vermontal debate, we'll show you the highlights on taxes and the economy. it's wednesday, october 2nd, 2024, and "squawk box" begins right now. ♪ good morning and welcome to "squawk box" right here on cnbc. we're live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin, and this morning you are going to see some red arrows when you check out u.s. equity futures. dow futures off by almost 180 points. a big part of that is nike, and we'll talk about that in just a little bit. the s&p futures down by 21 and the nasdaq down as well. the dow is down by 173 points. the s&p was down by 0.9%, and

the nasdaq was down by 1.5%. it was driven by some of the biggest tech names including nvidia, tesla, and apple. treasury yields this morning are unchanged from yesterday. the 10-year right now sitting at 10.76. meantime let's take a look at what's going on in the middle east. crypto falling in line with equities. gold trading and trending below its record-high. nonetheless, i don't know. i'm actually surprised things have not moved lower given the real risks that i think exist and the possible escalation that is likely to take place today. >> risk in assets. the gold is where it is. >> i've been shocked by the oil prices. >> yields should fall, you would think. crude prices, thank god the

market was supplied to where we're down in the mid-60s because there was a big jump in crude, just barely over 70 after iran lapp. ed a ballistic missile attack on israel. iran says the strike was retaliation for a couple of things, the recent killing of a hezbollah leader and an iranian commander. most of the 200 -- 200 -- a new kind never used before -- were inter1e79ed by israeli and u.s. defenses,al though some hit their targets. no deaths were reported. the u.s. military coordinated closely with the israeli defense forces to help defend israel against the actttack. joining us now colonel jack jacobs. he's an nbc news military nachlt i keep having to remind myself, colonel, without the iron dome, without the united states, without even jordan, 200

missiles. that is a huge escalation by iran of the situation. remember the last time we said, well, it was a -- kind of a measured response, worried about poking the bear, the nuclear facilities, they don't want to do that, if these had not been stopped, there would have been carnage in tell aviesh. so there's no doubt that netanyahu is justified in answering in a pretty significant way, don't you think? >> well, yes, and not only that, although it looks like the same thing that happened last april, it's decideldly different becaue of the large number of ballistic missiles that are faster than others. the large number of ballistic missiles launched at israel, the

real question is what's going to happen next. it could go one of two ways. either it will look like last april, israel will select a couple of targets, near critical areas like one of the places where iran is developing nuclear weapons and not hit that facility and hit them or israel will decide enough is enough and start hitting those facilities. an interesting story. about 40 years ago, israel had the capability of knocking out the nuclear development facilities because they were very vulnerable. a lot of it was above ground and so on. for a number of reasons, including the fact that we told israel not to do it, that i didn't do it. and now with those hardened sites, it's difficult or impossible to hit them.

we've urged restraint on israel for 40 years and restraint -- i mean the political view inside israel notwithstanding the fact that people don't like netanyahu, the view inside israel is that 40 years of restraint have gotten everybody to a much more difficult position strategically and have caused no end to problems and now it's much more difficult to corral iran, a terribly maligned influence in the middle east. so it remains to be seen what happens next. it could go either way. >> lindsey graham said immediately the and to refine oil needs to be at least considered, but i'm wondering, so the nuclear sites are hardened. does that mean that israel does not have the capacity to take them out, colonel? are you sure that that's not going to be on the docket?

>> i'm sure it is on the docket. it's one of the options. and they can take them out. there's a variety of weapons they can use to destroy them, but whether or not they're going to use them is something else again. you know, iran -- an attack on the oil facilities is one thing. an attack on others is something else again angds iran would probably react differently. >> okay. let's talk about them, what the reaction would be to that. play out -- i hate to say play the war game out, but if you were to go after the nuclear facilities, and i think there are a lot of folks thinking that may be the next step in all of this, what does iran do and how does it do differently than it did yesterday? >> well, we have to start off with the assumption that despite the fact that iran is much stronger than it was 40 years ago, it does not yet have nuclear weapons, and it has internal problems it doesn't want to have to deal with while it's dealing with a war with

israel and a larger war with israel and does not want a larger war with israel, but they've got a lot of face to save, which is one reason why they launched all those missiles. one of iran's reactions could be an enormous number of missiles, most of them ballistic missiles, which might be -- we'll go back to the original suggestion. the subject we talked about, can israel, can the iron dome with the united states and jordan and other allies, can they thwart an enormous attack, ballistic missile attack on israel, and the answer is they won't be able to thwart it, and a lot of that stuff is going to get through, and that will change the c calculus immeasurably in the region. >> colonel, just trying to figure out what that means ultimately. even though israel might be able to take out those facilities, they're never going to be able

to do it unless they're actually taking out the facilities because they have nuclear weapons that would be targeted and aimed at them at that point because otherwise the retaliation factor is too high? >> yeah, that's probably the calculus and they won't do it. they can do what they did last april, but what is really on the table now and is more likely is an attack on oil facilities. one of the things iran can't do now because of the things that israel has done because of its intelligence is coordinate an attack by all of its proxies in the region, and the united states is prepared to and has already done so, attacked the houthis when they restrict traffic through the gulf and so on. that's one of the reasons why we recently moved thousands of new assets into the region, most of them air assets. sea-launched air assets and ground launched seats, and we now have 40,000 people in the

region to do exactly that. >> colonel, if iran was careful last time because of, you know, not wanting to put the nuclear facilities -- to give israel an excuse to do that, when they decided to do that yesterday,dyed they say all bets are off, or is it just a game of chicken? this is a significantly more aggressive move on israel. did they have to know that that may have been enough to cause israel to say we have cause to do this? do they know? >> i think the calculus there was we've got to respond, otherwise we lose tremendous face. we've got to demonstrate to israel that we're serious. >> you're suggesting that somehow yesterday was performative then. >> if they didn't have the iron dome, it would have been a helluva lot more performative.

iran can pretend, oh, we knew they would take them all-out and we weren't going to hold anyone? we fired just the right amount so the iron dome would hold up? >> no, i don't think they're that smart. i think what they did is include a large number of bliss it is missiles, largely in part to see if the iron dome could deal with it, which it did. but a very large number of coordinated assault would be totally different. but, no, it's partially a test. they're going to see the results of the test because they want to see what is israel going to do about that. they included a large number of ballistic numbers as a test. >> i don't know why they couldn't say we've got to do it eventually. >> if these things are hardened, you're saying we have -- if israel -- and you think the u.s. and others have the means to do it -- >> we won't be involved. >> -- this ma i be the time to

do it. it's ottawa all will i fascinating. >> woe say we won't be involved. we'll defend, but no offense. we can't be involved in taking the facilities out. >> we told iran not to retaliate and we promised to back up the idea. >> i don't know if you read the article from jared kushner. this was basically once once-in-a-lifetime moments. hef was basically saying you can't be calling for cease-fires. if you're ever going to take this all-out and change the middle east, this is it. >> the middle east -- if they do get the bomb -- >> i'm curious what you think of that. >> well, like i said, they could have done it, and we could have assisted 40 years ago. have urnged restraint for decades, and israel's view is this is what restraint has gotten us, and we're still calling for restraint, and at the end of the day, israel is

saying, we don't care what you have to say. we're going to do what we need to do. striking oil -- striking the border, striking the oil facilities, the most likely result, but we'll see. >> all right. can i ask one other question because, yes, it's true this administration and others in the world have called for restraint, and yet the truth is we have continued to supply them with protection and defenses and coordination and all sorts of things, and so there is this question mark about whether these governments are saying one thing effectively to the public to say restraint, restraint, restrajt, but, knowyou know, netanyahu is going to do what netanyahu wants. they may actually love it. what do you think about that? >> international relations, particularly with use of the military has always been like that. we've supplied and assisted a wide variety of regimes with lots of weaponry and guidance.

i was in vietnam for a long time as an adviser telling the vietnamese at a tactical level what to do and how to act. the united states was telling the vietnamese what to do and how to act for the ten years we were there and they did what they wanted in any place despite the fact we were supplying them. we're not going to stop supplying israel. >> how much can iran count on russia? iran was -- maybe that was a stupid move. they're tied up, aren't they? iran can't count on russia, can they? >> no. russia can't even count on russia. russia hasn't changed in a thousand years and continues to make stupid choices and will continue to make stupid choices. no, they can't count on russia. >> it seems like everything changed on october 7th. it's going to be a year. yesterday seems like it was a

quantum escalation in things. thanks. colonel jack jacobs. >> you bet. coming up after the break, we're going to show you some highlights from last night's vice president ial showdown. it was more of a conversation of sorts. it's on the tax and economy. plus, nike shares are falling after it drew its full year guincdae. i'm surprised everybody is surprised. you put a new ceo in the company and what do you get? kitschle sink. that's what happens. "squawk box" returns after this. when it comes to investing, we live in uncertain times. some assets can evaporate at the click of a button. others can deflate with a single policy change.

savvy investors know that gold has stood the test of time as a reliable real asset. so how do you invest in gold? sandstorm gold royalties is a publicly traded company offering a diversified portfolio of mining royalties in one simple investment. learn more about a brighter way to invest in gold at sandstormgold.com.

craig here pays too much for verizon wireless. lea so he sublet half his realy estate office to a pet shop. there's a smarter way to save. comcast business mobile. you could save up to an incredible 70% on your wireless bill. so you don't have to compromise. powering smarter savings. powering possibilities. switch to comcast busines internet and mobie and find out how to get te latest 5g phone on s with a qualifying trade-i. don't wait! call, click or visit an xfinity store today.

\ now to last night's vice presidential debate between jd vance and tim walz. they actually kept things cordial and actually said they could work with each other, but they repeatedly attacked each other's running mates, and here are a few key moments related to the economy. >> donald trump made a promise, and i'll give you this. he kept it. he kept the folks at mar-a-lago and said you're rich as hell and gave them a tax cut. what happened is an $89 trillion increase in the national debt. the largest ever. now he's proposed a 20% con sourmgs sales tax on everything we bring in. everyone agrees including businesses it would destabilize it, increase inflation, and lead to a recession. >> you've got to play

whac-a-mole. you e you've got to pretend that trump didn't increase take-home pay, which he did. and you've the got to continuously defend kamala harris's atrocious record which has made gas, groceries, and housing unaffordable for american citizens. >> it was pretty remarkable. anyone who thought this was going to be the attack dogs going up against each other misjudged this. jd vance set the tone from the beginning and went after the lower liken't numbers going into it because he was very cordial, kept his calm and cool. >> i thought he was very likeable. he kept saying, i agree with you, tim, on this, i agree with you, timi, on that. >> jd vance performed flawlessly. it was hard to see anything he did wrong in that debate at all. >> i'm looking at social media speak for itself. i saw half of it. i'm proud. i had a glass of wine, saw half of it. >> you stayed up late?

