♪ good monday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer and david faber at post nine of the new york stock exchange. coming off some all-time highs, sex straight weekly wins for the s&p. that's the longest streak of the year. we go into a week of some heavy-hitter industrial earnings. futures are soft. our road map begins with rally mode, though, why goldman

strategists say the era of big stock market gains might be nearing an end. shares of the j&j spinoff, kenvue, they're up. starboard amassing a significant stake in the company, or so we're sold. and disney's succession plans. let's begin with the markets in the midst of the six-week win streak and now we have some 21% of the s&p having reported so far. >> okay, i'm coming with a new thesis. we have this bizarre situation where going into earnings season, we've got this massive $200 billion in money that went to index funds. fast far ahead of what happened last year, and we're already there. you have the index fund sopping up the additional supply, and you don't have a lot of sellers, between the buybacks of the companies and the s&p, david, the buybacks, obviously, crunch, but the s&p's like crunching. you don't have a lot of stock

trading so you have a procter & gamble, and could have been disappointing. you end up doing nothing. i just find that when you disappoint, you don't go down a lot. >> you don't go down. >> and when you do well, you soar. that's an asymmetrical -- >> that's a nice market to be an investor in, isn't it? >> it's a halcyon time, david. >> you're not taking as much risk as you think you are. >> you're crushing so much stock with the s&p. >> when you say crunching, will you explain to people what you mean? >> when you crunch stock, what that means is it's -- the float's smaller. that's actually company buying back stock. but when you have s&p, that money doesn't trade. that's static money, so it's not hedge fund money. you have that stock. it sits there. remember, we don't have -- we have money coming in, and so the next thing you know, there's just a smaller group of shares that trade, and the small r group of shares that trade will favor the buyer.

>> how about this cost and note looking at 3% annual returns for the next decade versus 13% in the last decade? >> disappointing note, and i like kostin. >> yeah. >> but it was surprisingly negative for david. >> he also added that in eras of fed cuts, you don't get a lot of assets coming out of money market funds or assets. in fact, you see capital flow going the other way. >> well, i mean, we actually have -- look, we have a situation right now where there are a lot of people saying, why did we even have to cut? economy's so strong. i think this is an aberrant fed rate cut cycle. i don't see a lot of money coming in, but you don't need it. particularly because of the thesis i just propounded. >> that's somewhat count counterintuitive as rates drop and the money market rate drops that you're not taking money out of it. >> you would argue that in an era of cuts, that's signs of macro weakness and that's when you go to safety, right?

>> right, but i think we're going to have -- the weakness is going to be select. >> this is right. this is not that, though, carl. this period doesn't feel like one where people are, like, particularly concerned, to your point, which is why we're probably going to start debating whether the fed goes 25 or nothing for the next meeting. >> right. right. and i think that we typically have a rate cut cycle when something's really wrong, you know? in 1998, rate cut cycle, by -- >> '98 was just 50 basis points, if i remember, from greenspan, after long-term capital. >> there's no hurry. if i were jay powell, i would take my time, because the economy is pretty good. we have to have a couple really weak unemployment numbers. >> some numbers on friday, helene might take 50 or 60,000 out of october. >> and the strike, which we'll get to talking about. >> i'm asterisking that. >> okay. >> all right? >> yeah. >> there was morgan stanley -- >> the fed will too. >> morgan stanley friday night, could our call for a string of 25s get derailed?

couple more months of undiminished spending might cause us to reconsider. >> i don't care. we're in a rate cut cycle. it doesn't have to be aggressive. in the meantime, earnings have been unbelievable. american express was not bad, by the way. that was nonsense. american express ran into the quarter. i find that last week, the bank earnings were so extraordinary, including bank of america, by the way. i think that they were extraordinary numbers. and what that said -- it set us up for a very good period. i like banks doing well. >> nice note out of mike mayo today at wells, the era of three-year eps inflection is happening now. >> this is a good moment. and we haven't had any, obviously, mag seven, but we did have that taiwan semi number, which was extraordinary, and the asml -- by the way, asml, on tuesday, nobody heard of. then wednesday, they reported bad numbers and suddenly asml is the most important semiconductor

company in the world. it's dutch. they don't know it's dutch. they could be belgian ffr. >> it's all based on u.s. technology, but yes, it is a dutch company, and that's why we have a lot of power in terms of not allowing them to sell their equipment to certain regions of the world. >> even royal dutch love dutch. >> it wasn't a.i.-related. it was other parts of the business. >> remember, he said that was -- that semiconductors were sad. he used the word sad. >> who used the word sad? >> the ceo. he used the term, "sad." i thought that was sad. he's sad. what kind of -- who's sad? sad is a mets loss. sad is not a way to view semiconductors. oh, i'm sorry. i'm going to take you out of the equation. >> it's okay. >> look at this. >> come on, guys. really? come on. >> saquon had 170. cue up saquon right now. >> is there a dodgers fan here? i don't think so. get that -- get it off.

thank you. >> what was that all about? >> were you at that game? >> which one? >> the eagles. >> yes, and saquon had more yards than the entire giants offense. >> there we go. >> it's a great time for new york football. new york baseball, listen, if you're a new yorker, you got another team in town that's in the world series. >> do you mind if we go back to business? >> oh, oh, hm. role reversal day. >> when you crush it on sunday -- >> boeing. no, we got a lot to talk about, but i just think that boeing -- the reason i want to go to boeing is because here's the worst story ever, right? probably the least managed, most incompetent group of people to assemble in one place or two places or three places. where are they now? where's the headquarters now? i don't know. des moines. they move the headquarters every few years. >> where is phil condit these days? >> i don't know. god love him. boeing stock does nothing but go up. it is the worst company in the

s&p 500, and it goes up big. what does that say about the best? >> they're going to sell a lot of stock, too, at some point very soon, now that the strike, as i sort of reported, they were more likely to wait and try to do it then. >> i bumped into some people when i was at the eagles win, and they all wanted to be in the boeing secondary. >> i don't believe that. >> okay, couple did. >> we talked on friday about how folks wanted to get in on the other side of this -- of resolutions regarding raised -- capital raises and the strike. let's get to phil lebeau to tell us a little bit more about this tentative with the iam. hey, phil. >> it's a far-reacher contract, carl, that's for sure, that the machinists will be voting on on wednesday. here are the details of that contract. remember, they rejected an offer last month for a 25% raise over four years. that's not what they're being offered now. the tentative agreement calls for a 35% raise over the next 4 years. they've sweetened the ratification bonus by another 7

grand. they're also adding a one-time $5,000 deposit in every p employee's 401(k) plan. there's the annual bonus, which was not there. now it's in this offer, and not only is it in there, but it will be at least 4%. question is whether or not they can get this over the finish line. the machinist leadership, which recommended the previous contract, which was roundly rejected by the rank and file, it is not recommending this deal. it's not telling the workers they shouldn't vote for it. they're sort of taking a step back and saying, here are the details, you make the decision. these are the hurdles that boeing needs to clear here. you've got this contract. we'll find out on wednesday when they vote. there's a capital raise, which is widely expected to kick in after the contract is ratified. if it's wednesday, it might happen this week. then, you're got them cutting costs and staffing. they've already said they're going to cut the company's workforce. they have a lot of things they

need to make decisions on. lots that will come out likely or at least we'll get some indication of what they're thinking on wednesday when the company reports its q3 results. yes, they already warned about what the expected loss is going to be. but we're going to get greater clarity regarding the financials, the liquidity of the company, and we'll hear from kelly ortberg for the first time. this will be his first analyst call on wednesday, and we'll get a sense at that point of where he sees the company. >> two things. one, the spirit deal, and two, what is the s.e.c. really saying that is holding this deal up? the equity deal. >> let's start with the spirit deal. that's still the plan. to get the spirit deal done. i wouldn't say back burner, but they clearly have more pressing issues in terms of getting this machinist contract done and then doing the equity raise, the

