Transcripts For CNBC Squawk 20240702

It ended up 34 points. Look at what is happening with the treasury market. This is the big story from yesterday. Huge swings where you saw the yields up significantly in the morning and drop Something Like 18 or 19 basis points. You see the tenyear yield below where we were this time yesterday. 4. 488. The twoyear yield at 5. 07 . Lets look at crude oil. Wti is up to 85. 93. Then we look at the crypto board. You b bitcoin is up this morning with the speculation it will be approved by the s. E. C. 17,000 is low. I remember it. I dont get the speculation. We talked to hester yesterday. I cant believe it hasnt happened. She also has been in favor. She seemed to suggest and i read her comments to mean these folks were not any more inclined to do it a week ago. I got her. If we did get that from her, it was like go figure. For some reason, they will not do it. It implied the logic. Sure. She has been in favor. If you have people who dont agree with logic, it doesnt matter. Ge is out. Phil lebeau is here with more. We are looking at the beat on the top and bottom line. 82 cents a share above the estimate of 56 cents a share. Revenue stronger at 16. 5 billion. The growth here is largely because of organic growth in the orders for new equipment and services by 18 . The real growth driver here is with ge aerospace where they saw huge growth in terms of organically. Free cash flow of 1. 7 billion. Profit margin at 9. 88 in the Third Quarter. More importantly, ge raising guidance for 2023. Eps for 2023 is now expected in the range of 255 to 265. It was 210 to 230. It was raising guidance in the low teens. It expected low double digit growth previously. You are looking at the company expecting maybe 10 growth. Now in the 14 range. It is raising the Free Cash Flow guidance for 2023 to a range of 34 4. 7 to 5. 1 billion. Ge was expecting 4. 1 to 4. 6 billion of Free Cash Flow. Any way you look at this, strong numbers across the board. They plan to complete the spinoff in the Second Quarter of next year. Thats when ge will launch ge aerospace. In terms of the Third Quarter, guys, great numbers and raising guidance for 2023. Back to you. Phil, thank you. Checking out the market cap. 116 billion. It is like when i look at citigroup, i have to remember it is 100 stock. You have to divide it by eight, i think, to get th 1 for 8. Thanks, phil. And the latest on gaza with more from jay gray in tel aviv. Good morning, jay. Reporter good morning. We are hearing from the hostages that were released, including an 85yearold woman who just in last few moments talked about her experience in captivity. Saying she was treated well. She shook hands with captors before leaving. She was provided food, water and medicine. She saw the network of tunnels in gaza and it looked like a spider web according to her. She also had tough comments for the is sraeli Defense Forces an saying why they did not take this seriously. Why there wasnt a bigger presence involved and asking why and how these attacks owecoccur. There are at least 220 hostages still in captivity. All of that going on as the idea continues what they are calling a wide scale operation hitting 400 military targets in the last 24 hours. Including rocket command centers and antitank installations and tunnels. Israeli defense minister and im quoting here that they are involved in a multilateral operation that will soon p proceed from air, ground and sea. Thats going to with one end of the gaza strip. On the other end, we know 20 more aid trucks are rolling across the border with egypt and into gaza. Food, water, medicine and medical supplies and no fuel. Fuel is critical. The u. N. Is saying it is as important as food or water in the area for the hospitals operating. They are doing so at 150 capacity. Likely there is a day of fuel left before sthey shutdown. One official saying these hospitals will become mass graves. Jay gray. Jay, how are things shifted on the ground in terms of the psyche of the folks around you right now . Reporter i think there is a continued support here on the ground in tel aviv for the israeli forces. People are still stunned and hurt by what happened on october 7th as is much of the world. They believe the forces should make a ground incursion. There is a lot of concern about the hostages and what will happen should tanks roll across and into gaza. Jay gray this morning in tel aviv. Thank you. I appreciate it. Thanks. We have a news alert from china. Bloomberg is reporting that president xi jinping made his first known visit to the central bank. That visit has not been reported by state media. Bloomberg says the visit is aimed at better understanding the Foreign Exchange reserves. On the squawk planner, we heard from ge and we will hear from gm and 3m and cocacola and verizon before the opening bell. The ceo of General Motors will join us. After the closing bell wit, we hear from alphabet and microsoft and snap. We have more on squawk box coming up, bill ackman and bill gross are pulling back on bonds. That story is next. And later, a read on real estate. Earnings due from pultegroup. You are watching squawk box and this is cnbc. Experience the art of High Pressure brewed coffee with the lor barista system. Enjoy richer, bolder flavors that satisfy your senses like never before. Inspired by french artistry and elevated by High Pressure, its a dramatically different coffee experience complete with a kiss of velvetsmooth crema. The lor barista coffee and espresso system. Now brewing peets coffee. When you think of investment risk, do you consider climate risk . Changing weather patterns are impacting the way we live and the value of businesses large and small. This can mean disruption to supply chains, changing demand for products and shifting regulation. What does this mean for your business, your clients, and your investments . Ice offers data and markets that can provide critical insight. Manage your climate risk with ice. Cmon, were right there. Cmon baby. That can provide its the only we need. Go, go, go, go ah touchdown baby touchdown are your neighbors watching the same game . Yeah, my 5g Home Internet delays the game a bit. But you get used to it. Try these. Theyre noise cancelling earmuffs. I stole them from an airport. Its always something with you, man. Great solid greek salad . Exactly dont delay the game with verizon or tmobile 5g Home Internet. Catch it on the xfinity 10g network. Now to the bond market. Bill ackman unwound the investment in government bonds and risk. He said the keconomy is slowing faster than expected. And then bill gross is expecting recession by years end. The comments coinciding with the drop in yield during yesterdays session. The tenyear yield had been above 5 before the comments. Bill gross has been right about some things in the past. He knows about bonds. Bill ackman made a lot of money, obviously. It is assuming this, isnt it . Were going to get a 5 rate. Thats a weird time to say the bond the rise in yields is over with the sharp slowdown in the economy. Ackmans point is because of the israelihamas war, you could see a flight to safety. I dont know how longterm of a call this is. At least bill gross thinks were in recession by the end of the year. I didnt talk to him. He is not talking about the economy slowing down . I didnt see the entire thing. He cited the israelihamas war as the reason you see the flight to quality. I think he was citing risk around the world to the economy which is impacted by it. Lets talk to matt toms about this. Global chief Investment Officer of voya. Hopefully you have been able to hear the conversation around the table. Are you with bill gross or ackman . The recession by the end of the year is too soon. We have been calling for softer growth, but not recession. Everyone wants to take the growth. You will see a soft look on growth. The call on where crrates is important. 5 yield and you can leap slower and grind higher. We think the insulated effect of the economy from higher rates is starting to abate the consumer who is not as strong. Corporate earnings will weaken a bit next year. Government spending impulse wont increase. Make no mistake at 5 , it is attractive with that yield. What is the chance of a 5 yield . Bill ackmans comment is what we are seeing in the middle east. It is a cloud on the world, but is it going to be a cloud on the markets . It shouldnt be. Theres a great tragedy occurring. You have geo ppolitical events which becomes part of the kaleidoscope. There is a tailrisk scenario. Bonds rally and the tailrisk happens, we dont think that forms the central tendency. It provides value in bonds or the diversified Corporate Bond portfolio and it is 6 yield. Those are competitive versus the s p. People are connecting the dots, matt, to this if it were to spread to oil in the middle east. If this were to spread to and disrupt supply with demand which is still strong and we were around 100 like previous conflicts in the middle east, that would cause a sharp slowdown which would make bonds a buy. It would. It would be stagflation dary. Europe would have to stay higher. That would be a bad event. Not the central tendency. There is a risk with why bonds have a Downside Protection benefit for you. Geopoliticals dont drive the central tendency. You see the vix print higher and volatility print higher. That is a headwind in the financial markets. Financial conditions have weakened which is the direction of travel. It doesnt provide the path forward. Joe was pointing out what bill ackman was making. He believes the economy is slowing more than the data suggests. It would have to fall off a cliff, matt. The gdp number is the first look at Third Quarter, i think. If we go from 5 to a recession or sharp that is like falling off a cliff. Do you see anything in the numbers to indicate that will happen, matt . Do you need a crystal ball . Is there anything that says that . You can. You have to see something break. We are seeing longterm influence soften. The consumer is weakening in our opinion. Corporate Earnings Base growth is weakening and the fiscal impulse is weakening. Next week is the treasury refounding announcement and the fed, on the week of halloween, appropriate with the politics in washington and the careless spending. All of that is longer term. The consumer is pulling back, but not immediately shutting down. Nor is the jobs market or those with wealth or savings that pay high Interest Rate. Zero was the abnormality. Some are winning from higher rates t. Is too early to Say Something will break. Things can always break. Forecasting a break is difficult. Central tendency is softer growth. Not collapse. Matt, what does that indicate . Take yields higher and markets come back into play. What is the marktomarket Balance Sheet . It doesnt matter if they borrow from the fed liquidity. You have seen that with the financials. That helped pull financial stocks lower versus growth stocks. We think that is an earnings influence. Private market has a good ability to the bank channel. We think there are other channels to let that persist. That lending persist. Matt, we greatly appreciate you helping us through the market that doesnt make sense. Thank you. I appreciate it. This is complicated. This guys reasoning for why we fall off the cliff. We ran up to 2 trillion. The policy changes and fiscal and mondetary policy that are nt here after this quarter. That would be weird to go from 5 to. 50. That the case. You know, you mentioned the deficit. That is double from last year. Stimulus and we had it is a lot of connecting the dots. What causes that 5. 05 on the tenyear yield . In the afternoon, we were 4. 810 . That is with the atlanta fed at 5. 4 . When is that . Thursday . I think. For gdp. When we come back, more backlash from harharvard. This time from alumni angry with the protests over the terrorists attacks by hamas. And we go to washington to see eight lawmakers vying for speaker. Squawk box will be right back. This is american infrastructure. Megawatts of power, rails and open road, and essential services of every kind. All running on countless invisible networks, making it a prime target for cyberattacks. But the same aipowered security that protects all of google also defends the systems running americas infrastructure. For these services. For the 336 million of us living here. In the u. S. We see millions of Cyber Threats each year. That rate is increasing as more and more businesses of us living here. 