we'll be up 300 points by the end of the session. maybe. that's what we've seen. we are awaiting quarterly results from johnson & johnson and three big banks. google going nuclear. the company signing a deal to purchase power from nuclear reactors set to come online by 2030. crude prices are falling after a report says israel is willing to target military targets in iran. target and target. two of three words. instead of oil and nuclear facilities. it is tuesday, october 15th, 2024 and "squawk box" begins right now. good morning, everybody. and welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square.

i'm becky quick along with joe kernen and andrew ross sorkin. and here we go. take a look at the u.s. equity futures at this hour on tuesday morning. mixed right now. dow futures up. they actually turned positive. across the board, a little bit of weakness. not much. s&p down a by point. the dow is flat. nasdaq off 28. it does come as the dow rose by 201 points to a new record yesterday. the s&p was up .75%. it also closed at a record high, the 46th this year for the 1s&p. the nasdaq up .9%. nvidia was up 1.25%. for the month, that stock suppoup 11%. if you have been watching treasury yields, the ten-year above 4% at 4.06%. as joe mentioned, crude oil

following the report yesterday that israeli prime minister benjamin netanyahu told the biden administration he is willing to strike military targets rather than oil or nuclear facilities in iran. wti down 5.4%. in the last half hour, we have heard a response from theprime minister's office in israel. the prime minister saying they will listen to the opinions of washington, it will not determine exactly what they do. this is going to be something where they are deciding what's best for their own national interests. we'll see how this continues to play out. that washington post article was based on a couple of sources that had apparently been in the room listening to what was being asked by the biden administration of netanyahu. we'll see how things play out from here. you see the big pull back in crude oil prices. >> it's not -- it's weird that you would telegraph your intentions either way. >> well, it was coming from netanyahu. >> right.

led th let the other side know the plans. it doesn't sound the way you conduct a serious -- >> no -- >> war. >> part of this is because of the u.s. elections and in the post, it laid out this would be something that would be helpful to not have something very decisive come before the u.s. election. the idea this could have an impact of how the election plays out. >> you could see, you know, if you really are serious about what you're doing here, you could even see netanyahu or someone leaking incorrect information so the enemy would know what your plans are one way or the other. >> the issue of what are you telling the enemy? you don't want to tell the enemy or do you tell your allies and do they tell the enemy? the other issue is if you continue to mislead your allies to such a point, they are no

longer your allies. >> exactly. >> these allies, to some level, doesn't work otherwise. >> unless the allies are different in 21 days. >> we don't know the sources. every source has their own intent and what they are hoping to get by leaking stuff like this. add that to the mix. meantime, stocks in china pulling back overnight. it comes after china's government posted disappointing trade data after yesterday's close. mainland china indices down 2% across the board. hong kong's hang seng was down 3.7%. meantime, sticking with the issue of china, a new bloomberg report saying the government has begun enforcing a long overlooked tax on overseas investment gains by the ultra wealthy and rich. some were told to conduct self assessments or summoned by tax

authorities to meetings over payments. they will face a tax up to 20% on gains and some subject to penalties on overdue payments. u.s. and china are some of the countries with these taxes. former president trump would like to get rid of these taxes. >> the other place is eritrea. it is above ethiopia in case you are wondering. christopher waller signaling future rate cuts will be less aggressive than the .50 basis point cut in september. it could be a pause or .25. he cited employment and gdp and income. it indicated the economy may not be slowing as much as desired which is a strange thing to say. he did not commit to a specific

rate path, but said his baseline calls for reducing the policy rate gradually over the next year. this is exactly what we've been thinking given the strong jobs report that we had and the new records in the stock market and people rationalize why they did 50. it wasn't really 50. they are catching up with that and do another 25. now we recalibrate. >> yesterday, roger ferguson was with us. the former vice chair. yesterday, when we asked him, i specifically asked him if a pause was on the table. he said he didn't think so based on the information. >> said he wouldn't dissent, but he did not like the 50. >> he wanted 25. >> he would not have dissented so everybody can get along. >> he was betting on 25.

>> right. it was strange. >> first little hiccup. >> it was a little strange. then the data didn't confirm it. especially now the jobs data nor the inflation data which was a little bit hotter. google said it will buy nuclear power from kairos. google says the first reactor will be online by 2030. the company said purchasing for multiple reactors sends an important demand signal to the market while making a long-term investment to commercialize the industry. pippa stevens will have more in the next hour. and according to a bloomberg

report familiar with the matter. the robots were able to walk using a.i. a video posted online shows an optimus bartender acknowledging it was assisted by a human. >> still doing all those things, but more remote control than autonomous, if you split hairs. >> it reminded me -- i was there when we launched wsj.com. it wasn't ready to go at the press release. >> still a big leap from the guy dressed in a big suit. you could see from the waist. >> the point this piece, though, is raising is whether this is false advertising. >> looking like its listening and reacting. >> and shares trade based on it.

>> i would say years ago and not putting it in that category, the case which was about a prototype that was not really doing what -- it wasn't what it was. the question is are people buying into these shares based on a view that something's happening that's not really happening? i don't know. >> it's interesting. >> this next one is not cooties? the parent company of cover girl coty will come in below the prior forecast because of the slowdown in the united states. for the fiscal first quarter results that are due out on november 6th, the cosmetic maker said very tight order and inventory management by retailers result ed in weakness in certain markets. it expects some acceleration in

the second half. coty is the maker of cover girl. >> do some rebranding. too close to cootie. coty. especially for personal hygiene? you never thought? >> no. >> i'm not a branding expert. first thing i'd do. united health just reporting. earnings of $7.15 a share is better than $7.00 the street was looking for. disruption caused by cyberattacks. the revenue of $100.82 billion beating expectations for the full year. united health expecting earnings in the range of $27.50 to $27.75. that range coming in now a little bit tighter. the stock down about 2% on that news. >> would your kids use that term? they probably never heard that term?

>> which? >> cootie? that is like kyle, does kyle know someone who has cooties? >> yeah. >> max and henry? will you ask them for me? >> i will. >> are you familiar with a classmate? >> in this day and age, i will text them and ask because that's the way we communicate now. >> did you look at one of your classmates and say, eh, you have cooties? >> i know because they talked about it with covid. coming up, these are important issueses. we get ready for johnson & johnson and three big banks. we will talk to j &j cfo joe wolk. he said it led to 6,000 more

jobs. "squawk box" will be right back. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. 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. with powerful, easy-to-use tools,

power e*trade makes complex trading easier. react to fast-moving markets with dynamic charting and a futures ladder that lets you place, flatten, or reverse orders so you won't miss an opportunity. e*trade from morgan stanley glp-1 drugs used in weight loss treatments are a global blockbuster, even with disliked and inconvenient injections. study results are arriving monthly from lexarias patented oral delivery technology trials. lexaria bioscience.

[ thunderclap ]

your business needs a network it can count on. even during the unexpected. power's out! power's out! -power's out! power's out! -power's out! comcast business has you covered, with wifi backup to help keep you up and running. wifi's up. let's power on! let's power on! let's power on! -let's power on! it's from the company with 99.9% network reliability. plus advanced security. let's power on! power on with a leader in connectivity. powering possibilities. comcast business. on today's squawk planner, we were just talking about who's going to be on and major companies that are going to be reporting including johnson & johnson and bank of america and goldman sachs and citigroup. we will hear from cfo joe wolk

on cnbc. after the closing bell, united airlines is set to report. joining us now is sam stovall. you date the -- you think it's october of 2022. so you think the three-year or before that, sam? we're embarking on the third year now is what you're saying and that could mean some -- we call it volatility when it doesn't go straight up. if it went up every day, a lot, that could be volatility. you mean maybe not completely smooth sailing in the third year. >> that's right. good morning, joe. we have had 11 bull markets that celebrated their second birthday. we did that recently on october 12th. of the 11, three in the bear market in the coming months.

two more posted declines in the 12-month period and three additional ones posted gains that were below average anywhere from 2% to 6%. so, leaving only 3 of the 11 that posted returns that were worth righting home about. basically, what i'm saying investors should not assume we will see another 34% gain in the third year that we did in the second year, which, by the way, was the second best bull market since world war ii. >> it's been hard to find actual coincidence events every day to be good for another new high which is what we've been seeing. we've even had days where it seemed like the news was not great whether it's inflation or the economy running too hot and pres still seems to be like a beach ball, it keeps going down and

doesn't go up because of the $6 trillion on the sidelines. is there a lot of liquidity still? >> sure, there is a lot of liquidity and a lot of broad participation. i think with the advent of the fed now starting a new rate easing cycle with traditionally the last two months of the election year being positive with all sizes, styles, sectors and 97% of the sub industries in positive territory and also knowing if you have an up september, we typically have an up october in an election year. i think investors are basically saying i don't want to be behind the market again this year as i was last year and, therefore, putting the pedal to the metal. >> in the last two bull markets, are there ever significantly new higher highs made before the --

before either moderated or came back down? is it possible this goes on for another six months before bumpiness? >> that certainly is a possibility. of all the 11 bull markets that celebrated a second birthday experienced a decline in that third year. nobody escaped volatility that caused investors to wonder whether the end was year. but i think from a seasonal perspective, the end of this year tends to be fairly strong. first year of presidential cycles, the market was up a little more than 9%. slightly better than the lo long-term average for the market as a whole. traditionally, the market does take a breather in the first quarter and picks up steam again in the second quarter before stumbling in the third. essentially, i think that the --

unless we get to a point where people start to question the fed and question growth in the economy or we have a geopolitical event that upends things, i think it seems as if there's smooth sailing for the next three-to-six months. >> yes, a lot of -- a lot of things that we never know what we don't know in terms of the middle east oil prices. the ten-year has been stubbornly moving higher even though we're told we'll have $1 125 or 150 bs points of cuts. would you ever see the bond market feeling like the fed has lost control of inflation or do you think inflation's going to go the way that the fed is hoping? >> we think that inflation is going to go the way the fed is hoping, but we're not going to see their magic number of 2% year on year growth in core cpi

until 2026. since the fed is essentially aiming at a target below the horizon, whatever moves they make, they realize are not going to be felt until 12-to-18 months down the road. i think they don't want to maintain a tight policy for too long and cut off the soft landing or no landing outcome. i think, yes, the bond market, which really is not controlled by the fed, is indicating that, you know, there's reason to feel maybe inflation won't be coming down as quickly because we're seeing stronger than expected gdp growth and retail sales which are expected to come out later this week should remain firm and we hhave a resilient employment picture. >> do you think if we didn't get gridlock that would explain why we had not a great third year? if it was a sweep on either side, would that explain why we

