2023. "squawk box" begins right now. good morning. welcome to "squawk box" here on cnbc. we are live at the nasdaq market site in times square. i'm becky quick with joe kernen and andrew ross sorkin. it is monday. things are looking flat this morning, but this comes after the second week in a row for gains for all three averages. s&p down 5. the nasdaq off 27. then you have treasury yields. i guess powell speaking last week and this i'm at the imf. he sounded hawkish than the last time around. ten-year note is at 4.62%. on friday, credit rating company

moody's lowered the outlook of the u.s. from stable to negative. it is citing gridlock in washington as the factor for the downgrade. the deficits in the u.s. should remain large and weakening debt affordability. moody's affirmed the credit rating at aaa which is the highest rating. countdown to the shutdown. i have to get that going with the countdown clock on the wall. republicans revealing a stopgap funding bill. house speaker mike johnson opting to try a two-step continuing resolution. this is an untested funding approach to apiece some republicans who need to keep the government open which would be

extended to january 19th and the remaining bills to february 2nd. it would not impose cuts, but not implement border security funding. johnson said the bill would stop what he is calling the absurd omnibus tradition of massive spending bills introduced before the christmas recess. congress member chip roy is a house member who rejected continuing resolutions without budget cuts. he posted on x, my opposition to the clean cr just announced by the speaker of the house gop cannot be overstated. funding pelosi level spending and policies for 75 days for future progmises. we will talk to republican congress her andy member andy h

of maryland. >> we will have the speaker on tomorrow. >> yup. >> i hope he will go slow to explain all this. >> it's tough. what he is doing irritates some in his party on this. >> like everything else. >> to get the democrats to sign off on this, but that is pretty unlikely option. >> that's why mccarthy's gone. he had republicans vote against and more democrats than republicans. i don't know if something similar happens here if you don't get it. it is a continuing saga is what is happening in the house. south carolina senator tim scott suspended his campaign to be the republican presidential candidate. he withdrew last night citing his strategy was not working.

we have four? >> we have christie and haley and ramaswamy. >> did you watch "saturday night live" on saturday? >> no. >> they did the debate. they all froze and trump came on and he basically commented on all of them and said how ridiculous it is. >> who played trump? >> the guy who did it last year, who is very good. >> not alec baldwin? >> no. it was well done. the running joke is half the actors -- the joke was they invested very little in the actors because these are going away quickly.

and now to the latest on novo nordisk. wegovy is helping patients which found the windchieekly injectio the drug reduced cardio events by 20%. researchers observed reduction of the events within months of patients starting that drug before people lost significant weight. wegovy decreased progression of pre-diabetes to diabetes 73%. suggesting that drug could be used as an early treatment. we will talk about the results with dr. angela fitch. she is president of the obesity medicine association. this is weird. >> gottlieb was on. andrew was at lincoln center. we were doing the interview here and you had all kinds of things dr. scott gottlieb.

i asked. it makes sense. you lose weight and your heart has less cardiac events. the point is it may not be related to that at all. so you don't know why? your heart works better, but your kidneys stop working. we don't know. that's not true. if you don't know the mechanism for why something is happening, are their side effects? positive effects are great. do we not know about side effects? this is not the first time. we talked about the story with pulmonary hypertension. they were taking this compound called silvenafil. whoa, what is that? that turned into hviagra. it turned into the best selling drug. monoxodil for hair? there are other times -- i don't

think. >> you are right to worry about the unintended side effects. this could have more miracle effects. >> i want to know -- >> the mechanism. >> what is the beneficial to the heart? it is diabetes. all of these were for diabetes and weight loss. it would be good to know what is causing it. the vaccines and we hear and see it. >> i go back to fen-phen. it is great news if it is stopping other things from happening. >> if you watch at night or nightly news when they go through the side effects for drugs. the one i said for krohns. you could have sudden death or something happen. the peritinium.

they specifically mention that something can happen. the list of what it does wrong is much longer than the list of helpful. >> it is rare. >> we'll talk to her coming up. this wasn't just for wegovy. we were talking about it also in reference to the other ones. not just weight loss. let's figure it out. why it is beneficial and make sure it is not good for the heart and bad for the liver. >> did you come upon the liver? >> liver or kidney. no, i switched from kidney to liver. no reason to think there is anything wrong. i wouldn't be surprised when you hear the side effects, it affects everything. the box office. over the weekend, the latest movie in the marvel universe is also the lowest grossing. marvel brought in $47 million in u.s. and canada in the opening

weekend. early predictions for a round of $75 million which was lowered to $60 million. the movie did better overseas bringing in $63 million internationally. i think they spent $200 million. you have to bring in the marketing budget. at the same time, i think i'm with steve king. why is there so much over the movie doing terribly? >> the series has done so well. it drives everybody else nuts. >> it is hard for me to think. >> it's because of disney. >> i can't root for failure. >> business is war, andrew. competition. even with iger last week, he said i have to go in and get involved with the studio.

i think there was some understanding this was not going to be it. >> over the last two and a half years, irrespective of the success issues or other things, there have been creative issues at the company. >> with all of the ip they have, it shouldn't be hard with pixar. with all of the money they spent buying the fantastic stuff. it looked like they spent too much, but it was paying off. >> the creative process is a tricky thing. >> especially when everyone is on strike gl. >> they made it look too easy before. it is really difficult. >> a lot of filmmakers and others and a period of time where everybody went to netflix. go make your film however you like. i think that and disney was the opposite. they told you what it was supposed to be. "indiana jones" ran 2:45.

in the old world, a managed disney would have said, you know, we are doing this 2:15 max. >> you tread lightly if you are disney. get the magical creatures and the smurfs. they were not going to have the actors playing the smurfs that were actual smurfs. there was cultural. >> what? >> they were going to have actors playing smurfs that were not smurfs. >> papa smurf. >> when they hold their breath what color do they turn? >> purple. >> they turn normal. when we come back, key inflation data and earnings on deck it this week. we will get you ready after the break. we take you live to washington to try to avoid a shutdown by the end of the week. you are watching "squawk box" and this is cnbc.

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don't delay the game with verizon or t-mobile 5g home internet. catch it on the xfinity 10g network. on this week's "squawk planner," we get the consumer prices read tomorrow morning on wednesday is retail sales and

ppi. on thursday we get jobless claims and on friday is import sales. we while hear from home depot tomorrow and target and tjx on wednesday and walmart and macy's and gap on thursday. on wednesday, president biden will meet with xi jinping in san francisco. the first time the chinese leader has visited american soil since the year 2017. we will take you live to beijing for latest on this trip later in this hour. joining us is the head of u.s. rate strategy at society general. and j.j. kennigan. welcome. i want to start with what is happening with the markets. volatility is the name of the game when you look at the bond market and what powell said last week at the imf sounded different from the interpretation before that. what is going on? >> he is walking back the dovish

interpretation of the market after the fmoc meeting last week. i should say the week before. what you are starting to see is the concern in the fed that conditions are easing too fast, too soon. a 50-basis point rally in the ten-year treasury yields and 30-year yields in a short amount of time. mortgage rates from above 8% to below 7%. they don't want financial conditions easing too soon because financial tightening is doing the fed's job for them. becky, we are getting cpi this week. core cpi will be north of 4%. they just don't want the market to start interpreting this as being dovish in any way because they want the keep their options open to hike if needed. >> j.j., this involves equities. they will get led around by the nose by what is happening in the

bond market. what are you telling investors? >> becky, for the first time in a while, we saw people with more conviction and start buying a lot of the individual names. as we talked before, you know, people are uncertain and they stay to the index and etf related indexes. we see people, the other 493 stocks in the s&p had something to do last week. >> is this a false signal? >> i would say it is a signal you have to be careful of, but what was interesting is stocks climbed in the top five. three near 52-week lows. uaw and ford and newmont. eli lilly is another one. they are going for stocks that are are doing well or people are bottom fishing. >> that is something you would do if the fed changed its mind.

do you think they are going after the wrong idea here? >> i don't think the fed is really changed its mind. what the market is thinking about is is the fed done hiking? if they are done hiking, the move is position for cuts some time next year. right now, the market is looking at a cut as early as march or may of next year which might seem a little premature given we don't have much of data to justify a policy pivot right now. >> that seems to me if the fed actually cut rates in march or may, we would probably be looking at a steep recession that is coming in the meantime. they are adamant this is not going to happen. if they cut rates, it will be a more surprising economic outlook and we're anticipating at this point. >> or our view is for the fed to orchestrate a soft landing means

they have to adjust policy a little bit. we saw this in the '90s where they cut rates a few times and maybe cut by 75 basis points. it was a period of ex-tpansion r a long period. in 1994 to 2000. it is possible that the fed is looking at a playbook similar to what we saw in the '90s. >> it took a crisis, long-term capital management crisis. will it be the same? >> they cut rates by 75 basis points. the real cuts happened in 2000 after the tech bubble burst. >> why does it go up in november and december? what is the equities? what are the stats on how often that happened? >> if you talk about santa claus

rally, 70%. from more mid-november. actually, there was a stat that was really interesting. if you look at the last week of october, that tends to be the best five days in a row for equities. >> we had it last week. >> yeah. that's something that is really pretty interesting overall. we had momentum last week. as we head into the end of the year, the retailers do concern me a little bit coming up this week, to be honest with you. at the end of the day, earnings drive markets. becky said rates have been leading us by the nose. if rates are quiet, the earnings season is not a bad season. what concerns me about retailers is the outlook they give going forward. >> they come out and they are concerned about what the consumer may be doing? >> that concerns me. you know, i go back to what the

clients are looking at with the messages. stocks are selling. v visa and mastercard and starbucks are selling. that does not give me a warm and fuzzy feeling. as they rallied, mastercard had a nice rally last week and people were selling more on thursday and friday. i'm interested in the earnings season just because of that message from those stocks overall. we will see what happens there. the other thing and talking about the fed which has been happening which is nice for consumers is price of crude oil is continuing to come down. that's the best thing that can happen to most people instantly and that could help the holiday season. >> what about washington? we haven't mentioned once and the debt ceiling is coming up. >> thank god. >> what happens if they don't approve things this weekend? >> yeah. the government shutdown is less than a week away if they don't pass a continuing resolution by

the end of the week. it is a very, very difficult situation because the issues they are trying to iron out is between funding for border security as well as funding for aid for the wars in israel and ukraine. they are not anywhere near coming to resolution on that. i think the best outcome is for a continuing resolution that gets passed until january 15th which buys some time. really, the question is one of downgrades coming from moody's as well. that could again push yields higher. >> subadra and jj, thank you. thank you. >> coming up, president biden and president xi are meeting in san francisco this week. we will tell you all about what is expected to happen at that