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 moments need the next level network. Welcome back to squawk box. I dont know if you saw this. Five harvard alumni, including mitt romney and seth klarvin are accusing the school of ignores students. Threatening demonstrations and jewish students locked themselves in dorm rooms. They are urging harvard to restrict campus to students. They are proposing a semester long course teaching Critical Thinking and interrogation of facts. Independently of that, the former maryland give larry hogan is withdrawing his fellowships at harvard after the denouncing the antisemitic material. He will join us in the 8 00 hour today. I thought the letter from mitt romney and seth and a couple of others was fascinating, but not just fascinating, but a lot of people complain about what is going on at universities. They actually spelled out what to do about it. It is one thing to say i hate everything that is happening. You are terrible. It is another thing to say it is terrible and here are some concrete ways to fix the problem. I actually thought that everything that was on the list was generally a reasonable common sense style to think about. Andrew, we have a lot of earnings today. Things like this are not necessarily what we talk about. It is relevant now. I told you, we are in a bizarre world. Did you see what i asked you to look at . The press secretary was asked yesterday about just this issue. Threats and antisemitic threats to jewish people. Her answer was the president is very worried about a backlash against muslims and islamic people. At least on my twitter feed, people were like come again . What . A Democratic House member wrote a letter and saying what are you doing . You need to do better on this. It was josh moskowitz. Is that her or the deepest part of the administration . It reminds me of the obama years. She had to come back later and tweet. We are very concerned about the rise of antisemitic. We were going to say Something Like this in a post. We were shocked that the Biden Administration beat them to the punch of what with what looked. She was called out. I watched it. We should look at the donor class. I think the idea of the critical discourse and Critical Thinking and discourse. Accountability matters. Were worried. The president is worried about people on both sides being targeted. It was bizarre. Coming up, a read on real estate. The pulte group ceo interview is coming up. As we head to break, here is a look at the s p 500 winners and losers. Announcer winners and losers sponsored by state street global advisors. 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 . 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. Gm just out with earnings. Lets get to phil lebeau who is joining us with the numbers amid a big strike. Well talk about the strike impact. You see it in what gm announcing this morning. Lets go with the q3 numbers. Gm earnings 228 a share. 1. 81 the was expected. 44. 13 billion revenue. We are seeing the rising costs and cost in terms of tighter margins. Margins for the Third Quarter up 8. 1 compared to 10. 2 last year. North american margin is 9. 8 compared to 11 last year. Gm saw profitable growth in every region around the world. Thats great. We knew the Third Quarter would be strong. It is the impact of the uaw strike is what people are more interested in right now. What investors are focused on in q3, the impact was 200 million between october 1st and 21st. The first three weeks of the month, the impact was 600 million. What will the impact Going Forward be . Gm expects 200 million per week impact from the uaw strike as it currently is laid out. In other words, if there are more locations where the strike grows at gm, that cost will go up. Right now, it is 200 million per week. Gm is withdrawing guide aance f 2023. It is withdrawing the Production Guidance of 400,000 evs produced by the middle of 2024. This speaks to the higher costs with the uncertainty with the ev market as sales slowdown or the rate of growth is not as great. It is delaying the production ramp at the michigan plant which we talked about. Gm expects to save 1. 5 billion by slowing down the ramp up in ev production. The headline here is they are withdrawing guidance for 2023 because of the uaw strike. Well discuss this with gm ceo Paul Jacobson in the next hour and including where they are on the next offer. A number of things and we heard from the uaw and heard from them on friday. The arlington plant is on notice for potential strike. Well talk with paul about that next hour. Okay. Phil, thank you for that. Well keep our eyes on the numbers and talk to you in a little bit. In the meantime, 3m out with results. Stronger than expected earnings per share of 2. 68 against 2. 34 the street was expecting. They are raising guidance for the full year. 8. 95 to 9. 1 9. 15. Although the low end of the range is above that. You can see the stock right now up by 3. 8 . Comments from the cio micke privatize romw roman on this. They are advanced priorities, in his words. Talking about driving performance. They saw an increase of operating margin of 23 . That is in expansion of 1. 6 Percentage Points and headwind of 0. 8 . They are looking to progress with the healthcare spend and working to resolve legal matters. If you are looking over one year, that stock is still down 25 . This morning, with the earnings release, it looks like the stock is up 3. 8 . When we come back, the ceo of pultegroup will join us on the latest quarter and the health of the real estate market. Thats next. Also, reminder for you, you can get the best of squawk box on squawk pod on your favorite podcast app and listen any time. Well be right back. Welcome back. The Third Largest home builder reported Quarterly Results compared to the Consensus Forecast of 2. 84. Joining us in the interview is ryan marshall. He is the pultegroup president and ceo and our very own diana olick. Ryan, what came out today with the numbers . Numbers beat expectations. The big question is what is happening to demand as Mortgage Rates climb north of 8 . What you are seeing . Good morning. Thanks for having me. We had a great quarter and it adds to what has been an extraordinary year for the Company Thanks to a strong operating model and wonderful team. A few of the things i think i would highlight for the quarter which were particularly proud of is great demand. Our orders were over 7,000 for the quarter which is on a year over year basis nearly a 43 increase. Certainly, things have gotten more difficult in a high Interest Rate environment. C c candidly, we have been facing that for the majority of the year or 18 months. We have the ability to operate in that type of environment and deliver Great Results for the shareholder. Obviously, there is huge demand for homeownership when you think of the supply out there. That is a story we talked about again and again. We have seen the Home Builders offer incentive plans to help consumers. Is that just an exercise in things getting so expensive because of the higher Mortgage Rates . Well, thats what were currently dealing with and offering incentives nothing new for the company. What we have been able to do and it worked out to be quite a competitive advantage for us is redirected the incentives were offering toward things that matter most to the con sierm ri consumer. We offered counter totop upgrad but now we offer mortgage programs which offers a 30year fi fixed mortgage at 5. 75 . In an environment where affordability is challenged, we have unique tools to solve that for the consumer. Ryan, i wanted to talk about those Mortgage Rate buyd downs which the builders are doing. How much does that eat into the margins next year . You have lower costs this year with lumber which offset and allows you to do the buy downs. As we go forward and rates over 8 where they he were hovering below 7. 5 , how does that eat into the bottom line . It is a great question. What we have been able to do for really the last 12 months is offer incentives that have been directed at buying that Mortgage Rate down. Those incentives have been and are embedded into the Gross Margins we have been delivering as well as into the gross margin guide that we provided for the balance of the year. It is really embedded in the margins we reported. We continue to have industry leading Gross Margins with this recent quarter being an example. We reported 29. 5 gross margin. The incentives and rate we offered, as i mentioned, is 5. 75 on a 30year fixed which is incorporated in the margin guide. We feel pretty good about our ability to continue to deliver profitability and solving an sc afford affordability. We are hearing on the ground there are more cash buyers out tl there. New homes are more expensive than existing homes. You are right. When you get into the Consumer Group that is over the age of 55, we see that number jump to almost 50 of buyers pay cash. Ryan, very quickly. Talking through the issues. Do you see consumers foregoing the fancy additions they may have taken on a calouple of yea ago . Do they put things off and say ill get into the home and worry about fixing it up later . When were in this environment, we see exactly that. We see lot premiums and specific lots that consumers might want or tradeoff there or countertops or cabinets. We are seeing consumers choose smaller floor plans. They may forego a few hundred square feet in a particular floor plan to solve the affordability pinch they might have. Finally, when you are looking at higher credit costs, what does that mean for your growth . Is it tougher for you to expand or are you planning to expand at the same rate you have been . We are in a fantastic position. We have 2 billion in cash on the Balance Sheet and effectively net debt zero. We are in a position to continue to grow. Diane, i want to thank you very much and ryan, thank you. We will continue to follow this closely. Thank you. Coming up, more reaction to the big reports so far and still to come we hear from cocacola and verizon within the next hour. Reminder, you can watch or listen to us live any time on the cnbc app. What do you see on the horizon . Uncertainty . Or opportunity. Whatever you see, at pgim we can help you rise to the challenges of today, when active investing and disciplined Risk Management are needed most. Drawing on deep expertise across the worlds public and private markets in pursuit of longterm returns. Pgim. Our investments shape tomorrow today. 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. With cirkul, your water is deliciously flavored at the turn of a dial, with zero sugar and zero calories. And cirkul has over 40 flavors, so your water can be as unique as you are. Try cirkul. Your water, your way. Now with even more flavors. Available at walmart or drinkcirkul. Com. Welcome back to squawk box. We have wall Street Investors speaking at the davos in the desert conference. Here is jamie dimon. I look at the financial situation and fiscal spending. Im talking about the United States, but it is true around the world, it is more than it has ever been in peace time. The highest debt levels by the governments and im feeling the Central Banks and governments will manage through all this stuff. Im cautious. I dont know it makes a difference whether rates go up. 25 points. Whether the curve goes up 100 points. Be prepared for it. I dont know if it will happen. I look at what we are seeing more like the 70s with a lot of spending and a lot wasted. Meanwhile, David Solomon in saudi arabia this morning and this is what he had to say. I think, david, this is a function of confidence. I say there is great uncertainty. People try to frame things and you asked the question clearly. Are you optimistic or pessimistic . Long term im optimistic, by im cautious. If you are a ceo, you are cautious. We will be taking shots from saudi throughout the next several days. A number of big american executives and others from around the world have gone to saudi. Interesting time to be there. Hopefully we will have more to report as it progresses. Back to some of the earnings so far. Joining us now is the earnings scout cofounder nick. From what we see so far, nick, are we in a 5 gdp economy or in an economy that is going to be in recession by the end of the year . Which is it . How can we have both . Reasonable people and one person saying one thing and the other saying the other. That is what David Solomon was talking about. Parts of the economy have been rolling, but most of it has not. We are not behaving like were in a 5 economy. If we did go into a 5 economy, that means the fed will keep Interest Rates high are for longer. For the first time in a year we are actually measuring the trends for the s p 500 weaken, and the market has been sniffing that out since august 1st. You have heard big tech is the new defensive place to be . It has been. And looking at earning trends and all of the magnificent seven, ai is booming and thats done very well, but other parts of the economy is starting to take a hit, and particularly the rise in the commodities since may, and the spike in rates is definitely starting to wear on the earnings and we are seeing in the early reporters. What groups will miss or have down beat outlooks . One will be the energy sector, and thats in the crosshairs of what the fed is trying to do. I dont know how we are going to have a bull market and have Energy Prices soaring. The tech and Communication Services should continue to do well, and i know the yield curve is uninverting which should help them a little bit. What about anything housing related . We just had pulte on, and they managed to beat expectations in this quarter, or anything home