week. house speaker mike johnson presented a funding bill to avert a shutdown. it's monday, september 23th, 2024 and "squawk box" begins right now. ♪ good morning, everybody. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. let's take a look at the u.s. equity futures at this hour. right now, a little bit of a mixed picture. s&p indicated up by 5 points. the nasdaq indicated up a bit more. this comes as stocks closed higher last week. the s&p was up by 1.4% and you

had the nasdaq up 1.5%. nasdaq was up for the second week in a row and the s&p 500 and dow up five of six weeks. it has been quite a run that we have seen. if you are taking a look at the treasury market, it looks 3.74. the ten-year yield has moved up substantially since we heard from the fed last week right at 3.6%. let's get you caught up on this week's squawk planner. a few data points. wednesday, we get new home sales for august. on thursday, jobless claims and august durable goods and latest read on gdp. on friday, personal income and spending which includes the fed's favorite inflation gauge which is core pce. on the earnings calendar, kb homes and micron and costco.

this saga is something we talk about every few months. house speaker mike johnson revealing a new temporary funding proposal to fund the government through december 20th in this case. it includes, this is new, $231 million for the secret service in response to pressure from the agency for more resources after a second assassination attempt on former president trump last sunday. it doesn't include any of that save act trump-backed security proposal in the bill that was defeated to show proof of citizenship to vote. lawmakers have until 12:01 on october 1st to reach a deal to avert a shutdown. in a letter to colleagues yesterday, speaker johnson said since we fell a bit short and the alternative line, this is

plan b that he said didn't exist when we had him on last week. that's the way they do things. they don't admit to possibility of defeat until it happens. chuck schumer said this is good news and a shutdown would likely be avoided. >> the question is what happens to speaker johnson in this position. this is what has driven out previous speakers like kevin mccarthy. >> we will see what happens and what makeup the house has. >> some reporting that jim jordan was firming things up this case he goes for a run. >> i think he will wait for the election to see the numbers. actually be a republican speaker. no one knows at this point. in the meantime, fcc chair lina khan, i'm curious if she

stays in here job. when she was asked if the power she and her agency could destabilize the whole economy. >> of course, we have to worry. we also should worry about the destabilizing effect that can arise from companies believing they're above the law and they can b can be reckless and crash the economy and get away with the slap on the wrist. >> to the point about jobs and mike johnson and where everybody's going to be in a couple of months. she was asked if she would be willing to stay in the job under a new administration. khan said it would be an honor to have the ability to keep going. harris has been uncommittal for obvious reasons. >> she sees eye to eye with jd vance on a lot of things. >> either administration. >> i think it's unlikely for

either. >> i don't think either administration will keep her, to be honest. it could be either or both. >> i think it is very -- 90% chance that neither. >> yes. i like that. what was she talking about taking risks and that can bring down the economy? >> everything is a tradeoff in life. >> back to 2008 and i might be destabilizing the economy, but the companies taking the risk. they can take it down, too. >> the argument around competition is when you see whether it's a crowdstrike situation or 2008 or all prices go up in some crazy ways. some of that does have to do with not enough competition. >> they consistently go after -- they define a marketplace based on the 20th century. they talk about groceries and they don't bring in amazon and walmart. you know, they're whole view of the world is so anacronistic.

i think it's bad for progress, i do. i can't believe lesley shtahl asked that question. i think it's probably a headwind the way she runs that agency. >> i think it's a headwind right now. i agree. in the meantime, two large chip makers discussed building factories in the united arab emirates according to a report that taiwan semiconductor visited the uae to talk about building a large facility there. samsung has also visited the country and talked about building there. they had conversations about shipments of advanced a.i. chips to china and construction of f factories will not start until

those issues are resolved. >> that is interesting. >> a way to get around -- >> it takes a lot of power. let's go to where the oil is. then again, it takes a lot of clean water. it's all de-salinated water. >> this is more of the uae and moves in saudi arabia and other place wheres where they are looo the next situation in saudi arabia. uae wants to be a power source. >> they have all of the money from the sovereign wealth. they have all of the oil money they have to diversify into. since they're so close to china, we're going to let that happen. until these concerns between the u.s. and china are resolved? taiwan will be gone by then. >> it will take a while. let's tell you what is going on with elon musk and x. the lawyers say x has taken down

accounts and paid fines and named a new formal representative in the country. this is a vreversal and elon muk called illegal censorship orders. we will watch what happens there. in the meantime, the s.e.c. is looking to sanction elon musk after the deposition over the twitter acquisition. looking if he committed securities fraud as he sold shares in tesla. musk has failed to appear before the commission twice now. cancelling the deposition on september 10th without notice. further action by the court would be appropriate. the attorney said musk and his companies are cooperating with the s.e.c. with the multiple investigations. coming up, we have companies

circling around intel for a huge acquisition. biggest ever, maybe, in tech? how big was aol-time warner? >> 88 something. >> the market cap right now is 93. i don't know what you have to pay. reports sacy qualcomm has floatd an offer. in the 8:00 hour, don't miss our conversation with minneapolis fed president neel kashkari. "squawk box" is coming right back.

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some news about intel. it started on friday and also over the weekend, we found out apollo global is making a multibillion dollar investment in the company according to journal. including qualcomm offering a f friendly takeover of intel. we have our latest guest here with us. anything related to qualcomm approach? how do you think this plays outs w out with intel down at $22 a share? it was over $200 billion at one point. chris. >> one of the reasons we're talking about this is qualcomm's

market cap is twice of intel's today. you know, clearly, the biggest impediment to anyone doing something of acquisition of intel is regulatory approval. particularly of qualcomm and intel deal would be difficult to get by china and both companies have a lot of business this china. reaction to investors i spoke about was skeptical along those lines. apollo is different because apollo has made a fab in ireland with the joint venture. that is more plausible and really along the lines of just reducing the amount of cap ex that intel needs to put out. the qualcomm deal is tough to understand the strategic rationale and how they get past regulatory approval. >> what do you think the future for intel, you know, with the --

the chips act in mind and some government assistance there? once again, i don't know if the government knows how to pick the right companies to do things. there are quite a few tax breaks involved that are going to intel. >> right. you know, our view of the chips act is it did help to level the playing field if you were going to put a see miconductor fab in the united states. with regard to intel itself, the issue we think the company faces and the reason we are talking about all this right now is the market shifted from what pat gelsinger got there a couple of years ago. intel missed a.i. the core server business and pc business is no longer big new to support advanced hfmanufacturin.

that's why pat is opening the business to tsmc. with the stock and what you see o overtures from other companies is a different path here. our own view in terms of a path forward, we think something involving tsmc makes a lot of sense because tsmc already has a foundry business and needs to diversify outside of taiwan and to the u.s. intel uses tsmc in their chips right now. something like that provides a more certain path forward as opposed to what it is today which is we are going to build a foundry business and it will take a long time and getting back to intel's plan, get back to what used to be acceptable levels of profitability which happened in the latter part of

the decade. >> what do you make of the news of abu dhabi or taiwan or samsung and what needs to happen with the u.s. and china for us to feel comfortable trying to diversify out of taiwan. is uae the right place? >> obviously, if our building facilities and some in the uae attraction there is probably give me money to do that. what we're seeing in semiconductors right now is a race. we woulant the chips on our soi and provide subsidies. >> chris, we're having a debate over steel in the united states. the question is if we are not allowing a japanese company to own our steel companies, why are we doing it this way unless you think there is no other alternative? >> there is. obviously, uae is one place.

the fact of the matter is plane ty there are planenty of places to put semiconductors. i think from the industry standpoint, the goal for tsmc and customers is they have to get capacity outside of taiwan to just avoid that concentrated risk. l as long as the industry standpoint and politics aside, long it is friendly and stable, sing singapore, u.s., europe, that hits the policy goals. >> talking about lina khan, let's say the regulatory issues aside, what kind of a premium would be there? any premium to buy intel? >> you know, i think right now,

my and obviously, i haven't spoken to the company about this. they don't speak to me about it. i don't think that's where their head is right now with perhaps any premium that they seem pretty stuck to their goals right now. but, yeah, they probably have to be some substantial premium going forward. i will say investors right now, i don't think are fully on board with management's plan. the stock price indicates that. i think the investors that we're speaking to right now are looking for something different. something a little more secure. something where i don't have to wait three years to see if this fo foundry business comes about. intel's pc business is under attack from arm. right now, with qualcomm, you can buy a windows pc with

qualcomm silicon on it today and much in the same way apple doesn't use intel silicon anymore. that is the concern with the intel path forward. what happens if something happens to their core market over the next three years while they're doing this? arm has said they seek to get 50% of the pc market over the next three years. i don't think that's likely. i think that's a pretty aggressive goal. if it were to happen, it just makes it all the more difficult for intel to execute on their strategy. i think that's what investors are thinking right now. >> all right. chris, thanks. i like the logo. no one thought of the wolfe of wall street? different companies. >> dwiifferent companies. >> that was not a great company, i don't think. you were there before that happened, i guess, right? >> i've been at wolfe about a year. i don't think there was any wolfe of wall street.

>> okay. all right. different company. thanks. see you later. all right. when we come back, third time's a charm. johnson & johnson's talc unit attempting to settle the lawsuits in the bankruptcy. this is the third strategy known as the texas two-step. we have the details next. "squawk box" will be right back. hispanics have made a great contribution to this country. i'm not talk just about low-skilled workers, but sue.-skilled workers and c-it i urge americans to understand the hispanic americans with the history and experiences have given them skills they can use in business. ah, this one lets me adjust the bass. add more guitar. maybe some drums. wow, so many choices. yeah. like schwab. i can get full-service wealth management, advice, invest on my own, and trade on thinkorswim. you know carl is the only frontman you need...