capital raise. and then, with regard to the s.e.c., look, jim, they've already done the shelf registration, the universal shelf registration. it's just now a matter of, do we pull it off, and how much of this is going to be equity in terms of many believe it's going to be about $10 billion? is there a convertible in there for another $5 billion? do they do $15 billion? or do they say, you know what, we're comfortable with $12 billion? i think they still haven't completely locked in on a final amount at this point. >> okay, so, the way i look at it, my own take, is that you get the earnings. the earnings, already preannounced. the demand for this thing is insane. this thing has gone from 148 to $160 with nothing good. now that we have something good -- well, i shouldn't say. i'm trying to understand the demand. why does everyone love this situation? >> look, we've talked about this. it's going to be dilutive in terms of how many more shares are going to be out there. but if you look at boeing separate from the -- how many

more shares will be coming into the market, if they do the equity offering, if you look at boeing, there's nowhere to go but up. it can't get much worse from here. and kelly ortberg has already said, we will restructure this business. there's a possibility, if they can execute, and that's a big if, but if they can execute over the next couple of years, they can really start to get the cash flow going. now, admittedly, they've got a lot of things they need to take care before you can say, yeah, we see that happening. but they believe that they can get the production rate on the max increased starting early next year, potentially. it's still capped at 38 per month. you start getting that going, you start doing a better job in terms of controlling your costs, and you're going to cut 10% of the staff. there's some real potential here. >> that's a hopeful note given this line in "the journal" this morning, jim. "industry insiders are beginning to ponder something previously

unthinkable, whether a break-up or bankruptcy is in boeing's future." >> i'm with phil. >> carl, i know that note is out there. you got to go a long ways to think about them going towards bankruptcy. now, look, if this vote comes out and they reject it again and this thing drags on for several more weeks, anything is possible. but given where this company is, and given the moves that kelly has made, i don't know. i think that might be very premature at this point to talk about bankruptcy. >> yeah. phil, we'll get to southwest in a little bit with your help, maybe. phil lebeau, this morning, busy day. when we come back, we'll get more on the activism front. we'll get to disney. got some news on apple, starbucks, and others when "squawk on the street" comes back.

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cnbc as well, kenvue, a new position over at starboard. that adds to, of course, pfizer, where they have been engaged in terms of trying to get the company to make changes, particularly on the cost side. you can see kenvue shares are up on this news as well. tomorrow, i'm going to have a chance to discuss it all, because jeff smith is going to be my guest. my annual appearance at the active passive investment conference, and jeff does it every year, and we're going to have plenty to talk about. man, they are -- they are busy over at starboard, between pfizer and kenvue. >> i can help you if you need me to go. >> i don't need your help, thank you. it's nice to know you're there for me. we're going to have a few others as well. guys, it's not just potentially kenvue and pfizer. i've been reporting on air products and other large cap activist situations where you've got mantle ridge and de shaw both pressuring management, and they want that ceo out there. and then you've got cvs, which i

know you guys covered on friday with the unexpected departure of the company's ceo, replaced by, frankly, somebody nobody's ever heard of. not that you necessarily need to have heard of them. and the presence of glen view i've reported on in the past and what will happen there. the window at cvs, the nominating window, doesn't open until january, but it does feel as though they're potentially setting up for a proxy fight there as well. whatever it will be, it will have to be long-term in nature, guys, because it's not like there's a short-term fix here and this is not about at least in terms of the asks from this activist, not about a split of the company, but just about getting ahold of their health care business and improving it in a dramatic fashion over time. they do want board evolution and/or refresh and they want it sooner rather than later. they want management and the ranks of management to be improved sooner rather than later. and of course, there's the hope the industry will get better, jim, but -- >> well -- >> none of that adds up to a quick turn there. >> well, that's a tough industry, and geez, you know,

karen lynch had just gotten it to the point where every cvs store that was left was profitable. david -- >> that's not where the issue is, interestingly. >> humana was bad. united health was bad. blue cross, elevance, bad. >> moone was medicaid, one was medicare advantage. cvs mispriced -- in '22 and '23, they bid aggressively on medicare advantage, 1.1 million members added overall. they added all of them and mispriced the whole thing. >> that's true, and that was the major reason what was given, but i would say this industry is horrible. so, i mean, like, she gets trashed? this industry is horrible. i want to know, do you think both acquisitions were bad? >> well, they -- >> because that -- >> they certainly overpaid for them. >> and the labor costs are horrible. >> we know there's a history of overpayment everywhere. look at what happened -- look at that right down at walgreens. that was insane in terms of what they had to do for, what was it,

village? >> interest if anyhe makes a comment. >> we've got reports of talks between humana and cigna. >> they float on that friday afternoon. who floats that? >> i don't buy it. if you're humana, you've just lost your four stars, so you've lost literally almost allyour margin because you got a 5% bonus. it's binary, right? 5% if you get four stars. otherwise, no. you're talking about a low-margin business. you're looking at 2025, you don't -- what are your earnings going to be? you going to get your stars back in '26? you don't know. how will you negotiate a deal? >> it's like michelin. >> how do you negotiate a deal, know what your ask is going to be in terms of price, let alone on the cigna side. >> consolidation would help. >> but they're also suing cms. cigna is the one name that stayed out of it. >> they're very well run. >> i have a hard time seeing how you can possible negotiate a deal there, given how uncertain

earnings are for humayna, not just next year. >> karen lynch clearly didn't see it coming, didn't communicate well with her, and frankly, this is an industry that everyone misses. the medicaid phenomenon is new. that came out of nowhere. >> the elevance. >> you got a rebate on that. >> well, that's the point i made on the elevance that you will make it up, just not this year. the states will give you a rebate on the -- on how you -- or the missing margins. >> all i'm saying is that lynch was knocked for her pricing, but have a -- everybody else should be knocked too. >> do you want to own the stock? that's really the question. >> tim wentworth is a very seasoned guy and he bit the bullet quickly and got a decent balance sheet. >> there, you're playing on the retail, on boots and walgreens, not on health care. >> he wants to have a system where you get all the junk food out and make it like a doctors

office. we have to get back on kenvue, because i know you have a lot to say. can we come back and talk kenvue after the 17 minutes of commercials we do? >> i'm going to talk kenvue tomorrow with jeff smith. >> i want to talk kenvue today. >> no, i think i'm going to talk tomorrow. >> i just spent time on kenvue and he's knocking me? >> i want to hear what you have to say about kenvue. >> after the 17 minutes of ads. cramer's "mad dash" and the opening bell in eight minutes. (grandpa vo) i'm the richest guy in the world.

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keep your eye on futures here. as we mentioned at the top, longest win streak of the year with six straight gains weekly for the s&p. about a fifth of the way through earnings season, and we'll keep an eye for some big names this week, including gm, boeing, tesla, raytheon and others. opening bell coming up in a couple of minutes, and don't forget, you can catch us any time anywhere. just listen to and follow the llpoasee oni e strt:peng be" dct.

>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. let's do the first "mad dash" of the week. >> i don't want to be critical on the first day. i feel it's a giving day. the eagles won. but jeffries, loop capital and

jpmorgan, they're all playing this game, how good are apple sales, using trackers? david, i've got to tell you. this is what i regard -- i have to tell you what i think about this. all right? and you -- you can't do -- because remember the three sticks thing? that group that was, like, they were phony crypto guys? you can't break three. you couldn't rip it. but this is what i have to say about the tracker. it's not worth it. >> you've made that point a number of times. >> even though loop says it's good -- >> by the way, it does get incredibly confusing, i think, for our viewers as well, because we come on every other day and we've got this one says this, that one says that, and you can't keep track of, is it strong, weak, china, yes, no, my mother, my sister, who knows? >> it's totally chinatown, david. pretty good article in the "wall street journal" that was worth more to me than this. we have to end the tracker game. let this be the official burying of the tracker game, okay? no more tracker.

