five-week winning streak is on the line for the major averages and more. inflation data is on the way. and it's finally here. earnings season. coming alive. financial giants blackrock, jpmorgan and wells fargo all expected to report in the next hour. honey, get in here! you have to see this. elon musk's robotaxi party, the cybercab, making the hollywood debut. it's cool. look at. that gold wings. investors are driving the stock lower this had morning. it's friday, october 11th, 2024. "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 this is it. last trading session of the week. so far, it doesn't look like things off to take stellar start. the dow is off 85 points. nasdaq futures down 70. the s&p futures off by close to 12. it does come after a down day yesterday, but as joe mentioned, we're still on track for a five-week winning streak for all three of the major averages. the dow and s&p 500 are 1% from the all-time high. the nasdaq is 2% from the all-time high. if you look at treasury yields, the ten-year above 4% at 4.09. the yields did edge higher yesterday after atlanta fed president raphael bostic told "the wall street journal." he would be interested in holding rates steady at the november meeting.

the csi 300 and hang seng falling 3.5% overnight. the hang seng was up 3% and investors will watch for further stimulus in the government news conference scheduled for tomorrow. let's talk about the squawk planner. more inflation data head. we have september producer prices due at 8:30 this morning. polled forecasters are expecting a decrease of .1% for the headline number and .2% without food and energy. we will hear from jpmorgan and wells fargo and blackrock in the next hour alone. amd launching chips yesterday taking direct aim at nvidia's graphics processors. the chip is called the instinct mi. it will start production before

the end of the year. amd did not reveal a cloud or internet customer for the chip. it said meta buys the chips and they were at hand on the launch event along with oracle. take a look. this is lisa su yesterday on "closing bell overtime." >> this was a big day for us. we launched a ton of new products across the epic fifth generation epic and mi-325. we talked about the road map going forward. we talked about new networking solution. we talked about a.i. pcs and we had partners on stage. >> take a look at shares of amd. up marginally. >> i want one. i want one of the chips. i don't want to put it in anything. >> what are you going to do with it? >> mi-325x?

you don't want one? we got breaking news. we have blackrock reporting. leslie picker has the latest. >> andrew, strong report beat on the top and bottom line. bottom at 11.46. compared to estimates of 10.33 per share. blackrock reporting $5.2 billion. that was up 15% compared to estimates of $5 billion. in terms of net inflows, the company reporting 221 billion quarterly net flows. that represents 8% annualized organic asset growth and beat estimates as well. if we were to be nitpicky here, the operating expenses of $3.2 billion coming in higher than what the street was expecting which was $3.1 billion in terms of operating expenses. larry fink commenting in the release about some of those acquisitions that they have done

recently saying that they are evolving their private markets capabilities to best serve cli clients. they are seeing the deal which closed in the quarter on october 1st as they drive to the enormous investment of infrastructure, especially to support a.i. innovation. they also have that planned acquisition of preqin to support growing private market allo allocation. interestingly enough, the company just celebrated its 25th anniversary of the ipo. so, all in all, a decent quarter. shares up fractionally this morning. guys. >> leslie, thank you for that. we should mention larry fink is on "squawk on the street" at 9:30 this morning. warren buffett's berkshire hathaway sells more bank of america shares according to a

filing last night disclosing the sale of 9.5 million shares that was split between tuesday, wednesday and yesterday. berkshire holds 775 million shares, that's a stake of 9.987% in the company. since that holding is now under the key 10% threshold, berkshire no longer has to report the transactions and the stock in a time ly manner. three days within doing the sales. buffett watchers will have to wait and see any transactions until they get the quarterly filings. the next filing due in mid-november will cover the equity holdings as of september. bank of america shares have been under pressure since the selling. trading at $39.91. again, despite the sales, more than $10 billion of sales, they still own more than $30 billion. closer to $35 billion at this point. >> you get a snapshot of how

that company is doing and the other banks and see where we are going or maybe it takes longer to be borne out. >> he sold a lot of apple shares, too. this is getting a little more acrimonious, it seems like, the boeing strike. the company taking a harder line with the union and representatives. boeing filed unfair labor practice charges. it is accusing the union of bargaining in bad faith and undermining the deal. boeing decided to pursue the charges reluctantly in pursuant to the filings and provides a more accurate picture of the events the last few weeks. negotiations broke down again this week and boeing retracted the offer of 30% wage increase along with other benefits. the union wanted hikes of closer to 40% and reinstatement of the

pension plan. defined benefits plan which nobody has. few companies. meantime, stellantis announcing it is ousting the cfo natalie knight as the overhaul. the automaker has been scrambling to regain investor trust to feel what is a deteriorating business. knight skrjoibd joined the comp year. stock's decline accelerated after the profit warning. she will be replaced by doug osterman, the former coo of the china company. confirming the coo carlos tavares, will be retiring at the end of the contract in 2026. the company confirmed it was searching for his successor, but possibly hinted he could stay on. if you want the job, reach out now. right now, let's get to the aftermath from hurricane milton

yesterday. yesterday, president biden said congress should return from its recess to pass emergency relief after the storm wrecked havoc on the florida gulf coast. the hurricane left millions without power and caused tornadoes that killed at least ten people. there were 39 reports of tornadoes ahead of milton and hitting ground in florida. the president said the most immediate need is funding for the small business administration to provide victims funds from natural disasters. a spokeswoman for the house speaker mike johnson said it would be premature for congress to return from recess until the full scope of the damage is clear. she said congress would act upon its return in november to address the funding needs. >> i was thinking about that. i was thinking about the spr after this story on the front page of the journal.

iran, through back channels, secretly saying any oil rich states or allow your air space to be used for an attack, we're coming for your oil and the united states is always implied we would be there as a security umbrella for emirates or saudi arabia, jordan, all those places. just makes me wonder if we did see that. i still feel like israel feels like -- i don't know if it is oil or nuclear or both or neither. if it were than happened and it is $120 oil again and we're down here on the spr -- right now, it looks like a pretty good move because they have been able to sell high and looked like they could buy low. hochstein has been in here and saying we are not ready for an emergency, true emergency.

>> so much of the production is now in the united states, too. >> it's better. it wouldn't be as scary. still on the margin, if any of these were permanently damaged for a year or whatever, if there was no production, it would not be good for inflation or other things. coming up, the long awaited robotaxi from tesla made its debut along with the robovan and some pretty cool robots. this time i don't think it was guys in robot suits. >> i was looking. they spoke so authentically. i don't know if you heard it. they spoke in such a realistic manner. i was trying to figure out if it was a guy behind it. they had the super thin wrists. look at the wrists. that's the give away. that's not a guy in a suit. i was looking to find ways in the waist. >> the waist is similar to mine on there. >> i was looking at a bartender and one behind the bar.

i hope d didn't see the waist. >> did you see it there? that's what i'm striving for. tesla shares are sinking. we will get a review and why investors are showing days p disappointment. "squawk box" return in a moment. for me, as one of the first afra latinas of a publicly traded company, it is fun to lead a company where diversity is a key piece of what we do. the celebration of culture here really allow us to come together almost like one gorgeous colorful mosaic diaspara of beauty that makes us one. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com.

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.

elon musk throwing a big hollywood party last night for the tesla debut of the robotaxi which they are now calling a cybercab. there is also a robovan and robots. elon musk is talking about the cybercab and time theline for f self driefving.

>> the car, you could fall asleep and wake up as your destination. you can wake up in the car in the autonomous world as a little lounge. you are sitting in a comfortable lounge and do whatever you want while in the comfortable lounge and when you get out, you will be at your destination. yeah, it's going to be awesome. we do actually expect to start fully autonomous unsupervised fsd in texas and california next year. >> whoa! >> that's with the model 3 and model y. then we expect to be in production with the cybercab, which is really highly optimized for autonomous transport. i happen to be optimistic in

timeframes. in 2026. yeah. before 2027, let me put it that way. >> joining us now with more is tim higgins. a cnbc contributor. it's really weird. it is almost down political lines. elon musk is someone who promises and never delivers for one side. i'll seen articles written and people on the other side saying i have seen rockets go up and land. the same rocket. i don't know how you discount this guy or poke holes in it. there have been some timelines that have been missed. do you believe these timelines? >> it is hard to say. what he is talking about is really cool in 2016 when he was talking the same thing that was really just around the corner. that said, you point out he has been successful in area where is nobody thought he could be successful. that gives him a credibility and it means we have to listen to

him and we have to take him seriously. that's the second part of that, though and some investors pre-market are showing they will take it with a grain of salt. this is elon standard time. does he deliver on the exact date of that the goal? history would say probably not. >> there are a lot of people working on it. at the latest, tim, when do you see full self driving? where he said you are sitting in a lounge, i don't know if you could have a cocktail. would that be dui? >> not if you're not driving. >> depends on the state law. >> sounds like trouble for people with pre-existing conditions. before 2030? >> you know, he's talking about having fully self driving vehicles. model y in california and texas next year. that could be a reasonable goal.

we have in california where i'm based here, cars driving around without people in them. waymo has deployed taxis. we have seen it. there is a regulatory pathway for that. he has been working on this technology for a long period of time. he has not demonstrated the ability to do this on public roads yet. next year, maybe it's possible. >> how about any of the other things catch your attention yesterday? the stock -- the stock's been okay. not on its highs, but it's come back from lower levels recently. what do you think about the move today? sell on the news, you think? >> i think there was a build up to that. the details were thin here. there were a lot of promises. i think some investors were going in hopeful we would see a lot more nuance and a lot more meat on the bone. elon said at one point on stage as people were peppering him with questions, this wasn't the time for nuance. this was the time for dream

building is what he was signaling. that is important for tesla and elon. you pointed out controversy around the company and him in the last year. he is out there trying to reframe and remind people what this company is about. it is the future of transportation. that's what investors get excited about when he does that. it paid off for him in the past. these kind of events are for the faithful. >> would that ever be money? i guess it would be one day. the guys walking around mowing your lawn or cook? make scrambled eggs? >> he is talking about this being way bigger part of the business than the car business. in the trillions and trillions of dollars. an idea or future where there are more of these things than actual humans that do all of the things we don't want to do or can't do. >> i mean, we didn't laugh.

we were just kind of blown away at the proposal for everyone's eyes being scanned globally. billions of people so we're able to tell people from non-people. you just said something that means we might need that some day. i don't know if i'll live to see it. it's amazing. >> tim, one thing that he said if you are looking for a reason for the stock being down, look, he's looking at selling these robotaxis for $30,000. under $30,000. i guess if you are an investor, someone who wants to buy them, fantastic news. if you are an investor, where do you make the margin? >> he is talking about scale. what does scale mean? that is the question for him. he has a long history of saying these products are x and twice as much when they actually come out. in a lot of ways, these numbers are bogies and he will work

towards trying to get them in the not ballpark or city of the idea. >> 50 would not than prohibitive. 30 sounds crazy. you don't get much for 50. >> tim, what does this mean to a company like uber or lyft?compe. waymo in particular. they have a huge lead at this point. they are actually deploying. they don't build their own cars. they have to work with partners. for uber, it is interesting. there could be potential for synergy there. elon has pointed at the network in the past t. i it is unclear what would happen. if you have a robotaxi, that could be a threat to a ride share company. something the previous leaders at uber talked about years ago

as they were in the technology and got out. >> it could be the fleet works on uber and lyft and all these other things. >> this is even better than dealing with all of the things that go along with the driver and benefits and different states. >> does uber end up buying or leasing those cars? if tesla would like to go completely, keep it as a closed network. that's why there are questions about it. >> elon suggested somebody could own ten of these and be a shepherd and take care of the flock, if you will. there's lots of ideas out there still. >> the robot dog. >> sheep. that's interesting. >> right. or a real dog. >> there are other people who own fleets of cars. >> exactly. >> taxi drivers.

