nasdaq is in the red, too. s&p down about 8 1/2 points. let's look at the ten-year quickly. 4.32%. it did seem to tick up a little when we were talking about how screwed we are. make sure you join us tomorrow. "squawk on the street" -- >> it will be better. >> we'll be fine. good tuesday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber. futures under slight pressure as the ten-year climbs to 4.32%, highest since july. pfizer, royal caribbean, sofi, paypal all guiding above. our roadmap begins with a parade of blue chip earnings, and mcdonald's comps fall more than expected. pfizer did hike guidance and

ford cuts to the low end. >> china reportedly considering a new $1.4 trillion stimulus package with the u.s. election being a key driver. >> and subscribers flee and staffers resign. billionaire jeff bezos defends his decision for a non-endorsement at the "washington post." let's begin with mcdonald's. they beat on both the top and the bottom line, got a slight miss on comps moments ago on the earnings call. ceo chris kempczinski did address the e. coli outbreak and its impact on the quarter. >> i want to address the recent e. coli cases related to slivered onions in a handful of u.s. states. while the situation appears to be contained, and though it didn't affect q3 numbers, it's certainly an important development which i know is on many of your minds. for over 70 years, mcdonald's commitment to food safety has been uncompromising. i'm relieved that this situation appears to be contained and i

remain confident in the safety of eating at mcdonald's. let's turn now to the update on our performance in q3. on our last call we shared the qsr sector had meaningfully slowed in markets with declines in several major markets and that consumers, especially those in the low income category, were choosing to eat at home more often. this trend continued in the third quarter. qsr traffic has remained under pressure, reflecting industry-wide challenges. while we anticipated a challenging environment in 2024, our performance so far this year has fallen short of our expectations. >> even with the value dynamic, traffic still negative. and international also was a miss. >> it's really interesting that the stock held in there. it was up dramatically before, low $300s when this outbreak occurred. it was all just a belief that

the $5 was really putting on the floor, and it turned out to be a false floor. the $5 was more anecdotally good than good. the government has not helped them that much. but, david, throughout this period in the last three, four days, whether it be d.r. horton, that's starter homes. mcdonald's, so-called starter food. we're discovering that people just say, you know what, there's really been a ridiculous amount of inflation. i think that's the zeitgeist. there's been too much inflation. so there's this kind of, let's just eat at home. >> there hasn't been inflation any more than last quarter, mcdonald's, i don't understand. >> you know how yesterday, carl, i posited something that was hard to understand and i was ridiculed by my partner?

you can ridicule me all you want. >> it may just reflect the weakening to a certain extent of the consumer. that's the margin. >> yes, that could be. but i think the consumers are still fed up, because they got the sticker shock. >> they weren't fed up last quarter, now they're fed up this quarter? >> i think they thought that things would come down. >> but they have come down. am i wrong? >> food basket is in deflation. >> okay, let's look at it this way. you go to walmart -- i was in costco last weekend, not just because of the samples, all right? you go to walmart, you go to costco, food is so cheap, and those companies -- they have done more to fight inflation than any other companies on earth. but they also make it, you know what, i know how to cook, i can cook. i don't need to buy their hamburgers, i don't need to get fat on their food. i can have thin food. i'm telling you that it wasn't

just that these guys raised prices, but costco and walmart have held the line and they've done a remarkable job. and the stocks are saying the same thing. >> maybe the consumer is being stingy because they're saving money to go on a cruise. the commentary out of rcl, higher rates. >> disney has got a bunch of cruise lines coming up. they've got new ships. royal caribbean turns out to be the bargain. i have a friend right now on a cruise. she was basically, don't bother me, i'm on a cruise. i'm having too great a time. i don't ever say i'm having too great a time. but people are saying, look, it's remarkable -- oh, come on, the stock is down. okay, fine, profit taking. but the market is in a bad mood. >> market is in a bad mood. that's the kind of insight i think our viewers look for. >> a deep analysis. >> we haven't had an all-time

high -- >> boeing was a good deal. >> i'm not in a bad mood, so there you go. >> okay. >> i might put you in a bad mood. >> if you've shopped or done anything, you would know that $7.5 for an egg mcmuffin. they started at $1.79. >> i would not know. i'm completely immune to the impact of inflation because i never buy anything. >> remember the interview with alex crisp? now it's almost back because the quarter was actually good. i don't think you'll see profit taking. royal caribbean, it's the nvidia of cruise ships. >> we've got a lot of earnings to get through. pfizer, of course, another one that we have to -- >> paxlovid. be careful. >> pfizer is up in the premarket. >> how much of it was paxlovid? >> a lot of it. >> do you count that versus cancer drugs? >> i don't know, jim. certainly it's an important franchise for them still, covid.

it's not unimportant. >> i'm obviously on edge, because of the slap-down you've given me. let's just call it as it is. let's just hr me. i'm going to write you up. >> i rely on you to tell me. >> i've got 2 million people, i'm writing you up. >> the mood of the market is important. >> i'm saying that there is a notion -- when you look, carl, here is the zeitgeist of the quarter, we thought we were doing well. we got the fed rate cut. and then instantly rates went up. so what we thought was going to win is now not so good, so now we've got to rethink everything. d.r. horton, it turns out what we thought was good is not like 1995 when the fed cut and rates went up. that's what's going on. >> all right, that makes sense with the ten-year, 4.32%.

what are we? see that? he's excited, he's in a good mood. i'm in a good mood. we all love each other. there it is. >> i feel so good. that whole episode is over. >> we're moving on. let's get back to pfizer, if we can, for a moment. i am curious to get your take in a curious way. paxlovid, without a doubt, increased utilization and stocking ahead of the season. the conference call is not until 10:00. >> look, i have to tell you that -- can i just say that if you go back to every word he said, he never said that cancer drugs were going to break out this quarter, never. and yet everyone kept thinking, you know what, they're going to break out this quarter. he said up and down they're not. and so now, instead, the beat is from paxlovid. oh, it doesn't count. what i would say is -- >> it's not like it's going away. it's still going to be a therapy available via pfizer, and sadly, covid is not going away, either.

>> did you get the shot yet? >> i haven't. >> everyone says it's best to get it -- >> i'll have the flu shot, which i expect 30 rock will make you get the covid shot. they ask you and they stick it in your arm. >> i think pfizer is good. i think when you initially saw it, it seemed great. then you realized, wait a second, paxlovid is not one off. when you saw the melanoma numbers, you were hoping it would be good. there are a lot of cancers you're hoping to get information on, maybe on the call from their acquisition. i remain to be positively inclined about dr. bourla in the next two years of rollouts of numbers from hard-to-beat cancer, which is what he was specializing. >> as a result of paxlovid the revenue guidance is higher than it had been for many analysts that had been anticipating, let's call them in high $50 billions, it's going to be low $60 billions.