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welcome back to "squawk b box." retailers in china report the singles day event held on 11/11 every year. alibaba and jd.com reported sales volume at a record high from data providers. most platforms rose 200% compared of growth of 3% from last year. expectations were subdued as the economy struggles to recover. retailers turned to deeper discounts of 40% to 50% which were more common than previous years. folks trading down, if you will. in the meantime, president biden is meeting with president xi in san francisco on wednesday. eunice yoon is in beijing right now. let's get a sense from her of what we can expect at that

meeting. eunice. >> reporter: thanks, andrew. this will be their first meeting in a year. there is obviously no shortage of issues that will be on the table. the biden administration has expressed communication is key. the white house national security adviser jake sullivan said the white house will seek communication especially with military-to-military exchanges. other big issue, of course, is help with russia and ukraine and the middle east which was articulated by the treasury secretary janet yellen who met with one of her chinese counterparts talking about how she hoped chinese companies would not be assisting russia in its efforts in ukraine. another big point that the biden administration is expected to bring up is the enforcement by

the chinese on exports of fentanyl ingredients to the united states. now for the chinese, a lot of it is with the back drop of the slowing economy that president xi would walk into the room after his vice premier expressed to janet yellen the desire by the chinese for an easing on export controls and sanctions and trifgs. th tariffs. there is an expectation of dialogue on a.i. skeptics said this is a way for the chinese to delay u.s. restrictions and then finally of the chinese which have been expressing reassurance on taiwan. one other point that is interesting from the chinese is that president xi is going to be headlining a dinner in the san francisco area with u.s. ceos. $2,000 a head. if you way that, you will be

able to see president xi in person and one of the messages that this sends, guys, is president xi really wants to drum up confidence among foreign investors in china. big question, though, as to whether or not he would be able to do that without any meaningful change in policy here. >> okay. eunice yoon, thank you. we will be watching wednesday which is the big day. thanks. coming up, house republicans unveiling a two-step plan to fund the government and avoid a shutdown. fo fdas adf passing a deal bereriy'deline. that's coming up next. >> announcer: executive edge is sponsored by at&t business. next level moments need the next level network. move to the cloud. - so, the question is... - cyber attack!

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good morning. welcome back to "squawk box" here live at the nasdaq market site on times square. look at the screen. red on the screen and nasdaq off 43 points. s&p off 9 points, joe. thank you. time is moving quickly. when was this? two weeks ago? mccarthy? here we are. we are talking about a shutdown ag again. house republicans unveiling their plan to fund the

government and avoid a shutdown at the end of the week. emily wilkins joins us with the latest. this is your thing, emily. when was it? it was a couple of months ago, wasn't it? >> reporter: month and a half ago, joe. we are back here and we will be back here again under this plan. house republicans did make progress this weekend to avoid a shutdown. they released a short-term plan to keep the funded. this one would go into the next year. it gives lawmakers more time to work on the longer-term spending bills. the plan from speaker mike johnson breaks up the government funding package into two parts. lawmakers the have until january 19th to vote on one group of bills and then february 2nd to negotiate on the second group. some republicans are slamming the measure because it doesn't have any additional conservative wins. it doesn't cut spending or include priorities like border

security. green voted no to the cr stopgaps before and will vote no again. now the white house and a couple of key democrats have also come out against the plan saying more funding deadlines means more shutdowns. republicans are hoping the house can vote on the bill tuesday. the senate is beginning the propcess of teeing up their stopgap bills and this takes time and there is not much time left right now. >> okay. thanks, emily. joining us now is heidi heitkamp who is now the director of institute of politics. judd gregg served as senator and governor of new hampshire. if you watch the show, what you are looking at right there is something we see quite a bit.

heidi is always up here. judd is always down there. maybe we should alternate. heidi, you always seem to have the high ground. that's okay. >> isn't that the truth? >> heidi, somehow mike johnson became speaker unanimously. is that an indication that maybe even the difficult republicans to wrangle might also go along with him on this just to preserve the peace? that's what they did the first time around. maybe this will pass? >> you would assume that, but he had a bad week. he had to pull two spending bills off the floor because he didn't have the votes. you know, this is rare that a speaker would put a bill on the floor and not have the votes to pass it. it is not a good look for johnson. i think he is trying to scramble to try to figure out how does he keep this very, very difficult

coalition together and maybe there's enough of a honeymoon left that he could actually pass this, but i think it is a no-go in the senate. it doesn't have any additional appropriation for israel or for ukraine. what does he do when the senate rejects the proposal and he has to build a caucus position? this got mccarthy in trouble. compromising with the democrats. i think we're in a wait-and-see move. >> judd, i think people really don't like the big omnibus right before christmas that no one reads. you know, they will be i intractable. they are trying to satisfy both sides. you ever hear that? you can't please all the people

all the time, judd? >> yeah n. this case, you don't have to. you just have to please 216 depending on rhode island. this is a very conservative approach. this is a win for conservatives. you are freezing government spending right into february. that's almost half the year. it's really once you got half the year behind you and you haven't spent more than last year, that is a step in the right direction if you are fiscally responsible in trying to reduce spending. i can't understand why the house republicans wouldn't pass this over to the senate. this is the hot potato. give to the senate and let them figure out how to get something to pass the house and send it back. republicans in the house do their job and send it over them, the onus is off them for the week. that seems to be a reasonable approach and gets past the

christmas omnibus as you pointed out. you have people who don't want to govern, but only want to shout. what they are arguing is how many crs can dance on the head of the pin. this has no long-term interest for the health of the company. the small percentage by the cr and the big numbers which are not addressed at all. this is a lot of a charade when they are trying to cut more spending. they can't cut spending and accomplish anything. pass the bill. send it to the senate and let them worry about it and see where they go from here. show they can govern and pass the bill. >> reminds me of the debt ceiling, judd. no one thought mccarthy could pass it and he couldn't get the president at the table.

once it happened, they were shocked and it did work. it was in the senate's court. the question is out of the crate and i'm using former speaker mccarthy's words. the crazy eight. he lost two of the crazy eight. is it possible that heidi talked about a honeymoon. maybe some of the ones that voted for, you know, the new speaker, maybe they'll continue to go along with him just to show or push back on the notion they can't govern, republicans, when they're in the majority? >> i would hope so. when i was in the house and you had a leader with instances like this, he would love to sing. he would go on the floor humming "send in the clowns." these eight people are clowns. they are not accomplishing anything. they are not slowing the rate of the growth of government or having fiscal management. they are doing the opposite.

they are empowering the left. every time the house looks in disarray, people on the left argue they shouldn't be allowed to govern. if the republican party wants to govern and lead, they need to pass this bill. let the senate try to do something. when it comes back, heidi is right. that's when the house has serious problems. i can't imagine anything that says it will not require democratic votes to pass. >> i just want to mention that i think this gets complicated by comments that are now coming out of the moderates in the republican caucus who are getting closer to their re-election. people like bacon who says we are tired of being taken advantage of. that's why he can't get the appropriations bills passed because of the fight with the moderates and conservatives. he pulls the bill and now he's stuck with nothing to prove that he can actually govern. these are tough times. when people aren't willing to

compromise and not willing to say, look, i've got to cut and do the job of the united states congressman, how do you lead that? it is very difficult. it may be goodwill, but that's not going to extend to the cr package. >> this argument that they will pass the appropriations bills before they get the posts is a foolish argument. that's not going to happen in the timeframe they are dealing with at the end of the week is ab absurd. that's a straw dog. they passed a lot more than the senate passed, by the way. you will not do all that before christmas. by christmas, they should have all of the appropriations billing up and out of the house. they should conference five or six of them and maybe brought them back for a final vote which is what these folks are calling for. you will not do that unless you

keep the government open. if you close the government, everything blows up and you have -- you are playing russian roulette with all of the chambers of the gun loaded. hopefully they won't pursue it. >> i can't maimagine. >> the problem passing the spending bills is you need democrats to do it. you won't get consensus. >> i won't bring up senator manchin or rfk polling numbers. this is the weirdest presidential election in history, i think. >> let me tell you something -- >> in our memory. >> we had a lot of weird ones, joe. >> i know. i only go back to mckinley. >> the press is saying the

republican nomination process is over. it's not. i've been through nine primaries through new hampshire. this is nowhere near over. in fact, with scott dropping out, it is a bigger race. >> you think it is over in terms of president biden? are you crazy? did you see the wreath ceremony? >> he's not -- joe, president biden's not running. neither on. >> i think he steps out. he will be far enough to get delegates and pick a successor. you cannot serve when you are 82years old or 85. you just can't do it. >> that's why i said i'm not going to bring that up. no way we have time to talk about it. oh, look, judd's on top. >> we flipped them. >> i must have done something right. i said somebthing valuable. >> there we go. there we go. it's back.

>> okay. >> thank you, judd, for this in my head. ♪ isn't it rich ♪ >> thank you, judd. when we come back, former uk prime minister david cameron is making a surprise return to high-level politics. we will have details next. we will talk to former kansas city fed esenpridt esther george. we will talk about the rates and more when "squawk box" comes back. sm ma. now brewing peet's coffee.

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fired the home secretary after the article for not bans a pro-palestinian march by the police. when we come back, we talk about the weight loss drug wegovy wh . geitdranla fitch of the obesity medical association. we will have lots to talk about after this. power e*trade's easy-to-use tools, like dynamic charting and risk-reward analysis help make trading feel effortless. and its customizable scans with social sentiment help you find and unlock opportunities in the market. e*trade from morgan stanley.