>> really late. really late. but, yeah. i was a knucklehead. i stayed up late. >> look, i don't know how much vice presidential debates matter, but whatever happened, jd vance performed the best that he possibly could have. >> it wasn't surprising. he's been on the show. he's been battle-tested in terms of going on a lot of hostile interviews. >> it didn't surprise me he was able to handle every question. >> he's pretty swift. >> he was attacking. even on the abortion issue. >> and former president trump afterward put out on social media he would not only not support a national abortion ban but that he would veto it too. >> i mean, josh shapiro versus jd vance yesterday, i think, would have been a totally different situation. i think that was a big mistake. if it does turn out to be that way, that will be the -- what i

would say will be the fatal flaw. >> i also found -- you said you thought -- >> i thought walz. >> flawlessly. i don't know what flawlessly means. i thought that tim walz on the issues -- you know, a lot of people think he's somehow not deep or somehow like unable to answer the questions or doesn't know what's going on and people have had this conjecture made on this show and other shows, i actually thought on the merit of the questions and merits of the answer -- >> that's how you would describe the trump tax cuts? really what he said was factual about going to rich people and corporations are rich people and that's who got the tax cuts and the rest of the whole curve of people that pay taxes didn't get a tax cut in 2017? that was total crap what he said. that was the same trope -- >> you know what's funny -- >> being skillful at repeating

lies is not knowing the issues, being skillful of the populist -- he just wants tax cuts for billionaires. >> during debates you don't get deep policy. i would say walz performed very well except for the case where he couldn't answer the question on whether or not he was in tiananmen square when the revolution was. that was a big fumble. >> he didn't answer the very first question which is whether he would go after the nuclear facilities. in fact, jd vance did and said whatever israel needs to do, i'd back them 100%, whatever they need to do. you did not hear that from walz right from the beginning. i think not picking shapiro, we know why he wasn't picked, and now it's totally hitting the fan. so i think that's not great. >> i -- you know what? the intimation of why he wasn't picked -- >> why wasn't he picked? >> why wasn't he picked? i think he wasn't picked because they wanted to win michigan.

that's why they didn't pick shapiro. i think there's a movement in the democratic area they don't want to burn them away. they want to win this election in a lot of different ways that i don't think are really that admirable. >> i think there were a litany of reasons. >> i don't know. supposedly -- i don't -- u i'm not now wondering as good as jd vance was, is trump like, i don't like this guy stealing -- is trump like this guy is -- everyone is saying this is what we should have seen. you see a lot of people say that. he made a better case for trump than trump did. >> yes. >> and i think when -- >> he has a lot to say. you know, i know you think trump is like this or -- he almost starts his question -- almost starts his answers sort of acknowledging the elephant in the room about his -- >> it was sort of almost like --

what's the martial arts where you don't -- you sort of move as you -- >> jujitsu, you use your enemy's force -- >> he was very malleable, but it worked. it worked to where you don't get -- i think it works for people watching. did anyone watch? how big was this, do you think? >> not that big. i'm imagining if there's like a ratings line, it went down, not up, and not just because it got later in the night. >> i thought, fine, i'm not going to go to the moderators, but it was exactly what i figured. maybe you didn't think so. i think they all talk to each other, the mainstream media does. if david muir says great job to norah o'donnell and norah o'donnell says great job to david muir. it's like they're in the echo chambers. >> i think it's a challenging job. >> we do it too. i think we do it a lot better. hopefully we'll have a chance.

>> the media is -- >> i'm not saying they're at fault. it was three against one again. >> margaret brennan asked the question twice. she followed up -- she followed up -- >> then they muted his mic when they fact-checked the fact-checkers. but, you know. all right. when we come back, saudi's oil minister warning opec prices could drop as low as $50 a barrel. that's a day after prices surged during iran's attack on israel. i ul'talwodn cl it surging. up 2%, 3%. you can see this morning, wti up. later fundstrat's tom lee. "squawk box" will be right back. >> announcer: this cnbc program is sponsored by baird. visit bairdifference.com.

"squawk box" will be right back.

daughter: hey, dad. dad: hey, sweetheart. daughter: what are you doing? dad: i'm gonna clean the fence. daughter: it's a lot of fence. dad: you wanna help me? dad: aim at the wall, but get closer. daughter: (gasps) what the?! daughter: alright. dad: side to side. when you work with someone who knows a lot and cares even more... you can do this. ...you're unstoppable. (♪♪) wow... are you kidding me? you can do this. at truist, we believe the same is true for banking.

crude prices were up yesterday amid iran's ballistic missile attack on israel, but this morning saudi's oil ministers warning fellow opec members prices could plunge if countries don't abite by the production limits. we're talking wti. it's $72. brent is at $75.73. joining us right now is rebecca babin. rebecca, i have to say, i'm actually surprised you're not seeing prices quite a bit higher from here. when you look at iran having this complete number of, you know, hundreds of ballistic missiles falling on israel, the idf saying they're going to respond and the u.s. saying they're going to back up israel.

it doesn't get much bigger. why don't you think we haven't seen a response in the oil markets? >> yeah, i think the key to that is the responsibility that opec has on the sidelines. you hinted at it in your lead-in. mbs kmected crude call could fall to the 50s if they go after market share as opposed to supporting price. what that means is they bring back a million plus barrels to the sideline and they allow it to increase production. the spare capacity they have is over 4 million barrels a day. it would take a significant supply production for opec not at to be able to fill that gap. so the market looks at this event that's happened with iran and israel and says there is a bigger chance we have a supply disruption, but we're not as afraid of ta tail event because we know there's a lot of crude sitting on the sidelines. and secondly we know right now

mbs and saudi arabia are very frustrated with their other opec plus members for not complying to the production cuts over the past essentially years and are more willing to potentially release that supply back to the market if we do get a price spike than they have in the past. so we think that's the setup as to why crude is not seeing these huge kind of $10, $15 moves on an event like this. ultimately there's plenty of supply out there that can fill a gap. now, can it fill that gap indefinitely? no. so there is a longer term big picture here that i think this could, if it does escalate and devolve into something more significant, you know, cause a meaningful kind of uptick over the long term with regard to prices. in the short term, until we know what happens and the market supply that we know is comfortable with a buffer to the upside, we're seeing a mooted

response. >> do you think they've not factored in the idea that the israelis could go after oil production, oil refinery facilities in iran? is that a reality in your view, and is that factored into these prices? >> i think it's a reality, and i think it is eantirely not factored into the prices because if you look at the historical events particular will i over the last two years, if you look at russia's invasion of ukraine and everything that's happened since october 7th, there's been these spikes of geopolitical events, ander s every single ti it's not entered into it. so i think the market is kind of trained or desensitized to a certain extent that supply will come off the market, so i think there is potentially the market playing chicken here with these events. i think there is a potential that israel goes after iran energy facilities. keep in mind that's 1.8 million

barrels of crude exports that could be impacted. again, i said opec has 4 milliion barrels of supply capacity sitting on the sidelines, so it is a real threat, but it might not potentially be as devastating if we didn't have that buffer of opec supply on the sideline. >> we haven't talked about demand at all because the reason people have given to this point for oil prices not going higher is demand for china is so weak. china laid in massive stimulus plans to lay in stimulus and economy. where should your prices be as a result? >> that's a great question. if anything, i would be very surprised. industrials rise on the stimulus and crude does nothing. i think ultimately when you look at the makeup of the chinese economy and the stimulus, they're kind of setting forth on, there's not a lot of confidence that we're going to see a massive increase in crude oil demand as a result.

i challenge that. i think the market is absolutely underestimating the fact that chinese demand will improve with it. but the sentiment is tremendously sour. they think next year we look at a massive will i oversupplied market and nobody is willing to play upside in crude oil. if they think there's going to be stimulus, they're looking at the other industrial metals. the key is the fact we have this big buffer of supplies, sitting on top of crude. what's the upside, right? if i'm wrong and it doesn't improve, i've got this big downside tale, but the upside has capped. maybe i'll look at copper, maybe i'll look at another way to play that china trade. it's kind of been left behind as we saw that stimulus announced. >> rebecca, thank you. >> thank you. coming up, apple reportedly working on an update to its lower cost i phone.

details after the break. and then later, gary cohn, former economic adviser to president trump and jay clayton, former s.e.c. chairman, they're going to weigh in on the race for the white house. it's becoming a thing on "squawk box." "squawk box" will be right back. at pgim, finding opportunity in fixed income today, helps secure tomorrow. our time-tested fixed income suite, backed by over 145 years of risk experience, helps investors meet their goals. pgim investments. shaping tomorrow today. ♪♪ ♪♪

citi's industry leading global payments solutions help their clients move money around the world seamlessly in over 180 countries... and help a partner like the world food programme as they provide more than food to people in need. together, citi and the world food programme empower families across the globe. ♪♪

good morning and welcome back to "squawk box" live from the nasdaq market site in times square. checking the futures, some weakness yesterday in the averages and again this morning. it's october. and wall street's fear gauge spiking yesterday for good reason maybe amid iran's missile strike on israel. crypto risk off, i guess, back to that dictating things. it was above 65,000 over the weekend. now 61. gold prices near all-time highs as well. meantime apple preparing to announce an upgrade to its low end phone next year. this after launching upgraded ipads. the company is nearing production of an updated i phone

se that would would move away from the old home button design that's still got it. the current model costs $429. it's hundreds of dollars less than the standard i foep but much more expensive than rival iphones. they expect to upgrade air models and key bods. coming up, the vice presidential debate, more on the economy and the reaction from the public and a democratic governor. a reminder, you can get the day by podcast on squawk pod or any of your favorite podcast apps. we'll be back. >> announcer: executive edge is sponsored by at&t business. next-level moments need the next-level network. we must expand as well. we need to rethink... next level moments,

need the next level network. the only network with built in security controls. chip? at&t business.

. the one thing that joe biden did is he continued some of the trump tariffs that protected american manufacturing jobs, and it's the one issue, the most pro-worker part of the biden administration, it's the one issue where kamala harris has run away from joe biden's record. >> that was ohio senator jd vance facing off with minnesota governor tim walz last night in the debate. i want to bring in colorado democrat governor jared polis. al also, new hampshire governor chris. maybe we can talk about the vibes of the campaign, if you will, in terms of how jd vance -- we were talking earlier, he went into this not the most loved. i don't know if you think he came out of this in a different place. >> look, i think the remarks you just played shows the economic

illiteracy of the republican party. they have taken a hard turn against free markets, the free exchange of goods across borders. you saw jd vance doubling down on trump's tariffs, 20% universal tariff. devastating for the economy. increasing prices on a whole range of household goods. we just had back-to-school shopping. everything we buy, backpacks, socks, shoes, all costing more and really hitting the economy. that's what that means. kamala harris understands. of course there are geo complexities with china. let's work with asia, mexico, canada. let's expand trade relationships rather than drive them toward a weaker america. >> traditional republican values, right? >> look. if you want to get into the economics of the situation, there's one thing that every swing voter cares about, inflation. the cost of living.