a week ago i talked to jeff smith from starboard, activist investor in the shares, and demanding change without giving any specifics whatsoever. by the way, this is a firm that -- remember when ed darden came up with new recipes? they're not doing that here. they're simply saying we would like your capital allocation to be better. it's sort of a difficult thing to ask for. do better on r&d. >> did you see the cost cuts? $4 billion, he did a great job on cost cuts. >> but here is smith from last week to sort of re-up that in terms of the ongoing pressure that pfizer is going to be under. >> we've been involved in companies that haven't been performing all that way, and then we come along and management understands that things need to be different and they change. they change dramatically and they perform much better. we don't know which of those -- we never know which of those is the right answer. what we like to do is work with management and work with the

board and try and figure out what's the best answer. what i will say, something material needs to change. they can't just close their eyes and assume it's going to get better. because you said, david, properly, what can i do about what they've done in the past? they can't do anything about what they've done in the past. but today is tomorrow's past. >> you've got bourla tonight. >> look, i want to focus on -- i really like jeff, he's fantastic. but jeff would tell you -- you know, marc benioff is not going to be on tonight. this is what he's been saying, you have to wait and see, we don't know. carl, look, my mom died of cancer and i'm really interested in what he's working on. it's understandable that if you can beat the cancer she died of,

there's four other cancers that you can also be. and none of them has really had much luck. so i think that bourla is setting up for a remarkable period if c-gen pans out and he will turn out to have not overpaid. but he's got to start showing a little bit of what's happening. >> again, you don't see any risk from a trump white house that is sort of skeptical of vaccines, right -- >> great point, that is a risk. i know that i used to watch the president's 6:00 show, which you said would kill "mad money," but i was still alive and his show went away, just for the record. the number one show. my show was number one. his show, no. my show, yes. number one, david. >> that was important. >> he was really concerned, he didn't necessarily buy into the notion of what did work, which

was the vaccines. and i think that -- >> we're going to go to ford. my producer told me -- >> we're on air. you interrupted me. i'm talking about pfizer. >> interrupted you? that's shocking. >> you know -- >> who would ever interrupt anybody on this show? >> hr is very powerful. i was going to say ford, what we call the b block. i'll go for it now. >> we can't. we've been told we have to move on. >> yes. >> the voice of god? i didn't hear anything. >> i treat it as such. >> no one told me. >> then we'll get to ford. we'll also talk news regarding china today where stimulus and the u.s. election are coming into play. we'll get to jetblue, crocs, boeing in a minute.

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$1.4 trillion in extra debt over the next few years. sources told reuters the fiscal package could be approved next week and is expected to be bolstered if former president trump wins the election. jim, you had some thoughts on this this morning regarding what exactly you buy if you're into this. >> right. look, they keep trying to get you to buy real estate, and the problem is, if you -- in our country, you buy a house, the house goes up in value, you're happy. there, you buy an apartment and your apartment goes down, no thank you. that's the deflationary spiral they're trying to break and they can't do it because they've not chosen to give the money directly to people. look at nike, tall the companie involved with medical are not coming back. what's happening is it's just not impacting the consumer. so, carl, if it's not impacting the consumer, then all you do is have this kind of momentary

stock blip, people buy alibaba, and then what happens, because no real money is getting to people. it's just getting to developers and the state-owned businesses and all these stocks go up. that's just fund managers in america saying, i can't miss it. >> there continues to be an expectation after a series of announcements a number of weeks ago that was followed by a huge rally for a couple of weeks and then a pullback, that there will be a follow-through with more actual money. the reuters report would seem to put some credence do that. $1.4 trillion is not an insignificant sum for them to potentially be spending. if it does get into consumers' pockets, you would imagine it might have a positive impact on their confidence, on the property sector, which is where, as you point out, so many of the losses, so to speak are --

>> vice president harris, she's saying they're offering $25,000 for a home buyer. she xi should listen to harris. that would be good. that's what you need to do. you need to write a check. >> yeah, but people are under water in their homes. there we should point out there isn't quite the same social safety net as we have in our country. so, your ownership of property is a nest for your savings for the long term as well. >> look, we've got to remember closely what xi was saying, this could be a $7 trillion problem. i wanted the government to do a resolution trust where they put up a trillion, which is a lot of money, and they said i was underestimating by a factor of seven. holy cow. >> this report out today, the number of billionaires there has dropped by a third. everyone is trying to expatriate money. apple, india exports -- >> did you see that.

all these people, apple is going to have a shortfall, there's no doubt about it. but if india -- remember, 1.4 billion, you want to be levered. >> we will get cramer's mad dash in the opening bell. taking a look at the premarket as futures wble oba bit from higher yields. stay with us. when it comes to investing, we live in uncertain times. some assets can evaporate at the click of a button. others can deflate with a single policy change. savvy investors know that gold has stood

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let's get to a mad dash with jim. we've got about seven minutes before we get to an opening bell. we briefly mentioned shares of d.r. horton. they are going to be down after earnings. >> yes, and there are a lot of tale tales to this one. they're a good operator, a lot of people view them as first-time buyers. the first-time buyers have pause. i think they've paused because first rates went down and now they're back up. horton, you're always trying to find a silver lining, and sometimes the numbers are below expectations. you can't something folment something that's positive when management says things are light. it's frankly one of those situations, toll brothers, a million dollars, i think that's

a mistake. 35% or 35% of people paid cash. >> right. >> but, david, this is going to cast on a lot of stocks because there are so many people who are betting when you have rate cuts that the buyers would come in, start buying homes, refurbish homes. we're not getting that. home depot, i shuddered because i said they're got giving this company any grace period at all for the rate cuts to kick in. this did feel like a november -- >> let's put it in perspective here. i just want to see what the stock has been doing. >> this has been a great stock. i'm glad you did that. >> let's look at that. give you a better sense. >> this is an excellent operator. so when you see them miss, what that says is it's the economy, it's not them. >> right. >> and the economy is pausing, the people who were trying to buy that first-time home, they're saying, you know what, the mortgage is too high. >> net sales in the fourth

quarter increased slightly from the prior year, 19,035 homes. sales pace in line with normal seasonality from the third and fourth quarter, but was below expectations. >> yes, affordability is an issue. it was supposed to be 94.5, there is inventory in the system. i just don't want to see this, which is a premier company, miss. >> this during a period where rates rose dramatically. >> today is going to be a bad day. put this in perspective. this thing has not missed in ages and ages. someone is going to say royal caribbean didn't do well today. that's different, they did well. this is a situation where the rate cuts didn't work and that's what you have to be thinking about. did the rate cuts not generate good growth? and that's what i'm worried about. >> we'll be right back.

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quality, obviously, and the slow uptick of evs. electric architectures are hard to execute. the software journey and the technology for the company is, you know, big know-how. we're already at 20 million otas. that's going to be a more and more important capability of the company. so there have been surprises, but as i said, we're really well positioned in the short and midterm. >> that's ford's jim farley talking evs on the call last night. automaker forecast full-year profit at the low end of guidance. he talks about surprises, some of those involve supplier disruptions. >> it was a painful call because farley is an optimist and he told a good story for how ford is doing. but he does then leave the heavy lifting to the cfo and the call is flying, and then it's just, boom, dropping, because it wasn't a good quarter. and it wasn't a good quarter because we now find out there's a big problem in turkey.

well, i mean, i don't want to discover that turkey can be a big problem for them, since i didn't even know turkey really mattered. and then it's constantly bothering this company, they just don't go away. and warranty speaks to quality. david, when you have endless warranty, what happens is you have a vintage 2021 and the warranties pop up. so i'm pulling, but no buyback, it doesn't matter, they don't want a buyback stock. it was not a good quarter. it just wasn't a good quarter. >> by the way, opening bell here, big board, paramount group, celebrating ten years at the hydrogen fuel cell company. >> talk about a loser. >> finishing up ford, losses a

little smaller than expected. does it matter? >> i thought that was good. but, no, because i would have thought that the internal combustion engine division would have done much better. the hybrid business was good, but not big enough. but in the end, you come back and say, guys, you can't keep doing this. you can't keep missing after what you just -- you can't say $10 to $12 billion ebitda and then come in at $10. there's always something that pops up. the analysts are saying, you know what, no, gm is blowing the numbers out. >> right, and particularly on that side of the business. ford, if you want to be positive on the company, which i know you have been, what do you attach that to at this point? you have to have growth in ev, which seems very uncertain. >> if the warranty problems would end, i think they could have done $12 billion.