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welcome back to "squawk box," we have new data from nova nor tis saying wegovy, the weekly injections of the drug cut the overall risk of heart attacks and stroke by 20%. joining us is dr. angela fitch, president of the obesity medical association. it's remarkable news. a lot of folks are trying to make sense of the news unto itself and how the mechanics of it even work. do you understand it? >> well, yes, we do, and again, it is very exciting and pivotal time in obesity treatment because there's so much bias and

stigma on the disease of obesity, which is that the disease isn't something that needs to be treated, and now that we have data to show a decrease in mortality and the increase in the ability to tolerate this medication, there was a lot of safety data that came out of this trial too for five years. it's the longest trial we've had with this drug up to date. >> do we understand the mechanism in so far as the cardiovascular risk is reduced before the weight loss takes place, . i think the conventional wisdom was you needed to reduce your weight first. >> that was the conventional wisdom, again, because of this bias and stigma around the disease of obesity. you know and we know now there's more to it than just the weight loss itself. we're about helping patients optimize their metabolic health.

we created our clinic to look at the metabolic health of individuals and help them optimize that in a longitudinal fashion. this is something everyone should be thinking about. it's the same thing with stat tin drugs as well. they do more than lower ldl. they prevent the risk of heart attack and stroke. again, these medications, you know, work in a similar way by decreasing inflammation, they decrease the hypercoagulation that goes along with having obesity so you're not as likely to have blood clots. these drugs have very significant effects. we haven't been able to prove it until now. >> that's what i'm seeing now in the literature, doc, is that some of the diabetes -- i'm not familiar with what a sema semaglutide. for more than a decade there's evidence that there's cardio protection from diabetes drugs. this is putting it in actual

numbers and statistical terms, is that the difference now? we kind of knew this, i guess. >> we didn't know it in people with obesity without diabetes. this is patients without diabetes that are taking the drug for obesity. these are not weight loss drugs. these are drugs for obesity. that is what we are talking about treating here, that is affecting more than 40% of the united states. it's very important for us to recognize that obesity is treatable and now we have treatment that can prevent heart attack and stroke at the same time. >> would someone not obese and not diabetic but take one of these drugs for their heart health? >> well, we don't have that data today, right? i think that's going to take -- this trial took a long time. it was during the covid pandemic. we'd like to thank the 17,000 patient who is participated and all the clinicians who helped to lead this trial. it's a very pivotal trial of our time. again, it took an army to do it

because it was during covid, which is a challenging time to complete clinical trial. >> so the question that i have is do you -- and now that we know this, how widespread do you think people are going to be taking this? it used to be we were dealing with obesity in the classic sense. do you think that people of all stripes and sizes are going to be taking this medicine? >> well, i think if you -- definitely if you have obesity and you have a known history of cardiovascular disease, so these patients had not only just obesity, but they had a history of cardiovascular disease. those patients should definitely have coverage for this medication. that's one of our other issues. for the disease of obesity t is not a standard benefit on insurance policies so employers have to choose to add obesity treatment to their package and pay more in premiums. this is a big deal because we don't have access to these effective treatments for patients like we have for cancer or diabetes or other types of treatment in the united states. so it's hopeful that this type

of data will show insurance companies that it's worth it to treat obesity. >> medicare has to decide too. medicare has to decide and blow the budget out. >> you'll have to do a real mathematical model about how much this drug costs how much it's saving. >> how much it saves versus all the issues that come with obesity. >> well, good news with this trial going for five years, there was a lot of good safety data that came out of this data. we know now these drugs are safe and effective, and we do need coverage for this type of treatment for the many americans that need it. >> okay. dr. angela fitch, we appreciate your time this morning. thank you. >> thank you for having me. coming up, much more on a busy week ahead in the markets. we're going to get you ready for key inflation data, which is on the docket and a flood of retail earnings. that's straight ahead. "squawk box" will be right back.

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good morning, the market's recent rally facing a number of headwinds this week including inflation data or more fed speak. house republicans are looking to pass a two-step funding package to avoid a government shutdown. we'll find out what it could mean for investors. and disney's the marvels melts down at the box office.

we'll talk about the company's latest misfire and bob iger's plan to overhaul the studios. the second hour of "squawk box" begins right now. ♪ good morning, and welcome back to "squawk box" right here on cnbc on this monday morning live from the nasdaq market site in times square. i'm andrew ross sorkin along with becky quick and joe kernen. dow off about 8 points. nasdaq opening down 30 points. the s&p 500 expected to open around 6 points down. treasuries, let's show you the ten-year and two-year. ten-year at 4.634. the two-year back at 5, we're at 5.056. joining us now, the chief market strategist for the

americas. just thinking about some of the things that you mentioned to our person that called you and begged you to come on this morning. the recent decline in yields sort of took off the table that 6 and 7% fear that we had, but that shouldn't mean that we're clear sailing either because it could be here for a while, so unfortunately equity investors, it's still all about what happens with interest rates. >> yes, unfortunately, it kind of all begins and ends with rates, and the volatility in the yield curve. so i think what was helpful during the fed meeting in november during the treasury refunding announcement that week and with the jobs report is that at least it took off the tail risk that yields could continue rising much, much higher. i think that was what was really paralyzing investors. >> for good or for now? >> i think for good if you align with our projections, which is that inflation continues to moderate from here.

we could be speaking by the end of the first quarter of headline cpi with a two handle and then by the middle of next year core cpi with a two handle. i also think in terms of the deficit and the interest cost discussion, there's a lot of that that's understood. now we got it. it's here to stay, but there's already a substantial risk premium embedded there in long end yields. i do think at least taking off that tail risk was helpful. it allowed investors to come back in to take opportunities of more discounted valuations, but still for now pretty limited to long duration kind of mega cap tech, weight loss drugs still pretty, pretty concentrated. i think what will be more helpful is in the weeks ahead, in the couple of months ahead when we actually start getting conviction of exactly how much our yield's going to drift lower, and that all really is about a discussion of the fed closing the door for good on

further heights and investors actually taking into account rate cuts in the years ahead. >> so your asset management chief market strategist, does that mean at this point you would tell people, if you have young people that are -- that like the stock market, are you insisting they extend duration and buy bonds? >> ron baron never bought a bond. >> i've never bought a bond. >> can't you figure out something in the stock market that's going to do better than 5%. >> that's his argument. >> if you're that -- you need a night-light, if you go to bed every night you need to keep the lights on. >> there are some people who need fixed income. >> but you can get the return of your money, i guess, it's important, but when we see the dow go from 800 to 30 plus thousand -- >> and i will say buffett basically says the same thing. >> yeah, i agree. 5%, that's the best you're going to get is 5%, and then if rates

continue to go up, you're not even going to get that unless you wait until the end. >> i think if you think about the growth area of your portfolio where you're really going to compound your wealth over time, that's absolutely going to be risk assets of which equities is the main one. >> but bonds are risky too. >> well, bonds have shown to have some higher volatility than we got used to there for 15 years or so. they still have less volatility than stocks do. >> a 30-year might not. >> and if you think about actually the role that bonds play, it's about income. it's not about growth in the portfolio. and it's about, yeah, keeping investors invested in the stock market when you actually do get that 10% correction once a year or that 20% correction every once in a while, at least you have a little bit of a balance somewhere else in the portfolio. and when it's about inflation fears as we discovered last year, when it's about growth

fears and it's natural. we'll start at some point talking about a real recession fear again. so absolutely the growth piece of the portfolio are stocks, are high yield bonds, are growth year bits, but we do still think you can have a decent role for bonds in income and some ball lballast in the portfolio. the thing is it's not cash, which is where we see a lot of investors looking at the moment for that income, that ballast, who knows where we'll be six months from now, 12 months from now. the biggest risk next year and beyond, it's a reinvestment risk. there's a need to start extending a little bit the duration there to at least capture that income benefit for a little bit longer. >> if we really can take the higher rates off the table, aren't we at least saying we're either going to be in almost a no growth economy eventually or even a recession? is that sort of what we're saying? i mean, to thread the needle to

a nice move down to 2 to 2.5% gdp, that's never been done, especially with conditions -- i mean, financial conditions are tightening, are they not? >> they are tightening, whether you look at the senior loan officer survey that came out last week that shows tight credit conditions or whether we look at a broader financial conditions measure that takes into account not just rates but the dollar as well and credit spreads, so we do see next year a slowdown in the economy from the very boomy, boomy pace of growth in the third quarter. we do think as a base case we could do 1.5, 2% growth. i think for the fed that's actually a welcome slowdown. chair powell did highlight that as a condition they're watching for. it would be good to see this week when we get retail sales a bit of that normalization in consumer spending. i also think for lower rates, it's about inflation, right?

if we're right and we're talking about a two handle on headline and core inflation next year, we could even end the year with core inflation closer to the low two handles. that combination opens the door to fed rate cuts. and yes, they think they can start slow. they can take a nice easy step down, but really, the odds are 2025, 2026 they'll have to go faster than they expect, and that's priced in in the market, which is meaning we're not going to stay at 4% rates through 2026. so good to capture them now before investors price that going lower. >> so next year do we need earnings to go up to the extent that people think they will or would a plateau in rates allow multiple expansion? do you expect 2024 to be a better year for stocks? >> we do expect 2024 to be a good year for stocks.

>> because of earnings or multiples? >> i think it's a combination of both. i think if you look at the multiple for the market cap s&p 500 it's back to a little over 18 times. that's not that exciting, but really the conversation is if you take out those top ten stocks, you actually have a fairly valued market, so you could see a little bit of multiple expansion for all the other stocks within the market. the conversation about earnings expected earnings about 12% for next year. it's natural for that to start a bit too high and get revised lower as the year goes on. really, it will depend on how much companies are able to maintain these pretty good margins they have. so we do think maybe we do a little bit less than 12%, but not too much lower. i think that's the main comfort for investors is not just the conversation about the economics or the top-line growth, but the fact that we've already seen an earnings recession, right? we're actually starting to see

earnings growth again for the first time in three quarters. >> if you write a piece for jpmorgan, will you use the word growth year? >> growth year? >> you used growth year earlier. >> it is a word. >> there's another word you used too. >> will you use that if you actually write it? >> it's a word. >> was it a new one? >> yeah, there was something else you said. someone in the control room told me. there was another one you said i was like, hmm, that's a good word. >> g-r-o-w-t-h-i-e-r. >> growthier. >> and it is in the dictionary. every example of it is a stock market or someone who's in this business. >> i think i said the growthier part of your portfolio, the one that's going to grow over time. >> you used that as an adje adjective. i think it's okay though. do we just embrace it? >> i think we wrap ourselves around it and go with it.

>> i'm not going to refudiate you. it's part repudiate and part refute. it's a damn good word, if it's not a word, it should be. >> it should be. i'm going to stick with it. >> thank you. >> thank you. when we come back, house speaker mike johnson pitching a plan to republicans to avoid a government shutdown this week. we'll talk about that with p pimco's head of public policy to try and find out what it means for the markets. and later "new york times" columnist james stewart will join us to talk about the house of mouse, e thfuture of streaming and all things media. we'll be right back. >> announcer: this cnbc program is sponsored by truist securities, experience expertise execution.

