report saying elon musk had secret conversations with vladimir putin is raising concerns it's friday, october 25th, 2024. "squawk box" begins right now. good morning, everybody. welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. not a crazy morning for earnings, but the market gets durable goods earnings at 8:30 a.m. eastern time. ahead of that, we see green arrows dow futures up 85. s&p up 15. the nasdaq up 56 the nasdaq managed to snap a three-day losing streak

yesterday thanks in large part to tesla the dow is now looking at its longest losing streak since june all of the major averages, dow, s&p and nasdaq are on pace to break a six-week winning streak depending what happens today the ten-year is below 4.20 it is 4.196. the two-year at 4.06 we have been watching those clos closely. gold is down $14 $2,734 an ounce. oil prices intraday oil is up .50%. $7 $70.51 a barrel. and shares of capri holdings and tapestry moving in different

directions and the federal judge blocked the deal tapestry planning to appeal the order and respond to the judge's decision saying the decision granting the ftc granting an injunction is incorrect on the law and facts. tapestry and capri operate in the competitive industry that is dynamic and expanding and fragmented among the established players and new entrants we face pressures from lower and higher priced products we believe this is pro-competitive and pro-consumer former rivals announced the $8.5 billion deal more than a year ago. the ftc decided to sue to try to block it in april. i don't know what do you think? >> hard to get any deals

through? is that the message? >> maybe the question is there was a view that a judge was not going to look fondly on the case. when this was first announced, folks were using this as example of the overreach by the ftc. now the judge saying the ftc may be right. >> bags i've had issues within the past. >> against all bags? >> i'm not going to have one i have learned tapestry is coach, coach does not meet the level of what i need to please someone if i were to buy someone a bag. i think hermes might i saw hermes bucking the trend yesterday. that came out. they had great bags. do you know what a birkin is

>> i'm aware of a birkin yes. >> perhaps that might make the grade. >> you have to get a second mortgage with a birkin >> yes capri, pants what are we talking here the fallout? i don't know what i think of it, andrew, to be honest with you. i can't help it. those were my thoughts >> you asked for the thoughts. >> i tell you -- >> i asked for the thoughts. >> -- sometimes that might be a wrong thing. >> can i say never mind. move along >> yes, you may. what bags do you like? >> i told you what baggy i brot in here. i'm not a bag person. >> gucci, andrew >> those are okay. >> do you have you don't have a murse >> just a fanny pack >> the fallout of the boeing

machinist strikes. spirit aerosystems is now laying off workers if the boeing strike stretches beyond november 25th the union rejected the latest contract proposal earlier this week and if you don't know, spirit makes fuselages for the boeing's best selling 737 max as well as other parts and has already been weighing temporary furloughs starting next week. burger king parent restaurant brands and yum brands known for taco bell and kfc brands are pulling onions from the selected restaurants after the e. coli outbreak tied to mcdonald's no cases have been tied to burger king or yum, they are doing it out of a abundance of precaution in the meantime, elon musk

adding another $26 billion to his wealth yesterday a surge of tesla stock and now worth $260 billion according to forbes the wall street journal reporting he had quote secret conversations with vladimir putin. among other items, the paper reports that moosusk an vvoided operate the satellite over china. it is making early noise this hour, eamon javers >> reporter: it is, andrew this is an important and astonishing story from the wall street journal and enormous scoop by them. i should say at the outset, cnbc has not been able to confirm all of the information in the story. here's what the wall street journal is reporting this morning as you suggest, musk has

been in regular contact with vladimir putin since late 2022 they are also saying that discussions included personal topics and business and geopolitical tensions saying putin asked musk not to activate s starlink over taiwan as a favor to xi jinping. this story is sourced to a number of officials. american, european and russian officials confirming the existence of these conversations which have not been previously reported before. i spent the evening last night after this story broke talking with several former high ranking u.s. intelligence officials. here what i can tell you their reaction was overnight they are saying it is unclear if musk has disclosed his con tact with vladimir putin as required under his top secret u.s. security clearance failure to report contacts can

be grounds for suspension and in extreme cases if it is deliberate failure to disclose contact, the person could be charged with criminal charges. the u.s. maybe trying to intercept putin's communications and muskcould have been recorded here, depending on the technology used. the nsa would normally refer to musk as u.s. person number one in any intelligence reports in the concerversations if his identity is relevant here, they may reference elon musk's name in any reporting around any conversations between the two men that would have been intercepted by u.s. intelligence we don't know any of that at this hour. there is still a lot we don't know, including the contesconve. musk has been active on his social media platform this morning. i have not seen comment from

elon musk. we'll be eager to hear from him as soon as we can as to what his intent was in the conversations with vladimir putin. certainly, guys, this morning, enormous questions raised why elon musk has been in contact with vladimir putin. >> eamon if you go back to 2022, , ther was a moment where ian bremmer made a comment about elon musk talking to putin at the time elon musk came out and denied it you have the interesting piece in the journal story where the kremlin spokesperson is con fi firming there was dialogue between them, but suggesting the dialogue only took place once. i'm not saying once is good or bad. he is saying it's once the story itself is suggesting something very, very different unless you think we're

misreading it. >> reporter: exactly i think that's exactly right fascinating the kremlin would even confirm the single c conve conversation they are on the record of one conversation and no more than that that's the russian story here. the wall street journal reporting regular contacts with the two men since 2022 and the question is, again, andrew, what was elon musk's intent why does he need to reach out to vladimir putin cle clearly, vladimir putin needs to talk to elon musk with the value of spacex and ukraine and the ba battlefield and ukraine. vladimir putin is a former kgb official there's just no question that vladimir putin would have been trying to utilize elon musk as an asset for the russian state the question is what was elon musk thinking he was doing in the conversations and what did he actually do in the

conversations? nothing beyond that general description of the content of the conversations though the question i have in my mind as reading that piece is whether or not the united states intercepted the conversations and whether people in the u.s. intelligence know what elon musk was saying to vladimir putin >> that is the big question. the other thing i was going to ask you is this idea in the article that because he has so much quote/unquote power insofar as he controls starlink and spacex and the government knew this, they were treading lightly on this. do you believe that? >> i do. that squares with my understanding of reality here. the u.s. government is in some ways in a box here, andrew they can't get to space without spacex the pentagon has a billion plus classified contract with spacex. we have u.s. government contracts in terms of starlink

communications around the world. all of that is important to the pentagon you saw boeing's failure to get the astronauts off the space station. it is not like we have reliable alternatives in the country or as many as we used to. that is a problem for the u.s. government this is a big, powerful industrialist in the united states on the scale we haven't seen in the u.s. maybe ever, but certainly in generations this is a person the u.s. government has to deal gently with according to my conversations with the u.s. intelligence officials last night, it is possible for them, if elon musk did not report these conversations. we don't know that if he didn't report the conversations under his clearance, it is possible he could be having a revocation of the clearance. if you are the u.s. government, with elon musk and his giant ego, do you drive him farther into the arms of vladimir putin by pulling his top secret

clearance that would achieve any good you saw what happened when joe biden hosted gm at the white house without inviting tesla that overt snub of tesla because they're a non-union shop that wrangled musk that event is what drove elon musk toward the trump campaign and his role in the trump campaign now if you are the u.s. government weighing all these things, do you go after the attempt, if possible, to pull his clearance? that's an open question. >> eamon, the big question for me was the idea whether or not he kept starlink from taiwan at vladimir putin's request vladimir putin, according to the article, suggested that it would be a huge favor to china if he didn't do that you look it up and there is no starlink there right now, but that's because elon musk wanted

a joint venture apparently taiwan won't allow joint ventures they said no taiwan is in the process of building their own satellite network because they felt uncomfortable with elon musk bec based on the past comments with china. how you sort that situation out and he said if trump loses, they may try to put him in jail. >> he was asked how many times he talked to putin he was asked how many times he has been in contacts with putin off and on the last couple years. i think he deflected that question at the time i don't know if he has any more -- >> he doesn't have top secret clearance any more >> right if it was only starlink access when it was discussed, you could make a case that's something -- i don't know -- obviously, it's

sticky should trump be talking to putin or anyone talk to putin to try to end this thing and have no more bloodshed i don't know what the right thing is or trying to evade the russian army >> reporter: the law is if you or the rule is if you have top he secret clearance, you should not be discussing with foreign powers the question here is did musk do that it may be he did do that and maybe there are people in the u.s. government who are aware of the conversations and aware of the conversations. the other question around the sk story, joe, who leaked this and why? this is a shot across the bow of elon musk. >> it is october thanks, eamon. coming up, much more on interest rates and what the latest moves could tell us about the economy. plus, drugmaker sanofi out

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welcome back, everybody. drugmaker sanofi topping estimates and earnings results those where due to strong demand for the blockbuster anti-inflammatory drug joining us now is paul hudson, the sanofi ceo

paul, what really drove things higher this quarter? >> well, i think we possible rely surprised everybody on the beat with the sales with the launches which is a revenue generation for the company. there is an overappreciation we stepped up performance across the board. the modernization movement is important and exciting people about it >> the business operating profit is what the street is looking at closely up 4.61 billion euro where have you seen profit and margin improvement >> our mix has changed since we moved to more specialty medicine we are becoming more efficient in how we deliver. we are operating with a.i. as we talked about before and using the new tools in manufacturing we are generally improving our ability to execute with a high degree of efficiency

we're delighted. you think about where we're right now. you mentioned on target to achieve $13 billion this year. we successfully launched the rxv vaccine which is a blockbuster we confirm that today. hemophilia-a everything is on track and we're excited. we are talking internally today about how we're accelerating performance and advancing the pipeline and modern eizing the company. it's such an exciting time >> i would like to show a longer-term stock chart. maybe a two-year stock chart up 30% over two years. when yyou came out and announced to wall street the big, significant changes that might take time to put through, there was real doubt on wall street. you see the drop over a year ago where things came down since then, the chart improved what is the reception you get