had a subpar third year of a bull market? >> well, gridlock is good. we do know the best performances have come out of those years in which we had a split congress. unfortunately, you have pretty few observations with that. the greatest number of observations is when you do end up either with a totally unified government meaning a blue or a red wave or you have a unified congress. so, it looks as if based on cfra's washington analyst and strategy group, we are looking at a split congress again. >> all right. it's just the way of the world, isn't it? we all know that. we accept it as fact if we let either one of these parties, you

know, without a -- you know, without on offsetting or without a governor. all right. sam stovall, thank you. >> thanks, joe. all right. johnson & johnson just reporting earnings coming in at $2.42 a share. that is 21 cents better than anticipated by the street. revenue beating at $22.47 billion versus the $22.6 billion the street has been expecting. it looks like increased sales guidance. they were looking at 6% revenue growth. growth on revenue per share at 9% of that. if you look through some of the numbers on this, med tech in particular, was up sharply. up 6%. that included the shockwave acquisition they announced back in may. it would be up 4% without that. that did offset a little bit of the beat they had on pharmaceutical headwinds they were facing in china, japan and

korea. china and japan, it was economic. in korea, it was a strike there. it is up .50%. they were beating again aided by prescription drug sales. we will talk to joe wolk. he will join us later this morning. a first on cnbc interview with the johnson & johnson cfo joe wolk. 8%ght now, that stock up .. plus, stellantis reversing the remote work policy bringing workers back to the office. we have details on that story right after this. an

welcome back to "squawk box." time for the executive edge. stellantis bringing workers back to the office. this is a story we keep hearing and reversing the work from home policy. it comes after the profit warning prompting a share up at the top. the brands include jeep and chrysler want staff in the office on average of three days a week. it previously took -- right. three days. >> bastards. >> they only want 70% of the work force at home. praising remote work and drastically reduced office space and sold real estate to cut costs. >> they got rid of the office and not a place to come back? >> what do you do when you come back? this is a real thing. >> you said it. oh, my god. now demanding you come back three days a week.

>> it comes from people who moved far way figuring they could do this forever. >> the car company. it seems like it would be good. >> the factory people have always had to be in the factory. >> that's a problem. >> that's are the middle managers that don't do anything, anyway. it is possible. >> this has created a lot of problems in the work forces with white collar and blue collar. blue collar have been there throughout five days or six days throughout. >> it would be a good answer to income inequality and, you know, strike and everything alelse. why not give middle managers -- >> we figured when the economy turned down, the people working from home would bore the brunt. >> the ones that are totally

supe superfolous. >> "squawk box" continues after this debate. "squawk box" returns after this. >> announcer: executive edge is sponsored by at&t business. next level moments need the next level network. er 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!

good morning, everybody. welcome back to "squawk box." we are live from the nasdaq market site in times square. the futures this morning are muted. s&p futures are up a point. nasdaq futures up 17. the united states is weighing caps on experts of chips to certain countries in the middle east because of national security concerns according to the bloomberg report. those caps could impact exports from nvidia and intel and advanced micro. the difference this time is the chips exported to the countries

in the middle east and that changes things up. you don't see a huge reaction in the stocks. nvidia shares are down by 1.3%. amd off by 1.25%. in the meantime, boeing. it's just out with a new filing and phil lebeau is standing by in chicago with that news. phil. >> andrew, take a look at shares of boeing up 2% as the company announced it is opening a short-term credit agreement doing it with four banks. this is a credit agreement. they are not drawing on the agreement yet. they are setting it up. they have more options as they deal with the tightening liquidity situation. this credit line is for $10 billion. it gives them quick access to cash if they need it over the next several weeks or months, depending on how long the strike goes. four banks are behind the credit line. b of a, citibank, goldman and jpmorgan. boeing opening up a short-term

credit agreement of $10 billion. guys, it's not a surprise. they need to have as much flexibility as possible as they deal with this machinist strike that shows no sign of ending any time soon. we are more than a month into this and, again, most people have said in terms of free cash flow, this is going to cost them more than $1.3 billion per month. so that's why they want to make sure thiey want to have as many options as possible and we are looking for a capital raise as they deal with the liquidity as this drives lower. >> phil lebeau, maybe this is better and helpful in the short-term, but it just seems like a challenging situation. phil lebeau in chicago this morning. thank you. when we come back, transforming the tech scene in new york city.

mongodb ceo is here. he will join us next. you can get the best of squawk on squawk pod and listen any time. we'll be right back.

welcome back to "squawk box." the tech landscape has thrived in recent years. one has been mongodb which translated from a small startup, i remember, when it powered applications for some of the largest enterprises. joining us now is dev ittycheria, president and ceo of mongodb. first of all, congratulations on ten years on the job. >> congratulations. >> you are not just a gig worker, it's a gig. i want to get into mongodb, but in terms of the larger tech

scene in new york, there was the issue of silicon valley would turn into silicon alley. did it actually happen? >> a lot of people were concerned about building silicon valley in new york. at mongodb, the technology company built in new york. there was skepticism. >> your founder was one that sold the most important advertising company to google. >> that's correct. they brought me in ten years ago to build the business. i joined with $40 million revenue and 20 employees. >> the view is you couldn't do this in new york because? >> access to tall ent and acces to capital. >> you think capital would be everywhere. >> i tried to start a company in the late '90s and move to boston.

i think things have radically changed. one thing, amazon and meta and google have offices here in new york. as well as customers, you walk out the front door, i stare at my customers which are a 10 or 15 minute subway ride or walk. from new york, i can take a flight and get anywhere in the world nonstop. >> here is a new york question. did you ever think about moving to miami? with covid, the view the world would change and nobody would go to the office and live where they wanted and new york was a super expensive place to do business? >> no, i felt the opportunity here was too big. i recognized new york went through issues and challenges with covid. a lot of us worked from home or locations. i had employees work all over the coupntry and parts of europ. some did move to florida. we never condtemplated

>> i don't know if you were listening to the story we had before about forcing people at stellantis back to the office. we were talking about amazon bringing people back to the office five days a week. it's complicated for some who moved farther away. >> yes, we actually believe in hybrid work. what we found and we have done studies on this. our top performers, are top irrespective where they work. where there are issues are lower performance. we see a more lower performers that are in the remote category. the onus is on the leadership to really make sure when someone is not performing to the levels expected, they take quick action to remediate the problem or ultimately decide they will not work out. >> as a.i. becomes a major come point of all this, how are you able to do and the data you have

given the database business, relative to some of the other companies that may have some really strong, sort of frontier models, microsoft and the like. you had marc benioff at salesforce saying you don't need the large language models to get to the promise land. you need models that work on your data. >> the way i think about a.i. and i think most people think about it this way is the three layer stack. chip layer, which nvidia has done great and generate 140% of the profits in the industry. there is the model layer. you mentioned openai raised $6.6 billion and separating from the pack with 215 million weekly average users and the application layer. that's the layer we play in. when you think about the modern a.i. apps, you need a platform

and we're perfectly designed to do that. we see a lot of startups building the next generation of a.i. work loads. that's where we're focused and value accrues at the lowest level with nvidia, but over time, value accrues at the higher layer. >> what happens to the middle layer? some people think the middle layer gets comodotized. >> openai is a closed model. you have meta with the models and open source models. i think the world will be a bit of both. it's clear openai seems to be separating and access to capital matters. >> are you the one that believes everyone will use the large language model to query the data

and i think of marc benioff and salesforce and his agents, if you will, it's a different model? >> no question it will work. what we see is the performance of agents inconsinconsistent. i think the key comes down to the the reasoning value of the model. i think the more reasoning value is tied to compute and tied to capital differentiates the models. my sense is access to capital will profoundly impact the performance of the models. my bet is you won't have this many model provides. you may have one or two. one closed and one open. openai is in the driver's seat today. >> you beat on the top and bottom lines for q3, but the stock has not performed in reaction to that. what are the investors telling you? >> um, investors, obviously, we had a hiccup in q1 to guidance down. we recovered in q2.

investors are trying to understand the growth potential at mongodb. we believe we have a massive runway for growth. they are taking a wait and see attitude. >> what do you need do? >> we need consistent results year over year. the stock is now $290. generally, it has done well in the stock, but we have a big issue in front of us and we have to deliver quarter in and quarter out. >> dev, thanks for being here. >> my pleasure. here is one of the reports. bank of leslie picker looks the numbers. >> you have a beat on the top and bottom line for the third quarter. bottom line at 81 cents per share. a four cent beat. net interest income for loan making essentially in line with cons consensus. nii was up 2% quarter over quarter, but down year over year

due to higher deposit costs. the numbers are consistent with the notion that q2 was the trough for b of a. sales and trading revenue which appears to be the highest in over a decade here. asset management fees grew 14% in the quarter. provisions for losses coming in at 1.5 billion dollars with the charge off ratio, bad loans relative to total, decreasing in sequential quarters to .85%. the credit card loss rate down 18 basis points quarter over quarter. that is a positive direction for consumers and credit quality. expenses were up year over year and quarter over quarter. b of a is saying that is due to fee growth. shares are down 9% as the

numbers cross. guys. >> great. all right. good summary, slleie. thanks. bank of america ceo brian moynihan will be on "squawk on the street" at 8:30 a.m. eastern. "squawk box" will be right back. >> announcer: squawk ceo call is brought to you by truist. glp-1 drugs used in weight loss treatments are a global blockbuster, even with disliked and inconvenient injections. study results are arriving monthly from lexarias patented oral delivery technology trials. with gold and copper

prices pushing towards all time highs, us gold corp. offers investors leverage to both gold and copper at its project, and mining friendly wyoming. u.s. gold corp has a reserve of almost 1.5 million ounces of gold equivalents. permits to mine zero debt with only 10.73 million shares

outstanding and a portfolio of world class american strategic metals assets. u.s. gold corp, join the golden age.

♪ when it rains it powers. new news out from boeing again. this is now a second filing that just came out and the stock has now turned negative. phil lebeau has details on that. >> easy to see why it turned

negative. boeing filing a self registration for $25 billion. it doesn't mean they are taking $25 billion and doing a capital raise for that amount, but this is necessary for any type of a capital raise that a company may do, you do a self registration. this is basically them saying, you know what? we now have the flexibility over the next three years to do a variety of capital raises. we could do equity, and we could do debt and you want to do a convertible? that's possible as well. the potential is to borrow or raise capital in the amount of $25 billion. again, this is simply setting the table for what everybody expect to happen at some point, a capital raise of some sort whether it's equity or debt or whatever it might be, or a combination of the two, this is setting the table for that. guys? >> phil lebeau bringing us a lot

of boeing news in the last half hour. look forward to talking to you again soon. and when we come back, the cfo of j&j will join us next.