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welcome back to "squawk box." south carolina senator tim scott has suspended his campaign to be the republican presidential candidate. he acknowledged that his strategy was not working. the announcement was a surprise. multiple staffers told nbc news they got no warning he was

ending that campaign, finding out only by watching him on the "today" show. really we're down to five, i shouldn't say four. four on the debate stage. five in reality. >> right! or maybe there was only one the only time, so there. >> in the meantime, house speaker mike johnson proposing a two-step stopgap funding bill to fund some agencies and programs until january 19th and then continue funding others until february 2nd. this approach excludes the military aid that's requested by president biden for israel and ukraine and that's got some in the senate keind of raising bros too. i want to bring in libby cantrill's pimco's head of public policy. i've heard some democrats say they think this is gimmicky but still say they might support this. >> that's exactly right. senator majority leader schumer has said positive things about this saying it could have been much worse. it could have actually included

some spending cuts, some policy riders that would have been basically poison pills for the senate and white house. effe effectively, this is exactly what speaker mccarthy pushed forward at the end of september. this is a clean continuing resolution. as you said, funds the government until january and then until february respectively, depending on the appropriations bills. the ironic thing here is that of course speaker mccarthy got ousted for doing something very similar. speaker johnson probably is in safer territory, but this for all intents and purposes is a clean continuing resolution that has, i think a high chance of passing in both the house and the senate being signed into law. but, the big but here, it will pas pass. it will have to pass with democratic votes. >> mccarthy said this is not about what i'm doing. it's about personal things. >> yes! with certain people, this kind of plays into that as well. >> exactly. >> johnson saying it this way. mccarthy said it this way. i mean, it's the same thing.

>> yes. >> but he somehow is probably more conservative than mccarthy and got unanimous -- because of the mess that led up to that final speaker vote. does he still have some of that honeymoon period? >> there are a few advantages that speaker johnson has that speaker mccarthy does not. he had never been a chairman or a ranking member of a committee. he'd never been sort of in the mix in terms of these negotiations. >> when people said he had no bag baggage. >> he's only been there for seven yeerks. he in this respect it actually helps him, so to your point, yes, do i think that he has had a honeymoon period? is that probably near the end? most likely. and i think we will probably see that sort of come home to roost in sort of january and february when you actually have to see these full appropriations bills.

>> i have the a little better about what he was doing when you see this, like, he's here to govern and legislate toochlt he wants to make sure the government stays open. >> i think the bottom line for markets and investors and our clients, it is unlikely that we see a government shutdown come friday. it is very likely that, again, we see these things pass with sort of full support. now, republicans on the right flank are going to be upset about it, but for kind of the bottom line here is that we see the government funded at least until january. >> the judd gregg was on and said that even the conservative republicans freedom type should love this because it actually frees the spending for half the fiscal year. if the democrats get wind of that, then they're not going to support it. judd's point was pass it and get it to the senate and then it's in their court and they're going to have to do something. >> yeah, a bit of a different perspective on this because 2023 the fiscal year was elevated

from what 2024 was supposed to be -- >> keep it where it is. >> yes, right, so but the debt limit bill actually cut spending, just very marginally on the nondefense discretionary side, so this is actually i think more of a boon for democrats than it is for republicans. but i think that kind of the bottom line here is that people are sick of this back and forth. they want to get to the business of legislating. you know, something that speaker johnson did do was sort of staggered approach. but he also doesn't include any funding for ukraine or israel. republicans, you know, especially in the house freedom caucus wanted that to be dealt with separately. >> will this pass the house without any democrat? >> i do not think it would pass on a pure republican vote no. >> they lost chip roy and mpg suppose lid. >> several house freedom caucus folks intimated they're not going to vote for it, and also importantly, this is a little wonky, but usually republicans can lose four votes and still

pass a bill. because there was a special election that happened in rhode island, democrats actually have more votes right now than -- they have a full roster than republicans, they have a special election in utah at the end of this month. that means effectively they can only lose three votes versus the usual four. >> how many democrats would vote? >> i think a lot of democrats vote for this. >> you do? for this one. >> i do. i don't want to prejudge this. we have to go through rules committee. that will be sort of the first test. i think if it gets on the floor of the house, folks want to go home. >> that's the end of mike johnson then. >> we'll see. i think it makes -- >> i mean, i hope not. but. >> january appropriation -- >> that's part of what sunk mccarthy, sfliegt. >>. >> it's exactly what sunk mccarthy. to your point, there were other personal issues that were related to mccarthy that johnson does not necessarily suffer from. >> what happens in january when all of this really -- we're

kicking the can down the road again. >> we're kicking the can down the road. house republicans didn't twant this done in december, that's when the big mega omnibus votes get done. >> they want to go home for the holidays. >> there's enough for the folks on the right to vote for this. this is effectively kicking the can down the road. >> does this mean there is no aid for israel or ukraine, or that will be handled separately? >> it will be handled separately. my concern is because the house has been in session for ten weeks in a row, which may not feel like an aberration for those of us who work every day, they want to go home, they want to go back to their districts. they want to go with their families and see their constituents. i don't think they're going to be in washington very much up and sort of through the new year, so that could potentially delay both the ukraine and israel aid. it depends on, again, maybe some

of the concessions that speaker johnson has to make to some republicans in order to actually pass this with -- he will try to get as many republicans to support it. i just think that will be sort of effectively difficult. >> libby, thank you. >> thank you so much, appreciate it. and a programming note, we're going to hear tomorrow from the speaker himself, mike johnson. he's going to be joining us live right here on "squawk box" in the 7:00 hour. one of these dates is february 2nd. is that like a joke? that's ground hog day. >> exactly. >> it gives them an excuse to just do it again. >> i saw my shadow. we're out. >> can you believe you can make a movie out of one of the most successful comedies in history out of ground hog day. >> yeah. >> there's marvel type movies and there's creative movies. that was my point. you can't just keep doing this superhero. >> bill murray said that script

was -- the kid who wrote that script was like inspired and genius. >> had to be. >> that's how you get great -- no superhero movies this year. okay? >> i don't disbelieve that. coming up, a check on the stocks and cnbc teaming up with the national retail federation and data insights company affinity solutions to launch a monthly tracker of consumer spending. we'll bring you details after this. check out futures before we head to break, 39 points down on the dow. we're coming right back.

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welcome back to "squawk box." i'm dominic chu with this morning's big premarket movers. we'll start things off with a dow component that's doing some very heavy lifting this morning. that's boeing, which is up just about 3 1/4 percent right now. just worth about 50 points to the dow if these premarket gains

carry into regular trading. a bloomberg report says that china may resume purchases of its boeing 737 max jet, perhaps indicating a warming of relations between the u.s. and china. now separately boeing has inked a number of deals for aircraft orders with a host of airlines including em rats, sun express among others at the dubai air show. we're also keeping an eye on shares of plug power, which is down 2%, around 770,000 shares of volume. it dropped 40% in trading yesterday or rather on friday. the hydrogen fuel cell company reporting quarterly results that missed estimates and said it may have a difficult road remaining solvent in the coming year without the ability to raise more capital, multiple analyst downgrades have occurred in response to those headlines. end with shares of hp inc., around 75,000 shares of volume. this is the maker of personal

computers, printers, other tech hardware getting help from some analysts at citi who have upgraded that stock to a buy rating. they cited continued improvement in the pc ecosystem, better cost management, better trajectory for margins and the potential for more share buybacks in the future due to possible future cash flow trends. watch hp inc. up 1.5%. keep it right re, 'vhewee got a lot more movers, a lot more news today. "squawk box" returns after this commercial break.

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♪ cnbc is teaming up with the nrf and data insights company affinity solutions to launch a realtime monthly tracker of how much and where american consumers spend each month. steve liesman has the details. >> a decade ago, affinity solutions, a little known company launched into a little known business, linking credit

card holders with incentives like getting 5 bucks off a cup of coffee for using your plastic. today affinity is the largest consumer purchase data insights company with a massive database that tracks nearly 9 billion credit card transactions annually from 140 million credit and debit cards and more than half a trillion dollars in sales. the power of that data is combining with the national retail federation, and cnbc to create the cnbc nrf retail m monitor. a monthly gauge of how much americans and where americans spent each month. >> it's allowing you to see what the market is really doing. >> the existing retail data from the government uses surveys. the retail monitor stopped revise because it uses actual transactions every month. >> the important thing about this is we're going to get timely information about consumers. as you know, it represents about 70% of all u.s. economic activity. >> becky, i thought of you when

we were creating this index. you and i sat together like 20 years or more, 25 years ago. >> a little more, yeah. >> and we used to argue about what was really going on in the economy, and now i think we have a really good, i guess mousetrap is the best way to put it. >> i was thinking the same thing. >> enough about what the data is. let's see what it says. the cnbc nrf retail monitor powered by affinity solutions launches in october with a decline of 0.8%. core retail, we take out restaurants for that, down 0.03, retail auto and gas month on month, 0.23, year-over-year, core retail minus 0.3 versus a positive near 1% last quarter. let's look at the trend over the past year. you can see that it's been coming down, which is, by the way, a little bit counter to what we're getting in the census data, which has remained split strong.

the data actually bucking the trend of the government data which is showing surprising strength. looking further at the data here, what you can see is that gasoline stations down 1.67. that's what you'd expect. appliances down 1.38. furniture and home also down as well. sporting goods and non-store retailers as well as health care that was up as well, those three sectors doing well. guys, joining us now we have with us max shay, president and ceo of the national retail federation, and john than silver founder and ceo of affinity solutions. jonathan, i want to start with you because during this process of creating this monitor, finding out what you guys did was one of the most interesting things. tell us what you do and why you see 9 billion transactions a year? >> yeah, so affinity solutions is the leading consumer purchase insights company. we had an idea years ago of bringing banks and retailers together to get the retailers to fund the rewards programs for the banks.

that resulted in us getting all the data from thousands of financial institutions. that data is incredible. it's 140 million cards. it's 8.8 billion transactions a year. we track 4,200 retailers, and it's giving us visibility and insights that are incredibly valuable to retailers. we have the leading consultant firms, marketing companies. >> and wall street wants your data too. you sell your data to wall street, they're already using your data. >> retail is our big focus today. >> tell us what the nrf's interest is in putting out something like this. >> our interest is in telling an accurate story about what's happening in the retail industry and how consumers are behaving from month to month and year to year, and looking at that over time, especially because of the economic implications. there are also policy considerations as well. we've talked through the pandemic and the before times about all the various holiday seasons, the holiday weekends, the back to school things. over time having accurate data that's reliable and is

contemporary that looks at retail in a modern way, i think is very important. >> i want to add one thing, becky, which is really important. as a person who has followed the census data over many decades now, their data can be revised as big as the actual number comes out. we are not revising this data, there's no need to because we have the actual data -- it's actual transactions. sorry. >> the only thing i was wondering, are you risking irritating some of your retailers by showing that somebody's doing better than somebody else, or is it going to be anonymized so you don't know beyond a category? >> is this an anonymized look across the industry. the truth is they already know. a lot of this, to steve's point as you go backwards and one of the reasons affinity works well, over time we can compare this not only with the revised census data but with company's actually reports as they do their filings, it correlates, 0.92,