when you tell investors this is the long-term plan are they starting to be believerers? >> i think they are. we spoken before with guidance last october we did it because we believed our science was maturing fast enough and differentiated enough with 90% to 95% of the pipeline is first or best in class. we had choices we knew the long-term value creation was all about retaining ownership and accelerating what we were doing. we did the right thing and we, in fact, i would say come back faster than expected great news on the ms drug right out of the summer. i think that with all of the continued performance, sentiment is moving positively on the pipeline of course, we still need to prove it, but we are moving in the right direction. >> let's talk about dupixent

you had new news positive phase three data and spontaneous phase three. i had to look that up. that's an immune reaction where your skin gets inflamed and you get hives and welts that can occur over a long period of time what is dupixent >> dupixent is helping people ac across the world with eczema and now, of course, the u.s. and china approved copd. another 300,000 americans struggling to breathe and lives compromised. about the same with 300,000 patients there, too. we are unlocking this potential for the performance of dupixent. we predict double digit growth through 2030 that s

that is a high confident base with the tremendous efficacy if you have copd and it is not familiar to you, it is difficult for people these skin diseases are very hard to live with. often have emotional impact. we're just happy to bring new data to help patients get back to normal lives where we can you know, it's -- it's such an incredible immedimedicine we partner with generon. we are thrilled with how things are coming together with that. >> paul, part of the reason you beat expectations is the strong sales of seasonal vaccines i guess it is surprising we heard a lot of people saying vaccine avoidance has grown post pandemic >> the number of people who want to get vaccinated, you know, is lower than some years, but, you

know, the last five years have been the highest out of all the years. we took a benefit in phasing because you never know with flu through q3 and q4. similarly with rsv, the weighting with 50/50 with q3 and q4 we know what we have in our hands for. that's pretty incredible, but when you are dropping the need for an infant to go to hospital by 90%, then, these things quickly catch on we're delighted. the pull with the demand driven or vaccines with the incredible profiles as i said before, we wanted to advance the pipeline and make our launches successful particularly when they are first in class because they change people's lives the modernization and it was mentioned on the intro, separating our consumer business is a major step forward in a

pure play bio-pharma that bodes well for patients in the future and the company at the same time. >> paul hudson, thanks a lot for joining us this morning. >> thank you pleasure coming up, when we return, details of microsoft's ceo satya nadella's compensation package and why he opted to take less cash don't worry, he still got a big raise. "squawk box" will come right back >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com.

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welcome back to "squawk box. microsoft's ceo satya nadella giving up cash in the salary in the cyber issues that impacted the company that year. nadella still received a pay raise, but it would have been higher nadella received $79.1 million for the fiscal year that ended in june. that support from $45.8 million in the prior year. most of the pay is in the form of stock the request in reduction after the department of homeland security published a report following an independent report of the chinese breach of the email accounts microsoft disclosed that incident in july of 2023 in january of this year, microsoft said russian intelligence accessed the company's top executives email accounts as well i don't know i don't know what i'm supposed

to say i saw this story i saw there was a headline that said he asked to take less money in light of this and then saw that he made more money and i sort of tried to hold both ideas in my head >> it's not often you hear a ceo ask for less money i hand him that. >> a lot of times -- you know, my salary's $1 million a year. you look at everything else and it's like, $42 million if you take into account the other stuff. >> it depends on the stock given to him or restricted shares? was it stock options that have now come into the money because the stock has been up? 13.5% year to date look at the longer term for microsoft and see how high it has risen with a.i. and what they have done with openai five years is up 200%.

>> probably the best, one of the best >> satya nadella has been singularly responsible for massive gains in the stock for what he has done it depends were these restricted shares were these options that were granted? did that pay come in as a result of this? >> i will say we are often critical of executive compensation and i argue at the ceo level, there is not a market for those people at those numbers. >> i know. >> you say to yourself there is not another company to pay $70 million. in satya nadella's says, i think th if other companies would pick him off, they would. >> he has done things and made decisions. when you see a bad ceo, you see what he does. >> no doubt satya nadella is a good ceo. >> take a place with a bad ceo >> and they prioritize the wrong

things and not investing in the company from the shareholders to the workers suffered as ail re a result >> don't forget tonight ohtani and judge and you get nadella. they do different things and i want them here. >> they can do that with the advertising dollars that will be spent -- >> the direct market >> there are some ceos that have the board and the friends and they couldn't go anywhere else and making all this money. cases of value you're right >> i'm saying this may be one of those cases in a good way. >> i know you are. that took a lot for you. >> it does take a lot for me i have him a long time >> tim cook. >> same story.

>> for us. >> the powers that be? no. coming up, is fee ofnsthe best defense why palantir ceo alex karp wants america to play for defense. "squawk box" is coming right back >> announcer: executive edge is sponsored by at&t business next level moments need the next level network. e. 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! across global markets, data underpins every decision that is taken. at ice, we provide quality data and analytics across multiple asset classes. from fixed income, energy, commodities and equities, to areas like climate risk

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palantir and l3 harris announcing a strategic partnership to bring in the hardware to help the military improve systems. palantir's alex karp appeared on "closing bell" yesterday and called for more options. >> we should have a department of offense the other thing, i personal believe we have to have red lines and we should go ahead and violate them to show people how serious we are why do we wait until our enemies attack it doesn't make sense. it does not lead to peace. you have the paradox if you

oversave, you get poorer there's a paradox of violence. if you never use violence, the world gets more violent. i don't know why we wait until people get up and hurt us and kidnap us. last thing, if you touch an american citizen, we will go after you and your assets. we can keep on going for generations. we cannot allow people to kidnap and kill americans wantonly. we really need to change our footing on this. by the way, we're in a position to do it because our economy is the strongest in the world we're the only people producing a.i. we have the best ceos in the world and best war fighters in the world. >> just looking up how many u.s. hostages are still left over

there. i don't know we keep hear about calls for mod indi eration and restraint. we will talk to joe lonsdale at 7:30 a.m. eastn ertime. coming up, the interest rates and the economy. we'll tell you about those when "squawk box" returns >> four left

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welcome back to "squawk box. treasury yeelz have been rising, but in the last three months we have jim caron from morgan stanley. you are looking at the two-year at 4 jim, what do you think is really going on here and how much control does the fed have anymore? >> fell, that's a good question and good morning look, i think there are a lot of competing narratives out there one is the data got better since the fed cut interest rates we had a higher movement in gross domestic incomes retai retail corroborates that there's also the kcommentary around the trump trade tariffs and more expansionary deficit policies and all these things together. it's really not one thing.

there are competing narratives out there. we also have to recognize that people did buy a lot of fixed income when the fed cut interest rates and people got long and disappointed and had to sell there are technical factors, too. i can't assign any one thing for the explanation of higher yields it's a combincombination. >> i don't know if you saw paul tudor-jones saying gold and bitcoin. this stuff we're talking about not for him. >> i have a lot of sympathy for that essentially what i think he's saying and the way i'm looking at this as well is i think bond yields generally speaking are in a trendless range. they will move sideways over a period of time it will be dictated and governed by the fed policy and the fed is expected to cut rates. the yield move is likely to be contained at some level.

in reality, if you are trading in the markets and trying to, you know, have an allocation to bonds, you have to ask yourself what am i trying to capture? really, what you are trying to capture is just the coupon just the yield you are really not going to get a directional push or return to contribute because i think in reality a lot of the movement is priced based on fed policy expectations >> jim, i want to thank you for joining us this morning for your perspective on all of it it's a wild situation of what this is trying to telling us thank you. >> thank you coming up, nvidia still trailing apple in the market cap race the a.i. chipmaker stock goes up 25inheasthe nt% t lt remohs we're going to check out nvidia and the rest of the sector in today's edition of "squawk picks. we're coming right back.

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let's bring in our next guest to talk about nvidia and the chip sector. vivek, senior analyst. when you look at nvidia, it's good to see you vivek. i think there are two angles one is how strong are its customers and how strong is demand going to be and you've got, i guess, competitors to nvidia, that want to get in on the same business. on both metrics, you think nvidia is well positioned. there is still the leader and

the demand is still going to be strong >> good morning, joe i think the key is that the customers are in a race to rearchitect the data center and replace servers with accelerated servers. this moment had started a year or two ago and then as soon as we started to see the improvements in generative a.i. and large language models, which, by the way, the computer models to grow these are growing four to five times a year. this is not progressing every two years. this is technology changing four or five times a year we need to throw a ton of computing infrastructure and it is not just the processors, it is networks and updates and developers and bringing it all together in our mind, there is only one company that can bring it all together this is expensive, no doubt. we are going from capital

intensity for a lot of the cloud players that used to be 9% or 10% and now it is 15%. cap ex is growing 15% plus per year we do think this is very important for them it can open up new ref revenue opportunities and this build oul bidout and a lot more success-based bidout and, finally, yes, there is competition. but we expect nvidia to maintain its 80 to 85% market share and another 10% or so for these custom chips and a few percent for other players such as amd. >> you refer to as a generational opportunity i guess that's ten years, that will continue. there is some industry events you point to, taiwan's semi results, amd had an a.i. event all these things, what -- so you're saying all, avaga, micron, all these things

indicate is that's demand for nvidia's blackwell chips >> yeah, i think we have a few things that are coming together. first of all, customers themselves are being pushed by this private company openai on one side that is innovating rapidly, innovating closed and proprietary architecture and on the other hand, you have a company such as meta that is putting out large language models in a very open format, right? anyone can go and access their models so the traditional cloud players are having to take the lead from these two very important forces and this is not just a u.s. phenomenon we are seeing this spread across the world, where every country, region wants to be involved in setting up their large language model, you know, nvidia, there is a lot of large language models being trained in indian

languages. there are large long models being trained for all the languages and culture of the middle east. so i think this is the global phenomenon enterprises are jumping on board, you know, novo nordisk is deploying supercomputer using nvidia, it is a global phenomenon, but as i mentioned, that in order to be successful in this, you can't just be successful in semiconductors, right. you have to be successful in the underlying systems, integration technology and networking and optics and software and development and other important part of what you mentioned is you need scale you need to be able to work very well with the supply chain because this is not going to take just one player, it is going to take many different players coming together and putting out this technology with a lot of liability that's the only way to scale it across the broad base of cloud and enterprise and software entities. >> blackwell's fixed, that

didn't take long, right? and you expect the yield to get -- what does that mean, the yield will get better for blackwell? >> initially when they put the blackwell product out, there was an issue in just the underlying semiconductor, so they have fixed that and we are now expecting blackwell to go from almost nothing to at least three to $4 billion in the next quarter, going on to 10 to 15 and then 20 plus billion dollars over the next several quarters it is an extremely complex product. it is not just their product we need to see a lot of product improvements in the data center such as liquid cooling you have the whole village coming together in making this successful because without making this successful, you're not going to have the scaling of a lot of these large language models you're not going to be able to really justify the speed or accuracy and it is a virtual cycle. every time nvidia comes up with a better product, you have the software community, the internet

community, the cloud community, the enterprises coming out with applications to take advantage of it and it goes back and forth. this cycle can last for several years. and the one other point i would also want to make in terms of the stock itself, yes, it has had a remarkable run, but when we look at its earnings growth for next year that we forecast to be in the range of 40% to 50%, it is still failing less than one times the earnings growth if you look at the broader market, it is two times. the others are trading 1.5 to 2 times their earning growth so diluting the stock is still compelling. >> vivek, thank you. >> thank you. coming up, what do americans think ouabt tariff we have more results from cnbc's all economy survey and some of the findings may surprise you. "squawk box" will be right back.

