florida. hurricane milton is approaching the gulf coast as a powerful category 4 storm. it's tuesday, october 8th, 2024 and "squawk box" begins right now. ♪ good morning, everybody. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. and here we go. you are looking at the futures this morning. you see modest advances. dow up 35 points. s&p futures up 20. the nasdaq up by 89, close to 90 points, it does come after a down day on the markets. the index down 1%. dow was down 398 points.

s&p was down 1% as well. the nasdaq down even a little bit more than that. almost 1.2%. it did come as crude oil did jump 3% yesterday. that came in anticipation of the strike by israel against iran. still waiting to see what they will do. still negotiating with the united states. crude oil back down to $75.59 a barrel. treasury yields up to 4%, the highest level since august. that's where they closed since august. this morning, the ten-year is at 4.01%. the two-year as this time was 4%. right now, 3.96%. >> the vix almost 23. >> things are picking up a little bit. >> i think something landed in tel aviv yesterday. october 7th. flying missiles into tel aviv. probably not -- oil's down today. >> oil's down 2%. again, waiting to see what

happens. whether israel will strike nuclear installations or whether they will strike oil facilities. we will wait and see. stocks in china surged after the open after the golden week holiday. at the beginning, china stocks up closing 6%. this came after the key policy meeting ended with no major stimulus announcement. analysts said a selloff in hong kong indicated a rotation trade after the index continued to rally after the markets were closed last week. we will talk more about this with strategist patrick kilvonic. he said the rally may be short lived, but tepper said before the stocks moved, he was betting on anything and everything in china at this point. again, the street was looking for potentially more stimulus to come. they didn't get that this time around. wh

china expects to hit the 5% growth target for the year. breaking overnight. china announcing 39% tariffs on the european brandy. that comes after approved duties on 35% of electric vehicles made in china. the brandy or cognac brands are lower in european trading. these tariffs become retaliatory. how they do it is interesting. an update on hurricane milton from the national hurricane center. it remains a category 4 storm with maximum sustained winds of 145 miles an hour. it is expected to make landfall near tampa bay. the fluctuations are expected and they do think milton will be extremely dangerous. a dangerous hurricane through landfall in florida.

>> you watched the evacuations taking place? cars trying to get out. >> get the hell out. >> hours and hours of traffic. gas stations running out of gas along the way. it's way tougher to follow through with the orders to evacuate than it seems on the surface. >> i hope it goes on land as a 3. now an update on activist starboard investment in pfizer. yesterday, we told you that starboard has been working with former ceo ian reid and cfo. now the ft is reporting the former executives spoke with four board members on sunday before starboard's stake became public. the executives recommend the board listen to the pitch from the activists. albert bourla also received

calls from the group. and the decision to take eli lilly's blockbuster weight loss and diabetes drugs off the lists of medicines in short supply last week. compounding ingredients and federal regulations allow compounded versions to be sold to meet demand if a drug is in short fsupply. the lawsuit said the public did not get a chance to weigh in on its decision and trusted assurances from eli lilly about demand. lilly is self interested in monopolizing the industry. the u.s. judge issued a permanent injunction to force google to offer alternatives for the play store. google well be restricted from sharing fees to compete.

this stems from epic games against google and anti-competitive practices. both google and apple app store takes 30%. this will allow developers to keep more of the revenue bypassing the google rules or fees and in some ways, dpgoogle in a tougher place than apple. the truth is they had ways to side load and other things and different apps all the time. we've got pepsi shares out with earnings right now. pepsi came in with earnings of $2.31 a share. that was two cents better than estimates. it did come on revenue of $23.23 billion. that was below pexpectations.

the ceo said they are resilient. this year, organic sales expected to grow down from the previous guidance of a 4% rise. just looking through quickly some of these things. this was a surprise drop in the third quarter revenue. cutting its forecast for the organic sales growth because of cautious consumer spending in north america weighing on the demand for snacks and beverages. we are seeing a change of what is happening. more sales taking place in stores rather than the convenience areas that you see in gas stations where pepsi has been strong. that stock has struggled relative to shares of coca-cola year to date down 2.25%. if you look at coca-cola, they had a stronger year. coca-cola shares up 16% over that same course of time. we have an analyst joining us

late er this morning and his thought is you will hear more from the company. pepsi has taken a slow and measured approach as when you see changes. he does expect on the call today you will hear more of a state of the union from the company to see what's happening. the immediate reaction with pepsi shares on what they are saying so far. down 1.25%. now down 1.5%. >> they shouldn't have down revenue. obviously, did you get your bag yesterday? >> i did see a bag. i didn't look through it. >> i believe something arrived, but i didn't get to look at it. >> you don't look immediately for salty snacks when they leave them at your door step? >> no, sorry. >> you dig through it like a christmas surprise? >> immediately. you know what? it was like someone gave me a christmas present that doesn't know me for what they put in there. >> low fat?

>> no. two bags of things that's all like either chinese or writing that is not -- two bags of stuff i have no idea. i don't know how to make it. i don't want it. inside, i think there are little instructions. i'm not sure what it is, andrew. something pumpkin oats. >> oats are a thing now. >> there's not one word of english on these bags. on the other bags, vegetable. >> all right. >> take your phone. >> does that work? no way. >> point it at the bag and it will translate. >> even my old iphone? >> even your old iphone? >> not the a.i. iphone? >> even the old iphone, archie. >> honey butter. not a fan. there were some euro breakfast

biscuit things that i kind of thought -- >> it is like davos. they are getting you ready for davos. >> it was a pita chip basel potato chip. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. pgim investments. shaping tomorrow, today. we're still going for that nice catch. we're still going for that perfect pizza. and with higher stroke risk from afib not caused by a heart valve problem,... ...we're going for a better treatment than warfarin. eliquis. eliquis reduces stroke risk. and has less major bleeding. over 97% of eliquis patients did not experience a stroke. don't stop taking eliquis without talking to your doctor as this may increase your risk of stroke. eliquis can cause serious and in rare cases fatal bleeding. don't take eliquis if you have an artificial heart

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chinese stocks began today's session with incredibly strong gains. strong is an understatement. started up 11%, but that did fade as key government economic meeting ended with no stimulus announcements. joining us now is patrick jovanic at silvercrest. patrick, this is something you are not a huge fan of. you are not looking at this and thinking the stimulus will lift all boats? >> it is a while people have been excited about china. that's something. it is like giving candy to a cancer patient. it makes them feel better, yes, but does it really change the situation? no. they're shoveling money in the general direction of the stock market and real estate market. will that have an affect in i

wou want want to get in its way. again, if you are a long-term investor, what you're concerned about is whether china's changing direction or not. people are not encouraged about the direction it's taking. >> i look at the don't tied the f fed mentality. if china is able do this, i'll be impressed. >> i'll be impressed for some time. if this meeting didn't produce another announcement of more money, it starts to cool off. so, the concern i have. >> the stocks are still closed up 6% to 9%. >> the concern i have is really is it fixing what's wrong with china's economy? there are a number of things. internally, people are concerned about the direction. it's too much top-down state led

closing to the rest of the world. on top of the bad debt problems they already have and need to be externally, trade tensions not just in the united states. it is not just who is elected in november. that will be a real issue. also with europe and other countries. we just saw china retaliate to recent eu tariffs. wh china's not going to be able to export its way out of the slowdown without significant pushback from other countries. >> europe was levering tariffs. kyle bass was on the other day. he said don't invest in comm communism. he said you are picking up dimes in front of bulldozers. you could run out to pick them up and you could get run over at

any time? you are not that negative? >> no, i've lived in china for many years. to call it communism is overo overo oversimplifying things. xi has come in and changed that. >> the uyghurs might disagree. >> i'm not trying to sugarcoat it. under xi, it is more repressive. that's why people are concerned about the business climate there. >> i guess some of the issues make sense, too. i guess, just news this morning that nvidia is building some of the servers, blackwell servers in mexico and doing it through foxconn. if you think about the supply chain diversifying and get out

of there, that may be different from other cycles. >> some of it has to do with tariffs and others with a future armed conflict potentially. i'm not predicting here, but look at the south china sea or the philippines or taiwan or japan where every day fighters are meeting chinese incursions. if you are in washington or if you are in beijing, this is kind of all that people are talking about and preparing for is -- it doesn't take a leap of imagination to see that spilling over into some kind of conflict. companies, whether doing business in china, or people investing in china have to be aware that that's a real possibility. >> and so when tepper comes on and says he is buying everything china, everything, everything, everything, your reaction is? >> my reaction is for how long

and what's timeframe there? are you simply trying to ride a market wave? if you are and you time it right, maybe that works for you. if you are a longer-term investor, you should be concerned about the things i'm talking about. >> what do you tell people to do instead? what do you like? >> i think you need to diversify in this economy. the kind of risks i'm talking about, i don't tell people china's uninvestable. you have to be conscious that china is a broader diversified strategy. you cannot just be all-in on china. >> when you look at the globe, how do you play out japan, europe and united states and emerging markets? sdpl >> you look for diversify cage

of risk. china is exposed to similar risks. japanese economy is seeing significant reform where the chinese economy seems to be stuck in the same cycle of trying to move towards reform. interestingly, if you look at the global financial crisis, israel did really well. not because it's not a risky place. there are other kinds of risks, but the risks are different and not linked. i think whenever you look at a risky situation in the world where things could go really off the rails, there are companies that were hard hit by covid and companies that benefitted from covid. >> patrick, thank you for coming in today. good to see you. when we come back, a lot more on squawk. e eric schmidt going all-in on

a.i. check out shares of honeywell. it is spinning off the advanced materials business into a publicly traded company. it accounts for 10% of the total sales last year. the target for completion is late 2025 or 2026. "squawk box" returns from the nasdaq market site after this.