that's it. people want to pay their rent, buy groceries. he hit that home four years ago. today it's stark. you can go back to the presidential debate where kamala harris absolutely failed to answer that question. >> on the economic -- >> how does adding 20% to the cost of nearly every household good, how does that decrease inflation or help anybody? it just decreases everybody's buying power, not to mention the jobs that would be destroyed directly as well as the jobs that would be hit with retaliatory tariffs. american exports are great. trade is fundamentally good when two people engage -- >> i have a question about inflation during the last four years. >> look, inflation is coming down, and i think we need to continue that. the fact is donald trump's budget would double the size of the deficit compares to kamala harris's buchlgt deficit spending is a big driver of infla tigges and a big driver of

mortgage rates. >> how do you answer the last four-year question? it's the question most democrats struggle with. >> when inflation is coming down in the right way. what's the question? >> the question is housing is up 60%. the question is people can't afford to go to mcdonald's anymore. that's the litmus test where everyone goes this is screwed up. this is not the america we bought into. >> under donald trump that gets worse with 20% tariff on every household item. let's not restrict supply. let's allow housing to be built. kamala harris talks about 3 million new homes, removing paperwork, bureau okay rahcy, making it easier to rebuild. we're doing it at the state level in colorado. we need to do it nationwide to allow it -- >> inflation coming down means that prices are going up less quickly than before so that the 20%'s already there and now they're still rising 2.5%, 3%,

so inflation is coming down -- >> you don't want deflation either. >> a 20% tariff is not there yet. >> trump was president for four years with tariffs and we saw 1.9%. >> this is new, this 20% deal. >> right. because the tariffs he put on are still in place with the biden administration, but we did not -- we had 1.9% inflation under trump. >> biden did unwind some of those tariffs. not the solar ones. i wish he did. >> i think -- let's take a step back and go what was the impact of last night, right? i think the impact was two things. i think they both did well. tim did well. jd did very, very well. in terms of winning the debate, will it have an impact? marginal. there's only a percentage of swing state voters. i don't know about this. a lot of folks are reassured, there's real sanity here, this

isn't just trump and trump-like. i think jd shored that up in a very, very strong way. i think tim did that for kamala as well. he did better than she did in her debate. there's a huge positive where america takes a big sigh of relief and goes, way, wait, the future in america is bright. weoptimistic. regardless of who ease president, we have real thinkers who know about policy and do it the right way. >> let me ask you about two news headline, one that's economic and one that could be economic, which is ports. how does this play into the election, and how do the democrats respond, meaning do they support the folks and workers at the ports or not? everybody is in the -- i would say both sides are in an interesting box here. >> first, it's going to drive inflation. i mean, it's going to drive costs, there's no question, if this goes on. the democrats are in a bit of a pickle because they're so

pro-union. the union rejected a 50% pay raise. i don't know of any american who would reject a 50% pay raise. but they have. >> i don't see trump out there saying -- >> he doesn't have to because joe biden and kamala harris run the white house. they should be the ones to intervene. >> these are union workers trying to get trump elected. you know that too. >> this is the responsibility of -- i love gina raimondo, but she was on saying, oh, yeah, we're not paying attention to what's going on with one of the biggest strikes in american history. that's a big issue in itself. what we saw out of iran is very destabilizing. i don't see things are get everything better ore the next five weeks where kamala harris can take credit. >> again, we talk about trade, which trump could cripple. and both sides should be able to

get in a room to hash out a deal. we'll have less strikes and -- >> did you see what the head of the union said? he basically wants to cripple the whole country. >> he's a trump guy. >> is that not shocking to you? that it is like donald trump was to cripple border security too by not giving us the resources we need. there is this theme among some in the republican party where they want to keep the issues festering and problems rather than solve them. for political reasons, that may be what he wants to do. there is many issues that donald trump doesn't want to solve, but wants to keep out there, like a port -- >> 13 million illegals that came in the last three years are trump's? >> we had the opportunity with the bipartisan -- >> no, no, that was six months ago. okay, the first three and a half years, what was the problem? >> look, first of all, the problem is the socialist dictator in venezuela. and just like, of course, america extended open arms to

refugees from the soviet union and cuba -- >> they reversed 96 executive orders to keep the border closed. i can show you a chart of how many came in with trump and how many came in -- >> socialism didn't work in venezuela, it won't work here. that's why we need a capitalist like kamala. >> i think they did eat pets in venezuela. >> if the democrat strategy is we'll blame donald trump for the port crisis, that isn't going to work. we'll blame donald trump for the current crisis in the middle east, that is not going to work. they have been there. the mistake that the democrats have made globally is they picked someone, they had opportunity to move biden off and pick someone new and fresh and they didn't. they picked biden 2.0. someone who has been in that white house that can't be that agent of change. america wants change. and so that's what's going to win. you go to the polls, you're voting for either i'm okay with the way america is right now, and very few are, or i want that agent of change on inflation, international security, all of these things. >> kamala harris is that new leader. let's talk about the role of vice president. i have a lieutenant governor.

do you have a lieutenant governor? >> no. >> many states have a lieutenant governor. do they run the show? no, they don't, they're ready, they're a breath away from the governorship, the presidency. >> joe biden is running the show? is that the -- >> absolutely. >> how do you feel about former president trump at 79 years old and at 83 years old, 84 years old at the end of a presidency if, in fact, he's there? >> again, it is not the number, it is what they're actually doing. >> right. >> biden's problem isn't the number, the fact he's having such physical difficulties with his age. trump isn't having the physical difficulties with his age. and, look, if you want to -- if you don't like donald trump -- at the end of the day -- >> everybody is off their fastball. >> everybody is off their fastball? >> i'm off my fastball from yesterday. i feel like all of my 49 years.

>> there are old politicians -- >> i think we should probably have some limits. >> i think the best argument in terms of trump, i don't like his policy, i don't like his brashness, i don't like the personality, this is what you get. you get a republican administration, you get republican leadership and each one of those cabinets where they're making rules, they're moving things forward, the democrat cabinet that biden has put in has been a disaster. the head of the epa is a disaster. the head of some of the agencies are political chills with no experience whatsoever. with trump, if you need to hold your nose, go ahead and do it, you get a republican administration that believes in local control, limited government, low taxes. >> what kind of people you're going to get given all of the very talented people, some of whom very talented, who worked for him the first time who have been very public they're not going to support him ever again. >> people will step up. no question you're going to get a great cabinet. >> no, this is not a republican cabinet with donald trump. this is a cabinet of sycophants and yes men. that's whoa he surrounds himse wi. >> we're going to have two in

the show later. when i'm 85, i'm telling you, i'm -- >> when you're 85, you can do that. >> you're making it to 85, joe? new projects means new project managers. you need to hire. i need indeed. indeed you do. when you sponsor a job on indeed, it's easier for talented candidates to find it. which makes it easier for you to hire them. visit indeed.com/hire (woman) did i read this?

which makes it easier fordid i get eggs?em. where are my keys? (vo) don't wait while memory and thinking issues pile up. these issues may seem like normal aging but could be due to a buildup of amyloid plaques in the brain. amyloid can build up over time. the sooner you talk to your doctor, the more options you may have. visit amyloid.com for additional information.

all right, when we come back, we're going to talk about nike. those shares getting tripped up this morning. we'll talk to an analyst about what's next for the company with the new ceo taking over later this month. big reason you're seeing such a downdraft in the dow futures this mniorng. also, strategist tom lee has a new call for the rest of the year. he will join us at 7:10 a.m. eastern time to talk about it.

"squawk box" will be right back. is it me... or is work not working? at least, not the way it could work. your people are buried in busy work. and you might be thinking... can ai make it all work? it can. on the servicenow platform, ai transforms your entire business. your people work better, your customers are happier, and todd... well... he's practically euphoric. practically. so, let's get to work. (♪♪) how do i keep my protection against covid-19 up to date? with a covid shot this season. you can get your covid-19 shot when getting your flu shot, if you're due for both, as recommended by the cdc. ask your healthcare provider and book at vaxassist.com

(vo) what does it mean to be rich? maybe rich is less about hreaching a magic number...

and more about discovering magic.

it is 7:00 a.m. on the east coast. you're watching "squawk box" here on cnbc. i'm andrew ross sorkin with joe kernen and becky quick. we got a lot of news to get to this morning. we continue to watch this big developing story in the middle east this morning. tensions still high after israel and u.s. forces intercepted 200 ballistic missiles fired at israel from iran. now israel is vowing to respond while the u.s. doubles down in its commitment to its middle east ally. we're going to have a lot more on this story in just a few minutes. where this could go, how it could escalate, and we'll also talk about the economic ramifications on gas and other things. meanwhile, president biden calling for a fair offer from the u.s. maritime alliance. the port strike clogging dozens of ports along the east and gulf coast and could potentially raise consumer prices ahead of the holiday season.

the ports account for more than half of the nation's container imports facilitating transport of everything from toys to fresh fruit to nuclear reactors. and apple is close to starting production on an updated iphone se that will serve as the new lower end model when it comes out next year. this could be the first upgrade to the se since 2022 when apple added 5g and a faster chip. a look at the futures. down 125. we are going to check in with one of the great recent prognosticators in a little while, will be good to do that. it is october. yesterday was down. a lot of not really black swans yet, but they're gray. what color swans are these? things around the world right now that are troubling. >> yeah. and a lot of them. >> i would never look at what is happening in israel just from the lens of what it does to all

our business, but it is something that we talk about all the time and it is something that could -- where could oil go if it really got nasty? remember back in the old days, went to $150? >> quickly, quickly. that, to me, is the most shocking thing. actually two -- three areas. the vix, that is still below $20 with all of these events happening. wti at 72. brent below 76. you got the ten-year barely budging on any of this. >> does it feel like we could be on a little bit of a precipice? >> it seems we're priced to perfection. >> and a port strike? boeing, let's get to dom chu. dom is pretty happy go lucky. just thinking about when he can get out on that first tee half the time. what's going on, dom. >> i mean, i'm thinking about that these days, but amidst all the geopolitical concerns that you just reeled off, it is kind of amazing to think about how things are shaping up this fall. or you could interpret it as

this idea that maybe the markets are not quite as fearful about what is going on broader and longer term right now. we'll see what happens. anyway, let's start out with the check on autos this mornmorning specifically tesla, down two-thirds of 1%. the deliveries are expected to increase by 6.5% on a year over year basis. that's according to those consensus estimates now. the highly anticipated report follows record delivery numbers. remember, for chinese ev rivals, also conversely syncing demand from european automakers with regard to their outlook and business. keep an eye on shares of tesla and other automakers. we're watching shares of harley-davidson, staying on the motor side of things. they're down 3.5% as baird downgraded that stock to a neutral from a buy. they lowered their target price to 40 bucks a share. it was $44 before. they're citing recent conversations with dealers,

significant retail declines and excess inventory. so keep an eye on those particular moves. and, by the way, for more on those and other top calls of the day, head to cnbc.com/pro, more access to all the analysis behind those calls. and then a look at big tech. meta and alpha moving after a pair of price target upgrades from wells fargo analysts bumping meta to 652 bucks and alphabet to $190 a share saying tension will return to fundamentals as some of those regulatory headwinds around big tech start to ease a little bit. joe, meta, alphabet, among some of the names to keep a close eye on. the analyst reports driving some of the market action. i'll send things back over to you guys. >> great. thank you, dom. nike shares are sharply lower this morning. the company reported earnings that beat the street's estimates, but revenue fell short. nike withdrew its full year guidance and postponed investor day as it prepares for its new ceo to take over on october 14th. joining us right now is bob

derbil, guggenheim securities expert research analyst. if i have to look through this, the stock indicated down pretty sharply, back to 84.20. but if you think about it, that's still above where it was when you heard that donahue was out and was stepping down and elliott hill would be coming back in. okay, he may be gone, but the problems at nike still remain. >> yeah. there is still a tough task at hand for elliott as he comes in. i think what we got was just a better place setting for the table to see, okay, what really does he have to deal with as we move forward, and i think, you know, the quarter was largely in line with expectations. inventories were a little higher than we would have liked. i think sales came in a little lighter. and the environment isn't great. and competition isn't going away. so, you know, i think as we look forward, the next few months aren't critical. i think what we're really focused on is the next few years

for these guys with the new chapter at hand here. >> and i think maybe some of the stuff that came out in the call was concerning, just about how long this is going to take. they made the point on the call that their deliberate pullback from top brands, whether that be air force one and air jordan one, that's going to last. they can't fix that immediately. that's going to last through the end of the fiscal year, which doesn't end until may of next year. >> i think it is supply and demand. imbalance. they're focused on it. the good news is they do have their order book being finalized for the spring, so they will be able to sort of, you know, better check, you know, what their inventories are in the spring versus where they are right now. and i think that those businesses are manageable, they're managed lower. i think some of the newer initiatives at hand and some of the new shoes they're bringing out are encouraging, but a small piece of the puzzle right now. >> my guess is even though elliott hill hasn't started yet, that's not until later this month, my guess is he's already