>> paying insurance on four of them. thanks, tim. good to have you. why am i paying insurance on four? >> very good question. >> is there some cut off for insurance at 26 or something? health insurance, right? >> health insurance, yes. >> i think they should do that with car insurance. >> make a phone call. >> maybe not. what am i here for? why do i get up at 3:30? still ctoome this morning, more tax breaks from the campaign trail. former president trump proposing a new deductible to impact millions of voters. we've got that story next. ♪(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. they really know how to put two and two together. voya, well planned, well invested, well protected. (♪♪) i take you, body in sickness and in health. (♪♪) through good times, (♪♪) bad times, (♪♪) and all the in-between times. (♪♪) for as long as we shall live.

(♪♪) (♪♪) (man) these men of means with their silver spoons. what will become of them when they discover(♪♪) robinhood gold allows others to earn their very liberal rates on idle cash. they would descend into chaos.

t-mobile's 5g network connects a hundred thousand delta employees so they can make every customer feel like they've arrived before they've left the ground. this is how business goes further with t-mobile for business. time now for the executive

edge. we will start on the campaign trail. speaking yesterday in detroit, former president trump added to his tax cut proposal. he said he wants to make interest on car loans fully deductible. >> so we'll make it fully deductible, the interest payments. that's going to revolutionize your industry. this will stimulate massive auto propduction and make car ownership available for millions of working families. this is a phenomenal thing. >> a tax code change like that would have to go through congress. he barred chinese autonomous vehicles from driving on the american roads. >> it's like one party is giving away home healthcare -- a great give away. >> i'm not arguing in favor of any of this. >> it's weird. one wants to give away everything for services and home health care and jobs.

the other one doesn't want anything taxed anymore. some of these things, i think it sounds on face value you, no chinese made autonomous vehicles. let's make them here. sounds like a good idea, but then you have to think it through. you have to think it through and then, i think -- >> not just autonomous vehicles. >> any kind of industrial. >> the big three will not want any that come with big tariffs. >> any big policy has ramifications. then, i think, there's a neo view, sort of, that we tried globalization where you go anywhere to get the cheapest labor you can and we have hurt a lot of workers here. >> i would say autonomous vehicles and there is a defense argument for that. you don't want to allow somebody -- >> all the haollowed out middle class jobs. if we do it here and pay more, it will cost more and there's inflation. we have to realize that is one

of the issues. >> as the question you are offsetting, you allow people to offset taxes by taking the deduction of interest? >> i bet you he is saying you get to write off the taxes on domestic cars you buy. i bet you he tries to do it with industrial -- >> it is the same thing as writing off your mortgage. there's a s.a.l.t. limit on that. >> i bet you he says to get to 15% corporate rate, it has to be on domestic manufacturing. this is all industrial policy, too, that you don't know what the ramifications are. >> it may be nobody else agrees with any of the give aways. >> congress will not sign off on it. >> ooth ither side. the home healthcare is $5 billion a year. if you pay for everyone until they die. >> you have to find a different

way to pay for it. you don't hear the other piece of it. they will tax on the other end, right? >> it's not enough to cover it all. >> you can't do unrealized d gains. that will never go through either. when we come back, the union support in the battleground state of pennsylvania. we are waiting earnings from jpmorgan and wells fargo. the reports that could change e nethto of the day and the week as we head to break looking at yesterday's s&p 500 winners and losers. >> announcer: executive edge is sponsored by at&t business. next level moments need the next level network. that's right crai. pulling in the perfect team to get the job done. i'm just here for the internets. at&t, it's super-fast! you locked us out?! and when thrown a curveball... arrggghh!

ahhhh! [crashing sounds] we had everything we needed. is the internet out? don't worry, we have at&t internet back-up. the next level network for small business. ♪♪ i sold a pillow! at t. rowe price, we help advisors move forward by building agile etfs designed to outperform the index. that's the power of curiosity. better questions can lead to better solutions. t. rowe price. invest with confidence.

congressional candidates in the key battle ground state of pennsylvania are working overtime to get support from union workers. emily wilkins is here with the latest on the story. good morning, emily. >> reporter: now republicans are making a play to win their

support. that includes rob bresnahan. he is a republican running for congress and pitching in tv ads as a third generation union electrical contractor who created union jobs. he doesn't fully agree with pro-union legislation, but said other issues are also key. >> border security is very important to a lot of people, specifically union members who work every day and give it their all and best at what they do. they feel they're getting put second to, perhaps, 10 or 15 illegal migrants. >> reporter: democratic congress member matt cartwright delivered millions in funding for the area. local unions endorsed him and appeared with him yesterday at this union hall here. travis buchanan who voted for c cartwright, is now voting for

bresnahan. >> the way of the old way is over. democrats, you cannot just expect that every union member is going to vote democrat the rest of their days. it's not going to happen. >> reporter: this race is one of only a few dozen races that will determine who controls the house next year. becky. >> this has been really interesting to watch. people have been trying to poll this. what's the best way to measure it, emily? is there a way at this point? >> reporter: we do have some results that we have seen from cnbc polling on exactly where unions are and we have seen a shift. if you want to go back to, say, 2012 and look at how its tracked, you are seeing a number of union workers lean to supporting republicans. we should note that a lot of union workers still support democrats. when i talked to folks yesterday in the union hall behind me, a lot of them said matt cartwright is a friend to us. we don't see any reason to not

go ahead and stick with him. obviously, a lot of interesting plays going here with union at the national level with the teamsters and firefighters union declining to endorse anyone this year. the teamsters has backed cartwright. you are seeing the differentiation here nationally and locally. >> emily wilkins, thank you. coming up, the southeast recovering from two hurricanes in past month. we'll go and put the spotlight on the nation's infrastructure and what can be done to repair it. this weekend, catch cnbc's newest series, millennial money. look at the lives and finances of the gbalol generation and how they are spending and earning and where they are investing. it airs 5:00 p.m. eastern time only on cnbc.

(intercom) t minus 10... (janet) so much space! that open kitchen! (tanya) ...definitely the one! (ethan) but how can you sell your house when we're stuck on a space station for months???!!! (brian) opendoor gives you the flexibility to sell and buy on your timeline. (janet) nice! (intercom) flightdeck, see you at the house warming.

daughter: hey, dad. dad: hey, sweetheart. daughter: what are you doing? dad: i'm gonna clean the fence. daughter: it's a lot of fence. dad: you wanna help me? dad: aim at the wall, but get closer. daughter: (gasps) what the?! daughter: alright. dad: side to side. when you work with someone who knows a lot and cares even more...

you can do this. ...you're unstoppable. (♪♪) wow... are you kidding me? you can do this. at truist, we believe the same is true for banking.

welcome back to "squawk box." recovery efforts under way after hurricane milton left a path of devas devastation. joining us right now is the founder and chairman of isquare capital and is based in miami. he is the author of "build." a 40-page book on infrastructure and what can be done to repair it. he is a member of president biden's advisory council. there's a lot to talk about. you were not personally impacted by the storm, but you have family members in the center of it all. >> absolutely. my mother-in-law lives in siesta key. she had to be evacuated and she moved to washington, d.c. unfortunately, we still don't have the news about the damages there. >> can anyone get cameras on

them or nobody can get to the area? >> not yet. not yet. >> electricity? >> early reports that the damage is more than people expected. >> more than people expected. >> yes. >> from the infrastructure p% persp perspective, when it comes to investing in this space, what do you think the ultimate answer is going to be when we start to think about the storms? is there a way to fortify the situation or do you think people say to them selves we are throwing up our hands? >> at the end of the day, it depends on the people's willingness to pay for the infrastructure. the fact is we need to create resilient infrastructure in the coming decade. that means infrastructure that can withstand changes in climate. whether because are you are on coastal area or texas or in the phoenix area where the temperatures have risen to the highest ever in the united states. 110 degrees. or you have a major storm, snow

storm, that paralyzes the entire electric grid in the northeast area as it happened in the past. all of these climate changes will require that you invest in infrastructure in the coming decade. >> who is supposed to pay for that infrastructure? >> good question. to date, over the last 70 years, the government has invested in infrastructure. when you look at the investment to gdp, we invested under 2% in infrastructure of gdp. china has invested 8% of its gdp in infrastructure for the last 40 years. thinkabout it. 8% compounded over 40 years. that's a lot. the fact is the infrastructure build that was passed by president biden, $1.2 trillion has done a great job of trying to improve our infrastructure given we haven't invested in the last 40 years. going forward t has to come from

user fees and it has to come from private capital that looks at invested infrastructure for the coming period. >> what is the right number? is 8% too high? china is spending 8% and we're at 2, you say? what would be the number that makes sense to you? if i was allowing you to rebudget america? >> those are two questions. there's a quantity question and a quality question. if you fund your infrastructure through taxes, that has certain implications. if you fund through private capital, that's another implication. if you fund it and don't increase the fees, you will get the same type of behavior every day by the use of infrastructure. you need to be able to have the right signal in the market for people to say i need to be able to invest in infrastructure because i think -- >> meaning what? i think about the tolls i pay across the gw bridge every day. you are here in new york city and they are not paying on the buses. 40% of the people don't pay when

they get on them. are those the type of user fees? >> those are the user fees we are talking about. you have user roads. i'll give you an example. how do you pay for the roads of the federalism b system besides to tolls? taxes. >> you have an electric fee to make sure you are paying your fair share. >> that's a state issue. >> absolutely. >> the fed will probably have to do it, too. >> i think one of your colleague wh s who comes in every day from new jersey, the amount of taxes with ez-pass and insurance. >> is astronomical. >> the other question is whether should pay for all, this i'm sure there are people, by the way, who may live in the northeast or the northwest, who say to themselves, i don't want

to pay for, you know, to help the folks in florida or help the folks in texas. just look at the number of senators who don't want to pass some fema bills. >> you are absolutely right. you have to have state by state type policies. >> it is all paid for by states and not federal government? >> at the end of the date, most will be done by the states and help of the federal government. that is the only way you can evncoururage infrastructure. take water, right? florida has been impacted. we have to rebuild a lot of that infrastructure over the coming months and years. the water sector in the united states has over 55,000 water authorities. 90 plus percent of them are government owned. they are all under invested with the quality of quawater and

investment. you need to bring in investment in the water resources so the 2 million people in the united states who have zero access to water can have access to water. >> based in miami. >> yes. 90% of the water. >> are you going to stay there? >> absolutely. >> you don't think you better move? >> no. >> so, phoenix, 110 did break a streak that was set in 1974. the highest temperature ever in phoenix was 122 in 1990. june 26th, 1990. everything we're talking about in the last 50 years. you really believe highest ever? >> yeah. >> in 1990, it was hotter. it was hotter. >> i saw the mayor of phoenix and -- >> she says definitely. never seen anything like it.