relayed, home depot, lowes, cyclical type . Yeah, of all the early reporters that have come in, and by the opening bell there will be 117 s p 500 companies that have reported, and the best revisions have come from lamar, and the stock is down 21 over the last three months , and the reason is in the prior quarter the estimates were going up a rate of 30 , so the positive momentum is slowing as the rise in Interest Rates take a hit on the homebuilders. We just said you have a burkin bag . Do you know what one is . I do, and i dont have one. I dont know what a burkin bag is. Well, they are hot. If inflation is bad, then the dollar what is going on retails it bar bell . Its a strange year where the s p is up 10 . Within consumer, its certainly to describe the market haves and have nots is the best way i can do it. Does that indicate they are rolling over at this point . Rich people are different. They have money. They never really theres always going to be, you know, yacht sales. What are we really seeing right now . Are consumers stand or not . Even if rich people can spend, its all about the delta. It will be up to the delta how the wealthy spend their money and if that takes a little hit, if they trade down, you can see the highend goods in a recession will be the first to take the hits, and it will be hard to believe that we can go through a period of 500 basis points rise and still be unskated. Its the highest date on record, and what is it telling us . What does it mean in terms of people potentially not being able to keep up, not being able to keep up with things. Back in 2008, i think people were handing over their house keys rather than their car keys because you need your car to get to your job . This is the lagged impacts of the rate hikes, and it will start to take a toll on those with weaker Balance Sheets whether its on the personal side or corporate side. Thats the risk we have with inflation staying elevated and low growth is we have a credit event or see delinquencies rise. The level of Interest Rates is the most important variable that impacts peoples pocket books and corporate earnings . Yeah, people paying Student Loans again. I thought all this was supposed to have an affect . Thank you for scouting everything out. You are one of the co founders, right . Who came up with that . John cooper from ohio state helped me to come up with the name. From the ohio state university. Yeah, he said you scout the earnings like we scout for the big teams. Is that what you came from . Yeah, came from that. You should have just said it was me. I cant take credit. Thank you. Cocacola with revenue topping estimates, and we will bring yocoenu mmts from cocacolas ceo. That will happen at the top of the hour. Let newage products transform your garage into an area of your home you can be proud of. Modular steel cabinets let you pick and choose the Storage Solutions to keep your garage organized, with overhead racks and shelving, slat wall, workstations and flooring that let you create a showroom garage to call your own. Designed for diy installation. All you need is one weekend to take your garage from unusable to unbelievable. Visit us at newageproducts. Com. Good morning. Markets on earnings alert. 3m, cocacola and ge reporting. And gm reporting results as well, and its withdrawing its guidance for the rest of the year. The automaker cfo will join us first here on cnbc. And bitcoin blitz. The second hour of squawk box begins right now. Good morning and welcome back to squawk box here on cnbc. We are live. The s p up about 22, and the dow up about 146. Lets show you the 10year and the 2year, and with a we will talk about some of the bill ackman comments. Bitcoin, 34,000 on the back of speculation, and lets just call it that. I dont know if its more than that. I dont know. Some day. We dont know what the move is really about. Maybe then what . Thats the question. Back to 26 . I dont know what happens. Cocacola just releasing results, and heres the details . It was a beat. 11 organic revenue growth, and that will come as good news for investors and analysts, and they were expecting 7 of the organic revenue growth. The story continues to be pricing. But another surprise and what separates coke from the food and Beverage Companies is its on the back of the volume growth as well, and the mixed growth was 2 . The higher prices make it hard for consumers to afford food and beverages. Heres another headline. Coke is a company that does most of its business outside of the u. S. , and its impacted by the strong dollar. That will take a bigger chunk out of sales and earnings, and it will be a 4 hit on revenues and 8 hit, and there is a sign of confidence in the top line of growth, and james quincy said they saw growth in most parts of the world, and india led the growth and latin america came in also strong. And china is now bouncing back, and obviously they dont get the Pricing Power there as well because of the lack of inflation in that market. As far as the u. S. , inflation in the u. S. Is clearly moderating. What we saw in this market in north america was zero growth in north america, and he said it should be coming down. Certain parts of the consumer, you are seeing pressure, the lowincome consumer, something he and other ceos are talking about, and they continue to see strength in the middle and highend income consumer. You know i had to ask about the impact of the obesity drugs, and this is a sector of all consumer stables that have been hammered, and what does the sales mean for cocacola. He said theres a lot of high poth asis. You can eat less calories, but you cant drink less liquid. He feels like they have been transitioning to things like coke zero sugar and bottled water, and he feels relatively insulated and protected from any mass issues. We will talk about this with james quincy at 10 00 a. M. With squat we are trying to think this through, you can eat less fluids but cant drink less lickid. I have always like you transitioned . Yes. I lost enough weight where i can splurging on a 12ounce regular people have zerocalorie drinks anyway. If you read a lot of literature, the margin on sparkling water is lower than most of the other drinks and its a much more competitive environment. Water and sparkling water a lot of that is not great either, just take my word for it. The sparkling water is not good for your teeth your esophagus, and your were projecting. Heres a stat i found interesting. In big markets like the uk, about half of cokes brand coke is diet coke and zero coke sugar, and they are already transitioning. And diet coke is having a comeback, apparently on tiktok and instagram. The kids discovered diet coke. It has a after taste. You have tried the y 2,000, the ai coke. Its good, actually. Theres a pill for everything. I can take a pill to not be fat, and a pill for hair. Theres a pill for everything. Verizon, the dow component pay p people are going to think that. And for verizon, the company did raise guidance to 455 to 485, and the streets are raising guidance. What i will say about verizon, 8. 47 is the yield. Anything that gives you faith they will be able to continue to service to cover that, and to have dividends covered then maybe you buy it, and maybe you buy it because you think its ridiculously high and you keep the dividend where it is. Look at the stock over a long period of time, and it has halved in value. Yeah, like tmobile. Yeah, thats only yeah, thats good. We are all the way down to 32 from 60. And at t is similar, not with tmobile well, they have a lot. Yeah. Lets get over to dom chu. He has a look at this mornings premarket movers. What are you watching . Its earnings, and i will try and make it a dow trifecta. Thats where we are going to focus on morning movers. 3 00 a. M. Out earlier this morning, the shares up right now, 3,000 shares of premarket trading volume. And then consumer wise from scotch tape to postit notes to ace bandages, it raised its full year profit forecast, and 3m had efforts to control the cost. On the industrial front, we have shares of General Electric which are surging. They are off the premarket highs. Up around 35,000 shares of volume. This is a fully split up contkpwhraupl runt. Ge also said its on track to spin off the power business in the spring of 2024, which would leave the aerospace side of things, and ge shares up 5 . And pulte group, lower by maybe a percent or so. Its jumping around. Maybe up now half a percent. It reported forecast revenues, and they said new homes increased by 43 . People are ordering homes, becky. Back over to you. You do down grades, right, dom . Upgrades and down grades. Any down grades on the 49ers . I knew you were going to go there so i prepared for this. I had to they lost last week, too. Yeah, we did lose last week. I am still faithful to the bay. Heres what i would say. I still have faith. Everybody still has faith. Injuries taking their toll on everybody in the nfl right now, but with samuel out, and brock purdy had a bit of a mean conversion is he married . I dont know. If taylor swift decides that may help. Kelce has turned into the beasts of all beasts. There was a graphic on the game and it showed kelce, and it showed all the yards that kelce gets when taylor swift is in attendance, and its more than double when he is left to his own devices. Yeah. I had the vikings last night. I dont know why, because everybody was so sure that San Francisco would not lose two in a row. Buy low, sell high. They are begging me they are begging me, and im not talking. Im done. Bye, dom. And then a lot of volatility when it comes to treasury, and thats rattling the equities markets and more beyond that, more ripples going on. We wanted to bring in beth hamut. Beth, lets talk through what this all means. Before we get into the rates, lets talk about what you think is coming. You had bill ackman saying you look at the different measurements, and you look at the auto borrowers past due. The fed have taken rates up significantly, and we are in a restrictive territory, and the fed speak is saying they are around where they need to be, maybe one more hike or maybe we are done, somewhere around there. And part of what you heard in that fed speak is the higher Interest Rates in the back end will substitute for more of the hikes that they need to do on the end of the marketplace. Higher for longer, do we believe that . If they rollover and keep rates high, what does that mean . Will the economy keep holding up . Still reasonably elevated. The Unemployment Rate is still below 4 , and thats a full employment type of picture you are looking at. Broadly, the consumer looks healthy. You are seeing weakness at the bottom end, and the picture looks overall pretty good. Our view is we are going to stay in a Pretty Healthy market through most of 2024 and the fed wont need to cut rates until the end of 2024 and only slightly. If you think about rates in a broader historical context, this period where money was free, people grew up and think thats the norm, and i grew up in the 90s, and so i think this could be the new normal on the forward. Its the new normal and it feels normal to a lot of us, but if you have built a Business Model or if you are a consumer and you built your life around the lower Interest Rates, its going to be a rude awakening. Thats the transition we are going through, gone through a period of free money, and then you look at the markets like the leverage finance market, thats a place where you are feeling the affect of the Interest Rates moving up. If you look at the types of transactions that could have been done in 20 or 21, now what the market is focusing on is leverage, and you are looking at leverage five times below because its shifting. If you go back to 2006 or the 90s, you still had a very healthy mna calendar, just in a different frame. What kind of chilling impact does it have . You can get the deal done, but its not going to have the same structure, and its not going to be as profitable or lucrative . I dont think its less profitable, but it changes the types of profits you are looking at, and you are seeing strategic rather than sponsored mna. What about the high yield debt market . How is that fairing now . Fairing well, and its a bit choppier. You are seeing focus on the Underlying Companies and the Underlying Health of companies, and a lot more selection between the groups coming. It has been robust, and theres a lot of cash that still wants to get put to work. If you are looking at davos in the desert, and we have heard people talk about how its a riskier environment and they are concerned about things. You have been doing this a while. When you look at it, do you have those concerns . I feel comfortable about it right now. I think the adjustment period is hard to work through but think we are about through it. We have good expectations in 2024, and corporations need to be investigating in their business. Thank you. Coming up, when we return, gm with their results. The automakers cfo joins us this morning. , colorado. We just got an order from dinosaur, colorado. Start an easy to build, powerful