tesla bull ron baron it is friday, november 10th, 2023 the sun came up. melissa's here andrew is at the conference. "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc i'm andrew ross sorkin along with joe kernen and melissa lee. i'm live at the 30th annual baron investment conference at lincoln center we will have ron baron on in a moment he will join us and we will talk to him about so many things, including tesla. there is a -- is this true the firstsighting in new york? can i say that the truck. the truck. the cyber truck in new york city

is right outside of here in front of the fountain here in lincoln center we will talk to ron about tesla and that bearish call. i'm curious what he thinks about that we have a number of big ceos which are baron's biggest bets figs and co-star group and the chairman and ceo of choice hotels in the midst of dealmaking in that space all that coming up in the next two hours. melissa. >> i look forward to it, andrew. let's catch you up on the markets and what we did. u.s. equities pointing to a mixed open nasdaq down 22 the s&p looking to add and the dow up 40 points we snapped the eight-day win

st streak yesterday the ten-year yield popped to 4.6% this morning. the two-year yield at 5.026% the bond market spooked the markets and then add the comments from jay powell yesterday. saying there is a long way to go to meet that price stability goal he leaned hawkish and the markets took that cue. let's move on and check on the other asset classes and how they are trading this morning. look at the oil sector if you guys are following me all right. $76. up 1% on wti ice is up 1% as well >> this is interesting i knew there were protesters at jay powell's comments

>> it was climate. he bleeped it. he said shut the bleeping door >> that raises his street cred >> he left the door open for more rate hikes. >> i saw that. i didn't know it was climate >> every single thing has climate protesters now >> they destroy masterpieces from hundreds of years ago from artists. learn from that about that contingent glean something. stocks fell yesterday after jay powell's comments at the imf event. he says central banks are encouraged by the slowing pace of inflation, but not sure they have done enough he said the central bank will continue to move carefully, but

won't hesitate to tighten policy further. the s&p, as a result, or partly, s snapped the eight-day losing streak the dow closed lower powell's comments overshadowed as he was interrupted by pr protesters >> jay powell, refusing to treat climate change -- >> thank you >> you are putting us at risk. >> thank you very much >> climate change will -- >> thank you >> this is a crisis. >> just close the [ bleep ] door >> i love it powell briefly left the stage before resuming. >> that was a real -- i did the disclaimer last night.

that's a real bleep. we bleep random words to think we're sailor's mouth kind of thing. that was his language. colorful language. he probably thought he was off mic. >> never assume you're off mic it is amazing in normal conversation that it is not unusual to hear that word. >> any more. >> just about anybody. my kids now. i don't know i don't f-ing notice any more. bleep, bleep the economy and united kingdom flat lined in the third quarter. no gdp quarterly growth. the uk finance minister said inflation is the single greatest barrier to growth. many are looking at this quarter as the start of the recession in the uk officially.

democratic senator joe manchin of west virginia said he would not run for re-election in 2024 this video posted on x and manchin called the decision not to run one of the toughest of his life it was seen as a major blow to democrats as a deep incumbent to keep the narrow majority past the 2024 election cycle. manchin is not leaving politics saying he may consider a white house bid. before the announcement, manchin joined us on "squawk box" and made the case that the presidential field is still open >> the people haven't been able to speak yet the party, the democrats and republicans, are set on where they are going and who the representative is going to be. the people have not spoken up yet. >> whether manchin is considering a presidential run, the source with knowledge told

nbc news that nothing is off the table. he alluded to something yesterday and said i'm not done. i'll have more on that a little bit later. i was disappointed he could have told us. if you notice, he did it in a video and it looked like a fireside chat from fdr or something. he did a very formal setting, sort of setting up something down the road. >> the fact that he did the fiscal stability act with romney and they had them together and the draft manchin-romney movement must have gone nuts >> romney vp andrew, for a second, i thought you were watching the tree go by on the truck or something. i didn't know. the rockefeller center tree.

i can't believe ron baron -- he has the juice to get the truck there? >> how manyy produced? >> only one right now. only one sighting in new york city i told ron, ron is here. we will come back. this is a tease. we are going to commercial my worry is a lot of people will now come here just to see the cyber truck. there is security in front of here i don't know if you can see it unless you are invited to the conference >> you have to get pictures of that >> we'll get images in a minute. ron baron is here. this is your party and we're going to come back with the leader of the party after. thi this we should mention tesla shares

dropped 5% yesterday after the hsbc analyst call initiating coverage with $146 price target. calling an expensive auto company. i imagine ron has lots of views about. that we get the counterpoint live from the annual baron investmenten cter conference this is live on cnbc >> announcer: this cnbc program is sponsored by truist securities at ameriprise financial, our advice is personalized,

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welcome back to "squawk box. we are on-site here at the baron investment conference and here is ron baron >> good morning. >> good morning to you, sir. this is a big day for you. >> very big day. >> you put together a list of remarkable ceos and companies you have been investing in and this is your 30th. >> year 41 or 42 for my business and the conference, it is the 30th one >> did you have to call elon to get the cyber truck outside? >> yes >> they take it on the truck what happened? >> i don't know how it got here. i assume it was by truck >> have you driven it? >> no. i'm getting one. that's the first time i saw it i'm getting one. >> let's talk about tesla and other companies you are invested

in there was a call yesterday, hsbc initiated coverage with the price target of $146 i assume you looked at this and laughed with the bullish views on tesla what was interesting about the report was that they really were trying to define the company as an ev automobile maker is thankt how you think? >> i think of it as a technology company that cannot be matched by anyone else they have data and technology and ford makes an electric car every car they make, they lose $36,000 on our company now makes about $8,000 in profit a car they were making $15,000 in profit per car if they build a plant, that plant was making $15 million --

$15 billion a year on $7 million investment this guy is making capital twice a year now he is making it once a year. $8 billion in the $7 million plant. lowest cost person everything about the business is driving prices lower right now, they will be -- in the 1900s, the automobile companies were tremendous innovators no longer is the case. in the 1950s, they went for profitability and outsourced supply chain to the detriment. now the way we are going is that their electric cars drive 30 miles a day or 40 miles a day and 3 million that are collecting data. 100 million miles for data and getting more compute than anyone

in the world in 18 months. >> have you been surprised and this is true of the other ev makers they put up big goals with sales and scaled those goals back saying it is not customer demand do you think that is the responsibility or function of the products these other automakers are putting out or do you think there is not demand for evs at large that maybe was anticipated or expected? >> 1.5 billion cars have to be replaced they do 80 million cars a year. a small percentage are electric. ultimately it will be all electric the reason there is not more demand, cars are out there and not attractive by the dealers or car companies and they are expensive. then in addition to that, they don't want to sell them because there is nothing to service. dealers sell them and they're not selling them >> trying to bring prices down

and elon musk talked about that. at the same time he is trying to bring prices down, you have the potential for tesla to be a target of the uaw which made the new deal with the other big automakers at higher prices in terms of what those employees will be getting. what do you think? >> tesla employees are the highest paid in the world. they own stock >> as a function of the stock. >> that stock option would not be present in all instances if it were unionized. when the unions were in control of freemont, they had trouble and ran from it. tesla took over after the company had gone bankrupt. tesla employees -- a good story. one executive who devised the pay plan for employees was telling me a small jewish guy like me and walking through the

plant and large black man walks over to him with shaved head and tattoos and said ira, are you the man who devised the pay plan he said yes. i'm the first person in my family to ever be able to afford a home and thank you very much the workersthere make anymore by far and healthcare and benefits are better. the unions are trying to organize tesla and toyota for years. they failed repeatedly why? those companies aunions are not there to keep them in business the stock went down yesterday not because of the report. because president biden, i love what he is doing for israel, but not what he is doing in business he is the one who said unions should organize tesla. that is what happened yesterday. >> we'll come back to the biden piece in a second. melissa lee has a tesla question

i want to talk about other things melissa. >> ron, thanks for taking my question when you think about china, how do you think about the growth there? that is the key piece to the tesla story. li auto had strong ev guidance gaining market share how do you think about the competition and the weakening chinese consumer have you weakened that part of the story with the chinese forecast out there >> tesla right now is doing about 1.8 million cars a year. when we started investing in the company seven years ago between 2014 and 2016, they were doing 41,000 cars a year they are on the way to 20 million cars china is 1 million right now large mepercentage of what they make in china is exported to europe the more they build in europe,

the more they save on transportation and duty costs. i invited musk in because the chinese car companies have done poorly for a long time the promise was that he is going to help them become better car manufacturers and not trying to take over the market in china and develop a local supply chain. he is the only one that has been invited to china that has been able to not have a partner, a local partner, to operate their business i'm convinced they have good operations in china. the person who runs the chinese business or tesla business in austin is probably in line to be an important person at tesla overall. he is chinese and he was brought from china to texas and runs the business there he is in charge of the automobile business. i think the relations they have with china are exceptionally

good both people are getting something from it. i think that business will continue to grow he will open plants all around the world for low-cost cars. wait until you see what happens when they sell cars for $25,000 a piece. that will happen in a year or year and a half from the new model. they feel that new model will do $5 m 5 million a year >> do you believe autonomous cars and robotaxis have to happen i asked because the gm cruze shutdown in the u.s. temporaril because they have not been able to get to the right place. tesla hasn't gotten it there either we had dara khosrowshahi on from