i think you better move. is your house on the ocean? >> no. no water views. >> the book is called "build." thank you for coming in. we got news breaking right now. >> wells fargo just reporting. we want to get to leslie picker with the numbers on that. >> becky, shares are moving lower on the numbers. we see a top line miss on the top line for wells fargo reporting $23.64 billion. that slightly missed the estimate. eps is $1.42 per share. also net interest income is the profitability metric for loan making was below expectations coming in at $11.7 billion. whereas the street expected 1i1 $11.9 billion. on ni, guidance, the company

expects net interest income to be down 9% from 2023's level. that was the expectation set last quarter and the fourth quarter nii is expected to be in line with 3q levels. for non interest income, areas like investment banking and fees was up 12% year over year and that was a beat relative to expectations. provision for credit losses is pretty interesting as well here. seeing a $1.1 billion provision that was a beat relative to expectations of 1.3 billion. some of that was $1.1 billion in net charge offs ncos declined from 2q levels and a decrease in allowance for credit losses which may assume a little bit stronger of an economy and a little bit stronger credit quality perhaps than, you know, we have seen in recent quarters here. noninterest expense coming in at

$13.1 billion, that was also a beat relative to expectations of $13.2 billion. so, this is definitely one to watch. it appears shares have rebounded a little bit on these numbers as investors have had some time to parse through them, guys. >> all right, leslie, thank you very much. all right. jpmorgan reporting results. it is above estimates of $4.01 a share. look at all the different metrics for the company. just hitting now. and there is a lot of net interest income, managed revenue, all kinds of different things that we'll look at for the company. >> net interest income is $23.5 billion. noninterest expense, $22.6 billion. the assets under management for the third quarter up 23% to $3.9 trillion. also, the end book value up by

15% to 115.1 -- $115.15. return on tangible, common equity, 19%. and, again, we have to get through to the ak before we can read the rest of the results on this. but if you look now, the stock is up by about 1%. when we come back, we will have more on the banks. and a reminder for youyou , can get the best of "squawk box" in our daily podcast. follow squawk pod on your favorite podcast app and listen anytime. we'll be right back. >> announcer: this cnbc program is sponsored by truist securities. experience, expertise, execution.

welcome back to "squawk box." we're live at the nasdaq market site in times square. look at where things stand this morning. we're going to get a slew of earnings. just got some from wells fargo and jpmorgan. take a look at the futures right now, dow jones off 20 points, nasdaq 57 points, the s&p off about 5 points. we're going to bring you more on the earning reports in just a minute. by the way, treasuries, two-year, sitting just under 4.3983 and 10-year at 4. when we come back, this morning's top stocks to watch. don't go anywhere, "squawk box" is coming right back.

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

all right, let's bring in stephanie link to talk the bank earnings so far this morning. steph, it looks like jpmorgan shares are up by 2% right now.

we also heard from wells fargo and blackrock with some of the earlier things we were watching with this. what do you think? have you looked through the numbers on jpmorgan? >> yeah. the numbers were actually very good. here's what i'm noticing from bny, blackrock, jpmorgan, aum very, very strong. bny up 18%. blackrock, up 8%, jpmorgan up 15%. investment banking business for jpmorgan was double the expectations, up 31% versus up 15%. so, we have a conference, a couple of weeks ago, from barclays, and all the banks spoke there. and so i wasn't expecting anything new. for the earnings. but these are really pretty impressive numbers i'm seeing so far. even wells fargo, by the way, net interest income, it is a 2025 story because, you know, we -- they're not benefitting from the steeper yield curve and fed cuts.

but the noninterest income at wells fargo, they're gaining market share across the board. so, very encouraging on both stocks this morning. >> do you like the banks in general, steph? >> well, i do. i have for a while. i am overweight the banks. i don't own wells or jp, but i do own morgan stanley, bank of america and truist. i think that you are going to see a 2025 story of net interest income returning and growing. and then also fees being better than expected. and aum also being pretty good. credit is normalizing. and here's the big thing, when bazell 3 endgame gets finalized, you're going to see these companies buy back an enormous amount of stock. the large banks in general have excess capital of $158 billion or 9% of market cap. so, can you just imagine when we get resolution on what they have to hold in terms of excess capital, which is going to be less than expected than they

will be buying back stock. that will be very supportive, especially at these valuations. >> you've seen berkshire hathaway selling off a big tranche of its stake of bank of america, just fell below 10%, they won't have to report within three days of any sales that they have going from this point. does that concern you as somebody who owns bank of america? >> it is not a really good sign, of course. but the stock has had a nice run, so maybe perhaps they're taking the profits. i thought that brian moynihan at the barclays conference sounded the best out of all of the companies that spoke in terms of low single digit loan growth, m&a pipelines starting to see acceleration, their wealth management business, they'll benefit like the other companies from higher asset prices. and he actually raised net interest income for the fourth quarter, not the third quarter, but the fourth quarter, when he

spoke, again, at this conference. so, and there is a lot they can do on a cost side and he, in particular, said when bebazell endgame gets resolution, they're going to buy back $20 billion in stock. you're about to see a buyback cycle. so i like it, i don't like fighting warren buffett, but i think there is still some value here. >> the idea of a potential recession obviously we're hoping for a soft landing. the economy still looks pretty good. but if things took a turn for the worse, what would that mean for the banks next year? >> well, obviously, would not be good. what i would say is watch the consumer. because so far, all the banks are saying the consumer is doing just fine. and that's a big part of their business, of course. of course, if we do see a recession, you're not going to see a steeper yield curve. you won't get the nii story. certainly those are the risks,

but that's not my best estimation at this point in time. i think the economy is chugging along. who would have thought that after 3.4% gdp growth in 2023 that the atlanta fed tracker is now running at 3.2% for the economy. so, i don't see recession for now. and especially if the fed goes on a rate cut cycle, even if it is not as fast as people expect, i think that will be very positive for the consumer and that's what i'm watching for. >> okay. steph, thank you. it is just past 7:00 a.m. right now on the east coast. you're watching "squawk box" on cnbc. i'm andrew ross sorkin with joe kernen and becky quick. got a lot going on. a lot of earnings reports. some other stories including this, though, more inflation data ahead. september producer prices is due at 8:30 eastern time. the number to beat, all forecasters expecting up 2% exclude food and energy. last night, elon musk unveiling

tesla's much awaited robotaxi which he calls the cybercab. it could start in 2026 and the vehicle which doesn't have a steering wheel or pedals may cost less than $30,000. a lot more on the long awaited robotaxi debut in a bit. and maybe suggesting it could even get pushed out a little bit longer, but we'll see. and then venmo adding the ability to schedule payments and requests, which has been a long requested feature. people can use the tool to send out one-time payments and schedule them to go out monthly, weekly or biweekly. users will get a reminder the day before payment goes out, just in case you don't have enough funds in your account. checking the futures, off a little bit yesterday, actually now turned positive on the dow, about 10 points. nasdaq continues lower. tesla down. let's get to dom chu with a look at this morning's premarket movers and we may talk about that. >> joe, becky, andrew, we start off with the earnings slew we have coming out here as andrew

alluded to. bank earnings kicking off today. blackrock, i mean, asset manager, but still you get the idea. blackrock shares higher by just about one half of 1% here after posting a beat on earnings and revenues. it reported a record $11.5 trillion in assets under management. jpmorgan chase is also higher this morning, around 2% or so, after reporting a beat for profits and revenues on better than expected interest income numbers. and wells fargo shares up just around 3.5 to 4% at this point after mixed third quarter results. earnings came in above expectations. revenues and net interest income came in below some analyst estimates. still parsing through some numbers, that was late breaking the last five or ten minutes. now a couple of analyst notes to watch as well. nvidia shares now up just about .1% after goldman sachs increased the target price to 150 bucks from 135. they reiterated their buy rating saying they believe the strong

demand for a.i. computing should drive sales even higher. nvidia shares in focus. we'll end with a look on chips as well with broadcom. shares just down one-third of 1%. bank of america named the stock a top pick. the firm pointed to growing a.i. opportunities. they say the company presents a unique combination of silicon, recurring software and revenues and also cash returns as well. so broadcom shares, nvidia shares and big banks, joe, in focus. i'll send things back over to you guys. >> just the very beginning. we got that -- the feeling of all the hope and promise of a long earnings season. just flooding us with emotion right now. you summed it up nicely. thank you. we'll see you again. you got your work cut out for you, though. >> it is a lot. we're up to the task too. >> stay with us. all right. see you later. when we come back, a report from fitch ratings says hurricane milton could cause up to $50 billion in insured losses

for florida property owners, pushing insurers estimated losses in the state to over $100 billion in 2024. we'll have more on that story right after this break. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com.

millions of people in florida are still without power after hurricane milton spawned tornadoes, flooding and powerful winds. joining us right now with a look at the storm's cost and the impact on the insurance sector is yurone kunar.

how high do you think the insured losses will end up being? >> good morning. it seems like this will be in the tens of billions of dollars, call it 30, 40, $50 billion or so. >> so, escaping the worst, but you're still talking about tens of billions of dollars. you add that to what else we have seen this hurricane season already with helene just a couple of weeks ago and the potential for more. how would you quantify this year overall for the insurers who do have insurance in florida? >> yeah. it's definitely an active year, not just in florida, across the u.s. looks like losses, catastrophe losses across the portfolios will be well over $100 billion this year. it is a large event, but at the end of the day, it is a manageable loss in the grand scheme of things. this will be a large earnings event here, not a capital event,

unless you are very concentrated. if you are a floridian insurer, this is going to be a very, very tough year for you. if you're a national insurer, who probably has no more than 3, 5, 7% of premiums allocated to florida, this is still a manageable situation. >> you say that there are certainly insurers that you would be buying here. i guess because the worst was avoided and maybe stocks were trading as if the worst was going to happen ahead of time. what are the stocks you like the most? >> the entities that are really meant to kick in when you have a very large event, in the tens of billions of dollars if not more, so we are on parched capital, names that have a share amount of exposure to catastrophe events, but the risk itself, so

as not to blow up in such a situation, be there for their insurance partners and the other thing we have to consider here is the worst the situation is, ultimately you also get pricing at the back end of it. so, looks like in this particular situation, given that it won't be the worst case situation, i'm not sure that we're necessarily going to see a pricing uplift at the back end of this. but we also have to remember that after hurricane ian hit in 2022, we already saw a very significant increase in pricing and risk adjusted rates for the industry for the reinsurers. and the fear was that as we ended 2024, considering these particular companies did not face very significant losses the last two years, because they changed the terms and conditions so much after ian that we would start seeing some more significant softening of rates as the renewals of 2025 came

about. if we have this level of risk and fear in the system right now, maybe discipline is actually maintained and the pricing that has been very, very good maintains itself another year. that is a good outcome for the reinsurers. >> it is an interesting way to try to cover, because there are times when the effects of a tough year, where you have more than expected adverse weather events firms up pricing and then you never know. and i'm thinking back, i have a long memory, i remember warren buffett was on at one point and it was after 2006, 2005, i don't know how many storms there were in 2005, i think that was katrina, and then ten-year, 12-year period, it was very quiet and no category 3 made landfall in the u.s. they had strong pricing the entire time. and it is, like, after one year,

they think it is going to be an annuity every year, and then the insurance companies raised prices or have pricing power and nothing happened for ten years. does that still happen or are those days gone? >> actually, after katrina in 2005, you had a couple of years of strong pricing for the insurance industry. since then, from 2007 or 2008 to 2022 or so, you were not really in the hard market where rates were not so strong for the reinsurers. >> but why? >> why? because to your point, we did not see losses or significant storm hit for ten years and because there was abundant capital. >> but you did see insurance rates go up to consumers in that period. >> true. >> explain what happens, why consumers get stuck with this stuff, but the insurance -- >> or get in a new business, i

think. i'm not understanding this at all. it is hard, isn't it? >> it is difficult. and we're talking about different slices of the insurance market. the reinsurers kick in at the higher levels. if you have a horrific event, katrina, that's when they really take a very significant loss. the insurance company, think about allstate, who covers your home, they are on the loss from dollar one, essentially, your attachment, your retention kicks in. so, any little hit to your home, the primary insurer, like allstate, like travelers, has to pay out. you're not only dealing with weather. you're dealing with fraud. you're dealing with fire, construction defects, anything you can imagine, all of these things were all still very much alive and well for the insurers over this period. and they had to react the inflationary trends. >> do you like the insurers themselves? do you cover the insurers you were mentioning? >> i do. >> or only the reinsurers?