jim farley thinks it's good inventory and they'll sell it. d.r. horton, if you want to draw an analogue, you're not going to sell that inventory. i was sad, because i really felt this was the quarter where they were going to be able to do it, and they just didn't do it. carl, we're all getting tired of the company saying, look, we almost have it, we almost have it. because almost, this is not horseshoes. jim farley must know this is not horseshoes. do you know know? >> i know the joke, horseshoes and hand grenades. >> it's so close, but not close enough. and that's the problem. and i just feel like, oh, my god -- because when the number comes out, people feel like, well, they did it. then you start parsing it and you get to waller and these are all good people, and you say to yourself, turkey, huh?

this isn't thanksgiving. are you kidding? turkey is that important to them. then you say, i can't, i can't deal with it anymore. i throw my hands up, like adam jonas, and just say, you know what, i can't do it. >> you think it's a bit of exhaustion? >> it is, it's exhaustion. because they have the best trucks, they did not lose as much money, yes, to tesla, but they're not making any money. it comes back to say, the recalls don't stop. it's recall. and they're even talking about how they're fixing the recall business. but this is a recall per share, and that's the problem. >> we've got an election a week away. i don't know if people know that. obviously early voting has begun in, i think it's 44 states. >> about 40 million have voted. >> wow. interesting to note, shares of -- >> you're not going to go to

djt? >> i am. >> do you have anything particular to say? >> my insights simply are based, in part, because a number of people have mentioned it to me, and there's a lot of regret amongst the hedge fund people i speak to that they didn't buy it when it was $15, if you want to use it as a reflection of the likelihood that former president trump regains that office, go ahead. clearly that's got to be a key reason. i would note, we've got them at 114 million shares, the lock-up has expired. >> yet they're not selling it. >> $5.7 billion is his current stake. and, jim, i'll leave it to you to opine on what happens to the stock if he wins versus what happens if he loses. i would assume if he loses it goes down a lot. but i'm not sure how much it goes up if he wins. >> we've never really had a

stock that has no prospects. it's almost like a share of the green bay packers. it doesn't matter, there are some people who say, i want to be part of draining the swamp. >> you could imagine a scenario under which many of his communications are over this platform, and therefore, because he's president, we're going to have to monitor it with regularity. >> elon musk is his number one fan. >> there's also speculation -- >> are you going to say, would he buy in? ridiculous. >> you just put that out there, and then shot it down, which i respect. >> thank you. i like the ongoing commentary on my commentary. that's what i live for. >> it's a reverberation chamber. i like what he's saying. but i looked at the stock today, and i said, if you were president trump, i would file a $1 billion shelf and just block every other ad.

i'm watching the fabulous philadelphia eagles this weekend and we went from firing the co coach. every other ad is an ad for trump or harris. you have ten days. just spend a billion and blanket it so no one else gets to advertise. that's what i would do. >> the other trump trades that are pricing stuff in, jim, rate options, bitcoin, five-month high. >> yes, absolutely. and the president has totally acknowledged bitcoin. >> which president? >> president trump. >> he's not the president. >> he's the former president. people call him that. >> it gets confusing. >> there's a discussion this morning about why these price action is happening. some argue it's because the policy that you get out of a trump white house is more defined and more out of the money, perhaps, than a harris presidency. does that make sense? >> yeah, but there's a thing called the bond market and

prospects, the bond market is wrecking the stock market. although, yes, we're at a high, but today is a bad day for the bond market. i like that analysis. what i really think is there's an animal spirit enthusiasm for trump media. it's kind of like -- dave, you can shoot this down, but people want in and they can't just buy a piece of trump. but they can buy a piece of trump media. and they like that. >> although, they've been able to do that for some time. the move really began when i think there was a sense that the polls were moving in his favor and he was gaining some momentum. the stock was $15 a couple weeks ago. >> how long can a no-earning situation continue? we saw it with gamestop, it went to $400. >> i was going to mention that last night. >> should he lose, one will imagine that it will start to reflect its lack of potential opportunity for significant profits. >> i think that's true.

but normally if you want to get a stock down, you need sellers. i think there are people who will swear to donald trump, win or lose. >> short interest on this i think is pretty light. >> it will be interesting to watch. we'll continue to watch it. i want to move on to a name that i don't tapestry? >> a name i don't mention very often. health care, big owner of hospitals. quite a turnaround. it's been going on for some time. i don't want to indicate it's a sudden turnaround. even this year, their original guide was about $3.385 billion of ebitda, the midpoint. now they're guiding to $3.950, so additional ebitda from when they began the year. leverage has come down dramatically. it had been almost six times seven or so years.

it's now 2.2 times. it would seem to put them in a position to buy back even more stock. but you can see the response there. they did have -- he's not new, he was hired back in 2019, and they have grown ebitda significantly since that time, reduced debt, and had a quarter in which they, once again, raised their financial outlook. again, owner of hospitals. they have been divesting some hospitals as well. i think 14 hospitals this year. so growth and ebitda is even more so, given they don't own the hospitals they had owned previously. so you're talking about significant growth, despite those divestitures. >> if you look at hca, the biggest, huge amount of revenues, that stock got hammered when they reported. but if you go underneath, a lot of it, there were two

hurricanes, helene and milton hurt their numbers. if you look at the numbers they put porfor the hurricane, they a similar quarter to tenet. i think you want to buy hca. and not to slam the tenet people, but hca is a superior operator. that may be the play. >> you think so? >> i do. i think very strongly that's the play. because it's one off, the hurricanes. >> jim, we mentioned horton at the board. another story in the same vein, stanley black & decker are going to lead this morning. >> we own stanley. it was the tenth best performer in the previous quarter. the quarter, they beat on earnings, they did not beat on revenues. the stock should not be down $13. i would buy the stock, i would buy the stock aggressively. this was not a bad quarter, but you do have in the conference call and the verbiage, they say, look, we don't have the numbers we would like. this, again, like horton, they

don't have the numbers we like because you need to have some pickup and belief that your house is going to gain value before you decide that you're going to go buy dewalt or black & decker. they are not liked by wall street. allen is not a well-liked guy on wall street and i don't know why. >> i remember days when it was all-time highs all the time. they are citing lower auto production, too. >> i did want to hear that. you just buy the stock. i mean, you have a 3.65% yield on a company where there will be no downgrades. if you believe there's a rate cycle coming, that's the stock to buy. it did run up to $106 when they reported last and i totally respect that. you would be surprised, there are stocks that are opening down big, like mcdonald's, opening down7%, then it's up 5%. the first trade has not been the right trade. >> paypal down 7%.

