weeks. it's thursday, november 16th, 2023, and "squawk box" begins right now. ♪ good morning, and welcome to "squawk box" right here on cnbc. we're live from the nasdaq mark site in times square i'm becky quick along with joe terranova -- joe kernen. dow features down by about a point, s&p is only down fractionally and the nasdaq is off by 13. it comes after more gains we saw in yesterday's session for the major averages after a second straight day of softer inflation data first you had the cpi two days ago and yesterday was the ppi. both those numbers weaker than expected

ppi showing a decline. the dow was up by 163 points bob pisani was pointing out that maybe soft o'interesting things here is that you started to see a bit of a rotation. it wasn't the technology stocks that were doing well, it's everything under pressure, the russell 2000, small cap stocks, mid cap stocks the banks were doing better than before that's an important sign too to see some of that rotation. it does bring the november gains closer to 6% for the dow s&p 500 up by more than 7%, and the nasdaq gains are approaching 10%. and treasury yields, this has been the story through all of this, big pullback in yeeields over the last couple of days the ten-year at 4.5% the two-year below 5% and bitcoin trading back near 18-month highs as well if you want to take a look at that chart. >> 37. >> yeah, 37.3. on today's squawk planner, you've got retail reports to watch. we're going to be hearing from walmart, macy's and alibaba, all

of that coming in the next hour. on the data front, we'll be getting weekly jobless claims and october export, inpmport prices. the senate passing the spending bill. one democrat and ten republicans voting against that bill the bill heads to president biden's desk for his signature before tomorrow night's shutdown deadline the move effectively kicking the spending fight to early next year so we'll have this conversation all over again. and then later in the show, house minority leader hakeem jeff jeffries is going to join us live at 8:00 this hour. and in other political news, west virginia democrat joe manchin, the senator, appears to be inching closer to a presidential run here's what he said in an interview with "meet the press" host kristen welker yesterday. >> just to clarify, just to put a fine point, i know you haven't

made any decisions, but are you considering running for president sm. >> i will do anything i can to help my country. >> is that a yes >> every american should consider it, if they're in a position to help save the country. >> okay. manchin said he first has to explore whether there's an appetite among voters for a moderate candidate like him. he announced last week that he wasn't going to seek re-election to the senate, which prospects were dim anyway. it would be -- >> it did not look like he would win. >> it would be historic, a third -- i don't know, what do you even call it. >> third party. >> ross perot, which, dana carvey made a living on. >> he had support with the no labels group. >> you mean manchin? >> manchin did not j not dana carvey. >> if you're at 75% of americans

don't want a rematch from 2020, is there really something there? >> i mean, there is, but i think, a, it's kind of late in the game, and b, if you don't have the party apparatus. >> is it late? >> just to get on the ballot in a lot of states. not that you couldn't do it, but it would be a heavy lift, and if you don't have the party apparatus backing you up, then you need a lot of funding really quickly to get that moving that's where it kind of runs through. i think the biggest issue is getting yourself in a position to be on the ballot. >> he doesn't have much time, he's got a month and a half, less. >> there are still people who point to elections past where there's something that we thought was definitely going to happen and either iowa or new hampshire something totally unexpected happens that's why some of the remaining presidential contenders, other than donald trump, are spending so much time just trying to -- that would be amazing if someone

was ahead in either iowa or new hampshire after the first primary, and then everything changes. people go, oh, wow, and all bets are off. >> right, right. >> someone even made that point about on the democratic side, who's the guy, the house of representative guys running, someone actually made the point if he were to get 20 or 30 percentage points it would spell big problems and then, you know, the rfk wild card is still -- >> still out there >> shares of cisco actually plunging after the closing bell, earnings of $1.11 a share beat the street's expectations of $1.03, and revenue beat too. the company is forecasting a revenue decline of 6.6% in the current quarter and the earnings guidance fell well short of what the street was expecting cisco cut its full-year revenue forecast in the most recent quarter, cisco said new product orders slowed painly because clients were busy installing and implementing products after strong delivery in the prior

three quarters here's the ceo chuck robbins last night on "mad money." >> as we got into the quarter, we came to the conclusion quickly that because of all the inventory that we have shipped into our largest customers, we have a problem where they have not been able to consume all of that technology, and we have really unloaded over the last six months our backlog is now back to normal >> if you take a look at that stock again, it's down 11.6% that erases the year-to-date gains that the stock has seen, but it's an improvement over what you first saw after the bell, the knee jerk reaction was down 16% coming back down 11% actually shows improvement from there another big earnings report last night that's got some disappointment in the market today. palo alto networks, those shares falling too after the cyber security firm's billings fell short of wall street estimates guidance for the billings in the current quarter disappointed the company has lowered its guidance for the full year and that stock down about 14.5%.

>> probably not a good idea if none of us know who the guy is but his name is dean phillips. >> i know who he is. dean phillips, says here, little known -- we were 0 for 3, maybe not great prospects. >> it's not like any of us pay much attention to the news. >> mary williamson also in there. yeah, i think joe's looking pretty solid at this point the state of new york suing pepsi co. accusing the beverage and snack food giant of polluting the environment and endangering public health through its single use plastic bot stles and wrappers. new york a.g. letitia james accusing pepsi co. of contributing to a public nuisance by generating a significant share of plastic waste found in and near upstate buffalo, the buffalo river there. this includes more than 17% of trash that could be readily traced to specific brands. pepsi co.'s spokesperson saying

the company is serious about plastic reduction and effective r recycling. >> this one threw me for a loop. >> it's interesting to see -- you're seeing all sorts of interesting cases being brought around a lot of different things, climate change in different states, other things around -- >> this isn't climate change this is disgusting horrible plastic. >> this is a plastic issue, but if you can go after them for this based on just the percentage of stuff you found, are there other satestates thatl go after other companies why is it not coca-cola. >> i think this is a test case, right? >> and pepsi co. and coke have made a big public effort to try to -- >> recycle >> recycle, to do things around plastics, around recycling that's been their whole -- i mean, advertising campaigns, they've spent millions if not billions of dollars trying to tell the public how great they are on this issue, and then to have this happen. >> you know a lot of water bottles, the lid on the water

bottles is now about that thick. >> because if you grab it it will blow up in your hand. >> those are it's like drinking out of a plastic bag now. i have one next to my bed at night, and many times i reach over and you squeeze it a little too much, whoa, i mean, i'm now soaking wet with cold water trying to go back to sleep. >> what cheap brand of water here on the show, we have a very fancy brand. >> i know, it is fancy >> it is fancy >> that tastes like butter that is so smooth. >> what we're talking about, folks, we're not advertising for it we just seem to have it around here, i'm not sure why f fuji water, there's a smoothness it's very hard to describe different types of water. >> in the meantime, though, the island is sinking. >> half the water that you pay for is not spring water natural. it's just distilled water. filtered waeter. >> aquafina. i'll take any of them. there are sales. i get 35 bottles for like 4

bucks or something i'm still cheap with them when people come over if they don't finish them, are you going to finish your water >> i do the same thing i make them write their initials on them. >> when my daughter comes home and there's like three of them around this one's still fine. >> when all the kids are home i walk around with a sharpie and write initials on the top. this is yours, finish it. >> i can't defend you on that, i do it too. target shares soared yesterday. the stock closed higher by 18% gained back some of what has been a really tough stretch over the past 18 months or so last night on "mad money" ceo brian cornell said consumers have had to make some tough choices but are still spending on discretionary items >> we delivered $25 billion of sales in the third quarter we're on track to deliver over $100 billion of revenue for the

full year, and while there's opportunities for us to continue to accelerate our top-line growth, half of our business and half of that revenue is still coming from discretionary categories apparel and home and hard line, so they're still buying those categories we'll generate over $50 billion of sales in those categories >> yesterday morning cornell spoke to cnbc about the response from shoppers to the -- it is shocking, to items locked in cases to prevent theft he said the response had been positive talked about this yesterday. because it meant that those items that were locked up, you could actually buy, and then they were in stock, and that outweighed the inconvenience of waiting for an employee to open the case, and we basically said, yeah, it's nice to be able -- that's why you're at the store is to buy something that you need so just because you actually are

able to succeed in buying something, i don't know if i -- is that really -- hey, at least -- at least you can buy what you want, but that does sort of indicate that if you don't have the damn things locked up, you're going to be able to go in and not get -- >> i can't imagine anybody thinks -- any of us who have walked into a store, i think everybody is frustrated by these issues i don't know if you blame the solutions or you blame the problem that exists to begin with, the idea that stuff gets stolen if it's not locked up. >> men's underwear all in class skpik ic and locked up fine, i won't wear it. if i got wait -- >> tmi >> forget it, i don't need it. >> another thing i don't have to remember in the morning to do. >> yes, i would like to know which chair is mine. coming up, highlights from the summit between president biden and president xi and we're going to show you some of the prominent ceos who attended a gala dinner last night with the chinese leader

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welcome pback to "squawk box," let's talk about the summit between joe biden and china's president xi jinping the leaders say they have agreed to resume high level military communication, and address issues related to trade and harassment of americans in china. there are a few other areas that president biden mentioned in his news conference. >> it's clear that we object to beijing's non-market economic practices and disadvantage -- that disadvantaged american businesses and workers, and then we'll continue to address them we're going to get our experts together to discuss risk and safety issues associated with artificial intelligence. as many of you have traveled with me around the world almost everywhere i go, every major leader wants to talk about the impact of artificial intelligence these are tangible steps in the right direction to determine what's useful and what's not useful, what's dangerous andst w what's acceptcceptable.

