prime minister. and hurricane helene slams the gulf coast. it's friday, september 27th, 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. and here we are. it's friday. >> do i need a jacket? do i need a jacket? >> you look fine. andrew, you look great. >> okay. i didn't bring one. i didn't know. no one told me. >> i didn't bring one either. it is friday. the u.s. equity futures are mixed this hour. dow futures up 15. nasdaq down 30.

s&p is relatively flat. the s&p did set, yet, another new high yesterday. i think it's the 30th of the year. i remember in the last week or so, it was 29. unless we hit another one, we are looking at 30. 5,745 is where we stand from the close yesterday. also check out treasury yields this morning. the two-year at 3.62. the ten-year at 3.78. we have breaking news from japan overnight. shigeru ishiba is set to become the next prime minister. he is expected to be formally approved as prime minister on october 1st. ishiba has endorsed the bank policy of stead ri ily raising interest rates. his opponent in the space supported ultra low rates. the results came in after the nikkei closed higher by more than 2%, but nikkei futures fell

sharply after those results, you can see, down 2.5%. of course, yesterday, we spoke with david tepper, and saying he was positive on china, but he steered clear of japan. he would go to europe and invest there before he would go to japan because of the yen related issues and what happens if it appreciates. the yen reversed itsdollar. that plays into what he was talking about. >> right. let's talk about chinese markets closing out their best week in nearly 16 years after the government announced a slate of stimulus measures for the economy there and the markets. the mainland cpsi 300 up 15.7%. the shanghai composite up 12%. the hang seng closing higher by 13% for the week.

today's gains coming despite industrial profit data for august that plunged 17.8% year over year. the statistic bureau stating it is the large jump. one of the gainers is bernard ar arnault. investors believe the stimulus would revive the appetite for luxury goods. we talked to him during the olympics. one issue is the slowdown in china and people were going to japan to buy products. he had fallen down the list of some of the wealthiest people in the world and is now climbing that ladder back up again. >> he was the wealthiest at one point. i wonder if it puts him back. >> it was a switcheroo.

larry ellison started to move up and the china issue pushed some of this down. >> yeah. >> just think about that. >> everything tepper talked about yesterday. >> you are arnault and you are at dinner and your wife goes you're in a good mood. yeah. how did we do today, honey? 17 billion in a day? >> 17%. >> i think it was 17 billion, didn't you? >> okay. underneath. our deck underneath said jump 17%. maybe it's both. >> that would never happen to us. >> maybe it's both. >> you're young, andrew. you're in a good mood. on the "squawk planner," key inflation data. we get the latest read on

personal spending and data. the core pce. the economists expect a gain of .2% on a monthly basis and 2.7% year over year. i don't know if we could get an interesting surprise one way or the other. we can always hope. >> why? you want higher inflation? >> no, we can always hope for a surprise one way or the other so it is something interesting and not exactly what we're thinking. >> burn, burn, burn. >> i would like -- it would be interesting if, you know, this whole notion that one side of their mandate is settled and they're only worried on the other side. >> that's what we hear from jamie dimon and others. cautious individuals out there who say let's see what's outs there. not that they're declaring this is going to happen, but jamie dimon's point is the entire market is betting this is resolved and the inflation is resolved and moving on.

now to keep bringing up david tepper, but it was an interesting interview. he said the fed will have to continue to raise rates twice more. he thinks 50 basis points more this year because they're going to lose credibility if they don't having gone that far out on a limb. he is betting what happens, you will see a couple of cuts from the fed. now to trump media after the lock-up period expired for insider sales last week. one group disclosed it is going to dump its stake. united atlantic ventures or uav sold 11 million shares in the company according to the regulatory filing. uav is the partnership of former "apprentice" contestants which pitched the idea of the social media company to former president trump and he co-founded it with him in 2020. since then, they had a falling

out and embroiled in the trump media shares over the sale of 100 shares. the price range during the sale period indicated they would receive between 128 and $170 million. they're wives are probably happy, too. wouldn't you think? go ahead. >> what did you say, joe? >> i said they probably had a pretty good day, too. people ended up with 128 -- not as happy as bernard. let's talk about this deal. we'll see who's happy when this is over. directv in advanced talks to acquire rival dish. it could create one of the country's largest pay tv distributors after decades of 23 failed attempts to combine. the shift from pay tv to streaming could make this path

on easier this time. the deal could be finalized by early as monday. dish is part of charlie's echo star. it is interesting. guys, we talk about anti-trust and markets and market sizes and all sorts of things. this is something they were talking about years ago and say you need to look toward the future and the world would change. they knew it, but the regulators didn't. here we are. >> it is funny. i was thinking the same thing driving in this morning, andrew. to be going after those companies and this must get an easy pass, but the grocery stores that can't team up. the regulators are behind in terms of where the market is on all of the issues. look for the big profit margins and you have a better idea where anti-competitive behavior. not just because you have big profit margins means that, but getting killed and we're going to slow things down.

i had the same thought this morning coming in to the show. let's talk about what's happening in the gulf of mexico and the states all around that. the eye of the hurricane helene made landfall as a category 4 storm last night at 11:30 p.m. eastern time. it took appliplace in the big b region. sustained winds were 140 miles an hour. the level of the winds is not that it is twice as hard as 70-mile-an-hour winds, which go up exponentially. you are talking about brute force that can do a lot of damage. the storm weakened to a category 1 storm as it mocved across georgia overnight. the national hurricane center said people should continue to shelter and stay away from windows in georgia. they are calling it a life-threatening situation. two people killed in georgia and one in florida. watching this last night, the

storm surge was unbelievable. i stayed up until 10:30 watching the video across all of the places with this. the veracity of the storm and the damage it will do and the number of people's lives impacted is still something to be watching closely as it is expected to have pretty strong winds and gusts up into states far north from the gulf. >> it is sad when anyone loses their lives. when you lead with that headline -- >> it's not daylight there yet. the good news is people got out of the way. >> it doesn't sound like hundreds. >> i think people took this seriously. >> it was the headline yesterday. >> people took this seriously and got out of the way. >> i have property in georgia and getting tons of updates, but it's on the other side. whatever is left of it. it's always -- you always worry.

flooding can damage property. >> that's the stuff that you have to watch out for, too, and why so many people got out of the way. coming up, we'll talk about china stocks to consider after david tepper's call to buy everything in china. "squawk box" will be right back. ♪

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stocks in asia extending gains overnight and on our show yesterday, hopefully, we saw billionaire investor david tepper discussed the reason for his buy everything china moment. >> so the question was was china going to do the things you want them to do. are they going to do the easing measures that you want them to do? yeah, they came the other stay and what's his name? pan, and i apologize because i can't speak english well. he came out and he was like,

jo jovial. whoa. jovial saying we're going to cut and give you more. he'll said we do more and more if needed. now the chinese to say we'll do more and more if needed, they don't say that because it's not been healthy to say those sort of things in china. they said that the other night. i listened carefully what government officials had to say. they did a lot. they exceeded expectations and promised to do more and more. >> for more on the jchina bet, e have the senior portfolio manager on the team at newnew newburger. you knew this? >> we are long, joe, but slightly underweight on china because we don't own the cyclical stuff. i heard david tepper's comments.

it gave china more breathing room. you saw the pboc act and now people are waiting for the trifecta with the fiscal stimulus that is yet to come. we have to see that manifest its way out. it put a floor in terms of the stock market which we know china is massively underperformed. there is value opportunities here for china. this is not an overnight flip the switch, if you will, on the economic basis. i want to put that out there that we have nominal growth which is slowing down and especially when they look at real growth which has been an issue for china in particular when you come to next year. you look at the export segments that have done well, but the base effects start to be tricky into next year. i believe there is a bit of panic here and more needed and concerted effort by the chinese

authorities that you haven't seen for a long time which is giving impetus to the market at the moment. >> you need to see it in the underlining fundamentals of the entire country. you need to see some of the actions, that's the point. conrad, listening to tepper yesterday, reminded me of new year's. the sun's moving, not the sun moving, we're actually moving. he did that yesterday. he went china and japan and asia and europe and finally ended in the united states where he didn't seem that quite as enthralled with the valuations. what is your ranking of where to invest in emerging markets around the world right now? >> when i look at globally, you

need china to start to pull through. otherwise, literally it is one engine driving on the other. it is the u.s. driving that rally in the u.s. here is the other market. valuations just like the u.s. are at the high end of history. that's another market that is really compounding and worth investing for the next five or ten years. with china with the deflationar ydeflationary forces and that starts to improve, as much as people are underweight or don't own china or exclude china, for a lot of the cyclical elements globally, china needs to get its act together. once you see that deflation forces start to he ebate, that good news for the cyclical

markets where we have been hostage to the fed right now. there's a lot of real rates in the emerging markets. i feel vm has been a dead asset class. that seems to be turning at the moment and i feel with the fed cut, that gives a little bit more stimulus to emerging markets. china is the deep end of the valuation spectrum which you are starting to see get re-priced now with the local policy support. you need to see the consumer confidence come back to china with the stock market which is quicker to implement. more importantly, the property market. that still needs to turn around in particular with support for the private sector which is super important for china right now. >> did you hear his comments on japan as well, conrad? do you agree with that? do you avoid japan? >> japan is not an emerging

market. i've done this for 30 years. i have done japan as well. you will see a sea change with japan with the corporates getting profitable. it helps with the activism coming out there. a there are great businesses in japan. you are starting to get more shareholder friendly. that is what are you seeing on the internet side. they are generating tons of cash flow and paying it back to us. shareholder return is getting very important in china importantly, that is happening in japan. guess what? korea is taking notice with the value program. that is good news for us as a shareholder and you are seeing the return come back and japan is very much in that as it peaked in the late '80s and the valuation is supported and a lining interest coming through.

>> conrad, thanks for that. we will watch china today. one thing to announce you will do things and another thing for all those things to work. >> it will take time, joe, but you put it to the market. >> got it. thanks. see ya'. >> thank you. when we come back, israeli prime minister benjamin netanyahu is set to address the odn. tay. we will talk to keir simmons next. and we will talk to energy expert dan yergin. "squawk box" will be right back. thanks! thanks! voya provides tools that help you make the right investment and benefit choices so you can reach today's financial goals. that one! and look forward, to a more confident future. that is one dynamic duo. voya, well planned, well invested, well protected.