made all kinds of calls and had all kinds of meetings with retailers and others who are so important to them. >> no, i think -- i think there is a lot of discussion about the investor day being postponed. i think it was the right thing to do. give elliott hill some time to put his team together. meet with his retail partners, you know, try to figure out what is working and what's not and give the guy a little bit of time and we'll figure it out from there. but -- >> what about the stock this morning? now we're looking at it 83 and change. does that make sense for the business, what it is going to deliver over the next six months to a year? >> i think it does. i think when you have a change in leadership, you know, we're all trying to figure out what exactly he's going to do differently. elliott's experience is very marketplace oriented and i think that's one of the biggest challenges that they have at hand, which was they have given up a lot of shelf space with their retail partners, so they got to win them back, basketball continues to be very strong, but the running area, they said running was up double digit, it

is smaller than it was, they got a lot of new shoes coming out over the next several quarters. and i think that's the critical piece and i think they really need to focus on innovation with some new products to really jump start -- >> particularly in running? >> definitely. >> that's where they're facing the biggest competition. >> you think this is fairly priced, you wouldn't necessarily say to buy it here, wait and see what happens? >> our target is 110 now. we took it down slightly. >> 110 is higher than 83. >> yeah, no, because i think ultimately you've got -- i think the brand remains very strong, very competitive. the balance sheet, you know, $10 billion of cash, they had this treasury -- war chest they can really compete with financially. and the retailers really want to partner with nike. when nike is successful, the industry is successful. i think there is a lot of broader ramifications for what can happen here. and i think elliott has tremendous experience and i think you put that 32 years of experience at the helm, he knows

the chuulture and the industry d it will take a little bit of time. >> bob, thank you. when we come back, why tom lee says the s&p could reach 6,000 by the end of the year. he'll join us right after this break. and then, iran's ballistic missile attack on israel, the latest on middle east tensions and what it could mean for the global economy. "squawk box" will be right (cheerful music) (phone ringing) [narrator] not all multi-millionaires built their wealth the same way, back. you have... the fearless investor. the type a cpa. >> announcer: this cnbc program >> announcer: this cnbc program is sponsored by do have something in common. we all trust schwab with our wealth. [narrator] thanks to our award-winning service, low costs and transparent advice. every day, over a million multi-millionares trust schwab visit bairddifference.com. with more than two trillion dollars of their wealth.

ah, these bills are crazy. she has no idea she's sitting on a goldmine. well she doesn't know that if she owns a life insurance policy of $100,000 or more she can sell all or part of it to coventry for cash. even a term policy. even a term policy? even a term policy! find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com. icy hot. ice works fast. ♪♪ heat makes it last. feel the power of contrast therapy. ♪♪ so you can rise from pain. icy hot.

why choose a mobile network built for places you'll so probably never be...in. ...instead of for where you are most of the time? xfinity mobile was designed for where you need it most. xfinity internet customers, ask how to get a free 5g phone and a second unlimited line free for a year. tom lee is back with us for his latest musings on the markets. managing partner, head of

research at fund strike global adviser and cnbc contributor. people forget, i think, but your outlook and views are always nuanced to some extent, tom. last time you were on, after being pretty bullish on small caps through the end of the year, i wouldn't say you didn't change that long-term view. but you did express some near-term caution and the people that follow you, the people that watch "squawk box," they want to know exactly what to do every minute of every day. look to them like you had waffled on your long-term view. and you're going to say the same thing today. i think near-term, you acknowledge that there could be some bumpiness, choppiness. by the end of the year, you think 6,000 on the s&p. >> that's right. i think we're still in the midst of a very tricky period because we have got the election in less than 35 days. and now we have got two things that investors don't know how to

discount. one is the mounting tensions in the middle east and a port strike that is potentially going to cripple the economy. and so, i think that as investors worry about this, if we get a dip, a big dip, i think you still want to buy that dip, because the setup into your end has a lot of tail ends. >> the worst case scenario for the port situation is something that we have seen. and we shut down an economy already. and that was probably a time to buy. we know that. so we have seen that movie before. could it be -- i can't imagine it could be as bad as the pandemic. but we have shut down an economy before. >> yeah, that's right. so i think it creates headline risk, the longer this strike lasts, there will be companies that miss. s&p earnings might get downgraded or some stocks might miss results. but that's all just temporary. those are just short-term headwinds because it doesn't change the long-term outlook. >> very strange that it -- i

don't remember any war that lasts where the effects -- we have been through quite a few, back in the '90s and the 2000s, it never seemed to have the -- as negative an effect on the overall market as we thought at the beginning of each. >> if we look at the last six sort of global wars or tensions, almost always buy the invasion. the exception was 2022, with the russia-ukraine war, because we were in the midst of a fed tightening cycle. so that was not the buy the invasion event. the other times you did want to buy. >> both iraq wars. >> yes, both iraq and -- >> where was the market before that happened? had levels come down or were they trading at near highs or at highs? >> yes. you know, this is different because we are hovering near highs and we're in an extended market. >> things aren't cheap in terms of multiples. >> that's right.

but at the same time we also know there is a lot of cash on the sidelines because margins, hasn't risen for four months. that's pretty unusual with the rising stock market. and now money market cash has actually been rising at a time when the fed is cutting. so i do think there is firepower. >> the other issue, just the longshoremen strike, if that goes on for an extended period of time, is that something -- we were talking before how much that cuts off the gdp. if it is there for a week, cuts .3 of the gdp. >> yeah. >> for every week they're out. is that something that the fed comes in with much more aggressive cuts and that fixes things or are there inflationary factors that also come into play and that ties their hands? >> i mean, the fed has to kind of put that in their calculus because the labor market softened. if this is a shock in a way that causes the labor market to weaken, the fed is going to be

more dovish. but we get the payroll support friday and i would say maybe it sort of early hints seems like it is going to be a better than expected report. >> bet then you also add in what would happen from inflationary pressures, not only from the longshoremen strike, but potentially from oil prices going up in the middle east too. >> that's right. i think the fed at this point will be more concerned if the consumer expectations got unanchored on inflation and those have been improving. so, i think the fed can be less worried about the inflation side. >> did you see tepper talking about john? would you ever ascribe to that theory, buy a lot in china? >> i would say that not only di is working right, because the stock market is -- has really broken out. i think china is the best performing stock market this year. >> was the move made -- i think we had kyle bass on yesterday, and i think he would argue long-term no matter how you want to think about china, it is a bad bet. he was suggesting in the short-term, it is a good bet. i don't think he was necessarily

opining on whether the bet was over. but the move -- the big move has happened, the question is do you see that doubling? is that in the cards at this point in the game? >> yeah, i mean, something to keep in the back of their mind, china underperformed the u.s. by 7700 basis points. it still underperformed by high thousand basis points. there is a lot of room for a rally, even if it looks corrective. >> i think, you know, his phrase was something like just a bad bet on communists. >> he's saying long-term it is a bad bet, but short-term -- >> it is not our grandfather's communism. it is almost -- i don't know what -- we need a port montu for what capitalism with -- bidenomics, kidding. thank you. >> thank you. >> 6,000 by the end of the year. >> yes. >> okay. all right, up next, iran

launching nearly 200 ballistic missiles at israel as tensions in the region escalate. we have more on that situation right after this break. and then, reaction to last night's vice presidential debate and the onic pnsecomla for both candidates with former s.e.c. chair jay clayton and former national economic council national economic council director i don't want this. i want corndogs! corndogs! ♪♪ corndogs! corndogs! corndogs! ♪♪ "squawk box" will be right back. i need another corndog!

♪♪ data science can help address some of the biggest challenges in financial markets. if we focus on the mortgage market and follow the life of a loan from origination right through its pricing in the capital markets, our data science capabilities can provide a deep level of insight. at ice we have extensive data sets, especially around three pillars. the property, the mortgage and mortgage performance. this trifecta of data and its history is a bit of a data scientist's holy grail. ♪♪

welcome back to "squawk box." on tuesday, iran -- to discuss the latest developments in the middle east, former foreign policy adviser to the bush administration, the co-author of "the genius of israel" and host of the podcast "call me back." we talked about how this escalates, where this goes next and what israel does next to retaliate and how they do. and i'm curious where you land on the big question as to how they retaliate. do they go after nuclear reactors and the like? we were having a conversation earlier with the colonel in the last hour who was suggesting maybe you go after some of the refineries or other things, but that may be one step too far if you were to go after the nuclear reactors. >> first of all, obviously israel made it clear they will

react. there is very interesting signs. while the prime minister and his team tend to be sometimes shall we say quite intense in their rhetorical responses to these moments, the idf army spokesman, chief of staff team tends to be pretty restrained. they sound as hot right now as any israeli politician. so there is total kind of -- totally synced up, the military and the political echelon, a. b, the u.s. government. in mid-april, when israel dealt with that iran attack, the u.s. obviously participated in the defense of israel. but then the u.s. caution ed response. president biden said take the win, you don't need to respond. look what jake sullivan said yesterday, he made it clear not only should israel respond, israel has a right to respond, but that the u.s. is going to participate in the response. and then you just roll back and look at the following. one, iran has made clear for years that it has what it calls its annihilation strategy. meaning it has been developing a

strategy to annihilate israel, to annihilate the jewish people. we saw the beginning of it on october 7th. we saw the continuation from hamas in the south. we saw the continuation of it on october 8th from hezbollah in the north. we have seen the various proxies in the region piling on, all orchestrated by iran. israel's view is they're doing it, they're trying to annihilate us, this is the moment to respond. and i think the supreme leader of iran made a massive miscalculation with this attack yesterday. because it gave israel whatever grounds it needed to respond, to respond big and i think if the iranian nuclear program is left fully in tact, and on path toward a weapons breakout, which it is, at the end of this, it will be a huge missed opportunity for israel and i think the israeli leadership recognizes that. >> the question is, can israel successfully eliminate that nuclear program or damage it? what does that look like? and then in the war gaming of this, what is the retaliation from there? and i ask because there has been

some conjecture that -- i don't believe this, but that even what we saw yesterday from iran, not to suggest was performative, if you will, but there was -- that israel knew enough of this was coming, and what would happen after that. >> they told them it was coming. >> right, so, first of all, the iranian program, basically based in two areas, in letans and fordo. one area is above ground and one is below ground. the israelis believe -- and others believe too that the capabilities that are above ground is very reachable, and can serious damage can be done to it. the question is what to do to the program below ground. it is not binary. the israelis don't view it as binary. it is not can you take everything out or not. the question is can you do real damage to the program, set it back considerably. a few weeks ago, the director of

nat national intelligence in the u.s. came before congress and issued a report saying for the first time we have no confidence that the iranian government has put their nuclear program on anything but inactive, meaning that it -- there are signs it is moving forward. what is the time frame when they move forward? is it one to two weeks to get a bomb, one to two months to get a bomb? we don't know. we know the window has gotten shorter and shorter over the past few years. from israel's perspective, if they can do real damage to the nuclear program to the point that they expand the window, so instead of being one to two weeks or one to two months, suppose they do enough damage that it is one to two years, is it worth it? probably. is there a risk that iran will respond? yes. but how has iran always responded? the loaded gun iran has had on the table and facing israel has been hezbollah. iran has been saying go ahead, try and strike me. we have hezbollah on your northern border, 200,000 rockets, the forces we now know were planning their own version of october 7th from the north,