>> okay. >> all right? no more tracker. >> yeah, we'll talk a bit more about this piece in "the journal." let's get the opening bell here. at the big board, it's the winner of the annual 3m young scientist challenge, and at the nasdaq, retail opportunity investment, a reet, celebrating its 15th listing anniversary. i love this line by cook in the "journal," jim, "we're perfectly fine with not being first. as it turns out, it takes a while to get it really great." >> i think that's great. i remember him talking about apple + to me and i was anxious for them to do unbelievable stuff right out of the gate. i proposed they buy netflix. i wanted pfizer to buy netflix. but he was just adamant, listen, we'll do great stuff for apple plus when apple plus is great. i mean, basically. and he didn't mean to be circular reasoning but that was just very typical. i think some of the things they're doing are revolutionary in health, but they didn't want

to do health until they made health perfect. this is one of the reason why i hate the analysts who say, trade it, trade it, trade it. there's little things they do that make it far more instrumental in our life, every single year, and that's what he cares about. like vision pro. someone's questioning vision pro. they have to start somewhere, and then they're going to make it great. i remain apple and nvidia are two stocks that you should own, not trade. period, end of story. >> kind of leads us to a couple personnel changes. they are losing their head of recruiting and their chief people officer. starbucks is bringing in a chief brand officer who worked with niccol at chipotle and taco. >> what a great hire. and chipotle is -- was just a great proving ground for starbucks. the apple turnover, i don't know. look, it's a great company, and i think that there are people who they rise to it and then they want to go do something else, but the coaching tree's big. the bench is long. i'm not worried about apple. i am worried about the analysts

who continue to try to think, well, it's this quarter and then it's the abyss. there is no abyss. not when you have an operating system like that. by the way, latin america, i happen to have santander on today. latin america is on fire. latin america is a big apple place. when you add apple to latin america and other emerging nations, you'll see they're bigger than china. by the way, nick eberstadt was in my class at harvard. he wrote something that says that for every one person born in china, six die. aging out. i mean, the chinese demographic is so shocking to me. >> a lot of that is -- >> sorry. >> -- it's a self-own. >> he was saying -- >> by the way, demographics figure prominently into a lot of countries' future. ours is obviously different because of immigration. >> right. >> but south korea, japan, now china, of course, italy, i mean, you go on and on, jim.

>> it does say -- you could argue that when you have a country that has -- >> nobody's at replacement rate. >> -- birthrate is a sign of a country's failure. >> africa is the only continent that is still well above. so there may not be as many people to buy iphones one day. >> do you read timothy snider at all from yale? he's saying, you don't realize how tough biden's been on immigration. he just does it a different way. he doesn't do it on deportation of the 12 million people who have been here. i'm reacting to the fact that i completely kicked the can down the road when david asked me about immigration. >> i did. i was asking you from a specifically economic perspective, given it's a key issue in the election, as to whether or not the deportation of 11 million people will have an impact on the labor force in a negative way. you completely chose to ignore the question. >> well, that's because i'm -- i'm an ambassador of goodwill. >> would you like to entertain the question now, jim? >> yes, i do think that when you

look at what biden has done, i mean, his interdiction is right at the border. there's been tremendous -- >> now the border is quieter. >> the border is more closed than trump. >> it was obviously not for quite some time. >> no, but the current story is a very tough border, but the deportation of 12 million would -- yes, would raise that in tariffs, would substantially raise the price of everything, but then again, harris wants to raise the minimum wage, so it's -- it's kind of a push. a lot of this is a push. >> minimum wage versus 11 million people -- >> 12 million. i don't know how effective -- >> it's hard to imagine it actually occurring, but i suppose we may get an opportunity to see. >> mark cuban was on "squawk" this morning saying, how would a small business owner react if steven miller'steam of deportation officials came and asked for immigration records from everyone in your business? >> it is very -- look, when i ran my restaurants, i went through automatic data, and was

really scrupulous about this because you go to jail if you hire someone -- in new york, you go to jail if you hire an illegal, if they find out. >> there's a lot of people building a lot of stuff in this country, i would think, that are probably not -- that are going to be concerned, thinking about -- >> no, but i think that we, on election night, have to be aware that there is -- the big economic story is the cost of labor in this country. that would be where i intersect. and the cost of labor goes up dramatically under trump. because of the immigration. >> yeah. we're getting close. of course, you can see we're going to be covering it as well. it's not going to be -- it's an election week, most likely, guys, as we've said, not a night, given how close it would seem. >> the challenge? >> seems unclear that you're going to know a winner the night you're broadcasting, carl. >> i don't think anyone's going to know unless it's a 50-state sweep because president trump has already said he's going to challenge it so it's either a long night or a long month or a long year. >> or a long national nightmare.

>> who said that? >> ford. >> he's good, man. >> the daily double. >> when he pardoned -- >> forgot that he won "jeopardy!" >> he pardoned nixon. >> did you beat spannen, whatever his name was? >> i beat kareem. he was great on geography, though. crushed me. smart man. >> he skipped fifth grade. >> skipped first grade. >> did you skip first? >> i did. >> did you really? you skipped first grade? >> yeah. >> it was boring. >> it was a long time ago. >> i had bad handwriting. that's how i got put on the dumb track. that's what they used to call it, the dumb track. that's a great thing. >> i find that hard to believe. >> i was on the dumb track until eighth grade. i told you my father was ashamed of me. >> paging dr. freud. >> so much. let's talk about disney, guys. we did get some news this morning. james gorman, who we know well,

of course, at cnbc, the former ceo of morgan stanley, been a board member at disney for a bit of time. he's going to step up to the chairman role. that will be at the beginning of next year. he will replace mark parker, who will depart the board. now, mr. parker, former ceo of nike, as you might imagine, given the changes at that company, is going to be more involved again from what i hear, and i think that's an expectation. >> that's what i hear too. >> he's going to have more of his time taken up with sort of -- >> he was so great. >> -- pitching in at nike as they have gone through their own leadership change there. and then, early '26 is when you're going to hear who bob iger's replacement will be. two years from now is really when we're going to be talking about the coming transition at disney in terms of leadership. but conceivably, we're going to know who is going to be that person in early 2026. we don't cover this stuff as closely, but in hollywood, i

guess they're just endless rumors and discussion about who it's going to be, and they're trying to tamp that down by saying it's going to be a little while. >> why rush his replacement? i told you, i've -- i think that hugh johnson lent a level of stability as cfo. i do think that we have to -- streaming turned. >> yes, became profitable. >> studios turned. >> studios have been very strong this summer. >> parks, no turn yet. >> parks are tough. tougher. >> tougher. and you know my solution for parks. but that's been already overruled. >> we all know your solution, yes. new mexico. >> it's been laughed at. >> new mexico. >> new mexico, turns out to be where the permian is. >> the expectation is that it's going to be filled by an internal candidate. that is the way -- >> that's what you're thinking? >> i do continue to believe that. they conduct a search, you would expect that they will at least entertain some people from out outside, and there are obviously some former executives out there

in the world from disney, but it does feel like it'sgoing to be internal, but it's a long way away. >> look, no need to rush this. i will say that i have been a gorman fan for a long time, and it is interesting that ted pick, i think, has reaped some of the great success of gorman. ted pick quarter was amazing. >> yeah, well, you started the show by talking about how strong the earnings were. obviously, morgan stanley had a great reaction to its numbers when it reported late last week, and overall, i mean, i mean just looking at a group. it's interesting, of the big cap tech -- big cap bank names i cover -- not cover -- i keep an eye on, 36.5% is the gain for goldman-sachs. it is now the biggest gainer of the group. >> but wells fargo, david, come on. give charlie scharf his due. it was an amazing quarter. >> and it's been a great year to own all of these. citi is now the laggard of, again, the biggest cap names at 21.5% gain this year, but that's