0.94. >> it goes up. >> what i'm saying is it won't be like showing that walmart's -- to target or macy's losing out to kohl's. >> will not show that. >> it won't, but we will make available for individual retailers, data as granular as individual trade areas and stores for their benefit. but we won't be announcing something more broadly. >> we can also -- we will over the coming months drill down into spending by income, spending by age, spending by geog geography, when there's a big snowstorm, we'll be able to drill down into individual areas and say, okay, this area got hit hard, and here's what you might expect. >> this number's going to be better than the retail sales numbers we got. >> i don't want to denigrate the government, which i know tries hard, but look, this whole thing started during the pandemic. i was into the high frequency data before the pandemic. all of a sudden the pandemic hits and we need to know, are people on the subways or not? right? we need to know are people using card not present.

so one of the things about this data, in my opinion, we're going to get excellent internet sales d data. >> that's been one of the things that's been lot is where the sales go. it's survey data that gets revised over time and it based on the naics codes that are very inflexible. think about a category like luxury that cuts across -- there's travel, there's dining, there's jewelry. there's watches. there's handbags. there's apparel. so looking at what goes on in a category, and then also looking at how much of that is done online, how much of that is done in store, i think this data lets us look at it in every way possible. >> i guess you can see if somebody is starting to trade down within the data too. if families are getting hit by inflation. >> that's one thing that i think jonathan can speak to that. looking at this as steve said on a demographic basis. so what's the bottom quintile or

the middle quintile or the second or third, and that's much harder to figure out with the census data, and we'll be able to manipulate this and look at it. >> it's been a lot of guesswork to this point. >> we're able to show customer journeys. people always talk about online or offline. people jump around. they go from e-commerce to brick and mortar and back again. we can see all those customer journeys in our data. >> before we go. matt, holiday season coming up. first question i have for you, is october part of the holiday season now? >> that's what we talked about. i think increasingly and courtney reagan asked this question when we did our release a couple of weeks ago. it's hard to argue against october being included, at least informally as part of the holiday season because things, consumers are behaving differently. that's one of the things we'll be able to look at with this data as we go forward. we know things have changed dramatically in the last couple of years. i'll leave it out at this point. retail rers are moving their sas earlier in the season and

customers are changing their behavior. >> that's cheating. i i mean, i will admit i did holiday shopping in october, but how can you possibly know what i'm buying for holiday and what i'm not? >> maybe we'll know. we'll know the categories. >> we can see -- so we have a belief, a strong belief that unless retailers have visibility in what their customers are doing outside their own stores, so we can see everything. we can see what they're buying by store, by competitor, by channel. we can even slice is and dice it by household income, by age, a variety of different ways to cut it. >> we know exactly what you're doing, becky. you think they don't know? >> i have the data. >> it is anonymized. >> we start off on a negative, i wanted to start off on a positive. but the idea that we're cooling also, the idea from my standpoint that maybe retail sales, if you look at our month over month has not been as strong as the government data, and i will just add before jonathan answers, our data correlates better with the revised census data, which is i

think good news for us. go ahead, jonathan, what do you think? >> september to october was flat, and it's a little bit down from september -- from october of '22 to '23. r last year we were pretty high inflation. it's not a fair comparison. it's down, but if you do it in real dollars -- >> you're talking about ex gas? >> yeah! if you look at the data, our data versus the census data, we're much less volatile. i don't know why that is. we haven't figure thad that out. the white line is the census data. our data's -- which i think makes a lot more sense about how people spend. i don't think they drastically, except when you get into the holiday season, change their spending pattern. >> it comes every day. we get it every single day. >> i thought we were already in the holiday season. >> that was the question. >> you just said when we do get into it. are we in it or not?

i have one more question, so the holidays season means things you're buying to give in mid-december to someone? i mean, halloween people buy a bunch of stuff for halloween. and then you buy turkeys and stuffing -- >> ours includes both. it's november 1 to december 31. becky, to your question we have no plans to change that and include october. we're with you on that. >> you have one -- october 31st, that's my boy's birthday. believe me, the holiday season starts. >> don't want to miss that. >> i think january is more part of holiday. january was super strong. >> you spend gift cards and other stuff. >> i think it should be holiday season always time. >> three kings day. >> you believe that? >> that's what you should stick with. >> one king day. >> yeah. >> it used to be the epiphany. used to be three kings. now january 6th means something different. my birthday, good lord.

>> gentlemen, good-bye. >> good-bye, steve. >> look forward to seeing the data. "new york times" columnist james stewart joins us to talk about the company's latest silver screen blunder and much more. it says that in the prompter. >> i know. >> and a reminder, you can get the best of "squawk box," follow squawk pod and listen anytime.

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welcome back to "squawk box," everybody. the futures this morning down but just slightly. dow futures off by 30 points. s&p futures down by 7.5. the nasdaq off by 30. market flash digital world acquisition corp. says there's substantial doubt about its about to continue as a growing concern. that is the blank check company. the plans to merge with former president trump's social media company, that's back saying it lacks the financial resources it needs to sustain operations for a reasonable period of time, so lots of questions about what happens to the truth social world and all that. joe. >> just going to have to see how much -- this is about football, not basketball, but there was a

recent basketball coaching contract that was just unbelievable, but this one is staggering. texas a&m has fired head coach j jimbo fisher. he had some lackluster performance since he was hired in 2017. the move was a surprise given his buyout that we're talk about, $75 million the school is going to have to pay him to get rid of him. according to the terms of his contract, texas a&m will owe fisher $19 million within 60 days and pay him $7.2 million annually through 2031. the buyout is nearly triple the highest known coaching contract buyout at a public school. and a&m, it's like second or something in student enrollment. i mean, it's th-- it is that bi of a school, and it's not just

agric agriculture. >> that's crazy. $75 million, though, at a public institution, that's going to draw some scrutiny. >> right. >> yeah. >> what do the ivy league schools spend all their endowments on? i mean, we are talking billions at those places. >> part of it's the facilities. part of it's science. to be honest with you a lot of them are buying hugs about of processing power, you know, if you want to attract an amazing professor in certain types of areas, there's like -- you know, russian literature, that's not expensive, you know, certain folks who need certain types of telescopes and all sorts of other things. >> m.i.t. or something. >> that's a whole other level. >> never goes down, colleges are on my crap list right now as you can imagine. >> when we come back, disney's the marvels landing a thud at the box office after bob iger's call for an overhaul at the

company's studio business. we will talk disney and other media stories right after this. and later exxon mobil announcing it plans to start production of lithium, that's a key component of electric vehicle batteries in arkansas that's coming by 2026. exxon mobil low carbon sutolions president dan ammann will be our guest. "squawk box" will be right back. . - so, the question is... - cyber attack! as cyber criminals expand their toolkit, we must expand as well. we need to rethink... next level moments, need the next level network. [speaker continues in the background] the network with 24/7 built-in security. chip? at&t business. i think i'm ready for this. heck ya! with e*trade you're ready for anything. marriage. kids. college. kids moving back in after college. ♪ finally we can eat. ♪ you know you make me wanna...♪ and then we looked around and said,

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you're probably not easily persuaded to switch mobile providers for your business. but what if we told you it's possible that comcast business mobile can save you up to 75% a year on your wireless bill versus the big three carriers? it's true. plus when you buy your first line of mobile, you get a second line free. there are no term contracts or line activation fees. and you can bring your own device. oh, and all on the most reliable 5g mobile network nationwide. wireless that works for you. it's not just possible, it's happening. next up on "squawk box," disney making the most of its

strategy. investors waiting to achieve both. joining us, "new york times" columnist. longtime disney watcher. great to see you. >> good to see you. >> last week you saw what he said he plans to do. do you think it's enough, and when i say, "enough," the question enough for shareholders, for nelson peltz and others at his neck, if possible. where does this all go? >> i think last week's results show disney is making progress in an extremely difficult environment, because none of the big problems have gone away, and we can layer on another problem today. it's been -- >> marvel. >> the failure of "the marvels" you've got to ask about the whole franchise and creative mod's. pixar underperforming, disney animation underperforming. core of the company is creative endeavor as iger already said.

looking at the positive, i think that the ultimate solution to the streaming problem is you've got to raise revenues, cut costs. because they're losing hundreds of millions of dollars with the status quo, and disney is making progress there. actually grew subscribers at a time when there's as asterisk on earnings because of not buying in content. warner lost subscribers because weren't adding enough material. disney chugged along with that. one reason they're doing that, they haven't been making anything with the strike and i think lesson they've learned, we have to cut. iger saying, well, focus on quality. doing too much and will do less. i think that's just a euphemistic way of saying we'll try to hold spending down. >> what about the idea selling lineal channels? how do you do that? separate them from content that runs over them and what the

prospect of that is? >> iger said there is, making some money, because they create some content for the linear channel and then move it to streaming. discovered, face it, streaming is a learning curve. you don't have to originate everything on-screen anymore. a lot of people don't see it on the linear channels and it's new to them. during the strike looking at old sto stuff on disney an you are perfectly happy. other insights there. the other hand, this isn't a new idea and lineal channels are decaying. they depend on ad revenue, cyclical. numbers going down. some day, cable as we know it will probably go away. the other hand, there is a prize in that we have cash flow. people think looks like maybe an attractive business for private equity milk it while it declines.

a more attractive proposition. practice ticksly zero interest rates there, then there is value there. no question. talking selling it. is there somebody who would buy it? the problem companies interested in growth are not looking for a decaying asset like that, and the more investment world private equity people have the problem of hiring, because rates to the value of those assets have gone down. for now thinwell, might as well make the best of it. >> jim, started describing this idea that all of the media companies realize now they have to cut costs and maybe be more selective what they're actually producing at this point. sounds like a really smart play, but is this similar to the airline industry? you're only as smart as your dumbest kpet around netflix is out there. not the dumbest, just in the best position and don't have to have those same restraints. how do you compete when netflix isn't playing by the same rules? >> i agree. netflix, amazon, maybe apple,

wild cards in this formula. got two tiers. companies with the really, really deep pockets, which include netflix, am sazon and apple and everyone else with disney leading the pack. can the others pare back? could we find a path where we pretty significantly reduce spend and yet still hold our -- >> like the frontiers and the spirit airlines, basically as everybody else? >> not really going to work. a good analogy. the problem historically in hollywood. people come in, make hits? why wasting money on floss? they think they have a formula for making hits and disney seemed to have the formula with the marvel and pixar thing. one section after another. again we're seeing, no.

can't just make hits. iger said reduce content. the risk not produce hits. kind of like sort of airlines but like drilling for oil. put the drill down does it find oil or not? where do they sit watching this, the impact and will they pursue a proxy? >> you know, these people have on their side the stock has done badly. that's why they're there and probably have a lot of shareholders really wanting them to do something. iger said he's met with peltz and hasn't heard any great ideas. i -- if peltz will wage a fight again, had decented? s. hardly had an original idea, now doing more cost cuts. iger says, haven't heard

anything from peltz and i don't think anyone else has either and what does peltz really know about the entertainment business? maybe he has a secret. everybody's waiting for a magic wand that's going to show the way to profitability in streaming. if he's got it, well, more power to him. if he does, he does not share that widely. i certainly haven't heard it. >> jim stewart. his magic this morning. appreciate it. thank you, sir. >> good to see you. coming up, another -- another -- shutdown is looming. house republicans a stop gap funding plan to avert a government shutdown set to begin this weekend. we're going to talk to congressman andy harris for the latest. later, talk to former kansas city fed for her take on rates, the ecomanony d "squawk box" coming right back. go deeper with thinkorswim: our award-wining trading platforms.