♪ (alarm sound) ♪ amelia, turn off alarm. amelia, weather. 70 degrees and sunny today. amelia, unlock the door. i'm afraid i can't do that, jen. ♪ (suspenseful music) ♪ why not? did you forget something? ♪ (suspenseful music) ♪ my protein shake. the future isn't scary. not investing in it is. you're so dramatic amelia. bye jen. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com. i can't believe you corporate types are still at it. just stop calling each other rock stars. and using workday to put finance and h.r. on one platform. tim, you are a rock star.

using responsible ai doesn't make you a rock star. it kinda does. you are not rock stars. (clears throat) okay. most of you are not rock stars. oooh. data driven insights, and large language models. oh, that's so rock roll. it is, right. he gets it. yeah. welcome back, everybody. johnson & johnson shares trading on higher than better expected results. joining us is the cfo, joe woke.

let's talk about the performance of the two divisions you have, and it looks like pharmaceuticals in particular performed well, better than expected with operational growth up 6.4%. >> great to be with you. we were pleased with the third quarter, and we want to thank our associates across the third quarter that made that happen. we generated free cash flow that was strong. the pharmaceutical unit had 11 of 13 key products growing at double digits or more, and another record quarter at $13.5 billion. addressing serious issues across the market, and while the quarter was good we are pleased with what we solidified for the

future, getting approvals to address some diseases, and med tech also solidified their future, and we also look forward to our pulse field ablation catheter for treating arrhythmia in the coming, let's say, weeks or months. that unit performed growth as well, and that includes the acquisition of shock wave, a business that we added back in late may to address calcification of vascular disease. and without that, it would have been closer to 4% and that's a little below our expectations, and we had headwinds in the pacific regions as well as a prolonged physician strike in korea, but overall we are pleased. while it's not perfect, it

really speaks to the strength of johnson & johnson that we are able to miss on one part of the business but still raise expectations for financial performance for the balance of this year. >> for your adjusted earnings per share, you are looking at $9.91 for the full year and that's down from $10.05 previously, and there's a 10 cent bump in performance, and that's coming from the pharmaceutical side of things? >> it's a combination of things. we are improving operating margins. we had high leverage on the sjna costs through the year and that's not allowing the cost from the separation to creep into our pnl. we're, i think, really living into deploying the next available dollar towards rnd, and even without that charge, $1.2 billion and that is

classified on the rnd line, and we increased our revenue, and while the quarterly performance is good we are putting our money where our mouth is in that regard. >> barron's comes up with this. the stock is down 1.7% over the last two years versus the s&p being up 7.5% over the same time period. what is the situation with the talc situation? >> becky, we continue to make progress with the talc litigation matter. i will emphasize to your viewers, we want to get this behind us, but we still generate enough cash flow. the bankruptcy court will be hearing the case in houston over the coming weeks and months. this time is a little different than prior filings with respect

to we have 83% of the claimants believe this is the right path to go. if you think about bankruptcy law, its intent in this instance is to maximize a potential for recovery while preserving otherwise viable businesses. there are a few holdouts that come along, and those holdouts, unfortunately, will gain their firms or individually financially, and they are looking into some of the plaintiff's bar tactics, specifically around third party litigation funding. >> we have talked about what you have done with some of the additional proceeds you have seen since the 2017 tax changes that cut corporate taxes and you made the point you reinvested that money, and we have an election coming up in a few

weeks and there are questions about what will happen to corporate taxes. what happens if corporate taxes go up to 28% as kamala harris has recommended, versus staying where they are right now. >> i think 21% is the definition of fair share. it's square in the middle of economically developed countries, and you may argue with state taxes the u.s. rate is a little higher. we have, as i mentioned in the last quarter call, added about 6,000 jobs, and we were able to announce the building of a new supply company, and there's estimates that every job johnson & johnson adds adds four to five jobs additionally that will happen in north carolina. we think this is positive. i also look at what the cbo recently reported.

back in 2017, before the passage of the tax reform act, the corporate tax revenue was about $4.5 billion. what came in in 2024 is $529 billion, so it made by the pie bigger. from my perspective, if you want a strong economy, keeping investment here in the u.s. and adding to it, 21% seems to be the fair rate. we are looking at another facility actually a little more advanced in terms of technology, and if a rate goes to 28% i think it will be difficult to put that facility here in the u.s. >> joe, depending on whoyou are and where you are sitting, there's different claims and the claim is that no corporations really pay the stated rate anyway. there's ways to get around it. so it's really not 21, it's actually less, they don't pay 21. the other one is that if it does go to 28, if you add in state

taxes, i have heard people that want a lower rate say we would be one of the highest in the world. 28 doesn't sound bad. others say 25 is what the business community would have settled for. if you add state in at 28, would we be one of the highest in the world? >> absolutely, joe. anything over 30% would put you in the upper third or quartile. we talk about fair share. i think 21% is the definition of fair share. you could talk about -- go ahead. >> what about 15? we can go -- when we talk about raising rates, i always want to know where do you think it really does take a bite? how about lowering rates? where would it be? it would be nonproductive because it's so low. do you think it's a good idea to make it for domestic producers

only at 15%? isn't that just sort of -- sounds like industrial policy. >> you want to preserve their rights in terms of those that produce domestically. on its face, i would like 15 as the cfo of a multicorporation. maybe incentivizing companies from other countries to locate here. if you think about why one of the main arguments in 2017 about the lowering the rate was to stop inversions. you could think about that in, i would say, a pro businessmaner. >> why not? why not do it? i say go to zero. >> you have to worry about the deficit, joe. when you hear about panels about

how we are spending the tax revenue that i just mentioned earlier, i think that's one of the best ideas that i have heard in the last 20 or 30 years. i think that's really what would enable a 15% rate. i don't think we can go there now simply because of the long-term impact of the deficit where debt services are more constrictive on the federal budget than medicare or national defense. >> maybe we go to 15 and then do andrew's billionaire -- when they take a loan you tax that, maybe unrealized. find it somebody else -- >> everybody thinks we have to find it somewhere else. >> but the point is, there's not enough place to go. >> it's just one piece of the puzzle. you will have to raise more revenue somehow -- >> or you let elon musk shrink

government down to 10% of the size it is now. >> you still have entitlements and debt services and things that will -- >> yeah, we got to fix not just entitlements, and bill clinton did a great job with welfare. it would be better if everybody was working, would it not, joe? if everybody was working, there's a lot of safety net payments that could be stream lined. the dignity of work, and everybody would like to if they could, and nobody wants to sit at home for $62,000 a year doing nothing. >> we have added jobs since 2017 based on the tax rate where it stands today. >> i don't think it's a welfare state problem at the moment. >> i will send you an article. >> okay. >> you saw the one that phil graham wrote.

>> joe? >> yes, becky. >> we appreciate you for being here. >> he's not woke so we can ask him these things -- wait, you are wolk. i am andrew ross sorkin along with joe kernen and becky quick. we have a lot to talk about including this, walgreens boots jumping up 39 cents a share, and it's on revenue of $37.55 billion, and that also topped expectations forthe full year. walgreens has seen the revenue in the range of up to $51 billion. walgreens announcing plans to close 1,200 stores over the next three years with five of the

cl closers. we will be talking about where we are going to be getting drugs from, and even going to the corner to get milk, anything, and it's disappearing. >> well, it was from last month. remember, we just had the chairman of the budget committee on last week, an article by him and phil graham, and welfare is what is eating the budget. means tested programs, not medicare and social security are behind today's massive debt. >> let's take a look at it. >> i sent it to you. >> i am all for reducing -- >> the numbers are staggering. the argument is we could fix medicare and social security if you did it -- medicare might be

tough, but social security, we know what to do. it will be people three decades from now will have to be 70 before -- >> we can talk that. and -- >> they are talking about the other stuff. >> we have talked about this, too, and obviously you don't want people that don't need to be on the programs on them and at the same time you don't want to throw people off that have disabilities. >> the bottom quinn tile -- >> hopefully the government would be -- just in general, i would like to see what elon musk would come up with for that, but he's, you know, like i said, suddenly he's the antichrist to half the country. bizarre. you saw that -- i don't think

biden said one word about capturing that booster as it landed. not a word about, wow, that was kind of cool. >> that was great. >> can't, because of the union issues and the ev stuff. >> i think now it has become such a terrible situation -- >> in terms of politically -- >> politically, you have elon musk out there -- >> jumping up and down. >> -- supporting trump, and i have a alternate reality of the universe, and my alternate reality is had biden embraced elon musk early on, in the very beginning, i think that things could have been very different. >> you always got an excuse for why somebody does something, and it couldn't because they think trump could be better but it's some ulterior motive.

>> no, my alternative reality with elon is had he embraced him early on, and -- ♪ o see this. i've seen it. trust me, after 15 walks, it gets a little old. ugh. stop waiting. start investing. e*trade ® from morgan stanley. (vo) time to move? make it easy with opendoor. sell your home in any season, for any reason. [vampire hiss] (vo) start your move at opendoor.com.

pete g. writes, "my tween wants a new phone. how do i not break the bank?" we gotcha, pete. xfinity mobile was designed to save you money and gives you access to wifi speeds up to a gig. so you get high speeds for low prices. better than getting low speeds for high prices. right, bruce? -jealous? yeah, look at that. -honestly. someone get a helmet on this guy. xfinity internet customers, ask how to get an unlimited line free for a year. plus, a free samsung galaxy s24 fe.