>> president biden was asked whether he still held the view that president xi is a dictator. >> he is a guy who runs a country that is based on a form of government totally different than ours. >> sort of a factual explanation. >> it's absolutely true. >> i'm not sure it would have a chilling reception in china. i think they'd say -- >> i think president xi would go -- >> and a damn good one >> after the summit. president xi attend add gala reception, those included apple's tim cook, and blackrock's larry fink also on that guest list was ray dalio, we're going to be speaking exclusively with him tomorrow at 7:30 eastern time. joining us now on the u.s./china relationship, carlos gutierrez who served as commerce secretary and kellogg's ceo. he's now ceo of m path thanks for joining us,

secretary. >> thank you >> and i agree i agree with most -- any dialogue is good at this point the most important thing is we get our military, the respected military of both countries back in contact with each other when president xi said the plan that's big enough for both of us, i don't know if i really believe it, and whether it changes any of china's long-term goals. i don't know if it really does, and i don't like -- sometimes i think we're just watching someone smiling while you're, you know, in the country and everything else, but when you go back, i think maybe you go back to what you've been pursuing all along, right >> yeah, that's the big challenge, and that's the trust but verify you know, i think it made sense that this time it was about national security, and you didn't hear anything about tariffs or, you know, commercial issues

it was more about military to military, and trying to get that settled. it's a little bit alarming that the two most powerful nations in the world don't talk or haven't been talking, especially military to military and then fentanyl is -- you know, i think that's a pretty easy one it's hard to argue against that. the chinese have decided or have agreed to cut production i don't think they can do that they've got to go out and find people who are doing this. but ta hat will be an interestig part of this to monitor is are both sides, you know, hitting the agreements on fentanyl >> one publication phrased it as rounding up the usual suspects, you know, the casablanca line about fentanyl, but nothing really is going to happen. it will also be interesting, mr. secretary, to see about some of the actions in the south china sea, whether that changes.

because on a daily basis, there's aircraft, chinese aircraft carriers going across the midline in the taiwan straits. there's things going on in the philippines. there's a lot of behavior that looks like it's presageing some eventual move, either a blockade or a full-on -- they're still very active over there in sort of moves that indicate something could be in the offing is that going to stop -- >> yeah, you'd like to think that that will settle down you know, it's been going on for a long time. but it has ratcheted up, and you know, now is the time after the summit to tone it down a bit it would be a little bit cynical to come and have a summit on military to military communication where you're planning to move on taiwan, so that in a sense is also i think a good indicator it doesn't mean they never will. it's not in the cards right now, and i think that's good.

a lot of people think it is. >> and it helped both men no doubt in terms of, you know, president xi needs to make nice in terms of global trade president biden doesn't need a third problem -- we got ukraine and we have the middle east. i mean, that's all you need. it's like we need to tame thing down. >> exactly i think president biden has some -- politically, which i think is why they didn't get into the commercial side as well but if he gets too close, you know, soft on china will be on every candidate's talking points. >> yeah. >> so, you know,ing the fact tht he's trying to do it the right way, he's not buckling under pressure, i think it's another consideration, and then president xi also has, you know, political pressure at home, believe it or not, and he doesn't want to, you know, go

down in we chat saying he's soft on the u.s so that's also coopekind of a c hanging over this game, you know >> there will be criticism, like there always is. nobody's ever happy, but do you think president biden is too solicitous does president xi deserve him to be that sort of accommodating after the spy balloon and the military base near cuba and everything else? should he have confronted -- should president biden have confronted him even more, more forcefully that's what we don't know is how much of a confrontation was going on during the meeting and i think that's something that -- when the chinese talk about respect, it's not the sovereignty or uyghurs or -- it's about don't scold me in public, so in that regard, yes, the president made some comments about the dictatorship but they weren't over the top

and i think that's what i believe president biden is trying to do is bring down the tension by making these talks private. tell the chinese anything you want about anything they're doing but do it in a closed door if you do it in public, it defeats the purpose. i think that's why perhaps president biden, not talking a lot about what was said inside the meeting or quoting what was inside the meeting >> secretary, delicate subject, but do you think that president xi was sizing up president biden's mental state at this point and what he could be like if he wins re-election, two years, three years, four years that would be president xi's adve adversary, and do you think he's looking for signs of weakness to be able to, you know, continue along with whatever his plans are and what the ccp's plans are? >> yeah, for sure, for sure.

that's something that every one of these meetings is sizing up, one against the other. but you know, there are also people in the room who are doing that there's no question that these summits are in a sense to present yourself and leave the impression you want to leave president biden is saying he was very clear he, you know, was very candid, you know we can only hope his comments at the end were bland, but it's all about what happens outside of the meeting, and that we don't know but i think he is, as you say -- he's on the tight rope he can't afford to not speak to china, but if he speaks too much and too nice, he's going to get clobbered for it this is where the diplomatic dance really comes to life and the prowess. >> right well, you know what, there were

no stumbles, falls, no one threw up on anyone like we saw in the past we'd have to call it at this point i think a success on a scale of 1 to 10, it's probably about a 7 or so. >> i think definitely, i agree, 7 in the right direction, we should feel good about it. >> right all right, mr. secretary, thanks >> thank you >> all right coming up on the other side of this, we're going to show you what the ceo of microsoft said to cnbc about doing business in china. and later on the show, don't miss house minority leader hakeem jeffries, he's going to join us live from washington that's going to happen in the 8:00 hour. "sawbo rur iju aquk x"etnsn st moment e sleep the same. only sleep number smart beds let you each choose your individual firmness and comfort. your sleep number settings. it's so smart, it actively cools and warms up to 13 degrees on either side for your ideal sleep temperature, and effortlessly responds to both of you. for your best sleep, night after night. and now, save 50% on the sleep number limited edition smart bed,

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microsoft's ceo says his company is fine avoiding china's market, satya nadella telling john ford exclusively that the tech giant is focused on global markets outside of china stressing that his company doesn't rely on the company for too much revenue as it navigates growing u.s. restrictions. >> the reality of tech as an industry today is its globalized, and the question is how does it sort of reconfigure as all of these new policies and trade restrictions all just play out, whereas at least for now today the majority of our business is in the united states and in europe and in the rest of asia, and so we don't see this as a major, major issue for us quite frankly other than any disruption to supply chains. >> that's pretty interesting the take on things microsoft has a more visible presence in china than some of its peers.

meta's apps and googles search engines don't work there amazon closed its online marketplace in china in 2019, but the statement from microsoft that yeah, we are basically look ago the world x china, that's the market they're in. when we come back, we've got reaction to this week's softer initial inflation data with the wall street journal's fed whisperer nick timiraos, that's next. let's take a look at yesterday's s&p 500 winners and losers in the u.s. we see millions of cyber threats each year. that rate is increasing as more and more businesses

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good morning, and welcome back to "squawk box," live from the nasdaq market site in times square checking the futures, muted this morning, but still positive

after a strong day yesterday maybe mike santoli, senior markets commentator is joining us now, to be expected after 500 points the day before on the cpi, the ppi was really a friendly number. >> yeah. >> but we kind of -- it probably paid it forward the day before it was still up yesterday. >> absolutely. >> you saw some rotation i thought it might be up more when the numbers first came out. >> yes >> intraday it was up a bit more than we closed in fact, not even just a strong day the prior day, tuesday with 1.9% gain in the s&p, but really where we've come in the last three weeks. take a look at the s&p 500 so there we were at the lows there's your 10% correction. now wee come up 10% off the lows we hurdled this 100 day moving average. it happened to coincide with the 44 pu 4,400 level. we've broken out on some level

i think there are some folks who are saying technically how much is this, it's just a snapback from some oversold conditions. you've got small caps racing higher for a couple of days. wouldn't be surprising to take a breather in here and thinking, you know, that kind of gets you back into the let's say 4,300 area is no big deal. so far people feel like things are falling into place in terms of yields coming down and such nasdaq 100 has, of course, been the upside leadership all year it's somewhat moderated that leadership as their average stock has come back pretty hard this week. this is a two-year chart two years ago monday was the peak in the nasdaq 100 the all-time record, that was the closing high, and so here's the record of the average stock in the s&p relative to the nasdaq 100 since that point. definitely lagging, the nasdaq 100 right heere, but not by nearly as much as people keep talking b about. that's because we're measuring everything there when in fact, the nasdaq 100,

the big megacap growth stocks really underperformed in 2022. so some mean reversion, maybe still some catchup potential they're retracing some of that i think people are a little hesitant to say that it's broken down entirely. i think you want to get back to the 435ish area to say you've really put in a good peek. if you look back to what we were doing last year, that was the similar dynamic where you sort of went back to an earlier peak and then took off again, right that's kind of the way it works. if we can go sideways for a while, i think the market can make its peace with yields at this level, you don't necessarily want to see this racing back towards 5:00 just because of the recent linkages between equities and fixed income, joe. >> i promised i'd be watching for the word of the day earlier. i don't know, i missed it. did you give your -- we wanted your -- we wanted your word of

the day, but did you ask someone else for the word of the day and -- >> i did both. >> you did both? >> my word of the day was sort of you had to be looking for it. i didn't really label it as such, but steady is my word of the day. >> steady eddie. >> the drama. >> what was the other word >> there's peak. >> peak. >> peak what >> peak inflation, peak treasury yields. >> that's pretty good. i like peak too. >> peak equity levels. >> no, that was quite the opposite there's limits to the word. >> peak word of the day. >> so not pique? >> not peak either >> thanks, mike. october's inflation slowdown has sparked market optimism. our next guest says the data could mark the end of the fed's rate tightening cycle. i want to bring in nick timiraos is this mission accomplished for the fed? >> you know, it could be

it sure looks like it might be, but they're not going to say it. i think, becky, they're going to be the last ones to say it so is the fed done yes, it looks likely, but they are going to be the last ones to say it i think the question here is where is the case to raise rates right now from here? i mean, you would need to see something in the data that, frankly, we're just not seeing you would need to see some kind of adverse supply shock. so they have to be relieved if not quite pleased with where the data is coming in here if you go back six months, let's go back to may and look where we were in may. we were getting core inflation ratings using the pce the first five months of the year annualized at 4.4% the five months since then, if you kind of take the cpi and look at what it's going to do in october for the pce, you're looking at 2.4% on a five-month annualized basis so we had a banking crisis they hiked through a banking

crisis right now this looks like a fed that does not want to hike again. they will if they're dragged into it, but the data is not going to drag them into it if it continues like this. >> you know, nick, i was trying to get my arms around how much has changed in such a short period of time in the last five weeks. i went back and read an article you wrote at the beginning of october talking about how the serious is andand sudden jump in long-term rates was threatening a soft landing at that point we were trying to figure out what caused it. it wasn't the fed, we kind of thought rates were getting away from the fed maybe it was concern about high-defh high deficit in washington can we say that's not a concern at this point, or is this respite that we're seeing in rates, is that a temporary thing? >> yeah, i think it's too soon to tell. i mean, we get a data point every week it seems, and people sort of change their view on what the economy's doing, so we got that october payroll number at the beginning of this month,

and people started talking about, oh, gee, recession, you know, when is the fed going to cut rates? could it be in the second quarter next year, and then last week we saw the university of michigan inflation expectations number tick back up and people said is the fed going to have to hike again, and then we got the cool inflation readings these last few days. there's a lot of uncertainty right now obviously. if you look at treasury yields, i mean they're still higher than they were at the last meeting where the fed hiked, which was in july. they're higher than at the september meeting, which was when the fed came out with what some people thought was a more hawkish set of projections in the dot plot that was a set of projections that basically said you're not going to get cuts for nothing, right? if you take a recession or the slowdown out of the forecast next year, then you're taking the cuts away too. so that's one thing i think a lotof people will wbe looking a at the december forecast round. >> some people at the time claim that the way jay powell said

higher for longer was he was -- he said it this way instead of -- it actually was jay powell that caused those long rates to go up. thankfully, you know what you haven't said anything about, nick like 150 basis point rise in unemployment or -- unemployment, yeah we used to think that that's what the fed was disappointed it hadn't orchestrated, which that's horrible -- that's a horrible way to view -- to manage an economy that you need to add to the unemployment ranks to accomplish your goals, and that hasn't happened and maybe it was always about inflation. maybe we didn't have to actually induce some pain to get -- for the fed to get to where it wanted to be >> well, and i think you still have, joe, this question about the lags, right? are we past -- you talk about peak are we past peak tightening and

peak lags, or are the impacts of 5 3/8 funds rates still to be felt i mean, we went through years of very low interest rates, and so now you kind of have this period where, all right, maybe households and corporates have been more resilient because they termed out their debt in 2020 and 2021, but will it catch up at some point. i think that's still a question to be answered and then i think you have this question next year about what is the fed's reaction function around rate cuts if we do not have the increase in unemployment, if we do not have a serious growth scare that would be a first class problem, frankly, for the fed to have to discuss is gee, what is our reaction function to bring interest rates down! your colleagues already said economy closes in on soft landing, inflation eases with no signs of a recession, so maybe we don't need the lags to eventually cause higher

unemployment maybe the fed has already orchestrated that soft landing but i don't know we don't know, you're right. >> these things take time, maybe we're in the third quarter, maybe we're in the fourth quarter. there's still some game to play. >> weird article that almost a mission accomplished banner type article. >> hey, nick, thanks a lot >> thank you >> we'll see you soon. "squawk box" will be right back.