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good morning. big pro douche market catalyst on the way this week pap slew of retail earnings with the backdrop of a looming government shutdown. speaking of the latest d.c. standoff speaking with a representative whose two-tiered funding brainchild is now the proposal on the table from house speaker mike johnson.

exxon/mobil making a play for one of the most important natural resources necessary for transition to electric vehicles. details ahead as the final hour of "squawk box" begins right now. good morning welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square. apparently there was a weekend. >> we blinked and missed it. >> andrew kernen along with andrew sorkin and becky quick. the problem 3shgs 30. equity futures weaker down 32 points. great week, last week.

seemed like this week, but it was a very solid week for equities. a lot of it had to do with what happened the week before that, also seems like yesterday, when we saw the jobs number, a little weaker and we saw funding a little better. rates dropped precipitously. backed up 4965. among today's top business stories watching shares of danish drugmaker novo nordisk. obesity medication wegovy and a large trial reducing risk of serious heart problems in participants by 20%. talk more about this later this hour with novo nordisk analysts covering that company. also watching shares of boeing. emirates airline announcing an order of 95 planes from the aerospace giant a value of $52 million including 90 770 planes

and five additional 787 dreamliners. confirming orders from general electric, to power the planes. china may end a freeze on the max aircraft according to a bloomberg report saying the chinese government is considering unveiling a plan at the apex summit in san francisco. president biden is expected to meet with chinese president xi jinping on wednesday. >> hmm. so you want our planes? we'll see about that. >> i think we want them to buy them. >> we do. we do, but let's talk. let's talk. more balloons. let's get back to the broader market with major averages off the second straight positive week. cnbc's mike santoli joins us. what are you watching? >> joe, index level you mentioned, s&p 500 made good use

of this calm in the bond markets, solid credit conditions. all the rest of it. gotten the s&p back up to this 4,400 level, top of a five-month box. only times above that were for a time in july briefly in august when obviously yields were on the way up. just after that. a bit of a test here. a lot of people are detracting style points from heil the s&p gotten here. you know, focusing on hyperconcentration of the performance of the index in a handful of cluster. very largest stocks. it's true. not the most inclusive move or a grab for all laggards in riskier stocks out there. so far looks like a good view that resembles a lot of late october lows in the past. see if it can follow through on that as the macro picture, perhaps, clarifies a little. inflation expectations, got attention friday with university of michigan consumer sentiment survey showing a big jump in perceived inflation risk over

the next five, ten years. the market-based break-even inflation rate. essentially as people buy inflation preshgz securities, what they're pricing in implicitly. nothing going on here. just above the 2.3% level. been here a while. not obviously a forecast what's going to happen, but shows inflation is viewed by the markets as kind of last year. we get cpi tomorrow. expected mechanical reasons why the core will be sticky. head youlines softness. see how that plays through in terms of market pricings. earnings the other way out of the macro mess. 12-month forward basis, peaked higher in mid-single digits. fourth quarter estimates cut dramatically, through the course of the third quarter reporting season. air pact to deal with. see if it continues. for now inflection point from an earnings recession to positive growth it doesn't kind of turn

back lower on itself right away. >> all right. mike santoli, happy monday. we're trying, carrying on, my friend good to see you. >> yep. yeah. more on the markets. bring in liz young head of investment strategy at sofi. good morning to you, liz. you heard what was said. do you agree with that and what are you telling people to do at this particular moment? >> good morning. well, i liked what he said about detracting style points for what's happened in the rally. same old story. a couple days we got excited that breadth expanded smaller cap stocks participating. other sectors participating, and then reversed the other direction and we, again, had mega caps leading the way in this big spread among large caps and small caps. although it's exciting to see a rally and this period, if we did see the last hike in july, this period between the last hike and the first cut, the market does tend to hold up pretty well over

that period. at least as far as history is concerned. it's possible we don't have anything catastrophic that happens in the meantime. what my concern would be is that as we continue to get inflation data that's cooling, and as we continue to get labor data cooling, what's happening in the rates market is that we're pulling the cuts forward. so those cuts as the market expects start to get closer and closer in time, which is exactly when the market usually gets trepedatious about the direction. so unless we have some bad news about inflation this week, it could, again, be kind of a quiet one, but watching closely what's happening with those expectations. >> you're like almost stipulating that a cut is in the offing, that there's no chance of a raise at this point? >> i wouldn't say no chance, but i think that the chance of it is much more about messaging than it is about actually hiking. i don't know there's really going to be much difference caused by another 25 basis points, even if they did do it, but they have to message it's

still on the table as an option and that they're still willing to do it if they have to, because if you look at even the core measures of inflation cpi core still is expected to stay 4.1% this week. core pce, fed's measure, not expected to come down through end of the year. have to message willing to do it if necessary. i think expectation of cuts not being until much, much later in 2024 or even 2025 is a little bit unrealistic given that we already have so much tightening in the system and the leg effects are starting to come through. so that will -- >> risk-on environment, how do you think about some of the magnificent seven, if you will? are they still magnificent in this kind of universe? >> the market started reacting more rationally, to the way yields are moving. you see this negative correlation back in effect in the sense that yields are coming

down. growth stocks go up. that's rational behavior. however, if yields come down and we start to confirm or get more and more worried about recession actually being reality, then i think all stocks across the board, turns into more a of risk-off market rather than risk-on. we don't know the answers to that yet. until we know the answer and until still comfortable thinking a soft landing is possible, then i do think that those magnificent seven stocks and growth stocks in general will benefit from rates coming down. as rates come down as the yield curve restippening and come down for fear reasons, risk in general is hit, i think. >> liz, a number of folks come on. especially the last couple weeks a ace a saying buy bonds. friday ron barron never owned bonds his entire life or career. what would you tell people

jan. >> a two-year above 5%. a good yield to wait sit around what's going to happen. shotter end of the curve it is an attractive entry point. eve an ten-year above 4.5. seen a big drop in yields longer end of the curve. if we'reworried about recession and thinking that things will continue to cool, then i do think it's okay to have an allocation to bonds. i think at some point yields will have to come down. even if we're in a higher for longer regime. probably come down from this point and at some point the yield curve does have to stop beinginverted. suggesting a raggy in bond prices shorter end of the curve. >> leave it there. thank you. >> thank you. still to come this morning, the latest on the negotiations to fund the government. time running short for both parties to come up with a deal that can make it to the president's desk. plus, we will speak with former kansas city fed president esther george with another big

beak of economic data. heading to a break now, get a few more of today's top business headlines in. first up alphabet's google unit considering investing hundreds of millions into character a.i. an a.i. chatbot start-up according to reuters a report from there. a cha lian-based air looirch is offering customers to tame toll ar tina to see last friday's taylor swift show flexibility postponing tickets because of dangerous weather. and tyson foods posting fourth quarter earning ace bov wall street's forecast. the revenue light. tyson sales forecast the next year also below what the street expected. that stock off now by more than 4%. stay tuned. you're watching "squawk box" and this is cnbc. hey choo to help power operations for one of the world's largest racing events.

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welcome back to "squawk box," everybody. futures are a little weaker this morning. not by a lot. did have two very strong weeks leading up to today, but dow fu futures down 47. s&p over 8. nasdaq down by about 35. house speaker mike johnson out with a new government funding plan. we've discussed on the show already. this is an attempt to avoid a

shutdown beginning next weekend if there's no deal in d.c. instead of common practice extending current funding levels for all government agencies, the speaker's plan would fund some departments through january 19th and others through february 2nd. approach called a ladder to continuing resolution and a special interview with speaker johnson tomorrow at 7:00 a.m. eastern time. joining us now, republican u.s. congressman andy harris. originally he proposed the ladder's cr to speaker johnson. we're going to speak to the speaker tomorrow but should be speaking to you, congressman, and we are, as a matter of fact. we have you to thank for this, and we'll decide whether that, we should thank you or blame you at some point. >> that's right. you know, i think moody's sent a strong signal to congress, better get their act together, look at things in a differ way. look, democrats want a single,

you know, a big cr ending just before christmas so they can do what they did last year, which is shove in $1.7 trillion omnibus spending bill withes 100 billion by the taxpayer. my plan doesn't allow them to do that and begin to return to the normal processes of appropriations process in washington, and that's what we have to get back to, because we have to deal with this deficit and where we start is out of discretionary spending through a normal appropriations process. >> it's so difficult to envision how to do anything at this point, congressman. i've seen one democrat said it's gimmicky but made positive comments about it. majority leader schumer, minority -- yeah, majority leader. gets confusing too. majority leader schumer said

there are positive things about it. who's it going to be tougher to convince? freedom caucus guys or democrats? guys and gals? >> in the end, i think rational democrats realize, again, because of the moody's downgrade we need to return to fiscal sanity in washington. this does not shut down the government. it solves that problem for them. it gives us two months to work on the four operation bills that come due in january basic lip with this plan. plenty of time. i can see a lot of democrats voting for this, and, look. some republicans aren't going to vote for it but this is the step we need. first step the speaker took, no more supplemental bills without being paid for. saving at least $100 billion to $200 billion next year. second step, return to normal appropriations process. this is one step along that way. >> former senator jed greg was on earlier and he really likes this idea, because he says that it does, you know -- free

spending to some extent. and that it's a win for republicans, and he says that you've got to patss it in the house to put it in the senate's court. democratic-controlled court. doesn't sound like something that would get a lot of support in the house? you think it will? pass and go over to the senate. then what happens? passes therened a the president signs it? >> well, look. i mean, it will arrive in the senate tuesday afternoon. i don't think the senate has time before the weekend to play games with it. i think they look at it and it achieves the goals they want to, which is not to shut down the government. and it basically allows us to, again, return to a more normal appropriations process. i don't see how they turn that down. >> former speaker mccarthy talked about, i think, matt gaetz and the crazy eight or something like that.