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all right, welcome back, everybody. tariffs, foreign competition and protecting u.s. jobs are big issues in this election. we know what economists think, but what about the public? our senior economics reporter steve liesman joins us right now with new results from the cnbc all america economic survey. steve? >> this is interesting while economists we know generally condemn tariffs, the american voter more mixed and that represents an important change in public opinion here. asked if tariffs are a good idea because they predict u.s. jobs and companies, 38% say yes 27% say they are bad because they boost prices for consumers and businesses now, look at this number in the middle here. a substantial 36% say they don't know enough to have an opinion or they're unsure suggesting there is a broad swath of the public that could be convinced either way here. so, support coming substantially from republicans they are 52 points in favor of

tariffs. a big increase from the last time we asked such a question about tariffs. democrats minus 29 if you have a high school education, plus 19 post grad, minus 9 in support of opposing tariffs we last asked the question about tariffs in 2019 when there was a proposal to put 25% tariff on chinese goods. it is the best indication we have of this change in favor of tariffs by the public. may 2019, 40% of the public opposed it that compares to the 27% we see now who think tariffs are a bad idea interesting results from union households we just added this union factual we call it to the all america survey we should have added it a long time ago now that president trump is making inroads into the union households, we're following. you can see they're mixed. they have something to gain from protection, something to lose from the impact on export jobs

it seems clear the conversation has changed with former president trump imposing tariffs while he was in office and those tariffs left largely in place under president biden. now the former president threatening much more sweeping tariffs, that proposal not embraced some tariffs are part of the harris plan. >> can i just ask how you ask the question >> i can read it to you. >> five years ago, you asked, it was, you know, about 25% tariffs imposed on china what is it now >> okay, i have to find the question >> aren't you burying the lead >> what do you think >> 38 in favor and 36 don't know means 75% are either in favor of or not opposed >> think of the other way too. >> that is a big shocker. >> it surprises me >> i just saw this, i don't think trump -- i haven't seen that he's actually said that, but the notion of replacing income tax completely --

>> that's out there. >> i'm willing to give it a shot you know, just initially to -- >> can i answer becky's question here >> yeah. >> okay. >> i pay a lot i pay 60%. let's just try it. let's do it for a year i'm kidding, go ahead. >> we used to do it. 1890, right? did you read the article we may be having this conversation, you don't know, right. when it comes to taxes on products imported from other countries called tariffs, which of the following comes closer to your point of view tariffs on products from other countries are a good idea because they help protect u.s. companies and jobs, they are a bad idea because they increase the prices of many products that the u.s. consumers and businesses buy. >> we're not thinking is it a good idea to impose 100% tariffs across the board >> we don't have a specific proposal from -- >> i would say that probably -- i can understand that, a reflection that people are more

of favor in some potential tariffs. >> if we asked a specific number on a specific country? >> i don't know if that's the case or not. we have gotten used to tariffs >> it does fly in the face of the consensus thinking of most people in the media. >> most people in the -- >> that tariffs we know are bad and -- >> i would say it flies in the face of what business leaders would tell you though. >> and most economists and adam smith, anybody, knows that -- >> do you find it strange how much the republican party has changed on this issue, which -- the party of free trade. no, no, it is not -- >> many different issues, both parties are first amendment for the left, what happened? that meant something at some point. there is a lot of -- both sides have a lot, yeah >> okay. >> how about two years a two-year probation.

>> you realize, joe, that we have to go, but i must say that you realize the tariffs are an incredibly regressive tax. >> okay. >> so you, sir, would have a large amount to gain from that switch, just so you know >> maybe that's why i kiddingly said that. >> i want to be clear that we're talking about a very regressive tax. >> i got it. >> it is just past 7:00 a.m. right here on the east coast you're watching "squawk box" on cnbc i'm andrew ross sorkin with joe kernen and becky quick got a bunch of big stories to talk about on this friday morning. spirit aerosystems weighing furloughs or layoffs of hundreds of more employees if the boeing machinist strike continues to stretch beyond here is the date to look for, november 25th. spirit makes fuselages for boeing's 737 max as well as other major parts. it already has been preparing to temporary furlough 700 workers in wichita, kansas, facilities that could begin next week. burger king parent restaurant brands international and yum brands known for its taco bell, pizza hut and kfc

chains are pulling onions from selected restaurants following the e. coli outbreak tied to mcdonald's out of what they say is an abundance of caution wonder what rfk thinks about this, bill ackman thinks about all this he was a big burger king owner >> never liked burger king. >> you didn't. meantime, the richest person in the world, this is raising eyebrows, elon musk adding another $26 billion in paper wealth yesterday to his tesla shares they saw their biggest one-day gain to rally since 2013 as of this morning, musk worth $256 billion according to forbes the story that really is making headlines and raising eyebrows, of course, is "the wall street journal" reporting that he has been in conversations now for some years potentially multiple

times with president putin of russia and what the national security concern that those conversations may raise. let's look at the futures this morning we did -- we have seen some moderation and some gains this week but we're back in the green this morning. you can see the dow, we had individual names -- like talking about burger king and onions, but mcdonald's, one of the reasons we saw weakness earlier. boeing, the strike was not settled. so let's get to dom chu, because it is about individual movers, it seems, dom, in recent sessions >> sure, joe, becky, andrew, also about the consumer. we're going to talk about consumables, and handbags as well we'll start off with a couple of stocks moving big in opposite directions that's capri and tapestry. capri, you can see there, shed nearly half of its value while tapestry is gaining nearly just about 16, 17% this is all after a federal judge blocked tapestry's acquisition of capri on the grounds that it could create

higher prices for consumers for luxury handbag shoppers. capri is the company behind brands like versace and jimmy choo and michael kors. tapestry, that acquisition, would have paired those brands with coach and kate spade as well so antitrust grounds, these stocks are moving on that bit of news tapestry is adding to its year to date gains, now nearly 40% higher while capri is falling more than 55%. and analysts at bernstein this morning raised the target price on tapestry from $50 to $60. so a lot of moving parts here, but consumers very much in focus. deckers up around 14% after reporting a beat across the board in the second quarter. revenue improved by more than 20% year over year, largely driven by its ufgg and hoka bran shoes. it is expecting gross margins of 55.5% in that range. the stock is now up about 55% so far on a year to date basis. we're going to round things

out on the healthcare side with sanofi, up around 2.5 to 3% after better than expected profits and revenues in the third quarter. biopharma and vaccine sales, the major boosters for this company. the ceo paul hudson saying a.i. is helping delivery efficiency on certain products. made those comments on "squawk box" in the past hour. sanofi in the green. back over to you guys. >> very good we heard from sanofi earlier, as you know, dom, thank you when we come back, we will talk technicals. and later, palantir's co-founder joe lonsdale will join us to talk about the tech communicomm influence in the election and much more. "squawk box" will be right back.

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you think that at this point we may be due >> yeah, hey, joe. this year actually has been almost inverse to what we typically see seasonally speaking if you go back on a typical year and this goes for average years and election years, you see some weakness in february and march this year was very strong. typically april is one of the

better months. this year was quite weak and then you took away strength in july and august and this year july was weak, actually the first down year for the nasdaq 100 in july since 2007 and then that strength typically sets you up for some weakness in the september/october period, especially in election years as you get the pre-election jitters. and this year we have been quite firm in september, october, and so, you know, the setup here is we think in the coming weeks you're going to get that shakeout if we don't get it pre-election, which you normally get that would follow that pattern of a sell the news situation opposite of what we saw in 2016 and the other, you know, the reason that we think this shakeout is coming is really stems from the macro across asset volatility we have seen. we just saw the largest move in the dollar and decline in bonds we have seen in the last couple of years

if you go back the fall of '22, '23, we saw similar velocity moves in the dollar and interest rates, those led to 19% and 11% drawdowns for the s&p 500 and we're sitting here 1.5% drawdowns. it seems like the equity volatility isn't matching the macro at this point. >> i was thinking about 2016 too. i think overnight, we're down 800 points on the futures and by the next morning, after the election results were known, we made that back, and then the market went up for like six months didn't it? >> yeah. you're right we were down that night. if you think about the setup, we're weak into the election i think this year, with the market is in some ways pretrading, i think trump is the favorite by a lot of -- if you look at the betting markets and the way the bond market is trading. the setup is a little different here you could get that inverse

reaction either candidate if he wins, you know, i think it has been pretraded if harris wins there could be some disappointment there given what the market is pricing in right now. >> and you don't normally see this type of volatility in bonds, foreign exchange and then complacency in stocks. you think that's trouble does that mean you think you could part some money in fixed income to avoid this or since you think stocks will be higher by the end of the year, you just ride it out? >> yeah, i mean, that comes back to your time frame and, you're right, the markets rarely are concerned with the absolute level of interest rates in the dollar it is almost always about the magnitude and the magnitude of the move we just saw over the last two weeks, we only have seen that the fall of '22, the fall of ''2 were pretty meaningful drawdowns. i think you could get a balance in bonds here. but, you know, that's -- and that's probably a little bit of a better play over the next couple of weeks than stocks.