website for free with a partner that always puts you first. Start for free at godaddy. Com told you about gms earnings last four, and we are joined with a special guest. Hello, phil. Yeah, lets bring in Paul Jacobson. Dont mean to be rude here but i dont think anybody is focused on the Third Quarter and you had a great thursquarter, but where things stand right now in terms of the strike . Good morning, phil. Thanks for having us. First, i wanted to say thanks to the entire team for a terrific quarter, again. Lots of uncertainty and lots of things going on but the Team Continues to execute based on the vehicles we are producing and the Strong Customer demand we see out there. We made the decision to pull the guidance mainly because of the uncertainty around the strike. We didnt want to speculate where the next plant might be hit or how long it might last and the best thing to do for investors was withdraw that guidance. The business was performing at the top end of the range and we felt that was the right thing to do in the short time remaining in the year. You offered cost of living adjustments and pay increases and a lot of things you believed would get the ball past the goal line, and shawn fain said arlington is on notice. If you are an investor out there right now, what do you tell an investor . People are looking at this and saying, the uaw continues to come back and say, nope, not good enough . We are focused and the team in the room at the negotiation table is focused on getting to a good deal for our people and continuing to pay them at the highest rates in the world and getting them back to work. Thats the primary objective for us and its the best thing for our team as well. Theres uncertainty out there. We are doing our best to manage through it and the team has executed well, but the answer to try and get everybody back to work as quickly as possible and thats what we are committed to do. Three weeks ago i think it was two weeks ago, 2 1 2 weeks ago, shawn fain came out and said we are going to strike and we are targeting the arlington plant, and gm came and said the battery facilities, the ones up and running we have not heard a clarification. Are you as a company committing to the uaw to staffing your ev battery plants . Ultimately thats the choice of the employees and the employees have made that choice that are represented by the uaw and the team is negotiating that agreement with the members, as they should. We have been consistent throughout this transformation and we want to bring everybody along and make sure we transform at a pace that allows us to bring them along with us as well, and we are committed to doing that. Negotiations get complicated at the table and i would rather leave those in the room, and we are doing our best to meet the uaw where they are asking and where we are able to do that. Speaking of evs, you guys delayed and are pushing out your production at the plant in michigan, and thats going to save you about 1. 5 billion. How much of this is because you are going to face a different cost profile and how much of it is because you are looking at the ev market and saying the growth is slowing down. Clearly we are not going to see the growth we expected . I would say, phil, we are obviously watching the dynamics of the market and where the ev adoption is, and the rate has slowed but it is still growing, and we are up 2 x in 3q versus where they were in 2q. We will still have truck production at our factory zero plant. This is going to be the next phase of growth. We thought we have got a year to take advantage of learnings that we have seen through the engineering process that will make those vehicles more profitable for us and help us achieve our goals of getting the low to mid single margins by 2025. It will push about a billion and a half with cap 2024. Theres a piece today actually, the stepping off point was the big merger yesterday in the oil patch, and its an interesting use of words that chevron is betting on peak green energy. You know how long we have been talking about peak oil, like, 30 years or whatever, and it has not happened. One of the points that the oped writer makes is the offshore wind projects are being scrapped and not expected to be profitable, and ford and gm are putting their ev plants on neutral, and is the whole thing being rethought . Does it need to be rethought . Well, joe, first of all, you know, when we say we can get to the low and mid single digit margins in 2025, thats prior to any ra benefits across the board, and we are targeting vehicle profitability, and the ira will not always be there, and thats what we are aiming for and a lot of the engineering improvements we have are strong. As to the adoption of the peak green energy, what i would say is ev transformation and ev adoption will be a choppy run for the next decade and more, and thats why gm has such a strong hand when you look at our strong ice portfolio and the Customer Preference we have in the ice vehicles, and they will be here for a while as we continue to produce those. Thats the life blood of funding the innovation going into the evs to help get the range and functionality that we know the customers will love. Paul, its phil again. Your vehicles have not taken a hit since the strike began, but the Distribution Centers where the strike has been going for a couple weeks at least, and are your dealers starting to notice they are not getting the parts they need, and they are telling customers you have to come back when the strike is over because we dont have the part you are looking for . Yeah, so phil, that is a great point. For the first few weeks of the strike we had inventory we had on hand and were able to get to our customers, and its getting tighter. Thats the unfortunate thing about this, when you are trying to strike, the reputational damage there, thats not good for the customers. We are working collaboratively with our dealers to make sure we are getting out the most urgent parts as quickly as possible. Paul jacobson, cfo for gm. Thank you for joining us. Back to you. Thank you. When we come back, netflix. Is it possible to fall in love with your home. Before you even step inside . Discover the Magnolia Home james hardie collection. Available now in siding colors, styles and textures. Curated by joanna gaines. Welcome back to squawk box. Netflix putting together a dream team for streaming. Wall street journal reporting that lebron james and the obama kwobamas will put together something. That will be interesting. I saw it when it premiered. Excellent. Might get a nomination, i think i have to check with my son. With the expert. Right. A vote for the house on which candidate is emerging as the frontrunner. This is like i mean, get out the clown car. We will look at what is go on in washington, next. That discussion and more coming up in the next half hour of squawk box. The first time you connected your godaddy website and your store was also the first time you realized. Well, we can do anything. Cheesecake cookies . The chookie manage all your sales from one place with a partner that always puts you first. we did it start today at godaddy. Com you know when you have those moments . That time to reflect. To be like wow. What did i do to get here . city ambient noise right. Work. You worked hard and its time for a bank thatll work hard for you. Everbank brings security and a guarantee. That youll earn a yield in the top 5 of competitive accounts. Going, got you where you want to be. Were the partners for your next move. Everbank. Advantage, you welcome back to squawk box. Take a look at the futures. We do have some green on the screen, and we have earnings reports this morning and a whole bunch of things taking place. Right now the dow up about 150 points, and take a look at treasuries. We will then flip the board around and show you bitcoin. The twoyear sitting at just about five. Bitcoin, the biggest mover of the morning in a bit of a big way. 34,684. 30. This was sitting at 28,000 in the last week and a half. Yeah. It looked like an auction. Do i have 28,000 . Do i have 30,000 . Gone. 34,000, and basically moved up 5,000. Crazy. Check out the shares mof rt. It was boosted by a broader recovery in the commercial air traffic and higher defense spending from the United States and its allies. They have approved a 10 Share Buyback program. That stock, check it out, up by 6. 24 this morning. Now is there going to be a vote on a speaker or a secret vote on who the next vote for speaker will be . Thats what we are expecting, joe. We are expecting members to go behind closed doors and duty secret ballot, and they are going to keep voting until somebody gets a majority of the house conference, and that could take a while. Members said this could go through a couple different rounds, and every round the person with the lowest number of votes drops off. Right now you have tom emer, and currently hes the majority whip and has won elections before and has mccarthys backing, and then plus you have folks like mike johnston, kevin hearn, and you have seen folks support them as well. Its going to be pretty competitive today. Nobody i spoke to expect this to be solved on the first round of secret balloting. This could go on for a couple hours. I will tell you, julie, when i hear emily say he has Kevin Mccarthys backing, and i made this point that they are, like, talking about the leader of the party about who he wants to be the leader of the party. And theres a journal piece that says its time for gaetz to reinstate Kevin Mccarthy. He got 209. None of these guys have gotten close to 209. Nobody has gotten close to 96 . Couldnt you get four of the crazy eight to just reinstall if you could get four of them, couldnt mccarthy be speaker again . I think it would be difficult for Kevin Mccarthy at this point, and how things went down with steve scalise, and some of the sympathy he had after the motion to vacate kind of dwindled a little bit, and then who . Emer . He seems like a solid guy. You have freedom here, and you have people elected in biden districts here. Thats why you cant get anything close to 217. I have had a few members joke with me that even if jesus came down he could not get 217 at this point. Theres frustration what about elvis . Possible. The caucus is pushing for d donalds. How many terms has he had . Its his second term. I love him. I love him, but, i dont know, does he have enough supporters . I mean, that kind of it will be seen later. Right now i would say from talking to most members, he is the frontrunner and if he wants the nomination, hes got an edge there. Some Trump Supporters are pushing back on him and its unclear if he can get the 217 on the floor. Could emer get it . Minnesota, they are low stress, sort of breadbasket . He was the interim cc chair, and that didnt pan out for him because republicans didnt get as many wins as they thought. At this point, i think the sense is republicans have to unite around somebody, and until theres a nominee you are not going to know where the opposition lies. Some said we could support all remaining eight candidates, and then there are one or twos some are concerned with. Once you get the nominee, probably today, how long are they going to have to get to 217. Steve scalise never came to the floor. We saw jim jordan have three different votes where he failed on all of them and then gave it up, and how is the nominee going to use the combination of closed door meetings and floor time to get there, and thats what members spoke to me about last night, how to manipulate that and get enough support and the time to get enough support. So patrick nobody is talking about well, if they dont get a speaker this week or next week, we will inch closer to a government shutdown, and if that resurrects anything, that is to be seen. They are in a pickle right now. They are at a halt. Theres a package for israel that both sides want to get through. They voted to certify the election to get things moving again. No, they love this. If its not donalds or emer, give me a third name in your view . Mike johnson, was the vice chair of the conference and a former Republican Study Committee chair is the third in line right there. I think i talked to a lot of members that have reservations about having the top and number two member of leadership both from louisiana. He has a hurdle to get over right now. We will see how it pans out because conservatives are a big fan of him. If i give you the 1 to 10 odds, do you have a long shot . I think i will put gary palmer out there. Hes a member of leadership, and hes the policy chair and within mcca mccarthys inner circle, but is not somebody that has stood out, and hes a policy guy and he has flown under the radar but has proven he can get the support from the majority of the conference. You are totally in the weeds to know all that stuff. And we appreciate it. This is stuff we need to know. I am going home to watch it. We are getting back into the weeds today. Great. Thank you both. Thank you so much. When we come back, we will check in with alina croft joining us from