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johnson & johnson has filed a third bankruptcy case to settle the mass lawsuits linking the talc to cancer. it's known as the texas two-step. they move the law into the affiliates designed to file for chapter 11. it could resolve in bankruptcy court without jeopardizing the valuable business assets. a settlement like that would cover all claimants and those who acquire cancer in the future. the strategy is expected to face challenges. the last time it was deemed too

healthy to qualify for bankruptcy protection. this case was filed in texas. >> you know how long this has been. >> it has been going on for years. >> years. i do use a lot of baby powder. that's tmi. all the way back when englewood cliffs and i talked to faber. never. >> it's at least 15 years ago. >> i was using corn starch back then. i wouldn't go near anything with talc in it because of the chemical structure. that's when johnson & johnson had said. >> the numbers they were ratcheting up $6 billion and then $8 billion. the story in bloomberg.

>> your agl stuff. baby powder takes care of everything. gravity, fat, folds, sweat. >> really? >> it dries up everything. put it all over. that's not something -- >> nope. >> you could get rid of all that other stuff. >> that brings up a lot of images. >> get rid of all -- the bathroom floor, i get in a lot of trouble. >> i'm talking to you. >> yup. we got more coming up in just a moment on squawk. meeting with the prime minister of india. as we head to break, check out the price of bitcoin now up at 63,500 bucks. okay, team!

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good morning, everybody. welcome back to "squawk box." we're live in nasdaq market time square. the dow is down 8 points. the nasdaq is up 42. we are coming off a strong week for the three averages. meantime, the india prime minister modi meeting with the top tech executives. our own steve kovach was there. he joins us with some of the highlights. good morning, sir. >> good morning. like you said, prime minister narendra modi meeting with several tech ceos on monday ahead of the u.n. general assembly going on this week. among those was jensen huang and sundar pichai and julie sweet. you see tech companies from apple to google see india as a

prime area with the large work force. i was able to catch up with huang and krishna. huang praising modi for understanding the importance of a.i. >> prime minister modi is inspiring. every time i've seen him, he is such an incredible student. he loves technology. he loves artificial intelligence. he was one of the first people i ever explained artificial intelligence to. this is an extraordinary time for him and time for india because it's a reset of the whole computing stack. >> i asked if he discussed with modi clearing up the bureaucratic red tape that some companies often complain about investing in india. take a listen. >> i haven't experienced that. nvidia has been in india for 25 years. our centers are in bangalore.

some almost 10,000 nvidia engineers are in india. they do every aspect of engineering. they have been part of our company since the very, very beginning. >> another company with a presence in indivisibla is ibm. krishna talked about the business in india. take a listen to what he said there. >> companies are going to do what benefits each country. you have to put those things a little bit to the side and say is it any national security threat? if you look at the geopolitical lens, cooperation with india and the u.s. is going to be strengthening both these nations to the point where then you can take care of all of the other secondary issues. >> krishna told seema mody that

he is committed to investing $20 million in india. of course, because pharmacy ceos of eli lilly were there, discussions were held on bio-tech and protections for u.s. companies operating in india. just as a kicker, i asked huang about the intel merger on friday. here's what he told me about that. >> we're doing it our way, as you know. nvidia builds the full stack of infrastructure. we build everything from chips to the stack to the cpus and switches. we write an enormous amount of software from algorithms and software and systems. we are continuing to move

forward. >> i think the implication there is they control what huang called full stoack. the software and hardware part. >> steve, going to that last point about the deal, do you see the u.s. government and do you see -- is this a good deal? in some ways -- if you get competition to nvidia, that would be a good thing. 80% margin is great for nvidia and jensen. long long-term, if you want a.i. to have true economics, that will have to be sliced in half, it not more so. the only way that will happen is competition. the question is do you want competition by a company owned by taiwan or our allies or somebody in the u.s.? >> april ndrew, i was looking a from the pc side. this summer, qualcomm put out

the first pc chips that are good. on par with what you special. based on the same technology with those. intel is behind on that. that's why apple ditched intel. that's the way qualcomm can expand the pc footprint more than the a.i. we don't know where it is. qualcomm is not necessarily producing the chips. it is a mobile first company. >> this is like a back doorway of getting chips act money. what could possibly happen? i can't imagine people in washington are happy with this. sure, no problem. we'll change the name on the check we're writing. it's taxpayer dollars. >> the chips act money is a bet on the part of the business that intel hasn't proven it can do. the making of the chips. >> the idea to say we're doing this for an american company and

american tax dollars and yyou promised this and some other company is taking it over for this. still, it seems like this is the problem with governments really getting involved in picking winners on this stuff. you lose access. >> we know that the current regul regulation doesn't like these deals. i know you were talking about lina khan earlier. she likes to see the companies drive on their own and go public. i can see that argument made. it is preliminary. >> i can understand if you want to put a $5 billion investment in it, that would be like a big deal like a warren buffett thing where you get warrants alongside. to come in and take over and do it? >> and accept that money and all the strings that come along with it.unproven.

it's a weird time for intel. >> it shows how long and slow this process is. >> a $200 billion market cap on intel. >> steve, thank you. when we come back, more on "squawk box." more on lenovo and how to help you make new friends. reminder, get the best of "squawk box" and get the best of squawk pod on your favorite podcast app. we'll be back after this.

welcome back to "squawk box." entrepreneur andy dunn is the lead of bonobo and now making new friends called pie. it is backed by twitter co-

founder. we have andy dunn with us. appe andy, it's great to see you. tell us about this new business. i know some adults want new friends and other adults don't want new friends. >> we are for people at a life inflexion point. new to a new city. new to a new job. friends having babies. that was my experience. i was a new dad, new to a city. moved from new york to chicago and surprised how lonely i was. i had the great familial love bonds, but not platonic love. i thought pie would be a way to go to make it easier to make friends. >> how should we think about this in relation to social media

sites and how maybe compare to a dating site? >> yeah, look, the surgeon general has said over the last 20 years, we have lost 24 hours a month in time with other people. by the way, 20 years ago, we were already talking about the degradation of the american social fabric. our belief is we have to put two-to-three hour hangouts to reverse the trends of the last 20 years and social media made the challenges more difficult. we call it social media, but if you think about it, it's anti-social. the goal of pie is to you do you get people digitally addicted to getting off the phones and in person and real life to meet new people and make friends. >> andy, this is not specifically designed for neuro diverse people, but is it -- is it suitable -- could it be used -- do you know what i'm talking about?

it's a major deal for people that might be on the spectrum or whatever and there are other web sites that sort of help with that. is this just for totally mainstream people or neuro diverse people involved? >> i think we all have mental health or times where we experience a melntal health crisis. to the question we're focused on is the issue of social isolation. social isolation is something we can't medicate through pathways. our belief is we had to build a consumer app to change the zeitgeist. >> andy, how does this -- walk us through the mechanics of it and the distention of how it

actually works in meeting somebody new and the day-to-day of it looks like relative to maybe some of the other sites we're familiar with. >> the new science of platonic says there are two origins. seeing someone five-to-seven times in the setting and on the journey, mutual disclosure. in pie, we seek to rather get you out once, we want to get you out again and again in a recurring way. we have free events on the app organized by in-person influencers where you can go again and again and meet people. it isn't until you have seen someone three or four teamimes t you fork out for it. >> what's the business model? >> so, eventually, we see three

pat pathways. one is enterprise and one is venues and consumer or subscription. the enterprise i want to talk about. according to dr. vivek, employers have lost billions to social isolation. we have a pilot in chicago with the global strategy consulting firm to stimulate more friendships in the workplace. it turns out the number one predictor of happiness at work is having one platonic friend. >> andy, the way employers could do that is a come back to the office. the social isolation is because people are not in the office and young people have a hard time with that because that's how most of us made friends when we were coming up through the ranks. >> totally. that's how we came up. at pie, we have ten people. we were lucky to do it that way because we were building pie

from the ground up. what if you are a ceo and building a mandate of come back for three days or four days or five days? what if you make that where somebody is pulled instead of pushed? let's create more social collision inside of work and outside of work at the free events which is where friendships are formed. i don't want to go there because i have to, but my friends are there. >> that's like wow. >> yeah, no, i think the idea isn't we're going to pay you to come in, but we're going to make it easier for you to have some social collision at the office. now things to do outside because as you remember and i remember from coming up, the friendships began at work, but it is outside of the workplace where they are deepened and bonds are forged and get to the level of mutual

disclosure to deepen the relationship. >> andy dunn, we appreciate it. by the way, i'm still wearing my bonobo socks. great to see you. >> i love it. great. coming up, gm temporarily laying off workers in kansas to make the volt. later, don't miss our interview with minneapolis fed president neel kashkari. "squawk box" will be right back. e*trade from morgan stanley with powerful, easy-to-use tools, power e*trade makes complex trading easier. react to fast-moving markets with dynamic charting and a futures ladder that lets you place, flatten, or reverse orders so you won't miss an opportunity. e*trade from morgan stanley tamra, izzy and emma... no one puts more love into logistics than these three. you need them. they need a retirement plan.

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general motors is temporarily laying off two-thirds of its workers at a

fairfax assembly plant in kansas. it sounds like what we've been saying about evs, but it is not because of a lack of demand for evs. they're retooling it, supposedly, to make more of the bolt ev, to make production of the chevy bolt. is that -- there's the bolt and volt. which is the ones you can't park near your house? >> i forget. >> especially if you have like a wooden house. it is like-- >> yeah, don't park it in the garage, they said. they said, not us, right? >> i know. was it the volt or bolt? they're both electric. it will layoff workers there until production resumes in mid 2025. >> that's the weirdest story. you get laid off but we will bring you back at 2025. >> and it is to retool. it is not like we're not building them because there's no demand. >> i'm sure it is to meet union specifications. we're not actually firing everybody, you can come back, but who will not have another

job then? >> they're not making bolt evs until the middle of 2025. >> it is the bolt, by the way. don't parkin doors. >> it was the bolt? >> the bolt, not the volt. >> not a big deal. >> google can help. >> don't park it in your garage. it is a reason to leave it out. you may not have a garage, you may have a carport. maybe shouldn't park it there. or maybe near a big tree. when we come back we will talk about the challenges ahead for incoming nike ceo elliot hill. that's next. at the top of the hour, a look at the new proposal that would avert a government shutdown. we will take you live to washington, d.c. "squawk box" will be right back.

