Transcripts For CNBC Squawk 20240703

I was looking at friday and the tenyear yield on friday was 4. 795 . That is a significant drop. You can see the extended drop here as things opened up. It was the same story across the board with the 30year yield. It closed 4. 895 . Below 5 . You look at where the board is today and go back to what we had up with the tenyear yield and 30year at 4. 85 . The twoyear yield at 4. 99 . The biggest move in crude oil yesterday. Wti at 86. 17. Lets update you on the war in israel. Israel saying the border with gaza is now secure. The spokesperson saying no hamas territories crossed into israel since sunday night. The Health Ministry said 687 people in gaza and the west bank have been killed. That does not include 1,500 bodies of hamas militants which have been p found in israel. Hamas threatened to execute hostages if they were bombed without warning. In the meantime, President Biden confirming yesterday that 11 americans were among those dead. No americans are confirmed to be hostages. U. S. National security spokesperson john kirby saying the number of americans unaccounted for and they could be among the hostages. President biden is set to address the American People this afternoon from the white house. We will bring you that live as it happens. Later this hour, we will hear from the former commander of nato and then in the next hour, bob kraft will talk to us about the uptick in antisemitic rhetoric. I dont know if you saw it. It is disgraceful. I am jewish and i dont know what to say. Im not and i dont know what to say. It is shocking. We have seen protests here outside the windows of people saying stuff. It is unbelievable what is happening. It is unbelievable to see the response. I guys ill say it on the air. I had a discussion with becky. I need a chart to show me where people come down on these things. How far left do you have to go to where with you are saying stuff like that. You saw larry summers. I asked him about it. I saw the memo before the show began yesterday. Is it you can go so far left and if you view someone disenfranchised and that is where you lay your chips and you are enabling hostages . I want to take it out of politics. I dont think it is a leftright or thing. I think confined to that group of people . It seems to pme if you look around the world and go to australia and you go to different parts of the europe where the protests are happening and parts of the United States, i think it is an extremist view. I dont understand. Certain places where you expect outrage. Did you see amari . I did not. Not everything is for discussion here. There are issues where you can see the good and the evil. I guess there is nuance from occupied . Any time you talk about kidnapping grandmothers and babies and killing people and raping people, it is easy to see whats wrong with that scenario. If you cant see the evil there, then i dont know what to say. It traces back to an occupation. I guess there are western countries around the world that have people in them that think israel shouldnt exist. We have neonazis in this country who have this view who wave flags on behalf of President Trump, for the last how many years. Take the politics out of it. There have been horrific things said in this country for the extremist things for years that were not condemned properly at all despite the for israel and all of the support you would see. If you talk about why people feel this i dont understand it. I dont either. Why people feel this and are allowed to say these things and there was not condemnation. There was not you were not sitting at this table screaming about those people and saying those things four or five years ago. People were, but not doing it enough. They were not. I have a clear picture of the rise in antisemitic rhetoric. They count on twitter and count when elon musk said something as antisemitic. They were putting it in. This is clear at this point. You see the demonstration. I still dont think that the group you are talking about in this country is the biggest threat to security in the United States. President biden said white s supremacy. I think the biggest threat to israel is islamic extremism. Some people captnt say that. President obama never uttered the word. Why not . Ill not defend those positions. This is alterable. It has to be called out all the time. You think the biggest threat to the United States is White Supremacy . Do you realize the way you are saying it, it appears you are defending them. Thats the point. The biggest threat. Thats the point. Once it becomes normalized in any way im not saying that. It is a small percentage. I would not say that. There is a Terrible Group of people in this country that are saying these things and that is terrible and lets leave it there. This is what we will talk to bob kraft about this morning. He is talking about what the nfl is doing to raise awareness on these points. Pepsi just reported. They are always adjusted. It was above 215. They reported 225. Revenue of 23. 45 billion. The company raising earning guidance for the full year. We will talk to pepsi cfo Hugh Johnston in the 7 00 hour. Atlanta fed president bostic and Christopher Waller and Neel Kashkari will speak out today along with San Francisco mary daly speaking out with the forum as well as prime day kicking off which is set to run through tomorrow. Look for a good deal. When we come back an, we will talk more about treasury yields dropping. It is just happening as the bond market reopens after the holiday yesterday. We will dig into the inflation data and earnings. That is next. You can see the tenyear yielding 4. 6 . Coming up at 8 00 a. M. , we will speak with paul ryan about the ouster of Kevin Mccarthy from the speakership. You are watching squawk box and this is cnbc. Announcer this cnbc program is sponsored by baird. Visit bairddifference. Com. With gold bond. You can age on your own terms. Retinol overnight means. The smoothing benefits of retinol. Are now for your whole body. Plus, fastworking crepe corrector diminishes wrinkled skin in just two days. Gold bond. Champion your skin. This is Spring Semester at fairfieldsuisun unified. They switched to google tools for education because theres never been a reported Ransomware Attack on a chromebook. Now theyre focused on learning knowing that their data is secure. nice footwork. Knoman, youre lucky,ta watching live sports never used to be this easy. Now you can stream all your games like its nothing. Yes [ cheers ] yeah woho running up and down that field looks tough. Its a pitch. Get way more into what youre into when you stream on the xfinity 10g network. The markets will get another round of inflation data this week. The Producer Price index tomorrow and Consumer Price index thursday. Treasuries resumed after the holiday yesterday. We dig into it with maryann bartell and steven parker. Steven, lets start with you. We are watching yields that opened up lower. It has had three days since we have seen trading. A lot has happened in the world. Do you think we are looking at this rush into treasuries because of the geopolitics and what is happening around the globe in israel or is this a situation of the fed speak where they say the market has been doing its work for us . The kneejerk reaction is political, but the fed speak will ultimately drive the direction. Yesterday, u. S. Fixed income markets were closed, but etfs tr traded. They rallied on the news this weekend. It was the dovish comments from the fed speakers that got the rally to kick into gear in the second half of the day. Mary ann, i know you have been preparing for higher for longer. I dont know what that means for your portfolio, but look at things pulling back where does this settle out . I agree with your guest that originally the horrible events over the weekend were the initial driver of the move in rates. I think some of the fed speak is deliberate because we dont know what direction this is going to take. We could have treasuries being used as a flight to safety for a period of time. It is possible that we reached an intermediate top. If we get very good inflation data this week, that will help rates. What we mean by rates being higher for longer is that were normalizing. We are not going back to that zero. We are in a higher Interest Rate environment in the years to come. That will fluctuate. You will have periods where rates are going up and periods where rates are going down. If we have reached an intermediate top for rates, this is bullish for the equity markets. The only negative we see for the markets is if crude breaks above 100. If you get crude above 100 and sus sustainably above there just because lets run through that. Because it slows the economy significantly or it ends up playing a force on inflation beyond just core inflation as it works through and that forces the fed to raise rates again . I think it is both, becky. Higher crude Oil Prices Hurt earnings and at the end of the day, that is what the market will respond to. It will also hurt the consumer. If Higher Energy prices spike, then you just cant respond that quickly so it has a negative impact. Stephen, equities were up yesterday which is a little surprising with the events over the weekend. I guess the market is assuming this is going to be contained and this is not something continued or just too hard to figure out so you put it in the too tough pile . It is hard to anticipate where this is going. History gives uses a clear road map on geopolitics and the impact on markets. You get a quick kneejerk reaction. There will be an eye on the middle east, particularly as mary ann said there is contagion in the oil markets, but it will shift to earns ings this season. That outlook looks good. We think we bottomed out last quarter and we accelerate the story which is supportive of stocks. You dont think there is a hard landing coming . You think the economy is going to look okay . We think we will witget a so landing. It will slow, but not to the point of major recession. That will take the pressure off inflation and the fed and be a good thing for equity markets. They will make new highs by the middle of next year driven by Earnings Growth and not valuations. The selloff has given us a cushion on the valuation side. Mary ann, do you agree . I do. I think what we are not talking enough about is the ism manufacturing data. It is actually improving. We are not above 50, but it looks like manufacturing has actually bottomed. Inventory alone will have to be rebuilt and prices paid are falling. It is really a positive mix now, we think, in manufacturing. We think that will help boost earnings. When we look at margins, we think companies can improve do earnings next year. As long as crude oil doesnt spike higher and stay higher, we think the outlook remains robust. I agree we would reach new highs next year in the marketmarkets. Stephen, you think this pull back is an opportunity . We think it is an opportunity. We remain focused on the u. S. We like the story within industrials. We think there is a lot of support for the industrial story. We are talking about taking a look at equal weighted s p exposure and midcap names. A lot of the rally is driven by the magnificent seven. We through there is a catchup trade across the markets. We are moving down the capitalization spectrum. Not all the way down to small cap. We do like the midcap story. Technology story. You think that has been overplayed with the magnificent seven and what has happened with a. I. . I dont think it has been overplayed. There is a longterm story there. I think we are looking for a rotation in terms of market leadership away from the concentrated leadership of the mega cap tech story to the broader market. Mary ann, how do you play this . What do you tell investors . Would you keep money in cash or deploy heavily . In terms of cash, our clients have just been flooding into cash because they havent had a return. They want to have that income. Im not sure i could stop them if i recommended not to go to cash, to be honest with you. To us, technology is the leadership of the market. If you are going to continue to have the secular bull market, you need to have the leadership in tech. Amazingly, tech is still out performing on the relative basis in the decline. That tells Us Technology will continue to lead us out of this. I think you have to own tech. We have been focused on s semiconductors and software and services. I would agree sdril industrials the emerging leadership. Mary ann and stephen, thank you. We will see you both soon. Thank you. Coming up on squawk box, Country Garden is defaulting as the Property Market continues to decline. And you dont want to miss this. We will hear from Paul Tudor Jones. He will join us at the table on set to discuss everything that is going on from the war now in israel and some of the geopolitical issues and Federal Reserve and kocommodities and more. You dont want to miss it. Squawk box is coming back after this. Fisher Investments in this market, youll find Fisher Investments is different than other money managers. other money manager different how . Arent we all just looking for the hottest stocks . Fisher Investments nope. We use diversified strategies to position our clients portfolios for their longterm goals. other money manager but you still sell investments that generate high commissions for you, right . Fisher Investments no, we dont sell commission products. Were a fiduciary, obligated to act in our clients best interest. other money manager