>> that's another one that i thought was just fine. >> you did think it was fine? >> yes, i thought alex chris did a good job. >> revenue is up 6%, transaction margin dollars increased 8% to $3.7 billion. >> the stock was very hot coming into the quarter. >> it was, up about 31% or so. >> look, i'm saying that there's a severe overreaction. royal caribbean was down 11% when they reported in the premarket, now it's up 3%. there is just a moronic first trade moment here. you can't say, oh, look at that, that company is doing really poorly, the stock is down. because what happens is that instant analysis makes no sense. i thought mcdonald's did a good job, it wasn't a great job, but it was up 6% yesterday and -- >> to your point, pfizer shares are down 1%. and then back to ford, which obviously you discussed. jim, i've got to come back at

you again. >> sure. >> you still own the stock, right? >> which one? i blew that out to kingdom come and boeing, by the way. >> i was giving you a hard time about it for months. >> you gave me a hard time on boeing and i don't know where i kicked that out. let me tell you something, thank you. >> i saved you some money. >> well, i'm about to suck up to david. those are really great calls. and i took them to heart. one of the reasons why i think paypal is good, is because i remember the interview with alex chris -- >> that interview. >> i got out of ford and boeing. you could say i didn't want to be subjected to your ridicule, or i could say that you were right. >> i was just listening to you. you ultimately listened to yourself. >> do you remember dom d--? >> he was funny.

you would say negative things about boeing and i would say, why do you own it? >> i did not -- david was right. i was sitting here, carl, saying they're not doing well. david was positing, if they're not, why aren't you selling it? i went to david marks, and said, why am i owning a stock i don't like? i feel very good. if you were on the boeing call -- >> they priced the offering at $143. a bit lower than perhaps some had thought. $145 was sort of the number yesterday. but it was $143, they priced it last night. and, remember, it's $5 billion to convert, but also $16 billion worth of stock. so they raised $21 billion. guys, when was the last time a company raised $21 billion? >> when boeing did the bond deal. you're right. the deutsche telekom sale, that

was big. >> that was secondary. >> david, you should explain, they got the money, they'll live to play again. so why not buy the stock? if they didn't get the money -- >> there is a thought that it's a clearing event. >> it was. >> speaking of secondaries, kdp is benefit fwring from the secondary, right? >> we've been waiting for the secondary to occur. and one of the things -- there's a guy that we've had on, and bob is a remarkably good -- pinnacle foods, remarkably good operator. i've been waiting for the overhang. i think the stock has literally been down 8 points because we thought the deal was going to come. that's why that can bounce. >> dr. pepper is down right now, about 3.5%. >> we all knew the deal was going to come and there would be a buyer because the company is doing quite well. the sale was not, wow, we don't like keurig, we're going to get

out. >> it kind of looks like paypal is giving back a recent run. >> sofi, this is the third time they've raised numbers and they've been abject to be able to say, look, we are no longer a bank. the stock, again, this is a good example, the stock was up 60 cents at 7:00 and someone paid that price. the reason i'm emphasizing this, lynn martin, our great landlord here, they're embracing longer hours. robinhood started it. and the amount of money that's being lost, it's almost criminal, the people who are not waiting to hear what the conference call is, trading off of headlines. caterpillar is going to report tomorrow. the headlines have very little to do with reality, which is inventory. you can't put everything in a headline. people bought sofi this morning at 11 and change and now they're thinking, what do i do? how about rethink your game plan? how about waiting so there's

price discovery when you get a real market? david, you know from the wild west days in the '90s, you can't just go in and say, you know what, i'm buying that stock. >> yeah, it's a very liquid lack of transparency. >> they're losing money. and i know you're against it. >> i want people to make money. amazingly, we're 47 minutes in. i think you mentioned apple very briefly. >> and no nvidia. >> we didn't mention nvidia, alphabet, amazon. >> cadence was a good analogue to nvidia and i like the sovereign story. but i did, i held back because of the pedestrian stories like horton. vf corp., you know i like him. >> almost a one-year high. >> i'm telling you, he's making the story about north face, not van's. and the fact she's coming on is

fantastic. >> great guests. su tomorrow. >> i work the phones. dr. bourla, i'm trying to get johnson from merck, are you in? you play it like that. listen, i've got ralph lauren. do you want to come on? that's what you used to do when you were a reporting. listen, i've got a really good -- there's a plane crash on line one. they were doing horrible things. the psa crash. >> as we go to break, we are going to get google, the first of the mag seven earnings tonight. jolts is coming up in about 12 minutes, and some conference board numbers as well. as we said, equities are watching yields with the ten-year at 4.32%.

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being without a dog, i don't know, can't imagine it. [laughter] jim has mentioned some of

the names being affected by rates today. we mentioned some of the home builders, horton, watched some of the suppliers. home depot down about 2%, with the overall index down. we'll be back in just a moment.

jim, what's on mad tonight? >> pfizer, dr. bourla. we mentioned that and i think that's a battleground, a battleground state, not unlike nevada and pennsylvania. then there's reddit, which has done incredibly well. my question, and i'm going to ask steve huffman, if you're using meta ai, are you paying him? i can't wait for the show. >> so much of it, they're using reddit to run the large language models. >> and i think that huffman's stock is undervalued as it is. i want to find out more about that. >> he's been selling a few shares lately. >> yes, but you know what, there was a time when it wasn't worth anything. and i just think that huffman has done a remarkable job. he had to go into a situation where you had people who are on all the time and suddenly they see a lot of ads. they thought it was a mission statement not to have ads and

they junked it up. i think what he's done is making it an extraordinary advertising venue. i'm very proud of him. >> one of those ipos that was a long time coming. >> what a great job he's done. >> we'll see you tonight. >> absolutely. i know you're working onsome guests. >> i'm always working on guests. usually failing, but working hard. >> you're going to, where, dubai? you're just something. me, i'm going to watch the yankees make the greatest comeback in history. >> that would be unprecedented. >> it's done. there was a good red sox comeback. >> there was. it's unlikely. highly unlikely. >> "mad money" at 6:00 p.m. en.tern time oping losses, dow down 60. stay with us. and using workday to put finance and h.r. on one platform. tim, you are a rock star. using responsible ai doesn't make you a rock star. it kinda does. you are not rock stars.

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good tuesday morning. welcome to another hour of

"squawk on the street." i'm carl quintanilla. melissa lee is in for sara eisen, on assignment. david faber here. yields are putting a lid on equities for the most part as the ten-year gets to 4.32%. we'll look forward to the first of mag seven earnings tonight with alphabet. >> we are 30 minutes into the trading section. here are some of the ones we're watching. shares of d.r. horton are dropping, earnings coming in below estimates, saying interest rates are keeping buyers on the sidelines. f5, a top gainer on the s&p. at least eight firms raising their price targets on this name this morning after strong numbers and an upbeat forecast. jetblue, earnings beat, but full-year revenue missing estimates. paypal, revenue falling short. the fintech giving a weak revenue outlook, down 6.5%. >> jolts in consumer confidence. let's get to rick santelli.