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welcome back, everybody. nike's new ceo elliot hill is set to replace john donna hoe in less than a month. hill is tasked with restoring order to the sports eye peril giant after a tumultuous few years. joining us is peter atwater, a behavioral economist at william & mary. he's author of "the confidence map." first up, peter, why don't you lay up what happened here. donn donahoe came in and was tasked with finding a way to bridge the gap to consumer. he did it well and it was timed perfectly with covid when people were not out and about, since then it has been a different story. >> yes, what he delivered for 2021 was perfect. direct to consumer, you know, grab it and go to put it in starbucks terms. the challenge now is that the

client is demanding, you know, omni channel. it needs to be both an experience brand as well as, you know, a deliver it sort of home depot brand. i think its challenges are similar to what we are seeing at starbucks, and i don't think organizations can be all things to all people. i also think it is quite interesting that here we are in a golden era of sports and you have both nike and under armour replacing their ceos because they're unable to deliver despite what should be a huge tailwind to athletic wear and to sports overall. and i think he faces a third challenge, which is while he may have the ceo title, what is clear at nike, like at so many other organizations, is that power rests elsewhere. and whether it is mark parker or phil knight, he is going to be

subordinate. >> peter, i am just going to push back on that a little bit. i think it is one of those examples, is it not, where there was a failure unfortunately at the top of this company. you can look at the stock price. you can see what happened with the business. you could talk to people in the business, around the business at nike, and the critique was real and demonstrable. shareholders were unhappy. i think there was a real potential for activist shareholders to attempt to approach the company and do other things, and they decided to make a move. i'm not sure this is some kind of howard schultz situation. >> so -- >> there were failures at the top. >> yeah, i don't disagree that there's been failure. you know, donaho was the right guide for acceleration. he is not the right guy in a troubled environment. as an outside consultant-- >> but didn't he create the

troubled environment part? that's the conundrum here. >> i think he contributed to it. consults have no good rep with the rank and file. they're constantly making change, and to me he was the wrong guy post-2021. but i don't think that bringing back a long-time veteran is necessarily nike's solution. you can't go backwards to restore the past at the same time you are trying to be innovative for the future. >> i don't know. he may be just the person. i look at things a little differently. if i look at this situation, it seems like this is kind of what they need. they -- the pendulum swung too far with going direct to consumer. they need to get back to basics. they have the direct to consumer, can hold that, but they need to improve what they were doing with their partners. i look at him as having an easier task than if you look at boeing. when nike made this announcement, there were huge, kind of applause that was reported among the troops back

at headquarters. if you look at boeing, kelly o'port comes in. he has a mess to deal with not just from the last ceo but the ceo before him, long-term problems that are there, and he is not winning hearts and minds because he's dealing with strike immediately. managed to tick off the entire 30,000 employees in seattle and shut down operations. so it just seems like if you've got an easier road or an easier rode that would be it than what you are facing than with a company like boeing. >> i don't disagree with you there. i think these are two very different situations in terms of the relative vulnerability of employees, customers, shareholders, debtors. these are very different stories. the issue that i think that mr. hill is going to face is how do you keep people happy about the fact that he is a long-term

insider and make the change that is necessary to take this company forward. >> but, peter, isn't the problem with what happened in innovation product story at nike? isn't that what nike was all about, and isn't that what he had done with the company? that's the part -- you seem to be very critical of the new ceo as if it is going back in time. back in time, take some of the direct-to-consumer piece out of it, this was one of the most innovative, product centric, fabulous marketing companies in the world. over time, one of the things that anybody inside nike or outside nike will tell you is that, unfortunately, the focus on product and product innovation and all of the component parts of that got lost. >> yeah, all i'll tell you, andrew, is you can't go back to before. we keep seeing this with corporations. i think we have what i call

brokeb brokeback board room. we keep going back to great performers of the past and we can't quit them. the issue to me is business goes forward, culture goes forward. you know, we have a failure at nike, you know, donaho was four years into his tenure and there was no successor ready to take the seat? i mean that to me is a failure that is being overlooked in this. >> so you think it is going to be a short honeymoon period? >> i think this is going to be a very short honeymoon period, and i think that the organization has to be prepared, that if move doesn't improve nike is going to continue to struggle as it tries to figure out how it tries to be all things to all people. >> peter atwater from william & mary. thank you. peter. >> thank you. it is just past 7:00 a.m. on the east coast. you are watching "squawk box."

we're here on this monday morning. we have a couple of big stories to tell you about. the top story, apollo global management has offered to make a multi-billion dollar investment in intel. this according to a report by bloomberg as qualcomm reported a friendly take over of intel. chip makers are reportedly discussing building chip factories in the uae. they discussed the possibility of building a large facility there. samsung executives are said to have visited the company and held similar talks with officials. look at shares of constellation energy, receiving up targets. on company they announced plans to reopen the three mile island nuclear plant in pennsylvania in order to sell the energy to microsoft to power its a.i.. mike johnson unveiled a new

temporary proposal yesterday. emily wilkins joins us with more. i guess we knew it was coming, emily. it always seems to. i guess it is good. >> it is groundhog day yet again here on capitol hill, joe. but congressional leaders did release a plan over the weekend to keep the government funded past next week if they can pass the bill in both chambers this week. now, the bill released on sunday, it is a compromise. it would fund the government at current levels until december 20th. that is going to give lawmakers just more time to hash out funding for next year. it also includes $231 million for the secret service to bolster their security following the second assassination attempt on donald trump. it does not include that measure to require voters to show proof of citizenship though. and that's going to allow more democrats to back the bill. speaker mike johnson told his house republican colleagues in later yesterday that while this is not the solution that any of us prefer, it is the most prudent path forward under the present circumstances.

he noted as history has taught and current polling affirms, shutting the government down less than 40 days from a fateful election would be an act of political malpractice. now, the house is expected to vote to avert a shut down on wednesday. although a house panel will be taking the first steps to move the bill this afternoon, and as always we will be following the progress in congress closely. >> and then what happens december -- as we get -- i guess we have an election, we figure out what is happening with the makeup of congress and then we do it again, emily? >> that's the plan. i mean the idea that lawmakers, they don't want to be worrying about this too much for the month of october. they want to be back home, they want to be campaigning. the idea is once they get back in november and once they know what the makeup will be for next year, they are going to try to get funding. even a number of republicans, they might want to sort of wait. they're going to say have a president trump come january, but at the same time there are serious concerns like things like the fence funding and va

funding where the levels really can't stay where they're at right now. there are a lot of folks that think they need to increase. >> as long as they are able to campaign and get all of their stuff, you know, in order this can wait. as long as, you know, they are able to get things all squared away in their own personal businesses, thesepeople. good to hear. emily, thank you. see you soon. all right. when we come back, a closer look at what's moving markets this morning ahead of the start of the trading week. the futures this morning, again, barely budging. a little bit of a mixed picture, but dow futures down 17 points. the nasdaq future is up by less than 20, and the s&p futures are flat right now. later, don't miss our interview with minneapolis fed president neel kashkari coming up at 8:00 p.m. eastern time. he is just out with a news say this morning saying that he expects another 50 basis point cuts this year. we'll talk to him about why. stay tuned. you are watching "squawk box"

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well if we got xfinity you wouldn't have to mess around with the connection. therapy's tough, huh? -mmm. it's like a lot about me. [laughs] a home router should never be a home wrecker. oo this is a good book title. ♪ ♪ let's talk about the markets. the stock market, probably -- i don't know, it may be both. joining us, christine, head of global city at work. you are expecting 25, i think you were pretty sure it would be 25? >> we were pretty sure it would be 25. i think they surprised us at 50. >> what does it indicate to you that they are taking a victory

lap on inflation, or they're trying to get ahead of labor weakness? >> i think it may be a little bit of both. i think they've been very clear in terms of how they feel about inflation and that they see clearly the data, especially over the past couple of months, going in the right direction. i think we were in the camp of 25 just because of the last inflation print we received. there was some stickier inflation in there, particularly when it came to owners equivalent rent. 50 basis points i don't think we should read too much into whether it is 25 or 50. i think it is ultimately what is the trajectory from here, and then we need to look through into the data. as long as the employment data holds up, this is really aiming for the soft landing that the fed wants and actually the market wants as well. >> because in the past you would only see -- it wasn't, like you say, it wasn't shock and awe and maybe it was making up for not cutting 25 at the previous one, but normally stock markets

aren't hitting new highs and unemployment isn't at historic lows, that's not a time where you seem to have not an emergency rate cut but a significant rate cut. why? why not save it for when you might need it? >> look, we are in agreement with you in terms of why not save it for when you need it, but if we look -- you know, perhaps going back into july and the data they had in july and then the revisions to the job reports, it may simply be we know that policy does act with a lag. so looking at some of not really massive deterioration in the employment backdrop, but some deceleration, wanting to be ahead of that curve. i think the other thing we all have to keep in mind is that the fed's mandate has nothing really to do with where the stock market is relative to its all-time highs. it is more about employment and price stability, and obviously the functioning of markets. so looking at inflation, if that battle has been won, now it is more about the employment backdrop and making sure that we kind of stay around this 4% unemployment rate.