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welcome back, everybody.

world leaders gathering at the u.n. this new york this week and no shortage of big headlines coming out of this. keir simmons has been covering it all for nbc news. he joins us on set. >> good morning. >> this is big with legitimate major news every hour. >> i think it is to do with we're in election season and the two wars happening right now. bebe netanyahu flies in today to address the u.n. general assembly. thousands arrested on the streets and you have the palestinian president abbas given a standing ovation with his speech. you have to see many americans asking that question how important is it you have protests for the israel leadering and standing ovation for abbas, who does not have the

power to do anything about the situation in israel right now. i think for the united nations, one aspect is it really is a litmus test for public opinion and international opinion and that is where the leaders are struggling. as benjamin netanyahu arrives, there is this back and forth, this stop and start, over whether the biden administration got the israelis to agree to a 21-day cease-fire or did they not. there's disagreement with that. demonstrations and disagreement. >> do you think we'll hear that today at the meeting or the speech he is giving today or is it later with antony blinken? >> i think the meeting with antony blinken is more important than the speech. what we'll hear from the speech from the israeli prime minister say consistently for the past

days is that they are, in his words, determined to ensure around 60,000 israelis are able to return to their homes on the northern border with lebanon and they will carry on pounding. just overnight, more, more missiles and artillery on southern lebanon targeting hezbollah. they will carry on doing that until they get what they want. the question is can you use an air campaign to achieve that or will there need to be a ground invasion? >> the question we keep asking here is what is the likelihood this expands beyond the region and draws in iran -- >> right. >> and the response from the world. >> absolutely. you know, the gulf states, uae, saudis, bahrain, qatar, they are desperately hoping they can get back to some stability where they can -- that's what they need for their economy and

ambitions for their economies. you're right. there are -- it's very, very del delicate. very tricky. look at jordan for example. enormous palestinian population there. what are the risks with their location caught between israel and iran? >> and taking any refugees that come across as they have for years. >> this is just one aspects of this week. we have the ukraine challenge. >> zelenskyy, former president trump talking about how he is meeting with zelenskyy this morning here in new york. >> right. >> that's been a hot-button issue to be in the middle of the election where democrats were on one side and some republicans have taken the opposite stance. >> yeah. listen, when you talk to republican lawmakers, they have expressed frustration over a sustained period that they have

felt, many of them, that the ukrainian leadership has kind of leaned toward the biden administration. inevitably, i guess you could say, that's where they get $61 billion of funding from. it's been authorized by congress, but it's the biden administration that has led that, but there are those back in ukraine in the zelenskyy government who are questioning how things went this week and how president zelenskyy managed to appear to fall out with president trump and jd vance. why he gave that interview to "the new yorker" and described jd vance as extreme. the ukrainians over many years have tried to walk a line with the american politics despite the complaints by republicans and they fell off -- they fell off that balance. >> it's weird how political it is all is. you could almost say that the

support for israel, you maybe question some of the biden administration withholding weapons and you think trump and vance are ready to get 100% behind israel and not necessarily ukraine. >> right. >> even there, you could see a disparity between the way things are viewed. i, myself, wonder what the end game is and in ukraine, i have no idea. are we anticipating a total victory for ukraine at some point? what does it look like? >> yeah. >> and then you've heard, you know, even though i don't think they said at the time, but lloyd austin said we want to see a degradation of the russian army through what happens with ukraine. that is not what was stated as the objective of why we were doing this either. it is almost like it is somewhat nuanced the way they do things. >> right. even with a war, perceptions are

important. the way things are sold. >> you have to get the hearts and minds. >> right. i think we forget that the ukrainians have had huge victories just holding off the russians in the early stages and getting back a large amount of that big chunk of territory in donbas. that was a big victory. to them, historians will look back and ask whether the ukrainians were right to kind of put out there their idea of what they want to achieve. their victory would be to get all of the territory back. i think they would argue, how do you continue to motivate -- how do you continue to motivate our people if we aren't telling them we can get this. yeah. again, the -- this war has changed so much when you think it is not possible anymore to fly from europe to russia. the impact on the russian

economy and autocracy is like russia. it is important to keep that in mind as we -- as zelenskyy says, we move to the final chapter of all this. >> keir, it's great to have you here. >> is it irish or scottish in your case? another gentleman named keir. >> prime minister. >> do you know? >> my mom was irish and it's sco scottish. >> i'm looking at it. it's a single syllbl name. >> do you believe me when i say that? i want to see if the accent gets me over the line. >> i told you f, if you move ov here, you can become an actor immediately.

use the voice and people will say he's fantastic. >> the keir that andrew spoke to this week is more important. >> to some people. >> yeah. >> slightly. >> you're very important to us. >> bless you. >> keir simmons. >> it's a pleasure. >> andrew. thanks. we'll talk about the other keir had in just a moment. whe when we come back, openai's sam altman following the reports of a shift to a for-profit model. lots of discussion about what that would mean as we head to break here with a look at yesterday's s&p 500 winners and losers.

welcome back to "squawk box." now for an update on sam altman from openai. he held an all-hands meeting denying the equity stake in the company. the board has discussed whether

it would be beneficial to the company to compensate altman, but no specific figures on the table. that follows the story yesterday that the company is restructuring to a for-profit business. sepa separately, the ceo looked to send a letter to investors saying they are in a strong position despite losing the top talent. the funding round under way would close next week. sources say openai would raise $65 billion at the valuation of $150 billion. you know, i know sam has been very public saying he's made a lot of money already. doesn't need more money. this venture started, as you know, as a not-for-profit and no expectations it would be nothing more than a research project. that's how it began. now given the profit mode, it is not profit mode, but frankly, the amount of money this thing

requires to work, but also now the valuation. you like to think maybe he gets equity. other people like elon musk and others would say he shouldn't get anything. it's an interesting one. >> and the number is going to be very interesting to see just how big it is. >> if he is that key and it's worth that much, i can't see you wouldn't expect to have a share of what that thing's worth. >> the other part is the investors are all saying we want him aligned with the business in some way. by the way, maybe you don't give him money up front, but do a back-end deal for the next decade. >> do the elon deal where you end up with 3$300 billion and o the way to the first trillion on air. and when we come back, we have the interview with the uk prime minister, the heotr keir,

in this case, keir starmer, with his pitch to the business community here in new york. next, the prime minister of the uk after this. >> announcer: executive edge is sponsored by at&t business. next level moments need the next level network. logy off but all you did was plug it in, you didn't do anything neither did you exactly exactly exactly exactly impressed? honestly, a little exactly (slurp) (vo) a law partner rediscovers her grandmother's artistry and establishes a charitable trust to keep the craft alive for generations to come. from preserving a cultural tradition to leaving a legacy,

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welcome back to "squawk box." while attending the united nations general assembly, keir starmer meet with executives including bank of america's ceo brian moynihan and jpmorgan chase and harvey schwartz and blackstone vice president jonathan gray. i sat down with the prime minister in the exclusive interview and started out by asking him to explain his pitch

to the business community especially since he is known and part of the labour party. >> the last few years was chaotic and unstable and it felt like the last government lost control of the economy. and that, to my mind, put investors off because i had long discussions with investors and saying you have brilliant universities and incredible skills and incredible environment for investing. why are you not investing? they said to me it's about stability and it's about certainty. that's why we had a big breakfast this morning with a number of leading businesses here in the u.s. and for me to be able to say we turned a page and this is a new chapter and stability is our number one priority was music to their ears. they started talking about this

being a sort of golden opportunity to invest in the uk. they were keen to hear from us about our priorities. for me to say for the incoming labour government just three months in, the number one priority is economic growth, wealth creation was something that i think encouraged them. of course, blackstone today have $10 billion investment in the uk in the northeast. so, this is very much a new chapter for investment in the uk. >> how much of what you plan to do about a growth economy -- how do you balance that against a perception that you are labour party and what that means in terms of working with labour? >> the first thing to say is you now have, we now have a labour government whose number one

priority is wealth creation. i said that at the roundtable. of course, we want good public services. of course, we want the national health service to work well. the only way that will happen is if we grow the economy and have wealth creation. we're a labour party that is proud to say we are pro-business as much as pro-worker. >> let me ask you this issue of pro-balance and pro-growth and pro-labour and growth. it was in the run-up to the election and they appreciate stability and growth agenda, but a coming package on employee rights which many companies fear will tilt the balance too far toward the workers is a key test. what do you think about that? >> we have the discussion on the rights we want to put in place

for those that work. we have to get the balance right. we've had a long consultation exercise with business. most of what we are proposing is good businesses are already doing. i'll tell you why because good businesses know if you want to drive up your productivity, then actually treating your work force with respect and giving them the security they deserve is important. we're introducing, this legislation, one, of course, to make surepeople have the respect and protection they need, but, two, actually as an economic growth agenda and our productivity will go up as a result of this package. i have to say that most businesses are very pleased to have a stable government and they're very pleased to hear us say we have a national wealth fund and an industrial strategy that we're really clear about the skills agenda going forward and we're going to be inviting and get are more investment in to build the economy we need.