uber and this could take five or ten years. >> we have a small investment in cruze. i wanted to learn about the process. every car costs 2$250,000 to hae equipment on it in order to operate autonomously they have to be in mapping in every city it is a tougher business we were out there a couple of months ago to drive around in one. you are driving around and they pick you up 8:00 and you pull up and a car is next to you there is no driver in it you pull away. it is like the headless horseman we have a small investment in that i like kyle. i like the executive who was there and left to go to exxon. i think ultimately, microsoft thought they were excellent and invested in it as well we have a small investment as far as tesla, that software, no one has that. they have data no one has that. tesla will have that car, they

will charge autonomous $2,000 a year to have the car operate by itself it is virtually there. i don't think people will realize what it means. that is the business alone is worth $1 trillion. that business alone will do $100 billion or $80 billion revenue there are 20 million cars every year and in addition to that, $80 million and 30 million use the technology mary barra asked me a year ago if i could fix her up with elon. not a date, but fix her up i'll set it up i went to al and they met. she hadn't met before. i saw her on the program and she quoted and said we text all the time me and elon. the reason they do this is

because tesla doesn't want to put others out of business they make the metal for the cars and he will supply the guts. intel and tesla inside the cars. that is an amazing business. >> let's talk about investing more broadly you want to touch on other companies. i want to know in this particular moment, given where you may think the market is given where bond prices are and a lot of people are trying to re-think the mix of what a portfolio is supposed to look like in this world given what is happening in israel and ukraine and the like are you buying stuff what are you doing >> every day i'm amazingly bullish. in 1960s, there was vietnam war and inflation and assassinations of the presidents of the united states president of the united states

assassination of robert kennedy and assassination of martin luther king. i went to law school at night and worked at the patent office in the daytime after king was assassinated, one of the friends said come over here i ran to the other side of the building all of washington was on fire. we got on our motorcycles and drove darkz -- you are not allod we saw the city falling apart. it looked like the country was ending marches on washington. dow jones industrial average was 1,000. $800 billion and now $27 trillion it is 34,000 now five doubles in the last 53 years. you double every five or ten years. basically, the way i think about it, when you have a war or pandemic, you have to have inflation and you have to have

the government pay for it. when the government pays for it, you come out of it, they have to pay it back. the way they pay it back is not paying down debt, they pay it back by making money worth less. we think inflation is going to reduce the value of your money in half about over 14 or 15 years. 5% or 5% is inflation. that is my lifetime. sometimes it is 2% or 7% 4% or 5% is it >> you would never buy a bond? >> i have never owned a bond not one. i don't have a lot of cash i'm always invested. when i have a chance to buy more, i buy more in tesla, i give you the sheet before that showed when i started in business in 1970, i came to new york in debt 1982, baron capital started. we had $10 million under ma mana

management now it is $41 billion. we have $40 billion in profit. most of the money we manage is profits. of course, we had $55 billion a coupledepreciation what will happen by december of 2025, we will be back. >> what gives you that confidence >> multiples are lower and businesses are growing the growth in the country is 7% a year historically. 4% or 5% of inflation and 2% is real all of the growth we had in the united states in our country has been in the last 200 years it is the last 20 or 30 years which it has accelerated growth is exacceleratacceleratig it used to be a cap telital intensive economy. now it is 44% investment capital. >> we will talk more with you

and the number of the ceos throughout the program thank you for this 30 years in amazing. >> make sure i tell you about spacex. >> whe will talk about spacex it is through your fund. we will talk about that and more melissa, back to you andrew, thank you. coming up, we run through the biggest money market movers and stocks to watch. later, dr. scott gottlieb will join us to talk about the latest weight loss drug to overcome obesity "squawk box" will be right back.

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[inaudible chatter] [card reader chimes] (♪♪) (♪♪) time for the executive edge. we start off with three movers

the trade desk shares are plunging third quarter earnings beat estimates, but current quarter estimates came in below the forecast of $610 a spokesperson said the veweaker guidance was from advertising and entertainment related to labor strikes. they thing tsingled out the sece in october with what on in the middle east. they saw the comments from meta. this is not a small company. this is a $37 billion company. it was more before the haircut that is a huge tumble. shares of richemont on tumbling in zurich consumers reined in spending on luxury goods

geopolitical tensions were hurting customer sentiment >> morticia. love it. >> i'm dressed like morticia it has a morticia feel to it >> i don't know whether in the movies gomez said that to her. on the tv show, when she spoke richemont. >> wednesday >> richemont cartier. i took french for a thousand years. >> you weren't smart enough to take latin for four years. >> i took latin for seven years. >> i know -- >> you know those two things, you can decline any other verbs. that's the rosetta stone >> if i go to letinia.

diageo shares loefrer lowe overnight. it expects growth to slow in the first half of the fiscal year with the weaker performance in latin america and the caribbean. it cut guidance for the short-term and medium-term >> my son is taking sign language which i think is the cool he shows me things now that would be ideal. i think i would do that. you learn nothing. >> from what >> latin >> your vocabulary would improve. >> i would rather take sign language >> latin >> no, sign language coming up, we will talk about the political implications of senator joe manchin's

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good morning welcome back to "squawk box. we are live at listencoln centea the baron conference we will talk to ron baron and a number of big ceos we twill talk about spacex dow up five points nasdaq looking to open 34 points off. s&p off 5 for now. joe, back to you. thanks, andrew let's get to washington and the political fallout from senator joe manchin's decision not to run for re-election. emily wilkins joins us now >> reporter: good morning, joe manchin's decision not to run for re-election sending shockwaves he represents the state of west virginia that is the state that used to

be pretty blue and democratic. it has gone increasingly republican former president trump won the state by 40 points in 2022 the fact that manchin is retiring and an open seat is a huge pick-up opportunity for republicans. they have strong contenders in the race including jim justice who has thrown his hat into the race to another extent, this means d.c. is losing one of the few moderate senators that remain. someone who negotiated on things like the debt limit and the infrastructure bill and some of the major biden administration policies that we saw pass. this is really something that i think a lot of republicans are thinking of which is good news they don't have to pick up that many seats to take control of the senate in november of 2024 certainly west virginia was one they were watching and this is a

really good pick-up opportunity for them if republicans are able to win west virginia, there is a good chance to win the senate next year >> it was an uphill battle for the senator in the next election justice is pretty popular. he was a democrat. he was a democrat and learned in west virginia that your future in office like a senator is not great right now as a democrat. >> reporter: no. >> they say manchin is the only guy that could have kept west virginia in that seat on that side of the aisle. that is why they are pessimistic about the possibility. we had senators manchin and romney on yesterday. it was funny i got a lot of tweets, emily they were jokes. a rino and dino walk into the

bar. i don't know the punch line. they said that >> reporter: both are getting out of congress right now. both are retiring. there is talk of having a dual ticket >> who is on top >> reporter: manchin is entertaining that idea it could be a long-shot bid, but these two who worked together and happy to appear together and leaving congress at the same time it speaks to if they don't or no third-party run, what does it mean for the ability for congress to compromise and work across the aisle there are not many members left in the atmosphere we have. >> senator manchin thinks was right with the i.r.a i think that might have been the straw that broke the camel's back for chances for re-election in west virginia that is where the numbers turned >> reporter: it hurt candidates

before you have the seven-term house member losing because he voted for the infrastructure bill that brought billions to the state. fascinating politics there >> right i think it is the same problem people are looking for something like that with these two candidates we have i don't know both sides are still -- president biden has a lot of support on that side and former president trump with republicans support. i don't see it happening if it happened, it might not be great for president biden if there was a no-labels manchin candidate. thanks, emily. >> thanks, joe. coming up, china's largest chipmaker under pressure and joining us next is kyle bass from hayman capital. "squawk box" will be right back.

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shares of china's chipmaker fell in hong kong overnight. a 30 a 30% drop in third quarter

profit smic is the biggest foundry. the high inconvventory has been mitigated and inventory has been moved to a healthy level of course, this shows the impact that the u.s. export controls is having on the chinese chip d industry it makes the chip for the huawei phone. andrew, what is coming up? >> we are here at lincoln center more from the 30th annual baron conference in a moment we will bring you an interview with one of baron's big investments. figs a lot of people wearing it as cool clothes e eauthaafr abo tt te thbrk. one took over our office. and he's using it to send out medical bills. good hands! hospital bill for prime?! gaaaaap!