>> i'm pounding the table on the reinsurers as part of this storm considering that 30 billion or $50 billion is manageable for them on one hand. on the other hand, the reinsurers are already in a hard market. and we expect that hard market to extend to some extent. the insurers -- >> they can raise rates. >> or they will not lose rates in 2025. >> okay. >> the insurers are in a different situation. here we also have to think about commercial insurers on the one hand and personal insurance on the other hand. we do like personal insurers. we like allstate, progressive. they have been getting rates lower in auto and also in home and certainly the storm will lead to additional rate needs in home. commercial insurers are a different situation. it is not so much the weather risk. there are other perils that are challenging for them right now, more casualty and theft that i'm concerned about. i'm certainly recommending on the two ends if you will the

reinsurers and the personalized insurers as things we believe will actually do quite well. >> okay. thank you very much. >> pleasure. coming up, elon musk invitation own cybercab event, not impressing investors. company's stock down in the premarket. and later, new york city mayor eric adams facing multiple federal charges related to bribery, fraud and so much more. will the crisis in the mayor's office hurt businesses in the big apple? that is the question. we'll talk about it when "squawk box" returns. >> announcer: time now for today's aflac trivia question. the new york yankees won the rld series 27 times. which franchise has the second most titles? the answer when "squawk box" returns. ke how aflac pays people money for the expenses health insurance doesn't cover. aflac! health insurance does leave a gap. but aflac gives people money to help close that gap. aflac! oh! coach prime got one on the line too baby!

uh huh! see that's how you hold up a trophy. trust me. get help with expenses health insurance doesn't cover. find an agent. get a quote at aflac.com. i hope you're hungry. i'm glad i brought my own dinner. uh huh. (man) look at this silly little sailboat... these men of means with their silver spoons, dinner. eating up the financial favors of the 1%. what would become of them when they discover robinhood gold allows others to earn their very liberal rates on idle cash, unlimited deposit bonuses and handsome retirement matching? they would descend into chaos. merciless chaos.

>> announcer: and now the answer to today's aflac trivia question. which major league baseball franchise has the second most world series titles? the st. louis cardinals, with 11. welcome back to"squawk box." elon musk unveiling tesla's robotaxi in a hollywood styled event last night. phil lebeau joins us with more

on all of it. phil? >> i think adam jonas at morgan stanley summed it up best. this is generally what you heard from most of the analysts after the event. he said, that's it? a disappointing lack of details. what we did get last night was plenty of showbiz, if you will. and fitting since it was on a hollywood lot. there is elon getting out, coming out, greeting the crowd, getting inside of the robotaxi, which some have called the cybercab. by the way, the ride shares, autonomous ride shares, not with this vehicle but models 3s and ys, that begins next year. here is elon musk talking about his vision for the future. >> you can pick up the car in the autonomous world as being just like a little lounge. you're sitting in a comfortable little lounge, and you can do whatever you want, while you're in this comfortable little lounge and when you get out, you'll be at your destination. yeah, it is going to be awesome.

>> the robotaxi, we didn't get a ton of details. more visual than anything else. two passengers inside, no steering wheel, no pedals, big screen in the middle. inductive charging. won't be plugged in in order to recharge. the cost, elon musk says it will start at under $30,000. whe when will it be built? >> we expect actually to start fully autonomous unsupervised sfd in texas and california next year. and that's with the model 3 and model y. and then we expect to be in production with the cybercab, which is really highly optimized for autonomous transport in probably -- i tend to be optimistic with time frames.

but in 2026. so, yeah. before 2027. let me put it that way. >> all right. there you go. before 2027. one more piece of elon's vision of the future when it comes to autonomous vehicles. this is what he calls the robo van. they unveiled it, it can carry up to 20 people. they had -- i presume those were tesla staff members who exited the vehicle. and this is somewhere down the line. their vision of urban travel, autonomous travel, though they didn't give a timeline for this in terms of when it will be developed, go into production, et cetera. as you look at shares of tesla, keep in mind that the one piece of news, the one piece of news that everybody wanted we didn't hear a peep out of elon musk about and that is with regard to a lower priced driveable vehicle that in theory is going to go into production and then go on sale early next year. remember, they teased that after

q1 they would start work on a lower priced vehicle. we heard no mention of that last night. so, that's another reason why you see shares of tesla selling off this morning. a classic buy the rumor on the run-up to the event, sell the news. guys, back to you. >> phil, did you see -- i don't -- maybe i don't think about the future like elon musk, obviously i don't. but he talked about the amount of land that is taken up with parking lots. and you think -- and you think of some of the huge parking lots that we're talking about, those are all people that have one car, one driver, here we are. think of those -- >> could change the whole world. >> could change the whole world. >> if you really believe -- >> those skcars have to get -- >> you say everybody switches?

you know how many vehicles are in the u.s.? take a guess. >> how many people. >> that people are driving. >> 320 million. >> i say more. >> you're close, becky. 290 million. 290 million. >> one for every person. >> you know how long it takes for a vehicle to really age out the average age is 13 years. even if you start to see a ton of autonomous vehicles being developed, it is going to take a long time. joe, you and i would be long dead and there will be people driving vehicles this way. >> speak for yourself, lebeau. >> parking lots will turn into little airports for your flying car. so don't get too excited just yet. phil, one of the things i was noticing on the robotaxi, though, only two doors? >> it is only two seats. >> it is a two-seater. >> only two-seaters. and is that -- what if you have a little child? >> you need one of those vans. you need -- >> then you need the van?

>> i think they'll cross that bridge at that time. look, i think the idea here is you can drive down the cost because of the size. and most people who are getting into a cab, not all, but a good chunk, people getting into a cab, people who are driving around themselves, they're either driving themselves or it is one other person. that is the majority of vehicle rides in this country. and that doesn't mean that, you know, there aren't people with three or four, yeah, that happens too. but -- >> i'm with you. i'm with you. i'm with the robotaxi, minivan. >> the robo van is for elon's family. he and his kids. the 20. >> i want a minivan for my family. robot robotaxi. >> that robotaxi -- the van looks five years away, phil? and can that drive on all streets? >> it has got to be further, andrew. do you really think this is going to happen by '27. it could, but let's be honest here. elon musk's history has been i'm

going to put a date out there, and then it is not going to happen by that date. >> he said that himself last night. >> it does happen, it does often happen, but it doesn't often happen when he says it will. so the robo van, they didn't give us a date. i'm not sure you should really sit there and say, yeah, we're going to see it in four or five years. >> okay. phil lebeau. >> you got to hand it to him. even taking on the world's underpopulation problem, single-handedly, himself. he is a can do kind of a guy, is he not? i'm not kidding. it is amazing. coming up, big bank results, recap is next. then the ceo of allstate joins us to talk about how much it is going to cos amelia, unlock the door. milton. we'll be right back. ♪ (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.

a recap of the morning's big bank earnings. leslie picker joins us. gratefully. leslie? >> good morning, joe. reactiondrilling down into the two largest banks here. both trading higher this

morning. noninterest income largely up across the board. at wells fargo investment banking fees up 37% in the quarter, while gains from trading activities were up 14% compared with last year, a similar story at jpmorgan, investment banking fees were higher by 31%, while markets revenue also higher thanks largely to equities. net interest income, the profitability metric from loan-making, somewhat mixed. that was largely expected. wells fargo showed a slight miss and declines of 11%. but held pretty steady on guidance there. jpmorgan beat consensus on nii and saw year over year gains despite some deposit margin compression. as for how banks are preparing for the future, well, wells fargo set aside $1.1 billion. that was less than analysts expected. the bulk of that from net chargeoffs. and ncos declined from 2q. at jpmorgan, provisions were higher than the street expected, though ncos were lower.

jpmorgan opted for a billion dollar net reserve build in the quarter. chairman and ceo jamie dimon saying in the release the recent geopolitical events show that conditions are treacherous and getting worse. he adds that, quote, while inflation is slowing, and the u.s. economy remains resilient, several critical issues remain including large fiscal deficits, infrastructure needs, restructuring of trade and remilitarization of the world. investors will, of course, be acutely focused on management commentary on today's calls as the outlook, especially as it pertains to the impact of rate cuts will be key this year. becky? >> okay, leslie, thank you. when we come back, we got a read on the consumer ahead of today's big inflation report. and then how the new york business community is feeling after multiple investigations engulf mayor eric adams. we'll be right back.

it all started with a small business idea. it's a pillow with a speaker in it! that's right craig. pulling in the perfect team to get the job done. i'm just here for the internets. at&t, it's super-fast! you locked us out?! and when thrown a curveball... arrggghh! ahhhh! [crashing sounds] we had everything we needed. is the internet out? don't worry, we have at&t internet back-up. the next level network for small business. ♪♪ i sold a pillow! ♪ ♪

♪ ♪ this one is for you.

right now it is time for a read on the consumer.

steve liesman joins us with the latest results of the cnbc nrf retail monitor. what did you find? >> becky, looks like consumers have taken a break between the strong holiday spending season, from summer season and the holiday season with the cnbc nrf retail monitor registering a decline after seven straight months of gains. the retail monitor powered with actual credit card spending data from affinity solutions shows spending down 0.3% with taking out auto and gas. that followed a half point gain in august. spending group 0.6%, a meager 0.6% year over year. taking out restaurants, what we call core retail shows a similar 0.3 decline and 0.9% year over year. the decline was broad-based with only three of our 12 sectors showing any gains. take a look at some modest gains in there. nonstore retail, that's digital sales, up 1.6%. clothing accessories up 1.1%.