the desert. Volume. The competition of deals is likely to change over the next 12 months. The assets in the market are healthy but under invested. Why now . What is going to drive that uptick . There really has been a recognition that they are a tool and not a failure. You can outperform the market by roughly 6 over a twoyear period. What should ceos do now to prepare for later . One, do they understand the buyer needs in driving growth . Two, can they customize the investment story to address those needs. Three, are they prepared to execute against the operational complexities to dealing with doling concern as of day one . When they answer those questions, we are there to fill in the gaps. Thank you so much for your insights. Thank you so much. Coming up, the power behind ai. Its growing every day. Now some in the tech world want to set up guardrails so ai is set up safely, and how would that work or is it too late . Thats our debate and discussion after the break. Check out the shares of the stocks releasing Quarterly Results this morning. We will have more on all three of these. Dont go anywhere. Squawk box is coming right back. I think im ready for this. Heck ya with e trade youre ready for anything. Marriage. Kids. College. Kids moving back in after college. Heres to getting financially ready for anything and heres to being single and ready to mingle. Whos ready to chacha . cmon, were right there. Cmon baby. Its the only we need. Go, go, go, go ah touchdown baby touchdown are your neighbors watching the same game . Yeah, my 5g Home Internet delays the game a bit. But you get used to it. Try these. Theyre noise cancelling earmuffs. I stole them from an airport. Its always something with you, man. Great solid greek salad . Exactly dont delay the game with verizon or tmobile 5g Home Internet. Catch it on the xfinity 10g network. Welcome back to squawk box. Our next guest is calling for the ration of an International Safety panel to develop ai. Now cofounder and ceo of inflexion ai, and his latest book is called the coming wave, and i want to say hes one of the great thinkers on this very issue. The question that i cant figure out is at a time when from a government perspective, at least here in the United States, nobody can get their act together. Theres no speaker of the house. We have been talking about how to regulate social media for a decade. Never happened. How is it possible that we are going to have some kind of International Committee that will agree on anything when it comes to ai . Look, this is a very modest baby step, right . What we are trying to propose is to break out the various different functions that you might have in a regulator. Instead of including the policymaking component or including the audit function that would be required to verify the state of current capabilities of a Technology Inside of a company, we are simply proposing the International Panel on Artificial Intelligence safety modeled on the icc would focus on establishing the Scientific Consensus about where capabilities are at and where they might be going. The challenge we have at the moment is a lot of policymakers dont have the information to make sensible regulations and so theres a sense of a kneejerk overreaction where folks think we are on the cusp of some big threat, which i dont think ala panicked. And, in fact, what we need is an independent body that can provide very straightforward, scientific expertled, impartial assertions about where Ai Technologies are at today and where theyre headed. Mustafa, how much of this, though, is going to require the sharing of data and information and really the cooperation, i mean, the demonstrable cooperation of the ai companies, and maybe even beyond that, to Hardware Companies and other Software Companies that are interrelated. And i ask, because as you know, when it comes to social media, for example, there has not been the kind of transparency that might be required to actually understand fully the impacts of all of these technologies on us as a society, on our psyche. I mean, the amount of information that a tiktok or a facebook has on sort of how we interact with this stuff, i think, is beyond what most people even understand. No, thats a very fair question. And i certainly think that over time, if you want to verify the state of capabilities and Different Companies and do audit, then, of course, you would need access to proprietary internal information that would include software, that would include training data, arguably, it might even include the model weights, which is the sort of infrastructure for actually training these big, Large Language Models. My company inflection ai would be very happy to support that. Several other Companies Across the industry have said that they would be happy to support it, as well. So lthere is a ground swell of Energy Emerging here for, you know, proactive cooperation. I think many of the Big Tech Companies are learning the lessons from social media, where everyone, i think, in hindsight can agree that there probably wasnt enough transparency, that the companies moved too late, and were insufficiently responsive on some obvious, you k know, concerns, that everybody can see, for example, with the rise of anorexia or bullying on platforms like instagram, which was selfevident to parents and communities for a long time before there was any appropriate intervention. This time around, were saying, and other companies are saying, too, that this is a great opportunity to try to get ahead of that. And doesnt actually require particularly onerous interventions. Like, were really only talking about the very largest Tech Companies in the world, were not talking about small, Mediumsized Enterprises that are using ai, apis, to try to improve their business on daytoday business. Were talking about the frontier labs, you know, myself included, an anthropic, open ai, google, microsoft. Because today, the open Source Movement is on fire. Its one of the most creative and exciting times in silicon valley. People are building and making like never before. And i think thats going to continue. I apologize for interrupting, but is the idea, and where do you stand, maybe, to ask the question, on open ai excuse me, open ai im sorry, open source ai as opposed to the closed source ai that the Large Language Models and frontier models, effectively, that you and the others you just mentioned, are pursuing. I think right now, the question is about scale. The very largest models are only built by the Big Tech Companies and at the moment, we dont see those really, really large ai models in the open source community. If they were in open source, then the same questions would apply. I mean, clearly, we dont want to make it easier for somebody using one of these open source Large Language Models to be able to manufacture a chemical or biological weapon. Or to get training in how to create a bomb or a nuclear weapon. This is a nobrainer. These things are already illegal. Everybody would agree that that would be bad for everybody in the world. So, you know, i think lstheres very basic set of facts that everybody can get their head around here with respect to open source. Were not at that point in open source today. But put the but to the extent theres urgency to this, whats the scariest thing you think that ai can do right this moment . I dont think were at the stage where there is something that we need to really worry about today. So i think what we are calling out is that over the last three years, weve seen these models go from completely incapable of generating a sentence that makes sense to being able to create poetry and, you know, invent incredibly useful long, drawn out pieces of text that are of humanlevel performance. So what were all predicting is if this continues, and they become increasingly multimodal, so they can take images, audio, text, and other time series data, to be able to understand that information to make new predictions at humanlevel performance, over the next three, six, nine years, we will see some very, very powerful ai systems in the world, and that warrants a slightly different approach. Policy makers need access to the information. Mustafa, i want to thank you. It is a longer conversation and i know well continue it with you very soon in the future. Thanks again. Good to see you, thanks, andrew, bye. The world is very small, but on the other side of the world, china state media is reporting that beijing has replaced defense minister lee shangfu. Who is li shangfu . I dont know, but he was an important conversation. And as sometimes happens in that country, he hasnt been seen. Hes been out of public view for almost two months with no explanation. Hes the second senior chinese official to be replaced this year, after not being seen in public for an extended period. The countrys foreign minister was replaced in july. Its just unsettling, the defense minister, with whats going on in the South China Sea and taiwan and just everything else. We have another big hour coming up ahead. Steve jobs sand elon musk, ive heard of both of those guys, and the biographer Walter Isaacson will join us looking at some of the challenges in china. And larry hogan for his decision to resign from two harvard fellowships teafr the u. S. attack to the ishamas attacks on israel. Well be right back. 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Ameritrade is now part of schwab. Bringing you an elevated experience, tailormade for trader minds. Go deeper with thinkorswim our awardwining trading platforms. Unlock support from the schwab trade desk, our team of passionate traders who live and breathe trading. And sharpen your skills with an immersive Online Education crafted just for traders. All so you can trade brilliantly. Good morning. The busiest week of earnings gets busy. New reports out this morning from General Motors, General Electric, verizon, and more. Stock futures have moved up. And a crypto surge as we speak. Bitcoin shooting higher, hopes around an approval of a new etf product in focus. But well seewhether theres any reality in this. And what is the role of University Administrators when victor allen speech comes to campus. Well speak with larry hogan on this topic and more a day after he took himself out of contention for two harvard fellowships after that he says is antisemitism in cambridge. The final hour of squawk box begins right now. Good morning and welcome 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, along with our studio audience. U. S. Equity futures at this hour are indicated up a little bit. We havent seen much green recently, but once the bonds, the yields backed off yesterday, we saw a quick turnaround, and its continuing this morning. And weve got earnings to report, and that is obviously, verizons out, other dow components are reporting. And so far, so good. Up about 145 points. Lets look at the tenyear, which we began to show you yesterday, was about 505. By the end of the session yesterday, it was like 48. And kind of weird, the way it happened. But the markets took it positively. The equity markets, anyway. And then, we actually had one of the commissioners on, one of the republican commissioners about bitcoin yesterday. She said she couldnt understand why it was taking so long and it was illogical to get an etf. Do you think thats you werent thats what i heard. I heard something else. I heard, its illogical, but my colleagues who actually run the sec, by the way, dont have a different view and havent shifted at all. Thats what i heard, too. Its illogical, but theyve been in that illogical position for a long time, is what i heard. Ill go with the market, the message of the markets. And its up almost 11 . It went through 29,000, 31,000, 32,000, 33, now 34,500. Its doubled for the year. I thought your comment earlier was interesting, if this is the rumor, what happens on the news if it actually happens. Exactly. But it has been understand every three months we see this, a monster week of earnings, it seems like clock work. Uncanny. Dom chu joins us with the highlights. Good morning. I am still a 49ers fan, just like youre still a bengals fans. Lots of earnings movers out this morning so far, as we head into the heart of the busiest reporting work of the season. Three dow components on the move this morning, so far premarket. Were talking about shares of 3m, which were up almost 4 . Just around 35,000 shares of volume. The industrial conglomerate behind big brands like postit notes, scotch tape, ace bandages raised its fullyear profit guidance. 