platform down in brazil. details straight ahead. it's wednesday, septem septembe 2024, and "squawk box" begins right now. ♪ good morning, everybody, and welcome to "squawk box" right here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. it ooh is been a bit of a restart to the september. we're taking a look right now at the u.s. eck question the i futures. you're going to see red arrows this morning. as joe mentioned, nothing like the selloff we saw yesterday, but you're not seeing the market bounce back. the markets down . it comes after yesterday's

selloff. the s&p was down by more than 2% and the nasdaq was down by 2.3%. that was largely because of a 9.5% slide for nvidia shares yesterday that came on word that the doj subpoenaed the company, seeking evidence of antitrust violations. that loss wiped out 279 billion dollars in market capitalization. that was a record for any company to ever lose that much money in a single day. if you take a look at shares of nvidia right now, you'll see that they are indicated off ever so slightly and the premarket down by 0.8% to 107.13. if you looked at the numbers yesterday, other dhip stocks pulled down really significantly in yesterday's session. intel, martell, amd, and qualcomm. we'll talk about it more throughout the morning. all the major averages had their worst day of the month.

the semi-etfs, that was the worst day. nvidia, the most lost by any company on a day. >> you look at the actual stated value is based on the number of outstanding shares. could you ever sell all those shares? probably not. jensen huang lofltd $10 billion yesterday. >> on paper. >> on paper. >> we had duo interesting interviews yesterday morning, one with tom lee. a lot of his people were mad. they thought that he should have -- >> -- been more bullish? >> no. told them first. we kind of talked him into that 8% to 10% correction. we didn't talk him into it, but we were asking probing questions about what he expect on friday, whether he still thought inflation -- all of his bullish

calls, some of them had been based on inflation, being less worrisome. >> who was that? >> some of his newsletter writers who said what happened to the big small cap rally that was going to continue to the end of the year and suddenly -- the other one i thought was really interesting is amy wu silverman comes on. she says, yeah, the vix has quieted down from those growth years, but a lot of the other things that are still under the vix but kind of second derivative, she was talking about hedging strategies involving straddles, like calls and puts. she said they're very, very elevated. puts and calls on both sides. >> meaning something's building up. >> there's a lots of anxiety or not complacency for where we are even though we thought we took

care of those growth concerns six weeks ago. >> and the vix is still at 22. it was at 13 before. >> it was 14 yesterday morning. >> 22 right now. >> so she said that before any of that happened. the weird thing about tom lee, i thought, he thinks the risk of friday is that it's hotter. >> it's going to be hotter, and good news is bad news. >> the way it's acting -- >> bad news is bad news is what i thought. >> i think they're back to worrying. it could be a bad jobs number and we're back to thinking it could be a hard landing. >> because there are so many people looking at ti saying the weakness in china is not to explain why it's at the massive short levels and why it's below the levels at 69.7. >> it could be bought. it could be growth worries and inflation worries, which is the

worst. >> why don't we talk about how this played out overnight in asia. japan's nikkei tumbling 4% as they make supplies for chip companies including nvidia. if you're checking out the treasury market, yields yesterday pulling back. you're now looking at the 10-year at 3.8%. the three-year at 383. the vix we were just showing at about 22. yeah. yesterday morning was it 13, 14? >> 14 or 15 yesterday. you know -- >> the same that we've seen. >> it was up a lot. >> yes. >> that will catch your attention. bitcoin this morning, 56. so off by 2.3%. >> meantime we're also watching as we discussed crude prices which may be a signal of what's happening, falling by low 7%, following libya's oil production which is set to be restored after a local blockade cut off

700 barrels per day, pushed prices lower. expectations that the opec-plus group of countries planning to raise output amid a weakness in china's economy. the question, of course, is it that or something've broader going on? in the meantime we want to bring you an update on the elon musk situation in brazil. >> we do. i was looking. the vix was up to 22% yesterday. i think it's at -- i'm trying to see what the actual change was. >> 50% change? >> like a 50% move almost. elon musk battle in brazil over social plaid form x. yesterday the satellite starlink said it would comply to block x in the country so it could continue operations without the threat. starlink said it wouldn't cut off access to it. the supreme court has ordered the assets frozen to make sure x

pays its penalties. the top justice taking a position that musk's two companies were working in concert. that's always what you could accuse such myriad interests. you could never -- you know, boring tunnels and starlink and spacex and tesla. none of them are boring. >> except for the one that actually is boring in a si different sense. let's get on to the battler the carriage fee for espn and disney. subscribers lost access to those channels on sunday when the distribution had expire and the signals were blacked out. the loss of those channels means directv customers will not be able to watch the "monday night football" debut on monday night or the tennis matches that con

clutds on saturday and surrender. they pay $2 million to disney for a year but have been stuck to a morass. >> i think they're going to come to a deal but before football. that's pretty much how it goes. >> it's the mass level of lever ramming you have just before. meantime nippon steal offering a new olive branch to its critics, japanese steel giant saying the new board would include three u.s. citizens and the core senior management members would be american. the ceo warning that the company would close steel mills and move its headquarters out of pittsburgh if the planned sale collapses, of course, trying to put pressure on both former president donald trump and vice president harris who have both come out publically sfens. we're learning more details

right now. the openai plan began in the u.s. that could cost tens of billions of dollars. the types of products that altman has been pitching include data centers, increasing energy capacity, and increasing semiconductor manufacturing. part of that pitch is other companies aside from openai. . they have been courting investors in japan, korea, uk as well and there are questions whether he'll develop his own phone. coming up, small caps were hit hard. the more on those moves next. these are the staples that did rise like molson coarse, jm

smucker, campbell soup up almost 3.5%. "squawk box" will be right back. and establishes a charitable trust to keep the craft alive for generations to come. from preserving a cultural tradition to leaving a legacy, a raymond james financial advisor gets to know you, your passions, and the way you enrich your community. that's life well planned.

the russell declined 3% in yesterday's session. for more on what's next for the small caps, let's bring in chris rex letter, portfolio manager of needham cap growth fund and growth. you have a fund based on growth. is that the concern right now that hit the markets yesterday? >> so i think what hit the

markets yesterday was, you know, some of the concerns in growth and where's the economic numbers going, what is the fed ultimately going to do here in september. i think we'll see a better result versus a 50 basis-point cut. if they did 50, i think we're going to be looking at something more serious, but, you know, growth is certainly under pressure and we're seeing it coming out in some of the share prices. >> in the meantime you're pointing out that global economies are slowing, that probably we'll see some weakness in the labor market that we started to see already, so that could happen on friday. you think it has to do with the economy slowing too much.

our company is able to manage that margin in revenue throughout the rest of the year. we think the economy still needs to slow and will continue to slow, and whatever interest rate caughts come in, it's going to take a while for that to filter through. >> you think it would be good for small caps, the interest rate cuts. so why do you want 50 then? >> i think if we do 50, probably the fed is looking at a much more serious dire situation out there. >> what caused the 50, not that the -- 50 would be helpful for small caps probably. >> certainly. on valuation basis when you look at the cost of capital and you get out there and raise funds, whether it's in the fixed in market or equity capital markets, you know, that would certainly be a positive, but i don't think the initial reaction would be that positive. >> overall september is not great for stocks a lot of the time. we've had seven out of eight

positive months, so cement might not be a positive month and it could lead to maybe a better buying point in october, which has happened so many tombs in the past. we've seen lows set in october. >> what we saw in early august was a significant correction. we then had a rebounding and we may be able to test some of the lows. i don't know if we'll go as low as we went in august, but it's certainly a concern. they were coming into a geopolitical headline risk period. you're also going to get into tax loss selling. so if there is losses out there, i think as we get into the year end function, we could see further selling on that front. i don't think youneed to run out there and buy the market after yesterday. i think there's probably some more vought tilt and tough days ahead. >> if your money manager has some task losses for you, i think you should get a new money

manager. >> do you see some of the etfs? ati etfs people have been buying? no. >> hmm-mm. >> because it is not just nvidia. instead of buying one of those funds, you should have bought nvidia. maybe you should buy nouts. >> chris, layer the election into this, too, because there is some potential on tax bases and economic policy. what do you anticipate seeing in the market as a reaction to whatever may be coming. >> we had a summer surprise in the change of one of the candidates. if you were lining up saying this is what the tax policy could be going forward, i think it's unknown what those tax policies could be. there's talk of taxing unrealized capital gains, which could be a disaster for the

markets. >> how about the idea of raising the capital gains, raising some of their taxes. it's far more likely to happen more quickly. >> so you may pull forward some of those cap gains if people are looking at their tax brackets. it's more uncertainty. what are you going to do? you're going to probably compression multiples down and wait till you have that certainty in november or maybe we doge know until december. from past elections, you don't always know. but, again, you're in a headline period where i think candidates are going to put out their positions amount it's probably a lot less, but there's also regulation, what policies you're going to have, are you going to continue forward with some of the dollars still going into the chaups act, infrastructure expanding, broadband.

are they going to be at risk? it's hard to determine what the outcome is going to be. >> so you like some of these small caps. cheaper today than yesterday, huh? >> yeah. look, i don't think today is the day to buy it. you have a lot of news around intel, the old el tara assets. but long term we like sem conductors. they go into just about everybody. y you have to buy them right. i think you cautiously watch, do your due diligence on those names and see where the right entry point is. you don't want to buy something too early. >> badger meter.

>> watering business. all of your residential, you have to meter. those meters eventually run out of time. they're of the digital age as opposed to the new standard copper. that's a utility play that hahas to be run. >> i wonder. badger. you know that state a little better. and cal ex- >> that's a broad bapd place, getting to rural broadband and pushing into tier 2, tier 3 areas. they provide a new service, new experience for viewers. it's more of a hardware-based play than software. robinhood looking to attract customers in the uk with a new stock legending program. we'll bring you the details on

that in just a moment. plus, another consumer program rolling back diversity initiatives. we're going to roll that and see whaut means. we roll on on this wednesday morning. as he does his kids. and when he invests... nothing beats service with a smile. [narrator] this is tessa carter. culinary connoisseur. knows her ingredients like the back of her hand. same goes for her investments. so, i expect total transparency. lose the cilantro. [staff] yes chef! [narrator] say hello to peter armstead. type a cpa. he always knows exactly where his clients' money is going. so, of course, i expect the same with my money. [narrator] and meet betty ambrose. leatherworker. bootmaker. custom bootmaker. her hands can craft the finest tuxedo boot you've ever seen. what can i say? i'm hands on with my money too. [narrator] and what do all these investors have in common? we all trust schwab with our wealth.