there was quite a bit of inflation in the apparel numbers yesterday. health and personal care, a me me meager .04% gain. our initial read is that it was too early to pick up any effects from hurricane helene, though there could have been some impact at the very end of the month. hurricanes can boost spending ahead of a storm's arrival. for example, in building supplies and food. reduce them and then see them increase somewhat again as rebuilding begins. if it wasn't the storm, it leaves open the question of what prompted the drop. spending has been relatively robust throughout the year. but weakened from august, in august from july, before turning negative this month. economists have been forecasting a spending decline in the aftermath of the pandemic. that hasn't really appeared yet. nrf economist mark matthews tells me september is one of the weakest months for retail sales

since it is sandwiched between big summer spending and big holiday spending. october numbers will have some real impact in there from both helene and milton. economists see consumers in pretty good shape with low unemployment, real income gains and low inflation in the good sector generally. so, we're going to be working with affinity and the nrf to mind the data for impact of the hurricane, both on the states that were impacted and the broader national effects we haven't done it before, becky. but we can mine this data down to the county and zip code level. >> wow. steve, that matches up pretty similarly with what we heard from bank of america. and their surveys that they do on the consumers that they have access into seeing what their spending patterns are. i guess at this time, not knowing what any wobbles in the data mean, you know, you got to wait and see if it was an impact of the storms, got to kind of hold out and see a little bit. does that lead the fed to a

position where they might actually pause because they don't know if this data, with exact -- what this data is telling them, at this important time. i did hear your interview with austan goolsbee. you tried to pin him down on that and he kind of wiggled out, didn't want to answer it. but -- >> unsuccessfully. >> yeah. you did try. valiant effort. >> yeah, you got to try. here's the thing. i don't think the fed pauses here because i think what the fed is doing is not really related to the current data. i think the fed -- look, powell used this phrase recalibration 11 times. i take him at his word, he's recalibrating, which means that to me, anyway, that you're not adjusting data for the current data. the amount and pace of your cuts is going to be dependent on the data. but the idea that you want to bring it down toward a more neutral level tells me they could cut a quarter and not worry too much about getting too

close to the bone, so to speak. and just to make a quick comment on the first part of your question, becky, we're not going to know what is going on in october either. we're going to work to tease it out. i'm not saying it is going to be -- it is going to be perfect. we're going to try to see what we can find. but ultimately the data in october from employment to gdp to inflation and also retail spending is going to be, i guess, distorted by these hurricanes. >> steve, just in general principle, and you can tell me absolutely not, and i can see a reason because of our huge built up debt, i can see a reason why you would want lower rates. we're spending so much on interest, but do you think the fed is complicit or has to take any responsibility at all for sort of enabling us to get to 37 trillion? and just keep rates higher to put some type of governor on

what we keep spending. isn't it -- you know, the minute they make it easier again, it just seems like it greases the skids for more of the same thing. should they take any responsibility? or is it better to lower rates so that we're not spending so much on the interest accruing? >> joe, i have a slightly different take on your question in terms of my answer here, which is imagine an arm of congress keeping interest rates high because it does not want congress to borrow. >> yeah. >> i believe that would be completely out of bounds for an arm of congress to do so. you could imagine an executive branch doing that, maybe the courts can do it, i don't know who can check congress. but the fed works for congress. the fed answers to congress. and so, if congress is displeased with the extent to which -- if congress is displeased with the extent to which interest rates are low or high, it has the ability to go and change the fed's mandate.

but the reason why the fed -- now, look, greenspan did so. greenspan talked about this. i just don't think it is the fed's place and i know the fed doesn't think it's in its place to make interest rates higher or lower because of the amount of federal debt and to try to regulate. >> whatever they need to do, they need to give them the ability to do it, whenich is scary. >> that's the way the system is set up. congress doesn't like that system, if it is a bad system, they have to change it. >> okay. coming up, partnership for new york city ceo catherine wild is joining us to talk about how the business community is feeling about what is a wild situation here in new york. multiple federal investigations into mayor eric adams. we're coming right back after this. helps investors meet their goals. pgim investments. shaping tomorrow today.

welcome back to "squawk box." this morning, the new york city mayor eric adams facing now four

federal investigations related to bribery, fraud and other allegations prompting questions, of course, about whether there is now a vacuum of leadership in the day to day governance of this city, the most populous in the u.s. for a look at how this crisis could impact the city's business community, want to bring in kathy wild, the president and ceo of the partnership for new york city, a nonprofit comprised. the city's business leaders and major employers. good morning to you. this is a wild situation, if you will, crazy. >> it is the -- we're a 400-year-old city and it is the first indictment we have had of a sitting mayor. there is no way to deny it is concerning. and i think we had 24 hours of panic when everybody read the indictment. and then i think that we saw that the actions were being taken by the mayor and the governor. fortunately we currently have a mayor and governor that have gotten along and they have worked together. we had a new first deputy mayor

put in place. and so things are running. the city has 330,000 employees. and we have got, you know, we got a few problems, but for the most part -- >> you seem not panicked at all. you think this is going to be fine? you think he should stay in this job? >> i think we have shown so far that the city has not fallen apart. it is moving forward. things are moving in the right direction on most fronts. >> are they? there is not -- are there really people in place that you think in the mayor's office today that can make real decisions? >> absolutely. i mean, they have been making real decisions. the mayor calls the policy shots, no doubt about that. the mayor is critically important. and he is still doing that. as you see, he's out on the trail every day. he hasn't missed a beat. >> so this is a very interesting position. you're very supportive of this mayor, even though he's been indicted? >> we supported this mayor's

policies. he came into office with a message that was very much pro growth, pro city moving forward. >> is one of the reasons you're supporting him a fear that if he were not the mayor, that the type of person who would be in that role would be less business friendly? >> not really, no. i think that we want to see the process play out. i say he hasn't been convicted of anything yet. >> right. >> and the city is managing. if things were to fall apart, it would be different. if all of a sudden -- >> i guess my question is, yes, i'm not -- i live in the city. things have not fallen apart in the last two or three weeks. the question is not to me whether it falls apart in two or three the city and businesses in the city need to start preparing for the decisions, economic development oriented decisions and other safety decisions and all sorts of things when you have all these deputies who are, you know, who don't want to work for this mayor or can't work for this mayor or whatever -- there

are real issues here. >> there's a good professional team in city hall and they've been there really from the beginning. i can -- i work with these folks and i've worked with them in past administrations, many of them are veterans of multiple administrations going back to mayor bloomberg or earlier. >> the professionals maybe, but people inside the partnership have been complaining for years to this mayor about the group of people he even has around him already. >> that's a different issue. >> so those people have been complained about. you think if they're not even in the role that means there's nobody there to actually make the final decision. >> i think in the last period of time, most of those people are gone. >> right. >> that's my -- i'd like to defend the mayor. >> go for it frmts i have the inclination to defend him. >> you do? >> but i'm hesitant because of all the surrounding individuals where there's been problems, makes me wonder whether the judgment is bad about who he surrounded himself with. the actual hundred thousand

dollars worth of -- >> turkish airline tickets. >> got free upgrades. as a professional politician, if he only got 100,000 we should get rid of him for that because that's a -- >> cynical -- >> that's a pretty low number. if he can't do better than that -- and i'm kidding a little bit on that. >> just a little bit. >> just a little bit. just a little bit. because i think if -- my take is that they wouldn't have gone after that 100 if he didn't ruffle their feathers with immigration and some of his other comments and know full well the numbers are much greater, other mayors and politicians and you can -- you know, it's the old so express, give me a man and i'll find a crime. if you want him out you can find a crime. i'm not going to mention joe biden and $25 million but $100,000, don't even talk to me about 100 grand. >> well, again, i've read the indictment.

i'll wait and see what happens. innocent until proven guilty and all that. >> you're behind him. i thought i was an outlier. >> i'm behind stability. what business wants is political stability, they want the city services to operate, things to move forward. if we see that things are falling apart, that we don't have great leadership in the critical areas of city hall you're going to see a change and a great concern and a demand for fixing things. but so far the mayor, the governor has worked closely, been closely involved. things are on a good track in terms of cleaning house in city hall from where the problems were perceived to be, and making sure that good people are in place. by the way, this administration is filled with good people from the beginning, and i can laundry

list them who are solid, who are professional, maria sprirng who came in as first deputy mayor i met her at the beginning of the first bloomberg administration and she's been there regularly ever since. steady hand. the people surrounding her. the professionals in city government are terrific. i work with them every day. that's what we're paying attention to, is the garbage getting picked up, are we going in the right direction on crime statistics? are we move forward on city policies? there's some critical things right now. >> if he's not the mayor what happens? >> who is the inext guy. >> is it andrew cuomo. >> who is second in line. >> where you think this all goes. >> did you see the polls today? 55% of those polled by morning want mayor bloomberg back. that would be -- that would be very popular in the business community i'll tell you. >> you think there's a chance eld take the job on a temporary

basis. >> we don't have a provision for that. >> for that. >> what the succession is, if the mayor is removed from office or resigns from office the public advocate becomes the mayor for 90 days. >> right. >> during that period of time they have either they have a special non-partisan election that elects a new mayor and that will be a very large cast of characters, or we go to our -- if it's within 90 days, after march 26th, that the mayor leaves office, then we go to the june primary, which is the regularly scheduled primary. >> when kathy hochul calls you up and says what should i do, should i pull this guy? i assume you're saying keep him there as long as humanly possible? does she call you and ask you that? >> no. >> no? >> she certainly is in regular touch with members of business, labor, et cetera, for thoughts about -- about how to handle.

this was, you know, when the indictment first came down, because it was unprecedented. but she is -- she has had a steady hand and i think everybody has said, let's be careful. let's work slowly. we do not want to blow this up beyond -- in a way that affects the operations of the city. that's the most important thing. so far that is what's happened. where we're vulnerable, as you pointed out earlier, whether or not new initiatives get started, how we move forward. we're hopefully we will see that, but we are in the third year end of the third year, of an administration where the agenda is really set. the policies are out there. we want to drive home the city of yes for housing which will bring hundred thousand units of new housing to be built online. >> we can only hope. >> we want to make sure we're moving forward. >> right. >> with progress. >> let's hope.

thank you. nice to see you. >> thank you. >> coming up, after a stimulus surge, chinese tech stocks are coming back down to earth. more on that after the break. later, the ceo of allstate joins us to talk insurance risks and impact of hurricanes helene and milton. "squawk box" will be right back. s of the 1%. what would become of them when they discover robinhood gold allows others to earn their very liberal rates on idle cash, unlimited deposit bonuses and handsome retirement matching? they would descend into chaos. merciless chaos.

when it comes to investing, we live in uncertain times. some assets can evaporate at the click of a button. others can deflate with a single policy change. savvy investors know that gold has stood the test of time as a reliable real asset. so how do you invest in gold? sandstorm gold royalties is a publicly traded company offering a diversified portfolio of mining royalties in one simple investment. learn more about a brighter way to invest in gold at sandstormgold.com. so, you know, han is 22 years old, and we've been together most of my life. not often do you have a childhood dog that, that lives this long so i think it's really unique and special that we've experienced so many, so many things in life together. knowing that he's getting good nutrition and that

he has energy is a huge relief for me and my dad. “such a good little bean.” we're so grateful to have had this time with him, so let's keep it going and make every day special.