in line with the s&p, roughly. almost all the others have outperformed the s&p. >> carl, what this says to me, again, is that when you look at the mosaic of how they outperformed, it's because there's no -- there's no defaults to speak of, which is really incredible. we had a tightening cycle that was supposed to wipe out so much business, but employment trumped tightening. as long as employment is strong, you don't have default fz. as long as you don't have defaults, people were surprised at how good these quarters were. >> not a surprise that, given all jim just said, wedbush takes rl to outperform 430 today and baird ups mohawk. >> there are so many different sectors that are strong, and i understand why people, david, might want to go after the drug sector, where there's -- that's where there hasn't been a lot of -- >> there hasn't been a lot of gain. >> now the borla thing was not -- i hope you ask jeff about that, because it's not like

pfizer has done well, even though i think this seagen acquisition is good. it is interesting that that's the segment that people are disappointed in. >> i'm going to hopefully talk to jeff smith about all of it tomorrow. i'm happy to take your questions. >> like submit the questions? >> if you can write them down for me. >> does it have to be in the form of a question? >> it can be. man, that guy's got a lot on his plate. i hope he's got a big staff. >> why don't we give you the whole 10:00? >> i'll take it. we talk about financials, guys, and then i always like to come to the alternative asset managers. as we get towards the end of the year here, it's worth pointing out that even though the banks have performed extraordinarily well, you'd be better off owning blackstone, apollo, and kkr, not to mention blue owl, or aries. they have all had incredible years in the stock market. i have been talking about the alternative asset managers for quite some time, and private credit, as you know, and this has been a year of extraordinarily strong gains for all of the stocks of these companies that are involved in

that. >> i'm so glad you brought this up. i think david solomon, in the end, can run laps around all these companies. >> what does that mean? >> i think that their private equity division is going to be buried within goldman. when you talk to david -- >> the old blackstone buried in goldman? they got you in that one? he's been talking about that one for a long time, and one day, we're going get credit for it. >> david solomon, i said -- >> goldman stock's up 36.5%. maybe they're getting some credit already. >> it's good, but i told him, david, if i had started, i would not have started at goldman. i would have started in private credit. >> but you never would have left private credit. >> i would never be your partner. what can i say? >> i mean, these kids who start at goldman, two years, they're already, year one of that, they're getting offers from private equity right away. a lot of them know where they're going. >> it's amazing, and they hire people without business school, law school, hire out of college. >> the question becomes, who's goldman keeping? who's everybody else keeping when you've got blackstone -- >> they have good talent. >> i'm just asking the question. >> i wanted blackstone and

blackrock to be in my travel trust. blackstone ran away, but larry fink, who sat right here, i think, crushed it. and he's a giant dodger fan, which is probably really galling to you. >> that is galling to me, yes. >> >> i just want to point that out. >> crazy series. nice piece in the "journal" about jeffries spending millions of dollars to lure top bankers from competitors. >> rich handler had been taking advantage of the weakness of some others, whether it was credit suisse, obviously, when they went down and the opportunity that provided, or whether it's issues at barclay's, if there were any, or anywhere else. he's been aggressive in building their teams, and by the way, that's -- look at that thing. look at that. >> wow. handler's a killer. he really is. >> yeah, wow. >> he's a killer. >> he can buy tillman's boat, which he did. see? now i'm saying something and you have no idea what i'm talking about. i'm talking about tillman had a

nice boat. >> i thought you meant tillman, the great election. >> that's what you can do when your stock is you were 100%. >> tillman is the most normal billionaire i've ever met. >> really? the most normal? >> he's the most normal billionaire i've ever met. who's the most normal? >> cuban >> i think that's a go-to. >> but there are a lot of quiet billi billionaires out there who are so normal, you don't know who they are. that's where it's at. >> jensen huang is a wonderful billionaire. just smart, no acting. >> i wouldn't describe him as a billionaire. he's a centi-billionaire. >> he hasn't changed his leather jacket. there's been no upgrade. >> i'm glad you mentioned him, because it's been 44 minutes. >> david, it's the greatest stock of all time. if i want to mention it -- i've let you mention, i don't know, the what is it you talk about?

whatever. >> there are -- there are guys at fraternities who watch us in the morning who have a drinking game going, and if you don't mention him, they're not having a drink until 9:40. >> they have to get to class, jim. >> do they drink pump kin ipa? it's like cereal. pumpkin beer. what is that? no, thank you. i like bud light. i do. >> really? >> i like corona light. >> is that a political statement? >> no, i've always liked it before it all happened. and my wife -- >> when things were normal. >> isn't it crazy you can say what beer you like? >> that's unfair. >> say what beer you like, and it's like, oh, what do you think? >> we're definitely in an era, jim, where it's hard to a i void -- take mncdonald's, for example. they closed mcdonald's, by the way, where the customers were screened ahead of time for

secret service purposes. >> our executive producer has been to that mcdonald', apparently, todd. i go to costco in allentown >> he's been to every mcdonald's. >> i crush it in this costco. there's jill stein signs everywhere. i forgot. her 60,000 votes cast hillary pennsylvania. >> this was not open to the public? >> they screened it for secret service. the customers were selected by the campaign and maybe the mcdonald's itself, but they were rehearsed andprepared, and -- >> he didn't get the fry burn that my -- that karen cramer got. when she was at mcdonald's, she got the basket hit her, and she got the fry -- >> that's horrible. >> it's fine. it's what you do. it's for troopers. that's what you do when you're behind the -- you want to own that mcdonald's. >> southwest shares, guys, are down about 2%. >> what is that? >> some news that -- obviously, you'd expect that there would be potentially some talks of settlement between elliott.

>> how many board members? >> well, they want -- they're down from ten to eight is their ask, right? but what would you -- what do you think they would take? >> how many people resigned from it at southwest? >> six resigned, and then you got kelly stepping off as well. >> take six. >> six? six would be a huge win for them. even four is a lot. >> they need help, southwest. they turned out to be a little more genteel than i thought. they're genteel people. they're nice people. the southwest people. they're not -- oh, jesus, forget it. bourla is nice too. >> the other big av story is save with this debt extension. but the long-term chart, jim, it's not much, even with a 40% gain. >> thank you, justice department, for raising our tickets to west palm by killing that deal. that's all right. when justice department breaks up google and dismantles google, it will be fine. we all want that dismantled. >> airfares and outright deflation. >> they ought to go after every

company that's made our lives better. they've made our lives equally better, and it's time for that to end. justice department mantra. let's go after everybody we love. right? come on, you love google. you love amazon. you love apple. you love facebook -- you probably don't. >> i don't love anything. i love my kids, my wife, that's about it, and a few others. i don't love companies. >> you're working on the -- >> on occasion -- >> my kids, my stepson -- >> i want to name everybody i love. i love you. i love carl. i love todd. i love lamp. >> unbelievable. >> it was "anchorman." >> i love you, you love me. what are you, a cartoon character? >> i don't love apple, all right? i don't love companies. >> he loves lamp. >> i enjoy talking about them, though. i find them fascinating. >> you like scooby-doo?

>> never my favorite. as we go to break, watch bondstoday. we'll get l.e.i. in a few minutes. lot of fed speak. logan, cakashkari and schmidt a on the tape today. be right back.