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joo welcome back. robin hood is allowing people to earn passive income by lending stocks. users will earn a monthly fee for doing it, to rehn out those stocks in their portfolio. institutions typically borough stocks for settlement and short selling. most that offer plans in the uk

pass on 50% of the interest to the clients. robinhood offering 15%. the risk of the product is the buyer defaults and unable to return the value of the share to the lender. robin hood aims to hold cash similar to the value of the stocks so that means customers should be covered if robinhood or the borrower couldn't return shares. with all things, read the fine print. molson coson coors said it roll back the dei policy. the company will also eliminate supplier diversity goals. in the email to employees,

molson coors said it is shifting to a broader view in which all of its employees know that they are welcome. other consumer brands have recently rolled back such initiatives after facing pressure from activists including companies like ford, lowe's, jack daniel's, maker brown fordman and others. when we come back, a new cnbc poll found that more americans are worried about their retirement savings. sharon epperson has that story next. right now as we head to break, take a look at yesterday's s&p 500 winners and losers. >> announcer: executive edge is spore soared by at&t business. next-level moments need the next-level network. i'm really just here for the at&t internet,

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good morning and welcome back to "squawk box" live from the nasdaq market site in times square. let's look at the futures. down but not out. much worse yesterday. >> in fact, after yesterday's

selloff, a lot of investors may be even more concerned about being behind with their retirement savings. a new cnbc surveymonkey poll found that seven out of ten workers are concerned about being able to fully retire. cnbc's sharon epperson is here to break it all down. good morning, sharon. >> good morning, becky. this survey of more than 6,600 adults found a number of findings about how people feel about retirement. a majority found that reaching retirement may not happen like it did for their parents. 82% say achieving a comfortable retirement is much harder or somewhat harder to achieve. but looking at their own futures, the cnbc poll found 44% say they're cautiously optimistic to meet their

retirement goal. 267% are realistic about that happening. 21% are doubtful and 9% say they believe it's never going to happen. with decline in traditional pensions, rising health care costs, and people living locker, many say rethinking retirement is the new reality and i mate mean working at least part time in your later years. most workers, 69% are worried about being able to stop. even among retires, more than a quarter, 28% say they're currently working to supplement their retirement funds either because they want to or they have to. joe coughlin who heads the age lab at mit says retirement itself is being retired. often within a year or two, retires find that they're needing more money or they need to do something and so they go

back to work in some capacity. you can read more about the key finding in the retirement survey on cnbc.com. >> i guess the good news in that is a that a larger percentage of folks who go back to work in retirement are doing it because they want to. good news maybe because we're living longer, in better shape than we used to be. in terms of the concerns people have, inflation has a big part to do with it. >> inflation has a big part to play in it. also people are like what am i going to do during my time i'm retired. what we found in the survey is when we asked people ideally they wanted to do, they talk about travel, spending time with their family, hobbies. realistically do you think that you're going to be able to spend a lot of time doing that, the number comes down. the idea, what are you going to do on any given tuesday. >> you're going to be bored. >> right. so you may end up consulting or picking up some kind of free a lance work or a business idea. >> it's probably good in some

scenarios, keeping active. >> it was interesting how many people were talking about working in retimer and thinking whether or not that's a reality for them given hello concerns and others. >> a lot of people are worried they can never stop worrying and fully retire. what steps should you take? >> one thing people -- of course we talk about maximizing your savings and the tax advantage accounts. looking at the roth accounts more closely is more important for people to do because the money that's in the account is actually your retirement savings. people get a surprise when they look at their 401(k) and realize money is taken out for taxes, so it may not be all there for them. the other important thing to do is make sure you're monitoring your experiences as they're rising. as you're saving for retirement, college education, a all of those things that come up, it's important to do that. the main thing people don't

estimate their retirement income. how much will you have? what is your social security going to look like? and finally test drive your retirement. i think this is a brilliant idea that many of the vuzers have talked about which is figure out where you might want to live. take time off and go to that place and do what you were going to do. not just sight-seeing, but how would you live your real life and what would those real life expenses and budget look like from your house to your transportation and food and see if that would work and if you can stick to it. coming up right after this, the nfl season kicking off tomorrow. we're going to talk about a new venture that will provide football-related content. the nfl coach matt patricia is going to be joining us. a reminder, you get the best of

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welcome back to "squawk box." 33rd team is expanding. they're adding matt patricia and adam gase and super bowl-winning coach bill belichick. the content could change in the future. matt's here, the 33rd team adviser and nfl coach and ryan moore, 33rd team investment adviser and accomplice founder. good morning to both of you. congratulations. it's a very cool endeavor. tell us how it works. >> yeah, good morning. thanks for having us on. i'll kick it off for us. >> sure. >> you know, the great thing about the 33rd team, mike

tannenbaum has put together a great collection of coaches, executives, guys who work in the personnel department, areas of the game that if you want to grow and learn and get into the details of what the nfl is really about, i think it's a great resource for fans, coaches, former coaches, executives to go, weekly newsletter, we have a zoom session to get on. it's a place to grow and learn in the sport and really have that growth mind-set to be able to just continue to try and develop and get better. >> as an economic matter or business motto, we just said it's free. what is the long-term revenue plan for the company? >> yeah, well, i say there's two opportunities. first on the business to business side, i look at the opportunities. there's $32 billion companies, yes, there are teams, but these

are absolutely organizations and now you have pe coming in, so the value is only going to appreciate. in my experience, businesses that utilize more tech get more valuable, so i think there's a few revenue opportunities still to come on a business-to-business side. them on the consumer side, i think fans have a tremendous amount of desire for this expert programming or expert analysis, and the deeper you get into the game, the more enjoyable it is. those are some of the avenues 33rd can provide. >> if you were interested in betting this, i would imagine you might want to hang out on your site and you would probably be willing to pay for that. do you imagine having long-term media partners? do you ultimately think this is a business that gets bought by a media company? >> yeah. i mean, i think that's probably the logical, you know, conclusion, or it could be a

standalone business for quite some time. but i would agree that's a likely scenario. >> matt, i'm curious. we've got football about to begin in earnest. we talk this directv situation. how do you think that's going to end? >> i'll let the people involved with that handle that situation. i know that's a hot topic. but i think, you know, for your me, i. i'm just excited to get football going again. i think everyone's really -- can't wait for the games here this weekend. ic s can off thursday night. we've got to go to brazil on friday. that's another great matchup there. the game we love to be involved in, love to watch, we can now get into, you know, being in those situations where we can play fantasy football, be involved on the executive side of it, the coach side of it as fans and be able to watch the guys on the field do what they do at a great high level and see the coaches compete. i think it's an exciting season every year when football season

starts. >> what do both of you think about private equity and the southern earn funds and being owners of these teams. what do you think is going to change the dynamic of the game? >> yeah, from my perspective it was inevitable. these are 32 very, very valuable businesses, all north of a billion dollars. i don't think it's done yet. i think we're on the cusp of seeing private eck question the get involved in the athletic space as well where it will have much more impact in some ways in the inevitable situation of college athletics, but, again, i think private equity involved is a good thing. >> the reason i ask whether it's a good thing is you've had these families own these teams for a very long time and because of that you could argue they make very long-term decisions. sometimes good decisions, sometimes bad decisions, but with a truly sort of long-term

horizon if you will. i don't know if that's going to be the case in the same way if you have private equity investors who are watching a team, for example, on a cash on cash basis, for example, not be bringing in the money they're supposed to be bringing in in any given year and what that means ultimately to the team. >> yeah, i think it's going to attract talent. i think with capital going in, you get talent going alongside these families, and where talent guess organization sigh an appreciation of value. >> matt, you mention this idea of people are doing this not only because they're fans but also because they're super fans. maybe part of that is fantasy football and things that play into it. the big part of it is the potential to kbamable on these games like never before. there's a new estimate this year the nf is going to have something like $35 billion in wagers that it ushers in. how much do you think it increases fans' likeliness to watch games, just to have the

ability to bet on some of those things. what have you seen over the last five years? >> yeah. i think that, you know, that engagement that the fan has now with the ability to do that i think really invests them even more into all of the games. not only do we see fan as that are extremely proud of their teams, their area, or whatever the team was they grew up watching, but it brach. s out to the entire league. you're rooting for teams and different areas that completely enhances, you know, the overall experience of the fans now watching the game. it really putting them right in the middle of it. they're invested. now they're completely invested. we can move out to a lot more of the opportunities of the games that are being played. >> before we let you go, ryan, tell us about the relationship with bill belichick and hue that's going to work. >> in in ways he's the g.o.a.t. getting his involvement, at the end of the day, his stamp and

his brand being a part of the 33rd team and his insights in bringing over matt and his whole team is going to show the cap ber of expertise that mike and mike tannenbaum have assembled. we're excited about having the coach involved. >> we appreciate it. tomorrow they'll reveal the official nfl team valuations. that begins right here on "squawk box." also tomorrow don't miss the nfl kickoff on nbc and peacock. the ravens and chiefs starts at 7:00 p.m. eastern time. >> did you see bill belichick was in the garden state last week watching the high school football game. the battle of the beach. it was bergin catholic, which i think is ranked 19th in the country versus ing national ranked number nine.

bergin catholic is right by us. to come to a high school football game. kind of unbelievable. >> we'll see who they recruit from that. >> did he bring a date? >> i didn't see one in the pictures he had in the box. he had a baseball cap on. >> we've seen a more youthful person he hung around with. they became friends. >> he didn't have a hoodie on. he had a balk cap on. unusual look. watching high school. it was pretty awesome. when we come back, we're going to talk about the former top aide to new york, governor hochul who was arrested yesterday and is now charged with acting as an undisclosed agent of china. check out the price of crude oil rising up above 70 bucks a barrel after reuters says opec plus is discussing a delay in an

increase. right now oil is up to $70.90. it was69 $ and change at last check about 15 minutes ago. "squawk box" will be right back. daughter: hey, dad. dad: hey, sweetheart. daughter: what are you doing? dad: i'm gonna clean the fence. daughter: it's a lot of fence. dad: you wanna help me? dad: aim at the wall, but get closer. daughter: (gasps) what the?! daughter: alright. dad: side to side. when you work with someone who knows a lot and cares even more... you can do this. ...you're unstoppable. (♪♪) wow... are you kidding me? you can do this. at truist, we believe the same is true for banking.

a former top aide to new york governor kathy hochul was arrested yesterday on federal criminal charges that she acted as an undisclosed agent of china, and laundered millions of dollars for china. linda sun served as deputy chief of staff to hochul for a year and held other state government positions as well. her husband was also arrested on money laundering conspiracy

charges. both of them pleading not guilty in court in brooklyn yesterday. prosecutors allege sun engaged in political activities in the interest of china, and received substantial economic benefits as a result. hochul's press secretary said her employment by the state was terminated in march of 2023 after discovering evidence of misconduct and that she was immediately reported to law enforcement. when we come back, nvidia facing a doj subpoena over potential antitrust violations. it comes after a 9.5% decline during yesterday's session. we will dig into that story next. you can see nvidia shares this morning off almost another 1.5%, 106.44. year to date, still up by 115%. we'll be back with that story right after this.