>> this is a september read, we're expecting the numbers somewhere in the vicinity of 8 million openings, and last month it was revised, came in at 8,040, now coming in at 7,061. this is the lowest read going back to january of 2021. in terms of the conference board, consumer confidence numbers, they are coming in, trickling in. i don't know if there's an issue this morning. but headline number expected to be in the vicinity of 99.5%. comes in much better than expected. at 108.7. that ends up being the best level since january of 24 year. it's the second best level of the year. and if you look at the present situation, it comes in at 138. that follows 124.3. that's a blowout number.

that's the best since may of this year. and, finally, what may lie ahead in the form of expectations, 89.1 blows away the rearview mirror at 81.7, and 89.1, that becomes the best level going all the way back to december of '21. so, we see that yields move down a bit. now they're coming back up. but maybe the most important number this morning was much earlier. we had an advanced trade deficit that came in the second highest level ever, going back to 1989. we could talk about what the election may do ahead, but, boy, in the here and now we have some issues going on. imports much stronger than exports. but the confidence data, much stronger. the high yields of the session today, as carl referenced, that would be a four-month high close, haven't closed near that

level since the first few days of july. carl and the gang, back to you. >> i'll take it. that is quite a story, 4.30% right now. let's get to some of the bigger earnings names this morning. pfizer, for example, you can see the stock down about a half a percent. this after a beat in guidance. angelica peeble has more on the numbers. angelica? >> david, this is exactly what pfizer needed, this big beat and raise. but what's interesting is where this beat is coming from, and that's coming from its covid portfolio. so in the quarter, paxlovid, the covid antiviral, that beat estimates by about $2 billion. and its covid vaccine also coming in about $400 million ahead of estimates. remember, pfizer is trying to move beyond the covid franchise and get people to pay attention to what else is in the pipeline and portfolio. one area that it's focusing on a lot is cancer, and we saw some pretty mixed results there. a few of those drugs from seagen coming in a little bit short.

so we're going to want to hear more from pfizer on the call about what is happening there in cancer. jpmorgan saying that pfizer really needs to see more progress in the portfolio and in the pipeline to significantly change the narrative, and the big question, of course, today is will this be enough to get starboard off of pfizer's back, and will this be enough for the company to get investors to buy into the story? and one area where pfizer is trying to make progress is obesity. the company saying it expects an update on its experimental pill early next year. it's also highlighting two other early stage pills in the pipeline, so, again, we're going to want to hear more on the call today and see where those stand, guys. >> yeah, obviously those are important. it seems, angelica, the market is more or less discounting any unexpected gains in their covid portfolio at this point. it just doesn't seem to matter. is that a fair summation?

>> i thinkthat's exactly what pfizer is trying to do. they're trying to talk about everything else it's working on besides covid. again, covid is the story today, and we also could hear more about it next quarter, because they're saying that covid vaccine sales will mostly come from q4. so as much as they're trying to move the narrative and get people to pay attention to cancer, also talking about the obesity efforts, right now covid is the story today. so it will be interesting to hear what they have to say about it. >> angelica, thanks. one of the many important names we're watching. another earnings name is mcdonald's. that is a beat on the top and bottom line, reverses this decline in same-store sales at u.s. locations. important to note, the report did not mention the e. coli outbreak in 13 states linked to the fast food chain's quarter pounders. but it was discussed at the top of the conference tall. david palmer joins us with his take. we spoke a few days ago, david. it's good to have you. i guess, to what degree has e. coli interrupted what was

apparently a nice traffic trend as value had come in line this summer? >> it's obviously a shame on many levels, obviously the consumer, but also the operators and the company. they had done a great job of building up the traffic numbers through what was a really bad start to the third quarter. july was really rough. big month for the quarter. they were down, and down even more significantly in traffic. but with four for $5, they were getting trade down, but they were starting to build that traffic up. then they dropped the chicken big mac and re-inflated and things were off to the races in the fourth quarter. they talked about how they were up mid single-digit comps against a very soft industry backdrop that was very impressive in october. then this food safety issue hit. so, what a shame that they were seemingly getting it going and then this hits. overseas, things are definitely rough as well and the company is

in mid pivot, adding some more value to some of their key markets like the ones in europe and germany and the uk. that's a different story where they're clearly dealing with soft international trends as well. >> that was a big miss, david. global comp sales coming in down 1.5%, the expectation on the street was down 0.6%. we also heard the same sort of international weak story from domino's pizza not too long ago. how sticky, how much of a problem do you think this is going forward in terms of the number of quarters they're going to have to deal with this? particularly when we're looking at china doing a massive stimulus for their economy? >> china is not as big of a deal for mcdonald's, thankfully for them. it's only a few percent of their profit. it's a licensed market. but they did call that out as one of the more negative markets. so while the market seems to be getting more bullish about china, it's not the here and now. and we're seeing that again and again. in terms of europe, mcdonald's

has a very strong leadership position. it should be able to adjust some of its menus overseas, and they did that. they launched some $3 combo meal items, and, of course, in germany they have one called the mcsmart. they've broadened that. so they're in mid adjustment. but clearly there was another level of weakness in many of their key markets and we are hearing this from some of their peers as well. >> so, david, is the food safety episode a bit of an intermission in this longer traffic trend, or do we have time to look to other favorites, whether that's a shake shack or some of the other newer names in the space? >> well, the ones that do have the momentum right now tend to be the ones in the fast casual space, like chipotle. they're due to have a very good quarter and they're off to a good start in the fourth quarter. the problem with some of these names is valuation. the ones that have the best valuation set up often have some

near-term results that are a struggle. you can see, for example, starbucks would be a turnaround of restaurant brands or darden. these are the type of names that are dealing with struggles in the near term. but texas roadhouse and chipotle, they have momentum and good upside, but not great upside. if you're going to be looking for significant upside, you're going to have to be patient into '25 with some of the names i mentioned. mcdonald's is taking an intermission, obviously the food safety thing, the consumer has to get over that. i wouldn't be surprised if these guys moved some of their chicken innovation forward because that's something that doesn't remind people of the onions that seems to be the root cause of some of the food safety issues. but with chicken innovation, i think these guys can help the consumer turn the page and get the comps going again in the u.s. >> earlier in the year, david, one of the stories was that the company might actually start turning to unit growth, right, now that they had a little

pricing power, step on the gas on restaurant growth. does the complexity of the kitchen and supplier management, does that suppress that story? >> i don't think so. mcdonald's was dealing with a lot of retardants to the unit growth around covid, as was everybody. it was really tough to open units. the returns have gotten better, franchisees are making a lot of money, mcdonald's even with the hit, thankfully for these franchisees they're getting good cash flow. in the sun belt there's still not enough mcdonald's. it's hard to believe they can place them, but they can. we would expect them to get going with that, even with some of these setbacks. and i wouldn't expect the consumer to be much more than something in the few months range in terms of this being a major headwind. we expect that with innovation and with no new news on the food safety front that the consumer can move on. >> appreciate your help the other day when the story first

broke, dave, and especially today on the quarter. thanks, as always. >> thanks, carl. as we head to break, here is our roadmap for the rest of the hour. investors hitting the brakes on ford on the back of its outlook. a closer look at what is sparking fears. >> alphabet kicks off earnings from the magnificent seven this week. it reports after the bell and we'll get you ready. >> "squawk on the street" heads live to saudi arabia where sara eisen held a roundtable discussion with dozens of financial chiefs. david solomon among them. you'll hear their take on the election, rates, inflation and a lot more as "squawk on the street" continues. ♪(voya)♪ there are some things that work better together. like your workplace benefits and retirement savings. voya provides tools that help you make the right investment and benefit choices. so you can reach today's financial goals and look forward to a more confident future. voya, well planned, well invested, well protected. the all new godaddy airo helps you get your business online in minutes

