>> the reason you are looking at this is -- >> can ai look at itself and -- it did, and it's trying to see your eyes without a mirror >> yeah, you look in your child's eyes and you can see your eyes. >> that is good. >> a final look at the markets it doesn't mean anything about where we will be at 4:00 like most days. join us tomorrow, jobs on friday, and "squawk on the street" is next. good thursday morning. welcome to "squawk on the street." i am carl quintanilla. the markets continue to monitor israel and iran and the port,

day three. >> plus open ai getting more investments from names like microsoft, nvidia and soft bank. shares of levi's set to drop double digits today. the retailer weighing the sale of its doctorate's business. >> a bunch of different pots are boiling. the jobs tomorrow will lead to hesitancy today? >> i think we have seen knowing the big catalyst at the end of the week a lot of the erratic action oversees, it has been kind of these quick silver moves overnight. you have to figure out if there's something that will get knocked loose along there, and it hasn't happened you have seen the drop in the

yen which has been a wild ride with the range, and the market confirmed its bull market status, and what it means for the fed. yields have lifted off the lows, and the two-year yield, even after you got a slight lead, it's back to a couple week high. it's nothing on the charts but shows you the direction of what we are really paying more attention to and what we prefer to see, and i think it's a good news is good news market >> the market is getting thrown around by geopolitical headlines and other things but it shows it's remarkable resiliency oil is up this week, obviously not by a tremendous amount and not by as much as maybe it would have been in the past, which would have been a real warning sign you talk about jobless claims.

225 today versus 221 even though that's a snapshot of the big read tomorrow it shows a labor market that is strong. santoli says there's slowing, but it's not slow. >> it's operating at a lower metabolism because there are less people quitting and less hiring going on, and it's an unsteady equal liberal we have gotten to. oil is trying to pop but was already at a two-year low and the absolute level is of no concern to us. it's $70 tbi >> and year to date, 0.8 of 1% -- >> yeah, the numbers err on the high side. >> yeah. >> yet they are benign

>> this is a 25 dips number today, at least in claims. >> that's how the read should be ahead of tomorrow as you get more, you know, fed commentary, and you have had a lot of it, obviously, but it was the fed chair this week that sort of put everybody on notice, like, look, it will be smaller than maybe the market was expecting and there's no reason, carl, to go 50 basis points. >> looking at the revisions we got last week, unit costs will get lower, and not only was a hard landing taken off the table in those revisions and there's no landing, and then the dudley piece asking why my forecast was wrong? >> yeah, you have to relish that a little bit unless you are one to think, well, is that the sign of maximum comfort with the soft

landing scenario when everybody is having a me kulpa it's based on how we think the economy is going to unfold the market recognizes the flex, the direction of that adjustment is more cuts versus fewer if the labor market goes down here's the other weird thing scott we were mentioning yesterday afternoon, the one sticking point in the overall macro, and if the fed is fixated on the jobs, then it shows you they are on the case i think they told you they are reserved not to be late. i think that's okay. i think that's providing a net under the market credit markets absolutely ripping strong all the big picture stuff says

fed's cut into an upswing and that should mean the market is well supported, and from 21.5 times earnings, that's a different question >> that fits the tony pascarella market right now when you distill everything down, that's what is going on. the fed is cutting and the trend is just starting and the economy is good enough there's nothing to suggest that the trend isn't up, and that you shouldn't continue to buy dips that's been the bulk of the commentary from this week. >> no doubt about it i always have that second order question of well if that's everybody's assumption, is it going to actually be that neat it probably will history says as much as you want -- i think people, it can

be self reinforcing on some of level. no need to go crazy here until we have clarity on a few things. sentiment has come off the boil a little bit, and margin debt is really lagging a move in the equity market. >> this was tom lee's point a week ago, and everybody is saying with the market here you would have expected people to be more leveraged to it and they are not. >> vicks knocking on the door. and levi is exploring a sale of the docker's brand this is what was said last night on "mad money. >> we did see headwinds in a couple areas that did not meet our expectations and that was around china, mexico and

dockers. each of those created headwinds for the business if we start with china, i would say we had our own issues and we are addressing that and put leadership in the market and that was exacerbated on what is happening in the macro market. dockers have underperformed for some time and we made a big decision which is to explore strategic options with intent to sell the business. >> kind of leads us a bit to the port strike in day three as we continue to -- i think now we have 43 chips in queue waiting to unload and we will see how those discussions continue >> if nothing else, really, along with the storms and everything, i keep saying this, it will give a mull bigan to a o of numbers apparently there are going to be

shortages so who knows what that does to october sales activity, and it's not at the point where you have to worry about something lasting that has to work its way through the economy and have a lot of knock on affects. two months ago we thought the economy was at stall speed and you are constantly checking if this is going to knock this landing off course, i think there's sensitivity. i think we are far enough along in the improvement there you are not that tuned into to that part of it. >> i feel like this is one of the most difficult consumer environments to invest in in a long time. there's crosscurrents. from the levi, there's a positive and the next negative, two more positive stories.

sk discretionary, as a sector, the staples part of the discretionary spectrum, if we consequent to call it that, like costco and walmart, things like that, they have done -- >> pretty well >> well. i can understand why investors would be in a pretzel figuring out which stocks am i supposed to invest in in this space now >> amazon is down three straight days we did get a business of news on the seasonal hiring. 250,000 is going to be pretty much when they did last year >> morgan stanley said sentiments still high and they would have to come down and there's a little hair on the immediate outlook. in general, though, what we are talking about is a spending level that is fine and lots of

lumpiness within it. you have this group of tractor supply, right, gets -- >> downgraded this morning >> where was that? >> ever core >> ever core downgrade it has a premium valuation and it's part of the subset of chains that everybody feels are the value winners and it's tractor supply, tjx and dick's, if you want to talk about general specialty chains that have scale, and they trade 2.5 times sales. i think in general discretionary is maintaining its lead, and home depot making an interesting move and breaking out and i feel like every time you want to panic about the fatigue on the consumer side, something comes along to make you realize there's an offset.