3m helped along by better cost control and operating efficiency initiatives. So those showers powering the dow futures higher. And another dow component in verizon, Telecom Giant higher by just around 4 or so right now, just around 220,000 shares of volume. It posted better than expected profits and revenues, thanks in part to new subscriber editions for its wireless business. Verizon also raised its fullyear profit forecast for free clothes and everything else. Thats helping to drive some of that added confidence that the company will be able to maintain its relatively larger dividend payouts. Those shares up nearly 4 . Well end with dow component, cocacola, which is higher by north of 2 right now. Just around 190,000 shares of volume. This offering giant also reporting better than expected top and bottom line results, thanks in part to its ability to maintain Pricing Power through its brand portfolio. It, too, raised its guidance. And by the way, coke, james quincey, will join squawk later in the 10 00 a. M. Hour. And one bonus mover. In rtx, that defense in Aerospace Giant up 8 right now on about a quarter million shares of volume. This is the. Cash buyback program. Rtx Ceo Greg Hayes on squawk on the street in the next hour as well, in a cnbc exclusive interview, so becky, joe, andrew, lots of earnings, lots of ceo interviews coming up on cnbc. Ill send things back over to you. You better not take off. Weve got a lot of work for you, dom. For the rest of the week, becky. Saudi arabias annual future Investment Initiative is underway. Its aim is to bring together top executives from around the world to focus on new investments in the middle east. But this year, the israel hamas war is overshadowing the economic developments that the conference had hoped to highlight. The new conflict in the middle east also putting renewed focus on Energy Prices. This morning, you see wti up another 33 cents to 85. 83 a barrel. Joining us right now from the fii conference in saudi arabia is halea macroft, also a cnbc contributor, and what is the mood there, thahalina . Is there a noticeable pall over whats been happening . Whats fascinating is even though we have this war raging in the middle east, you still have all of these ceos on stage in riyadh, they have come. And i think that speaks to the importance of the Saudi Arabian southern wealth fund for their future plans. And again, it is a concern in the air about this war, but these executives have decided that its too big an opportunity to pass up. You know, theres the opportunity of what their future business is. We had a lot of people who came on in the last week or so and said that it was important for them to continue to go to try to keep dialogue open with saudi arabia, especially in consideration with what happens with the saudi arabia israel deal. Has there been much talk about that, that youve seen publicly . I mean, i think theres been a lot of conversation in the corridors about the Important Role that saudi arabia will have to play in trying to find a resolution to this crisis. And also, what potentially comes after this crisis, in terms of, you know, how do you think about gaza Going Forward, and so i do think that saudi arabia is seen as having an essential role in trying to provide some type of offramp and mediation efforts to try to bring a diplomatic solution to this crisis. Helima, to put a fine point on this, because i think theres a perception in the public that ceos go to saudi to have this open communication and this dialogue and the like, but the truth is most of the people at this event are on the payroll of the saudi government, which is to say the saudi government, mbs is their client. This is their client. If the various private equity funds that are there, saudi arabia is their limited partner. And so their reason for being there is, you know, they may very well want to have an open dialogue, but that open dialogue is, theres money behind that open dialogue, right . Andrew, i think, of course, look, as you said, j. P. More indj. P. Moregan is here, Goldman Sachs is here, blackrock is here. Saudi arabia is increasingly becoming an important Business Partner for these corporations. The pif is looked on as a very important partner. I mean many places have retrenched in terms of hiring, but they continue to hire for their middle eastern offices. So again, i think they are here because they see a tremendous Business Opportunity to be here, and even though there is this backdrop of this conflict, they still feel its very important to show up. But again, that said, i do think, at this moment right now, you talk to people here, you have, you know, representative media here, you have think tank people, University Professors here. I do think its an important moment to try to get a sense of how does this community feel about this crisis. Do they see a potential offramp . For example, do they believe that there is going to be a second front. Will hezbollah become more actively involved in this conflict . What is the role of the u. S. . There are two u. S. Carriers have been deployed to this region. More marines are coming here. So i do think its important to be here. Also to get a sense of, how people who are deploying capital, how are they thinking about the potential escalation in this crisis, or is there an offramp that we could see in the coming weeks . I dont want to im hoping for an offramp, but i want to go the other way, helima, and that would be a worsecase scenario, in how you see that play out. Because, so far, the reaction in most markets has been muted. And most people trace it back to when it would disrupt oil. Because that can affect the entire global economy, it can be over 100 a barrel. What would that look like . Iran is already talking supposedly about ramping up maybe some attacks directly on some of our assets over there. So does it involve iran . Where would the spigot be cut off . How would that happen for oil . Joe, i think this is the most important question, how could this potentially get worse. And i think far too many Market Participants are being very sanguine, saying it will be a gazaonly conflict. But you are absolutely right. We have deployed significant u. S. Military assets to this region. We have had attacks on u. S. Assets in syria, in iraq. We have had missiles fired from the houthis in yemen. While hezbollah have not become fully involved in this conflict, they are firing rockets, and we have not yet had the anticipated Israeli Ground offensive in gaza. We do not know what the reaction of these other iranian proxies will be, but iran is the most important player in this conflict. There has been debate about the role they played october 7th. But the white house has said they are broadly complicit, the provision of money and weapons to hamas. So the question is, will iran ultimately stay out of this conflict . And i think we just do not know how this is going to evolve, but we should all be thinking about is worstcase scenario and we have seen attacks in Energy Assets in this region before. We have seen attacks on tankers, and if iran were to become involved in this war in a meaningful war, i think it would have huge market implications. One more question before we let you go, we have seen two huge deals in the last couple of weeks. We had exxon with its purchase of pioneer, and yesterday, chevron announcing its purchase of hes. Does that tell you that that is the kind of peak green energy moment. Is this telling you that fossil fuels matter for the next 50 years or longer . I think it shows that for these key energy players, they believe that there is a significant future for their product. And they are looking at active diversification of their supplies. I mean, i think the crowned jewel has been guyana, the most important New Discovery of the past decade. And so i think theyre standing on the opposite side that well get peak demand by 2030. Helima croft, appreciate your time. When we come back, well have what i know will be an emotional conversation. Well be speaking with the cofounder of an Israeli Technology company that was acquired by nvidia a couple of years ago, but the conversation im going to have is because this man lost his daughter and her boyfriend in the hamas attacks earlier this month. They were killed. Hes going to share his personal story and how ihes looking at the israeli palestine ties and what happens next. Well have that conversation after the break. All right. Welcome back to squawk box, everybody. The futures this morning have been higher throughout the early morning. You can see right now, the dow futures indicated up by about 126 points. S p futures up by 20. The nasdaq up by 89. This comes after declines yesterday for both the s p and the dow. Yesterday, the nasdaq was up. It broke four days of a losing streak. Our next guest is ia waldman, the cofounder of Mellanox Technologies in 1999, for many years hired israeli and palestinian tech workers. Nvidia bought his company a few years ago for about 7 billion. Earlier this month, tragedy struck his family. His daughter, danielle, and his daughters boyfriend, nome, were killed when Hamas Terrorists attacked the tribe of nova, that Music Festival in israel. He later met with President Biden and joins us now this morning. The chairman of the wallda holdings and the cofounder of Mellanox Technologies. I cant even begin to try to have this conversation. I am so sorry for your loss. Thank you. And im hoping that you can just help our audience and the public understand the emotions of it, for you, and then, also, we can expand that conversation to think about more broadly what should hapt in this moment in the middle east. So why dont we start with how you found out about this, how you learned about it, and i cant even imagine how you feel. So i found i was in indonesia on vacation and completely isolated island and then my son called me and said that he is missing and theres engagements down in the south. I found out shes missing, so i got on a plane. And they enabled me to land here. Although they closed already on sunday. The skies for certain flights. But i was able to land here on sunday night. And then monday morning, i took my car and my cheap and joined, and when we got in there, there was an engagement with terrorists of 7, speaking to 3. And there was specific enga engagement. While we were there, the territory was not clean, and there were still terrorists in the territory. We screwed up, our israel Defense Forces, our intelligence, our Defense Forces didnt do what they should have done. And there were a lot of mistakes what happened is that on saturday, about 1,500 terrorists had penetrated israel. About 20 villages and this Music Festival that was there for peace, love, friendship, and fre freedom, they had conquered the south part of the gaza strip, the gaza around gaza strip villages of israel. They came in and they murdered 2,000 citizens, to come and slaughter, rape, behead, burn, awful things to people that didnt do nothing. I started hearing about this when i went south to look for danielle, i was ready for some of those awful things that had been done. We took a jeep and located the car that was full of bullets from the back of an about three. We had saw a three of kalashnikov shells that they shot them in the back. Then we saw a toyota suv with three palestinian bodies inside, and south of the car, we saw a motorcycle, which we also expected was part of the attack of danielle and her friends, their car. And eyal, i understand one of the ways you found her and tracked her was her apple watch . It was actually her apple phone. They have an sos emergency call when you do a crash. The phone had identified that they went through a crash, they did. The car started driving on the right side, but nome was the driver, the car crashed into the sideways of the road. It was a small road, and thats where we found. The phone dialed emergency numbers, my exwife and me. And thats how i got a gps location of where they were probably killed. Murdered. I know this is so raw and i have to imagine so emotional for you. How do you think about even the broader context of this moment . I know you met with President Biden, i think theres a lot of people watching this morning, business leaders, policy makers who are watching you right now who are trying to think through what the right next steps are in this moment, and a raging, unfortunate, debate about what the right answers are. So theres difference between the short and the longterm. In the shortterm, we must destroy hamas. We must destroy Islamic Jihad, the same as you have done to isis. Those organizations are evil organizations. Theyre fighting the free world, and they should not exist anymore. The citizens of gaza should help us should thank us that were freeing the citizens of gaza from hamas, that have used them. If you remember, hamas that has thrown prk lo palestinians from roofs. Hamas has killed gaza citizens that did not support them. Hamas is using gaza citizens as human shields. So we are now freeing gaza citizens from hamas. These operations is a defense operation. This is not an offensive operation. Israel, we do not want to headquarter any citizens. We do not want to hurt innocent people. Were building humanitarian corridors, where they can get south of gaza city, and were offering them for hours. I have Three Friends that are f16 fighter pilots. Hamas is bombing those corridors. But its been over 11 days that they could have gone south, according to instructions that they have given them. And from now on, were going to destroy anyone associated with them. The Israel Forces have to assure