so when do you make more money, only when your clients make more money . Fisher Investments yep. We do better when our clients do better. At Fisher Investments, were clearly different. In the u. S. We see millions of Cyber Threats each year. That rate is increasing as more and more businesses move to the cloud. So, the question is. Cyber attack as cyber criminals expand their toolkit, we must expand as well. We need to rethink. Next level moments, need the next level network. [speaker continues in the background] the network with 24 7 builtin security. Chip . At t business. Announcer executive edge is sponsored by at t business. Next level business need the next level network. Welcome back to squawk box. Country garden failed to make an International Debt payment and said it doesnt expect to meet all of the bond obligations when they come due or within the grace period. This means they are going to be defaulting. The company says the decline was accelerated by the 81 dropoff of apartment sales in september. The downfall could escalate the property crisis in china. It is one data point and it comes as the Developer Evergrande Group has yet to deliver hundreds of thousands of apartments it presold to chinese citizens. Yesterday, evergrandes creditors said the debt restructure deal could lead to the collapse of that company. A lot to watch in china, joe. Coming up, House Republicans holding a forum this afternoon to discuss plans to elect a speaker. Mccarthy had a big speech yesterday. Did you see that . I saw bits and pieces. Not ruling out. He is open to the idea. I dont know how it would work. The eight are still around. Maybe he has more support than the two candidates running. If you split it up in the conference, it is unclear how it works out with jordan and scalise. Well talk to the pollster frank luntz after the break. As we head to break, here is the look at yesterdays s p 500 winners and losers. Announcer winners and losers is sponsored by state street global advisers. The biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. It still does. What can you do with spy . swords clashing had enough . Whatno. Arthritis. Spy . Here. Aspercreme arthritis. Full prescriptionstrength . Reduces inflammation . Thank the gods. Dont thank them too soon. Kick pain in the aspercreme. Ever since she was a little ki, all maria wanted to do was bak. Im maria alvarez, owner of marias cakes. And im axel, proud to be her state farm agent. Her baking superpowers have brought sweetness to our community. I make delicious cakes to make special occasions even better. Maria doesnt just bake; she also creates opportunities. Small businesses like marias, open doors for communities to thrive. Support your community. Support small business. Good morning. Welcome back to squawk box. We are live from the Nasdaq Market site in times square. The futures are higher once again this morning. You are talking about the gains following yesterdays gains for the market. Dow futures up 83 points. S p futures up 10. The nasdaq up by 55. Getting help from treasury yields which are open again for trading after yesterdays holiday. You are seeing a bit of a steep pullback from fridays close. The tenyear yield is 4. 6 . Gop house members holding a Forum Tonight to try to help pick the next speaker of the house. Joining us on the chaos in the house is frank luntz. Good morning to you. It is chaos. Lets talk about the chaos. There are two pieces of chaos. Chaos in washington with the leadership vacuum right now which we could some people could relate to the speaker issue, but the leadership vacuum of the United States in is rea we are in unchartered ed territory. Businesses look for predictability. They look to be able to know our government will function and the people are in place and we cant guarantee that any more. Two candidates running. One get majority. I hear from other members, Kevin Mccarthy is a friend of mine. I want to acknowledge that. I hear from other members that they are insisting he return. They believe he is the only one who understands the complexity of issues like israel. Ill give you an example. Although yesterday was a vacation, mccarthy would have brought them all back if he was speaker to pass whatever legislation is necessary to get the funding in place. He understands the Biden Administration the negotiations. He has been to israel already as the republican leader of the u. S. You watched yesterday . Im a friend of his, too. He looked like a leader. He would make a good president. I wondered if dont put that thought in his head. If the vote had been taken this week, i wondered if democrats would support him because of what happened. Present. It is strange. You have two qualified individuals. Jordan is qualified from his section of the party and scalise has been the number two to mccarthy for a number of years. The issue is there are members who want to get things done and dont want the government to shutdown and want cooperation. You have matt gaetz who will never support mccarthy. That was the shock. There wasnt a single democrat willing to get behind mccarthy. I talked to a half dozen of them. They are talking if they want to reverse that decision. I dont think there is an excuse for that. I agree. There could have been ten problem solvers who decided to vote present on the initial motion. You cant expect that. I can. You can expect them to put the country ahead of the party. Thats what they claim. They fall back on it. The situation over the weekend changes everything. If the vote happened today versus last week, you would have a different scenario. That organization is in trouble right now. There are at least a dozen House Republicans who want to leave it and may leave it this week. There is that move. You say leave . Leave the caucus. It was the only organization that brought people together to debate and discuss and have unity. That organization is hanging on right now because republicans are offended and democrats i heard democrats planning to wrangle them hakeem said no way. It is a question he to the Business Community. They want some sort of predicta. You have problems with both of them. Mccarthy, one wonders, does he want to continue with this crap that he has to i cleaned up my language. Jordan has to deal with it. You asked the democrats and Hakeem Jeffries and look him straight in the eye and who do you want to negotiate within the end. Here is the problem. He wants mccarthy out. Heres the reason. Mccarthy is a better foe. He can keep control of the house. The other two, one wonders. Mccarthy is saying he has 96 of the caucus in him. He throws individually gaetz under the bus. He looks like he would like to have the final is there a third candidate that you think could be on the table . A number have been bandied about. Im curious if there is somebody out there . Hearn doesnt want to do it. Emmett will support scalise. In the end, the question is are you a person of your word . When you look the camera straight in the eye, do you say what you mean and mean what you say . If you put the country first, we would not be in the situation. If you care about what is happening, they would clarify and, frankly, mccarthy would be back. What are the chances that takes place at this point . Small. Its possible. Growing. 1 . Nothing surprises me. At a time when we have doubt globally and at a time we dont know what the next day will bring and the one thing i know the middle east will get worse and not better. Iran will be held responsible for 11 person lives. Who do you want leading congress . Someone with experience or someone who has never done the job . You said iran will be held liable for american lives . We dont know the facts around this yet. I want to be clear. Theres been lots of speculation about it. The Administration Says they dont have proof. If they have the meetings and discussion, the Israeli Government has put this forward. Obviously, the u. S. Wants to take it slowly. We like to know what is really going. The chicken and egg with the administration because they were feckless with biden and kirby and blinken. I dont know which came first. I dont know if it was iran or given if there is retaliation. The weakest response to this. Getting a speaker is an issue. We are less than 45 days from the government shutting down again. Handicap that at this point. There was a view where i talked to a number of people over the weekend that seemed to think the situation that has taken place in israel and the terrorist attacks is what im calling them now will lead folks in washington to get together. Is that more likely or less . The amazing thing is i look backward first. On the show, the predictions on the show is the government is shutting down and mccarthy couldnt find agreement. He figured it out. He figured it out until his undoing. He got it done and loses his job. Where in business or wall street do you do your job and get fired . Thats incredible to me. Looking forward . I dont see how it happens again. 5149 they dont get it gone bec done because the bar is higher. They need the details and facts. They are not there. They lost an entire week in this situation. No matter who . No matter who, i dont see how they get it done. It is more perverse. Mccarthy needed solidarity on the republican side. The same guys voted no which put them in the position of having to go across the aisle to keep the government open. And the same guys they make it impossible. They blame you for it. In the end, what im watching is does ukraine aid happen . I question that. What message does that send . Thats a very good and smart question. My question to you separately is we have a president ial election taking place and im curious how you think what has happened in the last 72 hours will impact that . You see nikki haley being very aggressive on television of how she would approach hamas. You you see ramaswamy. How does this all we havent heard from trump in a meaningful way. We heard him on truth social and elsewhere. 70 of americans are saying what the hell is going on . 70 look at biden and his age and trump and his legal situation and they dont get it. Ill conclude with this and show you how horrible the focus groups have become. We have the two least popular people in the parties heading toward nomination and the public is throwing up their hands and saying what have we done . The public is throwing up their hands. When you say horrible. They hate each other. They are vicious and mean and cruel. They seek to own each other. This happens within the first four minutes. You are watch withing the 6 p a. M. . Yes. I want you to understand im not insane. I really do hear it and see it. It may not happen in the studio, but it is happening in living rooms and schools and churches across the country. People that used to be decent and respectful now resent each other and want to own each other and revenge. This is not the america that i know. Social media. It is social media. It is not social media if it is facetoface. Social media causes it and failure of the education to teach civility and respect. The teachers say that belongs with the parents. You are sending kids in who are saying things i cant believe. S that is part of the problem. We all need to take responsibility. The Business Community is able to fix this. They get punished forg getting involved. Republicans dont want them involved in social responsibility. Democrats dont want them involved in politics. We dont trust our elites or the public itself. You are painting a dire picture. Im seeing this on a mothers forum. I cant believe people are saying this. The moms group cannot take the phone away from the child or the child goes up to their room and never comes out. We are addicted to social media and a. I. Is making things worse. I do mean to scare you. They will play us out. We have to get to commercial. As a result of this, as you are watching, from a practical reality perspective, as terrible as what you are describing is, what does it mean . What does it mean for the coming election . Well end up with trump or biden . We will end up with a country that is sorely disappointed and angry and frustrated and without the ability to bring things together. I want to make one last point because i know we have to get out. You and i have fought on the show. I want to publicly apologize. I behaved badly. The very fact we can be on here and i have seen you it would go at each other. Your turn. We are still capable of resolving what divides us. On a societal basis, all those threads that keep us together have frayed and there are people actively trying to break them. We have to take a different approach. Frank luntz with a very important message. Thank you for coming in this morning. We have more on the speaker race to come. Former House Speaker paul ryan will join us on the ouster of Kevin Mccarthy and what happens next in congress. We have the best of the daily with the squawk pod. Listen on your app any time. Were coming right back. Meet gold bond daily healing. A powerhouse lotion that moisturizes, heals, and smooths dry skin. With 7 moisturizers 3 vitamins. And. New gold bond healing sensitive. Clinically shown to heal moisturize dry, sensitive skin. Gold bond. Theres still a strike auto workers strike. We have to back burner this baby. It got complicated for gm. The Union Representing the Canadian Auto workers for gm calling for a strike after failing to reach a labor deal before the deadline last flight. The walkout will impact operations at one Assembly Plant that makes the Chevy