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some exclusive commentary from berkshire hathaway on news concerning the company there was a recent report in propublica that suggested that berkshire hathaway chairman and ceo warren buffett traded stocks in his own portfolio before berkshires trades in the same stocks were made public on three occasions over a period of almost two decades i haven't confirmed those events or discussed the details of that reporting with buffett, but earlier this week i sat down with vice chairman charlie munger at his home in los angeles, for a project i'm working on ahead of his 100th birthday he's the elder statesman and sort of a moral authority at berkshire. i asked him what he thought of that story. >> i don't think there's the slightest chance that warren is

doing something that's deeply evil to make money for himself he cares more about what happens at berkshire than he cares about his own money. he gives his own money away. he doesn't even have it anymore showing how little he thinks of it having done that, they say a dirty [ bleep ] taking of berkshire to make money. it's not a plausible argument. it's one more ridiculous thing. >> propublica noted that the trades were very small relative to buffett's net worth propublica has said his portfolio trades from the year 2000 to 2019 totaled 466 $466 million that is less than one-half of 1% that buffett is worth now, and 99% of that is in shares of berkshire itself charlie's point was it would be

silly to argue that you were putting yourself at an advantage over berkshire shareholders when all of your money is in berkshire shares too. >> we made the point about the size and scale of it meaning that it was tiny on a very relative basis, and i don't think that anyone thinks that there was any kind of insider trading. i've always wanted -- my hope is there's a very plausible and reasonable explanation for it. i think that the issue was much more around what he said publicly around the idea that he doesn't trade in the stocks that berkshire owns. >> right >> and clearly and empirically it appears at least that he did, and so trying to understand that and then how does that relate not to, you know, there were other individuals at berkshire, he had owned shares in a compan before they ultimately acquired it i think there's a difference. >> i think there is too. >> david sokol wasn't accused of

anything either in terms of -- >> he brought a deal to the company. i haven't looked at the deals in a long time. david sokol brought a deal to the company, didn't disclose to i guess buffett and whoever else he was bringing that deal to that he had already bought stake in the company and berkshire bought it at he bought into the company. >> i imagine that -- i want to believe that warren trades in his own account the way joe plays draft kings just for fun >> just for fun as much as it is funny. he's got a salary of $100,000 he's getting. >> the same amount of, i get very interested in $5 bets and it is not because of the $5. it is just i want to be able to be -- i think i'll be able to figure things out. >> i can even try to rationalize without knowing the -- without knowing what happened that there were times where possibly he was selling shares that he owned ahead of berkshire buying the shares because he didn't want to own them at the same time. that's one thought and then there is another thought that maybe he was

selling shares because he -- if berkshire was out of the stock, he thought he should be out of the -- i could come up with 100 reasons why maybe this is all good the only thing is because he was so emphatic publicly to his shareholders he wasn't in these stocks, he was not going to be trading any of these stocks and, look, my hope is there is a very reasonable explanation for this, a mistake. before he bought the shares, i have a view, my own supposition, maybe he bought them a million years go and decided to get out of it for whatever reason and the timing was just not great. >> my guess is some of it was for charity. >> maybe >> he has to answer to it. >> irrespective of whatever it is, the problem or the conundrum, it is only because he has a policy for the company, i assume for that policy for the company also applies to every other employee at the company. and then the question is does it apply to him we talked about david sokol again.

i'm not saying it is the david sokol situation, but he didn't disclose to the board or to warren warren clearly disclosed it to himself because he knows if he disclosed to the board -- maybe he wrote a letter -- by the way, people have done this, situations of people have owned shares from a million years ago and need to get rid of them and write a letter to somebody saying on x date, i'm going to do this. i have no idea all i'm saying is hopefully there is a re reasonable explanation for it. >> it is so -- we can't even -- we need a word for how de minimis it is. exponentially, it is a pittance. i would say why even do it, why not do paper trades and not even -- but that doesn't work. i tried to do paper trades, and it doesn't work. i tried to hope for one team or the other and think something is going to happen. unless i put -- the other night i bet $4 on something and i won

$35. but -- >> you have a problem. >> no. i like -- i get interested in -- i'm betting on mid-american conference football, buffalo versus central michigan. >> you want to care about it. >> yes i want to watch it and -- >> i understand that look, the answer is buffett is going to be asked about this at some point i was talking to charlie about something else i didn't feel like i couldn't ask him about it but when i brought it up, he hadn't read the story. i said, did you read the story, he said, no, i haven't read it but then he said it is ridiculous -- >> i don't know if he would know what -- >> that's actually, by the way, an interesting point though. because if an article like that were to come out, you would think you were the ceo of the company, whatever age, you probably would want to communicate to your board what's going on with those trades, given that's the company policy. almost any company in america, if your ceo was in an article doing things that were against the company -- ostensibly

against the company's policy, you would be telling the rest of the board and the board would be cognizant that happened. that is a worthy point being made, because i think in a fortune 500 company in america today, that's actually something people would raise -- >> not your average ceo. >> and then the question is are you in a league of your own? if you're in a league of your own, maybe there are no rules. >> he is in a league of his own. >> anyway, i did ask charlie about another storinhey t news. we don't have time for it now. but we'll get to it later. "squawk box" will be right back. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. you were always so dedicated... ♪ we worked hard to build up the shop, save for college and our retirement. but we got there, thanks to our advisor and vanguard. now i see who all that hard work was for... it was always for you. seeing you carry on our legacy— i'm so proud. at vanguard, you're more than just an investor,

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good morning and welcome back to "squawk box" on cnbc live at the nasdaq market site in times square. i'm andrew ross sorkin with becky quick and joe kernen we got a lot going on in the next two hours u.s. equity futures at this hour looking up on the dow, down on the nasdaq, moving around on the s&p. dow up 5 points, nasdaq opening down 20 points, s&p 500, we're going to call that in the red for now. treasuries, looking at the ten-year note at 4.486%. the two-year, 4.880% down, it used to be at 5%. oil, and crypto, our barometer of risk, risk on, risk off, we're now up at $37,227

>> and walmart results hitting the wires now. courtney reagan joins us with the numbers on that. >> good morning, becky walmart's third quarter earnings $1.53 adjusted, that beat by a penny on better than expected revenues, $168 billion versus $159.72 billion expected gross margin up 32 basis points to 24% the retailer raising net sales and earnings guidance for the full year, but the earnings guidance range is below analyst estimates, weaker fourth quarter here comparable sales growing better than expected 4.9% ironically that's the exact opposite from what we heard from target yesterday, which fell by the same amount. strong points for walmart where grocery, health and wellness, general merchandise sales declined slightly in the quarter. transactions growing 3.4%. average ticket up 1.5% walmart's digital sales growing 24% in the united states, led by pickup and delivery.

its global advertising revenue, new revenue stream, up 20%, even stronger in the u.s. i spoke with walmart cfo john david rainy who said consumers are leaning heavily into intense promotional periods. they're waiting on those larger purchases and in fact some of the periods before and after those events are promotional periods are weaker he said he's now a little more cautious on the consumer because the quarter trends were consistent until the last two weeks of october, when, quote, we saw some off trends or there was a sharper decline, still positive, relative to the first month, and both sales and units. that gave us a reason for maybe more caution but in november, it started off really well and so it is hard to put our finger on exactly what's driving this and while discretionary categories were weaker, he said in november it did strengthen, noting consumers are buying more apparel now. so perhaps more closer to need when the weather is turning. back to you. >> that's really interesting context. just walmart obviously has such

a good feel on how the consumer is feeling across the board. if you look at the stocks now, it is off by 2.8%. what i would love to look at, if you could pull out a board of other stocks, maybe target, maybe macy's, maybe other retailers, just when walmart has concerns about what they're seeing with the consumer, that tends to bleed through to a lot of other stocks. macy's up 5%, reporting today too, so it is going to be driven by its own news that's there if you look at the other retailers, target giving back gains from yesterday, continue to keep an eye on it that thought if walmart is saying they have concerns about what they have seen with the consumer and they're less certain than they had been before, that's got to raise some concerns about what everybody else is going to be facing for the holiday season. >> exactly i think that color and commentary is important, becky if you look at the numbers for walmart, it was a strong quarter for the retailer maybe it is those comments or the comments tied with that guidance that does seem to be leading the stocks in the early going.

macy's did report and they had stronger than expected results and the ceo jeff gannett just telling me, look, he didn't really see a big difference in consumer spending across the demographics, whether it is a lower income consumer or higher income consumer, basically everyone is feeling pressure >> courtney, thank you trying to figure out what's going to happen this holiday season, these are some big clues. >> right >> for more on walmart numbers and other retail earnings, let's bring in stephanie link, chief investment strategist portfolio manager at hightower advisers, also a cnbc contributor. the christmas tree is up already. >> christmas tree is up. >> i'm doing it for thanksgiving. >> different than last year too. >> i like the red. it is pretty like the white house >> thank you >> scariest thing was i literally thought it was two weeks ago i was talking about how she had taken it down. time has gone so quick.

>> i take it down the first week of january, joe, you know that i put it up early, but i take it down early. >> in the blink of an eye, the blink of an eye. >> i know. >> stephanie, if consumers without question are -- we heard, pulling back, journal talks about what a wonderful soft landing we orchestrated, but consumers are starting to pull back, should you be in any retail, maybe step aside or if so, how do you -- which ones do you buy? >> well, i mean, i think it is a mixed picture for sure but i don't count out the consumer, joe. because, again, the job market, we have been talking about forever, is still very strong. wages are still up inflation is down. gasoline prices are down about 40 cents year over year. and that actually frees up potential spend of about $54 billion. so, i think that there are pockets of strength in the consumer, pockets of weakness, clearly. i think in the services side we

talked about it kind of ad nauseam, that continues to be where people are spending. i look at something like mcdonald's up 9 krs % in sales i look at starbucks, up 8% all in north america and then i look on the good side and there are some areas there as well. look at lululemon up 11% and amazon up 11%. so, i think there are pockets. i think you have to be very careful. with walmart, you want to be especially careful because the expectations were so high. the stock is up 20% year to date, trades at 26 times forward estimates. and everybody was hiding out in it because 60% of their business is consumables it is lime a consumer staples company. i obviously want to pay attention to what they say about the consumer, but i don't think they're in a dire situation. i do think that there are areas, you know i own target and i own tjx and i think those are both buys. >> you own target. that's an interesting one. >> i do.