we can light that up whenever we want. and that has always deterred israel. the game changer over the last couple of weeks is israel has basically, not permanently, but temporarily paralyzed that. >> are you saying they did this as a pry elude to an attack on >> i think there were a series of events that were kicked into place following the pager attack and opportunities presented to israel, they knew they had an opportunity to really paralyze hezbollah and it worked. combination of air force assets and intelligence, able to do a lot of things. it was not inevitable that they would go into iran. if that's your question. did they do hezbollah knowing they're doing iran? i don't think that was the case. but i think they now realize they have been so successful with hezbollah, and, again, there could be setbacks, i don't want to sound totally polly annish, but so successful with hezbollah, if there is ever a time to deal with iran, it is now. the supreme leader of iran gave israel this opening by

attacking, which i think will be regarded as one of the great miscalculations. >> what you are saying, though, this time is different. everything that we have seen along the way is different. which means the retaliatory strike may be different too. whatever iran comes back with next. what do you think happens with egypt and syria? >> i think with egypt and syria, i think all the sunni states are basically rooting, publicly or privately, rooting for israel to do what it's doing. after the pager strike -- >> that's what i wanted to get to, how has this changed the whole dynamic for bibi netanyahu? he was by so many people around israel, i don't want to say hated, but disliked by a lot of people and feels like something has shifted in the past week and a half. >> look, i think netanyahu's political future will remain to be seen. i think he's got serious challenges to his own political future. that said, there is nothing like

momentum in a sense like you're finally off your back foot and winning to change your political and your geopolitical positioning. and i think there is a sense inside israel, finally, we're not just in defense mode. keep in mind, israel's war in gaza has been israel responding defensively to gaza. and it has been quite effective, but still a muddle. now with the threat in the north and the threat from tehran, there is a sense that israel is on the front foot that israel actually is proactively dealing with threats that israel has had to deal with for years. >> do you think iran -- i want to say, geopolitically, the saudis, the emiratis, the bahrainis, the egyptians, jordanians, they fear the threat of iran and iran becoming a hegemonic power in the region. i'm telling you, many of them are saying it, you know, publicly, even more saying it privately. i heard from a number of officials who said we want israel to -- this round, we may have our frustrations with what

they have done in gouaza, hassa nasrallah of hezbollah is responsible for the slaughtering of hundreds of thousands of sunni muslims in syria. if you're a sunni muslim in the arab world, you see what israel is doing taking on the maligned forces in tehran and in southern lebanon and you're celebrating. >> they tell me we got to go. do you think -- do you think iran assumed it would be like april, because of the iron dome? and because if those 200 missiles had hit what they were -- >> 5% of them. >> did they assume it wasn't going to work again? >> the people say, oh, they knew it wouldn't hit, therefore israel shouldn't strike back electronic it was performative, it was symbolic. you don't launch projectiles and hope they get debt through. i think iran calculated the u.s. and the international community would restrain israel from a response. and what has changed now, and i

think this is the great miscalculation is most actors seem to have lost patience with iran. >> the producers are going to be coming. one question about the election here in the u.s. does this, everything we're talking about, do you think, play into either favorably for former president trump or favorably for vice president harris? >> i , right now, i would say right now nothing, if i give a slight edge, i think it helps president trump because the trump administration had been dealing with iran so aggressively in his last couple of years in the white house and they had been warning that the iran deal was a bad idea, trying to integrate iran into the international community was a bad idea, and now they're watching a region on fire and saying iran is behind all of it, you know, we were right. it gives them a slight edge. i thought vice president harris' statement yesterday was a little bumpy. but not what she said, but how she delivered it. it seemed not -- she didn't seem

very comfortable. but, again, the white house statement from sullivan yesterday -- >> that's the interesting thing. >> so my israeli friends in the journalism community are saying, sullivan's statement, why didn't he issue that before the attack? they had been signaling they didn't want israel to escalate and if they had issued that before -- >> that's where all this money is coming from, to be able to fund these things, i'm talking about the biden administration has not shut that down. you're so nice. you don't want to be political, but i think it is a lot more than just a slight edge at this point. >> okay. look, you tend to, you know, ooze with enthusiasm and excitement and zionism. >> i do. i ooze with zionism and i'm not jewish. >> ooze with zionism. >> thank you for coming in. >> mount zion wasn't even a mountain. it was a -- >> announcer: time now for today's aflac trivia question. what state is the leading what state is the leading pumpkin-produciney to help close that gap.

aflac! oh! coach prime got one on the line too baby! uh huh! see that's how you hold up a trophy. trust me. the answer when "squawk box" returns. nce doesn't cover. find an agent. get a quote at aflac.com. i hope you're hungry. i'm glad i brought my own dinner. uh huh. ah, these bills are crazy. she has no idea she's sitting on a goldmine. well she doesn't know that if she owns a life insurance policy of $100,000 or more she can sell all or part of it to coventry for cash. even a term policy. even a term policy? even a term policy! find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com. at waystar, our mission to simplify healthcare payments has never been more important. we passionately believe that our software platform has the power

to transform healthcare in the united states for providers and their patients. and we're not finished. waystar is purpose-built for this moment and waystar is the future of healthcare payments. now, we look to the horizon and we see the way forward.

>> announcer: now the answer to today's aflac trivia question. what state is the leading pumpkin-producing state? the answer, illinois.

a news alert from eli lilly, making a major r&d announcement. angelica peebles joins us now with the latest. good morning. >> reporter: good morning, joe. we are here in lebanon, indiana, lilly saying it will build a $4.5 billion center focused on researching better ways to make its medicines. the lilly medicine foundry will focus on two things. developing new ways to produce drugs and supplying drugs for its clinical trials. it will be just down the road from where we are today in lebanon. this building behind me will one day produce the active ingredient in diabetes and weight loss drugs mounjaro and zepbound. this facility will use more efficient process for making it that lilly scientists developed. the company wants to repeat that success with its other medicines. dave ricks telling me sometimes small changes can lead to dramatic results.

>> for production levels, sometimes these steps can yield three or four fold output. 300%, 400% improvement. that can be the case sometimes. for clinical trials, by centralizing all that work, especially for the complex molecules, we can save time because if you're doing this through third parties, you got to often get multiple third parties to work together and then work on their open slots and their schedule versus the fastest time to patient. here we'll have the capacity to get the fastest time to patient by controlling the process ourselves. >> reporter: now, the foundry should open in 2027 and it is one piece of lilly's plan to build on the success from its glp-1 drugs. we'll have more with dave ricks later today. andrew? >> thank you very much. when we come back, after the break, want to check out some shares of humana real quick. plunging after the company said that the total members enrolled in its medicare advantage plans rated four stars and above

plunging to 25% versus 94% for the prior year. the company says it is questioning some of the ratings calculations. we'll talk about it. we're coming right back. as a proud afro latino, i got to witness my parents' tireless work ethic and value that they placed on hard work. and i used a lot of those characteristics at every stop along my journey to get to where i'm at today. hispanics have traditionally and continue to add value to any organization. even the smallest keton of acknowledgement helps light the fire to continue to push boundaries as we continue to serve the communities that care about us.

all right, welcome back. let's look at the price of bitcoin. after falling below $60,000 yesterday, during the brief flight to safety that we saw, you can see this morning it is back above 61,000. 61,245. crypto tracking stocks like microstrategy, coinbase and blockchain coming off down sessions. this morning, actually indicated off again by 1% across the board. >> and saudis oil minister warning opec the prices could

drop as low as $50 if members of opec plus don't follow agreed upon production limits. prices jumped yesterday during that attack on israel. crude prices up $2 and up 3%, $50. in what universe -- that sounds like -- >> that's a threat. >> jaw boning. >> breaking their production. >> cheating. >> we'll see. when we come back, reaction to last night's vice presidential debate and the economic plans for both candidates with former s.e.c. chair jay clayton and former national economic council director gary cohn. and later, lazard ceo peter orszag will join us, we'll see what he sees from last night's debate as well.

"squawk box" will be right back. there are some feelings you can get with any sportsbook. ohhh! the highs! no, no, no. the no, no, noooos - oooooooo! the oh, oh, ohhhhs! now whatcha wanna do with this? but the feeling that, no matter what, you're taken care of. ohhh, i just earned a hotel suite! hee! you only get that here. at the sportsbook born in vegas, where they know how to treat you right. who you talking to jamie foxx? bonus bets. exclusive offers. real world rewards. betmgm. download and bet today.

right now let's get to last night's vice presidential debate between jd vance and tim walz. we are joined this morning by

former s.e.c. chairman jay clayton. he's now apollo's nonexecutive chair and cnbc contributor. also gary cohn, who is former nac director, now ibm vice chair as well. thank you, both, for being here this morning. why don't we start with what we learn ed last night. what did you take away from it? >> here is my takeaway, that i said it before, the american people are smart. and these candidates responded to the american people asking for substance. we had substance last night on the economy. we had substance on border. and we had substance on conflict in the middle east and ukraine. and that is because the campaigns responded to the american people saying, give us something instead of calling each other names. >> by the way, civility, i think, too, the other thing that came away from this. >> i was very impressed by the substance and i was particularly impressed by jd's substance. not just isolated on those issues, but across those issues. how they all tie together. the american people know that a strong economy, strong national

defense, and, you know, immigration, migration, where we're going forward, they all tie together. and i thought he did a particularly good job of being consistent across those issues. >> gary, what did you think on the economy? the issues that came out there? >> i think on the economy, again, i'm not sure we learned a lot. i don't think any new policy was put out. in fact, the only new policy put out since we were here last is the harris/walz team did put out their 82-page economic platform, which is quite interesting and maybe we should spend some time talking about that. >> let's do it. >> what we learned, and i think what they continue to do is they continue to reiterate that what you have seen in the past is what you're going to get in the future. so what you saw from the trump administration during their four years, their policy of lower taxes, very accommodated from the regulatory standpoint, trying to grow the economy, they continue to reiterate that. from the harris/walz team, they put out 82 pages of new and

bigger entitlements. like, i could go through the list, i'm not sure we have enough time, we talk about new housing credits, small business credits, forgiveness of student loans, higher inflation, enhanced child credits, preschool credits, long-term care credits, paid family leave credits, government control of healthcare, price controls, i think you go -- >> you're right. i think you're absolutely right that there is a big change, but i would say it is the same from both campaigns, because i would say former president trump laid out a pretty long litany of things on the campaign trail he would spend on. and we're not looking at a whole lot of ways to raise it outside of tariffs. i think both campaigns are talking about pretty aggressive shifts from what we have seen in the past. >> i think this is what bidenomics is. i think the harris/walz team laid out in 82 pages bidenomics. now we can call harris and i think what you've seen from the trump/vance team is you've seen a reiteration of what they did

in the past. they continued to talk about lowering taxes. they do continue to talk about tariffs. we talked about tariffs, where they're effective and not effective. they continue to talk about growing the economy. growing the economy so we have a higher gdp, so everyone gets raised up. so we can grow wages, we can grow therise. the other is redistribution of the economy. >> the two things that really strike me now, though, is, we are faced with massive news issues talking about all morning. one would be what's happening in the middle east. second would be the strike with the longshoremen and maybe start with the easier one first being the longshoremen. >> yeah. so we were talking, jay powell, i think everybody's giving him high marks for where we are in trying to land this. what's not in the textbooks, a port strike. not in the textbooks, increased conflict in the middle east. energy price shock if that comes about. these things are not there, and both of them are inflationary. >> yeah. >> so what do you do if you're

at the fed? done very well here. you've kind of brought demand down. and all of a sudden -- you have two -- fed has a tougher job than a week ago. >> and what happens? gary, looking at it from the economic perspective. talking how three-tenths of a percent cut off gdp this week and every week thereafter? >> look, jay said. talking about this a lot. this is a much tougher scenario, and we haven't thrown the middle east in there or thrown a major oil shock. haven't thrown in there closing the suez canal and making shipping routes completely different and we know the difference in shipping costs going around africa and through the mediterranean. these things are highly inflationary. they will -- this will be the real definition of transitory inflation. back to where we thought we were four years ago. transitory inflation, a port strike. real disruption in the middle

east, and shipping lanes and oil. this is all, we'll have real, short-term impact on the u.s. economy. i think chair powell sort of started foreshadowing that last week. where he started talking about a slower, more methodical move. i think he was foreshadowing exactly what he thought may be in the cards with the port strike, but we got the 50 basis points, which we always thought was 25 at jackson hole and 25 at the meeting. that was the 50. then thought 25 more in the next two meetings. look, i think there's still probably 25 more in the next two meetings but it's not as positive -- i'm not as positive today as i was last time i sat there, because of the port strike and because of what's going on in the middle east. these things can amplify very, very quickly. >> show you video, which you may have seen. this is head of longshoremen union, and this is what he had to say. show you this video.