>> i guess if you believe that inflation was supply chain related after the pandemic, but there's no doubt that a couple of additional spending bills and stimulus in the midst of supply chain problems caused inflation to get pretty bad. >> absolutely. >> now, i know oil -- you know, oil hasn't been on anyone's radar screen for different reasons, for supply reasons, i guess. but it seems like we aren't at -- we have all of the spending still in the pipeline for infrastructure, for chips, for ira, all of this stuff, we're not through that at all. it seems like inflation could easily come back and it might be that the fed has -- you know, that's the main thing a lot of people think the fed should be concerned with. >> and when we look at the statement of economic projections, i think that inflation -- i think you are right. they may be overly aggressive in terms of where they anticipate inflation to be. maybe it is going to hover

around the 2.5% and it is something that could be sustainable for the near future. one of the interesting things in how this is impacting both markets and the economy is we are not talking about de flationary forces, just disinflation. so all of the price increase we have seen is still there. >> it is still going up. >> which goes into the arguments around the k-shaped economy, who is actually experiencing that inflation and what does it mean going forward. >> in retail sales -- >> still very strong. >> -- that was a hot number. >> still very strong. when you look overall, it is translating it back into what does it mean for your portfolios and what should you do right now. i mean you still have $6.5 trillion in money market funds. you do have inflation coming down. now you have rate cuts and we are actually with record profitability when we look at u.s. companies earnings. all of that is actually a pretty constructive argument, even with a lot of the worries that are on the table, whether it comes to election volatility, the ce

seasonality. the market is telling you with that backdrop there's still a lot of capital that wants to come into this market. >> so the s&p continues to rise through the end of the year? >> i think we will end up higher in terms of the s&p 500. i think october we do have to keep in mind that that is a challenging month, just given the fact there is election uncertainty. so in every election year you tend to have a negative october where people are just taking their gains, taking chips off the table. but once we have certainty into the results of the election, you tend to then see a rally into the end of the year. >> and then next year? >> and then next year, i mean i think we have to go back to fundamentals. so we can look at what are the election results and let's look at fundamentals. maybe we start with fundamentals. in earnings we anticipate we will have 10 out of 11 sectors with earnings growth this year. note last year we had 7 out of 11 in an earnings recession. that actually could be 11 out of 11 going into 2025. i think on the election front, what a lot of people are looking

at is tariffs and taxation, but we have to keep in mind that policy really drives that, not politics. so until we have the ability -- and right now the probability it looks like within all polling data is it will be a divided government. so in that, what is the probability anything actually could change, whether you are looking at the corporate tax rate, the personal income tax rate, et cetera. >> right. we don't have to do anything for all of that stuff to expire, which -- and i'm not sure what that would mean. it would mean back to itemizing all of those deductions. some i would like to itemize that i can't itemize anymore. >> yeah. >> that would add -- well, i think robert frank i think has a report coming up on that. >> with the deficit. >> it is going to add if trump -- you know, if he were to get rid of the soft cap and do some other things, trillions of dollars. kristin, thank you. >> thank you. elon musk backing down in

brazil, which could allow the company to lift a ban on "x." we will have the latest details straight ahead. heading to the break, look at this morning's premarket wneinrs and losers in the s&p 500. "squawk" returns in just a moment. only you can see. [crowd cheers] [music out]

♪ ♪ ♪ ♪ only you can see. [crowd cheers] ♪ ♪ ♪ ♪

♪ ♪ elon musk backing down in his battle with brazil's supreme court which banned the x platform. the social media platform named a legal representative in the country, removed some user accounts and paid fines, getting up to date with the laws that they had not been in compliance with at this point. joining us right now is tim higgins. he's the "wall street journal" business columnist and cnbc contributor. a lot to talk about with musk, but, tim, requestwhy don't we s here, what this means. he took a stance with some of the free speech issues that had been pushed forward. what are the latest developments? >> the judge wants the proper paperwork to be filed, giving a few days to do that and we will

see the next step. surprising given the rhetoric in the last few weeks about elon about the strong stand he was taking. frankly, a little unclear why now. perhaps it is because the company has been losing money there. it has been spreading to its starlink operations in brazil, the satellite-based communication network that it has, those accounts being frozen. so seeing some contagion to the companies outside of x that he loan has. but, yeah, took a stand but now seems to be backing down. >> and maybe this is just how difficult it is if you are not going to follow rules in foreign countries, especially countries that don't value free speech the way the united states does. >> right. elon says that x follows the rule of the land where he operates. here in brazil or in brazil where x was facing this challenge, he was saying that the country wasn't following the rule of the law. that's why he was taking this stand. but, yeah, giving in to this idea, it is hard to stand up against a country where you are trying to operate in. it was either an option of

losing money or going out -- basically not being in business there or getting back into business. most companies, it would seem, don't take these kind of principled stands. that's what is so unique in this situation, is see elon being public about what he was doing in a way that, you know, people were applauding outside of brazil. >> what about the latest with the ftc. this was a case with a few hours notice he cancelled the issue of showing up for the sec for some of the things that they've been looking into. what's wrong with that, if this was a last-minute cancellation, or was it standing them up? >> the government would see this perhaps as a pattern. he has done it before. a cynic might look at this and say elon is essentially trying to run out the clock, waiting for a new administration to take over. he is betting that former-president donald trump will be in the white house and he's been -- obviously gotten

very close to that potential president in the last few months and weeks. so it is a little unclear. you know, he doesn't exactly have the warm and cuddly relationship with the sec going back a number of years, but clearly here is another example of elon being very defiant and very confrontational with a government, and it could potentially have ramifications down the road for him and his companies. >> it was the trump sec that originally brought that case in the situation with 420, you know, going public at 420. that was trump's original sec that did it. i guess it is different because at that point trump and musk were not close. they had lots of issues between them. how would it work if musk were to take some sort of -- i don't know if it is a government role or just an oversight position of looking at regulatory oversight and bloat when it comes to the government? >> that's a good question. it is one a lot of people are asking about.

you have seen in the last few weeks elon being pretty aggressive in his criticism against government agencies that he feels like are in the way of his companies. i think of the comments in the last week about the faa. he has been critical of the epa. these are government agencies, regulators have been fining his companies for their actions, and it is the kind of thing that good government kind of folks are raising questions about conflicts of interest. these companies that he has, whether it is spacex or tesla, are highly regulated. they're operating in new areas of technology, whether it is space travel or autonomous vehicles, a gray kind of areas where he is very aggressive in pushing back against regulators as they're trying to figure out ways to essentially regulate this new world. it has been an effective tactic for him in the last 20 years or so, and the question is will he have even more leverage and kind of influencing those agencies if he is some sort of head of a

commission that's tasked with reducing government spending or rules or regulations. it is a unique situation. >> just to be clear for people who haven't been following along, the faa, the federal aviation administration, was the subject of an x post where he said the faa space division is harassing spacex about nonsense that doesn't affect safety. with the trump administration or the harris administration, the government is in a unique position because they are pretty reliant on spacex at this point, too. the last boeing rocket had some problems, and if you look at the turmoil that's taking place at boeing, where is the government going to turn? >> absolutely. this is one of the kind of conundrums the government has as it tries to regulate the elon inc. world. it is not just spacex and these issues of going into space. you also look at some of the other powers they have with

starlink, the communication network. very helpful to ukraine in its battle with russia, but really raises concerns about how much power elon has in various corners of the world. >> all right, tim. thank you very much. a lot to kind of think through, but, look, the government is in the position of needing a lot of this stuff, too. so we'll see. thank you. >> thank you. coming up, what the feds' rate decision means for the markets in the second half of the year. roger altman will join us. plus, cnbc speaking to invetera ceo about his meeting. that highlight straight ahead. "squawk box" coming right back.

welcome back to "squawk box." india's prime minister modi meeting with several tech ceos ahead of the general assemblies. the topic, the future of a.i. nvidia ceo and alphabet's ceo and so many others, our own

steve kovach got jenson's overview with modi. >> prime minister modi is inspiring. every time i have seen him, he is such an incredible student. he was one of the first people i ever explained artificial intelligence to. this is an extraordinary time for him and time for india because it is a reset of the whole computing stack. >> steve also asked him about the qualcomm-intel merger speculation. >> we are doing it our way as you know. we are a very different company. we build everything from chip to systems, networking, cpus, gpus, switches. we write an enormous amount of software from algorithms all the way to applications for artificial intelligence. so we're determined to move forward in the way that we do. i think in this new world you have to be a computing infrastructure company to be able to bring all of that technology to bear. >> check out shares of intel and qualcomm right now. you are looking at intel, up a

little over 3, 3.5, 4%. qualcomm down, but down marginally. when we return evercore's roger altman will join us to talk about the fed and why he doubtsno ather 50 points basis cut. its later, don't miss our interview with neel kashkari in the 8:00 hour. stay tuned. you are watching "squawk box" and this is cnbc.