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insurance. have been making 52-week highs but barclays cuts ups to underweight, 120, weak parcel demands, pressures from amazon, pressures from nonunion fedex, limited dividend growth. we will keep our eye on that as we will get earnings from them on thursday. we will get stop trading with jim in a minute. dow down 47.

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the business is on fire. he told me personally that they have not inflected, he was waiting to tell me until they had inflected, this thing is a rocket ship from 240 to 360, maybe if it comes back you buy some or buy some right now. >> wedbush's target 430 might work if the macro doesn't cooperate. >> his whole strategy, gary's strategy putting beautiful galleries all over the world is resonating. lower rates are going to help. got hurt bythe worst there was a housing turnover recession that hurt him. i urge people to think about this as an investment. i think it's very, very good. >> so tonight. >> the largest bank in europe, $5 bank, incredibly strong, has a fantastic bench. latin american way to play, business in america, one of the great bankers in the world, doesn't get enough credit. i think she's brilliant. >> big week ahead.

>> huge. oh, my god. >> pace yourself. >> huge, huge week. oh, wow. >> "mad money" 6:00 p.m. eastern time. >> big series coming up. >> when we return, fundstrat's tom lee with his tak tomanswers, it's good to havee markets as earnings season heats up. difference. at humana, we know that's especially true when you're looking for a medicare supplement insurance plan. that's why we're offering "seven things every medicare supplement should have". it's your free, just for calling the number on your screen. and when you call, a knowledgeable, licensed agent-producer can answer any questions you have and help you choose the plan that's right for you. the call is free. and there's no obligation. you see, medicare covers only about 80% of your part b medical expenses. the rest is up to you. that's why so many people purchase medicare supplement insurance plans like those offered by humana. they're designed

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♪ good monday morning. welcome to another hour of "squawk on the street." i'm carl quintanilla with leslie picker, david faber, here at post nine of the new york stock exchange. sara eisen has the morning off. starting a week off a little soft. dow is down 100. a lot of big industrial earnings headed our way in the next few sessions. yields creep up back to 414 on the 10-year and energy as well reclaiming 70 after a 6% decline last week. one of the worst weeks of the year. >> good morning. we are 30 minutes into the trading session. here are movers we're watching. striking boeing workers voting

on a new labor deal that could end the strike this week. the latest this hour, but shares are up 3.8% right now cigna resuming talks with humana, those stocks headed in opposite directions right now with cigna down nearly 4.5% or more. some moves in the activist space as well. kenvue a top gainer on news starboard has taken a position in the consumer products maker. we will break it down in just a moment. shares up more than 6%. take a look at shares of disney, announcing james gorman will become board chair next year and it will name ceo bob iger's replacement in 2026. more on disney's succession plan ahead on the show. >> a new note out by david kostin of goldman sachs today saying the s&p will serve up 3% annual returns over the next decade. that's far short of the booming gains of 13% from the last decade. and it comes as the s&p and dow do hover near record highs coming off the longest winning

streak of the year. let's talk about where this rally goes with fundstrat global adviser, and cnbc contributor tom lee who raised his target to sympathy 6 k. good to have you. i loved your note the other day looking at what s&p revenue has done in the face of declining inflation and your general point real revenue has accelerated and that kind of explains why equities have been so resilient. >> that's right, carl. as you know, many investors and pundits thought as inflation fell and cut in half in the last two years, that would cause revenue growth not only to hit a wall, but that earnings would stall but instead, s&p revenue growth is going to be over 5% this quarter and on a real basis, that's over 2 plus 2% and that's the strongest, really one of the strongest numbers in more than two years and it is a high quality earnings season so far and you know, close to 80% or actually more than 80% are

beating earnings so far. it's a good beat season, but it's early. >> right. and how much of it is due to financials is any kind of tailwind, although we heard various comments about this, if a fed tailwind does exist, is it likely to affect other areas of the economy as much as the banks? >> well, you know, in your opening comments you talked about industrials and that's something to watch because last week financials reported and it was, you know, pretty much universally better than expected and financials are doing really well year-to-date. but the other group that's very sensitive to the fed cutting would be industrials and there's a lot of industrial reports this week. it's about a quarter of the s&p. i would say so far so good. industrials are doing well in the face of an ism kind of at rock bottom for two years now. >> tom, how much would you ascribe the recent momentum to aspects of the election as that draws near just over two weeks away? >> i think that's been a

dynamic. i mean, i've been fooled by seasonality because i figured from september to election day markets would be very tentative because this is an extremely close race. this is a coin toss according to nate silver. something that stan said last week might explain that markets are betting republicans can take the senate and that actually could ignite animal spirits. so there may be underlying momentum that the republicans take parts of congress and that's why markets are bullish. >> are you at all worried? there were comments out of german ppi down 1.4 year on year but there were ancillary commentary about worries about a reflationary period, largely due to geopolitical events. how worried are you about that? >> well, i think headline cpi could get affected because oil is -- oil moves dynamically, and

it has an almost immediate effect on headline cpi and transport costs have also spiked recently. part of it is seasonal. that affects headline. i think the market is going to be somewhat skeptical that could trigger a sustained reigniting of inflation, but i think the economic data is going to be a little confusing the next couple months. the boeing strike is going to affect the jobs report. but i think ultimately the fed is still on a path towards getting back to neutral and i think that that should be the focus and that means, you know, stocks, which have been strong, are really still a buy the dip market. >> i'm curious, tom, in the intro to the segment carl outlined what goldman is saying this morning world ith regard t longer term they may face from other asset classes if as goldman says the s&p delivers a return of 3% during the next ten years.

it could face competition from potentially treasure yields which are at 4%. how are you kind of thinking about just the overall asset allocation in light of some of these potential changes in just the overall dynamics of the market? >> i haven't seen the goldman report, and i'm sure it's thoroughly explained. to me a 3% nominal return for the s&p, which is basically inflation, tells me that the p/e multiple in their model must be contracting because s&p earnings should be inflation plus gdp growth, let's say that, you know, six, plus buybacks which would be eight and if there's any multiple expansion you should add to it. i think they're talking about a derating of the stock market. i'm a little skeptical of that because last week i was at a very large advisors conference, and i polled the audience, it

was close to 400 people in the audience and asked, how many of your clients are over allocated to stocks, and i saw one hand. and then how many feel under allocated to equities? as you know a lot of stats show there's no cash on the sidelines or whatever. i would say close to 80% of the audience raised their hand saying their clients have been avoiding stocks for the last two years and feel under allocated. to me, that points to stocks having better than expected returns. goldman it's a ten-year view so they could be right. >> it fits with your view a few weeks ago about margin debt, does it not? >> that's right. the audience response was congruent to what we're seeing. a derisking in the last four months in the face of a market that's been relentlessly rising. i think there's been a lot of macro skepticism that triggered by fears. i've been fooled by that.

i thought markets would stall. they've been strong. to me the market is the signal. >> great discussion. way to start out the week. tom lee, fundstrat. >> a lot of activist news. kenvue a top gainer, starboard value taking a large stake in the company. shares have underperformed since the unit spun off from johnson & johnson last year. it comes two weeks after kenvue amassed a roughly billion dollar stake in pfizer. elliott investment management and southwest airlines are in talks to settle their months long proxy battle with a potential deal that would give elliott, quote, significant repu representation on the board of directors. it seems like based on some of the reporting that's out there they would cede control, get potentially a spot on the board but not a controlling -- enough to kind of control the board which has been their whole m.o. throughout this whole --