Silverado and an engine factory and parts s distribution center. Ford managed to settle with the uaw in canada. This shows the difference between the two. Well see. I didnt realize those were the good old days. Coming up, the latest on the terror attack in israel and the response by israel and the international community. Well talk to admiral james staridis. Supreme former commander of to. You can watch us live any time on the cnbc app. Meet gold bond daily healing. A powerhouse lotion that moisturizes, heals, and smooths dry skin. With 7 moisturizers 3 vitamins. And. New gold bond healing sensitive. Clinically shown to heal moisturize dry, sensitive skin. Gold bond. Fresh, warm hot dogs when im not selling hot dogs, i invest in a fund that advances innovations like robotics. Fresh, warm hot dogs, straight out of my torso one for you, one for you. Oh, youre a messy one. Cool, right . So cool. Anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq100 innovations. Hot dogs fresh, warm hot dogs before investing carefully read and consider Fund Investment objectives, risks, charges, expenses and more in prospectus at invesco. Com. New overnight israel said its border with gaza is now secure. Yesterday, hamas threatened to execute hostages if israel bombs civilians in gaza in their homes without warning. President biden is set to address the nation about the war this afternoon from the white house. Joining us now with more is former supreme ally commander of nato, admiral james stavridis. Where to start here, admiral. You take hostages. You bring them back to gaza and you put them in civilian areas and you surround yourself with civilians and then you threaten israelis if there are civilians injured you start executing. What is netanyahu supposed to do when he hears Something Like that. You call it what it is which is terrorism. These are acts of terror. This is akin to the 9 11 attack and just, a lot of people hear some of these numbers, there have been hundreds of israelis killed and there are 150 hostages, to put that in context, joe, for an american, you have to do the math of population adjustment. If you have for example a 1,000 israelis killed, well north of that ultimately, thats like 35,000 americans killed on an equivalent 9 11 day. By the way, on 9 11 there werent hostages. 100 hostages. 9 11 in the United States with 3500 hostages. So youre right to put your finger on hostages, what are they going to do . Use precisionguided strikes. Going after various hamas centers and then step two, most important for the hostages and the hope for the hostage family, Israeli Special forces, theyre infiltrating into gaza which is a very confused landscape, that could be helpful to special forces, theyll try to find and fix those hostages and then attempt extraction and rescue, thats the hardest military operation that is in particularly dense urban environment like that. Israelis are very, very good at this. But, if youre a hostage family heb youre not waking up feeling good this morning. This is a really dark moment. Admiral, if you do stick to israels prior notion that well do anything to release a hostage and at this point that almost gives the other side, if the other side knows youll do that makes it more it almost induces them to take hostages. Yesterday someone said its like nagasaki, greenblatt. I dont know what you do know as far as intelligence, does iran deserve to presumption of innocence, do we not know and is the administration conflicted because of the 6 billion that just went that way so they dont want to say iran is involved. Whats really happening there . I dont have inside intelligence on this. Anyone observing this wouldnt give iran the presumption of innocence. They have consistently supported ha hamas, hamas is a creature of tehran. They want to close in and destroy israel and kill the entire civilian population. So, no, iran but admiral, does that demand a response from iran and if so what does that response look like, what is the counterresponse looks like . Becky, thats the right question to ask, the answer at this minute we dont know. What ive saying to investors, i have saying, watch the iran play in this, because youre correct the way this goes high order, which would be massive spike in oil prices, Global Market shutters, real difficulties to overall global traction in the economy, the way this goes high order is if theres really clear smoking gun that iran directed this, we know they supported it, probably not from what ive seen not enough evidence to make that judgment. If that occurs i think it demands a response from israel. Becky, that would probably be strikes to the north going into lebanon where the iranisported hezbollah is. T i think thats where israelis go. Iran could respond to that. Thats how the war widens. Lets be hopeful here, less than 10 cans of that. Because neither side really wants to expand in that dimension and the Biden Administration is not looking for a wider war with that. That Aircraft Carrier and its escorts have arrived in the eastern mediterranean, theyre there to support israel but also say to tehran, dont even think about unleashing hezbollah from the north. I think thats when the u. S. Gets involved. I think its a low probability at this point. Admiral, thanks for coming on today. When we return, well show you whats moving the markets right now, including shares of pepsi which are ticking higher after earnings and revenue beat expectations. The stock up 2 . Thats straight ahead. With gold bond. You can age on your own terms. Retinol overnight means. The smoothing benefits of retinol. Are now for your whole body. Plus, fastworking crepe corrector diminishes wrinkled skin in just two days. Gold bond. Champion your skin. Good morning. Israel at war. The country says the border with gaza is secure four days after the surprise attack by hamas. Well hear how the Business Community is responding. The markets trending higher this morning. An rapid update on state of the economy. Pepsico out with stronger than expected quarterly results. The second hour of squawk box begins right now. Good morning. Welcome to squawk box. We got a lot going on this morning as we try to make sense of what has been senseless in this terrorist attack in israel. You take a look at u. S. Equity futures right now, in the green right now, the dow up about 73, 74 points. Nasdaq, up. Treasuries, show where the yield stands on the 10 year and 2 year. Finally, oil, lets talk about the energy complex, thats something that a lot of people are focused on given what were seeing if the middle east. Want to bring you an update on that war. Israel saying the border with gaza and all southern areas of the country remain secure. Hamas threatening to execute hostages if israel bombs ci civilian locations without warning. 150 still remain captive. Saudi arabia calling for a military deescalation in gaza. Mbs voicing his support for the palestinians. Saudi arabia and israel have been talk about normalizing diplomatic relations, the future of those discussions is uncertain. President biden set to address the American People on the war this afternoon. Well speak with bob kraft, hes been involved in a long effort now against antisemitism and well have a discussion with him about whats happening not just in the middle east but here in the United States and around the world. Lets get a look at premarket movers. If you take a look overall, big earnings story of the morning, pepsico, theyre up solidly, up 2 right now, around 40,000 shares. It also raised its fullyear outlook due to those results. Sales growth in gatorade, thats something the chief Financial Officer will be talking about when he joins us right here on squawk box. On the analysts front, shares of Electronic Arts up. The video game publisher behind the ea sports titles, the sims and star wars product, upgrade to buy. The target price goes to 150. It was 145 before that. Theyre citing things like the recent pullback in the stock and better expectations for key game sales in future. The biggest gainers, and andrew mentioned this before, oil surged because of the war between israel and hamas. Some stabilization there. The five best performing stocks in the s p 500 were all defenserelated. Some of those names right now, northrop grumman. Huntington ingalls down fractionally. Devon energy. Becky, along with the broader market, things look like theyre calmer for right now. Becky, ill send things back to over you. The outlook for Current Quarter growth is surprised to theup side. New uncertainty obviously has been raised by the turmoil in the middle east. Steve leisman joins us now. A resilient consumer and strong Business Investment is forecasted to propel Fourth Quarter to its best showing. Forecasters are expecting some caution of the road ahead because of the conflict in israel right now. The rapid update, the average of 12 tracking indices. A number at the beginning of quarter, forecast to 0. 3 . But the slowdown economists have long said is going to hit the u. S. And is seen coming in the Fourth Quarter and into next year you can see the growth is below 1 . Theres reason to be skeptical, forecasters have predicted a slowdown only to revise up t those. Theyve done a better job with inflation and see core inflation declining to 3. 5 by the second half of the yquarter. Okay, growth is seen flagging in the next several quarters. Two consecutive quarters of negative grourt, while a slowdown is seen, an outright contraction isnt the base case. Most economists see limited impact from the hamas attacks in israel. Along with the fed talk over the past several days one economic fallout is to sharply reduce the outlook. Becky. What are the odds at this point were going to see a fed hike . What were they and what are they . The market was doing the feds job, but this morning we have yields lower once again. Ill get to that other part in a second, the two situations here, the first is that the situation in the middle east has brought down yields, but also you had logan yesterday and jefferson both suggesting that the market was doing some of the work for the fed. The probability of that last hike has fallen. Were now down to 14 just for the november and around 30 and you can see from the chart there its down quite a bit from it was just after that strong jobs report, becky. Wow. Okay. Well keep watching that. It looks like maybe the fed is on hold, steve, do you think so too . Steve, thank you. Coming up, pepsico reporting earnings better than expectations, also raising guidance for the full year, stocks up 1. 5 . Next the companys chief Financial Officer, Hugh Johnston will break it down. And paul ryan, former House Speaker. Squawk box coming right back. Rated m for mature. An xfinity rewards special offer. Xfinity customers, join xfinity rewards and get your early access code to the play the call of duty modern warfare iii open beta. Early Access Begins on october 6th. First on playstation. Visit xfinity. Com rewards. Rated m for mature. An xfinity rewards special offer. Xfinity customers, join xfinity rewards and get your early access code to the play the call of duty modern warfare iii open beta. Early Access Begins on october 6th. First on playstation. Visit xfinity. Com rewards. Pepsico reporting earnings 10 cents above expectations. The companys raising its guidance for the full year. Joining us is the chief financial office. Im trying to figure out the rays and then the better than expected numbers. The raise in guidance, just talk about running the business better, i dont really see where necessarily revenues are up because of gains in market share or innovation, he talks about things like, weve made investments in manufacturing capacity, go to market systems, supply chain, these all seem like ways of running the business better in terms of cost. Is that why youre outperforming . Thats one of the reasons. I do think thats as a company were executing better and better as we reinvest back in the business. I wouldnt dismiss the role of innovation in this. We got great new products across the snack portfolio, things like, things we got going on in quaker and doritos. Lot of good innovation going on there. This is typically the lighter innovation part of the year. Maybe the emphasis that youre picking up a little bit and in the beverage portfolio, the relaunch of the pepsi logo on the 150th anniversary of pepsi. Typically, thats driven Great Results for us as well. I think its a good balance of topline driving with the consumer and running the business better, whats leading to Great Results. Were stacking quarter on quarter. You cant figure out why stocks go up or down, obviously, the last six months not great, what do you think thats a reflection of . More than anything i think its Interest Rates and i think to some degree its dollar strength. I lean more into Interest Rates as the driver. As most Food Companies were a pretty good dividend payer. 2. 