>> it was -- you remember when it was $2.50 that move yesterday was a welcome move for shareholders. >> yeah. >> you can't see it there. we go back a little bit further. the all time high was over 200 i know that. it has been -- it has been -- yeah, 250. seems like there is a lot of room to get back to where it was. but is that in the cards is that going to happen? >> i think so. yeah it is down 50% from november 21 highs. clearly a beneficiary of covid and that's kind of -- kind of seeing that play itself through. i think the expectations are extremely low. you can make a case after yesterday's quarter that next year they have earnings power of something like $9 to $10 a share. that makes it very cheap at 13 times forward estimates. the story is not necessarily the sales. we want to see sales come through, but not yet

it is early. but we want to see the margin story pick up. and profitability was the thing yesterday that was so positive because operating margins came in much better than expected operating margins 5.2% versus 4% expected their goal is to get that back to 6% over the next couple of years. i think they can do it they have done a really good job in terms of inventory control. their inventories were down 14%. and discretionary down 19% it is important to kind of look at walmart is more consumables, and target unfortunately is more discretionary. they have been trying to change that mix just doesn't happen overnight. but i think they'll get there. >> you're talking about all these things and i'm seeing the plastic cases again. do you think shrink can actually hurt margins can it that's real money. could they benefit from locking up their stuff so it doesn't get stolen and they get to sell it

could that actually appear on the bottom line? >> i mean, shrink hurts them 20 basis points to margins and the gross margins actually rose 273 basis points they're doing other things, sure, everyone is having shrink problems they did actually by the way say shrink was less bad. i don't know if that makes me feel good, but less bad is better than worse, right but, again, they had lower markdowns, they had lower freight costs, they had lower digital costs, their mix is changing again, a little bit less discretionary, a little bit more consumables and all that is helping the margin picture and i think they're going to continue to do all these things in the coming years and, again, the stock is down so much. and by the way, the sale side, there are 20 buys on the stock, but 21 holds and sells on it too. it is not well loved versus walmart where you have 70% of the sale side has buys on the

stock. >> pretty amazing chart right there, stephanie all right. >> i know. >> end of january. end of january that's a three-month -- >> beginning right after the new year, right? >> right after the new year? >> right after yes. right after the new year >> all right >> i get tired of it by then. >> before my birthday, before january 6th? can you leave it up until my birthday, january 6th? how did that happen? it used to be three wise men bearing gifts. >> now it is you. >> now it's me >> when we come back, a lot more on "squawk." holiday travel heating up. we'll tell you tips if you're headed to the airport for thanksgiving "squawk" returns after this. >> announcer: squawk picks sponsored by wisdom tree, the modern alpha pioneer

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welcome back this year's thanksgiving travel period gearing up to be the busiest since 12019 over 55 million americans expected to travel 50 miles or more from home joining us right now with the top tips this holiday season, brian kelly, ceo of the points guy. so, brian, well, let's start with this, if you haven't got your ticket, are you out of luck that's what we're going to find out? >> you know, there are still some deals out there

thanksgiving is actually a great time to go to europe especially in business class because a lot of those business travelers are staying home, so we have been seeing 2,000 to 2500 for many u.s. gateways to europe but overall, airfare's rising about 6% over last year. there is not tons of deals, but it is a tough time for the airlines because they're seeing gas or fuel is up 40% as well as a lot of the labor costs most of the pilots unions and flight attendant unions have been renegotiating much more lucrative contracts, so the airlines are being squeezed by attempt at increase in demand, but skyrocketing costs >> you talked about going to europe and it is cheaper is that a function of some of the -- there is a big question about americans traveling out of the country in part because of what we're seeing in the middle east >> yeah. you know, we have seen a huge -- naturally we see the shift from europe in the summer go to the caribbean, mexico, central america. we're seeing that even more now.

and also increase in trans-pacific travel united made a huge bet on australia, new zealand, they got a bunch of new routes. so that's where most of the increases in travel are coming from you know, dubai continues to be a hot spot globally for tourism. but, yes, i think a lot of americans are saying, well, this year, let's go back to the caribbean and that's where we're seeing, you know, sold out flights and astronomical resort prices. >> so, does that mean an upgrade is out of the picture? >> upgrades -- >> nobody is getting to the airport and being happily told you're one of the lucky few. is there a lucky few this year >> upgrades do happen but they're few and far between these days, sadly. >> by the way, it used to be, i wanted to ask you about this, it used to be you could buy a coach ticket and then use miles to upgrade. and now it seems like that's sort of off the table. you can't do that anymore. is that correct? >> basically delta, this year, they rolled back a lot of their elite perks

and people are up in arms. when you look at the numbers, ten years ago, airlines were maybe selling a quarter of their business in first class cabins and then letting upgrades and elite members get all those other seats. they flipped it. it is now 80%, 90%, that's how the airlines are squeezing -- it is tough these days to get the upgrades i say try to book in advance i use google flights flexible search to sniff out the cheap business class fares >> give us the ninja move on how you find the cheap flights >> the ninja move -- >> is it a myth or not, tuesday night or wednesday night at midnight, you know, the stuff rolls over is any of that real anymore? >> no. the airlines doe dynamic pricing. it changes by the second the biggest tip is getting award travel most of us have frequent flier miles. the airlines are releasing a lot of award seats i like flying blue just last night qatar airways released a ton of award space

around the world if you ever want to do maldives, there is multiple -- >> but, here's what we need to know so you said last night that all those flights were released. how would the -- us peasants know that that actually happened and then know that we're supposed to jump on that opportunity, besides reading the points guy is there some other method at work here? >> yeah. thrifty travel has a newsletter and you can sign up for premium fare alerts, cheap deals, they'll email you. i love rome.travel you can search for award availability by month. you can -- that's how real experts sniff out the cheapest fares. and the case of qatar, that q suite is the best in the world. >> let's put that up on the screen give us the names again. >> rome.travel >> real news you can use, folks. what was the other one >> thrifty traveler. they have an email alert

last night i got one saying wide open availability on using q suites and it actually will tell you use your american airline miles because they're partners let other people do the work $5 or $10 a month charge for the services >> how far ahead are you getting to the airport an hour and a half, two hours, three hours? do you have clear, do you not? have the time i have clear, half the time you have clear and it is like the tsa line has less people in it than the clear line >> yeah, always double-check tsa precheck is the absolute bare minimum if you don't have that, you shouldn't be traveling but global entry is 100 bucks, it will get you tsa precheck clear is good in some airports in some, it has gotten so popular, like atlanta, it may be quicker to go through the precheck lane i get to the airport an hour before most flights. >> check your bags for an hour before or no >> yeah, if you're checking

bags, you got to get there at least an hour before a lot of airlines will have an hour or 45 minutes before the departure check or cutoff time so, you know, if you have the time, get there, i would say at least 90 minutes before all flights in the u.s. >> okay. brian, always great to see you we wish you a very happy thanksgiving thank you for all the great advice we've written it down. i imagine the viewers have done the same thank you. coming up, mortgage demand rising to the highest level in five weeks we'll speak to the ceo of rocket company, the nation's leading mortgage services business that's after the break in the next hour, house minority leader hakeem jeffries will join us to discuss speaker mike johnson's two-tier plan to keep the government funded. what do we do after that much more. "squawk box" coming right back >> announcer: time now for today's aflac trivia question. the beeswax lip balm burt's bees is a subsidiary wofhat publicly

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is a subsidiary of what publicly traded company the answer, clorox >> very weird. the rate on the 30-year fixed mortgage sits just under 8%, falling back slightly from recent highs that hit mortgage demand in the recent week to a five-week high. the housing market continues to face low supply and still rising prices joining us in his first interview is ceo of rocket company, rocket mortgage, barun krishna. thank you for being here >> thank you for having me >> do you think mortgage rates have actually peaked that's what the market is supposing. >> the market is going to be the market the rates will go up and down, inventory will go up and down. it is a big market $2 trillion in mortgage, $5 trillion when you think about real estate, financial services, and mortgage and most of the players are significantly underpenetrated.

so, what we care about is just helping consumers discover and find homes, taking the friction out of the process and then allowing them to refinance as the rates inevitably go through their cyclical processes >> it is a big deal for your company, though. refinancing has almost disappeared. there is a massive number of people who have -- i think i saw something like 60% of people are below 3% is that a realistic statistic? >> we have comustomers across t spectrum our business is balanced we have a refinance business, a repurchase business, we think of our clients as lifetime clients. how do we help them buy and purchase a home, how do we help them service the home, how do we help them get into the next home and a lot of that is going to be cyclical as rates go up and down when there is an opportunity for -- to refinance, we want to make that experience seamless for our customers as well. >> i ask because it has been very important to your company

and your stock's performance, the stock is up, i think, 11% for the yone year, up 33% year o date, but trading at a much lower multiple, $9 versus high of north of three times that and that was in large part because rates went up and people stopped refinancing. >> i think part of it is going back to the bigger picture for us, what we focus on is long-term. as you think about the overall mortgage market, it is a $2 trillion tem that any player has single digit penetration what that means is there is an opportunity to defragment and there is an opportunity for growth that's what we're focused on, how can we use technology, how can we use artificial intelligence, how can we remove friction from the experience and how can we actually take market share. and we think by focusing on that, the rest of it will take care of itself. >> are you growing market share? >> we are taking share i'm very excited about that. in purchase, we're growing share.