>> they started with ten seats, lowered that to eight because the size of the board became smaller. obviously, eight would give them control if they were to get all eight, which seems unlikely. but you have to assume -- settlement is always a part of these possibilities as we point out many times. this is a rarity for elliott going at all first one they've had since 2017. arconic. this is a busy season as you know. you cover this stuff as well. i mean, you have nominating periods or director nominating periods opening up. products open. cvs opens in january. obviously, those are two we've been following. pfizer another. these are large cap companies and starboard seems to be pretty busy. if kenvue is another name they're considering. find out more tomorrow. jeff smith is going to be my guest on "squawk on the street" for an interview from -- our

annual interview from the active passive investment conference. by the way i'm hearing there's more out there as you might expect as well. elliott, typically the most active of the activists. we talked aboutsouthwest. not sure if they've got more coming. never a surprise if they do. >> them and starboard typically the most active out there. i think we have a chart from barclays which shows the magnitude of activism this year which has been high so you see that's year-to-date i believe through june there. higher than year-to-date historically, but the number of board seats that activists are winning this year are below historical kind of averages. so there are definitely more active, winning less. i don't know if that has to do with the universal proxy or things going to settlements that don't include as many board seats as they may have historically gotten because historically you don't have the universal proxy, you don't have that ability to pick and choose, you don't have to put as many people on the board with the universal proxy. you can kind of put one or two

as opposed to the full slate if you win a proxy fight. >> interesting. most of the arguments being made are about operations, you know, operate better. cvs figure out what you're doing in health care, hire better people. whether it's kenvue. i don't know the argument yet. or pfizer. get your costs under control. these are longer term in some ways. they may see a turn in the stock price if they start to show some evidence of pursuing what the activists want in that regard, but it's not about sell yourself or split yourself up. >> which may have to do with the election by the way. to make those demands when you don't know what antitrust environment is going to look like down the road. i wonder if the kenvue defense will be we are enough. i will have to ask jeff smith. >> that midwestern humor. >> got to throw it in every now and then. a road map for the hour. bitcoin hitting three month highs as we get closer to the presidential election we were talking about it. the key races crypto pacs are

targeting in the final stages. plus boeing shares are up this on that tentative deal to end that strike by its machinist. we're going to give you the details straight ahead. >> new announcements around disney's succession plans. got an all-time high on nvidia. "squawk on the street" is back in a moment. tamra, izzy and emma... no one puts more love into logistics than these three. you need them. they need a retirement plan. work with principal so we can help you with a plan that's right for your team. let our expertise round out yours. 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

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guest says there is a good chance results will not play out until after election night with the expectation of possible recounts and litigation. what should investors be looking out for. joining us is pimco's head of u.s. public policy, livi cantrell. i think about how you described the race a few weeks ago calling it a knife fight in a phone booth and wonder has any poll done anything to move you off of that thought? >> no. nice to be with you, carl. that's exactly it. it is a -- it's a metaphor maybe too graphic but this is going to be an incredibly close race, if polls are correct. we also remind our clients that while there's some pretty significant polling that favored president trump in 2016 and 2020, similarly, pollsters actually underestimated obama's support in 2012. polling is symmetric but if the polls are more accurate than not, this is going to be an

incredibly close race. it will be decided at the margins meaning any ma are beginal event over the next two weeks could have an outsized impact on the election result. >> do you go along with the idea that the market may be pricing in a trump victory if you look at cyclicals, small caps, bitcoin, some of these republican basket instruments of course we have the benefit of not having to trade the election because we're long-term investors at pimco. the market does seem to be pricing in maybe a little bit of this trump bump if you will. however, how we're guiding our clients, carl, is that this is very -- it's too close to call to have really any high conviction either way. we basically put this as a coin toss at this point and no polling over the last, you know, several days or weeks have sort of changed that calculus. >> what about in terms of the deficit and the candidates' plans and their impact on the deficit and how that's kind of trickling down into a potential

risk premium in treasuries right now? >> i laugh because neither candidate has really talked about the deficit or at least very seriously. in fact, the initial conditions for the deficit are very high. i think this is something people don't really appreciate. we are looking at 6.5% deficits as a percentage of gdp regardless of who wins and that, of course, is before any policy changes. it's before the extension of the trump tax cuts. we think it's a partial or full extension of the trump tax cuts or any new spending. deficits are likely to increase. we kind of, you know, are glibly saying that deficits are the biggest loser in november regardless of which candidate wins, and to your point, that's exactly right. we think as a result the term premium, the premium that investors require to own longer term bonds at the end of the yield curve is likely to reassert itself. you see a little bit of this.

it's basically the normalization of the yield curve and we expect that to happen regardless of who wins. >> libby, you spent a lot of time in your last note and a good service you're doing here, reminding people we're most likely not going to know the outcome of this election not on election night as perhaps we've grown accustomed to through the years. what is your expectation in terms of how many days it can be if it does remain close not to mention the possibility if trump were the loser will contest the election for weeks in terms of the electors being certified and on from there? >> yeah. again, if history is a guide here, it is very likely that we will not know on election night and if, again f this election is as close as polls suggest it is, we are likely not to know potentially for days and that's because this election could come down to pennsylvania. i know you all have talked about how critical pennsylvania is. it is the most important of all

of the swing states. if it does come down just to that state, again, possible, then we likely won't know until friday or saturday because if we see the sort of same surge of mail-in voting we saw in 2020 at least, pennsylvania is very slow to count those ballots. they can't start even processing those ballots until election day. again, kind of getting into the nuances here. it is important for investors. it means we probably won't know certainly the night of the election, but potentially even the day after. the only thing i would point out here we may not know the control of the house either. this is something that maybe is less reported, but because california, kind of the majority may go through the california swing districts in the house of representative, california, is actually quite slow to count as well. that just means that there will be this sort of prolonged uncertainty. doesn't mean anything nefarious is going on. sort of the wheels of democracy

are working albeit slowly. we think that markets really need to be aware of this and again, understand the understand is probably the more certainty the days after the election. >> we didn't know until saturday in the last cycle. this cycle is interesting in its own way. look forward to touching base with a lot more frequency. thanks so much, as always. >> thanks so much. >> a key part of this election cycle millions of dollars flowing in from so-called crypto super pacs as bitcoin trades at fresh highs. mackenzie is here. she has some of the latest numbers for us. >> david, fresh election data shows with two weeks to go until the general election the crypto industry donated mostly to vice president kamala harris and a mix of tight house races in september. employees from crypto venture firms excel gave more than 500,000 and chris larsson has donated more than $11.7 million to two-packs supporting the vp's

campaign making larsson one of the crypto industry's largest donors this cycle. fairshake, one of the stop spending pacs is targeting close house races. the committee gave out nearly $29 million in september a lot of that cash went to house races in new york, in everynevada and california. 72% of those contributions went to democratic candidates. the 2024 cycle political donations from or supporting the crypto industry reached around $190 million and so far crypto groups have spent over $130 million of that cash in congressional races for this year's election including the primaries. meanwhile, spending by the crypto industry to donald trump has slowed down. new filings show the trump committee received $7.5 million in crypto donations but the make america great again pac shows no fresh contributions for september. david? i'll take it thank you very

much. speaking of the election, tune in to cnbc's special coverage on election night here beginning at 7:00 p.m. eastern time on november 5. still ahead this hour, your money your vote road trip. to brian sullivan with a preview. >> hey, carl, thanks very much. we are here in erie, pennsylvania, one of the key cities and countyiies and key state and talk about the economy and energy and how they all kind of relate to how voters may not only feel, but how they may decide the your money, your vote road trip coming up ain couple minutes. "squawk on the street" back right after this. ♪ (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.