>> okay. >> as we mentioned, that conversation this week, the uk inked a deal with blackstone to build the largest data center in europe. i asked the prime minister how that deal came about. >> the decision to press go was just taken which is because of the confidence that blackstone have in this new administration and this new government. so, we're working with them to make sure the environment is right for that investment. it will require us to fast track what we need to do on planning and skills, et cetera. that's something that we're very happy to fast track because across the board we need to do that. it's a big signal of confidence, if you like, in this new government. a big signal of confidence in the uk as the place to invest. that was a big investment. it was in the northeast of uk.

i don't want to put london and southeast down. london is a powerhouse for our economy and i don't want to do anything that takes away from that, but i want to see growth elsewhere in the country. >> if there are three big industries to attract to the uk, what would they be? >> renewables is hugely important. >> they will play a role in the data center as well. >> they will play a role. data and a.i. in its own right and under pinning and other sectors, you know, life sciences, for example, is something we are strong in. i don't want to pick winners. certainly, we are going to power through the renewal of energy. we've got huge potential in the uk. we want that investment in there. we want to go at pace with that relationship. that gives us lower energy prices and security and next generation of jobs. >> guys, we have a lot more of that conversation, including what's going on in the middle

east. very controversial what he and some of the folks in the uk have done. a big battle. netanyahu, of course, is now in new york and has been critical of the uk. we'll also talk about the relationship with the u.s. he met with former president trump last night. we will we'll also talk wealth taxes and so many other issues. but i want to bring to your attention, i don't know if you saw this, there is already a new controversy brewing in the past 24 hours, which is that in the fall, this october, the prime minister is holding a tech conference for tech leaders, a similar conference was put on last year in the uk by rishi sunak, the former prime minister. he was in conversation a year ago with elon musk. well, who is not invited to this meeting this year? elon musk and he has been fighting back. he took to twitter and said i don't think anyone should go to the uk when they're releasing a

convicted pedophiles in order to imprison people for social media posts. this comes after the labor party released some folks from prison, in part, to try to alleviate some of the pressures on the system. at the same time they have taken some other people and there has been a whole back and forth. but, it feels oddly reminiscent of something that happened here in the u.s. just three or four years ago now with biden. if you remember, where elon musk was not invited to the white house during a meeting about evs. >> wasn't quite as blatant, andrew, but to not invite elon musk to an ev -- they had their reasons, we know why, but it is glaringly weird. and i would say almost as weird with -- if you're talking tech and the leaders of tech, i mean, even if you don't like elon or his politics, you got to hand it to him. he's just everywhere.

neuralink and spacex. >> donald trump said some pretty nice things about keir starmer yesterday and have not had a great past. he said he dined together for a couple of hours. >> two hours. >> and starmer said things in the past, like, if you get trump's endorsement, that tells you a lot about things. some are calling this a charm offensive for starmer meeting with everybody. >> we'll show you a little bit of that and more of this conversation in just a little bit. "squawk box" returning in just a moment. it's time to grow your business.

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it is just about 7:00 a.m. now on the east coast. you're watching "squawk box" on cnbc. i'm andrew ross sorkin with joe kernen and becky quick. this morning, a lot going on this friday morning, among the top stories to tell you about, wall street counting down the release of the latest consumer inflation data, the first since the 50 basis point cut by the fed last week. august pc prices expected to ease from a year ago with core prices expected to hold steady near 2.6% year over year. directv and dish in merger talks. one of the nation's largest pay tv providers. "the wall street journal" reporting a deal that could be announced as soon as monday and includes digital streaming brand sling tv. and dell is telling its global sales teams that those who are able to work from home should do so. five days a week, according to a memo seen by reuters. working remotely should be the exception rather than the

routine. sales teams are previously required to work from the office or in the field with clients three days a week. meantime, mortgage rates dipping now to a two-year low this week and that is giving potential home buyers more spending power. what to do with the prices. joining us now with more on the demand in the real estate market, robert reffkin, founder and ceo of compass. good morning to you, robert. it has been a tough year or two in terms of -- maybe more than that now, three. but how much is this really impacting things and how do you see it going over the next 12 months? >> yeah, andrew, we have a very unique perspective. we're the largest brokerage firm by sole volume in the country. we have 35,000 agents in contract listings, up 20% year over year. so we definitely see the lower mortgage rates are bringing the buyers back. >> and in terms of as you go around the country, is there certain cities where this is

making a material difference? and how much of a difference have you seen even the last month? >> well, it started about two and a half weeks ago, right after labor day. we didn't see much activity over the summer, when mortgage rates were coming down. but at this level, i think that buyers are definitely much more active than they were before. particularly see the activity in the tech hubs. little less activity in the south, a little less activityin florida. but overall, there are more open houses. we have open house traffic up 18% year over year. >> i will say, just anecdotally speaking, i was surprised driving through a bunch of towns in north jersey that had for sale signs where there was no inventory before. the weird thing is if you look at what is happening to the ten-year, the ten-year yield has been rising since the fed cut rates. the two-year that got under control, the ten-year has been rising. and mortgage rates are based off

of that. what is the rate that is really important and do you anticipate that rates will continue to come down? >> the dream rate is 5.999. if we have 5.999, that headline for a few months would -- >> 6 point what? >> 6.21. still the lowest it has been in over 18 months and consumers react more to the change in the mortgage rate than the absolute rate itself. remember, last year's 8.2, so buyers now know not to take 6.2 for granted. >> robert, is your sense -- let me ask you this, are more of your buyers taking 30-year fixed mortgages, 15-year fixed, doing ten years, doing seven years, are they doing arms, five year, what's going on? >> 30 year is the most prevalent. the biggest trend over the last year is the percentage of all cash buyers. we have more all cash buyers in the luxury market than at any point in the last ten years.

>> and how much of that, though, do you think is -- these are not first time -- not first time buyers, and how many people are selling their property to buy the next? >> so, the issue that we have had over the last two years is the lock-in effect. 75% of homeowners were locked into 4% mortgage rates or below. about 2 1/2 years ago. now approaching 50%. so the issue should be gone in the next two years for all intents and purposes. but that has prevented people from selling because they -- they value that low rate so much. and that's why if you get to 5.99, 4 to 5.99, that's not as much of a big deal compared to last fall. >> and, you know, buyers, sellers never want to take a loss. but given this interesting sort of mortgage dynamic, when people are trying to move, maybe trying to move for a new job, and i think that's also this lock in

effect, prevent some of that, is that easing up a little bit and has the psychology changed around that? >> well, the context of the market right now is the lowest level of transactions in -- since 1995. for now, two years in a row. 4 million homes sold. last year, i believe 4 million again this year. lowest levels since 1995 and the population is 26% bigger today than it was back then. we are seeing more inventory, inventory up 23% year over year. i expect it to continue to grow as mortgage rates come down, the lock in effect winds down. but we still have 25% less inventory than we did this time in 2019 in the prepandemic period. >> robert reffkin, the founder and ceo of compass, i always love talking to you because i always remember when you first came on the broadcast, a long, long time ago, far before this company was ever public, i think you had just -- he used to be

the chief of staff to gary cohn at goldman sachs many moons ago. great to see your success. thanks. >> great to see you. let's look at the futures this morning. right now, things are relatively flat. you got the dow up by a few points. the s&p down by a few points. the nasdaq off by 30. but it has been a heck of a week. let's get over to dom chu, he's got a look at this morning's premarket movers and what is happening beneath the surface. yesterday, another high for the s&p 500, dom. >> yeah, i mean, it has been interesting market dynamic right now. even with all of the earnings reports that we have seen and everything else developing with the market and, of course, the economic data coming out later on this morning. but let's start things off on our morning movers with one key analyst note that is getting some attention this morning. and that's hp inc. shares are lower, down by maybe a couple of percent, after bank of america downgraded that stock to a buy to a neutral. the firm estimates any eps growth will come solely from share buybacks and potential upside from those pc sales will

be offset by lower printer margins. hp inc. down a couple of percent on that particular note. meanwhile, bristle myers squibb, shares up by 6% or so, 5.5% after the food and drug administration approved the highly anticipated schizophrenia drug. this is the first new type of treatment for the chronic mental disorder in more than seven decades. the twice daily pill will be sold under the name cobenfe and is expected to be available in late october. those shares gaining on that particular bit of news. we'll end with a check on trump media and technology. that stock was down just about a half a percent now. one of the company's major shareholders cut nearly its entire stake in the company, in a regulatory filing. 11 million shares were sold. that move, uav was run by one of the co-founders of djt.

something to keep an eye on. back over to you guys. >> thank you. we'll check in with you in a little bit. coming up, a closer look at this week's decline of nearly 6% in crude proices. dan yergin is going to join us straight ahead. then later, senator cynthia lummis talks crypto regulation, taxes and much more. "squawk box" coming right back. (woman) look i got the new iphone 16 pro at verizon. apple intelligence is pret-ty awesome. (man) nice. (woman) you can get it when you trade in any phone. (man) whoa, whoa, whoa! ♪ (vo) at verizon new and existing customers can get iphone 16 pro on us.

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joining us now for a closer look at the number -- >> the 42nd. i was thinking it was the 30th. 42nd all time closing high. >> it would be like 200. >> trading days? >> yeah. how many trading days have we had since then. >> alesha is here. i'll give her a chance to adjust her s&p target. she is head of investment strategy and equities at bny. and you're at 5700. >> we are. >> but you expect the market to move higher. >> yes. >> you know it is at 5745. >> i do know that. i do know that. >> okay. this is where you can do it. do i hear 58? >> i would expect the market to move higher to the end of the year. i'm not going to put a price target on it. >> why not? >> we moved it three times this year already and we were pretty high coming into the year. so we have been bullish for about two years now. we got rid of our recession call by 18 months ago, raised our

earnings target for the s&p 500 and we thought we raised our year end target pretty high. we came in bullish. i'll say the resiliency of the market this year, up 20% year to date. as you said, 42 new highs of the year. i think the resiliency is the most surprising thing in the market. you think about this year, so far, we had two hot wars that are kind of being fought to stalemate. we got houthis lobbing missiles in the red sea, we had -- we have oil down and we have a resurgence of inflationin the first quarter that, you know, caused a little bit of a bond market issue. but did not cause an issue in the equity market. here we are up 20% year to date and kind of tracking last year's up 25%. and if you look at it, it is kind of a two piece, twin piece, like it is looking pretty similar. >> you're saying i wear a toupee. didn't you think she was saying that? i'm sensitive when people say that. >> i would never say that. >> it makes me think my actual hair is so bad it looks like a

toupee. that's not good. >> you look much better in person. >> you're much fatter in -- no, they don't say that. i don't know if you saw david tepper, but one of your reasons for being so bullish, the fed cutting into a soft landing, which is a little weird, i think, in itself. that's like the fed cutting into a strong economy. i'm not sure why. but that's not here or there. you do think 240 basis points is not going to happen, even though that's baked in. but tepper, in talking about the china stimulus, you say it is bullish for equities here. he almost said it is bullish for equities there, because here we're already at 21 or 22 times earnings. he has a valuation problem, not a terrible problem, but doesn't think the u.s. is as attractive as some other places. do you go around the world, are you mostly here? >> we go around the world. it was a great interview, by the way. he's right, it is very bullish for asia, but we're allocated,