but more importantly i think it is an imperative that allows us to focus on the things we can control. >> what is your market share right now? >> we don't disclose our overall market share but overall, we have been growing share year over year, quarter over quarter, and we're going to continue to focus on that's company imperative. >> who are you taking it from? smaller mortgage operators or big banks? where do you think you're winning share? >> we focus on our clients so, we think about our clients, you know, we're focused on how do we make the best experience possible to allow them to experience home ownership. and we spend less time thinking about competition, and what other players are doing, we focus more on the journey that our clients are on and how we can drive innovation, disruption, in particular with artificial intelligence, which is a big, big new area of focus for us. >> what does that help you do? i know in the past we have spoken with dan gilbert and others about it. just the idea that you can basically run the numbers on anybody's credit score, what they should be getting on

something, faster, so fast they had to slow it down to make people think they were actually doing something behind the scenes what can you do now? >> i think a.i. is going to be a transformative impact on financial services in general. and in mortgages in particular when you think about the mortgage journey, everything from lone origination, mortgage banking, lead generation, underwriting, servicing, closing, these are all problems of data, work flow, and automation so when you think about what a.i. can do, it can automate, simplify and streamline that process for everybody. we had our rocket logic platform in place for the past year which is our first step toward the a.i. journey we have seen 20% faster turn times. we have seen 20% fewer manual touches. and i'll tell you we're just scratching the surface we have 50 million call logs, and that gives us an incredible foundation to really create a more disruptive, more

a.i.-driven experience to really reduce the friction for the mortgage -- for the customer >> so, 20% fewer touch, meaning you can do the same things with a lot fewer employees? >> the way we think about it is, you know, computers will do what computers do best and humans will do humans do best, and it is at the intersection of those two things where you can create delightful experiences >> it means you can do it with less workforce, it is more efficient for you? >> we always focus on efficiency but the primary focus for us is growth as we think about the market, and the size of the market, growth is really the vector that we're focused on, around investment we're always looking for opportunities to drive operational efficiency but growth is really the thing we are focused on. >> varun, thank you for coming in your first interview as ceo of rocket thank you for your time. >> thank you my pleasure. still to come after this, israel's economic minister will join us next for an update on the war and u.s. funding for the conflict and congress passing a funding bill to avert a government

shutdown we'll talk to house minority leader hakeem jeffries for the latest details out of washington iss bc watching "squawk" and th icn >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. do you consider climate risk? changing weather patterns are impacting the way we live and the value of businesses large and small. this can mean disruption to supply chains, changing demand for products and shifting regulation. what does this mean for your business, your clients, and your investments? ice offers data and markets that can provide critical insight. manage your climate risk with ice.

welcome back to "squawk box. joining us here in studio at the table to give us the latest on the israel-hamas war including funding and support for the conflict and some of the economic impact and so much more, nir barkat, israel's minister of economy and industry thank you for joining us during this very, very tumultuous time. you are here i believe in part at the request of benjamin netanyahu to meet with business leaders and others and talk about funding and the like what are you hearing when you meet with business leaders in the u.s. right now >> i was in washington, meeting a lot of senators and congressmen. i think, first of all, i want to hear from first hand what really happened and when we tell them the atrocities, when they see the videos, when they understand that we talk about monsters, the jewish people have not seen since the holocaust, we're

talking about over 30 babies and children under the age of 16, let me show you the picture, see this babies, children, that were abducted and are hostages. what is happening with them? we have no idea. where is the red cross where are the people that talk about humanitarian rights? this is -- you know, israel is shaken we're shaken and we understand and we're talking about monsters imagine you have a neighbor that tells you he wants to kill you and he wants to rape your wife, put your little baby in the oven, we're talking about atrocities that are beyond imagination. in our wildest dreams we never thought that something like this can happen and then they keep on telling you that they're going to do to you as well, not just your neighbor we have to wipe them off the map. and our friends really want to understand what we intend to do. and we're telling our friends

here in america, we need time to wipe hamas off the map, off the face of the erarth that's the goal. we need time and the support to do that. >> so here's the conundrum you're also facing pushback, as you know, on that very idea. not on the idea of getting rid of hamas, but what it takes to do that. and whether other people who are innocent are going to be caught in the cross fire of this. and they are >> see, we have shelters we put our civilians in our shelters and the idf protects them. you know what happens in gaza? the underground, which is sort of a shelter, is only for the terrorists and what we saw in the shifa hospital, what we knew before, they're using their civilians, they're people as human shields. now they're using hostages as human shields. so we, in israel, and the jewish people all over the world, we care >> who bears responsibility for

the -- >> that's the question >> it is like holding someone in front of you and to get to them you have to -- the person holding the shield is responsible for the death. i don't understand -- >> look -- go ahead. >> we got on foot to the hospital because of the sensitivity. we really don't want any collateral damage. we don't want innocent people to be hurt and that's why when we have the militants, we go after them we know there are innocent people, we try, we do our best, but they have to understand that if they're hiding terrorists, they may get hurt. so we're telling them, go to the south, here's the corridor to go there. unfortunately hamas stops them from leaving because they feel that the citizens of gaza are the shields. well, it is not going to help hamas. we're going to get to them and we have to do this, not just for the israel sake.

radical islam around the world, if god forbid they succeed, it is going to happen everywhere. we are the little satan, the united states is the big satan, they go to europe, they go everywhere, all around the world. we have to stop these hamas jihadists. >> where do things stand in tha battle where would you put it how much longer do you think it will take you to handle hamas? >> as long as it takes people tell us we have a window, the window may close no because we're cautious we can do the swifter and faster, but with more collateral damage we don't want that we're sensitive to human lives unlike those monsters that we talk about so, i believe that we're going to -- to do it very cautiously, enable the innocent civilians in gaza to flee away and to focus and we're going to finish the job and we need the help of the united states of america >> what does that look like? >> i want to take the opportunity to thank the president of the united states

i want to thank the americans, if anything i'm here, we don't take for granted the support we get from the united states of america. one of the toughest times, probably the toughest time since the israel was started, all of a sudden we see president come and we see the support we get, and we don't take it for granted we have really good memory and we know who our best friend is today >> given your role, i want to -- i have an economic question for you. what do you think happens to the economy of israel? what do you think happens to the economy of gaza and how that -- what that would ever look like to get rebuilt, what that would ultimately cost, who would bear all of these costs >> when there is a war, there is a dip. naturally war costs money. probably in the magnitude of between 50 to 100 billion

scheckles, which is probably the cost to the gdp maybe 10%. and this is something that we cannot catch up very quickly after the war. our high tech sector does not lose a day of delivery it is the engine leading israel to the future. i think if anything -- >> is it possible -- you say they don't lose a day of delivery there are a lot of people you know that were working that are now in the army. >> we now how to do reserve duty all the time i was a company commander in the first intefadeh in reserves and i used to do 70 days a year. my partners cover up and the fact is we know how to deliver i think there is high interest today in the world in israeli entrepreneurship and you see the jewish community here, lots of people here in wall street are really interested. they understand the upside because after a war, there is usually lots of creativity, lots of opportunities, and the friends here get it. i think the minister of economy and industry, the interest is triple than it was before.

>> short of a regime change in iran, what is the solution >> regime change not only in iran, in lebanon, we have to do it in -- >> trace back to iran, doesn't it sort of the head of the -- >> you're right. >> regime change, and we keep hearing -- five years ago we thought there was some type of arab spring possible somewhere and -- >> i heard those stories remember when israel left gaza, people talked about having the singapore of the middle east now, please work what is amazing is that you see that the more they fight with us, they go down the tubes on the economic side, on everything. >> they're going to have a bomb some day >> they're not >> okay. >> we must make sure they do not. and, you know -- >> they use it, i think, eventually, that regime? >> one thing you should look at, the world changed october 7th.

israel is not the same israel. the middle east is not the same. we understand that we cannot live with somebody that says he wants to kill you anymore. and by that perspective, the palestinian authority is no different. they teach their children to kill jews. it is in the schools they pay families of terrorists to encourage them. that has to change we will not accept those theoretical threats because they become practical threats >> before we go, what is your sense of the politics internally, inside your country, at this particular moment. there are some calling for the resignation of the prime minister, break up the government, redo the government. given the role that you're in right now, there is a view that maybe there should be a rethink about all of this after the war is over. i don't know when you think the war is over. what is your take on this? >> there is total consensus we should work together to beat hamas. this is the most important, probably the only thing important. we have to keep our unity. we have to focus on -- to

prepare the economy to scale post war and make sure our business communities survives the war. we have some challenges and, you know, on some of the areas in the country that were hit, how to help them recover we're preparing those plans. they're already in motion. i feel that on the economic side we're doing fine on the army, we're doing fine. and on unity, which is the most important thing, for israel, we're doing well we have a unity government now focusing on winning the war. after that, after the war will finish, everything will be opened up and we'll see what happens. >> must be very frustrated that congress, the senate and the house both passed the continuing resolution to fund the budget. but it did not include aid for israel chuck schumer says they'll pick that up after the thanksgiving holiday. how important is that? >> i spoke to congressman and senators from both sides of the aisle, there is unity to help israel the way i view it is, you know,

it is procedures they have to figure out together. and i encourage them all to do it in a bipartisan way i think it is important. they're all in and we're waiting for them to make a decision and we are very thankful for that. >> israel is bipartisan. ukraine, i don't know at this point. i think israel is -- >> i'm talking about representing israel here and we're very thankful and we're happy to help ukraine as well. >> minister, thank you for coming in this morning appreciate it very, very much. >> thank you very much. "squawk box" coming right back after this. i would say that we're closer than the average mother daughter.

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welcome back, everybody. the amount of unpaid and uncollected taxes is soaring, but can the irs narrow that so-called tax gap? robert frank joins us with more on that. hi, robert. >> good morning, becky the amount of taxes that go unpaid every year reaching an all time ecord, according to the irs. americans failed to pay $668 billion of taxes due in 2021, up 20% from previous estimates. most of that comes from taxpayers underreporting income or overstating credits and deductions audit rates would make those making more than $5 million have fallen 90% over the past decade. danny werfel saying funding from congress will allow them to hire more auditors, protecting those who pay their taxes and working to combat the tax gap. most of the unpaid taxes come from personal business income. that's largely pass throughs

the growth of the gig economy and new digital payment services like venmo and cashapp, those are also factors new rules for that type of income take effect in the 2023 tax. the irs will get 1099 forms for crypto accounts. that could be a big source of added revenue. the revenue. irs and treasury promised audit rates for those making less than $400,000 will not be affected. >> a biggy, help them in terms of tracking this down? >> manned'ser to reporting right now with cash payment services cash app, venmo, those forms don't go to the irs, not even the taxpayer. same with crypto those forms, which all of the crypto exchanges currently don't have to report to irs will have to start doing it. they will have visibility into your cash transactions and crypto. >> good luck reporting on that. >> i don't know how to -- underreporting, and i don't know how -- >> your w-2.