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welcome back to "squawk box." joining us for insights on the market, the fed and much more, roger altman, founder and senior chairman of evercore, good morning to you. >> good morning. >> let's hit the fed first and try to understand what you think is going to happen next. do you think they were meaningfully behind and that's why we went for the 50 basis points as opposed to something else? >> if you are asking whether they were behind the curve, no, i don't think so. i think what essentially happened was that the fed saw the path on inflation steadily downward as more certain than the path on labor markets. a little more uncertainty about labor markets, so it took a stronger step to fortify labor markets and went for 50, but i don't think it was a sense they were behind the curve, including

they signalled 100 basis points for the full 2024. they could have more or less just as easily have said we'll do 25, we'll do 100 for the full year, and that would have been received pretty similarly. i don't think they were behind the curve. >> can we officially say this is a soft landing? >> oh, i think so. >> you think it is just a beautiful glide path? >> i don't think it is mission accomplished yet because inflation has not hit, as we all know, the fed's target. but growth is resilient. we're give or take around 2% right now. corporate profit outlook is good. equity markets are on track to have their best year since 1960. if you annualize the s&p 500 for the rest of the year, best return since 1960. 4.2% unemployment rate, and just a perfect -- nothing is perfect, but a nearly perfect overall environment. now, is it done?

no, because we have to see inflation get to 2%, although this friday's pce figure i think it come in 2.2 annualized, really good. so if the landing is finished and the fed hits its target, powell i think will deserve an "a", and it will be a pretty miraculous achievement. >> talk about the market though. how much do you think the market is betting on the presidential election and any of the policies that will come 12 months from now in terms of what the market is thinking today, or do you think it is still such a jump ball it has almost nothing to do with it. >> i think it is mostly the latter. i don't think the market is paying attention to the election. in fact, i don't think the market is paying attention to great, big risks in general. because if you look at the international situation, you want to talk about -- >> big risks, you were saying -- you would think those would be massive storm clouds. >> and the market isn't paying attention to that. >> and why is that and is that a

mistake? >> well, in my own experience, historically the markets don't pay attention to x, y and z until they do. >> right. >> and they do all of a sudden. so if we have a truly wide war in the middle east or russia actually achieves its objectives in ukraine or china's territorial aggression, whether it is taiwan, the philippines and so forth, goes much further, then all of a sudden the markets will pay attention and they won't like it. by the way, it is the same thing about the fiscal trajectory of the united states. the market is paying no attention to it, and at some point -- and it could be two, three, four years from now, i don't know -- it will pay attention and won't like it. >> can i ask a different question? we were talking earlier and maybe it is a curveball of sorts, we were talking about a lesley stahl interview last night on "60 minutes" and she was asked whether lina khan's efforts at the ftc were stifling the u.s. economy and could

actually create some kind of damage, yet you were talking about how the stock market is doing as well as it has. >> i don't know about those numbers, roger. >> so my question -- where are you going with that, joe? >> i don't know about the numbers. up 20% and in 1995 the market was up -- >> i believe, and i think i'm right -- >> with october -- >> -- take the gains for the year, e trap laxtrapolate them year i think it is the best number since 1960. >> in 1995 we were up 35%. >> i double checked, but if i'm wrong it is a great year no matter how you slice it. >> that's what i was going to ask. if it is such a great year, why do you think there's been such opposition, for example, to lina khan? do you believe the economy could be growing at leaps and bounds or better, the market could be doing even better by leaps and bounds if the regulatory regime

were somehow different, if you think we were drilling more oil? i ask you these questions because this is sort of central to the political debate right now. >> no is my answer. i mean let's take the second part of your comment. u.s. energy production is at an all-time high. the united states is the largest oil producer and gas -- well, total oil and gas producer in the world. that's unbelievable. in terms of the ftc and the justice department, i think they're having impacts only at the margin, small impacts. now -- >> you think they're going to have good long-term impacts? >> well, i'm not a fan of lina khan and jonathan cantor because i think they're just too ideological about it. they're just -- jonathan cantor has a plaque on his desk saying "break them up." i don't think that's a mature approach to antitrust policy.

i just think they're zealots and it is somewhat crazy, but i don't think they're having a big effect on the economy or the markets, no. >> i'm glad roger is bullish, because we're up just under 20% now. there have been 19 years we were up over 20% since 1960. but if we do get up to 35 -- you are forecasting up 35% by the end of the year so that would be very bullish because that's what it would take to be the best since 1960. i don't know where we're going from here. >> we could. >> we could go up 35. right now it is a good year, but -- >> in fairness to your point, it is hard to see the markets with a big upward leg over the short term. >> you just forecast the best year since 1960. >> i said if -- >> i'm taking all of my cash and going into the s&p -- >> i just want to ask one question. we were talking about the potentially intel action and

chip act and government subsidies and whether qualcomm or others could be buying the subsidies. what do you think could happen if that were to happen? >> i apologize but i can't talk about that. >> what! >> and it is not because you don't have thoughts. >> do you think it would be a premium? how much of a premium would you want. >> he has gone silent, folks. roger altman, we will let you off the hook. >> now you really have our attention. >> we appreciate it. >> thanks for having me. >> your tentacles are everywhere. >> can't talk about that one. >> can you talk about boeing? >> can't talk about boeing either? >> can you talk about boeing? >> well, i don't have any -- i don't have any special -- >> okay. >> i don't have any professional commitment involved with boeing. >> can you tell us the companies you can't talk about? >> by the way, i think boeing, it is going to take a while but boeing is going to recover. i have tremendous respect for the chair, who i know well.

>> what happened with the missteps with dealing with the union on this, dealing with the union leadership and now furloughs of the white collar employees? this seems to have unravelled quickly. >> it is a case for the last four, five, six years, everything that could go wrong and every misstep that could be taken was taken. there's only two major air producers in the world, airbus and boeing. obviously boeing can't be allowed to fail. >> correct, but it doesn't mean anything if you are a shareholder. >> trading on boeing's bonds, there's no real movement because of the sense they can't be allowed to fail. they will fix the company. it is just going to be slow. >> i just thought of something. i think you were in the clinton administration during the '90s and there were three years in a row up over 30% as i recall. so you are really -- i don't know what you're doing here because you were there orchestrating plus 30% for three years. so we're not there now, so let's

just leave it at that. you have the best -- >> you are absolutely right. the clinton years were awesome. there you go. thank you. >> well, he was a republican, compared to this. coming up, senator bill cassidy on drug pricing. hold on, hold on. government funding and much more straight ahead. "squawk box" will be right back.

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xfinity mobile was designed for where you need it most. xfinity internet customers, ask how to get a free 5g phone and a second unlimited line free for a year. now to an article in the "wall street journal" today that details the risk to commercial aircraft of gps spoofing. militaries use fake signals to ward off drones and missiles, but those signals are affecting the instruments of commercial flights as well. pilots told "the journal" incidents became more common starting about a year ago as the technology spread beyond active combat zones. fake data can cascade through cockpits causing glitches that can last a few minutes or an entire flight. the report says pilots are

trained on using non-gps systems as back up, but managing the fake signals could be catastrophic if it occurred during an emergency. that's the first i heard of this. >> me too. coming up when we return, louisiana senator bill cassidy will talk to us about weight drug pricing and the impact on consumers, and taking a look at gold prices this morning. the precious malet hitting an all-time high, sitting at about $2,647 this morning. "squawk box" returns from times square this morning. you'll find them in cities, towns and suburbs all across america.

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set to testify before the health education labor and pension committee tomorrow over concerns about the price of ozempic and wegovy. joining us now is senator bill cassidy. you stick a gastroenterologist across me, i'm not going to talk about other stuff. i have so many questions about gird. thank you for joining us. you gave us some good tips, no alcohol, coffee, tomatoes,

pizza. can i eat anything at all? >> i used to tell my middle school medical school anything you want will make your gird worse and one said what about sex? not so much sex. but think about alcohol, coffee, pepper mint, that makes it worse. >> i don't know where i'm going with that. but let's talk about the drugs and pricing because we're back to bernie sanders saying, it cost x amount to produce -- it's like when someone says this pill costs $2 to make. it's a pill that took 12 years to develop for billion dollar, bernie can't understand why a manufacturer doesn't charge $2. what do you say to that logic? >> there is a tension between innovation and affordability. without profit you do not get innovation. and we're talking about gird.

when i was a medical student removing someone's stomach was normal treatment. but now we don't have that with medicine that came out. now bernie doesn't quite get and trust that the profit motive is essential for innovation and that's what you have to balance. >> we talked about it, probably gird goes away, asthma goes away, diabetes goes away, if you can lose weight all these things kind of get better. so everybody that needs these and might be obese probably should have them but they are very expensive. why? why should we do? >> there's no single reason a drug is expensive. for example, you have the pharmacy benefit managers asking for a sky high list price so

they get a better rebate of which they take a percent, that's going to drive up the cost for the people who don't have the insurance or the kind of -- the net price is lower to the patient but the list price is still high. that's not the entirety of the reason. there is no single reason why drug costs are high. but again you have to balance that profit motive, the incentive to create and the ability to afford. >> what do you expect to hear from the ceo of novo nordisk. >> i expect we're not going to hear a lot. it's a cost to develop, a cost to manufacture, and a cost to deliver, and et cetera. but we know there are new drugs coming out. there will be competition and when that competition emerges, the price will begin to come down so this is a process we go through and sometimes people get inpatient with that. >> everybody talks about middlemen no one seems to do

anything about middlemen they're as powerful as ever. >> we passed legislation out of the senate that would address the issue of benefit managers, they passed it out of the house, the house version is a little bit different. i'm not sure the house is going to take up that reconciled version. i wish they would. if we don't do it this congress we'll do it next congress. >> do we want to import the price controls we see in the rest of the world. that's another thing we hear from senator sanders what drugs cost here and there. if there's price controls in europe, they're not the ones that develop these drugs in the first place, they don't because of those price controls. do we want to import price controls. the trump administration has proposed taking a market basket of what the prices were, and having the united states as a multiple of that. that would be for medicare. if the average of germany,

france and england was 100 bucks maybe pay 150 and not 500. but if this is the list price, sky high and a huge rebate going back to the pharmacy benefit manager the net price is far lower. i'm not sure it's a good system but typically the patient is paying less that's the list price. >> the pbm -- >> the pharmacy benefit managers are taking a percent of that rebate. they have an incentive for a higher list price. and sometimes there's a cheaper drug, cheaper insulin, they request to have the higher list price because then they get the rebate. >> and they're owned by the insurance company at this point. >> they're owned by the insurance company. >> it started out -- >> there is a conflict of interest there. i think. >> i think so too. >> we had dr. scott gottlieb on talking about some of the

provisions in the inflation reduction act for medicare being able to negotiate and they hike the numbers of how much they're giving up. supposedly the discounted price are nowhere near the ones they're using to say we cut it by 30%. it's much cheaper because of discounts before that, then it doesn't come into effect for a couple of years. has there been progress with medicare negotiating? >> i would say there's been progress. but i would say if the pbm does not put the cheaper drug on the preferred tier then the patient may not have access to it. keep in mind, in insulin, eli lilly has had a $35 insulin but the pharmacy benefit managers have not carried that $35 insulin they carried the more expensive because they want the bigger rebate. so if medicare negotiates a lower price and it does not require the pharmacy benefit