5 to 3 range. Now that the 10 year is pushing into the 4s and almost 5, i think theres more alternative investments that bear that return, that said, you dont get the growth with those that you get with us. A bit of rebalancing going on in that regard. Thats obviously an interpretation. Beverages or those great salty snacks, what was more material to the better than expected results . Then i want to talk about input costs and inflation and everything else. Was it the reintroduction of pepsi those vegetable things you send me thats not happening for me. Im sorry. Some salt did you try those vegetable things, sorkin . My wife liked them. I dont know, i need corn chips, hugh. Joe, i know youre a protein guy. Drink muscle milk in the morning. Its a great breakfast. No, in terms of the results it was equally beverages and snacks. Its good broad based strength. The investments were making in advertising and marketing are benefiting all the brands across the portfolio. Yeah, okay, lets talk inflation and what youre seeing, then, i would think if people were taking ozempic you could eat more it makes you not to eat. You dont want to eat. Is that happening . Is that really going to happen . Are you worried about that . I would say this, were studying it closely, but we dont see it at all in our numbers right now, i mean, zero at this point. Look, i think theres a lot of challenges to adoption there, number one, its an injectable drug, number two the costs are going to be high you should have bought a Cannabis Company and start pushing that. Hugh, dont you think long term that once this in is pill form could change the dynamic . In a good way, hugh. Bad for the company in certain ways. Bad for folks who make food. Maybe good for the health of folks, no . Yeah, to tell you the truth, andrew, anything thats good for human health is good for the company in the long run, both as individuals and as a company, i think to the degree that this gets adopted it will likely get adopted pretty slowly over time. That will give us time to evolve our portfolio. If they want more protein or carbohydrates, this is stuff we know how to do very, very well. Well be able to adopt to this as time goes on. Hugh, she mentioned when gasoline prices, when prices go up at the pump you can often see that kind of put the pressure on the pepsico consumer. Theyre using that money to fill their tanks and go without the stuff like picking up the snacks. Have you seen that . Its interesting, becky, you have a terrific memory. We have correlated that consistently over time. Right now were not seeing it. The consumer is still Pretty Healthy from what were seeing. To give you a little bit of data on that front the Beverage Business was 5 in convenience store. Overall, food service, restaurants and the like was up double digits for the quarter, so were not seeing the impact the Higher Oil Prices on our screens business or our away from home business. We didnt get into the inflation answer. No, we didnt. Someone is tweeting, i refuse to take a drug that refuses me from eating snacks. Can you imagine seeing snacks and saying im not interested . 2019, typically running inflation about 2 . Were probably going to be a couple of points higher than that in the coming year and as you know we tend to buy our commodities about nine months out. We have a pretty good view of whats happening. Its still elevated. But still a bit elevated. But the fact that weve got pretty good line of sight into our customer and customer plans for next year which led us to issue the guidance for 24, the upper end of our longterm revenue and longterm eps. For 24. Becky, can you remember this, next time youre making my bag of stuff to send out, dont send like the kale veggie things, send the honey barbecue twisted fritos. Thats my favorite too, actually. Put those in there and keep the veggie things. All right . You got it, joe. Thanks, hugh. See you later. Coming up, israel mobilizing for war. The countrys tech sector expected to feel the impact. Legendary investor paul jones is going to join us on geopolitical events and the impacts on the markets. Squawk box returns after this. when the day that lies ahead of me seems impossible to face a lovely day lovely day lovely day lovely day a bank that knows your business grows your business. Bmo. It starts with a grill. But it becomes so much more. An extension of your home. Not just a weekend retreat, but an everyday getaway right in your backyard. Newage makes it possible with beautiful allweather cabinetry, grills and appliances that transform your backyard into a complete outdoor kitchen. Visit newageproducts. Com to book a free Design Consultation and create the Outdoor Living space youve always wanted. Ever since she was a little ki, all maria wanted to do was bak. And create the Outdoor Living space im maria alvarez, owner of marias cakes. And im axel, proud to be her state farm agent. Her baking superpowers have brought sweetness to our community. I make delicious cakes to make special occasions even better. Maria doesnt just bake; she also creates opportunities. Small businesses like marias, open doors for communities to thrive. Support your community. Support small business. Welcome back. Tech Companies Operating in israel now face uncertainty and disruptions ahead of the countrys shift into war mode. Joining us is with more at whats at stake. Mark med ved. John, we appreciate you joining us. Tell us what its been like to be on the ground, to be in jerusalem in this moment . Its a horrific moment, unfortunately, weve had a very tough half a week here. And weve lost a lot of really great people. Theres been a lot of heroic defense. I think were a little embarrassed by so much the mistakes that were made. But were very confident. The country is unified in a way with unbelievable spirit of people chipping in, 300,000 reservists called up including two of my own kids. Everybody has somebody, you know, in armed forces and were not fighting overseas, were fighting for our homes. And this has been to a large extent like an israeli 9 11, except the only difference by losing almost 1,000 people that israel it was 9 11 terms if american had lost that maybe it would have 20 times the death. This has an impact, whats remarkable is how israel is resilient and despite all of this, life goes on. Our businesses go on and investment goes on and we think that this actually, if you look historically at how israel stocks and israel investments have performed as a result of war, believe it or not they go up and it becomes an actual buying opportunity. Hard to talk that way a couple of days into this, you know, with the terrible tragedies that run folding and the stories, but from a financial standpoint were going to be fine and emerge stronger. Jon, but, what does it feel like to be on the ground in terms of safety . You said life goes on, most of the reports that were hearing about in terms of being on the ground have been that the streets have been relatively empty, are people going to work and to the office no, so, first of all, weve been largely a work at home place, were a tech country, the streets are quiet, because if theres an air raid siren you to go quickly and seek shelter. Ive had nine shelterseeking moments here in my jerusalem house, my home office from where im speaking to you now is right down from my safe room. Were used to it. Its a weird world we live in. By the way, whats remarkable is how many tourists are still here theyre getting used to it. I have a niece whos here for a gap year, whos doing well. And the hardest part is simply hearing the stories of people who were butchered in their homes, the hundreds of kids who were slaughtered at the music festival. But its a very, very confusing moment personally, because were also incredibly aware of support and encouraged by the support were getting. What the u. S. Has done for israel now in terms of the statements from President Biden, former president obama saying that we stand squarely with israel why you dismantle hamas, the fact that, you know the eiffel tower was lit, the white house was lit, people i think understand what were fighting here is not about politics or territories or any real issues its just pure evil and b barbarism. People who are antilife. Were fighting isis. You dont negotiate with isis. You have to dismantle them. Obama was right. I think that our country is united. The tech sector is leading as usual. We represent 50 of israels exports, theres no slowdown in any of our exports. No slowdown in our company. My company is fully operational. We launched two new investment deals this week, millions of dollars is being invested in the commitment to the future. We stand for life and seeking peace and well get through this. Well mourn and bury our dead. Hopefully well get back our hostages southeastern rather than later, but then well go on and well continue building this wonderful country. Jon, before we go, you walked us through what hopefully an effort to get to peace how do you see that play itself out . You have to note the progress thats been made, in fact what i think one of the causes, the timing that hamas chose, was the coming peace with saudi arabia, which the crown prince of kingdom said is getting closer each and every day and hamas and their masters in tehran felt now is the time to strike because theyre against this historic reconciliation. What has happened with israel and uae and morocco has proven we can turn the middle east into a garden again, a source of goodness, literally tackling together world battles. Once we bring the saudis into this its going to be unbelievable. I think in a strange way this unites the forces of good versus the forces of evil. I really dont talk usually this way jon, did you see that mbs has been standing up for the palestinians in all this . Theres a difference for standing up for palestinians and standing against hamas. Hamas is evil. Hamas kills and slaughters children with knifes at their throat. They mass rape women. They kill people at a music festival. There are no politics in the world that can justify that. So theres what we all want is a good future for the region, for the palestinians, for the jews, for the israelis and the saudis. I do think were going the find a way to make that future happen without hamas going forward. Jon, we very much appreciate you joining us this morning. We hope youll come back and talk to us again. Thank you, and please, please stay safe. Thank you. All right, still to come this morning, one Business Leaders fight against antisemitism, bob kraft, the chairman of the kraft group, hell tell us about his efforts and campaign to stand up to jewish hate. What the charts are saying about the next move for the rerkets, the tech sector and mo. Squawk box is coming right back. Welcome back. Futures up a little bit, in the green, right now. Well take a look at treasuries, yields have come down a little bit in recent sessions. See how the events in israel play out in the markets. Joining us is mark newton. Head of technical strategy. Very uncomfortable trying to figure out market reactions to things like what happened, the terrorist attacks over the weekend. But, typically, youre able to look back at other incidents and come to some type of conclusion of what Market Participants can expect, what is that in terms of what youre seeing now and i guess it depends on what happens from here, whether the war broaden and thanks, joe. As horrible as these events are its still right to be optimistic, history has shown that during times of military conflict that market volatility historically has been pretty short lived, it tends up to ramp up fear when people are already pessim pessimistic going into the month of october. Thanks to technology, that pessimism kind with tailwinds of q4 make me optistic that were in bottoming it worked in a lot of settings its the economy, stupid, clinton said, he was right. The fed determines what happens with the economy, the real, i dont know the key point the key leverages of what moves things probably the fed still. Or inflation. Its increasingly becoming consensus that the fed is likely done. Usually when that happens, Interest Rates start to peak and pullback, which will likely to fuel growth in technology. Look at the economy, look, its been its an unusual postcovid world. Housing market, people arent selling their 3 mortgages to buy an 8 . Those postpone any sort of recession regardless of 525 basis points of hikes weve seen. The last couple of points of inflation a lot of people think are going to be a lot stickier, quick progress, is the fed bound and determined to get to 2 . My thinking is, crude oil is something that we should be concentrating on with the geopolitical labor markets, wage gains, its all sticky, isnt it . Lot of the inflation has fallen nearly in half over the last 12 months. Its not at the feds goal, but at the same time, you know, a lot of this stuff in my view and im no economist it ought to figure itself out on its own. Interest rates risen, Economic Data has come in a lot better in recent weeks, the fed is in a tough spot. But at the same time, we do see other evidence. Have we done enough consolidating that we dont go 10 lower . I dont think well go 10 lower. Right down near 4200, which is very attractive area, some people might mention the moving average, thats something thats here. Former february highs, lines up in this area, 4200. Weve seen a decent bounce in the last week that people didnt expect and feel like the feds going to push us into a recession and another war, so, a lot of reasons and good reasons to be concerned about whats happening, history has shown its normally right to put on the blinders and not Pay Attention to those events as having a real effect on the stock market. All right, mark, thank you. All right, coming up in the next hour, a lot more on squawk box port portfolios. Dan niles. Get the best of our podcast on your favorite podcast app and listen any time. Were coming right back. Coming up, a Business Leader battling antisemitism. Bob kraft, the chairman of the kraft group and chairman and ceo of the new