>> doesn't work either way >> it's the stuff that -- >> can't deduct anything anymore. >> not subject to this, but if the standard deduction which is increasing this year -- >> increasing. >> a lot. >> now $25,000 or so per couple. >> yeah. >> not a lot. >> depends -- >> for some people it's -- >> for mere mortals -- >> doesn't help. >> doesn't help you. helps other people. stick around a lot more questions. former u.s. congressman kevin brady former chairmanning of ways and means committee and a democrat from wisconsin currently serving on the ways and means committee. kevin, let me start with you, congressman brady, because, look, if there's all of this unreported income, the republicans stance is we don't want to spend more on the irs, how do you get at that >> so one, it's good to see you, and it's nice to be joined with gwen this morning. so a couple things one, everyone needs to pay their

taxes, whether large numbers or small. both parties agree on that we just want those tax bills to be smaller secondly, his tax gap has become very, very subjective. over the years, it varied widely two years ago irs was testifying that gap was over a trillion dollars without real evidence. today it's bound to $600 billion. what we really need, my point, reliable estimate. and then for irs to sit down with republicans and democrats with a game plan both how you stop fraud and how you collect it, because end of the day, collecting unpaid taxes from those who owe them releases pressure on taxpayers who do pay theirs. >> right. >> so i -- i worry that there's no question, these dollars in enforcement will not be focused purely at the well-to-do in fact, there is no way they

can squeeze $200 billion out of those few taxpayers, the congressional budget office says that tax audit rates will rise for all taxpayers. that most of that income in question will come from families and small businesses making under $200,000 a year. a good number of them, they estimate about a million new audits a year for really, would go families making $75,000 i think this will, these new law enforcement dollars will go across a much different spectrum than most people imagined. >> congresswoman moore >> good morning, kevin you're missing all the fun in this i guarantee you. >> glad you're there, gwen. >> well, just let me say that, yeah, those estimates have been $600 billion to a trillion dollars a year in the tax gap,

and i would say $6 00 billion i a low figure, and when you think about the irs funding that republicans have tried time and again to suspend, all of it is needed for a variety of purposes number one, the equipment that they're dealing with is something that, it's from the kennedy era. 1960s. when you think about customer service, just how long it takes to get an irs employee on the telephone. that's a source, a problem, as well what we have found is that the higher income individuals, those, the top 1%, about 20% of their income is unaccounted for. so made a great point. a point that it will be taxpayers making under $75,000 a

year that are going to get -- those people right now are the people who are most likely tos audited. because the irs is enforced to basically deal with sort of paper audits, because the workforce has been so depleted. you know, when obama was in office and got that shellacking in the 2010 election between 2010 and 2018, 45% of the irs workforce was decimated, because of deliberate cuts by the republicans who were in congress in both houses and had the ability to do it so right now we've got less auditors than we had end of world war ii and think about how much more sophisticated and complicated these tax packages are today. >> kevin, speak to the idea that the equipment there is so

outdated that the idea, talk about a.i. every day not talking about a.i. there how do you get to the point you can do it maybe a little more efficiently? >> yeah. so on this we agree. it i'll tell you this. 2010 levels to 2019, there was a reason irs was targeting americans based on their political beliefs. very little effort on i.t. or service. agreement new technology are welcomed by both parties unfortunately the new law just signed, only 4% of that $80 billion will go to customer service. that is in the law the bulk will go to new agents, and one point to think about audit rates don't tell the whole story. there are sort of routine audits that occur that look at your credit and your deductions and try to make sure they're right, and then there are very intrusive, very intrusive,

audits that they scrutinize the past two businesses. the wealthier individuals, the corporations there is a big difference between -- >> congressman, congressman, what guarantee, in the back of your mind, do you worry it could be weaponized again? any doubt in your mind the irs was weaponized during the obama administration any doubt, and why would that not happen again >> none. absolutely not it has been proven it's been occurring recently, a few years ago, we saw more targeting of nonprofit organizations. and that's just ought to worry every american. >> this is amazing intervention. the tax gap. talking about a minimum of $600 billion being lost every year. that's not going to come from, we're not going to collect that by figuring out who mows the lawn and pays with cash.

we're not getting that money that money is missing, because the top 1% is not getting these guys in audits talk about irs "agents." these are audits, these are people who are able to do forensic -- do things that we couldn't do. >> we got to go. sorry to end the conversation. way over time on this t bu appreciate both your time and hope to have you both ban soon. calories. and cirkul has over 40 flavors, so your water can be as unique as you are. try cirkul. your water, your way. now with even more flavors. available at walmart or drinkcirkul.com. i think i'm ready for this. heck ya! with e*trade you're ready for anything. marriage. kids. college.

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good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square i'm joe kernen along with becky quick and andrew ross sorkin. can and u.s. equities turning south, across the board red. on the dow a couple solid days and weeks for the averages nasdaq getting back, although you can see there in the s&p treasury yields right now, below 4.5 again now on the ten year

and then as we pointed out, bitcoin off a little on the day. about 37,000 the first day didn't do much on that frosty cpi number and yesterday a big jump on the, i don't know go figure. 37,100 walmart out with third quarter results. retail giant beating revenue and profit forecast. raised its net sales and earnings guidance for the full year the profit guidance range is below estimates and that implies a weaker fourth quarter, which is a pretty important quarter. usually. for retailers. on the plus side for walmart, u.s. comp sales grew more than expected in the third quarter. on the negative side, general merchandise sales declined the company's cfo telling cnbc a little more cautious on the consumer, because third quarter trends, consistent, but then got weaker the last two weeks of october. >> he pointed out better in

november not sure what to think about it. but if walmart's not clear on how the economy is, how the consumer is feeling, probably everybody else isn't very clear. >> it's date mid-november what numbers are we talking about? walmart. >> big. >> huge. >> massive a billion a day. the broader markets with major averages tracking third positive week in a row senior market commentator "the masked singer" -- mike santoli joins us now an inflection point when it comes to both the economy and the rates, or if this is just the next -- you know, volatile move seeing things swing around? >> exactly understandable relief rally, when you did see bond yields come off hard. inflation numbers taking the fed out of the game somewhat makes sense. look when it's brought the s&p 500 too. hot coming in today going up, as was said, something like 10% in

13 trading days. back to end of august 2021 the reason, we first got to the level, 4500. spent almost no time above there. look at that two months all told end of 2021, before the market dipped back upthat is why some folks feel a dip around 45, 4600 level. likely to find a little friction on the way up. that said, it's done what it was sort of "supposed to do" in a seasonally strong period once you got rerelief from rates. soft landing in play even if others don't have utter confidence it will come through. problem parts of the market, so to speak laggard areas remain in a pretty tough position, although sort of signs of life here this should be the financials, russell 2000 small caps and ebitda crossed over into positive territory on year-to-date basis year-to-date basis, s&p 500 up

because of the nasdaq stocks predominantly. two years, showed earlier, a little more even story walmart's move today is coming from a position of being, one of the biggest out performers in both the groups you consider consumer k discretionary equal weighted how much it outperform and coming back to the back, a premium valuation. people feeling as if it was the perfect consumer play in this environment. giving some back, see how much more there might be to come back. >> mike, looking at numbers. i was wrong. not a billion dollars for walmart. terms of sales, $1.8 billion. >> $600 billion-plus a year. >> $169 billion expectation fourth quarter

so, yeah walmart says something, listen up thank you. over to aeamon javers and sitting down to eat dinner shortly after meeting with president biden. it's early for you, and you went late what happened? >> right leader of chinese communist party told a room full of wealthiest capitalists in the world china is "ready to be a partner and friend of the united states" drew a standing ovation from a ballroom full of executives here in san francisco last evening some of the biggest names in finance were there including billion are in blackrock ceo larry fink and billionaire blackstone group stephen schwartzman flanked the chinese president at the head table. front of the room tim cook of apple and albert bourla of pfizer among the host of other executives they have a responsible to lead

the world. >> translator: we must get along with each other. in a world of changes and chaos it is ever more important for us to have the mind, assume the vision, show the responsibility, and play the role that comes along with our status as major countries. >> xi jinping criticized use of words like competitor, challenger, and facing threats all phrases american diplomat used to describe china the ceos heard xi say it is wrong to view china as a threat, as a play of zero sum game against it adding china has to intention to unseat the united states or challenge it elon musk was in the building and he attended a v.i.p. reception before the event, was in the room when xi jinping was expected to be mingling with the v.i.p.s before the dinner but

the tesla ceo left before the dinner began and not seated at the head table extraordinary evening of the most power it capitalists in the world dine wig the most powerful communist, guys. >> fascinating did you find that the ceos were trying to make nice? was there anybody saying we have a national security problem and want to get at some of these thorny issues or all too controlled and polite? >> have polite and organized surreal to be in the room last night, andrew, because, you know, everybody, in business has been to a rubber chicken dinner, a ballroom full of people, except the people in this ballroom eating this particular rubber chicken, some of the most powerful people on planet earth. fascinating moment xi jinping spoke about a half hour, i would say, and the

audience burst into applause on several occasions at lines that they liked in particular we didn't hear from some of the top ceos and financiers in the room we heard from the organizing committee put on by the u.s.-china business council, heard from folks like that as opposed to folks like tim cook and larry fink but they were at the head table and breaking bread with jinping last night. programming note tomorrow talking all things china with bridgewater founder ray dalio. one of the people on last night's guest list. coming up, house minority leader hakeem jeffries weighing in on congress passing a short-term spending bill and what we can expect in the new year, when we do it all over again. stayun quk box" will be right back. firmness and comfort. your sleep number settings. it's so smart, it actively cools and warms up to 13 degrees

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the short-term bill to fund the government, sitting on president biden's desk just in time to a void a shutdown, but the bill essentially, here we are with this term "kick the can down the road. important term talking about government sometimes kick it down until mid-january

next guest called for 2024 spending talks to begin immediately. joining us house minority leader hakeem jeffries. a pleasure, good to see you again, leader jeffries. >> good morning. great to see you. >> i know you've seen this and i just want to say it again to feel good again about that this can't happen and we're going to roll this, and i think everybody's holding hands and obviously something that is bipartisan and brought both sides together, but that -- leader schumer and leader jeffries and speaker johnson holding hands. can it happen again? is it precedented? can i be optimistic, leader jeffries >> i think there's always reason to be optimistic particularly when we lean in to the american journey, the american exceptionalism and our

ability, of course, to continue to overcome turbulence and obstacles and adversity. from the very beginning of this congress we have said as house democrats that we are ready, willing and able to find bipartisan common ground with our republican colleagues whenever and wherever possible for the good of the american people, and, in fact, we've repeatedly done just that. we've done it with respect to the bipartisan fiscal responsibility act, that averted a catastrophic default on our debt we did it at the end of september to both avert a government shutdown at that point in time. democrats provided the overwoverwhel in overwhelming majority of votes and provide disaster assistance for americans devastated by extreme weather events, and we were just able to do it once more in providing the majority

of votes necessary to pass resolution at vfiscal 2023 leves and won't shut down an economy that would hurt americans. we continue to do it, in my view. >> back to brass tacks again, how far off is it? a couple of months, i guess. all the sticky hitches the two parties disagree vehemently on will be front and center again, most likely. your cordial relationship with speaker johnson, you know, he's going to be -- you're pulled in different directions obviously by certain factions of democratic caucus. saw it recently with the issue in the middle east, but you know speaker johnson is going to be pulled by the freedom caucus in a direction not going to be to democrats' bliking

h liking how's it going to work >> the thing and the reason for optimism in this space the bipartisan act as you recall, joe, set tough lines spending numbers for fiscal year 2024 in fact, that was done at the insistence of the former speaker, who demanded that in exchange for avoiding a catastrophic default on america's debt, which would have happened for the first time in american history inconsistent with our responsibility to protect the full faith and credit of the united states of america, our republican colleagues demanded as part of that with respect to the debt ceiling we set top-line spending numbers both on the defense side and on the non-defense discretionary side, and we did it so the numbers already exist there's already a bipartisan agreement. more than 300 members of the house supported that agreement the overwhelming majority of the