. it is 8:00 a.m. on the east coast and you're watching "squawk box" here on cnbc. i'm becky quick with joe kernen and andrew ross sorkin and earnings season kicking off with some of the big banks reporting this morning. jpmorgan topped analyst profit and revenue expectations. the bank generated more interest income than had been expected. profit fell 2% from a year ago but revenue up by 6% and the stock up 1.5% this morning. wells fargo quarterly net income declining year over year forecasting a larger than expected 9% drop in 2024 interest income. third quarter net interest income down by 11% versus last year up by 3.5%. blackrock also beating profit and revenue expectations, assets under management at the firm grew to $11.5 trillion. that is the third straight

quarterly record high and that stock up by 1.8%. elon musk unveiling tesla's self-driving taxi concept car but shares of tesla are falling in the premarket. several wall street analyst teams voicing disappointment with the event held last night at warner brothers studio near los angeles. designed with no steering wheel or pedals, musk showing off what he hopes tesla can -- says can be produced -- producing a cybercab before 2027. as weknow, as the ceo, musk has said and said it last night he is sometimes overly optimistic about some of those projections. here's elon musk unveiling the robo taxi. >> you can pick up the car in the autonomous world as being like a little lounge. just sitting in a comfortable little lounge and you can do whatever you want while you're in this comfortable little lounge. when you get out you will be at your destination.

so, yeah, it's going to be awesome. >> he should note former president trump made news on evs yesterday speaking at the detroit economic club a few hours before musk's event. trump called the idea of autonomous cars, quote, a little concerning. meantime musk gave a few other updates saying that he expects to have unsupervised, full self-driving up and running in texas and california, he says next year in the company's model 3 and y cars and the company has made progress on its optimus robot and could be eventually priced at 20 to $30,000. futures have been -- we have an important numbers at 8:30, the dow off a little bit again back in the red. the nasdaq, as the dow has moved lower, has actually moved a little bit more into the red now down 68 points. tesla is lower. treasuries 4.09 now, slowly creeping higher.

too early, mike, to say that the vigilantes have returned. >> yeah. >> but i'm ready. i'm ready for that at some point. i was talking to steve about it, if the fed itself won't make it tougher to tighten the, you know, control a little, maybe the market will eventually. >> i mean we're a good distance between 4.10 on the 10-year and having a move in the yield that is about rebelling against excess supply and debt levels. the chatter and catalyst around the 5% level. i think 4.25 on the 10s is where you look to see if we're just retracing some of that decline or something more. take a look at how the s&p hung in there, week to date. we did not have a dramatic reaction to the minor upside in cpi yesterday probably because yields had adjusted higher and already kind of adjusted the fed to have fewer or shallower rate

cuts from here on out because of the payrolls number a week ago. the market has become less generous as much as it's done well. up 21% or so year-to-date. this is a one-year chart dating from last october. you had strong momentum trending markets and then if you bought the s&p on july 16th, the summer peak, you had almost 10% decline from there and now you're 2% from that july 16th. seasonal choppiness has been brought to bear. enough rotation keeping the market grinding higher. take a look at the bank index. we're talking about jpmorgan and wells fargo, initial positive responses. interesting spot for the bkx. got us above that silicon valley bank meltedown level right there and still some upside to be done if you're going to go back toward the prior highs before the fed was tightening and that stagflation scare. but still, all else being equal you like to see banks participate on the upside markets.

on a short lease as we get through the earnings. mag seven type stocks have reasserted themselves a little bit. nvidia this week. i want to point out over the last three months how much dispersion there is, how much diversity of returns we are seeing within that group right now. it's definitely more discerning market. it's winners and losers. it's not a monolithic, just buy the big stuff or average stock out there. i think that's probably healthier that we're going company by company instead of just buying catch phrase like magnificent seven. >> excellent. thanks, mike. happy friday. have a great weekend. our next guest uses ai to determine investment strategies and recently launched intelligent livermore etf holds a big position in stocks in china. joining us doug clinton, intelligent alpha founder and ceo. nothing goes straight up to the heavens. you still think china is buyable at this point?

>> not only do i think it but our ai committee also thinks it. obviously, when we launched that etf livr, china was one of the key holdings that ai wanted to have in the portfolio. and we had about 15% or so exposure to china. we had a great run after the stimulus announcement, and now we've had this pullback kind of 10% after a 40% run. we asked ai what do you think from here? and ai said we think there's another 10 to 15% upside. >> can i -- you guarantee me this is not garbage in, garbage out? who developed this? why do we think it's still not a rae flexion of the person that wrote the -- whatever it is that's generating the conclusions from the ai? >> we use the leading large language models in the world. we use gpt, gemini. there's certain information and certain sort of prompts and instructions that we give those models, we try to keep them as unbiased as possible, and we get those models to give us

responses. so i think we've, as human, still interacting with the model, we've tried to do our job which is prevent garbage from going in so that we don't get garbage out. >> [ inaudible ] providing it. >> we provide various data. some of it is economic data broadly available, some of it is earnings data, historicals from companies, and then we also use the models to actually make projections like analysts, like humans might do. >> right. >> and say what do you think is going to happen in the future. we use that as an input as well. >> do you direct -- >> go ahead. >> do you correct just the stuff going in or do you correct some of it coming out and say we believe this part of it but not this part. >> we try not to do the latter because i think the super power of ai is really avoiding human bias. if we start making our own judgments on what ai is saying, then it's more human augmented analysis rather than ai powered analysis. >> i want to go to what it's training on. so you're effectively providing it how much data? on a relative basis to,

obviously, the public stuff that it's trained on online. >> it's hard to quantify. you can think of it as -- depending on what use case is, say we're evaluating a large case of u.s. stocks we would have 500 stocks and might have several hundred rows of different data. if you think about it like a spreadsheet. it's a significant amount of data. it's probably not as much data as traditional machine learning model approaches might use, but we're trying to also pull in the intelligence, the base intelligence, of these long range models as well with that data. >> you're taking all the earnings reports for the last how long? >> oh, earnings reports? >> doing earnings reports? let's talk about -- i'm curious sort of how you're -- i think there's a lot of folks trying to figu figure out how to use ai in the way you are. >> we might go back several years, put it that way. i don't want to give away all the secret sauce. several years of data of those earnings reports and historical estimates and we would pull in consensus forward estimates as

well. >> would you put in analyst reports? >> we've experimented with that. we don't currently do that. that's something in the future we would like to use more. something else we would like to do in the future is have these models talk to human experts do channel checks. >> would you put transcripts from interviews or from conference calls? >> we do use those. we use transcripts. we use, you know, tv appearances even from ceos of companies. >> calls as the countriry or coincidence -- it might depend on the analyst or -- >> i don't think -- >> how the ai perceives how great the analyst has been in the past. >> do you do like -- what would ai say about interest rates and the fed right now? are they on the right track? i would trust ai more than someone flying by the seat of their pants. i mean i just think looking ahead, i don't think the fed is very good at anticipating things. i think they're more reactive

and it's gotten them into trouble if the past. i don't know if they're getting in more trouble right now or not. maybe they are or not. we're in this mess from staying at zero too long and any ai program would have said get the hell off the schneid. >> becky mentioned to steven, could the fed pause here? ai, we do ask them about macro factors. >> do they say pause if. >> ai thinks a greater chance of pausing than the market thinks. >> really? >> that's interesting. that's something we can check in the next six weeks. >> what's core? as of yesterday core cpi still above 3 wasn't it. >> 2.9% year over year i think. i think. >> was it? >> i'm not 100% sure. i think that's the number. >> so that would be 50% too high. from what they want. >> right. >> okay. thanks. >> thank you. when we come back, taking stock of the damage from the storms in the southeast. how much will milton and helene cost insurance companies? we're going to be speaking with the ceo of allstate, and i can't

remember if that was the headline number or core, 2.9% was one of them. you're watching "squawk box" and this is cnbc. (grandpa) i'm the richest guy in the world. (man 1) i have time to give. (man 2) i have people i can count on. (grandma) and a million stories to share. (vo) the key to being rich is knowing what counts. (man) these men of means with their silver spoons. what will become of them when they discover robinhood gold allows others to earn their very liberal rates on idle cash. they would descend into chaos.

.

our next guest says market risks may drive a correction into the end of year but advises investors to buy dips. we want to bring in christian mueller, head of asset allocation research at goldman sachs. christian, let's talk about this a little bit. you think the downdraft that we saw in stocks in august may have been a warning shot and there could be a lot more to come? >> yeah. i mean, i don't think they're necessarily bearish. i think all macro baseline is quite frankly. we think you have a backdrop where growth is good, inflation is anchored. central banks are cutting rates. that's friendly for kind of equities for progress allocation. the challenge is you're dealing with bullish positioning and

dealing with that going into the summer maybe more than now, but i think certainly that has contributed to the setback in august and you're dealing with mixed macro data and, obviously, geopolitical uncertainty in the middle east and the u.s. election. i think there's potential that you get more corrections. >> okay. you're not scared of any downdrafts that would come from this point on. you think that's an opportunity. where would you be looking if you're looking at sectors? >> well the interesting thing is that we have the framework, this model, that gives us a sense of when you should be worried about the bear market. you don't want to buy a dip if you are worried a 10% correction becomes a 20% roll down. the reason you should not be worried about like severe bear market is two things. first of all, inflation and inflation momentum. i think this kind of decline in inflation we've had in the last year or so has really opened up

the central bank and allows for central banks to cushion growth shocks and to some extent financial condition shocks. so we've seen that in august as a case study, so we would expect that certain responsiveness from the central banks can prevents a correction turning into a bear market. you're building up a buffer again because on -- sold off a bit, moving back up again, so i think that's the first reason. and the second reason is actually price momentum. what we found is if equities in a six or 12-month horizon go up as much as they did, just in the last six or 12 months, it's usually pabecause of a macro backdrop there's a strong and such a strong macro backdrop doesn't disappear in a matter of a few weeks and months like it requires a bit more warning signals and especially with the labor market data starting to look a bit more healthy again.

so that's kind of why we're happy to buy the dips. i think in terms of sectors, i think we're certainly kind of generally because of our somewhat late cycle position we're leaning in two areas. quality growth that gets punished for whatever reason but in the long run is attract different and can see valuation expansion and then you pick selective, kind of cyclical value laggards that might have suffered significantly because of macro not being as friendly. so that's also going into the year end. >> does it matter what we hear today on ppi? inflation yesterday was a little hotter than expected. the jobs report, jobless claims, was a little stronger than expected yesterday too, so what do you think the fed is going to do? >> i think you make a great point there. i think we see a shift in the macro markets regime that is very different than the last one and a half years where you had good growth, you were somewhat late cycle and worried about

kind of recession risk, et cetera, but it turned out to be very healthy economy and recession risk anchored and you had inflation falling at the same time. and that actually is creating i called it the inverse goldilocks scenario. normally goldilocks means growth picks up without inflation. what happened in the last one and a half years, inflation went down without growth going down. so now this negative inflation momentum is behind us. i think we are starting to see less positive impulses from falling inflation, so now growth needs to be taking over as a driver of markets, of risk appetite, shifts from rates relief to growth being a driver. that is a bit less high ratio for equities as a backdrop because you always have to worry that with the better growth inflation accelerates too much, that puts upward pressure on rates. we know that the longer dated bond yields have other drivers putting up more pressure that can weigh on valuations. the last one and a half years

equities were driven by valuation expansion now it has to be growth. back and forth will happen. we are in the camp that inflation and -- is anchored and disinflation continues. we're not worried about this particular print or generate prints into year end. the key worry we have as you get those rate cuts, do you get the re-acceleration that brings more inflation with it? and we will have to see when we get kind of more evidence of that. >> yep. christian, thank you. coming up, berkshire hathaway unloading more of bank of america stock. plus the financial stock leading berkshire's portfolio performance this year. it's probably not one you would immediately guess. stay tuned. say guess and stay tuned. "squawk box" will be right back. f helping investors capitalize on growth opportunities. pgim investments.

shaping tomorrow, today.