England Patriots will be our special guest, hell tell us about his efforts rightft aer this quick break. Squawk box will be right back. But the same aipowered security that protects all of google also defends these services for everyone who lives here. Power e trades easytouse tools make complex trading less complicated. Custom scans help you find new trading opportunities, while an earnings tool helps you plan your trades and stay on top of the market. E trade from morgan stanley. Rated m for mature. An xfinity rewards special offer. And stay on top of the market. Xfinity customers, join xfinity rewards and get your early access code to the play the call of duty modern warfare iii open beta. Early Access Begins on october 6th. First on playstation. Visit xfinity. Com rewards. Welcome back, everybody. Business leaders are condemning the attack on israel in posts on social media and in memos to employees. One of those Business Leaders is bob kraft, the chairman of the kraft group and chairman and ceo of the new England Patriots. He started a foundation to combat antisemitism back in 2019. Robert, welcome. Thank you for being here today. Its great to be here and, you know, sitting with friends i have a certain empathy for the people of israel. I had the privilege to go there when it was 15 years old, even though i think im 35, that was 60 years ago and to see a brown desert flourish and grow and develop and contribute to the world, what theyve done and to see whats happened this week, you know, just to put it in perspective, that unti9 11 was worst attack here, you think there 900 people were killed on that day, the e kquivalency is over 300,000 people dying here. And you know, it was said not many jews were killed in one day since the holocaust. We had the number one packaging company, i have so many friends. People there, theres a young man who went to Harvard Business school, my son jonathan who was on the raid, and hes been communicating with us, how hes down at the border of gaza taking older people, getting them away from that at 70 years old and its just sad and its we have the stop this. You know, im not sure most americans understand that hamas its not a country, its a supposed Political Organization that people in this country have legitimized. But in their chatrter not only the eradication of israel but all jewish people on earth. How can elected officials find legitimacy in a group like that in. You started your efforts on antisemitism long before this, what brought you to that point . You know, i lived the dream, i went to school on scholarship, i didnt have a car until i was 25, this country is the greatest. Im worried about it. Im worried about whats going on, the hate thats building up in so many areas, and people not empathizing and communicating. I think the combination of social media, where people can hide and say anything, and the political environment, you know, i think when i was growing up, Ronald Reagan was president , tip oneill was speaker, they would go at it during the day but come 5 30 at night, theyve had a couple of beers, play nine holes and they would do business that was good for america. They communicated. Now because of the divisive and the hatred and the lack of empathy for other people, we got to keep this country strong and great and bring that back. We had frank on earlier this morning, he cant even show often the focus groups he runs because people say these horrible things to each others faces. Paul ryan is coming on a little bit to talk about what he has seen and where things stand in washington. Whats the solution . How do you fix that . Our foundation, we tried to educate people, we did a Mass Media Campaign that explained the hatred going on and whats happening and mosthappening. And most americans, 95 are good people. And they just have to be educated. We realized, when it came to jewish people, that even the word antisemitism, most people dont understand that thats jewish hate. And we put out ads over a nineweek period, and we were able to educate the American Public, from 80 not understanding, now its down to 60 . And were going to start to continue to do that, because weve got to bring people together. We all have to stand up with one another to fight this hate back. You know, most people, and how we got to the symbolism of the blue square, the jewish people in this country are a little over 2 of the population. But receive 55 of the religious hate crimes. People good middle americans just cant believe that and want to help do something about it and stop it. Where are the problems the worst . Is there a location . Is there something you. It it back to you . I just dont understand what happened . Well, i believe its the combination of social media, people not interacting, people not empathizing with one another. Look, when you want to do a business traction, you go to the people on the other side and you talk to them and its what we need more of in washington. Where people come together and negotiate and either you convince me or i convince you. But now everything is a stalemate. Look what happened with the speaker situation. This is the United States of america. I dont know if this is why iran stepped up at this time, you know, theyre definitely in my opinion behind instigating hamas, because they didnt want the Saudi Arabian deal to go through and i think israel was guilty of military intelligence failure and not paying attention. The u. S. Should have known something, too, i would have thought. Well, its a hatred is not good in todays world. Everything is so fragile. But we shouldnt its horrible to me that a group like hamas can be respected and people in the United States of america can be carrying flags or supporting them when they are preaching hate and destruction of the people. But we have extremists all over this country. Thats what i was trying to understand. When you go back to the reagan area, it seemed to me if there were extremists, they were silent extremists. You didnt see them, you didnt hear them. Now you have people Walking Around this country, standing in front of disney with, you know, nazi flags and guns and in that case, desantis flags, too. And you didnt have people saying, this is crazy. This is absolutely insanity. And they would feel comfortable doing that. The nazis marched in skokie back when i was in high school or something. They are a small group that has never gone away, but its a small group. You know what, its too big. Whatever it is, its too big. Of course. And look, this blue square is a symbol of unity and solidarity for all people to stand together, to push back against hate. We have to fight hate in this country. And part of it is the education. I dont do people know that hamas is preaching the eradication of all jewish people, from the earth . These people, bob, they saw what hamas did and theyre still in sydney, australia, in london. In huge demonstrations in london, after they absolutely saw what happened over the weekend. Thats somethings wrong. Something is wrong. And people like ourselves have to stand together, arm in arm, and we also have to educate. I cant believe objective good people can support these kind of actions. Do you worry that something could happen here . That mccarthy former Speaker Mccarthy mentioned that yesterday, that there are hundreds, theoretically of hamas individuals that may be in the country right now that came across the border. I think we have to be vigilant. We need to wake up. We as a country have to Pay Attention. We have, look, with all of our problems, this is the greatest country in the world. We were able to elect a man of color as president of the United States. I dont know any other western country where that can happen and its so important for people of good people in america, they cant be silent. We need people to stand up and push back on this. And we have to do it together to preserve im really worried about the country, if you want to know the truth. And thats why i started this. And it starts with jewish hate. Hate against blacks, hispanics, asians, muslims, lgbtq plus. Everyone has the right to live the life they want to live. I was just with a very prominent gay person, who said to me, how great it is that weve had the freedom to do the things and do it as human beings, as long as theyre not impacting other people negatively. This is the beauty of this country. And you know, israel, they accepted people from over 200 countries in the world, just like america did. And people came in, where they couldnt live in their homelands, and the country flourished. And america has flourished. We have to keep it going. Bob, i appreciate your message of unity this morning. We appreciate you being here. And want to thank you very much. Well, thank you. And thanks for giving me this opportunity and we didnt talk about any other subjects that, i dont know, one in four, bob. Therell be another year. Well, you know, i spoke to my coach and i said, what can we do to make jet fans happy in this environment, and so, you had the last two games. Thats very nice of you. Thats very nice of you. We have to go arm in arm. Unity i didnt know it include jets fans. Thats night. Bob kraft, thank you for your message on unity this morning. Great to be you all. And thank you for this opportunity. Thank you. When we come back, another big hour of squawk ahead, including former House Speaker paul ryan is going to be with us on the gop scramble to select a new speaker to replace Kevin Mccarthy and legendary investor Paul Tudor Jones will join us with his thoughts on the markets,he t economy, the fed and so much more. We are coming right back. The lor barista coffee and espresso system. Now brewing peets coffee. Only the sleep number climate360 smart bed lets the lor barista coffee and espresso system. You both sleep up to 13 degrees cooler or warmer on either side, and at your ideal level of comfort. Your sleep number setting the allnew queen sleep number® c2 smart bed is only 880. Sleep next level. Shop now only at sleep number. Good morning. Treasures in focus with 90 minutes to go before the opening bell on wall street, yields falling as investors flock to safe assets amid the outbreak of violence in israel. And Israels Defense Forces hitting targets in gaza in retaliation for the past weekends attack. President biden planning to address the nation this afternoon. Were going to talk about the conflict, the u. S. Response with former House Speaker, paul ryan, and then, with investor and philanthropist Paul Tudor Jones. Its a final hour you dont want to miss and it starts right now. Good morning and welcome back to squawk box here on cnbc, live from the Nasdaq Market site in times square. Im joe kernan along with becky quick and andrew ross sorkin. Muted performance so far, a little bit green. I guess better than a lot of red. But averages actually, we are now seeing a little red in the s p and one of the nasdaq has just turned positive. But were right around the flat line. But treasuries are in a little bit of a trend. We are seeing yields moderate a little, but not as much as they had been. 4. 7 now on the ten year, and just over 5 on the twoyear. And we probably ought to put this board in every single time. Weve checked the markets, wti crude now 85, basically unchanged on the session this morning. The latest out of israel following hamas tobacco over the weekend, israel says that it has regained effective control over its south and the border with gaza, after militants breached that barrier on saturday. Israels military said that it struck hundreds of targets in gaza city overnight. Media says that israel expanded its mobilization of reservists to 360,000 people, as questions swirl over a possible invasion of gaza. The israeli Defense Forces say that more than 900 israelis have been killed and more than 2,700 have been injured. The palestinian Health Ministry says 770 people have been killed in gaza and more than 4,000 injured. In the west bank, 18 are dead and 100 people have been injured. Israel says hamas and other militant groups in gaza are holding more than 150 soldiers and civilians hostage. A spokesman for the armed wing of hamas said last night that the group will kill civilian captives anytime that israel targets civilians in their homes without prior warnings. A white house official says that President Biden will speak on the war at 1 00 p. M. Eastern time today. And record it and put it on social media. So we should probably add that as part of the threat o, the killing these are the kind of individuals that were talking about. Joining us to talk about the conflict in the middle east and the upheaval among republicans is former House Speaker, paul ryan. Hes vice chair of tenio, and speaker ryan, lets talk a little bit about what were seeing right now. The situation in israel first. Obviously, you have experience with whats been happening in the middle east. What do you think of this . Absolutely horrific, becky. Good to be with you. Its really clear that we all send a signal or especially our government that we stand with our ally israel. This is a terrorist organization, its an act of war. Ive been there a number of times. My wife and i have friends there. I was actually at gaza when arielle sharon pulled out of gaza back in the early 2000s and its been pretty steadily downhill since then when hamas took over. Its the more important we need to get our act together in congress, because we need to back phil our allies with whatever they need to protect themselves and save themselves and prosecute this war that they now have on their hands. How hopeful are you or arent you in terms of a speaker being elected this week . I dont know that it will occur this week. I hope it happens this week. Todays the conference, tomorrows theoretically the vote. I dont think they should go to the floor until they have they need 217, not 218. I think its important. I think 100 members or so signed a conference petition. And theyll probably vote on this today, that they dont go to the floor until they actually have the votes for speaker. It would not be a pretty sight to see for them to go to the floor to elect a speaker. Youve got two very qualified people, jim jordan, Steve Scalise vying for it. But it very conceivably could take more than a day or two to get this done. But we need to get on with it. I dont think theres anything pressing immediately that needs to pass, but i think its important for the world to show that a democracy is working and thriving. I think what matt gaetz and these seven nihilists did was a total disgrace. 