senate did so as well, and president biden signed it into law. the problem that we confront is that the extreme maga republican wing of the house republican conference rejected their own agreement. all we're asking speaker johnson to do is to keep the word of the house republicans consistent with where house democrats, senate republicans, senate democrats and president biden have already agreed to land. >> could do that probably not speaker very long after that, leader jeffries. that's going to be the issue you saw what happened, to, as you mentioned, former speaker mccarthy did enter into that in good faith and that's kind of what set in motion the subsequent events, unfortunate events for the speaker? >> hard for me to get involved in the intricacies what's going on in the midst of the house republican civil war

other than to say, let's center the well b-being of the american people figure out how to solve hard-working american taxpayers continue and continue the economic recovery not undermine it and do it not as democrats or republicans. let's do it as americans that is our job fundamentally, and we've articulated that as house democrats from the very beginning, and i think our actions have now spoken for themselves, and we want to continue to find bipartisan common ground. >> probably need to do this, this aid to a couple of the real pressing areas in the world. not here, but elsewhere, leader, and are you optimistic you can get a, i mean, are republicans going to insist on a stand-alone israeli aid? linked to ukraine? this is, you know, should be happening within the next couple of weeks

not sometime in mid-2024 we can't wait. >> you're absolutely correct in terms of that time frame and it's my hope that the four corners within the house and the senate, democrats and republicans, majority and minority, sit down, sooner rather than later, to hash out adhering to president biden's national security request with respect to israel. we have to be there for israel and in its time of need and aftermath of the horrific attack on its people, on its sovereignty on october 7th we also have to stand with the ukraine people and their very important, courageous fight against russian aggression of course, the president has called for humanitarian assistance for palestinian civilians who are in harm's way in gaza through no fault of their own and for civilians who are in harm's way in theaters of conflict all across the world, and that's something we also need to urgently do, and i don't

think it makes any sense for us to piecemeal the approach, because on the geopolitical stage, you have the free world and then you've got the terrorists and authoritarians. and we need to continue to stand together on the side of the free world. >> so much to talk about talk about china you know what, a quick wrap. opposite of what i'm doing right now, i guess, talking more and more, but let's do it again leader jeffries soon if we could and keep it going. let's keep it going and hope for the best thank you. >> happy thanksgiving to you, your family and all of your viewers. >> thank you to you as well, leader jeffries. when we come back, a unique look at the housing market and where americans are putting their renovation dollars property brothers jo thnhin and drew scott join us next. you're watching "squawk box" and this is cnbc.

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welcome back to "squawk box. homeowners dealing with a double whammy high more gast rates and elevated inflation making renovation more expensive. a special interview wa they're seeing the property markets brothers drew and jonathan scott. co-founders of scott brothers incorporated haven't seen you in-person in quite some time. >> a restraining order or something, keeping us away thanks for having us. >> thanks for coming up. and doesn't have this conversation every day interest rates on the screen what it means for people already own a home, whether they're renovate a home, ever going to move what are you actually seeing right now? is the idea of flipping property

even working anymore >> this is not a great flipping market right now and a lot of people suggesting that that's what they want to do, you have to really look at your margins and really be careful. still money to be made in the real estate business, but it's kind of crazy now. people wonder. is history repeating itself? what's going to happen rates eased a little, but still buyers out there. >> when you say money to be made where are you making it? >> shifted into our pot follow y portfolio. you only lose money when you're forced to sell right? same with a lot of our clients looking at ways to bring in income california where we are, government's pushing to have people convert garages because of the housing crisis. we need more space people have empty plots on their home to do a quick renovation on get more income coming in. where we found an opportunity. >> biggest thing still, saying to people for a long time is, there used to be a -- remember with our parents and others who

get a house, stay in it your entire family life your kids take over the house. >> right. >> then moved into a thing people sold on everything every three to five years. every time do you that, paying real estate fees, taxes, all this other -- look again how you can have longevity in a home get into a home your family can build into and you'll build equity. >> you guys are on tiktok and see folks bs basically fixing u properties trying to rentairbnb. is that alive, dead? >> me personally i don't like the idea of the busies y ieies busyness of a short-term plan however there can be money in it i have a number of friends short terms an love it think it's great i don't want to be a hotel myself that is a good opportunity

to each their own. many ways to get into the market. >> challenges with the whole airbnb model and here in new york a lot of buildings sweeping in with these no airbnb short rental policies and can affect somebody's plan. dig in, do due diligence before you jump into investment if you've never done it before. >> anything on the move, unloved, misunderstood >> thing is, you can find a good investment anywhere. even -- really expensive here in new york or in l.a. where we are. so i've been buying property in charlotte and surrounding area however, i still have good opportunities in l.a. and where we used to be in las vegas i think the only thing i don't like when people jump into a market they don't know, an area they don't know thinking that's where i'll make money. you have to some someone you trust there. otherwise, aren't boots on the ground eyes on the project could go under. >> this show is great. good to people to get the information and doing research

don't jump in blindly and tackle what is probably going to be your greatest invest, biggest investment. >> and miami center of the universe, supposedly saw another article, added four more red cities, everybody's going to go. houston, dallas, miami, they said, and national. >> national, growth, headquarters for our corporate, nashville. i didn't know about miami being hottest spot as it is, but -- >> i think might be. >> yeah. i mean -- >> look somewhere like nashville. nashville's incredible growth. i look where the growth cycle is and where are we at? start to cool off? everything is still cooling off now but trying to plan ahead and see what's the next hot spot had a crystal ball great. >> a coincidence about tax rates in texas and florida that -- >> i mean -- >> seen a lot of people trying

to incense vise invest again and other policies causing people to want to move away or shift assets out of that the other thing, too i like, when people think about, do i want to get into real estate do this? real estate part is only one very small thing the tax benefits and all of the other benefits that can come from whatever state you operate in, you can double -- >> like an in-and-out burger. >> what's that >> in-and-out burgers why you're still in -- >> the 40-year burger. come from nevada to california i cried a little that day, but for -- >> good. >> we love where you are now look more to miami we don't pretend to know everything, too. stick to the markets we really know out this way filmed our shows out here a little, too helped know surrounding areas in new york where there's a lot of opportunities. >> a big part of our business, too, not just focused and real estate but products we create.

manufacture 10.5 products for the home people are renovating through the pandemic as well. >> and next in terms of renovation always in kitchens, bathrooms. certainly products a new trend? what's happening here? grass roots hot for a while and everything future hardware had to be brass. >> you need an island, covered all the way around. >> waterfall. >> you want us to come to your house and renovate it. i get it we'll talk after decarbonizing the home, aware of unhealthy habits within the home and poor air quality pip some stats show air quality within the home ten times worse than outside of your home most think it's the other way around looking at induction ranges instead of gas ranges. better ventilation in the home and automation to help adjust your -- >> technology brings down the costs. >> doing things at andrew's --

>> marble is a problem we agree marble is a problem. >> talk to you -- >> his foyer, like, you can't even -- talk, echoes. >> echoing because of high ceilings. >> talk less in the house. won't have the ukecho problem big things in the home product line to our shows it's all about helping families get the most out of their homes have a safe, happy, healthy home and anything we can do to help make it affordable is important to us. people can have a beautiful home that doesn't function. you he's in function first and beauty where we hit it. >> i'll get killed for this. how you market your products, what's working, what's not 30 seconds. >> everything shifting, content-driven commerce. trying to find organic ways to introduce products and anything curated for us is selling better than anything that just looks like, you know, a catalog or a listing. >> plan is social media for

selling. that's a weak plan need a bigger-picture plan we connect fans being real on social yes, i will do goofy videos from time to time sometimes, something doesn't look like a commercial, helps sell better. >> embarrasses me on social media. >> drew and jonathan scott appreciate you guys. >> thank you. and standing by at cme with breaking economic numbers. rick, take it away. >> yes import prices for the month of october, well, expecting down 0.3 up 6 cents go all the way back to march of last year to find a higher number, although in august we equalled up 0.6. petroleum, see what pushed prices down 0.2 petroleum and in prices year over year they are down 2% down 2% year over year now this marks, this marks the ninth consecutive negative

change that is significant and if we look at month over month export prices, down 1.1%, down 1.1% go back to may to find a bigger negative month over month change and finally export prices year over year, down 4.9% that's nine negative month over month changes in a row, and minus 4.9. well, we had minus 5.7 in august you can see there is big prices dropping on the export sides much of that might have to do with demand be in some of the economies that we export to. japan seems to have the same problem. initial jobless claims expected to be up 220,000 up 11,000 more than that 231,000. that constitutesthe slight revision from 217 to 218 in the rearview mirror. 231,000 believe it or not, have to go back to august, august 18th week of august 18th to find a

bigger initial claims number finally, continuing claims, which in many respects has been the area that has been moving up more aggressively. they've done it again. 1 millional 865,000, how far back to find a bigger number than that? november of 2021 finally, we will finish up with the first batch of economic releases with our november read on philly's fed index expected down 8 down 5.9 the 15th, 1-5, consecutive negative month over month change minus 5.9 actually is the highest since smallest negative number going all the way back to -- the last time actually it was positive -- that was -- well, wow. that was august of last year when it was positive 6.3 interest rates moved down a smidge in broad terms we have covered a range of 5% to 4.5%.

doing a bit more work under 4.5% but not my much especially considering cooler than expected ppi. monitoring how we close the week in relation to 4.5% and keep in mind europe today has a significant amount of bondage with the most in september becky, back to you. >> rick, thank you. when we come back, we have reaction to new breaking economic data. numbers rick talked about. takeaways from the fed after this week's inflation numbers too. former fed vice chairman roger ferguson will join us. by the way,uall alibaba shares stopping the cloud group because of u.s. chip restriction that stock down by 7.75% "squawk box" will be right back. -thanks for swinging by, carl. -no problem. so what are all those for? uh, this lets me adjust the base, add more guitar, maybe some drums.