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powers tractor supply stores nationwide with reliable 5g business internet. and helps red bull revolutionize coverage of live events. this is how business goes further with t-mobile for business. sto welcome back to "squawk box." ceo eric schmidt speaking at an a.i. summit in washington last

week. he spoke about ways to curb the effects a.i. can have on the environment, but he feels that will be swammed by the needs of the technology. he said we won't hit the climate goals because we're not organized to do it and he would rather bet on a.i. solving the problem on the other end of it and constraining a.i. and having the problem. >> so weird. >> there's an interesting sort of group of people -- by the way, including elon musk and others who say their solution to climate change is not necessarily going to be less -- putting less carbon in the atmosphere per se. figure out how to take it out of the atmosphere later and the argument that he's making effectively is a.i. is going to help the discovery process, potentially, i think. i don't want to put words in his

mouth, of that. nobody's figured out how to do it yet. maybe once a.i., i don't know if it is centient, joe, but solve a lot of problems. >> obviously, a globe that depends totally on fossil fuels for commerce and everything else. we really don't have any choice to deal with it. >> unless technology usually solves the problems. >> it's almost group it with other malefesean worries. run out of whatever because the more you use it, the more it makes sense economically to get more and you have more. when the asteroid comes -- >> you have to say that saudi arabia with its 2030 plan. does that make any sense if it's

true? they are trying to effectively wean their way off fossil fuels and reimagine are their entire economy. >> i think they are trying to diversify. >> do normal people have jobs? they have issues being addicted to all that oil. they need a real economy. >> which they are trying to diversify and create. right. the judge granting approval to the ncaa settlement with colleges that paves the way to dr direct payments to athletes. the date of the men's championship. it would allow the schools to establish a pool of $21.5 million in the first year to distribute money to athletes in the revenue sharing plan. this is separate from the name, image and likeness.

former college athletes from 2016 on will be able to get a share to set aside to recoup money they made from the deals which were not allowed until 2021. the ripple effects will play out with colleges contributing to the pools to replace the revenue it pays out or cut on-revenue generating sports to reduce costs. we will come up and talk about microchip movers. we dig into the shares of super micro next. it was the biggest gainer in the s&p 500. "squawk box" will be rig bk.htac >> announcer: executive edge is sponsored by at&t business. next level moments need the next level network. that rate is increasing as more and more businesses move to the cloud.

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good morning. welcome back to "squawk box." live from the nasdaq market site

in times square. we have green on the screen. the s&p up 20 points right now. meantime, shares of super micro jumping. they are up again today. the company announced it is shipping processor units used for artificial intelligence per quarter. that figure was revealed in the liquid cooling product yesterday. the stock down sharply the last few months. it is facing a probe by the justice department with hindenberg research of an accounting ehrrrorerror. and samsung expects profits to be below estimates. it is calling for an operating profit below what the street was expecting. the samsung memory business decreased as a result of

one-time cost and negative effects. it cited inventory adjustments by mobile customers and increased competition from china. the vice chairman issued a rare apology saying the company has always turned crises into opportunities. the stock off 1.1%. there are shares of generator maker generac which soared yesterday as hurricane milton rapidly eaccelerated int a category 5 storm. for the year to date, shares down 23%. the company's ceo will be on "mad money" with jim cramer at 6:00 p.m. eastern time. and there's a tax deadline looming for millions of americans who already had an extension to file the 2023 federal income tax returns. it's an extension on an extension. i'm done to let you know. some taxpayers may qualify for

even extra time. sharon epperson joins us now. it was april 15th. then october 15th. >> and one week from today. >> how long now? >> this is what i will tell you. the irs says there are 19 million tax filers which requested an extension in april. the final deadline is one week from today, tuesday, october 15th. with the natural disasters impa impacting, you will get more time to file. that includes 25 states and new territories. new filing deadlines from november 1st of this year to may 1st of 2025. that includes seven states impacted by hurricane helene. the additional extensions gives time to file, but not pay since the disasters occurred after the original april 15th filing date. there are two types of penalties. if you missed the extension due

date, the penalty is 5% of unpaid taxes per month or partial month up to 25%. if you didn't pay enough by the original april 15th deadline, the late payment penalty is half the unpaid balance up to 25%. you also will incur 8% interest on unpaid taxes. what do you do if you can't pay all you owe right now? you can set up a short-term payment plan with the irs to give you up to 180 days to pay $100,000 or less in tax penalties or interest. you can set up a long-term payment plan to pay monthly if you owe less than $50,000. there is an 8% interest you have to pay on unpaid taxes on those payment plans as well. it's important to make sure as much as you can when you can as soon as you can. preferably before the april 15th

deadline. >> if you don't know how much you oh, can you write a big check and figure on a refund? >> 90% of whatever you owe the year before, try to pay at least that much and that will put you in better standing. >> is that how you avoid a major -- you know that it's going to be next year's filing soon. that's what gets me. >> i know. it comes up so quickly. what it is this time of year is a really good wake-up call for people to figure out what they can do for the 2024 tax year and do what they can do and maybe adjust withholding or payees estimated taxes as well. adjusting withholding is a better way to do it if you can because then the irs is assuming you are making those payments along the way and you don't get the under payment penalty. >> i saw this.disaster area,

you can get an extension. if you are not in a disaster area, like an idiot, i needed information in an area that had a disaster. can i get the extension? >> it is for taxpayers in those areas. >> i can't get any information. >> you can't get the information, that is something to bring up to work with your accountant about certainly and bring up to the irs. there are people who are, if you are military and combat zone, you might get an extra 180 days once you come back to file and to pay your taxes. also people impacted by the terrorist attacks in israel. they get an extension. >> thank you. >> sure. coming up, vice president harris speaking on cbs' "60 nus"boer economic

plan. you can get the best of squawk box on squawk pod on your favorite podcast app and listen any time. we'll be right back.

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welcome back to "squawk box." the harris-walz campaign onn th media blitz this week. here is vice president kamala harris on "60 minutes." >> my plan is saying when you invest in small businesses, you invest in the middle class and strengthen the economy. small businesses are the backbone of the american economy. >> pardon me, madame vice president. my question is how do you pay for it? >> the richest among us who can afford it pay their fair share in taxes. it is not right that teachers and nurses and firefighters are

paying a higher tax rate than billionaires and the biggest corporations. >> joining us now is pollster and strategist frank luntz who watched that interview. what was your reaction for somebody who focuses on words. >> first off, she is now, but took a while, but she is now taking the tough interviews and asked the tough questions and being challenged. "60 minutes" did an outstanding job trying to get answers. secondly, it is donald trump who is ducking debates and the interview on "60 minutes" and he backed away from. she gets credit for that. third, this is important. she asked the question about pay your fair share. this is language from the democrats that has gone back 25 years now to al gore in 2000 and

no one has yet defined and harris does not do it here what exactly is fair share. what is the rate? how much? how do you pay it? it's a legitimate question. i want to give her credit for one important use of language. in the convention, the democrats talked about freedom. that's normally a republican issue. here, she calls and asserts i'm a capitalist. that's something you hear from a republican candidate, not the democratic candidate. now she is focused on small business, which has always been a republican issue. andrew, she is taking pages out of the republican playbook. she sounds, if you just listen to the general statements, she actually sounds like a moderate republican. so the challenge for the trump campaign is to stop withcessant issues and her claims. i'll tell you something, going

to the new york times poll, she is beginning to cut through. >> that's where i wanted to go with this next. you're in the polling business and in the business of reading polls, if not your own. what do you see happening in the polls in the swing states in particular? not the national polls, necessarily, but in the swing states where both of the candidates are spending virtually all of their time. >> it makes sense because every one of the swing states is within the margin of error. every swing state could end up in the harris camp or the trump e camp. with this election with one month to go is so darn close. i can't find the time or historical precedent for this when the two candidates 30 days out were almost identical, if not identical, in the states that matter. literally have a 270-268 situation in the electoral college. >> let me ask you this, part of

the issue over the last, at least, two cycles we've had, there's been an undercount on trump votes, right? when i talk to people at a cocktail party and people say who do you think's going to win? someone says the polls look like they're the same, but over the years, if you go back 2016, 2020, trump was always undercounted. ther therefore, if they look apples to apples, i would give it to trump. i don't know if that is the prevailing view or the betting markets or what is the right metric to actuallyhave a better understanding of where we are or maybe the polls have gotten so good and gotten better over the years. >> no, i don't. it's part of the industry. that is why i focus on language rather than the polling. i don't think it is as important to predict the winner, but understand what the winner will do. let's talk about substance, not about who is ahead and who's

behind. i have been using sessions with undecided voters now for the last three months. i have three different groups tracking them. i have seen them move. they moved awayextensive way an toward kamala harris after that first debate and right now, they're asking who is telling me the truth. andrew, the most important value right now is not about accountability, it's not about tax rates, it's not those details. which candidate do i believe is telling me the truth and which candidate will have my back over the next four years among those undecided? it's too close to call. >> among the billionaires that don't pay taxes on the stepped up profits, that's a false statement that the 1% pay a lower tax rate than the people says saying. that's absolutely false. she is finally, finally, you

know, not going on with "the view" and taking tougher interviews. the answers were not impressive. yesterday, i know elon musk is now, you know, the anti-christ of the left. there's no point in criticizing kamala harris. she's a face of the larger machine. she'll say whatever's on the teleprompter. whoever is in charge of the telep teleprompter? it is not any one mastermind. it is almost like a -- >> elon musk was -- >> are you impressed with her answers? >> no, but am i impressed with what elon musk said? the reason -- >> to make the point that there's a bureau with biden or harris? i don't know if she knows what he's she's saying. are you swallowing it hook, line

and sinker? >> no, i'm saying this is what the public is saying. >> when she says the rich don't pay their fair share. that's patently false. the 1% pay much higher rates than the people. >> i'm not saying 1%. >> it's not going to solve the problem. >> i agree. >> that may be the case in the ultimate number, but in terms of people feeling like the system makes sense. >> people pay their fair share. what are you talking about? 100 people? she has to put all of the wealthy people? >> it makes what she says truthful. what you said is not true. >> the 1% are not paying the fair share is not true unless you talk about the rich, you mean 100 people raior 200 peopl

>> she said billionaires. >> that's the point we make. maybe you care about the 500. that's not the issue. that's not the issue. we have a fair tax system in this country. teachers are not paying more than rich people except -- >> except for the richest in the country, who, by the way, would pay the most into the system. >> one of the richest people paid $11 billion of taxes in one year. >> correct. that's fabulous. nobody is criticizing him for that. we had conversations about taking loans which you agreed to that it is unfair for people to take loans out. >> it will not solve things. >> we talked about this -- >> frank, these interviews are not going well. that did not go well. at least from what i could tell on "60 minutes." did you think it went well? >> the fact she did it and trump

did not -- >> trump did it last year and lesley stahl never apologized for lying about the laptop. never an polapologized. >> let me get one more point here. immigration is a the fact is, s claims about immigration that you should be addressing. that we've been focused on it, we've got solutions. and the fact is immigration got much worse under biden than under trump. the key element here are facts. a fact-based approach which would justify the comments that you all have been making. you have to draw the comparison, where were we on january 20th, 21, and where are we today? and trump is not making that comparison. harris is at least getting heard now. she's taking the stop questions and let's be honest with your viewers, up to now, she did not

do that. >> no. >> and now she's doing it. >> yes, she is -- >> okay, but she's doing it. >> forced to. you're looking at polls, look at some of the betting sites now. >> i see that now, it's a dead even race. >> frank said if it's 270 to 68 in the electoral college, how do we react, if we've seen near misses in the past with hanging chads with bush. >> i think andrew's right. unless the polls have gotten better. if she's tied -- which was the reason -- i forget, what was that a year ago, she was tied after only up four. if she's in a tie, she's only up two which is a major thing unless the polls are suddenly better. >> no and please -- let me be clear. >> still worried about people eating cats which they did down in venezuela.

i'm glad you finally got over that. i thought you were going to cry. >> the issue is affordability and immigration. >> right. >> whichever addresses those two issues is the candidate that wins. it is the jump ball. it is unclear right now, and you're correct that she has not been as specific as the voters want. that you're incorrect that at least she's begun to answer the questions. >> right. she's -- we're almost going to elect her president, we know nothing about her. it would be nice to answer a few questions. >> thanks, frank. ♪

♪ coming up, a rapid update on the economy and economic growth heading into 2025. imdaamazon launching its fall

pre y. we're going to talk to an analyst about how this sales blitz will impact the retail and tech giants. "squawk box" coming right back. (vo) time to move? make it easy with opendoor. sell your home in any season, for any reason. [vampire hiss] (vo) start your move at opendoor.com.