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welcome backback. we are here at the baron conference. this man has been bullish for a very long time. how did you -- before we begin, how did you meet each other? >> she went public and an analyst in my office introduced me to her and they had private offerings at $10 a share. it went to 40 and in the last

year the stock has come down to six dollars. i have been buying it for about a year and we own 15% of the company right now, so it is a small investment for us but i own as much as i can own. >> you think it is going where? >> i think she will make me $1 billion. sheet thinks she will make me more. one thing that is interesting to me, the companies that we have speaking today, we made 47 times our money since 2001. another, 10 times, another 22 times since 2016, choice, 26

times, those are what we have done . this is something that i think people will have a chance to do, this is a chance to do it with a small company. >> we have talked about how this started to begin with. >> a friend of mine was sitting with a friend of hers looking at her scrubs and they were uncomfortable and she said what are you wearing? she said these are scrubs. the second problem was one of distribution, everything was sold in strip malls, so it was an awful experience. so we set out to solve the problem and create the highest quality medical scrubs. >> in terms of growing the business, you also have a --

>> we are professionalizing and helping businesses standardize their teams but for the most part we are still direct to consumer and that is how we engage the community. >> how much of this is about fashion? i know people where the scrubs has pajamas, around the house to see people on a sunday wearing them, and they aren't in the medical profession . >> it is really more about function, utility, pockets, all style and fashion is important and people want to look good, so it is a bit of function and fashion. >> they have lunch in hospitals with doctors to assess what they want. so when they were trying to unload the goods from cargo ships she goes down and she is

hanging out with the dock workers and giving the money to unload the docs. it is unbelievable. she goes from zero to 500 million in sales within 10 years and she thinks she will go to millions. i believe her. >> i believe hospitals don't buy these. most have to buy them themselves. >> 85% are on their own to buy their scrubs. internationally, you know, many do get that set of scrubs but maybe they get one set, it is ill fitting, it is not something they want to wear to work so they come to us to get something better. whether you are a nurse or a doctor in paris or baltimore you are underserved and need something better. >> how far can the brand move beyond what it is supposed to?

you are making the t-shirt that some of these people are wearing here. what will this mean five years from now? >> so the market is vague. we have a 5% market share in the united states. less than 1% internationally so we have a long one way to continue to build this community and continue to grow globally, but, there is so much more we can bring to this, whether it is other uniform segments, other people wants functional clothing so there is much more to come. >> we want to thank you. we will see you in a little bit. stick around we are going to have a lot more from ron baron here at the conference. we will get his thoughts on spacex and get a closer look at

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and good morning, investors weighing the higher for longer trades, stocks selling off yesterday. stocks selling off yesterday after federal reserve chair used a bad word and said he is not confident in insulation. we are live from the baron investment conference. we will hear from ron baron and executives from some of the companies he has invested in. we begin the right now

good morning. welcome back. we are live at the baron conference taking place right here in new york city at lincoln center. joe and melissa are back at the nasdaq, i am here with ron baron, we will hear from him from out the hour along with some great guests. take a look at the futures at this hour. right now we have a bit of a mixed picture. we are going to round up rather than down. also, take a look at treasuries, ron baron not a fan, the 10 year at 5.031 .

that test actually moved up. >> that was interesting . let's talk markets right now, joining us, stephanie, good morning. >> good morning . >> i wanted your reaction to powell, what was interesting was he did not turn things yesterday it was that bond option which underscores the notion that stocks are being held hostage to the bond market. how do you view the rest of the stretch of the year, a lot of people say we are destined for a rally, yet, here we are, it seems like powell wants to manage expectations. >> in all fairness we did rally

6% off of the recent lows . so maybe we have a period of digestion, but i we can rally until the end of the year. i don't know what the catalyst will be. is it the cpi number, is it sales from retailers, it is possible. but it is a seasonal period right now and i think that economy continues to go along. we are running around 2% gbp. it all has to do with jobs. we look at claims on a weekly basis, really still very strong, that is helping the consumer and on the manufacturing side, we talk of what this all the time, aviation is on fire, so i

think those pockets in the economy are way you want to be . at the same time inflation is making progress . i know it is not where the fed wanted to be but we are making progress. so, we are headed in the right direction and that is why the fed can be less hawkish . i think that is why we can rally until the end of the year. >> that 6% rally was made on the back of a 50 point the client in the 10 year yield . it does seem like stocks are taking their cues from the bond market . i want to get your pics because they are in aviation. you also -- with respect to the consumer, is target a turnaround story play, relative to walmart, its evaluation is much better. there is a turnaround component to target but the consumer may

not be robust these days. >> you are right. you are spot on in terms of the market going higher. i think that rates have peaked, that is the premise of why i think we are going to edge higher. so on target, if i am not buying this now i am never buying it. you can't have me on next wednesday and i can say it is cheaper and i will buy more because i think the enterprise value is really very extreme . this stock was a $266 stock in november of 21 . it has fallen 60% . ice will think they are seeing customer traffic, maybe it is less, but the entire industry is seeing a little bit less traffic because people aren't going out on services. i think the digital's tragedy is working.

i think the merchandise partnerships are working . i think some of the bankruptcies and industry will help them, so i am not looking for a great quarter in terms of cost, but what i do think is you will see the third quarter in a row of better operating margins, so better profitability as they continue to cut inventories, lower freight costs and overhead input cost. if they can be profitable in a down comp that is pretty impressive . so i am involved in it . i have been. i do think we are approaching the bottom. >> do you also own almart? i am just curious. >> i don't because of the evaluation disparity would target . but, they have much more consumables versus merchandise. it is opposite for target . >> let's move on to power, that

is the grid, you are investing in improving the grid . >> at least i inconsistent, right? this stock is down 20% from its highs and i think it is concerns over utility companies, are they going to cut the x? they are not . i listened to all of their customers, they reiterate x and some increased it and they have to, right? this is on shoring 20% is renewables, 48% is transmission and distribution and it is about the grid and model rising the grid. this is all being helped by the i.r.a. act where $370 billion will be spent over the next 10 years . so i think with the pullback in

the shares i like it very much long-term . i don't own it yet though. >> you don't own it? >> not yet . >> trans time has hit a high. >> this is aerospace, a supplier with a focus on price productivity and profitability. so 430 is a have increased from 10 million to 3 billion, i think if you have organic growth and pricing of 5% margins are expanding you could see them continue to grow. so, it is not cheap, but i do like it very much. >> stephanie, did you remember if i asked you last week if you would take that tree down or leave it up? that was last christmas. do you remember? it is up already!

>> it is a different one. it was green. >> i can't believe we were having a conversation and it has already been a year. that is just so scary. >> i put it up early but i also take it down early. >> is that a live tree? >> p will make really realistic artificial trees. >> i am just curious. it is a lot of maintenance. >> it is a lot of maintenance. >> in the first couple of days they drink water. >> stephanie, nice to see you, great tree. >> coming up, the ceo of costar

group joins us live from the baron conference. later, the fda approving ely lilly 's weight loss drug. dr. scott will join us to talk about the battle between the drugmakers [ indiscernible ]

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with a qualifying internet bundle. comcast business, powering possibilities. >> welcome back . one of the biggest winners in the verdict that shook up the real estate industry has been costar. they have seen 50 quarters of double-digit growth, it is quite a remarkable story. i want to bring in the founder, and the man who has been bullish on the company since 2001, our host ron baron. what did you say, 47 times? >> so far. >> what you think you will make? >> a lot more. >> where can it go from here? >> i remember meeting with ron

baron the first time and i spent the meeting trying to convince him we could get to 100 william, we are now approaching 3 billion, i believe the next stop is 100 billion. >> did you get that? >> i did. there are questions -- we were talking about interest rates, there is a lawsuit and the results of that, it may have an interesting impact on your business. what do you think? >> there are two separate components. with raising interest rates we have seen house values since the recovery of 2009 on up to the bubble, you bring in these interest rates moving and affordability has dropped down to the worst it has been, the

fewest number of americans can't afford the house, we have not seen buyers priced out like this since 1985 so it is a tough market. >> what does that mean to your business? >> we have about 15 different companies and they serve different sect others and they are all very countercyclical so, for instance we may be providing services to lenders, in a down market that goes up. so apartments go up then you might be moving in next year into recovery in the office market and that will go back up. a big part of what we do is we have about 1 billion people a year search our websites for all kinds of real estate . when things get tough people invest a bit more in real estate and

we are a beneficiary of that. >> there is less volume of stuff right now, there is really less volume of stuff because people are less mobile right now. >> it is down dramatically, it is down 45% on the commercial side, 30% on the residential side. >> what does europe look like? >> i think this is my fifth country this week so it is similar over there. >> what to make of the lawsuit that we talked about and what it means to the real estate industry, what may come as a result? there are people who think the commission system is going to be offended by this results of this case and maybe they will to it more broadly around the country.

>> i think people are a little slow to grasp what is happening. we have been watching this come for about a year. people did not believe the jury would return a verdict that was this significant but it is a 1.8 ligand dollar verdict which will be tripled, and this was only for kansas . that means the rest of the united states is to come. that could take damages up to about 400 alien dollars . i have begun to hear about another series of damages which could escalate it even more . i think it is highly likely -- >> you had a 400 billion dollar penalty you would wipe out profits for a decade or two. >> they will negotiate all the bowring power out of these

major firms. they will try to appeal, but typically you have to post a bond of 10% of the damages. that will be difficult . so there will be a bunch of cases, but at the end of the day i believe the seller must pay the buyers brokerage commission is done and they will probably follow this lawsuit and say that is done. when that is done, it is interesting, it will turn the market over and there will be some big winners and losers. some of the brokerage firms will have a tough time . the agents themselves, i did an analysis yesterday where it is clear that 85% of real estate agents would do both seller representation and buyer representation, as the buyer representation component goes away . they don't have to split

their fee, their commission would in theory double so that they get twice the money for less work so agents are winners. >> but the rates are going to go down . you don't think it goes from six-3? >> they did a good analysis which it will come down to about 3.5 . >> if you are a real estate agent watching this morning you think it is good? >> if you are a seller agent, there are some less experienced agents who work with a zillow to get these leads would you split your commission, they will have a tough time because of the business models that rely on selling buyer leads on siller -- on zillow, i believe those will completely disappear and be a different model .