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xfinity mobile. now xfinity internet customers can buy one line of unlimited and get one free for a year. shares of trump media and technology group have been haunted for volatility a few times already in the early going in the session, less than an hour old at this point. you can see the stock up again, adding to a rally that has been ongoing, let's call it, for the last month, a little more than that. the stock was as low as $15 back in the middle of september, towards the end of september, in fact. but has moved up appreciably, perhaps as a reflection of the likelihood of a trump victory in next week's presidential election, or at least that's the final day of voting. we may not know the victor for a few days, potentially. but, melissa, he owns 114 million shares. so when you do the simple math,

somewhere around $5.7 billion for mr. trump right there. >> it's interesting to watch these proxies going into the election. you can argue bitcoin is one, above $70,000 for the first time today. that is seen as a beneficiary of both harris, as well as the trump administration, maybe a little bit more so for trump. tesla, arguably, could be another stock that you can watch in terms of benefiting from a trump administration. we're watching all of these in the lead-up to the election. >> and i would point out, win or loss, there's going to be significant potential moment in shares of djt. of course, if he loses, the stock will most likely plummet. that said, i think 100 calls from moved up from $2 to $7 just in the last week. >> wow, that's a nice profit. >> yeah, very nice. let's move on to ford. those shares on pace for what was going to be the best month it's seen since december of last year. no longer. tough guidance from the company has sent the shares in reverse.

let's get to phil lebeau for the latest. >> david, there are three things that you can look at from the report yesterday from ford and say, well, this is why the stock is trading lower. you mentioned lower guidance, that's really one of the primary issues. they originally said they expected to make between $10 and $12 billion this year. yesterday they said they're expecting about $10 billion and that had more than a few analysts saying, where is the other billion and a half? warranty costs continues to be a problem for this company. and then they have a high inventory of vehicles out the lot right now. 91-day supply, higher than they would like. there are a couple of things in the report that if you were optimistic about ford you can say, well, look, they've made some headway in a couple of areas. one of them is with electric vehicles. they break out the results by division, commercial vehicles, internal combustion and electric vehicles. the ev division still lost money, $1.22 billion. what's the good news? that was an improvement compared to the second quarter. loss per ev sold in the quarter,

$38,250, now under $40,000. that is an improvement, still not where they need to be, but an improvement. you look at hybrid vehicles, they have taken advantage of the fact that they were in hybrids when a lot of other people were saying don't go near hybrids. they have used that to grow their sales. hybrid truck sales in the third quarter, up 42%. and, remember, general motors doesn't have hybrids, but you know what gm does have? it's got a lot more optimism regarding shares than ford. take a look at the last three months. these tend to trade in tandem. we have started to see a little bit of a separation between the two. again, shares of ford under pressure after that warning regarding the full-year earnings coming in at about $10 billion, the street expecting $10 to $12 billion. >> what was so shocking, phil, and i guess it's reflected in the stock price today, they gave guidance in july. so that deterioration happened in just a few months. there's a question as to whether management really has a good

grasp into visibility in their business. >> it's a little bit about visibility, and also more about the cost side. they talked about it yesterday on the call with analysts that they need to get rid of the gap in terms of their cost reductions, they're not doing as well as they think they should be doing, as they know they can be doing. warranties is a big part of this. they've talked about this for several quarters in a row. though, yesterday when we had john lawler, the cfo on the "closing bell: overtime," we said to him exactly, how much did you lose? he said it's an improvement, but still not where they want to be. they've got to get their arms wrapped around this. they claim they're making progress, the new vehicles have fewer issues and they will correct the problems when it comes to warranty costs. that's one of the huge ones that's out there. >> the warranties expire, phil. at what point do analysts think they'll be through this problem?

>> i think they're going to give them a little bit of time here. but at some point -- and you heard it from some of the analysts already, they put out notes saying, once again, warranty costs remain an issue. they still believe that ford can correct this problem. but they're not putting a timeline on it. they're not saying, look, it's got to happen by q1 or else throw in the towel on ford completely. though you can clearly see a much more pessimistic tone from a number of analysts today following the report yesterday. >> phil, thanks. speaking of earnings, something in retail, vf corp. surging, strong guidance. boot barn also beat, but announced its long-time ceo is leaving the company. we'll get you ready for big earnings and a different name, google, right after this. don't go anywhere. when you're looking for answers, it's good to have help. because the right information, at the right time, may make all the difference. at humana, we know that's especially

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google parent alphabet reporting results in just a few hours time, with a slew of report cards this week. we're joined with more on what to watch out for. you've got a buy equivalent rating on the stock, $185 price

target. jason, great to have you with us. >> thank you. >> i want to focus on alphabet, a stock that's really been dead money for the last two months, down about 2% or so, trading at a lower multiple than a lot of peers. there seems to be a question mark about the return on investment that it's making in ai. i'm wondering, what are you looking for the company to say in order to address that concern? >> i mean, they've given you plenty of examples. i think what they want to do with ai. but the products are just perhaps not resonating as much with consumers as other products like chatgpt. and, again, some of that may just be the pace at which they're making those products available. my sense is, like, for this earnings, that's probably a little less of the focus. to your point, the stock has underperformed by 1600 basis points, a lower multiple. investors just want to see clean numbers and the comps do get

harder as you move through the back half. so there's just a concern that you don't know why, if it slows down or misses numbers, is it because of chatgpt or another competitor, is it just the macro wasn't strong enough to deliver the numbers? so when you combine that with some of the regulatory concerns now around the stock, it's definitely not -- it's definitely not a favored name right now. it's much more of a neutral name with investors. >> jason, would you argue that the bigger headwind is doj regulatory scrutiny, or this sort of existential ai search question? >> it's probably both. look, if you look at the history of tech stocks, regulation really has not kind of played any kind of meaningful role, because usually the process takes so long. by the time you get to the

resolution, the market has changed, because tech is always changing. but there's no question, if you just look, the stock has underperformed meaning willful, really started with monopoly search ruling and the epic ruling, which has since been stayed, so we won't see the impact near term. some investors think epic is more of an actual business impact than potentially them having to alter their deal with apple. look, we know that openai is very serious about building a consumer business. microsoft is still very serious and controls the operating system on a significant amount of desktops, and neither of those two questions are going to get answered in the short term. at the end of the day, they need to put up strong search results, as well as healthy youtube results, and then also show a continued margin of improvement. we saw very good margin growth last year. can it continue?

you have a new cfo, so that always presents perhaps a little bit of risk, will the messaging change when you change a long-time cfo. again, this is definitely a name where there's not high expectations going into the print tonight. >> right. and all that said, those not high expectations are also reflected in a multiple that is lower than many with a similar growth rate. so i do wonder if they surprise, do you see more upside in the stock, perhaps? >> we have an outperform rating on the stock with a long-term view. if you made me choose at this point, do i think it's going up or down on earnings? my sense is it's going up because the bar is so low. again, does it sustain? they definitely need to continue to show, to your point, that they're making improvements with ai, that consumers are using ai and that is not diluted. then we can debate, what would be the impacts be if they had to

end their exclusive search relationship with apple. it's a longer conversation. yes, i think you kind of hit it on the head, this is a low expectation setup and investors probably will get rewarded tonight for being long on the shares. >> jason, great to have you. thank you. >> thank you. meantime, financials lead the charge month-to-date, but what about after the election? let's get to sara eisen live from saudi arabia, with more on what's ahead this hour. hey, sara. >> hi, carl. good to see you. certainly the election is one of the topics top of mind for investors. about 7,000 of them gather for this fii conference, they call it davos in the desert. i hosted a panel with 12 bankers, so we've got a good chance of the entire global financial system. and coming up on the show, i will share with you what they said about the election, monetary policy, the global economy, and much more. stay with here on "squawk on the street."