you know, overweight to u.s. large cap and if you think about the fact that the s&p is 40%, revenues from overseas, bullish for the global economy. but it puts a floor on some of the consumer stock, it puts a floor on kind of the areas of the world that we're looking kind of stagflationary. so, we think it is bullish. we don't trade. and so ultimately the emerging markets trade or the china trade is exactly that. we have taxable clients. so, you know, we take a really strategic view of where growth is. and it is in the u.s. the china investment thesis also has to rely on confidence on their capital markets and, you know, shareholder protections. >> and don't invade taiwan. >> and they don't invade taiwan. i'm not willing to make that bet. i'm willing to say it is better for developed economies globally, great for europe and it is great for asia. >> and you're not afraid of tech either because it always -- it is outperformed, how many, the

last 15 years, it only has underperformed twice. >> and one of those years it underperformed the s&p by 1%. the real year that it underperformed was 2022, exactly when you would expect because you have, you know, high -- we have 9% inflation, the fed about to come in and raise rates really high to get rid of that 9% inflation. that makes sense. if you look at the cash flow, and the margin, it is impossible to dethrone tech, even with the capex spend that we're seeing right now. so, to have a hiccup this summer because of the second quarter earnings and the capex, but it hasn't actually made a dent in the comparison between where the margins and cash flow are in the markets, the large cap tech versus everything else. >> even though it is richer than most sectors, you still think with that in mind short-term -- you still think that's the place to be. >> we're still there. it is definitely rich. not all of the companies are

rich, but it is rich for a reason. and i think there is a new regime here of -- i hate saying it is different this time. if you look progressively each decade of where the cash flow is coming from, it is really located in these companies. so that's what we like. the stimulus, the fed cutting, the china stimulus, and oil, you know, having reached $65 a barrel two weeks ago is also bullish for cyclicals. we're seeing financials look great, cyclicals look great. industrials are holding in there. we think it is going to be something of a meltup situation here. >> one more chance, raise your s&p, 5700, we're at 5745. you're already behind. you're bullish. do i hear 58? 577? >> i'll talk to my clients first and come back. >> that's nice. >> you're not going to find out. can i just say, i did the math on this. so, 185 1/2 trading days.

252 total. we have done 185. there has been 42 new highs, now for the s&p 500, that means 22.6% of the trading days. >> so you need to figure out, if you're up 20% in september, is that more or less than normal? that sounds about right for -- >> september has been unusually strong after that last week. >> october. >> we have october. it will be interesting and it is an election year, it is time to get some volatility, kind of reset a little bit. we think we rally right into the end of the year here. >> wow. >> thanks, alesha. >> thank you. >> okay. coming up next, here on "squawk box," oil prices sliding this week on expectations of higher supplies. dan yergin will join us next when "squawk box" returns after this. >> announcer: time now for today's aflac trivia question. what u.s.-based company employs the most people globally? the answer when "squawk box" returns. good thing i had aflac. (aflac duck) hmmm the cash i got from aflac helped pay for medical expenses,

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crude prices sliding this week, dipping below the $68 level as the market focuses on expectation of higher supplies coming from saudi arabia and other opec nations. joining us right now is dan yergin, s&p global vice chairman and, dan, i have to say, it is kind of stunning to see wti below $70 a barrel, when you've got all of these hot spots in the middle east and when you have china trying to do its best to stimulate demand this week. i'm shocked at the direction of oil prices. >> certainly have come down and it has been dominated by the weakness in the chinese economy. and the interest rate cuts into the liquidity are just beginning. it is amazing to see that you have this kind of geopolitical turmoil, war doesn't affect the price and there has been no disruption. still over 5 million barrels a day of shut-in capacity in the middle east. >> do you not worry about disruption yourself? >> i do. i mean, as we see this war

progress on the northern front in israel and lebanon, if it somehow enveloped iran, the gulf, there was a disruption, we would see it change quickly. i think the difference now is the oil market doesn't preemptively price in risk. it looks to see if actually there is a disruption. >> does that make sense to you? >> i think it does. that's the experience really since 2019. and i think the other big change is that you have this huge cushion called u.s. production, it wasn't there in the past. >> that adds up to a lot of pressure for the saudis probably in particular. how do they feel about oil falling below $70? >> brent hasn't fallen below $70 yet. but i think we have seen they were defending 100. that was the price the imf came up with. i think the saudis are very focused as the other producers on not having the brent price go below $70. that's why some of the statements that the saudis put out this weekend telling other people who belong to opec plus, you better comply, because

otherwise we can put more oil into the market too. >> would they do that? it is amazing to think of opec turning against itself. it always used to be opec would put pressure on u.s. and other producers. now opec is going to put pressure on itself? >> on opec plus, on the countries that are overproducing, the saudis say. we made these volunteer cuts, you're overproducing. and they're still saying that opec plus is going to start putting oil back in the market, actually, in december, but i think that will be very much governed by what is happening with market conditions. >> and not that you're a geopolitical expert, but when you look at the region, it is something you know well, it is something you've studied because it does have major impacts on prices for fossil fuels. what do you think? what do you think has held off at this point, how do you figure it out? we're asking everybody this, from u.n. guests who have been here all this week too. what -- is this different this time with the israeli conflict? >> i think it is different. gaza was a thing we were not

prepared for. they have been very prepared for conflict with hezbollah, which, after all, is the crown jewel for iran. and i think that one message that has come through is that iran itself is not ready for war, because it doesn't have the air defense systems to protect itself. and so i think that's something that is kind of holding back. there is no question, though, this is a highly dangerous situation. and it could change in a day. >> let's talk about the -- what we have seen not just with china, but with other central banks also, cutting rates to try and stimulate demand. how quickly you to think that will pick up. what kind of an impact will that have? >> i think obviously what happened in china, the thing that has dominated the market is the weakness in china, because china, half the growth has been in china and it hasn't been happening. so i think the big question is stimulus, will you see a recovery in china, or is it the shape of demand in china changed and i think that's what the market is struggling with. >> where do you put oil prices in the next six months.

>> i think it is probably -- i would say, first of all, going back to your question, it depends what happens geopolitically. we're on the edge, and if we fall over, i think otherwise oil prices stay in a kind of above a $70, $70, $80 range, not the $100 that was out there when all those bullish estimates. >> okay. dan, it is great having you in studio. thank you, bye-bye. coming up, the east coast and gulfports move more than $2 billion of goods a day. a looming strike could drop an anchor on the supply chain. we're counting down to august pce, in just over an hour. an important number for the fed. don't know if it is going to be interesting today. we'll see. we're hoping it will be. we'll be right back.

welcome back to "squawk box." the contract between union long shoremen and east gulf coast port operators expiring october 1st. opening the door for a strike that would impact over $2 billion in daily trade, could have an inflationary effect, and frank holland joins us now with more from bayone, new jersey.

good morning. >> logistics and air freight stocks are outperforming as we approach the deadline. the association says they'll strike if the port operators, usmx, do not offer what they want when it comes to compensation and restrictions on port automation. here behind me, we have the port of new york and new jersey, it is one of those eastern gulf ports where you see more than $2 billion in goods move every single day. we also spoke with a major freight forwarder on the asia, the u.s. lane. they told me the companies can still get imports and exports out of this port and other gulf ports maybe for another day, but then after that, they say it is going to be a race to find alternative routes. >> if you got goods from europe you need for the holiday season, you're going to want to look at alternatives. maybe come through canada, the canadian gateway, maybe come from a port on the east coast, there are a couple of small ports that fall into that category. you have air freight as an

option. >> and i spoke to a number of companies, they say creating alternative routes can be very expensive. sometimes almost twice as expensive. there is also expected to be a big cost to the u.s. economy. today i spoke with the president of the national association of manufacturers on worldwide exchange, their data shows two-thirds of exports and more than half of import containers, they come through the eastern gulfports. companies, workers and consumers will be deeply impacted by a strike. >> pharmaceuticals, one of the biggest exports as well as the products that are needed to be part of that pharmaceutical supply chain. autos, if we, you know, if this happens, and our ability to export our products, our auto products, that harms workers in the auto industry as well. >> so overall, really broad impacts through the areas expected to be most impacted, auto, pharmaceutical and aerospace. so there is one kind of looming question in all of this, what

would a strike mean for the holiday season. well, it is estimated that more than 80% of holiday goods have already been brought into the u.s. compared to 70% that you would see in a normal year. the question comes down to how much do we all buy this holiday season. and if retailers and other companies have to bring in more. so, again, a looming question there. >> frank, so, what are retailers doing to prepare for all of this. how much is it costing them to get ahead of it, if you will. and i should also say i'm surprised that 80% of the merchandise is already here. why is that different than before? >> some of it, andrew, was pulled forward because companies were aware that the negotiations between the ila and usmx were breaking down a bit. there were reports about that going all the way back to june. you have to remember, we had a number of supply chain shocks in recent years. we had the pandemic, we had trade war, we had some labor disruptions on the west coast ports. so companies in general have shifted a lot of their inventory strategy, maybe not holding as

much, but bringing in it in a little bit sooner. >> okay. frank holland, thank you for that report. appreciate it. mark your calendar for next week. coming up, the rise in chip stocks, plus, more of my interview with uk prime minister keir starmer who is pursuing ggri'sments from ameca biest banks. we'll talk about wealth taxes, the middle east, meeting with former president trump, and so much more. right after this. it's something you build over time. american anncr: that's twenty-one missed cuts in a row. (car trunk slammed shut) for eighty-nine years, morgan stanley has offered clients determination and forward thinking to create the future... crowd: stop it! ...only you can see. american anncr: rose, back in the winner's circle. (crowd cheers) (♪♪)

global chip stocks moving higher this week. micron sparked a big rally after it said first quarter revenue would top expectations. you saw it play out yesterday across the markets. joining us to talk about this is the head of technology research at milius research. ben, let's go through this. i know micron is not in your world of coverage. what micron said had huge implications for a lot of other stocks. what does this tell us about the rest of the tech sector? >> the data center is really strong. and they make a very important component of memory called hbm, high bandwidth memory, that is very important for a.i. and that's gangbusters. that's great. there was some concerns that they maybe were seeing increased