4 of the conference overturned the will of 96 of the conference to fire a speaker for, what, doing his job . If matt gaetz had his way, we would be not only in a Dysfunctional Congress right now, but a Government Shutdown. I think its disgraceful what these people did, but we had to move on, we had to elect a new speaker, we have to show that we can walk and chew gum as a country at the same time, govern, and give our allies what they need in this very, very pressing time for them. Paul, you were one of the young guns who came with Kevin Mccarthy. Is there a chance that Kevin Mccarthy gets put back in that role . Because there has been speculation about that . I dont think so. I talked to kevin this weekend. My guess is thats not going to happen, simply because i dont know if these eight nihilists are going to reverse their position or if the democrats would reverse theirs. So they get their way, then . Say that again . They get their way, then . Theyve already gotten their way. Not necessarily. Theyre not rational people. But he could get 96 again. I mean, all you need are a couple of democrats. That means democrats. That means democrats have to come over and say, were putting party aside for the country, for an institution i bet you has i think they should have supported him in the first place. I bet you he has more that 96 , im not sure i guess, maybe either jordan or scalise could get that. But just organically, i bet you hes got more support than either one of those gentlemen. But they could get matt gaetz, so matt gaetz is actually calling the shots on who the next speaker is. Thats hideous right . If this was a silent blallot it would have been one person, matt gaetz, who has a personal agenda against Kevin Mccarthy. No matter who is nominated as speaker, steve or jim, the conference needs to step ahead of that and fix this motion to vacate, because todays crazy tactic is tomorrows normal behavior. With these kind of entertainers in congress, its a oneway ratchet. Yesterdays crazy stuff is todays normal behavior. You didnt want that job either . You had to be dragged quicking and screaming no. But mccarthys good at it and wants it and is good at it. Thats right. Thats right. Look, it was meaningful, im glad i did the job, i did it for two terms, im very thankful for having the opportunity to have done it. It wasnt what i was looking to do. Kevin is natural. Hes built to do this. Born to do it. Hes good at it. And the democrats w, i think th saw an opportunity to take our best player off the plagueying field. But weve got to move on. If they can go back to kevin, that would be great. But i dont think thats in the cards, because i dont think the democrats are going to change and these eight people arent going to change. So lets just get something we can get behind and lets fix this motion to vacate. No matter who becomes the speaker, over a period of time, this is were going to be back in the same place. Some crazy member who wants to get hits and clicks and entertain is going to do this for some personal pique. All kevin did is he stopped a Government Shutdown and did a budget agreement with biden that a majority of republicans supported. So you cant govern this place, this institution with this with these crazy tactics being empowered with just a handful of people. He didnt end an ethics investigation, thats what it was. He didnt end we wanted him to he didnt even have the power to do that, supposedly. Speakers dont do that. Speakers dont call up the ethics chair and say, stop investigating, you know, a wrongdoing. Thats just not how it works. Paul, youre joining us from the experts and enthusiasts summit that you and mitt romney are holding every year in deer valley. Youre bringing together a lot of people, some president ial candidates former President Trump is not there. What are you guys all talking about . What are you seeing . And i think part of this is, your concern that there are not people working together across the aisle in washington, but working together in other places, too. Weve been talking about this, this has kind of been a theme this morning. What are your solutions . What do you see . Whats happening . Thats what we this is the annual summit that mitt romney and i garth people together. We have people from the trump administration, we have democrats, we have its mostly traditional conservatives. And yes, we invited the nonindicted republicans. The people who have principles, who i think could make good president s who are addressing the crowd today. But mostly were talking about solutions. How do we get the country through a debt crisis that is clearly in the offing in the future. How do we address ai . How do we bring the country back together . How do we reduce polarization, how do we address principles, solve the countrys problems. Its about principled conservatives who want to see conservatism not just tethered to the popular of one person, donald trump, but principled conservatism that is popular that solves problems. Thats what were talking about here. We have a lot of interest people discussing the good news in all of this, becky, is our countrys problems are solvable. We are the nations leading democracy, leading the free world, and we can solve all of our problems, but theyre piling up, and theyre piling up on becoming unsolved because we have political paralysis. And we have this polarization that is really stress testing our democracy. And now we have these authoritarians, russia, china, iran stress testing the world. And i would argue that the Biden Administration is very weak on these things. I think these authoritarians dont take the Biden Administration that seriously. Biden and trump have both promised not to attack the debt crisis, not to deal with their debt problems. So we think we could stand better leadership in this country, leadership that actually runs at our problems, solves our problems, and brings the country together. And you can have principled conservatism that is inclusive, thats aspirational, and that binds the country together, and doesnt prey on the polarization that is, you know, pulsating throughout this country. Thats the kind of stuff were talking about here at the e2 summit. Are you more or less hopeful than you were, you know, lets say, 20 years ago, when you started coming at some of this stuff. Im more hopeful, because i know we can tackle these were going to have rick reeder here from black rock, one of the best fixed asset guys in the world. We have a lot of policy makers and policy people who are going to lay out solutions to the countrys problems. I guess ill just quote winston churchill. The americans can be counted upon to do the right thing, but only after theyve exhausted all the other possibilities. I think thats just how we do things in this country. We do things the right way, but a little late. And thats where we are. Im just very worried about our debt. Speaker the tenyear treasury hit 4. 8 last week. Im very worried about longterm debt. And i think if we get a handle on this stuff with the leadership in this country, we can stop it. Speaker, its andrew here. We had frank lutz on in the last hour, and we said something that actually maybe is at odds with the churchill line that you quoted. And i think for a long time, weve all sort of held on to this idea of what churchill said as being right. We make all sorts of bad decisions and ultimately we get to the right one. But he said that he believes that over the last, call it decade or two, something has been fundamentally broken. That actually, something in america is different. That we are at odds in way that we werent before. You know, we just had bob kraft on the prbroadcast. He was talking about a period of time when reagan was the president and when tip oneil and him would go for drinks after 5 30, after the day. I wonder, having lived in washington, having been part of this, whether you think somethings actually changed. Because its one thing to quote somebody, that quote, i believe, is over 50 years old. Whether what was taking place 50 years ago was actually different than where we are today. I adore bob. Hes a friend of mine, i think hes doing amazing work, combatting antisemitism. I do think the difference today when churchill said that line, to your point is digitization. I think we have digitized moral relativism, and we now have an incentive structure in our society to polarize. You can make money on this. We have entertainers coming to congress from bothsides of the aisle who dont want to be legislators, but they want to be provocateurs. They want to entertain and provoke and build a brand and reject compromise, reject principles. So that is a new challenge for democracy. It is our challenge. I do think that we are going to overcome this, because i think the country wants to get through these problems. So it just takes leadership. And right now, frankly, we dont have that. We dont have it coming out of the white house today and we dont have it from our frontrunner running in my party today. So i think we can overcome this. And i know how upset frank is about whats going on. I think we can get through this. But it takes leaders to say, to be willing to take when you become speaker of the house, you know youre going to make a lot of people unhappy. I mean, if you dont have 12 people mad at you on any given day, youre not doing your job, and it takes that kind of leadership, which is principled leadership that lays out a vision for the country, heres how we solve our problems, heres how we come together, and then get a bipartisan consensus to do that, or at least get your own Party Rolling in the right direction. We dont have that right now. But i do, andrew, think we can get that. So, no, i dont think its over. I do think that we will get our act together, because, we always do in this country. And i think the country will be hungry for solutions. I think people i watch this quite a bit. I still travel the country constantly. People are getting sick and tired of nothing getting done and problems not getting solved. And i do hope and pray that the country is going to sooner rather than later want to elect leaders that are capable of bridging these gaps and getting things done and not just playing to the base. Not just looking for hits and clicks. You know, we need people were going to go to congress to solve problems, not a bunch of matt gaetz. And i think the country starting to wake up to that, that these are just carnival barkers, not looking to solve problems, theyre just exploiting problems. Carnival barkers get play because of social media. Thats exactly right. Both frank lutz and robert kraft blamed social media on this. If theyre part of the problem, how do you fix that . Im not a person that thinks that the government should take these things over and break these things up. I think theres a social obligation that these companies have to get rid of hate. Theres a crazy amount of antisemitism pulsating around the internet right now. I think these companies have an obligation to try to tamp that down voluntarily, not through the coercion of government. So i think all of us, each of us in our roles in society, in what we say, in what we do in the companies we run, have an obligation to rtry to tamp this crap down. And its really disgustingly ugly with whats going on with the antisemitism were seeing today, all the more reasons for leaders to step up and get past this moment and defend our allies and speak truth this is why im not a trump fan. We need leaders who are honest, ethical, moral people who can lead us. And we need to demand that of citizens of our leaders. And we have a supply problem and a demand problem in our politics today. I think weve got to hit it from both sides, from the demand side as people, and from the supply side as leaders, supplying leadership, which sadly we do not now have. Paul, i want to thank you very much for being with us and for talking us through some of these things. I know you guys have a lot of big ideas that youre discussing out there and i hope youll join us again to talk through some of the potential solutions that yall come up with this week. Thank you, becky. Thank you. Again. Paul ryan. When we come back, a lot more on squawk. Legendary investor Paul Tudor Jones will be with us for a cantmiss interview on the markets, global tensions, the recent rise in Interest Rates and washington dysfunction, all of that, Paul Tudor Jones will be with us at the table in just a moment. Nice footwork. Man, youre