funny, rhremind so we use it, b are any of those eight going for this, do you think? >> look, i think some of them will. again, a lot of republicans said they never want to have what's called a clean c.r. no policy attached, things like that. this, again, gets us back on the path of fiscal responsibility by returning to a more normal appropriations process. not a completely normal one. hopefully that comes next year. i think sends a strong signal to the markets that congress is watching. we're paying attention. we looked at that moody's downgrade and said, yeah. maybe we have to change the way we do business in washington. this ladder continued resolution devonly definitely changes the way we do business in washington. >> speak to just a general sort of mood in the congress and specifically the republican caucus right now. sort of gut-wrenching watching

what happened to speaker mccarthy and then the subsequent, steve scalise and jim jordan, and, it was almost like a time for healing that brought in speaker johnson. even though he seemed to be, in certain respects, some of the things that he has put forth or stands for are even more i would think extreme that maybe speaker mccarthy's. how did it happen? how long does he have for a honeymoon right now and are there still hurt feelings at this point? can you govern as republicans at this point? >> sure. look, i think there are hurt feelings. again, speaker johnson is going to turn this ship around slowly. that's the way ships turn around. again, first step, hugely important. to say, no hoar supplement's appropriation bills without being paid for. the dirty secret in washington. how you get around spending

caps. that omnibus last year contained over $100 billion in appropriations above what the committees had decided they were going to spend. we have to stop that kind of flagrant abuse of that process. mike started it last week. we continue it this week i think with this ladder continuation approach allowing us to consider individual bills in order and this is the way, again, the way we should be doing business in washington. i think this is a great step. will it be passed with all republican votes? no. i think it will take a few democrat votes but this is something democrats can look at and say, yes, this is important. again we don't shut down the government, but we consider appropriations bills singly or in small packages not large omnibus bills. >> so speaker mccarthy needing democrats to pass some of his bills, that wasn't the reason

that he was out, or it's not going to happen this time, if speaker johnson gets some democratic support it's not going to be the same situation that happened last time? >> that's right. because with speaker mccarthy, what he put on the floor the same old same old. the same old business. it was a big lump sum continuing resolution that we felt was going to steer towards an omnibus bill. again, this avoids that problem. this gets us back on the path. is it a perfect bill? no. but it gets us back on the path. >> it's going to be tomorrow, you think? and will it be brought to the floor? if it's brought to the floor do we know it's going to pass for sure? >> look, i don't know, but we've run out of runway. fact of the metter getting it to the senate we have to pass it tomorrow maybe wednesday morning, earliest. i think goes to the senate senate looks at it, yeah, a reasonable compromise and i think it passes in the senate. >> where in, what part of maryland, must be out in the

boonies somewhere? they still elect republicans somewhere in maryland? where is that, congressman? >> i represent the northeastern, eastern part of the state. eastern shore of maryland. you have to cross the bay bridge to get to most of my district mts. >> it's nice there. congressman harris, appreciate it. thank you. coming up, exclusive details on the big bet e exxon/mobil is placing on the lithium battery. and promising drug results from that obesity medication. asking a top analyst what this means for drug stocks. get the best on squatpad and listen anytime. we'll be right back.

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news out this morning from exxon/mobil on a big investment on a key resource critical for electric vehicles. phil lebeau has a special guest. >> bring in the president of the solutions for exxon/mobil running this exclusive this morning on "squawk box." dan, announcing plans to begin drilling your first well in southwest arkansas at a huge, an area with a huge lithium deposit. give us perspective on the potential impact of beginning production that ultimately comes on line in 2027?

>> sure thing, phil. exciting news from our point of view. we look at this as a win-win-win. ramping up domestic production of lithium a critical mineral for energy transition. currently imported from elsewhere around the world. doing that with a much smaller environmental floodprint than than the way it's produced around the world today and drawing on experience and know-how inside exxon/mobil building a profitable and high-growth business. >> dan you know right now lithium price has come off considerably from where it was earlier in the year. last year. a lot of people think softer pricing will last here for a while. when you look out on the landscape. i know it's hard to predict any price of any commodity, but what do you see? >> very much taking the long view here, phil. look at the evolution of the electrification of the light vehicle, 1% of the fleet is electrified. 99% to go.

still a huge, huge opportunity ahead of us. we see quadrupling by 2030 and continuing to ramp up significant he. a large, long-term opportunity. certainly the way that we're investing in this, to build a business very much for the long term. >> dan, you and i talked a number of years when you were at general motors about the push at gm and with all automakers developing electric vehicles. right now hybrids are out-selling evs and the growth of sales for evs has slowed down. are you a little surprised at the soft patch, if you will? the slower growth rate for evs? >> i think we have to look at data, phil. third quarter in the united states, ev sales grew 50% year over year. a pretty good growth rate. we see that high growth continuing a long time. again, 1% of vehicle fleet today, we need to get, obviously, to higher percentage

long run. high growth sustained a long time. ups, downs, fits and stops but we see very much long-term opportunity and we're playing the long game here. >> do you understand the appeal right now for hybrids as opposed to evs? again, we understand that ev sales are growing, but hybrids are having a moment now where people are saying, i want that gas option. >> look, i think multiple alternatives here, phil. we'll see just as we look as the broader energy transition, all of the above strategy see it in light vehicles as well. growth if ev, we any it will sustain and a role for hybrids in there and take a very, very long time for the internal combustion fwleet leet to roll g give's the 1% overall setoday.

>> i'm not asking to comment on current situation at cruise, suspended operations and their waiting to see what happens with the state of california, but there is a broader question separate from cruise about whether or not autonomous vehicles will catch hold as many expect them to, let's say, in the next few years? based on what you know from all the years you spent at cruise and what you know about the development of autonomous vehicles when do you think that technology takes hold? >> well, phil, you know, i left cruise about two years ago. a little out of date. i think the big trends of autonomous, electrification, those trends will continue and the big variable you pointed out, what's thetime for those things to occur? what are the things necessary for these to unfold here? those big trends, betting on big trend of electrification through the growth of the business here today and again think it's a very big, very long-term trend. >> dan, phil didn't ask you the

comment on it but i would love to get your views given you're an expert and spent a lot of time at cruise. know this space super well. where do you think we sit with autonomy at this point? what happened at cruise and what does it say more broadly about the whole space? >> it's not my point to comment about cruise. ask them what's happening there right now. i think autonomy in general we said all along is a huge challenge. going to take a long time to solve that challenge. getting made and keep working on it. >> what is that long time is now? some people, two years ago looking at cruise saying maybe we're here. or two, three years away from it being adopted in lots of other cities across the country. now put on pause. is this another five, ten-year kind of period? talked to another last week said could be five, ten more years.

might be reasonable. i'm curious. >> clearly look there's work to be done. how long that takes, you should talk to the folks at cruise and others about that. >> in terms of ev, i know ev sales are going up, dan, but i saw, what? how much is ford losing per vehicle right now? and you've got the new labor agreements and the new structure. so all the ice profits going into something losing $60,000 per vehicle on. tesla continues to have fewer workers, more automation. and the government's, you know, pushes this transition and it's frankly not working because consumers don't want these things right now. you must -- humpouston, somethis not great and selling evs saying everything's wonderful? >> the key is affordability and making electric vehicles frankly

more affordable. average vehicle prices spike up for all vehicles since the pandemic. actually seen ev prices start to come down and convergence between ev prices and internal combustion vehicle prices. that's something will need to occur to get to larger scale adoption. ev sales today about 8% of total vehicle sales. 1% of the existing vehicle fleet. clearly very early days. what we've seen over the last few quarters is really the importance of affordability and, in fact, what we're working on here on lithium and having a low attractive cost production in lithium can feed into that afford ability equation. if not affordable it's not going to grow at the rate we'd like it to. >> beginning work with, lithium and with this facility in southwest arkansas, how do you

feel about the rest of the ev battery production infrastructure, if you will? everything from copper, oil, to the other key components there? do you look at that and say it's coming along as the industry needs it, or are there areas where you're worried? >> i think, you know, we were looking at the overall space and saw the opportunity in lithium particularly to begin domestic production. i think getting domestic production of these materials and components is really, really critical. seeing that ramp up and, again, really early days. we're viewing this as a, not just the next number of years but the next few decades. the time frame we see it unfold. get in early, lead the way on domestic production of lithium. do it with a favorable environmental footprint and set that as the standard and grow with the industry from there. >> dan good to talk to you again. been far too long. dan hammon, president of low carbon solutions for exxon

mobile. guy, back to you. >> great. thanks, phil. coming up, does the fed have anymore rate hikes left in it to help the central bankers decide. key inflation data we'll see coming this week starting tomorrow with october consumer prices. after our break, speaking with former kansas city fed president esther george. stay tuned. bcu're watching "squawk box" on cn. glad we did this. i'm so glad we did this. i'm so glad we did this. i'm so glad we did this. i'm so... ...glad we did this. [kid plays drums] life is for living. let's partner for all of it. i'm so glad we did this. edward jones (adventurous music) ♪