competition, more folks getting into that market and whether they could absorb it and it looks like it is all systems go. and pcs, though, and smartphones are a little choppy. but they also said some good things about that inventory clearing up next year. so, you know, that was bullish, but we think that the data center and stuff that nvidia is doing is really the one that keeps shining. >> if there is not increased competition, that's great news for micron. you can say the same thing about nvidia, they have increased competition. it is not necessarily good for a lot of the customers of those companies, it means they'll be paying a lot for those chips, the ones they can get a hold of. how do you game that out. is it all of this is fine because a.i. is so important and there is going to be so much investment in it? >> it depends on the component and the workload and what not. there is many things people use these chips for. but in the a.i. world, nvidia just has the technology, the cadence that people can rely on. they have the software, the time

to revenue with nvidia is the best in the business. 19 days to revenue, basically. you know what you're getting and you can set it up and go. for a.i., nvidia is the best game in town, really for enterprises and most of the clouds. but some of the companies are doing their own chips, and so we watched that really careful by. and then on the d-ram and high bandwidth memory side, there is a different cast of characters. but it is good to see the data center demand really ripping and we're starting to see green chutes and servers too, just regular servers and storage. so, those markets could really pick up now. >> you have a lot of buy ratings, but you had a few hold ratings in your coverage world at this point. intel maybe self-explanatory. cisco and google, why google, maybe, in particular? >> well, a lot of people feel compelled to put a buy on google. we didn't, we couldn't figure out search. we couldn't figure out what the

government is going to do and couldn't figure out how a.i. was going to impact it. and some of the things we're seeing in google is that a.i.-infused search demotes some of the things they proeviously got paid for. a.i. infused search was hurting the revenue, but they thought it was good for the long-term. i don't love that comment. so i think a lot of folks are looking at google as a black box, not really sure. it is cheap for a reason. we have said we would like to see a management that cares a little bit more about their stock price. >> meaning what? cut back on spending in other areas? >> cut back on spending, be serious. one quarter seems like they're cutting. they crushed operating margins. next quarter they're not so serious, they're going to do some hiring. they really just -- you hear from them once a quarter. and it is not consistent. and you're not really sure what's going on there. plus, with regard to a.i., we're

not sure if they're a winner or challenged. and there is going to be search could change. a lot of folks think it won't. it could change and so, you know, it is cheap, and we don't really -- it is a bit of a black box. when microsoft cares about shareholders, they got a consistent share buyback plan, they got a consistent message, they're accelerating in the cloud, and you know what you're going to get. much more reoccurring revenue. there is a lot of competition out there for companies putting up numbers. >> so let me run through your buys. ibm, apple, microsoft, oracle, amd, nvidia, of all of these, ariftia networks, broadcom is on there, dell. which is your favorite. >> a lot of them have run, a lot of them have crushed. we pick our spots a little bit. nvidia is -- i know it is a consensus long. we have been on it for a long time. but the signs are getting out of

asia and the signs into next year and the year after are still really good. so, you know, occasionally you have folks on the show. this is a bubble. but when you do the bottoms up research, you're just, like, oh, my god, like, it is coming. >> numbers are there. >> the numbers are there. it is only -- p to growth is 1. it is amazing. people go, the margins, they can't say and you do the work. and you're, like, it is going to be in the mid-70s and it is compelling. yeah. i think you got to buy that one right now. >> ben, thank you. coming up, uk prime minister keir starmer on hipuuit s rsfor america's banks to do business overseas. we're coming right back. help make trading feel effortless. and its customizable scans with social sentiment help you find and unlock opportunities in the market. e*trade from morgan stanley

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welcome back to "squawk

box." this morning, uk prime minister keir starmer pursuing investments from america's biggest banks and tech giants while here in new york for the u.n. general assembly. i sat down with the prime minister and asked him to explain the pitch to the business community. >> you now have, we now have a labor government whose number one priority is wealth creation. now that -- i sat down with the business roundtable this morning, it is counterintuitive. they don't expect a labor government to say that -- of course we want good public services. of course we want the nhs, the national health service to work well. the only way that will happen is if we grow the economy and have wealth. that is where the labor party, that is proud to say that we are pro business, just as much as we're pro worker. >> the prime minister starmer expected to lay out his budget

plan next month. he pledged to not increase income or corporate taxes. i asked him, though, about how he thinks about a wealth tax. >> tax has to be fair. and as a broad proposition those that have got broader shoulders do understand a bigger burden of the tax share. we got to make sure that we don't inhibit the growth in the taxes that we put in place. so that is important in the balance. and what the businesses and investors here were saying to me this morning is that is this opportunity, obviously tax is important in relation to that, but they want to see the other issues alongside it. >> the other issues are the regulatory environment. you have an alphabet soup of regulatory agencies and a lot of people look at that, and say, just -- it is too much of a burden. is there something that you're going to do? >> yes. it is very important. because i have with my

discussions with the -- told me the inhibitors of investment over and above the instability that we have touched on. and they say to me, planning. it takes too long to build things in the united kingdom. we're reforming the planning rules. we already started on that. they say that the national grid, the way we move energy around the country is too slow, so we're going to fix that, but they also say in relation to regulation there is too much inconsistency. there is too many agencies that are regulating. and they're not aligned. and we will get to grips with that. >> this is from oxford economics. they say almost two-thirds of wealthy investors said they plan to leave the uk within two years or shortly if the labor government moves ahead with plans to get rid of the nondomiciled tax concessions. 67% said they would not have immigrated to britain in the first place if this were to take place. how should we think about that? >> we quite often read these

stories and then you dig under them and they're not quite as alarming as they first seem. we will get the balance right. but we are going to change the rules on -- because we have to make sure that we got the tax yield available to take the steps that we need in relation to our public services. we will take the steps. we will take them in a calculated, careful, balanced way. but i think some of the storsto, they're always alarmist, sometimes a picture sold helps when looking at those stories. >> and, guys, the story of growth versus labor, and workers, if you will, came to a head in a way this week because earlier this week there was a symbolic vote in the uk, starmer's labor party rejected his plan to cut payments that offset winter fuel costs for pensioners. and that has raised some new questions about what this policy

and program will mean. i asked him about how the business community should think about the resistance from inside his own party. >> we inherited an economy which was badly damaged in the uk because of the chopping and changing and the bad decisions of the last government. we found that 22 billion pounds was unaccounted for in year and therefore we took the decision to address that this year, not to ignore it, not to walk past it, but to address it. but the purpose in addressing it is to stabilize the economy. and so everything that we are doing, when i say wealth creation, economic growth is our number one priority, that means every decision is taken against that yardstick. does it help economic growth? my strong view is that economic stability is the foundation for economic growth, and therefore we will stabilize the economy. that means tough decisions. nobody wants to deal -- nobody

wants to change the winter fuel allowance for pensioners, but by doing that, we stabilize the economy, for pensioners it means we can commit to what we call the triple lock, they get more money year on year. but i think for investors to point of your question, what they can see is a government that is >> bring you more of our exclusive interview with the uk prime minister in the next hour including thoughts on our election here in the u.s., and what's happening in the middle east right now, becky. >> andrew, not something you hear from either of the candidates we have running here. just in terms of saying, yes. we are going to cut back in some areas. it's not popular but this has to be done. kind of avoided this go-round. >> we'll see whether he's able to pull it off. i have to say, i got a lot of calls actually yesterday talking to some ceos before i did that interview who were with him and impressed with his approach. whether he can keep his party on side to continue to pursue this

approach, that's probably a big, a 22 billion pound question, in the case of the uk, i guess. when we come back, wyoming republican senator cynthia lummis will join us to talk crypto, taxes and much more. "squawk box" will be right back. live in darkness and shame. they're shunned, outcast, living in pain. you can reach out and change the life of a suffering child right now. a surgery that take as little as forty five minutes and your act of love can change a child's life forever. please call, scan or go online to give a new smile. thousands of children are waiting. you'll find them in cities, towns and suburbs all across america. millions of americans who have medicare and medicaid but may be missing benefits they could really use. extra benefits they

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this field will not long persist without investor protection or consumer protection. number two, many of these projects without prejudging any one are tapping into the public's interest to raise money. raise money. that's the classic securities sort of protections that you put in place. >> right. >> you can decide to go long or short, these projects, but you need the disclosures. >> that was s.e.c. chair gary gensler yesterday talking about a need for crypto regulations. joining us, republican senator from wyoming cynthia lummis, proponent of digital

legislation. good to have you in-studio, start, but i still think people that are proponents of crypto have to feel good about what's happened in the last six months or year? even though legislation is still not here? >> yeah. we still continue to work for a digital framework here in the united states. >> senator, we dropped your mic. pick that up so we can hear what you're saying. >> the european union's ahead of us. they began to regulate very effectively in january of 2023. so we're behind the eight ball here, and the united states should never let other countries get ahead of us with regard to financial services. >> watching how it's played out has been odd, right? it involves the gentleman we just played a sound bite from, that's chair gensler, and almost dragged, kicking and screaming after court decisions and then etfs et cetera, where i thought

yesterday, seemed a little bit less hostile to bitcoin and maybe some of the top tier -- >> the way he explained it yesterday, is that this will not thrive until it's heavily regulated. not heavily regulated, he didn't say. won't thrive unless regulations are set up and the path is clear. you would probably agree. the disconnect on who gets to regulate it and what the rules will be? >> absolutely. congress needs to regulate this and weigh in. some of the problem has been that the s.e.c. has said, well, we have all the tools we need to regulate it, but the way they've applied them has brought about court cases, instead of regulating by making clear rules of the road for the industry. they're regulating by enforcement action, and so when they bring enforcement actions with penalties against the industry, and it doesn't have a clear understanding of what it's done wrong -- >> in the fall position, is that there are bad actors?