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amazon's october prime day kicks off today, hoping to lure shoppers with exclusive sales and deals. joining us mark mahaney, evercorp. a.i. research. it's your favorite stock above all of them, mark. not necessarily for prime days but for some other moves that the economy is making, really, through like prime tv. >> that's right. it's our number one pick in large cap and in mega cap.

we think we're going to have ongoing margin expansion both in the retail business and in the aws business, as per the company as a hole. and free cash flow is continuing to improve. we think we'll see accelerating growth. and stable growth, double-digit growth in retail business. you put that all together and there's a lot of valuation. so, yeah, we like amazon. and prime days just another feature of it. it's not a needle-mover for the quarter per se, but it certainly helps and probably will bring in more prime members worldwide which is always a win for amazon. >> in terms of operating income, how much does advertising represent right now? >> oh, that's a good question. they're doing about 50 billion now, run rate and ad revenue. and they don't disclose what the margins are, gut, geez, it's got to be pretty high, joe. i'm guessing they're doing almost 50% margins on that if

you look at what google and met tar doing on that sort of scale, 50 billion in ad revenue, 25 to 25 billion in ad revenue. a substantial profit. the two biggest profit-drivers here or aws and advertising. by the way, the good thing for arm zahn and amazon shareholders, the fastest part of the business are the highest margin. it's called the wonderful fix shift. >> you made a good point. you can only estimate margins for the advertising side of it. there's a lot more ads now and there's a lot more content that sort of -- sounds like nbc, but there's must-see tv, and number of options are increasing especially sports for amazon. >> yeah, joe, strategic pivots at the company. they've really leaned into being

a medial entertainment power is a strong word. license content, theatrical content. and over the last few years we've seen them lean into sports where you get massive audiences. major reach, major frequencies and you get high cpms. and beginning this year, they started layering in ads into amazon prime video. it was one of the biggest monetized potential ad platforms out there. we think that will help with profitability. in fact, it's probably the single biggest driver of ramping margins with profitability. the other one, on the retail side, they went through a major capex cycle in 2022 and 2021, and going into 2022. now they're sort of leveling that out. and you've got rising capitalization ute las vegas, using in centers that they may have overbuilt. but rising capital utilization, there's another word for that. it's margin expansion. you get two really nice

tailwinds here. there's headwinds here, they've got a system called kiper, as long as they break that out and give us a sense of what those costs are and revenue opportunity, i think the market will give them a little bit benefit of the doubt for that. >> do they have any businesses that would be recession resistant if the day ever comes where there's a slowdown? it seems like a lot of these things will be economically sensitive? >> no, there's no recession resistance here, other than, you know, there's a fair amount of spend which is house hold essentials. aws, as a business, is kind of core to most companies. you know, you need to keep the lights on. you need to keep your data served up and saved up in the clouds and the vast -- i don't know what percentage of amazon's retail business is consumer discretionary, north of 60%, maybe 70%. no, if there's a real slowdown,

discretionary spend, given the size, 10% retail sales, about the size of walmart, they would absolutely see an impact to their growth if there was a recession. >> okay. we got it there. what's your price target, you raised it, didn't you? >> yeah, we did. we did. we're up to 250 now, 2026, 30 times three times cash flow gets you there. we think that multiple for kind of a key enduring brand. you know amazon's going to be around in 5, 10, 15, 20 years, a name like that can do premium growth for a substantial amount of time we think that kind of capital is well warranted. >> thank you, mark mahaney. it's just after 7:00. 7:04 on the east coast. you're watching "squawk box" here on cnbc. i'm andrew ross sorkin with joe kernen and becky quick. we are tracking hurricane milton. it's a category 4 storm with maximum sustained winds of 155 miles per hour.

it's moving towards the west coast of the florida peninsula the 12 miles an hour. expected to make landfall there tomorrow night. pepsico reported profits of 2.31 a share. revenue of. $32 billion, slightly below expectations. unexpected decline in summer sales and cautious consumer spending in north america. that stock off 12% now. and honeywell announcing in the last hour, it's spinning off its materials business into an independent publicly traded company, that's going to happen by late 2025 or early '26, the company accounted for 30% of the total sales last year. let's get a check on futures. dow futures up 50 points, and nasdaq by 104 points and s&p 500 by five points.

let's go to steve liesman. hey, steve. >> good morning, becky. the strong jobs report and a series of uprise surprises. forecasters boosting their growth outlooks this year. amex reporting in the economy. the cnbc rapid update for the next four quarters have been upgraded by an average of 0.4%, or nearly half a percent. weak quarters are seeing a few points below potential growth. the one predicted but actually never scale. the 60 economists we surveyed saw gdp at 2.3% for the year. and dipping and bouncing back. goldman the high for the year, citi is the lower at 1.3%. they've seen two quarters of negative growth in q4 and q1 of

'25. with higher prices, hurricanes, inflation, presidential election, these are all of the risks out there in the forecasts. moody's says the baseline forecast brings in a harris win and democratic senate and house. that is divided government. he writes the results in no significant change in economic policy. the economy will continue to grow strongly and operate at full employment and inflation at target. speaking of inflation, the inflation and growth numbers in the rapid update should allow the fed to cut. and most have seen inflation decline. with a bump early next year, remember we saw that in 2024 this year, that once again, guys, could give the fed a pause, dbecky. >> this is a big question, i've heard other fed speaks over the last day or so saying, yeah, i voted for the 50 basis points but i want to be much more

measured from here. is it your thought that 50 basis point is not going to happen again? >> i thought they should have done 25 to start with. but i was wrong about that. i think a gradual approach makes a lot of sense. you got to feel for the bottom as a guy who fishes and you wade fish and the water can be murky, you don't know where the bottom is, you want to walk slowly. there could be a rock there. you want to be careful. and i also think, by the way, as long as you're kind of clear about your intention, the market will go ahead and price in what it is you intend to do for the economy. although, i would point out the nfid survey again this morning shows small businesses still struggling. we can see big businesses, the companies we cover, becky, they get great rates out there. they get great spreads. the average small business has to bo borrow at 10%.

>> hmm, wow. steve, thank you. see you later. coming up, google looses a battle, now the tech titan could open its playstore to rivals. and 7:35 a.m., former house speaker kevin mccarthy on the election with one month to go. less than that, "squawk box" will be right back.

pete g. writes, "my tween wants a new phone. how do i not break the bank?" we gotcha, pete. xfinity mobile was designed to save you money and gives you access to wifi speeds up to a gig. so you get high speeds for low prices. better than getting low speeds for high prices. right, bruce? -jealous? yeah, look at that. -honestly. someone get a helmet on this guy. xfinity internet customers, ask how to get a free 5g phone and a second unlimited line free for a year. switch today! a federal judge has ordered google to open its google playstore to competition and to make the android apps in the playstore library accessible to

rivals. while google said it will ask the court to pause the pending changes on appeal, epic game ceo tim sweeney tweeted the epic game stores and other apps are coming to the google playstore in the usa without google scare screens and app tax thanks to victory and epic v. google. joining us aneesh chopra, he's now the chief strategy officer at arcadia. aneesh, the statement that came from the epic ceo, is it too early to declare victory and what happens next? >> for sure, google will appeal. the facts don't look great in google's case that-n the sense that a lot of policies are driven by what's learned in discovery. did they mistreat certain individuals. were they abusing their position. even if the underlying question is whether the app store is a utility for good, or a vehicle

for the anti-competitive behavior. those bigger questions left a little separated from the fact that here, the facts clearly were in the case of google not necessarily behaving appropriately in this use case. so, at the moment, it's a little early to be celebrating there will be an appeals process. and more importantly, there will be a technical review on the how we actually separate the app store features. >> aneesh, i've been going back and forth, just kind of kicking it around. on the one hand, i understand this is something similar to what microsoftfaced, saying it's too big, too big to share. got to have access coming in. on the other hand, to think of this as a utility as you just laid it out. okay, they've built this store, now you're going to say this is essentially the same as a utility, where we gave you the land, we allowed to you build these things and build it up, now you have to share it with everybody. that really the case? is google's app store the

equivalent of utility at this point? >> great question. and i want to separate the two. apple argued that the hardware, the device we buy which has all of these sensors is tightly integrated with the way we interact with it. the camera, the sensors so that experience is rightly coupled. and they'll make that available through their terms and conditions for those who wish to buy the smartphone. in google's case, they've already separated the hardware, say, samsung phones and google's own phones from the software. so you could theoretically stitch together another app store, and have access to the same controls and the hardware. so it's a little bit of apples/oranges in terms of the products we choose to buy, even though we might view them as smartphones that deliver app experiences. and the difference is critical because one of the challenges we face is unsecurity. we do not want the freedom to download malware. >> correct.