lucky, watching live sports never used to be this easy. Now you can stream all your games like its nothing. Yes [ cheers ] yeah woho running up and down that field looks tough. Its a pitch. Get way more into what youre into when you stream on the xfinity 10g network. Coming up, were going to talk about the state of the markets in the midst of the volatility and flaring geopolitical tensions with investing veteran Paul Tudor Jones. Plus, the satori funds dan niles will join us with his view of tech ocstks as we get ready for earnings in the next couple of weeks. Stay tuned. Youre watching squawk box on cnbc. The changing landscape to stay ahead. When you partner with barclays, every change leads to a bold possibility. You have the vision. We have the insights, Financial Solutions and Global Perspectives to help you make it real. Barclays corporate and Investment Bank powering possible. That first time you take a step back. I made that. With your very own online store. I sold that. And you can manage it all in one place. I built this. And it was easy, with a partner that puts you first. Godaddy. Meet gold bond daily healing. A powerhouse lotion that moisturizes, heals, and smooths dry skin. With 7 moisturizers 3 vitamins. And. New gold bond healing sensitive. Clinically shown to heal moisturize dry, sensitive skin. Gold bond. Lets get over to dom chu. He joins us with a look at some of the mornings top premarket movers. Dom, hello, again. Lets quick things off with a check of shares of pepsico. Now close to 2 . Just around 215,000 shares of trading volume. Thats, by the way, just off the premarket highs. It reported quarterly profits and revenues that both topped estimates and raised its fullyear profit forecast. That was thanks in part to better results from its gatorade drinks and quaker foods brand products. Hugh johnson spoke about whats working just this past hour over on squawk box. I think its a good balance of topline driving things with the consumer, and running the business better, is whats leading to the Great Results. And thats the cycle were in right now, is just stacking quarter on quarter. All right. Weve also got some executive shake up news this morning thats moving shares of Unity Software up roughly 5 right now. The Video Game Development platform announced that Ceo John Riccitiello would step down and retire immediately. James whitehurst would assume the ceo role on an interim basis while the board conducts a search for a permanent predecessor. Unity had faced pressure. Those rolebacks began over the course of the past month. And well end with a check on the Airline Stocks, among some of the worst performers in yesterdays trading session, tied directly to that surge if crude prices we saw on the heels of that war in the middle east. Oil prices are stabilized a little bit to the downside, wti crude, 86. 23, off about 0. 2 . Nearly, the Airline Stocks like united, delta airlines, and american posting fracasal gains after steep losses yesterday, becky. Dom, thank you very much. Up next, investing legend, Paul Tudor Jones joins us for a wideranging conversation on the markets. Whats happening with rates and much, much more. Stay tuned. U wchg quk x and this is cnbc. Meet gold bond daily healing. A powerhouse lotion that moisturizes, heals, and smooths dry skin. With 7 moisturizers 3 vitamins. And. New gold bond healing sensitive. Clinically shown to heal moisturize dry, sensitive skin. Gold bond. Circulon with scratchdefense. Built from three layers of nonstick to withstand over 350,000 metal utensil scrapes in laboratory testing. 130 times longerlasting than the competition. Get Free Shipping at circulon. Com mlb chooses tmobile for business for 5g solutions. To not only enhance the fan experience, but to advance how the game is played. Nows the time to see what americas largest 5g network can do for your business. Welcome back to squawk box. We have another important guest at the table this morning. Paul tudor jones is here to talk markets, rates, the fed, and everything happening in the middle east right now. Hes the founder and cio of tudor investments, founder of the robinhood foundation, and its great to see you here, especially at a moment where were all trying to make sense of a lot of senseless things. Lets start with israel in terms of thinking about the geopolitical implications of this, but also how you think its going to longterm and shortterm affect markets. Well, i think israel, obviously, its a huge tragedy, but you have to put it in a larger geopolitical context, which is, we now have possibly three theaters where were going to have geopolitical challenges, the middle east in israel, obviously the ukraine in russia, and at some point down the road, taiwan and china. So its a really i would say, certainly since i was born, it might be the most threatening and challenging geopolitical environment that ive ever seen, because you have four nuclear po powers, three of whom are led by sociopaths, and that would be china, russia, and north korea. Obviously, those leaders have zero accountability, responsibility, to anyone but themselves. And they have not an ounce of humanity in their bones, because they regularly disappear both their friends and their enemies. And then the fourth, iran is led by someone who thinks that god is talking to him and has avowedly has said that they want to remove from this earth a nation state with probably the most brilliant people ever assembled within a national boundary. Its a really challenging environment. If you think about it too much, i want my lucky color to be invisible, right . Its a very threatening time. So that is also happening the same time that the United States is probably in its weakest fiscal position since world war ii with debttogdp at 120 . So its a really tough time for the moral voice of the world, certainly has been the leader since world war ii. Its a really difficult time. Lets break this apart. To this existential risk you talk about, these nuclear powers, is there any way as an investor to even think about that, beyond just the end . Meaning, do you say to yourself, i need to hedge myself against these risks, or you say, these risks are just what they are, so i have to keep going . I think we have become enured to headline risk. If you think about the markets reaction to what happened over the weekend, it was a linear response, right . It was risk off, but it wasnt anything that possibly recognizes just how dangerous this could be. So i think thats because weve gotten exhausted with headline risk. It doesnt mean that we cant have a nonlinear reaction to markets down the road, if something bad happens. So it doesnt mean that it means and i think at this point, were just probably incorrectly exhausted by seeing this. This was pretty bad, though. When you Say Something bad happens, what would that have to be . Something that happens domestically . If you think about, again, what happened, where this really gets bad is obviously if iran and israel get in direct conflict. Thats when it really gets bad, because then youve got the ability to have a First World War cascade, when everyone gets involved. The big question now is, was hamas a proxy for iran, like hezbollah was, or simply an ally . And there are big different responses that come from which one of those is ultimately determined by israel. So yeah, from a personal standpoint, would i be investing in risk asset stocks until i saw what the resolution between israel and iran, you know israel is going to respond in some way, shape, or form. The determination of whether iran was actually responsible is enormous. Because, again, it has the possibility to really escalate into something terrible. And so does that mean that you are we would be, as an investor, risk off in terms of you just said, would you want to own equities . Theres also the question of what you think is going on in the United States with our economy, with the rest of the world, with what the Federal Reserve is or isnt going to do. Its a its a really challenging time to want to be an Equity Investor in u. S. Stocks right now. Its really hard because youve got the geopolitical uncertainty, because i think weve come to live with to a certain extent, but all of those had the ability to have a nonlinear outcome. So something not just business as usual. But equally as much of a problem is the fiscal situation that were facing in the United States, which is going to require a completely different mentality to what thats pretty telling. The real possibility of a nuclear war is there, but our fiscal situation is just as bad. Thats a statement. So black swan theyre not black swans anymore, theyre actual quantifiable risks. We need a new word for black swans. Theres like four or five of them that used to be you didnt even have to if it happened, were all gone anyway, so you dont worry about it. But now theyre actually something thats on your radar. So was the pandemic, which was on your radar in davos before anyone knew the word. I would say the fiscal situation is very different from other cataclysmic events weve suffered as a country. Its not pearl harbor, its not covid, where we did not see them coming. They wereexternal shocks. The fiscal situation we have is one thats really clear and there are obvious remedies for it. And its something that well have to deal with. Its not part of the political dialogue yet, really, i dont think so. Youre talking about entitlements again . Well, its a variety of things. But mostly if you just think about whats happened since really in the last three or four months, were getting ready i dont know if well have a menski moment in the bond market. I dont know if well have that point of recognition, but were going to have the grinding reality that with 122 of debttogdp, as interest costs go up in the United States, you get in this vicious circle, where higher Interest Rates cause higher funding costs, cause higher debt issuance, which cause further bond liquidation, which cause higher rates, which put us in an untenable fiscal position. We our interest bill is going to very shortly exceed our defense spending, in just a couple of years. Its probably in four or five years, well have the highest interest bill as a percentage of gdp that weve ever had. It will probably be close to 20 of your taxes will go to pay interest on the debt, unless we do something. So that has to be part of the dialogue. That has to be the main dialogue for next years president ial election. And right now, the real problem is, the two guys that put us in this situation and i think thats what the bond markets kind of recognize as we get closer to primaries, are the ones that are our choices for president. And can you imagine donald trump or joe biden. Theyre the ones it actually started with trump. Trump in 2016 was going to come and cut taxes and cut spending. Along the way, cutting taxes was a great idea, but he didnt cut spending. He inherited a 2. 6 budget deficit. In 2019, it was 4. 8 , before the pandemic. It almost doubled. And then in 2020, it went to 14 , with the pandemic. But hes the one who wanted to double down and cut taxes. Well grow our way out of it. Joe biden when he got elected, he said, the sugar high is pretty good. You had two or three oreos, ill eat the entire package. And the build back better act was really the build back debtor act. So between the two of them, we kind of added 20 of debttogdp. Neither one of them, the people that created the problem as einstein said, are not the ones to fix it. Neither one of them can be president. Its that simple. Is there a candidate that you like and also is there a candidate that you think has a chance, given the numbers that we see today . Well, its going to be really interesting. Will probably nominate joe manchin. We as a country, you know, freedom is not free, right . Thats the old saying. We love to laud our troops who put their bodies and souls on the line for this great country. Clearly, were going to have to have fiscal retrenchment, were going to have to sacrifice. Were going to have to cut spending. Were going to have to deal with entitlements. Were going to have to change social security. Were going to have to limit medicare and medicaid. Were going to have to raise taxes on the very wealthy. Were going to have to unequivocally raise taxes. The United States right now has the fifth lowest tax take out of 40 oecd countries. Theres plenty of room for to us raise taxes. Would you have shut down the government . Were you with those guys who said, we need to take distraction measures. They say the same thing about the 33 trillion, and well never get anywhere. The problem with them is that they only look at one side of the equation, which is that we have to cut spending. They are unwilling to talk about the other side of the equation, which is, were going to have to raise taxes. You cannot do this simply by cutting spending. We have, right now, heres what the bond market is telling you. Last year or this year, rather, we had 2. 3 trillion of funding that the private sector is required to find the funding for. That has caused a 100 basis point spike in bond yields. In 2024, its going to be 2. 7 trillion in the u. S. 2. 