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investigates claims that the chipmaker violated antitrust laws. joining us now to talk about the potential case against nvidia is former department of justice prosecutor ferdos altaie. it is not illegal to be a monopoly. it is not illegal to be really great at what you do. what would the department of justice be looking into? what could it potentially see that would be unlawful? >> you're exactly right. what most companies want to do, what most businesses want to do is dominate. the way you dominate is by bringing superior products to the market as quickly as you can, and servicing your customers. when you do that successfully, i often tell my clients, congratulations, you're now in the cross hairs of the federal government. so, what happens is doj is very

focused on and the federal trade commission as well monopolists who have used their monopoly power illegally. so, there are many legal monopolies, a patent is an example, a trademark is an example, but when you use that power illegally, then the federal regulators step in. nvidia is incredibly inquisitive. in 2024, it had many acquisitions. it did extremely well on the market and then brought a lot of ire from federal regulators. >> a lot of ire just because there's more demand for the chips than they can supply at this point or based on who they're giving those chips to? i'm not sure i entirely understand. >> so i came out of the doj and i looked at things that were federally regulated across computers and processing chips. we have a consolidation in artificial intelligence. the government under the biden administration on both ftc and doj have announced that that consolidation in chipmakers is

concerning because they don't want only certain companies to control how many chips go out. nvidia has been accused of selectively providing the product quicker to market to certain consumers of their products. the government doesn't want that. they want an equal -- they want an equal distribution and now the ftc and doj have divided up the a.i. industry. so doj is looking at nvidia and the ftc is looking at two other acquisitions. and the reason why is because they don't want consolidation into certain companies because then those companies could restrict supply, which would increase demand, they could drop prices, and so they could block out their competitors and then raise prices. both of those are critically illegal, criminally illegal under the antitrust laws. >> but simply -- jensen huang in the past, the ceo of nvidia, said he wants to give the chips to places where they're going to most quickly be used and put into place. you're saying that's part of the problem actually, that what they should be doing is distributing

it more evenly so that even if there is not enough to go around, that means what, that you get -- if you ask for 100 chips, you should only get 20 so we can give more to other outlets? >> that's a great question. acu meets a regulatory review. it depends if nvidia can -- if the story about how they're selecting their customers and consumers, if that proves true to the government. you can discriminate against certain customers in advantage of other customers under very specific set of facts. if nvidia can prove that what they're doing is beneficial for customers, then they win that argument. if they cannot prove that, they lose that argument. that is the battle of the experts, the experts internally at the doj, who are economists, external experts at doj will hire and, of course, nvidia's counsel team and own experts. they have to prove that in a

court of law. right now nvidia, because it is going through yet another acquisition, has made a filing, a public filing under the harts rubiono act, doj is the regulator who is looking at that acquisition. they can send a civil investigative demand, a document and deposition subpoena any company that is regulated. when nvidia goes for another acquisition, that actually opens up doj's opportunity to look even deeper into the company, before approving that acquisition to go forward. that's a position that nvidia is in. so doj -- >> let me just back this up one moment. i'm not sure i understand. if they can prove it is good for customers for certain customers or has to be good for all customers because i'm sure if you're asking the big guys who are getting all these chips, they're saying it is great for us. if you look at other customers who aren't getting the chips they want, they're going to say it is bad for us. and some have even supposed that this is coming because some of those customers who aren't getting as many chips as they

want are complaining. does that sound like the type of situation where it would pass muster or would not pass muster? >> you are right. usually it is the customers who are not getting the supply that they demand that go to doj and the regulators and complain. doj will take a look at what those customers are saying, versus what nvidia is saying and, of course, nvidia will brea to bear all of its own customers who are very satisfied with the product, very satisfied with the supply and then doj will balance what is happening across the market for a.i. chips. look at the market entirely and then decide whether it is permissible under the federal antitrust laws to discriminate against certain customers in favor of others. >> what if all the customers are mad because none of them can get as many as they want? >> well, then -- >> that's just supply and demand. >> 100%, and that is where business and regulatory regime under antitrust laws are always going to be at lager heads.

>> if i was at nvidia, i would be looking and saying none of my customers are happy, this is the situation, there is so much demand, i can't please everybody. >> that's part of it too. if the customers are happy are important to the national security to the united states, very important in what they do for our economy, then their voice will outweigh the small customers who aren't getting what they want. >> so the solution becomes, okay, maybe it is not fair, but it is in the interest of national security and that's how you win and get around that. okay. it is pretty complicated stuff. it sounds like there is a lot at play and a lot that can yet be interpreted. what would the solution be if there was some sort of action brought? >> the solution is always divestitures. so, the government will look at nvidia, they will look at their customers and they will say, okay, you want this acquisition, you have to divest these other business units, you have to sell to your competitors, certain capabilities, or a divestiture

can be that nvidia would license something to somebody else, to a competitor. so competitor can then be able to produce the same thing that nvidia could produce. think about pharmaceuticals, you have patented ed pharmaceutica and then generics. when you come out of the patent, you can license to make generics. that could be a workout. but this is a wonderful place for legal creativity. these are lawyer arguments and economic arguments and most lawyers who do this work have an economics background. it is all about the market, all about what's best for u.s. consumers. not u.s. manufacturing, u.s. consumers. so that's the lens the government looks at. >> ferdose, thank you for walking us through it. it is just past 7:00 a.m., 7:02 on the east coast. you're watching "squawk box" here on cnbc. i'm andrew ross sorkin with joe kernen and becky quick. a lot going on this wednesday morning. hump day. today's top stories, snapchat

soon starting to test sponsored ads next to the chat threads. evan spiegel saying sponsored snap brands will appear as unread messages in the main chat tab, the first time they have tried to sell advertising against that part of the app. nippon steel offering a new olive branch to critics of the purchase of u.s. steel. former president trump against that merger. the steel giant now saying the new board will include three u.s. citizens and that the, quote, core senior management members of the company would be american. the ceo of u.s. steel warning that if they don't do this deal, there will be plant closures and the company could move headquarters from pittsburgh, if the deal falls through, we will try to find out what vice president harris and former president trump think about all of this. meantime, we're watching crude prices climbing back above now

$71 per barrel on new reports that opec plus could delay production cuts that were planned for next month. let's look at the futures this morning after that big sell-off yesterday. not really a huge downdraft this morning, but not a rebound. dow futures now up by 90 points. s&p futures down by 25. the nasdaq down by close to 3.3% yesterday down another 155 points this morning. right now, we want to check in with dom chu. what's happening under the surface here? >> it is a lot of earnings reports becky right now. we'll check things, start things off with late breaking earnings this morning. we're going to start with shares of hormel, down by 4.5% premarket. the package food company behind chili brands and others reporting what appears to be mixed results compared to consensus as investors look toward comparability. but the initial look is a slight

beat on earnings with a miss on sales. hormel also narrowed its expected full year profit range with the higher low end, but lower top end so those revised forecasts are due to lower than expected commodities markets and disruptions to a couple of key facilities in virginia and nebraska. for hormel, shares down 4.5 to 5%. now shares of zscaler, down 16% right now after the cybersecurity company issued a weaker than expected profit outlook. they did post a beat on the top and bottom lines with revenue rising 30% from a year ago. but it was not enough to boost the stock, which is now down 25% or so on a year to date basis. and then let's move on to shares of gitlab, up around 13.5 to 14% after the software development company reported a beat on profits and revenues for the quarter. they also raised their outlook as more businesses work to integrate a.i. and security protections into their technology. those shares still have 19% so

far year to date, but gitlab bucking the trend with regard to this overall market downturn. back over to you. >> dom, i hate to throw this at you, can you show us maybe the semiconductors etf or something, how things are shaping up this morning after that rough, rough day yesterday. >> sure. if we can get nvidia, smh, all the other ones up, it is right now down 1.5% premarket. we don't know whether the downtrend remains in place. whether or not we do kind of approach the lows that we saw back earlier this summer remains to be seen, but if you kind of look at the moving averages here, there is a little bit of weakening or relative strength momentum declines with regard to the etf. this one along with nvidia, broadcom, qualcomm, many of the other names yesterdaywere among the biggest laggards in terms of the overall drag on the nasdaq. if you look at nvidia overall,

still down 2% right now premarket. it is going to be a big driver of sentiment. many of the names fall in line with the nvidia trade, even if they are not exposed directly as much to that so-called a.i. narrative that we have seen so far. but that semiconductor etf is so key because a lot of traders do kind of look at that chip trade as maybe the leading side of things with regard to the overall tech trade. so, it is going to be key. >> you're so good, dom. i knew i could throw anything at you without heads up and you would have the answers. >> we have been covering this so much. >> thank you, see you later, dom. results out from dick's sporting goods. earnings up, beating ing estim of $3.83. revenue coming in above estimates. comp sales rising 4.5%, beat expectations of 3.6%. the company raising its full year guidance for earnings and comp sales as well. coming up on the other side of this, futures extending losses after the worst day for

the s&p since early august. we're going to talk about the market sell-off right after the break and what it means and where things may be headed. plus, sam altman's plans will be closer to reality, early openai investor geoff lewis will come on to talk to us about that and so many other issues. "squawk box" returning after this. ( ♪♪ ) sometimes, all the tenacity and grit in the world... ...can't overcome the boundaries we face. ( ♪♪ ) so morgan stanley is partnering with the women's tennis association to remove them. ( ♪♪ ) because this game is for everyone. ( ♪♪ )