>> the day that that we have is not able to be copied by anyone else. >> we have 5 billion interested in data. >> everybody has thought the office market would tank, it would take some of the regional banks with them, this was sort of the iceberg in front of us. is it or not? >> we are the epicenter of the paint right here at lincoln center. it would be to the point where everyone thinks the world is coming to an end, it is heavily concentrated in new york, so, it is going to recover over the next two or three years because we can see people returning back to work and no one is building anything. i believe there will be a supply shortage about three years from now.

but right now a lot of bankruptcies. >> i want to thank you. we have got a lot more from the baron conference. we have got the ceo of choice hotels in the middle of a potential deal with wyndym . we will be back right after this ( ♪ ♪ ) who do you think taps out first? i think the duck goes the distance! alright, you about ready to get out? what's this? a hospital bill?! for a thousand bucks?! gaaaap! did this goat just say 'gap'? he's talking about expenses health insurance doesn't cover. but with aflac, you can get money to help close that gap. aflac, huh? -aflac! -ahhhh! okay! oh! duck - 1, goat - 0. get help with expenses health insurance doesn't cover at aflac.com -you want to race? -for real?

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>> let's get a look at the premarket movers. >> i will get to the business first. we start this morning with a check on shares of wynn resorts, they are down 5%, that

is despite a report better on profits thanks in part to the recovery in its gaming operations, but a key measure did fall somewhat shy of expectations. revenues in boston were also lower than the same time last year and this morning las vegas labor units have reached eight label deal for the next five years covering its 5000 employees under those agreements. so we will watch wynn resource. also, shares of lumina are down about 10% . the analytics company reporting mixed results, revenues narrowly missed expectations, but they did give weaker then expected profits. though shares are down 11% . we and on home improvement retailers, both relatively traded right now in the premarket but both stocks are

getting attention because target prices have been cut by wells fargo. they maintain the overall earnings on both . they are citing a load of estimates given some lowering trends but think a good amount of the downside is already priced in. we will see if those shares get some movement later on when things pick up. back to you. >> golf is one thing, but do you know that the san francisco 49ers are favored in jacksonville? it is weird. >> they are. first of all, anyone who has watched us about this game knows san francisco is on a bad losing streak right now. but, the line did shift somewhat entering this week because of the chase young addition, that big trade that brought him over.

there is an expectation that there is a catalyst the foot with that defense with the addition of chase young, who will play along his ohio state teammate and barrosa. -- nick barrosa. >> one is this guy getting married? >> which guy? >> christian mccaffrey. >> i was thinking bock purdy because they are both engaged . >> he is so good. >> i think everyone in the nfl should be rooting for a 49ers touchdown because that would break the record. >> you are like a walking trivia died . i had to google before i even talk to you so i can keep up . >> i will admit this to you, i have to prepare so much . i have to do all kinds of reading

because i never know what to expect out of your conversations. >> that is time well spent. >> but, you dig it . you know there is another 9:30 game over in germany. >> yes. >> all right, thank you. i think it is useful time. >> i feel like you start -- it really is the more that you know. >> that is an idea. >> still to come, the ceo of choice hotels will join us next. as we had to break a check on the futures . we do have a lower open indicator by the nasdaq . we will be right back .

welcome to ameriprise. i'm sam morrison.

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>> welcome back. joining us right now is the ceo of ron baron 's longest investments, also here of course, ron baron, the man himself . he has been in investors in 1996. >> i actually bought it from borrowed money in 1999 when i was in law school. >> in 69 . >> yes, 1969 . my idea was in 1965 they passed the medicare bill, i thought they would be a beneficiary, they had a $12 million value when they became public.

in 1970 i bought the stock, we were a big investor in 1980 we became a of the largest shareholders in medical care. ultimately it was sold to carlisle hotel for $4 billion. this guy, unbelievable stuff. >> the next generation of this might be with wyndham. how important is that to the future of this company? >> it is a natural fit between the two companies. we really believe where the industry is headed about putting those companies together is creating a lot of value for shareholders and franchisees. >> where is this whole thing sit at this point? >> i think we made the proposal

public three weeks ago when i spoke to on this program. we have been able to engage with their shareholders and understand what they are looking for in a transaction . so we are still having the right conversations . >> so there are real talks going on? >> not with their board, the board has disengaged with us . we are hoping to reopen those channels. everything can be resolved that the negotiating table. >> this is a transformative transaction for both companies . they have a great company, steve and jeff have done a great job leading the organization, we have got a great company, putting those together is a blockbuster opportunity for shareholders, franchisees, there is a couple billion dollars worth of value

created. >> is the objection a money story? they are trying to get you to come back with more money or is there something else to this? >> i think it is about the execution of it and protecting their shareholders. we want to begin that conversation again. >> these guys are very good franchisees. >> are franchisees and that spec franchisees own both brands they are looking that their cost are going up, insurance premiums are going up, we have the ability to lower their costs by bringing them more direct business, are franchisees instantly grasp the strategic benefit . >> the family owns over 40% of choice hotels, we had a comparable stake in medicare and what we did there was what

we did at choice and that is built talent at each level and leverage the talent to look for and do transformative acquisitions. twice our size one time a company that really helped us grow. we are doing the same thing with choice. this is the best management team we have ever had . >> given the different hotels you have in access to data, where are we right now when you are talking whether -- >> [ indiscernible - overlapping speakers ] a lot of customers are middle-class and wages are rising faster than prices are. so they have gotten a raise which has allowed them to travel . remote work is driving leisure talents and we are seeing manufacturing driving

the type of business traveler that might come to midscale hotels. >> you think middle-class wages are doing better than inflation at this point? part of the narrative is wages aren't keeping up and that is why people are so frustrated. >> the middle class has had about an eight percent pay raise year over year which is higher than where inflation is going today . you look at the autoworkers, a u.p.s. driver, those type of people travel in our hotels and they are spending money on travel. >> it could be a good cycle? >> i believe so. and we are seeing a huge number of people retire every year. in 2030 about one in every five american will be retired . those people have leisure time and money to travel so that is a long term tailwind for us.

>> do you see people trading up or trading down? >> normally it is down, we have not seen that yet. >> we have got to jump, we are running out of time. >> let me tell you one thing, ron baron has been a big key to our success over the years. i have never met an investor like ron baron . not only does he think in terms of decades instead of quarters but he comes to a meeting with this unbridled intellectual curiosity and asks one penetrating question after another and it makes you think about your business in different ways and gives you ideas he would not have otherwise. you start to wonder if the guy knows your business better than you do. you start to question yourself.

>> we want to thank you. melissa, back to you. >> thank you, coming up dr. scott gottlieb on the battle of scott gottlieb on the battle of weight loss drugs. ♪♪ we will be right back but we p you shape your financial story. ♪♪ we're not an airline, but our network connects global businesses across nearly 160 markets. ♪♪ we're not a startup, but our innovation labs use new technologies to help keep your information secure. ♪♪ we're not architects, but we help build stronger communities. ♪♪ we're not just any bank. we are citi. ♪♪

>> following the announcement about the approval of zepbound for weight loss our next guest say there is a coming battle ahead for eli lilly. joining us that is the former fda commissioner, dr. scott gottlieb. he also serves on the boards of pfizer. scott, number one market cap eli lilly, not just because of how lucrative the market for weight loss is but that has got to be part of it. >> absolutely and the drugs they are developing to support

the continued use of these drugs showing public health gains in terms of reductions in cardiovascular death by stroke or heart attack . we will see competition heat up, first is on price, we did an analysis and found in the market price the net prices received is 48% 70% lower than the list price is on these drugs. the net price paid to the manufacturers is close to $290 and the discounts in the market place, the list price is around $1300, that is before the competition entered the market from eli lilly. i think we will see more discounting and these net prices will come down. we will also see competitions on the label . if you look at novo they have put out studies showing cardiovascular

benefits of these drugs, those benefits were going to get into the label, they will get those in the drug label through the fda. the fda will not extend the benefits that novo was able to demonstrate onto eli lilly 's drug. so you will see competition heat up and demonstrating continuing benefits of these drugs. >> there is no reason to think they have a beneficial effect on the heart other than you don't weigh as much, right? >> that is a good question. there has been a lot of analysis whether or not the benefits you see in cardiovascular, the are being pushed right now by cardiologists, i think you will continue to see that . that there is a question if these benefits in obese patients who have heart disease is a result of the weight loss or there are

other effects of these drugs that are contributing. i think the jury is still out on this question. i think the benefits is substantially from the weight loss, but i think there are people who harbor a belief that there may be other effects. >> we just don't know? that is frightening. what about the things that might be doing that aren't so great for other things, that is frightening. it seems to be pretty good for the heart, here take some more, that is frightening . >> there was a good study six weeks ago that did some modeling and they attributed most of the cardiovascular benefits we are seeing with these drugs from the weight loss alone. i think there is still an open question on that but the safe assumption is it is from the weight loss. novo will put out this data over the weekend , so they put out the top line results in

that big study showing a 20% reduction in cardiac events . that was just the top line results. they will report the full data this week in philadelphia so we will get a better look at that and have a better handle on the magnitude of the benefits we will see. if these companies can demonstrate is not weight loss alone but there are other health benefits in high risk patients, i think insurers will broaden the coverage of these products as well. >> when that study was released stock dropped to 10% on that day, would the full release of the data this week and is there anything that would cause pause for the fda to extend the label or indicate that maybe it is not as beneficial? is there anything specifically you are looking for? you say that the jury is out,

but a 20% reduction in cardiovascular events is significant. >> when i say the jury is out is his response to joe's question about what is driving the benefit, if it is a weight loss alone or the drugs themselves. i think that is an unanswered scientific question and different people have different opinions, but there is no question people who start these drugs, who are at high risk, have a substantial benefit. i think looking at the study as researchers dig in making sure the integrity of the study was solid. for example, how were the patients in this study treated? we assume they all had a prior heart attack or stroke, so we assume they were on a staten, yes they still had a 20% reduction. if that is true, if these were well treated patients, that

will be substantial so i will look hard at how well these patients were treated. the full data will give us a clearer picture. >> i can't help but think that you live by the sword, die by the sword, 5% yield, $30 stock on pfizer, which you think management was too focused on the one-time covid event? eli lilly and novo left pfizer in the dust. >> i am very optimistic about the pipeline. pfizer does have a product in development, as does a lot of other companies, i think this will be a continuing category. >> all right, when we talk about it it is like a tale of two cities . dr. scott gottlieb, thank you, good to

have you on. andrew? >> thank you, joe, coming up we will get some final thoughts from ron baron. later we will talk china and so much more. squad boxes coming right back from lincoln center. -- squawk box is coming right back from lincoln center bright. these days, your customers are not just down the hall. they're all over the world. so cute. it doesn't have to be lonely at the top. join the millions to finding success on their own terms. start your journey with a free trial today.