>> who's going to win here in the long run? you better off sitting down and let's get a contract and let's move on with this world and in today's world, i'll cripple ya. i will cripple you, and you have no idea what that means. >> and then he goes on to suggest how he's going to cripple the country by all of the different various people who are going to lose their job, and -- by the way, he's a trump supporter. known to be. i'm curious actually what your reaction is to that and what you think either former president trump should be taysaying about this or vice president harris should be saying? >> let me jump on this. both sides are hoping to get the sfro vote from labor. right? >> totally. >> we want people to have good jobs. what is one of the worst things that can happen representing a constituency? you go from having the american people behind you to losing the

american people. what i saw in that video, someone who's going to lose the american people if he's going to tell you, i'm going to jam you for money. even worse. i'm going to jam you for money and we want to prohibition on technology coming to ports in america. that's -- that's saying, we want a job for life. we're going to hold you up -- >> political implications should be what you think leading politicians in this election should be saying as a result of this. nobody wants to touch this. you just touched it. >> saying shouldn't jam the american people like this. here's -- >> do you think that former president trump should call him or -- >> let me propose a positive way forward. right? these it jobs have been there. very high-paying jobs. good for those families. i get that. sympathetic to that. the idea you have the job for life and technology isn't going to replace it? work on a two, three, four-year contract like you would in corporate america with a buyout at the end to allow technology

to come forward. a way forward for everybody. three, four years to plan. this kind of kickal can down the road each time. ridiculous. >> what do you think both of these candidates should say about this? sort of boxes both of them in, in different ways? >> yeah. i think they both are in similar predicaments as we said. both looking for labor's vote. both want support from all of the longshoremen and everyone that's attached to them. teamsters and everybody else. >> wrong to think if you were former president trump you would be happy if this were to continue? >> i don't think anyone's happy. >> no, no. >> you don't think that would, on the margins help his campaign? >> i'm not sure marginally it helps your campaign. >> that's a elf will of cynicism. >> yeah. >> goes way too far. nobody -- nobody likes that. >> no one likes that. >> i think jay's bringing really important points. this came out a little last night too. we're in a global economy. we have to compete globally. we cannot, and we should not,

give a contract where we're prohibiting modern technology. >> right. >> and modern efficiency to be part of our economy. that would be a bad -- >> the biggest sticking point. i keep digging into this deeper. already saying in the port in virginia, one of the ports, they have -- you know, a scanning check-in of the cargo coming in beforehand. that's a violation of their existing contract and they don't want to see that happen. >> but this is a country that has grown itself. we're the largest economy in the world for the reason. we have embraced technology. >> right. >> we are a country with more start-ups and more new companies that created technology. we cannot stifle the use of technology in this country. >> so let me ask you, if it should be the biden-harris administration at this point step in. joe biden said he will not to this point and if former president trump was in the white

house would you advise him to step in on this? >> i think i just gave you the advice. >> both? >> step in and say where are we five years from now? >> would you would say -- talking about it before. >> figure out how to get back to work, and that guy wants the nuclear option, shut you down. but when anyone strikes you'll screw something up and cost someone money. depends how long it lasts. the implied threat is i am going to hurt you economically. obviously this guy -- someone says i'm going to hurt the middle class economically. that's bad. >> that's bad, but that -- only reason you strike is to cause economic disruption either to your employer or the country itself. so that's just -- sorry. all's fair in love and war. >> i think the american people are smart on this and see what's going on. >> well, that should just last a while and -- real estate buyers and sellers market. this is a labor market right now after gm and the other, the big three.

those contracts. what do these it guys want? 80 over -- >> 70. automation may be the bigger sticking point. >> talking about people that earn $170,000-plus a year. no problem with that. >> let me be clear. >> schoolteachers in new york city earning $50,000, $60,000 that's we're trusting our kids to every day. >> you made that much during the segment. basically. >> i'll remember this along with you, joe. >> it is this technology point, and this idea that technology destroys jobs? no. there are new jobs created. >> goes back to the 19th century. a name for people like this. >> such a false trope. >> what should we do from the middle east? not asking you to fix the situation in the middle east but how do we prepare ourselves, look at it from an economic point of view from the markets, too? >> going back to the debate is last night in the middle east. what did we learn? this idea that allowing iran to develop nuclear energy capability was one of the great

policy failures of all-time and it, it's such irony that how many nuclear plants have we built in the u.s. trying to become energy independent? one? one that you guys bailed out during the trump administration because -- >> yes. >> so this idea we're giving them freedom money et cetera to build nuclear energy? and we don't have the permitting, don't do anything. like, that's -- you know, again, the american people have woken up. they're supporting israel. because they see how ridiculous this is. to have any kind of appeasement or the like with iran. the last week has been really good in terms of the american people showing, showing the leaders. how to think about these things. so one of the interesting things last night was phrasing. would you support a preemptive strike against iran. it's not preemptive. they just fired 300 ballistic missiles.

>> preemptive before they use a nuclear freakin' bomb. i can't believe we're talking about that, wisdom of the american people is showing through right now and i think it's an fantastic. >> thank you both for being here. it is 8:00 a.m. here on the east coast. you are watching "squawk box" on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. a new ceo, elliott hill taking over nike. withdrawing guidance, providing it quarterly for the rest of the year allows the new ceo to evaluate nike's current strategies and best position for the company for fiscal 2026 and beyond. nike shares down pretty sharply. at this point down by were about 7.7%. in economic news, jobs in focus today. a few minutes, 8:15 eastern time, september adp private payroll report.

economists expecting addition 128,000 jobs last month. on friday the government's official september labor report. anda 00 starbucks coffee shops unionized. ba ritas a store in northwest washington state voter earlier this week. still the vast majority of starbuck shops are not unionized. new starbucks ceo brian niccol said the company is committed to bargaining in good faith to craft a labor deal. shares of humana sharply lower. prelimi preliminary data shows lower ratings for medicare advantage plans, something we don't see very often. for a company on the size of, with that much -- it's a blue chip. really. look at that. percentage loss, almost 23%. really unbelievable. word of that downgrade from centers for medicare and medicaid services ahead of the

official release due around october 10th. humana says 25% of its members were be in plans rated four stars and above in 2025. down from 94% in the current year, and humana is disappointed with its performance and has initiatives under way focused on improving operating discipline. the company also questioning some of the ratings calculations and has appeals outstanding to cms saying that the ratings are not expected to impract the company the outlook for this year or next but not reflected in what we see right there. futures ahead of the market open this morning. right now looking at red arrows across the board. dow off 116 points. nasdaq down 45 points. s&p off about 18 points, but in truth given all of the escalating risks in the middle east not necessarily reflected, at least in the equity markets now. look at ten year note 3.760.

twoal year down 3.615. more on the markets straight to the new york stock exchange mike santoli standing by. >> yeah, andrew. call it as well a mild vegsrsio of the risk reduction straight you get with geopolitical escalation. s&p 500 high end of third quarter. also like 5% or so peak above 50-day average. a little stretched. often you see a shakeout, pause, pullback in october even if the fourth quarter's strong. 50-day average is down around 5540. call it 3% down from here. point being anything down in that zone is still pretty much in normal pullback territory. 5,600 a sealing of the market for a while. see if it comes into play at all. a different character in the market as we've gone through the third quarter. look at this tortoise and hare

chart. walmart versus nvidia. conspicuous. nvidia making lower highs not able to get traction and holding on to massive year-to-date gains on top. walmart steadily in consumer staples bucket. the spending levels are okay. even if labor market is softening up in aggregate in the economy. seems to be one. things reflected in walmart. take a look at a chart i've been using for a couple years. starbucks relative to nike. similar setups. global, great american brands. relied a lot on china for growth. come into question. leadership questions. both basically did a ceo transition right around the same time. you had excitement about some strategic change but see, of course, nike's going to fall back to the low 80s looks like on that kind of guidance suspension you talked about. interesting. also both still have premium valuations because they really built up that high valuation into and during the pandemic,

still trying to work that off, joe. >> all right. mike, thanks. coming up, more on the markets and later lazard ceo peter orsz wl ins. 'rcong right back. when we started feeding bogie the farmer's dog, he lost so much weight. pre-portioned packs makes it really easy to keep him lean and healthy. in the morning, he flies up the stairs and hops up on my bed. in the past, he would not have been able to do any of those things.

for more on the markets bring in brenda, chief investment officer at sand hill global advisers. a couple of things happening that have got us concerned, brenda, but i'm looking at the notes you gave to our people. you've got, like, ten things that make you very sanguine. even though the market's up so much you think the combination of the fed going back to neutral, or >> , i.e., lowering rates, gdp continue to grow and weight-loss drugs, street spending all bodes well for continued moves higher? >> i do think so. although i think you look at just a broad s&p 500, for example. i don't think there's as much upside. certainly we've had a huge move.

we think about 5 to 7% left. look down at the individual stock level, small and mid-cap stocks valuation is reasonable. a lot more i will say, yes, in a positive environment. obviously there are risks. reminded of the geopolitical risks out there. more recently. but i do think that if we look at the big picture in the united states, the economy is still growing nicely. much faster than they thought it would and we have big, huge thematic growth stories going on and multiple growth stories which is rare. i think that is in combination with the fed lowering interest rates. i do think it's still a very supportive environment for a continued appreciation of the equity market, but the other pete happening with rates coming down is bonds have finally started to deliver a positive return. during the third quarter.

bonds were almost up as much as the s&p 500. encourag encouraging. that serves as a nice buffer, i think, for investors during moments like this, when there is volatile times a flight to safety. i think bonds have now resumed their historical role in terms of being not only a protector during volatility, also one of really an asset class that can add value and return to portfolios. >> interesting. it's not a zero come game where money comes out of the stock market to go into the bond market. a lot of times bonds and stocks moving in tendom can be a positive. do you think the amount of money on sidelines, that you feel better about valuations? i mean, 22 times, that's rich. but when i say that to you, still a lot of money on sidelines. does it make you uncomfortable? seems to be a place where further advances are going to be

more hard-earned, seems like? >> i agree and i think coming into earnings, that's going to be important. we need to really understand, you know, running next year too low? an argument for further appreciation. look at other areas, like small and mid-cap, both trading around 16 times forward earnings, much more attractively valued. also look below the surface. x out the magnificent seven, there are definitely opportunities within other sectors, and we've seen a broadening of market participation over the last quarter or so. i think that is likely to continue. so i think if you lookperspecti. 22 times is expected but there are other opportunities. >> very good. thank you, brenda. when we come back, breaking jobs data. bringing you september's adp report. then lazard ceo peter orszag

joins us on the markets, the fed's next meeting and election day. stay tuned. you're watching "squawk box" and this is cnbc.