welcome back. i'm silvana hanao with your update. donald trump ally steve bannon is out of federal prison. he was released this morning after serving a four-month sentence for a contempt of congress conviction. a jury found him guilty in july 2022 of refusing to comply with subpoenas from the house committee investigating the january 6th riot at the capitol. hezbollah announced its new leader today following the israeli assassination of hassan nasrallah last month. they named the new secretary-general today, as israel presses on with its air and ground offensive in lebanon. the country's self-ministry says israel killed 60 people monday in strikes. adidas reached a settlement with ye, formerly known as kanye

west. the two sides had been in legal battles the last two years after the sportswear giant ended a partnership with ye after anti-semitic comments he said. adidas did not give a value for the deal. world's biggest financial giants are meeting for the summit and sara eisen hosted a blockbuster panel that included the ceos of citi, carlisle and goldman. hey, sara. >> hi, good to see you. this was not a typical panel. 12 leading bankers from around the world, around a table. it was meant to be like a boardroom. it really highlighted that here in riad, this is the financial epicenter of the world for this week. and just how much enthusiasm and demand there is for saudi arabia, its transition, and investing in its companies and

in the infrastructure. got a chance to speak with a number of u.s. bank ceos, including jane frazier of citigroup, about what they see in the global economy right now and how it's increasingly looking lopsided and fragmented into where the growth is. a lot of optimism and bullishness on the u.s. here is what she said about what she sees from the u.s. consumer right now. >> in the u.s., let's look at the consumer. is consumer is broadly healthy, a tad more discerning than before, and their spending is still growing. but a lot of that has been driven by the affluent consumer. the middle income consumer is probably more mindful about where they're spending. and then the lower income is where we've seen some of the inflation pressures really biting in as wage growth hasn't quite kept up. >> the ceo of carlisle was quick to give credit to the federal reserve and other central bankers for managing us through

the inflation spike and coming out seemingly in a strong place, at least in the u.s. economy. i asked the entire group to raise their hand for the number of rate cuts that they forecast for the rest of the year. nearly everyone raised their hand for one rate cut by the end of the year, and not two. nobody raised their hand for two rate cuts, which is what the market expects at this point. i asked david solomon, the ceo of goldman sachs, what he thinks will happen in 2025 with the fed. here is what he said. >> i think it's hard to think about monetary policy in 2025 in the united states until you get through the election, and we get a clear sense of policy actions. >> i was going to bring that up. >> because policy will shape monetary policy. i listened to the earlier panel, and one of the comments that i agreed with is that structurally, inflation is more embedded in the global economy than the current narrative. that doesn't mean that it's going to rare its head in a particularly ugly way. i do think there's a potential, depending on policy actions that

are taken that it can be more of a headwind than the current market consensus. >> the election is clearly a wild card for bankers, business leaders, government officials all over the world. when i asked the panel how it influenced their business, the markets, apolo's mark rowen said it will make a big difference. >> i think there's a chill on m&a activity as a result of current policy, and i think you will see it freed up if there's a change in regime. i think you'll see investment liberalization if there's a change in government. but, remember -- >> if trump wins. >> if trump wins. but we're all talking about shades of good. we really are talking about shades of good, and to come back to your point on rates, we massively increased rates, and yet the stock market had a record high, no unemployment, capital market issuance at will,

and we're stimulating the economy. i'm trying to remember why we're cutting rates, other than to try and equalize the -- >> inflation has come down. he basically said he doesn't know why we're cutting rates. we've seen a third year in a row where the u.s. is the top destination for foreign investment and we're still rolling out big programs of spending that include the infrastructure act and the chips act. the theme of the u.s. being a bright spot in the global economy, but also the middle east and saudi in particular being a bright spot. which it comes at an interesting time, where geopolitical tensions are high, there is a war raging not too far away, which has had an impact. we had the head of the islamic development bank on the panel. he sauce it's had a chilling impact, the continuing war, and yet still plenty of optimism for what saudi in particular is doing. and especially around ai. i said it was a financial conference, but there are some

tech leaders here as well, alphabet is here, ray dallio is another frequent guests that make an appearance and he's going to be our guest on this show tomorrow, after he is speaking on stage here, just about some of the global opportunities right now, how big ai factors in. and, guys, elon musk was just speaking in the room behind me on the big stage. he was actually -- he was joining remote via video. i think he's busy in campaign mode a week ahead of the election. but he did say, and i just wanted to share some comments and predictions. he said as far as worrying about ai, he said the future, it is a significant threat, but the longer-term threat is global population declining. he said by 2040, there will be more humanoid robots than people. so musk's predictions on ai, which is a huge topic here for pif, the big saudi sovereign wealth fund, nearly a trillion

dollars, and, of course, the kingdom is diversifying from oil. back over to you guys. >> yeah, sara, many of those comments from musk echo comments he's made in the past. i think those percentages are roughly in line with the past, 10%, 20%, it goes bad. obviously, he is quite concerned as he pointed out and you pointed out. and robots are a key part of tesla's future according to him as well. coming back to rates, were you surprised at all what you heard around the table? i've heard it from rowen before, clearly he is in the belief that the fed should not be lowering at this point. and that would help his private credit business, by the way. but i'm curious to get your reaction given how much you know about what the fed is thinking and how closely you follow it. >> well, i guess i was just a little surprised that everyone expects one more rate cut by the end of the year, and, you know -- look, rowen's point is that the economy is in a good place, and that was echoed by

everyone on the panel. we also had some big asset managers on the panel as well. franklin templeton's jenny johnson and the ceo of state street was on there. they have a very good global picture right now, and what they're saying in the u.s. just stands out. so you just don't hear the urgency for why the fed would be cutting rates. we've made a lot of progress on inflation. they want to stick the landing. but from the world's biggest investment firms and banks, the u.s. looks like a good place. you didn't hear the word r recession. we didn't really hear the word soft landing, just that it's a big destination for capital, the economy is in good shape. and we talk all the time about how people feel lousy, but one of the comments on the panel was wages are growing faster than inflation, unemployment is 4.1%, still a very low rate.

it's a decent economy that i think a lot of the world looks at right now with envy. >> yeah. >> that's why we don't need more rate cuts. >> right, right. sara, great stuff. we'll see you soon, obviously tomorrow with ray dalio. let's move to our next guest, laying out several scenarios for financials under a trump or harris presidency, and says there will be opportunities, no matter who wins. wells fargo manager and directorer, senior banking analysts. you were named number one, fifth year in a row. >> thank you. >> no props today. >> what did you bring last time? oh, one of your power lift things. >> hammers. >> also, a key power lifter as well. let's talk the election. give us a quick take in terms of trump, harris, and why from your

perspective, at least, it still benefits for financials on both. >> it's an opportunity, no matter who wins. first, clarity, just give clarity on the rules, whether it comes to the stress test. banks don't know until after the whole stress test. so wall street likes certainty over uncertainty. the second thing is common sense regulation. you've already seen this put in place under the current administration. they rolled back in the thousand-plus page report about capital changes. that's already the course of change. and the third thing would be, you know, capable people in key positions. and so it's always an opportunity, you saw the news about jamie dimon in "the new york times." not confirmed by him or the company, but if you've got people like jamie dimon going to government, that would go a long way. >> doesn't seem likely. >> not likely, but think about -- he could potentially be the second most powerful person in washington, d.c. if he took it. by the way, it might not happen day one, it could happen a year