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ceo ron baron. you are the maestro this day should we talk about spacex? >> yes >> that's one of the other big investments you've made. it's a private company but in your mutual fund >> we have spacex, the fourth and fifth largest. 14% of our moneys in two companies. 86% of the money is not in those two companies. those two will be among the fastest growing companies we invest in for a long time to come spacex is a private company, still valued in the stock market, but on transactions for $150 billion >> in the private market in terms of how people feel about that private value >> transactions taking place at a $150 billion valuation i think ultimately, we think by the time they go public, spacex

with starlink in the next three year, 2027 or so, four years, the company will be worth $250 billion to $300 billion. i think by 2030, it could be worth somewhere around $500 billion. i think we could make four times our money -- >> how do you get there? what has to happen between now and then and why do you think they're going to go public >> well, a lot of people have been investors for a long time, and i don't want it as an exit in my lifetime, but some people do elon had the idea, musk had the idea to go to mars in order to go to mars, you need to have reusable rockets that's what he's developed no one else has developed a rocket that could fly over and over again and if you're going from new york to london flying a 747, you throw it out after every time you use it, it will be a very expensive trip he wants a rocket that can go up

and down we think about it as the railroad to space, just like the old railroad opened up the west, the railroad they have is the rocket that goes up and down and you can use over and over again. other people who want to get to space, use a rocket one time and throw it away. in order to justify spending that much money on a rocket, you have to have satellites that cost hundreds of millions of dollars also we're doing low-earth orbital rockets, satellites, that can go over and over again. that's a business that can ultimately -- morgan stanley and goldman sachs think the opportunity is for $1.2 trillion of annual revenues no one else can do this. we have satellites in space that are flipping around. someone was telling me last night they actually watched them in a string. >> yes >> it's amazing. all of a sudden, 5,000 satellites, you can have internet one more point

the united states government feels it's so important to have internet access all around the country, for everyone to have it, that in order to get internet, it costs you $16,000 a mile to string wire. they had an article in the weenl a week or two ago that talked about they wanted to wire up houses in the nevada desert. it was $53,000 per house biden has a $44 billion program to hook up >> right >> instead of having $53,000 a house, you can buy jeannie ahn ten that for $500. >> right skip the whole thing >> $500. >> do you think there will be competitors to this? i ask because on the satellite front, amazon has this thing called the piper project, and they were hoping to get into this space i imagine there may be a couple others, or do you look at this and say it's like all the automobile makers are now tesla

and look how far behind they really are >> china feels in seven or eight years they can use a rocketove and over again i'm sure they will be able to. the chinese are brilliant people they work hard they're well educated. so basically, they'll be able to do it ultimately, but we're doing it now and we have been for several years already. we invested in tesla in 2014 to 2016 we invested starting in spacex in summer of 2017. >> how much do you worry about regulation >> that was before they had satellites >> how much do you worry ant regulation that he effectively has a monopoly on getting to space and on the satellites and the u.s. government is so reliant on it? we're talking about the war in ukraine. we're now talking about the war in israel. there's an enormous amount of power in that and questions whether at some point the

government says not that they're going to try to take it from him but try to control it in ways that maybe -- >> someone else has to be able to do it no one has been able to so far he'll have 20,000 or 30,000 satellites, how does someone compete against that ultimately i'm sure they'll break apart like aws and amazon. sand someday they'll break apart probably the launch business from the satellite business. this is sort of a first step, the satellite business but once you have all the satellites up there, then how does someone compete against that >> right ron baron, we want to thank you for a fantastic morning together >> it was great talking to you >> you have to get to the stage i think in moments from now, so we'll say thank you. we appreciate it congratulations. 30 years hopefully we'll have an opportunity to be with you on year 31. thank you again. appreciate it. >> thank you >> back to you

>> i want us to be inside of that truck, andrew go out there >> they want to see the inside of the truck >> and the bed i want to see how the bed is and the elevator and -- >> we'll get some cameras going and maybe we'll get down there and shoot some b-roll, as they say in the business. >> thanks, andrew. coming up, the vice chair of the financial services committee french hill on israel and funding and the potential government shutdown. and later, kyle bass will be our guest.

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good morning streak snapped the s&p ending eight straight days of gains, brought down by some hawkish comments from fed chair jay powell and a weak treasury option. futures pointing to slight gains at the moment. we'll talk about all that. plus, trouble brewing in washington we're a little more now than a week away from a possible government shutdown. house financial services vice chair, representative french hill, will join us on where things stand plus, we have a whole slew of china headlines to talk about with heyman capital's kyle bass

from key diplomatic meetings between that country and the united states to the latest fight over artificial intelligence chips all that and more as the final hour of "squawk box" begins right now. good morning welcome back to "squawk box" here on cnbc flooich the nasdaq market site intimes square i'm joe kernen with andrew ross sorkin and melissa lee beky is off today. andrew is joining us from the baron investment conference, has been all morning that was a cool shot, number one, andrew, beautiful, obviously, in lincoln center and breaking news, a cyber truck sighting >> the first one in new york city >> there it is >> look at that. >> that's amazing.

that's going to be unique for a while, and then veryone's goin to want one, i think, andrew don't you think? >> i got to get out there to see it, to be honest with you, because the angle of sight for me right here -- you have a better shot than i do from where i'm sitting. but i'll take a look in a bit. so, it exists. it's real. >> not a unicorn >> not imaginary excellent. get out there and take a couple of shots you can text me, send it to me, and we'll see what the interior looks like u.s. equity futures at this hour indicated up about 75 points now on the dow that's improved a little nasdaq up 1,260 or so. and the s&p up 8 or so i'm thinking as i talk about the journal" piece >> which >> lucent per car, a quarter of a million dollars per car. but the first line was ford in

the quarter lost $65,000 per vehicle. and as ron baron pointed out, tesla, they're making $8,000 or $9,000 -- one company loses $65,000, the other company makes $8,000 or $9,000 is that the time to give people -- >> a discount? >> no. a 25% pay increase as you're trying to transition from ford into evs >> right >> is that the time to stay competitive? is that going to work? who pays for it? >> until the uaw sets its sights on tesla, which it already has meantime, breaking news out of the high-profile u.s. diplomatic meeting set up for next week. andrew jabber joins us with details about the xi-biden meeting. >> that's right, melissa good morning we have official confirmation of the meeting with president biden and xi jinping taking place on wednesday, the 15th, in the

san francisco bay area, they're saying they're not putting a specific location on it this will be the first time the two leaders have met in person since their meeting last november the bali. the phrase we heard from u.s. officials about this last night, and i expect we're going to hear, is competition but not confrontation with the chinese so, why are they doing this meeting now? and why is it taking place at the asian pacific economic cooperation summit in san francisco instead of at the white house or even in beijing the answer to that, according to foreign policy experts we've been talking to, is that the state of the u.s.-china relationship is so bad right now that neither leader has the political capital to schedule a full-dressed state visit with all the official hoopla honoring the other leader in their own capital. for joe biden, that could be seen as cozying up to china and the reverse for xi jinping with his domestic political audience. but there's a sense of urgency to repair this relationship now or at least put a floor under it

so it doesn't get any worse with u.s. military forces reporting close encounters with their chinese military rivals in the region, economic tensions at high point, and wars in gaza and ukraine demanding attention from both countries that's sort of the "why now" piece to this, guys. back to you. >> eamon javers, thank you back to the markets, following the s&p 500 and the nasdaq snapping respective eight- and nine-day win streaks. and very happy to be joined by the president and co-head of merrill wealth management. good to have you >> good morning. thank you. >> yi don't think you've been on yet, so welcome. i haven't. my debut thanks for having me >> i still call it mother merrill. i still wear a merrill hat i trained with them in 1981 and remember it very fondly, not as much as some of the other places i worked some holidays, veterans day is

always on the 11th >> it is >> so it happens to be tomorrow. it's not where you can move it around so that it happens during the week so we're really talking about it today and celebrating it today and that was formative for you to serve in the army >> yeah. it was incredible. i grew up outside of milwaukee, wisconsin, in a small, little town, and didn't really know what i wanted to do. my father was an officer in the military, and off i went to west point, an hour north from here a great education and a great time there's not a day that goes by where i don't think about being a soldier or talking to one of my classmates from west point, so it's a really powerful holiday to me. a lot of things i learned serving in the army help me today. we just need to remind ourselves right now. >> all the time. >> 24/7, men and women around this planet doing everything they can to protect us it's every second of every single day and we're lucky they do what they do.