welcome back to "squawk box." i am dom chu with your earning headlines. united health is lower after the

earnings guidance was lowered because of the cyberattack, and revenues came in above analysts expectations, and op tupl health tech services. bank of america higher after its third quarter results. the banks posted earnings and revenue that came in on a better than expected trading revenue, from stock trading, 18% gains there year over year, and banking fees rose by 18% as well, and some of the headlines around b of a. and then boeing, the plane maker said it would add a credit agreement with a consortium of banks, and also saying the company filed a registration statement with market regulators for securities and stock sales

up to $25 billion at some point in the future, so now boeing shares now up two-thirds of a percent. >> thank you, dom. curious of what your big takeaway is so far and what are you doing about it? >> bank earnings are coming in better than expected, both top and bottom line, and interest income is better than expected and that's a good signal for the economy. another good thing showing 1 our call for the no landing is playing out, and that's why you see the stock prices responding to that. >> so there is no landing, and the plane is not even coming close to the ground? >> doesn't look like there's a landing right now. looking close to a 3% quarter for the third quarter which is essentially two quarters in a row of 3%, and that's no

landing, right? the goal was to get it above 2.5% -- >> i have been told the economy is horrific, so this is surprising news, and i say that somewhat sarcastically? >> yeah, consumer net worth is up $50 trillion in four years since the beginning of covid. >> say that again. >> $50 trillion, with a "t," which represents a 45% growth where we were before covid. that's financial assets. >> but that's only 44% of americans? >> that's what i am saying. if you own financial assets, whether it's housing or stocks, bonds, you know, other financial assets, you are doing great. you increased your net worth and your net interests costs are actually as a percentage of your income the same as they were despite the rate hiking cycle, so the spread is higher and you

feel richer and the percentage of what you are saying to service your debt is the same unlike the government, by the way. but if you don't own financial assets, it's not the same economy and you are struggling. >> s&p 500, where is it at christmas and where is it next christmas? >> christmas we see it at 5900 to the ends of the year. it definitely exceeded our estimates -- >> well, we are sort of there. we're there. >> we're there. >> does that mean we should just go on vacation at this point, stop, sell everything and take a holiday? >> when the fed cuts into a soft landing or no landing, which is what we think is happening, if you look back at six previous examples of this on average, the s&p is up 16% in the 12 months, and believe it or not, 44% in the 24 months after the fed starts the kutding cycle. >> so you think we have more to go? >> it's never a straight line.

inflation is never a straight line on the way down and the market is never straight up. the fed cuts into a soft landing and the market can do quite well. >> one final question. the market or the s&p, as we described, is so concentrated today relative to maybe those examples in history, so the question is when you are investing, and you say the market, are we investing in the market at large or what are we doing? >> the u.s. market is a tech index. >> that's different than what it may have been when people look back in history and say six times before it was something else? >> yes, but there was always concentration and there are always large stocks that drove the market. the reason these stocks continue to stay where they are because the earnings and margins are so much higher than any other company in the market that is driving the whole thing, so the margins of the s&p are higher and the cash flow is higher.

if you go back over 20, 30 years, it's up to the right in terms of cash flow margins and margins on the s&p, and you can get a higher multiple out of it and that's what we think and that's why we raised the price target to the ends of the year. ? >> before any guests come on the broadcast, there are notes, and these notes say i am ready for joe. i don't know who wrote those notes. >> last time i did not tell you what my new s&p target was because i had to tell the clients. >> okay. see. >> i don't know if joe was ready for you this te.im that's the real issue. >> so what is it? >> 5900. >> that's what you said last time? >> no, it was 5700 -- >> no, what you are leaving and you whispered to me --

welcome back, everybody. google says it will buy power from energy company, kye roes powers. pippa steufens joins us now on how big tech is breathing new life into the sector. >> even just a year ago nobody was talking about these partnerships between big tech

and nuclear but it makes sense that for hyper scalers need a whole lot of power and nuclear is currently the only source of emissions free base loaded power. the industry has traditionally suffered from hefty costs, and google's deal there is just the latest example, and we had microsoft teaming up with constellation energy to bring the island back online, and prominent tech players are also backing nuclear, both bill gates and sam altman, and a lot of optimism is based on smrs.

those are small moduler reactors. they are only about 300 megawatts compared to the over 1 gigawatt of what commercial carriers have. >> i guess the question still remains, is there going to be enough power to keep up with demand? you know, what we have from a consumer and commercial base, add to it this ai factor, and there are skeptics saying it will take longer to bring this stuff online. what is the answer? >> data centers are the latest example of growing data demand and utilities plan decades in advance and for a long time load growth is steady and now for the first time in two decades it's growing meaningfully, and that's hard to keep up with. things like the interconnection

cue, and the backlog is more than five years. it takes a long time to get the projects off the ground so the administration is trying to address that, and to your point there are a lot of people out there that say we will have too much demand and not enough supply and that means power prices are going up for consumers. >> thank you. goldman sachs with its results. let's get to leslie picker. >> goldman coming in at 870 a share. the firm posted $12.7 billion for q3. goldman's banking and marketing division up, and that is thanks to debt underwriting and secondary offerings. the bankings backlog did

increase overall as well. equities were up 18%. asset and wealth management net revenue was $3.75 billion in the third quarter, 16% higher than last year and 3% lower than last quarter. goldman generating equity, and one thing to note, there was a 62-cent hit including because of the transitioning of gm card. this morning an agreement announced to be the exclusive owner of the card in terms of the arrangement were not disclosed. a big beat for goldman sending shares up more than 2%, guys. >> good job. thanks, leslie.

i like this system. "squawk box" will be right back. keep us going. the places we cheer. trust. hang out. and check in. they all choose the advanced network solutions and round the clock partnership from comcast business. powering more businesses than anyone. powering possibilities. your record label is taking off. but so is your sound engineer. you need to hire. i need indeed. indeed you do. our advanced matching helps find talented candidates, so you can connect with them fast. visit indeed.com/hire

- it's something about having that piece of paper. some people think that's worth more than my skills. - i've run this place for 20 years, but i still need to prove that i'm more than what you see on paper. - you gotta be so good they can't ignore you. - it's the way my mind works. i have a very mechanical brain. - analytics and empathy. that's how i gain clients. - i am more... - i'm more... ...than who i am on paper. ♪

still to come here on "squawk box," the ceo of waste disposal and recycling company, republic services weighing in on the economy, consumer demand and ai in the workforce. tus is meantime, take a look at fureth morning. the dow up about 45 points, and we're coming back with so much more as "squawk box" rolls on this morning.

at betmgm, everyone gets a welcome offer. so whether you're courtside trying to hit the over... or up here trying to hit the under. whew! or, hitting that win with your crew. ohhh! yes, see defense! or way up here with a same game parlay. yaw! betmgm's got your back. get your welcome offer. and play with the sportsbook born in vegas. all these seats. really? get up to a $1500 new customer offer in bonus bets when you sign up now. betmgm. download and bet today.

welcome back, everybody. joining us now from everything on the state of the consumer to the use of ai and waste management is the ceo of republic services. john, we wanted to welcome you and thank you for coming in today. >> thank you for having me. >> when you look at waste management it's a good idea of how the economy is going. talk about what you see in terms of demand both from the commercial and consumer side of things right now? >> yeah, thank you for having me. we are having a great year this year. the external picture is mixed. the consumer is strong. i would state challenges are more on the construction side both single family and

commercial construction has been down. the manufacturing has been a mixed picture as well for us. the demand side has been relatively mixed and we are in a flattish year. inflation is coming down, and the prices are coming down and that's heading to a strong year financially. >> let's break things down. you have a broad footprint. >> we are in 47 states and construction is challenged in lots of markets and we need more single family homes across the country, so while it has been slow today as you see the rate cuts come down, i am optimistic we will see a rate cut in four to six months or nine months, there will be more homes and that's good for demand.

small business has been very strong. we are seeing people return to office and return to businesses and that really has not been a factor for us. >> in terms of what you mentioned with pricing power. i know you spoke last month and talked a little bit how you have a customer base that is really resilient and doesn't leave when you raise prices. how does that work? you have had to do it to deal with higher costs? >> yeah, we have a strong loyalty, and for most of the customers, the environmental services cost is a small part of the cost structure whether it's a household or business, and we are reliable and get it done and we can give our people a raise and invest in the business. >> you have a big fleet of

electric vehicles coming online, too. how big is that and where is the progress right now? where do things stand? >> we are going to be a leader in electrification. we have 17,000 vehicles, and we started slow, replacing 7 to 8% of the vehicles every year, and we have 25 vehicles running around today and 50 by the end of the year and a couple hundred next year and will build from there up to by the end of the decade, half of the purchases will be electric vehicles. >> are they more expensive? how does it work out over time? >> yeah, there's a trade off. they are about double the price of a diesel vehicle, and you get the operating savings over time. when you layer the incentives out there today we shorten the payback period. we are excited about it. >> it's not something we would do without the government saying we are going to subsidize this -- >> the case works without incentives, but the incentives

helps us work faster with that. >> we talk about ai in the waste management business. everybody says they are ai now. how are you using it? >> we are using it across the business in lots of different ways. we are using it when we tip a recycling container, actually. we use ai to scan and see if it's contaminated or not. we use ai when we answer the phone to help our customer service agents listen to those calls. we use ai to look at the special waste manifest and look at all the data to make sure we are not taking something hazardous into the landfills. i think ai is very oversold in terms of its current impact on business. i think it will be transformational over time. everybody is talking about it in terms of make it work and you have to get it all to work together. >> that's interesting. you use ai to scan what is

coming in, and can you scan it to see if it's allowed? >> yeah, absolutely. we charge for that. >> interesting. thanks for coming in today. >> thanks for having me. >> we appreciate it. and coming up, we're going to talk about the growing tensions in the middle east this morning and a company in crisis and the white house taking a larger role in getting boeing workers back to work. we will touch on that after the break. bank of america and goldman sachs out with their earnings. up next, we will hear from citigroup. results expected to hit at the top of the hour. don't go anywhere. "squawk box" coming right back after this. because when you're in a mercedes,

you'd expect nothing less. mercedes-benz suvs, featuring the all new glc plug-in hybrid with a best-in-class epa estimated electric range of 54 miles. visit mbusa.com for special offers on select suvs. 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.