but i think stocks have a little bit of catchdown to what bonds and the dollar are kind of telling us here. >> what is gold indicating to you? >> yeah, i mean, gold is tough here we have been proponents of precious metals all year up until recently. they have been actually surprisingly outperforming stocks by a wide margin over the last couple of weeks and i think as of right now, it was the best year since 1979 when we look at gold, in the very near term, it is also vulnerable to us gold has a pretty high correlation or inverse correlation to interest rates and real rates saw a pretty sizable surge the last couple of weeks and gold has not flinched either we have gold as wide as it has been over the past couple of years and i think sentiment is getting overconfident in the gold trade it is similar to stocks. the trend is up, the long-term trend still looks good i think you have to be a little

bit careful chasing strength here over the coming weeks. >> what would the gain between where we are right now and the end of the year and the s&p, what would that translate into even if we do have a pocket of 5%, 5% plus down draft and comes back and closes higher what is left for the s&p this year 2% 5% >> that's a good question. i think 6,000 is the level a lot of people throw out there. we tend to not use overall targets on the upside because the trend, want to let that ride if we get that shakeout down around 55, 5600 on the s&p, which certainly is not much, you know in the scheme of things, but would feel i think if it happened over a week or two, feel kind of sharp, and then, yeah, you can go back and make marginal new highs, get up to the 6,000 level. that's pretty reasonable >> who used to have your job

i can't remember at btig? >> katie stockton. >> that's right. that's right we always used to introduce katie as btig and now she has her own shop and that helped you because now you'rechief guy at btig. no competition there we're all friends. we're all friends here thanks, jonathan see you later. okay, coming up after the break, the cnbc road trip heads to wisconsin what small business owners there are saying about the economy and the election in that swing state. and later, "wall street journal" reporting on secret conversations between elon musk and vladimir putin the story raising a lot of questions. we're going to talk about it with palantir co-founder joe lonsdale "squawk box" coming back after this. >> announcer: time now for today's aflack trivia question when was the last time the yankees played the dodgers in the world series the answer when "squawk box" returns. aflac! like how aflac pays people money

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it was their first title since 1965 welcome back to "squawk box. colgate palmolive just reported earnings just topping estimates organic sales growth up 6.8% with global pricing up 3.1%. global unit volume up 3.7% for the full year, colgate palmolive is raising its earnings growth rate for the range, the provior guidance now going from 10 to 11% this is good news. i don't know what kind of toothpaste you use. >> i use a variety of brands whatever is on the shelf at the moment crest, colgate, toms. >> i bought a new toothbrush, i had no idea it was a vibrating

toothbrush what is with the vibrating -- >> helps get with the -- >> no, not a real electric toothbrush it is $5 i got it at home and it is, like -- i thought it was going to go -- i was worried i could get -- is it for your gums >> it is better cleaning >> better for cleaning the cracks. >> i turned it off. >> okay. good for you all right, the cnbc your money, your vote road trip is barrelling into the badger state. brian sullivan is wrapping the week up in wisconsin, arriving yesterday and speaking with some small business owners about the election he joins us right now live from kenosha county in wisconsin. brian, good morning. >> reporter: i bought toothpaste at a quicktrip gas station yesterday. i have no idea what brand it is, guys good morning from kenosha. i can tell you right now, they're just waiting for this

thing to be over let's go into kenosha county, wisconsin, this is a little bit different than our previous two stops of erie and grand rapids because kenosha, is it a battleground county? yes. unlike the previous two, which flipped in '16 and flipped in '20, kenosha has gone the last two elections for donald trump in 2016, the first gop winner of the county since 1972 by about 238 votes. so, we're here, because not only is it fairly large, but it is also a county that kamala harris hopes that they can win back it is a traditionally blue county economically, this is kind of in the middle erie, a little more economically depressed. very, very high poverty rate erie rooting for you little bit tough there here, not quite as well off as grand rapids, but doing better than in erie, pennsylvania you got an unemployment rate which is just over 3%. let's get to the key issue of maybe wisconsin. one that you guys were just

talking about with steve liesman. that is tariffs. this idea of these tariffs on imported steel, on imported aluminum, maybe a little bit lus on evs, there we were yesterday, a company called core deck ken more founded the company, has 70 employees around the bend they build metal roofing we talked about everything, but we talked a lot about tariffs as well and he said, he didn't like the trump tariffs for two reasons. number one, they raise prices on imported steel, we know that he also thought that some domestic manufacturers were raising their prices simply because they could that said, he wanted more clarity from the harris campaign on exactly what she might do with the trump/biden tariffs listen. >> i think we need to better understand what the effects are of the steel tariff because in

the past, it seemed to be a negative effect. when they impose steel tariffs, it ends up hurting us downstream the steel mills here, domest abl domesticcally raise their prices proportionate to the steel tariff. >> he's not a fan of the trump tariffs. he doesn't know the kamala harris plan because harris doesn't appear to have a plan on tariffs. i read through hurer better way forward. she criticizes trump's tariffs but i called them the trump/biden tariffs because biden kept on the same tariffs as trump, despite having the opportunity to pull them off let's switch gears driving through town, we stopped into a local business, bnl office products. they were downtown they had the protest as and rio of 2020, he had to move, the business got burned down we talked to him about a variety of things. he said something which kind of shocked us about just the election overall it wasn't what side wins

it is that his business has kind of frozen the last couple of weeks and months he thinks it is because the election itself is happening and he hopes that business will pop up once it is over listen to what he had to say >> totally you can feel it even my sales rep came in and had mentioned to me, like, you know, sales are down, but we can track and we can see they're starting to pick up. and as he's telling me that, we started to pick up a little bit and then it just stopped like we hit a brick wall >> i find that fascinating, guys there is so much in these swing states the political ads, mailboxes, the hotel manager said she got 50 text messages yesterday from a variety of campaigns but this idea that could we see a pop in business once the election is over regardless of who wins simply because everybody seems to be fixated on the election >> wow brian, you think that's the

case, that spending has -- consumer spending, business spending would slow down ahead of that? >> i'll tell you what's not slowing down, becky. that is the billboard. i wish i owned a billboard in michigan i'll tell you why. we'll get to your point in a second we drove from grand rapids to here i'm not exaggerating not tv hyperbole i would say every other billboard, if not every billboard was kamala harris. whatever it was before had been sort of papered over you can tell they were temporary, like a tarp hung over it they were all yellow all kamala harris. almost every single billboard. we read that as a sign of strength or do we read that as a desperate spend. td kalyn had a note, kamala harris raised a billion, with a b, dollars in the third quarter and outspending trump three to one. we're not experts, we're talking to as many people as we can in the time we have i do think there is this paralysis by analysis on the

election where whether it is a small business or whether it is a big company that would buy scott carpenter's office furniture that they're just sitting back, waiting, and i wonder if, like, the stock market might do the same thing they don't know the outcome, they don't know the policies like ken moore talked about, he doesn't know what the tariffs might be if we see a change in the white house. wouldn't surprise me if there is maybe like a business surge right after the election >> you mentioned that there in kenosha county, i think 238 votes that it was decided by the state itself in 2020 decided by just 20,000 votes a lot riding on this they are telling people they may not know that night what happens there if it is a really close vote, and just based on how many early ballots they have, that takes longer to go through too. >> well, i know a really nice guy who is going to be anchoring election night coverage from midnight to 5:00 a.m he's tall and a little bit loud.

i'll be doing that with contessa brewer you got the early, i got the late shift but i will say this, here is where i'm going to put on my -- i don't know if i have a local news hat or not. they actually had some problems -- they call it absentee in person piloting here whi you're not voting on election day, but not in person, but on the day. they had problem with in person voting yesterday a computer system issue called whisk vote and the computers crashed, some server problems, they had to manually print some things so the early in person absentee voting was yesterday, didn't go so well. and here and the counties around milwaukee, not dane, madison university, hasmadison, that's heavily blue i'll leave you with the wow counties, three counties around milwaukee that all start with a w, o and w and kenosha, those are the counties to watch and

hopefully they got the computer problems solved because one thing we want to be able to do, whoever you vote for, because i saw becky put that sticker on in the commercial, just vote. >> that's right. vote brian, thank you we'll see you a little later >> thanks, all right thank you. coming up, making thanksgiving dinner affordable and the world series not so affordable and then joe lonsdale, palantir co-founder, joins us to talk tech, the election and the secret conversations between elon musk and vladimir putin we're coming right back.

autonation shares under pressure after earnings and revenue fell short the company says it faced a tough environment during the quarter, with lingering effects of the cdk outage that hit over the summer and weather challenges as well the stock is down by about 3.2%. meantime, sam's club is the

latest chain now to unveil thanksgiving day deals this year, members can feed ten people, good deal, i think, for under 100 bucks. what codo you think they will offer the entire meal including smoked whole turkey, dinner rolls and several sides, pumpkin pie as part of the deal. thanksgiving meal can be delivered in under 2 hours and all the items apparently precooked, ready to serve in a few hours as well. fresh direct-ish kind of thing from affordable to maybe not so affordable this morning, tickets for the world series skyrocketing in price, now on the secondary market, according to ticket reseller ticket iq the average price per seat, $3,887 it is the most expensive average since ticket iq started tracking the data in 2010 i have not been to a taylor

swift coner iscert yet, but i t you can get tickets for less than that. >> special in the netherlands or other places >> that's probably true too. >> there is some order in the world then, yes, that's all you're saying. yankees, dodgers versus -- come on come on. >> you want yankees, dodgers or taylor >> i want yankees, dodgers there is order in the world being restored, thank you. coming up, we'll see whether order is restored in the world after we havethis conversation in just a minute former president trump's influence in the tech community, and the election, all of this coming up. palantir co-founder joe lonsdale win join us. we'll talk about elon's reported conversations with president putin. we're coming right back.