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welcome back to "squawk." watching bond yields. investors seeing stabilization rates in the end of the last week. more on the treasury picture, one and only rick santelli. what are you watching this morning? look at that two year. over, back over five. >> yeah. you know, the two year is back over five and the yield curve after getting very close to flattening out and potentially steepening and getting more normalized is reinverting a bit. all of this is important. look at interest rates, andrew, the last conversation you had about batteries and the future of batteries and what people actually want in the marketplace, it's very

important, and somewhat similar to the way i look at interest rates. look at all the debt we have and what moody's did, and we can consider that over timeful we keep using some of our big positives, informed policy, like trying to put various issues and rules in place, being the reserve currency, ultimately may dilute some power in the future, and that makes me very nervous. light batteries, i think look at traditional fundamentals, the government wants us to go there. this is where we need to go. the government can't afford these higher interest rates in the big picture. so good spirits, theorists would say it's not going there. yet, if you look at the fiscal dominance in the issue, the fact that the federal government seems to be on a collision course with destiny on debt and the lack of leadership we have in any government, any congress to try to control that, i'm a

little bit nervous, to be hon effo honest, andrew. ran up too quickly to 5%. blink, missed it and right back down to 4.5%. everyone understand that move. no one understand the move higher. even fed officials calling many of the dynamics that pushed it up there dark matter. okay? but it isn't about dark matter. isn't about all the question marks. it's simple. if we keep the globe more debt oriented ultimately everybody can't issue debt if somebody isn't buying debt. exactly i think what happens in the future. so like batteries, we can have conversations without joe bringing up, we lose money. future's uncertain. is there a problem with software and autonomous driving? all of those issues aren't going away, but we can talk over them. same true with interest rates. talk over the big picture here,

but to me arguing whether the fed's going to cut rates or have another quarter point really misses the point of how large these interest rate issues are and all the fundamentals affecting interest rates and they get nastier as time goes on. >> okay, rick. thank you, sir. appreciate it. continuing this conversation right now. in fact, joining to talk more an rates this coming inflation data and impact less favorable outlook from moody's former kansas city bank president and ceo esther george. esther talk about the message to the markets from chairman powell. last week we heard a slightly different message from powell. maybe a different emphasis what he was saying. a lot of people interpreted this as a more hawkish outlook than the week before. do you see it that way? >> good morning, becky. yeah. i think that the chairman was

very clear. he has not signaled anything but a question mark about whether rates are suchly restrictive to achieve the target of 2%. so until that path becomes clear, i think you will hear from policymakers that they are going to keep their options open. >> meaning that maybe the market got a little ahead of itself? thinking that, okay, that's the last rate cut, or rate hike, and we should look for cuts in the future. seems to be the market response from a couple weeks ago? >> right. i think there has been a lot of questions about the fed has done a lot, and how much more do they need to do? so when a pause takes place, like this one, it raises a lot of questions about whether this is the end or whether this -- is -- really just taking a breather, as inflation data

comes in and other aspects of the economy begin to signal to this committee where they should go next. >> so if you were in the room at this point. if you were still kind of making decisions on what to do next, you'd be thinking, what? and paying attention to the numbers this week, the inflation numbers this week with a skeptical eye? with a cautious eye? >> so i think if i were in the room this week, i would be happy to wait a bit longer, and that's because we are seeing signs of cooling in the economy. i think the question will be, will those stall? or will they reverse in some way? again, looking at the inflation trends, suggests that inflation has been working its way down slowly. that if the data that comes in suggests otherwise, i think that's keeping the committee very alert to where it will need to go next. so a good time to watch, but i

don't think you can be complacent just yet in terms of knowing that inflation's headed back to that 2% target. >> esther, just about every one of the market guests we've spoken with this morning, especially those watching the bond market are looking for when the cuts come. someone this morning said could come march next year. everyone of the opinion rates will be lower come 2025. do you agree with that? is that a safe bet? >> so i think when you watch the cooling that we're seeing so far, one might expect that we're not going to see another third quarter gdp number wait we have. that although the consumer has been quite resilient throughout this period, there are signs, for example, when we look at credit, and look at delinquencies that things are beginning to turn. i do think that as we look into 2024, it will, of course, be a question of when?

i don't see it happening early in 2024, but certainly as we get into the year, assuming these trends continue, it is going to be time for the fed to begin to think about expansive policy relative to the cooling economy. >> confirm what's we've heard from people. what did you think about moody's move? where they announced the outlook, lowering their outlook for the u.s. credit? >> i think this is a very, very important and critical issue for our country right now. our fiscal situation is not sustainable. so however these rating agencies pen their marks on the u.s. economy, i think what is clear is that we're not on a good path, and action will be required if we are going to bring the fiscal situation back in to one that allows the economy to continue to grow over time, that does not put at risk many of the important supports

that the federal government provides to our economy. so it's a critical issue, and i think these ratings are just beginning to confirm what we've known for some time. >> esther george, again, former president of the kansas city federal reserve bank. esther, thank you. >> thank you, becky. okay. coming up, the biggest questions raised by encouraging drug trial results for obesity medication. we'll talk about the competition from manufacturer novo ndiorsk. what this can mean and so much more. "squawk" coming right back, after this. the first law of thermodynamics states that energy cannot be created or destroyed. (♪♪) but it can be passed on to the next generation. (♪♪)

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welcome back to "squawk." wegovy cutting paving the way for wider insurance coverage medications like wegovy exploding. joining us, head of pharmaceutical research of b barclays. this where the novo nordisk results were announced. good morning. remarkable results. a lot of people super excited from a health perspective. talk about the economics of it all. what does it mean for novo and other drugmakers trying to produce drugs like this and how do you think insurer, going to think about all of this? >> hi. good morning. thanks for having me.

yeah. so as you mentioned, these were just absolutely breathtaking results. really, the first study that's showing that an obesity medication in people without type ii diabetes is prevent serious outcomes, and basically, we're going to be learning more about this study and finding out more and more data. it was a very, very large study, and so much of what we're going to learn is really geared toward how is losing all this weight with wegovy going to save the system money? novo is going to produce more data over time, fewer hospitalizations, things of the like, so i think we're going to be learning more and more about how losing weight, preventing obesity, can really save the whole health system money. >> well, so, that's the big question. when do you think employers, medicare, medicaid, you know, everybody says, okay, this is something that should be covered? >> so, novo has done a great job

in terms of ensuring commercial access. medicare, we still have to get a law, most likely, passed to get the medicare medication covered but it's going to be this push and pull between the manufacturers and the insurers that as they're able to produce more and more data showing this can save the payers' money, you're going to see coverage incrementally expand and expand. >> this is going to sound perverse, and i apologize in advance for saying it this way. there was some interesting reports over the weekend where people were saying that when people do have heart problems and other things, cardiovascular issues, they typically are happening in their 60s, 70s, and 80s, obviously. not obviously, but a large majority are, and that's after an employer might be employing them and so there was a question mark being asked about whether, in fact, employers are going to be wanting to spend the money to do this. >> yeah, i mean, that's a great question, but what we're hearing

from the clinical community, both in the endo crinology and diabetes community is, treat early. we saw patients with lower body mass index levels, and so if you treat these patients very early on in the course of the disease, you're going to be saving money all along the way by preventing progression to type 2 diabetes, progression to heart attack. you're at higher risk of all these outcomes regardless at an older age, but the earlier you treat the underlying obesity, you can probably just save money from so many other things along the way over the course of decades. >> do you imagine these drugs are going to be prescribed for people irrespective of their weight long-term? we talked about it before. are people going to be microdosing wegovy in the future, no matter if they're overweight -- not underweight hopefully -- but whatever their

size? >> to get a prescription for wegovy, you do have to have a body mass index of over 27 with a weight-related comorbidity. one thing that we talked about with clinicians in the field is that some of these next generation options, you can lose 25% plus of your body weight. not everybody needs to lose that much. there's probably going to be a spectrum of therapeutic options available, and some at a 40-plus bmi might need the heavy-duty drugs, whereas maybe some orals down the road are better for patients who are just in that overweight category. >> emily, we want to thank you. we appreciate you joining us this morning. >> thank you. >> it's fascinating stuff. see where this all goes. >> it is. >> all that talk about bmis. >> did you think it was bms? >> no, because i could have qualified until recently. what did she say, you needed a co -- >> comorbidity. >> i'm below 25 if you're

asking, but i was -- you're probably, like, 12 or something. >> i don't know. i don't know what i am. >> i'm going to keep myself out of this conversation and jump to the break. >> you have a hollow leg. i don't know. eat whatever you want. >> not true, not true. when we come back, we're going to get you ready for the monday morning opening bell on wall street. stay tuned. you're watching "squawk box," and this is cnbc. you're now looking at the dow futures, down by about 80 points. trading at schwab is now powered by ameritrade, unlocking the power of thinkorswim, the award-winning trading platforms. bring your trades into focus on thinkorswim desktop with robust charting and analysis tools, including over 400 technical studies. tailor the platforms to your unique needs with nearly endless customization. and track market trends with up-to-the-minute news and insights. trade brilliantly with schwab. meet gold bond daily healing. a powerhouse lotion that moisturizes, heals,

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just over half an hour until the opening bell on wall street. joining us now, julie biel, chief market strategist at anderson rudnick. i'm trying to figure out, you think that -- we don't see a lot of conviction in this rally and that the response we had this latest -- when we reported results, a little bit tepid. so, investors aren't really feeling overly confident. is that good, or isn't it always good to have a little bit of -- you don't want bullishness to get too high. that can be a negative. >> absolutely. i think healthy skepticism is a good thing and that's why i don't think we're in for a world of hurt, because even investors

themselves feel like, you know, i have a little bit of anxiety about things and that's not usually when the market falls apart. things usually fall apart when there's way too much euphoria. what surprised me is watching how so many of these companies would report mediocre results and they would get absolutely hammered or punished. it's like investors are skittish cats, freaking out when anything is not great. they feel forced into the rally, they feel forced into the market because they were too defensive at the beginning of the year, and you at the nearest whiff of any kind of trouble, they're out. so, i think that's an important implication that you need to be focused on quality because that's where you're going to see earnings durability. >> as you intimated, it can be kind of a bullish sign as well, as long as the rally's not believed but you don't want to own those stocks that get

hammered. >> what gives me confidence is not just that investors are overly cautious but companies too. it's exactly the words you used. timid. a lot of the commentary, the guidance by most managements, it's pretty timid. they're not out there spending like drunken sailors. that's a positive thing in terms of we're probably not going all the way over on the other side with this euphoria. whether it is positive or negative long-term for equity markets, it depends who you're invested in, and i think that's why you have to be very selective. this is not the time for passive. >> that might be a conversation for a later date, since it's, wow, it's about -- we got about 40 seconds left, emily, so all in all, should you be worried about being in this market or, as you say, just be selective? >> i think you want to be selective, always be invested in the market because trying to time the market is a fool's errand, but you need to be choosey. >> julie, thank you. we appreciate you. choosey.

choosey mothers choose jif. reminder to join us tomorrow for a special interview at 7:00 a.m. eastern time. >> big deal for us. >> mike johnson will be on, and kind of a timely interview, given that -- >> kind of. >> they're going to be voting tomorrow or wednesday on keeping the government open. so, make sure you join us tomorrow. for now, "squawk on the street" is next. good monday morning, welcome to "squawk on the street," i'm carl quintanilla with david faber and jim cramer. busy news flow this week with cpi, retail sales, a biden-xi summit and earnings from walmart to cisco. our road map is going to begin with those two weeks of gangz. s&p is pointing to a lower open as investors weigh this moody's downgrade. plus shares of boeing are