>> i saw a note talking about staples and i think people are trying to get off the staples boat thinking they are too expensive. >> yeah, and if we are not going to have a big traditional defense trade. people love utility as a ai story, and consolation brands up today, and yeah, look at the growth rate for a good sized consumer staples company in food and beverage >> morgan stanley is bullish on amazon >> yeah, they sea-tac e tactical risks. at some point it's not a far point, it doesn't seem, for any

of the mega caps the street is willing to let them fall too much and investors have proven they are not going to let them fall by too much there could be tactical weakness if you get a flood of iphone weakness notes and the stock goes down and then there's a rebound. you have bids to a degree under all those names? >> no doubt. there's a psychological bid. if you are buying the index, you are buying a huge helping of these stocks if we want to talk about apple being worth 30 times earnings in an enduring way, if you are an analyst you are making a behavioral tactical decision to say get out opposed to saying something changed in the business and we will have to worry about it >> we will talk more about apple and sales by tim cook as well

when we come back, a closer look at ai and the fundraising live do not miss the exclusive with the cfo, sarah friar stay with us (man) these men of means with their silver spoons. what will become of them when they discover robinhood gold allows others to earn their very liberal rates on idle cash. they would descend into chaos. custom ink helps us motivate our students

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a major investment hall for open ai, the maker of chatgpt raising 157 billion in the valuation round. thrive capital leading that round. mike, it's the largest vc round ever the valuation earlier this year was 86 billion here we are at 157 it now has what would match the market caps of goldman and uber

and at&t >> yeah. >> incredible. >> it doubles uber's valuation, and it has a good-sized public market valuation happening in a hurry. you know, the market immediately said, okay, $6.6 billion, that basically gets funneled into nvidia nvidia's stock gets traded and still in the sloppy trading range and that has been the path, right, the big players in vcs put money into open ai, and half of it goes to nvidia's bottom line and they capitalize at 32 times forward. i guess the question is how much has to come ar this? you see the wild estimates of 50 and $100 billion more in a hurry that the city has to build to

scale. also interesting, open ai is telling people not to invest in potential competitors. >> that was an interesting thing, the justice move backfires and helps cement the bull case for your rivals. is that common in the business >> i don't know how common it is i am sure there's, gee, it would be nice if you were fully committed to us, and the venture capital firm, i think they are trying to spread their bets. so much of the investment cycle is driven by big established trillion-dollar multicap companies, and strategic investors instead of having to go hat to hand -- >> yeah, the open ai -- where will they do it? they flipped the switch on that? >> not formerly, but they plan

to do it, yeah >> and yesterday it was argued 64% of all jobs, journalism, doctors, mental health therapists, designers, can be done by an ai. another mit economists said 5%, not 64 that's a contentious discussion right now. >> put a timeline on it. i guess you can adjust to everything over time i think what they were really saying is the human advantage is going to be diminishing in skilled type of jobs, and information processing type of jobs, and whether they go away or there's a different track for a while, and when the voicemail came around, not every secretary

lost her job >> it underscores why all the money continues to flow in the hyper scalers and to this trance f trance -- transformation technology you have had a broadening of the market, but does this reinforce everybody as to why the money has gone there in the first place and it will go there again and will continue to go there and that's why there will be a limited a capital to go forward. do you subscribe to that at all? >> i don't know if we are close to a moment where the handful of stocks steal all the ubgs jen in the market i think there's enough to go around that's one of the most bullish things is it just took the cash sitting in places that was not going to go to the balance of microsoft and mobilized it in a

way that is not really a zero sum game -- to me it's all about if earnings become a little more inclusive, if the big companies don't have as much of a hold on earnings growth, and the earnings growth isn't as scares as it was in the first half of the year, then there's no reason we should have to narrow back to that extreme degrade >> this story, though, is why we get the op edz from the dudleys who said, hey, i was wrong and i thought we would have a hard landing. why the -- i hate to single out people, but why the hartnett's of the world 18 months or so where the fed would break stuff and get defensive and then this technology came along and it transformed the way we are thinking about certain big stocks in the market >> i think what it did was short circuited the bear market and we got a higher valuation than we would have had and it distracted from the fed tightening and everything else.

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>> announcer: the opening bell is brought to you by nuveen. great little tidbit over at carson group a look at the s&p over the last five months, and it's up five months in a row and of the nine instances where we have the 28 times, you are higher a year later. >> up 10 of 11 months as well is also pretty extraordinary. everything like -- everything you look at that says when the market has behaved this way, what comes next pretty much is reassuring i don't think there has been an all-time high for the s&p in

september, for example, and it's comforting and this is why you should not expect the next pullback correction to be the big one, and this is why the market should remain on trend not that we are loaded to shoot higher from this level immediately. there's a little nuance to how you want to play that. >> let's look at the opening bell here at the new york stock exchange at the big board. and the italian-american museum celebrating italian american heritage month and reuters arguing this morning that the sector -- the office sector is poised for some relief >> yeah. >> they point to some transactions and some discounts they argue are setting a new be benchmark for the industry

>> yeah, the sector figured it out. as soon as you got a little window on fed easing and soft landing reassurance and yield stocks starting to work, they have moved there's also talk of all the back to office mandates that have kicked up again that are kind of stealth job trimming measures as well if things seem to be rationizing themselves on some level, that's one thing that you can safely worry less about is regional banks getting dragged under by this sort of thing >> maybe that's why you are going to try and get the bids on the russell for those reasons that everybody was staying away that maybe now you get some relief on that front >> you might i still think, look, right in the 2200 area, and it has not made easing for everybody, and

when you talk about the market and bring up the russell, you bring up 5%, and it's like why isn't this particular 5% of the market acting like we think it should, and maybe in earnings season if you find the companies will move back in the black and have a guidance based on lowering financing costs and things like that, you can get there. i think it's hard to fight the large cap quality type of investors. >> it's the quality large cap names that have certainly done well, the skjpmorgans and goldm sachs. they are running to the exits, sort of as fast as they can get there. >> what i am comfortable saying is they seem to be running quickly to a point where they

own less than 10% of this company. i think what's going on there and what happened with the apple stake production as wells buffett, he seems not to love banks in general right now what else are you going to get out of the b of a position you have not already recognized. i do think that it's a little bit of a challenge if you want to make a big case for large cap banks, soft landing perfect place to be. >> stuck is up 50% for the year and it's not like it has been a dog. >> absolutely. it's all house money and it's still a big position same thing with apple. i think can you say he doesn't see a ton of value in the market, and berkshire is will be to be a seller at the levels to flatten out the sort of concentrated bets but beyond that i don't think it's seeing

something in the economy or bank of america, that's a big problem. >> next week tomorrow we will talk about bank earnings not that they have been in the greatest health of how the season will go but it's something we have to look at >> you look at jeffries results and it was good in capital markets. those types of financials are doing great. exchanges, securities, brokers, and in terms of the rest, it's about how you book your setup in a fed easing environment and where yields have gone again, the credit market is telling you don't worry about any kind of potholes in credit positions right now, and that's reassuring >> you know where valuations are holding up well and continuing to go up professional sports. you see a story, the report, steve ross of the dolphins will sell 10% at a valuation of $8.1