♪

welcome back to "squawk box." i want to get a check on energy companies this morning. shares of occidental, diamondback energy and bp falling after israel assured the u.s. any retaliatory attack on iran wouldn't target nuclear facilities. that's coming from a report from the "washington post" over the weekend and over the last 24 hours, and our next guest thinks israel should focus on destroying the nuclear facilities and it would be good for the u.s. we have a report on one end, we have bibi netanyahu on one end saying maybe effectively saying we will do whatever we want. what about you? what do you think should happen and what will happen? >> we are trying to triangulate between three different things here. first of all, it's clear israel

has to retaliate. they can't afford to enshrine the current status quo. they have fought a shadow war or cold war for the last two decades and this is the targeting of proxies and individuals, but up until this year there's never been a direct country-on-country violence. we have seen iran fire ballistic missiles for the second time and israel cannot afford for this status quo to be enshrined where they attack territory without fearing retaliation. that's coming. determining what shape that comes in is the operative one. it's clear that the united states is for all the right reasons very concerned about the potential for escalation and the

potential for a wider war and there's also the nagging question of the iranian nuclear program. this is something that has b concerned the u.s., and maybe they don't destroy the nuclear program but maybe to set it back because the real danger for israel and the united states is this regime getting this capability at this time. >> here's the question. if you try and destroy any part of this, and some of it is above ground and a lot of it is below ground, a, is how successful you think such an effort would be? and b, what kind of retaliation then iran takes? >> right. so those are two, i think, very important questions. on the first front i think it's a little bit of a straw man to say the nuclear program is so

complex and districted, israel can get at the whole thing, and that's not the job, and israel is the only country in the world to denuclearized in the past. they were not getting rid of the whole program but just demolishing enough infrastructure to set the program back. it's not a wholesale sweep. >> let's say they go and do this and they are successful. if you are the leadership in iran, what kind of retaliatory efforts do you, therefore, take against israel and against potentially allies? one of the things we are hearing is iran is calling the leaders of other countries in the middle east including the saudis and others saying you let these

folks use your airspace in any way, we are coming after you, too? >> i think that's what the iranians should do in terms of trying to deter israeli freedom of action, right? that's something they want to do. and what is clear the iranian nuclear program is a threat not just to israel but also a threat to the countries of the region, so i think what we are likely to see if the israelis do move is a lot of public condemnation like they got in the 1980s when they moved towards the iraqi nuclear program, and a lot of congratulations just like they got back then. >> to speak for just a moment, and, look, everything is a trade off in line and everything is a risk, right? we are all just playing trade offs here and going back and forth on the risks. what is the risk there's a meaningful retaliatory effort against israel or somewhere elsewhere lots and lots of

people get killed? >> no, no, no, that's absolutely a real risk. there's no margin in minimalizing this, but the reality exists, the reality of the iranian nuclear program exists, and the problem is the fact that the iranian nuclear program and the very, very likely possibility that this regime is trying to acquire offensive nuclear capability and this is not a good actor, it exists -- >> if they do this, do you think they do this before or after the u.s. election? do you think that should play or will play any role in this? >> i think it will for sure, but i don't think it should. for a very simple reason. every president of both parties since the iranian nuclear program broke out in the open in

2003 said iran should not and will not go nuclear and i think that priority still remains, and the question is what are we and our allies prepared to do about it. that's something the next president, whoever it is, will have to confront when they come into office and what israel is doing in that context as well. >> we heard because israel is going to retaliate, iran knows they have to move and they were right on the cusp anyway, and they could do it in a matter of weeks if they had to. did they? and if that is true, if there's a fixed amount of time that israel has tohappening, aren't we there already? we're already there. do we know? >> i think so. yeah, yeah, yeah. no, i think that's absolutely right. and in fact, what we've seen over the last year, has actually, i think, reinforced for iranian officials that they have to move. and they have to move quickly, irrespective of what israel

does. in the last year, since the horrific campaign of terror carried out by hamas on october 7th, the iranians have figured out that they've tried to change the game in the region, but they haven't been able to do it in conventional terms. the u.s. military is back in the greatest forestrength since the gulf war and they need some kind of game changer. that's why more and more israeli officials are convinced that iran is about to break out and sprint for the bomb. that's the context they're operating under. >> >>lon, we appreciate your perspective on all of this. it is a great debate and we'll be watching to see what happens next. thank you. >> thanks so much. all right. coming up, citigroup results. plus, a company in csis rias the white house looks to take a larger role in getting boeing's union staffers back to work. we will touch on that right after the break. "squawk box" will be right back. b

ah, these bills are crazy. she has no idea she's sitting on a goldmine. well she doesn't know that if she owns a life insurance policy of $100,000 or more she can sell all or part of it to coventry for cash. even a term policy. even a term policy? even a term

policy! find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com.

here's a shares of boeing, that are actually up 1% this morning. the company said it's going to add a short-term credit agreement worth $10 billion, with a consortium of banks, include bank of america, goldman sa sachs, jpmorgan, and citigroup. meanwhile, the company also filed a registration statement

with the u.s. markets regulator for securities and stocks sale of up to $25 billion. meanwhile, boeing ceo kelly orrtberg facing a challenge just a month after 30,000 machinists walked off the job. our next guest says ortberg has a unique chance to repair the damage. joining us now, a professor of management practice at the yale school of management. and explain, how is this -- it sounds good, i love silver linings, but how is this a possible positive for the company and the ceo, professor? >> so, when he came in, he had a chance to do that. and we've got to think back in the context of what boeing labor relations are like. for more than a generation, boeing's unions have been screaming that management was destroying the company. and at this point, basically everyone looks at boeing and says, well, the unions were right. the central critique they made

that management had focused on short-term profits and destroyed boeing's engineering excellence, you know, i don't know anyone who denies that anymore. that is just true. but over the span of a generation, whatever trust that might have existed between managers and the workforce of boeing, has just been devastated. i want to sort of emphasize, jim mcneary, the ceo of boeing, a couple of ceos ago, actually said, when he was asked if he was going to retire at 65, he said, why would i still do that? the heart is still beating and the employees are still cowering. that was the attitude that the boeing management had. when kelly ortberg came in from outside, a trained engineer, someone who had a history of working well with labor, he had a chance to reset that and say, look, i understand that my predecessors were doing these things and i'm not going to do it anymore. i'm a little surprised that he hasn't done more to seize it. >> how do you see the negotiations playing out? and we are in an interesting point in terms of labor, in the

united states, given what we've seen and what we're seeing in terms of that it really is a, what do you call it? there is a buyer's and seller's market, but it's a workers and emp market, and you can ask for things. >> it is a workers' market, and these sort of skilled machinists that are the key to boeing, they've already lost a lot of experience and their best workers, that is one of the reasons for these pervasive quality problems. they can't offered to lose too many more. and the problem is that touch labor, the people that have their hands on and putting the plane together, only account for about 5% of the total cost of an aircraft. there's a lot of room to play to increase that. but what i would suggest is, this isn't just about money, right? so ortberg started in exactly the right way. he declared he was going to work out of seattle, because boeing's job was building airplanes, and

he needed to be there to do it right. but since then, you've seen things like boeing going directly to the workers, instead of working with union negotiators, then withdrawaling their final offer, cutting off health care for workers. what i would say is, if i were boeing, what i would do is instead of trying to play hardball, the strategy they done for a generation and that has nearly destroyed the company, i would sort of reach out to the union and say, we need a relationship of mutual respect. and maybe that's about more than money. maybe that's about doing things like, offering the workers some levels of a say in how the company is managed for the next few years. because, i mean, they couldn't possibly do worse than the last few ceos of boeing. >> where do you think the weaknesses were that led to some of the quality issues? and what would you do if you were kelly ortberg? what are the most important positions under him to get right? >> so, he needs to make sure -- i mean, he is an engineer. he needs to make sure that his

head of boeing commercial is an engineer, or at least someone who respects engineers, who understands them. he needs to get down on the -- he needs to get down on the shop floor, walk around, and talk with these people and say, why are you doing -- why are these mistakes happening, in the most concrete way? and he needs to change the culture of boeing. what we've seen over and over and over again is that the workers who are trying to do their job well, who blow the whistle, who say, look, we have a safety problem, get punished, get harassed, get fired, get moved out, get demoted, treated in every possible way, badly. that is how you make sure that nothing of high quality is ever built. so changing that culture is going to require some pretty profound reforms. and it's not going to be a one-year process. >> yeah, i hear what you're saying. is it too late based on the early moves the company has made under the new ceo, or is there still the ability to turn that around? especially when we hear that the

big sticking point is the return of a pension. >> yeah, i don't think it's too late, at least in part, because officially or unofficially, boeing has a backstop. it is just too important to american manufacturing for the u.s. government to allow it to fail. there will be interventions that make sure that this company keeps going forward, because it is just inconceivable. if there's one thing that democrats and republicans agree on, it's that the u.s. should be a leading manufacturing company. and the u.s. -- the u.s. should be a leading manufacturing country. and the u.s. is not going to be a leading manufacturing country without boeing. it is not dping to happen. but what i would say, he needs to get involved with the labor negotiations, because boeing's current negotiators seem to be acting the way boeing's negotiators have acted for the last few decades, and that's not working. he needs to say, we're going to do this differently. this is a ceo level intervention that he needs to make. >> i was a little confused to see you up there in cambridge. are you -- did they beg you to

come up there to show them how it's done, from yale? is that how -- is that what -- what's that -- are they nice? are they nice or are they pointing at you and -- there's that yale guy? >> they were very nice. i was at harvard for much longer that i would like to admit. i still teach at the kennedy school, so they let me do this. >> all right. people aren't like whispering, there's that guy from harvard, thinks he's -- or from yale. all right, i looked up when the game is, it's in november. you're not up for the big game, the harvard/yale game. it's coming up november 20-something. >> no, well, i do have to promise i'll keep rooting for harvard. but on the other hand, the only time in my entire life i wear harvard gear is when i'm at yale. it all works out. >> all right. i hope that bothers sonnenfeld. all right, thank you. see you later, professor. >> thank you. citigroup is out with its third quarter results. leslie picker joins us with those numbers. hey, leslie. >> hey, becky.

shares reacting positively to these numbers. citi beating on the top and bottom lines and all five businesses increasing revenue year over year in the third quarter. the bottom line beating by 20 cents a share at 151 per share. the top line showing surprise gains of 1% to $20.3 billion. and actually excluding last year's divestiture gains, revenue would have grown 3% in q3. net income declining 9%, thanks to a higher cost of credit, which came in at $2.7 billion in the quarter. citi reported higher card net losses and an allowance build in the quarter. this appears to be mostly driven by the lower fico ban. banking revenue, which comprises deal making and corporate lending was up 16%, driven by a sizable jump in investment banking fees. 44% higher for those to $999 million. market also saw a surprise gain, helped likely by the last few weeks in september, based on the guidance that we were given in mid-september.