>> that is going to have our phones paired with foreign adversaries. so the moment to be cautiously optimistic to be pro-competitive, but we don't want to throw the baby with the bath water. >> that's interesting. when apple has said that and made that argument, i've always bought in as an apple user. i don't want to accidently download something, i don't want my kids to accidently download something that affects our entire house because we're all sharing wi-fi on things. when you hear things like that, that's a bigger concern than issues they're facing. i want the safety to know i'm is not going to get hacked and brought in is this going to upend that? >> actually, in the case of android, that would be reasonable, they might filter further which apps you get to discover, because they've gone through an extra step of security. i hope the market will respond, i think in threes, just to be pragmatic. there may be trusted brands that

we know, meta, in this case, epic games. they'll say, you know what, you trust us and we'll give you the experience curated for you and reduce the fees. >> this is kind of ridiculous, when you start explaining it this way do we really need more competition on this? i need more games brought into my life? i need more of these stupid apps? >> i can't verify the claim. full listen to what zuckerberg gave us, kind of a podcast last week, if you add up all of the quote-unquote taxes that meta pays because it doesn't control these app stores. he said something to half the p profits, he's realized only half the profit potential. >> big guys complaining that they don't have bigger profit margins. cry me a river. again, do i need these apps as a consumer? >> aneesh -- >> yeah. >> with the margin question, the real question to me, whether --

and the argument from a competitive standpoint is if mark zuckerberg could get quote-unquote higher margins he would lower his prices to consumers? unless you think he'll just capture a higher margin in which case that's a different story. >> gentyes. >> for sure, only lifts would argue, hopefully, you have invest in r and d. the main point i'd suggest the line here in an open platform like the android operating system does allow for this conversation to be had much like the net neutrality debate with broadband. we don't want them to have the slower speed running a fios home base. if you've got the prime seat, you got to be a little fair to all. hopefully, that fairness is driven a lot more to the value to the app ecosystem, than to

the rent seeking in the middle. that's a reasonable argument to say how close is the app store market to the broadband net neutrality debate. >> i'm just looking, meta's profits 34.4%. >> don't cry me a river on that. but the premise is there's an economic value to securing our phones, to optimizing the developer experience. to enabling app discovery. these are services that an app store makes available for which they should be returning a reasonable margin. not that we need to manage what that margin is, the market should decide. and in the case of android, there will be a window. the judge only made it three years. so this is not meant to be a long-standing forever dynamic. but it's meant to put a little bit of a shock in the system which again will be appealed. i would say the takeaway for anyone listening is we want to be mindful of what is a value-added service and what is

a gatekeeper that is rent extracting. and marketing to err on the side of, in this case, utility critical services. >> aneesh, i can't say i'm any more clear after this conversation. but it's making me think more. and i do appreciate the points you brought up. thank you for joining us. >> okay. hopefully, i'll convince you, maybe something more important i missed. >> we'll have you back soon, thank you. >> thank you. coming up next, the market is in focus, the s&p up 5%. over the last month, going to talk to a strategist on the economy, the market and fed. all that and more as "squawk box" rolls on after this. (cheerful music) (phone ringing) [narrator] not all multi-millionaires built their wealth the same way, you have... the fearless investor. the type a cpa.

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nasdaq about 90 points, s&p 22 points, here with us ahead of u.s. equity strategy at rbc capital markets. nice to see you. >> good to see you. >> what do we think at this point in the ball game? >> look, we're at my target for 2024, no strategist wants a neutral call, it's just not that nu much fun, 22 times on trailing ear earnings, we can get you to 6200 on the market, by saying we have a solid economy, by that, i mean, 2% on gdp in real terms. inflation continues to come down, we get a few more cuts, ten-year yield stays below 10%. you bake in some earnings growth along that, you could have a higher market next year. that's what we've been talking about lately. >> if you're already there, the question is, do you think there's going to be a leg down before a leg up?

>> yeah. >> in this case, if you're sitting around, thinking when am i supposed to -- nobody likes to time the market perfectly, but if you're at your neutral or level, you say, let's wait and see what happens? >> i think that's fair. look, we made sector changes this morning. the reality is i've got calls from international investors saying election is coming up, do we do anything? maybe you just want to wait a little while. we do see markets sell off in september and november of election years. obviously, we can't get that for the whole month of september. we got it at the beginning. if you put the day's headlines and hot topics aside, and focus on something universal. aai, 19%, 22% is the one standarddeviation market so we're kind of flirting with danger there in terms of being a little too bullish. and when you hit that one standard deviation mark that's where we have the 10% drawdowns, when you look at data, you come

up with scarier charts, we may be due for a pullback. >> if a pullback is coming you're saying you're recalibrating which markets? >> we reiterated overweights on financials and materials. we did downgrade the utility sector. we've been overweight there since january. we pulled that down from neutral. we upgraded health care from neutral to overweight? >> because. >> it's a combination of things, number one, you've got a better valuation story than utilities. you saw utilities absolutely rip. they're starting to look expensive. health care looks pretty reasonably valued. a bunch of industries looks cheap like pharma and biotech. and the fund date is starting to shift, utilities and reits have had inflows over the summer. those are starting to fade. with interest rates with the income sector's. >> it's already happened. >> it's happened.

>> big tech, what do you do? >> we're neutral. i'm watching the semis. they still look problematic. overvalued. >> all of the semiconductors. >> we're looking at median pee and russell 2000. not the big cap. i like the longer-term fundamentals but i do think the market is going to continue to rotate and broaden out. they need to get cheap before we move back. >> okay. lori, thank u.yo when we come back, america's biggest water utility company revealing it was the victim of a cyber attack. we've got the details when "squawk box" comes right back.

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♪ ♪ america's largest water utility company revealed yesterday that it was the victim of a cyber attack. new jersey-based american water said it became aware of unauthorized activity last thursday and immediately took protective steps. the company says it does not believe its facilities or operations were impacted, but it pausing customer billing.

the utility provides services to more than 14 million people in 14 states. and guys, you've heard about hacks at some of the phone companies recently. and these are the issues that cyber security experts have been very worried about and watching for some time. >> yeah. it's time to go long, all of those security companies, i think, it's only going to get worse. >> these things water. >> water now. >> electricity is always a concern. >> on the grid. my gps. and -- >> lost without it. >> right. coming up next, former house speaker kevin mccarthy on the election countdown. and what we could see from both campaigns down the homestretch, "squawk box," coming right back. ♪

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are you kidding me? you can do this. at truist, we believe the same is true for banking. vice president kamala harris is making the media rounds now, starting with the week off with cbs' "60 minutes." the vice president discussing her plan for the economy, still fell short of providing answers on how she's going to pay for some of the agenda. joining us to talk about this and much more former house speaker kevin mccarthy. we are seeing her venture forth

now, after what some would say was quite a while and i don't know whether you'd say she was sort of forced to do it. why do you think it's happening now? >> well, she's being forced. her whole plan was to stay away from the media all the time and it started playing against her. but, okay. she's gone on "60 minutes." but anyone tell me her three points of what she's going to do if she wins? no. and so, it's not breaking through. you've got -- if you ask -- >> i can tell you what she said. >> yeah, i can tell you what she said. >> yeah. what are the three things she'll do if she wins. >> try to deal with housing, right? >> with $25,000, yeah. >> no, $25,000, going to build more houses so there's a greater supply. she says she's going to give a $50,000 credit to small businesses, right? what else is on your list? >> i'm sorry, you can't run for president -- you can't say, i'm

going to stop immigration, build a wall, make the economy stronger. >> the idea that you're eye sasa i saying that nobody knows -- >> she's going to raise taxes on corporations. going to raise taxes on individuals. she's going to do that to maintain and increase programs for what she says is the middle class. she says she's going to support roe v. wade, those are the things she's going to do. on the other side -- >> you can't have it clear. running for president every single time -- >> running for president by not being donald trump. >> yeah, she's running against something instead of for something. so if she was to win, to govern would be very difficult. and, look, i think everybody is missing the wrong polls. this is a very close race. there's no undecided voter anymore. it's whatever candidate is able to get out the low-propensity voters. only interesting bowl is gallup. they don't know who you're

voting for, they ask who do you identify, republican or democrat. for the very first time, republicans beat democrats. by three points. you see the disparity between republican and democrat, usually three or five points, you can tell who wins the presidency. the second question they asked, who was best to solve the problem in the future, republicans. it's a better climate, republicans should be performing better. and it all inches down to pennsylvania. and pennsylvania is tied right now. if you look back four years ago, biden was winning in pennsylvania right now by a high number. if you look at wisconsin, biden was winning wisconsin by six points but only won it by 20,000 votes. so you can't play into the polls that are in the margin of error. what do they mean? and is trump still getting the underpoint that he's made before. >> there's a possibility that there's a massive undercount

going on we saw it in 2016 and 2020. >> could you even ask for more fairness -- i'll make one point, the outrage machine for elon musk for now endorsing trump is out of control. now, twitter is still a free exchange of ideas from both sides. on the other hand, "the new york times" just endorsed kamala harris. that's the 17th straight democrat "the new york times" has endorsed since dwight d. eisenhower. that was the last time, that was 1956. take your pick of any democrat you want to go along the way. they've endorsed every single one. >> mondale over reagan. >> the arbiter of all truth and all fair, journalistic integrity, in the world, does that every year. not a word is spoken about -- >> can i just say something? there's -- >> okay, but what about the 17 times -- >> an editorial page of the

newspaper -- >> okay. >> i understand that. there's a news page. if you want to the conflate them, you can go ahead and -- >> i am conflating them. >> i understand that. >> i see the choice of -- look, there's an overriding viewpoint from the "times" and everywhere, andrew. not just the op-ed page. 17 straight. >> theres what an editorial -- but it was an editorial page. i just don't understand -- >> you don't think the rest of the paper -- >> no, and i'm not going to engage in that with you. >> do you ever feel like a divorced child? >> no, you cannot deny it, i think the arbiter of "the new york times" -- your overall point which you bring into the news conversation every day -- >> right. >> the overall point that you bring into the news conversation every day is one of a conservative republican who is explicitly supporting this president. that's a distinction. >> i'm talking about at this

point, elon musk has suddenly totally left -- keith goldman said he needs to leave the country. and x shut down. >> i think the point that joe is making, you get treated differently if you come out and endorse trump. people loved elon before. i think overall, as americans, we've got to get to a point where we can respect somebody's differences of opinion, right? you may have a difference of opinion. i was just texting with somebody today that's mad at me about my party. right? i still like the individual. i just texted back, you made me smile. you made me laugh, right? i respect that you have a difference of opinion, but i want to have those discussions and not dislike you over it. elon, we can't bring our astronauts back from space unless it was for elon. we just had a hurricane where these people can't have internet unless it was for elon. if somebody from the left and cared about the environment, the only person that developed an

electric car that everybody loved was tesla. because it hinges on the first amendment -- that's what got him. >> the deal with elon and trump, his businesses will benefit instead of -- >> no -- >> -- obviously, the preferred candidate for elon musk is -- >> elon's preferred candidate is the constitution, more than a person. overwhelmingly -- look, i've known elon for more than -- before he was very wealthy. and he's always hinged on one thing, he's direct, it's about the constitution. and what's moved elon was buying twitter and seeing what government has done and trying to knock down people's first amendment rights, even if it goes against him. >> do you think the republicans lose the house? >> i don't think so. i think it's -- the environment -- >> it's 58% democrat on the probability now. >> let's walk through it. republicans start by getting three more seats in north carolina. they'll pick up alaska.