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welcome back to "squawk box. "the wall street journal" has an eye opening report this morning on potentially secret conversations that may have been taking place between elon musk and vladimir putin, among other items the paper reporting that putin asked musk to avoid activating his starlink satellite internet service over taiwan as a favor to chinese

leader xi jinping. for more on this and so much more on the election, silicon valley, and the economy, joe lonsdale is here at the table, palantir co-founder, eight vc founding partner and someone who never really holds back. so, and a long time friend of elon musk. so let me ask what you make of this report. >> yeah. so what's going on, andrew, is you got to look at the background right now europe is panicking. the harris camp is panicking two weeks to the election and they're throwing stuff at the wall what happened in the last couple of weeks, there is amazing momentum against the harris team you have told not to go into israel, they kill the bad guys in israel, looked really dumb, europe right now, of course, really angry at musk, they had to fire a commissioner, who used to be a minister in the french government people in the french government don't like elon right now. he just shamed them.

just two days came out on twitter. they have all this momentum against them and they're panicking and throwing stuff at the wall and the last time we talked about russia this close to an election, it was intelligence community, working on fake document that hillary created, they spent three years, you have this context you have to look at -- >> i want to hear what you're saying go ahead are you finished >> but what do you think the validity of the report is? do you believe he is talking to putin and if he is, do you think that's appropriate >> i have no idea if he's talking to putin or not. i think the main thing as far as i can tell they accused him of something with taiwan. elon works with the national security state a lot of his companies do. i have companies that do as well you have to follow the rules when you work in the international security state i find it highly unlikely he's breaking the very clear rules when you do that. >> the rules are if you're talking to a foreign government,

particularly a hostile foreign leader, you have to report it, right? we're trying to figure it out. >> all sorts of rules. i would be shocked if he broke them the accusation as far as i can tell, you know, turn off taiwan, like, of course he wouldn't turn off taiwan. >> we thought it was a joint venture, that the country requires, we kind of talked about that earlier, the country requires and that's why he's not -- >> my understanding is that you're not allowed to do diplomacy on behalf of the united states and i'm confident he's not doing that gli. >> i think part of the question is, you have security clearance too. if you happen to get a phone call from putin on your phone when you leave the broadcast today, whether you have to report that call to the government or not. >> talking about anything relevant to national security, you definitely have to you definitely have to tell them what's going on with that. but, again, i think this is really important, like, there is so much momentum on the trump side in foreign policy last couple of weeks, this is almost

comical how bad it has gone for them you're going to see them throw more stuff at the wall you have deep state is a silly term but a real term you have bureaucrats who do not want to -- these guys attack trump now are people who try to go around him. and they're going after him. they're going to try a lot of stuff. >> elon could knock this down pretty quickly by just saying, hey, i haven't broken any national security requirements or anything along those lines. we had ackman on this week and he said part of the reason that you are suspect of what happened with earlier issues with that last presidential debate was because they haven't come out and denied some of these things. would be easy for him to say this is not true >> you know, i'm sure -- i'm sure he will if he finds it necessary. at the same time, people are trying to create distractions. >> let me ask you a question, someone who spends a lot of time thinking about defense and you're 100% rightthis administration has been very outspoken about trying to tamp down things and prevent or at

least seemingly appear to prevent israel from escalating things and clearly i would argue that the things israel has done in the recent weeks had been a great success. and so the appearance on the other end of looking like you are not in favor of that looks like a loss. having said that, there are people, maybe you're going to say this say deep state view, but a deep state view that while they have said certain things publicly, and maybe you can argue this is hypocritical, privately they have continued to support israel in almost all of these endeavors. is that true or not? some people say, look, they're trying to placate europeans, french, the this, the that, placate the left in the u.s., all sorts of things going on, but when it comes to the reality of the battlefield, they have not shifted at all >> so the reality for me is i

have friends who are various senior positions, and my friends are extremely frustrated with this administration. this is ridiculous, we're being told not to do this, they're turning this around. multiple times they could have taken out the hezbollah leader earlier and they were stopped. on one hand, yes, there is support, it is still very important for israel as an ally. i can only speak to what people are telling me on my whatsapp channels and they're pissed off with what is going on with the administration they're furious. the israelis clearly think trump is a better president for them it is very funny, one of the tacks on him is he's hitler and all these things, but you ask the israelis, they really want him to win >> what do you make of that, by the way? >> i think you alluded to it, almost sounded like it was going to go where howard lutnick went, you got a lot of generals came up and were appointed to the obama administration and they -- you don't want to call it the deep state, but there are people that say, deep state. >> you can call it deep state.

if you want to call something a deep state, what that is to me is people who don't like receiving orders from the politically elected people there are a lot of people in the bureaucracy in d.c., in the generals who are offended by the fact that the politically appointed people want to be in charge and try to build a work around them. there were people that did that with trump and he wouldn't have it he had his own way if you look at the state department, look at the dod, their way of doing things in certain areas, it is very -- what the trump administration wanted there was a huge clash and listen, some of the attacks on trump, there are people in the room, my friend nick iris has been critical of trump in other places, he came out strong saying patently false, total bs. you had crazy attacks -- i think they're attacks of desperation, very clear trump has a ton of momentum right now. >> what would you see -- is it called the department of government efficiency? >> yes >> what would you -- what would that look like the slash and burn at twitter,

how many people left -- he's doing it with 20% of the workforce? >> twitter is one thing. the government, we all know -- >> can only go 50% and -- >> the government is even more wasteful, of course, in some ways. >> can do more than 80%. >> i'm not saying that's what they would want to do. i have a lot of friends on the moderate left who are aligned with the department of government and the reason is because basically the left has special inte interests. they all know there is tons of empty buildings in d.c., people not working, tens of billions of dollars wasted on these crazy unaccountable ngos, giving money to the ngos in the middle east to stop hate speech and stop misinformation and it turns out the ngos are giving misinformation to israel there is waste everywhere you look >> can i ask you a question, elon musk clearly is an amazing entrepreneur, amazing innovator and when you look at tesla and spacex as an engineer, as a

physical exercise, it is like a remarkable crazy situation it does get more complicated, i think you would agree, with twitter, for example twitter, he's been able to cut the staff and the sites not only continuing, but you can argue there is more people on it than before i would argue technically it is a better site, right from a -- the technical piece of it there is a lot of complicated issues around free speech and protections and things like that and the truth is as a business, twitter is not a better business today. it is a worse business, right? and so the question is, when it comes to dealing with very human issues, right, how he's going to deal with that and whether he's the best person to do that or not. and i say that as somebody who say fan of his >> well, there is a l a lot of brands that went after him i think with the government, if you look at it from the perspective of any of us on the left or the right in the

innovation world, we're constantly reinventing how things should work, how processes should work and that hasn't happened, not only in the last ten years, but hasn't even happened -- we're not upgrading to the 1990s it works in a way that is generations and generations old. and if you ask people in d.c., naive outsiders, we put in things that don't allow that kind of change here. it is like this very, very broken part of our society that if you take the smartest people and you focus on it, i think all of us know -- >> i agree the reason i'm asking this is somebody i know was mentioning, if you really are going to cut the government, which there is lots of things we should all be doing, but there are probably places where there will be disagreements. would you keep the civil rights lawyers that work for ice? real question. and there are some people who say you have to keep the civil rights lawyers for ice, because there is going to be immigrants mistreated and you need to do that others say that's crazy. then there is a real debate about -- >> that's why elections matter.

>> 100%. i think this commission, if it is done right, i would love to be part of it if they still decide to have me, it should have people with different backgrounds and different views on it. that's healthy there has been various rumors i've been hearing of names of people with respect on the moderate left as well. that would be great. there is so much obvious stuff to get done and you should get stuff done that doesn't break things i would love to be involved in the commission nothing finalized. i'm close to all these people and passionate about these issues and there is hundreds of billions of dollars in -- >> what do you think the lowest hanging fruit is >> you have too many people who aren't working in the office, who aren't accountable what happened is that about a generation ago we stopped testing people before we hired them used to be when america went to the moon, the people running those departments, they had to pass hard tests and we got rid of the tests and got rid of -- >> you think it is a staffing story or contracts that will be -- >> 7 million people who work for

d.c., if you combine the civil service plus the contractors right around d.c it is a couple million more. >> you short washington, d.c. real estate now? >> i hope so if it is successful. >> netanyahu's numbers are rising because he's consistently more than people thought what is going to happen? what do you think is on the table and when is it going to happen after the election >> israeli politics? >> no. in israel and iran >> oh, well, listen, israel is handled hezbollah and hamas really well. iran is really weakened. the mullahs are not liked by their people i'm generally not a fan of war, but the way you stop war is that you figure out how to make sure the mullahs don't have any more power to project terrorism around the middle east this is me speaking, not -- >> nuclear iran, how is that -- is that -- >> i don't know if you noticed, somehow there is nuclear plants on fire the last few days in

iran doesn't usually happen i don't know how these things get on fire. >> some pagers or something. >> but, listen, iran needs to be stopped from having -- >> after the election? >> i'm not going to -- i'm not going call it out ahead of time. i think this administration -- >> no oil facilities and no nuclear? that's what we heard they decided -- >> that's what i'm hearing, but i'm hearing it is holding them back, but -- >> he's done more than people thought and it worked for him so i'm wondering if that's going to continue. >> cut the head off of the snake, yeah. >> thank you >> thank you >> thank you, joe. when we come back, a commodities price surge and the impact on inflation. let's look at the futures this morning. on this friday morning, right ro t there are green arrows acsshe board dow is up by 100 the nasdaq indicated up by 70. and we'll be right back.

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let's check on shares of apple this morning the shares are up .8%, down by close to $2. key bank downgrading the iphonemaker to underweight from sector weight with a price target of $200 that firm is citing slowing u.s. iphone sales and says that shares are expensive in their view relative to its peers "squawk box" will be right back. (♪♪) (♪♪) 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

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prices of gold, silver and palladium all surging this week. joining us right now to talk card commodities is max layton, head of commodities research at citi we looked at gold at a new high on wednesday you're bullish on gold, even with the gains we have seen in prices why is that? >> bullish on gold and silver over the next couple of months thanks for having me on the show you know, quite frankly gold and silver have gone up despite the number of things going against

them variables that have been strongly correlated with gold and silver have gone against them over the last couple of months we have had higher interest rates, stronger payrolls, chinese demand through july and august collapsed in terms of the imports. and yet they have been marching higher we think part of that is china just returned to the market in september. so the premium indicators that you are getting on gold, premiums going negative and falling in china, just, you know, they don't reflect the underlying consumption they're only 0.5% of the price and going forward, the best bull markets for gold and silver certainly over the last 20 years have been when the dm is weak or weakening. the developed markets, u.s. and europe, and when china is easing and going to strengthen. this is the best setup for gold and silver certainly for a decade. >> we have seen palladium prices jumping as well. highest level i think we have seen since december of last year but you're not bullish there why is that?