manager to put it on a preferred tier which it does not. then it may be the patient is still paying for the more expensive drug instead of the one with the lower negotiated price. >> shifting gears entirely, your fix or the proposed fix for social security, is this something that former president trump would get behind? no one wants to talk about reforming social security because it sounds like you're cutting. >> the trust fund is going insolvent in eight years at which point under current law there will be a 20 to 24% cut in current benefits. i and other senators have come up with an idea of an investment fund separate from social security you put 1.5 trillion in over five years and put it in the broader economy. we know the return in the broader economy is greater than treasuries. and treasuries is the only thing

the trust fund can invest in. i think trump would be open to it, i think harris would be open to it. they talked about sovereign wealth funds. now i'm not for a fund that's an executive branch of this play thing, i want to put it in this or that. but if you create an investment fund, the senior citizen's 401(k) except all risk born by the fund and none by the beneficiary we can increase benefits for the beneficiary as we bail it out. >> maybe put it on bitcoin. >> i don't know about that. but it wouldn't be congress' decision. put it that way. >> this has been an idea that's been around for a while. if you go long term, look at the return of a ten year treasury or treasury versus the stock market, it's a multiple better. unless we really hit a bad stretch, it would be -- obviously it would work. >> or unless you started it at a market high, bubble. >> even when do you that, if you

go back in time -- >> when we looked at this. since 1929, the stock market has averaged an 8.548% return. if we estimate we have a 4.0 cost of borrowing you're getting a premium there. our fund you put the proceeds back in for the first 60 years, 75 years maybe and allow the return to accumulate. then you hit the rule of 12 i think it is and it just blossoms. this is how we can save social security without raising taxes on the seniors. >> does your gird get worse when you have these meetings and conferences with other members of the senate? >> it gets worse when i drink a lot of coffee. >> but then sex immediately takes care of it. >> i take a -- i have a big pile of antacids in my office. by the way, joe. you lost weight and that's a great thing to help gird.

>> i'm going to keep. i swear i vunt done any wegovy. >> i think you should. >> i know. look at him, he's ready -- >> i want to -- >> that would be drug abuse. >> it would not. i think ultimately we're all going to be taking the stuff. >> there's a difference between a man and a dan, a man likes to take a bill and a dog doesn't. if you're talking about taking a bill to lose weight, andrew, i don't know, man. >> there you go, don't listen to me. >> senator doctor thank you. >> that was helpful, thank you. it is 8:00 a.m. on the east coast and you are watching "squawk on the street" cnbc. among today's top stories we have intel in focus. we're told qualcomm approached the chip maker about a possible takeover. apollo has offered to make a

multi-million dollar investment in intel. news on two other chip giants. taiwan semiconductor and samsung. the companies are considering building factors in the united arab emirates. and dell technologies and pallen tier are joining today alongside erie indemnity. >> take a look at the futures right now. where things stand. looking at a little bit of red on the dow there, off about 20 points. nasdaq up as is the s&p 500 we'll show you treasuries if we could. looking at the ten year at 3.753, the two year at 3.574. want to get down to mike santoli at the new york stock exchange this morning. wanting to look at warren

buffett's move to shed stock in two of the biggest positions. mike? >> obviously got a lot of attention for good reason. a lot of profit taking by berkshire hathaway in apple and bank of america. berkshire has been a net seller for seven straight quarters. this is what the s&p 500 has done the past seven quarters since the latter part of 2022. obviously up over 50% over that period. it's not a market time and call almost certainly from berkshire hathaway from warren buffett. we slowed down the last two months, sensitivity around the initiation of fed rate cuts and just a little bit of valuation pressure arguably too which might be behind what's behind the net sales by berkshire hathaway. look at the shares of berkshire hathaway rel irelative to the insurance etf and quality etf.

this is a collection of stocks in the u.s. with strong balance sheet and high profitability. to me that's been lifting the valuation and interest of berkshire hathaway itself this reck niognition it has a balanc sheet so it's not penalized for the sales of things like apple and bank of america which were grown to be out sized positions. seemed like there was some ambition to flatten out concentrated positions. look at apple over two years. it became about half the investment portfolio coming into this year. the first half of this year the selling has become relatively aggressive. look at where berkshire hathaway was mostly selling as far as we know, that apple stock. after a great run last year but the point is, it was not in itself intended to be a market timing signal most likely and probably wasn't a great market timing signal. i think all of that in the mix along with the fact that

berkshire slowed down the repurr h repurchase of its own shares. but i don't think that means we have to worry about imminent danger in the market. just balance risk and reward. >> we all wonder given the cash that berkshire hathaway has $300 billion, what are we supposed to make of that? >> the first thing is the observation, this is not a cheap market and it seems as if there are not very large opportunities of well valued companies that, you know, berkshire hathaway feels as if they can own virtually forever. so we know that. we know it's 21 times you know, pe market right now. the other piece is, they're perfectly happy to be the largest buyer of treasury yields they down to 4.5%, though. if the fed cuts does that change? i doubt it. i think it's about a lack of

opportunity and getting the investment portfolio into a spot it's ready for the next phase of berkshire hathaway after eventually there's a transition to new leadership. >> okay. mike santoli, thank you, sir. coming up, minneapolis fed president kneel kashkari is going to talk about the decision to go big and cut 50 basis points. and ahead john paulson is going to join us for his first tv interview since the fed rate cut. big wall street journal op-ed on trump's tariffs. definitely a trump backer and possible treasury secretary. we'll talk about all these things, the market, the economy and more. and also the election. stay tuned you're watching "squawk box" on cnbc.

welcome back, everybody. joining us right now on the economy, the fed's 50 point basis points cut last week, here's neel kashkari, he had an op-ed this morning saying why he sp supported that 50 point basis points. and thank you for being here. >> thank you, becky. great to be with you. >> we've had a lot of people trying to figure out exactly why the fed went 50 basis points last week. maybe you can explain. if you are worried about the labor market at this point, is this the equivalent of saying mission accomplished when it comes to inflation? >> well, i think all of us are

reluctant to declare mission accomplished. certainly the risks have shifted. i look forward and wonder which risks am i more worried about right now, a surprising up tick in inflation or unemployment? the latter for me. we have a strong labor market and i want to keep it a strong healthy labor market. the data is looking positive we're on our way back to 2%. i don't think we find anybody at the federal reserve that finds mission accomplished. >> it makes sense but also makes sense why you would cut 25 basis points why go 50? >> it's a judgment call. i've been on the hawkish end of the committee the last couple of years even i say after 50 basis points i still think the policy's in a net tight position. at some point we come to the question are we around neutral?

i write about that in my essay, other people comment on it, and we have to debate are we getting there? i think after 50 basis points we're still in a net type of position i was comfortable taking a larger first step and as we go forward i expect on balance we'll probably take smaller steps unless the data changes materially. >> that's the question for it. someone who's watched over a long period of time, i'm used to 50 basis points signaling the fed thinking it's behind the curve and there's a real emergency in order to do something like that. if this is things are looking great but we're still cutting 50 basis points, i don't get it. >> it's just we're in a relatively tight position. let's take a meaningful step to get on our path. ultimately we want to get back to a neutral policy stance where the economy is in balance and we are not pushing the economy one way or the other and this is a larger first step to get it going. if you look we've held rates at

a high level for an extended period of time longer traditionally than history this is just acknowledging let's step towards neutral, recognizing we're still tight. >> part of -- we've had so many armchair psychologists and played some ourselves i'm going to throw a couple of theories at you. you tell me if anything sounds right, crazy. one was the fed was behind the curve on raising rates when inflation was hot, they don't want to repeat that mistake. another was, this was an unusual time in the calendar where they didn't move in july, didn't have a meeting in august. don't have a meeting next month so maybe this is taking the combination of those months and putting it into one package. and then you have people asking about the laengs here too and why make a big move ahead of the election? >> well, i think the first two, certainly we were late and i was late in raising. we always want to learn from our

mistakes and we don't want to repeat those. that's not what's driving the move but we are aware of the mistake. so there's learning always going on. so i think the calendar, when the meetings happen, data releases happen, we get data with a lag, by the time we get it, can factor it in, that's always present and then the election, as jay powell has said many times and all of my colleagues have said, it's not a factor in my deliberation. i think the first two theories people offered you, those are not crazy. all two into our risk assessment of what's the best action we can take to ultimately hopefully achieve a soft landing and preserve our dual mandate goals. >> michelle bowman dissented. she voted for 25 basis points and it doesn't seem like a big

deal to have one dissent. it's the first time there's been a dissent since 2005. was it a more contentious meeting, a more thoroughly discussed meeting. >> there was active deliberations at the meeting, a lot of discussions leading up to the meeting. and ultimately for those whether it's it's governor bowman or people on wall street saying i think 25 is the right, i wouldn't argue that. i think 25 is reasonable, 50 was reasonable. it was the judgment of the committee that 50 made more sense to get going. what's interesting is nobody on the committee said we should hold here. not even governor bowman. so there was unanimous view we should take steps to dial back the policy stance in the face of changing landscape and employment. >> back in the early '80s and '90s when we had a -- seemed

like a totally different rate structure in terms of where fed funds were and the ten year and everything else. was inflation higher so that, you know, tighter or more restrictive policy made sense then. i don't remember inflation being at 4 and is 5% in the '80s and '90s, i remember it being low and the rates just structurally higher. it seemed to be me got almost addicted to low interest rates after the twin crises and here we are headed back down for no reason instead of keeping our powder dry for the next serious break that seems it's coming. you work hard to get to those 500 basis points, why not keep them till you see some trouble on the horizon? >> joe if you look yesterday in the essay i published. i described my dot plot my

individual forecast. i'm coming in at a higher level than i was prior to the pandemic. what you get at ultimately is where do things settle out when the economy is at neutral. there's uncertainty about where we are headed. it's interesting that markets are not pricing back in going down to a zero federal funds rate or 1, so the markets seem to be buying a higher for longer narrative and that's what we have to watch and see how the economy evolves. >> what do you think a long-term unemployment rate should be in the united states? >> well, another great question, andrew. prior to the pandemic we kept getting surprised. i was one of the lonely voices arguing against interest rate increases because we kept getting surprised as the unemployment rate went lower we were not seeing an up tick in inflation, so if those happen let's let it run so we were 3.5%

unemployment before the pandemic i would love to get back there, 3.5% and 2% inflation. we'll see -- >> isn't that a historical anomaly, isn't there a regular run rate that you can run a country at an unemployment rate of 3.5% on a sustainable basis? >> i don't know. we had it a couple of years, kept getting surprised it wasn't leading to inflation. one constant prior to the pandemic and now the inflation episode. the labor market is not what's driven inflation. it didn't drive it before when we thought it would, it didn't drive it when there was a slack in the labor market. so one of the things this reveals is how many different factors go into the inflation process. we spent a lot of time focussing on the labor market as the source of inflation, at least since i've been on the fomc for the last nine years.