we'll win one in colorado. we've got two in michigan, a slot in there we can pick up. the problem being there, with the asterisk there, it's easier in this cycle than last cycle, democrats have more money. right now, republicans are playing defense. that's a problem. >> earlier, we had frank luntz on, he said this is so close. he doesn't think polling has gotten better. he sees a situation of 268 to 270 in the electoral college. and we were talking about how we should be able tour disagree and see it. i just wonder if it's a tinderbox building up if it's a close election? >> if it's a really close election, then the polls are right. i think what the country needs is a decisive election. because if it's close -- >> if the country thinking

they've got the election sold -- >> the other thing the country needs is, look, i think we should say, right now, before the next election when you come down to two candidates, they have to agree to four debates. two of the debates each one has to be an an individual topic. and economy, immigration. the fourth one is a free for all, so the country gets educated. and they'll share ideas. the last two elections were not people going to the polls to vote for someone, they went to vote against someone. we need an election for ideas. presidential elections should be aspirational. what should the next four years should this country get. you can move the policies because the country decided that. this is where we're failing one another. >> what would be the issues you would say for the -- is it the economy -- >> the economy. >> foreign intelligence -- >> actually, the economy, the

border, foreign policy. those three are core to what -- >> can i say something, a question, look, i think there's a lot of people who look at this election, this particular election, and they're actually not even looking at the policies you're talking about. or the ideas. the ideas have nothing to do with it. i think they're literally looking at the character of these two individuals, that's it. >> uh-huh. >> and they're saying to themselves, one, the democrats would say that the other side is effectively disqualified, right? by the way, they would actually look at words that you used and peers and colleagues used is after january 6th that said he is disqualified. that's what will they would look at. >> you're saying democracy is on the ballot? >> i'm saying that there's a -- there's a large portion of this country that looks at thisidea, just broadly speaking -- talking about the constitution, democracy, this and that. they look at january 6, they look at the character and some of the things and the hate. and the sort of disposition of

the two candidates. just on personality alone. and they say to themselves, i'm not even looking at the policies themselves. right? i know people who would look at this election and say, you know what, vice president harris, she could be -- i know people who say she could be okay to fine to maybe bad. and the same people would say, i can see trump be all the way to good to absolutely horrific, right? and that that delta is justtoo much. >> yeah, but -- >> i'm saying, like that's a little bit of a calculus here. >> okay, the point you're making, for the same reason, that's why i asked you about democracy on the ballot, i think both sides believe that. and i believe there's a big core of people who don't ever want to vote for trump. personality, whatever they want or january 6. i'll tell you there's a big group on the other side that believes the exact same thing on the democrats using the court

system to go after somebody politically. this sboth see it as a big issu. >> i don't think they're judging the other side as being bad people. >> but they're nod t bad people. >> you say bad people -- >> i didn't say bad people -- >> here's the thing about the good people/bad people think. people look -- and now you have to decide that courts and juries in america are no good, if you want to take this position. but people look and they say, here's a person who has been in court, who has been convicted on one end -- >> in court -- would trump ever been in court had he not run for re-election? >> you can look at the bankruptcies and all that. people just look at that. >> andrew, you know he would not be in court if he wasn't a candidate. beside all of this, nobody is bad, you respect everybody's opinion. >> but there are no court cases that involve her, right?

>> right, there's no case where she ever ran for president, she never went to iowa, anywhere else. you just had the last election with covid where times were different. now, you have an election where somebody that didn't even run for office and got put on the ballot. it's a whole different situation. >> and donald trump were not convicted of rain, a new york jury found him liable for sexually abusie ing carroll and defaming her, is that a good person or bad person? >> i'm not saying -- >> no, no, don't you think somebody more careful if convicted of rape? >> i didn't say convicted. i said bound to. that's the language, andrew. >> if you don't get anywhere -- they don't believe judges, it's like -- >> i guess not. >> they've litigated through this and still decided to support him. >> apparently. >> that doesn't make you any smarter or a better person

because of that? >> i don't know. >> i am. >> no, i know you think that. >> okay, i respectfully -- both of your positions, but my point is, exactly making, this is where america's at. you didn't talk about a wide open border. and who has what policy to fix that. you didn't talk about inflation. a policy for making our economy stronger. we're not talking about foreign policy. it's very challenging. >> you have to serve it up. it's orange man bad and you're never going to get anywhere. it's my life. >> but the challenge right now, i mean, you talk about the economics of every day. we've got a debt about to break us. we've got a world that looks like 1938. >> right. how about -- i do not think that we've heard from former president trump with a true demonstrable plan to reduce wde. >>ell, with taxes --

>> by the way -- >> we'll be right back. they're taking us out. we'll be right back. amelia, unlock the door. i'm afraid i can't do that, jen. ♪ (suspenseful music) ♪ why not? did you forget something? ♪ (suspenseful music) ♪ my protein shake. the future isn't scary. not investing in it is. you're so dramatic amelia. bye jen. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com.

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welcome back to "squawk box." gm ceo mary barr expected to tell the automakers how to talk about to investors. >> pop quiz time. do you know what this is? take a guess. this is one battery cell. one battery cell. i want to give you some perspective on the ramp-up in production of battery cells here at the ultium cells production plant. ultium else out of south korea. there are 36 of these cells in each of these carriers as they go through final production here. some perspective on how many they're manufacturing here. look over here. it's a little hard to see, but all the way down there, you see

those blue krcrates, there's abt 2 million cells that have gone through production down there, and as we come over here, i'll show you how big this facility is. by the way, they're only at 40% capacity. they're just scratching the surface in terms of what they plan to do in manufacturing here. another 3 to 4 million cells in these crates over here. all of these cells, by the way, will be manufactured and out the door in 15 to 20 days. and again, they're at 40% capacity. why are we in here? by the way, the first cameras that have ever been here for a live report in the battery production area. the reason we're here is because this is critical to what mary barra will be talking about today at the gm investor day. ev variable profitability. that is the target that they have set all year, to get there by the end of this year. where are they on that path? do they still believe they can get to variable profitability. they are clearly ramping up ev production. we saw it yesterday. you clearly see it here in this battery cell production

facility. also, peak profits. evs are a big part of the future for general motors, but peak profits right now in terms of internal combustion engine vehicles, more than a few people are questioning if they can continue to be as profitable or growing profit in that area. and finally, what's happening with china? is there a restructuring in the future there. general motors, as you take a look at shares of gm, they have lost $210 million in china in the first half of the years. there was a time, just a few years ago, where general motors was making a couple billion dollars a year in china. but as that market has dlachang dramatically, general motors is facing tough questions there. all of those questions will be front and center when we talk with mary barra exclusively later today, ahead of the gm investor day here in spring hill, tennessee. we'll discuss not only china, ev production, the ramp-up in evs, getting to variable profitability, and where general motors is right now, in terms of

its plans for continuing to grow profits. so lots to discuss with mary barra. and this is a very cool place to be. and guys, you truly see how quickly ev battery production is growing when you're in a facility like this. >> okay. phil lebeau, thank you, sir. we'll keep an eye on the coverage all day. >> you bet. >> appreciate pit. still to come this morning, tracking the hurricane helene recovery efftsor. we'll talk to a local reporter covering the storm's devastating impact on north carolina who is face fact checking the misinformation related to the hurricane. "squawk box" will be right back. ♪♪ [children playing]

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it is 8:00 a.m. on the east coast and you are watching "squawk box" right here on cnbc. i'm becky quick along with joe kernan and andrew ross sorkin. among today's top stories, soda and snack pmaker pepsico trimmig its full-year growth outlook. for the third quarter, pepsi did beat profit expectations, but demands for drinks and snacks fell. pepsi says volume in both its food and beverage divisions declined 2% in the third quarter. honeywell unveiling plans to spin off its advanced materials

division as soon as today. the public company could be worth more than $10 billion. and that business and honeywell's remaining operations may have more flexibility for making deals as a result, they say. and finally, check out shares of samsung. the korea and tech giant saying that it is forecasting worse than expected third quarter profit. the good news here, samsung is guiding for a 274% surge in operating profit during the quarter. the bad news is, that's still below what the street was expecting. that year-before quarter had been a really difficult one. the company's vase chairman issuing a rare apology to samsung's customers, investors with, and employees after the guidance came out. the stock off by 1.1%. take a look at futures right now, up about 60 points on the dow. s&p up about 101 points. i want to get over to frank holland with a look at this morning's pre-market movers. >> we'll start with oppenheimer with a downgrade on microsoft from outperform to down perform. analysts say they believe the revenue and eps estimates are

just too high and they overestimated the revenue adoption for ai. shares down a third of a percent. analysts are also concern about open ai losses. they believe they could reach $2 to $3 billion for microsoft in fiscal year 2025. they also cite falling interest rates as a tail wind. this is interesting, because they say microsoft will earn less interest on its $76 billion in cash. again, shares of microsoft down about a third of a percent right now. we also have analysts downgrading qualcomm to certificate weight, saying the company may have overestimated the chip maker as an ai play and added a long list of head winds, including losing market share in smartphones, fewer shipments to apple, and the stock trading slightly above its historical valuation. this is btig doing a downgrade of qualcomm. shares are down one is almost a quarter of a percent. this is btig, excuse me, upgrading affirm and downgrading american express. affirm is a buy. saying affirm is taking market

share finance and they agree with the ceo of affirm that it's amex for the other 99%. shares of affirm are up just 5% right now. and american express, it's now a sell. price target of 230. that's important. that implies about a 15% drop from where the shares are trading at right now. you can see shares are down almost 1%. analysts say they expect the soft macro environment to drive deceleration in its build business. they also believe estimates for revenue and eps are inflated. shares of amex down almost 1%. affirm up 5% right now. back over to you. >> meantime, florida preparing for hurricane milton. according to the latest release from the national hurricane center, it remains a category 4 storm with maximum sustained winds of 145 miles per hour. it's moving now towards the west coast of florida. that florida peninsula at 12 miles per hour, expected to make landfall there tomorrow evening. now, the state has ordered evacuations that have caused major traffic jams. i don't know if you've been

watching on other networks or online, you can see them. they're headed away from the tampa bay area. they're also scrambling to clear remaining debris leftover from helene just two weeks ago, which could turn into projectiles with high winds and that makes all of this that much more dangerous and complicated. >> meantime, recovery efforts from hurricane helene, which has now claimed at least 230 lives, continue across the southeastern united states. officials are tackling storm damage and misinformation related to the storm. let's bring in julia coin. she's a reporter with the charlotte observer. she's been out in the field covering the storm's devastate impact on north carolina. her newspaper, in fact, has a reality check page to fact check misinformation related to the hurricane and the recovery efforts. and julia, we want to thank you for being with us. i know you've been out on the ground there. tell us, first of all, what you've seen in terms of the devastation. and by the way, you're someone who comes from sanibel island in florida. you have seen hurricanes before, but what did you think of what you saw this time?