>> exactly. >> there are. >> we're a lot worse actors. >> he comes on and always seems to conflate the firms that are bad actors maybe offshore and dealing with it, but complains the digital assets themselves with the bad actors kind of bucket shops that aren't even located here, but it's -- that's like not liking, i don't know, nasdaq stocks, because they used to be pink sheets all the time. >> exactly. you can commit fraud with art, yachts, coins, minerals. it's not the asset itself that's fraudulent. >> has he conflated the two? >> in some instances, yes, i do. yeah. >> andrew? oh -- >> sorry. >> okay. >> thought he was waving. >> maybe just waving. hey, andrew. >> that's my bad. my bad. >> oh, he is! there. >> there! >> he wants to stay on no matter

what, no matter what happens in the presidential election. talking about chair gensler. did you see that? what do you may of that? he loves the job. >> i don't think that's going to happen. especially, of course, if donald trump is -- >> you don't think it would happen under a kamala harris? >> i don't. gary gensler's view of trying to keep control of so much general assetscharacterizing them as securities and all the companies that deal with them as securities doesn't recognize adequately that bitcoin's a commodity. ethereum is a commodity and perhaps other digital assets are. we need to have a clear definition how we test available to us and as it's updated there may be others beside bitcoin and ethereum that would qualify for the jurisdiction of the commodity the trading

commission. >> the rub on that, the cftc would have a lighter touch, because it doesn't have as many employees who can be doing the oversight on these things. what do you say back to that? >> one of the things senator gillibrand and i proposed is that the watch sale rule be changed to provide adequate funding to have enough personnel to adequately regulate. >> switching gears. about a minute left. now at least according to consensus, it's that the senate goes republican but the house perhaps goes democrat, and a lot of people are hanging their entire investing future on that, because of divided government. they don't want either presidential candidate and are hanging their hat on divided government. which is nice? right? for investments it's better if

congress and the white house doesn't do anything. that's always a better default position than when the government gets involved, which is odd. do you think that's what's going to happen? >> it's certainly not true it's going to be better for digital assets. i think what's going to be better for digital assets is if the senate is republican. that's a definite truth, because tim scott will chair the banking committee, and he's much more interested in seeing a statutory framework for digital assets than is the current chairman sherrod brown. it would be very important, and it's important for artificial intelligence that ted cruz become chairman of commerce. he's proven that he's a high-quality legislator and not just a high-quality communicator. he's the full meal deal. >> can you give me your wild card picks for what might surprise people in the senate race? what would be -- i guess montana goes, right?

>> i think we're going to win mont montana. i think republicans will win majority in the senate. >> where else? besides montana? what about ohio? >> we're going to win ohio i believe. >> you think so? >> i do. >> where do you think you're going to lose? >> where do we think we're going to lose? >> she won't tell you. don't say that. >> i think hang on to all incumbents. it's still -- it's still 50/50 in neff vada and arizona. we have a shot in michigan. as you know, maryland is up for grabs, which would be -- >> pennsylvania. >> pennsylvania, definitely up for grabs. these races are within the margin of error right now. all of them. the ones that are starting to break out a little bit are montana and of course, west virginia. >> whatever happens, david tepper said yesterday, doesn't care long as it's split. doesn't want control of congress

also the same party that wins controlling of the white house thinking each party has extreme ideas. >> margins are so -- >> trump in -- >> doesn't want to see all three go to the same party. >> well, i might agree with him if there were bigger margins in the house, but regardless who wins the house, it's going to about squeaker for either party. >> nothing's going get ss done the house again? >> very few centrists in both parties, but they're going to be the controlling factor. regardless whether it's democrat or republican. >> senator, thank you very much. give me your wallet -- we don't pay guests i'll send you a little bitcoin for coming on. no. i kid. >> campaign contribution -- no. i can't. >> do not joke about that. >> bitcoin -- >> think you were real, aquaman. >> oh, no. of course not. >> i accept bitcoin.

contributions. >> we can't give contributions unfortunately. >> senator, thank you. >> you might be -- can't do it. >> thanks. fun to be with you. it is 8:00 a.m. on the east coast you're watching "squawk box" right here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. cut it out. cut it out. cut it out. the futures this morning now in the green. dow futures up by about. points. s&p up by 4, nasdaq up by 15. more on the markets we get to mike santoli. what a week it's been. continuing to see new highs sets. >> yeah, becky. two dtrading days left in the scary month of september. s&p hanging on. a little less than 1%. pushed to 42nd i believe record high for the year. really since june 30th. done it without the principle help of things like the magnificent seven stocks and

semiconductors. really about most of the other names. getting us through these two pull barqs we've had so far this quarter. i would say we're pretty well priced for a soft landing-type snar scenario. leadership suggests a decent landing. and almost two years since the bull market began in october of 2022. maintained leadership position. you see stocks semiconductor etf faltered a little. yesterday a bounce. choppy. hit or miss within that sector yesterday, of course, micron working. nvidia couldn't ride the coattails. you see here well outperforming s&p. decent story for long-term secular growth scarcity plays. s&p versus gold over five years. gold, an amazing run. hitting new records. still trailing s&p on a five-year basis. this was the inflation shock. gold didn't help you there.

not providing much diversification. another risky asset i suppose. that's how it's behaving now, guys. >> okay. mike santoli at the new york stock exchange. thank you. a lot more coming up on "squawk box." august pce inflation data is coming. mark your clock. 8:30 eastern time. next, is a.i. a better job interviewer than your own h.r. department? you do not want to miss this. ceo of the a.i. hiring program is backing the next generation of job candidate vetting. "squawk box" returns after this.

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welcome back to "squawk box," everybody. futures this morning are a

little high other. dow futures up why about 43 points. nasdaq up 18. s&p futures up by 5. shares of super micro tumbling 12% in yesterday's session after reports say the justice department opened a probe into the company after a hindenburg research disclosing a short position in the company late august saying it identified evidence of accounting manipulation. following that report super micro said it would not file its annual report on time. sending shares tumbling by nearly 20%. the "wall street journal" now reports a prosecutor in the u.s. attorneys office in san francisco asked for information about former employee accused them of accounting violations. we got to the watch shares of southwest, they're on track for gains of about 3% for the week. the company raised its current quarter revenue forecasts also authorized $2.5 billion worth of

share buybacks and also announced several changes to its business model as it attempts to fend off the activists elliott management. meantime, talked about this before the break. a.i. hiring platform backed by investors iran colluding jack dorsey, peter thiel, larry summers, trying to fix some flaws in the hires process including reducing human bias. first on cnbc company the co-founder and ceo, brendan foody. benchmark general partner, great to see you both. brendan, explain this. right before the break i teased this i said is it possible a.i. can do, can hire people better than a human can? >> yeah. so thanks so much for having us on and i think it certainly is.

and the premise there's a legacy services industry where people will manually review resumes, manually conduct interviews and manually mount people with roles. all of these processes can be done far more effectively with our lens. update the resume, read through work experiences, projects and papers written and ask dynamic follow-up questions with a model that can predict what jobs they'll perform well at and match them with opportunities. >> so this is really more of a matching platform rather than -- i mean, can an employer use this directly, though? >> exactly. yeah. also we facilitate all hiring compliance payrom associated with this. people come to us. say they want to hire a software engineer or lawyer for a particular job they need to do and then they can press a button and hire that person immediately with confidence in how they'll perform on the job.

>> and, bill, you know, people don't love h.r. departments. they don't. hate to say that. i love our h.r. department. what do you think happens to h.r. departments in this succeeds? >> i think you have this situation in every single functional area of a company right now where we're trying to figure out where a.i. can add to value and do things -- arguably better than a human. i don't know that anyone out there loves extended interview processes, those tend to touch multiple people in organization well beyond h.r. if we have the ability to accelerate that to lower the error rate where you hire people that don't work out, those things are super powerful. i think the big thing all the venture capitals are trying to figure out, where does a.i. have the ability to have the highest impact right out of the gate, and when we came upon brendan

and mercor what they were doing, got super excited and believe they're one of those type companies. >> now, when you look at this investment, for example. i think a big question for all investors now given just how a.i. is moving so fast. how do you think about the moat around brendan's business and around other a.i. businesses, because at some point if, for example, openai is what's powering part of this becomes so powerful and so successful, won't it be able to actually re-create all of these companies? >> well, i think that's a great question, and you probably know that i spent majority of my career seeking out companies that were two-sided marketplaces and had network effects where the -- the more time you have in market, the more customers you have better the product gets. i might turn it over to brendan to explain exactly how that happens inside of mercor. one of the reasons i'm here today and reasons brendan and i

hit it off so much is precisely because of the question you're asking. >> of course. obvious network associated with a marketplace. we have people that will join the platform as candidates, taking interviews and looking for jobs and companies hiring on the other side, but perhaps even more interestingly as we're collecting data on every bonus an employer issues, every raise they'll give to someone. reasons they'll dismiss someone from a job and training models how people will perform on they are nix opportunity. we know people at top labs well and bet the models will be incredibly capable but not able to solve the problem effectively predicting human performance. with enough data and usage data flywheel we'll be able to build the best model in the world to predict human ability. >> therefore, where do you get the data from? >> it's from our, all-in

platform. because we're the ones processing all of the payouts and billing to customers and candidates, we're able to see who's getting raises for what reasons, dismissed for what reasons. it's useful to customers on an individual level. they want to make better predictions who's going to perform well on the kinds of opportunities that they have so that we can set them up for success. that's one of the most powerful parts of the platform. >> dare i ask, do you worry, or maybe an opportunity to sell to them eventually a work day or a company, a ripple or somebody like that, clearly lots of employer and employment data? >> yes. a great question. i'm constantly amazed how slows those company, moving and it's clear that nonetheless we should still be thoughtful about it. i see it manifesting itself largely through partnerships and

collaborations with them. but at the end of the day i think whoever builds shipping, great technology, extremely quickly. they're going to win the market, and i really believe we can do that. >> bill, as you know, so many in the valley, discussed it earlier, trying to figure out where the opportunity lies in a.i. specifically on the software end. i think we understand the hardware side of it, at least chips in that respect. but when you look at businesses, how much of it is the data piece? here's a marketplace where two-sided sort of social effect, but how much of it is folks who have proprietary data they can marry to an owepenai, for examp? >> if you have a problem deterministic, in some ways the pulse-up driving is that way, you can use traditional a.i. models allowing them to run

competitions with each other and get to really amazing places. a lot of the business process problems aren't that way. i think the question then becomes, how can llms be most effective and things that evolve language? you know, i'm really excited by the new voice products in openai. i think that voice could become a new frontier, and you have to really get into the market with these sluolutions, see where th have an impact fast. customer service is one of those, we believe strongly, that interviewing and h.r. recruiting can be one of those, and i think that's what the whole world is starting to figure out. we're seeing green sheets, because these companies have revenue already. we know it's working. >> while i have you what do you think about this idea openai's valuation, $150 billion? talk turning it from not for profit for a for-profit entity with a not for profit unit,

perhaps and all sorts of speculation what's going on inside that company? you what do you make of it all? >> one of the things i thought was temporary related zerk the amount of money flown around in private markets. interest rates are higher now, that money continues to flow i no longer believe that was the catalyst. we may be in a permanent world of having lots and lots of money in the late-stage private market and the people making these decisions are relatively intelligent and i think they come to believe once a company gets a breakout lead that there's a high probability that's going to continue. so you've got a company grown from theoretically zero to $5 billion in record time, and willing to extrapolate that further into the future. and i keep seeing investors come on cnbc saying this is the biggest wave of their lifetime. it's not surprising to me that a bunch of people are backing up the truck in that situation.