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the sooner you talk to your doctor, the more options you may have. visit amyloid.com for additional information. welcome back. possible light at the end of the tunnel for boeing. workers voting on a deal this week and shares moving higher up more than 4% right now. phil lebeau is here with the latest. >> i think investors are optimistic that perhaps boeing will finally end this strike or the machinists will end the strike on wednesday if they vote for this deal. it's a far richer deal than they

rejected by 96% last month. how much richer? look 35% over four years is what's being offered as the wage inc increase. originally 25% over four years. the ratification bonus up to $7,000. a $5,000 deposit one-time deposit in all of the machinist' 401(k) accounts and the bonus will be at least 4%. the iam leadership which was really slapped in the face by the vote from the union to reject the last contract by 96%, they are not recommending this deal nor are they telling the union it's not a good deal. basically stepping back and saying you make the decision here. whatever decision will have huge implications for the bottom line for boeing. it's estimated the company is losing about a billion dollars a month. we will find out a little more in terms of detail about where the strike is impacting boeing, how much it is impacting boeing that will happen on wednesday.

that's when the company reports its q3 results before the bell. carl, i'll send it back to you. >> thank you very much. phil lebeau. boeing trades at half its 30-day average volume of 90 million shares. one of the names helping the aerospace and defense etf that tracks them. all-time highs today includes a bunch of names like raytheon and lockheed. spirit is on space for the best day since june 21st. after the break the news on the succession front for disney. what investors need to know after this short break. (man) look at this silly little sailboat... 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

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welcome back. i'm silvana henao wet your cnbc news update. defense secretary lloyd austin announced $400 million in new weapons for ukraine today during an unannounced visit to kyiv. austin met with president volodymyr zelenskyy and ukrainians military leaders in a show of u.s. support as russian forces gain ground in eastern ukraine. the biden administration proposed a new role today that would provide women with private insurance access to over the counter birth control pills and other contraceptives at no cost. the rule expands a federal mandate requiring insurers to cover preventative care services for free. the white house says the move would expand contraception coverage for 52 million women if the rule finalized it would come

in effect in 2025. and chick-fil-a will soon serve up hot cast tv shows, games and other entertainment alongside its chicken sandwiches. the fast food chain says the fam family-geared digital playground is as customers shift away from dining in its restaurants. it launches november 18th. carl? >> thanks. silvana henao. about an hour into trading. midmorning chop here. s&p went positive but now down about 10 points. 10-year did hit its highest levels. record highs for gold. as we mentioned earlier the s&p coming off the longest weekly winningest streak of the year. 26% year-to-date. note from goldman forecasting a 3% annual return over the next ten years down from 13% in the last decade. our senior markets commentator mike santoli fielding questions about this one.

>> sure. >> on calls this morning. >> it's traditional math gets you if you enter the market at 22 times forward earnings after a period of above average returns with some assumptions about how the economy is cyclical and things are mean reverting. i find it interesting, in fact the trailing returns are stunning. i was looking last week at the 25-year annualized return for the s&p 500. it's 8.5%. 25 years ago you were buying into the almost very peak of the biggest investment bubble we've ever seen. and so it's sort of the market is kind of bailed you out over that period of time. five years ago, the total return from five years ago, 16% annualized total return. now remember what happened in the interim five years. two bear markets, a global pandemic and now you still got 16%. so if there is this pendulum swing and ebb and flow of returns it makes sense. goldman using a stringent valuation standard, cyclically adjusted p/e. they also fascinatingly said the extreme market concentration

right now is a reason why they think returns will be lower assuming huge dominant companies don't retain their advantage over long periods of time so you have to assume that all that market cap and a handful of great companies is going to receive. i'll make one more point, a complete counter movement of argument to this. bofa, just last week saying the higher quality, less cyclical nature of the s&p 500 right now somewhat justifies this elevated valuation. it just isn't the same index we're comparing it to from 2004 when it was like energy and financials dominating or from the longer path of history when it was much more cyclical >> how much do you think investors, you know, use this type of research and reallocate their positions accordingly? i ask because that would have implications for other assets like treasuries, cash, alternatives where you get that equity exposure but if you're concerned about, you know, the

current kind of players in the market, >> yeah. >> reverting to the mean you may seek alternatives. >> i don't think stay-at-home investors have a very sophisticated forward looking return expectation, but they have a feel for like things have been good, maybe we shouldn't bake that in. institutions and professionals i totally agree this is the baseline case for why alternatives are popular because all the pension and asset allocators will see they can't count on the market kind of doing their saving for them over the long term. the other piece of it just for equities, i think it also builds the case for things like dividend growth investing where you say fine we have a 1.3% s&p 500 dividend yield right now. that's not going to give you much. if, you know, kostin is saying you're going to get a percent and a half on top of that from price appreciation, if you buy dividend growers that can outperform just the buy and hold the index. >> the main takeaway i get is that 8% number over 25 years, the fact that really you're just

buy and hold the index really all you need to do. >> if you have the horizon, absolutely. in other words, nothing about -- look we had a lost decade after that -- >> you did. as long as you didn't need the money. >> if you didn't need the money. if you did and got cut in half on your retirement date in 2008 you were in trouble. >> brutal. >> thank you. >> some news on the succession front at disney this morning. really the key news is the change in the chair at the company that will take place on january 2. ga james gorman long-time ceo of morgan stanley, who oversaw that succession planning of ted peck to replace him is going to be front and center in the succession because he will be chairman taking over from mark parker who has been chairman and on the board for the last nine years. parker former ceo of nike that company under its own transition

involved in that as well and so certainly one would imagine taking more time for that news as well that they will not announce a successor to bob iger until early 2026. mr. iger himself not leaving the company as the ceo until the end of 2026, but they do want to leave a decent amount of time, obviously, for his successor to sort of move into that role and train so to speak. >> if we want to take lessons from what gorman did for morgan stanley and potentially apply them to disney one of the key tenants of that was just tell graphing that he was going to retire ultimately, and then following through on said retirement later while also making it clear to the street and to the market that these are the succession candidates, there were three of them. >> there may be three at disney internally. maybe a bit more than that. it's kind of an interesting similarity at least to what

happened there. >> and you don't want to -- i guess, i would assume don't want to name them too far in advance because then so much can happen that, you know, changes the marketplace and changes with those leaders in particular, so i believe that at morgan stanley, it was about a year or so where it became more formalized before he ultimately named ted pick and then, you know, he remained chairman at morgan stanley but just for a year to kind of help with that transition period. so we will see if the same thing takes place at disney. a lot of people see that as a very successful succession planning. if that's the way they're thinking about disney. >> carl, the key is that iger is going to leave again. he will be 74 years old. i mean -- >> whatever you say, david. >> full believing this is the end for him as well. >> sailing to do. meanwhile, berkshire hathaway increasing its stake in siriusxm. the conglomerate holds roughly 32% of the stock.

it's been a big under performer this year up next we will check on a different berkshire name. apple 230, almost 236 on new data on iphone demand. stay with us.

from economic data to earnings it's big a big week of the wholistic view of the consumer. find out how that -- find out how to follow the money tune in to our market navigator segment on "power lunch" at 2:00 p.m. earp time. you have... the fearless investor. the type a cpa. the bootstrapper. the bootmaker. yeehaw [narrator] but many do have something in common. we all trust schwab with our wealth. [narrator] thanks to our award-winning service, low costs and transparent advice. every day, over a million multi-millionares trust schwab with more than two trillion dollars of their wealth.