>> until they get back and sometimes we abandon them. there's homeless problem ps. >> mental health problems. >> mental health and everything else we can never forget that there's not enough -- we could never do enough. >> yeah. i think you're right, joe. i'm proud to work for bank of america. we do a tremendous amount of things for veterans. since 2012 we've given 2,600 homes to veterans in service, members. we have a great program here i was a trainee. i started 30-some years ago as trainee because merrill had a great training program that allowed me to transition >> did you have to take the simulation >> i did >> what did you get on it? >> i don't remember what i got, but -- >> the guys in your office are fielding phone calls, cold calls. i got a 3. >> out of what >> 3 was not good. not good my manager took a chance on me and it worked out. >> i left --

>> you don't remember what you got? >> i don't remember, but it must have worked out for me >> i didn't ask for the close enough times you have to keep overcoming objections >> i left the army on friday and started at merrill on a monday >> wow >> as i said, i'm a product of the training program >> and now you're running merrill. >> i am. today we still have a strong training program that xilss. bank of america does a tremendous amount to help. >> we've had other places on where they have programs where they -- and they don't do it out of the good of their heart they want guys that serve, veterans, because they're veterans >> they make great teammates there's some really great reasons. >> everybody should do that. thatshould be a -- that that should be something that gives you an additional check mark and maybe an advantage over somebody else >> i think when you hire a veteran, you're getting someone who understands being part of a team they come from a place of

wonderfully diverse thought, right. when you're serving your country, you're in there all backgrounds, all ways of life, and you understand how people think, you understand what it means to lead towards a common goal, a common mission, and you're also an expert in your field because you understand the role you play is critical that you do it well and you do it best and that translates into a great -- you know, i think a great teammate, great employee >> out of west point what was your rank >> i was commissioned as a second lieutenant. >> my dad was a second lieutenant battle of the bulge. >> i became an infantry officer and traveled the world and jumped out of planes it was great there's not a day that goes by that i don't think about my military surveillance, one, being proud of it, but i also would say as we come up on veterans day, joe, it's not only the veteran. we have to remember there's a tremendous amount behind them.

a veteran is a family, a spouse, relationships, and they step away from that, and they step away from life to go protect what's important to us and our country. and so i think not only about the veteran but, you know, sort of what's going on behind the scenes and my company, the training and the homes and only of the things we've mentioned. but we have to remember there's a support system out there, too, that, you know, needs hem when veterans are away. >> i'm just waiting for someone to -- >> it's hard to have someone who jumped out of planes talking about the markets. >> so, in terms of retail interest, and merrill was -- when i was there, i was so proud to be at the biggest and the best of the -- >> as am i >> and it still is what are you seeing? what are your clients telling you at this point? >> listen, i think the power of merrill is getting to work with a financial adviser every single day and understanding that

everybody's situation is unique. and the power just isn't the relationship that a client can have with the adviser. it's the world-class bank of america research led by candace browning, the merrill cio office all of that stuff comes together, right. and we have to remind people, especially now, because i think investors have gotten away from it a little bit, asset allocation works, right. it does. it's been a while -- >> is merrill up to bond allocation recently or -- >> listen, we think traditional asset allocation works >> 80/20 >> i don't know if it's that, because every individual has their own goals and their own needs. but what i would say, it's been a while since cash has had a return on interest rate, fixed-income vehicles don't matter because there's an interest rate. so, we have to think through that and if you think specifically about the market, you know, we think maybe the fed is closer to being finished than not.

so maybe one more -- in december, we see how summer of 2024 looks and go. but it all starts with the relationship that a client has with their adviser lindsay and myself, you said it, i get to lead the best financial advisers in the world. >> the thundering herd i bet there are a lot of people out there who set their portfolio in a zero percent interest rate environment and haven't really looked at it actively unless proed by a financial adviser. but are you seeing that? people coming around to the idea they need to reallocate their portfolio? because there are other options out there at a time when the markets may be making a turn or digesting what is going on >> i think that's exactly what we're seeing what i was trying to say is fixed income and cash rates just haven't b existed for so long. and maybe people became interest rate, you know, insensitive. they've locked in their mortgage whatever it was a few years ago and now taking a fresh look and

saying, wow, cash is paying 5% what are short-term treasuries and bonds doing that can meaningfully impact a portfolio, asset allocated across the spectrum that's exactly what they're doing. >> well, i'm bullish on america. i always been. and i'm bullish on merrill do you still use that saying >> we do if i could maybe two other quick things -- we talked a lot about veterans over the next few days, people will thank them. i'm very proud i always say you're welcome. take an extra 30 seconds when you're talking to a veteran, and ask for their story. just ask for their story what did you do in the service what was it like for your family when you were in the service and i think you'll hear some really, you know, telling cases and some amazing stories i guess the last thing, being a west point graduate, sort of heading to this time of year, go

army, beat navy. >> yeah. >> yeah. that's not easy sometimes in recent years >> no, it hasn't been. we got it this year. >> great that you finally made it on. >> thanks for having me. >> a great day to have you on. really timely, eric. >> thanks. please, again, have me back. >> thanks for your service >> you're welcome. >> andrew. thanks, joe. coming up, the countdown to a shutdown we'll talk about the state of government funding negotiations with the gop representative, french hill, and ask him about the fallout from the hack of the u.s. arm of a huge chinese bank. ( ♪♪ ) we're in the security business... our job is to help people feel safe. not only our customers but those who matter most to them. just like our company does for us. we have great benefits from principal. so i know i'm taken care of. and (pause) not just me.

but the ones who matter most to me. ( ♪♪ )

we're just a little more than a week before the government runs out of funding and faces a shutdown it feels like we've been here before, of course. >> we're right back where we were just a little bit ago, but for a lot of folks on capitol hill, yesterday didn't go well part of it was the government funding. it's set to run out at the end of next friday, and there's not a clear path on how to keep the lights on. both house and senate are working on bills to fund the government, but there's a lot of disagreement over how long the time frame measure should take and if other items should be added like aid for israel or border security policy

chuck schumer made it clear yesterday that any stopgap measure needs to be bipartisan >> no matter how negotiations evolve over the next week, one thing is not going to change -- the only way, the only way -- let me say it a third time -- the only way we avoid a shutdown is with bipartisan cooperation >> speaker mike johnson's plan to pass several long-term spending bills before the deadline is also hitting some roadblocks yesterday, republicans had to cancel a vote on a bill to fund sections of the government including the treasury department after it became clear there was not enough gop support, partially due to a provision related to abortion. it's the second funding bill republicans were unable to pass this week. and in the senate, democrats also had a rough day after senator joe manchin announced he would not be running for re-election. remember, trump won manchin's home state of west virginia but almost 40 points in 2020, and any democratic candidate is going to be facing a very tough

race a republican win in west virginia would greatly improve the chances that the gop will control the chamber next year. melissa? >> emily, thank you. emily wilkins. >> sam, talk about protecting financial firms in america and around the globe, the u.s. arm of china's largest commercial lender, icbc, is investigating a ransomware attack. it affected trades in the u.s. treasury market. news the attack may have contributed to yesterday's weak 30-year treasury auction joining us to talk about safeguarding the financial infrastructure in the u.s. as well as current negotiations over government funding and funding for the war in ukraine, republican congressman french hill he's vice chairman of the financial services committee congressman hill, good morning to you thanks for joining us. >> you bet good to be with you. >> reports about the attack, you know, it's amazing to think that trades had to be settled by messengering a thumb drive over,

and that's what they resorted to in order to keep the financial markets going. are we confident at all that this won't happen to a u.s. bank with maybe an even greater presence, a deeper presence in various markets? >> well, as a former treasury official and former bank ceo and now a congressman, i can tell you this is one of the top things that is concerning ceos, boardrooms, and the u.s. government, which is the protection of our financial system from cyberattacks i mean, clearly, this critical infrastructure not only affects americans but also the world, because of the size and scope of the u.s. treasury market and the u.s. banking system. bup it's also the best protected system among our critical infrastructure, and that's due to years of cyber protection and supervision, looking over i.t. systems. so, i think we'll get to the bottom of it i think this is a critical infrastructure system that's monitored both by federal

resources and all private sector players and the market regulators so, i have confidence we'll get to the bottom of it, but i can assure you that this is a concern every single day for people engaged in the i.t. industry supporting our financial services industry. >> we mentioned that icbc is the largest lender in china. it's the world's largest lender by as sets, so this is not just a problem over in china, it's one that affects us here in the united states. are you in talks have you made calls over there to officials to sort of try and understand if there's any sort of attempt by this group to attack u.s. firms? >> well, look, as i say, this is monitored on a regular basis by surveillance throughout the markets, both by the individual firms and their market regulators and those who protect all of our systems for cyber threat so, haven't personally made those calls, by eno our cyber

fusion centers that oversee our markets are studying this to make sure it doesn't spread. also, the bank itself will get to the bottom of the source of this malware in their system and eradicate it and share the results with their competitors >> staggering to think it could impact one of the deepest markets in the entire world with the cyberattack. i want to move on to the government shutdown. we're about ten days away, congressman hill what are you thinking? prepare for a shutdown >> well, i think that's irresponsible. i've said for weeks we need to make sure that we do our appropriations work as well as have a stopgap spending measure so we don't have any chance of a government shutdown. that doesn't help control spending that only increases spending and increases disruption we have many concerns around the world that we're monitoring.

my advice to the speaker is the house should have passed this week a continuing resolution, a stopgap spending measure my judgment was we should have done that till the third week of january to give us time to finish our work in the house and conference the significant amount of spending that we've already passed we've passed 80% of 2024 spending in the house of representatives. we should be in informal conference right now with senators and get those bills enacted into law and that will take all the risk of stopgap spending off the table. but i think now, given the time we've wasted by throwing kevin mccarthy out of office, a huge mistake, a dumb idea, we're behind, and we need that extra time until january to get this work done. >> so, you know, joe and i were talking during the break about, you know, the calls for bipartisan efforts and how when a democrat says bipartisan, they mean republicans come over to our side and vice versa.