>> how connected do you think the issue of housing and mobility. not just upward mobility but the idea there are people who may be stuck in their homes, if you will, given the current mortgage rate and as a result are not taking other jobs or moving from around the country in the same sufficient way you would want them to given the sort of locked in state of affairs? >> i think it's -- there's some truth to it but i think that's a temporary factor given how quickly rates reprizeced on the way up. if you look over time in the last few decades. i distinguish mobility from movement. movement has declined from the u.s. economy which on the surface looks trowubling. but people are willing to move their families for jobs that are better. they're not willing to uproot for an extra dollar an hour or

$2 an hour. so i when i talk about mobility i focus on movement and why people are choosing to move or not choosing to move and has the labor market, perhaps with digital technologies and wi-fi streaming, maybe the labor market is becoming more homo genius, so there's not a great opportunity to move. so it's a complicated topic, andrew. >> just to clarify before we let you go, you're thinking 50 basis points more cuts this year, meaning 25 basis points in november and december? >> that's what i've pen sited into my dot plot but as we say, it depends on how the data guides us but yes, i think that's a reasonable starting point. >> i want to thank you for joining us today. >> thank you for having me. >> coming up on the other side, how some of the biggest u.s. banks underestimated a key risk they're facing. we'll talk about that in a moment. later this hour also going to be talking about how we are a week

away from potentially crippling east coast port strike. what are keeping the two sides apart? we'll talk about that and what happens if they do shutdown? all that and more when "squawk box" comes back in a moment. you are not rock stars. (clears throat) okay. most of you are not rock stars. oooh. data driven insights, and large language models. oh, that's so rock roll. it is, right. he gets it. yeah.

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welcome back to "squawk box." just thanking andrew for all you do. big interview tomorrow, excited about not henry paulson. >> john. >> but john paulson. i can't remember. >> trump surrogate. >> i can't remember the last time we had him on or if we had him on the show. >> that's a good question. i don't recall. >> that's 8:30 tomorrow? >> it will be. >> in studio? >> i believe so. >> awesome. futures -- i'm going to get blamed for it.

it's you. tweeted him. s&p up 5 points, dow down 10, nasdaq up 42. >> the maker of party game cards against humanity is suing elon musk's spacex if it sounds like a situation from the game it's not, it's really happening. cards against humanity asks players to associate off color items with a situation. in the lawsuit cards against humanity accuses spacex of damaging a plot of vacant land it owns in texas saying spacex covered part of the plot with construction materials and other debris without permission. they bought the plot of land in 2017 as an effort to oppose trump's efforts to build a border wall. meantime, the federal had the nation's six largest banks

had them perform a climate stress test on the portfolios. the banks reported data gaps and modelling challenges. and there's a new report filling in the gaps with striking results. i want to get to diana olick who joins us with that. >> andrew, climate risk firm first street ran all the nation's banks through a climate stress test. specifically focused on physical riske to real estate assets and the loans associated with them. the analysis gauged potential losses from delin quencies and defaults. first street found that roughly 30% of banks had risk high enough to hit the risk threshold level set by the securities and exchange commission a 1% loss or more of the bank's total portfolio value. 57 banks with a total of

$627 billion in real estate loans. that's nearly 11% of all commercial and redensidential ls in the country could face risks as defined by the s.e.c. of the nation's largest bank, citi bank, capital one, fifth third, huntington, citizens bank and key bank all crossed the threshold. the report found that regional and community banks were vulnerable because the lending portfolios were so concentrated graphically. those banks have net losses up to 14% of their portfolios. the problem with the fed test was banks looked at individual hazard, they hadn't put it into the future assumptions that these happen in isolation. as in there wouldn't be a wildfire at the same time as a hurricane, which as you know, it could happen. there's fires and floods

happening at once. >> how does this test differ, if you will, from the one the banks ran themselves for the fed? >> they were looking at an individual scenario, say a hurricane or wildfire in one specific area and looking at how would that stress the portfolio and looking at that historical data because that's what they can. they weren't factoring future climate change, that is how much the climate is changing, the wind, fire severity, it allowed them to look at multiple hazards at once to a bank's portfolio at the same time. >> diana olick, thank you. appreciate it. >> sure. when we come back, why being ultra successful in china might be more of a liability than an sea asset at this point. ruchir sharma joins us with that story. as we head to break,

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welcome back to "squawk box" on cnbc. mixed picture for the futures this morning, but we've had week after week after week of pretty good gaines. and because of an earlier discussion i can tell you now the s&p for the year is up 19.55% or so. >> meantime, let's talk about what's going on with a new opinion piece that our next guest says going on in china right now it's dangerous to get too rich. rachir sharma is here, the author of "what went wrong with clam capitalism". you think getting rich in china

is dangerous, what do you think? >> when he spoke out against the chinese government i think that's turning the tide in china against wealth creation because they went after him, after alibaba. the reason i wrote this piece is what happened the last few weeks, a fascinating story. the owner of bdd became the richest person in china in late august but soon after he earned the title, the ecommerce company and the stock plummeted. causing someone else to become the richest man in china, the owner of a beverage company and he went on to assure profit warnings so he would no longer have the tag of being the richest man in china. that set chinese social media abuzz. it's dangerous the moment you get that tag, the authorities can come after you.

that is what got me to write the piece to show how in china the attitude towards wealth creation has changed over the last few decades of tracking it. >> and do you think that the government is going to do anything to try to reverse that view? or it's only getting worse. >> yeah. in terms of the fact the economy is in very bad shape in china, currently. the domestic economy is struggling. private investment is struggling and you have millionaires fleeing china. 15,000 millionaires who left china last year, record new high. i just don't see the signs as to what they will do until the economy just gets too bad. i think he's very focused on xi jinping on creating so called high quality growth, whatever that means. so now in china what has happened is an interesting phenomenon, that the best way to invest in china seems to be you

buy the public sector companies. it's the only major market in the world where state owned companies create almost at the same valuation as the private sector companies. as you know, state owned companies typically trade at a discount. but at china it's almost at par. it's a fascinating change that happened there and i hope they do something to restore the private confident ce. when you speak to chinese business men they're still down beat, though. >> as change continues you look for more capital in other places if this is the truth you would think they would be on the offensive in the other way. >> they're trying to say these sectors we like, these we don't like but all make it uncertain. but i'm looking at how the money is in china. if people are freaked out having

the richest tag on their back that's a problem. you don't know who they're coming after next. i think what you need in china is a clearer framework, we don't like these sectors but okay with these sectors. hopefully we'll see some shape of that that they seem to be okay with semiconductors or manufacturing sectors or even things like health care. but there are other sectors where it's just too uncertain to know when they would strike. so i think it's that level of uncertainty with private investment in china that's become one of the reasons on top of the debt and the demographic decline that they're growing through which is what's keeping growth in china so week. here i know the price, the chinese stock market, if you look at china down about 70-odd-percent from the highs. i want's a time when so many markets across the world, including the u.s., to go on

make new all-time highs. so it's stark and trading at eight time forward earnings. it's really become a bit of a value trap for now. >> thank you, appreciate it. >> thanks, andrew. coming up, time getting short now to avoid a potentially r crippling east coast port strike what a shutdown would mean for consumers and companies and the overall u.s. economy. as we head to break, a reminder t the best of "squawk box" and our daily podcast. follow squawk pod. we're coming right back.