things improved marketedly in futures. welcome back to "squawk box." now down -- down more than 100 on the dow. down now about 90 points. nasdaq indicated down 50 or so. we are going to get data. time for the september adp employment report. steve liesman has the numbers. steve? >> good morning, joe. yeah. a little better than expected. september adp up 143,000. interesting developments on wages get to at the end. looking for 128. remember, just a private sector. the goods sector did well up 42,000. good for the goods sector. service sector powering ahead 101,000. reversing weakness seen in the last couple months. nonfarm payroll estimates for friday. 150,000. that's up around where you would

expect for the business private sector and the government sector. august adp revises up 4,000 to 103,000. looking at biz size. small business down 8,000. trouble the last months. pretty weak. medium business doing well and large businesses up by 86,000. bulk of job gains in the medium and large business. the jobs where you expected them and have been. leisure and hospitality back again. 34,000 construction. 26,000 education and health services 24,000 and business professional services 20,000. natural resources mining doing well up 14,000. the wage gains. 4.7%. unchanged for job stayers. look at the big decline for job changers. 6.6. was 7.3. lowest seen in quite a bit. joe, adp running plus or minus about 40,000. on the private sector. relative to the private sector numbers from the bls. it's in and around where it

needs to be. anything closer under 50,000 is pretty good and about the best you can do, joe. >> all right. steve, big number, obviously, coming on. does this change anything, do you think? friday? based what you saw -- does it ever anymore? >> i don't think so, joe, and interested getting the, the, what's going on in the middle east. not must change in outlook. know expectation for the fed they would do a 50 again. what powell said earlier this week. 64% for '25 and 35% for a, a 50. and, of course, what would you say? hearts sank in the economics community last night when 40 years of free trade was d denigrated and nobody stood up for free trade last night. maybe some other time we can talk about that. >> steve, thanks.

what could come next in the middle east following iran's missile attack on israel, up next. from the carnegie endowment for peace joins us and later this hour, senator tim scott will talk about what he thought about last night's performances. senator scott once mentioned as aypossible vp pick himself. st tuned. you're watching "squawk box" and you're watching "squawk box" and this is cnbc. feels like a work of art! (marci) lovely. what about the app? (luke) uh-oh! look what i did. it's ringing. hello? hello? uframe over the microphone. (luke) i think i've glued the frame over the microphone. (vo) ding dong! homes-dot-com. we've done your home work.

ah, these bills are crazy. she has no idea she's sitting on a goldmine. well she doesn't know that if she owns a life insurance policy of $100,000 or more she can sell all or part of it to coventry for cash. even a term policy. even a term policy? even a term policy! find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com.

welcome back 0 to "squawk box." standing by for tesla's numbers. expected today. expected to deliver 1,461 vehicles in q3 amounting for the first increase year over year looking to see if tesla's breakout, its specific delivery numbers for the cyber truck this time around. lots of focus on that.

iran saying its attack on israel is over barring further provocation. the country fired at least 180 missiles into israel yesterday in retaliation for israel's recent strikes on hezbollah but israel vowed to hit back. joining us now to talk what that could be and what the next move in this conflict is, is middle east program senior fellow at the carnegie endowment for international peace. following this very closely, and commenting along the way. what did you think of the strike yesterday? what do you think israel's reaction will be? >> the strike yesterday, becky, was much more significant than iran's attack last april. jake sullivan, the national security advisers called this a significant escalation and i think we're likely to see a much more significant israeli retaliation ongoing than we did last april. it's been reported that among the things that israel is, israeli security cabinet members

are deliberating or attacks on iran's oil installations or even attacks on iran's nuclear facility. this is really a dangerous moment in the middle east. >> did iran not think that was the case? will they be surprised by retaliation for the strikes last night? >> they have to be expecting an israeli retaliation. i think the position that iran felt it was in was that when they didn't respond to some of israel's actions in lebanon, and including israel's assassination of the hamas leader several weeks backing i don't responding they felt they showed weakness and vulnerable and felt they needed to respond. i think they responded too strongly and now bracing for a

much stronger israeli ret retal retaliation. >> if we were in these responses and counterresponses we've seen before, if that was the case until yesterday, what do you think this means more broadly? in terms of a regional conflagration that draws in others? if the united states already said we support israel in this, what does that mean? >> i think we're already entering unchartered waters in the middle east, and that if israel attacks iran's oil facilities or iran's nuclear facilities, you know, that has major ramifications for the global economy. oil prices skyrocketing. i think the chinese obviously are not going to be pleased with that. i think the russians, although russians are aligned, ironically may privately welcome a spike in oil prices. if israel attacks iran's nuclear

facilities there is a danger that iran announces they're now moving full-speed ahead forward for nuclear weapons. a lot of times israel takes action walt consulting prior with the united states. something of this mag magnitude they're probably working very closely with the biden administration to coordinate and cap brate the right retaliation against iran. >> meaning an attack on nuclear facilities it would have been condoned by the united states, and do you think that's likely? >> i suspect, i haven't spoken to anyone about this in the last 24 hours, but i suspect the biden administration is trying to get the israelis to exercise restraint over an attack on iran's nuclear facilities, because that, indeed, could trigger iran to try to move full-speed ahead towards a weapon, which is something the united states obviously wants to avoid. so i suspect thery're trying to

get them to look at targets which are not part of the nuclear program. >> guests on the show this morning who said a variety of things. perhaps the most extreme of that is, you know, look. doesn't matter if we do this or not now, because if they are already within striking distance, if you don't act now, the nuclear facilities, you lose your window. has would you say to that? >> iran's supreme lead ser is 8 years old. ruling 45 years now. his end game i think was always to have a nuclear weapons capability. like japan, they want to be a screw driver turn away from having a bomb. we've known for a while it's no longer a technical organization for them. they have capacity to weaponize, it's a political decision. these are very difficult decisions, but my deal is as long as he is alive, i think

iran is reluctant to cross that nuclear threshold, because they think the cost would be enormous. now, if the nuclear facilities are bombed, i think that opens up a totally different conversation in tehran. >> hard to understand exactly how it works, karim, because you're seeing if ird srael were attack nuclear facilities that would hasten iran's development of a nuclear bomb. is it possible to remove that capability completely with israel? you see what i'm saying? how can you hasten a development of something if you've totally pulled the rug out from the ability of iran to do that? >> you know, as they say. you can't bomb away knowledge. iran now has this technical knowledge, and at least one of those facilities is very hardened, it's deep underground

in a mountain and there's a lot of questions whether israel actually has the capacity, the bombing capacity, that would be able to reach that facility, and for that reason, it's often said that this is a war which israel could start, but maybe could not finish. it would require the assistance of the united states, and for that reason i think this is probably very careful deliberations right now between the biden administration and the israelis about where exactly the israeli targets are going to be in iran. >> and karim, the other nations in the area. let's start with syria and egypt. they're reaction to any of this? what they would be suggesting? >> syria is obviously closely allied with iran. they're going to denounce this. you know, i think egypt will stay out of the fray. i think the countries that are most concerning, if you zoom in on the map. the persian gulf region. saudi arabia, the uae, qatar. we're talking about sizable

plurality of majority of the world's energy production. oil and gas, and so receiving texts from friends living in dubai who are deeply concerned that this is a war which could escalate, and, you know what we know about the iranian regime is that it's shown in the past a willingness to go after oil installations inside arabia to go after proxies to go after airports in places like dubai. these are kuns, uae, saudi, qatar, which are trying to build world-class economies. world-class cities, and it's taken decades for them to do that, and if this war escalates and iran feels that those countries have been somehow allied with the united states or israel, those countries fear that iran could come by and destroy what has taken decades for them to build. >> you don't see this, are these -- there is a view this is a once in a generation

opportunity effectively, to take out iran to the point there are some who suggested, if successful, you could even cause a revolution inside that country? >> you know, andrew, the last two decades of america's experience in the middle east should give us pause. whether it was the iraq war the afghanistan war, the arab spring, about our ability to really shape outcomes. i'd be first to say this regime in iran is deeply unpopular. i would say deeply illegitimate, and i don't think there will ever be lasting and meaningful peace in the middle east until we have an iranian government whose organizing principle is iran and rather than hatred of 1979. the idea we can kind of orchestrate that from outside with military action, there's just no historic precedent of that, unfortunately, and i

totally understand israeli concerns that you have a regime which denies the holocaust. it's official slogan is "death to israel" and it has advanced nuclear ambitions. i would just say that, you know, trying to bomb these facilities is not going to resolve the problem. it may buy six months or a year. again tshs may totally change iranian calculations and if those facilities aren't totally destroyed you may have an iranian regime led by reserve nugs guards saying we're not putting our foot on the accelerator. full-speed ahead for a nuclear bomb and something they haven't done in the last years. >> karim, thank you very much. karim sadjadpour. and coming up, peter orszag. talking markets, the fed and the one year kind of anniversary of peter's heading up that, that old line firm, lazard.

stay tuned. you're watching "squawk box" on cnbc. and mining friendly wy oming. u.s. gold corp has a reserve of almost 1.5 million ounces of gold equivalents. permits to mine zero debt with only 10.73 million shares outstanding and a portfolio of world class american strategic metals assets. u.s. gold corp, join the golden age.

daughter: hey, dad. dad: hey, sweetheart. daughter: what are you doing? dad: i'm gonna clean the fence. daughter: it's a lot of fence. dad: you wanna help me? dad: aim at the wall, but get closer. daughter: (gasps) what the?! daughter: alright. dad: side to side. when you work with someone who knows a lot and cares even more... you can do this. ...you're unstoppable. (♪♪) wow... are you kidding me? you can do this. at truist, we believe the same is true for banking.

joining us to talk markets, dealmaking the fed and what he's learned in first year of head of his firm, peter orszag, ceo of

lazar and former officer of budget under president obama. good morning. i want to talk all you've learned in last year but start with maybe what you've learned or are thinking about in the last 24 to 48 hours as we think about potential escalation in the middle east and maybe some of the jobs numbers and how all overlays together on the global economy and other economy here at home? >> look, i think what we learned from the pandemic is, you really need to focus on the supply side of the economy. that is the explanation for, the primary explanation for why inflation went up and why it went down. the two rinks you've talked about this morning are important. the port strike and what's happening in the middle east. so i think it is worthy of the attention you're giving it. >> and, therefore, what do you think the true implication is over the next several weeks, and should we be focused more on the

port strike? would you focus more on potential escalation in iran? and israel? >> look, a lot of this depends on, for example, with the port strike, how long it goes on. so it's difficult to predict its aggregate impact. ruffles on a thumb on the at least, every $10 on the price of oil is something like 20 basis po points on inflation and 10 basis points on gdp. a sense what we're talking about. not catastrophic numbers but significant. >> when you think about this, therefore, and lay the election on top of this? >> we're living in a world in which, as i've been saying for a while now, you can't make business decisions without taking geopolitical considerations into account, and i think the last 24 to 48 hours underscores that. so we do have everything that we've been talking about

affecting feeding back on to the business environment. now, it's important to note that's in the context of a pretty strong economy. inflation coming down. the labor market holding up, and ceos and others seeing through some of the short-term uncertainty to the underlying drivers of activity including ongoing technology, et cetera. >> are you of the view? talking about the fed, what they may or may not do, in terms of lowering rates and do they lower rates even more if we have a true supply chain shock, and actually would lower rates, would it help the problem or the issue, if, in fact, we know what the problem is, which is the supply chain? >> so, the fundamental problem for monetary policy is that almost all of the discussion is always framed around demand shocks, and that's where the classic, you know what do you do when x happens kicks in? the fed, any central bank is worse off in the face of an adverse supply shock and there's

a raging debate about what you do when bad things happen on the supply side. there are no good answers, the short version of that. i just summarized a lot of academic debate in one easy answer, which is, you're just worse off and you face worse choices. so it would be better to have -- this is an obvious statement. better to have a shorter strike rather than a longer one, and i think the middle east is more complex because in are underlying medium-term issues there. in particular the conflict between fundamentally suni and shia states that presumably does need to get resolved. again, i think the fundamental point is, the federal reserve just faces a worse set of trade-offs with these kinds of shocks in the economy. >> i want to talk about the

banking business, ma m & a. and lina khan apparently used on the campaign trail on behalf of vice president harris, if you saw that. she's going to be going to a couple different places, i'm told, with bernie sanders in some cases. does this seem advisable to you? >> i have not seen that headline and highly unusual for head of an independent agency to do. >> so sounds shrike you think it's not advisable. also curious what you think, as somebody who, has been a long-time democrat, whether you think that is an advisable thing for the vice president? >> again, i haven't seen that headline. i don't want to be commenting on something i haven't seen. >> we're telling you about it. say it's true. >> headline where? hypothetically, if it were true. as we know, not all headlines are accurate. >> okay.