that it blew up or is free of citizens or innocent people. We flattened the territory going down underground, because were looking for this. Our number one priority is bringing back 210 hostages, which are babies, children, women, elder people and men who are taking hostages into gaza. By the way, some of the gaza citizens are holding terrorists. So then to destroy hamas and jihad islam. Remember, were protecting the free world. If we dont do this now, those guys will reach europe, will reach the u. S. And you see what happened in belgium, you see what happened in france. You see what happened in sweden and britain. Were not against islam. Were not against muslims. Eyal, help us with this. Theres an increasing perception around the world that innocent civilians in palestine are being killed in the process and how to think about that and how to do this and separate hamas from those that are innocent. And how you can do that in a strategic and surgical way and can it be done . And if it cant be done, how the public is supposed to think about that. So, first, lets remember that 2000 citizens, gaza citizens came, penetrated israel, killed, butchered, raped, burned Israeli Citizens that have done nothing. So in addition to the 1,500 terrorists, there were more than 2,000 civilians, gazan civilians that came in and did these horrible things. And i think Gaza Civilians still have also lets not forget this, thats number one. Number two, really, were trying to do everything we cannot to hurt civilians. Were trying not to hurt and were helping innocent people. Were giving them humanitarian corridors for hours to go south, to go to the border that we provided them, to go to safe places, not stay where hamas and Islamic Jihad are. So we really are doing a lot of effort to protect the citizens of gaza. We want to help them get free of hamas. I want to talk about the longterm for a second. In the longterm, we need to stop killing each other. Weve been doing this for over 75 years. And i believe we can strive for peace. Ive employed palestinian employees both in the Palestinian Authority in the west bank, i was the first guy to open design services, i made sure we had design services. We had about 25 employees in gaza. Extremely important. Ive also donated and raised 360,000 dollar to build the department in a Field Hospital in gaza. I gave 360,000 to build a Chemotherapy Department for the gazan hospital to help the gazan people and did another initiative for peace with some people, palestinians, that eventually did not continue, because they were stopped by i think their government. But i think for the longterm, we need to find the way to live next to each other in a peaceful manner with two states for the two people. If you remember in 73, we had the yom kippur war. The worst enemy my father was fighting was jiegyptians. We had an awful fight and they took sinai. In 77, four years later, we did peace with our worst enemy at the time. My father thought it was unbelievable that we could do peace with the enemy he fought. I think we will eventually be able to convergence between the two people. The leadership of both sides should be replaced and find the right leadership to work together, shouldertoshoulder, and do whats the best thing for people. The palestinians, i hope, after this operation will come to the conclusion that the best thing for them to strive to peace, which is not done until then and this is the main mission we have. Before we let you go, on a personal level, how are you doing . Im doing okay. My exwife, danielles mother, is doing less okay. She woke me up yesterday and said she dreamed about danielle with a wedding dress, which she will never wear. But, i think shell be okay. And her brother and sister also are going through a very difficult process. Im trying to keep myself busy talking to you guys and other people, trying to do the right thing for israel, also for the palestinians and for the world. And thats what keeps me busy. I would like to take the opportunity to thank President Biden was amazing in the meeting with us. He was very engaged. He knew exactly he said, you dont need to be a jew to be a zionist. He talked about his father, he said, we were not there for you during the holocaust. He said, you should keep the International Rules of war, and i think israel is doing that. And he said we should think the day after, whats going on. And i think its completely right on spot. It is amazing things. We would like to thank the u. S. President and the United States for putting the navy here. I think the u. S. Navy here is not to help us fight hamas or jihad or hezbollah, we can do this ourselves. The purpose of the u. S. Navy is to protect from having a third world war here. To protect the second and thursday lines of yemen, iran, and other entities that are farther away and prevent a possible smaller or largerscale third world war. And this is why we thank the United States, the president of the United States, and the navy. I know our navy has coordinated with the Navy Air Force in terms of what are the missions and what are the things. And i really thank the United States for all the help. Also including helping us with trying to enlist the hostages, which is our number one priority now. Get the hostages home is priority number one for us. Absolutely. Eyal, we want to thank you this morning for sharing your story. We want to wish you well and your family well and hope we have an opportunity to talk to you again very soon. Thank you very much. And i hope well be eventually successful to build pee twn e people. Absolutely. Squawk box returns after this. 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. Upbeat music upbeat music coming up, we have more of the fallout from the israel hamas war with former Maryland Governor larry hogan. He has announced that he is withdrawing from two planned fellowships from harvard of what is dangerous antisemitism on campus. Next, steve josbs and elon musk biographer will join us and focus on sudden uncertainties for apple, including questions about iphone demand and government scrutiny of a key taiwanese partner. Stay tuned, youre watchi ing squawk box. This is cnbc, well be right back. 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. Here in hawaii there is always time. Theres time to spend with family, time to enjoy with friends. Theres always time to listen or lend a helping hand. Here we have all the time in the world, but no time to waste. Welcome back, everybody. Apples exposure to china in the spotlight once again this week. Several ecommerce platforms are offering discounts on the iphone 15, which raises some questions about demand. In addition, iphone assembler foxconn is reportedly facing a tax investigation. Investors are waiting for commentary from the company on its next Earnings Call which comes next week. Ahead of that, we want to bring in Walter Isaacson. Hes the biographer of apple cofounder, steve jobs, and tesla ceo, elon musk. Walter a cnbc contributor. And walter, lets get to it. Lets talk about demand issues first. Is this a concern . What do you think . Absolutely, especially since china seems to be cracking down a bit on the use of iphones, even people who are officials in china, not supposed to use iphones. And i think this is part of a broader problem, which is why tim cook has gone to china i think twice now in the recent months. Because, we are somehow or another barreling down a road of trying to disengage with china economically which is not easy to do. You have luxe share, he visited the luxe share factory. That does everything from the ear buds to the watch. And you have foxconn, the longtime manufacturer there. Most companies are trying to decrease their depends on china, but apple will find that its it will be the hardest for apple to do that. Tim cook and elon musk have both been the examples that people give all the time about people who have been able to walk that tight wire, that they can say, yes, were still american companies, but we are international and were here in china front and center. And theyve been able to do a really good job. Do you think this is the beginning of the end of that ability . If our entire policy in the United States is to barrel down that road, its going to be bad, but you think gena remondo, the commerce secretary have meetings with chinese counterparts. And i think well have to strike some equilibrium between total disengagement, which in my mind is not going to work, or total dependence, which weve been a little bit too dependent on them. Elon musk goes to china because theres a huge tesla factory in shanghai. And the biggest competitor for tesla worldwide, especially when tesla starts making its global inexpensive car, will be the chinese manufacturing byd of electric vehicles. But you think were barreling down that road by pushing back . The United States to this point has kind of agreed to take a lesser role, agreed to say well play by these rules, you play by those rules. Do you think thats too much . I think the rhetoric has been kicked up in the past year, as you know, especially on both sides of the aisle in congress. And so, a lot of Corporate Leaders are saying, how can we minimize our exposure in china . And i think that were going to have to learn to compete. It would be nice if we can do more manufacturing here. Thats one of the things about apple, is that a very little of apple products are manufactured in the United States. For obvious reasons, when you look at cost, but in the end, its going to be better to either onshore jobs or have jobs in countries that are closer to the United States. But thats going to take five years or so, especially when it comes to microchips or foxconn or luxe share that are doing the apple products. I think foxconn has been a big part of the issue, too, though. I think people thought, because of the foxconn jobs in china, that that would provide some insulation to apple in particular. But this week, theres this new news that the foxconn founder has said hes going to be running for president of taiwan, and he said that hes not going to bow to beijing. That has obviously kicked off some new investigations and that raises some pretty big questions, too. And if you look for the real cause of the real fault here, i think its a change in the regime in china, the change of the government in china. Xi jinping has become more and more confrontational and nationalistic. And so i sort of intimated that maybe it was u. S. Policies to blame. To me, its much more the chinese policies to blame, especially xi jinping becoming more nationalistic. To that point, do you think we should be more concerned, or if you were an elon musk or tim cook, you should be more concerned about policy changing in china, or policy changing in the u. S. , which is to say that theres increasingly a few around this idea of a reverse cfius, for example, in terms of looking at investments made not in the u. S. Or made in places like china. And whether he would block or slow those investments. Its a great question, and a reverse scfius would be really ratcheting things up. Stopping investments that we could do overseas. I think that most companies. You can watch apple and musk and tim cook. You can watch apple cooperate with musk companies, especially tesla, but also at times having to compete with them. This will get Even Stronger in the age of Artificial Intelligence, which is the big race thats about to happen. And thats what a lot of these investment rules are going to be, who gets to suck up all the data. Whether its data from selfdriving cars or data from phones. Walter, while we have you here, and you mentioned elon musk a couple of times, were going to have former Maryland Governor, larry hogan on in a couple of minutes. He resigned from two harvard fellowships recently over the response to a student letter blaming israel for the hamas attack. So here we are again. The difference between free speech and hate speech and what constitutes each. And you got any hard, fast rules for how were supposed to if we had hard and fast rules, we wouldnt keep stumble into these problems. We would decide that were going to censor or try to suppress types of speech. I think that one of the problems is students are going to be students, and you can have statements, we should all say, all right, lets not make a mountain out of this one. I do think that the hard and fast rule that you have to say at some point is when youre really threatening people and making it dangerous for them, thats just not protected by law. And we have to have as much free speech as possible. What if youre actually siding with terrorists and being outspoken proponents of terrorists in a terrorist attack. Should they not be hired. Should bill ackman get a list of people that were participating and make sure they dont get hired anywhere . You and i can easily say, you should never side with terrorists. And that terrorist attack by hamas was one of the worst in our lifetimes. You get back, though, to flipping the script on cancel culture. It used to be the right was all up in arms about