billion. $800 million not that long ago could get you a couple franchises, and now it gets you 10% of one nfl team. we came out, what, two or three weeks ago with our own valuations list and had these guys at 7.1, i think, and this valuation is at 8.1. these franchises are going to forever be worth whatever anybody is willing to pay for them and they are proving to be somewhat indestructible. >> it's like if you went into a lab and you said we want a noncorrelated asset with trophy asset asset attributes and have the gambling overlay and the league makes sure the ownership gets its share and there's a saeurs deval

devalue -- scarcity value. >> you have big-pocketing big tech companies with the broadcasting rights and then you can expand to europe and latin america. >> $8 billion is crazy relative to where the teams used to trade, but $8 billion in the world we exist in now with the amount of wealth it has built-up and what individual companies are worth right now, it seems like a cute little side thing, you know i think all those things feed in that direction, now, when private equity is involved, the economy, the value has been realized and now we are just handing it over into a different structure. we will see? >> i would almost make the counter argument that now that they are willing to be involved even as lps and in no controlling interest it has the

potential of pushing the valuations up further. it's proven to be one of the most unbelievable asset classes ever ever >> and the tip of the sphere when the halo affects extends to soccer and the nba and wnba. >> it's interesting, nobody looks at the celtics sale and says these are pretty smart buyers and they rode this thing to this point and they are selling for reasons and there's not going to be a shortage of people in that bidding war >> yeah, there's ideniosyncrati issues there are dynamics that exist in the nba relative to luxury taxes and things like that >> yeah. guys, consolation energy, one of the top s&p gainers this morning and an interesting piece

in the "washington post" that the owner of the now shuttered three-mile island is pursuing a federal loan guarantee to help finance the plan that we talked about a couple weeks ago, restarting at least part of the plan and funneling the power to microsoft. ties in with comments out of google that they are willing to consider similar sources of energy as we talk a lot about where this energy will come from >> seems like they will consider any and all, and that certainly includes nuclear -- it's one of those things where it allows you to have a growth overlay to a traditional no growth sector, and vistra is ahead of constellation, so energy and rg is another one clearly, the steam is strong and i continue to feel long-term and not look back on the ai era and say utility were the real

winners here >> it was the best sector over the last quarter >> yeah, a lot of things working for it >> this as ai demand and the demand for power only continues to increase. >> yeah, it should continue. if you buy the xlu, you are getting a lot of, like, you know, basic utilities that are going to have great pricing power for a while, which is fine, but i don't think it all work the way it did when rates are coming down and there's a whole other dynamic. >> they are going to be selective winners but even the selective winners may have more upside than in the past? >> yeah, put them in a different category we should mention nvidia is up 2.3% it has been popping around this area it has not been able to get above and stay above the mid 120s the old highs, and it's at a

critical point and it peaked in june but for now you see it making another effort here he says 128 is what you have to do to break the downtrend. >> we have been watching some of the repeated stock sales by nvidia, and in fact the sector at large, the semiconductor industry sold 1.35 in stock in q3 >> i think jensen wong was a huge piece of that >> yes >> a massive first half of the year, those stocks went crazy. what is interesting about nvidia is, as everybody keeps saying, the state of valuation continues to improve because earnings are holding up and the stock is doing nothing. the consensus price target is, like, 150, and they say it should be a 3.6, 3.7 trillion

company already and everybody already likes it and i think that's why it's stuck in its tracks here. >> yesterday they talked about blackwell and the new wave of ai >> what we're looking at now is the beginning of the next wave of ai, the biggest wave of ai, and this is about companies around the world using ai to be more productive as their digital employees as agents and co pilots, however people describe them, and ai, the way they build their products and the products they build >> you mentioned the percentage of buy recommendations >> this is in the top ten of the percentage of by recommendations -- >> and for good reason what do analysts do, they look at the earnings momentum and the

end demand it's interesting, although it's the biggest ai wave until the next one probably, right it's reinforcing the exact same story. >> the question about the delay on blackwell lasted for about five minutes, right? he talks about and the street continues to focus on the demand, in his words, he says was insane he did a keynote with david solomon where he described the unbelievable overwhelming amount of demand that they continue to see and it's why we look past any potential delay because we know it's coming and we know the demand is there. the other thing he got me thinking as i loistened to the other part of the talk, they have a tremendous base and it's not just a first-mover advantage but a motor, because they look

at their customers as an installed base, and gaming -- not even ai, but gaming, and then ai as an overlay, and he was not talking about apple but it made me think about it that way. >> the argument is out there is that one man's margins is another man's opportunity, how long can you sustain a 90% margin >> yeah, and do the buyers have an incentive to try and diversify a way, and more simpler than that, everything we are talking about, you know, the stock at 125 in june kind of understood that, and that's why you have to wait for it to really prove that next year's numbers will hold up and the market is willing to bet behind that >> speaking of numbers holding up watch the autos today. we mentioned tesla and some of the cessations of sales of one

model. they don't believe there will be growth robotaxi coming up on the tenth. that's one story and stellantis, the ceo there says market conditions are brutal especially in europe where you have the chinese competition and the prospect of higher tariffs toyota, postponing production of evs and slowing sales. >> yeah, it's a soggy demand picture in general for autos a lot of it, i think, you know, it has been recognized and you had all the warnings you mentioned. even talking about, you know, the hurricane is going to actually really impact short-term sales in north america. when it comes to tesla, that's the big question of what they are trying to address, trying to keep the volumes flat year over year you are always in the stock and it's a massively overpriced call option or whatever they do next,

and that's why i was saying yesterday, yesterday was a day when they care about the business funds mentals, and sell to the people that think taxi is magic. >> was it jonas that downgraded -- sarat has been a long time holder of general motors and finally sold it and called it a terrible investment. you know, look, there's a lot of autos sitting around >> chronic over capacity we have known that forever there's incentives against -- you have the national champion-type of manufacturers and people want to protect that. >> although reuters yesterday, citing people familiar, ensuring investors there's no need to panic for decelerating demand for evs. we will see how much strength is in that market which is

obviously still evolving and let's get to rick santoli on a busy moment. >> we have data points for the top of the hour. final read pmi, 55.4 midweek goes down to 55.2. 55.2 would be the weakest level going back to june of this year. 14.0 now replaces 54.4 on the c composite. 54.0, that would be the weakest point from june. there's a bright spot here unlike manufacturing these numbers have been above 50 all year on the composite and have been above 50 going all the way back to the beginning of last year with respect to the services, so these numbers are holding up pretty well

yields, well, ten-year yields briefly outpace yesterday's high yield as we see right now as we sit, we are up three basis points on the twos and tens. "squawk box" will return after a short break. 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.