>> yeah, so i've been on the ground and also up in the air and embedding with pilots who are using helicopters to air drop supplies and also pilots who are in small bush planes surveying the damage, trying to see if roads are accessible, if anyone's sending smoke signals, that sort of thing. i've been both on the ground and in the air, seeing the damage and it's just -- it's extensive. it's eerie how common the sights become, both when you're walking around and flying above, just seeing all of the devastation in the area. >> i mean, i've been reading about how they're still trying to recover bodies at this point, going out with cadaver dogs, taking them on the rivers, trying to sort through the debris that's piled up all over the place. this is a horrible situation. there have been lots of concerns

about the abilities of the rescue efforts. what would you say with what you've seen? >> yeah, so i have been mostly involved with volunteers on the ground. i've met a few organizations leading relief efforts and rescue efforts that have brought those dogs out. i haven't heard numbers above one or two bodies recovered per town, but of course those numbers continue to develop every day. >> what do you think about fema's response to this? there have been a lot of accusations that have been made that fema is not doing enough, that they weren't prepared for this, that they are turning away some of the local volunteers who have been right to bring things in. is that the case? >> i have not seen that. again, i have been involved with those volunteers and talking to people on the ground. so i can only speak to what i've run into, in those situations

and i can say that a lot of people who are in these very isolated communities haven't seen government efforts, but that's just what they're seeing in these very small towns that only locals really know how to navigate. >> right. how -- what is most needed at this point? what do people there say that they would need from the outside, whether that be volunteers or the government? >> these people are self-described stubborn people, so when we show up with supplies, at this point, most of them are pretty set. they are still asking for diapers above the size of 5 and efforts are now shifting to keep people warm, as cold weather rolls in. that could mean blankets, socks, coats, that sort of thing. >> i know one of the places that you went was to rescue a 70-year-old woman and her dog. they were running short on medical supplies, that's really another layer of things that

they haven't talked about. even if you were there and were supplied for things, you may not have anticipated you would need two, three, four weeks of medication or other items. how big is the need for that? >> right. so that area, specifically, they received a few days of rain before the storm came. so this woman's doctor's appointment was canceled. and she did not have her heart medicine, even before helene came. so i was with the helicopter who was able to lift her out, but that's just one story of many. that's why access to roads and areas to land have become so important, because that's the only way to get to these areas and get people, a large population of -- who are elderly, the stuff that they need to continue. >> julia, thank you for sharing your stories with us, and for the efforts that you've put in on the ground. we appreciate it.

>> thank you. coming up, more on the markets. we'll take a look at some key technicals following the s&p's worst day in a month. plus, exactly what is -- what exactly is tesla gearing up to -- to reveal at its much-hyped robo taxi event this week? what would constitute a win for investors? what would be a disappointment? top analyst toni sacconaghi will join us for that conversation. stay tuned. you're watching "squawk box" on cnbc.

welcome back to "squawk box." beautiful shot there of the capitol. meantime, berkshire hathaway further trimming its position in bank of america. an s.e.c. filing now showing berkshire sold another 9.6 million shares in recent days for about $383 million. the conglomerate now owns a little more than 10% of b of a.

that's right above the threshold where berkshire has to report its stock moves around the bank. b of a remains berkshire's third largest holding behind apple and american express. how much do you think these moves are aimed at trying to stay within a certain ratio, or do you think they're actually a sign of the way warren may be thinking about b of a? >> i don't know. i do know once it falls below 10%, he will not have to report it. you will not get the information quickly. he still owns far more than bank of america shares than he's sold. i think it's north of 10 billion. and when you look back to july, that's when he started selling. i don't know how much the stock is down from then. september -- i don't know if we can see a longer term chart. over three months, yeah, it's come down since he started selling and it's been under pressure most of that time, i believe. >> it's looking like a good move already.

>> but him selling the shares itself will put pressure on it. >> time will tell. some interesting things. let's talk about it, in fact. there are some, i don't know -- i've been troubled for a while, but we know that. both the dow and s&p 500 seeing their worst day yesterday since september 6th, as oil prices and treasuries rose. joining us now at the technicals levels he's watching, jason hunter, head of technical strategy at jpmorgan. 22 and change on the vix. there were some weird re-post stuff going on, the ten-year has been headed higher. are there concerning underpinnings or is it all systems go? >> i think it's a little confusing, given the leadership changes we've seen since mid-summer in the equity space, where you've had defensives and cyclicals rally at the same time and kind of take the baton from tech, which doesn't entirely make sense. it looks like the market is trying to make both tail risk bets at the same time going into the september fmoc. but regardless, that's got the smp, having broken out after the

fmoc, after an all-time high, from a pure chart-based perspective is a positive, it's maintained that breakout, hasn't been able to build on it, but a breakout's a breakout. >> that's the question, i guess. is it going to break out or is it going to go down? and do you see any signs that we could be topping out? >> you know, so i would say, when you take the big step back, and some of the commentary we've had over the last months, when you look at how long the curve's been inverted and now you're starting to get a bullish steepening impulse, generally, that tends to coincide more with bearish equity performance, at least over a short-term. you know, as the fed's initially starting to ease. but we haven't had the data to really suggest that, oh, recession's -- the sum of the labor data softened, but the unemployment rates ticked back down. the demand data has picked back up. and you can see the equity market is quite confused by that. again, with the leadership shift that we've seen. you know, so, at the end of the day, it's a lot of mixed signals.

the individual charts across different asset classes, you get a lot of things that don't necessarily fit together. so what i've done in the recent months is i'll take each chart at face value and leave the kind of the macro overlay aside. the pieces aren't necessarily fitting together right now. and like i said, if we get a breakout in the s&p, a breakout in the russell 2000 like we had after fmoc, that's a bullish bias. i'll put my stock just underneath the breakout levels and act more like a trend follower, than trying to get ahead of the things. because that quite frankly has not worked. >> do you try to handicap geopolitical events? or you don't even try? >> no, so i think you recognize what those risks are, and i think it's more about risk management around the views and trades, where -- set a tighter stop. or some of the things that tend to go non-linear, if you think about brenttraded back up into the summer range, and you realize, that may not just be a move into the upper end of the

range, that could be a blowoff. and you realize the risks around the views and set your stops accordingly. >> okay. so what about the breadth of the advance right now? finally, something that turned into a positive or still something that makes you skeptical? >> yeah, so i think that's where you see the russell breaking out, small cap having led large cap through the latter part of the summer. you're getting a broader breadth of things that's participating in the s&p rally. that's generally a positive. that's an early cycle-type story. let's call that a bet that the manufacturing cycle globally is going to start to repair itself. and you can see with dm central banks easing, some policy news out of china, that all makes sense right now. but again, you also had defensive leadership at the same time. so those two pieces don't exactly square well together. >> people are just covering their bases? >> i think that's right. and you treat, in that world, you just treat each chart separately and i'll put my charts in stop after a breakout, i'll chase that, and act a bit more reactive than trying to

predict where the next pivot's going to be, and hopefully things will start to clear up a bit more and we'll get some foresight. but right now, being reactive and keeping tight risk tolerances the right way -- >> what other markets around the world are important to us right now? >> i think the rates market is a big one. in fact, when the two-year note got to 350 recently, going into and after the fmoc, both the technicals, you know, just looking at the chart pattern, suggests the rally looked exhausted. but when you look at how the forward curve was priced, how many easings they had priced into the forwards, we actually went short two-year note. that has backed up with the help of this friday's payroll report, to a level where i don't think it goes much higher from here. we think 412 is a limit for 2s, so whatever concerning, let's say, input that would have into equities, that, oh, the fed's not going to ease as much as, we think there's a limit to that. which could be supportive if the rates market starts to find its footing and you see some rebounds steepening in the

treasury curve here. >> okay, jason, good summary. thank you. >> thank you. when we come back, we will take you live to las vegas where the biggest names in gameing ar converging. contessa brewer's there. she has a big lineup coming up. contessa, we should we expect? >> hi, becky, good to see you! first of all, we're seeing 40 months consecutively of growth in the united states in the gaming industry, it's remarkable. but the labor costs are going up and there are headwinds. we'll talk about that with ceo of cesar's, tom reeds, still ahead right here on "squawk box." you get the sauce i like? of course! you're the man! i wish. the future isn't scary. not investing in it is. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com (♪♪) i take you, body in sickness and in health.