culture. Now weve got it going the other way. I think, maybe, im always optimistic, i think maybe people seeing the shoe on both feet will make both sides realize youve got to believe reasonable on these things. But we cant automatically kneejerk into pure cancel culture. Theres no reasonable about this, i think. Walter, i know weve got to run, but as somebody who led the aspen institute, as a leader who had to raise money in part, that was part of the role, do you imagine that the president s of these universities given the pressure from the donors, can maintain their jobs longterm . I think a couple of those jobs are in trouble. You know, the trustees at a couple of those universities, not at harvard, i dont think, but i think penn is going through a lot of turmoil. You know, were lucky here at tulane, its a little bit less of a haironfire atmosphere. People are appalled by what hamas did in its terrorist attack. And i think youre going to see leadership at universities, at corporations have to navigate it. And this is just a great test of, can you express moral principles, but also allow free speech . And i guess its a learning experience for each of our students here. Walter, thank you. Walter isaacson. Good to see you. When we come back, we have more on this story about the consequences in academeya from the israel hamas war. Former Maryland Governor larry hogan will be joining us on his llshsion to withdraw from feowips at harvard. Squawk box will be right back. We are continuing to monitor the fallout from the attack on hamas especially in business and academia. Our next guest just withdrew an offer to participate in planned fellowships at harvard this fall. In a post on x, he said i, in his words, cannot condone the dangerous antisemitism that has taken root on their campus. Joining us now, former Maryland Governor larry hogan. In his letter to harvard president claudine gay, hogan wrote, he helps his resignation may help spur meaningful action to address antisemitism and restore the values that harvard should represent to the world. Governor, thanks for joining us. We were having a discussion about this, and i was once again kind of shocked by the nuance that we hear from people in discussing this issue. It is because theres no absolutes left in the world, because if this isnt an absolute, what is an absolute, if this situation and how you react to it is not . Well, yes, i think it is an absolute, when you have this was the day of the attacks by the terrorists, where they were beheading babies and killing and raping innocent women and elderly people, and to not come out and forcefully say that this was wrong, and to celebrate and congratulate and cheer for the terrorists acts, i think it was pretty outrageous. And of course, we do have free speech, and the students have the right to that speech, but they dont have the right to have the leaders of harvard just condone and ignore those kinds of things. And it was hate speech. And it was threatening to other people on campus. And its why i, you know, decided to take the stand they did. And what would you if you had been president of harvard, how would your response have been different than claudine gays response . I think there should have been an immediate and very strong and unequivocal response, and obviously, that did not happen. And, look, i was very much looking forward to going to these fellowships, as a guy who worked his way through school at a state university, at florida state, it was a big honor to be invited to come speak, to be a fellow at both the school of Public Health to talk about our nationleading response on covid and to talk at kennedy school, where i was going to talk about how we lower the temperature in politics and do away with some of the angry rhetoric and the toxic politics, but this i wrestled with this decision. I didnt take it likely, but i thought it was important to take a stand and to try to make a difference and to try to maybe persuade the president of the university to take some further and stronger actions. And im not alone. There has been almost universal condemnation, and members big donors to the university and people in the board and some other faculty and students were feeling threatened. I almost heard in their last interview, oh, boys will be boys. That was an old expression. I almost heard, students will be students. I remember the 60s. I watched that play out. And every generation, it is true. Students are going to say certain things, but i still think this is a different situation. And it cant be just thrown in to that collective excuse. That theyre young, theyre idealistic. Do you think its taking it too far that these students should be docked, the onces that were particularly outspoken and have trouble in their future lives in terms of employment and such. Is that taking it too far . Look, i didnt really even though i was shocked and dismayed by the conduct and some of the speech and what they were supporting, i thought it was unconscionable, but i didnt attack the students. I was critical of the uni university. Well, they would have to attack the students, to get to where you want, they would have to i dont know what enforcement by the university would look like ironically harvard was just recently voted as one of the worst schools in america on free speech which is one of the reasons why i was depends on the speech. In this case it was terrible speech and they didnt have any problem allowing it to continue. Governor, how much influence do you think the donor class to these universities should have . I thinka lot of people look at the wealthiest in the country who do donate enormous sums to these universities. Some say they should have enormous influence. Others say, you know what, the educators should be the ones who choose what happens. The universities have effectively been trying to sell influence to those donors for a very long time. They set up Advisory Councils with certain limits of how much money youre supposed to spend to be on those Advisory Councils. If youre on the advisory council, you get your dinner with the president of the university. Now a lot of those universities say, i know you paid for that product, but its a different story now. How do you think the public should think about that . They certainly should not have complete control over what happens at the university, but they have a right to speak up and express their opinions. In this case it wasnt just wealthy donors but also people who served on the board and lots of faculty members. Other people like me, i was going to be a vitsing fellow in two of the schools. I think its been pretty much across the board theres been criticism from all directions and really a lack of action on the part of harvard. It was a slight reaction to my letter yesterday where the president did address it and say that she was against antisemitism. Itwasnt as long as i think a lot of people would like to see. Governor, i know you thought long and hard about this, but did you give up the opportunity to go and actually try and teach a lesson or speak to some of these events . You look to try to bring down the political tensions and how you deescalate things. Stepping away and not engaging isnt usually one of those steps. Thats a really good point. I usually dont step away. This is something i care very deeply about. I just finished last week i finished a similar fellowship at the university of chicago and i very much enjoyed the opportunity to engage with the nations future leaders and to talk about issues and confront challenges. This is something i believe in, which is bipartisanship and doing something about the angry politics we have today. So i did wrestle where the decision. It was a difficult one. I didnt take it quickly or lightly, but i really felt that this was the right decision. Its gained a lot of attention since ive sent that letter yesterday, coverage, and did get some response out of harvard. Is there a chance you would go back . Is there anything they can do to convince you . You know, if they take further actions, id be honored to have the opportunity again. Im not sure theyre going to extend that invitation again. Thats sad because i was looking forward to it. If they take some of the actions that i and others are calling for, then certainly id like to engage with the students. Well, its not over, governor, in terms of demonstrations. We dont even know whats going to happen in the next few days. And i dont expect any of the its not going to change. Youre going to be witnessing it, so youre kind of pushing back against a huge tide at this point. I think its really were at a time when these heinous, vicious terrorist attacks, intentionally going after civilians, i think its time where leaders have to stand up. Absolutely. I agree. Im in shock. Were going to be shocked again and again and again in coming weeks im sure. Governor, thank you. Thank you. Squawk box will be right back. Onsider climate risk . Changing weather patterns are impacting the way we live and the value of businesses large and small. This can mean disruption to supply chains, changing demand for products and shifting regulation. What does this mean for your business, your clients, and your investments . Ice offers data and markets that can provide critical insight. Manage your climate risk with ice. Well come back to squawk box. Were a little more from an hour from opening bell. I think were all trying to make sense. Weve got a bunch of earnings reports this morning. I want to start with this. I dont know if you saw bill ackman went to twitter and said theres too much risk to have short bonds at current longterm rates. He says the economy is slowing faster than recent data suggests. Youve been more optimistic. Can you square those two eyes together . I can definitely square the idea around why one would stop being short bonds. It does seem the rally we saw in treasury yields came out of nowhere. It didnt seem to reflect the risk off sentiment we expect to see. We generally see people generally bonds are seen as a safe haven. So that selloff in bonds wasnt reflecting that. So there definitely was perhaps an exuberance, excitement around the economy that was not reflected in the risk off trade. I am optimistic on the state of the economy because of the state of the resilience were seeing in the consumer as well as strength in the employment market and the fact that earnings coming are expected to be quite positive for the Third Quarter. That doesnt mean there are a lot of rumblings underneath and transmission effect of Interest Rate rises that have not yet been seen in the economy. I firmly believe we havent seen anything close to what were going to see there. Weve been having conversations all morning about whats happening in israel. Im curious how you think what the risk of that spreading is and what the risk is, dare i say, to the markets. Of course, the humanitarian tragedy is first and foremost. When it comes to geopolitical risk recently, it hasnt tended to affect markets that much. Theres that brief moment of uncertainty. We saw that in the oil price. We see that when we see markets lessen gauged perhaps in the Financial Fundamentals and more focused on the political headlines, but its very short lived. Theres simply too much money on the sidelines looking to swoop in for any opportunity. Ive talked many times about the large balances in money market funds. For that reason i think were in a different paradigm when it comes to how geopolitical events affect the region. They tend to be quite localized and dont tend to affect the broader stock market. I do think the fact that nobody anticipated this action, it was a surprise, were adding that to the wall of worry. We still have the ukraine situation. Winter is coming. Were still looking at the effect it might have on Energy Prices. It could be that this is just one surprise too many. Certainly if it does escalate in the region. So far it doesnt look like thats likely to happen. But thats something were watching closely. Ethan, thank you very much for joining us. Look forward to talking to you again very soon. Before we hand our show off, a programming note. Youre not going to want to miss this. Tomorrow we have an interview with investor adam neumann, joining us from saudi arabias future Investment Initiative in riyadh. Of course, he has a long history in israel and will talk to us about that and so many other things. Well talk to him tomorrow. Thats going to happen at 8 10 e eastern time tomorrow. Lets take a kwek check on the markets. Dow up 175 points, s p 50025 points. Bitcoin at 34,000, maybe 35,000, still moving. Make sure you join us tomorrow. Squawk on the street begins right now. Good tuesday morning. Welcome to squawk on the street. Im carl quintailla with jim cramer and david faber. The bulls trying to put an end to five Straight Days of s p losses. Yields are stabilizing, which helps along with Solid Earnings and raised guidance from 3m, coke, verizon and ge. Our roadmap begins with the slew of corporate results. Gm, 3m among the names crossing the tape. Microsoft and alphabet