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got some pronounced weakness in the dow today down 322 on the index. only two xoenents are higher ibm and nike and led lower by the financials, travelers, goldman some materials and industrials caterpillar, dow, jpm toward the bottom of the list 'ltahas lost 5700 and 5691 wel ke a break "squawk on the street" is back after this

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and gulf coast ports nearly 80% of perfume and cosmetics, beverages and spirit, vegetables and fruits, 70 percent of meat, fish, and dairy and half of all vehicles, furniture and apparel according to wolf research fresh fruit is one category to watch. not only perishable, distributors couldn't stock up ahead of time, but imports are half of u.s. consumptions. 90% of cherries, 82% of hot peppers and three quarters of bananas the most popular fruit in the u.s. according to the american farm bureau now soft commodities are in focus about 80% of sugar, coffee and cocoa. we might not see that big of an impact on sugar prices given a quarter of consumption is imported the same cannot be said for coffee and cocoa coffee 70% and cocoa 100% according to wolf. as they said, this could see

more proper on the already strained supply chains cocoa prices up 70% this year. >> that's a good point cramer has been sharp on this point as well about fresh food i guess it's because not just the perishability, but you can't reroute it to west coasts. >> exactly you saw with retailers they've stocked up ahead of time companies have been ahead of this to the extent they could be when it comes to the fresh fruits that americans rely on and also things like seafood and meat, you really can't keep it in a warehouse a long period of time those are just in time supply chains those will be the products we will see that inflationary impact. >> we will get fresh data on freight container rates tomorrow we're coming off of a bit of a lower base and see if this has any impact this week thanks, pippa stevens. scott has been watching chinese names. >> only because we've been following them for a week straight since the stimulus, of course, and, you know, some of the tech names i've been looking at are now down on the day

alibaba is down a couple percent, baidu down, they've been up like, gosh, like 30%. >> easily. >> something in the last ten days. >> yeah. >> i thought that the comments yesterday from stan druckenmiller, they were being s circulating around, no interest in investing there the investable versus uninvestable idea, tepper saying buying everything there. it's very investable now maybe a game changer stan, these guys have been long-time buddies. >> sure. >> two of the greatest ever. >> it's the pittsburgh thing >> for sure. >> a lot definitely the pittsburgh thing. but just interesting to me how you can have two legends of the business who know each other's sort of investment styles as well as anybody else can come off on different sides of a particular trade. >> maybe your definition of an investment would you actually want to just own those businesses indefinitely, or maybe tepper feeling like as long as they are in this mode of being serious

about stimulate, it's really going to float through in a pretty dramatic way through the markets to the economy, and it just builds you a little bit of time and room to have this trade work i mean, if you look at the depressed levels we're coming off of, it's nothing the fxi at 34, the old high in the mid-50s. >> i thought you said trade. >> we will see you at noon. >> we will. >> and mike, maybe before. thanks, guys scott wapner and mike santoli. dow down 300 west texas back above 72 when we return an exclusive with en cfo sarah friar on the big fundraising round. stay with us

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medicare supplement plan from a company like humana just might be the answer. . good thursday morning. welcome to another hour of "squawk on the street. i'm carl quintanilla with morgan brennan at post nine of the new york stock exchange. david and sara have the morning off. dynamics remain intact, watching israel and iran, port strike day

three, bunch of macro and awaiting the jobs number tomorrow where the estimate does remain around 150, 140 or so we will see what we get. that is keeping maybe some a little tentative as we're circling around 5700 s&p. >> all the chatter about the fact that valuations are looking rich ahead of this anyway. 30 minutes into the trading session. here are three movers we're watching levi shares are falling after mixed result and a guidance cut, the company expecting sales to grow 1% versus a prior range of 1 to 3%. the dockers brands, a major drag sales fell 15% and the company is considering a sale of that brand. shares are down about 8%. the china stimulus rally losing steam overnight alibaba and jd.com are under pressure alongside the hang seng. keep in mind we had a strong start to the week. nuclear energy names, after the ceo of google said in an interview the company is considering using nuclear energy

for growing power needs around ai vistra, constellation, best performing stocks on the s&p not only today, but for the year as nuclear continues to gain ground, at least the possibility of it, carl. >> yeah. fascinating story. markets moving higher on some of the data points. let's get to rick santelli hey, rick. >> let's start with the ones most likely making us move higher if we look at ism services for the month of september, we're expecting a number around 51.7 our last look was 51.5 zoom, zoom, zoom 54.9 54.9 that's the best since february of last year when it was 55.0. now, if we look at the prices paid index we're expecting a number around 56 this one moving the wrong way which can help explain why interest rates are moving up, 59.4 that's the biggest, the worst, of prices paid since the

beginning of the year, january, when it was 64 if we look at employment in front of tomorrow's jobs, jobs, jobs report, weak side, 48.1, sequentially following 50.2. once again, we revert back under 50 where we were in june finally on the new orders front, this one is a strong one 59.4 59.4 is the best also since february of last year, as the headline number was. that most likely grouping accounting for the pop in yields factory orders expected up 0.1, comes in down 0.2. last month's slightly revised from 5 to 4.9% ex-transportation down 0.1 durable good orders, final reads replacing mid-month remains. unchanged, remains unchanged ex-transportation remauns up half of 1% non-defense ex, a proxy for

capital spending improves by 0.1 to up 0.3 and that would be the best month since june of this year and finally on the shipment side instead of on the new orders side we see shipments down 0.1% and we all know that we have had some problems in that category. we want to continue to monitor what lies ahead, especially considering the word shipments takes on an added dimension considering the strike carl, back to you. >> all right rick, thanks for that. a lot of good information. rick santelli. meantime global equities on track for their first weekly loss in about four as tensions in the middle east escalate. our next guest does expect modest gains over the next 12 months saying multiples have appreciated an the estimates for '25 might look aggressive. janus henderson, portfolio manager, jeremiah buckley joins us, thanks for the time. good to see you. >> thanks for having me. appreciate it. >> i guess more near term trying to get through october, seasonality, the election, is it

going to be a month of hedging and what do you think we need to get past, other than the election, obviously? >> yeah. so i think these employment reports continue to be very important to the market, and i think that will be the biggest driver in the short term as we think about long term, we think the fundamentals around economic growth continue to be positive the fundamentals around companies' earnings growth continue to be positive and, you know, as you mentioned, we have some kidnappers around the multiple expansion that we've seen so far this year. it's been a great year but the equity market up 20%, but earnings only up about 10% >> what are your earnings estimates for next year and do you think the consensus is too hot? >> yeah. so the consensus so far for next year is a about 14 or 15% growth i would be more comfortable around a 10% growth assumption for next year. i think within that consensus numbers there are a number of sectors like cyclical sectors where there are pretty aggressive improvements in

earnings growth for next year and hopefully that will be the case with lower interest rates and stimulus in china, but that's not something that we'd want to bank on yet. i would feel more comfortable with a little bit more modest increase in the overall consensus earnings estimates for next year. >> the s&p 500 just turned positive, albeit fractionally and we're basically moving off the lows of the day here looks like you have major averages looking to attempt to rebound. the ism services data is pretty strong how much now hinges on a jobs report tomorrow and is that even enough if it were to come in softer than expected for the fed to cut 50 basis points. >> does it matter how much the fed cuts through the end of the year, as long as they get to where they say they're going to get next year? >> i don't think whether it's 50 basis points next month or 25 and 25 or if they pause, i don't think that's going to have a dramatic impact on the outlook for '25.