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me ask you, it is september, it is back to school, back to work and the market vomited a little bit yesterday. how are you feeling this morning? >> that's a good expression for what happened yesterday, absolutely. and it is kind of reminiscent also of what happened at the beginning of august, we're seeing quite a bit of choppiness going on in the market here. it may continue until the elections and then i think it will resume to new record highs. much will depend on who wins and i'm rooting for -- >> does it matter who wins? >> well, i'm rooting for gridlocks. i think it matters if we get a sweep of the democrats or a sweep of the republicans. i don't think the market is going to look forward to those kind of regimes. i think the market much more prefers gridlock. i'm betting on gridlock. i think gridlock will win. if that's the case, the market will move higher because the economy is doing fine,

notwithstanding the tightening of monetary policy over the past couple of years, the geopolitical and the domestic political stress, but all and all, the economy is doing fine. >> what happened yesterday. we keep talking about the doj investigation into nvidia, the sell-off took place before that was reported by bloomberg. so, what really kicked things off, what are the underlying concerns and i'm assuming it is about a lot more than just the election because it doesn't seem like it was an election sort of issue that played out yesterday. >> it really didn't make much sense that all of a sudden the market started off with such a decline. i hate to say this, sure seems like there may have been a leak. the ferociousness of which the market took a dive suggested that somebody had figured out that something could come out in terms of bad news for the semiconductors. particularly for nvidia. and then 10:00 we had the

purchasing managers come out and that kind of brought in all the hardlanders out there, here is an example of a hard landing. the purchasing managers survey of manufacturing is turning out to be another useless leading indicator of economic activities, leading indicator, which hasn't been very useful. the reality is real gdp is an all time record high and by the way, all time record high in both services and goods. >> let me ask one more question on nvidia and then i'll let this go. markets clearly aren't always rational, don't always make sense, especially in the short-term. if nvidia and -- if all the stocks were selling off, all the semiconductors were selling off because of the doj, wouldn't the doj investigation be bad news potentially for nvidia, but potentially good news for its competitors? >> you would think so. but, you know, there is a lot of internal dynamics to the market that have nothing to do with fundamentals. i think we saw that in august

where we had the carry trade unwind and i think this is a semiconductor unwind, just the knee jerk reaction was if it is bad for nvidia, it has got to be bad for everybody else. you're right, it should -- it shouldn't affect the rest of the market. >> we had someone on yesterday, just talking about some of the other internal dynamics of the market that even though the vix came coudown there was a lot of hedging going on. september is not a great month, typically. and that was a weird growth scare that we had six weeks ago, it came and passed so quickly, it was pretty significant. the vix got up over 50. so there was something to it that all the fed hikes, the lag, we may have underestimated how much bite that those higher rates had on -- so friday is the jobs number. i think it was -- i think it is angst about the jobs number. we had one person say they're worried that there could be some hot inflation data. maybe it could be both.

and that's the worst of both worlds, that maybe things still stay a little bit hot in terms of inflation or at least we don't go -- we're up 20% in the last couple of years overall with prices. so that's still tough. and what if we get a bad jobs number on friday. the growth concerns will be front and center again. and that could really -- it would be a recession fear at that point. >> well, you know, i've been dealing with this recession scare since 2022. i've been arguing that we're not going to have a recession, that we have been having -- >> never again? >> no, no. i mean, eventually, you know, i just wrote a piece, some day there will be a recession, but the data still looks on balance to show the economy is doing just fine. and with the fed ready to lower interest rates, that's going to help the mortgage market, that's going to help the housing market. rcos are hanging in there really well. you're right, people are looking

for reasons to be nervous, markets had a heck of a run, valuations are not exactly cheap. warren buffett's sold some stock. >> that's something. >> and it is september. september is the market's halloween month. >> so, ed, what would make you think, okay, this is a time to jump back in? if you're convinced that we're going to end the year on new highs, what is the point that, okay, everybody back in the water? >> well, i don't think anybody really kgot out of the water yesterday. maybe some traders got out, but the degree to which the market went down didn't really give too many individual investors or institution investors any time to think about it and conclude let's get out. rather than thinking about getting back in, i'm just staying in. i've been bullish on the market and i don't see any reason to jump out of it. >> okay. did you say one minute? or get out of this? can i ask him another question?

>> absolutely. >> let me just ask you about oil prices. because we're back above $70, just barely, but that below $70 we saw before, even $71 at this point raises lots of questions about is this more than just concerns about a china slowdown? is this concerns about a slowdown here with the economy as well? >> i think it is to a large extent the china slowdown. over the weekend, if you're looking for something fundamental that happened over the weekend, and maybe it wasn't a leak after all, perhaps the market kind of knee jerk sold off on the bad pmi, coming out of china. but who doesn't know that china is weak? and it wasn't any weaker than it has been for a while. on the other hand, we also had some back and forth on whether opec plus is about to increase supply or not, and this morning it is like, well, maybe they're not after all. it is certainly not in their interest to increase supply in an environment where the market

is quite weak for them. but it is good for the economy. it keeps inflation down. oil is the key leading indicator of inflation. i think this is great for the economy. >> ed, thanks a lot. we'll see you soon. >> thank you, sure. coming up next, the market sell-off hitting one of the pockets of the financial industry harder than the others. leslie picker has that story next. and then later, tennis coach to the stars, first got to be good tennis players, then be a star, brad gilbert joins us to discuss the business of tennis and he loves talking about stocks. investing for decades. "squawk box" will be right back. >> announcer: time now for today's aflac trivia question. 53, atstarting production in 19wh is the only year the corvette wasn't produced for the public? the answer when "squawk box" returns. good thing i had aflac. (aflac duck) hmmm the cash i got from aflac

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the only known 1983 corvette is on display at the national corvette museum. welcome back to "squawk box." within the financial sector, yesterday's market sell-off hitting one pocket of the bank industry harder than others. those deriving more revenue from investment banking. leslie picker joins us with more on that this morning. good morning. >> hey, good morning, andrew. that's right, amid slowdown fears, the market is selling off capital market sensitive stocks more than others. goldman sachs and morgan stanley, two firms that derive a substantial amount of revenue from investment banking and trading declined more than 4% yesterday. boutique firms which serve in many cases as more of a pure play on the capital markets like jeffries, evercore, molis and pjt had a similar fate in tuesday's trading. contrast that with megabanks, with more sizable consumer and lending practices, which held up a bit better. jpmorgan did slip 2%, but also

got hit with that downgrade by deutsche bank from a buy to a hold. bank of america and wells fargo were only fractionally lower yesterday, deutsche bank did upgrade those two to buys as well and citi was less than 2% lower in tuesday's trading. but regional banks too, very minimal investment banking activity, those were down a little over 1%. now, the recovery story in deal-making and securities issuance appeals to be a fragile one and any hint that the economy may miss its soft landing could delay transactions until c suites have more confidence. uncertainty about the economic picture can spook stocks with more exposure to investment banking, especially since over the summer most of them were actually bid up on the hopes of a recovery in this market, andrew. >> leslie, it is an interesting one, and i just wonder whether these stocks are going to come back. obviously hopefully they'll come back at some point. the question is how tied they are to this issue.

>> yeah and we'll see. in the next earnings report. so it is interesting, in the second quarter earnings, a lot of the companies with exposure to investment banking said pipelines looked pretty good. that's essentially kind of what you don't see on the surface of deal activity bubbling below. that ultimately takes a while to actually translate into revenue, especially as it pertains to m&a, you have to wait until those kdeals close. issuance is a different story, but so far this year, investment banking has really been held up by debt capital markets. a lot of that refinancing activity getting pushed to the first half of the year. so the second half of the year has been a little bit more of a question mark. it looks like the ipo calendar is going to remain dormant for most of the year, most of the rest of the year. as well as m&a which is a bit of a question mark. >> leslie picker, thank you. nice to see you. >> mm-hmm. when we come back, temu and

shein under investigation. let's look at crypto prices this morning. down across the bod.ar bitcoin off by about 2.5% to 56,515. "squawk box" will be right back.

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$20 refund for the loss of espn, abc and other channels owned by disney. subscribers lost access on sunday when an agreement expired. the signals were blacked out. directv says it pays disney $2 billion for channels. it has 11 million customers, making it one of the largest paid tv providers. a pair of commissioners at the consumers products safety commission are calling on the agency to investigate shein and temu. this after deadly baby and toddler products were sold on both websites. they want the agency to examine how the retailers comply with u.s. rules and handle relationships with third party sellers, both have come under scrutiny for the quality of the items they sell. >> there has been a saturday night live skit on this already, talking about -- they called it some combination of those two names when they did it, but it was basically, you know, you wear the stuff, it is cheap, it

is poison, funnier than i'm making it sound right now. >> there is a movie out called "saturday night" that premiered out in telluride. the last 90 minutes of the very first show, yeah. pretty good. pretty good. what was really going on, lorne michaels, the guy didn't remind me of lorne michaels very much. >> but was supposed to be the guy. >> the guy that looked like chevy chase. john belushi -- >> all the s playing those peop. but a lot of the gen z people out there, they're just -- >> they don't know what they're watching. >> had no idea. that's the way it is going -- it will happen to you. >> it already has. >> i do want to say one thing that is very important. >> no, the audio. >> the audio. we're getting complaints of the audio. >> trying to figure out. we're getting complaints about it. >> don't switch.

don't switch for that reason. i'll give you a different reason. coming up, we'll talk about sam altman's big investment plans for openai with geoff lewis. plus much more on nvidia. that's how it is pronounced. write it down, like it has an e in front of it. nvidia. if you hear an analyst call it nvidia, don't listen to them. it is nevada, by the way, too. more than 9% drop yesterday, the company wiping o outr at least the market cap itself went down on paper, $279 billion. we'll be right back. car, where are we going? we're here. (♪♪) surprise!!! the future isn't scary. not investing in it is. car, were you in on this? nothing gets by you james. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com

welcome back to "squawk box." chatgpt maker openai flirting with a $100 billion valuation, funding talks with investors. the company growing up board members, experts as the a.i. landscape gets more competitive and draws more scrutiny from regulators. joining us to talk about this and so many other issues, geoff lewis, founder of bedrock capital, investor in openai. good morning to you. nice to see you. hope you had a great summer. curious, just your reaction to sort of some of the big grand plans that we have been hearing that have been reported about in terms of what openai and sam are trying to do, potentially outside of openai even, around

some of the infrastructure issues in this space. >> certainly, good to see you, andrew. thank you for having me. obviously as an early investor here at bedrock, we're very enthusiastic about what has been reported. can't share too much on the specifics, we're under nda, but it has been publicly reported that the lead of this perspective round is another early investor in the company, thrive capital, which is a firm we think highly of. and the infrastructure efforts were very enthusiastic about ultimately a.i. is going to need tremendous amount of energy, going to need a tremendous amount of data center infrastructure, and we think there is a huge opportunity in the united states and some of our allies. very excited about tracking there. >> there has been a lot of speculation about ultimately whether openai will have to go to public to provide liquidity and exit opportunity for folks like yourself. but if it is to do that, it may have to change its structure, i would imagine, in some way,