>> if we're -- had this conversation a decade from now will they all be very happy about that decision? >> super hard to tell at this point in time. you know? i've never seen -- a situation where the mag seven is all-in. not in the mobile way did ten, five leading companies commit $50 billion in capex each year. that's never happened. we have the fortune 500 cios i bet 90% have a.i. projects. and, you know, all the vcs, 90% of investments are in this area. everyone's convinced it's the biggest wave they've ever seen. we're going to run massive amounts of experimentation, because people will spend against it all the problems that may arise will get solved because many of attacking it. i think there will be waves. always has been. pc boom had that.

internet correction had it. some of that, especially heavy capex but no one's slowing down right now. >> as i said at the beginning, legendary silicon valley venture capitalist and brendan, congratulations on the business. fascinating. i might have to hire some people. mabel we'll try it. appreciate it. coming up, got the pce inflation data right at 8:30. bring you the numbers. get reaction then from former fed vice chairman roger ayrguson, coming up. st tuned. st tuned. "squawk box" will be right back. who gets married someplace more expensive? my other daughter. cancun! jamaica!! why can't they use my backyard!! with empower, we get all of our financial questions answered. so we don't have to worry. can we get out of here? i thought you'd never ask. join 18 million americans

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seeks to help investors achieve better after-tax outcomes. pgim investments. shaping tomorrow, today welcome back to "squawk box." this morning uk prime minister keir starmer pursuing investments in tech giants and for the ungeneral assembly met

with jpmorgan and others. i sat down with him and asked to talk about his big pitch to the business community. >> you know have, we now have, a labor government who's number one priority is wealth creation. now, that, i said that at the business roundtable this morning. it's counter intuitive. they don't expect a labor government to say it is the number one problem but it is. of course we want good public service and services to work well. the only way that will happen if we grow the economy. so that is, we're a labor party that is proud to say we are pro-business as much as we're pro-worker. >> meantime, geopolitics you might imagine front and center. uk blocked some a.r.m.s exports to israel and benjamin netanyahu coming to new york saying sends a horrible message. i asked why starmer says

benjamin netanyahu, he believes is wrong? >> i sport israel's self-defense. what happened 7th of october the most appalling terror attack, the worst loss of lives since the holocaust. that went very deep and we have been very much in support of israel's right positive self-defense within international law. our domestic legislation is very clear about the conditions in which we can allow this to go ahead. reviewed that and came to a clear decision. having found a decision thought they should be suspended. not one side. i was going to implement it. perfectly reasonable to say we support israel's right to defense as with any country in the world, within the context of international law. >> do you then say the u.s. is breaking international law by

continuing to provide arms to israel? >> no, no. we talked to our u.s. colleagues about this. talked before our decision. i was there with president biden just two weeks ago. but it's a different regime. it's a different legal test in the u.s. so this isn't -- comparable, it's not a criticism. it's simply we have our own tests in the uk applied that test and the result is we've suspended -- a small number of licences. the u.s. has a slightly different approach and they've taken a different approach. >> do you think that's the right approach? if it's not your approach? >> no, no. we passed our own legislation a and, and are bound for our own legislation and not a criticism of the u.s. we work very close with the u.s., we are close allies a special relationship a long time politically but at the moment, volatility in the middle east and in ukraine, then the way in

which we're working together with the u.s. i they is as close as its ever been and why i extended the session with president biden a couple weeks ago in washington to talk through these difficult issues, to test our approaches with each other. >> as relates to ukraine, zelenskyy is asking the u.s. for more arms you know. >> yes. >> do you think the u.s. should give them and should have given them already? >> i'm not going to comment on what the u.s. should or shouldn't be doing. they've been a key ally, key supporter of ukraine. the nato summit here that was hosted in the u.s. was a very powerful statement of nato allies in support of ukraine. president zelenskyy was happy with the outcome. of course we listen carefully to with requesting with ukraine and discuss with allies you would expect. we have to be clear that russian

aggression cannot succeed. that is why the resolve is there to support ukraine for as long as is necessary. we always listen to what they say about additional capability. >> last night the prime minister met with former president trump in new york city and the two had never met face-to-face. i asked starmer about his interest in meeting both trump and vice president harris in this final stretch of the presidential race. >> the american people decide who they want as their president. we in the uk would of course work with whoever the president is. we've got a special relationship politically, with which sits above the particular office in either country. it's the american people that decide who they want at president. we will work with whoever is chosen. >> and what i say to respectful way about americans, i don't think you realize the rest of the world is watching because we've got skin in the game.

what happens in america is the metronome that sets the beat of what happens across the globe. sets the beat for our other politicians behave in an election campaign. what do you think of that? >> well, look, the mayor of london is entitled to his views. he's a friend of mine. i've known him best part of 25 years. but i'm the prime minister of the united kingdom. i understand the special relationship, and it is for the american people to decide who they want as their president, and we will work with whoever is the person cheosen by the u.s. >> and how do you think the rest of the world perceives this president's race in the u.s.? >> a very close, important election. i think all of us are watching intensely. >> that was uk prime minister keir starmer. we have data coming up, becky. turn back to you.

>> thanks. we are just seconds away from that august pce inflation data. very important number for the fed. watching the futures ahead of that we picked up ground through the course of the morning. dow up by 60 points. s&p up by 6. nasdaq up by 24. rick santelli is standing by at the cme group and, rick, again, pretty important number. >> yes. the fed's favorite inflation numbers, of course, all embedded in the august personal income and spending report. on in fact side, looking at a number that should be in the vicinity up 0.4. actual number a bit less. up 0.2 on income. go back june was up 0.2. finding a smaller month over month increase going all the way back to october last year up 0.1. now, look at the spending side. it's closer to expectations, but still on the light side. expecting up 0.3. end up with up 0.2% equalling

where we were in april. all the way to january, beginning of the year, to find a smaller number in the form of 0.1. adjusted for inflation. call it real spending. that comes in snack dab where expectations were. up 0.1%. the problem is up 0.1, wrlighte since april unchanged. moneyball numbers. pce. f up 0.1. pce year over year, comes in light. 2.2. rearview mirror, 2.5. 2.2 or 2.5, all come to the same point in previous history. that is, of course, it was 1.9 in february of '21. the last several months, that's the comp. we are making progress. it's still not at 2% but certainly getting closer, but do remember these are the lowest metrics for inflation. maybe that's why they're the fed

favorite. look at core pce month over month, 0.1 lighter than expectations. up 0.1%. that equals where we were in may, and if you want to find a lower number it's all about rounding here, folks. go to november of last year. up 0.9. november '20, .08. go back to april 2020 minus .33. rounded up or down. difficult to do comps. core pce year over year expected up 2.7. this one is 0.1 hotter in the rearview mirror, 2.6. the last several months, this is going the wrong way. look at where we were in june, 2.57. told you rounding issues here. 2.62 our last look and now, of course, 2.7.

so these numbers may be core pce to some might be most important. very quickly go through other numbers on the advanced trade balance for august. i like to monitor this, because it's been a lot over the year. july minus 102.7. now 102.8. biggest negative number back to may of '22 but we've nate pro -- made progress. dropped down. wholesale inventories up 0.2. real inventories up half a 1% both numbers as expected. wow! becky, back to you. >> all right, rick. thank you very much. watching all of those things now, 377 on the ten year. steve liesman joins us right now with more reaction to this. steve, what's your takeaway? >> you know, there's going to be a time toll declare victory on inflation, this is darn close. obviously everybody wants to be a little wary. the idea that it could come

back, but i'm calculating here, becky, on the fly. warning about that. some three-month annualized rates. we're now on the core, 1.74. been below 2 the last two months now. i didn't factor in a revision for july. i don't think there is one. 1.7 on the headline three month annualized and the, down at 2.3 on the core. 6 month annualized. good numbers. what the fed wants to see. this goes along the lines of what the fed expected, even a little better. with inflation under control, i have been a little more focused on the other side, and it's the consumer spending numbers i think you want to sort of take a look at. maybe a wary look at. 0.1 on consumption. be careful with that. we're going to have a good quarter. because the beginning of the quarter was good. end of the last quarter was

good. raises the level. the way the good p map is. t gdp map is. laxed growth month of august is worth watching. whether or not the consumer is giving it up. a big revision yesterday in savings rate. raised from 3.3% to 5.2. which means the consumer is in somewhat better shape than we originally thought in terms of savings, but you want to watch the income numbers here. watch consumption numbers to see if we're have a weaker quarter in the fourth quarter, which is what many people expect. forecast time and again, it's been wrong. the idea you had a weak consumer in august is something worth watching, becky. >> steve, just a couple of points on this. first of all, inflation, these numbers look great. but i think a lot of people wonder what next? oil prices have been really tame. despite everything going on globally. the question is with the chinese

kind of boosting up demand this week, potentially, with moves they're trying to set up, and anything could potentially happen in the middle east. i think those two issues could change that number quickly. the second issue is just something tepper laid out yesterday saying the fed is signaled this is the case that it is a new paradigm we're facing at this point and are going to have to cut at least two more times this year, he thinks. to maintain credibility? >> well, i think that's right. i think it's warranted, by the way. cutting a couple more times depending how much it cuts. i've been asking every fed official i could, how much is the easy part? cut and start to worry close to the neutral rate? answers like around 100. some more dovish say 150. you could bring the rate down and not close to, worrying about necessarily, at least theoretically, re-igniting inflation. the first part of your question,