at t. rowe price, we help advisors move forward by building agile etfs designed to outperform the index. that's the power of curiosity. better questions can lead to better solutions. t. rowe price. invest with confidence. berkshire hathaway cutting

its stake in bank of america again to now below 10% of the company. that means berkshire no longer has to report transactions involving bofa to the sec as quickly. berkshire began selling its stake in jeruuly and in the lat berkshire sold close to 10 million shares between tuesday and thursday and brought its stake to 9.987% or something along those lines. >> you get the feeling they could ramp it up now that it takes longer? do they want out? >> i don't know. that's the question. they've sold down a significant portion of their stake. >> now they don't have to report. >> you're not going to see it for a while. look, i would think if a lot of shares came into the market someone would be able to figure that out. >> we would know -- i mean -- >> you're not going to know in the next 13 -- >> i'm on a need to know basis if there's a reason he wants out of that or they. >> i'm sure you're at the top of his list to call. >> more about berkshire, the top performing stock in its portfolio this year is probably

one you would not guess. kate rooney joins us with more on that good morning, kate. >> andrew, good morning. it is a bank, it's newbank, berkshire's best performing company this year in its portfolio. latin america bank has been outperforming some of its counterparts in north america since january. nubank up 60% on the year three times better than the s&p. runner-up for berkshire's holdings is jefferies up about 55%, amexa top name for berkshire. the largest digital bank outside of asia, 105 million customers across brazil, mexico and colombia. the ceo used to be an investor in the u.s. he was a partner at sequoia. after he says he ran into issues opening a bank account in brazil he started nubank, sort of the founding story. he tells me they were able to leapfrog some of the incumbent banks going fully digital. he was surprised, he says, by

warren buffet's initial interest. >> we expected skepticism as well because, as you know, berkshire and warren, they invest a lot behind incumbent banks. may be the most successful investor in banks in history and we were a different type of bank, being fully digitally and customer obsessed. after a couple of months of discussing with our team they got very excited and decided to invest in our pre-ipo and they came back at our ipo and doubled their investment. >> and guys, there are plenty of headwinds operating in latin america. you've got sky high inflation, much more volatile rate environment and a lot of political uncertainty. velez says that backdrop made nubank more nimble in terms of where it can operate. the street is mostly bullish on this. average price target indicates 8% upside from where the stock is trading this week. credit quality and valuation have been parts of a bear case for nubank, valued more like a

tech company than a bank. the bulls point to healthy loan growth and better credit performance this year and geographical expansion, guys back to you. >> okay. question for you, what is the expansion actually look like geographically >> where are they growing? >> mexico is a big one. they started in brazil. they have the majority of market share there. they're using the same playbook in mexico. huge potential upside. 650 million consumers in latin america, so they're looking at that addressable market and very digital. a lot of people have smartphones. it's the smartphone and social media capital of the world is how some folks describe it. mexico is the one to watch. they operate in colombia. they're trying to take that brazilian playbook to mexico this is point. >> thank you. appreciate it. all right. when we come back,breaking inflation data, september producer prices are next. we will be right back with that. the market's closed. futures don't sleep in the after hours, bro.

dad, is mommy a “finance bro?” she switched careers to make money for your weddings. ooh! penny stocks are blowing up. sweetie, grab your piggy bank, we're going all in. let me ask you. for your wedding, do you want a gazebo and a river? uh, i don't... what's a gazebo? something that your mother always wanted and never got. or...you could give these different investment options a shot. the right money moves aren't as aggressive as you think. i'm keeping the vest. ♪♪ [inner monologue] in this gig... you get comfortable being uncomfortable. ♪♪ the enemy is always adapting... deepfake: hey handsome. ♪♪ [inner monologue] ...always iterating. ♪♪

♪ ♪ with so much great entertainment out there... wouldn't it be easier if you could find what you want, all in one place? my favorites. get xfinity streamsaver with netflix, apple tv+, and peacock included, for only $15 a month. . ♪ we have numbers coming back,

but we have a superstar in house. >> we do. >> just walked in the door standing next to us. >> skooch over. >> say hello. >> can we get a better camera angle. >> he's here just to -- >> cameo appearance. >> doing other stuff here. >> we don't have a microphone on you is a problem. >> so exciting to be on the air. am i on tv? >> you're on tv. >> that's incredible. i'm with becky. >> with the greatest show in the world. >> this is the greatest show on earth. >> wow. keep that tape. by the way, with what is arguably the most successful in america today. can we say that. >> probably not quite market cap in terms of getting to this market cap -- >> yes. >> 16 days or whatever. >> it wasn't quite 16 days. 32 years and 16 days. >> that's what they always say about instant success. it's always like decades in the making. >> and then overnight. >> and then overnight. >> we have a -- >> hold on. >> we have the ppi --

>> did you notice the market fluctuations of your own stock? do you look every day? >> not every day. >> sometimes i'll look on -- at the end of the day. >> at the end of the day. >> sometimes -- >> does it impact how good or bad you feel? >> no. >> okay. >> i'm curious. it does go up and down we talk about that. >> are you interested in the ppi today, and i know i said -- are you interested in the -- >> inflation prices. >> i think we should let -- >> nothing i can do about it, so my interest level is low. >> that's right. >> i still enjoy your show. >> we love having you here. >> all right, rick, you're on. >> september ppi. there's surprises here. headline number better than expected, unchanged, but we have been there before. it was unchanged in july. to find a lower reading you have to go to december of last year when it was minus 0.1. ex-food and energy, as expected,

up 0.2%. and it's 0. 1 cooler in the rearview mirror, up 0.2 is still a little warm considering we were down 0.2 in july. if you loobk at ex-food, energy on a month basis, up 0.1%. last month downgraded from up 0.3 to up 0.2. up 0.1, well, once again, if you look at where we were in june it was only up 0.1. to find a lower number you have to go way back, the last time we had any negative number here or a zero, boy, i have to go back a long ways. we're going back to mid 2020. now the year over year numbers, 1.8 year over year headline or final demand as we call it, that's definitely warmer than we were anticipating and 0.1 hotter than our last look. it comps to 2.1 when we were in july. ex-food and energy up 2.8.

definitely warmer than expected by 0.2 versus expectations. 0.4 higher than our last look which was just revised from 2.4 to 2.6, which now makes it only 0.2 higher. 2.8, well, we're at 3% in june. 3% in june. that's where it comps. finally year over year ex-food, energy and trade, 3.2.han the rearview mirror and equals where we were in july. boy, if you look at january, february, march, all three of those were under 3%. so how do you want to slice and dice this? are we making progress? in certain areas. i'm sure some of the newspapers just like cpi yesterday will say, inflation is coming in lighter. they cherry-pick which one. i don't know, when i look at cpi yesterday or ppi today, it looks like we're stalled in the sand and some of them are making slight progress than others, but it definitely still doesn't look like a 2% fed target.

so it all depends. how is the market? quite undecided about it, i guess. we're a basis point lower in 2s, around the same area in 10s, and consider that at 4.08 in tens, up two on the day, 11 on the week. if we get above these levels, and it's getting very close, we will have eight consecutive sessions both in 10s and 30s where it's traded above previous day's high yields. this is something that doesn't happen very often, and it really goes to the whole point of how interest rates have definitely gotten a life of their own and they do underscore that one dynamic, the fed does control certain aspects of rates on the short end and they have quantitative easing to try to manipulate rates beyond that, but the market has a voice and that voice has gotten a whole lot louder as of late. joe, back to you. >> but is it loud? it's louder but is it loud? that's the question i asked earlier. is it actually -- is the market

itself chaffing at the fed more or less saying, you know, the last mile, whatever you want to call it, that that's in the bag? because i don't know, a move from 3 core to 2 core, which if they really don't move the goal posts, if they're dead-set on getting to 2, there's no guarantee they can get that last -- wring that last amount out. it could start going the other way and increasing again. rick, would the market -- >> i think, yes. yeah. that's what i think. it's not only that i really don't think other than the fed's favorite inflation gauge, which runs about a half a percent under where cpi is, i just don't think we're going to get anywhere near 2% thoens. >> they said we have to and that is they would keep doing it until they get to no matter what and they already stopped and are going down. >> there's a credibility issue, yes. earlier, you had great discussion with steve, wish i should have been there, does the fed -- >> he poo-pooed me.

>> there's no poo-pooing here. it's an easy one, guys. >> okay. >> ceo of a big company. i'm a ceo of a big company. you're my treasurer. are you supposed to do my bidding or your fiduciary job? if the fed wants to keep interest rates too low to please their boss that's not a good thing. they should do what's right for the country. and if their boss, congress, fires them or changes their edict over that, then we all get to see it and weigh in with the ballot box. i'm sorry, i disagree with steve's interpretation on that one. >> certainly there were times in the past where i think the fed really made it easy for these guys to -- and gals to be able to spend -- >> name a time they didn't! >> right. >> seriously. >> beyond the pale to say, you know, hold on, guys, let's take a step back before we get to,

you know, 130% of debt to gdp. i don't know. i don't know why that would be such a hard thing to do. supposedly -- if i were the fed i would like to say, it's not our problem. we need to hear from congress. i would say that too. that way there's plausible deniability. we have to get to david here. thank you, rick. for more on this let's bring in david, chief economist for developed markets at newmore securities international. steve is here, too. we're going to go to you first. he's right above you. look up at him like this, steve. i got to look -- >> you have to look down. >> look, i really enjoyed that fictitious conversation you guys were having because apparently according to rick santelli, rates were not 5.5%. right. 5.38. right. rick said name a time they didn't. okay. for two years the fed has kept rates well above any measure of neutral, so you guys can go back and have your conversation

again. i don't see any inflation in this number. the market agrees with me. yields are off. yields are a little bit lower. the s&p turned from negative to positive territory just a couple points. i don't see inflation in the pipeline. rick is right. they're up, they're down. and if you want, joe, your kids to control your credit card or the people who work for you to control your credit card, then that's the system you're creating, joe. >> yeah. congress is our kids? that makes sense. >> go ahead, rick. >> other way around, rick. the fed works for congress. >> yeah. >> okay. you want the fed -- >> no, they don't no, they don't! no, they don't! they should do their job. if congress changes their mandate then we all get to see it out in the open in a transparent way. how do you know where neutral is? how do you know where neutral is? how do you know where our star is? nobody knows. it's a fallacy. oh, they're a long way from neutral. nobody knows where neutral is.

what if rates are destined to go to 14%. where's neutral then? that was your prediction. how are you doing with that 13% number you predicted. >> oh, no don't put words in my mouth. go back to the tape. >> how -- >> for the next ten years, i said over the next ten years, uncle steve, that i think there's a possibility to see double-digit interest rates. i still believe that. it's not my base case, but over the next ten years -- >> screaming same thing for ten years, rick. it makes everybody poorer, rick, when you scream. >> actually i haven't. no, actually i i have not. >> same story for ten years. >> zero when the government was manipulating putting all the anvils on one side of the scale. why do you continually speak out for an entity that for the most part, along with the treasury, has put us in such a bind? >> i'm not speaking out. rick, i'm explaining the situation. >> come on.