given that it is technically considered a not for profit. >> yeah, i imagine they're going to work that out. might get worked out with the -- might get worked out down the line. these companies in practice have been staying private much, much, much longer than historically, something like spacex has been private for at this point 22, coming up 23 years. they have a quarterly tender offer process for early employees and investors, if you want to sell your shares, you can do that in the private market. in practice, you can get liqu liquli liquidity as an investor. it has grown. and a.i. structure will continue to evolve. it is a scenario where in order to really pursue the research, they have to create a commercially viable business. and they did that exceeding anyone's wildest expectations. >> if, in fact, the company

turns into a for profit entity that ultimately goes public, what do you think someone like an elon musk or some of the other early funders, i'll call them funders of the company, or the not for profit were at least under the guise it was going to be a not for profit, should they get an equity stake in this thing, should they get huge -- should there be a massive payoff for them or not? >> well, i think several of them actually invested in the for profit amity several of the early funders of the nonprofit came back in and invested in the for profit subsidiary. elon was not one of those folks who did that. i think ultimately that would be a question maybe for elon's tax advisers on -- if you want to get a stake based on this nonprofit donation and what does that mean? that opens up a whole host of tax questions. there is the nonprofit entity. i'm not an expert on that stuff at all. but, yeah, i would check. >> more broadly, we have seen a

little bit of a sell-off in the market. a lot of sell-off in the market in the last day on the back. i don't want to say on the back of the news around nvidia, but maybe on the back of the news that news came out after the market closed, but maybe there was rumors in the marketplace around this doj investigation. what is your take on whether nvidia is a monopoly? >> man, it is a really hard question. i think the doj google case, to me, makes a lot of sense. sort of very narrowly focused on this violation of the sherman act, which was sort of the phenomenal republican senator from ohio. senator sherman came up with in 1 1980, they took it a few degrees too far with device manufacturers, that narrow point that extended the monopoly power beyond the product through the partnerships that really got them caught in the cross hairs

with doj. big fan of that google case. i think the doj is right to have ruled the way they did. >> what would be your remedy on the google case? >> very, very, very hard. i think the government practice is way too incompetent to break anything up. so, i don't know what the solution is. but i do think that they -- that that most likely there should be some major punitive action against google. and nvidia, to me, is just a much, much less clear story on whether there has been true anticompetitive behavior. i haven't been able to see it from my vantage point. >> as an investor in the a.i. space now and we're going to hear apple coming out with the new phone on monday, are we at an inflection point, do you think there is going to be a whole new sort of super cycle when it comes to hardware or software in the next year as a function of this, or do you think it will take a lot longer? >> feels like it is just going to take much, much longer and so

it is definitely a major new wave. i've been on this program many times over the past few years saying what a crazy a.i. bubble. the names that i've been long and we have been long at bedrock have been openai and historically nvidia and then it just does seem like this is the type of thing that evolves over decades or many, many years. it is not like there is going to be a 2025 super cycle. i would be very skeptical of anything with a.i. in the name that is not openai. ma i would be skeptical. >> where are you on and thropic >> they have gotten a lot of traction. they're the number two sort of stand alone private market, foundation model player. then i do think there is this question that folks should be looking into around we sort of have this movement in silicon valley called effective ultras,

there is the basic idea is there is this set of entrepreneurs, this set of companies where they want to make all the money in the world, and then use that money to quote, unquote save the world and the standard bearer for effective ultra until 2021 was sam bankman-fried, he's in jail for the fdx fraud. today's standard bearer is dario of anthropic. we want to really look into the effective ultras and anthropic link and what is going on there. google, of course, second largest investor in anthropic. maybe the doj should look at what's going on there as well. quite skeptical. want to make all the money in the world to save the world, that scares me, that's a scary thought to me and that's the anthropic ethos. i'm long by that. they're certainly a formidable competitor at this point. >> there is a lot underneath that you just threw out. i wish we can had time to get into it all.

i appreciate you being with us this morning. >> be well. >> you bet. coming up this morning, tennis legend brad gilbert talks tennis and stocks. that's rightft aer this break. and at the top of the hour, we'll talk technicals with katie stockton. "squawk box" will be right back. this is our future, ma. godaddy airo. creates a logo, website, even social posts... in minutes! -how? -a.i. (impressed) ay i like it! who wants to come see the future?! get your business online in minutes with godaddy airo are you keeping as much of your investment gains as possible? high taxes can erode returns quickly. at creative planning, your portfolio is managed in a tax-efficient manner. it's what you keep that really matters. book your free meeting today at creativeplanning.com.

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comcast business mobile. you could save up to 70% on your wireless bill. so you don't have to compromise. powering smarter savings. powering possibilities. okay. let's talk tennis. the latest coming out of the u.s. open tennis tournament, in investments also from brad gilbert, former pro tennis player, now tennis coach. you've been a long time friend of the show. you've been -- what is your longest holding position? you've been -- microsoft? >> still microsoft. i tell my kids, it is the modern bank, because if you put your money in the bank, you get zero interest. if you put your money in microsoft, you're doing okay. i would like to see dividends be more than 3% though. >> over time, microsoft is -- >> that's the way to go.

at least for the moment. >> we'll get back to stocks a little while. it has got to -- just so you know, market capital, over a billion dollars if you -- and more than -- you've got some stocks that you've come up for that have 12 letters in the symbol and you have to look up something. not even the pink pages, chartreuse pages. >> back in the day, you have to look in the newspaper to see it. now you go to your app and things are a little bit easier. >> a billion dollars. not a billion yuan, none of that, all right. let's talk about -- i guess we'll talk about coco. i've known you long enough, used to sit in the box you, with andre, with andy. i'm surprised you have any fingernails. you are more nervous than the players when you're doing it. no? >> you know, obviously you heard for your players, you want the best, and sometimes things don't go the way you want, but, you

know, i try not to get too elated when my player is doing well and then you try not to get too down. sometimes they catch you with your head down a little bit. didn't go as well here as we would like, but, you know, the sun comes up the next day. and then you got to be positive and hopefully things will get better. >> it is relationships don't last forever. a lot of times. is this -- how is it going with coco right now, would you say? >> you know, it has been a good 14 months. she's accomplished a lot. and the great thing is she has huge upside at 20. and if she was a stock you still put a buy rating on her. she's a great kid. she works hard. and good things will happen for her. unfortunately, it wasn't a great tournament for her. but the player that beat her, navarro, is playing great tennis, she's in the semis, who knows. maybe she got a legitimate shot to win it. we have pegula left. on the men's side, this is the first all american semi since

2005, andre agassi beat ginipri. so we have tiafoe versus fritz. the first time an american man is in a slam final since 2009. >> do you think the olympics was a problem for the open this year? >> the olympics? >> the olympics, the fact that all of these guys -- by the way, who were all the medal winners, basically all out of the open. >> four years -- >> did they get tired? >> every four years we have the same issue. and obviously the toughest part is the switching of the surface. we went from grass at wimbledon, back to -- well, first, we went from the clay at roland garros, back to grass, back to clay, and the quick turn around. so, normally every four years the olympics is not very far away from the u.s. open. the changing of the surface made it a little more difficult. i mean, listen, what about 2021?

we still called it the '20 olympics. we came from tokyo. it was still on the same surface, same as brazil in 2016. back to 2028, it will be coming from l.a., the same surface. i think that was the toughest thing. but, you know, it is what it is. >> we were just talking about inflation, and one of the things that has been incredibly inflationary are the drinks that they're serving out at the u.s. open. the honey deuces, they're cool looking drinks, but i saw something about how they're $23 a drink at this point and that's far outpaced inflation. >> probably 10 bucks for a water. actually, though, i heard during the qualies week, which is the fan week, they do 200,000 people, and it is free for everybody to come. but they did $9 million in sales in honey deuce and i think it is only up a buck from a year before. but if you go to anything here in new york, or l.a., heck, i

went to a laker game and the beer was 18 bucks. that was last year. so, it is -- every sport -- >> it is a pretty drink. >> if you're going to go, it is going to cost you. but they're going to draw well over 1 million fans for the tournament, the the first week 75,000, record crowds. whatever they -- prices are, whatever they are, it's not affecting people. >> who's going to take the mantle? i guess alcaraz is heir apparent. never seen before. >> in everything. nobody beats father time. djoker's done an amazing job. lost fed. djoker's 37 on the back nine. still good. >> what hole? >> probably 15 and holding, but, you know, frances said something really kind of, what other

players think. he goes normally when you're in the quarters, if you were playing raphael for joker you're looking at flight home. i think guys now for the first time have a different belief. obviously, sinner, still in. plays medvedev tonight, is favorite. alcaraz won four majors at 21. i do feel like it's been 21 years. you know, since radek won, and that's the question that the americans always get asked. we have five now in the top 20. i think they're playing with a lot more belief. it wouldn't shock me if one of the americans won. sinner is still a favorite on men's side. so both number ones are still around. >> talking about economic health of the open. curious. what do you think about the health of tennis? a big question. how many people are even playing it? nike, i know, they're athletes, hardly making tennis sneakers any longer.

really inners it of underinvestment, divestment in tennis is not the way it used to be. the question is why is that? because less people are playing. >> i'll spin it a different way. >> i love it, by the way. i play every weekend. >> i've been playing dennis since i've been 3. i'm 63 years young, and if you play tennis, you live nine and a half years longer. and so tennis is a game for everyone. whenever you pick it up it's always there for you. people saying, oh, pickle's taking over. it's a great game but there's room for everything. there's more people playing tennis now than ever. obviously it needs to be a little more accessible from schools to more public parks, but i think tennis is in a healthy spot, and the great thing about tennis. if you learn to play tennis, or just play a little bit in high school or socially, it helps you in all avenues. helps you in business.

helps you in life, and if you join a tennis club, there's a really good chance that the circle that you're with, with your tennis friends, is the circle that you'll surround yourself for the rest of your life. it's a beautiful thing about tennis. so i'm not worried about the health of it. i'm not worried about what pickle's doing. we should be worries about what tennis is doing and i think tennis is in a great position to succeed and do better. >> all right. got to stop. you don't like the fed but i won't let you go off on the ed. >> no. he's got to go. listen, if you got a company, you don't have somebody run a company that doesn't have any experience. how do we keep putting in scholars to be the fed? roger federer is here. rather have him. but there's no chance i'm letting somebody be the fed who's a scholar that's never run a company. that's unacceptable. so that gets on my nerves, and make him president. >> no, no. can't have that. don't get me started on that,

but -- >> not going to. >> politics. >> all right, man. good to have you on. >> i appreciate it. and come to the tennis. >> i would like -- it's later this year. usually it's almost over, usually, by -- labor day. >> listen, things are getting exciting now. >> yep. >> now's the time to be there. an.okay. thks >> thank you. "squawk box" will be right back. ( ♪♪ ) morgan stanley is partnering with the women's tennis association to remove boundaries... ( ♪♪ ) because this game is for everyone.