so fixed income currencies and commodities were lower, but equities saw a 32% jump. wells saw gains of 9% to $2 billion, while u.s. personal banking increasing 2% to $5 billion. some of the gains in wealth from retail customer who is became more affluent and graduated to the citi gold tier. services revenue gaining 8%, even as market rates decline during the quarter. in the release, ceo james frazier saying the firm's recent simplification and restructuring drove a 2% reduction in expenses. shares coming off their highs of the pre-market trading, now up about 0.5%. guys? >> okay. leslie, thank you. meantime, joining us right now to talk about citi and the other big bank results from this morning, bank of america and goldman sachs. devon ryan is here, citizens jmp senior research analyst. look at these three. tell me what your biggest headline is and which one you actually like and you don't

like? >> i think the biggest headline is results are getting better. people are beating on capital markets, trading, investment banking. and we think we're on the front end of that recovery. so 2025 is going to be a lot better than 2024. that gets to kind of the other question, what do we like? we still like firms that are levered to capital markets, goldman sachs would be kind of the top one there. and then, another firm that we didn't hit yet is schwab, that also just reported. that's another one, they're having a big pre-market move here and that's one that a bank that we think has pretty significant upside. >> bank of america? >> yeah, i think the results are good. so more in line. and i think the net interest story is going to be complicated. rates coming down isn't typically viewed as a good thing or a great thing for banks. i actually think that as we get into 2025, what you'll start to see is rates coming down, you'll see deposit costs come down a lot. banks are managing deposits. there's been a lot of cash sorting. money going into money market funds. we're starting to see that slow

down. and deposits will stoart to gro again. next year, there'll be a lot of loan growth. we haven't seep a lot of loan growth this year. next year on the other side of the election and with rates coming down, that will be bullish as well for loan growth. i think the traditional banks will be a better 2025 as well. >> okay, so, what do you think of citi? i mean, citi's been a challenged, challenged bank for a while now. >> yeah. i mean, there's a lot of complexity and a lot going on. i do think that they are getting their house in order on expenses. and the restructuring they're doing, it's early days, but i think they're doing a nice job. the big stories here are what are firms going to be able to do on the capital markets side? they've got a pretty big capital markets business. all the big banks, including citi group, are well positioned, in my opinion. >> who wouldn't you touch right now? >> i think the places that are -- where we see the most risk are in the kind of lower end of the consumer. so, you saw with citi, a little bit of the fico, and we're

seeing that play out across consumer finance. so i think you need to watch out there. and commercial real estate is still going to be a head wind. most banks have taken pretty big provisions for that, but i think on the -- >> are we out of the woods on commercial real estate? >> we're not out of the woods, in terms of, there's going to be more losses. i think that most banks have gotten pretty far ahead of the problem, so, i don't think there's going to be a big shoe dropping, but i think that you're going to see a lot more small nicks from that. i would look at big, diversitied firms with capital markets trading, and firms that can manage through lower interest rates, which means firms that can grow deposits, and like i said on the loan side, we actually think 2025 will be a better loan growth year. >> devon, thanks for coming in this morning. >> great to see you. >> thank you. meantime, we have a programming note. don't miss this on cnbc. a first interview, 10:30 eastern time, bank of america's chairman and ceo, brian moynihan is going to join the gang. among our other top stories

this morning, johnson and johnson beating analyst expectations on both the top and the bottom lines for the third quarter. that stock right now, down by about 1.2%. the company did also raise its 2024 profit and sales forecast. j&j's strong performance in the third quarter was driven by pharmaceuticals. med tech was up by 6.4%, but that includes j&j's acquisition of medical device maker, shock wave. without that acquisition, the metho med tech results would have been below expectations. here's what ceo jay wolk had to say about that earlier in the show. >> overall, we're very pleased. while we're not perfect, it really speaks to the strength of johnson & johnson, that we're able to miss on one part of the business, but still raise expectations for financial performance, for the balance of this year. >> year-to-date, johnson & johnson shares are up just 2%. that does trail the dow's 14% gain. a lot of thatis because of talc and the issues there. walgreens announcing plans

to close 1,200 stores over the next three years, include 500 in fiscal '25. the company said the cost-cutting move would be immediately accretive to adjusted earnings and free cash flow. walgreens currently has about 8,700 locations in the u.s.. it says a quarter of the stores are unprofitable. now, the news came as the company reported fiscal fourth quarter sales and adjusted profit that did beat wall street estimates. there are some that are pretty close to each other. >> yeah, i was thinking about the two when i go to. >> i don't like when things you're used to -- >> yeah. coming up, 21 days, three weeks until election, because it's a tuesday. the candidates making their economic pitches to voters after a break. we'll be joined by charl phillips, co-chair of the black economic alliance. stay tuned, you're watching "squawk box" on cnbc.

♪ ♪ ♪ ♪ this one is for you.

it's odd how in an instant things can transform. slipping out of balance into freefall. (the stock market is now down 23%). this is happening people. where there are so few certainties... (laughing) look around you. you deserve to know. as we navigate a future unknown. i'm glad i found stability amidst it all. gold. standing the test of time.

vice president kamala harris announcing a plan to give black men more economic opportunities. these include forgivable business loans for entrepreneurs, creating more apprenticeships, and studying diseases that disproportionately affect black men. there have been fears among harris supporters that some in the black male population could choose to sit out next month's election. joining us right now to talk about all of this is charles phillips. he is co-founder and managing partner of recognize. he's the co-chair of the black economic alliance and a board member at american express, paramount global, and compass. and charles, thanks for coming in today. >> glad to be here. >> let's talk a little bit, first of all, about why you are a supporter, why you're coming on today. >> well, i've known her since 2003, when i lived in the barbay area. when we started the black economic alliance, there were two senators who joined us, one was cory booker, the other was kamala harris in 2017. she's been working on these issues about the black economy for a long time. and to me, she has receipts on

this. i think she has some good ideas. she surrounds herself with smart people. a lot of ideas come, some are good, some are bad, and he's good at deciphering which ones to go with. >> there has been criticism of this plan that's just being rolled out three weeks before the election that this is because her poll numbers are down with black men. >> she only had a few weeks to jump into the campaign and get policy together. she didn't know she was going to be run. and there are a lot of different constituencies in the democratic party. everyone wants something custom for them. she had a lot to do in a short period of time. there's a lot to do in the black community, especially with black men, she's addressing it. and we polled them and asked, who would you listen to, 35% said, other black business leaders, only 5% said celebrities. we said, we'll tell you what we think, but if you want to hear from black business leaders, let's help. >> so what do you think? >> i think she has some good ideas. no one's addressed housing in a long time. that's a big issue in the black community. only 40% of the people own

homes. she wants to build 3 million homes in the first term in office. i think she has some great ideas, and if people hear her talk about them, she can earn their vote. now the good thing is, everybody that's focused on and wants to hear from black men, that's a good thing. >> it's interesting, charles. there's an interesting piece in the journal, kind of a bizarre piece. >> i've read that. >> i only want to focus on the pot part. i don't want to touch that with a 10-foot pole. but "the journal" throws a compliment that it is -- that providing capital to minorities is a great idea, because it's not just -- it's not just redistribution, it's starting businesses. but it points out that there would be forgivable government loans, which are basically grants, because they'll probably be forgiven. "the journal" wonders whether it's constitution noal to do th just for a minority. would that pass muster, do you think? >> likely not. most of the ideas she has will

help everybody, the entire economy. my guess is that will be loans for small businesses, period. so to make sure there's no discriminatory behavior and it's accessible, it's great. everybody benefits. >> let me ask one other thing. these are all interesting things to point out. in our intro, we said maybe the harris campaign is worried that black men stay home. that's one thing. i think some black men are voting for donald trump. more than in some past election. and the journal ends with, it's good news that miss harris and democrats are being forced to compete for black voters, who look fondly at trump's first term economy. so i don't think it's just like we said in the intro, that they're not going to show up for her. he has made strides, according to some, that remember fondly, his first presidency, in terms of the economy. >> we've done a lot of focus groups on this and asked what they remember. what they remember is the stimulus checks with their name

on them. >> that's the same old, same old. >> it was smart for him to put his name on the checks. that was a one-time deal related to covid. >> dwryou don't think it was organic wage gains that was better under trump under -- >> there were wage gains also under biden as well. >> not back to even yet. real wages. >> wages are growing faster than prices right now. >> fooim. >> finally. >> that's happening. >> and so, the covid distorted the biden record and the trump record as well. some good, some bad. >> this is from "the new york times" from david lionhart. the democratic party has spent years hoping that demography would equal destiny. as the country becomes more racially diverse, democrats imagined that they would become the majority party thanks to asian, black, and his ppanic voters. this would start to resemble the liberal politics of california. it is not working out that way. what do you -- and part of what

he goes on to say is it's not working out that way because it's actually not about race, it's about economic class. and that actually the working class and the lower rungs are actually moving more towards republicans than towards democrats. and that it's actually not a racial issue or diversity issue at all. but it's as, as we described, here we are on a business show, about economics. what do you just make of that analysis? >> we poll this issue by far, the one, two, three and issues in the black community, it's all economic. it's inflation, it's economy, it's jobs, it's housing. and the issues they've identified are correct. the fact that we have to earn the vote for black people, that's a good thing. that's what we've been saying all along. tell us what we're going to do for us. >> but what's so interesting about that is the distinction between the idea that republicans are for the blue collar worker and that democrats are for the white collar worker,

right? that's become the new -- i don't know if it's new, maybe it's old. >> we try to put that in context. part of the reason they think that is because of those checks they've received before, and inflation, we blame that on biden. that started with those checks under trump, and continued and have accelerated under biden. both are responsible for it. but you have to do that. when you're crash landing the plane, as tim geithner used to say, you don't skimp on the runway. we don't know where the economy was going to go. so probably there was too much stimulus, but you would rather have that then a recession. >> charles, business leaders in particular, it's been probably a little harder this time around to see business leaders who would speak out. part of that may be because kamala harris came in so late to the game. but part of it is probably a reflection of things that business leaders will tell you that they feel uncomfortable with, talking about price gouging, thinking that grocery stores are gouging people and that's why we have these inflationary prices. higher corporate taxes, granted, 28% is lower than what president biden was proposing in his

campaign. things like bashing the wealthy. those are the things that i've ha heard back from corporate leaders that make them a little uncomfortable with it. how do you explain to them that you think this is the right choice anyway? >> she's listening to that, myself, mark cuban. arielle levy, we talk all the time, we have some white papers on these topics and say, this is what we hear from the business community. i'm pushing her in that direction. i think there's a long record of hearing different things and making great decisions. she's cognizant of these issues. >> charles, later, we were talking and i sent you the article on one, phil gramm and jody arrington's take on some of the ways to get government spending under control. and when you say welfare, it's almost racially tinged. and people immediately say that it's -- so i just looked it up. you say, 43% white welfare recipients. 23% hispanic, 26% black. which begs the question. what about the 46% of the

welfare recipients that aren't eligible for the $20,000 grant? it's a weird -- >> we have a lot of distortions in the way we allocate federal funds. you could call the tax code stimulus, the attacked that companies only pay 9% effective tax rate. use specific industries, get specific subsidies. that's a government subsidy as well. >> right, right, i understand how -- things need to be done, because it's not working fast enough. >> we were talking about welfare before, and trying to reduce welfare, but the truth is, you can go and look, employees, big percentages of employees who work for walmart, big percentages of employees who work for mcdonald's, you can go through the list. and there's been studies on this -- are employees who are getting welfare. that means that the taxpayer is effectively subsidizing those companies. so when we then have a conversation about what the corporate tax rate is supposed to be, or what the individual tax rate is supposed to be, at