>> as it's been set up. >> i would never want to be a treasurer from your company. >> give me a second -- >> aren't anticipating interest rates at 10% in the next decade. i will put it that way. >> no double-digits? >> no double-digit interest rates we don't think. >> the data we saw yesterday and today. >> the data were hot in the cpi. ppi was fine. the key things for the fed is their preferred measure of inflation, core pce. when you look at the components from yesterday's print and just looking over today's ppi print that go into that core pce, it actually looks pretty good. didn't really raise our tracking estimate by very much over the past 24 hours based on these two prints, and so we think the fed is really still on track to cut 25 byes at each of the next two meetings based on these. >> within the next 18 months, will we get a core pce print of

2%? >> oh, yeah. we think -- we think that within the 2% range, certainly down to 2%. it may not quite get all the way to 2 even and fall below it, but i think, you know, when the fed analyzes how big of a deal the inflation miss is, it really, you know, cares more than twice as much about 4% than it does about 3%. so being twice as far away is more than twice as bad. >> like -- sounds like a richter scale thing. >> a richter scale. maybe not quite as big as that, butsomething maybe qua dratsic to get mappy on you a little bit. >> i like that. are you a math major? >> an econ major. >> that's the opposite. >> i will take the fifth on that one. i think it's appropriate the fed starts to shift to focussing on the labor market. we still think the labor market looks quite good. >> what's the long end say? this is just usual technical trading? the people are not worried that

the fed sort of jumped the gun or said mission accomplished too soon? >> i think that, you know, the difference between a 50 basis point cut and a 25 basis point cut was pretty small. the fed has shown -- >> why cut it all with the economy and stock market -- >> the fed didn't know the september employment print was going to be as strong as it was. it purchased some insurance so to speak. you buy insurance on your house, your house doesn't burn down, you don't say i shouldn't have bought insurance. things came out better than they had anticipated in that september print. we did have the somewhat elevated initial claims number yesterday, so there are, you know, our view to be clear, is that the economy and the labor market looks very strong. but there are some signs that, perhaps, you know, not every single thing looks perfect and it is worth focusing on this a little bit more since inflation is, if not all the way back to target, at least so much closer to target than it was before.

>> you should stick around. you know who we have coming up, right? talking about insurance. >> if do not know who you have coming up. >> the ceo of allstate. >> there you go. >> big time. >> yeah. >> you were just talking about it. made the lead-in for him. >> yeah. made the lead-in. >> thank you. >> my pleasure. >> rick and steve, thank you. we usually don't have things like that happen on this show, do we, sorkin? that's very uncharacteristic for -- >> disagreement. >> yelling. >> everybody is in agreement. kumbaya. >> coming up, top analyst takeaways from this morning's slate of earnings. we have a lot to do. bank earnings report season kicking off today. but first, allstate's ceo is going to join us on the financial impact from the hurricane and -- both hurricanes milton and helene. florida residents just beginning to get a sense of all of the damage. we're coming right back after this. check out shares, by the way, of nvidia. ceo jensen huang crashing our set just moments ago. the stock up nearly 190% in the

last yr. quk x"s coming right back. rator] not all multi-millionaires built their wealth the same way, you have... the fearless investor. the type a cpa. the bootstrapper. the bootmaker. yeehaw [narrator] but many do have something in common. we all trust schwab with our wealth. [narrator] thanks to our award-winning service, low costs and transparent advice. every day, over a million multi-millionares trust schwab with more than two trillion dollars of their wealth.

did you ever worry we wouldn't get to enjoy this? [jeff laughs maniacally] (inner monologue) seriously, look at these guys. they are playing great. meanwhile, i'm on the green and all i can think about is all the green i'm spending on 3 kids in college. not to mention the kitchen remodel, and we'd just remodel the bathrooms last month. with empower, i get all of my financial questions answered. so i don't have to worry. so you're like a guru now? oh here it comes— join 18 million americans and take control of your financial future with a real time dashboard and real live conversations. empower. what's next. (♪♪) (♪♪) what took you so long? i'm sorry, there was a long line at the thai place. 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 (luke) homes-dot-com is a new, investment objectives, relevated home-shoppings experience. beautiful design, tremendously rich content. feels like a work of art! (marci) what about the app? (luke) uh-oh! (marci) wow! went all in on gold. (vo) ding dong! homes-dot-com. we've done your home work.

welcome back to "squawk box." florida residents surveying the damage from hurricane milton which hit the state as a category 3 storm on wednesday. report from fitch ratings saying milton could cause up to 50 be there in insured losses. joining us in an exclusive interview at the table thrilled to have allstate ceo tom wilson. nice to see you. >> nice to be here. >> before we get into this, i'm curious, when a storm like this is bearing down and you're reading these reports, what are you doing? what do people at allstate do in advance of something like this? >> we're getting ready, obviously, and so we have -- we have a group that are kind of like storm chasers. we have 12 mobile units like motor homes we've reconverted with satellite dishes and stuff that drive around, we preposition them in front of where we think the damage is

going to be. we start getting e-mailing our customers and saying, hey, storm is coming you should get prepared, take your furniture in the house and stuff like that. so, right now we have about 5,000 people working on helene and milton. most of those are on helene because milton is still developing, maybe like 400 or 500 around milton. that will roll out. it's like all hands on deck. >> right. what about all of the -- i assume there's a surge of phone calls if people can even call in? >> yeah. we, obviously, staff up the call centers, but we're more proactive than that. like we will -- if we haven't heard from a customer a couple days after a storm, we will go to their house. we send e-mails. we use -- we do advertising and say if you're an allstate customer call us. we're out trying to find our people. >> how do you get to them when there's been so much damage to road and impossible to get in? >> it is hard getting to some of them in place.

so the interesting -- so that you can -- you work your way through. we set up like -- mostly in home depot parking lots, same when we have people come to us. the interesting thing is sometimes people want to see their houses and can't get there. we use a combination of satellites, fixed wing aircraft and drones so you can come to our insurance place at home depot and then you can see your house, which is kind of -- >> pretty emotional. >> want to see what's there. >> pretty emotional. >> very emotional. >> we're talking about the storms costing potentially $50 billion. have xwyou put a number on it? >> it's too early to tell. in florida we have a relatively small market share and buy a ton of insurance. >> how long have you been small? how long in the market -- when did you have a big market share? >> we've been getting smaller. >> in florida. >> for 15 years.

>> been going down. >> yeah. >> can i ask you, i mean, you're pretty good at ac actuarial stuff i'm sure with a lot of stuff. could ai make you better some day, do you think? do you use that? is it being incorporated? >> yes. let me -- i kind of think of ai like augmented intelligence, like makes us smarter. there's a whole range -- >> be pretty good at ac actuarial stuff already. >> the digitalization. we have roof scores on every house in america using satellite imagery. so we can tell if there's 30% of your house is covered by tree, trees versus zero. if you have trees hanging over your house your house has greater your house has greater risk, so we charge you more. the whole digitization of the world -- >> you've got every house mapped? >> and you can charge more if somebody's got a trampoline in the backyard that maybe they haven't told you about, you see it, i guess? >> yes. >> on the edges.

>> we have this question. and so, you can tell how old the roof is. the biggest thing is how old is the roof? i once had a friend, a hurricane was coming to connecticut, and she said, i hope it hits my parents' house. her parents are, like, 90, and i was like, is this an inheritance thing? she said, no, their roof is like 25 years old. they need a new roof, and if a hurricane comes, they get a new roof. we age rate roofs. if your roof is really old, then you should pay more, then if you have a new house and a new roof. >> i have a question about the health of the insurance business, broadly speaking. a number of insurance companies now, by the way, are attached to other firms like apollo or private equity firms and there's a real sort of connection between private credit on one end and the insurance business on the other. and when you think about, if this had been a category 5 or something much, much worse, there was talk among, you know, some that were super anxious

about how bad this could be that this could wipe out entire companies. do you even think about that? >> i think the insurance industry itself is not in bad shape. got about $300 billion of capital against homeowners. the insurance industry in total doesn't make money on homeowners. that's why you're seeing people change stuff. in general -- the biggest problem, andrew, i think is places like florida where the state has the tenth largest homeowners insurance company in the country that's owned by the state that only insures houses in florida. so, it's a giant -- it's got 1.3 million -- >> you think the exposure is too great? >> yeah, for sure. if there's a force 5 hurricane coming through florida, the federal government's going to be paying for it. florida's done a bunch of stuff right. they have a re-insurance thing. but there's not enough money to cover a force 5 hurricane, so somebody's going to have to pay. >> who should pay for that, and

what should the fix be? you think this is florida-specific, really? or are there other states like this? >> california's the same on wildfires and earthquakes. texas has got -- i think some of it belongs at the state. the state should take care of its own stuff at some level, and florida's done not bad there. what florida hasn't done well is allow insurers to price for the risk, so therefore, we say, huh, i'm not supposed to lose my shareholders money. i'm supposed to make money. so, we don't sell insurance. same thing's happened in california. texas has done a better job having private insurers come into the market. i think there's some part that needs to be done at the state, because there's things like building codes and resiliency and all that stuff needs to happen locally. that said, there are some things bigger than all of us, and the federal government spends a ton of money on this stuff. they just -- it's inefficient

and ineffective. like, 17 different agencies give out money. there's no rules around it. some politician wants to get re-elected so they give away water or trailer homes or something like that. i think the federal government needs to get its act together. >> interesting. tom, i want to thank you, and thank you for the work you're doing during this tough period for a lot of folks. >> on that note, i think the federal government needs noto g its act together. you could say that at thene d of every story. stay tuned. you're watching "squawk box" on cnbc.

welcome back, everybody. bank earnings season under way. we got results from jpmorgan and wells fargo and joining us right now is mcrae sikes. two of the top ten holdings are jpmorgan and wells fargo. what did you think of the numbers? >> i think they're encouraging. jpmorgan, solid results, great execution. they did raise their nii for the year, lower expenses so i think it's a good set-up for expectations going into next year. of course, we're getting the commentary and more of the same in terms of cautious macro outlook by jamie. wells fargo, also very

encouraging, good metrics there. they beat. they also had outlook for pretty stable nii going forward so that's encouraging. i think the big excitement that could be on the call is more of an update on the asset cap. there were some articles a couple weeks ago suggesting they were maybe in the final throes of getting that removed. so, any indication of that happening in the future would be very good for the stock. >> stephanie link was with us earlier this morning. she owns wells fargo too, and her major point about why she likes the banks at this point is after the basel iii resolution, she thinks you're going to see a big uptick in buybacks among these companies. do you share that view? >> it also depends on how basel iii works out but i think there is a lot of stored capital being used or being held up on the uncertainty around basel iii. i agree with that, you can see accelerated buybacks and some capital commitments after that. but we'll have to see. >> i think these were the only two actual banks on your top ten holdings. i know charles schwab was on

there too as a brokerage, but why those two banks above all others? >> i think wells fargo has been a unique situation, compelling value, and you have the catalyst and the asset cap and then jpmorgan, best in breed, great execution, and just incredible capital management and leadership there. >> what potential concerns would give you pause? is it looking at the economy, the potential for a downturn down the road? >> i think all the obvious examples would be credit, first of all, change in consumer behavior, any macro shock, of course, and then, you know, we're monitoring rates as well in terms of the joutlook for net year. >> we saw ppi this morning, cpi yesterday. still trying to figure out what the fed does next. will it spook you if the fed leaves things unchanged? >> we try not to get to short-term focused, but i think what they've laid out and what you see in terms of the inflation picture going forward is, you know, a pretty steady

unwinding of the rates and we'll see how that progresses over the next year, but all in all, i think you've gotten a flattening of the curve, no more inversion, and that should lead to a better environment for the big banks. >> macrae, thank you a lot for joining us today. let's take one more look at the markets before we hand things over to "squawk on the street." you will see the futures at this point basically flat, a little bit weaker. dow off by about 12 points. nasdaq down by about 65. s&p futures down by three points. the treasury market, we're continuing to see the ten-year just above 4% at 4.09%. the two-year, just below at 3.96%. that's going to do it for us this week. it's been a fun week. it's been interesting. we hope you have a great weekend and we hope to see you right back here next week. bye-bye. "squawk on the street" begins right now. >> see you later. >> see you later, alligator. ♪ good friday morning, welcome to "squawk on the street," ai'm carl quintanilla with jim cramer and david faber at post nine of the new york stock exchange. futures are a t