i think the data continues to support them continuing to ease and recalibrate as they say. we can't focus too much on one month of job reports, but the trend is moving in the right direction from an inflation standpoint and a labor market balance standpoint, so that's encouraging. and so we continue to believe the fundamental economic backdrop continues to be positive. >> we've been talking about geopolitical risks all week and the market continues to keep an eye on that and as we get headlines and there's the expectation sooner rather than later perhaps once we come out of this holiday, you see a retaliation from israel against iran, how do you navigate that here and given the fact that valuations for the s&p are already, arguably, pretty rich by some metric, is that an exogenous threat in the near term or something that could help trigger a pullback? >> yeah. it seems that we've been battling through a number of exogenous threats over the last year, even a couple years, and so this is certainly something

that we need to keep an eye on and hopefully it doesn't escalate further and have an impact on global markets you know, again, it's something we need to watch i think in the short term i don't think it's going to have a dramatic impact on markets, but certainly we need to watch what happens with energy prices and the flow of goods. >> energy prices at least until now, until recently, have been a bit of a tailwind for the consumer and some of the revisions lately about things like the saving rate suggest maybe the consumer is not as in dire shape as some thought how confident are you that we maintain consumer consumption trend trends we've seen holiday spend might be up as much as 7. >> we wouldn't put 7% growth in our models but the fundamental backdrop for consumers is positive consumer balance sheets continue to be in healthy spot. if you look at debt service as a percentage of disposable income

we're below long-term normal levels that's encouraging for consumers. we've had strong equity market gains which is helpful consumers are earning more interest on their cash balances with high money market levels and wage growth has continued to be solid disposable income growth in the 35% range and so if we keep, you know, savings rates at a similar rate, we would expect 5% growth continuing for consumer spending, which is certainly a healthy level and supports the type of economic growth that we're seeing today. >> yeah. we will see if these -- if the coming retail sales prints can back up the last few jeremiah, good to talk to you. janus henderson's jeremiah buckley. energy, oil prices higher as tensions in the middle east continue energy now on pace for the biggest weekly jump since january. traders are working through the possible escalation risk between israel and iran in the coming days we did get to 72 today, libya is putting on full production once again. people are watching call options

in the usos. >> that's right. you've seen this inventory build in the u.s. to your point as well, so -- and then we've got stimulus in china. so again, we talk about cross currents in the equity market, cross currents in the oil and energy markets as well the geopolitical tensions are making defense stocks a key focus this week. lockheed market, rtx outperforming the s&p. they're all trading at all-time or multiyear highs lockheed on pace for its best week since august, even though we're seeing a breather today. hiking its dividend and stock buyback and basically intensifying conflict in the middle east putting technologies particularly missile defenses to the test it also speaks to what's already been a strong and growing demand picture as countries aernlds world boost defense spending and u.s. greenlight more sales to allies israel specifically the u.s. has been dolling out nearly $9 billion in military aid and direct u.s. military support

ongoing replenishment of stockpiles in the region the implications jefferies says the conflict further reinforces financial support for israel and shines a need on missiles, missile defense, areas that have been well supported in recent supplementals and budgets. however, ramp in these areas are likely more dictated by supply chain than demand given planned production increase across the board. that's really been the dynamic for a while now, actually. you've got strong backlogs, but questions about how quickly companies can deliver and how costly it is for them to do so sales have been surging now profit growth and margins are playing catch-up this is going to be in focus with this upcoming earnings season again keep in mind after big rebounds this year the group is looking expensive by some measures jeffries noting the group is trading at an average free cash flow yield of 4.9%, a 17% premium to history and ebitda multiple 14.9 times, that is a 13% premium.

but certainly have caught a bid and i would say, carl, names like northrop grumman has just completely rallied and pushed through the previous highs just here as we've had these conversations and seen these tensions in recent weeks. >> some of the sell side caught off guard. an upgrade of raytheon today they only go to hold. >> yes i think it speaks to valuations here and what you' you're yg got have to see and guidance for the names as well. the other area we don't talk about them as much the small and mid cap players. many drone makers like creighdos, these stocks have been on a tear this year shorter lead cycles to develop and produce and deliver these products drones have become the bigger piece of the war fighting picture whether it is in the middle east or whether it is in ukraine. you're seeing skincredible amous

of demand. some of the hottest investments plays as well as you're starting to see more of these defense tech names take on more and more u.s. defense dollars too. >> yeah. we will watch it closely meantime, dow just erased almost a 300 point loss as the s&p has gone positive back to 5716 the road map for the rest of the hour that includes the china stimulus rally losing a bit of steam. is the rally there over already or can the gains continue? >> plus, a look at one group that wants former president trump's 2017 tax cuts to expire. find out why and who >> and openai nearly doubling its valuation to $157 billion in this new round rsrah friar will join us in her fit interview since taking the role, coming up next 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?