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welcome back to "squawk box." futures are up a little bit, getting back a little bit of what they gave back yesterday, 35 points now on the dow. nasdaq a little bit stronger, up 82. s&p up 52. >> going to get over to contessa brewer, because she's got a story on this.

gambling's biggest luminaries coming together this week in las vegas. contessa brewer is live at the center of it all and she joins us now with a special guest. good morning, contessa! >> good morning, andrew! and welcome to las vegas! look, caesars has a lot of news. they just announced new buybacks, a new $1 billion in debt offering, and tom reeg joins me bright and early here in las vegas. it's nice to see you. i'm just curious how much your share price had to do with the stock buyback and why does it take that kind of news to juice the stock of a company that has been performing on all cylinders. >> yeah, contessa, to go back, we closed the merger with caesars in july of 2020. we all remember, it was a different world then. we had a significant capital spending program that we stepped into when we bought caesars. we had $400 million we needed to spend in new jersey. we were building an expansion in

new orleans that opens two weeks from now that was $435 million -- >> in time for super bowl next year. >> that's right. >> and a new property in virginia that's over $800 million that will open before the end of the year. as we were reaching the end of that cycle and looking at what was happening with free cash flow and where our stock was, it was an easy decision to start to buy some stock. in terms of where the share price was, we were on the wrong side of the macro trade while the fed was raising rates. we were a levered company coming out of a merger. and now that the fed has moved into a cutting cycle, we've seen a turn in our stock. >> you also just made a deal with the union late last year that gives the biggest pay hike that your employees have ever seen. you've got casinos all over the country, the biggest operator in

terms of number of properties in the united states. what are you seeing about the american economy and where customers are, that discretionary income might be a concern. >> yeah, i would say we're about the purest measure of consumer discretiona ary given the busins that we're in. and it's been remarkably resilient. we had the kind of a bubble when stimulus checks went out, and that faded a little bit as that money was spent, but the consumer remains quite strong. you see here in vegas, i'm sure this week, the market is packed. we're running at 99% occupancy year round. the regional business is holding in well, and the digital business is growing incredibly strongly, so we've got a business that did $2.9 billion of ebitda combined coming out of the merger that's doing about $4 billion now. >> okay.

first on las vegas, wells fargo said its las vegas f1 room rate tracker took a turn to the downside with average daily rates down 40% year over year. is that an indication that there's not enthusiasm over f1? is that what you're seeing? >> i -- i would look at it more as an indication of garbage numbers. they're measuring really what's 8% of our room base in terms of where rates were last year. it was well known that we held rates very high coming into the race and they dropped, as it came. what we learned last year was that we needed to fill sooner. so we're not holding rates as high. if i look at, you know, f1 for us, you know, it was a lift last year of almost $20 million -- >> wow. >> -- versus the weekend the prior year. this year i would say, you know, flat to up or down a few million bucks versus last year, but up the 20 versus two years ago. >> you mentioned the digital

business. you know, the powerhouse in this space is fanduel and draftkings coming in a strong number two. and then there's this fight over the third and fourth positions. how important is it to you -- you just launched a new online casino app, horseshoe, yesterday. how much is this important to the growth of caesars' business? and can you make an impact? can you grab market share away from the two big players? >> yeah, contessa, i'm old-fashioned, i like to make money. i measure it based on how much money we're making, not how much market share we have. so our promo spend is a third to a half of what draftkings and fanduel have. so those subsidies don't run through our ggr market share numbers. but we've got a business that's approaching, soon will exceed 20% ebitda margins, in a business where most are still losing money.

>> before i let you go, you know, we're keeping an eye on florida and hurricane milton. i know you have -- your home is in florida. i'm just -- how are things looking for you? how is the situation for you, being here and watching that storm approaching? >> it's deja vu from two years ago. i was in vegas watching ian hit our home two years ago. this storm seems to be tracking north of us. but we'll still have to deal with surge and you should pray for anybody that's in the middle of this. it's -- it's awful to go through these. and after the news cameras leave, you know, a week or two from now and go to where the next storm is going to land, the people where it hits will have to deal with this for the next five or ten years. >> it is a monster going in. tom, hoping the best for you and for your family, too. thank you for being with us early this morning on "squawk box." andrew, i'll send it back you.

>> thank you. enjoy vegas. what stays there -- well, doesn't stay there. >> does it? coming up, breaking, u.s. trade data. plus, we've got some hints that pepsico is giving us about the american consumer. what's really happening here? we'll tell you when "squawk box" comes right back. ♪(voya)♪ there are some things that work better together. like your workplace benefits and retirement savings. voya helps you choose the right amounts without over or under investing. across all your benefits and savings options. so you can feel confident in your financial choices.

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we are just seconds away from a new look at the trade deficit. you can see the futures are a little higher this morning, dow up by 40. the nasdaq up by 80. the s&p right now up by about 22. rick santelli is standing by at the cme in chicago and rick, the drama is building. >> yeah, we're waiting the august trade deficit, and this is kind of important, actually. and i'll tell you why in a moment. it's hitting the wires. minus $70.4 billion. minus $70.4 billion. actually, quite close to expectations. and the real interesting point here is that last month, still unrevised. it might get revised as i'm speaking, it did, but it's a subtle revision, at minus almost $79 billion, it was the largest in two years. why? well, think about the port strikes and what many companies were doing prior, trying to get

ahead of the strike. they're bringing in more imports. the more imports you bring in, of course, that makes the deficit wider. and i think that dynamic, of course, has slowed, not because this august number knew that the strike would be subtle, but because many of the importers already satisfied some of the issues, some of the pre-ordering they had done. so this was expected to see that the surge in imports that put last month at the worst deficit in two years is easing back just a little bit. and in terms of exports and imports, we also get some relative value and demand between overseas and domestic and the argument, of course, goes that we are slowing aed by, domestically. the aftermath of the big jobs, jobs, jobs report can still be seen. today is the fifth session in a row, long-dated treasury yields have surpassed previous day's high yields, staircasing on yields, building momentum. but the asterisk today is short

maturities have not done that yet. so it's going to be very interesting. the last three or four days, it's been the short end that led rates higher. today, it's the long end. we'reactually seeing some steepening, and even though we had a brief visit to an inverted 2s to 10s curve yesterday, it's settled in positive territory. becky, back to you. >> hey, rick. does the strike have any impact on this? and i know it was a brief strike. it only started in october, but there was a lot of stuff that was getting brought in ahead of time to try to beat the deadline for the strike. >> yeah, absolutely. that really probably had more of an effect in the july numbers, that was at minus $78.9 billion. and the august numbers, the fact that it's getting smaller shows that some of those imports that we were bringing in to deal with the potential issues of a long strike probably were easing, even before, of course, this is

older data, that the importers knew, of course, that the strike would be more short lived. so, yes, the dynamics of the strike, preparing for the strike, the fact that there was a good glimpse into the future, that this was probably going to occur probably was playing a bit of havoc, putting a lot more volatility into some of these trade numbers. >> rick, thank you. steve liesman joins us right now for more on this too. steve, your thoughts? >> yeah, rick hit it on the idea of the impact of the potential strike, perhaps boosting it. i'm interested in the export data, which was up 2%. not a bad number for u.s. exports. sometimes, we get a boost of exports because of the effect that we were talking about, which is the containers come in, you've got to send something out. sometimes there's a little bit better export numbers. but you've got to follow the rest of the world, see how the rest of the world is doing. it impacts u.s. growth. it impacts whether or not we have our importing inflation, all sorts of things. i do want to talk for one second

about the federal reserve. john williams talking, making a few comments. and he says, it will be appropriate again to bring interest rates down over time. that's an interview with the ft. he also says that the fed forecast of two more cuts this year is a pretty good reasonable representation of a base case. very quickly, becky. on the probabilities, we're at 88.12. that's a new number, and we have to show this in a different way. 88% for a quarter. that 12% is a new feature of the trading now. so what happens. you have this problem where you have to look through what people think happens on the front month, and then look through that to the next month. now a 94% probability of a second cut or a 50 basis points from here. and then, 6% for no cuts. so that's how the market is trying to suss this out. we could do a quarter and some

people think, we won't do anymore than that. but the majority think there'll be two more quarter-point cuts. the nice part is -- there are your numbers there on screen. the market is basically aligned with the fed at least through the end of this year with the data that we've been showing you about the wrap it up date, gdp not doing too badly. and nflation, if the forecasters are right, becky, we've arrived there at least on the headline pce. we're going to hit the target this quarter. so maybe break out the party hats, at least, briefly. becky? >> yeah, i mean, steve, we've been trying to just get around the idea of, does it matter if there's one rate cut that's kind of stripped out of this? i guess maybe it matters if they don't do 50 basis points again. because if they did do 50 basis points, the market might re-assess everything one more time. but we know the direction that the fed is moving. >> right. >> we don't know exactly when they're going to get, what the terminal rate is going to be, but we know the direction they're headed. >> right. but that was the danger of doing

50. if you start to think that it was, you know, the new normal was to do 50. and i think the fed is trying to advise, that is not the case. that we'll probably go back to quarters, maybe every meeting. they may get to a mode of doing every other meeting, depending upon how the growth in the inflation numbers come in. i think it's important, you have to look at the data really carefully, but inside our wrap it up date, we show this bump up in inflation for some forecasters, in the first quarter of 2025. you remember, we went through that this year, with residual seasonality, which you can put in plain english and say, hey, we had stuff happen at the beginning of the year that we didn't expect to happen, price increases. so that's becoming perhaps a feature of the inflation reporting. and if it's a feature of the inflation reporting, it could be a feature of how the fed cuts interest rates. and becky, it's a little bit more than just a quarter. if you look at -- and this is a wink and a nod to those in the

back -- the september 2025 fed funds contract, what you see, if they've dialed out about 50 or 60 basis points of easing over the next year, so they've kind of reduced their exuberance for federal reserve rate cuts over the course of the next year. >> hey, rick, i'm glad you're still there. i wanted to ask you about the ten-year going back above 4%. it closed yesterday at the highest level since august. all of this conversation we're having with steve playing into all of that. >> yeah, i think so. and i think also the fact that auctions start today. we have 3s, 10s, and 30s. and whenever you have the long end package, it really does seem to excite the long end. and as for the fed, it certainly seems to me, i have to push a little bit back on steve. there's always this dynamic between the fed and the markets. i look at it as the dot plots, forecasting doesn't work out well for the fed. but i think what's notable here is that the fed is really more stayed, more static. they're talking about rates are too high, rates have to come down. they've really pushed this dynamic in a huge way.

where the market immediately did readjustments after the jobs report. the market is truly data dependent. the market is truly right to suss new information. i'm not so sure i see that from the fed. as a matter of fact, it looks like the fed is trying to quickly catch up to the market's new reality, and that reality can change rather quickly. between thursday and friday, cpi and ppi and the post-mortem on the jobs report, which blames educators, seasonality, teachers coming back, seasonality for all the job creation. so the next jobs report and this week's inflation numbers could have an outsized impact on the market, and i do think that if any of the 10 and 30 long-dated auctions go a little bit iffy, we'll be looking at long-dated treasury yields amumoving even higher than they currently have been. >> okay. well, that is something to watch. steve, rick, thank you guys. coming up, top analyst toni sacconaghi from bernstein tells

us what he's expecting when tesla finalist unveils its robo taxi plans. will they be now have move the needles for investors? that conversation is next. first, as we head to break, though, check out the shares of wells fargo. wolf research, wolf research -- wolf of wall street? no, probably not. upgrading the bank to outperform from peer perform, saying bad news is fully baked into the stock. wells fao e rgduto report its results on friday. stay tuned. you're watching "squawk box" on cnbc.