telling you right now, you would not say something -- i take your word for it. >> i believe i was reading it in a couple places. >> now he's checking. now i'm worried. >> no, no, no. >> i think the regulatory environment is going to evolve, because, again, as i've said many times before. the laws have not changed. the current occupant of the seats of the ftc and doj are interpreting the laws in different ways and courts largely have said es especially vertical deals, that's not what the law says. >> therefore, you think, no matter who wins there's goings to be a shift in terms how the government approaches these details and, therefore, telling clients, go ahead. do a deal now. before the election. doesn't matter who wins, because the environment will be different in six months from now? >> well, i think what you're seeing more c suites and boards

are willing to consider deals even if you mean you have to litigate. regardless whether the agencies themselves change there is a, i think, increased willingness to basically take it, see you in court. especially when on vertical deals, which is where the new big is bad crowd has diverged the most from, you know, precedent. >> and just curious in terms of your conversations with ceos when they get to that point. somebody says, look, if we do this, what's going to happen on the other side? is there -- do you feel there's a lot more courage to go do that than their used to be? a shift how ceos are thinking about it? what do they say to you? >> yeah. i'd say much more willingness to do that relative to ten years ago, let's say. but the environment is different than it was four or five years ago. maybe that helps calibrate the state of play. >> and finally, i want to start, or end where we started.

i said this is your one year now into this role running this story firm. what is the big lesson? >> better. thank you. better than old line. it's not old line. >> storied is a great word. >> i'll take storied. this is not your grandfather's lazard. off to a great start with a great team. total share of return more than 70%. sense of inflection points at lazard and we are continuing to build. we have actually a new hire this week, and we're going to just continue pursuing lazard 2030 goals and, again, the first year -- >> how do you see -- how do you see the banking business? i don't know. put you in the boutique banking category? but sort of when you think about your competitors, who are they right now? >> well, it's both the, the firms, the universal banks. then a set of new independent competitors that have arisen over the past decades or so.

so we are competing against both sets. it's a competitive landscape, and, again, we're pleased with how we're doing. record first half in advisory this year, for example. but it is competitive and we're going to keep competing. >> did you say old line? >> i did not say the word old line. he raised it himself. >> i think, storied. a storied firm. isn't that. >> said it. >> already said. >> that's what i said. >> i don't think i said old line. nobody said old line. >> neither said old line! >> you're planting things to argue? >> it's a headline somewhere. >> peter orszag, thank you for joining us this morning. >> legendary. >> good to be with you. >> that works. >> legendary. when we come back, south carolina senator tim scott will join us on last night's vice presidential debate. lpo anded the punches and wh heed his running mate most is

next when "squawk box" returns.

tax smart investing today, helps to build a stronger tomorrow. at pgim custom harvest, our unique direct indexing approach seeks to help investors achieve better after-tax outcomes. pgim investments. shaping tomorrow, today

if you look what was so different about donald trump's tax cuts even from previous republican tax cut plans is that a lot of those resources went to giving more take-home pay to middle class and working-class americans. >> donald trump made a promise and i'll give you this. he kept it. took mar-a-lago give you a tax cut. predominantly tax cuts went to the upper class. >> a little of the debate generals j.d. vance and tim walz. the two men got substantive on issues from taxes to energy. joining us now with his thoughts on the debate, republican senator tim scott from south carolina, ranking member on the senate banking committee, and was a candidate for president himself this cycle and also

mentioned as a possible vice presidential candidate. that whole narrative always bothers me, because i don't equate corporations with rich -- those are the -- the elites and the rich people. i think a corporate tax cut made sense. it helped. a reason factories are built here but i want to grill you on something else. >> yes. i want to answer that question, too, joe. >> you can. steve liesman just said, didn't say it this way. i ap. last night. any free trader here still around in the united states? >> absolutely. i'm one of them. no question about it. listen, the free traders are a part of the republican party. more importantly we've seen the expansion of the republican tent. we saw last night j.d. vance had -- >> for texas? >> j.d. vance had a dominant performance. what he talked about was the fact that there is an, a forgotten voter in ohio, and

pennsylvania and michigan, and he spoke specifically to them. one of the most important parts of being a good communicator knowing who your audience is and he struck the right cord for the audience that we as republicans need to continue top attract to our party the big tent party so we have four more years of donald trump and i thought j.d. was fantastic and the coach fumbled the ball early on in the game. >> how so? some sought j.d. did well others thought walz did well? >> i'm not sure what you listened to saying walz did well. coach walz fumbled the ball from the beginning. nervous. focused on notes more than audience. j.d. was clear,en consistent. coach -- >> ask you about free trade, please? can i just do that ? a big tent, saying that. what does that mean. >> people better off four years

ago want to be better off the next four years. you can look at the granular aspects of policy. they're very important. an example, walz said last night because of tax cuts we had $8 trillion additional debt. hogwash. more money came into the its landed a ton of debt on our backs. walz talked about this big government approach. jd vance said we're going to believe in the american people. he talked about the jtaj. for the single mom making $40,000 a year in '17, we cut her taxes by 70%. that's the kind of performance you want.

if you're focusing on people working paycheck to paycheck. >> do you agree with all the tariffs? do you agree with 200%? do you think people who make stuff here should be a 15% tax? that's an industrial policy, isn't it? >> i believe oftentimes donald trump talks in the abstract, number one. number two -- >> what are we to believe them? >> believe is performance. believe what we saw between 2017 and 2020. let me finish because you asked me a question. what should we believe? we should believe that a -- reducing the taxes from 35% to 20% repatriated $2 trillion around the home. we should believe that 7 million jobs he created and two-thirds were african americans, hispanics, and women. >> obviously that excludes covid, right? part of what you're saying is we should sort of take this

time-out period around covid and not include that. >> not at all. i would actually say if you look at covid itself specifically, they said that you couldn't get a vaccine in ten years or five years. >> the reason i'm raising this is because when we try to do an apples to apples between the trump administration and the biden administration, invariably what we hear is look at all of the economic growth during the trump administration, but, by the way, please don't look at the last year, and then look at how terrible we say the biden administration did on a relative basis, but, by the way, please don't even contemplate the idea that anything happened before that as it relates to covid. >> let us ask the american people are they better off now than they were four years ago? the answer is emphatically no. >> because we were writing checks with donald trump's name on them. >> lost spending power? of course you're not better off. when gas is up 50% more --

>> why do you think that was? >> obviously there's two reasons. the average american family has less spending power today than they did beforehand. the first vote the democrats took in january of 2021 -- let me finish my comment, thanks so much. $1.9 trillion of additional spending from the federal government that -- >> coming out of it. >> and accelerated inflation. inflation hits 9% in june/july of 2021, leading to the crushing effect of high inflation that we haven't seen since the jimmy carter years on the average person working paycheck to paycheck. >> we saw around the globe as it relates to inflation, if that is -- if you're going to put -- >> so do you disagree -- here's how you do it. go from $1.9 trillion from an infrastructure bill that was $2.2 trillion and an act that was $800 billion.

you add it all together. it always causes a crisis in the u.s. economy. >> and the u.s. economy continued to grow and had less inflation than just about everyone else in the world. how do you explain that? >> simply we went into covid on a positive note. this is easy to explain to the average person. the explanation is a the healthier one. economically you were healthier under donald trump. number two, we had, frankly, respect around the world, and number three, the greatest invasion across our southern border has happened under kamala harris's watch. the border czar barely made it to the border, and now that she's blind, she's now rushing to the border. she now believes in the border wall. she says our values haven't changed. she was against border wall and

now she's for it. she was against fracking. now she's for it. i don't know what there is to be debate, to be honest with you. >> it was suggested that ben bernanke did a paper that most of the issues came from the supply chain. >> i don't disagree that we had a snarling chain under the biden administration partially because of covid, partially because of poor management. aside from that, it's kind of hard to underestimate the value of $4 trillion or $5 a trillion of government spending post-covid. if you factor that in, you have to come to a conclusion that the average american is that i have less spending power because someone else is spending the money and having an inflationary effect on things going up. the thing i'd say, we heard this last night. that housing drives the administration in a major way. the question is why is housing 60% higher according to the

moderators last night. there's two reasons. number one, the cost of construction. the snarl that we're talking about. >> should we not worry about -- >> number two, the inflation rates are higher because of inflation. >> should we not worry about the port strike then? >> oh, no, we should. it's $4.5 billion a day. the bottom line is when you have folks making $81,000 a year up to $200,000, the question is 70% more in the next five or six years, number one, and number two, the biggest part of the negotiations that its not spoke about very much, they want to stop technology coming in to replace their jobs while they're asking for 77%. you can't have it both ways. >> all right, senator. inflation might be a coincidence. you talk about hot spots. the world is on fire and 13 million illegals. they've got to take credit for something or blame for something. it's all right. >> i look forward to coming back and having this conversation.

>> we'll continue. >> i want you to come back too. >> we could go longer. >> let's do it. let's come back. let's do 30 more minutes right now. >> i'm ready. >> they're taking our time away. we end at 9:00. d a rive r? uh, i don't... what's a gazebo? something that your mother always wanted and never got. or...you could give these different investment options a shot. the right money moves aren't as aggressive as you think. i'm keeping the vest.

when it comes to investing, we live in uncertain times. some assets can evaporate at the click of a button. others can deflate with a single policy change. savvy investors know that gold has stood the test of time as a reliable real asset. so how do you invest in gold? sandstorm gold royalties is a publicly traded company offering a diversified portfolio of mining royalties in one simple investment. learn more about a brighter way to invest in gold at sandstormgold.com.

let's get a final check on the markets. this comes as we're headed into friday's big jobs report. right now dow futures are down, but only by about 65 points. nasdaq futures are off by 2 and s&p down by 10. we had seen more weakness earlier in the morning especially when you rlook at th dow. that does it for us today. make sure you join us tomorrow. right now it's time for "squawk on the street." ♪ good wednesday morning. welcome to "squawk on the street." i'm carl quintanilla with james cramer and mark. the port strike is in day 2. adp stronger than expected. ou