some point, you have to start to incorporate these issues and say to yourself, the taxpayer is subsidizing these companies, and therefore, should the companies be paying -- either the companies should be paying a higher salary, which we would all like, to these employees, or you have to think about it a little differently. i only raise that, because i think we're all talking about these very complicated topics. >> she has a great idea, you guys, on highlighting stock ownership programs. which is probably a third of the employees could potentially own stock in the companies that they work for. but the tax code doesn't incent that. kkr has done great job doing this. i'm sure you've seen him on "60 minutes" and other shows, share that with more employees owning stock ownership. and she has that in her plan. >> well, you should talk her into coming on. and you said you've -- >> are you going to be nice to her? >> well, trump canceled, and he was going to come on, so -- and i said, when you come on, we'll be able to say, you came -- i

can talk to him personally, i've said, we've offered the vice president is she's not, but he k canceled, so now we could say, you came on, but trump didn't. >> and becky asks the question. >> i think you might like andrew posing those questions. he's got some good ones. >> how do you do it? >> charles, thank you very much for coming in. >> thanks a lot. >> appreciate it. >> when we come back, a lot more right here on "squawk box." we'll talk to hedge fund manager kyle bass. he'll join us to talk about a slate of developments taking place in china and whether that tepper trade is still working. but next, ge shares are flying. it's been a long road back for the stock. enn now trading at levels not se idecades. we're going to get into what is powering the surge when "squawk box" comes right back. ♪ i take once-daily jardiance ♪ ♪ at each day's staaart ♪ ♪ as time went on, it was easy to seeee ♪ ♪ i'm lowering my a1c ♪

jardiance works 24/7 in your body to flush out some sugar. and for adults with type two diabetes and known heart disease, jardiance can lower the risk of cardiovascular death, too. serious side effects may include ketoacidosis that may be fatal, dehydration that can lead to sudden worsening of kidney function, and genital, yeast, or urinary tract infections. a rare, life threatening bacterial infection in the skin of the perineum could occur. stop jardiance and call your doctor right away. if you have symptoms of this infection, ketoacidosis, or an allergic reaction. you may have an increased risk for lower limb loss. call your doctor right away if you have symptoms of infection in your legs or feet. taking jardiance with a sulfonylurea or insulin may cause low blood sugar. ♪ jardiance is really swell ♪ ♪ the little pill with a big story to tell ♪

it's been more than two decades since general electric was trading at levels we're currently seeing. phil lebeau has more. i looked up the market cap. i didn't know how to add it all together, because there's been spin-offs, but there's been an incredible run. if you add everything up, it doesn't get to $600 billion, where it was, if you remember, phil. but it does get back to at least where, you know, it's not a 10th of where well chatt ted anymore. i think it might have been there at one point. it was under $100 billion. >> look, they had a long way to go. they had to get rid of $116 billion worth of debt, which they've done. take a look at shares of ge, because we'll show you this stock going pack to september 6th of 2001. why are we showing you that? because that's really the last time that we saw stock trades -- the ge shares trading at this level, yes, back in the days of jack welch. we may be within a dollar or so

of the high it hit under jeff immelt in 2011. but here's the key to the run we've seen over the last year. look at the profit margins for ge aerospace. you want to know why larry stuck with ge aerospace and said, we'll spin off the other two, i'm going to run this company, because he's got them cooking right now. look at the profit margin growth. halfway through this year, it's hard to say exactly where they are. but they'll be up around that 17, 18, 19% level going into the q3 results. and if you spend time with larry c culp, as we did when we went to the ge plant in wales earlier this year, he loves to take you on a gmable walk. he walks around, and talks about, how can we be more efficient. there's fake lean and real lean. and haas what larry is focused on. the real lean manufacturing. and it raises the question, as they have become more efficient, what's the next leg of growth for general electric? a couple of things here.

one, he's nowhere close to improving the results to the level that he wants to see. stronger supply chain is a big part of that. they've got more than 500 of their people out working with their suppliers, as part of right to improve the supply chain. the leap engine just hitting the sweet spot of service contracts. that's where they make their money. it's not the manufacturing and the selling it to the airlines, that's practically giving away the engine. it's in the service contracts which go for 10, 15, 25 years. they're just hitting that sweet spot. in the future, we'll have the ge 9x, it will be on the 777x that boeing will be putting into the margin. then the triple engine engine. if we take a look at shares of ge in the last year, we get their q3 results next week. do not be surprised if most of the discussion that you hear from larry culp on this call is surrounding greater efficiency. guys, he likes to say, when you

go on a walk on the plant floor with him, he might say, why are we always praising the firefighter and never praising the guy who prevents the fire or gal who prevents the fire. don't just focus on solving the problem, focus on presenting the problem in the first case. and that's a real reason why ge is far more efficient now than it was just a few years ago. >> he's an operator. >> yeah, amazing. couldn't believe it. hadn't been watching it every day, but the two-year chart is crazy. so thank you. coming up, breaking new york manufacturing data. "squawk box" will be right back. s and look forward to a more confident future. voya, well planned, well invested, well protected. (man) these men of means with their silver spoons. what will become of them when they discoverll planned, robinhood gold allows others to earn their very liberal rates on idle cash. they would descend into chaos.

welcome back to "squawk box." rick santelli here live at cme hq with the first breaking news of the week, in the form of empire manufacturing. for the month of october, expecting a number up 3.5? well, it's down 11.9. down 11.9, which makes it the most negative month-over-month change since just may of this year. but what's interesting is, prior to last month, if you look at

the read for september, it was the best since april of 2022 at 11.5. and it broke a string of all negative numbers, going all the way back to december of last year. so it is really somewhat of a mean reversion, but it's also a bit of a disappointment. it looked like we were going to really see a nice breakout of empire with that big 11.5 last month, but here we go, pretty much taking it all back. and if we look at what's going on with interest rates, there's been a change. you can actually see it friday, of course, the bond market was closed monday. on friday, ten-year note yields failed to surpass its previous session highs, that had been going on for seven consecutive sessions. but there is one maturity that still did it on friday, but i don't think it's going to do it today. that's the 30-year bond. the 30-year bond would have to trade above 442. have to trade above 442 to trade higher than friday's high yield. it doesn't look like it's going to happen.

it's down about a half a dozen basis points right now. we see the curve inverting a little bit more. i take that back. it's not inverted, it is getting famil flatter. it has positive. it's gone positive an a month ago. we want to continue to pay attention. as the week goes on, we get more important economic information. import prices, export prices, but the most important data of the week will occur thursday when we get retail sales. becky, back to you. >> rick, thank you. joining us right now to talk markets including what he's seeing from earnings including how the fed has impacted things on wall street is noah blackstein. why don't we talk first what you think the mood is for the equities, whether you think these highs can continue. >> i think these highs can probably continue. i think we've got the fed with probably two more rate cuts this year, for sure. i think that credit is being well behaved. we'll see how the earnings season goes, but leading indicators from the banking

stocks, certainly on earnings and on credit, would suggest that the economy looks fine. since july, you've had much broader participation in the market, than just seven stocks. all of that's boding well. i think, overall, for the market to continue to work here. i would say there's some geopolitics and perhaps concerns around the collection and uncertainty. but from what we see, outside of people trying to hedge equity risks, credit and bond markets seem relatively tame. and we think the market continues to work higher, this year and into next. >> hey, noah, there have been some questions that just start with the assumptions that you just listed. the idea that we definitely get two more fed cuts. fed governor waller making some comments that maybe we don't need to cut as much. that maybe the economy is in good shape and we don't need it. you just made the comment yourself that we are in good shape. if the fed comes around to that conclusion and does not do another two rate cuts, is that a

problem from the equities perspective? >> i think they're going to do another two rate cuts. they're not going to skip a meeting. look, we'll have a jobs number that -- first of all, on the last jobs number that you had, participation rate, in terms of who filled out the survey, was that a ten-year low? which suggests that it's highly probable that it's going to be revised. i think the downside risk to employment are certainly there. and real rates are very high, whether you want to take the six-month annualized inflation number at 2.6, or take the other 12-month inflation at 3%, you know, 5% of fed funds, 200 basis points of real rates would be considered very tight, at any point in the last 30 years. the fed funds rate is tight and there's not a lot of slack on the labor side. so i think they're going to go two more times. i think that job number was a head fake. number two, the next amount of jobs data you're going to get is going to be really messy, because of the hurricane impacts

that we've seen. so i would err on the side of cau caution. you're probably going to get a misread on retail sales on thursday. they could come out stronger than expected on all the stocking up of supplies that happened during hurricane areas. so i think the data is going to be weak and it's much better to err on the side of caution. the idea of skipping, i think, would have consequences for the bond and equity markets, for sure. >> well, if you're worried about the bond and equity markets, that seems like a silly reason to go ahead and cut rates. if you are worried that the economy is struggling underneath it, that's a different story. you think that the economy is doing just fine. >> i don't think the labor market -- i don't believe that the labor market is as strong as that last report, just given how low the response rate was on that survey, which suggests it's highly likely it will undergo significant revision. given that and given how high real rates are, you know, the fed is, has thus far, i wouldn't

say we've landed yet, but they've steered this fairly well, beginning to keep rates this high, though, as inflation continues to fall. the fact they're tightening. the economy doesn't need them to do de facto tightening, as employment hovers around 4.2. i would expect basis points -- >> real rates -- real rates are at 4%, which doesn't seem excessively high, if you are looking at the last 20 years. >> for real rates? >> yeah. the ten-year -- >> those are very high for real rates. 400 -- you know, 300 basis points for real rates is very high in the last 30 years. >> so the idea that rates have gone up as the fed started this rate-cutting process, we've seen the treasuries market look at higher yields since then. >> because we've taken out the tail of a recession. right? so the risk that everybody was worried about was a recession,

and that tail has been reduced by the federal reserve beginning to cut rates. so we've removed the recession tail in the overall market, but i wouldn't call this a booming labor market by any stretch of the imagination. and i would literally just take the labor market in the last few years. but that's paused some time in 2025. and not right now. >> what areas in particular you like within the markets? >> look, i think, there's probably -- as rates come down, there's a long-term opportunity in housing and other areas, but obviously the biggest theme in the market is ai. ai itself is not a market. you can't call 1-800-ai and have that ship that to your house. it's the implementation of that data strategy within software, within call centers and other