>> only one way. when chuck schumer talks about bipartisan, he only means one thing. you know that, congressman >> yeah. when chuck schumer says bipartisan, i reach for my wallet >> he just means do what we want >> is there any effort for -- i mean, it feels like lip service. the american people willsay that's all lip service, what are you guys really doing. >> yeah. so, we need this stopgap spending measure so we can complete our work, and there's why i believe we should have done that this week in the house. that way, we would have been ahead of the curve, ahead of what chuck schumer's policy is look, schumer has not passed any of the appropriations bills until last week, and he hasn't put a continuing resolution on the floor previously all that work's been done by kevin mccarthy and house republicans in the past. so, this is a bipartisan challenge. we have narrow majorities in both houses of congress, so i

had no doubt that the stopgap spending measure, whatever the date of it is, will be bipartisan, because there's no other way to get that done in washington right now with narrow majorities in the house and the senate >> congressman hill, always pleasure thank you. >> great to be with you. coming up, heyman capital's kyle bass is joining us to talk about china, as we usually do. a handsome young man he still is handsome >> what if people said that about your head shot >> they say the same thing, and i use a very old head shot i do it because it's on twitter. it is a joke people see what i look like all the time yeah, unfortunately. and next week's confirmed gathering in sanrais fncco of president biden and chinese president xi jinping

we're watching shares of plug power on the way toward its worst day in nine years. in its third-quarter report, the company said it is facing unprecedented supply challenges in the hydrogen network in north america. it called the current supply environment historically difficult, but the issue is temporary, they say. nevertheless, the stock getting hit with three downgrades this morning. jpmorgan is citing margin challenges at the company, higher than expected cash, the stock down 37% meantime, we have another analyst saying there's going to be a large-scale restructuring on the way and that they each got to raise capital at this point, and the stock is down by 37%. andrew >> okay. coming up, we'll talk to hayman

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earlier this hour, we received confirmation from the white house about the long-discussed meeting between

president biden and chinese president xi jinping, which will take place on wednesday, the 15th, in the san francisco bay area joining us now on the state of relations between the two countries, kyle bass, founder and cio of hayman capital. and, kyle, i don't remember where i saw it, it was in the last couple of days, but i read that china is ready to try to bury the hatchet, ready to try to mend some fences across the board. and i'm wondering whether you've judged china too harshly, and maybe this is a country that we can work -- we have to work with them i'm somewhat being tongue-in-cheek. but to some extent, if they were to make some concessions and truly appear to soften some of the things that you have a problem with, would that ever work for you, kyle or is it just a way to lull us

into a false sense of security and continue along this path, which you think is so scary? >> yeah, joe i think you look back to their ascension in the wto in 2001 we made a great bet back then. we hoped that teaching a communist autocracy how to westernize and how to turn from communism into capitalism and what that does to the health of your economy, the growth of your people, and everything that goes along with the greatness of the united states. and in the end, joe, they've only gone the other way. and every single time we enter an agreement with china, they, quite literally, don't live up to their end of the bargain. if we go back and listen to the director of national intelligence, a speech for 500 market professionals yesterday morning, and i asked the crowd how many people in the room have read the director of national

intelligence's report to congress on threat assessments to our national security and not one hand went up i think this gap between our understanding of the enemy on wall street and our understanding of the enemy from a military and intelligence perspective are two different understanding. so, you know, we're inviting xi jinping to san francisco, where there are actually more chinese flags that fly every day than american flags in san francisco. i took a video there a couple years ago with carson block, and i couldn't believe my eyes so, i'm not sure what these people are proud of. are they proud of a country that engages in ethnic and cultural genocide are they proud of a country that suppresses basic human rights for the greatness of the party i mean, i don't understand why we are inviting this man to the united states after five cabinet-level visits of american cabinet members to china when there was no key deliverable or

takeaway from those five meetings other than to have more meetings joe, i think it's kind of crazy that we're inviting him here >> the "journal" piece today, deflation has returned to china. did we have a higher gdp print than china when's the last time that happened so, maybe getting china back on its heels a little bit, and this is, like, just kind of a respite from their -- how do you they homogenistic -- their intentions are still the same but could they back off a little while to try to surreptitiously keep moving forward but with us as friends >> i think it's important to just understand the architecture of their system. they've only been at capitalism for -- really since 2001, or their version of communist-based capitalism or market investing and banking.

you know, their banking system represents almost four times their gdp. the u.s., we're at one times going into the crisis of '08, we're at one times they are infinitely more leveraged than we are and infinitely leveraged to their own real estate markets, which are down 25% to 40% depending on tier one, tier two, or tier three cities china's market is collapsing, and you have their biggest market in debt is their local government debt. $13 trillion market, and something that kind of came and went a couple weeks ago is china declared that nonperforming loans won't be determined to be nonperforming anymore if it's local government debt. and that won't affect banks' reviews when their national regulator reviews their banks. they just declared an alice in wonderland market in their banking system, i.e., they're going to stick their head in the stand and hope it works out. they are reeling from an

economic perspective and i think that they are definitely on their heels. >> so, you think they'll fall for it do you think the biden administration will fall for it? it looks like we're falling for it a little just by agreeing to the meeting. >> i mean, charlie brown kept trying to kick the football. i don't think he ever kicked it, did he you know, i don't know how many times you have to realize that peace through weakness never works. we were begging and grovming for meetings they refused to give us a military-to-military line. i think the key takeaway, the key hope of the biden administration is that we'll actually install a military-to-military line as we look at what china's maritime militia is doing today they are encircling a couple of the shoals off the coast of the philippines that are the philippines' primary source of protein with multiple chinese

coast guard shims and not allowing the philippine ships to enter their own shoals and here we are inviting xi jinping right into the heart of san francisco in the hopes that we can smooth somethings out i think what's going on is the world is in a very destable place, and the financial architecture of the world is actually aggravating that destabilization. i don't think there's a pullback if you understand where the world is from a kind of financial architecture perspective. and that's just not written very often. i shared some slides with your control room i don't know if we can put up a few of these slides, but we should talk about the middle east also. >> we should i was going to ask you whether -- okay, there's the chart. there is really -- it is a triup virp rat to some extent -- russia, china, iran. and every day our troops are at risk from proxy attacks. i mean, can you connect the dots

back to china with things like that, or is that too much of a stretch? >> no, i mean, it's not a stretch at all think about it china has a -- xi jinping and vladimir putin have a limitless partnership that was publicly declared 20 days before putin's invasion that's been ratified since then. the charts we have up right now are really important to focus on because you have a scenario where also the u.s. -- everything in the world is priced in dollars, whether you look at cross-border settlements in dollars or whether you look at pricing everything is prifsed in dollars. when the u.s. fed and the u.s. administration prints as much money and spends as much money as we just did, this year we'll spend $6 trillion at the government level and only have $4 trillion of receipts. people talk about 7.5% gdp as the deficit, but we're spending 50% more than we make, and that's at close to full employment so we just pushed 40% inflation to the rest of the world, and

the rest of the world has a negative call it reaction to that kind of inflation so, whether you're looking at egypt or looking at turkey or lebanon, they have hyperinflated their currencies away largely due to the fact they couldn't handle the inflation we pushed to the world so, the social fabric of the world is tearing because the financial architecture of the world is broken, and believe it or not, it was the fed, the treasury, and our spending that actually kind of lit the fuse for the bomb to go off what i'm saying is there is no -- there is not going to be a global cease-fire. we're not going to all of a sudden settle back to where we were we're never going back to where we were, hoping china is going to turn around we're never going back to hamas and israel having some sort of cease-fire and de-escalation this is only going to escalate going forward because the world's poor just became completely poor. they were bouncing along the bottom until we pushed inflation

to the world, and now the world is destitute many of these places that have tens of millions of disillusioned young men, including china, are having a real problem dealing with their own domestic issues, so they're making them international. >> we have a lot of things to worry about. i wonder about what that means and will look like between president xi and president biden. then i wonder, what's that meeting going to look like four years from now if president biden is still president think about that anyway, responding to some of the tweets i'm seeing here the that are much nastier than i am about what we could expect i know you have to run good to have you on. thank you. >> it's a pleasure to be here, joe. thank you. coming up, an inside effort veiright mahamas over the a was. maker. -thanks for swinging by, carl. -no problem. so what are all those for? uh, this lets me adjust the base,

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disney may soon be scaling down the number of television networks it owns the "wall street journal" says it will proceed with network holdings some of the channels will be put into its a&e networks. the review found three are the most valuable to disney. they're seeking a separate strategic partner for espn and are said to be exploring whether staff reductions can be enough to retain all of its networks. >> what are you slumming -- you are a primetime star you are a -- brian sullivan. >> in my mind. >> when you came in, i felt -- >> graced by his presence.