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. some warnings across the street when it comes to iphone demand. our next guest taking the other side arguing his channel checks assure of a recovery demand following the initial weeks post launch. jpmorgan securities analyst joins us now. he has an overweight, price target actually is 235.

i don't know, if you're going to be positive on the stock. that's where the stock is right now. >> hi, david. >> hi. >> thanks for having me. i think our price target is 265 just to be clear. >> okay. good. appreciate your clarifying that. as for, you know, we get so many different reads from so many different analysts and different data sources. what are you seeing in the data that gives you some comfort? >> sure. what we've seen more recently and you talked about it, the initial weeks that show weak momentum in terms of iphone orders starting out of the gate. what we've seen is a recovery since then. really rationale in terms of what's driving that when we look at consumers who upgrade to like an iphone 15 the biggest cohort appears to be the iphone 14 users. sort of tends to be a cohort that drives that initial momentum and really what happened is you didn't really get that momentum this year

because apple intelligence was a bit -- so the tech savvy consumer upgrading every year there's no rush to order and what we've now said since then is the orders picked up and in line with iphone 15 if you consider supply this year is a bit better for apple overall with the supply chain being more normalized what you're seeing is high single digit it demand in 16 over 15. >> does it confirm the view of some who believe there will be a surge in demand when apple intelligence is available and are you amongst that group? >> yeah. no definitely. so what we are hearing from the supply chain is apple itself is quite positive as well as i think overall consumers are also waiting to see more of those apple features as well. particularly as you can imagine

a lot of consumers go into the store experience the device hands on and opt to buy the device. there will be a pick-up in momentum from our expectation. remember this launches in english speaking countries this year and then more staggered into next year in the other regions, which is why we're expecting more of a single digit it increase in volume in the iphone 16 series, but a bigger step up into iphone 17, where you have a broader launch across wider geographies including the international markets. >> and are you expecting that for iphone 17 to be more immediate or do you expect it to be kind of a similar pattern of wait and see from a consumer demand standpoint? >> yeah. what we're seeing right now if you try one of these 16 device, there's a bit of change in consumer behavior that needs to happen. you need start relearning and engaging with siri to use these fierce. if you go to iphone 17 the

consumer behavior would have caught up and you would see more easier adoption curve on that front. so we do expect iphone 17 will have a more imminent adoption to apple intelligence and consumer behavior to using siri as their global approach on searching for data across their device, but also searching for general search being more diverted to siri than the traditional search engines. >> we mentioned earlier this piece in the journal with tim cook reiterating their classic second strike advantage history. i do wonder what features of apple spell intelligence you th the key driver demand when it comes? >> yeah. the way we're thinking about it is first and foremost, it's about increasing convenience of you as a consumer using your device, think of it as looking for data across your phone, particularly with all the integration across the apps and capture the data on the back end, searching for things in

your photos, classifying your photos, a lot of sort of convenience features you can automatically see driving a lot of improvement in the consumer experience. the second level will be app integration. integrating siri at the app level to the different native apps and third party apps to drive a lot of the control of the apps to siri itself. that would be the second level of features we expect to see. when you think about again like the -- when investors ask for killer apps one thing to note is a lot of the processing needs to be on cloud itself and apple focusing on ai on the device. in a lot of cases those killer apps will be what gets processed on the clouds with the partnerships that apple has rather than through and on device. that's how we're thinking the features. get access to both but really the focus from apple itself is on the device ai and the convenience that offers you in the long run. >> all right.

appreciate it. thank you. >> thank you. thanks. still ahead, a your money your vote election road trip. let's get over to brian sullivan and he will tell us what's coming up in this hour. brian. >> yeah. we're in the first part of that graphic, david, which is erie, pennsylvania. town square. proud town with a proud manufacturing history which is undergoing a big economic shift. coming up after the break, we will talk a little bit about an energy plays into all of this and talk about the economy and what people are saying about the way this whole thing may go. quk tngp xtn ne o "sawonhe street."

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there are 981 different companies that are energy-related in this state. about 273,000 jobs. and 11 companies energy-specific to erie. you hear about the candidates talk about fracing, about this lng pause on new export terminals. some of those jobs may flow back here in a town that could use a nudge, let's call this. so, we look at unemployment, right? erie's unemployment rate is very good, actually. it's a little bit higher than certain other parts of the country might be. but it's lower than it was just before covid hit in december of 2019. erie county had a 4.5% unemployment rate. of course, it spiked during covid. it's now below that. it's at 4.3%. some of that change coming from a city that is working to change. in fact, what they've said is we've kind of gone from manufacturing to what some call eds and meds.

meaning, education, we have a college behind us here, gannon university, along with medication, health care, transitioning from manufacturing to more education and health care related jobs. the unemployment rate better than it was four years ago. now, what is the crazy thing, guys, about erie? well, in is pretty amazing, okay? we talk about all these swing counties. so, erie going back to 1980 has selected, voted for every president since 1980 except for one year. 1988 they were republican with bush, then they made a big swing to barack obama in 2012. then they made a huge right turn to donald trump in 2016. then they made a shift back to joe biden in 2020. but those votes, guys, all within 1% in 2016 and 2020. and how people feel about the xhid and their own personal prospects will certainly do a lot to determine what they do at the ballot box in 15 days.

>> so, brian, what's your sense in talking to people there? obviously just in an informal polling sense, how are they reacting to the upcoming election? >> so, what -- okay, i'm glad you asked that because we don't just spend our day sitting here in front of a camera in a park. we were here all day yesterday going around to as many places as we can, we had beer, doughnuts, whatever we could, it was football sunday, number one. they all want it to be over. everybody we talk to is like, just let it be over because every commercial break is political ads, whether it's the presidency, senate, local races. it's just like, please, let it be over. i will say this, there's no judgment calls here, but we drove around extensively yesterday and doing the eyeball stuff in the city of erie, where we are, a lot of harris stuff, right? a lot of harris stuff. occasional trump stuff. you go about three miles outside

of the town into the county area, some neighboring towns you'll see about the same ratio the other way. trump and then harris. it's really -- everybody we talk to says, this is going to come down to who comes out -- i will say this, i talked to a really nice plumber and his family yesterday in a brew pub. he said they're kind of proud of the fact that erie, which, you know, listen, had a -- was a big manufacturing capital, guys, and they're really working hard to reinvent themselves. they're doing a good job but they still have some work to do. they're really proud of the fact that their city has become this bellwether and this important metric because it doesn't get as much attention as the philadelphia or pittsburgh might in state. but when it comes to the election, erie certainly punches above its weight. >> yeah. real quick, though, brian, what have they been doing in erie in terms of, you know,

repositioning the economy, so to speak? >> eds and meds. education, like gannon university behind us, and others, and medicine meaning health care, hospital system, whatever. there is still big manufacturing. the local ge locomotive, part of our parent company, making an electric locomotive about a mile east of where we are. the manufacturing base has been gutted and seen a population decline of 40,000 in the county over the last 30 or 40 years. trying to transition to some new energy, which the,i.r.a. and stuff may health but education and medication has to replace that manufacturing base. >> obviously a story that plays out in a number of other places around the country as well. looking forward to where you're going to be next. great coverage, brian. >> grand rapids on wednesday, thank you. >> there you go, grand rapids. there's his route. look at that. i like it.

>> it's like a great lakes route. >> and kenosha, too. all right. great. brian sullivan from erie, pennsylvania. and we, of course, are right here from the new york stock exchange with the s&p down about 0.34%. you can see the nasdaq also a lose other this session. we have a lot more market vegeoroutrghahd. ping experience. it's the only site that always connects you to the listing agent. feels like a work of art! (marci) what about the app? (luke) uh-oh! (marci) wow! went all in on gold. (vo) ding dong! homes-dot-com. we've done your home work. when you're looking for answers, it's good to have help. because the right information, at the right time, may make all the difference. at humana, we

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good monday morning. welcome to "money movers." i'm carl quintanilla with leslie picker at the new york stock exchange. could the s&p return 3% annually over the next three years? we'll get the street's reaction to this big call out of goldman today. oakmark reveals the most recent trades, including how he's thinking about names like merck, american express and cisco. elon musk's $1 million a day giveaway. why pennsylvania's governor says law enforcement needs to take a look at that. right now, though, at this hour, we have markets mostly in the red today. you have the dow down about half a percentage point. the nasdaq down 0.2%. the ten-year treasury yield hitting 4.16%,