places like that. but i think this is going to lead us into a productivity boom, that probably is bigger than we saw in the 1990s. and so, you know, we're at the very first stages of ai, where they're building up the infrastructure. the next stage is incorporating that into technology, into software, into not only generating revenues, but also saving costs. that process hasn't begun. and i think the next stage of where we're going is for corporations to organize their data, figure out where they want it, on premise or in the cloud, given the proprietary nature of their data. and then to begin the process of incorporating ai and analytics and machine learning into everything they do. it's truly a revolution in terms of what corporations can save in terms of labor costs. but i also do think that with better insights can come better researches. and there'll be a revenue opportunity there. we've talked a lot about it. we've talked about it a ton. but people ask what inning we're in, and i just think we're still

tailgating ahead of the game. >> you're looking, though, not for the direct ai plays, but for the iterations beyond that, where companies really can use it to help their profit margins and bring down costs? >> right, so whether you're thinking of much more intelligent ai agents and call centers, whether you're thinking of ai being able to pick up the phone and take orders at your local chicken wing chain, where you're looking at ai generating better customer data for you to go out and get more sales, so it's really the use of ai, but to do that, to use these tools that they're building right now, you've got to get their data into the cloud or your data into some form, especially your unstructured data, your apps, your stuff sitting if filing cabinets, getting that into the -- getting that into a form where you can begin to analyze and begin to train your models to get better insights. it really hasn't begun yet. so we think that this long process of more analytics and

more data being moved into cloud or cloud-like type of set-ups is going to be a theme for 2025, as well as networking and other things like that. so, we're building the data centers and building the infrastructure. the enterprise side and the applications have lagged. that's part of the concern that people have had, regarding what is the roi on all of this. at the end of the day, the roi will come from cost savings and perhaps revenue enhancements, but that's going to come from the enterprise. so that process is just beginning. and it's going to be a theme throughout '25 and beyond about how large corporations and medium-sized corporations begin to implement better software, better analytics into their processes, and how they save money and generaterevenue. that process hasn't started yet. all we've really focused in on is data centers and chips. the real work is ahead. >> next time you're with us, bring us some names on that. we're out of time right now, but we appreciate you.

>> happy to do so. coming up, hedge fund manager kyle bass joins us. we'll get into china's efforts to shore up its economy. and the latest provocative moves that the country is making with respect to taiwan. and a reminder, as we head to break, you can always watch or ayun.n to us using the cnbc app. st ted "squawk box" will be right back. , helps secure tomorrow. our time-tested fixed income suite, backed by over 145 years of risk experience, helps investors meet their goals. pgim investments. shaping tomorrow today.

(man) look at this silly little sailboat... pgim investments. these men of means with their silver spoons, 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.

(vo) what does it mean to be rich? maybe rich is less about reaching a magic number... and more about discovering magic.

all right. welcome back to "squawk box," everybody. we've been watching futures this morning, and it's kind of like watching paint dry at the moment. dow is flat. nasdaq is down by 10. s&p is up by about 1.4, but anything could happen, as we get closer to the opening bell. bitcoin, by the way, sitting near $66,000 this morning. you'll see $65,807. we are also -- oh, wait, this is you, andrew. >> we're watching the price of crude, it's been down quite a bit this morning after a 2% fall yesterday.

and we should mention what's happening here, three senior white house officials confirming to nbc news that israel has told the u.s. now that it will limit its targets in iran if it retaliates for iran's october 1st missile strikes to military targets, not oil or nuclear facilities. in a statement, the israeli prime minister's office now saying that it listens to the opinions of the united states, but that israel will make its own final decisions based on its own national interest. you're looking at wti crude falling in large part because of maybe some of the anxieties about something like this happening at least immediately have gone away, or at least have subsided. the question is, i imagine there will be some form of retaliation. to me it may very well be that there's retaliation after the u.s. election. i've asked that question multiple times. i think that is a component part of this. we'll see. >> i thought it would have been by now.

the rationale is every day you don't do something, iran could have decided, all right, it's time for us to take that last step. supposedly, they've just hesitated, they've got the material to be able to build a couple of bombs, and they've he has dhesitated, they haven't doe it and israel with a pending strike would have forced them to do it . to wait until after the election, it feels like time is of the essence. >> but i think there are other analysts who think that it could have taken months, if not a year. >> we're talking china, but kyle bass can talk about these other things, too. we're paying close attention to the headlines around china, including government messages on economic stimulus, and the volatile market conditions that have resulted. also, some provocative moves about taiwan. yesterday, the country conducted large-scale drills around taiwan and what it claimed was a warning to what it called

independent forces for the island. joining me, kyle bass, capital management and chief investment officer. we can talk about china, but a reference we might ask you about israel. what do you make of what israel is doing right now? does the election have bearing on it? are you surprised that there's been no retaliation yet, kyle? >> you know, i think that we have to turn the table just a little bit, joe. i think when you look at the kind of cadre of bad guys working together, you have the ayatollah working with china and russia. and if you notice, you know, you've got russia being, again, increasingly provocative in the ukraine. you have israel and iran at each other's tlohroats. and now almost on cue, you see china's xi move in with his third simulation exercise of the assault of taiwan in the last, call it two years.

so, you know, it is unfortunately hinging right around the u.s. election, on november 5th, but today being october 15th, and you've got all of them working together, joe, if you were on the other side, and you were trying to open up potentially three fronts of militaristic action, headed into a u.s. election, now is actually when you would do it. so i don't find the timing to be that surprising to anyone. i just think that israel is going to act and defend itself as it should. israel is going to move on, you know, maybe the energy targets, but certainly the nuclear targetsu.s.'s help on one specific target, and the rest of them, i think israel can take on their own. the question is, do they defer to the current administration and wait until after the election. i find the comments from the israeli pm to be suspect.

>> yeah. and i don't know whether it's sources or what that say that netanyahu or israel has agreed to just focus on military, not energy or nuclear facilities. so, you doubt the veracity of that, or you think it's suspect? >> i mean, if you think about how this gets leaked to the press, it's someone in the biden administration releasing what i believe to be their hopes. if i were netanyahu, would i tell the other side what i was going to limit my strikes to? i actually wouldn't. and, so, i don't know -- i just don't know if what we're hearing is going to end up proving to be true. >> you think that iran is still -- is it important, what china and russia are, you know, intimating to iran at this

point? do you think they would move ahead and go ahead and do that final step to being nuclear capable, or not? >> it's a complex situation. we all know that the ayatollah for many years has said they want to possess a nuclear weapon and that's what the iae has hung their at on. and they've recently said all bets are off, we don't know if what they're doing in the nuclear program can be deemed to be peaceful anymore. and, so, you've seen the iaea back away, you've seen iran start to spin this up. and our own belief is that they can have a nuclear weapon in six months or less, and so the question is, for israel, given the direct attacks that iran has made on israel itself, israel now, i think, is going to have to exercise its right to defend itself and eliminate the potential of an iranian nuclear

weapon. so i think when you see the planes landing from russia on iranian airways and the iranians putting up the gps jammers, the advanced gps jammers that russia has developed, you know, joe, they're all working together. it's obvious that they're all working together. and i think it's important for our administration to start defining who our enemies are. we still don't outwardly say china is the enemy. during the cold war we all knew that russia was the enemy. we all saw movies where there were russian bad guys. we all knew what russia was after. we knew that we had to win the cold war. and here we are in maybe a much larger cold war, facing an adversary that is more capable than any adversary we've ever faced before, and yet we still don't have our leadership defining china as the enemy. we still have wall street investing in china, for heaven's sake. we're getting to the point where

anything could set off more of a kinetic conflict. and here we are today on cnbc talking about, oh, well, is china going to stimulate, or is it time to buy chinese stocks. i think that's crazy. >> we've got, what, three weeks now, so you don't expect other countries, any of our enemies to take advantage of -- i don't know, what would you call this period we're in right now? we don't have a word for it. it's not really lame duck. it is a lame duck, i guess, but then you've got the vice president and the current administration as the possible next president. so it's sort of uncharted. but you think our enemies are aware of, perhaps, the vacuum, the power vacuum? >> i think it's clear they're aware, joe. if you were one of our enemies -- again, put yourself in their shoes. if you knew that, you know,

putin's life mission is to basically change the result of the cold war. he's embarrassed that russia lost the cold war and he's trying to put mother russia back together again. you saw the leader of lithuania say if russian troops set foot in lithuania, they're going to strike 300 miles into russia. that was an interesting country, just lack week you had a nature country saying this. if you were to choose out of the last 20 presidential administrations, who would you choose to bring belligerence against or move on the global chess board and hope there wasn't a retaliatory strike? i would move against this one. you've got a lame duck president, you have a vp that had no popularity whatsoever that doesn't truly understand geopolitics, let's say. and now is the time. now is the time of the most division and the most, let's

just say -- the most amount of unknowns in our administration are there today. >> right. >> and it's the most vulnerable time for the united states at this moment in time. >> all right. kyle, you know, talk about october surprises. what's today's date? >> the 15th. >> but you just described some pretty scary scenarios. appreciate it, kyle. thank you. >> thank you. still to come, we've got some top stocks to watch ahead of the opening bell on wall street. "squawk box" will be right back. at least, not the way it could work. your people are buried in busy work. and you might be thinking... can ai make it all work? it can. on the servicenow platform, ai transforms your entire business. your people work better, your customers are happier, and todd... well... he's practically euphoric. practically. so, let's get to work. (♪♪)

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. (man) these men of means with their silver spoons. t. rowe price. 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. (♪♪) (♪♪) 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

welcome back to "squawk." dom chu joins us with premarket movers. >> andrew, we'll kick things off with earnings headliners. bank earnings continue out this morning. bank of america, goldman sachs, citigroup, all higher on their results. b of a posting a revenue beat. also revenues from stock trading were a bright spot for that company. goldman sachs reported a beat on top and bottom lines. third quarter profits jumping 45%. those results boosted by trading and investment banking. citigroup is also beating analyst estimates on profits and revenues. the banking division reported an 18% gain in revenues with

year-over-year growth led by the investment banking arm. walgreens popping after fourth quarter results, beating on earnings and revenues and announced cost-cutting efforts. they say they plan to close roughly 1,200 stores, including 500 in fiscal 2025. united health, shares down 5% after health insurance and services giant, dow component trimmed the full year earnings guidance due to a cyberattack and overall costs. andrew, i'll send things back over to you. >> thank you for that. appreciate it. we've got a lot more tomorrow. we'll do it all again. make sure you join us then. "squawk on the street" begins right now. >> good tuesday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber. coming off recor