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all right. welcome back t joining us to talk about inflation and where things stand former vice chairman roger ferguson asking similar variations of

this question the last couple days where do you think we are? mission accomplished do you think we've seen the peak of inflation >> i think we've probably seen the peak of inflation, becky i think the question is, how much is it going to take to get it down to the 2% number. >> i guess i should say peak in rate. >> peak in rate, yes, i think probably so and seen the ten-year come off. but really the question, as i said is, the market thinks the fed is done. i think many fed officials are hoping that's the case but i also think uncertainty from them because they don't want a head fake of announcing thinking they're done and having a start again. >> here's my question, and we spoke earlier this morning with another about this too five weeks ago everybody was thinking that, you know, rates are running higher quickly it was getting a little out of control and we thought maybe the fed lost control over what was happening.

that it was going to be concerned about the federal government spending being out of control that would continue to drive rates. are we past that concern, too? >> i think we are past i think we recognize there's still quite a bit of issuance, because deficit picture is at it is having said that what we discovered that the market is able to digest it better than we feared that's a good news in part that's important, because the fed itself is also trying to overtime lighting up its balance sheet. china likely to show down. i think the market is breathing a bit of a sigh of relief in fact issuance can be digested with other purchasers. that's good. i also would say we sometimes ignore the fact, even some fed officials, what happens with long rates depends very much what's happening short end of the curve and the expectation is probably ripe that the fed is

close to done has also helped calm things in the marketplace. >> mary daly france federal reserve president is cautious saying very encouraging, she doesn't want to say anything too quickly, because the fed would lose a lot of credibility if they then had to come back and raise rates again? >> i think mary daley is reflecting broad middle of this. there are 12 voting number, 19 in total i think many are in that place be cautious. don't want a head fake and take you back to what i said earlier. it's one thing to see inflation coming down, but still having a pre-handle and core pce has come in about above 3%. another thing to say inflation is coming down closer and closer to the 2% target, and so i think we'll hear more discussion around what is it going to take to actually get them to achieve the target so president daley's caution i think, is well-advised and we

should all recognize she's speaking for what i believe will also be many of her colleagues on the foic. >> so many people are looking for rates to come down as early as march. start seeing rate cuts because of weakness in the economy. do you think that's the case, or does the high ier for longer stc in there >> expectations more likely, i think, cutting, starting second half of the year and goes back to how quickly core inflation comes down it is still running well above the target, as i said. a 3% number, and people have gotten very focussed on the headline number. the core number actually didn't move very much so far. so wanted to view this and i think what mary daley is telling us, be a little cautious about the victory well done and more

to come in the day and more comfortable heading towards 2% not stock over 3%. >> roger, thank you for your time roger ferguson. >> thank you. earlier this week i sat down with berkshire hathaway chairman charlie munger at his home in los angeles. one story in the news recently involved a soured relationship between the company and the family which sold majority to berkshire. in a lawsuit the family accuses berkshire using an accounting method to could reduce the price the family gets if it decides to sell remains 20% stake in pilot to berkshire here's charlie munger's response to that. >> maybe we have interpretation and they have one interpretation and it's who is wrong and who is right, to be determined. >> by the court system the delaware court

>> i think respond come to reasons later. pick a number. >> munger added he thinks their formula clauses will change for future acquisitions, manipulation on either side, tighter on those things and warren bustette said berkshirie would abide by what the extract says according to the complaint, brought before the delaware court. an issue in the news because berkshire always had good relationships with the companies they brought into the fold a lot of things done three-page contact, and this was done a little different. >> and i remember loved each other when on. >> yes jimmy haslam. >> yes. >> and buffett. >> it's sad. bad blood. huh? >> yeah. what it looks like yeah but the court system, again, should decide and determine what happens with this. >> think over time buffett's got

the best of a lot's people one way or another don't you think? >> i think he prize himself on thinking that both sides are going to get a good deal yes. he's very opportunistic coming in -- >> man or a mouse? squeak up! you know what? great -- >> i don't know about this particular thing >> people have a way of doing well and in deals. >> being opportunistic say that was the case for berkshire and buffett during the financial crisis got great -- >> opportunistic is a great word >> some people would say potato some say potato. >> when we come back, live to las vegas where formula one takes over sara eisen in sin city and joins us ahead sara, what's coming up for us? >> hi. good morning, joe. yes, here in vegas where

festivities began. opening ceremony last night for formula one and it was over the top. lasers and lights, and that is sort of the point. that is what liberty media and formula one is doing to try to continue to grow their audience and fans and capture audiences in the u.s how it went from a sleepy motorsport popular mostly in owrope to one of the fastest gring in the u.s i'll be right back. at pgim, finding opportunity in fixed income today, helps secure tomorrow. our time-tested fixed income suite, backed by over 145 years of risk experience,

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box. formula one racing in 2017, one of the first things it did, apply a documentary sara eisen exploring how liberty has been trying to recon seed the f-1 brand. >> reporter: the cost cap limits what they can spend on building and developing their cars also made their finances more predictable. >> before somebody investing in racing didn't know if he would spend $200 billion or half a billion a year that was, everything in between. >> reporter: financial stability in turn helped drive a surge in the value of the team. >> when we got involved literally the bottom teams were traded for zero. today i don't think you can buy a team for less than $715 million and the top teams, $3 billion. a total change. >> reporter: andrew, the change in finances for the team helped lead to the valuations

skyrocketing as greg ceo of liberty media says one of a number of ways that liberty has changed the sport. they came in six years ago when it was kind of a sleepy motorsport popular in europe and south america, and now one of the fastest in the u.s allowed social media for the drivers. another important strategy where drivers weren't allowed to tweet or go on instagram louis hamilton biggest star has 3,000 more followers than tob tobtom brady. just before all locked down during covid, needed shows to binge, really introduced people to the characters in this sport, and all the drama that followed them personalities, taking helmets off. liberty add add race in the u.s. on top of that last year addeded miami race and vegas this year to showcase the strategy bigger, bolder races

full of elevated hospitality it is a spectacle. they're spending $600 million on this vegas race, and unlike other races, they are actually the sole promoter. in charge of buying the land, building the and there' a lot at stake for this race for liberty as they continue to plant their flag in america as a home of formula one. >> sara, real quick, i want to talk to you about vegas in just a moment because there's a lot of news stories about what's happening there this week and how this all relates economically, but in terms of the sponsorships, which has been a remarkable success for f1, how does it work, and how do the economics get divided among the teams? >> great question. so, sponsorships are a big part of the success story as well in terms of the financial gains of formula one, and it's companies that we talk about every day on cnbc from salesforce to amazon a lot of the tech players are in this because it is a very

technologically savvy sport. there are two ways that they can sponsor f1 they can sponsor the league itself, or they can sponsor the teams. so, full disclosure, cnbc is a sponsor of the mclaren racing team along with a number of other brands like hilton and goldman-sachs and aws of amazon, and it's an interesting symbiotic relationship where the companies don't just get the sticker on the car, but they really work with the teams and share best practices and advice, and in some cases, technology. palantir is an interesting example where they sponsor ferrari and they're using big data and generative a.i. to make the car go faster. >> sara, then the vegas piece of this, and i'm so curious what people are saying on the ground. there's a slew of stories effectively suggesting that f1 overestimated what was going to be possible in terms of the interest in doing this in las vegas. prices in some cases down 70% when it comes to hotel rooms

ti ticket sales itself, they had been trying to charge some of the hotels for viewing space what's happening, and what's the scuttlebutt around it? >> i've read those stories too, and we asked renee about this, the ceo of las vegas grand prix who works for liberty media yesterday. she said it doesn't reflect underlying demand at all when liberty put tickets for sale for this race, they sold out almost instantly, and part of it is they only released a limited supply there were less than a thousand tickets for the general public what's happening now is some of the resellers, they discount prices into the race i think that's just what happens. her assumption with live events as we get closer to this event i think from liberty and f1's point of view, it's a huge success financially. they have sold out the tickets they also have brought in new sponsors as a result of the vegas race american express, for instance, just signed on as an f1 sponsor. t-mobile has recently signed on

as an f1 sponsor they're not framing it that way at all >> i'm sure they're not, but what about the hotel companies it seems to me that the hotel companies are the ones that are struggling the most. they had obviously reserved rooms at very, very high prices. they're now actually selling those rooms at much lower prices, and it looks like they're estimating that for the weekend, in terms of, like, room rates, it's not going to be that different than a normal weekend. >> it's come down. >> i wonder what that portends for the future >> i think it's a handful of hotel companies, and i think the strategy, the miscalculation there was that they waited too long to release them i spoke for this documentary to craig billings, the ceo of wynn resorts at the high end. they didn't put many rooms out for sale to the public most of them were already booked up by corporates, sponsors, room blocks, partners, which shows where the demand is in this case it comes at the high end it comes from the corporate sector i think for the individual, who wasn't able to plan the race or get a ticket, things have come

down, but again, there was very little made available, and it came out very late because i think they overestimated how strong would be in the immediate run-up >> sara eisen, check out the documentary. it is tonight at 8:00 eastern time and pacific right here on cnbc called "inside track: the business of formula 1. looking forward to watching it live set your dvr . it can help you reach them with confidence. no wonder more than 9 out of 10 of our clients are likely to recommend us. ameriprise financial. advice worth talking about.

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little more than half an hour now to the opening bell on wall street -- it's not a ball might be a ball today. joining us now, global market strategist at jpmorgan asset management we have had back-to-back strong sessions after the inflation numbers were pretty cool, mira is this the start of something more or kind of the end of the beginning? >> it should hopefully be the start of some more stability into the year and whether it's for stocks or bonds. what we're seeing right now is that moderate news is good news. when we had too good of news throughout the fall, that was actually pushing yields up and pushing stocks down. if we, on the other hand, start to see a dramatic slowdown, things like a negative jobs

report, not what we see in the immediate future, that would hurt stocks and bonds as well, so right now, in the goldilocks scenario where we're kind of right down the middle in more moderate news, that's really supported the market and could support the market into year-end >> the narrative right now at this point in time is we've tamed inflation and we haven't hurt the jobs market, and we haven't really hurt the economy at this point. so, maybe some -- a little bit of weakness in consumer spending because they're not as flush as they were with all the stimulus checks but it almost sounds too good to be true. is it? >> the lynchpin here, as you noted, is really the jobs market, because even as excess savings dwindles, as people have lower savings rates, less deposits, all of these stats that we're hearing about headwinds to the consumer, i think that the challenge with an actual slowing consumer is the fact that people have jobs and when people have money coming in, that's going to continue to support consumption, maybe not as strong as we've seen in the

past couple of months, but certainly to a reasonable level such that we aren't going to see a slowdown in the economy without a slowdown in the consumer we may not see a slowdown in the consumer without a more weak jobs market. >> the -- i mean, the possibility that inflation is resurgent, is that -- what would you say the chances are of that? and the reason is, if it really is because we spent too much money or because the fed stayed easy for too long, then that could come back. if it really was supply chain disruptions and pandemic-related issues, maybe we need to go back and revisit whether it was transitory or not. do you think we're finished? do you think it's conquered? this is not going to be the '70s or '80s. >> a few weeks ago, we were having a more legitimate conversation about, could we see inflation reaccelerate more broadly as investors but i think the reality is, as we look at the reports, we've seen a great degree of stabilization in some of the supply shocks, whether it's

commodity prices or supply chain. the demand for goods has come down pretty significantly. it's really about the services and everyone on the services side, we're starting to see some of that cooling. shelter as well. rents in the real economy are decelerating so although we feel like we're a little stuck here, i think we're going to make more progress into next year especially as we see the economy get back to normal and then start to slow. >> we're out of time, meera. someone told me tomorrow is friday make sure to join us "squawk on the street" is next ♪ good thursday morning. welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber at post nine of the new york stock exchange futures a bit soft as we get more cautionary signals about the u.s. consumer, most notably from walmart and jobless claims, highest in two years on a continuing basis yields are dropping. ten-year 4.45% our road map begins with walmart. under pressure raising the full-yeague