. welcome back to "squawk." lyft announcing a restructuring plan certain assets related to bike and scooter operations and termination of about 1% of the workforce. the company expected to create 34 to $46 million restructuring. more of that news as we get it. the tech sector coming off its worse day since september 2022. dragged from the mag seven to the semiconductor stocks. semiconductor stocks took it on the nose. joining us with his outlook and "squawk" picks, paul meeks. and, paul, how are you feeling about this in the aftermath?

>> so, what i think's going to happen is we'll have a repeat of what happened only a month ago. so if you look at the bellwether stock, nvidia, a month ago it did close at about 98, 99. even got lower than that in early august. in the intraday move. so we'll see how it goes. i imagine that we'll retest and if we successfully retest that, then i'd probably go in and become an aggressive buyer again, because in the last month or so we had their quarterly earnings report and other data. of course, the company's going to slow a little bit, but it's still growing at a really good rate. the outlook is very bright. i think the only thing that's really new that changes the thesis, i don't really think it changes it at all, is the subpoena that they've received from the department of justice, which is typical in the technology sector when angry

competitors start complaining to the government. so i actually think it's a pretty good buying opportunity. after the smoke clears i hope clearly soon. today looks like the stock will open up at 106. that means trading 29 times next year's earnings for 42% earnings growth. whereas -- a nice discount. whereas the s&p 500 is trading at 20 plus times earnings, and probably trading at a pipeeg ra three times. i think it's quite attractive. >> that's what -- trying to figure. you would buy it today or wait, you said, until the smoke clears? until it tests that number, the low from before? if you're really bullish on it it's 10% cheaper than it was yesterday. >> yeah. so this is what i would do. this is what i am doing. for clients where i hold it i've held it for years.

not adding to it. if fresh money comes in today, yeah. get started. can't necessarily worry in the short term where it goes, but i'm very comfortable. 110% comfortable. if you bought it today a year from now you'd feel great. of course, in the near term could go lower. that's always the risk. >> sure. also really bullish on micron. why? >> yeah. i like micron. micron and only two other companies. the south koreans dominate in high bandwidth memory and high bandwidth memory is absolutely a key building block tore a.i. infrastructure. they don't have the a quarterly announcement until end of september. i'm weary particularly ahead of buying company news. we've seen in the last couple weeks and months companies report good news on their quarter. report positive guidance and the stock still goes down. just a squirrely market right now, but i like micron very much

and those would probably be my two. nvidia and micron. key semiconductor plays. >> paul, i love that you are so decisive and so sure of what you're seeing here. really is a pleasure talking to you. thank you. >> oh, always my pleasure to be on the program. i love you guys. >> see you soon. it is just after 8:00 a.m. on the east coast and you are watching "squawk box" right here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. among today's top stories, kamala harris getting ready to unveil a $50,000 tax deduction proposal for start-up business expenses according to a campaign official who spoke to cnbc. up from the current expense deduction of $5,000. space-based internet company starlink will block the x social media platform in brazil. elon musk owns both businesses.

x earlier defied orders from br brazil's supreme court and defied paying fines. and u.s. steel will move its head equarters out of pittsburgh in the nippon steel deal falls through. nippon saying if the plan is collected, u.s. steel members majority u.s. citizens and spend about $1.7 billion investing in some of these mills that could be threatened to be closed. >> talking about it yesterday, andrew, and we'll have ro khanna on. an earlier piece. >> both agree. >> it should not be blocked. >> i agree, too. didn't watch what you guys said. >> admit. competition for the dumbest economic policy is fierce these days with price controls on food, 10% tariffs, national rent control -- go over the laundry list of things we talk about, but this wins the prize

according to "the journal." if it's cleveland cliffs, 100% of capacity in this country controlled by one company. union shops. why they're -- biden -- >> look at this. if the answer is that nippon is going to invest in the steel mills. by the way, i grew up right outside one of these steel mills and my dad worked it in one summer. my uncle worked there. if the answer is you're not going to have a steel mill anymore because nobody will invest in it, that's a bad thing. >> do we want people -- liesman sent me something yesterday. we need free-flowing capital. >> you need japan to buy stuff in thiscountry. >> and we need to buy stuff from over there. >> and the american division of nippon steel, based here in the united states. >> right. >> of course, that was -- >> this went both sides demagoguing for their own reasons and us poor schleps in

the public end up holding the bag for the political demagogue g demagoguery. bad times are coming. >> could be union related. i don't know. that's what it is. >> can you come together on this, there's hope for the world. the only comment. >> that's true. anyway, for the morning movers, start things off with a couple earnings stories this morning. start with dick's sporting goods down right now poun 51%. better than expected. dick's raised full year outlook but not by as much as some analysts ict ps predicted. down side move. next up dollar tree down roughly 11.5%. discount retailers missed expectations on profits and revenues and cut profit and sales forecast.

expecting a more conservative picture balance of the year. semiconductor stories not nvidia. intel. dow component swung to a pre-market loss from a gain. partly on a reuters story intel's contract chipmaking or foundry business suffered a setback after broadcom sent products that did not pass broadcom for larger production. the report noted intel said its most advanced platform remains on track for volume production next year and that broadcom hasn't concluded its evaluation. joe, the reason why intel and broadcom are in the news outside of nvidia. back to you. >> under 20 on intel now, dom. thank you. back to the volatility. latest volatility in the overall markets. joining us to talk about key technical levels, strategies founder and managing partner and

cnbc contributor. is this a completely separate event we're witnessing now from what we saw six weeks ago with the growth fears? feels we didn't get that totally behind us. >> i agree. start of the high volatility cycle for the market. vix spike aside, obviously major, seen volatility index lose downside momentum for some time. a meaningful shift. usually high volatility shifts last maybe 9, 12 months and think it will kacarry into earl 2025. with that a long-term neutral bias reflecting a range-bound environment. i think we're in store for a seasonal correction. that would suggest that that first pullback is a little bit of a foreshadowing of things to come. >> that the rebound we saw might not be long-lasting and might not be built on a solid foundation, which we're starting to test right now. so do you think we get below the, what do we call that?

what was that? what? six weeks ago? >> 5200 or so. right. sort of a volatile selling hemorrhage. >> and we're there? vix won't be highs, will it? >> no. vix tends to see the aftershocks. we are expecting aftershocks. >> on the vix or something jmplg. >> easily and see a relief rally. a bit of a gift for those it have haven't reduced exposure already. yesterday, downside leadership. a good opportunity reduce expense, just partially. >> so other people look as this. paul meeks on, it's a buying opportunity. you look at it as, upside was a selling opportunity? >> signs of upsetting exhaustion for nvidia and others. in fact having scanned the s&p 500 yesterday i felt large cap

technology was probably the best source of short opportunities. we feel like the rotation on the sector front is really meaningful as well. utilities, reits, health care, staples, now overweight. sectors in relative terms. doesn't mean they go up strong think from here but relative performance from the defensive sectors. probably a little bounce in yields but that should fail. very seasonal what we're seeing. >> tom lee yesterday sort of got, similar comments to some of the things -- he said 8% to 10%. you think more from s&p? >> around that aswell. the initial support around 5200 based on the lows. we think could go below 45,000 based on support and where indicators stand. still pretty overbought. right? with this relief rally still have an overbought condition to contend with and usually takes

several weeks to come out of that. i think the message is secular bullpen intact but cyclicals trading range might unfold and wait to add exposure. >> can you tell from the, the weakness is concentrated? where it's cobbsncentrated. is this growth fears or inflation fears? can you tell? >> i'll get back to market sentiment. driver of pretty much everything. right? sentiment had gotten pretty, i guess overly bullish or extremely greedy for the large cap tech space. they have tended to exhibit upside leadership and downside leadership. that so-called big rotation probably coined here that is real. it should benefit relative -- >> growth or inflation causing that? >> i would say growth. >> i mean, wasn't asking you for your opinion. saying if you can look at your

indicators to see whether it's an inflation fear or a slow down fear. >> also we watch the growth value ratios very closely. retracement was massive in that sort of ratio, or relationship, and we think it's something that will continue during a corrective phase. shouldn't be long lasting but the shift is meaningful out of the a.i. names or even seeing that in other sectors of the market. a.i. related names. >> gave me one more minute. >> yeah. >> talk about that. oil down below 70? >> yeah. taken out, in the past week or so bottom boundary of a long-term triangle formation. close this week, next week, a major breakdown for crude oil prices we weren't anticipating's long-term range, neutral, potentially now a breakdown. watching that very closely. it is over sold short term and has potential to bounce and avoid that but tenuous for crude

oils. >> and objective 60? >> yeah. low 60s. some minor support around 69, but i would say low 60s would be very -- >> back to the growth and it's all sort of pointing in the same direction. friday's an important jobs number. >> that's right. >> okay. thank you. >> of course. >> okay. coming up, a wipeout in chips. talk about it with a top analyst of bank of america. yesterday's rout on semiconductor. and congressperson rowe caan t -- ro khanna will be with us to talk capabout campaign 2024. we'll be right back. no.

welcome back to "squawk box." leading into asia tech stocks. samsung down more that 3%. the biggest loser, nvidia fell % yesterday and more on after hours bloomberg reporting the company received a subpoena from the government as part of an

antitrust investigation. joining us to talk all things chips, from bank of america, good morning to you. asked the question a lot of folks in the marketplace are asking. before we get to where the stock goes, do you think that this rumor was in the market earlier in the day? >> fworng, andrew. first up, commenting on anything bofa related is outside of my expertise. one or two factual comments. first of all, nvidia's products have consistently outperformed every industry benchmark. so it's a superior product. number two, all of nvidia stock customers are large, sophisticated companies. not only buy from nvidia. most, in fact, buy from amd also. many have internal chip product. google has been making the dpu the last eight years amazon making its own products the last five years. there is plenty of competition and finally, tension between

regulators and large cap tech is not uncommon. we have seen this consistently. so it's hard for me to say how this trends, but you may be right that perhaps there was some speculation put out there that perhaps impacted the trading yesterday. >> are you of the view that the government would have a fair case to be made against this company? >> so that's why i think this is outside of my area of expertise, but the key i think for the technology industry is that, how competitive is the environment? today the large hyperscalers have a choice of buying so many of them are at different stages of et issing up accelerated infrastructure. only 30, 35% spending is going into this. two-thirds still going into

areas where nvidia doesn't participate yet. in that one-third of spending nvidia has about 75%, 80% market share. amd is selling to most of these customers, broadcom and others making custom chips. start-ups making chips for these companies. so we think it's a fairly competitive environment and then the other point i mention, which is about large cap tech. look at most companies, large, successful technology companies whether in search or offering systems in ecommerce tend to have 75%, 80% market share. that's not abnormal for the industry. >> the question is, that might be in the software space. you think it should be in the hardware space as well? >> in semiconductors remember design cycles are longer. many software companies rely on

features that come out every 6 to 12 months. to design a semiconductor chip you have to start two or three years before'sgoes through stages of media design, through stages of manufacturing. then packaging. just look at the a.i. market. it has supply constraint in many markets. designing chips i argue, getting them owlut, i'm biaseds i argue harder endeavor. why when you look across the semiconductor industry companies that scale tend to dominate. intel is in tough shape now but still sell seven our ten gpus despite falling behind in the last ten years. matters tremendously in

semiconductors. >> leave it there. appreciate it. >> thank you. coming up, talking about it most of the morning. and yesterday, too. oil. why have prices fallen when worldwide tensions are up? we'll have that story when "squawk box" returns. growing your business is easy once you know the moves. with godaddy websites plus marketing, you can quickly create a website, and ai will customize it for you. get your business out there and get more customers in here. no sweat... for you anyway. create a beautiful website in minutes with godaddy. you'll find them in cities, towns and suburbs all across america. millions of americans who have medicare and medicaid but may be missing benefits they could really use. extra benefits they may be eligible to receive