>> yeah, i think the medium to long-term story for palladium is a big problem for the market china has increased its ev penetration from 30 percentage points 12 months ago to 55% at the moment and this is, you know, palladium, this is the primary demand for palladium coming off vehicles the substitution we're seeing, the loss of demand is a big problem for palladium demand why are we going higher is all about supply it is all about concerns about russia, supply and also potential and actual supply cuts in north america and in south africa so, you know, temporarily certainly palladium has some upside, has been doing well, but the medium term to long-term outlook is as bad as it gets. >> what about platinum >> yeah, platinum, i think the problem platinum had over the

last few years really is it is just not giving you the beta to either lower real rates in weaker developed market for recession risks and not giving you the beta to em growth. so there is better ways to get exposure to why there are those things in other commodities. it is also got some headwinds from the ev story. but, yeah, look near term, palladium, and platinum, they have been doing well and they can continue to do moderately well in the short run. i feel like producers are going to be looking to hedge these rallies pretty aggressively and investors take it -- the rallies as opportunities to sell. >> max, thank you. >> thank you it is 8:00 a.m. on the east coast. and you're watching "squawk box" right here on cnbc i'm becky quick with joe kernen and andrew ross sorkin among our top stories this morning, a federal judge blocking the $8.5 billion acquisition of michael kors

parent capri holdings by coach and kate spade owner tapestry. the judge grand the federal trade commission's motion for a preliminary injunction, but it wasn't immediately clear why a detailed opinion was filed under co and isn't accessible to the public in a statement, tapestry said it plans to appeal the judge's order. colgate palmolive beating third quarter revenue and profit estimates. the company raising its earnings growth rate projections and then there is tech consulting and engineering services firm boos hamilton getting a big boost for the fiscal year. the company's second quarter results topping expectations and that stock is up by close to 13%. and the owner and manager of the cargo ship that crashed into -- and collapsed baltimore's francis scott key bridge in april have agreed to pay more than $100 million in cleanup costs to settle a

justice department lawsuit in a news release, officials said the nine-figure sum does not cover any damages for rebuilding the bridge. futures now have been a little bit higher for most of the morning session. in treasuries, behaved, hasn't move 4.19 this morning. mike santoli at the nyse >> the s&p 500 managed to hold pretty close to its record highs this week, even as the majority of stocks are kind of digesting and pulling back a little bit below the surface after a six-week win streak. in the index, up 22% year to date at about 22 times forward earnings holding that elevated valuation for now because earnings estimates continue to go up. there reports coming in, mostly reassuring and the fed is easing at some pace into a still resilient economy. the economic surprise index is going in the right direction things are enabling the market to hang in there and mostly hold just 1% or so below the highs.

look at a couple of bellwether areas i like to monitor, this home builders and semiconductors, since the end of 2022, almost two years, have been pretty close. as you see they have doubled but they're off their highs, they have been kind of churning below those highs. you see the massive momentum peak in the semis toward midyear as home builders fell, yields went up. still, these are big supply demand long-term secular stories that the market probably wants to lead if, in fact, it is going to have a good macro message so still hanging in there, you see the outperform, of course, volatility index, still sticky at somewhat high levels for a market that has been making new highs steadily we know why there is a lot of hedging of uncertainty, g geopolitical election. this does leave capacity for tension release in a few weeks i think almost everybody is expecting and somewhat positioned for a november/december rally probably

once we clear through these next few weeks. we'll see if that presumption is right. >> that's why you think we have been on the up and up and up if you're expecting that there is going to be a rally coming the other side of this >> well, not for the vix, but for the market itself, i feel like there is people who have not really wanted to cut back equity exposure too much, even though we're up a lot, even though there is perceived near term uncertainty because the textbooks and all the historical pattern say, probably bull markets up 2% by this point in the year tend to finish strong that's why you're not seeing people go out, but you want to hedge the volatility in the near term, you buy the kinds of index protection that elevate the vix. >> okay. mike, thank you. see you later. for more on the markets, we want to bring in brenda van gella, chief investment officer, also a cnbc contributor and, brenda, what do you think about that is this something that the markets are likely to trend

higher in november and december? and will volatility go up? >> i think between now and then we have a lot -- a fair amount to get through we have another big week of earnings next week with a lot of large cap tech names reporting we have the election and we have a fed meeting. i think as soon as we're finished with all of that, and especially the election, i think that should pave the way for the market to appreciate into the last part of the year. especially after that uncertainty goes away. but admittedly, the market held up really well given the uncertainty of the election. there was a lot of expectation that maybe would see more volatility than we have. i think a lot of that -- we haven't seen a lot of that because we have seen such great fundamentals from the economy and so far from the earnings cycle here >> we have seen great earnings numbers, we have seen great numbers when it comes to the economy, and yet the fed is lowering rates kind of like having your cake and eating it too. can that continue?

>> i think it is a good question because one thing that the market has refocused on and i think it is a right to do so is the inflation story, which i think you know a few months ago we thought we didn't need to worry about that anymore but when we look at what could impact inct inflation, we had te storms we had, that's an inflationary impact when you see things like insurance prices going up, more building materials, et cetera, china stimulating its economy could ultimately be inflationary china has been basically exporting deflation. we have both presidential candidates talking about inflationary policies that they would like to put forth. and the economy is just held up so well that that could also serve to limit further improvement inflation. i think that's going to be an ongoing debate and i think we have seen a lot of volatility in interest rates this year, in terms of what the bond market has been pricing in.

and i don't expect that to go away, given the environment for inflation now, which seems like we might end up not getting to the target of 2% but in our view, even if it is 3%, and the economy is still healthy, i think that will still be okay. >> but, that's what the assumption that the fed will stop lowering rates, sooner maybe than the markets are expecting. you think that's okay? >> i think the fed is not going to stop lowering, but just go slower than the market probably expects. because we are absolutely still seeing some parts of the economy that really are being impacted by higher interest rates in the sill conicon valley wher am, equity is negatively being impacted by the higher interest rate environment the housing market also could be at risk. we have not seen mortgage rates come down much at all because long-term interest rates have risen since the fed lowered interest rates so i think it is a balancing

act. but so far the good news in our mind is that we have seen the peak for this cycle, we believe in short-term interest rates so at the margin, they will be coming down. >> brenda, you own a lot of big megacap names, but you're not overweight tech versus the broader s&p 500 overall. >> we aren't and i think on one hand these stocks, many of them are expensive relative to history. you could argue, well, that's justified because they have been driving so much of the earnings growth that we have seen for the s&p 500. but i think we're seeing an important shift happen and that is that these companies historically, many of them, have been capex light business models and wall street loves capex light business models, usually willing to apply a pretty rich multiple to pay for that but many of these companies have been spending significantly this

year and have become capex heavy business models. so we think that's an important change we saw last quarter that investors really started to question when are we going to see some returns on these investments and in some cases some companies are seeing the returns. companies like meta is seeing return on their a.i. investments with more engagement more monetization of the digital ads there and we think they're going to continue to benefit others like microsoft and alphabet, i think you're still a question mark over when they're really going to start to see a return on some of these investments. so i think if we do enter a prolonged cycle, where companies need to spend in order just to stay -- to solidify their position within the marketplace, i think investors may start to work a lower multiple for some of the companies >> brenda, thanks a lot. >> thank you so much for having me coming up, former ftc

commissioner on the decision by a judge to block tapestry's big purchase of michael kors parent capri. as we head to break, check out the key stock mover, centene getting help from its commercial insurance business that stock on the move, up about 12.5% right now. >> at university of maryland global campus, getting a bachelor's degree doesn't have to mean starting from scratch. here you can earn up to 90 undergraduate credits for relevant experience. what will your next success be? when it comes to investing, we live in uncertain times.

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iphone sales in china slipping slightly in the third quarter, while domestic rival huawei had a surge apple has faced more competition in china and restrictions on iphone usage by some government agencies but idc said apple did rejoin the ranks of china's top five smartphone vendors in the third quarter, helped by the launch of the new iphone, the 16 apple ceo tim cook met with china's commerce minister today.

that's according to a report on the ministry's website which included a photo showing cook shaking hands with the congress minister a readout said the two men talked about apple business development in china and u.s. trade relations. this is cook's second visit to china this year. so far he's met with beijing officials and leaders of local companies including the chairman of china mobile. he also posted pictures of himself on i hahis social media account. told you at the top of the hour about a federal judge blocking tapestry's $8.5 billion acquisition of capri holdings. the preliminary injunction halts the combination of america's two largest houses

joining us, bill kovacic, former commissioner at the ftc. i'm curious what you make of the ruling, if they should have brought the case to begin with, a lo a lot of people raising questions about it, saying is this the role of the ftc, trying to protect folks from paying more for expensive handbags. >> i think they had a good basis for bringing the case. on there was a 5-0 vote. i think the judge found they had facts to back them up. there is an edgy element to the case they're trying to carve out a niche and a broader product category the jubdge was convinced they dd it it is a potential choice and the judge -- judges in this case have hardly been pushovers. it is a big day for the ftc. >> it is a big day for the ftc does this change the optics, the

perception of the ftc? there was a view that they had been aggressive in some cases. the business community would say too aggressive and there were a number -- a string of suits where they lost. does this change this dynamic? >> i think it does when you take the whole string of litigation events, it is true that they lost a couple on the front end, meta, microsoft activision, still on appeal, in the more recent experience they have done well and what it does is help overcome the narrative that, one, you can't win, two, you're picking bad cases, and, three, your chair is out of control, bringing cases that are way out of the mainstream. there is nothing like litigated victories to stifle that kind of discussion. >> what is your sense about the future of lina khan and i ask it because there has been questions about whether former president trump wins, whether he would

keep her i imagine that's unlikely. yet as we know jd vance has been very positive and continued to say positive things about her. on the other side, there is a question about whether vice president harris, if she were to win, would keep her. there is clearly a business community by democrats trying to push against lina khan, but some say that might even turn into a backlash. >> i think that a trump presidency and regime change generally brings in a new chair. when you have a change of party, it is almost always been the case with few exceptions that presidents want their own person to be chair, they're clearly a couple of members of the commission now, republicans who had fit that bill, so, i think it is highly likely that despite the support from the vice president, for example, that she would continue in the job. i think that the outcome yesterday helps her. the possibility that she continues on a harris administration there are people who push the vice president to make a change.