no shortage of risks out there. one thing i know the fed is watching governor bowman mentioned yesterday, strikes out there. a very interesting time. look, wages over the course of the full inflation that we're talking about beginning in 2020 have not kept pace with inflation. okay? so there needs to be catch up and how you get there is interesting here. unions have more power to do so. and they're going to use it. and it's a potential source of inflation, however, i won't this out -- unions and ports are about goods, and there's not a lot of goods inflation in the economy right now. so i'm a little less worried about that than i would be if we would see a surge in service wages right now. >> yeah. thank god those corporations stop gouging. it's weird the way they did that. they didn't, they don't -- but thank you for that. maybe consulted out on it. thank you, steve. joining us with reaction to

the inflation data, roger ferguson former fed vice chairman now a cnbc contributor. i was thinking, roger, inflation numbers look tame. let's say that the labor market, in a no signs of it cracking and call it what it is. 4%, 4.2% whatever it is. just because inflation is tame does that mandate fed cuts? or do you need to see there really might be cracks developing in the labor market? i could still make a case you don't need to rush on this where with -- with where the economy is, the stock market and even where the labor market is? >> well, first, good morning. i agree sentiment numbers are good. fed should be in position signaling cutting, because as

inflation comes down, remember we often talk about the so-called "real rate," they don't want that to rise. where they're not reducing interest rates as they say inflation coming down, because that would, in terms of interest rates, minus inflation be a tightening cycle, which they're not interested in. even if labor markets stay relatively tame i expect them to continue on the path that they've outlined, which is more cuts this year. where they end up is anyone's guess, but certainly i'm in the camp of two more cuts this year. seeing much more likely than not. >> all right. there's no question that we're in restrictive territory right now, and that, for those that would like to keep some, talk about it all the time it keep dry powder, whatever it is, keep something in reserve, doesn't seem like, you know -- it doesn't seem like we're that restrictive on a historical level, but we should still assume that there is a little

bit too much -- it's a little too tight at this point in terms of condition? >> i think that's a fair statement. to give you your due on your side of the discussion. gdp come in at roughly 3%. gdp now from the atlanta fed still roughly is 3%. that clearly seems above potential growth. for sure. you know? on your side of the discussion, yeah. unemployment while ticked up still is starting -- seems like it's more full employment than the labor market falling apart. so there are going to be arguments on both sides. end of the day i think a strong consensus to keep moving one or two more cuts this year are and should be baked in to market expectation. >> a tough -- it is the dual mandate is difficult to try to navigate. it seems to imply there's no -- no concern that inflation might

somehow come back at some point, and i don't know whether we need to worry about the middle east or -- or, you know, china. >> a lot of -- >> think about china rebounding? concerns we haven't driven the stake all the way into the heart of inflation. just seems if you got 42 record highs in the s&p this year, just seems like a weird time to be flooding the system with more cheap money? seems weird. >> no. joe, i hear you. and i agree to some is extent. the financial conditions are also not unduly tight, but inflation is coming down. i don't think it's hard to manage the dual mandate. >> i don't know if we are tight. i don't know. i don't know! you have to assume that, could go another 200 basis points. >> well, look. all the evidence is that we are

tight. to your point, we don't know how tight we are, which is why i think a series of 25-point moves seems like a reasonable thing to do and watch the incoming data. fed shown ain't to move quickly if they have to and think they've gotten it wrong. i would not dissuade them or discourage them from executing the strategy they're talking about and not support the notion keeping a little in reserve just in case. could always move back up if need be. i think better thing right now is to attempt to engineer the soft landing by allowing rates to move down from restrictive territory to something that's clearly less restrictive, though we don't know quite how much exactly. we are inrestrictive territory but certainly not at easing territory or easy territory. at these levels. >> very good. we'll leave it there. happy friday. thanks, roger. >> thank you. coming up, more news on owe i'm i' -- openai. speaking with former deputy

secretary of state wendy sherman about tensions in the middle east. we're coming right back after this.

welcome back to "squawk."

news on openai. straight to kate rooney with the latest. >> good morning. o openai sending a letter reassuring a.i. start-up is in strong position and poised to close major funding round next week, despite losing top talent this week. email to investors sent by a source cfo sarah fryer addressing departure who said wednesday leaving the company and later that day two top researchers also stepped down. fryer wanting to personally reach out following the news of the departure and emphasize, "we are in a strong position with talented leadership bench to guide ut forward." openai backed by microsoft one of the busiest start-ups out there, in the midst of closing a multibillion dollar. around $150 billion according to sources familiar with the

matter. fryer still on track to close next week saying it was over sub described. collectively remain laser focused bringing openai to everyone and building revenue models that deliver value to investors and employees. guys, openai declined to comment on that email. back to you. >> kate, what, what's the story on the sam altman equity piece of this? i think a, a lot of speculation about that even obviously in the past 24 hours? sounds like maybe -- less equity? more equity? >> we heard yesterday from sources he is set to get equity part of this funding round aligning incentives with the rest of the venture capital investors. not surprising based what we've heard about them changing corporate structure to become a benefit corporation. taylor chair of the board pushed back yesterday saying get 7% of equity saying that is categorically false and not true, but understood he still

will get some piece of equity, some compensation for this massive funding round. >> kate rooney, great to see you. thank you. a lot more coming up on "squawk box" this morning. the latest on the unrest in the middle east are as israel prime minister benjamin netanyahu gets ready to address the u.n. general assembly. coming right back after this. ♪ ♪ ♪ ♪ you'll find them in cities, towns and suburbs all across america. millions of americans who have medicare and medicaid but may be missing benefits they could really use. extra benefits they may be eligible to receive

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israeli prime minister benjamin netanyahu expected to address the u.n. general assembly today. this comes as israel and iran-backed hezbollah trade fire over the israel-lebanon border. the lebanese health ministry says hundreds have been killed this week on its side, even as the conflict in gaza still goes on. former deputy secretary of state, wendy sherman, joins us right now. she's a professor at the harvard kennedy school of business, and thank you for being with us today. ambassador, what do you think the situation on the ground is at this point? can you give us a realistic view

on how dangerous you think things are right now? >> i think we're in a very difficult point when hezbollah launched a ballistic missile towards tel aviv, it was a step further to escalate this situation. i think we know how close we are, because there's been a very, very vigorous effort at the united nations, ostensibly supported by israel, to get a 21-day ceasefire on the northern border so that, in fact, we can get to peace. i think we'll hear from the prime minister today, how he must defend israel, he must make sure that he gets the hostages back out of gaza, but i think we're going to hear very strong messages about his need to defeat terrorism, to defeat hezbollah, to defeat hamas. none of us support a terrorist organization. nonetheless, i think that it is time for diplomacy.

it is time to get to peace, and it's time for the kind of steady leadership that we've all been talking about as we approach the presidential race where we have somebody who believes he can fix it in a day and another person who is clear-eyed, tough, and ready to do the job. >> president biden spoke at the u.n. general assembly this week, too. he said, while an all-out war is possible, he's throwing everything he can, all the energy he can muster, into trying to get something done, some sort of settlement to be reached. do you think that's likely to happen by the end of his tenure? >> you know, the u.n. general assembly is really a terrific opportunity to try to do something like this, because all the leaders are there. all the diplomats are there. you can really return around the rooms and try to move forward. so, i'm going to remain hopeful that the administration, at the very least, is caught trying to do this, which they are doing,

and i'm a little surprised, because the administration's been quite clear thatthey would not have proceeded without the tacit support of the prime minister in israel. he seems to be pulling back from that. he's playing, i think, to his own audience, which is to the far-right, keeping his political coalition together, and i hope, however, that he understands there's a legacy issue here, yes, absolutely, everything he needs to do to ensure israel's security, but in my view, i think in the view of kamala harris, a two-state solution, a horizon for the palestinians is critical. otherwise, we're going to have a whole new generation that hates israel, that's going after israel's security. it is really crucial to get to peace, and unfortunately, in the middle east, that's hard to come by. >> ambassador sherman, thank you for your time today.

>> thank you coming up, what to watch in the markets on this final friday. is it? the third quarter? it really is. "squawk box" will be right back.

welcome back to "squawk box."

we are a little more than half an hour to the opening bell. joining us now, barbara reinhard is the ceo of multi-asset strategies at voi investment management. curious of what you're doing in light of the numbers we just got and maybe mr. tepper's predictions about china. >> well, look, i think the pce numbers this morning are right bang on line with what the fed's been doing. it gave them the air cover that they were able to cut interest rates last week and we think that the rally that's happened in markets, in the bond market, is actually spot on for a very good sign on cooling inflation. as far as china goes -- >> yeah. no, go ahead. >> as far as china goes, china's following the same path that the fed did last week in terms of cutting interest rates and a barrage of liquidity going into the markets. we think it's an important statement from the chinese authorities, simply because they're putting a -- drawing a line under where they think their tolerance for slowing growth is, and it's likely to continue to propel the chinese

equity market further over the course of the next few weeks for sure. >> and then the -- right, let's talk about the next few weeks. is it going to propel the market? is it already built in? that's the other question. >> they have said that they're doing this new barrage of liquidity with more to come, so we think this is likely going to be a pretty big if i recall statem -- firm statement. you're likely to see a counter-rally. remember, china's one of the most unloved, underowned, underappreciated markets. you're at single-digit multiples on earnings. no one has been invested there over the course of this entire year, so having this type of fundamental change at the margin is generally the spark of a big rally in equity, a big rally in chinese equities. >> is there a stock or two in the u.s. that benefits? >> i think the u.s. certainly does benefit. i think this liquidity pumping into the system that the fed's been doing, as well as other central banks, is likely to

continue to do two things. it means that you have front end rates falling pretty much across the world, which is definitely a boon for equities, and the second piece you also have is that the japanese yen has been relatively stable which has been another good boost for equities globally. >> barbara, thank you. >> thank you. >> i want to wish everybody a great weekend. joe, becky, we'll see you monday. make sure you join us next week. "squawk on the street" begins right now. ♪ good friday morning, welcome to "squawk on the street," i'm david faber with sara eisen and mike santoli. we are live, and we're at post nine at the new york stock exchange. carl and jim have the morning off. let's give you a look at futures as we get ready to wrap up the trading week. you can see once again we're looking for a higher open, and our road map does begin with those markets, of course, looking to set new milestones, this one day after the s&p 500 posted its 42nd record closing high.