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let's talk energy. oil and how it's been lower despite the tensions around the world. also seeing a report from bloomberg opec is looking at possible, a possible delay to output increases that had been planned for next month. as a result you saw wti trade back above $70. at $69 and change earlier this morning. right now sitting at $70.54. for this we bring in our own brian sullivan to chat about all of this. brian, anybody we were talking to last year was pretty certain

that oil prices, if they didn't charge higher, were going to stay pretty high. that has not played out. what do you think's happening here? >> well, i think what's happening, people got it wrong, becky. if you know exactly where oil is going i've got some beautiful beachfront land to sell you right around arizona. i mean, listen, this is oil. the only, or one of the only, truly global markets out there. there's a lot of oil in the world. china is not using as much oil as many people thought. i think the entire bull thesis becky you are rightly referring to is, how much more is china going to take coming out of covid is cobble years ago? the reality their economy in the doll drums, their demographic disaster, now second largest most populist country in the world and buildout of super cheap electric cars they're doing, china's demand has not gone up. factor that in with record u.s.

production, iraq, looking at you, iraq, cheating over quotas and slapped on the hand yesterday by opec. china slowly mentioned and libya. effectively not a civil war. not far off. had about 400,000 barrels a day off-line. expected to come back online and now you throw in these, will opec change its plans headlines, and you got this swirling mishmosh of oil right around $70. >> i mean, makes sense to hear from opec they're not going to increase production, when you watch oil prices fall. what level does opec have to see in order to feel comfortable, for them to be profitable? >> very profitable now. with all due respect to my good friends and colleagues that cover this unique little world that is opec, you've got duelling headlines out there. be clear. bloomberg's headline some delegates are talking delaying production hikes. what am i talking about?

under the current opec plan, can be confusing. just topline it. all cut about a five-plus million on paper cut. two million coming from saudi arabia, russia and more. the group planned to add those barrels back in to the market slowly. initially this year. then pushed it back to next year. so add, saudi arabia will add a million barrels a day of output between now and next december of 2025. so the headline that we're seeing is, are opec delegates considering either not doing those additional barrels or maybe a lesser version of those barrels? put that graphic back up. because i wanted to come on this morning and talk about this as well. what's amazing, guys, is that oil is at $70 a barrel. a couple bucks higher around the world. look what the world is facing right now. ukraine now actively striking into russia. mostly hitting oil production

targets. you've got china. did you see the video? ramming a filipino coast guard ship the other day. israel, gaza, sadly, still raging on. iran printing money. now enriched uranium to get close to making a nuclear weapon and houthis setting fire to a greek oil tanker. a lot of global risks. risks versus opec. oil at $70. by the way, u.s. gasoline demand is up. it is not down. i think the buy is probably is, becky, to the bull side. >> okay. brian, thank you. great to see you and we'll talk soon. this just in. hitting the wires -- news on department store nordstrom. the nordstrom family offering to buy the department store chain for $23 a share in cash. already at $22.50. off a little this morning. >> wow. >> bring you more on that in a mant. coming up breaking trade

data. interview with silicon valley area congress ran ro khanna. where this election is going. break it yall down. "squawk box" will be back.

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seconds away from an updated look the a the trade deficit. futures about, where we started the morning. down, but stabilizing. perhaps somewhat. steve liesman is standing by now with the numbers and then we'll have a conversation, after able to finish reporting the data, steve. >> yeah. joe, we're waiting on -- there it is. deficit coming in a little lighter than expected. scrolling across my screen. up 78.8 billion. looking for 79.1. so a little better than expected. the goods deficit 103 billion. service surplus 24 billion. let's see what else we got here. exports were 266. imports 343. 345 billion here and the china trade deficit, higher than expected at thes 30 billion. not sure why that is. i know imports from the u.s. have not been doing well there. oil imports at $75 a barrel.

leave it there except to say i don't know if you remember the report i did a couple weeks ago. this is the report that incorporates the comcast, our parent company's, payment to the u.s. olympic committee, which is a service import for the television rights. so you tend to get a 1 or 2% pop in imports of services every two years when we pay for the olympics. can't see that number right now. this is the month we have summer plich ib olympics and counts for. overall deficit higher and will tend to subject from gdp, but sometimes that's a good sign, because we're importing a lot of stuff here in the states. that could mean at least a view that the consumer's able to buy this stuff and remains resilient. >> that's pretty interesting. parent company involved in what happens with the trade deficit.

>> it's one of, like, two or three particular places where an individual company's action changes the macro data. >> yeah. >> i get it. >> there's thousands of employed at comcast. you've got -- takes a whole company to do what taylor swift does. you know? constantly. so -- you know, add hundreds of thousands together. she's the other person that you hear about. oh, yeah. well, of course, taylor swift. amazing. move on to a different story that you're following. concerns of what you're calling the fed's new magic number. what's going on? tell us about it. >> yeah. this is interesting, joe. compared to following the unemployment rate the fed increasingly following a new measure that comes from today's jobs report, 10:00 today, 10:00 a.m. how much a threat inflation may be and how to guide or adjust policy. the measure of vacancies to the unemploymented or vu, takes number of job opens from jolts

today at 10:00. divides it by number for work, unemployed report payroll number and british economist william beverage. scald father you of labor economics and new currency no you. ratio you can see has come down from two in 2022. meaning two jobs open for every unemployed person prompting employers to raise wages. it's now just 1.2. a major reason why fed chair jay powell expressed less concern about jobs causing inflation. more concern about a weakening labor market. you can see that right there. a new paper presented in jackson hole by researchers from burn and brown universities made a strong case for vu explaining a lot of what's happened during and after the pandemic. among them, explaining the inflation surge. researcher see mostly due to labor supply shortages. in fact, they show five of the past six inflation episodes

going back 111 years caused by labor shortages helping to explain the soft landing because inflation fell because the economy cooled by reducing vacancies, not jobs. the fed's new labor market concerns are also part of that reason. vacancies are down. unemployment ticking up. researchers are not sure where the magic number is. sorry. always that case. they say aiming for to a rate one job open for every unemployed worker is a place to start. higher risk of inflation. lower ratio means further declines in inflation come from real people losing real jobs not vacancies disappearing's think we're there now or close. joe, a reason why fed governor chris waller, endnded up being right in his prediction. high inflation, olivia, ended up

being wrong. >> what's the number for friday and what -- where is your anxiety surrounding that number? >> so the number's 160. i have seen estimates lower in the 140 range. i do think the overall consensus is that the number op friday offsets this huge weakness we were so worried about in july. again, a nice piece of "the journal" talking be a the role of immigration and immigrants in the u.s. population in the lab lalabor force makes it hard to know. an entrance of immigrants into the workforce. didn't find jobs right away, and they get jobs say in the next month or thereafter, because it takes time. goldman sachs did a nice piece about the rising participation rate of immigrants in the

economy. they begin with, say, a 50% and then it rises over time. the question becomes, joe, the underlying strength of the economy and the ability to put these new workers to work, assuming there's work for them, kind of gets to the reason for maybe why they're coming. which is that apparently there are jobs here or maybe -- maybe they've come in at a time of weakness and we'll see. but something that's very difficult to gauge. the other thing out there, joe, is that the unemployment rate's supposed to tick down to 4.2%. i don't think a strong jobs number up to a point would stay the fed's half of cutting in september. >> could it be 250? could it be 85? could it be either one of those, or is that too -- we don't have that type of standard deviation? >> oh, absolutely we do. joe, throw up my hands to show you that the idea of predicting the jobs number in this

postpandemic economy has been, you know, difficult to say the least. there's been a lot of things going on that have been different and interesting -- >> instead of feeling better about the july number could it confirm the july number? >> sure. absolutely. although i will say, joe, the jobless claims number on a weekly basis have not confirmed it. when that big revision came out i went back and looked to see. can the jobless claims be going along fine whistling past the graveyard while the economy is deteriorating? it doesn't. in general a big deterioration of the job market you also have a contemporaneous deterioration in jobless claims. joe, you pointed to the fact there's a huge variance and a huge amount of -- of change and revision economics to a number, but we don't look at things in isolation. if the thing -- if the whole

economy is deteriorating we have multiple poll measures to pick that up. jobs in july were an outlier. i don't believe it's going to be confirmed again in august, but we'll see. >> all right, steve, thank you. joining us now for more on the economy and also the details that are trickling out of the harris and trump campaigns an candidates' economic plans is joe lavorgna. chief economist at nikko american and a national chief economist. joe, start with what you think for this friday jobs number and what you think the fed may or may not do? >> definitely 25. guess is 50. if it's 250, joe mentioned, i don't think they're going 50. but even anything maybe even around consensus could get them to move. because the labor market tends to be lagging indicator. jobless claims are low, but their rescipientsy rate is low.

people aren't filing claims. cautious they're giving the right message. fact the rate is up 90 basis points from its cyclical low is important. always had recession when that's happened. yes, employment has been positive, but noticed in the past, back almost every cycle except one. unemployment starts to go up people entering the workforce because of stress and that generally precipitates broader weakness. negative on the economy. i think weak for a while. i think the numbers have been overstating things. >> we spoke with one guest earlier this morning. trying to remember who it was, said if they cut 50 base points it could be a bad signal for the market. >> i don't believe that. look, fed told us the equilibrium rate, even the range, 250 to 4. even high end where you think rates should be, in a neutral setting, it's way above where rates are now. 5.25 to 5.5.