my sense is that the political cost of doing that would be severe do you want to pick a big fight with elizabeth warren, and a number of her fellow supporters of strong enforcement and the fan base of advocacy groups behind them, do you want to pick that fight early on? my intuition would be no and when you have this kind of success, it is another basis for the chair to say, maybe we have rough spots beginning. but we have done a lot better in picking the right case, building the team to litigate it. i think this helps her in the effort to get a reappointment if she wants it, this helps her get it. >> what is your sense about a potential appeal how strong of a case do you think the ftc has. they have won now, and they have won the injunction but do you look at this case and say it is on the fence or not at all? and therefore does this deal fall apart >> it goes to the ftc and the appellate process through the

court of appeals the judge did a very careful job in walking through the evidence that tends to be a bit hard to overturn i suppose the parties would really focus hard upon whether or not this accessible luxury handbag market is a proper focal point for analysis that will attract some debate. but my that's a couple of years away. the parties said we'll appeal, we'll go ahead, that requires patience further expenditure of effort. i suspect that the judge has done a -- judge has done a good job here to make this withstand appeal. >> and you talk about that focus, one question is are there larger implications as a result of this case in terms of how courts, how the ftc and other regulatory bodies are going to think about market size, because part of the issue here has been what is the market size and who do you put in that bucket of --

you described it as accessible handbags, both on the high end and the low end, and how that -- that kind of modeling could be applied to other industries. >> this has positive implications for the effort of the ftc, the department of justice, to single out niches that exist within broader product categories when you have highly differentiated consumer goods markets, you have the possibility of looking at selected segments. this case gives support to the effort to focus on those segments, where you can back it up with ordinary course of business documents that come from the company's own files, when you come up with other data that shows this is a relevant niche, it suggests that even though you are merging within a much broader product category, that you may have a competitive niche that is significant. and this is a name that appears in the government's 2023 merger guidelines, where there is much more of an effort to focus on

what they call head to head competition and the loss of head to head competition. this is a boost to the effort to narrow the focus to some of these niches and to embed the pro intervention philosophy of the 2023 guidelines into the jurisprudence. this is an important building block to support that development. >> bill, thank you for joining us this morning. great to get your perspective. >> my pleasure, thank you. >> you bet. when we come back, why are blackstone ads all over listagram, linkedin and other onne destinations? after a break, behind the alternative asset manager's push into social media advertising. stay tuned "squawk box" will be right back. . great job putting finance and hr on one platform with workday. thank you! guys, can you keep it down. i'm working. you people are (guitar noises). hand over the air guitar.

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welcome back to "squawk box. if you have been seeing more ads for wall street giant black stone on your social media feed, that is not an accident.

i see them all the time. i follow them. the company and other alternative asset managers now turning to a relatively untapped market, individuals. leslie picker joins us now with more on what is going on >> yeah, andrew, gone are the days where alternative asset managers were these mysterious opaque cash generation machines, blackstone president john gray highlighted what they see as this enormous opportunity as he put it on last week's earnings call to reach out to individual investors. he said institutional investors who they have been marketing to for a long, long time have about 30% of their portfolios allocated to private assets. and comparatively in the $80 trillion wealth space, so blackstone has raised about $21 billion from this group in the year through september, double what they raised from individuals in the same period a year before. ultimately the firm sees potential to expand to half a

trillion dollars from that retail channel kkr expects between 30% and 50% of new capital raised in the next few years to come from private wealth and apollo said it is on track to raise $50 billion from this group in 2026 and naming it one of the biggest growth drivers for the next five years. to be sure, this transition to capturing more wallet share from individual investors may not be completely smooth over time. a recent report by bane highlights how the firms need to develop new capabilities around technology, sales and marketing and investor education, given the legal differences between retail and institutional investors. the prospect of expanding the fund-raising market is a key to raising the stock prices with blackstone, apollo outperforming the market year to tadate here is one i saw just the other

day from blackstone, and full disclosure, blackstone has a new ad campaign on cnbc as well. andrew >> leslie picker, thank you for that i will see you -- are you on instagram? i don't know about that. >> yeah. i follow you >> i got to follow you back then. >> i follow you. i follow blackstone. september durable goods orders we're back in a moment see you on the gram. upgrade have we? ♪♪ okay, so that's how you want to play. ♪♪ (vo) time to move? make it easy with opendoor. sell your home in any season, for any reason. [vampire hiss]

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welcome back to "squawk box. rick santelli here live from cmehq. we get ready to go into the week, durable goods, september preliminary, a volatile series of data points headline number expected down 1%, it is down .8%, down 8%, that's the weakest since june when it was down 6.9, and that was the weakest in four years. last month, well, last month was zero unchanged that now becomes minus .8% as well back-to-back here's the good news in why rates are going up a bit, if you strip out transportation, it leaps up to up .4%, up .4%, and

that follows up half a percent, that got upgraded up .6% nondefense ex-air proxy for cap p capital spending that was the strongest going all the way back to august of last year and finally, let's switch gears from orders to shipments down .3% that's not good. down .3% last month down .1, the month before that down .4% so shipments on the weak side. that gives us kind of a glimpse of the difference between the order book and what is going out the door, something to pay attention to we see yields popped up a bit, hovering around 421 if you look at two year at 4.06,

up 11 basis points and we see that the preopening equities are holding their green on the data points still university of michigan october final read and as everybody seems to be talking about the fed, the elections coming up on the 5th, the fed meeting 6th and 7th, i would like to point out that wednesday of next week we get our first look at third quarter gdp and while everyone is trying to handicap how much the fed is going to cut rates, we're staring down a 3% quarter. joe, that seems pretty good, what do you think? >> i think we have a weirdly don't we have a jobs number on the 1st, even though it is a friday that's -- and we'll get that before the election too. >> yes yes. before the election. hey, any big thoughts as we get this close to the election any more russian stories popping out anywhere with regard to

major newspapers around the country, anything weird going on in the last week >> it is october and october, it just -- we know halloween is coming, we know there is a lot of surprises coming wasn't the -- i think w -- the dui was in october too, wasn't it >> yes. >> hillary, comey, that was october. >> i would make one point about the stories. >> you go ahead -- >> no, back in the day -- >> i'm still waiting for in some of the newspapers to apologize to the country about keeping under russian thumb for two and a half years as they point out some of the inaccuracies of late. >> it is not in some gossip rag. it is in "the wall street journal. i don't know what to make of it all. >> that means a lot these days, andrew >> glass houses, glass houses. >> is that supposed to mean something special? >> andrew?

>> i don't have anything -- >> no newspaper is what they used to be that's for sure. you probably know that >> oh, my goodness gracious. i'm glad you work for a news organization okay let's -- >> i have to end this. i will thanks, rick steve liesman joins us now with more >> couple of things, we had a good run on investment in the country. and we have a bit of distortion. who actually knows what is going on at boeing if you have a chance, ask phil what is happening. had a good month with orders but they put some numbers according to industry publications into orders for cancellation i'm not sure what is going on there. we dodged a bullet, some people out there thinking there would be a much bigger decline because of boeing. boeing is a huge part of this thing, which is why when mr. santelli, my good colleague reads it not defense capital goods ex-aircraft because of the

volatility in that and the new orders for that up 0.5. we're going to have a big number in the gdp report when it comes to investment spending why? all this a.i., we have some transportation spending going on it is not been a bad story, but there is this other issue i want to talk about, i don't know if you remember brian sullivan's report from earlier this morning, he talked about the uncertainty that might come along with the election. we can actually document that from our cnbc all america economic -- >> ahead of the election. >> ahead of the election check it out we have a number, we asked people, what do you think about the economy. going to get better, going to get worse, or are you unsure this is the unsure average of the past four elections in the cnbc all america economic survey it jumps by 11 points. when we ask people what is going to happen with the economy. >> that might be holding out. >> 18% compared to the average of the prior four quarters let's put it in context, and then let's see what the average

is over the time we have been doing this since 2007. here is your elections by the last four elections here you can see this is not -- i don't know why it is always the same 10, 11 percentage points. always the same. you can see 2016, which makes sense, when donald trump was running, that was the most economic uncertainty we had. less so this time. but there is a measurable amount of economic uncertainty that comes in our last track before the election now, i can -- >> is that because if it is the uniparty, it is going to be the same either way, democrat or republican >> that's a great question, joe. >> well, if you put that chart back up, folks in the back, there is no change -- no change in the gap on incumbency or not. 2012 an incumbent election that's a good -- >> the gridlock is unlocked. and then you have -- >> you don't know it and you guys talked -- >> 2020, red wave, blue wave

>> but -- you had senate, house and -- >> if you ask businesses -- ask businesses what they want is they want -- they want lower taxes and less regulation. >> one vote majority and had both manchin and senna. >> businesses want lower taxes and less regulation in the first order. if they can't have that, what do they want in the number two position stability. they want to know what the rules of the game are, so, when you have an election like this, the possibility of changing -- the next step i can do, i'll do -- i'll get one of my thousands of junior economics reporters on this job is to look to see if there is any impact you can measure in retail sales relative to the prior -- if there is any impact at all, in investment spending relative to the prior four quarters. >> that would be the big -- >> people can feel any way they want, do they change it? also, by the way, an increase in optimism in who will get better,

right? and the reason i think is because especially now that you have a 50/50 election, we saw a pop in democrats being more optimistic and republicans being optimistic now, back in august, when biden looked like he was going down for count here, there was a pop only for republicans, not democrats. it -- your views are the economy are highly colored by your political views. >> right >> thank you, steve. >> sure. when we come back, more on the economy and on the economic choices the voters are facing when they go to the polls to vote for president former.e. aian j s.cchrmay clayton and michigan economics professor justin wolfers will join us next stay tuned "squawk box" will be right back. ) i have a great boss... it's me. (man 1 vo) i have people, people i can count on. (man 2 vo) i have time to give (grandma vo) and a million stories to share. (grandpa vo) if that's not rich, i don't know what is. (vo) the key to being rich is knowing what counts.