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welcome back to "squawk on the street." openai closing that long-awaited funding round in a valuation of $157 billion raising $6.6 billion one of the largest ever funding rounds for a private company. let's get to kate rooney for an exclusive. good morning, kate. >> carl, good morning. we have news to break before we get to our interview with sarah friar. on top of the $6.6 billion raise, openai has raised $4 billion in a revolving credit line this brings the liquidity total to $10 billion for this round. one of the largest private fund raises we've seen in silicon

valley history and fund line joining us to talk about that is openai cfo sarah friar thank you for being here. >> thank you for having me. >> let's talk about the news that just broke as we went to air. you are raising debt in addition to 6 plus billion in equity. how did you think about the cost of capital and talk about why raise debt in addition to billions of dollars in equity here >> well, thank you it has been a great last couple days $4 billion in the revolving credit facility is undrawn at the moment really to give us flexibility with the business. particularly as capital needs might shift, we want to know it's there for us. the $6.6 billion in equity, now that's really how do we invest in the business from here. i think what investors saw were three things they saw the vision, openai has really led what ai can be, what ai will be, chatgpt kind of set that clock going about two years ago. i think secondly, they see focus. we are focused on native ai products so we just released 0.1

preview as you know, the only model that really stops and thinks before it respond us to and then advanced voice model. the way we are right now, super fluid. the scale, we led with numbers as we talked to investors and to the banks, and what they saw was 250 million weekly active users. i just checked before i arrived, we released 200 million weekly actives in the end of the august by just a month that number is up 50 million. we now have great investors, the best banks in the world, really joining team oei. >> i was going to ask you about some of the growth chatgpt, for example, you mentioned the 50 million users in just the past month or so talk about some of the growth and forecasting that would justify doubling your valuation and the $150 billion what's justifying that number talk about the revenue growth behind that. >> as you can see with the user numbers we have seen growth,

this is all done inabout two years which blows my mind. i've never seen anything like it in my career in technology it's consumers, so a lot of that is chatgpt plus. but it's also businesses and even the smallest of businesses. what i look at in our enterprises businesses we have customers around the globe and revolutionizing education and health care. these model cans work on the toughest problems in the world backed up by revenue investors are not going to invest at $157 billion unless they start seeing it come through the business model and that's what they got excited about. >> new major investors nvidia is one that caught a lot of attention i want to ask you about their involvement and some of the skepticism that the money you're raising from nvidia is funneling back to their chips in terms of you guys buying chips that really returning to them in some ways how do you address some of that

skepticism and criticism >> nvidia, microsoft, these are incredibly important partners in our ecosystem. i would say our relationship with microsoft if i start there, has been generational partnership, satya and sam saw together, is incredible when you think they put that investment together and the partnership together nvidia is another core part of that what they're doing with gpus in the tech stack is what's enabling a lot of this it's not just those two. it is a much broader ecosystem that's forming and this is what's also important about the fundraising we're doing right now and as we continue to grow, is we're bringing along a whole ecosystem. some talks about this as the age of intelligence. i think how it becomes an age where it lifts people from a prosperity standpoint. we joked earlier, european who masquerades as an american i think long and hard about how this technology is going to go into the world and how it's going to lift people generally

speaking by providing everyone with human-level intelligence. >> morgan has a question for you. >> sure. >> thank you sarah, it's great to have you on the show and appreciate the insights given this major funding round and the news that came out this morning. i'm curious about the competitive landscape here it's been pretty well reported in the last 24 hours that investors into this funding round had stipulations attached meaning they couldn't necessarily invest in other competitors like anthropic and xai and others is that the case if so, how does it speak to how openai is thinking about the evolution of this competitive landscape? >> so first and foremost, we really want to make sure the ecosystem continues to develop from here. look, we are in such the early innings. i was listening to someone talk about how much of what with now think of as the market cap of the internet existed about two years after net scape launched

and it was about 1%. think about two years after chatgpt launches, are we just at 1% of the market caps that will be created in terms of this round, we want to miake sure our investors are focused on openai but, of course, they would invest in the ecosystem and this round is no different from any other round in that regard. >> we've seen high-profile leadership changes this year including you joining the company, but also quite a bit of management turnover and high-profile departures as well. how disruptive is this or should we be thinking about this as a new chapter and if so what does it say about that new chapter? >> i think it's like any company i've been at as they evolve, the leadership tends to evolve, the people at the company tends to evolve and that is usually a very, very good thing it's not to say that the folks who were here haven't built something incredible i keep saying about this round

people congratulate me, no, this is congratulations to you. i stand on the shoulders of giants literally and those folks who have been with us on this journey so far, this is a huge testament to what they've built, they've discovered, something just truthfully unique and different in the world is the company going to keep evolving from here of course. when your valuations is lifting the way it lifted, revenue is lifting, more importantly when you're starting to see customers come at the scale of 250 weekly actives, you're going to have to keep adding to that base here at the company. we're growing very fast, but we want to make sure we use our own technology as well i was talking to sam yesterday and just saying one of my goals is how do we create the company of the future using this technology and it's going to start right in my backyard, so i want to create the finance function of the future using a lot of our own ai tools. >> openai started as a nonprofit was that part of this deal the company needed to convert to a for profit and when should we

expect that conversion to happen >> we have discussed this, that we are looking into how we restructure from here. but i think as we do that, a couple things have to hold absolutely true. number one, we're an incredibly mission driven company and nonprofit is vital to that and the mission of the nonprofit and the company is to make sure we bring agi to the benefit of humanity really important bringing agi, but thinking about the benefit side to all of humanity beyond that we want to be kind of a more traditional company. why make things complicated that don't need to be complicated we need to continue to get investments so we are sustainable long-term participant in this ecosystem and it's a company that works for all of our stakeholders. >> what about sam altman there's been a lot of questions about how much equity he's going to get and pushback from the company. can you give us clarity on what his equity stake is going to be?

>> nothing i can disclose here our chairman of the board put out a statement last week saying there have been conversations with the board, but nothing, nothing has been set in stone right now. sam is so interesting. look, he is so driven. i think he said while he's like if you can't imagine why i would be so excited to just be bringing agi into the world, you've kind of missed the whole line of thinking here. >> what about profitability? you have helped take two companies public, ceo of nextdoor and helped take square public how are you thinking about profitability and is there any pushback from investors on wanting to get there in the near future >> it's always a balance when you're growing, particularly a tech company, where you see a massive tam in front of you. you want to go fast and that means investment that said, you want to make sure you're growing wisely so you're not over extending in places you shouldn't be extending we're here to build a business model creating free cash flows so we can continue to invest in the technology that we're bringing to the world.

w we want to make sure everyone has access to solve difficult problems think of profitability in th spirit of how do we continue to grow that investment piece rather than just profitability for profitability sake. >> what about an ipo when will openai go public >> definitely not announcing that yet you need to give me more time. >> i think that is a question. at this valuation baked into this would be some of the growth in just the value of the company. $150 billion is more valuable than goldman sachs and lockheed martin and some of the companies that you helped take public. i wonder what should we expect going forward? i would think you're going to need to raise more capital, if not the ipo route, where are you going to go to tap more resources and when will you need to raise again >> look, we have really big aspirations of how do we keep investing and what drives this technology it's compute first and it's not cheap. it's great talent, second.

