankman-fried got emotional at the ends of those closing

arguments. the government will get their rebuttal this morning. they're going to get the last word before the jury starts deliberation. >> did you find the defense closing, at least thus far, what you have heard, was that compelling? >> the prosecution was tighter. they really were able to lay out this narrative and say, it's simple, guys, and really speak to the jury and say, there are certain facts in this case. what is up for question is whether he knew, whether he had intent. the defense has kind of gone through and said, well, that's not quite the case, and tried to leave room for interpretation and say it's not black and white, there's a lot of nuance, which they're trying to suggest to the jury that there's room for reasonable doubt. >> what time does this get to the jury today? >> i would say noon. they're going to have to read the indictment and jury instructions. it's 60 pages. the judge has to go through line by line, and then they're going to start deliberating. we don't know if they're going

to be in tomorrow. it's supposed to be four-day weeks. there's questions about whether the jury will meet at all tomorrow, in which acase it's going to be monday. >> kate, thank you. >> we could have a verdict watch and a jobs friday converging. >> palaooza. like barbenheimer. >> you know what we're going to say? if it's taking a while, it's going to be, moh my god. >> sbf and bls. >> if you had to bet, if you could bet on draftkings, quick decision or takes a while? >> quick. >> quick and guilty? we really shouldn't say. but you're right. >> i think it will be quick. >> i can't imagine a quick and innocent. >> could be. >> could be. what do you think? you don't want to say. we don't want to say. i'm not saying. >> i would say next week maybe. >> you don't think they'll do it

in a couple hours? >> seems like there's a lot to go through. i think a couple hours would be a surprise. >> they may want to get out before the weekend, but i think that's more likely. >> really? next week? i think this week. >> i've been a jury foreperson. >> how did you get stuck there? >> everybody does. >> look at becky quick. of course she's the foreperson. what are you talking about? >> when we went in, we all had strong ideas. >> how long were you out? >> a week or two. it was in the last ten years. i can't remember exactly when it was, but it was probably -- actually, i think it was since kayla was born, so it was probably in the last six years. >> you're kidding. really? i always find a way to get out of it. you got to act crazy. >> i was shocked. >> it's not hard. >> it is easy. >> i was shocked they kept me because it was an accident case. they asked if i knew anyone who had been in an auto accident, i said, yes, my brother, who had a traumatic brain injury. they didn't care that i was a journalist or that i had a connection, and i wound up as the foreperson. you don't want to look like

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joining us now, cameron dawson from new edge wealth.

cameron, we're looking at 4.60% on the ten-year, 200 points on the dow yesterday, another 200 this morning. i thought he didn't say anything. what did you hear to explain this? >> it was decisively ambiguous, and maybe that is what the market ran with, which is that it wasn't incrementally hawkish, which i guess you could interpret as being somewhat dovish. powell was trying to really thread this needle between saying financial conditions have tightened, that could impact future growth, but then saying that the current state of growth, the current state of the employment market, isn't really consistent with their 2% target, and to say if it stays this way, you could actually see inflation have this uplift. so, trying to really leave the door open as much as possible for december, which just means that because it wasn't fully open for december, wasn't fully hawkish, maybe that's what the market ran with yesterday. >> we had some pullback from the beginning of august in the s&p, and it's weird now that it looks

like it's trying to find a bottom here, down about 9%, up yesterday, up today. it's coinciding with the ten-year backing off a little in yield. it's funny the way things sync up. is this good? is it a good -- you think we're going to continue to go higher in the averages? >> yeah, look, averages got deeply oversold last week at the end of last week while bonds also got oversold. so, a relief rally is certainly possible, and that's what really set the stage for this week because you were coming off of such oversold levels. then, it's a question of what you do when you hit resistance, because one of the things that's happened since the end of july is that we've been in this down trend of lower lows and lower highs. the important resistance level is 4,350 or 4,400. if yields continue to break through their own resistance, about 4.5% or own support at

4.5% for the ten-year, then maybe you could see the s&p 500 break through that all important 4,400 level through the end of the year, but that's the real watch point to see if we get even further upward momentum. >> while you're talking, now 4.63% on the ten-year. what do you expect tomorrow? could all bets be off if it's just a rip-roaring number again like last time, 4.9% gdp? every time something like that happens, it causes the advance to pause and yields to go back up. >> yeah, as long as data remains strong, what it really calls into question is the bond market's pricing of interest rate cuts into next year. one of the interesting things from yesterday is that we actually saw the number of cuts being priced in move higher, so now you have a hundred basis points of cuts priced in. if we remain in a strong gdp world in a tight labor market, that doesn't really seem justified based on the fed's decision framework, which just

means that bonds could continue their selloff if we get better data. >> wow. you're good at tv. you left us 15 seconds. we got to go. thanks, cameron. good to have you on this morning. all right, that does it for us today. make sure you join us right back here tomorrow. have a great day, everybody. right now, it's time for "squawk on the street." ♪ good thursday morning, and welcome to "squawk on the street," i'm sara eisen with jim cramer at post nine of the new york stock exchange. david's on assignment. carl has the morning off. taking a look at futures, the post-powell celebration continues. s&p futures up 38. we are seeing buying across the board. nasdaq also getting a bid, about 200 points, continuing yesterday's afternoon rally. it's actually the fourth consecutive day of gains on the back of lower treasury yields. our road map starts with the fed one day after its rate decision. we'r