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welcome back to "squawk box." look at the futures this morning. the dow is down about 8 points, 7.5 points. the s&p up about 5 points nasdaq up close to 50 points. let's check the luxury retail stocks falling in retail

trailing. bank of america taking a negative view in the sector saying all shopped out saying china weakness has just begun. they lowered price of stocks in that sector by average 20%. you can see shares off by 1 or 2% today. >> and speaker of the house mike johnson offering a proposal to keep the lights on in washington for september 20th. it doesn't include parts of the save act. that would require people to show proof of citizenship to register as a voter. congressional republicans and democrats have just over a week to strike a deal on funding otherwise a shutdown would go into effect a week from tomorrow. house republican aides said the new bill should get to the house floor on wednesday and it includes additional secret service fundings following the

assassination attempts of former president trump. and a little over a week remains before dock ports shutdown. it would throw a wrench in the economy just as the holiday shopping season is about to start. joining us to talk about what's at stake, katherine thompson, thompson research group ceo. i imagine this would be extremely disruptive. especially at this time of year. >> yes. the first thing to do is why is there a strike? it's the basics, it's pay, health care, and a key focus in particular is on automation. or really more demands to withhold any type of automation or semi-automation. if you look at just new york, where you guys are, port of new york, new jersey, it's about a third of goods in the u.s. and a

key destination because of how densely the u.s. population is in that area. of course it will be disruptive. it's one step forward, one step back. you had interest rates cut but costs should go up with disruption at the ports. >> one thing to think about, three buckets you have supply chain disrupted again. you can have some asian importers that will divert to the west coast you can rail and truck those but that leads to higher cost overall when you have more expensive transportation with rails and road. and sit's just a day-to-day disruption. you know, some of the typical goods that you would expect to get may be a little bit slower. >> the things you described are like a nightmare for the economy because you really talk about it could hurt growth, gdp, i don't know what your estimates are for

that depending on how long it went and also increase costs. those are, either one is bad. you put them together and it's a really bad elixir for the economy. >> now that there's a silver lining but shippers have been anticipating this. typically you have peak shipping by august but peaked in june based on flow of goods. doesn't make it better but there are going to be certain things that are much more difficult to ship in advance. so produce would be a good example. so if you have any type of produce coming from latin america, that's going to be disrupted. also, there's going to be certain industries that have more just in time nature, think of the auto industry, that's going to be more disrupted versus other industries. will we get all of our christmas goods? i think we are well along with the way with that, but there's going to be other areas where

it's going to be a little bit tighter over all. >> what's in your assumption that that this definitely hap happens? and the reason i ask it, there's a buyer's market or seller's market. there's a good time to be on the negotiating side if you're labor. we saw what happened with the auto makers and watching with boeing. they are emboldened at this point. are you pretty certain this is going to happen and it will be a long, protracted strike at this point? is that what thompson is thinking? >> this is one where labor negotiations is very, very tricky. but in terms of broadly speaking you are seeing more labor activity. i think this is a natural extension of what we've seen post covid and the stress on labor overall. on the other end there's some

winners and some losers in all of this. and, you know, overall, there will be certain labor concessions that will be met. so that will be good for workers. if you look at certain industries, you can have some unlikely winners from all of this. using cement is a good example. we're net importers of cement in the u.s. just to meet demand. if you're not importing as much cement that means domestic producers will be able to have more supportive pricing in the markets. so it's a little bit of have and have notes. it just depends on the industry and the focus you get into. >> that's interesting. thompson wrote a report that highlights some of the possible winners as well as the losers. >> yeah. well, you know, the -- we def definitely have been talking about this for some time.

another area to think about is the rails, csx and norfolk southern. the two class two rail partners at the port of new york, new jersey. so an example of where yes, they're going to get more flow of goods shipping across the u.s., but the business at the important is going to be hurt. now the negative side, a company like floor and decor, one of the largest retailers of flooring product throughout the u.s., they're highly, highly reliant on flooring imports, particularly from the port of savannah so that would be a loser. you have mixed bag, obvious winners on cement, losers like on the flooring and some that's a toss up on the transport side. trucking companies, that's the industry that will win. >> for trucking companies. great, yeah, i can't remember

talking about so many different -- boeing is front and center, this would be front and center. >> right. >> definitely a different environment. katherine thompson, thanks. thompson research group ceo. thank you. >> thank you. coming up some top stocks to watch ahead of the opening bell on wall street and we'll talk about key tech stories with ande munster in just a moment. don't go anywhere. "squawk box" returns after this.

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welcome back to "squawk box." a little more than half an hour to the opening bell on wall street. jeffery cowen joins us now with a look at some premarket movers. >> intel, right here, they're popping this morning, up a bit higher right now. this follows alternative asset manager apollo reportedly making an offer to invest billions in the chip maker. that offer could be as much as $5 billion. it also comes as qualcomm is floating a takeover of the company, according to reports. shares of all three kpaepz on the move this morning. intel up just about 1% right now. apollo down just about 0.33%. we are also looking at shares of

astrazeneca. this follows a disappointing result after a phase 3 clinical trial. it met scanners for a progression-free survival but did not a achieve significant statistical benefit. and keurig dr pepper shares are popping in the premarket after a big upgrade from citi, up just about 1.5%. the rating was moved to a buy. the price target moved to about $38. the coffee business, which is just about a quarter of sales, appears to be in an uptrend. citi citing flat growth last quarter following a more than 4% decline in the previous five quarters. again, shares of keurig dr pepper up just about 1.5%. >> thanks, frank. tech in focus in week. the nasdaq just posting back-to-back positive weeks. apple's iphone 16 just hitting

store shelves. joining us right now on all things tech, gene munster, deepwater asset managing partner. let's start there on intel. what do you make of a potential transaction, either with a qualcomm or an investment by apollo? >> andrew, i think something is likely, given the reality is that despite intel's difficulties, their revenue is going to be down for three consecutive years. despite that, i still believe that the tech industry has a different view than what investors think about this a.i. investment phase. investors are kind of on this belief that we're in a bubble, we're hyperanalyzing every little data point to try to identify when the beginning of the end is, but when you think about what's going on, on the chip side, and setting aside intel's product decisions they have made, they have a great infrastructure that ultimately can be redirected to help build what will be, ultimately, something that is bigger than

the internet over the next decade. and so, i think that this makes a ton of sense, whether it's qualcomm or ultimately whether it's an investment from apollo, the $5 billion reported compares to a $100 billion market cap, so it's a relatively small amount. you need about $20 billion per fab, so that's just a starter, but i think it underscores that there is value at intel and the reason of course is this bigger a.i. infrastructure. i want to highlight another point. this disconnect between how investors are thinking about this, the sense we're in a bubble, versus what the tech industry is. over the weekend, "the journal" reported that the uae is considering making some significant investments in fabs from tsm and also potentially from samsung, about $100 billion investment, and so this belief that, again, that nvidia's business is going to significantly decelerate in 2026, that's the investors' belief, but i'm telling you,

these tech companies believe this is going to grow faster for longer, and i think that is ultimately a good sign for intel. >> gene, the thing that i can't understand is, has the market somehow mispriced intel? or is intel as troubled and challenged as we think it is? >> from a product perspective, it is as troubled and challenged. they simply just don't have the products that the customers want, and so i mean, it's shifted to what's happened with nvidia and some of their, obviously, what's going on with their gpus, but from -- but again, they have this core infrastructure that i think is really valuable. so, they've got it right, down 54% year to date. nvidia is up 140%. i mean, a remarkable, the -- the break here. but again, it comes down to revenue growth. intel is down for three consecutive years. nvidia is going to be up 250% over the past year. i mean, their revenue growth. so, the market's got it right, but i think the piece that the

market struggles with is the ability to look forward beyond one or two years. so, they've got it right again given the context of the business and their products over the past year, but i think the piece that they miss is this concept that they actually have a core infrastructure that is valuable, specifically around their fabs. >> gene, the other piece of this, though, is what happens to all of the subsidies that have been committed to intel? in many cases,they've been committed to intel but, by the way, they haven't even been given over yet. if you had an acquirer in qualcomm or apollo or some other kind of form factor, do you think those issues change? what does that have to do with the value of the whole enterprise? >> for all of this to work, you really need those subsidies and i think one of the pieces you asked about, kind of the struggles, and has the market gotten it right? the market has given intel some chances but they haven't fulfilled on those. ultimately, need this plan that they have of kind of building

out these fabs to be more successful. to get there, they need the subsidies, the $5 billion versus the $20 billion that it's taking to build a fab today. so, yes, they need the investment. who knows what the status of that, from a government perspective is? but those subsidies are going to be critical to apollo or qualcomm to doing this deal. >> all right. and then i wanted to ask you just about apple because those phones did come out on friday. there's been a lot of excitement over the weekend about it. but of we also have this question about when apple intelligence, which is their a.i. features, become available, whether that gets you two or three or four bites at the apple over this coming year and somehow the cycle looks different. what do you think at this point? >> so, we're kind of calling a weekend, don't have a ton of data points over the weekend to date, but ultimately, you i thi that, again, the substance of this cycle is going to start early in next year when these apple intelligence features come

out. the reviews that have been relatively muted over the past few days, really, you can throw them out because this is a software update, and we don't have the apple intelligence. i'm still a believer that this is much more than a feature. this is a paradigm shift. this is more akin to the shift from the keyboard to the touch screen, which turned your phone into a computer in your pocket. i think that is ultimately what a.i. can do. i'm a believer, andrew. i think the iphone can grow 15%-ish in fiscal '25. >> finally, johnny ive saying that he is in business, confirming he's in business with openai and sam altman and creating a new phone and a whole new form factor that would use generative a.i. does that pose a threat to you, or do you think that's pie in the sky? >> it's a threat. when johnny is involved in something, undoubtedly, cupertino is taking eyes on this because obviously, his design

piece is a great part about why consumers do what they do. openai is the leader, 200 million weekly active users, and i think that when you think about the competitive landscape when it comes to apple, the only true threat they have is a jonny ive-openai combination. that combination has some substance to it. >> gene munster, always good to see you. thank you. and another reminder, tomorrow, at 8:30 eastern time. billionaire hedge fund manager john paulson will join us for his first tv interview on "squawk box" ever. i don't think he's been with us. we're also going to talk markets, the economy, can 2024 election and so much more. >> last week, when -- i don't think you were right with it, but were you with us when you were -- have you used a huawei phone? a samsung or an android? >> yes. >> are you an iphone snob?

i'm an iphone snob. is it just because of the ecosystem, or should i try those other phones? >> the samsung is pretty cool. it is pretty cool. having said that, i'm an apple. i got the whole ecosome. i find it easier to use, but samsung is pretty cool. the pixel is cool. it's got a better camera, by the way, than the iphone. >> never tried it. john paulson tomorrow. make sure you join us. "squawk on the street" coming up right now. ♪ good monday morning. welcome to "squawk on the street," i'm carl quintanilla with david faber, sara eisen. cramer has the morning off. premarket is mixed coming off friday's record dow close and back-to-back positive weeks for the nasdaq. lots of fed speak and macro the next few days, including pce, ten-year, 3.76%. our road map begins with a big week ahead for investors. 16 fed speakers and a barrage of data, including gdp on deck.