7 trillion. Almost 10 of our budget is going to have to be to fund our federal spending. It doesnt matter what the Federal Reserve says at this point. Theyve lost control. This will be the bond market talking. So whats happening is and why were probably going to go in a recession some time in the First Quarter of next year, probably because the bond market, simply through supply and demand sb is going to deliver more rate hikes, because we dont have a clearing price yet for longterm debt. And so, those rate hikes are probably going to tip us into the recession. We hear people say, the only way out of this is growth, or at least we need growth to help us. How do you raise taxes in a way that doesnt cause growth to be hindered. How rich are you talking about corporations, too . Are you talking about i think all Americans First of all, we need politicians who will tell us a truth. We have a big fiscal problem. 122 of gdp means every 1 increase in Interest Rates over a course of the next decade, everything the same, adds 10 to debttogdp. So we have to have a budget that allows us to reduce Interest Rates and reduce our interest costs and the markets are not going to tolerate that and give us that premium that comes with being the reserve theres not enough guys like you around to raise taxes on to do it. Youve got to go down pretty you need to broaden the base. You cant just do it on you and bezos and people like that. I would agree that were going to have to have higher tax taxes on the vast majority of americans and well also have to cut spending. First of all, its going to take politicians who are willing to have a truthful conversation with us. Okay, thats and secondly, its going to take an American Public again, freedom is not free, we have to remember that, who has the fortitude to listen and understand. And finally if you think about our generation, particularly yours and mine, joe, we have probably been asked to do the least of any generation in the history of this country. Weve been asked to do the smallest amount, to sacrifice the least. I didnt live at home until i was 40, paul. I actually did go to grad school and got a job. So im just saying, were all going to have to give a bit. Were going to have to compromise. Well have to deal with a lot of things that people wont even talk about, that will have to be part of the conversation and discussion. Its going to take great leadership. But weve seen this happen before. Weve seen fiscal retrenchments happen time and time again through history. Were getting ready to have one. Can i just layer one other geopolitical issue in here, and i want to talk about robinhood, but china. China has been buying our treasuries for a very, very, very long time. And yet we now have a more complicated relationship with them than ever. How concerned are you about that piece of this . Well, again, i look at markets from a flow of funds standpoint. So weve lost a lot of our Foreign Central Bank support. Theres going to be a crowding out effect, right . And the crowding out effect, you already see it. Weve got the governments now borrowing at 5 . All of this work ten years ago when rates were zero, right . You could paper over any problems you want, taking on whatever debt you want. That was the problem with qe and zero rates. Is we indebted ourselves, when there was no cost. Now, all of a sudden, theres a cost, right . Corporate borrowing rates are 6. 5 , high yields, 9. 25. Credit card debt is 23 , right . And a loan shark all of a sudden looks like mother teresa. So were at a point where well have to get our fiscal house in order. And its going to take at a certain point in new jersey and new york, marginal rates are almost 60 . So is 70 okay for certain people . A. And b, should we raise rates for corporations, theyre not people, but supposedly they are as the Supreme Court said. Do we raise rates on trying to compete globally, corporations are. Should we raise taxes on corporations and is 70 an okay marginal rate . Thats obviously the most difficult question a politician has to deal with. We all have to if you think about where we were when the last time we had debttogdp in the 50s, 60s, 70s so we should go to 70 . Im saying that some combination of entitlement reform, right, 70 of our budget deficit comes from social security, medicare, medicaid, theres going to have to be entitlement reform. Were going to turn every knob a little bit, right . Thats what will have to happen. Well have to turn down the spending, turn up taxes, incrementally, at every point in time to deal with this. And again, it cant be one of these situation where everything where somethings off the table, right . We dont i dont think we have the ability to find 1 trillion of savings. Thats what we need to stabilize debttogdp. Well have to find 1 trillion of savings in 2025. Thats what its going to take. And the markets i dont think are going to give the u. S. A pass until we get to that. So that 1 trillion of savings can come from somewhere. Its going to take people getting in a room and compromising and having the ability to have a discourse and find as americans have for 250 years, find the best solution that works for everybody. I said i want to talk about robinhood, but i also just looked on the screen behind you, and i saw the price of bitcoin. And i know every time weve spoken, youve had a take on bitcoin. Do you have a new take . Still holding . I think now the barbers relics and i would love gold and bitcoin together. I think they probably take on a larger percentage of your portfolio than they would, because well go through both a challenging political time here in the United States, and were going to go through weve also got a geopolitical situation. I would say but high Interest Rates were supposed to be helpful to bitcoin . But look whats happened to gold. Its clearly been suppressed so, you know, more like than not, well go into recession. There are some pretty clearcut recession trades. The yield curve gets really steep. The stock market typically right before a recession declines about 12 thats probably going to happen at some point, from some level and you look at the big shorts in gold, more likely than not in a recession, the market is typically really long, assets like bitcoin and gold. Theres probably a 40 billion worth of buying that has to come in to gold at some point between now and if that recession actually occurs. So, yeah, i like bitcoin and i like gold right here. Before we let you go, i want to talk about robinhood, which of course youre the founder of, but also the migrant issue in new york, given what robinhood has done over the years to try to help new yorkers, we are now facing a new crisis. Right. So you just have to remember, being a new yorker is a very special thing. We have the gray lady sitting in new york harbor and she says, bring me your tired, your poor, your hungry, those huddled masses that yearn for freedom. And i would argue that describes 90 of the migrants that have come into this country. I think when we go to heaven and you get to the pearly gates, theyre not asking for your National Identity card, theyre not. They take everyone, depending upon who you are. Robinhood is going to help the people in new york city who are in need, whether theyve been here for ten minutes or ten years. Thats what were going to do. Were going to reach out. Now, having said that, clearly, we have an unsustainable situation in new york city. We have 120,000 migrants on an already overtaxed situation, where were now were now putting people who are poor and destitute on top of the underserved an underresourced in this city. Its not fair. Its wrong. I though joe manchin, who by the way i hope runs for president under no labels, had a great solution on friday. Declare a temporary state of emergency, close the border. Let us digest the 3 million migrants that have come here in the past two years. Let us go through a natural a legal naturalization process where they learn, those that make it, what it means to be an american, how our founders built this country, what democracy is, what civic duty is, what an election means which they havent seen. So, yes, we have a problem. Its impacting us and were doing everything we can at robinhood to ameliorate it. Paul, we want to thank you. You have a big Investor Conference coming up that raises an enormous amount of money for new york. I hope that everyone that can afford to will come. Sam alton, condoleezza rice, steve cohen, ken griffin. Its going to be absolutely the best one weve had. All that money goes to helping people in need. Where can you find details and sign up for it . On the robinhood site . Absolutely. Paul, thank you for coming in and thank you for your perspective on all of this and walking us through it. Good luck with the event. Well be watching that one as well. Thanks. Were going to come back and talk mega caps with sat tory funds dan niles. This is cnbc. This wokes kickoff of earnings season comes renewed focus on stocks that have driven the market returns. Those, of course, the biggest tech stocks, the magnificent seven, magnificent eight. Joining us is dan niles founder and senior Portfolio Manager at the sat tory fund. Thanks for joining us, just checking the clock. I wish we had more time. I thought Interest Rates rising, that these were the most vulnerable. We now know multiple contraction might take the back seat to just chugging along with earnings. Youre absolutely right. It comes down to stock prices are multiples times earnings. I think whats going to get tricky, though, is earnings season coming up. If you look at the magnificent seven and look at them compared to the overall stock market, you look at the russell 2000. Its about 20 of their revenues comes from outside the u. S. For the s p 500, that number is closer to 30 . The magnificent seven is 53 . The reason that matters is the dollar has gone up about 6 since mid july which is when most of these companies guided. Thats a pretty big headwind to the Fourth Quarter guidance or looking into next year. Then on top of that, actually, oil going up impacts some of them as well. Thats, to your point, joe, i think earnings, thats where actually majority of this risk lies as you think about q4 and more importantly guidance into q4. Youve been focused on some pretty good tech stocks and able to beat the market in both up and down periods in recent years. Are you less bullish now on what got you to the dance . Yeah. What we bought a few days ago, we bought a massive slug of stocks in the russel 2000. Those stocks are flat yeartodate. We are along on two of the magnificent seven which is nvidia and google. Were short two of them including apple. The other three, were most likely not going to be involved or likely to be on the short side. So for us, we think that market is going to go up between now and the end of the year most likely. Obviously the situation in israel complicates this a lot, and were managing the portfolio daily because of that, but i think looking at tech stocks, given the headwinds they have, youre asking for a lot between now and year end because remember, the magnificent seven are up 96 on average year to date. The equal weighted s p is flat. I think its going to be hard, especially with valuations where they are for the overall market which is above normal by 1015 , and for a lot of these names that are driving that overvaluation to ask them to pull it much higher. I think youre really going to have to pick stocks, not just buy a basket of all seven. Whats the short . Youre thinking about shorting apple. Youre only long two. Whats the other short . Its tesla, because we just think that with auto financing rates as high as they are and with theyve got a pretty high bar to clear going into q4. At the same time youve got consumer running out of money in terms of excess savings, and then youve got Student Loans restarting. We think theres a lot of headwinds in the stock. Its done great this year. Its got pretty high valuation, and i dont Like Companies where numbers have got to go there. Remind me, what were the two that youre long . Nvidia and were long google and nvidia. We think those are the two where we feel their beat and raise quarter is coming. Even with nvidia, this is a rng wah sign, they Beat Estimates by 21 in july. They raised the next quarter by 27 . The stock is down 4 from the day before they did that. Youre going to have to put up really good numbers if youre these other companies that dont have the growth that nvidia has to be able to see those stocks work. Thats why were in consumer staple stocks right now and russell 2000 stocks. Those are what were counting on more which gives you a little bit of defense as well. We saw that with pepsi this morning. Theyre the fourth largest weighting in our Consumer Staples basket. Thats what i want to be in between now and the year end especially with the geopolitical risk. Perfect ending point. About 30 seconds left, dan. Thank you. Well check back in and see how this works out. Those are pretty definitive calls. Final check on the markets, weave improved a little bit. Were up 70 points now on the dow, 14 or so on the nasdaq and about 5 point, as you can see, on the s p. There are yields. We didnt trade yesterday. This is the first data point of the week for the tenyear and the twoyear. Make sure you join us tomorrow. Right now its time for squawk on the street. Good tuesday morning. Welcome to squawk on the street. Im consistent with jim cramer at the new york stock exchange. David faber has the morning off. Equities trying to build on mondays bounce as the tragic headlines out of israel are offset by dovish fed speak. Tenyear drops to 4. 66. Our roadmap begins with the israel Hamas Conflict entering its fourth day. Israel says its border with gaza is now secure. Pepsi rallying in the premarket postin