rates need to go lower? why waste time. get there sooner. >> is there any sort of politics that play into this at this point? one campaign or the other thinking, oh, they're getting hurt by this? >> one thing to jay powell's credit. the fed did market easing last december and then all of a sudden data moved against them. i've also argued for a while the fed should be cutting rates because the yield curve is massively inverted. inflation expectations have been low. the economy's not that strong. so, yes. there could be a political argument that's made. i don't think it's that strong at the moment. >> takes a while for a fed cut rate to -- >> yeah. the fed pivoted quickly from we're going to go to one cut this year in june and all of a sudden in july thinking of cutting at that meeting. shows you how hard to look at data and make predictions. communication-wise could have done a better job. >> not a lot of things the two campaigns agree on but both

candidates have come out saying they're not innive ifavor of th purchase of u.s. steel by a japanese company. where do you come down on this? >> i understand -- that's certainly political considerations there. i guess i would say that -- yeah. leave it at that. i don't want to dogo into detai. we can figure out why the campaigns are doing that. >> meaning you don'ts think it's a good idea? >> i didn't say that. look, economics is great. but economics used to be political economy and often be we're about equivalence free trade and not really sure how the other side is behaving. i've always said to em poo, ricardo tells you doesn't matter if you have comparative data of computer chips. rather be the country producing computer chips than potato chips. sounds like an economist. depends. on that issue of steel i think that's a contentious issue and

not going to answer that. >> you don't want people mad at you. >> don't want them mad at me and the half of the world that doesn't agree with my politics hate me and i need to be persuasive and objective's that's where i want to be. >> on that note, what do you think of other ideas? >> raising capital gains rate and a wealth tax, poor economics. economy's weak. the last thing you want to do is even talk about a wealth tax. you would have a massive firesale of assets across the board and big price discovery for those it assets that been necessarily liquid like real estate. very poor policy. i think most economists would agree with me on that. >> if capital gains goes up to 44%, what do you think the reaction in the market will be? >> much less capital formation, becky. you're taxing something to that extent. highest capital gains rates ever had, certainly capital formations, productivity growth, capital investment, it's just, to me, just, again, kind of

become -- soak the rich a little bit. i don't think that's very good economic policy. >> can you make pa up for it with what the harris campaign floated today, i guess? this idea that we're going to give $50,000 in tax deductions for start-ups instead of standard $5,000 you get now? >> for, what? for business, start-up business? look, right now equity market's doing pretty well. i don't think it's going to necessarily last. raise capital chiefly. i don't think the government needs to come in and start to dictate what you should give money to bethe market's efficient. raises capital easily. i don't understand why we need another agency to give money forward. doesn't make sense to me. >> funny. small businesses we like. just the big, greedy -- >> small businesses hiring intentions down, uncertainty highest in all time. >> private sector is important. not so important -- >> what's big obviously by

definition was small. >> small ones. celebrate all of them. i don't think size should be an issue. >> really? >> i don't know that, joe. >> joe, thank you. >> i understand your perspective. >> thanking this joe. coming up, california congressman ro khanna with us to talk about the emerging economic plans for vice president harris. and taxing unrealized gains and so much more including missince. you're watching "squawk box" on cnbc.

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we spend time talking about the idea of taxing investors on unrealized gains. our next guest is looking at something we've also talked about quite a bit on this program. andrew talking about it for years. bill ackman recently talked about it with jay clayton i think yesterday or the day before. taxing loans related to the gains instead of trying to do it in, really, a way that's probably not even possible to do, but democratic congressman

ro khanna of california, 17th district, located in the heart of silicon valley, and anybody that doesn't realize that that is a goose that lays golden eggs constantly for this country is joining us today. i'm going to forget the harris-walz campaign. forget that and -- joe-ro. >> no, no. ro-joe. >> i want to take credit. you pointed it out to me, unsolicited i think last week. what about this idea? and it has -- we've talked about it. it bears, i think, some consideration, in a conversation. i immediately hear from other conservatives we don't need to raise taxes no matter what, but there are founders of companies that start with nothing. they have $5 billion. they die, and they pass it on to

heirs. >> using it never been taxed ev. and borrowing against it. and the idea, you came up with -- why not do kamala's idea? why not do the elizabeth warren or that one? >> let me tell you why i don't think a blanket tax in unrealizedals gains is a good thing. say you're an entrepreneur, create a company. gets to $100 million or $200 million on paper. after taxing that you're probably going to force that person to sell it. probably going to sell it to private equity. do you really want the entrepreneurs to be forced to sell their companies to larger institutions and to decline in value? i don't think that that's what you want for a start-up. >> consequences? . jeff bezos wouldn't have to do that. they're going after these -- these very, i think the whole policy is demagoguing to go after these people that they say pay less of a tax rate than

their maid does and have billions of dollars. >> i get why. but this is not the right way to do it and also 95% of investments in start-ups fail. you're going to disincentivize investments in those start-ups. what i think we can go after. you folks, okay, they start to have capital appreciation, and then, instead of realizing that, they take out a loan, which i call back-door realization, to fund their entire lifestyle. they never pay tax on that. when they die, they pass that money on to their heirs and their kids never pay tax on that. >> let me ask. two questions. first of all, to make this work in practice, you have to have the step-up in basis. >> yes. >> at death. otherwise, the entire effort doesn't really work, because you need to change the incentive structure for why people would want to take these loans to begin with. >> totally agree. >> there's a second piece to this, and i was on the phone with an entrepreneur in the valley who i think everyone

knows yesterday about this who said, look, i understand what you're trying to do, andrew, but if you do this, this way, it's going to disincentivize additional investment by entrepreneurs into either investing in their own companies or investing in other companies, so one of the things that a whole bunch of people who have made a lot of money do is not only take out loans to fund their lifestyle, if you will, but nthey also take out the mony to then make investments in other start-ups, in venture capital firms. by the way, venture capitalists and private equity folks are often taking loans against their own firms to look like they have carry in their funds. so, their actual carry in their own funds is coming from a loan that they're getting from the fund. and so, all of these folks are calling up everybody, including, by the way, the harris team, as well, because they're aware of this, because people are calling

and saying, if you do it this way, you're going to be disincentivizing investments in small businesses, to bring it all back to today's conversation that harris has now proposed. what do you say to all the pushback on that front? >> on your first point, it's absolutely correct on the step up the basis. the kids should have to pay the capital appreciation tax. the second point, look, the easiest way is to tax luxury items and luxury items as -- if you're going on luxury things and hotels and planes, luxury purchases, that should be taxed. >> what's the line on luxury, then? >> what if you're somebody who's paying ordinary income? >> we can figure that out. but on the loans, there's always going to be some disincentive or negative effect, but i don't think -- i think that is outweighed by the fairness of people having to pay a tax which is largely being -- >> if you're using this as cash,

you should be taxed on that. you know? if you're using what you have gotten as cash, if it's just sitting there, and going along or it's in a family farm or something along those lines or in a company that you founded and you're not using it, that's one thing. if you are actually going to use it as cash, to borrow against it for whatever reason, it's the same as cash. it should be taxed. >> it's realizing it just in a different way. >> what are your constituents saying? what do all the venture capitalists call and say on this issue? >> they're blanket opposed to the unrealized taxation. theye open-minded to something like a tax on loans or even luxury items. >> what about stepped-up basis? who defends that? >> they're also open to that. which are three things you could do to raise a lot of revenue. here's the animating spirit, which is that folks who are doing a job as a teacher or as a janitor shouldn't be paying 25, 30% tax and multimillionaires

paying zero. >>ier where are you on carried interest? >> i think carried interest should be taxed. >> where are you on capital gains going to 40%? >> i think capital gains should be lower, the current state that it's in. now, the issue about over a certain amount, if you want to have capital gains move towards ordinary income, that's an open conversation. but even that makes a lot more sense as long as it's realized. but taxing the unrealized portion southbouisn't going to that much more revenue, and there are other ways to do it. >> i'm going to get really complicated. unrealized gains that are donated to charity. that will never be realized by anybody ever. >> okay. >> how do you feel about that? so, if you are warren buffett, bill gates, name your person, you give unrealized stock, never been taxed, ever, ever, it gets sent to said charity, we decide whether we like certain

charities or not. it gets sold immediately by the charity for cash. >> i think they should be taxed on it. >> you do or you don't? >> i'm all for charitable giving but we have a democracy, and the reason we have a democracy is all of us get a say in how money is spent, and that shouldn't just be that bill gates and warren buffett get to decide what their pet causes are. if they're going to have unrealized gains that are actually used by a charity, that's a point of realization. >> the philanthropic lobby is going to call you now. >> i'm sure they will. >> it's weird, this limit above, where the -- >> i think you could say above a million dollars or something. if you're having ordinary folks give money, that's different, but the big issue here is, we've gone in income inequality from 53 in the 1980s to 128 today. my district is $12 trillion of value. nvidia, apple, google. you got more billionaires and multimillionaires, and folks are saying, you have all this

concentration of wealth. at least they should be paying some tax, and i think that's a reasonable sentiment and a correct sentiment, but we've got to figure out the right way to do it. >> if you're using it cash, i think it should be taxed too, but what happens with both candidates saying they think you should not be taxed for tips? how is that fair to the teacher who doesn't get any of their income in tips? >> well, look, the biggest thing we ought to do on the tips is make sure you have a living wage. >> i don't know. should they tip -- >> i support not taxing tips. >> why? that is ridiculous. somebody who's a teacher, a fireman, they don't get -- >> because some of these folks are still making $2.13. >> not in your state. >> not in my state. >> and by the way, if you're paying $2.13, that's because the rest of your income is coming in tips. >> if you're a surrogate, do you think your candidate ought to take questions that aren't in a teleprompter? >> i think both candidates

should. >> he's been on constantly. he's been on too much. might be a problem. she hasn't done anything, and it's obvious to everyone. and if you're a surrogate, you need to tell them to get off whatever it's called. >> i'll tell her to do the show. look, i think she's competent, she's capable. >> show it, then, without a teleprompter. >> okay. >> thank you, ro. >> i waited for the end. thank you, joe.

we got a lot more coming up tomorrow. make sure to join us. "squawk on the street" begins right now. ♪ good wednesday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer at post nine of the new york stock exchange. david faber has the morning off. stocks do look to add to tuesday's losses, worst day for the nasdaq since july, second worst day of the year. nvidia's down another percent. the two-year yield at a 16-month low. our road map begins with this tech-fueled selloff. s&p clocks its worst day since early august but there are areas of opportunity, some say, to buy the dip. nvidia is under pressure again after the biggest one-day market cap wipeout for any u.s. stock in