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so, let's get to work. (♪♪) our next guests are here to sound off on taxes, the national debt, other hot economic issues ahead of the election. and they did in a recent "new york times" piece, let's welcome

former s.e.c. chairman jay clayton, apollo independent chair and cnbc contributor and justin wolfers, public policy and economics professor at the university of michigan's ford school i thought just you and justin had gotten together and written a piece. i was, like, this is, like antimatter matter. this is like cats and dogs, living together. but, justin, you wrote it with betsy stevenson on your side and you had comb on your side. you didn't write it together have i got that right now? >> we wrote back and forth we didn't write it together. it was fun had a surprisingly good time doing it. >> what did we -- justin, if you could pick one thing that you -- since we're all coming together some day, what did you come -- is there any agreement anywhere, maybe we have to -- we all agree we need some good growth to try to help with the deficit or the debt, the total debt. at least agree on that, justin >> i think it is enormous

agreement across -- somebody invited jay to help me here emphasize the huge agreement so, let me start with something i think neither of us said but we probably both felt, which is this is the most depressing economic policy debate before an election in my lifetime. there was a time when candidates were put out very serious and detailed proposals, a time they meant it, a time they addressed things like the public debt, a time they hoped that the math would add up there was a time when they remembered their policies well enough they didn't have to be written on the screen behind them and so there is a seriousness to the real issues of economics that i feel this election campaign simile ply hasn't live to. >> is that an area of agreement? >> well, what i -- quickly, yes. one thing that is unfortunate is tariffs are either good or bad taxes are either good or bad

and we had -- i applaud this show, because you've -- yesterday i saw howard on here howard lutnick you were quizzing him about when are tariffs good and when are they bad sometimes really good and sometimes they don't make sense. we're having a much richer debate on this show than anywhere else. tariffs, subsidies, taxes, restrictions, they're all part of the same, you know, ball of wax. it is much more complicated. and it will be very good for the american -- the american public recognizes this. the american public is a lot smarter than we give them credit for. they know that there is some places where tariffs make a lot of sense and they know there are some places where they don't. >> justin, earlier this week we also -- we have gone back and forth on whether it is a spending or a tax problem. and we have had some people say, look, we're basically at 18% in what we collect. and we used to be at 19% of what

we spend and it was a point difference and that's almost manageable now we're out of control, 18% collecting but 23 headed to 24 on the spending. there is still plenty of people that want to tax billionaires or -- i don't know what they want to do they want to find the taxes to keep spending at 23.5. what do you want to do >> i think i want to restore some fairness to the system. the problem is, i think a lot of us would feel a lot happier and more comfortable feeling pain if it didn't feel like some other guy was getting a free ride he shouldn't be getting the fact that there are billionaires paying less tax than me really pisss mepisses m.

the fact that there is a carried interest loophole so people can earn a ton of money and then pass it on to their kids without ever paying tax on it, it is incredibly frustrating so let's restore trust in the system let's make it a whole lot fairer >> you agreed with all that, jay? this was another -- >> you know what, you found an area of disagreement >> you're kidding. >> let's talk about the irs and this 85,000 new irs employees. this is one of the most ridiculous proposals i've ever heard. we have an antiquated irs. we probably need 20,000 less employees. this is where elon musk is right. you had lonsdale on. the irs is still using pen and paper to review our taxes. we have a digital economy. we can do this with software, with a.i., and eliminate virtually all cheating on a digitized economy. >> i don't disagree with that. my question is about what kind of investment that requires and i think you would agree, if you

were a business of some sort, you would invest at some level in revenue collection. meaning, like, if you were not collecting the revenue in a timely or proper way you would figure out a way to collect that revenue, people who are supposed to be paying it. >> do you think that's more people or better systems i would bet you dollars to doughnuts -- >> probably a combination. >> no way. >> it is a mix >> no. i mean, think about -- >> we're talking about people who are actively -- who are trying to break the rules. >> we have wall street firms. >> right. >> if any of them were still running on pen and paper, they would be out of business in a day. >> not going to debate that. >> other countries do this much better than we do. we have an incredibly antiquated system i'm going to be -- i'm going to be quite provocative here. i think the 85,000 new agents, new employees, are 85,000 government voters who will continue to vote for big --

>> i don't want to take this side track on the irs. would you try to make it easier for taxpayers to pay >> yes >> okay. the reason i mention that is there have been lots of efforts put forward to literally make it so that the form is easy, you can go on digitally and do it for free, all sorts of things and the truth is that the group of people who have been outspoken against it have been republicans in part because they have historically tried to avoid collecting that's what's happened >> let's be clear. we have the most compliant citizenry on taxes in the world. okay we should celebrate that and -- >> the w2 system. >> who runs the w2 system? >> the irs. >> no. employers run the w2 system. the private sector runs the best part of our tax collection mechanism. they do it and they do it electronically the whole irs should move to that type of system. and -- >> how do you want to tax

billionaires >> what's that >> justin's thing, he doesn't like billionaires paying less than -- always the same thing, teachers and -- >> how are we going to tax billionaires if you confiscated their wealth, it would not solve your 19% to 24% take everybody's money. >> do you feel you paid more than trump did last year, mate? >> i pay. i am happy to my. my marginal rate in new york, i am happy to pay. my problem is what they do with the money. that's my big problem. i believe in musk, department of government efficiency. >> do you care that other people pay less than you who make more? >> i think the tax code is pretty fair. >> so the people who make paralysisly more than you are paying materially lower percent. >> i don't lose any sleep over

it. >> that's interesting. >> it's not income though though. they make more by making loans against their stock. those are people you are talking about. they're not paying lower on the income they're taking. >> they make more on dividends. >> or they run an s corporation and take every deduction known to man. >> let me tell you what i really think about taxes. i have worked all over the world. i am super privileged seeing growth and things like that. there's a natural rate of taxation. it's about a third. people who pay a third, they're fine with it. when you ask people to pay more, they're upset. less than a third doesn't really work. start with that. >> even if you were king and you were able to however you wanted to billionaires, that ain't going to do it. you run out of billionaires. how do you make up for the rest? would you raise marginal rates

on everyone? would you cut any spending? would you do anything with the transfer payments, welfare? >> there is a lot that can be done. you and i aren't going to solve it in the next two or three minutes. there is definitely some spending that can be cut. the old republican mantra, it used to be broaden the base and lower the rate. the broaden the base part. this is the mathematics of it. there is so much that we don't tax, so many loopholes, ways of reducing your tax bill. if we start to tax those things again, then there is going to be a lot more money left in the pot. you can either use that for spending or republicans used to want to use that for lowering the rate. instead we have silly ideas. the idea that we should not tax over time, terrific. i will go to my employer and say to the university of michigan i will work zero hours

this week and 80 next week. that's makes half of my income over time and i will get a huge tax break. this is the opposite of what republicans used to believe in. >> do you know what's funny in the tax debate? then i will go to something else. hearing people say we should restore the full deduction. that means is people in new york who fund the federal government will pay less than people in texas for federal funding. shouldn't people who make the same around the country fund the government the same? it would be great for me if we restored salt deduction, but i don't think that's right. i think for funding the federal government -- i work in new york. i should pay the same as somebody who works in florida to fund federal government. the fact that my state government costs three times as much for the same services makes me angry. but we should deal with that at the state level, not by giving people an extra salt deduction. >> i thought you were going to

move on. i didn't know where. but now they're telling me we're moving to a commercial. >> look, in our article, we say one thing really important which is the policies that justin is advocating for are european policies. administrative state is european policies. europe over the last 20 years has grossly underperformed to the u.s. we have a live experiment about the policies. we should look at europe and say that's not what we want. >> great line, great rich creamy sauces though in france. in italy. who doesn't want to hang out in italy? who cares about the taxes? >> it's a great place to visit. >> it is. thank you. a lot of great things over there except the economy. >> except the economy. top stocks to watch as we head to the final opening bell of the week on wall street.

stay tuned. this is cnbc. it's time to grow your business.

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a little more than a half hour to the opening bell. some of the top premarket movers. >> we are going to start with

shares up around 14% after reporting a beat across the board in the second quarter. revenue improving by more than 20% year over year large by with the hoka and ugg brands. gross margins of 55 to 55 and a half percent. it is up about 55% year to date. digital realty trust joining deckers as a prepremarket performer after the trust that specializes in data centers reported in results with continued demand for cloud computing, artificial intelligence, boosting data services, shares of digital realty up about 36% so far this year. apple is edging about 1% lower, weighed down by downgraded key bank taking it from under weight to sector weight. they site consumer data on

iphone se that points to potential lack of growth opportunity. something else to keep an eye on for apple, gap between apple and nvidia continues to narrow as they move slightly higher. apple is the most valuable in the world but about 61 billion separates the two. for more on that, head to cnbc.com pro and subscribers get more on all the calls of the day. i will send things back over to you guys. >> thank you for that. dodgers or yankees? did you decide? >> i think i have a go with yankees. >> they're not favored. >> i was a giants fan growing up. giants, dodgers don't mix that well. >> no. that's the way it is with intrastate team. what do they call it now? the guardians, i think.

is it indian summer? i don't even think you can say that. final check on the markets, a quick look, up 125 now. they've added gains. nasdaq up 114, s&p up 24. ten year which has become more noteworthy is around 4.2. join us next week. it will be tuesday the fifth some day. sidewalk on thesquawk on the street is next. >> good friday morning. welcome. futures are in the green as squeals stabilize a bit, dollar index below 104. we'll get set up for next week where we will get earnings, jobs numbers, gdp and more. boosting elon musk'sos