>> a little short of breath. >> that's the times square air coming in. >> i watch you at night and it's like a primetime star gracing -- >> i think "last call" would look very good on joe kernen >> you want me to do this? matt myers is like joe who he doesn't even remember >> he says hello melissa, it's been a minute. >> long time >> wti >> that's it that's kind of where we are. on the oil side, maybe i'll rename this given what's going on with plug pow they are morning and albemarle. oil is the new lithium how about that oil is going to like that. we have this fight brewing, and that's why i'm here, because you look at the paper markets, meaning the futures contracts you guys talk about every day here and on "fast money" 5:00 p.m. eastern, and you look at the physical markets saudi arabia will tell you they're starting to see a day ver jens what's happening in the pysz cal markets is not necessarily

reflected in the paper markets there's frustration about the price going down we've lost $17 a barrel in the last six weeks here's why global stockpiles -- we have a chart of this -- they've been rising of course they soared during covid, boomed during covid now that they fell -- there you go they're starting to come back up it's a little bit weird, but the right side of the screen, i think that's in green, right, a little different, that is the expectation, so that red dot is where we are now, but goldman sachs believes we'll start to see stockpiles go down if that occurs and demand stays resilient, goes back to what kyle was talking about with china, as long as they don't collapse, demand here stays resilient, demand in china stays okay, we might see a move in oil. but, again, everybody has been waiting for this big oil hop, and it hasn't happened >> are we buying right now >> we're not >> you put out a bid

>> it's an interesting story because it's not as important as it was in the '70s we didn't have fracking and all that stuff is it unimportant? no to your point, we're down by half we got extremely lucky the last two years. we've had no hurricanes in the texas, louisiana region. florida got it but for the oil-producing region, we had some of the mildest hurricane weather in decades and we got very, ver lucky. the spr, absolutely, yes on the other side, guys, this goes to "fast money," melissa, the stock side, you guys were talking about buffet in a different way yesterday, and i won't go into that occidental, warren buffett controls 25% of that company, and he has a federal waiver to buy up to 50%. doesn't mean he will, but he has a waiver i wonder, could warren buffett

buy occidental at some point and take it private. >> i would he has $150 billion, more than ever, sitting in cash. >> but he's getting a preferred stock, which i think is kicking off 8% to 9% >> similarly with goldman sachs and other -- >> amazing you're the guy with money and -- $150 billion in oil deals the last five years, three big deals, obviously here's -- i'm going to leave you with this little nugget, throw grenade in the room. you do wonder, could, like, a shell buy a bp i'm not reporting that i want to be clear bup there is chatter, people saying who's next you look at the european majors. >> between integrateds as opposed to going after devin or something -- >> possibly. i'm saying there are people around the margins, again, i'm not reporting this as a thing, but bp went in a different direction, tried to be a lot more on the renewable side schem got a new ceo. he was, like, no, we're going back to what makes money

and bp is lagging a bit, and shell's kind of coming up. we'll see what happens i don't think the deals are done >> nothing in the $76 price is indicating a global slowdown or recession here >> no. >> that's not what it is >> i'll leave you with this. >> it's all supply >> all the vacillations in oil, of course it was negative during covid, popped when russia invaded ukraine. inflation adjusted was at almost the exact same price as five years ago. by the way in california, they're paying $5.50, $6 a gallon they're frustrated it will be interesting it will be in-person opec meeting in a couple weeks. they'll extend their cuts, and it could expand their -- >> and you're idling in a parking lot on the freeways and just burning the fuel. >> you've been on the 405. >> i live there. the weather is almost not nice enough to make up for the traffic, how bad the traffic is.

>> i was born there. >> there you go. >> tune in, "last call." >> 7:00 p.m. eastern time. >> 5:00 p.m. eastern time. "fast money. i had dinner with tim seymour last night he says hi just kidding he anothers a pint of ice cream every night. see you later. >> thank you andrew, to you thanks, melissa. we've got a new report detailing a potential $50 million anti-hamas media campaign from some of the biggest names in business the article says the effort was originally started by starward capital's barry sternlicht he quotes an email saying the goal is to define hamas to the american people as a terrorist organization joining us right now is ben smith. good morning to you. tell us about this effort and where it stands, ben >> well, you know, barry sternlicht sent an email that may be a little like the emails you've gotten from friends or relatives to 50 of his contact list, which included 50 of the

most wealthy and powerful people in the world, saying, essentially, i think a lot of people are sort of essentially seeing in the media that the pro-israel cause is not as popular in america as it used to be and wanting to change that. he says that he's talked to zaslav and emanuel, and they want to change the narrative, change the media narrative around hamas in particular and tell people that hamas is really a terrorist organization i'm not sure how much that really is in dispute in any case, that's the cause. and i mean, one of the things that struck me about it is david zaslav runs cnn, for instance, so it was interesting to see people who, in fact, do have a lot of concrete power over the narrative really kind of wringing their hands about this state of the u.s.-israel relationship and how people here see israel >> in terms of what this campaign might look like, is this a traditional media

campaign or more likely a social media campaign did they get into any great detail about how it would be executed >> i wouldn't say it's absolutely fully baked they have launched a website they have hired a guy who used to work for chuck schumer and andrew cuomo to mastermind it. i think it's a public affairs campaign like lots of ones you see. >> well, the reason i ask, though, is in terms of getting to younger people, you've seen some of the polls about younger people in the united states and their support either directly for hamas or oftentimes described in the context of being in support of palestinians and how that sometimes can be conflated. i just wonder sort of what is the audience that they're looking at are they trying to influence folks in washington, meaning, lawmakers? or are they trying to influence the public >> i think they're hoping to influence the public and hoping to influence, i guess,

particularly young people. i think the thing that everyone sees is that, you know, during previous rounds of this 75-year conflict, the support for israel has basically been a bipartisan cause on a lot of levels, and over the last decade, like a lot of things in america, it has really polarized along partisan lines, along generational lines, and is now, you know, sort of another culture war cause where people are gravitating toward opposite sides, and i think that's pretty shocking to a generation of people who grew up with bipartisan support for israel >> how -- the reason i mention social media, you have a lot of people, especially over the last week and a half, looking at tiktok and suggesting that it is tiktok that is adding to that polarization on this very issue. how responsible do you think tiktok is for that do you think the algorithm is, in fact, feeding more of that type of content to especially young people, and do you think that there's a way to reverse

that if that's the case? >> you know, i would say i'm skeptical of the notion that the -- that the youth are being brainwashed by this chinese app. i think what you see tiktok personalities doing is telling their audiences what they want to hear to get more likes, much like people do on a lot of other media platforms, and i think what you're seeing more is tiktok reflecting back to its audience what they want to hear than tiktok leading its audience in any particular direction, and to the degree that tiktok itself has its thumb on a scale, tiktok is incredibly concerned about what congress thinks about it, what washington thinks about it. we reported the other day they had quietly removed propalestinian hashtags from what was trending, for instance. and i think my read on this, at least, is that the popularity of the palestinian cause on tiktok is effect, rather than cause of a big shift in america

>> fair enough ben smith, semafor, that's where the report first broke we appreciate you joining us to explain and break it down for us thank you very much. "squawk box" coming right back after this. at pgim we can help you rise to the challenges of today, when active investing and disciplined risk management are needed most. drawing on deep expertise across the world's public and private markets in pursuit of long-term returns... pgim. our investments shape tomorrow today.

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futures have picked up some steam with just a little more than 30 minutes to go before the opening bell joining us now on the markets is kara murphy. kara, great to have you with us. i see recently you went overweight technology. when was that, and what sort of

tech are we talking about? like magnificent seven kind of tech, or other parts of the tech sector >> yeah, so, we made that shift in, like, towards the end of october, and it was really looking at some of the trends in the broader market we felt like the pullback in the market had provided some really nice opportunities as we look at earnings coming through those companies, we see continued improvements and profit margins so it's not just the magnificent seven. it's easy to focus largely on them, but it's kind of broadly across the tech sector >> we saw, though, stocks overall really rise on the back of the pullback from record high yields or, you know, the cycle's highs, and i'm wondering how important that is to your going overweight technology, that the end of october, we were seeing yields come off a little bit now we're seeing them go higher, especially on the back of powell's sort of more hawkish comments yesterday >> yeah, well, we are at a point in the cycle where yields are interestingly having a big impact on equity markets and that doesn't happen all the

time but we've gotten pretty used to, over the last couple of years, focusing very heavily on the fed. fed's very important but at this point in the cycle, the focus should be shifting to, not, is the fed going to raise interest rates one more time, but how long do rates stay there? and even more importantly, what happens on the long end? you point out some of the volatility that we've seen in some treasury auctions part of some bullishness about the equity market came from less treasury issuance. that led to the rally that we had, and then of course, yesterday, we saw a pretty disappointing 30-year auction, which kind of took some air out of the equity sales. so, you know, the point is that there's a pretty strong linkage right now to what we're seeing in the equity markets and the fixed income markets that said, if you're going to be bullish on technology and some other areas of the equity market over the medium to long-term, you have to really believe that's going to be driven by earnings and that -- and the profitability and kind of the sustainable momentum in those businesses >> kara, great to speak with you. have a great weekend want to see a final check on

markets as melissa just noted, we are close to the highs, i think, that we have seen 132 points now after the winning streak was interrupted, but maybe we're back on track. you got the nasdaq up about 65 s&p, up 19 we will be back. thanks for helping ab andrew, great job. do you say happy veterans day? anyway, tomorrow is veterans day, say something nice, ask a veteran about his or her story "squawk on the street" is coming up right now ♪ good friday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber at post nine of the new york stock exchange, closing out a choppy week and that equity stumble on thursday. the s&p, about a dozen points from breaking even for the week. got some earnings blow-ups to look at. biden and xi announce a summit next