and then, of course, it's all the normal operating expenses of a more traditional company to that end we do want to make sure we're being creative in where we can go to tap capital sometimes that's public markets, debt markets, sometimes structured finance, there's a lot of things i need to get my fingers into as i look forward over the next several quarters, but i think there is no denying that you -- we're on a scaling law right now where order of magnitude matter the next model is going to be an order of magnitude bigger and the next one on and on and that makes it capital intensive it's a really different technology cycle than if you think about the last cycle which was much more bits and bites, a lot cheaper. this is much more like the telephone being brought, dropping cables, electricity going up, the railways i think you're in much more of that sort of capital intensive cycle and that means for us, too, we're going to have to be careful and smart to raise

money. >> finally i want to talk about microsoft. you mentioned one of your biggest investors. have their privileges changed and what privileges will they retain as an early investor? i wonder about access to information and, you know, the things have changed and you have raised more money since you started that relationship with microsoft. what can you tell us about it? >> the relationship is strong. sam and satya got together back in the day when no one kind of believed and they've done some incredible things to help us get to this point where we're at that said, we're getting much bigger and so it behooves us to put a diverse group of partners around us at the table that relationship with microsoft is very deep we're going to continue to make sure we're sharing ip back and forth, products we're launching together we're really impressed with some of the things they have done on the copilot stuff and they've been a great supporter on the technology side. >> what about chatgpt 5? when can we expect that? >> play around with 0.1 preview first. it is incredible just the way it

stops and thinks and get into your mind we're used to technology that's very synchronous. ask a question, you get an answer back. that's not how you, and i might talk you might say prep for this, think about models that move this way long horizon task is the phrase we use it's going to solve harder problems even on the scale of drug discovery sometimes you'll use it for easy stuff, what can i cook for dinner that will take 30 minutes and sometimes it's how could i cure this particular type of cancer that is super unique and only happens in children right. there's such a breadth of what we can do here so i would focus on these types of models and, you know, what's coming next. it's incredible. >> fair enough sarah, great to see you. >> thank you. >> we will see you soon. carl we will send it back over to you. >> thanks a million or $157 billion. kate, thank you. kate rooney and sarah friar. coming up what the results out of one spirits maker is

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welcome back to "squawk on the street." i'm silvana henao with your cnbc news update. the israeli military issued a warning to residents in 20 more towns in south lebanon to evacuate immediately as it steps up its ariel and ground offensive in the country the orders cover areas located north of the united nations declared buffer zone that was set up after the israel-hezbollah war in 2006 and it could signal an expanding israeli incursion. lebanon's health ministry says nine people were killed in an air strike in a beirut neighborhood overnight the strike in the capital took place within walking distance of the prime minister's headquarters as well as many foreign embassies. and in the united states, nearly 200 people have been confirmed dead now as a result of hurricane helene. more than half of the deaths were in north carolina where entire communities were destroyed by several feet of fast-moving water. meanwhile, another powerful storm churning in the atlantic

ocean, hurricane kirk is not expected to make landfall but it could bring life-threatening surf along the east coast this weekend. i'll send it back to you. >> sylvania, thank you. constellation shares are in the red. down about 1%. brandon gomez joins us with the highlights from the quarter. >> it was a beat on the top and bottom line, shares reacting to the mixed results. the company posted its $2.25 it billion loss for its wine and spirits business we knew that was coming. speaking of wine and spirits down for the quarter, net sales fell 12% beer saw net sales increase 6% beer depletions came in lighter than expected signalling a weakening u.s. consumer. executives are going to have to address that weakness on the call just getting under way and important note, the latest data shows constellation's popular mexican brands modelo, corona

and pacificco moving well grew over 7% in the latest two-week period year over year after a weak july and august broader industry fell 0.6% i'll tell you, constellation is still the biggest gainer this year up 3% investors today will benefit from hearing more about the impact from the port strike clarity on its struggling wine and spirits business and then constellation tends to break out the hispanic american consumer who drives sales higher employment in the past has led to less spending, but if we don't get those comments today on the call you can tune in tomorrow, ceo bill nulands will join jim cramer for an interview. carl. >> i would love to get your thoughts the conversation keeps turning to nonalcoholic beer in particular, and i don't know whether you think that's a glp-1 phenomenon or cannabis phenomena or something else? >> you hear jim is mentioning as well the impact of the glp-1 weight loss drugs on drinking

trends the shift from gen-z consumers of legal drinking age to nonalcoholic beverages the rise in popularity of brands like athletic brewing, one of the top 20 brewers in the country and they don't even have alcohol in their product. definitely a phenomenon that we will keep tracking and you see the companies like constellation brands and molson coors getting in on the action too. >> first of all, thank you i mean this is like low fat cake to me. i don't get it i would note some of the beer brands are moving by rail so not necessarily affected by the ports. >> that's a great point. china related stocks losing steam today, but still up big on the week after their best performance in more than a decade how investors should proed tethbrk.ce e) homes-dot-com is a n, elevated home-shopping experience. beautiful design, tremendously rich content, and, my favorite touch, it's the only site that always connects you to the listing agent. feels like a work of art! (marci) lovely. what about the app? (luke) uh-oh! look what i did.

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. welcome back the rally in china stocks fading overnight with the hang seng breaking a six-day winning streak after hitting its highest level since january of last

year china etf which accounts for half of the $3.1 billion that have flown into china etfs over the last month well here with more on whether the rally can continue, investment officer brendan aher. great to have you on set and that's where i'm going to start. can it continue? and how much of this hinges on more stimulus from china >> yeah. 100% we think investors should be looking through the windshield not in the rearview mirror because we've seen the monetary policy bazooka unleashed the fiscal policy bazooka has yet even to occur. over the next few weeks by the end of the month you will see an articulation of what they will do as a consumer vouchers, what are they going to do to get domestic consumption up? a lot more good news coming. >> speaking of mark on overtime a couple weeks ago bullish on china and one of the points he made is that it's really the chinese that drive the mainland china markets. >> yes. >> where they think here, you

know, we have much more global play so how much does that matter >> it matters a lot. in terms of our flagship is focused on the growth stocks outside of china but you have to look at the shanghai and shenzhen stocks owned by investors in china that's kind of for us kba or china a, that i think next is going to be like nothing you've ever seen. 60 brokerage houses announced they're staying open during the national holiday to open brokerage accounts you have the pboc said they're going to give $500 billion rnb, call it $7 billion, to mutual fund family, insurance companies, to buy stocks and if that doesn't get the shanghai, section zen, kba market up they will give another $500 billion so it's -- you know, there's a lot coming and i think a lot of good news coming, just this is going to affect the economy. it's going to be a very positive effect that will take time, but, you