after the election and they say, hey, jamie, we need your help. remember, the global financial crisis, how much people relied on him. but the other thing is, the fundamentals of banks to a certain degree transcends the election. you are having inflection that starts now between the third and fourth quarter, inflection of traditional banking revenues, inflection of capital markets and inflection of operating leverage. this is a real turning point after a few years of being in the doldrums. now, with a trump win, the consensus is less regulation, more mergers. i saw the segment before this. you monetize the deal flow and capital markets get better and a little less regulation. but at the same time, there's more concerns from our firm's strategist chris harvey about interest rates and inflation. there's no free lunch here. and under a harris win, it's probably more of the status quo, all things considered, where you

are still past peak bank regulation, maybe just don't go as far past as you otherwise would. >> we've seen the volatility in rates. we're 65 basis points higher than the september lows on the ten-year yield and the fed has been cutting. how do you think about that volatility? supposedly it's a more benign environment for small businesses, if rates go higher even in the face of fed rate cuts? >> remember the bond vigilantes? david faber does. >> don't remind me how old i am. >> but if rates go up a lot higher than expected or you have a second dose like you had during the volker years, you're talking about that capital market backlog doesn't get monetized. the commercial real estate problems gone, forgotten but not gone, especially if rates stay higher for longer. the pace of loan growth, if rates stay higher. and then just overall servicing bad debts and the securities

losses. >> right, like bank of america. >> unrealized securities losses are half of their peak right now. they could go back up if you have a bad rate scenario. >> we have a ten-year that's not helping as much as you would have thought given the 50 basis point cut we got. >> let me say one thing that nobody talks about, the idea of an upward-sloping yield curve. the old adage in banking was 3/6/3 banking, borrow at 3, be on the golf course by 3. if you get a spread back, and you will one day, that could be the unexpected positive for banks. >> you heard musk talking about ai. are we still on a track to have ai rewrite cost structure at the major banks? >> next year you're going to have an ai chatbot here instead of me. look, we've done a lot of work. the marriage of banking and technology has been great, over three decades you've increased revenues per employee by 3x. so that's 2x inflation adjusted.

i think ai right now is more a back-office tool. so automating the back office. the front office, a little bit slower, and yur going to keep ai away from any really sensitive areas, like customer data, for a while. but it's part of the overall tech evolution. >> mike, finally, i can remember when you sat with us toward the beginning of the year. you liked citi. it's one well, but not like the other banks. can you expect the performance next year, being this is a great sector to own this year? >> citigroup, i asked jane frazier a tough question on their recent earnings call. if you stayed for the whole call, she gave an answer that gave me and others greater conviction. she said, she does not expect escalation of the regulatory issues, she's confident enough that she was able to answer my question, they're on the right path. they reiterated the target for getting over double-digit returns in a couple of years.

so, if you shut off the conference call early and you heard her first answer, which it was a tough question, then you might have had a negative reaction. the stock has not performed well roi recently. if you stayed until the end of the call, this ceo is sticking her neck out and there's nowhere to hide. i respect her for the answer she gave me and investors should pay attention. i think they're past the worst of their regulatory issues. that's my number one pick. i expect that stock to double over the next two and a half years. >> we'll see. but you are a five time in a row winner of the all-america team. you must have something going for you. >> well, i'm risking a lot on citigroup making it. >> mike, thank you. we always appreciate it. mike mayo. speaking of all things election, a reminder, cnbc is live all night on election night. we will have the results as they roll in, reaction from some of the biggest names in business. it begins at 7:00 p.m. eastern time right here from the new york stock exchange. live coverage in the overnight

hours as well until the next day begins with "squawk" at a special 5:00 a.m. start. stay with cnbc oeltin econ night all night. we're back in a minute. ♪♪ ♪♪ the winter escapes sale is now on. visit beaches.com or call 1-800-beaches.

a slew of health care companies are reporting results during the busiest week of earnings season. but the sector has been the second worst performer in 2024. is it due for a bounce? one chart watcher thinks so and the prognosis looks good. tune into our market navigator segment on "power lunch" later today to find out why.

jeff bezos defending "the washington post"'s decision not to endorse president harris or former president donald trump in the presidential election saying americans don't trust media. the post has reportedly lost

more than 200,000 digital subscribers because of the decision. bezos writing an op-ed saying, quote, when it comes to an appearance of conflict, i am not an ideal owner of the post. every day somewhere, some amazon executive or blue origin executive or someone from the other philanthropies and companies i invest in is meeting with the government officials. i once wrote the post is a complexifier for me. it is but it turns out i'm also a complexifier for the post. they're paying the consequences in terms of the loss of subscribers. but it is refreshing, i think, to see a company say we're going to step away and readers, you decide, or customers, you decide. >> interesting. in the piece, he laments the timing of the decision, which does make it look a little bit suspect, coming some ten days before the election. that was the problem. as bezos admits in his op-ed. >> and no shortage of challenges

at the post after what was a very strong period and early on in his ownership, having paid 250 million bucks for it, which as we pointed out, what he found in his couch that day when he was rooting around for some change, but i'm not sure how much time he spends on it, maybe more than he wants to. meantime, the strongest quarter in our history, that's the ceo sofi, after fresh results there, but shares have fallen today. we're going to talk about why when he joins us on "money movers" at 11:00. you can catch qu"sawk on the street" anytime, anywhere, listen and follow the "squawk on the street" podcast. she doesn't know that if she owns a life't insurance policy of $100,000 or more she can sell all or part of it to coventry for cash. even a term policy. even a term policy? even a term policy! find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com.

if take a look at shares of iep, that's icon enterprises, the vehicle for carl icahn, down some 14 plus percent. one of its key portfolio companies, cbr energy, it is public but they own a majority of it, it suspended its dividend, impacted by reduced refining inputs, downtime at facilities partially caused by internal power supply outages throughout the quarter. the decision to suspend the

dividend reflects concerns on how long the current margin environment will persist in light of the company's large planned turn around at one of its key refineries in the first quarter of 2025. that is having significant impact on shares of icahn enterprises, not quite an all time low, but certainly not too far. well, not too far from the 52-week low of $9.72. still a ways. also wanted to take a look at boeing, we round out this hour. the shares are gaining some traction here, of course. the company raising some 16 billion through common equity offering and $143 a share. an additional $5 billion for mandatory convertible with -- what was it -- 6% dividend yield, convert funds that come in. they can short the stock, but perhaps some of that pressure, well, clearing event is what we were talking about. and it does seem to have perhaps worked as a clearing event for the stock.

$21 billion raised for boeing. >> close to a five-year low. very good pricing for investors. >> an important offering there. of course, the strike continues with the machinists, but it will put them in some position to withstand perhaps more months of losing as much as a billion dollars in free cash flow each month. our live market coverage also continues right after this.

good tuesday morning. welcome to "money movers." i'm carl quintanilla. melissa lee is here. today, investment banking giant ken moelis, his outlook for the market, for deal-making and the fed. >> plus, sofi record net revenue in q3. the stock is lower by 10% right now. we'll have the ceo and talk to him about that move in a moment. >> can amd engineer a turn around as it lags the broader sector? >> and right now let's take a check on the