welcome back to "squawk box." the futures right now, up 40 on the dow, 70 or so on the nasdaq. s&p up 22. crude was pulling back after getting to the top end of its range, down 1.75 percentage points this morning. >> meantime, a judge's ruling means that google will be forced to offer alternatives to its google play store when android

users want to download apps. the permanent injunction is the most significant development thus far from epic games' 2020 antitrust lawsuit against google. epic accused google of anti-competitive practices, including paying hardware companies and android iphone makers -- or i should say, phone makers, to not developing competing app stores. as part of the ruling, google will be restricted from those practices for three years, that's according to the filing. google will also not be able to pay companies to launch apps exclusively for first on google play store. epic games was most recently defeated in a similar lawsuit over apple's app store. that trial was decided by a judge, but a jury decided the google trial. in a blog post, they said they would appeal and ask the court to pause the pending changes. meanwhile, tesla scheduled to release changes of its long teased and the release of robo taxis. but our knicks guest says a lot of questions remain, including regulatory issues around

self-driving cars, how tesla will scale the service, and ultimately, how much more competition will be in the space. joining us right now is bernstein senior research analyst, toni sacconaghi. good morning to you. what do you expect we're going to hear? we've been waiting for this news for a long time. i think it's exciting to me, but also for many, there's some skepticism about when it will actually arrive. >> good morning, andrew. yes, i think the consensus is that tesla will announce a dedicated robo taxi model, likely to be available at some point in the future. let's say '27 or '28, that tesla will demonstrate a application, whereby a ride-hailing app, that it will provide some sort of update on where they are on full self-driving, and maybe also potentially announce that it's doing some robo taxi trials. i expect if they did that, those would have to be with an

accompanying driver. but nevertheless, starting trials in one or my cities in the u.s. i think that's generally what's expected amongst investors. there are big questions about whether tesla will provide updates on optimus robot or whether it will provide an update on new models, particularly the revamped models expected next year, or a lower-cost model expected in '27. but i think the focus will ultimately be on a robo taxi, you know, unveiling itself and an accompanying ride-hailing app. >> so, toni, we're looking at the stock at $242.92. if, in fact, they make this announcement, how does this change the game? how does it change how you would value this company? >> you know, i think investors are applying different probabilities and discount rates to a robo taxi service going forward. so i think it's widely anticipated, but as you noted at

the outset, there are lots of questions. there are technical questions about whether tesla can get to the reliability level with a more limited censor sweep. they only have cameras. other competing autonomous vehicles have lidar and radar, so there's technical question. i think there's a regulatory question. there's a timing question. and you know, how competitive is this space going to be? are prices going to be driven down and how much value will there be to be captured? so investors are ascribing differently possibilities and -- >> what possibilities are you ascribing and how are you doing the valuation then? >> this is what i think about it, andrew. i think it will be difficult for tesla to leapfrog other players. uber and waymo are doing testing in other cities. even if tesla is able to leapfrog, it i think it will be a limited -- you know, limited

to a year advantage. let's say in a year, tesla has level five robo taxis that can go anywhere, they have a ride-hailing service. my guess is, competitors will catch up reasonably quickly. so this notion of having sustained outside profits, even if tesla were to leapfrog given the technical hurdles and the regulatory hurdles, i think are difficult. and the valuation of uber is $150 billion. the valuation of uber, you know, probably in the u.s. is half of that, $75 billion. tesla's stock today embeds, we think, $600 billion beyond the core auto business. much of that ascribed to robo taxis. we struggle with that differential, given the probabilities that i -- >> let me ask you this in terms of the competition piece of it. which is to say, you made the argument that you think that an uber and a waymo will have an advantage, maybe given lidar and other things over tesla. there's an argument to be made, and maybe you'll disagree with

it, which is that they have a number of the -- a number? thousands, tens of thousands of these cars on the street today that have cameras on them, they're taking in data that can't really be matched. if you look at some of their self-driving features right now, they clearly seem to be the leader or the most advanced in terms of where that would be, if you were to sort of set aside what waymo is doing. is there an argument to be made that they will leapfrog everybody? and that they in some ways already have? >> well, i think the bulk case is that they will leapfrog. i think it's very difficult to say that they already have. because, you know, waymo is doing a hundred thousand rides a month right now with essentially a perfect safety record in multiple cities. tesla's nowhere close to that. if we look at intervention data from the state of california, where everyone is doing self-driving trials, and we look at that data compared to self-reported data from tesla, because that's all we have

available. tesla hasn't provided anything in the public domain, tesla is at best middle of the pack on intervention data. so, i think we absolutely, categorically, cannot say that tesla is the leader from a safety and intervention perspective in full self-driving. i think the hope is, as you say, that ai and their data stream will allow them to leapfrog and get there, but that's not where we are today. >> let me ask you a different question, which is, we were talking about politics earlier today, and elon's support, obviously, of the former president trump. how you think, and i ask it just as a straight-up jump ball. how you think it impacts, at all, if it does, the business. >> i think, clearly, it's a modest negative for the business. i think the principle challenge that tesla has faced is that it has an aged lineup. and most of its cars are relatively expensive. they're $40,000 and above. but none of them have been

refreshed in the last four years. at the margin, yes, the core base for tesla, its base of customers historically has been, you know, coastal customers, east coast, west coast, more liberal leaning. and so, you know, may be polarizing to some of those customers. but for certain, the biggest factor, really, is product lineup. >> and do you think there's any advantage that he gets? i mean, do you think that there are republicans or trump supporters historically?

the traditional customer base, you know, they typically are coastal and left lane. >> maybe a seiber truck. give me a big old cybertruck. to run over priuses or something, tone toni, you know what i mean, maybe the cybertruck for red necks. >> i don't know, i sort of marvel at them. it's not for me, but it's like a hummer. >> it's like a hummer. >> it's like -- but, toni, i -- it would make more sense for him to go all in on the ev transition candidate, you know, it just would, wouldn't it? if that's what all he was thinking about was lining his own pockets, what's good for his

own company, it would be the candidate that wants to get to net zero by 2030 by electrification, i think. so i don't -- you might be right. but a lot of tesla, the east coast, they put a bumper sticker on the car that says "shut up, elon," but they still drive the tesla, right? >> right. i think politics is really tricky to weigh on the effect on tesla. but at the end of the day, this is a company that was growing at 50% per year before. and in the last two years even before elon became more political, we've essentially seen that growth rate at zero that's simply because did not have the product. >> exactly. >> toni, we want to thank you, we got breaking news in stock. >> we do check out shares of roblox, it's down by 8.6%. this comes as hindenburg

research is announcing a short position. in that report it suspect's the company's metrics are wildly inflated. and says that the company is either misleading or outright lying to investments about its key investors. and it as describes the platform as a pedophile platform for kids. just looking at the report, hindenburg again, the short seller saying it is taking a short position after the user account, listed our ages under 13. by merely plugging an adult into the roblox search bar, we found members openly trading child pornography and soliciting for minors. >> did you see the jeffrey epstein? >> they said they registered as a child. and were able to register games like escape to jeffrey island and diddy, and run from diddy

simulator. >> and accounts called jeffrey epstein supporter? this is remarkable. >> since 2024, moderation for dummies has reported 12,400 erotic world play accounts from roblox, they include everything from rape to fetishes to underage users. >> oh, my goodness, do you see this -- >> stock is down 9% someplace. >> pile line and israel hangout allows kids to purchase bombs and knives. >> at short-seller's report, hindenburg, saying this is what they found when they launched on to it. >> public stock bathroom simulator vibe is the name of one of the rooms. you know, we've had the ceo on this broadcast for many -- many

times, since the company wept pub went public, my kids including my daughter, 7 years old, plays on roblox. >> what is the -- >> i don't understand. >> i don't know. i was under the impression, i will say, that at least i've heard historically, that they had better controls on their platform than everybody else. but this is damning. and raises a million questions. >> we should point out that, again, this is from a short seller that says they have a short position in the stock before they put this report out. but these will be thinking that will be able to be verified or not. >> the other thing that is interesting, putting aside what is horrific with the chat rooms they've found and games they've found, they're claiming effectively that some of the traffic is manipulated. meaning they're finding traffic coming out of vietnam and other places that they think is being led by, you know -- you know, server farms and other things.

is this is goingto be big news th morning. >> the stock's down by 10.75%. and "squawk box" will be right back. >> at university of maryland global campus, getting a bachelor's degree doesn't have to mean starting from scratch. here you can earn up to 90 undergraduate credits for relevant experience. what will your next success be?

i can't believe you corporate types are still calling each other rock stars. you're a rock star. we're all rock stars. oooo look look at my data driven insights, i'm a rock star. great job putting finance and hr on one platform with workday. thank you! guys, can you keep it down. i'm working. you people are (guitar noises). hand over the air guitar. i've got another one.

all right. welcome back, everybody. pepsico lowering its organic revenue growth outlook as it reported mixed third quarter results. joining us is brian spillane, food and beverages facilities. the numbers for north america were incredibly disappointing. you talk about volume, 17% for quaker oats, 2 for frito-lay, quaker foods, not quaker oats. what's happening, why are they losing out in volume? why are they struggling there? >> yeah. there's really two things happening. one, the quaker issue is related to the recall earlier on granola bars and getting that product out on to the shelf. when you look at the snacks and beverage business, the real weakness is isolated in the convenience channel.

decimal points are incredibly high. they've got a limited wall as they walk into the store. they prioritize nicotine first. and the other attachments are actually falling off. and that's really where the serious weakness is right now. >> bryan, we have ten seconds to the end of the show, would you buy the stock or not? >> i think it's a buying opportunity for the stock. it will get back on track over the next six to 12 months and it's trading at a discount. >> thank you, bryan. appreciate it. that does it for us, make sure you join us tomorrow. right now it's time for "squawk on the street." ♪ good tuesday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber. futures are mostly positive as stocks in hong kong suffered their worst decline since 2008. pepsi kicks off huge earnings. stocks watched watching hurrican