know, good economic numbers coming will flow into the balance sheets of the companies we hold. >> do you think they're limited by their debt? >> i think they don't have a supply problem they have a demand problem so yes, i mean debt on the real estate side is why you're seeing all of this policy support, but government debt is only 60% of gdp, so the government has a huge amount of leeway in terms of dry powder they can unleash they're only running about a 2% budget deficit that could double or triple geared to the consumer. >> do you think they're targeting asset prices or confidence or yout unemployment what do you think is the target? >> you know, all of the above. they've actually in the statement out last thursday from president xi he actually explicitly said employment is a problem. acknowledging it they know real estate prices have weighed on consumer confidence, weighed on the consumer, and so they need to stabilize. they need to get those prices

up but then again we still haven't seen what they're going to do to stimulate the consumer is it free money i don't think they're going to do the full monetary theory like helicopter money here, but they're going to do something. that's going to be a very good headline as it comes out until next few weeks. >> we will be watching it closely. thank you. >> thank you. still to come this morning, the big tech playbook as we go into the q4 with the mag seven under water over three months. we will talk about what isvestors need to know after th

technical take on the fourth quarter sifting out the best nesep.cts with the best tu tu in to our market navigator segment at 2:00 p.m. eastern

billions have been flowing into ai this week as you know as openai closes that mega funding round. the cfo sarah friar talking about the opportunity just in the past few minutes take a listen. >> i think what investors saw were three things.

they saw the vision, openai has really led what ai can be, what ai will be chatgpt set that clock going about two years ago. i think secondly they see focus. we are focused on native ai products we just released 0.1 preview the only model that stops and thinks before it responds to you. and then advanced voice model. now you're interacting with the technology super fluid and finally the scale. we led with numbers as we talked to investors and to the banks, and what they saw was $250 million weekly active users. >> here to talk the ai winners and losers in the public market, we're joined by brent. how are you doing? >> doing great thanks, carl. >> it's good to see you. i wonder whether it's these capital flows or even some of the in energy supply dynamics in the last couple days are your favorites evolving? >> i think right now our favorites is it ill are in mega

cap internet think about meta and consumer and enterprising and amazon and microsoft so the picks haven't changed. what we're seeing in our coverage is three things for ai. obviously, as sarah friar commented and congrats to her, capital matters, second is users and third is data. this ai game there are few that can play so we figure with those companies that have those characters and we mentioned meta and amazon and microsoft clearly many of these names have been outperformed. you look at energy, with vst, nvidia chips, dell, enet and networking, the action game in ai is away from our coverage, so it's in this infrastructure category, but we think it will come to applications and come to software it takes time. as i've said you can't live in the building until you build it. all these ai buildings are getting built and they're not up yet. you can't hang the ai software

in these homes yet and that's why investors still see s-curve momentum in the other stories and we continue to see software lag. we do believe software will play catch-up and it's the point of the incremental addition to the infrastructure trade with semis and hardware will start to hit a peak. >> yeah. >> so we think that has to happen for software to work. right now it feels like more of a '25, '26 event for ai software to take hold. >> it's interesting you say that, especially since openai wasn't the only news ai news of the past 24 hours. nvidia's jensen huang was on "overtime" yesterday, has struck this deal with accenture, is pushing further into enterprise and then industrial ai and really sort of creating this i think as the two ceos called it connecting fabric to connect nvidia's bigger stack and software stack with the companies that are going to be looking to deploy these ai

capabilities, so how quickly does it happen and with nvidia pushing further into that, how does competition with megacap tech names and others now continue to change >> consumer ai is going to happen quick because if we look up a recipe or a on a device, ram fictions are big, right? if we get the wrong information, jeffries put in the wrong information because a.i. told us to, they'll go to goldman sachs. i think enterprises are taking it slowly, taking test pilots very slow, on-ramps onto these a.i. journeys. i think ultimately we're, as they say, we're all going to underestimate the long-term, we're going to underestimate the near-term -- overestimate the long-term opportunities. jet lag. clearly, it's going to take time it's going to take time for this

to play out. and this is not going to happen overnight. there are only a few leaders i think we're at point two, trying to figure out who's going to lead this obviously, openai, anthropic, a handful of independent companies, a handful of large cap stories. but we're super, super early in this journey. >> you talked for a while about how the hardware analysts are having more fun than the software analysts. maybe that will change in the near term. good to see you. thanks coming up on "money movers," why september was a turning point for the housing sector redfin ceo glenn kelman joins us to explain that's at 11:00.

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welcome back to "squawk on the street." one group secretly might want the trump tax cuts to expire charities. >> one unexpected consequences of that 2017 tax cut was a decline in charitable donors the standard deduction around $29,000 today for couples. when you take the standard deduction you don't itemize. it simplified taxes for a lot of

americans, that was good it also reduced the tax incentive to give to charity for 90% of americans total charitable giving by americans has continued to increase it went from $279 billion in 2017, flattened out after the tax cuts, now at $374 billion. but the number of donors, this is the important part, has actually fallen. a study by the indiana university and university of notre dame found 23 million americans stopped itemizing their deductions after 2017. that led to a $20 billion decline in giving that otherwise would have occurred if rates stayed the same. many warn as a result of the tax change, philanthropy is dominated by a small group of ul that wealthy donors at the top most americans are no longer giving they estimate the share of middle class households claim the charitable deduction fell by

two-thirds profit groups are banding together to allow charitable deductions for those who take the standard deduction, call top of the line deduction, or perhaps get rid of or lower the standard deduction for more on philanthropy and how the wealthy are spending and investing, you can go to my new newsletter out today, cnbc.com/insidewealth. that's cnbc.com/insidewealth >> and it's so good. i love reading it. >> appreciate it. >> this is directly tied to the change in the tax code or given the fact we're dealing with high inflation and consumers tightening belts the last couple of years, that sd that have an impact as well >> it's hard to tell what would have happened given, but if you look, they did these longitudinal studies that looked at the same people who gave for 20 years and stopped giving. that's predictive, as opposed to just measuring against gdp there's the longitudinal studies along with what's happening with

the stock market and the economy, which drives a lot of giving at all ends of the economic spectrum. there's no question this has reduced charitable giving and the number of donors there's a saying in the charity world, dollars up, donors down that's the theme today it's great and it's relief dollars are up, overall giving is up, but we also want more americans to be giving and have the incentive to give. >> one reason nonprofits are watching the markets closely. >> absolutely. >> thanks. >> "money movers" starts after th is

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good thursday morning. welcome to "money movers." i'm carl quintanilla with sara eisen at the new york stock exchange the ceo of redfin going to join us on why september was a turning point for the sector plus, mark fields is here with the latest on the port strike. pullback from major players into the ev space. apple users upgrading their phones not because of a.i. we'll get some details from jpmorgan on what is driving iphone demand. taking a look at stocks, major averages are lower after attempting a